UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant ☒            Filed by a Party other than the Registrant ☐

Check the appropriate box:

Cabot Corporation

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

Cabot Corporation

2019 Proxy Statement

The Annual Meeting of Stockholders

of Cabot Corporation will be held:

Thursday, March 7, 2019 at 4:00 p.m. ET

Cabot Corporation

Two Seaport Lane, Suite 1300

Boston, MA 02210-2019 USA

January 25, 2019

Dear Fellow Cabot Corporation Stockholders,

You are cordially invited to attend the Annual Meeting of Stockholders of Cabot Corporation, which will be held on Thursday, March 7, 2019, at 4:00 pm, Eastern Time, at the Corporate Headquarters of Cabot Corporation, Two Seaport Lane, Suite 1300, Boston, Massachusetts.

At the Annual Meeting, we will ask you to elect four members of our Board of Directors, provide your advisory approval of our executive compensation, and ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending September 30, 2019. We will also discuss any other business matters properly brought before the meeting. The attached Proxy Statement explains our voting procedures, describes the business we will conduct, and provides information about the Company that you should consider when you vote your shares.

We are using the “Notice and Access” method of providing proxy materials to you via the Internet. We are mailing to you a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of the proxy materials and 2018 Annual Report. Notice and Access provides a convenient and environmentally friendly way for you to access Cabot’s proxy materials. The Notice includes instructions on how to access our proxy statement and our 2018 Annual Report and how to vote your shares. The Notice also contains instructions on how to receive a paper copy of the proxy materials and our 2018 Annual Report, if you prefer.

Your vote is very important to us. Whether or not you plan to attend the Annual Meeting in person, we encourage you to vote promptly. You may vote by mailing a completed proxy card, by phone or the Internet.

Thank you for your continued support of Cabot Corporation.

Sincerely,

SEAN D. KEOHANE

President and

Chief Executive Officer

Notice of Annual Meeting of Stockholders

This notice and proxy statement are first being made available to stockholders on or about January 25, 2019. Our 2018 Annual Report is available at http://www.edocumentview.com/cbt.

By order of the Board of Directors,

Jane A. Bell

Secretary

Boston, Massachusetts 02210-2019

January 25, 2019

Table of Contents

About the Annual Meeting

Cabot Corporation

Two Seaport Lane, Suite 1300

Boston, Massachusetts 02210-2019

Proxy Statement

References to “the Company”, “Cabot”, “we”, “us”, and “our” in this proxy statement mean Cabot Corporation.

About the Annual Meeting

Who is soliciting my vote?

The Board of Directors of Cabot Corporation is soliciting your vote at the 2019 Annual Meeting of Stockholders (“2019 Annual Meeting” or the “meeting”).

What am I voting on?

You are voting on:

How does the Board recommend that I vote my shares?

The Board’s recommendation can be found with the description of each item in this proxy statement. In summary, the Board recommends that you vote:

Who is entitled to vote?

Only stockholders of record at the close of business on January 15, 2019 will be entitled to vote at the 2019 Annual Meeting. As of that date, there were 59,520,108 shares of our common stock outstanding. Each share of common stock is entitled to one vote. There is no cumulative voting.

The Vanguard Fiduciary Trust Company is the trustee of the Cabot Common Stock Fund and the Cabot Common ESOP Fund portions of the Cabot 401(k) Plan and is the record owner of all of those shares. The trustee is authorized to vote such shares in accordance with instructions from participants in, and the terms of, the Cabot 401(k) Plan.

Why did I receive a “Notice of Internet Availability of Proxy Materials” but no proxy materials?

We are distributing our proxy materials to certain stockholders via the Internet under the “Notice and Access” approach permitted by rules of the Securities and Exchange Commission (“SEC”). This approach benefits the environment, while

CABOT CORPORATION    1

About the Annual Meeting (continued)

providing a timely and convenient method of accessing the materials and voting. On January 25, 2019, we will begin mailing a “Notice of Internet Availability of Proxy Materials” (the “Notice”) to participating stockholders. The Notice includes instructions on how to access our proxy statement and our 2018 Annual Report and how to vote your shares. The Notice also contains instructions on how to receive a paper copy of the proxy materials and our 2018 Annual Report, if you prefer.

How many votes must be present to hold the meeting?

Your shares are counted as present at the 2019 Annual Meeting if you attend the meeting and vote in person or if you properly return a proxy by Internet, telephone or mail. In order for us to hold our meeting, holders of a majority of our outstanding shares of common stock as of January 15, 2019 must be present in person or by proxy at the meeting. This majority is referred to as a quorum. Proxy cards or broker voting instruction forms that reflect abstentions and broker non-votes will be counted as shares present to determine whether a quorum exists to hold the 2019 Annual Meeting.

What is a broker non-vote?

Under the rules that govern brokers who have record ownership of shares that they hold in “street name” for their clients who are the beneficial owners of the shares, brokers normally have discretion to vote such shares on routine matters, such as ratifications of independent registered public accounting firms, but not on non-routine matters. Broker non-votes generally occur when the beneficial owner of shares held by a broker does not give the broker voting instructions on a non-routine matter for which the broker lacks discretionary authority to vote the shares. Proposals 1 and 2 are non-routine matters.

Therefore, if your shares are held in “street name” and you do not provide instructions as to how your shares are to be voted on proposals 1 and 2, your broker will not be able to vote your shares on these proposals. We urge you to provide instructions to your broker so that your votes may be counted on these important matters.

How are votes counted? How many votes are needed to approve each of the proposals?

For each of proposals 1, 2 and 3, you may vote “FOR”, “AGAINST”, or “ABSTAIN”.

What if there are more votes “AGAINST” a nominee for director than votes “FOR”?

Each of the nominees is an incumbent director who has tendered a conditional resignation that is effective upon (i) the failure to receive a majority of the votes cast for his or her re-election at the 2019 Annual Meeting and (ii) the Board’s acceptance of this resignation. The Governance and Nominating Committee of the Board of Directors (the “Governance Committee”) is responsible for initially considering the resignation and making a recommendation to the Board of Directors. The director whose resignation is under consideration is expected to abstain from participating in any decision regarding his or her resignation. The Governance Committee may consider any factors it deems relevant in deciding whether to accept a director’s resignation. If the resignation is not accepted, the director will continue to serve until his or her successor is elected and qualified.

2    CABOT CORPORATION

About the Annual Meeting (continued)

How do I vote?

You can vote either in person at the meeting or by proxy without attending the meeting. Even if you plan to attend the 2019 Annual Meeting, we encourage you to vote your shares by proxy. If your shares are held in “street name” in a brokerage account or by a bank or other nominee and you wish to vote in person at the meeting, you must request a legal proxy from your bank, broker or other nominee and bring that proxy to the meeting. Stockholders who own shares in their own name (a record owner), have three options for submitting their votes by proxy:

Proxies submitted by the Internet or telephone must be received by 1:00 p.m., Eastern Time, on March 7, 2019.

If your Cabot stock is held in a brokerage account or by a bank or other nominee, your ability to vote by telephone or over the Internet depends on your broker’s, bank’s or nominee’s voting process. Please follow the directions on your voting instruction form carefully.

How do I vote if I hold my stock through the Cabot 401(k) plan?

If you hold your stock through the Cabot 401(k) plan, you have the right to instruct the trustee of the plan how to vote your shares. The trustee will have the voting instructions of each participant in the plan tabulated and will vote the shares of the participants by submitting a final proxy card representing the plan’s shares for inclusion in the tally at the 2019 Annual Meeting.

Your vote will influence how the trustee of the plan votes those shares for which no instructions are received from other plan participants as those shares will be voted in the same proportion as shares for which instructions are received. If you hold shares in the plan and do not vote, the plan trustee will vote your shares (along with all other shares in the plan for which instructions are not provided) in the same proportion as those shares for which instructions are received from other participants in the plan.

In order for your instructions to be followed, you must provide instructions for the shares you hold through the Cabot 401(k) plan by returning your completed and signed proxy card to the Company’s transfer agent by March 4, 2019 or by voting over the telephone or the Internet by 9:00 a.m., Eastern Time, on March 5, 2019.

Can I change or revoke my vote?

Yes. You can change or revoke your vote by (1) re-voting by telephone or by Internet as instructed above (only your latest telephone or Internet vote will be counted), (2) signing and dating a new proxy card or voting instruction form and submitting it as instructed above (only your latest proxy card or voting instruction form will be counted), or (3) attending the meeting and voting in person. If your shares are registered in your name, you may also revoke your vote by delivering timely notice to the Secretary, Cabot Corporation, Two Seaport Lane, Suite 1300, Boston, Massachusetts 02210. Attending the meeting in person will not in and of itself revoke a previously submitted proxy unless you specifically request it. If you hold shares through a bank or broker, you must follow the instructions on your voting instruction form to revoke or change any prior voting instructions.

