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6496 University Parkway |
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Telephone (941) 556-2601 |
Sarasota, Florida 34240 |
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Fax (941) 556-2670 |
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Roper Technologies, Inc. |
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April 26, 2024
Dear Fellow Shareholders:
As your Board of Directors, we oversee Roper’s efforts to continually create sustainable long-term value for you. Together with our management team, we continuously enhance and efficiently execute our strategy through prudent risk management, disciplined capital deployment, sound strategic thinking, disciplined operational rigor, performance-driven compensation programs, effective talent and succession planning, adherence to the highest ethical standards and levels of integrity, and ongoing review and refinement of the Board’s governance practices.
Our Strategy for Long-Term and Elite Value Creation for Shareholders
Over the past fifteen years, our shareholders earned a compound annual return of 19.1% and a total shareholder return of 1273.7%, over two times the total return of the S&P 500 of 610.8%. In 2023, Roper delivered a 26.9% annual return to our shareholders, slightly ahead of that of the S&P 500.
Our long history of superior shareholder returns is the result of Roper’s simple, yet powerful strategy:
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Cash Generation Through Operating Excellence: Our enterprise consists of niche, asset-light businesses with leading software solutions and technologies that generate significant free cash flow, enabling future investments for sustainable long-term growth. Operating excellence, underpinned by our strategic focus on intellectual capital, product development, go-to-market strategies, and a high degree of customer intimacy drives cash generation which, in 2023, resulted in another strong year of performance with adjusted operating cash flow and adjusted free cash flow of $2.07 billion and $1.96 billion, respectively. |
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Disciplined Capital Deployment: We have a unique and disciplined capital deployment model that has guided the successful investment of billions of dollars into additional businesses becoming part of the Roper portfolio. Unlike many companies that use cash to pay large dividends and routinely implement share buyback plans, Roper deploys the vast majority of its available cash to acquire new businesses to fuel compounding cash flow growth and value creation for shareholders. After the successful completion of our divestiture strategy to reduce the cyclicality and asset intensity within our enterprise in 2022, this past year we allocated $2.1 billion of capital toward vertical software acquisitions, highlighted by Syntellis Performance Solutions, which was successfully combined with our Strata Decision Technology business during the year. We entered 2024 poised to deploy substantial capital towards our acquisition strategy, and in February completed the acquisition of Procare Solutions, a provider of niche, mission critical software for early childhood education centers, for $1.75 billion (net of future tax benefits). |
The Board’s Role in Roper’s Success
The Board contributes significantly to Roper’s strong performance. As directors, each of us commits to the extensive time obligation and rigorous workload required to serve on Roper’s Board, including participation in at least 15 days of Board meetings each year. We continually monitor the existing portfolio of Roper businesses, review capital deployment opportunities, and carefully examine the ways Roper can create additional value for shareholders. Between Board meetings, we continue our discussions with management and each other, enabling the Company to draw from our broad experiences and expertise.
Our direct involvement in and deep understanding of the Company allows us to address a multitude of issues, including acquisition selection, capital deployment, and succession planning, while sustaining Roper’s successful culture and business model.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) provides information about our compensation objectives and policies for our CEO and other executive officers included in the Summary Compensation Table and referred to in this CD&A as “named executive officers.” Our named executive officers for 2023 are:
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L. Neil Hunn, President and Chief Executive Officer; |
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Jason P. Conley, Executive Vice President and Chief Financial Officer; |
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John K. Stipancich, Executive Vice President, General Counsel and Corporate Secretary; and |
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Robert C. Crisci, Former Executive Vice President and Chief Financial Officer. |
On February 1, 2023, Roper transitioned the role of Chief Financial Officer from Mr. Crisci to Mr. Conley. Mr. Crisci has continued in a non-employee strategic advisor role since this date, and his availability to Roper as a consultant is expected to end on January 31, 2025.
OVERVIEW
With the goal of generating long-term value for our shareholders, we maintain an executive compensation program designed to:
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attract and retain executives with the leadership skills, attributes, and experience necessary to succeed in an enterprise with Roper’s unique strategic focus, capital deployment strategy, and broad portfolio diversity; |
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motivate executives to demonstrate exceptional personal performance and perform consistently at or above the levels that we expect, over the long-term and through a range of economic cycles; |
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link compensation to the achievement of goals and objectives that we believe best correlate with the creation of long-term shareholder value; and |
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compensate executives in a manner consistent with private equity opportunities in light of their dual obligations for (i) supervising the operating performance of our diverse set of 28 businesses, and (ii) effectively deploying capital to acquire high-quality companies consistent with our strategic focus. |
To achieve these objectives our compensation program combines annual and long-term components, cash and equity, and fixed and variable elements, with a bias toward long-term equity awards tied closely to driving growth and shareholder returns. Our executive compensation program rewards our executive officers when they help increase long-term shareholder value, achieve annual business goals, effectively deploy capital, and successfully execute other strategic objectives.
