PROPOSAL 1 — ELECTION OF DIRECTORS
Lead Independent Director
In connection with the Board’s decision to appoint Mr. Tobin as Chair, the Board appointed Mr. Johnston as the Lead Independent Director, effective February 10, 2024. In making this determination, the independent directors took into consideration Mr. Johnston’s tenure, knowledge of Dover’s business and strategy, and demonstrated independent voice in the boardroom. The Board concluded that Mr. Johnston, who led the Board as Chair from 2016 to 2024, is well positioned to continue in a leadership role to facilitate carrying out the Board’s oversight responsibilities.
The Board also amended Dover’s Corporate Governance Guidelines to define the authority and responsibilities of the Lead Independent Director. Among other duties, the responsibilities include:
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Presiding at all meetings of the Board at which the Board Chair is not present, including executive sessions of the independent directors; |
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Coordinating the activities of the independent directors, including having the authority to call meetings of the independent directors; |
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Establishing the agenda for executive sessions of the independent directors; |
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In consultation with the Board Chair and senior management, establishing the agenda for each Board meeting and ensuring that information provided to the Board is timely and appropriate; |
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Facilitating communications between Board members, including serving as principal liaison between the independent directors and the Board Chair; |
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Consulting with the Board Chair on such other matters as are pertinent to the Board and the Company; |
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If appropriate, and in coordination with executive management, being available for consultation and direct communication with significant stakeholders; and |
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Performing such other duties as may be specified by the Board. |
Board, Committee and Individual Director Evaluations
Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluates one-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. New directors undergo the evaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a more in-depth, comprehensive evaluation for each of our directors.
Directors’ Meetings and Attendance
During 2023, the Board met four times. No director attended less than 75% of the board meetings and standing committee meetings on which he or she served in 2023. Board attendance was 100% in 2023. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives or non-independent directors present. The Chair of the Board or the Lead Independent Director, as applicable, presides at these sessions. We expect our directors to attend the Annual Meeting. All directors then in office attended the 2023 Annual Meeting.
Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls, or in-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with shareholders.
Management Meetings and Site Visits
We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makes on-site visits to our businesses to tour the manufacturing facilities and meet face-to-face with company management and employees. These visits serve as an important tool in the Board’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture.
DOVER CORPORATION – 2024 Proxy Statement 27
PROPOSAL 1 — ELECTION OF DIRECTORS
Director Orientation and Education
All new directors participate in our director orientation program. New directors meet with senior corporate leaders to review and discuss our businesses, operations, strategy, end markets, governance, internal controls, and culture. We believe that our on-boarding approach, coupled with participation in regular Board and committee meetings, as well as additional exposure to our business through participation in management meetings and site visits, whether virtually or in-person, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.
Our Board also encourages directors to participate annually in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.
Director Independence
Our Board has determined that each of the current members of the Board, except for Richard J. Tobin, who is our CEO, has no material relationship with Dover and satisfies all the criteria for being “independent” members of our Board. This includes the criteria established by the New York Stock Exchange (“NYSE”) listing standards, as well as our standards for classification as an independent director which are available on our website at www.dovercorporation.com. Our Board makes an annual determination of the independence of each nominee for director prior to his or her nomination for re-election. No director may be deemed independent unless the Board determines that he or she has no material relationship with Dover, directly or as an officer, shareholder or partner of an organization that has a material relationship with Dover.
Majority Standard for Election of Directors and Mandatory Resignation Policy
Under our by-laws and corporate governance guidelines, the voting standard in director elections is a majority of the votes cast. Under this majority of the votes cast standard, a director must receive more votes in favor of his or her election than votes against his or her election. Abstentions and broker non-votes do not count as votes cast with respect to a director’s election. In contested director elections (where there are more nominees than available seats on the board), the plurality standard will apply. Under the plurality standard, the nominees who receive the most “for” votes are elected to the Board until all seats are filled.
For an incumbent director to be nominated for re-election, he or she must submit an irrevocable resignation letter. The resignation will be contingent on the nominee not receiving a majority of the votes cast in an uncontested election and on the Board’s acceptance of the resignation. If an incumbent director fails to receive a majority of the votes cast in an uncontested election, the Governance and Nominating Committee will make a recommendation to our Board concerning whether to accept or reject the resignation or whether other action should be taken. Our Board will act on the resignation within 90 days following certification of the election results, taking into account the committee’s recommendation. The Board will publicly announce its decision and, if the resignation is rejected, the rationale for its decision.
Governance Guidelines and Code of Ethics
Our Board long ago adopted written corporate governance guidelines that set forth the responsibilities of our Board and the qualifications and independence of its members and the members of its standing committees. The Board reviews these guidelines at least annually, in light of evolving best practices, shareholder feedback and the evolution of our business. In 2020, the Board amended the guidelines to require that initial lists of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. In 2024, the Board amended the guidelines to define the authority and responsibilities of the Lead Independent Director. In addition, our Board has a long-standing Code of Conduct setting forth standards applicable to all of our companies and their employees, a code of ethics for our CEO and senior financial officers, and charters for each of its standing committees. All of these documents (referred to collectively as “governance materials”) are available on our website at www.dovercorporation.com.
Procedures for Approval of Related Person Transactions
We generally do not engage in transactions in which our senior executive officers or directors, any of their immediate family members or any of our 5% shareholders have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and an amount that exceeds $120,000, it would be subject to review and approval by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are available with the governance materials on our website.
DOVER CORPORATION – 2024 Proxy Statement 28
COMPENSATION DISCUSSION AND ANALYSIS
After December 31, 2009, benefits under the PRP before offsets are determined using the benefit calculation and eligibility criteria as under the pension plan, except that IRS limits on compensation and benefits do not apply. Prior to December 31, 2009, the participants in the PRP accrued benefits greater than those offered in the pension plan. Effective January 1, 2010, we modified this plan so that executives subject to IRS compensation limits will accrue future benefits that are substantially the same as benefits under the pension plan. Individuals who participated in the PRP prior to January 1, 2010 will receive benefits calculated under the prior benefit formula through December 31, 2009 and benefits calculated under the lower PRP benefit formula on and after January 1, 2010. Amounts receivable by the executives under the PRP are reduced by any amounts receivable by them under the pension plan, any qualifying profit sharing plan, Company-paid portion of social security benefits, and the amounts of the Company match in the 401(k) plan.
Effective December 31, 2013, the PRP was closed to new employees. All eligible employees as of December 31, 2013 continued to earn PRP benefits through December 31, 2023 as long as they remain employed by Dover and its affiliates. Effective December 31, 2023, Dover eliminated any benefit accruals consistent with the freezing of benefit accruals under the pension plan.
We offer a deferred compensation plan to allow participants to elect to defer their receipt of some or all of their salary, bonuses and any payout of a cash performance award. The plan permits executive officers to defer receipt of part of their compensation to later periods and facilitates tax planning for the participants. Effective January 1, 2022, the deferred compensation plan was amended to also provide for automatic Company contributions for participants who do not also participate in the PRP or have a present value benefit under the PRP of less than $100,000.
Executive Non-Change-in Control Severance Plan
All of our NEOs are eligible to participate in our severance plan. Under the plan, if we terminate an NEO’s employment without cause (as defined in the severance plan), the NEO will generally be entitled to receive twelve months of salary plus target annual cash bonus, outplacement services, and healthcare benefits continuation, and a prorated annual cash bonus and a prorated performance share award for time worked during the year. In addition, Mr. Tobin is entitled to receive certain severance payments and benefits under his employment agreement in the event his employment is terminated by Dover without cause or by him for good reason. See “Potential Payments Upon Termination or Change in Control.”
