Edgar Filing: Andersons, Inc.

Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

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The Andersons, Inc.
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THE ANDERSONS, INC.

1947 Briarfield Boulevard

Maumee, Ohio 43537

March 19, 2019

Dear Shareholder:

You are cordially invited to attend the Annual Meeting of shareholders to be held on Friday, May 10, 2019 at 8:00 a.m., local time, at The Andersons’ Headquarters Building, 1947 Briarfield Boulevard, Maumee, Ohio 43537.

This booklet includes the formal notice of the meeting and the proxy statement. The proxy statement tells you more about the meeting agenda, and how to vote your proxy and procedures for the meeting. It also describes how the Board of Directors operates and gives you information about our director candidates. A form of proxy card and our 2018 annual report to shareholders are also included with this booklet.

It is important that your shares are represented and voted at the Annual Meeting, regardless of the size of your holdings. I urge you to vote your proxy as soon as possible so that your shares may be represented at the meeting. If you attend the Annual Meeting, you may revoke your proxy in writing and vote your shares in person, if you wish.

I look forward to seeing you on May 10th.

Sincerely,

/s/ Michael J. Anderson, Sr.

Michael J. Anderson, Sr.

Chairman

THE ANDERSONS, INC.

1947 Briarfield Boulevard

Maumee, Ohio 43537

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Date: May 10, 2019

Time: 8:00 A.M., Local Time

Place: The Andersons' Headquarters Building

1947 Briarfield Boulevard

Maumee, Ohio 43537

Matters to be voted upon:



1	The election of ten directors identified as nominees herein to hold office for a one-year term.
2	The approval of the 2019 Long-Term Incentive Compensation Plan
3	The approval of the 2004 Employee Share Purchase Plan Restated and Amended 2019
4	Advisory approval of executive compensation.
5	The ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2019.
6	Any other matters that may properly come before the Annual Meeting and any adjournments or postponements thereof.




						By order of the Board of Directors

Maumee, Ohio March 19, 2019						/s/ Naran U. Burchinow
						Naran U. Burchinow
						Secretary

Your vote is important. Whether or not you plan to attend the Annual Meeting in person and regardless of the number of shares you own, please vote your shares by proxy, either by mailing the enclosed proxy card or, by telephone or via the Internet. If you attend the Annual Meeting, you may revoke your proxy in writing and vote your shares in person, if you wish.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 10, 2019

The Proxy Statement and Annual Report to Shareholders with Form 10K is available at www.proxyvote.com.

Table of Contents



	Page
Introduction	1
This Proxy Solicitation	1
The Annual Meeting: Quorum	1
Common Shares Outstanding	1
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 10, 2019	2
Voting	3
How to Vote Your Shares	3
How to Revoke Your Proxy	3
How Your Shares Will be Voted	3
Votes Required to Approve Each Item	4
Householding	4
Where to Find Voting Results	4
Summary of Proposals	5
Election of Directors	6
Corporate Governance	10
Board Meetings and Committees	10
Code of Ethics	12
Review, Approval or Ratification of Transactions with Related Persons	13
Audit Committee Report	13
Use of Compensation Consultants	14
Compensation / Risk Relationship	14
2019 Long-Term Incentive Compensation Plan and 2004 Employee Share Purchase Plan Restated and Amended January 2019	16
Overview	16
Determination to Adopt the 2019 Plan and the Restated and Amended ESPP	16
Cessation of Awards Under the 2014 Long-Term Incentive Compensation Plan	17
Description of the 2019 Long-Term Incentive Compensation Plan	20
Certain U.S. Federal Tax Consequences	23
Approval of the 2004 Employee Share Purchase Plan Restated and Amended January 2019	25
Description of the Restated and Amended ESPP	25
Federal Income Tax Consequences	26
Proposal for an Advisory Vote on Executive Compensation	28
Appointment of Independent Registered Public Accounting Firm	29
Independent Registered Public Accounting Firm	29
Audit and Other Fees	29
Policy on Audit Committee Pre-Approval of Services Performed by the Independent Registered Public Accounting Firm	29
Proposal to Ratify the Appointment of Independent Registered Public Accounting Firm	30
Share Ownership	31
Shares Owned by Directors and Executive Officers	31
Share Ownership of Certain Beneficial Owners	31
Section 16(a) Beneficial Ownership Reporting Compliance	32
Compensation and Leadership Development Committee Interlocks and Insider Participation	32
Executive Compensation	33
Compensation and Leadership Development Committee Report	33
Compensation Discussion and Analysis	33
Executive Summary	33
General Principles and Procedures	38
2018 Executive Compensation Components	40
Director Compensation	57
CEO Pay Ratio	59
Other Information	60
Shareholders Proposals for 2019 Annual Meeting	60
Additional Information	60
Appendix A - The Andersons, Inc. 2019 Long-Term Incentive Compensation Plan	61
Appendix B - The Andersons, Inc. 2004 Employee Share Purchase Plan Restated and Amended January 2019	83

THE ANDERSONS, INC.

1947 Briarfield Boulevard

Maumee, Ohio 43537

PROXY STATEMENT

Annual Meeting of Shareholders

May 10, 2019

Introduction

The Board of Directors (the “Board”) of The Andersons, Inc. (the "Company") is soliciting your proxy to encourage your participation in the voting at the Annual Meeting and to obtain your support on each of the proposals described in this proxy statement. You are invited to attend the Annual Meeting and vote your shares directly. However, even if you do not attend, you may vote by proxy, which allows you to direct another person to vote your shares at the meeting on your behalf. This proxy statement was first mailed or otherwise delivered to shareholders on March 26, 2019. The mailing address of the Company’s executive officers is 1947 Briarfield Boulevard in Maumee, Ohio 43537.

This Proxy Solicitation

Included in this package are, among other things, the proxy card and this proxy statement. The proxy card and the identification number on it are the means by which you authorize another person to vote your shares in accordance with your instructions.

This proxy statement provides you with information about the proposals and about The Andersons, Inc. (the “Company”) that you may find useful in deciding how to vote with respect to each of the proposals. After this introduction, you will find the following thirteen sections:


•	Voting


•	Summary of Proposals


•	Election of Directors


•	Corporate Governance


•	Proposal for the 2019 Long-Term Incentive Compensation Plan


•	Proposal for the 2004 Employee Share Purchase Plan Restated and Amended 2019


•	Proposal for an Advisory Vote on Executive Compensation


•	Appointment of Independent Registered Public Accounting Firm


•	Share Ownership


•	Executive Compensation


•	Director Compensation


•	CEO Pay Ratio


•	Other Information

The Annual Meeting: Quorum

The Annual Meeting will be held on Friday, May 10, 2019 at 8:00 a.m., local time, at The Andersons’ Headquarters Building located at 1947 Briarfield Boulevard in Maumee, Ohio.

The Company’s Code of Regulations requires that a majority of our outstanding Common Shares be represented at the Annual Meeting, either in person or by proxy, in order to transact business.

Abstentions and broker non-votes will be treated as present for purposes of determining whether a majority of our Common Shares is represented at the meeting, and will therefore affect whether a quorum has been achieved. A broker non-vote occurs when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the broker or nominee does not have discretionary voting power and has not received instructions from the beneficial owner.

There were no shareholder proposals submitted for the 2019 Annual Meeting.

Common Shares Outstanding

The record date for determining holders of the Company’s Common Shares entitled to vote at the Annual Meeting is March 12, 2019. As of the record date, the Company had 33,356,758 Common Shares issued and outstanding.

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 10, 2019

The proxy statement and Annual Report to Shareholders with Form 10K is available at www.proxyvote.com.

Voting

You are entitled to one vote at the Annual Meeting for each of the Company’s Common Shares that you owned of record as of the close of business on March 12, 2019 (the record date for the Annual Meeting). There is no right to cumulative voting as to any matter, including the election of directors.

How to Vote Your Shares

You may vote your shares at the Annual Meeting by proxy or in person. Even if you plan to attend the meeting, we urge you to complete and submit your proxy in advance to ensure your vote is represented. If your shares are recorded in your name, you may cast your vote in one of the following ways:


•	Vote by telephone: If you received a proxy card, you can vote by phone at any time by calling the toll-free number (for residents of the U.S.) listed on your proxy card. To vote, enter the control number listed on your proxy card and follow the simple recorded instructions. If you vote by phone, you do not need to return your proxy card.


•	Vote by mail: If you received a proxy card and choose to vote by mail, simply mark your proxy card, and then date, sign and return it in the postage-paid envelope provided.


•	Vote via the Internet: You can vote by Internet at any time by visiting the website listed on your proxy card, notice document or email that you received. Follow the simple instructions and be prepared to enter the code listed on the proxy card, notice document or email that you received. If you vote via the Internet, you do not need to return your proxy card.


•	Vote in person at the Annual Meeting.

Shareholders who hold their shares beneficially in street name through a nominee (such as a bank or a broker) may be able to vote by telephone or the Internet, as well as by mail. You should follow the instructions you receive from your nominee to vote these shares. Since a beneficial owner is not the shareholder of record, you may not vote these shares in person at the meeting unless you obtain a “legal proxy” from your broker or nominee that holds your shares, giving you the right to vote the shares at the meeting.

When you vote by proxy, the shares you hold will be voted in accordance with your instructions. Your proxy vote will direct the designated persons (known as “proxies” or proxy holders) to vote your shares at the Annual Meeting in accordance with your instructions. The Board has designated John P. Kraus and Catherine M. White to serve as the proxies for the Annual Meeting.

How to Revoke Your Proxy

You may revoke your proxy at any time before it is exercised by any of the following means:


•	Notifying Naran U. Burchinow, our Secretary, in writing prior to the Annual Meeting;


•	Submitting a later dated proxy card, telephone vote or Internet vote; or


•	Attending the Annual Meeting and revoking your proxy in writing.

If your shares are held in street name, you must contact your broker or nominee to revoke your proxy.

The mailing address of the Company’s executive officers is 1947 Briarfield Boulevard in Maumee, Ohio 43537.

Your attendance at the Annual Meeting will not, by itself, revoke a proxy.

How Your Shares Will be Voted

Your shares will be voted at the meeting as directed by the instructions on your proxy card if: (1) you are entitled to vote, (2) your proxy was properly executed, (3) we received your proxy prior to the Annual Meeting and (4) you did not validly revoke your proxy prior to the meeting.

If you send a properly executed proxy without specific voting instructions, the designated proxies will vote your shares


•	to elect the nominated directors,


•	to approve the 2019 Long-Term Incentive Compensation Plan,


•	to approve the 2004 Employee Share Purchase Plan Restated and Amended January 2019,


•	to approve this year's advisory resolution on executive compensation, and


•	to ratify the selection of the independent registered public accounting firm.

Votes Required to Approve Each Item

The Company’s Code of Regulations states that the nominees for director receiving the greatest number of votes shall be elected. Therefore, abstentions and broker non-votes will not count as a vote for or against the election of directors and, therefore, will not have an effect on the election of directors.

The approval of the 2019 Long-Term Incentive Compensation Plan requires the affirmative vote of the holders of a majority of the Common Shares present and eligible to vote. An abstention will count as a vote against this proposal. Broker non-votes will not count as a vote for or against this proposal.

The approval of the 2004 Employee Share Purchase Plan Restated and Amended 2019 requires the affirmative vote of the holders of a majority of the Common Shares present and eligible to vote. An abstention will count as a vote against this proposal. Broker non-votes will not count as a vote for or against this proposal.

The approval of the advisory vote on executive compensation requires an affirmative vote of the holders of a majority of the Common Shares present and entitled to vote. An abstention will count as a vote against this proposal. Broker non-votes will not count as a vote for or against this proposal.

The ratification of the independent registered public accounting firm requires an affirmative vote of the holders of a majority of the Common Shares present, in person or by proxy, and entitled to vote. An abstention will count as a vote against this proposal. A proposal to ratify the selection of auditors is considered a routine matter that brokers may vote on without instruction from beneficial owners. As a result, a broker non-vote cannot occur with respect to this proposal.

Householding

The Company has adopted a procedure approved by the Securities and Exchange Commission called “householding”. Under this procedure, multiple shareholders who share the same last name and address will receive only one copy of the annual proxy materials. If the household received a printed set of proxy materials by mail, each shareholder will receive his or her own proxy card or voting instruction card by mail. We have undertaken householding to reduce our printing costs and postage fees. Shareholders who receive household materials may elect to receive individual copies of the proxy materials at the same address (and shareholders receiving multiple copies of materials may elect to receive household materials) by contacting Investor Relations in writing at 1947 Briarfield Boulevard, Maumee, Ohio 43537, or via telephone at (419) 893-5050.

Where to Find Voting Results

We will announce the voting results at the Annual Meeting and will publish the voting results in the Company’s Form 8-K to be filed with the Securities and Exchange Commission within four business days after the annual meeting.

Summary of Proposals

The Governance / Nominating Committee and the Board, including all independent directors, have nominated ten directors, each for a one-year term.

The Board has approved the 2019 Long-Term Incentive Compensation Plan and recommends that you vote to ratify its adoption.

The Board has approved the 2004 Employee Share Purchase Plan Restated and Amended January 2019 and recommends that you vote to ratify its adoption.

The Board is submitting to an advisory vote the compensation of the Company’s named executive officers, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), and conducted in conformance with regulations promulgated by the Securities and Exchange Commission thereunder. While this vote is not binding, the Compensation and Leadership Development Committee and Board expect to take the results of this vote into consideration when making future compensation decisions.

The Audit Committee has recommended, and the Board has approved, Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2019 and recommends that you vote to ratify their appointment.

At the date of this Proxy Statement, we have no knowledge of any business other than the proposals described above that will be presented at the Annual Meeting. If any other business should properly come before the Annual Meeting, the proxies will be voted on at the discretion of the proxy holders.

Election of Directors

The Board of Directors is currently comprised of ten directors. Proxies cannot be voted for a greater number of individuals than the number of nominees listed below. The Governance / Nominating Committee and the Board have nominated and recommend the election of each of the ten nominees listed below. Each director elected will serve until the next Annual Meeting or until their earlier removal or resignation. Each of the nominees listed is currently a Director of the Company. The Board expects all nominees named below to be available for election. In case any nominee is not available, the proxy holders may vote for a substitute, unless the Board reduces the number of directors as provided for in the Company’s Code of Regulations.

Directors will be elected at the Annual Meeting by a plurality of the votes cast at the Annual Meeting by the holders of shares represented in person or by proxy. The following is a brief biography of each nominee as well as the specific qualifications of the nominee as identified by the Board’s Governance / Nominating Committee. Information as to their ownership of the Common Shares can be found under the caption “Share Ownership” in this proxy statement. All information provided is current as of February 28, 2019.



Name	Age	Principal Occupation, Business Experience and Other Directorships	Director Since
Patrick E. Bowe	60	President and CEO since November 2, 2015. Prior to that, Corporate Vice President of Cargill, Inc. and a leader of Cargill's Food Ingredients and Systems business since 2007. Prior to joining Cargill's Corn Milling Division, managed the copper trading desk for Cargill Metals Division and worked as a trader and analyst for Cargill Investor Services at the Chicago Board of Trade. Worked as a cash grain merchant for Louis Dreyfus Corp. in Springfield, Ill., and Phil O'Connel Grain Co., in Stockton, California.	2015
Michael J. Anderson, Sr.	67	Chairman since 2009. Chief Executive Officer from January 1999 to October 2015. President from January 1999 through December 2012. Prior to that President and Chief Operating Officer from 1996 through 1998, Vice President and General Manager of the Retail Group from 1994 until 1996 and Vice President and General Manager Grain Group from 1990 through 1994. Currently a Director of FirstEnergy Corp. beginning in 2007 and formerly a Director of Interstate Bakeries Corp from 1998 to 2009.	1988
Gerard M. Anderson	60	Chairman and Chief Executive Officer of DTE Energy since 2014; Chairman, President and Chief Executive Officer of DTE Energy from 2010 through 2013; President and Chief Operating Officer of DTE Energy from 2005 through 2010. Joined Detroit Edison, a subsidiary of DTE Energy in 1993 and held various executive positions. Prior to this, a consultant with McKinsey & Co., Inc. Director of DTE Energy since 2009.	2008
Stephen F. Dowdle	68	Retired President of Sales for PotashCorp, 1999 to 2017, which merged with Agrium, Inc. to form Nutrien in January 2018. Prior to the merger, oversaw sales, marketing and distribution of PotashCorp's potash, phosphate and nitrogen products. During the merger, served as a Senior Advisor providing transition assistance for sales operations. Also served ten years, 1989 to 1999, as Vice President and Managing Director for Canpotex Limited in Singapore. Formerly a Director of Canpotex Limited from 2010 to 2017. Formerly a Director of SinoFert Holdings Limited from 2005 to 2017. Formerly a Director of the International Plant Nutrient Institute from 2010 to 2017.	2018
Catherine M. Kilbane	55	Retired Senior Vice President, General Counsel and Secretary of The Sherwin-Williams Company, 2013 to July 2017. Prior to that, Senior Vice President, General Counsel and Secretary of American Greetings Corporation from 2003-2012. Prior to that a partner with the Cleveland law firm of Baker & Hostetler LLP. Director of The Davey Tree Expert Company. Director of Interface, Inc. Trustee of The Cleveland Clinic Foundation.	2007



