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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o Preliminary Proxy Statement
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☒ Definitive Proxy Statement
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PQ GROUP HOLDINGS INC.
(Name of Registrant as Specified In Its Charter)

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

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Valleybrooke Corporate Center 300 Lindenwood Drive Malvern, Pennsylvania 19355-1740

March 26, 2019

Dear Stockholder:

We cordially invite you to attend our 2019 Annual Meeting of Stockholders on Thursday, May 2, 2019, at 10:00 a.m. (Eastern Time), to be held at our offices at Valleybrooke Corporate Center, 300 Lindenwood Drive, Malvern, Pennsylvania 19355.

The proxy statement accompanying this letter describes the business we will consider at the annual meeting. Your vote is important regardless of the number of shares you own. Whether or not you plan to attend the annual meeting, we encourage you to consider the matters presented in the proxy statement and vote as soon as possible. Instructions for Internet and telephone voting are attached to your proxy card. If you prefer, you can vote by mail by completing and signing your proxy card and returning it in the enclosed envelope.

We hope that you will be able to join us on May 2^nd.

Sincerely,

Belgacem Chariag
President and Chief Executive Officer

Valleybrooke Corporate Center 300 Lindenwood Drive Malvern, Pennsylvania 19355-1740

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The 2019 Annual Meeting of Stockholders (the “Annual Meeting”) of PQ Group Holdings Inc. (the “Company”) will be held at our offices at Valleybrooke Corporate Center, 300 Lindenwood Drive, Malvern, Pennsylvania 19355 on Thursday, May 2, 2019, at 10:00 a.m. (Eastern Time) for the following purposes as further described in the proxy statement accompanying this notice:

Stockholders of record at the close of business on March 18, 2019 are entitled to notice of, and entitled to vote at, the Annual Meeting and any adjournments or postponements thereof.

To attend the Annual Meeting, you must demonstrate that you were a PQ stockholder as of the close of business on March 18, 2019, or hold a valid proxy for the Annual Meeting from such a stockholder. The proxy card includes an admission ticket to attend the Annual Meeting. You may alternatively present a brokerage statement showing proof of your ownership of PQ stock as of March 18, 2019. All stockholders must also present a valid form of government-issued picture identification in order to attend. Please allow additional time for these procedures.

By Order of the Board of Directors,

Joseph S. Koscinski
Secretary

Malvern, Pennsylvania
March 26, 2019

PQ GROUP HOLDINGS INC.

PROXY STATEMENT

2019 ANNUAL MEETING OF STOCKHOLDERS
May 2, 2019
10:00 a.m. (Eastern Time)

INTRODUCTION

This Proxy Statement provides information for stockholders of PQ Group Holdings Inc. (“we,” “us,” “our,” “PQ” and the “Company”), as part of the solicitation of proxies by the Company and its board of directors (the “Board”) from holders of the outstanding shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), for use at the Company’s annual meeting of stockholders to be held at our offices at Valleybrooke Corporate Center, 300 Lindenwood Drive, Malvern, Pennsylvania 19355 on Thursday, May 2, 2019 at 10:00 a.m. (Eastern Time), and at any adjournments or postponements thereof (the “Annual Meeting”).

At the Annual Meeting, stockholders will be asked to vote either directly or by proxy on the following matters discussed herein:

This Proxy Statement, the proxy card and the Annual Report to stockholders for the fiscal year ended December 31, 2018 are being first mailed to stockholders on or about March 26, 2019.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING TO BE HELD ON MAY 2, 2019: THIS PROXY STATEMENT, THE ANNUAL
REPORT AND THE FORM 10-K FOR FISCAL 2018 ARE AVAILABLE AT WWW.PROXYVOTE.COM.

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

Although we encourage you to read this Proxy Statement in its entirety, we include this Q&A section to provide some background information and brief answers to several questions you might have about the Annual Meeting.

Why are we providing these materials?

Our Board is providing these materials to you in connection with our Annual Meeting, which will take place on May 2, 2019 at our offices at Valleybrooke Corporate Center, 300 Lindenwood Drive, Malvern, Pennsylvania 19355 at 10:00 a.m. (Eastern Time). Stockholders are invited to participate in the Annual Meeting and are requested to vote on the proposals described herein.

What information is contained in this Proxy Statement?

This Proxy Statement contains information relating to the proposals to be voted on at the Annual Meeting, the voting process, the compensation of our directors and most highly paid officers, and other required information.

What proposals will be voted on at the Annual Meeting?

There are three proposals scheduled to be voted on at the Annual Meeting:

We will also consider other business properly brought before the Annual Meeting.

What shares can I vote?

You may vote all shares of Common Stock that you owned as of the close of business on the record date, March 18, 2019. You may cast one vote per share, including shares (i) held directly in your name as the stockholder of record and (ii) held for you as the beneficial owner through a broker, bank, or other nominee. The proxy card will indicate the number of shares that you are entitled to vote.

As of March 18, 2019, there were 135,727,810 shares of Common Stock outstanding, all of which are entitled to be voted at the Annual Meeting.

A list of stockholders will be available at our headquarters at Valleybrooke Corporate Center, 300 Lindenwood Drive, Malvern, Pennsylvania 19355 for a period of at least ten days prior to the Annual Meeting and at the Annual Meeting for examination by any stockholder.

What is the difference between being a stockholder of record and a beneficial owner of shares held in street name?

Many of our stockholders hold their shares through brokers, banks, or other nominees, rather than directly in their own names. As summarized below, there are some differences between being a stockholder of record and a beneficial owner of shares held in street name.

Stockholder of record: If your shares are registered directly in your name with PQ’s transfer agent, American Stock Transfer and Trust Company, LLC, you are the stockholder of record with respect to those shares and the proxy materials were sent directly to you. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals named on the proxy card and to vote at the Annual Meeting.

Beneficial owner of shares held in street name: If your shares are held in a brokerage account or by a bank or other nominee, then you are the “beneficial owner of shares held in street name” and the proxy materials were forwarded to you by your broker, bank or other nominee, who is considered to be the stockholder of record. As a beneficial owner, you have the right to instruct the broker, bank or other nominee holding your shares how to vote your shares.

How do I vote?

There are four ways to vote:

All shares represented by valid proxies received prior to the taking of the vote at the Annual Meeting will be voted and, where a stockholder specifies by means of the proxy a choice with respect to any matter to be acted upon, the shares will be voted in accordance with the stockholder’s instructions. Even if you plan on attending the Annual Meeting in person, we encourage you to vote your shares in advance online, by phone, or by mail to ensure that your vote will be represented at the Annual Meeting.

Can I change my vote or revoke my proxy?

You may revoke your proxy and change your vote at any time before the taking of the vote at the Annual Meeting.

What happens if I do not instruct how my shares should be voted?

Stockholders of record. If you are a stockholder of record and you:

then the persons named as proxy holders, Joseph S. Koscinski and William J. Sichko, Jr., will vote your shares in the manner recommended by the Board on all matters presented in this Proxy Statement and as they may determine in their best judgment with respect to any other matters properly presented for a vote at the Annual Meeting.

Beneficial owners of shares held in street name. If you are a beneficial owner of shares held in street name and do not provide the broker, bank or other nominee that holds your shares with specific voting instructions, then the broker, bank or other nominee that holds your shares may generally vote your shares in their discretion on “routine” matters, but cannot vote on “non-routine” matters.

What are routine and non-routine proposals?

The following proposal is considered a routine matter:

A broker, bank or other nominee may generally vote in their discretion on routine matters, and therefore no broker non-votes are expected in connection with Proposal 3.

The following proposals are considered non-routine matters:

If the broker, bank or other nominee that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, that broker, bank or other nominee will inform the inspector of election that it does not have the authority to vote on the matter with respect to your shares. This is generally referred to as a “broker non-vote.” Therefore, broker non-votes may exist in connection with Proposals 1 and 2.

