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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.      )

 

Filed by the Registrant x   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))

 

x	Definitive Proxy Statement

 

¨	Definitive Additional Materials

 

¨	Soliciting Material Pursuant to §240.14a-12

 

The Mosaic Company

(Name of Registrant as Specified In Its Charter)

 

  

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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¨	Fee paid previously with preliminary materials.

 

¨	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

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				Headquarter Offices: Atria Corporate Center, Suite E490 3033 Campus Drive Plymouth, MN 55441 Telephone (763) 577-2700

April 1, 2015

Dear Stockholder:

You are cordially invited to attend The Mosaic Company’s 2015 Annual Meeting of Stockholders. The meeting will be held at the Crowne Plaza Hotel, 3131 Campus Drive, Plymouth, Minnesota 55441 and via the Internet at www.virtualshareholdermeeting.com/MOS15 on May 14, 2015, at 10:00 a.m. local time. A Notice of the Annual Meeting and a Proxy Statement covering the formal business of the meeting appear on the following pages. At the meeting we will report on our operations during the year ended December 31, 2014. Directions to the meeting are included at the end of the accompanying Proxy Statement.

We hope that you will be able to attend the meeting. However, even if you are planning to attend the meeting, please promptly submit your proxy vote by telephone or Internet or, if you received a copy of the printed proxy materials, by completing and signing the enclosed proxy card and returning it in the postage-paid envelope provided. This will ensure that your shares are represented at the meeting. Even if you submit a proxy, you may revoke it at any time before it is voted. If you attend the meeting and wish to vote in person, you will be able to do so even if you have previously returned your proxy card.

Your cooperation and prompt attention to this matter are appreciated. We look forward to seeing you at the Annual Meeting.

Sincerely,

 

James T. Prokopanko President and Chief Executive Officer

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				Headquarter Offices: Atria Corporate Center, Suite E490 3033 Campus Drive Plymouth, MN 55441 Telephone (763) 577-2700

 

 

Notice of 2015 Annual Meeting of Stockholders

 

 

To Our Stockholders:

The 2015 Annual Meeting of Stockholders of The Mosaic Company, a Delaware corporation, will be held at the Crowne Plaza Hotel, 3131 Campus Drive, Plymouth, Minnesota 55441 on May 14, 2015, at 10:00 a.m. local time, to consider and act upon the following matters, each of which is explained more fully in the accompanying Proxy Statement:

 

1.

Election of eight directors for terms expiring in 2016, each as recommended by our Board of Directors;

 

2.

Ratification of the appointment of KPMG LLP as our independent registered public accounting firm to audit our financial statements as of and for the year ending December 31, 2015 and the effectiveness of internal control over financial reporting as of December 31, 2015, as recommended by our Audit Committee;

 

3.

An advisory vote to approve the compensation of our executive officers disclosed in the accompanying Proxy Statement; and

 

4.

Any other business that may properly come before the 2015 Annual Meeting of Stockholders or any adjournment or postponement thereof.

In accordance with our Bylaws and resolutions of the Board of Directors, only stockholders of record at the close of business on March 18, 2015 are entitled to notice of and to vote at the 2015 Annual Meeting of Stockholders.

By Order of the Board of Directors

 

Mark J. Isaacson

Vice President, General Counsel and Corporate Secretary

April 1, 2015

Important Notice Regarding the Availability of Proxy Materials for the

Stockholder Meeting to be Held on May 14, 2015:

Our Proxy Statement and 2014 Annual Report are available at www.mosaicco.com/proxymaterials.

 

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PROXY STATEMENT

The Board of Directors (the “Board”) of The Mosaic Company is soliciting proxies for use at the 2015 Annual Meeting to be held on May 14, 2015, and at any adjournment or postponement of the meeting. The proxy materials are first being mailed or available to stockholders on or about April 1, 2015.

References in this Proxy Statement to “Mosaic” refer to The Mosaic Company and references to the “Company,” “we,” “us,” or “our” refer to Mosaic and its direct and indirect subsidiaries, individually or in any combination.

Through May 31, 2013, our fiscal year ended on May 31, and references in this Proxy Statement to fiscal 2013 or any prior fiscal year are to the twelve months ended May 31 of that year. As previously reported, we have changed our fiscal year end to December 31 from May 31 and references in this Proxy Statement to the “2013 Stub Period” are to the seven month transition period from June 1, 2013 through December 31, 2013. We have filed an annual report on Form 10-K with the Securities and Exchange Commission (“SEC”) for the year ended December 31, 2014 (the “2014 10-K Report”).

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

Our Board has nominated eight directors for election at the 2015 Annual Meeting to hold office for one-year terms expiring in 2016.

Our Board currently consists of 12 members. Prior to the 2014 Annual Meeting, the Board was divided into three classes and members of each class were elected to serve three-year terms, with the term of office for each class ending in consecutive years. In accordance with our Bylaws and our Restated Certificate of Incorporation, as amended by the stockholders at the 2014 Annual Meeting, our Board is declassified and directors are nominated for election for a one-year term.

Our Board has nominated Nancy E. Cooper, Gregory L. Ebel, Denise C. Johnson, Robert L. Lumpkins, William T. Monahan, James L. Popowich, James T. Prokopanko and Steven M. Seibert, each of whom is currently serving as a director, to stand for re-election at the 2015 Annual Meeting for one-year terms expiring in 2016.

If one or more nominees should become unavailable to serve as a director, it is intended that shares represented by the proxies will be voted for such substitute nominee or nominees as may be selected by the Board.

Nomination and Selection of Directors

The Corporate Governance and Nominating Committee identifies and evaluates potential director candidates in a variety of ways:

 

•

Periodic solicitation of input from Board members.

 

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Consultations with senior management and director search firms.

 

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Candidates nominated by stockholders who have complied with the advance notice procedures set forth in our Bylaws.

The Corporate Governance and Nominating Committee makes a recommendation to the full Board as to the persons who should be nominated by the Board, and the Board determines its nominees after considering the recommendation of the Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee evaluates all candidates on the same basis regardless of the source of the referral.

Our Bylaws provide that a stockholder entitled to vote at an annual meeting who wishes to nominate a candidate for election to the Board is required to give written notice to our Corporate Secretary of his or her intention to make such a nomination. In accordance with the advance notice procedures in our Bylaws, a notice

 

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of nomination is required to be received within the prescribed time and must contain certain information about both the nominee and the stockholder making the nomination as described in our Policy Regarding Identification and Evaluation of Potential Director Nominees. The full text of this policy is available on our website www.mosaicco.com under the “Investors – Corporate Overview – Governance Documents” caption. The Corporate Governance and Nominating Committee may require that the proposed nominee furnish other information to determine that person’s eligibility to serve as a director. Additionally, the notice of nomination must include a statement whether each such nominee, if elected, intends to tender, promptly following such person’s failure to receive the required vote for election, an irrevocable resignation letter to be effective upon acceptance by the Board, in accordance with our Corporate Governance Guidelines. The remainder of the requirements of the advance notice procedures are described in this Proxy Statement under the caption “Stockholder Proposals and Nominations for the 2016 Annual Meeting of Stockholders.” A nomination that does not comply with the advance notice procedures may be disregarded.

Director Qualifications

In order to be nominated by the Board as a director, director nominees should possess, in the judgment of the Corporate Governance and Nominating Committee, the qualifications set forth in our Corporate Governance Guidelines, including:

 

•

Personal characteristics:

 

Ø

highest personal and professional ethics, integrity and values;

 

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an inquisitive and objective perspective; and

 

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practical wisdom and mature judgment;

 

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Broad experience at the policy-making level in international business, trade, agriculture, government, academia or technology;

 

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Expertise that is useful to us and complementary to the background and experience of other directors, so that an appropriate balance of skills and experience of the membership of the Board can be achieved and maintained;

 

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Willingness to represent the best interests of all stockholders and objectively appraise management performance;

 

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Involvement only in activities or interests that do not create a material conflict with the director’s responsibilities to us and our stockholders;

 

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Commitment in advance of necessary time for Board and committee meetings; and

 

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A personality reasonably compatible with the existing Board members.

In evaluating director nominees, the Board and the Corporate Governance and Nominating Committee believe that diversity in the broadest sense, as stated in our Corporate Governance Guidelines, including background, experience, geographic location, gender and ethnicity, is an important consideration in the composition of the Board as a whole. The committee discusses diversity considerations in connection with each director candidate. When seeking the assistance of a director search firm to identify candidates, the Corporate Governance and Nominating Committee requests that the search firm consider diversity, in addition to other factors, in its search criteria.

Our Corporate Governance and Nominating Committee annually reviews our Corporate Governance Guidelines, including the provisions relating to diversity, and recommends to the Board any changes it believes appropriate to reflect best practices. In addition, our Board assesses annually its overall effectiveness by means of a self-evaluation process. This evaluation includes, among other things, a peer review and an assessment of the overall composition of the Board, including a discussion as to whether the Board has adequately considered diversity, among other factors, in identifying and discussing director candidates.

The full text of our Corporate Governance Guidelines is available on our website at www.mosaicco.com under the “Investors – Corporate Overview – Governance Documents” caption.

 

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Nominees for Election as Directors whose Terms Expire in 2016

 

Nancy E. Cooper Retired, former Executive Vice President and Chief Financial Officer CA Technologies   Age: 61   Director Since: October 2011   2014 Meeting Attendance: 95%   Independent: Yes   Mosaic Committee Membership: •  Audit (Chair) •  Corporate Governance and     Nominating		Ms. Cooper served as Executive Vice President and Chief Financial Officer of CA Technologies, an IT management software provider, from August 2006 until she retired in May 2011. Ms. Cooper joined CA Technologies with nearly 30 years of finance experience, including as Chief Financial Officer for IMS Health Incorporated, a leading provider of market intelligence to the healthcare industry, from 2001 to August 2006, and, prior to that, Reciprocal, Inc., a leading digital rights management and consulting firm. In 1998, she served as a partner responsible for finance and administration at General Atlantic Partners, a private equity firm focused on software and services investments. Ms. Cooper began her career at IBM Corporation where she held increasingly important roles over a 22-year period that focused on technology strategy and financial management.
		Skills and Qualifications:
		Financial Expertise and Leadership and Audit Committee Experience – Extensive experience as a Chief Financial Officer and in other financial leadership roles at several public companies, as well as service on the audit committee of two other public companies, allows her to serve as an “audit committee financial expert” within the meaning of SEC rules. Software Technology Experience – Experience in technology matters. Ethics and Compliance – Ethics and compliance focus. Risk Management – Executive experience in risk management.
		Other Board Service:
		•  Teradata Corporation (Audit Committee) •  Brunswick Corporation (Audit Committee)

 

Gregory L. Ebel Chairman, President and Chief Executive Officer Spectra Energy Corp   Age: 50   Director Since: October 2012   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •  Audit •  Compensation		Mr. Ebel has served as Chairman, President and Chief Executive Officer of Spectra Energy Corp which, through its subsidiaries and equity affiliates, owns and operates a large and diversified portfolio of complementary natural gas-related energy assets, since April 2014. From January 2009 to April 2014, Mr. Ebel served as President as Chief Executive Officer of Spectra Energy. From January 2007 to January 2009, Mr. Ebel served as Group Executive and Chief Financial Officer of Spectra Energy and as President of Union Gas Limited, a subsidiary of Spectra Energy, from January 2005 until January 2007, and Vice President, Investor & Shareholder Relations of Duke Energy Corporation from November 2002 until January 2005. Mr. Ebel joined Duke Energy in March 2002 as Managing Director of Mergers and Acquisitions in connection with Duke Energy’s acquisition of Westcoast Energy Inc.
		Skills and Qualifications:
		Executive Leadership – Breadth of senior executive and policy-making roles at Spectra Energy and Duke Energy, and in a number of leadership positions in the areas of finance, operations and strategic development. Financial Expertise and Leadership – Experience in financial matters and as a financial executive, including Chief Financial Officer of Spectra Energy and Vice President, Investor and Shareholder Relations of Duke Energy, allows him to serve as an “audit committee financial expert” within the meaning of SEC rules. Business Development – Experience in leading organization in the areas of strategic development and mergers and acquisitions at Spectra Energy and Duke Energy. Risk Management – Executive experience in risk management.
		Other Board Service:
		•  Spectra Energy Corp •  Spectra Energy Partners

 

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Denise C. Johnson Vice President and Officer – Integrated Manufacturing Operations Caterpillar, Incorporated   Age: 48   Director Since: May 2014   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •  Environmental, Health, Safety     and Sustainable Development		Ms. Johnson has served as Vice President of Material Handling and Underground Division of Caterpillar, Incorporated (“Caterpillar”), a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives, since January 2015. Prior to becoming Vice President of Material Handling and Underground Division, Ms. Johnson served as Vice President and Officer – Integrated Manufacturing Operations from May 2013 to January 2015, as Vice President and Officer – Diversified Products Division from January 2013 to May 2013 and as General Manager – Specialty Products from May 2011 to January 2013 of Caterpillar. Ms. Johnson began her career at General Motors Corporation and continued at General Motors Company, an automobile and truck manufacturer, where she held increasingly important roles from 1989 through 2011, including President and Managing Director of General Motors do Brasil Ltda. from June 2010 to March 2011; Vice President and Officer, General Motors Labor Relations, from December 2009 to June 2010; Vehicle Line Director and Vehicle Chief Engineer, Global Small Cars, from April 2009 to December 2009; and Plant Manager, Flint Truck Assembly & Flint Metal Center Plants, from November 2008 to April 2009.
		Skills and Qualifications:
		Global Operational Leadership – Significant experience in leading complex global operations, labor negotiations and product development, improvement and launches. Operational Excellence – Experience in lean manufacturing and supply chain management. Strategic Business Planning – Experience in developing global leadership strategies to optimize core business value.

