Newman and the other two executives were placed on leave because of alleged attempts to speed up or slow down payments that would affect their financial incentives.
Chemours said March 6 the review stemmed from an anonymous report made to the Chemours company's hotline. A complete report of the findings of the internal review was delivered to the board on March 5.
Based on the review, the board's audit committee determined that the three executives "engaged in efforts in the fourth quarter of 2023 to delay payments to certain vendors that were originally due to be paid in the fourth quarter of 2023 until the first quarter of 2024."
The committee also determined the three "made efforts to accelerate the collection of receivables into the fourth quarter of 2023 that were originally not due to be received until the first quarter of 2024."
The committee found that the efforts were made to meet free cash flow targets that were part of a key metric used to determine incentive compensation for executive officers. As a result, the committee concluded that Newman, Lock and Wisel violated Chemours' code of ethics applicable to their positions and relating to "the promotion of full, fair, accurate, timely and understandable disclosure."
Newman's compensation package totaled $7.6 million for the fiscal year, but only $995,833 of that was in salary, Manufacturing Dive reported. Lock was given a $600,000 base salary when he was named CFO in June 2023, with an incentive plan award worth 75 percent of that salary with the potential for higher payments.
The March 22 separation agreement between Chemours and Newman was in connection with his resignation from the company and its Board of Directors.
The agreement, as detailed in the 8-K filing, said that subject to Newman "providing an effective release of claims against the company and his compliance with the restrictive covenants applicable to him and the obligations under the separation agreement," his resignation will be treated as a retirement for the purposes of Newman's stock options to acquire Chemours common stock that were vested prior to his resignation.
That provides Newman with a longer period to exercise his vested stock options than if he were not retirement eligible.
"Mr. Newman is not entitled to any severance, equity award vesting or other compensation in connection with his resignation, other than any rights he has to vested benefits under the terms of the company's employee benefit plans," the 8-K filing stated.
Newman also agreed to cooperate with the company in connection with the board's continued review with respect to the company's accounting, "including, to the extent applicable, Newman's conduct, with respect" to the improper activities, according to the SEC filing.
Chemours did not reveal whether Lock and Wisel are still on leave from the company.
Because of the review, Chemours has delayed filing its 2023 10-K financial results. It did say findings of the internal review did not affect preliminary, unaudited estimates of operating results and other financial measures for full-year 2023.
Chemours released unaudited financial results on Feb. 29. The firm said it expects to report sales of around $6 billion for the year, down almost 12 percent from 2022. For the year, Chemours projects to report a loss of between $225 million and $235 million. It had shown a profit of almost $600 million in 2022. The estimated loss for 2023 includes $899 million of pretax litigation settlements and restructuring, asset-related and other charges.
On March 18, Chemours said in a news release it received notice from the New York Stock Exchange that the company is not in compliance with NYSE Listed Company rules because of the delay of is Form 10-K for 2023. The NYSE told the firm it has six months from March 15 to file the 10-K with the SEC, and that it can regain compliance with listing standards by filing the form withing that timespan.
Chemours said in the statement that it is "working diligently to complete its year-end reporting process, including its review of internal control over financial reporting as of December 31, 2023," and to file its 10-K as promptly as practical.