Tronox Limited
Tronox Ltd (Form: DEF 14A, Received: 03/16/2017 16:13:24)

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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.  )

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☒   Definitive Proxy Statement

o    Definitive Additional Materials

o    Soliciting Material under §240.14a-12

TRONOX LIMITED
(ACN 153 348 111)
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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TRONOX LIMITED
(ACN 153 348 111)
Lot 22 Mason Road
Kwinana Beach, WA, Australia 6167

NOTICE OF
ANNUAL GENERAL MEETING OF SHAREHOLDERS OF TRONOX LIMITED

Date and Time
Friday, April 21, 2017, at 9:00 a.m., U.S. Eastern Daylight Time
   
 
 
Place
Stamford Marriott Hotel
243 Tresser Boulevard
Stamford, Connecticut 06901, U.S.A
   
 
 
Record Date
April 19, 2017, at 5:00 p.m., U.S. Eastern Daylight Time
   
 
 
Items of Business
(1)
Election of Class A Directors and Class B Directors
 
(2)
Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm
 
(3)
Advisory vote on executive compensation
 
(4)
Receipt and consideration of Annual Financial Report for year ended December 31, 2016 and reports of the Directors and auditors thereon
 
(5)
Such other business that may properly come before the Annual Meeting
   
 
 
Proxies
Each shareholder may appoint a proxy or attorney to attend the Annual Meeting and vote on the shareholder’s behalf. A shareholder entitled to cast two or more votes at the Annual Meeting is entitled to appoint two proxies. The shareholder may specify the proportion or number of votes that the proxy may exercise. A proxy need not be a shareholder of the Company.
 
 
 
 
An appointment of a proxy or an attorney is not effective unless (i) in the case of a proxy, the proxy appointment form and, if it is signed or otherwise authenticated by the shareholder’s attorney, the authority under which the appointment is signed (or a certified copy of the authority); or (ii) in the case of an attorney, the power of attorney (or certified copy of it) is received by the Company no later than 11:59 p.m., U.S. Eastern Daylight Time, on April 20, 2017, either by online submission to the Company’s proxy tabulator, mail to 263 Tresser Boulevard, Suite 1100, Stamford, Connecticut 06901, USA, or P.O. Box 305, Kwinana, Western Australia, Australia, 6966 or faxed to +1 (203) 705-3703 (USA) or +61 (0) 8 9 365-1390 (Australia).

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A body corporate which is a shareholder, or which has been appointed as a proxy, may appoint an individual to act as its representative at the Annual Meeting. The representative should bring to the Annual Meeting evidence of his or her appointment, including any authority under which it is signed, unless it has previously been given to the Company.


Richard L. Muglia
Senior Vice President,
General Counsel and Secretary
March 16, 2017

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FRIDAY APRIL 21, 2017

This Notice of Annual Meeting and Proxy Statement and the 2016 Annual Report is available at
https://materials.proxyvote.com/Q9235V .
Except as stated otherwise, information on our website is not part of this Proxy Statement.

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PROXY SUMMARY

This summary provides an overview of the information contained elsewhere in this Proxy Statement. In this Proxy Statement, references to “Tronox,” the “Company,” “we,” “us,” or “our” and similar expressions refer to Tronox Limited and “Annual Meeting” refers to the annual general meeting of the shareholders of Tronox Limited, unless the context of a particular reference provides otherwise. In the Proxy Statement references to “shares” refer to ordinary shares of Tronox Limited, including Class A ordinary shares (“Class A Shares”) and Class B ordinary shares (“Class B Shares”). As this is only a summary, we encourage you to read carefully this Proxy Statement in its entirety prior to voting. For additional information regarding our 2016 operating and financial performance, please also review our Annual Report on Form 10-K.

Voting Matters

Management Proposals
Board Vote
Recommendation
Page Reference
Proposal 1
Election of Class A and Class B Directors
For Each Nominee
Proposal 2
Ratification of Appointment of Independent Registered Public Accounting Firm
For
Proposal 3
Non-binding Advisory Vote to Approve the Compensation of Our Named Executive Officers (Say on Pay)
For

The approval of Proposals 1, 2 and 3 requires the affirmative vote of a majority of the shares present or represented at the Annual Meeting and actually cast on each such specific Proposal. Abstentions and, if applicable, broker non-votes will have no effect on the approval of Proposals 1, 2 and 3.

Holders of Class A Shares are being asked to elect six directors (the “Class A Directors”), and holders of Class B Shares are being asked to elect three directors (the “Class B Directors”, and collectively with the Class A Directors, the “Directors”). Each of our current Class A Directors and Class B Directors is standing for reelection to hold office until the next annual meeting of shareholders or until his successor is duly elected and qualified.

Nominees for Director

The following table provides summary information about each Director nominee. Each Director stands for election annually. Detailed information about each Director’s background, skill set and areas of experience can be found on page 10 .

New Director . Effective June 10, 2016, Exxaro Resources Limited (“Exxaro”), the holder of the Company’s Class B Shares appointed Mr. Mxolisi Mgojo, the Chief Executive Officer of Exxaro, as a new Class B Director of the Company. Mr. Mgojo replaced Mr. Wim de Klerk who resigned from the Board of Directors of the Company (the “Board of Directors” or the “Board”) due to the fact that he stepped down from his position as Finance Director of Exxaro. Mr. Mgojo is not considered independent and is thus not a formal member of any of the Board’s committees. For the same reason, Mr. de Klerk did not sit on any committees of the Board of Directors of the Company. Mr. Mgojo’s appointment was in accordance with the Company’s constituent organizational documents.

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CLASS A DIRECTORS
AGE(1)
DIRECTOR
SINCE
CURRENT OCCUPATION
INDEPENDENT
A
HRC
CG
Thomas Casey
65
2011
Chairman and CEO, Tronox Limited
 
 
 
 
Ilan Kaufthal
69
2011
Lead Independent Director, Tronox Limited
Chairman, East Wind Advisors
X
 
C
 
Andrew P. Hines
77
2011
Principal, Hines & Associates
X
C
 
 
Wayne A. Hinman
70
2011
Former Vice President and General Manager, Worldwide Merchant Gases, Air Products & Chemicals, Inc.
X
 
M
C
Peter Johnston
66
2012
Former Global Head of Nickel Assets, Glencore
X
 
 
M
Jeffry N. Quinn
58
2011
Chairman, Chief Executive Officer, The Quinn Group, LLC and Quinpario Partners, LLC
X
M
 
 
CLASS B DIRECTORS
 
 
 
 
 
 
 
Daniel Blue
64
2012
Attorney
X
M
M
 
Sipho Nkosi
62
2012
Former CEO, Exxaro Resources
X
 
 
M
Mxolisi Mgojo
52
2016
CEO, Exxaro Resources
 
 
 
 
(1) As of March 1, 2017
A
Audit Committee
C
Chair
HRC
Human Resources and Compensation Committee
M
Member
CG
Corporate Governance and Nominating Committee
 
 

Shareholder Outreach Update

After having reviewed the voting results at our General Annual Meeting of Shareholders held on May 25, 2016, and the analysis of the proxy advisory services released prior to such meeting, our management met, in person or telephonically, with 19 of our top 25 largest investors who collectively represented approximately 56% of our Class A Shares. In those discussions, we reviewed our Class A shareholder opinions on our governance, compensation and equity plans as well as the comments made by proxy advisory firms that had published their opinions on these matters. On June 1, 2016, we publicly announced that the Board had made a number of changes in its governance and compensation policies that were within its power to change unilaterally.

Specifically, the Board changed the composition of several its committees, amended certain terms contained in the Company’s Management Equity Incentive Plan (“Equity Incentive Plan”), including removing the provision that permitted the Company to reprice options without shareholder approval, and adopted share ownership guidelines for Directors. Additionally, we appointed a Lead Independent Director as a clearly defined role with meaningful responsibilities. The Lead Independent Director, like all of our Directors, will resign each year and be subject to annual election. We proposed, and at a special meeting of shareholders held on November 3, 2016 received the required affirmative vote to require, that Class A Directors will only be re-elected in uncontested elections if they receive a majority of the Class A shareholder votes that are cast. Additionally, 7 of our Directors are considered independent under the New York Stock Exchange (“NYSE”) listing standards and all of our committees are fully independent.

In addition, and again as a result of considering the feedback received from our Class A shareholders and proxy advisory firms, the Board of Directors and the Company’s Human Resources and Compensation Committee (the “HRCC”) made several significant changes to our executive compensation program for the 2017 fiscal year. The following changes to our compensation program became effective beginning in the 2017 fiscal year:

100% of the performance-based restricted share units (“RSUs”) granted under the Company’s long-term incentive plan (“LTIP”) will be tied to our ranking of total shareholder return (“TSR”) versus the companies in the 2017 Peer Group (as defined elsewhere in this Proxy Statement) over a

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three-year measurement period. We believe this metric will better focus our named executive officers (“NEOs”) on the achievement of long-term growth in the business and building shareholder value. This metric will replace the cumulative cash generation metric used in 2016 for our performance-based RSU awards.

After review and advice from a newly appointed compensation consultant, we revised the compensation peer group to better reflect companies with similar quantitative and qualitative characteristics as discussed more fully elsewhere in this Proxy Statement.

Corporate Governance Highlights

At Tronox, corporate governance provides a strong foundation upon which our business operates. Our governance policies and structures are designed to promote thoughtful consideration of our business actions and appropriate risk-taking, with the goal of producing successful business results for you - our shareholders. Highlights include:

Seven of nine Directors are independent
Lead Independent Director with clearly defined responsibilities
Board includes a balance of experience, tenure and qualifications in areas important to our business
Class A Directors are elected annually under a majority voting standard in uncontested elections
Policy limiting the number of boards on which the Directors may serve
Active Shareholder Outreach Program
Minimum Share Ownership Requirements for Directors and Officers
Claw-back Policy
Hedging of Company Securities Policy
Codes of Conduct for Directors, Officers, and Employees
Shareholder Ratification of the Selection of External Audit Firm
Comprehensive Sustainability Report

2016 Business Performance & Accomplishments

Our 2016 accomplishments included:


1. Please refer to “Management’s Discussion & Analysis of Financial Condition and Results of Operations – Non-U.S. GAAP Financial Measures” on page 60 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2017, for a reconciliation of adjusted EBITDA to the most directly comparable U.S. GAAP financial measures.

2. Please refer to our Fourth Quarter 2016 Earnings Release filed as Exhibit 99.1 to our Form 8-K filed with the SEC on February 21, 2017, for a reconciliation of free cash flow to the most directly comparable U.S. GAAP financial measure.

Furthermore, on February 21, 2017, we announced a definitive agreement to acquire the TiO2 business of Cristal, a privately held global chemical and mining company, for $1.673 billion of cash, subject to a working capital adjustment at closing, plus 37,580,000 Class A ordinary shares (the “Cristal Transaction”).

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Executive Compensation Program Highlights

We believe our executive compensation program is aligned with our business strategy and with creating long-term shareholder value. We have strived to design our compensation program to pay for performance and to align management’s interests with our shareholders’ interests. Highlights include:

Emphasis on performance-based compensation: 82% of the CEO’s target compensation and 69% of other NEOs target compensation is “at-risk” and substantial amounts have in fact been forfeited over the last cycle
Use of metrics in the annual incentive compensation plans for the CEO and other NEOs which are expected to drive long-term shareholder value
Minimum share ownership requirements for the CEO and other NEOs, which reinforce our focus on shareholder alignment
No excise tax gross-up provisions in any change-in-control provisions
No re-pricing of stock options without shareholder approval
No cash buyout of underwater options
Annual review of executive compensation design, market competitiveness, and best practices
Retention of an independent compensation consultant to provide guidance and support to the HRCC

Pay is Aligned to 2016 Company Performance

A significant portion of our NEO pay is variable and at risk and is subject to company and individual performance measured against financial and operating objectives, and to relative TSR.

Short-term Incentive. As stated above, the Company had a strong performance in 2016 which resulted in above-target achievement in all four of the overall Tronox AIP metrics: (i) adjusted EBIDTA, (ii) cumulative cash generation, (iii) safety and (iv) people, culture and integration. These results produced a weighted payout on the overall Tronox component of the short-term incentive plan at 164.3% of target. However, the overall Tronox component represents only a portion of the overall short-term incentive plan. Every NEO has, additionally, an individual performance component, and depending on the specific NEO, may also have a short-term incentive component tied to the performance of the Tronox TiO2 or Tronox Alkali business, respectively.

Long-term Incentive. 50% of the long-term incentive program equity grants only vest if the Company achieves pre-determined performance metrics. Final payout for the three-year performance period ended December 31, 2015 for performance shares granted in February 2013 was at 12.5% of target.

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2016 Executive Total Target Compensation Mix

To promote a performance-based culture that aligns the interests of management and shareholders, our executive compensation program focuses extensively on performance-based cash and equity-based compensation. As illustrated in the charts below, the substantial majority of our NEOs’ target compensation in 2016 was in the form of “at-risk” compensation (short-term and long-term). Fixed pay consists of annual base salary, and “at-risk” pay consists of performance-based annual cash bonuses, and a combination of long-term time and performance-based equity awards.


AIP – Performance Based Annual Cash Incentive

LTIP – Time-Based RSUs

LTIP – Performance-Based RSUs

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TRONOX LIMITED

Lot 22 Mason Road
Kwinana Beach, Western Australia, 6167, Australia
PROXY STATEMENT
FOR
ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 21, 2017

GENERAL INFORMATION

This Proxy Statement is being furnished to you in connection with the solicitation of proxies by the Board of Directors of Tronox Limited for use at our 2017 Annual Meeting of Shareholders.

2017 Annual Meeting Date and Location

Tronox’s 2017 Annual Meeting will be held at the Stamford Marriott Hotel, 243 Tresser Boulevard, Stamford, Connecticut, 06901 U.S.A. on Friday, April 21, 2017 at 9:00 a.m., U.S. Eastern Daylight Time, or at such other time and place to which the Annual Meeting may be adjourned. For directions to the Annual Meeting, please contact us at +1 (203) 705-3800. References in this Proxy Statement to the Annual Meeting also refer to any adjournments or changes in location of the meeting, to the extent applicable.

Delivery of Proxy Materials

These materials were first sent or made available to shareholders on, or about, March 16, 2017. If you previously chose to receive proxy material by e-mail, we have arranged to have these materials delivered to you in accordance with that election. Shareholders may request to receive proxy materials electronically by e-mail during the voting period. Choosing to receive your future proxy materials by e-mail will save us the cost of printing and mailing documents to you, as well as solicitation costs, if any. If you choose to receive future proxy materials by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

If your ordinary shares are registered directly in your name with our transfer agent you are considered, with respect to those shares, the registered shareholder of record, and we are sending this Proxy Statement and the other proxy materials directly to you. As the shareholder of record, you have the right to grant your voting proxy directly to the named proxy holder or to vote in person at the meeting. We have enclosed a Proxy Card for you to use.

Most shareholders hold their shares through a broker or other nominee rather than directly in their own name. If your shares are held by a broker or by another nominee, you are considered the beneficial owner of these shares even though they are held in “street-name,” and these proxy materials should be forwarded to you by the broker, trustee or nominee together with a voting instruction card. As the beneficial owner, you have the right to direct your broker, trustee or nominee how to vote and you are invited to attend the Annual Meeting. Since a beneficial owner is not the shareholder of record, you may not vote these shares in person at the meeting unless you obtain a “legal proxy” from the broker, trustee or nominee that holds your shares, giving you the right to vote the shares at the meeting. Your broker, trustee or nominee has enclosed or provided voting instructions for you to use in directing the broker, trustee or nominee how to vote your shares.

Each registered shareholder will receive one copy of each such Notice per account even if at the same address, while most banks and brokers will deliver only one copy of such Notice to consenting “street-name” shareholders (you own shares beneficially in the name of a bank, broker or other holder of record on the books of our transfer agent) who share the same address. This procedure reduces our printing and distribution costs. Those who wish to receive separate copies may do so by contacting their bank, broker or other nominee. Similarly, “street-name” shareholders who receive multiple copies of the Notice at a single address

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may request that only a single copy be sent to them in the future by contacting their bank, broker or other nominee. If you hold your shares in “street-name” through a broker, bank or other nominee, you must provide the record holder of your shares with instructions on how to vote the shares.

