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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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
 
 
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 Pursuant to
§240.14a-12
THE GOODYEAR TIRE & RUBBER COMPANY
(Name of Registrant as Specified in its Charter)
Not applicable.
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
  No fee required.
  Fee paid previously with preliminary materials.
  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.
 
 


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LOGO


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LOGO

 


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LOGO      

March 7, 2024

Dear Fellow Goodyear Shareholder,

 

It is my privilege to serve as Chairman of Goodyear’s Board of Directors. Our commitment to our shareholders, as always, is to oversee the Company and steer it in a direction that positions it for long-term success and reflects your interests. From that perspective, I am pleased to share with you what we view as highlights of Goodyear’s progress in 2023, an eventful and change-filled year that I’m confident will be remembered as one in which we charted a new course designed to create sustainable value.

GOODYEAR FORWARD AND NEW DIRECTORS

In July, the Board announced a robust review of Goodyear’s business, led by our Strategic and Operational Review Committee. Over a 16-week period, the Committee conducted a comprehensive evaluation of various alternatives and opportunities to maximize shareholder value creation, with support and approval from the full Board. In November, we announced the result of this review: our Goodyear Forward transformation plan. Goodyear Forward provides a clear path to a more focused and profitable Goodyear through three key pillars: optimizing our portfolio, delivering significant margin expansion and reducing leverage. Our Board and executive team are prepared to execute this plan and deliver value for our shareholders.

Also in July, we welcomed three new directors to our board: Joe Hinrichs, Max Mitchell and Roger Wood. Each of them brings fresh perspective to the Board, while also contributing decades of manufacturing industry and strategic expertise. Max and Roger served on our Strategic and Operational Review Committee, and all three new directors were integral in the formation of our Goodyear Forward plan.

CEO TRANSITION

In November, Goodyear shared Rich Kramer’s plans to retire as Chairman, CEO and President after 14 years of service in that role, and 24 years with the Company. The Board is deeply grateful for Rich’s 14 years of service as CEO and for his outstanding leadership and innumerable contributions to Goodyear over the course of his distinguished career, including leading the development of our Goodyear Forward plan.

As part of the Board’s ongoing and active succession planning process, the Board conducted an extensive search, which considered both internal and external candidates for the CEO role. In January,

following Rich’s retirement, Mark Stewart became Goodyear’s CEO and President. Mark joins Goodyear from Stellantis, a leading global automaker and provider of innovative mobility solutions, where he served as COO of North America and a member of the Group Executive Council. The Board has tremendous confidence in Mark as the right CEO to lead the Company and carry out the Goodyear Forward plan. Already he is making a significant impact on the organization and the Board is excited about the successes his leadership will bring to Goodyear.

SHAREHOLDER ENGAGEMENT

Throughout 2023, the Board continued to solicit and consider the perspectives of our shareholders as one of the most valuable inputs in how we oversee the business. Goodyear continued its shareholder engagement program, ultimately meeting with shareholders representing 65% of outstanding shares held by institutional investors. I and other members of the Board participated in some of these calls with our largest investors. Feedback we received from these engagements was key in our strategic and operational review and is critical in informing the Board’s decision-making processes. We have heard strong support from our shareholders for our Goodyear Forward plan.

I hope you will join our 2024 Annual Meeting of Shareholders, which will be held on April 8, 2024 at the Sheraton Suites Akron/Cuyahoga Falls.

On behalf of the Board, we appreciate your investment and support in Goodyear, and look forward to continuing to serve on your behalf.

 

LOGO

 

Sincerely,

 

 

Laurette T. Koellner

Chairman of the Board

 

  

 


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LOGO      

March 7, 2024

Dear Fellow Goodyear Shareholder,

 

 

It is truly an honor to join Goodyear as its Chief Executive Officer and President. I recognize what a privilege it is to lead this iconic global company with its unmatched brand and industry-leading innovation, especially during this pivotal time in its history. I had great expectations coming into this role, and everything I am learning makes me even more excited about Goodyear’s potential.

Leaders and associates throughout Goodyear have already made significant progress in implementing Goodyear Forward, our strategic transformation plan initiated under the leadership of our former CEO Rich Kramer and the Board’s Strategic and Operational Review Committee. I am grateful to Rich for his leadership in developing the plan and driving early execution, and I am pleased to carry on that work, with the goals of strengthening Goodyear’s foundation and delivering sustainable shareholder value creation. I want you to know that I am committed to Goodyear Forward and confident it is the right strategy for Goodyear as we unlock new opportunities for growth and pave the way for the Company’s enduring success.

Consistent with this commitment, since I joined in early January, I have been focused on developing a deep understanding of Goodyear: meeting with our associates, visiting our factories and getting to know our customers. I’m engaging in deep dives on each element of the Goodyear Forward plan and its associated workstreams.

In the short time since I joined Goodyear, I have been thoroughly impressed by the talented team of associates who are enabling mobility around the world. I’m grateful for all their drive and teamwork as we position the Company for long-term success. Their dedication is another reason I believe that we are on the right track to meaningfully enhance Goodyear’s capabilities and cost effectiveness for the long term.

I appreciate your confidence and support as we continue this journey, and I look forward to meeting with our investors as part of my learning process and on an ongoing basis. We will update you regularly on our progress and ensure that investor perspective is properly reflected it in our decision-making. I look forward to our future collaboration.

 

LOGO

 

Sincerely,

 

 

Mark W. Stewart

Chief Executive Officer and President

 

 

  

 


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LOGO

NOTICE OF 2024 ANNUAL MEETING OF SHAREHOLDERS AND PROXY STATEMENT

 

 

 

To the shareholders:

 

The 2024 Annual Meeting of Shareholders of The Goodyear Tire & Rubber Company, an Ohio corporation (“Goodyear,” “Company,” “we,” “our” or “us”) will be held at the Sheraton Suites Akron/Cuyahoga Falls, 1989 Front Street, Cuyahoga Falls, Ohio, on Monday, April 8, 2024 at 4:30 p.m., Eastern Time, for the following purposes (the “Annual Meeting”):

 

 

LOGO    To elect the thirteen members of the Board of Directors named in the Proxy Statement to serve one-year terms expiring at the 2025 Annual Meeting of Shareholders (Proposal 1);

 

LOGO   To consider and approve an advisory resolution regarding the compensation of our named executive officers (Proposal 2);

 

LOGO    To consider and approve a proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024 (Proposal 3); and

 

LOGO   To act upon such other matters and to transact such other business as may properly come before the meeting or any postponements or adjournments thereof.

  

Location:

 

Sheraton Suites

Akron/Cuyahoga Falls

1989 Front Street

Cuyahoga Falls, Ohio 44221

 

Time & Date:

 

Monday, April 8, 2024 at 4:30 p.m.,

Eastern Time

 

 

The Board of Directors fixed the close of business on February 16, 2024 as the record date for determining shareholders entitled to notice of, and to vote at, the 2024 Annual Meeting. Only holders of record of shares of common stock, without par value, of Goodyear (“Common Stock”) at the close of business on February 16, 2024 will be entitled to vote at the 2024 Annual Meeting and postponements or adjournments, if any, thereof.

 

If you are not able to attend, we hope that you will vote by proxy. These proxy materials contain detailed information about the matters on which we are asking you to vote. Please read the materials, including the Board’s recommendation on each Proposal, thoroughly. Your vote is very important to us.

 

March 7, 2024

By order of the Board of Directors

 

LOGO

 

Daniel T. Young, Secretary

  

 

 

LOGO

 

Please vote via the internet or by telephone or complete, date and sign your Proxy and return it promptly in the enclosed envelope

 


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LOGO

  

 

PROXY STATEMENT SUMMARY

This summary is an overview of information that you will find elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. This proxy statement and the form of proxy are first being sent to shareholders on or about March 7, 2024.

Proposals and Board Recommendations

 

Proposal    Board’s Voting Recommendation    Page Reference  
       

1.

  Election of Directors    FOR each Nominee      16  

2.

  Advisory Vote on Executive Compensation    FOR      23  

3.

  Ratification of Appointment of Independent Registered Public Accounting Firm    FOR      89  

 

 

Business Overview

 

Goodyear is one of the world’s leading manufacturers of tires, engaging in operations in most regions of the world. In 2023, our net sales were $20,066 million and Goodyear net loss was $689 million. We develop, manufacture, distribute and sell tires for most applications through our strong portfolio of brands, led by the Goodyear brand, one of the most recognizable brand names in the world, as well as the Cooper, Dunlop, Kelly, Mastercraft, Roadmaster, Debica, Sava and Fulda brands.

 

We are one of the world’s largest operators of commercial truck service and tire retreading centers. We operate approximately 950 retail outlets where we offer our products for sale to consumer and commercial customers and provide repair and other services. We have a pervasive distribution network that is focused on making the tire buying process easier — with a concentrated network of aligned third-party distributors, approximately 300 warehouse distribution facilities, and a leading business-to-consumer e-commerce platform.

 

We manufacture our products in 55 manufacturing facilities in 22 countries, including the United States, and we have marketing operations in almost every country around the world. We employ approximately 71,000 full-time and temporary associates worldwide.

 

   i 

 


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LOGO

  

PROXY SUMMARY  

 

 

2023 Year in Review

Operating results in 2023 included significant sequential margin expansion on improving costs, despite a persistently weak volume environment across both consumer and commercial replacement markets.

The replacement tire industry was down 1% in 2023, with the weakest segments being U.S. and European commercial replacement given lower freight demand and consumer replacement in Europe, Middle East and Africa (“EMEA”) generally. Despite these developments, Goodyear maintained its leading position in the U.S. replacement market and remains a leader in other key markets throughout the globe. Goodyear also continued to perform well at original equipment (OE) with our win rate on new electric vehicle (EV) fitments remaining strong.

While the first half of the year was impacted by higher raw material and other costs, improving trends during the year enabled significant margin expansion. These trends culminated in double-digit segment operating margins in two of our regions by the fourth quarter, including Americas where segment operating income margin was the highest quarterly result since 2021. Improved earnings and reduced working capital to exit 2023 contributed to the strongest quarterly operating cash flow since before the pandemic.

Looking ahead, we began to lay the foundation for the next stages of our growth. The formation of a Board-led strategic and operational review culminated in the creation of a two-year transformation plan called Goodyear Forward. Building on our strengths, the plan is focused on optimizing our portfolio, delivering significant margin expansion and reducing leverage to drive sustainable and substantial shareholder value creation. During 2023, we began to drive the execution of that plan, which is expected to begin delivering value throughout 2024.

 

   ii 

 


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LOGO

  

PROXY SUMMARY  

 

 

Shareholder Engagement and Responsiveness

We believe that it is important for us to communicate regularly with shareholders regarding areas of interest or concern. We have a robust shareholder engagement program that includes an annual outreach that is focused on our long-term business strategy, executive compensation, corporate governance, corporate responsibility and other topics suggested by our shareholders. Our annual outreach helps to ensure that our shareholders are heard and able to communicate directly with us on these important matters.

As part of our annual outreach (based on our outstanding Common Stock as of September 30, 2023):

 

 

 

LOGO   We requested the opportunity to meet with shareholders representing 80% of outstanding shares held by institutional investors.   LOGO   We engaged with shareholders representing 65% of outstanding shares held by institutional investors. Our Lead Director and the Chairman of our Compensation Committee participated in many of the meetings.

Our outreach this year gave us an opportunity to discuss:

 

   

The work of the Board’s Strategic and Operational Review Committee and the development of the Goodyear Forward transformation plan;

   

Management succession planning activities, Board refreshment and composition, and other corporate governance matters;

   

Executive compensation, including investor feedback on recent changes to our executive compensation program; and

   

Our sustainability initiatives and disclosures, including the validation of our science-based near-term and net-zero greenhouse gas reduction targets by the Science Based Targets initiative during 2023.

 

   iii 

 


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LOGO

  

PROXY SUMMARY  

 

 

Executive Compensation Highlights

Our executive compensation program is designed to support achievement of our business objectives and to serve the long-term interests of our shareholders and is strongly aligned to Company performance and measurable financial and other metrics, thereby aligning management’s interests with our shareholders’ interests by focusing management on driving increased shareholder value. Our financial and other metrics also continue to be aligned with our strategic objectives, as shown in the table below.

 

Strategic Objective    Metric
Competitive Advantage    Market Share and Variable Manufacturing Cost
Profitability    EBIT, Net Income and Strategic Initiatives Index (Structural Cost Improvement)
Strong Liquidity    Free Cash Flow
Return Generated on Investments in Business    Cash Flow Return on Capital
Superior Shareholder Returns    Relative TSR Modifier
New Mobility    New Mobility Goals
Corporate Responsibility and Sustainability    ESG Goals and Strategic Initiatives Index (Reduction in Greenhouse Gases)
Specific Drivers of Success of Business   

Individual Strategic Objectives

 

   iv 

 


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LOGO

  

PROXY SUMMARY  

 

 

The resulting compensation for our named executive officers is comprised of a mix of variable and fixed compensation that is strongly linked to our performance. For 2023, our compensation metrics were:

 

        

Incentive Program

 

 

Metrics

 

    

 

Weighting

 

 

 

 
 

 

ANNUAL 

INCENTIVES 

    

Annual Incentive Plan  

 

Market Share

  

 

15%

 

 
      

Cost

  

 

15%

 

 
      

Free Cash Flow

  

 

20%

 

 
      

EBIT

  

 

20%

 

 
      

New Mobility

  

 

10%

 

 
      

Environmental, Social and Governance (ESG)

  

 

10%

 

 
      

Individual Strategic Objectives

  

 

10%

 

 
                     
 LONG-TERM  
 AWARDS  
            

2023-2025 Awards

 

2023 Performance Period Financial Metrics

           
    

Performance-Based Awards

(Paid out in Equity and Cash)

 

 

Net Income

 

  

 

50%

 

 

LOGO

    

 

Cash Flow Return on Capital

 

  

 

 

 

 

50%

 

 

 

 

     Strategic Initiatives Index      +0-25
  
    

  Reduction in Greenhouse Gas Emissions

  Structural Cost Improvements

   

   

 
    

 

Restricted Stock Units

 

Three-year cliff vesting

              

Director Nominees

Our well-qualified and diverse group of directors brings an important mix of leadership, boardroom and operating experience to Goodyear. Our directors provide us with critical insights on many important issues facing our business. These collective attributes enable the Board to exercise appropriate independent oversight of management and pursue long-term, sustainable shareholder value creation by providing strategic input on the development and oversight of the implementation of our long-term strategy.