Senior Executive Change in Control Severance Plan
Our Senior Executive Change in Control Severance Plan (the “CIC Severance Plan”) establishes the severance benefits payable to eligible executives if they are involuntarily terminated following a change in control. All of our NEOs are eligible to participate in the CIC Severance Plan. An executive eligible to participate in the CIC Severance Plan as of the date of a change in control will be entitled to receive severance payments under the plan if, within 24 months after the change in control, either the executive’s employment is terminated by the Company without “cause” or he or she terminates employment for “good reason” (as such terms are defined in the plan). The severance payments and benefits will consist of: a lump sum payment equal to 2.0 times their annual salary and target bonus, a prorated annual cash bonus at target, full acceleration of all unvested SSARs and RSUs, performance share payout at target for all in-cycle awards, outplacement services, and a lump sum payment equal to the cost of Consolidated Omnibus Budget Reconciliation Act (COBRA) health care benefit continuation of the executive and covered family members for 24 months. See “Potential Payments Upon Termination or Change in Control.” No executive may receive severance benefits under more than one plan or arrangement. Dover does not provide tax gross-ups in the CIC Severance Plan.
Executive Cash Severance Policy
Effective February 9, 2023, the Compensation Committee adopted a new executive officer cash severance policy that applies to any new employment agreement, severance agreement or separation agreement with any executive officer of the Company or any new severance plan or policy covering any executive officer of the Company. The policy provides that cash severance benefits under any such new arrangement will be limited to no more than 2.99 times the sum of the executive officer’s base salary plus target annual bonus, unless approved by shareholders. The Compensation Committee believes that this policy will serve the interests of shareholders while preserving the Company’s ability to remain competitive in the market for talent.
DOVER CORPORATION – 2024 Proxy Statement 57
COMPENSATION DISCUSSION AND ANALYSIS
Other Elements of Compensation
Clawback Policy
In May 2023, in light of new rules promulgated by NYSE and SEC requirements, the Compensation Committee adopted a new clawback and recoupment policy applicable to our executive officers, effective as of October 2, 2023 (the “Clawback Policy”) that complies with applicable standards. The Clawback Policy provides for the prompt repayment or forfeiture by current or former executive officers of certain erroneously awarded compensation (“Erroneously Awarded Compensation”) received during an applicable three-year lookback period in the event we are required to prepare an accounting restatement of all or a portion of our consolidated financial statements due to material noncompliance with any financial reporting requirement under the securities laws. Erroneously Awarded Compensation for the purposes of the Clawback Policy generally means the amount of incentive-based compensation received during the fiscal period affected by the restatement by such executive officer that exceeds the amount of incentive-based compensation that would have been received by such executive officer had it been determined based on the restated amounts, without regard to any taxes paid. Incentive-based compensation covered under the Clawback Policy generally includes any incentive-based compensation granted, vested or paid to our executive officers at any time during the performance period for the incentive-based compensation and that was received (i) on or after the effective date of the NYSE listing standard, (ii) after the person became an executive officer, and (iii) at a time that we have a class of securities listed on a national securities exchange, and such incentive-based compensation is in general limited to any compensation granted, earned, or vested based wholly or in part on the attainment of one or more financial reporting measures.
The Clawback Policy does not condition clawback on the fault of the executive officer, but we are not required to pursue forfeiture or recovery of amounts in limited circumstances where the Compensation Committee has made a determination that recovery would be impracticable and (i) we have already attempted to recover such amounts but the direct expenses paid to a third party in an effort to enforce the Clawback Policy would exceed the amount to be recovered, (ii) the recovery of amounts would violate applicable home country law, or (iii) the recovery would cause the non-compliance of a tax-qualified retirement plan under the Internal Revenue Code and applicable regulations. We may effect any such recoupment by requiring the executive officer to pay Dover the relevant amount, by set-off, by reducing future compensation or by such other means or combination of means as the Board determines to be appropriate. We may not indemnify any such executive officer against the loss of such recovered compensation.
Apart from the Clawback Policy described above, our PRP includes clawback provisions for termination for cause and the severance plan and CIC Severance Plan provide for clawback of benefits for breaches of the plan.
Anti-hedging and Anti-pledging Policy
Our Securities Trading and Confidentiality Policy prohibits directors, executive officers and any employee who has previously received or receives any type of long-term incentive plan award, and certain persons and entities related to any such persons, from engaging in short-sales, transactions in derivative securities or any other form of hedging transaction designed to hedge or offset any decrease in the market value of Dover securities granted to or held by such persons. In addition, such persons may not hold Dover securities in a margin account or pledge securities as collateral for a loan or any other obligation.
Perquisites
We provide no substantial executive perquisites, other than the payment for executive physicals, nor does the Company own or operate any corporate aircraft. Management and our Compensation Committee believe that providing significant perquisites to executive officers would not be consistent with our overall compensation philosophy. As a result, we do not provide executive officers with perquisites such as social club memberships, company cars or car allowances, or financial counseling.
Shareholding Guidelines
We believe that our executives will most effectively pursue the long-term interests of our shareholders if they are shareholders themselves. As a result, share ownership guidelines are in place for all NEOs (subject to exceptions that may be granted by our Compensation Committee for significant personal events or retirement planning). Our CEO is required to hold shares equal in value to five-times salary and our other NEOs are required to hold shares equal in value to three-times salary. Our policy
DOVER CORPORATION – 2024 Proxy Statement 58
EXECUTIVE COMPENSATION TABLES
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The amounts represent the aggregate grant date fair value of SSAR awards granted during the year indicated, calculated in accordance with FASB ASC Topic 718, and do not correspond to the actual value that may be realized by the named executives. The grant date fair value for the 2023 SSAR awards was calculated using a Black-Scholes value of $47.27 per SSAR. |
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See Note (1) for a discussion of annual bonuses under the AIP as non-equity incentive plan compensation. |
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Amounts represent changes in present value of accumulated benefits under the pension plan and/or PRP during the year indicated. For more information, see “Executive Compensation Tables — Pension Benefits through 2023.” |
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Amounts for 2023 represent: (i) 401(k) matching contributions of $11,550 for Mr. Cerepak and Ms. Cabrera and $14,850 for Messrs. Tobin and Juneja, and Ms. Bors, (ii) dividends received on RSUs in the amount of $59,032, $14,629, $3,810 and $5,887 and $3,651 for Messrs. Tobin, Cerepak, Juneja and Mses. Cabrera and Bors respectively, and (iii) for Messrs. Tobin and Juneja, and Ms. Bors, respectively, $133,309, $25,586 and $21,901 for the 4.5% non-elective contributions in the nonqualified deferred compensation plan, since they do not participate in the PRP. |
CEO Employment Agreement
In connection with the hiring of Mr. Tobin as our CEO, Mr. Tobin and Dover entered into a three-year employment agreement commencing May 1, 2018, which was renewed in 2021 for a three-year period. In recognition of Mr. Tobin’s outstanding leadership and contributions to value creation, the agreement was renewed effective March 5, 2024 for an additional three-year period ending May 30, 2027. Under the terms of the agreement, Mr. Tobin is entitled to a minimum annual base salary of $1.2 million and a minimum target annual bonus equal to 125% of his base salary, and the receipt of an annual equity grant for each of Dover’s fiscal years ending during the term of the agreement with a grant date fair value of not less than $7 million. During the term of the agreement, Mr. Tobin will also be entitled to employee benefits on the same basis as those generally available to executive officers of Dover. Mr. Tobin is entitled to receive certain severance payments and benefits in the event his employment is terminated by Dover without cause or by him for good reason. See “Potential Payments upon Termination or Change in Control.”
At the end of the term of the agreement, Mr. Tobin will continue to be employed by Dover as an at-will employee and participate in severance and other benefit plans on the same terms as other executives.
