UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

 

 

Filed by the Registrant  ☒                                               Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐		Preliminary Proxy Statement
☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒		Definitive Proxy Statement
☐		Definitive Additional Materials
☐		Soliciting Material under § 240.14a-12

International Flavors & Fragrances Inc.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒		No fee required.
☐		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
		(1)		Title of each class of securities to which transaction applies:
		(2)		Aggregate number of securities to which transaction applies:
		(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
		(4)		Proposed maximum aggregate value of transaction:
		(5)		Total fee paid:
☐		Fee paid previously with preliminary materials.
☐		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
		(1)		Amount Previously Paid:
		(2)		Form, Schedule or Registration Statement No.:
		(3)		Filing Party:
		(4)		Date Filed:

 

 

 

Letter from the Chair & Chief Executive Officer

Dear Fellow Shareholder:

I am pleased to invite you to attend the 2021 Annual Meeting of Shareholders (“2021 Annual Meeting”) of International Flavors & Fragrances Inc.

It will be held at 10:00 a.m. Eastern Time on May 5, 2021 virtually and you can attend by visiting www.virtualshareholdermeeting.com/IFF2021. Please see “What do I need to do to attend the virtual 2021 Annual Meeting” on page 101 for further instructions.

Our Strategic Plan is Working

At the beginning of my tenure as Chief Executive Officer in 2014, we set out to re-define IFF with the ambitious goals of invigorating and exciting significantly more customers, challenging the boundaries of our industry and creating a foundation for long-term value creation. 2020 was a pivotal year in this journey. Our recently completed merger with DuPont’s Nutrition & Bioscience business transformed IFF into a global leader in high-value ingredients and solutions for the global food, beverage, home and personal care and health and wellness markets.

Throughout 2020, our team has worked relentlessly to align our business to realize the full potential of our new company while executing against our strategic pillars to establish IFF as our customers’ partner of choice, drive innovation across the portfolio, improve growth across key markets, leverage our expanded capabilities and portfolio across a broader customer base, build our talent and organization and continue our momentum in sustainability. IFF is now an approximately $35 billion market capitalization company, with an expected full year 2021 pro forma revenue of approximately $11.5 billion and approximately $2.7 billion of pro forma adjusted EBITDA – more than doubling the position we held just one year ago.¹

Through the careful execution of our strategy, we have created a global leader in taste, scent and nutrition. We now have an unmatched innovation platform and R&D capabilities and a broader set of ingredients solutions to offer a growing list of more than 45,000 customers. Importantly, our significantly refreshed Board of Directors and our experienced management team are laser-focused on continued flawless execution as we work to fully realize the full potential of our exciting new company.

We have prepared throughout the course of the year by realigning our global organization into four divisions – Nourish, Scent, Health & Biosciences and Pharma Solutions – to successfully integrate our business with N&B, meet our synergy commitments, better serve our customers’ evolving needs and maximize long-term shareholder value.

Key to Our Success

We place our customers and consumers at the center of everything we do, and this guiding principle continued to drive our success in 2020. But none of this would have been possible without our front-line workers and dedicated employees around the globe who worked tirelessly throughout the year to ensure the continuity of our business, fuel the global supply chain and fulfill the needs of our 45,000 customers worldwide.

Repeatedly throughout the COVID-19 pandemic, IFFers resiliently adapted, collaborated and innovated while managing supply chain disruptions and erratic customer demand to deliver for all IFF stakeholders. Our central vision – Be the partner for essential solutions – has guided our customer-centric strategy throughout 2020 and enabled us to consistently exceed expectations and fulfill the needs of our customers.

Thanks to the dedication of our employees and our relentless focus on our customers, we believe IFF is positioned for continued long-term success. The new IFF will be a stronger partner to customers worldwide, better positioned to apply science and creativity to push past traditional industry boundaries, as well as to capitalize on sustained and emerging consumer trends and heightened customer demand for

 

1	The Company provides these pro forma numbers on a non-GAAP basis as it cannot predict certain elements which are included in reported GAAP results.

integrated solutions and innovations. This positions us well to serve the most diverse customer base in the industry, comprised of global multinational champions, regional leaders, new and emerging brands and private labels alike.

Looking ahead to 2021, we expect to build on the momentum generated in 2020 to drive continued innovation across our portfolio, including strong advancements in delivery systems, modulation and naturals, as well as seek new opportunities in emerging adjacencies. We will do this while doubling-down on our commitment to enhancing our best asset – our talent – as we continue to build our organization, define our operating model and focus on growth acceleration.

Corporate Social Responsibility

We strive to align environmental, social, and governance (“ESG”) issues to our purpose and values. Over the past few years, we have redefined the way we envision sustainability. Customers and consumers of our products want to know if the products they are purchasing are responsibly sourced and produced in an environmentally conscious manner. Our sustainability vision and strategy are designed to address these global trends, and we are committed to making progress happen at every opportunity. In 2020, we were named for the first time to the Dow Jones Sustainability Indices, a family of best-in-class benchmarks for investors who recognize that sustainable business practices are critical to generating long-term shareholder value.

Your vote is important. I encourage you to review this Proxy Statement and the Company’s other communications to its shareholders carefully.

Thank you for your support and interest in IFF.

Sincerely,

 

 

Andreas Fibig

Chair and Chief Executive Officer

Cautionary Statement Under The Private Securities Litigation Reform Act of 1995

This letter includes “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s expectations regarding the combination with DuPont de Nemours, Inc.’s (“DuPont”) Nutrition & Biosciences business. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the Company’s Securities and Exchange Commission (“SEC”) filings, including the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2021 and subsequent filings with the SEC. The Company wishes to caution readers that certain important factors may have affected and could in the future affect the Company’s actual results and could cause the Company’s actual results for subsequent periods to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on the Company’s business. Accordingly, the Company undertakes no obligation to publicly revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Notice of 2021 Annual Meeting of Shareholders

 

Date and Time   Wednesday, May 5, 2021 10:00 a.m. Eastern Daylight Time   Place   Meeting live via the Internet. Please visit: www.virtualshareholdermeeting.com/IFF2021*   Items to be Voted On   1.   Elect 13 members of the Board of Directors for a one-year term expiring at the 2022 Annual Meeting of Shareholders.   2.     Ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the 2021 fiscal year.   3.     Approve, on an advisory basis, the compensation of our named executive officers in 2020.   4.     Approve our 2021 Stock Award and Incentive Plan.   5.    Transact such other business as may properly come before the 2021 Annual Meeting and any adjournment or postponement of the 2021 Annual Meeting.   Record Date   Only shareholders of record as of the close of business on March 8, 2021 may vote at the 2021 Annual Meeting.   Sincerely,           Andreas Fibig Chairman and Chief Executive Officer March 23, 2021						Virtual Meeting   You can attend our virtual 2021 Annual Meeting by visiting www.virtualshareholdermeeting.com/IFF2021. Be sure to have the 16 digit Control Number we have provided to you to join the meeting. Our 2021 Annual meeting will start at 10:00 a.m. Eastern Daylight Time.   Proxy Voting   It is important that your shares be represented at the 2021 Annual Meeting, regardless of the number of shares you may hold. Whether or not you plan to attend, please vote using the Internet, by telephone or by mail, in each case by following the instructions in our proxy statement.   Proxy Voting Methods       Telephone Internet Mail
						Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on May 5, 2021:   Our Notice, Proxy Statement and 2021 Annual Report are available at www.proxyvote.com.   TO FACILITATE THE TIMELY RECEIPT OF YOUR PROXY, WE ENCOURAGE YOU TO VOTE BY TELEPHONE OR INTERNET TODAY.   We are making the Proxy Statement and the form of proxy first available on or about March 23, 2021.
								521 W. 57th Street   New York, NY 10019

 

*

As part of our effort to maintain a safe and healthy environment at our 2021 Annual Meeting for our employees and shareholders and after closely monitoring statements issued by the World Health Organization (who.int), the Centers for Disease Control and Prevention (cdc.gov) and the New York State Department of Health (health.ny.gov) regarding COVID-19, we will hold the 2021 Annual Meeting online at www.virtualshareholdermeeting.com/IFF2021, as permitted under the emergency order of New York State. Although we intend to hold our 2021 Annual Meeting virtually, in the event that New York State law does not allow virtual-only meetings at the time of our 2021 Annual Meeting, we will also hold an in-person meeting at the same date and time at our principal executive office at 521 W. 57th Street, New York, NY 10019 in addition to the virtual meeting. In such case, we will announce the decision to do so at least one week in advance of the 2021 Annual Meeting, by press release and in a filing with the U.S. Securities and Exchange Commission, as well as in materials made available at www.proxyvote.com, and we strongly encourage you to check this website prior to the 2021 Annual Meeting. Note that the decision to proceed with a virtual-only meeting this year does not necessarily mean that we will utilize a virtual-only format or any means of remote communication for future annual meetings.

PROXY STATEMENT SUMMARY

 

		We provide below highlights of certain information in this Proxy Statement. As it is only a summary, please refer to the complete Proxy Statement and 2021 Annual Report before you vote.

2020 Highlights

We Continue to Position IFF for Significant Long-Term Growth

Amid the challenges and complexity of 2020, we finished the year with solid financial results. These results are a direct testament to the diversity of our business, the essential nature of many of our products and the resilience and dedication of our global teams to deliver performance across the organization.

 

2020 Results
Net Sales		$5.1 B
Operating Profit		$566 M
Adjusted Operating Profit*		$730 M
Diluted EPS		$3.21
Adjusted Diluted EPS*		$4.38
Adjusted Diluted EPS ex Amortization*		$5.70

* See reconciliation of GAAP to Non-GAAP financial measures in Exhibit A to this Proxy Statement.

In 2020, we executed towards the closing of our transformational combination with DuPont’s Nutrition & Biosciences business (“N&B Business”), while planning our integration with the N&B Business. With the closing of the combination with the N&B Business (the “N&B Transaction”) completed in February 2021, we realigned our global organization into four divisions to meet our synergy commitments, anticipate customer needs faster and deliver on our long-term growth and profitability goals. Our former Taste, Food & Beverage division is now called Nourish. To nourish is to feed with purpose, a commitment that guides IFF’s partnership with all of our stakeholders. In addition to Nourish, the combined company’s divisions include Scent, which pioneers the discovery and development of ingredients that create unique fragrances for fine perfumes, beauty, personal care and household goods; Health & Biosciences, a leading innovation partner developing safer, healthier and more sustainable solutions across a broad range of consumer product, industrial and agricultural sectors; and Pharma Solutions, a trusted leader in a highly regulated industry that develops the ingredients, products and applications that support the global production of pharma and dietary supplements.

Following the N&B Transaction and in 2021, we are now reimagining what it means to partner with our customers through a platform at the forefront of consumer and commercial product development and an enhanced ability to deliver in-demand, differentiated solutions. Guided by our customer-centric approach, unmatched R&D capabilities and a storied legacy of artistry, we are forging our way forward as a new industry leader.

 

IFF  |  2021 PROXY STATEMENT  i

PROXY STATEMENT SUMMARY

 

Our Corporate Governance Policies Reflect Best Practices

 

Ø    All Directors other than our CEO are Independent		Ø    Majority Voting and Director Resignation Policy in Uncontested Elections   Ø    Executives and Directors are Subject to Rigorous Stock Retention Guidelines   Ø    No Limitation on Shareholder Litigation Rights   Ø    Proxy Access By-Law Provisions   Ø    Prohibition on Short Sales and Hedging of our Stock by our Employees, Officers and Directors   Ø    No Exclusive Forum or Fee-Shifting Provisions   Ø    Extensive Executive Clawback Policy   Ø    Long Standing Commitment to Sustainability
Ø    Strong Pay for Performance Practice
Ø    Diverse Board Brings Balance of Skills, Professional Experience and Perspectives
Ø    Annual Election of Directors
Ø    Independent Lead Director Facilitates and Strengthens Board’s Independent Oversight
Ø    No Guaranteed Pay Increases or Equity Awards for NEOs
Ø    Annual Board and Committee Assessments
Ø    Formal Board and Executive Succession Planning
Ø    No Shareholder Rights Plan (“Poison Pill”)

Proposals and Board Recommendations

 

Proposal 1   Election of 13 Director Nominees						The Board recommends a vote FOR the election of all Director Nominees   Our Nominating and Governance Committee and our Board have determined that each of the nominees possesses the skills and qualifications to collectively comprise a highly effective Board. These 13 nominees include 6 directors designated by DuPont who joined our Board upon completion of the N&B Transaction in February 2021.
						See “Proposal 1 — Election of Directors” beginning on page 1 of this Proxy Statement.

