| In accordance with Section 14A of the Securities Exchange Act of 1934, the Board is asking the shareholders to approve, by nonbinding, advisory vote, the compensation of the Named Executive Officers disclosed in the sections below titled “Compensation Discussion and Analysis” and “Executive Compensation Tables.” We currently hold these votes annually. Executive compensation is an important matter to the Board and the Compensation Committee and to our shareholders. We have designed our executive compensation program to align executive and shareholder interests by rewarding the achievement of specific annual, long-term, and strategic goals that create long-term shareholder value. We believe that our executive compensation program provides competitive compensation that motivates and rewards executives for achieving financial and strategic objectives, provides rewards commensurate with performance to incentivize the Named Executive Officers to perform at their highest levels, encourages growth and innovation, attracts and retains the Named Executive Officers and other key executives, and aligns our executive compensation with shareholders’ interests through the use of equity-based incentive awards.
The Compensation Committee has overseen the development and implementation of our executive compensation program in line with these compensation objectives. The Compensation Committee continuously reviews, evaluates and updates our executive compensation program to ensure that we provide competitive compensation that motivates the Named Executive Officers to perform at their highest levels while increasing long-term value to our shareholders.
| Our compensation program is reflective of changes adopted based on shareholder feedback and market-based benchmarking. | | | ▶
Annual cash incentives for the Named Executive Officers are based on performancedisclosed in the sections below titled “Compensation Discussion and Analysis” and “Executive Compensation Tables.” We currently hold these votes annually.
Executive compensation is an important matter to the Board and the Compensation Committee and to our shareholders. We have designed our executive compensation program to align executive and shareholder interests by rewarding the achievement of specific annual, long-term, and strategic goals that correlate strongly with several primary corporate
| |
| objectives: focusing on revenue growth, improving the financial return from our business and strengthening our balance sheet through cash flow improvement and debt reduction. | | | ▶
Long-term incentive awards that are performance based and aligned with creatingcreate long-term shareholder value. We believe that our executive compensation program provides competitive compensation that motivates and rewards executives for achieving financial and strategic objectives, provides rewards commensurate with performance to incentivize the Named Executive Officers to perform at their highest levels, encourages growth and innovation, attracts and retains the Named Executive Officers and other key executives, and aligns our executive compensation with shareholders’ interests through the use of equity-based incentive awards.
| | | ▶
The Compensation Committee has overseen the development and implementation of our executive compensation program in line with these compensation objectives. The Compensation Committee continuously reviews, evaluates and updates our executive compensation program to ensure that we provide competitive compensation that motivates the Named Executive Officers to perform at their highest levels while increasing long-term value to our shareholders.
Robust stock ownership guidelines forAs described in detail under “Compensation Discussion and Analysis — Shareholder Outreach,” we continued our shareholder outreach on this and other matters in 2023.
These and other actions demonstrate our continued commitment to align executive compensation with shareholders’ interests while providing competitive compensation to attract, motivate, and retain the Named Executive Officers and other key executives. We will continue to review and adjust our executive compensation program with these goals in mind to ensure the long-term success of our company and generate increased long-term value to our shareholders. This nonbinding, advisory vote gives you an opportunity to express your views about our executive compensation program. As we further align our executive compensation program with the interests of our shareholders while continuing to retain key talented executives who drive our company’s success, we ask that you approve the compensation of the Named Executive Officers. The resolution in respect of this Proposal 2 is an ordinary resolution. The text of the resolution with respect to Proposal 2 is as follows:
| | | ▶“
No single trigger change in control vesting or excise tax gross-ups in our KeyIT IS RESOLVED, that, on a nonbinding, advisory basis, the compensation of Pentair plc’s Named Executive Employment and Separation Agreements (“KEESAs”).
| | | ▶
Enhanced policy prohibiting hedging by directors, executive officers, and employees.
| | | ▶
ESG modifier includedOfficers as disclosed in the annual incentive award design beginningCompensation Discussion and Analysis, the accompanying tables and the related disclosures contained in 2022.
Pentair plc’s Proxy Statement is hereby approved.”
| | | | | | | | | | Each of the Board and the Compensation Committee recommends a vote FOR the approval of the compensation of the Named Executive Officers. | | | | |
As described in detail under “Compensation Discussion and Analysis — Shareholder Outreach and Say on Pay,” we continued our shareholder outreach on this and other matters in 2022.
These and other actions demonstrate our continued commitment to align executive compensation with shareholders’ interests while providing competitive compensation to attract, motivate and retain the Named Executive Officers and other key executives. We will continue to review and adjust our executive compensation program with these goals in mind to ensure the long-term success of our company and generate increased long-term value to our shareholders.
This nonbinding, advisory vote gives you an opportunity to express your views about our executive compensation program. As we further align our executive compensation program with the interests of our shareholders while continuing to retain key talented executives who drive our company’s success, we ask that you approve the compensation of the Named Executive Officers.
The resolution in respect of this Proposal 2 is an ordinary resolution. The text of the resolution with respect to Proposal 2 is as follows:
“IT IS RESOLVED, that, on a nonbinding, advisory basis, the compensation of Pentair plc’s Named
Executive Officers as disclosed in the Compensation Discussion and Analysis, the accompanying tables and the related disclosures contained in Pentair plc’s Proxy Statement is hereby approved.”
| | | | | | | | | 2024 Proxy Statement | Pentair | EACH OF THE BOARD AND THE COMPENSATION COMMITTEE RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.
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| | | | | | | Compensation Committee Report |
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis with management and, based on such review and discussions, the Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2022.2023. THE COMPENSATION COMMITTEE T. Michael Glenn, Chair
Theodore L. Harris
David A. Jones
Billie I. Williamson | | | | | | | | | 30 | | Pentair | 2024 Proxy Statement |
| | | | | | | Compensation Discussion and Analysis |
COMPENSATION DISCUSSION AND ANALYSIS
OUR NAMED EXECUTIVE OFFICERS
The Compensation Discussion and Analysis describes the compensation programs in regard to the following named executive officers (“Named Executive Officers”) for 2022:2023: | | | | | | | | | | | | | | | | | | | | JOHN L. STAUCH | NameROBERT P. FISHMAN | TANYA L. HOOPER | JEROME O. PEDRETTI | Position | ADRIAN C. CHIU | | | John L. Stauch | | | President and Chief Executive Officer | | | Robert P. Fishman | | | Executive Vice President, Chief Financial Officer, and Chief Accounting Officer | | Executive Vice President and Chief Human Resources Officer | Jerome O. Pedretti | | Executive Vice President and Chief Executive Officer, Pool | Executive Vice President and President, Industrial & Flow Technologies | Water Solutions | | | | | |
Executive Summary | | | Karla C. Robertson | | | Executive Vice President, General Counsel, Secretary,2023 Highlights and Chief Social Responsibility Officer | Business Results* | |
Our strong results in 2023 demonstrated the power of our balanced water portfolio and our focused growth strategy. We completed the first year with our new three segment structure: Flow, Water Solutions, and Pool; and, we finished our first full year with Manitowoc Ice. Both our Flow and Water Solutions segments had record sales and return on sales in 2023, and our Pool segment delivered record return on sales despite significant volume headwinds. Our transformation program initiatives in the areas of pricing excellence, strategic sourcing, operations excellence, and organizational effectiveness are reading out and drove significant margin expansion in 2023. Further, during 2023 we saw progress with respect to our social responsibility strategic targets that were announced in 2021 and saw advancements in innovation with exciting new product launches coming from all three segments. | | | Stephen J. PillaSummary 2023 Financial Results* | | | Executive Vice President, Chief Supply Chain Officer | | |
In 2023, as compared to 2022, we increased our adjusted earnings per share from continuing operations by 1.9% to $3.75. Our sales during 2023 were $4,104.5 million. Sales were flat compared to sales from the prior year. Our segment income in 2023 grew 11.4% to $855.1 million for 2023. Our free cash flow from continuing operations was $550.4 million for 2023, an increase of 94.4% from 2022. In addition, we increased the cash dividend for the 47th consecutive year, returning $145.2 million to our shareholders during 2023. * Please see Appendix A for reconciliation of GAAP to non-GAAP financial measures included in this section. | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Mario R. D’Ovidio(1) | | | Former Executive Vice PresidentCompensation Discussion and President, Consumer Solutions | Analysis |
Adjusted EPS (1)Earnings per diluted share from continuing operations (“EPS”) were $3.75 in 2023, compared to $2.92 in 2022. On an adjusted basis, EPS increased 1.9% to $3.75 in 2023, compared to $3.68 in 2022. Adjusted EPS is a key metric in our performance share unit awards, detailed o
n page 45.$US | | | p 14.5% 3-Year CAGR 1.9% 1 Year | |
Segment Income The position heldOperating income in 2023 was $739 million, compared to $595 million in 2022. On an adjusted basis, our segment income increased 11.4% over the prior year to $855 million in 2023 from $768 million in 2022. Segment income as a percent of sales increased to 20.8% in 2023 from 18.6% in 2022. Segment income is a key metric in our Management Incentive Plan (the “MIP”), detailed on page 40.$US Millions | | | p 18.2% 3-Year CAGR 11.4% 1 Year | |
Free Cash Flow Net cash provided by Mr. D’Ovidio,operating activities of continuing operations was $621 million in 2023, compared to $364 million in 2022. Free cash flow from continuing operations was $550 million in 2023, compared to $283 million in 2022. In 2023, we increased the Company’s Executive Vice President and President, Consumer Solutions, was eliminated, and effective September 1, 2022 his employment was involuntarily terminated without cause.cash dividend paid to our shareholders for the 47th consecutive year, returning $145 million to our shareholders. Free cash flow is a key metric in our MIP, detailed on page 40.
$US Millions | | | p 2.4% 3-Year CAGR 94.4% 1 Year | |
Sales OVERVIEW OF COMPENSATION PROGRAM AND OBJECTIVESOur sales during 2023 were $4,105 million, a decrease of 0.4% compared to $4,122 million in 2022. Revenue, which is the same as sales, is a key metric in our MIP, detailed on page 40.$US Millions | | | p 10.8% 3-Year CAGR q (0.4)% 1 Year | |
The Compensation Committee sets and administers the policies that govern our executive compensation, including:
▶
establishing and reviewing executive base salaries;
▶
overseeing our annual incentive compensation plans;
▶
overseeing our long-term equity-based compensation plan;
▶
approving all awards under those plans;
▶
annually evaluating risk considerations associated with our executive compensation program; and
▶
annually approving all compensation decisions for executive officers, including those for the Named Executive Officers, who are named in the Summary Compensation Table below.
The Compensation Committee believes that the most effective executive compensation program aligns executive initiatives with shareholders’ interests. The Compensation Committee seeks to accomplish this objective by rewarding the achievement of specific annual, long-term and strategic goals that create lasting shareholder value.
| | | | | | | | | 32 | | The Compensation Committee’s specific objectives include:Pentair | 2024 Proxy Statement
|
▶
motivating and rewarding executives for achieving financial and strategic objectives; | | | | | | | Compensation Discussion and Analysis |
| | | 2023 Compensation Highlights | |
▶
Elements of Executive Compensation
aligning management and shareholder interests by encouraging employee stock ownership;
▶
providing rewards commensurate with company performance;
▶
encouraging growth and innovation; and
▶
attracting and retaining top-quality executives and key employees.
To balance the objectives described above, our executive compensation program uses the followingWe provide three elements of direct compensation elements:
▶
compensation: base salary, toannual incentives, and long-term incentives, which are described below. In addition, we provide fixed compensation competitive in the marketplace;
▶
annual incentive compensation, to reward short-term performance against specific financial targets;limited perquisites, and
▶
long-term incentive compensation, to link management incentives to long-term value creation and shareholder return.
COMPENSATION DISCUSSION AND ANALYSIS
We also provide standard retirement and health and welfare benefits to attract and retain executives over the longer term.
benefits. The Compensation Committee reviews total compensation for executive officers and the relative levels of each of these forms of compensation against the Compensation Committee’s goals. As such, our executive compensation program is predominantly performance- based, which encourages our executive officersgoals to focus on our company’s long-term successattract, retain, and aligns withincentivize talented executives and to align the long-term interests of these executives with those of our long-term shareholders.
| | | | | | | | | Element | | Description | | | | Base Salary | uDetermined based on numerous factors such as: ncompetitive conditions for the Named Executive Officer’s position within the Comparator Group and in the broader employment market, nas well as the Named Executive Officer’s level of responsibility, experience, and individual performance | | | | | | | Annual Incentives | uTied to annual business performance as measured against annual goals established by the Compensation Committee uVaries depending on a wide range of factors, including: ncompetitive conditions for the executive officer’s position within the Comparator Group and in the broader employment market, nas well as the executive officer’s performance, level of responsibility, and experience | | | | | | | Long-Term Incentives | For 2023, the Compensation Committee maintained the mix of long-term incentive award ofperformance share units at 50% of the total long-term award value and stock options and restricted stock units each at 25% of the total long-term award value. uStock options — Each stock option has a term of 10 years, with one-third of the options vesting on each of the first, second, and third anniversaries of the grant date. uRestricted stock units — Each restricted stock unit represents the right to receive one ordinary share upon vesting. The restricted stock units generally vest as to one-third of the restricted stock units on each of the first, second, and third anniversaries of the grant date. uPerformance share units — Each performance share unit represents the right to receive one ordinary share after the end of a three-year performance period if specified performance goals are achieved. | | | |
The approximate mix of total target direct compensation based on economic value for 20222023 for our Chief Executive Officer and the average of the other Named Executive Officers is shown in the charts that follow.
OUR EXECUTIVE COMPENSATION PROGRAM
The Compensation Committee focuses on aligning our executive compensation program with Pentair’s short-term and long-term objectives while also addressing shareholder feedback and compensation best practices. The table below outlines a number of key features in our executive compensation program.
| WHAT WE DO | | | WHAT WE DON’T DO | |
| | | | Annual Shareholder Outreach to seek input and feedback on executive compensation
| | | | | | Independent Consultant, hired by and reporting to the Compensation Committee and evaluated periodically
| | | | | | Comparator Group (“peer group”) evaluated annually, based on industry and revenue of 1∕2 to 2x revenue size
| | | | | | Significant CEO pay at risk (88%); average of 72% for other Named Executive Officers
| | | | | | Stock Ownership Guidelines and Holding Policy for the CEO at 6.0x base salary and 2.0-3.0x for executive officers
| | | | | | Formal Clawback Policy for cash bonuses and performance-based equity awards
| | | | | | Annual Risk-Assessment of our compensation programs and policies
| |
| | | | No employment agreements or multi-year compensation commitments with any current executive officers
| | | | | | No Single-Trigger Change in Control Equity Vesting in KEESAs | | | | | | No Excise Tax Gross-ups for executive officers | | | | | | No individual supplemental executive retirement plans for newly appointed executive officers
| | | | | | No hedging or pledging of Pentair equity securities
| |
COMPENSATION DISCUSSION AND ANALYSIS
2022 HIGHLIGHTS AND BUSINESS RESULTS*
In 2022, our diverse portfolio generated growth in both segments. Amidst challenging supply chain, inflation, and challenging labor environments, we remained committed to our strategies through our continued focus on our strategic growth initiatives, the completion of the Manitowoc Ice acquisition, and our transformation program initiatives in the areas of pricing excellence, strategic sourcing, operations excellence and organizational effectiveness to expedite growth and drive margin expansion. We saw progress in 2022 with
respect to our social responsibility strategic targets that were announced in 2021 — carbon footprint reduction, water reduction, product design for sustainability, responsible supply chain, and inclusion and diversity. In July 2022, we announced that effective January 1, 2023, we were moving to three segments: Pool, Water Solutions, and Industrial & Flow Technologies, to accelerate our efforts to improve customer experiences, differentiate our products and drive profitability for our shareholders.
* Please see Appendix A for reconciliation of GAAP to non-GAAP financial measures included in this section.
Summary 2022 Financial Results
In 2022, as compared to 2021, we increased our adjusted earnings per share from continuing operations by 8.2%. Our sales during 2022 were $4,122 million, growing by 9.5%, with approximately 380 basis points of such growth coming from our acquisition of Manitowoc Ice. Our segment income in 2022 grew 11.9% to $768 million for 2022. Our free cash flow from continuing operations was $283 million for 2022. In addition, we increased the cash dividend for the 46th consecutive year, returning $139 million to our shareholders during 2022.
| | | | Earnings per diluted share from continuing operations (“EPS”) were $2.92 in 2022, compared to $3.32 in 2021. On an adjusted basis, EPS increased 8.2% to $3.68 in 2022, compared to $3.40 in 2021. Adjusted EPS is a key metric in our performance share unit awards, detailed on page 42. | |
COMPENSATION DISCUSSION AND ANALYSIS
| | | | | Operating income in 2022 was $595 million, compared to $637 million in 2021. On an adjusted basis, our segment income increased 11.9% over the prior year to $768 million in 2022 from $686 million in 2021. Segment income as a percent of sales increased to 18.6% in 2022 from 18.2% in 2021. Segment income is a key metric in our Management Incentive Plan (the “MIP”), detailed on page 38. | | | | | 2024 Proxy Statement | Pentair | | | Net cash provided by operating activities of continuing operations was $364 million in 2022, compared to $614 million in 2021. Free cash flow from continuing operations was $283 million in 2022, compared to $557 million in 2021. In 2022, we increased the cash dividend paid to our shareholders for the 46th consecutive year, returning $139 million to our shareholders. Free cash flow is a key metric in our MIP, detailed on page 38.
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| | | | | | | | | | Our sales during 2022 were $4,122 million, an increase of 9.5% compared to $3,765 million in 2021. Revenue, which is the same as sales, is a key metric in our MIP, detailed on page 38. | Compensation Discussion and Analysis |
2023 Target Direct Compensation Mix
Evolution of the Executive Compensation Program COMPENSATION DISCUSSION AND ANALYSIS
EVOLUTION OF EXECUTIVE COMPENSATION PROGRAM
The Compensation Committee reviews annually the effectiveness of our executive compensation program and considers a number of factors, including business results, strategic priorities, shareholder alignment, and market practice. As a result of the evolution of our compensation program and changes we have made in response to market dynamics and shareholder feedback, key aspects of our current executive compensation program include: ▶u
50% of the value of long-term incentive awards is delivered in the form of performance-based restricted stock units;
▶u
100% of our annual incentive metrics are tied to financial business objectives and are subject to an ESG performance modifier; and
▶u
Our stock ownership requirements generally meet or exceed market levels.
SHAREHOLDER OUTREACH AND SAY ON PAY
| | | | | | | | | 34 | | Pentair | 2024 Proxy Statement |
| | | | | | | Compensation Discussion and Analysis |
| | | Compensation Governance Best Practices | |
The Compensation Committee focuses on aligning our executive compensation program with Pentair’s short-term and long-term objectives while also addressing shareholder feedback and compensation best practices. The table below outlines a number of key features in our executive compensation program. | | | | | | | | WHAT WE DO | WHAT WE DON'T DO | | | Annual Shareholder Outreach to seek input and feedback on executive compensation Independent Consultant, hired by and reporting to the Compensation Committee and evaluated periodically Comparator Group (“peer group”) evaluated annually, based on industry and revenue of 1/2 to 2x revenue size Significant CEO pay at risk (88%); average of 74% for other Named Executive Officers Stock Ownership Guidelines and Holding Policy at 6.0x base salary for the CEO and 2.0-3.0x for executive officers Clawback Policy for incentive-based compensation Annual Risk-Assessmentof our compensation programs and policies | No employment agreements or multi-year compensation commitments with any current executive officers No Single-Trigger Change in Control Equity Vesting in KEESA No Excise Tax Gross-ups for executive officers No individual supplemental executive retirement plans for newly appointed executive officers No hedging or pledging of Pentair equity securities | | |
Our Compensation Philosophy and Objectives The Compensation Committee believes it is importantthat the most effective executive compensation program aligns executive initiatives with shareholders’ interests. The Compensation Committee seeks to maintain an open dialogueaccomplish this objective by rewarding the achievement of specific annual, long-term, and strategic goals that create lasting shareholder value. The Compensation Committee’s specific objectives include: umotivating and rewarding executives for achieving financial and strategic objectives; ualigning management and shareholder interests by encouraging employee stock ownership; uproviding rewards commensurate with our shareholders to gain input on their perspectives regarding our governancecompany performance; uencouraging growth and innovation; and uattracting and retaining top-quality executives and key employees. To balance the objectives described above, our executive compensation program anduses the following direct compensation elements: ubase salary, to provide clarifying information enabling themfixed compensation competitive in the marketplace; uannual incentive compensation, to make informed decisions in our annual advisoryreward short-term performance against specific financial targets; and ulong-term incentive compensation, to link management incentives to long-term value creation and shareholder vote (our “say on pay vote”) onreturn. We also provide standard retirement and health and welfare benefits to attract and retain executives over the longer term. The Compensation Committee reviews total compensation of ourfor executive officers named in our Proxy Statement. and the relative levels of each of these forms of compensation against the Committee’s goals. As described in “Corporate Governance Matters — Communicating with Shareholders and Other Stakeholders,” in 2022, we maintained our shareholder outreach to gain additional insight, better understand shareholder perspectives, and evaluate any concerns regarding our executive compensation program. The support of our shareholders forsuch, our executive compensation program was again reflected inis predominantly performance-based, which encourages our executive officers to focus on our company’s long-term success and aligns with the results of the say on pay vote at the 2022 Annual General Meeting, with approximately 94% of votes cast in favorlong-term interests of our proposal.shareholders.
Shareholder feedback is an important factor in how we approach | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Compensation Discussion and Analysis |
How Executive Compensation Decisions are Made | | | Compensation Program and Objectives | |
The Compensation Committee sets and evaluateadministers the policies that govern our executive compensation, program. Consistentincluding: uestablishing and reviewing executive base salaries; uoverseeing our annual incentive compensation plans; uoverseeing our long-term equity-based compensation plan; uapproving all awards under those plans; uannually evaluating risk considerations associated with our executive compensation program; and uannually approving all compensation decisions for executive officers, including those for the strong vote of shareholderNamed Executive Officers, who are named in the Summary Compensation Table. | | | | The Compensation Committee oversees and evaluates Pentair’s executive compensation programs against competitive practices, regulatory developments, and corporate governance trends. | |
The calendar below sets for the customary cadence for the Compensation Committee’s annual processes, as it applied to actions it took during 2023: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | JAN | FEB | MAR | | APR | MAY | JUN | | JULY | AUG | SEPT | | OCT | NOV | DEC | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | February Meeting uApproved 2022 annual incentives and 2023 targets uCertified payout of 2020-2022 performance share unit awards uApproved performance share unit targets for the 2023-2025 performance period uApproved Compensation Discussion and Analysis uApproved non-officer long-term incentive allocation | | May Meeting uCompensation Committee education uReviewed results of “say-on-pay” vote | | | September Meeting uReviewed compensation program and possible design changes for the upcoming year uReviewed projected short- and long-term incentive plan results for current year | | December Meeting uReviewed and approved Comparator Group for upcoming year uApproved executive officer compensation structures, base salary, MIP target, and LTI grant for upcoming year uFinalized performance measures and targets for upcoming performance periods uReviewed preliminary achievement against short- and long-term targets for current performance periods uReviewed projected short and long-term incentive plan targets for upcoming performance periods uReviewed risk assessment of compensation programs |
| | | | | | | | | 36 | | Pentair | 2024 Proxy Statement |
| | | | | | | Compensation Discussion and Analysis |
| | | | EVALUATING THE CHIEF EXECUTIVE OFFICER’S PERFORMANCE In the fall of 2023, the independent directors on the Board and the Compensation Committee employed a formal process to evaluate Mr. Stauch’s performance. Each independent director provided an evaluation of Mr. Stauch’s performance. The Board Chairman and the Compensation Committee Chair discussed the evaluation results with the Compensation Committee and independent directors, and the independent directors reviewed and discussed the evaluation results and Mr. Stauch’s compensation in executive session of the Board of Directors meeting. The Board Chairman and the Compensation Committee Chair finalized Mr. Stauch’s performance assessment and reviewed the assessment results and commentary with Mr. Stauch. The Compensation Committee determined Mr. Stauch’s compensation and performance targets for the following year. | |
Compensation Consultant The Compensation Committee engages an external compensation consultant to advise the Compensation Committee in implementing and support from our shareholders,overseeing appropriate compensation programs and policies. The Compensation Committee regularly evaluates the performance of its external compensation consultant and periodically conducts a competitive bid process for the role. During 2023, the Compensation Committee continued to retain Aon Consulting, an external compensation consultant, to advise the Compensation Committee on executive compensation issues. See “Corporate Governance — Committees of the Board — Compensation Committee.” The Compensation Committee evaluated the independence of Aon Consulting and the individual representatives of Aon Consulting who served as the Compensation Committee’s consultants based on the factors required by the NYSE. Aon Consulting is a wholly-owned subsidiary of Aon plc, which provides insurance brokerage and benefit consulting services to us. For the year ended December 31, 2023, we paid Aon plc approximately $1,498,877 for insurance brokerage and benefit consulting services and Aon Consulting approximately $198,464 for executive compensation consulting for the Compensation Committee. The decision to engage Aon plc for insurance brokerage and benefit consulting services was made by management and was not approved by the Board or the Compensation Committee. The Compensation Committee concluded, based on the evaluation described above, that the services performed by Aon plc with respect to insurance and benefits administration did not make any material changesraise a conflict of interest or impair Aon Consulting’s ability to ourprovide independent advice to the Compensation Committee regarding executive compensation matters and that Aon Consulting was independent for purposes of the Compensation Committee. At the direction of the Compensation Committee, Aon Consulting advises the Compensation Committee in implementing and overseeing appropriate compensation programs and policies. As part of this process, Aon Consulting provides the Compensation Committee with comparative market data based on analyses of the practices of the Comparator Group defined below under “Comparative Framework” and relevant survey data. The comparative market data that Aon Consulting provides address the structure of the compensation programs maintained by the Comparator Group companies as well as the amount of compensation they provide. Aon Consulting provides guidance on industry best practices and advises the Compensation Committee in 2022, other than incorporating an ESG modifier to thedetermining appropriate ranges for base salaries, annual incentive plan. We expect to carry forward the following general themes: Themes
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Current executive compensation, programs viewed positively and reflect balanced market practices with alignment to Pentair’s strategic objectives.
▶
Our executive compensation program demonstrates a pay-for-performance linkage and shareholder alignment, and is appropriately incentive-based, balancing annual and long-term performance.
▶
Our annual incentive plan measures of income, revenue and free cash flow and long-term incentive plan measures of adjusted EPS and ROIC are aligned with shareholder interests. Also, consistent with feedback from shareholders, beginning with our annual incentive plancompensation for 2022, we incorporated an ESG modifier foreach senior executive officers.position.
| | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Compensation Discussion and Analysis |
In setting compensation for our executive officers, including our Named Executive Officers, the Compensation Committee uses competitive compensation data from an annual total compensation study of selected peer companies and other relevant survey sources to inform its decisions about overall compensation opportunities and specific compensation elements. The Compensation Committee uses multiple reference points when establishing targeted compensation levels. The Compensation Committee applies judgment and discretion in establishing targeted pay levels, taking into account not only competitive market data, but also factors such as company, business unit and individual performance, scope of responsibility, critical needs and skill sets, experience, leadership potential, and succession planning. All companies in our peer group are: ▶u
publicly-traded on a major exchange;
▶u
similar in business scope and/or operations to our business units and global in nature; and
▶u
range from 1∕1∕2 to 2x our revenue size and in the same competitive sectors.
COMPENSATION DISCUSSION AND ANALYSIS
In December of 2021, the Committee approved an updated group of companies for benchmarking purposes (the “Comparator Group”) for use in setting target compensation for 2022 for our executive officers, including the Named Executive Officers. The new Comparator Group companies had revenues ranging from approximately $2.3 billion to $7.2 billion, with median revenues of approximately $3.7 billion:
| | | | | | | | | | | | | | | In December of 2022, the Committee approved the following group of companies for benchmarking purposes (the “Comparator Group”) for use in setting target compensation for 2023 for our executive officers, including the Named Executive Officers. The Comparator Group companies had revenues ranging from approximately $2.2 billion to $8.6 billion, with median revenues of approximately $4.3 billion: | | | | | | uAcuity Brands, Inc. | | | uA.O. Smith Corporation | | | uCrane Co. | | | uDonaldson Company, IncInc. | | | uDover Corporation | | | uEnovis Corporation | | | uFlowserve Corporation | | | uFortive Corporation | | | uFortune Brands Home & Security | | | uIDEX Corporation | | | uIngersoll Rand Inc. | | | uLennox International Inc. | | | uLincoln Electric Holdings, Inc. | | | uMasco Corporation | | | uOwens Corning | | | uRockwell Automation, Inc. | | | uSnap-on Incorporated | | | uThe TimkenTimkin Company | | | uValmont Industries, Inc. | | | uXylem Inc. | | | | | | | | |
2022 COMPENSATION PROGRAM ELEMENTS
For 2022, the principal components of compensation for our Named Executive Officers were:
base salary;
▶
annual incentive compensation;
▶
long-term incentive compensation, consisting of stock options, restricted stock units and performance share units; and
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retirement, and health and welfare benefits.