CEO Pay Ratio
We are providing the following information about the relationship of the annual total compensation of our Chief Executive Officer and our median employee. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
Our global headcount was 25,007 employees (12,637 U.S. and 12,370 non-U.S.) as of our December 31, 2023 determination date. Eleven countries were excluded (2.1% of the total workforce) under the permissible 5% exclusion, with employee counts as follows: Argentina (20), Colombia (4), Costa Rica (1), Dominican Republic (71), Indonesia (4), Malaysia (147), Mexico (105), Russian Federation (26), Taiwan (18), Thailand (172), and Turkey (13). After country exclusions, our total headcount was 24,426 employees (12,637 U.S. and 11,789 non-U.S.). As is permitted under the rules, to determine our median employee, we chose “base salary” as our consistently applied compensation measure. We estimated annual base salary for hourly workers employed for the entire year using their hourly rate and a reasonable estimate of hours worked for the year. For employees who commenced work during 2023, we annualized their annual base salary. We then produced a sample of employees who were paid within a 0.5% range of that median and selected an employee from within that group as our median employee. We determined that employee’s (Summary Compensation Table) total compensation was $52,946 for 2023.
We calculated 2023 annual total compensation for both our median employee and Mr. Tobin using the same methodology that we use to determine our named executive officers’ annual total compensation for the Summary Compensation Table. Mr. Tobin’s total compensation was $16,795,101 resulting in an estimated ratio of 317:1 for CEO pay to median worker pay.
DOVER CORPORATION – 2024 Proxy Statement 62
EXECUTIVE COMPENSATION TABLES
The amounts shown in the Pension Benefits table above are actuarial present values of the benefits accumulated through December 31, 2023. An actuarial present value is calculated by estimating expected future payments starting at an assumed retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and discounting the weighted payments at an assumed discount rate to reflect the time value of money. The actuarial present value represents an estimate of the amount which, if invested today at the assumed discount rate, would be sufficient on an average basis to provide estimated future payments totaling the current accumulated benefit. For purposes of the table, the assumed retirement age for each NEO is 65, the normal retirement age under each plan. Actual benefit present values will vary from these estimates depending on many factors, including an executive’s actual retirement age.
Pension Plan
We have a pension plan for which eligible Dover employees, and the salaried employees of our participating subsidiaries, were eligible to become participants after they completed one year of service. Benefits under the pension plan for Dover employees, including those for the applicable NEOs, are determined by multiplying a participant’s years of credited service (up to a maximum of 35 years) by a percentage of their final average compensation, subject to statutory limits applicable to tax-qualified pension plans. Benefits for a number of the participating subsidiaries are determined under different benefit formulae.
Pension plan participants generally vest in their benefits after five years of employment or, if earlier, upon reaching age 65, which is the normal retirement age under the plan. All NEOs who participate in the pension plan are vested in their pension plan benefits and are eligible to begin receiving reduced benefits if their employment terminates before normal retirement age.
Effective December 31, 2013, the pension plan is closed to new employees. All pension eligible employees as of December 31, 2013 continued to earn pension benefits through December 31, 2023 as long as they remained employed by an operating company participating in the plan. Dover eliminated benefit accruals effective December 31, 2023.
Pension Replacement Plan
We also maintain the PRP, which is a non-qualified plan for tax purposes, to provide benefits to certain employees whose compensation and pension plan benefits are greater than the compensation and benefit limits applicable to tax-qualified pension plans. Prior to January 1, 2010, our plan which provided non-qualified retirement benefits was the Supplemental Executive Retirement Plan (“SERP”). Effective January 1, 2010, the SERP was amended to provide reduced benefits that are more consistent with the benefits provided under the pension plan and its name was changed to the PRP.
Employees are eligible to participate in the PRP if they hold certain positions within Dover, or its subsidiaries, are U.S. taxpayers and earn more than a set percentage above the Internal Revenue Code’s compensation limits for tax-qualified pension plans. Dover’s CEO may designate other employees as eligible and may revoke the eligibility of participants.
The formula for determining benefits accrued under the PRP after December 31, 2009, before offsets, is determined using the same benefit formula as under the pension plan, except that the Internal Revenue Code’s limits on compensation and benefits applicable to tax-qualified pension plans will not apply. Benefits under the former SERP, before offsets, were determined by multiplying the participant’s years of actual service with Dover companies, plus, in limited cases, prior service credit by a percentage of the participant’s final average compensation as defined under the plan.
Benefits payable under the PRP or SERP are reduced by the amount of Company-provided benefits under any other retirement plans, including the pension plan, as well as the Company-paid portion of social security benefits. PRP participants must complete five years of service to vest in their benefits. All NEOs who participate in the PRP are fully vested in their benefits and will commence receiving benefits upon termination of employment. PRP benefits may be forfeited for “cause” (defined as conviction of a felony which places a Dover company at legal or other risk or is expected to cause substantial harm to the business of a Dover company or its relationships with employees, distributors, customers or suppliers).
Normal retirement age for purposes of the PRP is age 65. Certain employees who were participants on or before March 1, 2010 will be entitled to receive the portion of their benefits that accrued through December 31, 2009 without any reduction due to early retirement if they retire after they reach age 62 and complete 10 years of service. Generally, benefits accrued after December 31, 2009 will be subject to early retirement reduction factors consistent with the reduction factors in the pension plan.
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EXECUTIVE COMPENSATION TABLES
Retirement (for awards made in 2021 onwards). Under the 2012 and 2021 LTIP, an NEO eligible for normal or early retirement will be entitled to continued vesting of SSARs and restricted stock unit awards for 36 months in the case of early retirement and 60 months in the case of normal retirement at or after age 62. In the case of normal retirement, the outstanding performance share awards for the performance period ending the soonest will continue to vest, subject to the satisfaction of the applicable performance targets. In the case of early retirement, outstanding performance share awards are payable, subject to the satisfaction of the applicable performance targets, only at the Compensation Committee’s discretion.
Early retirement under the 2012 and 2021 LTIP is defined as any reason other than normal retirement, death, disability or cause, under the following circumstance: The executive has at least 10 years of service with a Dover company, is at least 55 years old, and complies with certain notice requirements.
Any person who takes early or normal retirement under the 2012 or 2021 LTIP is deemed to have expressly agreed that he or she will not compete with us or any of our companies at which he or she was employed within the three years immediately prior to his or her termination, in the geographic areas in which we or that company actively carried on business at the end of the participant’s employment, for the period during which such retirement affords him or her enhanced benefits (36 months in the case of early retirement or 60 months in the case of normal retirement). If the participant fails to comply with the non-compete provision, he or she forfeits any enhanced benefits under the 2012 and 2021 LTIP and must return to Dover the economic value previously realized by reason of such benefits.
Change in Control (without termination of employment). All the change in control provisions in Dover’s compensation plans are double-trigger. Accordingly, an NEO’s compensation generally will not be affected by a change in control without termination of his or her employment. An executive will be entitled to incremental payments or values upon a change in control without termination of employment only if an executive’s outstanding awards under the 2012 or 2021 LTIP are impaired. In that circumstance, all unvested SSARs and restricted stock units will immediately vest on the date of the change in control and
outstanding performance share awards will immediately vest and become payable on the date of the change in control on a pro-rata basis for a shortened performance period.
Each person granted an award under the 2012 or 2021 LTIP is deemed to agree that, upon a tender or exchange offer, proxy solicitation or other action seeking to effect a change in control of Dover, he or she will not voluntarily terminate employment with us or any of our companies and, unless terminated by us, will continue to render services to us until the person seeking to effect a change in control of our Company has abandoned, terminated or succeeded in such person’s efforts to effect the change in control.
Under the PRP, upon a change in control, each participant will become entitled to receive the actuarial value of the participant’s benefit accrued through the date of the change in control. No additional incremental amounts are payable under the PRP upon a change in control.
Termination following a change in control. Upon the double-trigger events of a termination of employment following a change in control, an NEO may be eligible for certain cash severance payments and accelerated vesting of equity awards as described below.
