Mr. Albertazzi’s initial priorities are focused on building a high-performance culture of collaboration and innovation, institutionalizing excellence in execution across the organization and delivering profitable growth while prudently managing costs. Mr. Albertazzi’s appointment as CEO followed his earlier appointment as President, Americas, to drive the region’s transformation, after transforming EMEA into a high growth and high margin region during his role as President, EMEA. The leadership transition was part of a movement toward operational improvements and increasing efficiencies, and was further bolstered by new skillsets and experience of new Board members appointed during 2022.3
| | | Commitment to Stockholders | 2
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We actively engage with stockholders throughout the year to better understand their issues and concerns, including, but not limited to, their perspective on executive compensation. We hold a “say-on-pay” advisory vote on an annual basis. In 2023, we received approval of approximately ~87% of votes cast on our “say-on-pay” advisory vote. Feedback from stockholders informs the Compensation Committee’s consideration of executive compensation programs. The Board and the Compensation Committee aim to align business performance and executive compensation to drive value creation by directly tying compensation to key performance metrics, and placing significant weight on compensation that varies in value depending upon stock price performance. | | Financial ResultsDuring 2022, we experienced a tale of two halves, as we entered 2022 being negatively impacted by the challenging global supply chain, including steep inflationary costs on materials, freight and labor, but achieved marked sequential improvement in the second half and a record fourth quarter financial performance. The following is a summary of key 2022 financial results:
• | | Stockholder Return | | Year-over-year revenue growth.End-market demand remained strong with net sales up 14% (to approx. $5.7 billion) versus prior year, and organic net sales growth(1) of 13%.
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On December 31, 2023, our closing stock price was $48.03, representing a shareholder return of more than 250% for the year. In the fourth quarter of 2023, we declared a cash dividend of $0.025 per share, payable on December 27, 2023. On April 23, 2024, our closing stock price was $79.17. | | | | | | | | | | | | | • | | | | | | | | |  | | | Record backlog. Backlog reached another record level of $4.8 billion at the end of December 2022, increasing 49% from the end of 2021.
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• | | Increased investment in research and development. We continued to invest in new product development with R&D spending of $282 million in 2022 (approx. 5% of revenue).
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• | | Profitability. Full year net income was $77 million, operating profit was $223 million and adjusted operating profit(1) was $439 million.
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• | | Supply chain challenges. Part and material shortages, particularly in the first half of 2022, constrained sales volumes and drove higher inventory levels, labor inefficiency and product delivery challenges.
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• | | Impact of inflation. Inflationary pressures persisted throughout 2022, especially in the Americas, and impacted a number of items including costs of materials, freight, and labor and the supply chain.
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• | | Price actions. We continued to execute on our strategic pricing plan in 2022 in an effort to mitigate an increasingly inflationary operating environment and to reflect the value we deliver to the market. Our collective actions resulted in a realization of $365 million in price.
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• | | Adjusted free cash flow. 2022 net cash provided by operating activities was ($153) million, a decrease of $364 million versus the prior year. Adjusted free cash flow(1) for 2022 was ($260) million, a decrease of $396 million versus the prior year primarily driven by increased inventory levels to support backlog, foreign exchange and cash interest . Liquidity(2) at the end of the fourth quarter 2022 remained strong at $578 million.
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• | | Improvements for the Second Half. As noted above, 2022 was really a story of two halves. In the first half of 2022, net sales were up 8%, and in the second half of 2022 they increased over 19%. Our organic sales(1) were up 4% in the first half, and over 20% in the second half of the year. Operating profit was a $19 million loss in the first half and a positive $242 million in the second half while adjusted operating profit(1) was $94 million in the first half and $345M in the second half of 2022. These are good indicators of the improvements underway at Vertiv.
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(1) | See Annex A for a reconciliation of and information regarding the non-GAAP metrics.
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(2) | Liquidity is calculated as cash and cash equivalents plus availability under the ABL Revolving Credit Facility as of December 31, 2022.
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| | | | | | | | | | | | | | | | | | | | | |  | | | - 2023- 2024 Proxy Statement | 27
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| | | 3
The following graph shows our total shareholder return for 2023, as compared to the performance of other market sectors, including the companies listed as the Compensation Peer Group (defined below). 
| | | | Commitment to Stockholders |
We actively engage
5 | | Compensation Packages Strongly Aligned with stockholders throughout the year to better understand their issues and concerns, including their perspective on executive compensation. We hold a “say-on-pay”Stockholder Interests advisory vote on an annual basis. In 2022, we received approval of approximately 95% of votes cast on our “say-on-pay” advisory vote. Feedback from stockholders informs the Compensation Committee’s consideration of executive compensation programs. The Board and the Compensation Committee aim to align business performance and executive compensation to drive value creation by directly tying compensation to key performance metrics, and placing significant weight on compensation that varies in value depending upon stock price performance. These considerations also resulted in our grant of the one-time, strategic performance equity awards in 2022 described below. |
The following charts show the mix of the primary compensation elements for 2023 for our CEO and our other NEOs, including salary, target annual cash incentive, annual long-term incentive awards granted during the year (in the form of stock options but excluding any strategic performance awards) and other benefits. As reflected in the charts below, we have structured executive compensation, particularly for the CEO, to be performance-based and aligned with stockholder value. | | | 4
| | Compensation Packages Strongly Aligned with Stockholder Interests | The following charts show the mix of the primary compensation elements for 2022 for our former CEO and our other NEOs, including salary, target annual cash incentive, annual long-term incentive awards granted during the year (in the form of stock options, excluding the
28 one-time| performance equity awards)(1) and other benefits. As reflected in the charts below, we have structured executive compensation, particularly for the CEO, to be performance-based and aligned with stockholder value. | | | | - 2024 Proxy Statement | | | | | | |
Mr. Albertazzi’s primary compensation for 2023 is summarized below: 
| | | | | | 2023 CEO Compensation | | (1) | Only includes equity awards actually granted during 2022, not any modifications, but does not include the one-time performance equity awards. For the “Other NEOs,” excludes Mr. Albertazzi’s promotion grant in October 2022 in connection with the announced CEO transition and Mr. O’Doherty who did not receive an annual long-term incentive grant (but who holds a significant amount of stock as a result of Vertiv’s acquisition of E&I Engineering Ireland Limited and its affiliate, Powerbar Gulf LLC in 2021).
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| | | Mr. Johnson’s primary compensation for 2022, and Mr. Albertazzi’s primary compensation forBase Salary (as of 12/31/23)
| | | $ 900,000 | | | | Target Cash Bonus (as % of Base Salary) | | | 125% | | | | Actual Cash Bonus (for 2023 is summarized below:performance) | | | $ 2,000,000 | | | | Approximate Grant Date Fair Value of Annual Equity Awards Granted | | | | | 2022 Compensation of Former CEO (Mr. Johnson) | | 2022 | | | $ 3.3 M | |
| | | | Base Salary
| | | $ 950,000 | | | | Target Cash Bonus (as % of Base Salary)
| | | 125% | | | | Actual Cash Bonus
| | | $ 890,625 | | | | Approximate Grant Date Fair Value of Annual Equity Awards Granted
| | | $ 3.3 million | |
| | | | | 2023 Compensation of Current CEO (Mr. Albertazzi)6 | | 2023 | | | | Base Salary
| | | $ 900,000 | | | | Target Cash Bonus (as % of Base Salary)
| | | 125% | | | | Actual Cash Bonus
| | | Subject to 2023 performance | | | | Approximate Grant Date Fair Value of Annual Equity Awards Granted
| | | $ 3.3 million | |
| | | | | | | | | | | 28 | | | | | - 2023 Proxy Statement
| | | | | | Continued Best Practices in Compensation |
| ✓ | Robust stock ownership guidelines. We require executive officers and directors to hold meaningful amounts of stock and to meet these guidelines within five years of first becoming subject to the guidelines, as further described under “Stock Ownership Guidelines for Company Officers and Directors.” Further, the Company adopted a “no sale” restriction that restricts an executive officer from selling stock until such officer has met or exceeds ownership guidelines. All of our executive officers and directors have met or are on their way to meeting these guidelines within the initial five-year period. |
| ✓ | Clawback policy. Under our clawback policy, our Board will seek to recover incentive compensation from an executive officer on a no-fault basis in the event of an accounting restatement as a result of the Company’s material non-compliance with any financial reporting requirement. |
| ✓ | Prohibition of hedging and pledging. Our insider trading policy prohibits our officers, directors and employees from hedging or pledging our shares. |
| ✓ | Alignment with stockholders’ interests. Our incentive program aligns with stockholder interests by heavily weighting incentives in favor of long-term equity awards. In particular, stock options are performance-based because they have value only if our stock price increases. |
| ✓ | Emphasis on variable cash pay. A significant portion of our executives’ cash compensation opportunity was performance-based, tying to near-term objectives and actual performance that we believe align with long-term growth. The target bonus for our CEO for 2023 was 125% of salary so that more than half of the CEO’s target cash compensation is directly dependent upon performance. Our actual bonus payouts for 2023 reflected our strong financial performance as discussed above. |
| ✓ | Only “double-trigger” executive change-in-control benefits. We do not provide “single-trigger” change-in-control benefits to executive officers; instead, we only provide “double-trigger” benefits, which generally means the executive needs to have a qualifying termination event (e.g., termination without cause or resignation by the executive for good reason) to receive a change-in-control benefit. |
| ✓ | No 280G gross-ups. We have not agreed to provide our executive officers, including any NEO, with a “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Section 280G (related to a change-in-control) of the Code. |
| ✓ | Use of peer group data. Our Compensation Committee developed a peer group to provide an additional measure of comparison in its review of compensation. |
| ✓ | Avoid excessive risk taking. Based upon a risk assessment, our Compensation Committee determined that our compensation policies do not encourage excessive or unnecessary risk-taking. |
Objectives of Executive Compensation Program The following table provides an overview of the specific objectives of the primary elements of our 2023 executive compensation program, each as further described below. | | | | Pay Element | | Objectives | | | Base Salary
(page 30) | | Attract and retain world-class leadership talent by using relevant market data to determine executive pay, while also considering tenure, experience, scope of duties and short-term and long-term performance. | | | Vertiv Incentive Plan (“VIP”)
(page 30) | | Reward ingenuity, creative thinking, improved processes, operational execution, project completion and exceptional contributions through cash bonuses. | | | Long-Term Incentive Compensation
(page 32) | | Encourage our executive team to drive long-term stock price growth through equity grants that directly link the value to the executive to value to stockholders, while also encouraging retention through multi-year vesting. | | | Retirement, Termination/CIC and Other Benefits | | Attract and retain key management members and, for severance and Change-in-Control matters, to motivate executives to take actions that are in the best interests of the Company. |
| | | | | | | | | | | | | | | | | | | | | | | | | - 2024 Proxy Statement | 29 |
| | | 5Compensation Philosophy and Process
| | Continued Best Practices in Compensation |
✓ | Robust stock ownership guidelines. We require executive officers and directors to hold meaningful amounts
The Compensation Committee is focused on maintaining an executive compensation program that emphasizes variable, at-risk compensation and has an appropriate balance of stock and to meet these guidelines within five years of first becoming subject to the guidelines, as further described under “Stock Ownership Guidelines for Company Officers and Directors. ” All of our executive officers and directors have met or are on their way to meeting these guidelines within the initial five-year period. |
✓ | Clawback policy. Under our clawback policy, our Board may seek to recover incentive compensation from an executive officer in the event of an accounting restatement as a result of material non-compliance with any financial reporting requirement.
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✓ | Prohibition of hedging and pledging. Our insider trading policy prohibits our officers, directors and employees from hedging or pledging our shares.
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✓ | Alignment with stockholders’ interests. Our incentive program aligns with stockholder interests by heavily weighting incentives in favor of long-term equity awards. In particular, stock options are performance-based because they have value only if our stock price increases.
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✓ | Emphasis on variable cash pay. A significant portion of our executives’ cash compensation opportunity was performance-based, tying to near-term objectives and actual performance that we believe align with long-term growth. The target bonus for our former CEO for 2022, and for our current CEO for 2023, was 125% of salary so that more than half of the CEO’s target cash compensation is directly dependent upon performance. As shown by the fact that cash bonuses for 2022 performance paid to each of our NEOs was below target, following zero bonus payouts for 2021, this variable compensation is truly at risk.
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✓ | Only “double-trigger” executive change-in-control benefits. We do not provide “single-trigger” change-in-control benefits to executive officers; instead, we only provide “double-trigger” benefits, which generally means the executive needs to have a qualifying termination event (e.g., termination without cause or resignation by the executive for good reason) to receive a change-in-control benefit.
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✓ | No 280G gross-ups. We have not agreed to provide our executive officers, including any NEO, with a “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Section 280G (related to a change-in-control) of the Code.
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✓ | Use of peer group data. Our Compensation Committee has developed a peer group to provide an additional measure of comparison in its review of compensation.
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✓ | Avoid excessive risk taking. Based upon a risk assessment, our Compensation Committee has determined that our compensation policies do not encourage excessive or unnecessary risk-taking.
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Objectives of Executive Compensation Program
The following table provides an overview of the specific objectives of the primary elements of our 2022 executive compensation program, each as further described below.
| | | Pay Element | | Objectives | | | Base Salary
(page 30)
| | Attract and retain world-class leadership talent by using relevant market data to determine executive pay, while also considering tenure, experience, scope of duties and short-term and long-term performance. | | | Vertiv Incentive Plan
(page 30)
| | Reward ingenuity, creative thinking, improved processes, project completion and exceptional contributions through cash bonuses. | | | Long-Term Incentive Compensation
(page 31)
| | Encourage our executive team to drive long-term stock price growth through equity grants that directly link the value to the executive to value to stockholders, while also encouraging retention through multi-year vesting. | | | Retirement, Termination/CIC and Other Benefits
(pages 33)
| | Attract and retain key management members and, for severance and Change-in-Control matters, to motivate executives to take actions that are in the best interests of the Company. |
Compensation Philosophy and Process
The Compensation Committee is focused on maintaining an executive compensation program that emphasizes variable, at-risk compensation and has an appropriate balance of near-term and long-term objectives.
Executive compensation is approved by the Compensation Committee, which consists solely of independent directors, and then the Board (with all of the independent members of the Board) approves the CEO’s compensation. Our Compensation Committee meets regularly throughout the year to review our executive compensation program and to ensure alignment of the interests of our executives with those of our stockholders. Meeting agendas contain items proposed by management or the Compensation Committee members. Pursuant to our Equity Grant Policy, implemented at the February 24, 2021, meeting of the Compensation Committee, annual equity awards to directors and continuing executive officers are to be approved at the first meeting of the Compensation Committee (and, where applicable, the Board) held during the first quarter of the year. Additional grants (such as promotion, new hire or special grants) may be approved during the year. Under our 2020 Stock Incentive Plan, the Compensation Committee may delegate authority to our CEO to make grants to non-executive employees, but may not delegate any authority with respect to grants to executive officers. Our Compensation Committee members engage in active discussions of compensation matters with management and with each other as part of their decision-making process. Each meeting includes an executive session with only the independent directors. On at least an annual basis, the Compensation Committee reviews relevant market data using a peer group representing a set of companies in the industries (mix of industrial and network equipment and services companies) in which we compete. For further information about our process, see “Peer Group Companies” below. Components of Compensation for 2023 Base salaries generally take into account each named executive officer’s existing pay as well as the executive’s position, responsibilities, qualifications, experience and location, the market for the position, the base salaries of other executive officers and the Company’s overall financial performance. The Compensation Committee considers base salary as one component of a total compensation package that needs to be balanced appropriately for each named executive officer. The table below shows the annualized base salaries in effect at the end of 2023. | | | | | | | 2023 Base Salary | | | | Albertazzi | | | $ 900,000 | | | | Fallon(1) | | | $ 665,000 | | | | Liang(1) | | | $ 675,000 | | | | Sanghi(1) | | | $ 500,000 | | | | Karlborg(1) | | | $ 515,000 | |
| (1) | Each of Mr. Sanghi and Mr. Karlborg received salary increases to the amounts in this table as a result of changes in their roles during 2023. Each of Mr. Fallon and Mr. Liang received salary increases of less than 10% as part of the annual compensation review in early 2023. |
| | | 2 | | Vertiv Annual Incentive Plan |
Our focus for the 2023 Vertiv Incentive Plan (“VIP”) was to align employees under a common set of goals tied to adjusted operating profit and adjusted free cash flow, both of which help us to maintain our focus on improving Vertiv’s operational execution and financial performance and driving stockholder value, while also recognizing our overall performance, segment and regional performance, and individual contributions to our long-term goals. | • | | Financial Performance Goals. In early 2023, the Compensation Committee which consists solelyapproved Adjusted Operating Profit (“AOP”) and Adjusted Free Cash Flow (each as defined below) as corporate financial metrics (and, where applicable, for regions and segments) for purposes of independent directors, and thenbonuses under the Board (with all of the independent members of the Board) approves the CEO’s compensation. Our Compensation Committee meets regularly throughout the year to review our executive compensation program and to ensure alignment of the interests of our executives with those of our stockholders. Meeting agendas contain items proposed by management orVIP. At that time, the Compensation Committee members. Pursuantdetermined that it was also appropriate to our Equity Grant Policy, implemented atretain the February 24, 2021 meeting ofability to take into account individual and other business performance measures in approving the final individual payout level. | | | | | | | | | | | | 30 | | | | | - 2024 Proxy Statement | | | | | | | | | | | | | | | | - 2023 Proxy Statement | 29
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| • | | Corporate Financial Performance Results. In early 2024, the Compensation Committee annual equity awards to directors and continuing executive officers are to bereviewed our financial results against the previously approved at the first meetingfinancial metrics established for purposes of the Compensation Committee (and, where applicable,2023 VIP and against our prior year’s performance in determining an overall corporate result of 125%. |
| • | | Results Significantly Above Challenging Targets. As shown in the Board) held duringtable on the first quarterfollowing page, our corporate AOP results of approximately $1,054 million and Adjusted Free Cash Flow of approximately $778M significantly exceeded the target levels for each metric set for purposes of the year. Additional grants (suchVIP, which had been set as promotion, new hire or special grants) may be approved during the year. Undervery challenging goals far exceeding our 2020 Stock Incentive Plan, the Compensation Committee may delegate authority topast performance levels. |
| • | | Results Far Exceeding Prior Year Results. Our results for 2023 reflected tremendous improvement over 2022, resulting in doubling our CEO to make grants to non-executive employees, but may not delegate any authority with respect to grants to executive officers. Our Compensation Committee members engageAOP results and an increase of more than $1 billon in active discussions of compensation matters with management and with each other as part of their decision-making process. Each meeting includes an executive session with only the independent directors. On at least an annual basis, the Compensation Committee reviews relevant market data using a peer group representing a set of companies in the industries (mix of industrial and network equipment and services companies) in which we compete. For further information about our process, see “Peer Group Companies” below.Adjusted Free Cash Flow.
Components of Compensation for 2022
1Base salaries generally take into account each named executive officer’s existing pay as well as the executive’s position, responsibilities, qualifications, experience and location, the market for the position, the base salaries of other executive officers and the Company’s overall financial performance.
Other Financial Performance Considerations.The Compensation Committee considers base salaryalso reviewed our historic financial performance, including a record backlog at year end 2023, and transformative operational growth as one component of a total compensation package that needs to be balanced appropriately for each named executive officer. During 2022, as further described in the table below, the Compensation Committee approved above under “mid-year2023 Summary-Financial Results” above.
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| • | | Segment Financial Performance Results. increases for some ofFor our NEOs dueother than the CEO and CFO, the Committee also reviewed the performance of the individual’s segment (that is, region or lines of business) where they have responsibility. For Mr. Sanghi and Mr. Karlborg, at least a portion of their bonus reflected how relevant regions (namely, our ASI and Americas regions) performed relative to the same types of financial targets as for the corporate goals described above. Similarly, the performance of the lines of business were part of Mr. Liang’s bonus determination. These segment results increased their increased responsibilities.potential bonus payouts. |
| • | | Individual Performance Modifier. The Committee finally considered individual performance based on individual impact to the results of their assigned segment or corporate function. In approving the individual performance factors for our NEOs (other than our CEO), the Committee focused on recognizing the efforts of individuals who were directly responsible for successful operational performance in particular regions or lines of business. |
| • | | CEO Performance.In determining the payout level for our CEO, the Committee recognized his leadership in guiding us in his first year as CEO through the historic year and the direct impact his leadership and focus had on our results and strategic performance. In particular, he led with a laser focus on delivering operational execution and excellence in all areas, particularly manufacturing, supply chain and other operations. |
| • | | Bonus Payment Details.The table below shows the annualizedannual target bonus opportunities for 2023 for each of the named executive officers and the actual payout. The target cash bonus levels (as a percentage of salary at year-end, except as noted below) were set to reflect the executive’s relative responsibility for the company’s performance and to appropriately allocate the total cash opportunity between base salaries in effect at the endsalary and variable incentive-based compensation. Amounts paid to any individual executive officer may range from 0% to 200% of 2022.target. | | | | | | | 2022 Salary | | | | Mr. Albertazzi
| | | $ 900,000(1)(3) | | | | Mr. Johnson
| | | $ 950,000 | | | | Mr. Fallon
| | | $ 645,000(2) | | | | Mr. Liang
| | | $ 630,000(2) | | | | Mr. O’Doherty
| | | $ 448,096(3) | |
(1) | Mr. Albertazzi’s base salary was increased in March 2022 from $405,000 to $500,000 to reflect his increased responsibilities resulting from his appointment as President, Americas, and increased again in October 2022 to $900,000 to reflect his appointment as Chief Operating Officer and his responsibilities with the transition into the CEO role, in addition to retaining his role as President, Americas, which salary would remain in place upon becoming CEO on January 1, 2023. | | | | | | | | | | | | | | | | | | | | Target Bonus
(as % of Salary) | | | Target Bonus
($) | | | Earned Bonus
(as % of Target) | | | Earned Bonus
($)(1) | | | | | | | Albertazzi | | | 125 | % | | | 1,125,000 | | | | 178 | % | | | 2,000,000 | | | | | | | Fallon | | | 100 | % | | | 665,000 | | | | 94 | % | | | 623,438 | | | | | | | Liang | | | 80 | % | | | 531,000 | (2) | | | 155 | % | | | 824,378 | | | | | | | Sanghi | | | 80 | %(2) | | | 340,356 | (2) | | | 169 | % | | | 575,218 | | | | | | | Karlborg | | | 60 | %(2) | | | 257,888 | (2) | | | 203 | %(2) | | | 523,259 | |
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(2) | The following salary increases were approved based on an increase in responsibilities together with consideration of peer group data: Mr. Fallon’s base salary was increased in September 2022 from $575,000 to $645,000, and Mr. Liang’s base salary was increased in August 2022 from $590,000 to $630,000.
