SCHEDULE 14A INFORMATION
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240.14a-12
Aluminum Company of America
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement if other than
Registrant)
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Aluminum Company of America
425 Sixth Avenue, Alcoa Building
Pittsburgh, Pennsylvania 15219-1850
1996 Notice of Annual Meeting and
Proxy Statement
To Alcoa Shareholders:
It is my privilege to invite you to the 1996 annual meeting
of Alcoa shareholders. We will meet on Friday, May 10, at
9:30 a.m. in the Westin William Penn Hotel in Pittsburgh,
Pennsylvania. I hope you will be able to attend and
participate in this review of your company's business and
operations.
The Westin William Penn is fully accessible to disabled
persons. In addition, headsets for the hearing-impaired will
be available.
If you plan to attend the meeting, you will need an
admission ticket. An admission ticket is attached to the
proxy card that accompanies this proxy statement for
registered shareholders. Other shareholders may obtain a
ticket by contacting the corporate secretary.
Whether or not you plan to attend, it is important that
your shares are represented at the meeting. Please fill out
and return your proxy card promptly.
Sincerely,
/s/Paul H. O'Neill
Paul H. O'Neill
Chairman of the Board and
Chief Executive Officer
March 6, 1996
page 1
Notice of 1996 Annual Meeting
March 6, 1996
The annual meeting of shareholders of Aluminum Company of
America (Alcoa) is scheduled for Friday, May 10, 1996 at 9:30
a.m. We will meet in the Grand Ballroom of the Westin
William Penn Hotel in Pittsburgh, Pennsylvania.
The purposes of the meeting are:
(1) to elect four directors for a term of three years; and
(2) to consider any other matters that properly may come
before the meeting or any adjournment of the meeting.
Owners of common stock of record at the close of business
on February 12, 1996 will be entitled to vote at the meeting.
The presence in person or by proxy of shareholders entitled
to cast a majority of the votes that all shareholders are
entitled to cast at the meeting will constitute a quorum for
conducting business. If a quorum is not present, the meeting
may be adjourned to a time and place determined by those
shareholders present. If the meeting is adjourned, the
shareholders present at the next meeting will constitute a
quorum for the purpose of electing directors. In the event
that the meeting is adjourned for one or more periods
totaling at least 15 days, the shareholders present at this
latest meeting will constitute a quorum for acting upon any
matter to be voted on at the meeting.
Your attention is directed to the following proxy statement
and the accompanying proxy card.
On behalf of Alcoa's Board of Directors,
Barbara Jeremiah
Secretary
Contents
Proxy solicitation and voting information . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . 3
Meetings and committees of the Board . . . . . . . 7
Certain relationships and related transactions . . 7
Directors' compensation . . . . . . . . . . . . . . 7
Security ownership . . . . . . . . . . . . . . . . . . 8
Performance graph . . . . . . . . . . . . . . . . . 9
Compensation of executive officers . . . . . . . . . . 9
Compensation Committee report on
executive compensation . . . . . . . . . . . . . 9
1995 executive compensation . . . . . . . . . . . . 10
Pension plans . . . . . . . . . . . . . . . . . . . 12
Long-term stock incentive plan . . . . . . . . . . 12
Other information . . . . . . . . . . . . . . . . . . 15
Relationship with independent public accountants . 15
1997 meeting--shareholder proposals . . . . . . . . 15
Other matters . . . . . . . . . . . . . . . . . . . 15
Alcoa
425 Sixth Avenue
Pittsburgh, PA 15219-1850
Corporate secretary: (412) 553-4678
-2-
Proxy Statement
Proxy solicitation and voting information
The accompanying proxy is solicited by the Board of Directors
of Aluminum Company of America (Alcoa or the company) for use
at the annual meeting of shareholders on May 10, 1996. These
proxies will be voted if properly signed, received by the
secretary of the company prior to the close of voting at the
meeting and not revoked.
Holders of record of Alcoa common stock at the close of
business on February 12, 1996 will be entitled to vote at the
meeting. On that date 175,608,756 shares of common stock
were outstanding. Shareholders are entitled to one vote per
share on each matter properly brought before the meeting.
Under Pennsylvania law and the company's Articles, a quorum
is required to conduct business at the annual meeting. A
quorum is the presence, in person or by proxy, of a majority
of the votes entitled to be cast at the meeting.
Abstentions, votes withheld from director nominees and broker
non-votes are counted for determining a quorum. If a quorum
is present, the candidate or candidates receiving the highest
number of votes will be elected directors, and any other
matter being voted on at the meeting will be approved if a
majority of the votes cast by shareholders are voted in favor
of such matter. Abstentions, broker non-votes or failure to
vote are disregarded in tabulating voting results.
Proxies representing shares of common stock held of record
also will represent full and fractional shares held under the
company's Dividend Reinvestment and Stock Purchase Plan and
full shares held under Alcoa's employee savings plans, if the
registrations are the same. Separate mailings are made for
shares not held under the same registration.
Employee savings plan shares for which no voting directions
are received from participants will be voted by the
independent trustee in the same proportion (for, against and
abstain) as the shares in all plans for which participant
directions are received.
A shareholder who has returned a proxy may revoke it at any
time before it is voted at the meeting by delivering a
revised proxy, by voting by ballot at the meeting, or by
written notice to the company's secretary withdrawing the
proxy. This notice may be mailed to the secretary at the
address at the top of the first page of this booklet or may
be given to the judge of election at the meeting.
Proxies, ballots and voting tabulations that identify
shareholders will be held confidential, except in a contested
proxy solicitation or where necessary to meet applicable
legal requirements. Corporate Election Services, Inc., the
company's independent proxy tabulator, has been appointed
judge of election for the meeting.
Alcoa pays the cost of soliciting proxies. To assist in
the solicitation process, Alcoa hired the firm of Morrow &
Co., Inc. for a fee of $7,000 plus out-of-pocket expenses.
Also, Alcoa directors and officers and other employees may
solicit proxies by mail, in person, or by telephone or fax.
The company will request that banks, brokerage firms and
other persons who hold stock in their names for others, or in
the name of nominees for others, obtain voting instructions
from beneficial owners of the stock. Alcoa reimburses such
persons for their reasonable expenses in obtaining voting
instructions.
Shareholders' comments about any aspect of company business
are welcome. Space is provided for this purpose on the proxy
card given to registered shareholders. Other shareholders
may write to the company in care of the corporate secretary.
Although shareholder comments are not answered on an
individual basis, they do assist Alcoa management in
determining and responding to the needs of shareholders.
Board of Directors
The Alcoa Board of Directors consists of twelve members and
is divided into three classes. The terms of office of the
three classes of directors end in successive years.
The four members of the class of directors whose terms of
office expire at the May 1996 annual meeting have been
nominated to serve for a new three-year term that will end in
1999.
