UNITED STATES
SECURITIES AND EXCHANGE COMMISSION​
Washington, D.C. 20549​

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

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Preliminary Proxy Statement

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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §240.14a-12

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HOWMET AEROSPACE INC.​

(Name of Registrant as Specified In Its Charter)​

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)​

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Letter to our Shareholders

April 29, 2020

Dear Howmet Aerospace Shareholders:

You are cordially invited to attend the 2020 Annual Meeting of Shareholders of Howmet Aerospace Inc. to be held on Monday, June 15, 2020, at 8:00 a.m. Eastern Time. The 2020 Annual Meeting will be a virtual meeting, conducted via live webcast. Due to the emerging public health impact of the coronavirus outbreak (COVID-19), and out of our concern for the health and safety of our shareholders, directors, and employees, the annual meeting will be held in a virtual meeting format only. There will be no physical location for shareholders to attend the meeting. In light of the recent developments, including current travel and gathering limitations, a virtual meeting format provides our shareholders with an opportunity to attend and participate in the meeting. You will be able to virtually attend the annual meeting, vote your shares electronically and submit questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/HWM2020 and entering your 16-digit control number.

We are pleased to present you with our 2020 Proxy Statement, which represents our continuing commitment to transparency, good governance and performance-based executive compensation, and reflects the input we have received during dialogue with our investors. At the 2020 Annual Meeting, shareholders will electronically vote on the matters set forth in the 2020 Proxy Statement and the accompanying notice of the annual meeting. Highlights of the detailed information included in the proxy statement can be found in the “Proxy Summary” starting on page 1.

Your vote is very important. Whether or not you will attend the virtual meeting, we hope that your shares are represented and voted. In advance of the meeting on Monday, June 15, 2020, please cast your vote through the Internet, by telephone or by mail. Instructions on how to vote are found in the section entitled “Proxy Summary—How to Cast Your Vote” on page 1.

Thank you for being a shareholder of Howmet Aerospace. On behalf of the Board of Directors and employees of the company, we appreciate your continued support.

Sincerely,

John C. Plant
Executive Chairman and Co-Chief Executive Officer

Notice of 2020 Annual Meeting of Shareholders

The 2020 Annual Meeting of Shareholders of Howmet Aerospace Inc. (“Howmet Aerospace” or the “Company”) will be held on Monday, June 15, 2020, at 8:00 a.m. Eastern Time. In light of the public health impact of the coronavirus (“COVID-19”) pandemic and in order to protect the health and well-being of our shareholders, directors and employees, the annual meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/HWM2020 or can be accessed via the company website at http://www.howmet.com under “Investors—Annual Meeting”. There will be no physical in-person meeting.

Shareholders of record of Howmet Aerospace common stock as the close of business on April 27, 2020 are entitled to vote at the meeting. Shareholders will be able to virtually attend the annual meeting, vote their shares electronically and submit questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/HWM2020 and entering their 16-digit control number. Voting now at www.proxyvote.com will ensure your representation at the annual meeting regardless of whether you participate in our live webcast. If you have already voted, there is no need to vote again unless you wish to change your vote.

The purposes of the meeting are:

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to elect 10 directors to serve one-year terms expiring at the 2021 Annual Meeting of Shareholders;

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to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020;

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to approve, on an advisory basis, executive compensation;

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to vote on a shareholder proposal, if properly presented at the meeting; and

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to transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

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For further information about how to participate in the meeting via live webcast, and how to submit questions and vote your shares during the live webcast, please see the “Questions and Answers About the Meeting and Voting” section of the proxy statement. A complete list of shareholders entitled to vote at the meeting will be available for examination during the meeting at www.virtualshareholdermeeting.com/HWM2020.

On behalf of Howmet Aerospace’s Board of Directors,

Katherine Hargrove Ramundo
Executive Vice President, Chief Legal Officer and Secretary

April 29, 2020

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Proxy Statement

   

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 15, 2020

The Notice of 2020 Annual Meeting of Shareholders and Proxy Statement and 2019 Annual Report are available at www.proxyvote.com.
 

 

The Board of Directors of Howmet Aerospace Inc. (“Howmet Aerospace” or the “Company”) is providing this proxy statement in connection with Howmet Aerospace’s 2020 Annual Meeting of Shareholders to be held on Monday, June 15, 2020 at 8:00 a.m. Eastern Time via live webcast at www.virtualshareholdermeeting.com/HWM2020 or can be accessed via the company website at http://www.howmet.com under “Investors—Annual Meeting”. Shareholders may attend the virtual meeting, vote their shares and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/​HWM2020. There will be no physical in-person meeting.

Proxy materials or a Notice of Internet Availability of Proxy Materials (the “Notice”) are being first released to shareholders on or about April 29, 2020. In accordance with the rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of the Company’s proxy materials to each shareholder of record, the Company may furnish proxy materials by providing access to those documents on the Internet. The Notice contains instructions on how to access our proxy materials and vote online, or in the alternative, request a paper copy of the proxy materials and a proxy card. Shareholders who do not receive the Notice will continue to receive either a paper or an electronic copy of our proxy materials.

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Table of Contents

Proxy Summary

We provide below highlights of certain information in this Proxy Statement. As it is only a summary, please refer to the complete Proxy Statement and the 2019 Annual Report of Howmet Aerospace Inc. (formerly named Arconic Inc.) before you vote.

2020 ANNUAL MEETING OF SHAREHOLDERS Via Virtual Live Webcast

 

How to Cast Your Vote Prior to the 2020 Annual Meeting

YOUR VOTE IS IMPORTANT! Please cast your vote and play a part in the future of Howmet Aerospace.

Shareholders of Record or Registered Shareholder, who hold shares registered in their names, can vote with the 16-digit control number included on your Notice or proxy card by:

Beneficial Owners of Shares, who own shares through a bank, brokerage firm or other financial institution, can vote by returning the voting instruction form, or by following the instructions for voting via telephone or the Internet, as provided by the bank, broker or other organization. If you own shares in different accounts or in more than one name, you may receive different voting instructions for each type of ownership. Please vote all your shares.

If you are a shareholder of record or a beneficial owner who has a legal proxy to vote the shares, you may choose to vote electronically during the annual meeting. Even if you plan to attend our annual meeting via live webcast, please cast your vote by submitting a proxy as soon as possible.

Participant in Employee Savings Plan must provide the trustee of the employee savings plan with your voting instructions in advance of the meeting. You cannot vote your shares during the annual meeting; the trustee is the only one who can vote your shares.

Deadline for voting online or by telephone is 11:59 p.m. Eastern Time, on June 14, 2020. If you vote by mail, your proxy card must be received before the annual meeting. If you hold shares in a employee savings plan, your voting instructions must be received by 11:59 a.m. Eastern Time, on June 12, 2020.

See the “Questions and Answers About the Meeting and Voting” section for more details.

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Proxy Summary (continued)

Voting Matters and Board Recommendations

The Board of Directors recommends that you vote as follows:

   

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Proxy Summary (continued)

Director Nominees (Page 8)

Howmet Aerospace’s Board of Directors currently comprises 12 members, led by Executive Chairman and Co-Chief Executive Officer John C. Plant, and independent Lead Director James F. Albaugh. Directors are elected on an annual basis. In connection with the separation of Arconic Rolled Products Corporation (renamed Arconic Corporation) (“ARPC”) from Howmet Aerospace (formerly named Arconic Inc.) as of April 1, 2020, the Board determined to increase the size of the Board from 10 to 12 members. Additionally, on such date and in connection with the separation, Christopher L. Ayers, Elmer L. Doty and E. Stanley O’Neal resigned from the Board and were appointed to serve on the board of directors of ARPC, and Joseph S. Cantie, Robert F. Leduc, Jody G. Miller, Tolga I. Oal and Nicole W. Piasecki were appointed to serve on the Board and to hold office until the 2020 Annual Meeting of Shareholders, or, if earlier, until death or resignation or removal. On April 4, 2020 and April 8, 2020, Rajiv L. Gupta and Sean O. Mahoney, respectively, notified the Board that they will not stand for re-election and will retire from the Board effective as of the date of the 2020 Annual Meeting. As a result, the Board determined to decrease the size of the Board from 12 to 10 members, effective as of the date of the 2020 Annual Meeting.

The following table provides summary information about each of the 10 director nominees standing for election to the Board for a one-year term expiring on the date of the Annual Meeting of Shareholders in 2021.

   

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Proxy Summary (continued)

 

 

Corporate Governance Highlights (Page 21)

The Company is committed to good corporate governance, which we believe is important to the success of our business and to advancing shareholder interests. Our corporate governance practices are described in greater detail in the “Corporate Governance” section. Highlights include:

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Annually elected directors

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Majority voting for directors

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10 of our 12 current Board members are independent; 8 of the 10 director nominees are independent

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Average Board tenure, assuming all director nominees are elected, is approximately 1.7 years

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No supermajority voting requirements in the Certificate of Incorporation

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Independent Lead Director with substantial responsibilities

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Directors have a broad array of attributes and skills directly relevant to the Company and its businesses

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Regular executive sessions of independent directors

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Attendance by incumbent directors at Board and committee meetings in 2019 averaged 98.5%

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Independent Audit, Compensation and Benefits, Finance, and Governance and Nominating Committees

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Finance Committee that reviews and provides advice regarding capital structure, capital allocation, mergers and acquisitions, pension investment performance and other financial matters

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Cybersecurity Advisory Subcommittee that reviews the Company’s enterprise risk relating to cybersecurity

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Risk oversight by full Board and committees

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Regular shareholder engagement

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Shareholders’ right to call special meetings

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Shareholders’ ability to take action by written consent

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Proxy access mechanism to enable eligible shareholders to nominate director candidates

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Policies prohibiting short sales, hedging, margin accounts and pledging

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Long-standing commitment to sustainability

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Proxy Summary (continued)

​	WHAT WE DO	​	​	​	WHAT WE DON’T DO	​
​	✓ Pay for Performance ​ ✓ Robust Stock Ownership Guidelines ​ ✓ Double-Trigger Change-in-Control Provisions ​ ✓ Active Engagement with Investors ​ ✓ Independent Compensation Consultant ​ ✓ Conservative Risk Profile ​ ✓ Claw-Back Policy ​	​	​	​	✗ No Guaranteed Bonuses ​ ✗ No Parachute Tax Gross-Ups ​ ✗ No Short Sales, Derivative Transactions or Hedging ​ ✗ No Dividends on Unvested Equity Awards ​ ✗ No Share Recycling or Option Repricing ​ ✗ No Significant Perquisites ​	​

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Item 1 Election of Directors

As of the date of this Proxy Statement, Howmet Aerospace’s Board of Directors comprises 12 members, led by Executive Chairman and Co-Chief Executive Officer John C. Plant, and independent Lead Director James F. Albaugh. In connection with the separation of ARPC from Howmet Aerospace (formerly named Arconic Inc.) as of April 1, 2020, the Board determined to increase the size of the Board from 10 to 12 members. Additionally, on such date and in connection with the separation, Christopher L. Ayers, Elmer L. Doty and E. Stanley O’Neal resigned from the Board and were appointed to serve on the board of directors of ARPC, and Joseph S. Cantie, Robert F. Leduc, Jody G. Miller, Tolga I. Oal and Nicole W. Piasecki were appointed to serve on the Board and to hold office until the 2020 Annual Meeting of Shareholders, or, if earlier, until death or resignation or removal. On April 4, 2020 and April 8, 2020, Rajiv L. Gupta and Sean O. Mahoney, respectively, notified the Board that they will not stand for re-election and will retire from the Board effective as of the date of the 2020 Annual Meeting. As a result, the Board determined to decrease the size of the Board from 12 to 10 members, effective as of the date of the 2020 Annual Meeting.