Our Board seeks to have well-balanced tenures, with longer serving directors who provide knowledge of our business through industry cycles and newer directors with fresh perspectives. During 2023, following an extensive and thoughtful search process, we added three new directors to our Board. Our new directors, Joseph Hinrichs, Max Mitchell and Roger Wood, bring extensive industry experience, deep expertise in driving corporate strategy and optimizing results, and a commitment to building excellence through investment in people and culture.

Consistent with our Corporate Governance Guidelines, the Governance Committee seeks nominees who will provide a diversity of perspectives in Board deliberations, as well as diversity in personal characteristics, such as age, gender and ethnicity. While the Board has not adopted a formal policy with regard to the consideration of diversity in identifying director nominees, the Governance Committee and the Board believe that considering diversity is consistent with the goal of creating a Board that best serves the needs of the Company and the interests of its shareholders, and it is one of the many factors that they consider when identifying individuals for Board membership.

 

   v 

 


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LOGO

  

PROXY SUMMARY  

 

 

The composition of the nominees for election to the Board at the 2024 Annual Meeting is reflected below. See Proposal 1 for additional details.

 

 

LOGO

 

 

LOGO

Corporate Governance Highlights

 

 

 

WE HAVE AN ABIDING COMMITMENT TO GOOD GOVERNANCE, AS ILLUSTRATED BY THE FOLLOWING PRACTICES:

 

•  Annually elected directors; no classified board

 

•  Majority voting for the election of directors with a resignation policy

 

•  Independent Board Chairman with clear, robust responsibilities

 

•  100% independent audit, compensation and nominating committees

 

•  Regular executive sessions of the independent directors

 

•  Conduct annual Board and Committee evaluations

 

•  Proxy access available to 3 year, 3% shareholders for up to 20% of Board

 

  

•  Overboarding policy in place for directors

 

•  No poison pill in place

 

•  Shareholders have the right to call a special meeting at 25%

 

•  Robust claw-back policy for accounting restatements and detrimental conduct

 

•  Clear and robust corporate governance guidelines

 

•  Maintain a leading corporate responsibility program with Board oversight

 

   vi 

 


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LOGO

     

 

TABLE OF CONTENTS

 

    Notice of 2024 Annual Meeting of Shareholders and Proxy Statement
    Proxy Statement Summary
1   Corporate Governance Principles and Board Matters
2   Board Leadership Structure
3   Board’s Role in Risk Oversight
5   Management Succession Planning
5   Consideration of Director Nominees
5   Director Selection Guidelines
6   Identifying and Evaluating Nominees for Director
8   Board Structure and Committee Composition
13   Corporate Responsibility
15   Communications with the Board
15   Board Independence
15   Overboarding Policy
16   Proposal 1 – Election of Directors
23   Proposal 2 – Advisory Vote to Approve the Compensation of Our Named Executive Officers
24   Compensation Discussion and Analysis Table of Contents
25   Compensation Discussion and Analysis
25   Executive Summary
28   Compensation Philosophy and Strategy
29   Process for Determining Executive Compensation
33   2023 Executive Compensation Elements
34   Annual Compensation
41   Long-Term Compensation
49   2024 Chief Executive Officer and President Compensation
50   Retirement and Other Benefits
54   Compensation Policies and Practices
56   Compensation Committee Report
57   Executive Compensation
57   Summary Compensation Table
59   Summary of Realized Pay Earned by Our Chief Executive Officer for 2021, 2022 and 2023
60   Grants of Plan-Based Awards
62   Outstanding Equity Awards at Fiscal Year-End
64   Option Exercises and Stock Vested
64   Defined Contribution Plan Benefits
65   Pension Benefits
68   Nonqualified Deferred Compensation
68   Potential Payments Upon Termination or Change-in-Control
75   Director Compensation Table
77   Risks Related to Compensation Policies and Practices
77   Pay Ratio
78   Item 402(v) Pay Versus Performance Table
83   Beneficial Ownership of Common Stock
86   Related Person Transactions
87   Principal Accountant Fees and Services
88   Report of the Audit Committee
89   Proposal 3 – Ratification of Appointment of Independent Registered Public Accounting Firm
91   General Information
91   Shares Voting
91   Vote Required
92   Adjourned Meeting
92   Voting Shares Held in Street Name
93   Savings Plan Shares
93   Voting of Proxy
93   Revocability of Proxy
94   Confidentiality
94   Shareholders Sharing the Same Address
94   Form 10-K
95   Costs of Solicitation
95   Submission of Shareholder Proposals and Nominations
96   Other Business
97   Exhibits
97   Exhibit A - Use of Forward-Looking Statements
 

 

USE OF FORWARD-LOOKING STATEMENTS

For additional information regarding our use of forward-looking statements in this Proxy Statement, see Exhibit A.


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LOGO

  

 

 

CORPORATE GOVERNANCE

PRINCIPLES AND BOARD MATTERS

Goodyear is committed to having sound corporate governance principles. Having such principles is essential to running Goodyear’s business efficiently and to maintaining Goodyear’s integrity in the marketplace. Goodyear’s Corporate Governance Guidelines, Business Conduct Manual, Board of Directors and Executive Officers Conflict of Interest Policy and charters for each of the Audit, Human Capital and Compensation, Corporate Responsibility and Compliance, Finance, and Governance Committees are available at https://corporate.goodyear.com/us/en/investors/governance/documents-charters.html. Please note, however, that information contained on the website is not incorporated by reference in this Proxy Statement or considered to be a part of this document. A copy of the committee charters and corporate governance policies may also be obtained upon request to the Goodyear Investor Relations Department.

COMMITTEE MEMBERSHIP AND MEETINGS HELD DURING 2023

 

        Committees
  

 

  Independent   Audit  

Human
Capital &

Compensation 

 

Corporate
Responsibility

& Compliance

  Finance   Governance   Strategic &
Operational
Review
  Executive
             

Ms. Clayton

 

LOGO

 

 

MEMBER

     

MEMBER

               
             

Mr. Firestone

 

LOGO

 

     

  CHAIR  

     

MEMBER

     

MEMBER

 

MEMBER

             

Mr. Geissler

 

LOGO

 

 

MEMBER

         

MEMBER

           
             

Mr. Hinrichs

 

LOGO

 

     

MEMBER

 

MEMBER

               
             

Ms. Koellner, Chairman1

 

LOGO

 

     

MEMBER

         

MEMBER

     

  CHAIR  

             

Mr. Kramer, Former Chairman and CEO1

                         

  CHAIR  

 

MEMBER

             

Ms. Lewis

 

LOGO

 

             

  CHAIR  

 

MEMBER

     

MEMBER

             

Mr. Mahendra-Rajah

 

LOGO

 

 

MEMBER

     

MEMBER

               
             

Mr. McGlade

 

LOGO

 

 

  CHAIR  

             

MEMBER

     

MEMBER

             

Mr. Mitchell

 

LOGO

 

             

MEMBER

     

MEMBER

   
             

Mr. Palmore

 

LOGO

 

 

MEMBER

     

  CHAIR  

             

MEMBER

             

Ms. Siu

 

LOGO

 

         

MEMBER

 

MEMBER

           
             

Mr. Wessel

             

MEMBER

               
             

Mr. Williams

 

LOGO

 

     

MEMBER

         

  CHAIR  

 

MEMBER

 

MEMBER

             

Mr. Wood

 

LOGO

 

 

MEMBER

                 

MEMBER

   
                 

Number of Meetings in 2023

      5   5   3   3   10   6   11

 

1

Mr. Kramer retired as Chairman of the Board, Chief Executive Officer and President of the Company effective as of January 29, 2024. Ms. Koellner was elected Chairman of the Board effective as of January 29, 2024.

 

   1 


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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS  

LOGO

  

Board Leadership Structure  

 

 

Board Leadership Structure

During 2023, the Board maintained a joint Chairman and Chief Executive Officer, and a separate independent Lead Director. When Mr. Kramer announced his retirement in late 2023, the Board reviewed its leadership structure in connection with its succession planning activities. The Board ultimately decided to separate the roles of Chairman of the Board of Directors and Chief Executive Officer, effective January 29, 2024, and elected Ms. Koellner, the former Lead Director, as Chairman of the Board. The Board believes that this leadership structure is the most appropriate for the Company and its shareholders at this time. The Board does not have a specific policy with respect to separating or combining the roles of Chairman and Chief Executive Officer, or whether the Chairman should be an employee or non-employee director, and will continue to review the Board leadership structure in light of corporate governance standards, market practice and the Company’s specific needs and circumstances.

Currently, the Board believes that having Ms. Koellner serve as Chairman and Mr. Stewart serve as Chief Executive Officer and President best positions the Company to compete successfully and advance our shareholders’ interests. We believe this structure promotes active participation of the independent directors and strengthens the role of the Board in fulfilling its oversight responsibility while recognizing the day-to-day management direction provided by the Chief Executive Officer.

Ms. Koellner has served as a member of the Board since February 2015 and as Lead Director from June 30, 2019 through January 29, 2024, when she was elected Chairman of the Board. Ms. Koellner’s deep knowledge of the Company and her significant board leadership and senior executive management experience, including extensive international business experience, as well as financial and human resources experience, is valuable to the Board in her role as Chairman.

The Governance Committee believes that Ms. Koellner is highly qualified to serve as our Chairman and that she provides strong leadership of the Board and the independent and non-management directors and diligently fulfills her duties as Chairman.

 

CHAIRMAN DUTIES

 

    Preside at all meetings of the Board, including executive sessions of the independent directors

 

    Interact directly with all members of the Board and provide for the Board to fulfill its responsibilities effectively

 

    Call meetings or executive sessions of the independent directors, and coordinate and develop the agenda for those meetings or sessions

 

    Approve the schedule of Board meetings to ensure that there is sufficient time for discussion of all agenda items

 

    Approve all information sent to the Board, including meeting agendas, and advise on and specifically request the inclusion of information in meeting materials
  Interview, along with the Chairman of the Governance Committee, all Board candidates and make recommendations to the Governance Committee and the Board  

 

  Discuss with the Governance Committee the membership of Board committees and the selection of committee chairmen  

 

  Evaluate, together with the Compensation Committee, the CEO’s performance, and meet with the CEO to discuss that evaluation  

 

  Assist the Governance Committee in connection with the annual Board and committee evaluation process, and address any issues regarding director performance  

 

  If requested by major shareholders, ensure that she is available for consultation and direct communication in appropriate circumstances  
 

 

 

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Board Leadership Structure  

 

 

In addition to the comprehensive oversight responsibilities of our independent Chairman of the Board, the other independent directors have ample opportunity to, and regularly do, assess the performance of the CEO and provide meaningful direction to him.

The Board has strong and effective independent oversight of management:

 

 

85% of the Company’s director nominees are independent;

 

 

All members of the Audit, Compensation and Governance Committees are independent directors;

 

 

Committee Chairmen, all of whom are independent, approve agendas for their committee meetings;

 

 

Board and Committee agendas are prepared based on discussions with all directors and recommendations from management, and all directors are encouraged to request agenda items, additional information and/or modifications to schedules as they deem appropriate; and

 

 

The Board holds executive sessions of the independent directors at each Board meeting that are led by the Chairman of the Board.

The Board’s policy is that it must retain the flexibility to determine the most effective Board leadership structure at any particular point in time. As a result, the Board has the responsibility to establish our leadership structure, including in connection with any CEO succession. Some of the factors that the Board has considered, and may consider in the future, in combining or separating the Chairman and CEO roles, include:

 

 

The respective responsibilities of the Chairman of the Board and the CEO;

 

 

The effectiveness of the current Board leadership structure, including the Board’s assessment of the performance of the Chairman and CEO and whether the Board is maintaining strong, independent oversight of management;

 

 

Shareholder views on our Board leadership structure;

 

 

The Company’s operating and financial performance, including the potential impact of particular leadership structures on the Company’s performance;

 

 

The ability to attract or retain well-qualified candidates for the positions of CEO and Chairman of the Board;

 

 

Practices at other similarly situated U.S. public companies; and

 

 

Legislative and regulatory developments.

Board’s Role in Risk Oversight

Management continually monitors the material risks facing the Company, including competitive, strategic, operational, financial (accounting, liquidity and tax), legal, regulatory, cybersecurity, and environmental, social and governance risks. The Board as a whole has responsibility for oversight of management’s identification and management of, and planning for, those risks. Reviews of certain areas are conducted by relevant Board Committees that report their deliberations to the Board.

The Board and its Committees oversee risks associated with their principal areas of focus, as summarized below. The Board and its Committees exercise their risk oversight function by carefully evaluating the reports they receive from management and

 

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Board’s Role in Risk Oversight  

 

 

by making inquiries of management with respect to areas of particular interest to the Board. Board oversight of risk is enhanced by the fact that the Chairman attends virtually all Committee meetings and that Committee reports are provided to the full Board following each Committee meeting. We believe that our leadership structure also enhances the Board’s risk oversight function since our Chairman regularly discusses the material risks facing the Company with management. Our CEO, who is also a director, is expected to report candidly to his fellow directors on his assessment of the material risks we face, based upon the information he receives as part of his management responsibilities. The Chairman and the CEO are well-equipped to lead Board discussions on risk issues.

BOARD/COMMITTEE AREAS OF RISK OVERSIGHT

 

 

 

Full Board   

  Strategic, financial and execution risk associated with the annual operating plan and strategic plan (including allocation of capital investments), as well as the Goodyear Forward transformation plan;

 

  Major litigation and regulatory matters;

 

  Significant acquisitions and divestitures; and

 

  Management succession planning.

Audit Committee   

  Risks associated with financial matters, particularly financial reporting and disclosure, accounting, and internal controls, information technology and cybersecurity, and internal controls over ESG reporting.

Human Capital and
Compensation Committee
  

  Risks associated with the establishment and administration of executive compensation, incentive compensation programs, diversity and inclusion, and performance management of officers.

Governance Committee   

  Risks associated with Board effectiveness and organization, corporate governance matters, and director succession planning.

Finance Committee   

  Risks associated with liquidity, pension plans (including investment performance, asset allocation and funded status), tax strategies, currency and interest rate exposures, and insurance strategies.

Committee on Corporate
Responsibility and Compliance
  

  Risks associated with health, safety and the environment, climate change, sustainability, product quality, and the Company’s legal and ethical compliance programs.