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(3) | The salaries in this table are shown in U.S. dollars, but these
| (1) | The amounts in this table are shown in U.S. dollars, but certain individuals were paid in local currency for a portion of the year, as reflected in the Summary Compensation Table. |
| (2) | | | | 2
| | Vertiv Annual Incentive Plan |
Our focusThe target and actual bonus amounts for these individuals were pro-rated based on different salary levels and, in some cases, target bonus percentages for different portions of the year. The total payout for Mr. Karlborg included a time period before he was an executive officer and so his total for the year exceeded the maximum for executive officers of 200% of target.
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Corporate Financial Results The following table shows our corporate performance for the two financial metrics under the VIP for 2023: | | | | | | | | | | | | | | Global Plan Metric | | 2022 Vertiv Incentive PlanActual | | | 2023 VIP Target | | | 2023 Actual | | | | | | Adjusted Operating Profit(1) | | $ | 439M | | | $ | 1,030M | | | $ | 1,054M | | | | | | Adjusted Free Cash Flow(2) | | $ | (260)M | | | $ | 600M | | | $ | 778M | |
| (1) | Adjusted Operating Profit was to align employees under a common setchosen as an important measure of goals tied to adjustednear-term profitability which in turn creates stockholder value. Adjusted Operating Profit represents the Company’s operating profit, adjusted to exclude the amortization of intangibles and adjusted free cash flow, bothcertain mergers and acquisition costs. See Annex A for a reconciliation of which help us to maintain our focus on Vertiv’s performance and driving stockholder value, while also recognizing our overall performance, segment and regional performance, and individual contributions to our long-term goals. • | | Financial Performance Goals. In early 2022, the Compensation Committee approved Adjusted Operating profit (“AOP”) and Adjusted Free Cash Flow (each as defined below) as corporate financial metrics for purposes of bonuses under the Vertiv Incentive Plan. At that time, the Compensation Committee determined that it was also appropriate to retain the ability to take into account individual and other business performance measures in approving the final individual payout level.information regarding this non-GAAP metric.
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| (2) | • | | Corporate Financial Performance Results. In early 2023, the Compensation Committee reviewed the achievement of the pre-set financial metrics. As shown in the table below, the corporate financial performance results were below target levels. The Compensation Committee also reviewed our other financial performance as described above under “2022 Summary—Financial Results” above. We achieved approximately 80% of AOP target, and showed strong year-over-year and sequential growth in key financial metrics in the fourth quarter, including revenue, operating profit, margins, and in particular a result of $143.3 million in Adjusted Free Cash Flow for the fourth quarter (see Annex A for a reconciliation of and information regarding this non-GAAP metric), as well as a record backlog for the fourth quarter. The Compensation Committee recognized that although our performance for the entire year was below the target levels pre-set at the beginning of the year, there were significant improvements shown in the second half of the year in the key metrics, as set forth under “2022 Summary—Financial Results—Improvements for the Second Half” above. As a result, the Compensation Committee approved a corporate financial achievement level of 75%.
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| | | | | | | | | | | 30 | | | | | - 2023 Proxy Statement
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• | | Individual and Segment Performance. In determining each individual NEO’s performance, the Committee reviewed individual and other business performance measures, as well as performance of an individual’s segment where they have responsibility, but determined that all NEOs’ payouts should be below target level due to the financial results being below target. The Committee believed it was appropriate to limit the payout for each of the CEO and CFO to the 75% level determined for the corporate financial performance described above, even though their efforts throughout the challenging 2022 helped lead to improvements described above and a successful CEO transition. The Committee also considered Mr. Albertazzi’s efforts in establishing go-forward priorities and strengthening our high performance culture. Mr. Liang’s payout was increased to 90% based on effective product development and establishing strategy for the engineering function. The Committee also considered retention needs to ensure continuity of our remaining leadership team as we move forward, but believed below-target levels were appropriate.
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• | | Bonus Payment Details. The table below shows the annual target bonus opportunities for 2022 for each of the named executive officers and the actual payout. The target cash bonus levels (as a percentage of salary at year-end, except as noted below) were set to reflect the executive’s relative responsibility for the company’s performance and to appropriately allocate the total cash opportunity between base salary and variable incentive-based compensation.Adjusted Free Cash Flow was chosen because it reflects cash generated from operations that may be reinvested in our businesses or returned to stockholders. Adjusted Free Cash Flow represents net cash provided by (used for) operating activities adjusted to excluded capital expenditures, investments in capitalized software, and include proceeds from the disposition of property, plant, and equipment. See Annex A for a reconciliation of and information regarding this non-GAAP metric.
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| | | | | | | | | | | | | | | | | | | | Target Bonus
(as % of Salary) | | | Target Bonus
($) | | | Earned Bonus
(as % of Target) | | | Earned Bonus
($) | | | | | | | Albertazzi | | | 80-125 | (1) | | | 555,312 | (2) | | | 74 | (3) | | | 410,254 | (2) | | | | | | Johnson | | | 125 | | | | 1,187,500 | | | | 75 | | | | 890,625 | | | | | | | Fallon | | | 100 | | | | 645,000 | | | | 75 | | | | 483,750 | | | | | | | Liang | | | 80 | | | | 504,000 | | | | 90 | | | | 453,600 | | | | | | | O’Doherty | | | 80 | | | | 358,400 | (2) | | | 36 | (3) | | | 129,024 | (2) |
| | | | | | | | | | | | | (1) | | | | | | | | | | | | Mr. Albertazzi’s target bonus opportunity was pro-rated due to his October 2022 appointment as Chief Operating Officer (in addition to retaining his President, Americas role) and incoming CEO, which resulted in an increase for the last quarter of the year in his target bonus from 80% to 125% of pro-rated salary. His bonus payout was based on a combination of results for EMEA and the Americas reflecting the time he spent in each role, as well as corporate performance.
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(2) | The amounts in this table are shown in U.S. dollars, but these individuals were paid in local currency, as reflected in the Summary Compensation Table.
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(3) | Mr. O’Doherty’s performance results were partly based on the financial results of the E&I line of business.
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Corporate Financial Results
The following table shows our corporate performance for the two financial metrics under the Vertiv Incentive Plan for 2022:
| | | | | | | | | Global Plan Metric | | Target | | | Actual | | | | | Adjusted Operating Profit(1)
| | $ | 550M | | | $ | 439M | | | | | Adjusted Free Cash Flow(2)
| | $ | 150M | | | $ | (260)M | (2) |
(1) | Adjusted Operating Profit was chosen as an important measure of near-term profitability which in turn creates stockholder value. Adjusted Operating Profit represents the Company’s operating profit, adjusted to exclude the amortization of intangibles and certain mergers and acquisition costs. See Annex A for a reconciliation of and information regarding this non-GAAP metric.
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(2) | Adjusted Free Cash Flow was chosen because it reflects cash generated from operations that may be reinvested in our businesses or returned to stockholders. Adjusted Free Cash Flow represents net cash provided by (used for) operating activities adjusted to excluded capital expenditures, investments in capitalized software, and include proceeds from the disposition of property, plant, and equipment. See Annex A for a reconciliation of and information regarding this non-GAAP metric.
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| | | 3
| | Long-Term Incentive Compensation |
Annual Equity Grants. In furtherance of our performance-based compensation philosophy and strong alignment with stockholder interests, in 2022, our annual equity compensation granted in early March 2022 to NEOs consisted of stock options that vest annually over four years. Each named executive officer was granted an award of stock options in the amounts set forth in the table entitled “Grants of Plan-Based Awards in Fiscal 2022” below and with pro rata vesting annually over four years from the grant date.
The amount granted to each continuing NEO was generally based on each individual’s duties and responsibilities, internal pay equity considerations, and prior equity grants to each individual. Mr. O’Doherty did not receive an annual stock option grant, but holds a significant amount of Vertiv stock as a result of the E&I acquisition. The Compensation Committee continued to believe that time-vesting stock options were the appropriate long-term performance vehicle at this stage of being a public operating company (at the time of grant, for approximately two years since the February 2020 business combination). Granting stock options is beneficial to the Company for the following reasons:
• | | Stock options provide the most direct tie to shareholder value realization.
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• | | The ultimate value of the options will align directly with our stockholders’ return through our stock price performance, which in turn depends on our sustainable operational and financial performance, thereby discouraging excessive risk-taking.
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| | | | | | | | | | | | | | | | | | | | | | | | | - 2023- 2024 Proxy Statement | 31
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| | | 3 | | Long-Term Incentive Compensation |
2023 Annual Equity Grants. In furtherance of our performance-based compensation philosophy and strong alignment with stockholder interests, in 2023, our annual equity compensation granted in early March 2023 to NEOs consisted of stock options that vest annually over four years. Each named executive officer was granted an award of stock options in the amounts set forth in the table entitled “Grants of Plan-Based Awards in Fiscal 2023” below and with pro rata vesting annually over four years from the grant date. The amount granted to each continuing NEO was generally based on each individual’s duties and responsibilities, internal pay equity considerations, and prior equity grants to each individual. The Compensation Committee continued to believe that time-vesting stock options were the appropriate long-term performance vehicle for annual grants. Granting stock options is beneficial to the Company for the following reasons: | • | | Stock options provide the most direct tie to shareholder value realization. |
| • | | The ultimate value of the options will align directly with our stockholders’ return through our stock price performance, which in turn depends on our sustainable operational and financial performance, thereby discouraging excessive risk-taking, and encouraging operational execution and continual process improvements to drive efficiencies within our operating systems. |
| • | | The stock options only have value to the executive if the stock price increases after the grant date, meaning both management and the stockholders benefit. |
| • | | We benefit from the retention value provided through multi-year vesting and long-term exercise period. |
| • | | The stock options offer complementary incentives to our annual bonus plan, which is based on financial metrics that are set annually, and the cash bonus opportunities already represent a meaningful portion of target compensation. |
| • | | The stock options also offer complementary incentives to the Strategic Performance Awards that were granted, which are full-value awards but will only become earned and vested if we exceed pre-specified financial goals. |
| • | | Stock options tie to absolute rather than relative value, which is appropriate because our focus is on the benefit to our stockholders. |
Results for First Tranche of Strategic Performance Equity Awards. As previously disclosed, in 2022, the Board and Compensation Committee granted strategic, one-time long-term performance awards (the “Strategic Performance Awards”) to incentivize the executive management team to achieve multi-year key goals for the business and to promote the long-term retention of the business leaders that we need to attain our goals. The named executive officers promoted to executive positions during 2023 also received these awards to ensure alignment among the management team. These Strategic Performance Awards vest, to the extent earned, contingent on both (i) achievement of strategic AOP targets in 2023, 2024 and 2025 and (ii) continued employment through January 1, 2027, with limited exceptions related to death, disability, or, in connection with a change in control, termination of employment or of the award. For any portion to be earned for a year, a target AOP performance goal (“Target AOP”) must be achieved for the applicable year. The following chart shows the targets for each year, along with the results for the initial 2023 performance period. | | | | | | | | | | | | | | Fiscal Year | | Target AOP | | | Actual AOP | | | Percentage of
Tranche Earned | | | | | | 2023 | | | $1,000M | | | | $1,054M | | | | 120 | % | | | | | 2024 | | | $1,400M | | | | TBD | | | | TBD | | | | | | 2025 | | | $1,750M | | | | TBD | | | | TBD | |
If Target AOP is not achieved in a particular performance year, no amounts will be earned for that year. If Target AOP is exceeded in any given year, each grantee will earn an additional 20% of their respective target award level for each $50 million increment that AOP performance exceeds the Target AOP (with no interpolation between results). Following the end of all three performance years, the Compensation Committee and Board will aggregate the dollar amounts earned for each grantee over the three-year period, and such total dollar amount will be converted into a number of RSUs amount determined by dividing each grantee’s aggregate earned dollar amount by the closing stock price of our common stock on the first business day after the release of earnings for fiscal year 2025. The resulting RSUs will be eligible for cliff vesting on January 1, 2027. The Strategic Performance Awards continue to be beneficial to the Company for the following reasons: | • | | The Strategic Performance Awards are settled in shares of our stock to align the management team’s interests in stock price appreciation with the interests of our stockholders. |
| • | | Determination of whether a Strategic Performance Award target is met is done on a purely formulaic basis related to our financial results. |
| • | | No amount is earned for any year unless Target AOP is met. |
| | | | | | | | | | | | 32 | | | | | - 2024 Proxy Statement | | | | | | |
| • | | We benefit from the retention value provided through cliff-vesting by requiring employment through January 1, 2027 before any amount would vest. |
| • | | Earned award values are determined annually over a three-year performance cycle to align with long-term financial objectives. |
The financial measure and target levels were selected for the following reasons: | • | | AOP is an important metric because it reflects our operational performance and our stockholders view it as a key metric for value creation. |
| • | | The performance levels chosen in late 2022 were intentionally set to be challenging. For example, the goal for 2023 performance was more than twice our actual 2022 results, and the goals for each subsequent year was significantly greater than the target for the prior year. |
Our tax-qualified employee savings and retirement plan (“401(k) Plan”) covers certain full- and part-time employees in the United States, including our U.S.-based NEOs. Under the 401(k) Plan, employees may elect to reduce their current compensation up to the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plan. The Board believes that the 401(k) Plan provides an important and highly valued means for employees to save for retirement. We provide a match of 50% of the first 6% of the named executive officers’ eligible base salary. Our eligible NEOs are each eligible to participate in the 401(k) Plan on the same terms as our other employees in 2023. Our executive officers outside the U.S. are eligible for applicable local retirement plans. | | | 5 | | Termination and Change-in-Control Benefits |
The protection of competitive and confidential information and the retention of top talent are of the utmost importance to Vertiv. For this reason, our named executive officers are subject to confidentiality, non-compete and non-solicitation covenants. Each named executive officer generally was subject to our Executive Employment Policy (or for some of our non-U.S. executive officers, an employment agreement with similar benefits) and our “double-trigger” Executive Change of Control Plan, in each case that provide for severance benefits following a qualifying termination of employment, which is intended to alleviate concerns about job security that could affect performance and keep the named executive officers focused on their day-to-day responsibilities. A detailed description of these severance and change of control benefits, along with estimates of the value of the benefits potentially payable under these arrangements, are set out below under the caption “Potential Payments upon Termination or Change-in-Control.” All of the named executive officers in the United States were eligible for coverage under our health insurance programs, including medical, dental and vision, a health savings account and flexible spending accounts. Additionally, the named executive officers were eligible for life insurance, short- and long-term disability benefits and paid time off. Officers in other jurisdictions are generally eligible for available benefit programs in the applicable jurisdiction. We may provide additional benefits in particular circumstances. For example, because they were required to relocate to the U.S. for new positions, we have agreed to provide Messrs. Albertazzi, Liang, Sanghi and Karlborg reimbursement for fees paid in connection with the filing of U.S. and foreign jurisdiction tax returns, tax equalization in limited time periods, and other items described in the footnotes to the Summary Compensation Table. We also provide relocation benefits. Peer Group Companies The Compensation Committee believes that we should provide market-competitive pay, with higher amounts based on tenure, job responsibilities and performance, and that long-term incentive compensation should be a significant component of executive compensation. The Compensation Committee expects to review annual benchmarking using a peer group representing a set of companies in the industries in which we compete. The Compensation Committee worked with management to represent similar companies in terms of size, industry, revenue and market cap, with a focus on a method for considering other companies that are subject to the same impacts in our market and industry. The peer group used when evaluating 2023 compensation consisted of the companies below (“Compensation Peer Group”), which we have broken into two subgroups solely for the purpose of explaining how we developed the peer group. In addition, we consider other companies that are competitors for talent, whose compensation practices we may review | | | | | | | | | | | | | | | | | | | | | | | | | - 2024 Proxy Statement | 33 |
• | | The stock options only have value to the executive if the stock price increases after the grant date, meaning both management and the stockholders benefit.
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• | | We benefit from the retention value provided through multi-year vesting and long-term exercise period.
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• | | The stock options offer complementary incentives to our annual bonus plan, which is based on financial metrics that are set annually, and the cash bonus opportunities already represent a meaningful portion of target compensation.
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• | | Stock options tie to absolute rather than relative value, which is appropriate because our focus is on the benefit to our stockholders.
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One-Time, Strategic Performance Equity Awards. The Board and Compensation Committee granted one-time long-term performance awards (“One-Time Performance Awards”) to incentivize the executive management team to achieve multi-year key goals for the business and to promote the long-term retention of the business leaders that we need to attain our goals. These One-Time Performance Awards vest, to the extent earned, contingent on both (i) achievement of strategic AOP targets in 2023, 2024 and 2025 and (ii) continued employment through January 1, 2027, with limited exceptions related to death, disability, or, in connection with a change in control, termination of employment or of the award.
For any portion to be earned for a year, a target AOP performance goal (“Target AOP”) must be achieved for the applicable year as follows:
from time to time in order to better understand the competitiveness of Vertiv’s compensation programs with the goal of preserving talent. | | | | | | Fiscal Year | | Target AOP | | | | 2023 | | | $1,000,000,000 | | | | 2024 | | | $1,400,000,000 | | | | 2025 | | | $1,750,000,000 | |
| | | | | | | | | | | | If Target AOP is not achieved in a particular performance year, no amounts will be earned for that year. If Target AOP is exceeded in any given year, each grantee will earn an additional 20% of their respective target award level for each $50 million increment that AOP performance exceeds the Target AOP (with no interpolation between results). Following the end of all three performance years, the Compensation Committee and Board will aggregate the dollar amounts earned for each grantee over the three-year period, and such total dollar amount will be converted into a number of RSUs amount determined by dividing each grantee’s aggregate earned dollar amount by the closing stock price of our common stock on the first business day after the release of earnings for fiscal year 2025. The resulting RSUs will be eligible for cliff vesting on January 1, 2027.Industry Affiliation
The following table shows the annual and aggregate target values of the One-Time Performance Awards granted to our NEOs:
| | | | | | | | | | | | | | | Annual Target Value | | | Aggregate Target Value | | | | | Giordano Albertazzi | | $ | 2,250,000 | | | $ | 6,750,000 | | | | | David Fallon | | $ | 1,290,000 | | | $ | 3,870,000 | | | | | Stephen Liang | | $ | 1,000,000 | | | $ | 3,000,000 | | | | | Philip O’Doherty | | $ | 800,000 | | | $ | 2,400,000 | |
The One-Time Performance Awards are beneficial to the Company for the following reasons:
• | | The One-Time Performance Awards are settled in shares of our stock to align the management team’s interests in stock price appreciation with the interests of our stockholders.
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• | | Determination of whether a One-Time Performance Award target is met is done on a purely formulaic basis related to our financial results.
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• | | No amount is earned for any year unless Target AOP is met.
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• | | We benefit from the retention value provided through cliff-vesting by requiring more than four years of performance before any amount would vest.
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• | | Earned award values are determined annually over a three-year performance cycle to align with long-term financial objectives.
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The financial measure and target levels were selected for the following reasons:
• | | AOP is an important metric because it reflects our operational performance and our stockholders view it as a key metric for value creation.
|
• | | The performance levels were intentionally set to be challenging. For example, the goal for 2023 performance is more than twice our actual 2022 results.
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| | | | | | | | | | | 32 | | | | | - 2023 Proxy Statement
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Promotion Equity Grants for Mr. Albertazzi. We granted additional stock options to Mr. Albertazzi in connection with his promotion to President, Americas in March 2022 and subsequently upon his promotion in October 2022 to Chief Operating Officer (in addition to retaining his President, Americas role) and incoming CEO. The amount of each grant is set forth in the table entitled “Grants of Plan-Based Awards in Fiscal 2022” below. The Compensation Committee believed these additional grants were appropriate based on his increased responsibilities. In particular, for the grant made in October 2022, the Committee believed it was important to ensure that the incoming CEO’s equity interests are in alignment with our stockholders by increasing his equity stake, subject to both continued employment and increasing the stock price for the benefit of our stockholders. As a result, the amount granted in October 2022 was significantly higher than his prior grants, which the Committee believed it was an appropriate incentive amount for an incoming CEO. The stock options vest annually over four years.
Our tax-qualified employee savings and retirement plan (“401(k) Plan”) covers certain full- and part-time employees in the United States, including our U.S.-based NEOs. Under the 401(k) Plan, employees may elect to reduce their current compensation up to the statutorily prescribed annual limit and have the amount of such reduction contributed to the 401(k) Plan. The Board believes that the 401(k) Plan provides an important and highly valued means for employees to save for retirement. We provide a match of 50% of the first 6% of the named executive officers’ eligible base salary. Our eligible NEOs each participated in the 401(k) Plan on the same terms as our other employees in 2022.
Our executive officers outside the U.S. are eligible for applicable local plans. For example, Mr. Albertazzi participated in Vertiv Italy’s retirement programs, including a defined contribution plan whereby the Company provided matching contributions of 4% of salary up to a threshold. Mr. Liang participated in Vertiv Hong Kong’s defined contribution Occupational Retirement Scheme Ordinance (“ORSO”), which is a retirement program available to Hong Kong employees generally, including Mr. Liang. Under the ORSO, a participant contributes 5% of his or her base salary and we contribute an amount equal to 10% of the participant’s base salary to the ORSO. In accordance with regulations and local practice, individuals with service of more than 10 years, such as Mr. Liang, may withdraw all contribution amounts attributable to both employee and employer contributions upon a termination of employment for any reason.
| | | 5
| | Termination and Change-in-Control Benefits |
General. The protection of competitive and confidential information and the retention of top talent are of the utmost importance to Vertiv. For this reason, our named executive officers are subject to confidentiality, non-compete and non-solicitation covenants. Each named executive officer generally was subject to our Executive Employment Policy (or for some of our non-U.S. executive officers, an employment agreement with similar benefits) and our “double-trigger” Executive Change of Control Plan, in each case that provide for severance benefits following a qualifying termination of employment, which is intended to alleviate concerns about job security that could affect performance and keep the named executive officers focused on their day-to-day responsibilities,. A detailed description of these severance and change of control benefits, along with estimates of the value of the benefits potentially payable under these arrangements, are set out below under the caption “Potential Payments upon Termination or Change-in-Control.”
Agreement with Mr. Johnson. Although Mr. Johnson departed from the Company at year-end, he did not receive payments under the Executive Employment Policy. As part of the Company’s efforts to ensure a successful leadership transition, the Company entered into an agreement with Mr. Johnson described below under the caption “Potential Payments upon Termination or Change-in-Control” which primarily provides for his ability to retain his stock options. The primary goals in entering into this agreement were:
• | | to ensure Mr. Johnson remained as CEO through year-end as part of an orderly and comprehensive transition that would benefit the Company;
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• | | to negotiate and provide consideration for comprehensive restrictive covenants of two years (for non-compete, non-solicit and other covenants protective of the Company’s business and confidential information) rather than the pre-existing one-year covenants;
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• | | to require Mr. Johnson’s cooperation and accessibility if needed for future consulting (for an annual payment rate limited to $20,000 for five years) given his deep historical knowledge of the Company, including transition services, advisory and management coaching services, assistance and cooperation with litigation matters, customer relations, technical advisor services and consultation upon matters within the unique knowledge of Mr. Johnson; and
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• | | to obtain these significant benefits for the Company without resulting in significant cash cost to the Company.
