| | LONG-TERM INCENTIVES | | | | ▪
| ·
| | We do not maintain employment agreements with any60% of long-term equity incentive awards consisted of PBRSUs and 40% consisted of stock options. The overall target values of these awards were within the median range of our named executive officers.
size-adjusted competitive market for each NEO, other than Mr. Duijser. ▪
The design of the PBRSUs granted in December 2023 for the 2024-2026 performance period was revised to: ▪
Utilize organic ROIC performance measure, rather than the adjusted ROIC performance measure utilized in previous years; ▪
Incorporate a maximum performance payout of 200% for overperformance; and ▪
Include a relative TSR modifier. ▪
The 2021 to 2023 PBRSUs paid out at 100% of target award opportunities based upon adjusted ROIC performance. | |
We believe that our long-term equity incentive program, which typically accounts for at least half of our NEOs’ total annual compensation, is an effective tool in aligning our executives’ interests with those of our stockholders and in incentivizing long-term value creation. Target compensation mix does not include any grants of special long-term equity incentives. For more information on our compensation philosophy and process, see page 28.46. ECOLAB PROXY STATEMENT 2024 ![[MISSING IMAGE: ic_sparkblue-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_sparkblue-pn.jpg) 11
Corporate Governance Highlights Key aspects of our corporate governance structure, policies and processes include the following:
| ·
| | All of our directors, with the exception of our CEO, are independent.
|
Board
Matters | | ·
PROPOSAL 1 — ELECTION OF DIRECTORS | | We have an independent Lead Director with substantial and clearly delineated authority.
|
| | ·
| | We do not have
| | The Board of Directors recommends a stockholder rights plan. |
| ·
| | Each director serves a one-year term and stands for re-election atvote FOR the election of each annual meeting.
|
| ·
| | Directors electedof the 12 nominees named in uncontested elections must receive a majority vote. A director who fails to receive the required number of votes for election must tender his or her written resignation for consideration by the Board.
|
| ·
| | All of our named executive officers hold Ecolab common stock in excess of our stock ownership guidelines.
|
For more information, see page 13.
| | ECOLAB - 2018 Proxy Statement
| 3
| | |
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 3, 2018
1 Ecolab Place, Saint Paul, Minnesota 55102
The Board of Directors of Ecolab Inc. is using this Proxy Statement (the “Proxy Statement”) to solicit proxies from the holders of Ecolab Common Stock, par value $1.00 per share (“Common Stock”), for use at the 2018 Annual Meeting of Ecolab Stockholders. We are first mailing this Proxy Statement and accompanying form of proxy to Ecolab stockholders on or about March 19, 2018.
| ·
| | Meeting Time and Place – Thursday, May 3, 2018, at 9:30 a.m., in the Cafeteria of the Ecolab Global Headquarters, 1 Ecolab Place, Saint Paul, Minnesota 55102.
|
| ·
| | Purpose of the Meeting – is to vote on the following items:
|
| 1.
| | To elect as directors to a one-year term ending in 2019 the 13 nominees named in this Proxy Statement;
2025. | |
DIRECTOR NOMINEES | 2.
| | To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the current year ending December 31, 2018;
|
| 3.
| | To approve, on an advisory basis, the compensation of executives disclosed in the Proxy Statement;
|
| 4.
| | To consider and vote on a stockholder proposal regarding the threshold to call special stockholder meetings, if properly presented; and
|
| 5.
| | To transact such other business as may properly come before our Annual Meeting and any adjournment or postponement thereof.
|
| ·
| | Record Date – The record date for determining the holders of Common Stock entitled to vote at our Annual Meeting is the close of business on March 6, 2018.
|
| ·
| | Shares Entitled to Vote – As of March 6, 2018, the record date for the meeting, there were 288,348,134 shares of Common Stock outstanding. Each share of Common Stock is entitled to one vote. Common Stock held by Ecolab in our treasury is not counted in shares outstanding and will not be voted.
|
Note – References in this Proxy Statement to “Ecolab,” “the Company,” “we,” “our,” or “us” are to Ecolab Inc.
| | 4
| ECOLAB - 2018 Proxy Statement
| | |
VOTING PROCEDURES
Quorum – A quorumThe Governance Committee of stockholders is necessary to hold a valid meeting. The presence in person or by proxyour Board of Directors has nominated the 12 persons named on the following pages for election at the 2024 Annual Meeting. If elected, the nominees will hold office as directors from election until the next Annual Meeting of Stockholders or until their successors are elected and qualified or until their death, resignation or removal. All of the nominees are currently Company directors who were elected by stockholders at the 2023 Annual Meeting, except for Mr. Althoff, who was elected to the Board effective February 22, 2024, and was initially referred by a non-management director, recommended by the Governance Committee and interviewed by the independent members of the Board. We would like to thank our valued colleague, Barbara J. Beck, who is not standing for re-election, for her service on the Board, including in her roles as Chair of the Compensation & Human Capital Management Committee and past Chair of the Governance Committee.
DIRECTOR SELECTION PROCESS Our Governance Committee leads all efforts related to Board refreshment. Each year, our Governance Committee reviews its Board membership qualifications and assesses the composition of the Board against these criteria, with a focus towards ensuring that the Board includes directors who possess the necessary backgrounds, experiences, and knowledge, offer a range of perspectives, and demonstrate independent judgment. The Committee also will consider possible conflicts of interest, and any other factors it determines appropriate to meeting the needs of holdersthe Board at that particular time. Accordingly, and as set forth in the Governance Committee charter, the Governance Committee will identify, evaluate and nominate candidates for election or reelection to the Board who possess the following qualifications: ▪
the highest standards of personal and professional integrity ▪
the ability and judgment to serve the long-term interest of our stockholders ▪
background, experience and expertise relevant to our business and that will contribute to the overall effectiveness and diversity of the Board, including diversity of race, ethnicity, gender and sexual orientation ▪
broad business and social perspective ▪
demonstrated independence of thought and judgment ▪
the ability to communicate openly with other directors and to meaningfully participate in the Board’s decision-making process ▪
commitment to serve on the Board for a period of time that ensures continuity and sufficient time to develop knowledge about our business ▪
willingness to devote appropriate time and effort to fulfilling the duties and responsibilities of a majorityBoard member ▪
the ability and willingness to objectively appraise the performance of management ▪
Any other factors the Committee deems appropriate to meeting the needs of the outstanding shares of Common Stock entitled to voteBoard at that particular time Under our Corporate Governance Principles, the meeting is a quorum. Abstentions and broker non-votes count as present for establishing a quorum. Common Stock held by Ecolab in our treasury does not count toward a quorum.Broker Non-Votes – Broker non-votes occur on a proposal when the beneficial owner of Common Stock does not submit voting instructions to a broker or bank. Under New York Stock Exchange rules, brokers, banks and other nominees generally will have discretionary authority to vote shares in absence of instructions on "routine" matters, such as the ratificationpreferable size of the appointmentBoard is between 11 and 15 members, in order to facilitate effective discussion and decision-making, adequate staffing of PricewaterhouseCoopers LLP,Board Committees, and will not have discretion to vote shares on non-routine matters. Other than the appointmenta desired mix of PricewaterhouseCoopers LLP, broker non-votes are not counteddiversified experience and background. Our Board of Directors currently consists of 13 members. Effective as votes cast for any purpose in determining whether a matter has been approved. To ensure that their views are represented at the meeting, we strongly urge all beneficial owners to provide specific voting instructions on all matters to be considered at the meeting to their record-holding brokers.