Robert J. King, Jr.	63	Senior Adviser for FNB Corp since 2013. Prior to that, President and Chief Executive Officer, PVF Capital Corp from 2009 to 2013; Senior Managing Director, Private Equity, FSI Group, LLC from 2006 through 2009; Managing Director, Western Reserve Partners LLC from 2005-2006; Regional President of Fifth Third Bank from 2002 through 2004 and Chairman, President and Chief Executive Officer of Fifth Third Bank (Northeastern Ohio) from 1997 through 2002. On the advisory board of Ancora Advisors September 23 to December 15, 2016. Director of Shiloh Industries, Inc. since 2005, MTD Corp. since 2005, and Medical Mutual of Ohio since 2012.	2005
Ross W. Manire	67	Retired President and Chief Executive Officer of ExteNet Systems, Inc., 2002 to 2018. Served as President, Enclosure Systems Division of Flextronics International from 2000 to 2002. Prior to that held senior management positions at Chatham Technologies, Inc., and 3Com Corporation. Former Partner at Ridge Capital Corporation and Ernst & Young LLP. Director of Zebra Technologies Corporation since 2003 and Eagle Test Systems, Inc. from 2004 through 2008.	2009
Patrick S. Mullin	70	Retired Managing Partner of Deloitte & Touche LLP in Cleveland. Director of The OM Group, Inc. from 2011 through November 2015.	2013
John T. Stout, Jr.	65	Chairman and Chief Executive Officer of Plaza Belmont Management Group LLC since 2014. Prior to that, Chief Executive Officer of Plaza Belmont Management Group LLC since 1998. Chairman of the Board of Renwood Mills, LLC since 2016. Chairman of Diana Fruit Company since 2014. Managing Member of Homegrown Family Foods since 2019. Previously President of Manildra Milling Corp and Manildra Energy Corp from 1991 through 1998 and Executive Vice President of Dixie Portland Flour Mills Inc. from 1984 to 1990.	2009
Jacqueline F. Woods	71	Retired President of Ameritech Ohio (subsequently renamed AT&T Ohio). Director of The Timken Company since 2000.	1999

Director Skills, Experience and Background

The Governance / Nominating Committee considers a variety of factors when presenting the slate of nominees for the Board – these are listed in detail under the caption “Corporate Governance – Board Meetings and Committees – Governance / Nominating Committee.” Because of the importance of diversity in our businesses, the Committee looks at the different skills and experiences that each nominee brings. Following are specific experience, qualifications, attributes or skills that the Governance / Nominating Committee viewed as valuable to our business for the next year:



Director		Specific experience, qualifications, attributes or skills
Patrick E. Bowe		• Over thirty-five years of experience in the agricultural sector • As Corporate Vice President for Cargill's Food Ingredient and Systems Platform, responsible for strategy, capital allocation decisions, customer relationship management, as well as leading key sourcing and business excellence initiatives • Has held a variety of leadership positions, both domestically and abroad, including oversight of Cargill's Corn Wet Milling operation • Extensive experience in leading large organizations with particular expertise in commodity and futures trading, acquisitions and joint ventures, process improvement, strategic sourcing, capital management, and establishing and maintaining strong customer relationships
Michael J. Anderson, Sr.		• Forty-year history with the Company including leadership of the Grain business • Specific expertise in agricultural commodities trading and hedging activities. • Intimate knowledge of all businesses • Experience as a member and chair of other public company boards • Three years public accounting experience • MBA in finance and accounting • Executive Leadership Program, Harvard Business School
Gerard M. Anderson		• Currently engaged as Chairman, President & Chief Executive Officer and board member of a publicly traded energy company • Energy industry expertise • MBA and MPP with a civil engineering undergraduate degree • Past experience as a consultant with McKinsey and Company
Stephen F. Dowdle		• Extensive executive leadership and sales experience in the plant nutrient industry • Wealth of business and agronomy knowledge from more than thirty years in the plant nutrient industry • Experience as a member of other company boards • Masters and doctorate degree in agronomy and soil science
Catherine M. Kilbane		• Fourteen years as Secretary and General Counsel for a publicly traded company • Experience with public company regulatory requirements • Experienced public company director • Experience in an industry that supplies coating materials used in rail repair • Attorney with extensive corporate law experience, including corporate governance, mergers and acquisitions, joint ventures, securities and compliance
Robert J. King, Jr.		• Experience as President & Chief Executive Officer and board member of a publicly traded financial services company • MBA with a finance undergraduate degree • Expertise in banking, finance and related risk analysis with extensive senior officer experience with major banking organization. • Experience as a member of other company boards
Ross W. Manire		• Retired Chairman and CEO of a telecommunications company • Mergers and acquisitions and international business experience • Experience as a member of other public company boards • Formerly a partner with an international auditing firm and certified public accountant • Prior service as Chief Financial Officer of public company • MBA with economics undergraduate degree



Patrick S. Mullin		• Experience managing Northeast Ohio Deloitte & Touche LLP office • Experience as Audit Committee Chair for other public companies • Served as a trusted business advisor to CEOs, CFOs and the Audit Committee chairs of several publicly traded companies • Extensive experience in advising public and private companies on tax, accounting, audit and consulting matters in a variety of industries • Over forty years of public accounting experience • Merger and acquisition experience • Executive Leadership Programs, Harvard and Northwestern
John T. Stout, Jr.		• Currently engaged as Chairman and Chief Executive Officer of a private equity fund that acquires diversified food processing companies and related businesses • Experience in the financial markets as it relates to the food industry, including analysis of agricultural commodity risk • Mergers and acquisition experience • Experience managing companies that consume of wheat, corn, soybeans, rice and other commodities • Board member for a variety of companies in the food industry • Elected to Kansas City Federal Reserve Board January 1, 2010 and again on January 1, 2013; previously six years on Kansas City Federal Reserve Board Economic Advisory Committee; Currently serving on the Compensation Committee and the Executive Search Committee of Federal Reserve Bank of Kansas City
Jacqueline F. Woods		• Experience as a President of large telecommunications company • Experience as a member of other public company boards • Career experience in finance, marketing, strategic planning, public relations and government affairs • Executive Leadership Program, Kellogg Graduate School of Management, Northwestern University

The Board of Directors recommends a vote FOR the election of the ten directors as presented.

Corporate Governance

Board Meetings and Committees



		Committees of the Board effective as of the May 2018 Annual Meeting
Name	Board	Audit	Compensation and Leadership Development	Governance / Nominating	Finance
Michael J. Anderson, Sr.	C
Patrick E. Bowe	X
Gerard M. Anderson	X			X	X
Stephen F. Dowdle	X
Catherine M. Kilbane	X		X	C
Robert J. King, Jr.	X		X		C
Ross W. Manire	X	X			X
Patrick S. Mullin	X	C		X
John T. Stout, Jr.	X		X		X
Jacqueline F. Woods	X	X	C

C - Chair, X - Member

Stephen F. Dowdle was appointed to the Board effective September 1, 2018.

The Board of Directors held six regular board meetings in 2018. Except for Stephen F. Dowdle, all directors attended 75% or more of the 2018 meetings of the Board, and committees on which each such director served. Owing to prior commitments made prior to being named to the Board, Mr. Dowdle was unable to attend one of the two remaining 2018 meetings held after his appointment. We encourage Board members to attend the annual meeting, and, except for Stephen F. Dowdle, all of the current Board members attended the 2018 Annual Shareholders Meeting. Richard P. Anderson is a non-voting Chairman Emeritus, and is not compensated for any meetings he may attend.

The Audit Committee, Compensation and Leadership Development Committee, Finance Committee and Governance / Nominating Committee each have written charters. Copies of such charters are available at www.andersonsinc.com under the Governance tab within the Investor Relations section of the website.

Director Independence: The Board is made up of a majority of independent directors. Each of the Audit, Compensation, Finance and Governance / Nominating Committees is made up entirely of independent members.

An “independent” director is a director who meets the criteria for independence as required by the applicable law and the NASDAQ Corporate Governance Standards for Listed Companies and is affirmatively determined to be “independent” by the Board. The Board has determined that each of the current directors is independent under the corporate governance standards of the NASDAQ, with the exception of Michael J. Anderson, Sr., Chairman and Patrick E. Bowe, President and Chief Executive Officer. Michael J. Anderson, Sr. and Gerard M. Anderson are first cousins. The Board has determined that the relationship does not affect Gerard M. Anderson’s exercise of independent judgment on the Board.

Audit Committee: The Board established the Audit Committee in accordance with Section 3(a)(58)A of the Securities Exchange Act of 1934. The Audit Committee is comprised of three independent directors (as defined in the NASDAQ Corporate Governance Standards for Listed Companies) and, among other duties, oversees the accounting and financial reporting process of the Company, appoints the independent registered public accounting firm, reviews the internal audit and external financial reporting of the Company, reviews the scope of the independent audit and considers comments by the independent registered public accounting firm regarding internal controls and accounting procedures and management’s response to those comments. The Audit Committee held four regular meetings in 2018. The Board has determined that Patrick S. Mullin, Committee Chair, and Ross Manire, Committee member, are each “audit committee financial experts” as defined in the federal securities laws and regulations.

Compensation and Leadership Development Committee: The Compensation and Leadership Development Committee, comprised solely of four independent directors (as defined in the NASDAQ Corporate Governance Standards for Listed

Companies), reviews the recommendations of the Company’s Chief Executive Officer and Vice President, Human Resources as to the appropriate compensation that includes base salaries, short-term and long-term compensation, and benefits of the Company’s officers and determines the compensation of such officers for the ensuing year which it then recommends to the full Board for approval. The Chief Executive Officer’s compensation is also determined by the Committee and then recommended to the full Board for approval. In addition, under the Company’s 2014 Long-Term Incentive Compensation Plan (which is proposed in this proxy to be replaced by the 2019 Long-Term Incentive Compensation Plan), the Committee reviews, approves and recommends to the Board the value of grants of equity-based compensation aggregated for non-officers and individual grants for officers and reviews and approves the “Compensation Discussion and Analysis” appearing in this proxy statement. The Compensation and Leadership Development Committee met five times during 2018. The Committee, by charter, is authorized to retain its own independent compensation consultants and legal counsel. The role of those independent compensation consultants is more fully described in the "Use of Compensation Consultants" section below.

Finance Committee: The Finance Committee is comprised of four independent directors and is charged with monitoring and overseeing the Company’s financial resources, strategies and risks, especially those that are long-term in nature. The Finance Committee met three times in 2018.

Governance / Nominating Committee: The Governance / Nominating Committee is comprised of three independent directors. The Governance / Nominating Committee met three times in 2018. The Committee recommends to the Board actions to be taken regarding its structure, organization and functioning, selects and reviews candidates to be nominated to the Board, reports to the Board regarding the qualifications of such candidates, recommends a slate of directors to be submitted to the shareholders for approval, and conducts regular meetings of the independent directors without management being present. The Governance / Nominating Committee and other members of the Board identify candidates for consideration by the Committee, and may, if it elects to, engage the services of third party search firms to identify candidates. The Governance / Nominating Committee recommended the election to the Board of each nominee named in this proxy statement.

It is the policy of the Governance / Nominating Committee to consider for nomination as a director any person whose name is submitted by a shareholder, provided that the submission is made prior to December 31 of the year that precedes the next annual meeting of shareholders and provided that the person is willing to be considered as a candidate.

Submission of names by shareholders is to be made to the Secretary of the Company, at the Company’s headquarters in Maumee, Ohio. The Secretary, in turn, submits the names to the Chair of the Governance / Nominating Committee. The shareholder’s notice must set forth all information relating to any nominee that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Act of 1934, as amended (including, if so required, such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected). Additionally, as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, the notice must provide the name and address of such shareholder and beneficial owner and the class and number of shares of the Company which are owned beneficially and of record by such shareholder and beneficial owner.

Each candidate for director (no matter how nominated) is evaluated on the basis of his or her ability to contribute expertise to the businesses and services in which the Company engages, to conduct himself or herself in accordance with the Company’s Statement of Principles, and to contribute to the mission and greater good of the Company. The candidate’s particular expertise, as well as existing Board expertise, is taken into consideration. A candidate’s “independence,” as defined by applicable stock exchange regulations and any other applicable laws, and the Board’s ratio of independent to non-independent directors are also taken into consideration. Preferences, qualifications and specific qualities or skills considered necessary for one or more of the directors to possess include, but are not limited to, the following:


•	Able to serve for a reasonable period of time


•	Multi-business background preferred


•	Successful career in business preferred


•	Active vs. retired preferred


•	Audit Committee membership potential


•	Strategic thinker


•	Leader / manager


•	Agribusiness background, domestic and international


•	Transportation background


•	Brand marketing exposure

The Committee seeks nominees who provide a diverse set of backgrounds, skills, experiences and viewpoints who will contribute expertise to the Board, who will conduct themselves in accordance with the Company’s Statement of Principles and strong ethical behavior, and who will share their diverse skills and experiences for the greater good of the Company. Because

the Company consists of several diverse businesses, we highly value differing viewpoints shared in the pursuit of Board actions that best balance the objectives of our customers, employees, shareholders and communities.

The Board has adopted a policy not to nominate for re-election to the Board any member reaching the age of 72 prior to the annual meeting.

Mr. Dowdle was recommended to the Committee by the CEO and the Chairman based on their knowledge of the industry and his reputation. The Committee interviewed Mr. Dowdle and recommended him to the Board. No fees or charges to any third party were incurred in connection with the identification or appointment of Mr. Dowdle, nor was such appointment made pursuant to any agreement with any third party.

Board Leadership Structure: The Board has determined to separate the positions of CEO and Chairman. Michael J. Anderson, Sr. has served as Chairman of the Board of Directors since 2009. The Board considers Mr. Anderson's experience on two other public company boards, as well as his extensive prior experience with the Company, to provide a unique resource that will serve the Company well. As Chairman, Mr. Anderson chairs meetings of the Board, sets Board meeting agendas, has authority to call meetings of the Board and serves as liaison with management of the Company. However, Mr. Anderson is not an independent Board member, and, for that reason, the Board has established the position of an independent Lead Director.

The Lead Director is chosen by the independent directors of the Board. The Lead Director chairs meetings of the independent directors, chairs the Governance / Nominating Committee, approves Board meeting agendas and the information available to the Board, has the authority to call meetings of the independent directors, and serves as liaison with the Chairman. In performing these functions, the Lead Director has the responsibility and authority to set the agenda and manage the meetings of the independent directors, to communicate their interests to the Chairman and to the CEO, and to assert any other concerns for the benefit of the stockholders, and in so doing serve as an institutional counterweight to the Chairman and CEO.

In 2017, the Board designated Catherine M. Kilbane as Lead Director of the Board. Assuming their re-election to the Board, the Board expects to re-designate Catherine M. Kilbane as Lead Director of the Board at its May meeting.

Board Oversight of Risk: The Board is responsible for overseeing risk management for the Company. It has delegated to each of the Audit Committee, the Finance Committee, the Compensation and Leadership Development Committee and the Governance / Nominating Committee, certain of its responsibilities in this area. For example, the Audit Committee has the oversight responsibility for the integrity of the Company’s financial statements and its financial reporting process; its systems, including cyber-security concerns, of internal accounting and financial controls and the performance of the Company’s internal audit function and independent auditor. The Finance Committee has responsibility for risks relating to capital markets including interest rate volatility and access to capital, counterparties, product liability, price volatility and general industry market risks. The Compensation and Leadership Development Committee has the responsibility for reviewing the Company’s compensation policies to ensure that these policies are not reasonably likely to create undue risk to the Company. The Governance / Nominating Committee has responsibility for oversight of the Company’s ethics policies, including the Company’s Code of Business Conduct, Board Succession and other regulatory / legislative issues.

Although the Board has delegated certain responsibilities for risk management to its Committees, the Board retains overall responsibility and coordination of this duty. Each Committee Chairman reports to the Board matters discussed or reviewed at Committee meetings. Although the Board oversees the Company’s risk management, company management is responsible for day-to-day risk management processes and provides regular updates to the Board and its Committees.

Executive Sessions of the Board: Our independent directors meet in executive session at each Board meeting. Our Lead Director chairs these executive sessions.

Shareholder Communications to Board: Shareholders may send communications to the Board by writing any of the Company's officers, or John Kraus, Director, Investor Relations, at the Company’s headquarters at its Maumee, Ohio address or by calling any officer at 419-893-5050 or 800-537-3370. All shareholder communications addressed to the Board will be forwarded directly to the Board members.

Corporate Governance Guidelines: A description of the Company’s corporate governance guidelines may be found in the Company’s website under the under the Governance tab within the Investor Relations section of the website.

Code of Ethics

The Company has adopted Standards of Business Conduct that apply to all employees, including the principal executive officer, principal financial officer and the principal accounting officer. These Standards of Business Conduct are available on

the Company’s website (www.andersonsinc.com) under the Governance tab within the Investor Relations section of the website. The Company intends to post amendments to or waivers, if any, from its Standards of Business Conduct as relates to the Company’s Chief Executive Officer and Chief Financial Officer on its website.

Review, Approval or Ratification of Transactions with Related Persons

The Board has practices and procedures to address potential or actual conflicts of interest and any appearance that decisions are based on considerations other than the best interests of the Company that may arise in connection with transactions with certain persons or entities, which include the completion of annual written questionnaires requiring disclosure of potential conflict situations, financial transactions, and annual affirmation of compliance with the Company’s Standards of Business Conduct and Statement of Principles (the “Related Person Transaction Policy”). The Related Person Transaction Policy operates in conjunction with the Company’s Standards of Business Conduct and is applicable to all transactions, arrangements or relationships in which: (a) the aggregate amount involved is material to the individual, and in any event, to any transaction in which the amount may be expected to exceed $120,000 in any calendar year; (b) the Company is a participant; and (c) any Related Person (as that term is defined in Item 404 under Regulation S-K of the Securities Act of 1933, as amended) has or will have a direct or indirect interest (a “Related Person Transaction”).

The Governance / Nominating Committee is charged with the review of any transactions with related persons. They may utilize outside legal counsel or the Company’s general counsel to provide opinions as to the appropriateness of any potential Related Person Transaction. All directors and officers complete annual questionnaires regarding their stockholdings and transactions which may possibly be regarded as involving related parties. In considering any matter, the Governance / Nominating Committee will consider the terms of the Company’s Standards of Business Conduct, which directors and officers also commit to observe.

