UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

(Rule 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

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

Check the appropriate box:

Cabot Corporation

(Name of Registrant as Specified In Its Charter)

Payment of Filing Fee (Check the appropriate box):

January 26, 2018

Dear Fellow Cabot Corporation Stockholders,

You are cordially invited to attend the Annual Meeting of Stockholders of Cabot Corporation, which will be held on Thursday, March 8, 2018, at 4:00 pm, Eastern Time, at the Corporate Headquarters of Cabot Corporation, Two Seaport Lane, Suite 1300, Boston, Massachusetts.

At the Annual Meeting, we will ask you to elect four members of our Board of Directors, provide your advisory approval of our executive compensation, and ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for our fiscal year ending September 30, 2018. We will also discuss any other business matters properly brought before the meeting. The attached Proxy Statement explains our voting procedures, describes the business we will conduct, and provides information about the Company that you should consider when you vote your shares.

We are using the “Notice and Access” method of providing proxy materials to you via the Internet. We are mailing to you a Notice of Internet Availability of Proxy Materials (the “Notice”) instead of a paper copy of the proxy materials and 2017 Annual Report. Notice and Access provides a convenient and environmentally friendly way for you to access Cabot’s proxy materials. The Notice includes instructions on how to access our proxy statement and our 2017 Annual Report and how to vote your shares. The Notice also contains instructions on how to receive a paper copy of the proxy materials and our 2017 Annual Report, if you prefer.

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

Thank you for your continued support of Cabot Corporation.

Sincerely,

SEAN D. KEOHANE

President and

Chief Executive Officer

Notice of Annual Meeting of Stockholders

This notice and proxy statement are first being made available to stockholders on or about January 26, 2018. Our 2017 Annual Report is available at http://www.cabotcorp.com/2018annualmeeting.

By order of the Board of Directors,

Jane A. Bell

Secretary

Boston, Massachusetts 02210-2019

January 26, 2018

Table of Contents

About the Annual Meeting

Cabot Corporation

Two Seaport Lane, Suite 1300

Boston, Massachusetts 02210-2019

Proxy Statement

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

About the Annual Meeting

Who is soliciting my vote?

The Board of Directors of Cabot Corporation is soliciting your vote at the 2018 Annual Meeting of Stockholders (“2018 Annual Meeting” or the “meeting”).

What am I voting on?

You are voting on:

How does the Board recommend that I vote my shares?

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

Who is entitled to vote?

Only stockholders of record at the close of business on January 16, 2018 will be entitled to vote at the 2018 Annual Meeting. As of that date, there were 61,803,493 shares of our common stock outstanding. Each share of common stock is entitled to one vote. There is no cumulative voting.

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

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

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

CABOT CORPORATION    1

About the Annual Meeting (continued)

providing a timely and convenient method of accessing the materials and voting. On January 26, 2018, we will begin mailing a “Notice of Internet Availability of Proxy Materials” (the “Notice”) to participating stockholders. The Notice includes instructions on how to access our proxy statement and our 2017 Annual Report and how to vote your shares. The Notice also contains instructions on how to receive a paper copy of the proxy materials and our 2017 Annual Report, if you prefer.

How many votes must be present to hold the meeting?

Your shares are counted as present at the 2018 Annual Meeting if you attend the meeting and vote in person or if you properly return a proxy by Internet, telephone or mail. In order for us to hold our meeting, holders of a majority of our outstanding shares of common stock as of January 16, 2018 must be present in person or by proxy at the meeting. This majority is referred to as a quorum. Proxy cards or broker voting instruction forms that reflect abstentions and broker non-votes will be counted as shares present to determine whether a quorum exists to hold the 2018 Annual Meeting.

What is a broker non-vote?

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

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

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

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

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

Each of the nominees is an incumbent director who has tendered a conditional resignation that is effective upon (i) the failure to receive a majority of the votes cast for his or her re-election at the 2018 Annual Meeting and (ii) the Board’s acceptance of this resignation. The Governance and Nominating Committee of the Board of Directors (the “Governance Committee”) is responsible for initially considering the resignation and making a recommendation to the Board of Directors. The director whose resignation is under consideration is expected to abstain from participating in any decision regarding his or her resignation. The Governance Committee may consider any factors it deems relevant in deciding whether to accept a director’s resignation. If the resignation is not accepted, the director will continue to serve until his or her successor is elected and qualified.

2    CABOT CORPORATION

About the Annual Meeting (continued)

How do I vote?

You can vote either in person at the meeting or by proxy without attending the meeting. Even if you plan to attend the 2018 Annual Meeting, we encourage you to vote your shares by proxy. If your shares are held in “street name” in a brokerage account or by a bank or other nominee and you wish to vote in person at the meeting, you must request a legal proxy from your bank, broker or other nominee and bring that proxy to the meeting. Stockholders who own shares in their own name (a record owner), have three options for submitting their votes by proxy:

Proxies submitted by the Internet or telephone must be received by 1:00 p.m., Eastern Time, on March 8, 2018.

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

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

If you hold your stock through the Cabot 401(k) plan, you have the right to instruct the trustee of the plan how to vote your shares. The trustee will have the voting instructions of each participant in the plan tabulated and will vote the shares of the participants by submitting a final proxy card representing the plan’s shares for inclusion in the tally at the 2018 Annual Meeting.

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

In order for your instructions to be followed, you must provide instructions for the shares you hold through the Cabot 401(k) plan by returning your completed and signed proxy card to the Company’s transfer agent by March 5, 2018 or by voting over the telephone or the Internet by 9:00 a.m., Eastern Time, on March 6, 2018.

Can I change or revoke my vote?

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

Who counts the votes?

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

CABOT CORPORATION    3

About the Annual Meeting (continued)

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

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

Can other matters be decided at the 2018 Annual Meeting?