The accompanying proxy will be voted for the election of
these nominees, unless authority to vote for one or more
nominees is withheld. In the event that any of the nominees
is unable or unwilling to serve as a director for any reason
(which is not anticipated), the proxy will be voted for the
election of any substitute nominee designated by the Board of
Directors or its Executive Committee.
-3-
Nominees to serve for a three-year term expiring 1999
Joseph T. Gorman
Chairman and Chief Executive Officer,
TRW Inc., a global company serving
the automotive, space and defense,
and information systems markets
Mr. Gorman, 58, became a director in 1991. He has been
Chairman and Chief Executive Officer of TRW since December
1988. Mr. Gorman served as Chief Operating Officer of TRW
from 1985 until 1988 and as President from 1985 until April
1991. He is also a director of TRW and The Procter &
Gamble Company and is a member of the BP America Inc.
Advisory Board.
Sir Ronald Hampel
Chairman, Imperial Chemical Industries PLC,
a diversified chemicals manufacturer
Sir Ronald, 63, has been a director since January 1995. He
has been Chairman of Imperial Chemical Industries PLC since
April 1995, and a director since 1985. From 1991 to 1993
he was chief operating officer of Imperial Chemical
Industries and served as its Deputy Chairman and Chief
Executive from 1993 to April 1995. He is also a director
of British Aerospace PLC.
John P. Mulroney
President and Chief Operating
Officer, Rohm and Haas Company,
a specialty chemicals manufacturer
Mr. Mulroney, 60, has been a director since 1987. He has
been President and Chief Operating Officer of Rohm and Haas
Company since 1986. In 1982 he was elected a director,
Group Vice President and Corporate Business Director of
that corporation. Mr. Mulroney is also a director of
Teradyne, Inc.
Marina v.N. Whitman
Professor of Business Administration and
Public Policy, University of Michigan
Ms. Whitman, 60, has been a director since March 1994. She
is Professor of Business Administration and Public Policy,
School of Business Administration and the School of Public
Policy at the University of Michigan. Ms. Whitman was Vice
President and Chief Economist of General Motors Corporation
(GMC) from 1979 to 1985, and Vice President and Group
Executive, Public Affairs and Marketing Staffs of GMC from
1985 to 1992. She was a member of the President's Council
of Economic Advisers from 1972 to 1973. Ms. Whitman is
also a director of Browning-Ferris Industries, Inc.,
Chemical Banking Corporation, The Procter & Gamble Company
and Unocal Corporation.
-4-
Continuing directors--term expiring 1998
Sir Arvi Parbo
Chairman, WMC Limited (formerly Western
Mining Corporation Holdings Limited), an
Australian exploration and mining company,
and Chairman of Alcoa of Australia Limited
Sir Arvi, 70, has been a director since 1980. He has been
Chairman of WMC Limited since 1974. He served as Managing
Director of that company from 1971 to 1986. Sir Arvi is
also a director of Hoechst Australian Investments Pty.
Ltd., Munich Reinsurance Company of Australia Ltd., Sara
Lee Corporation and Zurich Australian Insurance Group.
Henry B. Schacht
Chairman and Chief Executive Officer,
Lucent Technologies, a communications systems
and technology company
Mr. Schacht, 61, was elected a director in September 1994.
He was named Chairman and Chief Executive Officer of Lucent
Technologies in February 1996. Lucent Technologies is a
communications systems and technology company formed in
connection with a restructuring announced by AT&T in
October 1995. Mr. Schacht was Chairman from 1977 to 1995
and Chief Executive Officer from 1973 to 1994 of Cummins
Engine Company, Inc., a leading manufacturer of diesel
engines. He served as Chairman of the Executive Committee
of the Board of Directors of Cummins in 1995. Mr. Schacht
is also a director of American Telephone & Telegraph Co.,
Cummins Engine Company, Inc., The Chase Manhattan Corp. and
The Chase Manhattan Bank.
Forrest N. Shumway
Former Vice Chairman, AlliedSignal Inc.,
a diversified, technologically based
corporation
Mr. Shumway, 68, has been a director since February 1988
and served previously as a director from 1982 to 1987. He
retired as Vice Chairman of the Board and Chairman of the
Executive Committee of AlliedSignal Inc. in 1987. Prior to
1985, he had served as Chairman and Chief Executive Officer
of The Signal Companies, Inc. Mr. Shumway is also a
director of American President Companies, Ltd., The Clorox
Company, First Interstate Bancorp and Transamerica
Corporation.
Franklin A. Thomas
President, The Ford Foundation,
a nonprofit charitable foundation
Mr. Thomas, 61, has been a director since 1977. He has
been President of The Ford Foundation since 1979. Mr.
Thomas was President and Chief Executive Officer of Bedford
Stuyvesant Restoration Corporation from its founding in
1967 until 1977. He is also a director of American
Telephone & Telegraph Co., Citicorp/Citibank, N.A., Cummins
Engine Company, Inc. and PepsiCo, Inc.
-5-
Continuing directors--term expiring 1997
Kenneth W. Dam
Max Pam Professor of American and
Foreign Law, University of Chicago
Law School
Mr. Dam, 63, has been a director since 1987. He is Max Pam
Professor of American and Foreign Law at the University of
Chicago Law School. He served as President and Chief
Executive Officer of the United Way of America in 1992,
Vice President for Law and External Relations of
International Business Machines Corporation from 1985 to
1992, Deputy Secretary of State from 1982 to 1985 and
Provost of the University of Chicago from 1980 to 1982. He
serves on a number of nonprofit boards, including the
Council on Foreign Relations and the Brookings Institution.
John P. Diesel
Former President, Tenneco, Inc.,
a diversified energy company
Mr. Diesel, 69, has been a director since 1980. He had
been a director of Tenneco since 1976 and its President
since 1979. He retired from both positions at Tenneco at
year-end 1988. Mr. Diesel is also a director of Brunswick
Corporation, Financial Institutions Insurance Group and
Telepad Corporation.
Judith M. Gueron
President, Manpower Demonstration
Research Corporation, a nonprofit
research organization
Dr. Gueron, 54, has been a director since 1988. She has
been President of Manpower Demonstration Research
Corporation (MDRC) since 1986. She was Executive Vice
President for research and evaluation of MDRC from 1978 to
1986. Before joining MDRC, Dr. Gueron was director of
special projects and studies and a consultant at the New
York City Human Resources Administration.
Paul H. O'Neill
Chairman of the Board and Chief
Executive Officer of Alcoa
Mr. O'Neill, 60, has been a director since 1986. He was
elected Chairman of the Board and Chief Executive Officer
of Alcoa effective in June 1987. Before joining Alcoa in
1987, Mr. O'Neill had been an officer of International
Paper Company since 1977 and President and a director since
1985. He is also a director of the Gerald R. Ford
Foundation, Manpower Demonstration Research Corporation and
The RAND Corporation.