 

ii  IFF  |  2021 PROXY STATEMENT

PROXY STATEMENT SUMMARY

 

Director Nominees

 

Committee Membership

Name and Primary  Occupation

Joined

Age

Indep.

Audit

Comp.

Nom.& Gov.

Inn. & Sus.

Kathryn J. Boor Dean of the Graduate School and Vice Provost for Graduate Education, Cornell University

2021

62

●

Edward D. Breen* CEO, DuPont de Nemours, Inc.

2021

65

●

●

Carol Anthony Davidson Former Senior Vice President, Controller & CAO of Tyco International Ltd.

2021

65

●

Michael L. Ducker Former President and CEO, FedEx Freight

2014

67

●

●

●

Roger W. Ferguson, Jr. President and CEO, TIAA

2010

69

●

●

John F. Ferraro Former Global COO, Ernst & Young

2015

65

●

Andreas Fibig Chair and CEO, IFF

2011

59

●

Christina Gold Former CEO, The Western Union Company

2013

73

●

●

Ilene Gordon Former Chair, President & CEO of Ingredion Incorporated

2021

67

●

●

Matthias J. Heinzel CEO, Life Science division of Merck KGaA, Darmstadt, Germany (effective April 1, 2021)

2021

54

●

●

Dale F. Morrison* Founding Partner of Twin Ridge Capital Management

2011

72

●

●

●

Kåre Schultz President and CEO, Teva Pharmaceutical Industries Ltd.

2021

59

●

●

Stephen Williamson Senior Vice President and CFO, Thermo Fisher Scientific

2017

54

●

Committee Chair         Financial Expert   *  Mr. Morrison is our current Lead Director. Mr. Breen will assume the role on May 5, 2021.

 

IFF  |  2021 PROXY STATEMENT  iii

PROXY STATEMENT SUMMARY

 

Skills and Qualifications

Our Board regularly evaluates desired attributes for directors in light of the Company’s strategy and needs. Key skills, qualifications and experience currently maintained on the Board include:

 

 

Proposal 2   Ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting  firm for the 2021 fiscal year				The Board recommends a vote FOR this proposal   Our Board recommends that shareholders vote “FOR” the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the 2021 fiscal year.
				See “Proposal 2 — Ratification of Independent Registered Public Accounting Firm” beginning on page 37 of this Proxy Statement.

 

Proposal 3   Approve, on an advisory basis, the compensation of our named executive officers in 2020				The Board recommends a vote FOR this proposal   Our Board recommends a vote “FOR” the advisory vote to approve executive compensation for the 2020 performance year.
				See “Proposal 3 — Advisory Vote on Executive Compensation” on page 64 of this Proxy Statement and “Compensation Discussion and Analysis” beginning on page 41 of this Proxy Statement.

 

iv  IFF  |  2021 PROXY STATEMENT

PROXY STATEMENT SUMMARY

 

Compensation Governance

Our pay-for-performance compensation program is part of the strong compensation governance that we have adopted.

 

What We Do				Significant portion of NEO compensation in the form of at-risk variable compensation
				Variable compensation based on multiple performance metrics to encourage balanced incentives
				Appropriate mix of fixed and variable compensation to reward company, business unit and individual performance
				Majority of variable compensation awarded as equity-based awards
				Executive clawback policies to recoup cash and equity compensation upon certain triggering events
				Executives required to meet share retention guidelines
				Independent compensation consultant
				Annual risk assessment of compensation programs
What We Don’t Do				No tax gross-ups on severance payments
				No single-trigger vesting of cash or equity-based awards upon change in control
				No short-sales, hedging or pledging of our stock by our employees, officers or directors
				No fixed-duration employment agreements with executive officers
				No stock option/SAR repricing or exchange of underwater options or SARs for cash without shareholder approval

 

Proposal 4   Approve our 2021 Stock Award and Incentive Plan				The Board recommends a vote FOR this proposal   Our Board recommends a vote “FOR” the approval of our 2021 Stock Award and Incentive Plan.
				See “Proposal 4 — “Approval of our 2021 Stock Award and Incentive “Plan” on page 88 of this Proxy Statement and “2021 Stock Award and Incentive Plan” beginning on page A-1 of this Proxy Statement.

 

IFF  |  2021 PROXY STATEMENT  v

PROXY STATEMENT SUMMARY

 

TABLE OF CONTENTS

 

 

vi  IFF  |  2021 PROXY STATEMENT

Proposal 1 Election of Directors

Our Current Board

Our Board of Directors (“Board”) currently has thirteen members, consisting of (i) seven directors who served on the Company’s Board prior to the closing of the merger with DuPont de Nemours, Inc.’s (“DuPont”) Nutrition & Biosciences business (the “N&B Transaction”) (the “IFF designated directors”) and (ii) six directors designated by the DuPont board of directors (the “DuPont designated directors”) pursuant to the terms of the Merger Agreement.

Upon the recommendation of the Nominating and Governance Committee, our Board has nominated the following current directors for election at the 2021 Annual Meeting, each for a one-year term that expires at the 2022 Annual Meeting:

 

Andreas Fibig (Chair)
Kathryn J. Boor		Christina Gold
Edward D. Breen*		Ilene Gordon
Carol Anthony Davidson		Matthias Heinzel
Michael L. Ducker		Dale F. Morrison*
Roger W. Ferguson, Jr.		Kåre Schultz
John F. Ferraro		Stephen Williamson

 

*	Mr. Morrison is our current Lead Director. Mr. Breen will assume the role of Lead Director on May 5, 2021.

Each director will serve until the next annual meeting of shareholders and until a successor is elected and qualified, or until his or her earlier resignation, removal, or death. If any of our Board’s nominees for director becomes unavailable to serve before the 2021 Annual Meeting (which we do not anticipate), our Board may decrease the number of directors to be elected or designate a substitute nominee for that vacancy.

Director Nominee Experience and Qualifications

Board Membership Criteria and Selection

Our Certificate of Incorporation provides that we have at least six but not more than 15 directors. To ensure independence and to provide the breadth of needed expertise and diversity of our Board, the Board periodically reviews its size and makes appropriate adjustments pursuant to our By-Laws. In addition, our Nominating and Governance Committee, together with the other Board members, from time to time, as appropriate, identify the need for new Board members.

Board candidates are considered based on various criteria which may change over time as our business evolves and as the composition of the Board changes. At a minimum, our Nominating and Governance Committee considers the following factors as part of its review of all director candidates and in recommending potential director candidates:

 

•

judgment, character, expertise, skills and knowledge useful to the oversight of our business;

 

•

diversity of viewpoints, backgrounds, experiences, gender, race, ethnicity, national origin and other demographics;

 

IFF  |  2021 PROXY STATEMENT  1

 PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

•

business or other relevant experience; and

 

•

the extent to which the interplay of the candidate’s expertise, skills, knowledge and experience with that of other Board members will build a Board that is effective, collegial and responsive to our needs and to the requirements and standards of the New York Stock Exchange (“NYSE”) and the Securities and Exchange Commission (“SEC”).

Proposed director candidates who satisfy the criteria and who otherwise qualify for membership on the Board are identified by the Nominating and Governance Committee. In identifying candidates, the Nominating and Governance Committee seeks input and participation from other Board members and other appropriate sources so that all points of view are considered and the best possible candidates identified. The Nominating and Governance Committee may also engage a search firm to assist it in identifying potential candidates. Members of the Nominating and Governance Committee and other Board members, as appropriate, interview selected director candidates, evaluate the director candidates and determine which candidates are to be recommended by the Nominating and Governance Committee to the Board. Our Nominating and Governance Committee evaluates the suitability of potential candidates recommended by shareholders in the same manner as other candidates recommended to the Nominating and Governance Committee.

We believe that each of our nominees has the experience, skills and qualities to fully perform his or her duties as a director and to contribute to our success. Each of our nominees is being nominated because he or she adheres to the highest standards of personal integrity and possesses excellent interpersonal and communication skills, is highly accomplished in his or her field, has an understanding of the interests and issues that are important to our shareholders and is able to dedicate sufficient time to fulfilling his or her obligations as a director. Our nominees as a group complement each other and each other’s respective experiences, skills and qualities.

 

Current or Prior CEO

Operations / Manufacturing

Consumer Products

Innovation / R&D

M&A / Integrations

Human Capital & Sustainability

Finance/ Accounting

ERM / Risk Management

International / Emerging Markets

Other Public Board Experience

Kathryn Boor

✓

✓

✓

✓

Edward Breen

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Carol A. Davidson

✓

✓

✓

✓

✓

✓

Mike Ducker

✓

✓

✓

✓

✓

✓

✓

✓

Roger Ferguson

✓

✓

✓

✓

✓

✓

✓

John Ferraro

✓

✓

✓

✓

✓

✓

✓

✓

Andreas Fibig

✓

✓

✓

✓

✓

✓

✓

✓

Christina Gold

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Ilene Gordon

✓

✓

✓

✓

✓

✓

✓

✓

Matthias Heinzel

✓

✓

✓

✓

✓

✓

Dale Morrison

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Kåre Schultz

✓

✓

✓

✓

✓

✓

✓

✓

✓

✓

Stephen Williamson

✓

✓

✓

✓

✓

✓

 

2  IFF  |  2021 PROXY STATEMENT

 PROPOSAL 1 — ELECTION OF DIRECTORS  

 

 

 

Diversity and Tenure

Diversity is one of the factors that the Nominating and Governance Committee considers in identifying and selecting director nominees. The Board recognizes the value of diversity and strives to assemble a Board with diverse skills, professional experience, global, geographic and other perspectives, age, race, ethnicity, gender, gender identity, sexual orientation or identity, national origin and cultural background, to include in the pool from which nominees for the Board are selected.

In connection with the N&B Transaction, we refreshed our Board by appointing six new members and increasing the size of the Board from eleven to thirteen members. As a result, more than half of our directors currently have a tenure of less than 3 years and our average director tenure is 3.6 years.

We Strive for a Balanced and Diverse Board

 

*	Tenure and age are as of February 16, 2021.

Shareholder Nominations and Proxy Access

Under our By-Laws, if a shareholder wishes to submit a director candidate for consideration by the Nominating and Governance Committee, or wishes a director nomination to be included in the Company’s proxy statement for an annual meeting pursuant to our proxy access by-law, the shareholder must deliver or mail notice of the request to the Company’s Corporate Secretary, in writing, so that it is received not less than 90 days nor more than 120 days prior to the anniversary date of the prior year’s annual meeting of shareholders. However, if the annual meeting is not within 30 days of the anniversary date of the prior year’s annual meeting, such notice must be received by the Corporate Secretary no later than 10 days following the mailing of notice of the annual meeting or public disclosure of the annual meeting date, whichever occurs first. The notice must be accompanied by the information concerning the director candidate and nominating shareholder described in Article I, Section 3 and Section 4 of our By-Laws. The Nominating and Governance Committee may also request any additional background or other information from any director candidate or recommending shareholder as it may deem appropriate. Our proxy access by-law permits an eligible shareholder (or group of up to 20 eligible shareholders) who owns shares representing at least 3% of our outstanding shares, and has held the shares for at least three years, to nominate and include in our proxy materials for an annual meeting, director candidates constituting up to 20% of our Board.

 

IFF  |  2021 PROXY STATEMENT  3

 PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Continued Service

The Nominating and Governance Committee annually reviews each Board member’s suitability for continued service as a member of our Board and recommends to the Board whether such member should be re-nominated. In addition, each director is required to promptly tender his or her resignation for consideration to the Chair of the Nominating and Governance Committee if, during his or her tenure as a director, such director:

 

•

has a material change in employment,

 

•

has a significant change in personal circumstances which may adversely affect his or her reputation, or the reputation of the Company, or

 

•

intends to join the board of another for-profit company,

so that the Nominating and Governance Committee can review the change and make a recommendation to the full Board regarding the director’s continued service. Such resignation becomes effective only upon acceptance by the Board. In addition, if a Director is an active chief executive officer of another public company, such Director shall not serve on the board of more than two public companies (including IFF), other than the company of which he or she is the chief executive officer.