Treatment of Abstentions – Shares voted “Abstain” will have no effect on the election of directors or on the non-binding vote regarding the threshold to call special stockholder meetings. For the other proposals to be voted on at the Annual Meeting, abstentions are treated as shares present or represented and voting and therefore have the same effect as negative votes.
How to Vote by Proxy – You may vote in person by ballot at our Annual Meeting or by submitting a valid proxy. We recommend you submit your proxy even if you plan to attend the Annual Meeting. If you attend the Annual Meeting, you may vote by ballot, thereby canceling any proxy previously submitted.
Voting instructions are included on your proxy card. If you properly complete your proxy and submit it to us in time to be tabulated, onesize of the individuals named as your proxy will vote your Common Stock as you have directed. You may vote for or against each proposal, or you may abstain from voting on a proposal. With respect to the election of directors, you may vote for or against each nominee, or you may abstain from voting on the election of one or more nominees.
Revoking Your Proxy – You may revoke your proxy at any time before it is voted by:
| ·
| | timely delivery of a valid, later-dated proxy, including a proxy given by telephone or Internet;
|
| ·
| | timely delivery of written notice to our Corporate Secretary before the Annual Meeting, stating that you have revoked your proxy; or
|
| ·
| | voting by ballot at our Annual Meeting.
|
Vote Tabulation – The vote on each proposal will be tabulated as follows:
Proposal 1: Election of Directors – Each nominee will be elected by a majority of the votes cast in uncontested elections. We currently expect that the election of directors at our meeting will be uncontested. Under the majority voting standard, a nominee must receive a number of “FOR” votes that exceeds 50% of the votes cast with respect to that director’s election. Votes cast with respect to a nominee include votes FOR or AGAINST a nominee and exclude abstentions and broker non-votes.
If an uncontested nominee for director does not receive an affirmative majority of “FOR” votes, he or she will be required to promptly offer his or her resignation to the Board’s independent Governance Committee. That committee will then make a recommendation to the Board as to whether the offered resignation should be accepted or rejected, or whether other action should be taken. The Board will publicly announce its decision regarding the offered resignation and the rationale behind it within 90 days after the election results have been certified. Any director who has so offered his or her resignation will not be permitted to vote on or participate in the recommendation of the Governance Committee or the Board’s decision with respect to his or her resignation.
| | ECOLAB - 2018 Proxy Statement
| 5
| | |
Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FORreduced to 12 members.
12ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
| | DIRECTOR RECRUITMENT PROCESS | | | | | | | | | | | | | | | | | | | | | | | | | | | | Board composition is continuously analyzed to ensure alignment with strategy | | | | Candidate recommendations are identified with input from directors, management, and other stakeholders | | | | The Governance Committee screens qualifications, considers diversity and skills, interviews potential candidates, and selects nominees | | | | Board of Directors evaluates candidates, reviews conflicts and independence, interviews recommended candidates, and selects nominees | | | | Shareholders vote on nominees at our Annual Meeting of Stockholders | | | | Implementation: 4 of our current independent directors elected to the Board within the last 5 years — each bringing a fresh perspective and unique skill set | |
DIRECTOR NOMINEE EXPERIENCE AND QUALIFICATIONS The Board of Directors and the electionGovernance Committee believes our director nominees possess the broad and diverse skills, experience, and background required to oversee management of our large and complex global business and to carry out their responsibilities as directors. The following chart provides a snapshot of the 13attributes, diversity, and skills of our director nominees and our Board as a whole. These experiences and qualifications are the same attributes the Board considers as part of its succession planning and are aligned with our long-term business strategies. | | Director Experience, Expertise, and Skills | |
Our Board believes these experiences, expertise, and skills contribute to effective oversight of our strategy and operations. | | DIRECTOR EXPERIENCE, EXPERTISE, AND SKILLS | | | | IMPORTANCE TO ECOLAB | | | | | | | CEO experience | | | | CEO experience provides proven experience driving change and growth, managing risk, and setting and executing corporate strategy. | | | | | | | Industry experience | | | | This experience offers valuable insight into the competitive market, technology, and operations of our largest businesses, including the Industrial business, Institutional & Specialty Services business, and Health Care & Life Sciences business. | | | | | | | Global business operations | | | | With 47% of sales and 29,374 employees outside the U.S., knowledge of global business operations is critical to assessing our business risks and opportunities. | | | | | | | Science / innovation | | | | Experience solving problems as an engineer or scientist offers insights into technical innovations driving our corporate growth. | | | | | | | Accounting / financial expertise | | | | The Board aims to have several members who qualify as financial experts to oversee management’s preparation of financial statements and internal accounting controls. | | | | | | | Human capital management | | | | The Board values experience relevant to understanding our global employee population and related risks, as well as executive compensation expertise. | | | | | | | Water / energy | | | | As a sustainably minded company, this expertise offers important insight into our strategic and operational goals to drive growth and higher returns. | | | | | | | Digital / cybersecurity | | | | Expertise in digital and cybersecurity fields supports oversight of our digital product offerings, as well as effective monitoring of cybersecurity, privacy and similar risks. | | | | | | | Supply chain and manufacturing | | | | Supply chain experience offers insight about efficient operations, capital needs, and production strategies and perspective on our safety and sustainability initiatives. | | | | | | | Public company corporate governance | | | | Experience on one or more other public company boards offers additional perspective on key governance and risk issues facing large corporations. | | | | | | | M&A | | | | Experience with mergers, acquisitions, and divestitures offers insight into the strategic, operational, and financial impact of these transactions. | |
ECOLAB PROXY STATEMENT 2024 13
Corporate Governance and Board Matters
The following matrix highlights the mix of key skills and expertise, that among other factors, led the Board and the Governance Committee to recommend these nominees for election to the Board. The matrix is intended to depict notable areas of focus for each director nominee. The absence of a mark does not mean that a particular director does not possess that qualification or skill. | | | | | | | | | DIRECTORS | | | | DIRECTOR EXPERIENCE,
EXPERTISE, AND SKILLS | | | | ALTHOFF | | | | BALLARD | | | | BECK | | | | GREEN | | | | HIGGINS | | | | LARSON | | | | MACLENNAN | | | | MCKIBBEN | | | | NOWELL | | | | REICH | | | | VAUTRINOT | | | | ZILLMER | | | | | | | CEO experience | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Industry experience | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Global business operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Science / innovation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accounting /
