| | | Committee: career at IBM. Ms. Archambeau brings to the Board, among other skills and qualifications, leadership experience in technology, ecommerce, digital media and communications. Her technology and international experience uniquely positions her to advise the Board and senior management on developing and marketing software, emerging technology applications and solutions.
Ms. Archambeau has been a director of Nordstrom, Inc. since 2015 and Verizon, Inc. since December 2013. She previously served as a director of Arbitron, Inc. from 2005 to 2013 and a director of MetricStream, Inc. from 2002 to 2018.
| | | | ● Nominating and Governance Current Public Directorships: ● Okta, Inc. ● Nordstrom Inc. ● Verizon Communications, Inc. Key Qualifications & Expertise: ● Executive leadership and management experience ● Technology and e-commerce ● Developing and marketing emerging technology software applications and solutions ● Innovation, digital media and communications ● Building and scaling consumer and B2B businesses in the technology industry ● Entrepreneurial perspective ● Cybersecurity experience ● Public company board experience |  | | Amy Woods BrinkleyMs. Archambeau is the former Chief Executive Officer of MetricStream, Inc., a Silicon-Valley based global provider of governance, risk, compliance and quality management solutions to organizations across diverse
| | | | Directorindustries. She served in this role from the time she joined MetricStream in 2002 until 2018. Prior to joining MetricStream, Ms. Archambeau served as Chief Marketing Officer and Executive Vice President of Sales for Loudcloud, Inc., a provider of Internet infrastructure services; Chief Marketing Officer of NorthPoint Communications, a provider of local data network services; and President of Blockbuster, Inc.’s e-commerce division, where she launched the entertainment retailer’s first online presence. Before she joined Blockbuster, Ms. Archambeau held domestic and international executive positions during a 15-year career at IBM Corporation. Ms. Archambeau has served as director of Okta, Inc., a provider of identity management solutions, since 2018, Nordstrom, Inc., since 2015,
Independent
Age: 63
| | Committee:
Auditand Verizon Communications, Inc., since 2013.
|
Ms. Brinkley is the founder, owner and manager of AWB Consulting, LLC, which provides executive advising and risk management consulting services. Ms. Brinkley retired from Bank of America Corporation in 2009 after more than 30 years with the company. Ms. Brinkley served as its Chief Risk Officer from 2002 to 2009. Prior to 2002, she served as President of the company’s Consumer Products division and was responsible for the credit card, mortgage, consumer finance, telephone, and ecommerce businesses. During her employment at Bank of America Corporation, Ms. Brinkley also held the positions of Executive Vice President and Chief Marketing Officer overseeing the company’s Olympic sponsorship and its national rebranding and name change.
Ms. Brinkley’s background offers the Board vast experience in risk management and a broad-based knowledge of banking, financial services, and brand marketing.
Ms. Brinkley is currently a director of Carter’s Inc., TD Bank Group and TD Group US Holdings, LLC. She also serves as a director of TD Bank Group’s subsidiary, TD Bank US Holding Co. and its two subsidiaries, TD Bank and TD Bank USA, N.A. In addition, she serves as a trustee for the Princeton Theological Seminary. Ms. Brinkley previously served as a director of Atrium Health from 2001 to 2018.
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BOARD OF DIRECTORS(CONTINUED) | | | | |  
| | John F. Fort IIIAmy Woods Brinkley
| | | | Director since 1995
Independent
Age: 77
Founder, AWB Consulting, LLC | | Committees:Director Since 2015
AuditIndependent
Nominating and Governance Age 64
| | | | Committee: ● Audit Current Public Directorships: ● Carter’s, Inc. ● TD Bank Group Key Qualifications & Expertise: ● Executive leadership and management experience ● Risk management, controls, corporate governance ● Financial reporting rules and regulations and audit procedures ● Broad-based knowledge of banking and financial services ● Marketing and e-commerce ● Corporate governance ● Public company board experience | | Ms. Brinkley is the founder, owner and manager of AWB Consulting, LLC, an executive advising and risk management consulting firm. Ms. Brinkley served as Chief Risk Officer for Bank of America Corporation from
| 2002 until her retirement in 2009, after more than 30 years with the company. Prior to 2002, she served as President of the company’s Consumer Products division and was responsible for the credit card, mortgage, consumer finance, telephone, and e-commerce businesses. During her employment at Bank of America Corporation, Ms. Brinkley also held the positions of Executive Vice President and Chief Marketing Officer overseeing the company’s Olympic sponsorship and its national rebranding and name change. Ms. Brinkley has served as director of Carter’s Inc., since 2010, and TD Bank Group, since 2010. Ms. Brinkley also serves as a director of TD Bank Group’s subsidiaries: TD Group US Holdings, LLC, TD Bank US Holding Company, TD Bank, NA, and TD Bank, USA. In addition, she served as a Commissioner for Atrium Health, a non-profit hospital network from 2001 to 2019 and as a Trustee for the Princeton Theological Seminary from 2002 to 2019. |
Mr. Fort has been self-employed since 1993. Mr. Fort served as Chairman and Chief Executive Officer of Tyco International Ltd., a provider of diversified industrial products and services, from 1982 until his retirement from the company in January 1993, and served as Interim CEO of Tyco from June to September 2002 and as an advisor to Tyco’s Board of Directors from March 2003 to March 2004.
Mr. Fort’s leadership experience as the CEO of a diversified industrial company and hisin-depth knowledge of our Company gives our Board perspective on important issues, including business strategy and acquisitions.
| | | | |  
| | L. Neil HunnJohn F. Fort III
Retired Chief Executive Officer, Tyco International Ltd. | | Director since 2018Since 1995 PresidentIndependent
Age 78 | | | | Committee: ● Nominating and Governance ● Audit Key Qualifications & Expertise: ● Executive leadership and management experience ● Finance and accounting expertise ● Diversified industrial company leadership ● Global business, industry and operations experience ● Business strategy expertise ● Risk management ● Mergers and acquisitions ● In-depth knowledge of Company and its history provides valuable perspective | | Mr. Fort served as Chairman and Chief Executive Officer of Tyco International Ltd., a provider of diversified industrial products and services, from 1982 until his retirement from the company in January 1993.
| He served as Interim CEO of Tyco from June to September 2002 and as an advisor to Tyco’s Board of Directors from March 2003 to March 2004. Mr. Fort has been self-employed since 1993. Age: 47
|
Prior to being named President and Chief Executive Officer in 2018, Mr. Hunn was Executive Vice President and Chief Operating Officer since 2017 and a Group Vice President with Roper since 2011. Prior to joining Roper, Mr. Hunn held several positions in the software sector and was involved in businesses at varied stages of development. Most recently he was with MedAssets, an Atlanta-based SaaS company, where he served as Executive Vice President and CFO, as well as President of its revenue cycle technology businesses. He was previously with CMGI, an incubator of Internet businesses, and Parthenon Group, a strategy consulting firm.
Mr. Hunn’s active involvement in Roper’s operations provides our Board with specific knowledge of the business and its challenges and prospects. His understanding of the organization and its strategic focus has provided key leadership and guidance for our Company’s growth.
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BOARD OF DIRECTORS(CONTINUED) | | | | |  | | Robert D. Johnson
| | | | Director since 2005
Independent
Age: 71
| | Committee:
Compensation
|
Mr. Johnson was Chief Executive Officer of Dubai Aerospace Enterprise Ltd., a global aviation corporation, from August 2006 to December 2008. Mr. Johnson served as Chairman of Honeywell Aerospace, the aviation segment of Honeywell International Inc., from January 2005 to January 2006, and as its President and Chief Executive Officer from 1999 to 2005. Mr. Johnson worked at Honeywell’s predecessor, AlliedSignal, rising to the position of President and Chief Executive Officer of AlliedSignal Aerospace. Mr. Johnson has held management positions with AAR Corporation and GE Aircraft Engines.
Mr. Johnson brings valuable knowledge in marketing, sales and production from his diverse career experiences. His management leadership skills and his general business knowledge provide our Board with guidance in compensation and management issues.
Mr. Johnson currently serves as the Chairman of the Board of Spirit AeroSystems Holdings, Inc., and as a director of Spirit Airlines, Inc. Mr. Johnson previously served as a director of SAP Ariba, Inc. from 2005 to 2012 and Beechcraft Corp during 2013.
| | | | |  
| | Robert E. Knowling, Jr.L. Neil Hunn
| | | | Director since 2008
Independent
Age: 63
President and Chief Executive Officer, Roper Technologies, Inc. | | Committees:Director Since 2018
Compensation (Chair) Age 48
| | | | Key Qualifications & Expertise: ●Executive leadership and management experience ● Deep understanding of organization ● Software and technology expertise ● Strategic focus and planning ● Global industry and operational experience ● Mergers and acquisitions, capital markets ● Healthcare experience ● Provides key leadership and guidance for the Company’s growth ● Management development and understanding of business challenges and opportunities | | Prior to being named President and Chief Executive Officer in August 2018, Mr. Hunn served as Executive Vice President and Chief Operating Officer from 2017 to 2018. Mr. Hunn also served as Group Vice President
| of Roper’s medical segment from 2011 to 2018 and helped drive significant growth in the Company’s medical technology and application software businesses. In addition to his operating responsibilities at Roper, Mr. Hunn led the execution of the majority of the company’s capital deployment since joining Roper. Prior to joining Roper, Mr. Hunn served 10 years as Executive Vice President and Chief Financial Officer at MedAssets, an Atlanta-based SaaS company, and as President of its revenue cycle technology businesses. He successfully led MedAssets’ initial public offering and the execution of several M&A transactions. Mr. Hunn also held roles at CMGI, an incubator of Internet businesses, and Parthenon Group, a strategy consulting firm. |
Mr. Knowling is the Chairman of Eagles Landing Partners, a strategic management consulting company. From June 2005 to May 2009, Mr. Knowling served as Chief Executive Officer and director of Telwares, a leading provider of telecommunication spend management solutions. Mr. Knowling has served as the CEO of the NYC Leadership Academy, SimDesk Technologies, Inc. and Covad Communications Company.
Mr. Knowling brings a unique perspective to our Board based on his involvement in telecommunications and high-growth technology companies. He also has significant operational and management skills and insight with respect to technology matters. His experience as a director of several other public companies enables him to provide guidance on corporate governance and executive compensation issues.
Mr. Knowling is currently a director of K12 Inc. andRite-Aid, Inc. Mr. Knowling previously served as a director of Convergys Corporation from 2017 to 2018, Heidrick & Struggles International from 2000 to 2015, The Bartech Group from 2006 to 2015, Aprimo, Inc. from 2008 to 2011, and as Lead Director of SAP Ariba, Inc. from 2000 to 2012.
| | | | | 
| | Robert D. Johnson Chairman, Spirit AeroSystems Holdings, Inc. | | Director Since 2005 Independent Age 72 | | | | Committee: ● Compensation Current Public Directorships: ● Spirit AeroSystems Holdings, Inc. ● Spirit Airlines, Inc. Key Qualifications & Expertise: ● Executive leadership and management experience ● Manufacturing, supply chain, engineering and production ● Global business, industry, and operations experience ● Extensive business acumen ● Public company board experience, including governance and executive compensation expertise | | Mr. Johnson was Chief Executive Officer of Dubai Aerospace Enterprise Ltd., a global aerospace engineering and services company, from August 2006 to December 2008. Mr. Johnson also served as
| Chairman of Honeywell Aerospace, a leading global supplier of aircraft engines, equipment, systems and services, from January 2005 to January 2006, and as its President and Chief Executive Officer from 1999 to 2005. Mr. Johnson similarly served as President and Chief Executive Officer for Honeywell Aerospace’s predecessor, AlliedSignal, an aerospace, automotive and engineering company. He also held management positions with AAR Corporation, a provider of aviation and expeditionary services to the global commercial, government and defense aviation industries, and GE Aviation, an aircraft engine supplier. Mr. Johnson has served as Chairman of the Board for Spirit AeroSystems Holdings, Inc., a global leader in aerostructures design and manufacturing, since 2006 and as a director of Spirit Airlines, Inc., since 2010. |
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BOARD OF DIRECTORS(CONTINUED) | | | | |  
| | Wilbur J. PrezzanoRobert E. Knowling, Jr.
| | | | Director since 1997
Independent Chairman of the Board
Age: 78
Chairman, Eagles Landing Partners | | Committees:Director Since 2008
CompensationIndependent
Nominating and Governance Executive
Age 64 |
Mr. Prezzano retired in January 1997 from Eastman Kodak Company, a supplier of imaging material and services, as its board Vice-Chairman and as Chairman and President of its greater China region businesses. During his32-year career with Eastman Kodak Company, Mr. Prezzano served in various executive capacities and also served as a director from 1992 to 1997.
Mr. Prezzano has a strong background in management and experience in international operations. Through his service on the boards of directors of several other companies in diverse industries, Mr. Prezzano provides our Board with a broad-based understanding important to our Company’s growth and operations.
Mr. Prezzano currently serves as a director of TD Bank, NA and as a director of TD Ameritrade Holding Corporation. Mr. Prezzano formerly served as a director of TD Bank Financial Group from 2003 to 2016, EnPro Industries, Inc. from 2006 to 2014 andSnyder’s-Lance, Inc., where he served as board Chair from 2000 to 2016. | | | Committee: | | | | ● Audit Current Public Directorships: ● K12 Inc. ● Rite Aid Corporation Key Qualifications & Expertise: ● Executive leadership and management experience ● Software and high-growth technology company expertise ● Experience leading businesses through periods of high growth and organizational turnaround ● Operational and management skills and insight with respect to technology matters ● Strategic planning expertise ● Public company board experience |  | | Laura G. ThatcherSince 2009, Mr. Knowling has served as Chairman of Eagles Landing Partners, a strategic management consulting company specializing in assisting senior management formulate strategy, lead organizational
| | | | Director since 2015
Independent
Age: 63transformations, and reengineer businesses. From June 2005 to May 2009, Mr. Knowling served as Chief Executive Officer and director of Telwares Communications, a leading provider of telecommunication spend management solutions. Mr. Knowling was also the Chief Executive Officer of the New York City Leadership Academy, Chairman and Chief Executive Officer of SimDesk Technologies, Inc., a computer software company, and Chairman, President and Chief Executive Officer of Covad Communications, a provider of broadband voice and data communications.
| | Committees:
Audit
NominatingMr. Knowling has served as a director of Stream Companies, LLC, an advertising, technology, and Governance
analytics provider, since 2019, K12 Inc., an education management organization, since 2018, and Rite Aid Corporation, since 2018. In the last five years, Mr. Knowling has also served as a director of Convergys Corporation, a provider of customer management and information management products, Heidrick & Struggles International, an international executive search firm, and The Bartech Group, a recruitment outsourcing provider. |
Ms. Thatcher retired in December 2013 after 33 years of legal practice at Alston & Bird LLP, where she developed and headed the firm’s executive compensation practice for 18 years.
Ms. Thatcher’s strong legal background in corporate, securities, compensation, mergers and acquisitions, and tax law, and her experience in advising a diverse array of public companies in these areas, offer the Board a broad-based as well as technical perspective in matters of corporate governance, executive compensation, and business acquisitions.
Ms. Thatcher served on the Board of Directors of Batson-Cook Company, a regional commercial construction and development company, from 1994 to 2007. She also served on the Board of Directors of The Atlanta Legal Aid Society, Inc., anon-profit organization addressing the civil legal needs of Atlanta’s lower income, elderly and disabled residents from 2008 to 2014, and was a Past Chair of the Advisory Board of the Certified Equity Professional Institute (CEPI) of Santa Clara University.
| | | | | | | | | | |
| | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 5 |
BOARD OF DIRECTORS(CONTINUED) | | | | |  | | Richard F. Wallman
| | | | Director since 2007
Independent
Age: 68
| | Committees:
Nominating and Governance (Chair)
Executive
|
Mr. Wallman served as the Chief Financial Officer and Senior Vice President of Honeywell International Inc., a diversified industrial technology and manufacturing company, and its predecessor AlliedSignal, from March 1995 to July 2003. Mr. Wallman has also served in senior financial positions with IBM and Chrysler Corporation.
Mr. Wallman’s extensive leadership and financial background brings to our Board a significant understanding of the financial issues and risks that affect our Company. Mr. Wallman also serves on the boards of other diverse publicly held companies, which gives him a multi-industry perspective and exposure to developments and issues that impact the management and operations of a global business.
Mr. Wallman currently serves as a director of Boart Longyear Ltd., Extended Stay America, Inc., Wright Medical Group (formerly Tornier N.V.), and Charles River Laboratories International, Inc. Mr. Wallman formerly served as a director of SAP Ariba, Inc. from 2002 to 2012, Dana Incorporated from 2010 to 2013, Convergys Corporation from 2007 to 2017, and ESH Hospitality, Inc. from 2013 to 2017.
| | | | |  
| | Christopher WrightWilbur J. Prezzano
| | | | Director since 1991
Independent
Age: 61
Retired Vice-Chairman, Eastman Kodak Company | | Committees:Director Since 1997
AuditIndependent Chairman of the Board
Age 79 | | | | | | Mr. Prezzano retired in January 1997 from Eastman Kodak Company, a supplier of imaging material and services, as its board Vice-Chairman and as Chairman and President of its greater China region businesses.
| | Committee: ● Executive (Chair) ● Compensation ● Nominating and Governance Current Public Directorships: ● TD Ameritrade Holding Corporation Key Qualifications & Expertise: ●Executive leadership and management experience ● Broad-based understanding important to Company’s growth and operations ● Management development and understanding of global challenges and opportunities ● Global business, industry, manufacturing, marketing, and operations experience ● In-depth knowledge of Company and its history provides valuable perspective ● Mergers and acquisitions ● Public company board experience ● Finance and accounting expertise | During his 32-year career with Eastman Kodak Company, Mr. Prezzano worked in various executive capacities and was also a director from 1992 to 1997. Mr. Prezzano has served as a director of TD Ameritrade Holding Corporation since 2006, and TD Bank, NA, and TD Bank, USA, subsidiaries of TD Bank Group, since 2016. In the last five years, Mr. Prezzano has served as a director of TD Bank Group and Snyder’s-Lance, Inc., where he served as board Chair from 2000 to 2016. |
Mr. Wright is the Chairman of EMAlternatives LLC, a Washington, DC based private equity asset management firm focused on emerging markets and the Chairman of Yimei Capital, a Chinese investment firm. He also serves as a director of Merifin Capital Group, a private European investment firm. Untilmid-2003 he served as Chief Executive Officer for Dresdner Kleinwort Capital and was a Group Board Member of Dresdner Kleinwort Wasserstein overseeing alternative assets. He has acted as Chairman of various investment funds prior to and following the latter’s integration with Allianz S.E., and as Global Head of Private Equity at Standard Bank Group from 2006 to 2007.
Mr. Wright offers a global perspective to our Board gained from his extensive international, private equity and banking experience. He is able to provide a valuable historical perspective on the development of our Company. He also provides our Board with knowledge of current financial issues and audit matters, risks affecting international business operations, and has broad experience investing in the software and healthcare sectors.
Mr. Wright currently serves as a director of G.P. Investments Limited (Luxembourg), Spice Private Equity A.G.(Zurich), and sits on the advisory boards of various investment funds. He previously served as a director of Yatra Ltd. from 2010 to 2018. Mr. Wright is an Honorary Fellow of Corpus Christi College, Oxford.
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BOARD OF DIRECTORS(CONTINUED) | | | | | 
| | Laura G. Thatcher Retired Head of Executive Compensation Practice, Alston & Bird LLP | | Director Since 2015 Independent Age 64 | | | | Committee: ● Compensation (Chair) ● Executive ● Nominating and Governance Key Qualifications & Expertise: ● Executive compensation expertise ● Organizational development ● Senior leadership and management experience ● Corporate governance ● Mergers and acquisitions | | Ms. Thatcher retired in December 2013 after 33 years of legal practice at Alston & Bird LLP, where she developed and lead the firm’s executive compensation practice for 18 years and served as special executive
| compensation counsel to many U.S. and international publicly traded companies. Ms. Thatcher co-authored the Compensation Committee Handbook, 3rd edition (John Wiley & Sons, 2008), which serves as a guidebook for executive compensation strategies and practices, addressing a full range of functional issues facing compensation committees of public companies, including organizing, planning, compliance and sound corporate governance. Ms. Thatcher served on the Board of Directors of Batson-Cook Company, a regional commercial construction and development company, from 1994 to 2007. She also served on the Board of Directors of The Atlanta Legal Aid Society, Inc., from 2008 to 2014, and was a Past Chair of the Advisory Board of the Certified Equity Professional Institute (CEPI) of Santa Clara University and was on the Board of Review for a special project sponsored by CEPI that provided universally accepted industry guidance regarding areas of risk and appropriate controls in equity compensation. |
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BOARD OF DIRECTORS(CONTINUED) | | | | | 
| | Richard F. Wallman Retired Chief Financial Officer and Senior Vice President, Honeywell International Inc. | | Director Since 2007 Independent Age 69 | | | | Committee: ● Nominating and Governance (Chair) ● Executive Current Public Directorships: ● SmileDirectClub, Inc. ● Extended Stay America, Inc. ● Wright Medical Group N.V.(Mr. Wallman will be stepping down from his directorship upon completion of Stryker Corporation’s acquisition) ● Charles River Laboratories International, Inc. Key Qualifications & Expertise: ● Executive leadership and management experience ● Finance and accounting expertise ● Multi-industry perspective ● Global business, industry, manufacturing and operations experience ● Risk management and controls ● Management development and understanding of global challenges and opportunities ● Public company board experience | | Mr. Wallman served as the Chief Financial Officer and Senior Vice President of Honeywell International Inc., a diversified industrial technology and manufacturing company, and its predecessor AlliedSignal, Inc., from
| 1995 until his retirement in 2003. Mr. Wallman has also served in senior financial positions with IBM Corporation and Chrysler Corporation. Mr. Wallman has served as a director of SmileDirectClub, Inc., since 2019, Extended Stay America, Inc., since 2013, Charles River Laboratories International, Inc., a provider of laboratory services for the pharmaceutical, medical device and biotechnology industries, since 2011, and Wright Medical Group N.V., a global medical device company, since 2008. In the last five years, Mr. Wallman served as a director of Boart Longyear Ltd., a global mineral exploration company, Convergys Corporation, a provider of customer management and information management products, and ESH Hospitality, Inc., a lodging real estate investment trust. |
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BOARD OF DIRECTORS(CONTINUED) | | | | | 
| | Christopher Wright Former Group Management Board Member,
Dresdner Kleinwort | | Director Since 1991 Independent Age 62 | | | | Committee: ● Audit (Chair) ● Executive Current Public Directorships: ● G.P. Investments Limited (Luxembourg) ● Spice Private Equity A.G. (Zurich) Key Qualifications & Expertise: ● Executive and management experience ● Public and private company board leadership experience in the US and Europe ● Finance and accounting knowledge covering reporting rules, regulations and audit procedures ● Extensive US and international, mergers and acquisitions, private equity and banking experience ● In-depth knowledge of Company and its history provides valuable perspectives ● Broad experience investing across technology, software and healthcare sectors ● Understanding of global challenges, risk and opportunities | | Mr. Wright is a director of Merfin Capital Group, a European investment firm. He is also the Chairman of EMAlternatives LLC, a Washington, DC based private equity asset management firm and Chairman
| of Yimei Capital, in Shanghai. Until mid-2003 he served as Chief Executive Officer for Dresdner Kleinwort Capital and was a Group Board Member of Dresdner Kleinwort overseeing the bank’s alternative assets globally. He has acted as Chairman of various investment funds prior to and following the latter’s integration with Allianz S.E., and as Global Head of Private Equity at Standard Bank Limited from 2006 to 2007. Mr. Wright has served as director of G.P. Investments Limited (Luxembourg), since 2017, and of Spice Private Equity A.G. (Zurich), since 2016. He previously served as Chairman of Maxcess International Inc. until 2017, a privately-owned industrial technology company, and was a director of Yatra Ltd. (Euronext) from 2010 to 2018. Mr. Wright is a member of the Endowment Investment Committee of Corpus Christi College, Oxford; a director of the Sutton Trust, an educational charity; and a Trustee of the Oxford Philharmonic Orchestra. |
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CORPORATE GOVERNANCE Corporate Governance Guidelines Our Board is committed to maintaining high standards of ethical business conduct and sound corporate governance practices and policies. Our Corporate Governance Guidelines reflect our Board of Directors’ commitment to monitoring the effectiveness of the Board and its committees in exercising their responsibilities. Business Code of Ethics and Standard of Conduct Our Business Code of Ethics and Standards of Conduct (the “Code of Ethics”) addresses the professional, honest and candid conduct of our directors, officers and employees. The Code of Ethics also addresses conflicts of interest, disclosure process, compliance with laws, rules and regulations (including insider trading laws); and corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets. The Code of Ethics encourages the reporting of any illegal or unethical behavior. Any amendments to, or waivers of, the Code of Ethics will be disclosed on our website promptly following the date of such amendment or waiver as required by law. Director Independence Our Corporate Governance Guidelines require that a majority of our directors qualify as “independent,” as defined by the listing standards of the New York Stock Exchange (the “NYSE”). As required by these director independence standards, our Board reviewed and analyzed the independence of each director earlier this year to determine whether any particular relationship or transaction involving any director, or any of that director’s affiliates or immediate family members, was inconsistent with a determination that the director is independent for purposes of serving on our Board of Directors and its committees. During this review, our Board examined transactions and relationships between directors or their affiliates and immediate family members and Roper and/or Roper’s management. As a result of this review our Board affirmatively determined that all directors are independent, except for Mr. Hunn, and that each member of the Audit, Compensation, and Nominating and Governance Committees is independent under applicable NYSE and Securities and Exchange Commission (“SEC”) rules for purposes of serving on such committees. Nominating Process The Nominating and Governance Committee, acting under its charter, determines the desired skills, abilities, judgment, diversity (including gender and ethnicity as well as background and experience) and other criteria deemed appropriate for service as a director and is responsible for recommending new director candidates and renomination of incumbent directors based on those criteria, which includes, but is not limited to: high personal and professional ethics; knowledge of our business environment; sound judgment and analytical ability; skills and experience in the context of the needs of our Board; breadth of business experience; and whether the candidate meets the applicable independence requirements under the NYSE and SEC rules. Our Board’s process for identifying and evaluating potential director nominees includes soliciting recommendations from our directors and engaging a third party to assist in identifying potential director nominees when a Board position becomes available. Our Board has no formal policy with respect to diversity, but considers racialethnic and gender diversity when creating the pool of candidates from which it considers possible new director candidates. Neither the Board of Directors nor the Nominating and Governance Committee has a specific policy regarding consideration of shareholder director nominees. Shareholder nominees submitted pursuant to the requirements set forth in theBy-laws will be considered under the same criteria that are applied to other candidates. A shareholder of record who nominates a director candidate must provide a notice along with the additional information and materials required by ourBy-laws. See “Information Regarding the 20202021 Annual Meeting of Shareholders” for additional information regarding nominating director candidates. Proxy Access In March 2016, our Board adopted “proxy access” amendments to ourOurBy-laws enablingenable a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and include in our
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CORPORATE GOVERNANCE(CONTINUED) include in our proxy materials up to the greater of two directors or 20% of the number of our directors then in office, provided that the shareholders and the nominees satisfy the requirements set forth in theBy-laws.
