UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.  )

Filed by the Registrant þ
Filed by a Party other than the Registrant o

Check the appropriate box:

o		Preliminary Proxy Statement
o		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ		Definitive Proxy Statement
o		Definitive Additional Materials
o		Soliciting Material Pursuant to §240.14a-12

 

Corn Products International, Inc.

(Name of Registrant as Specified In Its Charter)

 

N/A

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

Payment of Filing Fee (Check the appropriate box):

þ		No fee required.
o		Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

	(1)		Title of each class of securities to which transaction applies:
			N/A
	(2)		Aggregate number of securities to which transaction applies:
			N/A
	(3)		Per unit or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
			N/A
	(4)		Proposed maximum aggregate value of transaction:
			N/A
	(5)		Total fee paid:
			N/A

o		Fee paid previously with preliminary materials.
o		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

	(1)		Amount Previously Paid:
			N/A
	(2)		Form, Schedule or Registration Statement No.:
			N/A
	(3)		Filing Party:
			N/A
	(4)		Date Filed:
			N/A

 

5 Westbrook Corporate Center, Westchester, Illinois 60154

 

April 4, 2008

 

Dear Stockholder:

 

It is my pleasure to invite you to Corn Products International’s 2008 Annual Meeting of Stockholders. This year’s meeting will be held on Wednesday, May 21, at the Westbrook Corporate Center Meeting Facility, which is located on the ground floor of the annex between Towers 2 and 5 of the Westbrook Corporate Center (near the southwesterly corner of the intersection of Cermak Avenue and Wolf Road), in Westchester, Illinois. The annual meeting will be held solely to vote on each of the matters described in the proxy statement, which follows on the next page. We do not expect any other business will be transacted.

 

We are pleased to be taking advantage of new Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe the new rules will allow us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of our annual meeting. On April 4, 2008, we mailed to most of our stockholders a notice containing instructions on how to access our proxy statement and 2007 Annual Report to Stockholders and vote online. Other stockholders will continue to receive a copy of the proxy statement and annual report by mail. The proxy statement contains instructions on how you can (i) receive a paper copy of the proxy statement and annual report, if you only received a notice by mail or (ii) elect to receive your proxy statement and annual report electronically by e-mail, if you received them by mail this year.

 

Your vote is important, whether or not you plan to attend the meeting, and we encourage you to vote promptly. You may vote your shares on the Internet or via a toll-free telephone number. Alternatively, if you received a paper copy of the proxy card by mail, you may sign, date and mail the proxy card in the envelope provided. Instructions regarding all three methods of voting are contained in the proxy statement and the proxy card. Note also that if you hold your shares through a bank, broker or other holder of record, you may vote your shares in accordance with your voting instruction form or notice provided by the record holder.

 

We look forward to seeing you at the annual meeting.

 

Sincerely,

 

Samuel C. Scott III
Chairman, President and
Chief Executive Officer

 

Printed on Recycled Paper

 

Corn Products International, Inc.
5 Westbrook Corporate Center
Westchester, Illinois 60154

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

 

The 2008 Annual Meeting of Stockholders of Corn Products International, Inc. will be held at the Westbrook Corporate Center Meeting Facility, which is located on the ground floor of the annex between Towers 2 and 5 of the Westbrook Corporate Center (near the southwesterly corner of the intersection of Cermak Avenue and Wolf Road), in Westchester, Illinois, on Wednesday, May 21, 2008, at 9:00 a.m., local time, for the following purposes:

 

 

Stockholders of record at the close of business on March 24, 2008 will be entitled to vote at the meeting and at any adjournment of the meeting.

 

Attendance at the meeting will be limited to stockholders, those holding proxies from stockholders, and invited guests from the media and financial community. For ten days before the meeting, a list of stockholders will be available for inspection during ordinary business hours at the company’s offices at 5 Westbrook Corporate Center, Westchester, Illinois 60154.

 

This proxy statement and our annual report to stockholders and the proxy are being made available to stockholders on or about April 4, 2008.

 

Your vote is important. Whether or not you expect to attend the annual meeting, please ensure that your vote will be counted by voting on the Internet or by toll-free telephone number, as described in the enclosed materials. Alternatively, if you received a copy of the proxy card by mail, you may sign, date and mail the proxy card in the envelope provided. If you hold your shares through a bank, broker or other holder of record, you may vote your shares in accordance with your voting instruction form.

 

By order of the Board of Directors,

 

Mary Ann Hynes
Vice President, General Counsel
and Corporate Secretary

 

April 4, 2008

ADMISSION TO THE 2008 ANNUAL MEETING

 

An admission ticket (or other proof of stock ownership) will be required for admission to the annual meeting. Only stockholders who own Corn Products common stock as of the close of business on March 24, 2008 will be entitled to attend the meeting. An admission ticket will serve as verification of your ownership.

 

 

You must present your admission ticket at the door for admission of yourself and one guest. Seating will be on a first-come, first-served basis, and you may be asked to present valid picture identification before being admitted.

 

The use of cameras at the annual meeting is prohibited, and they will not be allowed in the meeting room, except by credentialed media. We realize that many cellular phones have built-in digital cameras. While these phones may be brought into the room, the camera function may not be used at any time. No recording devices or large packages will be permitted in the meeting room.

TABLE OF CONTENTS

 

Corn Products International, Inc.
5 Westbrook Corporate Center
Westchester, Illinois 60154

 

PROXY STATEMENT

 

General Information

 

Why am I receiving these materials?

 

The Board of Directors of Corn Products International, Inc. is soliciting proxies to be voted at the Annual Meeting of Stockholders (the annual meeting) to be held on Wednesday, May 21, 2008, and at any adjournment of the annual meeting. When we ask you for your proxy, we must provide you with a proxy statement and an annual report to stockholders that contain certain information specified by law. Our Board of Directors has made these materials available to most of our stockholders on the Internet or, if you are a participant in the Corn Products International, Inc. Retirement Savings Plans, has delivered paper copies of these materials to you by mail, in connection with the Board’s solicitation of proxies for use at our 2008 annual meeting. Our stockholders are invited to attend the annual meeting and are requested to vote on the proposals described in this proxy statement. In this proxy statement we refer to Corn Products International, Inc. as “Corn Products,” the “company,” “we” or “us.”

 

What is included in these materials?

 

These materials include:

 

 

If you received paper copies of these materials by mail, these materials also include the proxy card for the annual meeting.

 

Why did I receive a notice in the mail regarding the Internet availability of the proxy materials this year instead of a paper copy of the proxy materials?

 

This year, we are pleased to be using the new U.S. Securities and Exchange Commission rule that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to many of our stockholders a notice about the Internet availability of the proxy materials (notice of availability) instead of a paper copy of the proxy materials. All stockholders receiving the notice of availability will have the ability to access the proxy materials over the Internet and request to receive a paper copy of the proxy materials by mail. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found on the notice of availability. In addition, this notice contains instructions on how stockholders may request to receive proxy materials in paper form by mail or electronically by e-mail on an ongoing basis.

 

Why didn’t I receive a notice about the Internet availability of the proxy materials?

 

We are providing some of our stockholders, including stockholders who have previously requested to receive paper copies of the proxy materials and our stockholders who are participants in the Corn Products International, Inc. Retirement Savings Plans, with paper copies of the proxy materials instead of a notice about the Internet availability of the proxy materials.

 

How can I access the proxy materials over the Internet?

 

Your notice of availability of the proxy materials, proxy card or voting instruction card will contain instructions on how to view our proxy materials for the annual meeting on the Internet.

 

Our proxy materials are also available on our website at www.cornproducts.com. You can instruct us to send our future proxy materials to you electronically by e-mail on the website where you can vote and on our website. Choosing to receive your future proxy materials by e-mail will help us conserve natural resources and reduce the costs of printing and distributing our proxy materials. If you choose to receive future proxy materials by e-mail, you will receive an e-mail with instructions containing a link to the website where those materials are available and a link to the proxy voting website. Your election to receive proxy materials by e-mail will remain in effect until you terminate it.

 

How may I obtain a paper copy of the proxy materials?

 

Stockholders receiving a notice about the Internet availability of the proxy materials will find instructions about how to obtain a paper copy of the proxy materials on their notice. All stockholders who do not receive the notice of availability and have not elected to receive proxy materials by e-mail will receive a paper copy of the proxy materials by mail.

 

What will the stockholders vote on at the annual meeting?

 

Two items:

 

 

Will there be any other items of business on the agenda?

 

We do not expect any other items on the agenda because the deadlines for stockholder proposals and nominations have already passed. Nonetheless, in case there is any unforeseen need, the accompanying proxy gives discretionary authority to the persons named in the proxy with respect to other matters that might be brought before the meeting. Those persons intend to vote that proxy in accordance with their best judgment.

 

Who is entitled to vote?

 

Stockholders as of the close of business on March 24, 2008 (the record date) may vote at the annual meeting. You have one vote for each share of common stock you held on the record date, including shares:

 

 

What constitutes a quorum?

 

A majority of the outstanding shares, present or represented by proxy, constitutes a quorum for the annual meeting. As of the record date, 73,758,012 shares of our common stock were issued and outstanding.

 

How many votes are required for the approval of each item?