 

Robert L. Lumpkins Retired, former Vice Chairman and Chief Financial Officer Cargill, Incorporated   Non-Executive Chairman of Mosaic’s Board   Age: 71   Director Since: January 2004   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •  Corporate Governance and     Nominating (Chair)		Mr. Lumpkins served as Vice Chairman of Cargill from August 1995 to October 2006 and as its Chief Financial Officer from 1989 to 2005. As Vice Chairman of Cargill, Mr. Lumpkins played a key role in the formation of Mosaic through the combination of IMC and Cargill’s fertilizer businesses.
		Skills and Qualifications:
		Executive Leadership – Experience in various senior executive and policy-making roles at Cargill, including as Vice Chairman for over a decade; international management; strong and effective Board leadership and governance. Financial Expertise and Leadership – Served in various financial leadership roles at Cargill, including Chief Financial Officer for over ten years. Agricultural and Fertilizer Business Expertise; Formation of Mosaic – Experience in Cargill’s agricultural and fertilizer businesses and service as one of Cargill’s key leaders in the conception and formation of Mosaic; possesses unique strategic and business insights into our business.
		Other Board Service:
		•  Ecolab, Inc. (Chair, Safety, Health and Environment Committee; Audit Committee) •  Howard University •  Educational Testing Service •  Airgas, Inc. (2010 – August 2013) •  Webdigs, Inc. (2007 – 2010)

 

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William T. Monahan Retired, former Chairman of the Board, President and Chief Executive Officer Imation Corp.   Age: 67   Director Since: October 2004   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •  Audit •  Compensation (Chair)		Mr. Monahan served as Chairman of the Board, President and Chief Executive Officer of Imation Corp., a developer, manufacturer, marketer and distributor of removable data storage media products and accessories, from 1996 to 2004. Previously, he served as Group Vice President of 3M Company responsible for its Electro and Communications Group, Senior Managing Director of 3M’s Italy business and Vice President of 3M’s Data Storage Products Division.
		Skills and Qualifications:
		Executive and Operational Leadership – Broad experience as CEO, Chairman, and lead director of other public companies. Experienced in international management, financial management, mergers and acquisitions and corporate structure development. Marketing – Experienced in worldwide marketing and distribution, and business to business sales development. Executive Compensation Background – Strong background in executive compensation matters as a former CEO and in other executive roles, as well as his service as a member and chairman of compensation committees for other public companies, facilitates his leadership of our Compensation Committee. Risk Management – Executive experience in risk management.
		Other Board Service:
		•   PentairLtd. (Lead Director; Compensation Committee; Governance Committee) •   HutchinsonTechnology, Inc. (2000 – December 2012; Chair, Compensation Committee) •   SolutiaInc. (2008 – July 2012; Lead Director)

 

James L. Popowich Retired, former President and Chief Executive Officer Elk Valley Coal Corporation   Age: 70   Director Since: December 2007   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •   Compensation •   Environmental,Health, Safety and Sustainable Development		Mr. Popowich served as President and Chief Executive Officer of Elk Valley Coal Corporation (“EVCC”), a producer of metallurgical hard coking coal, in Calgary, Alberta, from January 2004 to August 2006, and as President of the Fording Canadian Coal Trust, (“Fording Coal”) a mutual fund trust that held a majority ownership interest in EVCC, from January 2004 until his retirement in December 2006. Mr. Popowich was Executive Vice President of EVCC from February 2003 to January 2004, and from March 1990 to June 2001 served as Vice President – Operations at Fording Coal. He was Past President of Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”), an industry technical association dedicated to education and identifying best practices in the mineral industry from May 2008 through May 2009, and President of CIM from May 2007 to May 2008.
		Skills and Qualifications:
		Executive and Operational Leadership Experience – Significant executive and operational experience. Mining Experience – Extensive experience in the mining business, including both shaft and open-pit; member of the Association of Professional Engineers, Geologist and Geophysicists of Alberta; received the CIM Fellowship award for contributions to the coal industry in Canada; and serves as a consultant to the mining industry with a focus on operational excellence. Environment, Health, Safety, and Sustainability – Familiarity with addressing environmental, health, safety, corporate social responsibility and greenhouse gas matters in Canada.
		Other Board Service:
		•   CIM •   ClimateChange Central (an organization established by the Alberta government dedicated to the reduction of greenhouse gasses, 2002 – 2010)

 

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James T. Prokopanko President and Chief Executive Officer The Mosaic Company   Age: 61   Director Since: October 2004   2014 Meeting Attendance: 87.5%   Independent: No		Mr. Prokopanko has been our President and Chief Executive Officer since January 2007. He joined us as our Executive Vice President and Chief Operating Officer in July 2006, serving in such offices until he was elected President and Chief Executive Officer. Previously, he was a Corporate Vice President of Cargill from 2004 to 2006. He was Cargill’s Corporate Vice President with executive responsibility for procurement from 2002 to 2006 and a leader of Cargill’s Ag Producer Services Platform from 1999 to 2006. After joining Cargill in 1978, he served in a wide range of leadership positions, including being named Vice President of the North American crop inputs business in 1995. During his Cargill career, Mr. Prokopanko was engaged in retail agriculture businesses in Canada, the United States, Brazil, Argentina and the United Kingdom. Mr. Prokopanko is the sole director who is a member of management.
		Skills and Qualifications:
		Management Interface with Board – Principal interface between management and our Board; facilitates our Board’s performance of its oversight function by communicating the Board’s and management’s perspectives to each other. Agriculture/Fertilizer Business – Longstanding experience in the agriculture and fertilizer industry through executive and operational roles for Cargill.
		Other Board Service:
		•  Vulcan Materials Company (Compensation Committee; Governance Committee)

 

Steven M. Seibert Attorney The Seibert Law Firm   Age: 59   Director Since: October 2004   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •  Corporate Governance and     Nominating •  Environmental, Health, Safety     and Sustainable Development     (Chair)		Mr. Seibert is a land use and environmental attorney and has been a Florida Supreme Court-certified mediator for over 20 years. He has operated The Seibert Law Firm in Tallahassee, Florida since January 2003, and in early 2013 co-founded a strategy consulting firm, triSect, LLC. From July 2008 until September 2011, Mr. Seibert was Senior Vice President and Director of Strategic Visioning for the Collins Center for Public Policy, a non-partisan, non-profit policy research organization. He also served as the Executive Director of the Century Commission for a Sustainable Florida from 2005 until July 2008. Prior to re-starting his law practice in 2003, Mr. Seibert served as the Secretary of Florida’s Department of Community Affairs from 1999 to 2003, following his appointment by Governor Jeb Bush, and, before that, Mr. Seibert was an elected County Commissioner representing Pinellas County, Florida from 1992 to 1999.
		Skills and Qualifications:
		Government and Public Policy; Statewide and Local Issues in Florida – Service in various public policy and governmental roles in Florida, as well as his law practice, contribute to our Board’s understanding of public policy and other statewide and local issues in Florida, where most of our phosphate operations are located. Environment and Land Use Experience – Insights gained through his experience in environmental, land and water use and emergency management in Florida enhance our Board’s perspective on these matters. Facilitates his leadership of our Environmental, Health, Safety and Sustainable Development Committee.

 

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Directors Whose Terms Expire in 2016

 

Timothy S. Gitzel President and Chief Executive Officer Cameco Corporation   Age: 52   Director Since: 2013   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •   Audit •   Corporate Governance and Nominating		Mr. Gitzel has been President and Chief Executive Officer of Cameco Corporation, a uranium producer and provider of processing services required to produce fuel for nuclear power plants, since July 2011. From May 2010 to July 2011, Mr. Gitzel served as President of Cameco and from January 2007 to May 2010, as its Senior Vice President and Chief Operating Officer. Prior to joining Cameco, Mr. Gitzel was Executive Vice President, mining business unit for Areva SA in Paris, France from 2004 to January 2007 with responsibility for global uranium, gold, exploration and decommissioning operations in eleven countries, and served as President and Chief Executive Officer of Cogema Resources Inc., now known as Areva Resources Canada, from 2001 to 2004.
		Skills and Qualifications:
		Executive Leadership – Executive leadership experience in multi-national companies. Experience in Business, Government and Regulatory Affairs in Canada – Extensive experience in business, governmental and regulatory affairs in Canada and the Province of Saskatchewan, where most of our Potash business’ mines are located. Mining Experience – More than 19 years of senior management experience in Canadian and international uranium and mining activities including global exploration and decommissioning operations. Risk Management – Executive experience in risk management.
		Other Board Service:
		•  Cameco Corporation
William R. Graber Retired, former Senior Vice President and Chief Financial Officer McKesson Corporation   Age: 71   Director Since: October 2004   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •   Audit •   Corporate Governance and Nominating		Mr. Graber is the retired Senior Vice President and Chief Financial Officer of McKesson Corporation, a healthcare services company. Mr. Graber held this position since joining McKesson in February 2000 through his retirement in May 2004. From 1991 to 1999, Mr. Graber was with Mead Corporation where, prior to becoming Vice President and Chief Financial Officer, he served as Controller and Treasurer. From 1965 to 1991, Mr. Graber held a variety of financial management positions at General Electric Company. On February 21, 2015, Mr. Graber, who will attain the age of 72 in 2015, submitted his resignation as a director in accordance with the retirement policy described in this Proxy Statement. On March 5, 2015, the Board, upon the recommendation of its Corporate Governance and Nominating Committee, rejected the resignation and Mr. Graber accepted the Board’s request to continue to serve as a director until the Annual Meeting of Stockholders in 2016 or such other time prior to expiration of his term of office as mutually agreed by Mr. Graber and the Board.
		Skills and Qualifications:
		Financial Expertise and Leadership – Experience as Chief Financial Officer and other financial and accounting leadership roles for several other companies, facilitates his service on our Audit Committee and allows him to serve as an “audit committee financial expert” within the meaning of SEC rules. Executive Leadership: Extensive experience as both a senior executive and a director of other public companies in a wide variety of businesses, including cyclical businesses, short-cycle, long-cycle, manufacturing and service businesses. Risk Management – Executive experience in risk management.
		Other Board Service:
		•  Kaiser Permanente •  Archimedes, Inc. (2005 – 2013) •  Solectron Corporation (2004 – 2007)

 

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Emery N. Koenig Vice Chairman, Chief Risk Officer and member of Corporate Leadership Team Cargill, Incorporated   Age: 59   Director Since: October 2010   2014 Meeting Attendance: 100%   Independent: Yes   Mosaic Committee Membership: •   Environmental, Health, Safety and Sustainable Development		Mr. Koenig was elected the Vice Chairman and Chief Risk Officer of Cargill in September 2013 and has served as a member of its Corporate Leadership Team since December 2009. Previously, Mr. Koenig served as leader of Cargill Agricultural Supply Chain Platform from April 2006 to May 2014; as Executive Vice President and Chief Risk Officer of Cargill from June 2011 to September 2013; as Senior Vice President at Cargill from June 2010 to June 2011; and as leader of the Cargill Energy, Transportation and Industrial Platform from June 2007 to July 2011. Since joining Cargill in 1978, Mr. Koenig has had 14 years of agricultural commodity trading and managerial experience in various locations in the United States and 15 years in Geneva, Switzerland leading Cargill’s global trading and risk management activities. Mr. Koenig currently serves as Chairman of Black River Asset Management, a subsidiary of Cargill, a trustee for Minnesota Public Radio and a director of CARE USA and the Catholic Community Foundation.
		Skills and Qualifications:
		Executive Leadership – Experience in various senior executive and policy-making roles at Cargill, including broad experience in management of a global business. Financial Expertise and Leadership – Experience as executive and leader in commodity trading, international trading and asset management businesses. Risk Management – Executive experience in risk management functions of a large, multinational business. Agricultural Business Expertise – Extensive experience in agricultural commodity trading and management.
		Other Board Service:
		Cargill, Incorporated

 

David T. Seaton Chairman and Chief Executive Officer Fluor Corporation   Age: 53   Director Since: April 2009   2014 Meeting Attendance: 95%   Independent: Yes   Mosaic Committee Membership: •   Compensation •   Environmental, Health, Safety and Sustainable Development		Mr. Seaton is the Chairman and Chief Executive Officer of Fluor Corporation, a professional services firm. He was elected chairman in February 2012 and became a member of Fluor’s board of directors and Chief Executive Officer in February 2011. Prior to his appointment as Chief Executive Officer, Mr. Seaton was Chief Operating Officer of Fluor from November 2009 to February 2011. Mr. Seaton served as Senior Group President of the Energy and Chemicals, Power and Government business groups for Fluor from March 2009 to November 2009 and as Group President of Energy and Chemicals for Fluor from February 2007 to March 2009. Since joining Fluor in 1984, Mr. Seaton has held numerous positions in both operations and sales globally.
		Skills and Qualifications:
		Project Management – Extensive experience in leading major projects. Executive Leadership – Experience as a CEO and in other executive leadership and policy-making roles in a public company. Leadership of Global Operations – Experience in leadership of a large, global business. Energy and Chemicals Markets Experience – Experience in energy and chemicals markets.
		Other Board Service:
		•  Fluor Corporation (Chairman; Chair, Executive Committee)

 

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DIRECTOR STOCK OWNERSHIP GUIDELINES

We have stock ownership guidelines for non-employee directors. These guidelines call for each director to acquire shares with a value of at least $425,000 within five years of becoming a director. For purposes of computing a director’s holdings under our stock ownership guidelines, restricted stock units (whether vested or unvested) owned by a director are included. The following table shows information about each non-employee director’s status with respect to the ownership guidelines at February 28, 2015:

 

Director		Shares Included Under Guidelines				Value (1) in Excess of Guidelines
		#		Value (1)
Nancy E. Cooper (2)		9,944		$506,168		$81,168
Gregory E. Ebel (2)		9,584		$478,480		$53,480
Timothy S. Gitzel		5,141		$245,423		(2)
William R. Graber		25,283		$645,085		$220,085
Denise C. Johnson		3,144		$154,999		(2)
Emery N. Koenig		16,753		$868,433		$443,433
Robert L. Lumpkins		32,824		$1,339,947		$914,947
William T. Monahan		31,871		$956,561		$531,561
James L. Popowich		17,844		$685,373		$260,373
David T. Seaton		13,079		$668,052		$243,052
Steven M. Seibert		21,167		$809,961		$384,961

 

(1) Under our stock ownership guidelines for non-employee directors, restricted stock units are valued at the date of grant and other shares are valued at their date of purchase.