A Related Person Transaction is initially subject to review by the Chief Executive Officer. Matters regarding the Related Person Transaction Policy, or Related Person Transactions involving directors or officers, are submitted to the Governance / Nominating Committee for approval or ratification. As part of its review of each Related Person Transaction, the Governance / Nominating Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than the terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction. The Related Person Transaction Policy also provides that certain transactions, based on their nature and/or monetary amount, are deemed to be pre-approved or ratified by the Governance / Nominating Committee and do not require separate approval or ratification. The director involved in a Related Person Transaction will recuse himself/herself from any decision to approve or ratify such transaction.

The Governance / Nominating Committee’s activities with respect to the review and approval or ratification of all Related Person Transactions are reported periodically to the Board of Directors.

Donald L. Mennel was a director of the Company until May 10, 2018, as he did not stand for re-election to the Board of Directors at the Company's 2018 annual meeting, having reached the Company's mandatory retirement age. He is Chairman, and formerly President and Treasurer of, and a significant shareholder in, The Mennel Milling Company ("Mennel Milling"). Mennel Milling sells grain to, and purchases grain from, the Company and Lansing Trade Group LLC - of which the Company owned approximately 33% of the total equity in 2018 and which became a wholly-owned subsidiary of the Company effective January 1, 2019 - and also leases railcars from the Company, with transactions occurring both before and after Mr. Mennel left the Board. The amounts received from such transactions are below thresholds established by NASDAQ as standards for director non-independence.

John T. Stout, who serves as a director, member of the Compensation and Leadership Development Committee and member of the Finance Committee, is Chairman of the Board, and with immediate family members, a greater than 5% owner, of Renwood Mills, LLC ("Renwood Mills"), in which Lansing Trade Group, LLC has an indirect, minority interest of approximately 7.5%. Renwood Mills purchased approximately $3.75 million of grain from the Company and Lansing Trade Group LLC and sold approximately $1.38 million of millfeed to Lansing Trade Group, LLC (which became a 100% subsidiary of the Company effective January 1, 2019). The amounts received from such transactions are below thresholds established by NASDAQ as standards for director non-independence. The Board has determined that such transactions will not interfere with Mr. Stout's ability to serve as an independent director.

There were no other Related Person Transactions with an officer or director for the year ended December 31, 2018.

Audit Committee Report

The Audit Committee of The Andersons, Inc. Board of Directors operates under a written charter. In May 2018, the Committee was reappointed with three independent directors. The Audit Committee appoints, establishes fees to, reviews audit

scope and plan for, pre-approves non-audit services provided by, and evaluates the performance of, the Company’s independent registered public accounting firm. The Audit Committee’s appointment of the Company’s independent registered public accounting firm is presented to the shareholders in the annual proxy statement for ratification.

Management is responsible for the Company’s internal controls, financial reporting process and compliance with laws and regulations and ethical business standards. The Company’s independent registered public accounting firm is responsible for performing an audit of the consolidated financial statements of the Company in accordance with standards established by the Public Company Accounting Oversight Board (“PCAOB”) and assessing the effectiveness of the Company’s internal controls over financial reporting and for issuing their reports. The Audit Committee is responsible for monitoring and overseeing these processes.

In this context, the Audit Committee has reviewed the Company's audited financial statements and has met and held separate discussions with management, the Company’s internal audit director and the independent registered public accounting firm regarding such financial statements. Management represents to the Audit Committee that the consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles. The Audit Committee reviewed management's report on their review of the system of internal control over financial reporting, including the independent registered public accounting firm's report on the design and operating effectiveness of internal controls. The Audit Committee also discussed with the independent registered public accounting firm matters required to be discussed by PCAOB Auditing Standard 1301, Communications with Audit Committees, and reviewed all material written communications between the independent registered public accounting firm and management.

The Company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and the Audit Committee discussed with the independent registered public accounting firm that firm’s independence.

The Audit Committee has also reviewed the services provided by the independent registered public accounting firm (as disclosed below under the caption “Audit and Other Fees”) when considering their independence.

Based upon the Audit Committee’s discussion with management and the independent registered public accounting firm and the Audit Committee’s review of the representations of management and the report of the independent registered public accounting firm to the Audit Committee, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission.

AUDIT COMMITTEE

Patrick S. Mullin (chair), Ross W. Manire, Jacqueline F. Woods

Use of Compensation Consultants

In 2018, the Compensation and Leadership Development Committee of the Board of Directors retained Semler Brossy Consulting Group of Los Angeles, California as its own independent adviser. The consultant continues to act as an independent adviser to the Committee in connection with 2019 executive compensation for executive officers and non-employee independent directors.

Compensation / Risk Relationship

Company management has reviewed the compensation programs established for all employees and determined that certain aspects of our incentive programs may encourage the taking of undue risk positions, but that such situations are infrequent and mitigated by compensating controls. In all cases, the Company believes that it has appropriate mitigating controls and that compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. The results of this review are discussed below:

(a)

Annual Incentive Plan. The Company’s annual cash compensation program for management ("AIP") is based on one year of pretax income performance as defined by U.S. generally accepted accounting principles, adjusted to remove certain non-operating items, as described in the 2018 Financial Performance Highlights section below. By measuring only one year of income results, an incentive can be created to maximize short-term, same year profits by making unwise credit decisions which might increase long-term counterparty risk. This incentive is mitigated by the following: (i) the Company caps all short-term incentive compensation at two times the targeted amount for each position; (ii) the Company’s Vice

President, Treasurer must establish all credit limits above any material size (varies by business group); (iii) Company officers who participate in AIP also participate in the Company’s long-term equity compensation program, which is coupled with equity retention requirements; and (iv) losses in subsequent years from imprudent credit decisions will reduce compensation in such subsequent years. In 2014, we adopted a policy requiring the repayment or “clawback” of excess cash or equity based compensation where the payments were based on the achievement of financial results that were subsequently the subject of a financial restatement from each executive officer of the Company (regardless of the cause of the restatement) and also the group controller of the business unit involved in the restatement. If this policy proves to be incompatible with final rules adopted by the SEC implementing the requirement of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, (and, in turn, implemented by NASDAQ listing rules) we will adjust our policy accordingly.

(b)

Performance Share Units. Company officers receive Performance Share Units ("PSUs") that vest based upon service and performance which is measured by three years of cumulative diluted earnings per share on a rolling basis. Company officers also receive PSUs that vest based upon relative total shareholder return ("rTSR") over a three-year period. Absent mitigating controls to monitor equity transactions and manage the Company’s leverage, these awards might otherwise induce actions to be taken to improve Company earnings per share results by creating a riskier balance sheet position by increasing the Company’s leverage or through the use of cash to purchase shares on the open market. The PSU award criteria might also encourage aggressive acquisition strategies, under which the Company might incur imprudent amounts of debt to finance riskier acquisitions in order to increase short-term earnings per share and thereby increase PSU awards. This incentive is mitigated by the following controls: (i) acquisitions of any significance require the approval of the CEO and the Board of Directors; (ii) officers have equity retention requirements, which would be negatively impacted by transactions with large inherent risk, (iii) the Company’s leverage is managed within set guidelines by the CEO and the CFO, within levels approved by the Board of Directors.

(c)

Non-qualified stock options. From time to time, the Company may award non-qualified stock options ("NQSOs") to certain Company officers. NQSOs are awards which grant the rights to acquire a certain number of shares of Company stock at the market price on the date of grant for an established term - typically five or more years. The rights to acquire such shares vest to the recipient according to a schedule defined in the terms of the grant agreement. NQSO's present a long-term incentive to executives with the choice of when to exercise the right to acquire the shares under the terms of the grant agreement. In this respect, NQSOs encourage executives to enter into transactions with long-term risks which may result in short-term gains in stock price at the expense of the Company’s long-term financial performance. The temptation to engage in such transactions is mitigated by the following controls: (i) major transactions which might affect short-term stock price require the approval of the CEO and the Board, and (ii) our internal criteria for approving major investments considers several factors, including a RAROC (Risk Adjusted Return on Capital) analysis whereby riskier investments require higher reward prospects for approval, making approval more difficult to achieve.


(d)	Restricted Share Awards. Restricted Share Awards (“RSAs”) are shares of Common stock delivered at grant date that vest over a three-year period. The main objective of RSAs is to promote retention. To a lesser extent, they also create focus on share price and alignment with shareholders, and the Company does not feel this is significant enough to encourage the taking of undue risk positions.

2019 Long-Term Incentive Compensation Plan and

2004 Employee Share Purchase Plan Restated and Amended January 2019

Overview

At the Annual Meeting, our shareholders will be asked to approve The Andersons, Inc. 2019 Long-Term Incentive Compensation Plan (the “2019 Plan”). The 2019 Plan was approved by the Board on February 22, 2019 subject to shareholder approval. The 2019 Plan authorizes the issuance of up to 2,300,000 shares of common stock in aggregate and will replace The Andersons, Inc. 2014 Long-Term Incentive Compensation Plan (the "2014 Plan") with respect to the granting of future equity awards. As of February 8, 2019, 590,764 shares of common stock subject to awards remain outstanding under the 2014 Long-Term Incentive Compensation Plan. We estimate that the number of shares requested under the 2019 Plan will last a minimum of three years. Prior to such depletion, we expect to ask our shareholders to approve an additional share authorization pursuant to a new plan.

The purposes of the 2019 Plan are to:


•	enhance the profitability and value of the Company for the benefit of its stockholders, by providing equity ownership opportunities to key employees so their interests align with those of our stockholders;


•	enable the Company to offer eligible individuals cash and stock‑based incentives in order to attract, retain and reward such individuals; and


•	strengthen the mutuality of interests between such individuals and the Company's stockholders

Under the 2019 Plan, the Company may grant:


•	stock options:


•	stock appreciation rights ("SARs");


•	restricted stock;


•	performance awards;


•	other stock-based and cash-based awards.

As of February 10, 2019, approximately 90 employees and 9 non-employee directors would be eligible to participate in the 2019 Plan, which is lower than with the Company’s prior plan due to a change in eligibility criteria that raised the minimum organization level required for participation based on competitive benchmarking data. As discussed above, the 2019 Plan will replace our prior equity plan and, accordingly, our non-employee directors will participate in the 2019 Plan.

The Board of Directors adopted the 2004 Employee Share Purchase Plan Restated and Amended January 2019 (the "Restated and Amended ESPP") on February 22, 2019, subject to approval by shareholders. This Restated and Amended ESPP amends and restates the 2004 Employee Share Purchase Plan (the "2004 ESPP") adopted by shareholders in 2004 and authorizes an additional 230,000 shares for future issuance plus the number of Common Shares still available for issuance under the 2004 ESPP, including shares that are not exercised by a participant for any reason, or if a participant's right to purchase shares is terminated. Under the 2004 ESPP, 300,000 Common Shares were reserved for purchase to enable and encourage employees to acquire an ownership interest in the Company through purchase of the Company's Common Shares, thereby permitting Employees to share in the growth in value of the Company. As of February 8, 2019, 848,587 Common Shares have now been distributed, which includes the impact of a 2 for 1 share split in 2006 and a 3 for 2 share split in 2014. and the Board wishes to authorize additional shares to be issued under in an employee stock purchase program. The Restated and Amended ESPP will operate under the same general terms of the 2004 ESPP.

Determination to Adopt the 2019 Plan and the Restated and Amended ESPP

In determining to approve the 2019 Plan and the Restated and Amended ESPP, the Board considered, among other things the following:


•	Need for additional shares for purposes of incentive compensation;


•	Employee participation and eligibility levels projected over the next 3-4 years;


•	Growth in Company share price value and employee compensation;


•	Impact of mergers, acquisitions and divestitures on future participation;


•	Number of years the previous plans met the Company's needs.

The 2019 Plan Conforms to Best Practices

We believe the 2019 Plan contains many best practices for the issuance of incentive equity. It will:


•	be administered by a committee of the Board comprised entirely of independent directors;


•	set a fixed number of shares authorized for issuance with no evergreen feature, which will require us to ask our shareholders to approve an additional share authorization pursuant to a new plan upon depletion;


•	require stock options and SARs be granted with an exercise price or grant price of at least 100% of the fair market value of the option shares on the grant date;


•	not include any “liberal” share recycling provisions, so that shares withheld to pay taxes or to exercise options and SARs are not returned to the plan for future awards;


•	prohibit option and SAR repricing without stockholder approval;


•	not provide for vesting sooner than twelve (12) months from the grant date or a Performance Period that is less than twelve months, other than in connection with a Change in Control or in connection with a participant's death or disability, and except with respect to a maximum of five percent (5%) of the aggregate;


•	not provide for automatic full acceleration of outstanding equity awards in the event of a Change in Control if such equity awards continue, are assumed or substituted for by the successor organization;


•	provide Committee discretion to accelerate vesting or lapse of restrictions when deemed in the best interest of the Company;


•	provide maximum limits on the number of awards that can be granted to any non-employee director under the 2019 Plan; and


•	subject all awards granted under the 2019 Plan to the Company’s recoupment policy, as in effect from time to time.

Cessation of Awards under the Amended 2014 Long-Term Incentive Compensation Plan

Effective with the shareholder approval of the 2019 Plan, no further awards will be granted from the 2014 Plan and any unused shares, including any subsequent forfeitures of shares from the outstanding awards made from the 2014 Plan (whether forfeited due to lapse, expiration, termination, cancellation, or satisfaction in cash or property other than common stock), will be available for grant under the 2019 Plan. All outstanding awards granted under the 2014 Plan will continue to be subject to the terms and conditions of the 2014 Plan and the award agreements which conveyed the awards thereunder.

Overhang and Burn Rate

The Company believes in effectively managing its equity compensation programs while minimizing shareholder dilution. For this reason, the Company and the Compensation & Leadership Development Committee considers both the Company’s “burn rate” and our “overhang” percentage in evaluating the impact of grants under our long-term incentive plans on our shareholders. In determining the number of shares requested under the 2019 Plan, the Compensation Committee considered, among other factors, the historical amounts of equity awards granted by the Company as a percentage of the weighted average number of Common Shares outstanding during the year (or the Company’s "burn rate") and the potential dilution of earnings and voting power to shareholders from the issuance of equity awards calculated as the sum of all equity awards outstanding plus shares available for future grant under a plan, divided by Common Shares outstanding (referred to as “Overhang”).

Overhang

Overhang (measuring the potential dilution of earnings and voting power to shareholders from the issuance of equity awards) is generally calculated as the sum of all equity awards outstanding plus shares available for future grant under a plan, divided by Common Shares outstanding. The table below provides a summary of our four-year historical overhang:



Overhang
As of December 31, 2015	7.0	%
As of December 31, 2016	6.3	%
As of December 31, 2017	5.6	%
As of December 31, 2018	5.1	%
Four-Year Annual Average (2015-2018)	6.0	%

As of February 8, 2019, the equity component of the Company’s capital structure consisted of 32,914,782 Common Shares outstanding. Any shares remaining available for issuance under the 2014 Plan, but not subject to previously outstanding awards as of the date of approval of the 2019 Plan by our shareholders, would cease to be authorized for issuance under the 2014 Plan at such date. As mentioned earlier in this Proxy unused shares, including any subsequent forfeitures of shares from the outstanding awards made from the 2014 Plan will be available for grant under the 2019 Plan. As of February 8, 2019, 590,764 shares were available for issuance under the 2014 Plan. If approved, the 2019 Plan would authorize 2,300,000 additional shares, as compared to the aggregate authorized number of shares remaining available under the 2014 Plan as of February 8, 2019. The entire authorized number of shares would be available for issuance as stock options, SARs, restricted stock, performance awards and other equity-based awards.

Potential Overhang



Outstanding RSAs as of February 8, 2019	127,375
Outstanding PSUs as of February 8, 2019	308,396
Outstanding Options as of February 8, 2019	325,000
Total shares requested under 2019 Plan	2,300,000
Shares remaining under 2014 Plan as of February 8, 2019⁽¹⁾	590,764
Total shares requested under Restated and Amended ESPP	230,000
Shares remaining under 2004 ESPP	51,414
Common Shares outstanding as of February 8, 2019	32,914,782
Potential Overhang if 2019 Plan and Restated and Amended ESPP are approved	11.9	%
Potential Overhang if 2019 Plan is approved but Restated and Amended ESPP is not approved	11.3	%
Potential Overhang if 2019 Plan is not approved and Restated and Amended ESPP is approved	5.0	%

⁽¹⁾ 349,229 shares remained in the 2014 Plan after 2019 annual grants effective March 1, 2019

Based on shareholder approval of the 2019 Plan, the Company estimates overhang for the 2019 Plan at 11.1% of Common Shares outstanding.

As of February 8, 2019, the closing price of our Common Shares on the NASDAQ Global Select Market was $34.24 per share.

The potential dilution is a forward-looking statement. Forward-looking statements are not facts, and actual results may differ materially because of factors such as those identified in reports the Company has filed with the Securities and Exchange Commission, including, without limitation, the discretion in determining the number of grantees and the size of the grants, as well as the potential impact of significant corporate events, such as mergers, and of additional future share issuances outside the 2019 Plan.

Burn Rate

Burn rate or run rate (measuring the annual usage of shares) is generally calculated as the number of shares granted divided by the total number of shares outstanding, and generally demonstrates how quickly a company uses available shares. The table below provides a summary of our four-year burn rate under the 2014 Plan:



Burn Rate 2014 Plan
As of December 31, 2015	2.00
As of December 31, 2016	1.55
As of December 31, 2017	1.08
As of December 31, 2018	1.16
Four-Year Annual Average (2015-2018)	1.45
Estimated Annual Burn Rate for the expected life of the 2019 Plan	1.61

The historical burn rate and the potential dilution described above may not be indicative of what the actual amounts will be in the future.

New Plan Benefits

No awards that are conditioned on shareholder approval of the 2019 Plan proposal have been approved by the Committee. The Company has estimated the benefits or number of shares subject to awards that may be granted in the future to executive officers and employees (including employee directors) under the 2019 Plan based on the Company’s current equity award grant practices.

The following table sets forth the amount of awards that would have been made under the proposed 2019 Plan had it been in effect in 2018.