Please follow the voting instructions provided by the bank or broker. Brokers, banks and other nominees who hold Tronox Limited ordinary shares on behalf of their beneficial owners may not give a proxy to Tronox Limited to vote those shares with respect to any proposals other than Proposal 2, the ratification of our existing independent registered public accounting firm, without specific voting instructions from such beneficial owners, as none of these other matters to be voted upon at the Annual Meeting are considered routine matters under the New York Stock Exchange (“NYSE”) Rule 452 and brokers, banks and other nominees do not have discretionary voting power for such non-routine matters. Any votes cast by street-name shareholders or brokers, banks or other nominees will be treated as though they were votes cast by the shareholder of record. You may not vote shares held in street-name by returning a proxy card directly to Tronox Limited or by voting in person at the Annual Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or other nominee. Any votes cast pursuant to a “legal proxy” will be treated as though they were cast by the shareholder of record.

Procedural Matters

Only holders of shares as of 5:00 p.m., U.S. Eastern Daylight Time, on April 19, 2017 will be entitled to attend and to vote at the Annual Meeting. As of February 28, 2017, there were 66,255,965 Class A ordinary shares outstanding and 51,154,280 Class B Shares outstanding. Holders of Class A Shares and Class B Shares can vote on all the proposals except that only holders of Class A Shares can vote on the election of Class A Directors and only holders of Class B Shares (currently, Exxaro Resources Limited) can vote on the election of Class B Directors. Each of our Class A Shares and our Class B Shares entitles its holder to one vote on all matters on which holders of such shares have the right to vote. Shareholders do not have cumulative voting rights.

Voting Procedures

Registered Shareholders: Registered shareholders may vote their shares or submit a proxy to have their shares voted by one of the following methods:

In Person. You may vote in person at the Annual Meeting by completing a ballot; however, attending the meeting without completing a ballot will not count as a vote.

By Telephone. You may submit a proxy by telephone (from U.S. and Canada only) using the toll-free number listed on the proxy card. Please have your proxy card in hand when you call. Telephone voting facilities will be available 24 hours a day and will close at 11:59 p.m., U.S. Eastern Daylight Time, on April 20, 2017.

By Mail. You may indicate your vote by completing, signing and dating your proxy card and returning it in the business reply envelope to Tronox Limited, 263 Tresser Boulevard, Suite 1100, Stamford, Connecticut 06901, USA or Tronox Limited, P.O. Box 305, Kwinana, Western Australia, Australia, 6966. All mailed votes must be received prior to 11:59 p.m., U.S. Eastern Daylight Time, on April 20, 2017.

By Fax. You may indicate your vote by completing, signing and dating your proxy card and returning it by fax to +1 (203) 705-3703 (USA) or +61 (0) 8 9 365-1390 (Australia). All faxed votes must be received prior to 11:59 p.m., U.S. Eastern Daylight Time, on April 20, 2017.

“Street-name” Shareholders: Shareholders whose shares are held in “street-name” by a broker or other nominee may generally vote their shares or submit a proxy to have their shares voted by one of the following methods:

By Methods Listed on Voting Instruction Form. Please refer to your voting instruction form or other information forwarded by your bank, broker or other holder of record to determine whether you may submit a proxy electronically on the Internet or by telephone, following the instructions on the voting instruction form or other information provided by the record holder.

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In Person with a Proxy from the Record Holder. A street-name shareholder who wishes to vote in person at the meeting will need to obtain a legal proxy from their bank, broker or other nominee. Please consult the voting instruction form or other information sent to you by your bank, broker or other nominee to determine how to obtain a legal proxy in order to vote in person at the Annual Meeting.

Tabulation of Votes

Votes cast by proxy or in person at the meeting will be tabulated by a proxy tabulator.

Quorum Requirements and Effect of Abstention and Broker Non-Votes

A shareholder present in person, or by proxy, attorney or representative at the Annual Meeting, who abstains from voting on any or all proposals will be included in the determination of shareholders present at the Annual Meeting for the purpose of determining the presence of a quorum, as will broker non-votes. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with respect to a particular proposal because the proposal is not a routine matter, and the broker has not received voting instructions from the beneficial owner of the shares. All items on this year’s ballot are “non-routine” matters under NYSE rules except ratification of our existing independent registered public accounting firm (Proposal 2). The Constitution of Tronox Limited (the “Constitution”) requires that a quorum of shareholders—the holders of a majority of outstanding shares—be present or represented by proxy to conduct business at the Annual Meeting. Holders of Class A Shares and Class B Shares are counted together to determine whether a quorum is present.

Although abstentions and broker non-votes count as “shares present” at the meeting for purposes of determining a quorum, they will not be counted as votes in favor of or against the election of the Director nominees or other proposals. Accordingly, a depository cannot cast a vote in favor of or against the election of Director nominees absent instruction from the underlying beneficial owner.

Revocation of Proxies

Holders of ordinary shares can revoke their proxy at any time before it is voted at the Annual Meeting by either:

Submitting another timely, later-dated proxy by mail;
Delivering timely written notice of revocation to our Secretary; or,
Attending the Annual Meeting and voting in person.

If your ordinary shares are held beneficially in street-name, you may revoke your proxy by following the instructions provided by your broker, trustee, nominee or depositary, as applicable.

Vote Confidentiality

Tronox has a confidential voting policy to protect our shareholders’ voting privacy. Under this policy, ballots, proxy forms and voting instructions returned to brokerage firms, banks and other holders are kept confidential. Only the proxy tabulator and Inspector of Elections have access to the ballots, proxy forms and voting instructions. The proxy tabulator will disclose information taken from the ballots, proxy forms and voting instructions only if there is a proxy contest, if the shareholder authorizes disclosure, to defend legal claims or as otherwise required by law.

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Annual Meeting Admission

Attendance at the Annual Meeting is limited to shareholders (or their proxies, attorneys or representatives) and a guest. Admission to the Annual Meeting is on a first-come, first-served basis. Registration begins at 8:00 a.m., U.S. Eastern Daylight Time, on April 21, 2017, and you will be asked to present a valid picture identification and proof of Tronox share ownership as of the record date. If you hold Tronox shares in a brokerage account, you must bring a copy of a brokerage account statement reflecting your share ownership as of the record date. If you plan to attend as the proxy or attorney of a shareholder, the shareholder must provide valid proof of your appointment no later than 11:59 p.m., U.S. Eastern Daylight Time, on April 20, 2017 to our Company’s address set forth on page 1 of the Notice of Annual General Meeting of Shareholders. If you plan to attend as a representative of a body corporate you must bring evidence of appointment to the Annual Meeting. Submitting your proxy now will not prevent you from voting your shares at the Annual Meeting if you desire to do so, as your proxy is revocable at your option. The use of cameras at the Annual Meeting is prohibited and they will not be allowed into the Annual Meeting or any other related areas. We realize that many cellular phones have built-in digital cameras, and while these phones may be brought into the meeting room, they may not be used at any time.

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PROPOSAL 1—ELECTION OF CLASS A DIRECTORS AND CLASS B DIRECTORS

Tronox’s business and affairs are managed under the direction of the Board of Directors, which is currently comprised of nine members. The size of the Board shall not be less than three, and for so long as the Class B Voting Interest is at least ten percent, the number of Directors must be nine, three of whom are Class B Directors elected by the holder of our Class B Shares. Under our Constitution, all elected Directors will resign each year and are eligible for reelection at the next Annual Meeting.

Only holders of our Class A Shares are entitled to vote on Proposal 1(a). Only holders of our Class B Shares are entitled to vote on Proposal 1(b). Our Constitution requires that Class A Directors be, in non-contested elections, elected by a majority of votes cast by the Class A shareholders and Class B Directors be elected by a plurality of votes by the Class B shareholder.

Proposal 1(a) – Election of Class A Directors

Nominees for election as Class A Directors this year are Thomas Casey, Ilan Kaufthal, Andrew P. Hines, Wayne A. Hinman, Peter Johnston and Jeffry N. Quinn. These nominees have been nominated by the Class A non-affiliated directors of the Corporate Governance and Nominating Committee in accordance with our Constitution.

Each of the nominees must be elected by a majority of votes cast by the Class A Shares at the Annual Meeting to hold office until their successors are duly named and qualified at the next Annual Meeting. All the nominees are current Directors. Your Board of Directors recommends a vote FOR these nominees by holders of Class A Shares. Class A Shares represented by proxy will be voted FOR the nominees unless you specify otherwise in your voting instructions.

We expect each nominee for election as a Director to be able to serve if elected. If any nominee is not able to serve at the time the election occurs, proxies may be voted for the election of a substitute nominee. In addition, as we have previously disclosed, upon the closing of the Cristal Transaction, Cristal is entitled to appoint two Class A directors. As such, two of our existing Class A directors at the time of such closing will be required to resign. We have not yet determined who those directors will be.

The Board of Directors recommends that Class A shareholders vote “FOR” the election of each of the following nominees:

NAME
AGE (1)
POSITION
Thomas Casey
65
Chairman of the Board
Ilan Kaufthal
69
Lead Independent Director
Andrew P. Hines
77
Director
Wayne A. Hinman
70
Director
Peter Johnston
66
Director
Jeffry N. Quinn
58
Director

   (1) As of March 1, 2017

Set forth below is a description of the backgrounds of the nominees for Class A Directors. Unless otherwise indicated below, each of our Directors joined the Tronox Limited Board on June 15, 2012 upon completion of merger transactions (the “Exxaro Transaction”) with Exxaro Resources Limited. There are no family relationships among any of our Directors.

Thomas Casey

Thomas Casey has served as Chairman of the Board of Directors (the “Chairman of the Board”) and Chief Executive Officer (“CEO”) of Tronox Limited since June 15, 2012 and served as Chairman of Tronox Incorporated since February 2011 and as Chief Executive Officer of Tronox Incorporated since October 2011. During the ten year period prior to joining us, Mr. Casey served as CEO of 6 companies and Chairman of the Board of 6 companies, Prior to that, Mr. Casey was a managing director of Merrill Lynch & Co, and was a

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partner at Skadden, Arps, Slate, Meagher & Flom LLP and at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. He also had various positions in the United States Government, including in the Antitrust Division of the U.S. Department of Justice. Mr. Casey graduated with honors from Boston College and The George Washington University, National Law Center. Mr. Casey brings to the Board significant understanding and leadership of complex transactions and multi-national business operations, including with respect to the financial, strategic and operational aspects thereof.

Ilan Kaufthal

Ilan Kaufthal has been lead independent Director of Tronox Limited since September 6, 2016, a Director of Tronox Limited since June 15, 2012 and was a Director of Tronox Incorporated from February 2011. He is Chairman of East Wind Advisors, a specialized investment banking firm serving companies in the media, education and information industries. Mr. Kaufthal is currently a director of Quinpario Acquisition Corp 2 (NASDAQ: QPACU), a special purpose acquisition company (SPAC) formed by another of our directors, Jeffry Quinn, for the purpose of entering into a business combination; and Cambrex Corporation (NYSE: CBM), a supplier to the pharmaceutical industries. Earlier in his career, he was Vice Chairman of Investment Banking at Bear Stearns & Co., Vice Chairman and Head of Mergers and Acquisitions at Schroder & Co., and SVP and CFO at NL Industries. Mr. Kaufthal is a graduate of Columbia University and the New York University Graduate School of Business Administration. Mr. Kaufthal brings to the board his financial, investment and core business skills.

Andrew P. Hines

Andrew P. Hines has been a Director of Tronox Limited since June 15, 2012 and was a Director of Tronox Incorporated from February 2011. Mr. Hines is currently a principal of Hines & Associates, a financial management consulting firm which he has led since 2006. From October 2015 to November 2016, he acted as Executive Vice President/Chief Financial Officer of Natural Markets Foods Group, a chain of organic food markets. He had been Executive Vice President/Chief Financial Officer of Sonar Entertainment between June 2011 and June 2014. The company develops, produces and distributes original made-for-television movies and mini-series. From September 2009 to June 2010, Mr. Hines served as Executive Vice President/Chief Financial Officer of World Color Press Inc. (formerly, Quebecor World), a company which provided high-value and comprehensive print, digital, and related services to businesses worldwide. From October 2005 to September 2006, he served as Vice President and Chief Financial Officer of GenTek, Inc., a manufacturer of industrial components and performance chemicals. Mr. Hines is a director of Intermap Technologies Corp. and Chairman of that company’s Audit Committee. Mr. Hines brings to the board in-depth financial experience and highly valued senior leadership experience including public company director experience. Because of his accounting background and extensive financial experience, Mr. Hines has been named Chairman of our Audit Committee, as well as the “Audit Committee financial expert,” as defined by the applicable rules of the SEC. He is a member of the American Institute and New York Society of Certified Public Accountants.

Wayne A. Hinman

Wayne Hinman has been a Director of Tronox Limited since June 15, 2012 and was a Director of Tronox Incorporated from February 2011. Mr. Hinman brings to the board a wealth of expertise in the chemicals and energy sectors, core business and leadership skills and public company director experience. He has served in various positions at Air Products & Chemicals, Inc. during his 33 year career, including President of Asia, and most recently V.P. and GM of the worldwide merchant gases business, a $2.5 billion business. He also has served as a director on numerous joint venture boards within the industrial gases business, most recently, as Chairman of Air Products South Africa and a member of the board of INOXAP in India. Mr. Hinman also served as a member of the board of directors of American Ref-fuel, Pure Air USA, and Taylor-Wharton International. Mr. Hinman is currently a member of the board of Lutron Electronics Co., Inc. Mr. Hinman served in the United States Air Force achieving the rank of Captain. He received his MBA from Virginia Polytechnic Institute and completed the Harvard AMP program.

Peter Johnston

Peter Johnston has been a director since August 1, 2012. He was appointed Global Head of Nickel Assets for Glencore in May 2013.He retired from Glencore in December 2015. Prior to this role he was Managing Director and Chief Executive Officer of Minara Resources Pty Ltd from 2001 to 2013. He was Vice Chairman of the

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Nickel Institute; past Chairman of the Minerals Council of Australia; past President of the Chamber of Minerals & Energy (WA); and past Vice President of the Australian Mines and Metals Association. Mr. Johnston also was a director of Silver Lake Resources Limited (ASX:SLR). He formerly was employed by WMC Ltd between 1993 and 2001, during which he held the position of Executive General Manager with responsibility over nickel and gold operations, Olympic Dam Operations, Queensland Fertilizers Ltd., and human resources. Mr. Johnston is currently a member of the board of NRW Holdings Limited (ASX:NWH). Mr. Johnston brings to the board extensive senior management, operating and leadership experience through his business career in the mining industry.

Jeffry N. Quinn

Jeffry N. Quinn has been a Director of Tronox Limited since June 15, 2012 and was a Director of Tronox Incorporated from February 2011. Mr. Quinn is currently the Chief Executive Officer and Chairman of the Board of Directors of Jason Industries, Inc. (NASDAQ: JASN) (“Jason”). Mr. Quinn served as Jason’s interim Chief Executive Officer from November 2015 until his election as Chief Executive Officer in December 2015 and has served as Chairman of the Board of Jason since 2014. Mr. Quinn served as President, Chief Executive Officer and Chairman of Quinpario Acquisition Corp., a blank check company, from its inception in May 2013 until June 30, 2014, when it completed its business combination of Jason Industries, Inc. Mr. Quinn is also the founder, Chairman, Chief Executive Officer and Managing Member of Quinpario Partners LLC, and has served in such role since 2012. Prior to forming Quinpario Partners LLC, Mr. Quinn was President, Chief Executive Officer and Chairman of the Board of Solutia Inc. (formerly NYSE: SOA), a global specialty chemical and performance materials company. From 2004 to 2012, Mr. Quinn served as the President and Chief Executive Officer of Solutia, and served as the Chairman of the Board from 2006 to 2012. Solutia was sold to Eastman Chemical in 2012. Mr. Quinn joined Solutia in 2003 as Executive Vice President, Secretary, and General Counsel. In mid-2003 he added the duties of Chief Restructuring Officer to help prepare the company for its eventual filing for reorganization under Chapter 11 (Solutia emerged from bankruptcy in 2008). Prior to joining Solutia, Mr. Quinn was Executive Vice President, Chief Administrative Officer, Secretary and General Counsel for Premcor Inc. (formerly NYSE: PCO), which at the time was one of the nation’s largest independent refiners. Prior to Premcor, Mr. Quinn was Senior Vice President-Law & Human Resources, Secretary and General Counsel for Arch Coal, Inc. (NYSE: ACI). Mr. Quinn started at Arch Coal in 1986 when it was known as Arch Mineral Corporation. He became General Counsel in 1989. In addition to serving on the Board of Directors of Tronox and Jason, Mr. Quinn serves as a member of the Board of Directors of W.R. Grace & Co. (NYSE: GRA), a global supplier of catalysts, engineered and packaging materials and specialty construction chemicals and building materials. Mr. Quinn formerly served as a director of Quinpario Acquisition Corp 2, Ferro Corporation, SunEdison, Inc. (formerly MEMC Electronic Materials Inc.), Tecumseh Products Company. Mr. Quinn received a bachelor’s degree in Mining Engineering and a Juris Doctorate degree from the University of Kentucky. Mr. Quinn brings to the board his core business and leadership skills, his global chemical company experience, and his experience leading a highly regulated, global business in rapidly changing markets, as well as his public company director experience.