(2) Director has not yet completed five years of service. Ms. Cooper, Mr. Ebel, Mr. Gitzel and Ms. Johnson will complete five years of service on October 6, 2016, October 4, 2017, October 3, 2018 and May 15, 2019, respectively, if they remain as directors of Mosaic.

Our stock ownership guidelines for executive officers, including executive officers who are directors, are described under “Stock Ownership Guidelines” on page 63 in our Compensation Discussion and Analysis.

CORPORATE GOVERNANCE

Our Board oversees the management of our business and determines overall corporate policies. The Board’s primary responsibilities are directing our fundamental operating, financial and other corporate strategies and evaluating the overall effectiveness of our management. Prior to the 2014 Annual Meeting, our Board was divided into three classes and members of each class were elected to serve three-year terms, with the term of office for each class ending in consecutive years. In accordance with our Bylaws and our Restated Certificate of Incorporation, as amended by our stockholders at the 2014 Annual Meeting, our Board is declassified and directors are nominated for election for a one-year term.

Board Independence

The New York Stock Exchange (“NYSE”) listing standards require our Board to formally determine each year which directors of Mosaic are independent. In addition to meeting the minimum standards of independence adopted by the NYSE, we do not consider a director “independent” unless our Board affirmatively determines that the director has no material relationship with us that would prevent the director from being considered independent.

Our Board has adopted Director Independence Standards setting forth specific criteria by which the independence of our directors will be determined. These criteria include restrictions on the nature and extent of any affiliations directors and their immediate family members may have with us, our independent accountants, or

 

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any commercial or non-profit entity with which we have a relationship. A copy of our Director Independence Standards is available on our website at www.mosaicco.com under the “Investors – Corporate Overview – Governance Documents” caption.

Our Board, as recommended by the Corporate Governance and Nominating Committee, has determined that our directors, Nancy E. Cooper, Gregory L. Ebel, Timothy S. Gitzel, William R. Graber, Denise C. Johnson, Emery N. Koenig, Robert L. Lumpkins, William T. Monahan, James L. Popowich, David T. Seaton and Steven M. Seibert, are each “independent” under the NYSE rules and our Director Independence Standards and have no material relationships with us that would prevent the directors from being considered independent. In making its independence recommendations, our Corporate Governance and Nominating Committee reviewed all of our directors’ relationships with us based primarily on a review of each director’s response to questions regarding employment, business, familial, compensation and other relationships with us and our management. James T. Prokopanko is not independent because he is our current President and Chief Executive Officer.

Board Oversight of Risk

It is the role of management to operate the business, including managing the risks arising from our business, and the role of our Board to oversee management’s actions.

Management’s ERM Committee assists us in achieving our business objectives by creating a systematic approach to anticipate, analyze and review material risks. The ERM Committee consists of a cross-functional team of our executives and senior leaders. The ERM Committee has the responsibility for establishing the context of our ERM process, as well as identifying, analyzing, evaluating and ensuring that appropriate protocols are in place to mitigate the risks.

Our Board is responsible for oversight of our management of enterprise risk. Our Board provides guidance with regard to our enterprise risk management practices; our strategy and related risks; and significant operating, financial, legal, regulatory, legislative and other risk-related matters relating to our business. As an integral part of the Board’s oversight of enterprise risk management, the Board has directed the ERM Committee to review its activities with the full Board on a periodic basis, and the Board monitors management’s processes, reviews management’s risk analyses and evaluates our ERM performance. In addition, regularly-scheduled meetings of our Board from time to time include an in-depth review of one or more significant enterprise risk focus topics.

Pursuant to their respective charters, committees of our Board assist in the Board’s oversight of risk:

 

•

In accordance with its charter and NYSE governance requirements, our Audit Committee regularly reviews with management, our Vice President – Risk Advisory and Assurance Services, and our independent registered public accounting firm, the quality and adequacy of our system of internal accounting, financial, disclosure and operational controls, including policies, procedures and systems to assess, monitor and manage business risks, as well as compliance with the applicable provisions of the Sarbanes-Oxley Act of 2002, and discusses with management and our Vice President – Risk Advisory and Assurance Services policies regarding risk assessment and risk management.

 

•

Our Environmental, Health, Safety and Sustainable Development (“EHSS”) Committee oversees management’s plans, programs and processes to evaluate and manage EHSS risks to our business, operations and products; the quality of management’s processes for identifying, assessing, monitoring and managing the principal EHSS risks in our businesses; and management’s objectives and plans (including means for measuring performance) for implementing our EHSS risk management programs.

 

•

Our Corporate Governance and Nominating Committee oversees succession planning for our CEO and oversees from a corporate governance perspective the manner in which the Board and its committees review and assess enterprise risk.

 

•

Our Compensation Committee oversees risks related to our executive and employee compensation policies and practices, as well as succession planning for senior management other than our CEO.

 

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Each of these Committees reports to the full Board on significant matters discussed at their respective meetings, including matters relating to risk oversight.

Committees of the Board of Directors

Our Board has four standing committees:

 

•

Audit;

 

•

Compensation;

 

•

Corporate Governance and Nominating; and

 

•

Environmental, Health, Safety and Sustainable Development.

Each of these Committees plays a significant role in the discharge of our Board’s duties and obligations. Each of the committees routinely meets in private session without the CEO or other members of management in attendance. Each of the four committees operates under a written charter. The charters are available on our website at www.mosaicco.com under the “Investors – Corporate Overview – Governance Documents” caption.

 

Audit Committee
Five Members:
•   Nancy E. Cooper, Chair •   Gregory L. Ebel •   Timothy S. Gitzel •   William R. Graber •   William T. Monahan				The Board has determined that all of the Audit Committee’s members meet the independence and experience requirements of the NYSE and the SEC.   The Board has further determined that each of Nancy E. Cooper, Gregory L. Ebel and William R. Graber qualifies as an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K promulgated by the SEC.
Meetings During 2014: Eight

Key Responsibilities: •    appointment, retention, compensation and oversight of the work of our independent registered public accounting firm;   •    reviewing the scope and results of the annual independent audit and quarterly reviews of our financial statements with the independent registered public accounting firm, management and internal auditor;   •    reviewing the internal audit plan and audit results;   •    reviewing the quality and adequacy of internal control systems with management, the internal auditor and the independent registered public accounting firm;   •    reviewing with the independent registered public accounting firm and management the application and impact of new and proposed accounting rules, regulations, disclosure requirements and reporting practices on our financial statements and reports; and   •    reviewing the Audit Committee Report included in this Proxy Statement.

 

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Compensation Committee
Four Members:
•       William T. Monahan, Chair •       Gregory L. Ebel •       James L. Popowich •       David T. Seaton				None of our Compensation Committee’s members are officers or employees of ours, and all of its members, including its Chair, meet the independence requirements of the NYSE and the SEC.
Meetings During 2014: Seven

Key Responsibilities: Assists the Board in oversight of compensation of our executives and employees and other significant human resource strategies and policies. This includes, among other matters, the principles, elements and proportions of total compensation to our CEO as well as other executive officers and key employees, the evaluation of our CEO’s performance and broad-based compensation, benefits and rewards and their alignment with our business and human resource strategies. The responsibilities of our Compensation Committee include, among others:   •  Chief Executive Officer Compensation:   Ø   reviewing and recommending to our independent directors the amount and mix of direct compensation paid to our CEO; and   Ø   establishing the amount and mix of executive benefits and perquisites for our CEO.   •    Other Executive Officers’ Compensation. Establishing the amount and nature of direct compensation and benefit programs for our other executive officers.   •     Severance, Change-in-Control and Other Termination Arrangements:   Ø   reviewing and recommending to our independent directors the levels of compensation under severance, change-in-control and other termination arrangements for our CEO;   Ø   establishing any change-in-control and other termination arrangements for our other executive officers; and   Ø   adopting appropriate forms of agreements reflecting such arrangements.   •     Incentive Plans:   Ø   reviewing and recommending to our Board performance goals and associated payout percentages under short- and long-term incentive plans for executive officers;   Ø   recommending to our independent directors awards under these plans to our CEO; and   Ø   approving awards under these plans to our other executive officers.   •    Other Benefit Plans. Overseeing the design and administration of our stock option, incentive and other executive benefit plans.   Also oversees:   •    our public disclosure of compensation matters in our proxy statements;   •    our solicitation of stockholder approval of compensation matters, including the advisory Say-on-Pay Proposal included in this Proxy Statement as Proposal No. 3;   •    risks related to our executive and employee compensation policies and practices, including the design of executive and employee compensation programs to mitigate financial, stockholder, reputation and operations risks; and   •    succession planning for senior management other than the CEO and related risks.

 

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		Additional information about our Compensation Committee’s responsibilities and its processes and procedures for consideration and determination of executive compensation is included in our Compensation Discussion and Analysis, under the titles “Compensation Philosophy and Objectives,” “Executive Compensation Setting Process and Participants,” and “Elements of Compensation.”

Delegations of Authority:
•    Our Compensation Committee’s charter provides that it may delegate its authority to a subcommittee of its members.   •    Our Compensation Committee also may delegate its authority when authorized to do so by one of our compensation plans. Our 2014 Stock and Incentive Plan and 2004 Omnibus Stock and Incentive Plan each expressly permits the committee to delegate authority as it deems appropriate.				Our Compensation Committee has from time to time delegated authority to its Chair to review and approve particular matters, including services and fees of its independent compensation consultant.   Our Compensation Committee has also from time to time delegated to certain members of senior management the authority to grant long-term equity awards within prescribed parameters to certain employees. The employees to whom such awards have been made have not included any of our executive officers.

 

Corporate Governance and Nominating Committee
Five Members:
•       Robert L. Lumpkins, Chair •       Nancy E. Cooper •       Timothy S. Gitzel •       William R. Graber •       Steven M. Seibert
		All of the members of the Corporate Governance and Nominating Committee are independent.

Meetings During 2014: Four
Key Responsibilities:   •    recommending to the Board a set of corporate governance principles and providing ongoing oversight of governance;   •    recommending to the Board nominees for director;   •    recommending to the Board all committee assignments;   •    developing a compensation and benefits program for the Board;   •    overseeing the Board and committee annual evaluation process;   •    overseeing from a corporate governance perspective the manner in which the Board and its Committees review and assess enterprise risk;   •    reviewing and approving certain transactions involving related persons; and   •    reviewing the succession plan for the CEO.

 

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Environmental, Health, Safety and Sustainable Development Committee

Five Members: •       Steven M. Seibert, Chair •       Denise C. Johnson •       Emery N. Koenig •       James L. Popowich •       David T. Seaton

Meetings During 2014: Four

Key Responsibilities:   Provides oversight of our environmental, health, safety and sustainable development (“EHSS”) strategic vision and performance, including the safety and health of employees and contractors; environmental performance; the systems and processes designed to manage EHSS risks, commitments, public responsibilities and compliance; relationships with and impact on communities with respect to EHSS matters; public policy and advocacy strategies related to EHSS issues; and achieving societal support of major projects. Its responsibilities include, among others:   •    overseeing the effectiveness of management’s systems, policies and processes that support our EHSS goals, commitments and compliance obligations;   •    conducting an annual environment, health and safety management system review;   •    reviewing with management compliance with environmental, health and safety laws, and pending or threatened environmental, health and safety proceedings;   •    overseeing management’s responses to significant emerging EHSS issues;   •    reviewing sustainability issues, including product stewardship;   •    reviewing our interactions relating to EHSS matters with communities, customers and other key stakeholders; and   •    overseeing the management of EHSS risks.

Other Policies and Practices Relating to the Board of Directors

Board Leadership Structure

As provided in our Corporate Governance Guidelines, our Board retains the right to exercise its discretion in combining or separating the offices of Chairman and CEO. Our Board believes that this issue is part of the succession planning process and that it is in the best interests of Mosaic for the Board to make a determination when it elects a new CEO.

At the present time, we have separated these two offices, with Mr. Lumpkins serving as our non-executive Chairman and Mr. Prokopanko serving as our CEO. In continuing the separation of the offices of Chairman and CEO, our Board has taken into account a number of factors, including:

 

•

Separating these positions allows our non-executive Chairman to focus on the Board’s role of providing advice to, and independent oversight of, management; and

 

•

The time and effort our CEO needs to devote to the management and operation of Mosaic, and the development and implementation of our business strategies.

In his role as non-executive Chairman, Mr. Lumpkins, among other things:

 

•

Leads the Board’s process for assessing the performance of the CEO;

 

•

Acts as a liaison between the Board and senior management;

 

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•

Establishes, prior to the commencement of each year and in consultation with the Corporate Governance and Nominating Committee, a schedule of agenda subjects to be discussed during the year;

 

•

Establishes the agenda for each regular Board meeting;

 

•

Presides over each Board meeting; and

 

•

Presides over private sessions of the non-management directors at regular Board meetings.

Evaluation of Board Performance

In order to continue to evaluate and improve the effectiveness of the Board, under the guidance of the Corporate Governance and Nominating Committee, our directors annually evaluate the Board’s performance, including the performance of each Board committee. The evaluation process includes a survey of the individual views of directors, a summary of which is then shared with the Board, as well as individual peer review. The Corporate Governance and Nominating Committee annually evaluates its own performance as well as the performance of the Board as a whole, including peer review, and each other Board committee annually evaluates its own performance.