financial expertise | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Human capital management | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Water / energy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Digital / cybersecurity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Supply chain and manufacturing | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Public company corporate governance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | M&A | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | DIVERSITY ATTRIBUTES | | | | | | | | | | | Gender diversity (women) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Race / ethnicity (person of color) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | LGBTQ+ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Military / veteran | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Our Board selected these 12 director nominees based on their diverse set of backgrounds, skills, and experiences, which align with our business strategy and contribute to the effective oversight of Ecolab. 14ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
In nominating Mr. Zillmer, the Board has once again evaluated Mr. Zillmer’s continued service as the Non-Executive Chairman of CSX Corporation and his current role as CEO and board member of Aramark. Our Board recognizes that certain proxy advisors and stockholders have raised questions about the public company commitments for Mr. Zillmer. Mr. Zillmer has been highly engaged since joining our Board in 2006 and in 2023 attended 100% of the Board meetings and 100% of meetings of committees on which he serves. Mr. Zillmer is a fully active participant in our Board meetings and deliberations, is readily available for consultation with other independent directors, is a recognized leader among the Board for his responsiveness in between meetings, and serves an important role in the strong, independent oversight of management. Mr. Zillmer’s deep knowledge of the Company’s Institutional business, significant public company board experience and his proven leadership as CEO of three different companies over the course of his career are all highly valued by Ecolab and its Board of Directors. Our Board strongly believes that Mr. Zillmer has demonstrated, and will continue to demonstrate, his ability to devote the sufficient time and capacity needed to carry out his obligations as a Board member for Ecolab including in his role as a member of the Compensation & Human Capital Management and Finance Committees. After thorough consideration and assessment of Mr. Zillmer’s ongoing performance as an Ecolab Board member including Board evaluations submitted by each independent director, the Board unanimously recommends the re-election of Mr. Zillmer at the Annual Meeting. The Board considered that Ms. Beck was not standing for re-election at the Annual Meeting and determined to approve changes to certain Committees to balance the membership and expertise on such Committees following her departure. The Board determined that following the Annual Meeting, (i) Ms. McKibben will be appointed a member of the Compensation & Human Capital Management Committee and the Governance Committee and will no longer sit on the Audit and Finance Committees; (ii) Mr. MacLennan will be appointed to the Compensation & Human Capital Management Committee and will no longer sit on the Audit Committee, and (iii) Mr. Green will be Chair of the Compensation & Human Capital Management Committee. The Board of Directors has no reason to believe that any of the named in this Proxy Statement.nominees is not available or will not serve if elected. If, for any reason, any nominee becomes unavailable for election prior to our Annual Meeting, the proxies solicited by our Board of Directors will be voted FORfor such substituted nominee as is selected by our Board of Directors, or our Board of Directors, at its option, may reduce the number of directors to constituteconstituting the entire Board.Proposal 2: Ratification
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS These are the Board’s nominees for the Board of AppointmentDirectors, as recommended by the Governance Committee: | | JUDSON B. ALTHOFF | | | | Committee Membership ▪
Audit ▪
Finance Age 51 Director since 2024 Independent | | | | Reasons for Nomination Mr. Althoff leads a large, global commercial workforce at one of the world’s preeminent technology and digital innovation companies. Mr. Althoff has demonstrated success managing complex commercial, financial and sales operations across a global business. The Board benefits from his deep knowledge of artificial intelligence, cloud computing and the global technology ecosystem. Mr. Althoff’s experience growing commercial sales at scale through customer-focused innovations provides an important perspective for Ecolab’s growth strategy. His high-tech expertise contributes to the Board’s oversight of the strategy and risks associated with Ecolab’s technology investments and digital capabilities. | | | | Career Highlights Microsoft Corporation, a technology company ▪
EVP & Chief Commercial Officer (2020-present) ▪
EVP Worldwide Commercial Business (2016-2020) ▪
President, Microsoft North America (2013-2016) Oracle Corporation ▪
SVP Worldwide Alliances & Channels Embedded Sales (2009-2012) Education ▪
MS, Mechanical Engineering, Illinois Institute of Technology Other Directorships — Current ▪
None Other Directorships — Past 5 Years ▪
None | | | | Key Skills | | | | | | | | Industry experience | | | | | | | | Global business operations | | | | | | | | Science / innovation | | | | | | | | Human capital management | | | | | | | | Digital / cybersecurity | | |
ECOLAB PROXY STATEMENT 2024 15
Corporate Governance and Board Matters
| | SHARI L. BALLARD | | | | Committee Membership ▪
Audit ▪
Safety, Health & Environment Age 57 Director since 2018 Independent | | | | Reasons for Nomination Ms. Ballard is a seasoned executive with deep brand-building expertise, whose background enables her to contribute significant strategic insight into growing Ecolab’s businesses and developing talent. Ms. Ballard has extensive experience growing large, geographically dispersed businesses through her focus on deep customer relationships and talent management. As a current CEO, she has demonstrated business strategy execution, a strong track record of success in brand management and the ability to transform businesses. Ms. Ballard also provides the Board with expertise in e-commerce, as well as extensive talent management experience at large scale, international organizations. In addition to her corporate functional experience in human resources, call centers, and real estate, she has held several international roles, which included responsibility for transformation efforts in Canada, China, Europe, and Mexico. | | | | Career Highlights Minnesota United FC, the professional soccer team of Minnesota ▪
Chief Executive Officer (2021-present) Best Buy Co., Inc., a consumer electronics retail company ▪
Advisor (2018-2019) ▪
Senior Executive Vice President and President, Multi-Channel Retail, with responsibility for all U.S. Best Buy stores, ▪
e-commerce, customer call centers, Best Buy Mexico and real estate strategy (2017-2018) ▪
President, U.S. Retail (2014-2017) ▪
Chief Human Resources Officer (2013-2016) ▪
President — Americas, with responsibility for business in the U.S. and Mexico (2010-2012) ▪
President — International, with responsibility for business in Canada, China, Europe, and Mexico (2002-2014) Education ▪
BA, University of Michigan-Flint Other Directorships — Current ▪
None Other Directorships — Past 5 Years ▪
None | | | | Key Skills | | | | | | | | CEO experience | | | | | | | | Human capital management | | | | | | | | Digital / cybersecurity | | | | | | | | Public company corporate governance | | | | | | | | M&A | | |
| | CHRISTOPHE BECK | | | | Committee Membership ▪
Safety, Health & Environment Age 56 Director since 2020 Not Independent| Chairman and CEO | | | | Reasons for Nomination Mr. Beck has deep and direct knowledge of Ecolab’s businesses and operations, including its mission to deliver on its growth, performance and sustainability programs. Mr. Beck has 30 years of global marketing, sales, and management experience in Europe, Asia, and North America, including 17 years at Ecolab where he held leadership roles within the Industrial, Nalco Water, International and Institutional businesses, and oversaw the integration of the Nalco acquisition. In addition, his experience at Nestlé included senior leadership positions where he ran several of the company’s major businesses. Mr. Beck’s strong scientific and technological background and deep understanding of Ecolab’s products and innovations provides a perspective that is valued by the Board in setting growth and sustainable profitable growth strategies. | | | | Career Highlights Ecolab Inc. ▪
