DEF 14A

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

(Amendment No. )

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

Check the appropriate box:


☐		Preliminary Proxy Statement

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

☒		Definitive Proxy Statement

☐		Definitive Additional Materials

☐		Soliciting Material under Rule 14a-12

STEPAN COMPANY

(Name of registrant as specified in its charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):



☒		No fee required.

☐		Fee paid previously with preliminary materials.

☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

LOGO

2025 Proxy Statement and

Notice of Annual Meeting of Stockholders

STEPAN COMPANY

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To be held on April 29, 2025

at 9:00 a.m. (CDT)

To the Stockholders:

Notice is hereby given that the 2025 Annual Meeting of Stockholders (the “Annual Meeting”) of Stepan Company (the “Company”) will be held at the Company’s offices at 1101 Skokie Boulevard, Northbrook, Illinois 60062, on Tuesday, April 29, 2025, at 9:00 a.m. (CDT), for the following purposes:

To elect two directors to the Board of Directors, each for a three-year term;

To approve, on an advisory basis, the compensation of the Company’s named executive officers (the “Say-on-Pay” vote);

To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2025;

To approve the amendment and restatement of the Stepan Company 2022 Equity Incentive Compensation Plan; and

To transact such other business as may properly come before the meeting.

The Board of Directors has designated the close of business on March 3, 2025, as the record date for determining the holders of record of the Company’s Common Stock entitled to notice of and to vote at the meeting.

The Board of Directors extends a cordial invitation to all stockholders to attend the Annual Meeting. Whether or not you plan to attend the meeting, please mark, sign and mail the enclosed proxy card in the return envelope provided or vote by internet or phone as promptly as possible.

As a reminder, your broker may not vote your shares for non-routine matters such as the election of directors, the Say-on-Pay vote or the amendment and restatement of the 2022 Equity Incentive Compensation Plan without your specific instructions as to how to vote. Therefore, we urge you to provide your broker with voting instructions by returning your proxy card so your votes for all proposals can be counted.

Directions to the Annual Meeting are available at https://stepan.gcs-web.com/annual-meeting for those stockholders who plan to attend the Annual Meeting.

By order of the Board of Directors,

Stephanie J. Pacitti

Interim Corporate Secretary

Northbrook, Illinois

March 25, 2025

Important Notice Regarding the Availability of Proxy Materials for the

Annual Meeting of Stockholders to Be Held on April 29, 2025

The Company’s Proxy Statement, 2024 Annual Report to Stockholders and Annual Report on Form 10-K for the year ended December 31, 2024, are available at http://www.edocumentview.com/SCL.

TABLE OF CONTENTS


Information Concerning Solicitation and Voting			1

Proposal No. 1: Election of Directors			3

Nominees for Director			3

Directors Who Are Not Nominated for Election			5

Security Ownership			8

Security Ownership of Certain Beneficial Owners			8

Security Ownership of the Board of Directors and Management			8

Certain Relationships and Related Party Transactions			11

Policies and Procedures for Approving Related Person Transactions			11

Transactions with Related Persons, Promoters and Certain Control Persons			11

Corporate Governance Principles and Board Matters			12

Corporate Governance Guidelines and Code of Conduct			12

Board Committees			12

Board Performance Evaluations			13

Board Meetings and Attendance			14

Director Nomination Process			14

Board Composition			15

Director Independence			15

Board Leadership Structure			16

Risk Management			17

Executive Sessions			17

Compensation Committee Interlocks and Insider Participation			17

Executive Compensation			18

Compensation Discussion and Analysis			18

Summary of Executive Compensation in 2024			18

Significant Developments in 2024			18

Executive Compensation Best Practices the Company Follows			19

Compensation Philosophy			19

Compensation Objectives			20

Role of the Human Capital and Compensation Committee			20

Role of the Compensation Consultant			20

Role of the Committee and Executives in Establishing Executive Compensation			21

Advisory Vote on Executive Compensation			21

Executive Pay Mix			22

Compensation Peer Group and Survey Data			22

Elements of Compensation			23

Clawback Policy			33

Stock Ownership Policy			34



Insider Trading Policy			36

Post-Termination Benefits			36

Impact of Tax and Accounting Considerations			36

Human Capital and Compensation Committee Report			37

Executive Compensation Tables			38

2024 Summary Compensation Table			38

2024 Grants of Plan-Based Awards			40

Outstanding Equity Awards at 2024 Fiscal Year-End			42

2024 Option Exercises and Stock Vested			46

2024 Pension Benefits			47

2024 Nonqualified Deferred Compensation			49

Potential Payments upon Termination or Change in Control			50

CEO Pay Ratio			53

Pay Versus Performance			54

Director Compensation			57

Overview of Director Compensation Program			57

Directors’ Fees			57

Directors Deferred Compensation Plan			57

Stock Awards and Incentive Compensation Program for Non-Employee Directors			57

Non-Employee Directors’ Stock Ownership Policy			58

Insider Trading Policy			58

2024 Director Compensation Table			58

Proposal No. 2: Advisory Vote to Approve Named Executive Officer Compensation			60

Audit Committee Report			62

Proposal No. 3: Ratify the Appointment of Deloitte & Touche LLP as the Company’s Independent Public Accounting Firm for 2025			63

Independent Registered Public Accounting Firm Fees			63

Pre-Approval Policy			64

Proposal No. 4: Approve the Amendment and Restatement of the Stepan Company 2022 Equity Incentive Compensation Plan			65

Overview			65

Why We Believe You Should Vote for This Proposal			65

A&R 2022 Plan Highlights			67

Summary of Other Material Terms of the A&R 2022 Plan			69

Historical Awards			77

New Plan Benefits			78

U.S. Federal Income Tax Consequences			78

Registration with the SEC			80

Equity Compensation Plan Information			80



2026 Stockholder Proposals and Director Nominations			81

Communications for All Interested Parties			81

Annual Report to Stockholders			82

Appendix A: Explanations of GAAP and Non-GAAP Financial Measures			A-1

Appendix B: Stepan Company 2022 Equity Incentive Compensation Plan (As Amended and Restated Effective April 29, 2025)			B-1

iii

March 25, 2025

PROXY STATEMENT

For the Annual Meeting of Stockholders of

STEPAN COMPANY

1101 Skokie Boulevard

Northbrook, Illinois 60062

To be held at 9:00 a.m. (CDT) on April 29, 2025

INFORMATION CONCERNING SOLICITATION AND VOTING

The enclosed proxy is solicited by the Board of Directors, and the Company will bear the entire expense of solicitation. Such solicitation is being made by mail, and the Company’s officers and employees may solicit proxies from stockholders personally or by telephone, mail or other means. The Company will make arrangements with the brokers, custodians, nominees and other fiduciaries who request the forwarding of solicitation material to the beneficial owners of shares of the Company’s stock held of record by such brokers, custodians, nominees and other fiduciaries, and the Company will reimburse them for their reasonable out-of-pocket expenses. This proxy statement and proxy are first being distributed to stockholders commencing on or about March 25, 2025.

At the close of business on March 3, 2025, the record date for the meeting, there were 22,554,929 shares of the Company’s Common Stock (“Common Stock”) outstanding, each share of which is entitled to one vote on each matter to be voted on at the meeting. The required quorum at the Annual Meeting is a majority of the outstanding shares of the Company’s Common Stock as of the record date.