 

 

Broker nonvotes.  If your shares are held by a broker, the broker will ask you how you want your shares to be voted. If you give the broker instructions, your shares will be voted as you direct. If you do not give instructions, one of two things can happen, depending on the type of proposal. For the election of directors and the ratification of auditors, the broker may vote your shares in its discretion. For all other proposals, the broker may not vote your shares at all. When that happens, it is called a “broker nonvote.”

 

How do I vote?

 

If you are a stockholder of record or are holding a proxy for a stockholder of record, you may vote in person at the annual meeting. We will give you a ballot when you arrive. If you do not wish to vote in person or if you will not be attending the annual meeting, you may vote by proxy. You can vote by proxy on the Internet by following the instructions provided in the notice of Internet availability of proxy materials, or, if you received these materials electronically, by following the instructions in the e-mail message that notified you of their availability, or if you receive paper copies of the proxy materials by mail, you can vote on the Internet, by telephone or by mail by following the instructions on the enclosed proxy card.

 

You can utilize these methods to vote:

 

By the Internet.  You may vote online at www.proxyvote.com by following the instructions provided in the notice of Internet availability of the proxy materials or, if you received these materials electronically, by following the instructions in the e-mail message that notified you of their availability, or, if you received these materials by mail, by following the instructions on the enclosed proxy card. You will need your 12-digit control number contained on your notice of availability, e-mail notification or proxy card in order to vote online. Voting on the Internet has the same effect as voting by mail or telephone. Internet voting will be available until 11:59 p.m. Eastern Time on May 20, 2008. If you vote by the Internet but do not indicate your voting preferences, the persons named in the proxy will vote on your behalf for the election of the nominees for director listed below and for the ratification of the appointment of our independent registered public accounting firm.

 

By telephone.  You may vote by telephone at 1-800-690-6903. You will need the 12-digit control number contained on your notice of availability, e-mail notification or proxy card in order to vote by telephone. Voting by telephone has the same effect as voting by mail or the Internet. Telephone voting will be available until 11:59 p.m. Eastern Time on May 20, 2008. If you vote by telephone but do not indicate your voting preferences, the persons named in the proxy will vote on your behalf for the election of the nominees for director listed below and for the ratification of the appointment of our registered public accounting firm.

 

By mail.  If you received a paper copy of the proxy materials, you may vote by signing and dating each proxy card you receive and returning it to us in the prepaid envelope provided. Sign your name exactly as it appears on the proxy. If you are signing in a representative capacity (for example, as an attorney-in-fact, executor, administrator, guardian, trustee, or the officer or agent of a corporation or partnership), please indicate your name and your title or capacity. If the stock is held in custody for a minor (for example, under the Uniform Transfers to Minors Act), the custodian should sign, not the minor. If you return your signed proxy but do not indicate your voting preferences, the persons named in the proxy will vote on your behalf for the election of the nominees for director listed below and for the ratification of the appointment of our independent registered public accounting firm.

 

Can I change my vote after I have voted?

 

You may revoke your proxy and change your vote at any time before the final vote at the meeting. You may vote again on a later date on the Internet or by telephone, by signing and returning a new proxy card with a later date or by attending the meeting and voting in person. Only your latest Internet, telephone or written proxy submitted prior to the meeting will be counted. You may revoke your proxy at any time before the meeting by (1) notifying the company’s Corporate Secretary in writing or (2) delivering a later-dated proxy on the Internet or by telephone or in writing. However, your attendance at the annual meeting will not automatically revoke your proxy unless you vote again at the meeting or specifically request in writing that

your prior proxy be revoked. Any written notice revoking a proxy should be sent to Mary Ann Hynes, Corporate Secretary, Corn Products International, Inc., 5 Westbrook Corporate Center, Westchester, Illinois 60154.

 

How do I vote shares that are held by my broker?

 

If you have shares held by a broker or other nominee, you may instruct your broker or other nominee to vote your shares by following instructions that the broker or nominee provides for you. Most brokers offer voting on the Internet, by telephone and by mail.

 

How do I vote in person?

 

If you are a stockholder of record, you may vote your shares in person at the meeting. However, we encourage you to vote on the Internet, by telephone or by proxy card even if you plan to attend the meeting.

 

How do I vote my shares in the Corn Products International Stock Fund of the Company’s Retirement Savings Plans?

 

You may instruct the plan trustee on how to vote your shares in the Corn Products International Stock Fund on the Internet, by telephone or by mail as described above.

 

How many shares in the Corn Products International Stock Fund of the Company’s Retirement Savings Plans can I vote?

 

You may vote all the shares allocated to your account on the record date.

 

What happens if I do not vote my Retirement Savings Plan shares?

 

Your shares will not be voted. The Trustee will not vote shares held in the Retirement Savings Plans as to which it does not receive timely directions.

 

What does it mean if I receive more than one Notice of Availability or proxy card?

 

It means that you hold shares in more than one account. To ensure that all your shares are voted, if you vote on the Internet or by telephone, you will need to vote once for each notice of availability, proxy card and voting instruction card you receive. To ensure that all your shares are voted if you received more than one proxy card, sign and return each card.

 

Who tabulates the votes?

 

The votes are tabulated by an independent inspector of election, Broadridge Investor Communication Services.

 

What should I do if I want to attend the annual meeting?

 

An admission ticket (or other proof of stock ownership) will be required for admission to the annual meeting. Only stockholders who own Corn Products common stock as of the close of business on March 24, 2008 will be entitled to attend the meeting. An admission ticket will serve as verification of your ownership.

 

 

 

How do I contact the Board of Directors?

 

Interested parties may communicate directly with any member of the Board of Directors, including the Lead Director, or the non-management directors, as a group, by writing in care of:

 

Corporate Secretary

Corn Products International, Inc.

5 Westbrook Corporate Center

Westchester, Illinois 60154

 

The Corporate Secretary will collect all such communications and organize them by subject matter. All such communications will be promptly forwarded to the appropriate board committee chairperson according to the subject matter of the communication, except for solicitations or other matters unrelated to the company. Communications addressed directly to the Lead Director, the non-management directors, as a group, or any individual director will be forwarded to the Lead Director, each non-management member of the board or the individual director, as the case may be.

 

Who is paying for the cost of this proxy solicitation?

 

Corn Products is paying the costs of the solicitation of proxies. We must pay brokerage firms and other persons representing beneficial owners of shares held in street name certain fees associated with:

 

 

In addition to soliciting proxies by the Internet and mail, our board members, officers and employees may solicit proxies on our behalf, without additional compensation, personally, by e-mail or by telephone.

 

How do I submit a stockholder proposal for the 2009 annual meeting?

 

Our 2009 annual meeting is scheduled for Wednesday, May 20, 2009. If a stockholder wishes to have a proposal considered for inclusion in next year’s proxy statement, he or she must submit the proposal in writing so that we receive it by December 5, 2008. Proposals should be addressed to our Corporate Secretary, Corn Products International, Inc., 5 Westbrook Corporate Center, Westchester, Illinois 60154. In addition, our By-laws provide that any stockholder wishing to propose any other business at the annual meeting must give the company written notice not less than ninety nor more than one hundred twenty days in advance of the date which is the anniversary of the date that this proxy statement was released. That notice must provide certain other information as described in our by-laws. Copies of the by-laws are available online in the “Governance” section of our website at http://www.cornproducts.com. There are other procedural requirements in our by-laws pertaining to stockholder nominations and proposals. Any stockholder may receive a current copy of our by-laws, without charge, by writing to our Corporate Secretary.

 

I share an address with another stockholder and received one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?

 

The Securities and Exchange Commission’s rules permit us to deliver a single set of annual meeting materials to one address shared by two or more of our stockholders. This delivery method is referred to as “householding” and can result in significant cost savings with respect to holders who want to receive paper materials. To take advantage of this opportunity, we have delivered only one proxy statement and annual report to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. This procedure saves printing and postage costs by reducing duplicative mailings. We agree to deliver promptly, upon written or oral request, a separate copy of the annual meeting materials, as requested to any stockholder at the shared address to which a single copy of these documents was delivered. If you prefer to receive separate copies of the proxy statement or annual report, contact Broadridge Financial Solutions, Inc. at (800) 542-1061 or in writing at Broadridge Householding Department,

51 Mercedes Way, Edgewood, New York 11717. Please also keep in mind that this proxy statement and the accompanying 2007 Annual Report to Stockholders will be published and available for viewing and copying in the “Investors” section of our website at http://www.cornproducts.com, in addition to being available at the site stated in the notice of availability.

 

If you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future proxy statements and annual reports for your household, please contact Broadridge Financial Solutions at the above phone number or address.

 

Stockholders who participate in householding and request to receive paper copies of the proxy materials will continue to receive separate proxy cards. Householding will not affect dividend check mailings.

 

Beneficial stockholders can request information about householding from their banks, brokers, or other holders of record.

 

Under our certificate of incorporation, the board is divided into three classes with approximately one-third of the directors standing for election each year. The terms of four Class II directors are expiring at the annual meeting. Three of these four directors are nominated for election, with each nominee to hold office for a three-year term expiring in 2011. As previously disclosed, the fourth, Gunther Greiner, has declined to stand for election for personal reasons. Upon the expiration of Mr. Greiner’s term, the Board will consist of 10 members. The three directors standing for election and our other seven continuing directors are listed on pages 6 to 10, with brief biographies.