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As a result, in approving Mr. Johnson’s ability to retain and continue vesting in a portion of his stock options previously granted, such that the options will become vested on the originally scheduled vesting date only if he continues to comply with his agreements with the Company, the Committee and Board considered the fact that, at the time the agreement was entered into in October 2022, all of these stock options were “underwater.” As a result, he would only receive any value for his options
| | | | | | | | | | | | | | | | | | | | | | | | | - 2023 Proxy Statement | 33
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if the Company’s stock price increased over the long-term vesting schedule of the options, meaning he receives value only if stockholders see an increase in stock price. All of Mr. Johnson’s unvested restricted stock units were forfeited upon his departure date.
All of the named executive officers in the United States were eligible for coverage under our health insurance programs, including medical, dental and vision, a health savings account and flexible spending accounts. Additionally, the named executive officers were eligible for life insurance, short- and long-term disability benefits and paid time off. Officers in other jurisdictions are generally eligible for available benefit programs in the applicable jurisdiction.
During 2022, we permitted our former CEO and other officers to use chartered aircraft for business purposes and, in limited circumstances, for personal use. The Compensation Committee believed that permitting our former CEO to use the private aircraft for personal use provided Vertiv the benefit of increased efficiency, security and health protections. In 2021, we entered into a time-sharing agreement with Mr. Johnson pursuant to which he reimbursed us for variable costs associated with personal use of our chartered aircraft above an amount approved by the Compensation Committee. During 2022, as part of our policy to provide relocation benefits, we also allowed our CFO to use the chartered aircraft for an increased amount of commuting between his home and our corporate headquarters as we moved back to regular on-site work, in advance of his relocation to our corporate headquarters area. There were no tax gross-ups provided on this personal aircraft usage.
We may provide additional benefits in particular circumstances. For example, because they were required to relocate to the U.S. for new positions, we have agreed to provide Messrs. Albertazzi and Liang reimbursement for fees paid in connection with the filing of U.S. and foreign jurisdiction tax returns, tax equalization in limited time periods, and other items described in the footnotes to the Summary Compensation Table. We also provide relocation benefits.
Peer Group Companies
The Compensation Committee believes that we should provide market-competitive pay, with higher amounts based on tenure, job responsibilities and performance, and that long-term incentive compensation should be a significant component of executive compensation. The Compensation Committee expects to review annual benchmarking using a peer group representing a set of(comparable companies in the industries in which we compete.Technical Products and
Services space with a revenue range of 0.5 to 2.0 times
that of Vertiv) | | | | Similar Scope and Size (manufacturing and services companies from general
industry with revenues ranging from 0.5 to 2.0 times that of Vertiv) | | | | | | Ametek Celestica Ciena CommScope First Solar Hubbell | | Itron Juniper Networks NCR* Legrand ON Semiconductor Regal Rexnord Sensata Technologies | | | | Carlisle Companies Crane Co.* Donaldson Co. Dover Corp. Fortive Gates Industrial | | Pentair Rockwell Automation The Compensation Committee worked with management to represent similar companiesTimken Company |
| * | Crane Co. and NCR underwent spin-off transactions in terms of size, industry, revenue2023 and market cap, with a focus on a method for considering other companies thatso are subject to the same impactsexcluded from any TSR calculations in our market and industry. The peer group used when evaluating 2022 compensation consisted of the companies below (“Compensation Peer Group”), which we have broken into two subgroups solely for the purpose of explaining how we developed the peer group. In addition, we consider other companies that are competitors for talent, whose compensation practices we may review from time to time in order to better understand the competitiveness of Vertiv’s compensation programs with the goal of preserving talent. | | | | | | | | | | | | Industry Affiliation
(comparable companies in the Technical Products and
Services space with a revenue range of 0.5 to 2.0 times
that of Vertiv)
| | | | Similar Scope and Size
(manufacturing and services companies from general
industry with revenues ranging from 0.5 to 2.0 times
that of Vertiv)this proxy statement.
| | | | | | Ametek
Celestica
Ciena
CommScope
First Solar
Hubbell
| | Itron
Juniper Networks
NCR
Legrand
ON Semiconductor
Regal Rexnord
Sensata Technologies
| | | | Carlisle Companies
Crane Co.
Donaldson Co.
Dover Corp.
Fortive
Gates Industrial
| | Pentair
Rockwell Automation
The Timken Company
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Compensation Risk Assessment As part of our risk management activities, management reviews with the Compensation Committee its compensation policies and practices applicable to employees that could affect our assessment of risk and risk management. The Compensation Committee and management believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on Vertiv.
| | | | | | | | | | | 34 | | | | | - 2023 Proxy Statement
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Tax and Accounting Considerations
The tax and accounting impacts of our executive compensation program are among many factors that may be considered in determining the size and structure of our executive compensation program. Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code”), denies a publicly traded corporation a federal income tax deduction for remuneration in excess of $1 million per year per person paid to executives designated in Section 162(m) of the Code, including, but not limited to, its chief executive officer, chief financial officer and the next three highly compensated executive officers.
As part of our risk management activities, management reviews with the Compensation Committee its compensation policies and practices applicable to employees that could affect our assessment of risk and risk management. The Compensation Committee and management believe that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on Vertiv. Tax and Accounting Considerations The tax and accounting impacts of our executive compensation program are among many factors that may be considered in determining the size and structure of our executive compensation program. Section 162(m) of the Internal Revenue Code of 1986, as amended (“Code”), denies a publicly traded corporation a federal income tax deduction for remuneration in excess of $1 million per year per person paid to executives designated in Section 162(m) of the Code. We have not adopted a policy that requires that all compensation be deductible. Stock Ownership Guidelines for Our Officers and Directors Our directors, named executive officers and other designated individuals are expected to own our stock based on the following multiple-of-salary ownership threshold guidelines. | | | | | Position | | Multiple for Stock Ownership Guidelines for Our Officers and DirectorsOur directors, named executive officers and other designated individuals are expected to own our stock based on the following multiple-of-salary ownership threshold guidelines.
| | | Directors | 5 times Cash Retainer | | | | | | | Position
| | Multiple for Stock Ownership Guidelines | | | Directors
| | 5 times Cash Retainer | | | Chief Executive Officer | | 5 times Salary | | | NEO | | 3 times Salary | | | Other Section 16 Officers (reporting to the CEO) | | 2 times Salary | | | Other Section 16 Officers (not reporting to the CEO) | | 1 times Salary | | | NEOs
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Directors and officers are expected to comply with the multiple-of-retainer/salary stock ownership guidelines by the later of five years from appointment to the relevant role or February 7, 2025. Additionally, if an executive officer is promoted to a higher level, that person will have three years to achieve the higher stock ownership guideline. Once the individual has acquired a number of our shares that satisfies the ownership multiple, such number of shares shall represent that person’s minimum ownership requirement (even if that person’s salary increases or the fair market value of such number of shares subsequently falls below the required ownership multiple) until (in the case of an executive officer) such person is promoted to a higher level. The Company has adopted a “no sale” restriction that restricts an executive officer from selling stock unless and until such individual has met or exceeds ownership guidelines (provided, however, that an individual is prohibited from selling if they don’t satisfy the guidelines without the earned but unvested performance shares). For purposes of satisfying the requirements of the stock ownership guidelines, ownership includes stock owned privately, shares (or equivalent shares) awarded to, or purchased by, an officer or director pursuant to a qualified or non-qualified benefit or savings plan, shares acquired on exercise of stock options or settlement of vested RSUs, unvested restricted stock units, or unvested but earned strategic performance awards (that is, assuming the applicable target performance for that year has been achieved). No options or unearned performance awards are included. Our Insider Trading Policy is designed to encourage | | 3 times Salary | | | Other Section 16 Officers (reporting to the CEO)
| | 2 times Salary | | | Other Section 16 Officers (not reporting to the CEO)
| | 1 times Salary | Directors and officers are expected to comply with the
34 multiple-of-retainer/salary| stock ownership guidelines by the later of five years from appointment to the relevant role or February 7, 2025. Additionally, if an executive officer is promoted to a higher level, that person will have three years to achieve the higher stock ownership guideline. Once the individual has acquired a number of our shares that satisfies the ownership multiple, such number of shares shall represent that person’s minimum ownership requirement (even if that person’s salary increases or the fair market value of such number of shares subsequently falls below the required ownership multiple) until (in the case of an executive officer) such person is promoted to a higher level.For purposes of satisfying the requirements of the stock ownership guidelines, ownership includes stock owned privately, shares (or equivalent shares) awarded to, or purchased by, an officer or director pursuant to a qualified or non-qualified benefit or savings plan, or shares acquired on exercise of stock options or settlement of vested RSUs. No options or unearned performance awards are included. Insider Trading Policy is designed to encourage compliance with applicable regulatory requirements, such as by requiring that insiders may only sell or purchase our stock during open window periods (other than under Rule 10b5-1 plans permitted by applicable law).
| | | | Compensation Committee Interlocks and Insider Participation- 2024 Proxy Statement
None of the directors who are currently or who were members of our Compensation Committee during 2022, are either currently, or have been at any time, an officer or employee of Vertiv. None of our executive officers currently serves, or served during 2022, as a member of the Board or Compensation Committee of any entity while one or more of its executive officers was serving as a member of our Board or Compensation Committee.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained herein with management. Based on its review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022
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compliance with applicable regulatory requirements, such as by requiring that insiders may only sell or purchase our stock during open window periods (other than under Rule 10b5-1 plans permitted by applicable law). Compensation Committee Interlocks and Insider Participation None of the directors who are currently or who were members of our Compensation Committee during 2023, are either currently, or have been at any time, an officer or employee of Vertiv. None of our executive officers currently serves, or served during 2023, as a member of the Board or Compensation Committee of any entity while one or more of its executive officers was serving as a member of our Board or Compensation Committee. Compensation Committee Report The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained herein with management. Based on its review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in this proxy statement. The Compensation Committee Roger Fradin, Chair Joseph J. DeAngelo Joseph van Dokkum Steven S. Reinemund | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - 20232024 Proxy Statement | 35 |
COMPENSATION TABLES Summary Compensation Table The following table shows compensation of our named executive officers for 20222023 and, where applicable, for prior years. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and
principal position(1) | | | | | Salary
($) | | | Bonus
($)(2) | | | Stock
Awards
($)(2)(3) | | | Option
Awards
($)(3) | | | Non-equity
incentive plan
compensation
($)(4) | | | All other
compensation
($)(5) | | | Total
($) | | Robert Johnson Former Chief Executive Officer | | | 2022 | | | | 950,000 | | | | — | | | | — | | | | 5,962,609 | | | | 890,625 | | | | 230,287 | | | | 8,033,521 | | | | | 2021 | | | | 950,000 | | | | — | | | | — | | | | 3,999,997 | | | | — | | | | 230,840 | | | | 5,180,837 | | | | | 2020 | | | | 893,365 | | | | 4,104,000 | | | | 12,608,000 | | | | 1,399,999 | | | | 475,000 | | | | 146,825 | | | | 19,627,189 | | David Fallon Chief Financial Officer | | | 2022 | | | | 591,154 | | | | — | | | | 3,870,000 | | | | 1,273,950 | | | | 483,750 | | | | 121,581 | | | | 6,340,435 | | | | | 2021 | | | | 575,000 | | | | — | | | | — | | | | 1,541,998 | | | | — | | | | 20,595 | | | | 2,137,593 | | | | | 2020 | | | | 540,721 | | | | 1,047,750 | | | | 2,758,000 | | | | 859,998 | | | | 488,750 | | | | 8,550 | | | | 5,703,769 | | Giordano Albertazzi(6) Chief Executive Officer and President, Americas | | | 2022 | | | | 597,086 | | | | — | | | | 6,750,000 | | | | 3,901,300 | | | | 410,254 | | | | 174,368 | | | | 11,833,008 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stephen Liang Chief Technology Officer and EVP, Infrastructure and Solutions | | | 2022 | | | | 606,414 | | | | — | | | | 3,000,000 | | | | 737,550 | | | | 453,600 | | | | 238,769 | | | | 5,036,333 | | | | | 2021 | | | | 590,400 | | | | — | | | | — | | | | 899,996 | | | | — | | | | 98,547 | | | | 1,588,943 | | | | | 2020 | | | | 555,983 | | | | 876,448 | | | | 2,206,400 | | | | 599,998 | | | | 219,450 | | | | 231,689 | | | | 4,689,968 | | Philip O’Doherty(6) Managing Director, E&I | | | 2022 | | | | 448,096 | | | | — | | | | 2,400,000 | | | | — | | | | 129,024 | | | | — | | | | 2,977,120 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and
principal position(1) | | | | | Salary
($) | | | Bonus
($) | | | Stock
Awards
($)(2) | | | Option
Awards
($)(2) | | | Non-equity
incentive plan
compensation
($)(3) | | | All other
compensation
($)(4) | | | Total
($) | | Giordano Albertazzi(6)
Chief Executive Officer | | | 2023 | | | | 865,385 | | | | | | | | | | | | 3,300,000 | | | | 2,000,000 | | | | 17,789 | | | | 6,183,174 | | | | | 2022 | | | | 597,086 | | | | | | | | 6,750,000 | | | | 3,901,300 | | | | 410,254 | | | | 174,368 | | | | 11,833,008 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David Fallon
Chief Financial Officer | | | 2023 | | | | 659,615 | | | | | | | | | | | | 1,399,999 | | | | 623,438 | | | | 52,200 | | | | 2,735,252 | | | | | 2022 | | | | 591,154 | | | | | | | | 3,870,000 | | | | 1,273,950 | | | | 483,750 | | | | 121,581 | | | | 6,340,435 | | | | | 2021 | | | | 575,000 | | | | | | | | | | | | 1,541,998 | | | | | | | | 20,595 | | | | 2,137,593 | | Stephen Liang
Chief Technology Officer and EVP | | | 2023 | | | | 663,750 | | | | | | | | | | | | 799,999 | | | | 824,378 | | | | 66,375 | | | | 2,354,502 | | | | | 2022 | | | | 606,414 | | | | | | | | 3,000,000 | | | | 737,550 | | | | 453,600 | | | | 238,769 | | | | 5,036,333 | | | | | 2021 | | | | 590,400 | | | | | | | | | | | | 899,996 | | | | | | | | 98,547 | | | | 1,588,943 | | Anand Sanghi
President, Americas | | | 2023 | | | | 464,908 | | | | | | | | 1,050,000 | | | | 999,990 | | | | 575,218 | | | | 169,094 | | | | 3,259,210 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Anders Karlborg
EVP, Manufacturing, Logistics and Operational Excellence | | | 2023 | | | | 465,219 | | | | | | | | 1,854,000 | | | | 339,992 | | | | 523,259 | | | | 364,131 | | | | 3,546,601 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Name and Principal Position. Mr. Johnson was our CEO through December 31, 2022. Mr. Albertazzi became our CEO on January 1, 2023. AtMr. Sanghi assumed the beginningrole of 2022, Mr. Albertazzi served as President, EMEA, prior to being appointed President, Americas for Vertiv on July 1, 2023. He was previously president for Vertiv Australia, New Zealand, Southeast Asia, Japan, South Korea and India (ASI). Mr. Karlborg was promoted to EVP, Manufacturing, Logistics and Operational Excellence, in March 2022.August 2023. He also became our Chief Operating Officer in October 2022,was previously SVP Americas Operations and he remains President, Americas.Global Channel. |
| (2) | 2020 Special Compensation Items.
|
| (a) | One-Time Transaction Exit Bonus Reinvested in Company Stock. The amounts reported in the “Bonus” column for 2020 represent one-time payments of a transaction exit bonus pursuant to commitments made by the previous owner of the Vertiv business in connection with the consummation of the Business Combination, of which all or a substantial portion of the after-tax payments were invested in Company stock. In addition, this column for 2020 includes a payment made to Mr. Liang in 2020 reflecting adjustments for 2019 performance under his Mid-Term Incentive Plan, which is no longer in effect.
|
| (b) | 2020 One-Time Founder RSU’s. The amounts reported in the “Stock Awards” column for 2020 represent the aggregate grant date fair value of one-time RSU grants committed to by the previous owner of the Vertiv business and required pursuant to the negotiations in connection with the Business Combination and so do not represent typical annual grant award values.
|
(3) | Equity Grants. The amounts reported in these columns represent the aggregate grant date fair value of stock awards (“RSUs”), One-TimeStrategic Performance Awards and stock options, and the incremental value from award modifications, as applicable, for equity awards granted (or modified) in the relevant fiscal year. Assumptions used in calculating these amounts are described in Note 15 to our audited financial statements in our Form 10-K for the year ended December 31, 2022,2023, filed with the SEC. Also see the table entitled “Grants of Plan Awards in Fiscal 2022”2023” below for further information regarding grants made during 2022. |
| (a) | One-Time Performance Awards. Amounts attributable to the One-Time Performance Awards reported in this column are based on assumptions of what may potentially be earned under these awards. To the extent earned based on actual performance and converted into RSUs, the awards will cliff vest if the recipient remains employed until January 1, 2027.2023. The amounts set forth in this column for the One-TimeStrategic Performance Awards are valued at target. See “Compensation Discussion and Analysis—Long-Term Incentive Compensation” above for each NEO’s individual target value for each year in the three-year performance period, the performance conditions and other terms of these awards.
|
| (b) | Modification of Certain of Mr. Johnson’s Equity Grants. Pursuant to the terms of an agreement entered into by the Company and Mr. Johnson during 2022, (i) unvested RSUs held by Mr. Johnson as of December 31, 2022 were forfeited, (ii) unvested stock options granted to Mr. Johnson in 2021 were forfeited, (iii) vested stock options held by Mr. Johnson as of December 31, 2022 will remain exercisable for three years after the effective date of termination rather than six months per the terms of his award agreements, (iv) unvested stock options granted to Mr. Johnson in 2020 and 2022 will not be forfeited and will continue to vest in accordance with the original vesting schedule if he complies with his agreements with the Company, and (1) those options that vest in 2023 will be exercisable for two years, and (2) those options that vest in 2024, 2025, and 2026 will be exercisable for one year after the applicable vesting date.
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| | | | | | | | | | | 36 | | | | | - 2023 Proxy Statement
| | | | | | |
(4)(3) | Annual Vertiv Incentive PlanVIP. The amounts reported in this column for 20222023 reflect payments under the 2022 Vertiv Incentive Plan,2023 VIP, as described in the “Compensation Discussion and Analysis” above. |
(5)(4) | Other Benefits. The amounts shown in this column for 20222023 represent other compensation, including the cost of personal benefits or perquisites that exceed $10,000 in the aggregate. We maintain arrangements with third-party charter companies for use of chartered aircraft, used primarily for business purposes. The value of personal aircraft usage reported in this table is based on Vertiv’s actual invoiced amount from the charter company for the variable costs incurred on each trip. Because the aircraft is used primarily for business travel, this methodology excludes fixed costs that do not change based on usage, such as depreciation and management fees. To the extent an NEO’s spouse or guests accompany the officer when a flight is already going to a specific destination for a business purpose, there is no aggregate incremental cost to Vertiv of such personal use. |
| | (a) | Robert JohnsonGiordano Albertazzi. The amount for 20222023 includes $217,814(i) $6,346 in housing and (ii) $11,443 for personal use of the chartered aircraft. Some trips hadtravel-related expenses as a business purpose, but may be deemed to have a personal benefit under SEC disclosure rules, and so we have included the costs of such trips in the interests of full transparency. There were no tax gross-ups provided on anyresult of his aircraft usage. The remaining amount for 2022 reflects matching contributions to our 401(k) plan in the amount of $9,150 and other commuting expenses of $3,323.accepting a U.S.-based role.