-6-
Meetings and committees of the Board
The Alcoa Board of Directors met six times in 1995. The
Board has several standing committees, including the five
described below. Attendance by directors at meetings of the
Board and of committees on which they served averaged over
95%. All directors attended at least 75% of these meetings.
The Audit Committee, composed of Directors Dam, Gueron,
Schacht, Shumway, Thomas (chairman) and Whitman, reviews the
performance of the independent public accountants and makes
recommendations to the Board concerning the selection of
independent public accountants to audit the company's
financial statements. This Committee also reviews the audit
plans, audit results and findings of the internal auditors
and the independent accountants, reviews the environmental
audits conducted by the company's environmental staff and
monitors compliance with Alcoa business conduct policies.
The Audit Committee meets regularly with the company's
management, the Director of Internal Audit and independent
public accountants to discuss the adequacy of internal
accounting controls and the financial reporting process and
with the company's management to discuss environmental
matters. The independent accountants and the Director of
Internal Audit have access to the Audit Committee without
management's presence. This Committee had six meetings in
1995.
The Compensation Committee, composed of Directors Dam,
Diesel (chairman), Mulroney, Parbo, Schacht and Thomas,
determines the compensation of all Alcoa officers (including
salary and bonus), authorizes or approves any contract for
remuneration to be paid after termination of an officer's
regular employment and performs specified functions under
company compensation plans. The Compensation Committee
reviews, but is not required to approve, the participation of
officers in the company's other benefit programs for salaried
employees. Five meetings were held in 1995.
The Executive Committee, composed of Directors Diesel,
O'Neill (chairman) and Thomas, has been granted the authority
of the Board in the management of the company's business and
affairs. It meets principally when specific action must be
taken between Board meetings. This Committee met twice in
1995.
The Nominating Committee, composed of Directors Diesel,
Gorman, Hampel, Mulroney (chairman), Parbo and Thomas,
reviews the performance of incumbent directors and the quali-
fications of nominees proposed for election to the Board and
makes recommendations to the Board with regard to nominations
for director. This Committee will consider proposed nominees
whose names and information regarding education and
experience are submitted in writing by shareholders to the
secretary of the company. This Committee had one meeting in
1995.
The Pension and Savings Plan Investment Committee, composed
of Directors Gorman, Gueron, Hampel, Shumway (chairman),
Thomas and Whitman, reviews and makes recommendations to the
Board concerning the investment management of the assets of
Alcoa's retirement plans and principal savings plans. This
Committee met three times in 1995.
Certain relationships and related transactions
Alcoa and its subsidiaries have transactions in the ordinary
course of business with many people and organizations,
including corporations of which certain nonemployee directors
(outside directors) are executive officers. Transactions
with any of these corporations did not exceed 5% of Alcoa's
or the other corporation's consolidated gross revenues for
its last fiscal year. Alcoa does not consider these trans-
actions to be material.
Directors' compensation
1995 compensation. The table below sets forth the
compensation paid to nonemployee (outside) directors for
services rendered in 1995.
<TABLE>
<CAPTION>
Cash compensation Security grants
------------------------------------------
Name Annual Meeting Number of
retainer fees shares **
fees *
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Kenneth W. Dam $ 33,000 $ 13,200 500
John P. Diesel 32,000 10,800 500
Joseph T. Gorman 30,000 7,400 500
Judith M. Gueron 33,000 12,000 500
Sir Ronald Hampel 30,000 7,200 500
John P. Mulroney 32,000 10,200 500
Sir Arvi Parbo 30,000 8,600 500
Henry B. Schacht 31,500 8,000 500
Forrest N. Shumway 35,000 10,800 500
Franklin A. Thomas 35,000 16,200 500
Marina v.N. Whitman 33,000 12,000 500
- ---------------------------------------------------------------------
<FN>
* Includes committee chairman fees and additional retainer fee
paid to members of the Audit Committee.
** These shares carry full voting and dividend rights, but may
not be sold or pledged by the director until after Board
service ends.
</TABLE>
Directors may elect to defer receipt of some or all cash
fees. Deferred accounts are credited with investment results
comparable to those of the investment options under Alcoa's
principal savings plan for salaried employees, as selected by
the director. Changes among investment options are permitted
once each month, except that no transfers may be made from
the Alcoa stock investment option. Deferred accounts are
unfunded and are paid out in cash after Board service ends.
A fee continuation arrangement also was available to out-
side directors in 1995. Benefits vested, generally, at 10%
per year of service. Payments begin after the later of
age 65
-7-
or discontinuance of service as a director and continue
for life. The annual amount equals the vesting per-
centage multiplied by the minimum annual retainer (cash and
common shares) in effect when Board service ends. However,
if service ends after attaining age 70 with at least five
years of service, 100% of the final retainer is paid.
1996 compensation. The Board has revised its compensation
structure for nonemployee directors beginning in 1996.
First, the Board determined that all director compensation
will be paid in cash. Consequently, annual awards of
restricted stock no longer will be granted. The annual cash
retainer for 1996 is $85,000. Meeting and committee chair-
man fees are eliminated. Directors will continue to be
eligible to defer receipt of cash fees. Directors are
encouraged to defer the maximum amount which their indivi-
dual circumstances permit. All deferrals are credited to the
Alcoa stock investment option referred to above, except that
deferred amounts in excess of 50% of the annual retainer fee
may be invested in any investment option of the deferred fee
plan.
The Board also voted to terminate further benefit vesting
under the fee continuation arrangement described above.
Current directors will receive benefits upon leaving the
Board based on their years of service as of December 31,
1995 and the base annual stock and cash retainer in effect
on that date. All benefits under the terminated arrangement
are payable from the general assets of the company, and no
segregation of assets for this purpose has been made.
Security ownership
The following table shows the beneficial ownership of Alcoa
common stock as of January 31, 1996 for each director and the
CEO and four other highest paid executive officers, and for
all directors and executive officers as a group. The shares
shown for the group represented less than 1% of the total
shares outstanding. The first column shows shares which the
executives had the right to acquire within 60 days through
the exercise of employee options. The second column includes
the number of shares beneficially owned, and the third column
lists the number of deferred share equivalent units credited
to the individual director's or executive's account under
deferred fee or deferred compensation plans.