Proposal 1(b) – Election of Class B Directors

The following Directors serve as Class B Directors, elected by Exxaro Resources Limited, the sole holder of our Class B Shares. Each of Daniel Blue, Mxolisi Mgojo and Sipho Nkosi has been nominated for reelection as a Class B Director in accordance with our Constitution.

We expect that our Class B shareholder (Exxaro) will reelect Mr. Blue, Mr. Mgojo and Mr. Nkosi at the Annual Meeting.

NAME
AGE (1)
POSITION
Daniel Blue
64
Director
Mxolisi Mgojo
52
Director
Sipho Nkosi
62
Director

   (1) As of March 1, 2017

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Daniel Blue

Daniel Blue has been a Director of Tronox since June 2012. Mr. Blue was a senior commercial partner at the Australian law firm Holding Redlich. He was the corporate and commercial group leader in the firm’s Melbourne office and head of its national energy and resources practice. Mr. Blue has worked around the globe including in United Kingdom, Australia, South Africa and Asia. He currently serves on the board of directors of Business for Millennium Development Ltd. He previously served as a director of Lynas Gold N.L. and Acclaim Exploration N.L. Mr. Blue also served as the Chairman of the Acclaim board of directors. Mr. Blue holds bachelor’s degrees in law and economics and a master’s degree in business administration from the University of Western Australia. Mr. Blue brings to the board more than 25 years of experience as an advisor, business strategist and negotiator for major mergers and acquisitions and other complex corporate and commercial matters.

Mxolisi Mgojo

Mxolisi Mgojo has been a Director of Tronox since June 2016. He has been the Chief Executive Officer of Exxaro Resources Limited since April 1, 2016 and an Executive Director since June 4, 2015. Mr. Mgojo served as Executive Head of Carbon Operations at Exxaro until May 1, 2015. He served as an Executive Head of Coal at Exxaro since August 2008 and served as its Executive Head of Operations. He served as an Executive General Manager of Coal at Exxaro since August 2008. He served as an Executive General Manager of Base Metals and Industrial Minerals of Exxaro. Prior to joining Exxaro, Mr. Mgojo served as Head of group marketing of Eyesizwe Coal. He serves as a Director of Glen Douglas Dolomite (Pty) Limited, Exxaro Base Metals (Pty) Limited, Exxaro Ferroalloys and Alloystream (Pty) Limited. He serves as a Director of Richards Bay Coal Terminal Co., Ltd. Mr. Mgojo holds a Bachelor of Science degree (Computer Science) from Northeastern University in the United States, a Bachelor of Science degree with honors (Energy Studies) from Rand Afrikaans University, a Master in Business Administration degree from Henley Business School and has attended the Advanced Management Program at the University of Pennsylvania’s Wharton School in the United States. Mr. Mgojo brings to the board his experiences and skills in growing leading businesses, innovation and strategy, and leadership development

Sipho Nkosi

Sipho Nkosi has been a Director of Tronox since June 2012. Mr. Nkosi is the former Chief Executive Officer of Exxaro Resources. He began his career as a market analyst with Ford Motor Company South Africa in 1980 after which he was appointed as marketing coordinator at Anglo American Coal in 1986. He joined Southern Life Association as senior manager, strategic planning in 1992 and the following year accepted the position of marketing manager, new business development at Trans-Natal Coal Corporation, which later became Ingwe Coal Corporation. Mr. Nkosi joined Asea Brown Boveri (South Africa) Ltd. in 1997 as Vice President Marketing and ABB Power Generation in 1998 as Managing Director. He was the founder and chief executive officer of Eyesizwe Holdings and following its merger with Kumba’s non-iron ore resources was appointed Chief Executive Officer of the renamed entity Exxaro Resources Limited in 2007. Mr. Nkosi holds a Bachelor of Commerce degree from the University of Zululand, an Honors degree in Commerce (Economics) from the University of South Africa and a Master of Business Administration from the University of Massachusetts in the United States. Mr. Nkosi brings to the board his experiences and skills in growing leading businesses, innovation and strategy, and leadership development.

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Tronox is committed to strong corporate governance, ethical conduct, sustainability and the accountability of the Board of Directors and our senior management team to the Company’s shareholders.

Highlights of our efforts in these areas include:

Seven of our nine Directors are independent;
We have a Lead Independent Director with clearly defined responsibilities;
Board includes a balance of experience, tenure and qualifications in areas important to our business;
Class A Directors are elected annually under a majority vote standard, with a plurality carve-out for contested elections;
Policy limiting the number of boards on which our Directors may serve;
Active shareholder outreach program;
Minimum share ownership requirements for Directors and Executive Officers;
Claw-back policy;
Anti-hedging Policy;
Written Code of Ethics and Business Conduct for Directors, officers, and employees;
Shareholder ratification of the selection of external audit firm; and,
Comprehensive sustainability report.

2016 Shareholder Engagement & Corporate Governance Update

After having reviewed the Class A Directors voting results from our General Annual Meeting in May 2016, and the analysis of proxy advisory services released prior to such meeting, our management met, in person or telephonically, with 19 of our top 25 largest investors who collectively represent approximately 56% of our Class A Shares. In those discussions, we reviewed our shareholder opinions on our governance, compensation and equity plans as well as the comments made by proxy advisory firms that had published their opinions on these matters. On June 1, 2016, we publicly announced that the Board had made a number of changes in its governance and compensation policies that were within its power to change unilaterally.

Specifically, the Board changed the composition of several its committees, amended certain terms contained in the Company’s Equity Incentive Plan, including removing the provision that permitted the Company to reprice options without shareholder approval, and adopted share ownership guidelines for Directors. Additionally, we appointed a Lead Independent Director as a clearly defined role with meaningful responsibilities. The Lead Independent Director, like all of our Directors, will resign each year and be subject to annual election. We proposed, and at a special meeting of shareholders held on November 3, 2016 received the required affirmative vote to require, that Class A Directors will only be re-elected in uncontested elections if they receive a majority of the Class A shareholder votes that are cast. Additionally, 7 of our Directors are considered independent under the NYSE listing standards and all of our committees are fully independent.

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Below are the highlights of what we heard and how we responded:

What we heard…
How we responded…
ð
Class A Directors should be required to receive a majority of the Class A votes in non-contested elections.
The Board called a special shareholder meeting for the purpose of considering such a requirement and recommended its adoption by the shareholders. The shareholders approved the change. The new majority vote standard is applicable to the re-election of all Class A Directors at the 2017 Annual Meeting.
ð
We should appoint a lead independent director to provide governance balance to the current combined CEO and Chair structure.
Effective September 6, 2016, Mr. Ilan Kaufthal was appointed to serve as the Board’s Lead Independent Director and we adopted a Lead Independent Director Charter which can be found on our website in the “Corporate Governance” section.
ð
We should adopt a Director share ownership policy to promote Directors’ alignment with shareholders.
Effective September 6, 2016, the HRCC implemented a Director Share Ownership Policy pursuant to which non-employee Directors must acquire, over a five-year period, shares representing 5x the annual cash retainer paid to them by us.
 
 
 
All non-employee Directors, with the exception of Mr. Mgojo, met or exceed the ownership guideline. Mr. Mgojo, who joined the Board on June 10, 2016, has until June 10, 2021 to reach his ownership requirement.
ð
We should not have the ability to reprice options and share appreciation rights (SARs) without shareholder approval; other equity plan provisions are inconsistent with best practice.
Effective September 6, 2016, our Tronox Limited Equity Plan was amended to (i) require shareholder approval for any repricing of options and SARs, as well as for any cash buyout of underwater options and SARs (other than in the case of permitted equitable adjustments under the Tronox Limited Equity Plan or a Change of Control of the Company), (ii) restrict liberal share recycling and (iii) include a default provision for double trigger change of control acceleration of awards.
 
 
 
We have never repriced any issued options or SARs, nor have we ever bought back any options or SARs (except to the extent that a cashless exercise of vesting SARs may be considered a purchase).
ð
Director overboarding concerns.
Effective August 31, 2016, the Company’s Corporate Governance Guidelines were amended to limit the number of public company directorships . Specifically:
 
 
 
A Director cannot sit on the board of directors of more than five public companies, but
 
 
 
Any Director who is a chief executive officer of a public company cannot sit on more than two public company boards (other than the company for which he or she serves as chief executive officer).
 
 
 
All Directors are in compliance with this policy.
 
 
 
A copy of the Corporate Governance Guidelines can be found on our website in the “Corporate Governance” section.
ð
Committee composition concerns.
Effective May 25, 2016, the composition of the standing Board committees was reconstituted as follows:
 
 
 
Human Resources and Compensation Committee
 
 
 
 
Ilan Kaufthal, Chairman
 
 
 
 
Daniel Blue
 
 
 
 
Wayne A. Hinman
 
 
 
Audit Committee
 
 
 
 
Andrew P. Hines, Chairman
 
 
 
 
Daniel Blue
 
 
 
 
Jeffry N. Quinn
 
 
 
Corporate Governance Committee
 
 
 
 
Wayne A. Hinman, Chairman
 
 
 
 
Peter Johnston
 
 
 
 
Sipho Nkosi

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Code of Ethics and Business Conduct

The Company has adopted the Tronox Code of Ethics and Business Conduct that applies to all of the Company’s employees, including our principal executive officer, principal financial officer and principal accounting officer, and the Board of Directors. The Code of Ethics and Business Conduct addresses such issues as conflicts of interest, protection of confidential Company information, financial integrity, compliance with laws, rules and regulations, insider trading and proper public disclosure. Compliance with the Code of Conduct is mandatory for all Company officers, other employees and Directors. Any violation of the Code of Conduct can subject the person at issue to a range of sanctions, up to and including dismissal.

The Code of Ethics and Business Conduct is available on the Company’s website at www.tronox.com , under “Investor Relations – Corporate Governance”. If the Company makes any substantive amendments to the Code of Ethics and Business Conduct or grants any waiver from a provision of the Code of Ethics and Business Conduct to any executive officer or Director, the Company will promptly disclose the nature of the amendment or waiver on our website.

Corporate Governance Guidelines

Tronox has adopted a set of Corporate Governance Guidelines which address qualifications for members of the Board of Directors, Director responsibilities, Director access to management and independent advisors, Director compensation and many other matters related to the governance of the Company. The Corporate Governance Guidelines are available on Tronox’s website at www.tronox.com , under “Investor Relations - Corporate Governance.”

Director Independence

The listing standards of the NYSE, as well as our Corporate Governance Guidelines, require that a majority of the Board of Directors be comprised of independent directors. For a director to be considered independent under these standards:

The director must meet the bright–line independence tests under the listing standards of the NYSE; and,
The board must affirmatively determine that the director otherwise has no material relationship with us, directly or as a partner, shareholder or officer of an organization that has a relationship with us.

The board has adopted additional categorical standards which provide that certain relationships will not be considered material relationships that would impact a director’s independence. These categorical standards are part of our Corporate Governance Guidelines are available on Tronox’s website at www.tronox.com , under “Investor Relations - Corporate Governance.”

Based on these standards, the Board has affirmatively determined that all of the current Directors, except for Mr. Casey and Mr. Mgojo, are independent. The board based these determinations primarily on a review of the responses of our Directors to questions regarding employment and compensation history, affiliations and family and other relationships and on discussions with the Directors.

Board Leadership Structure

Chairman of the Board of Directors

The Chairman of the Board position is currently held by our CEO, Thomas Casey. Given the geographic range and the complexity of our multi-national, multi-product operations, and the structure of our ownership, the Board believes this is a position that demands an individual with strong leadership skills and a comprehensive knowledge of our Company. The Board of Directors believes it should appoint the best person for the job in this

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position, regardless of whether that person is someone who is currently serving, or has previously served, as one of our executive officers, and the Board believes Mr. Casey possesses the necessary attributes to best serve in this position. The Board of Directors recognizes that, given the dynamic environment in which we operate, the right Board of Director leadership structure may vary as circumstances warrant.

The Board of Directors of the Company’s predecessor considered its leadership structure in October 2011 in connection with the resignation of our former CEO and again in June 2012 in connection with our merger with Exxaro’s mineral sands business, and determined that in order to fully implement the integration of our mineral sands and pigment businesses and the equity ownership that resulted therefrom, combining the roles of Chairman of the Board and CEO was optimal. Although Mr. Casey is not considered an independent director, this leadership structure is optimal for us because it provides us with consistency and continuity at the senior board leadership level.

The Board of Directors believes that our current leadership structure, when combined with the functioning of the Lead Independent Director component of the Board of Directors and our overall corporate governance structure, creates an appropriate balance between strong and consistent leadership and independent oversight of our business.

Directors meet in executive session at Board of Directors meetings held in person. At these executive sessions the Directors review among other things the performance of the Company’s management. In the fiscal year 2016, the Directors met in executive session four times.

The Company’s Corporate Governance Guidelines, a copy of which is available on Tronox’s website at www.tronox.com , under “Investor Relations - Corporate Governance,” sets forth the policy and procedure with respect to meetings of non-management Directors and the role of lead Directors at such executive sessions, including the procedure by which a lead Director is chosen.

Lead Independent Director

As the Chairman of the Board is not considered independent by virtue of his role as CEO, the Board of Directors considers it to be useful and appropriate that an independent director be designated the Lead Independent Director to perform such duties, and have specific responsibilities, as the Board may determine. On September 6, 2016, the independent Directors elected Mr. Ilan Kaufthal to hold the position of Lead Independent Director and adopted a new Lead Independent Director Charter.

The specific responsibilities of the Lead Independent Director are as follows: (a) preside at meetings of the Board in the absence of, or upon the request of, the Chairman of the Board; (b) preside over all meetings of independent Directors and report to the Board, as appropriate, concerning such meetings; (c) review Board agendas in collaboration with the Chairman of the Board and CEO and, if matters or information requested by independent Directors are not on the agendas then add, as appropriate, such matters or information to the agendas for the Board to consider; (d) advise the Chairman of the Board as to the quality, quantity and timeliness of information provided to the Board; (e) if necessary, serve as a supplemental channel of communication between non-management Directors and the Chairman of the Board and CEO without inhibiting direct communications between the Chairman of the Board, CEO and other Directors; and, (f) if requested by major shareholders, ensure availability for consultation and direct communication.

The Lead Independent Director is elected by a majority of the independent Directors for renewable one (1) year terms and until such earlier time as he or she ceases to be a Director, resigns as Lead Independent Director, or is replaced as Lead Independent Director by a majority of the independent Directors.

The qualifications of Lead Independent Director are: (a) be available to work effectively and closely with, and in an advisory capacity to, the Chairman of the Board; and (b) be available to discuss with other Directors and major shareholders any concerns about the Board or the Company and to relay those concerns, where appropriate, to the Chairman of the Board.

The Company’s Lead Independent Director Charter is available on Tronox’s website at www.tronox.com , under “Investor Relations - Corporate Governance”.

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Majority Vote Standard

The Company, by affirmative vote of over 80% of the Company’s shareholders at a special meeting held on November 3, 2016, adopted a majority vote standard for the election of Class A Directors in uncontested Director elections (with a plurality vote standard applying to contested Director elections).

In an election of Class A Directors of the Company which is not contested (as defined below), each Class A Director shall be elected if such Director receives a majority of the votes cast (as defined below) by the holder of Class A Shares present in person or represented by proxy at the meeting and entitled to vote on the election of Class A Directors. For this purpose, a “majority of the votes cast” shall mean that number of votes cast “for” a Class A Director’s election exceeds the number of votes cast “against” that Class A Directors’ election, provided, however, that the Class A Directors shall be elected by a plurality of the votes of the Class A Shares present in person or represented by proxy at the meeting and entitled to vote on the election of Class A Directors if the number of candidates standing for election at the meeting as Class A Directors exceeds the number of Class A Directors which may be elected (referred to as a “contested election”).

Over-boarding Policy

Effective August 31, 2016, the Company’s Corporate Governance Guidelines were amended to limit the number of public company directorships board members may hold. Specifically, a Director cannot sit on the board of directors of more than five public companies (including the Company’s Board), however, any Director who is a chief executive officer of a public company cannot sit on more than two public company boards (other than the company for which he or she serves as the chief executive officer). All Directors are in compliance with this policy.