What constitutes a quorum for the Annual Meeting?

The presence at the meeting, in person or by proxy, of the holders of Common Stock representing a majority of the shares outstanding and entitled to vote for the election of directors is necessary to constitute a quorum for all purposes.

What vote is required to approve each proposal?

Proposal 1: Election of directors. Directors are elected by a plurality of the votes cast. Therefore, if you do not vote for a nominee, or you “withhold authority to vote” for a nominee, your vote will not count either “for” or “against” the nominee.

Proposal 2: Advisory vote on the say-on-pay proposal. Generally, approval of any matter presented to stockholders (other than the election of directors) requires the affirmative vote of a majority of the votes cast on the matter. However, because this proposal asks for a non-binding, advisory vote, there is no “required” vote that would constitute approval.

Proposal 3: Ratification of PwC. The affirmative vote of a majority of the votes cast is required to ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2019.

What effect will broker non-votes and abstentions have?

Broker non-votes and abstentions are counted as present and entitled to vote for purposes of determining whether a quorum is present. Broker non-votes and abstentions will have no effect on the outcome of each proposal.

Who pays for costs relating to the proxy materials and Annual Meeting?

The costs of preparing, assembling and mailing this Proxy Statement, the proxy card and the Annual Report, along with the cost of posting the proxy materials on a website, are to be borne by us. In addition to the use of mail, our directors, officers and employees may solicit proxies personally and by telephone, facsimile and other electronic means. They will receive no compensation in addition to their regular salaries. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy materials to their principals and to request authority for the execution of proxies. We may reimburse these persons for their expenses in doing so.

Who should I call if I have any questions?

If you have any questions about the Annual Meeting, voting or your ownership of our Common Stock, please call us at
(610) 651-4216 or send an email to PQGIR@pqcorp.com.

BOARD OF DIRECTORS

PROPOSAL 1

ELECTION OF DIRECTORS

PQ has a classified Board currently consisting of four directors with terms expiring in 2019 (Class II), three directors with terms expiring in 2020 (Class III), and four directors with terms expiring in 2021 (Class I). At each annual meeting of stockholders, directors in one class are elected for a full term of three years to succeed those directors whose terms are expiring. Robert Coxon, Mark McFadden, Kimberly Ross and Robert Toth are the Class II directors whose terms expire at the Annual Meeting. Our Board has nominated, and stockholders are being asked to re-elect, Ms. Ross and Messrs. Coxon, McFadden and Toth for three-year terms expiring at our 2022 annual meeting of stockholders. If elected, the nominees will each hold office until our 2022 annual meeting of stockholders and a successor is duly elected and qualified or until earlier death, resignation, or removal.

Each of the above nominees has indicated his or her willingness to serve, if elected. However, if a nominee should be unable to serve, the shares of Common Stock represented by proxies may be voted for a substitute nominee designated by the Board. Management has no reason to believe that any of the above-mentioned persons will not serve his or her term as a director.

All of our nominees have served previously on our Board, which has provided them with significant exposure to both our business and the industry in which we compete. We believe that all our nominees possess the professional and personal qualifications necessary for board service, and we have highlighted particularly noteworthy attributes for each director in the individual biographies below.

The Board recommends a vote FOR the election of each of the director nominees.

The following table sets forth the name, age, and position, as of March 1, 2019, of individuals who currently serve as directors on our Board.

Class II – Directors with Terms Expiring in 2019

	ROBERT COXON Age: 71 Independent Director	Robert Coxon has served on our Board since 2007. Mr. Coxon was previously a Senior Advisor to The Carlyle Group, assisting buyout teams in Europe, the United States, the Middle East and Asia until 2013. In that role, he advised Carlyle in making and managing investments in the chemicals sector and was based in London. Prior to joining Carlyle, Mr. Coxon was the Senior Vice President of ICI and the Chief Executive Officer of Synetix, a leading global catalyst company. From 2003 until 2017, Mr. Coxon served as the Chairman of the UK Center for Process Innovation, an international research center in printable electronics, bio-processing and low carbon energy. Mr. Coxon previously served on the board of directors of AZ Electronic Materials SA, Jiangsu Sinorgchem Technology Co., Ltd., Ensus Ltd. and Stahl Holdings BV. Because of his extensive experience in the chemicals sector, we believe Mr. Coxon is well qualified to serve on our Board.
	MARK MCFADDEN Age: 41 Independent Director	Mark McFadden has served on our Board since 2016. Mr. McFadden is a Managing Director of CCMP Capital Advisors, LP (“CCMP”) and focuses on making investments in the industrial sector. Prior to joining CCMP upon its formation in August 2006, Mr. McFadden was with J.P. Morgan Partners, LLC between 2002 and 2006. Prior to that, Mr. McFadden was an investment banking analyst at Credit Suisse First Boston and Bowles Hollowell Conner. From 2012 until 2018, Mr. McFadden served on the board of Milacron Holdings Corp. Because of his extensive experience in the industrial sector and his significant experience in, and knowledge of, corporate finance and strategic development, we believe Mr. McFadden is well qualified to serve on our Board.
	KIMBERLY ROSS Age: 53 Independent Director	Kimberly Ross has served on our Board since 2017. Ms. Ross served as the Senior Vice President and Chief Financial Officer of Baker Hughes Incorporated, a supplier of oilfield services from 2014 to 2017. Prior to joining Baker Hughes Incorporated in November 2014, Ms. Ross served as the Executive Vice President and Chief Financial Officer of Avon Products Incorporated, a manufacturer of beauty products, from 2011 to 2014. Prior to joining Avon Products, Ms. Ross was an Executive Vice President and the Chief Financial Officer of Royal Ahold N.V., a food retailer, from 2007 to 2011 and held various other finance positions with Royal Ahold N.V. from 2001 to 2007. Ms. Ross also serves on the boards of directors and the audit committees of Chubb Limited and Nestle S.A. Because of her extensive financial expertise and experience, we believe Ms. Ross is well qualified to serve on our Board.

	ROBERT TOTH Age: 58 Independent Director	Robert Toth has served on our Board since 2016. Mr. Toth is a Managing Director of CCMP. Prior to joining CCMP in 2016, Mr. Toth served as the Chief Executive Officer and President of Polypore International, Inc., a leading global high technology filtration company specializing in microporous membranes, since 2005, during which time Polypore transitioned from a private to a public company via a successful IPO in 2007 and was ultimately acquired in 2015. Mr. Toth was previously the President and Chief Executive Officer and a member of the board of directors of CP Kelco ApS, a global leader in the specialty hydrocolloids market. Prior to joining CP Kelco in 2001, Mr. Toth spent 19 years at Monsanto Company and Solutia Inc. where he held a variety of managerial and executive roles. Mr. Toth currently serves on the board of directors of Materion Corporation and SPX Corporation. Mr. Toth previously served on the board of directors of Polypore International, Inc. from 2005 until 2015. Because of his extensive leadership experience and past service as a public company director, we believe Mr. Toth is well qualified to serve on our Board.

Class III – Directors with Terms Expiring in 2020

	MARTIN CRAIGHEAD Age: 59 Independent Director	Martin Craighead has served on our Board since 2017. Mr. Craighead served as the Chief Executive Officer of Baker Hughes Incorporated, a supplier of oilfield services, from 2012 to 2017. He has also served as Chairman of the board of directors of Baker Hughes Incorporated from 2013 to 2017 and was a member of their board of directors from 2011 until 2017. Mr. Craighead currently serves on the boards of directors of Baker Hughes, a GE company, following the combination of Baker Hughes with GE’s oil and gas business, and of Texas Instruments Inc. He first joined Baker Hughes Incorporated in 1986 and was its Chief Operating Officer from 2009 to 2012 and Group President of drilling and evaluation from 2007 to 2009. He also served as President of INTEQ from 2005 to 2007 and President of Baker Atlas from February 2005 to August 2005. Because of his industry expertise in the energy sector and extensive management experience, we believe Mr. Craighead is well qualified to serve on our Board.