If you submit your proxy but abstain from voting on one or more matters, your shares will be counted as present at the meeting for the purposes of determining a quorum. You may revoke your proxy by attending the meeting and voting in person or by delivering to the Secretary of the Company a revocation of the proxy or an executed new proxy bearing a later date.

You may vote “FOR,” “AGAINST” or “ABSTAIN” on each of the nominees for the Board of Directors. You may vote “FOR,” “AGAINST” or “ABSTAIN” on each of the other proposals. If you vote to “ABSTAIN” with respect to a nominee for the Board of Directors, your abstention will not be included in the vote totals and will not affect the outcome of the vote. If you vote to “ABSTAIN” with respect to any other proposal, your abstention will have the effect of a vote against the proposal.

For any other business that may properly come before the meeting, votes will be cast pursuant to the authority granted by the enclosed proxy in accordance with the best judgment of the individuals acting under the proxy. The Board of Directors is not currently aware of any other business that may come before the meeting.

If you hold your shares in street name and do not provide voting instructions to your broker, custodian, nominee or other fiduciary, your shares will not be voted on any non-routine matters and will be considered “broker non-votes.” Non-routine matters include the election of directors, the Say-on-Pay vote and the vote to approve the amendment and restatement of the 2022 Equity Incentive Compensation Plan. Your broker may vote your shares without instruction on the ratification of the appointment of the Company’s independent registered public accounting firm. Broker non-votes will be counted as present at the meeting for the purpose of determining a quorum but will not be included in

the vote totals for non-routine matters and will not affect the outcome of those votes. Please instruct your broker or bank so your vote can be counted on all proposals.

In order to ensure the necessary quorum at the Annual Meeting, please mark, sign and return the enclosed proxy promptly in the envelope provided. You may also vote via the internet by visiting http://www.envisionreports.com/SCL or by phone by calling (800) 652-8683. Internet and phone voting will be available 24 hours a day, seven days a week until 1:00 a.m. (EDT) on April 29, 2025. If voting via the internet or by phone, please have your proxy card available and follow the instructions to vote. Even if you vote prior to the meeting, you are invited to attend the meeting.

In the future, in accordance with the rules of the Securities and Exchange Commission (the “SEC”), the Company may furnish proxy materials, including its proxy statements and annual reports, to stockholders by providing access to these documents on the internet instead of mailing printed copies. If the Company elects to take this approach, most stockholders would not receive printed copies of the proxy materials. Instead, the notice would provide instructions on how to access and review the proxy materials on the internet. The notice would also provide instructions on how to submit your proxy via the internet. For stockholders who prefer to receive printed copies of the proxy materials, the notice would provide instructions for requesting printed copies.

PROPOSAL NO. 1: ELECTION OF DIRECTORS

Stockholders and the persons named in the enclosed proxy will vote, pursuant to the authority granted by the stockholder in the enclosed proxy, on the election of Ms. Lorinda A. Burgess and Mr. Luis E. Rojo as directors of the Company, to hold office until the Annual Meeting of Stockholders to be held in 2028. The Board of Directors is divided into three classes serving staggered three-year terms. Directors for each class are elected at the annual meeting of stockholders in the year in which the term for their class expires. Ms. Burgess and Mr. Rojo are current directors whose terms expire in 2025. Ms. Burgess was last elected by the Company’s stockholders at the 2022 Annual Meeting. Mr. Rojo was elected by the Board of Directors on October 29, 2024. The nominations of Ms. Burgess and Mr. Rojo have each been reviewed and recommended by the Nominating and Corporate Governance Committee and the Board of Directors.

Mr. Edward J. Wehmer, a current director whose term also expires in 2025, has decided not to seek re-election. Mr. Wehmer was first elected as a director in 2003. The Board of Directors and the Company wish to thank Mr. Wehmer for the valuable leadership and guidance he has provided in his 22 years of service as a director.

In the event either of Ms. Burgess or Mr. Rojo is unable to serve as director, votes will be cast, pursuant to the authority granted in the proxy, for such person or persons as may be designated by the Board of Directors. The Board of Directors at this time is not aware of any nominee who is or will be unable to serve as director, if elected.

Under the Company’s Amended and Restated By-laws, in an uncontested election directors are elected by a majority of the votes cast by stockholders. An uncontested election of directors means an election for which the number of nominees does not exceed the number of directors to be elected at the specific election. Because two directors are to be elected, and Ms. Burgess and Mr. Rojo are the sole nominees, this election is uncontested, and therefore the nominees must receive a majority of votes cast by stockholders to be elected.

Nominees for Director

The following table sets forth certain information about the nominees for director:

Lorinda A. Burgess

LOGO

Age: 62

Director Since: 2021

Experience

Vice President, Finance and Chief Financial Officer, Americas Region of Medtronic Inc., a medical technology company, from March 2015 through June 2023. Director of AngioDynamics, Inc. (NASDAQ: ANGO).

Qualifications

Ms. Burgess spent 25 years at Medtronic and retired as a regional chief financial officer. She provides the Board of Directors with financial expertise and with broad operational and strategic experience developed throughout her career in a range of financial leadership roles.

Luis E. Rojo

LOGO

Age: 52

Director Since: 2024

Experience

President and Chief Executive Officer of the Company since October 2024. Vice President and Chief Financial Officer of the Company from April 2018 through October 2024. From February 2018 to April 2018, Mr. Rojo served as Global Hair Care Finance Director at Procter and Gamble Co. (“P&G”), a branded consumer packaged goods company. From April 2014 to February 2018, he served as NA Hair Care Finance Director at P&G.

Qualifications

The Board believes that Mr. Rojo provides key insight into the Company’s day-to-day operations and financial condition.

PROPOSAL: The Board of Directors recommends that the stockholders vote FOR the election of Ms. Burgess and Mr. Rojo to the Board of Directors, each for a three-year term.

Directors Who Are Not Nominated for Election

The following table sets forth certain information about those directors who are not up for election:


Randall S. Dearth
Age: 61 Director Since: 2012 Term Expires: 2027		Experience Advisor to SK Capital Partners, LP, a private investment firm, since February 2025. Senior Director of SK Capital Partners, LP from January 2021 through January 2025. President and Chief Executive Officer of GCP Applied Technologies Inc., a leading global provider of construction products technologies, from August 2019 to September 2020. President and Chief Operating Officer of GCP Applied Technologies Inc. from September 2018 to August 2019. Qualifications Mr. Dearth also previously served as the President and Chief Executive Officer of LANXESS Corporation, a global chemicals manufacturer, and of Calgon Carbon Corporation, a global manufacturer of activated carbon and innovative treatment systems. Mr. Dearth provides the Board of Directors with global executive leadership in the chemical industry and a global perspective on strategy and business conditions.
Joaquin Delgado
Age: 65 Director Since: 2011 Term Expires: 2026		Experience Executive Vice President, Consumer Business Group of 3M Company, a global diversified technology company, from July 2016 to July 2019. Executive Vice President, Health Care Business Group of 3M Company, from October 2012 to July 2016. Trustee of each of Goldman Sachs Trust, Goldman Sachs Trust II, Goldman Sachs ETF Trust, Goldman Sachs ETF Trust II, Goldman Sachs Variable Insurance Trust, and Goldman Sachs Real Estate Diversified Income Fund, each of which is registered as an investment company under the Investment Company Act of 1940. Qualifications Dr. Delgado also held other executive leadership positions at 3M Company and holds a doctorate in polymer science and engineering. Dr. Delgado provides the Board of Directors with chemistry and innovation expertise and global business, operational, manufacturing, marketing and corporate development experience.