 

Ö   YOUR BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES

 

4  IFF  |  2021 PROXY STATEMENT

 PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Nominees for Director

Kathryn J. Boor

 

Director Since: 2021     Committees: •  Innovation and Sustainability (Chair)     Age: 62

Business Experience   Dr. Boor is the Dean of the Graduate School and Vice Provost for Graduate Education at Cornell University. Prior to appointment to her current role on October 1, 2020, Dr. Boor served as the Ronald P. Lynch Dean of the College of Agriculture and Life Sciences at Cornell University since 2010. Dr. Boor earned a B.S. in Food Science from Cornell University, an M.S. in Food Science from the University of Wisconsin and a Ph.D. in Microbiology from the University of California, Davis.

Public Board Memberships   •  Seneca Foods Corporation, a food processing company   Additional Accomplishments and Memberships   •  Director, Boyce Thompson Institute •  Director, Foundation for Food and Agriculture Research •  Trustee, International Life Sciences Institute •  Director, US-Israel Binational Agricultural Research and Development Fund   Qualifications   Dr. Boor brings to the Board extensive knowledge of food and beverage science, including expertise in food safety and quality. Until assuming her current role in October 2020, Dr. Boor was responsible for developing and implementing the strategic direction of Cornell’s College of Agriculture and Life Science and made important contributions in food and beverage research.

 

IFF  |  2021 PROXY STATEMENT  5

 PROPOSAL 1 — ELECTION OF DIRECTORS  

 

 

 

Edward D. Breen

 

Director Since: 2021     Committees: •  Nominating and Governance     Lead Director as of Annual Meeting     Age: 65

Business Experience   Mr. Breen is the Executive Chairman and Chief Executive Officer of DuPont de Nemours, Inc. Before becoming CEO, he was Executive Chairman of DuPont and previously served as CEO of DowDuPont and DuPont since 2015. Mr. Breen was the Chief Executive Officer of Tyco International Ltd. from July 2002 until September 2012, was the Chairman of its Board until March 2016 and was one of its directors until September 2016. Prior to joining Tyco International, Mr. Breen was President and Chief Operating Officer of Motorola from January 2002 to July 2002; Executive Vice President and President of Motorola’s Networks Sector from January 2001 to January 2002; Executive Vice President and President of Motorola’s Broadband Communications Sector from January 2000 to January 2001; Chairman, President and Chief Executive Officer of General Instrument Corporation from December 1997 to January 2000; and, prior to December 1997, President of General Instrument’s Broadband Networks Group.

Public Board Memberships   •  Comcast Corporation, a media and technology company •  DuPont de Nemours, Inc., a multi-industry specialty solutions company   Additional Accomplishments and Memberships   •  Trustee, Grove City College •  Trustee, Lebanon Valley College •  Trustee, The Hun School of Princeton   Qualifications   Mr. Breen brings to the Board extensive global management experience, including leading the strategic direction and execution of DuPont and its transformative separation from DowDuPont.

 

6  IFF  |  2021 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Carol Anthony (John) Davidson

 

Director Since: 2021     Committees: •  Audit     Age: 65

Business Experience   Mr. Davidson served as Senior Vice President, Controller and Chief Accounting Officer of Tyco International from January 2004 to September 2012. In that role, he led financial reporting, internal controls and accounting policies and processes. Mr. Davidson was a member of Tyco’s senior leadership team that established financial integrity, operational excellence and strong ethical practices across Tyco’s global operations. Prior to Tyco, Mr. Davidson was Vice President of audit, risk and compliance for Dell Computer Corporation where he served in several executive roles, including Chief Compliance Officer, Vice President and Corporate Controller and Vice President of Internal Audit. Earlier in his career, he spent 16 years with Eastman Kodak Company where he led the internal audit function and previously served in various accounting and financial leadership roles. Mr. Davidson began his career in public accounting at Arthur Andersen & Co.

Public Board Memberships   •  TE Connectivity, a consumer electronics company •  FMC Corporation, an agricultural sciences company   Additional Accomplishments and Memberships   •  Trustee of University of Rochester •  Former Member of the Board of Governors of the Financial Industry Regulatory Authority •  Former Trustee of the Financial Accounting Foundation •  Inducted into the Financial Executives International Hall of Fame in 2016   Qualifications   Mr. Davidson brings to the Board years of experience overseeing financial reporting, internal controls and developing accounting policies for public companies. He is a Certified Public Accountant, with more than 30 years of leadership experience across multiple industries.

 

IFF  |  2021 PROXY STATEMENT  7

 PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

 

Michael L. Ducker

 

Director Since: 2014     Committees: •  Compensation •  Innovation and Sustainability     Age: 67

Business Experience   Mr. Ducker served as President and Chief Executive Officer of FedEx Freight from January 2015 to August 2018. In that role, he provided strategic direction for FedEx’s less-than-truckload (LTL) companies throughout North America and for FedEx Custom Critical, a leading carrier of time sensitive, critical shipments. Mr. Ducker was formerly the Chief Operating Officer and President of International for FedEx Express, where he led all customer-facing aspects of the company’s U.S. operations and its international business, spanning more than 220 countries and territories across the globe. Mr. Ducker also oversaw FedEx Trade Networks and FedEx Supply Chain. During his FedEx career, which began in 1975, Mr. Ducker has also served as president of FedEx Express Asia Pacific in Hong Kong and led the Southeast Asia and Middle East regions from Singapore, as well as Southern Europe from Milan, Italy.

Public Board Memberships   •  nVent Electric plc, a global provider of electrical connection and protection solutions •  U.S. Xpress Enterprises, Inc., a transportation company operating in the truckload space   Additional Accomplishments and Memberships   •  Executive Committee and Leadership Council of the U.S. Chamber of Commerce •  Board of Amway Corporation •  National Advisory Board of the Salvation Army •  Executive Committee and Treasurer of the American Trucking Association from 2014 to 2019 •  Board of the American Transportation Research Institute from 2014 to 2019 •  Board member of University of Mississippi Foundation   Qualifications   Mr. Ducker’s significant senior executive and international experience coupled with his extensive expertise in complex operations and logistics complements the strength of our Board. Mr. Ducker’s career with FedEx Freight provided him with knowledge of a number of important areas that assist our Board, including leadership, risk assessment and operational issues.

 

8  IFF  |  2021 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Roger W. Ferguson, Jr.

 

Director Since: 2010     Committees: •  Compensation (Chair) •  Nominating and Governance     Age: 69

Business Experience   Mr. Ferguson has served as the President and Chief Executive Officer of TIAA (formerly TIAA-CREF) since 2008 and intends to retire in 2021. Prior to joining TIAA, Mr. Ferguson served as Chairman of Swiss Re America Holding Corporation, a global insurance company, from 2006 to 2008. Mr. Ferguson served as Vice Chairman of the Board of Governors of the U.S. Federal Reserve System from 1999 to 2006. He represented the Federal Reserve on several international policy groups and served on key Federal Reserve System committees, including Payment System Oversight, Reserve Bank Operations and Supervision and Regulation. In addition, Mr. Ferguson led the Fed’s initial response on 9/11. From 1984 to 1997, Mr. Ferguson was an associate and partner at McKinsey & Company.

Public Board Memberships   •  General Mills, Inc., a manufacturer and marketer of branded consumer foods •  Alphabet Inc., the parent holding company of Google Inc. •  Corning Incorporated, a leading innovator in materials science, effective April 1, 2021   Additional Accomplishments and Memberships   •  Board member of a number of charitable and non-governmental organizations, including the Institute for Advanced Study, Memorial Sloan Kettering Cancer Center, Smithsonian Institution, and the Teacher’s College of Columbia University •  Member of the Economic Club of New York •  Member of the Council on Foreign Relations •  Member of the Group of Thirty •  Fellow of the American Academy of Arts and Sciences, and Co-Chair of the Academy’s Commission on the Future of Undergraduate Education •  Fellow of the American Philosophical Society •  Former Chairman of The Conference Board •  Previous Chairman and Executive Committee Member of the Business-Higher Education Forum   Qualifications   Mr. Ferguson brings to our Board his sound business judgment, extensive knowledge of the financial services industry and regulatory experience. We benefit from Mr. Ferguson’s service as Chief Executive Officer of TIAA and his experience as a member of other public company boards, which provides him an enhanced perspective on issues applicable to our company.

 

IFF  |  2021 PROXY STATEMENT  9

 PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

John F. Ferraro

 

Director Since: 2015     Committees: •  Audit (Chair)     Age: 65

Business Experience   Mr. Ferraro was the Executive Vice President, Strategy and Sales of Aquilon Energy Services, a software company for the energy industry from February 2019 to July 2019. He was the Global Chief Operating Officer of Ernst & Young, a leading professional services firm, from 2007 to January 2015. In that role, he was responsible for the overall operations and services of Ernst & Young worldwide. Prior to the COO role, Mr. Ferraro served in several leadership positions, including as Global Vice Chair of Audit and as the senior advisory partner on some of the firm’s largest accounts. Mr. Ferraro began his career with Ernst & Young Milwaukee in 1976 and has served a variety of global companies. He has worked in Europe (London and Rome), throughout the Midwest (Chicago, Cleveland and Kansas City) and New York.

Public Board Memberships   •  Advance Auto Parts, Inc., an automotive aftermarket parts provider •  ManpowerGroup Inc., a global workforce solution and service provider   Additional Accomplishments and Memberships   •  Member of the Global Executive Board of Ernst & Young from 2001-2002 and 2004-2014 •  Founded the Audit Committee Leadership Network in 2003 •  Former Chair of the Board of Trustees of Boston College High School •  Former Chair of the Board of Trustees of Marquette University •  Practiced as a CPA and is a member of the American Institute of Certified Public Accountants   Qualifications   Mr. Ferraro brings to our Board his extensive executive, auditing and accounting experience working with large and global corporations. We benefit from his extensive understanding of global business operations, markets and risks.

 

10  IFF  |  2021 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Andreas Fibig

 

		Director Since: 2011     Chair of the Board     Committees: •  Innovation & Sustainability     Age: 59		Business Experience   Mr. Fibig joined our Board in 2011 and has been our Chair and Chief Executive Officer since 2014. Previously, he served as President and Chairman of the Board of Management of Bayer HealthCare Pharmaceuticals, the pharmaceutical division of Bayer AG, from September 2008 to September 2014. Prior to that position, Mr. Fibig held a number of positions of increasing responsibility at Pfizer Inc., a research-based pharmaceutical company, including as Senior Vice President of the US Pharmaceutical Operations group from 2007 through 2008 and as President, Latin America, Africa and Middle East from 2006 through 2007.				Public Board Memberships   •  Board of Novo Nordisk, a global healthcare company •  Board of Bunge Limited, a leading agribusiness and food company with integrated operations from September 2016 to May 2018   Additional Accomplishments and Memberships   •  Executive Committee of the World Business Council for Sustainable Development, a CEO-led organization focused on creating a sustainable future for business, society and the environment •  Chairman, German American Chamber of Commerce, Inc. •  Chairman and President, 1014 Inc. (Formerly German Academy of New York)   Qualifications   Mr. Fibig’s prior work experience with pharmaceutical companies has provided him with extensive experience in international business, product development and strategic planning, which are directly translatable to his work as our Chairman and CEO.

 

IFF  |  2021 PROXY STATEMENT  11

 PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Christina Gold

 

Director Since: 2013     Committees: • Compensation • Nominating and Governance (Chair)     Age: 73

Business Experience   From September 2006 until September 2010, Ms. Gold was Chief Executive Officer, President and a director of The Western Union Company, a leader in global money movement and payment services. She was President of Western Union Financial Services, Inc. and Senior Executive Vice President of First Data Corporation, former parent company of The Western Union Company and provider of electronic commerce and payment solutions, from May 2002 to September 2006. Prior to that, Ms. Gold served as Vice Chairman and Chief Executive Officer of Excel Communications, Inc., a former telecommunications and e-commerce services provider, from October 1999 to May 2002. From 1998 to 1999, Ms. Gold served as President and CEO of Beaconsfield Group, Inc., a direct selling advisory firm that she founded. Prior to founding Beaconsfield Group, Ms. Gold spent 28 years (from 1970 to 1998) with Avon Products, Inc., a leading global beauty company, in a variety of positions, including as Executive Vice President, Global Direct Selling Development, Senior Vice President and later President of Avon North America, and Senior Vice President & CEO of Avon Canada.

