UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  ☒                                               Filed by a Party other than the Registrant  ☐

Check the appropriate box:

International Flavors & Fragrances Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Letter from the Chair & Chief Executive Officer

Dear Fellow Shareholder:

I am pleased to invite you to attend the 2021 Annual Meeting of Shareholders (“2021 Annual Meeting”) of International Flavors & Fragrances Inc.

It will be held at 10:00 a.m. Eastern Time on May 5, 2021 virtually and you can attend by visiting www.virtualshareholdermeeting.com/IFF2021. Please see “What do I need to do to attend the virtual 2021 Annual Meeting” on page 101 for further instructions.

Our Strategic Plan is Working

At the beginning of my tenure as Chief Executive Officer in 2014, we set out to re-define IFF with the ambitious goals of invigorating and exciting significantly more customers, challenging the boundaries of our industry and creating a foundation for long-term value creation. 2020 was a pivotal year in this journey. Our recently completed merger with DuPont’s Nutrition & Bioscience business transformed IFF into a global leader in high-value ingredients and solutions for the global food, beverage, home and personal care and health and wellness markets.

Throughout 2020, our team has worked relentlessly to align our business to realize the full potential of our new company while executing against our strategic pillars to establish IFF as our customers’ partner of choice, drive innovation across the portfolio, improve growth across key markets, leverage our expanded capabilities and portfolio across a broader customer base, build our talent and organization and continue our momentum in sustainability. IFF is now an approximately $35 billion market capitalization company, with an expected full year 2021 pro forma revenue of approximately $11.5 billion and approximately $2.7 billion of pro forma adjusted EBITDA – more than doubling the position we held just one year ago.¹

Through the careful execution of our strategy, we have created a global leader in taste, scent and nutrition. We now have an unmatched innovation platform and R&D capabilities and a broader set of ingredients solutions to offer a growing list of more than 45,000 customers. Importantly, our significantly refreshed Board of Directors and our experienced management team are laser-focused on continued flawless execution as we work to fully realize the full potential of our exciting new company.

We have prepared throughout the course of the year by realigning our global organization into four divisions – Nourish, Scent, Health & Biosciences and Pharma Solutions – to successfully integrate our business with N&B, meet our synergy commitments, better serve our customers’ evolving needs and maximize long-term shareholder value.

Key to Our Success

We place our customers and consumers at the center of everything we do, and this guiding principle continued to drive our success in 2020. But none of this would have been possible without our front-line workers and dedicated employees around the globe who worked tirelessly throughout the year to ensure the continuity of our business, fuel the global supply chain and fulfill the needs of our 45,000 customers worldwide.

Repeatedly throughout the COVID-19 pandemic, IFFers resiliently adapted, collaborated and innovated while managing supply chain disruptions and erratic customer demand to deliver for all IFF stakeholders. Our central vision – Be the partner for essential solutions – has guided our customer-centric strategy throughout 2020 and enabled us to consistently exceed expectations and fulfill the needs of our customers.

Thanks to the dedication of our employees and our relentless focus on our customers, we believe IFF is positioned for continued long-term success. The new IFF will be a stronger partner to customers worldwide, better positioned to apply science and creativity to push past traditional industry boundaries, as well as to capitalize on sustained and emerging consumer trends and heightened customer demand for

integrated solutions and innovations. This positions us well to serve the most diverse customer base in the industry, comprised of global multinational champions, regional leaders, new and emerging brands and private labels alike.

Looking ahead to 2021, we expect to build on the momentum generated in 2020 to drive continued innovation across our portfolio, including strong advancements in delivery systems, modulation and naturals, as well as seek new opportunities in emerging adjacencies. We will do this while doubling-down on our commitment to enhancing our best asset – our talent – as we continue to build our organization, define our operating model and focus on growth acceleration.

Corporate Social Responsibility

We strive to align environmental, social, and governance (“ESG”) issues to our purpose and values. Over the past few years, we have redefined the way we envision sustainability. Customers and consumers of our products want to know if the products they are purchasing are responsibly sourced and produced in an environmentally conscious manner. Our sustainability vision and strategy are designed to address these global trends, and we are committed to making progress happen at every opportunity. In 2020, we were named for the first time to the Dow Jones Sustainability Indices, a family of best-in-class benchmarks for investors who recognize that sustainable business practices are critical to generating long-term shareholder value.

Your vote is important. I encourage you to review this Proxy Statement and the Company’s other communications to its shareholders carefully.

Thank you for your support and interest in IFF.

Sincerely,

Andreas Fibig

Chair and Chief Executive Officer

Cautionary Statement Under The Private Securities Litigation Reform Act of 1995

This letter includes “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s expectations regarding the combination with DuPont de Nemours, Inc.’s (“DuPont”) Nutrition & Biosciences business. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the Company’s Securities and Exchange Commission (“SEC”) filings, including the Company’s Annual Report on Form 10-K filed with the SEC on February 22, 2021 and subsequent filings with the SEC. The Company wishes to caution readers that certain important factors may have affected and could in the future affect the Company’s actual results and could cause the Company’s actual results for subsequent periods to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on the Company’s business. Accordingly, the Company undertakes no obligation to publicly revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Notice of 2021 Annual Meeting of Shareholders

PROXY STATEMENT SUMMARY

2020 Highlights

We Continue to Position IFF for Significant Long-Term Growth

Amid the challenges and complexity of 2020, we finished the year with solid financial results. These results are a direct testament to the diversity of our business, the essential nature of many of our products and the resilience and dedication of our global teams to deliver performance across the organization.

* See reconciliation of GAAP to Non-GAAP financial measures in Exhibit A to this Proxy Statement.

In 2020, we executed towards the closing of our transformational combination with DuPont’s Nutrition & Biosciences business (“N&B Business”), while planning our integration with the N&B Business. With the closing of the combination with the N&B Business (the “N&B Transaction”) completed in February 2021, we realigned our global organization into four divisions to meet our synergy commitments, anticipate customer needs faster and deliver on our long-term growth and profitability goals. Our former Taste, Food & Beverage division is now called Nourish. To nourish is to feed with purpose, a commitment that guides IFF’s partnership with all of our stakeholders. In addition to Nourish, the combined company’s divisions include Scent, which pioneers the discovery and development of ingredients that create unique fragrances for fine perfumes, beauty, personal care and household goods; Health & Biosciences, a leading innovation partner developing safer, healthier and more sustainable solutions across a broad range of consumer product, industrial and agricultural sectors; and Pharma Solutions, a trusted leader in a highly regulated industry that develops the ingredients, products and applications that support the global production of pharma and dietary supplements.