 

 

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Management Succession Planning  

 

 

Management Succession Planning

The Board of Directors considers the selection and retention of, and succession planning for, the Chief Executive Officer and other senior leaders to be one of its most important responsibilities. In accordance with our Corporate Governance Guidelines, the CEO delivers a report regarding succession planning with respect to the office of the Chief Executive Officer and other members of the executive management team on at least an annual basis. The Board then discusses management succession with the CEO, and during an executive session when the CEO is not present. These discussions include an evaluation of potential internal candidates for succession and identification of additional experience that candidates should gain to be ready to succeed in their proposed new roles. The Board also retains, from time to time, outside advisors to assist the Board in assessing our senior leadership and identifying developmental needs. As necessary, the Board also considers the need to recruit talent externally if internal candidates do not possess the requisite skills. In practice, these discussions often occur more frequently than annually, based on the Company’s needs at any particular time.

The Board also reviews, on an annual basis, talent across the entire organization, in particular diversity and how promotions and new hires supplement the diversity pool, focusing on what skill sets are needed for the that group to be successful. More frequent updates on progress against our goals are provided to the Human Capital and Compensation Committee (the “Compensation Committee”) in their meetings throughout the year. Associates who may become members of the executive team in the next five to ten years are provided exposure to the Board through presentations and other networking events.

Examples of the Board’s succession planning activities are the recently announced leadership changes. In November, Mr. Kramer finalized his plans to retire as Chairman, CEO and President of the Company. In connection with Mr. Kramer’s planned retirement, which was previously discussed with the Board as part of the Company’s ongoing and active succession planning process, the Board retained a leading executive search firm and conducted an extensive search, which considered both internal and external candidates for the CEO role. Ultimately, in January 2024, we named Mark W. Stewart as CEO and President. In addition, the position of Chairman of the Board was transitioned from Mr. Kramer to Ms. Koellner, our former independent Lead Director.

Consideration of Director Nominees

The Governance Committee will consider properly submitted shareholder nominations of candidates for membership on the Board as described below under “Identifying and Evaluating Nominees for Director.” In evaluating nominations, the Governance Committee seeks to address the criteria described below under “Director Selection Guidelines.”

Any shareholder desiring to submit a proposed candidate for consideration by the Governance Committee should send the name of the proposed candidate, together with biographical data and background information concerning the candidate, to the Office of the Secretary, The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001.

Director Selection Guidelines

The Board of Directors has approved guidelines for selecting directors as part of our Corporate Governance Guidelines. Criteria considered in the selection of directors include:

 

 

Personal qualities and characteristics, including the highest personal and professional integrity, sound judgment, and reputation in the business community or a record of public service;

 

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Director Selection Guidelines  

 

 

 

Substantial business experience or professional expertise and a record of accomplishments;

 

 

Experience and stature necessary to be highly effective, working with other members of the Board, in serving the long-term interests of shareholders;

 

 

Ability and willingness to devote sufficient time to the affairs of the Board and the Company and to carry out their duties effectively;

 

 

The needs of the Company at the time of nomination to the Board and the fit of a particular individual’s skills and personality with those of the other directors in building a Board that is effective and responsive to the needs of the Company;

 

 

Diverse business experience, substantive expertise, skills and background, as well as diversity in personal characteristics, such as age, gender and ethnicity; and

 

 

Ability to satisfy Goodyear’s and The Nasdaq Stock Market’s independence standards.

Identifying and Evaluating Nominees for Director

The Governance Committee (in this section, the “Committee”) is responsible for identifying, screening and recommending persons for nomination to the Board. The Committee considers candidates for Board membership suggested by its members and other Board members, as well as management and shareholders. On occasion, the Committee also retains third-party executive search firms to identify candidates. Under our prior master labor agreement with the United Steelworkers (the “USW”), the USW had the right to nominate a candidate for consideration for membership on the Board. Mr. Wessel, who became a director in December 2005, was identified and recommended by the USW. Messrs. Hinrichs, Mitchell and Wood became directors in connection with a cooperation agreement with Elliott Investment Management L.P. following an extensive and thoughtful search process.

Once a prospective nominee has been identified, the Committee makes an initial determination on whether to conduct a full evaluation of the candidate. This initial determination is based on whatever information is provided to the Committee with the recommendation of the prospective candidate, as well as the Committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members and the likelihood that the prospective nominee can satisfy the director selection guidelines described above. If the Committee determines, in consultation with the Lead Director or non-executive Chairman of the Board and other Board members as appropriate, that additional consideration is warranted, it may request a third-party search firm to gather additional information about the prospective nominee’s background and experience and to report its findings to the Committee. The Committee then evaluates the prospective nominee against the standards and qualifications set out in Goodyear’s director selection guidelines. The Committee also considers such other relevant factors as it deems appropriate, including the balance of management and independent directors and the evaluations of other prospective nominees. The Committee seeks to have a diverse Board representing a range of backgrounds, knowledge and skills relevant to the Company’s business and the needs of the Board. We consider the members of our Board to have a diverse set of business and personal experiences, backgrounds and expertise, and to be diverse in terms of age, gender and ethnicity. These diversity characteristics are among the Board’s priorities when evaluating a pool of potential director candidates.

 

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Identifying and Evaluating Nominees for Director  

 

 

In connection with this evaluation, the Committee determines whether to interview the prospective nominee, and if warranted, the Chairman of the Committee, one or more other members of the Committee and others as appropriate, interview prospective nominees in person or by telephone. After completing this evaluation and interview, the Committee makes a recommendation to the full Board as to the persons who should be nominated for election to the Board, and the Board makes its decision after considering the recommendation and report of the Committee.

DIRECTOR SKILL AND DIVERSITY MATRIX

Our Board nominees are committed, qualified individuals with a diverse and complementary blend of skills, business and personal experiences, backgrounds and expertise, including the following:

 

Skills   LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO  

Public Company CEO/CFO

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO      

 

 

 

 

 

    LOGO       LOGO       LOGO       LOGO      

 

 

 

 

 

    LOGO      

 

 

 

 

 

    LOGO  

Financial Expert / M&A / Capital Markets

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO       LOGO       LOGO       LOGO       LOGO       LOGO       LOGO      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO  

Industrial Manufacturing

    LOGO       LOGO      

 

 

 

 

 

    LOGO       LOGO       LOGO       LOGO       LOGO       LOGO      

 

 

 

 

 

    LOGO      

 

 

 

 

 

    LOGO  

Automotive / Auto Supply Chain

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO      

 

 

 

 

 

    LOGO       LOGO      

 

 

 

 

 

    LOGO      

 

 

 

 

 

    LOGO      

 

 

 

 

 

    LOGO  

Technology

    LOGO      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO      

 

 

 

 

 

    LOGO       LOGO       LOGO      

 

 

 

 

 

   

 

 

 

 

 

International

    LOGO       LOGO       LOGO       LOGO       LOGO      

 

 

 

 

 

    LOGO       LOGO       LOGO       LOGO       LOGO      

 

 

 

 

 

    LOGO  

Marketing and Branded Consumer Products

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO       LOGO      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO       LOGO      

 

 

 

 

 

   

 

 

 

 

 

Business Model Transformation

   

 

 

 

 

 

    LOGO       LOGO       LOGO      

 

 

 

 

 

    LOGO      

 

 

 

 

 

   

 

 

 

 

 

    LOGO       LOGO       LOGO      

 

 

 

 

 

    LOGO  

Legal / Regulatory

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO      

 

 

 

 

 

Demographics    

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

Age

    65       69       70       57       69       58       54       70       60       64       56       64       61  

Gender Diverse

    F       M       M       M       F       F       M       M       M       F       M       M       M  

African American

    LOGO      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

Asian

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO      

 

 

 

 

 

   

 

 

 

 

 

    LOGO      

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

White

   

 

 

 

 

 

    LOGO       LOGO       LOGO       LOGO       LOGO      

 

 

 

 

 

    LOGO       LOGO      

 

 

 

 

 

    LOGO       LOGO       LOGO  

LGBTQ+

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

   

 

 

 

 

 

    LOGO      

 

 

 

 

 

   

 

 

 

 

 

 

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Identifying and Evaluating Nominees for Director  

 

 

 

 

Public Company CEO/CFO    Directors who have served in senior leadership roles at large organizations provide us with a practical understanding of organizations, processes, strategy, risk management and other factors that promote growth.

Financial Expert/M&A/Capital

Markets

   An understanding of finance and accounting assists our directors in overseeing our financial reporting and internal controls to ensure they are accurate and transparent.
Industrial Manufacturing    Directors with manufacturing experience provide valuable insight to management on the development and execution of our strategy.

Automotive / Auto Supply

Chain

   Directors with experience in automotive or the automotive supply chain provide valuable insight to management on our broader industry and the factors impacting it.
Technology    Directors with expertise in technology provide valuable insight to management in developing advanced technologies that enable us to deliver superior products and services to our customers and directors with cybersecurity experience help us to effectively manage our information technology and cybersecurity risks.
International    As a global company, we benefit from our directors who have experience with multinational companies or in international markets to help direct our global business plans and navigate challenges that we may encounter in our international operations.

Marketing and Branded

Consumer Products

   Marketing and branding initiatives are essential to our growth strategy to increase market share in a competitive industry.

Business Model

Transformation

   Directors who have enabled transformational growth help us consider how our products and services are delivered in the market as consumer preferences change over time.
Legal/Regulatory    Directors with knowledge of the legal and regulatory framework in which we operate help evaluate risks and how our business may be impacted by governmental actions and public policy.

 

Board Structure and Committee Composition

As of the date of this Proxy Statement, Goodyear’s Board has fifteen directors, each elected annually, and the following seven committees: (1) Audit, (2) Human Capital and Compensation, (3) Corporate Responsibility and Compliance, (4) Finance, (5) Governance, (6) Strategic and Operational Review and (7) Executive. The membership and the function of each of the committees are described below. Each of the committees operates under a written charter adopted by the Board, except for the Executive Committee which is provided for by our Code of Regulations. During 2023, the Board held 15 meetings. Each director attended at least 75% of all Board and applicable Committee meetings. Directors are expected to attend annual meetings of Goodyear’s shareholders. All of the directors who then served on the Board attended the last annual meeting of shareholders.

 

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Audit Committee  

 

 

 

Audit Committee

 

MEMBERS:

 

Ms. Clayton

 

Mr. Geissler

 

Mr. Mahendra-Rajah

 

 

Mr. McGlade (Chairman)

 

Mr. Palmore

 

Mr. Wood

 

MEETINGS IN 2023: 5

 

The Board has determined that each member of the Audit Committee is independent within the meaning of Goodyear’s independence standards and applicable Securities and Exchange Commission (“SEC”) rules and regulations, and Mr. Mahendra-Rajah, Mr. McGlade and Mr. Wood are audit committee financial experts.

      

KEY RESPONSIBILITIES:

 

The Audit Committee assists the Board in fulfilling its responsibilities for oversight of the integrity of Goodyear’s financial statements, Goodyear’s compliance with legal and regulatory requirements related to financial reporting, the independent registered public accounting firm’s qualifications and independence, and the performance of Goodyear’s internal auditors and independent registered public accounting firm. The Audit Committee appoints, evaluates and determines the compensation of Goodyear’s independent registered public accounting firm; reviews and approves the scope of the annual audit plan; reviews and pre-approves all auditing services and permitted non-audit services (and related fees) to be performed by the independent registered public accounting firm; oversees investigations into complaints concerning financial matters; reviews policies and guidelines with respect to risk assessment and risk management, including Goodyear’s major financial risk exposures; oversees Goodyear’s information technology and cybersecurity strategy; prepares the Audit Committee report for inclusion in the annual proxy statement; oversees management’s design, implementation and operation of disclosure and internal controls over ESG reporting; and annually reviews the Audit Committee charter and the Committee’s performance. The Audit Committee works closely with management as well as Goodyear’s independent registered public accounting firm. The Audit Committee has the authority to obtain advice and assistance from, and receive appropriate funding from Goodyear for, outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties.

 

The report of the Audit Committee is on page 88 of this Proxy Statement.

 

 

Human Capital and Compensation Committee

 

MEMBERS:

Mr. Firestone (Chairman)

 

Mr. Hinrichs

 

Ms. Koellner

 

Mr. Williams

 

MEETINGS IN 2023: 5

 

The Board has determined that each member of the Compensation Committee is independent within the meaning of Goodyear’s independence standards and applicable Nasdaq listing standards.

      

KEY RESPONSIBILITIES:

 

The Board of Directors has delegated to the Compensation Committee primary responsibility for establishing and administering Goodyear’s compensation programs for officers and other key personnel. The Compensation Committee oversees Goodyear’s compensation and benefit plans and policies for directors, officers and other key personnel, administers its incentive compensation plans (including reviewing and approving grants to officers and other key personnel), and reviews and approves annually all compensation decisions relating to officers, including the Chief Executive Officer. The Compensation Committee also prepares a report on executive compensation for inclusion in the annual proxy statement, reviews and discusses the Compensation Discussion and Analysis with management and recommends its inclusion in the annual proxy statement, and periodically reviews our diversity and inclusion strategies and progress. The report of the Compensation Committee is on page 56 of this Proxy Statement.

 

In performing its duties, the Compensation Committee meets periodically with the CEO to review compensation policies and specific levels of compensation paid to officers and other key personnel, and reports and makes recommendations to the Board regarding executive compensation policies and plans. The Compensation Committee informs the non-management directors of the Board of its decisions regarding compensation for the CEO and

 

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Human Capital and Compensation Committee  

 

 

 

Human Capital and Compensation Committee (continued)

 

      

other significant decisions related to the administration of its duties. The Compensation Committee also will consider the results of shareholder advisory votes on executive compensation matters and the changes, if any, to Goodyear’s executive compensation policies, practices and plans that may be warranted as a result of any such vote and reviews an annual risk assessment of Goodyear’s executive compensation policies, practices and plans as part of its role in overseeing management’s identification and management of, and planning for, compensation-related risks. Under its charter, the Compensation Committee may delegate its authority to one or more of its members as appropriate.

 

The Compensation Committee has the authority to retain outside advisors, including independent compensation consultants, to assist it in evaluating actual and proposed compensation for officers. The Compensation Committee also has the authority to approve, and receive appropriate funding from Goodyear for, any such outside advisor’s fees. Prior to retaining any such advisors, the Compensation Committee considers the independence-related factors identified in applicable securities laws and Nasdaq listing standards. During 2023, the Compensation Committee retained Exequity LLP as its compensation consultant, and has determined that Exequity is independent. The Compensation Committee solicits advice from the compensation consultants on executive compensation matters relating to the CEO and other officers. This advice is described in more detail under the heading “Compensation Discussion and Analysis — Process for Determining Executive Compensation — Independent Compensation Consultant.”

