AVD American Vanguard Corporation

Please also see the Compensation Committee Report on page 21 of this Proxy.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is currently composed of M. Esmail Zirakparvar (Chairperson), Scott D. Baskin, and Morton D. Erlich. The Board has determined that all members of the Nominating and Corporate Governance Committee are independent directors under the applicable rules and listing standards currently prescribed by the New York Stock Exchange. The Nominating and Corporate Governance Committee held three meetings during the year ended December 31, 2016.

The responsibilities of the Nominating and Corporate Governance Committee are set forth in the current Nominating and Corporate Governance Committee Charter, which is available on the Company’s website ( www.american-vanguard.com ), and include:

Finance Committee

The Finance Committee is currently composed of Alfred F. Ingulli (Chairperson), Lawrence S. Clark, Debra F. Edwards, John L. Killmer, and M. Esmail Zirakparvar. The Finance Committee held nine meetings during the year ended December 31, 2016.

The responsibilities of the Finance Committee are set forth in the current Finance Committee Charter, which is available on the Company’s website ( www.american-vanguard.com ) and involves, among other things:

Risk Committee

The Risk Committee is currently composed of Scott D. Baskin (Chairperson), Debra F. Edwards and M. Esmail Zirakparvar. The Risk Committee held four meetings during the year ended December 31, 2016. All members of the Board typically attend Risk Committee meetings. The primary responsibility of the Risk Committee is to oversee risk management at the Company and to ensure that the Company continuously monitors material risks, identifies mitigation measures for those risks, and takes commercially practicable measures to minimize those risks to the fullest extent possible. The committee works with the Company’s Risk Manager and senior management to conduct (or cause to be conducted) periodic assessments of the Company’s risk profile and to ensure the following:

9

REPORT OF THE AUDIT COMMITTEE

The responsibilities of the Audit Committee, which are set forth in the Audit Committee Charter, include providing oversight to the Company’s financial reporting process through periodic meetings with the Company’s independent registered public accounting firm and, with management, to review accounting, auditing, internal controls and financial reporting matters. The management of the Company is responsible for the preparation and integrity of the financial reporting information and related systems of internal controls. The Audit Committee, in carrying out its role, relies on the Company’s senior management, including senior financial management, and its independent registered public accounting firm.

We have reviewed and discussed, with senior management, the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K (for the year ended December 31, 2016) for filing with the Securities and Exchange Commission. Management has confirmed to us that such financial statements (i) have been prepared with integrity and objectivity and are the responsibility of management and (ii) have been prepared in conformity with accounting principles generally accepted in the United States of America.

We have discussed with BDO USA, LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees (“AS 1301”), issued by the Public Company Accounting Oversight Board. AS 1301 requires our independent registered public accounting firm to provide us with additional information regarding the scope and results of their audit of the Company’s financial statements, including with respect to (i) their responsibility under generally accepted auditing standards, (ii) significant accounting policies, (iii) management judgments and estimates, (iv) any significant audit adjustments, (v) any disagreements with management, and (vi) any difficulties encountered in performing the audit.

We have received from BDO USA, LLP, a letter of independence providing the disclosures required by Rule 3526, “Communication with Audit Committee Concerning Independence” with respect to any relationships between BDO USA, LLP and the Company that in their professional judgment may reasonably be thought to bear on independence. BDO USA, LLP has discussed its independence with us, and has provided written confirmation that, in its professional judgment, it is independent of the Company within the meaning of the federal securities laws.

Based on the review and discussions described above with respect to the Company’s audited consolidated financial statements, we recommended to the Board of Directors, and the Board of Directors agreed, that such financial statements be included in the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

As specified in the Audit Committee Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and in accordance with accounting principles generally accepted in the United States of America. That is the responsibility of management and the Company’s independent registered public accounting firm. In addition, it is not the responsibility of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent registered public accounting firm, or to assure compliance with laws and regulations and the Company’s Code of Conduct and Ethics. In giving our recommendation to the Board of Directors, we have relied on (i) management’s representation that such financial statements have been prepared with integrity and objectivity and in conformity with accounting principles generally accepted in the United States of America, and (ii) the report of the Company’s independent registered public accounting firm with respect to such financial statements.