The Board of Directors, upon the recommendation of the Governance and Nominating Committee, has nominated 10 incumbent directors to stand for reelection to the Board for a one-year term expiring in 2021: James F. Albaugh, Amy E. Alving, Joseph S. Cantie, Robert F. Leduc, David J. Miller, Jody G. Miller, Nicole W. Piasecki, Tolga I. Oal, John C. Plant, and Ulrich R. Schmidt. Each of the director nominees was elected by shareholders at the 2019 Annual Meeting of Shareholders, except for Joseph S. Cantie, Robert F. Leduc, Jody G. Miller, Nicole W. Piasecki and Tolga I. Oal, who were appointed by the Board in connection with the separation described above.

The Board of Directors has affirmatively determined that each of the 10 director nominees qualifies for election under the Company’s criteria for evaluation of directors (see “Minimum Qualifications for Director Nominees and Board Member Attributes” on page 13). Included in each nominee’s biography below is a description of the qualifications, experience, attributes and skills of such nominee.

In addition, the Board of Directors has determined that each director nominee, except Messrs. Plant and Oal (due to Mr. Plant’s executive role as Executive Chairman and Co-Chief Executive Officer and Mr. Oal’s executive role as Co-Chief Executive Officer), qualifies as an independent director under New York Stock Exchange corporate governance listing standards and the Company’s Director Independence Standards. See “Director Independence” on page 28.

If any of the Board’s nominees is unable to serve or for good cause will not serve as a director, the Board of Directors may reduce its size or choose a substitute nominee. If any substitute nominees are designated, we will file an amended proxy statement that, as applicable, identifies the substitute nominees, discloses that such nominees have consented to being named in the revised proxy statement and to serve if elected, and includes certain biographical and other information about such nominees required by SEC rules.

The Board of Directors recommends that you vote FOR the election of each of Mmes. Alving, Miller and Piasecki and Messrs. Albaugh, Cantie, Leduc, Miller, Oal, Plant, and Schmidt.

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Item 1 Election of Directors (continued)

Summary of Director Attributes and Skills

Our directors have a diversity of experience that spans a broad range of industries, including the aerospace, automotive and finance sectors. They bring to our Board a wide variety of skills, qualifications and viewpoints that strengthens the Board’s ability to carry out its oversight role on behalf of our shareholders. In the director nominee biographies below, we describe certain areas of individual expertise that each director brings to our Board.

The table below is a summary of the range of skills and experiences that each director nominee brings to the Board. Because it is a summary, it does not include all of the skills, experiences, qualifications, and diversity that each director nominee offers, and the fact that a particular experience, skill, or qualification is not listed does not mean that a nominee does not possess it.

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Item 1 Election of Directors (continued)

Director Nominees

​		​	​	James F. Albaugh	​
			​	Director since: 2017 Age: 69 Committees:  Audit Committee; Governance and Nominating Committee Other Current Public Directorships: American Airlines Group Inc.	​

​		​	​	Amy E. Alving	​
			​	Director since: 2018 Age: 57 Committees:  Cybersecurity Advisory Subcommittee (Chair); Governance and Nominating Committee (Chair) Other Current Public Directorships: DXC Technology Company; Federal National Mortgage Association (Fannie Mae)	​

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Item 1 Election of Directors (continued)

​		​	​	Joseph S. Cantie	​
			​	Director since: April 2020 Age: 56 Committees: Audit Committee; Compensation and Benefits Committee; Finance Committee Other Current Public Directorships: Delphi Technologies PLC; Summit Materials, Inc.; TopBuild Corporation	​

​		​	​	Robert F. Leduc	​
			​	Director since: April 2020 Age: 63 Committees: Compensation and Benefits Committee (Chair)	​

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Item 1 Election of Directors (continued)

​		​	​	David J. Miller	​
			​	Director since: 2017 Age: 41 Committees: Finance Committee	​

​		​	​	Jody G. Miller	​
			​	Director since: April 2020 Age: 61 Committees: Governance and Nominating Committee Other Current Public Directorships: LKQ Corporation	​

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Item 1 Election of Directors (continued)

​		​	​	Tolga I. Oal	​
			​	Director since: April 2020 Age: 48	​

​		​	​	Nicole W. Piasecki	​
			​	Director since: April 2020 Age: 57 Committees: Compensation and Benefits Committee Other Current Public Directorships: Weyerhaeuser Co.	​

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Item 1 Election of Directors (continued)

​		​	​	John C. Plant	​
			​	Director since: 2016 Age: 66 Other Current Public Directorships: Jabil Circuit Corporation; Masco Corporation	​

​		​	​	Ulrich R. Schmidt	​
			​	Director since: 2016 Age: 70 Committees: Audit Committee (Chair); Finance Committee (Chair)	​

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Item 1 Election of Directors (continued)

Nominating Board Candidates—Procedures and Director Qualifications

Shareholder Recommendations for Director Nominees

Any shareholder wishing to recommend a candidate for director should submit the recommendation in writing to our principal executive offices: Howmet Aerospace Inc., Governance and Nominating Committee, c/o Corporate Secretary’s Office, 201 Isabella Street, Suite 200, Pittsburgh, PA 15212-5872 or email: CorporateSecretary@howmet.com. The written submission should comply with all requirements set forth in the Company’s Certificate of Incorporation and Bylaws. The committee will consider all candidates recommended by shareholders in compliance with the foregoing procedures and who satisfy the minimum qualifications for director nominees and Board member attributes.

Shareholder Nominations

The Company’s Certificate of Incorporation and Bylaws provide that any shareholder entitled to vote at an annual meeting of shareholders may nominate one or more director candidates for election at that annual meeting by following certain prescribed procedures. The shareholder must provide to Howmet Aerospace’s Corporate Secretary timely written notice of the shareholder’s intent to make such a nomination or nominations. In order to be timely, the shareholder must provide such written notice not earlier than the 120th day and not later than the 90th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the shareholder must be so delivered not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the 10th day following the day on which public announcement of the date of such meeting is first made. The notice must contain all of the information required in the Company’s Certificate of Incorporation and Bylaws. Any such notice must be sent to our principal executive offices: Howmet Aerospace Inc., Corporate Secretary’s Office, 201 Isabella Street, Suite 200, Pittsburgh, PA 15212-5872 or email: CorporateSecretary.howmet.com. For the 2021 Annual Meeting, such notice must be delivered no earlier than February 15, 2021 and no later than March 17, 2021.

Subject to the terms and conditions set forth in the Company’s Bylaws, shareholder nominations for candidates for election at the 2021 Annual Meeting of Shareholders, which the shareholder wishes to include in the Company’s proxy materials relating to the 2021 Annual Meeting, must be received by the Company at the above address no earlier than November 30, 2020 and no later than December 30, 2020, together with all information required to be provided by the shareholder in accordance with the proxy access provision in the Bylaws.

Minimum Qualifications for Director Nominees and Board Member Attributes

The Governance and Nominating Committee has adopted Criteria for Identification, Evaluation and Selection of Directors:

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Directors must have demonstrated the highest ethical behavior and must be committed to the Company’s values.

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2.

Directors must be committed to seeking and balancing the legitimate long-term interests of all of the Company’s shareholders, as well as its other stakeholders, including its customers, employees and the communities where the Company has an impact. Directors must not be beholden primarily to any special interest group or constituency.

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It is the objective of the Board that all non-management directors be independent. In addition, no director should have, or appear to have, a conflict of interest that would impair that director’s ability to make decisions consistently in a fair and balanced manner.

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Directors must be independent in thought and judgment. They must each have the ability to speak out on difficult subjects; to ask tough questions and demand accurate, honest answers; to constructively challenge management; and at the same time, act as an effective member of the team, engendering by his or her attitude an atmosphere of collegiality and trust.

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Each director must have demonstrated excellence in his or her area and must be able to deal effectively with crises and to provide advice and counsel to the Chief Executive Officer and his or her peers.

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6.

Directors should have proven business acumen, serving or having served as a chief executive officer, or other senior leadership role, in a significant, complex organization; or serving or having served in a significant policy-making or leadership position in a well-respected, nationally or internationally recognized educational institution, not-for-profit organization or governmental entity; or having achieved a widely recognized position of leadership in the director’s field of endeavor which adds substantial value to the oversight of material issues related to the Company’s business.

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Item 1 Election of Directors (continued)

7.

Directors must be committed to understanding the Company and its industry; to regularly preparing for, attending and actively participating in meetings of the Board and its committees; and to ensuring that existing and future individual commitments will not materially interfere with the director’s obligations to the Company. The number of other board memberships, in light of the demands of a director nominee’s principal occupation, should be considered, as well as travel demands for meeting attendance.

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8.

Directors must understand the legal responsibilities of board service and fiduciary obligations. All members of the Board should be financially literate and have a sound understanding of business strategy, business environment, corporate governance and board operations. At least one member of the Board must satisfy the requirements of an “audit committee financial expert.”

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9.

Directors must be self-confident and willing and able to assume leadership and collaborative roles as needed. They need to demonstrate maturity, valuing Board and team performance over individual performance and respect for others and their views.

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10.

New director nominees should be able and committed to serve as a member of the Board for an extended period of time.

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11.

While the diversity, the variety of experiences and viewpoints represented on the Board should always be considered, a director nominee should not be chosen nor excluded solely or largely because of race, color, gender, national origin or sexual orientation or identity. In selecting a director nominee, the committee will focus on any special skills, expertise or background that would complement the existing Board, recognizing that the Company’s businesses and operations are diverse and global in nature.

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12.

Directors should have reputations, both personal and professional, consistent with the Company’s image and reputation.

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Process of Evaluation of Director Candidates

The Governance and Nominating Committee makes a preliminary review of a prospective director candidate’s background, career experience and qualifications based on available information or information provided by an independent search firm, which identifies or provides an assessment of a candidate, or by a shareholder nominating or suggesting a candidate. If a consensus is reached by the committee that a particular candidate would likely contribute positively to the Board’s mix of skills and experiences, and a Board vacancy exists or is likely to occur, the candidate is contacted to confirm his or her interest and willingness to serve. The committee conducts interviews and may invite other Board members or senior Howmet Aerospace executives to interview the candidate to assess the candidate’s overall qualifications. The committee considers the candidate against the criteria it has adopted in the context of the Board’s then current composition and the needs of the Board and its committees.

At the conclusion of this process, the committee reports the results of its review to the full Board. The report includes a recommendation as to whether the candidate should be nominated for election to the Board. This procedure is the same for all candidates, including director candidates identified by shareholders.

The Governance and Nominating Committee retains from time to time the services of a search firm that specializes in identifying and evaluating director candidates. Services provided by the search firm include identifying potential director candidates meeting criteria established by the committee, verifying information about the prospective candidate’s credentials, and obtaining a preliminary indication of interest and willingness to serve as a Board member.

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Director Compensation

Our non-employee director compensation program is designed to attract and retain outstanding director candidates who have the requisite experience and background as set forth in our Corporate Governance Guidelines, and to recognize the substantial time and effort necessary to exercise oversight of a complex global organization like Howmet Aerospace and fulfill the other responsibilities required of our directors. Messrs. Oal and Plant, our employee directors, do not receive additional compensation for their Board service.