Susan M. Lewis

LOGO

Age: 59

Director Since: 2024

Term Expires: 2027

Experience

Principal of Susan Lewis Consulting LLC, a business and executive consulting firm, from March 2021 through July 2023. Senior Vice President, Global Operations, of Corteva, Inc., a global agriculture company, from September 2018 to March 2021.

Qualifications

Ms. Lewis spent over 30 years at Dow Inc., a materials science company, with operations, environmental, health and safety, sustainability and risk management responsibilities. Ms. Lewis brings the Board of Directors global experience in Six Sigma, supply chain, process optimization and capital project management. Ms. Lewis has also sponsored organizational redesign, mergers and acquisitions and transformation projects.

Jan Stern Reed

LOGO

Age: 65

Director Since: 2015

Term Expires: 2027

Experience

Senior Vice President, General Counsel and Corporate Secretary of Walgreens Boots Alliance, Inc., a global pharmacy-led, health and wellbeing enterprise, from February 2015 to February 2016. Senior Vice President, General Counsel and Secretary of Walgreen Co. from October 2014 to February 2015. Director of AngioDynamics, Inc. (NASDAQ: ANGO) and Avita Medical, Inc. (NASDAQ: RCEL).

Qualifications

Prior to joining Walgreens, Ms. Reed was Executive Vice President – Human Resources, General Counsel and Corporate Secretary of Solo Cup Company. Ms. Reed provides the Board of Directors with global executive leadership experience in legal, corporate governance and strategic business matters, as well as extensive experience with risk management, compliance, acquisitions and employee development.

F. Quinn Stepan, Jr.

LOGO

Age: 64

Director Since: 1999

Term Expires: 2026

Experience

Chairman of the Company since January 2017. Chief Executive Officer of the Company from January 2006 through April 2022. President of the Company from February 1999 through December 2020.

Qualifications

In his over 30-year career with the Company, Mr. Stepan served in a number of positions of increasing responsibility and in a variety of functions within the Company’s operations. Mr. Stepan’s leadership provides the Board of Directors with extensive knowledge of the Company’s strategy and operations.

Edward J. Wehmer

LOGO

Age: 70

Director Since: 2003

Term Expires: 2025

Experience

Founder and Senior Advisor of Wintrust Financial Corporation, a financial services company, since May 2023. Executive Chairman of Wintrust Financial Corporation from May 2023 to May 2024. Founder and Chief Executive Officer of Wintrust Financial Corporation from February 2020 through April 2023. President and Chief Executive Officer of Wintrust Financial Corporation from May 1998 to February 2020. Director of Wintrust Financial Corporation (NASDAQ: WTFC).

Qualifications

Mr. Wehmer is also a Certified Public Accountant. Mr. Wehmer provides the Board of Directors with expertise in strategic, financial, banking and accounting matters. Mr. Wehmer also has extensive experience with acquisitions.

SECURITY OWNERSHIP

Security Ownership of Certain Beneficial Owners

As of March 3, 2025, the following persons were the only persons known to the Company to beneficially own more than five percent of the Company’s Common Stock, other than members of the Company’s Board of Directors or management, whose ownership is set forth in the table below:


Name and Address	Number of Shares of Common Stock Beneficially Owned		Percentage of Outstanding Shares of Common Stock (1)

BlackRock, Inc. (2)		3,498,133		15.5%
The Vanguard Group, Inc. (3)		2,562,730		11.4%
State Street Corporation (4)		1,212,248		5.4%
Dimensional Fund Advisors LP (5)		1,201,147		5.3%

(1)	Based on 22,554,929 shares of Common Stock outstanding as of March 3, 2025.

(2)

As reported in a Schedule 13G/A filed with the SEC on January 22, 2024, by BlackRock, Inc. (“BlackRock”), 50 Hudson Yards, New York, New York 10001. In the Schedule 13G/A, BlackRock reported that, as of December 31, 2023, it had sole voting power as to 3,440,371 shares of Common Stock and sole dispositive power as to 3,498,133 shares of Common Stock.

(3)

As reported in a Schedule 13G/A filed with the SEC on February 13, 2024, by The Vanguard Group (“Vanguard”), 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. In the Schedule 13G/A, Vanguard reported that, as of December 29, 2023, it had shared voting power as to 17,017 shares of Common Stock, sole dispositive power as to 2,523,067 shares of Common Stock and shared dispositive power as to 39,663 shares of Common Stock.

(4)

As reported in a Schedule 13G/A filed with the SEC on January 24, 2024, by State Street Corporation (“State Street”), State Street Financial Center, 1 Congress Street, Suite 1, Boston, Massachusetts 02114. In the Schedule 13G/A, State Street reported that, as of December 31, 2023, it had shared voting power as to 1,137,499 shares of Common Stock and shared dispositive power as to 1,212,248 shares of Common Stock.

(5)

As reported in a Schedule 13G filed with the SEC on February 9, 2024, by Dimensional Fund Advisors LP (“Dimensional”), 6300 Bee Cave Road, Building One, Austin, Texas 78746. In the Schedule 13G, Dimensional reported that, as of December 29, 2023, it had sole voting power as to 1,177,693 shares of Common Stock and sole dispositive power as to 1,201,147 shares of Common Stock.

Security Ownership of the Board of Directors and Management

The following table sets forth, as of March 3, 2025, the security ownership of each executive officer listed in the Summary Compensation Table in this proxy statement, each director and nominee for director, and all currently serving directors and executive officers as a group. The address for each

director, nominee for director, and executive officer is c/o Stepan Company, 1101 Skokie Boulevard, Northbrook, Illinois 60062.


Name	Number of Shares of Common Stock Beneficially Owned (1)		Percentage of Outstanding Shares of Common Stock (1)

Scott R. Behrens		50,434 (2)		*
Lorinda A. Burgess		4,751 (3)		*
Randall S. Dearth		12,944 (4)		*
Joaquin Delgado		13,571		*
Robert J. Haire, Jr.		1,578 (5)		*
Samuel S. Hinrichsen		967 (6)		*
David G. Kabbes		20,945 (7)		*
Susan M. Lewis		1,896		*
Sean T. Moriarty		34,129 (8)		*
Jan Stern Reed		11,411		*
Luis E. Rojo		26,704 (9)		*
F. Quinn Stepan, Jr.		1,040,488 (10)		4.6%
Edward J. Wehmer		25,311 (11)		*
All Directors and Executive Officers		1,711,354 (12)		7.6%

*	Less than one percent of outstanding shares of Common Stock.

(1)

Based on 22,554,929 shares of Common Stock outstanding as of March 3, 2025. Number of shares of Common Stock for each director, nominee for director, and executive officer (and all directors and executive officers as a group) includes (a) shares of Common Stock owned by the spouse of each director, nominee for director, or executive officer, and shares of Common Stock held by each director, nominee for director, or executive officer, or such person’s spouse as trustee or custodian for the benefit of children and family members if such trustee or custodian has voting or investment power, (b) shares of Common Stock that may be acquired within 60 days through the exercise of stock options or stock appreciation rights (“SARs”) granted pursuant to the Company’s incentive compensation plans, and (c) shares of Common Stock pledged as security by such director, nominee for director, or executive officer, or such person’s family members.