An NEO will be entitled to receive severance payments if, within 24 months after the change in control, either his or her employment is terminated by Dover without “cause” or the executive terminates employment for “good reason,” under and as such terms are defined in the CIC Severance Plan. The severance payments will consist of the following:
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A lump sum payment equal to 2.0 multiplied by the sum of (i) the executive’s annual salary on the termination date or the change in control date, whichever is higher, and (ii) his or her target annual incentive bonus for the year in which the termination or the date of the change in control occurs, whichever is higher; |
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A lump sum payment equal to the pro rata portion (based on the completed days worked in the year in which the date of termination occurs divided by the number of days in such year) of the NEO’s target annual incentive bonus; |
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12 months of outplacement services up to a maximum of $25,000, as adjusted upwards for inflation; and |
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A lump sum payment equal to the then cost of COBRA health continuation coverage, based on the level of health care coverage in effect on the termination date, if any, for 24 months. |
DOVER CORPORATION – 2024 Proxy Statement 70
Proposal 4 — Approval of An Amendment to our Fifth Restated Certificate of Incorporation to Reflect Recent Delaware Law Provisions Regarding Officer Exculpation
Our Board has unanimously approved and declared advisable, and recommends that our stockholders adopt, a proposed amendment to our Fifth Restated Certificate of Incorporation (the “Certificate”) to reflect recent Delaware law provisions regarding officer exculpation.
Article SEVENTEENTH of our Certificate presently provides for the elimination of personal liability of directors for monetary damages in certain circumstances pursuant to, and in accordance with, Section 102(b)(7) of the Delaware General Corporation Law (the “DGCL”).
Prior to 2022, the DGCL did not allow for similar elimination or limitation of personal liability of officers for monetary damages. Effective August 1, 2022, Section 102(b)(7) of the DGCL was amended to permit corporations to eliminate or limit the liability of certain senior corporate officers, in addition to directors, in certain limited circumstances. The new Delaware law only permits, and, if the proposed amendment to the Certificate is adopted, our Certificate would only permit, exculpation from liability for these officers in the case of direct claims brought by stockholders for breach of an officer’s fiduciary duty of care, including class actions, and would not eliminate officers’ monetary liability for breach of fiduciary duty claims brought by Dover itself or for derivative claims brought by stockholders on behalf of Dover. Furthermore, the limitation on liability would not apply to breaches of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal benefit. As further described below, we believe this strikes a balance between stockholders’ interest in accountability and Dover’s interest in attracting and retaining high quality officers.
The description of the proposed amendment and the applicable provisions of the DGCL contained herein are summaries and are qualified in their entirety by the text of the proposed amendment and the full text of the applicable provisions of the DGCL.
Text of Proposed Amendment
Our Certificate presently provides for the exculpation of directors, but not officers. We propose to amend Article SEVENTEENTH of our Certificate so that it would state in its entirety as follows (with new text underlined):
“SEVENTEENTH: To the fullest extent permitted by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, a director or officer (as defined below) of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer.
Any repeal or modification of this Article shall not result in any liability for a director or officer with respect to any action or omission occurring prior to such repeal or modification.
All references in this ARTICLE SEVENTEENTH to an “officer” shall mean only a person who, at the time of an act or omission as to which liability is asserted, falls within the meaning of the term “officer” as defined in Section 102(b)(7) of the General Corporation Law of the State of Delaware.”
Factors to Consider
We believe that it is appropriate for directors and officers to remain free of the risk of financial ruin as a result of an unintentional misstep. The nature of the role of directors and officers often requires them to make decisions on crucial matters. Frequently, directors and officers must make decisions in response to time-sensitive opportunities and challenges, which can create substantial risk of investigations, claims, actions, suits or proceedings seeking to impose liability on the basis of hindsight, especially in the current litigious environment and regardless of merit.
Limiting the personal risk to our officers in addition to the existing limitation for directors would empower our officers to best exercise their business judgment in furtherance of stockholder interests. We believe that our directors and officers will best serve Dover if they feel protected in carrying out their duties and exercising judgment without fearing litigation for unintended mistakes, or being second guessed.
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PROPOSAL 4 — APPROVAL OF AN AMENDMENT TO OUR FIFTH RESTATED CERTIFICATE OF INCORPORATION TO REFLECT RECENT DELAWARE LAW PROVISIONS REGARDING OFFICER EXCULPATION
We believe our peers will adopt similar officer exculpation clauses in their certificates of incorporation limiting the personal liability of officers, and failing to adopt the proposed amendment could impact our ability to recruit and retain exceptional officers. In the absence of such protection, qualified officers might be deterred from serving due to exposure to personal liability and the risk that substantial expense will be incurred in defending lawsuits, regardless of merit. In particular, in its consideration of the proposed amendment, the board took into account the narrow class and type of claims for which such officers would be exculpated from liability pursuant to amended DGCL Section 102(b)(7), the limited number of Dover officers that would be impacted and the benefits the board believes would accrue to Dover by providing exculpation in accordance with DGCL Section 102(b)(7), including, without limitation, the ability to attract and retain key officers and the potential to reduce litigation costs associated with frivolous lawsuits.
The board balanced these considerations with Dover’s existing corporate governance practices and unanimously determined that it is advisable and in the best interests of Dover and its stockholders to amend Article SEVENTEENTH of our Certificate to extend exculpation protection to our officers in addition to our directors.
For the reasons stated above, on February 9, 2024, the Board unanimously determined that the proposed amendment to the Certificate is advisable and in the best interests of Dover and its stockholders, authorized and approved the proposed amendment and directed that it be considered at the Annual Meeting. The board believes the proposed amendment to the Certificate would better position our officers to exercise their business judgment in furtherance of the interests of Dover’s stockholders without the potential for distraction posed by the risk of personal liability.
Additionally, the proposed amendment would align the protections for our officers with those protections currently afforded to our directors, to the extent permitted under Delaware law.
Timing and Effect of the Proposed Amendment to the Certificate
If the proposed amendment to the Certificate is approved by our stockholders, it will become effective immediately upon its filing with the Secretary of State of the State of Delaware, which we expect will occur promptly after the annual meeting. In addition, if the proposed amendment to the Certificate is approved by our stockholders and the proposed amendment is filed with the Secretary of State of the State of Delaware, we intend to file a Sixth Restated Certificate of Incorporation to integrate and restate the Certificate, as amended by the proposed amendment to the Certificate (if approved) and any other previously adopted amendments to the Certificate into a single document.
Other than the revisions to the existing Article SEVENTEENTH, the remainder of our Certificate will remain unchanged after effectiveness of the amendment. If the proposed amendment to the Certificate is not approved by our stockholders, our Certificate will remain unchanged. In accordance with the DGCL, the board may elect to abandon the proposed amendment to the Certificate without further action by the stockholders at any time prior to the effectiveness of its filing with the Secretary of State of the State of Delaware, notwithstanding stockholder approval.
OUR BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSED AMENDMENT TO OUR
CERTIFICATE TO REFLECT THE NEW DELAWARE LAW PERMITTING THE EXCULPATION OF OFFICERS.
DOVER CORPORATION – 2024 Proxy Statement 79
General Information About the Annual Meeting
We are providing this Proxy Statement to our shareholders in connection with the solicitation of proxies by the Board for use at the Annual Meeting. We are mailing this Notice of Annual Meeting and Proxy Statement beginning on or about March 21, 2024.
Record Date
The record date for determining shareholders eligible to vote at the Annual Meeting is March 8, 2024. As of the close of business on that date, we had outstanding [●] shares of common stock. Each share of common stock is entitled to one vote on each matter.
Electronic Delivery of Proxy Materials
As permitted under SEC rules, we are making this Proxy Statement and our Annual Report to Shareholders (which includes our Annual Report on Form 10-K for the year ended December 31, 2023) available to shareholders electronically via the internet. We believe electronic delivery expedites receipt of our proxy materials by shareholders, while lowering the costs and reducing the environmental impact of the Annual Meeting. If you receive a notice of internet availability of proxy materials by mail, you will not receive a printed copy of the proxy materials by mail unless you specifically request them. Instead, the notice of internet availability will provide instructions as to how you may review the proxy materials and submit your voting instructions over the internet. If you receive the notice by mail and would like to receive a printed copy of the proxy materials, you should follow the instructions in the notice of internet availability for requesting a printed copy. In addition, the proxy card contains instructions for electing to receive proxy materials over the internet or by mail in future years.