Following the N&B Transaction and in 2021, we are now reimagining what it means to partner with our customers through a platform at the forefront of consumer and commercial product development and an enhanced ability to deliver in-demand, differentiated solutions. Guided by our customer-centric approach, unmatched R&D capabilities and a storied legacy of artistry, we are forging our way forward as a new industry leader.

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PROXY STATEMENT SUMMARY

Our Corporate Governance Policies Reflect Best Practices

Proposals and Board Recommendations

Proposal 1   Election of 13 Director Nominees						The Board recommends a vote FOR the election of all Director Nominees   Our Nominating and Governance Committee and our Board have determined that each of the nominees possesses the skills and qualifications to collectively comprise a highly effective Board. These 13 nominees include 6 directors designated by DuPont who joined our Board upon completion of the N&B Transaction in February 2021.
						See “Proposal 1 — Election of Directors” beginning on page 1 of this Proxy Statement.

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PROXY STATEMENT SUMMARY

Director Nominees

Committee Membership

Name and Primary  Occupation

Joined

Age

Indep.

Audit

Comp.

Nom.& Gov.

Inn. & Sus.

Kathryn J. Boor Dean of the Graduate School and Vice Provost for Graduate Education, Cornell University

2021

62

●

Edward D. Breen* CEO, DuPont de Nemours, Inc.

2021

65

●

●

Carol Anthony Davidson Former Senior Vice President, Controller & CAO of Tyco International Ltd.

2021

65

●

Michael L. Ducker Former President and CEO, FedEx Freight

2014

67

●

●

●

Roger W. Ferguson, Jr. President and CEO, TIAA

2010

69

●

●

John F. Ferraro Former Global COO, Ernst & Young

2015

65

●

Andreas Fibig Chair and CEO, IFF

2011

59

●

Christina Gold Former CEO, The Western Union Company

2013

73

●

●

Ilene Gordon Former Chair, President & CEO of Ingredion Incorporated

2021

67

●

●

Matthias J. Heinzel CEO, Life Science division of Merck KGaA, Darmstadt, Germany (effective April 1, 2021)

2021

54

●

●

Dale F. Morrison* Founding Partner of Twin Ridge Capital Management

2011

72

●

●

●

Kåre Schultz President and CEO, Teva Pharmaceutical Industries Ltd.

2021

59

●

●

Stephen Williamson Senior Vice President and CFO, Thermo Fisher Scientific

2017

54

●

Committee Chair         Financial Expert   *  Mr. Morrison is our current Lead Director. Mr. Breen will assume the role on May 5, 2021.

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PROXY STATEMENT SUMMARY

Skills and Qualifications

Our Board regularly evaluates desired attributes for directors in light of the Company’s strategy and needs. Key skills, qualifications and experience currently maintained on the Board include:

Proposal 2   Ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting  firm for the 2021 fiscal year				The Board recommends a vote FOR this proposal   Our Board recommends that shareholders vote “FOR” the ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the 2021 fiscal year.
				See “Proposal 2 — Ratification of Independent Registered Public Accounting Firm” beginning on page 37 of this Proxy Statement.

Proposal 3   Approve, on an advisory basis, the compensation of our named executive officers in 2020				The Board recommends a vote FOR this proposal   Our Board recommends a vote “FOR” the advisory vote to approve executive compensation for the 2020 performance year.
				See “Proposal 3 — Advisory Vote on Executive Compensation” on page 64 of this Proxy Statement and “Compensation Discussion and Analysis” beginning on page 41 of this Proxy Statement.

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PROXY STATEMENT SUMMARY

Compensation Governance

Our pay-for-performance compensation program is part of the strong compensation governance that we have adopted.

Proposal 4   Approve our 2021 Stock Award and Incentive Plan				The Board recommends a vote FOR this proposal   Our Board recommends a vote “FOR” the approval of our 2021 Stock Award and Incentive Plan.
				See “Proposal 4 — “Approval of our 2021 Stock Award and Incentive “Plan” on page 88 of this Proxy Statement and “2021 Stock Award and Incentive Plan” beginning on page A-1 of this Proxy Statement.

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PROXY STATEMENT SUMMARY

TABLE OF CONTENTS

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Proposal 1 Election of Directors

Our Current Board

Our Board of Directors (“Board”) currently has thirteen members, consisting of (i) seven directors who served on the Company’s Board prior to the closing of the merger with DuPont de Nemours, Inc.’s (“DuPont”) Nutrition & Biosciences business (the “N&B Transaction”) (the “IFF designated directors”) and (ii) six directors designated by the DuPont board of directors (the “DuPont designated directors”) pursuant to the terms of the Merger Agreement.

Upon the recommendation of the Nominating and Governance Committee, our Board has nominated the following current directors for election at the 2021 Annual Meeting, each for a one-year term that expires at the 2022 Annual Meeting:

Each director will serve until the next annual meeting of shareholders and until a successor is elected and qualified, or until his or her earlier resignation, removal, or death. If any of our Board’s nominees for director becomes unavailable to serve before the 2021 Annual Meeting (which we do not anticipate), our Board may decrease the number of directors to be elected or designate a substitute nominee for that vacancy.

Director Nominee Experience and Qualifications

Board Membership Criteria and Selection

Our Certificate of Incorporation provides that we have at least six but not more than 15 directors. To ensure independence and to provide the breadth of needed expertise and diversity of our Board, the Board periodically reviews its size and makes appropriate adjustments pursuant to our By-Laws. In addition, our Nominating and Governance Committee, together with the other Board members, from time to time, as appropriate, identify the need for new Board members.

Board candidates are considered based on various criteria which may change over time as our business evolves and as the composition of the Board changes. At a minimum, our Nominating and Governance Committee considers the following factors as part of its review of all director candidates and in recommending potential director candidates:

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 PROPOSAL 1 — ELECTION OF DIRECTORS 

Proposed director candidates who satisfy the criteria and who otherwise qualify for membership on the Board are identified by the Nominating and Governance Committee. In identifying candidates, the Nominating and Governance Committee seeks input and participation from other Board members and other appropriate sources so that all points of view are considered and the best possible candidates identified. The Nominating and Governance Committee may also engage a search firm to assist it in identifying potential candidates. Members of the Nominating and Governance Committee and other Board members, as appropriate, interview selected director candidates, evaluate the director candidates and determine which candidates are to be recommended by the Nominating and Governance Committee to the Board. Our Nominating and Governance Committee evaluates the suitability of potential candidates recommended by shareholders in the same manner as other candidates recommended to the Nominating and Governance Committee.