(2)

Includes (a) 4,188 shares of Common Stock allocated to Mr. Behrens under the Company’s Employee Stock Ownership Plan II (“ESOP II”), (b) 17,569 shares of Common Stock that Mr. Behrens has the right to acquire through the exercise of stock options granted pursuant to the Company’s incentive compensation plans and (c) 14,258 shares of Common Stock credited to Mr. Behrens’ stock account under the Management Incentive Plan (as amended and restated effective January 1, 2015, the “Management Incentive Plan”). Amounts credited to an employee’s stock account will be paid to the employee at the time of separation of service from the Company as the employee has elected under the provisions of the Management Incentive Plan. Mr. Behrens served as the Company’s President and Chief Executive Officer until October 29, 2024. The information shown is as of March 11, 2024, the filing date of Mr. Behrens’ most recent Form 4.

(3)	Includes 1,417 shares of Common Stock credited to Ms. Burgess’ account pursuant to the Company’s incentive compensation plans.

(4)	Includes 1,338 shares of Common Stock credited to Mr. Dearth’s account pursuant to the Stepan Company Directors Deferred Compensation Plan (as amended and restated as of January 1, 2012).

(5)	Includes (a) 90 shares of Common Stock allocated to Mr. Haire under ESOP II and (b) 1,121 shares of Common Stock that Mr. Haire has the right to acquire through the vesting of restricted stock units (“RSUs”) granted pursuant to the Company’s incentive compensation plans.

(6)

Includes (a) 367 shares of Common Stock allocated to Mr. Hinrichsen under ESOP II, (b) 57 shares of Common Stock that Mr. Hinrichsen has the right to acquire through the vesting of RSUs granted pursuant to the Company’s incentive compensation plans, and (c) 106 shares of Common Stock credited to Mr. Hinrichsen’s stock account under the Management Incentive Plan.

(7)

Includes (a) 402 shares of Common Stock allocated to Mr. Kabbes under ESOP II, (b) 7,967 shares of Common Stock that Mr. Kabbes has the right to acquire through the exercise of stock options granted pursuant to the Company’s incentive compensation plans, and (c) 571 shares of Common Stock that Mr. Kabbes has the right to acquire through the vesting of RSUs granted pursuant to the Company’s incentive compensation plans.

(8)

Includes (a) 4,478 shares of Common Stock allocated to Mr. Moriarty under ESOP II, (b) 9,355 shares of Common Stock that Mr. Moriarty has the right to acquire through the exercise of stock options granted pursuant to the Company’s incentive compensation plans, (c) 571 shares of Common Stock that Mr. Moriarty has the right to acquire through the vesting of RSUs granted pursuant to the Company’s incentive compensation plans, and (d) 5,751 shares of Common Stock credited to Mr. Moriarty’s stock account under the Management Incentive Plan.

(9)

Includes (a) 512 shares of Common Stock allocated to Mr. Rojo under ESOP II, (b) 11,861 shares of Common Stock that Mr. Rojo has the right to acquire through the exercise of stock options granted pursuant to the Company’s incentive compensation plans, (c) 857 shares of Common Stock that Mr. Rojo has the right to acquire through the vesting of RSUs granted pursuant to the Company’s incentive compensation plans, and (d) 2,329 shares of Common Stock credited to Mr. Rojo’s account under the Management Incentive Plan.

(10)

Includes (a) 177,150 shares of Common Stock that Mr. Stepan has the right to acquire through the exercise of stock options granted pursuant to the Company’s incentive compensation plans, and (b) 63,405 shares of Common Stock credited to Mr. Stepan’s stock account under the Management Incentive Plan.

(11)	Includes 15,174 shares of Common Stock credited to Mr. Wehmer’s account pursuant to the Company’s incentive compensation plans.

(12)

As of March 3, 2025, directors and executive officers as a group had (a) 11,740 shares of Common Stock allocated to them under ESOP II, (b) the right to acquire 230,847 shares of Common Stock through the exercise of stock options, (c) the right to acquire 4,321 shares of Common Stock through the vesting of RSUs, and (d) 85,850 shares of Common Stock credited to their stock accounts under the Management Incentive Plan. In addition, the amount shown includes 91,607 shares of Common Stock that were held in the Company’s qualified plans and deemed to be beneficially owned by the Plan Committee, which is comprised of executive officers of the Company. The Plan Committee selects the investment manager of the Stepan Company Trust for Qualified Plans under the terms of a Trust Agreement effective December 1, 2011, with Bank of America, N.A. (“Bank of America”). Bank of America expressly disclaims any beneficial ownership in the securities of this plan.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and the rules thereunder require the Company’s executive officers, directors, and persons who own more than ten percent of the Common Stock, to file reports of beneficial ownership and changes in beneficial ownership of Common Stock with the SEC. Based solely upon a review of such reports filed with the SEC and written representations from certain reporting persons, the Company believes that all such required reports have been timely filed, other than reports by Mr. F. Quinn Stepan, Jr. reporting shares held by estates of which Mr. Stepan serves as an executor, which forms were inadvertently filed late due to administrative error.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Policies and Procedures for Approving Related Person Transactions

The Company has adopted a written policy entitled “Related Party Transaction Policy” (the “Related Party Transaction Policy”). The policy was initially approved by the Audit Committee of the Board of Directors in February 2007, has been annually reviewed by the Audit Committee and was last amended in April 2024. This policy applies to material transactions (“Related Party Transactions”) involving the Company and a Related Party, which is defined as a person or entity who is a Company executive officer, director, nominee for election as a director, beneficial owner of five percent or more of the Company’s Common Stock, or immediate family member of these persons, or any entity for which any of the foregoing persons is an executive officer, general partner, managing member, principal or greater than five percent beneficial owner. The Related Party Transaction Policy states that the Company will consummate a Related Party Transaction only when the Audit Committee approves the transaction after considering the factors set forth in the Related Party Transaction Policy. If advance Audit Committee approval of a Related Party Transaction is not feasible, then the Company may preliminarily enter into the transaction upon prior approval by the Chair of the Audit Committee, subject to ratification of the transaction by the Audit Committee at its next regularly scheduled meeting. No director may participate in the approval of a Related Party Transaction for which he or she is a Related Party.

The factors considered by the Audit Committee in its evaluation of a Related Party Transaction include the relevant facts and circumstances of the proposed Related Party Transaction, whether the Related Party Transaction is on terms comparable to those that could be obtained in arm’s-length dealings with an unrelated third party, the extent of the related party’s interest in the transaction and the conflicts of interest and corporate opportunity provisions of the Company’s Code of Conduct.

Transactions with Related Persons, Promoters and Certain Control Persons

Mr. Richard Stepan, brother of F. Quinn Stepan, Jr., Chairman of the Board, is a current officer of the Company. Mr. Richard Stepan is neither a director nor a nominee for director. As an employee of the Company, Mr. Richard Stepan receives a base salary, short-term and long-term incentive compensation as appropriate for his position and other regular and customary employee benefits generally available to all Company employees and is eligible for other limited perquisites available to employees at his level within the organization. For 2024, Mr. Richard Stepan was paid a salary of $359,926, short-term incentive compensation of $67,989 and a long-term incentive compensation award of RSUs, SARs and performance shares with a target value of $450,000. The Audit Committee approved the Company’s employment of Mr. Richard Stepan pursuant to the Related Party Transaction Policy and procedures described above.

CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS

Corporate Governance Guidelines and Code of Conduct

The Company is committed to having sound corporate governance principles and has adopted Corporate Governance Guidelines and a Code of Conduct to maintain those principles. The Company’s Code of Conduct applies to all of the Company’s directors, officers and employees, including the Company’s Chief Executive Officer and Chief Financial Officer. The Company’s Corporate Governance Guidelines and Code of Conduct are available at https://stepan.gcs-web.com/corporate-governance/highlights. Stockholders may also request free printed copies of the Company’s Corporate Governance Guidelines and Code of Conduct by contacting the Company’s Secretary at Stepan Company, Secretary’s Office, 1101 Skokie Boulevard, Northbrook, Illinois 60062.

Board Committees

The Board of Directors has four standing committees: the Audit Committee, the Compliance Committee, the Human Capital and Compensation Committee, and the Nominating and Corporate Governance Committee, each composed entirely of independent directors. The charter of each committee is available at https://stepan.gcs-web.com/corporate-governance/highlights.

Audit Committee

The primary functions of the Audit Committee are to (a) assist the Board of Directors in fulfilling its oversight responsibilities to stockholders, the investment community and creditors in relation to (i) the quality and integrity of the Company’s financial statements, (ii) the adequacy of the Company’s internal control over financial reporting, (iii) the Company’s compliance with legal and regulatory requirements (in coordination with the Compliance Committee), (iv) the registered public accounting firm’s qualifications and independence, and (v) the performance of the independent auditors and the Company’s internal audit function; and (b) prepare the Audit Committee report included in each proxy statement. The responsibilities of the Audit Committee include annual selection and engagement of the Company’s independent registered public accounting firm, review of the proposed fees and scope of work of the independent registered public accounting firm’s year-end audit, review with the Company’s independent registered public accounting firm of the results of the year-end audits of the Company’s financial statements and internal control over financial reporting, review of the Company’s financial statements with the Company’s independent registered public accounting firm prior to the Company’s filing of each quarterly report on Form 10-Q and annual report on Form 10-K, review of findings reported by the Company’s internal audit department and management’s responses, review of the internal audit program of the Company and review, approval or disapproval of Related Party Transactions pursuant to the Company’s Related Party Transaction Policy and review of the Company’s risk assessment and risk management policies and procedures, including those relating to the Company’s enterprise risks, financial risks and information security risks. The Audit Committee held five meetings in 2024.

The Audit Committee is comprised of Ms. Burgess (Chair), Mr. Dearth, Dr. Delgado, Ms. Lewis, Ms. Reed and Mr. Wehmer, all of whom are financially literate and are independent directors in accordance with the rules of the New York Stock Exchange and the SEC and as described below under “Director Independence.” The Board of Directors has determined that each of Ms. Burgess and Mr. Wehmer qualifies as an audit committee financial expert within the meaning of SEC regulations.

Compliance Committee

The primary functions of the Compliance Committee are to assist the Board in fulfilling its oversight responsibilities with respect to (a) the Company’s overall compliance with significant legal and

regulatory requirements, as well as (b) compliance with its business ethics policies and Code of Conduct. The Compliance Committee held five meetings in 2024.

The Compliance Committee is comprised of Ms. Burgess, Mr. Dearth (Chair), Dr. Delgado, Ms. Lewis, Ms. Reed and Mr. Wehmer, all of whom are independent directors in accordance with the rules of the New York Stock Exchange and as described below under “Director Independence.”

Human Capital and Compensation Committee

The primary functions of the Human Capital and Compensation Committee are to (a) establish and administer the Company’s policies, programs and procedures for compensating its executive management and (b) provide advice and counsel to the Company regarding executive development and succession planning. The responsibilities of the Human Capital and Compensation Committee include reviewing and setting or recommending the compensation of the Company’s executive officers, recommending and administering cash-based and equity-based incentive compensation plans, reviewing and recommending director compensation, reviewing and recommending the Company’s Compensation Discussion and Analysis included in each proxy statement, and preparing the Human Capital and Compensation Committee Report included in each proxy statement. The Human Capital and Compensation Committee also reviews and advises management regarding the Company’s human capital management. The Human Capital and Compensation Committee held nine meetings in 2024.

The Human Capital and Compensation Committee is comprised of Ms. Burgess, Mr. Dearth, Dr. Delgado, Ms. Lewis, Ms. Reed (Chair) and Mr. Wehmer, all of whom are independent directors in accordance with the rules of the New York Stock Exchange and the SEC and as described below under “Director Independence.”

Nominating and Corporate Governance Committee

The primary functions of the Nominating and Corporate Governance Committee are to (a) identify individuals qualified to become board members and recommend the director nominees for election at each annual meeting of stockholders, (b) develop and recommend the Company’s Corporate Governance Guidelines, (c) oversee the evaluation of the Board of Directors and (d) recommend the members for each Board committee. In addition, the responsibilities of the Nominating and Corporate Governance Committee include making recommendations to the Board on corporate governance matters and the Board’s structure. The Nominating and Corporate Governance Committee held five meetings in 2024.

The Nominating and Corporate Governance Committee is comprised of Ms. Burgess, Mr. Dearth, Dr. Delgado (Chair), Ms. Lewis, Ms. Reed and Mr. Wehmer, all of whom are independent directors in accordance with the rules of the New York Stock Exchange and as described below under “Director Independence.”

Board Performance Evaluations

Annually, each director completes an evaluation of the full Board of Directors and of each standing committee on which the director serves. The Company’s Vice President, General Counsel and Secretary compiles the results of the assessments and provides the results to the Nominating and Governance Committee and to the Board of Directors. The Board of Directors initially discusses the assessment results with the Chairman and the Chief Executive Officer in attendance, and if desired by any director, the assessment results are also discussed at Executive Sessions of the non-management directors and at Executive Sessions of the independent directors. This assessment evaluates the

Board of Directors’ composition and contribution as a whole to the Company and reviews areas in which the Board of Directors and/or management believes a stronger contribution could be made. The

Nominating and Corporate Governance Committee is also responsible for evaluating the performance of current members of the Board of Directors at the time they are considered for re-nomination to the Board of Directors.

Board Meetings and Attendance

During 2024, the Board of Directors held six meetings. During 2024, all of the directors attended more than 75% of the total number of meetings of the Board of Directors and the meetings of committees of the Board of Directors of which each director was a member. While all directors are encouraged to attend, the Company does not have a formal policy requiring attendance at the Company’s annual meeting of stockholders. All directors attended the 2024 Annual Meeting of Stockholders in person. The Company currently expects that all directors and nominees will attend the 2025 Annual Meeting.

Director Nomination Process

The Corporate Governance Guidelines contain the Board of Directors membership criteria that apply to nominees recommended by the Nominating and Corporate Governance Committee for a position on the Board of Directors. Under these criteria, members of the Board of Directors should possess qualities that include strength of character, an inquiring and independent mind, practical wisdom and mature judgment. In addition to these qualities, director nominees should also possess recognized achievement, an ability to contribute to some aspect of the Company’s business, and the willingness to make the commitment of time and effort required of a director. The Nominating and Corporate Governance Committee’s process for identifying and evaluating director nominees includes recommendations by stockholders, search firms, non-management directors and executive officers, a review and background check of specific candidates, an assessment of the candidate’s independence under the director independence standards described below, and interviews of director candidates by the Nominating and Corporate Governance Committee.