<TABLE>
<CAPTION>
Exercisable Shares
stock beneficially Deferred Share
Name options owned Equivalent Units
---- ---------- ------------ ----------------
<S> <C> <C> <C>
Kenneth W. Dam 0 2,700 201
John P. Diesel 0 2,700 1,792
Joseph T. Gorman 0 2,175 705
Judith M. Gueron 0 2,818 201
Sir Ronald Hampel 0 903 0
John P. Mulroney 0 2,946 197
Paul H. O'Neill 656,124 142,085 3,723
Sir Arvi Parbo 0 3,475 394
Henry B. Schacht 0 2,503 394
Forrest N. Shumway 0 9,200 0
Franklin A. Thomas 0 3,014 2,458
Marina v.N. Whitman 0 1,900 201
Alain J. P. Belda 169,090 6,735 1,591
Richard L. Fischer 55,386 37,404 2,349
Ronald R. Hoffman 28,954 29,966 1,504
Jan H. M. Hommen 36,528 34,532 2,507
Directors and executive
officers as a group 1,285,639 454,006 24,442
</TABLE>
Wellington Management Company, 75 State Street, Boston,
Massachusetts 02109, an investment adviser and parent holding
company, reported to the Securities and Exchange Commission
(SEC) that it beneficially owned 10,398,964 shares, or 5.87%
of the company's common stock as of December 31, 1995. It
reported shared power to dispose of all of these shares and
shared voting power over 2,857,540 shares. The Wellington
holdings included shares owned by various investment advisory
clients.
FMR Corp., 82 Devonshire Street, Boston, Massachusetts
02109, a parent holding company, reported to the SEC that it
and its affiliates (including Fidelity Management & Research
Company, an investment adviser; Edward C. Johnson 3d, FMR's
chairman; and Abigail P. Johnson, a director of FMR)
beneficially owned 16,659,738 shares, or 9.40% of the
company's common stock as of December 31, 1995. It reported
sole power to dispose of all of these shares and sole voting
power over 1,883,547 shares.
Mellon Bank Corporation (MBC), One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258, a bank holding company,
reported to the SEC that it and its subsidiaries beneficially
owned 11,097,135 shares, or 6.26% of the company's common
stock as of December 31, 1995. MBC stated in its report that
it had sole power to vote 2,627,000 shares, shared power to
vote 8,061,135 shares, sole power to dispose of 2,663,000
shares and shared power to dispose of 2,575,000 shares.
MBC's holdings included 10,180,135 shares (or 5.74% of the
company's outstanding shares) held by Mellon Bank, N.A. The
Bank acts as trustee for the company's principal employee
savings plans.
-8-
Performance graph
The following graph illustrates the performance of Alcoa
common stock over a five-year period compared with the
performance of the S & P 500 Index and a peer group index,
all with dividends reinvested in additional shares on the
dates paid. The peer group index (market capitalization
weighted) consists of Alcan Aluminium Limited and Reynolds
Metals Company. The peer group index is being used rather
than the S & P Aluminum Industry Index, which includes Alcoa
as well as Alcan and Reynolds, because Alcoa's heavy market
capitalization weighting would distort a comparison to the
full index.
<TABLE>
<CAPTION>
Comparison of five-year cumulative total return *
Measurement Period Alcoa S&P 500 Index Peer Group Index
(Fiscal Year Covered)
<S> <C> <C> <C>
Measurement Pt 12/31/90 $100.00 $100.00 $100.00
FYE 12/31/91 114.75 130.47 103.66
FYE 12/31/92 130.61 140.41 97.67
FYE 12/31/93 129.41 154.56 102.86
FYE 12/31/94 164.87 156.60 122.14
FYE 12/31/95 204.99 214.86 149.57
<FN>
* Assumes the investment of $100 on December 31, 1990 and
the reinvestment of all dividends.
</TABLE>
Compensation of executive officers
Compensation Committee report on executive compensation
The company's Compensation Committee is composed solely of
independent, nonemployee directors.
The company's compensation policy, as developed by the
Committee, is to provide compensation and benefit programs
from a total compensation perspective which enables Alcoa to
hire, retain and motivate high-performing employees
worldwide. Total compensation includes salary, annual cash
incentives, long-term incentives and employee benefits.
Guiding principles include pay for individual and group
performance, competitive total compensation compared with
leading industrial companies and, particularly for
executives, total compensation which is highly leveraged
based on business performance -- both financial and
nonfinancial.
The company engages executive compensation consulting firms
to provide comparative market compensation data and to assist
in analysis and interpretation of comparative practices. The
comparison groups surveyed for both total cash compensation
and long-term incentives include a cross section of over 20
leading manufacturing companies -- a select sample of well-
managed companies with whom Alcoa competes for talent. These
companies are among the largest and most highly regarded
corporations in a broad range of industries and serve as a
proxy for the market at large. Similar approaches are used
to compare position size within these companies, which
facilitate compensation comparisons.
Since 1987 the Committee has shifted executive compensation
away from higher fixed salaries and toward more at-risk short-
term and long-term performance-based incentives. Stock-based
incentives are an important element, helping to assure that
executives are focused on increasing shareholder value.
Cash compensation. Targets for annual cash compensation
(salary and cash incentives) are set above the median for the
comparison group of high-performing industrial companies.
Payouts at target provide competitive levels of total cash
compensation when predetermined performance measures of
excellence are achieved. For senior management, the
Committee has moved to more leverage based on performance,
with the base salary structure below the median and annual
cash incentive targets above the median for the comparison
group.
Annual cash incentive payouts for executive officers are
based on the achievement of business plan goals for the year
by the company's various business units. At least 50% of the
business unit goals are based on financial measurements.
Other goals may include nonfinancial measurements such as
electrical efficiency per pound of aluminum produced, reduced
cycle time, inventory reduction, product quality improvements
and safety performance. The Committee believes that if the
company focuses on achieving excellence in these areas within
its control as measured by the proper nonfinancial
indicators, long-term growth in shareholder value will
result. Target awards, established as a percentage of base
salary, vary by position level. Adjustments to target awards
and special award flexibility may be made by the Committee in
its discretion to reflect individual performance. To provide
further congruency throughout the company, cash incentive
programs were revised in 1992 so that similar performance
measures apply both to executives and, under the performance
pay plan, to most other U.S. employees. The measures for
employees in business units are the goals of their individual
business unit. For most executive officers, the aggregate
performance against these goals for all business units is the
measure that determines the payout of their
-9-
annual cash incentive target. The maximum payout before
adjustment for individual performance is 150% of the target
award.
Long-term incentives. Long-term incentives are stock-
based, consistent with the Committee's goal of encouraging
stock ownership and closely aligning management's interests
with those of shareholders.
Annual long-term awards are granted in the form of stock
options. They are designed to provide a competitive award
opportunity versus the comparison group of leading industrial
companies; stock performance then determines the amount
earned. The Committee has established guidelines on the
target number of shares to be covered by annual option grants
for executive officer and other management positions. The
guidelines reflect the Committee's assessment of levels of
responsibility of the company's manager and officer positions
as well as the relationship to the size of prior grants and
comparative award data. Individual annual grants are
ordinarily made at the guideline amount.