Class I – Directors with Terms Expiring in 2021

	GREG BRENNEMAN Age: 57 Independent Director	Greg Brenneman has served on our Board since 2014. Mr. Brenneman is the Executive Chairman of CCMP and is a member of the firm’s Investment Committee. Prior to joining CCMP in October 2008, Mr. Brenneman served as the Chief Executive Officer of QCE Holdings LLC (“Quiznos”), a U.S. quick service restaurant chain, from January 2007 until September 2008 and as the President of Quiznos from January 2007 until November 2007. He also served as the Executive Chairman from 2008 to 2009. Prior to joining Quiznos, Mr. Brenneman was the Chairman and Chief Executive Officer of Burger King Corporation from 2004 to 2006. Prior to joining Burger King, Mr. Brenneman was named the President and Chief Executive Officer of PwC Consulting in June 2002. Mr. Brenneman joined Continental Airlines in 1995 as the President and Chief Operating Officer and as a member of its board of directors. In 1994, Mr. Brenneman founded Turnworks, Inc., his personal investment firm that focuses on corporate turnarounds. Prior to founding Turnworks, Mr. Brenneman was a Vice President for Bain and Company. Mr. Brenneman currently serves on the board of directors of The Home Depot, Inc. and Baker Hughes, a GE Company. Mr. Brenneman previously served on the board of directors of Milacron Holdings Corp. from 2012 until 2017, Automatic Data Processing, Inc. from 2001 until 2014 and Francesca’s Holding Corporation from 2010 until 2015. Because of his leadership experience, over 20 years of business experience and extensive experience serving as a public company director, we believe Mr. Brenneman is well qualified to serve on our Board.
	JONNY GINNS Age: 45 Independent Director	Jonny Ginns has served on our Board since 2010. Mr. Ginns joined INEOS in 2006 as the Group General Counsel, having worked as an external lawyer for a number of years before that. He has experience across a wide range of fields, including mergers & acquisitions, disposals, joint ventures, litigation, finance and employee benefits, and acts as a director for a number of INEOS entities. Because of his significant core business skills, including financial and strategic planning, we believe Mr. Ginns is well qualified to serve on our Board.
	KYLE VANN Age: 71 Independent Director	Kyle Vann has served on our Board since 2014. Mr. Vann is an Executive Advisor to CCMP since October 2012 and has provided consulting services to Entergy Corporation since 2005. He served for 25 years in various senior leadership positions at Koch Industries including as the Chief Executive Officer of Entergy-Koch LP, a joint venture between Koch Industries and Entergy Corporation. Before joining Koch Industries, Mr. Vann worked at Humble Oil and Refining Company (which later became part of Exxon) as a refinery engineer. Mr. Vann currently serves on the board of directors of EnLink Midstream, LLC and Legacy Reserves LP. From 2006 to 2019, he served on the board of EnLink Midstream Partners LP. Because of his extensive experience in exploration and production, midstream, energy services and trading, we believe Mr. Vann is well qualified to serve on our Board.

DIRECTOR COMPENSATION

Director Compensation

In connection with our initial public offering in 2017, we adopted a non-employee director compensation policy setting forth the compensation of our independent non-employee directors effective beginning immediately following our initial public offering. Pursuant to such policy, each of our non-employee directors who is not an employee of CCMP or INEOS is compensated as follows:

All cash and equity awards granted under the non-employee director compensation policy are granted under, and subject to the limits of, the PQ Group Holdings Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”). Annual retainers are paid quarterly in arrears.

In 2018 we did not pay any additional remuneration for director service to any of our directors who were either our officers or who were employees of CCMP or INEOS. However, all directors were reimbursed for reasonable travel and lodging expenses incurred to attend meetings of our Board or committees thereof.

On May 15, 2018, the Company granted to each of Ms. Ross, and Messrs. Coxon, Craighead and Vann, 14,440 restricted stock units. Each award vests subject to the continued service of the director through May 14, 2019 (or upon an earlier occurrence of a change in control).

Stock Ownership Guidelines for Non-Employee Directors

In connection with our initial public offering, the Compensation Committee adopted stock ownership guidelines applicable to our executive officers and our non-employee directors. Under our stock ownership guidelines, each of our non-employee directors is expected to have ownership of Company stock in an amount equal to at least $625,000. Non-employee directors subject to the guidelines will have five years to achieve the required ownership levels and, until they satisfy their ownership requirements, will be subject to a holding requirement with respect to 50% of the shares they acquire upon the vesting or exercise of equity-based awards (on an after-tax basis). Non-employee directors who do not receive compensation for their service on the Board are not subject to these guidelines.

The following table summarizes the ownership of our Common Stock as of December 31, 2018 by our non-employee directors:

Director Compensation Table

The following table sets forth certain information with respect to cash compensation and stock awards granted to our non-employee directors in 2018. Directors who are employees of CCMP or INEOS do not receive compensation. Neither Mr. Chariag nor Mr. Gentilcore received compensation in respect of their service on our Board. The compensation that they received in their capacities as executive officers of the Company is reported in the Summary Compensation Table below.

CORPORATE GOVERNANCE

Board Meetings and Executive Sessions

Our Board and its committees meet periodically throughout the year, as needed, to oversee management of the Company’s business and affairs for the benefit of its stockholders. During 2018, our Board held six meetings and also approved certain actions by unanimous written consent. During 2018, each director attended at least 75% of the Board meetings and the total meetings held by all of the committees on which he or she served during the periods that he or she served. We encourage, but do not require, our directors to attend annual meetings of stockholders.

Periodically throughout the year, the non-employee and independent directors meet in executive session without members of management present. These meetings allow such directors to discuss issues of importance to the Company, including the business and affairs of the Company and matters concerning management, without any member of management present. The Board has selected Timothy Walsh as Lead Independent Director to preside at all meetings of non-employee/independent directors.

Committees and Committee Composition

During fiscal 2018, the Board had four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Health, Safety and Environment Committee. The members of each committee are appointed by the Board and serve until their successor is elected and qualified, unless they are earlier removed or resign. In addition, from time to time, special committees may be established under the direction of the Board when necessary to address specific issues. The table below provides information about the membership of these committees during fiscal 2018:

Audit Committee — The Audit Committee’s purpose, roles and responsibilities are set forth in a written charter adopted by our Board, which can be found in the Investors section of our website at www.pqcorp.com under “Corporate Governance.” The Audit Committee’s primary duties and responsibilities are to:

The Audit Committee currently consists of Kimberly Ross, Robert Coxon and Kyle Vann, with Ms. Ross serving as chairperson of the committee. Our Board has determined that Ms. Ross and Messrs. Coxon and Vann each meet the independence requirements of Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the governance and listing standards of the New York Stock Exchange. All of the members of the Audit Committee are financially literate and Ms. Ross is also considered an “audit committee financial expert” within the meaning of the applicable rules of the Securities and Exchange Commission.

Compensation Committee — The purpose of the Compensation Committee is to assist the Board in fulfilling its responsibilities relating to oversight of the compensation of our directors, executive officers and other employees and the administration of our benefits and equity-based compensation programs. The Compensation Committee reviews and recommends to our Board compensation plans, policies and programs and approves specific compensation levels for all executive officers. The Compensation Committee currently consists of Timothy Walsh, Andrew Currie and Kyle Vann, with Mr. Walsh serving as the chairperson of the committee. Our Board has determined that each member of the Compensation Committee meets the independence requirements under the governance and listing standards of the New York Stock Exchange and are “outside directors” pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation Committee’s purpose, roles and responsibilities are set forth in a written charter adopted by our Board, which can be found in the Investors section of our website at www.pqcorp.com under “Corporate Governance.”

