LETTER TO SHAREOWNERS
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March 15, 2022 DEAR SHAREOWNERS, The past year has proven our strength and resolve as we emerge from the pandemic. While Honeywell continues to face challenges created by the new normal, the Company's principles and core behaviors have provided tenets to help guide a roadmap to the future. With 2021 in the books, I would like to take the opportunity to talk about how the Honeywell Board of Directors has worked on your behalf. We on the Board have a duty to be attuned to the perspectives of our shareowners while providing long-term guidance to the Company's strategic vision and performance culture. Honeywell is in the business of changing how the world works, and Darius and his leadership team are becoming pacesetters in sustainability efforts. Yale School of Management's Jeff Sonnenfeld ranked Darius's actions as one of the best CEO performances of 2021 in part due to making sustainability a priority. The Board's Corporate Governance and Responsibility Committee provides holistic oversight and thought leadership as the company navigates rapidly evolving environmental, social, and governance (ESG) policies. We recently welcomed Rose Lee to the Board. She has extensive ESG experience and will be an invaluable addition to the Board as we further advance Honeywell's sustainability efforts. The Company and its Board are intensely committed to the highest levels of ESG performance. Honeywell is uniquely positioned to help industries across the globe improve their sustainability. A significant portion of the Company’s research and development spend on new products is in its ESG-related portfolio, much of which underscores its commitment to reducing greenhouse gas emissions throughout the value chain. I encourage you to read our 2021 Corporate Citizenship Report, at investor.honeywell.com (see “ESG/ESG Information”), to learn more about how Honeywell's ESG-oriented in energy, aviation, technology, and beyond will help shape our future. The Company is continuing its efforts to invent and commercialize breakthrough technologies in energy, safety, security, productivity, and urbanization. While the Company has and will continue to face challenges in the near term, I have the utmost confidence in where the Company is headed. I speak for the entire Board when I say I am highly encouraged by Honeywell’s progress and eager to see all it will accomplish as a premier global technology company. Before I close, I’d like to remember Gen. Raymond Odierno, a member of our Board who passed away in 2021. A retired four-star general, Ray brought deep insights to our Board and it was an honor and pleasure to serve with him. Sincerely,  D. SCOTT DAVIS Lead Director |  D. SCOTT DAVIS Lead Director | |||||
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| DATE: | April 25, 2022 |  VOTE BY TELEPHONE In the U.S. or Canada, you can vote your shares by calling 800-690-6903. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card.  VOTE BY INTERNET You can vote your shares online at www.proxyvote.com. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card.  VOTE BY SCANNING You can vote your shares online by scanning the QR code on your proxy card. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card. Additional software may need to be downloaded.  VOTE BY MAIL You can vote by mail by marking, dating, and signing your proxy card or voting instruction form, and returning it in the postage-paid envelope.  VOTE DURING THE VIRTUAL MEETING OF SHAREOWNERS You can vote your shares during the virtual meeting. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card. | |||||||||
NOTICE OF ANNUAL
MEETING OF SHAREOWNERS
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10:30 a.m. EDT | |||||||||
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| PLACE: | www.virtualshareholdermeeting.com/HON2022 The meeting will be held in virtual format only. Please see page 106 of the Proxy Statement for additional details. | ||||||||
| RECORD | Close of business on February | ||||||||
MEETING AGENDA | |||||||||
 | Important Notice of Internet Availability of Proxy Materials |
The Securities and Exchange Commission’s “Notice and Access” rule enables Honeywell to deliver a Notice of Internet Availability of Proxy Materials to shareowners in lieu of a paper copy of the Proxy Statement, related materials, and our Annual Report to Shareowners. It contains instructions on how to access our Proxy Statement and 2019 Annual Report and how to vote online.
| The Securities and Exchange Commission’s “Notice and Access” rule enables Honeywell to deliver a Notice of Internet Availability of Proxy Materials to shareowners in lieu of a paper copy of the Proxy Statement, related materials, and its Annual Report to Shareowners. It contains instructions on how to access the Proxy Statement and 2021 Annual Report and how to vote online. Shares cannot be voted by marking, writing on, and/or returning the Notice of Internet Availability. Any Notices of Internet Availability that are returned will not be counted as votes. |
We encourage shareowners to vote promptly as this will save the expense of additional proxy solicitation. Shareowners of record on the Record Date
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You will be required to present the registration confirmation and government-issued photo identification to enter the Annual Meeting. For more details, please see “Additional Information — Attendance at the Annual Meeting” on page 101 of the Proxy Statement.
We are monitoring coronavirus (COVID-19) developments and the related recommendations and protocols issued by public health authorities and federal, state, and local governments. If we determine that alternative Annual Meeting arrangements are advisable or required, then we will announce our decision and post additional information on our Investors Relations website at investor.honeywell.com. Please check this website in advance of the Annual Meeting date if you are planning to attend in person.
This Notice of Annual Meeting of Shareowners and related Proxy Materials are being distributed or made available to shareowners beginning on or about March 12, 2020.
By Order of the Board of Directors,
Victor J. Miller
Vice President, Deputy General Counsel,
Corporate Secretary, and Chief Compliance Officer
By Telephone
In the U.S. or Canada, you can
vote your shares by calling
+1 (800) 690-6903.
By Internet
You can vote your shares online at www.proxyvote.com. You will need the16-digit control number on the Notice of Internet Availability or proxy card.
By Mail
You can vote by mail by marking, dating, and signing your proxy card or voting instruction form, and returning it in the postage-paid envelope.
By Scanning
You can vote your shares online by scanning the QR code on your proxy card. You will need the16-digit control number on the Notice of Internet Availability or proxy card. Additional software may need to be downloaded.
In Person
You can vote your shares by attending the Annual Meeting. To attend, you must call +1 (844) 318-0137 on or prior to April 9, 2020 to pre-register and obtain an admission ticket.
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CONTENTS | i | | | Proxy Summary | Pg | 1 | |||||||
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| 03 | | | Corporate Responsibility and Sustainability | Pg | 30 | ||||||||
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| 04 | | | Director Compensation | Pg | 37 | ||||||||
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| 05 | | | Proposal 2: Advisory Vote to Approve Executive Compensation | Pg | 40 | ||||||||
| 06 | | | Compensation Discussion and Analysis | Pg | 41 | ||||||||
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| 07 | | | Executive Compensation Tables | Pg | 70 | ||||||||
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| 08 | | | Proposal 3: Approval of Independent Accountants | Pg | 89 | ||||||||
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| 09 | | | Proposal 4: Shareowner Proposal—Let Shareholders Vote on Bylaws Amendments | Pg | 91 | ||||||||
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| 10 | | | Proposal 5: Shareowner Proposal—Report on Lobbying Payments and Policy | Pg | 94 | ||||||||
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| 11 | | | Additional Information | Pg | 97 | ||||||||
| Reconciliation, notes, and definitions ofnon-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this proxy statement, other than as part of disclosure of target levels, can be found on page 41 or in Appendix A. | 97 | |||||||||||
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This proxy summary is intended to provide a broad overview of our 2019 performance, corporate governance, and compensation highlights. As this is only a summary, we encourage you to read the entire Proxy Statement for more information prior to voting.
ANNUAL MEETING OF SHAREOWNERS
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MEETING AGENDA AND VOTING MATTERS
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Notice and Proxy Statement | 2022 | | 3 | |||||||||
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| Reconciliation, notes, and definitions of non-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 50 or in Appendix A. | ||||||||||||||
| 4 | | Notice and Proxy Statement | 2022 | ||||||
 | Performance Materials and Technologies |
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| Solutions to make air travel safer, more efficient, and more environmentally responsible, including urban air mobility solutions and flight efficiency software | ||||||||||||||
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 | Safety and Productivity Solutions |  | Honeywell Building Technologies | |||||||||||||
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| Honeywell Forge includes a mix of software products and enabling services across our segments that help companies use operational data to drive insights that improve processes, enhance productivity, support sustainability initiatives, and empower workers. | ||||||||||||||||
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AGAINST2019
Notice and Proxy Statement | 2022 | | 5 | |||||||||
SUMMARY
| Sales | Segment Margin | Adj. Earnings per Share* | Free Cash Flow | ||||||||
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EPS V% exclude pension mark-to-market, changes in fair value for Garrett equity securities, a non-cash charge associated with a further reduction in value of reimbursement receivables following Garrett's emergence from bankruptcy on April 30, 2021, an expense related to UOP matters, gain on the sale of the retail footwear business, a 2Q20 favorable resolution of a foreign tax matter related to the spin-off transactions, and the 2020 non-cash charges associated with the reduction in value of reimbursement receivables due from Garrett. Reconciliation, notes, and definitions ofnon-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 4150 or in Appendix A.
| Cumulative five-year TSR is more than double the Compensation Peer Group median return |
| median by a multiple of 1.8x | |||||||||||
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KEY LEADERSHIP APPOINTMENTS – DEEP LEADERSHIP BENCH SUPPORTED BY ROBUST SUCCESSION PLANNING AND KEY HIRES
Tim Mahoney appointed as Senior Vice President, Enterprise Transformation. Mr. Mahoney has established a successful track record in his three decades of work in the aerospace industry, where he served 10 years as President and Chief Executive Officer of Honeywell Aerospace. In his new role, Mr. Mahoney will be responsible for driving the digitization of Honeywell’s core support functions and promoting common processes, data management, and systems to better serve customers while operating more efficiently.
Mike Madsen appointed as President and Chief Executive Officer of Honeywell Aerospace in charge of running Honeywell’s largest segment. Prior to his appointment, Mr. Madsen served as Vice President of Integrated Supply Chain for Honeywell Aerospace, where he was responsible for the global supply chain and manufacturing footprint. Mr. Madsen has over three decades of experience in the Honeywell Aerospace business.
Suresh Venkatarayalu appointed as Chief Technology Officer in charge ofend-to-end new product development and introduction processes, including efforts to develop new, breakthrough technologies and software for the Industrial Internet of Things.
Jeff Kimbell appointed as Senior Vice President and Chief Commercial Officer in charge of driving organic growth by enhancing global sales and marketing capabilities.
TRANSFORMATION INITIATIVES – HONEYWELL CONNECTED ENTERPRISE, INTEGRATED SUPPLY CHAIN, AND HONEYWELL DIGITAL
Honeywell Connected Enterprise delivered double-digit connected software growth in 2019. The transition to a software-industrial company is still in its early stages, but is off to a tremendous start as the organization launched a new suite of connected offerings, including Honeywell Forge.
Advanced our Integrated Supply Chain transformation to drive over $0.5 billion long-term,run-rate savings, through improved material productivity, streamlined manufacturing footprint, and automation of procurement processes. In 2019, we further established supply base management strategies and optimized our manufacturing and distribution footprint.
Established the Honeywell Digital initiative to drive process improvement, digitization, and efficiencies across the Company. Honeywell Digital is the foundation to running the Company with data-driven decision making. In 2019, the initiative provided enhanced digital marketing and customer contact centers, reduced our enterprise resource management (ERP) systems by 28% from 71 to 51, rationalized over 500 software applications, and cleansed 5.2 million critical master data records. We also remain on track to achieving our long-term target of ~10 ERP systems by the end of 2021.
Moved corporate headquarters to Charlotte, North Carolina, a city which will enable recruitment and retention of world-class talent to support Honeywell’s strategic focus on providing leading technology and software solutions in key end markets.
Executed a successful brand launch that enhanced our reputation as a premier technology company while reaching more customers, attracting external talent, and engaging more employees through our #futureshapers campaign.
YEAR IN REVIEW – ANOTHER EXCITING YEAR THAT POSITIONS US WELL FOR THE FUTURE
In 2019, we again executed on our commitments to shareowners. We made substantial progress in advancing our strategic initiatives, met or exceeded all financial commitments, gave back to our communities, and upgraded the working experience for our employees. While our work in our communities, for our customers, for our employees, and for our shareowners is not over, we are proud of the outstanding achievements throughout the year.
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CREATING VALUE FOR OUR STAKEHOLDERS
Source: S&P Capital IQ, as of December 31, 2019.
2021. TSR is calculated by the growth in capital from purchasing a share in the company and assuming dividends (regular and special) and share distributions received from any spins are reinvested in the applicable company at the time they are paid.
| 6 | | Notice and Proxy Statement | 2022 | ||||||
COMMITMENT TO SUSTAINABILITY
| 3-Year Capital Deployment* vs. Operating Cash Flow ($B) | 1-Year Return on Invested Capital | ||||
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Notice and Proxy Statement | 2022 | | 7 | |||||||||
| 8 | | Notice and Proxy Statement | 2022 | ||||||
Notice and Proxy Statement | 2022 | | 9 | |||||||||
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We Protect Our people, our communities, and the environment | We Achieve Sustainable growth and accelerated productivity | We Develop Technologies that expand the sustainable capacity of our world | ||||||
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| CARBON NEUTRALITY BY 2035 AND COMMITMENT TO ALIGN WITH SBTi | •Joined the | | •Submitted a commitment letter to the Science Based Targets initiative (SBTi) committing to develop a science-based target in line with SBTi protocols that will include Scope 3 emissions •Committing to address Scope 3 indirect emissions, including through partnerships with industry leaders to identify and implement best practices •Reduction being driven through Honeywell Accelerator, the Company's end-to-end business system •Multi-faceted approach, including energy savings projects, conversion to renewable energy sources, capital improvement projects, and utilization of credible carbon offsets | |||||||||||||||||
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10-10-10 GOALS BY 2024 | •Reduce global Scope 1 and Scope 2 greenhouse gas emissions by an additional10%per dollar of sales from 2018 levels •Deploy at least 10 renewable energy opportunities •Achieve certification to ISO 50001 Energy Management Standard at 10 facilities •On-trackto meet 10-10-10 commitments by 2024 | |||||||||||||||||||
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| SUSTAINABLE OPERATIONS | | •Approximately70% improvement in energy efficiency since 2004 | ||||||||||||||||||
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| Safety record •6,100 sustainability projects since 2010, with annualized savings of $105 million | |||||||||||||||||||
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| ESG-ORIENTED SOLUTIONS | •Decades-long history of innovation to help customers meet their ESG-oriented goals •~60% of 2021 new product research and •>60% of 2021 sales were from offerings that contribute to ESG-oriented outcomes* •Honeywell Solstice® products | •Completed approximately 6,000 guaranteed efficiency projects around the world which, combined, will decrease customers’ energy and operating costs by an estimated $6 billion •Sustainable Technologies Solutions business established to develop innovative offerings that pave the way for a lower carbon economy while addressing other critical environmental concerns •Sustainable Building Technologies business established to advance technologies and services that drive carbon neutrality through carbon reduction, emphasize indoor air quality and occupant health, manage different sources of power, energy storage and usage, and help companies and communities meet their sustainability commitments | ||||||||||||||||||
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| TIME AND DATE | April 25, 2022, 10:30 a.m. EDT | ||||
| PLACE | The meeting will be held in virtual format only.
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| RECORD DATE | Shareowners as of February 25, 2022 are entitled to vote. | ||||
| ADMISSION | To attend the virtual Annual Meeting of Shareowners online, vote, and submit questions during the meeting, you will need the 16-digit control number included on the Notice of Internet Availability of Proxy Materials, on your proxy card (if you requested printed materials), or on the instructions that accompanied your proxy materials. | ||||
OUR 2020 DIRECTOR NOMINEES
| Proposals | Recommended Vote | Page | |||||||||
| No. 1 | Election of Directors | FOR (each nominee) | |||||||||
| No. 2 | Advisory Vote to Approve Executive Compensation | FOR | |||||||||
| No. 3 | Approval of Independent Accountants | FOR | |||||||||
| No. 4 | Shareowner Proposal — Special Shareholder Meeting Improvement | AGAINST | |||||||||
| No. 5 | Shareowner Proposal — Climate Lobbying Report | AGAINST | |||||||||
| No. 6 | Shareowner Proposal — Environmental and Social Due Diligence | AGAINST | |||||||||
| 12 | | Notice and Proxy Statement | 2022 | ||||||
| Proposal 1 | Election of Directors | FOR each nominee | ||||||
•Elect the 10 director nominees identified below, each for a term of one year •Nominees were individually and collectively assessed against a Board Skill Set Matrix that identifies the key strategic skills and core competencies deemed necessary to oversee the Company's current strategy •Director slate reflects highly independent and diverse Board, with the range of perspectives and values needed to enable effective oversight | ||||||||
| Director Nominee | Years of Service | Independent | No. of Current Public Company Boards (Including Honeywell) | Committee Memberships (Effective April 25, 2022) | |||||||||||||||||||
| Audit | CGRC | MDCC | |||||||||||||||||||||
 | Darius Adamczyk Chairman and CEO Honeywell International Inc. | 5 | No | 2 | |||||||||||||||||||
 | D. Scott Davis (Lead Director) Retired Chairman and CEO United Parcel Service, Inc. | 16 | Yes | 2 | n | ex officio | ex officio | ||||||||||||||||
 | Duncan B. Angove Managing Partner Arcspring LLC | 4 | Yes | 1 | n | ||||||||||||||||||
 | William S. Ayer Retired Chairman and CEO Alaska Air Group, Inc. | 7 | Yes | 1 | n | n | |||||||||||||||||
 | Kevin Burke Retired Chairman, President and CEO Consolidated Edison, Inc. | 12 | Yes | 1 | n | ||||||||||||||||||
 | Deborah Flint President and CEO Greater Toronto Airports Authority | 2 | Yes | 1 | n | ||||||||||||||||||
 | Rose Lee President and CEO Cornerstone Buildings Brands | 0 | Yes | 2 | n | ||||||||||||||||||
 | Grace D. Lieblein Former Vice President-Global Quality General Motors Corporation | 9 | Yes | 3 | n | n | |||||||||||||||||
 | George Paz Retired Chairman and CEO Express Scripts | 13 | Yes | 2 | n | n | n | ||||||||||||||||
 | Robin L. Washington Former Executive Vice President and CFO Gilead Sciences | 9 | Yes | 4 | n | ||||||||||||||||||
| Audit | Audit | n | Chair | ||||||||
| CGRC | Corporate Governance and Responsibility Committee | n | Member | ||||||||
| MDCC | Management Development and Compensation Committee | ||||||||||
Notice and Proxy Statement | 2022 | | 13 | |||||||||
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| 5 of 10 | 4 of 10 | 1 of 3 | 7 of 10 | 7.7 | ||||||||||||||||||||
nominees areindependent | nominees are women | nominees are ethnically or racially diverse |
nominees wereborn outside the United States | committees are chaired by women |
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Nominee |
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Independent | No. of Current Public Company Boards (including Honeywell) |
Committee (effective April 27, 2020) | |||||
Darius Adamczyk (Chairman and CEO) |
Chairman and Chief Executive Officer Honeywell International Inc.
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3 |
No |
1 |
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D. Scott Davis (Incoming Lead Director) |
Retired Chairman and Chief Executive Officer United Parcel Service, Inc.
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14 |
Yes |
2 |
Audit Ex officio: CGRC, MDCC | |||||
Duncan B. Angove |
Chief Executive Officer Arcspring LLC
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Yes |
1 |
MDCC | |||||
William S. Ayer |
Retired Chairman and Chief Executive Officer Alaska Air Group, Inc.
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5 |
Yes |
1 |
CGRC MDCC | |||||
Kevin Burke |
Retired Chairman, President and Chief Executive Officer Consolidated Edison, Inc.
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10 |
Yes |
1 |
Audit | |||||
Linnet F. Deily |
Former Deputy United States Trade Representative and
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14 |
Yes |
1 |
CGRC (Chair) Audit | |||||
Deborah Flint |
President and Greater Toronto Airports Authority
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Yes |
1 |
CGRC | |||||
Judd Gregg |
Former Governor and U.S. Senator of New Hampshire
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9 |
Yes |
2 |
Audit MDCC | |||||
Clive Hollick |
Former Chief Executive Officer United Business Media
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16 |
Yes |
1 |
MDCC | |||||
Grace D. Lieblein |
Former Vice President-Global Quality General Motors Corporation
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7 |
Yes |
3 |
MDCC (Chair) CGRC | |||||
Raymond T. Odierno |
Retired Four-Star General
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0 |
Yes |
2 |
CGRC | |||||
George Paz |
Retired Chairman and Chief Executive Officer Express Scripts Holding Company
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11 |
Yes |
2 |
Audit (Chair) CGRC | |||||
Robin L. Washington |
Former Executive Vice President and Chief Financial Officer Gilead Sciences, Inc.
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7 |
Yes |
4 |
Audit | |||||
Lead Director, committee chair, and committee membership appointments will be effective upon each nominee’s election to the Board at the Annual Meeting of Shareowners.
CGRC refers to the Corporate Governance and Responsibility Committee, and MDCC refers to the Management Development and Compensation Committee.
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| DIVERSE AND INDEPENDENT BOARD OF DIRECTORS |
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CORPORATE GOVERNANCE HIGHLIGHTS
| BEST-IN-CLASS BOARD STRUCTURE AND PROCESSES | ||||||
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|  15% threshold for shareowners to call a special meeting | ||||
 | Majority shareowner vote to amend Certificate of Incorporation andBy-laws | |||||
| Annual election of all directors, with majority | |||||
| No poison | |||||
| Robust year-round shareowner engagement, with | |||||
| Proxy access enabling shareowner(s) holding 3% of our stock for three years to include up to two director nominees (or nominees representing 20% of the Board) in our proxy | |||||
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| All director nominees are independent, except our CEO | ||||
| Leader in Board diversity relative to personal characteristics (4 women, 1 Asian, 2 | |||||
| Range of tenures enables balance between historical experience and fresh perspectives | |||||
| Skills and background aligned to our strategic direction | |||||
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| No director may serve on more than four public company boards (including the Honeywell Board) | |||||
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| Independent Lead Director elected by independent directors, with expanded | ||||
| ESG oversight by the CGRCRegular executive sessions of independent directors | |||||
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| Lead Director and CGRC Chair empowered to call special Board meetings at any time for any reason | |||||
| Annual self-assessment to enable adequate Board refreshment and appropriate evolution of Board skills, experience, and | |||||
| perspectivesAnnual refresh of Corporate Governance Guidelines to ensure alignment with best practices | |||||
| Director stock ownership guidelines require equity holdings of at least 5x annual cash retainer | |||||
| ROBUST OVERSIGHT OF RISKS AND OPPORTUNITIES |
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| Robust Enterprise Risk Management (ERM) program to enable Board identification and monitoring of risk | ||||||||
| Purposeful inclusion of key risk areas on Board and/or committee agendas | |||||||
| Engagement with business leaders to review short-term plans, long-term strategies, and associated risks | |||||||
| Incentive compensation not overly leveraged and with maximum payout caps and design features intended to balance pay for performance with the appropriate level of risk-taking | |||||||
| Robust stock ownership requirements and prohibitions against hedging and pledging Honeywell securitiesClawbacks in the event of a significant financial restatement | |||||||
| Combined Corporate Secretary and Chief Compliance Officer roles to facilitate Board oversight of compliance risk | |||||||
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| Code of Business Conduct applies to all directors, officers, and employees, with 100% certification by officers and employees where permitted by law | ||||||
| Suppliers expected to comply with published Supplier Code of Business Conduct, including conflict minerals, anti-human trafficking, human rights, business integrity, and health, safety, and environmental policies | |||||||
| Strong adherence to foundational principles of Integrity and Ethics, Inclusion and Diversity, and Workplace Respect, while fostering a performance culture based on | |||||||
| Over 50% of executive officers are diverse by ethnic background, place of birth(non-U.S.), or gender | |||||||
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| No use of corporate funds for political contributions; robust oversight of and transparency into political activities | |||||||
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EXECUTIVE COMPENSATION SNAPSHOT
Proposal | Advisory Vote to Approve Executive Compensation | FOR | ||||||
•Honeywell's executive compensation program appropriately aligns executive compensation with Company and individual performance | ||||||||
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| Robust Performance |
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Link to Strategy and Performance | Target Compensation Mix | |||||||||||||||||||
| Element | Description | CEO | Other NEOs | |||||||||||||||||
 |  | Base Salary | •Base salaries are determined based on scope of responsibility, years of experience, and individual performance. | •To attract and compensate high-performing and experienced leaders at a competitive level of cash compensation. |  |  | ||||||||||||||
 | Annual Incentive Compensation Plan (ICP) | •80% based on formulaic determination against pre-established financial metrics. •20% based on assessment of individual performance. | •To motivate and reward executives for achieving annual corporate, business unit, and functional goals in key areas of financial and operational performance. |  |  | |||||||||||||||
 | Performance Stock Units (PSUs) (2021–2023) | •CEO and entire Leadership Team*: 50% of annual LTI •Covers three-year period •Relative total shareowner return (TSR) (25% weight) along with key financial metrics (75% weight) | •Focuses executives on the achievement of specific long-term |  |  | |||||||||||||||
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| Stock Options | •CEO and entire Leadership Team*: 35% of annual LTI | •Directly aligns the |  |  | ||||||||||||||||
Restricted Stock Units (RSUs) | •CEO and entire Leadership Team*: 15% of annual LTI | •Strengthens key executive retention over relevant time periods to |  |
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Leadership Team refers to all direct CEO staff officers in 2021, which includes all NEOs.
Notice and Proxy Statement | 2022 | | 15 | |||||||||
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Base Salary |
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Total Annual Direct Compensation |
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Darius Adamczyk | Chairman and CEO | $ | 1,600,000 | $4,065,000 | $6,638,490 | $4,635,409 | $1,974,016 | $18,912,915 | ||||||||||||||||||
Gregory P. Lewis | SVP, Chief Financial Officer | $ | 749,808 | $1,056,000 | $1,763,850 | $1,222,904 | $ 524,348 | $ 5,316,910 | ||||||||||||||||||
Mark R. James | SVP, HR, Security and Communications | $ | 794,231 | $ 996,000 | $2,004,375 | $1,399,450 | $ 586,036 | $ 5,780,092 | ||||||||||||||||||
Anne T. Madden | SVP, General Counsel | $ | 757,019 | $1,102,000 | $1,763,850 | $1,222,904 | $ 524,348 | $ 5,370,121 | ||||||||||||||||||
Rajeev Gautam | President and CEO, Performance Materials and Technologies | $ | 779,231 | $ 976,000 | $2,020,410 | $1,412,368 | $ 601,458 | $ 5,789,467 | ||||||||||||||||||
Timothy O. Mahoney | SVP, Enterprise Transformation (Former President and CEO, Aerospace) | $ | 1,021,346 | $1,681,000 | $3,050,148 | $2,133,623 | $ 909,898 | $ 8,796,015 | ||||||||||||||||||
| NEO | Position | Base Salary | Annual Incentive Plan (ICP)(1) | 2021-2023 Performance Stock Units(2) | Stock Options(3) | Restricted Stock Units(4) | Total Annual Direct Compensation | ||||||||||||||||||||||||||||||||||
| Darius Adamczyk | Chairman and CEO | $ | 1,675,616 | $ | 3,910,000 | $ | 7,502,309 | $ | 5,248,350 | $ | 2,229,920 | $ | 20,566,195 | ||||||||||||||||||||||||||||
| Gregory P. Lewis | SVP, Chief Financial Officer | $ | 830,493 | $ | 1,107,000 | $ | 2,359,083 | $ | 1,643,520 | $ | 689,248 | $ | 6,629,344 | ||||||||||||||||||||||||||||
| Anne T. Madden | SVP, General Counsel | $ | 869,458 | $ | 1,159,000 | $ | 2,359,083 | $ | 1,643,520 | $ | 689,248 | $ | 6,720,309 | ||||||||||||||||||||||||||||
| Que Thanh Dallara | President and CEO, Honeywell Connected Enterprise | $ | 676,466 | $ | 804,000 | $ | 1,955,276 | $ | 1,364,250 | $ | 567,616 | $ | 5,367,608 | ||||||||||||||||||||||||||||
| Michael R. Madsen | President and CEO, Aerospace | $ | 737,052 | $ | 827,000 | $ | 1,572,722 | $ | 1,094,610 | $ | 466,256 | $ | 4,697,640 | ||||||||||||||||||||||||||||
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3 | Approval of Independent Accountants | FOR | ||||||||
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| Proposal 4 | Shareowner Proposal — Special Shareholder Meeting Improvement | AGAINST | ||||||
•Honeywell's Board opposes the shareowner proposal for the following reasons: –Shareowners holding 15% of our outstanding shares already have the right to call a special meeting (either in-person or in a virtual format) at any time –Our robust shareowner outreach and engagement program provides shareowners with numerous avenues to voice their opinion and encourage Board accountability and responsiveness to shareowner feedback –In an unsolicited change in control scenario, the ability for a small minority of shareowners to call a special meeting can undermine the Board's ability to obtain the highest value for existing shareowners –A reduction in shareowner ownership threshold to call a special meeting is unnecessary given related Honeywell corporate governance best practices that are already in place | ||||||||
| Proposal 5 | Shareowner Proposal — Climate Lobbying Report | AGAINST | ||||||
•Shareowner proposal requesting that the Board conduct an evaluation and issue a report describing alignment of Honeywell's lobbying activities with the Paris Agreement and how Honeywell plans to mitigate risk presented by any misalignment, if properly presented at the meeting •Honeywell's Board opposes the shareowner proposal because the Company has issued a report that substantially complies with the above request – the report is available at investor.honeywell.com (see “ESG/ESG Information”) | ||||||||
| Proposal 6 | Shareowner Proposal — Environmental and Social Due Diligence | AGAINST | ||||||
•Shareowner proposal requesting that the Board report on Honeywell's due diligence process to identify and address environmental and social risks related to emissions, spills, or discharges from Honeywell's operations and value chain •Honeywell's Board opposes the shareowner proposal because the Company has issued a report that substantially complies with the above request – the report is available at investor.honeywell.com (see “ESG/ESG Information”) | ||||||||
| 16 | | Notice and Proxy Statement | 2022 |
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ELECTION OF DIRECTORS
Our
DIRECTOR SKILLS AND QUALIFICATIONS
I STRATEGIC SKILLS
Global Experience. Growing sales outside of the United States, particularly in what we call “high growth regions” or “HGRs” such as China, India, Southeast Asia, Africa, and Latin America, is a central part of our long-term strategy for growth. Hence, exposure to markets and economies outside of the United States is an important qualification for our directors. This exposure can take many forms, including government affairs, regulatory, managerial, or commercial.
Regulated Industries/Government Experience.Honeywell is subject to a broad array of government regulations, and demand for its products and services can be impacted by changes in law or regulation in areas such as aviation safety, security, and energy efficiency. Several of our directors have experience in regulated industries, providing them with insight and perspective in working constructively and proactively with governments and agencies globally.
Innovation and Technology.With Honeywell’s transformation to a software-industrial company in the digital age, expertise in combining software programming capabilities with leading-edge physical products and domain knowledge is critical to opening and securing new growth paths for all of Honeywell’s businesses.
Marketing. Developing new markets for our products and services is critical for driving growth. Our directors who have that expertise provide a much desired perspective on how to better market and brand our products and services.
Industries, End Markets, and Growth Areas.Experience in industries, end markets, and growth areas that Honeywell serves – Commercial Aerospace, Industrial Productivity,Non-Residential, Oil and Gas / Petrochemical, Defense and Space, and Specialty Chemicals – enables a better understanding of the issues facing our businesses.
I CORE COMPETENCIES
Senior Leadership Experience.Experience serving as CEO or a senior executive as well ashands-on leadership experience in core management areas, such as strategic and operational planning, financial reporting, compliance, risk management, and leadership development, provide a practical understanding of complex organizations like Honeywell.
Public Company Board Experience.Service on the boards and board committees of other public companies provides an understanding of corporate governance practices and trends and insights into board management, relations between the board, the CEO and senior management, agenda setting, and succession planning.
Risk Management. In light of the Board’s role in risk oversight and our robust Enterprise Risk Management program, we seek directors who can help identify, manage, and mitigate key risks, including cybersecurity, regulatory compliance, competition, financial, brand integrity, human capital, and intellectual property.
Financial Expertise. We believe that an understanding of finance and financial reporting processes is important for our directors to enable them to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. We seek directors with background and experience in capital markets, corporate finance, accounting, and financial reporting as well as directors with “accounting or related financial management expertise” as defined in the New York Stock Exchange listing standards.
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Our Board adopted a skills and experience matrix to facilitate the comparison of our directors’ skills versus those deemed necessary to oversee our current strategy. The skills included in the matrix are evaluated against our articulated strategy each year so that the matrix can serve as anup-to-date tool for identifying director nominees who collectively have the complementary experience, qualifications, skills, and attributes to guide our Company. Our 2020 Board skillset matrix reflecting the characteristics of our director nominees is set forth below.
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COMMITMENT TO BOARD INTEGRITY,
DIVERSITY, AND INDEPENDENCE
In addition to ensuring that our director nominees possess the requisite skills and qualifications, the CGRC places an emphasis on ensuring that the nominees demonstrate the right leadership traits, personality, work ethic, independence, and diversity of background to align with our performance culture and our long-term strategic vision. Specifically, these criteria include:
Exemplification of the highest standards of personal and professional integrity.
Potential contribution to the diversity and culture of the Board, including by virtue of age, educational background, global perspective, gender, ethnicity, and nationality.
Independence from management under applicable securities law, listing regulations, and Honeywell’s Corporate Governance Guidelines.
Willingness to constructively challenge management through active participation in Board and committee meetings.
Ability to devote sufficient time to performing their Board and committee duties.
While Honeywell’s Corporate Governance Guidelines do not prescribe a diversity policy or standards, as a matter of practice, we are committed to enhancing both the diversity of the Board itself and the perspectives and values that are discussed in Board and committee meetings. Our slate of director nominees reflects this approach and the Board’s commitment to diversity.
The CGRC believes that, in addition to diversity of personal characteristics and experiences, diversity of service tenures on the Honeywell Board also facilitates effective Board oversight. Directors with many years of service to Honeywell provide the Board with a deep knowledge of our Company, while newer directors lend fresh perspectives. Hence, careful consideration is made to achieve the appropriate balance.
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* Lead Director appointment and committee memberships will be effective upon Mr. Davis’ election to the Board at the Annual Meeting of Shareowners. Currently, Mr. Davis serves as Chair of the MDCC and a member of the Audit Committee.
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* Ms. Flint’s and Sen. Gregg’s committee membership appointments will be effective upon their election to the Board at the Annual Meeting of Shareowners. Currently, Ms. Flint is not a member of any committee, and Sen. Gregg serves as a member of the Audit Committee and the CGRC.
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* Ms. Lieblein’s committee chair appointment will be effective upon her election to the Board at the Annual Meeting of Shareowners.
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* Gen. Odierno’s committee membership appointment will be effective upon his election to the Board at the Annual Meeting of Shareowners. Currently, Gen. Odierno is not a member of any committee.
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NOMINATION AND ELECTION PROCESS
Honeywell’s directors are elected at each Annual Meeting of Shareowners and hold office forone-year terms until the next Annual Meeting of Shareowners and until their successors have been duly elected and qualified. Honeywell’sBy-laws provide that in any uncontested election of directors (an election in which the number of nominees does not exceed the number of directors to be elected), any nominee who receives a greater number of votes cast “FOR” his or her election than votes cast “AGAINST” his or her election (excluding abstentions) will be elected to the Board of Directors.
The By-laws also provide that any incumbent nominee who does not receive a majority of votes cast in an uncontested election is expected to promptly tender his or her resignation to the Chairman of the Board following the certification of the shareowner vote. This resignation will be promptly considered through a process managed by the CGRC, excluding any director nominees who did not receive a majority of votes cast to elect him or her to the Board.