Chairman and Chief Executive Officer (2022-present) ▪
Chairman, Chief Executive Officer and President (2022) ▪
Chief Executive Officer (2021-2022) ▪
President and Chief Operating Officer (2019-2020) ▪
Served in several senior leadership roles within the Industrial, Nalco Water, International, and Institutional operations (2007-2019) Nestlé ▪
Served as a senior executive for 16 years European Space Agency ▪
Worked on the European space shuttle project HERMES Industry Recognition ▪
Nominated as a Young Global Leader of the World Economic Forum in 2006, for his accomplishments and commitment to shape a better world Education ▪
MS, Mechanical Engineering & Aerodynamics, École polytechnique fédérale de Lausanne Other Directorships — Current ▪
None Other Directorships — Past 5 Years ▪
None | | | | Key Skills | | | | | | | | CEO experience | | | | | | | | Global business operations | | | | | | | | Science / innovation | | | | | | | | Water / energy | | | | | | | | Digital / cybersecurity | | |
16ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
| | ERIC M. GREEN | | | | Committee Membership ▪
Compensation & Human Capital Management ▪
Governance Age 54 Director since 2022 Independent | | | | Reasons for Nomination Mr. Green offers the Board global operational experience and extensive knowledge of the healthcare and life sciences industries. With nearly 30 years of experience leading global pharma services and life science companies, Mr. Green has a deep understanding of business operations in these industries. His knowledge contributes to the Board’s oversight of risk in the highly regulated life sciences business and also offers insight into the business’ strategic opportunities. His perspective on compensation and talent management in a technical and competitive market also contributes to the Board’s oversight of Ecolab’s talent management and succession planning. Mr. Green also provides relevant knowledge and insight into business practices within a global manufacturing and distribution environment. | | | | Career Highlights West Pharmaceutical Services, Inc., a manufacturer of packaging components and delivery systems for injectable drugs and healthcare products ▪
Chairman (2022-present) ▪
President and Chief Executive Officer (2015-present) Sigma-Aldrich Corporation ▪
Executive Vice President and President for the Research Markets business unit (2013-2015) ▪
Served in multiple regional, commercial, and operational leadership roles around the world during a 20-year career Education ▪
Bachelor’s degree in chemistry from Bethel University in St. Paul, Minnesota ▪
Master of Business Administration from the Olin Business School-Washington University in St. Louis, Missouri Other Directorships — Current ▪
West Pharmaceutical Services, Inc. (2015-present) Other Directorships — Past 5 Years ▪
None | | | | Key Skills | | | | | | | | CEO experience | | | | | | | | Industry experience | | | | | | | | Global business operations | | | | | | | | Human capital management | | | | | | | | Supply chain and manufacturing | | |
| | ARTHUR J. HIGGINS | | | | Committee Membership ▪
Compensation & Human Capital Management ▪
Safety, Health & Environment Age 68 Director since 2010 Independent | | | | Reasons for Nomination Mr. Higgins brings to the Board extensive leadership experience and enterprise risk management in the healthcare and life sciences industries. Through leadership positions with large life sciences developers and manufacturers in both the United States and Europe, Mr. Higgins has gained deep knowledge of the life sciences and healthcare businesses and the strategies for developing and marketing products in these highly regulated industries. This background allows him to provide valuable insight to Ecolab’s life sciences business, including quality and operating risk management, and expertise related to complex chemical manufacturing environments. In addition, his global perspective from years of operating global businesses and his background in working with high growth companies informs Ecolab’s ambitions for sustainable growth. | | | | Career Highlights Abu Dhabi Investment Authority (“ADIA”), a sovereign globally-diversified wealth fund of the Government of the Emirate of Abu Dhabi ▪
Operating Advisor (2021-present) The Blackstone Group, an investment management company ▪
Consultant to Blackstone Healthcare Partners (2010-2021) Assertio Holdings, Inc., successor issuer to Assertio Therapeutics, Inc. ▪
Non-Executive Chairman (2020-2020) Assertio Therapeutics, Inc., a pharmaceutical company ▪
President, Chief Executive Officer and member of the Board of Directors (2017-2020) Bayer HealthCare AG ▪
Chairman of the Board of Management (2006-2010) ▪
Chairman of the Bayer HealthCare Executive Committee (2004-2010) Enzon Pharmaceuticals, Inc. ▪
Chairman, President and Chief Executive Officer (2001-2004) Abbott Laboratories ▪
Spent 14 years, most recently as President of the Pharmaceutical Products Division (1998-2001) Education ▪
BS, Biochemistry, Strathclyde University, Scotland Other Directorships — Current ▪
Zimmer Biomet Holdings, Inc. (2007-present) Other Directorships — Past 5 Years ▪
Assertio Holdings, Inc. (2017-2020) | | | | Key Skills | | | | | | | | CEO experience | | | | | | | | Industry experience | | | | | | | | Global business operations | | | | | | | | Human capital management | | | | | | | | M&A | | |
ECOLAB PROXY STATEMENT 2024 17
Corporate Governance and Board Matters
| | MICHAEL LARSON | | | | Committee Membership ▪
Finance (Chair) ▪
Safety, Health & Environment Age 64 Director since 2012 Independent | | | | Reasons for Nomination Mr. Larson has deep investment expertise and broad understanding of the capital markets, business cycles and capital efficiency, and allocation practices. As a professional investor and as the chief investment officer of Ecolab’s largest stockholder, Mr. Larson provides the Board with a long-term stockholder perspective and more than three decades of investment acumen. Together with his years of service as a public company board member, Mr. Larson’s experience as a long-term investor in several multi-national industrial companies has given him deep corporate governance expertise and a well-informed view on the unique strategic issues faced by companies such as Ecolab. His background offers the Board important insights into capital allocation, Ecolab’s financial risks and opportunities, the financial issues facing large industrial corporations. Throughout his career, Mr. Larson has gained extensive experience related to advancing corporate sustainability and employee safety initiatives. | | | | Career Highlights Cascade Investment, L.L.C., the investment office for William H. Gates III, and the Bill & Melinda Gates Foundation Trust ▪
Chief Investment Officer, responsible for Mr. Gates’ non-Microsoft investments, as well as the investment assets of the Bill & Melinda Gates Foundation Trust (1994-present) Education ▪
BA, Economics, Claremont McKenna College ▪
MBA, University of Chicago Other Directorships — Current ▪
Fomento Económico Mexicano, S.A.B. de C.V. (2011-present) ▪
Republic Services, Inc. (2009-present) ▪
Member and Trustee of several Western Asset Management closed-end and mutual funds (2004-present) Other Directorships — Past 5 Years ▪
None | | | | Key Skills | | | | | | | | Industry experience | | | | | | | | Accounting / financial expertise | | | | | | | | Human capital management | | | | | | | | Public company corporate governance | | | | | | | | M&A | | |
| | DAVID W. MACLENNAN | | | | Committee Membership ▪
Audit ▪
Governance (Chair) Age 64 Director since 2015 Independent | Lead Independent Director | | | | Reasons for Nomination Mr. MacLennan’s experience in various top leadership positions at Cargill, one of the world’s largest multinational companies, enables him to contribute invaluable strategic insights, exercise strong risk and financial management skills, and provide significant strategic planning insights to the Board. His background guiding a large, complex, global organization in the role of CEO and Chairman of the board at Cargill, as well as his service as a director on the Caterpillar board, provides a wealth of corporate governance expertise relevant to his role as the Lead Independent Director and Chair of the Governance Committee. In addition, his deep knowledge of the food production industry is valuable to the Board in assessing strategic business opportunities and addressing global supply chain risks. | | | | Career Highlights Cargill, Incorporated, a privately held company and world-leading producer and marketer of food, agricultural, financial, and industrial products and services ▪