Share Ownership Guidelines

Since December 2012, the Company has had share ownership guidelines which apply to our CEO, all executive officers and all other direct reports of the CEO at the VP level. The guidelines ensure that executives are aligned with the interests of our shareholders by requiring them to hold significant levels of Company stock. All shares owned outright and 60% of time-based restricted shares count towards share ownership. Executives have five years to reach their ownership guidelines.

In order to further align the interests of our non-employee Directors to those of our shareholders, the HRCC implemented, effective September 6, 2016, a Director Share Ownership Policy pursuant to which non-employee Directors must acquire, over a five-year period, shares representing 5 times the $75,000 annual cash retainer paid to them by us. All shares owned outright and 60% of time-based restricted shares or restricted share units count towards share ownership. Each Director is expected to continue to meet the ownership requirement for as long as he or she serves on the Board. The ownership guidelines are as follows:

POSITION
PERCENTAGE OF
BASE SALARY
Chief Executive Officer
500%
Executive Officers
300%
Other Direct Reports of the CEO at VP Level and Above
100%
 
PERCENTAGE OF
ANNUAL CASH RETAINER
Non-employee Directors
500%

As of the date of this Proxy Statement, Mr. Casey, Mr. Turgeon and Mr. Romano have met their ownership requirements, Dr. Van Niekerk is at 98% of his ownership requirement and Mr. Carlson, who joined the Company on October 31, 2016, has until October 31, 2021 to reach his ownership requirement. All non-employee Directors, with the exception of Mr. Mgojo, have met these guidelines as of the date of this Proxy Statement. Mr. Mgojo, who joined the Board on June 10, 2016, has until June 10, 2021 to reach his ownership requirement.

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Claw-back Policy

The Company has adopted a recoupment or “Claw-Back” Policy for executives, including all the NEOs. This policy allows for claw-back of incentive compensation, from both the annual and long-term plans, if payments pursuant to those plans were based on financial results that were subsequently restated due to fraud or intentional misconduct and the payment was greater than it would have been if calculated based on the accurate financial statements.

Anti-Hedging Policy

The Company has adopted a policy prohibiting any Company Director, officer, employee or related person from hedging or entering into monetization transactions or similar arrangements with respect to Company securities. This policy was established in order to avoid the appearance of improper or inappropriate conduct by any Company Director, officer, employee or related person.

No Tax Gross-ups

We do not have any existing tax gross-up arrangements with any of our Directors, officers or other employees and we have made a commitment to not enter into such arrangements in the future.

Board Meetings and Committees

During 2016, the Board of Directors held a total of ten meetings. All Directors attended at least 75% of the meetings of the Board of Directors and the committees of the Board of Directors on which they served that were held during the aforementioned period.

The Board of Directors has established three committees: a Corporate Governance and Nominating Committee, a Human Resources and Compensation Committee and an Audit Committee. During 2016, the Corporate Governance and Nominating Committee held a total of four meetings, the HRCC three meetings, the Audit Committee a total of nine meetings. Each such committee is governed by a written charter, and a current copy of each such charter is available on Tronox’s website at www.tronox.com , under “Investor Relations - Corporate Governance”.

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Effective May 25, 2016, we evaluated the Board committee composition which resulted in a rotation of committee members and the change of the chairman of several committees. Specifically, Mr. Kaufthal assumed the chairman role of the HRCC and stepped down as a member of the Audit Committee and the Corporate Governance and Nominating Committee; and Mr. Quinn became a member of the Audit Committee and stepped down as chairman of the HRCC. The table below provides current membership for each of the board committees.

NAME
AUDIT
HUMAN RESOURCES
AND COMPENSATION
CORPORATE
GOVERNANCE
Thomas Casey*
 
 
 
Daniel Blue
 
Andrew P. Hines
Δ
 
 
Wayne A. Hinman
 
Δ
Peter Johnston
 
 
Ilan Kaufthal
 
Δ
 
Jeffry N. Quinn
 
 
Sipho Nkosi
 
 
* Chairman of the Board
Δ Chair
Member

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee assists the Board of Directors with respect to: (a) the organization and function of the Board of Directors; (b) corporate governance principles applicable to the Company; and (c) the Company’s policies and programs that relate to matters of corporate responsibility. The Corporate Governance and Nominating Committee reviews and makes recommendations to the Board of Directors regarding the composition of the Board of Directors, structure, format and frequency of the meetings. The Corporate Governance Committee has not formally established any specific, minimum qualifications that must be met by each candidate for the Board of Directors or specific qualities or skills that are necessary for one or more of the members of the Board of Directors to possess. The Class A non-affiliated Directors of the Corporate Governance and Nominating Committee are responsible for the nomination of Class A Directors to the Board. The Class B Directors are appointed by Exxaro in accordance with our Constitution.

Audit Committee

The primary responsibilities of the Audit Committee are to oversee the accounting and financial reporting processes of the Company as well as our affiliated and subsidiary companies, and to oversee the internal and external audit processes. The Audit Committee also assists the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial information which is provided to shareholders and others, and the system of internal controls which management has established. The Audit Committee oversees the Company’s independent registered public accounting firm, including their independence and objectivity. However, the committee members are not acting as professional accountants or auditors, and their functions are not intended to duplicate or substitute for the activities of management and our independent registered public accounting firm. The Audit Committee is empowered to retain independent legal counsel and other advisors as it deems necessary or appropriate to assist the Audit Committee in fulfilling its responsibilities, and to approve the fees and other retention terms of the advisors. The Company maintains an internal audit function to provide management and the Audit Committee with ongoing assessments of the Company’s risk management processes and system of internal control.

The Audit Committee is comprised of three members, each of whom was elected by the Board of Directors. Andrew P. Hines, because of his accounting background and extensive financial experience, meets the NYSE

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listing standard of having accounting or related financial management expertise and the SEC definition of an “Audit Committee financial expert.” Each of the other members of our Audit Committee has financial management experience or is financially literate. Each committee member meets the additional independence requirements for members of an Audit Committee in the NYSE Corporate Governance Rules.

Human Resources and Compensation Committee

The HRCC administers our executive compensation program and assists the Board of Directors in fulfilling its oversight responsibilities with respect to the compensation we pay to our executive officers and our non-employee Directors. Among its other duties, the HRCC:

Evaluates and determines the salary, incentives and benefits making up the total compensation of our CEO and other executive officers;
Reviews and monitors management succession planning and development, including promotability of all officers;
Defines the terms and conditions, including performance metrics, for the stock options, restricted shares/units and other long-term equity awards for our executive officers and approves all grants made to the executive officers;
Reviews and approves the annual corporate goals and objectives of our CEO; and
Considers industry conditions, relevant market conditions and our prospects and achievements when making recommendations with respect to compensation matters.

Each member of the HRCC is independent as defined by SEC rules and NYSE listing standards and is a “non-employee director” as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (“Exchange Act”) and an “outside director” as defined in Section 162(m) of the Internal Revenue Code.

Human Resources and Compensation Committee Interlocks and Insider Participation

During the fiscal year ended December 31, 2016, none of our HRCC members: (i) have ever been an executive officer or employee of our Company; or (ii) is or was a participant in a “related person” transaction in fiscal year 2016. During the fiscal year ended December 31, 2016, no executive officer of our Company served on the compensation committee (or its equivalent) or board of directors of any company that has an executive officer that serves on the Board of Directors or our HRCC.

The Board’s Role in Risk Oversight

The Board of Directors administers its risk oversight function directly and through its various committees. The Board of Directors’ role in our Company’s risk oversight process includes receiving regular reports from members of senior management on areas of material risk to our Company, including operational, financial, competitive, management retention and legal risks. The Board of Directors routinely discusses with senior management our major risk exposures, their potential financial impact on our Company, and the steps (both short-term and long-term) we take to manage them. While the Board of Directors is ultimately responsible for risk oversight at our Company, the Board of Directors’ committees assist the Board in fulfilling its oversight responsibilities in certain areas of risk. In particular, our Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to the areas of financial reporting, internal controls and compliance with legal and regulatory requirements, and, in accordance with NYSE requirements, discusses policies with respect to risk assessment and risk management and their adequacy and effectiveness. Our Audit Committee routinely discusses with senior management and our independent registered public

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accounting firm any financial risk exposures, including risks related to financial reporting, tax, accounting, disclosure, internal control over financial reporting, financial policies and credit and liquidity matters, steps taken to manage those exposures and our Company’s risk tolerance in relation to our overall strategy. Our HRCC also assists the Board of Directors in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs. In addition, our Corporate Governance Committee assists the Board of Directors in fulfilling its oversight responsibilities with respect to risk assessment and management in a general manner and specifically the management of risks associated with board organization, membership and structure, succession planning for our Directors and executive officers, and corporate governance.

Indemnification of Officers and Directors

Except as set forth below and in employment agreements, there is no provision in any contract, arrangement or statute under which any Director or officer of the Company is insured or indemnified in any manner against any liability which he/she may incur in his/her capacity as such.

Subject to, and so far as permitted by applicable law (including the Australian Corporations Act), the Constitution (i) requires Tronox Limited to indemnify every officer of Tronox Limited and its related bodies corporate against a liability incurred as such an officer to any person (other than to Tronox Limited or a related entity of Tronox Limited), unless the liability arises out of conduct involving a lack of good faith, and (ii) permits Tronox Limited to make a payment in respect of legal costs incurred by an officer or employee in defending an action for a liability incurred as such an officer or employee or in resisting or responding to actions taken by a government agency or a liquidator.

Tronox Limited has entered into or will enter into Deeds of Indemnity, Access and Insurance (“Deeds of Indemnity”) with each of its Directors to, among other things, give effect to these rights.

Directors and officers of the Company are covered by an insurance policy. Tronox Limited will insure against amounts that it may be liable to pay to Directors, secretaries, officers or certain employees pursuant to the Constitution, the Deeds of Indemnity or that Tronox Limited otherwise agrees to pay by way of indemnity. Tronox Limited will pay premiums for this “Directors and Officers” insurance (“D&O Insurance”). The insurance policy also will insure Directors, secretaries, officers and some employees against certain liabilities (including legal costs) they may incur as officers or employees of Tronox Limited. The Deeds of Indemnity will provide that, subject to the Australian Corporations Act, during the Director’s term of office as an officer of Tronox Limited (or as an officer or trustee of a corporation or trust of which the Director is appointed or nominated an officer or trustee by Tronox Limited or a wholly owned subsidiary of Tronox Limited) and for seven years after the Director ceases to hold such office, Tronox Limited must use its best efforts to effect and maintain D&O Insurance covering the Director.

There are certain provisions of the Australian Corporations Act that restrict Tronox Limited from indemnifying officers in certain circumstances. These provisions are described below.

Australian Law
Australian Corporations Act

Section 199A(1) of the Australian Corporations Act provides that a company or a related body corporate must not exempt a person from a liability to the company incurred as an officer of the company.

Section 199A(2) of the Australian Corporations Act provides that a company or a related body corporate must not indemnify a person against any of the following liabilities incurred as an officer of the company:

A liability owed to the company or a related body corporate;
A liability for a pecuniary penalty order or compensation order under specified provisions of the Australian Corporations Act; or,
A liability that is owed to someone other than the company or a related body corporate and did not arise out of conduct in good faith.

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Section 199A(2) does not apply to a liability for legal costs.

Section 199A(3) of the Australian Corporations Act provides that a company or a related body corporate must not indemnify a person against legal costs incurred in defending an action for a liability incurred as an officer of the company if the costs are incurred:

In defending or resisting proceedings in which the person is found to have a liability for which they could not be indemnified under Section 199A(2);
In defending or resisting criminal proceedings in which the person is found guilty;
In defending or resisting proceedings brought by the Australian Securities and Investments Commission (ASIC) or a liquidator for a court order if the grounds for making the order are found by the court to have been established (this does not apply to costs incurred in responding to actions taken by ASIC or a liquidator as part of an investigation before commencing proceedings for the court order); or,
In connection with proceedings for relief to the person under the Australian Corporations Act in which the court denies the relief.

Section 199B of the Australian Corporations Act provides that a company or a related body corporate must not pay, or agree to pay, a premium for a contract insuring a person who is or has been an officer of the company against a liability (other than one for legal costs) arising out of:

Conduct involving a willful breach of duty in relation to the company; or,
A contravention of the officer’s duties under the Australian Corporations Act not to improperly use their position or make improper use of information obtained as an officer.

For the purpose of Sections 199A and 199B, an “officer” of a company includes:

A director or secretary;
A person who makes, or participates in making, decisions that affect the whole, or a substantial part, of the business of the company;
A person who has the capacity to significantly affect the company’s financial standing; and,
A person in accordance with whose instructions or wishes the directors of the company are accustomed to act.

Director and Officer Insurance

The Directors and officers of Tronox Limited are insured against certain liabilities, including certain insured liabilities under United States securities laws, which they may incur in their capacity as such under a liability insurance policy carried by Tronox Limited.

Communications with the Board of Directors

The Board of Directors has established a process to receive communications from shareholders and other interested parties. Shareholders and other interested parties may contact any member (or all members) of the Board of Directors, including Mr. Ilan Kaufthal our Lead Independent Director, any Board committee or any chair of any such committee by mail or electronically. To communicate with the Board of Directors, the non-management independent Directors, any individual Directors or committee of Directors, correspondence should be addressed to the Board of Directors or any such individual Directors or committee of Directors by either name or title. All such correspondence should be sent to Tronox Limited, c/o Secretary, 263 Tresser Boulevard, Suite 1100, Stamford, Connecticut 06901, USA with a request to forward the same to the intended recipient. To communicate with the Board of Directors electronically, shareholders and other interested parties should go to our website at www.tronox.com . Under the heading “Investor Relations – Corporate Governance

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– Contact the Board” you will find an on-line form that may be used for writing an electronic message to the Board of Directors. In general, all communications delivered to the Company’s Secretary for forwarding to the Board of Directors or specified members will be forwarded in accordance with the shareholder’s instructions. However, the Company’s Secretary reserves the right not to forward to members any abusive, threatening or otherwise inappropriate materials.

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2016 NON-EMPLOYEE DIRECTOR COMPENSATION

Our Board of Directors approved the compensation for the Directors of Tronox in June 2012. Since June 2012, all non-employee Directors are entitled to an annual cash retainer of $75,000 for service on the Board of Directors payable quarterly in arrears, plus additional cash compensation payable quarterly in arrears as follows:

A non-executive chairman of the Board of Directors will receive an additional annual retainer of $50,000*;
The chairman of the Audit Committee will receive an additional annual retainer of $50,000;
The chairman of the HRCC will receive an additional annual retainer of $20,000;
The chairman of the Corporate Governance Committee will receive an additional annual retainer of $20,000; and,
A committee member of each of the Audit Committee, HRCC, Corporate Governance Committee, or any other committee established by the Board of Directors, respectively, who is not serving as chairman of such committee, will receive an additional annual retainer of $15,000.
     * Mr. Casey, as Executive Chairman, is compensated per the terms of his employment agreement and does not receive the $50,000 retainer.

In November 2015, the Board of Directors adopted a program whereby Directors could opt to receive their quarterly Board fees in shares of Class A stock in lieu of receiving a cash payment. In the event that a Director elects to receive their quarterly Board fees in shares, such election must be made in writing to the Company’s Corporate Secretary. The number of shares issued will be calculated by dividing the appropriate quarterly fee due by the closing price on the first trading day of the next quarter.

In March 2016, the Board of Directors formed a Special Ad Hoc Succession Committee to, among other things, identify and select an interim successor for the Company’s CEO, Thomas Casey. The members of this Committee were Wayne Hinman, Ilan Kaufthal, Andrew Hines and Daniel Blue, with Messrs. Hinman and Kaufthal serving as Co-Chairs. The members of this Committee were entitled to receive $15,000 per annum as additional compensation for serving on this Committee and each of the Co-Chairs were entitled to receive an additional $10,000 per annum for acting as Chairman.

On September 6, 2016, the Board of Directors, on the recommendation of the Special Ad Hoc Succession Committee, approved the dissolution of the Special Ad Hoc Succession Committee and provided that any and all powers, authorities and discretions previously delegated to the committee be assumed by the HRCC.

On September 6, 2016, the independent members of the Board of Directors, on the recommendation of the Corporate Governance and Nominating Committee, approved the form, terms and provisions of the Lead Independent Director Charter and appointed Mr. Ilan Kaufthal as the Lead Independent Director. The independent members of the Board of Directors also approved an additional annual retainer for the Lead Independent Director of $50,000, payable quarterly in arrears.

Historically, non-employee Directors were entitled to receive an annual grant of time based restricted shares under the Tronox Limited Equity Plan with a fair-market value at grant equal to $150,000, determined by dividing $150,000 by the ten (10) day average closing price for the Company’s shares for the first 10 business days in that calendar year and rounding down to the nearest full share. For awards granted through 2016, these awards vested ratably over three years in equal installments on the anniversary of the date of the grant. Unvested awards were forfeited upon termination except that in the case of a Change of Control (as defined in the grant agreement) the awards would immediately vest.