Shareholders of Record; Beneficial Owners
Most holders of our common stock hold their shares beneficially through a broker, bank or other nominee rather than of record directly in their own name. As summarized below, there are some differences in the way to vote shares held of record and those owned beneficially.
If your shares are registered directly in your name with our transfer agent, you are considered the shareholder of record of those shares, and the notice of internet availability or proxy materials are being sent directly to you. As a shareholder of record, you have the right to grant your voting proxy directly to the persons named as proxy holders or to vote in person at the Annual Meeting. If you received or requested printed copies of the proxy materials, Dover has enclosed a proxy card for you to use. You may also submit your proxy on the internet or by telephone as described in the proxy card.
If your shares are held in a brokerage account or by a bank or other nominee, you are considered the beneficial owner of the shares held in “street name,” and these proxy materials are being forwarded to you by your broker or nominee who is considered the shareholder of record of those shares. As the beneficial owner, you generally have the right to direct your broker on how to vote and are also invited to attend the Annual Meeting. However, since you are not the shareholder of record, you may not vote those shares in person at the Annual Meeting unless you have a proxy, executed in your favor, from the holder of record of your shares. Your broker or nominee has enclosed a voting instruction card for you to use in directing your broker or nominee as to how to vote your shares. We strongly encourage you to instruct your broker or nominee how you wish to vote.
Vote Required; Abstentions and Broker Non-Votes; Quorum
For Proposal 1, a majority of the votes cast at the Annual Meeting is required to elect each of the directors. This means that the number of votes cast “FOR” a director must exceed the number of votes cast “AGAINST” that director in order for that director to be elected. Our organizational documents do not provide for cumulative voting.
Proposal 2 will require the affirmative vote of at least a majority of shares present in person or represented by proxy and entitled to vote thereon.
Proposal 3 is a nonbinding, advisory resolution so its ultimate adoption is at the discretion of the Board. The affirmative vote of a majority of shares present in person or by proxy and entitled to vote at the Annual Meeting will be deemed to be approval by the shareholders of Proposal 3.
Proposal 4 will require the affirmative vote of a majority of the voting power of all of the outstanding shares entitled to vote at the Annual Meeting.
DOVER CORPORATION – 2024 Proxy Statement 83
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
If you are a shareholder of record and you sign and return your proxy card or vote electronically without making any specific selection, then your shares will be voted FOR all director nominees listed in Proposal 1, and FOR Proposals 2, 3, and 4.
If you specify that you wish to “ABSTAIN” from voting on an item, then your shares will not be voted on that particular item. Abstentions will not affect the outcome of the vote on Proposal 1. However, they will have the same effect as a vote against Proposals 2, 3, and 4.
If you are a beneficial owner and hold your shares through a broker or other nominee and do not provide your broker or nominee with voting instructions, the broker or nominee will have discretionary authority to vote your shares on routine matters only and will not vote your shares on non-routine matters. This is generally referred to as a “broker non-vote.” Only Proposal 2 will be considered a routine matter for the Annual Meeting. Accordingly, a broker or other nominee will not be able to vote on Proposals 1, 3, and 4 without voting instructions. Broker non-votes will not affect the outcome of the vote on Proposals 1 and 3, but will have the same effect as a vote against Proposal 4.
For purposes of the Annual Meeting, there will be a quorum if the holders of a majority of the outstanding shares of our common stock entitled to vote at the Annual Meeting are present in person or represented by proxy. Abstentions and broker non-votes will be counted for purposes of determining if a quorum is present.
Voting Procedures
If you are a shareholder of record, you may vote in person at the Annual Meeting or submit your proxy or voting instruction form over the internet, by telephone or by mail by following the instructions provided in our notice of internet availability, in the proxy materials or in the voting instruction form. If you hold your shares beneficially in “street name” through a broker or other nominee, you must follow the instructions provided by your broker or nominee to vote your shares.
Revoking Your Proxy/Changing Your Voting Instructions
If you are a shareholder of record, whether you give your proxy over the internet, by telephone or by mail, you may revoke it at any time before it is exercised. You may submit a new proxy by using the internet or the telephone or by mailing a new proxy card bearing a later date so long as it is received before the Annual Meeting. You may also revoke your proxy by attending the Annual Meeting and voting in person, although attendance at the Annual Meeting will not, by itself, revoke your proxy. If you hold your shares beneficially in “street name” through a broker or other nominee, you must follow the instructions provided by your broker or nominee as to how you may change your voting instructions.
Shareholders Sharing the Same Address
SEC rules permit us to deliver one copy of the Proxy Statement or a notice of internet availability of the Proxy Statement to multiple shareholders of record who share the same address and have the same last name, unless we have received contrary instructions from one or more of such shareholders. This delivery method, called “householding,” reduces our printing and mailing costs. Shareholders who participate in householding will continue to receive or have internet access to separate proxy cards.
If you are a shareholder of record subject to householding and wish to receive a separate copy of the Proxy Statement or notice of internet availability of the proxy materials, now or in the future, at the same address or if you are currently receiving multiple copies of such materials at the same address and wish to receive only a single copy, please write to or call the Corporate Secretary, Dover Corporation, 3005 Highland Parkway, Downers Grove, Illinois 60515, telephone: (630) 541-1540.
Beneficial owners sharing an address who are currently receiving multiple copies of the proxy materials or notice of internet availability of the proxy materials and wish to receive only a single copy in the future, or who currently receive a single copy and wish to receive separate copies in the future, should contact their bank, broker or other holder of record to request that only a single copy or separate copies, as the case may be, be delivered to all shareholders at the shared address in the future.
Proxy Solicitation Costs
We will pay the reasonable and actual costs of printing, mailing and soliciting proxies, but we will not pay a fee to any of our officers or employees or to officers or employees of any of our subsidiaries as compensation for soliciting proxies. We have retained Morrow Sodali, LLC to solicit brokerage houses and other custodians, nominees or fiduciaries, and to send proxies and proxy materials to the beneficial owners of such shares, for a fee of approximately $12,000 plus expenses.
DOVER CORPORATION – 2024 Proxy Statement 84
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Other Matters
Our Board and management have not received notice of, and are not aware of, any business to come before the Annual Meeting other than the agenda items referred to in this Proxy Statement. If, however, any other business properly comes before the meeting, the persons named as proxies will use their best judgment in voting the proxies.
Shareholder Proposals and Director Nominations for 2025 Annual Meeting
In order for shareholder proposals to be included in our proxy statement for the Annual Meeting of Shareholders to be held in 2025 (the “2025 Annual Meeting”), they must be received by our Corporate Secretary at our principal executive offices, 3005 Highland Parkway, Downers Grove, Illinois, 60515, no later than the close of business on November 21, 2024.
In 2016, we adopted a proxy access right to permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws. In order to be timely, notice of proxy access director nominees must be received by our Corporate Secretary at our principal executive offices at the address above no earlier than the open of business on October 22, 2024 and no later than the close of business on November 21, 2024 being, respectively, 150 days and 120 days prior to the first anniversary of the date we first distributed this proxy statement.
All other shareholder nominations and proposals, in order to be voted on at the 2025 Annual Meeting, including any notice of director nominees submitted under the universal proxy card voting rules, must be received by us no earlier than the open of business on January 3, 2025, and no later than the close of business on February 2, 2025 being, respectively, 120 days and 90 days prior to the date of the first anniversary of the 2024 Annual Meeting.