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| | (b) | David Fallon. The amount for 20222023 includes $74,675(i) $25,024 in relocation expenses including moving household goods plus $16,698 for personal usereimbursement of the chartered aircraft, which had a business purpose (primarily traveling between his home and our headquarterstaxes due on a regular basis as we moved to in-office work, prior to his expectedthese relocation during 2023). There were no tax gross-ups provided on any of his aircraft usage. The remaining amount for 2022 reflectsbenefits, (ii) $9,900 in matching contributions to our 401(k) plan, in the amount of $9,150 and (iii) $578 for other commuting expenses (such as lodging, car rental and commercial airfare) of $37,756.personal benefits. |
| | (c) | Giordano AlbertazziStephen Liang. The amount for 20222023 reflects $66,375 in Company contributions to applicable retirement plans.
|
| (d) | Anand Sanghi. The amount for 2023 includes $22,766(i) $10,031 in Company contributions to enforce Mr. Albertazzi’s non-compete agreementapplicable retirement plans, (ii) relocation expenses consisting of $75,900 in temporary housing and moving expenses, and (iii) various benefits under Italian law, $28,845his local Singapore contract during his time there, consisting of $66,634 in housing allowance, $20,299$11,614 in carvehicle allowance $69,013and $4,915 in other costs, such as club dues, utilities, and education expenses. |
| (e) | Anders Karlborg. The amount for 2023 includes (i) $54,702 relocation benefits (including moving of household goods and travel costs), plus $88,543 for reimbursement of taxes due on these relocation benefits, (ii) $212,460 in tax equalization benefits, and related(iii) $8,426 for travel-related expenses as a result of his accepting a U.S.-based role (primarily related to commercial airfare for flights by him and his family between the U.S. and Italy, as well as items such as lodging and car rental), and a tax service fee in the amount of $25,727 in connection with the filing of his U.S. and Italy tax returns. In connection with agreeing to a new role in the United States, Mr. Albertazzi will be eligible for tax equalization based on 2022 compensation, but no such payments were made in 2022. |
| (d) | Stephen Liang. The amount for 2022 includes (i) tax service fees in the amount of $30,141 in connection with the filing of his U.S. and Hong Kong tax returns, (ii) the employer portion of the contribution to his ORSO pension account equal to $60,683, and (iii) $4,575 for a car allowance. In addition, includes $143,370 in tax equalization payments for compensation prior to 2022, and the agreement to provide him with tax equalization benefits has ended. role.
|
(6)(5) | Currency Exchange. During fiscal 2022,2023, a portion of cash compensation was paid to each of Mr. AlbertazziLiang in Hong Kong dollars and Mr. O’Doherty was paidSanghi in Euros, and forSingapore dollars. For purposes of this table, such compensation was converted to U.S. dollars using a currency exchange rate asdetermined in January 2024 of January 1, 2023.$0.128 and $0.7572, respectively. |
| | | | | | | | | | | | | | | | | | | | | | | | | 36 | | | | | | - 20232024 Proxy Statement| 37 | | | | | | |
Grants of Plan-Based Awards in Fiscal 20222023 The following table sets forth each award granted to a named executive officer in fiscal 20222023 under plans established by the Company. | | | | | | | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(2) | | Estimated
Future
Payouts
Under
Equity
Incentive
Plan
Awards(3)(4) | | | All other
Stock and
Option
Awards:
Number of Shares of Stock
Underlying
Options
(#) | | Exercise
or Base
Price of
Options
Award | | Grant Date
Fair Value
of Stock
and
Option
Awards(5) | | | | | | | | | | Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(2) | | Estimated
Future
Payouts
Under
Equity
Incentive
Plan
Awards(3)(4) | | | All other
Stock and
Option
Awards:
Number
of
Shares of
Stock
Underlying
Options
(#) | | Exercise
or Base
Price of
Options
Award | | Grant Date
Fair Value
of Stock
and
Option
Awards(5) | | Named Executive
Officer | | Type of Award | | Grant
Date | | Approval
Date(1) | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold/
Target ($) | | | Type of
Award | | Grant
Date | | Approval
Date(1) | | Threshold
($) | | Target
($) | | Maximum
($) | | Threshold/
Target ($) | | | Robert Johnson | | VIP | | | — | | | | — | | | | — | | | | 1,187,500 | | | | 2,375,000 | | | | — | | | | — | | | | — | | | | — | | | Giordano Albertazzi | | Giordano Albertazzi | | | VIP | | | | | | | | | 1,125,000 | | | | 2,250,000 | | | | | | | | | | | | NQSO | | | 3/3/22 | | | | 3/3/22 | | | | — | | | | — | | | | — | | | | — | | | | 735,000 | | | $ | 11.50 | | | | 3,285,450 | | | | | | NQSO
Modification(6) | | | | | 10/3/22 | | | | — | | | | — | | | | — | | | | — | | | | | (6) | | | | (6) | | | 2,677,158 | | | NQSO | | | 3/7/23 | | | | 2/28/23 | | | | | | | | | | | | 472,103 | | | $ | 15.84 | | | | 3,300,000 | | | David Fallon | | VIP | | | — | | | | — | | | | — | | | | 645,000 | | | | 1,290,000 | | | | — | | | | — | | | | — | | | | — | | David Fallon | | | VIP | | | | | | | | | 665,000 | | | | 1,330,000 | | | | | | | | | | | | | NQSO | | | 3/3/22 | | | | 3/3/22 | | | | — | | | | — | | | | — | | | | — | | | | 285,000 | | | | 11.50 | | | | 1,273,950 | | | | | | NQSO | | | 3/7/23 | | | | 2/28/23 | | | | | | | | | | | | 200,286 | | | $ | 15.84 | | | | 1,399,999 | | | | | One-Time
Performance
Award | | | 11/18/22 | | | | 11/18/22 | | | | — | | | | — | | | | — | | | | 3,870,000 | | | | — | | | | — | | | | 3,870,000 | | Stephen Liang | | Stephen Liang | | | VIP | | | | | | | | | 531,000 | | | | 1,062,000 | | | | | | | | | | | Giordano Albertazzi | | VIP | | | — | | | | — | | | | — | | | | 555,312 | | | | 1,110,624 | | | | — | | | | — | | | | — | | | | — | | | | | | | | | NQSO | | | 3/7/23 | | | | 2/28/23 | | | | | | | | | | | | 114,449 | | | $ | 15.84 | | | | 799,999 | | | Anand Sanghi | | Anand Sanghi | | | VIP | | | | | | | | | 340,356 | | | | 680,712 | | | | | | | | | | | | | NQSO | | | 3/3/22 | | | | 3/3/22 | | | | — | | | | — | | | | — | | | | — | | | | 110,000 | | | | 11.50 | | | | 491,700 | | | | | | Strategic
Performance
Award | | | 7/3/23 | | | | 5/16/23 | | | | | | | | | | 1,050,000 | | | | | | | | 1,050,000 | | | | NQSO | | | 3/16/22 | | | | 3/13/22 | | | | — | | | | — | | | | — | | | | — | | | | 140,000 | | | | 12.32 | | | | 684,600 | | | | | NQSO | | | 10/5/22 | | | | 10/3/22 | | | | — | | | | — | | | | — | | | | — | | | | 500,000 | | | | 11.99 | | | | 2,725,000 | | | NQSO | | | 3/7/23 | | | | 2/28/23 | | | | | | | | | | | | 42,918 | | | $ | 15.84 | | | | 299,997 | | | | | | One-Time
Performance
Award | | | 11/18/22 | | | | 11/18/22 | | | | — | | | | — | | | | — | | | | 6,750,000 | | | | — | | | | — | | | | 6,750,000 | | | | | | NQSO | | | 7/3/23 | | | | 5/16/23 | | | | | | | | | | | | 66,666 | | | $ | 24.87 | | | | 699,993 | | Stephen Liang | | VIP | | | — | | | | — | | | | — | | | | 504,000 | | | | 1,008,000 | | | | — | | | | — | | | | — | | | | — | | | Anders Karlborg | | Anders Karlborg | | | VIP | | | | | | | | | 257,888 | | | | See | (2) | | | | | | | | | | | | NQSO | | | 3/3/22 | | | | 3/3/22 | | | | — | | | | — | | | | — | | | | — | | | | 165,000 | | | | 11.50 | | | | 737,550 | | | | | | Strategic
Performance
Award | | | 7/3/23 | | | | 6/27/23 | | | | | | | | | | 1,854,000 | | | | | | | | 1,854,000 | | | | | One-Time
Performance
Award | | | 11/18/22 | | | | 11/18/22 | | | | — | | | | — | | | | — | | | | 3,000,000 | | | | — | | | | — | | | | 3,000,000 | | | Philip O’Doherty | | VIP | | | — | | | | — | | | | — | | | | 358,400 | | | | 716,800 | | | | — | | | | — | | | | — | | | | — | | | | | | NQSO | | | 3/7/23 | | | | 2/28/23 | | | | | | | | | | | | 24,320 | | | $ | 15.84 | | | | 169,997 | | | | | One-Time
Performance
Award | | | 11/18/22 | | | | 11/18/22 | | | | — | | | | — | | | | — | | | | 2,400,000 | | | | — | | | | — | | | | 2,400,000 | | | | | | | | | NQSO | | | 7/3/23 | | | | 6/27/23 | | | | | | | | | | | | 16,190 | | | $ | 24.87 | | | | 169,995 | |
| (1) | The annualAnnual grants of stock optionsto executive officers were approved at athe first Compensation Committee meeting of the Compensation Committeeyear on March 3, 2022 (when the closing price of our common stock was $11.50),February 28, 2023, but were effective on the same day. The positiondate of the full Board approved such grants on March 7, 2023. Additional grants to Mr. Albertazzi upon his appointment to President, AmericasSanghi and Mr. Karlborg were approved by the Compensation Committee on March 13, 2022 (when the closing price of our common stock on the immediate prior business day was $11.84), to be effective on March 16, 2022 (when the closing price of our common stock was $12.32). The position grants to Mr. Albertazzi upon his appointment to Chief Operating Officer and incoming CEO were approved by the Compensation Committee on October 3, 2022 (when the closing price of our common stock on the immediately priorfirst business day was $9.72), to befollowing the effective on October 5, 2022 (when the closing pricedate of our common stock was $11.99).their respective new position appointments.
|
| (2) | Under the Vertiv Incentive PlanVIP for fiscal 2022,2023, each NEO had a target bonus opportunity as specified in this table. The maximum payout for executive officers was 200% of target, and there was no threshold. Mr. Karlborg was an executive officer for only part of the year. For a discussion of the determination of amounts earned for 20222023 under the Vertiv Incentive Plan,VIP, which are reflected in the Summary Compensation Table above, see the “Compensation Discussion and Analysis” above. |
| (3) | The stock options, RSUs, and One-Time Performance Awardsequity awards reported in this table were granted under our 2020 Stock Incentive Plan. During 2022,In addition, during 2023, dividend equivalents on the RSUs were accrued in the form of additional RSUs pursuant to the terms of the award agreements, vesting over the same schedule as the underlying RSUs and as reflected in the “Outstanding Equity Awards at 20222023 Fiscal Year-End” table below. |
| (4) | The terms of the One-TimeStrategic Performance Awards are described in the “Compensation Discussion and Analysis” above. Payouts require achieving target AOP results and, to the extent earned, vest on January 1, 2027. |
| (5) | The amounts reported in these columns represent the aggregate grant date fair value and the incremental value from modifications, as applicable, of equity awards granted (or modified) in the relevant fiscal year. Assumptions used in calculating these amounts are described in Note 15 to our audited financial statements in our Form 10-K for the year ended December 31, 2022,2023, filed with the SEC. |
(6) | As further described under “Potential Payments Upon Termination or Change in Control” below, certain stock options granted to Mr. Johnson in 2020 and 2022 will continue to vest in accordance with the original vesting schedule if he complies with his agreements with the Company, and he will have the exercise period described thereunder to exercise his vested options. Also see footnote 3 to the Summary Compensation Table above. As of the date of the modification in October 2022, the exercise price of all of the stock options was greater than the fair market value of Vertiv stock.
|
| | | | | | | | | | | | | | | | | | 38 | | | | | | | | | | | | | - 20232024 Proxy Statement| 37 | | | | | | |
Understanding Our Summary Compensation Table and Grants of Plan-Based Awards in Fiscal 20222023 Table Employment Arrangements. Our Executive Employment Policy and our Executive Change of Control Plan generally cover our named executive officers, except as provided in certain non-U.S. employment agreements. Mr. Albertazzi has entered into a new agreement memorializing his appointment as CEO and addressing his compensation, benefits, and work location and confirming his participation in the Executive Employment Policy and the Executive Change of Control Plan. Mr. Liang entered into a letter agreement dated April 20, 2022, subsequently amended on August 5, 2022, and relating to his salary, position, work location in the United States and other locations as needed, and confirming his participation in the Executive Employment Policy and the Executive Change of Control Plan. Mr. O’Doherty entered into an Employment Agreement, dated as of November 1, 2021,Plan, in connection with the closing of the E&I acquisition, addressingaddition to his initial compensation and termination provisions.prior employment agreement under Hong Kong law. Vertiv’s named executive officers are subject to confidentiality, non-compete and non-solicitation covenants thereunder.covenants. See “Potential Payments Upon Termination or Change in Control” below for a description of the post-termination provisions in these arrangements. Annual Cash Incentive Plan. During 2022,2023, Vertiv maintained the Vertiv Incentive Plan,VIP, pursuant to which cash incentive awards may be made to the named executive officers and other eligible employees based on 20222023 performance. Executive officers must be employed by the Company at the time of payout under the Vertiv Incentive PlanVIP to be eligible for award. For a summary of the Vertiv Incentive PlanVIP and the determination of payouts for 20222023 performance, see the “Compensation Discussion and Analysis” above. Standard Equity Awards.Our stock options and RSUsequity awards were granted under, and are governed by and subject to, the terms and conditions of the 2020 Stock Incentive Plan and the relevant award agreements. As described above, during 2023, all of our NEOs were granted stock options, and the two NEOs who were promoted during the year to their current positions were granted Strategic Performance Awards (which are intended to incentivize the executive management team to achieve multi-year key goals for the business and to promote long-term retention of the business leaders that we need to attain such goals). A description of treatment of equity awards on termination of employment is included under “Potential Payments Upon Termination or Change in Control” below.
One-Time Performance Awards. Vertiv granted one-time long-term performance equity awards to incentivize the executive management team to achieve multi-year key goals for the business and to promote the long-term retention of the business leaders that we need to attain such goals. See “Compensation Discussion and Analysis—Long-Term Incentive Compensation” above for a description of these awards.
Retirement Plans and Other Benefits. Vertiv maintains retirement benefit plans, including a 401(k) plan for U.S. employees, and provides the named executive officers with benefits and perquisites. For a summary of those plans and benefits, see the “Compensation Discussion and Analysis” above. | | | | | | | | | | | | | | | | | | | | | | | | | 38 | | | | | | - 20232024 Proxy Statement| 39 | | | | | | |
Outstanding Equity Awards at 2022 2023 Fiscal Year-End | | | | | | | Option Awards | | Stock Awards | | | | | | Option Awards | | Stock Awards | | Name | | Grant Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1) | | Option
Exercise
Price ($) | | Options
Expiration
Date(2) | | Number of
Shares or
Units of
Stock that
Have Not
Vested
(#))(3)(4) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(5) | | | Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have not Yet
Vested (#)(6) | | Equity incentive
plan awards:
market or payout
value of unearned
shares, units or
other rights that
have not vested
($) | | | Grant
Date | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1) | | Option
Exercise
Price ($) | | Options
Expiration
Date(2) | | Number of
Shares or
Units of
Stock that
Have Not
Vested
(#))(3)(4) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(5) | | | Equity
Incentive Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have not Yet
Vested (#)(6) | | Equity incentive
plan awards:
market or payout
value of unearned
shares, units or
other rights that
have not vested
($) | | | Robert Johnson | | | 3/3/2022 | | | | — | | | | 735,000 | | | | 11.50 | | | | (2 | ) | | | — | | | | — | | | | — | | | | — | | | | | | 2/26/2021 | | | | 149,700 | (2) | | | 449,102 | | | | 20.93 | | | | (2 | ) | | | — | | | | — | | | | — | | | | — | | | | | | 8/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | (7 | ) | | | (7 | ) | | | — | | | | — | | | | | | 2/7/2020 | | | | 169,082 | | | | 169,082 | | | | 12.05 | | | | (2 | ) | | | — | | | | — | | | | — | | | | — | | | David Fallon | | | 11/18/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6 | ) | | | 3,870,000 | | | | | | 3/3/2022 | | | | — | | | | 285,000 | | | | 11.50 | | | | 3/3/2032 | | | | — | | | | — | | | | — | | | | — | | | | | | 2/26/2021 | | | | 57,709 | | | | 173,129 | | | | 20.93 | | | | 2/26/2031 | | | | — | | | | — | | | | — | | | | — | | | | | | 8/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | 87,643.65 | | | | 1,197,212 | | | | — | | | | — | | | | | | 2/7/2020 | | | | 103,864 | | | | 103,865 | | | | 12.05 | | | | 2/7/2030 | | | | — | | | | — | | | | — | | | | — | | | Giordano Albertazzi | | Giordano Albertazzi | | Giordano Albertazzi | | Giordano Albertazzi | | | 11/18/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6 | ) | | | 6,750,000 | | | | 3/7/2023 | | | | | | 472,103 | | | | 15.84 | | | | 3/7/2033 | | | | | | | | | | | | | | 10/5/2022 | | | | — | | | | 500,000 | | | | 11.99 | | | | 10/5/2032 | | | | — | | | | — | | | | — | | | | — | | | | | | 3/16/2022 | | | | — | | | | 140,000 | | | | 12.32 | | | | 3/3/2032 | | | | — | | | | — | | | | — | | | | — | | | | | | 11/18/2022 | | | | | | | | | | | | (6 | ) | | | 2,700,000 | | | | (6 | ) | | | 4,500,000 | | | | | 3/3/2022 | | | | — | | | | 110,000 | | | | 11.50 | | | | 3/3/2032 | | | | — | | | | — | | | | — | | | | — | | | | | | 2/26/2021 | | | | 22,455 | | | | 67,365 | | | | 20.93 | | | | 2/26/2031 | | | | — | | | | — | | | | — | | | | — | | | | | | 8/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | 70,114.92 | | | | 957,770 | | | | — | | | | — | | | | 10/5/2022 | | | | 125,000 | | | | 375,000 | | | | 11.99 | | | | 10/5/2032 | | | | | | | | | | | | | | 2/7/2020 | | | | 72,464 | | | | 72,464 | | | | 12.05 | | | | 2/7/2030 | | | | — | | | | — | | | | — | | | | — | | | | | | | | | 3/16/2022 | | | | 35,000 | | | | 105,000 | | | | 12.32 | | | | 3/3/2032 | | | | | | | | | | | | | | | | | | | | | 3/3/2022 | | | | 27,500 | | | | 82,500 | | | | 11.50 | | | | 3/3/2032 | | | | | | | | | | | | | | | | | | | | | 2/26/2021 | | | | 44,910 | | | | 44,910 | | | | 20.93 | | | | 2/26/2031 | | | | | | | | | | | | | | | | | | | | | 8/12/2020 | | | | | | | | | | | | 35,075.8621 | | | | 1,684,692 | | | | | | | | | | | | | | | | | 2/7/2020 | | | | 108,695 | | | | 36,232 | | | | 12.05 | | | | 2/7/2030 | | | | | | | | | | | David Fallon | | David Fallon | | David Fallon | | David Fallon | | | | 3/7/2023 | | | | | | 200,286 | | | | 15.84 | | | | 3/7/2033 | | | | | | | | | | | | | | | | | | | | | 11/18/2022 | | | | | | | | | | | | (6 | ) | | | 1,548,000 | | | | (6 | ) | | | 2,580,000 | | | | | | | | | | | | | 3/3/2022 | | | | 71,250 | | | | 213,750 | | | | 11.50 | | | | 3/3/2032 | | | | | | | | | | | | | | | | | | | | | 2/26/2021 | | | | 115,418 | | | | 115,418 | | | | 20.93 | | | | 2/26/2031 | | | | | | | | | | | | | | | | | | | | | 8/12/2020 | | | | | | | | | | | | 43,844.3266 | | | | 2,105,842 | | | | | | | | | | | | | | | | | 2/7/2020 | | | | 155,796 | | | | 51,933 | | | | 12.05 | | | | 2/7/2030 | | | | | | | | | | | Stephen Liang | | Stephen Liang | | Stephen Liang | | Stephen Liang | | | 11/18/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6 | ) | | | 3,000,000 | | | | 3/7/2023 | | | | | | 114,449 | | | | 15.84 | | | | 3/7/2033 | | | | | | | | | | | | | | 3/3/2022 | | | | — | | | | 165,000 | | | | 11.50 | | | | 3/3/2032 | | | | — | | | | — | | | | — | | | | — | | | | | | 2/26/2021 | | | | 33,682 | | | | 101,048 | | | | 20.93 | | | | 2/26/2031 | | | | — | | | | — | | | | — | | | | — | | | | | | 11/18/2022 | | | | | | | | | | | | (6 | ) | | | 1,200,000 | | | | (6 | ) | | | 2,000,000 | | | | | 8/12/2020 | | | | — | | | | — | | | | — | | | | — | | | | 70,114.92 | | | | 957,770 | | | | — | | | | — | | | | | | 2/7/2020 | | | | 72,464 | | | | 72,464 | | | | 12.05 | | | | 2/7/2030 | | | | — | | | | — | | | | — | | | | — | | | Philip O’Doherty | | | 11/18/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (6 | ) | | | 2,400,000 | | | | | | 3/3/2022 | | | | 41,250 | | | | 123,750 | | | | 11.50 | | | | 3/3/2032 | | | | | | | | | | | | | | | | | | | | | 2/26/2021 | | | | 67,364 | | | | 67,366 | | | | 20.93 | | | | 2/26/2031 | | | | | | | | | | | | | | | | | | | | | 8/12/2020 | | | | | | | | | | | | 35,075.8621 | | | | 1,684,692 | | | | | | | | | | | | | | | | | 2/7/2020 | | | | 108,695 | | | | 36,232 | | | | 12.05 | | | | 2/7/2030 | | | | | | | | | | | Anand Sanghi | | Anand Sanghi | | Anand Sanghi | | Anand Sanghi | | | | 7/3/2023 | | | | | | 66,666 | | | | 24.87 | | | | 7/3/2033 | | | | | | | | | | | | | | | | | | | | | 3/7/2023 | | | | | | 42,918 | | | | 15.84 | | | | 3/7/2033 | | | | | | | | | | | | | | | | | | | | | 11/18/2022 | (6) | | | | | | | | | | | (6 | ) | | | 960,000 | | | | (6 | ) | | | 1,600,000 | | | | | | | | | | | | | 3/3/2022 | | | | 12,500 | | | | 37,500 | | | | 11.50 | | | | 3/3/2032 | | | | | | | | | | | | | | | | | | | | | 2/26/2021 | | | | 20,583 | | | | 20,584 | | | | 20.93 | | | | 2/26/2031 | | | | | | | | | | | | | | | | | | | | | 4/8/2020 | | | | | | | | | | | | 10,316.0176 | | | | 495,477 | | | | | | | | | | | | | | | | | 2/7/2020 | | | | 49,818 | | | | 16,606 | | | | 12.05 | | | | 2/7/2030 | | | | | | | | | | | Anders Karlborg | | Anders Karlborg | | Anders Karlborg | | Anders Karlborg | | | | 7/3/2023 | | | | | | 16,190 | | | | 24.87 | | | | 7/3/2033 | | | | | | | | | | | | | | | | | | | | | 7/3/2023 | | | | | | | | | | | | (6 | ) | | | 741,600 | | | | (6 | ) | | | 1,236,000 | | | | | | | | | | | | | 3/7/2023 | | | | | | 24,320 | | | | 15.84 | | | | 3/7/2033 | | | | | | | | | | | | | | | | | | | | | 10/3/2022 | | | | 9,823 | | | | 29,469 | | | | 11.50 | | | | 10/3/2032 | | | | | | | | | | | | | | | | | | | | | 4/4/2022 | | | | 4,783 | | | | 14,350 | | | | 14.49 | | | | 4/4/2022 | | | | | | | | | | | | | | | | | | | | | 4/4/2022 | | | | | | | | | | | | 5,164.4335 | | | | 248,047 | | | | | | | | | | | | | | | | | 5/4/2021 | | | | | | | | | | | | 3,456.7022 | | | | 166,025 | | | | | | | | | | | | | | | | | 4/8/2020 | | | | | | | | | | | | 7,369.1562 | | | | 353,940 | | | | | | | | | | | | | | | | | | | | | 2/7/2020 | | | | 30,804 | | | | 15,402 | | | | 12.05 | | | | 2/7/2030 | | | | | | | | | |
| (1) | The stock options become vested and exercisable 25% annually on each of the first four anniversaries of the grant date, (or,except in the case of (a) Mr. Albertazzi’s options granted on March 16, 2022, which vest on the first four anniversaries of March 3, 2022).2022, and (b) in the case of options granted in 2023, the first four anniversaries of the 15th day of the month in which the options were granted. |
| (2) | The stock options expire 10 years after the grant date (subject to earlier expiration following termination of employment), except that for Mr. Johnson, (i) effective January 1, 2023, stock options granted in 2021 shall be forfeited, (ii) stock options that vest in 2023, shall be exercisable for two years from the vesting date, and (iii) stock options that vest in 2024, 2025, and 2026, shall be exercisable for one year after each vesting date, in each case subject to his continued to his continued compliance with his agreements with the Company.. |
| (3) | The RSUs granted on August 12,in 2020 vest 25% annually on each of the first four anniversaries of April 8, 2020. Mr. Karlborg’s additional RSUs granted in 2021 and 2022 vest in equal installments on the third, fifth and seventh anniversaries of the grant date. |
| (4) | The amounts listed include dividend equivalents accrued under the terms of the award agreements in the form of additional RSUs, which vest over the same schedule as the underlying RSUs. Pursuant to the terms of the 2020 Stock Incentive Plan, fractional shares are required to be settled in cash upon vesting. |
| | | | | | | | | | | | | | | | | | | | | | | | | - 2024 Proxy Statement | 39 |
| (5) | Computed in accordance with SEC rules asby multiplying the number of unvested units multipliedas of December 31, 2023 by $48.03, which was the closing price of our Class A common stock on December 31, 2022, which was $13.66.29, 2023, the last trading day of the fiscal year. The actual value realized by the executive officer will depend on whether the award vests and the future stock price performance. |
| (6) | The amount of shares of Vertiv common stock underlying One-TimeStrategic Performance Awards will be calculated based on dollar amounts that are earned if AOP performance targets are met over a three-year performance period, and any such earned amount will be converted into RSUs, the amount determined by dividing each grantee’s aggregate earned dollar amount by the closing stock price of our common stock on the first business day after the release of earnings for fiscal year 2025. For the first performance period of 2023, amounts were earned at 120% of target. The remaining unearned amounts are reported target value. Any resulting RSUs vest on January 1, 2027, subject to continued employment, with certain limited exceptions related to death, disability, and change in control termination. The amount reported for Mr. Sanghi reflects his original award granted in 2022 plus an incremental award in 2023 as a result of his new position appointment. |
(7) | Mr. Johnson’s 400,656.98 unvested RSUs with a market value of $5,472,974 were forfeited on December 31, 2022, his last day of employment, and so are not reflected as outstanding in this table.