Private Sessions of Non-Management Directors

The non-management directors meet in private session at each regular Board meeting without the CEO or other members of management in attendance. Our Chairman of the Board, Robert L. Lumpkins, presides at these sessions. Similarly, all Board committees regularly meet in executive session without management. In addition, our independent directors meet separately in executive session without the presence of any other non-management directors at least annually.

Compensation of Directors

Non-Employee Directors. The Corporate Governance and Nominating Committee reviews our director compensation program on an annual basis to ensure that it is competitive with market practices. Although matters of director compensation ultimately are the responsibility of the full Board, the Corporate Governance and Nominating Committee evaluates director compensation levels, makes recommendations regarding the structure of director compensation, and develops a director pay philosophy that is aligned with the interests of our stockholders. Although our director compensation program is reviewed annually, our Corporate Governance and Nominating Committee expects that, absent special circumstances, director compensation levels would be adjusted no more frequently than every two years.

As provided in our Corporate Governance Guidelines, our Corporate Governance and Nominating Committee, in making recommendations regarding director compensation, is guided by three goals:

 

•

Compensation should fairly pay directors for work required for a company of our size and scope;

 

•

Compensation should align directors’ interests with the long-term interests of stockholders; and

 

•

The structure of compensation should be simple, transparent and easy for our stockholders to understand.

In the course of conducting its review of director compensation, the Corporate Governance and Nominating Committee from time to time reviews various formal studies regarding director compensation practices at public companies, as well as a variety of other data sources. Our Corporate Governance and Nominating Committee also has the sole authority to select, retain and terminate an independent compensation consultant and to approve the consultant’s fees and other retention terms. In addition, our Corporate Governance and Nominating Committee routinely seeks information from management on matters for consideration by our Corporate Governance and Nominating Committee. Our Vice President, General Counsel and Corporate Secretary participates in meetings of our Corporate Governance and Nominating Committee but is not generally present during private sessions.

No changes to our director compensation policy were made in 2014. We have included a description of our non-employee director compensation under “Director Compensation” on page 30.

 

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Employee Directors. Employee directors (currently, Mr. Prokopanko) receive no fees or remuneration for service on the Board or any committee of the Board.

Attendance

Directors are expected to regularly attend Board meetings and meetings of committees on which they serve and to spend the time necessary to properly discharge their responsibilities. In addition to attendance at Board and committee meetings, directors discharge their responsibilities throughout the year by personal meetings and telephone contact with our executive officers and others regarding our business and affairs. Our full Board held five regular and three special meetings during 2014. Each director was present for at least 87% of the aggregate number of meetings of the Board and committees of the Board of which such director was a member that occurred during 2014 and subsequent to the election of such director to the Board.

All directors and director nominees for election or re-election to the Board at an Annual Meeting of Stockholders are expected to attend that annual meeting. Last year, all of our then serving directors and our director nominee attended the 2014 Annual Meeting.

Majority Vote Standard for Election of Directors

Our Bylaws provide that in uncontested elections a nominee for director will be elected to our Board if the number of votes cast “FOR” the nominee’s election exceeds the number of votes cast “AGAINST” that nominee’s election. The vote standard for directors in a contested election (an election in which the number of nominees for director is greater than the number of directors to be elected) is a plurality of the votes cast at the meeting.

In accordance with our Corporate Governance Guidelines, our Board will nominate for election or re-election as a director only candidates who agree to tender, promptly following their failure to receive the required vote for election or re-election at the next meeting at which they would face election or re-election, an irrevocable resignation letter that will be effective upon acceptance by our Board. In addition, our Board will fill director vacancies and new directorships only with candidates who agree to tender the same form of resignation letter, promptly following their appointment to our Board.

Our Corporate Governance Guidelines further provide that if an incumbent director fails to receive the required vote for re-election, our Corporate Governance and Nominating Committee will act within 90 days after certification of the stockholder vote to determine whether to accept the director’s resignation, and will submit a recommendation for prompt consideration by our Board. Our Corporate Governance and Nominating Committee and our Board may consider any factors they deem relevant in deciding whether to accept a director’s resignation. Our Board expects the director whose resignation is under consideration to abstain from participating in any decision regarding his or her resignation.

Thereafter, our Board will promptly disclose its decision and decision-making process regarding whether to accept the director’s resignation offer (and the reason(s) for rejecting the resignation offer, if applicable) in a Form 8-K furnished to the SEC.

If directors constituting less than a quorum of the members of our Corporate Governance and Nominating Committee receive the required vote in favor of their elections in the same election, then those independent directors who did receive the required vote will appoint a committee amongst themselves to consider the resignation offers and recommend to our Board whether to accept any or all of them. Furthermore, if the only directors who received the required vote in the same election constitute three or fewer directors, all independent directors may participate in the decision regarding whether to accept any or all of the tendered resignations.

Each director nominee named in this Proxy Statement has offered to tender an irrevocable resignation as a director in accordance with our Corporate Governance Guidelines, which resignation will become effective if he or she fails to receive the required vote for election at the annual meeting and our Board accepts his or her resignation.

 

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Retirement from the Board

The Board has a retirement policy which provides that a non-employee director will voluntarily retire from the Board by submitting a letter of resignation to the Chairman to be effective not later than the date on which our Annual Meeting of Stockholders is to be held during the calendar year in which the non-employee director has attained or will attain the age of 72. A director who meets this criteria shall submit his or her letter of resignation without regard to the term for which he or she was previously elected to the Board. In addition, it is the policy of the Board that employee-directors (other than the CEO) resign from the Board upon their retirement from Mosaic. The Board also has a policy that any non-employee director or the CEO of Mosaic submit his or her resignation if he or she has a material change in employment, is the subject of media attention that reflects unfavorably on his or her continued service on the Board or has an unresolved conflict of interest with Mosaic. The Board will accept or reject any of the foregoing resignations based on the best interests of Mosaic.

Communications with the Board

The Board believes that accessibility to the members of our Board is an important element of our corporate governance practices and, pursuant to the recommendation of the Corporate Governance and Nominating Committee, has adopted a policy regarding communications with our Board. The policy sets forth the methods of communication with the Board as a whole and with individual directors. Pursuant to the policy, our Vice President, General Counsel and Corporate Secretary serves as confidential intermediary between stockholders or other interested parties and our Board.

Stockholders and interested parties are offered several methods for communication with the Board, including via e-mail and through a toll-free telephone number monitored by the office of our Vice President, General Counsel and Corporate Secretary. They may:

 

•

contact our Board via our toll-free telephone number at (877) 261-2609 inside the United States, or call collect to (503) 726-3224 outside the United States;

 

•

send written communication in care of our Vice President, General Counsel and Corporate Secretary at The Mosaic Company, Atria Corporate Center, Suite E490, 3033 Campus Drive, Plymouth, Minnesota 55441;

 

•

send e-mail messages to our Board, including the presiding director of our non-management directors or the non-management directors as a group, to directors@mosaicco.com; or

 

•

send communications relating to accounting, internal accounting controls or auditing matters by means of e-mail messages to auditchair@mosaicco.com.

Any such communications by employees may be made on a confidential and/or anonymous basis. Stockholders making such communication are encouraged to state that they are security holders and provide the exact name in which their shares are held and the number of shares held.

It is the responsibility of our Vice President, General Counsel and Corporate Secretary to process in a timely manner each communication from stockholders or other interested parties and to forward such communications:

 

•

for communications addressed to the Board as a whole, to the Chairman of the Board;

 

•

for communications addressed to the presiding director of the non-management directors’ private sessions or to the non-management directors as a group, to the director designated by the Corporate Governance and Nominating Committee;

 

•

for communications addressed to a committee of the Board, to the chair of such committee;

 

•

for communications addressed to an individual director, to such named director; and

 

•

for communications relating to accounting, internal accounting controls or auditing matters, to the members of the Audit Committee.

 

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“Spam” such as advertising, solicitations for business, requests for employment or requests for contributions will not be forwarded.

Our Vice President, General Counsel and Corporate Secretary, or a member of his staff under his direction, may handle in his discretion any communication that is described within any of the following categories:

 

•

routine questions, complaints and comments that management can appropriately address;

 

•

routine invoices, bills, account statements and related communications that management can appropriately address;

 

•

surveys and questionnaires; and

 

•

requests for business contacts or referrals.

In that case, he will provide a copy of the original communication to the Chairman of the Board (or to the Chair of the Corporate Governance and Nominating Committee) and advise of any action taken with respect to the communication. Our Vice President, General Counsel and Corporate Secretary, or a member of his staff, will forward any communications not clearly addressed as set forth above to the Chairman of the Board for handling.

Our Vice President, General Counsel and Corporate Secretary, or a member of his staff under his direction, will maintain a summary log of all communications (other than those excluded as described above), and on a periodic basis will provide to the Chairman of the Board (or to the Chair of the Corporate Governance and Nominating Committee) a copy of all log entries made (to the extent any communications have been received) since the immediately preceding report was provided. Our Vice President, General Counsel and Corporate Secretary will promptly provide to any director, upon his or her request, a copy of any part, or all, of the log.

Any director receiving such communications may, at his or her discretion, forward copies of any such communications to any other directors, any Board committee, the other non-employee directors or the entire Board for information and/or action as deemed appropriate.

The full text of our policy regarding stockholder communications with the Board is available on our website at www.mosaicco.com under the “Investors – Corporate Overview – Governance Documents” caption.

Policy and Procedures Regarding Transactions with Related Persons

Our Board, upon the recommendation of the Corporate Governance and Nominating Committee, has adopted a Related Person Transactions Approval Policy. A copy of the policy is available on our website at www.mosaicco.com under the “Investors – Corporate Overview – Governance Documents” caption.

This policy delegates to our Corporate Governance and Nominating Committee responsibility for reviewing, approving or ratifying transactions with “related persons” that are required to be disclosed under the rules of the SEC. Under the policy, a “related person” includes any director, executive officer or 5% stockholder and members of their immediate family.

Our Related Person Transactions Approval Policy applies to transactions that involve a related person where we are a participant and the amount involved exceeds, or is reasonably expected to exceed, $120,000, and in which the related person otherwise has a direct or indirect material interest, as well as any amendment or modification to an existing related person transaction.

No director may participate in any discussion or approval of a related person transaction for which he or she is a related person, except that the director is required to provide to the Corporate Governance and Nominating Committee all material information concerning the related person transaction as may be requested by the

 

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committee. Any related person transaction that is not approved or ratified, as the case may be, will be voided, terminated or amended, or such other actions will be taken in each case as determined by the Corporate Governance and Nominating Committee so as to avoid or otherwise address any resulting conflict of interest.

Related person transactions under the policy do not include:

 

•

Any transaction where the related person’s interest derives solely from the fact that he or she serves as a director or officer of a not-for-profit organization or charity that receives donations from us in accordance with a matching gift program of ours that is available on the same terms to all of our employees;

 

•

Indemnification payments made pursuant to our Certificate of Incorporation or Bylaws or pursuant to any agreement between us and the related person;

 

•

Any transaction that involves compensation to a director (if such arrangement has been approved by our Board) or executive officer (if such arrangement has been approved, or recommended to the Board for approval, by the Compensation Committee of our Board or is otherwise available generally to all of our salaried employees) in connection with his or her duties to us, including the reimbursement of business expenses incurred in the ordinary course in accordance with our expense reimbursement policies that are applicable generally to all salaried employees; or

 

•

Any transaction entered into in the ordinary course of business pursuant to which the related person’s interest derives solely from his or her service as a director or employee (including an executive employee) of another corporation or organization that is a party to the transaction and (i) the related person does not receive directly any compensation or other direct material benefit of any kind from the other corporation or organization due, in whole or in part, to the creation, negotiation, approval, consummation or execution of the transaction, and (ii) the related person is not personally involved, in his or her capacity as a director or employee of the other corporation or organization, in the creation, negotiation or approval of the transaction.

In determining whether to approve or ratify a related person transaction, the Corporate Governance and Nominating Committee will consider, among others, the following factors to the extent it deems relevant:

 

•

Whether the terms of the related person transaction are fair to us and on terms at least as favorable as would apply if the other party was not or did not have an affiliation with a director, executive officer or 5% stockholder of ours;

 

•

Whether there are demonstrable business reasons for us to enter into the related person transaction;

 

•

Whether the related person transaction could impair the independence of a director under our Director Independence Standards;

 

•

Whether the related person transaction would present an improper conflict of interest for any of our directors or executive officers, taking into account the size of the transaction, the overall financial position of the director or executive officer, the direct or indirect nature of the interest of the director or executive officer in the transaction, the ongoing nature of any proposed relationship, and any other factors our Corporate Governance and Nominating Committee deems relevant; and

 

•

Whether the related person transaction is permitted under the covenants pursuant to our material debt agreements.

Director Education Policy

Our Board believes that our stockholders are best served by a board of directors comprised of individuals who are well versed in modern principles of corporate governance and other subject matters relevant to board

 

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service. Our Board has adopted a Director Education Policy that encourages all directors to pursue ongoing education and development studies on topics that they deem relevant given their individual backgrounds and committee assignments on the Board. In order to facilitate ongoing education, our management provides to our directors on a periodic basis pertinent articles and information relating to our business and our competitors and to corporate governance and regulatory issues, as well as presentations by subject matter experts on new legal and regulatory requirements. We also maintain a membership for each of our directors in an organization dedicated to corporate governance and ongoing education, and fund the reasonable costs of attending director education programs. Directors serving on multiple boards are encouraged to obtain pro rata reimbursement of their director education expenses from each corporation that they serve. Prior approval for attendance is obtained from the chair of the Corporate Governance and Nominating Committee in each case where a director intends to seek reimbursement of the cost of attendance.