We believe that each of our nominees has the experience, skills and qualities to fully perform his or her duties as a director and to contribute to our success. Each of our nominees is being nominated because he or she adheres to the highest standards of personal integrity and possesses excellent interpersonal and communication skills, is highly accomplished in his or her field, has an understanding of the interests and issues that are important to our shareholders and is able to dedicate sufficient time to fulfilling his or her obligations as a director. Our nominees as a group complement each other and each other’s respective experiences, skills and qualities.

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 PROPOSAL 1 — ELECTION OF DIRECTORS  

Diversity and Tenure

Diversity is one of the factors that the Nominating and Governance Committee considers in identifying and selecting director nominees. The Board recognizes the value of diversity and strives to assemble a Board with diverse skills, professional experience, global, geographic and other perspectives, age, race, ethnicity, gender, gender identity, sexual orientation or identity, national origin and cultural background, to include in the pool from which nominees for the Board are selected.

In connection with the N&B Transaction, we refreshed our Board by appointing six new members and increasing the size of the Board from eleven to thirteen members. As a result, more than half of our directors currently have a tenure of less than 3 years and our average director tenure is 3.6 years.

We Strive for a Balanced and Diverse Board

Shareholder Nominations and Proxy Access

Under our By-Laws, if a shareholder wishes to submit a director candidate for consideration by the Nominating and Governance Committee, or wishes a director nomination to be included in the Company’s proxy statement for an annual meeting pursuant to our proxy access by-law, the shareholder must deliver or mail notice of the request to the Company’s Corporate Secretary, in writing, so that it is received not less than 90 days nor more than 120 days prior to the anniversary date of the prior year’s annual meeting of shareholders. However, if the annual meeting is not within 30 days of the anniversary date of the prior year’s annual meeting, such notice must be received by the Corporate Secretary no later than 10 days following the mailing of notice of the annual meeting or public disclosure of the annual meeting date, whichever occurs first. The notice must be accompanied by the information concerning the director candidate and nominating shareholder described in Article I, Section 3 and Section 4 of our By-Laws. The Nominating and Governance Committee may also request any additional background or other information from any director candidate or recommending shareholder as it may deem appropriate. Our proxy access by-law permits an eligible shareholder (or group of up to 20 eligible shareholders) who owns shares representing at least 3% of our outstanding shares, and has held the shares for at least three years, to nominate and include in our proxy materials for an annual meeting, director candidates constituting up to 20% of our Board.

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 PROPOSAL 1 — ELECTION OF DIRECTORS 

Continued Service

The Nominating and Governance Committee annually reviews each Board member’s suitability for continued service as a member of our Board and recommends to the Board whether such member should be re-nominated. In addition, each director is required to promptly tender his or her resignation for consideration to the Chair of the Nominating and Governance Committee if, during his or her tenure as a director, such director:

so that the Nominating and Governance Committee can review the change and make a recommendation to the full Board regarding the director’s continued service. Such resignation becomes effective only upon acceptance by the Board. In addition, if a Director is an active chief executive officer of another public company, such Director shall not serve on the board of more than two public companies (including IFF), other than the company of which he or she is the chief executive officer.

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 PROPOSAL 1 — ELECTION OF DIRECTORS 

Nominees for Director

Kathryn J. Boor

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 PROPOSAL 1 — ELECTION OF DIRECTORS  

Edward D. Breen

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PROPOSAL 1 — ELECTION OF DIRECTORS 

Carol Anthony (John) Davidson

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 PROPOSAL 1 — ELECTION OF DIRECTORS

Michael L. Ducker

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PROPOSAL 1 — ELECTION OF DIRECTORS 

Roger W. Ferguson, Jr.

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 PROPOSAL 1 — ELECTION OF DIRECTORS 

John F. Ferraro

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PROPOSAL 1 — ELECTION OF DIRECTORS 

Andreas Fibig

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 PROPOSAL 1 — ELECTION OF DIRECTORS 

Christina Gold

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PROPOSAL 1 — ELECTION OF DIRECTORS 

Ilene Gordon

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 PROPOSAL 1 — ELECTION OF DIRECTORS 

Matthias Heinzel

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PROPOSAL 1 — ELECTION OF DIRECTORS 

Dale F. Morrison

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 PROPOSAL 1 — ELECTION OF DIRECTORS 

Kåre Schultz

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PROPOSAL 1 — ELECTION OF DIRECTORS 

Stephen Williamson

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Corporate Governance

Code of Conduct

We have adopted a Code of Conduct that applies to all of our employees, including our Chief Executive Officer (“CEO”), our Chief Financial Officer (“CFO”) and our Chief Accounting Officer, as well as our Directors. Additionally, we have adopted a Code of Conduct for Directors and a Code of Conduct for Executive Officers (together with the Code of Ethics, the “Codes”). The Codes are available on our website at https://ir.iff.com/governance.

Only the Board or the Audit Committee may grant a waiver from any provision of our Codes in favor of a director or executive officer, and any such waiver and any amendments to the Codes will be publicly disclosed on our website, www.iff.com.

Shareholder Engagement

We regularly engage with our shareholders to better understand their perspectives on our Company, including our strategies, performance, acquisition-related activities, share price development, capital allocation policies and matters of corporate governance and executive compensation. This dialogue has helped inform the Board’s decision-making and ensure our interests remain well-aligned with those of our shareholders. During 2020, we interacted with our largest active shareholders, representing more than two-thirds of our outstanding shares. We believe that these engagements provide valuable feedback and this feedback is shared regularly with our Board and its relevant committees.

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines which set forth our governance principles relating to, among other things:

In 2020, the Board revised its Corporate Governance Guidelines to, among other things:

The Nominating and Governance Committee reviews our Corporate Governance Guidelines annually, and recommends changes to the Board as appropriate. A copy of our Corporate Governance Guidelines is available through the Investor—Leadership & Governance—Governance link on our website, www.iff.com.

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  CORPORATE GOVERNANCE 

Environmental, Social and Governance Initiatives

Over the past several years, we have redefined the way we envision sustainability. Moving from the traditional “take-make-dispose” model, we have embraced the circular economy model—one that is restorative and regenerative by design, which we believe is key in safeguarding the well-being of consumers, the health of our planet and the integrity of our business.