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 | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR | ||||
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| STRATEGIC SKILLS | STRATEGIC SKILLS | ||||||||||||||||||||||||||||||||||||||||
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Global Experience
| Regulated Industries/ Government Experience Honeywell is subject to a broad array of government regulations, and demand for its products and services can be impacted by changes in law or regulation in areas such as aviation safety, security, and energy efficiency. It is important to have directors with experiences in government and regulated industries that provide them with insight and perspective in working constructively and proactively with governments and agencies globally. | Innovation and Technology With Honeywell’s transformation to a software-industrial company in the digital age, expertise in combining software programming capabilities with leading-edge physical products and domain knowledge is critical to opening and securing new growth paths for all of Honeywell’s businesses. | Marketing Developing new markets for products and services is critical for driving growth. The Company’s directors who have that expertise provide a much-desired perspective on how to better market and brand Honeywell’s products and services. | Industries, End- Markets, and Growth Areas Experience in industries, end markets, and growth areas that Honeywell serves enables a better understanding of the issues facing these businesses. These areas include our Commercial Aerospace, Industrial Productivity, Non-Residential, Oil and Gas / Petrochemical, Defense and Space, and Specialty Chemicals end markets as well as growth areas such as life sciences and sustainable technology solutions. | ESG Experience in environmental, social, and governance (ESG) matters enables management of ESG risks and opportunities as strategic business imperatives. With ESG at the forefront of Honeywell’s long-term strategy, it is important to have directors with expertise in products and solutions that support more sustainable outcomes, climate change drivers and impacts, corporate social responsibility, human capital management, inclusion and diversity, and corporate ethics. | ||||||||||||||||||||||||||||||||||||
| CORE COMPETENCIES | |||||||||||||||||||||||||||||
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Senior Leadership Experience Experience serving as CEO or a senior executive as well as hands-on leadership experience in core management areas – such as strategic and operational planning, financial reporting, compliance, risk management, and leadership development – provide a practical understanding of complex organizations like Honeywell. | Public Company Board Experience Service on the boards and board committees of other public companies provides an understanding of corporate governance practices and trends and insights into board management, relations between the board, the CEO and senior management, agenda setting, and succession planning. | Risk Management In light of the Board’s role in risk oversight and the Company’s robust Enterprise Risk Management program, Honeywell seeks directors who can help identify, manage, and mitigate key risks, including cybersecurity, regulatory compliance, competition, brand integrity, human capital, and intellectual property. | Financial Expertise The Company believes an understanding of finance and financial reporting processes is important for its directors to enable them to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. Honeywell seeks directors with background and experience in capital markets, corporate finance, accounting, and financial reporting. | ||||||||||||||||||||||||||
| 18 | | Notice and Proxy Statement | 2022 | ||||||
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| Global Experience |  | | |  | | | | | |||||||||||||||||||||||||||
Regulated Industries/ Government Experience | | |  | | | | | | | | |||||||||||||||||||||||||
Innovation and Technology | | | | | | | | | | | |||||||||||||||||||||||||
| Marketing | | | | | | | | | | ||||||||||||||||||||||||||
Industries, End-Markets & Growth Areas | | | | |  | | | | | | |||||||||||||||||||||||||
| ESG | | | | | | | | | | | |||||||||||||||||||||||||
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Senior Leadership Experience (most senior position held) | Chair and CEO | Chair and CEO | Presi-dent | Chair and CEO | Chair and CEO | CEO | CEO | VP | Chair and CEO | CFO | |||||||||||||||||||||||||
No. of Public Company Boards (Current* I Past) | 2 I 1 | 2I 2 | 1I 0 | 1I 2 | 1I 1 | 1I 0 | 2 I 1 | 3I 0 | 2I 1 | 4 I 2 | |||||||||||||||||||||||||
| Risk Management | | | | | | | | | | | |||||||||||||||||||||||||
| Financial Expertise | | | | | | | | | | | |||||||||||||||||||||||||
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| Gender | Male | Male | Male | Male | Male | Female | Female | Female | Male | Female | |||||||||||||||||||||||||
| Race/Ethnicity | White | White | White | White | White | Black | Asian | Hispanic | Hispanic | Black | |||||||||||||||||||||||||
| Technical Expertise (direct hands-on experience or subject-matter expert during his/her career) | ||||
| Managerial Expertise (expertise derived through direct managerial experience) | ||||
| Working Knowledge (experience derived through investment banking, private equity investing, serving as a member of a relevant board committee at Honeywell or at another public company, or serving as an executive officer or on the board of a public company in the relevant industry) | ||||
Notice and Proxy Statement | 2022 | | 19 | |||||||||
DIVERSITY, AND INDEPENDENCE
| Diversity of Nominees | Tenure | ||||
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| Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
| PART I: GENDER IDENTITY | ||||||||||||||
| Directors | 4 | 6 | — | — | ||||||||||
| PART II: DEMOGRAPHIC BACKGROUND | ||||||||||||||
| African American or Black | 2 | — | — | — | ||||||||||
| Alaskan Native or Native American | — | — | — | — | ||||||||||
| Asian | 1 | — | — | — | ||||||||||
| Hispanic or Latinx | 1 | 1 | — | — | ||||||||||
| Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
| White | — | 5 | — | — | ||||||||||
| Two or More Races or Ethnicities | — | — | — | — | ||||||||||
| LGBTQ+ | — | — | — | — | ||||||||||
| Did Not Disclose Demographic Background | — | — | — | — | ||||||||||
| 20 | | Notice and Proxy Statement | 2022 | ||||||
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Background •Chairman and Chief Executive Officer of Honeywell International Inc. since April 2018. •Was President and Chief Executive Officer from March 2017 to April 2018 and Chief Operating Officer from April 2016 to March 2017. •Served as President and CEO of Honeywell Performance Materials and Technologies (PMT) from April 2014 to April 2016. •Served as President of Honeywell Process Solutions from 2012 to 2014 and as President of Honeywell Scanning and Mobility from 2008 to 2012. •Joined Honeywell in 2008 when Honeywell acquired Metrologic, Inc., where he was the Chief Executive Officer. •Previously held several general management assignments at Ingersoll Rand, served as a senior associate at Booz Allen Hamilton, and started his career as an electrical engineer at General Electric. | ||||||||||||||||||||
DARIUS ADAMCZYK Chairman and Chief Executive Officer, Honeywell International Inc. Years of Service: 5 Age: 56 | ||||||||||||||||||||
Other Current Public Company Boards: •Johnson & Johnson | Past Public Company Boards: •Garrett Motion Inc. | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Senior leadership roles in global organizations, both large and small. •Deep understanding of software, both technically and commercially, and a proven track record in growing software-related businesses at Honeywell. •Demonstrated ability to deliver financial results as a leader in a variety of different industries, with disparate business models, technologies, and customers. •Strategic leadership skills necessary to grow Honeywell sales organically and inorganically while meeting the challenges of a constantly changing environment across Honeywell’s diverse business portfolio. | ||||||||||||||||||||
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Background •Managing Partner of Arcspring LLC, a next-generation private equity firm that combines capital, technology, operational expertise, and design-thinking to unlock exponential growth, since 2019. •Was President of Infor, Inc., a privately held provider of enterprise software and a strategic technology partner for more than 90,000 organizations worldwide, from 2010 to 2018. Infor’s software is purpose-built for specific industries, from manufacturing to healthcare, providing complete suites that are designed to support end-to-end business processes and digital transformation. •Served as the Senior Vice President and General Manager of the Retail Global Business Unit of Oracle Corporation, a global technology provider of enterprise software, hardware, and services, from 2005 to 2010. •Joined Oracle through its acquisition of Retek Inc., then a publicly-traded provider of software solutions and services to the retail industry, where he served in various roles of increasing responsibility from 1997 until 2005. | ||||||||||||||||||||
DUNCAN B. ANGOVE Managing Partner, Arcspring LLC Years of Service: 4 Age: 55 Committees: •Management Development and Compensation | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •None | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Senior technology industry leader with global operating experience, including in software and digital transformation, and skilled at driving value creation. •Deep understanding of the trends across enterprise cloud, infrastructure software, digital, and the Internet of Things, and the corresponding risks, including cybersecurity and data privacy compliance. •Extensive experience in corporate strategy, mergers and acquisitions, sales, marketing, and business and product development. | ||||||||||||||||||||
Notice and Proxy Statement | 2022 | | 21 | |||||||||
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Background •Retired Chairman and Chief Executive Officer of Alaska Air Group, Inc. (Alaska Air Group), the parent company of Alaska Airlines and its sister carrier, Horizon Air. •Served as Chief Executive Officer of Alaska Air Group and its subsidiaries through 2012, and as Chairman through 2013. •A veteran of more than three decades in aviation, he began his career with Horizon Air in 1982, where he held a variety of marketing and operations positions. •Joined Alaska Airlines in 1995 as Vice President of Marketing and Planning, and subsequently held the posts of Senior Vice President, Chief Operating Officer, and President. Became Alaska Air Group’s Chief Executive Officer in 2002, and, in May 2003, he was appointed Chairman. •Previously served on the Board of Directors of the Seattle Branch of the Federal Reserve Bank of San Francisco. | ||||||||||||||||||||
WILLIAM S. AYER Retired Chairman and Chief Executive Officer, Alaska Air Group, Inc. Years of Service: 7 Age: 67 Committees: •Corporate Governance and Responsibility (Chair, effective April 25, 2022) •Management Development and Compensation | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •Alaska Air Group, Inc. •Puget Sound Energy, Inc. and Puget Energy, Inc. | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Deep aerospace industry knowledge as well as sales, marketing, and operations experience through his three decades of leadership roles at Alaska Air Group, a company recognized for its best-in-class operating metrics among U.S. air carriers. •Proven leadership skills in developing a business enterprise that can deliver long-term, sustained excellence based on a management style that includes a relentless focus on the customer, continuous improvement, and building a culture of safety, innovation, sustainability, and diversity. •Understanding of the U.S. public utility industry through his service as a director on the board of directors of Puget Energy. | ||||||||||||||||||||
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Background •Retired Chairman, President, and Chief Executive Officer of Consolidated Edison, Inc. (Con Edison), a utility provider of electric, gas, and steam services. •Served as President and Chief Executive Officer from 2005 through 2013, and served as Chairman from 2006 through April 2014. •Joined Con Edison in 1973 and held positions of increasing responsibility in system planning, engineering, law, nuclear power, construction, and corporate planning, including Senior Vice President with responsibility for customer service and for Con Edison’s electric transmission and distribution systems, President of Orange and Rockland Utilities, Inc., a subsidiary of Con Edison, and Chief Executive Officer of Consolidated Edison Company of New York, Inc. •Member of the Board of Trustees of Consolidated Edison Company of New York, Inc. until May 2015. | ||||||||||||||||||||
KEVIN BURKE Retired Chairman, President, and Chief Executive Officer, Consolidated Edison, Inc. Years of Service: 12 Age: 71 Committees: •Audit | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •Consolidated Edison, Inc. | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Extensive management expertise gained through various executive positions, including senior leadership roles, at Con Edison. •Wealth of experience in energy production and distribution, energy efficiency, alternative energy sources, engineering and construction, government regulation, and development of new offerings. •Significant expertise in developing clean and renewable energy infrastructure technology used in clean energy, solar generation, and other energy efficient products and services. •Oversaw the implementation of financial and management information systems, utility operational systems, and process simulators. •Deep knowledge of corporate governance and regulatory issues facing the energy, utility, and service industries. | ||||||||||||||||||||
| 22 | | Notice and Proxy Statement | 2022 | ||||||
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Background •Joined United Parcel Service, Inc. (UPS), a leading global provider of package delivery, specialized transportation, and logistics services in 1986. •Served as the non-Executive Chairman of UPS from September 2014 until May 2016 and as Chairman and Chief Executive Officer from January 1, 2008 to September 2014. •Served as Vice Chairman starting December 2006 and as Senior Vice President, Chief Financial Officer and Treasurer starting January 2001 prior to serving as Chairman and Chief Executive Officer. •Previously held various leadership positions with UPS, primarily in the finance and accounting areas. •Served a critical role in helping UPS to reinvent itself into a technology company. •Chief Executive Officer of II Morrow Inc., a technology company and developer of general aviation and marine navigation instruments, prior to joining UPS. •A Certified Public Accountant. •Previously served on the Board of Directors of the Federal Reserve Bank of Atlanta 2003-2009, serving as Chairman in 2009. | ||||||||||||||||||||
D. SCOTT DAVIS Retired Chairman and Chief Executive Officer, United Parcel Service, Inc. Years of Service: 16 Age: 70 Lead Director Committees: •Audit •Corporate Governance and Responsibility (ex officio) •Management Development and Compensation (ex officio) | ||||||||||||||||||||
Other Current Public Company Boards: •Johnson & Johnson | Past Public Company Boards: •United Parcel Service, Inc. •EndoChoice Holdings, Inc. | |||||||||||||||||||
•Significant expertise in management, strategy, finance, and operations gained over 25 years at UPS, including through senior leadership roles. •Financial management expertise, including financial reporting, accounting, and controls. •Strong banking experience and a deep understanding of public policy and global economic indicators. •Extensive experience in the global transportation and logistics services industry. •In-depth understanding of technology and software solutions that support automated and web-based shipping, tracking, and specialized transportation logistics. | ||||||||||||||||||||
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Background •President and Chief Executive Officer of the Greater Toronto Airports Authority since April 2020. •Served as Chief Executive Officer of Los Angeles World Airports (LAWA) from June 2015 to March 2020, and had previously held roles of increasing responsibility at the Port of Oakland for 23 years. •Currently serves as a director on the Airport Council International World Board and is the Board Chair of the World Standing Safety and Technical Committee. •Previously served on President Obama’s Advisory Committee on Aviation Consumer Protection and as the Chair of the Oversight Committee of the Transportation Research Board’s Airport Cooperative Research Program. •Co-chaired the Blue Ribbon Task Force on UAS Mitigation at Airports and served as a federal appointee to the U.S. Department of Transportation’s Drone Advisory Committee. •Previously served on the Board of Directors of the Los Angeles Branch of the Federal Reserve Bank of San Francisco. | ||||||||||||||||||||
DEBORAH FLINT President and Chief Executive Officer, Greater Toronto Airports Authority Years of Service: 2 Age: 54 Committees: •Corporate Governance and Responsibility | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •None | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Broad understanding of transportation networks and cybersecurity risk management. •Deep experience in critical infrastructure, connected buildings, and advanced security solutions. •Oversaw the fourth busiest passenger airport in the world, the largest airport police force in the United States, and the largest public works agreements in the history of Los Angeles. •Significant insight and experience in public and private partnerships. | ||||||||||||||||||||
Notice and Proxy Statement | 2022 | | 23 | |||||||||
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Background •President, Chief Executive Officer and board member of Cornerstone Building Brands, a leading manufacturer of exterior building products in North America, since September 2021. •Served as President of the DuPont Water & Protection business, focusing on improving sustainability through the company’s water, shelter, and safety solutions, through August 2021. •Joined DuPont in 2015 as Global Business Director, DuPont™Kevlar® and Aramid Intermediates, assumed the role of President, DuPont Protection Solutions in 2016, and was named President, Safety & Construction in 2017. •Previously spent 15 years with Saint-Gobain in a number of general management, strategic planning, and information technology roles, serving construction, transportation, energy, and defense sectors. •Held various engineering and management positions at Pratt & Whitney, a Raytheon Technologies company, andwas a senior consultant at Booz Allen Hamilton in New York City. •Previously served as a member of the Economic Advisory Council for the Federal Reserve Bank of Philadelphia and is a member of the Forum of Executive Women. | ||||||||||||||||||||
ROSE LEE President and Chief Executive Officer Cornerstone Building Brands Years of Service: 0 Age: 56 Committees: •Management Development and Compensation (effective April 25, 2022) | ||||||||||||||||||||
Other Current Public Company Boards: •Cornerstone Building Brands | Past Public Company Boards: •Crown Holdings Inc. | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Extensive ESG experience, including a focus on improving sustainability through water, shelter and safety solutions and spearheading initiatives that have advanced minorities, women, and veterans. •Deep understanding of construction, transportation, energy, and defense sectors. •Significant knowledge of aerospace and mechanical engineering, and experience working on projects ranging from implementing lean manufacturing to designing a 3-D turbine for aircraft jet engines. •Unique blend of leadership skills and deep knowledge of operations and technology, cybersecurity risk management, and strategic planning. | ||||||||||||||||||||
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Background •Served as Vice President, Global Quality of General Motors (GM), a company that designs, manufactures and markets cars, crossovers, trucks, and automobile parts worldwide, from November 2014 to March 2016. •Served in multiple leadership roles at GM, including Vice President, Global Purchasing and Supply Chain from December 2012 to November 2014, GM Brazil President and Managing Director from June 2011 until December 2012, GM Mexico President and Managing Director from January 2009 until June 2011, and Vehicle Chief Engineer from October 2004 to January 2009. •Joined GM in 1978 as a co-op student at the General Motors Assembly Division in Los Angeles and held a variety of leadership positions at GM in engineering, product development, and manufacturing. | ||||||||||||||||||||
GRACE D. LIEBLEIN Former Vice President-Global Quality, General Motors Corporation Years of Service: 9 Age: 61 Committees: •Management Development and Compensation (Chair) •Corporate Governance and Responsibility | ||||||||||||||||||||
Other Current Public Company Boards: •Southwest Airlines Co. •American Tower Corporation | Past Public Company Boards: •None | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Wide-ranging management and operating experience gained through various executive positions during an extensive career at GM. •Significant expertise in supply chain management, global manufacturing, engineering, technology, and product design and development. •International business, operations, and finance experience gained through senior leadership positions in Brazil and Mexico. | ||||||||||||||||||||
| 24 | | Notice and Proxy Statement | 2022 | ||||||
 | Background •Served as Chairman of the Board of Express Scripts Holding Company (Express Scripts), a pharmacy benefit management company, from May 2006 until its acquisition by Cigna in December 2018, as Chief Executive Officer from April 2005 to May 2016, and as President from October 2003 to February 2014. •First became a director of Express Scripts in January 2004. •Joined Express Scripts as Senior Vice President and Chief Financial Officer in January 1998 and continued to serve as its Chief Financial Officer following his election as President until April 2004. •A Certified Public Accountant. •Previously served on the Board of Directors of the Federal Reserve Bank of St. Louis, Missouri. | |||||||||||||||||||
GEORGE PAZ Retired Chairman and Chief Executive Officer, Express Scripts Holding Company Years of Service: 13 Age: 66 Committees: •Audit (Chair) •Corporate Governance and Responsibility •Management Development and Compensation (effective April 25, 2022) | ||||||||||||||||||||
Other Current Public Company Boards: •Prudential Financial, Inc. | Past Public Company Boards: •Express Scripts Holding Company | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Significant management and finance experience gained through senior leadership positions at Express Scripts. •Financial expertise, including in tax, financial reporting, accounting, and controls. •Information technology, data privacy, and cyber expertise in the healthcare and pharmaceutical industries and a strong track record of developing automated solutions in the healthcare marketplace. •Developed technologies for adjudication, compliance, prior authorization, and safety standards in healthcare. •Extensive experience in corporate finance, insurance and risk management, mergers and acquisitions, capital markets, government regulation, and employee health benefits. | ||||||||||||||||||||
 | Background •Served as Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc. (Gilead), a research-based biopharmaceutical company, from May 2008 through October 2019. In that role, she oversaw Gilead’s Global Finance, Investor Relations, and Information Technology organizations. •Served as Chief Financial Officer of Hyperion Solutions, an enterprise software company that was acquired by Oracle Corporation in March 2007, from 2006 through 2007. •Previously spent nearly 10 years at PeopleSoft, a provider of enterprise application software, where she served in a number of executive positions, including Senior Vice President and Corporate Controller. •A Certified Public Accountant. | |||||||||||||||||||
ROBIN L. WASHINGTON Former Executive Vice President and Chief Financial Officer, Gilead Sciences, Inc. Years of Service: 9 Age: 59 Committees: •Audit | ||||||||||||||||||||
Other Current Public Company Boards: •Alphabet Inc. •Salesforce.com Inc. •Vertiv Group Corp. | Past Public Company Boards: •Tektronix, Inc. •MIPS Technologies, Inc. | |||||||||||||||||||
| Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Extensive management, operational, cyber, and accounting experience in the healthcare and information technology industries. •Financial expertise, including in tax, financial reporting, accounting and controls, corporate finance, mergers and acquisitions, and capital markets. •Broad experience on corporate governance issues gained through public company directorships. | ||||||||||||||||||||
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| 2019 | •Adopted executive approval requirements to increase oversight of trade association memberships | |||||
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•ESG reporting in-line with SASB and TCFD •Proactive refreshment of Board composition and leadership •Established a bi-partisan Political Contributions Advisory Board to ensure alignment of HIPAC political contributions with company values | |||||
| 2021 | •Adopted requirement to interview diverse candidates prior to selecting new directors •Assigned responsibility for oversight of overall ESG performance, strategy, and •ESG considerations integrated into enterprise risk management framework •Appointed Chief Sustainability Officer, Chief Inclusion and Diversity Officer, and General Counsel for ESG | ||||
| 2022 | •ESG added to Board Skill Set Matrix as a new strategic skill •Political Contributions Advisory Board mandate expanded to include review of •Commitment to publicly disclose the Company's EEO-1 Report annually | ||||
| Comprehensive Governance and | ||
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Our shareowner and investor outreach and engagement take many forms. We participate in numerous investor conferences and analyst meetings, hold our own investor events, some of which focus on individual businesses held at our facilities, and meetone-on-one with our shareowners in a variety of contexts and forums. As part of our governance-focused shareowner engagement program, members of our Board, including our Lead Director, participate in many of these meetings to discuss a range of Environmental, Social, and Governance (ESG) matters, including executive compensation, corporate governance, and sustainability. In addition, our Chairman and Chief Executive Officer, Chief Financial Officer, Vice President of Investor Relations, and other senior management engage with our shareowners on a frequent basis, year-round, to discuss Honeywell’s strategy and our financial and business performance and to provide updates on key developments.
Shareowner engagement during 2019 was robust. We held 29one-on-one meetings with shareowners during the course of 2019 (representing approximately 33% of outstanding shares) to discuss a wide range of business performance, governance, sustainability, and compensation topics. In addition, our Chairman and Chief Executive Officer, Chief Financial Officer, and other executive officers hosted 55one-on-one or small group shareowner meetings to discuss business performance, strategy,end-markets, and overall competitive landscape while seeking shareowner feedback.
I GOVERNANCE-FOCUSED SHAREOWNER ENGAGEMENT PROGRAM
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SHAREOWNER ENGAGEMENT IN 2021 Shareowner engagement during 2021 was robust. The Company’s shareowner and investor outreach and engagement take many forms: | ||||||||
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| As part of Honeywell’s governance-focused shareowner engagement program, members of the Board, including the Lead Director, CGRC Chair, or the MDCC Chair, participate in many of these meetings to discuss a range of environmental, social, and governance (ESG) matters, including executive compensation, corporate governance, and sustainability. | In addition, the Company’s Chairman and Chief Executive Officer, Chief Financial Officer, and other executive officers hosted >100 one-on-one or small group shareowner meetings to discuss business performance, strategy, end-markets, and overall competitive landscape while seeking shareowner feedback. | ||||||
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one-on-one meetingswith shareowners to discuss ESG matters, representing29%of outstanding shares | |||||||||||
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one-on-one shareowner meetings hosted by our Lead Director or MDCC Chairto discuss ESG matters, representing 20%of outstanding shares | |||||||||||
Notice and Proxy Statement | 2022 | | 27 | |||||||||
2021 SHAREOWNER ENGAGEMENT FOCUS AREAS In • •Ability to execute on priorities •Honeywell’s performance culture, including its commitment to the fundamental principles of Integrity and importance of the Honeywell Behaviors. •
• •Honeywell’s commitment to governance framework. • •Corporate citizenship through Honeywell Hometown Solutions and our STEM education, inclusion and diversity, and humanitarian relief initiatives. •
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I SHAREOWNER FEEDBACK
Again this year, our shareowners welcomed our level of outreach and expressed appreciation for our engagement and responsiveness to shareowner concerns. Below is a summary of the feedback we received:
Focus on Board composition, refreshment and recruitment, with continued appreciation for the diversity of personal background, skills, and experiences of Honeywell’s directors and our emphasis on the importance of maintaining alignment of director skillsets with long-term strategy.
Positive feedback on our 2019 financial performance, especially with regard to organic sales growth, segment margin expansion, our strong adjusted free cash flow conversion, and our ongoing commitment to capital deployment with a disciplined approach to M&A.
Interest in Honeywell’s decision to sign the Business Roundtable Statement of Corporate Purpose.
Appreciation for our level of engagement and transparency with shareowners over a range of topics.
Emphasis on understanding human capital risk and the Company’s performance culture, including how we foster and measure commitment to our three foundational principles — Integrity and Ethics, Inclusion and Diversity, and Workplace Respect.
Continued feedback from our largest shareowners that our lobbying activities, membership in trade associations, and level of disclosure regarding political contributions is not a source of concern.
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SHAREOWNER FEEDBACK Honeywell’s shareowners welcomed the Company’s level of outreach and expressed appreciation for engagement and responsiveness to shareowner concerns. Below is a summary of the feedback received: •ESG. Continued interest in ESG initiatives and the Board's role in ESG strategy and oversight. •Inclusion & Diversity. Praise for Honeywell programs and processes (especially our diversity of slate requirement). •COVID-19 Impact. High marks received for our continued innovation during the COVID-19 pandemic and for our continued support of employees and communities. Shareowners viewed the pandemic-related compensation actions as appropriate under the circumstances, with recognition that that adverse pandemic-related impacts on incentive plans was not unique to Honeywell and that thoughtful recalibrations were appropriate in industries hardest hit by the pandemic. | ||||||
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I
Our
In reaching its decision to recombine the roles of Chairman and CEO under Mr. Adamczyk, the Board considered a wide range of factors as follows:
The benefits of a unified leadership structure during a period when Honeywell is in the process of a major portfolio realignment and a strategic shift designed to focus resources and management’s attention on high-growth businesses in six attractive industrial end markets where we can deploy our core technological strengths related to software, data analytics, and the Industrial Internet of Things.
An evaluation of the strength of Mr. Adamczyk’s character, the quality of his leadership, and the likelihood that Mr. Adamczyk’s service as both Chairman and CEO would enhance Company performance; the Board continues to believe that an independent Chairman would not enhance Company performance or improve governance effectiveness under Mr. Adamczyk’s leadership.
| 28 | | Notice and Proxy Statement | 2022 | ||||||
Our longstanding track record of outperformance under a unified leadership structure in which the roles of Chairman and CEO were combined.
The highly independent nature of our Board where there is only onenon-independent director.
In reaching its decision to recombine the roles of Chairman and CEO under Mr. Adamczyk, the Board considered a wide range of factors as follows: •The benefits of a unified leadership structure during a period when Honeywell was in the process of a major portfolio realignment and a strategic shift designed to focus resources and management’s attention on high-growth businesses in six attractive industrial end markets where the Company can deploy its core technological strengths related to software, data analytics, and the Industrial Internet of Things. •An evaluation of the strength of Mr. Adamczyk’s character, the quality of his leadership, and the likelihood that Mr. Adamczyk’s service as both Chairman and CEO would enhance Company performance; the Board continues to believe that an independent Chairman would not enhance Company performance or improve governance effectiveness under Mr. Adamczyk’s leadership. •Honeywell’s longstanding track record of outperformance under a unified leadership structure in which the roles of Chairman and CEO were combined. •The highly independent nature of the Board where there is only one non-independent director. •Steps taken by Honeywell’s Board to strengthen the role of the independent Lead Director. | ||
Steps taken by Honeywell’s Board to strengthen the role of the independent Lead Director.
The Board carefully weighed the views of its shareowners as part of itsthe deliberations leading up to its decision to combine the roles and has continued to engage with shareowners on this topic during spring and summer/fall shareowner engagement meetings thereafter. We haveThe Company has continued to hear a range of views during those meetings, with most of our shareowners expressing confidence that the Honeywell Board understands the importance of good corporate governance and has the ability to make the right decisions regarding its ongoing leadership structure, specifically the determination of whether and when to separate and combine the roles of Chairman and CEO.
I
The roles and responsibilities of the Lead Director are described in our Corporate Governance Guidelines, which the Board further amended to formalize the equivalency of independent Lead Director and independent Chairman roles and responsibilities. The guidelines explicitly acknowledge that, in the absence of an independent Chairman, the Lead Director would assume the same roles and responsibilities, including:
As and when the Board considers adding new members, work with the CEO, the CGRC and the full Board to help identify and prioritize the specific skill sets, experience, and knowledge that candidates for election to the Board must possess.
Review, and when appropriate, make changes to Board meeting agendas and Board meeting schedules to ensure there is sufficient time for discussion of all agenda items.
Review, and when appropriate, make changes to presentation material and other written information provided to directors for Board meetings.
Preside at all Board meetings at which the Chairman is not present, including executive sessions of the independent directors, and apprise the Chairman of the issues considered.
Serve as liaison between the Chairman and the independent directors.
Be available for consultation and direct communication with the Company’s shareowners.
Call meetings of the independent directors when necessary and appropriate.
Retain outside professionals on behalf of the Board.
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Consult with management about what information is to be sent to the Board.
Identify key strategic direction and operational issues upon which the Board’s annual core agenda is based.
The roles and responsibilities of the Lead Director are described in the Company’s Corporate Governance Guidelines, which explicitly acknowledge that, in the absence of an independent Chairman, the Lead Director would assume the same roles and responsibilities, including: • | As and when the Board considers adding new members, work with the CEO, the CGRC and the full Board to help identify and prioritize the specific skill sets, experience, and knowledge that candidates for election to the Board must possess. •Review, and when appropriate, make changes to Board meeting agendas and Board meeting schedules to ensure there is sufficient time for discussion of all agenda items. •Review, and when appropriate, make changes to presentation material and other written information provided to directors for Board meetings. •Preside at all Board meetings at which the Chairman is not present, including executive sessions of the independent directors, and apprise the Chairman of the issues considered. •Serve as liaison between the Chairman and the independent directors. •Be available for consultation and direct communication with the Company’s shareowners. •Call meetings of the independent directors when necessary and appropriate. •Retain outside professionals on behalf of the Board. •Consult with management about what information is to be sent to the Board. •Identify key strategic direction and operational issues upon which the Board’s annual core agenda is based. •Serve as anex officiomember of each committee on which he or she does not otherwise serve. | |||
I SELECTION OF D. SCOTT DAVIS AS LEAD DIRECTOR
The Mr. D. Scott Davis’ first two-year term of our current Lead Director, Mr. Jaime Chico Pardo, will end effective as of our 2020Honeywell’s 2022 Annual Meeting of Shareowners when he will also retire from the Board.Shareowners. Our independent directors have unanimously elected Mr. D. Scott
Notice and Proxy Statement | 2022 | | 29 | |||||||||
| Lead Director Selection Criteria | Mr. Davis’ Qualifications | |||||
Commitment Able to commit the time and level of engagement required to fulfill the substantial responsibilities of the role |
Mr. Davis has excelled as | |||||
Effective Communication Able to facilitate discussions among Board members, including between thenon-management directors and the CEO/Chairman, and engage with shareowners and key stakeholders |
As MDCC Chair, Mr. Davis demonstrated effective communication and engagement with directors and management while leading a large-scale transformation of Honeywell’s executive compensation program
Mr. Davis | |||||
Rapport Strong rapport with other members of the Board |
Mr. Davis is extremely well-regarded by his fellow Board members. As | |||||
Integrity High personal integrity and ethical character |
Mr. Davis has conducted himself in accordance with the highest ethical standards throughout his career and as a Honeywell Board member
As former MDCC Chair and Lead Director, he has been a key enabler of a culture of integrity and ethics at Honeywell by ensuring the appropriate tone at the top | |||||
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Skill Set Skills and experience broadly in line with Honeywell’s corporate strategy |
Mr. Davis’ skills and experiences are well-aligned with the strategic skills and core competencies that are critical for Honeywell Board members
He has led global organizations in transportation and logistics services industries aligned with Honeywell’s strategicend-markets and where innovation is a critical enabler | |||||
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I Members of the Audit Committee and MDCC currently meet and, during the year ended December 31, 2021 met, the additional independence requirements of Nasdaq applicable to audit committee and compensation committee members.
•Nonon-employee director or nominee receives any direct compensation from Honeywell other than under the director compensation program described in this Proxy Statement.
•No immediate family member (within the meaning of the NYSENasdaq listing standards) of anynon-employee director or nominee receives direct compensation from Honeywell other than compensation received for service as a non-executive employee.
| 30 | | Notice and Proxy Statement | 2022 | ||||||
Nonon-employee director or nominee is affiliated with Honeywell or any of its subsidiaries or affiliates.
•Nonon-employee director or nominee is an employee of Honeywell’s independent accountants, and nonon-employee director or nominee (or any of their respective immediate family members) is a current partner of Honeywell’s independent accountants, or was within the last three years, a partner or employee of Honeywell’s independent accountants and personally worked on Honeywell’s audit.
•Nonon-employee director or nominee is a member, partner, or principal of any law firm, accounting firm, or investment banking firm that receives any consulting, advisory, or other fees from Honeywell.
•No non-employee director or nominee has an immediate family member who is, or was during the past three years, an executive officer of Honeywell.
•Nonon-employee director or nominee (or any of their respective immediate family members) is indebted to Honeywell, nor is Honeywell indebted to anynon-employee director or nominee (or any of their respective immediate family members).
•Nonon-employee director or nominee is an executive officer of a charitable or othertax-exempt organization that received contributions from Honeywell outside our director charitable match program.
•Honeywell has commercial relationships (purchase and/or sale of products and services) with companies at which our directors serve or have served as officers within the past three years (Mr. Angove—Infor, Ms. Flint—(Ms. Flint — Greater Toronto Airports Authority and Los Angeles World Airports, Mr. Paz—Express Scripts,Ms. Lee — Cornerstone Building Brands and Dupont de Nemours, and Ms. Washington—Washington — Gilead Sciences). In each case:
•The relevant products and services were provided on terms and conditions determined on an arm’s-length basis and consistent with those provided by or to similarly situated customers and suppliers; •The relevant director did not initiate or negotiate the relevant transaction, each of which was in the ordinary course of business of both companies; and •The combined amount of such purchases and sales was less than 0.1939% of the consolidated gross sales of each of Honeywell and the other company in each of the last three completed fiscal years. This level is significantly below the requirements of the Nasdaq listing standards for director independence, which use a 5% of consolidated gross revenues threshold and applies it to each of purchases and sales rather than the combination of the two. • |
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While anon-employee director’s or nominee’s service as an outside director of another company with which Honeywell does business would generally not be expected to raise independence issues, the Board also considered those relationships and confirmed the absence of any material commercial relationships with any such company. Specifically, those commercial relationships were in the ordinary course of business for Honeywell and the other companies involved and were on terms and conditions available to similarly situated customers and suppliers.
The above information was derived from Honeywell’s books and records and responses to questionnaires completed by the director nomineesdirectors in connection with the preparation of this Proxy Statement.
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BOARD’S ROLE IN RISK OVERSIGHT
While senior management has primary responsibility for managing risk, the Board has responsibility for risk oversight with specific risk areas delegated to relevant Board committees who report on their deliberations to the Board. The specific risk areas of focus for the Board and each of its committees are summarized below.
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I ENTERPRISE RISK MANAGEMENT PROGRAM
The Board uses the ERM program as a key tool for understanding the inherent risks facing Honeywell as well as assessing whether management’s processes, procedures, and practices for mitigating those risks are effective. The ERM assessment deployed by management is robust, based on an enterprise-wide “top down” and “bottom up” view of commercial, strategic, legal, compliance, human capital, cyber, and reputational risks and strategies for mitigating those risks. In 2019, the ERM program included interviews with each member of the leadership team, 72 interview workshops, with 98 risk owners and risk experts, to cover 49 risk areas across all businesses and functions.
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Both the Audit Committee and the full Board review the results of the annual ERM assessment. During the reviews, Honeywell’s CFO and General Counsel jointly present the results of the ERM assessment in a manner designed to provide full visibility into the risks facing Honeywell and how management is mitigating those risks, thereby enabling the Board to effectively exercise its oversight function. To facilitate continued monitoring and oversight by the Board, key risk areas identified during the ERM process and management’s associated mitigation activities become part of Board and/or committee meeting agendas for the following year.
Every three years, the ERM process includesone-on-one meetings with each Board member to discuss each director’s “top down” view of risks facing the enterprise, to solicit the director’s recommendations for improving the ERM process, and to ensure that the universe of risks and the metrics for identifying key risks, in terms of likelihood of occurrence and potential financial impact, is both realistic and appropriate. Feedback from theone-on-one interviews with the individual Board members is presented to the full Board and incorporated in our ERM program and risk mitigation efforts.
I OVERSIGHT OF STRATEGY
One of the Board’s primary responsibilities is overseeing management’s establishment and execution of the Company’s strategy and the associated risks. The full Board oversees strategy and strategic risk through robust and constructive engagement with management, taking into consideration our key priorities, global trends impacting our business, regulatory developments, and disruptors in our industries. The Board’s oversight of our strategy primarily occurs through deep-dive annual reviews of the long-term strategic plans and annual operating plans of each of our businesses. During these reviews, management provides the Board with its view of the key commercial and strategic risks faced by each business unit, and the Board provides management with robust feedback on whether management has identified the key risks and is taking appropriate actions to mitigate risk. In addition to the review of each business’ strategic and annual plans, specific areas of risk and opportunity are tabled for further Board and/or committee discussion as specific risks arise or as requested by management or individual Board members to ensure additional Board engagement on the areas of risk that are most impactful to Honeywell’s strategic direction.
The Board’s oversight of strategy is prominent in the Company’s mergers, acquisitions, and divestitures activity. From strategy and vision to pipeline reviews, individual transaction approval, deal execution and integration, the Board is engaged in all aspects of our mergers, acquisitions, divestitures, and other corporate development activities. With the ultimate goal of achieving outcomes that promote long-term shareowner value, the Board annually engages in a rigorous, thorough, and unbiased review of our portfolio and devotes a substantial amount of time at each Board meeting to pressure test potential transactions, review deal execution, monitor integration, and assess long-term outcomes.
I OVERSIGHT OF HUMAN CAPITAL AND CULTURE
The Board and the MDCC provide oversight over human capital, with particular focus on culture, talent development and assessment, and succession planning. Honeywell fosters a performance culture where all directors, officers, and employees are expected to uphold our foundational principles of Integrity and Ethics, Inclusion and Diversity, and Workplace Respect; where employees can build meaningful careers based on our 9 Behaviors: Have a Passion for Winning, Be A Zealot for Growth, Think Big…Then Make It Happen, Act With Urgency, Be Courageous, Go Beyond, Inspire Greatness, Be Committed, and Become Your Best. The strength of our culture is essential to fulfilling our strategic vision, and the Board and the MDCC work with management to monitor compliance with the foundational principles and measure progress against the 9 Behaviors.
The Board also is closely engaged in the development and management of human capital. The Board’s involvement in leadership development and succession planning is systematic and ongoing, and the Board provides input on important decisions in each of these areas. The Board has primary responsibility for succession planning for the CEO and oversight over succession planning for other executive officer positions. Annually, the full Board reviews the leadership succession plan for the CEO and his direct reports, which includes identification of ‘ready now’ successors, management’s view of potential successors that are not “ready now” but will be within a reasonable timeframe, and development actions necessary to address any gaps in the leadership succession plan. Also discussed are recent and future potential changes involving various leaders and their organizations. In addition, the Board meets regularly with high-potential executives, both in small group andone-on-one settings.
BOARD PRACTICES AND PROCEDURES
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Agenda.•Agenda. The Board and its committees perform an annual review of the agenda items to be considered for each meeting. During that review and throughout the year, each Board and committee member is free to raise topics that are not on the agenda andencouraged to suggest items for inclusion on future agendas.
•Number of Meetings and Attendance.In 2019,2021, the Board held six meetings, and the committees of the Board collectively held 19 meetings. The Board had 100%98% meeting attendance, and the directors’ average attendance rate at meetings of the committees of which they are members was 95%. Each of the directors participated in at least 75% of the aggregate of the total number of Board meetings held during the period for which he or she was a director and the total number of meetings held by all Board committees on which they have
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Special Meetings.The Chairman, the CEO, the Lead Director, the CGRC Chair, and at the request of two independent directors, the Corporate Secretary, are permanently empowered and authorized to call special meetings of the Board at any time and for any reason.
•Board Meeting Materials.Each director is providedreceives in advance withthe written material to be considered at every meeting of the Board and of the committees on which he or she is a member and has the opportunity tocan provide comments and suggestions.
I31 Objective.DEVELOP EVALUATION FORM ■ LAUNCH EVALUATION ■ REVIEW FEEDBACK ■ RESPOND TO INPUT ■ eachevaluating director candidates and for recommending re-nomination of its committees conduct a comprehensive evaluation of their effectiveness throughout the year. Committee members have the opportunity to provide input directly to the Lead Director, committee chairs, or to management. A more formal self-evaluation is launched in January of each year and the feedback gleaned from the evaluation is utilized to facilitate and enable Board refreshment and an appropriate evolution of Board skills, experiences, and perspectives specifically with a view toward eliciting feedback on whether our directors’ skills are matched to Honeywell’s strategic needs and its risk profile.
Process.The Lead Director, togetherincumbent directors resides with the CGRC, Chair, are jointly responsiblewhich consists entirely of independent directors under applicable SEC rules and Nasdaq listing standards. Honeywell’s independent Lead Director is formally charged with responsibility for leadingnew director recruitment, including the self-evaluation process which includesresponsibility of working with the developmentChairman and approval of the evaluation by theCEO, CGRC, its administration through a third party, summarization of the results, and its report out to the full Board to help identify and prioritize the specific skill sets, experience, and knowledge that director candidates must possess.
•Annual Shareowner Meeting ASSESS ■ IDENTIFY ■ EVALUATE ■ RECOMMEND ■ I32 Attendance.OurAttendance. Honeywell’s Corporate Governance Guidelines encourage all directors to attend our Annual Meeting of Shareowners. Generally, Board and committee meetings are held immediately preceding and following the Annual Meeting, with directors attending the Annual Meeting. All of ourits directors attended last year’s virtual Annual Meeting.
•Engagement with Management.Management. The Board and its committees provide feedback to management, and management is required to answer questions raised by the directors during Board and committee meetings. Our senior management meets regularly with the Board, including yearly reviews of each business’ long-term strategic plan and annual operating plan.
•Director Education.OurEducation. Honeywell’s Board believes that director education is vital to the ability of directors to fulfill their roles and supports Board members in their continuous learning. Directors may enroll in continuing education programs at Honeywell’s expense on corporate governance and critical issues associated with a director’s service on a public company board. OurThe Board also hears regularly from management on numerous subjects, including investor sentiments, shareowner activism, regulatory developments, data privacy, and cybersecurity. In addition, the Board periodically participates in site visits to Honeywell’s facilities. For example, in 2019,2020, Board members visited Honeywell’s AerospaceSafety and Productivity Solutions facility in Deer Valley, Arizona, and participated in anCharleston, South Carolina.