Where You Can Find Additional Information
Our website is located at www.dovercorporation.com. You can view additional information on our website, such as:
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Charters of our Board committees |
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Corporate Governance Guidelines |
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Related Person Transactions Policy |
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Standards for Director Independence |
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Other governance materials and reports that we file with the SEC. Copies of these documents also may be obtained free of charge by writing or calling the Corporate Secretary, Dover Corporation, 3005 Highland Parkway, Downers Grove, Illinois 60515, telephone: (630) 541-1540. |
All Dover Corporation website addresses contained in this proxy statement are intended to be inactive, textual references only. The information on, or accessible through, any such website identified in this proxy statement is not a part of, and is not incorporated by reference into, this proxy statement.
Caution Concerning Forward-Looking Statements
This proxy statement contains forward-looking statements that are inherently subject to uncertainties and risks. We caution investors to be guided in their analysis of Dover by referring to the documents we file with the SEC, including our Annual Report on Form 10-K for 2023, for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements.
DOVER CORPORATION – 2024 Proxy Statement 85
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
(2) Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period.
(3) Restructuring and other costs relate to actions taken for headcount reductions, facility consolidations and site closures, product line exits, and other asset charges. FY 2023 include $3.3 million of non-cash asset impairment charges for our Climate & Sustainability Technologies segment. FY 2022 include $5.5 million of non-cash foreign currency translation losses reclassified to earnings included within restructuring and other costs and $2.1 million related to write-off of assets due to an exit from certain Latin America countries for our Climate & Sustainability Technologies segment. FY 2021 for our Climate & Sustainability Technologies segment include a $12.1 million other than temporary impairment charge related to an equity method investment and a $6.1 million write-off of assets incurred in connection with an exit from certain Latin America countries. FY 2021 include a $9.1 million payment received for previously incurred restructuring costs related to a product line exit in our Engineered Products segment.
(4) FY 2023 disposition costs relate to the sale of De-Sta-Co which is expected to close in Q1 2024.
(5) FY2021 represents a $181.6 million gain on disposition of UB in our Climate & Sustainability Technologies segment and a $24.7 million gain on disposition of our RWB equity method investment in our Engineered Products segment. FY2020 represents a gain on the sale of AMS Chino, including working capital adjustments, in our Climate & Sustainability Technologies segment.
(6) Represents a loss on early extinguishment of €300,000 2.125% notes due 2020 and $450,000 4.30% notes due 2021.
(7) Represents a loss on assets held for sale of Finder Pompe S.r.l. (“Finder”). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
(8) FY 2022 represent a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act.
* Per share data and totals may be impacted by rounding.
Segment Earnings
Total segment earnings is defined as the sum of earnings before purchase accounting expenses, restructuring and other costs/benefits, loss on assets held for sale, disposition costs, gain on dispositions, corporate expenses/other, interest expense, interest income and provision for income taxes for all segments. Total segment earnings margin is defined as total segment earnings divided by revenue.
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| (in millions) |
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2023 |
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2022 |
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2021 |
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2020 |
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2019 |
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|
|
|
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| Net earnings |
|
|
1,057 |
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|
1,065 |
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|
|
1,124 |
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|
|
683 |
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|
|
678 |
|
|
|
|
|
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| Provision for income taxes1 |
|
|
213 |
|
|
|
222 |
|
|
|
277 |
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|
158 |
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|
165 |
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|
|
|
|
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| Earnings before provision for income taxes |
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|
1,270 |
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|
|
1,288 |
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|
|
1,401 |
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|
842 |
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|
843 |
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| Interest income |
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(13 |
) |
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(4 |
) |
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(4 |
) |
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(4 |
) |
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(5 |
) |
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| Interest expense |
|
|
131 |
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|
|
116 |
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|
|
106 |
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|
|
112 |
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|
|
126 |
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| Corporate expense / other 2 |
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|
151 |
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|
135 |
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|
156 |
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119 |
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|
142 |
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| Loss on assets held for sale 3 |
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|
— |
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— |
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— |
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— |
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47 |
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| Disposition costs 4 |
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1 |
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— |
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— |
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— |
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— |
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| Gain on dispositions 5 |
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— |
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— |
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(206 |
) |
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(5 |
) |
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— |
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| Restructuring and other costs (benefits) 6 |
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64 |
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39 |
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38 |
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51 |
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32 |
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| Purchase accounting expenses 7 |
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165 |
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181 |
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142 |
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139 |
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138 |
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| Total segment earnings 8 |
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1,768 |
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1,755 |
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1,633 |
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1,254 |
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1,324 |
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| Total segment earnings margin |
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21.0% |
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20.6% |
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20.7% |
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18.8% |
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18.6% |
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(1) FY 2023 include the net income tax benefit of internal reorganizations executed in 2023. FY 2022 include a reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act.
(2) Certain expenses are maintained at the corporate level and not allocated to the segments. These expenses include executive and functional compensation costs, non-service pension costs, non-operating insurance expenses, shared business services overhead costs, deal-related expenses and various administrative expenses relating to the corporate headquarters.
(3) Represents a loss on assets held for sale of Finder Pompe S.r.l. (“Finder”). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
(4) FY 2023 disposition costs relate to the sale of De-Sta-Co which is expected to close in Q1 2024.
(5) Gain on dispositions includes working capital adjustments related to dispositions.
DOVER CORPORATION – 2024 Proxy Statement 87
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
(6) Restructuring and other costs (benefits) relate to actions taken for headcount reductions, facility consolidations and site closures, exit costs, and other asset charges.
(7) Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period.
(8) Refer to Non-GAAP Disclosures section for definition.
Free Cash Flow
Free cash flow represents net cash provided by operating activities minus capital expenditures as follows:
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| (in millions) |
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2023 |
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2022 |
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2021 |
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2020 |
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2019 |
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| Cash flow from operating activities |
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$ |
1,336 |
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$ |
806 |
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$ |
1,116 |
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$ |
1,105 |
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$ |
945 |
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| Less: Capital expenditures |
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(193 |
) |
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(221 |
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(171 |
) |
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(166 |
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(187 |
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| Free cash flow |
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1,144 |
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|
585 |
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944 |
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|
939 |
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759 |
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| |
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| Free cash flow as a percentage of revenue |
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13.6% |
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6.9% |
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11.9% |
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14.1% |
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10.6% |
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| Free cash flow as a percentage of adjusted net earnings |
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92.5% |
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|
48.2% |
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85.2% |
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|
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113.9% |
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|
87.0% |
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Organic Revenue Growth Factor
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2023
Full Year |
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| Organic |
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(1.5)% |
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| Acquisitions |
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0.9% |
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| Currency translation |
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(0.2)% |
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| Total |
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(0.8)% |
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Adjusted net earnings represents net earnings adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, disposition costs, gain on dispositions, loss on extinguishment of debt, and loss on assets held for sale. Purchase accounting expenses are primarily comprised of amortization of intangible assets and charges related to fair value step-ups for acquired inventory sold during the period. We exclude after-tax purchase accounting expenses because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions the Company consummates. While we have a history of acquisition activity, our acquisitions do not happen in a predictive cycle. Exclusion of purchase accounting expenses facilitates more consistent comparisons of operating results over time. We believe it is important to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation. We exclude the other items because they occur for reasons that may be unrelated to the Company’s commercial performance during the period and/or management believes they are not indicative of the Company’s ongoing operating costs or gains in a given period.
Adjusted diluted net earnings per share or adjusted earnings per share represent diluted EPS adjusted for the effect of purchase accounting expenses, restructuring and other costs/benefits, Tax Cuts and Jobs Act, disposition costs, gain on dispositions, loss on extinguishment of debt, and loss on assets held for sale.
Management believes these measures are useful to investors to better understand the Company’s ongoing profitability as it will better reflect the Company’s core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers.
Free cash flow represents net cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of adjusted net earnings equals free cash flow divided by adjusted net earnings. Management believes that free cash flow and free cash flow ratios are important measures of liquidity because they provide management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue and bookings performance and trends between periods.