|
| | | | | | | | | | | 40 | | | | | - 2023 Proxy Statement
| | | | | | |
Option Exercises and Stock Vested During Fiscal 20222023 The following table sets forth information regarding the number of RSUs that vested, and options that were exercised, during fiscal 2022. There were no options exercised by the NEOs during fiscal 2022.2023. | | | | Option Awards | | | | | | Stock Awards | | | Option Awards | | | | | | Stock Awards | | | Name | | Number of Shares
Acquired on
Exercise (#) | | | Value Realized on
Exercise ($) | | | | | Number of Shares
Acquired on
Vesting (#)(1) | | | Value Realized on
Vesting ($)(2) | | | Number of Shares
Acquired on
Exercise (#)(1) | | | Value Realized on
Exercise ($)(2) | | | | | Number of Shares
Acquired on
Vesting (#)(1) | | | Value Realized on
Vesting ($)(2) | | | Robert Johnson | | | — | | | | — | | | | | | 200,184 | | | | 2,710,478 | | Giordano Albertazzi | | Giordano Albertazzi | | Giordano Albertazzi | | Giordano Albertazzi | | | | | | | | | | 35,057 | | | | 434,011 | | | David Fallon | | | — | | | | — | | | | | | 43,790 | | | | 592,917 | | | Giordano Albertazzi | | | — | | | | — | | | | | | 35,032 | | | | 474,333 | | David Fallon | | David Fallon | | David Fallon | | | | | | | | | | 43,822 | | | | 542,520 | | | Stephen Liang | | | — | | | | — | | | | | | 35,032 | | | | 474,333 | | Stephen Liang | | Stephen Liang | | Stephen Liang | | | | | | | | | | 35,057 | | | | 434,011 | | | Philip O’Doherty | | | — | | | | — | | | | | | — | | | | — | | Anand Sanghi | | Anand Sanghi | | Anand Sanghi | | Anand Sanghi | | | | | | | | | | 10,310 | | | | 127,645 | | | Anders Karlborg | | Anders Karlborg | | Anders Karlborg | | Anders Karlborg | | | | | | | | | | 7,365 | | | | 91,182 | |
| (1) | Represents the number of shares of our Class A common stock underlying options that were exercised, or RSUs that became vested, during 2022,2023, prior to any tax withholding. Does not include fractional shares mandatorily settled in cash. |
| (2) | Value realized on vesting reflects the closingmarket price of our Class A common stock on the applicable exercise or vesting date, (which was $13.54 onas applicable, less the April 8, 2022 vesting date for all of the RSUs listedoption exercise price in the table above)case of option exercises, multiplied by the number of shares underlying RSUs that were exercised or became vested.vested, as applicable. |
Potential Payments Upon Termination or Change in Control Executive Employment Policy, Award Agreements and Other Agreements Severance Benefits. Under the Executive Employment Policy, if a named executive officer’s employment is terminated without cause or by the executive for good reason (each as defined in the Executive Employment Policy), then in addition to accrued obligations through the termination date, provided that the named executive officer executes and does not revoke a release, each named executive officer shall be eligible for the following severance benefits: | (i) | a cash payment equal to one times the sum of the executive’s annual rate of base salary immediately prior to the termination of employment, and target annual bonus, to be paid in installments over 12 months in accordance with our normal payroll policies; |
| (ii) | a cash payment equal to one times the executive’s target annual bonus, to be paid in installments over 12 months in accordance with our normal payroll policies, or, for individuals who become subject to the Employment Policy after 2023, a pro-rated target bonus; |
| (iii) | any earned and unpaid annual bonus for the fiscal year preceding the fiscal year in which the termination occurs; and |
(iii)(iv) | reimbursement of COBRA continuation coverage costs for 12 months. |
Mr. O’Doherty’s employment agreement under the laws of Ireland provides for similar termination benefits, reduced by any applicable notice period or garden leave.
Each named executive officer is subject to standard restrictive covenants, including non-competition and non-solicitation covenants for 12 months. If an executive’s employment is terminated by reason of the executive’s death or disability, then in addition to accrued obligations through the termination date, Vertiv shall pay to the executive or the executive’s beneficiary or estate, as the case may be, (i) any earned and unpaid amounts owed under the Vertiv Incentive PlanVIP for the fiscal year preceding the fiscal year in which the termination date occurs and (ii) a pro-rata portion portion of the executive’s compensation under the Vertiv Incentive PlanVIP for the fiscal year in which the termination date occurs, subject to the achievement of applicable performance measures and paid at the same time as amounts are paid to other executives generally. Equity Award Provisions. The RSU agreements for RSUs granted prior to 2024 to individuals who were executive officers at the time of grant provide that, upon a termination without cause by Vertiv, any unvested RSUs scheduled to vest during | | | | | | | | | | | | 40 | | | | | - 2024 Proxy Statement | | | | | | |
the six-month period period following termination shall vest on the applicable scheduled vesting dates. In addition, the RSU and option agreements provide that the awards will vest in full upon termination of employment due to death or disability and remain eligible for continued vesting upon retirement from active employment on or after age 65 with 10 years of service. The One-TimeStrategic Performance Award agreements provide that the awards will be forfeited upon a termination of the executive’s employment prior to the January 1, 2027 vesting date, with limited exceptions. If the executive’s employment is terminated due to death or disability, the earned portion for any completed years of the performance period will become vested, with remaining unearned portions forfeited. Treatment on a change in control is described below. Agreement with Mr. Johnson. The Company entered into an agreement with Mr. Johnson in connection with the announcement on October 3, 2022 that his employment with the Company would end at year-end. Mr. Johnson agreed to remain as CEO through year-end and thereafter to remain as a consultant to the Company for five years, for an annual fee of
| | | | | | | | | | | | | | | | | | | | | | | | | - 2023 Proxy Statement | 41
|
$20,000 starting in 2023. The agreement included an extended two-year non-compete and other restrictive covenants and a release by Mr. Johnson. He remained eligible for his 2022 performance bonus as a result of being employed for the entire performance period, in an amount depending on actual performance for 2022. He received a lump sum payment of $24,000 during 2023 intended to cover the cost of continuation of health care benefits for 12 months. If Mr. Johnson complies with his restrictive covenants and other agreements with the Company, the stock options issued to Mr. Johnson in 2020 and 2022 will continue to vest in accordance with their original vesting schedule and will be exercisable for two years following the vesting date (for those options that vest in calendar year 2023) and for one year following each vesting date (for those options that vest in calendar years 2024 through 2026). As of October 3, 2022, all of these stock options had exercise prices above the fair market value of Vertiv stock, and the actual value of his retained unvested options will depend on the stock price on and following the future vesting dates. All other unvested equity awards, including the unvested options granted in 2021 and any unvested restricted stock units, were forfeited. See the “Compensation Discussion and Analysis” above for a description of the reasons for entering into this agreement.
Change of Control The Executive Change of Control Plan (“CIC Plan”) provides “double-trigger” severance benefits to senior employees, including the named executive officers, upon specified terminations of employment from Vertiv in connection with a change of control of Vertiv (as defined in the CIC Plan). In the event of a change of control, the executive must also either (i) be involuntarily terminated other than for cause (as defined in the CIC Plan) or (ii) initiate the termination of his or her own employment for good reason (as defined in the CIC Plan). Additionally, either qualifying termination event must occur during the period that starts 90 days immediately prior to the change of control and ends 24 months following such change of control (“Change of Control Period”). If such termination occurs during the Change of Control Period, the executive would be entitled to: | (i) | lump-sum cash payments equal to a multiplier of two (or, in the case of the CEO at the time of a change in control, three) times the sum of (x) then current base salary and (y) annual target bonus; |
| (ii) | a lump-sum cash payment equal to the executive’s annual target bonus during the fiscal year of termination, pro-rated based on the number of days worked by the executive during such fiscal year; |
| (iii) | a lump-sum cash payment equal to the executive’s actual bonus accrued in the fiscal year prior to the year of termination, but not yet paid; |
| (iv) | full vesting on an accelerated basis of any of the executive’s unvested long-term incentive awards; and |
| (v) | COBRA continuation coverage for 18 months. |
With respect to the One-TimeStrategic Performance Awards, in the event of the foregoing qualifying termination, or if the awards are not assumed or replaced by the acquiror, (i) the earned portion of any One-TimeStrategic Performance Award for completed years and (ii) the target amount of any One-TimeStrategic Performance Award for incomplete years, will immediately vest. The CIC Plan does not provide executives with an excise tax gross-up. Instead, Instead, to the extent that the payment and benefits to be provided under the CIC Plan or other Company plan or agreement would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code on excess parachute payments within the meaning of Section 280G of the Internal Revenue Code, the payments will be reduced to the extent necessary so that no portion will be subject to the excise tax if, with such reduction, the net after-tax benefit benefit received by the executive exceeds the net after-tax benefit benefit that would be received by the executive if no such reduction was made. The CIC Plan contains certain confidentiality, non-competition and non-solicitation covenants in favor of the Company. | | | | | | | | | | | | | | | | | | 42 | | | | | | | | | | | | | - 20232024 Proxy Statement| 41 | | | | | | |
Potential Payments Upon Termination of Employment The table below reflects the amount of compensation and benefits payable to each named executive officer in the event of a (i) termination without cause, (ii) termination for good reason, (iii) termination under the CIC Plan, (iv) termination by reason of the executive’s death or disability, or (v) upon retirement. The amounts shown assume that the applicable triggering event occurred on December 31, 20222023 and, therefore, are estimates of the amounts that would be paid to the named executive officers upon the occurrence of such triggering event. Mr. Johnson is not included because his employment ended on December 31, 2022, under the agreement described above. | | Name | | Reason for termination | | Cash
Payment
($) | | Equity
Acceleration
($)(1) | | | Total ($) | | | Reason for termination | | Cash
Payment
($) | | Equity
Acceleration
($)(1) | | | Total ($) | | | Giordano Albertazzi | | Giordano Albertazzi | | | Involuntary Termination Without Cause | | | 2,049,000 | (2) | | | 1,684,692 | | | | 3,733,692 | | | | | | | | Resignation For Good Reason | | | 2,049,000 | (2) | | | | | 2,049,000 | | | | | | | | Change in Control Termination | | | 5,211,000 | (3) | | | 46,880,651 | | | | 52,091,651 | | | | | | | | Death or Disability | | | 2,000,000 | (4) | | | 39,680,651 | | | | 41,680,651 | | | | | | | | | | Retirement | | | | | | | | David Fallon | | David Fallon | | Involuntary Termination Without Cause | | | 1,314,000 | (2) | | | 598,606 | | | | 1,912,606 | | | Involuntary Termination Without Cause | | | 1,354,000 | (2) | | | 2,105,842 | | | | 3,459,842 | | | | | Resignation For Good Reason | | | 1,314,000 | (2) | | | — | | | | 1,314,000 | | | | | | Resignation For Good Reason | | | 1,354,000 | (2) | | | | | 1,354,000 | | | | Change in Control Termination | | | 3,261,000 | (3) | | | 5,850,034 | | | | 9,111,034 | | | | | Death or Disability | | | 483,750 | (4) | | | 1,980,034 | | | | 2,463,784 | | | Change in Control Termination | | | 3,361,000 | (3) | | | 25,300,773 | | | | 28,661,773 | | | | | | Retirement | | | — | | | | — | | | | — | | | | | | Death or Disability | | | 623,438 | (4) | | | 21,430,773 | | | | 22,054,211 | | Giordano Albertazzi | | Involuntary Termination Without Cause | | | 2,049,000 | (2) | | | 478,885 | | | | 2,527,885 | | | | | | | | | | Retirement | | | | | | | | Stephan Liang | | Stephan Liang | | | Involuntary Termination Without Cause | | | 1,230,000 | (2) | | | 1,684,692 | | | | 2,914,692 | | | | | Resignation For Good Reason | | | 2,049,000 | (2) | | | — | | | | 2,049,000 | | | | | | Resignation For Good Reason | | | 1,230,000 | (2) | | | | (1) | | | 1,230,000 | | | | Change in Control Termination | | | 5,211,000 | (3) | | | 9,084,636 | | | | 14,295,636 | | | | | Death or Disability | | | 410,254 | (4) | | | 2,334,636 | | | | 2,744,890 | | | Change in Control Termination | | | 2,979,000 | (3) | | | 16,018,639 | | | | 18,997,639 | | | | | | Retirement | | | — | | | | — | | | | — | | | | | | Death or Disability | | | 1,161,878 | (4)(5) | | | 13,018,639 | | | | 14,180,517 | | Stephen Liang | | Involuntary Termination Without Cause | | | 1,158,000 | (2) | | | 478,885 | | | | 1,636,885 | | | | | | | | | | Retirement | | | 337,500 | | | | | (1) | | | 337,500 | (1) | | Anand Sanghi | | Anand Sanghi | | | Involuntary Termination Without Cause | | | 864,356 | (2) | | | | | 864,356 | | | | | Resignation For Good Reason | | | 1,158,000 | (2) | | | — | | | | 1,158,000 | | | | | | Resignation For Good Reason | | | 864,356 | (2) | | | | | 864,356 | | | | Change in Control Termination | | | 2,808,000 | (3) | | | 4,430,836 | | | | 7,238,836 | | | | | Death or Disability | | | 768,600 | (4)(5) | | | 1,430,836 | | | | 2,199,436 | | | Change in Control Termination | | | 2,057,068 | (3) | | | 6,964,647 | | | | 9,021,715 | | | | | | Retirement | | | 315,000 | (5) | | | — | | | | 315,000 | | | | | | Death or Disability | | | 575,218 | (4) | | | 4,564,647 | | | | 5,139,865 | | Philip O’Doherty | | Involuntary Termination Without Cause | | | 806,496 | (2) | | | — | | | | 806,496 | | | | | | | | | | Retirement | | | | | | | | Anders Karlborg | | Anders Karlborg | | | Involuntary Termination Without Cause | | | 796,888 | (2) | | | | | 796,888 | | | | | Resignation For Good Reason | | | 806,496 | (2) | | | — | | | | 806,496 | | | | | | Resignation For Good Reason | | | 796,888 | (2) | | | | | 796,888 | | | | Change in Control Termination | | | 1,971,392 | (3) | | | 2,400,000 | | | | 4,371,392 | | | | | Death or Disability | | | 577,120 | (4)(5) | | | — | | | | 577,120 | | | Change in Control Termination | | | 1,839,664 | (3) | | | 5,891,799 | | | | 7,731,463 | | | | | | Retirement | | | 448,096 | (5) | | | — | | | | 448,096 | | | | | Death or Disability | | | 523,259 | (4) | | | 4,037,799 | | | | 4,561,058 | | | | | | | | | | Retirement | | | | | | |
| (1) | Our RSU agreements granted to individuals prior to 2024 who were executive officers at the time of grant provide that, upon a termination without cause, any unvested RSUs scheduled to vest during the six-month period following termination shall vest on the applicable scheduled vesting dates. In addition, our RSU and option agreements provide that the awards vest in full upon termination of employment due to death or disability and remain eligible for continued vesting upon retirement at age 65. As of December 31, 2022, none of our named executive officers2023, only Mr. Liang met the definition of retirement under these agreements, and soagreements. Because upon retirement the awards would not be forfeited but would remain eligible for continued vesting on the originally scheduled vesting dates (subject to continued compliance with restrictive covenants), no amounts are reportedvalue is reflected in this table because the value could not be realized until the original vesting date; however, see the amount set forth under Death/Disability for vesting upon a “Retirement” event.the value of these awards as of December 31, 2023 that would have remained outstanding following his retirement. Amounts payable under retirement exclude accrued benefits under the Company’s retirement plans. Under the CIC Plan, all RSUs and options fully accelerate upon a qualifying termination during a Change in Control Period. The treatment of the One-TimeStrategic Performance Awards in the event of a change in control is described above. The value in this column was calculated by multiplying the number of unvested awards as of December 31, 20222023 by $13.66,$48.03, which was the closing price of our Class A common stock on December 31, 2022,29, 2023, the last trading day of the fiscal year, less, in the case of stock options, the applicable exercise price. For a Change in Control Termination, the value of the One-TimeStrategic Performance Awards reflected in the table is the target value pursuant to their terms. |
| (2) | Pursuant to the Executive Employment Policy, (or, in the case of Mr. Doherty, his employment agreement), consists of (i) a cash payment equal to one times the sum of the executive’s annual rate of base salary as in effect on December 31, 20222023 and target annual bonus for 20222023 and (ii) if applicable, the estimated cost of health coverage for 12 months. |
| (3) | Pursuant to the CIC Plan, consists of (i) lump-sum cash payments equal to a multiplier of two (or, in the case of the CEO, three) times the sum of (x) base salary in effect on December 31, 20222023 plus (y) target annual bonus for 2022;2023; (ii) a lump-sum cash payment equal to the executive’s annual target bonus during the fiscal year of termination, pro-rated based on the number of days worked by the executive during such fiscal year (so 100% of annual target bonus for a termination on December 31, 2022)2023); and (iii) the estimated cost of health coverage for 18 months. Because Mr. Albertazzi was not yet our CEO on December 31, 2022, the amounts in this table reflect the two times multiple for non-CEO executive officers. |
| | | | | | | | | | | | 42 | | | | | - 2024 Proxy Statement | | | | | | |
| (4) | Pursuant to the Executive Employment Policy, payment on death or disability would be a pro-rated portion of the executive’s annual bonus for the fiscal year in which the termination date occurs (so 100% for a termination on December 31, 2022)2023). Each NEO’s actual 20222023 bonus is reflected in this table. |
| (5) | Pursuant to Mr. Liang’s April 2022 letter agreement, subject to the terms of the Executive Employment Policy, he is entitled to six months’ notice or pay in lieu of notice unless terminated by the Company for cause, and so this table assumes six months of salary is paid upon certain termination events that would not result in a payment under the Executive Employment Policy or CIC Plan. Pursuant to Mr. Doherty’s November 2021 employment agreement, for a termination during the initial two-year term, 12 months’ notice should be given; thereafter, six months’ notice should be given. The Company may pay Mr. Doherty’s salary during the notice period in lieu of notice. This table assumes 12 months of salary is paid upon certain termination events that would not result in a payment under the involuntary termination provisions of the employment agreement (which are similar to the Executive Employment Agreement). |
| | | | | | | | | | | | | | | | | | | | | | | | | - 2023 Proxy Statement | 43
|
CEO Pay Ratio As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring companies to disclose the ratio of the median employee’s total annual compensation relative to total annual compensation of the principal executive officer. As permitted under SEC rules, the Company determined that it was appropriate to use the same median employee that it used in its disclosure for fiscal year 2021 based on its reasonable belief that the increase in the employee population since such date would not result in a significant change to its pay ratio disclosure. However, because the median employee for 2021 was no longer with the Company, another employee with substantially similar compensation was identified as the median employee for 2022.2023. The median employee was identified by examining the Company’s compensation records to calculate each employee’s cash compensation opportunities during the applicable year. After identifying the median employee, we calculated an estimate of the total annual compensation for 20222023 for such employee, using the same methodology used for our NEOs as set forth in the Summary Compensation Table above. As a global organization, most of our employees are located outside of the United States, and the median employee is located in China. We used the following additional methodology and material assumptions: | • | | In the determining the median employee, we excluded the following number of employees in the following countries, which together constituted less than 5% of all active employees at the time of the determination under the SEC’sde minimis exception: Argentina (23), Azerbaijan (4), Bangladesh (5), Chile (90), Colombia (102), Costa Rica (13), Hungary (14), Malaysia (132), Poland (62), Portugal (15), Russian Federation (12), South Africa (42), Taiwan (108), Thailand (93) and Viet Nam (29). The determination of the median employee was based on a total of 22,300 employees (excluding the CEO), with 3,730 U.S. employees and 18,570 non-U.S. employees. employees. |
| • | | Pay was annualized for employees who worked a partial year. |
| • | | Foreign currencies were converted into U.S. dollars. |
Total compensation for 20222023 for Rob JohnsonMr. Albertazzi was $8,033,521.$6,183,174. Our median employee’s estimated total compensation for 20222023 was $30,746.$25,058. Therefore, the ratio of our 20222023 principal executive officer’s pay to our median employee’s pay for 20222023 is 261:247:1 | | | | | | | | | | | | | | | | | | 44 | | | | | | | | | | | | | - 20232024 Proxy Statement| 43 | | | | | | |
As required by Item 402(v) of RegulationRegulation S-K,
we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last threefour completed calendar years. In determining the “compensation actually paid” (“ ”) to our NEOs, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in previous years, as the SEC’s valuation methods for this section differ from those required in the Summary Compensation Table. | | | Summary Compensation Total for PEO($) (1) | | Compensation Actually Paid to PEO($) (2) | | Average Summary Compensation Table Total for Non-PEO NEOs($) (3) | | Average Compensation Actually Paid to Non-PEO NEOs($) (4) | | | Value of Initial Fixed td00
Investment Based On: | | | | | Adjusted Operating Profit($) (6) | | | Summary Compensation Total for PEO($) (1) | | Compensation Actually Paid to PEO($) (2) | | Average Summary Compensation Table Total for Non-PEO NEOs($) (3) | | Average Compensation Actually Paid to Non-PEO NEOs($) (4) | | | Value of Initial Fixed td00
Investment Based On: | | | | | Adjusted Operating Profit($) (6) | | | | Total Shareholder Return($) (5) | | Peer Group Total Shareholder Return($) (5) | | | Total Shareholder Return($) (5) | | Peer Group Total Shareholder Return($) (5) | | | | | | 2023 | | | 2023 | | | 2023 | | | 2023 | | | | 6,183,174 | | | | 49,586,394 | | | | 2,973,889 | | | | 16,527,970 | | | | 436.4 | | | | 156.5 | | | | 460.2M | | | | 1,053.5M | | | | 2022 | | | 2022 | | | 2022 | | | 2022 | | | 8,033,521 | | | | (6,564,566 | ) | | | 6,546,724 | | | | 4,820,353 | | | | 124.1 | | | | 123.7 | | | | 76.6M | | | | 439.2M | | | | 8,033,521 | | | | (6,564,566 | ) | | | 6,546,724 | | | | 4,820,353 | | | | 124.1 | | | | 123.7 | | | | 76.6M | | | | 439.2M | | | | | | 2021 | | | 5,180,837 | | | | 13,610,394 | | | | 1,798,692 | | | | 4,039,817 | | | | 226.6 | | | | 153.0 | | | | 119.6M | | | | 471M | | | 2021 | | | 2021 | | | 2021 | | | | 5,180,837 | | | | 13,610,394 | | | | 1,798,692 | | | | 4,039,817 | | | | 226.6 | | | | 153.0 | | | | 119.6M | | | | 471M | | | | | | 2020 | | | 19,627,189 | | | | 23,693,454 | | | | 4,876,038 | | | | 6,048,310 | | | | 169.4 | | | | 121.0 | | | | (327.3)M | | | | 342.2M | | | 2020 | | | 2020 | | | 2020 | | | | 19,627,189 | | | | 23,693,454 | | | | 4,876,038 | | | | 6,048,310 | | | | 169.4 | | | | 121.0 | | | | (327.3)M | | | | 342.2M | |