 

 

Committee on Corporate Responsibility and Compliance

 

MEMBERS:

 

Ms. Clayton

 

Mr. Hinrichs

 

Mr. Mahendra-Rajah

 

Mr. Palmore (Chairman)

 

Ms. Siu

 

Mr. Wessel

 

MEETINGS IN 2023: 3

      

KEY RESPONSIBILITIES:

 

The Committee on Corporate Responsibility and Compliance reviews Goodyear’s legal and ethical compliance programs as well as its business conduct policies and practices and its policies and practices regarding its relationships with shareholders, employees, customers, governmental agencies and the general public. The Committee monitors Goodyear’s objectives, policies, programs and performance with respect to environmental, social and governance (ESG) matters, including its climate strategy, sustainability initiatives, and compliance with environmental laws and regulations. The Committee also monitors Goodyear’s objectives, policies, programs and performance with respect to workplace health and safety and product quality. The Committee may recommend appropriate new policies to the Board of Directors.

 

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Finance Committee  

 

 

 

Finance Committee

 

MEMBERS:

 

Mr. Firestone

 

Mr. Geissler

 

Ms. Lewis (Chairman)

 

Mr. Mitchell

 

Ms. Siu

 

MEETINGS IN 2023: 3

      

KEY RESPONSIBILITIES:

 

The Finance Committee consults with management and makes recommendations to the Board of Directors regarding Goodyear’s capital structure, dividend policy, tax strategies, compliance with terms in financing arrangements, insurance strategies, banking arrangements and lines of credit, pension plan funding, and significant mergers and acquisitions and other business development activities. The Finance Committee also reviews and consults with management regarding policies with respect to interest rate and foreign exchange risk, liquidity management, counterparty risk, derivative usage, credit ratings, and investor relations activities.

 

 

Governance Committee

 

MEMBERS:

 

Ms. Koellner

 

Ms. Lewis

 

Mr. McGlade

 

Mr. Williams (Chairman)

 

MEETINGS IN 2023: 10

 

The Board has determined that each member of the Governance Committee is independent within the meaning of Goodyear’s independence standards.

      

KEY RESPONSIBILITIES:

 

The Governance Committee identifies, evaluates and recommends to the Board of Directors candidates for election to the Board. The Governance Committee also develops and recommends appropriate corporate governance guidelines, recommends policies and standards for evaluating the overall effectiveness of the Board of Directors in the governance of Goodyear and undertakes such other activities as may be delegated to it from time to time by the Board of Directors. The Governance Committee also makes recommendations to the Board of Directors regarding the composition, organization, structure and operations of the Board and its committees, including the leadership structure of the Board and separating or consolidating the positions of Chairman and Chief Executive Officer.

 

 

Strategic and Operational Review Committee

 

MEMBERS:

 

Mr. Firestone

 

Mr. Kramer (Chairman)

 

Mr. Mitchell

 

Mr. Williams

 

Mr. Wood

 

MEETINGS IN 2023: 6

      

KEY RESPONSIBILITIES:

 

The Strategic and Operational Review Committee (the “Review Committee”) is an advisory committee established in 2023 to oversee and support the Board and management’s review of various strategic and operational alternatives that may be available to the Company to maximize the long-term value of the Company. The Review Committee’s work culminated in the development of the Goodyear Forward transformation plan that was shared with investors on November 15, 2023.

 

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS  

LOGO

  

Executive Committee  

 

 

 

Executive Committee

 

MEMBERS:

 

Mr. Firestone

 

Ms. Koellner (Chairman)

 

Mr. Kramer

 

Ms. Lewis

 

Mr. McGlade

 

Mr. Palmore

 

Mr. Williams

 

MEETINGS IN 2023: 11

      

KEY RESPONSIBILITIES:

 

The Executive Committee is comprised of the Chairman of each of the Board’s other standing committees, the Chairman of the Board and the then Lead Director, who serves as Chairman of the Executive Committee. The Executive Committee may transact all business and take any actions that can be done by the Board of Directors, except that it does not have authority to fill any Board or committee vacancies.

 

During 2023, the Executive Committee met frequently to discuss succession planning activities related to the search for a new CEO.

 

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS  

LOGO

  

Corporate Responsibility  

 

 

Corporate Responsibility

In 2023, we continued to further our commitment to corporate responsibility. Corporate responsibility is an integral part of our business strategy and how we work. We are committed to ethical and sustainable practices to protect the planet and people; give back to the community; provide a safe, diverse, and healthy workplace; and engage our associates in these efforts.

Goodyear defines sustainability as responsibly balancing environmental, societal and financial demands without compromising the ability of future generations to meet their needs. We have integrated sustainability throughout the organization, and we are creating value by identifying opportunities and risks, developing strategies to address them and collaborating with our customers and other stakeholders to understand their goals and how we can work together to help achieve them.

Goodyear Better Future, our corporate responsibility governance structure focuses on enhancing the management, transparency and communication of our high-priority sustainability topics. The pillars of our corporate responsibility framework are highlighted on the following page.

ENVIRONMENTAL SUSTAINABILITY AND CLIMATE CHANGE

We are committed to reaching net-zero greenhouse gas (GHG) emissions across our value chain by 2050 from a 2019 base year. In addition, we are committed to reducing absolute Scope 1 and 2 GHG emissions 46% by 2030 from a 2019 base year, and absolute Scope 3 GHG emissions from purchased goods and services, fuel and energy-related activities and upstream transportation by 28% within the same timeframe. In 2023, our science-based near-term and net-zero GHG reduction targets were validated by the Science Based Targets initiative (SBTi).

Moving forward, we will continue to integrate actions to achieve our ambitions into our operations and will hold ourselves accountable to disclose our progress to our stakeholders. Goodyear intends to continue disclosing through our annual corporate responsibility report as well as our annual CDP submission.

BOARD AND MANAGEMENT OVERSIGHT

While our full Board oversees and guides our strategic direction, the Board’s Committee on Corporate Responsibility and Compliance oversees our corporate responsibility and climate strategy objectives and regularly monitors our progress towards achieving them.

Our senior leadership team acts as a steering committee for Goodyear’s sustainability strategy and performance. Each member of the senior leadership team has compensation metrics and targets that are linked to achieving certain sustainability-focused goals.

The Better Future Steering Committee, led by Goodyear’s Vice President and Chief Sustainability Officer, and currently comprised of 17 cross-functional, global leaders representing each region, as well as corporate functions in the areas of Procurement, Technology, Risk, Law, Manufacturing Operations, Communications, Government and Public Affairs, Human Resources, Strategy, Finance and Marketing, ensures functional goals are established for Goodyear’s high-priority sustainability topics.

 

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS  

LOGO

  

Corporate Responsibility  

 

 

BETTER FUTURE FRAMEWORK

Goodyear Better Future, our corporate responsibility framework, outlines Goodyear’s high-priority topics. These topics are woven into how we work together to drive innovation and operational excellence, create value, and build a better future.

The pillars of our framework are highlighted below.

 

LOGO

Our Corporate Responsibility Report is typically published in the second quarter of each year. For more information on Goodyear’s commitment to corporate responsibility, please visit www.goodyear.com/responsibility. Please note, however, that information contained on the website is not incorporated by reference in this Proxy Statement or considered to be a part of this document.

 

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CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS  

LOGO

  

Communications with the Board  

 

 

Communications with the Board

As described on Goodyear’s website at https://corporate.goodyear.com/us/en/investors/governance/contact-board.html, shareholders may communicate with the Board or any of the directors (including the Chairman or the non-management directors as a group) by sending correspondence to the Office of the Secretary, The Goodyear Tire & Rubber Company, 200 Innovation Way, Akron, Ohio 44316-0001. All appropriate communications will be compiled by the Secretary and submitted to the Board or the individual directors on a periodic basis.

Board Independence

The Board has determined that eleven of the thirteen director nominees, and thirteen of the fifteen current directors, are independent within the meaning of Goodyear’s independence standards, which are based on the criteria established by The Nasdaq Stock Market and are included as Annex I to Goodyear’s Corporate Governance Guidelines. Mr. Stewart, our Chief Executive Officer and President, is not considered independent. In addition, in light of his relationship with the USW, Mr. Wessel is not considered independent. Further, the Board expects that Mr. Wessel will recuse himself from discussions and deliberations regarding Goodyear’s relationship with the USW. The Board also determined that the nature and size of the ordinary course commercial relationships between Goodyear and Parker-Hannifin Corporation and between Goodyear and CSX Corporation did not impair the independence of Mr.Williams or Mr. Hinrichs, respectively. The relationships were de minimis, constituting less than one one-hundredth of one percent (0.01%) of either Goodyear’s or Parker-Hannifin’s consolidated gross revenues in the most recent fiscal year and constituting less than four one-hundredths of one percent (0.04%) of either Goodyear’s or CSX’s consolidated gross revenues in the most recent fiscal year.

Overboarding Policy

Our Corporate Governance Guidelines provide that directors may not simultaneously serve on the board of directors of (i) more than four public companies, including the Company, or (ii) in the case of public company executive officers, more than two public companies, including the Company.

The Governance Committee annually reviews each director’s service on and contributions to the Board, including consideration of each director’s public company leadership roles and other outside commitments, prior to recommending a director or nominee for election to the Board. All of our directors are currently in compliance with our overboarding policy.

 

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LOGO

  

 

 

PROPOSAL 1 – ELECTION OF DIRECTORS

The Board of Directors has selected the following thirteen nominees recommended by the Governance Committee for election to the Board of Directors. The directors will hold office from their election until the next Annual Meeting of Shareholders, or until their successors are elected and qualified. If any of these nominees for director becomes unavailable, the persons named in the proxy intend to vote for an alternate designated by the current Board of Directors.

Mr. Palmore was not nominated for re-election to the Board of Directors due to the retirement age provisions of Goodyear’s Corporate Governance Guidelines, and Mr. Williams is not standing for re-election to the Board. Mr. Palmore and Mr. Williams will be retiring from the Board at the Annual Meeting after nearly 12 years and five years, respectively, of distinguished service. Goodyear and the Board of Directors are deeply grateful to Mr. Palmore and Mr. Williams for their leadership and guidance during their tenures on the Board.

Norma B. Clayton

 

         
 

 

LOGO

 

Director Since:

November 28, 2022

 

 

Committees:

Audit

Corporate Responsibility

and Compliance

 

 

Age: 65

 

  

  

 

CURRENT PRINCIPAL OCCUPATION:

 

Retired. Formerly Vice President for Learning, Training and Development of The Boeing Company

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Ms. Clayton was Vice President for Learning, Training and Development of The Boeing Company, an aerospace manufacturer, from July 2007 until her retirement in March 2016. Ms. Clayton joined Boeing in February 1995 where she held a variety of leadership roles across engineering, plant operations and optimization, manufacturing excellence, quality and product safety, sourcing, supply chain and procurement, and human resources. Prior to joining Boeing, she spent several years leading plant operations and sourcing at Lockheed Martin, and prior to that, she held management roles in manufacturing and engineering at General Electric, after starting her career at General Motors.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2019:

Nucor Corporation (2021 – present)

 

Ms. Clayton is also currently the Chair of the Board of Trustees of Tuskegee University. Ms. Clayton’s global leadership experience in manufacturing, operations, technology, innovation and human resources will be valuable to Goodyear and its shareholders as it continues to build its business and enables mobility in a fast-evolving industry.

 

 

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LOGO

  

ELECTION OF DIRECTORS  

 

 

James A. Firestone

 

         
 

 

LOGO

 

Director Since:

December 3, 2007

 

 

Committees:

Compensation (Chairman)

Finance

Strategic and Operational

Review

Executive

 

 

Age: 69

 

 

  

 

CURRENT PRINCIPAL OCCUPATION:

 

Retired. Formerly Executive Vice President and President, Corporate Strategy and Asia Operations of Xerox Corporation

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Mr. Firestone was Executive Vice President and President, Corporate Strategy and Asia Operations of Xerox Corporation from January 2014 until his retirement on October 31, 2016. Mr. Firestone was President, Corporate Operations from October 2008 to December 2013 and President of Xerox North America from October 2004 to September 2008. Before joining Xerox in 1998, Mr. Firestone worked for IBM Corporation as general manager of the Consumer Division and for Ameritech Corporation as president of Consumer Services. He began his business career in 1978 with American Express, where during his 15-year tenure he ultimately rose to President, Travelers Cheques.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS HELD SINCE JANUARY 1, 2019:

None

 

 

Mr. Firestone has extensive executive management experience in positions of increasing responsibility, including most recently as a senior executive officer of Xerox Corporation, which is of similar size and global complexity as Goodyear. He also has over 20 years of profit and loss management responsibility, as well as significant international business experience and merger and acquisition experience. These experiences provide him with unique and valuable insights as a director of Goodyear, particularly with respect to operations and finance matters.

Werner Geissler

 

         
  LOGO

 

Director Since:

February 21, 2011

 

 

Committees:

Audit

Finance

 

 

Age: 70

 

 

 

  

  

 

CURRENT PRINCIPAL OCCUPATION:

 

Retired. Formerly Vice Chairman, Global Operations of The Procter & Gamble Company
Operating Partner of Advent International

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Mr. Geissler was Vice Chairman, Global Operations of The Procter & Gamble Company from August 2007 until his retirement on December 31, 2014, and was Group President, Central & Eastern Europe, Middle East and Africa from July 2004 to July 2007. He joined Procter & Gamble in 1979 and held positions of increasing responsibility in various brand and general management and operations roles in Europe, the Middle East, Central Asia, Japan, Africa and the United States.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

Philip Morris International Inc. (2015 – present)

 

Mr. Geissler, a native of Germany, has deep executive management experience, including as a senior executive officer of Procter & Gamble, where he oversaw Procter & Gamble’s extensive worldwide business operations. He has significant international business experience and profit and loss management responsibility. These experiences provide him with valuable insights as a director of Goodyear, particularly with respect to consumer marketing and international, operations and finance matters.