Our Board adopted these amendments following discussions with our shareholders in the second half of 2015 and early 2016. These discussions covered the evolving role of proxy access and the specific requirements of ourBy-laws, including (among others) our nominating framework referenced above, as well as those relating to the resubmission of nominees in subsequent years, which nominees will count toward the maximum number of proxy access nominees, and the impact of a proxy contest on the use of proxy access. Our Board reached out to shareholders representing over 50% of our outstanding common stock for these discussions to understand their views. During this outreach, our shareholders (including the proponents of the 2015 shareholder proxy access proposal) expressed support and general flexibility for the proxy access provisions that our Board ultimately adopted.
Review and Approval of Related Person Transactions The Audit Committee is responsible for reviewing and approving, as appropriate, all transactions with related persons. Although we have not adopted written procedures for reviewing related person transactions, we will review any relationship or transaction in which the Company and our directors, executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. There were no related person transactions during 2018.2019. Shareholder Communications Shareholders or other interested parties may send written communications to our Board of Directors ornon-management Board members in care of the Secretary to the address set forth below. This process is also set forth on our website atwww.ropertech.com. All communications will be kept confidential and promptly forwarded to the appropriate director. Items unrelated to a director’s duties and responsibilities as a Board member may be excluded by the Corporate Secretary, including, without limitation; solicitations and advertisements; junk mail; product-related communications; job referral materials such as resumes; surveys; and material that is determined to be illegal or otherwise inappropriate. The director to whom such information is addressed is informed that the information has been removed, and that it will be made available to such director upon request. Our Corporate Governance Guidelines, Code of Ethics, Director Independence Standards, andBy-laws are available on our website atwww.ropertech.com/governance-documents. Requests for copies of these documents or of the full text of theBy-law provision regarding director candidate nominations and communications to our Board of Directors ornon-management Board members should be addressed to: Roper Technologies, Inc. 6901 Professional Parkway East Suite 200 Sarasota, Florida 34240 Attention: Corporate Secretary | | | | | | | | | | | | | Roper Technologies, Inc. 2020 Proxy Statement | | | | 11 |
CORPORATE RESPONSIBILITY Roper and its subsidiaries are committed to working together to conduct business in an ethical and socially responsible manner across the globe. From our philanthropy and volunteering, to our sustainability initiatives and corporate governance, we strive to work together in ways that are open, inclusive and allow our employees to share and collaborate to support the communities where we operate. Through our subsidiaries, we develop and promote software, products and services that have a positive impact on the environment and public health. Many of the solutions our businesses offer allow customers across a number of industries to improve operational and project efficiency, which translates into a variety of benefits for both the customer and the communities in which they operate. As described below, these benefits range from reduced emissions from vehicles, improved water quality and conservation, and lower health care costs and improved patient experience. Transportation Efficiency Solutions Our Transcore business develops innovative transportation and tolling systems that facilitate traffic flow efficiencies, resulting in reduced congestion, travel time, fuel consumption and greenhouse gas emissions. Our DAT business operates the largest truckload freight marketplace in North America. DAT’s services allow transportation brokers and carriers to maximize the efficiency of their shipping needs by matching vehicle availability and load capacity with nearby loads, resulting in a reduction in empty or suboptimal truckload miles. Water Conservation Solutions | • | | Our Cornell Pump business manufactures centrifugal pumps with a Cycloseal® sealing system that removes damaging material from the seal area without the need for flush water, while purging air and gas pockets and extending seal life. Without the need for flush water, operators avoid costly and wasteful water flushes, with larger wastewater treatment facilities conserving over several million gallons of water a year. |
Our Neptune Technology Group serves more than 4,000 water utilities across North America by supplying software and hardware tools that promote the efficient use of water as well as protect water quality for communities. As part of its mission to promote the need for sound steward- | | ship and accessibility to clean water across the globe, Neptune is a supporter of Aqua Aid, an assistance program designed to provide customers in need with uninterrupted water service, and Water For People, which partners with local organizations, governments, businesses, and citizens, to help bring water and sanitation systems to underserved locations across the globe. |
Our Technolog Group designs and manufactures battery powered data loggers and electronic pressure controllers for distribution networks, which enables customers such as municipal water systems to optimize water use efficiency and significantly reduce leakage. Using Technolog’s solutions, a municipal water system in Tennessee achieved a savings of approximately 36,000 gallons ofnon-revenue water per day. With similar projects across the globe, Technolog enables its customers to save millions of gallons of water each year. Health Care Solutions | • | | Our Strata Decision Technology business provides a cloud-based planning, analytics and performance platform that is used by healthcare providers for financial planning, decision support and continuous improvement. Strata is tackling one of the biggest socio-economic problems of our time – helping hospitals and healthcare systems bend the health care cost curve, and in 2019 was named one of the top workplaces in the Chicago area byThe Chicago Tribune. |
| • | | Our Verathon business delivers innovative and specialized medical solutions that empower healthcare providers to improve patient experience and extend patients’ lives. Verathon developed the first video laryngoscope, the GlideScope®, which enables healthcare providers to deliver rapid intubation and significantly reduce patient intubation time. Verathon also pioneered the field of ultrasound bladder volume measurement, and its BladderScan® solution both minimizes infection risk for the patient and optimizes efficiency for heathcare providers. |
Laboratory Solutions Our Clinisys, Data Innovations and Sunquest businesses provide laboratory and public health information management solutions to improve the timeliness and quality of patient care and maximize operational efficiencies of diagnostic testing laboratories, and have provided crucial | | | | | | | 812 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
CORPORATE RESPONSIBILITY(CONTINUED) | | assistance to healthcare organizations managing information generated from COVID-19 testing in certain parts of the world. |
Construction Efficiency Solutions Our ConstructConnect business facilitates the competitive bidding on publicly funded construction projects, allowing projects to be built on time by qualified tradespeople at lower prices. For more information on Roper’s approach to corporate responsibility and our programs, see our Corporate Responsibility report available on our website. The information contained on, or available through, our website is not incorporated by reference in this Proxy Statement. | | | | | | | | | | | | | Roper Technologies, Inc. 2020 Proxy Statement | | | | 13 |
BOARD COMMITTEES AND MEETINGS Our Board of Directors held seven meetings in 2018.2019. Each director participated in every one of our seven Board meetings in 2018.2019. In addition, each director participated in every one of our committee meetings held while such director was a committee member. Our Board has not implemented a formal policy regarding director attendance at the Annual Meeting of Shareholders, but encourages all directors to attend. All of our directors attended the 20182019 Annual Meeting of Shareholders either in person or telephonically except for one director who was unable to attend the meeting due to traveling for the Company’s Board of Directors meeting. Board Leadership Structure Serving as a director of the Company since 1997, Mr. Prezzano was elected as the Board Chairman in 2018, following the death of our prior CEO and Executive Chairman. Mr. Prezzano previously served as the Company’s Lead Independent Director from 2015 through 2018. Mr. Prezzano’sin-depth, long-term knowledge of our Company allows him to effectively identify strategic priorities, lead Board discussions, and oversee the execution of our Company’s strategy and business plans. Effective Board Processes As a result of our Board structure and processes, our directors are actively involved in overseeing the strategy, business and affairs of our Company, including its transformation to a diversified technology company. Our Board meetings typically extend over several days, with directors monitoring the existing portfolio of businesses and analyzing and carefully examining with management the different ways Roper can invest for future growth, both internally and through acquisitions. Between scheduled Board meetings, our directors continue their discussions with management and each other, enabling our Company to draw from their experiences and expertise. Our directors are involved in our corporate strategy and must keep abreast of the issues encountered by our diverse global business operations. The Board, including its Nominating and Governance Committee, has an effective Board recruitment and evaluation process that contributes to bringing together a group of directors who complement each other and collectively provide oversight of management in ways that include challenging and discussing different perspectives. Executive Succession Planning Our Board recognizes the importance of effective leadership to our Company’s success and is actively engaged and involved, on an annual basis, in succession planning on both a long- and short-term basis. Our Company’s operating unit executives, who have responsibility for their respective businesses, but no “enterprise-wide” responsibilities, provide a broad and deep talent resource that is key to our executive succession planning. Risk Oversight Our Board has overall responsibility for the oversight of risk management at our Company, which it generally carries out through Board committees. However, several categories of risk management, such as information technology security, are managed directly by our Board. Our General Counsel informs each committee and the Board of relevant legal and compliance issues, and each committee also has access to our Company’s outside counsel or any other outside advisor when they deem it advisable. Each of these committees along with our management, which is responsible for the implementation of the process to identify, manage and monitor risks, keeps the entire Board regularly apprised of the different risks associated with our Company. The Audit Committee oversees financial risk, including such factors as liquidity, credit, currency exchange and market conditions, through review and discussion with management, and monitors our Company’s risk management practices. It meets regularly with our independent auditors andtogether with our Vice President and Chief Compliance Officer, and our Director of Internal Audit, both of whom report directly to the Audit Committee. In addition to financial risk, the Audit Committee also reviews and discusses other risks that relate to our business activities and operations. The Compensation Committee, in overseeing risk associated with compensation programs and practices, has directly retained its own independent compensation consultant and meets periodically with management to discuss current issues. The Nominating and Governance Committee monitors the compliance of our corporate governance practices and policies with applicable requirements and evolving developments. | | | | | | | | | | 14 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 9 |
BOARD COMMITTEES AND MEETINGS(CONTINUED) Board Committees Our Board has four standing committees: Audit, Compensation, Nominating and Governance, and Executive. All four committees operate under written charters, copies of which can be obtained upon request from the Corporate Secretary or viewed on Roper’s website (www.ropertech.com/governance-documents). Each committee reviews its charter annually and reports its activities to the full Board on a regular basis. Set forth below are the current committee memberships. | | | | | | | | | | | | | | | | | Director | | Audit
Committee | | Compensation
Committee | | | Nominating and
Governance
Committee | | Executive
Committee | | | | | | Shellye L. Archambeau | | | | | | | | X | | | | | | | | Amy Woods Brinkley | | X | | | | | | | | | | | | | | John F. Fort III | | X | | | | | | X | | | | | | | | Robert D. Johnson | | | | | X | | | | | | | | | | | Robert E. Knowling, Jr. | | X | | | | | | | | | | | | | | Wilbur J. Prezzano | | | | | X | | | X | | Chair | | | | | | Laura G. Thatcher | | | | | Chair | | | X | | X | | | | | | Wilbur J. Prezzano
| | | | X | | X | | Chair | | | | | | Laura G. Thatcher
| | X | | | | X | | | | | | | | Richard F. Wallman | | | | | | Chair | | XChair | | X | | | | | | Christopher Wright | | Chair | | | | | | | | X |
Audit Committee: 109 Meetings Held in 20182019 The Audit Committee assists our Board in its oversight of the quality and integrity of our financial statements, our structure for compliance with legal and regulatory requirements, and the performance of our internal audit functions. The Board has determined that based upon their extensive background and expertise, Messrs. Fort and Wright and Ms. Brinkley meet the criteria of an “audit committee financial expert” under SEC rules. The Board determined that Ms. Brinkley meets the criteria based upon her extensive career in banking spanning over thirty years, including her service on the disclosure committee and her participation in the financial statement diligence review process while at Bank of America, in addition to her current and prior service on the audit committees (or finance committee where audit functions are handled by such committee) of four other entities that issue publicly-traded securities. The Board has determined that all Audit Committee members meet the heightened independence standards under NYSE and SEC rules applicable to audit committees and satisfy the NYSE standard of financial literacy, having accounting and related financial management expertise. Pursuant to its charter, the Audit Committee has the authority and responsibility to: appoint, compensate, retain and oversee the independent registered public accounting firm engaged by us; approve all audit engagement fees and terms, as well aspre-approve allnon-audit engagements; and ensure that the independent auditors remain independent and objective; review the appointment and replacement of the head of our internal audit department, who provides the Audit Committee with significant reports to management and management’s responses thereto; | | | | | | | 10 | | | | 
| | Roper Technologies, Inc. 2019 Proxy Statement |
BOARD COMMITTEES AND MEETINGS(CONTINUED)
consider any reports or communications submitted by the independent auditors relating to our financial statements, policies, processes or determinations; | | | | | | | | | | | | | Roper Technologies, Inc. 2020 Proxy Statement | | | | 15 |
BOARD COMMITTEES AND MEETINGS(CONTINUED) meet with management, the independent auditors and others to discuss matters relating to the scope and results of any audit, the financial statements, and changes to any auditing or accounting principles, policies, controls procedures or practices; review any major issues regarding accounting principles and financial statement presentations, including significant changes in the selection or application of accounting principles, and major issues as to the adequacy of our internal controls, analyses regarding significant financial reporting issues and judgments made in connection with the preparation of the financial statements, and the effects of regulatory and accounting initiatives; review significant risks and exposures and the steps taken to monitor and minimize such risks; establish procedures for the receipt, investigation and resolution of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and prepare reports and disclosures required to be included in this Proxy Statement, including the “Audit Committee Report” below. Compensation Committee: 5 Meetings Held in 20182019 The Compensation Committee administers our executive incentive compensation programs and determines, either as a committee or together with the other independent members of the Board (as directed by the Board), annual salary levels and incentive compensation awards for our executive officers. The Board has determined that all Compensation Committee members meet the heightened independence standards under NYSE and SEC rules applicable to compensation committees. The Compensation Committee also, at the direction of the Board, periodically reviews and determines the form and amounts of director compensation and reviews and makes recommendations to the Board with respect to director compensation. The Compensation Committee may delegate its duties and responsibilities to a subcommittee of the Compensation Committee and has the authority to retain its own compensation consultants. Additional information regarding the Compensation Committee’s processes and procedures for the consideration and determination of executive compensation is set forth below in this Proxy Statement under “Compensation Discussion and Analysis.” Pursuant to its charter, the Compensation Committee has the authority and responsibility to: annually review and approve corporate goals and objectives relevant to our CEO’s compensation and based on that evaluation, determine and approve our CEO’s compensation, including salary, bonus, incentive and equity compensation; annually review performance and approve compensation, including salary, bonus, and incentive and equity compensation for our executive officers; grant awards and otherwise make determinations under our equity, incentive, retirement, and deferred compensation plans, to the extent provided in such plans; determine performance goals and certify whether performance goals have been satisfied for incentive plans containing performance criteria; periodically review and make recommendations to the Board concerning our equity, incentive, retirement, and deferred compensation plans; review risks associated with compensation and assess those reasonably likely to have a material adverse effect on the Company; periodically review and determine the form and amounts of director compensation; and review and discuss with management the Compensation Discussion and Analysis disclosure regarding named executive officer compensation included in our annual Proxy Statement. Nominating and Governance Committee: 5 Meetings Held in 20182019 The Nominating and Governance Committee assists our Board in identifying individuals qualified to become directors, determining the size and composition of our Board and its committees, developing and implementing corporate governance guidelines, evaluating the qualifications and independence of directors on a periodic basis and evaluating the overall effectiveness of our Board and its committees. | | | | | | | | | | 16 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 11 |
BOARD COMMITTEES AND MEETINGS(CONTINUED) Pursuant to its charter, the Nominating and Governance Committee has the authority and responsibility to: evaluate a candidate’s qualification based on a variety of factors, including such candidate’s integrity, reputation, judgment, knowledge, and diversity (including gender and ethnicity as well as background and experience) as well as our Board’s needs; recommend qualified individuals for Board membership, including individuals suggested by directors and/or shareholders; periodically review the size and responsibilities of our Board and its committees and recommend changes to our Board; annually review and recommend committee slates and additional committee members to our Board as needed; develop and recommend to our Board a set of corporate governance guidelines and periodically review such guidelines and propose changes to our Board; and develop and recommend to our Board an annual self-evaluation process for our Board and its committees, and administer and oversee the evaluation process. Executive Committee: No Meeting Held in 20182019 The Executive Committee has the authority to exercise all powers of the Board between regularly scheduled Board meetings. | | | | | | | | | 12 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 17 |
DIRECTOR COMPENSATION Compensation for ournon-employee directors is governed by our Director Compensation Plan, which is asub-plan of our 2016 Incentive Plan. The Director Compensation Plan recognizes the Board’s instrumental contribution to Roper’s long-term success and creation of superior shareholder value. Over the past fifteen years, our shareholders have earned a cumulative 1,084.4%1174.0% return – more than fivefour times that of the S&P 500’s 207.1%264.2% return. In the first quarter of 2019, our return of 28.5% more than doubled that of the S&P 500 return of 13.6%. Compensation paid to our Directors reflects the significant time commitment and effort associated with serving on our Board, including participation in at leasta minimum of 15 days of Board meetings each year, in addition to numerous Committee meetings throughout the year. In the past four years, we have added three new independent directors to the Board, each of whom has increased the level of diversity representation on our Board. However, ourOur rapid growth, business transformation into software, and various externalmarket developments havehas made it increasingly challenging to find and assimilate the caliber of independent director capable of adding value to our high-growth, asset-light, diversified enterprise. Despite these challenges, in the past five years, we have added three new independent directors to the Board bringing needed key skills, strengths and capabilities to the Board while significantly increasing its level of gender and ethnic diversity. Going forward, the Board will continue to insist on the high standards of qualifications that are in place. Consistent with Roper’s long-standing“pay-for-performance” philosophy, the Director Compensation Plan ties director compensation directly to the Company’s stock performance, closely aligning the financial interests of our directors with those of our shareholders. Directors receive limited cash retainers and no perquisites (such as deferred compensation benefits), and instead receive a higher percentage of their compensation in shares of Company stock. Historically, In 2019, the Director Compensation Plan was amended to: (1) eliminate the Company’s “fixed share” approach with respect to the equity portion ofnon-employee director compensation (resulting in a reduction to the equity portion ofnon-employee director compensation of approximately 19%); and (2) simplify the framework for the cash retainer and meeting fee payments made tonon-employee directors. In April 2020, the Director Compensation Plan was further amended to more closely align with market practice. The director plan was modified as follows: (i) reduction of the value of annual equity compensation from $665,000 to $385,000 (a reduction of 42%); and (ii) reduction of the supplemental annual cash retainer for the Independent Chairman from $175,000 to $125,000 (a reduction of 29%). There were no changes to the annual cash retainer of $60,000 or the $5,000 committee chair retainers. 2019Non-Employee Director Equity Compensation Beginning in 2006, a grant of 4,000 restricted stock units (“RSUs”) was made under the Director Compensation Plan to recognize the significant time commitment and workload associated with serving on our Board as well as the Board’s instrumental contribution to Roper’s long-term success and creation of superior shareholder value. InAt the end of 2006, the Company’s share price was $50.24. Consistent with its“pay-for-performance” philosophy of aligning the financial interests of directors with those of shareholders, the Compensation Committee maintained the “fixed share” approach until 2018, when in light of the significant increase of 42.4% in the Company’s share price over time (42.4% in 2017 alone), the 2018 award was reduced from 4,000 RSUs to 3,000 RSUs. As a result of the further significant appreciation in the market value of the Company’s shares, as well as other considerations in regard to director compensation, in 2019 the Company anticipates makingtransitioned from its “fixed share” approach tonon-employee director equity compensation to a similar reduction“fixed dollar value” approach. Thus, in 2019, pursuant to the number of RSUs awarded to ouramended Director Compensation Plan,non-employee directors were awarded RSUs equal to an economic value of $665,000 (based on the weighted average closing price for the Company’s stock over the 15 trading days ending on the date of grant). As a result, in 2019.June 2019,non-employee directors received an award of 1,880 RSUs which vest 50% on thesix-month anniversary of the grant date and 50% on the day prior to the next Annual Meeting of Shareholders. | | | | | | | | 18 | | | | | | Roper Technologies, Inc. 2020 Proxy Statement |
DIRECTOR COMPENSATION(CONTINUED) 2019Non-Employee Director Cash Retainer Under our Director Compensation Plan, eachEachnon-employee director also receives an annual cash retainer. Under the amended Director Compensation Plan, the annual cash retainer was increased from $42,500 to $60,000 (the cash retainer for the Independent Chairman was maintained at $175,000) and all fees for attending Board and committeeCommittee meetings as shownwere eliminated. The Committee chair retainers were not changed. The equity award and cash retainers under the amended Director Compensation Plan for 2019 are set forth below:
| | | | | | | 2019 Annual Equity Award | | | | | | | Economic value of $665,000 (based on the weighted average closing price for the Company’s stock over the 15 trading days ending on the date of grant) | | $ | 687,441 | | | | 2019 Annual Cash Retainer | | | | | | | Cash Retainer | | $ | 60,000 | | | | 2019 Supplemental Annual Cash Retainers | | | | | | | Independent Chairman | | $ | 175,000 | | | | Chair of Audit Committee | | $ | 5,000 | | | | Chair of Compensation Committee | | $ | 5,000 | | | | Chair of Nominating and Governance Committee | | $ | 5,000 | |
We also reimburse our directors for reasonable travel expenses incurred in connection with attendance at Board, Committee and shareholder meetings and other Company business. In addition, the table below. The cash retainer and the number of RSUs granted will beare prorated for any new director appointed during the year based on the number of full months such director serves as anon-employee director during the year. | | | | | | | Annual Cash Retainer
| | | | | | | Cash Retainer
| | $ | 42,500 | | | | Supplemental Annual Cash Retainers
| | | | | | | Independent Chairman
| | $ | 175,000 | | | | Chair of Audit Committee
| | $ | 5,000 | | | | Chair of Compensation Committee
| | $ | 5,000 | | | | Chair of Nominating and Governance Committee
| | $ | 5,000 | | | | Board Meeting Compensation(1)
| | | | | | | In-Person Attendance
| | $ | 2,000 | | | | Telephonic Attendance
| | $ | 1,000 | | | | Committee Meeting Compensation(2)
| | | | | | | In-Person Attendance
| | $ | 1,000 | | | | Telephonic Attendance
| | $ | 500 | |
(1) | An extended Board meeting over multiple days is treated as a single Board meeting for payment purposes.
|
(2) | Directors attending a Board and a committee meeting on the same day will only receive a fee for the Board meeting.
|
We also reimburse our directors for reasonable travel expenses incurred in connection with attendance at Board, committee and shareholder meetings and other Company business.