Public Board Memberships   •  Korn/Ferry International, a leadership and talent management organization •  ITT Corporation, a manufacturer of highly engineered components and technology solutions for industrial markets, from 1997 to May 2020 •  Exelis, Inc., a diversified, global aerospace, defense and information solutions company, from October 2011 to May 2013   Additional Accomplishments and Memberships   •  Board of New York Life Insurance, a private mutual life insurance company, from 2001 to April 2020 •  Board of Safe Water Network, a non-profit organization working to develop locally owned, sustainable solutions to provide safe drinking water •  Board of Governors of Carleton University in Ottawa, Canada   Qualifications   Ms. Gold brings a number of valuable characteristics to our Board, including her extensive international and domestic business experience, her familiarity with the Company’s customer base, her financial expertise and her prior experience as a chief executive officer.

 

12  IFF  |  2021 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Ilene Gordon

 

Director Since: 2021     Committees: • Compensation     Age: 67

Business Experience   Ms. Gordon is the retired Chair, President and Chief Executive Officer of Ingredion Incorporated. Ms. Gordon served as Executive Chairman of the Board of Ingredion Incorporated from January 2018 to July 2018, and Chairman of the Board, President and Chief Executive Officer from May 2009 to December 2017. Ms. Gordon was President and Chief Executive Officer of Rio Tinto’s Alcan Packaging, a multinational business unit engaged in the production of flexible and specialty packaging, from 2007 to 2009 and held various senior management positions of increasing responsibility at its affiliate and predecessor companies from 1999 to 2007.

Public Board Memberships   •  International Paper, a paper and packaging company •  Lockheed Martin, a global security and aerospace company   Additional Accomplishments and Memberships   •  Board of Trustees and Vice Chair, The Conference Board •  Former Chairman, The Economic Club of Chicago   Qualifications   Ms. Gordon brings to the Board extensive knowledge of the development and implementation of growth strategies from her experience as chief executive officer at a leading global producer of nature-based ingredient solutions for global food, beverage, brewing and industrial customers.

 

IFF  |  2021 PROXY STATEMENT  13

 PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Matthias Heinzel

 

Director Since: 2021     Committees: • Innovation and Sustainability     Age: 54

Business Experience   Dr. Heinzel will serve as the CEO of the Life Science division of Merck KGaA, Darmstadt, Germany, effective April 1, 2021. He served as President of DuPont’s Nutrition & Biosciences business from April 2019 to February 2021. From 2003 to March 2019, Dr. Heinzel held several leadership roles at DuPont, including as President, Nutrition & Health for the Specialty Products Division, President, Nutrition & Health, and Global Business Director for the Enablers Division. He worked in Germany, the United States and Denmark. Earlier in his career, Dr. Heinzel was a Senior Management Consultant with McKinsey where he served international clients in the technology, telecommunications and process industry. He then held several leadership roles in marketing, strategy and business development in the telecommunications industry.

Additional Accomplishments and Memberships   •  President, DuPont Nutrition & Biosciences, from April 2019 to February 2021 •  President, DuPont Nutrition & Health, from 2015 to 2019   Qualifications   Dr. Heinzel brings to the Board deep industry experience from having overseen the strategic direction and operations of DuPont N&B. He has worked closely with IFF throughout the integration planning stage.

 

14  IFF  |  2021 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Dale F. Morrison

 

Director Since: 2011     Committees: • Audit • Compensation • Nominating and Governance     Former Lead Director     Age: 72

Business Experience   Mr. Morrison is a founding partner of Twin Ridge Capital Management, a private equity firm. Prior to Twin Ridge, he founded TriPointe Capital Partners in 2011. From 2004 until 2011, Mr. Morrison served as the President and Chief Executive Officer of McCain Foods Limited, an international leader in the frozen food industry. A food industry veteran, his experience includes service as Chief Executive Officer and President of Campbell Soup Company, various roles at General Foods and PepsiCo and as an operating partner of Fenway Partners, a private equity firm.

Public Board Memberships   •  InterContinental Hotels Group, an international hotel company •  Trane Inc., a manufacturer of heating, ventilating and air conditioning systems, from 2005 to 2008   Additional Accomplishments and Memberships   •  Non-Executive Chairman of the Center of Innovation at the University of North Dakota •  Board of Harvest/Sherwood, a food distribution company   Qualifications   Mr. Morrison is a seasoned executive with strong consumer marketing, sales and international credentials and his knowledge of our customer base is very valuable to our Board. His experience in private equity and mergers and acquisitions is also an important asset for our Board.

 

IFF  |  2021 PROXY STATEMENT  15

 PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Kåre Schultz

 

Director Since: 2021     Committees: • Nominating and Governance     Age: 59

Business Experience   Mr. Schultz has served as President and CEO of Teva Pharmaceutical Industries Ltd. and as a member of its Board of Directors since November 1, 2017. From May 2015 to October 2017, Mr. Schultz served as President and Chief Executive Officer of H. Lundbeck A/S. Prior to that, Mr. Schultz worked for nearly three decades at Novo Nordisk, where he served in a number of leadership roles, including Chief Operating Officer, Vice President of Product Supply and Director of Product Planning and Customer Services in the Diabetes Care Division. Mr. Schultz has also held positions at McKinsey and Anderson Consulting. Mr. Schultz received a master’s degree in economics from the University of Copenhagen.

Public Board Memberships   •  Teva Pharmaceutical Industries Ltd., a pharmaceutical company •  The LEGO® Group, a toy production company, from 2007 to 2020 •  Royal Unibrew A/S, a brewing and beverage company, from 2010 to 2017   Additional Accomplishments and Memberships   •  Former Director, Bitten & Mads Clausen’s Foundation, the holding vehicle for Danfoss A/S, in 2017 •  Knight of the Dannebrog Order   Qualifications   Mr. Schultz is a seasoned executive with global executive leadership experience in the healthcare industry and brings to the Board his experience overseeing financial and growth initiatives in markets worldwide.

 

16  IFF  |  2021 PROXY STATEMENT

PROPOSAL 1 — ELECTION OF DIRECTORS 

 

 

 

Stephen Williamson

 

		Director Since: 2017     Committees: • Audit     Age: 54		Business Experience   Mr. Williamson currently serves as Senior Vice President and Chief Financial Officer at Thermo Fisher Scientific, a leader in life sciences and healthcare technologies. Appointed to this role in August 2015, Mr. Williamson is responsible for the company’s finance, tax, treasury and global business services functions.   He joined Thermo Fisher in 2001 as Vice President, European Financial Operations, based in the U.K., and oversaw its integration activities across Europe. In 2004, Mr. Williamson moved to the U.S. and held finance leadership roles for many of Thermo Fisher’s operating businesses. In 2008, he became Vice President of Financial Operations for the company and led the finance function supporting all businesses.   Prior to Thermo Fisher, Mr. Williamson served as Vice President and Chief Financial Officer, Asia Pacific for Honeywell International (formerly AlliedSignal) in Singapore and held other finance roles in corporate development and operational finance. He began his career with Price Waterhouse in the transaction support group and the audit practice, working in both London and New York.				Additional Accomplishments and Memberships   •  Member of the Institute of Chartered Accountants of England and Wales   Qualifications   Mr. Williamson is an accomplished finance leader with extensive international senior management experience and he brings a deep understanding of the power of innovation and R&D as well as the value of M&A – core components of IFF’s strategy. His deep understanding of complex, global businesses, 20 years of M&A experience and extensive financial insight adds considerable guidance to our Board and Audit Committee.

 

IFF  |  2021 PROXY STATEMENT  17

Corporate Governance

Code of Conduct

We have adopted a Code of Conduct that applies to all of our employees, including our Chief Executive Officer (“CEO”), our Chief Financial Officer (“CFO”) and our Chief Accounting Officer, as well as our Directors. Additionally, we have adopted a Code of Conduct for Directors and a Code of Conduct for Executive Officers (together with the Code of Ethics, the “Codes”). The Codes are available on our website at https://ir.iff.com/governance.

Only the Board or the Audit Committee may grant a waiver from any provision of our Codes in favor of a director or executive officer, and any such waiver and any amendments to the Codes will be publicly disclosed on our website, www.iff.com.

Shareholder Engagement

We regularly engage with our shareholders to better understand their perspectives on our Company, including our strategies, performance, acquisition-related activities, share price development, capital allocation policies and matters of corporate governance and executive compensation. This dialogue has helped inform the Board’s decision-making and ensure our interests remain well-aligned with those of our shareholders. During 2020, we interacted with our largest active shareholders, representing more than two-thirds of our outstanding shares. We believe that these engagements provide valuable feedback and this feedback is shared regularly with our Board and its relevant committees.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines which set forth our governance principles relating to, among other things:

 

•

director independence;

 

•

director qualifications and responsibilities;

 

•

lead independent director duties;

 

•

board and committee structure and meetings;

 

•

management succession; and

 

•

the CEO evaluation and succession process.

In 2020, the Board revised its Corporate Governance Guidelines to, among other things:

 

•

underscore that the Board recognizes the value of diversity and that it strives to assemble a Board with diverse skills, professional experience, global, geographic and other perspectives, age, race, ethnicity, gender, gender identity, sexual orientation or identity, national origin and cultural background; and

 

•

provide that if a Director is an active chief executive officer of another public company, such Director shall not serve on the board of more than two public companies (including IFF), other than the company of which he or she is the chief executive officer.

The Nominating and Governance Committee reviews our Corporate Governance Guidelines annually, and recommends changes to the Board as appropriate. A copy of our Corporate Governance Guidelines is available through the Investor—Leadership & Governance—Governance link on our website, www.iff.com.

 

18  IFF  |  2021 PROXY STATEMENT

  CORPORATE GOVERNANCE 

 

 

 

Environmental, Social and Governance Initiatives

Over the past several years, we have redefined the way we envision sustainability. Moving from the traditional “take-make-dispose” model, we have embraced the circular economy model—one that is restorative and regenerative by design, which we believe is key in safeguarding the well-being of consumers, the health of our planet and the integrity of our business.

Customers and consumers of our products want to know if the products they are purchasing are responsibly sourced and produced in an environmentally conscious manner. Our sustainability vision and strategy are designed to address these global trends, and we are committed to making progress happen at every opportunity. Following the N&B Transaction and the Frutarom acquisition, we have been working on evaluating our expanded environmental footprint and integrating and updating the N&B Business’ and Frutarom’s sustainability practices to align them with legacy IFF sustainability practices.

In line with our combined company’s purpose of applying science and creativity for a better world, our sustainability goals include:

 

•

Reducing Our Environmental Footprint—we seek to leverage synergies to reduce our operational impact in ways that will mitigate climate change, conserve water and reduce waste.

 

•

Strengthening Responsible Sourcing—we seek to ensure ethical practices in our supply chain, reduce impact to the environment and support workers and grower communities.

 

•

Driving Sustainable Innovation—we seek to embed regenerative approaches and circular design principles into our products, processes and R&D pipeline.

 

•

Embracing People and Communities—we seek to nurture an inclusive culture where we celebrate diversity and give back to the communities where we source and operate.

In 2020, we were named for the first time to the Dow Jones Sustainability Indices, a family of best-in-class benchmarks for investors who recognize that sustainable business practices are critical to generating long-term shareholder value. Named to both the 2020 World Index and the North America Index, this distinction validates IFF’s leadership position in sustainability performance and underscores our commitment to executing on key environmental, social and governance (ESG) priorities. We were also awarded the 2020 EcoVadis platinum sustainability rating, a highly selective designation by EcoVadis, a leading platform for monitoring sustainability in global supply chains. This distinction places IFF in the top 1% of companies assessed in the areas of Environment, Labor & Human Rights, Ethics and Sustainable Procurement. In addition, among other distinctions, in 2019 we were named one of Barron’s 100 Most Sustainable Companies for the third consecutive year and listed in the FTSE4Good Index series as well as in the Euronext Vigeo World 120 Index for ESG performance.

Our commitment to good governance starts with our Board and Executive Committee and is supported by a strong governance framework. This framework is implemented through our organization with frequent communications and trainings on best practices in governance, risk management, business conduct, compliance and ethics. Moreover, we adhere to the highest standards of ethics, integrity, honesty and respect in our dealings with each other and our business partners. To maintain those relationships and our strong reputation, we have a robust program to ensure compliance with our Codes.

We describe our environmental, social and governance programs and performance in more detail in our annual sustainability report, which is posted on our website for investors, customers and suppliers. More information on our governance initiatives can also be found throughout this proxy statement.

 

IFF  |  2021 PROXY STATEMENT  19

 CORPORATE GOVERNANCE 

 

 

 

Independence of Directors

The Board undertakes an annual review of director independence, which includes a review of each director’s relationships with the Company. This review is designed to identify and evaluate, among other things, any transactions or relationships between a director or any member of his or her immediate family and the Company or members of our senior management.