Who counts the votes?

We have hired Computershare Trust Company, N.A., our transfer agent, to count the votes represented by proxies cast by ballot, telephone and the Internet. A representative of Computershare and either Cabot’s Secretary or Assistant Secretary will act as Inspectors of Election.

CABOT CORPORATION    3

About the Annual Meeting (continued)

What if I return my proxy card but don’t vote for some of the matters listed?

If you return a signed proxy card without indicating your vote, your shares will be voted in line with the recommendation of the Board of Directors for each of the proposals for which you did not indicate a vote.

Can other matters be decided at the 2019 Annual Meeting?

We are not aware of any other matters that will be considered at the 2019 Annual Meeting. If any other matters properly arise that require a vote, the named proxies will vote in accordance with their best judgment.

Who can attend the meeting?

The 2019 Annual Meeting is open to all Cabot stockholders. If you need directions to the meeting, please call Cabot’s Investor Relations Group at (617) 342-6255. When you arrive at Cabot’s Corporate Headquarters, please go to the 13th Floor and signs will direct you to the meeting room. You need not attend the 2019 Annual Meeting to vote.

Important Notice Regarding the Availability of Proxy Materials for the 2019 Annual Meeting

This proxy statement and our 2018 Annual Report on Form 10-K are available at the following Internet address: http://www.edocumentview.com/cbt.

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Governance

Proposal 1 — Election of Directors

Board of Directors

Our Board of Directors currently has twelve members and is divided into three classes serving staggered three-year terms. Directors for each class are elected at the annual meeting of stockholders held in the year in which the term for their class expires. Four directors are proposed to be elected at the 2019 Annual Meeting. The terms of Michael M. Morrow, Sue H. Rataj, Frank A. Wilson and Matthias L. Wolfgruber expire at the 2019 Annual Meeting and our Board of Directors has nominated each of them for a three-year term that will expire at the annual meeting in 2022. All of them are current directors and, with the exception of Mr. Wilson, have been elected by stockholders at previous annual meetings.

John K. McGillicuddy, whose term of office expires at the 2021 Annual Meeting, has decided to retire from the Board effective at the 2019 Annual Meeting. Upon the election of the nominated directors, and with Mr. McGillicuddy’s retirement, Cabot’s Board of Directors will have eleven members. We expect that all of the nominees will be available for election, but if any of the nominees is not available at the time of the 2019 Annual Meeting, proxies received will be voted for substitute nominees to be designated by the Board of Directors or, if no substitute nominees are identified by the Board, proxies will be voted for a lesser number of nominees. In no event will the proxies be voted for more than four nominees.

Vote Required

A nominee will be elected to the Board of Directors if the votes properly cast “for” his or her election exceed the votes properly cast “against” such nominee’s election.

Recommendation

The Board of Directors recommends that you vote “FOR” the election of its four nominees.

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Proposal 1 — Election of Directors (continued)

Certain Information Regarding Directors

In addition to the information presented below regarding the specific experience, qualifications, attributes and skills that qualify the nominees and the directors whose terms of office will continue after the 2019 Annual Meeting to serve as a director of the Company, all the nominees and directors have a reputation for honesty, integrity, sound judgment and adherence to high ethical standards. Each of the nominees and directors has demonstrated the willingness and ability to make the significant commitment of time and energy to serve on our Board and its Committees, and to engage management and each other openly and constructively.

6    CABOT CORPORATION

Proposal 1 — Election of Directors (continued)

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Proposal 1 — Election of Directors (continued)

8    CABOT CORPORATION

Proposal 1 — Election of Directors (continued)

CABOT CORPORATION    9

Proposal 1 — Election of Directors (continued)

10    CABOT CORPORATION

Proposal 1 — Election of Directors (continued)

CABOT CORPORATION    11

Board Governance and Composition

Corporate Governance Guidelines

Our Board of Directors has adopted Corporate Governance Guidelines that address director qualifications and independence, Board Committees, director compensation, Board performance evaluations, Board and Committee meetings, access to senior management, and Chief Executive Officer (“CEO”) performance evaluation and succession planning, among other matters. Many of the Board’s practices and policies set out in these Guidelines are described in this discussion of Board Governance and Composition. The Corporate Governance Guidelines are posted on our website (www.cabotcorp.com) under the heading “Company — About Cabot — Governance — Resources.”

Board Composition

The Governance Committee is charged with reviewing the composition of the Board and refreshing it as appropriate to ensure the Board as a whole reflects a range of talents, skills, diversity and expertise needed to meet the evolving needs of our businesses and to oversee the execution of our strategy.

Important Factors in Assessing Director Qualifications

Director Qualifications. The Governance Committee strives to maintain an engaged, independent board with broad and diverse experience and judgment that is committed to representing the interests of our stockholders. Board candidates as well as nominees for re-election are evaluated in the context of the current composition of the Board of Directors and in relation to the Board’s current and anticipated requirements. We expect our directors and any candidate or nominee to have integrity and to demonstrate high ethical standards. The Committee considers a wide range of factors when recruiting, selecting and nominating director candidates, including:

Ensuring an experienced, qualified Board with expertise in areas relevant to Cabot. The Committee seeks directors who have held significant leadership positions and can bring to the Board specific types of experience relevant to Cabot. It is the Board’s policy that the Board as a whole reflect a range of talents, skills and expertise, particularly in these areas:

Enhancing the Board’s diversity of background. As a global company, we consider diversity an essential element of our culture. At the Board level and throughout our company we value the benefits we receive from different perspectives and strive for a talented and diverse workforce and a diverse Board that is representative of our global business, customers, employees and stockholders. In evaluating the suitability of individual Board nominees, the Governance Committee takes into account many factors, including general understanding of the disciplines relevant to the success of

12    CABOT CORPORATION

Board Composition (continued)

a publicly traded company with global manufacturing operations in today’s business environment, professional experience, background, education, skill, age, race, gender and national origin. Although the Board does not have a formal written policy that solely addresses diversity, our Corporate Governance Guidelines prioritize diversity of origin, gender, background, experience and thought as important director selection criteria. The Committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.

Individual Attributes. The Board believes that to function effectively, all directors should demonstrate sound judgment, compassion, a willingness and ability to work with other members of the Board openly and constructively and the ability to communicate clearly and persuasively, and be able to dedicate the time sufficient to ensure the diligent performance of their duties on our behalf.

Complying with the Board’s independence guidelines. When selecting and recruiting candidates, the Board looks at other positions the candidate has held or holds, including other board memberships, to determine whether any material relationship with Cabot exists that could impair the candidate’s independence.

Candidate Recommendations. We identify candidates for election to the Board of Directors through the business networks of the directors and management and from recommendations made by third-party search firms upon the request of the Governance Committee. Over the past year, the Committee retained a search firm to help identify potential candidates. We evaluate candidates recommended by our stockholders in the same manner and on the same basis as candidates recommended by our directors, management or third-party search firms. Mr. Wilson was initially identified as a candidate for election to the Board by a third-party search firm, and upon the recommendation of the Governance Committee, the Board elected Mr. Wilson a director effective September 2018.

Board Refreshment. A number of changes have occurred in our Company’s Board of Directors over the past several years as part of our continuing efforts to ensure that our Board has the right skills and tenures to best oversee management and the execution of our strategy and the associated risks. Our Board does not have a mandatory retirement policy. With respect to director tenure, the Board is of the view that a mix of tenures that takes into consideration appropriate levels of continuity, institutional memory and fresh perspectives is critical in achieving and maintaining a high-performing board.

Since the beginning of 2017, Michael Morrow, Cynthia Arnold and Frank Wilson have all joined our Board. Messrs. Morrow and Wilson bring substantial expertise in accounting, finance, strategic planning, business development and corporate governance, among other skills. Dr. Arnold brings a depth of experience in technology and innovation in the chemical industry, and broad knowledge of the value chains in which we operate. In addition, Dr. Thomas and Mr. MacLeod retired from our Board, each after many years of service, and, as noted above, Mr. McGillicuddy will be retiring from the Board at the 2019 Annual Meeting. Further, with respect to Board leadership succession, after leading the Board as non-Executive Chair for a number of years, Mr. O’Brien stepped down from this position and Ms. Rataj assumed this leadership role in March 2018. The Board will continue to proactively manage its composition and make-up to ensure it has the appropriate mix of tenures and the requisite skills to address the Company’s current and future needs.