Mr. Hunn is an employee of our Company and did not receive any compensation for his service as a director. His compensation is set forth in the “Executive Compensation” section below. April 2020 Amendment to Director Compensation Plan In consultation with our new independent compensation consultant, Compensia, we recently further amended our Director Compensation Plan to more closely align our Director pay with current market practice, while maintaining our“pay-for-performance” philosophy. Beginning in 2020, under the further amended Director Compensation Plannon-employee directors will be awarded RSUs equal to an economic value of $385,000 (based on the closing price of the Company’s stock on the date of grant). This is a reduction of $280,000, or 42%, from the economic value awarded in 2019.The annual cash retainer under the amended Director Compensation Plan will remain at $60,000 (the same as in 2019), the Audit, Compensation and Nominating and Governance Committee chair retainers will remain at $5,000 (the same as in 2019), while the Independent Chair retainer has been reduced by $50,000 to $125,000. The equity award and cash retainers for 2020 are set forth below: | | | | | | | 2020 Annual Equity Award | | | | | | | (based on the closing price of the Company’s stock on the date of grant) | | $ | 385,000 | | | | 2020 Annual Cash Retainer | | | | | | | Cash Retainer | | $ | 60,000 | | | | 2020 Supplemental Annual Cash Retainers | | | | | | | Independent Chairman | | $ | 125,000 | | | | Chair of Audit Committee | | $ | 5,000 | | | | Chair of Compensation Committee | | $ | 5,000 | | | | Chair of Nominating and Governance Committee | | $ | 5,000 | |
As a result of these changes, in 2020 the average total compensation paid to ournon-employee directors (other than the Independent Chair) will be reduced by approximately 39% in 2020 compared to 2019. With respect to our | | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 1319 |
DIRECTOR COMPENSATION(CONTINUED) Independent Chair, his total compensation will be reduced by approximately 37% in 2020 as compared to 2019. Going forward, the Compensation Committee will continue to engage with shareholders and monitor the director pay practices of its peers for competitive positioning purposes and may make adjustments from time to time, but in no event will any annual increase in aggregate pay (cash and equity) exceed 3% any one year period or 6% in the three year period ended 2022. The table below shows the compensation of ournon-employee directors for 2018.2019. 20182019 Director Compensation
| | Name | | Fees Earned or
Paid in Cash
($) | | Stock
Awards
($)(1)(2)(3) | | All Other
Compensation
($) | | Total
($) | | Fees Earned or
Paid in Cash
($) | | Stock
Awards
($)(1)(2)(3) | | All Other
Compensation
($) | | Total
($) | | Shellye L. Archambeau | | | 39,875 | | | | 915,190 | | | | - | | | | 955,065 | | | | 60,000 | | | | 687,441 | | | | - | | | | 747,441 | | | Amy Woods Brinkley | | | 57,000 | | | | 846,300 | | | | - | | | | 903,300 | | | | 60,000 | | | | 687,441 | | | | - | | | | 747,441 | | | John F. Fort III | | | 57,000 | | | | 846,300 | | | | - | | | | 903,300 | | | | 60,000 | | | | 687,441 | | | | - | | | | 747,441 | | | Robert D. Johnson | | | 54,500 | | | | 846,300 | | | | - | | | | 900,800 | | | | 60,000 | | | | 687,441 | | | | - | | | | 747,441 | | | Robert E. Knowling, Jr | | | 59,500 | | | | 846,300 | | | | - | | | | 905,800 | | | | 65,000 | | | | 687,441 | | | | - | | | | 752,441 | | | Wilbur J. Prezzano | | | 83,033 | | | | 846,300 | | | | - | | | | 929,333 | | | | 235,000 | | | | 687,441 | | | | - | | | | 922,441 | | | Laura G. Thatcher | | | 57,000 | | | | 846,300 | | | | - | | | | 903,300 | | | | 60,000 | | | | 687,441 | | | | - | | | | 747,441 | | | Richard F. Wallman | | | 59,500 | | | | 846,300 | | | | - | | | | 905,800 | | | | 65,000 | | | | 687,441 | | | | - | | | | 752,441 | | | Christopher Wright | | | 62,000 | | | | 846,300 | | | | - | | | | 908,300 | | | | 65,000 | | | | 687,441 | | | | - | | | | 752,441 | |
| (1) | The dollar values shown represent the grant date fair values for RSUs granted to these directors during 2018,2019, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”). The amount reported exceeds the $665,000 economic award value set forth in the Director Compensation Plan due to the award being based on the weighted average closing price for the Company’s stock over the 15 trading days ending on the date of grant. |
| (2) | As of December 31, 2018,2019, eachnon-employee director had 1,500940 unvested RSUs outstanding.outstanding, representing 50% of the 2019 award, which vest on the day prior to the Annual Meeting. |
| (3) | There were no outstanding stock option awards as of December 31, 20182019 for ournon-employee directors. |
Our share ownership and retention guidelines fornon-employee directors require them to own 4,000 shares of our common stock. Until the ownership requirements are met,non-employee directors are required to retain 100% of any shares they receive (on a net after tax basis) under our Director Compensation Plan. All of our directors are in compliance with the guidelines, and only newly elected director, Shellye Archambeau, is below the share ownership requirements.these guidelines. The ownership requirement equated to 2523.6 times the annual cash retainer for directors, based on the closing market price of our common stock on December 31, 20182019 of $266.52$354.23 per share. Below is an estimated 2020 Director Compensation table based on the Director Compensation Plan as amended in April 2020. The amounts below are estimates intended for comparison purposes only. 2020 Estimated Director Compensation | | | | | | | | | | | | | | | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash
($) | | Stock
Awards
($) | | All Other
Compensation
($) | | Total
($) | | | | | | Shellye L. Archambeau | | | | 60,000 | | | | | 385,000 | | | | | - | | | | | 445,000 | | | | | | | Amy Woods Brinkley | | | | 60,000 | | | | | 385,000 | | | | | - | | | | | 445,000 | | | | | | | John F. Fort III | | | | 60,000 | | | | | 385,000 | | | | | - | | | | | 445,000 | | | | | | | Robert D. Johnson | | | | 60,000 | | | | | 385,000 | | | | | - | | | | | 445,000 | | | | | | | Robert E. Knowling, Jr | | | | 60,000 | | | | | 385,000 | | | | | - | | | | | 445,000 | | | | | | | Wilbur J. Prezzano | | | | 185,000 | | | | | 385,000 | | | | | - | | | | | 570,000 | | | | | | | Laura G. Thatcher | | | | 65,000 | | | | | 385,000 | | | | | - | | | | | 450,000 | | | | | | | Richard F. Wallman | | | | 65,000 | | | | | 385,000 | | | | | - | | | | | 450,000 | | | | | | | Christopher Wright | | | | 65,000 | | | | | 385,000 | | | | | - | | | | | 450,000 | |
| | | | | | | 1420 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
EXECUTIVE OFFICERS The following table sets forth certain information concerning our executive officers as of December 31, 2018.2019. The executive officers are elected by the Board of Directors and serve at its discretion. Brian D. Jellison served as the Company’s President, Chief Executive Officer and Chairman through August 30, 2018, and as the Company’s Executive Chairman until his death on November 2, 2018. | | | | | L. Neil Hunn | | Professional Experience | | | President and Chief Executive Officer since 2018 Executive Vice President, Chief Operating Officer 2018 Group Vice President from 2011 to 2017 Age: 4748 | | Prior to being named President and Chief Executive Officer in August 2018, Mr. Hunn wasserved as Executive Vice President and Chief Operating Officer sincefrom 2017 and ato 2018. Mr. Hunn also served as Group Vice President withof Roper’s medical segment from 2011 to 2018 and helped drive significant growth in the Company’s medical technology and application software businesses. In addition to his operating responsibilities at Roper, Mr. Hunn led the execution of the majority of the company’s capital deployment since 2011.joining Roper. Prior to joining Roper, Mr. Hunn held several positions in the software sectorserved 10 years as Executive Vice President and was involved in businessesChief Financial Officer at varied stages of development. Most recently he was with MedAssets, an Atlanta-based SaaS company, where he served as Executive Vice President and CFO, as well as President of its revenue cycle technology businesses. He was previously withsuccessfully led MedAssets’ initial public offering and the execution of several M&A transactions. Mr. Hunn also held roles at CMGI, an incubator of Internet businesses, and Parthenon Group, a strategy consulting firm. | | | Robert C. Crisci | | Professional Experience | | | Executive Vice President andsince 2018 Chief Financial Officer since 2017 Vice President, Finance and Investor Relations from 2013 to 2017 Age: 43 44 | | Prior to being named Executive Vice President and Chief Financial Officer, Mr. Crisci joined Roper in 2013 as Vice President, Finance and Investor Relations and led the Company’s financial planning and analysis and investor relations activities. Prior to joining Roper, he served in various roles across investment banking, consulting and finance withfinance. His prior experience includes positions at Morgan Keegan, VRA Partners, Devon Value Advisers and Deloitte & Touche.Deloitte. | | | John K. Stipancich | | Professional Experience | | | Executive Vice President since 2018 General Counsel since 2016 Corporate Secretary since 2016 Age: 5051 | | Prior to joining Roper, Mr. Stipancich served as Executive Vice President and Chief Financial Officer of Newell Brands Inc., a consumer products company, where he had also served as General Counsel and Corporate Secretary, and Executive Leader of its operations in Europe.Europe, the Middle East and Africa. Prior to his twelve years at Newell Brands, Mr. Stipancich served as Executive Vice President, General Counsel and Corporate Secretary for Evenflo Company and Assistant General Counsel for Borden, both KKR portfolio companies at the time. He started his legal career in the Cleveland office of the international law firm Squire Patton Boggs. | | | Paul J. SoniJason P. Conley
| | Professional Experience | | | Executive Vice President and Controller since 2017
Vice President from 2006 to 2017
Controller from 2002 to 2017
Age: 6044 | | Prior to being named Executive Vice President and Controller, Mr. Soni served as Roper’s Controller and Principal Accounting Officer since 2011 and Vice President since 2006. Prior to joining Roper, Mr. SoniConley served as the Controller of both Oxford Industries, Inc.,Chief Financial Officer at Roper subsidiary, Managed Healthcare Associates, and prior to that led the financial planning and investor relations activities for Roper from 2006 to 2013. Before Roper, Mr. Conley served in finance and accounting leadership roles at Honeywell International Division of Savannah Foods & Industries, Inc. Mr. Soni’s earlier career included eight years with PricewaterhouseCoopers LLP, a professional services firm, in the U.S. and Europe, performing audit and transaction support services. Mr. Soni has elected to retire as Executive Vice President in 2019.Deloitte. |
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BENEFICIAL OWNERSHIP Beneficial ownership is determined in accordance with SEC rules. Under the rules, the number of shares beneficially owned by a person and the percentage of ownership held by that person includes shares of common stock that could be acquired upon exercise of an option within sixty days, although such shares are not deemed exercised and outstanding for computing the percentage of ownership held by any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws where applicable. The following table shows the beneficial ownership of Roper common stock as of March 29, 201931, 2020 by (i) each of our director nominees, (ii) each named executive officer in the “2018“2019 Summary Compensation Table,” (iii) all of our current directors and executive officers as a group, and (iv) all persons who we know are the beneficial owners of five percent or more of Roper common stock. Except as noted below, the address of each person in the table is c/o Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240. | | Name of Beneficial Owner | | Beneficial Ownership
of Common Stock(1)(2) | | Percent
of Class | | Beneficial Ownership
of Common Stock(1)(2) | | Percent
of Class | | T. Rowe Price Associates, Inc.
100 E. Pratt Street, Baltimore, MD 21202 | | | 14,251,090 | (3) | | | 13.7 | % | | | 15,537,130 | (3) | | | 14.9 | % | | The Vanguard Group
100 Vanguard Blvd., Malvern, PA 19355 | | | 11,529,525 | (4) | | | 11.1 | % | | | 8,842,539 | (4) | | | 8.5 | % | | BlackRock, Inc.
55 East 52nd Street, New York, NY 10055 | | | 7,181,267 | (5) | | | 6.9 | % | | | 7,119,312 | (5) | | | 6.8 | % | | Shellye L. Archambeau | | | 3,250 | | | | * | * | | | 4,190 | | | | * | * | | Amy Woods Brinkley | | | 15,000 | | | | * | * | | | 14,440 | | | | * | * | | Jason Conley | | | | 1166,795 | | | | * | * | | John F. Fort III | | | 18,253 | (6) | | | * | * | | | 18,490 | (6) | | | * | * | | L. Neil Hunn | | | 386,676 | | | | * | * | | | 407,214 | | | | * | * | | Brian D. Jellison | | | 1,077,365 | (7) | | | 1.0 | % | | | Robert D. Johnson | | | 8,450 | | | | * | * | | | 7,140 | | | | * | * | | Robert E. Knowling, Jr. | | | 13,037 | | | | * | * | | | 11,978 | | | | * | * | | Wilbur J. Prezzano | | | 19,000 | | | | * | * | | | 19,440 | | | | * | * | | Laura G. Thatcher | | | 14,000 | | | | * | * | | | 14,940 | | | | * | * | | Richard F. Wallman | | | 53,965 | (8) | | | * | * | | | 54,905 | (7) | | | * | * | | Christopher Wright | | | 59,862 | | | | * | * | | | 54,644 | | | | * | * | | Robert C. Crisci | | | 68,590 | | | | * | * | | | 100,768 | | | | * | * | | John K. Stipancich | | | 30,521 | | | | * | * | | | 57,544 | | | | * | * | | Paul J. Soni | | | 153,047 | (9) | | | * | * | | | All current directors and executive officers as a group (14 individuals) | | | 1,921,016 | | | | 1.9 | % | | All current directors and executive officers as a group (13 individuals) | | | | 899,283 | | | | * | *% |
| (1) | Includes the following shares that could be acquired on or before May 28, 201930, 2020 upon exercise of stock options issued under Company plans as follows: Mr. Conley (40,500), Mr. Hunn (167,000)(185,000), Mr. Crisci (32,000)(60,500), Mr. Soni (90,000)Stipancich (23,500), and all current directors and executive officers as a group (289,000)(309,500). Holders do not have voting or investment power over unexercised option shares. |
| (2) | Includes the following shares of unvested restricted stock held by named executives officers over which they have sole voting power but no investment power: Mr. Conley (17,315), Mr. Hunn (157,500)(147,636), Mr. Crisci (35,500), Mr. Stipancich (25,750)(38,023), and Mr. Soni (10,000)Stipancich (24,614). Also includes 1,500 unvested restricted stock units for the followingnon-employee directors: Messrs. Fort, Johnson, Knowling, Prezzano, Wallman, and Wright and Mses. Archambeau, Brinkley and Thatcher. The total for all current directors and executive officers as a group is (242,250)(227,588). |
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BENEFICIAL OWNERSHIP(CONTINUED) | (3) | Based on information reported on Schedule 13G/A filed with the SEC on February 14, 2019,2020, as of December 31, 2018,2019, T. Rowe Price Associates, Inc. beneficially owned 14,251,09015,537,130 shares of Roper common stock with sole voting power over 4,697,1075,198,885 shares and sole dispositive power over all of the shares. |
| (4) | Based on information reported on Schedule 13G filed with the SEC on February 12, 2019,2020, as of December 31, 2018,2019, The Vanguard Group (“Vanguard”) beneficially owned 11,529,5258,842,539 shares of Roper common stock with sole voting power over 120,119154,097 shares, shared voting power over 25,10229,148 shares, sole dispositive power over 11,385,9988,667,844 shares, and shared dispositive power over 143,527174,695 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 88,810118,395 shares. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 84,85590,290 shares. |
| (5) | Based on information reported on Schedule 13G/A filed with the SEC on February 6, 2019,2020, as of December 31, 2018,2019, BlackRock, Inc. (and certain of its subsidiaries) beneficially owned 7,181,2677,119,312 shares of Roper common stock with sole voting power over 6,109,7065,867,129 shares and sole dispositive power over 7,181,2677,119,312 shares. |
| (6) | Includes 250 shares held by a trust of which Mr. Fort is a trustee and 300 shares held by Mr. Fort’s spouse. |
| (7) | As a result of Mr. Jellison’s death on November 2, 2018, all shares held in his name passed to his spouse to be held in a revocable trust.
|
(8) | Includes 500 shares held in an IRA account by Mr. Wallman’s spouse. |
(9) | Mr. Soni and his spouse each participate in a 401(k) plan with a unitized stock fund that consists of cash and common stock in amounts that vary from time to time. Based on a conversion factor representing the units in the fund as of March 29, 2019, the shares in the table include 2,850 shares in Mr. Soni’s account and 963 shares in his spouse’s account.
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DELINQUENT SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEREPORTS Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires Roper’sthe Company’s directors, executive officers, and persons who own moregreater than 10% of Roper common stockshareholders to file with the SEC initial reports of ownership and reports of changes in ownership.ownership of common stock and other equity securities of the Company. Officers, directors, and greater than 10% shareholders are required by SEC rulesregulation to furnish Roperthe Company with copies of all Section 16(a) forms they file. We believeTo the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that during 2018 all of our directors and executive officers complied withno other reports were required, all Section 16(a) filing requirements. In making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5, and amendmentsrequirements applicable to these forms, provided to us and the written representations of ourits officers, directors, and executive officers.greater than 10% shareholders were complied with, except for the following inadvertent late reports: one report relating to two transactions by Robert Crisci and one report relating to one transaction by Christopher Wright.
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COMPENSATION DISCUSSION AND ANALYSIS This Compensation Discussion and Analysis (“CD&A”) provides information about our compensation objectives and policies for our current and prior CEOsCEO and other executive officers included in the Summary Compensation Table and referred to in this CD&A as “named executive officers.” Our named executive officers for 2019 are: L. Neil Hunn, President and Chief Executive Officer; Robert C. Crisci, Executive Vice President and Chief Financial Officer; John K. Stipancich, Executive Vice President, General Counsel and Corporate Secretary; and Jason Conley, Vice President, Controller. CREATING SHAREHOLDER VALUE The creation of shareholder value is the foundation and driver of our executive compensation program. The compensation of our executive officers is closely aligned with the long-term interests of our shareholders. Superior Returns for Roper Shareholders¹ Roper is proud of its long track record of superior returns for its shareholders. Roper has significantly outperformed the S&P 500 over the past 1, 3, 5, 10 and 15 years. | | Period | | Compound Annual Shareholder Return | | Total Shareholder Return (TSR) | | Compound Annual Shareholder Return | | Total Shareholder Return (TSR) | | | Roper | | S&P 500 | | Roper | | S&P 500 | | Roper | | S&P 500 | | Roper | | S&P 500 | Q1 2019 | | NA | | NA | | 28.5% | | 13.6% | | 1-Year | | 3.5% | | (4.4)% | | 3.5% | | (4.4)% | | 33.7% | | 31.5% | | 33.7% | | 31.5% | 3-Years | | 12.7% | | 9.3% | | 43.1% | | 30.4% | | 25.4% | | 15.3% | | 97.0% | | 53.2% | 5-Years | | 14.7% | | 8.5% | | 98.2% | | 50.3% | | 18.5% | | 11.7% | | 133.7% | | 73.9% | 10-Years | | 20.6% | | 13.1% | | 552.9% | | 243.0% | | 21.8% | | 13.6% | | 618.0% | | 256.7% | 15-Years | | 17.9% | | 7.8% | | 1,084.4% | | 207.1% | | 18.5% | | 9.0% | | 1174.0% | | 264.2% |
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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) As outlined in the graph below, $100 invested in Roper at the end of 2001 would have yielded an investor $1,542$1,603 as of MarchDecember 31, 2019, compared to only $350$405 for the same investment in the S&P 500.  
| ¹ | All periods ending December 31 of the referenced year, except the Q1 2019 period which ended March 31.year. |
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| | Roper Technologies, Inc.Excellent 2019 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)
Record 2018 Performance for Roper
20182019 was another excellent year for Roper, with double digitnotable increases in revenue, net earnings, EBITDA, EBITDA margin and cash flow. Our strategic focus on asset-light, diversified technology businesses and our ability to generate and compound cash flow delivered another year of outperformance.
Annual shareholder return of 3.5% versus S&P 500 negative return of (4.4)%; Three-year compounded return of 12.7%33.7% versus S&P 500 return of 9.3%31.5%; Three-year compounded return of 25.4% versus S&P 500 return of 15.3% GAAP revenue increased 13%3% to $5.19$5.38 billion with organic revenue growth of 9%3% GAAP gross margin increased 10070 basis points to 63.2%63.9% | • | | Adjusted EBITDA increased 13%6.6% to $1.81$1.93 billion and adjusted EBITDA margin increased 30110 basis points to 34.7%35.8%(1) |
OperatingAdjusted operating cash flow increased 16%5% to $1.43$1.50 billion and adjusted free cash flow increased 17%5% to $1.37$1.44 billion
Deployed $1.3$2.4 billion toward high quality software acquisitions in 20182019 while also reducingdivesting our total leverage by over $200 millionScientific Imaging and Gatan businesses for $1.2 billion. Annual dividend increased by 12%11%, increasing for the 26th27th consecutive year | (1) | This financial information is presented on an adjusted(non-GAAP) basis. A reconciliation fromnon-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations”. |
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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Simple Strategy Drives Powerful Value Creation Roper has a simple and successful business model that is unique among application software and multi-industry diversified companies. We operate high-margin, high cash-generating, asset-light businesses across a wide range of diverseend-markets. Our high-performing businesses generate excess free cash flow that our executive team deploys to acquire more high-performing businesses. This creates a “compounding effect” onfor cash flow that drives long-term value creation. Our free cash flow has increased from $398$337 million in 20082009 to $1.37$1.44 billion in 2018,2019, a compound annual growth rate of 13%16%, driven by our combination of outstanding business performance and value-creating capital deployment. Roper Annual Free Cash Flow and Operating Cash Flow (millions)  
Note: Free Cash Flow = Cash from Operations less Capital Expenditures less Capitalized Software ExpendituresExpenditures. *Amounts provided for fiscal year 2019 are adjusted for cash taxes of $39 million related to the sale of the Scientific Imaging businesses. | | | | | | | | | | 26 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 19 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Market Capitalization Growth Roper’s market capitalization has increased more than $30$31 billion since January 2010.¹*  
1* | Chart reflects ending period as MarchDecember 31, 2019. |
Key Metric: Cash Return on Investment In addition to cash flow, Cash returnReturn on investmentInvestment (“CRI”) is the key operating metric Roper uses to measure the performance and value of its operating businesses and potential acquisitions. CRI is a measure of the quality of the cash flow of a business. Our business leaders and Board of Directors focus on cash flow growth and disciplined investments. CRI is highly correlated to shareholder value creation and we believe our strategy of improving CRI has been a key driver of our long-term performance. Our CRI discipline, as applied throughout the organization, allows Roper to focus our investment on areas that will increase shareholder value, drive cash flow growth, and minimize physical assets. Through a combination of internal improvements and disciplined capital deployment, Roper has increased CRI dramatically over the past 1617 years, a key driver of our strong shareholder returns over the period. 
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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Acquisition-Focused Capital Deployment We deploy the majority of our free cash flow toward acquisitions to generate long-term growth and createlong-term shareholder value. Unlike most other large corporations, we do not have a separate corporate development ormerger-and-acquisition team;team. Instead, our CEO and other top executives are responsible for the disciplined deployment of capital through acquisitions. OVERVIEW OF OUR COMPENSATION PROGRAM Consideration ofSay-on-Pay Vote SinceSay-on-Pay started in 2011, Roper has received an average of 92% support for its executive compensation program. At the 20182019 Annual Meeting of Shareholders, 95%97% of the votes cast were in favor of the advisory vote to approve our named executive officer compensation. This level of support is high relative to peers, and is consistent with the prior years’ support of 95% in 2018, 95% in 2017 and 96% in 2016 and 97% in 2015.2016. The Compensation Committee believes theSay-on-Pay vote reflects the strong support of our shareholders for our long-standingpay-for-performance philosophy and approach of integrating executive compensation with our value creation model as well as for recent changes to our executive compensation program. Taking into consideration input from shareholders, theSay-on-Pay vote, external developments, and internal considerations, Roper has undertaken many changes over the past several years to itsour executive compensation program to ensure it isremains closely aligned with the long-term interests of our shareholders: | • | | Prior CEO’s annual cash bonus was replaced with a multi-year long-term cash incentive award.
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| • | | Dividends on executive officers’ restricted shares are not paid until the shares are earned, and are forfeited if shares are not earned.
| |
| | • | | 100% of restricted shares are performance-based, with all vesting contingent upon meeting multi-year EBITDA and relative operating cash flow margin performance requirements. | |
| | • | | Only stock options, which are inherently performance-based, vest by continued service alone. | |
| | • | | A three-year cumulative performance goal must be met for full vesting of restricted shares (versus aone-year goal for each year previously). | |
| | • | | Annual vesting of equity awards(one-third per year over three years) was eliminated. | |
| | • | | CEO equity awards may vest only at the end of a three-year period. | |
| | • | | Equity awards for other named executive officers may vest 50% after the second year and 50% after the third year. | |
| | • | | Dividends on executive officers’ restricted shares are not paid until the shares are earned, and are forfeited if shares are not earned. | |
| • | | EBITDA performance for full vesting of restricted shares was increased in 20182019 by 15%8.7% to $4.6$5.0 billion. | |
| | • | | Starting in 2017, the operating cash flow less capital expenditures and capitalized software (measured as a percentage of revenue) was changed from an internal goal to relative performance against an external benchmark with 50th percentile performance required for any portion of the restricted shares to vest and 75th percentile performance required for full vesting. | |
| | • | | 97%Transitioned from the practice of our prior CEO’s compensation wasgranting a fixed number of equity awards to a dollar value-based approach for bothnon-employee directors and executive officers as a result of the superior performance of the Company’s stock price and to align with market practice.