We are not aware of any other matters that will be considered at the 2018 Annual Meeting. If any other matters properly arise that require a vote, the named proxies will vote in accordance with their best judgment.

Who can attend the meeting?

The 2018 Annual Meeting is open to all Cabot stockholders. If you need directions to the meeting, please call Cabot’s Investor Relations Group at (617) 342-6255. When you arrive at Cabot’s Corporate Headquarters, please go to the 13th Floor and signs will direct you to the meeting room. You need not attend the 2018 Annual Meeting to vote.

Important Notice Regarding the Availability of Proxy Materials for the 2018 Annual Meeting

This proxy statement and our 2017 Annual Report on Form 10-K are available at the following Internet address: http://www.cabotcorp.com/2018annualmeeting.

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Governance

Proposal 1 — Election of Directors

Board of Directors

Our Board of Directors currently has twelve members and is divided into three classes serving staggered three-year terms. Directors for each class are elected at the annual meeting of stockholders held in the year in which the term for their class expires. Four directors are proposed to be elected at the 2018 Annual Meeting. The terms of Cynthia A. Arnold, John F. O’Brien, John K. McGillicuddy, and Mark S. Wrighton expire this year and our Board of Directors has nominated each of them for a three-year term that will expire at the annual meeting in 2021. All of them are current directors and, with the exception of Dr. Arnold, have been elected by stockholders at previous annual meetings.

Roderick C.G. MacLeod, whose term of office expires at the 2019 Annual Meeting, has decided to retire from the Board effective at the 2018 Annual Meeting. Upon the election of the nominated directors, and with this retirement, Cabot’s Board of Directors will have eleven members. We expect that all of the nominees will be available for election, but if any of the nominees is not available at the time of the 2018 Annual Meeting, proxies received will be voted for substitute nominees to be designated by the Board of Directors or, if no substitute nominees are identified by the Board, proxies will be voted for a lesser number of nominees. In no event will the proxies be voted for more than four nominees.

Vote Required

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

Recommendation

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

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Proposal 1 — Election of Directors (continued)

Certain Information Regarding Directors

In addition to the information presented below regarding the specific experience, qualifications, attributes and skills that qualify the nominees and the directors whose terms of office will continue after the 2018 Annual Meeting to serve as a director of the Company, all the nominees and directors have a reputation for honesty, integrity, sound judgment and adherence to high ethical standards. Each of the nominees and directors has demonstrated the willingness and ability to make the significant commitment of time and energy to serve on our Board and its Committees, and to engage management and each other openly and constructively.

6    CABOT CORPORATION

Proposal 1 — Election of Directors (continued)

CABOT CORPORATION    7

Proposal 1 — Election of Directors (continued)

8    CABOT CORPORATION

Proposal 1 — Election of Directors (continued)

CABOT CORPORATION    9

Proposal 1 — Election of Directors (continued)

10    CABOT CORPORATION

Proposal 1 — Election of Directors (continued)

CABOT CORPORATION    11

Board Governance and Composition

Corporate Governance Guidelines

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

Board Composition

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

Important Factors in Assessing Director Qualifications

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

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

Enhancing the Board’s diversity of background. As a global company, we consider diversity core to our culture. At the Board level and throughout our company we value the benefits we receive from different perspectives and strive for a talented and diverse workforce and a diverse Board that is representative of our global business, customers, employees

12    CABOT CORPORATION

Board Composition (continued)

and stockholders. In evaluating the suitability of individual Board nominees, the Governance Committee takes into account many factors, including general understanding of the disciplines relevant to the success of a publicly traded company with global manufacturing operations in today’s business environment, professional experience, background, education, skill, age, race, gender and national origin. Although the Board does not have a formal written policy that solely addresses diversity, our Corporate Governance Guidelines prioritize diversity of origin, background, experience and thought as important director selection criteria. The Committee reviews its effectiveness in balancing these considerations when assessing the composition of the Board.

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

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

Candidate Recommendations. Generally, we identify candidates for election to the Board of Directors through the business and other networks of the directors and management. The Committee may also solicit recommendations for director nominees from third-party search firms, and, over the past year, the Committee retained a search firm to help identify potential candidates. We evaluate candidates recommended by our stockholders in the same manner and on the same basis as candidates recommended by our directors, management or third-party search firms. On the recommendation of certain of the independent directors, and the further recommendation of the Governance Committee, Mr. Morrow was elected a director in 2017. Dr. Arnold was initially identified as a candidate for election to the Board by a third-party search firm, and upon the recommendation of the Governance Committee, the Board elected Dr. Arnold a director in January 2018.

Changes in Governance Practices made in 2017. Following a review of trends in board composition, succession planning and governance practices, the Board determined to eliminate its retirement policy for directors. The Board is of the view that a mix of tenures that takes into consideration appropriate levels of continuity, institutional memory and fresh perspectives is critical in achieving and maintaining a high-performing board. The Board does not believe that a mandatory retirement policy is an effective tool for proper Board refreshment. Rather, the Board will proactively manage its composition and make-up to ensure it has the appropriate mix of tenures and the requisite skills to address the Company’s current and future needs.

How we Assess Director Independence

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

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Board Composition (continued)

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

John F. O’Brien currently serves as Non-Executive Chair of the Board. The Board has elected Sue H. Rataj as Non-Executive Chair of the Board of Directors, effective March 9, 2018.

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

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

How our Board Operates

Our Board of Directors has six scheduled Board meetings to review and discuss Cabot’s performance and prospects as well as the issues we face, with calls and communications between meetings as appropriate. The Board interacts directly with senior management during its meetings. The Board typically dedicates one meeting a year to a discussion of longer-term strategic issues the Company faces. During fiscal 2017, the Board met six times.