How we Assess Director Independence

The Board’s Guidelines. It is the Board’s policy that at least the majority of the Board’s members must be independent under our Corporate Governance Guidelines. The Governance Committee annually reviews the independence of all directors and reports its findings to the full Board. All our directors are “independent” under the Board’s director independence standards, other than Mr. Keohane, our President and CEO, and Mr. Prevost, our former President and CEO. For a director to be considered independent, the Board must determine that he or she does not have any material relationship with Cabot. The Board’s guidelines for director independence are consistent with the independence requirements in the New York Stock Exchange’s listing standards. In addition to applying these guidelines, the Board evaluates all relevant facts and circumstances in making an independence determination. In assessing director independence, the Board considers all known relationships, transactions and arrangements among directors, their family members, and Cabot. In evaluating Dr. Arnold’s independence, the Governance Committee considered that she had performed a short-term consulting assignment for the Company in 2017, prior to becoming a director, for which she received compensation from the Company of less than $10,000 but has no on-going relationship to provide any additional services. The Board concluded that neither Dr. Arnold nor any of the non-management directors who served as directors during the 2018 fiscal year, other than Mr. Prevost, had a material relationship with Cabot.

CABOT CORPORATION    13

Board Composition (continued)

Our Leadership Structure — Non-Executive Chair of the Board; Executive Sessions

The Board elected Sue H. Rataj as Non-Executive Chair of the Board of Directors, effective March 9, 2018.

Although our Corporate Governance Guidelines do not require that our Chair and Chief Executive Officer positions be separate, our Board believes that this leadership structure is appropriate at this time because it allows our Chief Executive Officer to focus on the strategic and operational aspects of our business, while allowing the Non-Executive Chair of the Board to provide independent leadership for the Board. Our Board recognizes that future circumstances may lead it to change the leadership structure depending on Cabot’s needs at the time and, as such, believes that it is important to retain flexibility. In the future, if the Chief Executive Officer also serves as Chair of the Board, our Corporate Governance Guidelines require that an independent director be appointed annually as lead director to set the agenda for and lead the executive sessions of the non-management directors at Board meetings and to undertake such other responsibilities as the independent Directors designate.

Key Responsibilities. Our Non-Executive Chair of the Board focuses on the Board’s processes and ensuring it is prioritizing the right matters. Specifically, the Chair has the following responsibilities, and may perform other functions at the Board’s request:

How our Board Operates

Our Board of Directors has six scheduled Board meetings to review and discuss Cabot’s performance and prospects as well as the issues we face, with calls and communications between meetings as appropriate. The Board interacts directly with senior management during its meetings. The Board typically dedicates one meeting a year to a discussion of longer-term strategic issues the Company faces. During fiscal 2018, the Board met seven times and acted by written consent once.

A significant portion of the Board’s oversight responsibility is carried out through its four operating committees.

Committee Composition. All of the members of our Audit Committee, Governance and Nominating Committee and Compensation Committee satisfy the NYSE’s definition of an independent director.

Committee Operations. Each Committee meets periodically throughout the year, reports its actions to the Board, receives reports from senior management, annually evaluates its performance and can retain outside advisors. Each Committee’s meeting materials are available for review by all directors.

Committee Responsibilities. The primary responsibilities of each Committee are listed below. For more detail about the responsibilities and functions of each Committee, see the Committee charters on our website (www.cabotcorp.com) under the heading “Company — About Cabot — Governance — Resources.”

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Board Composition (continued)

Audit Committee

Members

10 meetings and 1 action by written consent in fiscal 2018

Financial Acumen. Mr. McGillicuddy, Mr. Morrow and Mr. Wilson are “audit committee financial experts” under SEC rules and each of these directors as well as Mr. Enriquez are “financially literate” under NYSE rules.

Primary Responsibilities

The Audit Committee assists the Board of Directors in its oversight of (i) the integrity of Cabot’s financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm’s qualifications and independence, (iv) the performance of our internal audit function and (v) our risk assessment and risk management processes. The Audit Committee, among other functions:

During fiscal 2018, the Committee’s other priorities included treasury matters, including cash and debt management, financial process improvement initiatives, tax matters and information technology matters. The Committee also focused on cyber-security risk.

Compensation Committee

Members

6 meetings and 3 actions by written consent in fiscal 2018

Primary Responsibilities

The primary responsibilities of the Compensation Committee are to:

CABOT CORPORATION    15

Board Composition (continued)

Important items for fiscal 2018 included establishing the compensation arrangements for the newly appointed members of the Company’s Management Executive Committee and retaining a new independent executive compensation consultant to assist the Committee.

Governance Committee

Members

4 meetings in fiscal 2018

Primary Responsibilities

The Governance Committee is charged primarily with:

During fiscal 2018, the Governance Committee focused on Board composition and refreshment, enhancing our Board evaluation process and the scope of responsibility of the Board’s Safety, Health, Environment & Sustainability Committee.

Safety, Health, Environment & Sustainability (“SHE&S”) Committee

Members

4 meetings in fiscal 2018

Primary Responsibilities

The SHE&S Committee reviews aspects of Cabot’s safety, health, environmental and sustainability performance, process safety, security, product stewardship, community engagement and governmental affairs. In particular, the Committee reviews the following:

During fiscal 2018, the Committee focused on the Company’s safety improvement plans, chemical risks and hazard assessments program, sustainability program and reporting, product safety and toxicology matters, and environmental remediation activities.

16    CABOT CORPORATION

Board Composition (continued)

Executive Committee

Members

Did not meet or act in fiscal 2018

Primary Responsibilities

The Executive Committee reviews and, where appropriate, approves corporate action with respect to the conduct of our business between Board of Directors’ meetings. Actions taken by the Executive Committee are reported to the Board at its next meeting.

How We Evaluate the Board’s Effectiveness

Annual Evaluation Process. Each year, the Governance Committee leads our Board’s annual evaluation process. The process focuses on the effectiveness of the Board as a whole, prioritizing issues, and identifying specific issues for future discussion. In 2017, we refreshed our approach to the Board’s evaluation process, and since then, it has included individual interviews with each director conducted by our General Counsel. The conversations are guided by a series of questions provided to the directors in advance covering Board and Committee membership, operations and responsibilities, as well as open-ended questions so that each director has leeway to discuss the issues he or she believes to be the most pertinent. The key themes, observations and suggestions are summarized and discussed first with the Governance Committee and later with the full Board. Based on these discussions, opportunities to further enhance the Board’s effectiveness have been and are being implemented. In addition, we refreshed our process around individual director assessments. Our Non-Executive Chair conducted one-on-one discussions with each director to seek feedback on individual director performance.

Our Board’s Role in Risk Oversight

Our Board oversees our enterprise-wide program of risk management. Cabot management is primarily responsible for day-to-day risk management practices and, together with other personnel, regularly engages in an enterprise-wide risk assessment. This assessment is updated on a continual basis and includes a comprehensive review of a broad range of risks, including financial, operational, business, legal, regulatory, reputational, governance and managerial risks which may potentially affect the Company. From this assessment, the most significant risks in terms of their likelihood and severity are identified, and plans to manage and mitigate these risks are developed. Cabot management regularly reports to either the full Board or the relevant Committee of the Board our major risk exposures, their potential operational or financial impact on Cabot, and the steps we take to manage them.

Our Board has ultimate responsibility for risk oversight and oversees our corporate strategy, business development, capital structure, market exposure and country specific risks. Each Committee also has responsibility for risk oversight. The Audit Committee focuses on financial risk, including internal controls and legal and compliance risks and receives regular reports from our independent registered public accounting firm, our Director of Internal Audit and our General Counsel. The Audit Committee also oversees the Company’s enterprise risk management processes and cybersecurity program. The SHE&S Committee assists the Board in fulfilling its oversight responsibility by reviewing the effectiveness of our safety, health, environment and sustainability programs and initiatives and overseeing matters related to stewardship and sustainability of our products and manufacturing processes. The Compensation Committee considers human resources risks and evaluates and sets compensation programs that encourage decision-making predicated upon a level of risk consistent with our business strategy. The Compensation Committee also oversees senior management succession planning and development. Finally, the Governance Committee considers governance and Board succession risks, and evaluates director skills and qualifications to ensure each Committee has directors with the requisite skills to oversee the applicable risks that are the focus of that Committee. The Company has a robust risk management program, the strength of which is not dependent on the Board’s leadership structure.

CABOT CORPORATION    17

Board Composition (continued)

Our Compensation Discussion and Analysis (“CD&A”) describes our compensation policies, programs and practices for our named executive officers. Our corporate goal-setting, assessment and compensation decision-making processes described in our CD&A apply to all participants in our corporate short- and long-term incentive programs.