Director Orientation.Orientation. All new directors participate in ourthe Company’s director orientation program during the first year on ourthe Board. New directors receive an extensive suite of onboarding materials covering director responsibilities, corporate governance practices and policies, business strategies, leadership structure, and long-term plans. They then participate in a series of meetings over time with management representatives from all businesses and functional areas to review and discuss information about Honeywell’s strategic plans, financial statements, and key issues, policies, and practices. Based on feedback from our directors, we believe this graduated onboarding approach over the first year of Board service, coupled with participationParticipation in regular Board and committee meetings also provides new directors with a strong foundation for understanding ourHoneywell’s businesses, connects directors with members of management with whom they will interact, and accelerates their effectiveness to engage fully in Board deliberations. Directors have access to additional orientation and educational opportunities upon acceptance of new or additional responsibilities on the Board or its committees.
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Committee Chair: George Paz† Other Committee Members (effective April 25, 2022)* Kevin Burke D. Scott Davis† Robin L. Washington† † Audit Committee Financial Expert Meetings Held in 2021: 10 •All members independent •Has oversight over our independent accountant •Separately designated standing audit committee established in accordance with Section 3(a)(58) (A) of the Exchange Act | •Consider the independence of, appoint •Review the scope and results of the audit with the independent accountants. •Review with management and the independent accountants, prior to filing, the annual and interim financial results (including Management’s Discussion and Analysis) to be included in Forms10-K and10-Q. •Consider the adequacy and effectiveness of our internal control over financial reporting and auditing procedures. •Review, approve, and establish procedures for the receipt, retention and treatment of complaints received by Honeywell regarding accounting, internal control over financial reporting, or auditing matters and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. •Monitor and provide risk oversight with respect to focus areas assigned to the committee from time to time by the Board. •Together with the full Board, exercise oversight over •Oversee performance of the | ||||
Audit committee oversight of independent accountants
The Audit Committee seeks to ensure the exercise of appropriate professional skepticism by the independent accountants by reviewing and discussing, among other things, management and auditor reports regarding significant estimates and judgments and the results of peer quality review and Public Company Accounting Oversight Board inspections of the independent accountants. The Audit Committee also reviews andpre-approves all audit andnon-audit services provided to Honeywell by the independent accountants to determine that such services would not adversely impact auditor independence and objectivity. The Audit Committee also holds separate executive sessions at eachin-person meeting with representatives of our independent accountants and with Honeywell’s Chief Financial Officer and Vice President of Corporate Audit.
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Committee Chair: William S. Ayer* Other Committee Members (effective April 25, 2022)* D. Scott Davis (ex officio) Deborah Flint Grace D. Lieblein George Paz Meetings Held in 2021: 3 •All members independent •Also serves as the nominating committee | •Identify and evaluate potential director candidates and recommend to the Board the nominees for election to the Board. •Review and make a recommendation to the Board regarding whether to accept a resignation tendered by a Board nominee who does not receive a majority of votes cast for his or her election in an uncontested election of directors. •Review •Together with the Lead Director, lead the Board in its annual evaluation of the performance of the Board and its committees. •Review policies and make recommendations to the Board concerning the size and composition of the Board, qualifications and criteria for director nominees, director retirement policies, compensation and benefits ofnon-employee directors, conduct of business between Honeywell and any person or entity affiliated with a director, and the structure and composition of Board committees, and the allocation of risk oversight responsibilities among Board committees. •Oversee overall ESG performance and associated risks and opportunities. •Monitor and provide risk oversight with respect to focus areas assigned to the committee from time to time by the Board, including political contributions and lobbying, regulatory compliance matters such as data privacy, integrity and ethics, geopolitical risk, and health, safety, environmental, product stewardship and sustainability. •Review Honeywell’s policies and programs | ||||
Evaluation and Nomination of Director Candidates
Primary responsibility for identifying and evaluating director candidates and for recommendingre-nomination of incumbent directors resides with the CGRC, which consists entirely of independent directors under applicable SEC rules and NYSE listing standards. Our independent Lead Director also is formally charged with responsibility for new director recruitment, including the responsibility of working with the Chairman and CEO, CGRC, and the full Board to help identify and prioritize the specific skill sets, experience, and knowledge that director candidates must possess. The CGRC and Lead Director then establish criteria for director nominees based on these inputs.
Nomination of New Candidates.Potential director candidates meeting the criteria established by the CGRC and Lead Director are then identified either by reputation, existing Board members, or shareowners. The CGRC is also authorized, at the expense of Honeywell, to retain search firms to identify potential director candidates, as well as other external advisors, including for purposes of performing background reviews of potential candidates. Search firms retained by the CGRC shall be provided guidance as to the particular experience, skills, or other characteristics that the Board is then seeking. The CGRC may delegate responsibility forday-to-day management and oversight of a search firm engagement to the Chairman of the Board and/or the Senior Vice President, Human Resources, Security and Communications.
Candidates are interviewed multiple times by the Chairman and CEO, Lead Director, other members of the Board, and certain executive officers to ensure that candidates not only possess the requisite skills and characteristics, but also the personality, leadership traits, work ethic, and independence of thought to effectively contribute as a member of the Board. After this process, the Board nominates the successful candidate for election to the Board at the Annual Meeting of Shareowners. Director candidates are principally identified and evaluated in anticipation of upcoming director elections and other potential or expected Board vacancies. From time to time, the Board fills vacancies in its membership, which arise between annual meetings of shareowners using the same process described above.
In 2019 and 2020, the CGRC nominated, and the Board subsequently elected, Ms. Deborah Flint to serve as a director, effective October 7, 2019, and Gen. Raymond T. Odierno to serve as a director, effective February 28, 2020. Ms. Flint and Gen. Odierno were identified by a third-party search firm and had not previously stood for election to the Board at an annual meeting of shareowners.
Re-nomination of Incumbents.To ensure that the Board continues to evolve and be refreshed in a manner that serves the changing business and strategic needs of Honeywell, before recommending forre-nomination a slate of incumbent directors for an additional term, the CGRC also evaluates whether incumbent directors possess the requisite skills and perspective, both individually and collectively. This evaluation is based primarily on the results of the annual review it performs with the Board of the requisite skills and characteristics of Board members, as well as the composition of the Board as a whole, and the results of the Board’s annual self-evaluation.
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Other Committee Members (effective April 25, 2022)* Duncan B. Angove William S. Ayer D. Scott Davis (ex officio) Rose Lee George Paz Meetings Held in 2021: |
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| •All members independent •Administers Honeywell’s executive compensation program •Retains independent compensation consultant | •Evaluate and approve executive compensation plans, policies, and programs, including review and approval of executive compensation-related corporate goals and objectives. •
•Evaluate the CEO’s performance relative to established goals and objectives and, together with the other independent directors, determine and approve the CEO’s compensation level. •Review and determine the annual salary and other remuneration (including incentive compensation and equity-based plans) of all other officers. •Review and discuss with management the Compensation Discussion and Analysis and other executive compensation disclosure included in this Proxy Statement. •Produce the annual Committee Report included in this Proxy Statement. •Form and delegate any of •Review the management development program, including executive succession. •Review or take such other action as may be required in connection with the bonus, stock, and other benefit plans of Honeywell and its subsidiaries. •Monitor and provide risk oversight with respect to focus areas assigned to the committee from time to time by the Board, including succession planning, progress implementing diversity goals and objectives, retention and recruitment of key talent, employment practices and policies, workplace respect and culture, workplace violence, and | |||
Notice and Proxy Statement | 2022 | | 35 | |||||||||
Participation.
During 2021 fiscal year,
Program.
The MDCC administers the
Consultant.
The MDCC has sole authority to retain a compensation consultant to assist the MDCC in the evaluation of CEO, officer and other senior executive compensation, but only after considering all factors relevant to the consultant’s independence from management. In addition, the MDCC is directly responsible for approving the consultant’s compensation, evaluating its performance, and terminating its engagement. Under the MDCC’s established policy, its consultant cannot provide any other services to Honeywell without the MDCC’s approval, as delegated to the MDCC Chair. Since October 2009, the MDCC has retained Pearl Meyer (PM) as its independent compensation consultant.
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The MDCC regularly reviews the services provided by its outside consultants and performs an annual assessment of the independence of its compensation consultant to determine whether the compensation consultant is independent. The MDCC conducted a specific review of its relationship with PM in 20192021 and determined that PM is independent in providing Honeywell with executive compensation consulting and limited other employee benchmarking services, and that PM’s work for the MDCC did not raise any conflicts of interest, consistent with SEC rules and NYSENasdaq listing standards.
•Any other services provided to Honeywell by PM.
•Fees received by PM from Honeywell as a percentage of PM’s total revenue.
•Policies orand procedures maintained by PM to prevent a conflict of interest.
•Any business or personal relationship between the individual PM consultants assigned to the Honeywell relationship and any MDCC member.
•Any business or personal relationship between the individual PM consultants assigned to the Honeywell relationship, or PM itself, and Honeywell’s executive officers.
•Any Honeywell stock owned by PM or the individual PM consultants assigned to the Honeywell relationship.
While the MDCC reviews information provided by PM regarding compensation paid by the Compensation Peer Group, as well as third-party survey data, as a general indicators of relevant market conditions, the MDCC does not target a specific competitive position relative to the market in making its compensation determination.
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FULL BOARD •Integrity, ethics, and compliance with its Code of Business Conduct •General strategic and commercial risks such as new product launch, capital spend, raw material price increases, foreign currency fluctuation, diminished customer demand, technology obsolescence, reductions to government spending, and slowdown in economic growth, including impacts of the COVID-19 pandemic •Disruption, including disruptive technologies, emerging competition, and changing business models •M&A transactions, including execution and integration, and the M&A competitive landscape •Legal risks such as those arising from litigation, environmental, and intellectual property matters | ||
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AUDIT COMMITTEE •Enterprise Risk Management (ERM) and Crisis Incident Management programs •Cybersecurity, including protection of customer and employee data, trade secrets, and other proprietary “crown jewel” information, ensuring the security of data on the cloud, persistent threats, and cyber risks associated with the Company’s own products and facilities •Accounting, controls, and financial disclosure •Tax and liquidity management •Product integrity and product security •Vendor risk, including supply chain disruption •Operational business continuity | CORPORATE GOVERNANCE AND •Political contributions and lobbying •Regulatory compliance, including data privacy, sanctions, export, and government contracts •Integrity and compliance programs and policies •Geopolitical risk, including political, economic or military conflicts, and tariffs •ESG matters, including health, safety, environmental, climate, product stewardship, and sustainability | MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE (MDCC) •Succession planning •Compensation plans, programs, and arrangements and other employment practices and policies •Recruitment and retention of key talent •Labor compliance •Inclusion and diversity •Workplace respect and culture •Workplace violence •Employee engagement and wellness | ||||||||||||||||||||||||||||||
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| ENTERPRISE RISK MANAGEMENT | ||||||||||||||||||||||||||
| ASSESS | ■ | REVIEW | ■ | INCORPORATE | ■ | |||||||||||||||||||||
•The Board uses the ERM program as a key tool for understanding the inherent risks facing Honeywell and assessing whether management’s processes, procedures and practices for mitigating those risks are effective. •The ERM assessment deployed by management is based on an enterprise-wide “top down” and “bottom up” view of commercial, strategic, legal, compliance, human capital, cyber, and reputational risks and strategies for mitigating those risks. •In 2021, the ERM program included interviews with the Chairman and CEO and each member of his leadership team as well as 111 workshop interviews with 89 risk owners and risk experts, covering 49 risk areas across all businesses and functions. •In 2022, ERM-identified risks will drive over 45% of the audits to be conducted under the Internal Audit function’s annual plan. | •Both the Audit Committee and the full Board review the results of the annual ERM assessment. •During the reviews, Honeywell’s CFO and General Counsel jointly present the results of the ERM assessment in a manner designed to provide full visibility into the risks facing Honeywell and how management is mitigating those risks, thereby enabling the Board to effectively exercise its oversight function. •To facilitate continued monitoring and oversight by the Board, key risk areas identified during the ERM process and management’s associated mitigation activities become part of Board and/or committee meeting agendas for the following year. | •Every three years, the ERM process includes one-on-one meetings with each Board member to discuss each director’s “top down” view of risks facing the enterprise, to solicit the director’s recommendations for improving the ERM process, and to ensure that the universe of risks and the metrics for identifying key risks, in terms of likelihood of occurrence and potential financial impact, is both realistic and appropriate. •Feedback from the one-on-one interviews with the individual Board members is presented to the full Board and incorporated in the Company’s ERM program and risk mitigation efforts. | ||||||||||||||||||||||||
Notice and Proxy Statement | 2022 | | 37 | |||||||||
AND SUSTAINABILITY
GOVERNANCE
| SPOTLIGHT ON CYBERSECURITY | ||
Cybersecurity is a critical component of the Company’s enterprise risk management program. The Company has established an information security framework to help safeguard the confidentiality, integrity, and availability of information assets and ensure regulatory, operational, and contractual requirements are fulfilled. The Audit Committee oversees cybersecurity risk and the CGRC oversees data privacy compliance as part of its broader compliance mandate. Together they ensure that the Board has a comprehensive view of the Company's cybersecurity risk profile and framework. The Board receives annual cybersecurity updates from senior management, including the Chief Information and Product Security Officer, and the Audit Committee provides a deeper level of oversight through multiple engagements with senior management, including the Chief Information and Product Security Officer, each year to review the Company’s cybersecurity program, including the highest risk areas and key mitigation strategies. The Company has experienced, and expects to continue to experience, cyber threats and incidents, and the Audit Committee receives quarterly reports on any notable incidents that may have occurred during the quarter. To date, no such incidents have been material to the Company, and expenses incurred (including penalties or settlements, if any) in response to these incidents have been immaterial in any given fiscal year. To view details about our cybersecurity framework, please see our 2021 Corporate Citizenship Report at investor.honeywell.com (see “ESG/ESG Information”). | ||
•The Corporate Governance and Responsibility Committee (CGRC) has primary jurisdiction for managing risks and opportunities associated with E&S, meeting at least once a year with the Corporate Vice President of Health, Safety, Environment, Product Stewardship andChief Sustainability (HSEPS),Officer, the Senior Vice President for Government Relations, the Senior Vice President forand Chief Human Resources Security and Communications,Officer and other leaders with responsibility for E&S to presentreview and discuss various E&S topics.
•Direct Audit Committee and Board engagement with E&S risk areas through a robust and comprehensive Enterprise Risk Management program.
•Direct Board engagement on select E&S topics. In the past 12 months, management has presented to the Board on a variety of E&S initiatives such as employeeinclusion and diversity, sexual harassment compliance, safety, business continuity,resiliency, and environmental matters.
•Feedback from engagement with shareowners. The Board values our shareowners’ perspectives on corporate responsibility and sustainability, and wethe Company (oftentimes with our Lead Director or CGRC Chair) engageengages directly with our shareowners throughout the year to discuss the Company’s activities, goals and achievements in these areas and to hear our shareowners’ views and suggestions so that the feedback can be provided to directors.
| 38 | | Notice and Proxy Statement | 2022 | ||||||
| Oversight of Overall ESG Performance | Board of Directors and CGRC | ||||||||||
| Oversight of Discrete ESG Risk and Opportunities | CGRC •Environmental •Health •Safety •Climate •Remediation •Political Engagement •Governance •Board Diversity and Composition •Integrity and Compliance •Data Privacy | AUDIT COMMITTEE •Tax •Financial Controls •Enterprise Risk •Litigation/Controversies •Raw Materials Sourcing •Product Safety and Integrity •Supply Chain •Cybersecurity | MDCC •Human Capital Management •Inclusion and Diversity •Labor Practices •Culture •Compensation •Workplace Respect •Employee Engagement and Wellness | ||||||||
| Management with Accountability and Regular, Direct Reporting to Responsible Board Committee on ESG Topics | •Chief Sustainability Officer •Corporate Secretary and Chief Compliance Officer •SVP, Global Government Relations •VP and General Counsel, ESG | •SVP, Chief Financial Officer •SVP, Enterprise Transformation •SVP, General Counsel •VP, Corporate Audit •Chief Information and Product Security Officer •VP, Controller •VP, Tax •Chief Supply Chain Officer | •SVP, Chief Human Resources Officer •Chief Diversity Officer | ||||||||
| >90% | ~70% | 6,100 | ||||||
| reduction in Scope 1 and Scope 2 greenhouse gas intensity since 2004 | energy efficiency improvement since 2004 | sustainability projects completed since 2010, saving an annualized $105M | ||||||
| 160 | 0.25 | ~3,000 | ||||||
| million gallons of water saved in water-stressed regions since 2013 from more than 180 projects | total case incident rate (TCIR), a safety record over 4x better than the weighted average TCIR of the industries in which we operate | acres remediated and restored as valuable community assets | ||||||
Notice and Proxy Statement | 2022 | | 39 | |||||||||
10-10-10 Goals by 2024.Honeywell remains on track to: | Carbon Neutrality by 2035.Honeywell has committed to: | |||||||
| Reduce global Scope 1 and Scope 2 greenhouse emissions by an additional 10% per dollar of sales from 2018 levels. Deploy at least 10 renewable energy opportunities. Achieve certification to ISO’s 50001 Energy Management Standard at 10 facilities. | Become carbon neutral in its operations and facilities (Scope 1 and Scope 2) by 2035 through a combination of further investment in energy savings projects, conversion to renewable energy resources, completion of capital improvement projects, and utilization of credible carbon offsets. Address Scope 3 indirect emissions, including emissions in the value chain, by enhancing its existing tracking system, partnering with industry leaders to identify and implement best practices, and encouraging customers to adopt Honeywell’s climate offerings. | |||||||
| SPOTLIGHT ON HEALTH, SAFETY, ENVIRONMENT, PRODUCT STEWARDSHIP AND SUSTAINABILITY (HSEPS) | ||
Honeywell’s HSEPS matters are managed by a global team of more than 800 trained professionals with extensive knowledge and hundreds of years of collective experience in occupational health, chemistry, hydrology, geology, engineering, safety, industrial hygiene, materials management, and energy efficiency. Honeywell’s Chief Sustainability Officer reports to the Company’s Senior Vice President and General Counsel and has overall responsibility for HSEPS programs. A Corporate Energy and Sustainability Team, led by the Chief Sustainability Officer, the Vice President for Global Real Estate and the Senior Director of Sustainability, helps drive the Company’s sustainability goals. Progress on these goals is reported to Honeywell’s CEO on a quarterly basis and is reviewed with the CGRC at least annually.We provide HSEPS disclosure in alignment with the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) frameworks. To view these disclosures and details about our environmental achievements, please see our 2021 Corporate Citizenship Report at investor.honeywell.com (see “ESG/ESG Information”). | ||
| 40 | | Notice and Proxy Statement | 2022 | ||||||
| SPOTLIGHT ON POLITICAL CONTRIBUTIONS ADVISORY BOARD | ||
•In 2020, the Company established a bipartisan Political Contributions Advisory Board (Advisory Board) of leaders representing a cross-section of Honeywell who meet regularly to review proposed HIPAC disbursements to assess alignment with Honeywell's foundational principles — Integrity and Ethics, Inclusion and Diversity, and Workplace Respect. Neither the CEO nor anyone from his staff sits on the Advisory Board. •In 2022, the Company expanded the Advisory Board's mandate to include assessment of alignment to the Company's sustainability goals as well as review of proposed disbursements of HIPAC and corporate funds to trade associations and other organizations. •The Advisory Board meets at the start of each Congress, and at least quarterly thereafter, to determine whether proposed recipients of funding are eligible based on alignment with Honeywell's foundational values and sustainability objectives. •Advisory Board decisions are informed by independent third-party due diligence reports identifying statements or activities that present potential misalignment with the Company's foundational principles or sustainability goals. •Advisory Board decisions are documented and reported quarterly to the HIPAC Board of Directors and to Honeywell's Chairman and CEO. Honeywell's Senior Vice President, Global Government Relations also includes notable Advisory Board decisions in his annual report to the CGRC. | ||
Notice and Proxy Statement | 2022 | | 41 | |||||||||
FOUNDATIONAL PRINCIPLES | INTEGRITY AND ETHICS | INCLUSION AND DIVERSITY | WORKPLACE RESPECT | |||||||||||||||||
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| BEHAVIORS | ||||||||||||||||||||
Have a Passion for Winning •Fearless accountability for getting results | Think Big ... Then Make It Happen •Be willing to re-examine almost anything •Innovate with agility | |||||||||||||||||||
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Become Your Best •Seek and accept feedback •Bounce back from disappointments | Be Committed •Act like you own this place •Lead by example and work hard | |||||||||||||||||||
Build Exceptional Talent •Continuously learn and grow •Set high expectations for yourself and others | Act With Urgency •Move with lightning speed •Use speed as a differentiator | |||||||||||||||||||
Be a Zealot for Growth •Obsess over growth and customers •Understand what creates value for customers | Be Courageous •Take on seemingly impossible goals •Confront problems directly and face adversity head on | |||||||||||||||||||
Each of the Board’s committees plays a role in ensuring that our core values remain at the center of Honeywell’s culture. •The Audit Committee receives detailed investigation reports on a quarterly basis to monitor trends, ensure that allegations are investigated promptly, and as necessary, confirm that appropriate disciplinary measures are taken in a timely fashion. •The MDCC has responsibility for working with management to monitor workplace culture, establish diversity expectations, and review progress. | ||
| 42 | | Notice and Proxy Statement | 2022 |
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Notice and Proxy Statement | 2022 | | 43 | |||||||||
Idiversity initiatives, please visit investor.honeywell.com (see “ESG/Inclusion & Diversity”).
| SPOTLIGHT ON WORKFORCE DIVERSITY* | ||||||||||||||
| Women in the Global Workforce | People of Color (POC) in the U.S. Workforce | |||||||||||||
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Executives  | Other Managers  | Total Workforce  | ||||||||||||
Starting with the 2021 report to be filed with the U.S. Equal Employment Opportunity Commission (EEOC) later this year, Honeywell will publicly disclose its EEO-1 report (adjusted to exclude Sandia and KCNSC workforces) annually within 30 days after the report is filed with the EEOC. | ||||||||||||||
*As of December 31, 2021 unless otherwise indicated. Excludes Sandia National Laboratories (Sandia) and Kansas City National Security Campus (KCNSC) workforces. Sandia and KCNSC are U.S. Department of Energy facilities. Honeywell manages these facilities as a contract operator and does not establish or control their human resources policies. API represents Asian or Pacific Islander. The executives category represents executive-band employees. | ||||||||||||||
| 44 | | Notice and Proxy Statement | 2022 | ||||||
Our integrity and compliance program includes, among other elements, a Supplier Code of Business Conduct that flows down to Honeywell’s global supply chain to reinforce Honeywell’s expectation that Honeywell suppliers also will abide by our high standards of integrity and compliance, including our Conflict Minerals, Anti-Human Trafficking, Business Integrity, and Health, Safety, and Environmental policies. Suppliers are monitored via quality, ethics, and good manufacturing practices. When a supplier is found to be in violation of any Honeywell standard, they are either replaced or issued a corrective action plan. If the violation is related to unethical or illegal activities, the supplier is removed as a viable supply source.
Honeywell’s Code applies to all directors, officers (including the Chief Executive Officer, Chief Financial Officer, and Controller) and employees.
I INCLUSION AND DIVERSITY
The Board believes that its diversity (four women, two Hispanics, two African American,Business Conduct and onenon-U.S.) and the diversityother components of Honeywell’s executive leadership (over 50% diverse by ethnic background,non-U.S. place of birth, or gender) supportsintegrity and compliance program can be found on our evolving business strategy. The Company’s commitment to inclusionwebsite at investor.honeywell.com (see “ESG/Integrity and diversity enables better decision-making, helps build competitive advantages, and furthers long-term success. Inclusion and Diversity is one of our foundational principles and is required of all employees.
Our inclusion and diversity strategy focuses on five key pillars, and we are driving a number of strategic initiatives behind each one, as follows:
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IWORKPLACE RESPECT
For more information about Honeywell’s inclusion and diversity initiatives, please visit our website at honeywell.com (see “Company/ About Us”).
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Latest estimates of greenhouse gas intensity and energy efficiency pending external review.
Honeywell’s Sustainable Opportunity policy is based on the principle that by integrating health, safety, and environmental considerations into all aspects of its business, Honeywell:
Protects its people and the environment;
Drives compliance with all applicable regulations;
Achieves sustainable growth and accelerated productivity; and
Develops technologies that expand the sustainable capacity of our world.
The Honeywell Operating System (HOS), which drives sustainable improvements and the elimination of waste in manufacturing operations to generate exceptional performance, is a critical component in how the Company thinks about sustainability. HOS is a lean-based system with roles and ownership for all employees from the plant floor to the Board room to engage in careful planning and analysis, continuous employee engagement in improvement, and thorough follow-through. Honeywell has built sustainability directly into HOS, so the tools, personnel, activities, and culture are used to drive sustainability with the same focus used to drive other critical operational objectives, like quality, delivery, inventory, and cost. This ensures that sustainability is an integrated and integral part of the Honeywell work experience every day.
In addition, progress on our sustainability program is considered, along with other factors, in determining annual incentive compensation for senior leadership.
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I SUSTAINABLE OPPORTUNITY
Honeywell invents and manufactures technologies that address some of the world’s most critical energy, safety, security, productivity, and global urbanization challenges. While our internal efforts have improved our Scope 1 and Scope 2 greenhouse gas intensity by more than 90% since 2004, the positive impact of our products and services far outweigh the current footprint of Honeywell’s Scope 1 and Scope 2 carbon emissions of approximately 2 million metric tons (MMT) at the end of 2019. For example,
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I HEALTH, SAFETY, ENVIRONMENT, PRODUCT STEWARDSHIP, AND SUSTAINABILITY (HSEPS)
Honeywell’s HSEPS matters are managed by a global team of trained professionals with extensive knowledge and hundreds of years of collective experience in occupational health, chemistry, hydrology, geology, engineering, safety, industrial hygiene, materials management, and energy efficiency.
Honeywell’s Corporate Vice President of HSEPS reports to the Company’s Senior Vice President and General Counsel and has overall responsibility for HSEPS programs. A Corporate Energy and Sustainability Team, led by the Corporate Vice President of HSEPS, the Vice President for Global Real Estate, and the Director of Sustainability, helps drive the Company’s sustainability goals. Progress on these goals is reported to Honeywell’s CEO on a quarterly basis and is reviewed with the Board’s Corporate Governance and Responsibility Committee at least annually.
The Company utilizes a comprehensive HSEPS Management System based on recognized third-party standards, including ISO 14001 and ISO 45001, and industry best practices. The system is fully integrated into HOS, the Company’s blueprint for continuous, sustainable operational improvement. Compliance with standards and regulatory requirements is monitored through a Company-wide,HSEPS-led audit process. The timely development and implementation of process improvement and corrective action plans are closely monitored.
I HIGHLIGHTS OF OUR ENVIRONMENTAL ACHIEVEMENTS
Greenhouse Gas Reduction and Energy Efficiency.Honeywell reports on its global greenhouse gas emissions publicly through CDP, various regulatory agencies, and its website, investor.honeywell.com (see “Corporate Governance/Sustainability”). A qualified third party has provided limited assurance per ISO14064-3 of Honeywell’s 2011-2018 Scope 1 and Scope 2 greenhouse gas emissions inventories. Overall, our sustainability program has reduced our Scope 1 and Scope 2 greenhouse gas intensity by more than 90% since 2004.
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In 2019, Honeywell set a new five-year“10-10-10” target to reduce global Scope 1 and Scope 2 greenhouse gas emissions by an additional 10% per dollar of sales from 2018 levels, to deploy at least 10 renewable energy opportunities, and to achieve certification to ISO’s 50001 Energy Management Standard at 10 facilities, all by 2024.
Water and Waste. Honeywell has developed a global inventory of water usage in its manufacturing operations and implements water conservation projects in areas experiencing “water stress”. Since 2013, the Company has implemented over 150 water conservation projects in “water-stressed” areas, saving 128 million gallons. Each of our businesses is required to establish annual waste targets for reducing hazardous waste, as normalized by sales, and divertingnon-hazardous waste from landfills.
Safety.The safety of our employees, contractors, and partners is a top priority, and we use ourHOS-based approach to maintain our safety record. Our global TCIR (the number of occupational injuries and illnesses per 100 employees) was 0.37 at the end of 2019. According to the U.S. Bureau of Labor Statistics, the weighted average TCIR of the industries in which Honeywell operates is over 2.0. In other words, our safety record is four times better than the average of the industries in which we operate. Honeywell has received worker safety awards from governments and organizations around the world.
New Uses from Legacy Properties. Like other companies with long, successful histories, Honeywell has legacy manufacturing operations dating back to the 19th century. The Company’s dedicated, cross-functional team resolves our cleanup responsibilities while at the same time creating shared value with our communities. Technical excellence, scientific rigor, and community engagement drive our work. We integrate sitere-use with remediation to create solutions that are both protective and valuable. Over the last decade, we have made tremendous
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progress cleaning up and then helping to create reuse opportunities. At Honeywell, we do not believe that our cleanup is complete until the legacy property has been transformed into a valuable asset for the surrounding community. For example:
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For more information about Honeywell’s revitalization of brownfields while renewing communities, please visit our website at investor.honeywell.com (see “Corporate Governance/Sustainability”)
Honeywell demonstrates its commitment to corporate social responsibility and community involvement through Honeywell Hometown Solutions, our unique global corporate citizenship program that emphasizes science, technology, engineering and math (STEM) education, inclusion and diversity, sustainability, and humanitarian relief. our programs have delivered significant and meaningful results in communities around the world:
Approximately five million students have participated in Honeywell’s STEM programs; middle and high school teachers in the Atlanta area received computation and coding training in the new STEM Teacher Leadership Program at Georgia Institute of Technology, earning Georgia STEM School Certification; and Honeywell Control Labs in six universities in Turkey, Romania, and Indonesia are focused on loT technologies, serving over 10,000 students.
Students have received unique learning opportunities and educators gain valuable teaching tools to promote environmental science in the classroom through partnerships with environmental organizations in Mexico and the United States.
About one million U.S. students have learned potentially life-saving lessons to help avoid abduction and preventable childhood injuries with KidSmartz, and about three million students have received Safe Kids at Home fire, burns, and scalds safety training in China, India, and Malaysia.
Nearly 600 homes were repaired forlow-income families, the elderly, and the disabled in the U.S. and Mexico.
In 2019, Honeywell employees received nearly $200,000 in financial assistance to help recover from natural disasters in South Carolina, Ohio, Nebraska, and other regions. Over the years, relief efforts supported employees and communities after Hurricanes Harvey, Irma, Maria, Matthew, and Sandy in the U.S.; an earthquake in central Mexico; wildfires in Fort McMurray, Alberta, Canada; flooding in Louisiana and Romania; typhoons in the Philippines; and the Great Japan Earthquake and Tsunami.
In 2019, Honeywell partnered with the Avasara Leadership Institute, anon-profit organization that provides educational opportunities for India’s brightest girls, to focus on STEM. The new school features classrooms, laboratories, and dormitories as a base for the program. In addition to 500 Avasara students, the school will enable 12,000 students from government andlow-budget schools to achieve a proper education.
Through support for the Safe Water Initiative in India, Honeywell support has enabled more than 170 water stations in areas suffering from groundwater contamination, positively impacting impacts more than 600,000 people.
For more information about our Sustainability and Corporate Citizenship programs, please visit our website at honeywell.com (see “Company/About Us”).
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POLITICAL ENGAGEMENT AND CONTRIBUTIONS
Engagement in the political process is critical to our success. Our future growth depends on forward-thinking legislation and regulation that makes society safer and more energy efficient and improves public infrastructure. We strive always to engage responsibly in the political process and to ensure that our participation is fully consistent with all applicable laws and regulations, our principles of good governance, and our high standards of ethical conduct.
Our top legislative and regulatory priorities include:
Policies and regulations that encourage the use of public utilities to deploy demand response technologies and smart grids to reduce electricity consumption.
Emission reduction policies that reduce the use of global warming and ozone depleting refrigerants.
Investment in the air traffic control system to make flying both safer and more energy efficient.
Commercial building, permitting, and construction codes that facilitate safer, more energy efficient construction and renovation.
High-priority U.S. Department of Defense programs that support our national security.
Tax, trade, and other policies to ensure that our nation can compete on a level playing field around the globe.
Policies that impact the deployment of Industrial Internet of Things technology and software, including data privacy and cybersecurity.
I TRANSPARENCY
The Center for Political Accountability (CPA) has rated Honeywell as a “First Tier” company for six years in a row in its 2019CPA-Zicklin Index of Corporate Political Disclosure and Accountability, and for the first time this year, has categorized Honeywell as “Trendsetter” among the “First Tier” companies. The CPA is anon-profit,non-partisan organization that measures and rates the transparency, policies, and practices of the S&P 500 regarding political disclosure and accountability.
This achievement reflects the enhancements made in 2013, 2019, and again in 2020 as we revised and expanded our disclosure of policy, procedures and expenditures for political activity and contributions as well as for trade association membership. Our enhancements were influenced by feedback received from our largest shareowners when we met with them to discuss our performance and their views across a range of ESG topics, including our lobbying and political contributions disclosure.
This year, we redesigned the disclosure on our website to include:
Additional disclosure related to membership in trade associations, including (i) the number of trade associations that receive $50,000 or greater in annual dues from the Corporation, (ii) the aggregate membership dues paid to those associations, and (iii) specific discussion of the strategic objectives supported by the Corporation’s membership in those associations.
User-friendly, streamlined, and direct access to available disclosure regarding the Corporation’s political activities, including direct links to federal, state, and local-level filings.
With these enhancements, our shareowners are now able to access comprehensive information regarding our domestic political expenditures at investor.honeywell.com (see “Corporate Governance/Political Contributions”).
I MANAGEMENT AND BOARD OVERSIGHT
The Law Department oversees our lobbying activities. The Senior Vice President, Global Government Relations reports to the Senior Vice President and General Counsel and also works closely with the Corporate Secretary and Chief Compliance Officer, whose organization ensures compliance with our political spending policy. Our Senior Vice President and General Counsel, our Senior Vice President, Global Government Relations, and our Corporate Secretary and Chief Compliance Officer meet regularly with our Chairman and Chief Executive Officer and his leadership team about legislative, regulatory, and political developments.
With respect to Board oversight, our public policy efforts, including all lobbying activities, political contributions, and payments to trade associations and othertax-exempt organizations, are the responsibility of the CGRC, which consists entirely of independent,non-employee directors. Each year the CGRC receives an annual report on the Company’s policies and practices regarding political contributions. In addition, each year, the Senior Vice President, Global Government Relations reports to the CGRC on trade association memberships and to the full Board on our global lobbying and government relations program. The CGRC’s oversight of our political activities ensures compliance with applicable law and alignment with our policies, strategic priorities, and Code of Business Conduct.
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I POLITICAL CONTRIBUTIONS AND EXPENDITURES
Use of Corporate Funds.Since 2009, we have not used corporate funds to make any political contributions to candidates, political parties, 527 groups or organizations such as governors’ associations and super PACs or grassroot campaigns intended to influence the outcome of ballot measures using corporate funds, and have no intention of making such political contributions in the future. Even before 2009, any such contributions were extremely rare and forde minimis amounts of less than $5,000.
Were we to use corporate funds for any political contributions, such contributions would be made without regard to the personal partisan preferences of Company officers and executives. In addition, any such use of corporate funds would require the prior approval of the Company’s Senior Vice President and General Counsel. These policies on political contributions are embedded in our Corporate Governance Guidelines and Code of Business Conduct.
Honeywell International Political Action Committee (HIPAC).Any and all contributions made in support of federal, state, and local political candidates are through thenon-partisan Honeywell International Political Action Committee. HIPAC is funded exclusively through voluntary contributions from eligible U.S.-based employees, which are not reimbursed by Honeywell. Political disbursements made through HIPAC are made without regard to the personal partisan preferences of Company officers and executives. HIPAC spending decisions are made solely to promote the strategic business interests of Honeywell and are based on the following criteria: Honeywell’s employee, supplier, and/or customer base in legislators’ districts/states; support for Honeywell’s initiatives; leadership positions in the U.S. Congress or state legislatures; and leadership positions on legislative committees that are relevant to Honeywell’s businesses. The Company retains outside auditors to conduct periodic audits of HIPAC practices and procedures.
Trade Associations.We pay membership dues to a number of 501(c)(6) trade associations that may engage in political activity. We engage with these organizations to support our commercial growth initiatives where we believe engaging in coalitions with other industry participants is likely to enable growth of end markets and promote development of our internal technical and regulatory expertise. These memberships also enable us to share our technical and regulatory expertise with other companies and assist in political advocacy and outreach, particularly related to public education efforts regarding major issues common to our industries.
Currently, the aggregate amount of dues paid to trade associations with membership dues of $50,000 or more is less than $5 million annually. Honeywell is a member of 16 U.S. trade associations with membership dues of $50,000 or more annually. Our membership in these trade associations align with our strategic objectives in the following areas: aerospace and defense, aviation regulations, chemicals, civil justice reform, climate change, codes and standards, corporate governance, cybersecurity, data privacy, energy, environmental regulation, export controls, immigration, infrastructure, labor, legal reform, oil and gas/petrochemicals, regulatory reform, safety, tax, trade, and transportation.
Honeywell’s Senior Vice President and General Counsel and Senior Vice President, Global Government Relations review trade association memberships annually to assess their performance and to determine if continued membership is appropriate. Membership in trade associations that would receive more than $50,000 in membership dues from Honeywell in any fiscal year is subject to prior approval by the Company’s Senior Vice President and General Counsel and its Senior Vice President, Global Government Relations and is reviewed at least annually with the CGRC. Honeywell instructs these organizations not to use funds received from Honeywell for any election-related activity at the federal, state, or local levels, including contributions or expenditures in support of, or opposition to, any candidate for any office, ballot initiative campaign, political party, committee, or political action committee. Honeywell informs these organizations of this policy upon becoming a member and annually thereafter.
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I
Board Cash Retainer | • | $100,000 per annum | ||||||||||
Lead Director Compensation | • | $60,000 per annum | ||||||||||
Committee Membership Compensation | • | $10,000 per annum | (or $15,000 per annum for members of the Audit Committee) | |||||||||
Committee Chair Compensation | • | $20,000 per annum | (or $40,000 per annum for the Audit Committee Chair) | |||||||||
Common Stock Equivalents | • • | $60,000 in common stock equivalents | ||||||||||
Annual Equity Grants | •Awarded on the date of the Annual Meeting of Shareowners. •Eachnon-employee director receives an annual equity grant with a target value of $115,000, of which $65,000 is in the form of •Annual RSUs vest on the earliest of (i) the April 15th immediately preceding the first anniversary of the grant date, (ii) the director’s termination of service due to death or disability, (iii) the occurrence of a Change in Control, or (iv) the voluntary termination of service on or after the director’s tenth anniversary as a Board member in good standing. •Stock options vest in equal annual installments
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| 46 | | Notice and Proxy Statement | 2022 | ||||||
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Mr. Chico Pardo participates in the legacy Honeywell Inc.Non-Employee Directors Fee and Stock Unit Plan. The last fee deferral under this plan occurred on December 1, 1999. Since that date, deferred amounts are increased only by dividend equivalents. Payment will be made to the participating director in whole shares of common stock following the earlier of a change in control or the director’s termination of Board service for any reason, in one payment or annual installments, as elected by the director.
ICHARITABLE MATCH
IWashington.