It is the policy of the Nominating and Corporate Governance Committee to consider candidates recommended by stockholders for membership on the Board of Directors. The Nominating and Corporate Governance Committee’s evaluation of a nominee recommended by a stockholder would consider the general criteria and required information previously described in this section, and any other factors the Nominating and Corporate Governance Committee deems relevant. Any stockholder recommendation proposed for consideration by the Nominating and Corporate Governance Committee must comply with the requirements set forth in the Company’s By-laws. Among other things, a stockholder must give written notice containing the information required by the Company’s By-laws to the Secretary of the Company at Stepan Company, Secretary’s Office, 1101 Skokie Boulevard, Northbrook, Illinois 60062. The deadline to submit a director recommendation for the 2026 Annual Meeting of Stockholders is set forth in the “2026 Stockholder Proposals and Director Nominations” section below.

Board Composition

The following charts summarize the current composition of the Board of Directors:

In accordance with the Company’s Corporate Governance Guidelines, when identifying director nominees, the Nominating and Corporate Governance Committee and the Board of Directors consider a broad definition of diversity. This definition includes, but is not limited to, diversity of professional, technical, operational, international and financial experience, skills and characteristics. The Board has also considered experience related to the Company’s business and industry.

Director Independence

For purposes of determining director independence, the Company uses the New York Stock Exchange director independence standards. No director qualifies as “independent” unless the Board of Directors affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). In addition, a director is not independent if:

•

The director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer of the Company;

•

The director has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service);

•

(A) The director is a current partner or employee of a firm that is the Company’s internal auditor or independent registered public accounting firm; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time;

•

The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company’s present executive officers at the same time serves or served on that company’s compensation committee; or

•

The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues.

Under the New York Stock Exchange rules and the Company’s Corporate Governance Guidelines, at least a majority of the Company’s directors and each member of the Audit Committee, Compliance Committee, Human Capital and Compensation Committee and Nominating and Corporate Governance Committee must meet the independence standards set forth above. The Board of Directors has determined, following the recommendation of the Nominating and Corporate Governance Committee, that each of Ms. Burgess, Mr. Dearth, Dr. Delgado, Ms. Lewis, Ms. Reed and Mr. Wehmer is independent under the standards set forth above. In addition, the Board of Directors has determined that each of the members of the standing committees satisfies the Company’s independence standards, including the additional independence standards and financial literacy requirements required for audit committee members and compensation committee members, as applicable, established by SEC and New York Stock Exchange rules. Mr. Stepan is not deemed independent under the rules of the New York Stock Exchange because he served as an employee of the Company until April 25, 2022, and his brother, Richard Stepan, serves as an executive officer of the Company. Mr. Rojo is not deemed independent under the rules of the New York Stock Exchange because he currently serves as the President and Chief Executive Officer of the Company.

In making independence determinations, the Nominating and Corporate Governance Committee, with assistance from the Company’s legal counsel, evaluated responses to a questionnaire completed annually by each director regarding relationships and possible conflicts of interest between each director, the Company and management. In its review of director independence, the Nominating and Corporate Governance Committee considered the commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships any director may have with the Company or management. In addition, the Nominating and Corporate Governance Committee considered any relationships between the Company and entities for which any director serves as management or a member of the board of directors.

Board Leadership Structure

The Board of Directors regularly reviews its leadership structure in light of the Company’s then-current needs, trends, internal assessments of Board effectiveness, and other factors. The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board because the Board believes it is in the best interests of the Company to make that determination based on the position and direction of the Company and the membership of the Board.

Currently, the Board believes the interests of the Company and its stockholders are best served through a leadership model with the roles of Chairman and Chief Executive Officer separated. Mr. Stepan, who served as the Company’s Chief Executive Officer until April 25, 2022, continues to serve as Chairman of the Board. Mr. Rojo is Chief Executive Officer and is a member of the Board.

The Board believes that Mr. Stepan’s experience puts him in the best position to provide broad leadership for the Board in the role of Chairman as the Board works to deliver value to stockholders. Mr. Stepan possesses extensive knowledge and understanding of the Company and its operations, strategic planning matters, and the industry in general, developed during his over 30-year career with the Company.

To aid the Board’s independent oversight of the Company and management, the Board has elected Mr. Wehmer as Lead Independent Director. Mr. Wehmer has informed the Board of his intent to retire from the Board upon the expiration of his current term as a director. As such, his term as Lead Independent Director will expire on the date of the Annual Meeting. The Board has elected Mr. Death to succeed Mr. Wehmer as Lead Independent Director. The Board believes that the election of the Lead Independent Director enhances the Board’s commitment to maintaining strong corporate governance and provides effective independent Board leadership. Among other responsibilities, the

Lead Independent Director presides at all Executive Sessions of the independent directors, advises the Chairman on Board meeting schedules, agendas and materials, and serves as principal liaison between the independent directors and the Chairman. The Lead Independent Director, in consultation with the Chairman and the chair of the Human Capital and Compensation Committee, also leads the process for the evaluation of the Chief Executive Officer.

In addition, the independent directors regularly meet in Executive Sessions without the Chairman, the Chief Executive Officer and other members of management present in accordance with the Company’s Corporate Governance Guidelines.

Risk Management

The Board of Directors takes an active role in overseeing the Company’s financial and non-financial risks. The Audit Committee, which is chaired by Ms. Burgess, leads the Board’s oversight of Company risks. The Audit Committee reviews the Company’s risk assessment and risk management policies and procedures, including those relating to the Company’s enterprise risks, financial risks and information security risks. The Audit Committee receives reports from the Company’s Director of Internal Audit, Chief Compliance and Risk Officer, Chief Financial Officer, and General Counsel, all of whom are responsible for various aspects of the Company’s risk management. The Director of Internal Audit reports directly to the Audit Committee. The Audit Committee also meets with the Company’s external auditors separately from management.

The Compliance Committee, which is chaired by Mr. Dearth, oversees risk assessment and risk mitigation related to matters within the Compliance Committee’s oversight responsibilities, which may include environmental protection, employee health, safety and security, data privacy, employment, anti-bribery and anti-corruption, product quality compliance, and ethics and compliance training.

The Human Capital and Compensation Committee, which is chaired by Ms. Reed, takes the lead role in overseeing the management of risks as they relate to the Company’s compensation policies and practices. During 2024, the Human Capital and Compensation Committee reviewed these compensation policies and practices and did not identify any risks that are reasonably likely to have a material adverse effect on the Company.

Executive Sessions

The Company’s Corporate Governance Guidelines require Executive Sessions of independent directors to be held at least once per year. Any independent director can request that additional Executive Sessions be scheduled. In 2024, six Executive Sessions without management were held by the independent directors and chaired by Mr. Wehmer in his capacity as Lead Independent Director. In addition, Executive Sessions without management were also held after many Board committee meetings during 2024 and were chaired by the respective chairs of the Board committees.