Nominating and Corporate Governance Committee — The purpose of the Nominating and Corporate Governance Committee is to identify individuals qualified to become members of the Board, recommend to the Board director nominees for the next annual meeting of stockholders, develop and recommend to the Board a set of corporate governance principles applicable to the Company, oversee the evaluation of the Board and its dealings with management as well as appropriate committees of the Board and review and approve all related party transactions. The Nominating and Corporate Governance Committee currently consists of Greg Brenneman, Andrew Currie and Martin Craighead, with Mr. Brenneman serving as the chairperson of the committee. Our Board has determined that each member of the Nominating and Corporate Governance Committee is independent as defined under the governance and listing standards of the New York Stock Exchange. The Nominating and Corporate Governance Committee’s purpose, roles and responsibilities are set forth in a written charter adopted by our Board, which can be found in the Investors section of our website at www.pqcorp.com under “Corporate Governance.”

Health, Safety and Environment Committee — The purpose of the Health, Safety and Environment Committee is to assist the Board in fulfilling its responsibilities to provide global oversight of the Company’s health, safety, environment, sustainability and security policies, processes and initiatives. The Health, Safety and Environment Committee currently consists of

Robert Coxon, Jonny Ginns, Martin Craighead and Robert Toth, with Mr. Coxon serving as chairperson of the committee. The Health Safety and Environment Committee’s purpose, roles and responsibilities are set forth in a written charter adopted by our Board, which can be found in the Investors section of our website at www.pqcorp.com under “Corporate Governance.”

Compensation Committee Interlocks and Insider Participation

None of our executive officers serves as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our Board or Compensation Committee. Mr. Walsh is employed by CCMP and Mr. Currie is employed by INEOS. For additional information regarding transactions between CCMP and its affiliates and us and between INEOS and its affiliates and us, see “Transactions with Related Persons.”

Our Board’s Role in Risk Oversight

It is management’s responsibility to manage risk and bring to the Board’s attention risks that are material to PQ. The Board has oversight responsibility for the systems established to report and monitor the most significant risks applicable to PQ. The Board believes that evaluating the executive team’s management of the various risks confronting PQ is one of its most important areas of oversight.

In accordance with this responsibility, the Board administers its risk oversight role directly and through its committee structure and the committees’ regular reports to the Board at Board meetings. The Board reviews strategic, financial and execution risks and exposures associated with the annual plan and long-term plans, major litigation and other matters that may present material risk to the Company’s operations, plans, prospects or the Company’s reputation, acquisitions and divestitures, senior management succession planning and enterprise risk management. The Audit Committee oversees the Company’s internal audit function and reviews risks associated with financial and accounting matters, including financial reporting, accounting, disclosure, internal controls over financial reporting, ethics and compliance programs, and regulatory compliance. The Audit Committee also oversees and reviews with management the Company’s cybersecurity policies, procedures and programs, including hardware and software improvements, to mitigate the risk of cyber-related threats. The Compensation Committee reviews risks related to executive compensation and the design of compensation programs, plans and arrangements.

Board Independence

Our Corporate Governance Guidelines provide that our Board shall consist of such number of directors who are independent as is required and determined in accordance with applicable laws and regulations and requirements of the New York Stock Exchange and Securities and Exchange Commission rules. Under our Corporate Governance Guidelines, an “independent” director is one who meets the qualification requirements for being an independent director under applicable laws and the corporate governance listing standards of the New York Stock Exchange. Our Board evaluates any relationships between each director or nominee and PQ and makes an affirmative determination whether or not such director or nominee is independent. As a result of this review, our Board has affirmatively determined that each current member of our Board, with the exception of Mr. Chariag, our President and Chief Executive Officer, is independent under the corporate governance listing standards of the New York Stock Exchange.

Diversity and Board Expertise

We seek to have a Board that represents diversity as to experience, gender and ethnicity/race, but we do not have a formal policy with respect to diversity. We also seek a Board that reflects a range of talents, ages, skills, character and expertise, particularly in the areas of leadership, operations, risk management, accounting and finance, strategic planning and the industries in which we operate, sufficient to provide sound and prudent guidance with respect to our operations and interests.

Board and Committee Annual Performance Reviews

Our Corporate Governance Guidelines provide that the Nominating and Corporate Governance Committee is responsible for reporting annually to the Board an evaluation of the overall performance of the Board. In addition, the written charters of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee provide that each such committee shall evaluate its performance on an annual basis using criteria that it has developed and shall report to the Board on its findings.

Director Nominations

Criteria and Process of Identifying and Evaluating Candidates for Consideration as a Director Nominee

Under its charter, our Nominating and Corporate Governance Committee is responsible for recommending to the Board candidates to stand for election to the Board at the Company’s annual meeting of stockholders and for recommending candidates to fill vacancies on the Board that may occur between annual meetings of stockholders. The Nominating and Corporate Governance Committee may receive suggestions for new directors from a number of sources, including Board members and our President and Chief Executive Officer, and may also, in its discretion, employ a third-party search firm to assist in identifying candidates for director. The Corporate Governance Guidelines provide that each director should possess a combination of skills, professional experience and diversity of viewpoints necessary to oversee the Company’s business. It is the policy of the Board that directors should possess the highest personal and professional ethics, integrity and values, and be committed to representing the long-term interests of the Company’s stakeholders. Board members are expected to become and remain informed about the Company, its business and its industry and rigorously prepare for, attend and participate in all Board and applicable committee meetings. The Nominating and Corporate Governance Committee evaluates each individual in the context of the skills, character, diversity and expertise of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of our business and represent stockholder interests through the exercise of sound judgment using its diversity of experience. In addition, the Nominating and Corporate Governance Committee considers, in light of our business, each director nominee’s experience, qualifications, attributes and skills that are identified in the biographical information contained in this Proxy Statement.

Procedures for Recommendation of Director Nominees by Stockholders

The Nominating and Corporate Governance Committee considers properly submitted recommendations for candidates to the Board from stockholders in accordance with our Bylaws. Any stockholder may submit in writing a candidate for consideration for each stockholder meeting at which directors are to be elected by no later than the close of business on the 90^th day nor earlier than the close of business on the 120^th day prior to the anniversary date of the prior year’s annual meeting, except that if the annual meeting is set for a date that is not within 30 days of such anniversary date, we must receive the notice no later than the close of business on the tenth day following the day on which the date of the annual meeting is first disclosed in a public announcement. Any stockholder recommendations for consideration by the Nominating and Corporate Governance Committee should include the candidate’s name, biographical information, and the information required by Section 1.2 of our Bylaws. Recommendations should be sent to c/o Secretary, PQ Group Holdings Inc., 300 Lindenwood Drive, Malvern, Pennsylvania 19355. The Nominating and Corporate Governance Committee evaluates candidates for the position of director recommended by stockholders in the same manner as candidates from other sources. The Nominating and Corporate Governance Committee will determine whether to interview any candidates and may seek additional information about candidates from third-party sources.

Board Leadership Structure

Under our Corporate Governance Guidelines, our Board may select a Chairperson at any time, who may also be an executive officer of the Company. James Gentilcore served as our Board Chairman until December 31, 2018, and no Chairperson has been appointed to succeed Mr. Gentilcore. Timothy Walsh, our Lead Independent Director, will preside over meetings of our Board of Directors until such time as a new Chairperson is selected. As Lead Independent Director, Mr. Walsh has the power to call meetings of the independent directors and to preside over such meetings.

Succession Planning

The Chief Executive Officer reviews succession planning and management development with the Board and the Nominating and Corporate Governance Committee on an annual basis. This succession planning includes the development of policies and principles for selection of the Chief Executive Officer, including succession in the event of an emergency or retirement.

Majority Voting Guidelines

Our Corporate Governance Guidelines provide that in an uncontested election of directors, any nominee for director who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall promptly tender his or her resignation following certification of the stockholder vote. The Board shall determine whether or not to accept such resignation within a period of 120 days following the stockholder vote, and will promptly publicly disclose its decision to accept or reject the resignation and the reasons for doing so.