Customers and consumers of our products want to know if the products they are purchasing are responsibly sourced and produced in an environmentally conscious manner. Our sustainability vision and strategy are designed to address these global trends, and we are committed to making progress happen at every opportunity. Following the N&B Transaction and the Frutarom acquisition, we have been working on evaluating our expanded environmental footprint and integrating and updating the N&B Business’ and Frutarom’s sustainability practices to align them with legacy IFF sustainability practices.

In line with our combined company’s purpose of applying science and creativity for a better world, our sustainability goals include:

In 2020, we were named for the first time to the Dow Jones Sustainability Indices, a family of best-in-class benchmarks for investors who recognize that sustainable business practices are critical to generating long-term shareholder value. Named to both the 2020 World Index and the North America Index, this distinction validates IFF’s leadership position in sustainability performance and underscores our commitment to executing on key environmental, social and governance (ESG) priorities. We were also awarded the 2020 EcoVadis platinum sustainability rating, a highly selective designation by EcoVadis, a leading platform for monitoring sustainability in global supply chains. This distinction places IFF in the top 1% of companies assessed in the areas of Environment, Labor & Human Rights, Ethics and Sustainable Procurement. In addition, among other distinctions, in 2019 we were named one of Barron’s 100 Most Sustainable Companies for the third consecutive year and listed in the FTSE4Good Index series as well as in the Euronext Vigeo World 120 Index for ESG performance.

Our commitment to good governance starts with our Board and Executive Committee and is supported by a strong governance framework. This framework is implemented through our organization with frequent communications and trainings on best practices in governance, risk management, business conduct, compliance and ethics. Moreover, we adhere to the highest standards of ethics, integrity, honesty and respect in our dealings with each other and our business partners. To maintain those relationships and our strong reputation, we have a robust program to ensure compliance with our Codes.

We describe our environmental, social and governance programs and performance in more detail in our annual sustainability report, which is posted on our website for investors, customers and suppliers. More information on our governance initiatives can also be found throughout this proxy statement.

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 CORPORATE GOVERNANCE 

Independence of Directors

The Board undertakes an annual review of director independence, which includes a review of each director’s relationships with the Company. This review is designed to identify and evaluate, among other things, any transactions or relationships between a director or any member of his or her immediate family and the Company or members of our senior management.

The Board has affirmatively determined that each of our current directors (other than Mr. Fibig, our CEO) meets our independence requirements and those of the NYSE’s corporate governance listing standards. In the ordinary course of business, transactions may occur between the Company and entities with which some of our directors or their family members are or have been affiliated. In connection with its evaluation of director independence, our Board reviewed such transactions, and it has determined that these transactions do not impair the independence of the respective director.

Board Leadership Structure

As stated in our Corporate Governance Guidelines, the Board does not have a policy that requires a separation of the Chair of the Board (“Chair”) and CEO positions. The Board believes that it is important to have the flexibility to make this determination from time to time based on the particular facts and circumstances then affecting our business.

Currently, we combine the positions of Chair and CEO. We believe that the CEO, as the Company’s chief executive, is in the best position to fulfill the Chair’s responsibilities, including those related to identifying emerging issues facing our company, and communicating essential information to the Board about our performance and strategies. We also believe that the combined role of Chair and CEO provides us with a distinct leader and allows us to present a single, uniform voice to our customers, business partners, shareholders and employees. If the Board believes that its current leadership structure will be better served by separating the roles of Chair and CEO, it may then determine to separate these positions.

When the CEO and Chair roles are combined, the independent Directors of the Board may elect a Lead Director to facilitate and strengthen the Board’s independent oversight of our performance, strategy and succession planning and to promote effective governance standards. The independent directors of the Board elect the Lead Director from among the independent directors on an annual basis. Our current Lead Director is Mr. Morrison. Mr. Breen will assume the role of Lead Director at the 2021 Annual Meeting.

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CORPORATE GOVERNANCE 

Board Committees

Our Board has an Audit Committee, a Compensation Committee, a Nominating and Governance Committee and an Innovation and Sustainability Committee, each of which operates under a written charter adopted by the Board. Each Committee reviews its charter annually and recommends charter changes to the Board as appropriate. In 2020, each of the Audit Committee, Compensation Committee, Nominating and Governance Committee and Innovation and Sustainability Committee reviewed its charter, and amended it where appropriate. Each Committee charter provides that the Committee will annually review its performance, and each Committee reviewed and discussed its performance in 2020. A current copy of each of the Audit Committee, Compensation Committee, Nominating and Governance Committee, and Innovation and Sustainability Committee charters is available through the Investor—Governance link on our website, www.iff.com.

The table below provides the current membership and chair for each of our Committees and identifies our current Lead Director.

Name		Audit		Compensation		Nominating and Governance		Innovation and   Sustainability
Kathyrn J. Boor
Edward D. Breen*						●
Carol Anthony Davidson		●
Michael L. Ducker				●				●
Roger W. Ferguson, Jr.						●
Andreas Fibig								●
John F. Ferraro
Christina Gold				●
Ilene Gordon				●
Matthias Heinzel								●
Dale F. Morrison*		●		●		●
Kåre Schultz						●
Stephen Williamson		●						●

= Committee Chair

*= Lead Director. Mr. Morrison is our current Lead Director. Mr. Breen will assume the role of Lead Director on May 5, 2021.

Board and Committee Meetings

Our Board held eight meetings during 2020. The Audit Committee held seven meetings, the Compensation Committee held six meetings, the Nominating and Governance Committee held four meetings, and the Innovation and Sustainability Committee held four meetings during 2020. All incumbent directors attended at least 75% of the total Board and Committee meetings on which he or she served during 2020. All of our directors who were serving on the day of last year’s annual meeting of shareholders attended that meeting. Under our Corporate Governance Guidelines, unless there are mitigating circumstances, such as medical, family or business emergencies, Board members endeavor to participate in all Board meetings and all Committee meetings of which the director is a member and to attend our annual meeting of shareholders. Our non-employee directors, all of whom are currently independent, meet in executive session, without the presence of any corporate officer or member of management, in conjunction with regular meetings of the Board and Committees.