Participants in our long-term incentive program receive awards consisting of time-based restricted stock units and performance-based restricted stock units, and, in the case of members of the Management Executive Committee and a limited number of other participants, stock options. Beyond our corporate short- and long-term incentive programs, a substantial number of our facilities offer an annual cash incentive plan.

The Compensation Committee directed management, working with the Committee’s independent consultant, Meridian Compensation Partners, to provide an evaluation on the design of all of our incentive plans to assess whether any portion of our incentive compensation programs encourages excessive risk taking. That assessment is presented to and reviewed by the Compensation Committee. Among the program features evaluated are the types of compensation offered, performance metrics, the alignment between performance goals, payout curves and the Company’s business strategy, and the overall mix of incentive awards. The Company’s compensation programs are designed with features that mitigate risk without diminishing the incentive nature of the compensation. Specific features of the programs to mitigate risk include, as applicable, the following: caps limiting the amount that can be paid under the corporate short- and long-term incentive programs and all of the local cash incentive programs; a balanced mix of annual and longer-term incentive opportunities; a mix of cash and equity incentives; multiple performance metrics; management processes to oversee risk associated with each of our incentive programs; stock ownership guidelines for members of the Management Executive Committee; a company compensation recoupment policy; and significant controls for important business decisions. In our CD&A we describe in more detail the features of our executive compensation programs that are designed to mitigate risk, including the oversight provided by the Compensation Committee, which reviews and approves the design, goals and payouts under our corporate short- and long-term incentive programs and each executive officer’s compensation. Based on our assessment, we believe our compensation policies, programs and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.

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Other Governance Policies and Practices

Transactions with Related Persons

Policy and Procedures for the Review of Related Person Transactions

Our Board has adopted a written policy for the review and approval or ratification of transactions involving related persons. “Related persons” consist of any person who is or was (since the beginning of the fiscal year) a director, nominee for director or executive officer of Cabot, any greater than 5% stockholder of Cabot and the immediate family members of any of those persons. The Governance Committee is responsible for applying the policy with the assistance of our General Counsel.

Transactions covered by the policy consist of any transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements, or relationships in which (1) the aggregate amount involved will or may be expected to exceed $100,000 with respect to any fiscal year, (2) Cabot is a participant and (3) any related person has or will have a direct or indirect interest, other than solely as a result of being a director or a less than 10% beneficial owner of another entity (an “interested transaction”). Under the policy, the following interested transactions have a standing pre-approval from the Governance Committee, even if the aggregate amount is greater than $100,000:

Each interested transaction by a related person that does not have standing pre-approval under the policy should be reported to our General Counsel for presentation to the Governance Committee for approval before its consummation or for ratification, if necessary, after its consummation. The Chair of the Governance Committee has the authority to pre-approve or ratify (as applicable) any interested transaction with a related person in which the aggregate amount involved is expected to be less than $500,000. In determining whether to approve or ratify an interested transaction, the Governance Committee and the Chair may take into account such factors as they deem appropriate, which may include whether the interested transaction is on terms no less favorable than 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.

Transactions with Related Persons

Since the beginning of fiscal 2018, Cabot and its subsidiaries had no transactions, nor are there any currently proposed transactions in which Cabot or its subsidiaries was or is to be a participant, in which the amount involved exceeds $120,000 and any related person (as defined above) had or will have a direct or indirect material interest reportable under SEC rules.

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Other Governance Policies and Practices (continued)

Stockholder Engagement

The Company welcomes stockholder engagement. Our directors are available to answer questions from stockholders at the 2019 Annual Meeting. In addition, we conduct stockholder outreach throughout the year to ensure management and the Board understand and consider the issues that matter most to our stockholders. We provide regular updates regarding the Company’s performance and strategic actions to the investor community, and we participate in numerous investor conferences, one-on-one meetings, earnings calls, investor days, perception feedback discussions, and educational investor and analyst conversations. We also communicate with stockholders and other stakeholders through various media, including our annual report, proxy statement and other filings with the SEC, news releases and our website. We believe ongoing stockholder engagement allows us to respond effectively to stockholder concerns.

As part of our ongoing stockholder engagement efforts, we hosted an investor day in May 2018. We took the opportunity to, among other things, describe our business strategy, technology and application innovation advances, and how we are positioned for advantaged growth, showcase the talent and depth of our senior management team, and outline our long-term financial framework and capital allocation strategy.

Procedures for Stockholders to Recommend Director Nominees

The Governance Committee has a policy with respect to the submission of recommendations by stockholders of candidates for director nominees, which is available on our website. A stockholder wishing to recommend a candidate must submit the recommendation by a date not later than the 120^th calendar day before the first anniversary of the date that Cabot released its proxy statement to stockholders in connection with the previous year’s annual meeting. Recommendations should be submitted to the Company’s Secretary in writing at Cabot Corporation, Two Seaport Lane, Suite 1300, Boston, Massachusetts 02210. The notice to the Secretary should include all information about the candidate that Cabot would be required to disclose in a proxy statement in accordance with Securities and Exchange Act rules or as required by the Company’s by-laws, consent of the candidate to serve on the Board of Directors, if nominated and elected, and agreement of the candidate to complete, upon request, questionnaires customary for Cabot directors and to comply with applicable Company policies.

Director Attendance at Meetings

Board/Committee Meetings. During fiscal 2018, each director attended at least 75% of the aggregate of the total Board meetings and the total meetings held by all of the Committees on which he or she served during the periods that he or she served.

Code of Business Ethics

We have adopted a code of ethics that applies to all of our employees and directors, including the Chief Executive Officer, the Chief Financial Officer, the Controller and other senior financial officers. The Code of Business Ethics is posted on our website (www.cabotcorp.com) under the caption “Company — About Cabot — Code of Business Ethics.”

Communications with the Board

Stockholders or other interested parties wishing to communicate with the Board, the non-management directors or any individual director may contact the Non-Executive Chair of the Board by calling 1-800-853-7602; by sending an email through our website using the link that is located under the caption “Company — About Cabot — Governance — Contact the Board of Directors”; or by writing to Cabot Corporation Board of Directors, c/o Alertline Anonymous, P.O. Box 3767, 13950 Ballantyne Corporate Place, Suite 300, Charlotte, North Carolina 28277.

Anyone who has a complaint or concern regarding our accounting, internal accounting controls or auditing matters may communicate that concern to the Chair of the Audit Committee by calling 1-800-853-7602; by sending an email through our website using the link that is located under the caption “Company — About Cabot — Governance — Contact the Board of Directors”; or by writing to Cabot Corporation Audit Committee, c/o Alertline Anonymous, P.O. Box 3767, 13950 Ballantyne Corporate Place, Suite 300, Charlotte, North Carolina 28277. All such communications to the Board of Directors or the Audit Committee will also be sent to Cabot’s Office of Compliance.

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Director Compensation

Annual compensation for our non-employee directors is comprised of cash compensation and a grant of Cabot common stock. The Governance Committee is responsible for reviewing the form and amount of compensation paid to our non-employee directors and recommends changes to our Board of Directors as appropriate. The Governance Committee regularly reviews competitive market data with the assistance of Mercer LLC, a national executive compensation firm engaged by this Committee, to evaluate the reasonableness of our director compensation and the appropriate mix of cash and equity compensation. In November 2018, the Governance Committee evaluated the competitiveness of the Company’s director compensation program, which included a review of director compensation data prepared for the Governance Committee by Mercer using the same peer group of companies our Compensation Committee uses for assessing the reasonableness of our executive compensation decisions. Based on this evaluation, and upon the recommendation of the Governance Committee, our Board of Directors approved, effective January 1, 2019, an increase in the annual equity compensation component of this program and several changes to the cash compensation component of the program, each as described below. Directors who are Cabot employees do not receive compensation for their services as directors.

Cash Compensation

In 2018, cash compensation for our non-employee directors consisted of an annual retainer of $75,000, plus the following annual retainers for specific roles:

Cash compensation is paid quarterly and, when changes occur in Board or Committee membership during a quarter, the compensation is pro-rated.

Effective January 1, 2019, we (i) increased the annual retainer from $75,000 to $90,000; (ii) eliminated the separate retainer for serving on a Committee; (iii) reduced the annual retainer paid to the Chair of the Audit Committee to $20,000; (iv) increased the annual retainer paid to the Chair of the Compensation Committee to $15,000; (v) retained the $10,000 cash retainer paid to the Chairs of the Governance and SHE&S Committees; and (vi) agreed to eliminate the cash retainer paid to the Chair of the Governance Committee when the Chair of that Committee is also serving as Non-Executive Chair of the Board. No change was made in the retainer paid to our Non-Executive Chair of the Board.