 

All of the nominees for election have consented to being named in this proxy statement and to serve if elected. If, for any reason, any of the nominees cannot be a candidate for election at the annual meeting, the proxies will be voted for substitute nominees designated by the board unless it has reduced its membership prior to the annual meeting. The board does not anticipate that any of the nominees will be unavailable to serve if elected. The nominees and the directors continuing in office will normally hold office until the Annual Meeting of Stockholders in the year indicated on this and the following pages and until their successors have been elected and have qualified.

 

The Corporate Governance and Nominating Committee is currently conducting a search for a director and expects to increase the number of directors back to eleven and fill the vacancy created by that increase after the annual meeting and identification of a suitable candidate.

 

Class II nominees for three-year terms expiring in 2011

 

RICHARD J. ALMEIDA

 

Age — 65

Director since 2001

Chairman of the Compensation Committee and member of the Corporate Governance

and Nominating Committee

 

Former Chairman and Chief Executive Officer of Heller Financial, Inc.

 

Mr. Almeida retired in 2001 as Chairman and Chief Executive Officer of Heller Financial, Inc., a commercial finance and investment company, a position he had held since 1995. He served as Executive Vice President and Chief Financial Officer of Heller Financial from 1987 until 1995. Before that service, he was an executive with Citicorp/Citibank, a full service bank, serving in various capacities. Mr. Almeida is a director of UAL Corporation, The Marmon Group, CARE(USA) and High Jump.

 

GREGORY B. KENNY

 

Age — 55

Director since 2005

Member of the Audit Committee

 

President and Chief Executive Officer of General Cable Corporation

 

Mr. Kenny is President and Chief Executive Officer of General Cable Corporation since August 2001 and a director of General Cable Corporation since 1997. General Cable Corporation is a manufacturer of aluminum, copper, and fiber-optic wire and cable products. From 1999 to 2001 he served as President and Chief Operating Officer of General Cable Corporation; from 1997 to 1999 he served as Executive Vice President and Chief Operating Officer; from 1994 to 1997 he served as Executive Vice President, Sales and Marketing; and from 1992 to 1994 he served as President, Consumer Products Group. He is also a director of Cardinal Health, Inc. and a member of the Board of Governors for NEMA (National Electrical Manufacturers Association). In addition, Mr. Kenny serves on the boards of the Cincinnati Museum Center and Big Brothers/Big Sisters of Greater Cincinnati.

 

JAMES M. RINGLER

 

Age — 62

Director since 2001

Chairman of the Audit Committee and member of the Corporate Governance and

Nominating Committee

 

Chairman of the Board of Teradata Corporation

 

Mr. Ringler has served as Chairman of the Board of Directors of Teradata Corporation, a data warehousing and business intelligence solutions company, since September 2007. Previously, Mr. Ringler served as the Chairman of the Board of NCR Corporation, an information technology company, from 2005 to September 2007. He served as the interim Chief Executive Officer of NCR from March 2005 until September 2005 and was a member of the NCR Board of Directors from November 2003 until September 2007. Mr. Ringler retired in 2004 as Vice Chairman of Illinois Tool Works Inc. where he had worked since 1999. Illinois Tool Works Inc. is a multinational manufacturer of highly engineered products and specialty systems. From October 1997 to December 1999, he was Chairman of the Board, President and Chief Executive Officer of Premark International, Inc., a multinational manufacturer and marketer of food equipment, decorative products and consumer products. From 1996 to September 1997, he served as President and Chief Executive Officer of Premark International, Inc. and as President and Chief Operating Officer from 1992 until 1996. Mr. Ringler is also a director of The Dow Chemical Company, FMC Technologies, Inc. and Autoliv, Inc. Mr. Ringler is also a National Trustee of the Boys and Girls Clubs of North America, Midwest Region and a director of the Lyric Opera of Chicago.

 

The Board recommends that you vote FOR the nominees for Class II directors.

Class III directors continuing in office until 2009

 

LUIS ARANGUREN-TRELLEZ

 

Age — 46

Director since 2003

Member of the Finance Committee

 

Executive President of Arancia Industrial, S.A. de C.V.

 

Mr. Aranguren-Trellez has been, since 2000, the Executive President of Arancia Industrial, S.A. de C.V., a holding company with interests in the food and enzyme industries, special textile rent to hospital sector and food service and logistics. Arancia Industrial is a Mexican company that is owned by Mr. Aranguren-Trellez and his brothers. Arancia Industrial was the former joint venture partner with the company in corn wet milling and refining operations in Mexico. Previously, Mr. Aranguren-Trellez served as Operations Director of CPIngredientes, S.A. de C.V., Corn Products’ Mexican subsidiary, from 1996 until 2000, and had served in various other management positions with that company and its predecessors since 1989. He was also a director of Sistemas Pecuarious, S.A. de C.V. from 1998 to 2004, a joint venture between private Mexican and Great Britain companies, and he is at present Chairman of PFS de Mexico, S.A. de C.V. a private Mexican company in the food service and logistics area. Mr. Aranguren-Trellez is also a member of the Regional Consulting Board of Telefonos de Mexico, S.A. de C.V., as well as of Banco Nacional de Mexico, S.A., the Citicorp Mexican bank subsidiary.

 

PAUL HANRAHAN

 

Age — 50

Director since 2006

Member of the Compensation Committee

 

President and Chief Executive Officer of The AES Corporation

 

Mr. Hanrahan is the President and Chief Executive Officer of The AES Corporation, one of the world’s leading independent power producers. He was Executive Vice President and Chief Operating Officer of The AES Corporation and President and Chief Executive Officer of AES China Generating Co., Ltd. from 1993 until 2002, and Managing Director of AES Transpower from 1990 until 1993. He joined AES in 1986 as a Project Director. Mr. Hanrahan serves as a director of The AES Corporation.

 

WILLIAM S. NORMAN

 

Age — 69

Director since 1997

Lead Director, Chairman of the Corporate Governance and Nominating Committee

and member of the Compensation Committee

 

Former President and Chief Executive Officer of the Travel Industry Association

 

Mr. Norman retired in 2005 from the Travel Industry Association, a trade association for the travel industry, where he had been President and Chief Executive Officer since 1994. Previously, he served as Executive Vice President of the National Railroad Passenger Corporation (AMTRAK), a rail transportation company, from 1987 to 1994. He is the Chairman of the Board of the LMI, a nonprofit government consulting organization dedicated to improving management of the US Federal Government, and a director of the Travel Industry Association and the International Consortium for Research on the Health Effects of Radiation. He is also a Vice Chairman of the Board of Trustees of West Virginia Wesleyan College and a member of the Board of Overseers of the Hospitality Hall of Honor and Archives.

Class I directors continuing in office until 2010

 

KAREN L. HENDRICKS

 

Age — 59

Director since 2000

Chairperson of the Finance Committee and member of the Corporate Governance and

Nominating Committee

 

Former Chairman, President and Chief Executive Officer of Baldwin Piano & Organ Company

 

Ms. Hendricks is the former Chairman, President and Chief Executive Officer of Baldwin Piano & Organ Company of Cincinnati, Ohio, a maker of fine musical instruments, where she served from 1994 to April 2001. From 2003 until 2005 she served as a Leadership Development Consultant at Lee Hecht Harrison, a global career management services organization. Ms. Hendricks is currently Vice Chair of the Board of Trustees of The Ohio State University, on the Executive Committee of the Board of Directors of the Cincinnati Chapter of the American Red Cross, on the Board of Trustees of the Association of Governing Boards of Universities and Colleges, and Chairman of the Board of the James Cancer Hospital and Richard Solove Research Center, in Columbus, Ohio.

 

BERNARD H. KASTORY

 

Age — 62

Director since 1997

Member of the Audit Committee

 

Former Professor of Business Administration at Skidmore College and Former Senior Corporate Executive at Bestfoods

 

Mr. Kastory taught business strategy in the Business Department at Skidmore College from 2001 through 2007. He served as a Senior Vice President of Bestfoods (formerly known as CPC International) from 1999 to 2001 with responsibility for its Asian, Latin American and Baking divisions. Bestfoods, which was acquired by Unilever in 2000, was a global producer of consumer food products. Previously, he served as Senior Vice President — Finance and Administration of Bestfoods from 1997 until 1999, as Chairman and Chief Executive Officer of Bestfoods’ Baking Business from 1995 until 1997 and as President of its Corn Refining Business and Vice President of CPC International since 1992. Mr. Kastory is a member of the Advisory Board of Bimbo Bakeries USA, an affiliate of Grupo Bimbo, and is a member of the Finance Committee of Double H Ranch, a camp for children with cancer.

BARBARA A. KLEIN

 

Age — 53

Director since 2004

Member of the Audit Committee

 

Senior Vice President and Chief Financial Officer of CDW Corporation

 

Ms. Klein has served as the Senior Vice President and Chief Financial Officer of CDW Corporation, a direct marketer of multi-brand information technology products, since 2002. Ms. Klein intends to retire as Chief Financial Officer of CDW, but has agreed to continue to serve until a new Chief Financial Officer is hired. CDW was acquired by an entity controlled by investment funds affiliated with Madison Dearborn Partners, LLC and Providence Equity Partners on October 12, 2007. Previously, she served as the Vice President and Chief Financial Officer of Dean Foods Company, a food and beverage company, from 2000 to 2002 and was the Vice President and Corporate Controller of Ameritech Corporation, a telecommunications company, from 1996 to 2000. Ms. Klein is a director of Cabot Microelectronics Corporation. Ms. Klein belongs to the Financial Executives Institute, the Chicago Finance Exchange and the Chicago Network. She also serves on the board of the Tax Assistance Program, a not-for-profit entity.