Compensation Committee Interlocks and Insider Participation

The members of the Company’s Human Capital and Compensation Committee in 2024 were Ms. Burgess, Mr. Dearth, Dr. Delgado, Ms. Lewis, Ms. Reed (Chair) and Mr. Wehmer. None of the members of the Human Capital and Compensation Committee during 2024 were at any time an officer or employee of the Company nor did any member participate in a Related Party Transaction. In 2024, none of the Company’s executive officers served as a member of the compensation committee of another entity, or as a director of another entity, one of whose executive officers served on the Human Capital and Compensation Committee or as one of the Company’s directors.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Summary of Executive Compensation in 2024

In 2024, the Company and the Human Capital and Compensation Committee of the Board of Directors (the “Committee”) applied the compensation policies and principles described in this Compensation Discussion and Analysis in determining the compensation for the individuals named in the Summary Compensation Table. Those individuals are referred to herein as the named executive officers (“NEOs”). The NEOs for 2024 were:


NEO		Title
Luis E. Rojo (1)		President and Chief Executive Officer
Samuel S. Hinrichsen (2)		Vice President and Interim Chief Financial Officer
Robert J. Haire, Jr.		Executive Vice President, Supply Chain
David G. Kabbes		Vice President, General Counsel and Secretary
Sean T. Moriarty		Vice President and General Manager – Surfactants
Scott R. Behrens (3)		Former President and Chief Executive Officer

(1)	Mr. Rojo served as the Company’s Vice President and Chief Financial Officer until his promotion to President and Chief Executive Officer on October 29, 2024.

(2)	Mr. Hinrichsen was promoted to Vice President and Interim Chief Financial Officer on October 29, 2024.

(3)	Mr. Behrens served as the Company’s President and Chief Executive Officer until October 29, 2024.

Significant Developments in 2024

Company Performance

(1)

In 2024, the Company reported net income of $50.4 million, or $2.20 per diluted share, compared to $40.2 million, or $1.75 per diluted share, in 2023, a 25% increase. The Company’s adjusted net income was $50.5 million, or $2.20 per diluted share, versus $50.7 million, or $2.21 per diluted share, in 2023.¹

(2)

The Surfactant segment delivered operating income of $85.6 million, an 18% increase versus prior year. The Polymer segment delivered $40.6 million of operating income, a 33% decrease versus the prior year. Specialty Product operating income was $20.9 million, an 82% increase versus prior year.

(3)

For the full year, the Company paid $34.0 million of dividends. With the increased cash dividend in the fourth quarter of 2024, the Company has increased the dividend on its Common Stock for the 57th consecutive year.

Key Developments Impacting Executive Compensation

(1)

The Company’s advisory Say-on-Pay vote was supported by 96% of votes cast at the Company’s 2024 Annual Meeting.

¹ Adjusted net income is a financial measure that has not been calculated pursuant to U.S. generally accepted accounting principles (“GAAP”). See Appendix A for further discussion and a reconciliation of this non-GAAP financial measure to net income, the most directly comparable GAAP financial measure.

(2)

In light of the Company’s 2024 financial performance, the Company Financial Performance Objectives were not achieved. As discussed in more detail below, after discussions with the Committee, Mr. Rojo opted out of the potential opportunity to receive any discretionary annual incentive award in order to increase the available pool for such discretionary awards for other executive officers. In addition, due to the Company’s 2024 financial performance, the performance shares that were granted to the NEOs in February 2024 under the Company’s long-term incentive plan were forfeited.

(3)

After considering all components of the total compensation paid to the NEOs in 2024, the Committee determined that the 2024 NEO compensation was competitive, reasonable, and aligned with both Company performance and stockholder interests.

Executive Compensation Best Practices the Company Follows


What We Do		What We Don’t Do

✓	Pay for Performance—a Majority of our NEOs’ Annual Total Compensation is Variable and At-Risk	O	No Grants of Discounted Stock Options or Stock Appreciation Rights

✓	Align Executives’ Total Compensation Mix with Stockholders’ Interests	O	No Repricing or Replacing Outstanding Stock Options or Stock Appreciation Rights Without Stockholder Approval

✓	Require Significant Executive Stock Ownership	O	No Employment Agreements That Guarantee Employment or Compensation

✓	Limit Performance-Based Incentive Awards to a Maximum of 200% of Target	O	No Standing Individual Severance or Change-in-Control Agreements

✓	Provide Limited Executive Perquisites	O	No Use of Excise Tax Gross-Ups

✓	Subject Incentive Compensation to a Clawback Policy	O	No Dividend Payments on Unearned Performance Shares

Compensation Philosophy

The basic premise of the Company’s executive compensation philosophy is to pay for performance. The Company’s intention is to foster a performance-driven culture with competitive total compensation as a key driver for all employees. Compensation levels commensurate with Company performance are designed to align the interests of our employees with the interests of our stockholders. To better align our NEOs’ compensation with the interests of our stockholders, a substantial portion of compensation is at-risk and performance-based.

The Company’s guiding philosophy in setting executive compensation is that the compensation of executive officers should reflect the scope of their job responsibilities and the level of individual and corporate performance achieved. Executive compensation should be competitive internally and externally with like or comparable positions based on job descriptions and responsibilities at similarly sized companies within the Company’s industry, Peer Group (as defined below) and other appropriate related industry data or survey information. The Company’s compensation philosophy is reviewed at least annually by the Committee.

The effectiveness of the executive compensation program is primarily measured by Company performance, stock price appreciation, the ability of the Company to attract and retain executive officers, and comparison against other relevant, external benchmarks as needed.

The Committee generally does not consider the impact of previously awarded compensation in determining current executive total compensation. The Committee does, however, use both a chemical industry peer group as well as aggregate executive compensation survey data to annually assess executive compensation as described below under “Compensation Peer Group and Survey Data.” Except for the limits regarding incentive compensation as described below, the Committee does not use specific policies to allocate between cash and non-cash compensation or between short-term and long-term compensation.

Compensation Objectives

The overall objectives of the Company’s compensation program (in which each NEO participates) are as follows:

•

motivate employees to achieve and maintain a high level of performance, and drive results that will help the Company achieve its goals;

•

align the interests of our employees with the interests of our stockholders;

•

provide for market-competitive levels of compensation; and

•

attract and retain employees of outstanding ability.

Role of the Human Capital and Compensation Committee

The Committee is responsible for overseeing the establishment and administration of the Company’s policies, programs and procedures for compensating the Company’s executive management, as further described below. The Committee is also responsible for providing advice to the Company regarding executive development and succession planning. The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee or, to the extent permitted by applicable law, to any other body or individual.

Role of the Compensation Consultant

The Committee engaged Exequity LLP (“Exequity”) as its independent compensation consultant for 2024. Exequity advises the Committee on a range of executive compensation matters. The scope of Exequity’s services to the Committee includes, but is not limited to, the following:

•

Providing the Committee with an assessment of the market competitiveness of the Company’s executive compensation.

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Apprising the Committee of executive compensation-related trends and developments in the marketplace.

•

Informing the Committee of regulatory developments relating to executive compensation practices.

•

Assisting the Committee with goal setting, calibrating levels of pay to various levels of performance, and pay for performance alignment.

•

Comparing Company executive compensation plan designs and practices to the marketplace.

•

Recommending changes to the executive compensation program to maintain competitiveness and ensure consistency with business strategies, good governance practices and alignment with stockholder interests.

Exequity reports directly to the Committee. The Committee conducted its annual assessment of Exequity’s independence pursuant to SEC rules and determined that no conflict of interest exists that would prevent Exequity from independently advising the Committee. Exequity does not provide any other services to management or the Company.