Stock Compensation

Under the Cabot Corporation 2015 Directors’ Stock Compensation Plan (the “Directors’ Stock Plan”), each non-employee director is eligible to receive each calendar year shares of Cabot common stock as part of his or her compensation for services to be performed in that year. For calendar year 2018, each non-employee director whose term of office continued after the 2018 Annual Meeting of Stockholders received an award of shares having a grant date value as close as possible to $110,000 (1,636 shares). Roderick C.G. MacLeod, who retired at the 2018 Annual Meeting, received a pro-rated grant of 409 shares. The closing price of our common stock on January 12, 2018, the date such shares were granted, was $67.24. Upon her election to the Board effective January 18, 2018, Dr. Arnold received a grant of 1,654 shares as compensation for her services as a non-employee director to be performed in calendar 2018. The closing price of our common stock on January 18, 2018 was $66.51. Upon his election to the Board on September 13, 2018, Mr. Wilson received a pro-rated grant of 586 shares as compensation for his services as a non-employee director to be performed in calendar 2018. The closing price of our common stock on September 13, 2018 was $62.61.

Following the review of the competitiveness of our director compensation program, and upon the recommendation of the Governance Committee, for calendar year 2019, we increased the annual equity compensation paid to our non-employee directors to an award of shares having a grant date value as close as possible to $120,000.

As of January 15, 2019, there were 266,526 shares available for issuance under the Directors’ Stock Plan.

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Director Compensation (continued)

We believe that it is desirable for directors to have an equity interest in Cabot and we encourage all directors to own a reasonable amount of Cabot stock to align director and stockholder interests and to enhance a director’s long-term perspective. Accordingly, our Corporate Governance Guidelines require non-employee directors to have an equity ownership in Cabot of at least 10,000 shares. It is expected that this ownership level will generally be achieved within a five-year period beginning when a director is first elected to the Board. For purposes of determining a director’s compliance with this ownership requirement, any deferred shares held by a director are considered owned by the director. In addition, each non-employee director is required to retain the shares granted in any given year for a period of at least three years from the date of issuance or until the director’s earlier retirement.

Reimbursement of Certain Expenses; Charitable Giving

Our Corporate Governance Guidelines state that Cabot will not provide retirement or other benefits or perquisites to non-employee directors. Directors, however, are reimbursed for reasonable travel and out-of-pocket expenses incurred in connection with attending Board and Committee meetings and other Cabot business-related events, and are covered by Cabot’s travel accident insurance policy for such travel. In connection with the retirement of Mr. MacLeod from the Board of Directors at the 2018 Annual Meeting and in recognition for his many years of service, we made a $25,000 contribution on his behalf to a charity he selected.

Deferred Compensation

Under the Cabot Corporation Non-Employee Directors’ Deferral Plan (the “Deferred Compensation Plan”), directors can elect to defer receipt of any cash compensation payable in a calendar year for a period of at least three years or until they cease to be members of the Board of Directors. In any year, these deferred amounts are, at the director’s choice, either (i) credited with interest at a rate equal to the Moody’s Corporate Bond Rate for the month of November prior to the beginning of the applicable year or (ii) treated as invested in Cabot phantom stock units, based on the market price of shares of Cabot common stock at the time of deferral (with dividends paid on shares credited and treated as if reinvested in Cabot phantom stock units). Mr. Enriquez and Dr. Wolfgruber elected to defer receipt of their calendar year 2018 cash compensation and treat the deferred amounts as invested in Cabot phantom stock units. Messrs. Kirby and Prevost elected to defer receipt of their calendar year 2018 cash compensation and have it credited with interest at a rate equal to the Moody’s Corporate Bond Rate. The Moody’s Corporate Bond Rate used to calculate interest during calendar year 2018 was 3.88%.

Under the Deferred Compensation Plan, directors also may defer receipt of the shares of common stock issuable to them under the Directors’ Stock Plan. For each share of stock deferred, a director is credited with one Cabot phantom stock unit to a notional account created in the director’s name. Dividends that would otherwise be payable on the deferred shares accrue in the account and are credited with interest at a rate equal to the Moody’s Corporate Bond Rate for the month of November prior to the beginning of the year. The rate used to calculate interest during calendar year 2018 was 3.88%. At the end of the deferral period, the deferred shares of Cabot common stock are issued to the director, along with the accrued cash dividends and interest earned, either in one issuance or in installments over a period of up to ten years, as selected by the director. Messrs. Enriquez, Kirby, McGillicuddy, Morrow, Prevost and Wilson and Dr. Wolfgruber elected to defer their calendar year 2018 stock awards.

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Director Compensation (continued)

Director Compensation Table

The following table sets forth the compensation earned by our non-employee directors in fiscal 2018:

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Beneficial Stock Ownership of Directors, Executive Officers and Persons Owning More Than Five Percent of Common Stock

The following table shows the amount of Cabot common stock beneficially owned as of January 15, 2019 (unless otherwise indicated) by each person known by Cabot to beneficially own more than 5% of our outstanding common stock, by each director of Cabot, by each of our named executive officers and by all directors, nominees for director and executive officers of Cabot as a group. Unless otherwise indicated, each person has sole investment and voting power over the securities listed in the table.

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Beneficial Stock Ownership of Directors, Executive Officers and Persons Owning More Than Five Percent of Common Stock (continued)

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Executive Compensation

Compensation Committee Report

The Compensation Committee of the Board of Directors (referred to as the “Compensation Committee” or the “Committee”) has reviewed the Compensation Discussion and Analysis (“CD&A”) section included in this Proxy Statement. The Compensation Committee has also reviewed and discussed the CD&A with the members of management who are involved in the compensation process.

Based on these reviews and discussions, the Compensation Committee recommended to the Board of Directors that the CD&A be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended September 30, 2018.

John F. O’Brien, Chair

William C. Kirby

Mark S. Wrighton

Compensation Discussion and Analysis

As context for our named executive officers’ fiscal 2018 compensation, below we summarize Cabot’s fiscal 2018 performance and provide a brief overview of the decisions made with respect to executive compensation in fiscal 2018 and our executive compensation programs for that year. We then describe our compensation philosophy and objectives, our compensation setting process and other compensation and governance related policies, and compensation awarded, earned and paid for fiscal 2018. For fiscal 2018, our named executive officers (“NEO”s) and their current positions are:

Executive Summary

Our Performance in Fiscal 2018

Our “Advancing the Core” strategy is designed to extend our leadership in performance materials by (i) investing for growth in our core businesses, (ii) driving application innovation with our customers, and (iii) generating strong cash flows through efficiency and optimization. The aim of this strategy is to deliver sustained and attractive total shareholder return (“TSR”), built on earnings growth and a balanced capital allocation framework. This strategy is intended to ensure that we invest sufficiently in our core businesses to capture opportunities and drive long-term earnings growth while also providing our shareholders with a meaningful cash return.

During fiscal 2018, we delivered strong performance on our financial goals, and

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Executive Compensation (continued)

We also advanced a number of long-term strategic investments to extend our leadership positions and to drive sustained growth of earnings and free cash flow. Our investments for growth in our core businesses included:

We made notable progress in our efforts to drive application innovation. This is best exemplified by growth from new customer qualifications and next-generation products in our energy materials product line, and our acquisition of Applied Nanostructured Solutions.

Our efficiency and optimization achievements included:

In addition, during fiscal 2018 we made further progress in achieving our sustainability agenda. Notably, our manufacturing facility in Tianjin became the first plant in the chemical industry in China to achieve certification to the Responsible Care 14001 standard, the global standard for safety & health, environmental and security management systems established by the American Chemistry Councils Responsible Care program, by auditors from the international registrar, BSI. In addition, we received a Gold rating from EcoVadis, an independent sustainability monitoring organization, for our 2018 Sustainability Report, which is the third consecutive year that we have received a Gold rating. Further, we continued to make progress toward creating a more inclusive and diverse organization. We made marked progress in increasing diversity representation on our Management Executive Committee, hired a Director of Diversity and Inclusion and organized a Diversity and Inclusion Council.

Executive Transitions

A number of management changes took place at the Company during fiscal 2018. In May 2018, Mr. Cordeiro stepped down from his position as EVP and CFO of the Company and President, Americas Region. Ms. McLaughlin assumed financial leadership of the Company as SVP and CFO and Mr. Kalkstein become President, Americas Region. In addition, Mr. Cross stepped down from his position as EVP and President, Performance Chemicals Segment, and President, EMEA Region, effective September 30, 2018, and his responsibilities were transitioned to other senior leaders within Cabot. The compensation decisions made in connection with these changes are described later in this CD&A.

Highlights of our Fiscal Year 2018 NEO Compensation Decisions and the Impact of Company Performance on Compensation.

We believe fiscal 2018 compensation appropriately aligned named executive officers’ pay with our corporate performance, with a significant portion of the compensation paid to our named executive officers based on our performance against pre-established corporate financial goals.