The Compensation Committee reviews totalbelieves it is important to maintain an open dialogue with our shareholders to gain input on their perspectives regarding our governance and our executive compensation forprogram and to provide clarifying information enabling them to make informed decisions in our annual advisory shareholder vote (our “say on pay vote”) on the compensation of our executive officers named in our Proxy Statement. As described in the “Shareholder Engagement” section, in 2023, we maintained our shareholder outreach to gain additional insight, better understand shareholder perspectives, and the relative levels of each of these forms ofevaluate any concerns regarding our executive compensation against the Compensation Committee’s goals to attract, retain and incentivize talented executives and to align the interests of these executives with thoseprogram. The support of our long-term shareholders.shareholders for our executive compensation program was again reflected in the results of the say on pay vote at the 2023 Annual General Meeting, with approximately 91% of votes cast in favor of our proposal. | | | | Shareholder feedback is an important factor in how we approach and evaluate our executive compensation program. Consistent with the strong vote of shareholder approval, and support from our shareholders, we did not make any material changes to our compensation programs in 2023. We expect to carry forward the following general themes: uCurrent executive compensation programs viewed positively and reflect balanced market practices with alignment to Pentair’s strategic objectives. uOur executive compensation program demonstrates a pay-for-performance linkage and shareholder alignment, and is appropriately incentive-based, balancing annual and long-term performance. uOur annual incentive plan measures of income, revenue, and free cash flow, and long-term incentive plan measures of adjusted EPS and ROIC are aligned with shareholder interests. Also, consistent with feedback from shareholders, beginning with our annual incentive plan for 2022, we incorporated an ESG modifier for executive officers. | |
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Elements and Payouts of 2023 NEO Compensation | | | 2023 Compensation Program Elements | |
OUR NEO COMPENSATION HAS FOUR PRINCIPAL COMPONENTS: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | BASE SALARY | | | ANNUAL INCENTIVE COMPENSATION | | | LONG-TERM INCENTIVE COMPENSATION | | | ADDITIONAL BENEFITS AND PERQUISITES |
Purpose We provide each Named Executive Officer with a fixed base salary. salary to be competitive in the marketplace. How We Set Salary In setting base salaries, the Compensation Committee generally references comparable positions at peer companies based on available market data, which include published survey data and proxy statement data for our Comparator Group. The Compensation Committee considers compensation at comparable companies but does not set base salaries based on a particular peer group benchmark or any single factor. Base salaries for the Named Executive Officers are determined by the Compensation Committee based on numerous factors such as competitive conditions for the Named Executive Officer’s position within the Comparator Group and in the broader employment market, as well as the Named Executive Officer’s level of responsibility, experience, and individual performance. Changes from 2022 In December 2021,2022, the Compensation Committee undertook its annual review of base salaries for executive officers and other management personnel, in accordance with its normal procedures. Following a review with Aon Consulting, the Compensation Committee approved annual salary increases ranging from 3.0%2.9% to 3.5%.4.4%, except for Mr. Pedretti and Mr. Chiu whose salaries were increased in connection with their new business roles as described below. Increases became effective January 1, 20222023 as set forth in the table below. Ms. Hooper joined Pentair on December 6, 2022 and her appointment as the Executive Vice President and Chief Human Resources Officer was effective January 1, 2023. In connection with her employment, the Compensation Committee reviewed and approved a base salary for her of $525,000 based on a wide range of factors, including a market review, her prior compensation level, and arm’s length negotiations with Ms. Hooper. Ms. Hooper’s base salary was not changed for 2023. Mr. Pedretti’s appointment as Executive Vice President and CEO, Pool was effective January 1, 2023, and his base salary was increased 8.5% to $640,000. Mr. Chiu’s appointment as Executive Vice President and President, Water Solutions was effective January 1, 2023, and his base salary was increased 23.5% to $525,000. | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | 2022 Base Salary | | | 2021 Base Salary | | | Increase From 2021 to 2022 | | | John L. Stauch | | | | $ | 1,030,000 | | | | | $ | 995,000 | | | | 3.5% | | | Robert P. Fishman | | | | $ | 685,000 | | | | | $ | 665,000 | | | | 3.0% | | | Jerome O. Pedretti | | | | $ | 590,000 | | | | | $ | 570,000 | | | | 3.5% | | | Karla C. Robertson | | | | $ | 605,000 | | | | | $ | 585,000 | | | | 3.4% | | | Stephen J. Pilla | | | | $ | 500,000 | | | | | $ | 485,000 | | | | 3.1% | | | Mario R. D’Ovidio | | | | $ | 635,000 | | | | | $ | 615,000 | | | | 3.3% | |
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Pentair plc 37
2023 Base Salary
| | | | | | | | | | | | | 2023 Base Salary ($) | 2022 Base Salary ($) | Increase From 2022 to 2023 | John L. Stauch | 1,075,000 | | 1,030,000 | | 4.4 | % | Robert P. Fishman | 705,000 | | 685,000 | | 2.9 | % | Tanya L. Hooper | 525,000 | | 525,000 | | — | % | Jerome O. Pedretti | 640,000 | | 590,000 | | 8.5 | % | Adrian C. Chiu | 525,000 | | 425,000 | | 23.5 | % | | | | | | | | | | | | | | | | |
COMPENSATION DISCUSSION AND ANALYSIS
PurposeANNUAL INCENTIVE COMPENSATION
To provide competitive compensation to attract and retain top talent while linking pay to annual performance, we pay a portion of our executives’ cash compensation as incentive compensation tied to annual business performance as measured against annual goals established by the Compensation Committee. In 2022,2023, we provided a cash annual incentive compensation opportunity to each of our executive officers, including the Named Executive Officers, under our MIP. How We Set Award Values The Compensation Committee determines a percentage of each executive officer’s base salary as a targeted level of incentive compensation opportunity under the MIP, based on the Compensation Committee’s review of Aon Consulting’s recommendations, relevant survey data, and in the case of executive officers other than the Chief Executive Officer, the recommendations of the Chief Executive Officer. The Compensation Committee generally sets each executive officer’s target incentive compensation opportunity taking into consideration the Comparator Group’s target payouts but does not set target incentive compensation opportunities based on a particular peer group benchmark or any single factor. The actual target incentive compensation opportunity set by the Compensation Committee for each executive officer varies depending on a wide range of factors, including competitive conditions for the executive officer’s position within the Comparator Group and in the broader employment market, as well as the executive officer’s performance, level of responsibility, and experience. An executive officer’s base salary multiplied by the incentive compensation opportunity percentage establishes the target incentive compensation for which the executive officer is eligible. Company-wide (Stauch, Fishman, Hooper) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pentair Income (50% weight) + Pentair Revenue (30% weight) + Pentair Cash Flow (20% weight) (0-200%)* | x | Target Award Amount ($) | x | ESG Modifier (+/- 10%) | = | Annual Incentive Award | | | | | | | |
Pool (Pedretti) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Pool Income (40% weight) + Pool Revenue (20% weight) + Company-wide Free cash flow (20% weight) + Company-wide Income (20% weight) (0-200%)* | x | Target Award Amount ($) | x | ESG Modifier (+/- 10%) | = | Annual Incentive Award | | | | | | | |
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Water Solutions (Chiu) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Water Solutions Income (40% weight) + Water Solutions Revenue (20% weight) + Company-wide Free cash flow (20% weight) + Company-wide Income (20% weight) (0-200%)* | x | Target Award Amount ($) | x | ESG Modifier (+/- 10%) | = | Annual Incentive Award | | | | | | | |
* For each measure, threshold performance required for any payout; payouts begin at 50%. Changes from 2022 In December 2021,2022, the Compensation Committee undertook its annual review of targeted levels of incentive compensation opportunities and determined to maintain the same levels, when expressed as a percentage of base salary, from the prior year for our Named Executive Officers, other than for Mr. Stauch.Stauch and Mr. Chiu. Mr. Stauch’s target annual incentive compensation was increased from 120%125% to 125%130% of base salary to more closely align with current market conditions in the Comparator Group. Mr. Chiu’s target annual incentive compensation was increased from 65% to 80% of base salary to reflect the market for his increased responsibility as Executive Vice President and President, Water Solutions. The Compensation Committee approved Ms. Hooper’s target level of incentive compensation in connection with her employment based on factors similar to those used to determine her base salary as described above. Annual Incentive Award Compensation Targets The Named Executive Officers’ incentive compensation targets as a percentage of salary and as a dollar amount were as follows: | | | | | | | | | | | | | Target as % of Salary | Target ($) | John L. Stauch | 130 | % | | 1,397,500 | | Robert P. Fishman | 100 | % | | 705,000 | | Tanya L. Hooper | 65 | % | | 341,250 | | Jerome O. Pedretti | 80 | % | | 512,000 | | Adrian C. Chiu | 80 | % | | 420,000 | | | | | | | | | | | | | | | | | |
How We Establish Performance Metrics and Measures
| | | | Target as a % of Salary | | | Target | | | John L. Stauch | | | | | 125% | | | | | $ | 1,287,500 | | | | Robert P. Fishman | | | | | 100% | �� | | | | $ | 685,000 | | | | Jerome O. Pedretti | | | | | 80% | | | | | $ | 472,000 | | | | Karla C. Robertson | | | | | 75% | | | | | $ | 453,750 | | | | Stephen J. Pilla | | | | | 65% | | | | | $ | 325,000 | | | | Mario R. D’Ovidio | | | | | 80% | | | | | $ | 508,000 | | |
For the 20222023 MIP, the Compensation Committee approved, based on recommendations of the Chief Executive Officer, the following performance measures, which applied to our Named Executive Officers except Mr. D’OvidioPedretti and Mr. Pedretti:Chiu: segment income, revenue, and free cash flow, each measured with respect to company-wide performance. For Mr. D’Ovidio, the income and revenue performance goals were specific to the Consumer Solutions segment, for which he had primary responsibility, as well as company-wide income and free cash flowCompany-wide performance. For Mr. Pedretti, the income and revenue performance goals were specific to the Industrial & Flow TechnologiesPool segment, for which he had primary responsibility, as well as company-wideCompany-wide income and free cash flow performance. For Mr. Chiu, the income and revenue performance goals were specific to the Water Solutions segment, for which he had primary responsibility, as well as Company-wide income and free cash flow performance.When establishing the 20222023 MIP design, the Compensation Committee once again approved an ESG component addressing progress towards our five social responsibility strategic targets announced in 2021 in the form of a potential modifier to the final MIP financial calculation for executive officers. This modifier may be applied to the MIP payout to increase or decrease such payout by up to 10%. Making progress toward these strategic targets is a baseline expectation. Increasing or decreasing the payout determined by the financial targets will only be for achievement well above or below overall expected progress. Threshold performance of financial targets must be met before any ESG modifier can be applied. In addition, the maximum payout for MIP is 200% of target, regardless of ESG performance. | | | | | | | | | 2024 Proxy Statement | Pentair |
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Annual Incentive Performance Measures and ResultsCOMPENSATION DISCUSSION AND ANALYSIS
20222023 performance goals that applied to each of our Named Executive Officers, as well as the weight assigned
to each performance goal, and the corresponding payout levels, and actual results were as follows: Company-wide (Stauch, Fishman, Hooper) | | | | | | | | | | | | | | | | | | | | | Financial Performance Measure | Weight | Threshold(1) (50% payout) | Target (100% payout) | Maximum (200% payout) | Payout % | Weighted Payout % | | | | | | | | Segment Income(2) | | | 111.76 | % | 55.88 | % | | | | | | Revenue | | | 91.57 | % | 27.47 | % | | | | | | Free Cash Flow(2) | | | 166.67 | % | 33.33 | % | | | | | | Total | 100% | | | 116.69 | % | | | | | | ESG Modifier | +/- 10% modifier | | 100 | % | 100 | % | | | | | |
Pool Segment (Pedretti) | | | | | | | | | | | | | | | | | | | | | Financial Performance Measure | Weight | Threshold(1) (50% payout) | Target (100% payout) | Maximum (200% payout) | Payout % | Weighted Payout % | | | | | | | | Pool Income(3) | | | 0.00 | % | 0.00 | % | | | | | | Pool Revenue(3) | | | 0.00 | % | 0.00 | % | | | | | | Pentair Free Cash Flow(2) | | | 166.67 | % | 33.33 | % | | | | | | Pentair Income(2) | | | 111.76 | % | 22.35 | % | | | | | | Total | 100% | | | 55.69 | % | | | | | | ESG Modifier | +/- 10% modifier | | 100 | % | 100 | % | | | | | |
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Water Solutions Segment (Chiu) | | | | | | | | | | | | | | | | | | | | | Financial Performance Measure | Weight | Threshold(1) (50% payout) | Target (100% payout) | Maximum (200% payout) | Payout % | Weighted Payout % | | | | | | | | Water Solutions Income(3) | | | 200.00 | % | 80.00 | % | | | | | | Water Solutions Revenue(3) | | | 132.17 | % | 26.43 | % | | | | | | Pentair Free Cash Flow(2) | | | 166.67 | % | 33.33 | % | | | | | | Pentair Income(2) | | | 111.76 | % | 22.35 | % | | | | | | Total | 100% | | | 162.12 | % | | | | | | ESG Modifier | +/- 10% modifier | | 100 | % | 100 | % | | | | | |
(1)Meeting 50% threshold is required for any payout. (2)Please see Appendix A for reconciliation of GAAP to non-GAAP financial measures included in this section. (3)Income at the segment level represents equity income of unconsolidated subsidiaries and operating income exclusive of intangible amortization, certain acquisition related expenses, costs of transformation and restructuring activities, impairments and other unusual non-operating items at the segment level. Revenue at the segment level represents segment gross sales less applicable deductions for discounts, returns, and price adjustments to arrive at net sales for the segment. | | | Weight | | Threshold (RequiredConsistent with our continuous effort to align pay with performance, and in response to shareholder feedback that compensation should be tied to strategic financial and operating performance goals, Named Executive Officer annual incentive compensation does not include an individual contribution component. As such, annual incentive compensation for any payout;Named Executive Officers is based on the achievement of financial performance goals and progress toward our social responsibility strategic targets. The target levels for the performance goals were aligned with the corporate objectives in our annual operating plan. In setting the 2023 target levels, the Company focused on incentivizing growth over 2022 actual results, factoring in a full year contribution from Manitowoc Ice, offset by expected volume declines from the rebalancing of residential channel inventory in 2023. To provide an added performance incentive, the Compensation Committee determined that the amount of incentive compensation related to each performance goal would be scaled according to the amount by which the measure exceeded or fell short of the target. The Compensation Committee reviews information about annual incentive plan design among peer companies and considers the need for the Company to ensure that performance goals are reasonably attainable to provide appropriate incentives for executive officers. As such, payouts begin for 2023 performance were scaled from 0.50 times at 50%) | | | Target (threshold performance to 2.0 times at the maximum, as detailed in the tables above. In line with our long-term goal to consistently generate free cash flow that equals or exceeds 100% payout) | | | Maximum (200% payout) | of net income, we set our 2023 cash flow target to equal 100% conversion of our forecast net income. | | Segment Income | | | | | 50% | | | | $ 720 million | | | $ 800 million | | | $ 880 million | | | Revenue | | | | | 30% | | | | $3,780 million | | | $4,200 million | | | $4,620 million | | | Free Cash Flow | | | | | 20% | | | | $ 525 million | | | $ 620 million | | | $ 715 million | | | ESG Modifier | | | | | +/-10% | | | | | | | | | | | |
| Consumer Solutions Financial Performance Measure | | | Weight | | | Threshold (Required for any payout; payouts begin at 50%) | | | Target (100% payout) | | | Maximum (200% payout) | | | Consumer Solutions Income | | | | | 40% | | | | $ 585 million | | | $ 650 million | | | $ 715 million | | | Consumer Solutions Revenue | | | | | 20% | | | | $2,405 million | | | $2,675 million | | | $2,940 million | | | Pentair Free Cash Flow | | | | | 20% | | | | $ 525 million | | | $ 620 million | | | $ 715 million | | | Pentair Income | | | | | 20% | | | | $ 720 million | | | $ 800 million | | | $ 880 million | | | ESG Modifier | | | | | +/-10% | | | | | | | | | | | |
| Industrial & Flow Technologies Financial Performance Measure | | | Weight | | | Threshold (Required for any payout; payouts begin at 50%) | | | Target (100% payout) | | | Maximum (200% payout) | | | Industrial & Flow Technologies Income | | | | | 40% | | | | $ 215 million | | | $ 240 million | | | $ 265 million | | | Industrial & Flow Technologies Revenue | | | | | 20% | | | | $1,375 million | | | $1,525 million | | | $1,680 million | | | Pentair Free Cash Flow | | | | | 20% | | | | $ 525 million | | | $ 620 million | | | $ 715 million | | | Pentair Income | | | | | 20% | | | | $ 720 million | | | $ 800 million | | | $ 880 million | | | ESG Modifier | | | | | +/-10% | | | | | | | | | | | |
Consistent with our continuous effort to align pay with performance, and in response to shareholder feedback that compensation should be tied to strategic financial and operating performance goals, Named Executive Officer annual incentive compensation does not include an individual contribution component. As such, annual incentive compensation for Named Executive Officers is based on the achievement of financial performance goals and progress towards our social responsibility strategic targets.
The target levels for the performance goals were aligned with the corporate objectives in our annual operating plan. To provide an added performance incentive, the Compensation Committee determined that the amount of incentive compensation related to each performance goal would be scaled according to the amount by which the measure exceeded or fell short of the target. The Compensation Committee reviews information about annual incentive plan design among peer companies and considers the need for the Company
to ensure that performance goals are reasonably attainable to provide appropriate incentives for executive officers. As such, payouts for 2022 performance were scaled from 0.50 at threshold performance to 2.0 times at the maximum, as detailed in the tables above. In line with our long-term goal to consistently generate free cash flow that equals or exceeds 100 percent of net income, we set our 2022 cash flow target to equal 100 percent conversion of our forecast net income.
In assessing our performance against the financial targets, the Compensation Committee excluded the 2021 baseline financial impacts (revenue and segment income contributions) of our acquisition of Manitowoc Ice since that acquisition was not contemplated at the time the financial targets were set. These adjustments reduced the Company’s and Consumer Solutions’ revenue and segment income by approximately $134 million and $36 million, respectively.
Additionally, the Compensation Committee also excluded the financial impacts (revenue and segment income
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How We Evaluate Performance COMPENSATION DISCUSSION AND ANALYSIS
contributions) of foreign exchange that was not contemplated at the time the financial targets were set. The foreign exchange adjustments increased the Company’s revenue and segment income by $61 million and $7 million, respectively, increased the revenue and segment income of Consumer Solutions by $21 million and $5 million, respectively, and increased the revenue and segment income of Industrial & Flow Technologies by $39 million and $6 million, respectively. Our financial results yielded a payout at 55.55%116.69% of target for each Named Executive Officer, except Mr. Pedretti and Mr. D’Ovidio,Chiu, who received payouts of 87.12%55.69% and 26.16%162.12% of target, respectively.
With respect to the ESG modifier, the Compensation Committee recognized that progress was made in 2022 2023 with respect to our social responsibility strategic targets that were announced in 2021. Making progress toward these strategic targets is a baseline expectation. The modifier is intended to apply only to achievement well above or below overall expected progress. For 2022,2023, the Compensation Committee did not modify incentives up or down based on ESG results, reflecting progress generally on target against our goals. The actual incentive compensation of each Named Executive Officer was determined by multiplying the eligible target incentive compensation amount by a multiplier determined as described above. For 2022, actual results as measured byperformance against the performance goals under the MIP for each of our Named Executive Officers were as follows:
| Company-wide Financial Performance Measure | | | Weight | | | Target (100% Payout) | | | Actual Financial Results | | | Payout % | | | Weighted Payout % | | | Segment Income(1)(3) | | | 50% | | | $ 800 million | | | $ 739 million | | | 61.9% | | | 30.94% | | | Revenue(1) | | | 30% | | | $4,200 million | | | $4,049 million | | | 82.0% | | | 24.61% | | | Free Cash Flow(3) | | | 20% | | | $ 620 million | | | $ 283 million | | | 0.0% | | | 0.00% | | | Total | | | 100% | | | | | | | | | | | | 55.55% | | | ESG Modifier | | | +/-10% | | | | | | | | | 100% | | | 55.55% | |
| Consumer Solutions Financial Performance Measure | | | Weight | | | Target (100% Payout) | | | Actual Financial Results | | | Payout % | | | Weighted Payout % | | | Consumer Solutions Income(1)(2) | | | 40% | | | $ 650 million | | | $ 580 million | | | 0.0% | | | 0.00% | | | Consumer Solutions Revenue(1)(2) | | | 20% | | | $2,675 million | | | $2,507 million | | | 68.9% | | | 13.78% | | | Pentair Free Cash Flow(3) | | | 20% | | | $ 620 million | | | $ 283 million | | | 0.0% | | | 0.00% | | | Pentair Income(1)(3) | | | 20% | | | $ 800 million | | | $ 739 million | | | 61.9% | | | 12.38% | | | Total | | | 100% | | | | | | | | | | | | 26.16% | | | ESG Modifier | | | +/-10% | | | | | | | | | 100% | | | 26.16% | |
| Industrial & Flow Technologies Financial Performance Measure | | | Weight | | | Target (100% Payout) | | | Actual Financial Results | | | Payout % | | | Weighted Payout % | | | Industrial & Flow Technologies Income(1)(2) | | | 40% | | | $ 240 million | | | $ 248 million | | | 132.0% | | | 52.80% | | | Industrial & Flow Technologies Revenue(1)(2) | | | 20% | | | $1,525 million | | | $1,540 million | | | 109.7% | | | 21.94% | | | Pentair Free Cash Flow(3) | | | 20% | | | $ 620 million | | | $ 283 million | | | 0.0% | | | 0.00% | | | Pentair Income(1)(3) | | | 20% | | | $ 800 million | | | $ 739 million | | | 61.9% | | | 12.38% | | | Total | | | 100% | | | | | | | | | | | | 87.12% | | | ESG Modifier | | | +/-10% | | | | | | | | | 100% | | | 87.12% | |
(1)
As described above, results were adjusted to exclude the 2021 Manitowoc Ice acquisition baseline results and the impact of foreign exchange not contemplated at the time the financial targets were set.
(2)
Income at the segment level represents equity income of unconsolidated subsidiaries and operating income exclusive of intangible amortization, certain acquisition related expenses, costs of transformation and restructuring activities, impairments and other unusual non-operating items at the segment level.
Revenue at the segment level represents segment gross sales less applicable deductions for discounts, returns, and price adjustments to arrive at net sales for the segment.
(3)
Please see Appendix A for reconciliation of GAAP to non-GAAP financial measures included in this section.
established targets.COMPENSATION DISCUSSION AND ANALYSIS
2022 LONG-TERM INCENTIVE COMPENSATION
The Compensation Committee emphasizes executive compensation that is tied to building and sustaining our company’s value through ordinary share performance over time. How We Set Award ValuesThe Compensation Committee establishes long-term incentive compensation targets taking into consideration both published survey data and data from our Comparator Group. The Compensation Committee does not set award levels based on a particular peer group benchmark or any single factor. The Compensation Committee determines appropriate performance incentives based on a wide range of factors, such as competitive conditions for the Named Executive Officer’s position within the Comparator Group and in the broader employment market, as well as the Named Executive Officer’s level of responsibility, experience, and individual performance. As it does each year, in determining 20222023 long-term incentive compensation, the Compensation Committee referenced benchmark data (including compensation surveys, Comparator Group information, and other data provided by Aon Consulting) in setting target dollar award levels for each Named Executive Officer and for each position or grade level. Ms. Hooper joined Pentair on December 6, 2022 and her appointment as the Executive Vice President and Chief Human Resources Officer was effective January 1, 2023. In connection with her employment, the Compensation Committee reviewed and approved a new hire grant of performance share units and restricted stock units to address forfeitures related to her prior employment. As in prior years, the Compensation Committee continued to balance our long-term incentive compensation program components in a manner focused on shareholder wealth creation, the creation of a sustainable business, and ensuring the leadership is committed to the long-term success of our company. For 2022,2023, the Compensation Committee maintained the mix of long-term incentive award of performance share units at 50% of the total long-term award value, and stock options and restricted stock units each at 25% of the total long-term award value as described below.value. The components had the features described below. | | | | | | | | | 44 | | Pentair | 2024 Proxy Statement |
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Stock options — Each stock option has a term of ten years, with one-third of the options vesting on each of the first, second, and third anniversaries of the grant date.2023 Equity Mix
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Restricted stock units — Each restricted stock unit represents the right to receive one ordinary share upon vesting. The restricted stock units generally vest as to one-third of the restricted stock units on each of the first, second, and third anniversaries of the grant date. Restricted stock units granted after May 2020 accrue dividend equivalents that will be paid out in ordinary shares if and when the award vests. Earlier restricted stock units entitled the holder to receive cash dividends on the units when dividends were declared.
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Performance share units — Each performance share unit represents the right to receive one ordinary share at the end of a three-year performance period if specified performance goals are achieved. For the performance share units granted in 2022 for the performance period 2022-2024, the Compensation Committee retained adjusted EPS and ROIC as the performance goals.
| | | | | | | | | Component | 2023 Proportion | Features | | | | Performance Share Units | | Each performance share unit represents the right to receive one ordinary share at the end of a three-year performance period if specified performance goals are achieved. For the performance share units granted in 2023 for the performance period 2023-2025, the Compensation Committee retained Adjusted EPS and ROIC as the performance goals. | | | | | | | | | | Stock Options | | Each stock option has a term of 10 years, with one-third of the options vesting on each of the first, second, and third anniversaries of the grant date. | | | | | | | Restricted Stock Units | | Each restricted stock unit represents the right to receive one ordinary share upon vesting. The restricted stock units generally vest as to one-third of the restricted stock units on each of the first, second, and third anniversaries of the grant date. Restricted stock units accrue dividend equivalents that will be paid out in ordinary shares if and when the award vests. Earlier restricted stock units entitled the holder to receive cash dividends on the units when dividends were declared. | | | |
The Compensation Committee selected these metrics because of their relationship to driving long-term shareholder value and alignment with business strategy. The Compensation Committee believes that, while long-term interests should be reflected in performance-based awards, the targets should also be realistic and attainable. As such, the Compensation Committee set performance metrics for the 2022-20242023-2025 PSUs based on adjustedAdjusted EPS and ROIC targets aligned with the growth objectives as defined within Pentair’s strategic plan, including payouts at Thresholdthreshold levels that would pay out only at minimum Adjusted EPS growth and minimum ROIC performance. Payouts would be based on achievement of the threshold, target, and maximum level of performance set for each metric, with payouts scaled for performance between those levels. | | | | | | | | | | | | | | | | | | | | Adjusted EPS 75% weighting | + | ROIC 25% weighting | = | PSU Payout | | | | | |
The number of shares subject to theperformance share units, stock options, and restricted stock units and performance share units, and the values of the awards granted to the Named Executive Officers in 20222023 are reflected under “Executive Compensation Tables — Grants of Plan-Based Awards in 2022.2023.” The value of restricted stock units that vested for each Named Executive Officer in 20222023 and the value of options exercised by each Named Executive Officer in 2022
COMPENSATION DISCUSSION AND ANALYSIS
2023 are shown in the table under “Executive Compensation Tables — 20222023 Option Exercises and Stock Vested Table.” Results of Performance Measures Under 2021-2023 PSUs Achievement under 2020-2022 PSUs
The Compensation Committee granted stock settled performance share units to the Named Executive Officers in 2020,2021, relating to the three-year performance period 2020-2022.2021 to 2023. Each performance unit entitled the holder to one ordinary share following the end of the three-year performance period if wethe Company achieved specific company performance goals on metrics established by the Compensation Committee. The performance goals selected by the Compensation Committee for the 2020-20222021- 2023 performance period were Adjusted EPS and ROIC, weighted at 75% and 25%, respectively. The targets set were reflective of our long-term growth and acquisition strategy. Payouts would be scaled for performance between threshold and target, and between target and maximum. | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Compensation Discussion and Analysis |
The Compensation Committee reviewed and approved the performance share units for the 2020-20222021-2023 performance period as reflected in the chart below. The payout levels for 2020-2022 PSUs were as follows:
| | | | | | | | | | | | | | | | | | Financial Performance Measure | Weight | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual Weighted Payout (% of Target) | | | | | | | Adjusted EPS* | | | 150.00 | % | | | | | | | | | | | | | ROIC** | | | 21.94 | % | | | | | | | | | | | | | 2021-2023 Total Weighted Performance | | | 171.94 | % | | | | |
| Financial Performance Measure | | | Weight | | | Threshold (50% Payout) | | | Target (100% payout) | | | Maximum (200% payout) | | | Actual | | | Actual Weighted Payout (% of Target) | | | Adjusted EPS* | | | 75% | | | $2.68 | | | $3.00 | | | $3.71 | | | $3.68 | | | 146.58% | | | ROIC** | | | 25% | | | 12% | | | 15% | | | 18% | | | 15.7% | | | 30.83% | | | 2020-2022 Total Weighted Performance | | | 100% | | | | | | | | | | | | | | | 177.41% | |
*
Adjusted EPS is determined based on full year 20222023 adjusted earnings per diluted share from continuing operations.
**
ROIC is determined by the sum of the trailing four quarters of Segment Income after tax plus depreciation less capital expenditures for the quarters ended March 31, June 30, September 30 and December 31, 20222023 divided by the average of the trailing five quarters invested capital (Total Shareholders’ Equity + Long-term Debt + Current Maturities of Long-term Debt and Short-term Borrowings — Cash and Cash Equivalents) as of December 31, 2022.2023. 2024 Performance Measures
PERQUISITES AND OTHER PERSONAL BENEFITS For the performance share units granted in 2024 for the 2024-2026 performance period, the Compensation Committee retained Adjusted EPS and ROIC as the performance measures. | | | | | | | Additional Benefits and Perquisites | | |
Perquisites and Other Personal Benefits The Compensation Committee periodically reviews market data provided by Aon Consulting to assess the levels of perquisites and other personal benefits provided to the Named Executive Officers. We provide our executive officers with limited perquisites in the form of occasional personal use of event tickets when such tickets are not being used for business purposes and a limited financial counseling benefit, for which, in both cases, we have no aggregate incremental cost, as well as one executive physical per year for preventative care. In September 2021, the Compensation Committee adopted a Products and Services Program for Executives. The program is intended to encourage the use and promotion of Pentair’s products and service offerings by our executives, and to give our executive officers first- handfirsthand knowledge of our customers’ experiences. Executive officers are eligible for a maximum of $20,000 of products and services annually; Pentair covers sales taxes on the products and services; and executive officers are responsible for paying associated income taxes. New Hires
STOCK OWNERSHIP GUIDELINES In connection with an executives commencement of employment, the Compensation Committee may from time to time approve a signing bonus or other compensation to attract a candidate. Ms. Hooper joined Pentair on December 6, 2022 and, in connection with her employment, the Compensation Committee approved a cash signing bonus of $500,000 that was paid in 2022. The bonus is subject to repayment if her employment ends before completing two years of service.The Compensation Committee has established stock ownership guidelines for the Named Executive Officers and other executives to motivate them to become significant shareholders, to further encourage long-term performance and growth, and to align their interests
with those of shareholders generally. The Compensation Committee monitors executives’ compliance with these guidelines and periodically reviews the definition of “stock ownership” to reflect the practices of companies in the Comparator Group. “Stock ownership” currently includes
COMPENSATION DISCUSSION AND ANALYSIS
ordinary shares owned by the executive officers both directly and indirectly, the pro-rated portion of unvested restricted stock units, and shares held in our employee stock ownership plan or our employee stock purchase plan. Stock ownership does not include performance share units until they are earned at the end of the
performance period and unvested or vested but unexercised stock options. The Compensation Committee determined that, over a period of five years from appointment, certain executives should accumulate and hold ordinary shares equal to specified multiples of their base salaries.
| | Executive Level | | | Stock Ownership Guidelines (as a multiple of salary) | | | | 46 | | Pentair | 2024 Proxy Statement |
| | | | | | | Chief Executive Officer | | | 6.0x base salary | | | Executive Vice PresidentCompensation Discussion and Chief Financial Officer and Chief Accounting OfficerAnalysis | | | 3.0x base salary | | | Executive Vice President and Chief Human Resources Officer | | | 2.5x base salary | | | Executive Vice President, General Counsel, Secretary and Chief Social Responsibility Officer | | | | | | Executive Vice President and Chief Technology Officer | | | | | | Executive Vice President, Chief Supply Chain Officer and Chief Transformation Officer | | | | | | Segment Presidents | �� | | | | | Other Key Executives | | | 2.0x base salary | |
STOCK OWNERSHIP FOR THE CONTINUING NAMED EXECUTIVE OFFICERS AS OF DECEMBER 31, 2022
| Name | | | Share Ownership | | | 12/31/22 Market Value ($)(1) | | | Ownership Guideline ($) | | | Meets Guideline | | | John L. Stauch | | | | | 530,322 | | | | | | 23,853,884 | | | | | | 6,180,000 | | | | | | Yes | | | | Robert P. Fishman | | | | | 44,541 | | | | | | 2,003,454 | | | | | | 2,055,000 | | | | | | No(2) | | | | Jerome O. Pedretti | | | | | 27,438 | | | | | | 1,234,161 | | | | | | 1,475,000 | | | | | | No(2) | | | | Karla C. Robertson | | | | | 39,725 | | | | | | 1,786,831 | | | | | | 1,512,500 | | | | | | Yes | | | | Stephen J. Pilla | | | | | 15,002 | | | | | | 674,790 | | | | | | 1,250,000 | | | | | | No(2) | | |
(1)
The amounts in this column were calculated by multiplying the closing market price of our ordinary shares on the last trading day of our most recently completed fiscal year of $44.98 by the number of shares owned.