 

SAMUEL C. SCOTT III

 

Age — 63

Director since 1997

 

Chairman, President and Chief Executive Officer of the Company

 

Mr. Scott has served as Chairman and Chief Executive Officer of the company since February 2001 and President since 1997. Mr. Scott also served as Chief Operating Officer from 1997 through January 2001. Previously, he served as President of the worldwide Corn Refining Business of CPC International, Inc.; now Unilever Bestfoods, from 1995 to 1997 and was President of CPC International’s North American Corn Refining Business from 1989 to 1997. He was elected a Vice President of CPC International in 1991. Mr. Scott is a director of Motorola, Inc., The Bank of New York Mellon Corporation, Abbott Laboratories, ACCION International, The Executives’ Club of Chicago and The Chicago Council on Global Affairs. He is also a Trustee of the Conference Board. Mr. Scott is Lead Director of Motorola and Chairman of Motorola’s Compensation and Leadership Committee. Mr. Scott recently informed the Board of his intention to retire as President and Chief Executive Officer of the company upon the hiring of his successor and completion of a smooth transition period.

 

 

The business and affairs of the company are conducted under the direction of its Board of Directors.

 

The Board of Directors is currently comprised of 11 directors. Immediately prior to the annual meeting, the Board will consist of 10 members, nine of whom are outside (non-employee) directors. The other member of the present board, Mr. G.E. Greiner, is retiring from the Board effective immediately prior to the annual meeting.

 

In the interim between annual meetings, the board has the authority under the company’s by-laws to increase or decrease the size of the board and to fill vacancies.

 

The Board of Directors has determined that the following 9 directors satisfy the New York Stock Exchange’s definition of independent director: R. J. Almeida, G. E. Greiner, P. Hanrahan, K. L. Hendricks, B. H. Kastory, G. B. Kenny, B. A. Klein, W. S. Norman and J. M. Ringler.

 

The board held 6 meetings in 2007. Each director attended at least 75 percent of the meetings of the board and the committees of the board on which he or she served during 2007. As a group, the directors’ meeting attendance averaged 97 percent for the year.

The company encourages, but does not require, its directors to attend the annual meeting. Last year, all 11 of our directors attended the annual meeting.

 

Non-management directors meet regularly in executive sessions without management. Executive sessions are held in conjunction with each regularly scheduled meeting of the board. “Non-management” directors are all those who are not company officers and may include directors who are not “independent” by virtue of the existence of a material relationship with the company.

 

Board policy requires outside directors to retire no later than the annual meeting following their 72nd birthday. Employee directors, including the CEO, are required to retire from the board upon retirement as an employee, unless the board determines otherwise in unusual circumstances. Board policy requires executive officers to retire at age 65.

 

The company’s Governance Principles and Policies on Business Conduct are available in the “Governance” section of the company’s website at http://www.cornproducts.com.

 

Lead Director.  William S. Norman is the Lead Director. The responsibilities of the Lead Director include attending and presiding at meetings of the Board of Directors in the absence of the Chairman and presiding at executive sessions conducted without management, except for meetings where executive performance and compensation are discussed, which are presided over by the chairperson of the Compensation Committee. The Lead Director serves as a liaison between the directors and the Chief Executive Officer, provides direct feedback to the Chief Executive Officer on a variety of matters discussed in the executive sessions without management and serves as an informal communication link between the directors and management. The Lead Director oversees that the board discharges its responsibilities and helps to manage the boundaries between board and management responsibilities. He or she also makes recommendations to the Chairman of the Board and the Chairman of the Corporate Governance and Nominating Committee regarding matters to be included on the board agendas and the informational needs associated with those agendas and presentations. The Lead Director works with the Chairman of the Board to ensure that the board works in an independent, productive fashion and is alert to its obligations to the stockholders. He or she works with the Chairman of the Board to ensure that board meetings are conducted in such a manner as to allow adequate time and opportunity for appropriate discussion of matters brought before the board. The Lead Director has the authority to call meetings of independent directors and assumes those other responsibilities which the independent directors may designate from time to time.

 

Committees of the Board.  The board currently has four standing committees: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee and the Finance Committee. Each of these committees operates pursuant to a written charter adopted by the board. These charters are available in the “Governance” section of our website at http://www.cornproducts.com.

 

Audit Committee

 

Our Audit Committee is composed entirely of independent directors as “independent” is defined under the rules of the New York Stock Exchange. Each of the members of the Audit Committee is “financially literate” as required by the rules of the New York Stock Exchange. The board has determined that the company has more than one member of the Audit Committee who meets the legal requirements of an audit committee financial expert, one of whom is Mr. James M. Ringler, the Chairman of the Committee.

 

This committee assists the board in fulfilling its oversight responsibilities in the areas related to the financial reporting process and the systems of financial control. The Audit Committee also acts as a separately-designated standing audit committee established in accordance with the Securities Exchange Act of 1934 (the “Exchange Act”). The company’s independent auditors are accountable to and meet privately with this committee on a regular basis. This committee also conducts ongoing reviews of potential related party transactions, including the review and approval of all ”related party transactions” as defined under Securities and Exchange Commission rules.

 

Members of the Audit Committee are J. M. Ringler (Chairman), B. H. Kastory, G. B. Kenny and B. A. Klein. This committee held 9 meetings during 2007 and has furnished the report appearing on page 43.

Compensation Committee

 

Our Compensation Committee is composed entirely of independent directors as “independent” is defined under the rules of the New York Stock Exchange. Each of the members of the Compensation Committee is also a “non-employee director” as that term is defined under Exchange Act Rule 16b-3 and an “outside director” as that term is defined in Treasury Regulation § 1.162-27(3).

 

This committee:

 

 

Our Compensation Committee, together with our other independent, outside, non-employee directors, reviews and approves corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluates our Chief Executive Officer’s performance in light of those goals and objectives and, together with our other independent, outside, non-employee directors establishes our Chief Executive Officer’s compensation, based on the Committee’s evaluation of the Chief Executive Officer’s performance.

 

The corporate goals and objectives are developed by our management and approved by the board. Management recommends base salaries and short- and long-term incentive awards for our executive officers other than our Chief Executive Officer, based on external market information and internal equity. Our Compensation Committee reviews these recommendations and approves the base salaries and short- and long-term incentive awards for the executive officers of the company other than our Chief Executive Officer. The Compensation Committee also reviews and approves compensation under equity-based plans for our executives other than our Chief Executive Officer.

 

Our Compensation Committee has an independent consultant, Hewitt Associates, LLC, to advise it with respect to incentive plan design, external market information and other compensation matters. Hewitt Associates generally attends meetings of the Committee and also communicates with the Committee outside of meetings. Our Compensation Committee has told Hewitt Associates that:

 

 

Payments to Hewitt Associates for services provided in 2007 other than those provided to the Compensation Committee constituted less than 10% of payments to Hewitt Associates for services provided in 2007.

 

Our Compensation Committee meets with our Chief Executive Officer annually to review the performance of our executive officers. This meeting includes an in-depth review of our executive officers’ performance and our succession plans. The same review is presented to the full board each year. Similarly, the Compensation Committee reviews the Chief Executive Officer’s performance and meets independently of the Chief Executive Officer to discuss his compensation. This review is also presented to the full board each year.

 

Our Chief Executive Officer generally attends meetings of the Compensation Committee by invitation of the Committee.

 

The members of the Compensation Committee are R. J. Almeida (Chairman), W. S. Norman and P. Hanrahan. This committee held 4 meetings during 2007.

 

Corporate Governance and Nominating Committee

 

Our Corporate Governance and Nominating Committee is composed entirely of independent directors as “independent” is defined under the rules of the New York Stock Exchange.

 

This committee recommends candidates to be nominated for election as directors at our annual meeting, consistent with criteria approved by the board, develops and regularly reviews corporate governance principles and related policies for approval by the Board, oversees the organization of the board to discharge the board’s duties and responsibilities properly and efficiently, and sees that proper attention is given and effective responses are made to stockholder concerns regarding corporate governance. Other specific duties and responsibilities of the Corporate Governance and Nominating Committee include: annually assessing the size and composition of the board, including developing and reviewing director qualifications for approval by the board, identifying and recruiting new directors and considering candidates proposed by stockholders, recommending assignments of directors to committees to ensure that committee membership complies with applicable laws and listing standards, conducting a preliminary review of director independence and financial literacy and expertise of Audit Committee members, and overseeing director orientation and continuing education. The Corporate Governance and Nominating Committee also reviews proposed changes to our certificate of incorporation, by-laws and board committee charters, assesses and makes recommendations regarding stockholder rights plans or other stockholder protections, as appropriate, conducts ongoing reviews of potential conflicts of interest, reviews and approves the designation of any employee directors or executive officers for purposes of Section 16 of the Exchange Act (“Section 16 Officers”) standing for election for outside for-profit boards of directors, reviews stockholder proposals in conjunction with the Chairman of the Board and recommends board responses, oversees the self-evaluation of the board and its committees, and reviews requests for indemnification under our by-laws.