The continuation (reload) feature of the stock option
program was added in 1989 to provide further incentive for
increased stock ownership, not only for senior management but
for about 750 other optionees. This feature encourages early
exercise of options and retention of the Alcoa shares. To
obtain continuation options, employees already must own
shares which are used to pay the exercise price. Further,
one-half of the "appreciation" shares received upon exercise,
after any share withholding for taxes, are restricted against
sale or pledge during the employee's Alcoa career. These
shares may be used for further option exercises. Share
ownership by optionees, including executive officers, has
increased significantly in the last four years through use of
the reload feature.
Report on 1995 compensation of executive officers including
the named officers. Salary and annual incentive dollar
targets were increased from 1994, reflecting comparable
increases in the comparison survey data. Cash payouts for
executive officers under the annual incentive plan based on
1995 performance averaged about 115% of target awards.
Stock option awards are granted annually. The Committee
has established guideline option awards by job grade based on
competitive data. The January 1995 stock option grants for
executive officers were made, in accordance with the
established guidelines, at the full levels for these
positions.
A large number of optionees exercised stock options in
1995. Most of the exercises by executive officers involved
the grant of continuation options. Consistent with the
intent of this feature, the exercises resulted in a large
percentage increase in Alcoa share ownership by executive
officers.
Report on 1995 CEO compensation. The chief executive
officer's compensation is established based on the philosophy
and policies stated above for all executive officers. This
includes cash compensation (base salary and annual cash
incentive payouts) and long-term incentives (stock option
awards). The Compensation Committee meets annually without
the CEO and evaluates his performance in relation to
financial and nonfinancial goals previously established. A
consensus is reached and commensurate compensation
adjustments are made. This process is reported in full to
the entire Board for their consideration and concurrence.
This meeting is an executive session of nonemployee directors
only.
More specifically, Mr. O'Neill's base salary increased in
1995 to $750,000 from $700,200 in 1994. By design,
Mr. O'Neill's salary remains below the median for the
comparison group.
In January 1996, Mr. O'Neill was awarded a bonus of
$1,250,000, which was 138% of his target incentive award for
1995. The bonus amount was based in part on aggregate
business unit results compared with plan goals and, in part,
in recognition by the Committee of Mr. O'Neill's outstanding
leadership during 1995.
Mr. O'Neill's 1995 annual stock option award grant was made
at the established guideline number of shares for his
position.
Summary. The Committee believes the company's compensation
programs help to maintain the company's leadership position
among global industrial companies.
Compensation Committee
John P. Diesel, Chairman
Kenneth W. Dam
John P. Mulroney
Sir Arvi Parbo
Henry B. Schacht
Franklin A. Thomas
1995 executive compensation
A summary of the compensation for the company's chief
executive officer and for the four other executive officers
who were the highest paid for the fiscal year ended December
31, 1995 for services to Alcoa and its subsidiaries is shown
in the following table.
-10-
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
------------
Annual Compensation Awards
------------------- -------------
Securities
Name and Underlying All Other
Principal Position Year Salary (1) (2) Bonus Options (3) Compensation (4)
- ------------------- ---- --------------- ----- ------------ ----------------
<S> <C> <C> <C> <C> <C>
Paul H. O'Neill 1995 $ 750,000 $1,250,000 587,250 $ 174,759
Chairman of the Board and 1994 700,200 750,000 433,042 159,012
Chief Executive Officer 1993 700,200 343,000 125,200 170,012
Alain J. P. Belda 1995 446,823 600,000 65,000 90,809
Vice Chairman 1994 413,500 260,000 54,754 113,010
1993 319,231 152,200 29,000 91,362
Richard L. Fischer 1995 366,900 400,000 275,736 69,945
Executive Vice President - 1994 350,400 180,000 197,242 65,024
Chairman's Counsel 1993 350,400 112,000 87,980 70,024
Ronald R. Hoffman 1995 366,900 400,000 305,686 72,335
Executive Vice President - 1994 350,400 180,000 196,810 69,024
Human Resources, Quality, 1993 350,400 112,000 74,046 74,024
and Communications
Jan H. M. Hommen 1995 316,776 400,000 204,233 88,036
Executive Vice President 1994 310,800 180,000 118,106 56,648
and Chief Financial Officer 1993 300,000 162,200 54,160 62,000
<FN>
(1) The most highly compensated executive officers are those
with the highest annual salary and bonus for the last
completed fiscal year. In addition to base salary, the salary
column in this table includes, when selected by the employee,
an extra week's pay in lieu of vacation as permitted under the
company's vacation plan for employees with 25 or more years of
service. Also included for 1993 is vacation premium for
Mr. Belda, paid pursuant to Brazilian law.
(2) Mr. Belda's 1993 salary was paid by Alcoa Aluminio S.A.
in local Brazilian currency.
(3) The numbers of shares shown in this column have been
adjusted to reflect the two-for-one split of Alcoa common
stock in February 1995. The annual stock option grant for
each named officer in 1995, except Mr. Belda, was only a
fraction of the total grants reported for 1995 (159,400 shares
for Mr. O'Neill). All of the other option awards relate to
previous years' options grants and the use of the continuation
(reload) feature described in the next section.
(4) Company matching contributions to 401(k) and excess
savings (defined contribution) plans for 1995 were as follows:
Mr. O'Neill, $45,000; Mr. Belda, $26,313; Mr. Fischer,
$22,014; Mr. Hoffman, $22,014; and Mr. Hommen, $18,648. The
present value costs of the company's portion of 1995 premiums
for split-dollar life insurance, above the term coverage level
provided generally to salaried employees, were as follows:
Mr. O'Neill, $129,359; Mr. Belda, $63,294; Mr. Fischer,
$47,531; Mr. Hoffman, $49,921; and Mr. Hommen, $43,088. This
column also includes excess health care credits received as
cash (Mr. Belda, $1,202; each other officer, $400). Also
included for Mr. Belda in 1994 and for Mr. Hommen in 1995, is
an additional one month's salary paid to employees who attain
25 years of service with the company.
</TABLE>
-11-
Pension plans
The company's pension plans cover a majority of its salaried
employees on a noncontributory basis. The plans, which
include both tax-qualified plans and non tax-qualified excess
plans, provide the following annual benefits at executive
remuneration levels.