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

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

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

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

14    CABOT CORPORATION

Board Composition (continued)

Audit Committee

Members

9 meetings in fiscal 2017

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

Primary Responsibilities

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

During 2017, the Committee’s other priorities included Treasury matters, including cash and debt management issues, financial process improvement initiatives and tax matters. The Committee also focused on cyber-security risk.

Compensation Committee

Members

6 meetings and 2 actions by written consent in fiscal 2017

Primary Responsibilities

The primary responsibilities of the Compensation Committee are to:

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Board Composition (continued)

An important item for 2017 was reviewing the design of our incentive compensation programs, as further discussed in CD&A, to ensure they will continue to effectively incentivize the achievement of our new “Advancing the Core” strategy.

Governance Committee

Members

4 meetings in fiscal 2017

Primary Responsibilities

The Governance Committee is charged primarily with:

During 2017, the Governance Committee focused on Board composition, director recruitment, refreshing our Board evaluation process, and reviewing our Corporate Governance Guidelines.

Safety, Health and Environmental (“SH&E”) Committee

Members

4 meetings in fiscal 2017

Primary Responsibilities

The SH&E Committee reviews all aspects of Cabot’s safety, health and environmental management stewardship, programs and performance. In particular, the Committee reviews the following:

During 2017, the Committee focused on the Company’s safety improvement plans, chemical risks and hazard assessments program, sustainability program and reporting, product classification matters, and environmental remediation activities.

16    CABOT CORPORATION

Board Composition (continued)

Executive Committee

Members

Did not meet or act in fiscal 2017

Primary Responsibilities

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

How We Evaluate the Board’s Effectiveness

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

Our Board’s Role in Risk Oversight

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

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

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

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Board Composition (continued)

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

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

18    CABOT CORPORATION

Other Governance Policies and Practices

Transactions with Related Persons

Policy and Procedures for the Review of Related Person Transactions

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

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

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

Transactions with Related Persons

Since the beginning of fiscal 2017, Cabot and its subsidiaries had no transactions, nor are there any currently proposed transactions in which Cabot or its subsidiaries was or is to be a participant, in which the amount involved exceeds $120,000 and any related person (as defined above) had or will have a direct or indirect material interest reportable under SEC rules.

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Other Governance Policies and Practices (continued)

Procedures for Stockholders to Recommend Director Nominees

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

Director Attendance at Meetings

Board/Committee Meetings. During fiscal 2017, each director attended at least 85% of the aggregate of the total Board meetings and the total meetings held by all of the Committees on which he or she served during the periods that he or she served.

Annual Meeting of Stockholders. Recognizing that director attendance at the annual meeting can provide our stockholders with an opportunity to communicate with Board members about issues affecting Cabot, we actively encourage our directors to attend the annual meeting. In 2017, all of our directors whose term of office continued after the annual meeting attended the annual meeting.

Code of Business Ethics

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

Communications with the Board

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

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

20    CABOT CORPORATION

Director Compensation

Annual compensation for our non-employee directors is comprised of cash compensation and a grant of Cabot common stock. The Governance Committee is responsible for reviewing the form and amount of compensation paid to our non-employee directors and recommends changes to our Board of Directors as appropriate. The Governance Committee regularly reviews competitive market data with the assistance of Mercer LLC, a national executive compensation firm engaged by this Committee, to evaluate the reasonableness of our director compensation and the appropriate mix of cash and equity compensation. Directors who are Cabot employees do not receive compensation for their services as directors.

Cash Compensation

Cash compensation for our non-employee directors consists of an annual retainer of $75,000, plus the following annual retainers for specific roles:

Mr. O’Brien has elected to not receive the cash compensation described above for his role as Chair of the Governance Committee while he is serving as our Non-Executive Chair of the Board. Cash compensation is paid quarterly and, when changes occur in Board or Committee membership during a quarter, the compensation is pro-rated.

Stock Compensation

Under the Cabot Corporation 2015 Directors’ Stock Compensation Plan (the “Directors’ Stock Plan”), each non-employee director is eligible to receive each calendar year shares of Cabot common stock as part of his or her compensation for services to be performed in that year. For calendar year 2017, each non-employee director whose term of office continued after the 2017 Annual Meeting of Stockholders received an award of shares having a grant date value as close as possible to $110,000 (2,052 shares). Lydia W. Thomas, who retired at the 2017 Annual Meeting, received a pro-rated grant of 513 shares. The closing price of our common stock on January 13, 2017, the date such shares were granted, was $53.61. Upon his election to the Board on September 8, 2017, Mr. Morrow received a pro-rated grant of 700 shares as compensation for his services as a non-employee director to be performed in 2017. The closing price of our common stock on September 8, 2017 was $52.41.

As of January 16, 2018, there were 295,549 shares available for issuance under the Directors’ Stock Plan.

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

Reimbursement of Certain Expenses; Charitable Giving

Our Corporate Governance Guidelines state that Cabot will not provide retirement or other benefits or perquisites to non-employee directors. Directors, however, are reimbursed for reasonable travel and out-of-pocket expenses incurred in connection with attending Board and Committee meetings and other Cabot business-related events, and are covered by Cabot’s travel accident insurance policy for such travel. In connection with the retirement of Dr. Thomas from the Board of Directors at the 2017 Annual Meeting and in recognition for her many years of service, we made contributions totaling $25,000 on her behalf to charities that she selected.