DOVER CORPORATION – 2024 Proxy Statement 88
Pay vs Performance Disclosure - USD ($)
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12 Months Ended |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
| Pay vs Performance Disclosure |
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| Pay vs Performance Disclosure, Table |
The following table shows the total compensation for our NEOs for the past four fiscal years as set forth in the Summary Compensation Table, the “compensation actually paid” to our Principal Executive Officer (“PEO”) and, on an average basis, our other NEOs (in each case, as determined under Item 402(v) of Regulation S-K), our total shareholder return (“TSR”), the TSR of the S&P 500 Industrials Index over the same period (which is the “Peer Group” in the Pay versus Performance Table below), our net income, and our adjusted earnings. For purposes of the Pay Versus Performance Table, Richard Tobin is the only principal executive officer represented. For fiscal 2023 through 2021, Messrs. Cerepak and Juneja and Mses. Cabrera and Bors are the other named executive officers reflected in the Pay versus Performance Table. For fiscal 2020, Messrs. Cerepak and Juneja, and Malinas and Ms. Cabrera are the other named executive officers reflected in the Pay versus Performance Table. Pay versus Performance Table
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Actually Paid
to PEO
($)(1) |
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Value of $100 Investment
based on: |
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Total Shareholder Return ($) |
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Peer Group Total Shareholder Return ($) |
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2023 |
|
|
16,795,101 |
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16,472,170 |
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2,904,216 |
|
|
|
2,784,284 |
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|
|
142 |
|
|
|
150 |
|
|
|
1,057 |
|
|
|
1,237 |
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2022 |
|
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14,143,252 |
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|
(13,748,922 |
) |
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2,364,424 |
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(619,414) |
|
|
|
123 |
|
|
|
127 |
|
|
|
1,065 |
|
|
|
1,213 |
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
14,085,860 |
|
|
|
56,156,068 |
|
|
|
2,449,002 |
|
|
|
6,425,459 |
|
|
|
163 |
|
|
|
135 |
|
|
|
1,124 |
|
|
|
1,109 |
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
11,982,338 |
|
|
|
9,059,384 |
|
|
|
2,443,822 |
|
|
|
2,590,438 |
|
|
|
112 |
|
|
|
111 |
|
|
|
683 |
|
|
|
824 |
|
| |
|
The table below provides the adjustments required by Item 402(v) to be made to the Summary Compensation Table totals to determine “compensation actually paid” as reported in the Pay versus Performance Table. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Subtract
amounts
reported in the
“Stock
Awards” and
“Option
Awards”
columns in
the SCT for
applicable FY |
|
|
YE Value of
Current Year
Awards
Outstanding
as of YE |
|
|
Change in
Value as of YE
for Prior Year
Awards
Outstanding
as of YE |
|
|
Change in
Value as of
Vesting Date
for Prior Year
Awards That
Vested During
the Year |
|
|
Subtract
Change in
Actuarial
Value of
Pension
Benefits
During
Year |
|
|
Increase
for Service
Cost and, if applicable,
Prior
Service
Cost for pension
plans |
|
|
Total
Adjustments |
|
CEO |
|
|
|
|
|
|
|
|
|
2023 |
|
|
$(13,295,490) |
|
|
|
$11,363,301 |
|
|
|
$1,044,413 |
|
|
|
$564,844 |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($322,931) |
|
|
|
|
|
|
|
|
|
2022 |
|
|
$(10,414,752) |
|
|
|
$7,113,700 |
|
|
|
($13,168,694) |
|
|
|
($11,422,428) |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($27,892,174) |
|
|
|
|
|
|
|
|
|
2021 |
|
|
$(9,388,609) |
|
|
|
$20,394,184 |
|
|
|
$20,486,457 |
|
|
|
$10,578,176 |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
$42,070,208 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
$(8,698,666) |
|
|
|
$9,339,279 |
|
|
|
$4,438,218 |
|
|
|
($8,001,785) |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($2,922,954) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg. Other NEOs |
|
|
|
|
|
|
|
|
|
2023 |
|
|
$(1,583,212) |
|
|
|
$1,353,124 |
|
|
|
$120,430 |
|
|
|
$70,125 |
|
|
|
($181,806) |
|
|
|
$101,407 |
|
|
|
($119,932) |
|
|
|
|
|
|
|
|
|
2022 |
|
|
$(1,274,395) |
|
|
|
$870,461 |
|
|
|
($1,541,476) |
|
|
|
($1,164,392) |
|
|
|
$0 |
|
|
|
$125,964 |
|
|
|
($2,983,839) |
|
|
|
|
|
|
|
|
|
2021 |
|
|
$(1,092,135) |
|
|
|
$2,372,348 |
|
|
|
$2,192,026 |
|
|
|
$417,286 |
|
|
|
($45,668) |
|
|
|
$132,600 |
|
|
|
$3,976,457 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
$(1,019,375) |
|
|
|
$1,094,445 |
|
|
|
$418,328 |
|
|
|
($137,024) |
|
|
|
($324,462) |
|
|
|
$114,705 |
|
|
|
$146,616 |
|
| |
|
Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement. |
|
|
|
|
| Company Selected Measure Name |
Adjusted Earnings
|
|
|
|
| Named Executive Officers, Footnote |
For purposes of the Pay Versus Performance Table, Richard Tobin is the only principal executive officer represented. For fiscal 2023 through 2021, Messrs. Cerepak and Juneja and Mses. Cabrera and Bors are the other named executive officers reflected in the Pay versus Performance Table. For fiscal 2020, Messrs. Cerepak and Juneja, and Malinas and Ms. Cabrera are the other named executive officers reflected in the Pay versus Performance Table.