2023 Financial Performance
In 2023, following the completion of our portfolio transformation we continued to demonstrate the resilience of our operating model and produced another year of strong results.(1)
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Annual shareholder return of 26.9%, compared to 26.3% for the S&P 500; |
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GAAP revenue increased 15% to $6.18 billion and organic revenue increased 8%; |
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Adjusted EBITDA increased by 16% to $2.51 billion and adjusted EBITDA margin improved 20 basis points to 40.6%; |
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Adjusted operating cash flow increased 33% to $2.07 billion and adjusted free cash flow increased 32% to $1.96 billion; |
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We deployed $2.1 billion of capital toward vertical software acquisitions, highlighted by Syntellis Performance Solutions, which was successfully combined with our Strata Decision Technology business; and |
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Our annual dividend increased by 10%, increasing for the 31st consecutive year. |
(1) |
This financial information is presented on a continuing operations basis and an adjusted (non-GAAP) basis. A reconciliation from non-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations”. |
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Roper Technologies, Inc. 2024 Proxy Statement |
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21 |
COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)
The Compensation Committee has maintained a simple program that drives long-term performance and superior value creation for shareholders enabling Roper to attract, retain, and motivate an outstanding leadership team.
Compensation Consultant
The Compensation Committee has retained the services of Compensia, a national compensation consulting firm, (the “Consultant”), to closely monitor developments and trends in executive compensation and to provide recommendations for appropriate adjustments to the Company’s compensation program, policies and practices in line with the Company’s business and talent strategies and investor expectations.
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The Consultant is independent, reports directly to the Chair of the Compensation Committee and has never performed other work for the Company. Each year the Compensation Committee confirms that its engagement of the Consultant does not raise any conflicts of interest, and consistent with prior years, for 2023 there were no conflicts of interest. |
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The Consultant attends all meetings of the Compensation Committee where evaluations of the effectiveness of our overall executive compensation program are conducted or where compensation for named executive officers is analyzed or approved. |
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The Chair of the Compensation Committee meets with the Consultant in advance of committee meetings and confers with the Consultant between meetings. |
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The Consultant assists in gathering and analyzing market data on compensation levels and provides expert knowledge of marketplace trends and best practices relating to competitive pay levels as well as developments in regulatory and technical matters. |
Roles of Our Named Executive Officers
While the Compensation Committee is ultimately responsible for making all compensation decisions affecting our named executive officers, our CEO participates in the process because of his close day-to-day association with the other named executive officers and his knowledge of the Company’s diverse business operations.
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Our CEO discusses with the Compensation Committee the performance of the Company and of each named executive officer, including himself. The CEO also discusses with the Compensation Committee the performance of other key executives. |
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The CEO makes recommendations on the components of compensation for the named executive officers, other than himself, but does not participate in the portion of the Compensation Committee meeting regarding the review of his own performance or the determination of the actual amounts of his compensation. |
Our Chief Financial Officer and our Controller also assist the Compensation Committee as an information resource in regard to metrics related to incentive compensation. Our General Counsel also provides support to the Committee, as needed, with respect to his areas of expertise.
Comparative Compensation Information
Market pay levels and practices, including those of a self-selected peer group, are among many factors the Compensation Committee considers in making compensation decisions.
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Roper Technologies, Inc. 2024 Proxy Statement |
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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)
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For the 36-month period of January 2023 through December 2025, adjusted operating cash flow less capital expenditures and capitalized software (as a percentage of net revenue) must be at the 50th percentile of the S&P 500 (excluding finance, real estate, and utilities) (the “Modified S&P 500”). At the 50th percentile, 17.5% of the award shall vest, and at the 75th percentile, 50% of the award shall vest, with pro-rated vesting using straight-line interpolation between these two points. No portion of this half of the award will vest if the Company fails to reach at least the 50th percentile. |
For 2024 and the foreseeable future, the Committee revised the performance-based restricted stock program to incentivize superior performance and align with peer compensation practices. Under the revised program the named executive officers will have the opportunity to vest in up to 200% of their target long-term restricted stock awards.
Revised Long-Term Metrics. For 2024 awards, the Committee has replaced cumulative adjusted EBITDA as a performance metric with a three-year adjusted net earnings compound growth rate (“CAGR”), and the Committee has eliminated the relative cash flow metric. The Committee has determined that an adjusted net earnings CAGR better aligns with Roper’s strategy of delivering consistent organic growth and disciplined capital deployment while reflecting the cost of capital utilized to support the Company’s strategy. Vesting of the 2024 target level performance-based restricted stock award will be contingent on the Company delivering a specified CAGR for adjusted net earnings for the 36-month performance period subject to a relative TSR performance modifier.
Overdrive Opportunity. As part of the performance-based restricted stock award for 2024, the named executive officers may vest in additional shares up to an incremental 100% of their target-level number of shares (the “Overdrive Shares”) if the adjusted net earnings CAGR for the 36-month performance period exceeds 10% as set forth below:
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If the Company achieves a 14% CAGR of adjusted net earnings over the performance period, 40% of the Overdrive Shares shall vest; and |
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If the Company achieves an 18% CAGR of adjusted net earnings, an additional 60% of the Overdrive Shares shall vest. |
Straight-line interpolation will be used to determine the number of shares that vest between all target ranges (beginning at 10% CAGR with respect to Overdrive Shares).