Executive Chair of the Board (2023) ▪
Chairman of the Board (2015-2022) ▪
Chief Executive Officer (2013-2022) ▪
Chief Operating Officer (2011-2013) ▪
Chief Financial Officer (2008-2011) ▪
President, Cargill Energy (2002-2008) ▪
Served in the Financial Markets Division in the Minneapolis and London offices (1991-2000) USBancorp Piper Jaffray ▪
President of Fixed Income Capital Markets, based in Minneapolis (2000-2002) Chicago Board of Trade and Board of Options Exchange ▪
Member, in the futures and securities sector in Chicago Education ▪
BA. English, Amherst College ▪
MBA, Finance, University of Chicago Other Directorships — Current ▪
Caterpillar (2021-present) Other Directorships — Past 5 Years ▪
None | | | | Key Skills | | | | | | | | CEO experience | | | | | | | | Industry experience | | | | | | | | Global business operations | | | | | | | | Accounting / financial expertise | | | | | | | | Supply chain and manufacturing | | |
18ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
| | TRACY B. MCKIBBEN | | | | Committee Membership ▪
Audit ▪
Finance Age 54 Director since 2015 Independent | | | | Reasons for Nomination Ms. McKibben is an international energy and environmental technology expert with a focus on the areas of alternative and renewable energy, green technology, water, infrastructure, and sustainability management. Ms. McKibben’s considerable strategic and financial experience advising energy companies and multinational corporations on strategic investments, M&A, and energy policy helps the Board set Ecolab’s financial strategy and provide financial oversight. She also offers her insight into driving financial performance through successful human capital and compensation strategies. Ms. McKibben also has gained extensive public sector and international experience working at the U.S. Department of Commerce and within the National Security Council at The White House where she advised the President of the United States, Cabinet Secretaries and other senior officials on various matters. This experience provides the Board with insights to address the challenges associated with Ecolab’s global business operations. | | | | Career Highlights MAC Energy Advisors LLC, an investment and consulting company that provides integrated energy solutions to help clients with investments and strategic opportunities around a global platform ▪
Founder and Chief Executive Officer (2010-present) Citigroup Global Markets ▪
Managing Director and Head of Environmental Banking Strategy (2007-2009) National Security Council at the White House ▪
Director of European Economic Affairs and EU Relations and Acting Senior Director for European Affairs (2003-2007) U.S. Department of Commerce ▪
Served in various senior advisory roles (2001-2003) Education ▪
BA, Political Science, West Virginia State University ▪
JD, Harvard Law School Other Directorships — Current ▪
Huntington Ingalls Industries, Inc. (2018-present) Other Directorships — Past 5 Years ▪
Fast Radius, Inc., formerly ECP Environmental Growth Opportunities Corp. (2021-2022) | | | | Key Skills | | | | | | | | Global business operations | | | | | | | | Science / innovation | | | | | | | | Accounting / financial expertise | | | | | | | | Water / energy | | | | | | | | M&A | | |
| | LIONEL L. NOWELL III | | | | Committee Membership ▪
Audit (Chair) ▪
Finance Age 69 Director since 2018 Independent | | | | Reasons for Nomination Mr. Nowell is a highly experienced board member, with extensive financial expertise. Mr. Nowell provides the Board with operational and financial management acumen gathered from more than 30 years in the consumer products industry, including his service as the Senior Vice President and Treasurer of a multi-national food and beverage company. His technical expertise spans the topics of corporate finance, credit and treasury, financial analysis and reporting, accounting and controls, capital markets, acquisitions / divestitures, and international business operations. Mr. Nowell contributes to the Board strong leadership skills gained over the course of his career. His experience over the years on various public company boards contributes strong governance skills and extensive knowledge in the areas of financial controls, strategy development and execution, and risk management. | | | | Career Highlights PepsiCo, Inc., a food and beverage company ▪
Senior Vice President and Treasurer (2001-2009) ▪
Executive Vice President and Chief Financial Officer, The Pepsi Bottling Group (2000-2001) ▪
Senior Vice President and Controller (1999-2000) RJR Nabisco, Inc. ▪
Senior Vice President, Strategy and Business Development (1998-1999) Diageo plc ▪
Held various senior financial roles at the Pillsbury division, including Chief Financial Officer of its Pillsbury North America, Pillsbury Foodservice, and Häagen-Dazs divisions (1991-1998) Education ▪
BSBA, Finance/Accounting, The Ohio State University Other Directorships — Current ▪
Bank of America Corporation (2013-present) ▪
Textron Inc. (2020-present) Other Directorships — Past 5 Years ▪
American Electric Power Company (2004-2020) | | | | Key Skills | | | | | | | | Global business operations | | | | | | | | Accounting / financial expertise | | | | | | | | Water / energy | | | | | | | | Public company corporate governance | | | | | | | | M&A | | |
ECOLAB PROXY STATEMENT 2024 19
Corporate Governance and Board Matters
| | VICTORIA J. REICH | | | | Committee Membership ▪
Audit ▪
Governance Age 66 Director since 2009 Independent | | | | Reasons for Nomination With her extensive financial management background combined with her global operating experience, Ms. Reich helps inform Ecolab’s strategic vision, while providing sound financial discipline and risk management expertise. Ms. Reich’s financial and accounting expertise provides valuable insights to the Board regarding the Company’s financial operations. Her experience on other public company boards offers a broad perspective on financial and governance matters relevant to public companies and deepens her expertise in these areas. Ms. Reich’s executive role at Essendant also provided her with knowledge of the institutional markets, one of our largest end-markets. | | | | Career Highlights Essendant Inc. (formerly United Stationers Inc.) ▪
Senior Vice President and Chief Financial Officer (2007-2011) Brunswick Corporation ▪
President — Brunswick European Group (2003-2006) ▪
Senior Vice President and Chief Financial Officer (2000-2003) ▪
Vice President and Controller (1996-2000) General Electric Company ▪
Held various senior financial management positions (1979-1996) Education ▪
ScB, Applied Mathematics — Economics, Brown University Other Directorships — Current ▪
Ingredion Incorporated (2013-present) ▪
H&R Block, Inc. (2011-present) Other Directorships — Past 5 Years ▪
None | | | | Key Skills | | | | | | | | Industry experience | | | | | | | | Global business operations | | | | | | | | Accounting / financial expertise | | | | | | | | Public company / corporate governance | | | | | | | | M&A | | |
| | SUZANNE M. VAUTRINOT | | | | Committee Membership ▪
Audit ▪
Safety, Health & Environment (Chair) Age 64 Director since 2014 Independent | | | | Reasons for Nomination Major General Vautrinot brings a unique perspective to the Board with her 31-year military career. Having led large and complex organizations, she provides insights into the operational challenges facing large global organizations. As an expert in cybersecurity, she contributes to the Board’s oversight of risk in this area. In addition, General Vautrinot has significant experience in strategic planning, organizational design, and change management, which allows her to provide advice and insight to Ecolab as its business grows and develops. This focus is also relevant to her role as Chair of the Safety, Health & Environment Committee, which provides oversight and strategy for many of Ecolab’s global safety and sustainability programs, which impact all aspects of the global business. Her experience on the corporate boards of multiple public companies also enhances her contributions in the areas of governance, strategy and risk, and opportunity assessment. | | | | Career Highlights Kilovolt Consulting, Inc., a cyber security consulting firm ▪