AUDIT COMMITTEE

Morton D. Erlich, Chair

Scott D. Baskin

Lawrence S. Clark

Alfred F. Ingulli

April 21, 2017

10

11

To the knowledge of the Company, the ownership of the Company’s outstanding Common Stock, as of March 24, 2017, by persons who are directors and nominees for directors, the executive officers of the Company named in the Summary Compensation Table, and by all directors and officers as a group is set forth below. Unless otherwise indicated the Company believes that each of the persons set forth below has the sole power to vote and to dispose of the shares listed opposite his name.

12

SECTION 16(a) REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s executive officers, directors, and persons who own more than ten percent of a registered class of the Company’s equity securities to file reports of ownership and changes in ownership with the SEC.

Based solely on the Company’s review of the copies of such forms received by the Company, or representations obtained from certain reporting persons, except as described below, the Company believes that during the year ended December 31, 2016, all Section 16(a) filing requirements applicable to its executive officers, directors, and greater than ten percent beneficial stockholders were complied with.

EMPLOYEE COMPENSATION AND ENTERPRISE RISK

The Company has concluded that its compensation policies and practices do not give rise to any risk that is reasonably likely to have a material adverse effect upon it. In reaching its conclusion, the Company has found, among other things, that all business units have a similar compensation structure and that no business unit bears a disproportionate share of the overall risk profile, profits or revenues. To the extent that a function carries a unique risk, we have attempted to mitigate that risk with one or more countervailing risk mitigation objectives. For example, in manufacturing and technology, the objective of implementing processes for new chemistries is offset by the paramount objective of safety in the workplace and surrounding communities. In sales and marketing, the objective of achieving top line sales is offset by goals for maintaining profit margins. Similarly, the risk of spending excessive amounts in acquiring a product line or new technology is offset by objectives to realize certain minimum returns on investment. Risk is further mitigated by the use of long-term incentives which encourage prudent, long-term decision making. Finally, compensation for senior executives and, derivatively, the entire workforce is subject to achievement of Company-wide financial objectives within the SMARTgoals (as defined on page 14) established by the Board and management annually.

13

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Objectives

Our executive compensation program has three primary objectives: to provide compensation on the basis of performance that supports key financial and strategic business outcomes; to attract, motivate and retain top talent to lead our business; and to align management’s interests with the long-term interests of stockholders.

Our first objective, to provide compensation on the basis of performance that supports the key financial and strategic business outcomes, means that we want our executives to seek optimal results in both the short and long term. One of the primary means of rewarding performance is through cash incentive compensation. Another means is through performance-based equity, which requires that the Company attain certain measures of financial success (i.e., pre-tax earnings, net sales, and total shareholder return) as compared to its industry peers. Our second objective, to attract, motivate and retain top talent to lead our business, is accomplished through ensuring that our compensation is competitive (as, for example, through benchmarking the compensation practices of similarly-situated companies) and offering multi-year vesting, to promote the retention of key talent, in the form of stock that cliff vests in three years.  Our third objective, to align management’s interests with the long-term interests of stockholders, is accomplished by ensuring that our executives are stockholders. We do this through the regular award of equity, whether in the form of restricted stock, options or performance-based shares/options, and the adoption of executive stock ownership guidelines.  We make these equity awards through our stock incentive plan, for which we are seeking approval for amendment and restatement at the 2017 Annual Meeting.

What We Reward

We expect our executives to operate at a high level and to be involved in setting and executing our business plan. Accordingly, our executives are directly involved in defining the Company’s strategy (its roadmap to success), its budget (the short term business plan), and the associated short term objectives which are established as necessary to achieve the budget (our “SMART” goals, which are Specific, Measurable, Achievable, Realistic and Time-Based). SMARTgoals are the primary measure to which each executive is held accountable.  They vary from position to position and include both company-wide goals (as, for example, net sales and net income for the CEO) and individual goals (for example, factory efficiency targets for the VP of Manufacturing).  In addition to these goals, which drive overall Company performance, we also expect our executive team to respond to changing market conditions, to solve unforeseen problems and to show leadership and initiative.  