On September 6, 2016, the Board of Directors, upon the recommendation of the HRCC, in consultation with the committee’s independent compensation consultant, determined that non-employee Directors will continue to receive an annual grant with a fair-market value at grant equal to $150,000, but it will be awarded in time-based RSUs instead of restricted shares. Unlike the time-based restricted shares previously received by non-employee Directors, dividends will accrue and be paid when such RSUs vest. Further, these RSU awards will now vest on the first anniversary of the date of the grant (assuming such individual is a Board member at the time of vesting) instead of ratably over three years as was the case with the previous annual restricted share grant.

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2016 NON-EMPLOYEE DIRECTOR COMPENSATION

The following table sets forth the total compensation for the year ended December 31, 2016 paid to or earned by our non-employee Directors during 2016.

NON-EMPLOYEE DIRECTOR COMPENSATION FOR 2016

NAME
FEES EARNED
OR PAID IN
CASH ($)
STOCK
AWARDS
($) (1) (2)
ALL OTHER
COMPENSATION
($) (3)
TOTAL
($)
Andrew P. Hines
 
31,250
 
 
245,621
 
 
18,249
 
 
295,120
 
Daniel Blue
 
121,206
 
 
145,395
 
 
18,249
 
 
284,850
 
Ilan Kaufthal
 
30,000
 
 
240,800
 
 
18,249
 
 
289,049
 
Wayne A. Hinman
 
27,500
 
 
238,690
 
 
18,249
 
 
284,439
 
Jeffry N. Quinn
 
93,242
 
 
145,395
 
 
18,249
 
 
256,886
 
Peter Johnston
 
110,000
 
 
145,395
 
 
18,249
 
 
273,644
 
Sipho Nkosi (4)
 
 
 
206,911
 
 
13,461
 
 
220,372
 
Mxolisi Mgojo (4)
 
 
 
162,918
 
 
 
 
162,918
 
Wim de Klerk (4)
 
 
 
178,711
 
 
13,461
 
 
192,232
 
(1) Amounts reported in this column represent the aggregate grant date fair value for restricted shares/units granted to each Director computed in accordance with the share-based compensation accounting guidance under ASC Topic 718. Each Director (except Mr. Mgojo) received a grant of 40,727 restricted shares/units valued at the NYSE closing price on January 29, 2016 of $3.57. Mr. Mgojo received at grant of 30,545 restricted share units valued at the NYSE closing price on July 1, 2016 of $4.72. Mr. de Klerk actually received the grant of 40,772 restricted share units on January 29, 2016, but these restricted share units, along with an additional 6,673 unvested restricted share units from previous year’s grants were forfeited on July 1, 2016 due to Mr. de Klerk’s resignation from the Company’s Board. As of December 31, 2016 each Director, with the exception of Mr. Mgojo, held 47,400 unvested restricted shares/units. Mr. Mgojo held 30,545 unvested restricted share units as of December 31, 2016.
(2) Amounts reported in this column also represent stock issued to each Director during 2016 in lieu of quarterly cash fees. As noted above, Directors have the option to receive Class A shares in lieu of a cash payment. For Class A shares issued in lieu of cash payments, the number of shares issued was calculated by dividing the appropriate quarterly fee due by the closing price of the Company’s shares on the first trading day of the next quarter. During 2016 the Company issued shares in lieu of cash fees on: (a) April 1, 2016 at $6.85 per share; (b) July 1, 2016 at $4.72 per share; and (c) on October 3, 2016 at $9.42 per share. The shares issued in lieu of cash fees vested immediately upon issuance.
(3) Amounts in this column represent dividend payments on restricted shares at the approved dividend rate for all shareholders. For 2016, this rate was $0.25 per share for the dividend paid on March 17, 2016 and $0.045 per share for dividends paid on each of May 24, September 1 and December 2, 2016. Messrs. Mgojo, Nkosi and de Klerk accrue dividends on their restricted share units which are then paid upon vesting. For 2016, Messrs. Nkosi and de Klerk received accumulated dividends on previously issued restricted share units that vested on January 31, 2016. Mr. Mgojo had no restricted share units that vested in 2016. Dividends are not included in the grant date fair value calculation for time-based shares.
(4) Should Messrs. Mgojo, Nkosi and de Klerk elect not to receive shares in lieu of quarterly cash fee payments, then such cash amounts are instead paid to Exxaro. During 2016, Exxaro was paid $4,121, $18,750 and $18,750 for services by Messrs. Mgojo, Nkosi and de Klerk, respectively. They are eligible to receive directly the long-term incentive grants that are awarded to each Director.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table shows information regarding the beneficial ownership of shares of Tronox Limited as of February 28, 2017 by:

Each current Director of Tronox Limited;
The current CEO and each named executive officer;
All persons currently serving as Directors and executive officers of Tronox Limited, as a group; and,
Each person known to us to own beneficially 5.0% or more of any class of Tronox Limited’s outstanding shares.

Beneficial ownership and percentage ownership are determined in accordance with the SEC’s rules and regulations. To our knowledge, except as indicated in the footnotes to this table and subject to community property laws where applicable, the persons named in the table below have sole voting and investment power with respect to all shares of Tronox Limited shown as beneficially owned by them. The table is based on 66,255,965 Class A Shares and 51,154,280 Class B Shares outstanding as of February 28, 2017. All information concerning security ownership of certain beneficial owners is based upon filings made by such persons with the SEC or upon information provided by such persons to us. Unless otherwise noted below, the address for each beneficial owner listed in the table below is: c/o Tronox Limited, 263 Tresser Boulevard, Suite 1100, Stamford, Connecticut 06901, USA.

NAME AND ADDRESS OF BENEFICIAL OWNER
NUMBER OF ORDINARY
SHARES
BENEFICIALLY OWNED
% OF
CLASS OWNED
% OF
TOTAL OWNED
Class B Shares
 
 
 
 
 
 
 
 
 
Exxaro Resources Limited
Roger Dyason Road
Pretoria West
0182
South Africa
 
51,154,280
 
 
100.0
%
 
43.6
%
Class A Shares
 
 
 
 
 
 
 
 
 
5% Owners
 
 
 
 
 
 
 
 
 
Fine Capital Partners, L.P. (1)
 
5,061,661
 
 
7.6
%
 
4.3
%
The Vanguard Group (2)
 
4,849,179
 
 
7.3
%
 
4.1
%
Franklin Mutual Advisers, LLC (3)
 
4,297,768
 
 
6.5
%
 
3.7
%
BlackRock Inc. (4)
 
4,165,586
 
 
6.3
%
 
3.5
%
Dimensional Fund Advisors LP (5)
 
3,328,599
 
 
5.0
%
 
2.8
%
Named Executive Officers and Directors (6)
 
 
 
 
 
 
 
 
 
Thomas Casey
 
1,271,138
 
 
1.9
%
 
1.1
%
John D. Romano
 
317,122
 
 
*
 
 
*
 
Willem Van Niekerk
 
229,235
 
 
*
 
 
*
 
Jean-François Turgeon
 
166,602
 
 
*
 
 
*
 
Timothy C. Carlson
 
1,622
 
 
*
 
 
*
 
Ilan Kaufthal
 
100,364
 
 
*
 
 
*
 
Andrew P. Hines
 
100,615
 
 
*
 
 
*
 
Wayne A. Hinman
 
85,045
 
 
*
 
 
*
 

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NAME AND ADDRESS OF BENEFICIAL OWNER
NUMBER OF ORDINARY
SHARES
BENEFICIALLY OWNED
% OF
CLASS OWNED
% OF
TOTAL OWNED
Jeffry N. Quinn
 
51,478
 
 
*
 
 
*
 
Sipho Nkosi
 
47,283
 
 
*
 
 
*
 
Daniel Blue
 
37,863
 
 
*
 
 
*
 
Peter Johnston
 
37,863
 
 
*
 
 
*
 
Mxolisi Mgojo
 
12,171
 
 
*
 
 
*
 
All Executive Officers and Directors as a group (16 persons)
 
2,639,300
 
 
4.0
%
 
2.2
%
   (1) Information regarding Fine Capital Partners, L.P. is based solely on the Amendment to the 13G filed with the SEC on February 14, 2017 for the calendar year ended December 31, 2016. Fine Capital Partners L.P. has the shared power to vote or direct the vote of 5,061,661 of the Class A Shares and the shared power to dispose or to direct the disposition of 5,061,661 of the Class A Shares. The address of Fine Capital Partners L.P. is 590 Madison Avenue, 27 th Floor, New York, NY 10022.
   (2) Information regarding The Vanguard Group, Inc. is based solely on the Amendment to the 13G filed with the SEC on February 13, 2017 for the calendar year ended on December 31, 2016. The Vanguard Group, Inc. has the sole power to vote or direct the vote of 77,553 of the Class A Shares, the shared power to vote or direct the vote of 10,492 of the Class A Shares, the sole power to dispose of or to direct the disposition of 4,764,862 Class A Shares and the shared power to dispose or to direct the disposition of 84,317 Class A Shares. The address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.
   (3) Information regarding Franklin Mutual Advisers, LLC is based solely on the 13G filed with the SEC on February 3, 20167 for the calendar year ended December 31, 2016. Franklin Mutual Advisers, LLC has the sole power to vote or direct the vote of 4,297,768 of the Class A Shares and the sole power to dispose or to direct the disposition of 4,297,768 of the Class A Shares. The address of Franklin Mutual Advisers, LLC is 101 John F. Kennedy Parkway, Short Hills, NJ 07078-2789.
   (4) Information regarding BlackRock Inc. is based solely on the Amendment to the 13G filed with the SEC on January 27, 2017 for the calendar year ended on December 31, 2016. Blackrock Inc. has the sole power to vote or direct the vote of 3,994,615 of the Class A Shares and the sole power to dispose or to direct the disposition of 4,165,586 of the Class A Shares. The address of BlackRock Inc. is 55 East 52 nd Street, New York, NY 10055.
   (5) Information regarding Dimensional Fund Advisors LP is based solely on the 13G filed with the SEC on February 9, 2017 for the calendar year ended December 31, 2016. Dimensional Fund Advisors LP has the sole power to vote or direct the vote of 3,243,852 of the Class A Shares and the sole power to dispose of or to direct the disposition of 3,328,599 Class A Shares. The address of Dimensional Fund Advisors LP is Building One, 6300 Bee Cave Road, Austin, TX 78746.
   (6) Shares listed for each Executive Officer and Director includes: (i) shares owned by the individual; (ii) restricted shares units that will vest within 60 days of February 28, 2017; and (iii) shares subject to options that are exercisable, regardless of whether the exercise price is above or below our share price, within 60 days of February 28, 2017. Restricted share units that will vest within 60 days include: 4,906 for all Executive Officers and Directors as a group. Shares subject to options that are exercisable within 60 days include: Thomas Casey, 357,407; John D. Romano, 141,300; Willem Van Niekerk, 141,168; Jean-Francois Turgeon, 33,333; and 736,993 for all Executive Officers and Directors as a group. None of these options contain an exercise price lower than our share price as of February 28, 2017.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our Directors and executive officers, among others, to file with the SEC and NYSE an initial report of ownership of our stock on Form 3 and reports of changes in ownership on Form 4 or Form 5. Persons subject to Section 16 are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file. As a matter of practice, our staff assists our executive officers and Directors in preparing initial ownership reports and reporting ownership changes, and typically files those reports on their behalf. Based solely on a review of the copies of such forms in our possession and on written representations from reporting persons, we believe that during fiscal year 2016 all of our covered officers and Directors filed the required reports on a timely basis under Section 16(a), except that due to inadvertent errors, certain reports and transactions were not timely filed. The number of late reports and transactions are as follows: Mxolisi Mgojo (1 report, 1 transaction).

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have service level agreements with Exxaro for research and development that expire in 2017. We also had service level agreements with Exxaro for services such as tax preparation and information technology which expired during 2015. Such service level agreements amounted to expenses of $1 million, $2 million, and $3 million during 2016, 2015 and 2014, respectively, which was included in “Selling general and administrative expense” in the Consolidated Statements of Operations. Additionally, we have a professional service agreement with Exxaro related to the Fairbreeze construction project. We made payments to Exxaro of $2 million during 2016 and $3 million each in 2015, and 2014, which was capitalized in “Property, plant and equipment, net” in our consolidated balance sheets set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. At December 31, 2016 and 2015, we had less than $1 million and $1 million, respectively, of related party payables, which were recorded in “Accounts payable” in our consolidated balance sheets set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

We hold a membership in ANSAC, which is responsible for promoting exports of US-produced soda ash. Under the ANSAC membership agreement, Alkali’s exports of soda ash to all markets except Canada, the European community, the European Free Trade Association and the Southern African Customs Union are exclusively through ANSAC. Certain sales and marketing costs incurred by ANSAC are charged directly to us. Selling, general and administrative expenses in the Consolidated Statement of Operations include amounts charged to us by ANSAC principally consisting of salaries, benefits, office supplies, professional fees, travel, rent and certain other costs, which amounted to $4 million and $3 million for 2016 and 2015, respectively. During 2016 and 2015, we recorded net sales to ANSAC of $276 million and $210 million, respectively, which was included in “Net sales” in the consolidated statements of operations set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. At December 31, 2016 and 2015, we had $60 million and $47 million, respectively, of related party receivables from ANSAC which were recorded in “Accounts receivable, net of allowance for doubtful accounts” in our consolidated balance sheets set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. At December 31, 2016 and 2015, we had related party payables due to ANSAC of $1 million and $2 million, respectively, recorded in “Accounts payable” in our consolidated balance sheets set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Additionally, during 2016 and 2015, “Cost of goods sold” in the consolidated statements of operations set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 included $4 million each of charges to us by ANSAC for freight costs incurred on our behalf. We did not have a liability to ANSAC at December 31, 2016 and $1 million of liabilities in 2015 for freight costs incurred on our behalf, included in “Accounts payable” in the consolidated balance sheets set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

The Company has adopted a written Related Person Transaction Policy that is administered by the Corporate Governance Committee. A copy of the Company’s Related Person Transaction Policy can be found on the Company’s website, http://www.tronox.com , under “Investor Relations - Corporate Governance.”

The Related Person Transaction Policy applies to any transaction or series of transactions in which the Company or a subsidiary is a participant, the amount involved exceeds $120,000, and a related person has a direct or indirect material interest. Related persons subject to the policy include executive officers, Directors, nominees for election as a Director, owners of more than 5% of our total equity, and any members of the immediate family of any of the foregoing persons. The Related Person Transaction Policy also applies in respect of transactions which would involve the Company giving a financial benefit to related parties where, under the related party transaction provisions of Australia’s Corporations Act, the benefit could be given only with shareholder approval. Under the Related Person Transaction Policy, Company management determines whether a transaction requires review by the Corporate Governance Committee, and transactions requiring review are referred to the Corporate Governance Committee for approval, ratification or other action. Based on its consideration of all of the relevant facts and circumstances, the Corporate Governance Committee decides whether or not to approve such transactions and approves only those transactions that are deemed to be in the best interests of the Company. The Related Person Transaction Policy also contains a list of certain categories of related person transactions that are pre-approved under the Related Person Transaction Policy, and therefore need not be brought to the Corporate Governance Committee for further approval, unless the transaction would require shareholder approval under Australia’s Corporations Act. If the Company becomes aware of an existing transaction with a related person that has not been approved under this policy, the matter is referred to the Corporate Governance Committee. The Corporate Governance Committee then evaluates all options available, including ratification, revision or termination of such transaction.

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PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We are asking shareholders to ratify the appointment of PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm.

The accounting firm of PwC has been selected as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2017. Although the selection of PwC does not require ratification, the Board of Directors has directed that the appointment of PwC be submitted to the shareholders for ratification because we value our shareholders’ views on the Company’s independent registered public accounting firm and as a matter of good corporate governance. A representative of PwC will be present at 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.

The affirmative vote of holders of a majority of ordinary shares cast at the Annual Meeting is required to ratify the appointment of PwC as the Company’s independent registered public accounting firm.

The accompanying proxy will be voted for the ratification of PwC as the Company’s independent registered public accounting firm unless the shareholder indicates to the contrary on the proxy.