Role of the Committee and Executives in Establishing Executive Compensation

The Committee determines the compensation of the Chief Executive Officer. The Chief Executive Officer and Vice President and Chief Human Resources Officer make recommendations to the Committee regarding compensation for all other executive officers, including the NEOs, other than with respect to their own compensation. The Committee then reviews these recommendations and approves the final compensation for all executive officers. All recommendations made to the Committee and all determinations made by the Committee are based upon the Company’s policies and guidelines and other relevant factors outlined in the “Compensation Peer Group and Survey Data” and “Elements of Compensation” sections below.

Advisory Vote to Approve Executive Compensation

The advisory vote in 2024 was the fourteenth consecutive year that the Company’s Say-on-Pay vote was supported by its stockholders with the approval of more than 96% of the votes cast at the annual meeting of stockholders. As stated above, the Company’s advisory Say-on-Pay vote was supported by 96% of votes cast at the Company’s 2024 Annual Meeting. The Committee acknowledges and values the feedback from the Company’s stockholders on the annual Say-on-Pay vote and believes that these results demonstrate stockholder support of the Company’s executive compensation programs. As a result of the strong stockholder support for the 2024 Say-on-Pay vote, the Committee determined that the Company’s compensation practices and processes did not require any significant modifications to achieve the desired results of the Company’s compensation program or to address stockholder concerns and therefore did not make any changes as a direct result of such vote results. The Committee will continue to consider the outcome of these advisory votes when determining future executive compensation arrangements.

Executive Pay Mix

The Company targets a total compensation mix where fixed pay, consisting of base salary, is less than half of the total compensation that any NEO or executive officer may earn in any given year. The combined mix of both short-term and long-term incentives for executive officer compensation is structured to encourage the necessary focus and motivation to achieve outstanding results on an ongoing basis, both in the short term and long term. In addition, the combined focus on both short-term and long-term objectives is designed to align executive officers’ and stockholders’ interests. Short-term incentives for executive officers are based on individual and Company performance. Long-term incentives for executive officers are based on Company performance (performance shares) or are time-vested (RSUs and SARs). The Company’s total compensation targets assume above-average Company performance, and potential compensation can vary considerably depending on overall Company performance. The graphics below illustrate the pay mix for our Chief Executive Officer and other NEOs (other than Mr. Hinrichsen, who was promoted on October 29, 2024) on an average basis using target level of performance for all incentive awards. Because Mr. Behrens served as President and Chief Executive Officer and Mr. Rojo served as Vice President and Chief Financial Officer until October 29, 2024, the President and Chief Executive Officer graphic represents Mr. Behrens’ compensation and the All Other NEOs graphic includes Mr. Rojo’s compensation in his role as Vice President and Chief Financial Officer. Accordingly, Mr. Rojo’s compensation as President and Chief Executive Officer, including the equity awards granted in connection with his appointment, are not reflected in the graphics below.

LOGO

Compensation Peer Group and Survey Data

To better understand the compensation practices of similar companies, the Committee reviews data gathered from a custom peer group (“Peer Group”) and general market survey data from Mercer LLC (“Mercer”). Information gathered from the Peer Group serves as the primary reference point for the Committee, with Mercer survey data used as a secondary reference.

The Peer Group consists of companies selected on the basis of chemical industry affiliation and size as compared to the Company (e.g., total revenues and market capitalization). The following companies comprised the Peer Group that the Committee referenced when setting 2024 compensation:


AdvanSix Inc.	The Chemours Company	NewMarket Corporation
Ashland Inc.	H.B. Fuller Company	Quaker Chemical Corporation
Avient Corporation	Innospec Inc.	RPM International Inc.
Cabot Corporation	Koppers Holdings, Inc.	Sensient Technologies Corporation

The Committee undertakes annual evaluations of the Peer Group in order to ensure the Company is comparing itself with companies that have the characteristics to appropriately match the Company. Exequity performed a review of the Peer Group listed above in July 2024 and the Committee did not make changes to the Peer Group as a result of such review. The Committee and its independent compensation consultant will continue to monitor the Peer Group going forward as appropriate.

When assessing the competitiveness of Company compensation programs, the Committee, in part, uses median compensation levels in the Peer Group as a reference point to provide a framework for and on which to base individual compensation decisions. The Committee generally references median total compensation for executive officers, but the Committee retains discretion to determine appropriate compensation levels. The Committee believes that all NEOs’ and executive officers’ total compensation amounts are within appropriate and reasonable levels as compared to the Peer Group data considering performance, experience level, time in position and both external and internal equity evaluations.

Elements of Compensation

For the fiscal year ended December 31, 2024, the principal elements of compensation for the executive officers, including the NEOs, were as follows:



Compensation Element

Purpose		Description

Base Salary

To attract and retain employees of outstanding abilities		Fixed component of pay based on specific position salary ranges determined by job responsibilities and performance, time in position at the Company and reference to Peer Group data

Short-Term Incentive Compensation

To drive improvement in year-over-year financial performance; to motivate, attract and retain employees; and to align executives’ interests directly with Company financial objectives		Variable, annual, at-risk cash component of pay that rewards achievement of pre-determined Company and individual goals

Long-Term Incentive Compensation

To promote retention of executives, to reward outstanding Company performance, to encourage a focus on the Company’s long-term financial results, and to align executive interests with stockholder interests		Variable, at-risk, equity component of pay for eligible participants that rewards stockholder value creation over the long term

Retirement Benefits, Perquisites and Other Benefits

To promote retention, to attract outstanding employees and to provide employees with a tax deferred retirement savings vehicle directly connected to the Company’s financial results		Company dollar-for-dollar matching contribution up to six percent of base salary under a Savings and Investment Retirement Plan for all U.S. employees, plus supplemental contributions based on the Company’s financial results



Compensation Element

Purpose		Description
		Executives and key employees, including the NEOs, are eligible for a limited amount of perquisites Benefit programs that are available to all U.S. salaried employees

Base Salary

The Company has established salary grades and ranges for all global employees, including the NEOs. Salary grades reflect the responsibility level of the position (i.e., positions with a greater level of responsibility have a higher salary grade). The salary range for each grade is primarily based on survey data. The salary grade structure enables the Company to ensure that pay is both market competitive and internally equitable.

The Committee, taking into consideration the performance of the Company, the Company’s compensation philosophy, the Peer Group data, and the executive’s performance, reviews and determines the Chief Executive Officer’s salary on an annual basis. The Chief Executive Officer and the Vice President and Chief Human Resources Officer make recommendations to the Committee regarding compensation for all other NEOs. The Committee has the discretion to approve such recommendations or revise the recommended amounts, higher or lower, based upon each executive officer’s individual performance. The Chief Executive Officer’s salary range is determined based on the same factors and criteria as those for the other NEOs and executive officers.

The NEOs’ base salaries, as of December 31, 2024, are shown below. On March 1, 2024, the NEOs’ base salaries were increased slightly in light of individual performance assessments. In addition, each of Mr. Rojo and Mr. Hinrichsen received base salary increases effective as of October 29, 2024, in connection with their promotions.


NEO	2023 Base Salary		2024 Base Salary
Luis E. Rojo (1)	$	546,000	$	940,000
Samuel S. Hinrichsen (2)		N/A	$	300,000
Robert J. Haire, Jr.	$	460,000	$	472,420
David G. Kabbes	$	464,000	$	476,528

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SEC Form DEF 14A filed by Stepan Company