I
Prior to 2019, newnon-employee directors elected to the Board received aone-time grant of 3,000 RSUs that vest on the earliest of the fifth anniversary of continuous Board service, death, disability, or change in control. In 2019, the CRGC decided to eliminate this fixed new directorsign-on award and instead will provide newly
Director Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | Option Awards(2)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | Total | ||||||||||||||||||
Duncan B. Angove | $ | 113,269 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 4 |
| $ | 273,337 |
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William S. Ayer | $ | 120,000 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 25,004 |
| $ | 305,068 |
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Kevin Burke | $ | 118,269 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 25,004 |
| $ | 303,337 |
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Jaime Chico Pardo | $ | 114,167 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 25,520 |
| $ | 299,751 |
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D. Scott Davis | $ | 145,000 |
| $ | 110,011 |
| $ | 50,053 |
| $ | 11,178 |
| $ | 520 |
| $ | 316,762 |
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Linnet F. Deily | $ | 145,000 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 25,520 |
| $ | 330,584 |
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Deborah Flint | $ | 23,370 |
| $ | 42,106 |
| $ | 27,945 |
| $ | — |
| $ | 4 |
| $ | 93,425 |
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Judd Gregg | $ | 125,000 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 25,004 |
| $ | 310,068 |
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Clive Hollick | $ | 113,269 |
| $ | 110,011 |
| $ | 50,053 |
| $ | 12,349 |
| $ | 46,563 |
| $ | 332,245 |
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Grace D. Lieblein | $ | 120,000 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 19,004 |
| $ | 299,068 |
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George Paz | $ | 145,000 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 25,004 |
| $ | 330,068 |
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Robin L. Washington | $ | 117,190 |
| $ | 110,011 |
| $ | 50,053 |
| $ | — |
| $ | 25,004 |
| $ | 302,258 |
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| Director Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | Option Awards(2)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | Total | ||||||||||||||||||||||||||||||||
| Duncan B. Angove | $ | 170,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 4 | $ | 345,010 | ||||||||||||||||||||||||||
| William S. Ayer | $ | 180,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 380,010 | ||||||||||||||||||||||||||
| Kevin Burke | $ | 175,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 375,010 | ||||||||||||||||||||||||||
| D. Scott Davis | $ | 235,000 | $ | 125,000 | $ | 50,006 | $ | 8,051 | $ | 520 | $ | 418,577 | ||||||||||||||||||||||||||
Linnet F. Deily (7) | $ | 116,566 | $ | 60,000 | $ | — | $ | — | $ | 25,219 | $ | 201,785 | ||||||||||||||||||||||||||
| Deborah Flint | $ | 170,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 1,040 | $ | 346,046 | ||||||||||||||||||||||||||
| Judd Gregg | $ | 203,297 | $ | 125,000 | $ | 50,006 | $ | — | $ | 28,996 | $ | 407,299 | ||||||||||||||||||||||||||
Clive Hollick (7) | $ | 102,912 | $ | 60,000 | $ | — | $ | 8,894 | $ | 8,187 | $ | 179,993 | ||||||||||||||||||||||||||
| Grace D. Lieblein | $ | 200,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 400,010 | ||||||||||||||||||||||||||
Raymond Odierno (7) | $ | 170,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 370,010 | ||||||||||||||||||||||||||
| George Paz | $ | 225,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 29,013 | $ | 429,019 | ||||||||||||||||||||||||||
| Robin L. Washington | $ | 175,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 375,010 | ||||||||||||||||||||||||||
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| Director Name | Outstanding Option Awards | Outstanding Stock Awards | Outstanding Deferred Comp Plan (Non-Elective) | |||||||||||||||||
| Mr. Angove | 8,118 | 3,988 | 1,518 | |||||||||||||||||
| Mr. Ayer | 17,565 | 599 | 3,603 | |||||||||||||||||
| Mr. Burke | 23,285 | 599 | 10,518 | |||||||||||||||||
| Mr. Davis | 20,133 | 599 | 19,929 | |||||||||||||||||
| Ms. Flint | 5,156 | 472 | 730 | |||||||||||||||||
| Sen. Gregg | 23,285 | 599 | 7,896 | |||||||||||||||||
| Ms. Lieblein | 20,133 | 599 | 5,631 | |||||||||||||||||
| Gen. Odierno | 4,232 | — | — | |||||||||||||||||
| Mr. Paz | 26,357 | 599 | 13,322 | |||||||||||||||||
| Ms. Washington | 20,133 | 599 | 5,109 | |||||||||||||||||
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Director Name | | Outstanding Option Awards |
| | Outstanding Stock Awards |
| | Outstanding Deferred Comp Plan (Non-Elective) |
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| Mr. Angove |
| 4,367 |
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| 3,920 |
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| 1,182 |
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Mr. Ayer |
| 13,814 |
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| 1,084 |
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| 3,186 |
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Mr. Burke |
| 27,856 |
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| 1,084 |
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| 9,829 |
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Mr. Chico Pardo |
| 33,106 |
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| 1,084 |
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| 27,957 |
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Mr. Davis |
| 22,606 |
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| 1,084 |
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| 18,871 |
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Ms. Deily |
| 16,382 |
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| 1,084 |
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| 16,938 |
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Ms. Flint |
| 1,405 |
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| 171 |
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| 426 |
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Sen. Gregg |
| 27,856 |
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| 1,084 |
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| 7,310 |
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Mr. Hollick |
| 33,106 |
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| 1,084 |
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| 24,969 |
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Ms. Lieblein |
| 19,534 |
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| 1,084 |
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| 5,134 |
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Mr. Paz |
| 33,106 |
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| 1,084 |
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| 12,524 |
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Ms. Washington |
| 19,534 |
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| 1,084 |
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| 4,632 |
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Director stock ownership guidelines have been adopted under which eachnon-employee director, while serving as a director of Honeywell, must hold common stock (including shares held personally, RSUs, and/or common stock equivalents) with a market value of at least five times the annual cash retainer (or $500,000). Directors have five years from election to the Board to attain the prescribed ownership threshold. All current directors (other than Ms. Flint who joined the Board in October 2019 and In addition, directors must hold net gain shares from option exercises for one year. “Net gain shares” means the number of shares obtained by exercising the option, less the number of shares the director sells to cover the exercise price of the options and pay applicable taxes. | On average, Honeywellnon-employee directors held, as of December 31, 43x the annual cash retainer, | |||||||
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PROPOSAL 2: ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION
We anticipate that shareowners will next have the opportunity to vote on the frequency of future Say-on-Pay votes at the 2023 Annual Meeting of Shareowners.
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| | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR THIS PROPOSAL. | ||||
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DISCUSSION AND ANALYSIS
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Other Definitions
Peer Median Reflects Compensation Peer Group Median
Multi-Industry Peer Median Includes EMR, GE, ITW, MMM, and UTX
Peer Median Net Income, EPS Reflect Adjusted(Non-GAAP) Results
Adjusted Net Income Before Interest = Adjusted Net Income +After-Tax Interest
Adjusted Free Cash Flow Margin = Adjusted Free Cash Flow ÷ Sales
Net Investment = Book Value of Equity + Total Debt
ROIC = Adjusted Net Income Before Interest ÷ Net Investment(2-Point Average)
ROA = Adjusted Net Income ÷ Total Assets(2-Point Average)
ROE = Adjusted Net Income ÷ Total Shareowner Equity(2-Point Average)
ROI = Adjusted Net Income Before Interest ÷ (Total Shareowner Equity + Net Debt)
| Other Definitions | |||||
Peer Median Reflects Compensation Peer Group Median Peer Median Net Income, EPS Reflect Adjusted (Non-GAAP) Results Adjusted Net Income Before Interest = Adjusted Net Income + After-Tax Interest* Net Investment = Book Value of Equity + Total Debt * Interest expense tax effected for effective tax rates. | ROIC = Adjusted Net Income Before Interest1 ÷ Net Investment (2-Point Average) ROE = Adjusted Net Income ÷ Total Shareowner Equity (2-Point Average) ROI = Adjusted Net Income Before Interest* ÷ (Total Shareowner Equity + Net Debt) ROA = Adjusted Net Income ÷ Total Assets (2-Point Average) | ||||
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Mr. Mahoney is included as the sixth NEO for 2019 because he was an executive officer during 2019 while in the role of President and Chief Executive Officer, Aerospace and as a result of compensation earned in 2019.
STRONG OPERATIONAL PERFORMANCE IN 2019
In 2019, Honeywell delivered on our commitments and grew organic sales, segment margin, adjusted earnings per share (EPS), and adjusted free cash flow. We’ve continued to foster a culture within Honeywell of doing what we say we will do, or as we call it, the “say / do” ratio. In 2019, we executed at a high “say / do” ratio, meeting or exceeding every financial commitment laid out during our initial outlook call on February 1, 2019. In the year, we delivered favorable performance on key metrics we use as the basis for our executive compensation programs as shown below:
5% organic sales growth
150 basis points of segment margin expansion
10% adjusted EPS growth excluding spins
17% adjusted free cash flow growth excluding spins
The table below illustrates our success on these metrics over the past three years (2017-2019):
Reconciliation, notes, and definitions ofnon-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 41 or in Appendix A.
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DELIVERED ON OUR COMMITMENTS IN 2019
Below are our long-term financial commitments, and in 2019 we met or exceeded these financial commitments to shareowners and continued to make investments in the businesses through research and development, capital expenditures, and M&A. In addition to our strong financial performance, we’ve executed strategic capital deployment that will continue to benefit shareowners over the long term. Given the market environment in 2019, we maintained a balanced capital deployment strategy consisting of the following actions:
Announced a 10% dividend increase, our tenth consecutive double-digit increase since 2010.
Repurchased $4.4 billion in Honeywell shares, reducing the weighted average share count by over 3%. This was the second consecutive year of deploying more than $6.0 billion of cash back to shareowners in the form of dividends and share repurchases, after spinning off ~20% of sales in 2018.
Deployed more than $800 million to high ROI capital expenditures.
Deployed approximately $100 million to M&A and Honeywell Ventures to add strategic assets and enhance our technology offerings and innovation.
Refinanced 2019 maturing debt at attractive interest rates to further strengthen our balance sheet.
CEO Priority
| Metric
| Long-Term Commitment
| 2019 Result
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Accelerate Organic Growth | Organic Sales Growth | Low-to-Mid Single Digit | 5% | ||||
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Expand Margins / Improve Cash Conversion
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Basis Points (bps) Expansion
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30 - 50 bps
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150 bps
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Adjusted Free Cash Flow Conversion
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~100%
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105%
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Become a Software- Industrial Company
| Connected Software Sales Growth | Double-Digit | Double-Digit | ||||
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More Aggressive Capital Deployment
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• Dividend growthin-line with EPS growth • Disciplined M&A (including Honeywell Ventures) • Share repurchases from residual capacity • High ROI capital expenditures
| $7.8B | |||||
Reconciliation, notes, and definitions ofnon-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 41 or in Appendix A.
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DARIUS ADAMCZYK | GREGORY P. LEWIS | ANNE T. MADDEN | QUE THANH DALLARA† | MICHAEL R. MADSEN | |||||||||||||||||||||||||||||||||||||
| Chairman and CEO | Senior Vice President Chief Financial Officer | Senior Vice President General Counsel | President and CEO Honeywell Connected Enterprise (HCE) | President and CEO Aerospace (AERO) | |||||||||||||||||||||||||||||||||||||
| WHAT WE DO | WHAT WE DON’T DO | ||||||||||
 Robust Performance Goals. We establish clear and measurable goals and targets and hold our executives accountable for achieving specified levels to earn a payout under our incentive plans. We use different sets of operational metrics for the annual cash incentive plan (ICP) and performance-based long-term incentives (LTI) to drive top and bottom-line growth over multiple time frames, aligned with sustained long-term performance.Clawback Practices. We maintain a policy that allows for recoupment of incentive compensation in the event of misconduct and a significant financial restatement or if an executive leaves the Company to join a competitor.Double Trigger in the Event of a Change in Control (CIC). We have double trigger vesting on equity and severance for CIC; executives will not receive cash severance nor will equity vest in the event of a CIC unless accompanied by qualifying termination of employment.Maximum Payout Caps for Incentive Plans. ICP and Performance Plan payouts are capped.Robust Stock Ownership Requirements. We require executive officers to hold meaningful amounts of stock and require them to hold net shares for one year from exercise or vesting.Options Granted at Fair Market Value (FMV). Annual stock options awarded to all executives (including the NEOs) are approved by the MDCC on the same day, with an exercise price no less than the fair market value of Honeywell's common stock on the date of grant.Independent Compensation Consultant. The MDCC retains an independent compensation consultant to review and advise the MDCC on executive compensation matters. The independent consultant attends all MDCC meetings. |  No Excessive Perks. We do not provide perquisites except in cases where there is a compelling business or security reason, nor do we provide tax gross-ups for officers, other than in connection with a Company-required relocation.No Guaranteed Annual Salary Increases or Bonuses. Annual salary increases are based on evaluations of individual performance and the competitive market. In addition, we do not provide guarantees on bonus payouts.No Hedging or Pledging. We do not allow hedging or pledging of our stock.No Excise Tax Gross-Ups and No Accelerated Bonus Payments Upon a CIC. Excise tax gross-ups have been eliminated for all executive officers. Plans provide that ICP awards earned in the year of a CIC would be paid at the time they would typically be paid based on business performance rather than at target.No Incentivizing of Short-Term Results to the Detriment of Long-Term Goals and Results. Pay mix is heavily weighted toward long-term incentives aligned with the interests of shareowners.No Excessive Risks. Compensation practices are appropriately structured and avoid incentivizing employees to engage in excessive risk-taking.No Options Repricing. We prohibit repricing (reduction in exercise price or exchange for cash or other consideration) or reloading of stock options.No Consultant Conflicts. Under the MDCC’s established policy, the compensation consultant cannot provide any other services to Honeywell without the MDCC’s approval. Regular independence reviews are conducted. | ||||||||||
Our
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•Attract and Retain World-Class Leadership Talentwith the skills and experience necessary to develop and execute business strategies, drive superior financial results, and nimbly adapt and react to constantly evolving end-market conditions in an enterprise with the Company’s scale, breadth, complexity, and global footprint. •Emphasize Variable, At-Risk Compensationwith an appropriate balance of near-term and long-term objectives that align executive and shareowner interests. •Pay for Superior Results and Sustainable Growthby rewarding and differentiating among executives based on the achievement of enterprise, business unit, and individual objectives as well as efforts to advance Honeywell’s long-term growth initiatives. •Manage Risk Through Oversight and Compensation Program Design Features and Practicesthat balance short-term and long-term incentives, are not overly leveraged, and cap maximum payments. Decision-making over executive compensation rests with the MDCC, which holds five regularly scheduled meetings each year (six meetings held in 2021). Specific topics may be covered in a separate meeting from time to time. Each meeting includes an executive session comprised solely of independent directors, and those meetings are attended by the MDCC’s independent compensation consultant. Meeting agendas contain items proposed by either management or the MDCC members. In carrying out its responsibilities, the MDCC balances a number of important considerations, including: • |
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The keyimportance of aligning pay with Company and individual performance.
•Operational and financial performance — for the entire corporation and the relevant business units.
•Aggressiveness of each executive’s financial and operating goals and targets compared to peers as well as the business/targets.
Each executive’s long-term leadership potential and associated retention risk.
•Execution against strategic initiatives and the impact of investments that will benefit financial performance in future years.
•Each executive’s long-term leadership potential and associated retention risk.
Stock price performance and total•Total shareowner return (TSR).
•Trends and best practices in executive compensation.
•Peer group comparisons, including performance, pay levels, and related practices.
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IPROGRAM DESIGN AND LINK TO BUSINESS STRATEGY AND PERFORMANCE
Link to Strategy and Performance | Target Compensation Mix | |||||||||||||||||||
| Element | Description | CEO | Other NEOs | |||||||||||||||||
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| Annual Incentive Compensation Plan (ICP) |  80% based on formulaic determination againstpre-established financial metrics.  20% based on assessment of individual performance. |
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| Performance Stock Units (PSUs) (2021-2023) | •
•Covers three-year period •Relative TSR (25% weight) along with key financial metrics (75% weight) |
| | | |||||||||||||||
| Stock Options | •
|
|  |  | ||||||||||||||||
Restricted Stock Units (RSUs) | •
|
| | | ||||||||||||||||
Notice and Proxy Statement | 2022 | | 53 | |||||||||
Decision-making over executive compensation rests with the MDCC, which holds six regularly scheduled meetings each year. Each meeting includes an executive session comprised solely of independent directors, and those meetings are attended by the MDCC’s independent compensation consultant. Meeting agendas contain items proposed by either management or the MDCC members.
In carrying out its responsibilities, the MDCC balances a number of important considerations, including:
The importance of aligning pay with Company and individual performance.
The need to attract, retain, and reward executives with a proven track record of delivering consistent financial and operating results and driving “seed-planting” initiatives that will create sustainable long-term shareowner value.
The complex multi-industry and global nature of our businesses and the importance of growth outside of the United States for future success.
The positioning of pay relative to the competitive market.
The importance of maintaining and executing on a thorough and rigorous succession planning process.
To create long-term shareowner value, the MDCC believes that Honeywell’s compensation programs must be financially competitive and structured to drive sustained performance against our strategic and financial goals and objectives. The MDCC is focused on maintaining a compensation program for Honeywell that emphasizes variable,at-risk compensation and has an appropriate balance of near-term and long-term objectives.
 |
FIXED: Base Salary VARIABLE: ICP at target and PSUs, Stock Options, and RSUs at grant date value | |||||||||||
| ||||||||||||
 | SHORT-TERM: Base Salary and ICP at target LONG-TERM: PSUs, Stock Options, and RSUs at grant date value | |||||||||||
| ENGAGEMENT | •The Company’s Lead Director and MDCC Chair regularly participate in these engagements. •In 2021, the Company extended meeting invitations to 60 of its top shareowners during proxy season and again during summer/fall outreach to discuss environmental, social, and governance (ESG) matters (including Honeywell’s executive compensation program). •As a result of these invitations, the Company held 27 separate one-on-one meetings with shareowners, representing 29% of common shares outstanding, many of which included the participation of either Honeywell’s Lead Director or MDCC Chair. | |||||||
| ■ | ||||||||
| FEEDBACK |
•Shareowners viewed the pandemic-related compensation actions as appropriate under the circumstances, with recognition that adverse pandemic-related impacts on incentive plans were not unique to Honeywell and that thoughtful recalibrations were appropriate in industries hardest hit by the COVID-19 pandemic. •In addition to shareowner feedback, the MDCC also considers the results of the annual advisory vote on executive compensation in making determinations about the structure of Honeywell’s pay program, or whether any changes to the program should be considered. | |||||||
| ■ | ||||||||
| RESPONSE | •Feedback the Company receives from shareowners enables the Board to better understand shareowners’ perspectives on its executive compensation program, which resulted in significant changes to the program in the past that have now been fully implemented. •These changes led to over 92% of shareowners voting in favor of “Say-on-Pay” in each of the last five years, including a 93% result in 2021. •There were no changes made to the executive compensation program in 2021 as a result of these meetings, as most shareowners remained supportive of the executive compensation program and the actions taken by the MDCC in 2020 and the first quarter of 2021, including those taken in response to the COVID-19 pandemic. •Throughout 2021 and into the first quarter of 2022, the MDCC continued to monitor and assess the risks and impacts to the incentive plans from the protracted COVID-19 pandemic and related supply chain dynamics, and remained committed to maintaining alignment between pay and performance in its decision making. | |||||||
| ■ | ||||||||
| 54 | | Notice and Proxy Statement | 2022 | ||||||
The MDCC also considers shareowner feedback and the results of the annual advisory vote on executive compensation in making determinations about the structure of Honeywell’s pay program, or whether any changes to the program should be considered. We routinely engage with our shareowners to better understand their views on our governance and compensation practices. Our Lead Director and MDCC Chair often participate in these engagements. The feedback we received from shareowners enabled the Board to better understand shareowners’ perspectives on our executive compensation programs, which resulted in significant changes to our programs over the past few years that have now been fully implemented. These changes led to over 92% of our shareowners voting in favor of“Say-on-Pay” in each of the last three years.
In 2019, we extended meeting invitations to 77 of our shareowners during proxy season and 53 during our summer/fall outreach to discuss environmental, social, and governance (ESG) matters (including our executive compensation program), representing 53% of our common stock outstanding. Our invitations were accepted by 25 different shareowners, representing 33% of our common shares outstanding, and 29 separate meetings were held, many of which included the participation of either our Lead Director or CRGC Chair. Feedback on our executive compensation program was uniformly positive in 2019. No additional executive compensation program modifications were made in 2019 as a result of these meetings.
Multi-Industry Peer Group. This peer group is made up of Emerson Electric Co. (EMR), General Electric Company (GE), Illinois Tool Works Inc. (ITW), 3M Company (MMM), and United Technologies Corporation (UTX), companies against whom we frequently compete for investor dollars. Each of these five companies is a multi-industrial company that has broadly overlapping institutional ownership, is covered by the same set of Wall Street research analysts that cover Honeywell, and operate in a similarly diverse set of end markets on a global basis. The MDCC added ITW to the Multi-Industry Peer Group in 2019 to align the Multi-Industry Peers with the core peer group used in investor relations communications.
Compensation Peer Group. The companies included in the broader Compensation Peer Group focus on companies that have one or more of the following attributes:
•Business operations in the industries and markets in which Honeywell participates.
Similar sales and/or market capitalization.
•Similar breadth of portfolio and complexity.
•Global scope of operations and/or diversified product lines.
•Within reasonable range of sales and/or market capitalization.
The following provides a view of the multi-industry profile of the Honeywell businesses in 2019:
The MDCC reviews the appropriateness of the Compensation Peer Group companies on an annual basis and discusses whether any changes are necessary. No
|
|
|
|
The following table lists relevant comparative information for the Compensation Peer Group companies for 2019:
Mkt Cap ($M) (12/31/2019) | Total Assets ($M) | Sales ($M) | # Employees | Total Shareowner Return (12/31/2019)
| ||||||||||||||||||||||||||||||||||||||||||||
Company Name | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||||||||||
Honeywell International Inc.
| $126,472 | $ 58,679 | $ 36,709 | 113,000 | 37 | % | 69 | % | 106 | % | 493 | % | ||||||||||||||||||||||||||||||||||||
Multi-Industry Peer Group (5) | ||||||||||||||||||||||||||||||||||||||||||||||||
3M Company |
| $101,450 |
|
| $ 44,659 |
|
| $ 32,136 |
|
| 96,163 |
|
| -4 | % |
| 7 | % |
| 23 | % |
| 176 | % | ||||||||||||||||||||||||
Emerson Electric Co. |
| $ 46,588 |
|
| $ 20,497 |
|
| $ 18,372 |
|
| 88,000 |
|
| 32 | % |
| 50 | % |
| 45 | % |
| 142 | % | ||||||||||||||||||||||||
General Electric Company |
| $ 97,466 |
|
| $266,048 |
|
| $ 95,214 |
|
| 205,000 |
|
| 54 | % |
| -61 | % |
| -48 | % |
| 3 | % | ||||||||||||||||||||||||
Illinois Tool Works Inc. |
| $ 57,734 |
|
| $ 15,068 |
|
| $ 14,109 |
|
| 45,000 |
|
| 46 | % |
| 58 | % |
| 113 | % |
| 376 | % | ||||||||||||||||||||||||
United Technologies Corporation |
| $127,850 |
|
| $139,716 |
|
| $ 77,046 |
|
| 243,200 |
|
| 44 | % |
| 46 | % |
| 0 | % |
| 173 | % | ||||||||||||||||||||||||
Honeywell Percentile Rank |
| 99 | % |
| 54 | % |
| 53 | % |
| 54 | % |
| 35 | % |
| 100 | % |
| 97 | % |
| 100 | % | ||||||||||||||||||||||||
Honeywell TSR Rank Order
|
| 4 |
|
| 1 |
|
| 2 |
|
| 1 |
| ||||||||||||||||||||||||||||||||||||
Other Comp Peers (11) | ||||||||||||||||||||||||||||||||||||||||||||||||
The Boeing Company |
| $183,335 |
|
| $133,625 |
|
| $ 76,559 |
|
| 161,100 |
|
| 3 | % |
| 124 | % |
| 185 | % |
| 668 | % | ||||||||||||||||||||||||
Caterpillar Inc. |
| $ 81,617 |
|
| $ 78,453 |
|
| $ 53,800 |
|
| 102,300 |
|
| 20 | % |
| 72 | % |
| 89 | % |
| 241 | % | ||||||||||||||||||||||||
Deere & Company |
| $ 54,278 |
|
| $ 73,011 |
|
| $ 39,233 |
|
| 73,489 |
|
| 18 | % |
| 78 | % |
| 119 | % |
| 301 | % | ||||||||||||||||||||||||
Eaton Corporation plc |
| $ 39,157 |
|
| $ 32,805 |
|
| $ 21,390 |
|
| 101,000 |
|
| 43 | % |
| 56 | % |
| 66 | % |
| 308 | % | ||||||||||||||||||||||||
General Dynamics Corporation |
| $ 50,898 |
|
| $ 48,841 |
|
| $ 39,350 |
|
| 102,900 |
|
| 15 | % |
| 8 | % |
| 41 | % |
| 226 | % | ||||||||||||||||||||||||
Ingersoll-Rand Plc |
| $ 31,677 |
|
| $ 20,492 |
|
| $ 16,599 |
|
| 50,000 |
|
| 48 | % |
| 88 | % |
| 131 | % |
| 448 | % | ||||||||||||||||||||||||
Johnson Controls International plc |
| $ 31,404 |
|
| $ 42,287 |
|
| $ 23,968 |
|
| 104,000 |
|
| 41 | % |
| 7 | % |
| 7 | % |
| 111 | % | ||||||||||||||||||||||||
Lockheed Martin Corporation |
| $109,833 |
|
| $ 47,528 |
|
| $ 59,812 |
|
| 110,000 |
|
| 53 | % |
| 68 | % |
| 131 | % |
| 621 | % | ||||||||||||||||||||||||
Phillips 66 |
| $ 49,506 |
|
| $ 58,720 |
|
| $107,293 |
|
| 14,500 |
|
| 34 | % |
| 42 | % |
| 81 | % |
| 0 | % | ||||||||||||||||||||||||
Raytheon Company |
| $ 61,193 |
|
| $ 34,566 |
|
| $ 29,176 |
|
| 70,000 |
|
| 46 | % |
| 63 | % |
| 126 | % |
| 452 | % | ||||||||||||||||||||||||
Schlumberger Limited
|
| $ 55,652 |
|
| $ 56,312 |
|
| $ 32,917 |
|
| 105,000 |
|
| 18 | % |
| -46 | % |
| -44 | % |
| -21 | % | ||||||||||||||||||||||||
All Compensation Peers (16) | ||||||||||||||||||||||||||||||||||||||||||||||||
Honeywell Percentile Rank | 93 | % | 67 | % | 51 | % | 80 | % | 49 | % | 75 | % | 65 | % | 88 | % | ||||||||||||||||||||||||||||||||
Honeywell TSR Rank Order | 9 | 5 | 7 | 3 | ||||||||||||||||||||||||||||||||||||||||||||
2021:
| MKT Cap ($M) (12/31/2021) | Total Assets ($M) | Sales ($M) | Empees (#) | Total Shareowner Return (12/31/2021) | ||||||||||||||||||||||||||||||||||||||||
| Company Name | 1 Year | 2 Years | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||||||||||||||
| Honeywell International Inc. | $ | 143,543 | $ | 64,470 | $ | 34,392 | 99,000* | 0% | 23% | 68% | 108% | 397% | ||||||||||||||||||||||||||||||||
| 3M Company | $ | 102,360 | $ | 47,072 | $ | 35,355 | 95,000 | 5% | 8% | 3% | 16% | 186% | ||||||||||||||||||||||||||||||||
| The Boeing Company | $ | 118,316 | $ | 138,552 | $ | 62,286 | 142,000 | -6% | -38% | -36% | 39% | 235% | ||||||||||||||||||||||||||||||||
| Caterpillar Inc. | $ | 111,834 | $ | 82,793 | $ | 50,971 | 107,700 | 16% | 47% | 76% | 154% | 202% | ||||||||||||||||||||||||||||||||
| Deere & Company | $ | 105,407 | $ | 84,114 | $ | 43,956 | 75,550 | 29% | 104% | 141% | 262% | 449% | ||||||||||||||||||||||||||||||||
| Dow Inc. | $ | 41,951 | $ | 62,990 | $ | 54,968 | 35,700 | 7% | 15% | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
| DuPont de Nemours, Inc. | $ | 41,852 | $ | 45,707 | $ | 16,653 | 28,000 | 15% | 31% | 13% | 11% | 164% | ||||||||||||||||||||||||||||||||
| Eaton Corporation plc | $ | 68,886 | $ | 34,027 | $ | 19,628 | 86,000 | 47% | 92% | 174% | 200% | 441% | ||||||||||||||||||||||||||||||||
| Emerson Electric Co. | $ | 55,308 | $ | 24,715 | $ | 18,236 | 86,700 | 18% | 28% | 69% | 92% | 169% | ||||||||||||||||||||||||||||||||
| General Dynamics Corporation | $ | 58,108 | $ | 50,073 | $ | 38,469 | 103,100 | 44% | 25% | 43% | 35% | 297% | ||||||||||||||||||||||||||||||||
| General Electric Company | $ | 103,696 | $ | 198,874 | $ | 74,196 | 168,000 | 10% | 7% | 64% | -58% | -13% | ||||||||||||||||||||||||||||||||
| Illinois Tool Works Inc. | $ | 77,466 | $ | 16,077 | $ | 14,455 | 45,000 | 24% | 44% | 110% | 127% | 566% | ||||||||||||||||||||||||||||||||
| Johnson Controls International plc | $ | 57,269 | $ | 41,890 | $ | 23,668 | 101,000 | 77% | 109% | 194% | 124% | 270% | ||||||||||||||||||||||||||||||||
| Lockheed Martin Corporation | $ | 98,017 | $ | 50,873 | $ | 67,044 | 114,000 | 3% | -4% | 47% | 62% | 499% | ||||||||||||||||||||||||||||||||
| Phillips 66 | $ | 31,752 | $ | 55,594 | $ | 111,930 | 14,000 | 9% | -28% | -4% | 2% | N/A | ||||||||||||||||||||||||||||||||
| Raytheon Technologies Corporation | $ | 129,019 | $ | 161,404 | $ | 64,388 | 174,000 | 23% | 3% | 48% | 50% | 154% | ||||||||||||||||||||||||||||||||
| Schlumberger Limited | $ | 42,009 | $ | 41,511 | $ | 22,929 | 92,000 | 40% | -22% | -8% | -58% | -43% | ||||||||||||||||||||||||||||||||
| Compensation Peer Median | $ | 73,176 | $ | 50,473 | $ | 41,213 | 93,500 | 17% | 20% | 48% | 50% | 219% | ||||||||||||||||||||||||||||||||
| Honeywell Percentile Rank | 100% | 67% | 39% | 58% | 4% | 52% | 62% | 68% | 75% | |||||||||||||||||||||||||||||||||||
| Honeywell TSR Rank Order | 16 | 9 | 7 | 6 | 5 | |||||||||||||||||||||||||||||||||||||||
| Honeywell TSR Outperformed Compensation Peer Median Over 2, 3, 5, and 10-Year Periods | ||
|
| | 55 | |||||||||||||
| Sales Growth | Incremental Margin | Adjusted EPS Growth | Free Cash Flow Margin | ||||||||
 |  |  |  | ||||||||
Three-Year Cumulative Growth
| Total Shareowner Return | Sales Growth | Segment Margin Expansion (bps) | Adjusted EPS Growth | ||||||||
 |  |  |  | ||||||||
*
| |
| ||||||||
|
Three-Year Average Return
THREE-YEAR AVERAGE RETURN
median.
| Return on Invested Capital | Return on Assets | Return on Equity | ||||||
 |  |  | ||||||
Cumulative Total Shareowner Return
RELATIVE TO PEERS
| Cumulative two-year TSR represents the COVID-19 pandemic impacted period | Cumulative five-year TSR is more than double the Compensation Peer Group median return | Cumulative 10-year TSR exceeded the Compensation Peer Group median by a multiple of 1.8x | ||||||
2021.
|
|
|
|
The table below summarizes 2019 compensation actions that reflect our commitment to align pay with Company performance and the interests of our shareowners. Details are more fully discussed later in this Compensation Discussion and Analysis.
Notice and Proxy Statement | 2022 | | 57 | ||||||||||
| ||||||||||||||||||||
 |  |  | Base Salary | • |
•Mr. Lewis's base salary was adjusted upward by 10.4% to recognize performance, the broad scope of •For Mses. Madden and Dallara and Mr. Madsen, base salary merit | • | ||||||||||||||
 | ||||||||||||||||||||
|
| •For Mr. Adamczyk, ICP
|
| target. •80% of payout based on Company performance against the twopre-established ICP metrics of adjusted EPS and Ms. Dallara, and AERO income contribution and AERO free cash flow for Mr. Madsen. •20% of payouts were determined based on the MDCC’s qualitative assessment of individual performance and accomplishments discussed starting on | ||||||||||||||||
 | ||||||||||||||||||||
 | ||||||||||||||||||||
Stock Units | •Represented 50% of annual LTI. | • |
| |||||||||||||||||
Stock Options  | •Represented 35% of annual LTI. | • |
| |||||||||||||||||
| •Represented 15% of annual LTI. | • |
| |||||||||||||||||
| 58 | | Notice and Proxy Statement | 2022 | ||||||
NEO
NEO | Position | Base Salary | Annual Incentive Plan (ICP)(1) | 2019-2021 Performance Plan Units(2) | Stock Options(3) | Restricted Stock Units(4) | Total Annual Direct Compensation | |||||||||||||||||||
Darius Adamczyk | Chairman and CEO | $ | 1,600,000 |
|
| $4,065,000 |
|
| $6,638,490 |
| $ | 4,635,409 |
| $ | 1,974,016 |
|
| $18,912,915 |
| |||||||
Gregory P. Lewis | SVP, Chief Financial Officer | $ | 749,808 |
|
| $1,056,000 |
|
| $1,763,850 |
| $ | 1,222,904 |
| $ | 524,348 |
|
| $ 5,316,910 |
| |||||||
Mark R. James | SVP, HR, Security and Communications | $ | 794,231 |
|
| $ 996,000 |
|
| $2,004,375 |
| $ | 1,399,450 |
| $ | 586,036 |
|
| $ 5,780,092 |
| |||||||
Anne T. Madden | SVP, General Counsel | $ | 757,019 |
|
| $1,102,000 |
|
| $1,763,850 |
| $ | 1,222,904 |
| $ | 524,348 |
|
| $ 5,370,121 |
| |||||||
Rajeev Gautam | President and CEO, PMT | $ | 779,231 |
|
| $ 976,000 |
|
| $2,020,410 |
| $ | 1,412,368 |
| $ | 601,458 |
|
| $ 5,789,467 |
| |||||||
Timothy O. Mahoney | SVP, Enterprise Transformation (Former President and CEO, Aerospace) | $ | 1,021,346 |
|
| $1,681,000 |
|
| $3,050,148 |
| $ | 2,133,623 |
| $ | 909,898 |
|
| $ 8,796,015 |
| |||||||
|
|
|
|
DARIUS ADAMCZYK Chairman and CEO | Total Annual Direct Compensation: $20,566,195  |
| ||||
| ||||||
GREGORY P. LEWIS | Total Annual Direct Compensation: $6,629,344  | ||||
ANNE T. MADDEN SVP, General Counsel |
 | ||||
QUE THANH DALLARA President and CEO, Honeywell Connected Enterprise | Total Annual Direct Compensation: $5,367,608  | ||||
MICHAEL R. MADSEN President and CEO, Aerospace | Total Annual Direct Compensation: $4,697,640  | ||||
nBase Salary | nAnnual Incentive Plan (ICP)(1) |
n2021-2023 Performance Stock Units (PSUs)(2) | ||||||||||
nStock Options(3) | (4) | |||||||||||
For 2019,
•Mr. Adamczyk: 175%
Mr. Mahoney: 115%
•Other NEOs: 100%
I2021.
| ICP Weighting (Formulaic) | |||||||||||
| Metric | Significance | Corporate NEOs | Business Unit NEOs | ||||||||
| Adjusted Honeywell EPS | Viewed as the most important measure of near-term profitability that has a direct impact on stock price and shareowner value creation. | 50 | % | 25 | % | ||||||
| Business Unit Metric 1: Revenue Contribution (HCE) Income Contribution (AERO) | HCE: Measure of contribution of HCE initiatives toward segment level revenue goals. AERO: Business unit measure of near-term profitability and contribution to overall Company performance. | — | 25 | % | |||||||
| Total Honeywell Free Cash Flow | Reflects quality of earnings and incremental cash generated from operations that may be reinvested in our businesses, used to make acquisitions, or returned to shareowners in the form of dividends or share repurchases. | 50 | % | 25 | % | ||||||
| Business Unit Metric 2: Profit Contribution (HCE) Free Cash Flow (AERO) | HCE: Measure of contribution of HCE initiatives toward profitability. AERO: Business unit contribution to overall Company free cash flow performance. | — | 25 | % | |||||||
| Total | 100 | % | 100 | % | |||||||
Significance | ICP Weighting (Formulaic) | |||||||||
Metric | Corporate NEOs | Business Unit NEOs | ||||||||
Adjusted EPS |
• Viewed as the most important measure of near-term profitability that has a direct impact on stock price and shareowner value creation. |
|
50% |
|
|
25 |
% | |||
Business Unit Income Contribution |
• Business unit measure of near-term profitability and contribution to overall Company performance. |
|
— |
|
|
25 |
% | |||
Total Honeywell Adjusted Free Cash Flow |
• Reflects quality of earnings and incremental cash generated from operations that may be reinvested in our businesses, used to make acquisitions, or returned to shareowners in the form of dividends or share repurchases. |
|
50% |
|
|
25 |
% | |||
Business Unit Adjusted Free Cash Flow |
• Business unit contribution to overall Company adjusted free cash flow performance. |
|
— |
|
|
25 |
% | |||
Total |
|
100% |
|
|
100 |
% | ||||
For 2019, the totalTotal Honeywell ICP targets for adjusted EPS and adjusted free cash flow were as follows:
ICP Goal | 2018 | 2018 Ex-Spins | 2019 ICP Goal (Target) | 2019 Goal v. 2018 Ex-Spins | Basis for 2019 Goals | 2019 (50% | 2019 (200% | |||||||||
Adjusted EPS
|
$8.01 |
$7.39 |
$7.95 | +7.6% |
• Midpoint of initial guidance range communicated to investors on February 1, 2019 | $6.36 | $9.54 | |||||||||
Total Honeywell Adjusted Free Cash Flow | $6.030 billion | $5.362 billion | $5.700 billion | +6.3% | $4.560 billion | $6.840 billion | ||||||||||
Reconciliation, notes, and definitions ofnon-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 41 or in Appendix A.