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Director Compensation (continued)

Deferred Compensation

Under the Cabot Corporation Non-Employee Directors’ Deferral Plan (the “Deferred Compensation Plan”), directors can elect to defer receipt of any cash compensation payable in a calendar year for a period of at least three years or until they cease to be members of the Board of Directors. In any year, these deferred amounts are, at the director’s choice, either (i) credited with interest at a rate equal to the Moody’s Corporate Bond Rate for the month of November prior to the beginning of the applicable year or (ii) treated as invested in Cabot phantom stock units, based on the market price of shares of Cabot common stock at the time of deferral (with dividends paid on shares credited and treated as if reinvested in Cabot phantom stock units). Mr. Enriquez and Dr. Wolfgruber elected to defer receipt of their calendar year 2017 cash compensation and treat the deferred amounts as invested in Cabot phantom stock units. Messrs. Kirby and Prevost elected to defer receipt of their calendar year 2017 cash compensation and have it credited with interest at a rate equal to the Moody’s Corporate Bond Rate. The Moody’s Corporate Bond Rate used to calculate interest during calendar year 2017 was 4.19%.

Under the Deferred Compensation Plan, directors also may defer receipt of the shares of common stock issuable to them under the Directors’ Stock Plan. For each share of stock deferred, a director is credited with one Cabot phantom stock unit to a notional account created in the director’s name. Dividends that would otherwise be payable on the deferred shares accrue in the account and are credited with interest at a rate equal to the Moody’s Corporate Bond Rate for the month of November prior to the beginning of the year. The rate used to calculate interest during calendar year 2017 was 4.19%. At the end of the deferral period, the deferred shares of Cabot common stock are issued to the director, along with the accrued cash dividends and interest earned, either in one issuance or in installments over a period of up to ten years, as selected by the director. Messrs. Enriquez, Kirby, McGillicuddy, Morrow and Prevost, and Drs. Thomas and Wolfgruber elected to defer their calendar year 2017 stock awards.

Director Compensation Table

The following table sets forth the compensation earned by our non-employee directors in fiscal 2017:

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

The following table shows the amount of Cabot common stock beneficially owned as of January 16, 2018 (unless otherwise indicated) by each person known by Cabot to beneficially own more than 5% of our outstanding common stock, by each director of Cabot, by each of our named executive officers and by all directors, nominees for director and executive officers of Cabot as a group. Unless otherwise indicated, each person has sole investment and voting power over the securities listed in the table.

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

24    CABOT CORPORATION

Executive Compensation

Compensation Committee Report

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

Based on these reviews and discussions, the Compensation Committee recommended to the Board of Directors that the CD&A be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended September 30, 2017.

Sue H. Rataj, Chair

Matthias L. Wolfgruber

Mark S. Wrighton

Compensation Discussion and Analysis

As context for our named executive officers’ 2017 fiscal year compensation, below we summarize Cabot’s fiscal 2017 performance and provide a brief overview of the decisions made with respect to executive compensation in fiscal 2017 and our executive compensation programs for this year. We then describe our compensation philosophy and objectives, our compensation setting process and other compensation- and governance-related policies, and compensation awarded, earned and paid for fiscal 2017. For fiscal 2017, our named executive officers (“NEO”s) and their current positions are:

Executive Summary

Our Performance in Fiscal 2017

In 2016, we launched our “Advancing the Core” strategy to extend our leadership in performance materials by (i) investing for growth in our core businesses, (ii) driving application innovation with our customers, and (iii) generating strong cash flows through efficiency and optimization. The aim of this strategy is to deliver sustained and attractive total shareholder return (TSR), built on earnings growth and a balanced capital allocation framework intended to ensure that we invest sufficiently in our core businesses to capture opportunities and drive long-term earnings growth while also providing our shareholders with a meaningful cash return.

Fiscal 2017 was a year of tremendous progress for us. We delivered on our financial goals, and

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Executive Compensation (continued)

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

We made notable progress in our efforts to drive application innovation. This is best exemplified by:

Our efficiency and optimization achievements included:

In addition, we made continued progress in our safety, health and environmental performance, which included top tier performance in Total Recordable Incident Rate (“TRIR”), a notable reduction in environmental non-conformances and a Gold rating from Ecovadis for our 2016 Sustainability report.

In connection with the adoption and implementation of our Advancing the Core strategy, at the beginning of fiscal 2017 management and the Compensation Committee reviewed the design of our executive compensation programs to determine whether they would continue to effectively drive the achievement of, and reward the delivery of the commitments we made under, this new strategy. From this review, we made modest adjustments to the terms of our performance-based incentive compensation awards, which are reflected in the awards we granted in fiscal 2017. Specifically, under our short-term incentive compensation (“STI”) program for fiscal 2017, the principal financial metric to measure corporate performance and determine payouts was adjusted earnings before interest and taxes (“EBIT”). In previous years, the principal financial metric was adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). Because we are a capital intensive company, the Compensation Committee determined that the use of adjusted EBIT, which includes our depreciation expense, as a performance metric under this program better ties short-term incentive compensation to the achievement of our earnings growth and capital efficiency goals than EBITDA. In addition, we believe adjusted EBIT is more closely correlated to our TSR. We retained net working capital (“NWC”) days as the second financial metric under our STI program for fiscal 2017 because we believe it effectively measures how efficiently we manage our investments in working capital to generate earnings. The calculation of this measure was modified for fiscal 2017 STI awards, however, to include the NWC days used in our Purification Solutions and Aerogel businesses, which we had not included in past years. The Committee also reviewed the financial metrics used in the performance-based restricted stock unit (“PSU”) awards made under our long-term incentive compensation (“LTI”) program and determined that the use of adjusted EPS and adjusted return on net assets (“RONA”) continue to be appropriate in light of the Company’s new strategy because adjusted EPS reflects our goal of improving our after-tax profitability and adjusted RONA measures how effectively and efficiently we use our operating assets to generate earnings. The Committee did modify the terms of our fiscal 2017 PSU awards to reinforce the capital allocation framework contained in our new strategy, so that dividend equivalent payments will be made in respect of PSUs that are earned based on the achievement of applicable performance metrics, but have not yet vested based on time, on the same terms as our time-based restricted stock unit (“TSU”) awards.