| (1) | The dollar amounts reported in this column are the amounts of total compensation reported for our Principal Executive Officer (“ ”) for each corresponding year in the “Total” column of the Summary Compensation Table, which for 2023 was Mr. Albertazzi and for each of 2022, 2021 and 2020, was Mr.Rob Johnson. |
| (2) | The dollar amounts reported in this column represent the amount of “compensation actually paid” to our PEO for the applicable fiscal year, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to such executives during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the adjustments set forth below were made to the total compensation for each year to determine the compensation actually paid. Adjusted fair values have been determined using, as applicable, updated stock price and assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Total from Summary Compensation Table | | | 19,627,189 | | | | 5,180,837 | | | | 8,033,521 | | | Total from Summary Compensation Table | | | Total from Summary Compensation Table | | | Total from Summary Compensation Table | | | | 19,627,189 | | | | 5,180,837 | | | | 8,033,521 | | | | 6,183,174 | | | | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | (14,007,999 | ) | | | (3,999,997 | ) | | | (5,834,824 | ) | | | (14,007,999 | ) | | | (3,999,997 | ) | | | (5,834,824 | ) | | | 3,300,000 | | | | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | | 18,074,264 | | | | 6,381,812 | | | | 7,113,759 | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | | | | 18,074,264 | | | | 6,381,812 | | | | 7,113,759 | | | | 16,686,183 | | | | | | +/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | +/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | +/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | +/- Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | — | | | | 5,266,261 | | | | (102,068 | ) | | |
| | | | 5,266,261 | | | | (102,068 | ) | | | 20,764,903 | | | | | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | | — | | | | — | | | | (12,272,807 | ) | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | | |
| | | |
| | | | (12,272,807 | ) | | |
| | | | | | +/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | +/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | +/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | +/- Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | — | | | | 781,482 | | | | (3,502,147 | ) | | |
| | | | 781,482 | | | | (3,502,147 | ) | | | 2,652,134 | | | | | | Compensation Actually Paid | | | 23,693,454 | | | | 13,610,394 | | | | (6,564,566 | ) | | Compensation Actually Paid | | | Compensation Actually Paid | | | Compensation Actually Paid | | | | 23,693,454 | | | | 13,610,394 | | | | (6,564,566 | ) | | | 49,586,394 | |
| (3) | The dollar amounts reported in this column represent the average of the amounts reported for the Company’s non-PEO named executive officers (“ ”) as a group in the “Total” column of the Summary Compensation Table in each applicable year. For purposes of calculating the average amounts in each applicable year, the names of each of the Non-PEO NEOs NEOs include are as follows: Giordano Albertazzi (2022), David Fallon (2022,(2023, 2022, 2021, 2020), Stephen Liang (2022,(2023, 2022, 2021, 2020) , Anand Sanghi (2023), Anders Karlborg (2023), Phil Doherty (2022), Stephanie Gill (2021), Jason Forcier (2021, 2020) and John Hewitt (2020). |
| (4) | The dollar amounts reported in this column represent the average amount of “compensation actually paid” to the Non-PEO NEOs as a group in the applicable year as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the Non-PEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, ,
the adjustments set forth below were made to the average total compensation for the Non-PEO NEOs as a group for each year to determine the compensation actually paid, using the same methodology described in Note 2 above. |
| | | | | | | | | | | | | | | | | | | 44 | | | | | | | | | |
| | - 20232024 Proxy Statement 45 | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Total from Summary Compensation Table | | | 4,876,038 | | | | 1,798,692 | | | | 6,546,724 | | | Total from Summary Compensation Table | | | Total from Summary Compensation Table | | | Total from Summary Compensation Table | | | | 4,876,038 | | | | 1,798,692 | | | | 6,546,724 | | | | 2,973,889 | | | | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | - Amount reported in the Summary Compensation Table for Stock Awards and Option Awards | | | (3,146,798 | ) | | | (1,175,995 | ) | | | (5,483,200 | ) | | | (3,146,798 | ) | | | (1,175,995 | ) | | | (5,483,200 | ) | | | 1,610,995 | | | | | | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year (Including Dividend Equivalents) | | | 4,319,070 | | | | 1,956,699 | | | | 6,599,736 | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year (Including Dividend Equivalents) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year (Including Dividend Equivalents) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year (Including Dividend Equivalents) | | | | 4,319,070 | | | | 1,956,699 | | | | 6,599,736 | | | | 5,119,386 | | | | | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years (Including Modifications) | | | — | | | | 1,256,485 | | | | (2,250,235 | ) | | |
| | | | 1,256,485 | | | | (2,250,235 | ) | | | 6,649,679 | | | | | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | | — | | | | — | | | | — | | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | - Fair Value at Prior Fiscal Year-End of Stock and Option Awards Forfeited during the Covered Year | | | |
| | | |
| | | |
| | | |
| | | | | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | — | | | | 203,936 | | | | (592,672 | ) | | |
| | | | 203,936 | | | | (592,672 | ) | | | 174,021 | | | | | | Compensation Actually Paid | | | 6,048,310 | | | | 4,039,817 | | | | 4,820,353 | | | Compensation Actually Paid | | | Compensation Actually Paid | | | Compensation Actually Paid | | | | 6,048,310 | | | | 4,039,817 | | | | 4,820,353 | | | | 16,527,970 | |
| (5) | Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. Peer group TSR isshown in the table was based on the Russell 1000 Index.index we use for purposes of Item 201(e)(1)(ii) of RegulationS-K. If we used the Compensation Peer Group (with the list of companies provided in the “Compensation Discussion and Analysis |
| (6) | Dollar amounts reported represent (i) the amount of net income reflected in the Company’s audited financial statements for the applicable year and (ii) the amount of adjusted operating profit ( ”), which is a non-GAAP measure measure we useused under the Vertiv Incentive Plan and ourone-time
performance awards during 2022.VIP for 2023. For an explanation and reconciliation of AOP, please see Annex A. |
Listed below are the financial and non-financial performance performance measures which in our assessment represent the most important financial performance measures we use to link compensation actually paid to our named executive officers, for 2022,2023, to Company performance. | | | | | | | | | | | Adjusted Operating Profit (AOP) | | Metric in VIP and One-Time
Strategic Performance Awards | | | | Adjusted Free Cash Flow | | Metric in VIP | | | | Stock Price | | Used to determine exercise price of stock options and ultimate realized value of all equity awards |
Relationship Between Pay and Performance. “Compensation actually paid” ( ”), as required under SEC rules, reflects adjusted values to unvested and vested equity awards during the years shown in the table based on stock prices at year-end, various various accounting valuation assumptions and other adjustments, but does not reflect actual amounts realized on those awards. CAP generally fluctuates primarily based on stock price, even for equity awards that will not vest until a future year. As a result, CAP may have a relationship to TSR and/orand our performance against peer group TSR. Although AOP is a metric in our annual VIP cash bonuses, it may have less of a relationship to CAP because of the impact of stock price on equity award valuations. Net income is not a metric currently used in our compensation program. For a discussion of how our Compensation Committee assessed Company performance and our named executive officers’ compensation, see | | | | | | | | | | | | | | | | | | | | | |
| | | - 2024 Proxy Statement 45 |
“ Compensation Discussion and Analysis ” elsewhere in this proxy statement. See the graphs below for further information on the relationship between CAP and performance. | | | | | | | | | | | | | | | | | 46 | |
| | - 20232024 Proxy Statement | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | - 2024 Proxy Statement 47 |
Equity Compensation Plan Information The following table provides information as of December 31, 20222023 with respect to our shares of Class A common stock issuable under our equity compensation plans. | | | | | | | | | | | | | | Plan Category(1) | | Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights(2) | | | Weighted-average
exercise price of
outstanding options,
warrants and rights (3) | | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))(4) | | | | | | Equity compensation plans approved by security holders Vertiv Holdings Co 2020 Stock Incentive Plan | | | 13,651,593 | | | | 13.40 | | | | 38,126,628 | | | | | | Equity compensation plans not approved by security holders | | | | | | | | | | | | | | | | | Total | | | 13,651,593 | | | | 13.40 | | | | 38,126,628 | |
| | | | | | | | | | | | | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (2) | | | Weighted-average exercise price of outstanding options, warrants and rights (3) | | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in | | | | | | | Equity compensation plans approved by security holders (Vertiv Holdings Co 2020 Stock Incentive Plan) | | | 13,882,253 | | | $ | 14.30 | | | | 45,683,918 | | | | | | | Equity compensation plans not approved by security holders | | | | | | | | | | | | | | | | | | Total | | | 13,882,253 | | | $ | 14.30 | | | | 45,683,918 | |
| (1) | The Vertiv Group Corporation 401(k) Plan, a broad-based plan qualified under Internal Revenue Code Section 401(a) which includes our common stock as one of a number of investment options available to participants, is excluded from the table. |
| (2) | The numbers in this column reflect shares of our common stock to be issued upon exercise of outstanding stock options and warrants and the vesting of outstanding awards of RSUs and the release of DSUs. |
| (3) | The calculation of the weighted average exercise price does not include 3,038,7832,726,895 shares subject to RSUs that do not have an exercise price. |
| (4) | Commencing with the first business day of each calendar year beginning in 2021 through 2030, the number of shares in the reserve under the 2020 Stock Incentive Plan may be increased by a number equal to the least of (x) 10.5 million shares, (y) 3% of the number of shares outstanding as of the last day of the immediately preceding calendar year or (z) a lesser number of Shares determined by our board of directors or compensation committee. This number is inclusive of 10.5 million shares authorized in 20222023 pursuant to the plan. |
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| | | | | Proposal 2: | | Advisory Vote to Approve Compensation of Named Executive Officers |
In accordance with the requirements of Section 14A of the Exchange Act and Exchange Act Rule 14a-21(a), we are including in this proxy statement a separate resolution to approve, in a non-binding, stockholder advisory vote, the compensation paid to our named executive officers as disclosed in “Executive Compensation” above. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of compensation or any specific named executive officer, but rather the overall compensation of all of our named executive officers and the philosophy, policies and practices described in this proxy statement. The Board believes that our executive compensation programs align the interests of stockholders and executive officers by emphasizing variable, at-risk compensation through a combination of long-term equity incentives and annual cash incentives. We encourage you to read the disclosure under “Compensation Discussion and Analysis” to learn more about our executive compensation programs and policies. The Board believes that our 20222023 executive compensation program shows alignment between the interests of our executives and stockholders. While the results of the say-on-pay vote are non-binding and advisory in nature, our Board of Directors and Compensation Committee intend to consider the results of this vote in making future compensation decisions. We expect that our next advisory say-on-pay vote will take place at our annual meeting of stockholders in 2024.2025. The language of the resolution is as follows: “RESOLVED, that the compensation paid to the Company’s named executive officers for the fiscal year ended December 31, 2022,2023, as discussed pursuant to the compensation disclosure rules of the SEC, including the compensation discussion and analysis, the summary compensation table and the related compensation tables and narrative in this proxy statement, is hereby APPROVED, on an advisory basis.” In considering their vote, stockholders are encouraged to read the “Compensation Discussion and Analysis,” the accompanying compensation tables and the related narrative disclosure included in this proxy statement. | Our Board of Directors recommends that you vote “FOR” the approval, on an advisory basis, of the compensation of our named executive officers. |
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| | | | | Proposal 3: | | Ratification of Appointment of Independent Registered Public Accounting Firm |
Our Audit Committee has appointed Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.2024. Ernst & Young LLP has served as the Company’s independent registered public accounting firm since the consummation of the Business Combination in 2020 and previously served as principal accountants to the Vertiv operating business from 2016 until their dismissal in 2020 in connection with the Business Combination. Stockholder ratification of the appointment of Ernst & Young LLP is not required by law. The ratification of the appointment of Ernst & Young LLP requires the affirmative vote of a majority of the votes cast by stockholders present in person or represented by proxy and entitled to vote thereon at the Annual Meeting. If the stockholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will reconsider the appointment. Even if the stockholders ratify the appointment of Ernst & Young LLP, the Audit Committee retains the discretion to appoint a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of Vertiv and its stockholders. Ernst & Young LLP is knowledgeable about our operations and accounting practices and well qualified to act as our independent registered public accounting firm, and the Audit Committee has appointed it as such for fiscal 2023.2024. Representatives of Ernst & Young LLP are expected to attend the Annual Meeting, will have an opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions. | Our Board of Directors recommends that you vote “FOR” the ratification of Ernst & Young LLP as our independent auditor for the fiscal year ending December 31, 2023.2024. |
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INFORMATION REGARDING INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP has served as the Company’s independent registered public accounting firm since the consummation of the Business Combination in 2020 and as principal accountants to the Vertiv operating business prior to the Business Combination since 2016. The Audit Committee has the discretion to appoint a different independent registered public accounting firm at any time during the year if the Audit Committee believes that such a change would be in the best interest of the Company and our stockholders. Pre-Approval Policy The policy of our Audit Committee is to review in advance, and pre-approve all audit or non-audit services to be provided by the Company’s independent or other registered public accounting firm and to approve all related fees and other terms of engagement. All of the audit-related, tax and all other services provided by Ernst & Young LLP to us since its appointment, were approved by our Audit Committee, and none of such services were approved pursuant to the exception provided by Rule 2-01(c)(7)(i)(C) under Regulation S-X. All non-audit services provided subsequent to our initial public offering in 2018 were reviewed with the Audit Committee, which in each case concluded that the provision of such services by the relevant independent registered public accounting firm was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. Fees The following table presents aggregate fees billed to us for services rendered by our principal accountants, Ernst & Young LLP, over the prior two fiscal years. | | | | For the year ended
December 31, 2022 | | | For the year ended
December 31, 2021 | | | For the year ended
December 31, 2023 | | | For the year ended
December 31, 2022 | | | Audit Fees | | $ | 8,190,914 | | | $ | 9,516,794 | | Audit Fees | | Audit Fees | | Audit Fees | | | $ | 7,889,928 | | | $ | 8,190,914 | | | Audit-Related Fees | | Audit-Related Fees | | Audit-Related Fees | | Audit-Related Fees | | $ | 75,540 | | | $ | 296,000 | | | $ | 60,000 | | | $ | 75,540 | | | Tax Fees | | $ | 3,220,854 | | | $ | 4,290,425 | | Tax Fees | | Tax Fees | | Tax Fees | | | $ | 3,395,732 | | | $ | 3,220,854 | | | All other Fees | | All other Fees | | All other Fees | | All other Fees | | $ | 3,600 | | | $ | 3,600 | | | $ | 21,834 | | | $ | 3,600 | | | Total | | $ | 11,490,908 | | | $ | 14,106,819 | | Total | | Total | | Total | | | $ | 11,367,494 | | | $ | 11,490,908 | |
Audit Fees This category includes the aggregate fees during 20222023 and 20212022 billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings. Audit-Related Fees This category includes the aggregate fees during 20222023 and 20212022 billed for assurance and related services that are reasonably relatedrelating to performance of the audit or review of our year-end financial statements and are not reported under “Audit Fees.” These services include fees for accounting consultations, other attestation services and registration statement filings.employee benefit plans audits. | | | | | | | | | | | | | | | | | | 50 | | | | | | | | | | | | | - 20232024 Proxy Statement| 51 | | | | | | |
Tax Fees This category includes the aggregate fees during 20222023 and 20212022 billed for professional services relating to tax compliance, tax planning and tax advice. All Other Fees All other fees consist of fees billed for all other permitted services. | | | | | | | | | | | | | | | | | | | | | | | | | 52 | | | | | | - 20232024 Proxy Statement| 51 | | | | | | |
AUDIT COMMITTEE REPORT The following is the report of the Audit Committee of Vertiv Holdings Co (“Company”) with respect to our audited financial statements for the year ended December 31, 2022.2023. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Exchange Act, except to the extent that we specifically incorporate such information by reference in such filing. The Audit Committee hereby reports as follows: | 1. | Management has the primary responsibility for the financial statements and the reporting process, including the system of internal accounting controls. The Audit Committee, in its oversight role, has reviewed and discussed the audited financial statements with the Company’s management. |
| 2. | The Audit Committee has discussed with the Company’s independent registered public accounting firm the overall scope of, and plans for, its audit. The Audit Committee has met with the independent registered public accounting firm to discuss the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. |
| 3. | The Audit Committee has received the written disclosures and the letter from Ernst & Young LLP required by applicable requirements of the PCAOB regarding Ernst & Young LLP’s communications with the Audit Committee concerning independence, and has discussed with Ernst & Young LLP its independence. The Audit Committee has concluded that Ernst & Young LLP’s provision of audit and non-audit services to the Company and its affiliates is compatible with Ernst & Young LLP’s independence. |
| 4. | The Audit Committee has an established charter outlining the practices it follows. The charter is available on the Company’s investor page on its website at: https://investors.vertiv.com/corporate-governance/documents/default.aspx . |
| 5. | Based on the review and discussions referred to in paragraphs (1) through (4) above, the Audit Committee recommended to the Company’s Board of Directors, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022,2023, for filing with the Securities and Exchange Commission.SEC. |
AUDIT COMMITTEE Steven S. Reinemund Robin L. Washington Edward L. Monser Jakki L. Haussler | | | | | | | | | | | | | | | | | | 52 | | | | | | | | | | | | | - 20232024 Proxy Statement| 53 | | | | | | |
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The tables below set forth information with respect to the beneficial ownership of our Class A common stock, as of April 17, 2023,15, 2024, by: | • | | each of our directors and named executive officers; |
| • | | each person who is known to be the beneficial owner of more than 5% of the outstanding shares of our Class A common stock; and |
| • | | all of our directors and executive officers as a group. |
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days and time-based RSUs that will vest within 60 days. Except as described in the footnotes below and subject to applicable community property laws and similar laws, we believe that each person listed below has sole voting and investment power with respect to such shares. Except as set forth in the footnotes below, the percentages included in the following table are based on 379,711,469374,039,197 shares of Class A common stock outstanding as of April 17, 2023.15, 2024. Amounts shown are rounded down to the nearest whole share. Unless otherwise indicated, the address for each beneficial owner listed below is: c/o Vertiv Holdings Co, 505 N. Cleveland Avenue, Westerville, Ohio 43082. | Name and Address of Beneficial Owners(1) | | Number of Shares | | | Percentage Ownership (%) | | | Number of Shares | | | Percentage Ownership (%) | | | 5% Holders (Other than Directors and Executive Officers) | | | | | | | 5% Holders (Other than Directors and Executive Officers) | | 5% Holders (Other than Directors and Executive Officers) | | 5% Holders (Other than Directors and Executive Officers) | | | | | | | | | | | VPE Holdings, LLC(2) | | | 37,955,215 | | | | 10.00% | | FMR LLC(2) | | FMR LLC(2) | | FMR LLC(2) | | FMR LLC(2) | | | Barrow Hanley Global Investors(3) | | | 32,920,706 | | | | 8.67% | | The Vanguard Group(3) | | The Vanguard Group(3) | | The Vanguard Group(3) | | The Vanguard Group(3) | | | Starboard Value LP(4) | | | 27,839,000 | | | | 7.33% | | Barrow Hanley Global Investors(4) | | Barrow Hanley Global Investors(4) | | Barrow Hanley Global Investors(4) | | Barrow Hanley Global Investors(4) | | | The Vanguard Group(5) | | | 27,212,828 | | | | 7.17% | | BlackRock, Inc.(5) | | BlackRock, Inc.(5) | | BlackRock, Inc.(5) | | BlackRock, Inc.(5) | | | Directors and Executive Officers | | | | | | | Directors and Named Executive Officers | | Directors and Named Executive Officers | | Directors and Named Executive Officers | | Directors and Named Executive Officers | | | | | | | | | | | David M. Cote(6) | | David M. Cote(6) | | David M. Cote(6) | | David M. Cote(6) | | | 16,075,338 | | | | 4.23% | | | Giordano Albertazzi(7) | | | 315,212 | | | | * | | Giordano Albertazzi(7) | | Giordano Albertazzi(7) | | Giordano Albertazzi(7) | | | Joseph J. DeAngelo(8) | | Joseph J. DeAngelo(8) | | Joseph J. DeAngelo(8) | | Joseph J. DeAngelo(8) | | | 75,625 | | | | * | | | Joseph van Dokkum(9) | | | 82,970 | | | | * | | Joseph van Dokkum(9) | | Joseph van Dokkum(9) | | Joseph van Dokkum(9) | | | Roger Fradin(10) | | Roger Fradin(10) | | Roger Fradin(10) | | Roger Fradin(10) | | | 426,303 | | | | * | | | Jakki L. Haussler(11) | | | 5,636 | | | | * | | Jakki L. Haussler(11) | | Jakki L. Haussler(11) | | Jakki L. Haussler(11) | | | Jacob Kotzubei(12) | | Jacob Kotzubei(12) | | Jacob Kotzubei(12) | | Jacob Kotzubei(12) | | | 57,970 | | | | * | | | Matthew Louie(13) | | | 57,970 | | | | * | | Matthew Louie(13) | | Matthew Louie(13) | | Matthew Louie(13) | | | Edward L. Monser(14) | | Edward L. Monser(14) | | Edward L. Monser(14) | | Edward L. Monser(14) | | | 102,888 | | | | * | | | Steven S. Reinemund(15) | | | 426,303 | | | | * | | Steven S. Reinemund(15) | | Steven S. Reinemund(15) | | Steven S. Reinemund(15) | | | Robin Washington(16) | | | 67,970 | | | | * | | Robin Washington(16) | | Robin Washington(16) | | Robin Washington(16) | | | Rob Johnson(17) | | | 763,599 | | | | * | | David Fallon(17) | | David Fallon(17) | | David Fallon(17) | | David Fallon(17) | | | David Fallon(18) | | | 481,736 | | | | * | | Anders Karlborg(18) | | Anders Karlborg(18) | | Anders Karlborg(18) | | Anders Karlborg(18) | | | | 87,194 | | | | * | | | Stephen Liang(19) | | | 325,127 | | | | * | | Stephen Liang(19) | | Stephen Liang(19) | | Stephen Liang(19) | | | Phil O’Doherty(20) | | | 18,486,271 | | | | 4.87% | | Anand Sanghi(20) | | Anand Sanghi(20) | | Anand Sanghi(20) | | Anand Sanghi(20) | | | | 183,396 | | | | * | | | All Directors and Executive Officers as a group (22 Individuals)(21) | | | 21,331,382 | | | | 5.62% | | All Directors and Executive Officers as a group (23 Individuals)(21) | | All Directors and Executive Officers as a group (23 Individuals)(21) | | All Directors and Executive Officers as a group (23 Individuals)(21) | | All Directors and Executive Officers as a group (23 Individuals)(21) | |