| ICP Goal | 2020 ICP Goal Actual Performance | 2021 ICP Goal | 2021 Goal v. 2020 Actual | Basis for 2021 Goals | 2021 Threshold (50% Payout) | 2021 Maximum (200% Payout) | |||||||||||||||||||||||
| Adjusted EPS | $7.10 | $7.80 | +9.9% | Midpoint of initial guidance range communicated to investors on January 29, 2021 (Guidance Range) | $6.24 | $9.36 | |||||||||||||||||||||||
| Total Honeywell Free Cash Flow | $5.30 billion | $5.30 billion | same | $4.24 billion | $6.36 billion | ||||||||||||||||||||||||
| |
| ||||||||
|
IACTUAL PERFORMANCE AGAINST 20192021 ICP GOALS
ICP Goal
| 2019 ICP
| 2019 Actual
| Achievement
| 2019 Performance
| Metric
| Corporate
| Calculated
| |||||||||||
Adjusted EPS | $7.95 | $8.16 | 102.6% | • Exceeded the Target ICP Goal for 2019. • Represented a 10.4% increase over 2018Ex-Spins. • New record-level of performance for the Company. | 113.0% | 50% | 56.5% | |||||||||||
Total Honeywell Adjusted Free Cash Flow | $5.700 billion | $6.271 billion | 110.0% | • Exceeded the Target ICP Goal for 2019. • Represented a 17.0% increase over 2018Ex-Spins. • New record-level of performance for the Company. | 150.0% | 50% | 75.0% | |||||||||||
Total Calculated (Formulaic) Payout: Corporate NEOs | 131.5% | |||||||||||||||||
Mr. Gautam’s formulaic payout portion of ICP (80% of ICP) was based on performance against the 2019 ICP goals for both Total Honeywell and the PMT business unit, as follows:
| ICP Goal | 2019 ICP (Target) | 2019 Actual Performance | Achievement % | Metric Payout Percentage* | PMT Weighting | Calculated Payout Percentage | ||||||||||
Adjusted EPS
|
$7.95
|
$8.16
|
102.6%
|
113.0%
|
25%
|
28.3%
| ||||||||||
Total Honeywell Adjusted Free Cash Flow
|
$5.700 billion
|
$6.271 billion
|
110.0%
|
150.0%
|
25%
|
37.5%
| ||||||||||
PMT Income Contribution
|
$1.892 billion
|
$1.897 billion
|
100.3%
|
101.3%
|
25%
|
25.3%
| ||||||||||
PMT Adjusted Free Cash Flow
|
$2.040 billion
|
$1.924 billion
|
94.3%
|
85.8%
|
25%
|
21.4%
| ||||||||||
Total Calculated (Formulaic) Payout: PMT | 112.5% | |||||||||||||||
For the portion of the year that Mr. Mahoney was President and CEO of Aerospace (79% of the year), his formulaic payout portion of ICP (80% of ICP) was based on performance against the 2019 ICP goals for both Total Honeywell and the Aerospace business unit as shown on the table below. For the balance of the year (21%), his formulaic payout was based on the Corporate NEOs payout percentage displayed on the first table above:
| ICP Goal | 2019 ICP (Target) | 2019 Actual Performance | Achievement % | Metric Payout Percentage* | Aerospace Weighting | Calculated Payout Percentage | ||||||||||
Adjusted EPS
|
$7.95
|
$8.16
|
102.6%
|
113.0%
|
25%
|
28.3%
| ||||||||||
Total Honeywell Adjusted Free Cash Flow
|
$5.700 billion
|
$6.271 billion
|
110.0%
|
150.0%
|
25%
|
37.5%
| ||||||||||
Aerospace Income Contribution
|
$2.659 billion
|
$2.936 billion
|
110.4%
|
152.1%
|
25%
|
38.0%
| ||||||||||
Aerospace Adjusted Free Cash Flow
|
$2.810 billion
|
$2.966 billion
|
105.6%
|
127.7%
|
25%
|
31.9%
| ||||||||||
Total Calculated (Formulaic) Payout: Aerospace | 135.7% | |||||||||||||||
| ICP Goal | 2021 ICP Goal (Target) | 2021 Actual Performance | Achievement % | 2021 Performance | Metric Payout Percentage* | Corporate NEO Weighting | Calculated Payout Percentage | ||||||||||||||||
| Adjusted EPS | $7.80 | $8.06 | 103.3% | Annual Goal set in February 2021 based on midpoint of the Guidance Range. Actual performance exceeded top end of the Guidance Range of $7.60-$8.00. | 116.5% | 50% | 58.25 | % | |||||||||||||||
| Total Honeywell Free Cash Flow | $5.30 billion | $5.73 billion | 108.1% | Annual Goal set in February 2021 based on midpoint of the Guidance Range. Actual performance exceeded top end of the Guidance Range of $5.10B-$5.50B. | 140.5% | 50% | 70.25 | % | |||||||||||||||
| Total Calculated (Formulaic) Payout: Corporate NEOs | 129 | % | |||||||||||||||||||||
| Total Calculated (Formulaic) Payout: HCE (Ms. Dallara) | 111 | % | |||
| ICP Goal | 2021 ICP Goal (Target) | 2021 Actual Plan Performance | Achievement % | Metric Payout Percentage* | Aerospace Weighting | Calculated Payout Percentage | ||||||||||||||||||||
| Adjusted EPS | $7.80 | $8.06 | 103.3 | % | 116.5 | % | 25 | % | 29.1 | % | ||||||||||||||||
| Total Honeywell Free Cash Flow | $5.30 billion | $5.73 billion | 108.1 | % | 140.5 | % | 25 | % | 35.1 | % | ||||||||||||||||
| AERO Income Contribution | $2.462 billion | $2.403 billion | 97.6 | % | 94.0 | % | 25 | % | 23.5 | % | ||||||||||||||||
| AERO Free Cash Flow | $2.511 billion | $2.343 billion | 93.3 | % | 83.3 | % | 25 | % | 20.8 | % | ||||||||||||||||
| Total Calculated (Formulaic) Payout: AERO (Mr. Madsen) | 109 | % | ||||||||||||||||||||||||
|
| | 61 | |||||||||||||
|
IICP INDIVIDUAL QUALITATIVE PORTION (20% OF TARGET AWARD)
 | |||||||||||
Mr. Adamczyk – Qualitative Considerations • –Innovated quickly, introducing several healthy solutions offerings to help the world safely navigate through the COVID-19 pandemic. For example, the Company enabled employers to manage occupancy levels and track vaccination status by deploying newly acquired Honeywell Sine software, leading to –Deployed supply chain automation capabilities to organize and conduct mass vaccination events at Bank of –Managed through supply chain challenges and mitigated sales risk by deploying digital tools to manage impact of shortages, by proactively identifying part substitutions, and by reengineering products with alternative components. –Implemented swift pricing adjustments to combat the •Revitalized Honeywell's operating system into Honeywell Accelerator, providing a centralized source of educational and training materials and best practices designed to further enhance the way we manage, govern, and operate the business day-to-day. •Under Mr. growth. •Further advanced •Effectively deployed $8.5 billion of capital to enhance years. • •Completed the combination of Honeywell Quantum Solutions and Cambridge Quantum Computing to •Recognized as one of •
| |||||||||||
DARIUS ADAMCZYK Chairman and Chief Executive Officer | |||||||||||
–Public commitment to achieving carbon neutral facilities and operations by 2035. –>60% of –~60% of –An award-winning global citizenship initiative, including STEM (science, technology, engineering, and math) education as well as focus on | –An inclusion and diversity program ingrained in –Increased representation of women and people of color over the last three years. –Ensuring that Honeywell has zero tolerance for discrimination or a hostile work environment.
| ||||||||||
|
|
| ||||
| |||||||||||
|
|
|
|
| |
| 2022 | |||||||||||
|
 | ||||||||
Mr. Lewis – Qualitative Considerations •Under Mr. Lewis’s leadership, Honeywell met or exceeded external financial commitments: 4% organic sales growth, 60 basis points of margin expansion, $5.7 billion of free cash flow. •Continued to lead Honeywell's crisis management process and team through the prolonged pandemic. •Mobilized the organization to respond to inflationary pressures; took decisive actions to increase price by over $1.1 billion resulting in 50 basis points of margin expansion from price, net of inflation; refined pricing measurement and operating system; validated accuracy of price reporting through targeted audits. •Maintained fixed cost discipline during recovery with 100 basis points of improvement on a percent of sales basis; fixed costs reduced by $1.3 billion from pre-pandemic (2019) levels, while investing for growth. •Furthered Honeywell Digital initiatives delivering over $500 million in benefits across gross margin, productivity, and working capital. •Deployed $8.5 billion of capital to share repurchases, dividends, capital expenditures, and M&A, including deploying more than $1.6 billion towards the acquisitions of Sparta Systems, Fiplex, and Performix and the creation of Quantinuum. •Drove working capital improvements across the company resulting in a 1.9 turn improvement vs. prior year. •Issued $2.5 billion of debt at attractive long-term interest rates to further strengthen our balance sheet. •Executed effective investor communications to represent Honeywell’s performance, and managed ratings agency relationships, protecting Honeywell's strong credit rating. •Co-sponsored the Diversity Career Advancement Program which focuses on developing diverse leaders through training and development opportunities and expansion of networks for promotional opportunities. | ||||||||
GREGORY P. LEWIS Senior Vice President,
Financial Officer | ||||||||
 | ||||||||
Ms. Madden – Qualitative Considerations • •Championed Honeywell’s ESG and communities. •
•Further refined the strategic Center of Excellence (COE) for Compliance, increasing productivity in risk assessment and risk management. Successfully negotiated the Export Consent Agreement with the State Department. Implemented the Consent Agreement management team and process and appointed a new Export leader. Effectively built relationships with State Department, independent monitor, and company leadership on the Export Consent Agreement plan and support required. •Created renewed focus on mergers and acquisitions and Honeywell Ventures by establishing new leadership on both teams and new structures designed to drive more robust strategic pipeline development. Closed the acquisitions of Sparta Systems, Fiplex, and Performix, created Quantinuum, and completed nine venture stage investments – a total of over $1.6 billion deployed on M&A. Divested the retail footwear business and announced the agreement to acquire US Digital Designs. • •Achieved positive resolution of contingencies matters. •
| ||||||||
ANNE T. MADDEN Senior Vice President, General Counsel | ||||||||
|
|
| |
| ||||||||||
|
 | ||||||||
Ms. Dallara – Qualitative Considerations • •Successfully completed the acquisition and integration of Sparta Systems, opening the Life Sciences vertical to HCE. Delivered double-digit growth in Sparta and positioned the business to be earnings accretive in 2022. Also successfully completed the acquisition and integration of Sine Group, leading Sine to become the benchmark employee experience application for helping customers in their return-to-work efforts. Oversaw the continued workforce expansion of these businesses. • •Pioneered the Operational Technology •Deployed a centralized AI Advanced analytics platform, “Forge Insights”, accelerating digital transformation for Honeywell
| ||||||||
QUE THANH DALLARA President and
Chief Executive Officer, Honeywell Connected Enterprise (HCE) | ||||||||
 | ||||||||
Mr. •Delivered strong Aerospace financial performance including point to an historical high of 27.7%. • •Successfully led multiple key urban air mobility / unmanned aerial systems (UAM / UAS) pursuits including wins •Led the
$25 billion over the next 30 years, and is the largest single program ever won at Honeywell Aerospace. •
• •Improved our operational quality performance by 35% to an all-time best performance of 1,162 ppm or 99.88% delivered quality. •Improved Airbus airline rating scores by 15% (versus average supplier improvement of 10%), with our APU business in the top quartile of all suppliers, as judged by global •Improved Boeing airline rating scores by 12% placing Honeywell #2 out of •Launched important STEM-focused community engagement activities with Chicanos Por La Causa, the Arizona
• | ||||||||
MICHAEL R. MADSEN President and Chief Executive Officer, Aerospace (AERO) | ||||||||
| |
| 2022 | |||||||||||
|
IAPPROVED ICP PAYOUT AMOUNTS
Formulaic Portion(1) | + |
Qualitative Portion(2) | = | Total Individual ICP Payout Percentage | × | Target 2019 ICP Award Amount(5) | = | Actual 2019 ICP Award (rounded) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Attainment | × | Weight | Payout% | Attainment | x | Weight% | Payout% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk |
| 131.5% |
|
| 80% |
|
| 105.2% |
|
| 200% |
|
| 20% |
|
| 40% |
|
| 145.2% |
|
| $2,800,000 |
|
| $4,065,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis |
| 131.5% |
|
| 80% |
|
| 105.2% |
|
| 175% |
|
| 20% |
|
| 35% |
|
| 140.2% |
|
| $ 752,932 |
|
| $1,056,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Mr. James |
| 131.5% |
|
| 80% |
|
| 105.2% |
|
| 100% |
|
| 20% |
|
| 20% |
|
| 125.2% |
|
| $ 795,123 |
|
| $ 996,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden | 131.5% |
| 80% |
|
| 105.2% |
|
| 200% |
|
| 20% |
|
| 40% |
|
| 145.2% |
|
| $ 759,027 |
|
| $1,102,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Gautam |
| 112.5% | (3) |
| 80% |
|
| 90.0% |
| 175% |
| 20% |
|
| 35% |
|
| 125.0% |
|
| $ 780,123 |
|
| $ 976,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Mahoney |
| 134.9% | (4) |
| 80% |
|
| 107.9% |
|
| 175% |
|
| 20% |
|
| 35% |
|
| 142.9% |
|
| $1,176,088 |
|
| $1,681,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| 2019 Base Salary(a) | x | Individual Target ICP Award % | = | Target 2019 ICP Award Amount | ||||||||||||||||
Mr. Adamczyk |
| $1,600,000 |
|
| 175 | % |
| $2,800,000 |
| |||||||||||
Mr. Lewis |
| $ 752,932 |
| 100 | % |
| $ 752,932 |
| ||||||||||||
Mr. James |
| $ 795,123 |
| 100 | % |
| $ 795,123 |
| ||||||||||||
Ms. Madden |
| $ 759,027 |
|
| 100 | % |
| $ 759,027 |
| |||||||||||
Mr. Gautam |
| $ 780,123 |
|
| 100 | % |
| $ 780,123 |
| |||||||||||
Mr. Mahoney |
| $1,022,685 |
|
| 115 | % |
| $1,176,088 |
| |||||||||||
|
Formulaic Portion(1) | + | Qualitative Portion(2) | = | Total Individual ICP Payout Percentage | x | Target 2021 ICP Award Amount(5) | = | Actual 2021 ICP Award (rounded) | |||||||||||||||||||||||||||||||||||||||||||||
| Attainment | x | Weight | Payout % | Attainment | x | Weight% | Payout % | ||||||||||||||||||||||||||||||||||||||||||||||
| Mr. Adamczyk | 129 | % | 80 | % | 103.2 | % | 150 | % | 20 | % | 30 | % | 133.2 | % | $ | 2,932,328 | $ | 3,910,000 | |||||||||||||||||||||||||||||||||||
| Mr. Lewis | 129 | % | 80 | % | 103.2 | % | 150 | % | 20 | % | 30 | % | 133.2 | % | $ | 830,493 | $ | 1,107,000 | |||||||||||||||||||||||||||||||||||
| Ms. Madden | 129 | % | 80 | % | 103.2 | % | 150 | % | 20 | % | 30 | % | 133.2 | % | $ | 869,458 | $ | 1,159,000 | |||||||||||||||||||||||||||||||||||
Ms. Dallara (3) | 111 | % | 80 | % | 88.8 | % | 150 | % | 20 | % | 30 | % | 118.8 | % | $ | 676,466 | $ | 804,000 | |||||||||||||||||||||||||||||||||||
Mr. Madsen (4) | 109 | % | 80 | % | 87.2 | % | 125 | % | 20 | % | 25 | % | 112.2 | % | $ | 737,052 | $ | 827,000 | |||||||||||||||||||||||||||||||||||
2021 Applicable Base Salary (a) | x | Individual Target ICP Award % | = | Target 2021 ICP Award Amount | |||||||||||||
| Mr. Adamczyk | $1,675,616 | 175 | % | $2,932,328 | |||||||||||||
| Mr. Lewis | $830,493 | 100 | % | $830,493 | |||||||||||||
| Ms. Madden | $869,458 | 100 | % | $869,458 | |||||||||||||
| Ms. Dallara | $676,466 | 100 | % | $676,466 | |||||||||||||
| Mr. Madsen | $737,052 | 100 | % | $737,052 | |||||||||||||
 | |||||
Grants of LTI awards to the CEO and Other NEOs in 2021 reflect a consistent mix of 50% in Performance Stock Units, 35% in stock options, and 15% in Restricted Stock Units | |||||
Notice and Proxy Statement | 2022 | | 65 | |||||||||
•The relative value of long-term incentive awards granted to comparable named executive officers at the Compensation Peer Group companies.I20192021 LTI awards to the NEOs, the MDCC (or, in the case of Mr. Adamczyk, the independent members of the full Board) determined a total annual LTI (Total LTI) value to be awarded and then allocated the award between PSUs, RSUs, and stock options based on the mix proportions described above. Each of the three elements and the respective values awarded to each NEO are described in detail below.
Any changes in•Scope of responsibilities and complexity of the scope of responsibilities.
•The senior executive development and succession plan.
•Each NEO’s leadership impact and expected future contribution toward the overall success of Honeywell.
|
|
|
|
IPERFORMANCE STOCK UNITS
2019-2021 Performance Plan
The Performance Plan is a share-based, long-term incentive plan first introduced in 2017 in response to shareowner feedback.
| 3-Year Cumulative Revenue | 3-Year Average ROI | |||||||||||||
 | (25%) |  | (25%) | |||||||||||
•Measures the effectiveness of the Company’s organic growth strategies, including new product introduction and marketing and sales effectiveness, as well as projected growth in our end markets. •Adjusted at measurement to exclude the impact of corporate transactions during the period (e.g., acquisitions and divestitures) and fluctuations in foreign currency rates. | •Focuses leadership on making investment decisions that deliver profitable growth. •Adjusted at measurement to exclude the impact of corporate transactions during the period and the impact of pensions. Results will not be adjusted for foreign currency changes over the cycle. | |||||||||||||
| 3-Year Average Segment Margin Rate | 3-Year Relative TSR | |||||||||||||
 | (25%) |  | (25%) | |||||||||||
•Focuses executives on driving continued operational improvements and delivering synergies from recent corporate actions and prior period acquisitions. •Adjusted at measurement to exclude the impact of corporate transactions during the period. Results will not be adjusted for foreign currency changes over the cycle. | •Measures Honeywell’s cumulative TSR relative to the 2021 Compensation Peer Group over a three-year performance period of January 1, 2021 – December 31, 2023. •The beginning point for TSR determination (all companies) will be based on an average using the first 30 trading days of the performance period. The ending point will be based on an average using the last 30 trading days of the performance period. | |||||||||||||
| | Proxy Statement | ||||||
|
| |||||||
|
| |||||||
|
| |||||||
In February 2019, the MDCC established the performance goals for the 2019-2021 performance period.
years covered by the award.
| Corporate NEOs | ||
 | ||
| AERO | HCE | ||||
 |  | ||||
3-Year Cumulative Revenue | % of PSUs | 3-Year Average Segment Margin Rate | % of PSUs | 3-Year Average ROI | % of PSUs | 3-Year Relative Total Shareowner Return | % of PSUs | Total% of PSUs | ||||||||||||||||||||||||||||
No payout |
| < $108,543 |
|
| 0% | �� |
| < 20.7% |
|
| 0% |
|
| < 23.4% |
|
| 0% |
|
| < 35th Percentile |
|
| 0% |
|
| 0% |
| |||||||||
| — |
|
| — |
|
| — |
| 35th Percentile | (1) |
| 6.25% |
|
| 6.25% |
| ||||||||||||||||||||
Threshold |
| $108,543 |
|
| 12.5% |
|
| 20.7% |
|
| 12.5% |
|
| 23.4% |
|
| 12.5% |
|
| 40th Percentile |
|
| 12.5% |
|
| 50% |
| |||||||||
Target |
| $112,480 |
|
| 25% |
|
| 21.2% |
|
| 25% |
|
| 24.2% |
|
| 25% |
|
| 50th Percentile |
|
| 25% |
|
| 100% |
| |||||||||
| $114,449 |
|
| 37.5% |
|
| 21.5% |
|
| 37.5% |
|
| 24.6% |
|
| 37.5% |
|
| 60th Percentile |
|
| 37.5% |
|
| 150% |
| ||||||||||
Maximum |
| >= $116,417 |
|
| 50% |
|
| >= 21.7% |
|
| 50% |
|
| >= 24.9% |
|
| 50% |
|
| >= 75th Percentile |
|
| 50% |
|
| 200% |
| |||||||||
| |||||||||||
Notice and Proxy Statement | 2022 | | 67 | |||||||||
| Threshold | Target | 150% Payout | Maximum | ||||||||||||||||||||||||||||
| 3-Year Cumulative Revenue ($M) |  | TOTAL MAXIMUM PAYOUT CAPPED AT 200% | |||||||||||||||||||||||||||||
Segment Margin Rate |  |
|
| ||||||||||||||||||||||||||||
% of PSUs earned for each metric | |||||||||||||||||||||||||||||
| Threshold | Target | 150% Payout | Maximum | ||||||||||||||||||||||||||
3-Year Relative TSR Percentile (1) |  | ||||||||||||||||||||||||||||
| % of PSUs earned | |||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||
2019-2021
Performance Plan awards wereStock Units granted to the NEOs for the 2019-20212021-2023 performance period:
NEO | # of Performance Units(1) | Grant Date Value(2) | ||||||
Mr. Adamczyk |
| 41,400 |
| $ | 6,638,490 |
| ||
Mr. Lewis |
| 11,000 |
| $ | 1,763,850 |
| ||
Mr. James |
| 12,500 |
| $ | 2,004,375 |
| ||
Ms. Madden |
| 11,000 |
| $ | 1,763,850 |
| ||
Mr. Gautam |
| 12,600 |
| $ | 2,020,410 |
| ||
Mr. Mahoney |
| 15,926 |
| $ | 3,050,148 |
| ||
|
|
period, along with their respective grant date value:
| NEO | Target # of PSUs (1) | Grant Date Value(2) | |||||||||
| Mr. Adamczyk | 35,300 | $ | 7,502,309 | ||||||||
| Mr. Lewis | 11,100 | $ | 2,359,083 | ||||||||
| Ms. Madden | 11,100 | $ | 2,359,083 | ||||||||
| Ms. Dallara | 9,200 | $ | 1,955,276 | ||||||||
| Mr. Madsen | 7,400 | $ | 1,572,722 | ||||||||
2017-2019
| 68 | | Notice and Proxy Statement | 2022 | ||||||
due to the extraordinary impacts of the COVID-19 pandemic, which rendered the original financial targets unattainable within months of them being set in February 2020. This change was necessary to correct a misalignment between the pay opportunity and the range of performance reasonably attainable for this cycle. No changes were made to the original three-year Relative TSR goal. The recast financial targets were fully disclosed in the 2021 proxy statement. Coincident with this change, the upside total payout opportunity for this performance cycle was reduced by 40%. This action was reviewed with shareowners during 2021 outreach meetings and broadly viewed as appropriate under the circumstances, with recognition that adverse pandemic-related impacts on incentive plans were not unique to Honeywell and that thoughtful recalibrations were appropriate in industries hardest hit by the COVID-19 pandemic.
| NEO | 2020-2022 Performance Stock Units Modification (1) | ||||
| Mr. Adamczyk | $4,754,160 | ||||
| Mr. Lewis | $1,469,700 | ||||
| Ms. Madden | $1,469,700 | ||||
| Ms. Dallara | $1,337,108 | ||||
| Mr. Madsen | $898,594 | ||||
Notice and Proxy Statement | 2022 | | 69 | |||||||||
| 2019-2021 SUMMARY | ||
•Three-year cumulative Shareowner return of 55.9% (61st percentile vs. relevant Compensation Peer Group) •Financial metric attainment impacted by COVID-19 (three-year growth goals set pre-pandemic) •MDCC approved 2019-2021 PSU payout = 87% of target (CEO and Corporate officers) | ||
For the NEOs who2021 were granted to executive officers in 2017 at the time of grant (Messrs. Adamczyk, James, Gautam, and Mahoney), 2017-2019 Performance Plan awards were made in the form of PSUs, with 75% percent of their earned award basedPerformance Stock Units (PSUs). This applied to all NEOs except Mr. Madsen, who was not an executive officer in February 2019. Three-year performance goals were established for cumulative revenue, average segment margin rate, average return on performance against internal financial goals,investment (ROI) and 25% of the earned award based on Honeywell’s TSR relative to itsthe 2019 Compensation Peer GroupGroup. Each of these goals was equally weighted (25% each). The target performance levels were established before the COVID-19 pandemic as follows: 3.1% compound annual revenue growth, 80 basis points of segment margin expansion, and 140 basis points of ROI expansion. Goals were developed for each of the three years, with the first year aligned to the midpoint of external guidance, and growth rates for the second and third years in the cycle aligned with Honeywell’s long-range plan. Target performance levels were aimed at driving year-over-year growth and meaningful improvements in Honeywell operations over the three-year period.
three-year period and the degree of impact from the pandemic.
| Total Honeywell | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weight | Weighted Payout % | ||||||||||||||||||||||
| 3-Year Cumulative Revenue ($M) | $108,543 | $112,480 | $116,417 | $103,775 | 0 | % | 25 | % | 0 | % | |||||||||||||||||||
| 3-Year Average Segment Margin Rate | 20.7% | 21.2% | >= 21.7% | 20.8 | % | 60 | % | 25 | % | 15 | % | ||||||||||||||||||
| 3-Year Average ROI | 23.4% | 24.2% | >= 24.9% | 22.1 | % | 0 | % | 25 | % | 0 | % | ||||||||||||||||||
| 3-Year Relative TSR | 35th Percentile | 50th Percentile | >= 75th Percentile | 61st Percentile | 154 | % | 25 | % | 39 | % | |||||||||||||||||||
| Total PSU Calculated Percentage–Corporate NEOs (Messrs. Adamczyk and Lewis, and Ms. Madden)–Based 100% on performance against Total Honeywell goals | 54 | % | |||||||||||||||||||||||||||
Total PSU Calculated Percentage–HCE Business Unit (Ms. Dallara)–Financial metrics portion based 67% on Total Honeywell and 33% on Business Unit goals(2) | 71 | % | |||||||||||||||||||||||||||
(1)Consistent with goal setting parameters, revenue was adjusted to exclude the impact of corporate transactions and fluctuations in foreign currency. Segment margin was adjusted to exclude the impact of corporate transactions. ROI was adjusted to exclude the impact of corporate transactions and the impact of pension income and asset fluctuations. | |||||||||||||||||||||||||||||
(2)Business Unit goals are based on the business unit’s performance on three-year revenue and segment margin performance. | |||||||||||||||||||||||||||||
| 70 | | Notice and Proxy Statement | 2022 | ||||||
| Company Name | 3-Year TSR(1) | 3-Year Relative Percentile Ranking | ||||||
| Johnson Controls International plc | 157.2 | % | 100 | % | ||||
| Eaton Corporation plc | 155.0 | % | 92 | % | ||||
| Deere & Company | 130.1 | % | 85 | % | ||||
| Illinois Tool Works, Inc. | 93.8 | % | 77 | % | ||||
| Caterpillar, Inc. | 66.5 | % | 69 | % | ||||
| Emerson Electric Co. | 56.6 | % | 62 | % | ||||
| General Electric Company | 36.3 | % | 54 | % | ||||
| Raytheon Technologies Corp. | 34.0 | % | 46 | % | ||||
| Lockheed Martin Corporation | 30.5 | % | 38 | % | ||||
| General Dynamics Corporation | 29.4 | % | 31 | % | ||||
| 3M Company | (0.6) | % | 23 | % | ||||
| Phillips 66 | (12.0) | % | 15 | % | ||||
| Schlumberger Limited | (22.2) | % | 8 | % | ||||
| The Boeing Company | (43.4) | % | 0 | % | ||||
| 2019 Compensation Peer Group Median | 35.1 | % | ||||||
| Honeywell International Inc. | 55.9 | % | 61 | % | ||||
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Based on their assessmentThe following table displays the 2019-2021 PSU calculation payout for Corporate NEOs with the adjusted weighting, as determined by the MDCC:
| Total Honeywell | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weight (adjusted) | Weighted Payout % | ||||||||||||||||||||||
| 3-Year Cumulative Revenue ($M) | $108,543 | $112,480 | $116,417 | $103,775 | 0 | % | 16.67 | % | 0 | % | |||||||||||||||||||
| 3-Year Average Segment Margin Rate | 20.7% | 21.2% | >= 21.7% | 20.8 | % | 60 | % | 16.67 | % | 10 | % | ||||||||||||||||||
| 3-Year Average ROI | 23.4% | 24.2% | >= 24.9% | 22.1 | % | 0 | % | 16.67 | % | 0 | % | ||||||||||||||||||
| 3-Year Relative TSR | 35th Percentile | 50th Percentile | >= 75th Percentile | 61st Percentile | 154 | % | 50 | % | 77 | % | |||||||||||||||||||
| Total PSU Calculated Percentage–Corporate NEOs (Messrs. Adamczyk and Lewis, and Ms. Madden)–Based 100% on performance against Total Honeywell goals | 87 | % | |||||||||||||||||||||||||||
| Total PSU Calculated Percentage–HCE Business Unit (Ms. Dallara)–Financial metrics portion based 67% on Total Honeywell and 33% on Business Unit goals | 99 | % | |||||||||||||||||||||||||||
(1)Consistent with goal setting parameters, revenue was adjusted to exclude the impact of corporate transactions and fluctuations in foreign currency. Segment margin was adjusted to exclude the impact of corporate transactions. ROI was adjusted to exclude the impact of corporate transactions and the impact of pension income and asset fluctuations. | |||||||||||||||||||||||||||||
2017-2019competitive harm for Honeywell.
Total Honeywell (HON) | Weight | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weighted Payout % | |||||||||||||||||||||||||||||||||||||
3-Year Cumulative Revenue ($M) |
| 25% |
|
| $104,942 |
|
| $108,748 |
|
| >= $112,554 |
|
| $116,503 |
|
| 200% |
|
| 50.0% |
| |||||||||||||||||||||||
3-Year Average Segment Margin Rate |
| 25% |
|
| 19.1% |
|
| 19.6% |
|
| >= 20.1% |
|
| 20.0% |
|
| 180% |
|
| 45.0% |
| |||||||||||||||||||||||
3-Year Average ROI |
| 25% |
|
| 20.5% |
|
| 21.2% |
|
| >= 22.0% |
|
| 24.4% |
|
| 200% |
|
| 50.0% |
| |||||||||||||||||||||||
3-Year Relative TSR |
| 25% |
|
| 35th Percentile |
|
| 50th Percentile |
|
| >= 75th Percentile |
|
| 81st Percentile |
|
| 200% |
|
| 50.0% |
| |||||||||||||||||||||||
Total Earned Payout Percentage—Corporate NEOs (Messrs. Adamczyk and James)—Financial metrics based 100% on HON |
|
| 195% |
| ||||||||||||||||||||||||||||||||||||||||
Total Earned Payout Percentage—PMT Business Unit (Mr. Gautam)—Financial metrics portion based 50% on HON and 50% on Business Unit goals(2) |
|
| 183% |
| ||||||||||||||||||||||||||||||||||||||||
Total Earned Payout Percentage—Aero Business Unit (93% of Mr. Mahoney)—Financial metrics based 50% on HON and 50% on Business Unit goals(2) |
|
| 198% |
| ||||||||||||||||||||||||||||||||||||||||
(1) Revenue adjusted to exclude the impact of corporate transactions and fluctuations in foreign currency. Segment margin adjusted to exclude the impact of corporate transactions. ROI adjusted to exclude the impact of corporate transactions, impact of pensions, repositioning charges in excess of the plan, impact of U.S. tax reform, and the impact from the adoption of a share-based compensation accounting standard update. |
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(2) Business Unit goals are based on the Business Unit’s performance on3-year revenue, segment margin and ROI metrics. |
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Lewis and Mses. Madden and Dallara)
NEO | 2017-2019 PSUs @ Target (1) | Total Earned Payout % | Total PSUs Earned | |||||||||
Mr. Adamczyk |
| 44,131 |
|
| 195.0 | % |
| 86,056 |
| |||
Mr. James |
| 14,344 |
|
| 195.0 | % |
| 27,971 |
| |||
Mr. Gautam |
| 13,240 |
|
| 183.0 | % |
| 24,229 |
| |||
Mr. Mahoney |
| 18,757 |
|
| 197.8 | %(2) |
| 37,102 |
| |||
| NEO | 2019-2021 PSUs at Target (1) | Total Payout % | Total 2019-2021 PSUs Earned | ||||||||
| Mr. Adamczyk | 43,640 | 87 | % | 37,967 | |||||||
| Mr. Lewis | 11,595 | 87 | % | 10,088 | |||||||
| Ms. Madden | 11,595 | 87 | % | 10,088 | |||||||
| Ms. Dallara | 8,855 | 99 | % | 8,766 | |||||||
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|
2017-20192022.
| Weight | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weighted Payout % | ||||||||||||||||||||||||||||||||||||||
3-Year Cumulative Revenue ($M) |
| 33.3% |
|
| $104,942 |
|
| $108,748 |
|
| >= $112,554 |
|
| $116,503 |
|
| 200% |
|
| 66.7% |
| |||||||||||||||||||||||
3-Year Average Segment Margin Rate |
| 33.3% |
|
| 19.1% |
|
| 19.6% |
|
| >= 20.1% |
|
| 20.0% |
|
| 180% |
|
| 60.0% |
| |||||||||||||||||||||||
3-Year Average ROI |
| 33.3% |
|
| 20.5% |
|
| 21.2% |
|
| >= 22.0% |
|
| 24.4% |
|
| 200% |
|
| 66.7% |
| |||||||||||||||||||||||
Total Earned Award Percentage—Total Honeywell—Corporate NEOs (Mr. Lewis and Ms. Madden) |
| 193% | ||||||||||||||||||||||||||||||||||||||||||
| |||||
| Eligible Participants | •Non-Officers (Executives) | ||||
| Form of Award | •PCUs denominated at $100 per unit and settled in cash | ||||
| Mix of Goals | •Equally weighted between Total Honeywell and Business Unit goals (50% Total Honeywell and 50% Aerospace) | ||||
| Measurement and Goal Weighting | •Measurement for three, single years, 2019, 2020 and 2021*, with the total payout factor equal to –1-Year Cumulative Revenue (for each of 2019, 2020, and –1-Year Average Segment Margin Rate (for each of –1-Year Average ROI (for each of 2019, 2020, and 2021) | ||||
| Payout Cap | •120% of target | ||||
| Stock Performance Goal | •Not applicable | ||||
| |
| 2022 | |||||||||||
|
The following table displays the results of the 2019-2021 Performance Plan calculation for all Aerospace business unit executives (non-officer) who received PCUs in 2019 (including Mr. Madsen):
AERO Performance Goals (1) | 2019 Performance | 2020 Performance (Pandemic Impacted) | 2021 Performance | 3-Year Average Performance(2) | Weight | Weighted Payout % | ||||||||||||||||||||
| Revenue | 163 | % | 0 | % | 82% | 81.7 | % | 33.33 | % | 27 | % | |||||||||||||||
| Segment Margin Rate | 180 | % | 100 | % | 160% | 146.7 | % | 33.33 | % | 49 | % | |||||||||||||||
| ROI | 163 | % | 0 | % | 50% | 71.0 | % | 33.33 | % | 24 | % | |||||||||||||||
| Total Earned Cash Unit Payout Percentage – AERO executives (non-officer), includes Mr. Madsen as non-officer in 2019 | 100 | % | ||||||||||||||||||||||||
NEO | 2017-2019 Performance Cash Units | Value Per Unit | Total Earned Award Percentage | Total Cash Award Earned | ||||||||||||
Mr. Lewis |
| 4,200 |
| $ | 100 |
|
| 193% |
| $ | 810,600 |
| ||||
Ms. Madden |
| 4,500 |
| $ | 100 |
|
| 193% |
| $ | 868,500 |
| ||||
Earned awardsby Mr. Madsen:
| NEO | 2019-2021 Performance Cash Units at Target | Value Per Unit | Total Earned Award % | Total 2019-2021 Performance Cash Award Earned | ||||||||||
| Mr. Madsen | 5,110 | $100 | 100 | % | $511,000 | |||||||||
2016 Performance Restricted Stock Unit Assessment
As one2019. The MDCC considered this 2019-2021 cash unit award as part of Mr. Madsen's 2019 total annual direct compensation (in the initial changes made to the executive compensation program in response to shareowner feedback in 2016, in lieu of biennial time-based RSUs issued in the past, certain CEO Staff Officers were granted performance-based restricted stock units (Performance RSUs) in July 2016 with the payout based 100% on Honeywell’s relative TSR performance against the Compensation Peer Group over a three-year period ending July 31, 2019.
Payouts were determined basedyear it was granted), which differs from how it is reported on the following payout matrix:
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The payout percentage earned for intermediate relative TSR performance levels are interpolated between points on the matrix shown. The beginning point for TSR determination is based on average TSR for the first 30 trading days of the three-year measurement period. The ending point based on average TSR for the last 30 trading days of the measurement period.
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|
In JulyMr. Madsen became an Executive Officer in October 2019, the MDCC assessed the Company’s relative TSR performance and determined the payout percentage for the 2016 Performance RSUs based on the following relative TSR ranking.
Company Name | 3-Year TSR(1) | Relative Ranking | ||||||||||
The Boeing Company |
| 202.87% |
|
| 100.00% |
| ||||||
Deere & Company |
| 108.96% |
|
| 93.30% |
| ||||||
Caterpillar, Inc. |
| 77.89% |
|
| 86.60% |
| ||||||
Ingersoll-Rand plc |
| 73.23% |
|
| 80.00% |
| ||||||
Emerson Electric Co. |
| 42.11% |
|
| 73.30% |
| ||||||
Eaton Corporation plc |
| 35.33% |
|
| 66.60% |
| ||||||
Raytheon Company |
| 35.18% |
|
| 60.00% |
| ||||||
Illinois Tool Works, Inc. |
| 35.06% |
|
| 53.30% |
| ||||||
Phillips 66 |
| 34.17% |
|
| 46.60% |
| ||||||
United Technologies Corporation |
| 31.04% |
|
| 40.00% |
| ||||||
Lockheed Martin Corporation |
| 30.73% |
|
| 33.30% |
| ||||||
3M Company |
| 25.22% |
|
| 26.60% |
| ||||||
General Dynamics Corporation |
| 19.22% |
|
| 20.00% |
| ||||||
Johnson Controls, International plc |
| -3.15% |
|
| 13.30% |
| ||||||
Schulumberger Limited |
| -39.89% |
|
| 6.60% |
| ||||||
General Electric Company |
| -65.12% |
|
| 0.00% |
| ||||||
Honeywell International Inc. |
| 55.09% |
|
| 76.10% |
| ||||||
|
|
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|
For the 2016 Performance RSUs, the following individualhe has received PSU awards were earned by those NEOs who received a Performance RSU grant in 2016: Mr. Adamczyk, 18,423 shares; Mr. James, 13,265 shares; Mr. Gautam, 11,162 shares; and Mr. Mahoney, 33,495 shares. Mr. Lewis and Ms. Madden did not receive Performance RSUs, as they were not officers of the Company at the time of grant in 2016.
A portion of the earned shares from the 2016 Performance RSUs are subject to additional time vesting. For Messrs. Adamczyk and James, onlyone-third of the earned RSUs vested in 2019, with the remainingtwo-thirds vesting equally in July 2021 and 2023. For Messrs. Gautam and Mahoney, half of the earned RSUs vested in 2019 with remaining half vesting in July 2021. Upon vesting, net shares must be retained for an additionalone-year holding period, in accordance with the officer stock ownership guidelines. The portion of the Performance RSUs that vested and were paid in 2019 is included in the numbers recorded on the Option Exercises and Stock Vested – Fiscal Year 2019 table on page 75. The portion of the Performance RSUs that remain subject to additional vesting provisions are included on the Outstanding Equity Awards at 2019 FiscalYear-End table on page 73.