TSR Modifier. The total number of performance-based shares (including Overdrive Shares) that vest, if any, will be subject to modification based on the Company’s relative total shareholder return (“TSR”) over the 36-month performance period as follows:
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If the Company’s TSR is at or below the 30th percentile of the S&P 500, the number of shares vesting will be reduced by 25%; |
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If the Company’s TSR is at the 55th percentile of the S&P 500, no adjustment to the number of shares vesting shall be made; and |
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If the Company’s TSR is at or exceeds the 80th percentile of the S&P 500, an additional 25% of the shares shall vest, but not to exceed 200% of the target-level number of shares. |
Pro-rated vesting using straight-line interpolation between 30th and 80th percentiles of relative TSR shall be used to determine the applicable vesting percentage. However, in no event will a named executive officer earn more than 200% of their target-level shares.
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Roper Technologies, Inc. 2024 Proxy Statement |
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EXECUTIVE COMPENSATION (CONTINUED)
Offer Letters to Messrs. Hunn and Stipancich, and Special Long-Term Cash Incentive Arrangement with Mr. Hunn
Mr. Hunn. Pursuant to an offer letter dated August 18, 2011, if Mr. Hunn’s employment were to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary. In addition, Mr. Hunn is party to a long-term cash incentive arrangement, the material terms of which may be found in the CD&A section above captioned “Analysis of 2023 Compensation—CEO Special Long-Term Cash Incentive”.
Mr. Stipancich. Pursuant to an offer letter dated June 17, 2016, if Mr. Stipancich’s employment were to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary, plus a pro-rated bonus based upon Company performance.
Summary of Termination Payments and Benefits
The following tables summarize the value of the termination payments and benefits that each of our named executive officers employed by Roper as of year-end would receive if he had terminated employment on December 31, 2023 under the circumstances shown. Scenarios for termination for cause, voluntary resignation, and retirement have not been included because, in those circumstances, no severance or other additional payments would be made to named executive officers. Other than with respect to Mr. Hunn’s Special Long-Term Cash Incentive Award, scenarios for termination due to death or disability have not been included because they do not discriminate in scope, terms or operation in favor of named executive officers compared to the benefits offered to all salaried employees.
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Roper Technologies, Inc. 2024 Proxy Statement |
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EXECUTIVE COMPENSATION (CONTINUED)
(2) |
The amounts in this row represent the actually earned amount of Mr. Hunn’s Special Long-Term Cash Incentive Award deemed to have been payable under the above scenarios if they had occurred on December 29, 2023 (and prior to Mr. Hunn’s actual earning of the award payout). The maximum amount to be paid under the Special Long-Term Cash Incentive Award is $18,605,000. An amount of $17,842,000 was actually earned under the award as of December 31, 2023. Mr. Hunn has deferred his receipt of a portion of the long-term incentive amount. As a result, he received an approximate 7.5% match ($1,326,782) on the amount of the special long-term cash incentive award that he earned. In general, under each scenario, disclosure is provided because Mr. Hunn was entitled to a pro-rated portion of the five-year award, which at December 29, 2023, was assumed to be the full 100% of the award. In the event of Mr. Hunn’s death or disability, the award would have remained outstanding, and upon the certification of the performance criteria by the Compensation Committee at the conclusion of the performance period, the amount earned would have been paid to Mr. Hunn’s estate. |
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Based on closing market price of our common stock on December 29, 2023 of $545.17 per share. |
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Under the terms of our 2016 and 2021 Incentive Plans, if within two years after a change in control, employment is terminated by the employee for good reason or by the acquirer without cause, or if the acquirer does not assume the awards upon a change in control, (i) outstanding stock options become fully exercisable, (ii) time-based vesting restrictions on outstanding restricted stock awards lapse, and (iii) the target payout opportunities on outstanding performance-based restricted stock awards shall be deemed to have been fully earned (subject to the conditions provided in the 2016 and 2021 Incentive Plans). |
CEO Pay Ratio
As required by SEC rules, we compared the total compensation of our CEO in 2023 to that of our median employee for the same period. Through our core human capital management system with supplementation from manual inputs, we collected information for our global workforce of 16,810 employees (10,885 of which are based in the United States), including our full-time, part-time and temporary workers, and excluded our employees in Germany (92) and France (90) under the de minimis exemption.
We identified our median employee as of December 31, 2023 by applying a consistent compensation measure for the period from January 1, 2023 to December 31, 2023 across our global employee population—annual salary or hourly pay, bonus and commissions (excluding equity compensation because inclusion of such would have had no impact on the determination of the median employee). We annualized the compensation for our full-time and part-time employees who were newly-hired in 2023. Our median employee’s total 2023 compensation was $93,861 and our CEO’s was $41,314,583 ($18,998 more than as reported in the Summary Compensation Table above due to the inclusion of certain employee benefits). Accordingly, our 2023 CEO to Median Employee Pay Ratio was 440:1.
SEC rules for identifying the median employee permit companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Consequently, the pay ratios reported by other companies may not be comparable to the pay ratio reported by Roper.