 

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LOGO

  

ELECTION OF DIRECTORS  

 

 

Joseph R. Hinrichs

 

         

 

  LOGO

 

Director Since:

July 25, 2023

 

 

Committees:

Compensation

Corporate Responsibility
and Compliance

 

 

Age: 57

 

 

  

 

CURRENT PRINCIPAL OCCUPATION:

 

President and Chief Executive Officer of CSX Corporation

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Prior to joining CSX, a leading supplier of rail-based freight transportation in North America, in September 2022, Mr. Hinrichs served as president of Ford Motor Company’s global automotive business, where he led its $160-billion automotive operations. As part of this role, he oversaw Ford’s global business units and the Ford and Lincoln brands, as well as leading all of Ford’s automotive skill teams, including Product Development, Purchasing, Manufacturing, Labor Affairs, Marketing and Sales, Government Affairs, Information Technology, and Sustainability, Safety and Environmental Engineering. During his tenure at Ford, Mr. Hinrichs also served as executive vice president and president of Global Operations, executive vice president and president of the Americas, president of Asia Pacific and Africa, chairman and chief executive officer of Ford China, and president and chief executive officer of Ford Motor Company, Canada Ltd.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

CSX Corporation (2022 – present)

Ascend Wellness Holdings (2021 – 2022)

 

Mr. Hinrichs brings more than 30 years of experience in the global automotive, manufacturing and energy sectors to the Company’s Board of Directors. He brings an unwavering commitment to operational excellence, extensive experience building global businesses through investment in people and culture and a deep understanding of balancing safety and efficiency.

Laurette T. Koellner

 

         

 

 

 

 

 

 

  LOGO


Director Since:

February 23, 2015

 

 

Chairman of the Board

 

 

Committees:

Compensation

Governance

Executive (Chairman)

 

 

Age: 69

 

 

 

 

  

 

CURRENT PRINCIPAL OCCUPATION:

 

Retired. Formerly President of Boeing International and Executive Chairman of International Lease Finance Corporation

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Ms. Koellner most recently served as Executive Chairman of International Lease Finance Corporation, formerly an aircraft leasing subsidiary of American International Group, Inc. (“AIG”), from June 2012 until its sale in May 2014. Prior to AIG, she served in a variety of executive roles at The Boeing Company, an aerospace company, including Executive Vice President, Member of the Office of the Chairman, President of Connexion By Boeing, President of Boeing International, and a seven-year membership on Boeing’s most senior leadership team. While at Boeing, she also served as Vice President and General Auditor, Vice President and Corporate Controller, and Chief Human Resources and Administration Officer.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

Celestica Inc. (2009 – present)

Nucor Corporation (2015 – present)

Papa John’s International, Inc. (2014 – present)

 

Ms. Koellner has significant senior executive management experience, including extensive international business experience, as well as financial and human resources experience. Her service in leadership positions on several public company boards of directors provides her with the necessary skills to be Chairman and also provides us with important insights on business practices in a variety of industries.

 

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LOGO

  

ELECTION OF DIRECTORS  

 

 

Karla R. Lewis

 

         

 

 

 

 

 

 

 

 

 

 

 

LOGO

 

Director Since:

April 12, 2021

 

 

Committees:

Finance (Chairman)

Governance

Executive

 

 

Age: 58

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT PRINCIPAL OCCUPATION :

 

President and Chief Executive Officer of Reliance, Inc.

 

 

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Ms. Lewis is currently Chief Executive Officer of Reliance, Inc., a leading global diversified metal solutions provider and the largest metals service center company in North America, a position she was elected to on January 1, 2023. She joined Reliance in 1992 as Corporate Controller and has held various positions of increasing responsibility since then including serving as Chief Financial Officer from 1999 until January 2021 and President from January 2021 until December 2022. While serving as Chief Financial Officer, she was promoted to Senior Vice President in 2000, Executive Vice President in 2002 and Senior Executive Vice President in 2015. For four years prior to joining Reliance, Ms. Lewis was employed by Ernst & Young LLP (Ernst & Whinney) as a certified public accountant.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

Reliance, Inc. (2021 – present)

 

 

 

Ms. Lewis has over 30 years of financial management experience from her service as Controller and Chief Financial Officer of Reliance. She also possesses extensive merger and acquisitions and integration experience, having worked on many such transactions during her career at Reliance. These experiences will be valuable to Goodyear and its shareholders in both the near-term and in the years to come.

Prashanth Mahendra-Rajah

 

         
 

 

LOGO

 

Director Since:

June 11, 2021

 

 

Committees:

Audit

Corporate Responsibility

and Compliance

 

 

Age: 54

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT PRINCIPAL OCCUPATION:

 

Chief Financial Officer of Uber Technologies, Inc.

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Mr. Mahendra-Rajah is currently Chief Financial Officer of Uber Technologies, Inc., a technology company that connects consumers with mobility solutions, a position he has held since November 2023. Previously, he was Executive Vice President, Finance and Chief Financial Officer of Analog Devices, Inc., a global technology company and semiconductor manufacturer, from May 2022 until November 2023 and was Senior Vice President, Finance and Chief Financial Officer from October 2017 to May 2022. From June 2014 to September 2017, he was Chief Financial Officer of WABCO Holdings Inc., a global automotive parts manufacturer and provider of electronic braking, stability and transmission systems for commercial vehicles. Previously, Mr. Mahendra-Rajah held finance positions of increasing responsibility at Applied Materials, Inc. (2012 to 2014), Visa Inc. (2010 to 2012) and United Technologies Corporation (1998 to 2010).

 

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

None

 

Mr. Mahendra-Rajah’s expertise in finance, analysis and strategic planning has made him a highly valued leader throughout his career. Among his accomplishments as a senior executive, he has helped position global companies for transformative growth following mergers and acquisitions. His extensive background in technology industries combined with a general-manager mindset will be extremely valuable to Goodyear and its shareholders as the Company focuses on future mobility. Mr. Mahendra-Rajah also has the necessary skills and experience to be an “audit committee financial expert.”

 

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LOGO

  

ELECTION OF DIRECTORS  

 

 

John E. McGlade

 

         
  LOGO

 

Director Since:

December 5, 2012

 

 

Committees:

Audit (Chairman)

Governance

Executive

 

 

Age: 70

 

 

 

 

 

 

CURRENT PRINCIPAL OCCUPATION:

 

Retired. Formerly Chairman, President and
Chief Executive Officer of Air Products and Chemicals, Inc.

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Mr. McGlade was Chairman, President and Chief Executive Officer of Air Products and Chemicals, Inc., a global provider of atmospheric, process and specialty gases, from March 2008 until his retirement on July 1, 2014. He joined Air Products in 1976 and held various positions of increasing responsibility, including as Group Vice President, Chemicals Group, and President and Chief Operating Officer.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

Bunge Limited (2014 – 2019)

 

 

Mr. McGlade has strong leadership skills and extensive management, international and operating experience. He has also had responsibility for the environment, health, safety and quality function during his career at Air Products. These experiences provide him with unique and valuable insights as a director of Goodyear, particularly with respect to operations matters. Mr. McGlade’s tenure as a Chief Executive Officer of a publicly traded company also provides him the necessary skills to be Chairman of our Audit Committee and to be an “audit committee financial expert.”

Max H. Mitchell

 

         

 

 

 

LOGO

 

Director Since:

July 25, 2023

 

 

Committees:

Finance

Strategic and Operational

Review

 

 

Age: 60

 

 

   

 

CURRENT PRINCIPAL OCCUPATION:

 

President and Chief Executive Officer of Crane Company

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

 

Mr. Mitchell is President and Chief Executive Officer of Crane Company, a global manufacturer of innovative and technology-led solutions for the aerospace, defense, space and process flow industries, a position he has held since 2014. He will be appointed to the additional role of Chairman in April 2024. Mr. Mitchell joined Crane in 2004, and has served as President and Chief Operating Officer, Executive Vice President and Chief Operating Officer, and President of Crane’s Process Flow Technologies Group. Before joining Crane, Mr. Mitchell served in various senior operating roles within the Danaher Corporation and Pentair. He began his career with the Ford Motor Company in finance and operations.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

Crane Company (2014 – present)

Crane NXT, Co. (2023 – April 2024)

Lennox International (2016 – 2022)

 

Mr. Mitchell’s expertise includes developing and driving corporate strategy and optimizing portfolio results, extensive knowledge of, and experience with, global markets, broad international and domestic mergers and acquisitions expertise, and driving a performance-based culture.

 

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LOGO

  

ELECTION OF DIRECTORS  

 

 

Hera Siu

 

         
 

 

LOGO

 

Director Since:

December 4, 2019

 

 

Committees:

Corporate Responsibility
and Compliance

Finance

 

 

Age: 64

 

    

 

CURRENT PRINCIPAL OCCUPATION:

 

Retired. Formerly Corporate Vice President and Chief Executive Officer, Greater China, of Cisco Systems, Inc.

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Ms. Siu was Chief Executive Officer, Greater China, for Cisco Systems, Inc., a leading global technology company, from July 2017 until her retirement in September 2020. She previously served as Chief Operating Officer, Greater China, of Cisco from November 2016 until June 2017.

 

From February 2014 to June 2016, she served as Senior Vice President and Managing Director, Greater China, for Pearson, LLC, a global education company that leverages technology to enhance teaching and learning. Ms. Siu was employed by SAP, a global software and data processing firm, as Senior Vice President, and then President, of

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

Vallourec SA (2021 – present)

TeamViewer AG (2021 – present)

ASMPT Limited (2022 – present)

 

China and Hong Kong from April 2010 to June 2013, and as Senior Vice President, e-Commerce, Asia Pacific Region, from July 2013 to January 2014. Ms. Siu also previously held positions of increasing responsibility and leadership for companies including Nortel, Inc., Hong Kong Telecom, Ltd., Computer Associates, Inc., and Nokia Telecommunications, Ltd.

 

Ms. Siu possesses more than 30 years of management experience, with a strong understanding of outcome-based solutions and emerging business models. Her extensive technology background and deep knowledge of the China marketplace will be extremely valuable to Goodyear and its shareholders as Goodyear continues to focus on the future of mobility.

Mark W. Stewart

 

         

 

 

 

 

 

LOGO

 

Director Since:

January 29, 2024

 

 

Committees:

Executive

 

 

Age: 56

 

 

 

 

 

 

 

CURRENT PRINCIPAL OCCUPATION:

 

Chief Executive Officer and President of The Goodyear Tire & Rubber Company

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Mr. Stewart joined Goodyear in January 2024. Previously, from December 2018 to January 2024, he served as Chief Operating Officer of North America and a member of the Group Executive Council of Stellantis N.V., a leading global automaker and provider of innovative mobility solutions.

 

Previously, Mr. Stewart served as vice president, Customer Fulfillment, at Amazon, serving as the lead executive for customer fulfillment across 200 operations facilities in North America, leading operations, procurement, construction and engineering, and teams dedicated to pursuing automation, artificial intelligence, advanced robotics and conveyance.

 

Prior to Amazon, Mr. Stewart was executive vice president and chief operating officer for ZF TRW Automotive, a role culminating from over two decades of increasing responsibility, starting with plant, production and quality management roles and advancing to lead Tower

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

None

 

 

Automotive’s Western Europe business as executive vice president, TRW’s North America Passenger Car and Commercial Global Steering business as vice president and general manager and TRW’s Asia Pacific business as vice president. Over the course of his career, Mr. Stewart has overseen diverse manufacturing and fulfillment operations across the globe, and has been based in the U.S., Belgium, Germany and China.

 

Mr. Stewart’s extensive automotive industry experience and knowledge of global markets, manufacturing, operations, fulfillment and technology provides our Board with valuable perspectives that are necessary to advance Goodyear’s business and the interests of our shareholders. As Chief Executive Officer, he will also provide the Board with management’s perspective on important issues that we are facing.

 

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LOGO

  

ELECTION OF DIRECTORS  

 

 

Michael R. Wessel

 

         

 

 

 

  LOGO

 

Director Since:

December 6, 2005

 

 

Committees:

Corporate Responsibility

and Compliance

 

 

Age: 64

 

 

 

 

 

 

 

CURRENT PRINCIPAL OCCUPATION:

 

President of The Wessel Group Incorporated

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Mr. Wessel has served as President of The Wessel Group Incorporated, a government and political affairs consulting firm, since May 2006. Prior to founding The Wessel Group, he served as Senior Vice President of the Downey McGrath Group, a government affairs consulting firm, from March 1999 to December 2005 and as Executive Vice President from January 2006 to April 2006.

 

Mr. Wessel is an attorney with over 30 years of experience as an economic and international trade policy advisor in Washington, D.C. Mr. Wessel has acted as an advisor to Congressman Richard Gephardt, both in the U.S. House of Representatives and to his presidential campaigns in 1987-88 and 2003-04, to the Clinton/Gore Transition

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

None

 

Office in 1992 and 1993, and to Senator John Kerry’s presidential campaign in 2004. Mr. Wessel also serves as a Commissioner on the U.S.-China Economic and Security Review Commission, a position he has held since April 2001.

 

Mr. Wessel’s extensive experience with public policy matters and his government service, including as an advisor to former Majority Leader Gephardt and as an appointee on government commissions, provides us with valuable perspectives on public policy matters impacting trade, international economic affairs and other matters of importance to Goodyear.

Roger J. Wood

 

         

 

 

 

  LOGO

 

Director Since:

July 25, 2023

 

 

Committees:

Audit

Strategic and Operational
Review

 

 

Age: 61

 

  

 

 

 

 

 

CURRENT PRINCIPAL OCCUPATION:

 

Retired. Former Co-Chief Executive Officer of Tenneco, Inc.

 

DESCRIPTION OF BUSINESS EXPERIENCE:

 

Mr. Wood served as co-chief executive officer of Tenneco, Inc., one of the world’s leading designers, manufacturers and marketers of automotive products for original equipment and aftermarket customers, from 2018 to 2020. Mr. Wood previously served as chairman and chief executive officer of Fallbrook Technologies, a developer of transmission technologies, having joined in January 2018. He also served as president and chief executive officer of Dana Holding Corporation, a leading global supplier of highly engineered driveline, sealing and thermal management technologies for the automotive industry. He joined Dana after a 26-year career with BorgWarner Incorporated, a global product leader in delivering innovative and sustainable mobility solutions, serving most recently as executive vice president and group president for the Engine group.

  

 

OTHER PUBLIC COMPANY DIRECTORSHIPS

HELD SINCE JANUARY 1, 2019:

 

Brunswick Corp, (2012 – present)

PHINIA Inc. (2023 – present)

Tenneco, Inc. (2016 – 2020)

 

Mr. Wood brings more than three decades of industry leadership and expertise in global operations to Goodyear’s Board. His experience as a CEO of several public manufacturing companies provides unique insight and significant knowledge to the Board in the areas of manufacturing operations, business management, global operations and strategic planning, and also provides him the necessary skills to be an “audit committee financial expert.”