Code of Business Conduct and Ethics

Our Board and management are dedicated to sound corporate governance principles. Our Code of Business Conduct and Ethics (the “Code of Ethics”) is a statement of our high standards for ethical and legal compliance, and it governs the manner in which we conduct our business. All of our employees, officers, directors, agents and representatives, including consultants, are expected to comply with our Code of Ethics. Each of our directors and officers, as well as over 3,300 other employees, is requested annually to certify compliance with the Code of Ethics. A copy of our Code of Ethics is available on our website at www.mosaicco.com under the “Investors – Corporate Overview – Governance Documents” caption.

 

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DIRECTOR COMPENSATION

Non-Employee Directors

The director compensation policy in effect for 2014 provides for cash compensation to non-employee directors as follows:

 

•

an annual cash retainer of $180,000 to our Chairman of the Board and $90,000 to each other director;

 

•

an annual cash retainer of $20,000 to the Chair of our Audit Committee;

 

•

an annual cash retainer of $15,000 to the Chair of our Compensation Committee; and

 

•

an annual cash retainer of $10,000 to each director who serves as Chair of our Corporate Governance and Nominating Committee or Environmental, Health, Safety and Sustainable Development Committee.

In addition, the policy in effect during 2014 provided for a single annual grant of restricted stock units, valued at $260,000 for our Chairman of the Board and $155,000 for each other non-employee director. Additional information about our annual grants of restricted stock units to directors is included in note (4) to the Non-Employee Director Compensation Table below.

We also reimburse our directors for travel and business expenses incurred in connection with meeting attendance. We do not pay meeting fees, and we do not provide any perquisites to our non-employee directors except for reimbursement of travel expenses when spouses attend Board functions.

Employee Directors

Directors who are employees receive no director fees or other separate compensation for service on the Board or any committee of the Board for the period during which they are employees. During 2014, James T. Prokopanko, our current CEO, was both an employee and a director. All of our compensation to our CEO for 2014 is set forth under “Executive Compensation Tables” beginning on page 64.

The following table and accompanying narrative and notes provide information about our compensation for service during 2014 by directors who were not employees at any time during 2014.

2014 Non-Employee Director Compensation Table

 

Name		Fees Earned or Paid in Cash ($) (1)(2)		Stock Awards ($) (3)(4)(5)		All Other Compensation ($) (6)		Total ($)
Nancy E. Cooper		110,000		154,999		7,197		272,196
Gregory L. Ebel		90,000		154,999		—		244,999
Timothy S. Gitzel		90,000		154,999		—		244,999
William R. Graber		90,000		154,999		7,197		252,196
Denise C. Johnson		56,621		154,999		—		211,620
Emery N. Koenig		90,000		154,999		7,197		252,196
Robert L. Lumpkins (7)		190,000		260,008		12,073		462,081
William T. Monahan		105,000		154,999		7,197		267,196
James L. Popowich		90,000		154,999		7,197		252,196
David T. Seaton		90,000		154,999		7,197		252,196
Steven M. Seibert		100,000		154,999		7,197		262,196

 

(1)	Reflects the aggregate amount of the cash retainers paid for 2014.

 

(2)

Our unfunded non-qualified deferred compensation plan permits a director to elect to contribute up to 100% of the director’s fees on a tax-deferred basis until distribution of the participant’s plan balance. A participant’s balance accrues gains or losses at rates equal to those on various investment alternatives selected by the participant. The available investment alternatives are the same as are available for selection

 

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by participants as investments under the Mosaic Investment Plan, a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code (“Code”), except that our Common Stock is excluded. Because the rate of return is based on actual investment measures, no above-market earnings are paid. One director participated in the non-qualified deferred compensation plan during 2014.

 

Our non-qualified deferred compensation plan provides that our Board, as constituted immediately before a change-in-control (as defined in the plan), may elect to terminate the plan. A termination would result in lump-sum payments to participants of their account balances under the plan.

 

(3)	Reflects the grant date fair value for restricted stock units granted to directors, determined in accordance with Accounting Standards Codification (“ASC”) 718. The assumptions used in our valuation of these awards are discussed in note 18 to our audited financial statements for 2014.

 

(4)	The date of our annual grant of restricted stock units to non-employee directors in 2014 was May 15, 2014, the date of our 2014 Annual Meeting.

 

We establish the number of shares subject to the grant of restricted stock units by dividing the target value of the grant by the closing price of a share of our Common Stock on the date of grant.

 

The restricted stock units granted in 2014 to non-employee directors will vest completely on the date of the 2015 Annual Meeting. If a director ceases to be a director prior to vesting, the director will forfeit the restricted stock units except in the event of death (in which case the restricted stock units will vest immediately) or unless otherwise determined by our Corporate Governance and Nominating Committee. For vested restricted stock units, Common Stock will be issued immediately, in the event of the director’s death, or on the second anniversary of the vesting date, except that restricted stock units of a director who is removed for cause will be forfeited. The restricted stock unit awards granted in 2014 to non-employee directors include dividend equivalents which provide for payment of an amount equal to the dividends paid on an equivalent number of shares of our Common Stock and which will be paid at the same time as we issue shares of our Common Stock after the awards vest. A director may elect that up to half of the restricted stock units granted to the director in 2014 be paid in cash rather than shares of Common Stock.

 

(5)	The following table shows the number of restricted stock units held at December 31, 2014 by each director who was not an employee at any time during 2014:

 

Director				Restricted Stock Units Held at December 31, 2014 (#)		Vesting Date  (a)
Robert L. Lumpkins				4,719		10/4/2013
				3,350		5/15/2014
				5,274		(b)
Each of Nancy E. Cooper, Gregory L. Ebel, William R. Graber, Emery N. Koenig, William T. Monahan, James L. Popowich, David T. Seaton and Steven M. Seibert				2,813 1,997 3,144		10/4/2013 5/15/2014 (b)
Timothy S. Gitzel				1,997		5/15/2014
				3,144		(b)
Denise C. Johnson				3,144		(b)

 

(a)

These restricted stock units vest or vested on the earlier of (a) the date indicated in this column or (b) subject to the approval of the Corporate Governance and Nominating Committee in its sole discretion, a director’s departure from the Board, for reasons other than removal for cause, before the one year anniversary of the date of grant. See note (4) above with respect to issuance of Common Stock following the vesting date.

 

(b)

These restricted stock units vest on the date of the 2015 Annual Meeting.

 

(6)	Reflects dividend equivalent payments for 2014. Dividend equivalents are unfunded, do not bear interest and are not paid unless the shares that are subject to the restricted stock unit are issued.

 

(7)	Mr. Lumpkins elected to defer 100% of his fees earned or paid in cash pursuant to the non-qualified deferred compensation plan described in note (2) above.

 

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EXECUTIVE COMPENSATION

 

 

 

TABLE OF CONTENTS

 

 

 

 

 

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Compensation Discussion and Analysis

This section explains the material elements of our executive compensation program for our CEO and our other “Named Executive Officers” whose compensation is in the “Executive Compensation Tables” section beginning on page 64, and should be read in conjunction with that section. Our Named Executive Officers for 2014 are:

 

•

James T. Prokopanko, President and Chief Executive Officer

 

•

Richard L. Mack, Executive Vice President and Chief Financial Officer (effective June 1, 2014)

 

•

Lawrence W. Stranghoener, former Executive Vice President and Chief Financial Officer (prior to June 1, 2014); Interim Chief Executive Officer (June 1, 2014 through August 3, 2014); and Executive Vice President – Strategy and Business Development (August 4, 2014 until retirement on January 23, 2015)

 

•

James (“Joc”) C. O’Rourke, Executive Vice President – Operations and Chief Operating Officer

 

•

Richard N. McLellan, Senior Vice President – Commercial

 

•

Gary (“Bo”) N. Davis, Senior Vice President – Phosphate Operations

 

 

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These factors help provide our Compensation Committee with a comprehensive understanding of how total compensation for each executive officer relates to the external value of the position (as determined by the use of compensation market data) and the internal value of the position (as determined by our Compensation Committee). The factors are not given specific weightings by our Compensation Committee but contribute to a holistic view of the comprehensive set of information our Compensation Committee has available in exercising its judgment about compensation decisions.

We believe that linking compensation to the achievement of the business priorities that our Board has established and to the market price of our Common Stock best serves stockholder interests and ties compensation to changes in stockholder value. We believe that this occurs both by motivating our key executives to achieve those business priorities and by attracting and retaining key executives by extending a total compensation opportunity with a strong risk and reward relationship. We also seek to design our employee compensation policies and practices so that they are not reasonably likely to have a material adverse effect on us, as we discuss in more detail in the “Compensation Risk Analysis” on page 64.

Executive Compensation Program

Our executive compensation program is comprised of a mix of elements designed to work together as parts of a balanced total compensation package to further our compensation objectives. The elements of our executive compensation program include:

 

•

direct compensation in the form of base salary, short-term incentives and long-term incentives;

 

•

special awards to address specific circumstances; and

 

•

indirect compensation in the form of standard employee benefit programs, limited perquisites and other special executive benefits, matching charitable contributions and severance and change-in-control agreements.

In making compensation decisions, our Compensation Committee (together with our other independent directors, in the case of our CEO) exercises its judgment on the overall level of compensation provided by this total compensation package rather than on individual elements of compensation in isolation from each another.

We discuss the separate elements of our Named Executive Officers’ total compensation in more detail under “Elements of Compensation” on page 52.

2014 Compensation Decisions

Our Compensation Committee (together with our other independent directors, in the case of our CEO) establishes the target levels of direct compensation – consisting of base salary, short-term incentive awards and annual long-term incentive awards – for the Named Executive Officers in a manner consistent with our executive compensation philosophy, based upon their judgment about both internal and external factors and a desired mix of total compensation, as discussed above under “Compensation Philosophy and Objectives” beginning on page 39. As a result of our transition to a December 31 fiscal year end, for 2014 these decisions were made in February 2014 and are expected to generally be made in March of each year going forward. Prior to 2014, these decisions were generally made in July of each year. Accordingly, the decisions with respect to the target levels of direct compensation for the 2013 Stub Period were made in July 2013, and the decisions for fiscal 2013 and fiscal 2012 were made in July 2012 and 2011, respectively.

Individual considerations with respect to the target direct compensation decisions made in February 2014 for each of the Named Executive Officers Period are discussed below. For comparative purposes, the levels of base salary and short-term incentive awards shown below for July 2013 are set forth on an annualized basis that reflects a full twelve months although actual base salary and target short-term incentive awards for the 2013 Stub Period were prorated to 7/12ths of the amounts shown to reflect the seven month length of the 2013 Stub Period. Because we made our annual long-term incentive awards only once each year both before and after our transition to a December 31 fiscal year end, the actual long-term incentive awards shown in the tables and charts below were not prorated as a result of our change in fiscal year end.

 

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James T. Prokopanko, President and Chief Executive Officer

 

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Richard L. Mack, Executive Vice President and Chief Financial Officer (effective June 1, 2014)

 

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Lawrence W. Stranghoener, former Executive Vice President and Chief Financial Officer

 

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James (“Joc”) C. O’Rourke, Executive Vice President – Operations and Chief Operating Officer

 

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Richard N. McLellan, Senior Vice President – Commercial

 

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Gary (“Bo”) N. Davis, Senior Vice President – Phosphate Operations

 

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Executive Compensation Setting Process and Participants

Our executive compensation program is the result of a continuing interaction between our Compensation Committee and management. It is the role of management to operate the business and the role of our Board and Compensation Committee to oversee management’s actions. The table below lists the primary roles of the key participants in our executive compensation setting process:

 

Participants		Key Roles in Named Executive Officer Compensation Process
Board
Compensation Committee		Executive Compensation Oversight:
		•     Assist Board in oversight of executive and employee compensation and other significant human resource strategies and policies. •     Establish compensation philosophy. •     Establish principles, elements and proportions of total executive compensation, including for CEO. •     Evaluate broad-based compensation, benefits and rewards. •     Oversee design and administration of executive compensation programs. •     Recommend to Board overall performance goals under incentive plans.
		CEO Compensation:
		•     Annually recommend to Board corporate goals and objectives relevant to the compensation of our CEO. •     Facilitate Board processes for approval of mix and amount of CEO direct compensation. •     Approve CEO benefits and the forms of any CEO compensation agreements.				CEO pay decisions are not recommended by management but management does furnish the Committee with market data and proxy analyses for market context.
		Compensation of Other Named Executive Officers:
		•     Annually set target level and mix of base salary, short-term incentives and long-term incentives as part of a total compensation decision, exercising its discretion in making or changing its compensation decisions based upon factors it determines are relevant, which may include, among others: Ø    Our compensation philosophy and objectives. Ø    Advice from its independent compensation consultant. Ø    CEO recommendations. Ø    Past performance. Ø    Internal and external factors including market data.
Independent Directors (including Compensation Committee)		•     Annually review performance of CEO. •     Annually approve mix and amount of CEO direct compensation based on performance evaluation. •     Establish level of compensation payable to CEO under any employment, severance, change-in-control or similar compensation arrangements. •     Members of Environmental, Health, Safety and Sustainable Development Committee furnish Compensation Committee with input on short-term incentive plan safety measures.
Chairman of the Board		•     Independent, non-executive Chairman. •     Lead Board processes for CEO goals and objectives, performance evaluation and compensation.
All Directors		•     Approve overall performance goals under significant incentive plans as recommended by Compensation Committee.