The Governance and Nominating Committee reviews director compensation periodically and recommends changes to the Board when it deems appropriate. In late 2018, the committee engaged an independent compensation consultant, Pearl Meyer & Partners, LLC (“Pearl Meyer”), to conduct an independent review of our director compensation program. Pearl Meyer assessed the structure of our director compensation program compared to competitive market practices of similarly situated companies. Based on the market information and recommendations by Pearl Meyer and Pay Governance, and taking into account various factors, including the responsibilities and time commitment of the directors, the Governance and Nominating Committee, and the Board in turn, determined that no change to the 2018 compensation program for non-employee directors was needed. In February 2019, in connection with the appointment of our Chairman, John C. Plant, to also serve as our Chief Executive Officer (who is now Co-Chief Executive Officer) and the concurrent appointment of Arthur D. Collins, Jr. as the Company’s independent Lead Director (who has since retired from the Board), Pearl Meyer provided advice regarding Lead Director compensation. In late 2019, in connection with the separation of Howmet Aerospace from ARPC, Pearl Meyer was retained to conduct an independent review of director compensation programs that are market competitive in Howmet Aerospace’s industries and in relation to the Company’s projected revenue, as well as a review of benchmark companies in our CEO compensation peer group. Based on the recommendations by Pearl Meyer, and taking into account various factors, the Governance and Nominating Committee, and the Board in turn, reviewed and adopted the compensation program for non-employee directors that went into effect upon the Company’s separation on April 1, 2020. The Company’s non-employee director compensation for 2019 and 2020 is summarized in the table below under “Director Fees.”

Information regarding the retention of Pearl Meyer and Pay Governance can be found under “Corporate Governance—Compensation Consultants” on page 30.

Director Fees

The following table describes the components of compensation for non-employee directors:

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Director Compensation (continued)

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1

Effective as of April 1, 2020.

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2

All Other Annual Fees are paid in cash.

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3

Each non-employee director may receive only one additional annual retainer fee in connection with service as the Chair of a committee (whether in the position of Lead Director, Audit Committee Chair, Compensation and Benefits Committee Chair or Other Committee Chair), regardless of how many committee Chair positions held by such director.

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4

A fee of  $1,500 was paid to a non-employee director for each Board or committee meeting attended by the director in excess of the number of regular Board or committee meetings scheduled by the Board for the applicable calendar year.

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5

A fee of  $1,200 is paid to a non-employee director for each Board or committee meeting attended by such director in excess of five special Board or committee meetings during the applicable calendar year and applies only to any non-regularly scheduled meeting in excess of a two-hour duration.

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Directors’ Alignment with Shareholders

Stock Ownership Guideline for Directors

In order to further align the interests of our directors with the long-term interests of our shareholders, non-employee directors are required to own, until retirement from the Board, at least $750,000 in Howmet Aerospace common stock. Compliance with the ownership value requirement is measured annually and if the stock price declines in value, directors must continue to invest in Howmet Aerospace stock until the stock ownership guideline is reached. Effective as of December 5, 2017, each director is required to reach the stock ownership guideline within six years of his or her initial appointment as a non-employee director.

Under the director compensation program in effect prior to November 1, 2016, directors who were not in compliance with the ownership value requirement were required to invest at least 50% of the fees they received as directors in Howmet Aerospace (formerly named Arconic Inc.) stock until the stock ownership guideline was reached, either by deferring fees into deferred share units under the Company’s deferred fee plan for directors or purchasing shares on the open market. Deferred share units provide directors with the same economic interest as if they own Howmet Aerospace common stock. Specifically, the deferred share units track the performance of our common stock and accrue dividend equivalents that are equal in value to dividends paid on our common stock. Upon a director’s retirement from the Board, the deferred share units are settled in cash at a value equivalent to the then-prevailing market value of our common stock.

Beginning November 1, 2016, directors receive a portion of their annual compensation in Howmet Aerospace deferred restricted share units, which count towards meeting the stock ownership value requirement. The annual deferred restricted share unit award vests on the first anniversary of the grant date, or, if earlier, the date of the next subsequent annual meeting of shareholders following the grant date, subject to continued service through the vesting date (however, accelerated vesting provisions apply for certain termination scenarios, such as death and change in control, and pro-rata vesting provisions apply in the event of a director’s termination of service for any other reason). Settlement of the annual deferred restricted share units is deferred pursuant to the Amended and Restated Deferred Fee Plan for Directors. Also, beginning November 1, 2016, directors may elect to defer the cash portion of their annual compensation into additional Howmet Aerospace deferred restricted share units (but not into deferred share units), as described under “Director Deferral Program” on page 20. Each Howmet Aerospace deferred restricted share unit is an undertaking by the Company to issue to the recipient one share of Howmet Aerospace common stock upon settlement.

Accordingly, whether a director holds shares of Howmet Aerospace common stock, deferred share units or deferred restricted share units, directors have the same economic interest in the performance of the Company, which further aligns directors’ interests with those of our shareholders.

16

Director Compensation (continued)

The following table shows the aggregate value of each current director’s holdings in Howmet Aerospace common stock, deferred restricted share units, and deferred share units as of April 8, 2020, based on the closing price of our common stock on the New York Stock Exchange on that date.

​

1

Amount includes one-third of a time-vesting RSU award relating to 82,928 shares of Howmet common stock; this one-third vests on, and is payable on or shortly after, May 15, 2020. The other two-thirds of such RSU award is not included in the table.

​

2

Amount does not include equity awards granted pursuant to Mr. Plant’s August 1, 2019 agreement: (i) a time-vesting RSU award relating to 400,000 shares of pre-separation Arconic Inc. common stock (which would convert to 486,666 Howmet Aerospace common shares), and (ii) a performance-vesting restricted stock unit award relating to 200,000 shares of pre-separation Arconic Inc. common stock (which would convert to 243,332 Howmet Aerospace common shares), divided into four tranches, each comprised of 50,000 shares of pre-separation Arconic Inc. common stock (which would convert to four tranches each of 60,833 Howmet Aerospace common shares). Also does not include equity awards granted pursuant Mr. Plant’s February 24, 2020 agreement: (i) time-vesting restricted stock units relating to 1,000,000 shares of Howmet Aerospace common stock, and (ii) performance-vesting restricted stock units relating to 1,800,000 shares of Howmet Aerospace common stock. See “Executive Compensation—Compensation Discussion and Analysis—Compensation Decisions” for more information.

​

Prohibitions against Short Sales, Hedging, Margin Accounts and Pledging

Company policy prohibits members of the Board of Directors from pledging, holding in margin accounts, or engaging in short sales or hedging transactions with respect to any of their Company stock. The policy continues to align the interests of our directors with those of our shareholders.

17

Director Compensation (continued)

2019 Director Compensation

The following table sets forth the total compensation of the Company’s non-employee directors for the year ended December 31, 2019.*

​

*

In 2019, we did not issue any option awards to directors, and we do not have a non-equity incentive plan for directors. Accordingly, no such compensation is reported and we have omitted columns (d) and (e) from the table. Further, the Company does not pay above-market or preferential earnings on fees that are deferred. The Amended and Restated Deferred Fee Plan for Directors and a predecessor plan have the same investment options as the Company’s 401(k) tax-qualified savings plan for salaried employees. We therefore do not report changes in pension value or earnings on deferred fees and we have omitted column (f) from the table.

​

1

Charles P. Blankenship, who served as a director and Chief Executive Officer of the Company until February 6, 2019, received no compensation for service as a director, his executive compensation is reflected in the “2019 Summary Compensation Table” on page 55.

​

2

Fees Earned or Paid in Cash (Column (b)). This column reflects the cash fees earned by directors for Board and committee services in 2019, whether or not such fees were deferred.

​

3

Stock Awards (Column (c)). The amounts in this column represents the aggregate grant date fair value of deferred restricted share unit awards granted to each non-employee director under the 2013 Howmet Aerospace Stock Incentive Plan, as Amended and Restated (formerly known as the 2013 Arconic Inc. Stock Incentive Plan, as Amended and Restated), computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. Except as described below, the deferred restricted share unit award constitutes the equity portion of each director’s compensation for service from the Company’s annual meeting of shareholders in 2019 until the Company’s annual meeting of shareholders in 2020 and vests on the earlier of the first anniversary date of the grant date or the date of the Company’s 2020 annual meeting (however, accelerated vesting provisions apply for certain termination scenarios, such as death and change in control, and pro-rata vesting applies in the event of a director’s termination of service for any other reason). The exact number of deferred restricted share units comprising an equity award is calculated by dividing the dollar value of the award (as specified in our Non-Employee Director Compensation Policy) by the closing price of our common stock on the day of grant, rounded to the nearest whole share. The grant date fair value of each restricted share unit granted to Messrs. Albaugh, Ayers, Gupta, Mahoney, Miller, O’Neal and Schmidt and Ms. Alving on May 16, 2019 was $22.12. Mr. Doty resigned as Chief Operating Officer of the Company, effective August 16, 2019, and thereafter became a non-employee director. Mr. Doty received a prorated equity award of 4,581 deferred restricted share units on August 23, 2019 with a grant value fair value of each restricted share unit of  $24.31. As of December 31, 2019, the aggregate number of unvested deferred restricted share units outstanding for each non-employee director was as follows: Mr. Albaugh (6,781); Ms. Alving (6,781); Mr. Ayers (6,781); My Doty (4,581); Mr. Gupta (6,781); Mr. Mahoney (6,781); Mr. Miller (6,781); Mr. O’Neal (6,781); and Mr. Schmidt (6,781). The foregoing numbers do not include deferred restricted share units that have vested, see “—Director Deferral Program” on page 20.

​

4

All Other Compensation (Column (g)). The amount shown in this column for Messrs. Albaugh, Ayers, Doty, Gupta, O’Neal, Plant and Schmidt; and Ms. Alving represents imputed income related to a 2019 board event. Spouses were invited to attend this event and imputed income was charged to those directors whose spouses attended. This imputed income was primarily for travel to and from New York and expense of meals and entertainment. Directors do not receive tax gross-ups for imputed income. The amount shown in this column for Mr. Collins represents imputed income related to his retirement gift.

​

18

Director Compensation (continued)

5

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; (ii) a cash retainer of  $12,634 for service as Chair of the Compensation and Benefits Committee from May 14 through December 31, 2019; and (iii) cash fees of  $61,500 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

6

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; (ii) a cash retainer of  $1,113 for service on the Audit Committee from January 1 through February 6, 2019; and (iii) cash fees of  $49,500 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

7

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; (ii) a cash retainer of  $11,000 for service on the Audit Committee during 2019; and (iii) cash fees of  $25,500 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

8

Mr. Collins retired from the Board of Directors, effective May 14, 2019. The amount listed in Column (b) represents (i) a cash retainer of  $44,516 for service as a non-employee director from January 1 through May 14, 2019; (ii) a cash retainer of  $2,023.81 for service as Chair of the Compensation and Benefits Committee from January 1 through February 6, 2019; (iii) a cash retainer of  $4,500 for service as Chair of the Governance and Nominating Committee from February 6 through May 14, 2019; (iv) a cash retainer of  $10,910 for service as Lead Independent Director from February 6 through May 14, 2019; and (v) cash fees of  $21,000 for meetings in excess of regularly scheduled meetings during 2019.

​

9

Mr. Doty was appointed Chief Operating Officer of the Company, effective February 6, 2019 and resigned from the role on August 16, 2019. The amount listed in Column (b) represents (i) a cash retainer of  $57,304 for service as a non-employee director from January 1 through February 6, 2019 and August 16 through December 31, 2019; and (ii) cash fees of  $24,000 for meetings in excess of regularly scheduled meetings from January 1 through February 6, 2019 and August 16 through December 31, 2019. The amount listed in Column (c) represents a prorated annual equity award of 4,581 deferred restricted share units granted on August 23, 2019 for service as a non-employee director effective August 16, 2019.