(2)
Per the terms of our stock ownership guidelines, an executive has five years from the date of his or her appointment to meet his or her ownership guideline. Mr. Pedretti was promoted into an Executive Officer within the last five yearsRetirement and Mr. Pilla and Mr. Fishman joined the Company within the last five years; thus, none of these Named Executive Officers were required to have met the applicable ownership guidelines as of December 31, 2022. All other Named Executive Officers meet these guidelines.Other Benefits
COMPENSATION DISCUSSION AND ANALYSIS
We maintain an equity holding policy under which executive officers subject to our share ownership guidelines are required to retain 100% of the net number of shares acquired under equity awards until the
ownership guidelines are satisfied. This policy may be waived to the extent its application to any individual executive officer would cause undue hardship to the executive officer.
We maintain a clawback policy under which certain incentive compensation earned by an executive officer may be recouped if the executive officer’s fraud or intentional misconduct is a significant contributing factor to a restatement of financial results. The incentive compensation subject to this policy includes cash bonuses, cash performance units and equity-based awards subject to performance-based vesting conditions
to the extent the compensation was paid, credited or earned during the year after the financial results were first disclosed.
We expect to revise our clawback policy in 2023 to reflect the final clawback rules adopted by the SEC and NYSE.
POLICY PROHIBITING HEDGING AND PLEDGING
We maintain a policy that prohibits our executive officers, directors and other employees from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Pentair securities. Prohibited transactions include transactions in puts, calls, cashless collars, options (other than options issued by Pentair to acquire Pentair securities), short sales and similar rights and obligations. This restriction applies
to all Pentair securities owned directly or indirectly by the individual, including Pentair securities owned by their family members and their respective designees. Nothing in our policy precludes an executive officer, director or employee or their designees from engaging in general portfolio diversification or investing in broad-based index funds. In addition, our executive officers, directors and other employees and their family members are also prohibited from holding Pentair securities in a margin account or otherwise pledging Pentair securities as collateral for a loan.
COMPENSATION DISCUSSION AND ANALYSIS
RETIREMENT AND OTHER BENEFITS
Eligible Named Executive Officers and other executives and employees participate in a number of retirement and similar plans that are described below under “Executive Compensation Tables — 20222023 Pension Benefits.” We also provide other benefits such as medical, dental, life insurance, and disability coverage to substantially all of our full-time U.S. salaried employees, including the Named Executive Officers. We aim to provide employee and executive benefits that are competitive in the market. Medical, Dental, Life Insurance, and Disability Coverage
| Medical, Dental, Life Insurance and Disability Coverage
| |
Employee benefits such as medical, dental, life insurance, and disability coverage are available to all full-time U.S.-basedU.S.- based employees through our active employee plans. In addition to these benefits for active employees, we provide post-retirement medical, dental, and life insurance coverage to certain retirees in accordance with the legacy company plans that applied at the time the employees were hired. We provide up to one and one-half times annual salary (up to $1,000,000) in life insurance, and up to $15,000 per month in long-term disability coverage. The value of these benefits is not required to be included in the Summary Compensation Table because they are made available to all full-time U.S. employees. Other Paid Time-Off Benefits
| Other Paid Time-Off Benefits
| |
We also provide vacation and other paid holidays to all employees, including the Named Executive Officers, which we have determined to be comparable to those provided at other large companies. Deferred Compensation We sponsor a non-qualified deferred compensation program, called the Sidekick Plan, for our U.S. executives within or above the pay grade that has a midpoint annual salary of $201,000$212,900 in 2022.2023. This plan permits executives to defer up to 25% of their base salary and 75% of their annual cash incentive compensation. Executives also may defer receipt of restricted stock units or performance share units. We normally make contributions to the Sidekick Plan on behalf of participants with respect to each participant’s contributions from that portion of his or her income above the maximum imposed by the U.S. Internal Revenue Code of 1986, as amended (the “Code”), which was $305,000$330,000 in 2022,2023, but below the Sidekick Plan’s compensation limit of $700,000. Please see the narrative following the “Nonqualified Deferred Compensation Table” below for additional information on our contributions. Participants in the Sidekick Plan may invest their account balances in a number of possible mutual fund investments. Fidelity Investments Institutional Services Co. provides these investment vehicles for participants and handles all allocation and accounting services for the Sidekick Plan. We do not guarantee or subsidize any investment earnings under the Sidekick Plan, and our ordinary shares are not a permitted investment choice under the Sidekick Plan, although deferred restricted stock units and performance share units are automatically invested in Pentair shares. Amounts deferred, if any, under the Sidekick Plan by the Named Executive Officers are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table. Our contributions allocated to the Named Executive Officers under the Sidekick Plan are included in the “All Other Compensation” column in the Summary Compensation Table. | | | | | | | | | 2024 Proxy Statement | Pentair |
| 47 |
SEVERANCE AND CHANGE IN CONTROL BENEFITS
| | | | | | | Compensation Discussion and Analysis |
Severance and Change in Control Benefits We provide severance and change in control benefits to selected executives to facilitate smooth executive transitions, attract and retain executive talent, and provide for continuity of management upon a threatened or completed change in control. We believe that the security that these benefits provide helps our key executives to remain focused on our ongoing business and reduces the key executives’ concerns about future
COMPENSATION DISCUSSION AND ANALYSIS
employment. We also believe that these benefits allow our executives to consider the best interests of our company and shareholders due to the economic security afforded by these benefits. We currently provide the following severance and change in control benefits to our executive officers: ▶u
We have agreements with our key corporate executives and other key leaders, including all Named Executive Officers, that provide for contingent benefits upon a change in control or upon a covered termination following a change in control. The benefits under these agreements are designed to provide economic protection to key executives following a change in control of our company so that our executives can remain focused on our business without undue personal concern.
▶u
If after a change in control of the Company, an eligible employee is terminated by the Company other than by reason of death, disability, or cause (as defined in the KEESA)Key Executive Employment and Severance Agreement (“KEESA”)), then all options, restricted stock, and restricted stock units that are unvested become fully vested (e.g., double trigger vesting); all performance awards (other than annual incentive awards) are paid in full based on performance at the
better of target or trend; and all annual incentive awards are paid based on full satisfaction of the performance goals (i.e., target). In addition, if an employee’s employment is involuntarily terminated for a reason other than cause, death or disability, or if an employee who is a Board-appointed corporate officer voluntarily terminates employment for good reason, then the employee’s outstanding awards will be eligible for continued or accelerated vesting as described below under “Executive Compensation Tables — Potential Payments Upon Termination Oror Change Inin Control.” ▶u
Our executive officer severance plan provides our executive officers with severance benefits in the event of certain types of terminations of employment (other than a termination following a change in control). The severance benefits are aligned with market practices and are designed to attract and retain executive talent. The plan is described in more detail below.
We explain these benefits more fully below under “Executive Compensation Tables — Potential Payments Upon Termination Oror Change Inin Control.” Other Compensation Policies and Practices
IMPACT OF TAX CONSIDERATIONS
Section 162(m) of the Code limits the amount we may deduct for compensation paid in any year to certain executive officers (“covered employees”) to $1,000,000. Section 162(m) exempted qualifying performance- based compensation with respect to taxable years
| | | Stock Ownership Guidelines | |
beginning on or before December 31, 2017 and payable pursuant to binding written agreements in effect on November 2, 2017. Since that time all compensation to covered employees has been subject to the $1,000,000 deduction limit.
The Compensation Committee engages an external compensation consultanthas established stock ownership guidelines for the Named Executive Officers and other executives to advise the Compensation Committee in implementingmotivate them to become significant shareholders, to further encourage long-term performance and overseeing appropriate compensation programsgrowth, and policies.to align their interests with those of shareholders generally. The Compensation Committee regularly evaluates the performance of its external compensation consultantmonitors executives’ compliance with these guidelines and periodically conducts a competitive bid process forreviews the role. During 2022, the Compensation Committee continueddefinition of “stock ownership” to retain Aon Consulting, an external compensation consultant, to advise the Compensation Committee on executive compensation issues. See “Corporate Governance Matters — Committees of the Board — Compensation Committee.” The Compensation Committee evaluated the independence of Aon Consulting and the individual representatives of Aon Consulting who served as the Compensation
Committee’s consultants based on the factors required by the NYSE. Aon Consulting is a wholly-owned subsidiary of Aon plc, which provides insurance brokerage and benefit consulting services to us. For the year ended December 31, 2022, we paid Aon plc approximately $1,180,000 for insurance brokerage and benefit consulting services and Aon Consulting approximately $203,000 for executive compensation consulting for the Compensation Committee. The decision to engage Aon plc for insurance brokerage and benefit consulting services was made by management and was not approved by the Board or the Compensation Committee. The Compensation Committee concluded, based on the evaluation described above, that the services performed by Aon plc with respect to insurance and benefits administration did not raise a conflict of interest or impair Aon Consulting’s ability to provide
COMPENSATION DISCUSSION AND ANALYSIS
independent advice to the Compensation Committee regarding executive compensation matters and that Aon Consulting was independent for purposes of the Compensation Committee.
At the direction of the Compensation Committee, Aon Consulting advises the Compensation Committee in implementing and overseeing appropriate compensation programs and policies. As part of this process, Aon Consulting provides the Compensation Committee with comparative market data based on analyses ofreflect the practices of companies in the Comparator Group defined above under “Comparative Framework”Group. “Stock ownership” currently includes ordinary shares owned by the executive officers both directly and relevant survey data.
The comparative market data that Aon Consulting provides addressindirectly, the structurepro-rated portion of unvested restricted stock units, and shares held in our employee stock ownership plan or our employee stock purchase plan. Stock ownership does not include performance share units until they are earned at the end of the compensation programs maintained by the Comparator Group companies as well as the amount of compensation they provide. Aon Consulting provides guidance on industry best practicesperformance period and advises the Compensation Committee in determining appropriate ranges for base salaries, annual incentive compensation and long-term incentive compensation for each senior executive position.
EVALUATING THE CHIEF EXECUTIVE OFFICER’S PERFORMANCE
In the fall of 2022, the independent directors on the Board and the Compensation Committee employed a formal process to evaluate Mr. Stauch’s performance. Each independent director provided an evaluation of Mr. Stauch’s performance. The Board Chairman and the Compensation Committee Chair discussed the evaluation results with the Compensation Committee and independent directors, and the independent directors reviewed and discussed the evaluation results and
Mr. Stauch’s compensation in executive session of the Board of Directors meeting. The Board Chairman and the Compensation Committee Chair finalized Mr. Stauch’s performance assessment and reviewed the assessment results and commentary with Mr. Stauch.unvested or vested but unexercised stock options. The Compensation Committee determined Mr. Stauch’s compensationthat, over a period of five years from appointment, certain executives should accumulate and performance targets for the following year.hold ordinary shares equal to specified multiples of their base salaries.
| | | | | | | | | 48 | | Pentair | 2024 Proxy Statement |
| | | | | | | Compensation Discussion and Analysis |
| | | | | | Executive Level | Stock Ownership Guidelines (as a multiple of salary) | Chief Executive Officer | 6.0x base salary | Executive Vice President, Chief Financial Officer and Chief Accounting Officer | 3.0x base salary | Executive Vice President and Chief Human Resources Officer Executive Vice President, General Counsel, Secretary and Chief Social Responsibility Officer Executive Vice President, Chief Supply Chain Officer and Chief Transformation Officer Executive Vice President and Chief Technology Officer Segment Presidents | 2.5x base salary | Other Key Executives | 2.0x base salary |
STOCK OWNERSHIP FOR THE NAMED EXECUTIVE OFFICERS AS OF DECEMBER 31, 2023 | | | | | | | | | | | | | | | | | | | | | Share Ownership | 12/31/2023 Market Value ($)(1) | Ownership Guideline ($) | Meets Guideline | John L. Stauch | 649,147 | | 47,199,478 | | 6,450,000 | | Yes | Robert P. Fishman | 38,573 | | 2,804,643 | | 2,115,000 | | Yes | Tanya L. Hooper | 7,116 | | 517,404 | | 1,312,500 | | No (2) | Jerome O. Pedretti | 36,103 | | 2,625,049 | | 1,600,000 | | Yes | Adrian C. Chiu | 17,408 | | 1,265,736 | | 1,312,500 | | No (2) |
(1)The amounts in this column were calculated by multiplying the closing market price of our ordinary shares on the last trading day of our most recently completed fiscal year of $72.71 by the number of shares owned. (2)Per the terms of our stock ownership guidelines, an executive has five years from the date of his or her appointment to meet his or her ownership guideline. Ms. Hooper joined the Company within the last five years, and Mr. Chiu was promoted to an executive officer position within the last five years; thus, neither of these Named Executive Officers were required to have met the applicable ownership guidelines as of December 31, 2023. All other Named Executive Officers meet these guidelines. SHARE OWNERSHIP REQUIREMENTS | | | | | | | | | 2024 Proxy Statement | Pentair |
| 49 |
| | | | | | | Compensation Discussion and Analysis |
We maintain an equity holding policy under which executive officers subject to our share ownership guidelines are required to retain 100% of the net number of shares acquired under equity awards until the ownership guidelines are satisfied. This policy may be waived to the extent its application to any individual executive officer would cause undue hardship to the executive officer. The Compensation Committee reviews and approves equity awards to executive officers at regular meetings throughout the year. The Compensation Committee has also given the Chief Executive Officer discretion to grant equity awards to non-executive officers as required throughout the year (other than normal annual grants, which are granted by the Compensation Committee) within the guidelines of our equity incentive plan, up to a maximum grant date value of $2,000,000 total for 2022.2023. The Chief Executive Officer provides a summary report to the Compensation Committee, disclosing the aggregate awards granted by the Chief Executive Officer during the preceding fiscal year. Awards granted outside of our regularly scheduled Compensation Committee meetings are generally effective on the last day of the month following the month in which they were approved. If the last day of such month is a day on which the NYSE is not open for trading, then the grant date will be the first day of the following month on which the NYSE is open for trading. All options are granted with an exercise price equal to fair market value based on the closing share price on the effective day of grant.
We have had a clawback policy in effect since 2014 under which certain incentive compensation earned by an executive officer may be recouped if the executive officer’s fraud or intentional misconduct is a significant contributing factor to a restatement of financial results. We revised our clawback policy in 2023 to reflect the final clawback policy rules adopted by the SEC and NYSE. Under the revised policy, in the event that we are required to prepare an accounting restatement due to material non-compliance with any financial reporting requirement, we will reasonably promptly recover any excess incentive-based compensation paid to our current and former executive officers based on any misstated financial reporting measure that was received during the three-year period preceding the date we are required to prepare the restatement. | | | Policy Prohibiting Hedging and Pledging | |
TABLE OF CONTENTSWe maintain a policy that prohibits our executive officers, directors and other employees from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Pentair securities. Prohibited transactions include transactions in puts, calls, cashless collars, options (other than options issued by Pentair to acquire Pentair securities), short sales and similar rights and obligations. This restriction applies to all Pentair securities owned directly or indirectly by the individual, including Pentair securities owned by their family members and their respective designees. Nothing in our policy precludes an executive officer, director or employee, or their designees from engaging in general portfolio diversification or investing in broad-based index funds. In addition, our executive officers, directors, and other employees, and their family members are also prohibited from holding Pentair securities in a margin account or otherwise pledging Pentair securities as collateral for a loan.EXECUTIVE COMPENSATION TABLES | | | | | | | | | 50 | | Pentair | 2024 Proxy Statement |
| | | | | | | Compensation Discussion and Analysis |
| | | Risk Considerations in Compensation Decisions | |
The Compensation Committee believes that paying for performance is an important part of its compensation philosophy, but recognizes the risk that incentivizing specific measures of performance may pose to the performance of our company as a whole if personnel were to act in ways designed primarily to maximize their compensation. Therefore, the Compensation Committee conducts an annual assessment of potential risks arising from its compensation programs and policies applicable to all employees. In its December 2023 assessment, the Compensation Committee noted the following considerations, among others: uthe balance of our fixed and variable compensation in our executive compensation program; SUMMARY COMPENSATION TABLEuthe balance in our executive compensation program between the achievement of short-term objectives and longer-term value creation;
uthe mix of compensation forms within our long-term incentive compensation plan; uour use of multiple performance measures under our incentive compensation plans; umetrics tied to segment performance for segment presidents; uthe impact of these performance measures on our financial results; uour use of performance curves that require achievement of a minimum level of performance before receiving any incentive payout; ucapped payouts under our incentive plans; uclawback policy pursuant to which certain incentive compensation earned by our executive officers may be subject to recoupment; and uour stock ownership guidelines and equity holding policy. Based on its assessment, the Compensation Committee concluded that the risks arising from our executive compensation program and policies are not reasonably likely to have a material adverse effect on our company. The Compensation Committee will continue to assess our executive compensation program to align employee interests with those of long-term shareholder interests. | | | Impact of Tax Considerations | |
Section 162(m) of the Code limits the amount we may deduct for compensation paid in any year to certain executive officers (“covered employees”) to $1,000,000. Section 162(m) exempted qualifying performance-based compensation with respect to taxable years beginning on or before December 31, 2017 and payable pursuant to binding written agreements in effect on November 2, 2017. Since that time all compensation to covered employees has been subject to the $1,000,000 deduction limit. | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Executive Compensation Tables |
Summary Compensation Table The table below summarizes the total compensation paid to or earned by each of the Named Executive Officers for the years ended December 31, 2020, 2021, 2022, and 2022.2023. | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | | (j) | | | Name and Principal Position | | | Year | | | Salary ($)(1) | | | Bonus ($) | | | Stock Awards ($)(2) | | | Option Awards ($)(3) | | | Non-Equity Incentive Plan Compensation ($)(1)(4) | | | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(5) | | | All Other Compensation ($)(6) | | | Total Compensation ($) | | | John L. Stauch President and Chief Executive Officer | | | | | 2022 | | | | | | 1,030,040 | | | | | | — | | | | | | 4,499,985 | | | | | | 1,500,027 | | | | | | 715,206 | | | | | | — | | | | | | 38,007 | | | | | | 7,783,265 | | | | | | 2021 | | | | | | 995,038 | | | | | | — | | | | | | 3,749,993 | | | | | | 1,250,001 | | | | | | 2,388,000 | | | | | | 1,008,814 | | | | | | 37,700 | | | | | | 9,429,546 | | | | | | 2020 | | | | | | 970,038 | | | | | | — | | | | | | 3,374,966 | | | | | | 1,124,995 | | | | | | 1,234,888 | | | | | | 2,598,053 | | | | | | 39,104 | | | | | | 9,342,044 | | | | Robert P. Fishman Executive Vice President, Chief Financial Officer and Chief Accounting Officer | | | | | 2022 | | | | | | 685,026 | | | | | | — | | | | | | 1,293,793 | | | | | | 431,249 | | | | | | 380,518 | | | | | | — | | | | | | 48,970 | | | | | | 2,839,556 | | | | | | 2021 | | | | | | 665,026 | | | | | | — | | | | | | 1,275,006 | | | | | | 425,005 | | | | | | 1,330,000 | | | | | | — | | | | | | 43,908 | | | | | | 3,738,945 | | | | | | 2020 | | | | | | 455,510 | | | | | | — | | | | | | 1,499,989 | | | | | | — | | | | | | 482,333 | | | | | | — | | | | | | 109,046 | | | | | | 2,546,878 | | | | Jerome O. Pedretti Executive Vice President and President, Industrial & Flow Technologies | | | | | 2022 | | | | | | 590,023 | | | | | | — | | | | | | 750,010 | | | | | | 250,001 | | | | | | 411,206 | | | | | | — | | | | | | 38,150 | | | | | | 2,039,390 | | | | | | 2021 | | | | | | 570,022 | | | | | | — | | | | | | 637,529 | | | | | | 212,503 | | | | | | 820,800 | | | | | | — | | | | | | 31,566 | | | | | | 2,272,420 | | | | Karla C. Robertson Executive Vice President, General Counsel, Secretary and Chief Social Responsibility Officer | | | | | 2022 | | | | | | 605,023 | | | | | | — | | | | | | 693,785 | | | | | | 231,252 | | | | | | 252,058 | | | | | | — | | | | | | 35,750 | | | | | | 1,817,868 | | | | | | 2021 | | | | | | 585,023 | | | | | | — | | | | | | 674,991 | | | | | | 225,003 | | | | | | 877,500 | | | | | | — | | | | | | 30,446 | | | | | | 2,392,963 | | | | | | 2020 | | | | | | 540,021 | | | | | | — | | | | | | 543,764 | | | | | | 181,249 | | | | | | 429,665 | | | | | | — | | | | | | 54,544 | | | | | | 1,749,243 | | | | Stephen J. Pilla Executive Vice President, Chief Supply Chain Officer | | | | | 2022 | | | | | | 500,019 | | | | | | — | | | | | | 562,454 | | | | | | 187,511 | | | | | | 180,538 | | | | | | — | | | | | | 40,666 | | | | | | 1,471,188 | | | | Mario R. D’Ovidio Former Executive Vice President and President, Consumer Solutions(7) | | | | | 2022 | | | | | | 450,178 | | | | | | — | | | | | | 825,046 | | | | | | 275,013 | | | | | | 88,838 | | | | | | — | | | | | | 459,534 | | | | | | 2,098,609 | | | | | | 2021 | | | | | | 615,024 | | | | | | — | | | | | | 750,020 | | | | | | 250,005 | | | | | | 984,000 | | | | | | — | | | | | | 24,586 | | | | | | 2,623,635 | | | | | | 2020 | | | | | | 397,743 | | | | | | — | | | | | | 750,014 | | | | | | — | | | | | | 429,824 | | | | | | — | | | | | | 12,501 | | | | | | 1,590,082 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(1)(4) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total Compensation ($) | John L. Stauch | 2023 | 1,075,041 | | — | | 4,649,995 | | 1,549,963 | | 1,630,743 | | 1,064,217 | | 38,510 | | 10,008,469 | | Chief Executive Officer | 2022 | 1,030,040 | | — | | 4,499,985 | | 1,500,027 | | 715,206 | | — | | 38,007 | | 7,783,265 | | 2021 | 995,038 | | — | | 3,749,993 | | 1,250,001 | | 2,388,000 | | 1,008,814 | | 37,700 | | 9,429,546 | | Robert P. Fishman | 2023 | 705,027 | | — | | 1,312,473 | | 437,490 | | 822,665 | | — | | 40,995 | | 3,318,650 | | Executive Vice President, Chief Financial Officer and Chief Accounting Officer | 2022 | 685,026 | | — | | 1,293,793 | | 431,249 | | 380,518 | | — | | 48,970 | | 2,839,556 | | 2021 | 665,026 | | — | | 1,275,006 | | 425,005 | | 1,330,000 | | — | | 43,908 | | 3,738,945 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Tanya L. Hooper | 2023 | 525,020 | | — | | 1,756,246 | | 168,739 | | 398,205 | | — | | 18,650 | | 2,866,860 | | Executive Vice President and Chief Human Resources Officer | | — | | — | | — | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | — | | — | | — | | Jerome O. Pedretti | 2023 | 640,025 | | — | | 1,049,996 | | 349,987 | | 285,133 | | — | | 36,250 | | 2,361,391 | | Executive Vice President and Chief Executive Officer, Pool | 2022 | 590,023 | | — | | 750,010 | | 250,001 | | 411,206 | | — | | 38,150 | | 2,039,390 | | 2021 | 570,022 | | — | | 637,529 | | 212,503 | | 820,800 | | — | | 31,566 | | 2,272,420 | | | | | | | | | | | Adrian C. Chiu | 2023 | 525,020 | | — | | 824,991 | | 274,991 | | 680,904 | | — | | 38,610 | | 2,344,516 | | Executive Vice President and President, Water Solutions | | — | | — | | — | | — | | — | | — | | — | | — | | | — | | — | | — | | — | | — | | — | | — | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
Amounts shown in the “Salary” and “Non-Equity Incentive Plan Compensation” columns are not reduced by any deferrals under our nonqualified deferred compensation plans. The amounts shown in the “Salary” column for Mr. D’Ovidio include a payment for unused vacation in the amount of $24,423.
(2)
The amounts in column (e) represent the aggregate grant date fair value, computed in accordance with ASC 718, of restricted stock units and performance share units granted during each year. The values attributable to the 20222023 grants of restricted stock units were as follows: Mr. Stauch — $1,500,019;$1,549,998; Mr. Fishman — $431,264;$437,491; Ms. Hooper — $1,018,718; Mr. Pedretti — $250,027; Ms. Robertson — $231,285; Mr. Pilla — $187,485;$349,984; and Mr. D’OvidioChiu — $275,015.$274,997. The values attributable to the 20222023 grants of performance share units were based on the probable outcome of the performance conditions at the time of grant, and were as follows: Mr. Stauch — $2,999,966;$3,099,997; Mr. Fishman — $862,529;$874,982; Ms. Hooper — $737,528; Mr. Pedretti — $499,983; Ms. Robertson — $462,500; Mr. Pilla — $374,969;$700,012; and Mr. D’OvidioChiu — $550,031.$549,994. The maximum values of the 20222023 grants of performance share units at the time of grant assuming that the highest level of performance conditions areis attained, are as follows: Mr. Stauch — $5,999,932;$6,199,994; Mr. Fishman — $1,725,058;$1,749,964; Ms. Hooper — $1,475,056; Mr. Pedretti — $999,966; Ms. Robertson — $925,000; Mr. Pilla — $749,938;$1,400,024; and Mr. D’OvidioChiu — $1,100,062.$1,099,988. Additional assumptions used in the calculation of the amounts in column (e) are included in note 13 to our audited financial statements for the year ended December 31, 20222023 included in our Annual Report on Form 10-K filed with the SEC on February 21, 2023.20, 2024. Ms. Hooper joined our company on December 6, 2022. The amount shown in column (e) includes a new hire grant of restricted stock units and performance share units with an aggregate grant date fair value of $1,250,006 that Ms. Hooper received in connection with her commencement of employment to address forfeitures related to her prior employment.
(3)
The amounts in column (f) represent the aggregate grant date fair value, computed in accordance with ASC 718, of stock options granted during each year. Assumptions used in the calculation of these amounts are included in note 13 to our audited financial statements for the year ended December 31, 20222023 included in our Annual Report on Form 10-K filed with the SEC on February 21, 2023.20, 2024.
(4)
The amounts in column (g) reflect cash awards to the named individuals pursuant to awards under the MIP as determined by the Compensation Committee. | | | | | | | | | 52 | | Pentair | 2024 Proxy Statement |
48 2023 Proxy Statement
| | | | | | | Executive Compensation Tables |
EXECUTIVE COMPENSATION TABLES
(5)
The amounts in column (h) reflect the net increase, if any, in the actuarial present value of Mr. Stauch’s accumulated benefits under all of our pension plans determined using interest rate and mortality rate assumptions consistent with those used in our financial statements. The actual present value of such accumulated benefit for Mr. Stauch decreased by $3,186,081 in 2022. These negative amounts are not reflected in the sums reported in column (h).
(6)
The table below shows the components of column (i) for 2022,2023, which include perquisites and other personal benefits, and the Company contributions under the Sidekick Plan, the Pentair, Inc. Retirement Savings and Stock Incentive Plan (the “RSIP”) and the Employee Stock Purchase and Bonus Plan and, for Mr. D’Ovidio, certain severance payments.Plan. The Named Executive Officers also receive perquisites in the form of occasional personal use of event tickets when such tickets are not being used for business purposes and a limited financial counseling benefit, for which, in both cases, we have no aggregate incremental cost. | | | | | | | | | | | | | | | | (A) | (B) | (C) | (D) | Name | Other Perquisites and Personal Benefits ($)(a) | Contributions under Defined Contribution Plans ($)(b) | Matches under the Employee Stock Purchase Plan ($) | Total All Other Compensation ($) | John L. Stauch | — | | 36,250 | | 2,260 | | 38,510 | | Robert P. Fishman | 4,170 | | 36,825 | | — | | 40,995 | | Tanya L. Hooper | — | | 17,337 | | 1,313 | | 18,650 | | Jerome O. Pedretti | — | | 36,250 | | — | | 36,250 | | Adrian C. Chiu | — | | 36,279 | 2,331 | 38,610 | | | | | | | | | | | | | | | | | | | | |
| | | | (A) | | | (B) | | | (C) | | | (D) | | | (E) | | | Name | | | Other Perquisites and Personal Benefits ($)(a) | | | Contributions under Defined Contribution Plans ($)(b) | | | Matches under the Employee Stock Purchase Plan ($) | | | Severance Payments ($)(c) | | | Total All Other Compensation ($) | | | John L. Stauch | | | | | — | | | | | | 35,750 | | | | | | 2,257 | | | | | | — | | | | | | 38,007 | | | | Robert P. Fishman | | | | | 13,145 | | | | | | 35,825 | | | | | | — | | | | | | — | | | | | | 48,970 | | | | Jerome O. Pedretti | | | | | 2,400 | | | | | | 35,750 | | | | | | — | | | | | | — | | | | | | 38,150 | | | | Karla C. Robertson | | | | | — | | | | | | 35,750 | | | | | | — | | | | | | — | | | | | | 35,750 | | | | Stephen J. Pilla | | | | | 6,646 | | | | | | 31,758 | | | | | | 2,262 | | | | | | — | | | | | | 40,666 | | | | Mario R. D’Ovidio | | | | | — | | | | | | 20,250 | | | | | | 1,609 | | | | | | 437,675 | | | | | | 459,534 | | |
(a)
The amount shown in column (A) includes an annual executive physicals for Mr. Fishman in the amount of $12,295 and Mr. Pedretti in the amount of $2,400,physical and a wellness program credit for Mr. Fishman. The wellness program credit was provided pursuant to a broad-based policy that applies generally to U.S. employees. The amount shown in column (A) for Mr. Pilla reflects the aggregate incremental cost of Pentair products he received pursuant to a benefit provided to all executives as a part of our Products and Services Program for Executives.