14

Compensation Program Best Practices

The Compensation Committee continues to implement and maintain leading practices in our executive compensation program and related areas.  Our current compensation program includes features that we believe drive performance and excludes features we do not believe serve our stockholders’ long-term interests. The table below highlights the “Sound Practices” features that our compensation program includes and “Poor Pay Practices,” which are excluded.  Certain of these features are described in greater detail prosaically after the table.

15

Since 2014, in making equity awards to executive officers, the Company has followed the practice of splitting those awards equally between time-based restricted stock (having a three-year, cliff-vesting period) and performance shares based upon targets for net sales, pre-tax income and total stockholder return as compared to certain peer companies.  While awarding time-based restricted stock alone does serve to encourage executives to remain with the Company, including a meaningful award of performance shares serves to motivate senior management to achieve financial targets over a multi-year performance period.  In addition, the TSR component aligns payouts with the stockholders’ experience, as the Company must perform in a manner consistent with similar investment opportunities for vesting targets to be achieved.  The performance awards also provide that the awardee may earn up to 200% of the target number of shares in the event that the Company has outperformed the targeted metrics.

The Company continues to follow a policy of placing individual limits on each executive’s incentive compensation. Specifically, the CEO is limited to 1.6 times his annual salary, while the other NEOs are limited to one times his or her annual salary.  Even prior to the adoption of these caps, our incentive compensation awards had not ever exceeded these limits.  Nevertheless, the Compensation Committee has put these caps in place both to eliminate the possibility that any one individual will receive an excessive share of the bonus pool and to prevent windfall payments in the event that unforeseen circumstances result in goals being drastically exceeded.

The Company also continues to follow a clawback policy that provides, “subject to the restrictions of applicable law, in the event of material fraud or misconduct leading to a restatement of the Company’s financial statements, the incentive compensation of executives found to be complicit in such material fraud or misconduct may be recouped in whole or in part by the Board of Directors after a hearing on the matter; provided, however, that if the subject executive does not agree with the outcome of such hearing, prior to instituting litigation, the parties shall promptly refer the matter to mediation.” We believe that, this policy serves multiple purposes.  First, it sends a strong message to senior management that the Company is committed to the highest standards of legal compliance and accounting discipline.  Second, by placing paid compensation at risk, it serves as an additional incentive to senior management to live up to this commitment.  And third, the policy should help contribute to stockholders’ peace of mind that the Company is doing all that it can to ensure accuracy and completeness in its financial reporting.

Under the Company’s stock ownership and stock retention policy, the CEO is required to obtain and maintain four times his base wage in common stock, and Section 16 officers are similarly required to obtain and maintain two times their base wage in Company common stock.  This is to be accomplished, in part, through periodic grants of equity by the Board. For purposes of calculating the value of shares under the policy, the Company includes shares purchased on the open market, shares acquired through option exercise, vested restricted shares and vested but unexercised options.  Similarly, as more fully described in page 29 under “Director Compensation,” non-management directors are required to accumulate and maintain shares equal in amount to the number of shares granted to them during the first four full years of service on the Board.  Through these policies, the views of both executive officers and directors are better aligned with those of our stockholders.

The Company’s Anti-Hedging Policy prohibits both directors and Section 16 officers  from both hedging and other non-monetized transactions, such as zero-cost collars, forward sales contracts or other similar instruments which allow a person to lock in much of the value of his or her stock holdings, generally in exchange for all or part of the potential for upside appreciation in the stock. The Company believes that such instruments place the subject shares at risk of unexpected disposition (as, in the case of a call or foreclosure) and change the essential nature of the investment in common stock, thus serving to misalign the holder’s interests from those of the Company’s stockholders.

Compensation Consultant Independence

As per NYSE Listing Standard 303A.05(c)(iv), the charter of the Compensation Committee requires that committee to evaluate the independence of its compensation consultants.  Accordingly that committee evaluated  its compensation

16

consultant, Exequity LLP, in 2016 and determined that that there is no conflict of interest with that firm and that with respect to the six factors set forth in the listing rules, Exequity was independent as indicated by the following:

We believe that, by ensuring the independence and objectivity of our compensation consultant, we provide an additional assurance that the consultant will not be influenced by improper motives, such as personal gain that could compromise its ability to recommend a fair and transparent plan of compensation for Company executives.