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| • | | 95% of our current CEO’s compensation is subject to performance risk and tied to financial results and stock price. | |
| | • | | In light of the transformation of our business portfolio, Standard & Poor’s changed out our Global Industry Classification System (GICS) industry code in 2014 and we2014. We may request another change to a more appropriate GICS industry code to reflect our significant growth in software. | |
| | • | | Based on the results of the advisory vote at the 2017 Annual Meeting of Shareholders to approve the frequency of theSay-on-Pay vote, theSay-on-Pay vote will continue to be every year. | |
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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Checklist of Compensation Practices Consistent with shareholder interests and market best practices, positive features of our executive compensation program include the following: | | | | WHAT WE DO | | • | | VirtuallySubstantially all compensation for named executive officers is tied to performance.
| | | | • | | Performance vesting requirements apply to 100% of restricted stock awards (no time vesting alone). | | | | • | | Prior CEO’sCEO long-term cash bonus based on five-year results to reinforce a long-term planning horizon.
horizon and sustainable growth. | | | | • | | Cash bonuses are capped and performance-based restricted stock awards limited to 100% of target (risk mitigation features). | | | | • | | Robust share ownership and retention guidelines, much higher than typical practice. guidelines. | | | | • | | “Clawback” policy to recoup erroneously paid compensation. | | | | • | | Risk assessment review as part of risk mitigation process. | | | | • | | Independent compensation consultant retained by the Compensation Committee. | | | | • | | Limited perquisites and other benefits. |
| | | | WHAT WE DON’T DO | | • | | Nore-pricing of underwater stock options or cashbuy-outs.
| • | | No granting of stock options with an exercise price less than fair market value at grant.
| • | | No payment of dividends on performance-based restricted stock awards until earned. | | | | • | | No defined-benefit pension plan or SERPs for named executive officers (only 401(k) plan on the same terms as other eligible employees and voluntary deferral of cash compensation). | | | | • | | No “single trigger” equity vesting uponchange-in-control. | | | | • | | Severance pay is very limited, as is the use of employment agreements. | | | | • | | No hedging or pledging of Company stock is permitted. | | | | • | | No excise taxgross-ups onchange-in-control payments. | | | | • | | Nore-pricing of underwater stock options or cashbuy-outs without shareholder approval. | | | | • | | No granting of stock options with an exercise price less than fair market value at grant. |
Objectives of our Compensation Program Our compensation program for named executive officers reflects our business needs and challenges in creating shareholder value and is designed to: Drive performance for the benefit of shareholders. Emphasize equity compensation to align named executive officers’ interests with those of shareholders. Provide compensation levels competitive with publicly traded companies and private equity firms. This enables us to recruit and retain seasoned leadership capable of effectively deploying capital, while driving and managing a diversified technology company. Maintain flexibility to adjust to changing business needs in a fast-paced business environment. Simplify compensation design to promote transparency and facilitate ease of administration and communication. Solicit and consider the views of our shareholders. Adhere to the highest legal, governance, and ethical standards. | | | | | | | | | 22 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 29 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) ELEMENTS OF COMPENSATION Our executive compensation program consists of several elements, each with an objective that fits into our overall program to provide an integrated and competitive total pay package. Long-Term Stock Incentives Equity compensation is the largest and most important form of pay for our named executive officers as it achieves many of our key compensation objectives: Tie pay to performance by linking compensation to shareholder value creation and achievement ofpre-determinedpre-established and objective performance criteria. Align named executive officers’ interests with those of shareholders while reinforcing a long-term planning horizon. Attract named executive officers, particularly those interested in building long-term value for shareholders, as equity compensation is the key element of competitive pay packages for named executive officers.shareholders. Retain named executive officers and reward continued service by ensuring the forfeiture of awards prior to satisfaction of multi-year service requirements. The Company’s historical approach to granting equity awards was to grant a constant number of awards, thereby directly linking the percentage increase in the value of the equity awards to the percentage increase in Roper’s stock price at the time of grant. However, in light of the significant increase in Roper’s stock price over the years, as well as a review of prevailing market practice, the Committee has transitioned from this “constant share” approach to a value-based practice of granting equity awards. To determine the appropriate value, the Committee considers the compensation practices of its peers as well as an executive’s individual performance and relative responsibilities. We use two types of equity awards: Stock Options The exercise price of stock options is set at the market closing price of our stock on the date of grant which provides an incentive to grow shareholder value and requires continued service over multiple years to realize any gains. For the CEO, stock options vest on the third anniversary of the grant date. For the other named executive officers, stock options vest in equal installments on the second and third anniversaries of the grant date. Performance-Based Restricted Stock In addition to continued service, the vesting of restricted shares is 100% contingent on the Company attaining specific,pre-determinedpre-established and objective performance goals, as specified by the Compensation Committee. Dividends are withheld and paid only to the extent the shares are actually earned by performance. Performance-based restricted stock is intended to encourage the retention of named executive officers, provide a continuing incentive to increase shareholder value, and further align named executive officers’ interests with shareholder interests. We use two types of cash payments: Cash Incentives Cash incentives support the achievement of our business strategies by tying a portion of compensation to the achievement of established financial objectives and assist in attracting named executive officers due to their market prevalence. Cash incentives are capped to avoid an excessive short-term focus and potentially excessive risk-taking. CashAnnual cash incentives for named executive officers, including our CEO, are tied to annual performance. Our CEO’s long-term cash incentive award is tied to cumulative financial performance over a five year period. Base Salary Base salary is fixed cash compensation that reflects level and scope of responsibility, experience and skills as well as market practices. The Compensation Committee reviews each named executive officer’s base salary annually as well as in connection with a promotion or other change in responsibilities. Salary adjustments are usually effective as of January 1. | | | | | | | | | | 30 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 23 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Other Pay Elements As Roper has largely avoided perquisites, supplemental pensions, and other compensation not tied to performance, the other items summarized below represent only a small portion of named executive officers’ total compensation. Retirement Benefits Named executive officers may participate under the same terms as other eligible employees in a 401(k) plan that provides matching contributions capped at 7.5% of cash compensation, subject to limitations imposed by the Code.Internal Revenue Code of 1986, as amended (the “Code”). To provide financial planning flexibility, we maintain aNon-Qualified Retirement Plan, under which named executive officers may elect to defer cash compensation. This plan is intended to provide deferred compensation benefits that would have been earned under thetax-qualified 401(k) plan but for certain limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”).Code. For more information on this plan, see the “Executive Compensation—20182019Non-Qualified Deferred Compensation” section below. Perquisites and Other Benefits Perquisites and othernon-cash benefits offered to named executive officers are limited to an automobile allowance, financial planning assistance (for Mr. Hunn) and club membershipperiodic physicals. Club memberships are permitted when they have a business purpose. Severance and Change in Control Provisions We have letter agreements only with Messrs. Hunn and Stipancich. These arrangements provide severance benefits in the event of termination of employment under certain circumstances, including a change in control. For a description of these agreements and payments under various termination scenarios, see the “Executive Compensation—Potential Payments upon Termination or Change in Control” section below. Double Trigger Equity Vesting In regard to equity awards, we use a “double trigger” approach to vesting upon a change in control, rather than providing for vesting solely upon a change in control (“single trigger”), because we believe it provides adequate protection and reduces potential costs for a possible acquirer of the Company. See the “Executive Compensation—Potential Payments upon Termination or Change in Control” section below for additional detail. No TaxGross-Ups A named executive officer may be subject to excise taxes on benefits received in relation to a change in control of the Company. We do not provideexcise-taxgross-ups to named executive officers (which would place the named executive officer in the same tax position if the excise tax did not apply). | | | | | | | | | 24 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 31 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Mix of Total Compensation Compensation for our named executive officers encourages a long-term focus and closely aligns with shareholder interests. For 2018,2019, the total direct compensation at target that was at risk and tied to stock price and performance objectives was 97% for our prior CEO, 95% for our currentthe CEO, and 86%88% on average for other executive officers. 20182019 Total Direct Compensation Mix
 
COMPENSATION PROCESS Compensation Committee Oversight The Compensation Committee oversees our executive compensation programs to appropriately compensate named executive officers, motivate named executive officers to achieve our business objectives, and align our named executive officers’ interests with the long-term interests of our shareholders. The committee reviews each element of compensation for each named executive officer and determines any adjustments to compensation structure and levels in light of various considerations, including: The scope of the named executive officer’s responsibilities, performance and experience as well as competitive compensation levels. Our financial results against prior periods. The structure of our compensation programs relative to sound risk management, as discussed with management. The results of the advisory shareholder vote on the compensation of our named executive officers and input from shareholders. Competitive pressures from private equity and capital deployment companies, as well as market practices and external developments generally. The utilization of a compensation consultant who provides extensive external benchmarking of named executive officer compensation of industry peer group companies for comparison purposes. The Compensation Committee has maintained a simple program that drives long-term performance and superior value creation for shareholders enabling Roper to attract, retain, and motivate an outstanding leadership team. | | | | | | | | | | 32 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 25 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Compensation Consultant For 2018,In September 2019, the Compensation Committee, has continuedas part of an effort to bring a fresh perspective to its’ compensation practices retained the retained services of FW CookCompensia (the “Consultant”) to closely monitor developments and trends in executive compensation and to provide recommendations for appropriate adjustments to the committeeCompany’s compensation program, policies, and practices in line with the Company’s business and talent strategies and investor expectations. The Committee’s prior independent objective analysis and professional opinions on executive compensation.compensation consultant was F.W. Cook.
The Consultant is independent, reports directly to the Chair of the Compensation Committee and has never performed other work for the Company. The Compensation Committee determined that its engagement of the Consultant did not raise any conflicts of interest. The Consultant attends all meetings of the Compensation Committee where evaluations of the effectiveness of overall executive compensation programs are conducted or where compensation for named executive officers is analyzed or approved. The Chair of the Compensation Committee meets with the Consultant in advance of committee meetings and confers via telephone with the Consultant between meetings. The Consultant assists in gathering and analyzing market data on compensation levels and provides expert knowledge of marketplace trends and best practices relating to competitive pay levels as well as developments in regulatory and technical matters. The Compensation Committee has considered and assessed all relevant factors that could give rise to a potential conflict of interest with respect to the work performed by each of Compensia and F.W. Cook. Based on this review, the Compensation Committee has determined that both Compensia and F.W. Cook are independent of the Company and its management, and did not identify any conflict of interest. Role of Our Named Executive Officers While the Compensation Committee is ultimately responsible for making all compensation decisions affecting our named executive officers, our CEO participates in the process because of his closeday-to-day association with the other named executive officers and his knowledge of the Company’s diverse business operations. Our CEO discusses with the Compensation Committee the performance of the Company and of each named executive officer, including himself. The CEO also discusses with the committee the performance of key executives reporting to his direct reports. The CEO makes recommendations on the components of compensation for the named executive officers, other than himself, but does not participate in the portion of the committee meeting regarding the review of his own performance or the determination of the actual amounts of his compensation. Our Chief Financial Officer and Vice President and Controller also assistsassist the Compensation Committee as an information resource in regard to metrics related to incentive compensation. The other named executive officers provide support to the committee, as needed, in regard to their respective technical areas.areas of expertise. Market Benchmarking Market pay levels and practices, including those of a self-selected peer group, are one of many factors the Compensation Committee considers in making compensation decisions. Purpose We benchmark to provide an external frame of reference on range and reasonableness of compensation levels and practices. Market information is used as a data point in decision-making, and not as a primary factor. Challenges Our high-margin, high-cash generating, asset-light business model and diversifiedend-markets make it challenging to select peers using traditional criteria, such as revenue, industry codes or competitors. Roper’s operating businesses have peers that can be assigned by industry, but at the enterprise level | | | | | | | | | | | | | Roper Technologies, Inc. 2020 Proxy Statement | | | | 33 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) | | | be assigned by industry, but at the enterprise level Roper has no peers that match our diverse set of businesses and unique operating model. Given our valuation relative to revenue, using only revenue in measuring Roper’s size understates the relative market value of Roper and is therefore a poor indicator. |
Private Equity Given the capital deployment responsibilities of our named executive officers and the private equity-like nature of our business, we consider the compensation levels and practices used by private equity firms that offer comprehensive programs, which often includeco-investment and leveraged carried-interest opportunities more akin to Roper’s operating model. | | | | | | | 26 | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)
| | | nature of our business, we consider the compensation levels and practices used by private equity firms that offer comprehensive programs, which often includeco-investment and leveraged carried-interest opportunities more akin to Roper’s operating model. However, we do not allow our named executive officers toco-invest in Company investments, nor do they benefit from carried-interest tax treatment. Our compensation practices often compete with private |
| | equity opportunities when recruiting and retaining talented professionals who possess expertise in both operations and capital deployment. |
20182019 Peer Group
Our self-selected peer group reflects our continued strong growth, sustained value creation, continuing expansion into software and technology-driven businesses, market valuation relative to revenues and gross investment, and intense competition with private equity for talent and investment opportunities. Roper’s decision and subsequent transformation to focus on software has changed the performance of the company significantly. Today, approximately over 50% of Roper’s EBITDA areis derived from our software assets. All of these facts make it continually difficult to select appropriate peers. The peer companies are listed below along with various size indicators. | | Company | | Ticker | | Market Capitalization(1)
($ millions) | | Enterprise
Value(1) ($ millions) | | Revenue(2)
($ millions) | | Net
Income(2)
($ millions) | | Global Industry Classification
Standard (GICS)Sub-Industry | | Ticker | | Market Capitalization(1)
($ millions) | | Enterprise
Value(1) ($ millions) | | Revenue(2)
($ millions) | | Net
Income(2)
($ millions) | | Global Industry Classification
Standard (GICS)Sub-Industry | | TransDigm Group Incorporated | | TDG | | $ | 17,937 | | | $ | 28,516 | | | $ | 3,956 | | | $ | 821 | | | Aerospace & Defense | | TDG | | $ | 29,987 | | | $ | 44,226 | | | $ | 6,866 | | | $ | 624 | | | Aerospace & Defense | | Adobe Inc. | | ADBE | | $ | 110,435 | | | $ | 111,225 | | | $ | 8,981 | | | $ | 2,591 | | | Application Software | | ADBE | | $ | 159,654 | | | $ | 159,042 | | | $ | 11,131 | | | $ | 2,951 | | | Application Software | | salesforce.com, inc. | | CRM | | $ | 104,782 | | | $ | 105,723 | | | $ | 12,530 | | | $ | 816 | | | Application Software | | CRM | | $ | 144,262 | | | $ | 144,063 | | | $ | 15,850 | | | $ | 736 | | | Application Software | | Intuit Inc. | | INTU | | $ | 51,089 | | | $ | 50,182 | | | $ | 6,094 | | | $ | 1,262 | | | Application Software | | INTU | | $ | 68,182 | | | $ | 66,702 | | | $ | 6,933 | | | $ | 1,580 | | | Application Software | | Citrix Systems, Inc. | | CTXS | | $ | 13,808 | | | $ | 14,641 | | | $ | 2,974 | | | $ | 576 | | | Application Software | | CTXS | | $ | 14,441 | | | $ | 14,875 | | | $ | 3,011 | | | $ | 682 | | | Application Software | | KKR & Co. Inc. Class A | | KKR | | $ | 10,528 | | | $ | 47,897 | | | $ | 1,821 | | | $ | 1,134 | | | Asset Management and
Custody Banks | | KKR | | $ | 16,057 | | | $ | 60,744 | | | $ | 5,553 | | | $ | 2,005 | | | Asset Management and
Custody Banks | | Blackstone Group L.P. | | BX | | $ | 19,743 | | | $ | 51,549 | | | $ | 6,042 | | | $ | 1,542 | | | Asset Management and
Custody Banks | | BX | | $ | 36,884 | | | $ | 83,710 | | | $ | 5,660 | | | $ | 1,556 | | | Asset Management and
Custody Banks | | Motorola Solutions, Inc. | | MSI | | $ | 18,812 | | | $ | 22,762 | | | $ | 7,344 | | | $ | 967 | | | Communications Equipment | | MSI | | $ | 27,609 | | | $ | 32,832 | | | $ | 7,765 | | | $ | 1,048 | | | Communications Equipment | | Zimmer Biomet Holdings, Inc. | | ZBH | | $ | 21,156 | | | $ | 29,503 | | | $ | 7,933 | | | ($ | 379 | ) | | Health Care Equipment | | ZBH | | $ | 30,787 | | | $ | 38,303 | | | $ | 7,982 | | | $ | 1,132 | | | Health Care Equipment | | Waters Corporation | | WAT | | $ | 14,289 | | | $ | 13,938 | | | $ | 2,420 | | | $ | 594 | | | Life Sciences Tools & Services | | WAT | | $ | 15,055 | | | $ | 17,145 | | | $ | 2,407 | | | $ | 592 | | | Life Sciences Tools & Services | | VMware, Inc. Class A | | VMW | | $ | 15,069 | | | $ | 46,889 | | | $ | 8,691 | | | $ | 1,480 | | | Systems Software | | VMW | | $ | 16,683 | | | $ | 65,753 | | | $ | 9,752 | | | $ | 6,554 | | | Systems Software | | CA, Inc.(3) | | CA | | $ | 18,602 | | | $ | 18,125 | | | $ | 4,009 | | | $ | 404 | | | Systems Software | | | Median | | | | $ | 18,812 | | | $ | 46,889 | | | $ | 6,094 | | | $ | 967 | | | | | | | $ | 29,987 | | | $ | 60,744 | | | $ | 6,933 | | | $ | 1,132 | | | | | Roper | | ROP | | $ | 27,566 | | | $ | 32,082 | | | $ | 5,191 | | | $ | 944 | | | Industrial Conglomerates | | ROP | | $ | 36,860 | | | $ | 41,370 | | | $ | 5,367 | | | $ | 1,768 | | | Industrial Conglomerates |
Source: FactSet | (2) | Last four quarters available as of 12/31/18 |
(3) | Acquired by Broadcom on 11/5/2018; market capitalization and enterprise valuation as of acquisition date; revenue and net income equal to last four reported quarters prior to acquisition date19
|
Relative Performance Comparisons Caveat Long-Term Measurement Period Needed Due to Roper’s consistently strong performance, business transformation and GICS code change, and short-term stock price movements, comparing other companies’ performance to that of Roper can generate misleading or distorted results. As a result, we believe a long-term performance period most accurately portrays Roper’s relative performance. | | | | | | | | 34 | | | | | | Roper Technologies, Inc. 2020 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) Over shorter periods, performance comparisons can be skewed by the easier performance baselines of peer companies that, unlike Roper, have experienced periods of historical underperformance and benefit from a “bounce back” from a lower starting point. | | | | | | | | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement | | | | 27 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)
CEO Compensation The Compensation Committee considers many factors in determining the compensation of Roper’s CEO, and believes the compensation for the position is reasonable, appropriate, and aligned with shareholders’ best interests. Broad Responsibilities and Effective Leadership Mr. Jellison, the Company’sHunn joined Roper in 2011, and worked closely with our prior Chairman of the Board, CEO and President, was the key architect of our highly successful business strategy and was instrumental in building the sustainable high-performance and entrepreneurial culture at Roper. During his tenure, Mr. Brian D. Jellison, ledto contribute to the capital deployment process under which Roper has invested billions of dollars in acquisitions that have successfully created sustained superior returns for shareholders. Since joining RoperHe also played an increasingly important role in 2011,supporting Mr. Hunn increasingly contributedJellison’s efforts to that process—develop and enhance our highly successful business strategy and in playing a leading role for most acquisitions during this time. As the Company’s first Chief Operating Officer, he was responsible for driving results at the individual business level while also playing a key role in building the sustainable high-performance and entrepreneurial culture at Roper. Following his tenure.appointment as CEO and President in September 2018, Mr. Hunn now leadshas led the Company’s capital deployment efforts. Outstanding Performance and Value Creation Over the past 16 years, under Mr. Jellison’s leadership, Roper’s shareholders have earned a 19.0% compound annual return and a total shareholder return of 1,509%, more than five times the S&P 500’s total shareholder return of 295% over the same period. As designed and driven by Mr. Jellison,Beginning in 2003, Roper has undergone a business transformation with increasing returns on cash investment and margins, providing a platform for continued growth and future value creation for shareholders. Similarly, duringMr. Hunn made significant contributions to this effort since joining the Company. During Mr. Hunn’s seveneight years with the Company, including time as our Chief Operating Officer, Roper’s shareholders have earned an 18.1%a 22.6% compound annual return and a total shareholder return of 220%.451%, approximately 1.9 times the S&P 500’s total shareholder return of 237% over the same period.
Alignment with Shareholder Value Creation By design, Mr. Jellison’sHunn’s compensation wasis closely tied to the valueperformance of Roper stock. With the exceptionCompany. In 2019, approximately 84% of his 2018total direct compensation was tied to equity award (when the number of shares were reduced by 25%), the percentage increase in the value of Mr. Jellison’s equity awards over the last eight years exactly equaled the percentage increase in Roper’s stock price at time of grant, as the number of shares awarded has remained the same.awards. This tight alignment between compensation and share price createdcreates a strong incentive to profitably grow the enterprise. Our CompensationIn light of Mr. Hunn’s role in creating and sustaining a significant increase in shareholder value, the Committee isalso determined to continue our practice of tightly aligning the compensation paid toprovide Mr. Hunn to creation of value for our shareholders.with a long-term cash incentive in
order to incentivize continued and sustainable growth over the long term. For additional information on the long-term cash incentive see “CEO Long-Term Cash Incentive” below. External Comparisons Compensation for Roper’s CEO is within the range for Roper’s self-selected peers and high-performing long-tenured chief executive officers of publicly traded corporations. Among private equity firms, compensation for Roper’s CEO is below levels that would be expected for commensurate levels of performance. Further, compensation for our CEO has been reasonable relative to the incremental value created for shareholders (“sharing ratio”) as measured against Roper’s self-selected peers. ReflectiveIn reviewing Mr. Hunn’s compensation in early 2019, the Committee noted his compensation compared to similarly situated CEOs, and in light of succession planning considerations, his significant contributions toperformance as well as prospects for continued growth and longer term success under Mr. Hunn’s leadership, the Company, and intense competitive pressures from private equity firms, compensation for our current CEO in his prior role as our Chief Operating Officer, a role in which he served for most of 2018, was designed to be very competitive. Given timing considerations and the situation related to our prior CEO’s health issues in the latter part of 2018, the Compensation Committee decided to review our current CEO’s compensation as partincrease his salary 11% to $1,000,000 and maintain his annual bonus opportunity at 200% of the Committee’s standard executive officer compensation review process in early 2019.his base salary and not increase his equity incentive levels. Internal Pay Equity The Compensation Committee considers the scope of responsibilities, experience, and performance of our executive officers and believes all executive officers are appropriately compensated from an internal pay equity perspective. Specific considerations in regard to the CEO’s compensation include the breadth of his responsibilities and his leadership role in developing and executing Roper’s business strategy. Consistent with Roper’s lean organization, we made a conscious decision to not have many traditional corporate staff positions and levels. In addition to low corporate overhead, Roper’s decentralized model results in operating business leaders who are highly compensated but are not named executive officers. In addition to rigorous executive development programs for key employees who may become executive officers, the committee monitors compensation of other key Company leaders against external and internal standards. This supports our succession planning process and ensures its continuing effectiveness, as evidenced by the recent promotion of four officers from within the Company, including the Company’s performance since Mr. Hunn’s succession of Mr. Jellison as President and CEO. | | | | | | | | | 28 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 35 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) our succession planning process and ensures its continuing effectiveness, as evidenced by the Company’s performance since Mr. Hunn’s succession of Mr. Jellison as President and CEO in September 2018. Equity Grants The Compensation Committee grants awards of performance-based restricted stock and stock options to named executive officers under the Company’s 2016 Incentive Plan at the first regularly scheduled committee meeting each year. The exercise price for stock options is the closing price of Roper common stock on the date of grant. From time to time the Compensation Committee may grant additional awards in connection with promotions or increased responsibilities as well as to newly hired employees. ANALYSIS OF 20182019 COMPENSATION This section discusses compensation actions taken in 20182019 for our named executive officers, as reported in the “Executive Compensation” section below. Base Salary In 2018,2019, the Compensation Committee increased the salaries of four of our named executive officers to reflect their additional responsibilities:market practice and continued superior performance: Mr. Hunn from $900,000 to $900,000,$1,000,000, Mr. Conley from $480,000 to $540,000, Mr. Crisci from $600,000 to $600,000, Mr. Soni to $567,000,$635,000, and Mr. Stipancich from $680,000 to $680,000.$695,000. Annual Cash Incentive Incentive Opportunities Annual cash incentive opportunities for 20182019 for participating named executive officers, expressed as a percentage of base salary atyear-end were established as follows: Mr. Hunn (200%), Mr. Crisci (125%), Mr. SoniConley (100%) and Mr. Stipancich (100%(125%). Opportunities are reflective of market practice, and for Messrs. Hunn and Crisci wereMr. Stipancich was increased as parta result of his performance as well as the succession planning process. Our annual incentive bonuses are capped at the percentages above in the interest of risk mitigation and avoidance of a short-term focus to decision-making. Funding Schedule Similar to prior years, the annual cash incentive was determined based on the growth in adjusted net earnings. Due to the U.S. tax reform’s significant positive impact on Roper, the 2018 measurement excluded income taxes. The 20182019 adjusted net earnings before taxes were required to reach at least $1.371$1.200 billion (2017(2018 adjusted net earnings) for any bonus to be earned. At $1.371$1.200 billion of adjusted net earnings, before taxes, 35% of the full bonus opportunity would be earned. If adjusted net earnings before taxes increased 12% to $1.536$1.344 billion, then 100% of the full bonus amount would be earned. If between $1.371$1.200 billion and $1.536$1.344 billion, the percentage of the bonus opportunity earned would be determined through straight-line interpolation, as shown in the chart below. For 2018,2019, the adjusted net earnings before taxes for the Company exceeded 112% of the prior year; accordingly, the Compensation Committee approved payment of 100% of the bonus opportunity. The performance bonuses to our named executive officers for 20182019 are shown in the 20182019 Summary Compensation Table below under the“Non-Equity Incentive Plan Compensation” column. For fiscal 2018, the performance metric for the annual cash incentive was adjusted net earningsbefore taxes, as the Committee wanted to eliminate the potential windfall to executives resulting from the Tax Cuts and Jobs Act of 2017. In 2019, the Committee elected to use adjusted net earnings as the relevant performance metric. | | | | | | | | | | 36 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 29 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) 20182019 Annual Cash Incentive Schedule
 
Adjusted net earnings before taxes is net earnings increased or reduced to eliminate the effects of extraordinary items, accounting changes, income-related taxes, discontinued operations, restructuring of debt obligations, asset dispositions, asset write-downs or impairment charges, acquisition-related expenses, acquisition-related intangible amortization, impact of GAAP adjustments to acquired deferred revenue, litigation expenses and settlements, reorganization and restructuring programs, andnon-recurring or special items (as discussed in the Company’s quarterly earnings releases). Prior CEO Long-Term Cash Incentive
2018-222019-23 Incentive Opportunity
For 2018,In 2019, the annual cash incentive for our prior CEO was again converted toCommittee provided Mr. Hunn with a long-term cash incentive. As for the 2014, 2015, 2016, and 2017 awards, the performance period covered five yearsincentive award to emphasize the importance of long-term sustained earnings. Our prior CEO’s 2018 incentive opportunity was setThe Committee established a five- year performance period commencing January 1, 2019 and concluding December 31, 2023. The maximum amount that may be earned at 225%the end of base salary, the same as prior years.five-year period is $18.6 million. The2018-22 cash incentive for our prior CEO was to be determined based on Company’s cumulative adjusted EBITDA over the growth in adjusted net earnings, as defined above for the 2018 annual cash incentive. Due to U.S. tax reform’s significant positive impact on Roper, the 2018 measurement excluded
income taxes. Adjusted net earnings before taxes for thefive-year performance period from 2018 to 2022 would have beenis required to reach at least $6.855$10.325 billion for any cash incentiveportion of the award to be earned.