(b)
The amount shown in column (B) for each individual reflects amounts contributed by us to the RSIP and the Sidekick Plan during 2022.2023. In the case of the Sidekick Plan, the amounts contributed by us during 20222023 relate to salary deferrals in 2021.2022. (c)
The amount shown in column (D) reflects payments pursuant to the Executive Severance Plan. Mr. D’Ovidio was entitled to receive $381,000 in cash severance, $41,675 for medical and dental premiums and $15,000 in outplacement services.
(7)
Mr. D’Ovidio’s employment terminated September 1, 2022.
| | | | | | | | | 2024 Proxy Statement | Pentair |
| 53 |
| | | | | | | Executive Compensation Tables |
Grants of Plan-Based Awards in 2023 EXECUTIVE COMPENSATION TABLES
GRANTS OF PLAN-BASED AWARDS IN 2022
| | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | | (j) | | | (k) | | | (l) | | | (m) | | | Name | | | Grant Date | | | Compensation Committee Approval Date(1) | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | | | All Other Option Awards: Number of Securities Underlying Options (#)(5) | | | Exercise or Base Price of Option Awards ($/sh) | | | Grant Date Fair Value of Stock and Option Awards ($)(6) | | | John L. Stauch | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,130 | | | | | | 42,259 | | | | | | 84,518 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,999,966 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,130 | | | | | | — | | | | | | — | | | | | | 1,500,019 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,408 | | | | | | 70.99 | | | | | | 27,215 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 76,197 | | | | | | 70.99 | | | | | | 1,472,812 | | | | | | — | | | | | | — | | | | | | 643,750 | | | | | | 1,287,500 | | | | | | 2,575,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Robert P. Fishman | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,075 | | | | | | 12,150 | | | | | | 24,300 | | | | | | — | | | | | | — | | | | | | — | | | | | | 862,529 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,075 | | | | | | — | | | | | | — | | | | | | 431,264 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,408 | | | | | | 70.99 | | | | | | 27,215 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,903 | | | | | | 70.99 | | | | | | 404,034 | | | | | | — | | | | | | — | | | | | | 342,500 | | | | | | 685,000 | | | | | | 1,370,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Jerome O. Pedretti | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,522 | | | | | | 7,043 | | | | | | 14,086 | | | | | | — | | | | | | — | | | | | | — | | | | | | 499,983 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,522 | | | | | | — | | | | | | — | | | | | | 250,027 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,408 | | | | | | 70.99 | | | | | | 27,215 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,526 | | | | | | 70.99 | | | | | | 222,786 | | | | | | — | | | | | | — | | | | | | 236,000 | | | | | | 472,000 | | | | | | 944,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Karla C. Robertson | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,258 | | | | | | 6,515 | | | | | | 13,030 | | | | | | — | | | | | | — | | | | | | — | | | | | | 462,500 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,258 | | | | | | — | | | | | | — | | | | | | 231,285 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,408 | | | | | | 70.99 | | | | | | 27,215 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,556 | | | | | | 70.99 | | | | | | 204,037 | | | | | | — | | | | | | — | | | | | | 226,875 | | | | | | 453,750 | | | | | | 907,500 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Stephen J. Pilla | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,641 | | | | | | 5,282 | | | | | | 10,564 | | | | | | — | | | | | | — | | | | | | — | | | | | | 374,969 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,641 | | | | | | — | | | | | | — | | | | | | 187,485 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,408 | | | | | | 70.99 | | | | | | 27,215 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,293 | | | | | | 70.99 | | | | | | 160,295 | | | | | | — | | | | | | — | | | | | | 162,500 | | | | | | 325,000 | | | | | | 650,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Mario R. D’Ovidio | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,874 | | | | | | 7,748 | | | | | | 15,496 | | | | | | — | | | | | | — | | | | | | — | | | | | | 550,031 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,874 | | | | | | — | | | | | | — | | | | | | 275,015 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,408 | | | | | | 70.99 | | | | | | 27,215 | | | | | | 1/03/2022 | | | | | | 12/06/2021 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,820 | | | | | | 70.99 | | | | | | 247,798 | | | | | | — | | | | | | — | | | | | | 254,000 | | | | | | 508,000 | | | | | | 1,016,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | (m) | Name | Grant Date | Compensation Committee Approval Date(3) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($/sh) | Grant Date Fair Value of Stock and Option Awards ($)(6) | John L. Stauch | 1/3/2023 | 12/12/2022 | — | | — | | — | | 34,292 | | 68,584 | | 137,168 | | — | | — | | — | | 3,099,997 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | 34,292 | | — | | — | | 1,549,998 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 2,213 | | 45.20 | | 29,636 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 113,525 | | 45.20 | | 1,520,327 | | | | 698,750 | | 1,397,500 | | 2,795,000 | | — | | — | | — | | — | | — | | — | | — | | Robert P. Fishman | 1/3/2023 | 12/12/2022 | — | | — | | — | | 9,679 | | 19,358 | | 38,716 | | — | | — | | — | | 874,982 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | 9,679 | | — | | — | | 437,491 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 2,213 | | 45.20 | | 29,636 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 30,455 | | 45.20 | | 407,853 | | | | 352,500 | | 705,000 | | 1,410,000 | | — | | — | | — | | — | | — | | — | | — | | Tanya L. Hooper | 1/3/2023 | 12/12/2022 | — | | — | | — | | 8,159 | | 16,317 | | 32,634 | | — | | — | | — | | 737,528 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | 22,538 | | — | | — | | 1,018,718 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 6,636 | | 45.20 | | 88,869 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 5,964 | | 45.20 | | 79,870 | | | | 170,625 | | 341,250 | | 682,500 | | — | | — | | — | | — | | — | | — | | — | | Jerome O. Pedretti | 1/3/2023 | 12/12/2022 | — | | — | | — | | 7,744 | | 15,487 | | 30,974 | | — | | — | | — | | 700,012 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | 7,743 | | — | | — | | 349,984 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 2,213 | | 45.20 | | 29,636 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 23,921 | | 45.20 | | 320,350 | | | | 256,000 | | 512,000 | | 1,024,000 | | — | | — | | — | | — | | — | | — | | — | | Adrian C. Chiu | 1/3/2023 | 12/12/2022 | — | | — | | — | | 6,084 | | 12,168 | | 24,336 | | — | | — | | — | | 549,994 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | 6,084 | | — | | — | | 274,997 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 2,214 | | 45.20 | | 29,650 | | 1/3/2023 | 12/12/2022 | — | | — | | — | | — | | — | | — | | — | | 18,320 | | 45.20 | | 245,341 | | | | 210,000 | | 420,000 | | 840,000 | | — | | — | | — | | — | | — | | — | | — | |
(1)
The Compensation Committee’s practices for granting options, performance share units, and restricted stock units, including the timing of all grants and approvals thereof, are described under “Compensation Discussion and Analysis — 2022 Long-Term Incentive Compensation.”
(2)
These amounts are based on the Named Executive Officer’s current position and base salary in effect on December 31, 2022. The amounts for Mr. D’Ovidio reflect the full year opportunity; while his actual bonus earned pursuant to the MIP for 2022 disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table reflects a pro rata amount based on his termination date.2023. The amounts shown in column (d) reflect the total of the threshold payment levels for each element under our MIP. This amount is 50% of the target amounts shown in column (e). The amounts shown in column (f) are 200% of such target amounts for each Named Executive Officer.
EXECUTIVE COMPENSATION TABLES
(3)
The amounts shown in column (g) reflect the total of the threshold payment levels for the 2022-20242023-2025 awards of share settled performance units granted in 20222023 under the 2020 Plan set at 50% of the target amounts shown in column (h). The amounts shown in column (i) are 200% of such target amounts. Any amounts payable with respect to performance units would be paid in February 2025,2026, based on cumulative company performance for the period 20222023 to 2024.2025. The amount shown in column (h) for Ms. Hooper includes a new hire grant of 8,850 performance share units for the 2022-2024 performance period. (3)The Compensation Committee’s practices for granting options, performance share units, and restricted stock units, including the timing of all grants and approvals thereof, are described under “Compensation Discussion and Analysis — 2023 Long-Term Incentive Compensation.”
(4)
The amounts shown in column (j) reflect the number of restricted stock units granted to each Named Executive Officer in 2022.2023. The amount for Ms. Hooper includes a new hire grant of 18,805 restricted stock units that will cliff vest after four years.
(5)
The amounts shown in column (k) reflect the number of options to purchase ordinary shares granted to each Named Executive Officer in 2022.2023.
(6)
The amounts shown in column (m) reflect the grant date fair value of the awards of restricted stock units, performance share units (at target performance level) and stock options computed in accordance with ASC 718. | | | | | | | | | 54 | | Pentair | 2024 Proxy Statement |
| | | | | | | Executive Compensation Tables |
Outstanding Equity Awards at December 31, 2023 EXECUTIVE COMPENSATION TABLES
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2022
| | | | Option Awards | | | Stock Awards | | | Name | | | Number of securities underlying unexercised options (#) Exercisable | | | Number of securities underlying unexercised options (#) Unexercisable | | | Option exercise price ($)(1) | | | Option expiration date | | | Number of shares of stock or units that have not been vested (#)(2) | | | Market value of shares of stock or units that have not vested ($)(3) | | | Equity incentive plan awards: Number of unearned shares that have not vested (#)(4) | | | Equity incentive plan awards: Market or payout value of unearned shares that have not vested ($)(5) | | | John L. Stauch | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 46,220 | | | | | | 2,078,976 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 92,920 | | | | | | 4,179,542 | | | | | | 32,596 | | | | | | — | | | | | | 51.21 | | | | | | 1/2/2024 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 47,506 | | | | | | — | | | | | | 44.43 | | | | | | 1/2/2025 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 58,499 | | | | | | — | | | | | | 38.61 | | | | | | 1/3/2027 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 87,016 | | | | | | — | | | | | | 45.42 | | | | | | 5/2/2028 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 122,549 | | | | | | — | | | | | | 37.77 | | | | | | 1/2/2029 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 75,380 | | | | | | 37,691(6) | | | | | | 46.42 | | | | | | 1/2/2030 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 33,431 | | | | | | 66,862(7) | | | | | | 51.53 | | | | | | 1/4/2031 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 77,605(8) | | | | | | 70.99 | | | | | | 1/3/2032 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Robert P. Fishman | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 51,758 | | | | | | 2,328,075 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 29,337 | | | | | | 1,319,578 | | | | | | 11,366 | | | | | | 22,734(7) | | | | | | 51.53 | | | | | | 1/4/2031 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 22,311(8) | | | | | | 70.99 | | | | | | 1/3/2032 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Jerome O. Pedretti | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,138 | | | | | | 366,047 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,653 | | | | | | 704,072 | | | | | | 6,870 | | | | | | — | | | | | | 45.42 | | | | | | 5/2/2028 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,810 | | | | | | — | | | | | | 42.68 | | | | | | 3/1/2029 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 8,044 | | | | | | 4,023(9) | | | | | | 41.08 | | | | | | 3/2/2030 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,683 | | | | | | 11,367(7) | | | | | | 51.53 | | | | | | 1/4/2031 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,934(8) | | | | | | 70.99 | | | | | | 1/3/2032 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Karla C. Robertson | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,613 | | | | | | 342,433 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 15,616 | | | | | | 702,408 | | | | | | 15,457 | | | | | | — | | | | | | 45.42 | | | | | | 5/2/2028 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,154 | | | | | | — | | | | | | 37.77 | | | | | | 1/2/2029 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,144 | | | | | | 6,073(6) | | | | | | 46.42 | | | | | | 1/2/2030 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,017 | | | | | | 12,036(7) | | | | | | 51.53 | | | | | | 1/4/2031 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,964(8) | | | | | | 70.99 | | | | | | 1/3/2032 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Stephen J. Pilla | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,557 | | | | | | 834,694 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,364 | | | | | | 556,133 | | | | | | 4,680 | | | | | | 9,361(7) | | | | | | 51.53 | | | | | | 1/4/2031 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,701(8) | | | | | | 70.99 | | | | | | 1/3/2032 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | Mario R. D’Ovidio(10) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,868 | | | | | | 803,703 | | | | | | 6,686 | | | | | | 13,373(7) | | | | | | 51.53 | | | | | | 9/1/2027 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,228(8)(10) | | | | | | 70.99 | | | | | | 9/1/2027 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | Stock Awards | | Name | Number of securities underlying unexercised options (#) Exercisable | Number of securities underlying unexercised options (#) Unexercisable | Option exercise price ($)(1) | Option expiration date | Number of shares of stock or units that have not been vested (#)(2) | Market value of shares of stock or units that have not vested ($)(3) | Equity incentive plan awards: Number of unearned shares that have not vested (#)(4) | Equity incentive plan awards: Market or payout value of unearned shares that have not vested ($)(5) | John L. Stauch | | | | | | 57,761 | | 4,199,802 | | | | | | | | | | | | 113,164 | | 8,228,154 | | | 47,506 | | | | 44.43 | | 1/2/2025 | | | | | | 58,499 | | | | 38.61 | | 1/3/2027 | | | | | | 87,016 | | | | 45.42 | | 5/2/2028 | | | | | | 122,549 | | | | 37.77 | | 1/2/2029 | | | | | | 113,071 | | | | 46.42 | | 1/2/2030 | | | | | | 66,862 | | 33,431 | | (6) | 51.53 | | 1/4/2031 | | | | | | 25,868 | | 51,737 | | (7) | 70.99 | | 1/3/2032 | | | | | | — | | 115,738 | | (8) | 45.20 | | 1/3/2033 | | | | | Robert P. Fishman | | | | | | 16,868 | | 1,226,472 | | | | | | | | | | | | 32,170 | | 2,339,080 | | | 22,733 | | 11,367 | | (6) | 51.53 | | 1/4/2031 | | | | | | 7,437 | | 14,874 | | (7) | 70.99 | | 1/3/2032 | | | | | | — | | 32,668 | | (8) | 45.20 | | 1/3/2033 | | | | | Tanya L. Hooper | | | | | | 22,860 | | 1,662,150 | | | | | | | | | | | | 16,550 | | 1,203,350 | | | — | | 12,600 | | (8) | 45.20 | | 1/3/2033 | | | | | Jerome O. Pedretti | | | | | | 11,713 | | 851,652 | | | | | | | | | | | | 22,975 | | 1,670,512 | | | 6,870 | | | | 45.42 | | 5/2/2028 | | | | | | 5,810 | | | | 42.68 | | 3/1/2029 | | | | | | 12,067 | | | | 41.08 | | 3/2/2030 | | | | | | 11,366 | | 5,684 | | (6) | 51.53 | | 1/4/2031 | | | | | | 4,311 | | 8,623 | | (7) | 70.99 | | 1/3/2032 | | | | | | — | | 26,134 | | (8) | 45.20 | | 1/3/2033 | | | | | Adrian C. Chiu | | | | | | 13,993 | | 1,017,431 | | | | | | | | | | | | 16,230 | | 1,180,083 | | | 1,495 | | | | 44.11 | | 3/2/2025 | | | | | | 2,760 | | | | 32.75 | | 3/1/2026 | | | | | | 3,254 | | | | 39.88 | | 3/1/2027 | | | | | | 4,885 | | | | 45.42 | | 5/2/2028 | | | | | | 3,744 | | | | 42.68 | | 3/1/2029 | | | | | | 4,117 | | | | 41.08 | | 3/2/2030 | | | | | | 3,547 | | 1,774 | | (9) | 58.28 | | 3/1/2031 | | | | | | 2,306 | | 4,614 | | (7) | 70.99 | | 1/3/2032 | | | | | | — | | 20,534 | | (8) | 45.20 | | 1/3/2033 | | | | |
(1)
The exercise price for all stock option grants is the fair market value of our ordinary shares on the date of grant. | | | | | | | | | 2024 Proxy Statement | Pentair |
| 55 |
| | | | | | | Executive Compensation Tables |
(2)
The restrictions with respect to one-third of the shares will lapse on the first, second, and third anniversaries of the grant date, except as noted below. The grant dates of the restricted stock unit awards are as follows:
EXECUTIVE COMPENSATION TABLES
| | | | | | | | | | | | Name | Name | | | Grant Date | | | Number of Restricted Stock Units | | | John L. Stauch | 1/4/2021 | | 8,444 | | | 1/2/2020 | | | | | | 8,079 | | | | 1/3/2022 | | 14,535 | | 1/4/2021 | | | | | | 16,648 | | | | 1/3/2023 | | 34,782 | | 1/3/2022 | | | | | | 21,493 | | | | | | | | | | | Robert P. Fishman | 1/4/2021 | | 2,871 | | | 1/3/2022 | | 4,179 | | 6/ | 1/20203/2023 | | 9,817 | | | | | | | | | | Tanya L. Hooper | 1/3/2023 | (a) | 19,074 | | | | | 39,918 | | | | 1/3/2023 | | 3,786 | | 1/4/2021 | | | | | | 5,661 | | | | | | | 1/3/2022 | | | | | 6,179 | | | | | | | | | | | Jerome O. Pedretti | 1/4/2021 | | 1,436 | | | 3/2/2020 | | | | | | 1,725 | | | | 1/3/2022 | | 2,423 | | | 1/3/2023 | | 7,854 | | | | | | | | | | Adrian C. Chiu | 1/4/2021 | (b) | 6,078 | | | | 2,831 | | | | 3/1/2021 | | 447 | | | 1/3/2022 | | 1,297 | | | | | 3,582 | | | | 1/3/2023 | | Karla C. Robertson6,171 | | | | | 1/2/2020 | | | | | | 1,302 | | | | | | | 1/4/2021 | | | | | 2,997 | | | | | | 1/3/2022 | | | | | | 3,314 | | | | Stephen J. Pilla | | | | | 9/30/2020(a) | | | | | | 13,540 | | | | | | 1/4/2021 | | | | | | 2,331 | | | | | | 1/3/2022 | | | | | | 2,686 | | | | Mario R. D’Ovidio(10) | | | | | — | | | | | | — | | |
(a)
RestrictedNew hire restricted stock unit award will vest in full on the thirdfourth anniversary of the grant date.
(b)Key talent restricted stock unit award will vest in full on the fourth anniversary of the grant date.
(3)
The amounts in this column were calculated by multiplying the closing market price of our ordinary shares on the last trading day of our most recently completed fiscal year of $44.98$72.71 by the number of unvested restricted stock units.
(4)
The number of performance share units shown in this column reflects the target performance level for the 2021-20232022-2024 and 2022-20242023-2025 performance share unit awards.
| | | | | | | | | Name | Name | | | Vesting Date | | | Number of Performance Share Units | | | John L. Stauch | 12/31/2024 | 43,599 | | | 12/31/2023 | | | | | | 49,936 | | | | 12/31/2025 | 69,565 | | 12/31/2024 | | | | | | 42,985 | | | | Robert P. Fishman | 12/31/2024 | 12,535 | | | 12/31/2023 | | | | | | 16,978 | | | | 12/31/2025 | 19,635 | | Tanya L. Hooper | 12/31/2024 | 8,977 | | | | | 12,359 | | | | 12/31/2025 | 7,574 | | Jerome O. Pedretti | 12/31/2024 | 7,266 | | | 12/31/2023 | | | | | | 8,490 | | | | 12/31/2025 | 15,708 | | Adrian C. Chiu | 12/31/2024 | 3,888 | | | | | 7,164 | | | | 12/31/2025 | Karla C. Robertson12,342 | | | | | 12/31/2023 | | | | | | 8,989 | | | | | | 12/31/2024 | | | | | | 6,627 | | | | Stephen J. Pilla | | | | | 12/31/2023 | | | | | | 6,991 | | | | | | 12/31/2024 | | | | | | 5,373 | | | | Mario R. D’Ovidio(10) | | | | | 12/31/2023 | | | | | | 9,987 | | | | | | 12/31/2024 | | | | | | 7,881 | | |
(5)
The amounts in this column were calculated by multiplying the closing market price of our ordinary shares on the last trading day of our most recently completed fiscal year of $44.98$72.71 by the number of unvested performance share units.
(6)
One-third of these options will vest on each of the first, second and third anniversaries of the grant date, January 2, 2020.
(7)
One-third of these options will vest on each of the first, second, and third anniversaries of the grant date, January 4, 2021.
(8)(7)
One-third of these options will vest on each of the first, second, and third anniversaries of the grant date, January 3, 2022. (8)One-third of these options will vest on each of the first, second, and third anniversaries of the grant date, January 3, 2023.
(9)
One-third of these options will vest on each of the first, second, and third anniversaries of the grant date, March 2, 2020.1, 2021. (10)
Pursuant to the terms of Mr. D’Ovidio’s award agreements, in connection with his involuntary termination without cause, his outstanding stock options will remain outstanding and vest on the earlier of the expiration date of the award or the fifth anniversary of the termination, his restricted stock unit awards vested in full upon his separation date, and his performance share units vested in full and will be calculated based on the Company’s actual performance.
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2023 Option Exercises and Stock Vested Table EXECUTIVE COMPENSATION TABLES
2022 OPTION EXERCISES AND STOCK VESTED TABLE
The following table shows a summary of the stock options exercised by the Named Executive Officers in 20222023 and the restricted stock or restricted stock units vested for the Named Executive Officers during 2022.2023. | | | | Option Awards | | | Stock Awards | | | Name | | | Number of shares acquired on exercise (#) | | | Value realized on exercise ($)(1) | | | Number of shares acquired on vesting (#) | | | Value realized on vesting ($)(2) | | | John L. Stauch | | | | | — | | | | | | — | | | | | | 115,960(3) | | | | | | 5,886,903 | | | | Robert P. Fishman | | | | | — | | | | | | — | | | | | | 2,781 | | | | | | 199,843 | | | | Jerome O. Pedretti | | | | | — | | | | | | — | | | | | | 8,798(3) | | | | | | 464,242 | | | | Karla C. Robertson | | | | | — | | | | | | — | | | | | | 18,944(3) | | | | | | 967,150 | | | | Stephen J. Pilla | | | | | — | | | | | | — | | | | | | 1,145 | | | | | | 82,280 | | | | Mario R. D’Ovidio | | | | | — | | | | | | — | | | | | | 28,866(4) | | | | | | 1,320,584 | | |
| | | | | | | | | | | | | | | | | | | Option Awards | Stock Awards | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($)(1) | Number of shares acquired on vesting (#) | Value realized on vesting ($)(2) | John L. Stauch | 32,596 | | 658,818 | | 110,924 | | (3) | 7,429,596 | | Robert P. Fishman | — | | — | | 74,810 | | (3) | 4,649,994 | | Tanya L. Hooper | — | | — | | — | | | — | | Jerome O. Pedretti | — | | — | | 19,186 | | (3) | 1,295,641 | | Adrian C. Chiu | 1,179 | | 16,199 | | 6,287 | | (3) | 421,776 | |
(1)
Reflects the amount calculated by multiplying the number of options exercised by the difference between the market price of our ordinary shares on the exercise date and the exercise price of options.
(2)
Reflects (i) for restricted stock units, the amount calculated by multiplying the number of shares vested by the market price of our ordinary shares on the vesting date and (ii) for performance share units, the amount calculated by multiplying the number of shares vested by the closing market price of our ordinary shares on December 30, 202229, 2023 when the units vested even though the shares were not issued until after the Compensation Committee certified the performance results.
(3)
The amount includes the performance share units earned for the 2020-20222021-2023 performance period that ended on December 31, 20222023 based on the level of achievement of the performance targets.
(4)
2023 Pension Benefits
Pursuant to the terms of Mr. D’Ovidio’s award agreements, 27,230 restricted stock units vested upon his separation date. The value shown is calculated by multiplying the units vested by the closing market price of our common stock on his separation date of $44.18. These shares will settle six months following his separation date.
2022 PENSION BENEFITS
Listed below are the number of years of credited service and present value of accumulated pension benefits as of December 31, 20222023 for Mr. Stauch, the only Named Executive Officer who participated in the Pentair, Inc. Supplemental Executive Retirement Plan and the Pentair, Inc. Restoration Plan, which are described in detail following the table below, during 2022.2023. The disclosed amounts are actuarial estimates only and do not necessarily reflect the actual amounts that will be paid to Mr. Stauch, which will only be known at the time that he becomes eligible for payment. The actual amount of pension benefits ultimately paid to a Named Executive Officer may vary based on a number of factors, including differences from the assumptions used to calculate the amounts.
| Name | | | Plan name | | | Number of years credited service (#) | | | Present value of accumulated benefit ($)(1) | | | Payments during last fiscal year ($) | | | John L. Stauch | | | Pentair, Inc. Supplemental Executive Retirement Plan | | | | | 16 | | | | | | 8,084,881 | | | | | | — | | |
| | | | | | | | | | | | | | | Name | Plan name | Number of years credited service (#) | Present value of accumulated benefit ($)(1) | Payments during last fiscal year ($) | John L. Stauch | Pentair, Inc. Supplemental Executive Retirement Plan | 17 | 9,149,098 | | — | |
(1)
The Supplemental Executive Retirement Plan benefits, which include amounts under the Restoration Plan, are payable following retirement at age 55 or later in the form of an annuity. The actuarial present value above was calculated using the following methods and assumptions:
▶n
Present values for the Supplemental Executive Retirement Plan are based on a 180-month certain-only annuity.
▶n
The present value of Supplemental Executive Retirement Plan benefits as of December 31, 20222023 was calculated assuming a 5.12%4.81% interest rate.
The Pentair, Inc. Retirement Savings and Stock Incentive Plan, the Pentair, Inc. Supplemental Executive Retirement Plan and the Pentair, Inc. Restoration Plan were all amended in 2008 to comply with final regulations under Section 409A of the Code. As a result of these amendments, benefits vested prior to January 1, 2005 are separated from benefits earned after January 1, 2005, and may offer different distribution or other options to participants from those described below.
EXECUTIVE COMPENSATION TABLES
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| | | The Pentair, Inc. Supplemental Executive Retirement and Restoration Plan | |
The Pentair, Inc. Supplemental Executive Retirement Plan (“SERP”) and the Pentair, Inc. Restoration Plan (“Restoration Plan”) are unfunded, nonqualified defined benefit pension plans. Employees eligible for participation in the SERP include all executive officers and other key executives selected for participation by the Compensation Committee. Participation in the Restoration Plan is limited to eligible employees under the SERP who were eligible employees on or before December 31, 2007. Benefits under these two plans vest upon the completion of five years of benefit service (all service following initial participation). These plans are combined for all administrative, accounting and other purposes. Of the Named Executive Officers, only Mr. Stauch participated in the SERP and the Restoration Plan. Mr. Stauch was fully vested in these plans during 2022.2023. Benefits under the SERP are based upon an employee’s years of service following initial participation and the highest average earnings for a five calendar- yearcalendar-year period (ending with retirement). Compensation covered by the SERP and the Restoration Plan for Mr. Stauch equals the amount set forth in the “Salary” column in the Summary Compensation Table and incentive compensation paid under the MIP set forth in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table. Benefits under the SERP are calculated as: ▶u
final average compensation as defined above; multiplied by
▶u
benefit service percentage, which equals 15% multiplied by years of benefit service.
The Restoration Plan is designed to provide retirement benefits based on compensation earned by participants in excess of the annual limitation imposed by the Code, which was $305,000$330,000 in 2022.2023. Benefits under the Restoration Plan are calculated as: ▶u
final average compensation as defined above, less compensation below the annual limitation amount in each year; multiplied by
▶u
earned benefit service percentage (which is weighted based on age at the time of service), in accordance with the following table:
| | | | | | Service Age | | | Percentage | | | Under 25 | 4.0 | | | | 4.0% | | | | 25-34 | 5.5 | | | | 5.5% | | | | 35-44 | 7.0 | | | | 7.0% | | | | 45-54 | 9.0 | | | | 9.0% | | | | 55 or over | 12.0 | | | | 12.0% | | |
The benefit percentages calculated above are added, and the resulting percentage is multiplied by the covered compensation amount. Benefits vested as of December 31, 2004 are payable after retirement in the form of a 15-year certain annuity or, at the participant’s option, a 100% joint and survivor annuity. Benefits earned after December 31, 2004 are payable after retirement in the form of a 15-year certain annuity. No additional benefits may be earned under the Restoration Plan after December 31, 2017. The present value of the combined accumulated benefits for Mr. Stauch under both the SERP and the Restoration Plan is set forth in the 20222023 Pension Benefits table.
| | |
The Pentair, Inc. Retirement Savings and Stock Incentive Plan | |
The Pentair, Inc. Retirement Savings and Stock Incentive Plan (“RSIP”) is a tax-qualified 401(k) retirement savings plan. Participating employees may contribute up to 50% of base salary and incentive compensation on a before-tax basis and 15% of compensation on an after-tax basis, into their RSIP accounts. We match an amount equal to one dollar for each dollar | | | | | | | | | 58 | | Pentair | 2024 Proxy Statement |
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contributed to the RSIP by participating employees on the first 5% of their regular earnings on a before-tax basis to incentivize employees to make contributions to our retirement plan. The RSIP limits the amount of cash compensation considered for contribution purposes to the maximum imposed by the Code, which was $20,500$22,500 in 2022.2023. Participants in the RSIP are allowed to invest their account balances in a number of possible mutual fund investments. Our ordinary shares are also a permitted investment choice under the RSIP. Fidelity Investments Institutional Services Co. provides these investment vehicles for participants and handles all
EXECUTIVE COMPENSATION TABLES
allocation and accounting services for the RSIP. We do not guarantee or subsidize any investment earnings under the RSIP.