President (2013-present) U.S. Air Force ▪
Retired Major General, Air Force (2013) ▪
Commander, 24th Air Force and Commander, Air Forces Cyber, responsible for cyber defense operations (2011-2013) ▪
Director of Plans and Policy, U.S. Cyber Command, Special Assistant to the Vice Chief of Staff — U.S. Air Force (2010-2011) Commander USAF Recruiting Service (2006-2008) ▪
Assignments included space and cyber operations, plans and policy and strategic security ▪
Served on the Joint Staff, the staffs at major command headquarters, and Air Force headquarters ▪
Selected by military leaders and White House officials to spearhead high-profile engagements on multiple occasions Education ▪
BS, U.S. Air Force Academy ▪
MS, University of Southern California ▪
National Security Fellow, John F. Kennedy School of Government, Harvard University Other Directorships — Current ▪
CSX Corporation (2019-present) ▪
Wells Fargo & Company (2015-present) ▪
Parsons Corporation (2014-present) Other Directorships — Past 5 Years ▪
Gen Digital, Inc., formerly Symantec Corporation (2013-2019) | | | | Key Skills | | | | | | | | Science / innovation | | | | | | | | Human capital management | | | | | | | | Water / energy | | | | | | | | Digital / cybersecurity | | | | | | | | Public company corporate governance | | |
20ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
| | JOHN J. ZILLMER | | | | Committee Membership ▪
Compensation & Human Capital Management ▪
Finance Age 68 Director since 2006 Independent | | | | Reasons for Nomination Mr. Zillmer has long and proven leadership and operational experience in one of Ecolab’s largest markets. Mr. Zillmer has extensive experience leading companies as a seasoned CEO and director, bringing to the Board his wealth of experience in setting and executing on corporate strategy and overseeing risk. He has served as CEO of three different global companies, providing a varied and deep perspective on executive management of global organizations. Mr. Zillmer has significant operational knowledge of industries key to Ecolab’s business operations, including the chemicals manufacturing industry, food service industry, and global hygiene industry. He has proven capabilities for leading companies with large workforces and managing talent. His current and past roles on the boards of CSX, Veritiv, Performance Food Group, Reynolds American, Univar, and Allied Waste have provided him with significant public company board governance skills and broad leadership perspective. | | | | Career Highlights Aramark, a global provider of food, facilities management, and uniform services ▪
Chief Executive Officer (October 2019-present) ▪
Held various senior executive positions, ultimately becoming President of Global Food and Support Services (1986-2005) Univar Inc. ▪
Executive Chairman (2012) ▪
President and Chief Executive Officer (2009-2012) Allied Waste Industries ▪
Chairman and Chief Executive Officer (2005-2008, when it merged with Republic Services, Inc.) Education ▪
MBA, Northwestern University’s Kellogg School of Management Other Directorships — Current ▪
Aramark (2019-present) ▪
CSX Corporation (2017-present) Other Directorships — Past 5 Years ▪
Veritiv Corporation (2014-2020) ▪
Performance Food Group Company (2015-2019) | | | | Key Skills | | | | | | | | CEO experience | | | | | | | | Industry experience | | | | | | | | Human capital management | | | | | | | | Public company corporate governance | | | | | | | | M&A | | |
| | | | | The Board of Directors recommends a vote FOR the election of each of the 12 nominees named in this Proxy Statement to a one-year term ending in 2025. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FOR each of the 12 nominees named in this Proxy Statement. | |
ECOLAB PROXY STATEMENT 2024 21
Corporate Governance and Board Matters
CORPORATE GOVERNANCE OVERVIEW Our Board of Independent Registered Public Accounting Firm –Directors and our senior leadership team believe that strong and effective corporate governance is essential to our overall success. The affirmative voteBoard is committed to maintaining a corporate governance structure that promotes long-term stockholder value and supports Ecolab’s policies and programs that affect, or could affect, our employees, customers, stockholders, and neighboring communities. Our Board reviews our major governance policies, practices and processes regularly in the context of current corporate governance trends, investor feedback, regulatory changes and recognized best practices. The following table provides an overview of our corporate governance structure and processes, including key aspects of our Board operations. | | CORPORATE GOVERNANCE BEST PRACTICES | | | | BOARD CONDUCT & OVERSIGHT | | | | INDEPENDENCE & PARTICIPATION | | | | STOCKHOLDER RIGHTS | | | | | | | Regular engagement with management on business strategy and approval of annual strategic plan | | | | | | | 11 of 12 director nominees are independent based on New York Stock Exchange (“NYSE”) standards | | | | | | | Proxy access on market terms | | | | | | | Corporate governance policies addressing retirement age | | | | | | | Executive sessions of independent directors held at each Board and committee meeting | | | | | | | Stockholder ability to request special meetings at 25% threshold | | | | | | | Recently refreshed Code of Conduct that applies to all directors, executive officers, and employees | | | | | | | Lead director with robust duties | | | | | | | Stockholders can act by written consent | | | | | | | Periodic review of corporate governance best practices and developments | | | | | | | Directors attended over 98% of the meetings of the Board and the committees on which they served | | | | | | | Majority voting in uncontested director elections with a director resignation policy | | | | | | | Significant time devoted to succession planning and leadership development | | | | | | | Regular Board refreshment and mix of tenure of our directors (4 of the current independent directors elected in the last 5 years) | | | | | | | No “poison pill” | | | | | | | Annual Board and committee evaluations | | | | | | | Periodic refreshment of committee chairs and Lead Director | | | | | | | The Certificate and Bylaws do not include supermajority voting requirements to amend | | | | | | | Adopted policies to encourage diversity in director searches | | | | | | | All Committee Chairs are independent | | | | | | | Directors elected annually | | | | | | | | | | | | | | Our directors are encouraged to participate in educational programs relating to corporate governance and business-related issues, and we provide funding for these activities | | | | | | | | |
More details are available in our Corporate Governance Principles, which can be found on our website at www.investor.ecolab.com/
corporate-governance. DIRECTOR INDEPENDENCE Our Corporate Governance Principles provide that the Board will have a majority of independent directors who meet the total votes cast by holders of shares present in person or represented by proxy atcriteria required for independence under the Annual MeetingNYSE listing standards and entitled to vote will constitute ratification ofour Director Independence Standards. To be considered independent, the appointment of PricewaterhouseCoopers LLP. UnlessBoard must determine that a contrary choice is specified, proxies solicited by ourdirector has no material relationship with the Company (including its consolidated subsidiaries). Under these standards, the Board of Directors will be voted FOR ratificationhas affirmatively determined that each of the appointment of PricewaterhouseCoopers LLP.Proposal 3: Advisory Vote to Approve the Compensation of Executives Disclosed in this Proxy Statement –our non-management director nominees are independent. The affirmative vote of a majority of the total votes cast by holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote will constitute approval of the compensation of executives disclosed in this Proxy Statement. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FOR approvalalso previously affirmatively determined that Barbara J. Beck, who is not standing for re-election, is independent and that Jeffrey M. Ettinger, who resigned from the Board effective May 23, 2023, was independent during the time that he served as a director.