At $6.855 If cumulative adjusted EBITDA is $10.325 billion, ofthen the amount to be awarded will be $6.512 million.1 If the cumulative adjusted net earnings before taxes, 35% of
EBITDA reaches $11.781 billion, then the full bonus opportunity would be earned. If adjusted net earnings before taxes increase by 12% to $7.678 billion, then 100% of the full bonus amount wouldaward, $18.6 million, will be earned. If between $6.855$10.325 billion and $7.678$11.781 billion, the percentage of the bonuslong-term incentive opportunity earned was towill be determined through straight-line interpolation, as shown in the chart below. The cumulative adjusted EBITDA target is subject to adjustment on an annual basis to reflect the impact of material acquisitions and divestitures. | 1 | To the extent Mr. Hunn elects not to defer payment of the incentive amount or is unable to defer such amount, the incentive amount that is not deferred shall be increased by 7.5%. |
Prior CEO2018-22 Long-Term Cash Incentive Schedule
See footnote to immediately preceding chart for definition of adjusted net earnings before taxes.
| | | | | | | | | 30 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 37 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) CEO2014-182019-23 Long-Term Cash Incentive OpportunitySchedule 
ForAdjusted EBITDA is earnings before interest, income-related taxes, depreciation and amortization, increased or reduced to eliminate the prior CEO’seffects of extraordinary items, discontinued operations, restructuring of debt obligations, asset dispositions, asset write-downs or impairment charges, acquisition-related expenses, litigation expenses and settlements, reorganization and restructuring programs, and2014-18non-recurring long-term cash incentive opportunity, adjusted netor special items (as discussed in the Company’s quarterly earnings for the period from 2014 to 2018 of $2.389 billion were required for any cash incentive to be earned. If adjusted net earnings increased by at least 15% to $2.746 billion, then 100% of the full bonus amount would be earned. The actual adjusted net earnings for the Company exceeded $2.746 billion; accordingly, the Compensation Committee approved payment of 100% of the long-term cash incentive opportunity.releases).
Long-Term Stock Incentives In 2018, we awarded performance-based restricted stock to our prior CEO (Mr. Jellison) and awarded performance-based restricted stock and stock options to our current CEO (Mr. Hunn). In 2018,2019, we awarded stock options and performance-based restricted sharesstock to our CEO and our other named executive officers, other than Mr. Soni.officers. The 2018 award to Mr. Jellison, as a number of shares, was reduced by 25%, while the awardsstock options awarded to Messrs. Hunn, Crisci and Stipancich, were60,000, 25,000 and 15,000, respectively, remained unchanged from the prior year. With respect to performance-based restricted stock, Mr. Hunn received 45,000 restricted shares, unchanged from the prior year. In light of their contributions to the continued superior performance of the Company, the number of performance-based restricted shares awarded to Mr. Crisci increased from 12,000 to reflect their additional responsibilities.14,000, or 16.6%; and to Mr. Stipancich from 7,500 to 8,250, or 10%. In 2019, following his increase in responsibilities, Mr. Conley’s received 14,300 stock options and the number of performance-based restricted shares awarded to Mr.��Conley increased from 5,000 to 8,200, or 39%. These awards are shown in the 20182019 Grants of Plan-Based Awards table. Performance Vesting for 2018 Awards
Our priorThe CEO’s 2018 equity award would have vested2019 stock options vest on the third anniversary of the date of grant and his performance-based restricted stock may only vest at the end of a three-year performance period.
20182019 equity awards to other named executive officers (including the award made to Mr. Hunn prior to his appointment as CEO) vest 50% after year 2 and 50% after year 3.
Vesting of restricted shares is 100% performance-based (none vest by time alone). For 50% of the 20182019 restricted stock awards to vest, $4.6$5.0 billion in adjusted EBITDA (as defined above for adjusted net earnings with the exclusion of the following: expenses, interest, taxes, depreciation, andnon-acquisition related amortization) must be achieved over the three-year measurement period.performance period, and no portion of the award will vest if the Company fails to achieve $4.6 billion in adjusted EBITDA. Except for the prior CEO’s awards, which vest only at the end of the performance period, up to 50% of the EBITDA portion can be earned at the end of year 2.2 provided that thepro-rated adjusted EBITDA target is satisfied. | • | | For the other 50% of the 20182019 restricted stock awards to vest, operating cash flow less capital expenditures and capitalized software (as a percentage of net revenue) must be at the 75th percentile of the S&P 500 (excluding finance, real estate, and utilities) and no portion of the award will vest if the Company fails to reach at least the 50th percentile. Except for the prior CEO’s awards, which vest only at the end of the performance period, up to 50% of the cash flow portion can be earned at the end of year 2. |
| | | | | | | | 38 | | | | | | Roper Technologies, Inc. 2020 Proxy Statement |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED) ADDITIONAL INFORMATION ABOUT OUR PROGRAM Other arrangements and considerations important to a shareholder’s understanding of our overall executive compensation program are described below. Share Ownership and Retention Guidelines We believe named executive officers should have a significant equity interest in the Company. To promote equity ownership and further align the interests of named executive officers with shareholders, we adopted share ownership and retention guidelines for our named executive officers. The guidelines vary based upon the named executive officer’s position and are expressed as a number of shares which, as shown below, result in guidelines higher than market norms. All named executive officers are in compliance with our ownership requirements and hold shares well in excess of the applicable guidelines. | | Position | | Guideline
Number
of
Shares* | | | Guideline Market Value
atYear-End
Close** | | | Salary | | | Guideline
Multiple
of Salary | | | Guideline
Number
of
Shares* | | | Guideline Market Value
atYear-End
Close** | | | Salary | | | Guideline
Multiple
of Salary | | Current CEO | | | 100,000 | | | $ | 26,652,000 | | | $ | 900,000 | | | | 29.6x | | | | 100,000 | | | $ | 35,423,000 | | | $ | 1,000,000 | | | | 35.4x | | Prior CEO | | | 100,000 | | | $ | 26,652,000 | | | $ | 1,225,000 | | | | 21.7x | | | Other Named Executive Officers | | | 12,000 | | | $ | 3,198,240 | | | $ | 615,667 | | | | 5.2x | | | Average of Other Named Executive Officers | | | | 12,000 | | | $ | 4,250,760 | | | $ | 623,333 | | | | 6.8x | |
| * | Includes vested and unvested. |
| ** | Based on closing market price of our common stock on December 31, 20182019 of $266.52$354.23 per share. |
| | | | | | | | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement | | | | 31 |
COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)
Until the ownership requirements are met, a named executive officer must retain 100% of any applicable shares received (on a net after tax basis) under our equity compensation program. Anti-Hedging and Anti-Pledging Policy We prohibit our named executive officers and directors from engaging in transactions involving derivative instruments with respect to Company securities, and other securities immediately convertible or exchangeable into Company securities, and from pledging shares of Company common stock. “Clawback” Policy In the event of a material restatement of the Company’s financial results, other than a restatement due to changes in accounting principles or applicable law or interpretations thereof, the Board will review the facts and circumstances that led to the requirement for the restatement and will take such actions, including clawback, as it deems necessary or appropriate. The Board will consider whether any named executive officer received cash or equity compensation based on the original financial statements because it appeared financial performance targets had been met, when in fact such targets were not achieved based on the restatement. The Board will also consider the accountability of any named executive officer whose acts or omissions were responsible in whole or in part for the events that led to the restatement and whether such acts or omissions constituted misconduct. Regulatory Considerations Effective for taxable years beginning after December 31, 2017, the Tax Cuts and Jobs Act changed certain aspects of executive compensation, including elimination of a Company’s ability to deduct “performance-based” compensation in excess of $1 million to named executive officers. We will continue to consider tax implications in making compensation decisions and, when believed to be in the best long-term interests of our shareholders, we may provide compensation that is not fully deductible. In making decisions about executive compensation, we also consider the impact of other regulatory provisions, including Section 409A of the Code regardingnon-qualified deferred compensation and Section 280G of the Code regarding compensation pursuant to a change in control. We also consider how various elements of compensation will impact our financial results. For example, ASC Topic 718, the accounting standard that determines the cost to be recognized for equity awards, is considered when awarding stock options and restricted stock awards. | | | | | | | | | | | | | Roper Technologies, Inc. 2020 Proxy Statement | | | | 39 |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During 2018,2019, Ms. Thatcher and Messrs. Knowling, Johnson and Prezzano served on the Compensation Committee. No member of the Compensation Committee was, during 2018,2019, an officer or employee of the Company, was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 ofRegulation S-K under the Securities Act of 1933 (the “Securities Act”). During 2018,2019, none of the Company’s executive officers served on either the board of directors or the compensation committee of any other entity, any officers of which served on either the Board of Directors or the Compensation Committee of the Company. COMPENSATION COMMITTEE REPORT We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement. Submitted by: Robert E. Knowling, Jr.,Laura G. Thatcher, Chairman
Robert D. Johnson Wilbur J. Prezzano | | | | | | | 3240 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
EXECUTIVE COMPENSATION The following table sets forth certain information with respect to compensation paid to our current and prior principal executive officers,officer, our principal financial officer, and our other executive officers for the fiscal year ended December 31, 2018.2019. In this section, we refer to the individuals in the 20182019 Summary Compensation Table as our “named executive officers.” 20182019 Summary Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary(1) ($) | | | Bonus(2)
($) | | | Stock
Awards(3)
($) | | | Option
Awards(3) ($) | | | Non-Equity Incentive Plan Compensation(1)(4) ($) | | | Change in Pension Value & Nonqualified Deferred Compensation
Earnings(5) ($) | | | All Other Compensation(6)
($) | | | Total Compensation ($) | | | | | | | | | | | | L. Neil Hunn(7) | | | 2018 | | | | 900,000 | | | | - | | | | 12,406,050 | | | | 3,241,404 | | | | 1,800,000 | | | | - | | | | 190,913 | | | | 18,538,367 | | | President and Chief Executive Officer | | | 2017 | | | | 800,000 | | | | - | | | | 8,343,900 | | | | 1,412,348 | | | | 1,200,000 | | | | - | | | | 119,625 | | | | 11,875,873 | | | | | | | | | | | | Brian D. Jellison(8) | | | 2018 | | | | 1,030,115 | | | | - | | | | 31,015,125 | | | | - | | | | 2,756,250 | | | | - | | | | 129,828 | | | | 34,931,318 | | | Prior President and Chief Executive Officer and Prior Executive Chairman of the Board | | | 2017 | | | | 1,225,000 | | | | - | | | | 27,813,000 | | | | - | | | | - | | | | - | | | | 120,675 | | | | 29,158,675 | | | | | 2016 | | | | 1,225,000 | | | | - | | | | 24,960,000 | | | | - | | | | - | | | | - | | | | 131,166 | | | | 26,316,166 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Robert C. Crisci | | | 2018 | | | | 600,000 | | | | - | | | | 3,308,280 | | | | 1,350,585 | | | | 750,000 | | | | - | | | | 117,843 | | | | 6,126,708 | | | Executive Vice President and Chief Financial Officer | | | 2017 | | | | 498,030 | | | | - | | | | 2,528,980 | | | | 850,766 | | | | 550,000 | | | | - | | | | 66,792 | | | | 4,494,568 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | John K. Stipancich | | | 2018 | | | | 680,000 | | | | - | | | | 2,067,675 | | | | 810,351 | | | | 680,000 | | | | - | | | | 122,450 | | | | 4,360,476 | | | Executive Vice President, General Counsel and Corporate Secretary | | | 2017 | | | | 650,000 | | | | - | | | | 1,373,040 | | | | 512,474 | | | | 650,000 | | | | - | | | | 82,243 | | | | 3,267,757 | | | | | 2016 | | | | 331,136 | | | | 375,000 | | | | 2,039,160 | | | | 606,312 | | | | 143,902 | | | | - | | | | 118,263 | | | | 3,613,773 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Paul J. Soni | | | 2018 | | | | 567,000 | | | | - | | | | 2,029,020 | | | | - | | | | 567,000 | | | | - | | | | 120,244 | | | | 3,283,264 | | | Executive Vice President | | | 2017 | | | | 531,439 | | | | - | | | | 1,112,520 | | | | 423,704 | | | | 550,000 | | | | - | | | | 87,719 | | | | 2,705,382 | | | | | 2016 | | | | 475,000 | | | | - | | | | 998,400 | | | | 396,229 | | | | 209,000 | | | | - | | | | 79,792 | | | | 2,158,421 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary(1) ($) | | | Stock
Awards(2)
($) | | | Option
Awards(2) ($) | | | Non-Equity Incentive Plan Compensation(1)(3) ($) | | | Change in Pension Value & Nonqualified Deferred Compensation
Earnings(4) ($) | | | All Other Compensation(5)
($) | | | Total Compensation ($) | | | | | | | | | | | L. Neil Hunn | | | 2019 | | | | 1,000,000 | | | | 12,163,500 | | | | 3,396,474 | | | | 2,000,000 | | | | - | | | | 252,440 | | | | 18,812,414 | | | President and Chief | | | 2018 | | | | 900,000 | | | | 12,406,050 | | | | 3,241,404 | | | | 1,800,000 | | | | - | | | | 190,913 | | | | 18,538,367 | | | Executive Officer | | | 2017 | | | | 800,000 | | | | 8,343,900 | | | | 1,412,348 | | | | 1,200,000 | | | | - | | | | 119,625 | | | | 11,875,873 | | | | | | | | | | | Robert C. Crisci | | | 2019 | | | | 635,000 | | | | 3,784,200 | | | | 1,415,198 | | | | 793,750 | | | | - | | | | 139,901 | | | | 6,768,049 | | | Executive Vice President | | | 2018 | | | | 600,000 | | | | 3,308,280 | | | | 1,350,585 | | | | 750,000 | | | | - | | | | 117,843 | | | | 6,126,708 | | | and Chief Financial Officer | | | 2017 | | | | 498,030 | | | | 2,528,980 | | | | 850,766 | | | | 550,000 | | | | - | | | | 66,792 | | | | 4,494,568 | | | | | | | | | | | John K. Stipancich | | | 2019 | | | | 695,000 | | | | 2,229,975 | | | | 849,119 | | | | 868,750 | | | | - | | | | 132,000 | | | | 4,774,843 | | | Executive Vice President, | | | 2018 | | | | 680,000 | | | | 2,067,675 | | | | 810,351 | | | | 680,000 | | | | - | | | | 122,450 | | | | 4,360,476 | | | General Counsel and Corporate Secretary | | | 2017 | | | | 650,000 | | | | 1,373,040 | | | | 512,474 | | | | 650,000 | | | | - | | | | 82,243 | | | | 3,267,757 | | | | | | | | | | | Jason Conley | | | 2019 | | | | 540,000 | | | | 2,216,460 | | | | 809,493 | | | | 540,000 | | | | - | | | | 109,597 | | | | 4,215,550 | | | Vice President, Controller | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Amounts shown include, as applicable, deferrals to the 401(k) plan and theNon-Qualified Retirement Plan. |
| (2) | The amount in this column represents a lump sum bonus paid to Mr. Stipancich upon commencement of his employment.
|
(3) | The dollar values shown represent the grant date fair values for restricted stock and option awards calculated in accordance with ASC Topic 718. The assumptions used in determining the grant date fair values of these option awards are set forth in Note 11 to our consolidated financial statements for 2018,2019, which are included in our Annual Report on Form10-K for the fiscal year ended 20182019 filed with the SEC. There is no assurance that these amounts will be realized. The restricted stock awards are all subject to performance-based vesting criteria. The performance-based criteria for awards granted in 20182019 are described in the CD&A under “Analysis of 20182019 Compensation—Long-Term Stock Incentives,” and the vesting schedule for awards granted in 20182019 is set forth in the notes to the 20182019 Outstanding Equity Awards at Fiscal Year End table below. |
(4)(3) | The amounts in this column reflect payments made pursuant to our annual cash incentive program, which is described above in the CD&A under “Analysis of 20182019 Compensation—Annual Cash Incentive” and “Analysis of 2018 Compensation—CEO Long-Term Cash Incentive.” |
(5)(4) | TheNon-Qualified Retirement Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules. |
(6)(5) | Amounts reported in the “All Other Compensation” column for 20182019 include the following items. In respect of any of these items that constitute perquisites, the value shown is the Company’s incremental cost. |
| | | | | | | | | | | | | | | | | | | | | | Name | | Club Memberships ($) | | | Company
Car ($) | | | Additional Medical
Services ($) | | | Financial
Planning ($) | | | Contributions
to Defined
Contribution
Plans(a) ($) | | L. Neil Hunn | | | 10,105 | | | | 24,000 | | | | 6,004 | | | | 1,957 | | | | 210,375 | | | | | | | | Robert C. Crisci | | | 5,648 | | | | 24,000 | | | | 6,004 | | | | - | | | | 104,250 | | | | | | | | John K. Stipancich | | | - | | | | 24,000 | | | | 4,500 | | | | - | | | | 103,500 | | | | | | | | Jason Conley | | | 7,576 | | | | 19,000 | | | | 6,146 | | | | - | | | | 76,875 | |
| (a) | Reflects contributions to theNon-Qualified Retirement Plan and the 401(k) plan. |
| | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 3341 |
EXECUTIVE COMPENSATION(CONTINUED) | | | | | | | | | | | | | | | | | | | | | | Name | | Club
Memberships ($) | | | Company Car ($) | | | Additional Medical Services ($) | | | Financial Planning ($) | | | Contributions to Defined Contribution Plans(a) ($) | | L. Neil Hunn | | | 4,029 | | | | 24,000 | | | | 3,500 | | | | 1,884 | | | | 157,500 | | | | | | | | Brian D. Jellison | | | - | | | | 24,000 | | | | 4,800 | | | | 23,769 | | | | 77,259 | | | | | | | | Robert C. Crisci | | | 4,093 | | | | 24,000 | | | | 3,500 | | | | - | | | | 86,250 | | | | | | | | John K. Stipancich | | | - | | | | 19,200 | | | | 3,500 | | | | - | | | | 99,750 | | | | | | | | Paul J. Soni | | | 9,669 | | | | 19,000 | | | | 3,800 | | | | 4,000 | | | | 83,775 | |
(a) | Reflects contributions to theNon-Qualified Retirement Plan and the 401(k) plan.
|
(7) | Mr. Hunn was appointed President and CEO on September 1, 2018.
|
(8) | Mr. Jellison, our prior President and CEO, served as President and CEO until September 1, 2018 and was appointed Executive Chairman of the Board on September 1, 2018, a position in which he served the Company until his death on November 2, 2018.