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 CORPORATE GOVERNANCE 

Audit Committee

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CORPORATE GOVERNANCE 

Compensation Committee

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 CORPORATE GOVERNANCE   

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 CORPORATE GOVERNANCE 

Nominating and Governance Committee

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 CORPORATE GOVERNANCE 

Innovation and Sustainability Committee

Board and Committee Assessment Process

Each year, the Nominating & Governance Committee leads an evaluation of the effectiveness of the Board and each of its committees. Each member of the Board responds to an anonymous survey regarding the effectiveness of the Board, its committees and their leadership, and the dynamics between the Board and management. The Board supplements this process through the use of in-person director interviews every other year during which the Lead Director and the Chair of the Nominating & Governance Committee interviews each director to obtain his or her assessment of the effectiveness of the Board and its committees. After consulting with each other, the Lead Director and Chair of the Nominating & Governance Committee summarize and review the results with the Board.

Succession Planning

Our Board recognizes that one of its most important duties is to ensure excellence and continuity in our senior leadership by overseeing the development of executive talent and planning for the effective succession of our Chair and CEO and other senior members of executive management. As part of this process, our CEO and our executive officers are required to prepare a detailed development and succession plan for themselves and for their direct reports on an annual basis. The Company’s executives regularly attend Board meetings and maintain an ongoing dialogue with Board members, which is critical to the Company’s succession planning. The Compensation Committee reviews, on an annual basis, potential successors for the Company’s executive officers and such other senior management employees as the Compensation Committee may determine. In addition, the Nominating and Governance Committee also agrees upon and recommends to the Board a succession plan for our CEO, including in emergency situations. Our Board is committed to being prepared for a planned or unplanned change in our leadership in order to ensure our stability.

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 CORPORATE GOVERNANCE 

Risk Management Oversight

Our Board is actively involved in the oversight of risks that could affect our Company and is responsible for overseeing and reviewing with management the Company’s enterprise-wide risks and the policies and practices established to manage such risks. It is the responsibility of the CEO and other senior management to manage the Company’s day-to-day business risks and its risk management process. We believe this division of responsibility is the most effective approach for addressing risk management.

Board and Committee Roles in Overseeing Risk 

The Board exercises its risk oversight function both at the Board level and by delegating to its committees. The Board and its committees focus on operational risk, financial risk, regulatory risk, litigation risk, cybersecurity and information security risk, tax risk, credit risk, liquidity risk, compliance risk as well as our general risk management strategy, and how these risks are being managed. The Board receives updates on the Company’s risk through management’s enterprise risk management (“ERM”) program report to the Board, which includes management’s approach to mitigating and managing such risks. The Board also receives updates on the Company’s risk from its committees. Each of the Audit, Nominating and Governance, Compensation, and Innovation and Sustainability Committee is responsible for the oversight of risks relevant to its function (as described above) and regularly reports to the Board. The Board believes that its risk oversight structure allows for open communication between the Board, its committees and management.

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 CORPORATE GOVERNANCE 

Management

Management maintains an ERM program which is designed to identify and assess our global risks and to develop steps to mitigate and manage risks. As part of its risk management practices, the Company has established a management risk committee chaired by the CFO and General Counsel and made up of key members of the Company’s management to integrate global risk activities (including cybersecurity, compliance, business, human resources and crisis management) and to ensure appropriate prioritization of resources and alignment across the Company. The Board receives regular reports on the ERM process and the Company’s risk mitigation activities, including reports focused on compliance, human capital, cyber security and sustainability risks.

Compensation Risks

In the fourth quarter of 2020, the Compensation Committee, working with its independent compensation consultant, conducted a risk assessment of our executive compensation programs. The goal of this assessment was to determine whether the general structure of our executive compensation policies and programs, annual and long-term performance goals or the administration of the programs posed any material risks to our Company. In addition, with the input from our Chief Human Resources and Diversity and Inclusion Officer, the Compensation Committee reviewed compensation programs and policies below the executive level in a Company-wide risk assessment. The Compensation Committee shared the results of this review with our full Board.

The Compensation Committee determined, based on the reviews of its independent compensation consultant and management’s input and other factors, that the compensation policies and practices for the Company’s employees in 2020, including the established performance goals and incentive plan structures, did not result in excessive risk taking or the implementation of inappropriate business decisions or strategies by the Company’s executives or employees generally, and that there are no risks arising from our compensation policies and practices for our employees that are reasonably likely to have a material adverse effect on the Company.

Human Capital Management

The success of our business is built on our talented employees. At December 31, 2020, prior to the N&B Transaction we had approximately 13,700 employees worldwide, of whom approximately 2,000 are employed in the United States. With the completion of the N&B Transaction, we added more than 10,000 employees around the world, of whom approximately 30% are employed in the United States.

Culture and Values. Our culture is based on our five corporate values of: empowerment, expertise, innovation, integrity and responsibility, and the expression of these values can be seen and felt throughout our history. Our employees appreciate that they contribute to products that touch and enhance the lives of millions of people around the world. In 2020, we implemented a high-performing culture employee engagement initiative designed to further underscore three key attributes of our culture: extreme accountability, bias toward action and effective collaboration. Throughout the year, we engaged with employees around the world as part of this initiative, including senior leader speakers, employee training, employee recognition programs and designating a large number of local employee ambassadors.

Leadership and Development. Our leadership development efforts empower employees to become forward-looking, inspiring and capable decision-makers, agents of change and great leaders. To cultivate our employees’ talent and build sustainable long-lasting careers at IFF, we offer specialized courses for employees globally by partnering with leading institutions and universities to help fulfill our firm commitment of providing the latest training and development offerings at all levels. We also offer to our employees an extensive library of on-demand courses and materials on leadership, management and professional skills development. These offerings complement our talent management’s focus on a strong talent acquisition strategy and an organized and personalized feedback process, supported by industry-leading assessment tools.

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 CORPORATE GOVERNANCE  

Diversity and Inclusion. We believe that our differences make us great, as captured in our diversity and inclusion (D&I) vision: “Your Uniqueness Unleashes Our Potential.” To that end, we are dedicated to nurturing a truly inclusive and fair culture through the three pillars of our D&I mission:

In 2020, IFF developed and delivered a broad range of initiatives to support our D&I vision. As part of IFF’s journey to gender parity, the Company in 2020 underwent a rigorous global verification process and attained the Economic Dividends for Gender Equity (EDGE) certification at the MOVE level in 21 countries worldwide, which included an examination of our gender balance across our talent pipeline, gender pay equity, the effectiveness of our framework of policies and practices that ensure equitable career flows and our ability to foster an inclusive workplace culture for all employees. IFF also achieved 100% scores in the Disability Equality Index and achieved the title of best employer for LGBTQ+ employees rating with 100% scores in the Human Rights Campaign Corporate Equality Index and the HRC Equidad Mexico. At the same time, employee resource groups known as “colleague communities” continue to thrive and grow with women@iff and pride@iff opening new chapters at our offices around the world and new colleague communities launching in 2020, such as Soul Black (Brazil) and Black Excellence (USA), as well as SERVE, which supports veteran and first responder issues.