​

10

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; (ii) a cash retainer of  $5,455 for service as Chair of the Compensation and Benefits Committee from February 6 through May 14, 2019; (iii) a cash retainer of  $10,423 for service as Chair of the Governance and Nominating Committee from May 14 through December 31, 2019; (iv) a cash retainer of  $25,269 for service as Lead Independent Director from May 14 through December 31, 2019; and (v) cash fees of $51,000 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

11

Mr. Hess retired from the Board of Directors, effective May 14, 2019. The amount listed in Column (b) represents (i) a cash retainer of $44,516 for service as a non-employee director from January 1 through May 14, 2019; (ii) a cash retainer of  $4,081 for service on the Audit Committee from January 1 through May 14, 2019; and (iii) cash fees of  $18,000 for meetings in excess of regularly scheduled meetings during 2019.

​

12

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; (ii) a cash retainer of  $11,000 for service on the Audit Committee during 2019; (iii) a cash retainer of  $16,500 for service as Chair of the Finance Committee during 2019; and (iv) cash fees of  $28,500 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

13

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; and (ii) cash fees of  $24,000 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

14

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; (ii) a cash retainer of  $11,000 for service on the Audit Committee during 2019; and (iii) cash fees of  $28,500 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

15

Mr. Plant was appointed Chief Executive Officer of the Company, effective February 6, 2019. The amount listed in Column (b) represents (i) a cash retainer of  $12,143 for service as a non-employee director from January 1 through February 6, 2019; (ii) a cash retainer of  $17,202 for service as Chairman of the Board from January 1 through February 6, 2019; (iii) a cash retainer of  $1,670 for service as Chair of the Governance and Nominating Committee from January 1 through February 6, 2019; and (iv) cash fees of  $16,500 for meetings in excess of regularly scheduled meetings from January 1 through February 6, 2019.

​

16

The amount listed in Column (b) represents (i) a cash retainer of  $120,000 for service as a non-employee director during 2019; (ii) a cash retainer of  $27,500 for service as Chair of the Audit Committee during 2019; and (iii) cash fees of  $40,500 for meetings in excess of regularly scheduled meetings during 2019. The amount listed in Column (c) represents an annual equity award of 6,781 deferred restricted share units granted on May 16, 2019.

​

19

Director Compensation (continued)

Director Deferral Program

Prior to November 1, 2016, non-employee directors were able to defer all or part of their cash compensation pursuant to the Company’s 2005 Deferred Fee Plan for Directors (or a predecessor plan) and to invest any such deferred amounts into Howmet Aerospace (formerly named Arconic Inc.) deferred share units or into the other investment options provided under the Company’s 401(k) tax-qualified savings plan.

Beginning November 1, 2016, the Board of Directors adopted the Amended and Restated Deferred Fee Plan for Directors pursuant to which non-employee directors may elect to defer all or part of the cash portion of their annual compensation and to invest such deferred amounts into fully-vested Howmet Aerospace restricted share units or into the investment options provided under the Company’s 401(k) tax-qualified savings plan other than the Howmet Aerospace Stock Fund (which represents Howmet Aerospace deferred share units). The annual equity award granted to non-employee directors in the form of Howmet Aerospace restricted share units is, by its terms, deferred under the Amended and Restated Deferred Fee Plan for Directors.

Deferred amounts are paid either in a lump sum or installments, as elected by the director, upon retirement from the Board of Directors.

20

Corporate Governance

Howmet Aerospace is a values-based company. Our values guide our behavior at every level and apply across the Company on a global basis. The Board has adopted a number of policies to support our values and good corporate governance, which we believe are important to the success of our business and in advancing shareholder interests. We highlight below certain of our corporate governance practices and features:

Shareholder Engagement

Our directors and executive officers value direct and recurring engagement with our shareholders as part of our continuing efforts to create shareholder value, to refine our corporate governance practices and to address any shareholder concerns. Each year we seek opportunities to meet with, and receive input from, our shareholders, and we intend to continue to seek such opportunities in the future.

Proxy Access

Shareholders may nominate director candidates to Howmet Aerospace’s Board and include those nominees in Howmet Aerospace’s proxy statement in accordance with the Company’s Bylaws.

Shareholders’ Right to Call Special Meetings

Shareholders are permitted to call special meetings in accordance with the Company’s Certificate of Incorporation and Bylaws.

Shareholders’ Action by Written Consent

Shareholders may act by written consent in accordance with the Company’s Certificate of Incorporation and Bylaws.

Annual Election of Directors

The Board of Directors is not a classified board; each director is elected annually for a one-year term.

No Supermajority Voting Requirements

The Certificate of Incorporation does not contain any provisions that require a supermajority vote of shareholders.

Delaware Corporation

The Company is incorporated in Delaware, a leading jurisdiction with a comprehensive and coherent set of corporate laws that are responsive to the evolving legal and business needs of corporations.

Strong Independent Lead Director

The Board recognizes that in circumstances where the positions of Chairman and CEO are combined, a strong and independent Lead Director with a clearly defined role and set of responsibilities is paramount for constructive and effective leadership. Howmet Aerospace’s independent Lead Director has a clear mandate and significant authority and responsibilities, which are described below and in our Board-approved Corporate Governance Guidelines.

Prohibition against Short Sales, Hedging, Margin Accounts and Pledging

Our Insider Trading Policy contains restrictions that, among other things:

•

prohibit short sales of Howmet Aerospace securities and derivative or speculative transactions in Howmet Aerospace securities;

​

•

prohibit the use of financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) that are designed to hedge or offset any decrease in the market value of Howmet Aerospace securities; and

​

•

prohibit directors and executive officers from holding Howmet Aerospace securities in margin accounts or pledging Howmet Aerospace securities as collateral.

​

Commitment to Sustainability

The Company is committed to operating sustainably in the communities in which we do business.

 

21

Corporate Governance (continued)

The Structure and Role of the Board of Directors

Board Leadership Structure

The Company’s current Board leadership structure comprises a combined Chairman of the Board and Co-Chief Executive Officer, an independent director serving as the Lead Director, and strong, active independent directors. The Board will continue to exercise its judgment under the circumstances at the time to evaluate the Board leadership structure that the Board believes will provide effective leadership, oversight and direction, while optimizing the functioning of both the Board and management and facilitating effective communication between the two. The Board has concluded that the current structure provides a well-functioning and effective balance between strong Company leadership and appropriate safeguards and oversight by independent directors. A combined role of Chairman and Co-Chief Executive Officer confers advantages, including those listed below.

•

By serving in both positions, the Chairman and Co-Chief Executive Officer is able to draw on his detailed knowledge of the Company to provide the Board, in coordination with the Lead Director, leadership in focusing its discussions, review and oversight of the Company’s strategy, business, and operating and financial performance.

​

•

A combined role ensures that the Company presents its message and strategy to stakeholders with a unified voice.

​

•

The structure allows for efficient decision-making and focused accountability.

​

The Board believes that it is in the best interest of the Company and its shareholders for Mr. Plant to serve as Chairman and Co-Chief Executive Officer, considering the strong role of our independent Lead Director and other corporate governance practices providing independent oversight of management as set forth below.

James F. Albaugh is our current Lead Director. Mr. Albaugh’s strength in leading the Board is complemented by his depth of experience in Board matters ranging from his service on the Company’s Audit Committee and Governance and Nominating Committee to his memberships on other company boards.

22

Corporate Governance (continued)

The Board’s Role in Risk Oversight

The Board of Directors is actively engaged in overseeing and reviewing the Company’s strategic direction and objectives, taking into account, among other considerations, the Company’s risk profile and exposures. It is management’s responsibility to manage risk and bring to the Board’s attention the most material risks to the Company. The Board has oversight responsibility of the processes established to report and monitor material risks applicable to the Company. The Board annually reviews the Company’s enterprise risk management and receives regular updates on risk exposures.

The Board as a whole has responsibility for risk oversight, including succession planning relating to the Co-Chief Executive Officers (“CEO”) and risks relating to the competitive landscape, strategy, economic conditions, capital requirements, and operations of the Company. The committees of the Board also oversee the Company’s risk profile and exposures relating to matters within the scope of their authority. The Board regularly receives detailed reports from the committees regarding risk oversight in their areas of responsibility.

The Audit Committee regularly reviews treasury risks (including those relating to cash generation, liquidity, insurance, credit, debt, interest rates and foreign currency exchange rates), financial accounting and reporting risks, legal and compliance risks, and risks relating to information technology including cybersecurity, tax matters, asset impairments, contingencies, and internal controls.

The Cybersecurity Advisory Subcommittee was established by the Audit Committee to assist the Audit Committee in fulfilling its responsibility of reviewing the Company’s enterprise risk relating to cybersecurity.

The Compensation and Benefits Committee considers risks related to the attraction and retention of talent, and the design of compensation programs and incentive arrangements. The Company has determined that it is not reasonably likely that risks arising from compensation and benefit plans would have a material adverse effect on the Company. See “Conservative Compensation Risk Profile” on page 46.

The Finance Committee reviews and provides advice to the Board regarding financial matters, including the Company’s capital structure, capital allocation, capital plan, significant transactions such as acquisitions and divestitures, and the investment performance and funding of the Company’s retirement plans, and the risks relating to such matters.

23

Corporate Governance (continued)

The Governance and Nominating Committee considers risks related to corporate governance, and oversees succession planning for the Board of Directors, the structure and function of the Board, and the appropriate assignment of directors to the Board committees for risk oversight and other areas of responsibilities.

Director Qualifications, Board Diversity and Board Tenure

Our directors have a broad range of experience that spans different industries, including the aerospace, automotive and finance sectors. Directors bring to our Board a variety of skills, qualifications and viewpoints that strengthen their ability to carry out their oversight role on behalf of our shareholders. As described in the director biographies in “Item 1 Election of Directors,” directors bring to our Board attributes and skills that include those listed below:

Director Attributes and Skills

 

24

Corporate Governance (continued)

Board Meetings and Attendance

The Board met 24 times in 2019. The number of Board committee meetings can be found below in “—Committees of the Board.” Attendance by incumbent directors at Board and committee meetings averaged 98.5%. Each incumbent director attended 75% or more of the aggregate of all meetings of the Board and the committees on which he or she served during 2019.

Under Howmet Aerospace’s Corporate Governance Guidelines, all directors are expected to attend the annual meeting of shareholders. Eleven out of the then-twelve members of the Board, including all incumbent directors, attended the Company’s 2019 annual meeting. In addition to Board meetings, directors visit Howmet Aerospace business operations to deepen their understanding of the Company and interact with on-site employees. In addition, new directors receive an orientation that includes meetings with key members of management and visits to Company facilities.

Board, Committee and Director Evaluations

The Board of Directors annually assesses the effectiveness of the full Board, the operations of its committees and the contributions of director nominees. The Governance and Nominating Committee oversees the evaluation of the Board as a whole and its committees, as well as individual evaluations of those directors who are being considered for possible re-nomination to the Board.

25

Corporate Governance (continued)

Committees of the Board

There are four standing committees of the Board and one subcommittee of the Audit Committee. The Board has adopted written charters for each committee and subcommittee, which are available on our website at http://www.howmet.com under “Investors—Corporate Governance—Board Committees.”

The table below sets forth the standing Board committees and subcommittee and the members of each as of April 1, 2020. Each of the Audit, Compensation and Benefits, Finance, and Governance and Nominating Committees is composed solely of directors who have been determined by the Board of Directors to be independent in accordance with Securities and Exchange Commission (“SEC”) regulations, NYSE listing standards and the Company’s Director Independence Standards (including the heightened independence standards for members of the Audit and Compensation and Benefits Committees).