 

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Independent Compensation Consultant
•     Frederic W. Cook & Co. (since August 2014); Hay Group Inc. (January 2014 until August 2014); •     Selected by our Compensation Committee as its independent consultant based on the Committee’s interviews with, and other information requested by Committee from, a number of compensation consulting firms.   •     Furnishes independent data and advice to our Compensation Committee.   •     Regularly attends and participates in Compensation Committee meetings as requested by our Compensation Committee.   Ø   Advises Committee on the principal aspects of our executive compensation program, including compensation philosophy and specific elements of executive compensation.   Ø   Advises Committee on specific matters under consideration.   Ø   Provides market information and analysis regarding competitiveness of program design and evolving practices and trends.						Our Compensation Committee has sole authority to select, retain and terminate its independent compensation consultant and to approve the consultant’s fees and other retention terms.   The Committee or its Chair directly retains and approves all services provided to us by the independent consultant. During 2014, our independent consultants did not provide us with any services other than services related to executive compensation and market data reports.
Management
CEO		•     Attends Compensation Committee meetings as requested by the Committee. •     Not present during executive sessions except at the invitation of the Committee and does not participate in deliberations regarding his own compensation. •     Leads management in furnishing the advice and recommendations requested by the Compensation Committee. •     Provides perspective on operating the business including attracting, retaining and motivating our workforce, including key executives, and focusing our workforce’s attention on established goals. Includes: Ø  Compensation philosophy and program design. Ø  Specific recommendations for non-CEO executive compensation. •     Annually reviews with Compensation Committee compensation of each other executive officer and presents compensation recommendations to Compensation Committee.
Human Resources Department		•     Senior Vice President – Human Resources and Senior Director – Compensation generally attend Compensation Committee meetings as requested by the Committee. •     Furnishes the Compensation Committee with market data and proxy analyses for market context and other information and analyses as requested. •     During 2014, our Human Resources Department retained Towers Watson to assist in reporting to our Compensation Committee on our pay for performance practices, furnish market data and make recommendations regarding our long-term equity incentive grant guidelines and furnish market data regarding our executive severance and change in control arrangements. In assessing the material prepared by Towers Watson, our Compensation Committee took into account the retention of Towers Watson by management.
Other Support		•    The Compensation Committee’s charter provides it authority to retain counsel and other experts and consultants as appropriate to discharge its duties and responsibilities. •     Law, Finance, Tax and other internal departments and external advisors also furnish support as requested.

 

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Use of Tally Sheets

To facilitate our Compensation Committee’s understanding of the nature and amounts of total compensation under our executive compensation program, our Compensation Committee makes use of “tally sheets” which show targeted and actual compensation to our executive officers for the past three fiscal years, as well as company stock ownership. The tally sheets are intended to assist our Compensation Committee in their overall evaluation of our executive compensation program.

Benchmarking

Use of Market Data

We use compensation market data as a reference for understanding the competitive pay positioning of each pay element and total compensation. Our Compensation Committee does not seek to manage total compensation of our executive officers within a prescribed competitive position or percentile of the comparator group or compensation market data. Instead, in exercising its judgment about compensation decisions, our Compensation Committee reviews compensation for each executive officer in relation to the market range (defined by the 25^th, 50^th and 75^th percentiles of the compensation market data) that, along with internal and other external factors, provides context for executive pay decisions.

Comparator Group

We benchmark the total compensation of our top five paid Named Executive Officers using proxy data reported by a comparator group. Our comparator group for 2014 consisted of 18 companies in the basic materials industry, including three direct competitors. Our Compensation Committee, with the advice of its independent compensation consultant and recommendations of our CEO and our Senior Vice President – Human Resources, reviews the composition of our comparator group annually. The criteria used to determine our 2014 comparator group focused on companies in the basic materials sector (such as agricultural chemicals, specialty chemicals, industrial metals and minerals, and nonmetallic mining). The specific criteria used for 2014 comparator group were three-year average revenue, return on total capital, total assets, operating profit, number of employees, business complexity, international presence and markets served. Our Compensation Committee believes that the use of the current comparator group and selection criteria provided useful compensation benchmark information as a result of a reasonable fit between Mosaic and the comparator group companies in terms of the industry and performance profile.

Our comparator group for 2014 consisted of:

COMPARATOR GROUP

 

Agrium Inc.		CONSOL Energy Inc.		Newmont Mining Corp.
Air Products & Chemicals, Inc.		Eastman Chemical Company		Peabody Energy Corporation
Ashland Inc.		Ecolab, Inc.		Potash Corporation of Saskatchewan Inc.
Barrick Gold Corporation		Freeport-McMoRan Copper & Gold Inc.		PPG Industries, Inc.
Celanese Corp.		Huntsman Corporation		Praxair, Inc.
CF Industries Holdings, Inc.		Monsanto Company		Teck Resources Limited

 

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The table below compares Mosaic to the members of our comparator group across several key metrics for their respective most recent fiscal periods ending on or before December 31, 2013, prior to the compensation decisions we made in February 2014 for 2014:

(dollars in billions)

 

		3-Year Average Revenue ($)		Return on Total Capital ($)		Total Assets ($)		Operating Profit ($)		Employees (#)
Comparator Group
75th Percentile		12.6		14.4		21.1		2.4		24,270
50th Percentile		10.1		9.0		17.8		1.8		14,000
25th Percentile		7.6		4.7		11.6		0.9		8,250
Mosaic		9.7		7.3		19.6		1.3		8,200

Third-Party Surveys

For the compensation decisions we made in February 2014, our Compensation Committee also utilized compensation market data for companies in the chemical and mining industries and from general industry. This data was compiled for us by Towers Watson from several sources that included:

 

•

2013 Mercer Benchmark Database Executive Compensation Survey – $5 Billion to $10 Billion Revenue Sample;

 

•

2013 Hay Executive Survey – Total Sample Data;

 

•

2013 Towers Watson CDB Executive Compensation Survey – $6 Billion to $20 Billion Revenue Sample;

 

•

2013 Towers Watson Compensation Survey Resource – Total Sample Data (Size Adjusted to Mosaic Revenue Scope Using Regression Analysis); and

 

•

2013 Towers Watson CDB Executive Compensation Survey – Chemical and Gases Industry (Median Revenue Size $6 Billion).

This survey data was among the competitive market data used to benchmark the compensation decisions for Messrs. Mack, McLellan and Davis. We have listed in Appendix A to this Proxy Statement the companies included in the survey data.

We also review broad-based third-party survey data for the United States and market trends to obtain a general understanding of current compensation practices and evolving best practice.

 

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Elements of Compensation

The elements of our 2014 executive compensation program for our executive officers include:

 

What We Pay		Why We Pay It
Direct Target Compensation
Annual
Base Salary		Provide a fixed compensation level competitive in the marketplace.
Short-Term Cash Incentives		Motivate short-term performance against specified financial or other targets. Performance based.
Long-Term
Long-Term Incentives
Stock Options		Link management compensation to stock price increase. Performance based.
Performance Units		Link management compensation to stockholder returns. Retention. Performance based.
Restricted Stock Units		Link management compensation to stockholder returns. Retention.
				For 2015 grants, we have replaced restricted stock units with performance units, with vesting linked to our three-year return on invested capital in excess of weighted average cost of capital.
Special Awards		Address special situations, such as rewarding special achievements, promoting specific retention goals or addressing other objectives that are not fully addressed by other elements of our executive compensation program.
				2014: Cost reduction incentive awards to incentivize achievement of our enterprise-wide cost reduction initiative   Stub Period: None   Fiscal 2013: None   Fiscal 2012: One-time, fixed value retention awards payable in Mosaic stock to help assure continuity of management, strategy and execution of our business priorities following the New Horizon Transaction.
Indirect Compensation
Benefit Programs		Provide competitive programs for wellness, health care, financial security and capital accumulation for retirement.
Health Care
Retirement
Deferred Compensation
Limited Perquisites		Optimize the ability of our executives to devote their attention to our affairs and/or to facilitate accomplishment of our business objectives.
Charitable Matching Contributions		Further our overall program of community giving; encourage community involvement by our employees.
Severance and Change-in-Control Agreements		Provide protection against job loss due to reasons beyond the executive’s control.

Base Salary

Our Compensation Committee establishes base salary levels for executive officers based on their judgment about internal and external factors, as discussed above under “Compensation Philosophy and Objectives” and “2014 Compensation Decisions” on pages 39 and 40, respectively. Our Compensation Committee reviews base salary levels annually, but adjustments to individual base salaries are not automatically made on an annual basis. Historically, any adjustments to base salary were typically made effective October 1; in light of our change in our fiscal year end, we are now typically making base salary adjustments effective March 1 of each year.

 

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Short-Term Cash Incentives

Short-term incentives for key employees, including executive officers, consist of cash awards under our Management Incentive Plan. Our 2014 Management Incentive Plan was established pursuant to our 2004 Omnibus Stock and Incentive Plan, which we refer to as our 2004 Stock and Incentive Plan. Our executive officers share in the incentive pool established under the plan as set forth below.

Individual Target Bonus Opportunity and Percentage. Our Compensation Committee establishes, or, in the case of our CEO, our independent directors establish, an individual target bonus opportunity for each participant based on the same types of factors as are used for setting base salary. The individual target amount is set as a percentage of the participant’s base salary.

 

Individual Base Salary ($)		x		Individual Bonus Opportunity, at  Target (%)		=		Individual Bonus  Opportunity, at Target ($)

 

For 2014, the target percentage for Mr. Prokopanko was 135% of base salary and for the other Named Executive Officers ranged from 65% to 100%.

Amount of Pool. The amount of the incentive pool, at target, is the sum of the target bonus opportunities for all participants. For 2014, the total incentive pool, at target, was $24.0 million.

 

Total Incentive Pool, at Target ($24.0 million)		=		Sum of (Individual Bonus Opportunity, at Target, all Participants) ($)

The total pool, at target, has two equally weighted components: Operating Earnings and Operational Excellence. For the executive officers, the Operational Excellence pool has three components: Controllable Operating Costs per Tonne; Selling, General and Administrative Expense; and Safety.

 

 

Amount of Actual Individual Payouts. Actual individual payouts are established by multiplying the individual’s bonus opportunity, at target, by a Performance Factor:

 

Individual Bonus Opportunity, at Target ($)		x		Performance Factor		=		Payout

The Compensation Committee reserves the right under the plan to exercise negative discretion to reduce the payout for any executive officer by up to 25% or to eliminate payouts if it deems appropriate. Our Compensation Committee did not exercise this discretion for 2014.

Performance Factor. The Performance Factor has two components, one for Operating Earnings and one for Operational Excellence.

 

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For the Operating Earnings component, an actual Operating Earnings Pool is established by multiplying Adjusted Operating Earnings by a Sharing Rate, and dividing that amount by the Operating Earnings Pool, at target, to a maximum of 150%:

 

Operating Earnings Performance Factor (Maximum 150%)		=		Actual 2014 Adjusted Operating Earnings ($) x Sharing Rate (%) ÷ Operating Earnings Pool, at Target ($)

The Operational Excellence component is based on the level of performance achieved under each of the Operational Excellence performance measures, to a maximum of 100%:

 

Sum of {Performance Factor for each Operational Excellence Measure}		=		Operational Excellence Performance Factor (Maximum 100%)

Performance Measures. Our Compensation Committee, or our Board, after recommendations by our Compensation Committee, pre-establishes performance goals for our executive officers for each performance period. 2014 performance goals for executive officers were generally similar to those for the 2013 Stub Year and reflected broad overall goals for Mosaic as a whole.

 

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Performance Measures for Executive Officers

Metric

Weight

Basis of Metric, Purpose, and Importance

Adjusted Consolidated Operating Earnings

50%

Basis: Consolidated operating earnings determined in accordance with GAAP and adjusted as specified below multiplied by a sharing rate determined by our ROIC:

Consolidated operating earnings are adjusted to exclude any restructuring charges, non-cash write-offs of long-term assets and expenses related to merger and acquisition activities. Our Compensation Committee provided for these adjustments because it did not want the incentive plan to discourage management from undertaking activities that impose a cost in the current year but are intended to increase stockholder value in the longer term.   Return on Invested Capital is:   Adjusted Operating Earnings + Equity in net earnings (loss) of nonconsolidated companies – Provision for income taxes (before discrete items and remittance of earnings items)   ÷   Average Invested Capital   Average Invested Capital is the average as of each month end of total assets minus non-interest bearing liabilities, excluding goodwill, expansion construction in progress, new borrowing arrangements, stock repurchases and non-cash write-offs of long-term assets.

Purpose: Focus attention on: •     the production of earnings and cash flow to support and grow our business, drive stock price appreciation, pay dividends and build cash reserves for economic downturns; and •     efficient use of capital.   Importance: Assigned the highest weight because the primary purpose of the Management Incentive Plan is to motivate and reward participants for profitability and to align participant and stockholder interests.

Controllable Operating Costs

25%

Basis: Arithmetic average of payout percentages for separate measures for our Phosphates and Potash business segments controllable operating costs per production tonne.   Purpose: Promote control of costs that management can directly influence and establish an incentive for achieving and maintaining low production costs within the industry.   Importance: Assigned the second highest weight because of the strategic importance of improving upon our position as a low cost producer of fertilizer products.

Controllable Operating Costs:   •       production costs consisting of costs considered and capitalized in inventory plus all idle plant costs + •       local general and administrative expenses and support function costs, excluding incentive program and other employee benefits expenses, any restructuring charges and expenses related to merger and acquisition activities, but including supply chain costs – •       costs of purchased commodities, depreciation, depletion, accretion and amortization, non-operating idle plant costs, ammonia production turnaround costs, Esterhazy brine inflow costs, Potash segment income-based royalties and taxes, fees received from third parties, taxes and charitable contributions, realized and unrealized derivative gains and losses and separation costs   for U.S. and Canadian operations of our Phosphates and Potash business segments.

 

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Performance Measures for Executive Officers

Metric

Weight

Basis of Metric, Purpose, and Importance

Safety:

•   Recordable Injury Frequency Rate (RIFR)

6.25%

Basis: OSHA recordable injury frequency rate for employees and contractors.   Purpose: Direct attention to the effectiveness of our safety systems, policies, programs and procedures in relation to the incidence rates reported for companies in similar industries.