Amounts contributed, if any, under the RSIP by the Named Executive Officers are included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table. Amounts contributed by us to the RSIP for the Named Executive Officers are included in the “All Other Compensation” column in the Summary Compensation Table. 2023 Nonqualified Deferred Compensation Table
2022 NONQUALIFIED DEFERRED COMPENSATION TABLE
The following table sets forth the contributions, earnings, distributions and 20222023 year-end balances for each of the Named Executive Officers under our Sidekick Plan described under “Compensation Discussion and Analysis —– Retirement and Other Benefits —– Deferred Compensation.” Contributions we make to the Sidekick Plan are intended to make up for contributions to our RSIP (including our matching contributions) for cash compensation above the maximum imposed by the Code, which was $22,500 in 2022.2023. Because the Code does not permit contributions on amounts in excess of that limit under a tax-qualified plan, the Sidekick Plan is designed to permit matching contributions on compensation in excess of the maximum imposed by the Code. We make these matching contributions to the Sidekick Plan on amounts in excess of the maximum imposed by the Code, but below the $700,000 compensation limit contained in our Sidekick Plan (such contributions by a Named Executive Officer, “Covered Sidekick Compensation”).
| Name | | | Executive Contributions in 2022 ($) | | | Registrant Contributions in 2022 ($) | | | Aggregate Earnings/(Loss) in 2022 ($) | | | Aggregate Withdrawals/ Distributions in 2022 ($) | | | Aggregate Balance at December 31, 2022 ($)(1) | | | John L. Stauch | | | | | 5,536,189 | | | | | | 20,500 | | | | | | (4,057,600) | | | | | | — | | | | | | 11,401,182 | | | | Robert P. Fishman | | | | | 171,048 | | | | | | 21,319 | | | | | | (119,440) | | | | | | (31,343) | | | | | | 365,907 | | | | Jerome O. Pedretti | | | | | 805,753 | | | | | | 20,500 | | | | | | (326,455) | | | | | | — | | | | | | 1,497,174 | | | | Karla C. Robertson | | | | | 131,601 | | | | | | 20,500 | | | | | | (70,672) | | | | | | — | | | | | | 376,323 | | | | Stephen J. Pilla | | | | | 275,608 | | | | | | 16,508 | | | | | | (50,751) | | | | | | — | | | | | | 346,215 | | | | Mario R. D’Ovidio | | | | | — | | | | | | 5,000 | | | | | | (2,218) | | | | | | — | | | | | | 10,482 | | |
| | | | | | | | | | | | | | | | | | Name | Executive Contributions in 2023 ($) | Registrant Contributions in 2023 ($) | Aggregate Earnings/(Loss) in 2023 ($) | Aggregate Withdrawals/ Distributions in 2023 ($) | Aggregate Balance at December 31, 2023 ($)(1) | John L. Stauch | 5,382,207 | | 19,750 | | 8,837,636 | | — | | 25,640,774 | | Robert P. Fishman | 176,048 | | 20,494 | | 167,237 | | (21,024) | | 708,663 | | Tanya L. Hooper | 5,031 | | — | | 888 | | — | | 5,919 | | Jerome O. Pedretti | 451,984 | | 19,750 | | 408,778 | | — | | 2,377,685 | | Adrian C. Chiu | 76,712 | | 19,750 | | 129,998 | | — | | 599,315 | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
Amounts deferred under the Sidekick Plan that have also been reported in the Summary Compensation Table for fiscal 20222023 or prior years for each Named Executive Officer are: Mr. Stauch — $12,642,620;$18,044,577; Mr. Fishman — $436,231;$664,116; Ms. Hooper — $5,031; Mr. Pedretti — $1,328,530; Ms. Robertson — $370,556; Mr. Pilla $292,116;$2,186,794; and Mr. D’Ovidio — $12,000.Chiu $96,462.
The amounts set forth in the column “Executive Contributions in 2022”2023” reflect the amount of cash compensation each Named Executive Officer deferred in 20222023 under the Sidekick Plan. The amounts set forth in the column “Registrant Contributions in 2022”2023” are the totals of contributions we made in 20222023 under the Sidekick Plan for the account of each Named Executive Officer. These amounts, in addition to contributions we made under the RSIP, are included in the Summary Compensation Table above in the column labeled “All Other Compensation.” The contributions we made are derived from matching contributions equal to one dollar for each dollar contributed up to 5% of Covered Sidekick Compensation deferred in 20212022 by each Named Executive Officer; we normally make these contributions one year in arrears. The amounts set forth in the column “Aggregate Earnings/(Loss) in 2022”2023” reflect the amount of investment earnings realized by each Named Executive Officer on the investments chosen that are offered to participants in our RSIP and Sidekick Plan. Fidelity Investments Institutional Services Co. provides these investment vehicles for participants and handles all allocation and accounting services for these plans. We do not guarantee or subsidize any investment earnings in either plan. Amounts deferred under the Sidekick Plan are generally distributed on or after the earliest of the participant’s separation from service, the participant’s disability, a change in control, or a specified date elected by the participant. | | | | | | | | | 2024 Proxy Statement | Pentair |
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56 2023 Proxy Statement
Potential Payments Upon Termination or Change in ControlEXECUTIVE COMPENSATION TABLES
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| | |
Executive Officer Severance Plan | |
In December 2020, the Compensation Committee recommended, and the independent members of the Board approved, the Pentair plc Executive Officer Severance Plan (“Executive Severance Plan”), which became effective January 1, 2021. Under the Executive Severance Plan, our executives, including our Named Executive Officers, are eligible to receive severance benefits in the event of a qualifying termination of employment to the extent the terms and conditions of the Executive Severance Plan are satisfied. A qualifying termination occurs in the event of an executive’s involuntary termination without cause or resignation for good reason. The severance benefits under the Executive Severance Plan provide for a cash payment equal to the product of the severance multiplier and the sum of the Named Executive Officer’s base salary and annual bonus target. The severance multiplier is two for the chief executive officer and any other executive officer who was an executive officer as of January 1, 2021, and one and one half for anyone who becomes an executive officer thereafter, and the cash payments are made in equal installments over the corresponding period. If enrolled in the group medical and/or dental insurance coverage, the participant will receive an additional cash payment equal to the amount determined by multiplying the severance multiplier by the amount equal to the employer’s portion of the health and/or dental insurance premiums for one year. The participant is also eligible for outplacement services. As a condition for the severance benefits, the participant must sign an agreement under which they agree to sign a separation and release agreement and restrictive covenants agreement. The Compensation Committee and the independent members of the Board adopted the Executive Severance Plan to aid in the attraction and retention of executive talent. The Company retains the right to adjust the severance benefits available under the plan. Under the Executive Severance Plan, “cause” means the officer’s: ▶u
breach of any written agreement with the Company, including restrictive covenants which are not remedied;
▶u
acts of dishonesty, fraud or breach of fiduciary duty;
▶u
failure to satisfactorily perform duties of employment;
▶u
violation of any anti-harassment, anti-discrimination or anti-retaliation policy of the Company; or umisconduct.
▶
misconduct.
Under the Executive Severance Plan, provided the officer provides us with 90 days’ written notice, “good reason” means: ▶u
a breach of the Executive Severance Plan or employment agreement by us;
▶u
the officer’s removal from, or any failure to reelect or reappoint him or her to any title or position as a corporate officer;
▶u
a material diminution of the officer’s authority or responsibilities;
▶u
a material reduction in an officer’s base salary (unless as part of a uniformly applied reduction for all executive officers); or
▶u
relocation of an officer’s principal place of employment to a location more than 50 miles from his or her principal place of employment (other than a relocation to the Company’s management office in the U.S.).
Under the Executive Severance Plan, a “change in control” has the same meaning as defined in the KEESA.
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| | | Change in Control Agreements | |
We have entered into agreements with certain key corporate executives, including all Named Executive Officers, that provide for contingent benefits upon a change in control. These change in control agreements are intended to provide for continuity of management upon a completed or threatened change in control. The agreements provide that covered executive officers could be entitled to certain severance or other benefits following a change in control. If, following such a change in control, the executive officer is involuntarily terminated,
EXECUTIVE COMPENSATION TABLES
other than for disability or for cause, or if such executive officer terminates his or her employment for conditions that constitute good reason, then the executive officer is entitled to certain severance payments. As previously disclosed, we have adopted a policy of not including automatic single trigger change in control vesting and excise tax gross-ups in new KEESAs. Under these agreements, “cause” means: ▶u
engaging in intentional conduct that causes us demonstrable and serious financial injury;
▶u
conviction of a felony; or
▶u
continuing willful and unreasonable refusal by an officer to perform his or her duties or responsibilities.
Under these agreements, “good reason” means: ▶u
a breach of the agreement by us;
▶u
any reduction in an officer’s base salary, percentage of base salary available as cash incentive compensation or bonus opportunity, grant date fair value of equity-based awards or other benefits;
▶u
an officer’s removal from, or any failure to reelect or reappoint him or her to serve in, any of the positions held with us on the date of the change in control or any other positions to which he or she is thereafter elected, appointed or assigned, except in the event that such removal or failure to reelect or reappoint relates to our termination of an officer’s employment for cause or by reason of disability;
▶u
a good faith determination by an officer that there has been a material adverse change in his or her working conditions or status relative to the most favorable working conditions or status in effect during the 180-day period prior to the change in control, or, to the extent more favorable to him or her, those in effect at any time while employed after the change in control, including a significant change in the nature or scope of his or her authority, powers, functions, duties or responsibilities or a significant reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements, but in each case excluding for this purpose an isolated, insubstantial and inadvertent event not occurring in bad faith that we remedy within 10 days after receipt of written notice;
▶u
relocation of an officer’s principal place of employment to a location more than 50 miles from his or her principal place of employment on the date 180 days prior to the change in control;
▶u
imposition of a requirement that an officer travel on business 20% in excess of the average number of days per month he or she was required to travel during the 180-day period prior to the change in control; or
▶u
our failure to cause a successor to assume an officer’s agreement.
Under these agreements, a “change in control” is deemed to have occurred if: ▶u
any person is or becomes the beneficial owner of securities representing 30% or more of our outstanding ordinary shares or combined voting power;
▶u
a majority of the Board changes in a manner that has not been approved by at least two-thirds of the incumbent directors or successor directors nominated by at least two-thirds of the incumbent directors;
▶u
we consummate a merger, consolidation or share exchange with any other entity (or the issuance of voting securities in connection with a merger, consolidation or share exchange) which our shareholders have approved and in which our shareholders control less than 50% of combined voting power after the merger, consolidation or share exchange; or
▶u
we consummate a plan of complete liquidation or dissolution or an agreement for the sale or disposition of all or substantially all of our assets which our shareholders have approved. | | | | | | | | | 2024 Proxy Statement | Pentair |
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The benefits under the change inof control agreements include benefits that could be triggered by a change in control and a covered termination in connection with such a change in control include: ▶
upon termination ofif the executive is terminated by usreasons other than for death, disability, or cause, or by the executive for good reason, after a change in control;
control. These benefits include:
▶u
severance payable upon termination in an amount equal to 250% (for Mr. Stauch) or 200% (for all other Named Executive Officers) of annual base salary plus the greatest of the executive’s target bonus for the year of termination, the actual bonus paid during the year prior to the change in control, or the actual bonus paid with respect to the year prior to the change in control;
▶u
cash payment to use towards medical, dental and life insurance policies for up to two years;
▶u
the cost of an executive search agency not to exceed 10% of the executive’s annual base salary;
EXECUTIVE COMPENSATION TABLES
▶
the accelerated accrual and vesting of benefits under the SERP (for Mr. Stauch, who has been made a participant in that plan) and under any other nonqualified defined contribution retirement plans; and for those executives who participate in the SERP and have fewer than seven years of participation in the SERP, up to three additional years of service can be credited, up to a maximum of seven years of service;
▶u
up to $15,000 in fees and expenses of consultants and legal or accounting advisors; and
▶u
all equity-based and cash incentive awards granted prior to the change in control will be subject to the terms of the incentive plan under which they were granted (including accelerated vesting, if provided for in the applicable incentive plan), and all equity-based and cash incentive awards granted on or after the change in control will vest or be earned in full upon such termination.
In the case of each Named Executive Officer, the agreement also requires the executive to devote his or her best efforts to us or our successor during thea three-year or two-year period, to maintain the confidentiality of our information during and following employment and to refrain from competitive activities for a period of one year following termination of employment with us or our successor. Executive Severance Plan. Under the Executive Severance Plan, all executive officers that are not party to a KEESA are entitled to receive certain severance payments if, following a change in control, the executive officer is involuntarily terminated, other than for death, disability or for cause, or if such executive officer terminates his or her employment for conditions that constitute good reason. In December 2020,2023, the Compensation Committee approved an amendment to our outstanding KEESAs clarifyingand form of KEESA to clarify that executivesbenefits qualifying as incentive-based compensation are subject to our clawback policy. The form of KEESA was also amended in response to certain state law changes affecting non-compete agreements to instead provide that certain severance payments are contingent upon the executive not eligible for both benefits under the KEESA and the Executive Severance Plan in the event that there is a change of control and termination that occurs in a specified time period. competing with us.
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Change in Control and Termination Provisions of Incentive Plans | | |
Change in Control Provisions The 2020 Plan and the most recent predecessor plan provide that, upon a change in control, unless an agreement between us and the executive provides for a more favorable result to the executive: ▶u
all outstanding options, restricted stock and restricted stock units that are not performance awards are immediately vested;
▶u
all outstanding performance awards (other than annual incentive awards) are paid in full based on performance at the better of target or trend; and
▶u
all outstanding annual incentive awards are paid based on full satisfaction of the performance goals. Termination Provisions
Termination Provisionsu
▶
RetirementRetirement.. If any of the Named Executive Officers terminates employment in a retirement with at least 10 years of service:
•n
If the retirement is prior to age 60: unvested options are forfeited; restricted stock and restricted stock units (that are not performance awards or for which any performance goals have been satisfied) vest pro rata; and performance
awards are paid on a pro rata basis based on actual performance; or | | | | | | | | | 62 | | Pentair | 2024 Proxy Statement |
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•n
If the retirement is after age 60: options continue to vest for 5five years; restricted stock and restricted stock units (that are not performance awards or for which any performance goals have been satisfied) vest in full; and performance awards are paid in full based on actual performance (or on a pro-rated basis for performance awards granted to persons hired or promoted to executive officer after January 1, 2021), in each case as described in more detail below for treatment of awards in the event of a Covered Termination.
▶u
Death or DisabilityDisability.. If any of the Named Executive Officers terminates employment as a result of death or disability, options, restricted stock and restricted stock units are immediately vested; and performance awards are paid in full based on actual performance.
▶u
Termination Without Cause or for Good ReasonReason.. If any of the Named Executive Officers terminates employment in an involuntary termination for a reason other than cause, death or disability (a “Covered Termination”), or in a voluntary termination for good reason, then the employee’s outstanding awards will
EXECUTIVE COMPENSATION TABLES
be eligible for continued or accelerated vesting, as described below. For a Named Executive Officer’s termination to be considered a Covered Termination, the officer must execute a general release in a form and manner determined by us. Upon a Covered Termination, awards held by a Board-appointed corporate officer, including such a Named Executive Officer, will be treated as follows: •n
Stock options will remain outstanding, and will continue to vest in accordance with their terms as if the officer had remained in employment, until the earlier of the expiration date of the stock option andor the fifth anniversary of the Covered Termination.
•n
Restricted stock and restricted stock units (that are not performance awards or for which any performance goals have been satisfied) will vest in full.
•n
Performance awards, including restricted stock and restricted stock units that have performance- basedperformance-based vesting, will be paid following the end of the performance period based on achievement of the performance goals established for the awards as if the employee had not experienced a Covered Termination. In December 2020, we revised the treatment of performance awards for awards to persons who are hired as or promoted to an executive officer on or after January 1, 2021 to provide that the award will continue to vest based on actual achievement; however, the payout will be prorated for the portion of the performance period when the executive officer was employed.
Under the 2020 Plan, the term “cause” means an act or omission by the officer as is determined by the Planplan administrator to constitute cause for termination, including but not limited to any of the following: ▶u
a material violation of any company policy;
▶u
embezzlement from, or theft of property belonging to, us or any of our affiliates;
▶u
conviction of, or plead no contest to, a felony or other crime involving moral turpitude;
▶u
willful failure to perform, or gross negligence in the performance of, or failure to perform, assigned duties; or
▶u
other intentional misconduct, whether related to employment or otherwise, which has, or has the potential to have, a material adverse effect on our business.
Under the 2020 Plan, the term “good reason” means: ▶u
any material breach by us of the terms of any employment agreement;
▶u
any reduction in base salary or percentage of base salary available as incentive compensation or bonus opportunity;
▶u
a good faith determination by the officer that there has been a material adverse change in the officer’s working conditions or status;
▶u
a relocation of the principal place of employment to a location more than 50 miles; or
▶u
an increase of 20% or more in travel requirements.
For an event to constitute good reason, we must receive written notice and an opportunity to cure. The definitions under our predecessor equity plan are substantially similar to those above. Benefits pursuant to these incentive plans are generally applicable to all other participants who meet the requisite criteria as well as to the Named Executive Officers.
| | | | | | | | | 2024 Proxy Statement | Pentair | Quantification of
| 63 |
| | | | | | | Executive Compensation PayableTables |
| | | Estimated Payments and Benefits upon a Change in Control or Termination of Employment | | |
As required by the SEC rules, the amounts shown below assume that the applicable termination or other event was effective as of December 31, 2022,2023, and thus are estimates of the amounts that would actually be received. The actual amounts to be received can only be determined in connection with the actual termination or other event. Retirement The table below shows the amount of compensation payable to our Named Executive Officers upon a retirement. Mr. Stauch is the only Named Executive Officer who is eligible for a qualifying retirement (for him, having 10 years of service prior to age 60) as of December 31, 2022. 2023.
EXECUTIVE COMPENSATION TABLES
| Executive | | | Stock Option Vesting(1)($) | | | Restricted Stock Unit Vesting(1)($) | | | Performance Share Unit Vesting(1)(2)($) | | | Total($) | | | John L. Stauch | | | | | — | | | | | | 1,568,498 | | | | | | 4,421,264 | | | | | | 5,989,762 | | |
| | | | | | | | | | | | | | | Executive | Stock Option Vesting ($)(1) | Restricted Stock Unit Vesting ($)(1) | Performance Share Unit Vesting ($)(1)(2) | Total ($) | John L. Stauch | — | | 3,026,626 | | 7,478,805 | | 10,505,431 | |
(1)
None of the stock options, restricted stock units, or performance share units would vest upon a retirement prior to 10 years of service, and none of the stock options and only a pro rata portion of the restricted stock units and performance share units would vest upon a retirement with 10 years of service prior to age 60. The amounts listed above assume our ordinary shares were valued at $44.98,$72.71, the closing market price for our ordinary shares on the last trading day of 2022.2023.
(2)
The amount shown assumes target performance. The actual amount is determined on the basis of actual performance through the end of the applicable performance period.
Termination without Cause or for Good Reason — Absence ofAbsent a Change in Control The table below shows the amount of compensation payable to each Named Executive Officer upon a termination of employment by us other than for cause or termination by the executive for good reason in the absence of a change in control.
| Executive | | | Cash Payment (1)($) | | | Stock Option Vesting (2)($) | | | Restricted Stock Unit Vesting (2)($) | | | Performance Share Unit Vesting (2)($) | | | Outplacement (1)($) | | | Medical, Dental (1)($) | | | Total ($) | | | John L. Stauch | | | | | 4,635,000 | | | | | | — | | | | | | 2,078,976 | | | | | | 4,179,587 | | | | | | 15,000 | | | | | | 43,019 | | | | | | 10,951,582 | | | | Robert P. Fishman | | | | | 2,740,000 | | | | | | — | | | | | | 2,328,165 | | | | | | 1,319,623 | | | | | | 15,000 | | | | | | 43,019 | | | | | | 6,445,807 | | | | Jerome O. Pedretti | | | | | 2,124,000 | | | | | | 15,690 | | | | | | 366,092 | | | | | | 704,117 | | | | | | 15,000 | | | | | | 41,675 | | | | | | 3,266,574 | | | | Karla C. Robertson | | | | | 2,117,500 | | | | | | — | | | | | | 342,433 | | | | | | 702,408 | | | | | | 15,000 | | | | | | — | | | | | | 3,177,341 | | | | Stephen J. Pilla | | | | | 1,650,000 | | | | | | — | | | | | | 834,784 | | | | | | 556,133 | | | | | | 15,000 | | | | | | 43,019 | | | | | | 3,098,936 | | | | Mario R. D’Ovidio | | | | | 381,000(3) | | | | | | —(4) | | | | | | 1,229,355(4) | | | | | | 806,689(4) | | | | | | 15,000(3) | | | | | | 41,675(3) | | | | | | 2,473,719 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Executive | Cash Payment ($)(1) | Stock Option Vesting ($)(2) | Restricted Stock Unit Vesting ($)(2) | Performance Share Unit Vesting ($)(2) | Outplacement ($)(1) | Medical, Dental ($)(1) | Total ($) | John L. Stauch | 4,945,000 | | | 3,981,009 | | | 4,199,875 | | | 8,228,227 | | | 15,000 | | | 31,807 | | | 21,400,918 | | Robert P. Fishman | 2,820,000 | | | 1,165,033 | | | 1,226,618 | | | 2,339,153 | | | 15,000 | | | 45,371 | | | 7,611,175 | | Tanya L. Hooper | 1,299,375 | | | 346,626 | | | 1,662,223 | | | 1,203,423 | | | 15,000 | | | 32,912 | | | 4,559,559 | | Jerome O. Pedretti | 2,304,000 | | | 854,165 | | | 851,725 | | | 1,670,585 | | | 15,000 | | | 43,883 | | | 5,739,358 | | Adrian C. Chiu | 1,417,500 | | | 598,425 | | | 1,017,504 | | | 1,180,156 | | | 15,000 | | 32,912 | | | 4,261,497 | |
(1)
Triggered only upon a qualifying termination of the executive officer by us without cause or by the executive for good reason under the Executive Severance Plan.
(2)
Triggered solely upon an involuntary termination, without cause, under the 2020 Plan. The amounts listed above assume our ordinary shares were valued at $44.98,$72.71, the closing market price for our ordinary shares on the last trading day of 2022.2023. (3)
| | | | | | | | | 64 | | Pentair | 2024 Proxy Statement |
Amounts for Mr. D’Ovidio reflect payments made under the Pentair Executive Severance Plan in connection with his involuntary termination without cause on September 1, 2022. | | | | | | | Executive Compensation Tables |
(4)
Pursuant to the terms of Mr. D’Ovidio’s award agreements, in connection to his involuntary termination without cause.
Termination without Cause or for Good Reason — In Connection with a Change in Control The table below shows the amount of compensation payable to each Named Executive Officer upon (1) a change in control without a termination of employment, or (2) a change in control followed by a termination of employment (a) by us, other than for death, disability, or cause, or (b) by the executive for good reason. The actual amounts to be paid out can only be determined in connection with a change in control or termination following a change in control. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash Termination Payment ($)(1) | Stock Option Vesting ($)(2) | Restricted Stock Unit Vesting ($)(2) | Performance Share Unit Vesting ($)(2) | SERP & Related Pension ($)(1) | Incentive Compensation ($)(2) | Outplacement ($)(1) | Legal & Accounting Advisors ($)(1) | Medical, Dental, Life Insurance ($)(1) | Total: Change in Control Only ($)(3) | Total: Change in Control Followed by Termination ($)(3) | John L. Stauch | 6,181,250 | | 3,981,009 | | 4,199,875 | | 8,228,227 | | — | | 1,397,500 | | 50,000 | | 15,000 | | 35,359 | | 17,806,611 | | 24,088,220 | | Robert P. Fishman | 2,820,000 | | 1,165,033 | | 1,226,618 | | 2,339,153 | | — | | 705,000 | | 50,000 | | 15,000 | | 48,923 | | 5,435,804 | | 8,369,727 | | Tanya L. Hooper | 1,732,500 | | 346,626 | | 1,662,223 | | 1,203,423 | | — | | 341,250 | | 50,000 | | 15,000 | | 46,682 | | 3,553,523 | | 5,397,705 | | Jerome O. Pedretti | 2,304,000 | | 854,165 | | 851,725 | | 1,670,585 | | — | | 512,000 | | 50,000 | | 15,000 | | 47,293 | | 3,888,475 | | 6,304,768 | | Adrian C. Chiu | 1,890,000 | | 598,425 | | 1,017,504 | | 1,180,156 | | — | | 420,000 | | 50,000 | | 15,000 | | 46,682 | | 3,216,085 | | 5,217,767 | |
| | | | Cash Termination Payment (1)($) | | | Stock Option Vesting (2)($) | | | Restricted Stock Unit Vesting (2)($) | | | Performance Share Unit Vesting (2)($) | | | SERP & Related Pension (1)($) | | | Incentive Compensation (2)($) | | | Outplacement (1)($) | | | Legal & Accounting Advisors (1)($) | | | Medical, Dental, Life Insurance (1)($) | | | Total: Change in Control Only (3)($) | | | Total: Change in Control Followed by Termination (3)($) | | | John L. Stauch | | | | | 8,545,000 | | | | | | — | | | | | | 2,078,976 | | | | | | 4,179,587 | | | | | | — | | | | | | 1,287,500 | | | | | | 50,000 | | | | | | 15,000 | | | | | | 48,551 | | | | | | 7,546,062 | | | | | | 16,204,613 | | | | Robert P. Fishman | | | | | 4,030,000 | | | | | | — | | | | | | 2,328,165 | | | | | | 1,319,623 | | | | | | — | | | | | | 685,000 | | | | | | 50,000 | | | | | | 15,000 | | | | | | 48,551 | | | | | | 4,332,788 | | | | | | 8,476,339 | | | | Jerome O. Pedretti | | | | | 2,821,600 | | | | | | 15,690 | | | | | | 366,092 | | | | | | 704,117 | | | | | | — | | | | | | 472,000 | | | | | | 50,000 | | | | | | 15,000 | | | | | | 46,799 | | | | | | 1,557,899 | | | | | | 4,491,298 | | | | Karla C. Robertson | | | | | 2,965,000 | | | | | | — | | | | | | 342,433 | | | | | | 702,408 | | | | | | — | | | | | | 453,750 | | | | | | 50,000 | | | | | | 15,000 | | | | | | 5,205 | | | | | | 1,498,590 | | | | | | 4,533,796 | | | | Stephen J. Pilla | | | | | 2,261,000 | | | | | | — | | | | | | 834,784 | | | | | | 556,133 | | | | | | — | | | | | | 325,000 | | | | | | 50,000 | | | | | | 15,000 | | | | | | 47,663 | | | | | | 1,715,917 | | | | | | 4,089,580 | | |
EXECUTIVE COMPENSATION TABLES
(1)
Triggered only upon a change in control and a termination of the executive officer by us other than for death, disability, or cause, or by the executive for good reason.
(2)
Triggered solely upon a change in control under the 2020 Plan. The amount shown for performance share units assumes target performance and includes the balance of any dividend equivalent units (rounded up to the nearest whole share).
(3)
If excise taxes would otherwise be imposed in connection with a change in control, the executive’s change in control compensation protections will be either cut back to a level below the level that would trigger the imposition of the excise taxes or paid in full and subjected to the excise taxes, whichever results in the better after-tax result to the executive.
The amounts in the table above for termination without cause or for good reason in connection with a change in control assume, to the extent applicable, that: ▶u
our ordinary shares were valued at $44.98,$72.71, the closing market price for our ordinary shares on the last trading day of 2022;2023;
▶u
outplacement services fees are $50,000 or 10% of annual base salary, whichever is less;
▶u
legal and accounting advisor fees are the maximum possible under the change in control agreements for each executive officer; and
▶u
medical, dental, and life insurance coverage will continue until two years after a change in control, in each case at the current cost per year for each executive.
The Named Executive Officers’ agreements provide that, if excise taxes would otherwise be imposed in connection with a change in control, the executive’s change in control compensation protections will be either cut back to a level below the level that would trigger the imposition of the excise taxes or paid in full and subjected to the excise taxes, whichever results in the better after-tax resultoutcome to the executive. Solely for purposes of the calculations in the tables above, we have assumed that the cut back did not apply. | | | | | | | | | 2024 Proxy Statement | Pentair |
| 65 |
As required by Item 402(u) of Regulation S-K, we are providing the following information about the ratio of the median annual total compensation of our employees and the annual total compensation of our Chief Executive Officer. For the year ended December 31, 2022:2023: ▶u
the median of the annual total compensation of all employees of our company (other than our Chief Executive Officer) was reasonably estimated to be $56,079;$57,729; and
▶u
the annual total compensation of our Chief Executive Officer was $7,783,265.$10,008,469.
Based on this information, the ratio of the annual total compensation of our Chief Executive Officer to the median of the annual total compensation of all other employees is estimated to be 139173 to 1. To identify our median employee, we began by considering each of the 11,60410,762 individuals employed by us worldwide on October 1, 2022.2023. We then calculated the target cash compensation (which we define as base salary or wages plus target cash bonus) for such individuals for 20222023 to identify our median employee. To calculate the target cash compensation for any employee that we paid in currency other than U.S. Dollars, we applied the applicable foreign currency exchange rate in effect on October 1, 20222023 to convert such non-U.S. employee’s target cash compensation into U.S. Dollars. Once we identified our median employee, we added together all of the elements of such employee’s compensation for 20222023 in the same way that we calculate the annual total compensation of our Named Executive Officers in the Summary Compensation Table. | | | | | | | | | 66 | | Pentair | 2024 Proxy Statement |
| | | Pay Versus Performance Table | |
EXECUTIVE COMPENSATION TABLES
PAY VERSUS PERFORMANCE
Pay Versus Performance Table
As required by item 402(v) of Regulation S-K, we are providing the following information: | (a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | | | Year | | | Summary Compensation Table Total Compensation for CEO ($)(1) | | | Compensation Actually Paid to CEO ($)(3)(5) | | | Average Summary Compensation Table Total Compensation for Other NEOs ($)(1)(2) | | | Average Compensation Actually Paid to Other NEOs ($)(2)(4)(5) | | | Value of Initial Fixed $100 Investment based on: | | | Net Income ($) | | | Company-Wide Segment Income ($)(8) | | | Total Shareholder Return ($)(6) | | | Peer Group Total Shareholder Return ($)(6)(7) | | | 2022 | | | | | 7,783,265 | | | | | | (1,944,891) | | | | | | 2,053,323 | | | | | | 206,764 | | | | | | 103 | | | | | | 127 | | | | | | 480,900,000 | | | | | | 767,700,000 | | | | 2021 | | | | | 9,429,546 | | | | | | 22,765,163 | | | | | | 2,756,991 | | | | | | 5,517,160 | | | | | | 164 | | | | | | 158 | | | | | | 553,000,000 | | | | | | 685,900,000 | | | | 2020 | | | | | 9,342,044 | | | | | | 8,880,349 | | | | | | 2,293,390 | | | | | | 1,901,314 | | | | | | 118 | | | | | | 123 | | | | | | 358,600,000 | | | | | | 517,600,000 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | Year | Summary Compensation Table Total Compensation for CEO ($)(1)(2) | Compensation Actually Paid to CEO ($)(3) | Average Summary Compensation Table Total Compensation for Other NEOs ($)(1)(2) | Average Compensation Actually Paid to Other NEOs ($)(2)(3) | Value of Initial Fixed $100 Investment based on: | Net Income ($) | Company-Wide Segment Income ($)(6) | Total Shareholder Return ($)(4) | Peer Group Total Shareholder Return ($)(5) | 2023 | 10,008,469 | | 17,893,209 | | 2,722,854 | | 4,497,393 | | 143 | | 134 | | 622,700,000 | | 855,100,000 | | 2022 | 7,783,265 | | (1,944,891) | | 2,053,323 | | 206,764 | | 103 | | 127 | | 480,900,000 | | 767,700,000 | | 2021 | 9,429,546 | | 22,765,163 | | 2,756,991 | | 5,517,160 | | 164 | | 158 | | 553,000,000 | | 685,900,000 | | 2020 | 9,342,044 | | 8,880,349 | | 2,293,390 | | 1,901,314 | | 118 | | 123 | | 358,600,000 | | 517,600,000 | |
(1)
The amounts shown in columns (b) and (d) reflect “Total Compensation” from the Summary Compensation Table (SCT)(“SCT”) for each year shown. See the SCT and the notes thereto for the compensation elements included in Total Compensation for each year.
