VALHI, INC. VALHI, INC.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2620
April 5, 2023
To Our Stockholders:
You are cordially invited to attend the 2023 annual meeting of stockholders of Valhi, Inc., which will be held on Thursday, May 25, 2023, at 10:00 a.m., local time, at Three Lincoln Centre Conference Center, 5430 LBJ Freeway, Suite 350, Dallas, Texas 75240-2620. The matters to be acted upon at the meeting are described in the attached notice of annual meeting of stockholders and proxy statement.
Whether or not you plan to attend the meeting, please cast your vote as instructed on your notice of internet availability of proxy materials or, if you have requested a paper copy, on the proxy card or voting instruction form, as promptly as possible to ensure that your shares are represented and voted in accordance with your wishes. Your vote, whether given by proxy or in person at the meeting, will be held in confidence by the inspector of election as provided in our bylaws.
Sincerely,
Loretta J. Feehan
Chair of the Board
Michael S. Simmons
Vice Chairman of the Board,
President and Chief Executive Officer
VALHI, INC.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240-2620
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 25, 2023
To the Stockholders of Valhi, Inc.:
The 2023 annual meeting of stockholders of Valhi, Inc. will be held on Thursday, May 25, 2023, at 10:00 a.m., local time, at Three Lincoln Centre Conference Center, 5430 LBJ Freeway, Suite 350, Dallas, Texas 75240-2620, for the following purposes:
- to elect the seven director nominees named in the proxy statement to serve until the 2024 annual meeting of stockholders;
- to approve, on a nonbinding advisory basis, our named executive officer compensation;
- to approve, on a nonbinding advisory basis, the preferred frequency for stockholders to consider approving executive compensation; and
- to transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
The close of business on March 29, 2023, has been set as the record date for the meeting. Only holders of our common stock at the close of business on the record date are entitled to notice of and to vote at the meeting. A complete list of stockholders entitled to vote at the meeting will be available for examination during normal business hours by any of our stockholders, for purposes related to the meeting, for a period of ten days prior to the meeting at our corporate offices.
You are cordially invited to attend the meeting. Whether or not you plan to attend the meeting, please cast your vote by following the instructions on the notice of internet availability of proxy materials or, if you have requested a paper copy, on the proxy card or voting instruction form, as promptly as possible to ensure that your shares are represented and voted in accordance with your wishes.
By Order of the Board of Directors,
Jane R. Grimm, Secretary
Dallas, Texas
April 5, 2023
Important Notice Regarding the Availability of Proxy Materials for the
Annual Stockholder Meeting to Be Held on May 25, 2023.
The proxy statement and annual report to stockholders (including Valhi's Annual Report on Form 10-K for
the fiscal year ended December 31, 2022) are available at www.viewproxy.com/Valhi/2023.
TABLE OF CONTENTS
TABLE OF CONTENTS | Page | |
i | ||
GLOSSARY OF TERMS | iii | |
GENERAL INFORMATION | 1 | |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING | 1 | |
CONTROLLING STOCKHOLDER | 5 | |
SECURITY OWNERSHIP | 6 | |
Ownership of Valhi | 6 | |
Ownership of Related Companies | 7 | |
PROPOSAL 1: ELECTION OF DIRECTORS | 9 | |
Nominees for Director | 9 | |
EXECUTIVE OFFICERS | 11 | |
CORPORATE GOVERNANCE | 13 | |
Controlled Company Status, Director Independence and Committees | 13 | |
2022 Meetings and Standing Committees of the Board of Directors | 13 | |
Audit Committee | 13 | |
Management Development and Compensation Committee | 13 | |
Risk Oversight | 14 | |
Identifying and Evaluating Director Nominees | 14 | |
Leadership Structure of the Board of Directors and Independent Director Meetings | 15 | |
Stockholder Proposals and Director Nominations for the 2024 Annual Meeting of Stockholders | 15 | |
Communications with Directors | 15 | |
Compensation Committee Interlocks and Insider Participation | 16 | |
Code of Business Conduct and Ethics | 16 | |
Corporate Governance Guidelines | 16 | |
Availability of Corporate Governance Documents | 16 | |
Employee, Officer and Director Hedging | 16 | |
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS AND OTHER INFORMATION | 17 | |
Compensation Discussion and Analysis | 17 | |
Compensation Committee Report | 19 | |
Summary of Cash and Certain Other Compensation of Executive Officers | 20 | |
No Grants of Plan-Based Awards | 21 | |
No Outstanding Equity Awards at December 31, 2022 | 21 | |
No Option Exercises or Stock Vested | 21 | |
Pension Benefits | 21 | |
Nonqualified Deferred Compensation | 21 | |
Pay Ratio Disclosure | 21 | |
Director Compensation | 22 | |
Pay Versus Performance | 24 | |
Compensation Policies and Practices as They Relate to Risk Management | 25 | |
Compensation Consultants | 26 | |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE | 26 | |
CERTAIN RELATIONSHIPS AND TRANSACTIONS | 26 | |
Related Party Transaction Policy | 26 | |
Relationships with Related Parties | 27 | |
Intercorporate Services Agreements | 28 | |
Risk Management Program | 28 | |
Tax Matters | 30 | |
Related Party Loans for Cash Management Purposes | 30 | |
IT Data Services Program | 32 | |
Guarantees Provided by Valhi to Affiliates and Related Items | 32 | |
Office Sublease | 32 | |
Repurchase of Shares by CompX from Contran | 32 | |
AUDIT COMMITTEE REPORT | 33 | |
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM MATTERS | 34 | |
Independent Registered Public Accounting Firm | 34 | |
Fees Paid to PricewaterhouseCoopers LLP | 34 | |
Preapproval Policies and Procedures | 35 | |
PROPOSAL 2: NONBINDING ADVISORY RESOLUTION ON NAMED EXECUTIVE OFFICER | 36 | |
COMPENSATION | 36 | |
Background | ||
Say-on-Pay Proposal | 36 | |
Effect of the Proposal | 36 | |
Vote Required | 36 | |
PROPOSAL 3: NONBINDING ADVISORY PREFERRED FREQUENCY FOR STOCKHOLDERS TO | 37 | |
CONSIDER APPROVING EXECUTIVE COMPENSATION | 37 | |
Background of this Proposal |
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Say-When-on-Pay Proposal | 37 |
Effect of the Proposal | 37 |
Vote Required | 37 |
OTHER MATTERS | 37 |
2022 ANNUAL REPORT ON FORM 10-K | 38 |
STOCKHOLDERS SHARING THE SAME ADDRESS | 38 |
REQUEST COPIES OF THE 2022 ANNUAL REPORT AND THIS PROXY STATEMENT | 38 |
-ii-
GLOSSARY OF TERMS
"Alliance Advisors" means Alliance Advisors, LLC, our proxy management advisor who will act as inspector of election for the annual meeting of stockholders.