Consideration of “Say on Pay” Advisory Vote for Past Three Years

At each of the last three Annual Meetings of Stockholders, we have held an advisory stockholder vote on executive compensation. For the years 2013, 2014 and 2015, approximately 97%, 97% and 90%, respectively, of the shares that voted approved our executive compensation described in the subject proxy statement. The Compensation Committee and the Company viewed these results as a strong indication that the Company’s stockholders support the compensation policies and practices of the Company over this period.  Further, in the interest of keeping apprised of stockholders’ views, the Company maintains a plan of regular outreach to investors, potential investors and analysts who cover the Company’s stock.  This is done through personal meetings, telephone conversations and attendance at investment conferences.  Our Director of Investor Relations regularly briefs the Company’s Board of Directors on how stockholders view the Company, their areas of concern and suggestions for improving operations or financial performance.

The following sections further explain our rationale for our compensation practices during the last fiscal year.

Elements of 2016 Compensation

In order to cover this topic, it is useful to understand the business conditions and financial performance of the Company leading up to 2016. As reported by the Company in its public filings, 2015 was a period of modest recovery for the Company.  It followed an industry downturn that began with the Midwest corn market in 2013 and led to lower demand for corn products and excess inventory in the distribution channel.  In response to these conditions, management began to implement tactics to methodically reduce channel inventory, while continuing to protect brand value and  manage working capital and operating expenses.  As a result of these efforts, management drove down year-end inventory from $166million in 2014 to $136million in 2015, factory under absorption costs from $25million to $19million, and operating expenses from $108million to $100million. During 2015, the Company completed two product line acquisitions, while reducing overall corporate indebtedness from $98million to $68million.  In the midst of stagnant conditions domestically in 2015, the Company showed better performance compared to the industry with recorded net sales of $289million (down 3% from the prior year), net income of $6.6million (up 36% from the prior year) and gross margin up one percent.

17

During 2016, the Company outperformed 2015 in virtually every respect, despite continued declining net sales and profitability among agrichemical companies.  The Company’s net sales increased about 8% (fro m $289million in 2015 to $312million in 2016) and net income was up about 94% (from $6.6million in 2015 to $12.8million in 2016).  These results were due to several factors.  First, we enjoyed stable demand for our products in many markets (including potat oes, fruits and vegetables and peanuts) and increased sales into international markets, due in part to our 2015 product line acquisitions.  Second, with inventory of corn products in the distribution channels approaching near normal levels, the Company enj oyed increased sales in the Midwest corn market.  Third, we continued to exercise financial discipline in controlling costs, managing working capital and optimizing our factory usage in light of increased demand.  We were able to reduce year-end inventory levels from $135million in 2015 to $121million in 2016.  Further, factory under absorption costs dropped from $19million in 2015 to $17million in 2016, and, as a result, gross margins improved from 39% in 2015 to 41% in 2016.  Operating expenses increased with sales and other long term development activities, but remained at 35% of net sales.    Further, the Company used the cash generated from operations to pay down debt, thereby reducing year-end debt from $68.3million in 2015 to $41million in 2016 and in creasing our borrowing capacity from $68million to $105million under our senior credit facility.  

With respect to TSR, the Company’s performance in 2016 was above the median for the one year period as compared to companies within GICS 1510 as well as that of S&P Index peers.  In effect, the market recognized the Company’s continued financial performance in 2016 and stockholders benefitted accordingly.  With respect to the three-year and five-year TSR, the Company’s performance was below the median for both GICS 1510 and S&P Index peers.  However, it should be noted that, among public companies that materially participate in the agrichemical sector, the Company’s three-year TSR was above the median.  As mentioned above, the agrichemical sector has been in a downcycle since 2013, and the Company has been able to generate improved performance in spite of these conditions.  

Below we discuss the components of executive compensation for 2016 in light of these conditions.