The Board has affirmatively determined that each of our current directors (other than Mr. Fibig, our CEO) meets our independence requirements and those of the NYSE’s corporate governance listing standards. In the ordinary course of business, transactions may occur between the Company and entities with which some of our directors or their family members are or have been affiliated. In connection with its evaluation of director independence, our Board reviewed such transactions, and it has determined that these transactions do not impair the independence of the respective director.

Board Leadership Structure

As stated in our Corporate Governance Guidelines, the Board does not have a policy that requires a separation of the Chair of the Board (“Chair”) and CEO positions. The Board believes that it is important to have the flexibility to make this determination from time to time based on the particular facts and circumstances then affecting our business.

Currently, we combine the positions of Chair and CEO. We believe that the CEO, as the Company’s chief executive, is in the best position to fulfill the Chair’s responsibilities, including those related to identifying emerging issues facing our company, and communicating essential information to the Board about our performance and strategies. We also believe that the combined role of Chair and CEO provides us with a distinct leader and allows us to present a single, uniform voice to our customers, business partners, shareholders and employees. If the Board believes that its current leadership structure will be better served by separating the roles of Chair and CEO, it may then determine to separate these positions.

When the CEO and Chair roles are combined, the independent Directors of the Board may elect a Lead Director to facilitate and strengthen the Board’s independent oversight of our performance, strategy and succession planning and to promote effective governance standards. The independent directors of the Board elect the Lead Director from among the independent directors on an annual basis. Our current Lead Director is Mr. Morrison. Mr. Breen will assume the role of Lead Director at the 2021 Annual Meeting.

 

Duties of our Lead Director

Ø    Presides at all meetings of the Board at which the Chair and CEO is not present, including executive sessions of the independent directors, and provides prompt feedback regarding those meetings to the Chairman and CEO;

Ø    Provides suggestions for Board meeting agendas, with the involvement of the Chair and CEO and input from other directors;

Ø    Serves as liaison between the Chair and CEO and the independent directors;

Ø    Monitors, together with the Chair and CEO, significant issues occurring between Board meetings and assures Board involvement when appropriate; and

Ø    Ensures, in consultation with the Chair and CEO, the adequate and timely exchange of information between the management team and the Board.

 

20  IFF  |  2021 PROXY STATEMENT

CORPORATE GOVERNANCE 

 

 

 

Board Committees

Our Board has an Audit Committee, a Compensation Committee, a Nominating and Governance Committee and an Innovation and Sustainability Committee, each of which operates under a written charter adopted by the Board. Each Committee reviews its charter annually and recommends charter changes to the Board as appropriate. In 2020, each of the Audit Committee, Compensation Committee, Nominating and Governance Committee and Innovation and Sustainability Committee reviewed its charter, and amended it where appropriate. Each Committee charter provides that the Committee will annually review its performance, and each Committee reviewed and discussed its performance in 2020. A current copy of each of the Audit Committee, Compensation Committee, Nominating and Governance Committee, and Innovation and Sustainability Committee charters is available through the Investor—Governance link on our website, www.iff.com.

The table below provides the current membership and chair for each of our Committees and identifies our current Lead Director.

 

Name		Audit		Compensation		Nominating and Governance		Innovation and   Sustainability
Kathyrn J. Boor
Edward D. Breen*						●
Carol Anthony Davidson		●
Michael L. Ducker				●				●
Roger W. Ferguson, Jr.						●
Andreas Fibig								●
John F. Ferraro
Christina Gold				●
Ilene Gordon				●
Matthias Heinzel								●
Dale F. Morrison*		●		●		●
Kåre Schultz						●
Stephen Williamson		●						●

= Committee Chair

*= Lead Director. Mr. Morrison is our current Lead Director. Mr. Breen will assume the role of Lead Director on May 5, 2021.

Board and Committee Meetings

Our Board held eight meetings during 2020. The Audit Committee held seven meetings, the Compensation Committee held six meetings, the Nominating and Governance Committee held four meetings, and the Innovation and Sustainability Committee held four meetings during 2020. All incumbent directors attended at least 75% of the total Board and Committee meetings on which he or she served during 2020. All of our directors who were serving on the day of last year’s annual meeting of shareholders attended that meeting. Under our Corporate Governance Guidelines, unless there are mitigating circumstances, such as medical, family or business emergencies, Board members endeavor to participate in all Board meetings and all Committee meetings of which the director is a member and to attend our annual meeting of shareholders. Our non-employee directors, all of whom are currently independent, meet in executive session, without the presence of any corporate officer or member of management, in conjunction with regular meetings of the Board and Committees.

 

IFF  |  2021 PROXY STATEMENT  21

 CORPORATE GOVERNANCE 

 

 

 

 

Audit Committee

 

Current Members:		Responsibilities
John F. Ferraro (Chair) Carol Anthony (John) Davidson Dale F. Morrison Stephen Williamson   Meetings in 2020:  7		The Audit Committee’s responsibilities include overseeing and reviewing:   •  the financial reporting process and the integrity of our financial statements, capital structure and related financial information;   •  our internal control environment, systems and performance;   •  the audit process followed by our independent accountant and our internal auditor;   •  the appointment, compensation, retention and oversight of our independent accountant and our internal auditor;   •  our independent accountant’s and internal auditor’s qualifications, performance and independence, and whether our independent accountant and internal auditor should be rotated, considering the advisability and potential impact of selecting a different independent accountant or internal auditor;   •  the procedures for monitoring compliance with laws and regulations and with our Code of Conduct;   •  assisting the Board in overseeing and reviewing with management financial risks and the policies and practices established to manage such risks;   •  establishing, monitoring and reviewing procedures for the treatment of concerns regarding compliance, accounting, internal accounting controls and auditing matters, including critical audit matters; and   •  reviewing and pre-approving all audit and non-audit services performed by our independent accountant.   Independence and Financial Expertise   The Board reviewed the background, experience and independence of the current Audit Committee members and based on this review, the Board determined that each member of the Audit Committee:   •  meets the independence requirements of the NYSE’s corporate governance listing standards;   •  meets the enhanced independence standards for audit committee members required by the SEC;   •  is financially literate, knowledgeable and qualified to review financial statements; and   •  qualifies as an “audit committee financial expert” under the SEC rules.

 

22  IFF  |  2021 PROXY STATEMENT

CORPORATE GOVERNANCE 

 

 

 

 

Compensation Committee

 

Current Members:		Responsibilities
Roger W. Ferguson, Jr. (Chair) Michael Ducker Christina Gold Ilene Gordon Dale F. Morrison   Meetings in 2020:  6		The Compensation Committee’s responsibilities include:   •  recommending the compensation of the CEO for approval by the independent directors of the Board;   •  reviewing and making determinations regarding compensation of executive officers (other than the CEO) and certain other members of senior management;   •  reviewing, adopting and recommending to the Board, or shareholders as required, general compensation and benefits policies, plans and programs, and overseeing the administration of such policies, plans and programs;   •  reviewing and approving the peer group companies for the purpose of benchmarking compensation and performance;   •  reviewing and discussing with management each year the Compensation Discussion and Analysis included in our annual proxy statement;   •  recommending to the Board any changes to the compensation and benefits of non-employee directors;   •  conducting a risk assessment of our overall compensation policies and practices;   •  reviewing succession planning for executive officers (other than the CEO) and certain members of senior management; and   •  assisting the Board in ensuring that long-term and short-term compensation provide performance incentives to management, and that compensation plans are appropriate and competitive and reflect the goals and performance of management and our Company (as also discussed in more detail under the heading “Compensation Discussion and Analysis”).   Independence   The Board reviewed the background, experience and independence of the Compensation Committee members and, based on this review, the Board determined that each member of the Compensation Committee:   •  meets the independence requirements of the NYSE’s corporate governance listing standards; and   •  is a “non-employee” director within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

IFF  |  2021 PROXY STATEMENT  23

 CORPORATE GOVERNANCE   

 

 

 

		Role of Compensation Consultant.  The Compensation Committee has the authority to retain compensation consultants or advisors to assist it in fulfilling its responsibilities, including evaluating CEO, executive and non-employee director compensation, and in fulfilling its other responsibilities. In 2020, the Committee directly engaged Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant. FW Cook’s work with the Committee included analyses, advice, guidance and recommendations on executive compensation levels versus peers, market trends, incentive plan designs and stock ownership guidelines. See also the discussion in our CD&A starting on page 41.
		Compensation Committee Interlocks and Insider Participation.  During the fiscal year ended December 31, 2020, Messrs. Ferguson, Ducker and Morrison, as well as Mmes. Gold, Hudson and Tsai served as members of the Compensation Committee. None of these directors was, during 2020, an officer or employee of our Company, or was formerly an officer of our Company. There were no transactions in 2020 between us and any directors who served as Compensation Committee members for any part of 2020 that would require disclosure by us under SEC rules requiring disclosure of certain relationships and related party transactions. During 2020, none of our executive officers served as a director of another entity, one of whose executive officers served on our Compensation Committee, and none of our executive officers served as a member of the compensation committee of another entity, whose executive officers served as a member of our Board.

 

24  IFF  |  2021 PROXY STATEMENT

 CORPORATE GOVERNANCE 

 

 

 

 

Nominating and Governance Committee

 

Current Members:		Responsibilities
Christina Gold (Chair) Edward Breen Roger W. Ferguson, Jr. Dale F. Morrison Kåre Schultz   Meetings in 2020:  4		The Nominating and Governance Committee’s responsibilities include:   •  developing and reviewing criteria for the selection of directors, and making recommendations to the Board regarding such criteria;   •  identifying qualified individuals to serve on the Board, reviewing the qualifications of director candidates and recommending to the Board the nominees to be proposed by the Board for election as directors at the annual meeting of shareholders who bring the background, knowledge, experience, skill set and expertise that would strengthen and increase the diversity of the Board;   •  reviewing the suitability of directors for continued service, including in case of a resignation tendered by a director following a change in employment or anticipated board memberships, and making recommendations to the Board with respect to their continued service;   •  reviewing director candidates recommended by shareholders for election;   •  establishing and reviewing policies pertaining to roles, responsibilities, tenure and removal of directors, and reviewing the size of the Board, and the number, responsibilities, membership and Chairs of the Board committees;   •  overseeing CEO succession planning;   •  developing and reviewing the Board and Board committee annual evaluation process;   •  overseeing the annual CEO evaluation process and recommending to the Board the annual performance goals for the CEO;   •  reviewing and recommending changes to our Corporate Governance Guidelines and monitoring corporate governance issues; and   •  reviewing and, if appropriate, approving transactions with related parties.   Independence   The Board reviewed the background, experience and independence of the Nominating and Governance Committee members, and based on this review, the Board determined that each member of the Nominating and Governance Committee meets the independence requirements of the NYSE’s corporate governance listing standards.

 

IFF  |  2021 PROXY STATEMENT  25

 CORPORATE GOVERNANCE 

 

 

 

 

Innovation and Sustainability Committee

 

Current Members:		Responsibilities
Kathryn Boor (Chair) Michael Ducker Andreas Fibig Matthias Heinzel   Meetings in 2020:  4		The Innovation and Sustainability Committee’s responsibilities include:   •  reviewing, evaluating the quality, direction and competitiveness of the Company’s R&D and innovation programs, and R&D pipeline and advising the Board regarding the Company’s progress in achieving its long-term strategic R&D and innovation objectives;   •  overseeing the Company’s business development activities as they relate to the acquisition or development of new science and technology, providing input on new, innovative business development opportunities and evaluating the soundness and risks of technologies in which the Company is investing its innovation efforts;   •  assisting in identifying significant emerging science and technology issues, policies and trends that may impact the Company’s overall business strategy;   •  reviewing the Company’s policies, programs and practices on sustainability and corporate responsibility and assessing new opportunities that would support the Company’s sustainability and corporate responsibility goals;   •  providing support to the management of the Company to ensure a quality Scientific Advisory Board is in place; and   •  reviewing the recruitment and retention of scientific talent.   The members of the Innovation and Sustainability Committee are not required to meet the independence requirements of the NYSE’s corporate governance listing standards.

Board and Committee Assessment Process

Each year, the Nominating & Governance Committee leads an evaluation of the effectiveness of the Board and each of its committees. Each member of the Board responds to an anonymous survey regarding the effectiveness of the Board, its committees and their leadership, and the dynamics between the Board and management. The Board supplements this process through the use of in-person director interviews every other year during which the Lead Director and the Chair of the Nominating & Governance Committee interviews each director to obtain his or her assessment of the effectiveness of the Board and its committees. After consulting with each other, the Lead Director and Chair of the Nominating & Governance Committee summarize and review the results with the Board.