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Roper Technologies, Inc. 2024 Proxy Statement |
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PROPOSAL 2: ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS
Pursuant to Section 14A of the Exchange Act, we are seeking your advisory vote approving the compensation of our named executive officers as disclosed in this Proxy Statement. We believe that our executive compensation program is structured in the best manner possible to support our business objectives, evidenced by the superior long-term returns we continue to deliver to our shareholders. Over the past 5 and 10 years, our compound annual return to shareholders was 16.0% and 15.3%, respectively, compared to the S&P 500’s return over the same periods of 15.7% and 12.0%, respectively.
Our executive compensation program is designed to provide competitive total compensation that is tied to the achievement of Company performance objectives and to attract, motivate and retain individuals who will build long-term value for our shareholders. See the “Proxy Statement Summary” and “Compensation Discussion and Analysis” above for key characteristics of our executive compensation program.
We are seeking shareholder approval of the following resolution:
RESOLVED, that the compensation paid to the Company’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the related material disclosed in this Proxy Statement is hereby APPROVED.
The vote on this proposal is advisory and non-binding; however, the Compensation Committee and our Board will review the results of the vote and consider them when making future determinations regarding our executive compensation program. We conduct this Say-on-Pay vote annually, and we expect to hold our next Say-on-Pay vote at the 2025 Annual Meeting.
The Board recommends a vote “FOR” the resolution approving, on an advisory basis, the compensation of the Company’s named executive officers.
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Roper Technologies, Inc. 2024 Proxy Statement |
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AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors is currently comprised of five non-employee directors, each of whom has been determined by the Board of Directors to be independent under the Nasdaq and SEC rules. The Audit Committee’s responsibilities are set forth in its charter.
The Audit Committee oversees and reviews with the full Board of Directors any issues with respect to the Company’s financial statements, the structure of the Company’s legal and regulatory compliance, the performance and independence of the Company’s independent registered public accounting firm and the performance of the Company’s internal audit function. The Committee retains the Company’s independent registered public accounting firm to undertake appropriate reviews and audits of the Company’s financial statements, determines the compensation of the independent registered public accounting firm, and pre-approves all of their services. The Committee also periodically reviews the work performed by other public accounting firms retained by the Company to provide various financial and information technology services. The Company’s management is primarily responsible for the Company’s financial reporting process and for the preparation of the Company’s financial statements in accordance with GAAP. The Audit Committee maintains oversight of the independent registered public accounting firm by discussing the overall scope and specific plans for their audits, the results of their examinations, their evaluations of the Company’s internal accounting controls and the overall quality of the Company’s financial reporting. The Audit Committee may delegate its duties and responsibilities to a sub-committee of the Committee.
The Audit Committee maintains oversight of the Company’s internal audit function by evaluating the appointment and performance of the Company’s Vice President of internal audit and periodically meeting with this individual to receive and review reports of the work of the Company’s internal audit department. The Audit Committee meets with management on a regular basis to discuss any significant matters, internal audit recommendations, policy or procedural changes and risks or exposures, if any, that may have a material effect on the Company’s financial statements.
The Audit Committee: (i) appointed and retained PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2023; (ii) reviewed and discussed with the Company’s management the Company’s audited financial statements for the fiscal year ended December 31, 2023; (iii) discussed with PwC the matters required to be discussed by the Auditing Standard No. 1301, “Communication with Audit Committees,” issued by the Public Company Accounting Oversight Board (the “PCAOB”); (iv) received the written disclosures and the letter from PwC required by PCAOB Ethics and Independence Rule 3526, “Communications with Audit Committees Concerning Independence,” and has discussed with PwC its independence from the Company and its management; (v) discussed matters with PwC outside the presence of management; (vi) reviewed internal audit recommendations; (vii) discussed with PwC the quality of the Company’s financial reporting; and (viii) reviewed and discussed with PwC the results of the audit of the effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).
In reliance on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for filing with the SEC.
AUDIT COMMITTEE
Richard F. Wallman, Chair
Irene M. Esteves
Thomas P. Joyce, Jr.
Christopher Wright
The foregoing report and other information provided above regarding the Audit Committee should not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or the Exchange Act, except to the extent that Roper specifically incorporates this information by reference, and shall not otherwise be deemed filed under either the Securities Act or the Exchange Act.
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Roper Technologies, Inc. 2024 Proxy Statement |
INDEPENDENT PUBLIC ACCOUNTANT’S FEES
Set forth below are the professional fees billed by PwC for the fiscal years ended December 31, 2023 and 2022. It is the Audit Committee’s policy that all services performed by and all fees paid to the independent registered public accounting firm require the Audit Committee’s prior approval. As such, all audit, audit-related, tax, and other fees were pre-approved by the Audit Committee.