Base Salary. All of our named executive officers received a base salary increase for calendar 2018 during our annual salary review process that took place in November 2017. These increases, which ranged from 2% to 6%, were made in

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Executive Compensation (continued)

recognition of the officers’ strong individual performance and leadership. In addition, Ms. McLaughlin received a base salary increase during the year in connection with her promotion and the associated increased job responsibilities she assumed, which was based on a review of market data, as further described in this CD&A. With these increases, overall, the base salaries of our named executive officers for fiscal 2018 were aligned and consistent with our compensation philosophy, which considers individual performance and leadership, scope of responsibilities, the number of years the executive has held the position, and benchmark compensation data to arrive at a market competitive base level of compensation appropriate for the individual. (See pages 39-42 for further details).

STI Awards and Payouts. The Company achieved performance above the maximum level of the adjusted earnings before interest and taxes (“EBIT”) metric and within the target range level of the net working capital (“NWC”) days metric established by the Committee under our short-term incentive (“STI”) program, resulting in a payout of the portion of the award that is based on our financial performance of 180% of target. The balance of the amounts paid in respect of STI awards to members of our Management Executive Committee, including our named executive officers, reflected their individual performance and leadership, and ranged from 0% to 160% of target. The total STI awards made to the members of our Management Executive Committee, including our named executive officers, ranged from 126% to 174% of the named executive officer’s target award. (See pages 39-42 for further details about awards and payouts made to our named executive officers).

LTI Awards and Payouts. Our long-term incentive (“LTI”) awards consist of a combination of performance-based restricted stock units (“PSUs”) (35%), time-based restricted stock units (“TSUs”) (30%) and stock options (35%) (with percentages measured based on the awards’ grant date values, assuming target level achievement of applicable performance metrics in the case of PSUs). The grant date value of the awards granted in fiscal 2018 to each named executive officer was based on an assessment of the named executive officer’s position, role and responsibilities within the Company, the overall competitiveness of his or her total direct compensation, and internal equity (the relationship of pay among the executive officers in the context of their responsibilities) considerations. In addition, as described below, Ms. McLaughlin received a supplemental LTI award in connection with her promotion to the role of Senior Vice President and Chief Financial Officer.

As described below, each PSU award is allocated evenly into three tranches, with each tranche having a separate fiscal year performance period and the entire award having a three-year vesting period. The performance metrics and goals for each performance period are established at the time of grant. Our financial performance in each fiscal year determines the percentage of the target award earned for that fiscal year performance period in three outstanding PSU awards. The percentage of the target awards earned for fiscal 2018 performance with respect to outstanding PSUs is set forth below. For each performance metric, adjusted EPS and adjusted return on net assets (“RONA”), achieving the target level of performance results in a payout of 100% of the portion of the award that is payable with respect to that metric. We believe that the PSUs earned based on our fiscal 2018 financial results properly aligned our LTI compensation with our very strong fiscal 2018 financial performance, consistent with the role of these awards in advancing our pay-for-performance philosophy.

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Executive Compensation (continued)

Characteristics of our Executive Compensation Programs

Our executive compensation programs include a number of practices intended to align the interests of management and our shareholders.

Consideration of Results of Shareholder Advisory Votes on Executive Compensation

At our 2018 Annual Meeting, we conducted an advisory (non-binding) shareholder vote on executive compensation, as required by the Dodd-Frank Act. Over 95% of the shares voted approved the executive compensation discussed and disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and other related tabular and narrative disclosures contained in our 2018 proxy statement. In considering the results of this most recent favorable advisory vote on executive compensation, the Compensation Committee determined that the Company’s executive compensation programs have been effective in implementing the Company’s stated compensation philosophy and objectives, and directly aligning compensation paid or earned with Company performance. Therefore, the Committee did not make any changes to the structure of these programs.

The Compensation Committee recognizes that executive pay practices and corporate governance principles continue to evolve. Accordingly, it will continue to monitor executive compensation practices and make adjustments as necessary to ensure that our executive compensation programs continue to support our corporate goals and objectives and reflect good corporate governance principles.

The Compensation Committee pays close attention to the advice of its compensation advisors and provides access for our shareholders who would like to communicate on executive compensation directly with the Compensation Committee or the Board. You may contact the Board of Directors through our website at “Company — About Cabot — Governance — Contact the Board of Directors”.

Compensation Philosophy, Objectives and Process

Continuing to position Cabot for future success requires the talent to support our business and Advancing the Core strategy. Our executive compensation programs are designed to provide a competitive and internally equitable compensation and benefits package that rewards individual and Company performance and reflects job complexity and the strategic value of the individual’s position while promoting long-term retention and motivation. We seek to accomplish these goals in a way that is aligned with the long-term interests of our shareholders.

To achieve these goals, our executive compensation programs follow these principles:

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Executive Compensation (continued)

Our Compensation Setting Process

The Compensation Committee

As discussed under “Board Composition — How our Board Operates — Compensation Committee”, on page 15, the Compensation Committee is responsible for all compensation decisions related to members of the Company’s Management Executive Committee, which includes all our named executive officers.

The annual compensation process for the preceding fiscal year concludes at the Committee’s meeting in November, when the Committee evaluates the Company’s performance against the corporate performance goals set for the just-concluded fiscal year and also evaluates each executive officer’s individual performance and, on this basis, determines the amounts payable or earned, as applicable, in respect of the fiscal year under our STI and LTI programs. Each November, the Compensation Committee also (i) determines any adjustments to base salaries, with any adjustment typically effective the following January, (ii) sets corporate performance metrics applicable to our STI and LTI programs for the current fiscal year, (iii) grants LTI awards, and (iv) establishes performance goals and maximum payment levels under our STI and LTI programs for the current fiscal year, in each case, for each named executive officer.

A description of the Compensation Committee’s roles and responsibilities is set forth in its written charter adopted by the Board of Directors, which can be found at www.cabotcorp.com under “Company — About Cabot — Governance — Resources.”

Role of the Compensation Consultant

The Compensation Committee retained Pearl Meyer as its independent compensation consultant for purposes of executive compensation matters from January 2006 through February 2018. Following an RFP process, the Committee terminated its consulting arrangement with Pearl Meyer and retained Meridian Compensation Partners (“Meridian”) as its independent compensation consultant for purposes of executive compensation matters commencing in March 2018. The scope of both consultants’ services to the Committee, as applicable, during fiscal 2018 was to provide the Committee with advice on a broad range of executive compensation matters, including the following:

Pearl Meyer attended all regularly scheduled meetings of the Compensation Committee through February 2018 and Meridian attended all such meetings thereafter.

The Compensation Committee has assessed the independence of Pearl Meyer and of Meridian pursuant to SEC rules and concluded that no conflict of interest exists that prevented either Pearl Meyer or Meridian from independently advising the Compensation Committee.

Role of the Chief Executive Officer and Other Officers

Each year, our CEO and our Chief Human Resources Officer (“CHRO”), working with internal resources as well as the Compensation Committee’s independent compensation consultant, review the design of our executive compensation

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Executive Compensation (continued)

programs and recommend modifications to existing, and/or the adoption of new, plans and programs to the Compensation Committee. In addition, our CEO recommends to the Committee the performance metrics and goals to be used to determine payouts under our STI and LTI programs, and each named executive officer’s individual performance goals (other than the CEO’s) are jointly developed by the executive and the CEO.

Before the Compensation Committee makes compensation decisions regarding the compensation of our named executive officers, the CEO provides his assessment of each named executive officer’s performance, other than his own, addressing such factors as the officer’s achievement of individual goals, leadership accomplishments, contribution to Cabot’s performance and the achievement of Company goals, and areas of strength and areas for development. He then makes specific award recommendations. In preparing compensation recommendations for the Committee, our CEO, our CHRO and other members of management involved in the process review compensation and survey data compiled by the Committee’s independent compensation consultant for similarly-situated executives at our peer group of companies and external competitive market data provided by such consultant, as described below. Our CEO attends Compensation Committee meetings but is not present for, and does not participate in, any discussions concerning his own compensation. All decisions relating to the compensation of our named executive officers are made solely by the Committee and are reported to the full Board of Directors.

Use of Benchmarking Comparison Data

The companies we have included in our compensation peer group consist of companies in the diversified chemicals or specialty chemicals industries with similar products and services and with revenues and a market capitalization generally between one-third and three times the Company’s revenue and market capitalization. The Compensation Committee reviews executive compensation data for executives with comparable positions at these peer group companies to gauge the reasonableness of its executive compensation decisions and the competitiveness of our executive compensation program. The Compensation Committee believes this allows us to successfully attract and retain experienced executive talent who are critical to our long-term success.