Policies Relating to Directors and Service

It is our policy that a director, other than the Chief Executive Officer, who is also an employee of the Company, shall offer his or her resignation from the Board to the Nominating and Corporate Governance Committee at the same time he or she retires or resigns from employment with the Company. In addition, it is our policy that directors who retire or otherwise change from the principal occupation or background association they held when they were originally invited to the Board should provide notice to the Nominating and Corporate Governance Committee or the Board and offer to resign from the Board. The Board does not believe that such directors should necessarily leave the Board, but it is our policy that there should be an opportunity for the Board to review the continued appropriateness of such director’s membership under these circumstances. The Board also believes that each director should advise the Nominating and Corporate Governance Committee in advance of accepting an invitation to serve as a member on another board of directors.

In general, the Board does not have a policy limiting the number of other public company boards of directors upon which a director may sit. However, the Nominating and Corporate Governance Committee shall consider the number of other boards of directors (or comparable governing bodies), particularly with respect to public companies, on which a prospective nominee is a member. Although the Board does not impose a limit on outside directorships, it does recognize the substantial time commitments attendant to membership on the Board and expects that directors devote all such time as is necessary to fulfill their accompanying responsibilities, both in terms of preparation for, and attendance and participation at, meetings.

Pursuant to our Audit Committee charter and the New York Stock Exchange listing rules, members may serve on no more than three separate public company audit committees simultaneously without prior review and determination by the Board that such simultaneous service would not impair the ability of such member to effectively serve on the Company’s Audit Committee.

Communications with Directors

Stockholders and other interested parties may communicate directly with the Board, the non-employee directors or the independent directors as a group, or specified individual directors by writing to such individual or group c/o Secretary, PQ Group Holdings Inc., 300 Lindenwood Drive, Malvern, Pennsylvania 19355. The Secretary will forward such communications to the relevant group or individual at or prior to the next meeting of the Board.

Code of Conduct

We have adopted a written Code of Conduct applicable to all employees and a written Code of Ethics for Senior Executive and Financial Officers, which are designed to ensure that our business is conducted with integrity. These codes cover, among other things, professional conduct, conflicts of interest, accurate recordkeeping and reporting, public communications and the protection of confidential information, as well as adherence to laws and regulations applicable to the conduct of our business. We intend to disclose any future amendments to, or waivers from, these codes of ethics for PQ executive officers within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the Securities and Exchange Commission.

Online Availability of Information

The current versions of our Corporate Governance Guidelines, Code of Conduct, Code of Ethics for Senior Executive and Financial Officers and charters for our Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Health, Safety and Environment Committee are available by clicking on “Corporate Governance” in the Investors section of our website, www.pqcorp.com. These materials are also available in print free of charge to stockholders, upon written request to c/o Secretary, PQ Group Holdings Inc., 300 Lindenwood Drive, Malvern, Pennsylvania 19355.

EXECUTIVE OFFICERS

The following table sets forth the name, age, and position, as of March 1, 2019, of our current executive officers.

Biographical information concerning Belgacem Chariag, our President and Chief Executive Officer, is set forth above under “Board of Directors.”

Michael Crews became our Executive Vice President and Chief Financial Officer in August 2015. From 2008 to 2015, Mr. Crews was Executive Vice President and Chief Financial Officer at Peabody Energy Corporation. From 1998 to 2008, Mr. Crews held various management positions at Peabody Energy Corporation including Vice President—Operations Planning, Assistant Treasurer and Director—Financial and Capital Planning. Mr. Crews began his career in KPMG’s audit function.

Scott Randolph became our Vice President and President—Performance Materials in March 2019 after having served as Executive Vice President and Group President—Performance Materials and Chemicals from December 2016 to February 2019. From March 2016 to December 2016, Mr. Randolph served as Vice President and President—Global Performance Chemicals after previously serving as Vice President and President—Performance Chemicals Americas and Australia and Performance Materials. From April 2005 to May 2016, Mr. Randolph served as President of Performance Materials. Mr. Randolph originally joined us as Senior Vice President Strategic Planning in February 2005. From 2000 to 2005, Mr. Randolph held the position of Chief Financial Officer with Peak Investments, LLC. From 1990 to 2000, Mr. Randolph held a number of management positions with Harris Chemical Group and IMC Global following IMC Global’s acquisition of Harris Chemical Group. Mr. Randolph’s last position with IMC Global was General Manager of the Worldwide Boron Business. From 1989 to 1990, Mr. Randolph held management positions with General Chemical. Prior to that, Mr. Randolph served as a nuclear trained naval officer from 1984 to 1989.

David J. Taylor became our Vice President and President—Performance Chemicals in March 2019 after having serviced as Executive Vice President and Group President—Environment Catalysts and Services from April 2018 to February 2019. From September 2017 through March 2018, Mr. Taylor served as our Senior Vice President—Strategic Development. Prior to joining us, Mr. Taylor served in several senior management positions with Air Products and Chemicals, Inc., a global industrial gas and chemicals supplier. From 2014 to 2016, he was Vice President, Energy from Waste and from 2005 to 2014 he was Vice President, Energy Business. Mr. Taylor served as Vice President, Large Air Separation Units from 2003 to 2005 and Vice President, Industrial Chemicals Division from 2002 to 2003. Prior to that, Mr. Taylor held several operational and business development roles with Air Products in the industrial gas and energy businesses.

Ray Kolberg became our Vice President and President—Catalysts in March 2019 and has served as the President of our Catalysts group since January 2016. From February 2012 through December 2015, Mr. Kolberg was Senior Vice President of Formulated Products for Momentive Performance Materials.

Kurt Bitting became Vice President and President—Refining Services in March 2019. From September 2017 until February 2019, Mr. Bitting served as PQ’s Vice President—Refining Services and between May 2016, when he joined PQ as a result of the business combination with Eco Services, and August 2017, he was Business Director in the Refining Services business. Prior to joining PQ, Mr. Bitting held management positions at Kinder Morgan, Inc., Sprint Corporation, Solvay USA Inc. and Eco Services Operations LLC. As a Captain in the U.S. Army, Mr. Bitting served as a Company Commander in the 10^th Mountain Division.

Joseph S. Koscinski became our Vice President, Secretary and General Counsel in November 2015. From August 1995 to October 2015, Mr. Koscinski was an attorney in the Business Services Group of Babst, Calland, Clements and Zomnir, P.C., a law firm in Pittsburgh, Pennsylvania, where he was named a shareholder in 2003 and where his corporate practice included mergers and acquisitions, real estate matters and commercial contracts. While in private practice, Mr. Koscinski served as outside corporate counsel to PQ Corporation since 2005.

William J. Sichko, Jr. became our Vice President, Chief Administrative Officer in 2005. Mr. Sichko served as our Secretary from 2005 to November 2015, and is currently an Assistant Secretary. From 1998 through 2005, Mr. Sichko was Chief Administrative Officer with Peak Investments, LLC. From 1991 through 1998, he held management positions with Harris Chemical Group and IMC Global following IMC Global’s acquisition of Harris Chemical, including serving as Senior Vice President of Human Resources from 1996 to 1998. From 1987 to 1991, Mr. Sichko was a manager with General Chemical.

STOCKHOLDER INFORMATION

STOCK OWNERSHIP

The following table sets forth information regarding the beneficial ownership of our Common Stock as of March 1, 2019 by:

The percentage ownership information shown in the table below is based upon 135,727,810 shares of Common Stock outstanding as of March 1, 2019.