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Dollars in Thousands |
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Fees |
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FY 2023 |
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FY 2022 |
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Audit Fees(1) |
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5,546 |
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6,856 |
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Audit-Related Fees(2) |
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1,934 |
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4,248 |
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Tax Fees(3) |
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840 |
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450 |
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All Other Fees(4) |
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Total Fees |
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$ |
8,320 |
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11,559 |
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(1) |
Aggregate fees from PwC for audit or review services in accordance with the standards of the PCAOB and fees for services, such as statutory audits and review of documents filed with the SEC. Audit fees also include fees paid in connection with services required for compliance with Section 404 of the Sarbanes-Oxley Act. |
(2) |
Aggregate fees from PwC for assurance and related services which primarily include, with respect to 2023, due diligence on acquisition targets and additional services related to the sale of a majority interest in our industrial businesses in 2022, and, with respect to 2022, due diligence on acquisition targets and services related to the sale of a majority interest in our industrial businesses. |
(3) |
Tax fees include tax compliance, assistance with tax audits, tax advice and tax planning data. |
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All other fees include XBRL tagging services. |
As required by Section 10A(i)(1) of the Exchange Act, all audit and non-audit services to be performed by our independent registered public accounting firm must be approved in advance by the Audit Committee, subject to certain exceptions relating to non-audit services accounting for less than five percent of the total fees paid to our independent registered public accounting firm which are subsequently ratified by the Audit Committee. In addition, pursuant to Section 10A(i)(3) of the Exchange Act, as amended, the Audit Committee has established procedures by which the Chair of the Audit Committee may pre-approve such services, provided the Chair subsequently reports the details of the services to the full Audit Committee. All audit-related fees, tax fees and all other fees, as described in the table above, were approved by the Audit Committee.
PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024
The Audit Committee has appointed PwC as our independent registered public accounting firm for the year ending December 31, 2024. Our Board of Directors recommends that the shareholders ratify this appointment. PwC has been our Company’s independent registered public accounting firm since May 2002. One or more representatives of PwC are expected to be present at the Annual Meeting and will be given the opportunity to make a statement if they so desire and respond to appropriate questions of shareholders in attendance. If this proposal does not pass, the selection of our independent registered public accounting firm will be reconsidered by the Audit Committee and the Board of Directors. Even if the proposal passes, the Audit Committee may decide to select another firm at any time.
The Board of Directors recommends a vote “FOR” the approval of the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2024.
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Roper Technologies, Inc. 2024 Proxy Statement |
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57 |
PROPOSAL 4: SHAREHOLDER PROPOSAL
Mr. John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, holder of at least 10 shares of Roper Technologies, Inc. common stock, submitted the following proposal.
Proposal 4—Simple Majority Vote
Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. This includes making the necessary changes in plain English.
Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are used to block initiatives supported by most shareowners but opposed by a status quo management.
This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. These votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice. This proposal topic also received overwhelming 98%-support each at the 2023 annual meetings of American Airlines (AAL) and The Carlyle Group (CG).
The overwhelming shareholder support for this proposal topic at hundreds of major companies raises the question of why Roper Technologies had not initiated this proposal topic on its own.
Please vote yes:
Simple Majority Vote—Proposal 4
Board of Directors’ Response to the Shareholder Proposal
The Board of Directors has considered the proposal set forth above relating to the removal of supermajority voting standards in our amended and restated certificate of incorporation and amended and restated by-laws and has determined to make no voting recommendation with respect to the proposal to our stockholders. The proposal is advisory in nature only. Stockholders should note that approval of this proposal would not, by itself, implement a majority voting standard as described in the proposal.
The affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at a meeting and entitled to vote on the subject matter is the voting standard for nearly all matters voted upon by our stockholders. The only supermajority voting standard in our governing documents is set forth in our amended and restated by-laws. That provision requires the vote of at least sixty-six and two-thirds percent (66-2/3%) of the number of shares of stock entitled to vote present in person or by proxy to amend the by-laws. We believe higher voting requirements are appropriate in limited circumstances because certain fundamental matters should require broad support and consensus from our stockholders. In addition, under a majority voting standard as proposed, holders of a minority of our outstanding shares could approve certain fundamental corporate changes without broad stockholder support, as a mere majority of the votes cast at a meeting could in many cases represent significantly less than a majority of our shares outstanding.
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Roper Technologies, Inc. 2024 Proxy Statement |
INFORMATION REGARDING THE 2025 ANNUAL MEETING OF SHAREHOLDERS
If you wish to submit a matter to be considered at the 2025 Annual Meeting of Shareholders, you must comply with the procedures set forth below. Any proposal or nomination to be made to the Company should be sent to:
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Roper Technologies, Inc. |
6496 University Parkway |
Sarasota, Florida 34240 |
Attention: Corporate Secretary jstipancich@ropertech.com |
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Proxy Statement Proposals. If you intend to submit a proposal to be included in the Proxy Statement for the 2025 Annual Meeting of Shareholders, we must receive your proposal no later than December 27, 2024. All proposals must comply with the SEC regulations under Rule 14a-8 for including shareholder proposals in a company’s proxy material. |
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Director Candidate Nomination. Our By-laws set forth the procedures you must follow if you wish to nominate a director candidate in connection with the 2025 Annual Meeting of Shareholders. |
Proxy Access to Include Nominees in our 2025 Proxy Statement. If you are 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 and wish to nominate a director candidate and require us to include such nominee in our Proxy Statement and form of proxy, you must submit your request so it is received by the Company between November 27, 2024 and December 27, 2024, in accordance with our By-laws. The number of candidates that may be so nominated is limited to the greater of two or the largest whole number that does not exceed 20% of our Board, provided that the shareholder(s) and nominee(s) satisfy the requirements set forth in our By-laws. All proxy access nominations must be accompanied by information about the nominating shareholders as well as the nominees and meet the requirements specified in our By-laws, including the information specified under “Nominees Not for Inclusion in our 2025 Proxy Statement” below.