Succession Planning

Our Board recognizes that one of its most important duties is to ensure excellence and continuity in our senior leadership by overseeing the development of executive talent and planning for the effective succession of our Chair and CEO and other senior members of executive management. As part of this process, our CEO and our executive officers are required to prepare a detailed development and succession plan for themselves and for their direct reports on an annual basis. The Company’s executives regularly attend Board meetings and maintain an ongoing dialogue with Board members, which is critical to the Company’s succession planning. The Compensation Committee reviews, on an annual basis, potential successors for the Company’s executive officers and such other senior management employees as the Compensation Committee may determine. In addition, the Nominating and Governance Committee also agrees upon and recommends to the Board a succession plan for our CEO, including in emergency situations. Our Board is committed to being prepared for a planned or unplanned change in our leadership in order to ensure our stability.

 

26  IFF  |  2021 PROXY STATEMENT

 CORPORATE GOVERNANCE 

 

 

 

Risk Management Oversight

Our Board is actively involved in the oversight of risks that could affect our Company and is responsible for overseeing and reviewing with management the Company’s enterprise-wide risks and the policies and practices established to manage such risks. It is the responsibility of the CEO and other senior management to manage the Company’s day-to-day business risks and its risk management process. We believe this division of responsibility is the most effective approach for addressing risk management.

Board and Committee Roles in Overseeing Risk 

The Board exercises its risk oversight function both at the Board level and by delegating to its committees. The Board and its committees focus on operational risk, financial risk, regulatory risk, litigation risk, cybersecurity and information security risk, tax risk, credit risk, liquidity risk, compliance risk as well as our general risk management strategy, and how these risks are being managed. The Board receives updates on the Company’s risk through management’s enterprise risk management (“ERM”) program report to the Board, which includes management’s approach to mitigating and managing such risks. The Board also receives updates on the Company’s risk from its committees. Each of the Audit, Nominating and Governance, Compensation, and Innovation and Sustainability Committee is responsible for the oversight of risks relevant to its function (as described above) and regularly reports to the Board. The Board believes that its risk oversight structure allows for open communication between the Board, its committees and management.

 

 

 

IFF  |  2021 PROXY STATEMENT  27

 CORPORATE GOVERNANCE 

 

 

 

Management

Management maintains an ERM program which is designed to identify and assess our global risks and to develop steps to mitigate and manage risks. As part of its risk management practices, the Company has established a management risk committee chaired by the CFO and General Counsel and made up of key members of the Company’s management to integrate global risk activities (including cybersecurity, compliance, business, human resources and crisis management) and to ensure appropriate prioritization of resources and alignment across the Company. The Board receives regular reports on the ERM process and the Company’s risk mitigation activities, including reports focused on compliance, human capital, cyber security and sustainability risks.

Compensation Risks

In the fourth quarter of 2020, the Compensation Committee, working with its independent compensation consultant, conducted a risk assessment of our executive compensation programs. The goal of this assessment was to determine whether the general structure of our executive compensation policies and programs, annual and long-term performance goals or the administration of the programs posed any material risks to our Company. In addition, with the input from our Chief Human Resources and Diversity and Inclusion Officer, the Compensation Committee reviewed compensation programs and policies below the executive level in a Company-wide risk assessment. The Compensation Committee shared the results of this review with our full Board.

The Compensation Committee determined, based on the reviews of its independent compensation consultant and management’s input and other factors, that the compensation policies and practices for the Company’s employees in 2020, including the established performance goals and incentive plan structures, did not result in excessive risk taking or the implementation of inappropriate business decisions or strategies by the Company’s executives or employees generally, and that there are no risks arising from our compensation policies and practices for our employees that are reasonably likely to have a material adverse effect on the Company.

Human Capital Management

The success of our business is built on our talented employees. At December 31, 2020, prior to the N&B Transaction we had approximately 13,700 employees worldwide, of whom approximately 2,000 are employed in the United States. With the completion of the N&B Transaction, we added more than 10,000 employees around the world, of whom approximately 30% are employed in the United States.

Culture and Values. Our culture is based on our five corporate values of: empowerment, expertise, innovation, integrity and responsibility, and the expression of these values can be seen and felt throughout our history. Our employees appreciate that they contribute to products that touch and enhance the lives of millions of people around the world. In 2020, we implemented a high-performing culture employee engagement initiative designed to further underscore three key attributes of our culture: extreme accountability, bias toward action and effective collaboration. Throughout the year, we engaged with employees around the world as part of this initiative, including senior leader speakers, employee training, employee recognition programs and designating a large number of local employee ambassadors.

Leadership and Development. Our leadership development efforts empower employees to become forward-looking, inspiring and capable decision-makers, agents of change and great leaders. To cultivate our employees’ talent and build sustainable long-lasting careers at IFF, we offer specialized courses for employees globally by partnering with leading institutions and universities to help fulfill our firm commitment of providing the latest training and development offerings at all levels. We also offer to our employees an extensive library of on-demand courses and materials on leadership, management and professional skills development. These offerings complement our talent management’s focus on a strong talent acquisition strategy and an organized and personalized feedback process, supported by industry-leading assessment tools.

 

28  IFF  |  2021 PROXY STATEMENT

 CORPORATE GOVERNANCE  

 

 

 

Diversity and Inclusion. We believe that our differences make us great, as captured in our diversity and inclusion (D&I) vision: “Your Uniqueness Unleashes Our Potential.” To that end, we are dedicated to nurturing a truly inclusive and fair culture through the three pillars of our D&I mission:

 

•

Our People embody the mosaic of the markets we serve and are empowered to transform the future

 

•

Our Spirit nurtures an inclusive and fair culture where every voice is valued and heard

 

•

Our World embraces diversity of thought and strives to do more good, creating a better future for all

In 2020, IFF developed and delivered a broad range of initiatives to support our D&I vision. As part of IFF’s journey to gender parity, the Company in 2020 underwent a rigorous global verification process and attained the Economic Dividends for Gender Equity (EDGE) certification at the MOVE level in 21 countries worldwide, which included an examination of our gender balance across our talent pipeline, gender pay equity, the effectiveness of our framework of policies and practices that ensure equitable career flows and our ability to foster an inclusive workplace culture for all employees. IFF also achieved 100% scores in the Disability Equality Index and achieved the title of best employer for LGBTQ+ employees rating with 100% scores in the Human Rights Campaign Corporate Equality Index and the HRC Equidad Mexico. At the same time, employee resource groups known as “colleague communities” continue to thrive and grow with women@iff and pride@iff opening new chapters at our offices around the world and new colleague communities launching in 2020, such as Soul Black (Brazil) and Black Excellence (USA), as well as SERVE, which supports veteran and first responder issues.

Occupational Health & Safety. Employee safety is one of the cornerstones of our business. Our occupational health and safety management system requires and encourages employees and supervised contractors at sites globally to uphold IFF’s protocols, report any incidents and suggest improvements that will increase the safety of work sites. Our safety management system in each country is based on local regulations. In the absence of country-specific requirements, IFF guidelines are implemented, which are based on U.S. Occupational Safety and Health Administration (OSHA) standards. To work toward a safer workplace, we have put in place a set of protocols and programs related to three areas of focus: (a) safety governance (setting and updating comprehensive safety policies and procedures), (b) safety training of employees on local requirements and IFF policies, and (c) safety culture characterized by awareness and communication. In response to the COVID-19 pandemic, we have been following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of our workforce. Moreover, we have developed return-to-workplace protocols and mandatory site guidelines to continue to protect the health and safety of employees at each location and to promote an orderly and phased return for employees who have been working from home.

Related Person Transactions and Other Information

Transactions with Related Persons

In 2020, there were no transactions and there are no currently proposed transactions in excess of $120,000 in which the Company was or will be a participant and in which any director or executive officer of the Company, any known 5% or greater shareholder of the Company or any immediate family member of any of the foregoing persons, had or will have a direct or indirect material interest as defined in Item 404(a) of Regulation S-K.

Related Person Transactions Policy

In accordance with SEC rules, our Board has adopted a written policy for the review and the approval of related person transactions. This policy is available through the Investor—Leadership & Governance—Governance link on our website, www.iff.com. Under the policy, a “related person” is specifically defined as an executive officer, a director, a director nominee, a beneficial owner of more than 5% of any class of

 

IFF  |  2021 PROXY STATEMENT  29

 CORPORATE GOVERNANCE 

 

 

 

voting securities, an immediate family member of any of the foregoing, or a controlled entity, which is defined as an entity owned or controlled by any of the foregoing or in which any such person serves as an officer or partner, or together with all of the foregoing persons, owns 5% or more equity interests. The policy defines a “related person transaction” as a transaction or series of transactions involving a related person and the Company, excluding employment arrangements involving an executive officer or other senior officer or employee of the Company and director compensation arrangements. The policy requires that any such transaction be approved or ratified by the Nominating and Governance Committee. If accounting issues are involved in the transaction, the Nominating and Governance Committee will consult with the Audit Committee if deemed appropriate.

Pursuant to the policy, a related person transaction will be approved or ratified only if the Nominating and Governance Committee determines that it is being entered into in good faith and on fair and reasonable terms which are in the best interest of our Company and our shareholders. In determining whether to approve or ratify a transaction, the Nominating and Governance Committee considers the following factors, to the extent relevant:

 

•

the related person’s relationship to the Company and interest in the transaction;

 

•

the material facts of the transaction;

 

•

the benefits to the Company;

 

•

the availability of alternate sources of comparable products or services and the terms of such alternative; and

 

•

an assessment as to whether the transaction is on terms comparable to the terms available to an unrelated third party or to employees generally.

No related person may participate in the review of a transaction in which he or she may have an interest. In addition, except for non-discretionary contributions made pursuant to our matching contributions program, a charitable contribution by our Company to an organization in which a related person is known to be an officer, director or trustee, is subject to approval by the Nominating and Governance Committee. In 2020, there were no related person transactions presented under the policy.

Share Retention Policy

We encourage our executives and directors to own our common stock so that they share the same long-term investment risk as our shareholders. Our Share Retention Policy provides executives and directors flexibility in personal financial planning, yet requires them to maintain ongoing and substantial investment in our common stock. In 2020, the Compensation Committee reviewed our Share Retention Policy with input from management and FW Cook and did not make any substantive changes to the policy.

If an executive or director does not meet the targeted ownership level, the executive or director may not sell or transfer any shares held in an equity, a deferred compensation or a retirement plan account provided by the Company, and the executive or director must retain such shares in such accounts until the targeted ownership level is met. For executives, if their retention requirement is not met, the executive is required to retain a portion of any shares of common stock acquired as a result of exercising any stock settled appreciation right (“SSAR”) or as a result of the vesting of restricted stock or a restricted stock unit (“RSU”) (after payment of any exercise price and taxes).

As of December 31, 2020, all of our named executive officers and directors were in compliance with our Share Retention Policy. Additional detail regarding ownership of our common stock by our executive officers and directors is included in this proxy statement under the heading “Securities Ownership of Management, Directors and Certain Other Persons.”

 

30  IFF  |  2021 PROXY STATEMENT

 CORPORATE GOVERNANCE 

 

 

 

Equity Grant Policy

The Compensation Committee has adopted an Equity Grant Policy with respect to the issuance of equity awards under our equity plans. Under the Equity Grant Policy, the Compensation Committee approves all equity awards to our executive officers (other than our CEO) and certain other members of senior management, and our Board approves all equity awards to our CEO and to our non-employee directors. The grant date for annual awards to all employees (other than awards under our Long Term Incentive Plan, “LTIP”) and for annual awards to our non-employee directors is the date of the Company’s annual meeting of shareholders. The grant date for awards under our LTIP is the date that the applicable metrics are approved. In addition to the annual grants, equity awards may be granted “off-cycle” at other times during the year to new hires, for promotions, retention purposes, director appointments or other special circumstances. The grant price of equity awards (other than LTIP awards) is the closing price of our common stock on the NYSE on the date of the grant. The grant price for LTIP awards is the trailing twenty-day average closing price of our common stock on the NYSE as of the first trading day of the applicable LTIP performance.