The Compensation Committee annually reviews the companies included in our compensation peer group and may add or eliminate companies as it determines to be appropriate. For purposes of fiscal 2018 compensation matters our compensation peer group consisted of the following 17 companies:

In preparation for the fiscal 2019 executive compensation review season and the decisions that the Compensation Committee has made and will make with respect to 2019 compensation, the Compensation Committee reviewed, with its independent compensation consultant, the peer group companies listed above and removed Eastman Chemical Company and Westlake Chemical largely because of their size relative to Cabot, removed A. Schulman, Inc. because of its then pending acquisition by LyondellBasell, and removed Chemtura Corporation because of its acquisition by Lanxess. The Committee, with its independent compensation consultant, also reviewed other companies identified as potential additions to the peer group based on its screening criteria, and the Committee added the following companies to our peer group: The Chemours Company, Huntsman Corporation, Innospec Inc., Kraton Corporation, NewMarket Corporation, Platform Specialty Products Corporation, and Trinseo S.A.

The Compensation Committee and management also consider compensation survey data. The survey data used is based on information reported in Willis Towers Watson and Mercer Executive Compensation surveys. For positions where compensation peer group and survey data are available, the peer group and survey data are averaged to provide a market composite perspective for compensation.

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Executive Compensation (continued)

At least annually the Compensation Committee reviews tally sheets that detail all elements of each named executive officer’s compensation and benefits for the current and prior fiscal years, as well as a projection of his or her compensation for the upcoming fiscal year. These are provided to the Committee as a means to review the total compensation and benefits package for each named executive officer and the impact of any compensation decisions on such compensation and benefits levels. The Compensation Committee made no changes to our current executive compensation programs or any individual named executive officer’s proposed compensation for fiscal 2018 based on the information set forth in the tally sheets.

Factors Considered in Determining Amounts of Compensation

The Compensation Committee considers the following factors in determining each named executive officer’s total annual and long-term compensation opportunities:

For fiscal 2018, the Compensation Committee targeted our named executive officers’ base salaries and target STI opportunities generally at the market median of the benchmarking data used by the Committee, as described under “Use of Benchmarking Comparison Data” above, and targeted LTI award values generally at the 65^th percentile of this benchmarking data. This practice was intended to result in our named executive officers’ target total direct compensation generally being at the 60^th percentile of the benchmarking data. The actual compensation for each named executive officer was above or below the officer’s target compensation opportunity depending largely on the degree to which Company and individual performance objectives were achieved.

The Compensation Committee re-assessed its targeting strategy during fiscal 2018. Beginning with executive compensation decisions for fiscal 2019, the Committee has adopted an approach that defines competitiveness as a “range around the market 50^th percentile” for all elements of total direct compensation (base salary, target STI awards and LTI awards (with PSUs valued at target)). The Committee believes that a range provides the Committee with the framework to target market median, but to vary compensation opportunities as it deems appropriate based on individual and Company circumstances.

Developing Company Performance Metrics

The performance metrics we set are intended to support our short- and long-term business plans and strategies. In fiscal 2018, we used four financial metrics to promote well-rounded Company and management performance, as described below.

For our STI awards we used adjusted EBIT as the principal financial performance metric because it reflects an important near-term goal of improving our operating profitability and is a key driver of TSR. To increase the focus on efficiently managing our investments in working capital, we also used a NWC days metric in our STI awards.

For our PSU awards, we used adjusted EPS as the principal financial performance metric because it reflects an important longer-term financial goal of improving our after-tax profitability. Because our business is capital intensive, we believed it was also appropriate to include a return metric under our LTI program and, as a result, used adjusted RONA, which measures how effectively and efficiently we use our operating assets to generate earnings.

In selecting our short- and long-term financial performance metrics and setting the goals under each of the metrics, we begin with our annual and long-term business plans and consider other factors, including the growth expectations under our corporate strategy, our past variance to targeted performance, economic and industry conditions and industry sector performance. We intend to set challenging, but realizable, goals, including those that are realizable only as a result of exceptional performance, for the Company and our executives in order to drive the achievement of our short- and long-term objectives. We recognize that from time to time we may need to change the metrics we use to reflect new priorities and business circumstances. We expect to continue to reassess our performance metrics and goal setting process annually.

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Executive Compensation (continued)

Our Performance-based Compensation Philosophy

Our executive compensation programs are designed to provide more than 50% of each named executive officer’s total direct compensation opportunity in the form of performance-based compensation (STI awards, stock options and PSUs). For fiscal 2018, 64% of the total direct compensation opportunity for our CEO was performance-based and not guaranteed. The performance-based portion of the total direct compensation opportunities for our other named executive officers (other than our CEO) for fiscal 2018, on average, was 54%. The charts below show the total direct compensation opportunities provided to our named executive officers for fiscal 2018, as well as the mix between short- and long-term compensation and at-risk and not at-risk compensation.

How Did our STI Program Work for Fiscal 2018?

We provide annual STI awards to drive the achievement of key business results and to recognize individuals based on their contributions to those results and Cabot’s overall performance. Each named executive officer has an annual target incentive opportunity under our STI program, which is expressed as a percentage of his or her base salary. The actual amounts payable in respect of STI awards range from 0% to 200% of the target award opportunity, with 70% of each award based on the achievement of pre-established corporate financial goals and the remaining 30% of each award based on individual performance and achievements. We used two financial metrics to measure corporate performance for determining payouts under our STI program for fiscal 2018: adjusted EBIT, which had an 80% weighting, and NWC days, which had a 20% weighting. The Committee established a threshold, target, and maximum level for each financial metric, and for adjusted EBIT, also a stretch level, with payout for performance between performance levels determined on a straight-line basis. For NWC days, the target level was a short operating band of days so that small variations around demonstrated performance levels would not be rewarded or penalized. Further, if the threshold adjusted EBIT goal was not achieved, no payouts in respect of corporate performance under our STI program would be made. Even if the threshold levels of performance were achieved, the Committee nonetheless retained the discretion to decrease the amount of the awards based on our level of achievement of other corporate goals in the areas of safety, environmental performance, customers, innovation and people.

At the beginning of each fiscal year, the non-Executive Chair, with input from the other independent directors, develops the individual performance objectives for our CEO, which are then approved by the Committee. Each of our other executive officers develops with the CEO his or her individual performance objectives for the year. In assessing each executive officer’s individual performance, the Committee considers the officer’s personal achievements, including his or her achievements against established individual performance objectives, as well as individual contributions to the management team and to the Company, and leadership and management of the executive officer’s business, region or function, as applicable. The Committee does not assign specific numerical weightings or ratings to the individual performance objectives and the performance of each officer is evaluated as a whole. Furthermore, there are no formal threshold

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Executive Compensation (continued)

levels of achievement applicable to the individual performance component of our STI program. Ultimately, the determination of the payout of the portion of the STI awards based on individual performance is based on the judgment of the CEO (with respect to his direct reports) and the Committee after reviewing all relevant factors, with the final determination made by the Committee.

We believe that the fiscal 2018 STI payouts properly aligned annual incentive compensation with the Company’s fiscal 2018 financial performance, consistent with the STI program’s role in our overall compensation program. The adjusted EBIT and NWC days targets for the fiscal 2018 STI awards and our actual fiscal 2018 performance were as follows:

Fiscal 2018 STI Program Targets and Results

The portion of the STI award that was earned by each named executive officer based on individual performance reflected his or her strong individual performance and leadership in fiscal 2018 (ranging from 85% to 160% of target), with the total STI awards ranging from 151% to 174% of the named executive officer’s target award. Detailed information about each named executive officer’s fiscal 2018 STI payout is set forth in the discussion below under the heading “Fiscal 2018 Compensation Decisions”.

How Did our LTI Program Work for Fiscal 2018?

We provide our named executive officers with LTI awards to promote retention, to incentivize sustainable growth and long-term value creation, and to further align the interests of our executives with those of our shareholders by tying the executives’ realized compensation to stock price changes during the performance and/or vesting periods. The grant date value of LTI awards granted to each named executive officer for a given year is based on an assessment of the individual’s position, role and responsibilities within the Company, the overall competitiveness of his or her total direct compensation opportunity, and internal equity considerations. The Committee also considers compensation peer group

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Executive Compensation (continued)

data for a general understanding of competitive equity compensation practices as well as the impact of the grants on equity incentive plan usage, share dilution, the Company’s compensation expense and employee retention concerns.