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|
ISTOCK OPTIONS
company using a Black-Scholes valuation method.
NEO | # of Stock Options Awarded (1) | Grant Date Value (2) | ||||||
Mr. Adamczyk |
| 215,300 |
| $ | 4,635,409 |
| ||
Mr. Lewis |
| 56,800 |
| $ | 1,222,904 |
| ||
Mr. James |
| 65,000 |
| $ | 1,399,450 |
| ||
Ms. Madden |
| 56,800 |
| $ | 1,222,904 |
| ||
Mr. Gautam |
| 65,600 |
| $ | 1,412,368 |
| ||
Mr. Mahoney |
| 99,100 |
| $ | 2,133,623 |
| ||
| NEO | # of Stock Options (1) | Grant Date Value (2) | |||||||||
| Mr. Adamczyk | 163,500 | $ | 5,248,350 | ||||||||
| Mr. Lewis | 51,200 | $ | 1,643,520 | ||||||||
| Ms. Madden | 51,200 | $ | 1,643,520 | ||||||||
| Ms. Dallara | 42,500 | $ | 1,364,250 | ||||||||
| Mr. Madsen | 34,100 | $ | 1,094,610 | ||||||||
| |||||||||||
Notice and Proxy Statement | 2022 | | 73 | |||||||||
|
I
RSUs granted to Mr. Adamczyk, and all the otherOther NEOs, vest 33%, 33%, 34% on the second, fourth, and sixth anniversaries of the grant date, respectively. This extended vesting period is designed to strengthen retention.
NEO | Target # of RSUs (1)(2) | Grant Date Value (3) | ||||||
Mr. Adamczyk |
| 12,800 |
| $ | 1,974,016 |
| ||
Mr. Lewis |
| 3,400 |
| $ | 524,348 |
| ||
Mr. James |
| 3,800 |
| $ | 586,036 |
| ||
Ms. Madden |
| 3,400 |
| $ | 524,348 |
| ||
Mr. Gautam |
| 3,900 |
| $ | 601,458 |
| ||
Mr. Mahoney |
| 5,900 |
| $ | 909,898 |
| ||
|
|
|
| NEO | # of RSUs (1)(2) | Grant Date Value (3) | |||||||||
| Mr. Adamczyk | 11,000 | $ | 2,229,920 | ||||||||
| Mr. Lewis | 3,400 | $ | 689,248 | ||||||||
| Ms. Madden | 3,400 | $ | 689,248 | ||||||||
| Ms. Dallara | 2,800 | $ | 567,616 | ||||||||
| Mr. Madsen | 2,300 | $ | 466,256 | ||||||||
|
|
|
I
I84.
Executive officers
I87.
In 2019, Honeywell moved its corporate headquarters from Morris Plains, New Jersey, to Charlotte, North Carolina, and required many Corporate employees to relocate, including our Corporate NEOs. In connection with this move, all affected employees were eligible for relocation benefits, which included assistance in selling their home in New Jersey (includingloss-on-sale coverage, subject to a cap), purchasing a new home in North Carolina, moving household goods and other transitional services. As these relocation-related costs are considered taxable wages to the employee under IRS rules, the Company provided a taxgross-up so that employees were not negatively impacted by the Company’s decision to relocate. Impacted NEOs were eligible for such benefits on the same basis as other executive-level employees.
| |
| 2022 | |||||||||||
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COMPENSATION PRACTICES AND POLICIES
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•Supports the achievement of competitive sales, earnings, and cash performance in variable economic and industry conditions without undue risk; and
•Mitigates the potential to reward risk-taking that may produce short-term results that appear in isolation to be favorable, but that may undermine the successful execution of the Company’s long-term business strategy and destroyadversely impact shareowner value.
RISK OVERSIGHT AND COMPENSATION DESIGN FEATURES
Robust processes for developing strategic and annual operating plans, approval of capital investments, and internal controls over financial reporting and other financial, operational, and compliance policies and practices.
Diversity of the Company’s overall portfolio of businesses with respect to industries and markets served (types, long-cycle / short-cycle), products and services sold, and geographic footprint.
MDCC review and approval of corporate, business, and individual executive officer objectives to ensure that these goals are aligned with the Company’s annual operating and strategic plans, achieve the proper risk/reward balance, and do not encourage unnecessary or excessive risk-taking.
Robust processesfor developing strategic and annual operating plans, approval of capital investments, internal controls over financial reporting, and other financial, operational, and compliance policies and practices. | ||
Diversity of the Company’s overall portfolioof businesses with respect to industries and markets served (types, long-cycle/short-cycle), products and services sold, and geographic footprint. | ||
MDCC review and approvalof corporate, business, and individual executive officer objectives to ensure that these goals are aligned with the Company’s annual operating and strategic plans, achieve the proper risk/reward balance, and do not encourage unnecessary or excessive risk-taking. | ||
•Pay mix between fixed and variable, annual and long-term, and cash and equity compensation is designed to encourage strategies and actions that are in the Company’s long-term best interests;
•Base salaries are positioned to be consistent with executives’ responsibilities, so they are not motivated to take excessive risks to achieve financial security;
•Incentive awards are determined based on a review of a variety of performance indicators, thus diversifying the risk associated with any single performance indicator;
•Design of long-term compensation program rewards executives for driving sustainable, profitable growth for shareowners;
•Vesting periods for equity compensation awards encourage executives to focus on sustained stock price appreciation; and
•Incentive plans are not overly leveraged, withhave maximum payout caps, and have design features that are intended to balance pay for performance with an appropriate level of risk-taking.
Adoption of clawback policies, which provide for the recoupment of incentive compensation paid to senior executives if there is a significant restatement of Company financial results. Clawback provisions in the Company’s current stock plan also allow the Company to cancel sharesexclude unusual or recover gains realized by an executive ifnon-competition ornon-solicitation provisions are violated.
Prohibition on hedging and pledging of shares by our executive officers and directors.
Ownership thresholds in the Company’s stock ownership guidelines for officers that require NEOs to hold shares of common stock equal to four times their current annual base salary (six times for the CEO), as detailed in the Stock Ownership Guidelines.
Officers must also hold 100% of the net shares from vesting of RSUs, the net shares issued from PSUs,infrequently occurring items, extraordinary items, and the net gain shares from option exercises for at least one year.
Clawback policieswhich provide the ability to recoup performance-based incentive awards (both equity and cash-based awards) in the event of misconduct and a restatement of Company financial results. In addition, clawback provisions in the Company’s stock plan and short-term incentive plan allow the Company to cancel shares or recover gains, or payments made, if an executive violates non-competition or non-solicitation provisions. | ||
Prohibition on hedging and pledging of sharesby executive officers and directors. | ||
Ownership thresholdsin the Company’s stock ownership guidelines for officers that require NEOs to hold shares of common stock equal to four times their current annual base salary (six times for the CEO), as detailed in the Stock Ownership Guidelines. | ||
Holding periods in the Company's stock ownership guidelinesrequire that officers must hold 100% of the net shares from vesting of RSUs, the net shares issued from PSUs, and the net gain shares from option exercises for at least one year. | ||
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Named Executive Officers’ Stock Ownership
Notice and Proxy Statement | 2022 | | 75 | |||||||||
| Mr. Adamczyk | Other NEOs (Average) | ||||||||||
 |  | ||||||||||
At37xand 19xbase pay, the value of our Chairman and CEO and our Other NEOs’ shareholdings substantially exceed requirements | High levels of stock ownership reflectlong-term focus and commitmentof the Honeywell executive team | ||||||||||
February 15, 2022.
•The amount of incentive compensation was calculated based upon the achievement of financial results that were subsequently reduced due to a Restatement;
•The senior executive engaged in misconduct; and
•The amount of incentive compensation that would have been awarded to the senior executive had the financial results been properly reported would have been lower than the amount actually awarded.
•Cancel all unexercised options; and
•Recover any gains attributable to options that were exercised, and any value attributable to RSUs and Performance Plan awards (including the former Growth Plan) that were paid, during the period beginning 12 months before and ending two years after the executive officer’s termination of employment.
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We haveHoneywell has entered intonon-competition agreements with our executive officerseach of the NEOs that preclude them from going to work for a competitor for up to two years after termination of employment. The list of competitors and the duration of thenon-competition covenant has been tailored, in each case, to the executive officer’s position and the competitive threat this represents. Because money damages cannot adequately compensate Honeywell for violations of thesenon-competition covenants, we have a full range of equitable remedies at our disposal to enforce these agreements, including the ability to seek injunctive relief.
| 76 | | Notice and Proxy Statement | 2022 | ||||||
2021.
Duncan B. Angove
William S. Ayer
Jaime Chico Pardo (
Clive Hollick
Grace Lieblein
Notice and Proxy Statement | 2022 | | 77 | |||||||||
| Named Executive Officer | Year | Salary | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | Change In Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | SEC Total Compensation(7) | Non-SEC Total Annual Direct Compensation(8) | |||||||||||||||||||||||||||||||||||||||||||||||
Darius Adamczyk Chairman and Chief Executive Officer | 2021 | $ | 1,675,616 | $ | 14,486,389 | $ | 5,248,350 | $ | 3,910,000 | $ | 608,232 | $ | 171,533 | $26,100,120 | $ | 20,566,195 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 1,566,154 | $ | 9,113,476 | $ | 4,898,608 | $ | 2,508,000 | $ | 810,840 | $ | 178,203 | $19,075,281 | $ | 18,086,238 | |||||||||||||||||||||||||||||||||||||||||
| 2019 | $ | 1,600,000 | $ | 8,612,506 | $ | 4,635,409 | $ | 4,065,000 | $ | 748,107 | $ | 864,082 | $20,525,104 | $ | 18,912,915 | |||||||||||||||||||||||||||||||||||||||||
Gregory P. Lewis Senior Vice President, Chief Financial Officer | 2021 | $ | 830,493 | $ | 4,518,031 | $ | 1,643,520 | $ | 1,107,000 | $ | 215,089 | $ | 65,570 | $8,379,703 | $ | 6,629,344 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 753,711 | $ | 2,801,775 | $ | 1,502,982 | $ | 1,460,750 | $ | 254,487 | $ | 57,627 | $6,831,332 | $ | 5,747,468 | |||||||||||||||||||||||||||||||||||||||||
| 2019 | $ | 749,808 | $ | 2,288,198 | $ | 1,222,904 | $ | 1,866,600 | $ | 185,939 | $ | 331,184 | $6,644,633 | $ | 5,316,910 | |||||||||||||||||||||||||||||||||||||||||
Anne T. Madden Senior Vice President, General Counsel | 2021 | $ | 869,458 | $ | 4,518,031 | $ | 1,643,520 | $ | 1,159,000 | $ | 389,020 | $ | 80,362 | $8,659,391 | $ | 6,720,309 | ||||||||||||||||||||||||||||||||||||||||
| 2020 | $ | 825,529 | $ | 2,801,775 | $ | 1,502,982 | $ | 758,000 | $ | 459,798 | $ | 87,544 | $6,435,628 | $ | 5,888,286 | |||||||||||||||||||||||||||||||||||||||||
| 2019 | $ | 757,019 | $ | 2,288,198 | $ | 1,222,904 | $ | 1,970,500 | $ | 399,898 | $ | 69,977 | $6,708,496 | $ | 5,370,121 | |||||||||||||||||||||||||||||||||||||||||
Que Thanh Dallara(1) President and Chief Executive Officer, Honeywell Connected Enterprise | 2021 | $ | 676,466 | $ | 3,860,000 | $ | 1,364,250 | $ | 804,000 | $ | 773 | $ | 52,160 | $6,757,649 | $ | 5,367,608 | ||||||||||||||||||||||||||||||||||||||||
Michael R. Madsen(1) President and Chief Executive Officer, Aerospace | 2021 | $ | 737,052 | $ | 2,937,572 | $ | 1,094,610 | $ | 1,338,000 | $ | 726 | $ | 53,362 | $6,161,322 | $ | 4,697,640 | ||||||||||||||||||||||||||||||||||||||||
| NEO | 2021-2023 Performance Stock Units | Restricted Stock Units | 2020-2022 Performance Stock Unit Modification | Total SEC Reportable Stock Awards | ||||||||||||||||||||||
| Mr. Adamczyk | $ | 7,502,309 | $ | 2,229,920 | $ | 4,754,160 | $ | 14,486,389 | ||||||||||||||||||
| Mr. Lewis | $ | 2,359,083 | $ | 689,248 | $ | 1,469,700 | $ | 4,518,031 | ||||||||||||||||||
| Ms. Madden | $ | 2,359,083 | $ | 689,248 | $ | 1,469,700 | $ | 4,518,031 | ||||||||||||||||||
| Ms. Dallara | $ | 1,955,276 | $ | 567,616 | $ | 1,337,108 | $ | 3,860,000 | ||||||||||||||||||
| Mr. Madsen | $ | 1,572,722 | $ | 466,256 | $ | 898,594 | $ | 2,937,572 | ||||||||||||||||||
| |
| 2022 | |||||||||||
| NEO | 2021 ICP Award | 2019-2021 Performance Plan Cash Award | Total Non-Equity Incentive Plan Compensation | ||||||||
| Mr. Madsen | $827,000 | $511,000 | $1,338,000 | ||||||||
| NEO | Change in Pension Value(a) | NQDC Interest(b) | Total Change in Pension Value and Nonqualified Deferred Compensation Earnings | |||||||||||||||||
| Mr. Adamczyk | $ | 605,743 | $ | 2,489 | $ | 608,232 | ||||||||||||||
| Mr. Lewis | $ | 214,342 | $ | 747 | $ | 215,089 | ||||||||||||||
| Ms. Madden | $ | 331,513 | $ | 57,507 | $ | 389,020 | ||||||||||||||
| Ms. Dallara | $ | — | $ | 773 | $ | 773 | ||||||||||||||
| Mr. Madsen | $ | — | $ | 726 | $ | 726 | ||||||||||||||
| NEO | Matching Contributions(a) | Personal Use of Company Aircraft(b) | Security(c) | Excess Liability Insurance(d) | Executive Physical/ Medical Services (e) | Total Other Compensation | |||||||||||||||||||||||||||||||||||
| Mr. Adamczyk | $ | 117,196 | $ | 43,040 | $ | 1,332 | $ | 1,515 | $ | 8,450 | $ | 171,533 | |||||||||||||||||||||||||||||
| Mr. Lewis | $ | 58,057 | $ | 498 | $ | — | $ | 1,515 | $ | 5,500 | $ | 65,570 | |||||||||||||||||||||||||||||
| Ms. Madden | $ | 60,833 | $ | 12,514 | $ | — | $ | 1,515 | $ | 5,500 | $ | 80,362 | |||||||||||||||||||||||||||||
| Ms. Dallara | $ | 47,319 | $ | — | $ | — | $ | 1,515 | $ | 3,326 | $ | 52,160 | |||||||||||||||||||||||||||||
| Mr. Madsen | $ | 51,546 | $ | — | $ | — | $ | 1,515 | $ | 301 | $ | 53,362 | |||||||||||||||||||||||||||||
|
Named Executive Officer | Year | Salary | Stock Awards(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation(5) | Change In Pension Value and Nonqualified Deferred Compensation Earnings(6) | All Other Compensation(7) | SEC Total Compensation(8) | Non-SEC Total Annual Direct Compensation(9) | |||||||||||||||||||||||||||||||||||
Darius Adamczyk Chairman and Chief Executive Officer |
| 2019 |
| $ | 1,600,000 |
| $ | 8,612,506 |
| $ | 4,635,409 |
| $ | 4,065,000 |
| $ | 748,107 |
| $ | 864,082 |
| $ | 20,525,104 |
| $ | 18,912,915 |
| |||||||||||||||||
| 2018 |
| $ | 1,571,154 |
| $ | 9,561,215 |
| $ | 3,185,655 |
| $ | 4,100,000 |
| $ | 595,082 |
| $ | 233,498 |
| $ | 19,246,604 |
| $ | 18,418,024 |
| ||||||||||||||||||
| 2017 |
| $ | 1,414,615 |
| $ | 5,254,000 |
| $ | 3,596,400 |
| $ | 5,723,000 |
| $ | 307,401 |
| $ | 204,737 |
| $ | 16,500,153 |
| $ | 16,435,890 |
| ||||||||||||||||||
Gregory P. Lewis Senior Vice President, Chief Financial Officer |
| 2019 |
| $ | 749,808 |
| $ | 2,288,198 |
| $ | 1,222,904 |
| $ | 1,866,600 |
| $ | 185,939 |
| $ | 331,184 |
| $ | 6,644,633 |
| $ | 5,316,910 |
| |||||||||||||||||
| 2018 |
| $ | 578,981 |
| $ | 554,742 |
| $ | 591,250 |
| $ | 730,000 |
| $ | 103,155 |
| $ | 48,365 |
| $ | 2,606,493 |
| $ | 2,979,973 |
| ||||||||||||||||||
Mark R. James Senior Vice President, Human Resources, Security and Communications |
| 2019 |
| $ | 794,231 |
| $ | 2,590,411 |
| $ | 1,399,450 |
| $ | 996,000 |
| $ | 2,380,768 |
| $ | 581,967 |
| $ | 8,742,827 |
| $ | 5,780,092 |
| |||||||||||||||||
| 2018 |
| $ | 774,231 |
| $ | 3,519,537 |
| $ | 1,173,040 |
| $ | 1,080,000 |
| $ | 426,688 |
| $ | 53,150 |
| $ | 7,026,646 |
| $ | 6,546,808 |
| ||||||||||||||||||
Anne T. Madden(1) Senior Vice President, General Counsel |
| 2019 |
| $ | 757,019 |
| $ | 2,288,198 |
| $ | 1,222,904 |
| $ | 1,970,500 |
| $ | 399,898 |
| $ | 69,977 |
| $ | 6,708,496 |
| $ | 5,370,121 |
| |||||||||||||||||
|
|
| ||||||||||||||||||||||||||||||||||||||||||
Rajeev Gautam(1) President and Chief Executive Officer Performance Materials and Technologies |
| 2019 |
| $ | 779,231 |
| $ | 2,621,868 |
| $ | 1,412,368 |
| $ | 976,000 |
| $ | 685,839 |
| $ | 55,857 |
| $ | 6,531,163 |
| $ | 5,789,467 |
| |||||||||||||||||
| 2018 |
| $ | 755,247 |
| $ | 2,940,717 |
| $ | 979,110 |
| $ | 900,000 |
| $ | 6,799 |
| $ | 51,790 |
| $ | 5,633,663 |
| $ | 5,575,074 |
| ||||||||||||||||||
| 2017 |
| $ | 717,885 |
| $ | 1,576,200 |
| $ | 1,165,500 |
| $ | 2,585,000 |
| $ | 575,729 |
| $ | 44,073 |
| $ | 6,664,387 |
| $ | 5,940,835 |
| ||||||||||||||||||
Timothy O. Mahoney(2) Senior Vice President, Enterprise Transformation (Former President and CEO, Aerospace) |
| 2019 |
| $ | 1,021,346 |
| $ | 3,960,046 |
| $ | 2,133,623 |
| $ | 1,681,000 |
| $ | 1,420,518 |
| $ | 72,805 |
| $ | 10,289,338 |
| $ | 8,796,015 |
| |||||||||||||||||
| 2018 |
| $ | 992,788 |
| $ | 4,579,898 |
| $ | 1,523,060 |
| $ | 1,840,000 |
| $ | 106,968 |
| $ | 90,491 |
| $ | 9,133,205 |
| $ | 8,935,746 |
| ||||||||||||||||||
| 2017 |
| $ | 963,615 |
| $ | 2,232,950 |
| $ | 2,064,600 |
| $ | 2,440,000 |
| $ | 1,383,760 |
| $ | 58,817 |
| $ | 9,143,742 |
| $ | 9,257,415 |
| ||||||||||||||||||
|
|
|
NEO | 2019-2021 Performance Stock Units | Restricted Stock Units | Total Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk |
| $6,638,490 |
|
| $1,974,016 |
|
| $8,612,506 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis |
| $1,763,850 |
|
| $ 524,348 |
|
| $2,288,198 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. James |
| $2,004,375 |
|
| $ 586,036 |
|
| $2,590,411 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden |
| $1,763,850 |
|
| $ 524,348 |
|
| $2,288,198 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Gautam |
| $2,020,410 |
|
| $ 601,458 |
|
| $2,621,868 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Mahoney |
| $3,050,148 |
|
| $ 909,898 |
|
| $3,960,046 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
NEO | 2019 ICP Award | 2017-2019 Performance Plan Cash Award | Total Non-Equity Incentive Plan Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis |
| $1,056,000 |
|
| $810,600 |
|
| $1,866,600 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden |
| $1,102,000 |
|
| $868,500 |
|
| $1,970,500 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
NEO | Change in Pension Value(a) | NQDC Interest(e) | Total Change in Pension Value and Nonqualified Deferred | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk | $ | 745,128 |
| $ | 2,979 |
| $ | 748,107 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis | $ | 184,682 |
| $ | 1,257 |
| $ | 185,939 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. James | $ | 2,348,466 | (b) | $ | 32,302 |
| $ | 2,380,768 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden | $ | 369,835 |
| $ | 30,063 |
| $ | 399,898 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Gautam | $ | 678,574 | (c) | $ | 7,265 |
| $ | 685,839 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Mahoney | $ | 1,323,225 | (d) | $ | 97,293 |
| $ | 1,420,518 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
NEO | Matching Contributions(a) | Personal Use of Company Aircraft(b) | Security(c) | Relocation and Loss on Sale(d) | Tax Gross-up(e) | Excess Liability Insurance(f) | Total Other Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk | $ | 112,000 |
| $ | 134,762 |
| $ | 27,200 |
| $ | 331,286 |
| $ | 257,523 |
| $ | 1,311 |
| $ | 864,082 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis | $ | 52,487 |
| $ | — |
| $ | — |
| $ | 227,440 |
| $ | 49,946 |
| $ | 1,311 |
| $ | 331,184 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. James | $ | 55,596 |
| $ | — |
| $ | — |
| $ | 297,536 |
| $ | 227,524 |
| $ | 1,311 |
| $ | 581,967 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden | $ | 52,991 |
| $ | — |
| $ | — |
| $ | 15,675 |
| $ | — |
| $ | 1,311 |
| $ | 69,977 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Gautam | $ | 54,546 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 1,311 |
| $ | 55,857 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Mahoney | $ | 71,494 |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 1,311 |
| $ | 72,805 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| | 79 | |||||||||||||
Named Executive Officer | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | All Other Underlying | Exercise Awards | Closing Awards | Grant Date Option | ||||||||||||||||||||||||||||||||||||||||||||
| Award Type(1) | Grant Date | Threshold(2) | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||||||
Darius Adamczyk | ICP | $ | 28,000 |
| $ | 2,800,000 |
| $ | 5,600,000 |
| ||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/26/2019 |
|
| 215,300 |
|
| $154.22 |
|
| $153.92 |
| $ | 4,635,409 |
| |||||||||||||||||||||||||||||||||||
PSU |
| 2/26/2019 |
|
| 2,588 |
|
| 41,400 |
|
| 82,800 |
| $ | 6,638,490 |
| |||||||||||||||||||||||||||||||||||
RSU |
| 2/26/2019 |
|
| 12,800 |
|
| 12,800 |
|
| 12,800 |
| $ | 1,974,016 |
| |||||||||||||||||||||||||||||||||||
Gregory P. Lewis | ICP | $ | 7,529 |
| $ | 752,932 |
| $ | 1,505,864 |
| ||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/26/2019 |
|
| 56,800 |
|
| $154.22 |
|
| $153.92 |
| $ | 1,222,904 |
| |||||||||||||||||||||||||||||||||||
PSU |
| 2/26/2019 |
|
| 688 |
|
| 11,000 |
|
| 22,000 |
| $ | 1,763,850 |
| |||||||||||||||||||||||||||||||||||
RSU |
| 2/26/2019 |
|
| 3,400 |
|
| 3,400 |
|
| 3,400 |
| $ | 524,348 |
| |||||||||||||||||||||||||||||||||||
Mark R. James | ICP | $ | 7,951 |
| $ | 795,123 |
| $ | 1,590,246 |
| ||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/26/2019 |
|
| 65,000 |
|
| $154.22 |
|
| $153.92 |
| $ | 1,399,450 |
| |||||||||||||||||||||||||||||||||||
PSU |
| 2/26/2019 |
|
| 781 |
|
| 12,500 |
|
| 25,000 |
| $ | 2,004,375 |
| |||||||||||||||||||||||||||||||||||
RSU |
| 2/26/2019 |
|
| 3,800 |
|
| 3,800 |
|
| 3,800 |
| $ | 586,036 |
| |||||||||||||||||||||||||||||||||||
Anne T. Madden | ICP | $ | 7,590 |
| $ | 759,027 |
| $ | 1,518,054 |
| ||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/26/2019 |
|
| 56,800 |
|
| $154.22 |
|
| $153.92 |
| $ | 1,222,904 |
| |||||||||||||||||||||||||||||||||||
PSU |
| 2/26/2019 |
|
| 688 |
|
| 11,000 |
|
| 22,000 |
| $ | 1,763,850 |
| |||||||||||||||||||||||||||||||||||
RSU |
| 2/26/2019 |
|
| 3,400 |
|
| 3,400 |
|
| 3,400 |
| $ | 524,348 |
| |||||||||||||||||||||||||||||||||||
Rajeev Gautam | ICP | $ | 7,801 |
| $ | 780,123 |
| $ | 1,560,246 |
| ||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/26/2019 |
|
| 65,600 |
|
| $154.22 |
|
| $153.92 |
| $ | 1,412,368 |
| |||||||||||||||||||||||||||||||||||
PSU |
| 2/26/2019 |
|
| 788 |
|
| 12,600 |
|
| 25,200 |
| $ | 2,020,410 |
| |||||||||||||||||||||||||||||||||||
RSU |
| 2/26/2019 |
|
| 3,900 |
|
| 3,900 |
|
| 3,900 |
| $ | 601,458 |
| |||||||||||||||||||||||||||||||||||
Timothy O. Mahoney | ICP | $ | 11,761 |
| $ | 1,176,088 |
| $ | 2,352,176 |
| ||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/26/2019 |
|
| 99,100 |
|
| $154.22 |
|
| $153.92 |
| $ | 2,133,623 |
| |||||||||||||||||||||||||||||||||||
PSU |
| 7/25/2019 |
|
| 995 |
|
| 15,926 |
|
| 31,852 |
| $ | 3,050,148 |
| |||||||||||||||||||||||||||||||||||
RSU |
| 2/26/2019 |
|
| 5,900 |
|
| 5,900 |
|
| 5,900 |
| $ | 909,898 |
| |||||||||||||||||||||||||||||||||||
|
2021
(1)Award Type: ICP | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
NQSO = Nonqualified Stock Option PSU21-23 = 2021-2023 Performance Stock Unit (regular annual award) RSU = Restricted Stock Unit PSU20-22 = 2020-2022 Performance Stock Unit (modification) (2) |
|
Represents the minimum level |
|
|
|
Description of Plan-Basedperformance that must be achieved for any amount to be payable.
vest 100% in February 2024. 50% of the total number of PSUs earned will be converted to, and paid in, cash. 50% of the earned PSUs will be paid in shares subject to a minimum one-year holding period.
|
|
|
|
I OUTSTANDING EQUITY AWARDS AT 2019 FISCALYEAR-END
Option Awards(1)
| Stock Awards
| |||||||||||||||||||||||||||||||
Name | Grant Year | Number of Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | |||||||||||||||||||||||||
Darius Adamczyk |
| 2019 |
|
| — |
|
| 215,300 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 12,988 | (3) | $ | 2,298,876 |
| |||||||||||
| 2019 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 42,010 | (4) | $ | 7,435,770 |
| ||||||||||||
| 2018 |
|
| 35,170 |
|
| 105,515 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 22,181 | (5) | $ | 3,926,037 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 42,198 | (6) | $ | 7,469,046 |
| ||||||||||||
| 2017 |
|
| 112,799 |
|
| 112,799 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| 86,056 | (7) | $ | 15,231,912 |
| ||||||||||||
| 2016 |
|
| 78,780 |
|
| 26,260 |
| $ | 107.42 |
|
| 4/3/2026 |
|
| — |
| $ | — |
| ||||||||||||
| 2016 |
|
| 118,170 |
|
| 39,391 |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 37,784 | (8) | $ | 6,687,768 |
| ||||||||||||
| 2015 |
|
| 157,561 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
| $ | — |
| ||||||||||||
| 2014 |
|
| 147,058 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| 10,394 | (9) | $ | 1,839,738 |
| ||||||||||||
| 2013 |
|
| 42,015 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
| $ | — |
| ||||||||||||
| 2012 |
|
| 97,162 |
|
| — |
| $ | 57.00 |
|
| 2/28/2022 |
|
| — |
| $ | — |
| ||||||||||||
| Total |
|
| 788,715 |
|
| 499,265 |
|
| 253,611 |
| $ | 44,889,147 |
| ||||||||||||||||||
Gregory P. Lewis |
| 2019 |
|
| — |
|
| 56,800 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 3,450 | (3) | $ | 610,650 |
| |||||||||||
| 2019 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 11,162 | (4) | $ | 1,975,674 |
| ||||||||||||
| 2018 |
|
| 6,527 |
|
| 19,583 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 3,864 | (10) | $ | 683,928 |
| ||||||||||||
| 2017 |
|
| 13,054 |
|
| 13,056 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| 3,940 | (11) | $ | 697,380 |
| ||||||||||||
| 2016 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 3,739 | (12) | $ | 661,803 |
| ||||||||||||
| 2016 |
|
| 18,906 |
|
| 6,303 |
| $ | 98.70 |
|
| 2/24/2026 |
|
| — |
| $ | — |
| ||||||||||||
| 2015 |
|
| 23,107 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| 3,861 | (13) | $ | 683,397 |
| ||||||||||||
| 2014 |
|
| 21,007 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| — |
| $ | — |
| ||||||||||||
| 2013 |
|
| 6,301 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| 4,098 | (14) | $ | 725,346 |
| ||||||||||||
| 2012 |
|
| 6,301 |
|
| — |
| $ | 57.00 |
|
| 2/28/2022 |
|
| — |
| $ | — |
| ||||||||||||
| 2011 |
|
| 3,675 |
|
| — |
| $ | 54.32 |
|
| 2/24/2021 |
|
| — |
| $ | — |
| ||||||||||||
| Total |
|
| 98,878 |
|
| 95,742 |
|
| 34,114 |
| $ | 6,038,178 |
| ||||||||||||||||||
Mark R. James |
| 2019 |
|
| — |
|
| 65,000 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 3,856 | (3) | $ | 682,512 |
| |||||||||||
| 2019 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 12,684 | (4) | $ | 2,245,068 |
| ||||||||||||
| 2018 |
|
| 12,950 |
|
| 38,853 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 8,115 | (5) | $ | 1,436,355 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 15,581 | (6) | $ | 2,757,837 |
| ||||||||||||
| 2017 |
|
| 48,044 |
|
| 48,044 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| 27,971 | (7) | $ | 4,950,867 |
| ||||||||||||
| 2016 |
|
| 94,536 |
|
| 31,512 |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 27,205 | (8) | $ | 4,815,285 |
| ||||||||||||
| 2015 |
|
| 115,544 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
| $ | — |
| ||||||||||||
| 2014 |
|
| 105,040 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| 9,196 | (9) | $ | 1,627,692 |
| ||||||||||||
| 2013 |
|
| 120,797 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
| $ | — |
| ||||||||||||
| 2012 |
|
| 120,797 |
|
| — |
| $ | 57.00 |
|
| 2/28/2022 |
|
| — |
| $ | — |
| ||||||||||||
| Total |
|
| 617,708 |
|
| 183,409 |
|
| 104,608 |
| $ | 18,515,616 |
| ||||||||||||||||||
Anne T. Madden |
| 2019 |
|
| — |
|
| 56,800 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 3,450 | (3) | $ | 610,650 |
| |||||||||||
| 2019 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 11,162 | (4) | $ | 1,975,674 |
| ||||||||||||
| 2018 |
|
| 7,989 |
|
| 23,970 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 4,977 | (5) | $ | 880,929 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 9,631 | (6) | $ | 1,704,687 |
| ||||||||||||
| 2017 |
|
| 14,099 |
|
| 14,100 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| 4,260 | (11) | $ | 754,020 |
| ||||||||||||
| 2016 |
|
| 21,664 |
|
| 7,221 |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 6,047 | (15) | $ | 1,070,319 |
| ||||||||||||
| 2015 |
|
| 26,259 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
| $ | — |
| ||||||||||||
| 2014 |
|
| 21,007 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| — |
| $ | — |
| ||||||||||||
| 2013 |
|
| 21,007 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| 4,077 | (16) | $ | 721,629 |
| ||||||||||||
| 2012 |
|
| 21,007 |
|
| — |
| $ | 57.00 |
|
| 2/28/2022 |
|
| — |
| $ | — |
| ||||||||||||
| Total |
|
| 133,032 |
|
| 102,091 |
|
| 43,604 |
| $ | 7,717,908 |
| ||||||||||||||||||
| |
| 2022 | |||||||||||
Option Awards (1) | Stock Awards | ||||||||||||||||||||||||||||||||||||||||
| Name | Grant Year | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | Number of Unearned Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | ||||||||||||||||||||||||||||||||
| Darius Adamczyk | 2021 | — | 163,500 | $202.72 | 2/11/2031 | 11,191 | (3) | $2,333,435 | 35,758 | (4) | $7,455,901 | ||||||||||||||||||||||||||||||
| 2020 | 57,200 | 171,600 | $180.92 | 2/13/2030 | 12,050 | (5) | $2,512,546 | 38,643 | (6) | $8,057,452 | |||||||||||||||||||||||||||||||
| 2019 | 107,650 | 107,650 | $154.22 | 2/25/2029 | 9,040 | (7) | $1,884,930 | — | — | ||||||||||||||||||||||||||||||||
| 2019 | — | — | — | — | 37,967 | (8) | $7,916,499 | — | — | ||||||||||||||||||||||||||||||||
| 2018 | 105,513 | 35,172 | $148.79 | 2/26/2028 | 15,439 | (9) | $3,219,186 | — | — | ||||||||||||||||||||||||||||||||
| 2017 | 225,598 | — | $119.69 | 2/27/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2016 | 105,040 | — | $107.42 | 4/3/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2016 | 157,561 | — | $98.70 | 2/24/2026 | 19,923 | (10) | $4,154,145 | — | — | ||||||||||||||||||||||||||||||||
| 2015 | 157,561 | — | $98.93 | 2/25/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2014 | 147,058 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| Total | 1,063,181 | 477,922 | 105,610 | $22,020,741 | 74,401 | $15,513,353 | |||||||||||||||||||||||||||||||||||
| Gregory P. Lewis | 2021 | — | 51,200 | $202.72 | 2/11/2031 | 3,459 | (3) | $721,236 | 11,244 | (4) | $2,344,486 | ||||||||||||||||||||||||||||||
| 2020 | 17,550 | 52,650 | $180.92 | 2/13/2030 | 3,636 | (5) | $758,142 | 11,946 | (6) | $2,490,860 | |||||||||||||||||||||||||||||||
| 2019 | 28,400 | 28,400 | $154.22 | 2/25/2029 | 2,401 | (7) | $500,633 | — | — | ||||||||||||||||||||||||||||||||
| 2019 | — | — | — | — | 10,088 | (8) | $2,103,449 | — | — | ||||||||||||||||||||||||||||||||
| 2018 | 19,582 | 6,528 | $148.79 | 2/26/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2017 | 26,110 | — | $119.69 | 2/27/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2016 | — | — | — | — | 1,972 | (11) | $411,182 | — | — | ||||||||||||||||||||||||||||||||
| 2016 | 25,209 | — | $98.70 | 2/24/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2015 | 23,107 | — | $98.93 | 2/25/2025 | 2,036 | (12) | $424,526 | — | — | ||||||||||||||||||||||||||||||||
| 2014 | 21,007 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| Total | 160,965 | 138,778 | 23,592 | $4,919,168 | 23,190 | $4,835,346 | |||||||||||||||||||||||||||||||||||
| Anne T. Madden | 2021 | — | 51,200 | $202.72 | 2/11/2031 | 3,459 | (3) | $721,236 | 11,244 | (4) | $2,344,486 | ||||||||||||||||||||||||||||||
| 2020 | 17,550 | 52,650 | $180.92 | 2/13/2030 | 3,636 | (5) | $758,142 | 11,946 | (6) | $2,490,860 | |||||||||||||||||||||||||||||||
| 2019 | 28,400 | 28,400 | $154.22 | 2/25/2029 | 2,401 | (7) | $500,633 | — | — | ||||||||||||||||||||||||||||||||
| 2019 | — | — | — | — | 10,088 | (8) | $2,103,449 | — | — | ||||||||||||||||||||||||||||||||
| 2018 | 23,969 | 7,990 | $148.79 | 2/26/2028 | 3,465 | (9) | $722,487 | — | — | ||||||||||||||||||||||||||||||||
| 2017 | 28,199 | — | $119.69 | 2/27/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2016 | 28,885 | — | $98.70 | 2/24/2026 | 3,190 | (13) | $665,147 | — | — | ||||||||||||||||||||||||||||||||
| 2015 | 26,259 | — | $98.93 | 2/25/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2014 | 21,007 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| Total | 174,269 | 140,240 | 26,239 | $5,471,094 | 23,190 | $4,835,346 | |||||||||||||||||||||||||||||||||||
Que Thanh Dallara (20) | 2021 | — | 42,500 | $202.72 | 2/11/2031 | 2,849 | (3) | $594,045 | 9,319 | (4) | $1,943,105 | ||||||||||||||||||||||||||||||
| 2020 | 14,300 | 42,900 | $180.92 | 2/13/2030 | 3,013 | (5) | $628,241 | 9,661 | (6) | $2,014,415 | |||||||||||||||||||||||||||||||
| 2019 | 21,800 | 21,800 | $154.22 | 2/25/2029 | 1,836 | (7) | $382,824 | — | — | ||||||||||||||||||||||||||||||||
| 2019 | — | — | — | — | 8,766 | (8) | $1,827,799 | — | — | ||||||||||||||||||||||||||||||||
| 2018 | 16,527 | 5,510 | $148.79 | 2/26/2028 | 2,412 | (9) | $502,926 | — | — | ||||||||||||||||||||||||||||||||
| 2018 | — | — | — | — | 2,664 | (14) | $555,471 | — | — | ||||||||||||||||||||||||||||||||
| 2017 | 13,577 | — | $119.69 | 2/27/2027 | 924 | (15) | $192,663 | — | — | ||||||||||||||||||||||||||||||||
| Total | 66,204 | 112,710 | 22,464 | $4,683,969 | 18,980 | $3,957,520 | |||||||||||||||||||||||||||||||||||
| Mike Madsen | 2021 | — | 34,100 | $202.72 | 2/11/2031 | 2,340 | (3) | $487,913 | 7,496 | (4) | $1,562,991 | ||||||||||||||||||||||||||||||
| 2020 | 11,425 | 34,275 | $180.92 | 2/13/2030 | 2,389 | (5) | $498,130 | 7,791 | (6) | $1,624,501 | |||||||||||||||||||||||||||||||
| 2019 | 11,866 | 11,869 | $154.22 | 2/25/2029 | 3,493 | (16) | $728,325 | — | — | ||||||||||||||||||||||||||||||||
| 2019 | — | — | — | — | 6,066 | (17) | $1,264,822 | — | — | ||||||||||||||||||||||||||||||||
| 2018 | 18,015 | 6,006 | $148.79 | 2/26/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2017 | 24,021 | — | $119.69 | 2/27/2027 | 1,941 | (18) | $404,718 | — | — | ||||||||||||||||||||||||||||||||
| 2016 | 23,107 | — | $98.70 | 2/24/2026 | 1,994 | (19) | $415,769 | — | — | ||||||||||||||||||||||||||||||||
| 2015 | 13,696 | — | $98.93 | 2/25/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 2014 | 16,007 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| Total | 118,137 | 86,250 | 18,223 | $3,799,677 | 15,287 | $3,187,492 | |||||||||||||||||||||||||||||||||||
|
Option Awards(1)
| Stock Awards
| |||||||||||||||||||||||||||||||
Name | Grant Year | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | |||||||||||||||||||||||||
Rajeev Gautam |
| 2019 |
|
| — |
|
| 65,600 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 3,957 | (3) | $ | 700,389 |
| |||||||||||
| 2019 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 12,785 | (4) | $ | 2,262,945 |
| ||||||||||||
| 2018 |
|
| 10,809 |
|
| 32,430 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 6,817 | (5) | $ | 1,206,609 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 12,984 | (6) | $ | 2,298,168 |
| ||||||||||||
| 2017 |
|
| 36,554 |
|
| 36,556 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| 24,229 | (7) | $ | 4,288,533 |
| ||||||||||||
| 2016 |
|
| 39,389 |
|
| 13,131 |
| $ | 108.87 |
|
| 5/1/2026 |
|
| — |
| $ | — |
| ||||||||||||
| 2016 |
|
| 17,330 |
|
| 5,777 |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 11,285 | (17) | $ | 1,997,445 |
| ||||||||||||
| 2015 |
|
| 21,007 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
| $ | — |
| ||||||||||||
| 2014 |
|
| 17,856 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| — |
| $ | — |
| ||||||||||||
| 2013 |
|
| 8,927 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
| $ | — |
| ||||||||||||
| 2012 |
|
| 4,200 |
|
| — |
| $ | 57.00 |
|
| 2/28/2022 |
|
| — |
| $ | — |
| ||||||||||||
| Total |
|
| 156,072 |
|
| 153,494 |
|
| 72,057 |
| $ | 12,754,089 |
| ||||||||||||||||||
Timothy O. Mahoney |
| 2019 |
|
| — |
|
| 99,100 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 5,987 | (3) | $ | 1,059,699 |
| |||||||||||
| 2019 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 16,084 | (4) | $ | 2,846,868 |
| ||||||||||||
| 2018 |
|
| 16,815 |
|
| 50,446 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 10,604 | (5) | $ | 1,876,908 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
| $ | — |
|
| — |
|
| 18,757 | (6) | $ | 3,319,989 |
| ||||||||||||
| 2017 |
|
| 64,755 |
|
| 64,755 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| 37,102 | (7) | $ | 6,567,054 |
| ||||||||||||
| 2016 |
|
| 137,866 |
|
| 45,955 |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 33,840 | (17) | $ | 5,989,680 |
| ||||||||||||
| 2015 |
|
| 183,821 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
| $ | — |
| ||||||||||||
| 2014 |
|
| 183,821 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| 11,993 | (9) | $ | 2,122,761 |
| ||||||||||||
| Total |
|
| 587,078 |
|
| 260,256 |
|
| 134,367 |
| $ | 23,782,959 |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| ||||||||||
|
I(1) OPTION EXERCISES AND STOCK VESTED—FISCAL YEARStock option grants vest in four installments at the rate of 25% per year beginning on the first anniversary of the date of grant.