<TABLE>
<CAPTION>
Pension Plan Table
- --------------------------------------------------------------------------
Years of Service
--------------------------------------------------------
Remuneration 15 20 25 30 35 40
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 21,080 $ 28,100 $ 35,130 $ 42,160 $ 49,560 $ 57,710
300,000 57,320 76,420 95,530 114,640 129,360 144,830
500,000 94,800 126,400 158,000 189,610 213,880 238,910
700,000 131,650 175,530 219,420 263,300 296,970 331,390
900,000 168,750 225,000 281,250 337,510 380,630 424,510
1,100,000 203,690 271,580 339,480 407,380 459,410 512,190
1,300,000 241,300 321,730 402,170 482,600 544,220 606,590
1,500,000 274,830 366,440 458,050 549,670 619,830 690,750
- --------------------------------------------------------------------------
</TABLE>
The amount of pension is based upon the employee's average
compensation for the highest five years in the last ten years
of service. For the executive level, covered compensation
includes base salary and 50% of annual cash bonus. Data
shown in the table reflect salary at target plus bonus at
target. Payments are made as a straight life annuity,
reduced by 5% where a surviving spouse pension is taken. The
table shows benefits at age 65, before applicable reductions
including the offset which recognizes a portion of the
company's cost for social security benefits. At March 1,
1996, pension service was as follows: Mr. Belda, 27 years;
Mr. Fischer, 30 years; Mr. Hoffman, 41 years; Mr. Hommen, 25
years; and Mr. O'Neill, 20 years, reflecting an employment
contract which provides somewhat more than double credits for
his years with the company, with the resulting pension offset
by pension payments from his previous employer.
Long-term stock incentive plan
This plan provides long-term incentives, based on Alcoa stock,
to employees who may influence the long-term performance of
Alcoa and its subsidiaries. Key features of the plan include
stock options and performance shares. New performance share
awards were discontinued beginning in 1993.
Stock options are granted annually, currently in the month
of January. The option price generally may not be less than
100% of the fair market value of Alcoa stock on the grant
date. New option grants made in 1995 totaled 159,400 for
Mr. O'Neill; 65,000 for Mr. Belda; 52,800 each for
Messrs. Fischer and Hoffman; and 41,800 for Mr. Hommen. All
of these options were granted at an exercise price of $44.438
per share.
In 1989, a "reload" or continuation feature was added to
the plan for the purpose of encouraging early option exercise
and increased share ownership by optionees. This feature
permits the optionee to exercise a previously granted option
and receive option appreciation as shares, together with a
continuation option for a lesser number of shares and having
a new option price at current market value. The option
expiration date is the same as for the prior grant. The
continuation option covers the previous number of option
shares less the net "appreciation" shares received after any
share withholding for taxes. One-half of the net apprecia-
tion shares are restricted against sale or pledge during the
employee's Alcoa career. The reload feature has resulted in
substantially increased share ownership by Alcoa executive
officers and other optionees.
In 1995, in connection with the exercise of options granted
in prior years, Mr. O'Neill received continuation option
grants covering 427,850 shares at exercise prices ranging
from $53.75 to $56.6875 per share. Continuation grants were
made to the other named officers as follows: Mr. Fischer,
222,936 shares at exercise prices ranging from $43.8125 to
$58.125 per share; Mr. Hoffman, 252,886 shares at exercise
prices ranging from $43.6562 to $57.6875 per share; and
Mr. Hommen, 162,433 shares at exercise prices ranging from
$42.5625 to $57.375 per share. These continuation option
grants have expiration dates which range from July 1997 to
January 2004.
The following table shows all options granted by the
Compensation Committee in 1995 to the named officers. The
price of Alcoa stock must appreciate in order for optionees
to realize any gain. As the stock price increases, all
shareholders benefit proportionately. The potential gain
from future stock appreciation for all Alcoa optionees (over
800 individuals) is less than 2% of the gain to all share-
holders and optionees.
-12-
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
- -----------------------------------------------------------------------------
% of Total Potential Realizable Value at
Number of Options Assumed Annual Rates of Stock
Securities Granted to Exercise Price Appreciation for Option
Underlying Employees or Base Expira- Term (3)
Options in Fiscal Price tion -------------------------
Name Type (1) Granted Year ($/Sh) (2) Date 0% 5% 10%
- ---- ---------- ------- ------ ---------- ---- -- -- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Potential future Alcoa stock price/share (3) . . . . . . . . . . . . . . . $44.44 $72.38 $115.26
P. H. O'Neill Annual 159,400 2.0% $44.438 1/13/05 $ 0 $3,926,710 $9,682,599
Continuation 101,783 1.3 55.313 1/14/04 0 2,704,262 6,484,355
Continuation 8,504 0.1 53.313 1/15/03 0 187,338 437,051
Continuation 89,240 1.1 56.445* 1/15/03 0 2,064,485 4,816,355
Continuation 49,955 0.6 53.750 1/20/02 0 923,733 2,098,984
Continuation 26,383 0.3 54.898* 1/23/01 0 405,577 897,622
Continuation 27,681 0.3 55.188 1/22/00 0 334,661 721,807
Continuation 27,338 0.3 53.750 5/4/99 0 260,070 550,794
Continuation 29,576 0.4 55.188 7/21/98 0 217,149 451,044
Continuation 67,390 0.8 55.131* 6/15/97 0 274,305 554,686
A. J. P. Belda Annual 65,000 0.8 44.438 1/13/05 0 1,601,231 3,948,362
R. L. Fischer Annual 52,800 0.7 44.438 1/13/05 0 1,300,692 3,207,285
Continuation 33,116 0.4 44.000* 1/14/04 0 699,910 1,678,263
Continuation 19,212 0.2 57.375 1/14/04 0 530,271 1,271,852
Continuation 9,799 0.1 55.168* 1/14/04 0 260,061 623,755
Continuation 11,255 0.1 44.007* 1/15/03 0 202,998 473,586