The Board determined that Christophe Beck is not independent due to his current status as Chairman and Chief Executive Officer and his former status as President and Chief Operating Officer. The Board also determined that each member of the compensation of executives disclosed in this Proxy Statement.Proposal 4: Stockholder Proposal RegardingAudit Committee and the Threshold to Call Special Stockholder Meetings – For this proposal, which callsCompensation & Human Capital Management Committee meets the heightened independence standards required for a non-binding vote regardingsuch committee members under the threshold to call special stockholder meetings, the affirmative vote of a majority of the total votes cast by holders of shares present in person or represented by proxy at the Annual Meetingapplicable NYSE listing and entitled to vote will constitute approval of the proposal, if properly presented at the meeting. Unless a contrary choice is specified, proxies solicited by ourSecurities and Exchange Commission (“SEC”) standards.
22ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
BOARD LEADERSHIP STRUCTURE | | | | | CHRISTOPHE BECK | | | | | | DAVID W. MACLENNAN | | | | Chairman of the Board of Directors and Chief Executive Officer | | | Lead Independent Director | |
Our Board of Directors willis led by Christophe Beck, our Chief Executive Officer and a member of the Board of Directors. The Board of Directors strongly believes that independent board oversight is vital. As a result, under our corporate governance framework, our Lead Independent Director and independent directors have strong oversight of management and the Company’s governance. As provided in our Corporate Governance Principles, the independent directors appoint a Lead Independent Director when (i) the offices of Chairman and Chief Executive Officer are held by the same person or (ii) when the Chairman is a different person than the Chief Executive Officer, but the Chairman has been determined by the Board of Directors not to be voted AGAINSTindependent. Responsibilities and powers of the proposal.Discretionary Voting – WeLead Independent Director, as enumerated in our Corporate Governance Principles, include:
▪
calling meetings of the independent directors ▪
presiding over meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors, which occur at every regularly scheduled meeting of the Board ▪
acting as a liaison between the Chairman and the independent directors ▪
reviewing and approving meeting schedules to ensure there is sufficient time for discussion of all agenda items ▪
reviewing and approving information sent to the directors ▪
reviewing and approving meeting agendas and management participants at meetings of the Board ▪
engaging with stockholders in appropriate circumstances. As stated in our Corporate Governance Principles, the Board believes it is in the best interests of our stockholders to have a flexible policy relating to the offices of Chairman and Chief Executive Officer and whether they are not currently awareto be held by one person or two. Our Board evaluates its organizational structure every year, including its leadership. The Governance Committee leads this process, taking into account the results of the Board’s review of its own effectiveness, the performance and commitments of the Chairman and Lead Independent Director, and the current needs of the Board in overseeing the strategy and risks of the Company. Mr. Beck was first appointed as Chairman in May 2022 and Mr. MacLennan was first elected as Lead Independent Director in May 2023. The Board continues to believe that at this time, combining our CEO and chairman offices under Mr. Beck, while maintaining the important role of the Lead Independent Director, is the most appropriate leadership structure for the Company and best serves the interests of our stockholders. In making this determination, the Board considered numerous factors, including: ▪
the benefits to the decision-making process with a leader who is both Chairman and Chief Executive Officer ▪
the significant operating experience and qualifications of Mr. Beck, including 17 years at Ecolab where he held leadership roles within the Industrial, International, and Institutional businesses ▪
the importance of deep Ecolab knowledge in exercising business judgment in leading the Board ▪
the size and complexity of our business ▪
the significant business experience and tenure of our independent directors ▪
the qualifications and role of our Lead Independent Director. EXECUTIVE SESSIONS The independent directors meet privately at every meeting of the Board and at each Committee of the Board. The independent directors also meet in executive session at other times during Board meetings at the request of any other business to be acted upon at our Annual Meeting. If, however, other matters are properly brought beforeindependent director. ECOLAB PROXY STATEMENT 2024 23
Corporate Governance and Board Matters
BOARD COMMITTEES The Board of Directors has five standing Committees: | | | | | | | | | | | | | | | | | | | | | | AUDIT
COMMITTEE | | | | COMPENSATION & HUMAN
CAPITAL MANAGEMENT
COMMITTEE | | | | FINANCE
COMMITTEE | | | | GOVERNANCE
COMMITTEE | | | | SAFETY, HEALTH &
ENVIRONMENT
COMMITTEE | |
The table below indicates the Annual Meeting, or any adjournment or postponementcurrent members of each Board committee. | | | | | | | | | | | | | | | | ECOLAB COMMITTEE MEMBERSHIP | | | | NAME | | | | INDEPENDENT | | | | AUDIT | | | | COMPENSATION &
HUMAN CAPITAL
MANAGEMENT | | | | FINANCE | | | | GOVERNANCE | | | | SAFETY,
HEALTH &
ENVIRONMENT | | | | Judson B. Althoff | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Shari L. Ballard | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Barbara J. Beck | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Christophe Beck ![[MISSING IMAGE: ic_chairman-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_chairman-pn.gif) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Eric M. Green | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Arthur J. Higgins | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael Larson | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David W. MacLennan ![[MISSING IMAGE: ic_independent-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_independent-pn.gif) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Tracy B. McKibben | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lionel L. Nowell III | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Victoria J. Reich | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Suzanne M. Vautrinot | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | John J. Zillmer | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Chairman of the Board of Directors | | | | | | Lead Independent Director | | | | | | Committee Chair | | | | | | Committee Member | | | | | | Audit Committee Financial Expert | |
24ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
| | ![[MISSING IMAGE: ic_auditcommittee-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_auditcommittee-pn.gif) AUDIT COMMITTEE | | | | 6 MEETINGS IN 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lionel L. Nowell III
(Chair)![[MISSING IMAGE: ic_financialexpert-ko.gif]](/files/DEF 14A/0001104659-24-035047/ic_financialexpert-ko.gif) | | | | Judson B. Althoff | | | | Shari L. Ballard | | | | David W.