Nominees Not for Inclusion in our 2025 Proxy Statement. If you wish to nominate a director candidate in connection with the 2025 Annual Meeting of Shareholders and are not requiring that the nominee be included in our Proxy Statement, you must submit the nomination so it is received by the Company between February 12, 2025 and March 14, 2025, in accordance with our By-laws. The notice to nominate a person for election as a Company director must include a written statement setting forth: (i) the name of the person to be nominated; (ii) the number and class of all shares of each class of Company stock owned of record and beneficially by such person, as reported by such person to you; (iii) such other information regarding each nominee proposed by you as would have been required to be included in a Proxy Statement filed pursuant to the proxy rules of the SEC if the nominee had been nominated by the Board of Directors; (iv) such person’s signed consent to serve as a director of our Company if elected; (v) your name and address; (vi) the number and class of all shares of each class of Company stock owned of record and beneficially by such shareholder (and any beneficial owner on whose behalf the nomination is made); and (vii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to Roper’s securities.
Universal Proxy Rules for Nominees. For all nominees, whether included in our Proxy Statement or otherwise, in addition to satisfying the requirements under our By-laws, if a shareholder intends to comply with the SEC’s universal proxy rules and to solicit proxies in support of director nominees other than the Company nominees, the shareholder must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act, which notice must be postmarked or transmitted electronically to us at our principal executive office no later than 60 calendar days prior to the one-year anniversary date of the Annual Meeting (for the 2025 Annual Meeting of Shareholders, no later than April 13, 2025).
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64 |
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Roper Technologies, Inc. 2024 Proxy Statement |
P.O. BOX 8016, CARY, NC 27512-9903 Your vote matters! Have your ballot ready and please use one of the methods below for easy voting: Your control number Have the 12 digit control number located in the box above available when you access the website and follow the instructions. Scan QR for digital voting Roper Technologies, Inc. Annual Meeting of Shareholders For Shareholders of record as of April 18, 2024 Wednesday, June 12, 2024 10:00 AM, Eastern Time The Westin Sarasota, 100 Marina View Drive, Sarasota, Florida 34236 Internet: • www.proxypush.com/ROP • Cast your vote online • Have your Proxy Card ready Follow the simple instructions to record your vote Phone: 1-866-829-5176 • • Use any touch-tone telephone • Have your Proxy Card ready Follow the simple recorded instructions Mail: • • Mark, sign and date your Proxy Card Fold and return your Proxy Card in the postage-paid envelope provided YOUR VOTE IS IMPORTANT! PLEASE VOTE BY: 10:00 AM, Eastern Time, June 12, 2024. This proxy is being solicited on behalf of the Board of Directors The undersigned hereby appoints Michael R. Peterson and John K. Stipancich (the “Named Proxies”), and each or either of them, as the true and lawful attorneys of the undersigned, with full power of substitution and revocation, and authorizes them, and each of them, to vote all the shares of capital stock of Roper Technologies, Inc. which the undersigned is entitled to vote at said meeting and any adjournment thereof upon the matters specified and upon such other matters as may be properly brought before the meeting or any adjournment thereof, conferring authority upon such true and lawful attorneys to vote in their discretion on such other matters as may properly come before the meeting and revoking any proxy heretofore given. THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, SHARES WILL BE VOTED IDENTICAL TO THE BOARD OF DIRECTORS RECOMMENDATION, EXCEPT WITH RESEPECT TO PROPOSAL 4, FOR WHICH SHARES WILL BE Named VOTED Proxies “ABSTAIN” are authorized IF NO DIRECTION to vote upon IS GIVEN such other . This matters proxy, when that may properly properly executed, come before will be the voted meeting in the manner or any adjournment directed herein or postponement . In their discretion, thereof the . If you hold shares in any Employee Stock Purchase Plan or 401(k) savings plan of the Company (the “Plans”), then this proxy card, when signed and returned, or your telephone or Internet proxy, will constitute voting instructions on matters properly coming before the Annual Meeting and at any adjournments or postponements thereof in accordance with the instructions given herein to the trustee for shares held in any of the Plans. Shares in each independent of the Plans for fiduciary which. voting instructions are not received by 11:59 PM, Eastern Time on June 9, 2024, or if no choice is specified, will be voted by an You are encouraged to specify your choice by marking the appropriate box (SEE REVERSE SIDE) but you need not mark any box if you wish to vote in accordance this card. with the Board of Directors’ recommendation. The Named Proxies cannot vote your shares unless you sign (on the reverse side) and return PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE Copyright © 2024 BetaNXT, Inc. or its affiliates. All Rights Reserved
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 |
As required by SEC Rules, we are providing the following information about the relationship between certain executive compensation and certain financial performance of our Company, illustrating pay versus performance, or PVP. For its Company Selected Measure (“CSM”) and an additional measure to show in this table, the Company has chosen Adjusted Free Cash Flow and Adjusted EBITDA, respectively.