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Executive Compensation (continued)

Highlights of our Fiscal Year 2017 NEO Compensation Decisions and the Impact of Company Performance on Compensation.

We believe fiscal 2017 compensation appropriately aligned named executive officers’ pay with our corporate performance, with a significant portion of the compensation paid to our named executive officers based on our performance against pre-established corporate financial goals.

Base Salary. All of our named executive officers received a base salary increase for calendar 2017 during our annual salary review process that took place in November 2016. The increases, which ranged from 3% to 7%, were made in recognition of the officers’ strong individual performance and leadership. With these increases, overall, the base salaries of our named executive officers are aligned and consistent with our compensation philosophy, which considers individual performance and leadership, scope of responsibilities, and benchmark compensation data to arrive at a market competitive base level of compensation appropriate for the individual. (See pages 38-40 for further details).

STI Awards and Payouts. The Company achieved performance between the stretch and maximum levels of the adjusted EBIT metric and between target and stretch levels of the NWC days metric established by the Committee under our STI program, resulting in a payout of the portion of the award that is based on our financial performance of 147.3% of target. The balance of the amounts paid in respect of STI awards to our named executive officers reflected their strong individual performance and leadership (ranging from 90% to 145% of target), with the total STI awards ranging from 130% to 147% of the named executive officer’s target award. (See pages 38-40 for further details).

LTI Awards and Payouts. Our LTI awards consist of a combination of PSUs (35%), TSUs (30%) and stock options (35%) (with percentages measured based on the awards’ grant date values, assuming target level achievement of applicable performance metrics in the case of PSUs). The grant date value of the awards granted in fiscal 2017 to each named executive officer was based on an assessment of the named executive officer’s position, role and responsibilities within the Company, the overall competitiveness of his total direct compensation, and internal equity (the relationship of pay among the executive officers in the context of their responsibilities) considerations.

With respect to outstanding PSUs, the percentage of the target award earned for fiscal 2017 performance is set forth below. For each performance metric, achieving the target level of performance results in a payout of 100% of the portion of the award that is payable with respect to that metric.

The performance targets for the 2015 grants were established in November 2014, and they reflect the long-term goals in place at that time. In November 2015, the Committee revised the target setting methodology it had been using and in November 2016 it further refined that methodology to align it with our new Advancing the Core strategy and the growth expectations under that strategy. The Committee believed that the revised methodology would better incentivize our executives to achieve our strategic goals.

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Executive Compensation (continued)

Characteristics of our Executive Compensation Programs

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

Consideration of Results of Shareholder Advisory Votes on Executive Compensation

At our 2017 Annual Meeting, we conducted an advisory (non-binding) shareholder vote on executive compensation, as required by the Dodd-Frank Act. Over 95% of the shares voted approved the executive compensation discussed and disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and other related tabular and narrative disclosures contained in our fiscal 2016 proxy statement. In considering the results of this most recent favorable advisory vote on executive compensation, the Compensation Committee noted that the Company’s current executive compensation programs have been effective in implementing the Company’s stated compensation philosophy and objectives, and did not make any changes in the programs in response to shareholder concerns.

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

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

Compensation Philosophy, Objectives and Process

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

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

28    CABOT CORPORATION

Executive Compensation (continued)

Our Compensation Setting Process

The Compensation Committee

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

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

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

Role of the Compensation Consultant

The Compensation Committee has retained Pearl Meyer as its independent compensation consultant for purposes of executive compensation matters. Pearl Meyer provides the Committee with advice on a broad range of executive compensation matters. The scope of their services includes the following:

During fiscal 2017, Pearl Meyer also advised the Committee on the terms of our 2017 Long-Term Incentive Plan.

During fiscal 2017, Pearl Meyer attended all regularly scheduled meetings of the Compensation Committee.

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

Role of the Chief Executive Officer and Other Officers

Each year, our CEO and our Chief Human Resources Officer, working with internal resources as well as Pearl Meyer, review the design of our executive compensation programs and recommend modifications to existing, and/or the adoption of new, plans and programs to the Compensation Committee. In addition, our CEO recommends to the Committee the performance metrics to be used to determine payouts under our STI and LTI programs, and each named executive officer’s individual performance goals (other than the CEO’s) are jointly developed by the executive and the CEO.

CABOT CORPORATION    29

Executive Compensation (continued)

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

Use of Benchmarking Comparison Data

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

The Compensation Committee annually reviews the companies included in our compensation peer group and may add or eliminate companies as it determines to be appropriate. For purposes of fiscal 2017 compensation matters our compensation peer group consisted of the following 15 companies:

In preparation for the 2018 executive compensation review season and the decisions that the Compensation Committee has made and will make with respect to 2018 compensation, the Compensation Committee reviewed the peer group companies listed above and added Axalta Coating Systems, Ferro Corporation and Tronox Limited and removed Valspar Corporation, which was acquired by Sherman-Williams in June 2017.

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

At least annually the Compensation Committee reviews tally sheets that detail all elements of each named executive officer’s compensation and benefits for the current and prior fiscal years, as well as a projection of his compensation for the upcoming year. These are provided to the Committee as a means to review the total compensation and benefits package for each named executive officer and the impact of any compensation decisions on such compensation levels. The Compensation Committee made no changes to our current executive compensation programs or any individual named executive officer’s proposed compensation for fiscal 2017 based on the information set forth in the tally sheets.

30    CABOT CORPORATION

Executive Compensation (continued)

Factors Considered in Determining Amounts of Compensation

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

The Compensation Committee has targeted our named executive officers’ base salaries and target STI opportunities generally at the mid-market of the benchmarking data used by the Committee, as further described under “Use of Benchmarking Comparison Data”, and target LTI award values generally at the 65^th percentile of this benchmarking data. The actual compensation for each named executive officer may be above or below the officer’s target compensation opportunity and above or below the intended market level depending largely on the degree to which Company and individual performance objectives are achieved, their experience and time in the position, and internal equity considerations.