|
|
|
|
| PEO Total Compensation Amount |
$ 16,795,101
|
$ 14,143,252
|
$ 14,085,860
|
$ 11,982,338
|
| PEO Actually Paid Compensation Amount |
$ 16,472,170
|
(13,748,922)
|
56,156,068
|
9,059,384
|
| Adjustment To PEO Compensation, Footnote |
| |
|
The table below provides the adjustments required by Item 402(v) to be made to the Summary Compensation Table totals to determine “compensation actually paid” as reported in the Pay versus Performance Table. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Subtract
amounts
reported in the
“Stock
Awards” and
“Option
Awards”
columns in
the SCT for
applicable FY |
|
|
YE Value of
Current Year
Awards
Outstanding
as of YE |
|
|
Change in
Value as of YE
for Prior Year
Awards
Outstanding
as of YE |
|
|
Change in
Value as of
Vesting Date
for Prior Year
Awards That
Vested During
the Year |
|
|
Subtract
Change in
Actuarial
Value of
Pension
Benefits
During
Year |
|
|
Increase
for Service
Cost and, if applicable,
Prior
Service
Cost for pension
plans |
|
|
Total
Adjustments |
|
CEO |
|
|
|
|
|
|
|
|
|
2023 |
|
|
$(13,295,490) |
|
|
|
$11,363,301 |
|
|
|
$1,044,413 |
|
|
|
$564,844 |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($322,931) |
|
|
|
|
|
|
|
|
|
2022 |
|
|
$(10,414,752) |
|
|
|
$7,113,700 |
|
|
|
($13,168,694) |
|
|
|
($11,422,428) |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($27,892,174) |
|
|
|
|
|
|
|
|
|
2021 |
|
|
$(9,388,609) |
|
|
|
$20,394,184 |
|
|
|
$20,486,457 |
|
|
|
$10,578,176 |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
$42,070,208 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
$(8,698,666) |
|
|
|
$9,339,279 |
|
|
|
$4,438,218 |
|
|
|
($8,001,785) |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($2,922,954) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg. Other NEOs |
|
|
|
|
|
|
|
|
|
2023 |
|
|
$(1,583,212) |
|
|
|
$1,353,124 |
|
|
|
$120,430 |
|
|
|
$70,125 |
|
|
|
($181,806) |
|
|
|
$101,407 |
|
|
|
($119,932) |
|
|
|
|
|
|
|
|
|
2022 |
|
|
$(1,274,395) |
|
|
|
$870,461 |
|
|
|
($1,541,476) |
|
|
|
($1,164,392) |
|
|
|
$0 |
|
|
|
$125,964 |
|
|
|
($2,983,839) |
|
|
|
|
|
|
|
|
|
2021 |
|
|
$(1,092,135) |
|
|
|
$2,372,348 |
|
|
|
$2,192,026 |
|
|
|
$417,286 |
|
|
|
($45,668) |
|
|
|
$132,600 |
|
|
|
$3,976,457 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
$(1,019,375) |
|
|
|
$1,094,445 |
|
|
|
$418,328 |
|
|
|
($137,024) |
|
|
|
($324,462) |
|
|
|
$114,705 |
|
|
|
$146,616 |
|
|
|
|
|
| Non-PEO NEO Average Total Compensation Amount |
$ 2,904,216
|
2,364,424
|
2,449,002
|
2,443,822
|
| Non-PEO NEO Average Compensation Actually Paid Amount |
$ 2,784,284
|
(619,414)
|
6,425,459
|
2,590,438
|
| Adjustment to Non-PEO NEO Compensation Footnote |
| |
|
The table below provides the adjustments required by Item 402(v) to be made to the Summary Compensation Table totals to determine “compensation actually paid” as reported in the Pay versus Performance Table. “Compensation actually paid” does not necessarily represent cash and/or equity value transferred to the applicable NEO without restriction, but rather is a value calculated under applicable SEC rules. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Subtract
amounts
reported in the
“Stock
Awards” and
“Option
Awards”
columns in
the SCT for
applicable FY |
|
|
YE Value of
Current Year
Awards
Outstanding
as of YE |
|
|
Change in
Value as of YE
for Prior Year
Awards
Outstanding
as of YE |
|
|
Change in
Value as of
Vesting Date
for Prior Year
Awards That
Vested During
the Year |
|
|
Subtract
Change in
Actuarial
Value of
Pension
Benefits
During
Year |
|
|
Increase
for Service
Cost and, if applicable,
Prior
Service
Cost for pension
plans |
|
|
Total
Adjustments |
|
CEO |
|
|
|
|
|
|
|
|
|
2023 |
|
|
$(13,295,490) |
|
|
|
$11,363,301 |
|
|
|
$1,044,413 |
|
|
|
$564,844 |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($322,931) |
|
|
|
|
|
|
|
|
|
2022 |
|
|
$(10,414,752) |
|
|
|
$7,113,700 |
|
|
|
($13,168,694) |
|
|
|
($11,422,428) |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($27,892,174) |
|
|
|
|
|
|
|
|
|
2021 |
|
|
$(9,388,609) |
|
|
|
$20,394,184 |
|
|
|
$20,486,457 |
|
|
|
$10,578,176 |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
$42,070,208 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
$(8,698,666) |
|
|
|
$9,339,279 |
|
|
|
$4,438,218 |
|
|
|
($8,001,785) |
|
|
|
$0 |
|
|
|
$0 |
|
|
|
($2,922,954) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg. Other NEOs |
|
|
|
|
|
|
|
|
|
2023 |
|
|
$(1,583,212) |
|
|
|
$1,353,124 |
|
|
|
$120,430 |
|
|
|
$70,125 |
|
|
|
($181,806) |
|
|
|
$101,407 |
|
|
|
($119,932) |
|
|
|
|
|
|
|
|
|
2022 |
|
|
$(1,274,395) |
|
|
|
$870,461 |
|
|
|
($1,541,476) |
|
|
|
($1,164,392) |
|
|
|
$0 |
|
|
|
$125,964 |
|
|
|
($2,983,839) |
|
|
|
|
|
|
|
|
|
2021 |
|
|
$(1,092,135) |
|
|
|
$2,372,348 |
|
|
|
$2,192,026 |
|
|
|
$417,286 |
|
|
|
($45,668) |
|
|
|
$132,600 |
|
|
|
$3,976,457 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
$(1,019,375) |
|
|
|
$1,094,445 |
|
|
|
$418,328 |
|
|
|
($137,024) |
|
|
|
($324,462) |
|
|
|
$114,705 |
|
|
|
$146,616 |
|
|
|
|
|
| Compensation Actually Paid vs. Total Shareholder Return |
|
|
|
|
| Compensation Actually Paid vs. Net Income |
|
|
|
|
| Compensation Actually Paid vs. Company Selected Measure |
|
|
|
|
| Total Shareholder Return Vs Peer Group |
|
|
|
|
| Tabular List, Table |
2023 Most Important Performance Measure In addition to TSR, which is already included in the PVP table, we believe the following measure is the most important financial performance measure used to link compensation actually paid to the NEOs to Company performance.
|
|
|
|
| Total Shareholder Return Amount |
$ 142
|
123
|
163
|
112
|
| Peer Group Total Shareholder Return Amount |
150
|
127
|
135
|
111
|
| Net Income (Loss) |
$ 1,057
|
$ 1,065
|
$ 1,124
|
$ 683
|
| Company Selected Measure Amount |
1,237
|
1,213
|
1,109
|
824
|
| PEO Name |
Richard Tobin
|
|
|
|
| Measure:: 1 |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Name |
Adjusted Earnings
|
|
|
|
| Non-GAAP Measure Description |
Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement.
|
|
|
|
| PEO |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
$ (322,931)
|
$ (27,892,174)
|
$ 42,070,208
|
$ (2,922,954)
|
| PEO | Amounts Reported In The Stock Awards And Option Awards Columns In The SCT For Applicable FY [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(13,295,490)
|
(10,414,752)
|
(9,388,609)
|
(8,698,666)
|
| PEO | YE Value Of Current Year Awards Outstanding As Of YE [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
11,363,301
|
7,113,700
|
20,394,184
|
9,339,279
|
| PEO | Change In Value As Of YE For Prior Year Awards Outstanding As Of YE [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
1,044,413
|
(13,168,694)
|
20,486,457
|
4,438,218
|
| PEO | Change In Value As Of Vesting Date For Prior Year Awards That Vested During The Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
564,844
|
(11,422,428)
|
10,578,176
|
(8,001,785)
|
| PEO | Subtract Change In Actuarial Value Of Pension Benefits During Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
0
|
0
|
0
|
| PEO | Increase For Service Cost And, If Applicable, Prior Service Cost For Pension Plans [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
0
|
0
|
0
|
0
|
| Non-PEO NEO |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(119,932)
|
(2,983,839)
|
3,976,457
|
146,616
|
| Non-PEO NEO | Amounts Reported In The Stock Awards And Option Awards Columns In The SCT For Applicable FY [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(1,583,212)
|
(1,274,395)
|
(1,092,135)
|
(1,019,375)
|
| Non-PEO NEO | YE Value Of Current Year Awards Outstanding As Of YE [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
1,353,124
|
870,461
|
2,372,348
|
1,094,445
|
| Non-PEO NEO | Change In Value As Of YE For Prior Year Awards Outstanding As Of YE [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
120,430
|
(1,541,476)
|
2,192,026
|
418,328
|
| Non-PEO NEO | Change In Value As Of Vesting Date For Prior Year Awards That Vested During The Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
70,125
|
(1,164,392)
|
417,286
|
(137,024)
|
| Non-PEO NEO | Subtract Change In Actuarial Value Of Pension Benefits During Year [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
(181,806)
|
0
|
(45,668)
|
(324,462)
|
| Non-PEO NEO | Increase For Service Cost And, If Applicable, Prior Service Cost For Pension Plans [Member] |
|
|
|
|
| Pay vs Performance Disclosure |
|
|
|
|
| Adjustment to Compensation, Amount |
$ 101,407
|
$ 125,964
|
$ 132,600
|
$ 114,705
|