 

 

 

LOGO Your Board of Directors unanimously recommends that shareholders vote FOR each of the nominees for director named in this Proxy Statement (Proposal 1).

 

 

 

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LOGO

  

 

 

PROPOSAL 2 – ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

We are seeking your vote to approve, on an advisory (or non-binding) basis, the compensation of our named executive officers as disclosed in this Proxy Statement.

Our Compensation Discussion and Analysis (“CD&A”), which starts on page 25, describes our executive compensation program. We encourage you to read the CD&A before casting your vote.

The advisory resolution below, commonly known as a “say-on-pay” proposal, gives you the opportunity to express your views on our executive compensation program for our named executive officers. The “say-on-pay” proposal is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the executive compensation policies, practices and plans described in this Proxy Statement.

The resolution is required by Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The resolution is not intended to indicate your approval of the matters disclosed under the heading “Risks Related to Compensation Policies and Practices” or future “golden parachute” payments. We will seek shareholder approval of any “golden parachute” payments at the time of any transaction triggering those payments to the extent required by applicable law.

We ask you to vote “FOR” the following resolution which will be presented by the Board of Directors at the Annual Meeting:

“RESOLVED, that the shareholders of The Goodyear Tire & Rubber Company approve, on an advisory basis, the compensation of the named executive officers as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders.”

Although this proposal is an advisory vote that will not be binding on the Compensation Committee or the Board of Directors, the Compensation Committee will consider the results of this shareholder advisory vote and the changes, if any, to our executive compensation policies, practices and plans that may be warranted as a result of this vote. The Board of Directors has determined, consistent with the shareholders’ vote on the matter in 2023, to hold an advisory vote regarding the compensation of our named executive officers every year until the next vote on the frequency of such advisory votes, which is currently expected to occur at the 2029 Annual Meeting of Shareholders.

 

 

 

LOGO Your Board of Directors unanimously recommends that shareholders vote FOR the advisory resolution to approve the compensation of our named executive officers (Proposal 2).

 

 

 

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS TABLE OF CONTENTS

Table of Contents

 

 

 

USE OF FORWARD-LOOKING STATEMENTS

For additional information regarding our use of forward-looking statements in this Proxy Statement, see Exhibit A.

 

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COMPENSATION

DISCUSSION AND ANALYSIS

Executive Summary

This Compensation Discussion and Analysis describes the Company’s executive compensation philosophy and programs, focusing in particular on the Compensation Committee’s decisions about named executive officers (“NEOs”) in 2023. The Board elected Mark W. Stewart as Chief Executive Officer and President of the Company, effective January 29, 2024. Please see “2024 Chief Executive Officer and President Compensation” on page 49 for information on his compensation arrangements.

OUR NEOS FOR 2023 ARE:

 

   

Richard J. Kramer

 

Chairman, Chief Executive Officer and President (through January 29, 2024)

Christina L. Zamarro

 

Executive Vice President and Chief Financial Officer

Darren R. Wells

 

Executive Vice President and Chief Administrative Officer

Stephen R. McClellan

 

President, Americas

Christopher R. Delaney

 

President, Europe, Middle East and Africa

2023 OPERATING RESULTS

Operating results in 2023 included significant sequential margin expansion on improving costs, despite a persistently weak volume environment across both consumer and commercial replacement markets.

The replacement tire industry was down 1% in 2023, with the weakest segments being U.S. and European commercial replacement given lower freight demand and consumer replacement in EMEA generally. A normalization of low-cost imports into the U.S. and incremental pressure from imports into Europe resulted in Goodyear’s volume being lower than the industry but more in line with traditional manufacturers. To address the soft demand and prevent the buildup of excess inventory, we reduced production at many of our tire manufacturing facilities during the year, resulting in lower utilization compared to 2022.

Despite these developments, Goodyear maintained its leading position in the U.S. replacement market and remains a leader in other key markets throughout the globe. Goodyear also continued to perform well at OE despite second-half challenges tied to the impact of the UAW strike in the U.S. Our win rate on new EV fitments also remained strong.

While the first half of the year was impacted by higher raw material and other costs, improving trends during the year enabled significant margin expansion compared to the start of the year. These trends culminated in double-digit segment operating margins in two of our regions by the fourth quarter, including Americas where segment operating income margin was the highest quarterly result since 2021. Improved earnings and reduced working capital to exit 2023 contributed to the strongest quarterly operating cash flow since before the pandemic.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

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Executive Summary  

 

 

Although second half results improved compared to those in the first half, ongoing cost pressures on our already higher cost operations have underscored the need for a fresh look at improving our cost competitiveness.

During the year, the company initiated a board-led strategic and operational review that culminated in the creation of a two-year transformation plan called Goodyear Forward. Building on our strengths as an industry leader, the plan is focused on optimizing our portfolio, delivering significant margin expansion and reducing leverage to drive sustainable and substantial shareholder value creation. During 2023, we began laying the foundation to drive the execution of that plan, which is expected to begin delivering value throughout 2024.

SHAREHOLDER ENGAGEMENT AND RESPONSIVENESS

At the 2023 annual meeting, our say-on-pay vote was approved by 88% of our shareholders, reflecting the significant improvements that were made to our executive compensation program in response to investor feedback following our failed 2022 say-on-pay vote. Through our ongoing engagement efforts, we continue to elicit and consider shareholders’ perspectives related to our executive compensation program, design elements and specific actions to inform the Compensation Committee’s decision-making process.

As part of our annual outreach (based on our outstanding Common Stock as of September 30, 2023):

 

 

 

LOGO   We requested the opportunity to meet with shareholders representing 80% of outstanding shares held by institutional investors.   LOGO   We engaged with shareholders representing 65% of outstanding shares held by institutional investors. Our Lead Director and the Chairman of our Compensation Committee participated in many of the meetings.

In evaluating potential changes to our executive compensation program, the Compensation Committee carefully reviewed the shareholder feedback received from our engagement efforts. During these engagements, we continued to receive positive feedback on our overall plan design in the 2023 annual and long-term incentive plans.

The following list describes the incremental changes that the Compensation Committee made to our executive compensation plans in 2023 following consideration of feedback from our shareholders:

 

   

Increased the performance requirement for target payout (from 50th percentile to 55th percentile) under the TSR modifier for the 2023-2025 long-term incentive awards

   

Capped the TSR modifier at 1.0x in the event absolute TSR is negative

   

Further reduced the weighting of individual strategic objectives from 20% to 10% and increased the weighting of free cash flow and EBIT by 5% each (to 20% each) in our annual incentive plan

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Executive Summary  

 

 

 

COMPENSATION PROGRAM OBJECTIVES AND METRICS

The following table shows our compensation program’s strategic objectives and related metrics:

 

Strategic Objective    Metric
Competitive Advantage    Market Share and Variable Manufacturing Cost
Profitability    EBIT, Net Income and Strategic Initiatives Index (Structural Cost Improvement)
Strong Liquidity    Free Cash Flow
Return Generated on Investments in Business    Cash Flow Return on Capital
Superior Shareholder Returns    Relative TSR Modifier
New Mobility    New Mobility Goals
Corporate Responsibility and Sustainability    ESG Goals and Strategic Initiatives Index (Reduction in Greenhouse Gases)
Specific Drivers of Success of Business   

Individual Strategic Objectives

2023 PAYOUTS

Our 2023 payouts reflect solid execution on improving costs and maintaining our market share position in a weak replacement market, and tight pay-for-performance alignment. For 2023, the payout for overall company performance on our annual incentive plan was 123%, driven by strong performance in our Cost and OE Share metrics. For the completed 2021-2023 performance cycle, the payout for performance on our long-term awards was 99%, including the impact of the TSR modifier of 1.08x and the ESG index which increased payouts by 15 percentage points.

Earnings for the 2023 performance period under each of our 2021-2023, 2022-2024 and 2023-2025 long-term awards were approved at 49%, driven by below threshold achievement on our net income metric and near target performance on our cash flow return on capital metric. Actual payouts for the outstanding long-term awards remain subject to continued employment, the TSR modifier and an ESG or Strategic Initiatives (SI) Index, as applicable.

Our 2023 payouts reflect the continued rigor of our compensation program goals.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Compensation Philosophy and Strategy  

 

 

Compensation Philosophy and Strategy

The following core principles form the foundation of the compensation program for our executives, including the named executive officers:

 

   

FIRST, compensation programs should motivate our executives to take actions that are aligned with our short- and long-term strategic objectives, and appropriately balance risk versus potential reward.

 

   

SECOND, as executives move to a greater level of responsibility, the percentage of their pay based on performance should increase to ensure the highest level of accountability to shareholders.

 

THIRD, performance pay should offer an opportunity for above average compensation when our performance exceeds our goals balanced by the risk of below average compensation when it does not.    

FOURTH, the percentage of total compensation paid in the form of equity should also increase as executives have increasing responsibility for corporate performance, thereby more closely aligning their interests with those of our shareholders.

 

PAY FOR PERFORMANCE

We believe that our compensation program is consistent with our performance-based compensation philosophy and serves the long-term interests of our shareholders. The payouts under our incentive compensation plans are strongly aligned with our performance under our operating plan — demonstrating our commitment to an executive compensation program that pays for performance.

Consistent with our philosophy, as illustrated below, 90% of total target compensation for our CEO is at-risk and almost 70% is performance-based.

 

 

LOGO

In the above chart, total target compensation reflects base salary, target annual incentive opportunity and the grant date target value of long-term incentives.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Compensation Philosophy and Strategy  

 

 

For 2023, the payout for overall company performance on our annual incentive plan was 123%, driven by strong performance in our Cost metrics and in our Share metrics related to commercial replacement and OE.

As a result of challenging global economic conditions, performance under our 2021-2023, 2022-2024 and 2023-2025 long-term awards of 49% was approved for the 2023 performance periods, subject to continued service, a relative total shareholder return modifier (which we refer to as the “TSR modifier” and which is described in more detail on pages 43 and 44) and, for the 2021-2023 and 2022-2024 performance cycles, an ESG Index of up to 25% and for the 2023-2025 performance cycle a Strategic Initiatives Index of up to 25%. For the year ended December 31, 2023, our stock was at the sixtieth percentile of companies in the S&P 500 during the three-year period ended December 31, 2023, resulting in a TSR modifier of 1.08 times, which increased the payout for the 2021-2023 performance cycle by 8%. Additionally, for the 2021-2023 performance cycle, we achieved two of three ESG Index goals resulting in an increase of 15 percentage points to performance.

Process for Determining Executive Compensation

The Compensation Committee undertakes ongoing review of our executive compensation policies, practices and plans to determine whether they are consistent with our compensation philosophy and objectives, and whether they need to be modified in light of changes in our business or the markets in general. The Compensation Committee also meets periodically with the CEO to review compensation policies and specific levels of compensation paid to officers and other key personnel, and reports and makes recommendations to the Board regarding executive compensation policies and plans. In addition, the CEO annually makes recommendations to the Compensation Committee regarding salary adjustments and the setting of annual and long-term incentive targets and awards for officers other than himself, including the other named executive officers. The Compensation Committee also obtains feedback, advice and recommendations on our compensation program from its independent compensation consultant and reviews Company performance, compensation practices of its peers, compensation surveys and other materials regarding executive compensation.

In determining the compensation of a named executive officer, the Compensation Committee considers various factors, including:

 

 

Company performance against corporate and operating unit objectives,

 

 

The Company’s relative shareholder return,

 

 

The compensation of officers with similar responsibilities at comparable companies,

 

 

Individual performance,

 

 

Current and future responsibilities, including succession considerations,

 

 

Retention considerations,

 

 

The awards given to the named executive officer in past years, and

 

 

The relationship between the compensation to be received by the officer and the compensation to be received by the other named executive officers (which we refer to as “internal pay equity”), including comparing the relationship to that found at comparable companies. In reviewing the CEO’s compensation relative to our other named executive officers, the Compensation Committee takes into account the fact that we do not currently have a president or chief operating officer between the CEO and our business unit presidents or corporate senior vice presidents as do many companies.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Process for Determining Executive Compensation  

 

 

EXECUTIVE COMPENSATION GOVERNANCE AND BEST PRACTICES

The Compensation Committee has adopted a number of best practices that are consistent with our performance-based compensation philosophy and serve the long-term interests of our shareholders:

 

LOGO

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Process for Determining Executive Compensation  

 

 

INDEPENDENT COMPENSATION CONSULTANT

The Compensation Committee has the authority to retain outside advisors, including compensation consultants, to assist it in evaluating actual and proposed compensation for our officers. In August 2021, the Compensation Committee selected Exequity as its independent compensation consultant, and Exequity continued as the Compensation Committee’s independent outside advisor through 2023.

As part of their engagement, the compensation consultant reviewed our executive compensation peer group and conducted a competitive analysis of compensation for the named executive officers as well as an analysis of the share usage, dilution and overhang of our equity compensation plan. The compensation consultant also assisted the Compensation Committee with a variety of other issues, including setting CEO compensation, the design and establishment of performance metrics and goals under our variable incentive plans, reviewing our compensation risk analysis and reviewing this Compensation Discussion and Analysis.

In addition, the compensation consultant reviewed and provided recommendations regarding our non-management director compensation program and made presentations to the Compensation Committee on trends and regulatory developments in executive compensation. When requested by the Compensation Committee, an Exequity representative attends Compensation Committee meetings and participates in private sessions with the Compensation Committee, and Committee members are free to consult directly with Exequity as desired. The compensation consultant works with Goodyear management only under the direction of the Compensation Committee and does not provide any advice or consulting services to the Company beyond matters involving executive and director compensation.

COMPENSATION PEER GROUP

The Compensation Committee annually reviews the pay levels and practices of peer companies in order to assess the competitive positioning of Goodyear’s pay levels and plan designs. For these purposes, the Compensation Committee utilizes the following peer group:

 

FOR 2023 COMPENSATION DECISIONS, THE PEER GROUP CONSISTED OF:

 

 

Adient plc

 

   

   

Emerson Electric Co.

 

   

   

PPG Industries, Inc.

   

Aptiv PLC

     

Fluor Corporation

     

Stanley Black & Decker, Inc.

   

BorgWarner Inc.

     

Kimberly-Clark Corporation

     

Tenneco Inc.1

   

Cummins Inc.

     

Lear Corporation

     

Textron Inc.

   

Dana Inc.

     

PACCAR Inc.