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Year |
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Summary Compensation Table Total for PEO |
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Compensation Actually Paid to PEO |
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Average Summary Compensation Table Total for Non-PEO NEOs |
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Average Compensation Actually Paid to Non-PEO NEOs |
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Value of Initial Fixed $100 Investment Based On: |
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Total Shareholder Return |
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S&P 500 IT |
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2023 |
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$ |
41,295,585 |
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$ |
58,797,192 |
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$ |
4,574,182 |
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$ |
7,665,126 |
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$157 |
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$219 |
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$ |
1,384 |
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$1,962 |
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$2,511 |
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2022 |
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$ |
21,893,365 |
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$ |
8,358,572 |
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$ |
6,063,861 |
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$ |
3,431,516 |
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$124 |
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$139 |
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$ |
4,545 |
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$1,490 |
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$2,170 |
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2021 |
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$ |
21,532,055 |
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$ |
34,591,237 |
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$ |
6,036,612 |
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$ |
8,448,612 |
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$140 |
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$194 |
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$ |
1,153 |
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$1,598 |
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$1,944 |
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2020 |
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$ |
19,078,951 |
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$ |
36,516,078 |
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$ |
4,984,588 |
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$ |
9,144,533 |
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$122 |
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$144 |
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$ |
950 |
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$1,273 |
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$1,590 |
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(1) |
The principal executive officer (“PEO”) for each of 2023, 2022, 2021 and 2020 (each a “Covered Year”) is L. Neil Hunn. |
(2) |
The non-PEO named executive officers (the “other NEOs”) for each Covered Year are Jason P. Conley, Robert C. Crisci and John K. Stipancich. Mr. Crisci served as Chief Financial Officer until February 1, 2023, at which time Mr. Conley began serving as Chief Financial Officer. |
(3) |
Adjusted Free Cash Flow and Adjusted EBITDA are presented on a continuing operations basis and an adjusted (non-GAAP) basis. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures and other related information is available in “Appendix A—Reconciliations, Tables 1 and 2”. | Compensation Actually Paid (“CAP”) illustrated in the table above is calculated by making the following adjustments from the Summary Compensation Table (“SCT”) totals as follows:
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Item and Value—Added (Deducted) |
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2023 |
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-SCT “Stock Awards” column value |
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(13,982,907) |
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-SCT “Option Awards” column value |
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(4,632,002) |
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+ Covered Year-end fair value of outstanding equity awards granted in Covered Year |
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25,286,777 |
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+/- change in fair value (from prior year-end to Covered Year-end) of outstanding equity awards granted prior to Covered Year |
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8,470,421 |
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+/- change in fair value (from prior year-end to vesting date) of equity awards granted prior to Covered Year and vested in Covered Year |
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2,359,319 |
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For Non-PEO Named Executive Officers (Average): |
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-SCT “Stock Awards” column value |
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(2,415,028) |
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-SCT “Option Awards” column value |
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(800,020) |
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+ Covered Year-end fair value of outstanding equity awards granted in Covered Year |
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4,367,374 |
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+/- change in fair value (from prior year-end to Covered Year-end) of outstanding equity awards granted prior to Covered Year |
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1,662,753 |
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+/- change in fair value (from prior year-end to vesting date) of equity awards granted prior to Covered Year and vested in Covered Year |
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275,866 |
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Company Selected Measure Name |
Adjusted Free Cash Flow
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Named Executive Officers, Footnote |
The non-PEO named executive officers (the “other NEOs”) for each Covered Year are Jason P. Conley, Robert C. Crisci and John K. Stipancich. Mr. Crisci served as Chief Financial Officer until February 1, 2023, at which time Mr. Conley began serving as Chief Financial Officer.