Salaries — As is the case with virtually all public companies, our executives received a salary as part of their compensation package in 2016. Base salary for our CEO was 51% of total cash compensation in 2016.  Among NEOs who worked for the entire fiscal year (and received incentive compensation), base salary was approximately 68% of total cash compensation in 2016. This compares to an average among all NEO’s of about 81% in 2015, when a modest bonus was paid in light of moderately improved performance, and 100% in 2014, when no bonus was paid in light of poor financial performance.  As per the Company’s standard practice, the 2016 salaries were set in December of 2015.  In light of 2014 financial performance and in the interest of minimizing operating expenses, however, 2015 salaries were frozen in 2015.  With improved performance in 2015, 2016 salaries were increased for all but one of the NEOs by about 2.5%, in keeping with the 3% annual increase that is prevalent among public companies.  The CFO received a salary increase of about 7.5% in the interest of ensuring continued retention and in light of his consistently high performance, particularly in the area of controlling working capital and managing expenses through 2015.  The fact that salaries were not increased in 2015 demonstrates that such increases are not considered to be a form of entitlement but rather are a function of performance.  It should also be noted that the Company has historically raised salaries in excess of a modest adjustment when an executive takes on additional responsibilities. 

Incentive Compensation — In 2016, as in prior years, executives were eligible to receive annual incentive compensation in the form of a cash bonus.  Unlike salary, the cash bonus is “at risk” and varies from year to year depending upon many factors. The main reason for this element of compensation (which is typically paid in March of the subsequent year) is to reward the executive for Company performance and the executives’ individual contributions during the immediately prior year. As a general rule, assuming the Company achieves pre-tax income in in an amount equal to at least one-half of the amount forecasted in the budget for the subject year, the Company reserves 10 percent of its pre-tax income to serve as the pool from which incentive compensation may be paid.  From that pool, the Compensation Committee may, but is not obligated to, pay bonuses to some or all of the employee population. At year end, the Compensation Committee evaluates Company performance (including net sales, net income, indebtedness, and working capital measures).  If these measures fall short of the Company’s budget, then the Committee may reduce the pool at its discretion.

After determining whether any of the bonus pool will be distributed, the Committee works with the CEO and CAO, who recommend an allocation of bonuses among individuals based upon their performance.  Further, the CEO and CAO jointly review the performance of the Company’s executive officers and present their findings to the Committee.  The Committee then exercises its own discretion in setting an allocation for the CEO and considers the CEO’s recommended awards for others; in so doing, the Committee takes into account the executive’s achievement of his or her SMART goals as well as other contributions to the overall Company performance.  As mentioned above, the Company caps individual incentive awards for executive officers, limiting the CEO to 1.6 times salary and other NEOs to 1 times salary.  The

18

Company has not established specific targets for calculating incentive compensation for NEOs from year-to-year.  As a threshold matter, to the extent that the Company’s pre-tax income is less than one-half of forecasted  pre-tax income, the NEOs have typically received no bonus (as was the case in 2014).  To the ext ent that pre-tax income exceeds one-half of the forecast, the bonus accrual is proportionately larger, and NEO compensation has also increased.  Historically speaking, over the past five years, the CEO’s annual bonus has ranged from a low of zero (in 2014)   to a high of 98% of base wage in 2012, while that of NEO’s other than the CEO has ranged from a low of zero (in 2014) to a high of about 73% of base wage in 2012.  

In order to motivate the executive team to exceed budgeted financial performance in 2016, the Compensation Committee provided that, to the extent pre-tax income exceeded that set forth in the 2016 budget, the Company could reserve 30 percent of pre-tax income to add to the incentive bonus pool.  The Committee provided further that, to the extent the pool were to reach $5million in size, then the reserve would drop back to 10 percent of pre-tax income.  As mentioned above, the Company’s financial performance in 2016 outpaced that of 2015 in nearly all respects.  Over the course of 2016, the NEOs greatly exceeded their goals with respect to profitability (including both pre-tax income and net income) and exceeded their goals relating to working capital, factory efficiency, debt, cash flow, gross margin, and general improvement of the balance sheet.  With the improvement in pre-tax profit, the Company was able to set aside a larger incentive pool (as compared to 2015) and the Committee awarded increased incentive bonuses to the executives, in recognition of stronger financial performance.  

Equity —We believe that in providing equity to senior executives and requiring that a shares equal in value to a multiple of base salary be accumulated by such executives over time, the interests of our executives will be more fully aligned with those of our stockholders. The Company has adopted a policy to prohibit short sales or hedging transactions by executives and members of the Board. Through these awards and these policies, the Company believes that executives will take a longer view of the Company and will seek to enhance stockholder value several years into the future. Equity awards also serve as a means of encouraging future performance and of retaining key employees over the long term. In addition, it is highly prevalent among peer companies to award equity to executives regularly. In the Company’s case, these awards are typically made early in the fiscal year.  We believe that it would be difficult to attract, motivate, and retain executives without offering them a share in the Company’s long term prospects.

