UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 102301 / January 28, 2025

ADMINISTRATIVE PROCEEDING

File No. 3-21145

In the Matter of

Compass Minerals International,

Inc.,

Respondent.

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ORDER APPROVING

PLAN OF DISTRIBUTION

On September 23, 2022, the Commission issued an Order Instituting Cease-and-Desist

Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the

Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the

“Order”) 1 against Compass Minerals International, Inc. (the “Respondent”). In the Order, the

Commission found various disclosure violations. From 2017 to 2018, Compass made repeated

misrepresentations about its plans to reduce costs and about the production levels at its Goderich

salt mine. These misrepresentations were the consequence of a deficient disclosure process at

the company in which statements to investors were not reviewed by personnel who were

sufficiently knowledgeable about both Compass’s operations and its disclosure obligations. The

failures in Compass’s disclosure controls and procedures resulted not only in material

misstatements about the mine, but in the company’s senior management not having sufficient

information about environmental issues caused by a facility it owned in Brazil to make

appropriate determinations about disclosures.

Compass calls its Goderich salt mine in Canada the “crown jewel” of its asset portfolio.

Between 2015 and 2019, Compass upgraded its mining system at Goderich from drilling-andblasting to continuous mining and continuous haulage (“CMCH”) primarily in an effort to reduce

costs. In 2017, Compass told investors this upgrade was “progressing on plan” and that it would

generate $30 million in annual savings for the company beginning in 2018—equivalent to about

a 17% increase in the company’s operating income. These statements were materially

misleading. Goderich’s new mining system was unable to produce enough salt during this

period to save the company money. To the contrary, the production shortfalls caused by the

upgrade required the company to incur additional expenses that substantially increased costs for

Compass, and the company’s experience implementing the upgrade showed this would continue.

1

Securities Act Rel No. 11107 (Sept. 23, 2022).

Compass did not disclose these facts, which substantially undermined Compass’s statements

about the upgrade.

In early 2018, Compass told investors the upgrade had already saved the company $5

million in 2017. This was not true. While the upgrade had reduced certain expenses by about $1

million, overall, in 2017, the upgrade had instead increased costs that year. During this period,

Compass also misrepresented the amount of salt it was mining and that it was able to produce at

Goderich using the installed CMCH equipment, and failed to disclose as required how the known

and ongoing production shortfalls it was experiencing were reasonably expected to reduce its

future operating income. After Compass disclosed in October 2018 that continuing production

shortfalls at the Goderich mine were significantly impacting its financial results, the company’s

share price declined significantly. In addition to these violations involving Goderich, from the

fourth quarter of 2017 to the first quarter of 2022, Compass failed to adequately assess the

financial consequences of a recently acquired subsidiary’s failures to comply with environmental

regulations in Brazil.

Finally, Compass filed materially misstated financials due to its use of a salt interim

inventory accounting methodology that did not comply with Generally Accepted Accounting

Principles (GAAP).

The Commission ordered the Respondent to pay a $12,000,000.00 civil money penalty to

the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the

Sarbanes-Oxley Act of 2002, so the penalty collected can be distributed to harmed investors (the

“Fair Fund”).

The Respondent has paid in full. The assets of the Fair Fund are subject to the continuing

jurisdiction and control of the Commission. The Fair Fund and has been deposited in a

Commission-designated account at the U.S. Department of the Treasury, and any interest

accrued will be added to the Fair Fund.

On December 3, 2024, the Division of Enforcement, pursuant to delegated authority,

published a Notice of Proposed Plan of Distribution and Opportunity for Comment (“Notice”), 2

pursuant to Rule 1103 of the Commission’s Rules on Fair Fund and Disgorgement Plans

(“Commission’s Rules”); 3 and simultaneously posted the Proposed Plan of Distribution (the

“Proposed Plan”). The Notice advised interested persons that they could obtain a copy of the

Proposed Plan from the Commission’s public website or by submitting a written request to

Devon Brown, United States Securities and Exchange Commission, 100 F Street, NE,

Washington, DC 20549-5876. The Notice also advised that all persons desiring to comment on

the Proposed Plan could submit their comments, in writing, within 30 days of the Notice. The

Commission received no comments on the Proposed Plan during the comment period.

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Exchange Act Rel. No. 101800 (Dec. 3, 2024).

17 C.F.R. § 201.1103.

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The Proposed Plan provides for the distribution of the Net Available Fair Fund 4 to

investors who were harmed, by the Respondent’s conduct described in the Order, in connection

with various disclosure violations. As calculated using the methodology detailed in the Plan of

Allocation attached as Exhibit A to the Proposed Plan, investors will be compensated for their

losses on shares of Compass common stock that were purchased or acquired between March 2,

2017, and October 22, 2018, inclusive, due to the misconduct of the Respondent.

Plan.

The Division of Enforcement now requests that the Commission approve the Proposed

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s

Rules, 5 that the Proposed Plan is approved, and the approved Plan of Distribution shall be posted

simultaneously with this order on the Commission’s website at www.sec.gov.

For the Commission, by the Division of Enforcement, pursuant to delegated authority. 6

Vanessa A. Countryman

Secretary

All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Proposed

Plan.

5

17 C.F.R. § 201.1104.

6

17 C.F.R. § 200.30-4(a)(21)(iv).

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