 

The company retains a professional third-party search firm to help identify and facilitate the screening and interview process for director nominees. The Corporate Governance and Nominating Committee maintains, with the approval of the board, formal criteria for selecting director nominees. The criteria used for selecting director nominees are included as Appendix A to this proxy statement. In addition to these minimum requirements, the Corporate Governance and Nominating Committee will also evaluate whether the candidates’ skills and experience are complementary to the existing board members’ skills and experience as well as the board’s need for operational, management, financial, international, technological or other expertise. The search firm identifies and screens the candidates, performs reference checks, prepares a biography for each candidate for the Corporate Governance and Nominating Committee to review and assists in setting up interviews. The Corporate Governance and Nominating Committee members interview candidates that meet the criteria and select those that it will recommend to the board for nomination. The board considers the nominees and selects those who best suit the needs of the board for nomination or election to the board.

 

The Corporate Governance and Nominating Committee will consider qualified candidates for director nominees suggested by our stockholders. Stockholders can suggest qualified candidates for director nominees by writing to the Corporate Governance and Nominating Committee, c/o the Corporate Secretary, at Corn

Products International, Inc., 5 Westbrook Corporate Center, Westchester, Illinois 60154. The Corporate Governance and Nominating Committee intends to evaluate candidates proposed by stockholders in the same manner as other candidates.

 

Members of the Corporate Governance and Nominating Committee are W. S. Norman (Chairman), R. J. Almeida, K. L. Hendricks and J. M. Ringler. This committee held 5 meetings during 2007.

 

Finance Committee

 

Our Finance Committee is composed of four directors. This committee assists the board in fulfilling its oversight responsibilities in the specific areas of capital structure, leverage and tax implications thereof, risk management and the preservation of assets, investments, and employee pension plans.

 

Members of the Finance Committee are K. L. Hendricks (Chairperson), L. Aranguren-Trellez and G. E. Greiner. This committee held 3 meetings during 2007.

 

The following displays the individual components of our outside director compensation. Mr. Scott, whose compensation is included in the Summary Compensation Table below, received no additional compensation for serving as a director.

 

 

These retainers were increased to these amounts effective July 1, 2007. This was the first increase in these retainers since July, 2004. The increased amounts were intended to place the retainers at levels comparable to those paid by similarly-sized companies. The Compensation Committee and the board believe these to be appropriate levels in terms of the responsibilities born by the directors and the market for director compensation.

 

One half of each retainer is required to be paid to the directors in the form of restricted stock units under our Stock Incentive Plan that are deferred until after retirement. Directors may choose to receive the balance of their retainers in cash or to defer all or a portion of the balance into restricted stock units. All directors are reimbursed for board and committee meeting expenses, but no meeting attendance fees are paid in addition to the annual retainers.

The following table summarizes the compensation earned by our directors other than Mr. Scott for service during 2007.

 

 

 

 

The following table contains information relating to stock options held by directors at December 31, 2007.

 

 

These options were granted in October 2001, May 2002 and April 2003. This program was then discontinued. All of the options became exercisable one half on the first anniversary of the date of grant and the balance became exercisable on the second anniversary of the date of grant.

 

The following table shows, as of December 31, 2007, all persons or entities that the company knows are beneficial owners of more than five percent of the company’s issued and outstanding common stock.

 

 

 

 

The following table shows the ownership of company common stock as of February 29, 2008, of each director, each named executive officer and all directors and executive officers as a group.

 

 

 

 

This section provides information concerning our compensation programs in which our principal executive officer, principal financial officer and our three most highly-compensated executive officers other than our principal executive officer and principal financial officer (“named executive officers”) participated in 2007. The named executive officers are based in the U.S., other than Mr. Jorge Fiamenghi who is an employee of our Brazilian subsidiary. This discussion includes information concerning, among other things, the overall objectives of our compensation program and each element of compensation that we provide.

 

Overview of Compensation Philosophy and Programs

 

Our Compensation Committee establishes our compensation philosophy. Our executive compensation programs are designed by our Compensation Committee based on recommendations by management and advice from a nationally-known compensation consulting firm, Hewitt Associates, LLC, and administered by our Human Resources Department. Our Chief Executive Officer and Vice President, Human Resources make recommendations concerning base salary, short- and long-term incentive compensation and plan design to our Compensation Committee. Our Compensation Committee approves all forms of compensation for our named executive officers, including base salary, short- and long-term incentive compensation, plan design and goals.

 

We are committed to maximizing shareholder value, and we are dedicated to attracting and retaining the necessary talent to accomplish this objective. Our compensation philosophy is designed to directly align the interests of shareholders and employees through compensation programs that will reward employees for performance that builds long-term shareholder value.

 

The objectives of our compensation programs are to:

 

 

We use a variety of compensation elements to achieve these objectives, including base salary, annual incentives, equity-based awards, employee benefits, and a modest amount of perquisites, all of which we discuss in detail below.

 

To meet our objectives, elements of compensation are based on three fundamental principles.

 

The Named Executive Officers’ Compensation Will Be Performance-Based.  Our executive compensation programs are designed to motivate our executive officers to maximize shareholder returns by achieving growth and value generation goals. Our programs provide this motivation in a number of ways. Our named executive officers may earn cash payments under our Annual Incentive Plan (which provides for payments on the basis of performance over a one-year period) with target awards ranging from 60% to 105% of the named executive officer’s base salary. Whether and to what extent payments are made under the Annual Incentive Plan depends entirely on the extent to which company-wide and divisional goals approved by the Compensation Committee, based on financial goals for the company approved by the Board of Directors, are achieved. Equity-based compensation is, as discussed below, delivered in the form of performance shares which are earned if, and only to the extent that, performance goals are met, and stock options, which have value only if our common stock appreciates in value after the date the stock options are granted.

 

A Substantial Portion of Named Executive Officer Compensation Will Be Delivered in the Form of Equity Awards.  The Compensation Committee believes that a substantial portion of total compensation should be

delivered in the form of equity in order to align the interests of our named executive officers with the interests of our shareholders. In 2007, approximately half of the equity compensation provided to our named executive officers was delivered in the form of performance shares. The balance of the equity compensation delivered to our named executive officers in 2007 was in the form of stock options that vest based on the passage of time, focusing executives on the creation of shareholder value over the long term and encouraging equity ownership.

 

Our Compensation Program for Named Executive Officers is Designed to Enable Us to Attract and Retain First-Rate Executive Talent.  We believe that shareholders are best served when we can attract and retain talented executives with compensation packages that are competitive. Therefore, we target base salary for the named executive officers at the 50th percentile relative to officers of a compensation survey group of companies and short- and long-term incentive compensation at the 60th percentile of officers in that group of companies. We target incentive compensation at the 60th percentile to place more emphasis on variable compensation and motivate and reward exceptional goal achievement. The Compensation Committee engages Hewitt Associates to provide information regarding compensation practices of the compensation survey group to assist it in making the comparison to the survey group. This market data is also shared with management. In January 2007, the compensation survey group consisted of the following 24 companies:

 

 

Henkel Corporation, which acquired The Dial Corporation after January 2007, has replaced The Dial Corporation in the compensation survey group. The survey group data generally reflects companies that have business operations that are similar to ours, including similar type industries, sales volumes, market capitalizations and international operations.

 

We use this compensation survey group because we believe it is representative of industries from which we may attract management talent. We are the 18th largest of the 25 companies including us and the compensation survey group in terms of annual sales. Hewitt Associates applies regression analysis to account for differences in size (i.e. revenues) of these companies in deriving the market value of each compensation element. We also periodically obtain compensation data concerning a wider group of general industrial companies of similar size to us to provide an additional and broader view of compensation levels and trends. For purposes of measuring relative total shareholder return we utilize a different group of 26 companies (the “performance plan peer group”) who, based on their Standard Industrial Classification codes, are engaged in businesses similar to ours. We use this group, which consists of companies that were included in the former S&P Basic Materials Index, as we were, because we believe investors are more likely to consider the stocks of these companies as alternatives to an investment in our stock than the companies in the compensation survey group, in part because their business operations are more similar to ours. We believe the use of two separate groups of companies is appropriate and not uncommon given the different purposes for comparison.

 

We determine all elements of compensation annually at the same time in order to consider the relationships between all of the compensation elements as well as assess the appropriateness of the total compensation package for each named executive officer. To accomplish this, we review the strength of our financial performance, the executive officers’ positions and levels of responsibility, internal comparisons,

individual performance, and historical grant levels, as well as the competitive market data of the compensation survey group.

 

Elements of Compensation

 

This diagram depicts the elements of compensation we provide, and the shaded boxes under the Annual Incentives Box and those under the Performance Shares Box identify the metrics we used in 2007 to measure performance and earn those two components of performance-based compensation.