As more fully described below in “Benchmarking and the Compensation Consultant,” the Compensation Committee periodically conducts a benchmarking study to take into account, among other things, the prevalence (by amount and type) of equity awarded to executive officers of similarly situated companies.  These studies typically include information on prevalent rates at which available shares are consumed under equity plans of peers.  In awarding equity, the Board considers not only these studies, but also the compensation history of the Company, retention issues, and the burden of expensing equity awards.  For example, in light of the fact that no incentive compensation was paid for 2014 performance and a reduction in force was conducted in December of that year, in the interest of ensuring retention, the Board pulled its 2015 equity award forward in time and granted restricted stock to executive officers in December 2014.  Accordingly, the Board awarded no equity to executive officers in 2015 (except for then new-hire, Ulrich Trogele).  In 2016, the Board resumed its normal schedule and awarded equity in March 2016 in the form of one-half time-based restricted shares and one-half performance shares.  However, at management’s request, in the interest of minimizing expenses, the award among NEOs was on average between one-third and one-half of the median equity awards for executives in comparable positions at peer companies (Proxy Peers, as defined below).  

Other Benefits —In 2016, the Company continued to offer a comprehensive suite of other benefits to its executives, including group health (medical, dental and vision) and life insurance to all of our employees, including key executive officers. Our medical plan takes the form of PPO programs which are largely self-funded.  However, the Company limited its claims exposure by maintaining stop loss coverage on an individual basis and placed its third party administration with a nationally-known insurance carrier. Health benefits premiums were highly-subsidized by the Company and offered extremely competitive terms (e.g., low co-payments and office visit charges). As a corollary to the group health plan, the Company continued to promote wellness through a voluntary program, through which the Company gives financial incentives for fitness, participation in group events (e.g., 5K, walking, yoga), and diet planning, among other things.  These programs are a powerful tool in recruiting and not only raise morale, but also serve to ensure the continued health of the workforce. Our executives also enjoyed life insurance and long term disability insurance coverage. In addition, certain executives received an automobile allowance and, in the case of the CEO, reimbursement for other perquisites (e.g., country club membership) that provide a venue for the cultivation of business relationships.

Finally, in 2016, our executives (and, in fact, any full time employee) continued to have the option to participate in the Company’s 401K retirement savings plan, under which the Company matches up to 5% of the participant’s salary (subject to

19

an annual cap) and the Employee Stock Purchase Plan, which permits the purchase of Company shares at a discount through payroll deduction.

Benchmarking and the Compensation Consultant

During 2016 the Compensation Committee retained independent compensation consultant, Exequity, to update the group of comparator companies for purposes of benchmarking 2016 compensation.  Exequity conducted these studies in both March and September of 2016.  In connection with those efforts, Exequity defined a group of comparators, consisting of 14 publicly traded specialty chemical companies having similar revenues (ranging between $179 million and $940 million per annum) and market capitalization (ranging between $105 million and $2.25 billion with a median of $530 million). As an additional point of reference, Exequity also used Mercer’s 2015 Benchmark Database Survey filtered for companies with revenues of $100 million to $400 million per annum.  In defining the comparator group, Exequity focused on product lines, Global Industry Classification Standard  numbers, and a proxy review to determine whether and to what extent peer companies identified the Company (or others in the Company’s peer group) as comparators.  The comparator group (“Proxy Peers”) identified by Exequity included Aceto Corporation (ACET), Balchem Corporation (BCPC), Calgon Carbon Corporation (CCC), Chase Corporation (CCF), Hawkins, Inc. (HWKN), Innophos Holdings Inc. (IPHS), Innospec Inc. (IOSP), Intrepid Potash, Inc. (IPI), KMG Chemicals, Inc. (KMG), Landec Corporation (LNDC), LSB Industries, Inc. (LXU), OMNOVA Solutions, Inc. (OMN), Quaker Chemical Corporation (KWR) and Trecora Resources (TREC).  It should be noted that American Vanguard is the only publicly traded crop protection Company of its size, and, with the exception of Aceto Corporation (which has a small percentage of net sales arising from crop protection products), no Proxy Peers operate at all in the crop protection sector.