Policy Regarding Derivatives, Short Sales, Hedging and Pledges

Under our insider trading policy, directors and all employees, including our named executive officers, are prohibited from entering into transactions designed to hedge against economic risks associated with an investment in our common stock. These individuals may not trade in derivatives in our securities (such as put and call options), effect “short sales” of our common stock, or enter into monetization transactions or similar arrangements (such as prepaid variable forwards, equity swaps, collars or exchange funds) relating to our securities. These individuals are also prohibited from holding shares of our common stock in margin accounts or pledging shares of our common stock as collateral for a loan.

 

IFF  |  2021 PROXY STATEMENT  31

Directors Compensation

Director Compensation Program

Annual Director Cash and Equity Compensation

Under our non-employee director compensation program, for the service year from the 2020 Annual Meeting of Shareholders (the “2020 Annual Meeting”) to the 2021 Annual Meeting, each non-employee director received an annual retainer of $250,000, of which $112,500 was paid in cash and $137,500 was paid in RSUs issued under our 2015 Stock Award and Incentive Plan (“2015 SAIP”) on the date of the 2020 Annual Meeting. These RSUs vest one year from the grant date and are subject to accelerated vesting upon a change in control. The 1,047 RSUs granted to each director on the date of the 2020 Annual Meeting was calculated using the closing market price of our common stock on the grant date. Any director who is an employee of our Company does not receive any additional compensation for his or her service as a director.

Compensation for our Lead Director and Committee Chairs

For the service year from the 2020 Annual Meeting to the 2021 Annual Meeting, the Lead Director received an additional annual cash retainer of $25,000, the Chair of the Audit Committee received an additional annual cash retainer of $20,000, the Chair of the Compensation Committee received an additional annual cash retainer of $17,500, the Chair of the Nominating and Governance Committee received an additional annual cash retainer of $15,000.

Participation in our Deferred Compensation Plan

Non-employee directors are eligible to participate in our Deferred Compensation Plan (“DCP”). A non-employee director may defer all or a portion of his or her cash compensation as well as any RSUs granted to him or her, subject to tax law requirements. Additional details regarding our DCP may be found in this proxy statement under the heading “Executive Compensation—Non-Qualified Deferred Compensation.” Non-employee directors are not entitled to matching contributions or the 25% premium on deferrals into our common stock fund that are applicable to employees under the DCP.

Additional Benefits

We reimburse our non-employee directors for travel and lodging expenses incurred in connection with their attendance at Board and Committee meetings, our shareholder meetings and other Company-related activities. In addition, our current directors are eligible to participate in our Matching Gift Program. Under this program, we match, on a dollar for dollar basis, contributions made by directors to qualifying charitable organizations up to a maximum of $10,000 per person per year.

 

32  IFF  |  2021 PROXY STATEMENT

 DIRECTORS’ COMPENSATION 

 

 

 

The following table details the compensation paid to or earned by our non-employee directors for the year ended December 31, 2020.

2020 Directors’ Compensation

 

Name		Fees Earned or Paid in Cash ($)(1)					Stock Awards ($)(2)(3)(4)					All Other Compensation ($)(5)					Total ($)
Marcello V. Bottoli*				112,500					134,351					10,000					256,851
Michael L. Ducker				112,500					134,351					—					246,851
David R. Epstein*				112,500					134,351					10,000					256,851
Roger W. Ferguson, Jr.				130,000					134,351					—					264,351
John F. Ferraro				132,500					134,351					10,000					276,851
Christina Gold				127,518					134,351					10,000					271,869
Katherine M. Hudson*				112,500					134,351					—					246,851
Dale F. Morrison				137,500					134,351					10,000					281,851
Dr. Li-Huei Tsai*				112,500					134,351					—					246,851
Stephen Williamson				112,500					134,351					10,000					256,851

 

*	No longer serving as director as of February 1, 2021.

 

(1)

The amounts in this column include (i) the annual cash retainer for service as a non-employee director, (ii) for certain directors, the annual cash retainer for service as Lead Director or as chairperson of a Board committee during 2020, and (iii) nominal amounts of cash paid in lieu of fractional shares of common stock. Of the amounts in this column, the following amounts were deferred in 2020 under our DCP: Mr. Ducker—$112,500; Mr. Epstein—$112,500; Mr. Ferguson—$130,000; Mr. Ferraro—$132,500; Ms. Hudson—$112,500; Mr. Morrison—$137,500 and Mr. Williamson—$112,500. Earnings in our DCP were not above-market or preferential and thus are not reported in this table.

 

(2)

The amounts in this column represent the aggregate grant date fair value of equity awards granted during the fiscal year ended December 31, 2020, computed in accordance with FASB ASC Topic 718. Details on and assumptions used in calculating the grant date fair value of RSUs may be found in Note 14 to our audited financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on February 22, 2021.

 

(3)	Each director received a grant on May 6, 2020 of 1,047 RSUs under our 2015 SAIP. None of our directors forfeited any RSUs or shares of deferred stock during 2020.

 

(4)	As of December 31, 2020, the following directors held the number of unvested RSUs and shares of deferred common stock indicated in the table below.

 

Director		RSUs				Deferred Stock
Marcello V. Bottoli*			1,047				20,771
Michael L. Ducker			1,047				7,619
David R. Epstein*			1,047				6,397
Roger W. Ferguson, Jr.			1,047				13,617
John F. Ferraro			1,047				4,919
Christina Gold			1,047				1,428
Katherine M. Hudson*			1,047				24,776
Dale F. Morrison			1,047				21,947
Dr. Li-Huei Tsai*			1,047				—
Stephen Williamson			1,047				6,077

 

*	No longer serving as director as of February 1, 2021.

 

IFF  |  2021 PROXY STATEMENT  33

 DIRECTORS’ COMPENSATION 

 

 

 

The deferred shares, which are held under the DCP, result from deferral of vested equity grants, voluntary deferral of retainer fees or the crediting of additional share units as a result of reinvestment of dividend equivalents. Deferred shares will be settled by delivery of common stock upon the director’s separation from service on the Board, or as otherwise elected by the director. All of the deferred shares are included for each director in the Beneficial Ownership Table.

 

(5)	The amounts in this column are contributions made by us under our Matching Gift Program to eligible charitable organizations matching contributions of the director to those charitable organizations during 2020.

 

34  IFF  |  2021 PROXY STATEMENT

 

Securities Ownership

Directors and Executive Officers

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 8, 2021, by each current director, each director nominee, the persons named in the Summary Compensation Table in this proxy statement and all current directors and executive officers as a group. To our knowledge, except as otherwise indicated, beneficial ownership includes sole voting and dispositive power with respect to all shares.

 

Name of Director / Officer		Shares of Common Stock Beneficially Owned (1)(2)				Percent of     Class**
Kathryn J. Boor			255			*
Edward D. Breen			455			*
Anne Chwat			57,022	(3)		*
Carol Anthony (John) Davidson			255			*
Michael L. Ducker			8,715			*
Roger W. Ferguson, Jr.			14,752	(4)		*
John F. Ferraro			5,998	(5)		*
Andreas Fibig			147,087	(6)		*
Christina Gold			8,272	(7)		*
Ilene Gordon			255			*
Matthias Haeni			48,040			*
Matthias Heinzel			255			*
Rustom Jilla			3,965	(8)		*
Nicolas Mirzayantz			39,984	(9)		*
Dale F. Morrison			27,148	(10)		*
Richard O’ Leary			36,440	(11)		*
Kåre Schultz			255			*
Stephen Williamson			7,163	(12)		*
All Directors and Executive Officers as a Group (21 persons)			419,582	(13)		*

 

*	Less than 1%.

 

**	Based on 248,847,002 shares of common stock outstanding as of March 8, 2021.

 

(1)	This column includes shares held by our executive officers in our 401(k) Retirement Investment Fund Plan.

 

(2)

In determining the number and percentage of shares beneficially owned by each person, shares that may be acquired by such person within 60 days after March 8, 2021 are deemed outstanding for purposes of determining the total number of outstanding shares for such person and are not deemed outstanding for such purpose for all other shareholders. Certain stock equivalent units held in the IFF Stock Fund under our DCP are premium stock equivalent units paid to executive officers that are subject to vesting and may be forfeited if the executive officer’s employment is terminated. To our knowledge, except as otherwise indicated, beneficial ownership includes sole voting and dispositive power with respect to all shares.

 

IFF  |  2021 PROXY STATEMENT  35

 SECURITIES OWNERSHIP 

 

 

 

(3)	Includes 5,300 stock equivalent units held in the IFF Stock Fund under the DCP resulting from the deferral of compensation and the 25% premium contributed by IFF on such units. Units contributed by IFF are subject to vesting based on continued employment through December 31, 2022.

 

(4)	Represents 13,705 stock equivalent units held in the IFF Stock Fund under the DCP.

 

(5)	Represents 4,951 stock equivalent units held in the IFF Stock Fund under the DCP.

 

(6)	Includes 60,060 stock equivalent units held in the IFF Stock Fund under the DCP resulting from the deferral of compensation and the 25% premium contributed by IFF on such units. Units contributed by IFF are subject to vesting based on continued employment through December 31, 2022.

 

(7)	Includes 1,437 stock equivalent units held in the IFF Stock Fund under the DCP.

 

(8)	Includes 417 stock equivalent units held in the IFF Stock Fund under the DCP resulting from the deferral of compensation and the 25% premium contributed by IFF on such units. Units contributed by IFF are subject to vesting based on continued employment through December 31, 2022.

 

(9)	Includes 2,822 stock equivalent units held in the IFF Stock Fund under the DCP resulting from the deferral of compensation and the 25% premium contributed by IFF on such units. Units contributed by IFF are subject to vesting based on continued employment through December 31, 2022.

 

(10)	Includes 22,089 stock equivalent units held in the IFF Stock Fund under the DCP.

 

(11)	Includes 5,830 stock equivalent units held in the IFF Stock Fund under the DCP resulting from the deferral of compensation and the 25% premium contributed by IFF on such units. Units contributed by IFF are subject to vesting based on continued employment through December 31, 2022.

 

(12)	Represents 6,116 stock equivalent units held in the IFF Stock Fund under the DCP.

 

(13)	Includes an aggregate of 122,755 stock equivalent units held in the IFF Stock Fund under the DCP.

5% Shareholders

The following table sets forth information regarding each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, as of March 8, 2021, based on a review of filings with the SEC. Unless otherwise indicated, beneficial ownership is direct.

 

Name and Address of Beneficial Owner		Number of Shares and Nature of Beneficial Ownership		Percent of Class*
Winder Investment Pte Ltd and related persons 17-01 6 Battery Road Singapore 049909		25,057,193 (1)		10.1%

 

*	Based on 248,726,256 shares of common stock outstanding as of February 14, 2021.

 

(1)

This amount is based on (i) Amendment No. 5 to Schedule 13D filed with the SEC on February 1, 2021 by Winder Investment Pte Ltd (“Winder”), Freemont Capital Pte. Ltd (“Freemont”) and Haldor Foundation (“Haldor”). These shares are held of record by Winder, and the amount includes 927,193 shares of common stock that would be issued upon voluntary settlement of 2,958,500 purchase contracts held by Winder. Winder is a wholly owned subsidiary of Freemont, and Freemont is a wholly owned subsidiary of Haldor. By virtue of such relationships, Freemont and Haldor may be deemed to beneficially own the shares held of record by Winder.

 

36  IFF  |  2021 PROXY STATEMENT

 

Proposal 2 Ratification of Independent Registered Public Accounting Firm

Selection of our Independent Registered Public Accounting Firm

The Audit Committee of our Board is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. To execute this responsibility, the Audit Committee engages in a comprehensive annual evaluation of the independent registered public accounting firm’s qualifications, performance and independence to determine whether the independent registered public accounting firm should be rotated, and considers the advisability and potential impact of selecting a different independent registered public accounting firm.

The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for 2021, and our Board has directed that our management submit that selection for ratification by our shareholders at the 2021 Annual Meeting. PwC has been retained as our external auditor continuously since 1957. In connection with the selection of PwC, the Audit Committee annually reviews and negotiates the terms of the engagement letter entered into with PwC. This letter sets forth important terms regarding the scope of the engagement, associated fees, payment terms, responsibilities of each party and the election of the parties to be subject to binding arbitration in the case of any dispute.

In accordance with SEC rules and PwC policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit service to our Company. For lead and quality review audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of our lead audit partner pursuant to this rotation policy involves a meeting between the Chair of the Audit Committee and the candidate for the role, as well as discussion by the full Audit Committee and management.