(2)
For 2023, the CEO was John Stauch and the Other NEOs were Robert Fishman, Executive Vice President, Chief Financial Officer and Chief Accounting Officer, Tanya Hooper, Executive Vice President and Chief Human Resources Officer, Jerome Pedretti, Executive Vice President & CEO, Pool, and Adrian Chiu, Executive Vice President and President, Water Solutions. For 2022, the CEO was John Stauch and the Other NEOs were Robert Fishman, EVP,Executive Vice President, Chief Financial Officer and Chief Accounting Officer, Karla Robertson, EVP,Executive Vice President, General Counsel, Secretary and Chief Social Responsibility Officer, Jerome Pedretti, EVPpreviously Executive Vice President & President, IFT, Steve Pilla, EVP,Executive Vice President, Chief Supply Chain Officer and Chief Transformation Officer, and Mario D’Ovidio, former EVPExecutive Vice President & President, Consumer Solutions.
For 2021, the CEO was John Stauch and the Other NEOs were Robert Fishman, EVP,Executive Vice President, Chief Financial Officer and Chief Accounting Officer, Karla Robertson, EVP,Executive Vice President, General Counsel, Secretary and Chief Social Responsibility Officer, Jerome Pedretti, EVPpreviously Executive Vice President & President IFT, and Mario D’Ovidio, former EVPExecutive Vice President & President, Consumer Solutions. For 2020, the CEO was John Stauch and the Other NEOs were Robert Fishman, EVP,Executive Vice President, Chief Financial Officer and Chief Accounting Officer, Karla Robertson, EVP,Executive Vice President, General Counsel, Secretary and Chief Social Responsibility Officer, Mario D’Ovidio, former EVPExecutive Vice President & President, Consumer Solutions, Mark Borin, former EVP,Executive Vice President, Chief Financial Officer, John Jacko, former EVP,Executive Vice President, Chief Growth Officer, and Karl Frykman, former EVP,Executive Vice President, Chief Operating Officer. Chief Executive Officer
(3)
To calculate Compensation Actually Paid, to the CEO, adjustments were made to the “Total Compensation” reported in the SCT for the change in pension value and the value of equity awards, as follows: | Year | | | Summary Compensation Table Total to CEO ($) | | | Equity Adjustment ($) | | | Pension Adjustment ($) | | | Compensation Actually Paid ($) | | | 2022 | | | | | 7,783,265 | | | | | | (10,199,340) | | | | | | 471,184 | | | | | | (1,944,891) | | | | 2021 | | | | | 9,429,546 | | | | | | 14,068,723 | | | | | | (733,106) | | | | | | 22,765,163 | | | | 2020 | | | | | 9,342,044 | | | | | | 1,692,487 | | | | | | (2,154,182) | | | | | | 8,880,349 | | |
| | | | | | | | | 2024 Proxy Statement | Pentair |
| 67 |
2023 Adjustments | | | | | | | | | | | | Adjustments | CEO ($) | | Average of Other NEOs ($) | Total Compensation from SCT | 10,008,469 | | | 2,722,854 | | Adjustments for defined benefit and actuarial pension plans(a): | (745,945) | |
| — | | Less, aggregate change in the actuarial present value of accumulated benefits under all defined benefit and pension plans reported in the SCT | 1,064,217 | | | — | | Plus, service cost | 318,272 | | | — | | | | | | Adjustments for stock and option awards: | 8,630,685 | | | 1,774,539 | | Less, value of “Stock Awards” and “Option Awards” reported in SCT | 6,199,958 | | | 1,543,728 | | Plus, year-end fair value of outstanding and unvested equity awards granted in fiscal year 2023 | 9,736,783 | | | 2,445,732 | | Plus, the difference between the fair value of equity awards from the end of fiscal year 2022 to the end of fiscal year 2023 for awards granted in any prior fiscal year that are outstanding and unvested at year-end | 2,564,982 | | | 393,759 | | Plus, the change in fair value from the end of fiscal year 2022 to the vesting date for equity awards granted in any prior fiscal year for which all applicable vesting conditions were satisfied during fiscal year 2023 | 2,528,878 | | | 478,649 | | | | | | | | | | Add dividends or other earnings paid on stock or option awards in 2023 prior to vesting if not otherwise included in total compensation for fiscal year 2023 | — | | | 127 | | Compensation Actually Paid (as calculated) (b) (c) | 17,893,209 | | | 4,497,393 | |
(a)
The pension adjustment for the CEO is shown in the following table. The service costs for each year are offset by the amounts reported as the change in pension value from the SCT reported total compensation.
| CEO | | | Service Cost ($) | | | Prior Service Cost for Plan Amendments or New Plan ($) | | | Change in Pension Value from SCT ($) | | | Adjustment to SCT for Pensions ($) | | | 2022 | | | | | 471,184 | | | | | | — | | | | | | — | | | | | | 471,184 | | | | 2021 | | | | | 275,708 | | | | | | — | | | | | | (1,008,814) | | | | | | (733,106) | | | | 2020 | | | | | 443,871 | | | | | | — | | | | | | (2,598,053) | | | | | | (2,154,182) | | |
(b)
The equity award adjustment for the CEO is shown in the following table. The “Stock Awards” and “Option Awards” in the SCT table are deducted and replaced by the value of the CEO’s equity calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown.
EXECUTIVE COMPENSATION TABLES
2022 Adjustments for Equity Awards in Column (c) for CEO
| Equity Type | | | Fair Value of 2022 Equity Awards at 12/31/2022 ($) | | | Change in Value of Prior Years Awards Unvested at 12/31/2022 ($) | | | Change in Value of Prior Years Awards That Vested in FY 2022 ($) | | | Less: Fair Value of Awards Forfeited in 2022 as Measured FYE 2021 ($) | | | Cash Dividends Paid ($) | | | Less: SCT Stock Awards and Option Awards ($) | | | Equity Value Included in CAP ($) | | | Stock Awards | | | | | 2,586,785 | | | | | | (3,950,283) | | | | | | (3,371,240) | | | | | | — | | | | | | — | | | | | | (4,499,985) | | | | | | (9,234,723) | | | | Option Awards | | | | | 1,016,330 | | | | | | (463,143) | | | | | | (17,777) | | | | | | — | | | | | | — | | | | | | (1,500,027) | | | | | | (964,617) | | | | Total | | | | | 3,603,115 | | | | | | (4,413,426) | | | | | | (3,389,017) | | | | | | — | | | | | | — | | | | | | (6,000,012) | | | | | | (10,199,340) | | |
2021 Adjustments for Equity Awards in Column (c) for CEO
| Equity Type | | | Fair Value of 2021 Equity Awards at 12/31/2021 ($) | | | Change in Value of Prior Years Awards Unvested at 12/31/2021 ($) | | | Change in Value of Prior Years Awards That Vested in FY 2021 ($) | | | Less: Fair Value of Awards Forfeited in 2021 as Measured FYE 2020 ($) | | | Cash Dividends Paid ($) | | | Less: SCT Stock Awards and Option Awards ($) | | | Equity Value Included in CAP ($) | | | Stock Awards | | | | | 8,963,136 | | | | | | 5,180,040 | | | | | | 2,657,220 | | | | | | — | | | | | | — | | | | | | (3,749,993) | | | | | | 13,050,403 | | | | Option Awards | | | | | 1,633,579 | | | | | | 378,978 | | | | | | 255,764 | | | | | | — | | | | | | — | | | | | | (1,250,001) | | | | | | 1,018,320 | | | | Total | | | | | 10,596,715 | | | | | | 5,559,018 | | | | | | 2,912,984 | | | | | | — | | | | | | — | | | | | | (4,999,994) | | | | | | 14,068,723 | | |
2020 Adjustments for Equity Awards in Column (c) for CEO
| Equity Type | | | Fair Value of 2020 Equity Awards at 12/31/2020 ($) | | | Change in Value of Prior Years Awards Unvested at 12/31/2020 ($) | | | Change in Value of Prior Years Awards That Vested in FY 2020 ($) | | | Less: Fair Value of Awards Forfeited in 2020 as Measured FYE 2019 ($) | | | Cash Dividends Paid ($) | | | Less: SCT Stock Awards and Option Awards ($) | | | Equity Value Included in CAP ($) | | | Stock Awards | | | | | 3,906,179 | | | | | | 646,906 | | | | | | 629,499 | | | | | | — | | | | | | — | | | | | | (3,374,966) | | | | | | 1,807,618 | | | | Option Awards | | | | | 1,036,576 | | | | | | 97 | | | | | | (26,809) | | | | | | — | | | | | | — | | | | | | (1,124,995) | | | | | | (115,131) | | | | Total | | | | | 4,942,755 | | | | | | 647,003 | | | | | | 602,690 | | | | | | — | | | | | | — | | | | | | (4,499,961) | | | | | | 1,692,487 | | |
Average of Other Named Executive Officers
(4)
To calculate Compensation Actually Paid to the Other NEOs, adjustments were made to the “Total Compensation” reported in the SCT for the change in pension values and the value of equity awards, as follows:
| Year | | | Average Summary Compensation Table Total to NEOs ($) | | | Average Equity Adjustment ($) | | | Average Pension Adjustment ($) | | | Average Compensation Actually Paid ($) | | | 2022 | | | | | 2,053,323 | | | | | | (1,846,559) | | | | | | — | | | | | | 206,764 | | | | 2021 | | | | | 2,756,991 | | | | | | 2,760,169 | | | | | | — | | | | | | 5,517,160 | | | | 2020 | | | | | 2,293,390 | | | | | | (241,136) | | | | | | (150,940) | | | | | | 1,901,314 | | |
(a)
The pension adjustment for the NEOs is shown in the following table. The service costs for each year are offset by the amounts reported as the “change in pension value” from the SCT reported total compensation.
(b)
For years 2021 and 2022,2023, none of the Other NEOs participated in a pension plan.
| NEOs | | | Average Service Cost ($) | | | Average Prior Service Cost for Plan Amendments or New Plan ($) | | | Average Change in Pension value from SCT ($) | | | Average Adjustment to SCT for Pensions ($) | | | 2022 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | 2021 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | 2020 | | | | | 106,007 | | | | | | — | | | | | | (256,947) | | | | | | (150,940) | | |
(c)(b)
The equity award adjustment for the NEOsCompensation actually paid is shown in the following table. The “Stock Awards” and “Option Awards” in the SCT table are offset by the value of the NEO’s equity calculated in accordance with the SEC methodology for determining Compensation Actually Paid for each year shown.
EXECUTIVE COMPENSATION TABLES
2022 Adjustments for Equity Awards in Column (e) for NEOs
| Equity Type | | | Avg Fair Value of 2022 Equity Awards at 12/31/2022 ($) | | | Avg Change in Value of Prior Years Awards Unvested at 12/31/2022 ($) | | | Avg Change in Value of Prior Years Awards That Vested in FY 2022 ($) | | | Less: Avg Fair Value of Awards Forfeited in 2022 as Measured FYE 2021 ($) | | | Avg Cash Dividends Paid ($) | | | Less: Avg SCT Stock Awards and Option Awards ($) | | | Avg Equity Value Included in CAP ($) | | | Stock Awards | | | | | 474,256 | | | | | | (1,178,213) | | | | | | (153,726) | | | | | | — | | | | | | — | | | | | | (825,017) | | | | | | 1,682,700 | | | | Option Awards | | | | | 186,327 | | | | | | (72,776) | | | | | | (2,405) | | | | | | — | | | | | | — | | | | | | (275,005) | | | | | | (163,859) | | | | Total | | | | | 660,583 | | | | | | (1,250,989) | | | | | | (156,131) | | | | | | — | | | | | | — | | | | | | (1,100,022) | | | | | | (1,846,559) | | |
2021 Adjustments for Equity Awards in Column (e) for NEOs
| Equity Type | | | Avg Fair Value of 2021 Equity Awards at 12/31/2021 ($) | | | Avg Change in Value of Prior Years Awards Unvested at 12/31/2021 ($) | | | Avg Change in Value of Prior Years Awards That Vested in FY 2021 ($) | | | Less: Avg Fair Value of Awards Forfeited in 2021 as Measured FYE 2020 ($) | | | Avg Cash Dividends Paid ($) | | | Less: Avg SCT Stock Awards and Option Awards ($) | | | Avg Equity Value Included in CAP ($) | | | Stock Awards | | | | | 1,994,329 | | | | | | 595,452 | | | | | | 241,076 | | | | | | — | | | | | | — | | | | | | (196,884) | | | | | | 2,633,973 | | | | Option Awards | | | | | 363,476 | | | | | | 23,924 | | | | | | 16,925 | | | | | | — | | | | | | — | | | | | | (278,129) | | | | | | 126,196 | | | | Total | | | | | 2,357,805 | | | | | | 619,376 | | | | | | 258,001 | | | | | | — | | | | | | — | | | | | | (475,013) | | | | | | 2,760,169 | | |
2020 Adjustments for Equity Awards in Column (e) for NEOs
| Equity Type | | | Avg Fair Value of 2020 Equity Awards at 12/31/2020 ($) | | | Avg Change in Value of Prior Years Awards Unvested at 12/31/2020 ($) | | | Avg Change in Value of Prior Years Awards That Vested in FY 2020 ($) | | | Less: Avg Fair Value of Awards Forfeited in 2020 as Measured FYE 2019 ($) | | | Avg Cash Dividends Paid ($) | | | Less: Avg SCT Stock Awards and Option Awards ($) | | | Avg Equity Value Included in CAP ($) | | | Stock Awards | | | | | 952,394 | | | | | | 117,124 | | | | | | 75,065 | | | | | | (308,563) | | | | | | — | | | | | | (928,134) | | | | | | (92,114) | | | | Option Awards | | | | | 116,135 | | | | | | 32 | | | | | | (33,314) | | | | | | (47,500) | | | | | | — | | | | | | (184,375) | | | | | | (149,022) | | | | Total | | | | | 1,068,529 | | | | | | 117,156 | | | | | | 41,751 | | | | | | (356,063) | | | | | | — | | | | | | (1,112,509) | | | | | | (241,136) | | |
(5)(c)
Fair value of equity awards are computed in accordance with ASC 718. Assumptions used in the calculation of these amounts are included in note 13 to our audited financial statements for the year December 31, 20222023 included in our Annual Report on Form 10-K filed with the SEC on February 21, 202320, 2024 and are adjusted for factors such as expected payout on Performance StockShare Units and expected life for Option Awards as of the respective measurement dates.
(6)(4)
The table shows the cumulative total shareholder returns on our ordinary shares, assuming an investment of $100 on December 31, 2019,2020, and the reinvestment of all dividends since that date to December 31the last fiscal day of currenteach applicable year. The measurement period used for cumulative TSR is the period that commences (5)Based on the size and diversity of our businesses as well as our market close of the last trading day before the earliest fiscal year reported in the table (December 31, 2019) and ends on (and includes) the last day of the most recent covered fiscal year.
(7)
Our peer group iscapitalization, we consider the S&P 500 Industrials Index whichto be our peer group. The S&P 500 Industrials Index is one of the industry indexindustry indexes used in our performance graph in our Form 10-K.
(8)(6)
Our company selected metric is company-wide segment income. Refer to Appendix A for GAAP to Non GAAP Reconciliation. | | | | | | | | | 68 | | Pentair | 2024 Proxy Statement |
EXECUTIVE COMPENSATION TABLES
Tabular List of Important Performance Measures Used to Link Pay and Performance The four measures listed below represent the most important measures used to link compensation actually paid to the NEOs, for fiscal 2022,2023, with our performance, as further described in the CD&A. | | | | | | Most Important Measures for
Linking Pay and Performance | | | Measure 1 - | | | Company-Wide Segment Income | | | Measure 2 - | | | Adjusted EPS | | | Measure 3 - | | | ROIC | | | Measure 4 - | | | TSR | |
While not a metric used in our short and long-term plans, we are including TSR. A sizable amount of the variability of compensation actually paid depends on the value of equity awards, which is based on the Company’s stock price.
Description of Relationship Between Pay and Performance Pay Versus Net Income & Segment Income 2020-2023 | | | | | | | | | | | | | | | | | | | | | | | | | CAP to CEO | | Avg CAP to Other NEOs | | Net Income | | Segment Income |
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Pay Versus TSR 2020-2023 | | | | | | | | | | | | | | | | | | | | | | | | | CAP to CEO | | Avg CAP to Other NEOs | | PNR TSR | | Peer TSR |
As reflected in the tables above, we believe the Compensation Actually Paid to our NEOs has a high degree of correlation to our Company’s performance.
EXECUTIVE COMPENSATION TABLES
RISK CONSIDERATIONS IN COMPENSATION DECISIONS
The Compensation Committee believes that paying for performance is an important part of its compensation philosophy, but recognizes the risk that incentivizing specific measures of performance may pose to the performance of our company as a whole if personnel were to act in ways designed primarily to maximize their compensation. Therefore, the Compensation Committee conducts an annual assessment of potential risks arising from its compensation programs and policies applicable to all employees. In its December 2022 assessment, the Compensation Committee noted the following considerations, among others:
▶
the balance of our fixed and variable compensation in our executive compensation program;
▶
the balance in our executive compensation program between the achievement of short-term objectives and longer-term value creation;
▶
the mix of compensation forms within our long-term incentive compensation plan;
▶
our use of multiple performance measures under our incentive compensation plans;
▶
metrics tied to segment performance for segment presidents;
▶
the impact of these performance measures on our financial results;
▶
our use of performance curves that require achievement of a minimum level of performance before receiving any incentive payout;
▶
capped payouts under our incentive plans;
▶
clawback policy pursuant to which certain incentive compensation earned by our executive officers may be subject to recoupment; and
▶
our stock ownership guidelines and equity holding policy.
Based on its assessment, the Compensation Committee concluded that the risks arising from our executive compensation program and policies are not reasonably likely to have a material adverse effect on our company. The Compensation Committee will continue to assess our executive compensation program to align employee interests with those of long-term shareholder interests.
| | | | | APPROVE, BY NONBINDING, ADVISORY VOTE, THE FREQUENCY OF FUTURE ADVISORY VOTES ON THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS | | | | 70 | | | | The Board recommends a vote ofPentair 1 YEAR| on frequency of future advisory votes on compensation of named executive officers2024 Proxy Statement
| |
Section 14A of the Securities Exchange Act of 1934 requires that, every six years, we provide shareholders with a vote on how frequently we will submit the non-binding advisory vote on compensation of our named executive officers (the “say on pay” vote) to our shareholders in the future. We last submitted a vote on the frequency of future say on pay votes to our shareholders in 2017, when, in keeping with the recommendation of our Board, our shareholders expressed a preference that future say on pay votes be held on an annual basis. Consistent with that preference, our Board has held a say on pay vote annually since 2017.
Our Board recommends that shareholders approve holding a say on pay vote every year (an annual vote) because we continue to believe that an annual vote will promote best governance practices and facilitate our Compensation Committee’s and our senior management’s consideration of the views of our shareholders in structuring our compensation programs for our named executive officers. We believe that an annual vote will provide our Compensation Committee and our senior management with more direct input on,
and reactions to, our current compensation practices, and better allow our Compensation Committee and our senior management to measure how they have responded to the prior year’s vote.
In voting on this non-binding advisory proposal on the frequency of the say on pay vote, shareholders should be aware that they are not voting “for” or “against” the Board’s recommendation to vote for a frequency of every year. Rather, shareholders will be casting votes to recommend a say on pay vote frequency which may be every one, two or three years, or they may abstain entirely from voting on the proposal.
The frequency of the say on pay vote receiving the greatest number of votes cast in favor of such frequency will be the frequency of the say on pay vote that shareholders are deemed to have approved.
Although the outcome of this advisory vote on the frequency of future say on pay votes is non-binding, our Board will review and consider the outcome of this vote when making determinations as to when the say on pay vote will again be submitted to shareholders for approval at an annual meeting of shareholders.
| EACH OF THE BOARD AND THE COMPENSATION COMMITTEE RECOMMENDS A VOTE OF “1 YEAR” ON FREQUENCY OF FUTURE ADVISORY VOTES ON COMPENSATION OF NAMED EXECUTIVE OFFICERS. | |
| | | | | RATIFY, BY NONBINDING, ADVISORY VOTE, THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITOR OF PENTAIR PLC AND TO AUTHORIZE, BY BINDING VOTE, THE AUDIT AND FINANCE COMMITTEE OF THE BOARD OF DIRECTORS TO SET THE AUDITOR’S REMUNERATION | | | | | | | | | | | | | | | | | | | | | | | | | | PROPOSAL 3 | | | | | | Ratify, by Nonbinding, Advisory Vote, the Appointment of Deloitte & Touche LLP as the Independent Auditor of Pentair plc and to Authorize, by Binding Vote, the Audit and Finance Committee of the Board of Directors to Set the Auditor’s Remuneration | | | | | | The Board recommends a vote FOR the ratification of the appointment of Deloitte & Touche LLP as
the independent auditor of Pentair plc and the authorization of the Audit and Finance Committee to
set the auditor’s remuneration | | | | | | | | The Audit and Finance Committee has selected and appointed Deloitte & Touche LLP (“D&T”) to audit our financial statements for the fiscal year ending December 31, 2024. The Board, upon the recommendation of the Audit and Finance Committee, is asking our shareholders to ratify, by nonbinding, advisory vote, the appointment and to authorize, by binding vote, the Audit and Finance Committee of the Board of Directors to set the independent auditor’s remuneration. Although approval is not required by our Articles of Association or otherwise, the Board is submitting the appointment of D&T to our shareholders because we value our shareholders’ views on our independent auditor. If the appointment of D&T is not ratified by shareholders, it will be considered as notice to the Board and the Audit and Finance Committee to consider the selection of a different firm. Even if the appointment is ratified, the Audit and Finance Committee in its discretion may select a different independent auditor at any time during the year if it determines that such a change would be in the best interests of our company and our shareholders. The Audit and Finance Committee is directly responsible for the appointment, compensation, retention and oversight of the independent auditor retained to audit our financial statements. D&T has been retained as our independent auditor continuously since 1977. The Audit and Finance Committee is responsible for the audit fee negotiations associated with our retention of D&T. In connection with the mandated rotation of D&T’s lead engagement partner, the Audit and Finance Committee and its Chair are directly involved in the selection of D&T’s new lead engagement partner. The members of the Audit and Finance Committee and the Board believe that the continued retention of D&T to serve as our independent auditor is in our and our shareholders’ best interests. We expect that one or more representatives of D&T will be present at the Annual General Meeting. Each of these representatives will have the opportunity to make a statement, if he or she desires, and is expected to be available to respond to any questions. The text of the resolution with respect to Proposal 3 is as follows: “IT IS RESOLVED, to ratify, on a nonbinding, advisory basis, the appointment of Deloitte & Touche LLP as the independent auditor of Pentair plc and to authorize, in a binding vote, the Audit and Finance Committee to set the auditor’s remuneration.” | | | | | | | | | | | | | | Each of the Board and the Audit and Finance Committee recommends a vote FOR the ratification of the appointment of Deloitte & Touche LLP as the independent auditor of Pentair plc and the authorization of the Audit and Finance Committee to set the auditor’s remuneration. | | | | | | | |
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Audit and Finance Committee has selected and appointed Deloitte & Touche LLP (“D&T”) to audit our financial statements for the fiscal year ending December 31, 2023. The Board, upon the recommendation of the Audit and Finance Committee, is asking our shareholders to ratify, by nonbinding, advisory vote, the appointment and to authorize, by binding vote, the Audit and Finance Committee of the Board of Directors to set the independent auditor’s remuneration. Although approval is not required by our Articles of Association or otherwise, the Board is submitting the appointment of D&T to our shareholders because we value our shareholders’ views on our independent auditor. If the appointment of D&T is not ratified by shareholders, it will be considered as notice to the Board and the Audit and Finance Committee to consider the selection of a different firm. Even if the appointment is ratified, the Audit and Finance Committee in its discretion may select a different independent auditor at any time during the year if it determines that such a change would be in the best interests of our company and our shareholders.Pre-approval Policy The Audit and Finance Committee is directly responsible for the appointment, compensation, retention and oversight of the independent auditor retained to audit
our financial statements. D&T has been retained as our independent auditor continuously since 1977.
The Audit and Finance Committee is responsible for the audit fee negotiations associated with our retention of D&T. In connection with the mandated rotation of D&T’s lead engagement partner, the Audit and Finance Committee and its Chair are directly involved in the selection of D&T’s new lead engagement partner. The members of the Audit and Finance Committee and the Board believe that the continued retention of D&T to serve as our independent auditor is in our and our shareholders’ best interests.
We expect that one or more representatives of D&T will be present at the Annual General Meeting. Each of these representatives will have the opportunity to make a statement, if he or she desires, and is expected to be available to respond to any questions.
The text of the resolution with respect to Proposal 4 is as follows:
“IT IS RESOLVED, to ratify, on a nonbinding, advisory basis, the appointment of Deloitte & Touche LLP as the independent auditor of Pentair plc and to authorize, in a binding vote, the Audit and Finance Committee to set the auditor’s remuneration.”
| EACH OF THE BOARD AND THE AUDIT AND FINANCE COMMITTEE RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITOR OF PENTAIR PLC AND THE AUTHORIZATION OF THE AUDIT AND FINANCE COMMITTEE TO SET THE AUDITOR’S REMUNERATION. | |
AUDIT AND FINANCE COMMITTEE PRE-APPROVAL POLICY
The Audit and Finance Committee reviews and approves the external auditor’s engagement and audit plan, including fees, scope, staffing and timing of work. In addition, the Audit and Finance Committee Charter limits the types of non-audit services that may be provided by the independent auditors. Any permitted non-audit services to be performed by the independent auditors must be pre-approved by the Audit and Finance Committee after it is advised of the nature of the engagement and particular services to be provided. The Audit and Finance Committee pre-approved audit fees and all permitted non-audit services of the independent auditor in 2022.2023. Responsibility for this pre-approval may be delegated to one or more members of the Audit and Finance Committee; all such approvals, however, must be disclosed to the Audit and Finance Committee at its next regularly scheduled meeting. The Audit and Finance Committee may not delegate authority for pre-approvals to management. Fees Paid to the Independent Auditors
FEES PAID TO THE INDEPENDENT AUDITORS
We engaged D&T, Deloitte & Touche (Ireland), and the member firms of Deloitte Touche Tohmatsu and their respective affiliates (collectively, the “Deloitte Entities”) to provide various audit, audit-related, tax and other permitted non-audit services to us during fiscal years 2022 2023 and 2021.2022. The Audit and Finance Committee approved all fees paid to the Deloitte Entities and underlying services provided by the Deloitte Entities. Their fees for these services were as follows (in thousands):
| | | | 2022 | | | 2021 | | | Audit fees(1) | | | | $ | 5,600 | | | | | $ | 4,775 | | | | Audit-related fees(2) | | | | | 451 | | | | | | 373 | | | | Tax fees(3) | | | | | | | | | | | | | | | Tax compliance | | | | | 699 | | | | | | 1,002 | | | | Tax consulting | | | | | 729 | | | | | | 645 | | | | Total tax fees | | | | | 1,428 | | | | | | 1,647 | | | | Other service fees(4) | | | | | 3 | | | | | | 398 | | | | Total | | | | $ | 7,482 | | | | | $ | 7,193 | | |
| | | | | | | | | | | | | 2023 | | 2022 | Audit fees(1) | $ | 5,685 | | | $ | 5,600 | | Audit-related fees(2) | 244 | | | 451 | | Tax fees(3) | | | | Tax compliance | 536 | | | 699 | | Tax consulting | 923 | | | 729 | | Total tax fees | 1,459 | | | 1,428 | | Other service fees(4) | — | | | 3 | | Total | $ | 7,388 | | | $ | 7,482 | |
(1)
Consists of fees for audits of our consolidated annual financial statements and the effectiveness of internal controls over financial reporting, reviews of our quarterly financial statements, statutory audits, reviews of SEC filings, consents for registration statements and comfort letters in connection with securities offerings.
(2)
Consists of fees for due diligence, employee benefit plan audits, and certain other attest services.
(3)
Consists of fees for tax compliance and return preparation and tax planning and advice.
(4)
Consists of fees for other permissible non-audit services.