Developing Company Performance Metrics

The performance metrics we set are intended to support our short- and long-term business plans and strategies. In fiscal 2017, we used four financial metrics to promote well-rounded Company and management performance, as described below.

For our STI awards we used adjusted EBIT as the principal financial performance metric because it reflects an important near-term goal of improving our operating profitability and is a key driver of TSR. To increase the focus on efficiently managing our investments in working capital, we also used a NWC days metric in our STI awards. The calculation of this measure includes the NWC days used in our Purification Solutions and Aerogel businesses, which were not included in past years.

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

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

CABOT CORPORATION    31

Executive Compensation (continued)

Our Performance-based Compensation Philosophy

Our executive compensation programs are designed to provide more than 50% of each named executive officer’s total direct compensation (base salary, target STI award and LTI awards (with PSUs valued at target)) opportunity in the form of performance-based compensation. For fiscal 2017, 62% of the total direct compensation opportunity for our CEO was performance-based and not guaranteed. The performance-based portion of the total direct compensation opportunities for our other named executive officers (other than our CEO) for fiscal 2017, on average, was 55%. The charts below show the total direct compensation opportunity provided to our named executive officers for fiscal 2017, as well as the mix between short- and long-term compensation and at-risk and not at-risk compensation.

How Did our STI Program Work for Fiscal 2017?

We provide annual STI awards to drive the achievement of key business results and to recognize individuals based on their contributions to those results and Cabot’s overall performance. Each named executive officer has an annual target incentive opportunity under our STI program, which is expressed as a percentage of his base salary. The actual amounts payable in respect of STI awards range from 0% to 200% of the target award opportunity, with 70% of each award based on the achievement of pre-established corporate financial goals and the remaining 30% of each award based on individual performance and achievements. We used two financial metrics to measure corporate performance for determining payouts under our STI program for fiscal 2017: adjusted EBIT, which had an 80% weighting, and NWC days, which had a 20% weighting. The Committee established a threshold, target, stretch and maximum level for each financial metric, with payout for performance between performance levels determined on a straight-line basis. If the threshold adjusted EBIT goal was not achieved, no payouts in respect of corporate performance under our STI program would be made. Even if the threshold levels of performance were achieved, the Committee nonetheless retained the discretion to decrease the amount of the awards based on our level of achievement of other corporate goals in the areas of safety, environmental performance, customers, innovation and people.

At the beginning of each fiscal year, the non-Executive Chair, with input from the other independent directors, develops the individual performance objectives for our CEO, which are then approved by the Committee. Each of our other executive officers develops with the CEO his individual performance objectives for the year. In assessing each executive officer’s individual performance, the Committee considers the officer’s personal achievements, including his achievements against his established individual performance objectives, as well as his individual contributions to the management team, his leadership and his management of his business, region or function, as applicable. The Committee does not assign specific numerical weightings or ratings to the individual performance objectives and the performance of each officer is evaluated as a whole. Furthermore, there are no formal threshold levels of achievement applicable to the individual performance component of our STI program. Ultimately, the determination of the payout of the portion of the STI awards based on individual performance is based on the judgment of the CEO (with respect to his direct reports) and the Committee after reviewing all relevant factors, with the final determination made by the Committee.

32    CABOT CORPORATION

Executive Compensation (continued)

We believe that the fiscal 2017 STI payouts properly aligned annual incentive compensation with the Company’s fiscal 2017 financial performance, consistent with the STI program’s role in our overall compensation program. The adjusted EBIT and NWC days targets for the fiscal 2017 STI awards and our actual fiscal 2017 performance were as follows:

Fiscal 2017 STI Program Targets and Results

The balance of the amounts paid in respect of STI awards to our named executive officers reflected their strong individual performance and leadership in fiscal 2017 (ranging from 90% to 145% of target), with the total STI awards ranging from 130% to 147% of the named executive officer’s target award. Detailed information about each named executive officer’s fiscal 2017 STI payout is set forth in the discussion below under the heading “Fiscal 2017 Compensation Decisions”.

How Did our LTI Program Work in Fiscal 2017?

We provide our named executive officers with LTI awards to promote retention, to incentivize sustainable growth and long-term value creation, and to further align the interests of our executives with those of our shareholders by tying the executives’ realized compensation to stock price changes during the performance and vesting periods. The grant date value of LTI awards granted to each named executive officer for a given year is based on an assessment of the individual’s position, role and responsibilities within the Company, the overall competitiveness of his total direct compensation opportunity, and internal equity considerations. The Committee also considers compensation peer group data for a general understanding of competitive equity compensation practices as well as the impact of the grants on equity incentive plan usage, share dilution, the Company’s compensation expense and employee retention concerns.

When making LTI awards for fiscal 2017, the Compensation Committee first determined the total grant date value of the awards to be granted to each executive, and then delivered that value in three components: PSUs representing 35%, stock options representing 35%, and TSUs representing 30%, respectively, of the total grant date value of the award,

CABOT CORPORATION    33

Executive Compensation (continued)

assuming target level achievement of applicable performance metrics for PSUs. The terms of each type of LTI award are described in further detail below, which terms are generally applicable to LTI awards granted in fiscal 2017 and in previous fiscal years.

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

PSUs

Each award of PSUs is allocated evenly into three tranches, with each tranche having a one-year performance period and the entire award having a three-year vesting period. When the award vests at the end of the applicable three-year period, the number of shares of stock issuable, if any, will depend on the degree of achievement of corporate performance metrics for each year within the three-year performance period. Based on the degree to which we achieve the performance metrics, an executive may earn between 0% to 200% of the number of PSUs allocated to each tranche of his award.