Occupational Health & Safety. Employee safety is one of the cornerstones of our business. Our occupational health and safety management system requires and encourages employees and supervised contractors at sites globally to uphold IFF’s protocols, report any incidents and suggest improvements that will increase the safety of work sites. Our safety management system in each country is based on local regulations. In the absence of country-specific requirements, IFF guidelines are implemented, which are based on U.S. Occupational Safety and Health Administration (OSHA) standards. To work toward a safer workplace, we have put in place a set of protocols and programs related to three areas of focus: (a) safety governance (setting and updating comprehensive safety policies and procedures), (b) safety training of employees on local requirements and IFF policies, and (c) safety culture characterized by awareness and communication. In response to the COVID-19 pandemic, we have been following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of our workforce. Moreover, we have developed return-to-workplace protocols and mandatory site guidelines to continue to protect the health and safety of employees at each location and to promote an orderly and phased return for employees who have been working from home.

Related Person Transactions and Other Information

Transactions with Related Persons

In 2020, there were no transactions and there are no currently proposed transactions in excess of $120,000 in which the Company was or will be a participant and in which any director or executive officer of the Company, any known 5% or greater shareholder of the Company or any immediate family member of any of the foregoing persons, had or will have a direct or indirect material interest as defined in Item 404(a) of Regulation S-K.

Related Person Transactions Policy

In accordance with SEC rules, our Board has adopted a written policy for the review and the approval of related person transactions. This policy is available through the Investor—Leadership & Governance—Governance link on our website, www.iff.com. Under the policy, a “related person” is specifically defined as an executive officer, a director, a director nominee, a beneficial owner of more than 5% of any class of

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 CORPORATE GOVERNANCE 

voting securities, an immediate family member of any of the foregoing, or a controlled entity, which is defined as an entity owned or controlled by any of the foregoing or in which any such person serves as an officer or partner, or together with all of the foregoing persons, owns 5% or more equity interests. The policy defines a “related person transaction” as a transaction or series of transactions involving a related person and the Company, excluding employment arrangements involving an executive officer or other senior officer or employee of the Company and director compensation arrangements. The policy requires that any such transaction be approved or ratified by the Nominating and Governance Committee. If accounting issues are involved in the transaction, the Nominating and Governance Committee will consult with the Audit Committee if deemed appropriate.

Pursuant to the policy, a related person transaction will be approved or ratified only if the Nominating and Governance Committee determines that it is being entered into in good faith and on fair and reasonable terms which are in the best interest of our Company and our shareholders. In determining whether to approve or ratify a transaction, the Nominating and Governance Committee considers the following factors, to the extent relevant:

No related person may participate in the review of a transaction in which he or she may have an interest. In addition, except for non-discretionary contributions made pursuant to our matching contributions program, a charitable contribution by our Company to an organization in which a related person is known to be an officer, director or trustee, is subject to approval by the Nominating and Governance Committee. In 2020, there were no related person transactions presented under the policy.

Share Retention Policy

We encourage our executives and directors to own our common stock so that they share the same long-term investment risk as our shareholders. Our Share Retention Policy provides executives and directors flexibility in personal financial planning, yet requires them to maintain ongoing and substantial investment in our common stock. In 2020, the Compensation Committee reviewed our Share Retention Policy with input from management and FW Cook and did not make any substantive changes to the policy.

If an executive or director does not meet the targeted ownership level, the executive or director may not sell or transfer any shares held in an equity, a deferred compensation or a retirement plan account provided by the Company, and the executive or director must retain such shares in such accounts until the targeted ownership level is met. For executives, if their retention requirement is not met, the executive is required to retain a portion of any shares of common stock acquired as a result of exercising any stock settled appreciation right (“SSAR”) or as a result of the vesting of restricted stock or a restricted stock unit (“RSU”) (after payment of any exercise price and taxes).

As of December 31, 2020, all of our named executive officers and directors were in compliance with our Share Retention Policy. Additional detail regarding ownership of our common stock by our executive officers and directors is included in this proxy statement under the heading “Securities Ownership of Management, Directors and Certain Other Persons.”

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 CORPORATE GOVERNANCE 

Equity Grant Policy

The Compensation Committee has adopted an Equity Grant Policy with respect to the issuance of equity awards under our equity plans. Under the Equity Grant Policy, the Compensation Committee approves all equity awards to our executive officers (other than our CEO) and certain other members of senior management, and our Board approves all equity awards to our CEO and to our non-employee directors. The grant date for annual awards to all employees (other than awards under our Long Term Incentive Plan, “LTIP”) and for annual awards to our non-employee directors is the date of the Company’s annual meeting of shareholders. The grant date for awards under our LTIP is the date that the applicable metrics are approved. In addition to the annual grants, equity awards may be granted “off-cycle” at other times during the year to new hires, for promotions, retention purposes, director appointments or other special circumstances. The grant price of equity awards (other than LTIP awards) is the closing price of our common stock on the NYSE on the date of the grant. The grant price for LTIP awards is the trailing twenty-day average closing price of our common stock on the NYSE as of the first trading day of the applicable LTIP performance.

Policy Regarding Derivatives, Short Sales, Hedging and Pledges

Under our insider trading policy, directors and all employees, including our named executive officers, are prohibited from entering into transactions designed to hedge against economic risks associated with an investment in our common stock. These individuals may not trade in derivatives in our securities (such as put and call options), effect “short sales” of our common stock, or enter into monetization transactions or similar arrangements (such as prepaid variable forwards, equity swaps, collars or exchange funds) relating to our securities. These individuals are also prohibited from holding shares of our common stock in margin accounts or pledging shares of our common stock as collateral for a loan.

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Directors Compensation

Director Compensation Program

Annual Director Cash and Equity Compensation

Under our non-employee director compensation program, for the service year from the 2020 Annual Meeting of Shareholders (the “2020 Annual Meeting”) to the 2021 Annual Meeting, each non-employee director received an annual retainer of $250,000, of which $112,500 was paid in cash and $137,500 was paid in RSUs issued under our 2015 Stock Award and Incentive Plan (“2015 SAIP”) on the date of the 2020 Annual Meeting. These RSUs vest one year from the grant date and are subject to accelerated vesting upon a change in control. The 1,047 RSUs granted to each director on the date of the 2020 Annual Meeting was calculated using the closing market price of our common stock on the grant date. Any director who is an employee of our Company does not receive any additional compensation for his or her service as a director.