Information with respect to beneficial ownership has been furnished by each director, officer or beneficial owner of more than 5% of our Common Stock. We have determined beneficial ownership in accordance with the rules of the Securities and Exchange Commission. These rules generally attribute beneficial ownership of shares to persons who possess sole or shared voting or investment power with respect to such shares. The information does not necessarily indicate beneficial ownership for any other purpose. Under these rules, the number of shares of Common Stock deemed outstanding includes shares issuable upon exercise of options and held by the respective person or group which may be exercised or converted within 60 days after March 1, 2019 as well as shares of restricted stock of which a respective person has voting power. These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person or entity, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person or entity.

Unless otherwise indicated below, the address for each listed director, officer and stockholder is c/o PQ Group Holdings Inc., 300 Lindenwood Drive, Malvern, Pennsylvania 19355. The inclusion in the following table of those shares, however, does not constitute an admission that the named stockholder is a direct or indirect beneficial owner. Unless otherwise indicated and subject to applicable community property laws, to our knowledge, each stockholder named in the following table possesses sole voting and investment power over the shares listed, except for those jointly owned with that person’s spouse.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of our Common Stock to file reports of holdings and transactions in our Common Stock with the Securities and Exchange Commission. Specific due dates for these reports have been established and we are required to report any failure to file by such dates during fiscal year 2018. Based on our review of filings made with the Securities and Exchange Commission and representations made by our directors and executive officers, we believe that all of our directors, executive officers and greater than 10% holders timely filed all reports that were required to be filed under Section 16(a).

TRANSACTIONS WITH RELATED PERSONS

Amended and Restated Stockholders Agreement

In May 2016 we entered into an amended and restated stockholders agreement with certain of our stockholders, including investment funds affiliated with CCMP, INEOS, our directors and officers who held shares of our Common Stock and certain other investors. In connection with our initial public offering, the stockholders agreement was further amended and restated.

The stockholders agreement, as amended and restated, provides affiliates of CCMP with certain demand registration rights, including shelf registration rights, in respect of shares of our Common Stock held by them and also provides that, in the event that we register additional shares of our Common Stock for sale to the public, we will be required to give notice of such registration to such affiliates of CCMP and certain other stockholders, and, subject to certain limitations, include shares of our Common Stock held by them in such registration. In addition, we will be required to bear the registration expenses, other than underwriting discounts and commissions and transfer taxes, associated with any registration of shares described above and to indemnify such stockholders and certain other persons against certain liabilities that may arise under the Securities Act in connection with any such offering and sale of our shares.

Policies and Procedures for Related Party Transactions

Our Board has adopted a policy with respect to the review, approval and ratification of related party transactions. Under the policy, the Nominating and Corporate Governance Committee is responsible for reviewing and approving related party transactions. The policy applies to transactions, arrangements and relationships (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships in which the aggregate amount involved will, or may be expected to, exceed $120,000 with respect to any fiscal year, and where we (or one of our subsidiaries) are a participant and in which a related party has or will have a direct or indirect material interest. In the course of reviewing potential related party transactions, the Nominating and Corporate Governance Committee will consider the nature of the related party’s interest in the transaction; the presence of standard prices, rates or charges or terms otherwise consistent with arms-length dealings with unrelated third parties; the materiality of the transaction to each party; the reasons for the Company entering into the transaction with the related party; the potential effect of the transaction on the status of a director as an independent, outside or disinterested director or committee member; and any other factors the Nominating and Corporate Governance Committee may deem relevant.

EXECUTIVE COMPENSATION

REPORT OF THE COMPENSATION COMMITTEE

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section set forth below with our management. Based on this review and discussion, the Compensation Committee recommended to our Board that the Compensation Discussion and Analysis section be included in this Proxy Statement which will be incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Respectfully submitted by the Compensation Committee of our Board

Timothy Walsh, Chair
Andrew Currie
Kyle Vann

COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This section discusses the principles underlying the material components of our executive compensation program for our executive officers who are named in the Summary Compensation Table and the factors relevant to an analysis of our executive compensation policies and decisions. For the year ended December 31, 2018, our named executive officers included our principal executive officers, our principal financial officer, and our next three most highly compensated executive officers.

Executive Summary

2018 Compensation Decisions

In connection with the Company’s initial public offering in September 2017, we made certain changes to the base salary and annual incentive opportunities of our then-employed named executive officers after a review of market data. In addition, we made grants of significant long-term incentive awards shortly after the initial public offering. No additional changes to base salary or annual incentive opportunities were made in 2018 for these named executive officers, nor were additional long-term incentive awards granted in 2018, except as described below for Mr. Gentilcore.

In 2018, the Compensation Committee approved the following compensation decisions in connection with Mr. Chariag joining the Company as President and Chief Executive Officer, Mr. Gentilcore transitioning to the position of Executive Chairman and later resigning from that position and from our Board of Directors, and the promotion of Mr. Taylor.

In addition, with respect to 2018, the Compensation Committee approved an annual incentive payment to each of our named executive officers under the PQIP, our annual incentive plan, described below, based on the Company’s achievement of specific financial performance and operational goals for that year.

Corporate Governance and Best Practices

Say on Pay Advisory Vote

The Compensation Committee takes seriously the ability of stockholders to weigh in on our compensation decisions through a “say on pay” advisory vote.

At the May 4, 2018 Annual Meeting of Stockholders, our first as a public company, stockholders approved, on an advisory basis, the compensation paid by us to our named executive officers. Approval was secured by 97 percent of the votes cast.

In addition, the stockholders voted, on an advisory basis, to hold a say-on-pay advisory vote each year.

This year, we are again asking stockholders to consider our executive compensation program and provide us with a favorable advisory vote on the compensation for our named executive officers.

Executive Compensation Program Philosophy and Overview

Our compensation philosophy is to provide pay that:

We seek to implement our pay philosophy by providing a total compensation package that includes three main components: base salary, annual performance-based bonus and long-term equity-based awards. The Compensation Committee takes into account individual performance and competitive market practice in determining the compensation package for each named executive officer. A compensation peer group has been formed with the assistance of our independent compensation consultant, and this peer group is referenced in the discussion below. We utilized the peer group as a tool in making compensation decisions for 2018, and we expect to continue to utilize one when making compensation decisions going forward.

Base salary has been set with a view toward attracting and retaining executive officer talent.

Our annual incentive plan (the “PQIP”) is a broad-based plan under which annual performance-based cash opportunities are awarded to our named executive officers and other employees, and which, for 2018, paid based on the achievement of annual EBITDA, adjusted free cash flow, and safety goals.

Our long-term equity-based awards consist of stock options, restricted shares and restricted stock units that are subject to time and/or performance vesting conditions. The long-term equity-based awards we granted prior to our initial public offering were made in amounts intended to be competitive for private equity backed ventures in the specialty chemicals space. The size of grants made following our initial public offering in 2017 and 2018 was determined with reference to peer group data, as well as other relevant factors, including, with respect to awards made immediately following our initial public offering, the need to retain our executive team following the offering. In 2019, to further enhance our pay for performance philosophy, we added performance share units (“PSUs”) to the mix of long-term incentives that we grant.

Each of these elements of compensation is discussed in more detail below.

We believe that our executive compensation program is strongly aligned with the interests of our stockholders:

We will continue to promote share ownership and a strong pay-for-performance culture. We believe that this philosophy has been successful in motivating, retaining and incentivizing our named executive officers and providing value to our stockholders.

Compensation Decision Making Process

Role of the Compensation Committee and Management

Our executive compensation program is determined and approved by the Compensation Committee. During 2018, the Compensation Committee was responsible for the oversight, implementation and administration of all our executive compensation plans and programs. None of the named executive officers had any role in approving the compensation of the other named executive officers. However, the Compensation Committee does consider the recommendations of our President and Chief Executive Officer in setting compensation levels for our named executive officers other than himself. The Compensation Committee determined the compensation of our President and Chief Executive Officer.