Using the Proxy Peers as a reference point, the Company found that its 2016 CEO compensation yielded the following comparative results.

On average, according to the Exequity study, compensation for other NEOs yielded the following results.  Salary was in the second quartile of actual salaries for Proxy Peers, annual incentive compensation and total direct compensation was between the 50 ^th and 75 ^th percentile of target for Proxy Peers, and equity was below the 25 ^th percentile of target equity for such peers.

Closing Comments

The Company believes that its executive compensation meets its primary objectives.  In 2016, the Company’s financial performance improved.  Net sales were up by 8% in a challenging market, and gross margin improved by two percent, while net income nearly doubled.  In addition, management outperformed in improving its balance sheet and working capital, inventory, factory under absorption costs, and debt. Further, the Company’s borrowing capacity improved from $68MM to $105MM year-over-year.  This represents the second straight year of improved financial performance and contrasts with the agrichemical industry which, on average, has experienced declining sales and profitability for the same period.  In light of improved profitability and working capital (in excess of target), the NEOs received increased incentive compensation which was at or somewhat above that of Proxy Peers.  However, taken together with equity awards that were below the 25 ^th percentile for that peer group, total compensation for the NEOs was at about the median.  In short, NEOs received improved pay for improved performance and, in any event, remained within a reasonable range as compared to its Proxy Peers.  For these reasons, the Company believes that we continue to pay for performance.

20

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402 (b) of Regulation S-K with management and, based on the review and discussions referred to in that Item, the Committee recommended to the Board that the Compensation Discussion and Analysis be incorporated by reference in the Form 10-K.

Lawrence S. Clark, Chair

Morton D. Erlich

Alfred F. Ingulli

21

EXECUTIVE OFFICERS OF THE COMPANY

The following persons are the current NEOs of the Company:

Eric G. Wintemute has served as a director of the Company since June 1994. He was appointed Chairman and CEO in June 2011. Mr. Wintemute has also served as President and CEO from July 1994 until June 2011, after having been appointed Executive Vice President and COO of the Company in January 1994.

Ulrich G. Trogele has served as Chief Operating Officer of AMVAC Chemical Corporation, the Company’s principal operating subsidiary, since January 2015. Prior to joining the Company, Mr. Trogele spent 28 years in positions of increasing responsibility within the agribusiness sectors of agrochemicals, biologicals and plant nutrition.  His career included 10 years at FMC Corporation, as President of Asia-Pacific and several years as North American Area Director for FMC’s agricultural solutions business.

David T. Johnson has served as Vice President, CFO, and Treasurer of the Company since March, 2008. Mr. Johnson served as Finance Director for Amcor Flexibles UK Ltd., a $500 million manufacturer of decorative packaging and a subsidiary of Amcor, a multibillion dollar corporation based in Australia, from June 2003 through March 2008. Prior to that he served as Vice President of Finance for Sterer Engineering, a subsidiary of Eaton Aerospace, an $8 billion Cleveland based multinational Company from April 2001 through June 2003.

Ad de Jong has served as Managing Director of AMVAC Netherlands BV since July 2012. Prior to joining AMVAC, Mr. de Jong held positions of increasing responsibility over a 23 year period at Chemtura Corporation culminating with the position of Vice President Crop Protection for Europe/Middle East/Africa. Prior to his service at Chemtura, Mr. de Jong served in the advisory service with the Dutch Ministry of Agriculture.

Timothy J. Donnelly has served as Chief Administrative Officer, General Counsel and Secretary of the Company since June 2010.  He began his service with the Company in October 2005 as Vice President, General Counsel & Assistant Secretary, was appointed Secretary in June 2007 and assumed responsibility for Human Resources and Risk Management in 2009.  Prior to his work with the Company, from September 2000 through October 2005, Mr. Donnelly served as Vice President, General Counsel and Secretary for DDi Corp. (Nasdaq—DDIC) a manufacturer of quick-turn, high-technology printed circuit boards.

22