Threshold, target, stretch and maximum goals are established for the corporate performance metrics for each year in the three-year performance period at or before the time of grant of the PSUs, and our actual performance against those metrics determines the number of shares that will be issuable in respect of the PSUs when the awards vest. The payout for performance between performance levels is interpolated on a straight-line basis. The financial metrics used to measure corporate performance are adjusted EPS, with an 80% weighting, and adjusted RONA, with a 20% weighting.

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

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Executive Compensation (continued)

Stock options

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

TSUs

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

Practices Regarding the Grant of Equity Awards

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

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Executive Compensation (continued)

PSUs Earned under PSU Award that Vested in 2017

The charts below show the overall percentage of PSUs earned under PSU awards granted in November 2014 that vested in November 2017. The performance periods of these awards were our 2015, 2016 and 2017 fiscal years. Overall, the number of PSUs earned under these awards was 50.9% of the target awards.

36    CABOT CORPORATION

Executive Compensation (continued)

PSUs Earned under Outstanding PSU Awards on the Basis of Fiscal 2017 Performance

The following tables show the performance metrics and the relative weighting of each metric that the Committee set for the fiscal 2017 performance period of PSUs granted in fiscal 2015, 2016 and 2017, our degree of attainment of these metrics and the percentage of the awards earned, measured against the target award. As the performance metrics for the fiscal 2017 performance period of these awards were established at different times, they each reflect the long-term goals in place when the awards were granted. Importantly, the target levels of performance for the adjusted EPS and adjusted RONA performance goals for the fiscal 2017 LTI awards exceeded our actual performance against these metrics in fiscal 2016.

Company Targets and Results for Performance Year 3 of the PSUs granted in Fiscal 2015

(Performance Period 2015-2017) that Vested in November 2017

Company Targets and Results for Performance Year 2 of the PSUs granted in Fiscal 2016

(Performance Period 2016-2018) that Vest in November 2018

Company Targets and Results for Performance Year 1 of the PSUs granted in Fiscal 2017

(Performance Period 2017-2019) that Vest in November 2019

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Executive Compensation (continued)

Fiscal 2017 Compensation Decisions

The compensation decisions the Committee made with respect to our named executive officers for fiscal 2017 are described below.

In considering each executive’s individual performance in fiscal 2017 and determining his STI award payout for fiscal 2017 and making the other compensation decisions discussed above, the Committee specifically considered the following:

Sean D. Keohane, President and CEO.

Fiscal 2017 Performance Summary

The Committee believes that Mr. Keohane performed extremely well in 2017. The Committee also specifically recognized:

Compensation Decisions for Fiscal 2017

Eduardo E. Cordeiro, EVP and CFO, and President, Americas Region.

Fiscal 2017 Performance Summary

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

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Compensation Decisions for Fiscal 2017

Nicholas S. Cross, EVP and President, Performance Chemicals Segment, and President, EMEA Region, and until February 2017, President, Specialty Fluids Segment.

Fiscal 2017 Performance Summary

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

In addition, in connection with his responsibilities as President, Specialty Fluids until February 2017, the Committee recognized Mr. Cross’s role in the development of an infrastructure and mining project at our cesium mine in Manitoba, Canada that we expect to complete in 2018, and the growth in our fine cesium chemicals business.

Compensation Decisions for Fiscal 2017

Brian A. Berube, SVP and General Counsel and, until April 2017, Interim Chief Human Resources Officer.

Fiscal 2017 Performance Summary

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

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Executive Compensation (continued)

In addition, in connection with his responsibilities as Interim Chief Human Resources Officer until April 2017, the Committee recognized Mr. Berube’s role in providing leadership to our human resources function, which refreshed our flagship employee leadership program and other employee development programs, made improvements to our employee compensation programs and conducted a global employee engagement survey.

Compensation Decisions for Fiscal 2017

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

Fiscal 2017 Performance Summary

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

Compensation Decisions for Fiscal 2017

Risk Assessment

We monitor the risks associated with our executive compensation programs and policies on an on-going basis. In May 2017, management presented the Committee with the results of a study it conducted of our compensation programs to

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Executive Compensation (continued)

assess the potential risks arising from these programs. We believe the following policies and practices reflect sound risk management practices within our executive compensation programs and mitigate excessive risk-taking that could harm our value or reward poor judgment by our executives:

Based on these mitigating factors, the Committee agreed with the study’s findings that our executive compensation programs do not encourage inappropriate or unacceptable risk to the Company, and that any risks are within our ability to effectively monitor and manage and are not reasonably likely to have a material adverse effect on the Company.

Share Ownership Guidelines

To further align the interests of our executives and our shareholders, in November 2008 we adopted share ownership guidelines for members of our Management Executive Committee. Under our guidelines, we expect our CEO to own equity in the Company in an amount equal to five times his or her annual base salary, and each other officer who reports directly to the CEO to own equity in an amount equal to three times his or her annual base salary. Each executive has five years from the date he or she becomes subject to the share ownership guidelines to meet his or her target. The Committee reviews compliance with these guidelines annually. At the time of this filing, all of our named executive officers satisfied their share ownership guidelines and all of the other members of the Management Executive Committee who have been subject to these guidelines for five years or longer had also satisfied such share ownership guidelines.

Recoupment of Compensation

The Company adopted a recoupment (clawback) policy in 2012. The policy applies to performance-based compensation, such as STI and LTI compensation, paid to participants in our LTI program (which includes our named executive officers), and covers awards made for fiscal 2013 and thereafter. Under the policy, if the Company is required to restate its financial statements due to material non-compliance with financial reporting requirements under applicable securities laws, and the amount of performance-based compensation awarded or paid would have been lower had the achievement of applicable financial performance been calculated based on the restated financial results, the amount of the excess compensation awarded or paid during the three-year period preceding the date on which the Company is required to prepare the restatement is subject to recoupment, in the discretion of the Compensation Committee. In addition, if a participant knowingly engaged in misconduct that is a material factor in the Company’s obligation to restate its financial statements, the Company will have the right to seek recoupment of the proceeds from the sale of shares issued upon the exercise of stock options or upon the vesting of restricted stock units (including TSUs and PSUs) occurring during the twelve-month period following the filing with the SEC of the financial statements required to be restated, in an amount deemed appropriate by the Compensation Committee under the circumstances.