On an annual basis, the Compensation Committee reviews compensation for the named executive officers in conjunction with performance evaluations, salary increase recommendations, determination of bonus payouts and deliberations regarding long-term incentive grants. The Compensation Committee has conducted and plans to continue to conduct annual reviews of our executive compensation program for alignment with our compensation philosophy. The Compensation Committee will make decisions taking into account good governance practices regarding compensation, including reliance on market data for the chemical and specialty chemical industries and the other considerations described in this Compensation Discussion and Analysis.

Compensation Consultant; Review of Relevant Compensation Data

The Compensation Committee engaged WealthPoint, LLC (“WealthPoint”) as the independent advisor to the Compensation Committee effective in 2018. WealthPoint reviewed the Company’s overall executive compensation program in comparison to comparably-sized public companies in industries similar to the Company’s. In addition, WealthPoint advised the Compensation Committee on the appropriate mix of compensation components for compensating our executive officers, and facilitated the Compensation Committee’s determination of our executive officers’ performance-based compensation, including the introduction of PSUs in 2019. WealthPoint did not provide any other services to the Company or our management or have any other direct or indirect business relationships with the Company or its management. The Compensation Committee has assessed the independence of WealthPoint and concluded that its work in 2018 did not raise any conflicts of interest.

Compensation Peer Group Data and Pay Mix

The Compensation Committee has identified a peer group of companies to be used for purposes of assessing market levels of compensation. For 2018, with the assistance of WealthPoint, the Compensation Committee reviewed the compensation peer group used for 2017 compensation setting to determine its continued appropriateness, and determined that it was appropriate to remove Lanxess Solutions US, Inc. because it is no longer an independent public company. As noted above, the Compensation Committee also considered other factors in assessing and setting compensation in 2018. The companies below were selected because they are in the chemical and specialty chemical space and generally have revenues ranging from approximately 50% to 200% of the Company’s revenues.

In 2018, the Compensation Committee reviewed competitive compensation practices, including peer group compensation data and a variety of other factors, to confirm that the structure of our cash compensation and equity-based awards was consistent with our compensation philosophy and market practice. In addition, the Compensation Committee used the peer group data provided by WealthPoint in order to determine the appropriate mix between cash compensation and equity-based awards and the appropriate size of cash compensation and equity-based awards for Mr. Chariag when he joined the Company and for Mr. Taylor, as it related to cash compensation, in connection with his promotion.

Elements of Compensation in 2018

For 2018, our compensation program for the named executive officers consisted of, in whole or part:

As noted above, long-term equity incentive awards were made only to Mr. Chariag and Mr. Gentilcore in 2018.

Base Salary

We provide an annual base salary to our named executive officers to induce talented executives to join or remain with our Company, to compensate them for their services during the year and to provide them with a stable source of income.

The base salary levels of our named executive officers are reviewed annually by the Compensation Committee to determine whether an adjustment is warranted. The Compensation Committee may take into account numerous factors in making its base salary determinations, none of which are dispositive or individually weighted, including our financial performance, the state of our industry and local economies in which we operate, the named executive officer’s relative importance and responsibilities, the named executive officer’s performance and periodic reference to comparable salaries paid to other executives of similar experience in our industry in general, based on the Compensation Committee’s expertise as well as market data drawn from our peer group, referenced above.

The annual base salary rates paid to our named executive officers for the years ended December 31, 2017 and 2018 are reported below. Because changes to base salaries were made in late 2017 in connection with our initial public offering, the actual base salary paid in 2017 to those named executive officers who were then employed as reflected in the Summary Compensation Table is different than the amounts reported below. In addition, Mr. Taylor’s base salary was increased effective April 1, 2018 in connection with his new position, and the annualized amount reflected on the table below differs from the amount reported on the Summary Compensation Table.

Annual Performance-Based Cash Awards – The PQIP

We provide our named executive officers with annual performance-based cash award opportunities linked to our annual financial and operational performance. For 2018, the Compensation Committee chose three performance metrics, the achievement of which would determine the amount of annual cash awards paid to our named executive officers. Prior to 2018, annual performance-based cash awards had been determined based on the achievement of Adjusted EBITDA goals. The Compensation Committee decided to add an Adjusted Free Cash Flow goal and a Safety goal for 2018 because it believes that improvement in these two areas will create value for our shareholders.

The threshold EBITDA goal must be attained for payouts under any of the three goals to be funded.

Adjusted EBITDA and Adjusted Free Cash flow are non-GAAP financial metrics. An explanation of how we calculate these metrics is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the Securities and Exchange Commission.

The target annual performance-based cash award opportunity for each eligible executive was set as a percentage of base salary (i.e., actual base salary paid during 2018). The target award percentages for each of our named executive officers, other than Messrs. Chariag and Taylor, remained the same for 2018 as in 2017. As described above, Mr. Chariag’s target award percentage was set when he commenced employment with us and Mr. Taylor’s target award percentage was increased in connection with this promotion. For 2018, the target award percentages were as follows:

For 2018, the PQIP was structured to pay for achieving goals related to each of the three performance metrics.

The level of performance actually achieved for 2018 in each of the three categories was as follows:

The actual bonus earned by each of the named executive officers for 2018 was as follows:

Long-Term Equity Based Incentive Awards

Since the time of our initial public offering, all of our equity-based awards have been, and going forward will continue to be, granted under the 2017 Plan. Our equity incentive awards currently consist of time and/or performance vesting (i) restricted shares, (ii) restricted stock units and (iii) options to purchase shares of our Common Stock. As discussed in more detail below, PSUs were introduced in 2019 as part of the mix of long-term incentives that we grant.

In keeping with our pay-for-performance philosophy, the options and restricted shares granted prior to our initial public offering partially vest based on time, partially vest based on performance and partially vest on both time and performance. The performance vesting terms are described in more detail below. Each of our named executive officers, other than Messrs. Chariag and Taylor, holds equity awards granted prior to our initial public offering.

Of the time-vesting restricted shares and stock options issued prior to our initial public offering under the PQ Group Holdings Inc. Stock Incentive Plan (the “SIP”), the predecessor plan to the 2017 Plan, most of the awards vest ratably over a period of three years. Several awards vest in 50% increments over two and four years. All of these awards are subject to accelerated vesting upon a change in control.

The performance-based stock options and performance-based restricted shares currently outstanding are all unvested and will only vest on the achievement with respect to shares of our Common Stock of an average closing trading price equal or exceeding, in any ten trading day period, the lowest amount which, when multiplied by the number of shares of our Common Stock then held by investment funds affiliated with CCMP and added to the aggregate net proceeds received by investment funds affiliated with CCMP with respect to their shares of capital stock of the Company, would yield a quotient of equal or greater than two when divided by the equity investment in the Company by investment funds affiliated with CCMP. The quotient described above is referred to in this Compensation Discussion and Analysis as the “MOI Target.” As of December 31, 2018, none of the performance-based stock options and performance-based restricted shares granted prior to our initial public offering had vested.

Grants in 2018

As stated above, the Compensation Committee and Board of Directors authorized grants shortly after our initial public offering in September 2017, and chose not to make an additional long term equity-based incentive award to our named executive officers in 2018. The two exceptions were (i) new hire grants made to Mr. Chariag when he assumed the role of President and CEO on August 9, 2018, and (ii) an additional grant made to Mr. Gentilcore in connection with his resignation as Executive Chairman and member of our Board of Directors. Those grants were as follows:

Grants in 2019

In 2019, the Compensation Committee determined that it was advisable to make another grant of long-term equity incentive awards to its named executive officers, and did so on March 11, 2019. The equity incentive awards were in the form of restricted stock units and PSUs. One third of the restricted stock unit awards will vest on each of January 5, 2020, January 5, 2021 and January 5, 2022, generally subject to continued service. PSUs will be earned subject to the achievement of performance goals related to three-year average return on average net tangible assets and three-year average adjusted free cash flow over a performance period which commenced January 1, 2019 and which ends December 31, 2021. Depending on progress against performance goals, an amount ranging from 0% to 200% of target PSUs granted may actually be earned. The PSUs actually earned will be determined on the date the Compensation Committee certifies the level of achievement of the various performance measures, but no later than 60 days after the end of the three-year performance period. In order to be eligible to earn all awarded PSUs, a participant generally must remain employed until the end of the performance period. The grants made to our named executive officers on March 11, 2019 were as follows:

Other Elements of Compensation

Additional Executive Benefits and Perquisites

We provide our named executive officers with certain executive benefits that the Compensation Committee believes are reasonable and in the best interests of the Company and our stockholders. To the extent our named executive officers received these benefits in 2018, they are described in the footnotes to our 2018 Summary Compensation Table below. Consistent with our compensation philosophy, we currently intend to continue to maintain our current benefits for our named executive officers, including life insurance, relocation assistance, and the other benefits described below. The Compensation Committee, in its discretion, may revise, amend or add to a named executive officer’s executive benefits if it deems it advisable. We believe these benefits are generally equivalent to benefits provided by comparable companies based on our experience and knowledge of general industry practices.