The Board of Directors recommends that shareholders vote “FOR” the ratification of the appointment of PwC as the Company’s independent registered public accounting firm for 2017

Fees Paid to Independent Registered Public Accounting Firm

The Audit Committee selected PwC as our independent auditors to audit our financial statements and our internal control over financial reporting for the years ended December 31, 2016 and 2015, as well as for the year ending December 31, 2017. The following table shows the fees for professional services rendered by PwC for the audit of the Company’s annual financial statements for the years ended December 31, 2016 and 2015, respectively, and fees billed for other services rendered by PwC during those periods:

 
2016
2015 (5)
Audit Fees (1)
$
8,146,260
 
$
9,927,131
 
Audit Related Fees (2)
 
950,736
 
 
182,848
 
Tax Fees (3)
 
2,247,948
 
 
392,653
 
All Other Fees (4)
 
11,041
 
 
3,954
 
Total Fees
$
11,355,985
 
$
10,506,586
 
   (1) Fees for professional services performed for the integrated audit of the Company’s annual consolidated financial statements and review of financial statements included in the Company’s Form 10-K and 10-Q filings, and other services that are normally provided in connection with statutory and regulatory filings or engagements.
   (2) Fees for services performed that are reasonably related to the performance of the audit or review of the Company’s financial statements. This may include employee benefit and compensation plan audits, any acquisition-related audit work, and attestations that are required by statute or regulation.
   (3) Fees for professional services performed with respect to tax compliance, tax advice and tax planning. This includes preparation of original and amended tax returns for the Company and consolidated subsidiaries, refund claims, payment planning and tax audit assistance.
   (4) Fees for other permitted work performed that does not fall within the categories set forth above.
   (5) In addition to the 2015 audit fees noted above, Grant Thornton billed 2015 audit and review fees totaling $50,000. Grant Thornton previously served as the Company’s independent registered public accounting firm through the fiscal year ended December 31, 2013.

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PROPOSAL 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Under the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed by our independent accountants must be approved in advance by the Audit Committee to assure that such services do not impair the accountants’ independence from the Company. Accordingly, all audit and non-audit services provided by PwC to us must be pre-approved in advance by our Audit Committee unless the following conditions are met:

The service is one of a set of permitted services that the independent registered public accounting firm is allowed to provide; and,
The services must be brought to the attention of the Audit Committee and approved prior to the completion of the annual audit.

All other permitted services must be pre-approved by either the Audit Committee or a delegate of the Audit Committee. If pre-approval is obtained from a delegate of the Audit Committee, the service may be performed provided that the service must be presented to the Audit Committee at the next scheduled meeting. In 2016 and 2015, all of the fees paid to our independent auditors were approved in advance by the Audit Committee.

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REPORT OF THE AUDIT COMMITTEE

In accordance with its charter, the Audit Committee assists the Board in fulfilling its responsibility for oversight of the Company’s accounting and financial reporting processes and its internal and external audit processes. The Audit Committee has implemented procedures to ensure that it devotes the attention necessary to each of the matters assigned to it under its charter.

In discharging its oversight responsibility, the Audit Committee has reviewed and discussed the Company’s audited consolidated financial statements and related footnotes and the effectiveness of the Company’s internal control over financial reporting for the fiscal year ended December 31, 2016 and the independent registered public accounting firm’s report on those financial statements and report on the Company’s internal control over financial reporting, with our management and with PwC our independent registered public accounting firm. Management represented to the Audit Committee that our financial statements were prepared in accordance with generally accepted accounting principles (“GAAP”). The Audit Committee has discussed with PwC the matters required to be discussed under Auditing Standard No. 1301, “Communications with Audit Committees,” adopted by the Public Company Accounting Oversight Board.

The Audit Committee recognizes the importance of maintaining the independence of the Company’s independent registered public accounting firm. Consistent with its charter, the Audit Committee has evaluated PwC’s qualifications, performance, and independence, including that of the lead audit partner. The Audit Committee has received and reviewed the written disclosures and the letter from PwC required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee, and has discussed with PwC, its independence from the Company.

Based on the review and discussions described above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, for filing with the SEC.

AUDIT COMMITTEE

Andrew P. Hines (Chairman)
Daniel Blue
Jeffry N. Quinn

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Overview

The following Compensation Discussion and Analysis (“CD&A”) provides a detailed description of our executive compensation philosophy and programs, the decisions that the HRCC have made under those programs, and the factors considered in those decisions. This CD&A focuses on the compensation of the following individuals for the 2016 fiscal year that we refer to collectively as our “NEOs”.

NAME
AGE (2)
TITLE
Thomas Casey
65
Chairman of the Board and Chief Executive Officer
Timothy C. Carlson
52
Senior Vice President and Chief Financial Officer
Jean-François Turgeon
51
Executive Vice President, President of Tronox Titanium Dioxide
John D. Romano
52
Senior Vice President and Chief Commercial Officer, Tronox Titanium Dioxide
Willem Van Niekerk
57
Senior Vice President, Strategic Planning and Business Development
Katherine C. Harper (1)
54
Former Senior Vice President and Chief Financial Officer
   (1) Resigned effective September 30, 2016
   (2) As of March 1, 2017

Set forth below is a description of the backgrounds of our NEOs. Each of Mr. Casey, Mr. Romano and Dr. Van Niekerk joined Tronox Limited on June 15, 2012 upon completion of the Exxaro Transaction. Mr. Turgeon joined the Company as of January 1, 2014 and Mr. Carlson joined the Company as of October 31, 2016. Ms. Harper joined the Company on September 16, 2013 and departed on September 30, 2016. There are no family relationships among any of our NEOs.

Thomas Casey
Chairman of the Board and Chief Executive Officer

Mr. Casey’s biographical information is set forth under the caption “—Election of Class A Directors and Class B Directors,” above.

Timothy C. Carlson
Senior Vice President and Chief Financial Officer

Mr. Carlson joined Tronox on October 31, 2016. Prior to joining Tronox, Mr. Carlson served as Chief Financial Officer of Precision Valve Corporation, a private equity-owned business based in Rye Brook, N.Y. since July 2015. Prior to this position, Mr. Carlson served as the Executive Vice President, Chief Financial Officer and Treasurer of ATMI, Inc., a publicly traded company headquartered in Danbury, Conn. from September 2007 to May 2014 when the company was sold to Entegris, Inc. Earlier in his career Carlson held a series of finance, strategic planning, and auditing roles at various divisions of Campbell Soup Company, including sites in Camden, N.J., Norwalk, Conn., and Sydney, Australia. Mr. Carlson holds a Bachelor of Science degree in economics from the University of Pennsylvania, Wharton School of Business, and is a Certified Public Accountant.

Jean-François Turgeon
Executive Vice President, President of Tronox Titanium Dioxide

Mr. Turgeon has been our Executive Vice President, President of Tronox Titanium Dioxide with responsibility for global production and marketing of titanium dioxide since January 2014 and shared responsibility for Global Procurement. Prior to joining Tronox, Mr. Turgeon worked for Rio Tinto Group for 24 years, serving most recently as the managing director of its titanium dioxide business. He is also the former chairman of Richards Bay Mineral in South Africa and Rio Tinto, Fer et Titane, in Canada. Mr. Turgeon holds a Bachelor’s degree in chemical engineering from Université Laval and a Master’s degree in hydrometallurgy from McGill University.

John D. Romano
Senior Vice President and Chief Commercial Officer, Tronox Titanium Dioxide

Mr. Romano has been our Senior Vice President and Chief Commercial Officer of Titanium Dioxide since October 2014. Before that he served as our Senior Vice President and President, Pigment and Electrolytic Operations from June 15, 2012 to October 2014; the Executive Vice President of Tronox Incorporated since

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January 1, 2011 and Vice President, Sales and Marketing of Tronox Incorporated since January 2008. Mr. Romano was an executive officer of Tronox Incorporated during its bankruptcy proceedings, from which it emerged in 2011. Before that he served as Vice President, Sales for Tronox Incorporated from 2005 to January 2008; Vice President, Global Pigment Sales for Tronox LLC from January 2005 to November 2005; Vice President, Global Pigment Marketing for Tronox LLC from 2002 to 2005 and Regional Marketing Manager for Tronox LLC from 1998 to 2002. Mr. Romano holds a Bachelor’s degree in Accounting from Oklahoma State University.

Willem Van Niekerk
Senior Vice President, Strategic Planning and Business Development

Dr. Van Niekerk has served as our Senior Vice President, Strategic Planning and Business Development since June 15, 2012. Prior to joining Tronox Limited upon completion of the Exxaro Transaction, he served as the Executive General Manager of Corporate Services for Exxaro, which includes the mineral sands business, since May 2009, where he was responsible for Exxaro’s technology, research and development, information management and supply chain management departments. Prior to that, he served as Manager of Growth for Exxaro’s mineral sands and base metals business and as General Manager for Marketing and Business Development for Exxaro’s mineral sands and base metals business. Dr. Van Niekerk co-managed the Tiwest Joint Venture from 2006 to 2008. He oversaw the design and development of the titanium smelting technology for the slag furnaces at KZN Sands. Dr. Van Niekerk has a PhD in pyrometallurgy from the University of Pretoria.

Shareholder Outreach and Response to the 2016 ‘Say-on-Pay’ Vote

At our 2016 Annual Meeting of Shareholders, our advisory vote on NEO compensation, referred to as our “Say-on-Pay” vote, passed, but only because holders of Class A and Class B ordinary shares voted together as a single class. The 2016 vote outcome represented the second year in a row where we did not receive the approval from a majority of our Class A shareholders with respect to Say-on-Pay.

The 2016 Say-on-Pay vote, along with the comments made by ISS and Glass Lewis prior to the 2016 Annual Meeting of Shareholders, was taken seriously by the Company, the Board of Directors and the HRCC. As a result of the low Say-on-Pay vote, the Company proactively reached out to our Class A shareholders holding approximately 56% of the Class A ordinary shares. In those discussions, which primarily occurred telephonically with participation from our head of investor relations and our CEO and Chairman of the Board, for certain of the calls, we reviewed our shareholder opinions on our governance, compensation and equity plans as well as the comments made by proxy advisory firms that had published their opinions on these matters. On June 1, 2016, we publicly announced that the Board had made certain changes in its governance and had authorized the retention by the Company of compensation/governance consultants to provide both a review of its existing programs and practices as well as ongoing advice on these matters.

The Board has independently considered the points articulated by Class A shareholders and proxy advisory firms. Thereafter, the Board changed the corporate governance and compensation policies and procedures that were in its power to change. As discussed further in the section entitled “Corporate Governance of the Company” found on page 14 of this Proxy Statement, in 2016, the Board took the following significant actions: (i) amended our Equity Incentive Plan to (a) require shareholder approval for repricing of options; (b) restrict liberal share recycling; and (c) include a default provision for double trigger vesting of equity awards in the context of a change of control; (ii) amended the Company’s Corporate Governance Guidelines to limit the number of public company boards on which our directors may serve; and (iii) elected a lead independent director with meaningful responsibilities. Moreover, we proposed, and at a special meeting of shareholders received the required affirmative vote to require that Class A directors will only be re-elected in uncontested elections if they receive a majority of the Class A shareholder votes that are cast. The new majority voting standard will be applicable to the re-election of all the Class A directors at the 2017 Annual Meeting.

In addition, and again as a result of considering the feedback received from our Class A shareholders and proxy advisory firms, the Board of Directors and the HRCC made several significant changes to our executive compensation program for the 2017 fiscal year.

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Below are the highlights of what we heard and how we responded:

What we heard…
How we responded…
ð
The HRCC members have served for the past three years during which time the Company has received a significant level of disapproval on the advisory say-on-pay vote.
Effective May 25, 2016, the composition of the HRCC was reconstituted as follows:
 
Ilan Kaufthal, Chairman
 
 
 
 
Daniel Blue
 
 
 
 
Wayne A. Hinman
ð
Given the level of disapproval the committee should have taken the initiative to improve the Company’s pay practice and programs.
On May 25, 2016, the Board authorized the retention of a compensation/governance consultant to review and recommend appropriate modifications to the Company’s existing executive compensation program.
ð
The Company has not disclosed shareholder engagement efforts.
We revised this year’s Proxy Statement to provide greater transparency on our shareholder outreach efforts.
ð
Need for greater clarity regarding the Company’s compensation plans, specifically:
We revised this year’s Proxy Statement to provide greater clarity regarding our compensation philosophy, the link between short-term and long-term pay and value creation, and how the compensation plans fit within the Company’s long-term strategy.
 
How the compensation plans fit into the Company’s long-term strategy;
 
How and why the performance metrics and targets were established; and,
We revised our compensation peer group to better reflect companies with similar quantitative and qualitative characteristics.
 
How the compensation peer group was selected.
ð
Connection among compensation, financial performance and shareholder returns was not clear and did not appear to be aligned with the experience of shareholders.
For 2017, 100% of the performance-based RSUs granted under the Company’s LTIP will be tied to our ranking of total TSR versus the companies in the 2017 Peer Group (as defined elsewhere in this CD&A) over a three-year measurement period. We believe this metric will better focus our NEOs on the achievement of long-term growth in the business and building shareholder value. This metric will replace the cumulative cash generation metric used in 2016 for our performance-based RSU awards.
ð
The link between payouts in the short-term incentive plan resulting from achievement of specific management objectives and overall compensation was not explained sufficiently to enable an understanding of the connection with longer-term shareholder returns.
We revised this year’s Proxy Statement to provide increased disclosures on achievement of individual management objectives and the results on overall compensation.

How Executive Pay is Linked to Company Performance

Our executive compensation program is aligned with our business strategy and with creating long-term shareholder value by paying for performance consistent with an acceptable risk profile. The foundation of our compensation philosophy is to:

Promote creation of long-term shareholder value;
Recruit and retain qualified high performing executive officers;
Motivate high levels of performance; and,
Offers compensation that is competitive in the marketplace.

Our executive compensation program emphasizes delivering compensation at a competitive market level which will allow executive officers who demonstrate consistent on-target performance over a multi-year period to earn compensation that is competitive and consistent with targeted performance levels of total

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compensation. For executives where performance is above target over the long term, we believe the program will reward above the competitive median. Conversely, the program will provide less than the annual target compensation when performance does not meet expectations. Individual executive compensation may be above or below the annual target level, based on the Company’s performance; economic and market conditions; the individual’s performance, contribution to the organization, experience, expertise, and skills; and other relevant factors. For fiscal year 2016, we believe our executive compensation was aligned with our overall Company performance as we delivered on the cost reduction and working capital reduction program which we previously announced to shareholders and believe we are on target to achieve the $600 million of cumulative cash generation by the end of 2017. Additionally, although the TiO2 industry in the first half of the year continued to experience challenging macro-economic conditions, by the end of the year our share price increased from $3.91 on December 31, 2015 to $10.31 on December 31, 2016.

Summary of our Executive Compensation Program

Our Executive Compensation Practices. Set forth below is a summary of our key executive compensation practices.

We seek and carefully consider shareholder feedback regarding our compensation practices
We strive to link our executive compensation to our performance:
82% of the target compensation for the CEO and 69% of the target compensation for other NEOs is “at-risk”.
We select metrics in our short-term incentive plan that focus our CEO and other NEOs and the organizations they lead on achieving key annual financial and operational goals and objectives that drive overall performance that are expected to drive long-term shareholder value. Our short-term incentive plan also has an individual performance metric whereby our CEO and other NEOs performance is measured against pre-defined objectives.
Metrics in our long-term incentive plan focus our CEO and other NEOs on achieving three-year financial goals that are expected to lead to increased shareholder value; annual grants with overlapping performance periods reward sustained performance over the long-term.
For our CEO, 80% of targeted 2016 short-term incentive plan payout is linked to overall Tronox results including adjusted EBIDTA; cumulative cash generation; safety; and culture, people and integration metrics.
For other NEOs, between 40% and 60% of targeted 2016 short-term incentive plan payout is linked overall Tronox results including adjusted EBIDTA; cumulative cash generation; safety; and culture, people and integration metrics.
50% of the annual long-term equity awards are performance-based RSUs that vest following the end of the three-year performance period based on Company performance during the period. For performance-based RSUs granted in the 2016 fiscal year, 75% were allocated to a cumulative cash generation metric and 25% were allocated on relative TSR performance.
50% of the annual long-term equity awards are time-based RSUs that vest over a three-year time period. These time-based RSUs are intended to incentivize executives to create shareholder value through share price appreciation, and provide an employee retention incentive.
Metrics and targets for both the short-term and long-term incentive plans are based on the Company’s strategic and business plans and annual budgets that are reviewed by the full Board and are analyzed and tested for reasonableness by the HRCC at the beginning of the performance period. The HRCC actively evaluates the appropriateness of the financial measures used in incentive plans and the degree of difficulty in achieving specific performance targets.