| (1) | Unless otherwise noted, the business address of each of the following entities or individuals is 505 N. Cleveland Avenue, Westerville, Ohio 43082. |
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| (2) | The information is based on a Schedule 13D/13G/A filed by FMR LLC and Abigail P. Johnson with the SEC on November 8, 2021. Represents 37,955,215February 9, 2024. FMR LLC has sole voting power in respect of 47,840,883 shares of Class A common stock owned directly by VPE Holdings, LLC, a Delaware limited liability company (“VPE”). Excludes options to purchaseand sole dispositive power in respect of 49,082,199 shares of Class A Common Stock awarded by the Company to Messrs. Kotzubeicommon stock, and Louie, membersAbigail P. Johnson has sole dispositive power in respect of the Board designated by VPE pursuant to a Stockholders Agreement who are employees49,082,199 shares of affiliates of VPE and hold such securities for the benefit of VPE, of which 57,970 options are exercisable within 60 days of April 13, 2022. Vertiv JV Holdings, LLC (“JV”) owns a majority of the outstanding equity interests of VPE. PE Vertiv Holdings, LLC (“PE”) owns a majority of the outstanding interests of JV. PE is owned by six private equity investment funds (“Funds”), none of which individually has the power to direct the voting or disposition of shares beneficially owned. Platinum Equity Investment Holdings III, LLC (“Holdings III”) is the managing member of one of the Funds and the managing member of the general partner of four of the Funds. Through such positions, Holdings III has the indirect power to direct the voting of a majority of the outstanding equity interests of PE Vertiv. Platinum Equity Investment Holdings Manager III, LLC (“Manager III”) is the managing member of Holdings III. Platinum Equity InvestCo, L.P. (“InvestCo”) owns all of the economic interests in Holdings III. Platinum Equity Investment Holdings IC (Cayman), LLC (“Cayman Holdings”) is the general partner of InvestCo. Platinum InvestCo (Cayman), LLC (“Cayman InvestCo”) holds a controlling interest in InvestCo. Platinum Equity Investment Holdings, LLC (“Holdings”) is the sole member of Cayman Holdings. Platinum Equity, LLC (“Platinum”) is sole member of Manager III, and indirectly controls the other funds that own equity interests of PE. Mr. Tom Gores is the beneficial owner of Platinum. Accordingly, as a result of their indirect ownership and control of each of VPE, JV and PE, each of Holdings III, InvestCo, Cayman Holdings, Cayman InvestCo, Holdings, Manager III, Platinum and Mr. Tom Gores may be deemed to beneficially own the shares owned directly by VPE. VPE, JV, PE, Holdings III, Cayman Holdings, Holdings, Manager III and Platinum are each organized under the laws of the State of Delaware. InvestCo and Cayman InvestCo are each organized under the laws of the Cayman Islands.Class A common stock. The business address of VPE, JV, PE, Holdings III, InvestCo, Cayman Holdings, Cayman InvestCo, Holdings, Manager III, PlatinumFMR LLC and Mr. GoresMs. Johnson is 360 North Crescent Drive, South Building, Beverly Hills, CA 90210.245 Summer Street, Boston, Massachusetts 02210. |
| (3) | The information is based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 13, 2024. The Vanguard Group has shared voting power in respect of 192,897 shares of Class A common stock, sole dispositive power in respect of 31,378,636 shares of Class A common stock and shared dispositive power in respect of 476,837 shares of Class A common stock. The business address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
| (4) | The information is based on a Schedule 13G filed by Barrow Hanley Global Investors with the SEC on February 15, 2023.13, 2024. Barrow Hanley Global Investors has sole voting power in respect of 17,995,305 shares of Class A common stock, shared voting power in respect of 8,373,1364,876,474 shares of Class A common stock and sole dispositive power in respect of 32,920,70622,871,779 shares of Class A common stock. The business address of Barrow Hanley Global Investors is 2200 Ross Avenue, 31st Floor, Dallas, TX 75201-2761. |
(4) | The information is based on Schedule 13D filed with the SEC on October 20, 2022 by Starboard Value LP. Based on such filing, Starboard Value and Opportunity Master Fund Ltd (“Starboard V&O Fund”) has sole voting and dispositive power with respect to 14,214,053 of the reported shares, which includes 5,164,268 shares underlying certain forward purchase contracts. Starboard Value and Opportunity S LLC (“Starboard S LLC”) has sole voting and dispositive power with respect to 1,610,429 of the reported shares. Starboard Value and Opportunity C LP (“Starboard C LP”) has sole voting and dispositive power with respect to 1,214,840 of the reported shares. Starboard P Fund LP (“Starboard P LP”) has sole voting and dispositive power with respect to 4,643,679 of the reported shares, consisting of 4,643,679 shares underlying certain forward purchase contracts. Starboard Value and Opportunity Master Fund L LP (“Starboard L Master”) has sole voting and dispositive power with respect to 677,959 of the reported shares. Starboard X Master Fund Ltd (“Starboard X Master”) has sole voting and dispositive power with respect to 3,103,106 of the reported shares. Starboard Value P GP LLC (“Starboard P GP”) is the general partner of Starboard P LP, and may be deemed the beneficial owner of the shares owned by Starboard P LP. Starboard Value R LP (“Starboard R LP”) is the general partner of Starboard C LP and the managing member of Starboard P GP, and may be deemed the beneficial owner of the shares owned by Starboard C LP and Starboard P LP. Starboard Value L LP (“Starboard L GP”) is the general partner of Starboard L Master, and may be deemed to beneficially own the shares owned by Starboard L Master. Starboard Value R GP LLC (“Starboard R GP”) is the general partner of Starboard R LP and Starboard L GP, and may be deemed to beneficially own the shares owned by Starboard C LP, Starboard P LP and Starboard L Master. Starboard Value LP is the investment manager of Starboard V&O Fund, Starboard C LP, Starboard P LP, Starboard L Master, Starboard X Master and of a certain managed account (the “Starboard Value LP Account”) and the manager of Starboard S LLC. As of the close of business on October 19, 2022, 2,374,934 shares were held in the Starboard Value LP Account. Starboard Value GP LLC (“Starboard Value GP”) is the general partner of Starboard Value LP. Starboard Principal Co LP (“Principal Co”) is a member of Starboard Value GP. Starboard Principal Co GP LLC (“Principal GP”) is the general partner of Principal Co. Jeffrey C. Smith and Peter A. Feld, are members of Principal GP and members of the Management Committees of Starboard Value GP and Principal GP. In these capacities, each of Starboard Value LP, Starboard Value GP, Principal Co, Principal GP and Messrs. Smith and Feld may be deemed the beneficial owners of (i) 14,214,053 shares owned by Starboard V&O Fund, (ii) 1,610,429 shares owned by Starboard S LLC, (iii) 1,214,840 shares owned by Starboard C LP, (iv) 4,643,679 shares owned by Starboard P LP, (v) 677,959 shares owned by Starboard L Master, (vi) 3,103,106 shares owned by Starboard X Master, and (vii) 2,374,934 Shares held in the Starboard Value LP Account. The address of the principal office of Starboard Value LP and Messrs. Smith and Feld is 777 Third Avenue, 18th Floor, New York, New York 10017.
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| (5) | The information is based on a Schedule 13G/A13G filed by The Vanguard GroupBlackRock, Inc. with the SEC on February 9, 2023. The Vanguard GroupJanuary 29, 2024. BlackRock Inc. has sharedsole voting power in respect of 117,530 shares of Class A common stock, sole dispositive power in respect of 26,788,18720,829,262 shares of Class A common stock and sharedsole dispositive power in respect of 424,64122,856,839 shares of Class A common stock. The business address of The Vanguard GroupBlackRock, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.50 Hudson Yards, New York, NY 10001. |
| (6) | Interests shown include: (i) 8,572,50062,258 shares of Class A common stock held by Cote SPAC 1 LLC,Mr. Cote’s spouse, (ii) 5,266,667 shares of Class A common stock underlying private placement warrants held by Cote SPAC 1 LLC, (iii) 2,000,000 shares of Class A common stock held by Atlanta Sons LLC, (iv) 62,258(iii) 200 shares of Class A common stock held by David M. Cote 2018 Revocable Trust, of which Mr. Cote’s spouseCote is the trustee and (v) 173,913(iv) 285,869 shares of Class A common stock underlying options held by Mr. Cote that are exercisable within 60 days of April 17, 2023.15, 2024. Mr. Cote is the manager of Cote SPAC 1 LLC and Atlanta Sons LLC. Mr. Cote disclaims beneficial ownership of the shares held by his spouse. |
| (7) | Interests shown include: (i) 99,107118,523 shares of Class A common stock held by Mr. Albertazzi, and (ii) 216,105580,317 shares of Class A common stock underlying options that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (8) | Interests shown include: (i) 71,600 shares of Class A common stock, and (ii) 4,02515,551 shares of Class A common stock underlying options held by Mr. DeAngelo that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (9) | Interests shown include: (i) 25,000 shares of Class A common stock held by Mr. Joseph van Dokkum and Mrs. Lynn van Dokkum, as tenants in common, and (ii) 57,97094,456 shares of Class A common stock underlying options held by Mr. van Dokkum that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (10) | Interests shown include: (i) 368,333 shares of Class A common stock, and (ii) 57,97094,456 shares of Class A common stock underlying options held by Mr. Fradin that are exercisable within 60 days of April 17, 2023.15, 2024. |
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| (11) | Interests include 5,63618,772 shares of Class A common stock underlying options held by Ms. Haussler that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (12) | Interests shown include 57,97094,456 shares of Class A common stock underlying options held by Mr. Kotzubei that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (13) | Interests shown include 57,97094,456 shares of Class A common stock underlying options held by Mr. Louie that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (14) | Interests shown include: (i) 44,91844,000 shares of Class A common stock held by Mr. Monser, (ii) 918 shares of Class A common stock held by Mr. Monser’s spouse, and (ii) 57,970(iii) 94,456 shares of Class A common stock underlying options held by Mr. Monser that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (15) | Interests shown include: (i) 35,000 shares of Class A common stock held by Mr. Reinemund, (ii) 333,333 shares of Class A common stock held by the 2017 Steven S. Reinemund GRAT,Community Property Trust, of which Mr. Reinemund is trustee,and Gail T. Reinemund are the trustees and beneficiaries, and (iii) 57,97094,456 shares of Class A common stock underlying options held by Mr. Reinemund that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (16) | Interests shown include: (i) 10,000 shares of Class A common stock that are held by the Carl and Robin Washington Revocable Trust, of which Carl D.Ms. Washington and Robin L.Carl D. Washington are trustees, and (ii) 57,97094,456 shares of Class A common stock underlying options held by Ms. Washington that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (17) | Interests shown include: (i) 234,271 shares of Class A common stock, and (ii) 529,328 shares of Class A common stock underlying options that are exercisable within 60 days of April 17, 2023. |
(18) | Interests shown include: (i) 137,218161,125 shares of Class A common stock, (ii) 342,464573,428 shares of Class A common stock underlying options held by Mr. Fallon that are exercisable within 60 days of April 17, 2023,15, 2024, and (iii) 2,0542,179 shares of Class A common stock held by our 401(k) plan.
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| (18) | Interests shown include: (i) 14,379 shares of Class A common stock, (ii) 71,675 shares of Class A common stock underlying options held by Mr. Karlborg that are exercisable within 60 days of April 15, 2024, and (iii) 1,140 shares of Class A common stock underlying awards that will vest within 60 days of April 15, 2024. |
| (19) | Interests shown include: (i) 107,81836,308 shares of Class A common stock and (ii) 217,30969,862 shares of Class A common stock underlying options held by Mr. Liang that are exercisable within 60 days of April 17, 2023.15, 2024. |
| (20) | Interests shown include 18,486,271include: (i) 50,362 shares of Class A common stock, (ii) 133,028 shares of Class A common stock underlying options held by Mr. Sanghi that are exercisable within 60 days of April 15, 2024 and (iii) 6 shares of Class A common stock held by Powerbar Limited.our 401(k) plan. |
| (21) | Includes 2,039,832(i) 2,028,713 shares which the group has the right to acquire through vested stock options within 60 days of April 17, 2023.15, 2024, and (ii) 6,404 shares of Class A common stock underlying awards that will vest within 60 days of April 15, 2024. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - 20232024 Proxy Statement | 55 |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Related Party Transactions Policies and Procedures We have adopted a written policy on transactions with “related persons,” defined in the policy as a director, executive officer, nominee for director, or greater than 5% beneficial owner of any class of the Company’s voting securities, and their immediate family members. For purposes of this policy, a “related person transaction” is defined as any transaction, arrangement or relationship in which the Company is a participant, the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person had, has or will have a direct or indirect material interest. The Board of Directors, acting through those members of its Audit Committee who are not interested in the transaction in question, will review related person transactions to determine whether the related person transaction is in, or is not inconsistent with, the best interests of the Company and its stockholders. If, after any such review, a related person transaction is determined to be in, or not inconsistent with, the best interests of the Company, then the related person transaction may be approved or ratified according to the procedures in the policy. If advance Audit Committee approval of a related person transaction requiring the Audit Committee’s approval is not practicable or desirable, then the chair of the Audit Committee may approve or ratify a related person transaction. In addition, the policy provides standing pre-approval for certain types of transactions that the Audit Committee has reviewed and determined shall be deemed pre-approved. Business Combination On February 7, 2020 (“Closing Date”), Vertiv consummated its business combination (“Business Combination”) with GS Acquisition Holdings Corp (“GSAH”), pursuant to an arrangement and plan of merger (“Merger Agreement”) by and among the Company, GSAH, Vertiv Holdings, LLC, a Delaware limited liability company (“Vertiv Holdings”), VPE Holdings, LLC, a Delaware limited liability company (“Vertiv Stockholder”), and Crew Merger Sub I LLC and Crew Merger Sub II LLC, each a Delaware limited liability company and a direct, wholly owned subsidiary of GSAH. In connection with the Business Combination, GSAH changed its name to “Vertiv Holdings Co” and changed the trading symbols for its units, each unit representing one share of Class A common stock and one-third of one redeemable warrant to acquire one share of Class A common stock, that were issued in the initial public offering of GSAH. As a result of the Business Combination, we became the owner, directly or indirectly, of all of the assets of the pre-Business Combination Vertiv Holdings, LLC and its subsidiaries, and the Vertiv Stockholder acquired a portion of our Class A common stock. On January 19, 2021, the Company redeemed the outstanding public warrants in full and the units and the Company’s public warrants were subsequently delisted from NYSE. Tax Receivable Agreement
In connection with the Business Combination, on the Closing Date, the Company entered into a tax receivable agreement with the Vertiv Stockholder (“Tax Receivable Agreement”), which generally provided for the payment by us to the Vertiv Stockholder, over a 12-year period after the closing of the Business Combination, of 65% of the cash tax savings in U.S. federal, state, local and certain foreign taxes, that we actually realize (or are deemed to realize) in periods after the closing of the Business Combination as a result of (i) increases in the tax basis of certain intangible assets of Vertiv resulting from certain pre-Business Combination acquisitions, (ii) certain U.S. federal income tax credits for increasing research activities (so-called “R&D credits”) and (iii) tax deductions in respect of certain Business Combination expenses. In the 12th year of the Tax Receivable Agreement, the Company was required to make an additional payment to the Vertiv Stockholder based on 65% of the remaining tax benefits that had not been realized under the Tax Receivable Agreement.
On December 31, 2021, the Company and the Vertiv Stockholder entered into that certain TRA Repurchase Agreement (“TRA Repurchase Agreement”), pursuant to which the parties agreed to amend and supplement the Tax Receivable Agreement to replace the Company’s remaining payment obligations under the Tax Receivable Agreement with an obligation to pay $100 million in cash in two equal installments (“TRA Repurchase”). After December 31, 2021, no payments under the Tax Receivable Agreement will be made or owed by the Company to the Vertiv Stockholder, except for the installment payments (and any accrued interest thereon). The first installment payment was due on or before June 15, 2022, and the second installment payment was due on or before September 15, 2022. On June 15, 2022, Vertiv and the Vertiv Stockholder agreed to further amend the payment schedule under the TRA Repurchase Agreement into three installment payments wherein the first installment payment of $12.5 million became due and was paid on June 15, 2022, the second installment of $12.5 million became due and was paid on September 15, 2022, and the third installment of $75 million became due and was paid on November 30, 2022. Upon receipt of the third installment payment, the TRA Repurchase Agreement and the Company’s obligations to pay amounts thereunder to the Vertiv Stockholder were terminated.
| | | | | | | | | | | 56 | | | | | - 2023 Proxy Statement
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Other Related Party Transactions Indemnification Agreements Our standard form of indemnification agreement for each of our executive officers and directors provides, in general, that we will indemnify them to the fullest extent permitted by law in connection with their service to us or on our behalf. Transactions with the Vertiv Stockholder and its Affiliates On August 8, 2023 the Vertiv Stockholder completed the sale of Platinum Advisors20,000,000 shares of Class A common stock of the Company (the “Stock Sale Transaction”). Subsequent to the Stock Sale Transaction, the Vertiv Stockholder held less than 5% of the outstanding Class A common stock of the Company and as such was no longer considered a related person of the Company for purposes of Item 404 of Regulation S-K by virtue of its ownership in the Company. The Company also purchased and sold goods in the ordinary course of business with affiliates of Platinum Equity Advisors, LLC (“Platinum Advisors”). ForFrom January 1, 2023 through the year ended December 31, 2022,date of the Stock Sale Transaction, purchases from and sales to affiliates of Platinum Advisors were approximately $137$74.1 million and $146$89.5 million, respectively. On February 29, 2024, the Company completed the repurchase from the Vertiv Stockholder of all of the Vertiv Stockholder’s 7,955,215 remaining shares of our Class A common stock an aggregate of approximately $524.9 million, pursuant to the Company’s previously announced $3 billion stock buyback program. | | | | | | | | | | | | 56 | | | | | - 2024 Proxy Statement | | | | | | |
Employment of Family Members of Executive Officers Certain family members of the Company’s executive officers were employed by Vertiv during the year ended December 31, 2022,2023, as set forth below, and, in furtherance to our commitment to corporate governance, each of these familial matters is reviewed and discussed with the Audit Committee and the Compensation Committee. As referenced above, for purposes of this policy, a “related person transaction” is defined as any transaction, arrangement or relationship in which Vertiv is a participant, the aggregate amount involved exceeds or may be expected to exceed $120,000 and in which a related person had, has or will have a direct or indirect material interest. Patrick Johnson, the brother of Rob Johnson, our former CEO, serves as our Executive Vice President of Integrated Rack Solutions and previously served as Vertiv’s Executive Vice President of Information Technology and Edge Infrastructure from November 2017 to the consummation of the Business Combination. Patrick Johnson received total compensation of approximately $2,424,749 (including annual and one-time equity grants) for the year ended December 31, 2022.
Richard Johnson, the brother of RobPatrick Johnson, and Patrick Johnson,one of our former executive officers, serves as our Director of Global Strategic Clients. Richard Johnson received total compensation of approximately $508,820$361,902.73 for the year ended December 31, 2022.2023. Alexander Johnson,DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the sonExchange Act requires our officers, directors and persons who beneficially own more than 10% of Rob Johnsonour Class A common stock (the “10% Stockholders”) to file reports of ownership and nephewchanges in ownership with the SEC. These reporting persons are also required to furnish us with copies of Patrick Johnson, serves as our Directorall Section 16(a) forms they file. The Company’s executive officers, directors and 10% Stockholders timely complied with all such filing requirements applicable to them last fiscal year with respect to their beneficial ownership of Channel Accountsthe Company’s securities, except that (i) a Form 4 reporting five transactions filed on behalf of Stephen Liang was filed late on June 13, 2023 and (ii) a Form 4 for North America. Alexander Johnson received total compensationone transaction filed on behalf of approximately $318,065 (including equity grants) for the year ended December 31, 2022. Michael Johnson, the son of Rob Johnson and nephew of Patrick Johnson, serves as a National Account Manager. Michael Johnson received total compensation of approximately $151,102 for the year ended December 31, 2022.Mr. David Cote was filed late on November 30, 2023.