2019 Long-Term Incentive Compensation Plan
Name and Position	Dollar Value ⁽¹⁾
Patrick E. Bowe, Chief Executive Officer	3,062,665
John J. Granato, Chief Financial Officer	—
Anne G. Rex, Vice President, Corporate Controller	153,840
Brian A. Valentine, Senior Vice President, Chief Financial Officer	666,824
Joseph E. McNeely, President, Rail Group	321,685
Naran U. Burchinow, Senior Vice President General Counsel and Corporate Secretary	335,449
Corbett J. Jorgenson, President Grain Group	321,685
Rasesh H. Shah, Senior Director - Rail	321,685
Executive group	6,352,992
Non-executive director group	693,737
Non-executive officer employee group	4,148,669

⁽¹⁾ Based on market price of our common stock on February 8, 2019.

For information regarding the 2018 award grants under the 2014 Plan, see the “Grants of Plan-Based Awards” table on page 52. The grant of future awards under the 2019 Plan will be at the discretion of the Committee.

The following table sets forth the amount of ESPP purchases assuming participants' 2018 contribution elections continue unchanged. The actual number of shares that may be purchased under the Restated and Amended ESPP will depend on each employee’s voluntary election to participate and on the market value of our common stock at various future dates.



2004 Employee Share Purchase Plan Restated and Amended January 2019
Name and Position	Dollar Value ⁽¹⁾
Patrick E. Bowe, Chief Executive Officer	27,495
John J. Granato, Chief Financial Officer	—
Anne G. Rex, Vice President, Corporate Controller	—
Brian A. Valentine, Senior Vice President, Chief Financial Officer	—
Joseph E. McNeely, President, Rail Group	27,495
Naran U. Burchinow, Senior Vice President General Counsel and Corporate Secretary	—
Corbett J. Jorgenson, President Grain Group	—
Rasesh H. Shah, Senior Director - Rail	—
Executive group	82,108
Non-executive director group	—
Non-executive officer employee group	1,441,743

⁽¹⁾ Based on market price of our common stock on February 8, 2019.

Equity Compensation Plan Information

The following table provides information as of December 31, 2018, our fiscal year end, with respect to compensation plans (including individual compensation arrangements) under which the Company’s equity securities are authorized for issuance. This disclosure is being provided in accordance with Item 201(d) of Regulation S-K.



	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights	Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))

	(a)	(b)		(c)
Plan Category	(In thousands)			(In thousands)
Equity compensation plans approved by security holders	1,036,971 ⁽¹⁾	$	35.32	461,078 ⁽²⁾
Equity compensation plans not approved by security holders⁽³⁾	—	—		—

(1)

This number includes 325,000 Non-Qualified Stock Options (“Options”), 246,804 total shareholder return-based performance share units, 246,798 earnings per share-based performance share units, and 218,369 restricted shares outstanding under The Andersons, Inc. 2014 Long-Term Performance Compensation Plan. This number does not include any shares related to the Employee Share Purchase Plan. The Employee Share Purchase Plan allows employees to purchase common shares at the lower of the market value on the beginning or end of the calendar year through payroll withholdings. These purchases are completed as of December 31.


(2)	This number includes 51,414 Common Shares available to be purchased under the Employee Share Purchase Plan and 409,664 shares available under equity compensation plans.

(3)

In connection with the Company’s acquisition of the interests in LTG the Company did not already own the Company established the Lansing Acquisition 2018 Inducement and Retention Award Plan (the “Inducement Plan"). The Inducement Plan is to be used exclusively for the grant of equity awards to individuals who were not previously an employee or non-employee director of the Company (or following a bona fide period of non-employment), as an inducement material to each such individual entering into employment with the Company and to replace existing LTG equity awards. The Company expects to issue up to 650,000 shares of restricted stock under the Inducement Plan in multiple grants. Approximately 280,000 shares have vesting dates of June 30, 2019, April 1, 2020 and April 1, 2021; and the remaining shares have vesting dates of January 1, 2020, January 1, 2021 and January 1, 2022. All awards under the Inducement Plan are subject to each such employee’s continued employment with the Company on such vesting dates. Unvested shares of restricted stock are entitled to vote, entitled to dividends (provided that the actual payment of dividends is conditioned upon the vesting of the shares) and are not transferable.

Registration with the SEC

If the 2019 Plan and/or the Restated and Amended ESPP is approved by our stockholders, we expect to file as soon as reasonably practicable after the Annual Meeting a Registration Statement on Form S-8 with the SEC to register the additional Common Shares that will be issuable thereunder.

Description of the 2019 Long-Term Incentive Compensation Plan

The 2019 Plan provides for grants of stock options, stock appreciation rights, restricted stock, other stock-based awards and other cash-based awards. Directors, officers and other employees of the Company and its subsidiaries are eligible for grants under the 2019 Plan. The purpose of the 2019 Plan is to provide incentives that will attract, retain and motivate high performing officers, directors, and employees by providing them with appropriate incentives and rewards either through a proprietary interest in our long-term success or compensation based on their performance in fulfilling their personal responsibilities. Set forth below is a summary of the material terms of the 2019 Plan. This summary is qualified in its entirety by the terms and conditions of the 2019 Plan itself, a copy of which is attached hereto as Appendix A.

Administration. The 2019 Plan is administered by the Compensation & Leadership Development Committee of our Board of Directors. Among the Compensation & Leadership Development Committee’s powers is the ability to determine the form, amount and other terms and conditions of awards; clarify, construe or resolve any ambiguity in any provision of the 2019 Plan or any award agreement; amend the terms of outstanding awards; and adopt such rules, forms, instruments and guidelines for administering the 2019 Plan as it deems necessary or proper. The Compensation & Leadership Development Committee has authority to administer and interpret the 2019 Plan, to grant discretionary awards under the 2019 Plan, to determine the persons to whom awards will be granted, to determine the types of awards to be granted, to determine the terms and conditions of each award, to determine the number of shares of common stock to be covered by each award, to make all other determinations in connection with the 2019

Plan and the awards thereunder as the Compensation & Leadership Development Committee deems necessary or desirable and to delegate authority under the 2019 Plan to our executive officers.

Available Shares. The aggregate number of shares of common stock which may be issued or used for reference purposes under the 2019 Plan or with respect to which awards may be granted may not exceed 2,300,000 shares, plus any unused shares from the 2014 Plan. The number of shares available for issuance under the 2019 Plan may be subject to adjustment in the event of a reorganization, stock split, merger or similar change in the corporate structure or the outstanding shares of common stock. In the event of any of these occurrences, we may make any adjustments we consider appropriate to, among other things, the number and kind of shares, options or other property available for issuance under the plan or covered by grants previously made under the plan. The shares available for issuance under the plan may be, in whole or in part, either authorized and unissued shares of our common stock or shares of common stock held in or acquired for our treasury. In general, if awards under the 2019 Plan are for any reason canceled, or expire or terminate unexercised, the shares covered by such awards may again be available for the grant of awards under the 2019 Plan.

Eligibility for Participation. Members of our Board of Directors, as well as officers and employees of the Company or any of our subsidiaries and affiliates are eligible to receive awards under the 2019 Plan. The maximum value of shares which may be granted to any individual non-employee director in any one year is $500,000.

Award Agreement. Awards granted under the 2019 Plan are evidenced by award agreements, which need not be identical, that provide additional terms, conditions, restrictions and/or limitations covering the grant of the award, including, without limitation, additional terms providing for the acceleration of exercisability or vesting of awards, as determined by the Compensation & Leadership Development Committee.

Stock Options. The Compensation & Leadership Development Committee may grant nonqualified stock options to eligible individuals and incentive stock options only to eligible employees. The Compensation & Leadership Development Committee will determine the number of shares of our common stock subject to each option, the term of each option, which may not exceed ten years, or five years in the case of an incentive stock option granted to a ten percent stockholder, the exercise price, the vesting schedule, if any, and the other material terms of each option. No incentive stock option or nonqualified stock option may have an exercise price less than the fair market value of a share of our common stock at the time of grant or, in the case of an incentive stock option granted to a ten percent stockholder, 110% of such share’s fair market value. Options will be exercisable at such time or times and subject to such terms and conditions as determined by the Compensation & Leadership Development Committee at grant and the exercisability of such options may be accelerated by the Compensation & Leadership Development Committee.

Stock Appreciation Rights. The Compensation & Leadership Development Committee may grant stock appreciation rights, which we refer to as SARs. A SAR is a right to receive a payment in shares of our common stock or cash, as determined by the Compensation & Leadership Development Committee, equal in value to the excess of the fair market value of one share of our common stock on the date of exercise over the exercise price per share established in connection with the grant of the SAR. The term of each SAR may not exceed ten years. The exercise price per share covered by a SAR will be the fair market value of our common stock on the date of grant.

Restricted Stock. The Compensation & Leadership Development Committee may award shares of restricted stock. Except as otherwise provided by the Compensation & Leadership Development Committee upon the award of restricted stock, the recipient generally has the rights of a stockholder with respect to the shares, including the right to receive dividends, the right to vote the shares of restricted stock and, conditioned upon full vesting of shares of restricted stock, the right to tender such shares, subject to the conditions and restrictions generally applicable to restricted stock or specifically set forth in the recipient’s restricted stock agreement. The Compensation & Leadership Development Committee may determine at the time of award that the payment of dividends, if any, will be deferred until the expiration of the applicable restriction period.

Recipients of restricted stock are required to enter into a restricted stock agreement with us that states the vesting periods, any restrictions to which the shares are subject, which may include satisfaction of pre-established performance goals, and the criteria or date or dates on which such restrictions will lapse.

If the grant of restricted stock or the lapse of the relevant restrictions is based on the attainment of performance goals, the Compensation & Leadership Development Committee will establish for each recipient the applicable performance goals, formulae or standards and the applicable vesting percentages with reference to the attainment of such goals or satisfaction of such formulae or standards while the outcome of the performance goals are substantially uncertain. Such performance goals may incorporate provisions for disregarding, or adjusting for, changes in accounting methods, corporate transactions, including, without limitation, dispositions and acquisitions, and other similar events or circumstances. The performance goals for performance-based restricted

stock will be based on one or more of the objective criteria set forth on Exhibit A to the 2019 Plan and are discussed in general below.

Other Stock-Based Awards. The Compensation & Leadership Development Committee may, subject to limitations under applicable law, make a grant of such other stock-based awards, including, without limitation, performance units, dividend equivalent units, stock equivalent units, restricted stock and deferred stock units under the 2019 Plan that are payable in cash or denominated or payable in or valued by shares of our common stock or factors that influence the value of such shares. The Compensation & Leadership Development Committee may determine the terms and conditions of any such other awards, which may include the achievement of certain minimum performance goals and/or a minimum vesting period. The performance goals for performance-based other stock-based awards will be based on one or more of the objective criteria set forth on Exhibit A to the 2019 Plan and discussed in general below.

Other Cash-Based Awards. The Compensation & Leadership Development Committee may grant awards payable in cash. Cash-based awards will be in such form, and dependent on such conditions, as the Compensation & Leadership Development Committee will determine, including, without limitation, being subject to the satisfaction of vesting conditions or awarded purely as a bonus and not subject to restrictions or conditions. If a cash-based award is subject to vesting conditions, the Compensation & Leadership Development Committee may accelerate the vesting of such award in its discretion.

Performance Awards. The Compensation & Leadership Development Committee may grant a performance award to a participant payable upon the attainment of specific performance goals. If the performance award is payable in cash, it may be paid upon the attainment of the relevant performance goals either in cash or in shares of restricted stock, based on the then current fair market value of such shares, as determined by the Compensation & Leadership Development Committee. Based on service, performance and/or other factors or criteria, the Compensation & Leadership Development Committee may, at or after grant, accelerate the vesting of all or any part of any performance award.

Performance Goals. The Compensation & Leadership Development Committee may grant awards of restricted stock, performance awards, and other stock-based awards. These awards may be granted, vest and be paid based on attainment of specified performance goals established by the Compensation Leadership and Development Committee. These performance goals may be based on the attainment of a certain target level of, or a specified increase or decrease in various measures approved by the Compensation & Leadership Development Committee, including without limitation: (1) earnings per share; (2) operating income; (3) income before taxes; (4) net income; (5) cash flow; (6) gross profit; (7) gross profit return on investment; (8) gross margin return on investment; (9) gross margin; (10) operating margin; (11) working capital metrics or ratios; (12) earnings before interest and taxes; (13) earnings before interest, tax, depreciation and amortization; (14) return on equity; (15) return on assets; (16) return on capital; (17) return on invested capital; (18) net revenues; (19) gross revenues; (20) annual recurring revenues; (21) recurring revenues; (22) license revenues; (23) sales or market share; (24) employee engagement or turnover; (25) customer satisfaction; (26) total shareholder return; (27) economic profit or economic value added; (28) specified objectives with regard to limiting the level of increase in all or a portion of our bank debt or other long-term or short-term public or private debt or other similar financial obligations, which may be calculated net of cash balances and other offsets and adjustments as may be established by the Compensation & Leadership Development Committee; (29) the fair market value of a share of our common stock; (30) the growth in the value of an investment in our common stock assuming the reinvestment of dividends; (31) control of or reduction in operating expenses; and/or such other criteria as may be determined by authority delegated by the Committee to the Chief Executive Officer.

To the extent permitted by law, the Compensation & Leadership Development Committee may also exclude the impact of an event or occurrence which the Compensation & Leadership Development Committee determines should be appropriately excluded, such as (1) restructurings, discontinued operations, extraordinary items and other unusual or non-recurring charges; (2) an event either not directly related to our operations or not within the reasonable control of management; or (3) a change in accounting standards required by generally accepted accounting principles.

Performance goals may also be based on an individual participant’s performance goals, as determined by the Compensation & Leadership Development Committee.

In addition, all performance goals may be based upon the attainment of specified levels of our performance, or the performance of a subsidiary, division or other operational unit, under one or more of the measures described above relative to the performance of other corporations. The Compensation & Leadership Development Committee may designate additional business criteria on which the performance goals may be based or adjust, modify or amend those criteria.

Change in Control. In the event of a Change in Control of the Company (as defined in the 2019 Plan), and except as otherwise provided by the Compensation & Leadership Development Committee in an Award Agreement, a Participant’s unvested Award shall not vest automatically. Such awards may be, in the discretion of the Compensation & Leadership Development Committee,

(1) assumed and continued or substituted in accordance with applicable law; (2) purchased by us for an amount equal to the excess of the price of a share of our common stock paid in a change in control over the exercise price of the awards; or (3) cancelled if the price of a share of our common stock paid in a change in control is less than the exercise price of the award. Notwithstanding any other provision to the contrary, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time. As described below, our awards typically impose a so-called double-trigger for accelerated vesting: a change of control, and an actual termination or constructive discharge (or “good reason resignation”) from the Company.

Shareholder Rights. Except as otherwise provided in the applicable award agreement, and with respect to an award of restricted stock, a participant has no rights as a shareholder with respect to shares of our common stock covered by any award until the participant becomes the record holder of such shares.

Amendment and Termination. Notwithstanding any other provision of the 2019 Plan, our Board of Directors may at any time amend any or all of the provisions of the 2019 Plan, or suspend or terminate it entirely, retroactively or otherwise, subject to shareholder approval in certain instances; provided, however, that, unless otherwise required by law or specifically provided in the 2019 Plan, the rights of a participant with respect to awards granted prior to such amendment, suspension or termination may not be adversely affected without the consent of such participant.

Transferability. Awards granted under the 2019 Plan generally are nontransferable, other than by will or the laws of descent and distribution, except that the Compensation Leadership and Development Committee may provide for the transferability of nonqualified stock options at the time of grant or thereafter to certain family members.

Recoupment of Awards. The 2019 Plan provides that awards granted under the 2019 Plan are subject to any recoupment policy that we may have in place or any obligation that we may have regarding the clawback of “incentive-based compensation” under the Securities Exchange Act of 1934 or under any applicable rules and regulations promulgated by the Securities and Exchange Commission.

Effective Date; Term. The 2019 Plan was approved by the Board of Directors on February 22, 2019 and is being submitted to the shareholders for ratification at the 2019 Annual Meeting. If ratified, the term of the 2019 Plan will be 10 years from the 2019 Annual Meeting date and no awards will be made thereafter. Any award outstanding under the 2019 Plan at the time of termination will remain in effect until such award is exercised or has expired in accordance with its terms.

Certain U.S. Federal Income Tax Consequences

The rules concerning the federal income tax consequences with respect to options granted and to be granted pursuant to the 2019 Plan are quite technical. Moreover, the applicable statutory provisions are subject to change, as are their interpretations and applications, which may vary in individual circumstances. Therefore, the following is designed to provide a general understanding of the U.S. federal income tax consequences with respect to such grants. However, the following discussion does not set forth any gift, estate, social security or state or local tax consequences that may be applicable and is limited to the U.S. federal income tax consequences to individuals who are citizens or residents of the United States, other than those individuals who are taxed on a residence basis in a foreign country.

Incentive Stock Options. In general, an employee will not realize taxable income upon either the grant or the exercise of an incentive stock option and the Company will not realize an income tax deduction at either of such times. In general, however, for purposes of the alternative minimum tax, the excess of the fair market value of the shares of common stock acquired upon exercise of an incentive stock option (determined at the time of exercise) over the exercise price of the incentive stock option will be considered income. If the recipient was continuously employed from the date of grant until the date three months prior to the date of exercise and such recipient does not sell the shares of common stock received pursuant to the exercise of the incentive stock option within either (i) two years after the date of the grant of the incentive stock option, or (ii) one year after the date of exercise, a subsequent sale of such shares of common stock will result in long-term capital gain or loss to the recipient and will not result in a tax deduction to the Company.