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Peer group appropriateness
As discussed in further detail elsewhere in this CD&A, in November 2016, the HRCC reviewed and revised the Company’s peer group to provide a mix of companies which the HRCC believes provides a better aggregate benchmark.
Our 2017 benchmarking compensation peer group includes 15 companies that the Committee believes reflect more appropriate industry, size, geographic scope, and market dynamics.
We are positioned at approximately the 45 th percentile of revenue within the new compensation peer group.
No re-pricing of stock options
Independent compensation consultants
The Committee directly retained Lyons, Benenson & Company Inc., (“LBC”) for part of 2016 and Frederic W. Cook & Co. (“FW Cook”) for the balance of 2016. Neither LBC of FW Cook provided any other services to the Company.

2016 Business Performance & Accomplishments

Our 2016 accomplishments included:


1. Please refer to “Management’s Discussion & Analysis of Financial Condition and Results of Operations – Non-U.S. GAAP Financial Measures” on page 60 of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2017, for a reconciliation of adjusted EBITDA to the most directly comparable U.S. GAAP financial measures.

2. Please refer to our Fourth Quarter 2016 Earnings Release filed as Exhibit 99.1 to our Form 8-K filed with the SEC on February 21, 2017, for a reconciliation of free cash flow to the most directly comparable U.S. GAAP financial measures.

In addition, our TiO 2 operational excellence program generated aggregate cash of $298 million sourced from $156 million of cost reductions and $142 million of working capital reductions in 2016. Furthermore, on February 21, 2017, we announced a definitive agreement to acquire the TiO2 business of Cristal, a privately held global chemical and mining company, for $1.673 billion of cash, subject to a working capital adjustment at closing, plus 37,580,000 Class A ordinary shares (the “Cristal Transaction”).

Notwithstanding that we believe 2016 marked the recovery in global TiO 2 markets, as a result of the challenging macro-economic conditions the TiO 2 industry has experienced over the past few years and a cyclical trough which we believe reached its low point in mid-2016, our share price and market capitalization have been deeply impacted over the past three years. Our share performance during the second half of 2016 reflected the improving market conditions for the TiO 2 industry and the margin benefits of our cost reductions resulting from our multi-year program to reduce spending while simultaneously increasing quality and production volume. The share price of our Class A ordinary shares listed on the NYSE at the close of business on December 30, 2015 was $3.91 as compared with a share price of $10.31 as of the close of business on December 31, 2016. As a result, our Total Shareholder Return (“TSR”) for 2016 was a positive 179.6% (with dividends reinvested). However, our cumulative three-year TSR was a negative 45.0% (with dividends reinvested) which reflects the performance of our shares as the average global price for our TiO2 products decreased by almost $2,000/ton (almost 50%). As of February 28, 2017, our current Directors and executive officers, as a group, beneficially own approximately 2.6 million, or approximately 4%, of our listed Class A ordinary shares and have also experienced the impact of these challenging industry conditions.

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The Executive Compensation Process

Role of the Human Resources and Compensation Committee. The HRCC administers our executive compensation program and assists the Board of Directors in fulfilling its oversight responsibilities with respect to the compensation of executive officers and our non-employee Directors. Among its other duties, the HRCC:

Evaluates and determines the salary, incentives, and benefits making up the total compensation of our CEO, other NEOs and other executive officers;
Reviews and monitors management succession planning and development, including promotability of all officers;
Defines the terms and conditions, including performance metrics, for the stock options, restricted shares/units, and other long-term equity awards for our executive officers and reviews and approves all grants made to the executive officers;
Reviews and approves the annual corporate goals and objectives of our CEO; and,
Considers industry conditions, relevant market conditions and our prospects and achievements when making recommendations with respect to compensation matters.

The HRCC cannot delegate this authority and regularly reports its activities to the Board.

The HRCC is comprised of three members, each of whom is independent as defined by SEC rules and NYSE listing standards and is a “non-employee director” as defined in Rule 16b-3 under the Exchange Act and an “outside director” as defined in Section 162(m) of the Internal Revenue Code. Currently, the members of the Committee are Ilan Kaufthal, Chairman, Wayne A. Hinman, and Daniel Blue.

The HRCC operates pursuant to a written charter (available on Tronox’s website at www.tronox.com , under “Investor Relations – Corporate Governance”) which is reviewed by the Committee on an annual basis and approved by the Board. The HRCC meets at least quarterly and more frequently as circumstances require, including in executive session with the Committee’s independent compensation consultant.

The HRCC has targeted compensation at the median of benchmark statistics provided by our independent compensation consultant (described below) for each element of total compensation (base, annual incentive and long-term incentives). The actual pay level for each executive officer may vary from these targeted levels based on experience, the scope and complexity of his or her role, job performance and company performance. The compensation of our CEO must also be reviewed by the non-employee, independent members of the Board of Directors. When making recommendations with respect to our executive officers other than CEO, the HRCC considers the recommendations made by the CEO and his evaluation of the other executive officers’ performance.

Elements considered by the HRCC and our CEO when reviewing the Company’s performance include: share price, the Company’s performance as measured against the performance goals established for the previous year, non-controllable events that may impact the Company’s performance, attainment of significant non-financial milestones and any other factors or goals it determines to be relevant to measuring the Company’s performance. The individual performance of our executive officers is measured against individual performance goals that were set for each executive officer by our CEO.

Use of Compensation Consultants. The HRCC has the sole authority to hire and terminate its consultant, approve its compensation, determine the nature and scope of its services, and evaluate its performance. During 2016, the HRCC engaged both LBC and FW Cook at different times as its compensation consultant to provide information to the HRCC to assist it in making determinations regarding our compensation programs for executives and non-employee Directors.

In February 2016, LBC provided the HRCC with among other things, a competitive pay analysis comparing the compensation of our executive officers against benchmark compensation statistics, 2016 program design advice and an independent review of 2016 compensation proposals developed by management.

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During 2016, in carrying out their assignments, LBC and FW Cook interacted with management when necessary and appropriate and, in their discretion, met with management regarding their consulting work prior to presentation to the HRCC in order to confirm alignment with our business strategy, and identify data questions or other similar issues, if any. A representative from LBC or FW Cook attended HRCC meetings in 2016 when requested, and neither LBC nor FW Cook performed any other services for the Company or its management other than that described above.

The HRCC’s independent compensation consultant provides information and data to the HRCC from its surveys, proprietary databases and other sources, which the HRCC utilizes along with information provided by management and obtained from other sources. In making its decisions, the HRCC reviews such information and data provided to it by its independent compensation consultant and management and also draws on the knowledge and experience of its members as well as the expertise and information from within the Company, including from the human resources, legal, and finance groups. The HRCC considers executive and Director compensation matters at its quarterly meetings and at special meetings as needed based on our annual compensation schedule.

In connection with its engagements of LBC and FW Cook, the HRCC considered various factors bearing upon LBC and FW Cook’s independence including, but not limited to, the amount of fees received by LBC and FW Cook from Tronox as a percentage of LBC and FW Cook’s respective total revenue, LBC and FW Cook’s policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship that could impact either LBC or FW Cook’s independence. After reviewing these and other factors, the HRCC determined that both LBC and FW Cook were independent and that their respective engagements did not present any conflicts of interest. LBC and FW Cook also determined that they were independent from management and confirmed this in written statements delivered to the Chairperson of the HRCC.

CEO’s Role in the Compensation-Setting Process. At an HRCC meeting early in the year, the CEO makes recommendations to the HRCC regarding compensation for the executive officers other than himself. The CEO participates in the HRCC discussion at the HRCC’s request to provide background information regarding our strategic objectives and to evaluate the performance of and make compensation recommendations for the executive officers. The HRCC utilizes the information provided by the CEO along with other information from within the Company, input from its independent compensation consultant, and the knowledge and experience of the Committee members in making compensation decisions. The Chair of the HRCC recommends the CEO’s compensation to the Committee in executive session, not attended by the CEO.

Annual Evaluation. At the end of the fiscal year, the CEO completes a self-evaluation of his own performance and reviews his evaluation with the HRCC. The full board also provides input on the CEO’s performance and submits this to the Chairman of the HRCC for consolidation. The HRCC consolidates all input and the Chairman of the HRCC and the Chairman of the Corporate Governance Committee discuss the Board’s assessment of the CEO’s performance. The HRCC also determines the incentive amount, long-term incentive award, and any base salary change for the CEO.

In addition, each executive officer completes a self-evaluation for his own performance and reviews his evaluation with the CEO. The CEO then summarizes these results and brings them to the HRCC along with his initial recommendation for each executive’s base salary increase, annual incentive award, and long-term incentive award. The HRCC will then determine the amounts for any base salary increase and annual and long-term incentive awards for each executive officer.

Performance Objectives. At the beginning of the year, our CEO recommended, and the HRCC approved performance objectives for the 2016 fiscal year based, in part, on an active dialogue with the CEO regarding strategic objectives and performance targets for the Company. Metrics are tied to our strategic business plans and to annual budgets reviewed by the full Board. Short-term management objectives are designed to achieve specific goals that are expected to drive long-term shareholder value. Metrics are analyzed and tested for reasonableness prior to HRCC approval at the beginning of the performance period. The Committee actively evaluates the appropriateness of the financial measures used in incentive plans and the degree of difficulty in achieving specific performance targets.

Competitive Market Overview. Our executive compensation program is designed to be competitive within the various marketplaces in which we compete for employees. While the HRCC does not believe that it is

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appropriate to establish compensation levels based solely on benchmarking, it believes that information regarding pay practices at peer companies is useful in two respects. First, the HRCC recognizes that our compensation practices must be competitive in the marketplace, and reviewing market pay practices provides a framework for assessing competitiveness. Second, marketplace information is one of the many factors that the HRCC considers in assessing the reasonableness of compensation. Although the HRCC considers compensation levels for executive officers of other companies, it does not mechanically apply the data but rather engages in a rigorous quantitative and qualitative review and weighing of the competitive information with other Company and individual performance factors, such as our specific business strategy, financial situation, and performance, in making its compensation determinations.

With the input of its independent compensation consultant, the HRCC reviews the peer group annually and revises such group as appropriate. We endeavor to identify companies that are comparable to our core businesses as well as comparable from a size perspective. As a result of the HRCC’s annual review in November 2015, the Peer Group of companies used by the HRCC in benchmarking fiscal year 2016 pay determinations remained unchanged from the 14 companies used in fiscal year 2015. This peer group has been used for other compensation and performance metrics since the beginning of 2014.

The fiscal year 2016 Compensation Peer Group (the “2016 Peer Group”) consisted of the 14 publicly-traded companies listed below:

Albemarle Corp.
Cabot Corp.
Celanese Corp.
Chemtura Corp.
Cliffs Natural Resources, Inc.
Cytec Industries, Inc.
Eastman Chemical Company
Huntsman Corp.
IAMGOLD Corp.
Kronos Worldwide, Inc.
Southern Cooper Corp.
Teck Resources Ltd.
Walter Energy, Inc.
Yamana Gold Inc.

As show below, our revenue and number of employees were below the median and our market capitalization was below the 25 th percentile of the 2016 Peer Group companies.

($ in millions)
Revenue (1)
Market Cap (2)
Employees (3)
75th Percentile
$
5,605
 
$
9,725
 
 
10,756
 
Median
 
3,015
 
 
3,977
 
 
6,904
 
25th Percentile
 
1,781
 
 
2,005
 
 
4,110
 
 
 
 
 
 
 
 
 
 
 
Tronox Limited
$
2,122
 
$
1,091
 
 
4,400
 
Tronox's Percent Rank
 
40
%
 
3
%
 
26
%

Data Source: S&P Capital IQ

   (1) Represents most recently reported four quarters
   (2) As of September 30, 2016
   (3) Represents most recently disclosed fiscal year

In November 2016, with the assistance FW Cook, the HRCC conducted its annual review of the 2016 Peer Group. Based on this review, the HRCC determined we should exclude six companies from the 2016 Peer Group: Cytec Industries, Inc. (acquired by Solvay SA in December 2015), IAMGOLD Corp. (incompatible business fit), Kronos Worldwide, Inc. (externally managed by parent company), Southern Copper Corp. (does not grant equity awards to executives and incompatible size fit) Walter Energy, Inc. (delisted from NYSE in July 2015 and did not file a proxy in 2016), and Yamana Gold Inc. (incompatible business fit).

As an eight-company peer group may not result in a statistically significant number of matches to provide meaningful results or could yield compensation values that are too volatile, FW Cook undertook a review to identify potential peer group candidates. The methodology used was as follows:

Screening focused on size and business comparability;
GICS sector, location, and CIGC sub-industry screens were used to identify companies in related industries and similar geographical markets. CIGS sub-industries included: (a) commodity chemical; (b) diversified chemicals; (c) specialty chemicals; (d) diversified metals and mining; (e) gold; (f) silver; and, (g) steel;

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Revenue and market capitalization were used to identify companies of similar size (approximately 0.4x to 2.5x that of Tronox). Revenue ranges were approximately $850 million to $5.3 billion and market capitalization ranged from $300 million to $1.9 billion; and
Companies that met the size criteria were then screened to determine reasonableness in terms of business fit.

Based on this screening process, the HRCC approved the addition of seven new companies to the peer group: A. Schulman, Inc.; The Chemours Company; Ferro Corp., Koppers Inc.; Materion Corp; SunCoke Energy; and, Tredegar Corp. The HRCC determined that:

such companies align better with Tronox’s size based on revenue, market cap, and number of employees (the proposed peer group is at the 45 th , 34 th and 42 nd percentiles, respectively, as of September 30, 2016);
that the addition of The Chemours Company and the continued inclusion of Huntsman Corp. are appropriate, because although both companies are larger in size, such companies represent the only U.S.-based TiO2 companies that are our direct competitors and utilize equity awards to reward their executive officers. As such, we believe we compete with both Chemours and Huntsman for executive talent; and,
such group, as a whole, continues to represent a reasonable match to Tronox in business content.

The fiscal year 2017 Compensation Peer Group (the “2017 Peer Group”) consisted of the 15 publicly-traded companies listed below:

A. Schulman, Inc. *
Albemarle Corp.
Cabot Corp.
Celanese Corp.
The Chemours Company *
Chemtura Corp.
Cliffs Natural Resources, Inc.
Eastman Chemical Company
Ferro Corp. *
Huntsman Corp.
Koppers Inc. *
Materion Corp. *
SunCoke Energy Inc. *
Teck Resources Ltd.
Tredegar Corp. *
* Represents new addition for 2017.

As of September 2016, our revenue, market capitalization, and number of employees were between the 25 th and 50 th percentiles of the 2017 Peer Group companies.

($ in millions)
Revenue (1)
Market Cap (2)
Employees (3)
75th Percentile
$
5,514
 
$
6,742
 
 
7,591
 
Median
 
2,463
 
 
2,066
 
 
4,846
 
25th Percentile
 
1,406
 
 
757
 
 
2,569
 
 
 
 
 
 
 
 
 
 
 
Tronox Limited
$
2,122
 
$
1,091
 
 
4,400
 
Tronox's Percent Rank
 
45
%
 
34
%
 
42
%

Data Source: S&P Capital IQ

   (1) Represents most recently reported four quarters
   (2) As of September 30, 2016
   (3) Represents most recently disclosed fiscal year

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Elements of Compensation

These are the components of the 2016 fiscal year executive compensation included in the Summary Compensation Table, and benefits under broad-based benefit plans in which executive officers participate. As described above, we target the median of each element of direct compensation as compared to the 2016 Peer Group (as described under “The Executive Compensation Process – Competitive Market Overview”). We also provide additional benefits and perquisites to be competitive with local practices and with our peer group.

Component
Key Features
Objectives
Principal 2016 Actions
CEO
NEOs
(excluding CEO)
 
 
 
TOTAL DIRECT COMPENSATION
Base Pay
Fixed annual cash amount, paid at regular payroll intervals
   
Reviewed annually and adjusted if needed based on performance and market comparison
Provide a regular source of income at reasonable, competitive levels.
No annual merit increase was given to any NEO.
18% of TDC
   
   
   
31% of TDC
   
   
      
Short-term Incentive (STI)
Performance-based cash compensation opportunity: committee determines payout based on company and business unit performance and levels of individual contributions.
   
Proxy officers participate in the same AIP with our other executives and our other employees.
   
Awards for certain proxy officers are subject to specified limits and contingent on the company satisfying a performance goal under our shareowner-approved Internal Revenue Code Section 162(m) Annual Incentive Plan for Covered Executives.
Focus executive officers and organizations they lead on achieving key annual financial and operational goals and objectives that drive overall performance and reward for successful performance.
AIP payments were calculated using a predetermined formula based on company and business unit performance metrics established at the beginning of the year, plus personal performance results.
   