Health and Welfare Benefits

Our named executive officers have the option to participate in various employee welfare benefit programs, including medical, dental and life insurance benefits. These benefit programs are generally available to all employees.

Relocation Assistance

The Company’s business needs require it on occasion to relocate certain employees. To meet this need, we may, on a case by case basis, pay or reimburse certain relocation-related expenses, including temporary housing, living and travel expenses that are incurred by our employees, including our named executive officers.

Severance and Change in Control Benefits

Each of our named executive officers, except Mr. Taylor, is party to a severance agreement with us that provides them with severance protections and benefits in the event of certain qualifying terminations of their employment. Mr. Taylor was provided with a severance benefit in connection with his offer of employment. In connection with his hiring, Mr. Chariag entered into a severance agreement on terms and conditions that were consistent with the agreements entered into with our other named executive officers. The material terms of these agreements are described below under “Potential Payments Upon Termination or Change in Control—Severance Agreements.”

None of our named executive officers is party to an employment agreement with the Company.

Transition and Severance Arrangement with Mr. Gentilcore

The Company entered into a transition agreement with Mr. Gentilcore under which he would transition from his position as President and Chief Executive Officer of the Company to Executive Chairman of the Company, effective August 9, 2018. The transition agreement provided that in the role of Executive Chairman, Mr. Gentilcore would remain a full-time executive employee of the Company and would continue to receive the compensation and benefits he received as Chief Executive Officer of the Company. It also provided that following the termination of his service as Executive Chairman, he would be eligible to receive the severance benefits in his existing severance agreement with the Company, dated as of August 31, 2017.

Mr. Gentilcore resigned from his positions as Executive Chairman of the Company and as Chairman and member of the Company’s Board of Directors as of December 31, 2018. In connection with his departure, Mr. Gentilcore and the Company entered into a separation and general release agreement, dated December 21, 2018, under which Mr. Gentilcore agreed to a general release of claims in favor of the Company in exchange for:

The Compensation Committee provided Mr. Gentilcore with certain additional benefits in connection with his termination in light of his significant contributions to the Company, including in connection with our initial public offering. Mr. Gentilcore’s entitlement to these payments and benefits is subject to his continuing compliance with the terms of the severance agreement and separation and release agreement.

Since Mr. Gentilcore remained employed through December 31, 2018, he received his 2018 PQIP distribution in accordance with the terms of the PQIP. The terms of Mr. Gentilcore’s severance agreement provide for the continued ratable payment of his annual base salary ($880,000) and annual target bonus ($880,000) over the two year period of January 1, 2019 to December 31, 2020. The terms of the severance agreement also provide for payment of relocation expenses and the continuation of the Company contributions for medical, vision and dental benefits over the same period unless he becomes entitled to these benefits from a new employer.

Stock Ownership Guidelines for Executive Officers

In connection with our initial public offering, the Compensation Committee adopted stock ownership guidelines applicable to our executive officers, including our named executive officers, and our non-employee directors. Under our stock ownership guidelines, each of our named executive officers, other than our Chief Executive Officer, is expected to have ownership of Company stock in an amount equal to at least three times the executive’s annualized base salary and our Chief Executive Officer is expected to have ownership of Company stock in an amount equal to at least five times his annualized base salary Executive officers subject to the guidelines will have five years to achieve the required ownership levels and, until they satisfy their ownership requirements, will be subject to a holding requirement with respect to 50% of the shares they acquire upon the vesting or exercise of equity-based awards (on an after-tax basis).

The following table summarizes the ownership of our Common Stock as of December 31, 2018 by our named executive officers:

Tax Considerations

Section 162(m) of the Internal Revenue Code (“Section 162(m)”) generally limits the deductibility of compensation paid to our named executive officers to $1 million during any fiscal year. Prior to January 1, 2018, certain compensation that qualified as “performance-based” was exempted from the above deductibility limits under Section 162(m). However, the Tax Cuts and Jobs Act of 2017 generally eliminated the performance-based compensation exception, with certain limited grandfathering provisions.

Under a Section 162(m) transition rule for compensation plans or agreements of corporations which are privately held and which become publicly held in an initial public offering, compensation paid under a plan or agreement that existed prior to the

initial public offering will not be subject to Section 162(m) until the earliest of (1) the expiration of the plan or agreement, (2) a material modification of the plan or agreement, (3) the issuance of all employer stock and other compensation that has been allocated under the plan, or (4) the first meeting of stockholders at which directors are to be elected that occurs after the close of the third calendar year following the year of the initial public offering (the “Transition Date”). The Compensation Committee may consider the impact of Section 162(m), to the extent it is expected to apply following the Transition Date, when structuring our executive compensation arrangements with our named executive officers, and will continue to monitor guidance and developments in this area. However, the Compensation Committee believes that its primary responsibility is to provide a compensation program in accordance with its overall compensation philosophy and policies described above, and it retains flexibility to approve compensation arrangements that may not be deductible in whole or in part under Section 162(m).

2018 Summary Compensation Table

The following table sets forth certain information with respect to compensation earned by or paid to our named executive officers for the year ended December 31, 2018, and where applicable, the years ending December 31, 2017 and December 31, 2016.

shares granted in 2017 and 2016 to Mr. Gentilcore and in 2016 to Mr. Crews, of time-based stock options and restricted stock units granted to Mr. Taylor in 2017, and of time-based stock options and restricted stock units granted to each of Messrs. Crews, Randolph, Ferrall and Gentilcore in 2017 and 2016, computed in accordance with FASB ASC Topic 718, in each case, disregarding the effects of estimated forfeitures. These amounts reflect our cumulative accounting expense over the vesting period, disregarding the effects of estimated forfeitures, and do not correspond to the actual value that may be realized by the named executive officers. For information on the valuation assumptions made in the calculation of these amounts, refer to Note 22 to the audited consolidated financial statements in our Form 10-K for the fiscal year ended December 31, 2018, Note 21 to the audited consolidated financial statements in our Form 10-K for the fiscal year ended December 31, 2017 and Note 21 to the audited consolidated financial statements in the prospectus filed in connection with our initial public offering. With respect to stock options and restricted shares that are subject to performance-based vesting conditions, the aggregate grant date fair value was determined based on the probable outcome of the performance conditions associated with such awards at the date of grant. For performance-based stock options, the aggregate grant date fair value of these awards, assuming the maximum level of performance is achieved, is: Mr. Gentilcore’s 2017 and 2016 grants, $43,824 and $358,311, respectively; and Mr. Crews’ 2016 grant, $152,300. For performance-based restricted shares, the aggregate grant date fair value of these awards, assuming the maximum level of performance is achieved, is: Mr. Gentilcore’s 2017 and 2016 grants, $39,177 and $374,959, respectively; and Mr. Crews’ 2016 grant, $159,482.

2018 Grant of Plan-Based Awards

The following table summarizes plan-based awards granted to our named executive officers for the year ended December 31, 2018.