 

 

Our compensation program has five components:  base salary, annual incentives, long-term incentive compensation, benefit programs broadly available to employees and a modest amount of perquisites. Each element is addressed in the context of competitive conditions and internal comparisons. The annual and long-term incentive plans’ designs, including objectives, metrics, thresholds and other elements are reviewed annually for alignment to our business objectives and competitiveness. Accordingly, there may be changes from year to year in the metrics or other plan design elements we use to measure performance and earn those two components of compensation.

 

Base Salary:  We target base salaries at the 50th percentile of the compensation survey group in an effort to be competitive with median compensation levels for the positions we fill. The specific named executive officer’s salary varies based on the level of his or her responsibility, experience, time in position, internal equity considerations and individual performance. Salaries are reviewed annually. All salary actions with respect to named executive officers other than the Chief Executive Officer are recommended by our Chief Executive Officer and reviewed and approved by the Compensation Committee. Our Chief Executive Officer’s recommendations are made at the conclusion of our Performance Enhancement Process (“PEP”). The PEP requires our Chief Executive Officer to evaluate the other named executive officers’ performance and contributions against objective metrics and results and assign a performance rating on a seven point scale from a rating of not meeting expectations to a rating of consistently exceeding expectations. This rating system is used for all domestic employees and management level employees of our international operations. Based on

these ratings our Chief Executive Officer establishes salary recommendations. He also considers the named executive officer’s time in his or her position and the salary midpoint for the corresponding position in the compensation survey group.

 

Annual Incentive Plan:  Our Annual Incentive Plan is our short-term incentive cash compensation program for officers and other key domestic and international employees, including the named executive officers. This plan was adopted by our Board of Directors in December 1997, approved by our shareholders in 2000 and approved by our shareholders as amended in 2005.

 

Since its implementation, our Annual Incentive Plan has fostered and supported our pay-for-performance philosophy by providing executive officers and other employees with direct incentives to achieve specific financial goals that are recommended by management and reviewed and approved by the Compensation Committee based upon financial goals for the company approved at the beginning of the year by our Board of Directors. These plan goals are intended to align performance with our shareholders’ interests. We target short-term incentive levels for our executive officers to place them at the 60th percentile of short-term incentive levels for executive officers in their positions in the compensation survey group in order to place more emphasis on variable compensation and to motivate and reward exceptional goal achievement. Actual payments relative to target levels are based on our performance relative to the financial goals. This variable annual incentive compensation closely links total cash compensation to annual financial results, delivering lower than market total cash compensation in times of poor financial performance and higher total cash compensation in times of excellent performance.

 

The Compensation Committee approves an annual cash short-term incentive target for each named executive officer expressed as a percentage of base salary. For 2007, the target awards for the named executive officers ranged from 60% to 105% of base salary depending on the officer’s position, as shown in the table below. Incentive targets are established by the Compensation Committee in part based on market data provided by Hewitt Associates and in part based on our Chief Executive Officer’s recommendations concerning short-term incentive target awards for specific named executive officers (other than himself).

 

Executive Annual Incentives — 2007

 

 

 

 

Annual incentives paid for 2007 were determined based upon achievement of goals set for corporate and divisional financial results and achievement of cash flow from operations goals. Financial objectives for 2007 were weighted at 80% for the achievement of an earnings per share goal and 20% for achievement of a cash flow from operations goal for Mr. Scott, Ms. Beebe and Mr. Ripley. For Mr. Fortnum and Mr. Fiamenghi, who are divisional presidents, their 80% weighted financial objectives were subdivided into 60% of the 80% (or 48%) for the achievement of the earnings per share goal and 40% of the 80% (or 32%) for the achievement of divisional operating income goals, with the balance of 20% for the achievement of the company-wide cash flow from operations goal. Management recommended and the Compensation Committee approved these weightings because they viewed earnings per share and operating income as the foundation for our growth

and, as a result shareholder value and viewed cash flow from operations as another key financial metric. Mr. Fortnum’s and Mr. Fiamenghi’s goals included divisional operating income goals for the divisions of which they are the presidents in order to provide an incentive for superior performance of those divisions and as incentives with respect to matters they are in a better position to impact directly.

 

A scale developed for each metric permits participants in our Annual Incentive Plan to earn from 0% up to 200% of their annual incentive targets based on achievement of from 80% to 140% of the earnings per share and operating income goals and from 85% to 115% of the cash flow from operations goal. Achievement of a minimum of 65% of the earnings per share goal is required to earn any portion of the cash flow from operations portion of the award.

 

Weightings Assigned in 2007 to Each Performance Objective under the
Annual Incentive Plan for the Named Executive Officers

 

 

For 2007, the performance objectives for each of the named executive officers included earnings per share of $1.95 and cash flow from operations of $233 million to achieve target award levels. Our actual 2007 earnings per share and cash flow from operations were $2.59 per share and $258 million, both of which were record levels. The $1.95 earnings per share goal was above the midpoint of our annual earnings guidance as of January 30, 2007 and reflected an approximately 20% increase over our 2006 earnings per share. The divisional operating income target award levels were established at levels anticipated to be challenging but attainable if the goals set for corporate results were achieved. We earned a record level of operating income in 2007, and Mr. Fortnum and Mr. Fiamenghi each earned more than his target, but less than his maximum award for record performance. Achievement of divisional operating income goals has varied over the past five years with payments ranging from no payment to 198% of the target award for our North America and South America divisions.

 

Our Board of Directors reviews goals and objectives for the company. The Compensation Committee, together with the company’s other independent, outside, nonemployee directors, reviews and approves corporate goals and objectives relevant to our Chief Executive Officer’s compensation in light of those objectives for the company. The Committee in conjunction with the company’s other independent, outside, nonemployee directors evaluates the Chief Executive Officer’s performance in light of those goals and objectives. The Committee discusses the evaluation with the other directors and recommends compensation for the Chief Executive Officer to the independent, outside, non-employee directors who approve the Chief Executive Officer’s compensation, including base salary and short-and long-term incentive awards.

 

To be eligible to receive an incentive payment for a performance period, a named executive officer must (i) be an employee of the company on the last day of the performance period, or have terminated employment during the performance period due to retirement, disability or death, and (ii) have been employed by the company more than six months of the performance period. A named executive officer who is eligible to receive an incentive payment for a performance period, but who was not actively employed during the entire performance period, will receive a prorated payment determined in accordance with rules approved by the Compensation Committee. Annual incentive awards for each performance period are to be paid within two and one-half months after the end of the one-year performance period.

Our Chief Executive Officer can recommend a negative adjustment to the amount of the Annual Incentive Plan award earned by any other named executive officer based on his judgment of that individual’s performance and/or his judgment of the degree of difficulty of the goal. The Compensation Committee can further adjust the total amount earned and calculated by the formula for a named executive officer to anywhere from no amount earned to 100% of the calculated amount based on the relative strength or weakness of the individual’s performance.

 

Discretionary Cash Bonuses.  As a result of his excellent performance and the company’s record performance in 2007, our Chief Executive Officer received a cash bonus in February 2008. Based on his judgment concerning their performance and results achieved in 2007, our Chief Executive Officer recommended and the Compensation Committee approved the payment of cash bonuses to Ms. Beebe, Mr. Fortnum and Mr. Fiamenghi. These bonuses were awarded to recognize and reward significant individual achievement and these officers’ contributions to the company’s record performance.

 

Long-term Incentive Compensation:  The principal purpose of our long-term incentive compensation program is to promote our long-term financial success through achievement of long-range performance goals that will enhance our value, and, as a result, should enhance the price of our stock and our shareholders’ returns on their investments. For our named executive officers, long-term incentive compensation comprises from 43% to 48% of their total compensation (base salary plus short- and long-term incentive compensation) which we feel provides an appropriate balance between shorter- and longer-term compensation and fixed and variable components. We award long-term incentives to our executive officers in the form of non-qualified stock options and performance shares, granted pursuant to our Stock Incentive Plan. Our goal is to provide awards such that we deliver approximately 50% of the grant date fair value of the long-term incentive award in the form of non-qualified stock options and the remaining 50% in the form of performance shares. We use these allocations to provide a balance of the key drivers of shareholder value creation, with stock options providing compensation based solely on increases in our share price, and performance shares providing compensation based both on relative share price appreciation and the achievement of specific corporate performance goals that are not subject to market fluctuations but ultimately tend to be closely correlated with increasing shareholder value. We continue to evaluate the appropriate mix of long-term incentive compensation vehicles in comparison to the market to best support our long-term business strategy.

 

Long-term incentive award amounts are established based on position level using competitive market data of the compensation survey group and a Black-Scholes valuation methodology.

 

Stock Options.  We determined the January 2007 grant of non-qualified stock options by converting 50% of the targeted long-term incentive compensation value for each named executive officer to a number of stock options using an estimated Black-Scholes option value. Stock options were granted to eligible management employees and the exercise price of such options was established on January 23, 2007. These are non-qualified stock options with ten-year terms that vest in one-third increments on the first three anniversaries of the date of the grant.

 

In recent years we have made option grants annually in January. We make the grants at the same time other elements of compensation are determined so that we can consider all elements of compensation in making the grants. In past years we have set the exercise price as the average of the high and low prices of our common stock on the date of grant and have historically granted non-qualified stock options. Beginning in 2008, the exercise price is the closing price on the date an option is granted, which is the “grant date fair value” for purposes of certain disclosures in this proxy statement.