In connection with his appointment to the Audit Committee, the Board determined that Mr. Cantie’s simultaneous service on three other public company audit committees does not impair his ability to effectively serve on the Company’s Audit Committee. Mr. Cantie’s background as both a certified public accountant and as a former chief financial officer, as well as his service on other audit committees, enable him to bring additional experience to the Company’s Audit Committee.

​

*

Independent Director

​

1

The Board as a whole held 24 meetings in 2019.

​

26

Corporate Governance (continued)

27

Corporate Governance (continued)

Voting for Directors

Howmet Aerospace’s Certificate of Incorporation and Bylaws provide a majority voting standard for election of directors in uncontested elections. If the number of shares voted “for” an incumbent director’s election does not exceed fifty percent (50%) of the number of votes cast with respect to that director’s election (with votes cast including votes against in each case and excluding abstentions and broker nonvotes with respect to that director’s election) in an uncontested election, the nominee must promptly tender his or her resignation, and the Board will decide, through a process managed by the Governance and Nominating Committee and excluding the nominee, whether to accept the resignation at its next regularly scheduled Board meeting. The Board’s explanation of its decision will be promptly disclosed in accordance with SEC rules and regulations. Any director nominee not already serving on the Board who fails to receive a majority of votes cast in an uncontested election will not be elected to the Board. An election of directors is considered to be contested if the number of candidates for election as directors exceeds the number of directors to be elected, with the determination being made in accordance with the Bylaws.

Communications with Directors

The Board of Directors is committed to meaningful engagement with Howmet Aerospace shareholders and welcomes input and suggestions. Shareholders and other interested parties wishing to contact the Executive Chairman, Lead Director, individual directors, or the non-management directors as a group may do so by sending a written communication to the attention of the Lead Director c/o Howmet Aerospace Inc., Corporate Secretary’s Office, 201 Isabella Street, Suite 200, Pittsburgh, PA 15212-5872 or email: CorporateSecretary@howmet.com.

To communicate issues or complaints regarding questionable accounting, internal accounting controls or auditing matters, send a written communication to the Audit Committee c/o Howmet Aerospace Inc., Corporate Secretary’s Office, 201 Isabella Street, Suite 200, Pittsburgh, PA 15212-5872 or email: CorporateSecretary@howmet.com.

Alternatively, you may place an anonymous, confidential, toll free call in the United States to Howmet Aerospace’s Integrity Line at 1-844-932-1021. For a listing of Integrity Line telephone numbers outside the United States, go to http://www.howmet.com under “About Us—Our Fundamentals—Ethics and Compliance—Integrity Line.”

Communications addressed to the Board or to a Board member are distributed to the Board or to any individual director or directors as appropriate, depending upon the facts and circumstances outlined in the communication.

The Board of Directors has asked the Corporate Secretary’s Office to submit to the Board all communications received, excluding only those items that are not related to Board duties and responsibilities, such as junk mail and mass mailings; product complaints and product inquiries; new product or technology suggestions; job inquiries and resumes; advertisements or solicitations; and surveys.

Director Independence

In its Corporate Governance Guidelines, the Board recognizes that independence depends not only on directors’ individual relationships, but also on the directors’ overall attitude. Providing objective, independent judgment is at the core of the Board’s oversight function. Under the Company’s Director Independence Standards, which conform to the corporate governance listing standards of the New York Stock Exchange, a director is not considered “independent” unless the Board affirmatively determines that the director has no material relationship with the Company or any subsidiary in the consolidated group. The Director Independence Standards comprise a list of all categories of material relationships affecting the determination of a director’s independence. Any relationship that falls below a threshold set forth in the Director Independence Standards, or is not otherwise listed in the Director Independence Standards, and is not required to be disclosed under Item 404(a) of SEC Regulation S-K, is deemed to be an immaterial relationship.

The Board has affirmatively determined that all the directors are independent except Messrs. Oal and Plant, who are employed by the Company and therefore do not meet the independence standards set forth in the Director Independence Standards. In the course of its determination regarding independence, the Board did not find any material relationships between the Company and any of the directors, other than Messrs. Oal’s and Plant’s employment.

28

Corporate Governance (continued)

Related Person Transactions

Review, Approval and Ratification of Transactions with Related Persons

The Company has a written Related Person Transaction Approval Policy regarding the review, approval and ratification of transactions between the Company and related persons. The policy applies to any transaction in which the Company or a Company subsidiary is a participant, the amount involved exceeds $120,000 and a related person has a direct or indirect material interest. A related person means any director or executive officer of the Company, any nominee for director, any shareholder known to the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities, and any immediate family member of any such person.

Under this policy, reviews are conducted by management to determine which transactions or relationships should be referred to the Governance and Nominating Committee for consideration. The Governance and Nominating Committee then reviews the material facts and circumstances regarding a transaction and determines whether to approve, ratify, revise or reject a related person transaction, or to refer it to the full Board or another committee of the Board for consideration. The Company’s Related Person Transaction Approval Policy operates in conjunction with other aspects of the Company’s compliance program, including its Business Conduct Policies, which require that all directors, officers and employees have a duty to be free from the influence of any conflict of interest when they represent the Company in negotiations or make recommendations with respect to dealings with third parties, or otherwise carry out their duties with respect to the Company.

The Board has considered the following types of potential related person transactions and pre-approved them under the Company’s Related Person Transaction Approval Policy as not presenting material conflicts of interest:

(i)

employment of Howmet Aerospace executive officers (except employment of a Howmet Aerospace executive officer that is an immediate family member of another Howmet Aerospace executive officer, director, or nominee for director) as long as the Compensation and Benefits Committee has approved the executive officers’ compensation;

​

(ii)

director compensation that the Board has approved;

​

(iii)

any transaction with another entity in which the aggregate amount involved does not exceed the greater of  $1,000,000 or 2% of the other entity’s total annual revenues, if a related person’s interest arises only from:

​

 (a)

such person’s position as an employee or executive officer of the other entity; or

​

 (b)

such person’s position as a director of the other entity; or

​

 (c)

the ownership by such person, together with his or her immediate family members, of less than a 10% equity interest in the aggregate in the other entity (other than a partnership); or

​

 (d)

both such position as a director and ownership as described in (b) and (c) above; or

​

 (e)

such person’s position as a limited partner in a partnership in which the person, together with his or her immediate family members, have an interest of less than 10%;

​

(iv)

charitable contributions in which a related person’s only relationship is as an employee (other than an executive officer), or a director or trustee, if the aggregate amount involved does not exceed the greater of  $250,000 or 2% of the charitable organization’s total annual receipts;

​

(v)

transactions, such as the receipt of dividends, in which all shareholders receive proportional benefits;

​

(vi)

transactions involving competitive bids;

​

(vii)

transactions involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority; and

​

(viii)

transactions with a related person involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.

​

29

Corporate Governance (continued)

Transactions with Related Persons in 2019

Based on information provided by the directors, the executive officers, and the Company’s legal department, the Governance and Nominating Committee determined that there are no material related person transactions to be reported in this proxy statement. We indemnify our directors and officers to the fullest extent permitted by law against personal liability in connection with their service to the Company. This indemnity is required under the Company’s Certificate of Incorporation and the Bylaws, and we have entered into agreements with these individuals contractually obligating us to provide this indemnification to them.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation and Benefits Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of our Board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation and Benefits Committee.

Compensation Consultants

During 2019, the Compensation and Benefits Committee continued its retention of Pay Governance LLC as its independent compensation consultant. See “Executive Compensation—Compensation Discussion and Analysis—Compensation Philosophy and Design—Compensation Decision-Making Process—Use of Independent Compensation Consultant.” The committee assessed Pay Governance’s independence and found no conflict of interest. In its assessment, the committee took into account the following factors:

•

Pay Governance provides no other services to the Company;

​

•

the amount of fees received from the Company by Pay Governance as a percentage of Pay Governance’s total revenue;

​

•

the policies and procedures that Pay Governance has in place to prevent conflicts of interest;

​

•

any business or personal relationships between the consultant(s) at Pay Governance performing consulting services and any Compensation and Benefits Committee members or any executive officer; and

​

•

any ownership of Company stock by the consultant(s).

​

In addition, during 2019, the Governance and Nominating Committee continued to retain Pearl Meyer to provide consultation services regarding non-employee director compensation, see “Director Compensation” on page 18. The committee did not find any conflict of interest with Pearl Meyer and considered the following factors in its determination:

•

Pearl Meyer provides no other services to the Company;

​

•

the amount of fees received from the Company by Pearl Meyer as a percentage of Pearl Meyer’s total revenue;

​

•

the policies and procedures that Pearl Meyer has in place to prevent conflicts of interest;

​

•

any business or personal relationships between the consultant(s) at Pearl Meyer performing consulting services and any Board members or any executive officer; and

​

•

any ownership of Company stock by the consultant(s).

​

Corporate Governance Materials Available on Howmet Aerospace’s Website

The following documents, as well as additional corporate governance information and materials, are available on our website at http://www.howmet.com under “Investors—Corporate Governance—Governance and Policies”:

•

Certificate of Incorporation

​

•

Bylaws

​

•

Board Confidentiality Policy

​

•

Corporate Governance Guidelines

​

•

Director Independence Standards

​

•

Anti-Corruption Policy

​

•

Business Conduct Policies

​

30

Corporate Governance (continued)

•

Code of Ethics for the CEO, CFO and Other Financial Professionals

​

•

Policy for Hiring Members (or Former Members) of Independent Public Auditors

​

•

Human Rights Policy

​

•

Insider Trading Policy

​

•

Related Person Transaction Approval Policy

​

In addition, the following documents are available on our website at http://www.howmet.com under “Investors—Corporate Governance—Board Committees”:

•

Charters of each of our Board committees and subcommittee

​

Copies of these documents are also available in print form at no charge by sending a request to Howmet Aerospace Inc., Corporate Secretary’s Office, 201 Isabella Street, Suite 200, Pittsburgh, PA 15212-5872 or email: CorporateSecretary@howmet.com.

Information on our website is not, and will not be deemed to be, a part of this proxy statement or incorporated into any of our other filings with the SEC.

Business Conduct Policies and Code of Ethics

The Company’s Business Conduct Policies, which have been in place for many years, apply equally to the directors and to all officers and employees of the Company, as well as those of our controlled subsidiaries, affiliates and joint ventures. The directors and employees in positions to make discretionary decisions are surveyed annually regarding their compliance with the policies.

The Company also has a Code of Ethics applicable to the CEO, CFO and other financial professionals, including the principal accounting officer, and those subject to it are surveyed annually for compliance with it. Only the Audit Committee can amend or grant waivers from the provisions of the Company’s Code of Ethics, and any such amendments or waivers will be posted promptly at http://www.howmet.com. To date, no such amendments have been made or waivers granted.

Recovery of Incentive Compensation

The Board of Directors adopted the following policy in 2006:

If the Board learns of any misconduct by an executive officer that contributed to the Company having to restate all or a portion of its financial statements, it shall take such action as it deems necessary to remedy the misconduct, prevent its recurrence and, if appropriate, based on all relevant facts and circumstances, take remedial action against the wrongdoer in a manner it deems appropriate. In determining what remedies to pursue, the Board shall take into account all relevant factors, including whether the restatement was the result of negligent, intentional or gross misconduct. The Board will, to the full extent permitted by governing law, in all appropriate cases, require reimbursement of any bonus or incentive compensation awarded to an executive officer or effect the cancellation of unvested restricted or deferred stock awards previously granted to the executive officer if: (a) the amount of the bonus or incentive compensation was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement; (b) the executive engaged in intentional misconduct that caused or partially caused the need for the restatement; and (c) the amount of the bonus or incentive compensation that would have been awarded to the executive had the financial results been properly reported would have been lower than the amount actually awarded. In addition, the Board may dismiss the executive officer, authorize legal action for breach of fiduciary duty or take such other action to enforce the executive’s obligations to Howmet Aerospace as the Board determines fit the facts surrounding the particular case. The Board may, in determining appropriate remedial action, take into account penalties or punishments imposed by third parties, such as law enforcement agencies, regulators or other authorities. The Board’s power to determine the appropriate punishment for the wrongdoer is in addition to, and not in replacement of, remedies imposed by such entities.