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PEO Total Compensation Amount |
$ 41,295,585
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$ 21,893,365
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$ 21,532,055
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$ 19,078,951
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PEO Actually Paid Compensation Amount |
$ 58,797,192
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8,358,572
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34,591,237
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36,516,078
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Adjustment To PEO Compensation, Footnote |
Compensation Actually Paid (“CAP”) illustrated in the table above is calculated by making the following adjustments from the Summary Compensation Table (“SCT”) totals as follows:
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Item and Value—Added (Deducted) |
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2023 |
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-SCT “Stock Awards” column value |
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(13,982,907) |
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-SCT “Option Awards” column value |
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(4,632,002) |
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+ Covered Year-end fair value of outstanding equity awards granted in Covered Year |
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25,286,777 |
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+/- change in fair value (from prior year-end to Covered Year-end) of outstanding equity awards granted prior to Covered Year |
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8,470,421 |
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+/- change in fair value (from prior year-end to vesting date) of equity awards granted prior to Covered Year and vested in Covered Year |
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2,359,319 |
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For Non-PEO Named Executive Officers (Average): |
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-SCT “Stock Awards” column value |
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(2,415,028) |
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-SCT “Option Awards” column value |
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(800,020) |
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+ Covered Year-end fair value of outstanding equity awards granted in Covered Year |
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4,367,374 |
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+/- change in fair value (from prior year-end to Covered Year-end) of outstanding equity awards granted prior to Covered Year |
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1,662,753 |
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+/- change in fair value (from prior year-end to vesting date) of equity awards granted prior to Covered Year and vested in Covered Year |
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275,866 |
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Non-PEO NEO Average Total Compensation Amount |
$ 4,574,182
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6,063,861
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6,036,612
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4,984,588
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Non-PEO NEO Average Compensation Actually Paid Amount |
$ 7,665,126
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3,431,516
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8,448,612
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9,144,533
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Adjustment to Non-PEO NEO Compensation Footnote |
Compensation Actually Paid (“CAP”) illustrated in the table above is calculated by making the following adjustments from the Summary Compensation Table (“SCT”) totals as follows:
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Item and Value—Added (Deducted) |
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2023 |
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-SCT “Stock Awards” column value |
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(13,982,907) |
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-SCT “Option Awards” column value |
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(4,632,002) |
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+ Covered Year-end fair value of outstanding equity awards granted in Covered Year |
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25,286,777 |
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+/- change in fair value (from prior year-end to Covered Year-end) of outstanding equity awards granted prior to Covered Year |
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8,470,421 |
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+/- change in fair value (from prior year-end to vesting date) of equity awards granted prior to Covered Year and vested in Covered Year |
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2,359,319 |
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For Non-PEO Named Executive Officers (Average): |
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-SCT “Stock Awards” column value |
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(2,415,028) |
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-SCT “Option Awards” column value |
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(800,020) |
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+ Covered Year-end fair value of outstanding equity awards granted in Covered Year |
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4,367,374 |
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+/- change in fair value (from prior year-end to Covered Year-end) of outstanding equity awards granted prior to Covered Year |
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1,662,753 |
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+/- change in fair value (from prior year-end to vesting date) of equity awards granted prior to Covered Year and vested in Covered Year |
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275,866 |
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Compensation Actually Paid vs. Total Shareholder Return |
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Compensation Actually Paid vs. Net Income |
(1) |
In 2022, the Company’s Net Income included a gain of $3,356 million related to the disposition of discontinued operations, net of tax. |
(2) |
In 2023, the Compensation Actually Paid to the PEO includes $17.8 million earned under the five-year CEO Special Long-Term Cash Incentive, plus $1.33 million in a company matching amount based on his deferral of a portion of such award, as described above in the CD&A under “CEO Special Long-Term Cash Incentive.” |
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Compensation Actually Paid vs. Company Selected Measure |
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Total Shareholder Return Vs Peer Group |
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Tabular List, Table |
The following table lists the three financial performance measures that we believe represent the most important financial performance measures we used to link compensation actually paid to our named executive officers for 2023 to our performance:
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Adjusted Free Cash Flow |
Adjusted EBITDA |
Adjusted Net Earnings |
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Total Shareholder Return Amount |
$ 157
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124
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140
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122
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Peer Group Total Shareholder Return Amount |
219
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139
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194
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144
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Net Income (Loss) |
$ 1,384,000,000
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$ 4,545,000,000
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$ 1,153,000,000
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$ 950,000,000
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Company Selected Measure Amount |
1,962,000,000
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1,490,000,000
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1,598,000,000
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1,273,000,000
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PEO Name |
L. Neil Hunn
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Measure:: 1 |
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Pay vs Performance Disclosure |
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Name |
Adjusted Free Cash Flow
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Non-GAAP Measure Description |
Adjusted Free Cash Flow and Adjusted EBITDA are presented on a continuing operations basis and an adjusted (non-GAAP) basis. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures and other related information is available in “Appendix A—Reconciliations, Tables 1 and 2”.
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Measure:: 2 |
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Pay vs Performance Disclosure |
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Compensation Actually Paid vs. Other Measure |
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Other Performance Measure, Amount |
2,511,000,000
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2,170,000,000
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1,944,000,000
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1,590,000,000
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Name |
Adjusted EBITDA
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Measure:: 3 |
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Pay vs Performance Disclosure |
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Name |
Adjusted Net Earnings
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PEO | SCT Stock Awards Column Value [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
$ (13,982,907)
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PEO | SCT Option Awards Column Value [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
(4,632,002)
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PEO | Covered YearEnd Fair Value Of Outstanding Equity Awards Granted In Covered Year [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
25,286,777
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PEO | Change In Fair Value Of Outstanding Equity Awards Granted Prior To Covered Year [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
8,470,421
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PEO | Change In Fair Value Of Equity Awards Granted Prior To Covered Year And Vested In Covered Year [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
2,359,319
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Non-PEO NEO | SCT Stock Awards Column Value [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
(2,415,028)
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Non-PEO NEO | SCT Option Awards Column Value [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
(800,020)
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Non-PEO NEO | Covered YearEnd Fair Value Of Outstanding Equity Awards Granted In Covered Year [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
4,367,374
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Non-PEO NEO | Change In Fair Value Of Outstanding Equity Awards Granted Prior To Covered Year [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
1,662,753
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Non-PEO NEO | Change In Fair Value Of Equity Awards Granted Prior To Covered Year And Vested In Covered Year [Member] |
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Pay vs Performance Disclosure |
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Adjustment to Compensation, Amount |
$ 275,866
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