|
20182019 Grants of Plan-Based Awards
The following table sets forth certain information with respect to grants of plan-based awards to the named executive officers for the fiscal year ended December 31, 2018.2019. | | | | | | | Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards(1) | | | Estimated
Future
Payouts
Under
Equity
Incentive
Plan
Awards | | | All Other Option Awards:# of Securities Underlying Options | | Exercise / Base Price of Option Awards ($/Sh) | | Grant Date Fair Value(5) ($) | | | | | | Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards(1) | | | Estimated
Future
Payouts
Under
Equity
Incentive
Plan
Awards | | | All Other Option Awards:# of Securities Underlying Options | | Exercise / Base Price of Option Awards ($/Sh) | | Grant Date Fair Value(5) ($) | | | Name | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Target (#) | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Target (#) | | | L. Neil Hunn | | | 01/19/2018 | | | | | | | | | | 45,000 | (2) | | | | | | | 12,406,050 | | | | 01/15/2019 | | | | | | | | | | 45,000 | (2) | | | | | | | 12,163,500 | | | | | | 01/19/2018 | | | | | | | | | | | | 60,000 | (4) | | | 275.69 | | | | 3,241,404 | | | | 01/15/2019 | | | | | | | | | | | | 60,000 | (3) | | | 270.30 | | | | 3,396,474 | | | | | | | 06/06/2018 | | | | 630,000 | | | | 1,800,000 | | | | 1,800,000 | | | | | | 01/15/2019 | | | | 700,000 | | | | 2,000,000 | | | | 2,000,000 | | | | | | | | | | | Brian D. Jellison | | | 01/19/2018 | | | | | | | | | | 112,500 | (3) | | | | | | | 31,015,125 | | | | | | | | 06/06/2018 | | | | 964,688 | | | | 2,756,250 | | | | 2,756,250 | | | | | | 11/25/2019 | | | | 6,512,000 | | | | 18,605,000 | | | | 18,605,000 | | | | | Robert C. Crisci | | | 01/19/2018 | | | | | | | | | | 12,000 | (2) | | | | | | | 3,308,280 | | | | 01/15/2019 | | | | | | | | | | 14,000 | (2) | | | | | | | 3,784,200 | | | | | | 01/19/2018 | | | | | | | | | | | | 25,000 | (4) | | | 275.69 | | | | 1,350,585 | | | | 01/15/2019 | | | | | | | | | | | | 25,000 | (3) | | | 270.30 | | | | 1,415,198 | | | | | | | 06/06/2018 | | | | 262,500 | | | | 750,000 | | | | 750,000 | | | | | | 01/15/2019 | | | | 277,812 | | | | 793,750 | | | | 793,750 | | | | | John K. Stipancich | | | 01/19/2018 | | | | | | | | | | 7,500 | (2) | | | | | | | 2,067,675 | | | | 01/15/2019 | | | | | | | | | | 8,250 | (2) | | | | | | | 2,229,975 | | | | | | 01/19/2018 | | | | | | | | | | | | 15,000 | (4) | | | 275.69 | | | | 810,351 | | | | 01/15/2019 | | | | | | | | | | | | 15,000 | (3) | | | 270.30 | | | | 849,119 | | | | | | | 06/06/2018 | | | | 238,000 | | | | 680,000 | | | | 680,000 | | | | | | 01/15/2019 | | | | 304,062 | | | | 868,750 | | | | 868,750 | | | | | Paul J. Soni | | | 03/21/2018 | | | | | | | | | | 7,000 | (2) | | | | | | | 2,029,020 | | | Jason Conley | | | | 01/15/2019 | | | | | | | | | | 8,200 | (2) | | | | | | | 2,216,460 | | | | | | | 06/06/2018 | | | | 186,004 | | | | 531,439 | | | | 531,439 | | | | | | 01/15/2019 | | | | | | | | | | | | 14,300 | (3) | | | 270.30 | | | | 809,493 | | | | | | | | 01/15/2019 | | | | 189,000 | | | | 540,000 | | | | 540,000 | | | |
| (1) | For an explanation of the material terms, refer to the CD&A section above captioned “Analysis of 20182019 Compensation—Annual Cash Incentive and, with respect to Mr. Hunn’s award dated November 25, 2019, “Analysis of 20182019 Compensation—CEO Long-Term Cash Incentive.” To the extent Mr. Hunn elects not to defer payment of the Long-Term Cash Incentive amount or is unable to defer such amount, the incentive amount that is not deferred shall be increased by 7.5%. Amounts paid under these programs for 20182019 are set forth in the 20182019 Summary Compensation Table. |
| (2) | The performance restricted shares awarded to Mr. Hunn vest in November 2021. The performance restricted shares awarded to Messrs. Crisci, Stipancich and Conley vest in two equal installments in November 20192020 and November 20202021. All awards are subject to the performance criteria described in the CD&A under “Analysis of 20182019 Compensation—Long-Term Stock Incentives.” Dividends on restricted shares will be paid only if the shares are earned by performance. |
| | | | | | | 34 | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement |
EXECUTIVE COMPENSATION(CONTINUED)
| (3) | The performance restricted shares grantedstock options awarded to Mr. Jellison vestedHunn vest in November 2018 upon his death, pursuant to the terms of the Company’s 2016 Incentive Plan and award agreements. |
(4) | January 2022. The stock options awarded to Messrs. Crisci, Stipancich and Conley vest in two equal installments in January 20202021 and 2021, and2022. All stock options expire on the tenth anniversary of the grant. The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant. |
(5)(4) | The dollar values reflect the grant date fair value of the awards as calculated in accordance with ASC Topic 718. |
| | | | | | | | 42 | | | | | | Roper Technologies, Inc. 2020 Proxy Statement |
EXECUTIVE COMPENSATION(CONTINUED) 20182019 Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information with respect to outstanding equity awards at December 31, 20182019 for the named executive officers. | | Name | | Option Awards | | Stock Awards | | | Option Awards | | Stock Awards | | | | # of Securities Underlying Unexercised Options Exercisable | | # of Securities Underlying Unexercised Options Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | # of Shares or Units of Stock That Have Not
Vested | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: # of Unearned Shares, Units or Other Rights That Have Not Vested | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(1) | | | # of Securities Underlying Unexercised Options Exercisable | | # of Securities Underlying Unexercised Options Unexercisable | | Option Exercise Price ($) | | Option Expiration Date | | # of Shares or Units of Stock That Have Not
Vested | | Market Value of Shares or Units of Stock That Have Not Vested ($) | | Equity Incentive Plan Awards: # of Unearned Shares, Units or Other Rights That Have Not Vested | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(1) | | L. Neil Hunn | | | 32,000 | | | | | | 68.91 | | | | 09/30/2021 | | | | | | | | | | | | 25,000 | | | | | | 115.22 | | | | 01/17/2023 | | | | | | | | | | | | | 25,000 | | | | | | 115.22 | | | | 01/17/2023 | | | | | | | | | | | | 30,000 | | | | | | 125.68 | | | | 11/19/2023 | | | | | | | | | | | | | 30,000 | | | | | | 125.68 | | | | 11/19/2023 | | | | | | | | | | | | 30,000 | | | | | | 156.40 | | | | 11/17/2024 | | | | | | | | | | | | | 30,000 | | | | | | 156.40 | | | | 11/17/2024 | | | | | | | | | | | | 30,000 | | | | | | 185.75 | | | | 11/17/2025 | | | | | | | | | | | | | 30,000 | | | | | | 186.75 | | | | 11/17/2025 | | | | | | | | | | | | 20,000 | | | | 20,000 | (2) | | | 185.42 | | | | 01/19/2027 | | | | | | | | | | | | | | | 40,000 | (2) | | | 185.42 | | | | 01/19/2027 | | | | | | | | | | | | | | 60,000 | (3) | | | 275.69 | | | | 01/19/2028 | | | | | | | | | | | | | | | 60,000 | (3) | | | 275.69 | | | | 01/19/2028 | | | | | | | | | | | | | | 60,000 | (4) | | | 270.30 | | | | 01/15/2029 | | | | | | | | | | | | | | 135,000 | (9)(13) | | | 35,980,200 | | | | 112,500 | (7)(11) | | | 39,850,875 | | Brian D. Jellison(4) | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | Robert C. Crisci | | | 5,000 | | | | | | 119.65 | | | | 04/30/2023 | | | | | | | | | | | | 5,000 | | | | | | 119.65 | | | | 04/30/2023 | | | | | | | | | | | | | | 5,000 | | | | | | 134.23 | | | | 03/11/2024 | | | | | | | | | | | | | 5,000 | | | | | | 134.23 | | | | 03/11/2024 | | | | | | | | | | | | 8,000 | | | | | | 145.75 | | | | 01/16/2025 | | | | | | | | | | | | | 8,000 | | | | | | 145.75 | | | | 01/16/2025 | | | | | | | | | | | | 8,000 | | | | | | 170.61 | | | | 03/09/2026 | | | | | | | | | | | | | 4,000 | | | | 4,000 | (5) | | | 170.61 | | | | 03/09/2026 | | | | | | | | | | | | 6,000 | | | | 6,000 | (2) | | | 185.42 | | | | 01/19/2027 | | | | | | | | | | | | | | | 12,000 | (2) | | | 185.42 | | | | 01/19/2027 | | | | | | | | | | | | 5,000 | | | | 5,000 | (5) | | | 228.84 | | | | 06/09/2027 | | | | | | | | | | | | | | | 10,000 | (6) | | | 228.84 | | | | 06/09/2027 | | | | | | | | | | | | | | 25,000 | (3) | | | 275.69 | | | | 01/19/2028 | | | | | | | | | | | | | | | 25,000 | (3) | | | 275.69 | | | | 01/19/2028 | | | | | | | | | | | | | | 25,000 | (6) | | | 270.30 | | | | 01/15/2029 | | | | | | | | | | | | | | 25,000 | (10)(13) | | | 6,663,000 | | | | 27,000 | (8)(11) | | | 9,564,210 | | John K. Stipancich | | | 9,000 | | | | 9,000 | (7) | | | 169.93 | | | | 06/22/2026 | | | | | | | | | | | | 4,000 | | | | | | 169.93 | | | | 06/22/2026 | | | | | | | | | | | | | | | 12,000 | (6) | | | 228.84 | | | | 06/09/2027 | | | | | | | | | | | | 6,000 | | | | 6,000 | (5) | | | 228.84 | | | | 06/09/2027 | | | | | | | | | | | | | | | 15,000 | (3) | | | 275.69 | | | | 01/19/2028 | | | | | | | | | | | | | | 15,000 | (3) | | | 275.69 | | | | 01/19/2028 | | | | | | | | | | | | | | 17,500 | (11)(13) | | | 4,664,100 | | | | | | 15,000 | (6) | | | 270.30 | | | | 01/15/2029 | | | | | | | | | | Paul J. Soni | | | 12,000 | | | | | | 51.11 | | | | 01/22/2020 | | | | | | | | | | | | | | | | 18,000 | (9)(11) | | | 6,376,140 | | Jason Conley | | | | 2,500 | | | | | | 73.56 | | | | 01/20/2021 | | | | | | | | | | | | | 12,000 | | | | | | 73.56 | | | | 01/20/2021 | | | | | | | | | | | | 5,000 | | | | | | 93.62 | | | | 01/18/2022 | | | | | | | | | | | | | 12,000 | | | | | | 93.62 | | | | 01/18/2022 | | | | | | | | | | | | 5,000 | | | | | | 115.32 | | | | 01/17/2023 | | | | | | | | | | | | | 12,000 | | | | | | 115.22 | | | | 01/17/2023 | | | | | | | | | | | | 5,000 | | | | | | 134.23 | | | | 03/11/2024 | | | | | | | | | | | | | 12,000 | | | | | | 140.86 | | | | 01/16/2024 | | | | | | | | | | | | 6,000 | | | | | | 165.97 | | | | 03/11/2025 | | | | | | | | | | | | | 12,000 | | | | | | 145.75 | | | | 01/16/2025 | | | | | | | | | | | | 6,000 | | | | | | 170.61 | | | | 03/09/2026 | | | | | | | | | | | | | 6,000 | | | | 6,000 | (8) | | | 166.40 | | | | 01/21/2026 | | | | | | | | | | | | 5,000 | | | | 5,000 | (2) | | | 185.42 | | | | 01/19/2027 | | | | | | | | | | | | | | | 12,000 | (2) | | | 185.42 | | | | 01/19/2027 | | | | | | | | | | | | | | 12,000 | (3) | | | 275.69 | | | | 01/19/2028 | | | | | | | | | | | | | | 10,000 | (12)(13) | | | 2,665,200 | | | | | | 14,300 | (6) | | | 270.30 | | | | 01/15/2029 | | | | | | | | | | | | | | | 11,700 | (10)(11) | | | 4,144,491 | |
| (1) | Calculated by multiplying $266.52,$354.23, the closing market price of our common stock on December 31, 2018,2019, by the number of restricted shares that have not vested. |
| (2) | These stock options were granted on January 19, 2017 with unexercisable shares vesting in two equal installments in January 2019 and 2020. |
| | | | | | | | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement | | | | 35 |
EXECUTIVE COMPENSATION(CONTINUED)
| (3) | These stock options were granted on January 19, 2018 with unexercisable shares vesting in two equal installments in January 2020 and 2021. |
| (4) | Mr. Jellison’s outstanding restrictedThese stock awards vestedoptions were granted on November 2, 2018, the date of his death, pursuant to the terms of the Company’s 2016 Incentive Plan and award agreements.January 15, 2019 with unexercisable shares vesting in January 2022.
|
| (5) | These stock options were granted on March 9, 2016 with unexercisable shares vesting in March 2019.
|
(6) | These stock options were granted on June 9, 2017 with unexercisable shares vesting in two equal installments in June 2019 andJanuary 2020. |
(7) | These stock options were granted on June 22, 2016 with unexercisable shares vesting in June 2019.
|
(8)(6) | These stock options were granted on January 21, 201615, 2019 with unexercisable shares vesting in two equal installments in January 2019.2021 and 2022. |
| | | | | | | | | | | | | Roper Technologies, Inc. 2020 Proxy Statement | | | | 43 |
EXECUTIVE COMPENSATION(CONTINUED) (9)(7) | This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows: |
| | (I) | 45,000 shares remaining from 45,000 shares granted on November 17, 2015 and vesting in November 2020; |
| | (II) | 45,00022,500 shares remaining from 45,000 shares granted on January 19, 20172018 and vesting in two equal installments in January 2019 and November 2019;2020; and
|
| | (III) | 45,000 shares remaining from 45,000 shares granted on January 19, 201815, 2019 and vesting in two equal installments in November 2019 and November 2020.2021. |
(10) | This represents multiple restricted stock awards with the remaining shares of each grant vesting, (shares represented in footnotesIII-V subject to certification that applicable Company performance conditions have been met, as follows):
|
| (I) | 2,500 shares remaining from 2,500 shares granted on November 17, 2015 and vesting in January 2019;
|
| (II) | 1,000 shares remaining from 2,000 shares granted on March 9, 2016 vesting in March 2019;
|
| (III) | 2,500 shares remaining from 5,000 shares granted on January 19, 2017 and vesting in November 2019;
|
| (IV) | 7,000 shares remaining from 7,000 shares granted on June 9, 2017 and vesting in June 2020; and
|
| (V) | 12,000 shares remaining from 12,000 shares granted on January 19, 2018 and vesting in two equal installments in November 2019 and November 2020.
|
(11)(8) | This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows: |
| | (I) | 4,0007,000 shares remaining from 12,0007,000 shares granted on June 22, 20169, 2017 and vesting in November 2019;June 2020;
|
| | (II) | 6,000 shares remaining from 12,000 shares granted on January 19, 2018 and vesting in November 2020; and |
| (III) | 14,000 shares remaining from 14,000 shares granted on January 15, 2019 and vesting in two equal installments in November 2020 and November 2021. |
| (9) | This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows: |
| (I) | 6,000 shares remaining from 6,000 shares granted on June 9, 2017 and vesting in June 2020; and |
| | (III)(II) | 7,5003,750 shares remaining from 7,500 shares granted on January 19, 2018 and vesting in November 2020; and
|
| (III) | 8,250 shares remaining from 8,250 shares granted on January 15, 2019 and vesting in two equal installments in November 20192020 and November 2020.2021. |
(12)(10) | This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows: |
| | (I) | 3,0001,000 shares remaining from 6,0001,000 shares granted on January 19,June 9, 2017 and vesting in November 2019; andJune 2020;
|
| | (II) | 7,0002,500 shares remaining from 7,0005,000 shares granted on March 21,January 19, 2018 and vesting in November 2020; and
|
| (III) | 8,200 shares remaining from 8,200 shares granted on January 15, 2019 and vesting in two equal installments in November 20192020 and 2020.November 2021. |
(13)(11) | For all restricted stock awards granted, in November 2015 (to Mr. Hunn), June 2016, January 2017, June 2017, January 2018 and March 2018, the vesting only occurs if the Compensation Committee certifies our Company’s attainment of related performance goals. |
| | | | | | | 3644 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
EXECUTIVE COMPENSATION(CONTINUED) 20182019 Option Exercises and Stock Vested
| | | | | | | | | | | | | | | | | | | | | | Name | | Option Awards | | Stock Awards | | # of Shares Acquired
on Exercise | | Value Realized Upon
Exercise ($) | | # of Shares Acquired
on Vesting | | Value Realized on
Vesting ($) | | | | | | L. Neil Hunn | | | | | | | | | | | | | | 15,000 | | | | | 4,440,450 | | | | | | | Brian D. Jellison | | | | 290,000 | | | | | 64,365,625 | | | | | 75,000 | | | | | 21,914,250 | | | | | | | Estate of Brian D. Jellison | | | | | | | | | | | | | | 262,500 | (1) | | | | 74,565,750 | | | | | | | Robert C. Crisci | | | | | | | | | | | | | | 2,000 | | | | | 554,970 | | | | | | | John K. Stipancich | | | | | | | | | | | | | | 4,000 | | | | | 1,175,480 | | | | | | | Paul J. Soni | | | | | | | | | | | | | | 6,000 | | | | | 1,776,180 | |
(1) | Vested upon Mr. Jellison’s death pursuant to the terms of the Company’s 2016 Incentive Plan and award agreements.
|
| | | | | | | | | | | | | | | | | | | | | | Name | | Option Awards | | Stock Awards | | # of Shares Acquired
on Exercise | | Value Realized Upon
Exercise ($) | | # of Shares Acquired
on Vesting | | Value Realized on
Vesting ($) | | | | | | L. Neil Hunn | | | | 32,000 | | | | | 9,144,436 | | | | | 67,500 | | | | | 21,529,350 | | | | | | | Robert C. Crisci | | | | | | | | | | | | | | 14,500 | | | | | 4,589,600 | | | | | | | John K. Stipancich | | | | 14,000 | | | | | 2,081,622 | | | | | 7,750 | | | | | 2,728,780 | | | | | | | Jason Conley | | | | 7,500 | | | | | 1,978,646 | | | | | 7,250 | | | | | 2,323,613 | |
No Pension Benefits None of our named executive officers participateparticipates in a Company-sponsored defined-benefit pension plan. 20182019Non-Qualified Deferred Compensation
Pursuant to our Company’sNon-Qualified Retirement Plan, named executive officers may defer base salary and payments earned under the annual cash incentive program. Deferral elections are made by eligible executives before the beginning of each year for amounts to be earned in the following year. The executive may invest such amounts in funds that are substantially similar to those available under the 401(k) plan. The following table sets forth certain information with respect to theNon-Qualified Retirement Plan for our named executive officers during the fiscal year ended December 31, 2018.2019. | | Name | | Executive
Contributions
in Last FY(1)
($) | | | Registrant
Contributions
in Last FY(2)
($) | | | Aggregate
Earnings
in Last FY(3)
($) | | Aggregate
Withdrawals/
Distributions
($) | | Aggregate
Balance
at Last FYE
($) | | | Executive
Contributions
in Last FY(1)
($) | | | Registrant
Contributions
in Last FY(2)
($) | | | Aggregate
Earnings
in Last FY(3)
($) | | | Aggregate
Withdrawals/
Distributions
($) | | Aggregate
Balance
at Last FYE
($) | | | L. Neil Hunn | | | 243,000 | | | | 136,875 | | | | (10,708 | ) | | | (713,322 | ) | | | 485,482 | | | | 340,000 | | | | 189,000 | | | | 92,394 | | | | (394,595 | ) | | | 712,281 | | | Brian D. Jellison | | | 61,807 | | | | 56,634 | | | | 237 | | | | (411,174 | ) | | | - | | | | Robert C. Crisci | | | 115,000 | | | | 65,625 | | | | (34,205 | ) | | | 345,533 | | | | 138,500 | | | | 82,875 | | | | 122,675 | | | | | 689,583 | | | John K. Stipancich | | | 79,800 | | | | 79,125 | | | | (9,840 | ) | | | 274,872 | | | | 82,500 | | | | 82,125 | | | | 52,198 | | | | | 491,695 | | | Paul J. Soni | | | 167,550 | | | | 63,150 | | | | (94,797 | ) | | | 1,179,679 | | | Jason Conley | | | | 293,400 | | | | 55,500 | | | | 165,245 | | | | (74,965 | ) | | | 1,180,584 | |
| (1) | Amounts reflect participant deferrals under theNon-Qualified Retirement Plan during the fiscal year ended December 31, 20182019 and all of these amounts are included in the Summary Compensation Table above in the “Salary” or“Non-Equity Incentive Plan Compensation” column as applicable. |
| (2) | The amounts are included in the Summary Compensation Table in the “All Other Compensation” column. |
| (3) | No portion of these earnings was included in the Summary Compensation Table because theNon-Qualified Retirement Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules. |
Potential Payments upon Termination or Change in Control The employment agreement with Mr. Jellison and offer letters with Messrs. Hunn and Stipancich provide for certain benefits in the event of the termination of the officer’s employment under certain conditions. The amount of the benefits varies depending on the reason for termination, as explained below. In no event will excise taxgross-ups be paid in regard to a termination of employment related to a change in control. | | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 3745 |
EXECUTIVE COMPENSATION(CONTINUED) Employment Agreement with Mr. Jellison
Termination for Cause; Resignation Without Good Reason. If Mr. Jellison were terminated for cause or if he were to resign without good reason (as such terms are defined in his agreement), he would have received the salary and vested benefits that had accrued through the date of termination, plus apro-rata portion of his annual bonus earned through the date of termination, assuming our Company achieved the level of performance for which a bonus would be paid for that year. No special severance benefits would have been payable.
Termination Without Cause; Resignation for Good Reason.If Mr. Jellison were terminated without cause or resigned for good reason, either before a change in control of our Company occurs or more than one year after a change in control, he would have received a severance payment, in addition to accrued salary, earned and unpaid bonus from the prior fiscal year and vested benefits, of two times his annual base salary. He would have also received apro-rated target bonus for the year and continuation of health and welfare benefits for a period of two years. Any stock option that would have vested during theone-year period following termination would have also become immediately exercisable.
In Connection with a Change in Control. If Mr. Jellison were terminated without cause or resigned for good reason within one year following a change in control of our Company, then in addition to accrued salary, prorated bonus and vested benefits, he would have been entitled to:
a severance payment equal to two times the sum of (i) his then-current base salary and (ii) the greater of the average of his last two years’ annual bonuses or his target bonus for the year of termination;
accelerated vesting of all of his outstanding equity awards; and
continuation of health and welfare benefits for a period of two years.
Restrictive Covenants. Mr. Jellison had also agreed not to compete with our Company for a period of one year after his termination of employment for any reason.
Offer Letters to Messrs. Hunn and Stipancich, and Long-Term Cash Incentive Arrangement with Mr. Hunn Mr. Hunn.Pursuant to an offer letter dated August 18, 2011, if Mr. Hunn’s employment were to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary. In addition, Mr. Hunn is party to a long-term cash incentive arrangement, the material terms of which may be found in the CD&A section above captioned “Analysis of 2019 Compensation—CEO Long-Term Cash Incentive”. Mr. Stipancich.Pursuant to an offer letter dated June 17, 2016, if Mr. Stipancich’s employment were to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary, plus apro-rated bonus based upon Company performance. Summary of Termination Payments and Benefits The following tables summarize the value of the termination payments and benefits that each of our named executive officers would receive if he had terminated employment on December 31, 20182019 under the circumstances shown. Scenarios for termination for cause, voluntary resignation, and retirement have not been included because, in those circumstances, no severance or other additional payments willwould be made to named executive officers. ScenariosOther than with respect to Mr. Hunn’s Long-Term Cash Incentive Award, scenarios for termination due to death or disability have not been included because they do not discriminate in scope, terms or operation in favor of named executive officers compared to the benefits offered to all salaried employees. Mr. Jellison is not included because his 2017 and 2018 restricted stock awards vested upon his death, representing a market value of $74,565,750 based on the closing price of the Company’s common stock on November 2, 2018. | | | | | | | 3846 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
EXECUTIVE COMPENSATION(CONTINUED) L. NEIL HUNN | | | | Termination Scenario | | | Termination Scenario | | | Potential Payments Upon Termination or Change in Control | | By Employee
For Good
Reason | | By Company Without Cause | | | Change in
Control(1) | | �� | By Employee For Good Reason | | | By Company Without Cause | | | Change in Control(1) | | | Cash payments | | $- | | $ | 900,000 | | | $ | 900,000 | | | $ | | | | $ | 1,000,000 | | | $ | 1,000,000 | | | Accelerated Equity Awards(2)(4) | | | | | | | | Payments related to Long-Term Cash Incentive Award(2) | | | | 3,721,000 | | | | 3,721,000 | | | | 3,721,000 | | | Accelerated Equity Awards(3)(4) | | | | | | | | 2017 Stock Option Grant | | - | | | - | | | | 3,244,000 | | | | - | | | | - | | | | 3,376,200 | | | 2018 Stock Option Grant | | - | | | - | | | | - | | | | - | | | | - | | | | 4,712,400 | | | 2019 Stock Option Grant | | | | - | | | | - | | | | 5,035,800 | | 2015 Restricted Stock Grant | | - | | | - | | | | 11,993,400 | | | | - | | | | - | | | | 15,940,350 | | | 2017 Restricted Stock Grant | | - | | | - | | | | 11,993,400 | | | | 2018 Restricted Stock Grant | | - | | | - | | | | 11,993,400 | | | | - | | | | - | | | | 7,970,175 | | 2019 Restricted Stock Grant | | | | - | | | | - | | | | 15,940,350 | | | Continued Medical Benefits | | - | | | 19,451 | | | | 19,451 | | | | - | | | | 20,170 | | | | 20,170 | | | | | | | | | | | | | Total | | $- | | $ | 919,451 | | | $ | 40,143,651 | | | $ | 3,721,000 | | | $ | 4,741,170 | | | $ | 57,716,445 | |
ROBERT C. CRISCI | | | | Termination Scenario | | | Termination Scenario | | | Potential Payments Upon Termination or Change in Control | | By Employee For Good Reason | | By Company Without Cause | | Change in Control(1) | | | By Employee For Good Reason | | | By Company Without Cause | | | Change in Control(1) | | | Cash payments | | $- | | $- | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | Accelerated Equity Awards(3)(4) | | | | | | | | | | | | | | 2016 Stock Option Grant | | - | | - | | | 383,640 | | | | 2017 Stock Option Grants | | - | | - | | | 1,350,000 | | | 2017 Stock Option Grant | | | | - | | | | - | | | | 1,639,810 | | | 2018 Stock Option Grant | | - | | - | | | - | | | | - | | | | - | | | | 1,963,500 | | | 2015 Restricted Stock Grant | | | | | | | 666,300 | | | 2019 Stock Option Grant | | | | - | | | | - | | | | 2,098,250 | | | 2016 Restricted Stock Grant | | - | | - | | | 266,520 | | | | 2017 Restricted Stock Grants | | - | | - | | | 3,198,240 | | | 2017 Restricted Stock Grant | | | | - | | | | - | | | | 2,479,610 | | | 2018 Restricted Stock Grant | | - | | - | | | 3,198,240 | | | | - | | | | - | | | | 2,125,380 | | | 2019 Restricted Stock Grant | | | | - | | | | - | | | | 4,959,220 | | | Continued Medical Benefits | | - | | - | | | - | | | | - | | | | - | | | | - | | | Total | | $- | | $- | | $ | 9,062,940 | | | $ | - | | | $ | - | | | $ | 15,265,77 | |
JOHN K. STIPANCICH | | | | | | | | | | | | | | | | Termination Scenario | | | Potential Payments Upon Termination or Change in Control | | By Employee For Good Reason | | | By Company Without Cause | | | Change in Control(1) | | | | | | Cash payments | | $ | - | | | $ | 1,563,750 | | | $ | 1,563,750 | | | | | | Accelerated Equity Awards(3)(4) | | | | | | | | | | | | | 2017 Stock Option Grant | | | - | | | | - | | | | 752,340 | | 2018 Stock Option Grant | | | - | | | | - | | | | 1,178,100 | | 2019 Stock Option Grant | | | - | | | | - | | | | 1,258,950 | | 2017 Restricted Stock Grant | | | - | | | | - | | | | 2,125,380 | | 2018 Restricted Stock Grant | | | - | | | | - | | | | 1,328,363 | | 2019 Restricted Stock Grant | | | - | | | | - | | | | 2,922,398 | | | | | | Continued Medical Benefits | | | - | | | | 20,170 | | | | 20,170 | | | | | | Total | | $ | - | | | $ | 1,583,920 | | | $ | 11,129,281 | |
| | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 3947 |
EXECUTIVE COMPENSATION(CONTINUED) JOHNASON K. SCTIPANCICHONLEY | | | | | | | | | | | | | | Termination Scenario | | | Potential Payments Upon Termination or Change in Control | | By Employee For Good Reason | | By Company Without Cause | | | Change in Control(1) | | | | | | Cash payments | | $- | | $ | 680,000 | | | $ | 680,000 | | | | | | Accelerated Equity Awards(2)(3) | | | | | | | | | | | | | | | 2016 Stock Option Grant | | - | | | - | | | | 869,310 | | | | | | 2017 Stock Option Grant | | - | | | - | | | | 452,160 | | | | | | 2018 Stock Option Grant | | - | | | - | | | | - | | | | | | 2016 Restricted Stock Grant | | - | | | - | | | | 1,066,080 | | | | | | 2017 Restricted Stock Grant | | - | | | - | | | | 1,599,120 | | | | | | 2018 Restricted Stock Grant | | - | | | - | | | | 1,998,900 | | | | | | Continued Medical Benefits | | - | | | 19,451 | | | | 19,451 | | | | | | Total | | $- | | $ | 699,451 | | | $ | 6,685,021 | |
PAUL J. SONI
| | | | Termination Scenario | | | Termination Scenario | | | Potential Payments Upon Termination or Change in Control | | By Employee For Good Reason | | By Company Without Cause | | | Change in Control(1) | | | By Employee For Good Reason | | | By Company Without Cause | | | Change in Control(1) | | | Cash payments | | $- | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | $ | - | | | Accelerated Equity Awards(3)(4) | | | | | | | | | | | | | | 2016 Stock Option Grant | | - | | | - | | | | 600,720 | | | | 2017 Stock Option Grant | | - | | | - | | | | 973,200 | | | | - | | | | - | | | | 844,150 | | | 2018 Stock Option Grant | | | | - | | | | - | | | | 942,480 | | 2019 Stock Option Grant | | | | - | | | | - | | | | 1,200,199 | | 2017 Restricted Stock Grant | | - | | | - | | | | 799,560 | | | | - | | | | - | | | | 354,230 | | | 2018 Restricted Stock Grant | | - | | | - | | | | 1,865,640 | | | | - | | | | - | | | | 885,575 | | 2019 Restricted Stock Grant | | | | - | | | | - | | | | 2,904,686 | | | Continued Medical Benefits | | - | | | - | | | | - | | | | - | | | | - | | | | - | | | Total | | $- | | $ | - | | | $ | 4,239,120 | | | $ | - | | | $ | - | | | $ | 7,131,320 | |
| (1) | Assumes employment is terminated involuntarily without cause. |
| (2) | The amounts in this row represent the maximum amounts to be paid pursuant to the terms of Mr. Hunn’s Long-Term Cash Incentive Award under the above scenarios. The maximum amount to be paid under the Long-Term Cash Incentive Award is $18,605,000. To the extent Mr. Hunn elects not to defer payment of the incentive amount or is unable to defer such amount, the incentive amount that is not deferred shall be increased by 7.5%. In general, under each scenario, Mr. Hunn is entitled to apro-rated portion of the five-year award, which at December 31, 2019, is 20% of the award. In the event of Mr. Hunn’s death or disability, the award remains outstanding, and upon the certification of the performance criteria by the Compensation Committee at the conclusion of the performance period, the amount earned would be paid to Mr. Hunn’s estate. |
| (3) | Based on closing market price of our common stock on December 31, 20182019 of $266.52 per share. |
(3) | Based on closing market price of our common stock on November 2, 2018 of $285.28$354.23 per share.