 

Performance Shares.  Each year performance shares with a current value of 50% of the targeted long-term incentive compensation value are granted for an overlapping three-year performance period beginning with the year of the grant. Fifty percent of the performance shares are earned based on the achievement of a relative total shareholder return (“TSR”) goal, and 50% of these awards are earned based on the achievement of a return on capital employed (“ROCE”) goal over the three-year period.

 

For the 2007 performance share awards, a named executive officer can earn up to 200% of his or her performance share award based on our performance over the entire three-year performance period as measured

against TSR and our results in achieving our ROCE goal. The performance shares are earned and payable only after the third year in the performance cycle, based on the TSR percentile ranking and ROCE results. No dividends are earned on any performance shares prior to the end of the three-year performance cycle.

 

Total Shareholder Return

 

The TSR goal for the 2007-2009 cycle is based on the relative percentile ranking with respect to the performance plan peer group with performance shares earned in accordance with the following chart (with interpolation between levels stated in the chart):

 

 

Unless otherwise determined by the Compensation Committee, a minimum of a positive TSR must be achieved at the end of the three-year cycle for this portion of the performance share award to be earned. We set the target award at the 55th percentile because we want to reward above-average performance in our long-term incentive plan.

 

TSR is determined for this purpose as follows:

TSR = (Change in Stock Price + Dividends Paid)/Beginning Stock Price

 

Change in Stock Price is the difference between the Beginning Stock Price and the Ending Stock Price. Beginning Stock Price is the average of the daily average prices for each of the 20 trading days immediately prior to the first day of the performance period. Ending Stock Price is the average of daily average prices for each of the last 20 trading days of the performance period. The daily average prices are the average of the high and low price on the New York Stock Exchange for one share of common stock on the date of determination. Dividends Paid are the total of all dividends paid on one share of common stock during the applicable calendar quarter(s) during the performance period with dividends treated as though they are reinvested at the end of each calendar quarter based on the stock price at the end of each calendar quarter.

 

The Beginning Stock Price for the 2007-2009 cycle is $35.87.

 

The current performance plan peer group consists of the 26 companies listed below who, based on their Standard Industrial Classification codes, are similar to us. If two companies in the group merge, or one is acquired, the new company will be included in the group. If a company merges with a company not in the group or if a company declares bankruptcy, the company will be removed and its TSR will not be included as part of the performance plan peer group. In 2007, Delta & Pine Land Co. was removed from the group due to its acquisition by Monsanto Company; Domtar Inc. was removed due to its merger with Weyerhaeuser Company’s fine paper business; Pope and Talbot Inc. was removed due to its bankruptcy; and members Abitibi Consolidated Group and Bowater, Inc. merged to form AbitibiBowater Inc.

 

 

 

These companies were recommended by management and approved by our Compensation Committee on the basis of their Standard Industrial Classification codes and their inclusion in the former S&P Basic Materials Index in which we were also included. The performance plan peer group is utilized for this purpose rather than the compensation survey group because we believe investors are more likely to consider the stocks of these companies as alternatives to an investment in our stock than the companies in the compensation survey group, in part because their business operations are more similar to ours. We would rank 11th in terms of annual sales if we were included with the performance plan peer group. We believe that the compensation survey group is more representative of industries from which we may attract talent. Therefore, we use it to determine competitive compensation levels.

 

Return on Capital Employed

 

Fifty percent of the performance shares can be earned based on achievement, at the end of the three-year cycle, of a ROCE goal that was established at the commencement of the three-year cycle for the 2007 performance plan.

 

A scale developed for this metric permits participants to earn from 0% up to 200% of their long-term incentive targets based on achievement of from 93% to 112% of the ROCE target goal. The ROCE goal was set at a level which the Committee expected the company to attain with above-average performance.

 

ROCE is determined by dividing our net operating profit after tax for the third year of the performance cycle by the amount of our capital employed based on the opening balance sheet of the third year of the three-year performance cycle. Capital employed is defined for this purpose as the sum of our total stockholders’ equity plus cumulative translation adjustment, minority interest in subsidiaries, redeemable common stock and total debt less our cash and cash equivalents.

 

The Compensation Committee may change the ROCE goal during the three-year period if it determines that an extraordinary event has occurred. In addition, once the number of performance shares to be awarded has been determined based on our results, the Compensation Committee may decrease or eliminate entirely the number of performance shares earned based on whether the participant’s individual performance during the performance period was unacceptable. The Compensation Committee relies upon management recommendations, which are based on their judgment, to determine whether performance by named executive officers other than the Chief Executive Officer was unacceptable.

 

The number of shares of common stock, if any, that recipients of performance share awards in 2007 will receive in relation to such awards will be based upon the extent to which we attain the TSR and ROCE goals approved by the Compensation Committee for the three-year cycle beginning on January 1, 2007 and ending on December 31, 2009. The earned awards will be paid in shares of our common stock.

 

The Compensation Committee approved a revised design of the long-term incentive plan for the awards granted in 2008 in light of our having achieved a ROCE in excess of our cost of capital in 2007. This was the first time in our ten years as an independent public company that our ROCE exceeded our cost of capital.

Having achieved that level of return, the Committee determined that a goal based on ROCE should be complemented with a goal to achieve earnings per share growth objectives. Therefore, half of the performance shares granted in 2008 will be earned based on a matrix that combines a compounded annual earnings per share growth goal with ROCE results for the three-year performance period.

 

Retirement and Other Benefits.  We also provide benefits such as medical, dental and life insurance and disability coverage to each U.S.-based named executive officer. These benefits are also provided to all eligible U.S.-based employees. Eligible employees, including the named executive officers, can purchase additional life, dependent life and accidental death and dismemberment coverage as part of their active employee benefits. In addition, all salaried employees in the United States are eligible to participate in our Cash Balance Pension Plan, our Retirement Savings Plan, and our Retiree Health Care Spending Accounts (“RHCSA”). Select employees are provided with split-dollar life insurance under our legacy Executive Life Insurance Plan that was established prior to our becoming an independent public company and is now frozen.

 

Cash Balance Plan.  Our Cash Balance Plan is a defined benefit qualified pension plan which is available to all U.S. salaried employees, including the named executive officers other than Mr. Fiamenghi. Accounts of participants in the Cash Balance Plan accrue pay credits based on years of service and monthly interest credits using a rate equal to a specified amount above the interest rate on short-term Treasury notes. Pay credits are calculated as a percentage (3% to 10%) of a salaried employee’s eligible compensation (defined as base salary, overtime, and earned Annual Incentive Plan award). The pay credit percentage is determined by the employee’s years of service and reaches and remains at 10% after 35 years of service. The value of a participant’s account at retirement is paid out either as a life or a joint and survivor annuity or in an optional form, such as a lump sum if certain funding conditions are met. The Cash Balance Plan provides for a five-year vesting period.

 

To the extent that an employee’s, including any named executive officer other than Mr. Fiamenghi, annual retirement income benefit under the Cash Balance Plan exceeds the limitations imposed by the Internal Revenue Code of 1986, as amended, additional benefits may be provided by our nonqualified Supplemental Executive Retirement Plan (discussed below) through a Cash Balance Make-up Account to which we contribute the amounts that we would contribute to the Cash Balance Plan absent those limitations. All of the named executive officers other than Mr. Fiamenghi participate in Cash Balance Make-up Accounts.

 

Supplemental Executive Retirement Plan (“SERP”).  The named executive officers, other than Mr. Fiamenghi, in addition to certain other U.S.-based eligible employees, are entitled to participate in our Supplemental Executive Retirement Plan. The purpose of this nonqualified, unfunded plan is to (a) permit certain key executives to defer receipt of a portion of current compensation, including short- and long-term incentive payments, until a later year, (b) provide participants and their beneficiaries with the amount of retirement income that is not provided under the Cash Balance Plan or the Retirement Savings Plan by reason of Internal Revenue Service limits on eligible compensation and (c) preserve the opportunity for executives to continue to defer compensation that was deferred under previously maintained plans.

 

SERP participants are general unsecured creditors of the company. Our SERP is a combination of plans that mirror plans operated by our prior parent before we became an independent public company.

 

In December 2007, we provided participants in the SERP an opportunity under the transition rules with respect to Section 409A of the Internal Revenue Code to elect to receive the balances deferred in their Annual Deferral Accounts, Annual Incentive Plan Accounts, Performance Plan Accounts and Prior Plan Accounts in a lump sum during the third quarter of 2008. All of the balances in these accounts are employee contributions.

 

Retirement Savings Plan.  Our Retirement Savings Plan is a tax-qualified 401(k) savings plan that offers U.S. salaried employees the opportunity to contribute up to 25% of their eligible compensation on either a before-tax or after-tax basis. The company matches 100% of employee contributions up to the first 6% of eligible compensation contributed. Employee contributions are fully vested upon contribution. Company contributions are vested after three years of qualified employment with the company.