70% of the target value of our executives’ LTI awards is performance-based, consisting of a combination of PSUs and stock options. When making LTI awards for fiscal 2018, the Compensation Committee first determined the total grant date value of the awards to be granted to each executive, and then delivered that value in three components: PSUs representing 35%, stock options representing 35%, and TSUs representing 30%, respectively, of the total grant date value of the award, assuming target level achievement of applicable performance metrics for PSUs. The terms of each type of LTI award are described in further detail below, which terms are generally applicable to LTI awards granted in fiscal 2018 and in previous fiscal years.

PSUs reward performance and the execution of our goal to deliver year-over-year and long-term growth in earnings and to increase the operating profit we generate relative to the capital we invest in our businesses. Stock options are performance-based because no value is created unless the value of our common stock appreciates after grant and they encourage employee retention through the use of a time-based vesting schedule. TSUs encourage employee retention by providing some level of value to executives who remain employed for three years. PSUs, stock options and TSUs also support an ownership culture and thereby encourage our executives to take actions that are best for Cabot’s long-term success. Importantly, although each of these equity awards provides a competitive economic value on the date of grant, their ultimate value to an executive will depend upon the degree to which we achieve objectively measurable performance metrics and/or the market value of our common stock after the end of the relevant vesting period. That value will be largely dependent upon our performance, our stock price appreciation and market dynamics.

PSUs

To reinforce the long-term nature of the PSU awards and to reward performance and the execution of our long-term growth goals, at the time of grant the performance metrics and goals for each performance period of the award are established. Specifically, each award of PSUs is allocated evenly into three tranches, with each tranche having a one-year performance period and the entire award having a three-year vesting period. When the award vests at the end of the applicable three-year period, the number of shares of stock issuable, if any, will depend on the degree of achievement of corporate performance metrics for each year within the three-year performance period. Based on the degree to which we achieve the performance metrics, an executive may earn between 0% to 200% of the number of PSUs allocated to each tranche of his or her award.

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Executive Compensation (continued)

Threshold, target, stretch and maximum goals are established for the corporate performance metrics for each tranche in the three-year performance period at or before the time of grant of the PSUs. In November 2017, at the time it approved the grant of PSU awards, the Committee established the performance metrics and goals for the fiscal 2018, fiscal 2019 and fiscal 2020 performance periods of these awards, based on the Company’s long range plan and expectations for the Company’s earnings growth and performance over that three-year period. Setting metrics in this way serves to both reinforce the long-term nature of these awards and to incentivize our leaders to achieve incrementally more challenging goals for each fiscal year included in the award. Our actual performance against those goals determines the number of shares that will be issuable in respect of the PSUs when the awards vest. The payout for performance between performance levels is interpolated on a straight-line basis. The financial metrics used to measure corporate performance are adjusted EPS, with an 80% weighting, and adjusted RONA, with a 20% weighting.

To reinforce the capital allocation goal of returning a substantial portion of discretionary free cash flow to shareholders under our Advancing the Core strategy, for PSUs granted in or after November 2016, dividend equivalent payments are made in cash in respect of PSUs that are earned based on the achievement of applicable performance metrics, but that have not vested based on time, when and if dividends are declared and paid on the Company’s common stock. The objective of providing such dividend equivalent payments is to help focus our executives on, and to reward them for, managing the business so as to produce cash that is capable of being distributed to shareholders in the form of a dividend. Dividend equivalents also mirror the income generation associated with stock ownership.

Stock options

Stock options are granted with an exercise price equal to 100% of the closing price of Cabot’s common stock on the date of grant. They generally vest, subject to continued employment, over a three-year period (30% on each of the first and second anniversaries of the date of grant and 40% on the third anniversary of the date of grant) and have a ten-year term.

TSUs

TSUs generally vest, subject to continued employment, in their entirety at the end of three years. When the TSUs vest, they are settled in shares of Cabot common stock. During the vesting period, dividend equivalents are paid in cash on each restricted stock unit when and if dividends are declared and paid on the Company’s common stock.

Practices Regarding the Grant of Equity Awards

Annual equity grants are made at the Compensation Committee’s regularly scheduled meeting in November to align the timing of grants with our fiscal year, most importantly for PSUs, which are earned based on a fiscal year performance period. The November meeting usually occurs approximately one week following our release of earnings for our fourth fiscal quarter. The exercise price of stock options is the closing price of Cabot stock on the NYSE on the date the options are granted. From time to time, equity awards outside of the annual grant program are made for recruiting or retention purposes or in connection with promotions or to recognize specific achievements or performance. We do not have a program, plan, or practice to time “off-cycle” awards in coordination with the release of material non-public information.

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Executive Compensation (continued)

PSUs Earned under PSU Award that Vested in 2018

The chart below shows the composite 2016 PSU achievement under the PSU awards granted in November 2015 that vested in November 2018. The performance periods of these awards were our 2016, 2017, and 2018 fiscal years. As described above, the Committee established the performance metrics and goals for each of these performance periods based on the Company’s long range plan and expectations for the Company’s earnings growth and performance over that three-year period. We believe setting metrics in this way reinforces the long-term nature of these awards and incentivizes our leaders to achieve incrementally more challenging goals for each year in the award. The adjusted EPS and adjusted RONA targets set in November 2015 for each of the performance periods of the fiscal 2016 awards were higher than our actual adjusted EPS and adjusted RONA performance in fiscal 2015. In addition, in setting the performance goals for the 2016 PSU awards, we simplified the award structure by establishing fixed bands for the threshold and maximum goals. The overall threshold performance goal for adjusted EPS was set such that no PSUs would be earned on that basis if our adjusted EPS was less than that for fiscal 2015. Overall, the composite PSU achievement under these awards was 140% of the target awards.

Results for PSUs granted in Fiscal 2016 that Vested 2018

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Executive Compensation (continued)

PSUs Earned under Outstanding PSU Awards on the Basis of Fiscal 2018 Performance

The following tables show the performance metrics and goals and the relative weighting of each metric that the Committee set for the fiscal 2018 performance period of PSUs granted in fiscal 2016, 2017, and 2018, our degree of attainment of these goals and the percentage of the awards earned, measured against the target award. As the performance metrics and goals for the fiscal 2018 performance period of these awards were established at different times, they each reflect the long-term goals in place when the awards were granted.

Performance Goals (set in November 2015) and Results for

Performance Year 3 of the PSUs that Vested in November 2018

Performance Goals (set in November 2016) and Results for

Performance Year 2 of the PSUs that Vest in November 2019

Performance Goals (set in November 2017) and Results for

Performance Year 1 of the PSUs that Vest in November 2020

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Executive Compensation (continued)

Fiscal 2018 Compensation Decisions

The compensation decisions the Committee made with respect to our named executive officers for fiscal 2018 are described below.

In considering each executive’s individual performance in fiscal 2018 and determining his or her STI award payout for fiscal 2018 and making the other compensation decisions discussed above, the Committee specifically considered the following:

Sean D. Keohane, President and CEO.

Fiscal 2018 Performance Summary

The Committee believes that Mr. Keohane performed extremely well in 2018. The Committee also specifically recognized Mr. Keohane’s role in:

Compensation Decisions for Fiscal 2018

Erica McLaughlin, SVP and CFO (since May 15, 2018), previously VP, Business Operations, Reinforcement Materials Segment and GM, Tire business.

Fiscal 2018 Performance Summary

Among Ms. McLaughlin’s key achievements that the Committee considered both in her prior role and her role as SVP and CFO were the following:

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Executive Compensation (continued)

Compensation Decisions for Fiscal 2018

Nicholas S. Cross, former EVP and President, Performance Chemicals Segment, and President, EMEA Region (until September 30, 2018).

Fiscal 2018 Performance Summary

Among Mr. Cross’s key achievements that the Committee considered were the following:

In determining Mr. Cross’s STI award, the Committee also considered Performance Chemicals segment results, which reported flat EBIT in fiscal 2018.

Compensation Decisions for Fiscal 2018

Effective September 30, 2018, Mr. Cross stepped down from his position as EVP and President, Performance Chemicals Segment, and President, EMEA Region of the Company.

40    CABOT CORPORATION

Executive Compensation (continued)

Brian A. Berube, SVP and General Counsel.

Fiscal 2018 Performance Summary

Among Mr. Berube’s key achievements that the Committee considered were the following:

Compensation Decisions for Fiscal 2018

Hobart C. Kalkstein, SVP and President, Reinforcement Materials Segment, and President, Americas Region.

Fiscal 2018 Performance Summary

Among Mr. Kalkstein’s key achievements that the Committee considered were the following:

Compensation Decisions for Fiscal 2018

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Executive Compensation (continued)

Eduardo E. Cordeiro, former EVP and CFO, and President, Americas Region (until May 15, 2018).

Fiscal 2018 Performance Summary

Among Mr. Cordeiro’s key achievements that the Committee considered were the following:

Compensation Decisions for Fiscal 2018