Compensation for our Lead Director and Committee Chairs

For the service year from the 2020 Annual Meeting to the 2021 Annual Meeting, the Lead Director received an additional annual cash retainer of $25,000, the Chair of the Audit Committee received an additional annual cash retainer of $20,000, the Chair of the Compensation Committee received an additional annual cash retainer of $17,500, the Chair of the Nominating and Governance Committee received an additional annual cash retainer of $15,000.

Participation in our Deferred Compensation Plan

Non-employee directors are eligible to participate in our Deferred Compensation Plan (“DCP”). A non-employee director may defer all or a portion of his or her cash compensation as well as any RSUs granted to him or her, subject to tax law requirements. Additional details regarding our DCP may be found in this proxy statement under the heading “Executive Compensation—Non-Qualified Deferred Compensation.” Non-employee directors are not entitled to matching contributions or the 25% premium on deferrals into our common stock fund that are applicable to employees under the DCP.

Additional Benefits

We reimburse our non-employee directors for travel and lodging expenses incurred in connection with their attendance at Board and Committee meetings, our shareholder meetings and other Company-related activities. In addition, our current directors are eligible to participate in our Matching Gift Program. Under this program, we match, on a dollar for dollar basis, contributions made by directors to qualifying charitable organizations up to a maximum of $10,000 per person per year.

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 DIRECTORS’ COMPENSATION 

The following table details the compensation paid to or earned by our non-employee directors for the year ended December 31, 2020.

2020 Directors’ Compensation

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 DIRECTORS’ COMPENSATION 

The deferred shares, which are held under the DCP, result from deferral of vested equity grants, voluntary deferral of retainer fees or the crediting of additional share units as a result of reinvestment of dividend equivalents. Deferred shares will be settled by delivery of common stock upon the director’s separation from service on the Board, or as otherwise elected by the director. All of the deferred shares are included for each director in the Beneficial Ownership Table.

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Securities Ownership

Directors and Executive Officers

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 8, 2021, by each current director, each director nominee, the persons named in the Summary Compensation Table in this proxy statement and all current directors and executive officers as a group. To our knowledge, except as otherwise indicated, beneficial ownership includes sole voting and dispositive power with respect to all shares.

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 SECURITIES OWNERSHIP 

5% Shareholders

The following table sets forth information regarding each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, as of March 8, 2021, based on a review of filings with the SEC. Unless otherwise indicated, beneficial ownership is direct.

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Proposal 2 Ratification of Independent Registered Public Accounting Firm

Selection of our Independent Registered Public Accounting Firm

The Audit Committee of our Board is directly responsible for the appointment, compensation, retention and oversight of our independent registered public accounting firm. To execute this responsibility, the Audit Committee engages in a comprehensive annual evaluation of the independent registered public accounting firm’s qualifications, performance and independence to determine whether the independent registered public accounting firm should be rotated, and considers the advisability and potential impact of selecting a different independent registered public accounting firm.

The Audit Committee has selected PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for 2021, and our Board has directed that our management submit that selection for ratification by our shareholders at the 2021 Annual Meeting. PwC has been retained as our external auditor continuously since 1957. In connection with the selection of PwC, the Audit Committee annually reviews and negotiates the terms of the engagement letter entered into with PwC. This letter sets forth important terms regarding the scope of the engagement, associated fees, payment terms, responsibilities of each party and the election of the parties to be subject to binding arbitration in the case of any dispute.

In accordance with SEC rules and PwC policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit service to our Company. For lead and quality review audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of our lead audit partner pursuant to this rotation policy involves a meeting between the Chair of the Audit Committee and the candidate for the role, as well as discussion by the full Audit Committee and management.

The Audit Committee and the Board believe that the continued retention of PwC as our independent registered public accounting firm is in the best interest of the Company and our shareholders, and we are asking our shareholders to ratify the selection of PwC as our independent registered public accounting firm for 2021. Although ratification is not required by our By-Laws or otherwise, we are submitting the selection of PwC to our shareholders for ratification because we value our shareholders’ views on our Company’s independent registered public accounting firm and as a matter of good corporate governance. The Audit Committee will consider the outcome of our shareholders’ vote in connection with the Audit Committee’s selection of our independent registered public accounting firm in the next fiscal year, but is not bound by the shareholders’ vote. Even if the selection is ratified, the Audit Committee may, in its discretion, direct the appointment of a different independent registered public accounting firm at any time if it determines that a change would be in the best interests of our Company and our shareholders.

Representatives of PwC are expected to attend the 2021 Annual Meeting, where they will be available to respond to questions and, if they desire, to make a statement.

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 PROPOSAL 2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

Principal Accountant Fees and Services

The following table provides detail about fees for professional services rendered by PwC for the years ended December 31, 2020 and December 31, 2019.

Pre-Approval Policies and Procedures for Audit and Permitted Non-Audit Services

Consistent with requirements of the SEC and the Public Company Accounting Oversight Board (PCAOB) regarding auditor independence, the Audit Committee has responsibility for:

In recognition of this responsibility, the Audit Committee has established policies and procedures to pre-approve all audit and non-audit services to be provided by the independent registered public accounting firm to our Company by category, including audit-related services, tax services and other permitted non-audit services. Under the policy, the Audit Committee pre-approves all services obtained from our independent registered public accounting firm by category of service, including a review of specific services to be performed, fees expected to be incurred within each category of service and the potential impact of such services on auditor independence. The term of any pre-approval is for the financial year, unless the Audit Committee specifically provides for a different period in the pre-approval. If it becomes necessary to engage the independent registered public accounting firm for additional services not contemplated in the original pre-approval, the Audit Committee requires separate pre-approval before engaging the independent registered public accounting firm. To facilitate the process, the policy delegates pre-approval authority to the Audit Committee chairperson to pre-approve services up to $100,000, and the Audit Committee may also delegate authority to one or more of its members to pre-approve services. The Audit Committee member to whom such authority is delegated must report, for informational purposes, any pre-approval decisions to the Audit Committee at its next scheduled meeting.

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 PROPOSAL 2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

All services rendered by PwC to our Company are permissible under applicable laws and regulations. During 2020, all services performed by PwC which were subject to the SEC’s pre-approval requirements were approved by the Audit Committee in accordance with the Audit Committee’s pre-approval policy in effect during 2020.

