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Tax Deductibility of Executive Compensation
Fuel Tech reviews and considers the deductibility of executive compensation under the requirements of
Internal Revenue Code Section 162(m). The Company believes that compensation paid under the Company’s incentive
plans is generally fully deductible for federal income tax purposes.
Accounting for Equity-Based Compensation
On January 1, 2006, Fuel Tech began accounting for the equity-based compensation issued under the FTIP in
accordance with the requirements of FASB ASC Topic No. 718. Fuel Tech accounting for equity-based compensation
under the 2014 LTIP also is in accordance with the requirements of FASB ASC Topic No. 718.
Summary of NEO Compensation
NEO compensation consists of three primary elements: base salary, a short-term incentive plan based on
financial performance (whether under a CIP or a sales commission plan, as applicable), and long-term incentives.
The Committee determined the amounts to be paid to each NEO for fiscal 2020 as follows:
• Ellen T. Albrecht, Interim Controller, Treasurer and Principal Financial Officer: Ms. Albrecht’s compensation for 2020
consisted primarily of the following:
• Base Salary: Ms. Albrecht’s base salary for 2020 was $212,000. As part of a 2020 corporate cost reduction
program, effective March 1, 2020 for a duration yet to be determined, Ms. Albrecht’s base salary was reduced
by 10% to $190,800.
• Short-Term Incentives: Ms. Albrecht earned a discretionary merit bonus of $40,000 in 2020. Ms. Albrecht earned
no payout under the 2020 CIP as further described in the 2020 Corporate Incentive Plan portion of the
Compensation Elements section above.
• Long-Term Incentives: No long-term incentive equity grant was awarded to Ms. Albrecht in 2020.
• Vincent J. Arnone, President, and Chief Executive Officer: Mr. Arnone’s compensation for 2020 consisted primarily
of the following:
• Base Salary: Mr. Arnone’s base salary for 2020 was $425,000. As part of a 2020 corporate cost reduction
program, effective March 1, 2020 for a duration yet to be determined, Mr. Arnone’s base salary was reduced by
10% to $382,500.
• Short-Term Incentives: Mr. Arnone earned no payout under the 2020 CIP as further described in the 2020
Corporate Incentive Plan portion of the Compensation Elements section above.
• Long-Term Incentives: No long-term incentive equity grant was awarded to Mr. Arnone in 2020. In 2021, the
Company entered into a 2021 Executive Performance RSU Award Agreement with Mr. Arnone pursuant to which
he will have the opportunity to earn RSUs as further described in the 2021 Executive Performance RSU Long-
Term Incentive discussion in the Long-Term Incentives portion of the Compensation Elements section above.
• William E. Cummings, Senior Vice President, Sales: Mr. Cummings’ compensation for 2020 consisted primarily of
the following:
• Base Salary: Mr. Cummings base salary for 2020 was $240,000. As part of a 2020 corporate cost reduction
program, effective March 1, 2020 for a duration yet to be determined, Mr. Cummings’ base salary was reduced
by 10% to $216,000.
• Short-Term Incentives: Mr. Cummings earned $_________ in sales commissions in fiscal 2020 as further
described in the APC Officer and National Sales Manager Commission Plan and FUEL CHEM Officer
Commission Plan portions of the Compensation Elements section above.
• Long-Term Incentives: No long-term incentive equity grant was awarded to Mr. Cummings in 2020.
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