If the recipient is not continuously employed from the date of grant until the date three months prior to the date of exercise or such recipient disposes of the shares of common stock acquired upon exercise of the incentive stock option within either of the time periods described in the immediately preceding paragraph, the recipient will generally realize as ordinary income an amount equal to the lesser of (i) the fair market value of such shares of common stock on the date of exercise over the exercise price, and (ii) the amount realized upon disposition over the exercise price. In such event, subject to the limitations under Sections 162(m) and 280G of the Internal Revenue Code (as described below), the Company generally will be entitled to an income tax deduction equal to the amount recognized as ordinary income. Any gain in excess of such amount realized by the recipient as ordinary income would be taxed at the rates applicable to short-term or long-term capital gains (depending on the holding period).

Nonqualified Stock Options. A recipient will not realize any taxable income upon the grant of a nonqualified stock option and the Company will not receive a deduction at the time of such grant unless such option has a readily ascertainable fair market value (as determined under applicable tax law) at the time of grant. Upon exercise of a nonqualified stock option, the recipient generally will realize ordinary income in an amount equal to the excess of the fair market value of the shares of common stock on the date of exercise over the exercise price. Upon a subsequent sale of such shares of common stock by the recipient, the recipient will recognize short-term or long-term capital gain or loss depending upon his or her holding period of such shares of common stock. Subject to the limitations under Sections 162(m) and 280G of the Code (as described below), the Company will generally be allowed a deduction equal to the amount recognized by the recipient as ordinary income.

Certain Other Tax Issues. In addition to the matters described above, (i) any entitlement to a tax deduction on the part of the Company is subject to applicable federal tax rules (including, without limitation, Section 162(m) of the Internal Revenue Code regarding the $1,000,000 limitation on deductible compensation), (ii) the exercise of an incentive stock option may have implications in the computation of alternative minimum taxable income, (iii) certain awards under the Plan may be subject to the requirements of Section 409A of the Internal Revenue Code (regarding nonqualified deferred compensation), and (iv) if the exercisability or vesting of any option is accelerated because of a change in control, such option (or a portion thereof), either alone or together with certain other payments, may constitute parachute payments under Section 280G of the Internal Revenue Code, which excess amounts may be subject to excise taxes. Officers and directors of the Company subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, may be subject to special tax rules regarding the income tax consequences concerning their options.

The 2019 Plan is not subject to any of the requirements of the Employee Retirement Income Security Act of 1974, as amended. The 2019 Plan is not, nor is it intended to be, qualified under Section 401(a) of the Internal Revenue Code.

The Board of Directors recommends a vote FOR approval of the 2019 Plan.

Approval of the 2004 Employee Share Purchase Plan Restated and Amended January 2019

Description of the Restated and Amended ESPP

The Restated and Amended ESPP permits employees of the Company who elect to participate ("Participants") to purchase Common Shares under the Restated and Amended ESPP through payroll deductions. The purpose of the Restated and Amended ESPP is to enable and encourage employees to acquire an ownership interest in the Company through the purchase of Common Shares, thereby permitting employees to share in the growth of the Company. The following is a summary of the principal features of the Restated and Amended ESPP. This summary is qualified in its entirety by the terms and conditions of the Restated and Amended ESPP itself, a copy of which is attached hereto as Appendix B.

The Restated and Amended ESPP will be administered by the Compensation and Leadership Development Committee, which will have the authority, subject to certain limitations, to determine eligibility for participation in the plan and to prescribe the terms and conditions under which Common Shares may be purchased under the Restated and Amended ESPP. All employees of the Company will be eligible to participate in the Restated and Amended ESPP, subject to certain tax law limitations. As of December 31, 2018, the Company had 1,724 full-time and 78 part-time, temporary full-time or seasonal employees.

Participants may direct the deduction of a specified percentage from their eligible compensation, to be used to purchase Common Shares under the Restated and Amended ESPP. A Participant may cease contributions, annually re-enroll in the Restated and Amended ESPP, or increase or decrease the rate of contributions during the offering enrollment period in accordance with the rules and procedures prescribed by the Compensation and Leadership Development Committee from time to time. A Participant will automatically participate in each successive plan period until the time of such Participant's withdrawal from the Restated and Amended ESPP. All deductions made from the eligible compensation of a Participant will be credited on the records of the Company and used by the Company to affect the purchases of Common Shares under the Restated and Amended ESPP.

Each plan period lasts twelve months, beginning on January 1 of each year and ending on the following December 31. At the beginning of each plan period, each Participant will be deemed to have been granted an option to purchase, on the last day of the plan period, Common Shares at an exercise price to be determined by the Compensation and Leadership Development Committee, which price shall be the lesser of (i) the fair market value of the Common Shares as of the first day of such plan period or (ii) the fair market value of the Common Shares as of the last day of such plan period, in each case less a discount to market as specified by the Committee from time to time, such discount not to exceed 15%. The Company does not currently intend to offer a discount to market as part of the Restated and Amended ESPP. The total amount of consideration eligible for the exercise of such deemed option will not exceed the total amount credited to such Participant's account pursuant to the Restated and Amended ESPP for such plan period.

The Company will affect purchases of Common Shares under the Restated and Amended ESPP by allocating the appropriate number of Common Shares to each Participant's share account, until the maximum number of Common Shares available under the Restated and Amended ESPP have been issued and purchased pursuant to the Restated and Amended ESPP's terms. Participants will have all of the rights and privileges of any shareholder with respect to such shares. Any cash dividends paid with respect to a Participant's Common Shares will be either paid to Participant or credited to such Participant's account to be used to purchase Common Shares pursuant to the Restated and Amended ESPP. All Common Share distributions or Common Share splits will be credited to a Participant's share account, which will be administered by the Compensation and Leadership Development Committee. All Common Share rights and warrants will be distributed to a Participant as if such Participant were the record holder of the Common Shares in his or her share account. Upon termination of the Participant's employment with the Company or participation in the Restated and Amended ESPP, all Common Shares credited to such account, and all uninvested cash credited to the Participant's account will be distributed to the Participant. The Company will pay the costs of administering the Restated and Amended ESPP, including the fees and expenses of auditors and counsel in connection with the Restated and Amended ESPP.

The Company will not grant to any Participant any right to purchase Common Shares if the exercise of such right would cause such Participant to own five percent or more of the combined voting power or value of all classes of the Company's capital shares. In addition, the number of shares which may be purchased by any Participant in any plan period cannot exceed the number of shares the fair market value of which, together with the fair market value of shares previously purchased by such Participant during such calendar year, in the aggregate exceeds $25,000. For the

preceding limitation, fair market value is measured on the first day of the plan period.

Subject to the provisions of Section 423 of the Code, the Company has the power to amend the Restated and Amended ESPP, in its sole discretion, at any time in any respect, except that the Company may not make any such amendment if it would retroactively impair or otherwise adversely affect the rights of any person to benefits that have already accrued under the Restated and Amended ESPP.

The aggregate number of Common Shares subject to issuance under the Restated and Amended ESPP is 230,000 subject to adjustment in the event of a share dividend, share split or similar change plus any remaining unissued Common Shares from the 2004 ESPP. These Common Shares may be newly issued Common Shares or may be Common Shares purchased for the Restated and Amended ESPP on the open market at the discretion of the Company.

The Restated and Amended ESPP will terminate at such time as all of the Common Shares reserved for purchase under the plan have been purchased, or at any other time at the discretion of the Board of Directors.

Federal Income Tax Consequences

The following discussion is intended only as a general summary of the federal income tax consequences arising from the purchase of Common Shares pursuant to the Restated and Amended ESPP ("Plan Shares") and the subsequent disposition of such Plan Shares, as based upon the Internal Revenue Code (the "Code") as currently in effect. Because federal income tax consequences will vary as a result of individual circumstances, each employee participating in the Restated and Amended ESPP should consult his or her tax advisor with respect to the tax consequences of the purchase or disposition of Plan Shares. Moreover, the following summary relates only to Participants' federal income tax treatment. The state, local and foreign tax consequences may be substantially different.

The Company intends the Restated and Amended ESPP to be an “employee stock purchase plan” as defined in Section 423 of the Code, and plans to report the tax consequences of rights to purchase shares and the exercise of such rights pursuant to the Restated and Amended ESPP accordingly. If the Restated and Amended ESPP is not so qualified for any reason, including failure to receive the requisite shareholder approval, then the grant of a right to purchase Plan Shares will generally not be taxable, but Participants will recognize ordinary compensation income on the Purchase Date equal to the difference between the price paid and the fair market value of the Plan Shares on that date, and the Company will be entitled to a deduction for the same amount. Thereafter, a Participant will be taxed as any other investor in Common Shares, as if the Participant had purchased the Plan Shares at fair market value. Except where noted otherwise, the following discussion assumes that the Restated and Amended ESPP is so qualified.

Under applicable provisions of the Code, Participants remain taxable on all compensation income, including the amount of payroll deductions used to purchase Plan Shares. However, assuming the Restated and Amended ESPP is qualified pursuant to Code Section 423, Participants will not recognize taxable income, and the Company will not be entitled to a deduction, on the date of grant (the “Grant Date”) or the date of exercise (the "Purchase Date") of a right to purchase Plan Shares.

The tax treatment of a Participant who sells Plan Shares (or makes a taxable exchange of Plan Shares for other property) depends on how long the Participant holds those Plan Shares, measured from the Grant Date and the Purchase Date. If a Participant sells Plan Shares more than two years after the Grant Date and more than one year after the Purchase Date, the gain or loss on such sale is computed as the difference between the price paid and the sale price. If the Plan Shares are sold at a gain, a portion of the gain will be treated as ordinary compensation income equal to the lesser of (a) the difference between the fair market value of the Plan Shares on the Grant Date and the amount paid for such Plan Shares and (b) the difference, if any, between the fair market value of the Plan Shares on the date of disposition and the amount the Participant paid for such Plan Shares. If there is additional gain (in excess of the ordinary income amount), the remaining gain will be long-term capital gain. If the Plan Shares are sold at a loss, the loss will be a capital loss, and no portion of the loss will be treated as an ordinary loss or deduction. The Company will not be entitled to any deduction as a result of any such sale.

If a Participant sells Plan Shares within two years after the Grant Date or within one year after the Purchase Date (a "disqualifying disposition"), a two-step analysis is required. First, the Participant will recognize taxable, ordinary compensation income in the year of sale equal to the difference between the fair market value of the Plan Shares on the Purchase Date and the amount paid for such Plan Shares. This amount of ordinary compensation income is then treated as an additional amount paid for the Plan Shares, so that the Participant is deemed to have purchased the Plan Shares at

their fair market value on the Purchase Date. Second, capital gain or loss will be computed as the difference between the actual sale price and the deemed purchase price (i.e., the difference between the actual sale price and the fair market value on the Purchase Date). The capital gain or loss will be long-term or short-term gain or loss depending on whether the Participant held the Plan Shares for more than one year after the Purchase Date. In the case of such a disqualifying disposition, the Company will be entitled to a deduction in the year of sale equal to the amount the Participant reports as ordinary income.

If a Participant makes a gift or otherwise disposes of Plan Shares other than in a taxable exchange or sale, the Participant may recognize taxable, ordinary compensation income in the year of such disposition. In the case of a disposition more than two years after the Grant Date and more than one year after the Purchase Date, if the fair market value of the Plan Shares on the date of disposition is greater than the amount the Participant paid for such Plan Shares, the amount of ordinary compensation income will be the lesser of the difference between the fair market value of the Plan Shares on the Grant Date and the amount paid for such Plan Shares and the difference between the fair market value of the Plan Shares on the date of disposition and the amount the Participant paid for such Plan Shares. If the fair market value of the Plan Shares on the date of disposition is not greater than the amount the Participant paid for such Plan Shares, the Participant does not recognize any ordinary compensation income. In the case of such a disposition within two years after the Grant Date or within one year after the Purchase Date (a "disqualifying disposition"), the amount of ordinary compensation income will be the difference between the fair market value of the Plan Shares on the Purchase Date and the amount paid for such Plan Shares.

If a Participant dies while still holding Plan Shares and the fair market value of the Plan Shares on the date of death is greater than the amount the Participant paid for such Plan Shares, the tax return for the year of death must include ordinary compensation income equal to the lesser of (a) the difference between the fair market value of the Plan Shares on the Grant Date and the amount paid for such Plan Shares and (b) the difference between the fair market value of the Plan Shares on the date of death and the amount the Participant paid for such Plan Shares. If the fair market value of the Plan Shares on the date of death is not greater than the amount the Participant paid for such Plan Shares, the tax return for the year of death will not include any ordinary income relating to the Plan Shares.

Any dividends paid on Plan Shares must be reported as ordinary income in the year paid, regardless of the fact that such dividends are reinvested in additional Plan Shares. The sale of Plan Shares purchased through dividend reinvestment is subject to the income tax rules that normally apply to the sale of securities.

As discussed above, the compensation to an employee related to the purchase and disposition of Plan Shares is only deductible to the Company if the employee makes a disqualifying disposition of the Plan Shares.

The discussion set forth above is intended only as a summary and does not purport to be a complete enumeration or analysis of all potential tax effects relevant to Participants under the Restated and Amended ESPP. It is accordingly recommended that all Participants consult their own tax advisors concerning federal, state, local and foreign income and other tax considerations relating to the Restated and Amended ESPP.

The Board of Directors recommends a vote FOR approval of the Restated and Amended ESPP.

Proposal for an Advisory Vote on Executive Compensation

As required by Section 14A of the Exchange Act, as amended by the Dodd-Frank Act, the Board is submitting a non-binding advisory resolution to our shareholders for approval of the compensation of the Company’s named executive officers as disclosed in the Compensation Discussion and Analysis included within this proxy statement.

We believe that our executive compensation programs appropriately link pay to performance and are well aligned with the long-term interests of our shareholders. We believe that the compensation we have given, viewed in the context of our operating results, demonstrates the appropriateness of our executive compensation practices. Please refer to the Compensation Discussion and Analysis contained in this proxy statement for a description of the philosophy and design strategy of our compensation programs, our peer group benchmarking, and the actual values given as compensation for our named executive officers.

This advisory resolution, commonly referred to as a “say-on-pay” resolution, is non-binding on the Board of Directors. Although non-binding, the Board and the Compensation and Leadership Development Committee will review and consider the voting results when making future decisions regarding our executive compensation program.

Accordingly, the Board of Directors unanimously recommends a vote FOR the approval of the following advisory resolution on executive compensation:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the compensation tables and any related material disclosed in this proxy statement is hereby APPROVED on an advisory basis.

Appointment of Independent Registered Public Accounting Firm

Independent Registered Public Accounting Firm

Deloitte & Touche LLP ("Deloitte") has served as the Company's independent registered public accounting firm since 2015. Based on its evaluation of Deloitte's independence and performance on the recent audit, the Audit Committee has appointed Deloitte as the independent registered public accounting firm of the Company for the year ending December 31, 2019 and now seeks the shareholders' ratification of such appointment.

Representatives of Deloitte are expected to be present at the annual meeting and will be given the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.

Audit and Other Fees

During 2018 and 2017, Deloitte not only acted as the Company’s independent registered public accounting firm but also rendered other services to the Company. The following table sets forth the aggregate fees for professional services rendered by Deloitte for audit, audit-related, tax and other services related to fiscal year 2018 and 2017.



Fees	2018		2017
Audit ⁽¹⁾	$	3,517,652	$	3,232,886
Audit-related ⁽²⁾	1,045,521		26,000
Tax ⁽³⁾	591,925		36,700
Other ⁽⁴⁾	46,800		—
Total	$	5,201,898	$	3,295,586


(1)	Comprises the audits of the Company’s annual consolidated financial statements and internal controls over financial reporting and reviews of the Company’s quarterly consolidated financial statements, as well as the statutory audits of the Company’s consolidated subsidiaries, attest services and consents to SEC filings.


(2)	Amounts incurred in 2018 related to due diligence efforts for the Company's acquisition of Lansing Trade Group. Amounts incurred in 2017 related to advising on internal control matters related to SAP integration during the implementation for the Plant Nutrient Group.


(3)	Amounts incurred in 2018 and 2017 were for services related to tax compliance, consultations and planning projects.


(4)	Amounts incurred in 2018 related to advisory services for the adoption of the new leasing standard.

Policy on Audit Committee Pre-Approval of Services Performed by the Independent Registered Public Accounting Firm

In accordance with the Securities and Exchange Commission’s rules issued pursuant to the Sarbanes-Oxley Act of 2002 which require, among other things, that the Audit Committee pre-approve all audit and non-audit services provided by the Company’s independent registered public accounting firm, the Audit Committee has adopted a formal policy on auditor independence requiring the approval by the Audit Committee of all professional services rendered by the Company’s independent registered public accounting firm. Under this policy, the Audit Committee specifically pre-approves at the beginning of each fiscal year all known audit and audit-related services to be provided by the independent registered public accounting firm during that fiscal year within a general budget. Additional services that arise from time to time are pre-approved by the Audit Committee Chair and presented to the full Audit Committee at the next meeting. The Audit Committee is updated as to the actual billings for these items at each meeting.

Tax and all other services that are permitted to be performed by the independent registered public accounting firm, but could also be performed by other service providers, require specific pre-approval by the Audit Committee after considering the impact of these services on auditor independence. If the Audit Committee pre-approves services in these categories by the independent registered public accounting firm, the Audit Committee is updated at each meeting as to the actual fees billed under each project.

All audit-related services, tax and other service fees were pre-approved by the Audit Committee. All 2018 and 2017 fees noted above were for employees of Deloitte.

Proposal to Ratify the Appointment of Independent Registered Public Accounting Firm

The Audit Committee has recommended, and the Board of Directors has approved, Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2019.

If the shareholders do not ratify this appointment by a majority of the shares represented in person or by proxy at the Annual Meeting, the Audit Committee may consider other independent registered public accounting firms. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of our shareholders.

The Board of Directors recommends a vote FOR ratification of the appointment of Deloitte & Touche LLP as the independent registered public accounting firm.

Share Ownership

Shares Owned by Directors and Executive Officers

The following table indicates the number of Common Shares beneficially owned as of February 28, 2019. The table displays this information for the directors and executive officers as a group, for each director individually and for each of the Named Executive Officers (as defined hereafter). Unless otherwise indicated, each person has sole investment and voting power with respect to the shares set forth in the following table. Except as noted below, the address of the beneficial owners is The Andersons, Inc., 1947 Briarfield Boulevard, Maumee, Ohio 43537.