Audit Committee Report

The Audit Committee (“we” “us” or the “Committee”) operates in accordance with a written charter, which was adopted by the Board. A copy of that charter is available through the Investor—Leadership & Governance—Governance link on the Company’s website at www.iff.com. The Committee is composed of four directors whom the Board has determined are “independent,” as required by the applicable listing standards of the NYSE and the rules of the SEC, and all of whom qualify as “audit committee financial experts” as defined by the rules of the SEC.

Management has the primary responsibility for the financial statements and the reporting process, including internal control over financial reporting and disclosure controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP (“PwC”), is responsible for performing an integrated audit of the Company’s financial statements and internal control over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (“PCAOB”).

The Committee oversees the Company’s financial reporting process and internal control structure on behalf of the Board. We met seven times during 2020, including meeting regularly with PwC and the Company’s internal auditor, both privately and with management present. For 2020, we have reviewed and discussed the Company’s audited financial statements with management. We have reviewed and discussed with management its process for preparing its report on its assessment of the Company’s internal control over financial reporting, and at regular intervals we received updates on the status of this process and actions taken by management to respond to issues and deficiencies identified. We discussed with PwC its audit of the financial statements and of the Company’s internal control over financial reporting. We discussed with PwC and the Company’s internal auditor the overall scope and plans for their respective audits.

We have discussed with PwC the matters required to be discussed by the applicable requirements of the PCAOB and the SEC. We also received the written disclosures and the letter from PwC as required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and discussed with PwC its independence. We concluded that PwC’s independence was not adversely affected by the non-audit services provided by PwC, the majority of which consisted of audit-related, tax compliance and other tax services arising from our acquisition of Frutarom.

Based on the reviews and discussions referred to above, we recommended to the Board (and the Board subsequently approved our recommendation) that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on February 22, 2021.

In determining whether to retain PwC as the Company’s independent registered public accounting firm for the 2021 fiscal year, we took into consideration a number of factors, including:

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 PROPOSAL 2 — RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 

Based on this evaluation, we believe that it is in the best interests of the Company and its shareholders to retain PwC as the Company’s independent registered public accounting firm for 2021, which the shareholders will be asked to ratify at the 2021 Annual Meeting of Shareholders.

Audit Committee

John F. Ferraro (Chair)

Carol Anthony (John) Davidson

Dale F. Morrison

Stephen Williamson

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Compensation Discussion and Analysis

Reference Guide to our CD&A

This Compensation Discussion and Analysis, or CD&A, describes and analyzes our executive compensation philosophy and program in the context of the compensation paid during the last fiscal year to our chief executive officer, our chief financial officer, our former chief financial officer and each of our three most highly compensated executive officers (collectively referred to as our NEOs). This CD&A is organized as follows:

As discussed in Proposal 3, we are conducting our annual Say on Pay vote that requests your approval of the compensation of our NEOs as described in this section and in the tables and accompanying narrative contained below under “Executive Compensation.” To assist you with this vote, please review our compensation philosophies, the design of our executive compensation programs and how, we believe, these programs have contributed to and are aligned with our performance.

Amid the challenges and unpredictability of the past year, including the COVID-19 crisis, macro-economic uncertainty and the closing and the integration of our transformational combination with the N&B Business, our employees (including our NEOs) have demonstrated resilience, collaboration, flexibility and innovation as we continued to deliver for all of our stakeholders. We remained focused on achieving our strategic growth initiatives and realizing the full potential of our combination with the N&B Business by finalizing the organization’s leadership, operational structure, brand identity and foundational vision. In addition, our diverse product portfolio, which will be further bolstered by our combination with the N&B Business, and our strong cash position have provided us with the stability and market position necessary to navigate the current environment.

We continued to benefit from strong demand for Consumer Fragrances, particularly Home Care and Personal Wash products, while demand for Fine Fragrance and Food Service were negatively impacted by COVID-19 challenges.

While we continued to execute on our strategic goals during 2020, our financial results reflected the external challenges that we faced. As a result, while we believe we are on pace to deliver on our long-term guidance to shareholders, the compensation paid to our NEOs for 2020 was significantly below target and, with respect to certain elements of compensation, below 2019 compensation.

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 COMPENSATION DISCUSSION AND ANALYSIS 

Executive Summary

For 2020, our NEOs were:

Compensation Philosophy

The core of our executive compensation philosophy is that our executives’ compensation should be linked to achievement of financial and operating performance metrics that build shareholder value over both the short- and long-term. As such, we consistently focus on the following key drivers of shareholder value maximization:

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 COMPENSATION DISCUSSION AND ANALYSIS 

We designed our compensation program to focus on elements that we believe will contribute to these shareholder value drivers. Our compensation program:

The design of our executive compensation program reflects our belief that executive compensation should be (1) aligned with the achievement of financial and operational metrics for both our Company and the respective business unit function in which the executive serves and (2) tied to the total shareholder return delivered to our shareholders. The following illustrates how our CEO’s and other NEOs’ total direct compensation is designed to tie a significant portion of their compensation to variable and long-term goals:

CEO Target Opportunity Mix

NEO Average (excluding CEO) Target Opportunity Mix

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 COMPENSATION DISCUSSION AND ANALYSIS 

Our 2020 NEO Compensation Reflects our 2020 Performance

While we delivered on our cash drivers—corporate working capital and corporate capital expenditures—we were challenged on the top-line growth for Taste and our consolidated results. In particular, Taste sales decreased 3% on a reported basis and 2% on a currency neutral basis, due to COVID-19. However, Scent delivered both on sales and operating profit. For example, sales increased 2% on a reported basis and 3% on a currency neutral basis. The AIP payout for our NEOs for the year reflected these results.

NEOs evaluated at the corporate level received AIP payouts of approximately 39.1% of their respective target opportunity, our Former Divisional CEO, Taste received an AIP payout of approximately 24.0% of his target opportunity and our Divisional CEO, Scent received an AIP payout of approximately 93.6% of his target opportunity.

With respect to our LTIP awards, our overall net income resulted in economic profit (“EP”) performance for 2020 below the threshold level established at the beginning of the three-year cycle and our Total Shareholder Return relative to the S&P 500 for the three-year period ending in 2020 was below the 35th percentile threshold. Consequently, none of our NEOs earned any amounts under the outstanding LTIP cycles for our 2020 performance.

Compensation Governance

To ensure continued alignment of compensation with Company performance and the creation of shareholder value on a long-term, sustainable basis, we maintain strong compensation-related corporate governance policies.