Importance: Assigned equal weighting and a combined weighting of 12.5% because of our continuing commitment to providing safe workplaces for employees and contractors, as measured by the frequency and severity of recordable injuries.

•   Lost-Time Injury Frequency Rate (LTIFR)

6.25%

Basis: OSHA recordable lost-time injury frequency rate for employees and contractors. Any fatality results in a 0% payout under this measure.   Purpose: Direct attention to the severity of work-related injuries.

Our Compensation Committee selected the two safety measures and the respective goals for them after discussion with our Chief Operating Officer and members of our Environmental, Health, Safety and Sustainable Development Committee about the operational goals for safety established for 2014 by management and the Environmental, Health, Safety and Sustainable Development Committee.

Adjusted Selling, General and Administrative Expenses

12.5%

Basis: Selling, general and administrative expenses determined in accordance with GAAP less incentive program and other employee benefits expenses, any restructuring charges and expenses related to merger and acquisition activities.   Purpose: Promote the efficient management and control of expenses not included in costs of goods sold for services relating to finance, treasury, strategy development, information technology, legal, risk management and public affairs functions.   Importance: Assigned a weighting of 12.5% to drive continuous improvement in expenses that are not included in cost of goods sold.

Operating Earnings Sharing Rate. For the Operating Earnings measure, no payout was to be made unless ROIC was 5% or higher, and the maximum Operating Earnings Pool was capped at $36 million. The following table shows the Operating Earnings sharing rates at different levels of ROIC:

 

ROIC %		<5		5		6		7		8		9		10		11		12		13
Sharing Rate %		0		0.20		0.40		0.60		0.80		1.00		1.15		1.40		1.65		2.00

Operational Excellence Measure Metrics. For each of the Operational Excellence performance measures, we set minimum, target and maximum levels of performance:

 

		Minimum				Target				Maximum
Measure		Performance Level		Payout Percentage		Performance Level		Payout Percentage		Performance Level		Payout Percentage
Controllable Operating Costs		$126.70		0%		$120.67		25%		$114.64		50%
Safety-RIFR		1.150		0%		0.95		6.25%		0.75		12.5%
Safety-LTIFR		0.11		0%		0.09		6.25%		0.055		12.5%
Adjusted Selling, General and Administrative Expense ($ in millions)		$334		0%		$318		12.5%		$302		25%
Total Payout				0%				50%				100%

 

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Performance Measure Goal Setting Process. Our Compensation Committee and Board, in exercising their judgment regarding the appropriate levels for the 2014 performance measures, considered a number of factors that included:

 

•

Historical results for the performance measure.

 

•

Internal expectations for the performance measure.

 

•

External expectations for the performance measure.

 

•

Sensitivity analysis to ascertain correlations to or other relationships between the performance measures.

 

•

Expected degree of difficulty and likelihood of achieving the minimum, target and maximum goals over multi-year, rolling time periods.

 

•

The effect on upside opportunities of expected industry-wide capacity expansions.

 

•

The effects of the anticipated operating rates of our business units.

 

•

Anticipated creation of stockholder value, net of related earnings dilution, for achieving minimum, target and maximum goals.

Our Compensation Committee did not assign specific weightings to any of the above factors in evaluating them.

Payouts for 2014. Based on actual 2014 results, the payout percentage for executive officers for 2014 was 136% of their individual bonus opportunity, at target. The table below shows the final results against the target goal for each performance measure. The actual payout for each Named Executive Officer is set forth in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table.

 

Measure		Percent Attainment		Payout Percent
Operating Earnings		133%		67%
Controllable Operating Costs		161%		40%
Safety RIFR		65%		4%
Safety LTIFR (1)		143%		0%
Unadjusted Selling, General and Administrative Expenses		200%		25%
Total Payout Percentage of Target				136%

 

(1)

No payout under a fatality “zero out” rule due to a fatality in 2014.

Long-Term Incentives

We make long-term equity incentive awards shortly after the beginning of each fiscal year under our then current stock and incentive plan, which for our 2014 grants was our 2004 Stock and Incentive Plan. For 2014, our long-term incentive awards for executive officers consisted of equal portions of non-qualified stock options, restricted stock units and performance units. Stock options reinforce a longer-term view of Mosaic stock performance by recipients, and provide a strong link to total stockholder return. Restricted stock units and performance units likewise compensate participants based on our stockholder return, and foster continued retention of recipients by requiring the executive to remain with Mosaic for three years in order to earn a payout. We believe these equity-based awards help align the interests of executive officers and other key employees with those of our stockholders by tying significant portions of the recipients’ compensation to the market price of our Common Stock.

Key terms of our stock options, restricted stock units and performance units granted through 2014 include:

 

•

Stock options generally become exercisable in equal annual installments in the first three years following the date of grant, expire ten years after the date of grant, and allow grantees to purchase our Common Stock at the full market price of our Common Stock on the day the options were granted. Upon termination of employment, option installments that are vested are generally exercisable for three months after termination; unvested installments generally are forfeited. The 2004 Stock and Incentive Plan expressly prohibits the repricing of options or granting options with exercise prices less than the fair market value of our Common Stock on the date of grant.

 

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•

Restricted stock units and performance units provide grants of our Common Stock that vest after continued employment through the specified performance period, which is generally three years. Restricted stock unit awards and performance units include dividend equivalents which provide for payment of an amount equal to the dividends paid on an equivalent number of shares of our Common Stock and which will be paid only when we issue shares of our Common Stock to recipients after the awards vest.

 

•

Stock options provide that:

 

Ø

Unvested stock option installments held by a Named Executive Officer whose employment terminates due to retirement at or after age 60 (or pursuant to early retirement with the consent of our Compensation Committee), death or disability vest in accordance with the normal vesting schedule; and

 

Ø

Following termination of employment due to retirement at or after age 60 (or pursuant to early retirement with the consent of our Compensation Committee), death or disability, stock options are exercisable for up to the earlier of (i) five years or (ii) the remaining term of the option.

 

•

For awards made prior to 2014, restricted stock units and performance units vest on a pro rata basis in the event of retirement at or after age 60 (or pursuant to early retirement with the consent of our Compensation Committee), disability, or, for awards granted prior to the 2013 Stub Period, death. Beginning with awards made during the 2013 Stub Period, restricted stock units and performance units vest fully upon a participant’s death and beginning with awards made during 2014, restricted stock units and performance units vest fully upon a participant’s death, disability or retirement with at least five years of service at or after age 60 (or pursuant to early retirement with the consent of our Compensation Committee).

 

•

The number of shares issued upon vesting of performance units is determined as set forth below:

 

Performance Units Awarded (#)		x		Common Stock Market Price at End of Performance Period + Dividends Payable on Common Stock ÷ Common Stock Market Price at Grant Date		=		Number of Shares Issued

 

•    Common Stock market price based upon thirty day trading average.   •    No shares issued if market price of Common Stock at vesting date is less than 50% of market price at grant date.   •    Maximum number of shares issued limited to twice the number of performance units awarded.   •    Maximum value of shares issued limited to 500% of value of performance units awarded.   •    No payout for executive officers unless Company has profit over three-fiscal-year performance period.

Long-term incentive awards are part of the total compensation decision regarding the level and mix of compensation. Our Compensation Committee sets a target value for long-term incentive awards for each executive officer based on its judgment about the internal and external factors used in setting executive officer total compensation described under “Compensation Philosophy and Objectives” on page 39 as well as our Compensation Committee’s judgment regarding the desired mix of base salary, short-term incentives and long-term incentives. Our Compensation Committee also considers key trends in equity award granting practices by U.S. multi-national companies, historical and current grant rates within the basic materials sector, outstanding vested and non-vested equity awards to executive

 

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officers, the stock ownership levels of executive officers and the potential dilutive effect on our stockholders. The ratio of shares of our Common Stock subject to equity incentive awards granted as part of our February 2014 long-term incentive grant as a percentage of our outstanding stock as of December 31, 2013, or “burn rate,” was 0.17% and 0.32% as of the same date, taking into account both the annual equity incentive awards and the cost reduction incentive awards granted in March 2014.

Once we determined the target value of a recipient’s long-term incentive awards and the proportion to be represented by stock options, restricted stock units and performance units, we established the specific number of shares to be subject to the stock option, restricted stock unit and performance unit awards as follows:

 

•

Stock Options and Performance Units. The number of shares to be subject to stock options and performance units was calculated using the valuation models we use for our financial statements determined in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC 718.

 

•

Restricted Stock Units. The number of shares subject to the annual grant of restricted stock units was established by dividing the target value of the grant by the closing price of a share of our Common Stock on the date of grant. This is the same valuation model we use for our financial statements determined in accordance with ASC 718.

Cost Reduction Incentive Awards

In October 2013 we first announced an enterprise-wide goal of achieving $500 million in operating cost savings over five years. In furtherance of that goal, in March 2014 we granted cost reduction incentive awards to incentivize key officers and employees, including our Named Executive Officers, to achieve aggressive cost-savings goals. We believe these awards further enhance our alignment of executive compensation with stockholder interests and will significantly benefit us and our stockholders by helping ensure that Mosaic remains a low-cost producer.

The cost reduction incentive awards were granted under our 2004 Omnibus Stock and Incentive Plan and consist of grants of performance shares payable in shares of our Common Stock based on achievement of controllable operating cost goals over the three-year performance period from January 1, 2014 through December 31, 2016. Each award vests if the participant is continuously employed by us through the specified performance period, which is January 1, 2014 through December 31, 2016, provided that the awards will also vest fully in the event of retirement with at least five years of service at age sixty or older (or pursuant to early retirement with the consent of our Compensation Committee), death or disability. The performance shares include dividend equivalents which provide for payment of an amount equal to the dividends paid on an equivalent number of shares of our Common Stock and which will be paid only when we issue shares of our Common Stock to the participant after the awards vest.

The number of shares of Common Stock issued in exchange for the performance shares is the total number of vested performance shares multiplied by a payout percentage, determined on the basis of achievement of specified controllable operating costs per tonne. The maximum payout is 150%.

The number of performance shares granted to each Named Executive Officer was established by dividing the target value of the grant by the closing price of a share of our Common Stock on the date of grant. In granting these awards, our Compensation Committee established, or, in the case of our CEO, our independent directors established, the target value based on the same factors described above with respect to long-term incentive awards. Accordingly, the target value for each Named Executive Officer’s cost reduction incentive award is equal to the target dollar amount of his long-term incentive award for 2014.

 

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The performance measure for these awards, Controllable Operating Costs per Tonne, is defined as follows based on the participant’s sub-plan:

 

		•       production costs consisting of costs considered and capitalized in inventory plus all idle plant costs   +   •       local general and administrative expenses and support function costs, excluding incentive program and other employee benefits expenses, any restructuring charges and expenses related to merger and acquisition activities (“Local G&A Costs”), including supply chain costs   +   •       50% of selling, general and administrative expenses determined in accordance with GAAP less incentive program and other employee benefits expenses, any restructuring charges and expenses related to merger and acquisition activities and Local G&A Costs   –   •       costs of purchased commodities, depreciation, depletion, Potash segment accretion and amortization, non-operating idle plant costs, ammonia production turnaround costs, Esterhazy brine inflow costs, Potash segment income-based royalties and taxes, realized and unrealized derivative gains and losses and separation costs   for our Phosphates business segment, excluding international distribution activities, and our Potash business segment.

Employee Benefits

As part of a competitive total compensation program, we also offer our executives the ability to participate in customary employee benefit programs. For 2014 these included:

 

•

Retirement Benefits. Each of the Named Executive Officers and other salaried employees in the United States are eligible to participate in the Mosaic Investment Plan, a defined contribution plan qualified under Section 401(k) of the Code. We have included our contributions to the accounts of the Named Executive Officers for 2014, the 2013 Stub Period and fiscal 2013 and 2012 in the “All Other Compensation” column in the Summary Compensation Table.

In addition, we have an unfunded non-qualified deferred compensation plan that has restoration provisions under which we credit the accounts of the Named Executive Officers and other key employees with amounts that would have been contributed under the Mosaic Investment Plan that exceed limitations for tax-qualified plans under the Code. We have included our contributions to the accounts of the Named Executive Officers for 2014, the 2013 Stub Period and fiscal 2013 and 2012 under our deferred compensation plan in the “All Other Compensation” column in the Summary Compensation Table.

 

•

Deferred Compensation Plan. In addition to the restoration provisions discussed above under “Retirement Benefits,” our unfunded non-qualified deferred compensation plan permits the Named Executive Officers and other key employees in the United States who we select to elect to contribute from 5% to 80% of base salary and bonus to the plan. Our directors may contribute up to 100% of directors’ fees and any other compensation paid in cash. Contributions are made on a tax-deferred basis until distribution of the participant’s plan balance. A participant’s balance (including balances arising from the restoration provisions described above under “Retirement Benefits”) accrues gains or losses at rates equal to those on various investments selected by the participant. The investment alternatives are the same as are available to participants generally as investments under the Mosaic Investment Plan, except that our Common Stock is excluded.

 

•

Cargill Pension Plans. Certain of our employees who were employees of Cargill before the 2004 business combination between IMC and Cargill’s fertilizer businesses participate in Cargill’s U.S. salaried employees’ pension plan. Although no additional years of credited service are accrued under this pension plan after December 31, 2004, additional years of vesting service are credited for the purpose of determining eligibility to retire, and covered compensation for purposes of determining benefits includes compensation paid by us to the executive subsequent to the business combination.