The Audit Committee and the Board believe that the continued retention of PwC as our independent registered public accounting firm is in the best interest of the Company and our shareholders, and we are asking our shareholders to ratify the selection of PwC as our independent registered public accounting firm for 2021. Although ratification is not required by our By-Laws or otherwise, we are submitting the selection of PwC to our shareholders for ratification because we value our shareholders’ views on our Company’s independent registered public accounting firm and as a matter of good corporate governance. The Audit Committee will consider the outcome of our shareholders’ vote in connection with the Audit Committee’s selection of our independent registered public accounting firm in the next fiscal year, but is not bound by the shareholders’ vote. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time if it determines that a change would be in the best interests of our Company and our shareholders.

Representatives of PwC are expected to attend the 2021 Annual Meeting, where they will be available to respond to questions and, if they desire, to make a statement.

 

IFF  |  2021 PROXY STATEMENT  37

 PROPOSAL 2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

 

 

 

Principal Accountant Fees and Services

The following table provides detail about fees for professional services rendered by PwC for the years ended December 31, 2020 and December 31, 2019.

 

		2020				2019
Audit Fees (1)		$	9,272,539			$	9,470,541
Audit-Related Fees (2)		$	200,092			$	59,656
Tax Fees (3)		$	73,836			$	319,600
All Other Fees (4)		$	9,689			$	10,899
Total		$	9,556,156			$	9,860,696

 

(1)

Audit Fees were for professional services rendered for audits of our consolidated financial statements and statutory and subsidiary audits, consents and review of reports filed with the SEC and consultations concerning financial accounting and reporting standards. Audit Fees also included the fees associated with an annual audit of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, integrated with the audit of our annual financial statements.

 

(2)

Audit-Related Fees were for services related to review of certain governance, risk and compliance procedures and other local statutory requirements.

 

(3)

Tax Compliance services consisted of fees related to tax compliance professional services incurred with respect to the acquisition and integration of Frutarom, preparation of tax returns, assistance with tax audits and appeals, indirect taxes, expatriate tax compliance services and transfer pricing services.

 

(4)

All Other Fees were for software licenses and other professional services.

Pre-Approval Policies and Procedures for Audit and Permitted Non-Audit Services

Consistent with requirements of the SEC and the Public Company Accounting Oversight Board (PCAOB) regarding auditor independence, the Audit Committee has responsibility for:

 

•

appointing,

 

•

negotiating, and setting the compensation of, and

 

•

overseeing the performance of, the independent registered public accounting firm.

In recognition of this responsibility, the Audit Committee has established policies and procedures to pre-approve all audit and non-audit services to be provided by the independent registered public accounting firm to our Company by category, including audit-related services, tax services and other permitted non-audit services. Under the policy, the Audit Committee pre-approves all services obtained from our independent registered public accounting firm by category of service, including a review of specific services to be performed, fees expected to be incurred within each category of service and the potential impact of such services on auditor independence. The term of any pre-approval is for the financial year, unless the Audit Committee specifically provides for a different period in the pre-approval. If it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval, the Audit Committee requires separate pre-approval before engaging the independent registered public accounting firm. To facilitate the process, the policy delegates pre-approval authority to the Audit Committee chairperson to pre-approve services up to $100,000, and the Audit Committee may also delegate authority to one or more of its members to pre-approve services. The Audit Committee member to whom such authority is delegated must report, for informational purposes, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

 

38  IFF  |  2021 PROXY STATEMENT

 PROPOSAL 2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

 

 

 

All services rendered by PwC to our Company are permissible under applicable laws and regulations. During 2020, all services performed by PwC which were subject to the SEC’s pre-approval requirements were approved by the Audit Committee in accordance with the Audit Committee’s pre-approval policy in effect during 2020.

Audit Committee Report

The Audit Committee (“we” “us” or the “Committee”) operates in accordance with a written charter, which was adopted by the Board. A copy of that charter is available through the Investor—Leadership & Governance—Governance link on the Company’s website at www.iff.com. The Committee is composed of four directors whom the Board has determined are “independent,” as required by the applicable listing standards of the NYSE and the rules of the SEC, and all of whom qualify as “audit committee financial experts” as defined by the rules of the SEC.

Management has the primary responsibility for the financial statements and the reporting process, including internal control over financial reporting and disclosure controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), is responsible for performing an integrated audit of the Company’s financial statements and internal control over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (“PCAOB”).

The Committee oversees the Company’s financial reporting process and internal control structure on behalf of the Board. We met seven times during 2020, including meeting regularly with PwC and the Company’s internal auditor, both privately and with management present. For 2020, we have reviewed and discussed the Company’s audited financial statements with management. We have reviewed and discussed with management its process for preparing its report on its assessment of the Company’s internal control over financial reporting, and at regular intervals we received updates on the status of this process and actions taken by management to respond to issues and deficiencies identified. We discussed with PwC its audit of the financial statements and of the Company’s internal control over financial reporting. We discussed with PwC and the Company’s internal auditor the overall scope and plans for their respective audits.

We have discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. We also received the written disclosures and the letter from PwC as required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and discussed with PwC its independence. We concluded that PwC’s independence was not adversely affected by the non-audit services provided by PwC, the majority of which consisted of audit-related, tax compliance and other tax services arising from our acquisition of Frutarom.

Based on the reviews and discussions referred to above, we recommended to the Board (and the Board subsequently approved our recommendation) that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on February 22, 2021.

In determining whether to retain PwC as the Company’s independent registered public accounting firm for the 2021 fiscal year, we took into consideration a number of factors, including:

 

•

the quality and effectiveness of PwC’s historical and recent performance on the Company’s audit;

 

•

the length of PwC’s tenure as the Company’s independent registered public accounting firm, and its familiarity with our business, accounting policies and practices, and internal control over financial reporting;

 

IFF  |  2021 PROXY STATEMENT  39

 PROPOSAL 2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

 

 

 

•

PwC’s capability, understanding and expertise in handling the breadth and complexity of our global operations;

 

•

the appropriateness of PwC’s fees and payment terms; and

 

•

PwC’s independence.

Based on this evaluation, we believe that it is in the best interests of the Company and its shareholders to retain PwC as the Company’s independent registered public accounting firm for 2021, which the shareholders will be asked to ratify at the 2021 Annual Meeting of Shareholders.

Audit Committee

John F. Ferraro (Chair)

Carol Anthony (John) Davidson

Dale F. Morrison

Stephen Williamson

 

Ö   YOUR BOARD RECOMMENDS A VOTE “FOR” RATIFICATION OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020

 

40  IFF  |  2021 PROXY STATEMENT

Compensation Discussion and Analysis

Reference Guide to our CD&A

This Compensation Discussion and Analysis, or CD&A, describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last fiscal year to our chief executive officer, our chief financial officer, our former chief financial officer and each of our three most highly compensated executive officers (collectively referred to as our NEOs). This CD&A is organized as follows:

 

 

As discussed in Proposal 3, we are conducting our annual Say on Pay vote that requests your approval of the compensation of our NEOs as described in this section and in the tables and accompanying narrative contained below under “Executive Compensation.” To assist you with this vote, please review our compensation philosophies, the design of our executive compensation programs and how, we believe, these programs have contributed to and are aligned with our performance.

Amid the challenges and unpredictability of the past year, including the COVID-19 crisis, macro-economic uncertainty and the closing and the integration of our transformational combination with the N&B Business, our employees (including our NEOs) have demonstrated resilience, collaboration, flexibility and innovation as we continued to deliver for all of our stakeholders. We remained focused on achieving our strategic growth initiatives and realizing the full potential of our combination with the N&B Business by finalizing the organization’s leadership, operational structure, brand identity and foundational vision. In addition, our diverse product portfolio, which will be further bolstered by our combination with the N&B Business, and our strong cash position have provided us with the stability and market position necessary to navigate the current environment.

We continued to benefit from strong demand for Consumer Fragrances, particularly Home Care and Personal Wash products, while demand for Fine Fragrance and Food Service were negatively impacted by COVID-19 challenges.

While we continued to execute on our strategic goals during 2020, our financial results reflected the external challenges that we faced. As a result, while we believe we are on pace to deliver on our long-term guidance to shareholders, the compensation paid to our NEOs for 2020 was significantly below target and, with respect to certain elements of compensation, below 2019 compensation.

 

IFF  |  2021 PROXY STATEMENT  41

 COMPENSATION DISCUSSION AND ANALYSIS 

 

 

 

Executive Summary

For 2020, our NEOs were:

 

Name		Title
Andreas Fibig		Chair and CEO
Rustom Jilla		CFO1
Nicolas Mirzayantz		Divisional Chief Executive Officer, Scent
Matthias Haeni		Former Divisional Chief Executive Officer, Taste2
Anne Chwat		Former General Counsel3
Richard O’Leary		EVP, Integration Officer and Former CFO4

 

1	Rustom Jilla joined as our CFO on January 20, 2020.

 

2	Matthias Haeni ceased serving as Divisional Chief Executive Officer, Taste effective October 1, 2020 and departed from the Company after a transition period on February 28, 2021.

 

3	Anne Chwat ceased serving as General Counsel effective February 1, 2021. Ms. Chwat will be departing in 2021 after a transition period.

 

4	Richard O’Leary transitioned to a new role—EVP, Integration Officer—effective as of January 20, 2020. Mr.  O’Leary will be departing in 2021 after a transition period.

Compensation Philosophy

The core of our executive compensation philosophy is that our executives’ compensation should be linked to achievement of financial and operating performance metrics that build shareholder value over both the short- and long-term. As such, we consistently focus on the following key drivers of shareholder value maximization:

 

 

42  IFF  |  2021 PROXY STATEMENT

 COMPENSATION DISCUSSION AND ANALYSIS 

 

 

 

We designed our compensation program to focus on elements that we believe will contribute to these shareholder value drivers. Our compensation program:

 

The design of our executive compensation program reflects our belief that executive compensation should be (1) aligned with the achievement of financial and operational metrics for both our Company and the respective business unit function in which the executive serves and (2) tied to the total shareholder return delivered to our shareholders. The following illustrates how our CEO’s and other NEOs’ total direct compensation is designed to tie a significant portion of their compensation to variable and long-term goals:

CEO Target Opportunity Mix

 

NEO Average (excluding CEO) Target Opportunity Mix

 

 

IFF  |  2021 PROXY STATEMENT  43

 COMPENSATION DISCUSSION AND ANALYSIS 

 

 

 

Our 2020 NEO Compensation Reflects our 2020 Performance

While we delivered on our cash drivers—corporate working capital and corporate capital expenditures—we were challenged on the top-line growth for Taste and our consolidated results. In particular, Taste sales decreased 3% on a reported basis and 2% on a currency neutral basis, due to COVID-19. However, Scent delivered both on sales and operating profit. For example, sales increased 2% on a reported basis and 3% on a currency neutral basis. The AIP payout for our NEOs for the year reflected these results.

NEOs evaluated at the corporate level received AIP payouts of approximately 39.1% of their respective target opportunity, our Former Divisional CEO, Taste received an AIP payout of approximately 24.0% of his target opportunity and our Divisional CEO, Scent received an AIP payout of approximately 93.6% of his target opportunity.

With respect to our LTIP awards, our overall net income resulted in economic profit (“EP”) performance for 2020 below the threshold level established at the beginning of the three-year cycle and our Total Shareholder Return relative to the S&P 500 for the three-year period ending in 2020 was below the 35th percentile threshold. Consequently, none of our NEOs earned any amounts under the outstanding LTIP cycles for our 2020 performance.

Compensation Governance

To ensure continued alignment of compensation with Company performance and the creation of shareholder value on a long-term, sustainable basis, we maintain strong compensation-related corporate governance policies.

 

What We Do						What We Don’t Do
		Pay for performance. A significant portion of the compensation for our NEOs is in the form of at-risk variable compensation						No tax gross-ups for severance or change in control related payments
		Base variable compensation on multiple performance metrics to encourage balanced focus						No single-trigger vesting of cash or equity-based awards upon change in control
		Use an appropriate mix of fixed and variable compensation to reward Company, business unit and individual performance						No short-sales, hedging or pledging of our stock by our employees, officers or directors
		Award a majority of variable compensation as equity-based awards						No fixed-duration employment agreements with executive officers
		Maintain executive clawback policies to recoup cash and equity compensation upon certain triggering events						No stock option/SAR repricing or exchange of underwater options or SARs for cash
		Require our executives to meet share retention guidelines						No guaranteed pay increases or equity awards for NEOs
		Engage an independent compensation consultant
		Conduct an annual risk assessment of our compensation programs

 

44  IFF  |  2021 PROXY STATEMENT