Other Information

Retirement and Other Benefit Programs

Except for Mr. Cross, our named executive officers participate in the full range of benefit programs and are covered by the same retirement plans on the same terms as are generally provided to our full-time U.S. salaried employees, are eligible to participate in and/or receive benefits under our Deferred Compensation Plan and our Death Benefit Protection Plan, and participate in our Senior Management Severance Protection Plan. These plans are described in the footnotes and text that accompany the compensation tables that follow this CD&A.

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Executive Compensation (continued)

Mr. Cross is a participant in our Senior Management Severance Protection Plan, but as a Swiss-based employee, does not participate in the other retirement and benefit programs described above. Instead, Mr. Cross participates in the same pension plan and other benefit programs that are provided to full-time Cabot employees in Switzerland and, prior to his return to Switzerland in January 2017, participated in the insurance and other benefit programs provided to other employees under our international assignment program. These benefits, and their costs to Cabot, are described in the footnotes and text that accompany the compensation tables that follow this CD&A.

Health and Welfare Plans

The health and welfare plans offered to our named executive officers are the same as those offered to all other employees working in the same country. While on international assignment, Mr. Cross was also covered by the health and welfare plans and life and disability benefits offered to our employees on an international assignment.

Perquisites

We provide our named executive officers a modest level of perquisites, consisting principally of financial planning and tax assistance services and an executive physical examination. We provide these benefits to help our executives maintain their health and manage their finances, in each case so that they are able to focus their attention on Cabot’s business. Mr. Cross received certain benefits as a result of his international assignment consistent with Cabot’s International Assignment Policy, as described in the footnotes and text that accompany the compensation tables that follow this CD&A.

Employment Arrangements

Our named executive officers, other than Mr. Cross, each serve without an employment agreement and their compensation is set by the Compensation Committee as described above.

Mr. Cross entered into a standard form of employment agreement with Cabot Switzerland when his employment with the Company was transferred to that entity. That agreement was amended in May 2015 to cover the compensation and relocation benefits related to Mr. Cross’ international assignment from August 1, 2015 through December 31, 2016. Consistent with Cabot’s International Assignment Policy, while he was on an international assignment, the Company provided Mr. Cross with, or paid the cost of: furnished housing, including utilities; cost of living adjustments (positive or negative); a taxable annual car allowance of $15,000; one home leave per year; and a payment in the amount of $25,000 annually for the cost of travel necessitated by his assignment. Mr. Cross was also covered by the tax equalization provisions of Cabot’s International Assignment Policy under which Mr. Cross’s tax obligations are equal to the taxes he would have paid had he remained resident in Switzerland and the Company pays all other United States and Swiss taxes associated with the income Mr. Cross earned while on assignment. Mr. Cross relocated back to Switzerland effective January 1, 2017 and his employment agreement was amended to cover his compensation, relocation, and tax equalization and other benefits following such relocation. In connection with his relocation, the Company provided Mr. Cross with movement of household goods and a relocation allowance equal to one month of his base salary and continued his tax equalization benefits to prevent him from paying more individual income tax as a result of his required travel to the U.S. than he would have paid if no such travel occurred.

Hedging Policy

The Company has a policy that prohibits executives and directors from engaging in any transaction in which they may profit from short-term speculative swings in the value of the Company’s securities. This includes “short sales” (selling borrowed securities that the seller hopes can be purchased at a lower price in the future) or “short sales against the box” (selling owned, but not delivered securities), and “put” and “call” options. In addition, this policy is designed to ensure compliance with all insider trading rules.

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Tax and Accounting Information

We consider the tax and accounting rules associated with various forms of compensation when designing our compensation programs. However, to maintain flexibility to compensate our executive officers in a manner designed to promote short- and long-term corporate goals and objectives, the Compensation Committee has not adopted a policy that all compensation must be deductible or have the most favorable accounting treatment to the Company.

Section 162(m) of the Internal Revenue Code limits to $1 million the amount a publicly-traded company may deduct for compensation paid to certain executive officers. This limitation does not, however, apply to compensation paid to a company’s chief financial officer or to compensation meeting the definition of “qualifying performance-based compensation.” The group of executive officers whose compensation is subject to Section 162(m)’s limitation on deductibility was expanded, and the exemption for qualifying performance-based compensation was repealed, by recent tax legislation effective for taxable years beginning after December 31, 2017. As a result, compensation paid to our executive officers in future years in excess of $1 million may not be deductible unless it qualifies for certain transition relief (with the scope of such transition relief being uncertain at this time). While the Company will monitor guidance and developments in this area, the Compensation Committee believes that its primary responsibility is to provide a compensation program that attracts, retains and rewards the executive talent necessary for our success. Consequently, the Compensation Committee may pay or provide, and has paid or provided, compensation that is not tax deductible or is otherwise limited as to tax deductibility.

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Executive Compensation (continued)

Summary Compensation Table

The following table and footnotes describe the compensation for our named executive officers for the three most recently completed fiscal years. A description of each component of our executive compensation package is described under the heading “Compensation Discussion and Analysis,” which begins on page 25.

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Executive Compensation (continued)

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Executive Compensation (continued)

Grant of Plan-Based Awards Table

The following table reports plan-based awards granted to the named executive officers during fiscal 2017. The material terms of our STI and LTI awards are described in “Compensation Discussion and Analysis — Our Performance-based Compensation Philosophy” beginning on page 32.