The 2009 Alcoa Stock Incentive Plan, the 2013 Howmet Aerospace Stock Incentive Plan, as Amended and Restated, the Howmet Aerospace Inc. 2020 Annual Cash Incentive Plan and the Howmet Aerospace Internal Revenue Code Section 162(m) Compliant Annual Cash Incentive Compensation Plan each contain recoupment provisions consistent with this policy.

31

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers, and persons who beneficially own more than ten percent of a registered class of the Company’s equity securities, to file initial reports of ownership and reports of changes in ownership of the Company’s common stock and other equity securities with the SEC within specified periods. Due to the complexity of the reporting rules, the Company undertakes to file such reports on behalf of its directors and executive officers and has instituted procedures to assist them with these obligations. Based solely on a review of filings with the SEC and written representations from the Company’s directors and executive officers, the Company believes that in 2019 all of its directors and executive officers filed the required reports on a timely basis under Section 16(a), with the exception of  then director David P. Hess, who filed a late Form 4 on January 24, 2019, reporting the grant of restricted share units on January 15, 2019. The untimeliness of the foregoing Form 4 was due to an administrative error by the Company.

Howmet Aerospace Stock Ownership

Stock Ownership of Certain Beneficial Owners

The following table sets forth certain information about each person or entity known to us to be the beneficial owner of more than five percent of Howmet Aerospace common stock, based on filings made under Section 13(d) and Section 13(g) of the Securities Exchange Act of 1934, as amended.

​

1

Based on shares outstanding on March 19, 2020.

​

2

In a Schedule 13G amendment dated February 10, 2020, The Vanguard Group, an investment adviser, reported that, as of December 31, 2019, it had sole power to vote or direct to vote 579,017 shares, sole power to dispose or direct the disposition of 42,189,007 shares, shared power to vote or direct to vote 117,367 shares, and shared power to dispose or direct the disposition of 660,439 shares.

​

3

As of January 1, 2020: As reported in a Schedule 13D amendment dated January 13, 2020, Elliott Investment Management L.P. had shared power to vote and dispose of 41,565,658 shares. In addition, Elliott International, L.P. and Elliott Associates L.P. collectively had economic exposure comparable to approximately 4.1% of the shares of common stock outstanding pursuant to certain derivative agreements disclosed in the Schedule 13D amendment.

​

4

In a Schedule 13G amendment dated February 4, 2020, BlackRock, Inc., a parent holding company, reported that, as of December 31, 2019, it had sole power to vote or direct to vote 29,896,429 shares, sole power to dispose or direct the disposition of 33,916,141 shares, and no shared voting or dispositive power.

​

5

In a Schedule 13G amendment dated February 13, 2020, First Pacific Advisors, LP (“FPA”), an investment adviser, and J. Richard Atwood and Steven T. Romick, each a controlling person of FPA, reported that, as of December 31, 2019, they had shared power to vote or direct the vote of 22,715,945 shares, shared power to dispose or direct the disposition of 22,715,945 shares, and no sole voting or dispositive power.

​

32

Howmet Aerospace Stock Ownership (continued)

Stock Ownership of Directors and Executive Officers

The following table shows the ownership of Howmet Aerospace common stock, deferred share units, and deferred restricted share units, as of April 8, 2020, by each director, each of the named executive officers, and all directors and executive officers (serving as of April 8, 2020) as a group.

Deferred share units provide holders with the same economic interest as if they own Howmet Aerospace common stock. Upon a holder’s separation from the Company, the deferred share units are settled in cash at a value equivalent to the then-prevailing market value of our common stock.

Each Howmet Aerospace deferred restricted share unit is an undertaking by the Company to issue to the recipient one share of Howmet Aerospace common stock upon settlement. Deferred amounts are paid either in a lump sum or installments, as elected by the director, upon retirement from the Board.

​

*

Also serves as a director

​

1

This column shows beneficial ownership of Howmet Aerospace common stock as calculated under SEC rules. Unless otherwise noted, each director and named executive officer has sole voting and investment power over the shares of Howmet Aerospace common stock reported. None of the shares are subject to pledge. This column includes shares held of record, shares held by a bank, broker or nominee for the person’s account, shares held through family trust arrangements, and for executive officers, share equivalent units held in the Howmet Aerospace Retirement Savings Plan which confer voting rights through the plan trustee with respect to shares of Howmet Aerospace common stock. This column also includes restricted share units that vest and are payable within 60 days after April 8, 2020 and shares of Howmet Aerospace common stock that may be acquired under employee stock options that are exercisable as of April 8, 2020 or will become exercisable within 60 days after April 8, 2020, each as follows: Mr. Oal (27,643 restricted share units); Mr. Giacobbe (76,280 options); Mr. Marchuk (32,850 restricted share units); Ms. Ramundo (57,030 options); and all directors and executive officers as a group (176,520 options and 60,493 restricted share units). No awards of stock options have been made to non-employee directors. As of April 8, 2020 individual directors and executive officers, as well as all directors and executive officers as a group, beneficially owned less than 1% of the outstanding shares of common stock.

​

33

Howmet Aerospace Stock Ownership (continued)

2

This column lists (i) for executive officers, deferred share equivalent units held under the Howmet Aerospace Deferred Compensation Plan, and (ii) for directors, deferred share equivalent units held under the Amended and Restated Deferred Fee Plan for Directors. Each deferred share equivalent unit tracks the economic performance of one share of Howmet Aerospace common stock and is fully vested upon grant, but does not have voting rights.

​

3

This column lists deferred restricted share units issued under the 2013 Howmet Aerospace Stock Incentive Plan, as Amended and Restated. Each deferred restricted share unit is an undertaking by the Company to issue to the recipient one share of Howmet Aerospace common stock upon settlement. The annual deferred restricted share units to directors vest on the first anniversary of the grant date, or, if earlier, the date of the next subsequent annual meeting of shareholders following the grant date, subject to continued service through the vesting date (however, accelerated vesting provisions apply for certain termination scenarios, such as death and change in control, and pro-rata vesting provisions apply in the event of a director’s termination of service for any other reason). Deferred restricted share units granted in lieu of cash compensation pursuant to a director’s deferral election are fully vested at grant.

​

4

300,463 shares held by a trust of which Mr. Plant is the trustee and a beneficiary.

​

5

6,000 shares held by a revocable trust of which Mr. Doty and his spouse are trustees and beneficiaries.

​

34

Item 2 Ratification of Appointment of Independent Registered Public Accounting Firm

Under its written charter, the Audit Committee of the Board of Directors has sole authority and is directly responsible for the appointment, retention, compensation, oversight, evaluation and termination of the independent registered public accounting firm retained to audit the Company’s financial statements.

The Audit Committee annually evaluates the qualifications, performance and independence of the Company’s independent auditors. Based on its evaluation, the Audit Committee has appointed PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020. PricewaterhouseCoopers LLP or its predecessor firms have served continuously as the Company’s independent auditors since 1950. The Audit Committee and the Board believe that the continued retention of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders.

The Audit Committee is responsible for the approval of the engagement fees and terms associated with the retention of PricewaterhouseCoopers LLP. In addition to assuring the regular rotation of the lead audit partner as required by law, the Audit Committee is involved in the selection and evaluation of the lead audit partner and considers whether, in order to assure continuing auditor independence, there should be a regular rotation of the independent registered public accounting firm.

Although the Company’s Bylaws do not require that we seek shareholder ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm, we are doing so as a matter of good corporate governance. If the shareholders do not ratify the appointment, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopers LLP.

Representatives of PricewaterhouseCoopers LLP are expected to participate in the live webcast for the annual meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions by shareholders.

The Board of Directors recommends a vote “FOR” ITEM 2, to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020.

35

Item 2 Ratification of Appointment of Independent Registered Public Accounting Firm (continued)

Report of the Audit Committee

In accordance with its written charter, the Audit Committee of the Board of Directors is responsible for assisting the Board to fulfill its oversight of:

•

the integrity of the Company’s financial statements and internal controls;

​

•

the Company’s compliance with legal and regulatory requirements;

​

•

the independent auditors’ qualifications and independence; and

​

•

the performance of the Company’s internal audit function and independent auditors.

​

It is the responsibility of the Company’s management to prepare the Company’s financial statements and to develop and maintain adequate systems of internal accounting and financial controls. The Company’s internal auditors are responsible for conducting internal audits intended to evaluate the adequacy and effectiveness of the Company’s financial and operating internal control systems.

PricewaterhouseCoopers LLP, the Company’s independent registered public accounting firm for 2019 (the “independent auditors”), is responsible for performing independent audits of the Company’s consolidated financial statements and internal control over financial reporting and issuing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States of America (GAAP) and on the effectiveness of the Company’s internal control over financial reporting. The independent auditors also review the Company’s interim financial statements in accordance with applicable auditing standards.

In evaluating the independence of PricewaterhouseCoopers LLP, the Audit Committee has (i) received the written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the Public Company Accounting Oversight Board (PCAOB) regarding the audit firm’s communications with the Audit Committee concerning independence; (ii) discussed with PricewaterhouseCoopers LLP the firm’s independence from the Company and management; and (iii) considered whether PricewaterhouseCoopers LLP’s provision of non-audit services to the Company is compatible with the auditor’s independence. In addition, the Audit Committee has assured that the lead audit partner is rotated at least every five years in accordance with Securities and Exchange Commission and PCAOB requirements, and considered whether there should be a regular rotation of the audit firm itself in order to assure the continuing independence of the outside auditors. The Audit Committee has concluded that PricewaterhouseCoopers LLP is independent from the Company and its management.

The Audit Committee has reviewed with the independent auditors and the Company’s internal auditors the overall scope and specific plans for their respective audits, and the Audit Committee regularly monitored the progress of both in assessing the Company’s compliance with Section 404 of the Sarbanes-Oxley Act, including their findings, required resources and progress to date.

At every regular meeting, the Audit Committee meets separately, and without management present, with the independent auditors and the Company’s Vice President—Internal Audit. to review the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s accounting and financial reporting. The Audit Committee also meets separately at its regular meetings with the Chief Financial Officer and the Chief Legal Officer, and meets separately twice a year with the Chief Ethics and Compliance Officer.

The Audit Committee has met and discussed with management and the independent auditors the fair and complete presentation of the Company’s financial statements. The Audit Committee has also discussed and reviewed with the independent auditors all communications required by GAAP, including those described in Auditing Standards No. 16, “Communication with Audit Committees”, as adopted by the PCAOB. The Audit Committee has discussed significant accounting policies applied in the financial statements, as well as alternative treatments. Management has represented that the consolidated financial statements have been prepared in accordance with GAAP, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with both management and the independent auditors.

36

Item 2 Ratification of Appointment of Independent Registered Public Accounting Firm (continued)

Relying on the foregoing reviews and discussions, the Audit Committee recommended to the Board of Directors, and the Board approved, inclusion of the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the Securities and Exchange Commission. In addition, the Audit Committee has approved, subject to shareholder ratification, the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020.