	Amount and Nature of Shares Beneficially Owned
Name	Options^(a)	Common Shares		Aggregate Number of Shares Beneficially Owned	Percent of Class ^(b)
Michael J. Anderson, Sr.	—	565,477	^(c)	565,477	1.7	%
Gerard M. Anderson	—	336,002	^(d)	336,002	1.0	%
Patrick E. Bowe	325,000	101,590		426,590	1.3	%
Naran U. Burchinow	—	24,515		24,515	*
Stephen F. Dowdle	—	6,120		6,120	*
John J. Granato	—	17,881	^(e)	17,881	*
Corbett J. Jorgenson	—	14,296		14,296	*
Catherine M. Kilbane	—	28,989		28,989	*
Robert J. King, Jr.	—	30,571	^(f)	30,571	*
Joseph E. McNeely	—	11,983		11,983	*
Ross W. Manire	—	17,527		17,527	*
Patrick S. Mullin	—	12,443		12,443	*
Anne G. Rex	—	17,916		17,916	*
Rasesh H. Shah	—	23,540	^(g)	23,540	*
John T. Stout, Jr.	—	24,874	^(h)	24,874	*
Brian A. Valentine	—	12,225		12,225	*
Jacqueline F. Woods	—	20,558		20,558	*
All directors and executive officers as a group (22 persons)	325,000	1,324,614		1,649,614	5.0	%


(a)	Includes options exercisable within 60 days of February 28, 2019.


(b)	An asterisk denotes percentages less than one percent.


(c)	Includes 150,138 Common Shares held by Mrs. Carol H. Anderson, Mr. Anderson’s spouse. Mr. Anderson disclaims beneficial ownership of such Common Shares.


(d)	Includes 316,497 Common shares held by trust.


(e)	Effective February 28, 2018, John J. Granato left the company.


(f)	Includes 18,970 Common shares held by trust.


(g)	Effective July 27, 2018, Rasesh H. Shah left the company.


(h)	Includes 4,219 Common shares held by trust.

Share Ownership of Certain Beneficial Owners

The following table indicates the number of Common Shares beneficially owned by each shareholder who is known to own beneficially more than 5% of our Common Shares as of December 31, 2018:



Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Common Shares Beneficially Owned	Percent of Class as of December 31, 2018
Common Shares	Blackrock, Inc. ^(a) 55 East 52^nd Street New York, NY 10055	3,918,354	13.8	%
Common Shares	The Vanguard Group, Inc. ^(b) 100 Vanguard Boulevard Malvern, PA 19355	2,945,250	9.0	%
Common Shares	Victory Capital Management, Inc. ^(c) 4900 Tiedeman Rd., 4th Floor Brooklyn, OH 44144	2,542,109	7.8	%
Common Shares	Dimensional Fund Advisors LP ^(d) Building One 6300 Bee Cave Road Austin, TX 78746	2,354,883	8.3	%


(a)	Based upon information set forth in the Schedule 13G filed on January 24, 2019 by Blackrock, Inc. Blackrock, Inc. is a holding company or control person with the sole power to vote 3,839,018 Common Shares and sole dispositive power over 3,918,354 Common Shares.

(b)

Based upon information set forth in the Schedule 13G filed on February 11, 2019 by The Vanguard Group, Inc. The Vanguard Group, Inc. is an investment adviser and holding company with the sole power to vote 26,455 Common Shares and sole dispositive power over 2,917,345 Common Shares. Vanguard Fiduciary Trust Company (“VFTC”) is a wholly owned subsidiary of The Vanguard Group, Inc. and an investment manager of collective trust accounts with the sole power to vote and dispose of 23,805 Common Shares. Vanguard Investments Australia, Ltd. ("VIA") is a wholly owned subsidiary of The Vanguard Group, Inc. and an investment manager of Australian investment offerings with the sole power to vote and dispose of 6,750 Common Shares.


(c)	Based upon information set forth in the Schedule 13G filed on February 1, 2019 by Victory Capital Management, Inc. Victory Capital Management, Inc. is an investment adviser with the sole power to vote 2,493,759 Common Shares and sole dispositive power over 2,542,109 Common Shares.


(d)	Based upon information set forth in the Schedule 13G filed on February 8, 2019 by Dimensional Fund Advisors LP. Dimensional Fund Advisors LP is an investment adviser with the sole power to vote 2,268,358 Common Shares and sole dispositive power over 2,354,883 Common Shares.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires executive officers and directors to file reports of securities ownership and changes in such ownership with the Securities and Exchange Commission. In addition, persons that are not executive officers or directors but who beneficially own more than ten percent of Common Shares must also report under Section 16(a). Copies of all Section 16(a) forms filed by officers, directors and greater-than-10% owners are required to be provided to the Company.

We have reviewed the reports and written representations from the executive officers and directors. Based on our review, we believe that all filing requirements were met during 2018.

Compensation and Leadership Development Committee Interlocks and Insider Participation

No member of our Compensation and Leadership Development Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of our Board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation and Leadership Development Committee.

Executive Compensation

Compensation and Leadership Development Committee Report

The Compensation and Leadership Development Committee ("the Committee") has reviewed and discussed with management the Compensation Discussion and Analysis which follows, and, based on such review and discussion, recommends to the Board of Directors of The Andersons, Inc. that it be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2018.

COMPENSATION AND LEADERSHIP DEVELOPMENT COMMITTEE

Jacqueline F. Woods (chair), Catherine M. Kilbane, Robert J. King, Jr., John T. Stout, Jr.

Compensation Discussion and Analysis

The following section describes the components of our executive compensation program for our named executive officers (“Named Executive Officers” or “NEOs”), whose compensation is set forth in the Summary Compensation Table and other compensation tables contained in this proxy statement. For the year ended December 31, 2018, our NEOs included the following individuals:



Officers	Title as of December 31, 2018
Patrick E. Bowe	Chief Executive Officer
John J. Granato	Chief Financial Officer ⁽¹⁾
Anne G. Rex	Vice President, Corporate Controller ⁽¹⁾
Brian A. Valentine	Senior Vice President, Chief Financial Officer ⁽²⁾
Joseph E. McNeely	President, Rail Group
Naran U. Burchinow	Senior Vice President, General Counsel & Corporate Secretary
Corbett J. Jorgenson	President, Grain Group
Rasesh H. Shah	Senior Director - Rail ⁽³⁾

1) Effective February 28, 2018, John J. Granato left the company to pursue other interests. Anne G. Rex, Vice President & Corporate Controller, was named Interim Chief Financial Officer.

2) Effective August 1, 2018, Brian A. Valentine joined the company as Chief Financial Officer.

3) Effective July 27, 2018, Rasesh H. Shah retired from the company.

Executive Summary

Rewarding Performance and Achieving Objectives

Our compensation plans and policies are structured to achieve the following goals:


•	Compensation should reflect a balanced mix of short and long-term components.


•	Short-term cash compensation (which is both base pay and annual incentive) should be based on annual Company, business unit and individual performance.


•	Long-term equity compensation should encourage achievement of the Company’s long-term performance goals and align the interests of executives with shareholders.


•	Executives should build and maintain appropriate levels of Company stock ownership, so their interests continue to be aligned with the Company’s shareholders.


•	Compensation levels should be sufficient to attract and retain highly qualified employees.

To do so, we provide:



Base Salary		A base salary is established for each position, based upon competitive benchmarking and an understanding of each individual’s responsibilities and experience.
Short-Term Incentive Compensation		An annual cash incentive. For 2018, 70% of the incentive is determined by a formula based on pre-tax income of the Company as a whole as well as the executive’s individual business unit, where relevant. The remaining 30% is awarded at the discretion of the CEO (or the Committee in the case of the CEO's own award) based on individual contributions. The pool available for the CEO’s discretionary awards is determined by a formula also based on pre-tax income.
Long-Term Incentive Compensation:
	Restricted Share Awards ("RSAs")	Grants of common stock subject to vesting over a multi-year period. In 2018, fifty percent (50%) of the value of the Long-Term Incentive equity grant was in the form of RSAs.
	Performance Share Units ("PSUs")	Grants of units convertible to common stock upon performance criteria being met over a three-year period. In 2018, fifty percent (50%) of the value of the Long-Term Incentive equity grant was in the form of PSUs. Within the grant value tied to PSUs, fifty percent (50%) will vest based on cumulative EPS criteria and fifty percent (50%) will vest based on relative Total Shareholder Return ("rTSR") over the 2018-2020 performance period. The details of the rTSR criteria are described in the Performance Share Units section below.

NEO compensation is designed to maintain a strong link between pay and performance, with both short and long-term incentives. The majority of our NEO compensation will vary based on performance. In 2018, 76% of CEO compensation and 59% of all other NEO's compensation is designed to vary with Company and, where relevant, business unit performance.

Mix of Target Compensation

2018 Financial Performance Highlights

The Company's results in 2018 are highlighted below.


•	Net income of $41.5 million for 2018 or $1.46 per diluted share ⁽¹⁾ and adjusted net income of $46.4 million or $1.63 per diluted share.


•	Grain Group recorded pretax income of $26.7 million, as Base Grain results rose on improved merchandising income even as wheat spreads narrowed, along with strong earnings from affiliates.


•	Ethanol Group earned $22.1 million of pretax income from good marketing decisions and highly efficient production.


•	Plant Nutrient Group reported pretax income of $12.0 million, as all product lines except specialty nutrients recorded better year-over-year results, along with reduced operating expenses.


•	Rail Group reported $17.4 million of pretax income from lower lease income on higher interest expense despite better utilization.

⁽¹⁾ The pre-tax income number used to determine compensation amounts was adjusted to remove certain items that were not representative of ongoing operations, such as those relating to reorganization expense, acquisition costs, impairment charges and gains/losses on sales of assets.

Based on these results as well as other measures of our financial performance, NEOs were eligible for payouts under our 2018 annual incentive plan performance that varied from 45 - 82% of their individual targets, depending on business unit, and a nominal payout for the performance-based portion of our long-term incentive plans that vested in 2018. More specifically:


•	All of our NEOs who were actively employed at year end received a payout as part of his or her annual cash bonus based on company and individual performance. The President, Rail Group and President, Grain Group received payouts based on their individual and segment-specific performance with a smaller portion tied to Company performance.


•	Half of the PSUs granted in 2016 and vesting as of December 31, 2018, were tied to our 3-year cumulative EPS performance. No executive received a payout on these awards as our actual 3-year cumulative EPS of $3.13 ⁽²⁾ fell below the threshold set for these awards of $6.74.


•	Half of the PSUs granted in 2016 and vesting as of December 31, 2018, were tied to our 3-year rTSR performance. The final award of 8.7% reflects the Andersons under-performing the Russell 3000 Index by 10.26%.

⁽²⁾ Using an adjustment framework approved by the Committee, the EPS number used to determine compensation amounts was adjusted to remove certain items that were not representative of ongoing operations, such as those relating to acquisition costs, impact of tax reform, impairment charges, pension settlement charges, and gains/losses on sales of assets.

These results are further demonstrated in the graphs below.

The 76-for-performance approach to compensation. The graph displays trends in pre-tax income compared to total short-term incentives for the Company’s NEOs for each year. The Company's annual incentive program is designed to be directly responsive to changes in earnings. Over the five-year period, changes in annual incentive compensation for NEOs were appropriately aligned with changes in pre-tax income.

(1) A new CEO was selected in September 2015.

The following long-term performance and compensation graphs illustrate diluted EPS and resulting CEO equity-based compensation from Performance Share Units (PSUs) for the performance periods ending on December 31, 2016, 2017 and 2018.

Long-Term Performance Based Compensation- Cumulative EPS

(1) CEO Compensation Based on EPS reflects target and actual amounts for Michael J. Anderson, Sr. for years 2016 and 2017, as PSU vesting occurs three years after the grant date.

We establish both threshold and target levels for our incentives, and cap an individual's incentive, no matter how extraordinary the performance, at twice the target incentive. We believe our standards for threshold and target levels provide

fair and challenging goals based on historical results. For the three-year period ending in 2018, we achieved $3.13 per diluted share, adjusted for certain items, as noted above. The relationship between incentive-based pay and performance is strong as evidenced by the graphs of annual and long-term NEO compensation. See the Bonus, Performance Targets & Thresholds section below for greater detail.

Consideration of 2018 Say on Pay Advisory Vote

The Company’s executive compensation plans were approved by 93% of the shareholders in the 2018 proxy. In view of this result, we believe there is broad support by the shareholders for the overall direction, philosophy and value of our executive compensation plans. As a result, no material changes were made to the Company’s executive compensation plans in direct response to the voting results. Consistent with our recommendation, we are submitting our executive compensation plans, to an annual non-binding vote of shareholders in this proxy statement. The Company intends to continue this practice on an annual basis.

Compensation Governance Framework

In order to meet the key objectives of our executive compensation program and to mitigate risk from our compensation practices, the company has adopted a strong corporate governance framework that includes the components described below.

•

Stock Ownership Guidelines - We have established stock ownership guidelines for our executive officers with target shareholding levels expressed as multiples of base salary to further align the interests of our executives with those of our shareholders. Our Board Directors are also subject to ownership guidelines expressed as a multiple of their annual retainer. Refer to page 57 for additional information.


•	Share Retention Requirement - Company officers are required to retain at least 75% of the net shares acquired through incentive awards until their target shareholding level is achieved; thereafter, they are required to retain 25% of net shares until two times their target shareholding level is achieved. Refer to page 47 for additional information.

•

Recoupment Policy - We have adopted a policy requiring the repayment or “clawback” of excess cash or equity based compensation from each executive officer of the Company (and also the group controller of the relevant business unit) where the payments were based on the achievement of financial results that were subsequently the subject of a financial restatement (regardless of involvement in the cause of the restatement).


•	Double-Trigger Vesting - The Committee requires that all equity awards have a "double-trigger" for vesting following a change in control (i.e., awards do not automatically accelerate unless a participant also has a termination of employment). The 2019 Long-Term Incentive Compensation Plan presented in this proxy also includes a requirement for double-trigger vesting.


•	No Stock Option Re-Pricing - Neither the 2014 or 2019 Plans permit us to reprice stock options without shareholder approval or to grant stock options with an exercise price below fair market value.


•	Minimum Vesting Period - The 2019 Long-Term Incentive Compensation Plan presented in this Proxy requires a minimum one-year vesting requirement on long-term incentive grants.


•	No Excise Tax Gross-Ups - The Company does not provide tax gross-ups for excise taxes that may be imposed under IRC Section 4999 following a change-in-control or on executive benefits and perquisites during normal employment.


•	Annual Say on Pay Vote - We value the input of our shareholders and include a non-binding vote on our executive compensation policies and practices annually.

General Principles and Procedures

Committee’s Role and Responsibilities

The Committee, which is composed solely of independent directors, reviews all aspects of cash and long-term incentive compensation for executive officers and makes recommendations to the Board pursuant to a Committee charter, which is reviewed and approved by the Governance and Nominating Committee, and ratified by the full Board, annually.

The CEO and the Vice President, Human Resources make initial recommendations to the Committee and participate in Committee discussions. In the case of the CEO, compensation is determined by the Committee, without management present. The Committee then makes recommendations related to the compensation provided to all executive officers (including the CEO) to the Board of Directors for their approval.

Committee Consultants

The Committee is empowered by its charter to retain its own independent legal and compensation consultants, at the Company's expense. The Committee engaged the Semler Brossy Consulting Group to objectively review and make recommendations regarding 1) aspects of our Long-Term Incentive Compensation Plan and equity grants, and 2) Total Direct Compensation for executive officers and non-employee independent directors. Semler Brossy also supports the Committee in identifying an appropriate peer group for benchmarking executive pay levels and practices, annually providing the Committee with data on competitive pay levels for the senior executives and the design and calibration of our annual incentive plan, providing the Committee with regular updates on regulatory and governance considerations, and providing input into the Company's disclosures on executive compensation and other activities. Annually the Committee reviews the independence of Semler Brossy based on the NASDAQ listing standards and has determined that Semler Brossy is independent of management. The firm continued to provide independent advice to the Committee in 2018 regarding Committee matters.

Benchmarking

For NEOs, we compare our compensation to that of other companies on an annual basis. For 2018, compensation was benchmarked against public market data from peer company proxies as well as based on data published in annual compensation surveys.

Peer group companies are reviewed annually by the Committee based on the recommendations of Semler Brossy. Peers are selected to best reflect our mix of businesses and economics, such as revenue, market value and operating margin.

Our approach to benchmarking combines peer group data from commodities-based businesses with general industry surveys that reflect a smaller revenue scope than our actual revenue. This approach addresses the issue that our commodities-based business may overstate our true peer size, and seeks to avoid the upward compensation pressure a peer-group only approach might create.

The peer group used for NEO pay decisions in 2018 is comprised of these 18 companies:



Applied Industrial Tech	Dean Foods Co.	Pacific Ethanol, Inc.
BMC Stock Holdings, Inc.	Fresh Del Monte Produce, Inc.	Sanderson Farms, Inc.
Beacon Roofing Supply, Inc.	Flowers Foods, Inc.	Snyder's-Lance, Inc.
Cal-Maine Foods, Inc.	Green Plains, Inc.	SpartanNash Co.
CVR Energy, Inc.	Greenbrier Cos., Inc.	The Chef's Warehouse, Inc.
Darling Ingredients, Inc.	Nexeo Solutions, Inc.	United Natural Foods, Inc.

Our pay strategy is to have Total Direct Compensation (sum of base salary, short-term incentive and long-term incentive) aligned with the median of our competitive benchmark if annually established target levels for Company and business unit pre-tax income are achieved. While the Committee referenced the median of market data for each element, as well as the sum of all elements of total compensation when making pay decisions for NEOs, actual and target pay for each executive may vary from market median based on the Committee’s assessment of each individual’s skill, experience, performance and other contributions, as well as the overall business context of the Company and year-over-year changes in market pay levels, each assessed by the Committee in its judgment without any specific weightings or formulas.