 

In addition to the Retirement Savings Plan, named executive officers, other than Mr. Fiamenghi, and other eligible employees may participate in Annual Deferral Accounts and Savings Plan Make-up Accounts under

the nonqualified SERP. To the extent that benefits are limited under the Retirement Savings Plan due to Internal Revenue Service limits on compensation and deferral limits, participants are permitted to make contributions to Annual Deferral Accounts under the SERP. The 2006 and 2007 limits on maximum recognizable compensation were $220,000 and $225,000. The limits on pretax elective deferrals in 2007 were $20,000 for persons under 50 and $20,500 for persons aged 50 or more. We make matching contributions to Savings Plan Make-up Accounts that mirror our contributions to the Retirement Savings Plan. A participant is vested in his or her Savings Plan Make-up Account to the extent that he or she is vested in the Retirement Savings Plan employer matching contributions.

 

Mr. Fiamenghi participates in our Brazilian subsidiary’s defined contribution plan. Accounts of participants in this plan accrue monthly interest credits according to the actual investment return gained and company contributions. The value of a participant’s account at retirement is paid out either as a joint and survivor annuity or as a partial lump sum. There is also a death and disability benefit that is provided based on a formula that takes into account the amount of time between the triggering event and the participant’s normal retirement date. The Brazilian defined contribution plan was modified effective January 2007 so that the value of a participant’s account for all benefits is paid out as an annuity over a specified time period or as a percentage of the outstanding balance.

 

Retiree Health Care Spending Accounts (RHCSA).  RHCSA accounts are provided to all eligible U.S.-based employees and provide employees whose employment with the company is terminated at or after age 55 with 10 years of service with assistance in purchasing retiree medical and dental care from the company. At termination, qualified employees have access to a RHCSA for themselves and a RHCSA in an equal amount for their then qualified dependents. The balances in these accounts may be used by the retiree and dependents to purchase from the company, at the company’s full cost, the medical and dental benefits provided by the company to active employees.

 

The balances in these notational accounts are forfeited if the employee terminates employment unless the employee is at least age 55 with 10 years of service at the time of termination. The accounts otherwise terminate after termination of employment on the death of the employee for the employees’ RHCSA and upon the death of the qualified dependents in the case of their RHCSAs.

 

Executive Life Insurance Plan.  We provide certain U.S. salaried employees with the opportunity to participate in our Executive Life Insurance Plan. This is a legacy plan which was established by our former parent company before we became an independent public company, and all of the insurance policies were purchased by our former parent company. This plan and plan benefits are frozen, and it is not our policy to offer this benefit to any non-legacy officers. This is a split-dollar life insurance plan which provides the participant with a greater death benefit than provided under our basic life insurance plan. Additionally, after the later of age 65 or 15 years of participation in the Plan, participants are given full ownership of the life insurance policies. Participant’s annual premiums are calculated to pay for the cost of the life insurance being provided. All of the named executive officers except Mr. Fiamenghi participate in this plan. We make payments to the named executive officers other than Mr. Fiamenghi in the amount of the participant premiums under the Executive Life Insurance Plan. We also make payments to these four named executive officers in the amount of taxes due as a result of such payments.

 

Perquisites and Other Personal Benefits.  We provide our named executive officers with perquisites and other personal benefits that we believe are reasonable and appropriate because they are competitive with perquisites offered by other employers and better enable the company to attract and retain executives for key positions.

 

We also provide each named executive officer a car. We lease and pay all the costs of operating those cars, including insurance. Each of the named executive officers also receives financial planning and tax preparation services. We also provide annual physical examinations to our named executive officers and other eligible employees.

 

The values of these perquisites are included in the Summary Compensation Table in the column headed “All Other Compensation.” We believe these perquisites are appropriate because they are comparable to

perquisites offered by other employers and not excessive. We provide them for the purpose of making our compensation packages competitive.

 

Change in Control Agreements.  We have a severance agreement with each of the named executive officers that requires us or a successor company to make certain payments and provide certain benefits if the officer’s employment is terminated by us or the successor company other than because of death, “Disability” or “Cause,” or is terminated by the officer for “Good Reason,” in each case, within two years after a change in control of the company. Disability, Cause and Good Reason are defined in severance agreements between us and our named executive officers. These agreements are intended to preserve employee morale and productivity and encourage retention in the face of the disruptive impact of an actual or rumored change in control of the company. In addition, for executives, these agreements are intended to align executive and shareholder interests by enabling executives to consider corporate transactions that are in the best interests of the shareholders and other constituents of the company without undue concern over whether the transactions may jeopardize the executives’ own employment. Because these agreements are provided to satisfy different objectives than our regular compensation program, decisions made under this program do not affect our regular compensation program.

 

The terms of these agreements are similar to those provided by other companies, and we provide them in part because we believe we need to do so to provide a competitive compensation package. Information regarding potential payments under these agreements for the named executive officers is provided under the heading “Estimated Potential Payments upon Change in Control” on page 38.

 

Executive Stock Ownership Targets

 

We establish stock ownership targets for our named executive officers. The ownership target for our Chief Executive Officer is ownership of our stock with a value equal to five times his current annual base salary. We count direct and indirect ownership of our common stock, including phantom shares, but not including stock options, as ownership for purposes of our stock ownership targets. The target for each of our other named executive officers is three times his or her current annual base salary. Named executive officers are expected to attain their ownership targets within three to five years from the time the targets become applicable. As of December 31, 2007, Mr. Scott was at an ownership level of more than 11 times his current salary. The other named executive officers also exceeded their stock ownership targets.

 

Timing of Stock Option Grants

 

Our Compensation Committee reviews and approves management’s recommendations for option grants annually. This has occurred in January in recent years. The Committee approves grants of options to named executive officers at the same time they are granted to all other eligible employees. We do not time such grants in coordination with the company’s possession or release of material, non-public or other information. Meetings of the Compensation Committee are generally scheduled at least a year in advance.

 

Deductibility of Executive Compensation

 

Section 162(m) of the Internal Revenue Code, imposes a $1 million limit on the amount that a public company may deduct for compensation paid to the company’s Chief Executive Officer or any of the company’s four other executive officers whose compensation is required to be disclosed in this proxy statement by reason of their being among the four highest compensated officers for the taxable year and who are employed by us as of the end of the year. This limitation does not apply to compensation that meets the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s performance meets pre-established objective goals based on performance criteria approved by shareholders). For 2007, the grants of stock options, the payments under the Annual Incentive Plan and the performance share awards were designed to satisfy the requirements for deductible compensation. The discretionary cash bonuses paid to named executive officers in February 2008 will not be deductible to the extent the applicable named executive officer’s compensation other than qualifying performance-based compensation received in 2008 exceeds $1 million.

 

 

 

 

 

 

 

The following table contains information relating to grants to the named executive officers during 2007 of awards under our Annual Incentive Plan and performance shares and stock options under our Stock Incentive Plan.

 

 

 

 

 

The following table contains information relating to stock options, performance shares and restricted shares held by our named executive officers at December 31, 2007.

 

 

 

 

There were two grants of options in 2001 when we changed the grant date from January to October and no annual grants in 2005 when we changed the grant date back to January.

 

 

The following table contains information concerning the exercise of stock options by our named executive officers and vesting of restricted shares held by them during 2007.

 

 

Value realized upon exercise is equal to the number of options exercised multiplied by the difference between the closing price on the date of exercise and the exercise price. Value realized on vesting of restricted shares is the closing price on the date of vesting multiplied by the number of shares vested.

 

The following table states the actuarial present value of each named executive officer’s accumulated benefit under each of our pension plans.

 

Cash Balance Plan.  Our Cash Balance Plan is a defined benefit qualified pension plan which is available to all U.S. salaried employees, including the named executive officers other than Mr. Fiamenghi. Accounts of participants in the Cash Balance Plan accrue pay credits based on years of service and monthly interest credits using a rate equal to a specified amount above the interest rate on short-term Treasury notes. Pay credits are calculated as a percentage (3% to 10%) of a salaried employee’s eligible compensation (defined as base salary, overtime, and earned Annual Incentive Plan award). The pay credit percentage is determined by the employee’s years of service and reaches and remains at 10% after 35 years of service. The value of a participant’s account at retirement is paid out either as a life or a joint and survivor annuity or in an optional form, such as a lump sum if certain funding conditions are met. The Cash Balance Plan provides for a 5-year vesting period.

 

Mr. Fortnum participated in the Casco Pension Plan for Salaried Employees prior to his transfer from our Canadian subsidiary to the parent company on March 1, 1993. Mr. Fortnum has ceased to accrue benefits under this plan and has 7.5 years of credited service under the plan at December 31, 2007.

 

Nonqualified Cash Balance Make-up Accounts.  To the extent that an employee’s, including any named executive officer other than Mr. Fiamenghi, annual retirement income benefit under the Cash Balance Plan

exceeds the limitations imposed by the Internal Revenue Code, additional benefits may be provided by our nonqualified Supplemental Executive Retirement Plan through a Cash Balance Make-up Account. All of the named executive officers other than Mr. Fiamenghi participate in Cash Balance Make-up Accounts. Our named executive officers other than Mr. Fiamenghi were participants in a defined benefit plan operated by the company that owned us before we became an independent public company. These named executive officers who became officers of Corn Products International when we became an independent company (Mr. Scott, Ms. Beebe, Mr. Fortnum and Mr. Ripley), receive additional pay credits in Cash Balance Make-up Accounts to offset a portion of pension benefits lost as a result of our becoming an independent public company and the change from a final average pay plan maintained by our predecessor to our Cash Balance Plan.