 

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In accordance with the agreement between IMC and Cargill relating to the combination, Cargill incurs the costs associated with pre-combination benefits for certain former employees of Cargill and its subsidiaries under certain pension plans, including Cargill’s U.S. salaried employees’ pension plan, and charges them to us, including charges for Messrs. Mack, McLellan and Davis, three of our Named Executive Officers. The amount that Cargill may charge to us for pension costs relating to all former Cargill employees may not exceed $2.0 million per year or $19.2 million in the aggregate. As of December 31, 2014, the unused portion of the $19.2 million cap was $2.2 million. Cargill is solely responsible for payment of the annual pension benefits to the participants under Cargill’s U.S. salaried employees’ pension plan.

In addition, certain of our employees who were employees of Cargill before the 2004 business combination, including Mr. McLellan, participated in Cargill’s international retirement plan. To put them in a position intended to be comparable to that of our U.S. participants in Cargill’s U.S. salaried employees pension plan, in fiscal 2013 we entered into two arrangements:

 

Ø

an agreement under which we paid Cargill $470,000 for the participation of the affected employees in Cargill’s international pension plan through December 31, 2010; and

 

Ø

supplemental agreements with the affected employees that provide for payment of a lump sum that increases each year to age 65. For Mr. McLellan, the lump sum payment began at $119,000 if termination of employment had occurred at age 56 and increases annually to $760,000.

We have included the changes for 2014, the 2013 Stub Period and fiscal 2013 and 2012 in the actuarial present value of the accumulated benefit under Cargill’s U.S. salaried employees’ pension plan for Messrs. Mack, McLellan and Davis and Cargill’s international pension plan for Mr. McLellan, as well as Mr. McLellan’s benefits under his supplemental agreement, in the “Change in Pension Values and Nonqualified Deferred Compensation Earnings” column in the Summary Compensation Table. We have included additional information regarding Mr. Mack’s, Mr. McLellan’s and Mr. Davis’s benefits under the plans and supplemental agreement, including the actuarial present value of their accumulated benefits under the plans and supplemental agreement, the benefit formula for the plans, and the elements of compensation upon which benefits under the plans are determined, in the Pension Benefits Table and accompanying narrative and notes.

 

•

Group Life, Health and Disability Plans. We have established group life, health and disability plans for salaried employees in the United States. The Named Executive Officers may participate in these plans on the same basis as other salaried employees.

 

•

Executive Life and Disability Plans. We provide certain key executives, including the Named Executive Officers, additional life and disability insurance coverage that supplements the coverage limits available under the group plans. Supplemental life coverage is equal to one times base salary (up to $1.0 million) and the supplemental disability coverage is equal to an additional 12% of eligible earnings (base salary plus bonus) up to $420,000.

 

•

Perquisites and Other Benefits. We furnish a limited number of perquisites to our Named Executive Officers. During 2014, we furnished the following perquisites to our Named Executive Officers that meet the threshold for reporting in the “All Other Compensation” column in the Summary Compensation Table under the rules of the Securities and Exchange Commission:

 

Ø

An executive physical exam program pursuant to which key executives, including the Named Executive Officers, are entitled to reimbursement for the costs of physicals.

 

Ø

An executive financial planning program pursuant to which our executive officers and certain other key executives are eligible for reimbursement of up to $7,000 per calendar year for the costs of financial and tax planning.

 

Ø

A corporate travel policy that covers travel expenses for business purposes by spouses of our employees, including travel to industry or investor conferences. Our travel policy also generally provides for a “gross-up” for taxes on amounts we reimburse under the policy that are taxable compensation to the employee.

 

Ø

We match employee donations to a limited number of charitable organizations. The matching program is available to all U.S. employees.

 

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Severance and Change-in-Control Arrangements

We have established senior management severance and change-in-control agreements with each of our executive officers as well as certain other officers or executives designated by our Compensation Committee and Board. Our Compensation Committee (and, in the case of our CEO, our Board) established the terms of these agreements to be consistent with our compensation philosophy and practices as discussed above. These agreements set forth the terms and conditions upon which our executive officers would be entitled to receive certain benefits upon termination of employment.

These agreements are intended by our Compensation Committee (and, in the case of our CEO, our Board), to:

 

•

Help us attract and retain executive talent in a competitive marketplace.

 

•

Enhance the prospects that our executive officers would remain with us and devote their attention to our performance in the event of a potential change in control.

 

•

Foster their objectivity in considering a change-in-control proposal.

 

•

Facilitate their attention to our affairs without the distraction that could arise from the uncertainty inherent in change-in-control and severance situations.

 

•

Protect our confidential information and prevent unfair competition following a separation of an executive officer’s employment from us.

The Severance and Change-in-Control Compensation Table on page 81, together with the accompanying narrative and notes, explains in detail the benefits under these arrangements and the circumstances under which a Named Executive Officer would be entitled to them.

Policy on Deductibility of Compensation

Section 162(m) of the Code limits the tax deductibility by a corporation of annual compensation in excess of $1 million paid to the corporation’s principal executive officer or any of its other three most highly compensated executive officers (other than the principal financial officer). However, performance-based compensation that has been approved by stockholders is excluded from the $1 million limit if, among other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals and the board committee that establishes such goals consists only of “outside directors.” All of the members of our Compensation Committee qualify as outside directors for this purpose.

While the tax impact of any compensation arrangement is one factor to be considered, it is evaluated in conjunction with our overall compensation philosophy. We consider ways to maximize the deductibility of executive compensation while retaining the discretion we deem necessary to compensate officers in a manner commensurate with performance and the competitive environment for executive talent.

However, from time to time we may award compensation which is not fully deductible if we determine that the award is consistent with our philosophy and is in the best interests of Mosaic and our stockholders.

Our 2004 Stock and Incentive Plan and our 2014 Stock and Incentive Plan are designed to permit employee stock options, performance units and awards under the Management Incentive Plan to meet the performance-based criteria of Section 162(m). Our restricted stock units do not meet the performance-based criteria of Section 162(m).

We also consider the impact of other tax provisions, such as the restrictions on deferred compensation set forth in Section 409A of the Code.

Forfeiture of Incentive Awards for Misconduct (“Clawback”)

Our 2004 Stock and Incentive Plan and our 2014 Stock and Incentive Plan each provides for the forfeiture of awards in the event of certain types of misconduct. All of the annual and long-term incentive awards that we

 

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describe in this Proxy Statement, including Management Incentive Plan awards, restricted stock units, stock options and performance units, are subject to these forfeiture provisions. For awards granted in fiscal 2009 or subsequent years, our Board may require forfeiture if:

 

•

fraudulent or intentional misconduct contributes to the need for a material restatement of our financial statements filed with the Securities and Exchange Commission or contributes to the use of inaccurate metrics to determine the amount of any award or the amount of incentive compensation to a participant;

 

•

the participant knowingly or grossly negligently engaged in the misconduct or grossly negligently failed to prevent the misconduct; and

 

•

the amount of the participant’s award or incentive compensation was greater than it would have been absent the misconduct.

These forfeiture provisions are in addition to any other disciplinary or other action available to us with respect to the misconduct.

Stock Ownership Guidelines

Our Compensation Committee has adopted guidelines for ownership of our stock by our executive officers. Executive officers must achieve and maintain the following levels of ownership:

 

•

CEO, five times base salary; and

 

•

Executive Vice Presidents (three persons, including Mr. Stranghoener) and Senior Vice Presidents (five persons), three times base salary; and

 

•

Vice Presidents (one person), one time base salary.

Among other provisions of our stock ownership guidelines are that:

 

•

the value of Common Stock owned is based on the current stock price at that time;

 

•

unexercised employee stock options and unvested restricted stock units and performance units are not counted; and

 

•

an executive officer must hold all “net profit shares” (the shares of Common Stock remaining after deducting the number of shares required to be sold in order to pay tax obligations, the exercise price of employee stock options and other costs) from employee stock option exercises and the vesting of restricted stock units until an executive officer has met the required ownership level.

Executive officers are required to achieve their respective ownership targets within six years of the time of hire or promotion.

Our Compensation Committee reviews each participant’s compliance or progress towards compliance annually, and may impose conditions, restrictions or limitations on any participant in order to achieve the purposes of the stock ownership guidelines. The Chair of our Board and our CEO may jointly grant exemptions in the event of hardship.

The following table shows the stock ownership guideline for each Named Executive Officer and the Named Executive Officer’s holdings at December 31, 2014:

 

Name		Ownership Guidelines ($)		Value of Shares Held ($)		Value of Shares Held in Excess of (Less Than) Guideline ($)
James T. Prokopanko		6,000,000		8,391,840		2,391,840
Richard L. Mack		1,800,000		3,595,029		1,795,029
Lawrence W. Stranghoener		2,025,000		6,410,264		4,385,264
James (“Joc”) C. O’Rourke		2,190,000		2,423,650		233,650
Richard N. McLellan		1,455,000		1,516,493		61,493
Gary (“Bo”) N. Davis		1,350,000		1,234,696		(1)

 

(1)

Mr. Davis became our Senior Vice President - Phosphate Operations in July 2011. Accordingly, he will not be required to achieve his ownership target until July 2017.

 

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Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the foregoing Compensation Discussion and Analysis. Based on our review and discussion with management, we have recommended to our Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our 2014 10-K Report.

Respectfully submitted,

William T. Monahan, Chair

Gregory L. Ebel

James L. Popowich

David T. Seaton

Compensation Risk Analysis

Our Compensation Committee, with the advice of its independent compensation consultant and input from management, has reviewed the design of our employee compensation policies and practices and concluded that they do not create risks that are reasonably likely to have a material adverse effect on us. Significant factors considered by our Compensation Committee in reaching its conclusion include:

 

•

The balance of base pay, short-term incentives and long-term incentives, and an emphasis on compensation in the form of long-term incentives that increase along with employees’ levels of responsibility;

 

•

A long-term incentive program that for 2014 granted an equal mix of stock options, restricted stock units and performance units to mitigate the risk of actions intended to capture short-term stock appreciation gains at the expense of sustainable total stockholder return over the longer-term;

 

•

Vesting of long-term incentive awards over a number of years;

 

•

Caps on annual cash incentives;

 

•

Broad performance ranges for minimum, target and maximum operating earnings goals for annual cash incentives that reduce the risk of accelerating or delaying revenue or expense recognition in order to satisfy the threshold or next tier for incentive payouts;

 

•

The range of performance measures we utilize under our short-term incentive plan, which for executive officers include not only operating earnings but also controllable operating costs per production tonne, two safety measures and adjusted selling, general and administrative expenses; and

 

•

Other features in our incentive programs that are intended to mitigate risks from our compensation program, particularly the risk of short-term decision-making. These features include the potential for forfeiture of all types of incentive awards for executives in the event of misconduct as described under “Compensation Discussion and Analysis – Forfeiture of Incentive Awards for Misconduct” on page 62; stock ownership guidelines, including holding period requirements, for our executive officers and certain other key executives as described under “Compensation Discussion and Analysis – Stock Ownership Guidelines” on page 63; and the ability of our Compensation Committee to exercise negative discretion to reduce or eliminate payouts under our Management Incentive Plan if it deems appropriate.

Executive Compensation Tables

The following tables and accompanying narratives and notes summarize information about the total compensation awarded to, earned by or paid to each of our Named Executive Officers for 2014, the 2013 Stub Period and fiscal 2013 and 2012.

We have included a narrative discussion of our compensation philosophy, processes and components and the bases upon which we make compensation decisions in the Compensation Discussion and Analysis beginning on page 33.

 

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The following tables and accompanying narratives and notes provide quantitative data and additional information about the compensation we paid our Named Executive Officers for 2014, the 2013 Stub Period and fiscal 2013 and 2012 and should be read in conjunction with the Compensation Discussion and Analysis.

2014, 2013 Stub Period and Fiscal 2013 and 2012 Summary Compensation Table

 

Name and Principal Position		Fiscal Year		Salary ($) (1)(2)				Bonus ($)				Stock Awards ($) (3)				Option Awards ($) (4)				Non-Equity Incentive Plan   Compensation   ($) (2)(5)				Change in Pension Value and Nonqualified Deferred   Compensation   Earnings ($) (6)				All Other   Compensation   ($) (7)				Total ($)
James T. Prokopanko		2014			1,200,000				—				8,833,327				1,766,673				2,203,200				—				817,037				14,820,237
President and Chief		2013 Stub Period			683,333				—				3,533,341				1,766,667				714,700				—				210,863				6,908,904
Executive Officer		2013			1,116,667				—				3,533,338				1,766,656				2,285,591				—				643,043				9,345,295
		2012			1,033,333				—				4,933,330				1,466,668				1,470,000				—				512,293				9,415,624
Richard L. Mack (8)		2014			579,167				—				1,999,994				400,002				630,100				19,200				180,532				3,808,994
Executive Vice President		2013 Stub Period			312,500				—				800,001				399,992				194,100				8,700				38,350				1,753,643
and Chief Financial Officer		2013			516,667				—				800,015				400,011				541,034				10,000				157,492				2,425,219
		2012			490,000				—				2,666,647				333,346				392,000				50,000				131,935				4,063,928
Lawrence W. Stranghoener(9)		2014			750,000				—				2,499,989				500,002				969,000				—				296,322				5,015,313
Former Executive Vice		2013 Stub Period			385,417				—				999,984				499,995				253,100				—				66,643				2,205,139
President and Chief		2013			638,333				—				999,994				499,997				813,391				—				244,520				3,196,234
Financial Officer		2012			606,667				—				2,866,641				433,347				516,600				—				203,309				4,626,564
James (“Joc”) C. O’Rourke(10)		2014			730,000				—				3,166,675				633,336				992,800				—				345,450				5,868,261
Executive Vice President -		2013 Stub Period			415,833				—				1,266,648				633,325				322,100				—				65,767				2,703,673
Operations and Chief		2013			678,333				—				1,266,665				633,341				1,030,540				—				256,692				3,865,572
Operating Officer		2012			625,000				—				2,999,972				500,004				533,400				—				230,245				4,888,621