|
| (4) | Under the terms of our 2016 Incentive Plan, if within two years after a change in control, employment is terminated by the employee for good reason or by the acquirer without cause, or if the acquirer does not assume the awards upon a change in control, (i) outstanding stock options become fully exercisable, (ii) time-based vesting restrictions on outstanding restricted stock awards lapse, and (iii) the target payout opportunities on outstanding performance-based restricted stock awards shall be deemed to have been fully earned (subject to the conditions provided in the 2016 Incentive Plan). |
CEO Pay Ratio As required by SEC rules, we compared the weighted average of the total compensation of our prior CEO and current CEO in 20182019 to that of our median employee for the same period. Through our core human capital management system with supplementation from manual inputs, we collected information for our global workforce of 15,59615,849 employees, including our full-time, part-time and temporary workers, and excluded our employees in Germany (283)(263), France (173)(163), and certain other countries (50)the Czech Republic (6) under the de minimis exemption. We identified our median employee as of December 31, 20182019 by applying a consistent compensation measure for the period from January 1, 20182019 to December 31, 20182019 across our global employee population—annual salary or hourly pay, bonus and commissions (excluding equity compensation because inclusion of such would have had no impact on the determination of the median employee). We annualized the compensation for our full-time and part-time employees who were newly-hired in 2018.2019. Our median employee’s total 20182019 compensation was $88,707$88,988 and the weighted average of the total 2018 compensation of our prior CEO and current CEOCEO’s was $29,054,430$18,834,053 ($22,77321,639 more than as reported in the Summary Compensation Table above due to the inclusion of certain employee benefits). Accordingly, our 20182019 CEO to Median Employee Pay Ratio was 328:212:1. | | | | | | | 4048 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
PROPOSAL 2: ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS We are seeking your advisory vote approving the compensation of our named executive officers as disclosed in this Proxy Statement. We believe that our executive compensation programs are structured in the best manner possible to support our business objectives, evidenced by the superior returns we have deliveredcontinue to deliver to our shareholders. In 2018,2019, our total shareholder return was 3.5%33.7% versus S&P 500’s negative return of (4.4)%, and in the first quarter of this year, our return of 28.5% more than doubled the 13.6% return of the S&P 500.31.5%. Over the past 10 years, our compound annual return to shareholders was 20.6%21.8%, compared to the S&P 500’s return of 13.1%13.6%. Our executive compensation programs are designed to provide competitive total compensation that is tied to the achievement of Company performance objectives and to attract, motivate and retain individuals who will build long-term value for our shareholders. See the “Proxy Statement Summary” and “Compensation Discussion and Analysis” above for key characteristics of our executive compensation programs. We are seeking shareholder approval of the following resolution: RESOLVED, that the compensation paid to the Company’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the related material disclosed in this Proxy Statement is hereby APPROVED. The vote on this proposal is advisory andnon-binding; however, the Compensation Committee and our Board will review the results of the vote and consider them when making future determinations regarding our executive compensation programs. The Board recommends a vote “FOR” the resolution providing an advisory approval of the compensation of the Company’s named executive officers. | | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 4149 |
AUDIT COMMITTEE REPORT The Audit Committee of the Board of Directors is comprised of fournon-employee directors, each of whom has been determined by the Board of Directors to be independent under the NYSE and SEC rules. The Audit Committee’s responsibilities are set forth in its charter. The Audit Committee oversees and reviews with the full Board of Directors any issues with respect to the Company’s financial statements, the structure of the Company’s legal and regulatory compliance, the performance and independence of the Company’s independent registered public accounting firm and the performance of the Company’s internal audit function. The committee retains the Company’s independent registered public accounting firm to undertake appropriate reviews and audits of the Company’s financial statements, determines the compensation of the independent registered public accounting firm, andpre-approves all of their services. The committee also periodically reviews the work performed by other public accounting firms retained by the Company to provide various financial and information technology services. The Company’s management is primarily responsible for the Company’s financial reporting process and for the preparation of the Company’s financial statements in accordance with GAAP. The Audit Committee maintains oversight of the independent registered public accounting firm by discussing the overall scope and specific plans for their audits, the results of their examinations, their evaluations of the Company’s internal accounting controls and the overall quality of the Company’s financial reporting. The Audit Committee may delegate its duties and responsibilities to a subcommittee of the Audit Committee. The Audit Committee maintains oversight of the Company’s internal audit function by evaluating the appointment and performance of the Company’s director of internal audit and periodically meeting with this individual to receive and review reports of the work of the Company’s internal audit department. The Audit Committee meets with management on a regular basis to discuss any significant matters, internal audit recommendations, policy or procedural changes and risks or exposures, if any, that may have a material effect on the Company’s financial statements. The Audit Committee: (i) appointed and retained PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2018;2019; (ii) reviewed and discussed with the Company’s management the Company’s audited financial statements for the fiscal year ended December 31, 2018;2019; (iii) discussed with PwC the matters required to be discussed by the Auditing Standard No. 1301, “Communication with Audit Committees,” issued by the Public Company Accounting Oversight Board (the “PCAOB”); (iv) received the written disclosures and the letter from PwC required by PCAOB Ethics and Independence Rule 3526, “Communication with Audit Committees Concerning Independence,” and has discussed with PwC its independence from the Company and its management; (v) discussed matters with PwC outside the presence of management; (vi) reviewed internal audit recommendations; (vii) discussed with PwC the quality of the Company’s financial reporting; and (viii) reviewed and discussed with PwC the results of the audit of the effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). In reliance on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2018,2019, for filing with the SEC. AUDIT COMMITTEE Christopher Wright, Chairman Amy Woods Brinkley John F. Fort III Laura G. ThatcherRobert E. Knowling, Jr.
The foregoing report and other information provided above regarding the Audit Committee should not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or the Exchange Act, except to the extent that Roper specifically incorporates this information by reference, and shall not otherwise be deemed filed under either the Securities Act or the Exchange Act. | | | | | | | 4250 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
INDEPENDENT PUBLIC ACCOUNTANTS FEES Set forth below are the professional fees billed by PwC for the fiscal years ended December 31, 20182019 and 2017.2018. It is the Audit Committee’s policy that all services performed by and all fees paid to the independent registered public accounting firm require the Audit Committee’s prior approval. As such, all audit, audit-related tax and other fees werepre-approved by the Audit Committee. | | | | Dollars in Thousands | | | | | | | | | Dollars in Thousands | | Fees | | FY 2018 | | | FY 2017 | | | FY 2019 | | | FY 2018 | | | Audit Fees(1) | | $ | 3,990 | | | $ | 4,172 | | | $ | 4,444 | | | $ | 3,990 | | | Audit-Related Fees(2) | | | 881 | | | | 231 | | | | 1,983 | | | | 881 | | | Tax Fees(3) | | | 637 | | | | 1,029 | | | | 583 | | | | 637 | | | All Other Fees | | | 4 | | | | 26 | | | | - | | | | 4 | | | Total Fees | | $ | 5,512 | | | $ | 5,458 | | | $ | 7,011 | | | $ | 5,512 | |
| (1) | Aggregate fees from PwC for audit or review services in accordance with the standards of the PCAOB and fees for services, such as statutory audits and review of documents filed with the SEC. Audit fees also include fees paid in connection with services required for compliance with Section 404 of the Sarbanes-Oxley Act. |
| (2) | Aggregate fees from PwC for assurance and related services which primarily include due diligence on acquisition targets. |
| (3) | Tax fees include tax compliance, assistance with tax audits, tax advice and tax planning. |
As required by Section 10A(i)(1) of the Exchange Act, all audit andnon-audit services to be performed by our independent registered public accounting firm must be approved in advance by the Audit Committee, subject to certain exceptions relating tonon-audit services accounting for less than five percent of the total fees paid to our independent registered public accounting firm which are subsequently ratified by the Audit Committee. In addition, pursuant to Section 10A(i)(3) of the Exchange Act, as amended, the Audit Committee has established procedures by which the Chairperson of the Audit Committee maypre-approve such services, provided the Chairperson subsequently reports the details of the services to the full Audit Committee. All audit-related fees, tax fees and all other fees, as described in the table above, were approved by the Audit Committee. PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 20192020 The Audit Committee has appointed PwC as our independent registered public accounting firm for the year ending December 31, 2019.2020. Our Board of Directors recommends that the shareholders ratify this appointment. PwC has been our Company’s independent registered public accounting firm since May 2002. One or more representatives of PwC are expected to be present at the Annual Meeting and will be given the opportunity to make a statement if they so desire and respond to appropriate questions of shareholders in attendance. If this proposal does not pass, the selection of our independent registered public accounting firm will be reconsidered by the Audit Committee and the Board of Directors. Even if the proposal passes, the Audit Committee may decide to select another firm at any time. The Board of Directors recommends a vote “FOR” the approval of the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2019.2020. | | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 4351 |
EquityPROPOSAL 4: APPROVAL OF AN AMENDMENT TO THE ROPER TECHNOLOGIES, INC. DIRECTOR COMPENSATION PLAN
Compensation for ournon-employee directors is governed by our Director Compensation Plan Information(the “Director Compensation Plan”), which is asub-plan of our 2016 Incentive Plan. The Director Compensation Plan recognizes the Board’s instrumental contribution to Roper’s long-term success and creation of superior shareholder value. Over the past fifteen years, our shareholders have earned a cumulative 1,174.0% return – more than four times that of the S&P 500’s 264.2% return. Compensation paid to our Directors reflects the significant time commitment and effort associated with serving on our Board, including participation in at least 15 days of Board meetings each year, in addition to numerous Committee meetings throughout the year. Our rapid growth, business transformation into software, and various market developments has made it increasingly challenging to find and assimilate the caliber of independent director capable of adding value to our high-growth, asset-light, diversified enterprise. Despite these challenges, in the past five years, we have added three new independent directors to the Board adding needed key skills, strengths and capabilities to the Board while significantly increasing its level of gender and ethnic diversity. Consistent with Roper’s long-standing“pay-for-performance” philosophy, the Director Compensation Plan ties director compensation directly to the Company’s stock performance, closely aligning the financial interests of our directors with those of our shareholders. Directors receive limited cash retainers and no perquisites (such as deferred compensation benefits), and instead receive a higher percentage of their compensation in Company stock. Since 2004, the Company had awarded ournon-employee directors an annual grant of 4,000 RSUs, aligning director compensation with increases in shareholder value. However, in March 2018, in light of the significant increase of 42.4% in the Company’s share price in 2017, our Board amended the Director Compensation Plan to reduce the annual equity award tonon-employee directors by 25% to 3,000 RSUs. To further align director compensation with Company performance, we retained the stock ownership guideline for directors at 4,000 shares, which is a multiple of 23.6X the directors’ annual cash retainer.[1] In April 2018, a derivative action was filed in the Circuit Court for the Twelfth Judicial District of Sarasota County, Florida by a purported shareholder, Benjamin Archer, challenging the Company’s compensation of itsnon-employee directors and its former chief executive officer (Brian D. Jellison). The following table provides informationdefendants in the derivative action have denied any wrongdoing or liability with respect to the Company’s compensation practices. In connection with resolution of the matter, the Company has agreed to request that shareholders specifically approve the amount of compensation to be paid to itsnon-employee directors through 2022. In 2016, our shareholders approved an annual limit of 6,000 RSUs fornon-employee directors under our 2016 Incentive Plan, and on average over the past five years, 96% of our shareholders who have voted on the Company’s compensation of its named executive officers, including the former chief executive officer, have expressed their approval. In June 2019, the Compensation Committee approved the Second Amendment to Roper Technologies, Inc. Director Compensation Plan, andnon-employee directors were paid consistent with the terms of the amended plan in 2019. Among other things, under the June 2019 amendment, the “fixed share” approach to the annual equity award was eliminated and the annual award was reduced to $665,000. The annual cash retainer was set at $60,000, and the annual cash retainer for the independent Chairman of the Board in 2019 was maintained at $175,000. In addition, all incremental compensation for meeting attendance was eliminated. Following the June 2019 amendment, the Compensation Committee continued to closely monitor developments innon-employee director pay. In April 2020, in consultation with our new independent compensation consultant, Compensia, the Compensation Committee further amended our Director Compensation Plan to more closely align our Director pay with market practice, while maintaining our“pay-for-performance” philosophy. In connection with the resolution of the above described derivative action, Roper is requesting that shareholders approve the Third Amendment to Roper Technologies, Inc. Director Compensation Plan (the “Amended Plan”) as set forth in Appendix B. If approved by our shareholders at the 2020 Annual Meeting of December 31, 2018 regardingShareholders, the Amended Plan will continue to govern the compensation of our compensation plans under which our equity securities are authorized for issuance (shares in millions).non-employee directors through 2022. | | | | | | | | | | | | | Plan Category | | (a)
Number of Securities to
be Issued Upon
Exercise of Outstanding
Options, Warrants and
Rights | | | (b)
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights | | | (c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding Securities
Reflected in Column(a)) | | | | | | Equity Compensation Plans
Approved by Shareholders(1) | | | | | | | | | | | | | | | | | Stock options | | | 3.205 | | | $ | 180.69 | | | | | | | | | | Restricted stock awards(2) | | | 0.739 | | | | - | | | | | | | | | | Subtotal | | | 3.944 | | | | | | | | 6.019 | | | | | | Equity Compensation Plans Not
Approved by Shareholders | | | - | | | | - | | | | - | | | | | | Total | | | 3.944 | | | $ | - | | | | 6.019 | |
(1)[1] | ConsistsUsing the closing price per share of the Company’s Amended and Restated 2006 Plan and 2016 Incentive Plan.
|
(2) | The weighted-average exercise price is not applicable to restrictedcommon stock awards.on the NYSE on December 31, 2019.
|
| | | | | | | 4452 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement |
The Amended Plan: | • | | reduces the annual equity awards tonon-employee directors from $665,000 in 2019 to $385,000 in 2020; |
| • | | reduces the annual cash retainer for any independent director serving as the Chairman of the Board from $175,000 in 2019 to $125,000 in 2020; |
| • | | limits any annual increase in aggregate pay (cash and equity) to no more than 3% in any one year period, and no more than 6% in the three year period ended 2022; |
is applicable from the Effective Date through December 2022, and may not be modified other than by shareholder action; PROPOSAL 4: SHAREHOLDER PROPOSAL REGARDING POLITICAL CONTRIBUTIONS DISCLOSUREmaintains the annual cash retainer fornon-employee directors at $60,000;
The Company is not responsible
maintains the $5,000 annual cash retainers for the content of this shareholder proposal or supporting statement. The following shareholder proposal (the “Shareholder Proposal”) will be voted on at the Annual Meeting only if properly presented by or on behalfchairs of the shareholder proponent. Sonen Capital, 456 Montgomery Avenue, San Francisco, California 94104, a holderAudit, Compensation and Nominating and Governance Committees;
maintains the elimination of 448 sharesall incremental compensation for director attendance at Board meetings and/or Board committee meetings; continues the practice of Common Stock, 0.0004 percentno compensation to employee directors for service on the Board; and provides thatnon-employee directors may elect to receive some or all of their annual cash retainers in Roper stock rather than cash. The Amended Plan continues to closely align the financial interests of our directors with those of our shareholders, while recognizing the important role our directors play in the Company’s outstanding shares, submittedstrategy and creation of shareholder value. Below is an estimated 2020 Director Compensation table based on the Proposal. Amended Plan. The amounts below are estimates intended for comparison purposes only. 2020 Estimated Director Compensation | | | | | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash
($) | | | Stock
Awards
($) | | | All Other
Compensation
($) | | Total
($) | | | | | | | Shellye L. Archambeau | | | 60,000 | | | | 385,000 | | | - | | | 445,000 | | | | | | | Amy Woods Brinkley | | | 60,000 | | | | 385,000 | | | - | | | 445,000 | | | | | | | John F. Fort III | | | 60,000 | | | | 385,000 | | | - | | | 445,000 | | | | | | | Robert D. Johnson | | | 60,000 | | | | 385,000 | | | - | | | 445,000 | | | | | | | Robert E. Knowling, Jr | | | 60,000 | | | | 385,000 | | | - | | | 445,000 | | | | | | | Wilbur J. Prezzano | | | 185,000 | | | | 385,000 | | | - | | | 570,000 | | | | | | | Laura G. Thatcher | | | 65,000 | | | | 385,000 | | | - | | | 450,000 | | | | | | | Richard F. Wallman | | | 65,000 | | | | 385,000 | | | - | | | 450,000 | | | | | | | Christopher Wright | | | 65,000 | | | | 385,000 | | | - | | | 450,000 | |
The Board of Directors supports this proposal and recommends a vote AGAINST the ShareholderFOR Proposal and asks shareholders to read through the Roper’s response which follows the Shareholders Proposal. “Resolved, that the shareholders of Roper Technologies Inc. (“Roper” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:
1. Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
2. Monetary andnon-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:4.
a. The identity of the recipient as well as the amount paid to each; and
b. The title(s) of the person(s) in the Company responsible for decision-making.
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
Supporting Statement
As long-term shareholders of Roper, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
Relying on publicly available data does not provide a complete picture of the Company’s electoral spending. For example, the Company’s payments to trade associations that may be used for election- related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and othertax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including Salesforce.com Inc., Inuit Inc., and Northrop Grumman Corporation, which present this information on their websites.
The Company’s Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform.
| | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 4553 |
Board of Directors Statement in Opposition to Shareholder Proposal
The Board has carefully considered the Shareholder Proposal and while the Board generally supports the Shareholder Proposal’s stated objectives of transparency and accountability, adoption of the Shareholder Proposal is unnecessary and would not be in the best interests of the Company or our shareholders.
The Company has historically made an extremely limited number of political contributions.
The Company does not have, and does not contribute to federal political campaigns through, a political action committee and has not made contributions to state political campaigns. The Company has historically made an extremely limited number of political contributions, where such contributions are permitted by law, and has made those contributions almost exclusively through participation in trade associations in an indirect manner. While our participation in various trade associations serves an important corporate purpose, it represents only a small fraction of our total annual expenses (less than 0.02% in each of fiscal years 2018, 2017 and 2016). Additional disclosure is not necessary to provide shareholders visibility into our limited political contributions, and incurring the time and expense to generate the report twice each year as requested by the Shareholder Proposal would not be a productive use of corporate resources.
The Company is committed to adhering to the highest ethical standards.
Political contributions of all types are subject to governmental regulation and public disclosure requirements, and the Company is fully committed to complying with all applicable laws, including as those laws relate to contributions made indirectly through participation in trade associations. Roper’s Business Code of Ethics and Standards of Conduct (which is available for review atwww.ropertech.com/code-of-ethics.com) prohibits most political activities, and requires the express approval of Company’s Chief Executive Officer before any Company property may be donated to a political cause.
The Company’s participation in trade associations serves multiple objectives.
Participation as a trade association member comes with the understanding that we may not always agree with all of the positions of the associations or other members. However, such participation provides us with visibility to business and technical issues as well as emerging standards within our industries. Trade associations are subject to public disclosure obligations with respect to their lobbying and political contributions and expenditures. We do not participate in trade associations to advance political purposes, and our participation in a particular trade association does not represent our agreement with all of the association’s positions or views. Although we must pay regular membership dues, we do not normally make additionalnon-dues contributions to support a trade association’s targeted political contributions. Accordingly, disclosure of our trade association dues would not provide our shareholders with a greater understanding of our business strategies, initiatives or values. Because our payments to trade associations do not necessarily reflect our views on every action a trade association may take, and because we support trade associations for reasons unrelated to any of their political activities, semi-annual reporting on our trade association dues would not provide meaningful information to investors.
Given the limited nature of the Company’s political contributions and expenditures, we are certain that the Shareholder Proposal is unnecessary and costly. Moreover, requiring disclosure of all corporate political contributions, including those made indirectly through trade associations, as requested in the Shareholder Proposal, could place the Company at a competitive disadvantage by revealing its strategies and priorities. Parties with interests adverse to the Company likewise participate in the political process. Accordingly, any expanded disclosure by the Company, above what is required by law and equally applicable to all similar parties engaged in public debate, could disproportionately benefit those parties, while harming the interests of the Company and our shareholders. If adopted, the Board believes that producing the report requested by the Shareholder Proposal would be burdensome and an unnecessary use of the Company’s resources without a commensurate benefit to the Company or our shareholders.