| Option Awards | Stock Awards | |||||||||||||||||||
Named Executive Officer | Number of Shares Acquired on Exercise(1) | Value Realized on Exercise(2) | Number of Shares Acquired on Vesting(3) | Value Realized on Vesting(4) | ||||||||||||||||
Darius Adamczyk |
| 17,328 | (5) | $ | 2,029,839 |
| 69,588 | (6) | $ | 11,299,226 |
| |||||||||
Gregory P. Lewis |
| — |
| $ | — |
| 6,299 | (7) | $ | 982,370 |
| |||||||||
Mark R. James |
| — |
| $ | — |
|
| 35,324 | (8) | $ | 6,117,434 |
| ||||||||
Anne T. Madden |
| — |
| $ | — |
|
| 8,076 | (9) | $ | 1,304,016 |
| ||||||||
Rajeev Gautam |
| — |
| $ | — |
|
| 15,264 | (10) | $ | 2,553,299 |
| ||||||||
Timothy O. Mahoney |
| 210,082 | (11) | $ | 20,398,185 |
|
| 63,615 | (12) | $ | 10,999,963 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| |
| 2022 | |||||||||||
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||
| Named Executive Officer | Number of Shares Acquired on Exercise(1) | Value Realized on Exercise(2) | Number of Shares Acquired on Vesting(3) | Value Realized on Vesting(4) | |||||||||||||||||||||||||
| Mr. Adamczyk | 42,015 | (5) | $ | 6,953,609 | 103,174 | (6) | $ | 22,207,274 | |||||||||||||||||||||
| Mr. Lewis | 12,602 | (7) | $ | 2,154,768 | 7,011 | (8) | $ | 1,453,829 | |||||||||||||||||||||
| Ms. Madden | 21,007 | (9) | $ | 3,293,856 | 19,962 | (10) | $ | 4,234,626 | |||||||||||||||||||||
| Ms. Dallara | — | — | 14,433 | (11) | $ | 3,000,203 | |||||||||||||||||||||||
| Mr. Madsen | — | — | 10,377 | (12) | $ | 2,294,689 | |||||||||||||||||||||||
|
| ||||||||||
I
Named Executive Officer | Plan Name | Number of Years | Present Value of Accumulated Benefits(1) | |||||||
Darius Adamczyk | REP |
| 7.7 |
| $ | 125,091 |
| |||
SERP |
| 11.5 |
| $ | 2,241,956 |
| ||||
Total | $ | 2,367,047 |
| |||||||
Gregory P. Lewis | REP |
| 13.0 |
| $ | 212,182 |
| |||
SERP |
| 13.0 |
| $ | 494,280 |
| ||||
Total | $ | 706,462 |
| |||||||
Mark R. James | REP |
| 19.8 |
| $ | 1,196,670 |
| |||
SERP |
| 19.8 |
| $ | 7,792,541 |
| ||||
Total | $ | 8,989,211 |
| |||||||
Anne T. Madden | REP |
| 23.5 |
| $ | 382,801 |
| |||
SERP |
| 23.5 |
| $ | 1,161,582 |
| ||||
Total | $ | 1,544,383 |
| |||||||
Rajeev Gautam | REP |
| 41.3 |
| $ | 1,935,493 |
| |||
SERP |
| 41.3 |
| $ | 5,696,972 |
| ||||
Total | $ | 7,632,465 |
| |||||||
Timothy O. Mahoney | REP |
| 22.1 |
| $ | 1,111,969 |
| |||
SERP |
| 22.1 |
| $ | 9,689,186 |
| ||||
Total | $ | 10,801,155 |
| |||||||
|
2021
| Named Executive Officer | Plan Name | Number of Years of Credited Service | Present Value of Accumulated Benefits(1) | |||||||||||
| Darius Adamczyk | REP | 9.7 | $ | 162,846 | ||||||||||
| SERP | 13.5 | $ | 3,615,436 | |||||||||||
| Total | $ | 3,778,282 | ||||||||||||
| Gregory P. Lewis | REP | 15 | $ | 252,828 | ||||||||||
| SERP | 15 | $ | 921,009 | |||||||||||
| Total | $ | 1,173,837 | ||||||||||||
| Anne T. Madden | REP | 25.5 | $ | 429,114 | ||||||||||
| SERP | 25.5 | $ | 1,868,023 | |||||||||||
| Total | $ | 2,297,137 | ||||||||||||
| Que Thanh Dallara | REP | 0 | $ | — | ||||||||||
| SERP | 0 | $ | — | |||||||||||
| Total | $ | — | ||||||||||||
| Michael R. Madsen | REP | 35.6 | $ | 1,890,262 | ||||||||||
| SERP | 35.6 | $ | 2,661,942 | |||||||||||
| Total | $ | 4,552,204 | ||||||||||||
•The REP is atax-qualified pension plan in which a significant portion of ourHoneywell’s U.S. employees participate.
•The REP complies with tax requirements applicable to broad-based pension plans, which impose dollar limits on the amount of benefits that can be provided. As a result, the pensions that can be paid under the REP for higher-paid employees represent a much smaller fraction of current income than the pensions that can be paid to less highly paid employees. We make up for this difference, in part, by providing supplemental pensions through the SERP.
•All SERP benefits will be paid on the first day of the first month that begins following the 105th day after the later of the officer’s separation from service (as that term is defined in Internal Revenue Code Section 409A) or his or her earliest retirement date.
Pension Benefit Calculation Formulas
| 84 | | Notice and Proxy Statement | 2022 | ||||||
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|
| ||||
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Name of Formula | Benefit Calculation | |||||
| REP | ||||||
| •Lump sum equal to (1) 6% of final average compensation (annual average compensation for the five calendar years out of the previous 10 calendar years that produces highest average) times (2) credited service. | |||||
| ALLIED SALARIED | ||||||
| •Single life annuity equal to (1)(A) 2% of final average compensation (average of compensation for the 60 consecutive months out of prior 120 months that produces highest average) times (B) credited service (up to 25 years), minus (2) 64% of estimated Social Security benefits.
| |||||
| SIGNAL | ||||||
| •
| |||||
|
| |||||
|
| |||||
a lump sum.
|
|
|
|
The Bendix formula also provides for early retirement benefits. A participant is eligible for early retirement if the participant has attained age 55 with at least five years of vesting service or he retires after the sum of his age and years of vesting service equal or exceed 80. If the participant retires early, the participant’s early retirement benefit shall be the greater of (1) or (2), where (1) is (A) minus (B), where (A) is the amount determined under the basic formula for up to 25 years of credited service reduced by 1/6 of 1% for each of the first 60 months by which the early retirement date precedes the participant’s 65th birthday and 1/3 of 1% for months that exceed 60, and (B) is the monthly offset determined under the Social Security benefit portion of the basic formula reduced by the factors used to reduce Social Security benefits for early commencement (but only for payments made after the participant’s 62nd birthday, and based on the reduction factors as of the later of age 62 or the participant’s early retirement date); and (2) is the monthly amount determined under the minimum formula reduced by 6/10 of 1% for each of the first 60 months by which the participant’s early retirement date precedes his 65th birthday and by 4/10 of 1% for months that exceed 60. The participant’s benefit shall be the greater of thepre-age 62 andpost-age 62 amounts calculated under (1) and (2) above. If a participant retires after he has 80 points, the early retirement benefit shall be determined as above except the total reduction under (1)(A) shall not exceed 25%, and the amount determined under (2), prior to determining the greaterpre-age 62 andpost-age 62 amounts, shall be increased by $385 per month, payable through the participant’s 62nd birthday with no reduction for commencement before age 65.
The Signal formula also provides for early retirement benefits. A participant is eligible for early retirement if the participant has attained age 50 with at least 10 years of vesting service. If the participant retires early, his accrued benefit (other than the Social Security offset portion) is reduced by 0.33% for each month benefits are paid before the participant’s 60th birthday (4% per year).
The UOP formula also provides for early retirement benefits. A participant is eligible for early retirement if the participant has attained age 50 with at least ten years of vesting service. If the participant retires early, his accrued benefit (other than the Social Security offset portion) is reduced by 0.33% for each month benefits are paid before the participant’s 60th birthday (4% per year).
As stated above, the pension formula used to determine the amount of pension benefits under each of the plans for our Named Executive Officers (NEO)NEOs differs for historical reasons. Also, additional contractual pension benefits have been provided to certain Named Executive Officers as deemed necessary and appropriate at the time of their recruitment to the Company or to retain the executive. The table below describes which formulas are applicable to each of our NEOs.
Name/Formula | Description of Total Pension Benefits | ||||
Darius Adamczyk Total pension benefit = REP formula benefits | •Mr. Adamczyk’s pension benefits under the REP and the SERP are determined under the REP formula, with the SERP benefit calculated using all | ||||
Gregory P. Lewis Total pension benefit = REP formula benefits | |||||
| •Mr. Lewis’ pension benefits under the REP and the SERP are determined under the REP formula. | ||||
Anne T. Madden Total pension benefit = REP formula benefits | |||||
| •
| ||||
|
| ||||
| |||||
Total pension benefit = Allied Salaried formula benefits | •Mr.
| ||||
| |
| ||||||||||
|
INONQUALIFIED DEFERRED COMPENSATION—FISCAL YEAR 2019
Since 2005, 2021
Named Executive Officer | Plan | Executive Contributions in Last FY(3) | Registrant Contributions in Last FY(1) (3) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(3) | ||||||||||||||||
Darius Adamczyk | SS Plan(1) | $ | 109,000 |
| $ | 95,375 |
| $ | 164,151 |
| $ | — |
| $ | 1,159,244 |
| ||||||
DIC Plan | $ | 410,000 |
| $ | — |
| $ | 14,856 |
| $ | — |
| $ | 424,856 |
| |||||||
Deferred RSUs(2) | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Total | $ | 519,000 |
| $ | 95,375 |
| $ | 179,007 |
| $ | — |
| $ | 1,584,100 |
| |||||||
Gregory P. Lewis | SS Plan(1) | $ | 77,371 |
| $ | 32,887 |
| $ | 44,368 |
| $ | — |
| $ | 448,166 |
| ||||||
DIC Plan | $ | — |
| $ | — |
| $ | 4,620 |
| $ | — |
| $ | 116,230 |
| |||||||
Deferred RSUs(2) | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Total | $ | 77,371 |
| $ | 32,887 |
| $ | 48,988 |
| $ | — |
| $ | 564,396 |
| |||||||
Mark R. James | SS Plan(1) | $ | 121,792 |
| $ | 38,971 |
| $ | 368,099 |
| $ | — |
| $ | 2,955,017 |
| ||||||
DIC Plan | $ | — |
| $ | — |
| $ | 93,680 |
| $ | — |
| $ | 2,017,129 |
| |||||||
Deferred RSUs(2) | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 0 |
| |||||||
Total | $ | 121,792 |
| $ | 38,971 |
| $ | 461,779 |
| $ | — |
| $ | 4,972,146 |
| |||||||
Anne T. Madden | SS Plan(1) | $ | 223,968 |
| $ | 33,391 |
| $ | 331,246 |
| $ | — |
| $ | 2,921,973 |
| ||||||
DIC Plan | $ | 1,117,000 |
| $ | — |
| $ | 173,532 |
| $ | — |
| $ | 4,504,966 |
| |||||||
Deferred RSUs(2) | $ | — |
| $ | — |
| $ | 1,589,003 |
| $ | — |
| $ | 6,397,991 |
| |||||||
Total | $ | 1,340,968 |
| $ | 33,391 |
| $ | 2,093,781 |
| $ | — |
| $ | 13,824,930 |
| |||||||
Rajeev Gautam | SS Plan(1) | $ | 43,338 |
| $ | 34,946 |
| $ | 179,495 |
| $ | — |
| $ | 2,102,146 |
| ||||||
DIC Plan | $ | — |
| $ | — |
| $ | 24,124 |
| $ | — |
| $ | 606,913 |
| |||||||
Deferred RSUs(2) | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Total | $ | 43,338 |
| $ | 34,946 |
| $ | 203,619 |
| $ | — |
| $ | 2,709,059 |
| |||||||
Timothy O. Mahoney | SS Plan(1) | $ | 311,087 |
| $ | 51,894 |
| $ | 554,347 |
| $ | — |
| $ | 5,764,110 |
| ||||||
DIC Plan | $ | — |
| $ | — |
| $ | 402,567 |
| $ | — |
| $ | 7,150,824 |
| |||||||
Deferred RSUs(2) | $ | — |
| $ | — |
| $ | 3,658,716 |
| $ | — |
| $ | 13,632,609 |
| |||||||
Total | $ | 311,087 |
| $ | 51,894 |
| $ | 4,615,630 |
| $ | — |
| $ | 26,547,544 |
| |||||||
| Named Executive Officer | Plan | Executive Contributions in Last FY(3) | Registrant Contributions in Last FY(1)(3) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(3) | ||||||||||||||||||||||||||
| Darius Adamczyk | SS Plan(1) | $ | 114,438 | $ | 100,134 | $ | 14,217 | — | $ | 1,745,827 | ||||||||||||||||||||||
| DIC Plan | $ | — | — | $ | 21,783 | — | $ | 1,291,629 | ||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
| Total | $ | 114,438 | $ | 100,134 | $ | 36,000 | — | $ | 3,037,456 | |||||||||||||||||||||||
| Gregory P. Lewis | SS Plan(1) | $ | 127,600 | $ | 37,757 | $ | 9,029 | — | $ | 811,336 | ||||||||||||||||||||||
| DIC Plan | — | — | $ | 2,054 | — | $ | 121,579 | |||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
| Total | $ | 127,600 | $ | 37,757 | $ | 11,083 | — | $ | 932,915 | |||||||||||||||||||||||
| Anne T. Madden | SS Plan(1) | $ | 260,695 | $ | 40,533 | $ | 85,930 | — | $ | 3,886,846 | ||||||||||||||||||||||
| DIC Plan | $ | 758,000 | — | $ | 110,553 | — | $ | 6,630,274 | ||||||||||||||||||||||||
Deferred RSUs(2) | — | — | $ | (42,263) | — | $ | 7,684,352 | |||||||||||||||||||||||||
| Total | $ | 1,018,695 | $ | 40,533 | $ | 154,220 | — | $ | 18,201,472 | |||||||||||||||||||||||
| Que Thanh Dallara | SS Plan(1) | $ | 99,930 | 30,256 | $ | 6,799 | — | $ | 515,323 | |||||||||||||||||||||||
| DIC Plan | 55,600 | — | $ | 4,855 | — | $ | 294,014 | |||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
| Total | $ | 155,530 | $ | 30,256 | $ | 11,654 | — | $ | 809,337 | |||||||||||||||||||||||
| Michael R. Madsen | SS Plan(1) | $ | 39,410 | $ | 31,246 | $ | 10,479 | — | $ | 912,932 | ||||||||||||||||||||||
| DIC Plan | — | — | — | — | — | |||||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
| Total | $ | 39,410 | $ | 31,246 | $ | 10,479 | — | $ | 912,932 | |||||||||||||||||||||||
|
|
| Named Executive Officer | Executive Contributions in SCT | Registrant Contributions in SCT | Earnings in SCT | Portion of Aggregate Balance Included in Prior SCTs | ||||||||||||||||||||||
| Darius Adamczyk | $ | 114,438 | $ | 100,134 | $ | 2,489 | $ | 2,126,264 | ||||||||||||||||||
| Gregory P. Lewis | $ | 127,600 | $ | 37,757 | $ | 747 | $ | 338,075 | ||||||||||||||||||
| Anne T. Madden | $ | 260,695 | $ | 40,533 | $ | 57,507 | $ | 2,469,873 | ||||||||||||||||||
| Que Thanh Dallara | $ | 99,930 | $ | 30,256 | $ | 773 | $ | 0 | ||||||||||||||||||
| Michael R. Madsen | $ | 39,410 | $ | 31,246 | $ | 726 | $ | 0 | ||||||||||||||||||
| |
| 2022 | |||||||||||
|
|
Named Executive Officer | Executive Contributions in SCT | Registrant Contributions in SCT | Earnings in SCT | Portion of Aggregate Balance Included in Prior SCTs | ||||||||||||||||||||||||||||||||||||||||
Darius Adamczyk |
| $109,000 |
|
| $95,375 |
|
| $ 2,979 |
|
| $ 902,202 |
| ||||||||||||||||||||||||||||||||
Gregory P. Lewis |
| $ 77,371 |
|
| $32,887 |
|
| $ 1,257 |
|
| $ 78,438 |
| ||||||||||||||||||||||||||||||||
Mark R. James |
| $121,792 |
|
| $38,971 |
|
| $32,302 |
|
| $ 139,593 |
| ||||||||||||||||||||||||||||||||
Anne T. Madden |
| $223,968 |
|
| $33,391 |
|
| $30,063 |
|
| $ — |
| ||||||||||||||||||||||||||||||||
Rajeev Gautam |
| $ 43,338 |
|
| $34,946 |
|
| $ 7,265 |
|
| $ 247,696 |
| ||||||||||||||||||||||||||||||||
Timothy O. Mahoney |
| $311,087 |
|
| $51,894 |
|
| $97,293 |
|
| $8,132,748 |
| ||||||||||||||||||||||||||||||||
Honeywell Excess Benefit Plan and Honeywell Supplemental Savings Plan
The Supplemental Savings Plan allows Honeywell executives, including the Named Executive Officers, to defer the portion of their annual base salary that cannot be contributed to the Company’stax-qualified 401(k) plan due to the annual deferral and compensation limits imposed by the Internal Revenue Code and/or up to an additional 25% of base annual salary for the plan year.
2021.
|
|
|
|
Honeywell Salary and Incentive Award Deferral Plan for Selected Employees
The Honeywell DIC Plan allows Honeywell executives, including the Named Executive Officers, to defer all or a portion of their annual cash incentive compensation.
Distribution.
Notice and Proxy Statement | 2022 | | 87 | |||||||||
Deferral of
•A specific year after the vesting year; or
•The year following the executive’s termination of active employment.
Unvested Dividend Equivalents
|
|
|
|
IPOTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
•Termination of Employment
•Change in Control (CIC)
Senior Severance Plan
| 88 | | Notice and Proxy Statement | 2022 | ||||||
|
|
|
|
Summary of Benefits—Termination Events
The following table summarizes the termination of employment and CIC benefits payable to our NEOs. None of these termination benefits are payable to NEOs who voluntarily quitresign (other than voluntary resignations for good reason after a CIC) or whose employment is terminated by us for cause. The information in the table below assumes, in each case, that termination of employment occurred on December 31, 2019.2021. Pension and nonqualifiednon-qualified deferred compensation benefits, which are described elsewhere in this Proxy Statement, are not included in the table below in accordance with the applicable Proxy Statement disclosure requirements,SEC rules, even though they may become payable atupon the timesoccurrence of the events specified in the table. The effect of a termination of employment or CIC on outstanding stock options, RSUs and PSUs is described in the section below entitled “Impact on Equity-Based Awards.”
Payments and Benefits | Named Executive Officer | Termination by the Company Without Cause | Death | Disability | Change in Control— No Termination of Employment | Change in Control— Termination of Employment by Company Without Cause, By NEO for Good Reason or Due to Disability | ||||||||||||||||
Cash Severance (Base Salary + Bonus) | Darius Adamczyk | $ | 13,200,000 |
| $ | — |
| $ | — |
| $ | — |
| $ | 13,200,000 |
| ||||||
Gregory P. Lewis | $ | 2,310,000 |
| $ | — |
| $ | — |
| $ | — |
| $ | 3,080,000 |
| |||||||
Mark R. James | $ | 4,800,000 |
| $ | — |
| $ | — |
| $ | — |
| $ | 4,800,000 |
| |||||||
Anne T. Madden | $ | 2,310,000 |
| $ | — |
| $ | — |
| $ | — |
| $ | 3,080,000 |
| |||||||
Rajeev Gautam | $ | 2,355,000 |
| $ | — |
| $ | — |
| $ | — |
| $ | 3,140,000 |
| |||||||
Timothy O. Mahoney | $ | 3,321,750 |
| $ | — |
| $ | — |
| $ | — |
| $ | 4,429,000 |
| |||||||
ICP (Year of Termination) | Darius Adamczyk | $ | — |
| $ | — |
| $ | — |
| $ | 4,065,000 |
| $ | 4,065,000 |
| ||||||
Gregory P. Lewis | $ | — |
| $ | — |
| $ | — |
| $ | 1,056,000 |
| $ | 1,056,000 |
| |||||||
Mark R. James | $ | — |
| $ | — |
| $ | — |
| $ | 996,000 |
| $ | 996,000 |
| |||||||
Anne T. Madden | $ | — |
| $ | — |
| $ | — |
| $ | 1,102,000 |
| $ | 1,102,000 |
| |||||||
Rajeev Gautam | $ | — |
| $ | — |
| $ | — |
| $ | 976,000 |
| $ | 976,000 |
| |||||||
Timothy O. Mahoney | $ | — |
| $ | — |
| $ | — |
| $ | 1,681,000 |
| $ | 1,681,000 |
| |||||||
Performance Cash Units | Darius Adamczyk | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| ||||||
Gregory P. Lewis | $ | — |
| $ | 1,335,600 |
| $ | 1,335,600 |
| $ | — |
| $ | 1,335,600 |
| |||||||
Mark R. James | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Anne T. Madden | $ | — |
| $ | 868,500 |
| $ | 868,500 |
| $ | — |
| $ | 868,500 |
| |||||||
Rajeev Gautam | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Timothy O. Mahoney | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Benefits and Perquisites | Darius Adamczyk | $ | 32,434 |
| $ | — |
| $ | — |
| $ | — |
| $ | 32,434 |
| ||||||
Gregory P. Lewis | $ | 10,577 |
| $ | — |
| $ | — |
| $ | — |
| $ | 14,102 |
| |||||||
Mark R. James | $ | 28,242 |
| $ | — |
| $ | — |
| $ | — |
| $ | 28,242 |
| |||||||
Anne T. Madden | $ | 12,633 |
| $ | — |
| $ | — |
| $ | — |
| $ | 16,845 |
| |||||||
Rajeev Gautam | $ | 15,409 |
| $ | — |
| $ | — |
| $ | — |
| $ | 20,545 |
| |||||||
Timothy O. Mahoney | $ | 14,974 |
| $ | — |
| $ | — |
| $ | — |
| $ | 19,965 |
| |||||||
All Other-Payments/Benefits | Darius Adamczyk | $ | 118,539 |
| $ | — |
| $ | — |
| $ | — |
| $ | 118,539 |
| ||||||
Gregory P. Lewis | $ | 152,554 |
| $ | — |
| $ | — |
| $ | — |
| $ | 152,554 |
| |||||||
Mark R. James | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 1,582,302 |
| |||||||
Anne T. Madden | $ | 201,153 |
| $ | — |
| $ | — |
| $ | — |
| $ | 414,522 |
| |||||||
Rajeev Gautam | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Timothy O. Mahoney | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | — |
| |||||||
Total | Darius Adamczyk | $ | 13,350,973 |
| $ | — |
| $ | — |
| $ | 4,065,000 |
| $ | 17,415,973 |
| ||||||
Gregory P. Lewis | $ | 2,473,131 |
| $ | 1,335,600 |
| $ | 1,335,600 |
| $ | 1,056,000 |
| $ | 5,638,256 |
| |||||||
Mark R. James | $ | 4,828,242 |
| $ | — |
| $ | — |
| $ | 996,000 |
| �� $ | 7,406,544 |
| |||||||
Anne T. Madden | $ | 2,523,786 |
| $ | 868,500 |
| $ | 868,500 |
| $ | 1,102,000 |
| $ | 5,481,867 |
| |||||||
Rajeev Gautam | $ | 2,370,409 |
| $ | — |
| $ | — |
| $ | 976,000 |
| $ | 4,136,545 |
| |||||||
Timothy O. Mahoney | $ | 3,336,724 |
| $ | — |
| $ | — |
| $ | 1,681,000 |
| $ | 6,129,965 |
| |||||||
| Payments and Benefits | Named Executive Officer | Termination by the Company Without Cause | Death | Disability | Change in Control—No Termination of Employment | Change in Control—Termination of Employment by Company Without Cause, By NEO for Good Reason or Due to Disability | |||||||||||||||||||||||||||||
| Cash Severance | Mr. Adamczyk | $ | 14,025,000 | $ | — | $ | — | $ | — | $ | 14,025,000 | ||||||||||||||||||||||||
| (Base Salary + Bonus) | Mr. Lewis | $ | 2,550,000 | $ | — | $ | — | $ | — | $ | 3,400,000 | ||||||||||||||||||||||||
| Ms. Madden | $ | 2,603,100 | $ | — | $ | — | $ | — | $ | 3,470,800 | |||||||||||||||||||||||||
| Ms. Dallara | $ | 2,055,000 | $ | — | $ | — | $ | — | $ | 2,740,000 | |||||||||||||||||||||||||
| Mr. Madsen | $ | 2,247,000 | $ | — | $ | — | $ | — | $ | 2,996,000 | |||||||||||||||||||||||||
| ICP | Mr. Adamczyk | $ | — | $ | — | $ | — | $ | 3,910,000 | $ | 3,910,000 | ||||||||||||||||||||||||
| (Year of Termination) | Mr. Lewis | $ | — | $ | — | $ | — | $ | 1,107,000 | $ | 1,107,000 | ||||||||||||||||||||||||
| Ms. Madden | $ | — | $ | — | $ | — | $ | 1,159,000 | $ | 1,159,000 | |||||||||||||||||||||||||
| Ms. Dallara | $ | — | $ | — | $ | — | $ | 804,000 | $ | 804,000 | |||||||||||||||||||||||||
| Mr. Madsen | $ | — | $ | — | $ | — | $ | 827,000 | $ | 827,000 | |||||||||||||||||||||||||
| Performance Cash Units | Mr. Adamczyk | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
| Mr. Lewis | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
| Ms. Madden | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
| Ms. Dallara | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
| Mr. Madsen | $ | — | $ | 511,000 | $ | 511,000 | $ | — | $ | 511,000 | |||||||||||||||||||||||||
| Benefits and Perquisites | Mr. Adamczyk | $ | 37,346 | $ | — | $ | — | $ | — | $ | 37,346 | ||||||||||||||||||||||||
| Mr. Lewis | $ | 13,017 | $ | — | $ | — | $ | — | $ | 17,356 | |||||||||||||||||||||||||
| Ms. Madden | $ | 14,237 | $ | — | $ | — | $ | — | $ | 18,996 | |||||||||||||||||||||||||
| Ms. Dallara | $ | 5,198 | $ | — | $ | — | $ | — | $ | 6,930 | |||||||||||||||||||||||||
| Mr. Madsen | $ | 8,134 | $ | — | $ | — | $ | — | $ | 10,846 | |||||||||||||||||||||||||
| All Other-Payments/Benefits | Mr. Adamczyk | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
| Mr. Lewis | $ | 192,745 | $ | — | $ | — | $ | — | $ | 192,745 | |||||||||||||||||||||||||
| Ms. Madden | $ | 258,890 | $ | — | $ | — | $ | — | $ | 547,788 | |||||||||||||||||||||||||
| Ms. Dallara | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
| Mr. Madsen | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
| Total | Mr. Adamczyk | $ | 14,062,346 | $ | — | $ | — | $ | 3,910,000 | $ | 17,972,346 | ||||||||||||||||||||||||
| Mr. Lewis | $ | 2,755,762 | $ | — | $ | — | $ | 1,107,000 | $ | 4,717,101 | |||||||||||||||||||||||||
| Ms. Madden | $ | 2,876,227 | $ | — | $ | — | $ | 1,159,000 | $ | 5,196,584 | |||||||||||||||||||||||||
| Ms. Dallara | $ | 2,060,198 | $ | — | $ | — | $ | 804,000 | $ | 3,550,930 | |||||||||||||||||||||||||
| Mr. Madsen | $ | 2,255,134 | $ | 511,000 | $ | 511,000 | $ | 827,000 | $ | 4,344,846 | |||||||||||||||||||||||||
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Explanation of Benefits—Termination Events
EXPLANATION OF BENEFITS—TERMINATION EVENTS
| Benefit/Event | ||||||||||
| Amount and Terms of Payments ( | Change | ||||||||
| •Three years of base salary and bonus for Mr. Adamczyk, and the Other NEOs. •Paid periodically, in cash. •Bonus is equal to target percentage of base salary. •Payment conditioned upon a general release in favor of the Company,non-compete,non-disclosure (indefinite duration), andnon-solicitation covenants (two years for customers and two years for employees) and refraining from certain other misconduct. | • years of base salary and bonus for the Other NEOs. •Amounts are paid in a lump sum within 60 days following the later of the date of termination or the CIC date. | ||||||||
Annual Bonus for the Year of Termination-Cash Payment Annual ICP Plan bonus is payable to NEOs for the year in which a CIC occurs. | •N/A. | •Based on achievement ofpre-established ICP goals and the MDCC’s assessment of other relevant criteria, for the stub period ending on the CIC (as defined in the ICP Plan) date, prorated through the CIC date. •Paid in cash at the time ICP awards are typically paid to Honeywell executives for the year in which a CIC occurs, but only if the employee is actively employed on the payment date, has been involuntarily terminated other than for cause or has terminated employment for good reason. | ||||||||
Performance Cash Units Performance Cash Unit awards are paid out in the event of death, disability and a qualifying termination of employment upon a CIC. | •Only Mr. | •Upon a CIC, unvested PCUs remain outstanding to the extent assumed by the successor. Following a CIC, unvested PCUs would vest on a pro rata basis in the event of an involuntary termination other than for cause or a voluntary termination for good reason, within 2 years of the CIC event. For a performance cycle that has already concluded, payout would be based on actual performance. For a performance cycle in progress, the prorated payout would be based on target performance. The “Change in Control-Termination of Employment” column includes the full payout for the | ||||||||
| 90 | | Notice and Proxy Statement | 2022 | ||||||
Benefit/Event | Amount and Terms of Payments (Other Than Upon a Change In Control) | Change In Control Provisions | ||||||||
Certain Benefits and Perquisites Termination of employment without cause; CIC, voluntary termination of employment for good reason. | • •Medical and dental benefits are continued during the severance period at active employee contribution rates. | • •Medical and dental benefits are continued during the severance period at active employee contribution rates. | ||||||||
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Other Benefits | • | •If employment terminated upon CIC, service credit for pension purposes during the first 12 months of the severance period. Additional 3 years of age & service credit for pension purposes for | ||||||
Excise Tax Reimbursement
Impact On Equity-Based Awards
gross-ups.
Named Executive Officer | In-the-Money Value of Unvested Stock Options | Unvested RSUs | Unvested PSUs(1) | |||||||||
Darius Adamczyk | $ | 19,257,109 |
| $ | 8,064,651 |
| $ | 29,377,634 |
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Gregory P. Lewis | $ | 3,088,105 |
| $ | 3,337,158 |
| $ | 658,558 |
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Mark R. James | $ | 7,797,534 |
| $ | 3,746,559 |
| $ | 12,353,066 |
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Anne T. Madden | $ | 3,343,573 |
| $ | 3,315,918 |
| $ | 1,795,016 |
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Rajeev Gautam | $ | 5,851,197 |
| $ | 1,906,998 |
| $ | 8,572,405 |
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Timothy O. Mahoney | $ | 10,989,965 |
| $ | 5,059,368 |
| $ | 17,777,349 |
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| Named Executive Officer | In-the-Money Value of Unvested Stock Options | Unvested RSUs | Unvested PSUs(1) | |||||||||||||||||
| Mr. Adamczyk | $ | 13,625,899 | $ | 22,020,741 | $ | 7,856,935 | ||||||||||||||
| Mr. Lewis | $ | 3,680,750 | $ | 4,919,168 | $ | 2,442,069 | ||||||||||||||
| Ms. Madden | $ | 3,768,060 | $ | 5,471,094 | $ | 2,442,069 | ||||||||||||||
| Ms. Dallara | $ | 2,942,265 | $ | 4,683,969 | $ | 1,990,645 | ||||||||||||||
| Mr. Madsen | $ | 2,507,520 | $ | 3,799,677 | $ | 1,603,998 | ||||||||||||||
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Termination orTERMINATION OR CIC Impact On Outstanding Awards
IMPACT ON OUTSTANDING AWARDS
Plan | Treatment of Stock Options, | ||||
| •RSUs become vested in full upon death or disability. •Following termination of employment, unless otherwise agreed by the Company pursuant to the terms of the plan, participants (or their beneficiaries) have until the earlier of the original expiration date or the following period in which to exercise vested options:
–Three (3) years in the event of death, disability or a voluntary or involuntary termination (other than for cause) after qualifying for “early retirement” (age 55 and 10 years of service) or “full retirement” (age 60 and 10 years of service);
–One (1) year in the case of any other involuntary termination without cause; and
–Thirty (30) days in the case of a voluntary termination. •These rules are hereinafter referred to as the | ||||
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2016 Stock Incentive Plan of Honeywell International Inc. and its Affiliates | •The Double Trigger CIC Rules apply to unvested stock options and RSUs under this plan. Double trigger vesting also applies to PSUs awarded under this plan where the awards are rolled over or replaced by the successor, with vesting on a pro rata basis at target for incomplete performance periods, and based on the actual earned award for completed performance cycles, and paid within 90 days of a participant’s termination of employment, either by the successor without cause or by the participant for good reason (that is, “double trigger” vesting), within two years following a CIC. RSU and PSU awards that are not rolled over or replaced by the successor vest immediately upon the CIC. •The In the case of Ms. Dallara, the Company agreed that her vested options will expire on the first anniversary of the effective date of her resignation. •There is no acceleration of vesting of awards upon reaching retirement | ||||
Defined Terms Used in This Section
| 92 | | Notice and Proxy Statement | 2022 | ||||||
| Term | |||||
| Summary of Definition | ||||
Change in Control | •The acquisition of 30% or more of the Company's common stock; •The purchase of all or part of the common stock pursuant to a tender offer or exchange offer; •A merger where Honeywell does not survive as an independent, publicly-owned corporation; •A sale of substantially all of Honeywell’s assets; or •A substantial change in Honeywell’s Board over atwo-year period. •Additionally, under the Senior Severance Plan, any event that the MDCC, in its discretion, determines to be a Change in Control for purposes of that plan; provided that under the | ||||
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Termination for Cause | •Clear and convincing evidence of a significant violation of the Company’s Code of Business Conduct; •The misappropriation, embezzlement, or willful destruction of Company property of significant value; •The willful failure to perform, gross negligence or intentional misconduct of significant duties that results in material harm to the business of the Company; •The conviction (treating a nolo contendere plea as a conviction) of a felony (whether or not any right to appeal has been or may be exercised); •The failure to cooperate fully in a Company investigation or to be fully truthful when providing evidence or testimony in such investigation; or •Clear and convincing evidence of the willful falsification of any financial records of the Company that are used in compiling the Company’s financial statements or related disclosures, with the intent of violating Generally Accepted Accounting Principles or, if applicable, International Financial Reporting Standards. | |||
Termination for Good Reason | •A material diminution in the NEO’s authority, duties, or responsibilities; •A material decrease in base compensation; •A material reduction in the aggregate benefits available to the NEO where such reduction does not apply to all similarly-situated employees; •Any geographic relocation of the NEO’s position to a location that is more than 50 miles from his or her previous work location; •Any action that constitutes a constructive discharge; or •The failure of a successor to assume these obligations under the Senior Severance Plan. | |||
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As permitted by the SEC rules, the median employee utilized for the 2019 pay ratio disclosure is the same median employee identified and used for the 2018 CEO pay ratio as there were no changes to our employee population or employee compensation arrangements during 2019 that would result in a significant change to our pay ratio disclosure. We identified our median employee using our global employee population as of November 1, 2018 (the “Determination Date”).
CEO.
•For purposes of the 2021 pay ratio disclosure, Honeywell identified a new median employee using our global employee population as of October 31, 2021 (Determination Date). We consideredselected October 31 as the Determination Date, as it was a date within the last three months of 2021, and would allow sufficient time to gather the information to identify the median employee given the global scope of our operations.