AUDIT AND FINANCE COMMITTEE REPORT
| | | | | | | | | 72 | | Pentair | 2024 Proxy Statement |
Audit and Finance Committee Report In connection with the financial statements for the year ended December 31, 2022,2023, the Audit and Finance Committee has: ▶u
reviewed and discussed our audited U.S. GAAP consolidated financial statements and Irish statutory financial statementsStatutory Financial Statements for the year ended December 31, 20222023 with management;
▶u
discussed with Deloitte & Touche LLP, our independent registered public accounting firm, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission; and
▶u
received the written disclosures and the letter from Deloitte & Touche LLP as required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered
public accounting firm’s communications with the Audit and Finance Committee concerning independence, and discussed with Deloitte & Touche LLP their independence. Based upon these reviews and discussions, the Audit and Finance Committee recommended to the Board that our audited consolidated financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 20222023 filed with the Securities and Exchange Commission on February 21, 2023.20, 2024. The Board has approved these inclusions. THE AUDIT AND FINANCE COMMITTEE Glynis A. Bryan, Michael T. Speetzen, Chair
Mona Abutaleb Stephenson
Melissa Barra
Tracey C. Doi Gregory E. Knight Michael T. Speetzen
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| | AUTHORIZE THE BOARD OF DIRECTORS TO ALLOT NEW SHARES UNDER IRISH LAW | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PROPOSAL 4 | | | | | | Authorize the Board of Directors to Allot New Shares Under Irish Law | | | | | | The Board recommends a voteFORauthorization of the Board of Directors to allot new shares under Irish law | | | | | | | | Under Irish law, directors of an Irish public limited company must have authority from its shareholders to allot (or issue) any shares, including shares that are part of our company’s authorized but unissued share capital. The Board’s current authority to issue up to 20% of the company’s issued ordinary share capital was approved by the shareholders at the 2023 Annual General Meeting and will expire on November 9, 2024. This authority is fundamental to our business and enables us to issue shares, including, if applicable, in connection with funding acquisitions and raising capital. We are presenting this Proposal 4 to renew the Board’s authority to issue up to a maximum of 20% of the company’s issued ordinary share capital as of March 8, 2024 (the latest practicable date before this Proxy Statement) and for such authority to expire 18 months from the passing of this resolution, unless otherwise varied, revoked or renewed. Granting the Board this authority is a routine matter for public limited companies incorporated in Ireland and is consistent with Irish market practice. We are not asking you to approve an increase in our authorized share capital or to approve a specific issuance of shares. Instead, approval of this proposal will only grant the Board the authority to allot shares upon the terms below. In addition, we note that, because we are an NYSE-listed company, our shareholders continue to benefit from the protections afforded to them under the rules and regulations of the NYSE and SEC, including those rules that limit our ability to issue shares in specified circumstances. The text of the resolution in respect of Proposal 4 is as follows: “IT IS RESOLVED, that, the Board of Directors be and is generally and unconditionally authorized with effect from the passing of this resolution to exercise all powers of the Company to allot relevant securities (as defined in Section 1021 of the Companies Act 2014) in an amount up to an aggregate nominal amount of $332,032 (equivalent to 33,203,219 ordinary shares), being equivalent to approximately 20% of the aggregate nominal value of the issued ordinary share capital of the Company as of March 8, 2024 (the latest practicable date before this Proxy Statement), and the authority conferred by this resolution shall expire eighteen months from the passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the Directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.” | | | | | | | | | | | | | | The Board recommends a vote FOR authorization of the Board of Directors to allot new shares under Irish lawlaw. | | | | | | | |
Under Irish law, directors of an Irish public limited company must have authority from its shareholders to allot (or issue) any shares, including shares that are part of our company’s authorized but unissued share capital. The Board’s current authority to issue up to 33% of the company’s issued ordinary share capital was approved by the shareholders at the 2022 Annual General Meeting and will expire on November 17, 2023. This authority is fundamental to our business and enables us to issue shares, including, if applicable, in connection with funding acquisitions and raising capital.
We are presenting this Proposal 5 to renew the Board’s authority to issue up to a maximum of 20% of the company’s issued ordinary share capital as at March 10, 2023 (the latest practicable date before this Proxy Statement) and for such authority to expire 18 months from the passing of this resolution, unless otherwise varied, revoked or renewed.
Granting the Board this authority is a routine matter for public limited companies incorporated in Ireland and is consistent with Irish market practice. We are not asking you to approve an increase in our authorized share capital or to approve a specific issuance of shares. Instead, approval of this proposal will only grant the Board the authority to allot shares upon the terms below. In addition, we note that, because we are an NYSE-listed
company, our shareholders continue to benefit from the protections afforded to them under the rules and regulations of the NYSE and SEC, including those rules that limit our ability to issue shares in specified circumstances.
The text of the resolution in respect of Proposal 5 is as follows:
“IT IS RESOLVED, that, the Board of Directors be and is generally and unconditionally authorized with effect from the passing of this resolution to exercise all powers of the Company to allot relevant securities (as defined in Section 1021 of the Companies Act 2014) in an amount up to an aggregate nominal amount of $329,880 (equivalent to 32,988,041 ordinary shares), being equivalent to approximately 20% of the aggregate nominal value of the issued ordinary share capital of the Company as of March 10, 2023 (the latest practicable date before this Proxy Statement), and the authority conferred by this resolution shall expire eighteen months from the passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the Directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”
| THE BOARD RECOMMENDS A VOTE “FOR” AUTHORIZATION OF THE BOARD OF DIRECTORS TO ALLOT NEW SHARES UNDER IRISH LAW. | |
| | | | | | | | | 74 | | Pentair | 2024 Proxy Statement |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PROPOSAL 5 | | | | | | Authorize the Board of Directors to Opt-out of Statutory Preemption Rights Under Irish Law | | | | | | The Board recommends a vote FORauthorization of the Board of Directors to opt-out of statutory preemption rights under Irish law | | | AUTHORIZE THE BOARD OF DIRECTORS TO OPT-OUT OF STATUTORY PREEMPTION RIGHTS UNDER IRISH LAW | | | | | | | | Under Irish law, unless otherwise authorized, certain statutory preemption rights apply automatically in favor of shareholders where shares are to be issued for cash. Under the statutory preemption rights, shares issued for cash must be offered to existing shareholders of our company on a pro rata basis before the shares can be issued to any new shareholders. The Board’s current authority to opt-out of these statutory preemption rights was approved by the shareholders at the 2023 Annual General Meeting and will expire on November 9, 2024. The statutory preemption rights do not apply where shares are issued for non-cash consideration (such as in a stock-for-stock acquisition) and do not apply to the issue of non-equity shares (that is, shares that have the right to participate only up to a specified amount in any income or capital distribution) or where shares are issued pursuant to an employee option or similar equity plan.We are presenting this Proposal 5 to renew the Board’s authority to opt-out of the statutory preemption rights provision in the event of the issuance of shares for cash. This opt-out will be limited to 20% of the company’s issued ordinary share capital as of March 8, 2024. This authority will be limited to a period expiring 18 months from the passing of this resolution, unless otherwise varied, renewed or revoked. Granting the Board this authority is a routine matter for public limited companies incorporated in Ireland and is consistent with Irish customary practice. Similar to the authorization sought for Proposal 4, this authority is fundamental to our business and, if applicable, will facilitate our ability to fund acquisitions and otherwise raise capital. We are not asking you to approve an increase in our authorized share capital. Instead, approval of this proposal will only grant the Board the authority to issue shares upon the terms below. Without this authorization, in each case where we issue shares for cash, we would first have to offer those shares on the same or more favorable terms to all of our existing shareholders. This requirement could cause delays in the completion of acquisitions and capital raising for our business. Furthermore, we note that this authorization is required as a matter of Irish law and is not otherwise required for U.S. companies listed on the NYSE. In addition, under Irish law, the Board will only be authorized to opt-out of preemption rights if it is authorized to issue shares, which authority is being sought in Proposal 4. The text of the resolution with respect to Proposal 5 is as follows: “IT IS RESOLVED, as a special resolution, that, subject to the passing of the resolution in respect of Proposal 4 as set out above and with effect from the passing of this resolution, the directors be and are hereby empowered pursuant to Section 1023 of the Companies Act 2014 to allot equity securities (as defined in Section 1023 of that Act) for cash, pursuant to the authority conferred by Proposal 4 as if sub-section (1) of Section 1022 of that Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal value of $332,032 (equivalent to 33,203,219 shares), being equivalent to approximately 20% of the aggregate nominal value of the issued ordinary share capital of the Company as of March 8, 2024 (the latest practicable date before this Proxy Statement), and the authority conferred by this resolution shall expire 18 months from the passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the Board may allot equity securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.” | | | | | | | | | | | | | | The Board recommends a vote FOR authorization of the Board of Directors to opt-out of statutory preemption rights under Irish lawlaw. | | | | | | | |
Under Irish law, unless otherwise authorized, certain statutory preemption rights apply automatically in favor of shareholders where shares are to be issued for cash. Under the statutory preemption rights, shares issued for cash must be offered to existing shareholders of our company on a pro rata basis before the shares can be issued to any new shareholders. The Board’s current authority to opt-out of these statutory preemption rights was approved by the shareholders at the 2022 Annual General Meeting and will expire on November 17, 2023. The statutory preemption rights do not apply where shares are issued for non-cash consideration (such as in a stock-for-stock acquisition) and do not apply to the issue of non-equity shares (that is, shares that have the right to participate only up to a specified amount in any income or capital distribution) or where shares are issued pursuant to an employee option or similar equity plan.
We are presenting this Proposal 6 to renew the Board’s authority to opt-out of the statutory preemption rights provision in the event of the issuance of shares for cash. This opt-out will be limited to 20% of the company’s issued ordinary share capital as at March 10, 2023. This authority will be limited to a period expiring 18 months from the passing of this resolution, unless otherwise varied, renewed or revoked.
Granting the Board this authority is a routine matter for public limited companies incorporated in Ireland and is consistent with Irish customary practice. Similar to the authorization sought for Proposal 5, this authority is fundamental to our business and, if applicable, will facilitate our ability to fund acquisitions and otherwise raise capital. We are not asking you to approve an increase in our authorized share capital. Instead, approval of this proposal will only grant the Board the authority to issue shares upon the terms below. Without this authorization, in each case where we issue shares for
cash, we would first have to offer those shares on the same or more favorable terms to all of our existing shareholders. This requirement could cause delays in the completion of acquisitions and capital raising for our business. Furthermore, we note that this authorization is required as a matter of Irish law and is not otherwise required for U.S. companies listed on the NYSE. In addition, under Irish law, the Board will only be authorized to opt-out of preemption rights if it is authorized to issue shares, which authority is being sought in Proposal 5.
The text of the resolution with respect to Proposal 6 is as follows:
“IT IS RESOLVED, as a special resolution, that, subject to the passing of the resolution in respect of Proposal 5 as set out above and with effect from the passing of this resolution, the directors be and are hereby empowered pursuant to Section 1023 of the Companies Act 2014 to allot equity securities (as defined in Section 1023 of that Act) for cash, pursuant to the authority conferred by Proposal 5 as if sub-section (1) of Section 1022 of that Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal value of $329,880 (equivalent to 32,988,041 shares), being equivalent to approximately 20% of the aggregate nominal value of the issued ordinary share capital of the Company as of March 10, 2023 (the latest practicable date before this Proxy Statement ), and the authority conferred by this resolution shall expire 18 months from the passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the Board may allot equity securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”
| THE BOARD RECOMMENDS A VOTE “FOR” AUTHORIZATION OF THE BOARD OF DIRECTORS TO OPT-OUT OF STATUTORY PREEMPTION RIGHTS UNDER IRISH LAW. | |
| | | | | | | | | 2024 Proxy Statement | Pentair | | 75 |
| | AUTHORIZE THE PRICE RANGE AT WHICH PENTAIR PLC CAN RE-ALLOT SHARES IT HOLDS AS TREASURY SHARES UNDER IRISH LAW | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PROPOSAL 6 | | | | | | Authorize the Price Range at Which Pentair Plc can Re-allot Shares it Holds as Treasury Shares Under Irish Law | | | | | | The Board recommends a voteFOR the authorization of the price range at which Pentair plc can re-allot shares it holds as treasury shares under Irish law | | | | | | | | Our historical open-market share repurchases (whether effected as redemptions or otherwise) and other share buyback activities result in ordinary shares being acquired and held by us as treasury shares or cancelled. We may re-allot treasury shares that we acquire through our various share buyback activities in connection with our employee compensation programs or otherwise. Under Irish law, our shareholders must authorize the price range at which we may re-allot any shares held in treasury. In this proposal, that price range is expressed as a minimum and maximum percentage of the prevailing market price (as defined below). The company’s current authorization was granted by the shareholders at the 2023 Annual General Meeting and will expire on November 9, 2024. The authority being sought from shareholders provides that the minimum and maximum prices at which an ordinary share held in treasury may be re-allotted are 95% (or nominal value where the re-allotment of treasury shares is required to satisfy an obligation under any employee or director share or option plan operated by Pentair plc) and 120%, respectively, of the average closing price per ordinary share, as reported on the NYSE, for the 30 trading days immediately preceding the proposed date of re-allotment. Any re-allotment of treasury shares will be at price levels that the Board considers in the best interests of our shareholders. Under Irish law, this authorization will expire after 18 months unless renewed. Accordingly, we expect to propose renewal of this authorization at subsequent Annual General Meetings. The resolution with respect to Proposal 6 is a special resolution. The text of the resolution with respect to Proposal 6 is as follows: “IT IS RESOLVED, as a special resolution, that for the purposes of Section 1078 of the Companies Act 2014, the re-allotment price range at which any treasury shares (as defined by Section 106 of the Companies Act 2014) for the time being held by Pentair plc may be re-allotted off-market shall be as follows: 1.the maximum price at which a treasury share may be re-allotted off-market shall be an amount equal to 120% of the “market price.” 2.the minimum price at which a treasury share may be re-allotted off-market shall be the nominal value of the share where such a share is required to satisfy an obligation under any employee or director share or option plan operated by Pentair plc or, in all other cases, not less than 95% of the “market price.” 3.for the purposes of this resolution, the “market price” shall mean the average closing price per ordinary share of Pentair plc, as reported on the New York Stock Exchange, for the 30 trading days immediately preceding the day on which the relevant share is re-allotted. FURTHER RESOLVED, that this authority to re-allot treasury shares shall expire on the date 18 months from the date of the passing of this resolution unless previously varied, revoked or renewed in accordance with the provisions of Sections 109 and/or 1078 (as applicable) of the Companies Act 2014 (and/or any corresponding provision of any amended or replacement legislation) and is without prejudice or limitation to any other authority of the Company to re-allot treasury shares on-market.” | | | | | | | | | | | | | | The Board recommends a vote FOR the authorization of the price range at which Pentair plc can re-allot shares it holds as treasury shares under Irish lawlaw. | | | | | | | |
Our historical open-market share repurchases (whether effected as redemptions or otherwise) and other share buyback activities result in ordinary shares being acquired and held by us as treasury shares or cancelled. We may re-allot treasury shares that we acquire through our various share buyback activities in connection with our employee compensation programs or otherwise.
Under Irish law, our shareholders must authorize the price range at which we may re-allot any shares held in treasury. In this proposal, that price range is expressed as a minimum and maximum percentage of the prevailing market price (as defined below). The company’s current authorization was granted by the shareholders at the 2022 Annual General Meeting and will expire on November 17, 2023.
The authority being sought from shareholders provides that the minimum and maximum prices at which an ordinary share held in treasury may be re-allotted are 95% (or nominal value where the re-allotment of treasury shares is required to satisfy an obligation under any employee or director share or option plan operated by Pentair plc) and 120%, respectively, of the average closing price per ordinary share, as reported on the NYSE, for the 30 trading days immediately preceding the proposed date of re-allotment. Any re-allotment of treasury shares will be at price levels that the Board considers in the best interests of our shareholders. Under Irish law, this authorization will expire after 18 months unless renewed. Accordingly, we expect to propose renewal of this authorization at subsequent Annual General Meetings.
The resolution with respect to Proposal 7 is a special resolution. The text of the resolution with respect to Proposal 7 is as follows:
“IT IS RESOLVED, as a special resolution, that for the purposes of Section 1078 of the Companies Act 2014, the re-allotment price range at which any treasury shares (as defined by Section 106 of the Companies Act 2014) for the time being held by Pentair plc may be re-allotted off-market shall be as follows:
1.
the maximum price at which a treasury share may be re-allotted off-market shall be an amount equal to 120% of the “market price.”
2.
the minimum price at which a treasury share may be re-allotted off-market shall be the nominal value of the share where such a share is required to satisfy an obligation under any employee or director share or option plan operated by Pentair plc or, in all other cases, not less than 95% of the “market price.”
3.
for the purposes of this resolution, the “market price” shall mean the average closing price per ordinary share of Pentair plc, as reported on the New York Stock Exchange, for the 30 trading days immediately preceding the day on which the relevant share is re-allotted.
FURTHER RESOLVED, that this authority to re-allot treasury shares shall expire on the date 18 months from the date of the passing of this resolution unless previously varied, revoked or renewed in accordance with the provisions of Sections 109 and/or 1078 (as applicable) of the Companies Act 2014 (and/or any corresponding provision of any amended or replacement legislation) and is without prejudice or limitation to any other authority of the Company to re-allot treasury shares on-market.”
| | | | | | | | | 76 | | THE BOARD RECOMMENDS A VOTE “FOR” THE AUTHORIZATION OF THE PRICE RANGE AT WHICH PENTAIR PLC CAN RE-ALLOT SHARES IT HOLDS AS TREASURY SHARES UNDER IRISH LAW.Pentair | 2024 Proxy Statement |
| | | | | | | Ownership of Pentair Stock |
SECURITY OWNERSHIP
The following table contains information concerning the beneficial ownership of our ordinary shares as of March 10, 2023,8, 2024, by each director and nominee to become a director, by each executive officer listed in the Summary Compensation Table, and by all current directors and executive officers as a group. Based on filings with the SEC, the following table also contains information concerning each person we know who beneficially owned more than 5% of our ordinary shares as of December 31, 2022.2023. | Name of Beneficial Owner | | | Common Stock(1) | | | Share Units(2) | | | Right to Acquire within 60 days | | | RSIP Stock(3) | | | Total | | | % of Class(4) | | | Mona Abutaleb | | | | | 10,256 | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,256 | | | | | | | Melissa Barra | | | | | 1,397 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,397 | | | | | | | Glynis A. Bryan | | | | | 29,006 | | | | | | 5,525 | | | | | | 18,070 | | | | | | — | | | | | | 52,601 | | | | | | | Mario D’Ovidio | | | | | 18,691 | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,691 | | | | | | | Robert P. Fishman | | | | | 4,766 | | | | | | — | | | | | | 30,170 | | | | | | — | | | | | | 34,936 | | | | | | | T. Michael Glenn | | | | | 29,893 | | | | | | 1,915 | | | | | | 18,070 | | | | | | — | | | | | | 49,878 | | | | | | | Theodore L. Harris | | | | | 11,024 | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,024 | | | | | | | David A. Jones | | | | | 23,081 | | | | | | 55,035 | | | | | | 18,070 | | | | | | — | | | | | | 96,186 | | | | | | | Gregory E. Knight | | | | | 4,147 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,147 | | | | | | | Jerome O. Pedretti | | | | | 23,974 | | | | | | 3,891 | | | | | | 40,424 | | | | | | — | | | | | | 68,289 | | | | | | | Karla C. Robertson | | | | | 44,513 | | | | | | 1,429 | | | | | | 70,851 | | | | | | — | | | | | | 116,793 | | | | | | | Michael T. Speetzen | | | | | 11,024 | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,024 | | | | | | | John L. Stauch | | | | | 318,964 | | | | | | 284,600 | | | | | | 553,967 | | | | | | 918 | | | | | | 1,158,449 | | | | | | | Billie I. Williamson | | | | | 17,624 | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,624 | | | | | | | Directors and executive officers as a group (18) | | | | | 584,906 | | | | | | 365,426 | | | | | | 859,692 | | | | | | 1,589 | | | | | | 1,811,613 | | | | 1.10% | | | The Vanguard Group(5) | | | | | 19,553,998 | | | | | | — | | | | | | — | | | | | | — | | | | | | 19,553,998 | | | | 11.86% | | | BlackRock, Inc.(6) | | | | | 14,472,207 | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,472,207 | | | | 8.77% | | | Impax Asset Management Group plc(7) | | | | | 11,854,729 | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,854,729 | | | | 7.19% | | | State Street Corporation(8) | | | | | 11,478,589 | | | | | | — | | | | | | — | | | | | | — | | | | | | 11,478,589 | | | | 6.96% | |
| | | | | | | | | | | | | | | | | | | | | Name of Beneficial Owner | Common Stock(1) | Share Units(2) | Right to Acquire within 60 days | RSIP Stock(3) | Total | % of Class(4) | Mona Abutaleb | 12,293 | | — | | — | | — | | 12,293 | | | Melissa Barra | 3,434 | | — | | — | | — | | 3,434 | | | Adrian C. Chiu | 8,312 | | 5,724 | | 37,033 | | 419 | | 51,488 | | | Tracey C. Doi | — | | — | | — | | — | | — | | | Robert P. Fishman | 47,552 | | — | | 59,863 | | — | | 107,415 | | | T. Michael Glenn | 31,895 | | 1,941 | | 15,810 | | — | | 49,646 | | | Theodore L. Harris | 13,057 | | — | | — | | — | | 13,057 | | | Tanya L. Hooper | 928 | | — | | 4,200 | | — | | 5,128 | | | David A. Jones | 25,016 | | 55,787 | | 15,810 | | — | | 96,613 | | | Gregory E. Knight | 6,198 | | — | | — | | — | | 6,198 | | | Jerome O. Pedretti | 38,538 | | 2,597 | | 59,130 | | — | | 100,265 | | | Michael T. Speetzen | 13,022 | | — | | — | | — | | 13,022 | | | John L. Stauch | 326,603 | | 389,887 | | 619,249 | | 931 | | 1,336,670 | | | Billie I. Williamson | 19,626 | | — | | — | | — | | 19,626 | | | Directors and executive officers as a group (18) | 650,485 | | 483,490 | | 1,010,102 | | 1,611 | | 2,145,688 | | 1.28 | % | The Vanguard Group(5) | 19,916,751 | | — | | — | | — | | 19,916,751 | | 12.00 | % | BlackRock, Inc.(6) | 16,648,354 | | — | | — | | — | | 16,648,354 | | 10.03 | % | State Street Corporation(7) | 9,209,527 | | — | | — | | — | | 9,209,527 | | 5.55 | % |
(1)
Unless otherwise noted, all shares are held either directly or indirectly by individuals possessing sole voting and investment power with respect to such shares. Beneficial ownership of an immaterial number of shares held by spouses or trusts has been disclaimed in some instances.
(2)
Represents for non-employee directors deferred share units held under our Compensation Plan for Non-Employee Directors. No director has voting or investment power related to these share units. Represents for executive officers restricted stock units, receipt of which was deferred by the executive officer under the company’s Non-Qualified Deferred Compensation Plan and over which the executive officers have no voting or investment power.
(3)
Represents shares owned as a participant in the RSIP. As of March 10, 2023,8, 2024, Fidelity Management Trust Company (“Fidelity”), the Trustee of the RSIP, held 662,300599,473 ordinary shares (0.4%). Fidelity disclaims beneficial ownership of all shares. The RSIP participants have the right to direct the Trustee to vote their shares, although participants have no investment power over such shares. The Trustee does not vote the shares for which it has received no direction from participants.
(4)
Less than 1% unless otherwise indicated.
(5)
Information derived from a Schedule 13G/A filed with the SEC on February 9, 2023.13, 2024. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355. As of December 31, 2022,2023, The Vanguard Group had shared voting power for 217,850206,753 ordinary shares, sole dispositive power for 18,904,87419,218,978 ordinary shares and shared dispositive power for 649,124697,773 ordinary shares. | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Ownership of Pentair Stock |
(6)
Information derived from a Schedule 13G/A filed with the SEC on January 27, 2023.24, 2024. The address of BlackRock, Inc. is 55 East 52nd Street,50 Hudson Yards, New York, NY 10055.10001. As of December 31, 2022,2023, BlackRock, Inc. had sole voting power for 13,105,13615,328,961 ordinary shares and sole dispositive power for 14,472,20716,648,354 ordinary shares.
(7)
Information derived from a Schedule 13G filed with the SEC on February 13, 2023. The address of Impax Asset Management Group plc is 7th Floor, 30 Panton Street, London SW1Y 4AJ. As of December 31, 2022, Impax Asset Management Group plc had sole voting power for 11,854,729 ordinary shares and sole dispositive power for 11,854,729 ordinary shares.
(8)
Information derived from a Schedule 13G/A filed with the SEC on February 10, 2023.January 29, 2024. The address of State Street Corporation is State Street Financial Center, One Lincoln1 Congress Street, Suite 1, Boston, MA 02111.02114. As of December 31, 2022,2023, State Street Corporation had shared voting power for 10,329,9136,091,085 ordinary shares and shared dispositive power for 11,476,8629,196,811 ordinary shares.
Delinquent Section 16(a) Report Our executive officers, directors and 10% shareholders are required under the Securities and Exchange Act of 1934 to file reports of ownership and changes in ownership with the Securities and Exchange Commission and furnish copies of these reports to us. We have reviewedreceived copies of reports furnished to us, or written representations that no reports were required. Based solely on these reports, we believe that during 20222023 our executive officers and directors complied with all such filing requirements.filings requirements, except that one report on Form 4 for Mr. Stauch was inadvertently filed late in 2023 to report the transfer of shares from an existing spousal trust to a new spousal trust. | | | | | | | | | 78 | | Pentair | 2024 Proxy Statement |
QUESTIONS AND ANSWERS ABOUT THE ANNUAL GENERAL MEETING AND VOTING
| | | | | | | Questions and Answers about the Annual General Meeting and Voting |
Why did I receive these proxy materials? We are providing these proxy materials to you because our Board of Directors is soliciting proxies for use at our Annual General Meeting to be held on May 9, 2023.7, 2024. We either (i) mailed you a Notice of Internet Availability of Proxy Materials on or before March 24, 202322, 2024 notifying each shareholder entitled to vote at the Annual General Meeting how to vote and how to electronically access a copy of this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 20222023 or (ii) mailed you a printed copy of such proxy materials and a proxy card in paper format. You received these proxy materials because you were a shareholder of record as of the close of business on March 10, 2023.8, 2024. If you received a Notice of Internet Availability of Proxy Materials and would like to receive a printed copy of our proxy materials, including a proxy card in paper format on which you may submit your vote by mail, you should follow the instructions for requesting such proxy materials in the Notice of Internet Availability of Proxy Materials. This Proxy Statement, our Annual Report on Form 10-K for the fiscal year ended December 31, 20222023 and our Irish Statutory Financial Statements and directors’ and auditors’ reports are available online at www.proxyvote.com. What is a proxy? A proxy is your legal designation of another person (the “proxy”) to vote on your behalf. By voting your proxy, you are giving the persons named on the proxy card the authority to vote your shares in the manner you indicate on your proxy card. You may vote your proxy by telephone or over the Internet as directed in the Notice of Internet Availability of Proxy Materials or, if you have requested or received a proxy card, by signing and dating the proxy card and submitting it by mail. What is the difference between a shareholder of record and a beneficial owner? If your shares are registered directly in your name with Computershare Trust Company, N.A., our transfer agent, you are a “shareholder of record.” If your shares are held in a stock brokerage account or by a bank or other custodian or nominee, you are considered the beneficial owner of shares held in “street name.” As a beneficial owner, you have the right to direct your broker, bank or other custodian or nominee on how to vote your shares. Who is entitled to vote at the Annual General Meeting and how many votes do I have? The Board has set the close of business on March 10, 20238, 2024 (Eastern Standard Time) as the record date for the Annual General Meeting. At the close of business on the record date, we had 164,940,204166,016,097 ordinary shares issued and outstanding and entitled to vote. All shareholders of record at the close of business on the record date are entitled to vote on the matters set forth in this Proxy Statement and any other matter properly presented at the Annual General Meeting. Beneficial owners whose banks, brokers or other custodians or nominees are shareholders registered in our share register with respect to the beneficial owners’ shares at the close of business on the record date are entitled to vote on the matters set forth in this Proxy Statement and any other matter properly presented at the Annual General Meeting. Each ordinary share is entitled to one vote on each matter properly brought before the Annual General Meeting. How do I vote if I am a shareholder of record? If you are a shareholder of record of ordinary shares, you can vote in the following ways: ▶u
By Internet: You can vote over the Internet at www.proxyvote.com. For more information, follow the instructions in the Notice of Internet Availability of Proxy Materials or on the proxy card.
▶u
By Telephone: You can vote by telephone from the United States or Canada by calling the telephone number in the Notice of Internet Availability of Proxy Materials or on the proxy card.
▶u
By Mail: You can vote by mail by marking, signing and dating your proxy card (or proxy form set out in section 184 of the Companies Act 2014)Act) or voting instruction form and returning it in the postage-paid envelope, the results of which will be forwarded to Pentair plc’s registered address in Ireland electronically. For more information, follow the instructions in the Notice of Internet Availability of Proxy Materials or on the proxy card. | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Questions and Answers about the Annual General Meeting and Voting |
Pentair plc 77u
QUESTIONS AND ANSWERS ABOUT THE ANNUAL GENERAL MEETING AND VOTING
▶
At the Annual General Meeting: If you plan to attend the Annual General Meeting and wish to vote your ordinary shares in person, we will give you a ballot at the meeting.
How do I vote if I am a beneficial owner? If you are a beneficial owner of ordinary shares, you can vote in the following ways: ▶u
General: You can vote by following the materials and instructions provided by your bank, broker or other custodian or nominee.
▶u
At the Annual General Meeting: If you plan to attend the Annual General Meeting and wish to vote your ordinary shares in person, then you must obtain a legal proxy, executed in your favor, from the shareholder of record of your shares (i.e., your broker, bank or other custodian or nominee) and bring it to the Annual General Meeting.