2016 AIP payments for the NEOs were between 100% and 161% of target.
28% of TDC
   
   
   
   
   
   
   
   
   
   
   
22% of TDC
   
   
   
   
   
   
   
   
   
   
   
Long-term Incentive Plan (LTIP)
Equity-based compensation: amount realized, if any, dependent on company achieving long-range financial goals and sustained or increased stock price.
   
LTIP opportunity delivered through:
Focus proxy officers on achieving and sustaining longer-term business results and reward performance.
   
Performance-based RSUs motivate officers to achieve three-year financial goals that are expected to lead to increased shareholder value; annual grants with overlapping performance periods reward sustained performance over the long-term.
The NEOs (with the exception of Mr. Carlson) received LTIP grants in February 2016 with a grant date fair value, determined at target, ranging from 159% to 332% of base salary, according to established formulas.
   
Amounts actually earned will vary based on stock price and corporate performance.
54% of TDC
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
47% of TDC
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
- Time-based RSUs (50% of total LTIP award):
 
Vest in equal annual installments over a three-year service period.
Award settled in Class A shares of company stock.
Dividends accrue and paid only upon vesting.
- Performance-based RSUs (50% of total LTIP award):
 
Shares eligible for vesting based on achievement of Internal Revenue Code Section 162(m) performance goal and company performance against three-year cumulative cash generation and relative total shareholder return (TSR) goals. Cumulative cash generation performance RSUs comprise 75% of total performance-based RSUs. TSR performance RSUs comprise 25% of total performance-based RSUs. Vest shortly after the end of three-year performance period. Award settled in Class A shares of company stock. Dividends accrue and paid only upon vesting.

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Component
Key Features
Objectives
Principal 2016 Actions
CEO
NEOs
(excluding CEO)
 
 
 
OTHER COMPENSATION
 
 
 
 
Benefits
Additional elements defined by local practice including medical and other insurance benefits, pension and other long-term savings plans, and post-employment compensation.
   
Cost of health and welfare benefits partially borne by employees, including executive officers.
Intended to provide competitive benefits that promote employee health, financial security, and income security in the event of an executive’s involuntary termination.
No significant changes to programs in 2016.
Limited Perquisites
Financial counseling assistance valued at up to $10,000 per year per executive officer.
Intended to provide assistance to executives in making strategic decisions regarding their financial and tax arrangements.
No significant changes to program in 2016.

We combine the aforementioned elements in order to formulate compensation packages that provide competitive pay, reward the achievement of financial, operational and strategic objectives, but do not reward failure to perform on these objectives, and align the interests of our executive officers and other senior personnel with those of our shareholders.

We utilize the particular elements of compensation described above because we believe that it provides a mix of secure compensation, retention value and at-risk compensation which produces short-term and long-term performance incentives and rewards. By following this approach, we provide the executive with a measure of financial security, while motivating him or her to focus on business metrics that will produce a high level of short-term and long-term performance for Tronox that will create value for shareholders. Our compensation mix, which includes short-term and long-term incentives as well as time and performance vesting features, is competitive and reduces the risk of recruitment of our top executive talent by competitors. The mix of metrics used for our annual performance bonus and long-term incentive program likewise provides an appropriate balance between short-term and long-term financial and stock performance. All incentives are intended to be aligned with our stated compensation philosophy of providing compensation commensurate with performance, while targeting pay at approximately the 50 th percentile of the competitive market. For purposes of compensation competitiveness, the competitive market consists of our current peer group as described previously under “The Executive Compensation Process – Competitive Market Overview.”

The HRCC focuses on the total compensation opportunity for each NEO but also on the mix of compensation. A substantial portion of the compensation opportunity beyond base salary is at-risk and must be earned based upon achievement of annual and long-term performance goals. The proportion of compensation designed to be delivered in base salary versus variable pay depends on such NEO’s position and the opportunity for that position to influence performance outcomes; the relative levels of compensation are based on differences in the levels and scope of responsibilities of the NEOs. Generally, the more senior the level of such NEO and the broader his or her responsibilities, the greater the amount of pay opportunity that is variable.

The relationship between fixed and variable pay in our compensation program is illustrated by the following charts, which show (i) the relative portions of base salary, target annual incentive, and target value of equity awards that, in aggregate, comprised the 2016 fiscal year target total direct compensation of our CEO and of our other NEOs, and (ii) the relative portions of base salary, actual annual incentive, and actual grant date value of the equity awards that, in aggregate, comprised the 2016 fiscal year actual total direct compensation of our CEO and our other NEOs.

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Chief Executive Officer – Total Direct Compensation – The 2016 fiscal year


Named Executive Officers other than CEO – Total Direct Compensation – The 2016 fiscal year


AIP – Annual Incentive Plan
LTIP – Time-Based RSUs
LTIP – Performance-Based RSUs

Realizable Compensation

The table below supplements the “Summary Compensation Table” (“SCT”) (which follows this Compensation Discussion and Analysis) and shows the compensation actually realizable in the 2016 fiscal year for the CEO. The primary difference between this supplemental table and the “Summary Compensation Table” is the method used to value the LTIP performance restricted shares / RSUs. The SEC rules require that the grant date fair value of all LTIP performance shares / RSUs be reported in the SCT for the year in which they were granted. As a result, a significant portion of the total compensation reported in the SCT is in the form of grant date “fair value” of LTIP performance shares / RSU awards without discounting for lack of liquidity or risk of loss which are designed to align our management incentives with long-term shareholder value. While the amounts shown in the SCT reflect the grant date “fair value” of equity awards granted to an NEO in the year of the grant, those awards have not vested and the amounts shown in the SCT do not reflect the impact of performance-based metrics or share price performance on realizable pay, which may be considerably more or less based on (i) the actual number of time-based shares / RSUs that vest, (ii) the actual number of performance shares / RSUs that vest during the three-year performance period, and (iii) the impact of actual share price performance on the value of time-based and performance-based shares that vested or were earned during the period. In contrast, the supplemental table below includes only LTIP time and performance-based shares / RSUs that vested or were earned based on actual performance achieved for performance periods completed in the 2016 fiscal year, equity- based compensation included in the table below is valued based on the Company’s share price on December 31, 2016 ($10.31).

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Supplemental Summary Compensation Table

Compensation Component
Period Earned
or To Be
Earned
Amounts Shown in
Summary
Compensation
Table
Realizable Amount
Performance Results
Base Salary
2016
$1,030,000
$1,030,000
The CEO's base salary was unchanged in 2016 and has only been increased by $30,000 since October 2011.
Short-term Incentive
2016
2,395,000
2,395,000
Represents a payout of 155% of target, reflecting both the Company's 2016 performance against the adjusted EBITDA, cumulative cash generation, safety, and culture/people/integration metrics and the level of achievement against personal objectives established by the HRCC for 2016, reduced by $253,000 to reflect the fatality at our South African operation during 2016.
Long-term Incentive - Performance Based
2016-2018
1,804,882
 
February 24, 2016, 318,696 Cumulative Cash Generation performance-based restricted share units granted multiplied by the closing price of our Class A ordinary shares on the grant date of $3.80, plus 106,232 TSR performance-based restricted share units multiplied by the grant date fair value as determined using a Monte-Carlo simulation of $5.59 (147% of the closing price of our Class A ordinary shares on that date of $3.80). The performance-based restricted share units will vest on February 24, 2019 based on the performance against predetermined metrics over the performance period of January 1, 2016 through December 31, 2018.
Long-term Incentive - Performance Based
2013-2015
 
120,142
Represents value of 11,653 shares earned based on actual performance achieved for LTIP performance based restricted shares granted in 2013 with the three year performance period ending December 31, 2015. 81,573 shares were forfeited for failure to meet the performance metrics. Shares valued based on closing share price on December 31, 2016 of $10.31.
Long-term Incentive - Time-based
2017-2019
1,614,730
 
February 24, 2016, 424,929 time-based restricted share units granted multiplied by the closing price of our Class A ordinary shares on the grant date of $3.80. The restricted share units will vest in equal annual portions on February 24, 2017, February 24, 2018 and February 24, 2019, provided Mr. Casey is then providing services to the Company on each such vesting date. Dividends will be accrued until shares vest and paid at that time.
Long-term Incentive - Time-based
2016
 
979,935
Represents the vesting in 2016 of 1/3 of each of the time-based restricted shares / RSUs granted in 2013, 2014 and 2015 (total of 95,047 shares). The Company uses time-based restricted shares / RSUs to retain top talent and further align the interests of management with those of shareholders. The grants vest 1/3 per year over three years. Shares valued based on closing share price on December 31, 2016 of $10.31.
Other Compensation
2016
    436,787
    436,787
Amounts as set out in "All Other Compensation Table"
 
 
$7,281,399
$4,961,864
 

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The following graphs further illustrate the difference between the three-year average SCT compensation and realizable pay of our CEO and other NEOs as of December 31, 2016, based on average of the past three years.


Measurement Definitions
SCT Compensation
Amount as reflected in the “Total” column of the SCT.
Realizable Pay
Sum of (i) annual base salary; (ii) annual cash incentive earned during the period; (iii) performance-based equity awards earned during the performance period; and (iv) time-based equity awards vested during the period. All equity awards are valued based on the Company’s share price at December 31, 2016 ($10.31).

Mr. Casey, who became CEO in October 2011, received a one-time sign-on grant of 250,000 Class A shares that cliff vested in October 2014. This one-time grant, has a realized value of $2.6 million (included in the table above) based on the closing price of the Company’s shares at December 31, 2016 of $10.31. As this was a one-time special grant associated with Mr. Casey assuming the CEO role, and the vesting of which was only conditioned on a time requirement, the Company believes it is appropriate to show a pro-forma comparison of Mr. Casey’s SCT compensation versus realizable pay for the three-years ending December 31, 2016 excluding this special grant. By doing so, the decrease in realizable pay versus reported compensation increases from 27% to 39% which further highlights the impact on his average pay from the failure to achieve certain performance-based metrics and our share price performance during this three-year period.


CEO Highlights

The section entitled “Employment Agreements” found elsewhere in this CD&A sets forth the material compensation terms of Mr. Casey’s amended and restated employment agreement entered into on August 14, 2014. The compensation components of such agreement were determined by the terms of Mr. Casey’s initial employment agreement that was entered into on April 19, 2012 subsequent to Mr. Casey being appointed the Chief Executive Officer of Tronox on October 5, 2011. With the exception of a 3% increase in his base salary in 2014, none of the compensation terms in Mr. Casey’s employment agreement have been changed since it was entered into effective October 2011.

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At the time of Mr. Casey’s appointment to the CEO role, Mr. Casey was Chairman of the Board and was instrumental in identifying, and leading the execution of the acquisition of the mineral sands business of Exxaro, a South African public company listed on the Johannesburg Stock Exchange, in September 26, 2011. The Board determined that the Company needed a CEO with significant understanding and leadership of complex financial and strategic transactions, as well as multi-national business operations, including with respect to the financial, strategic and operational aspects thereof. As a former CEO of multiple companies, as well as a former managing director at Merrill Lynch & Co, and former partner at Skadden, Arps, Slate, Meagher & Flom LLP, Mr. Casey was uniquely qualified to conduct the strategic review of our situation as we emerged from bankruptcy and then to consummate the Exxaro acquisition and integrate their mineral sands business with Tronox’s pigment production business to form the world’s most integrated TiO2 business. Mr. Casey successfully led our efforts to close the Exxaro transaction and further positioned the Company to better withstand the downturn of the TiO2 business. In 2013, Mr. Casey led a financing effort that resulted in our securing a Term Loan and a bond financing on very favorable rates and terms with no maintenance covenants. This financing provided us with a significant low risk cash cushion as our TiO2 market worsened severely. Thereafter, Mr. Casey’s successful leadership in 2015 of the acquisition of the soda ash business from FMC Corporation has generated significant free cash flow and adjusted EBITDA for the Company during a period in which the TiO2 industry experienced challenging macro-economic conditions and a cyclical trough which we believe reached its low point in mid-2016. In addition, as part of the effort to position the Company successfully in this severe market downturn, Mr. Casey implemented a major multi-year cost reduction and cash generation program which is currently on track to generate more than $600 million in cash by the end of 2017. As we previously disclosed, in 2016 alone, this cost reduction program generated aggregate cash of $298 million sourced from $156 million of cost reductions and $142 million of working capital reductions, while simultaneously increasing both quality and production volume. Moreover, Mr. Casey successfully negotiated the signing of a definitive agreement to acquire the TiO2 business from Cristal, a privately held global chemical and mining company, which will create the world’s largest and most highly integrated TiO2 producer expected to close before the first quarter of 2018. The Company believes this transaction and all the initiatives discussed above have positioned the Company to withstand the long, sharp downturn in the TiO2 market and to emerge as one of the low cost global leaders in its market, to the benefit of customers, employees and shareholders.

Components of Compensation

Base Salary

We consider base salary an element of total compensation that is tied to job responsibility and individual contributions to our success and is intended to attract and retain highly talented executive officers. While the HRCC uses benchmark statistics to guide it in its decisions regarding levels of base salary, it has considerable discretion and considers the experience, tenure and recent individual performance of our NEOs when making decisions regarding base salary. During 2016, after reviewing the current industry and business climate, the HRCC determined not to give merit increase to any of the NEOs.

2016 Short-term Incentive Plan

For 2016, Tronox’s executive officers were eligible to receive cash awards under the 2016 Annual Incentive Plan. This plan is covered under the Tronox Limited Annual Performance Bonus Plan that was approved by shareholders in May 2013.

The size of the target incentive payable to each executive officer is set as a percentage of each executive officer’s base salary (the “Target Percentage”). The target incentive is paid for achieving the targeted objectives described below. The threshold level of performance pays 50% of target and achieving maximum performance pays 200% of target (300% for our CEO under his employment agreement). The Target Percentage for our CEO is 150% of his base salary and the Target Percentage for the other NEOs range from 70% to 75% of base salary. The HRCC considered the input of our CEO, LBC and benchmark statistics when setting the Target Percentage for each executive officer each year for 2016.

On February 8, 2016, the HRCC established the overall Tronox 2016 performance goals and metrics under the Annual Incentive Plan and the portion of the incentive attributable to the achievement of each performance

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goal. While many of the overall Tronox components of the Annual Incentive Plan were similar to 2015, such as our focus on safety and people, 2016 included a cumulative cash generation objective. We included the cumulative cash generation objective since it is one of our most important financial objectives for 2016 and 2017. Further, these performance goals are tied to measures that the HRCC believes will benefit our shareholders the most. The overall Company goals for 2016 included adjusted EBITDA (weighted at 35%), cumulative cash generation from our TiO2 operational excellence initiative (weighted at 35%), safety (weighted at 15%), and culture/people/integration goals (weighted at 15%).

We chose these measures because we believe they motivate our executives to drive Company and business unit growth and profitability. To reflect performance above or below targets, adjusted EBITDA, cumulative cash generation, safety, and culture/people/integration goals each have sliding scales that provide for annual incentive bonus payouts greater than the target bonus if results are greater than target (up to a maximum 200% payout) or less than the target bonus if results are lower than the target (down to a threshold of 50% of target payout, below which the payout would be $0).

At its February 8, 2016 meeting, the committee set final 2016 goals based on the following objectives:

Overall Tronox Results
Threshold
Target
Maximum
Payout
50%
100%
200%
Adjusted EBITDA
20% lower than Budget
Meet Tronox Budget
20% better than Budget
Cash Generation
20% lower than Budget
Meet Tronox Budget
20% better than Budget
Safety
Injuries 10% greater
than Target
DIR of 0.39
TRIR of 0.87
Injuries 20% fewer
than Target
Culture/People/Integration
Meet 75% of Target
Objectives
Meet Defined
Objectives
Exceed Defined
Objectives

In addition, each NEO has a portion of their incentive tied to individual performance and the two Executive Vice Presidents also have a portion of their incentive tied to the performance of their respective individual business unit. The components of annual incentive for each of the NEOs are as follows:


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At the February 2, 2017 HRCC meeting, our CEO presented the actual results for the Company and a discussion took place about the results. The actual 2016 results versus the AIP metrics were as follows:

Overall Tronox 2016 AIP Metrics
2016
Actual
Results
Performance
Result
Weighted
Performacne
Results %
 
Payout
Level
Threshold
50%
Target
100%
Maximum
200%
Objective
Weighting
 
 
 
 
 
 
Tronox Adjusted EBITDA
35%
$
218
 
$
273
 
$
328
 
$
314
 
174.5%
61.1%
2015 - 2016 Cumulative Cash Generation
35%
$
336
 
$
420
 
$
504
 
$
486
 
178.6%
62.5%
Safety DIR
7.5%
DIR ≥ 0.35
DIR = 0.39
DIR ≤ 0.25
0.39
100.0%
7.5%
Safety TRIR
7.5%
TIR ≥ .91