Darling Ingredients Inc

This management proposal asks shareholders to cast a non-binding advisory vote to approve the company’s executive compensation as disclosed in the proxy (the “say-on-pay”). Management defends its program as pay-for-performance, tying annual incentives to adjusted EBITDA and strategic goals and long-term incentives primarily to multi-year performance (ROGI relative to peers and TSR modifier) and time-vested RSUs, designed to align executives’ interests with shareholders and retain key talent. The Compensation Committee has engaged an independent consultant, uses peer benchmarking, maintains stock ownership guidelines, clawback policies, double-trigger change-of-control protections, and retains discretion to modify elements. The board recommends approval because recent shareholder engagement produced strong support (approximately 97% in favor at the 2025 meeting), the committee believes the mix of metrics appropriately balances short- and long-term incentives while mitigating excessive risk, and the program includes best practices (no option repricing without shareholder approval, no single-trigger change-of-control acceleration, and clawback provisions). Key contextual factors include cyclical commodity exposure that impacts earnings (the company uses adjusted EBITDA and ROGI measures to focus on capital deployment and operating performance), the role of Diamond Green Diesel joint venture in results, high levels of equity-based, “at-risk” compensation (87% of CEO pay at target in 2025), and recent CEO and board changes that may frame future compensation decisions. The analysis for an institutional reviewer should emphasize alignment mechanisms, the degree of performance sensitivity, protections against windfall payouts, potential one-time or retention grants (e.g., new hires), and the extent to which disclosed pay was actually realized historically given stock price movements and PSU outcomes.

The management proposal requests shareholder approval of the 2026 Omnibus Incentive Plan which would (i) replace the 2017 Plan, (ii) add 3,900,000 new shares plus any remaining available under the 2017 Plan for a combined reserve, and (iii) continue to authorize a full suite of equity and cash incentive award types to employees, non-employee directors and service providers. The plan includes several shareholder-friendly governance features: no option/SAR discounting or repricing without shareholder approval, no recycling of shares used to pay exercise price or taxes, no dividends or dividend equivalents on unearned awards, standard anti-dilution adjustments, a non-employee director annual compensation cap ($900,000), and standard change-of-control provisions (substitution, acceleration, or cash-out at the committee’s discretion) with a relatively narrow change-of-control definition except as may be required for 409A compliance. The Compensation Committee has analyzed grant practices (historical burn rate ~0.33%, overhang ~4.44%) and believes the requested authorization balances competitive grant capacity and shareholder dilution concerns. For an institutional reviewer, relevant considerations include the size of the request relative to outstanding shares (~3,900,000 vs ~158.7 million outstanding shares ≈ 2.45% incremental overhang), reuse provisions for returned/cancelled awards, the mix of performance-based vs time-based awards, anti-dilution protections, and limits on director compensation. The Board recommends approval to preserve the company’s ability to grant equity incentives necessary to execute strategy and retain talent.