     

Trane Technologies plc

   

Eaton Corporation plc

     

Parker-Hannifin Corporation

     

Whirlpool Corporation

1 – No longer publicly traded as of November 2022

Our peer group consists of 18 companies selected according to their similarity to our size and complexity, operations, products, revenues, markets, availability of executive pay information, and any other information the Compensation Committee deems appropriate. Such companies are likely to have executive positions comparable in breadth, complexity and scope of responsibility to ours.

The peer group does not include other companies in the tire industry because no other U.S.-based tire company is similar in size and complexity to us, and non-U.S.-based tire companies do not publish comparable compensation information.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Process for Determining Executive Compensation  

 

 

We consider median market levels of compensation when setting total target compensation levels for our officers. The actual positioning of target compensation relative to the median varies based on each executive’s experience and skill set, and generally results in executives who are new in their role being placed lower in the range and those with more experience being placed higher in the range. We emphasize variable compensation because it minimizes fixed expense associated with salary and enables total compensation to fluctuate directly with performance against operating goals, strategic and operational performance objectives and changes in share price. This approach aligns overall costs with performance and provides executives with a leveraged and attractive compensation opportunity that varies based on results.

The Compensation Committee, together with our compensation consultant, annually reviews the peer group. For 2023 compensation decisions, the Compensation Committee removed Navistar International Corporation from the peer group because Navistar was acquired in July 2021. The Compensation Committee did not make any additional changes to its peer group for 2023 compensation decisions.

Data with respect to comparable elements of total target compensation is compiled for the peer group of companies described above from available sources, including, in most cases, the most recently available annual proxy statements and other SEC filings that address executive compensation matters.

TARGET SETTING

The Compensation Committee considers the following factors when establishing performance metrics and targets, including the related threshold and maximum target levels:

 

 

Corporate strategy

 

 

Macroeconomic and tire industry environment

 

 

Annual and long-term operating plans

 

 

Performance history

 

 

Input from its compensation consultant and management

 

 

Difficulty of the targets in light of the above factors

The Compensation Committee set the performance metrics, and related weightings and targets, for our 2023 executive compensation program in February 2023. The Compensation Committee believes that the performance metrics it established will focus management’s attention on the key drivers of our business and that the performance targets it established are rigorous, while providing meaningful motivational value to our executives. The achievement of these performance targets would ensure that we continue to meet the significant challenges we face, are a stronger competitor and are positioned for ongoing recovery from volatile economic conditions as well as long-term growth. Generally, the Compensation Committee prefers to set targets that exceed prior years’ results. However, it also understands that this method is not always practical, especially in our highly cyclical industry that can be impacted by external forces beyond the control of management.

For a discussion of our annual incentive plan metrics, targets and performance, see “Annual Compensation — Annual Incentive Plan – Annual Incentive Plan Metrics and Targets,” and for a discussion of our long-term incentive plan metrics, targets and performance, see “Long-Term Compensation — 2023 Grants of Performance-Based Incentives — Long-Term Compensation Metrics and Targets.”

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

2023 Executive Compensation Elements  

 

 

2023 Executive Compensation Elements

We provide executive compensation and benefits that are market-competitive in which a large portion of the total opportunity is variable and tied to our performance and changes in shareholder value over a multi-year period. The key components of compensation provided to our executive officers and how each supports our compensation objectives are presented in the following table:

 

LOGO

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

2023 Executive Compensation Elements  

 

 

The mix of long-term compensation between cash-based long-term incentives, performance shares and restricted stock units is based, in part, on the market value of our Common Stock, the number of shares available for grant under our shareholder-approved equity compensation plan, and considerations relating to managing the dilutive effect of share-based awards.

Annual Compensation

BASE SALARY

 

The Compensation Committee determined that base salary increases were
merited for each of Mr. Kramer, Mr. Wells, Mr. McClellan and Mr. Delaney.
Ms. Zamarro’s base salary was revised in connection with her promotion to
Chief Financial Officer, effective January 1, 2023. The Compensation
Committee reviews salaries of our executives annually against competitive
market data. The Compensation Committee increased these base salaries to
better align their pay with compensation paid to executives with similar
responsibility and experience.

 

Consistent with the requirements of our master labor agreement with the USW,
the base salaries of our CEO and the other executive officers are at or below the
market-average, in aggregate.

      Name   

2022

Base

Salaries

    

2023

Base
Salaries1

   

Kramer

  

 

$1,400,000

 

  

$1,450,000

   

Zamarro

  

 

450,000

 

  

725,000

   

Wells

  

 

835,000

 

  

850,000

   

McClellan

  

 

780,000

 

  

805,000

   

Delaney

  

 

765,000

 

  

790,000

   

 

1   Ms. Zamarro’s base salary was effective January 1, 2023. The other base salaries were effective May 1, 2023.

ANNUAL INCENTIVE PLAN

ANNUAL INCENTIVE PLAN METRICS AND TARGETS

All of our named executive officers are eligible to earn cash incentives under our annual incentive plan. The performance metrics in the annual incentive plan further emphasized the importance of our earnings (as measured by EBIT) and our generation of free cash flow, both on a full-year basis, by increasing their individual weightings from 15% to 20%. The performance metrics also continued to measure our market share, both in consumer and commercial replacement and with OE manufacturers, and our variable manufacturing costs. In addition, the Compensation Committee reduced the weighting of individual strategic objectives from 20% to 10% and continued the use of goals for ESG and New Mobility initiatives, weighted at 10% each.

Payouts for corporate officers are based on overall company results and individual performance goals. Payouts for operating unit officers are based 50% on their operating unit’s performance and 50% on overall company results for Share, Cost, Cash and EBIT and on overall company results for ESG and New Mobility, as well as their individual performance goals. We believe these weightings hold our operating unit executives most accountable for financial results in the areas where they have the most control and influence, but also motivate them to work cooperatively with other operating units to maximize results for the entire Company. Actual payouts can range from 0% to 200% of target.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Annual Compensation  

 

 

LOGO

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Annual Compensation  

 

 

The following table shows our 2023 annual compensation targets compared to our 2022 actual results (dollars in millions, except for variable manufacturing costs and win in OE):

 

 Metric    2023 Target     2022 Actual1  
   

 EBIT

  

$

1,150

 

 

$

1,111

 

   

 Free Cash Flow

  

$

425

 

 

$

(385

   

 Market Share:

    
   

 Consumer Replacement

  

 

15.2

 

 

15.4

   

 Commercial Replacement

  

 

8.5

 

 

10.2

   

 Win in OE

  

$

8.21

 

 

$

8.02

 

   

 Variable Manufacturing Cost Per Tire:

    
   

 Consumer

  

$

20.04

 

 

$

17.54

 

   

 Commercial

  

$

93.27

 

 

$

76.52

 

 

1

Excluding impact of foreign currency, if applicable.

Our EBIT targets for 2023 reflected improvements in profitability of approximately $40 million, or 3.5%, versus 2022. The plan required economic recovery in EMEA and that we offset continued inflation, including nearly $200 million of higher raw material costs and $600 million of other inflationary cost pressures in wages, benefits, transportation and energy, primarily through improvements in price and mix. Our free cash flow target for 2023 reflected improved earnings, stabilized working capital levels that would maintain inventory to support customer service, and capital expenditures of approximately $1 billion.

Our replacement Share targets for 2023 required us to hold our market share in consumer and commercial replacement compared to 2022 levels for all key markets in a relatively flat industry. Our 2023 Win in OE metric changed from an increase in the overall win rate for OE bids to target increases in profitability of consumer OE, focusing on short-term profitability and long-term strategic fitments, and required a 2% improvement in our total company margin per tire from 2022. Our 2023 targets were established using the expected volume of new OE fitment opportunities, which fluctuates based on the number of new vehicle model introductions in any given year.

Our Cost targets for 2023 were higher than the prior year results and required continuing focus on managing variable manufacturing cost per tire to partially offset significant inflation in energy and labor rates, training costs related to tight skilled labor availability, and product migration to higher rim-sizes that increases weight and cost per tire.

ANNUAL INCENTIVE PLAN PAYOUTS

In February 2024, the Compensation Committee reviewed actual results for 2023 with respect to achievement of the company-wide and operating unit performance objectives. The table below shows the performance objectives, actual results for 2023 and corresponding payout percentage under our annual incentive plan for the Share, Cost, Cash and EBIT metrics.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Annual Compensation  

 

 

    

Payout Under Annual Incentive Plan

 
     

50%

    100%     200%     Actual Results     Payout Percentage  

 Overall Company Performance (2023):

  

 

    

 

 

 

    

 

 

 

    

 

 

 Market Share:

        

 Consumer Replacement

  

 

14.8

 

 

15.2

 

 

15.5

 

 

14.2

 

 

0%

 

 Commercial Replacement

  

 

8.0

 

 

8.5

 

 

8.8

 

 

8.9

 

 

200%

 

 Win in OE

  

 

$   7.74

 

 

 

$    8.21

 

 

 

$    8.68

 

 

 

$  9.97

 

 

 

200%

 

 Cost:

        

 Consumer

  

 

See below

 

 

 

183.0

 

 

183%

 

 Commercial

  

 

See below

 

 

 

179.0

 

 

179%

 

 Free Cash Flow

  

 

$    175

 

 

 

$     425

 

 

 

$     605

 

 

 

$   406

 

 

 

98%

 

 EBIT

  

 

$    825

 

 

 

$   1,150

 

 

 

$   1,390

 

 

 

$   965

 

 

 

82%

 

The table below shows the payout percentages under our annual incentive plan for each of our operating units.

 

    

Payout Percentage

 

 
     

Share

 

    

Cost

 

    

Cash

 

    

 

EBIT

 

 

Americas

  

 

133%

 

  

 

133%

 

  

 

198%

 

  

 

63%

 

EMEA

  

 

150%

 

  

 

183%

 

  

 

0%

 

  

 

0%

 

       

Asia Pacific

  

 

133%

 

  

 

200%

 

  

 

200%

 

  

 

184%

 

Our Cost metric is variable manufacturing cost per tire that is based on actual levels of production in our factories. This metric incentivizes our team to manage controllable costs in a variety of operating scenarios. The target for cost is expressed as a range for two reasons. First, our actual production volumes are not known at the outset of the plan period. Second, as output changes in our factories, the variableness of costs also changes. For our operating units, annual attainment is calculated by averaging monthly attainment percentages. Corporate attainment is calculated using the weighted average attainments for each operating unit.

 

    

Variable Manufacturing Cost Per Tire Targets

 

        
      50%      100%      200%      Attainment  

Consumer:

  

 

     

 

  

 

     

 

  

 

     

 

  

Americas

  

 

$ 21.16-26.04

 

  

 

$ 20.89-25.51

 

  

 

$ 20.62-24.99

 

  

 

170

EMEA

  

 

19.73-24.36

 

  

 

19.48-23.86

 

  

 

19.22-23.36

 

  

 

183

Asia Pacific

  

 

7.59-9.18

 

  

 

7.51-9.01

 

  

 

7.42-8.84

 

  

 

200

Commercial:

             

Americas

  

 

$88.56-109.07

 

  

 

$87.40-106.83

 

  

 

$86.24-104.59

 

  

 

95

     

EMEA

  

 

78.51-98.90

 

  

 

77.36-96.68

 

  

 

76.21-94.45

 

  

 

183

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Annual Compensation  

 

 

“Free cash flow,” as defined in our incentive plans, means the Company’s cash flows from operating activities, less capital expenditures and also excludes rationalization payments and pension contributions and direct payments. Our 2023 “free cash flow” also reflected the impact of certain other items noted in the table below. Our 2023 “free cash flow” for purposes of our incentive plans was calculated as follows:

 

 ($ in millions)

 

  

2023

 

 

 Cash flows from operating activities (as reported)

  

$

1,032

 

 Capital expenditures

  

 

(1,050

 Proceeds from asset sales and other dispositions

  

 

103

 

 Rationalization payments

  

 

99

 

 Tupelo storm and Debica fire

  

 

73

 

 Pension contributions and direct payments

  

 

54

 

 UAW OE strike

  

 

53

 

 Foreign exchange

  

 

46

 

 Other

  

 

(4

 

 Free cash flow, as adjusted

   $ 406  

“EBIT,” as defined in our incentive plans, means the Company’s earnings before interest and income tax expense and also excludes charges for rationalizations, asset write-offs and accelerated depreciation, goodwill impairment charges, other (income) expense, royalty income, minority shareholders’ net income, and the cumulative effect of accounting changes. Our 2023 “EBIT” also reflected the impact of certain other items noted in the table below. Our 2023 “EBIT” for purposes of our incentive plans was calculated as follows:

 

 ($ in millions)

 

  

2023

 

 

 Goodyear net income (loss) (as reported)

  

$

(689

 Rationalizations, asset write-offs and accelerated depreciation

  

 

538

 

 Interest expense

  

 

532

 

 Goodwill impairment

  

 

230

 

 Other (income) expense

  

 

108

 

 Tupelo storm and Debica fire

  

 

97

 

 Foreign exchange

  

 

49

 

 Goodyear Forward costs

  

 

35

 

 Royalty income

  

 

30

 

 UAW OE strike

  

 

20

 

 U.S. & foreign tax expense

  

 

10

 

 Minority shareholders’ net income

  

 

2

 

 Other

  

 

3

 

 

 EBIT, as adjusted

   $ 965  

 

   38 


Table of Contents
  

 

COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Annual Compensation  

 

 

In response to feedback from shareholders in 2022, we reduced the weighting of the individual strategic objectives from 20% to 10%. ESG and New Mobility were retained in the program as separately weighted metrics in 2023, each weighted 10%.

 

 Metric   Goals    Achievement    % Payout

 

ESG

 

 

Environmental goal to manufacture and go to market with a tire made of 70% sustainable materials in 2023

 

Diversity and inclusion goals include expanding our diversity hiring practices enterprise-wide by expanding diverse slate requirements to executive feeder pool groups while sustaining the existing strategy for executive level roles

 

  

 

Achieved

 

 

Achieved

  

 

100%

 

 

100%

 

New Mobility

 

 

Execute on pilot programs for new mobility initiatives

 

  

 

Achieved

 

  

 

100%

 

Individual strategic objectives are established annually and include measurable goals tied to strategic initiatives as well as financial and non-financial metrics. The establishment of strategic and operational performance goals drives more rigor in our goal setting, while also building accountability for non-financial objectives. In 2023, these objectives included operational excellence, capital expenditures, senior leadership succession, value creation and long-term strategy.