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Total U.S. Employees (1) |
| 54,192 | ||||||||||
Totalnon-U.S. Employees |
|
| 65,871 (no exclusions) | |||||||||
Total Global Workforce |
| 120,063 | ||||||||||
Total U.S. Employees |
| 54,192 | ||||||||||
Totalnon-U.S. Employees |
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Total Global Workforce |
| 114,851 | ||||||||||
For
year, was $75,529, calculated in accordance with the rules applicable to the Summary Compensation Table (SCT) of this proxy statement. The annual total compensation of thefor our median employee of our Company (other than our CEO) was $69,513; and
TheFor 2021, the annual total compensation of the CEO for purposes of determining the CEO Pay Ratio was $20,525,104.
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INDEPENDENT ACCOUNTANTS
(in millions of $) | 2019 | 2018 | ||||||||
Audit Fees |
$ |
17.88 |
|
$ |
20.40 |
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• Annual integrated audit of the Company’s consolidated financial statements, and internal control over financial reporting, statutory audits of foreign subsidiaries, attest services, consents, issuance of comfort letters and review of documents filed with the SEC. | |||
Audit-Related Fees |
$ |
5.64 |
|
$ |
10.27 |
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• Audit-related services in 2019 related primarily to a carve out audit and agreed upon procedures. Audit-related services in 2018 related primarily to thecarve-out audits of Garrett Motion Inc. and Resideo Technologies, Inc. and agreed upon procedures. | |||
Tax Fees |
$ |
0.00 |
|
$ |
0.02 |
|
• No tax services in 2019. Tax compliance services in 2018 related primarily to global employment tax services. | |||
All Other Fees | $ | 0.00 |
| $ | 0.00 |
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Total Fees | $ | 23.52 |
| $ | 30.69 |
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| (In Millions of $) | 2021 | 2020 | |||||||||||||||||||||
| Audit Fees | $16.94 | $ | 16.93 | •Annual integrated audit of the Company’s consolidated financial statements, and internal control over financial reporting, statutory audits of foreign subsidiaries, attest services, and review of documents filed with the SEC. | |||||||||||||||||||
| Audit-Related Fees | $ | 4.71 | $ | 1.76 | •Audit-related services in both 2021 and 2020 related primarily to carve out audits, consents, issuance of comfort letters, and agreed upon procedures. The year-over-year fee increase was primarily attributable to higher costs for carve-out audits in 2021, including the Quantinuum business. | ||||||||||||||||||
| Tax Fees | $ | 0.03 | — | •Fees related to tax compliance in 2021. No tax services in 2020. | |||||||||||||||||||
| All Other Fees | $ | 0.31 | — | •Fees related to advisory and consulting services. No services in 2020. | |||||||||||||||||||
| Total Fees | $ | 21.99 | $ | 18.69 | |||||||||||||||||||
•The Audit Committee reviews andpre-approves an annual budget for specific categories ofnon-audit services (that are detailed as to the particular services) which Deloitte is to be permitted to provide (those categories do not include any of the prohibited services in the auditor independence provisions of the Sarbanes-Oxley Act of 2002). This review includes an evaluation of the possible impact of the provision of such services by Deloitte on the firm’s independence in performing its audit and audit-related services.
•The Audit Committee reviews thenon-audit services performed by, and amount of fees paid to, Deloitte, by category in comparison to the pre-approved budget.
The engagement of Deloitte to providenon-audit services that do not fall within a specific category ofpre-approved services, or that would result in the total fees payable to Deloitte in any category to exceed thepre-approved amount, requires the prior approval of the Audit Committee. Between regularly scheduled meetings of the Audit Committee, the Audit Committee Chair may represent the entire committee for purposes of review and approval of any such engagement, and the Chair is required to report on all such interim reviews at the committee’s next regularly scheduled meeting.
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Kevin Burke
Jaime Chico Pardo (ex officio)
D. Scott Davis
Linnet F. Deily
Judd Gregg
Robin L. Washington
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 | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR THE APPROVAL OF THE APPOINTMENT OF DELOITTE AND TOUCHE LLP AS INDEPENDENT ACCOUNTANTS. | ||||
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PROPOSAL 4: SHAREOWNER PROPOSAL-
LET SHAREHOLDERS VOTE ON BYLAW AMENDMENTS
This proposal has been submitted by John Chevedden, 2215 Nelson Ave., No. 205 Redondo Beach, CA 90278 (the beneficial owner of 50 shares of common stock):
Shareholders request that the Board of Directors amend the bylaws to require that any amendment to bylaws that is approved by the board shall be subject to anon-binding shareholder vote as soon as practical unless such amendment is already subject to a binding shareholder vote.
It is important that bylaw amendments take into consideration the impact that such amendments can have on reducing the accountability of directors and managers and/or on limiting the rights of shareholders. For example, Directors could adopt a narrowly crafted exclusive forum bylaw to suit the unique circumstances of the company.
A proxy advisor recently adopted a policy to vote against directors who unilaterally adopt bylaw provisions or amendments to the articles of incorporation that materially diminish shareholder rights.
Our directors could be neutral on this proposal to obtain feedback from shareholders without interference. However if our directors oppose this proposal then it would be useful for our directors to give recent examples of companies whose directors took the initiative and adopted bylaws that primarily benefitted shareholders.
Please vote yes:Let Shareholders Vote on Bylaw Amendments–Proposal 4
The Honeywell Board recommends that shareowners voteAGAINST this proposal for the following reasons:
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PROPOSAL 4: SHAREOWNER PROPOSAL— SPECIAL SHAREHOLDER MEETING IMPROVEMENT BOARD RECOMMENDATION |
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April 23, 2018—The Board: (i) changedHoneywell Board recommends that shareowners vote AGAINSTthis proposal for the ownership threshold from 20% tofollowing reasons:
Shareowners holding 15% of our outstanding shares already have the right to call a special meeting (either in-person or in a virtual format) at any time.February 12, 2016—As a result of shareowner feedback, the Board: (i) allowed third-party compensation for Board nominees as long as the compensation is disclosed; (ii) limited indemnification obligations of shareowners who nominate Board members to actionssignificant strategic concerns that require attention prior to the electionnext annual meeting.
Our robust shareowner outreach and engagement program provides shareowners with numerous avenues to voice their opinions and encourage Board accountability and responsiveness to shareowner feedback.December 11, 2015—The Board: (i) implemented a proxy access amendment permitting up to 20 stockowners, holding 3% or more ofshare perspectives on corporate governance, executive compensation, and related matters. For additional information about the Company’s outstanding stockshareowner engagement program and actions it has taken in response to these discussions, please see “Corporate Governance--Shareowner Outreach and Engagement” above.
In an unsolicited change in control scenario, the ability for December 12, 2014—best interests of all shareowners. The Board amendedis best-positioned to weigh the merits of takeover offers, negotiate on behalf of all shareowners, and protect shareowners from abusive takeover tactics.
September 27, 2013—The Board added an article selecting Delaware, the Company’s jurisdictioninterests of incorporation, as the forum for adjudication of disputes.
December 14, 2012—The Board amended theBy-laws to allow the Chair of the Corporate Governance and Responsibility committee to call special meetings of the Board.
April 26, 2010—The Board lowered the minimum threshold forour shareowners, to be able to call special meetings to 20% of the outstanding shares.
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15% threshold for shareowners’ right to call a special meeting of shareowners (reduced from 20% in 2018 in response to shareowner sentiment).
•The adoption of a proxy accessBy-laws amendment (instituted in 2015 in response to shareowner sentiment).
•The abilityestablishment of shareownersan independent Lead Director role and designation of the Lead Director as a point of contact for shareowner communications (instituted in 2014 in response to submit proposalsshareowner feedback). See “Communicating With the Board” on page 111.
•The elimination of supermajority voting provisions in our charter documents.
•Shareowner approval of poison pills.
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Adopting the proposal would conflict with Delaware law and result in a costly and burdensome shareowner approval process that we believe is unnecessary, especially given our Board’s commitment to strong governance practices and outreach to our shareowners. Honeywell has voluntarily taken actions to increase shareowner rights, including through our currentBy-law amendment procedures which already grant our shareowners the right to amend ourBy-laws on their own, and which continue to reflect the governance framework that best protects our shareowners’ rights without imposing significant administrative burden and expense. The Board believes that adoption of this proposal is neither appropriate nor in the best interest of our shareowners.
| THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEAGAINST THIS PROPOSAL. |
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PROPOSAL 5: SHAREOWNER PROPOSAL-
REPORT ON LOBBYING ACTIVITIES AND EXPENDITURES
This proposal has been submitted by Mercy Investment Services, Inc.(co-sponsored by LGPS Central Limited), 2039 North Geyer Road, St. Louis, Missouri 63131 (the beneficial owner of 43 shares of common stock).
Whereas, we believe in full disclosure of our company’s direct and indirect lobbying activities and expenditures to assess whether Honeywell’s lobbying is consistent with Honeywell’s expressed goals and in the best interests of shareowners.
Resolved, the shareowners of Honeywell request the preparation of a report, updated annually, disclosing:
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For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Honeywell is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Corporate Governance and Responsibility Committee and posted on Honeywell’s website.
Supporting Statement
We encourage transparency in Honeywell’s use of funds to lobby. Honeywell spent $53,160,000 from 2010 – 2018 on federal lobbying. This does not include state lobbying expenditures, where Honeywell also lobbies but disclosure is uneven or absent. For example, Honeywell spent $5,629,576 on lobbying in New Jersey for 2010 – 2018. And Honeywell also lobbies abroad, spending between€500,000 –€599,000 on lobbying in Europe for 2017.
We commend Honeywell for ending its membership in the American Legislative Exchange Council (“Charles Koch Ramps Up Investment in ALEC as the Lobbying Group Loses Corporate Funders overFar-Right Ties,”The Intercept,November 29, 2018). However, serious disclosure concerns remain. Honeywell sits on theboard of the Chamber of Commerce, which has spent over $1.5 billion on lobbying since 1998, and belongs to the Business Roundtable, which spent over $50 million on lobbying for 2017 and 2018 and is lobbying against shareholder rights to file resolutions. Unlike its peers Raytheon and United Technologies, Honeywell does not disclose its memberships in, or payments to, trade associations, or the amounts used for lobbying.
We are concerned that Honeywell’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Honeywell is committed to reducing global greenhouse gases and signed an agreement to work with United Nations Environment to combat climate change, yet the Chamber undermined the Paris climate accord. As shareowners, we believe that companies should ensure there is alignment between their own positions and lobbying, including through trade associations.
This proposal received 42.4 percent support in 2019 out of votes cast for and against. We urge Honeywell to expand its lobbying disclosure.
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We
Honeywell has conducted an evaluation of its lobbying activities for alignment with the goals of the Paris Agreement, and has published a report that addresses the topics requested in the proposed resolution.Honeywell further enhanced our political disbursements governance framework to enable go-forward monitoring of how political spending aligns with Honeywell’s sustainability objectives.Honeywell is considered a “trendsetter” in providing transparency into our political contributions and lobbying activities, and we have continued to enhance the breadth and depth of our disclosures to be responsive to our stakeholders.This recognition is consistent with Honeywell’s track record of enhancing our belief thatdisclosures to be responsive to our disclosure in this area already provides investors with more thanshareowners’ need for sufficient information to assess whether Honeywell’s participation in the political process poses any investment risk, including by providing transparency regarding potential reputational risk and accountability for positions of political interest that are promoted by the Company.risk. Our disclosure, including our recently published Climate-Related Lobbying Report, is available on our website at investors.honeywell.cominvestor.honeywell.com (see “Corporate Governance/Political Contributions”“ESG/ESG Information
In considering what to include in our disclosure, we make every effort to be accurate, comprehensive, and detailed, including coverage of the following aspects of our political lobbying and contributions:
Our rationale for engaging in the political process.
A list of our top legislative and regulatory priorities, most of which relate to key elements of our brand promise of making society safer and more energy efficient and improving public infrastructure.
Disclosure on our government relations organization.
Details on management and Board oversight of our lobbying activities.
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Details regarding our exclusively employee-funded political action committee (HIPAC), including all disbursements made by HIPAC to federal, state, and local candidates and organizations.
Discussion of our trade association memberships, including the strategic issues on which we engage, our governance processes, the number of trade associations to which we pay membership dues of $50,000 or more annually, and the aggregate amount of dues paid to such organizations annually.
Streamlined and direct access to our federal, state and local lobbying reports.
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We have received this shareowner proposal seven times in the past eight years, and on each occasion, the proposal has not succeeded in receiving the requisite support. During each of our 2019 summer/fall shareowner engagement meetings, we proactively solicited feedback regarding our political lobbying and contributions disclosure from the shareowners who accepted our invitation to engage. The discussions were robust, and our largest shareowners shared that lobbying activities and membership in trade associations were not a source of concern or investment risk. Moreover, the majority of our largest shareowners told us that they are satisfied with our disclosure on lobbying, membership in trade associations, and political contributions, and find that our Board exerts appropriate oversight over our lobbying activities.
Our shareowners also provided constructive suggestions for enhancing our political contributions disclosure, which we took into account when redesigning our political contributions website to increase ease of access to information and provide additional color on our trade association memberships. These enhancements include:
Additional disclosure related to membership in trade associations, including (i) the number of trade associations that receive $50,000 or greater in annual dues from the Company; (ii) the aggregate membership dues paid to those associations, and (iii) specific discussion of the strategic objectives supported by the Company’s membership in those associations; and
User-friendly, streamlined and direct access to available disclosure regarding the Company’s political activities, including direct links to disclosure at the federal, state and local levels.
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Since 2009,
Honeywell has published a report that addresses the topics requested in the proposed resolution.Were we to use corporate funds for any political contributions, such contributions would be made without regard toReport. We believe that the personal partisan preferences of Company officers and executives. In addition, any such use of corporate funds would require the prior approvalReport covers each of the Company’s Senior Vice Presidentelements requested in the shareholder resolution.
Honeywell maintains a world-class health, safety, and |
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In 2019, we amended our Corporate Governance Guidelines to bolster our oversight of trade association memberships. Specifically, all 501(c)(6) trade associations to which Honeywell pays membership duesmanaged by a global team of more than $50,000800 trained professionals with extensive knowledge and hundreds of years of collective experience. We apply third-party-certified standards, including ISO 14001 and OHSAS 18001, and industry best practices, which are fully integrated into our operating system. Each of our facilities operates under a Plan-Do-Check-Act management system for identifying and addressing the potential environmental and social impacts of our operations and ensures compliance with regulatory standards:
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We strive always to engage responsibly in the political processexternal communication, actions, operational controls, emergency preparedness, and response planning to ensure that our participation is consistent withthe facility and its stakeholders have the competency needed to address impacts and ensure compliance.
Of the matters explicitly cited in the proponent’s supporting statement, all but one stem from legacy operations unrelated to Honeywell’s current business; Honeywell has proactively worked to identify legacy properties where restoration may be required and engages with local governments and the surrounding communities to responsibly address these matters.With respect to Board oversight, our public policy efforts, including all lobbying activities, political contributions, and payments to trade associationslocal communities and othertax-exempt organizations, are external stakeholders to implement effective solutions. Honeywell does not consider a clean-up complete until the responsibility oflegacy property has been transformed into a valuable asset for the Corporate Governancesurrounding community, whenever possible. For example:
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| 102 | | Notice and | ||||||
Each quarter, we file
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| | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEAGAINST THIS PROPOSAL. | ||||
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If a conflict
•The benefits of the transaction to Honeywell;
•The terms of the transaction and whether they arearm’s-length and in the ordinary course of the Company’s business;
•The direct or indirect nature of the related person’s interest in the transaction;
•The size and expected term of the transaction; and
•Other facts and circumstances that bear on the materiality of the related person transaction under applicable law and listing standards.
| |
| 2022 | |||||||||||
|
|
| ||||||
|
|
| ||||||
|
|
| ||||||
|
|
|
2021.
| Name and Complete Mailing Address | Number of Shares | Percent of Common Stock Outstanding(3) | |||||||||
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | 56,119,426 | (1) | 8.18% | ||||||||
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | 41,185,153 | (2) | 6.0% | ||||||||
Components of Beneficial Ownership (Number of Shares) | ||||||||||||||||
Name(1) | Common Stock Beneficially Owned | Right To Acquire(2) | Other Stock-Based Holdings(3) | Total Number of Shares(4) | ||||||||||||
Darius Adamczyk |
| 119,989 |
|
| 1,007,081 |
|
| 3,633 |
|
| 1,130,703 |
| ||||
Duncan B. Angove |
| — |
|
| 574 |
|
| 2,711 |
|
| 3,285 |
| ||||
William S. Ayer |
| 4,528 |
|
| 7,696 |
|
| 3,186 |
|
| 15,410 |
| ||||
Kevin Burke |
| 17,508 |
|
| 20,425 |
|
| 9,830 |
|
| 47,763 |
| ||||
Jaime Chico Pardo |
| 500 |
|
| 26,988 |
|
| 35,309 |
|
| 62,797 |
| ||||
D. Scott Davis |
| 22,359 |
|
| 16,488 |
|
| 18,871 |
|
| 57,718 |
| ||||
Linnet F. Deily |
| 5,906 |
|
| 10,264 |
|
| 16,939 |
|
| 33,109 |
| ||||
Deborah Flint (joined the Board 10/7/19) |
| — |
|
| — |
|
| 567 |
|
| 567 |
| ||||
Judd Gregg |
| 9,443 |
|
| 21,738 |
|
| 14,454 |
|
| 45,635 |
| ||||
Clive Hollick |
| 19,343 |
|
| 13,416 |
|
| 24,970 |
|
| 57,729 |
| ||||
Grace D. Lieblein |
| 5,555 |
|
| 13,416 |
|
| 6,358 |
|
| 25,329 |
| ||||
Raymond T. Ordierno (joined the Board 2/28/20) |
| — |
|
| — |
|
| — |
|
| — |
| ||||
George Paz |
| 15,181 |
|
| 21,738 |
|
| 12,524 |
|
| 49,443 |
| ||||
Robin L. Washington |
| 5,535 |
|
| 13,416 |
|
| 7,944 |
|
| 26,895 |
| ||||
Gregory P. Lewis |
| 14,603 |
|
| 136,376 |
|
| 916 |
|
| 151,895 |
| ||||
Mark R. James |
| 178,701 |
|
| 705,119 |
|
| 6,051 |
|
| 889,871 |
| ||||
Anne T. Madden |
| 11,814 |
|
| 175,395 |
|
| 39,342 |
|
| 226,551 |
| ||||
Rajeev Gautam |
| 43,130 |
|
| 209,917 |
|
| 2,645 |
|
| 255,361 |
| ||||
Timothy O. Mahoney |
| 209,917 |
|
| 710,498 |
|
| 85,105 |
|
| 1,005,520 |
| ||||
All directors, nominees and executive officers as a group, including the above-named persons (24 people)
|
|
767,246 |
|
|
3,473,299 |
|
|
293,806 |
|
|
4,534,351 |
| ||||
|
|
|
|
| |
| ||||||||||
|
Common
Stock
Beneficially
OwnedDarius Adamczyk 147,903 1,257,857 4,719 1,410,479 Duncan B. Angove 862 3,341 4,581 8,784 William S. Ayer 6,011 12,788 3,891 22,690 Kevin Burke 22,056 18,508 10,805 51,369 D. Scott Davis 25,817 15,356 20,216 61,389 Deborah Flint 485 1,287 2,278 4,050 Judd Gregg 15,485 18,508 16,785 50,778 Rose Lee 9 0 267 276 Grace D. Lieblein 8,411 15,356 6,731 30,498 George Paz 20,251 21,580 13,610 55,441 Robin L. Washington 10,175 15,356 10,015 35,546 Gregory P. Lewis 31,518 212,043 1,296 244,857 Anne T. Madden 32,006 228,515 40,343 300,864 Que Thanh Dallara 6,302 108,726 597 115,625 Michael R. Madsen 35,002 153,519 1,483 190,004 All directors, nominees and executive officers as a group, including the above-named persons (20 people) 429,672 2,542,047 139,992 3,111,711
Proxy Materials are Available at www.proxyvote.com.You will need to enter the 16-digit control number located on the Notice of Internet Availability or proxy card. | ||||||||
| 106 | | Notice and Proxy | ||||||
I
24, 2022.
Brokers
24, 2022.
The
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21, 2022.
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| | 107 | |||||||||||||
|
IREVOKING YOUR PROXY
•Sending a timely written statement to that effect to the Corporate Secretary of Honeywell;
•Submitting a properly signed proxy with a later date;
•Voting by telephone, mobile device or via the Internet at a later time (if initially able to vote in that manner) so long as such vote or voting direction is received by the applicable date and time set forth above for shareowners of record and participants in Honeywell savings plans; or
•Voting in person at the Annual Meeting (except for shares held in the savings plans).
I
Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present.
Icompensation and the auditor appointment, respectively.
I
I
INY 11717 and including their name, the name of their broker or other nominee and their account number(s). Beneficial owners may also contact Broadridge if they received multiple copies of the proxy materials and prefer to receive a single copy in the future.
| 108 | | Notice and Proxy Statement | 2022 | ||||||
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IELECTRONIC ACCESS TO THE PROXY MATERIALS
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Shareowners of Record.If you are a registered shareowner, you may request electronic delivery when submitting your vote for this meeting on the Internet at www.proxyvote.com.Beneficial Holders.If your shares are not registered in your name, check the information provided to you by your bank or broker, or contact your bank or broker for information on electronic delivery service.Attendance
Ifvote your shares in advance using one of the methods described in this Proxy Statement to ensure that your vote will be represented at the Annual Meeting.
Materials Needed to Participate in Annual Meeting.You will need the 16-digit control number included on your Notice of Internet Availability, proxy card or voting instruction form (if you received a printed copy of the Proxy Materials) or included in the email to you (if you received your proxy materials by email) in order to access the meeting, vote your shares and submit questions. If you do not have your control number, you will not be able to attend, vote your shares, or submit questions before or during the Annual Meeting. Please contact Honeywell Investor Relations at investorrelations@honeywell.com for assistance if you are Technical Assistance.There will be technicians ready to assist you with any technical difficulties you may |
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Notice and Proxy Statement | 2022 | | 109 | |||||||||
If you are not a shareowner, then you will be required as part of the pre-registration process to provide a signed legal proxy from the record holder to you. If you are receiving the legal proxy from a street name shareowner, then you must provide both a legal proxy from the record holder (i.e., the bank, broker or other holder of record) to the street name holder that is assignable as well as a legal proxy from the street name holder to you. You must also bring the legal proxy document(s) to the meeting. We reserve the right to limit the number of representatives for any shareowner who may attend the meeting.
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IDIRECTOR NOMINATIONS FOR 20212023 ANNUAL MEETING
The CGRC evaluates candidates recommended by shareowners using the same criteria as for other candidates recommended by existing Board members or other persons, as described above under “Nomination and Election Process”.
| 110 | | Notice and Proxy Statement | 2022 | ||||||
I
I
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Visit Our Website at investor.honeywell.com.
Victor
MILLER
Corporate Secretary, and Chief Compliance Officer
March 12, 2020
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| ||||||||||
|
NON-GAAP FINANCIAL MEASURES
($M) | 2016 | 2017 | 2018 | 2019 | ||||||||||||
Cash provided by operating activities | $ | 5,498 |
| $ | 5,966 |
| $ | 6,434 |
| $ | 6,897 |
| ||||
Expenditures for property, plant and equipment |
| (1,095 | ) |
| (1,031 | ) |
| (828 | ) |
| (839 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Free cash flow |
| 4,403 |
|
| 4,935 |
|
| 5,606 |
|
| 6,058 |
| ||||
Separation cost payments |
| — |
|
| — |
|
| 424 |
|
| 213 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Adjusted free cash flow | $ | 4,403 |
| $ | 4,935 |
| $ | 6,030 |
| $ | 6,271 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Net income attributable to Honeywell | $ | 4,812 |
| $ | 1,545 |
| $ | 6,765 |
| $ | 6,143 |
| ||||
Separation costs, includes net tax impacts |
| — |
|
| 14 |
|
| 732 |
|
| — |
| ||||
Pensionmark-to-market expense(1) |
| 215 |
|
| 67 |
|
| 28 |
|
| 94 |
| ||||
Debt refinancing expense(1) |
| 93 |
|
| — |
|
| — |
|
| — |
| ||||
Impacts from U.S. Tax Reform |
| — |
|
| 3,891 |
|
| (1,494 | ) |
| (281 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Adjusted net income attributable to Honeywell | $ | 5,120 |
| $ | 5,517 |
| $ | 6,031 |
| $ | 5,956 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Cash provided by operating activities | $ | 5,498 |
| $ | 5,966 |
| $ | 6,434 |
| $ | 6,897 |
| ||||
÷ Net income attributable to Honeywell | $ | 4,812 |
| $ | 1,545 |
| $ | 6,765 |
| $ | 6,143 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Operating cash flow conversion |
| 114 | % |
| 386 | % |
| 95 | % |
| 112 | % | ||||
|
|
|
|
|
|
|
| |||||||||
Adjusted free cash flow | $ | 4,403 |
| $ | 4,935 |
| $ | 6,030 |
| $ | 6,271 |
| ||||
÷ Adjusted net income attributable to Honeywell | $ | 5,120 |
| $ | 5,517 |
| $ | 6,031 |
| $ | 5,956 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Adjusted free cash flow conversion % |
| 86 | % |
| 89 | % |
| 100 | % |
| 105 | % | ||||
|
|
|
|
|
|
|
| |||||||||
|
| ($M) | 2020 | 2021 | ||||||||||||
| Cash provided by operating activities | $ | 6,208 | $ | 6,038 | ||||||||||
| Expenditures for property, plant, and equipment | (906) | (895) | ||||||||||||
| Garrett Cash Receipts | — | 586 | ||||||||||||
| Free cash flow | $ | 5,302 | 5,729 | |||||||||||
equipment plus cash receipts from Garrett.
| 2018 | 2019 | 2020 | 2021 | |||||||||||||||||||||||
Earnings per share of common stock—assuming dilution(1) | $ | 8.98 | $ | 8.41 | $ | 6.72 | $ | 7.91 | ||||||||||||||||||
Pension mark-to-market expense(2) | 0.04 | 0.13 | 0.04 | 0.05 | ||||||||||||||||||||||
Separation related tax adjustment(3) | — | — | (0.26) | — | ||||||||||||||||||||||
Changes in fair value for Garrett equity securities(4) | — | — | — | (0.03) | ||||||||||||||||||||||
Garrett related adjustment(5) | — | — | 0.60 | 0.01 | ||||||||||||||||||||||
| Impacts from U.S. Tax Reform | (1.98) | (0.38) | — | — | ||||||||||||||||||||||
Gain on sale of retail footwear business(6) | — | — | — | (0.11) | ||||||||||||||||||||||
Expense related to UOP Matters(7) | — | — | — | 0.23 | ||||||||||||||||||||||
Separation costs(8) | 0.97 | — | — | — | ||||||||||||||||||||||
| Adjusted earnings per share of common stock—assuming dilution | $ | 8.01 | $ | 8.16 | $ | 7.10 | $ | 8.06 | ||||||||||||||||||
| Less: EPS, attributable to spin-offs | 0.62 | — | — | — | ||||||||||||||||||||||
| Adjusted earnings per share of common stock - assuming dilution, excluding spin-off impact | $ | 7.39 | $ | 8.16 | $ | 7.10 | $ | 8.06 | ||||||||||||||||||
| 2016 | 2017 | 1Q18 | 2Q18 | 3Q18 | 4Q18 | 2018 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 2019 | |||||||||||||||||||||||||||||||||||||
Earnings per share of common stock—assuming dilution(1) | $ | 6.21 |
| $ | 2.00 |
| $ | 1.89 |
| $ | 1.68 |
| $ | 3.11 |
| $ | 2.31 |
| $ | 8.98 |
| $ | 1.92 |
| $ | 2.10 |
| $ | 2.23 |
| $ | 2.16 |
| $ | 8.41 |
| ||||||||||||
Pensionmark-to-market expense(2) |
| 0.28 |
|
| 0.09 |
|
| — |
|
| — |
|
| — |
|
| 0.04 |
|
| 0.04 |
|
| — |
|
| — |
|
| — |
|
| 0.13 |
|
| 0.13 |
| ||||||||||||
Debt refinancing expense(3) |
| 0.12 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| ||||||||||||
Separation costs(4) |
| — |
|
| 0.02 |
|
| 0.06 |
|
| 0.46 |
|
| 0.31 |
|
| 0.14 |
|
| 0.97 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| ||||||||||||
Impacts from U.S. Tax Reform |
| — |
|
| 5.04 |
|
| — |
|
| (0.02 | ) |
| (1.39 | ) |
| (0.58 | ) |
| (1.98 | ) |
| — |
|
| — |
|
| (0.15 | ) |
| (0.23 | ) |
| (0.38 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||
Adjusted earnings per share of common stock—assuming dilution | $ | 6.61 |
| $ | 7.15 |
| $ | 1.95 |
| $ | 2.12 |
| $ | 2.03 |
| $ | 1.91 |
| $ | 8.01 |
| $ | 1.92 |
| $ | 2.10 |
| $ | 2.08 |
| $ | 2.06 |
| $ | 8.16 |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||
Less: EPS, attributable to spin-offs(5) |
| 0.25 |
|
| 0.19 |
|
| 0.13 |
|
| 0.05 |
|
| 0.62 |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||
Adjusted earnings per share of common stock—assuming dilution, excludingspin-off impact | $ | 1.70 |
| $ | 1.93 |
| $ | 1.90 |
| $ | 1.86 |
| $ | 7.39 |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| |
| ||||||||
|
(3) Reconciliation of Adjusted Net Income
($M) | 2016 | 2017 | 2018 | 2019 | ||||||||||||
Net income attributable to Honeywell | $ | 4,812 |
| $ | 1,545 |
| $ | 6,765 |
| $ | 6,143 |
| ||||
Separation costs, includes net tax impacts |
| — |
|
| 14 |
|
| 732 |
|
| — |
| ||||
Pensionmark-to-market expense(1) |
| 215 |
|
| 67 |
|
| 28 |
|
| 94 |
| ||||
Debt refinancing expense(1) |
| 93 |
|
| — |
|
| — |
|
| — |
| ||||
Impacts from U.S. Tax Reform |
| — |
|
| 3,891 |
|
| (1,494 | ) |
| (281 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Adjusted net income attributable to Honeywell | $ | 5,120 |
| $ | 5,517 |
| $ | 6,031 |
| $ | 5,956 |
| ||||
|
|
|
|
|
|
|
| |||||||||
|
(4) Reconciliation of Segment Profit to Operating Income and Calculation of Segment Profit and Operating Income Margins
($M) | 2016 | 2017 | 2018 | 2019 | ||||||||||||
Segment profit | $ | 7,186 |
| $ | 7,690 |
| $ | 8,190 |
| $ | 7,739 |
| ||||
Stock compensation expense(1) |
| (184 | ) |
| (176 | ) |
| (175 | ) |
| (153 | ) | ||||
Repositioning, Other(2,3) |
| (674 | ) |
| (962 | ) |
| (1,100 | ) |
| (598 | ) | ||||
Pension and other postretirement service costs(4) |
| (277 | ) |
| (249 | ) |
| (210 | ) |
| (137 | ) | ||||
|
|
|
|
|
|
|
| |||||||||
Operating income | $ | 6,051 |
| $ | 6,303 |
| $ | 6,705 |
| $ | 6,851 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Segment profit | $ | 7,186 |
| $ | 7,690 |
| $ | 8,190 |
| $ | 7,739 |
| ||||
÷ Sales | $ | 39,302 |
| $ | 40,534 |
| $ | 41,802 |
| $ | 36,709 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Segment profit margin % |
| 18.3 | % |
| 19.0 | % |
| 19.6 | % |
| 21.1 | % | ||||
|
|
|
|
|
|
|
| |||||||||
Operating income | $ | 6,051 |
| $ | 6,303 |
| $ | 6,705 |
| $ | 6,851 |
| ||||
÷ Sales | $ | 39,302 |
| $ | 40,534 |
| $ | 41,802 |
| $ | 36,709 |
| ||||
|
|
|
|
|
|
|
| |||||||||
Operating income margin % |
| 15.4 | % |
| 15.6 | % |
| 16.0 | % |
| 18.7 | % | ||||
|
|
|
|
|
|
|
| |||||||||
|
|
|
|
| ($M) | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||||||||||||||
| Segment profit | $ | 8,190 | $ | 7,739 | $ | 6,665 | $ | 7,212 | ||||||||||||||||||||||||
Stock compensation expense(1) | (175) | (153) | (168) | (217) | ||||||||||||||||||||||||||||
Repositioning, Other(2,3) | (1,100) | (598) | (641) | (636) | ||||||||||||||||||||||||||||
Pension and other postretirement service costs(4) | (210) | (137) | (160) | (159) | ||||||||||||||||||||||||||||
| Operating income | $ | 6,705 | $ | 6,851 | $ | 5,696 | $ | 6,200 | ||||||||||||||||||||||||
| Segment profit | $ | 8,190 | $ | 7,739 | $ | 6,665 | $ | 7,212 | ||||||||||||||||||||||||
| ÷ Sales | $ | 41,802 | $ | 36,709 | $ | 32,637 | $ | 34,392 | ||||||||||||||||||||||||
| Segment profit margin % | 19.6% | 21.1% | 20.4% | 21.0% | ||||||||||||||||||||||||||||
| Operating income | $ | 6,705 | $ | 6,851 | $ | 5,696 | $ | 6,200 | ||||||||||||||||||||||||
| ÷ Sales | $ | 41,802 | $ | 36,709 | $ | 32,637 | $ | 34,392 | ||||||||||||||||||||||||
| Operating income margin % | 16.0% | 18.7% | 17.5% | 18.0% | ||||||||||||||||||||||||||||
(5) Reconciliation of Cash Provided by Operating Activities to Adjusted Free Cash Flow ExcludingSpin-off Impact
($M) | 2016 | 2018 | 2019 | |||||||||
Cash provided by operating activities | $ | 5,498 |
| $ | 6,434 |
| $ | 6,897 |
| |||
Expenditures for property, plant and equipment |
| (1,095 | ) |
| (828 | ) |
| (839 | ) | |||
|
|
|
|
|
| |||||||
Free cash flow |
| 4,403 |
|
| 5,606 |
|
| 6,058 |
| |||
Separation cost payments |
| — |
|
| 424 |
|
| 213 |
| |||
|
|
|
|
|
| |||||||
Adjusted free cash flow | $ | 4,403 |
| $ | 6,030 |
| $ | 6,271 |
| |||
|
| |||||||||||
Spin-off impact(1) |
| (921 | ) |
| (668 | ) | ||||||
|
|
|
| |||||||||
Adjusted free cash flow, excludingspin-off impact | $ | 3,482 |
| $ | 5,362 |
| ||||||
|
|
|
| |||||||||
|
(6) Reconciliation of Sales to Sales ExcludingSpin-off Impact
($M) | 2017 | 2018 | ||||||
Sales | $ | 40,534 |
| $ | 41,802 |
| ||
Spin-off impact(1) |
| (7,630 | ) |
| (6,551 | ) | ||
|
|
|
| |||||
Sales excludingspin-off impact | $ | 32,904 |
| $ | 35,251 |
| ||
|
|
|
|
|
(7)(4) Reconciliation of Organic Sales % Change
| 1Q19 | 2Q19 | 3Q19 | 4Q19 | 2019 | ||||||||||||||||
Reported sales % change |
| (15 | )% |
| (15 | )% |
| (16 | )% |
| (2 | )% |
| (12 | )% | |||||
Less: Foreign currency translation |
| (3 | )% |
| (2 | )% |
| (1 | )% |
| — | % |
| (1 | )% | |||||
Less: Acquisitions, divestitures and other, net |
| (20 | )% |
| (18 | )% |
| (18 | )% |
| (4 | )% |
| (16 | )% | |||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Organic sales % change |
| 8 | % |
| 5 | % |
| 3 | % |
| 2 | % |
| 5 | % | |||||
|
|
|
|
|
|
|
|
|
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| 1Q21 | 2Q21 | 3Q21 | 4Q21 | 2021 | |||||||||||||||||||||||||
| Reported sales % change | —% | 18% | 9% | (3)% | 5% | ||||||||||||||||||||||||
| Less: Foreign currency translation | 2% | 3% | 1% | (1)% | 1% | ||||||||||||||||||||||||
| Less: Acquisitions, divestitures, and other, net | —% | —% | —% | —% | —% | ||||||||||||||||||||||||
| Organic sales % change | (2)% | 15% | 8% | (2)% | 4% | ||||||||||||||||||||||||
(8)
| ($M) | Twelve Months Ended December 31, 2021 | ||||||||||||||||||||||
| Cash provided by operating activities | $ | 6,038 | |||||||||||||||||||||
| Expenditures for property, plant and equipment | (895) | ||||||||||||||||||||||
| Garrett cash receipts | 586 | ||||||||||||||||||||||
| Free cash flow | 5,729 | ||||||||||||||||||||||
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| $ | 6,038 | |||||||||||||||||||
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| $ | 34,392 | |||||||||||||||||||
| Operating cash flow margin % | 17.6 | % | |||||||||||||||||||||
| Free cash flow | $ | 5,729 | |||||||||||||||||||||
| ÷ Net sales | $ | 34,392 | |||||||||||||||||||||
| Free cash flow margin % | 16.7 | % | |||||||||||||||||||||
Notice and Proxy Statement | 2022 | | |||||||||||
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| 113 | ||||||||||||
| ($M) | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||||||||
| Net Income attributable to Honeywell | $ | 6,765 | $ | 6,143 | $ | 4,779 | $ | 5,542 | ||||||||||||||||||
| Separation related tax adjustment | — | — | (186) | — | ||||||||||||||||||||||
Pension mark-to-market expense(1) | 28 | 94 | 33 | 30 | ||||||||||||||||||||||
| Impacts of U.S. Tax Reform | (1,494) | (281) | — | — | ||||||||||||||||||||||
Garret related adjustment(2) | — | — | 427 | 7 | ||||||||||||||||||||||
| Changes in fair value of equity related securities | — | — | — | (19) | ||||||||||||||||||||||
| Gain on sale of retail footwear business | — | — | — | (76) | ||||||||||||||||||||||
| Expense related to UOP Matters | — | — | — | 160 | ||||||||||||||||||||||
| Separation Costs, includes net tax impacts | 732 | — | — | — | ||||||||||||||||||||||
| Adjusted net income attributable to Honeywell | $ | 6,031 | $ | 5,956 | $ | 5,053 | $ | 5,644 | ||||||||||||||||||
| ($M) | 2020 | 2021 | |||||||||||||||
| Net sales | $ | 32,637 | 34,392 | ||||||||||||||
| Segment profit | $ | 6,665 | $ | 7,212 | |||||||||||||
Stock compensation expense(1) | (168) | (217) | |||||||||||||||
Repositioning, Other(2,3) | (641) | (636) | |||||||||||||||
Pension and other postretirement service costs(4) | (160) | (159) | |||||||||||||||
| Operating income | $ | 5,696 | $ | 6,200 | |||||||||||||
| Year-over-year change in Segment profit | $ | 547 | |||||||||||||||
| ÷ Year-over-year change in Net sales | $ | 1,755 | |||||||||||||||
| Incremental Margin % | 31.2 | % | |||||||||||||||
(9) Reconciliation of PMT Organic Sales % Change
| 114 | | |||||||||
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We define organic sales percent change as the year-over-year change in reported sales relative to the comparable period, excluding the impact on sales from foreign currency translation, and acquisitions, net of divestitures. We believe this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
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