Continuation 6,719 0.1 45.563 1/15/03 0 125,680 293,285
Continuation 13,534 0.2 47.313 1/15/03 0 262,878 613,450
Continuation 27,924 0.3 57.437* 1/15/03 0 658,929 1,537,853
Continuation 5,621 0.1 44.125 1/20/02 0 85,327 193,888
Continuation 15,347 0.2 47.199* 1/20/02 0 249,197 566,247
Continuation 18,717 0.2 57.374* 1/20/02 0 369,436 839,463
Continuation 2,674 0.0 44.125 1/23/01 0 33,040 73,124
Continuation 4,077 0.1 48.313 1/23/01 0 55,156 122,071
Continuation 3,280 0.0 53.688 1/23/01 0 49,311 109,134
Continuation 2,314 0.0 58.125 1/23/01 0 37,663 83,357
Continuation 10,048 0.1 53.688 1/22/00 0 118,178 254,889
Continuation 3,279 0.0 46.688 5/4/99 0 27,095 57,383
Continuation 7,118 0.1 48.313 5/4/99 0 60,864 128,902
Continuation 2,959 0.0 56.563 5/4/99 0 29,622 62,736
Continuation 9,135 0.1 46.389* 7/21/98 0 56,377 117,101
Continuation 178 0.0 48.313 7/21/98 0 1,144 2,376
Continuation 8,194 0.1 56.855* 7/21/98 0 61,978 128,737
Continuation 344 0.0 44.125 7/9/97 0 1,176 2,383
Continuation 4,126 0.1 46.027* 7/9/97 0 14,719 29,814
Continuation 3,966 0.0 57.495* 7/9/97 0 17,673 35,798
R. R. Hoffman Annual 52,800 0.7 44.438 1/13/05 0 1,300,692 3,207,285
Continuation 33,144 0.4 43.990* 1/14/04 0 700,336 1,679,285
Continuation 28,954 0.4 56.937* 1/14/04 0 791,863 1,898,752
Continuation 9,040 0.1 44.092* 1/15/03 0 163,362 381,117
Continuation 22,497 0.3 45.702* 1/15/03 0 421,392 983,089
Continuation 26,536 0.3 49.880* 1/15/03 0 542,484 1,265,592
Continuation 3,119 0.0 57.603* 1/15/03 0 73,635 171,786
Continuation 15,964 0.2 43.966* 1/20/02 0 241,460 548,666
Continuation 6,315 0.1 52.063 1/20/02 0 113,107 257,010
Continuation 8,469 0.1 49.688 1/20/02 0 144,767 328,951
Continuation 10,392 0.1 44.795* 1/23/01 0 130,353 288,496
Continuation 4,096 0.1 52.063 1/23/01 0 59,714 132,160
Continuation 5,622 0.1 49.750 1/23/01 0 78,321 173,340
Continuation 10,721 0.1 47.094* 1/22/00 0 110,608 238,562
-13-
- -----------------------------------------------------------------------------
% of Total Potential Realizable Value at
Number of Options Assumed Annual Rates of Stock
Securities Granted to Exercise Price Appreciation for Option
Underlying Employees or Base Expira- Term (3)
Options in Fiscal Price tion -------------------------
Name Type (1) Granted Year ($/Sh) (2) Date 0% 5% 10%
- ---- ---------- ------- ------ ---------- ---- -- -- ---
R. R. Hoffman
(continued) Continuation 9,643 0.1 57.500 1/22/00 0 121,468 261,986
Continuation 10,482 0.1 46.145* 5/4/99 0 85,608 181,306
Continuation 1,255 0.0 49.750 5/4/99 0 11,051 23,403
Continuation 2,666 0.0 54.313 5/4/99 0 25,627 54,275
Continuation 5,567 0.1 57.688 5/4/99 0 56,839 120,378
Continuation 2,101 0.0 45.313 7/21/98 0 11,358 23,447
Continuation 7,145 0.1 47.313 7/21/98 0 40,330 83,256
Continuation 1,908 0.0 54.313 7/21/98 0 12,363 25,522
Continuation 6,441 0.1 57.500 7/21/98 0 44,184 91,213
Continuation 6,570 0.1 44.472* 7/9/97 0 22,646 45,870
Continuation 4,269 0.1 46.239* 7/9/97 0 15,299 30,989
Continuation 6,165 0.1 49.995* 7/9/97 0 23,889 48,388
Continuation 3,805 0.0 57.500 7/9/97 0 16,957 34,348
J. H. M. Hommen Annual 41,800 0.5 44.438 1/13/05 0 1,029,714 2,539,101
Continuation 26,476 0.3 43.829* 1/14/04 0 557,391 1,336,528
Continuation 7,552 0.1 57.375 1/14/04 0 208,130 499,060
Continuation 15,704 0.2 55.497* 1/14/04 0 418,626 1,003,793
Continuation 3,130 0.0 42.563 1/15/03 0 54,600 125,380
Continuation 22,344 0.3 44.483* 1/15/03 0 407,359 950,351
Continuation 2,716 0.0 55.875 1/15/03 0 62,197 145,104
Continuation 12,828 0.2 50.097* 1/15/03 0 263,388 614,473
Continuation 8,013 0.1 51.452* 1/15/03 0 168,975 394,212
Continuation 10,075 0.1 44.725* 1/20/02 0 155,019 352,247
Continuation 9,363 0.1 51.244* 1/20/02 0 165,063 375,070
Continuation 3,770 0.0 42.648* 1/23/01 0 45,023 99,645
Continuation 1,514 0.0 44.750 1/23/01 0 18,972 41,989
Continuation 3,307 0.0 54.798* 1/23/01 0 50,745 112,309
Continuation 1,396 0.0 52.063 1/23/01 0 20,352 45,043
Continuation 228 0.0 42.688 1/22/00 0 2,132 4,599
Continuation 5,141 0.1 45.438 1/22/00 0 51,173 110,372
Continuation 201 0.0 54.375 1/22/00 0 2,394 5,164
Continuation 4,894 0.1 49.750 1/22/00 0 53,338 115,042
Continuation 4,035 0.1 45.313 5/4/99 0 32,360 68,534
Continuation 3,747 0.0 52.000 5/4/99 0 34,485 73,035
Continuation 3,274 0.0 43.031 7/21/98 0 18,743 38,932
Continuation 503 0.0 45.031 7/21/98 0 3,032 6,298
Continuation 2,894 0.0 54.375 7/21/98 0 20,935 43,485
Continuation 468 0.0 52.000 7/21/98 0 3,238 6,725
Continuation 4,706 0.1 43.072* 7/9/97 0 15,710 31,822
Continuation 4,154 0.1 54.596* 7/9/97 0 17,578 35,605
<FN>
(1) Annual options become exercisable one year after grant,
and continuation options become exercisable after six months.
For all options, optionees may use shares they own to pay the
exercise price and may have shares withheld for taxes.
(2) Data on continuation options reflect consolidation of
certain individual grants into groupings (marked by an *)
based on common expiration date and a spread of grant prices
not exceeding 3% of the lowest price for that option grouping.
Individual continuation grants totaled 12 for Mr. O'Neill;
37 for Mr. Fischer; and 46 each for Messrs. Hoffman and Hommen.
(3) The dollar amounts in the last two columns are the result
of calculations at the 5% and 10% compound annual rates set by
the SEC and are not intended to forecast future appreciation
of Alcoa's stock. The potential future Alcoa stock prices per
share are keyed to the 1995 annual grant. The company did not
use an alternative formula for valuation at grant because it
is not aware of any formula which will determine with reasonable
accuracy a present value based on unknown future factors. The
potential realizable values shown in the table represent future
opportunity and have not been reduced to present value in 1995
dollars. In the opinion of the Compensation Committee,
inclusion of full potential values for continuation options, as
required by the SEC, greatly overstates the value this feature
adds to Alcoa's stock option program.