The Audit Committee
Ulrich R. Schmidt, Chair
James F. Albaugh
Joseph S. Cantie
 
April 22, 2020

Audit and Non-Audit Fees

The following table shows fees incurred by Arconic Inc.1 for professional services rendered by PricewaterhouseCoopers LLP (PwC) for the past two fiscal years ended December 31 (in millions):

​

1

The separation of Arconic Inc. into two standalone, publicly-traded companies, Howmet Aerospace Inc. (the new name for Arconic Inc.) and Arconic Corporation, became effective on April 1, 2020. The fees shown in the table relate to audit and non-audit fees incurred by Arconic Inc. prior to the separation of its business.

​

The Audit Committee has adopted policies and procedures for pre-approval of audit, audit-related, tax and other services, and for pre-approval of fee levels for such services. See “Attachment A—Pre-Approval Policies and Procedures for Audit and Non-Audit Services” on page 73. All services set forth in the table above were approved by the Audit Committee before being rendered.

Audit Fees are comprised of the base audit fee (including statutory audit fees), effects of foreign currency exchange rates on the base audit fee, and scope adjustments to the base audit requirements. The increase in audit fees from 2018 to 2019 was principally due to tax restructuring audit work, which is mostly non-recurring.

Audit-Related Fees include due diligence and audit services for divestitures and agreed-upon or expanded audit procedures for accounting or regulatory requirements. For 2019, this category also includes fees associated with the audit and review by PwC of carve-out financial statements in anticipation of the separation.

Tax Fees include U.S. federal, state and local tax support, international tax support, and review and preparation of tax returns.

All Other Fees include benchmarking services across a number of Howmet Aerospace entities.

37

Item 3 Advisory Approval of Executive Compensation

As required pursuant to Section 14A of the Securities Exchange Act of 1934, the Board of Directors is asking you to approve, on an advisory basis, the executive compensation programs and policies and the resulting 2019 compensation of the individuals listed in the “2019 Summary Compensation Table” on page 55 (our “named executive officers”), as described in this proxy statement.

Because the vote is advisory, the result will not be binding on the Compensation and Benefits Committee and it will not affect, limit or augment any existing compensation or awards. The Compensation and Benefits Committee will, however, take into account the outcome of the vote when considering future compensation arrangements.

The Board has determined that advisory votes on executive compensation will be submitted to shareholders on an annual basis, at least until the next required advisory vote on the frequency of shareholder votes in 2023. The next advisory vote on executive compensation will occur at the 2021 Annual Meeting of Shareholders.

We believe you should read the Compensation Discussion and Analysis and the compensation tables in determining whether to approve this proposal.

The Board of Directors recommends approval of the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the executive compensation tables and the related narrative discussion, is hereby APPROVED.”

The Board of Directors recommends a vote “FOR” ITEM 3, to approve, on an advisory basis, the compensation of the Company’s named executive officers, as stated in the above resolution.

Compensation Committee Report

The Compensation and Benefits Committee has:

1.

reviewed and discussed with management the Compensation Discussion and Analysis included in this proxy statement; and

​

2.

based on the review and discussions referred to in paragraph (1) above, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s proxy statement relating to the 2019 Annual Meeting of Shareholders.

​

The Compensation and Benefits Committee – effective April 1, 2020
Robert F. Leduc, Chair
Joseph S. Cantie
Nicole W. Piasecki
 
April 22, 2020

38

Executive Compensation

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (CD&A) includes the compensation and benefits of our named executive officers (NEOs) with respect to fiscal year 2019 and the related decisions made by the Compensation and Benefits Committee (the “Compensation Committee”). In 2019, the Compensation Committee for Arconic Inc. consisted of:

•

From July 1, 2018 to February 6, 2019: James F. Albaugh, Arthur D. Collins, Jr. (Chair), Rajiv L. Gupta and John C. Plant

​

•

From February 6, 2019 to May 14, 2019: James F. Albaugh, Amy E. Alving, Arthur D. Collins Jr. and Rajiv L. Gupta (Chair)

​

•

From May 14, 2019 to March 31, 2020: James F. Albaugh (Chair), Amy E. Alving, and Rajiv L. Gupta

​

The current Compensation Committee members, Robert F. Leduc, Joseph S. Cantie, and Nicole W. Piasecki all became directors on April 1, 2020 upon the separation of Arconic Inc. into Howmet Aerospace and Arconic Corporation.

For 2019, our NEOs are:

The decisions and payments described in the Compensation Discussion and Analysis were made before the full global extent of COVID-19 became apparent but with the understanding that Arconic Inc. would split into two companies, Howmet Aerospace Inc. and Arconic Corporation. The Compensation Committee of each company will consider the business and financial impact to the Company, our shareholders and our employees, in making compensation decisions in respect of 2020 and when evaluating 2020 performance in early 2021.

39

Executive Compensation—Compensation Discussion and Analysis (continued)

Key Compensation Practices

We are committed to executive compensation practices that drive performance, mitigate risk and align the interests of our leadership team with the interests of our shareholders. Below is a summary of our best practices in 2019.

40

Executive Compensation—Compensation Discussion and Analysis (continued)

Executive Summary

Our Business

In 2019 Arconic Inc. was a global leader in lightweight metals engineering and manufacturing. The Company’s innovative, multi-material products, which include aluminum, titanium, and nickel, are used worldwide in aerospace, automotive, commercial transportation, packaging, building and construction, defense, and industrial applications.

Arconic Inc. operated in 18 countries and in 2019 the operations consisted of three worldwide reportable segments: Engineered Products and Solutions (EP&S), Global Rolled Products (GRP), and Transportation and Construction Solutions (TCS). We refer to these segments in this CD&A as our “business groups”.

On April 1, 2020 Arconic Inc. distributed to its stockholders the outstanding shares of common stock of Arconic Corporation (formerly known as Arconic Rolled Products Corporation), a formerly wholly owned subsidiary of Arconic Inc. that held the assets and liabilities associated with Arconic Inc.’s former Rolled Products, Extrusions, and Building and Construction Systems businesses (the “Spinoff”). As of April 1, 2020, Arconic Inc. took the name Howmet Aerospace Inc.

CEO Team Transitions

Effective as of February 6, 2019, former non-executive Chairman of the Board John C. Plant was appointed Chairman and Chief Executive Officer (CEO), succeeding Charles P. Blankenship as CEO. In addition, board member Elmer L. Doty was appointed to serve as President and Chief Operating Officer (COO), a position Mr. Doty held through August 16, 2019, and effective March 1, 2019, Neil E. Marchuk was appointed to serve as Executive Vice President, Human Resources.

In designing a compensation package for Messrs. Plant and Doty, the Board took into account their significant experience, the need to offer a compensation opportunity that would be attractive and motivating, and the unique circumstances surrounding their commencement of employment. In recognition of the importance of creating shareholder value, all components of their compensation other than base salary were directly tied to Company stock price performance and neither Mr. Plant nor Mr. Doty participated in, or currently participates in, our annual incentive program. From the date of Mr. Plant’s hire through the end of 2019, the Company stock price appreciated by 68%. On August 16, 2019, Mr Doty left his role of COO for Arconic Inc., but remained in service as a board member.

In February 2020, desiring that Mr. Plant continue to lead Howmet Aerospace after separation, the Arconic Inc. Board of Directors entered into a three-year contract with him whereby he would remain Executive Chair of the Board, and would share CEO duties as co-CEO with Tolga I. Oal, who was promoted from his role as President of the Structures Business. The Co-CEO design was devised to facilitate a seamless and successful transition at the end of Mr. Plant’s agreement.

The Arconic Inc. Board of Directors and Mr. Oal agreed to a traditional CEO compensation package, but for Mr. Plant the Company designed a compensation package in which the overwhelming majority of his compensation opportunity is in the form of restricted stock units, with the vesting of the majority of those restricted stock units dependent upon achievement of specified stock price targets. The Board believes that Mr. Plant’s compensation package is commensurate with Mr. Plant’s experience and talents and necessary for his retention and designed to directly align his interests with those of shareholders. Mr. Plant brought leadership and unique skills to the company, as well as tremendous insight stemming from his prior service as a director and as Chairman, at a time of significant organizational and financial turmoil and crisis. Mr. Plant has had unique experience leading turnarounds in automotive and manufacturing at major companies, all of which were highly successful. The Board believes that the three-year customized design of Mr. Plant’s compensation serves shareholders better than a traditional approach using base pay, annual incentives and annual LTI awards as it provides additional retention directly tied to stock price performance, which will allow the development of Tolga I. Oal as a CEO, with Mr. Plant’s experience and leadership during what will be unprecedented times.

Investor Feedback and Implementation of 2019 Compensation Strategy

At the 2019 annual meeting of shareholders, 68.2% of the votes cast on our say-on-pay proposal voted in favor of the proposal. The Company solicits feedback from investors on a regular basis throughout the year. Investor engagement offers us an opportunity to obtain investor comments and insights related to investors’ policies and views on executive

41

Executive Compensation—Compensation Discussion and Analysis (continued)

compensation and corporate governance matters. Management and the Compensation Committee take into consideration investor feedback when reviewing annually the best practices of comparable companies with respect to compensation design and mix, short-term and long-term performance metrics, long-term incentive mix by award type, performance periods, vesting provisions, short-term and long-term incentive payout history, and stock ownership guidelines. Overall, in 2019, there was positive investor feedback on our ongoing executive compensation programs, which were generally structured in a manner consistent with our 2018 executive compensation programs, and the conversations primarily focused on the more tailored compensation packages that were entered into in connection with our hire of Mr. Plant as CEO and Mr. Doty as COO. Then-Chair of the Compensation Committee, Rajiv L. Gupta, attended the majority of calls with significant shareholders. The design of Mr. Plant’s new compensation arrangement, pursuant to an agreement dated February 24, 2020 and described more fully below, takes into account the investor feedback in multiple respects, including the longer duration of the agreement, the strong tie to stock price performance, and of the vesting period for the equity awards granted thereunder.

The Compensation Committee took into consideration feedback received from investors and additional factors when making compensation decisions for 2019, including as follows:

2019 Company Performance

Arconic Inc.’s revenue in 2019 was $14.2 billion, up 1% year over year, including an increase in organic revenue of 7% year over year. Net income in 2019 was $470 million, or $1.03 per diluted share, versus $642 million, or $1.30 per diluted share, in 2018. Net income excluding special items in 2019 was $971 million, or $2.11 per share, versus $676 million, or $1.36 per share, in 2018. Operating income in 2019 was $1.04 billion versus $1.3 billion in 2018. Operating income excluding special items in 2019 was $1.8 billion versus $1.4 billion in 2018, driven by favorable product pricing; net cost reductions; volume growth in aerospace, packaging and commercial transportation markets; and favorable aluminum and raw material costs. These impacts were partially offset by unfavorable product mix.

The Company ended the year with debt of  $5.9 billion and cash on hand of  $1.7 billion. In 2019, cash provided from operations was $406 million, cash used for financing activities was $1.6 billion, and cash provided from investing activities was $583 million. Adjusted Free Cash Flow for the year was $870 million, up 87% from full year 2018.

Segment performance in 2019 included the following:

•

Engineered Products and Solutions revenue of  $7.1 billion, up 5% year over year, with organic revenue up 6% year over year; segment operating profit of  $1.39 billion, up $285 million year over year; and segment operating margin of 19.6%, up 330 basis points year over year.

​

•

Global Rolled Products revenue of  $7.1 billion, down 2% year over year, with organic revenue up 6% year over year; segment operating profit of  $625 million, up $144 million year over year; and segment operating margin of 8.8%, up 210 basis points year over year.

