The Director Compensation Project: World Fuel Services Corporation (INT)

This post is part of an ongoing series that examines the way stock exchange independence rules relate to director compensation. We are for the most part including companies from 2016’s Fortune 500 and using information found in their 2016 proxy statements.

NASDAQ and the NYSE have similar rules with respect to director independence. NYSE Rule 303A.01 requires that each listed company’s board of directors be comprised of a majority of independent directors. A director does not qualify as “independent” if he or she has a “material relationship with the company.” NYSE Rule 303A.02(a). In addition, the director is not considered independent under NYSE Rule 303A.02(b)(ii) if the director received more than $120,000 in direct compensation, other than director’s fees, during any of the previous three years. The NYSE imposes a higher independence standard for directors serving on the company’s audit committee by requiring them to comport with Rule 10A-3 (C.F.R. §240.10A-3) (see Rule 303A.06) and requires consideration by the board of directors of certain specified factors in designating directors for the Compensation Committee. See NYSE Rule 303A.02(a)(ii)

Finally, as the Commission has noted with respect to director independence:

All compensation committee members must meet the general independence standards under NYSE’s rules in addition to the two new criteria being adopted herein. The Commission therefore expects that boards, in fulfilling their obligations, will apply this standard to each such director’s individual responsibilities as a board member, including specific committee memberships such as the compensation committee. Although personal and business relationships, related party transactions, and other matters suggested by commenters are not specified either as bright-line disqualifications or explicit factors that must be considered in evaluating a director’s independence, the Commission believes that compliance with NYSE’s rules and the provision noted above would demand consideration of such factors with respect to compensation committee members, as well as to all Independent Directors on the board.

Exchange Act Release No. 68639 (Jan. 11, 2013); see also Exchange Act Release No. 68641 (Jan. 11, 2013).

Independent directors are compensated for their service on the board. The amount of “total compensation” can be seen from examining the director compensation table from the World Fuel Service’s (NYSE: INT) 2016 Proxy Statement. According to the proxy statement, the company paid the directors the following amounts:

Name	Fees Earned or paid in Cash ($)	Stock Awards ($)	Option Awards ($)	All Other Compensation ($)*	Total ($)
Ken Bakshi	120,250	139,984	-	-	260,234
Jorge L. Benitez	73,750	139,984	-	-	213,734
Richard A. Kassar	107,000	139,984	-	-	246,984
Myles Klein	70,000	139,984	-	-	209,984
John L. Manley	98,000	139,984	-	-	237,984
J. Thomas Presby	114,000	139,984	-	-	253,984
Stephen K. Roddenberry	92,083	139,984	-	-	232,067
Paul H. Stebbins	60,000	129,978	-	-	189,978

Director Compensation. During 2015, World Fuel Services held seven Board of Directors meetings. Each current director who served during 2015 attended at least 75% of the total number of meetings of the Board and the total number of meetings held by each of the Board committees on which he or he served. All non-management directors are reimbursed for travel, food, lodging and related expenses incurred in connection with attending board, committee and shareholder meetings, as well as continuing education programs.

Director Tenure. Mr. Kasbar, Mr. Klein, and Mr. Stebbins have each held the longest tenures in their positions as members of the Board of Directors since 1995. Mr. Benitez holds the shortest tenure, as he joined in 2015. Currently, three directors sit on other boards. Mr. Benitez serves as director and member of the risk and compliance committee of Fifth Third Bancorp. Mr. Presby serves as director and chairman of the audit committee of Exam Works Group, Inc., and as a director for First Solar, Inc. Mr. Stebbins serves as director for First Solar, Inc. and The Silk Road Project.

Executive Compensation. Michael J. Kasbar, World Fuel Services’ Chairman, President and Chief Executive Officer, earned a total compensation of $2,125,100 in 2015. His total compensation was comprised of a base salary of $750,000, stock awards of $436,208, incentive compensation of $650,000, option awards of $221,700, and other compensation totaling $67,192. Ira M. Birns, Executive Vice President and Chief Financial Officer, earned a total compensation of $1,076,552 in 2015. His compensation consisted of a base salary of $500,000, stock awards of $184,102, incentive compensation of $250,000, option awards of $88,680 and other compensation totaling $53,770. Other compensation included insurance benefits, club membership dues, and matching contributions paid under the companies 401(k) plan.