</TABLE>
-14-
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Number of Securi-
ties Underlying
Unexercised Value of Unexercised
Options at Fis- In-the-Money Options
Shares cal Year-end at Fiscal Year-End
----------------- --------------------
Acquired on Value Exer- Unexer- Exer- Unexer-
Name Exercise (1) Realized (2) cisable cisable cisable cisable
- ---- ------------ ------------ ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
P. H. O'Neill 514,526 $8,603,096 68,874 587,250 $3,607,276 $1,344,938
A. J. P. Belda 0 0 104,090 65,000 1,933,027 545,438
R. L. Fischer 245,360 2,114,622 13,047 159,213 139,565 445,500
R. R. Hoffman 271,929 1,753,674 0 173,361 0 599,672
J. H. M. Hommen 153,010 1,175,899 0 119,037 0 435,107
<FN>
(1) The net number of shares issued to these five
officers was 141,062. The table shows the gross shares
underlying option exercises, as required by SEC rules.
However, most of the shares were not issued, since in
essentially all exercises by these officers, shares were
used to pay the exercise price and shares were withheld
for taxes.
(2) Values were realized in shares and are shown before
reduction for payment of applicable withholding taxes.
Most of the shares received after taxes (all for Mr. O'Neill)
still are owned by the officers.
</TABLE>
Other information
Relationship with independent public accountants
Coopers & Lybrand L. L. P. (Coopers & Lybrand) has been the
independent public accounting firm auditing the financial
statements of Alcoa and most of its subsidiaries since 1950.
In accordance with standing policy, the Coopers & Lybrand
personnel who work on the audit are changed periodically.
In connection with the audit function, Coopers & Lybrand in
1995 reviewed the company's periodic filings with the
Securities and Exchange Commission, prepared or reviewed
special financial or audit reports to lenders and others,
including governmental agencies, and evaluated the effects of
various technical accounting issues. Coopers & Lybrand also
conducted audits and due diligence reviews in connection with
several acquisitions made by the company.
In addition, Coopers & Lybrand provides other professional
services to the company and its subsidiaries. A substantial
portion of these other services involves assistance in tax
planning and preparation of tax returns for expatriate
employees, executives and various foreign locations, and
consultation on accounting and information systems.
The Audit Committee of Alcoa's Board reviews summaries of
the actual services, both audit and non-audit, rendered by
Coopers & Lybrand and the related fees.
Upon recommendation of the Audit Committee, the Board has
reappointed Coopers & Lybrand to audit the 1996 financial
statements. As in past years, representatives of Coopers &
Lybrand will be present at the annual meeting of
shareholders. They will be given the opportunity to make a
statement if they desire to do so, and they will be available
to respond to appropriate questions.
1997 meeting--shareholder proposals
Alcoa's 1997 annual meeting of shareholders will be on May 9,
1997. To enable the Board to adequately analyze and respond
to shareholder proposals, any shareholder proposal to be
presented at that meeting must be received by the secretary
of the company by November 6, 1996 to be timely received for
inclusion in Alcoa's proxy statement for that meeting.
Other matters
The Board of Directors does not know of any other matters
that are to be presented for action at the May 10, 1996
meeting. Should any other matter come before the meeting,
the accompanying proxy will be voted with respect to the
matter in accordance with the best judgment of the persons
voting the proxy.
Barbara Jeremiah
Secretary
-15-
Alcoa
425 Sixth Avenue
Pittsburgh, Pennsylvania 15219-1850
Printed in U.S.A. 9603
Form A07-15721
Graphics Appendix List
Page Where
Graphic Appears Description of Graphic or Cross-Reference
page 4 Photograph of Joseph T. Gorman, Nominee
for Director
page 4 Photograph of Sir Ronald Hampel, Nominee
for Director
page 4 Photograph of John P. Mulroney, Nominee
for Director
page 4 Photograph of Marina v.N. Whitman, Nominee
for Director
page 5 Photograph of Sir Arvi Parbo, Continuing
Director
page 5 Photograph of Henry B. Schacht, Continuing
Director
page 5 Photograph of Forrest N. Shumway,
Continuing Director
page 5 Photograph of Franklin A. Thomas,
Continuing Director
page 6 Photograph of Kenneth W. Dam, Continuing
Director
page 6 Photograph of John P. Diesel, Continuing
Director
page 6 Photograph of Judith M. Gueron, Continuing
Director
page 6 Photograph of Paul H. O'Neill, Continuing
Director
page 9 Comparison of five-year cumulative total
return
To Fellow Alcoa Shareholders:
Your 1996 Alcoa proxy card is attached below. Please read
both sides of the card, and vote, sign and date it. Then
detach and return it promptly using the enclosed envelope. We
urge you to vote your shares.
You are invited to attend the annual meeting of shareholders
on Friday, May 10, at 9:30 a.m. in the Grand Ballroom of the
Westin William Penn Hotel in Pittsburgh, Pennsylvania.
If you plan to attend the meeting, please check the
appropriate box on the proxy card. Then detach and retain
the admission ticket which is required for admission to the
meeting.
Thank you in advance for voting.
/s/Barbara Jeremiah
Barbara Jeremiah
Secretary
Shareholder comments about any aspect of company business are
welcome. Although such comments are not answered on an
individual basis, they do assist Alcoa management in
determining and responding to the needs of shareholders.
(Detach and return with your proxy card in the enclosed
envelope)
Alcoa
425 Sixth Avenue
Pittsburgh, PA 15219-1850
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
The undersigned shareholder hereby authorizes Howard W.
Burdett, Earnest J. Edwards and Russell W. Porter, Jr.,
or any one or more of them, with power of substitution to
each, to represent the undersigned at the annual meeting
of shareholders of Aluminum Company of America scheduled
for Friday, May 10, 1996, and any adjournment of the
meeting, and to vote the shares of stock which the
undersigned would be entitled to vote if attending the
meeting, upon the matters referred to on the reverse side
of this card and in accordance with the best judgment of
such persons upon other matters as may properly come
before the meeting or any adjournment of the meeting.
As described more fully in the proxy statement, this card
votes or provides voting instructions for shares of
common stock held under the same registration in any one
or more of the following manners: as a shareholder of
record, in the Alcoa Dividend Reinvestment and Stock
Purchase Plan and in Alcoa's employee savings plan.
If you plan to attend the annual meeting, please check
the box below.
/ / I will attend the annual meeting
(continued on the other side)
(continued from the other side)
(detach and return in the enclosed envelope)
PROXY
Please specify your choices by clearly marking the
appropriate boxes. Unless specified, this proxy will be
voted FOR item 1.
DIRECTORS RECOMMEND A VOTE FOR ITEM 1
1. Election of Directors for a three-year term:
Nominees are: Joseph T. Gorman, Sir Ronald Hampel,
John P. Mulroney, Marina v.N. Whitman
/ / FOR all listed nominees
/ / WITHHOLD vote for all listed nominees
/ / WITHHOLD vote only from __________________
PLEASE VOTE, SIGN, DATE AND RETURN
_______________________________ Date______________ 1996
(Sign exactly as name appears above, indicating position or
representative capacity, where applicable)