Elements of Total Direct Compensation

Following is an overview of the 2018 components of Total Direct Compensation for Named Executive Officers:




		Element	Description	Objective	Delivery
Total Direct Compensation	Total Cash Compensation	Base Salary	Generally targeted at the median of market benchmarks.	Payment for day to day performance of job accountabilities. A market-based range allows for variation based on skills, experience, and performance.	Cash
		Short-term Incentive Compensation – Annual Incentive Plan	Annual incentive opportunity calculated as percentage of base salary. Short-term incentive is based primarily upon the formula as described in Bonus, Performance Targets & Thresholds below. A discretionary award may also be awarded by the CEO. At Target performance in 2018, the pool of funds available for discretionary awards is 30% of the total incentive bonus pool. Maximum incentive pool, regardless of performance, is 2 times the Target bonus.	Incentive for annual pre-tax income performance plus other non-financial objectives. Allocation of discretionary pool based on assessment of overall individual performance and achievement of individual objectives.	Cash
	Long-term Incentive (LTI) Compensation	Performance Share Units (PSUs)	Grant amount based on half of the NEO’s total LTI target opportunity. Vesting of PSUs granted in 2018 is based upon achievement of: 1) targeted cumulative diluted Earnings Per Share (EPS) over the 3-year performance period, and 2) relative Total Shareholder Return (rTSR) over the 3-year performance period. 50% of PSUs are earned based on cumulative EPS and the remaining 50% based on rTSR.	Taken together the two equally weighted performance measures used for the PSUs reward an effective balance between consistent year-over-year earnings and shareholder return expectations. The use of rTSR strengthens the link between share price growth and long-term compensation.	Conversion of units to Common Shares (if earned) at end of 3-year performance period which are then subject to Ownership & Retention Policy.
		Restricted Stock Awards (RSAs)	Grant amount based on half of the NEO's total LTI target.	Promotes retention due to the multi-year vesting period. Also creates focus on share price and alignment with shareholders.	Delivery of restricted shares at grant date. Shares have graded vesting over three years and are then subject to Share Ownership & Retention Policy.

2018 Executive Compensation Components

Base Pay

Generally, annual increases to base salary for each NEO are determined based upon the NEO’s current salary relative to competitive benchmark information, individual performance and the Company’s plan for overall wage increases. Larger salary increases may occur when promotions or new accountabilities create additional value for a position, benchmark data indicates that an adjustment is necessary to maintain market competitiveness, or based upon considerations of internal equity with other similarly situated NEOs.

For 2018, the Committee referenced the median of competitive benchmark information for considering each NEOs competitive salary positioning. The Committee considers a range of plus or minus 15% from the median of the benchmark information as a competitive target range.

Following is a table setting forth NEO annualized base salary for year-end 2018 and 2017 and the percentage change.



	YE 2018 Base Salary		YE 2017 Base Salary		% Change in Base Salary
Patrick E. Bowe	$	930,000	$	900,000	3.3	%
John J. Granato	—		430,000		N/A
Anne G. Rex	251,000		245,000		2.4	%
Brian A. Valentine	465,000		—		N/A
Joseph E. McNeely	350,000		—		N/A
Naran U. Burchinow	365,000		350,000		4.3	%
Corbett J. Jorgenson	350,000		335,000		4.5	%
Rasesh H. Shah	—		350,000		N/A

Bonus, Performance Goals

We believe that our cash bonus plan (which we call the Annual Incentive Plan or "AIP") encourages sound investment decisions, prudent asset management, and profitable Group and Company performance.

The AIP requires the setting of annual income thresholds, targets and maximum for each of the Company’s business units and for the total Company. Thresholds are levels of pre-tax income that must be achieved before any AIP payment is earned. At Threshold performance, only minimum levels of AIP payments are earned. Targets are the levels of pre-tax income at which the resulting AIP payment will equal the targeted competitive level of compensation discussed under “Benchmarking” above. Maximums are levels of pre-tax income (171% of pre-tax income Target) at which the maximum bonus amounts are earned.

Income goals for the coming year for each business unit are presented to the Committee prior to the start of the year. The Committee then makes a recommendation to the Board of Directors for its approval. All 2018 goals were determined through this process and were approved by the Board of Directors. In 2018, pre-tax income goals were aligned with current year financial plans and at target generally represent the income expectation for the business unit and the Company. The business unit pre-tax income goals plus a component for corporate expense roll up to determine the Company's annual plan for pre-tax income. Considering recent results and continuing headwinds and volatility in key businesses, the Committee believes the 2018 business plan was challenging.

The Committee retains discretion to consider adjustments to performance results to exclude the impact of unusual or extraordinary results that do not reflect the on-going business operations and to avoid unintended incentives for management to make decisions solely on the basis of achieving incentive results. The Committee uses a decision framework for consistency to consider the materiality and facts and circumstances of potential adjustments, and has discretion as to which groups and/or individuals are impacted. The pre-tax income goals impacting 2018 NEO compensation were as follows:



	Pre-Tax Income ($000s)
	Threshold		Target		Maximum
Grain	$	14,000	$	28,000	$	47,880
Ethanol	12,500		25,000		42,750
Plant Nutrient	10,500		21,000		35,910
Rail	13,000		26,000		44,460
Company	39,250		78,500		134,235

For any individual eligible for AIP incentive awards, including NEO’s, the AIP award is broken up into components: one or more non-discretionary components based upon Company or business unit pre-tax income financial performance; and a discretionary component based upon the CEO’s assessment of individual performance (in the case of the CEO, the Committee’s assessment of individual performance). If the Company, as a whole, or an individual business unit exceeds Threshold, the amount available for Company or business unit incentives will be increased proportionately. If Thresholds are not met, no Company or business unit incentives are earned for the non-discretionary portions of AIP which are based on Company or business unit performance. For 2018, NEOs who are Group Presidents earned 50% of their target incentive based on their Group's pre-tax income performance, 20% on overall Company pre-tax income performance, and 30% based on individual performance. Patrick E. Bowe, Brian A. Valentine, Anne G. Rex and Naran U. Burchinow earned 70% of their target incentive based on Company pre-tax income performance, and 30% based on an assessment of individual performance. While our expectation is that each business unit will achieve at least Threshold performance resulting in at least a minimum Company or business unit incentive, this is not always possible due to the volatility of the Company's industries.

The Committee considers and approves all NEO AIP incentives, including the discretionary portion attributed to individual performance. For 2018, the pool of dollars available to the CEO for this discretionary portion is based on a combination of business unit pre-tax income performance and the Company's pre-tax income performance. The Committee may elect to fund a minimum amount for the discretionary performance portion of AIP even when the Company or business unit has not achieved Threshold performance. While no amount of funding is assured in this circumstance, if the Committee determines that some level of award for individual performance is appropriate, it may elect to authorize funding anywhere from 0% to approximately 15% of the AIP target award.

As Group and Company pre-tax income Thresholds are exceeded, the funding of the discretionary pool increases proportionately. At Target performance the aggregate pool for discretionary awards is 30% of the total AIP cash bonus pool. The CEO bases his determination for discretionary awards on his assessment of the NEO's business unit and individual performance, unique challenges faced by such NEO's industry, as well as the size of the NEO's Company and business unit-based AIP incentive in light of the challenges and opportunities which may have impacted their ability to achieve Target income levels. The CEO has latitude in awarding discretionary awards to the executive team based on each executive's individual performance and contributions, but each discretionary award recommended by the CEO must be approved by the Committee. For 2018, the CEO recommended and the Committee approved discretionary awards for the employed NEO group, excluding the CEO, that averaged 115% of the target value for the individual performance component of AIP incentives. Discretionary factors included successful negotiation and closing of a significant acquisition.

The Committee makes the determination of the individual performance award for the CEO. For 2018, the Committee considered the following factors in awarding 100% of the discretionary target value to the CEO: implementation of robust succession planning processes; successful negotiation of a significant acquisition; capital and budget planning improvements; and improvement in year-over-year financial results.

Individual business units for the NEOs had the following results:



	Company	Rail	Ethanol	Grain	Plant Nutrient
2018	Exceeded Threshold	Exceeded Threshold	Exceeded Threshold	Exceeded Threshold	Exceeded Threshold
2017	Exceeded Threshold	Exceeded Threshold	Exceeded Threshold	Exceeded Threshold	Below Threshold
2016	Below Threshold	Exceeded Threshold	Target	Below Threshold	Below Threshold

The following table includes 2018 and 2017 AIP payouts (including both formula and discretionary components) and the percentage of total target incentive for each of the NEOs.



	AIP
	2018						2017
	Payout		Target		% of Target		Payout		Target		% of Target
Patrick E. Bowe	$	605,000	$	930,000	65	%	$	470,000	$	900,000	52	%
John J. Granato ⁽¹⁾	—		36,144		—		177,326		344,000		52	%
Anne G. Rex	100,000		141,380		71	%	76,500		138,000		55	%
Brian A. Valentine ⁽²⁾	110,000		165,680		66	%	—		—		—	%
Joseph E. McNeely ⁽³⁾	210,000		262,500		80	%	—		—		—	%
Naran U. Burchinow	190,000		273,750		69	%	135,000		245,000		55	%
Corbett J. Jorgenson	145,000		262,500		55	%	146,000		251,250		58	%
Rasesh H. Shah ⁽⁴⁾	153,000		153,000		100	%	170,000		262,500		65	%

(1) Mr. Granato's 2018 target represents a proration for his length of employment during the year.

(2) 2018 target and award are prorated for Mr. Valentine's mid-year hire. He was not employed by the Company during 2017.

(3) Mr. McNeely's 2018 payout included a contractual guarantee to reward him minimally at Target for the Rail business component of his award. He was not employed by the Company during 2017.

(4) The bonus paid to Mr. Shah was agreed to at the time of his retirement.

2018 Equity Grants

Equity was issued to our executives in 2018 under the Company’s 2014 Long-Term Incentive Compensation Plan (LTI) in the form of 50% RSAs and 50% PSUs. For all executives we target long-term compensation to be an amount on the date of

grant which, when combined with base salary and target bonus, aligns the aggregate Total Direct Compensation to a level that

we believe is within a competitive range (+/- 15%) of the median Total Direct Compensation reflected in our competitive benchmark information. For the 2018 grants, the NEOs targeted LTI value on the date of grant equaled 215% of salary for Patrick E. Bowe, 120% of salary for Mr. Valentine and averages 64% of salary for the remaining NEOs.

The methodology for determining the number of shares/units to be granted uses the Committee approved LTI dollar value for each executive officer approved by the Committee at their meeting on March 1, 2018. The actual number of shares/units granted is based on the average closing price for the month of February with a grant date of March 1. The Committee believes this methodology is objective and avoids any recalculation of granted shares due to price volatility between an estimated price and the actual grant date price. The closing price of $35.35 on the date of grant was the fair market value used for accounting expense for the RSAs and EPS PSUs. Fair value of rTSR PSUs was estimated at the date of grant using a Monte Carlo Simulation, which resulted in a valuation of $46.64 per share.

We grant annual equity awards with consistent timing aligned with the Committee's first regular meeting each year. We may also issue grants of equity-based compensation to executives who join the Company during the year, but do not generally issue equity compensation to non-executive employees outside of the annual grant.

Following are the target and maximum compensation values for the equity grants made to NEOs for both 2018 and 2017. The maximum amounts reflect a 50% allocation of target to performance-based equity granted in the form of PSUs. The maximum vesting percentage for PSUs is 200%.



	LTI					LTI
	2018 maximum			2018 target		2017 maximum		2017 target
Patrick E. Bowe	$	3,000,000		$	2,000,000	$	3,000,000	$	2,000,000
John J. Granato	—		—	—		548,250		365,500
Anne G. Rex	150,600			100,400		147,000		98,000
Brian A. Valentine ⁽¹⁾	629,000			536,000		—		—
Joseph E. McNeely	315,000			210,000		—		—
Naran U. Burchinow	328,500			219,000		315,000		210,000
Corbett J. Jorgenson	315,000			210,000		301,500		201,000
Rasesh H. Shah	315,000			210,000		315,000		210,000

(1) Reflects a prorated target for Mr. Valentine due to his mid-year hire, plus a one-time Restricted Stock Award valued at $350,000.

Restricted Share Awards (RSAs)

RSAs promote retention and alignment with shareholder interests by tying executives' compensation to Company share price. The 2018 RSAs vest in three installments - 33.3% per year starting on January 2nd following the year of grant and annually thereafter until 100% vested. Dividends on awarded RSAs are delivered in the form of additional shares as restrictions lapse equivalent to the dollar value of dividends attributable to the number of shares vesting.

Similar to the bonus plan, the CEO is granted the discretion to increase or reduce equity grants of RSA’s, subject to the approval of the Committee, based on his evaluation of an individual’s performance, business unit performance and other extenuating factors he deems appropriate. In 2018, the LTI equity grants for all NEO's approximated 100% of the LTI equity targets. The Committee approves all final equity grants.

Performance Share Units (PSUs)

PSUs deliver Company stock based on the achievement of specific financial and stock price appreciation goals. PSUs granted in 2018 have a three-year performance period and are earned based on:1) cumulative diluted Earnings Per Share (“EPS”) and 2) relative Total Shareholder Return (rTSR). The number of PSUs available for issuance at target performance is based on 50% of the NEO's targeted LTI value as described previously. The EPS and rTSR results for the performance period determine how many underlying shares are actually issued.

The PSUs granted are based 50% on cumulative EPS and 50% on rTSR. Unlike restricted stock, which requires only continued service to be earned by the executive, the PSUs are only earned when the Company delivers targeted shareholder returns or achieves EPS targets that emphasize the Company’s pay-for-performance philosophy. Dividends on awarded PSUs are delivered in the form of additional shares at the end of the performance period but only equivalent to the value of dividends on the number of shares ultimately awarded.

For EPS based PSUs, performance is measured against pre-established 3-year Threshold, Target, and Maximum levels of achievement for 3-year cumulative diluted EPS. These levels of achievement are established based on the EPS plan in effect in the year the grant is made plus a growth component ranging from 8% annually at threshold level performance to 10% annually at maximum performance for the second and third years of the performance period. We consider both the industry trends and market expectations when setting EPS objectives for vesting PSUs. The Committee reviews and approves these criteria in advance of the grant. Threshold goals are a floor, so that performance below “threshold” results in no EPS-based PSU award delivery. Threshold goals are set at a level equal to minimally acceptable performance. Under normal market conditions, there is an expectation that Threshold goals will be met more often than not. Target goals are then set at a level which would be challenging but reasonably achievable under normal market conditions. In order to achieve the maximum PSU award, exceptional EPS growth performance must be achieved over the performance period. As noted previously, however, the volatility in our core agricultural businesses over the past several years has significantly impacted our ability to achieve short-term and long-term objectives used to deliver incentive compensation. EPS for LTI grants may be adjusted for unusual or non-recurring items.

In determining EPS threshold, target, and maximum performance levels, the Committee continually considers short and long-term business goals at the time of grant. The Committee also considers related factors, including recent EPS performance, and economic and industry conditions that may impact EPS performance.

The following table displays Threshold, Target and Maximum achievement levels for the PSUs with performance periods ending over the most recent three years.



Cumulative Diluted Earnings Per Share	Threshold		Target (1)		Maximum (2)		Actual		Percent of Target PSU Value Earned
3 years ended 2018	$	6.74	$	8.77	$	9.64	$	3.13	0%
3 years ended 2017	$	9.59	$	10.55	$	11.61	$	3.14	0%
3 years ended 2016	$	9.41	$	10.82	$	11.47	$	5.46	0%

The following table displays Threshold, Target and Maximum achievement levels for the EPS-based PSUs outstanding at December 31, 2018.



Cumulative Diluted Earnings Per Share	Threshold		Target⁽¹⁾		Maximum ⁽²⁾
3 years ended 2020	$	4.55	$	6.89	$	9.73
3 years ended 2019	$	4.30	$	6.45	$	7.75


(1)	Level at which 100% of target LTI based on cumulative EPS is achieved.


(2)	Level at which 200% of target LTI based on cumulative EPS is achieved.

The Company also utilizes an rTSR measure in addition to EPS to achieve the following objectives:


•	Create direct alignment between equity-based awards and shareholder return performance relative to the market


•	Strengthen the link between share price growth and long-term compensation


•	Create an effective combination of performance measures that taken together provide an effective balance between earnings and shareholder return expectation

The comparator group selected for the rTSR metric is the Russell 3000® index. Key selection considerations included industry, revenue, median market capitalization, business model, price volatility, future growth considerations and stock price correlation. After extensive study of alternative broad-based indexes and custom peer groups, the Company believes a broad-based index such as the Russell 3000® index is the most appropriate and objective approach. Difficulties selecting and maintaining a custom performance peer group based on key selection considerations would overly complicate the use of rTSR without improving the effectiveness of linking pay to performance.

Our relative rTSR metric uses a composite out-performance design to capture the magnitude of performance relative to the index and for efficient administration and communication. This design was chosen over percentile rank designs which can over or understate relative performance. The metric also includes a negative rTSR threshold which limits the vesting of units to shares when rTSR is negative regardless of results relative to the index. The following table summarizes our rTSR plan design.



		Vested PSU Payout Percent
Goal Achievement	Company's 3-Year Annualized rTSR Relative to Comparator Group	% of Target PSUs if Company TSR is Positive	% of Target PSUs if Company TSR is Negative
Maximum	+18 percentage points or more above Target	200%	100%
Above Target	For every +1 percentage points Company TSR is above Target	100% plus 5.56% of target	100%
Target	Comparator Group's Annualized TSR	100%	100%
Below Target	For every -1 percentage points Company TSR is below Comparator Group	100% less 5% of target	100% less 5% of target
Threshold	-12 percentage points below Comparator Group	40%	40%
Below Threshold	More than -12 percentage points below Comparator Group	0%	0%

An averaging period is used to establish the starting and ending stock price and Russell 3000 index price for the 3-year performance period. The average of closing prices on trading days during the month of December immediately preceding the first January of the performance period establishes the starting point. The ending averaging period used for determining performance and the corresponding payout percentage is the average of closing prices during the last December of the 3-year performance period. Pre-established averaging periods are used to alleviate market timing and volatility concerns.