​

See “Attachment C—Calculation of Financial Measures” for the reconciliations to the most directly comparable GAAP (accounting principles generally accepted in the United States of America) measures and management’s rationale for the non-GAAP financial measures used in this CD&A.

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Executive Compensation—Compensation Discussion and Analysis (continued)

2019 Incentive Compensation Results

Consistent with the Company’s pay-for-performance practices, a combination of positive performance against annual targets in 2019 and a shortfall of performance against long-term targets resulted in payouts that were above target for annual incentive compensation and below target for long-term incentive compensation after incorporation of applicable adjustments. The corporate annual incentive compensation plan had a payout of 170% based on 2019 performance against the targets set under the plan. Performance against long-term incentive awards was earned as follows:

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The 2017 performance-based restricted share unit awards were earned at 78.3% based on performance against targets for the 2017-2019 three-year performance period.

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In connection with the Spinoff, the 2018 grant of performance-based restricted share unit awards was adjusted from a three-year to a two-year performance period from January 1, 2018 through December 31, 2019, since there would be no 2020 Arconic Inc. data to measure for the third year. The awards were earned at 97.5% against targets for the 2018-2019 performance period.

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Also in connection with the Spinoff, the 2019 grant was granted entirely in time-based restricted stock units that vest over a three-year period.

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Compensation Philosophy and Design

The Company’s executive compensation philosophy to provide pay for performance and shareholder alignment underlies our 2019 compensation structure, which is designed based on three guiding principles:

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Make equity long-term incentive (LTI) compensation the most significant portion of total compensation for senior executives and managers, increasing alignment between our executive’s incentives and shareholder value.

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Choose annual incentive compensation (IC) metrics that focus management’s actions on achieving the greatest positive impact on the Company’s financial performance and that include a means to assess and motivate performance relative to peers.

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Set annual IC targets that challenge management to achieve continuous improvement in performance and deliver long-term growth.

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Executive Compensation—Compensation Discussion and Analysis (continued)

2019 Executive Compensation Design Relies on a Diversified Mix of Pay Elements

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Executive Compensation—Compensation Discussion and Analysis (continued)

Challenging Payout Curves

The Compensation Committee has continued the practice of setting payout curves with a steep drop-off below target to incentivize hitting target and flatter curve above target so that higher payouts can only be earned with significant performance above target.

Under the 2019 annual cash IC plan, for both adjusted operating income and controllable free cash flow:

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the threshold for earning a payout was set at 90% of target; and

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earning 200% of the payout level required performance at 120% of target.

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For the 2017 and 2018 performance restricted share awards the payout levels were set as follows:

Investor Engagement and Benchmarking

We actively engage in compensation and governance-related discussions with investors throughout the year to obtain comments and insights that guide our executive compensation programs. Conversations with our investors’ governance and compensation professionals help us understand investor priorities and provide us with guidance on our compensation and governance practices. In 2019, as noted above, we continued our ongoing dialogue with investors, holding meetings and calls with governance and compensation professionals at 11 of our largest 50 shareholders. Then-Chair of the Compensation and Benefits Committee, Rajiv L. Gupta, attended the majority of calls with significant shareholders.

The Company also conducts an annual comparative study of companies in the Company’s peer group (see “CD&A—Comparator Peer Groups” on page 48). The study reviews compensation design and mix, short-term and long-term performance metrics, long-term incentive mix by award type, performance periods, vesting provisions, short-term and long-term incentive payout history, stock ownership guidelines and change-in-control provisions.

The investor insights and results from the peer benchmarking study guided the Compensation Committee in the 2019 design of the Company’s executive compensation programs and practices, other than for the alternative arrangements developed for our CEO and former COO.

Compensation Decision-Making Process in 2019

Use of Independent Compensation Consultant. The Compensation Committee has authority under its charter to retain its own advisors, including compensation consultants. In 2019, the Compensation Committee directly retained Pay Governance LLC, which is independent and without conflicts of interest with the Company. See “Corporate Governance—Compensation Consultants” on page 30. Pay Governance provided advice, as requested by the Compensation Committee, on the amount and form of certain executive compensation components, including, among other things, executive compensation best practices, insights concerning Securities and Exchange Commission (SEC) say-on-pay policies, analysis and review of the Company’s compensation plans for executives and advice on setting compensation. Pay Governance also provided advice on the CD&A in this proxy statement. We use comparative compensation data from the proxy statements of the peer group companies and survey data from Willis Towers Watson to help evaluate whether our compensation programs are competitive with the market. The latter is not customized based on parameters developed by Willis Towers Watson. Willis Towers Watson does not provide any advice or recommendations to the Compensation Committee on the amount or form of executive or director compensation.

In designing a compensation package for Messrs. Plant and Doty, the Board took into account their significant experience, the need to offer a compensation opportunity that would be attractive and motivating, and the unique circumstances surrounding their commencement of employment. In recognition of the importance of creating shareholder value, all components of their compensation other than base salary were directly tied to Company stock price performance and neither Mr. Plant nor

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Executive Compensation—Compensation Discussion and Analysis (continued)

Mr. Doty participated in, or currently participates in, our annual incentive program. From the date of Mr. Plant’s hire through the end of 2019, the Company stock price appreciated by 68%. On August 16, 2019, Mr. Doty left his role of COO for Arconic Inc., but remained as a board member.

Compensation Decision-Making Process in 2020

In February 2020, desiring that Mr. Plant continue to lead Howmet Aerospace after separation, the Arconic Inc. Board of Directors entered into a three-year contract with him whereby he would remain Executive Chair of the Board, and would share CEO duties as co-CEO with Tolga I. Oal, who was promoted from his role as President of the Structures Business. The Co-CEO design was devised to facilitate a seamless and successful transition at the end of Mr. Plant’s agreement.

The Arconic Inc. Board of Directors and Mr. Oal agreed to a traditional CEO compensation package, but for Mr. Plant the Company designed a compensation package in which the overwhelming majority of his compensation opportunity is in the form of restricted stock units, with the vesting of the majority of those restricted stock units dependent upon achievement of specified stock price targets. The Board believes that Mr. Plant’s compensation package is commensurate with Mr. Plant’s experience and talents and necessary for his retention and designed to directly align his interests with those of shareholders. Mr. Plant brought leadership and unique skills to the Company, as well as tremendous insight stemming from his prior service as a director and as Chairman at a time of significant organizational and financial turmoil and crisis. Mr. Plant has had unique experience leading turnarounds in automotive and manufacturing at major companies, all of which were highly successful. The Board believes that the customized design of Mr. Plant’s compensation serves shareholders better than a one-size-fits-all approach.

Use of Peer Groups and Tally Sheets. The Compensation Committee uses peer group data to determine the target compensation levels of certain of our NEOs. We aim to set target annual direct compensation of each of our NEOs at the median of the applicable peer group, except for our CEO and former COO with whom we entered into individually competitive arrangements in connection with their hires as executives of the Company. In making annual compensation decisions, the Compensation Committee also reviews tally sheets that summarize various elements of historic and current compensation for each NEO. This information includes compensation opportunity, actual compensation realized, and wealth accumulation. We have found that the tally sheets help us synthesize the various components of our compensation programs in making decisions.

Conservative Compensation Risk Profile. We evaluate the risk profile of our compensation programs when establishing policies and approving plan design. These evaluations have noted numerous factors that effectively manage or mitigate compensation risk, including the following:

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A balance of corporate and business unit weighting in incentive compensation programs;

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A balanced mix between short-term and long-term incentives;

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Caps on incentives;

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Use of multiple performance measures in the annual cash incentive compensation plan;

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Discretion retained by the Compensation Committee to adjust awards;

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Stock ownership guidelines requiring holding substantial equity in the Company until retirement;

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Claw-back policies applicable to all forms of incentive compensation; and

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Anti-hedging provisions in the Company’s Insider Trading Policy.

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In addition, (i) no business unit has a compensation structure significantly different from that of other units or that deviates significantly from the Company’s overall risk and reward structure; (ii) unlike financial institutions involved in the financial crisis, where leverage exceeded capital by many multiples, the Company has a conservative leverage policy; and (iii) compensation incentives are not based on the results of speculative trading. As a result of these evaluations, we have determined that it is not reasonably likely that risks arising from our compensation and benefit plans would have a material adverse effect on the Company.

Tax Deductibility and our Incentive Compensation Plans. Section 162(m) of the Internal Revenue Code, as amended by the Tax Cuts and Jobs Act of 2017, restricts deductibility for federal income tax purposes of annual individual compensation in excess of  $1 million paid to covered executive officers. Prior to the enactment of the Tax Cuts and Jobs Act of 2017, Section 162(m)’s deductibility limitation was subject to an exception for compensation that meets the requirements of

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Executive Compensation—Compensation Discussion and Analysis (continued)

“qualified performance-based compensation.” However, effective for tax years beginning after 2017, this exception was eliminated, subject to limited transition relief that applies to certain written binding contracts which were in effect on November 2, 2017. Accordingly, for 2018 and later years, compensation in excess of  $1 million paid to our covered NEOs generally is not deductible and no assurances can be given that compensation payable under certain of our compensation programs which were intended to qualify for the performance-based exception will in fact be deductible.

As a general matter, while the Compensation Committee considers tax deductibility as one of several relevant factors in determining executive compensation, it retains the flexibility to approve compensation that is not deductible by the Company for federal income tax purposes. The Compensation Committee believes that a significant portion of our NEOs’ compensation should continue to be tied to the Company’s performance, notwithstanding the elimination of the qualified performance-based compensation exception under Section 162(m).

Compliance with Stock Ownership Guidelines. Our stock ownership requirements further align the interests of management with those of our shareholders by requiring executives to hold substantial equity in the Company until retirement. Our stock ownership guidelines require that the CEO retain equity equal in value to six times his base salary and that each of the other continuing NEOs retain equity equal in value to three times base salary. Unlike many of our peers, we do not count any unvested or unexercised options, restricted share units, performance-based restricted share units or stock appreciation rights towards compliance. Our guidelines reinforce management’s focus on long-term shareholder value and commitment to the Company. Until the stock ownership requirements are met, each executive is required to retain until retirement 50% of shares acquired upon vesting of restricted share units (including performance-based restricted shares units) or upon exercise of stock options that vest after March 1, 2011, after deducting shares used to pay for the option exercise price and taxes. Post Spinoff, the stock ownership guidelines will be revised to include higher stock ownership limits that reflect the decrease in the Company stock price due to the Spinoff. It is anticipated that after the revision, Mr. Plant will continue to meet the stock ownership requirement, while the other continuing NEOs will have not yet met the guideline but will continue to retain a minimum of 50% of all shares acquired upon vesting of Company equity awards until they meet the guideline.

No Short Sales, Derivative or Speculative Transactions, Hedging, or Pledging of Company Securities. Short sales of Company securities (a sale of securities which are not then owned) and derivative or speculative transactions in Company securities by our directors, officers and employees are prohibited. No director, officer or employee or any designee of such director, officer or employee is permitted to purchase or use financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of Company securities. Directors and officers subject to Section 16 of the Securities Exchange Act of 1934 are prohibited from holding Company securities in margin accounts, pledging Company securities as collateral, or maintaining an automatic rebalance feature in savings plans, deferred compensation plans or deferred fee plans.

Compensation Decisions

Analysis of 2019 Compensation Decisions

The Compensation Committee uses its business judgment to determine the appropriate compensation targets and awards for the NEOs, in addition to assessing several factors that include:

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Market positioning based on peer group data (See “2019 Comparator Peer Groups” on page 48);

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Individual, Group, and Corporate performance;

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Complexity and importance of the role and responsibilities;

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Aggressiveness of targets;

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