What is the deadline to vote my shares if I do not vote in person at the Annual General Meeting? If you are a shareholder of record, you may vote by Internet or by telephone until 4:59 a.m. (British Summer Time) on May 8, 20236, 2024 (11:59 p.m. Eastern Daylight Time on May 7, 2023)5, 2024). If you are a shareholder of record and submit a proxy card, the proxy card must be received at the address stated on the proxy card by 4:59 a.m. (British Summer Time) on May 8, 20236, 2024 (11:59 p.m. Eastern Daylight Time on May 7, 2023)5, 2024). If you are a beneficial owner, please follow the voting instructions provided by your bank, broker or other custodian or nominee. If you are a current or former employee voting shares held under the retirement plans or the employee stock purchase plan, you may vote with respect to these plan shares until 4:59 a.m. (British Summer Time) on May 2, 2024 (11:59 p.m. Eastern Daylight Time on May 1, 2024). How do I attend the Annual General Meeting? All shareholders of record as of the close of business on the record date are invited to attend and vote at the Annual General Meeting. For admission to the Annual General Meeting, shareholders should bring a form of photo identification to the shareholders check-in area at the meeting, where their ownership will be verified. Those who beneficially own shares should also bring account statements or letters from their banks, brokers or other custodians or nominees confirming that they own our ordinary shares as of March 10, 20238, 2024 (see above for further information if you also intend to vote at the Annual General Meeting). Registration will begin at 6:30 a.m. (British Summer Time) and the Annual General Meeting will begin at 7:00 a.m. (British Summer Time) on May 9, 2023. 7, 2024.Shareholders in Ireland may participate in the Annual General Meeting by audio link at the offices of Arthur Cox LLP at Ten Earlsfort Terrace, Dublin 2, D02 T380, Ireland at 7:00 a.m. (Irish Standard Time), on May 7, 2024, and the requirements for admission to the Annual General Meeting, as set out above, apply. What constitutes a quorum for the Annual General Meeting? Our Articles of Association provide that all resolutions made at a shareholders’ meeting require the presence, in person or by proxy, of a majority of all shares entitled to vote. Abstentions and broker non-votes will be regarded as present for purposes of establishing the quorum. May I change or revoke my proxy? If you are a shareholder of record and have already voted, you may change or revoke your proxy before it is exercised at the Annual General Meeting in the following ways: ▶u
By voting by Internet or telephone at a date later than your previous vote but prior to the voting deadline (which is 4:59 a.m. (British Summer Time) on May 8, 2023 (11:59 p.m. Eastern Daylight Time on May 7, 2023)(described above);
▶u
By mailing a proxy card (in the form mailed to you or in the form set out in section 184 of the Irish Companies Act 2014)Act) that is properly signed and dated later than your previous vote and that is received by us prior to the voting deadline (which is 4:59 a.m. (British Summer Time) on May 8, 2023 (11:59 p.m. Eastern Daylight Time on May 7, 2023)(described above); or
▶u
By attending the Annual General Meeting and voting in person, although attendance at the Annual General Meeting will not, by itself, revoke a proxy.
If you are a beneficial owner, you must contact the record holder of your shares to revoke a previously authorized proxy or voting instructions.
| | | | | | | | | 80 | | Pentair | 2024 Proxy Statement |
| | | | | | | Questions and Answers about the Annual General Meeting and Voting |
What is the effect of broker non-votes and abstentions? A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular agenda item because the broker does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Although brokers have discretionary power to vote your shares with respect to “routine” matters, they do not have discretionary power to vote your shares on “non-routine” matters pursuant to NYSE rules. If you do
QUESTIONS AND ANSWERS ABOUT THE ANNUAL GENERAL MEETING AND VOTING
not provide voting instructions for proposals considered “non- routine,” a “broker non-vote” occurs. The chart below summarizes which proposals we believe are routine and non-routine under the NYSE rules and therefore whether brokers have discretion to vote. Ordinary shares owned by shareholders electing to abstain from voting on any of the proposals will have no effect on any of the proposals. How will my shares be voted if I do not specify how they should be voted? If you submit a proxy to the company-designated proxy holders and do not provide specific voting instructions, you instruct the company-designated proxy holders to vote your shares in accordance with the recommendations of the Board as set forth in the chart below. If your shares are held in the Pentair, Inc. Retirement Savings and Stock Incentive Plan or the Pentair, Inc. Non-Qualified Deferred Compensation Plan and you either (1) submit a proxy but do not provide specific voting instructions or (2) do not submit a proxy, then your shares will not be voted. How will voting on any other business be conducted? Other than matters incidental to the conduct of the Annual General Meeting and those set forth in this Proxy Statement, we do not know of any business or proposals to be considered at the Annual General Meeting. If any other business is proposed and properly presented at the Annual General Meeting, you instruct the company-designated proxy holders, in the absence of other specific instructions or the appointment of other proxy holders by you, to vote your shares in accordance with the recommendations of the Board. The following chart describes the proposals to be considered at the meeting, the vote required to elect directors and to adopt each other proposal, and the manner in which votes will be counted:
| | | | | | | | | | | | | | | Proposal | Proposal | | | Voting Options | | | Vote Required to
Adopt the Proposal | Broker Discretion | | | Broker Discretion | | | Effect of
Abstentions
and Broker
Non-Voting | | | Re-Elect Director Nominees | | | For, against, or abstain on each nominee | | | Majority of votes cast | | | No broker discretion to vote | | | No effect | | | Approve, by Nonbinding, Advisory Vote, the Compensation of the Named Executive Officers | | | For, against, or abstain | | | Majority of votes cast | | | No broker discretion to vote | | | No effect | | | Approve, by Nonbinding, Advisory Vote, the Frequency of Future Advisory Votes on the Compensation of the Named Executive Officers | | | 1 Year, 2 Years, 3 Years or abstain | | | Alternative receiving greatest number of votes | | | No broker discretion to vote | | | No effect | | | Ratify, by Nonbinding, Advisory Vote, the Appointment of the Independent Auditor and Authorize, by Binding Vote, the Audit and Finance Committee to Set the Auditor’s Remuneration | | | For, against, or abstain | | | Majority of votes cast | | | Brokers have discretion to vote | | | No effect | | | Authorize the Board of Directors to Allot New Shares | | | For, against, or abstain | | | Majority of votes cast | | | Brokers have discretion to vote | | | No effect | | | Authorize the Board of Directors to Opt-Out of Statutory Preemption Rights | | | For, against, or abstain | | | 75% of votes cast | | | Brokers have discretion to vote | | | No effect | | | Authorize the Price Range at which Pentair Can Re-allot Treasury Shares | | | For, against, or abstain | | | 75% of votes cast | | | Brokers have discretion to vote | | | No effect | |
| | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Questions and Answers about the Annual General Meeting and Voting |
Who will count the votes? A representative from The Carideo Group, Inc. will count the votes and serve as our Inspector of Election. Who will pay for the cost of this proxy solicitation? We will pay the costs of soliciting proxies sought by the Board. Proxies may be solicited on our behalf by our directors, officers or employees telephonically, electronically or by other means of communication. We have engaged Morrow Sodali LLC to assist us in the solicitation of proxies at a cost to us of $10,000,$11,000, plus
QUESTIONS AND ANSWERS ABOUT THE ANNUAL GENERAL MEETING AND VOTING
out-of-pocket expenses. We have requested that banks, brokers and other custodians and nominees who hold ordinary shares on behalf of beneficial owners forward soliciting materials to those beneficial owners. Upon request, we will reimburse banks, brokers and other custodians and nominees for reasonable expenses incurred by them in forwarding these soliciting materials to beneficial owners of our ordinary shares. Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials? As explained in more detail below, we are using the “notice and access” system adopted by the SEC relating to the delivery of our proxy materials over the Internet. As a result, we mailed to our shareholders of record a notice about the Internet availability of the proxy materials instead of a paper copy of the proxy materials. Shareholders who received the notice will have the ability to access the proxy materials over the Internet and to request a paper copy of the proxy materials by mail, e-mail or telephone. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found on the notice. In addition, the notice contains instructions on how shareholders may request proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. The Notice of Internet Availability of Proxy Materials also serves as a Notice of Meeting. What are the “notice and access” rules and how do they affect the delivery of the proxy materials? The SEC’s notice and access rules allow us to deliver proxy materials to our shareholders by posting the materials on an Internet website, notifying shareholders of the availability of the proxy materials on the Internet, and sending paper copies of proxy materials upon shareholder request. We believe that the notice and access rules allow us to use Internet technology that many shareholders prefer, continue to provide our shareholders with the information that they need, and, at the same time, ensure more prompt delivery of the proxy materials. The notice and access rules also lower our cost of printing and delivering the proxy materials and minimize the environmental impact of printing paper copies. Why did I receive more than one Notice of Internet Availability of Proxy Materials or proxy card? You may have received multiple Notices of Internet Availability of Proxy Materials or proxy cards if you hold your shares in different ways or accounts (for example, 401(k) accounts, joint tenancy, trusts, custodial accounts) or in multiple accounts. If you are the beneficial owner of shares held in “street name,” you will receive your voting information from your bank, broker or other custodian or nominee, and you will vote as indicated in the materials you receive from your bank, broker or other custodian or nominee. You should vote your proxy for each separate account you have. | | | | | | | | | 82 | | Pentair | 2024 Proxy Statement |
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE 2024 ANNUAL GENERAL MEETING OF SHAREHOLDERS
| | | | | | | Shareholder Proposals and Nominations for the 2025 Annual General Meeting of Shareholders |
Rule 14a-8 Proposals: The deadline for submitting a shareholder proposal for inclusion in our proxy materials for our 20242025 Annual General Meeting pursuant to SEC Rule 14a-8 is November 25, 2023.22, 2024. Any such proposal must meet the requirements set forth in the rules and regulations of the SEC, including Rule 14a-8, for such proposals to be eligible for inclusion in our Proxy Statement and form of proxy for our 20242025 Annual General Meeting. Nomination of Directors Pursuant to Proxy Access Provisions: Eligible shareholders may under certain circumstances be able to nominate and include in our proxy materials a specified number of candidates for election as directors under the proxy access provisions of our Articles of Association. Among other requirements in our Articles of Association, to nominate a director under the proxy access provisions of our Articles of Association, a shareholder must give written notice to our Corporate Secretary that complies with our Articles of Association no earlier than 150 days and no later than 120 days prior to the first anniversary of the date our definitive Proxy Statement was released to shareholders in connection with the prior year’s Annual General Meeting. Accordingly, we must receive notice of a shareholder’s nomination for the 20232025 Annual General Meeting pursuant to the proxy access provisions of our Articles of Association no earlier than October 26, 202323, 2024 and no later than November 25, 2023.22, 2024. If the notice is received outside of that time frame, then the notice will be considered untimely and we are not required to include the nominees in our proxy materials for the 20242025 Annual General Meeting. Advance Notice Proposals and Director Nominations: A shareholder who intends to present business, other than a shareholder proposal pursuant to Rule 14a-8, or to nominate a director, other than pursuant to the proxy access provisions of our Articles of Association, at the 20242025 Annual General Meeting must comply with the requirements set forth in our Articles of Association. Among other requirements in our Articles of Association, to present business or nominate a director at an Annual General Meeting, a shareholder must give written notice that complies with the Articles of Association to our Corporate Secretary no earlier than 70 days and no later than 45 days prior to the first anniversary of the date our Proxy Statement was released to shareholders in connection with the prior year’s Annual General Meeting. Accordingly, we must receive notice of a shareholder’s intent to present business, other than pursuant to SEC Rule 14a-8, or to nominate a director, other than pursuant to the proxy access provisions of our Articles of Association, no earlier than January 14, 20246, 2025 and no later than February 8, 2024.10, 2025. If the notice is received outside of that time frame, then the notice will be considered untimely and we are not required to present such proposal or nomination at the 20242025 Annual General Meeting. If the Board chooses to present a matter of business submitted under our Articles of Association at the 20242025 Annual General Meeting, then the persons named in the proxies solicited by the Board for the 20242025 Annual General Meeting may exercise discretionary voting power with respect to such proposal. In addition to satisfying the foregoing requirements, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Board’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934 no later than March 10, 2024.2025. Send Notices to: Shareholder proposals or nominations pursuant to any of the foregoing should be sent to us at our offices: Pentair plc, 10 Earlsfort Terrace, Dublin 2, D02 T380, Ireland, Attention: Corporate Secretary. Access to our Articles of Association: Our Articles of Association can be found on the website of the U.S. Securities and Exchange Commission by searching its EDGAR archives athttps://www.sec.gov/www.sec.gov/edgar/searchedgar/webusers.htm. Shareholders may also obtain a copy from us free of charge by submitting a written request to our principal executive offices at Pentair plc, Regal House, 70 London Road, Twickenham, London, TW1 3QS, United Kingdom, Attention: Corporate Secretary. | | | | | | | | | 2024 Proxy Statement | Pentair |
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IRISH DISCLOSURE OF SHAREHOLDER INTERESTS
| | | | | | | Irish Disclosure of Shareholder Interests |
Under the Irish Companies Act, 2014, our shareholders must notify us if, as a result of a transaction, the shareholder will become interested in 3% or more of our shares, or if as a result of a transaction, a shareholder who was interested in more than 3% of our shares ceases to be so interested. Where a shareholder is interested in more than 3% of our shares, the shareholder must notify us of any alteration of his or her interest that brings his or her total holding through the nearest whole percentage number, whether an increase or a reduction. The relevant percentage figure is calculated by reference to the aggregate nominal value of the shares in which the shareholder is interested as a proportion of the entire nominal value of our issued share capital (or any such class of share capital in issue), and disclosable interests in our shares include any interests in our shares of any kind whatsoever. Where the percentage level of the shareholder’s interest does not amount to a whole percentage this figure may be rounded down to the next whole number. We must be notified within five business days of the transaction or alteration of the shareholder’s interests that gave rise to the notification requirement. If a shareholder fails to comply with these notification requirements, the shareholder’s rights in respect of any of our ordinary shares it holds will not be enforceable, either directly or indirectly. However, such person may apply to the court to have the rights attaching to such shares reinstated. | | | | | | | | | 84 | | Pentair | 2024 Proxy Statement |
2022 ANNUAL REPORT ON FORM 10-K
| | | | | | | 2023 Annual Report on Form 10-K |
Any shareholder wishing to review, without charge, a copy of our 20222023 Annual Report on Form 10-K (without exhibits) filed with the SEC should write to us at our principal executive offices at Pentair plc, Regal House, 70 London Road, Twickenham, London, TW1 3QS,United Kingdom, Attention: Corporate Secretary. REDUCE DUPLICATE MAILINGS | | | | | | | | | 2024 Proxy Statement | Pentair |
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| | | | | | | Reduce Duplicate Mailings |
To reduce duplicate mailings, we are now sending only one copy of our Notice of Internet Availability of Proxy Materials or Annual Report to Shareholders and Proxy Statement, as applicable, to multiple shareholders sharing an address unless we receive contrary instructions from one or more of the shareholders. Upon written request, we will promptly deliver a separate copy of these documents to a shareholder at a shared address. If you wish to receive separate copies of these documents, please notify us by writing at Pentair plc, Regal House, 70 London Road, Twickenham, London, TW1 3QS, United Kingdom, Attention: Corporate Secretary.Secretary, or by telephone at +44 74 9421 6154. If you are receiving duplicate mailings, you may authorize us to discontinue mailings of multiple Notices of Internet Availability of Proxy Materials or Annual Reports to Shareholders and Proxy Statements, as applicable. To discontinue duplicate mailings, notify us by writing at Pentair plc, Regal House, 70 London Road, Twickenham, London, TW1 3QS, United Kingdom, Attention: Corporate Secretary. | | | | | | | | | 86 | | Pentair | 2024 Proxy Statement |
APPENDIX A
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
PENTAIR PLC AND SUBSIDIARIES RECONCILIATION OF THE GAAP YEARS ENDED DECEMBER 31, 2023, 2022, 2021, and 2020 and 2019 TO THE NON-GAAP EXCLUDING THE EFFECT OF 2023, 2022, 2021, 2020, and 20192020 ADJUSTMENTS (UNAUDITED) | | | | | | | | | | | | | | | | | | | | | | | | In millions, except per-share data | 2023 | | 2022 | | 2021 | | 2020 | Net sales | $ | 4,104.5 | | | $ | 4,121.8 | | | $ | 3,764.8 | | | $ | 3,017.8 | | Operating income | 739.2 | | | 595.3 | | | 636.9 | | | 461.4 | | Return on sales | 18.0 | % | | 14.4 | % | | 16.9 | % | | 15.3 | % | Adjustments: | | | | | | | | Restructuring and other | 3.4 | | | 32.4 | | | 7.5 | | | 15.4 | | Transformation costs | 44.3 | | | 27.2 | | | 11.7 | | | — | | Intangible amortization | 55.3 | | | 52.5 | | | 26.3 | | | 28.4 | | Legal accrual adjustments and settlements | 2.2 | | | 0.2 | | | (7.6) | | | — | | Asset impairment and write-offs | 7.9 | | | 25.6 | | | — | | | — | | Inventory step-up | — | | | 5.8 | | | 2.3 | | | — | | Deal-related costs and expenses | — | | | 22.2 | | | 7.9 | | | 0.6 | | Russia business exit impact | — | | | 4.7 | | | — | | | — | | COVID-19 related costs and expenses | — | | | — | | | 0.6 | | | 10.4 | | Equity income of unconsolidated subsidiaries | 2.8 | | | 1.8 | | | 0.3 | | | 1.4 | | Segment income | 855.1 | | | 767.7 | | | 685.9 | | | 517.6 | | Adjusted return on sales | 20.8 | % | | 18.6 | % | | 18.2 | % | | 17.2 | % | Net income from continuing operations—as reported | 622.9 | | | 483.2 | | | 556.0 | | | 357.1 | | (Gain) loss on sale of businesses | — | | | (0.2) | | | (1.4) | | | 0.1 | | Pension and other post-retirement mark-to-market loss (gain) | 6.1 | | | (17.5) | | | (2.4) | | | 6.7 | | Amortization of bridge financing fees | — | | | 9.0 | | | — | | | — | | Other income | (5.1) | | | — | | | (0.3) | | | (2.2) | | Adjustments to operating income | 113.1 | | | 170.6 | | | 48.7 | | | 54.8 | | Income tax adjustments (1) | (112.8) | | | (35.9) | | | (30.2) | | | 2.7 | | Net income from continuing operations—as adjusted | $ | 624.2 | | | $ | 609.2 | | | $ | 570.4 | | | $ | 419.2 | | Continuing earnings per ordinary share—diluted | | | | | | | | Diluted earnings per ordinary share—as reported | $ | 3.75 | | | $ | 2.92 | | | $ | 3.32 | | | $ | 2.13 | | Adjustments | — | | | 0.76 | | | 0.08 | | | 0.37 | | Diluted earnings per ordinary share—as adjusted | $ | 3.75 | | | $ | 3.68 | | | $ | 3.40 | | | $ | 2.50 | |
(1)Income tax adjustments for the year ended December 31, 2023 include $74.3 million resulting from favorable impacts of worthless stock deductions related to exiting certain businesses in our Water Solutions segment and favorable discrete items primarily related to the recognition of deferred tax assets. | In millions, except per-share data | | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | Net sales | | | | $ | 4,121.8 | | | | | $ | 3,764.8 | | | | | $ | 3,017.8 | | | | | $ | 2,957.2 | | | | Operating income | | | | | 595.3 | | | | | | 636.9 | | | | | | 461.4 | | | | | | 432.5 | | | | % of net sales | | | | | 14.4% | | | | | | 16.9% | | | | | | 15.3% | | | | | | 14.6% | | | | Adjustments: | | | | | | | | | | | | | | | | | | | | | | | | | | | Restructuring and other | | | | | 32.4 | | | | | | 7.5 | | | | | | 15.4 | | | | | | 21.0 | | | | Transformation costs | | | | | 27.2 | | | | | | 11.7 | | | | | | — | | | | | | — | | | | Intangible amortization | | | | | 52.5 | | | | | | 26.3 | | | | | | 28.4 | | | | | | 31.7 | | | | Legal accrual adjustments and settlements | | | | | 0.2 | | | | | | (7.6) | | | | | | — | | | | | | — | | | | Asset impairment and write-offs | | | | | 25.6 | | | | | | — | | | | | | — | | | | | | 21.2 | | | | Inventory step-up | | | | | 5.8 | | | | | | 2.3 | | | | | | — | | | | | | 2.2 | | | | Deal related costs and expenses | | | | | 22.2 | | | | | | 7.9 | | | | | | 0.6 | | | | | | 4.2 | | | | Russia business exit impact | | | | | 4.7 | | | | | | — | | | | | | — | | | | | | — | | | | COVID-19 related costs and expenses | | | | | — | | | | | | 0.6 | | | | | | 10.4 | | | | | | — | | | | Equity income of unconsolidated subsidiaries | | | | | 1.8 | | | | | | 0.3 | | | | | | 1.4 | | | | | | 3.5 | | | | Segment income | | | | | 767.7 | | | | | | 685.9 | | | | | | 517.6 | | | | | | 516.3 | | | | Return on sales | | | | | 18.6% | | | | | | 18.2% | | | | | | 17.2% | | | | | | 17.5% | | | | Net income from continuing operations — as reported | | | | | 483.2 | | | | | | 556.0 | | | | | | 357.1 | | | | | | 361.7 | | | | (Gain)
loss on sale of businesses | | | | | (0.2) | | | | | | (1.4) | | | | | | 0.1 | | | | | | (2.2) | | | | Pension and other post-retirement mark-to-market (gain) loss | | | | | (17.5) | | | | | | (2.4) | | | | | | 6.7 | | | | | | (3.4) | | | | Amortization of bridge financing fees | | | | | 9.0 | | | | | | — | | | | | | — | | | | | | — | | | | Other income | | | | | — | | | | | | (0.3) | | | | | | (2.2) | | | | | | — | | | | Adjustments to operating income | | | | | 170.6 | | | | | | 48.7 | | | | | | 54.8 | | | | | | 80.3 | | | | Income tax adjustments | | | | | (35.9) | | | | | | (30.2) | | | | | | 2.7 | | | | | | (31.4) | | | | Net income from continuing operations — as adjusted | | | | $ | 609.2 | | | | | $ | 570.4 | | | | | $ | 419.2 | | | | | $ | 405.0 | | | | Continuing earnings per ordinary share — diluted | | | | | | | | | | | | | | | | | | | | | | | | | | | Diluted earnings per ordinary share — as reported | | | | $ | 2.92 | | | | | $ | 3.32 | | | | | $ | 2.13 | | | | | $ | 2.12 | | | | Adjustments | | | | | 0.76 | | | | | | 0.08 | | | | | | 0.37 | | | | | | 0.26 | | | | Diluted earnings per ordinary share — as adjusted | | | | $ | 3.68 | | | | | $ | 3.40 | | | | | $ | 2.50 | | | | | $ | 2.38 | | |
| | | | | | | | | 2024 Proxy Statement | Pentair |
| A-1 |
PENTAIR PLC AND SUBSIDIARIES FREE CASH FLOW FOR YEARS ENDED DECEMBER 31, 2023, 2022, 2021, 2020, and 20192020 | In millions | | | 2022 | | | 2021 | | | 2020 | | | 2019 | | | Net cash provided by operating activities of continuing operations | | | | $ | 364.3 | | | | | $ | 613.6 | | | | | $ | 574.2 | | | | | $ | 345.2 | | | | Capital expenditures | | | | | (85.2) | | | | | | (60.2) | | | | | | (62.2) | | | | | | (58.5) | | | | Proceeds from sale of property and equipment | | | | | 4.1 | | | | | | 3.9 | | | | | | 0.1 | | | | | | 0.6 | | | | Free cash flow from continuing operations | | | | $ | 283.2 | | | | | $ | 557.3 | | | | | $ | 512.1 | | | | | $ | 287.3 | | |
| | | | | | | | | | | | | | | | | | | | | | | | In millions | 2023 | | 2022 | | 2021 | | 2020 | Net cash provided by operating activities of continuing operations | $ | 620.8 | | | $ | 364.3 | | | $ | 613.6 | | | $ | 574.2 | | Capital expenditures | (76.0) | | | (85.2) | | | (60.2) | | | (62.2) | | Proceeds from sale of property and equipment | 5.6 | | 4.1 | | 3.9 | | 0.1 | Free cash flow from continuing operations | $ | 550.4 | | | $ | 283.2 | | | $ | 557.3 | | | $ | 512.1 | |
| | | | | | | | | A-2 | | Pentair | 2024 Proxy Statement |
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PENTAIRPErAtg PIC51 Sr EP:70ES MY FW.F1405b, NY 1.717 SCVOTE BY INTERNET -yen. ercarsvon• nagior scan the EtRBarccde aboveUse the hternet to transmityour Ming instructions and for electrocec delN,ery of Information. Vote by 1139 p.m. Eastern DaylightRineon May 15, 2022. Have your prosy card in hand when you access the web site and follow the instructions to obtain your records and to mate an electronicvotingirrsouction form.VOTE BY PRONE - 1400-690-6903Use any touch-tone telephone to transmit your voting Instrixtions. Vote by 11:59 p.m. Eastern Daylight Tine on May 15, 2022 Have your prosy card n hand when you call and then follow the Instuctians.VOTE BY MAILMark, Nen and date your proxy card and return it n the ()estate-paid envelope we have prodded or return it to Vote Processing, bro Broadridg,e, 51 Mercedes Way, Edgewood, NY 11717 (which Woodridge will arrange to (coward to Pentair plc's registered address). In order to assure that your proxy card b tabulated in time to be voted at the AnnualGeneral Meeting, you must return your pecan/ card at the above address by 11:59 p.m Eastern Daylight Rene on May 15, 2022.AN instruments of proxy and proxy cards should be r eceNed by 1139 ern. Eastern Daylight Time on May 15,2022.AN TOVIEW MATERIAIS & VOTEVOTE BY INTERNET -yen. ercarsvon• nagior scan the EtRBarccde aboveUse the hternet to transmityour Ming instructions and for electrocec delN,ery of Information. Vote by 1139 p.m. Eastern DaylightRineon May 15, 2022. Have your prosy card in hand when you access the web site and follow the instructions to obtain your records and to mate an electronicvotingirrsouction form.VOTE BY PRONE - 1400-690-6903Use any touch-tone telephone to transmit your voting Instrixtions. Vote by 11:59 p.m. Eastern Daylight Tine on May 15, 2022 Have your prosy card n hand when you call and then follow the Instuctians.VOTE BY MAILMark, Nen and date your proxy card and return it n the ()estate-paid envelope we have prodded or return it to Vote Processing, bro Broadridg,e, 51 Mercedes Way, Edgewood, NY 11717 (which Woodridge will arrange to (coward to Pentair plc's registered address). In order to assure that your proxy card b tabulated in time to be voted at the AnnualGeneral Meeting, you must return your pecan/ card at the above address by 11:59 p.m Eastern Daylight Rene on May 15, 2022.AN instruments of proxy and proxy cards should be r eceNed by 1139 ern. Eastern Daylight Time on May 15,2022.TO VOTE, MARK BLOC KS BELOW IN BW E OR BLACK INK AS FOLLOWS:066054-P66ga 3KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLYPENTAIR PLCThe Board of Directors reccmmends you vote FOR the following director remixesI.To reelect director nominees:For Against Abstain la. Mona Abutaldb Stephensonlb. Mekaa BarraSc, Glynis A. Bryanld.Michael Glean le. Thecdore L Harris If. David...lazes lg.Gregory L Knight M. Michae I T. Speetzen li. Bohn LStauch I. Die L Will iarrnonqD DqD DqD ❑ qD ❑ D ❑ DqD ❑ qD ❑ qD ❑ qD ❑ qD ❑TheBoardof Beaters reammends you vete FOR proposals 2,For Against Abstain3,AS and 6.To approve, by nonbind ng, advisory vote, thecornea:tatt000f the named oceative officers.To ratify, by nonbinding, advisory vote. Me appointment ofDeWitt &Touche LIP as the independe nt auditor of Pentair plc and to authorize, by bin ng vote, the Audit and Finance Committee of the Board of Directors to s et the auditor's remunerati on.To au Pyrite the Board of Dilators to allot flew shares urde r Irish law.S.To au diorite the Board of Directors to optout of statutory preemption rights under Irish law 'Special Resolution',To authorize the price range atwNrh Pentair plc can woke shares it holds as treasury shares order Irish law 'Special Resolution'.To consider and act on suds other busi nets as may property come bebre the Annual General Meeting or any adjournment.Any sharehokler entitled to attend ad vote at the An nod Genera Meeting of 9:arch:alders may appoint one or more procie• who need not be a shareeolder'sl of the Company. A prow is required to vote in accordance with any instructions given to him or her. Completion of a form of proxy war not preclude a mentor: from attending ad voting at the meeting in person.Please sign erectly as you r name's' appear's' thereon .When signing as attorney, eacutor, administrator, or other fiduciary, please give full title as su &Joint owners should each signpersonalholder must s8 1. If a corporation or partnerslip, please sign in fee corporate or par tnerslip name by at Seized officer.
Important Notice Regarding the Availability of Proxy Materials for the Annual General Meeting to be held on May 17, 2022: The Annual Report, Notice of Annual General Meeting, Proxy Statement, Irish Financial Statements and Related Reports are available at www.proxwote.com. 066055- P66843PENTAIR PLCAnnual General Meeting of ShareholdersMay 17, 2022 8:00 a.m. Local Time (BST)This proxy is solicited by the Board of Directors.The signatory, revoking any proxy heretofore given in connection with the Meeting (as defined below), hereby appoints David A. Jones, John L. Stauch, Robert P. Fishman, and Karla C. Robertson, or any of them (the "Proxies"), as proxies, each with the power to appoint his or her substitute, and hereby authorizes them to attend, speak and to vote at the Meeting, as designated on the reverse side of this 3rd, all ordinary shares of Pentair plc that the signatory is entitled to vote at the Annual General Meeting of Shareholders to be held at 8:00 a.m., bcal lime (BST), on May 17, 2022, at Claridge's, Brook Street, Mayfair, London, W1K 4HR, United Kingdom and any adjoumment or postponement thereof (the "Meeting").If you wish to appoint as proxy any other person or aersons, please contact the Corporate Secretary.If the signatory is a participant in the Pentair, Inc. Retirement Savings and Stock Incentive Plan, the Pentair, Irc. Non-Qualified Deferred Compensation Plan, and/or the nVent Managemert Company Non-Qualified Deferred Compensation Plan (the "Retirement Plans"), the signatory hereby directs Fidelity Management Trust Company as Trustee of the Retirement Plans, to vote at the Meeting, as designated on the reverse side of this card, all of the ordinary shares of Pentair plc allocated to the signatory's account in the Retirement Plans as of March 18, 2022.If the signatory is a participant in the Pentair plc Employee Stock Purchase and Bonus Plan (the "Purchase Plan"), the signatory, revoking any proxy heretofore given in connection with the Meeting, hereby appoints the Proxies, or any of them, as proxies, each with the cower to appoint his or her substitute, and hereby authorizes the Proxies to attznd and to vote at the Meeting, as designated on the reverse side of this card, all of the ordinary shares of Pentair plc allocated to the signatory's account in the Purchase Plan as of March 18, 2022.In the event of other agenda items or proposals during the Meeting on which voting is permissible under Irish law, you instruct the Proxies, in the absence of other specific instructions, to vote the shares in accordance with the Board of Directors' recommendations.This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations; provided, however, if no such direction is made regarding shares held in the Retirement Plans, this proxy will not be voted with respect to such shares.Continued and to be signed on reverse side.
0000077360 4 2022-01-01 2022-12-31
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