We believe the use of the equity awards described above creates long-term incentives that balance the goals of growing stock price and strong Company earnings.

The initial grant of rTSR-based PSUs occurred in 2016, and the three-year performance period ended as of December 31, 2018. Below are rTRS-based PSU performance results for the three-year period ending in 2018.



Relative TSR	Company Actual TSR 2016 - 2018	Russell 3000 Index	Difference (2)	Percent of Target PSU Value Earned
3 years ended 2018	-.6%	9.66%	10.26%	8.70%

Other Considerations

As a publicly-traded company, we are subject to Section 162(m) which limits our ability to deduct for U.S. income tax purposes compensation in excess of $1 million paid to our CEO, CFO and three other most highly compensated officers. The Tax Cuts and Jobs Act of 2017 made significant changes to Section 162(m). Beginning in 2018 the exception to the $1 million deduction limitation for commission and performance-based compensation has been eliminated. However, compensation paid pursuant to a written binding agreement in effect on November 2, 2017 that has not been materially modified thereafter is grandfathered and can continue to qualify for the performance-based compensation exemption, assuming all other Section 162(m) requirements are met. Because of the ambiguities and uncertainties as to the scope of this grandfather provision, no assurance can be given that compensation originally intended to qualify for the exemption will, in fact, be fully deductible.

The Compensation Committee considers tax deductibility to be an important, but not the sole, or primary, consideration in setting executive compensation. Because the Compensation Committee also recognizes the need to maintain flexibility to make compensation decisions that may not meet the standards of Section 162(m) when necessary to enable us to continue to attract, retain, and motivate talented executive officers, it reserves the authority to approve potentially non-deductible compensation.

Stock Ownership and Retention Policy

Our Board has adopted a stock ownership and retention policy that applies to NEOs, other officers and directors who receive equity compensation. The policy is intended to align the interests of directors and executives with the interests of the Company’s shareholders by ensuring that executives maintain significant levels of stock in the Company throughout their careers. Our policy specifies both a target ownership level expressed as a multiple of base salary (the salary multiple varies by position), as well as a percentage of additional shares which must be retained as further shares are acquired under the long-term compensation plans. Company officers are required to retain at least 75% of the net shares acquired through the plan until their guideline ownership level is achieved; thereafter, they are required to retain 25% of the future net shares which they acquire, until two times their established target ownership level is achieved.

The target ownership levels for the NEOs are as follows:



Position	Multiple of Pay
CEO	6 x Salary
CFO	3 x Salary
Group Presidents	2 x Salary
Other Corporate Officers	1 x Salary

The Stock Ownership and Retention Policy provides for a reduction in the ownership requirements for participants approaching retirement. This reduction begins at two years from retirement and drops the target ownership level by 1/3 and by another 1/3 at one year from normal retirement age. “Retirement” means, with respect to an employee participant, a termination of employment on or after the date that the participant has attained the age of sixty (60) and has had at least five (5) years of continuous employment with The Andersons, or any subsidiary.

The Company prohibits hedging activities on Company stock by its officers and directors, as well as the pledging of shares.

Compensation Recoupment Policy

In accordance with the provisions of Section 304 of the Sarbanes-Oxley Act of 2002, the CEO and CFO are required to reimburse the Company for bonuses, or other incentive-based or equity-based compensation, and profits from securities sales following certain financial restatements resulting from misconduct. We have also adopted a policy requiring the repayment or “clawback” of excess cash or equity based compensation from each executive officer of the Company (and also the group controller of the relevant business unit) where the payments were based on the achievement of financial results that were subsequently the subject of a financial restatement (regardless of involvement in the cause of the restatement).

Post-Termination Compensation/Retirement Programs

Our overall retirement philosophy is to provide plans that are competitive, cost effective and work together with Social Security and employee savings to provide meaningful retirement benefits.

We offer three separate retirement programs:


•	Retirement Savings Investment Plan (401(k))—promotes employee savings for retirement, with Company matching a portion of the savings and non-elective contributions for participants. For 2018, all NEOs are eligible for a performance-based contribution of up to 5%. The actual performance-based contribution for 2018 was 2.0%.


•	Deferred Compensation Plan (DCP)—works in conjunction with the 401(k) to provide additional elective deferral opportunities to key employees that would otherwise be limited due to statutory rules.

•

Supplemental Retirement Plan (SRP)—originally designed to work in conjunction with the Defined Benefit Pension Plan (DBPP) to restore benefits to employees that would otherwise be lost due to statutory limitations applied to the DBPP. Benefits under both the SRP and DBPP were frozen effective July 1, 2010. The accrued benefits of the DBPP were subsequently distributed in 2015 as part of the plan's termination. The SRP, a non-qualified plan, remains a frozen benefit since termination and distribution of benefits would create a significant tax burden for participants. Ms. Rex, Mr. Burchinow and Mr. Shah are the only NEO participants in this plan.

Post-Retirement Medical Benefits

We have a Retiree Health Care Plan that provides post-retirement medical benefits to all eligible full-time employees as of December 31, 2002. The Retiree Health Care Plan is not available to those individuals hired after December 31, 2002. There are no benefit differences between executives and non-executives under this plan. Ms. Rex and Mr. Shah are the only NEO participants in this plan.

During 2017, retirees age 65 or more were transitioned from our self-insured medical plan to a private exchange with a health care reimbursement account funded by the Company. The change provides retiree flexibility and improves the economics of the plan.

Employment Agreements and Severance

Patrick Bowe

Mr. Bowe's executive employment agreement is for an indefinite term, subject to termination at any time by the Company or Mr. Bowe. To compensate for the risks inherent in taking a new position, Mr. Bowe’s severance and change-in-control benefits were initially higher than those of the other senior executives of the Company for the first three years of the agreement. On November 8, 2018, those benefits reverted to the level applicable to the rest of the executive team.

For a period of twenty-four months (thirty-six months in the event of a change-in-control) following his termination of employment, Mr. Bowe is prohibited from competing against the Company, soliciting its customers or employees, and working for a competitor. Mr. Bowe has also agreed that he will not disclose the Company’s confidential information.

John Granato

Effective February 28, 2018, Mr. Granato left employment with the Company. Terms of his Change in Control and Severance Policy Participation Agreement provided for cash severance benefits in the amount of $796,452. In addition, the Committee accelerated the vesting on 5,374 RSAs to his termination date.

Other Executives

We have entered into agreements with our NEOs and certain other key employees that require us to provide compensation to them in the event of certain qualifying non-elective terminations of employment. For qualifying terminations other than in connection with a change in control of the Company, the agreements provide that the NEO's and other key employees will receive cash severance equal to their annual base salary plus target annual cash bonus. For qualifying terminations in connection with a change in control of the Company, the agreements provide that the NEO's and other key employees will receive cash severance equal to two times their annual base salary plus target annual cash bonus. Certain vesting periods under our long-term incentive (equity) plans may accelerate under certain termination and change in control situations, as more fully described below in “Termination / Change in Control Payments.” The agreements also provide for a lump sum premium subsidy for the continuation of health care benefits for the duration of the severance period. The agreements are intended to help assure continuation of management during potential change of control situations, and to assist in recruiting and retention of key executives.

In addition, the 2014 Long-term Incentive Compensation Plan does not provide for the automatic acceleration of equity awards upon a Change in Control without a qualifying termination of employment. The 2019 Long-term Incentive Plan proposed in this proxy requires double-trigger vesting (i.e. a change-in-control plus a qualifying termination) on future equity awards.

Perquisites

Other than required executive officer physicals, there are no perquisites, unusual reimbursements or non-cash rewards (other than equity).

2019 Executive Compensation Changes

Peers for Compensation Benchmarking

The Committee annually reviews the peer group companies used for compensation benchmarking. The Company's departure from the retail segment in 2017 prompted a significant revision to the peer group for 2018. The only additional revision for 2019 was the removal of Snyder's-Lance due to their acquisition. As with prior reviews, consideration was given to industry, market capitalization, operating margin and revenue. The 2019 peer group consists of the following 17 companies.



Applied Industrial Tech	Dean Foods Co.	Pacific Ethanol, Inc.
BMC Stock Holdings, Inc.	Fresh Del Monte Produce, Inc.	Sanderson Farms, Inc.
Beacon Roofing Supply, Inc.	Flowers Foods, Inc.	SpartanNash Co.
Cal-Maine Foods, Inc.	Green Plains, Inc.	The Chef's Warehouse, Inc.
CVR Energy, Inc.	Greenbrier Cos., Inc.	United Natural Foods, Inc.
Darling Ingredients, Inc.	Nexeo Solutions, Inc.

Modification to AIP Component Weighting

The Committee approved management’s proposal, endorsed by its independent compensation consultant, to increase the percentage of each executive’s AIP award from 30% based upon individual performance to 50% based upon individual performance for 2019 AIP incentives. Thus, for NEO’s who are Group Presidents, AIP will be based 50% on individual performance, 40% on Group performance, and 10% on Company performance; for other NEO’s, the percentages are 50% on individual performance and 50% on Company performance. The aggregate AIP cash bonus pools available for discretionary and non-discretionary components of AIP awards will be adjusted accordingly to reflect these new percentages. The Committee believes this change will provide flexibility for Company leadership to more meaningfully reward key performers without increasing the overall plan costs, which will continue to be funded with Company and business performance.

Modification to AIP Individual Goal Setting

In addition to an increase to the weight given to individual performance awards within AIP, management and the Committee also approved the use of The Andersons Leadership Model as a guide for development of individual performance objectives. The four components of this model are Personal Growth, Customer Focus, People Leadership and Deliver Results. Using the Leadership Model to formulate NEO and other participant performance goals will ensure alignment with annual Company objectives. Following year end, each AIP participant's performance results on goals initially set using the Leadership Model will be a key factor in determining the participant's discretionary award.

Summary Compensation Table

The table below summarizes the total compensation paid or earned by each of the NEOs for the fiscal years ended December 31, 2018, 2017 and 2016.



(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)		(i)	(j)
Name and Position (1)	Year	Salary ($)(2)	Bonus ($)(3)	Stock Awards ($)(4)	Option Awards ($)(5)	Non-Equity Incentive Plan Compensation ($)(6)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(7)		All Other Compensation ($)(8)	Total ($)
Patrick E. Bowe
Chief Executive Officer	2018	923,077	—	2,276,267	3,100	605,000	—		78,156	3,885,600
	2017	900,000	—	2,073,723	1,872	470,000	—		69,773	3,515,368
	2016	900,000	—	2,033,783	—	110,000	—		872,547	3,916,330
John J. Granato
Chief Financial Officer	2018	109,286	—	—	—	—	—		823,759	933,045
	2017	427,308	—	378,989	—	177,326	—		42,541	1,026,164
	2016	403,846	—	363,027	—	46,000	—		24,310	837,183
Anne G. Rex
Vice President, Corporate Controller	2018	249,615	—	114,329	—	100,000	(465	)	67,012	530,491
Brian A. Valentine
Senior Vice President, Chief Financial Officer	2018	157,385	—	588,542	—	110,000	—		203,793	1,059,720
Joseph E. McNeely
President, Rail Group	2018	337,885	—	239,077	3,100	210,000	—		153,155	943,217
Naran U. Burchinow
Senior Vice President, General Counsel & Corporate Secretary	2018	361,539	—	249,307	—	190,000	(6,121	)	19,099	813,824
	2017	343,269	—	217,777	—	135,000	(1,952	)	32,894	726,988
	2016	322,039	—	195,009	—	30,000	2,632		12,895	562,575
Corbett J. Jorgenson
President, Grain Group	2018	346,539	—	239,077	—	145,000	—		28,070	758,686
	2017	332,308	—	208,368	—	146,000	—		19,198	705,874
	2016	287,500	—	609,177	—	40,000	—		390,851	1,327,528
Rasesh H. Shah
Senior Director - Rail	2018	253,018	—	239,077	—	153,000	(159,264	)	115,494	601,325
	2017	350,000	—	217,777	1,872	170,000	(30,131	)	45,398	754,916
	2016	334,923	—	213,547	3,284	182,000	44,466		13,041	791,261


(1)	NEOs include the CEO and CFO who certify the quarterly and annual reports we file with the SEC. The remaining NEOs are the three next highest paid executive officers. Additionally, for 2018 Rasesh H. Shah is an NEO, as he would have been in the top five most highly compensated had he been an officer at December 31, 2018.

(2)

Salary for Patrick E. Bowe, Joseph E. McNeely and Naran U. Burchinow includes voluntary deductions for the Company’s qualified Section 423 employee share purchase plan (“ESPP”) which is available to all employees. Amounts withheld for Mr. Bowe for 2018 and 2017 were $23,591 and $17,040, respectively. Amount withheld for Mr. McNeely for 2018 was $23,688. Amounts withheld for Mr. Shah for 2017 and 2016 were $17,030 and $24,000, respectively.


(3)	Annual bonus is delivered through a formula-based incentive compensation program and included in column (g).

(4)

Represents the grant date fair value of PSUs granted March 1, 2016, March 2, 2017 and March 1, 2018 and RSAs granted March 1, 2016, March 2, 2017 and March 1, 2018, computed in accordance with the assumptions as noted in Note 17 to the Company’s audited financial statements included in Form 10-K, Item 8. Amounts for Brian A. Valentine represent the grant date fair value of PSUs and RSAs granted on August 1, 2018 upon his hiring. At each grant date, we expected to issue the target award under the PSU grants which is equal to 50% of the maximum award.


(5)	Represents the fair value of the option component in the ESPP. The grant date fair value of the ESPP option was computed in accordance with the assumptions as noted in Note 17 to the Company’s audited financial statements included in the 2018 Form 10-K, Item 8.

(6)

Represents the annual AIP payout earned for each NEO as previously described. Approximately 70% of the award is based on specific results of the NEO’s formula program with the remainder of the award representing a portion of the Company “discretionary” pool which is also created through a formula. Overall awards (individual formula plus awards from the discretionary pool) are approved by the Committee.

(7)

Represents the annual change in the NEO’s accumulated benefit obligation. Defined benefit plans included the Defined Benefit Pension Plan and Supplemental Retirement Plan in 2015. Only the Supplemental Retirement Plan is included here, as the Defined Benefit Pension Plan was terminated in 2015. See Note 7 to the Company’s audited financial statements included in Form 10-K, Item 8 for information about assumptions used in the computation of the defined benefit plans. The deferred compensation plan is a voluntary plan allowing for deferral of compensation for officers and highly compensated employees in excess of the limits imposed by the Internal Revenue Service under the Company’s 401(k) plan. Earnings on the deferred compensation are based on actual earnings on mutual funds held in a Rabbi trust owned by the Company and do not include any above market returns.

(8)

Represents the Company-match, performance contribution and transition benefit contributed to defined contribution plans (401(k) and Deferred Compensation Plan) on behalf of the named executive, life insurance premiums paid by the Company for each of the named executives, the cost of required executive physicals paid by the Company, service awards, and restricted share dividends. The transition benefit commenced at July 1, 2010 for non-retail employees concurrent with the freeze of the defined benefit pension plan. Amounts for Patrick E. Bowe, Brian A. Valentine and Joseph E. McNeely also include reimbursement of moving and relocation expenses. Amounts for Rasesh H. Shah and John J. Granato also include separation pay and the value of unused vacation in 2018. Amount for Anne G. Rex includes a special one-time bonus for her services as the interim chief financial officer.

Grants and Payments of Plan-Based Awards

During 2018, we issued grants and paid cash bonuses to our NEOs pursuant to the 2014 Long-Term Incentive Compensation Plan and the AIP respectively. Information with respect to each of the awards, including estimates regarding payouts during the relevant performance period under each of these programs during 2018, is set forth below.



(a)	(b)		(c)	(d)	(e)	(f)	(g)	(h)	(i)	(j)	(k)	(l)
Name	Grant Date	Date of Board Action	Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1)			Estimated Future Payouts Under Equity Incentive Plan Awards (2)			All Other Stock Awards: Number of Shares of Stock or Units (#)(3)	All Other Option Awards: Number of Securities Under- lying Options (#)	Exercise or Base Price of Option Awards ($)	Grant Date Fair Value of Stock and Option Awards ($)
Name	Grant Date	Date of Board Action	Thres-hold ($)	Target ($)	Maxi-mum ($)	Thres- hold (#)	Target (#)	Maxi- mum (#)			Exercise or Base Price of Option Awards ($)	Grant Date Fair Value of Stock and Option Awards ($)
Patrick E. Bowe	1/5/18	3/2/17							686	—	—	21,360
	3/1/18	2/22/18							29,815	—	—	1,053,960
	11/2/18	8/28/15	279,000	930,000	1,860,000	5,963	29,816	59,632	501	—	—	18,079
John J. Granato	1/5/18	3/2/17							190	—	—	5,915
	3/1/18	2/22/18	10,843	36,144	72,288	—	—	—	—	—	—	—
Anne G. Rex	1/5/18	3/2/17							53	—	—	1,648
	3/1/18	2/22/18	42,414	141,380	282,760	300	1,498	2,996	1,497	—	—	52,919
Brian A. Valentine	8/1/18	5/10/18	49,704	165,680	331,360	576	2,880	5,760	13,715	—	—	476,596
Joseph E. McNeely	3/1/18	2/22/18	78,750	262,500	525,000	626	3,132	6,264	3,131	—	—	110,681
Naran U. Burchinow	1/5/18	3/2/17							108	—	—	3,355
	3/1/18	2/22/18	82,125	273,750	547,500	653	3,266	6,532	3,265