"BMI" means Basic Management, Inc., a land management company that is a subsidiary of Tremont.
"brokerage firm or other nominee" means a brokerage firm or other nominee such as a banking institution, custodian, trustee or fiduciary (other than our transfer agent, Computershare) through which a stockholder holds its shares of our common stock.
"broker/nominee non-vote" means a non-vote by a brokerage firm or other nominee for shares held for a client's account for which the brokerage firm or other nominee does not have discretionary authority to vote on a particular matter and has not received instructions from the client.
"Code" means the Internal Revenue Code of 1986, as amended.
"Computershare" means Computershare Trust Company, N.A., our stock transfer agent and registrar.
"CompX" means CompX International Inc., one of our publicly held subsidiaries that manufactures security products and recreational marine components.
"Contran" means Contran Corporation, the parent corporation of our consolidated tax group. "Dixie Rice" means Dixie Rice Agricultural L.L.C., one of our parent companies.
"EWI" means EWI RE, Inc., a wholly owned subsidiary of NL that, prior to NL's sale of EWI's insurance and risk management business to a third party in November 2019, was a reinsurance brokerage and risk management company.
"Family Trust" means the Harold C. Simmons Family Trust No. 2, which was established for the benefit of Lisa K. Simmons and her late sister and their children.
"independent directors" means the following directors: Thomas E. Barry, Terri L. Herrington, Kevin B. Kramer, W. Hayden McIlroy and Mary A. Tidlund, as applicable.
"ISA" means an intercorporate services agreement between Contran and a related company pursuant to which employees of Contran provide certain services, including executive officer services, to such related company on an annual fixed fee basis.
"Kronos Worldwide" means Kronos Worldwide, Inc., one of our publicly held subsidiaries that is an international manufacturer of titanium dioxide products.
"LandWell" means The LandWell Company L.P., a real estate development company that is a subsidiary of Tremont.
"LPC" means Louisiana Pigment Company, L.P., a partnership of which a wholly owned subsidiary of Kronos Worldwide and a subsidiary of Venator Materials PLC each owns 50%.
"named executive officer" means any person named in the 2022 Summary Compensation Table in this proxy statement.
"NL" means NL Industries, Inc., one of our publicly held subsidiaries that is a diversified holding company (i) of which CompX is a subsidiary and (ii) that holds a significant investment in Kronos Worldwide.
"NLKW" means NLKW Holding, LLC, a wholly owned subsidiary of NL, which holds a significant equity interest in Kronos Worldwide.
"NYSE" means the New York Stock Exchange.
"PCAOB" means the Public Company Accounting Oversight Board, a private sector, non-profit corporation that oversees auditors of U.S. public companies.
"PwC" means PricewaterhouseCoopers LLP, our independent registered public accounting firm.
"record date" means the close of business on March 29, 2023, the date our board of directors set for the determination of stockholders entitled to notice of and to vote at the 2023 annual meeting of our stockholders.
"RPT Policy" means the Valhi, Inc. Policy Regarding Related Party Transactions, as amended and restated effective March 3, 2022.
"Say-on-Pay" means the second proposal in this proxy statement for a nonbinding advisory vote for the consideration of our stockholders to approve the compensation of our named executive officers as such proposal is described and as such compensation is disclosed in this proxy statement.
"Say-When-on-Pay" means the third proposal in this proxy statement for a nonbinding advisory vote for the consideration of our stockholders on how often we should include a Say-on-Pay proposal in our proxy materials for future annual stockholder meetings, as such proposal is described in this proxy statement.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.
"stockholder of record" means a stockholder of our common stock who holds shares in its name in certificate form or electronically with our transfer agent, Computershare.
"Tall Pines" means Tall Pines Insurance Company, an indirect wholly owned captive insurance subsidiary of ours. "Tremont" means Tremont LLC, one of our wholly owned subsidiaries.
"Valhi," "us," "we" or "our" means Valhi, Inc.
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Disclaimer
Valhi Inc. published this content on 10 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 April 2023 16:15:01 UTC.