The Compensation Committee evaluated the CEO’s performance against his individual strategic objectives, and the CEO evaluated each other named executive officer’s performance against their respective individual strategic objectives and made a recommendation to the Compensation Committee for its consideration. Based on its evaluation of the CEO, and its consideration of the CEO’s recommendation for the other NEOs, the Compensation Committee determined that each of the NEOs would receive a payout at 100% of target for their performance against their individual strategic objectives. Their individual accomplishments are summarized below:

 

 Name

 

 

 Key Accomplishments

 

 Kramer

 

  Met key milestones on major capital expenditure projects

 

  Supported the Goodyear Forward transformation plan development

 Zamarro

 

  Achieved key milestones for sustainability reporting and enhanced the reporting process

 

  Led process resulting in the development of the Goodyear Forward transformation plan

 Wells

 

  Met key milestones on strategic projects

 

  Developed digital strategy to align with strategic growth initiatives

 McClellan

 

  Met key milestones on major capital expenditure projects

 

  Completed Cooper Tire business integration

 

  Achieved initiatives on footprint and plant optimization

 Delaney

 

  Achieved value creation initiatives, including new mobility and footprint optimization targets

 

  Exceeded fleet solutions expansion targets

 

 

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Table of Contents
  

 

COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Annual Compensation  

 

 

The Compensation Committee established an aggregate incentive pool for all officers and determined the calculated payout for each officer. Then, the CEO assessed the officer’s contributions towards Company goals and made his recommendations with respect to individual payout amounts to the Compensation Committee, which considered the CEO’s recommendations and determined the final payouts. The Compensation Committee undertook the same process for the CEO and made the determination as to the final payout amount for the CEO.

The Compensation Committee approved the following awards for our named executive officers under our annual incentive plan:

 

 Name   

 Target Award
($)

 

    

 Actual Award
($)

 

    

Actual Award
as a %
of Target Award

 

 

 Kramer

  

$

2,320,000

 

  

$

2,853,600

 

  

 

123%

 

 Zamarro

  

 

725,000

 

  

 

891,750

 

  

 

123%

 

 Wells

  

 

850,000

 

  

 

1,045,500

 

  

 

123%

 

 McClellan

  

 

845,250

 

  

 

1,098,825

 

  

 

130%

 

     

 Delaney

  

 

790,000

 

  

 

837,400

 

  

 

106%

 

 

   40 


Table of Contents
  

 

COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Long-Term Compensation  

 

 

Long-Term Compensation

In February 2023, the Compensation Committee made long-term incentive awards to executive officers. The target long-term incentive grants were composed of three components: (a) restricted stock units (RSUs) constituting approximately 30% of the target opportunity, (b) stock-settled performance units (PSUs) constituting approximately 20% of the target opportunity, and (c) cash-settled performance units (EPUs) constituting approximately 50% of the target opportunity. The following table summarizes the target award values for our executives in accordance with our annual long-term program:

 

                  

Performance-Based Awards

 

 
            Stock-Settled Awards         

 Name

 

   Aggregate Target Award            2023-2025
RSUs1
    

    2023-2025

PSUs2

    

2023-2025

EPUs

 

 Kramer

  

 

$10,650,000

 

  

 

$3,195,000

 

  

 

$2,130,000

 

  

     $

5,325,000

 

 Zamarro

  

 

2,250,000

 

  

 

675,000

 

  

 

450,000

 

  

 

1,125,000

 

 Wells

  

 

3,200,000

 

  

 

960,000

 

  

 

640,000

 

  

 

1,600,000

 

 McClellan

  

 

2,900,000

 

  

 

870,000

 

  

 

580,000

 

  

 

1,450,000

 

       

 Delaney

  

 

2,900,000

 

  

 

870,000

 

  

 

580,000

 

  

 

1,450,000

 

 

1

See the “Grants of Plan-Based Awards” Table at page 60 for information regarding the target number of restricted stock units actually granted, which was determined by dividing the amount in this column by the closing market price of our Common Stock on the date of grant.

 

2

See the “Grants of Plan-Based Awards” Table at page 60 for information regarding the target number of performance shares actually granted, which was determined by dividing the amount in this column by the closing market price of our Common Stock on the date of grant.

2023 GRANTS OF PERFORMANCE-BASED INCENTIVES

Long-term performance-based incentives granted in 2023 have the following characteristics:

 

 

The payout is based on our consolidated results over a three-year performance cycle, with financial performance targets for each year of the three-year period established at the beginning of each year, weighted one-third for each year in the three-year performance cycle.

 

 

Financial performance is measured 50% on net income and 50% on cash flow return on capital (“CFROC”). Net income is used as a measure to focus on improvement in profitability. CFROC is an efficiency metric that measures how much return is generated in proportion to the investment in the business in terms of plant, property and equipment and working capital.

 

 

The payout based on financial performance can range from 0% to 150% for the 2023-2025 performance cycle based on actual results on the financial metrics.

 

 

The payout for the financial metrics is subject to a modifier (0.8x to 1.2x) based on three-year relative total shareholder return (TSR) versus peer companies over the entire three-year performance cycle ending December 31, 2025. Performance at the 55th percentile is required to achieve a 1.0x modifier, with the modifier capped at 1.0x if absolute TSR is negative over the three-year period, regardless of relative performance.

 

 

The resulting calculated payout can increase by up to 25% based on our performance against our three-year Strategic Initiatives Index, which is comprised of specific, measurable environmental and social goals regarding reducing greenhouse gas emissions and structural cost actions over the entire three-year period ending December 31, 2025.

 

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COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Long-Term Compensation  

 

 

 

The overall maximum payout is 200% of target.

 

 

LOGO

LONG-TERM COMPENSATION METRICS AND TARGETS

In February 2023, the Compensation Committee set financial performance metrics and targets for (i) year 3 of the 2021-2023 long-term awards, (ii) year 2 of the 2022-2024 long-term awards, and (iii) year 1 of the 2023-2025 long-term awards. The Compensation Committee also set strategic and operational goals for the Strategic Initiatives Index for the full three-year 2023-2025 performance cycle.

The performance metrics in our long-term awards emphasize the importance of our earnings (as measured by net income) and the efficiency of our utilization of free cash flow (as measured by CFROC), both weighted equally.

The following table shows our 2023 long-term compensation targets compared to our 2022 actual results (dollars in millions):

 

 Metric    2023 Target      2022 Actual  
   

 Net Income

  

 

$350

 

  

 

$383

 

   

 CFROC

  

 

3.8

  

 

(1.1

)% 

 

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Table of Contents
  

 

COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Long-Term Compensation  

 

 

Our 2023 net income target was set marginally lower than our 2022 actual results, reflecting improvements in EBIT of approximately $40 million that were more than offset by increased pension and finance expenses. Our net income target for 2023, like our EBIT targets, required that we offset continued inflation, including nearly $200 million of higher raw material costs and $600 million of other inflationary cost pressures in wages, benefits, transportation and energy, primarily through improvements in price and mix.

Our 2023 CFROC target was higher than our 2022 actual results, reflecting improved cash flows from higher earnings and stable working capital and capital expenditure levels.

Relative Total Shareholder Return (TSR) Modifier

To add further rigor to the long-term awards and ensure executives are focused on Goodyear’s stock price performance and aligned with our shareholders, the Compensation Committee also provided that the awards will be modified based on Goodyear’s relative total shareholder return performance versus an index of 20 highly relevant peer companies.

This modifier is designed to assess Goodyear’s success in creating shareholder value relative to other capital-intensive automotive and cyclical industrial companies with comparable leverage and strong correlations to Goodyear’s Common Stock performance. This group of companies better reflects our relative success in enhancing shareholder value than would comparisons to the peer companies used for benchmarking executive pay (which are chosen primarily due to their positioning as executive talent competitors) or a broad-based market index like the S&P 500, which we used prior to 2022. This approach has the further benefit of creating greater comparability throughout economic cycles. The Compensation Committee believes this reflects the understanding investors have of risk and reward in making investment decisions.

 

THE COMPARISON GROUP CONSISTS OF:

 

 

Adient plc

 

   

   

Flowserve Corporation

 

   

   

nVent Electric plc

   

American Axle & Manufacturing

     

Ford Motor Company

     

Stoneridge, Inc.

   

Aptiv PLC

     

General Motors Company

     

Terex Corporation

   

BorgWarner Inc.

     

Harley Davidson, Inc.

     

The Timken Company

   

Carpenter Technology Corporation

     

Hillenbrand, Inc.

     

WESCO International, Inc.

   

Dana Inc.

     

Lear Corporation

     

Whirlpool Corporation

   

Eastman Chemical Co.

     

Minerals Technologies Inc.

     

The TSR modifier measures the relative performance of our Common Stock versus the TSR peer group over the three-year performance cycle of our long-term incentive awards and is calculated based on the trailing two-month average closing price for our Common Stock and the TSR peer group (as in existence at the end of the period), assuming the reinvestment of

 

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Table of Contents
  

 

COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Long-Term Compensation  

 

 

dividends. The TSR modifier will cause the payout for the financial metrics in our long-term incentive awards to increase or decrease up to 20% as follows:

 

 Goodyear Common Stock vs. Comparison Group1   TSR Modifier                    Beginning in 2023, performance at the
55th percentile is required to achieve a
1.0x modifier, with the modifier capped
at 1.0x if absolute TSR is negative over
the three-year period, regardless of
relative performance.

 

75th Percentile

 

1.2x

 

= 55th Percentile

 

1.0x

 

25th Percentile

 

0.8x

 

 

1 Results between these performance levels will be interpolated.

 

Strategic Initiatives Index

 

 Metric   Goal

 

Greenhouse Gas Emissions

 

 

Reduce absolute global Scope 1 & 2 greenhouse gas emissions by 20% from a 2019 baseline.

 

 

Structural Cost Improvements

 

 

Develop and execute plan to improve structural costs (SAG and / or manufacturing), driving a $100 million improvement in EBIT by the end of 2025.

 

The Compensation Committee set rigorous strategic goals that are intended to be challenging, but with motivational value for the named executive officers. Our 2023-2025 greenhouse gas emissions goal sets a path to achieving our long-term sustainability targets, including our announced 2030 science-based target of a 46% reduction in Scope 1 and Scope 2 emissions and a 28% reduction in certain Scope 3 emissions. Our 2023-2025 structural cost improvement goal sets us on a path to drive further EBIT improvements.

If we achieve one of these goals, the payout on our 2023-2025 long-term performance awards will increase by 15 percentage points and, if we achieve both of these goals, the payout on our 2023-2025 long-term performance awards will increase by 25 percentage points (subject to a cap on the overall maximum payout of 200%).

2023 FINANCIAL PERFORMANCE

The table below shows the net income performance goals, actual results and payout percentages for the 2023 performance period applicable to each of the 2021-2023, 2022-2024 and 2023-2025 performance cycles. Actual payouts are determined at the end of the 3-year performance cycle based on the attainment of performance targets and are subject to the modifiers discussed above. With respect to the 2023 performance period of the 2021-2023, 2022-2024 and 2023-2025 performance cycles, each year was weighted evenly (33%), goals were set at the beginning of each performance period and the maximum payout for financial performance metrics was 150% of the target award opportunity.

 

($ in millions)

                             Net Income  

Threshold

 

    

Target

 

    

Maximum

 

    

Actual

Results

 

    

%
Achieved

 

 
       

$

120

 

  

$

350

 

  

$

530

 

  

$

76

 

  

 

0

 

   44 


Table of Contents
  

 

COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Long-Term Compensation  

 

 

“Net income,” as defined in our long-term incentive plans, means the Company’s net income, excluding charges (after-tax and minority interest) for rationalizations, certain asset write-offs and accelerated depreciation, goodwill impairment charges, certain pension curtailment and settlement charges, charges relating to the refinancing of debt, changes in tax valuation allowances and other discrete tax items, and the cumulative effect of accounting changes. Our 2023 “net income” also excluded the impact of certain other items noted in the table below. Our 2023 “net income” for purposes of our long-term incentive plans was calculated as follows:

 

 ($ in millions)

 

  

2023

 

 

 Goodyear net income (loss) (as reported)

  

$

(689

 Rationalizations, asset write-offs and accelerated depreciation charges

  

 

463

 

 Goodwill impairment

  

 

216

 

 Tupelo storm and Debica fire

  

 

80

 

 Net gains on asset sales and other dispositions

  

 

(69

 Pension curtailment and settlement charges

  

 

30

 

 Goodyear Forward costs

  

 

26

 

 UAW OE strike

  

 

15

 

 Changes in tax valuation allowances and other discrete tax items

  

 

(10

 Other, including certain legal and environmental matters

  

 

14

 

 Net income (loss)

  

$

76

 

The table below shows the cash flow return on capital performance goals, actual results and payout percentages for the 2023 performance period applicable to each of the 2021-2023, 2022-2024 and 2023-2025 performance cycles.

 

Cash Flow Return on Capital

 

 

Threshold

 

    

Target

 

    

Maximum

 

    

Actual

Results

 

    

%
Achieved

 

 
       

 

1.6

  

 

3.8

  

 

5.4

  

 

3.2

  

 

97

“Cash flow return on capital,” as defined in our long-term incentive plans, means free cash flow from operations divided by the sum of average net fixed assets and average working capital. See also the reconciliation of “free cash flow” on page 38.

Our 2023 cash flow return on capital for purposes of our long-term incentive plans was calculated as follows:

 

 ($ in millions)

 

  

2023

 

 

 Free cash flow, as adjusted

     $406  

 Foreign exchange

     (46)  

 Free cash flow from operations

     $360  

 Average working capital + average net fixed assets

     $11,143  
 

 CFROC

     3.2%  

 

 

   45 


Table of Contents
  

 

COMPENSATION DISCUSSION AND ANALYSIS  

LOGO

  

Long-Term Compensation  

 

 

Based on the results during the 2023 performance period, the Compensation Committee approved earnings on the long-term incentive awards for that period in an amount equal to 49% of the target amount for each of the 2021-2023, 2022-2024 and 2023-2025 awards.

The table below shows amounts earned by each of the named executive officers in respect of their long-term incentive grants for the 2023 performance period for each of the 2021-2023, 2022-2024 and 2023-2025 awards, which represents one-third of the respective target award opportunity:

 

  Name    Aggregate
Target Award1
     Portion of
Actual Award
Payable in
Cash2
    

Portion of
Actual Award
Payable in Shares

(# of Shares)2

 

2021-2023 Award, 2023 Performance Period

 

     

Kramer

  

$

2,268,316

 

  

$

869,800

 

  

 

20,695

 

     

Zamarro

  

 

87,291

 

  

 

33,500

 

  

 

796

 

     

Wells

  

 

617,631