The Board of Directors opposes this proposal and recommends a voteAGAINST Proposal 4.
| | | | | | | 46 | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement |
ANNUAL MEETING AND VOTING INFORMATION Our Company is soliciting the enclosed proxy for use at the 20192020 Annual Meeting of Shareholders. This Proxy Statement and the enclosed proxy card are being mailed or otherwise made available to shareholders on or about April 30, 2019.24, 2020. We are concurrently mailing or making available to shareholders a copy of our 20182019 Annual Report, which includes our Annual Report onForm 10-K for the fiscal year ended December 31, 2018.2019. Our Annual Report on Form10-K and its exhibits are available on the Internet at www.sec.gov. Our 20182019 Annual Report and Annual Report on Form10-K are not part of these proxy soliciting materials. This Proxy Statement contains important information for you to consider when deciding how to vote. Please read this information carefully. | Q: | When is the Annual Meeting? |
Monday, June 10, 20198, 2020 at 8:12:00 a.m.p.m. (local time) (and at any postponement or adjournments thereof) Place: 6901 Professional Parkway East Suite 200 Sarasota, Florida 34240 | Q: | What is the purpose of this meeting? |
| A: | This is the Annual Meeting of our shareholders. At this meeting, we will be voting on the following matters: |
| | 1. | The election of ten directors; |
| | 2. | Approval of, on anon-binding advisory basis, the compensation of our named executive officers; |
| | 3. | Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2019;2020; and |
| | 4. | Shareholder proposal regarding political contributions disclosure.Approval of an Amendment to the Roper Technologies, Inc. Director Compensation Plan.
|
Our Board of Directors strongly encourages you to exercise your right to vote on these matters. Your vote is important. Voting early by Internet, telephone or mailing proxy or voting instruction card helps ensure that we receive a quorum of shares necessary to hold the meeting. | Q: | What happens if additional matters are presented at the Annual Meeting? |
| A. | We are not aware of any matters to be acted upon at the Annual Meeting other than the proposals described in this Proxy Statement. The Board of Directors has named Christine E. HermannLindsay Hawker and John K. Stipancich as proxy holders for this Annual Meeting. If for any reason a director nominee is not available as a candidate, the proxy holders may vote your shares for another candidate who may be nominated by the Board, or the Board may reduce its size. |
All shares of our common stock represented by properly executed and unrevoked proxies will be voted by the person named as proxy holder in accordance with the instruction given. If no instructions are indicated on a proxy, properly executed proxies will be voted as follows: FOR each director nominee; FOR the approval of the compensation of our named executive officers; FORthe appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2019;2020; and AGAINSTFORthe shareholder proposal regarding political contributions disclosure.approval of an Amendment to the Roper Technologies, Inc. Director Compensation Plan.
| | | | | | | | | | 54 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 47 |
ANNUAL MEETING AND VOTING INFORMATION(CONTINUED)
| Q: | Who may vote at the Annual Meeting? |
| A: | Only shareholders of record at the close of business on the record date will be entitled to vote at the Annual Meeting or any postponed or adjourned meeting, and these shareholders will be entitled to vote whether or not they have transferred any of their shares of Roper common stock since that date. |
| Q: | What is the record date? |
| A: | Our Board has established the close of business on April 15, 201913, 2020 as the record date to determine the shareholders of record entitled to receive a notice of, and to vote at, our Annual Meeting or any postponement or adjournment thereof. On the record date, there were 103,842,390104,394,312 shares of our common stock, $0.01 par value, outstanding and entitled to vote. Each share of our common stock is entitled to one vote that may be voted on each matter to be acted upon at this Annual Meeting. |
| Q: | What is a shareholder of record? |
| A: | A shareholder of record or a registered shareholder is a shareholder whose ownership of Roper Technologies, Inc. common stock is reflected directly on the books and records of our transfer agent, Computershare Trust Company, N.A. If you are a shareholder of record, we are providing these materials directly to you. |
If you hold your shares of common stock through a bank, broker, or other intermediary, you are considered the “beneficial owner” of those shares held in “street name,” and you are not a shareholder of record. The shareholder of record of the shares is your bank, broker, or other intermediary. If your shares are held in street name, these proxy materials have been forwarded to you by your bank, broker, or other intermediary. As the beneficial owner, you have the right to instruct that institution on how to vote the shares you beneficially own. | Q: | How can I submit my vote? |
| A: | There are four ways to vote: by Internet, by telephone, by mail or in person. Submitting your proxy by Internet, telephone or mail will not affect your right to attend the Annual Meeting and change your vote. Unless you are voting in |
| | person, your vote must be received by 11:59 p.m. Eastern Time on June 9, 2019.7, 2020. |
By Internet. Have your proxy card available and log on to www.proxyvote.com. By Telephone. Have your proxy card available and call800-690-6903 toll free (US only) from a touchtone telephone. By Mail. Mark, date, sign, and promptly mail the enclosed proxy card in the postage-paid envelope provided for mailing in the United States. In Person. You may vote by ballot in person at the Annual Meeting. Bring your proxy card if you received one by mail, otherwise we will provide shareholders of record a ballot at the Annual Meeting. If your shares are held by a bank, broker, or other intermediary, that institution will provide voting instructions with the proxy materials. Please follow the voting instructions that you receive from that institution. Additionally, if you plan to vote in person at the Annual Meeting and your shares are held by a bank, broker, or other intermediary, you must obtain proof of stock ownership as of the record date and have a valid legal proxy from the institution that holds your shares. | Q: | What is a brokernon-vote? |
| A: | If your shares are held in street name through a bank, broker, or other intermediary, you must provide voting instructions to that institution. Under the rules of the NYSE, if you do not provide voting instructions, the institution may vote in its discretion on routine proposals, but not onnon-routine proposals, or leave the shares unvoted, which is called a “brokernon-vote.” |
The following proposals are not considered routine proposals, so banks, brokers, and other intermediaries do not have discretionary authority to vote on these matters if they have not received voting instructions from you: (i) the election of directors; (ii) the advisory vote on the approval of the compensation of our named executive officers; and (iii) the shareholder proposal regarding political contributions disclosure.approval of an amendment to our Director Compensation Plan. The ratification of the appointment of the independent registered public accounting firm is considered a routine proposal, so if you do not provide voting instructions, the institution holding your shares may either leave the shares unvoted or vote the | | | | | | | | | 48 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 55 |
ANNUAL MEETING AND VOTING INFORMATION(CONTINUED)
may either leave the shares unvoted or vote the shares in its discretion. If your shares are held through a bank, broker, or other intermediary, please follow the voting instructions that you receive from that institution. The institution will not be able to vote your shares on any of the proposals except the appointment of PwC unless you have provided voting instructions.
| Q: | How are brokernon-votes and abstentions treated? |
| A: | Brokernon-votes are not treated as votes cast for purposes of the election of directors, so they will have no effect on the election of directors. Brokernon-votes are not treated as entitled to vote for all other matters proposed for a vote at the meeting, so they will have no effect on those matters. Abstentions are not treated as votes cast for purposes of the election of directors, so they will have no effect on the election of directors. Abstentions are treated as present and entitled to vote so they will have the effect of a vote cast against the approval for all other matters proposed for a vote at the meeting. |
| Q: | What constitutes a quorum? |
| A: | To conduct business at our Annual Meeting, we must have a quorum of shareholders present. A quorum is present when a majority of the outstanding shares of stock entitled to vote as of the record date are represented in person or by proxy. Brokernon-votes and abstentions will be counted toward the establishment of the quorum. If there is an insufficient number of shares represented for a quorum or to approve any proposal at the Annual Meeting, the Annual Meeting may be postponed or adjourned to permit the further solicitation of proxies. |
| Q: | How many votes are needed for each proposal? |
| A: | OurBy-laws provide that each director will be elected by a majority of the votes cast with respect to such director (except in the case of contested elections, in which case directors are elected by a plurality). A “majority of the votes cast” means that the number of votes cast “for” a director exceeds the number of votes cast “against” that director. Brokernon-votes and abstentions will have no impact as they are not counted as votes cast for the election of directors. If an incumbent director fails to receive |
| a majority of the votes cast, the director will tender his or her resignation to the Board. The Nominating and Governance Committee or another committee will consider the director’s resignation and recommend to the Board whether to accept or reject the resignation. The Board will publicly disclose its decision regarding the resignation within 90 days after the election results are certified. |
The vote on the approval of compensation of our named executive officers is an advisory vote andnon-binding on the Company. If the majority of the shares present in person or represented by proxy and entitled to vote are cast in favor of the proposal, then it will be deemed to be the approval of the shareholders. Abstentions will have the effect of a vote against the proposal. Brokernon-votes will be excluded from the calculation and will have no effect on the outcome of the voting. For all other matters proposed for a vote at the meeting, the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote is required to approve the matter. Abstentions will have the effect of a vote against these proposals. Brokernon-votes will be excluded from the calculation and will have no effect on the outcome of the voting. | | | | | | | | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement | | | | 49 |
ANNUAL MEETING AND VOTING INFORMATION(CONTINUED)
| A: | You may revoke your proxy before it is exercised by voting in person at the Annual Meeting, by timely delivering a subsequent proxy or by notifying us in writing of such revocation to the attention of the Corporate Secretary, Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240. |
If you are not the shareholder of record, you will need documentation from your record holder stating your ownership to vote personally at the Annual Meeting. See “What is a shareholder of record?” above. | Q: | What is “householding” and how does it affect me? |
| A. | The proxy rules of the SEC permit companies and intermediaries, such as brokers and banks, to satisfy Proxy Statement delivery requirements for two or more shareholders sharing an address by delivering one set of proxy materials to those |
| | | | | | | | 56 | | | | | | Roper Technologies, Inc. 2020 Proxy Statement |
| shareholders. This procedure, known as “householding,” reduces the amount of duplicate information that shareholders receive and lowers our printing and mailing costs. |
Certain intermediaries use householding for our proxy materials and our 20182019 Annual Report. Therefore, only one set of materials may have been delivered to your address if multiple shareholders share the same address. If you share an address with another shareholder and wish to receive a separate set of materials in the future, or if you would like to receive only one set of materials, you should contact your bank, broker, or other intermediary or us at the address and telephone number below. We will promptly send a separate copy of this Proxy Statement or the 20182019 Annual Report if you call us at941-556-2601 or direct your request in writing to the attention of the Corporate Secretary, Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240. | Q: | How can I find the voting results of the Annual Meeting? |
| A. | The Board of Directors has designated an inspector of election who will tabulate the votes submitted by proxy and by ballot. Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in a Current Report on Form8-K to be filed with the SEC within four business days after the Annual Meeting. If the official voting results are not available at that time, we will provide preliminary |
| voting results in the Current Report on Form8-K and will provide the final results in an amendment to the Current Report on Form8-K as soon as they become available. |
| Q: | Who is paying for the expenses involved in preparing and mailing this Proxy Statement? |
| A: | Roper is paying the expenses involved in preparing, assembling and mailing these proxy materials and all costs of soliciting proxies. Our directors, executive officers and other employees may solicit proxies, without additional compensation, personally or by telephone, email or other means of communication. We have also engaged Georgeson Inc.MacKenzie Partners as the proxy solicitor for this Annual Meeting for a fee of approximately $9,500$12,500 plus reasonable expenses. We will reimburse banks, brokers, and other intermediaries, such as custodians, nominees and fiduciaries, that hold our common stock in their names or in the names of their nominees for their reasonable expenses in forwarding proxy materials to beneficial owners. |
| Q: | What is your website for additional information? |
| A: | We maintain a website at www.ropertech.com. The information on our website is not part of this Proxy Statement, and it is not incorporated into any other filings we make with the SEC. |
| | | | | | | | | 50 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 57 |
INFORMATION REGARDING THE 20202021 ANNUAL MEETING OF SHAREHOLDERS If you wish to submit a matter to be considered at the 20202021 Annual Meeting of Shareholders, you must comply with the procedures set forth below. Any proposal or nomination to be made to the Company should be sent to: Roper Technologies, Inc. 6901 Professional Parkway East Suite 200 Sarasota, Florida 34240 Attention: Secretary Proxy Statement Proposals.If you intend to submit a proposal to be included in the Proxy Statement for the 20202021 Annual Meeting of Shareholders, we must receive your proposal no later than January 1,December 28, 2020. All proposals must comply with the SEC regulations under Rule14a-8 for including shareholder proposals in a company’s proxy material. Director Candidate Nomination. OurBy-laws set forth the procedures you must follow if you wish to nominate a director candidate in connection with the 20202021 Annual Meeting of Shareholders. Proxy Access to Include Nominees in our 20202021 Proxy Statement.If you are a shareholder, or a group of up to 20 shareholders, owning 3% or more of our outstanding common stock continuously for at least three years and wish to nominate a director candidate and require us to include such nominee in our Proxy Statement and form of proxy, you must submit your request so it is received by the Company between November 25, 2020 and December 2, 2019 and January 1,25, 2020, in accordance with ourBy-laws. The number of candidates that may be so nominated is limited to the greater of two or the largest whole number that does not exceed 20% of our Board, provided that the shareholder(s) and nominee(s) satisfy the requirements set forth in ourBy-laws. All proxy access nominations must be accompanied by information about the nominating shareholders as well as the nominees and meet the requirements specified in ourBy-laws, including the information specified under “Nominees Not for Inclusion in our 20202021 Proxy Statement” below. Nominees Not for Inclusion in our 20202021 Proxy Statement.If you wish to nominate a director candidate in connection with the 20202021 Annual Meeting of Shareholders and are not requiring that the nominee be included in our Proxy Statement, you must submit the nomination so it is received by the Company between February 11, 20208, 2021 and March 12, 2020,10, 2021, in accordance with ourBy-laws.The notice to nominate a person for election as a Company director must include a written statement setting forth (i) the name of the person to be nominated; (ii) the number and class of all shares of each class of Company stock owned of record and beneficially by such person, as reported by such person to you; (iii) such other information regarding each nominee proposed by you as would have been required to be included in a Proxy Statement filed pursuant to the proxy rules of the SEC if the nominee had been nominated by the Board of Directors; (iv) such person’s signed consent to serve as a director of our Company if elected; (v) your name and address; (vi) the number and class of all shares of each class of Company stock owned of record and beneficially by such shareholder (and any beneficial owner on whose behalf the nomination is made); and (vii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to Roper’s securities. Matters for Annual Meeting Agenda.If you wish to have other business (not the nomination of a director candidate) brought before the 20202021 Annual Meeting of Shareholders, you must submit the proposal between February 11, 20208, 2021 and March 12, 2020,10, 2021, in accordance with ourBy-laws. If you intend to present the matter directly at the 20202021 Annual Meeting of Shareholders, the notice must include (a) the text of the proposal; (b) a brief statement of the reasons why you favor the proposal; (c) your name and address; (d) the number and class of all shares of each class of Company stock owned of record and beneficially by you (and any beneficial owner on whose behalf the proposal is made); (e) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on | | | | | | | | | | 58 | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 51 |
| | behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to the Roper’s securities; and (f) if applicable, any material interest of you and such beneficial owner in the matter proposed (other than as a shareholder). |
With respect to matters not included in the Proxy Statement but properly presented at the 20202021 Annual Meeting of Shareholders, management generally will be able to vote proxies in its discretion if it receives notice of the proposal during the period specified above and advises shareholders in the Proxy Statement for the 20202021 Annual Meeting of Shareholders about the nature of the matter and how management intends to vote on the matter, unless the proponent of the shareholder proposal (a) provides us with a timely written statement that the proponent intends to deliver a Proxy Statement to at least the percentage of our voting shares required to carry the proposal; (b) includes the same statement in the proponent’s own proxy materials; and (c) provides us with a statement from a solicitor confirming that the necessary steps have been taken to deliver the Proxy Statement to at least the percentage of our voting shares required to carry the proposal. OTHER MATTERS As of the date of this Proxy Statement, the Board of Directors knows of no other business which will be or is intended to be presented at the Annual Meeting. By the Order of the Board of Directors 
L. Neil Hunn President and Chief Executive Officer Dated: April 30, 2019 | | | | | | | 52 | | | |
| | Roper Technologies, Inc. 2019 Proxy Statement |
APPENDIX A—RECONCILIATIONS
Table 1: EBITDA and EBITDA Margin Reconciliation
(in millions, except percentages)
| | | | | | | | | | | | | | | 2017 | | | 2018 | | | | | GAAP Revenue | | $ | 4,607 | | | $ | 5,191 | | | | | Purchase accounting adjustment to acquired deferred revenue | | | 57 | | | | 8 | | | | | Adjusted Revenue (A) | | $ | 4,665 | | | $ | 5,199 | | | | | GAAP Net Earnings | | | 972 | | | | 944 | | | | | Taxes | | | 63 | | | | 254 | | | | | Interest Expense | | | 181 | | | | 182 | | | | | Depreciation | | | 50 | | | | 50 | | | | | Amortization | | | 295 | | | | 318 | | | | | Purchase accounting adjustment to acquired deferred revenue | | | 57 | | | | 8 | | | | | Debt extinguishment charge | | | - | | | | 16 | | | | | One-time expense for accelerated vesting | | | - | | | | 35 | | | | | Purchase accounting adjustment for commission expense | | | (5 | ) | | | - | | | | | Gain on sale of divested energy product line | | | (9 | ) | | | - | | | | | Impairment charge on minority investment | | | 2 | | | | - | | | | | Adjusted EBITDA (B) | | $ | 1,605 | | | $ | 1,806 | | | | | Adjusted EBITDA Margin (B) / (A) | | | 34.4 | % | | | 34.7 | % |
Table 2: Cash Flow Reconciliation
(in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | 2008 | | | 2013 | | | 2017 | | | 2018 | | | | | | | Operating Cash Flow | | $ | 434 | | | $ | 803 | | | $ | 1,234 | | | $ | 1,430 | | | | | | | Capital Expenditures | | | (30 | ) | | | (43 | ) | | | (49 | ) | | | (49 | ) | | | | | | Capitalized Software Expenditures | | | (6 | ) | | | (1 | ) | | | (11 | ) | | | (10 | ) | | | | | | Free Cash Flow | | $ | 398 | | | $ | 759 | | | $ | 1,175 | | | $ | 1,371 | |
Note: Numbers may not foot due to rounding.24, 2020
| | | | | | | | | | | | | Roper Technologies, Inc. 20192020 Proxy Statement | | | | 5359 |
APPENDIX A—RECONCILIATIONS Table 1: EBITDA and EBITDA Margin Reconciliation (in millions, except percentages) | | | | | | | | | | | | | | | 2018 | | | 2019 | | GAAP Revenue | | $ | 5,191 | | | $ | 5,367 | | Purchase accounting adjustment to acquired deferred revenue | | | 8 | | | | 11 | | Adjusted Revenue (A) | | $ | 5,199 | | | $ | 5,377 | | | | | | | GAAP Net Earnings | | | 944 | | | | 1,768 | | Taxes | | | 254 | | | | 460 | | Interest Expense | | | 182 | | | | 187 | | Depreciation | | | 50 | | | | 49 | | Amortization | | | 318 | | | | 367 | | Purchase accounting adjustment to acquired deferred revenue | | | 8 | | | | 11 | | Debt extinguishment charge | | | 16 | | | | - | | One-time expense for accelerated vesting | | | 35 | | | | - | | Transaction-related expenses for completed acquisitions and divestitures | | | - | | | | 6 | | Gain on sale of divested business | | | - | | | | (921 | ) | | | | | | Adjusted EBITDA (B) | | $ | 1,806 | | | $ | 1,925 | | | | | | | Adjusted EBITDA Margin (B) / (A) | | | 34.7 | % | | | 35.8 | % |
Table 2: Cash Flow Reconciliation (in millions) | | | | | | | | | | | | | | | | | | Adjusted Cash Flow Reconciliation ($M) | | | | | | | | | | | | | | | | | | | | | 2009 | | | 2014 | | | 2018 | | | 2019 | | Operating Cash Flow | | $ | 368 | | | $ | 840 | | | $ | 1,430 | | | $ | 1,462 | | Add: Cash taxes paid on sale of Scientific Imaging businesses | | | - | | | | - | | | | - | | | | 39 | | Adjusted Operating Cash Flow | | $ | 368 | | | $ | 840 | | | $ | 1,430 | | | $ | 1,501 | | Capital Expenditures | | | (26 | ) | | | (38 | ) | | | (49 | ) | | | (53 | ) | Capitalized Software Expenditures | | | (5 | ) | | | (3 | ) | | | (10 | ) | | | (10 | ) | Adjusted Free Cash Flow | | $ | 337 | | | $ | 800 | | | $ | 1,371 | | | $ | 1,438 | |
Note: Numbers may not foot due to rounding. | | | | | | | | 60 | | | | | | Roper Technologies, Inc. 2020 Proxy Statement |
APPENDIX B—AMENDMENT TO DIRECTOR COMPENSATION PLAN THIRD AMENDMENT TO ROPER TECHNOLOGIES, INC. DIRECTOR COMPENSATION PLAN This Third Amendment to the Roper Technologies, Inc. Director Compensation Plan (the “Plan”) is made effective on January 1, 2020. | (1) | Schedule I of the Plan shall be deleted in its entirety and replaced with the following revised Schedule I: |
SCHEDULE I DIRECTOR COMPENSATION SCHEDULE The following shall become effective as of January 1, 2020 Base Annual Cash Retainer (allNon-Employee Directors): $60,000 Supplemental Annual Cash Retainers: Chair of Audit Committee: $5,000 Chair of Compensation Committee: $5,000 Chair of Nominating and Governance Committee: $5,000 Independent Chair of the Board: $125,000 At the beginning of each calendar year, aNon-Employee Director may elect to accept some or all of her/his cash retainer(s) in Stock. The number of shares of Stock that equal the economic value of the portion of the cash retainer(s) elected to be received in Stock shall be calculated by the closing price for the Stock on the date of grant, which shall be the date that the Company pays the cash retainers toNon-Employee Directors. Meeting Fees: There are no fees for Board meetings or committee meetings. Annual RSUs: The number of RSUs that equal an economic value of $385,000 measured by using the closing price for the Stock on the date of grant. Limitation on Compensation: Any annual increase in aggregate pay (cash and equity) is limited to no more than 3% in any one year period, and no more than 6% in the three year period ended 2022. | (2) | All other terms and conditions of the Plan shall remain in full force and effect. |
|  | | John K. Stipancich Corporate Secretary |
| | | | | | | | | | | | | Roper Technologies, Inc. 2020 Proxy Statement | | | | 61 |
ROPER TECHNOLOGIES, INC. 6901 PROFESSIONAL PKWY EAST SARASOTA, FL 34240 ATTN: LEGAL DEPT VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on June 9, 2019.7, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 9, 2019.7, 2020. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E71423-P21824D11195-P39685 KEEP THIS PORTION FOR YOUR RECORDS
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | | | | ROPER TECHNOLOGIES, INC. | | ROPER TECHNOLOGIES, INC. For All | | For Withhold All | | Withhold All | | For All Except | | | | | The Board of Directors recommends you vote FOR the following: | | | | | | | | | | | 1. | | Election of Directors | | | | | | ☐ | | ☐ | | ☐ | | | | | | | Nominees: | | | | | | | | | | | | | | | | | 01) Shellye L. Archambeau | | | | 06) Robert E. Knowling, Jr. | | | | | | | 02) Amy Woods Brinkley | | | | 07) Wilbur J. Prezzano | | | | | | | 03) John F. Fort, III | | | | 08) Laura G. Thatcher | | | | | | | 04) L. Neil Hunn | | | | 09) Richard F. Wallman | | | | | | | 05) Robert D. Johnson | | | | 10) Christopher Wright | | | | | | | | | | | The Board of Directors recommends you vote FOR the following proposals: | | For | | Against | | Abstain | | | | | | | | | | | | 2. | | To consider, on a non-binding advisory basis, a resolution approving the compensation of our named executive officers. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | 3. | | To ratify of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the year ending December 31, 2019. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | The Board of Directors recommends you vote AGAINST the following proposal: | | | | | | | | | | | | | | | | | | 4. | | To consider a shareholder proposal regarding political contributions disclosure, if properly presented at the meeting. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | NOTE:The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s).If no direction is made, this proxy will be voted FOR the reelection of all nominees listed, FOR Proposal 2, FOR Proposal 3, and AGAINST Proposal 4. | | | | | | |
| | | | | | | | | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following proposals: | | For | | Against | | Abstain | | | | | | | | | | | | | | | 2. | | To consider, on a non-binding advisory basis, a resolution approving the compensation of our named executive officers. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 3. | | To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the year ending December 31, 2020. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | 4. | | To approve an amendment to the Roper Technologies, Inc. Director Compensation Plan. | | ☐ | | ☐ | | ☐ | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NOTE:The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s). If no direction is made, this proxy will be voted FOR the reelection of all nominees listed, FOR Proposal 2, FOR Proposal 3, and FOR Proposal 4. | | | | | | | | | | | | | | | | | | | | | For address changes and/or comments, please check this box and write them ☐ on the back where indicated. | | ☐ | | | | | Please indicate if you plan to attend this meeting. | | ☐ | | ☐ | | | | | | Yes | | No | | |
| | | | | | | | | | Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by a duly authorized officer. | | |
| | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | |
| | | | | | | | | | | | Signature (Joint Owners) | | Date | | |
Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to be Held on June 10, 2019:8, 2020: The Notice and Proxy Statement and Annual Report to Shareholders are available at www.proxyvote.com. We are monitoring the situation regarding COVID-19 (Coronavirus) closely. If we decide to hold the meeting solely by means of remote communication, we will announce that fact and post additional information on our website www.ropertech.com. If you plan to attend the meeting, please check the website one week prior to the meeting date. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — E71424-P21824D11196-P39685
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF SHAREHOLDERS JUNE 10, 20198, 2020 The undersigned hereby authorize(s) CHRISTINE E. HERMANNLINDSAY B. HAWKER and JOHN K. STIPANCICH, or either of them as proxies, and each with full power of substitution and revocation, to represent and vote the shares of common stock the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held on June 10, 20198, 2020 at 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240 at 8:12:00 a.m.p.m. (local time) and at any adjournments or postponements thereof. THE SHARES REPRESENTED BY THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE REELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE, FOR PROPOSAL 2, FOR PROPOSAL 3, AND AGAINSTFOR PROPOSAL 4. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE. | | | | | | | | | | Address Changes/Comments: | | | | | | | | | | | | | | | | | |
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) CONTINUED AND TO BE SIGNED ON REVERSE SIDE |
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