EASTMAN CHEMICAL (EMN)
Sector: Materials
2026 Annual Meeting Analysis
EASTMAN CHEMICAL · Meeting: May 7, 2026
Directors FOR
11
Directors AGAINST
0
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Director since January 2011; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold for directors with negative absolute TSR, so no TSR-based concern applies; no overboarding, attendance, or independence issues identified.
Director since June 2025, which is less than 24 months ago, so he is fully exempt from the TSR trigger; no other policy flags identified.
Director since February 2011; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold, so no TSR-based concern applies; no overboarding, attendance, or independence issues identified.
Director since August 2022, just over 24 months ago; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold; no other policy flags identified.
CEO and director since May 2013; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold for negative absolute TSR, so no TSR-based concern applies; no overboarding or independence issues identified for his board role.
Director since February 2023, which is just over 24 months; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold; holds three outside public board seats (ADP, Micron, Truist), which is below the four-seat overboarding threshold; no other policy flags identified.
Director since November 2011; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold; no overboarding, attendance, or independence issues identified.
Director since September 2003; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold; no overboarding, attendance, or independence issues identified.
Director since July 2018; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold; holds two outside public board seats (Avient, Air Liquide), which is below the overboarding threshold; no other policy flags identified.
Director since February 2016; 3-year peer group underperformance gap of -9.7pp does not meet the 20pp trigger threshold; holds one outside public board seat (Albemarle); no other policy flags identified.
Director since May 2024, which is less than 24 months ago, so he is exempt from the TSR trigger; holds one outside public board seat (Martin Marietta Materials); no other policy flags identified.
All eleven director nominees receive a FOR vote. The primary TSR benchmark used is the company's disclosed compensation peer group of 19 companies. Eastman's 3-year total shareholder return is approximately -0.3%, which is negative in absolute terms, triggering a 20-percentage-point underperformance threshold. However, the actual gap versus the peer group median 3-year return of +9.4% is only -9.7 percentage points, which falls short of the 20pp threshold needed to fire a No vote. Two directors (Audia, joined June 2025; Slager, joined May 2024) are within the 24-month new-director exemption window. No directors are overboarded, all attendance was 100%, and all non-employee directors are independent. The full slate receives a FOR vote.
Say on Pay
✓ FORCEO
Mark J. Costa
Total Comp
$19,498,966
Prior Support
N/A
CEO total compensation of approximately $19.5 million is within a reasonable range for the CEO of a large-cap Basic Materials company of Eastman's size and complexity, and the pay structure is strongly performance-oriented — the proxy discloses that 90% of total target CEO compensation is variable and at-risk. The annual incentive plan paid out at only 47% of target (reflecting below-target financial results in a challenging environment), and the 2023-2025 long-term performance share awards paid out at 75% of target based on mid-range relative total shareholder return and modestly above-target return on invested capital — both outcomes demonstrate that incentive pay is actually tracking company performance rather than paying out regardless of results. The long-term plan uses rigorous, measurable metrics (relative total shareholder return and return on invested capital over three years), the company has a meaningful clawback policy, no tax gross-ups, double-trigger change-in-control provisions, and robust stock ownership requirements, all of which reflect sound pay governance.
Auditor Ratification
✓ FORAuditor
PricewaterhouseCoopers LLP
Tenure
33 yrs
Audit Fees
$5,956,000
Non-Audit Fees
$1,352,000
PwC has audited Eastman since 1993, a tenure of approximately 33 years, which exceeds the 25-year threshold in our policy that normally triggers a No vote. However, the proxy discloses specific and compelling mitigating factors: the lead audit partner was rotated in 2026 (the most recent rotation), the Audit Committee is actively involved in partner selection, and the committee provides a detailed rationale for continued engagement citing deep company and industry knowledge, robust independence controls, and annual evaluation of performance and qualifications. The non-audit fee ratio is approximately 22.7% of audit fees ($1,352,000 in non-audit fees — comprising audit-related fees of $125,000, tax fees of $929,000, and other fees of $298,000 — against audit fees of $5,956,000), which is well below the 50% threshold. Given the documented partner rotation and the audit committee's thorough annual independence assessment, the tenure trigger is sufficiently mitigated to support ratification.
Stockholder Proposals
1 proposal submitted by shareholders
Proposal 5
Advisory Vote on Stockholder Proposal Regarding Lowering the Threshold for Calling Special Shareholder Meetings to 10%
This proposal asks the company to lower the ownership threshold required to call a special shareholder meeting from its current level down to 10%, which is a mainstream governance improvement that gives shareholders a more meaningful ability to force a meeting between annual elections when urgent issues arise. Lowering the special meeting threshold is a well-established governance reform broadly supported by institutional investors because it strengthens shareholder rights without unduly disrupting normal business operations. The board recommends against this proposal, but their opposition does not present a compelling reason to override the shareholder rights benefit — a 10% threshold is a reasonable and commonly adopted standard, and supporting it aligns with the policy's general preference for structural improvements that empower shareholders.
Overall Assessment
The 2026 Eastman Chemical annual meeting ballot presents eleven director nominees, auditor ratification, a say-on-pay vote, an equity plan approval, and one stockholder proposal. All eleven directors receive a FOR vote because the company's 3-year stock underperformance versus its peer group (-9.7 percentage points) falls below the 20-point threshold required to trigger a No vote; the auditor receives a FOR despite its 33-year tenure due to documented mitigating factors including a 2026 lead partner rotation and a non-audit fee ratio well within policy limits; the executive compensation program receives a FOR because pay is heavily performance-linked, incentive payouts appropriately reflected below-target results, and governance practices are sound; and the stockholder proposal to lower the special meeting threshold to 10% receives a FOR as a straightforward shareholder rights improvement.
Compensation Peer Group
19 companies disclosed in 2026 proxy filing