ADDITIONAL INFORMATION List of Stockholders of Record In accordance with Delaware law, a list of the names of our stockholders of record entitled to vote at the Annual Meeting will be available to our stockholders at the principal executive offices at Vertiv Holdings Co, at 505 N. Cleveland Avenue, Westerville, Ohio 43082, for a period of ten days prior to the date of the Annual Meeting. This list will also be available electronically at the Annual Meeting. Submission of Stockholder Proposals at Next Year’s Annual Meeting To be considered for inclusion in next year’s proxy statement and form of proxy, stockholder proposals for the 20242025 Annual Meeting of Stockholders must be received at our principal executive offices no later than the close of business on December 30, 2023,27, 2024, unless the date of the 20242025 Annual Meeting of Stockholders is more than 30 days before or after June 14, 2024,19, 2025, in which case the stockholder proposal must be received a reasonable time before we begin to print and mail our proxy materials. For any stockholder proposal or director nomination that is not submitted for inclusion in next year’s proxy statement pursuant to the process set forth above, but is instead sought to be presented directly at the 20242025 Annual Meeting of Stockholders, stockholders are advised to review our bylaws as they contain requirements with respect to advance notice of stockholder proposals and director nominations. To be timely, the notice must be received by our Secretary at the address below not later than the opening of business on the 90th day prior nor earlier than the close of business on the 120th day prior to the first anniversary of the date of the prior year’s annual meeting of stockholders. Accordingly, any such stockholder proposal or director nomination must be received between February 15, 202419, 2025 and March 16, 202421, 2025 for the 20242025 Annual Meeting of | | | | | | | | | | | | | | | | | | | | | | | | | - 2023 Proxy Statement | 57
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Stockholders. In the event that the 20242025 Annual Meeting of Stockholders is convened more than 30 days prior to or delayed by more than 60 days after June 14, 2024,19, 2025, notice by the stockholder, to be timely, must be received no earlier than the opening of business on the 120th day prior to the 20242025 Annual Meeting of Stockholders and no later than the later of (1) the close of business on the 90th day prior to the 20242025 Annual Meeting of stockholders and (2) the close of business on the tenth day following the day on which we first publicly announce the date of the 20242025 Annual Meeting of Stockholders. Additionally, to comply with the SEC’s universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 15, 2024.20, 2025. All stockholder proposals and director nominations should be sent to our principal executive offices at Vertiv Holdings Co, 505 N. Cleveland Avenue, Westerville, Ohio 43082, Attn: Corporate Secretary. | | | | | | | | | | | | | | | | | | | | | | | | | - 2024 Proxy Statement | 57 |
We advise you to review our bylaws for additional stipulations relating to the process for identifying and nominating directors, including advance notice of director nominations and stockholder proposals. Copies of the pertinent bylaw provisions are available on request to the Secretary at the address set forth above. Consideration of Stockholder-Recommended Director Nominees Our Nominating and Corporate Governance Committee will consider director nominee recommendations submitted by our stockholders. Stockholders who wish to recommend a director nominee must submit their suggestions in the manner set forth in our bylaws as described above to our principal executive offices at Vertiv Holdings Co, at 505 N. Cleveland Avenue, Westerville, Ohio 43082, Attn: Corporate Secretary. As required by our bylaws, stockholders should include the name, biographical information and other relevant information relating to the recommended director nominee, including, among other things, information that would be required to be included in the proxy statement filed in accordance with applicable rules under the Exchange Act and the written consent of the director nominee to be named as a nominee and to serve as a director if elected, among other requirements set forth in our bylaws. Evaluation of any such recommendations is the responsibility of the Nominating and Corporate Governance Committee. In the event of any stockholder recommendations, the Nominating and Corporate Governance Committee will evaluate the persons recommended in the same manner as it evaluates other candidates. Stockholder Communications with the Board of Directors Any stockholder or other interested party may contact our Board of Directors as a group, our non-employee directors as a group, or any individual director by sending written correspondence to the following address: Vertiv Holdings Co, 505 N. Cleveland Avenue, Westerville, Ohio 43082, Attn: Corporate Secretary. Note about Forward-Looking Statements This proxy statement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27 of the Securities Act, and Section 21E of the Securities Exchange Act. These forward-looking statements include, but are not limited to, statements regarding our anticipated growth and value creation for our stockholders, management strategies and plans, anticipated future investments and new product launches, anticipated effects of pricing and supply chain and operational measures, anticipated demand for our products and services, impacts of supply chain and inflationary pressures, statements regarding anticipated growth in data traffic and artificial intelligence, statements regarding partnerships with customers and others, our ESGability to attract and retain personnel, statements regarding economic and geopolitical conditions, our responsible business goals and initiatives, our plans and actions with respect to operational performance, in the Americas and elsewhere, and our plans, strategies and expectations with respect to executive compensation, including anticipated impacts thereof on retention and on our results of operations.operations, statements regarding our commitments including with respect to responsible business initiatives, human capital resources, safety and environmental, social and governance matters. These statements are only predictions, and actual events or results may differ materially from those in the forward-looking statements set forth herein. These statements are subject to risks and uncertainties, including, but not limited to, the risks discussed under the heading “Risk Factors” in Vertiv’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, to which readers are referred for a discussion of these and other important risk factors concerning Vertiv and its operations. Vertiv is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. | | | | | | | | | | | | | | | | | 58 | | | | | - 20232024 Proxy Statement | | | | | | |
| | | | | Annex A | | Non-GAAP Financial Measures |
Certain financial information included in this proxy statement, as well as the letter to shareholders and annual report accompanying this proxy statement, are considered to be non-GAAP financial measures. Such measures, as further described below, may not be directly comparable to other similarly titled measures used by other companies and therefore may not be comparable among companies. Management believes these non-GAAP financial measures provide investors with useful supplemental information to evaluate the Company’s ongoing operations and to compare with past and future periods. Management also uses certain non-GAAP measures internally for forecasting, budgeting and measuring its operating performance. These measures should be viewed as supplementing, and not as an alternative or substitute for, the Company’s financial results prepared in accordance with GAAP. Pursuant to the requirements of Regulation G, Vertiv has provided reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. Vertiv’s non-GAAP financial measures include: | • | | Adjusted operating profit (loss), which represents operating profit (loss), adjusted to exclude amortization of intangibles; |
| • | | Organic net sales growth, which represents the change in net sales adjusted to exclude the impacts of foreign currency exchange rate, acquisition and divestiture; andrate; |
| • | | Adjusted free cash flow, which represents net cash provided by (used for) operating activities adjusted to exclude capital expenditures and investments in capitalized software and to include proceeds from disposition of PP&E.&E; and |
| • | | Adjusted diluted EPS, which represents diluted earnings per share adjusted to exclude amortization of intangibles and change in warranty liability. |
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Reconciliation of Non-GAAP Financial Measures The following is a reconciliation of Adjusted Operating profit (loss) to the comparable GAAP measure of Operating profit (loss) for the 12 months ended December 31, 20222023 and 20212022 (in millions): | | | | | | | | | First Half of 2022
(January 1,
2022-
June 30,
2022) | | | Second Half of 2022 (July 1,
2022-
December 31,
2022) | | | Year ended
December 31,
2022 | | | Year ended December 31, 2021 | | | Full Year 2023 | | | Full Year 2022 | | | Operating profit (loss) | | | $ (19.0) | | | $ | 242.4 | | | $ | 223.4 | | | $ | 259.9 | | Operating profit (loss) | | Operating profit (loss) | | Operating profit (loss) | | | $ | 872.2 | | | $ | 223.4 | | | Amortization of intangibles | | | 113.5 | | | | 102.3 | | | | 215.8 | | | | 144.3 | | | Mergers and acquisition costs(1) | | | | | | | | | 48.1 | | | Litigation settlement costs | | | | | | | | | 18.7 | | Amortization of intangibles | | Amortization of intangibles | | Amortization of intangibles | | | | 181.3 | | | | 215.8 | | | Adjusted operating profit (loss) | | | $ 94.5 | | | $ | 344.7 | | | $ | 439.2 | | | $ | 471.0 | | Adjusted operating profit (loss) | | Adjusted operating profit (loss) | | Adjusted operating profit (loss) | | | $ | 1,053.5 | | | $ | 439.2 | | | Adjusted operating margins(1) | | Adjusted operating margins(1) | | Adjusted operating margins(1) | | Adjusted operating margins(1) | | | | 15.3% | | | | 7.7% | |
| (1) | For the year ended December 31, 2021, includes $39.4 million of expenses primarily related Vertiv’s acquisition of E&I Engineering Ireland Limited and its affiliate, Powerbar Gulf LLC and $8.7 million asset impairment related to the Heavy Industrial UPS business.Adjusted operating margins calculated as adjusted operating profit (loss) divided by net sales.
|
Reconciliation of Net Cash Provided By (Used For) Operating Activities to Adjusted Free Cash Flow (In millions) | | | | | | | | | Fourth
Quarter 2022
(October 1,
2022-
December 31,
2022) | | Full Year 2022 | | Full Year 2021 | | | Full Year 2023 | | Full Year 2022 | | | Net cash provided by (used for) operating activities | | | 180.7 | | | | (152.8 | ) | | | 210.9 | | Net cash provided by (used for) operating activities | | Net cash provided by (used for) operating activities | | Net cash provided by (used for) operating activities | | | | 900.5 | | | | (152.8) | | | Capital expenditures | | Capital expenditures | | Capital expenditures | | Capital expenditures | | | (38.3 | ) | | | (100.0 | ) | | | (73.4) | | | | (127.9 | ) | | | (100.0) | | | Investments in capitalized software | | | (3.0 | ) | | | (11.0 | ) | | | (11.2) | | Investments in capitalized software | | Investments in capitalized software | | Investments in capitalized software | | | | (6.7 | ) | | | (11.0) | | | Proceeds from disposition of PP&E | | | 3.9 | | | | 3.9 | | | | 9.8 | | Proceeds from disposition of PP&E | | Proceeds from disposition of PP&E | | Proceeds from disposition of PP&E | | | | 12.4 | | | | 3.9 | | | | | | Free cash flow | | | 143.3 | | | | (259.9 | ) | | | 136.1 | | | Merger and acquisition costs | | | — | | | | — | | | | 39.4 | | | | | Adjusted free cash flow | | | 143.3 | | | | (259.9 | ) | | | 175.5 | | Adjusted Free Cash Flow | | | | 778.3 | | | | (259.9) | |
Reconciliation from Net Sales to Organic Net Sales Growth | | | | | | | | | Full Year
2022 GAAP Sales | | | Full Year 2021 GAAP Sales | | | Δ | | | Δ% | | | Full Year
2023 GAAP Sales | | | Full Year 2022 GAAP Sales | | | Δ | | | Δ% | | | Critical infrastructure & solutions | | $ | 3,475.3 | | | $ | 2,900.4 | | | $ | 574.9 | | | | 19.8% | | Critical infrastructure & solutions | | Critical infrastructure & solutions | | Critical infrastructure & solutions | | | Services & spares | | Services & spares | | Services & spares | | Services & spares | | | 1,480.6 | | | | 1,438.7 | | | | 41.9 | | | | 2.9% | | | Integrated rack solutions | | | 735.6 | | | | 659.0 | | | | 76.6 | | | | 11.6% | | Integrated rack solutions | | Integrated rack solutions | | Integrated rack solutions | | | Total | | $ | 5,691.5 | | | $ | 4,998.1 | | | $ | 693.4 | | | | 13.9% | | Total | | Total | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Δ | | | FX Δ | | | Acquisition /
Divestiture
Δ(1) | | | Organic
Growth | | | Organic Δ%(2) | | | | | | | | Critical infrastructure & solutions | | $ | 574.9 | | | $ | 158.5 | | | $ | (301.2 | ) | | $ | 432.2 | | | | 14.9% | | | | | | | | Services & spares | | | 41.9 | | | | 62.9 | | | | 18.4 | | | | 123.2 | | | | 8.6% | | | | | | | | Integrated rack solutions | | | 76.6 | | | | 30.4 | | | | — | | | | 107.0 | | | | 16.2% | | | | | | | | Total | | $ | 693.4 | | | $ | 251.8 | | | $ | (282.8 | ) | | $ | 662.4 | | | | 13.3% | |
| | | | | | | | | | | | | | | | | | | | | | | | | Δ | | | FX Δ | | | Organic
Growth | | | Organic Δ%(1) | | | | | | | Critical infrastructure & solutions | | $ | 973.8 | | | $ | 22.5 | | | $ | 996.3 | | | | 28.7% | | | | | | | Services & spares | | | 111.4 | | | | 15.1 | | | | 126.5 | | | | 8.5% | | | | | | | Integrated rack solutions | | | 86.5 | | | | 6.1 | | | | 92.6 | | | | 12.6% | | | | | | | Total | | $ | 1,171.7 | | | $ | 43.7 | | | $ | 1,215.4 | | | | 21.4% | |
| (1) | The change in acquisition and divestiture sales excludes E&I sales for the ten months ended October 31, 2022 of $359.2, partially offset by the divested heavy industrial UPS business sales for the year ended December 31, 2021 of $76.4.
|
(2) | Organic growth percentage change is calculated as organic growth divided by net sales for the year ended December 31, 2021.2022. |
Reconciliation of Diluted EPS to Non-GAAP Adjusted EPS Year ended December 31, 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating
profit (loss) | | | Interest
expense, net | | | Change in
Warrant
Liability | | | Extinguishment
of debt | | | Income tax
expense | | | Net income
(loss) | | | Diluted
EPS(1) | | | | | | | | | | GAAP | | $ | 872.2 | | | $ | 180.1 | | | $ | 157.9 | | | $ | 0.5 | | | $ | 73.5 | | | $ | 460.2 | | | $ | 1.19 | | | | | | | | | | Amortization of intangibles | | | 181.3 | | | | — | | | | — | | | | — | | | | — | | | | 181.3 | | | | 0.47 | | | | | | | | | | Change in warrant liability | | | — | | | | — | | | | (157.9 | ) | | | — | | | | — | | | | 157.9 | | | | 0.41 | | | | | | | | | | Nonrecurring tax benefit, net(2) | | | — | | | | — | | | | — | | | | — | | | | 115.0 | | | | (115.0 | ) | | | (0.30) | | | | | | | | | | Non-GAAP Adjusted | | $ | 1,053.5 | | | $ | 180.1 | | | $ | — | | | $ | 0.5 | | | $ | 188.5 | | | $ | 684.4 | | | $ | 1.77 | |
| (1) | Diluted EPS and adjusted diluted EPS is based on 386.2 million shares (includes 380.1 million basic shares, 6.1 million potential dilutive stock options, restricted stock units and performance awards converted into RSUs upon achievement of the related performance target). We believe that this presentation is more representative of operating results by removing the impact of warrant liability accounting and the associated impact on diluted share count. |
| (2) | Nonrecurring tax benefit includes $115.0 million of valuation allowance release as a result of the Company’s updated assessment of the realization of deferred tax assets in certain countries. |
| | | | | | | | | | | | | | | | | 60 | | | | | - 20232024 Proxy Statement | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | First Half of 2022
(January 1, 2022 –
June 30,
2022) GAAP Sales | | | First Half of 2021
(January 1, 2021 –
June 30,
2021) GAAP Sales | | | Δ | | | Δ% | | | | | | | Critical infrastructure & solutions | | $ | 1,511.6 | | | $ | 1,354.7 | | | $ | 156.9 | | | | 11.6% | | | | | | | Services & spares | | | 703.4 | | | | 684.9 | | | | 18.5 | | | | 2.7% | | | | | | | Integrated rack solutions | | | 340.8 | | | | 319.1 | | | | 21.7 | | | | 6.8% | | | | | | | Total | | $ | 2,555.8 | | | $ | 2,358.7 | | | $ | 197.1 | | | | 8.4% | |
Year ended December 31, 2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Δ | | | FX Δ | | | Acquisition /
Divestiture
Δ(1) | | | Organic
Growth | | | Organic
Δ%(2) | | | | | | | | Critical infrastructure & solutions | | $ | 156.9 | | | $ | 47.2 | | | $ | (169.2 | ) | | $ | 34.9 | | | | 2.6% | | | | | | | | Services & spares | | | 18.5 | | | | 21.1 | | | | — | | | | 39.6 | | | | 5.8% | | | | | | | | Integrated rack solutions | | | 21.7 | | | | 8.5 | | | | — | | | | 30.2 | | | | 9.5% | | | | | | | | Total | | $ | 197.1 | | | $ | 76.8 | | | $ | (169.2 | ) | | $ | 104.7 | | | | 4.4% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating
profit (loss) | | | Interest
expense, net | | | Change in
Warrant
Liability | | | Income tax
expense | | | Net income
(loss) | | | Diluted
EPS(1) | | | | | | | | | GAAP | | $ | 223.4 | | | $ | 147.3 | | | $ | (90.9 | ) | | $ | 90.4 | | | $ | 76.6 | | | $ | (0.04) | | | | | | | | | Intangible amortization | | | 215.8 | | | | — | | | | — | | | | — | | | | 215.8 | | | | 0.57 | | | | | | | | | Change in warrant liability | | | — | | | | — | | | | 90.9 | | | | — | | | | (90.9 | ) | | | — | | | | | | | | | Non-GAAP Adjusted | | $ | 439.2 | | | $ | 147.3 | | | $ | — | | | $ | 90.4 | | | $ | 201.5 | | | $ | 0.53 | |
| (1) | The changeDiluted EPS and adjusted diluted EPS is based on 378.2 million shares (includes 376.7 million basic shares and 1.5 million dilutive warrants). Diluted EPS and adjusted diluted EPS includes an adjustment to exclude $90.9 million from net income which is attributable to the warrants as they were dilutive in acquisitionthe period. We believe that this presentation is more representative of operating results by removing the impact of warrant liability accounting and divestiture sales excludes E&I sales for the six months ended June 30, 2022 of $201.7, partially offset by the divested heavy industrial UPS business sales for the six months ended June 30, 2021 of $32.5.
|
(2) | Organic growth percentage change is calculated as organic growth divided by net sales for the six months ended June 30, 2021.
|
| | | | | | | | | | | | | | | | | | | | | | | | | Second Half of 2022
(July 1, 2022 –
December 31,
2022) GAAP Sales | | | Second Half of 2021
(July 1, 2021 –
December 31,
2021) GAAP Sales | | | Δ | | | Δ% | | | | | | | Critical infrastructure & solutions(1) | | $ | 1,963.7 | | | $ | 1,545.7 | | | $ | 418.0 | | | | 27.0% | | | | | | | Services & spares | | | 777.2 | | | | 753.8 | | | | 23.4 | | | | 3.1% | | | | | | | Integrated rack solutions | | | 394.8 | | | | 339.9 | | | | 54.9 | | | | 16.2% | | | | | | | Total | | $ | 3,135.7 | | | $ | 2,639.4 | | | $ | 496.3 | | | | 18.8% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Δ | | | FX Δ | | | Acquisition /
Divestiture
Δ(1) | | | Organic
Growth | | | Organic
Δ%(2) | | | | | | | | Critical infrastructure & solutions | | $ | 418.0 | | | $ | 111.3 | | | $ | (120.9 | ) | | $ | 408.4 | | | | 26.4% | | | | | | | | Services & spares | | | 23.4 | | | | 41.8 | | | | 7.4 | | | | 72.6 | | | | 9.6% | | | | | | | | Integrated rack solutions | | | 54.9 | | | | 21.8 | | | | — | | | | 76.7 | | | | 22.6% | | | | | | | | Total | | $ | 496.3 | | | $ | 174.9 | | | $ | (113.5 | ) | | $ | 557.7 | | | | 21.1% | |
(1) | The change in acquisition and divestiture sales excludes E&I sales for the four months ended October 31, 2022 of $157.5, partially offset by the divested heavy industrial UPS business sales for the year ended December 31, 2021 of $43.9.
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(2) | Organic growth percentage change is calculated as organic growth divided by net sales for the year ended December 31, 2021.associated impact on diluted share count.
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | - 20232024 Proxy Statement | 61 |
VERTIV HOLDINGS CO 505 N. CLEVELAND AVE. WESTERVILLE, OH 43082   VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on June 13, 202318, 2024 for shares held directly and by 11:59 p.m. Eastern Time on June 11, 202316, 2024 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/VRT2023VRT2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on June 13, 202318, 2024 for shares held directly and by 11:59 p.m. Eastern Time on June 11, 202316, 2024 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | | | | D96831-P87521V38275-P05978
| | KEEP THIS PORTION FOR YOUR RECORDS | — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — – | | | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1.
| | Elect each of the following eleven directors to our Board of Directors, each for a term of one year expiring at the 2024 annual meeting of stockholders and until such director’s successor has been duly elected and qualified.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees:
| | | | For | | Withhold | | | | The Board of Directors recommends you vote FOR proposals 2 and 3.
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| | | For | | | | Against | | | | Abstain | | | | | | 1a.
| | David M. Cote
| | | | ☐ | | ☐ | | | | 2. | | To approve, on an advisory basis, the 2022 compensation of our named executive officers as disclosed in the Proxy Statement.
| | | | | | | ☐ | | | | ☐ | | | | ☐ | | | | | | 1b.
| | Giordano Albertazzi
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| | | | | | | | | | | | | | | | | | | | | 1c.
| | Joseph J. DeAngelo
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| | | | 3.
| | To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
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| | | | | 1d.
| | Joseph van Dokkum
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| | | | | | | | | 1e.
| | Roger Fradin
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| | | | NOTE: Such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
| | | | | | | | | | | | | | | | | 1f.
| | Jakki L. Haussler
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| | Jacob Kotzubei
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| | Matthew Louie
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| | | | | | | | | | | | | | | | | | | 1i.
| | Edward L. Monser
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| | | | | | | | | | | | | | | | | | | | | | | | 1j.
| | Steven S. Reinemund
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| | Robin L. Washington
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| | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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D96832-P87521
VERTIV HOLDINGS CO Annual Meeting of Stockholders
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| | | | | | | | | | | | | | | | | June 14, 2023 11:00 AM ET
This proxy is solicited by theThe Board of Directors recommends you vote FOR the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | 1. | | Elect each of the following eleven directors to our Board of Directors, each for a term of one year expiring at the 2025 annual meeting of stockholders and until such director’s successor has been duly elected and qualified. | | | | | | | | | | | | | | | | | | | | | Nominees: | | | | For | | | | Withhold | | | | | | | The stockholder(s) hereby appoint(s) 1a.
| | David M. Cote | | | | ☐ | | | | ☐ | | | | | | | 1b. | | Giordano Albertazzi | | | | ☐ | | | | ☐ | | | | | 1c. | | Joseph J. DeAngelo | | | | ☐ | | | | ☐ | | | | | | | 1d. | | Joseph van Dokkum | | | | ☐ | | | | ☐ | | | | | 1e. | | Roger Fradin | | | | ☐ | | | | ☐ | | | | | | | 1f. | | Jakki L. Haussler | | | | ☐ | | | | ☐ | | | | | | | 1g. | | Jacob Kotzubei | | | | ☐ | | | | ☐ | | | | | | | 1h. | | Matthew Louie | | | | ☐ | | | | ☐ | | | | | | | 1i. | | Edward L. Monser | | | | ☐ | | | | ☐ | | | | |
| | | | | | | | | | | | | | | | | | | | | | | For | | | | Withhold | | | | | | | 1j. | | Steven S. Reinemund | | | | ☐ | | | | ☐ | | | | | | | 1k. | | Robin L. Washington | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR proposals 2 and Stephanie L. Gill, or any3. |
| | | For | | | | Against | | | | Abstain | | | 2. | | To approve, on an advisory basis, the 2023 compensation of them,our named executive officers as proxies (the “Proxies”), each withdisclosed in the power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote,Proxy Statement. | | | | | | | ☐ | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | 3. | | To ratify the appointment of Ernst & Young LLP as designated onour independent registered public accounting firm for the reverse side of this ballot, all of the shares of Class A common stock of VERTIV HOLDINGS CO that the stockholder(s) is/are entitled to vote atfiscal year ending December 31, 2024. | | | | | |
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| | | | | NOTE: Such other business as may properly come before the Annual Meeting of Stockholders to be held at 11:00 AM ET on June 14, 2023, virtually at www.virtualshareholdermeeting.com/VRT2023,or any adjournment or postponement thereof. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | Signature (Joint Owners) | | Date | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — V38276-P05978 VERTIV HOLDINGS CO Annual Meeting of Stockholders June 19, 2024 11:00 AM ET This proxy is solicited by the Board of Directors The stockholder(s) hereby appoint(s) David M. Cote, Giordano Albertazzi and Stephanie L. Gill, or any of them, as proxies (the “Proxies”), each with the power to appoint his or her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Class A common stock of VERTIV HOLDINGS CO that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at 11:00 AM ET on June 19, 2024, virtually at www.virtualshareholdermeeting.com/VRT2024, and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. Continued and to be signed on reverse side |
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