MacLennan ![[MISSING IMAGE: ic_financialexpert-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_financialexpert-pn.gif) | | | | Tracy B.
McKibben | | | | Victoria J.
Reich | | | | Suzanne M.
Vautrinot | | | | ![[MISSING IMAGE: ic_checkmark-ko.gif]](/files/DEF 14A/0001104659-24-035047/ic_checkmark-ko.gif) ALL MEMBERS OF THE AUDIT COMMITTEE ARE INDEPENDENT | |
| | Independence and Financial Expertise ▪
The Board of Directors has determined that each member of the Audit Committee is “independent” under applicable NYSE and SEC requirements and is “financially literate” under applicable NYSE requirements. ▪
Further, the Board has determined that each of Mses. McKibben and Reich and Messrs. MacLennan and Nowell is an “audit committee financial expert” under the SEC’s rules. Report ▪
The Audit Committee Report begins on page 80 of this Proxy Statement. Charter ▪
The Audit Committee Charter is available on our website at www.investor.ecolab.com/corporate-governance. | | | | Principal Oversight Responsibilities ▪
Monitor the quality and integrity of our consolidated financial statements and management’s financial control of operations. ▪
Monitor, review and, as applicable, approve the qualifications, independence, and performance of the independent accountants. ▪
Monitor the role and performance of the internal audit function. ▪
Monitor the Company’s compliance with legal and regulatory requirements. ▪
Monitor the Company’s cybersecurity program and related risks. | |
| | ![[MISSING IMAGE: ic_compensation-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_compensation-pn.gif) COMPENSATION & HUMAN CAPITAL MANAGEMENT COMMITTEE | | | | 5 MEETINGS IN 2023 | | | | | | | | | | | | | | | | | | | | Barbara J. Beck
(Chair) | | | | Eric M. Green | | | | Arthur J. Higgins | | | | John J. Zillmer | | | | ALL MEMBERS OF THE COMPENSATION & HUMAN CAPITAL MANAGEMENT COMMITTEE ARE INDEPENDENT | |
| | Independence ▪
The Board of Directors has determined that each member of the Compensation Committee is “independent” under applicable NYSE and SEC rules. Report ▪
The Compensation & Human Capital Management Committee Report begins on page 39 of this Proxy Statement. Charter ▪
The Compensation & Human Capital Management Committee Charter is available on our website at www.investor.ecolab.com/corporate-governance. | | | | Principal Oversight Responsibilities ▪
Review and approve or recommend to the Board, as applicable, the establishment, amendment, and administration of compensation plans, benefit plans and long-term incentives for directors and executive officers (including the CEO). ▪
Review and approve our overall compensation policy and annual executive salary plan, including CEO compensation. ▪
Administer: ▪
the Director stock option and deferred compensation plans, ▪
executive and employee stock incentive plans, ▪
stock purchase plans, ▪
cash incentive programs, ▪
compensation recovery policies, and ▪
stock retention and ownership guidelines. ▪
Review pay equity and wage level information, strategies and policies related to human capital management and material employment law matters. | |
ECOLAB PROXY STATEMENT 2024 25
Corporate Governance and Board Matters
| | ![[MISSING IMAGE: ic_netsales-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_netsales-pn.gif) FINANCE COMMITTEE | | | | 5 MEETINGS IN 2023 | | | | | | | | | | | | | | | | | | | | | | | | Michael Larson
(Chair) | | | | Judson B. Althoff | | | | Tracy B. McKibben | | | | Lionel L. Nowell III | | | | John J. Zillmer | | | | ALL MEMBERS OF THE FINANCE COMMITTEE ARE INDEPENDENT | |
| | Independence ▪
The Board of Directors has determined that each member of the Finance Committee is “independent” under applicable NYSE rules. Charter ▪
The Finance Committee Charter is available on our website at www.investor.ecolab.com/corporate-governance. | | | | Principal Oversight Responsibilities ▪
Review management’s financial and tax policies and standards. ▪
Review and recommend to the Board regarding financing requirements, including the evaluation of management’s proposals concerning funding to meet such requirements. ▪
Review and recommend to the Board management’s proposals regarding share repurchases and dividends. ▪
Review capital expenditure budget. ▪
Review adequacy of insurance coverage. ▪
Review use of derivatives to limit financial risk. ▪
Review and recommend to the Board regarding specific acquisition, divestiture, and capital expenditure projects from a financial standpoint. ▪
Review financial impact of our significant retirement plans. | |
| | ![[MISSING IMAGE: ic_corporate-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_corporate-pn.gif) GOVERNANCE COMMITTEE | | | | 6 MEETINGS IN 2023 | | | | | | | | | | | | | | | | | | | | David W. MacLennan
(Chair) | | | | Barbara J. Beck | | | | Eric M. Green | | | | Victoria J. Reich | | | | ALL MEMBERS OF THE GOVERNANCE COMMITTEE ARE INDEPENDENT | |
| | Independence ▪
The Board of Directors has determined that each member of the Governance Committee is “independent” under applicable NYSE rules. Charter ▪
The Governance Committee Charter is available on our website at www.investor.ecolab.com/corporate-governance. | | | | Principal Oversight Responsibilities ▪
Lead annual review of Board performance and effectiveness. ▪
Review organizational structure and operations of the Board. ▪
Review issues related to senior management succession. ▪
Lead the annual CEO performance review and evaluation of senior management. ▪
Review the Company’s corporate governance documents and related matters (including any necessary modifications to the Corporate Governance Principles). ▪
Review and recommend to the Board of Directors director independence determinations and evaluate related party transactions. ▪
Oversee political, charitable, and foundation contributions as well as trade association memberships. ▪
Review director orientation, training, and continuing education. | |
26ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
| | ![[MISSING IMAGE: ic_health-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_health-pn.gif) SAFETY, HEALTH & ENVIRONMENT COMMITTEE | | | | 4 MEETINGS IN 2023 | | | | | | | | | | | | | | | | | | | | | | | | Suzanne M. Vautrinot
(Chair) | | | | Shari L. Ballard | | | | Christophe Beck | | | | Arthur J. Higgins | | | | Michael Larson | | | | ALL MEMBERS OF THE SAFETY, HEALTH & ENVIRONMENT COMMITTEE ARE INDEPENDENT, EXCEPT MR. BECK | |
| | Independence ▪
The Board of Directors has determined that each member of the Safety, Health & Environment Committee is “independent” under applicable NYSE rules except for Mr. Beck, our Chairman and Chief Executive Officer. Charter ▪
The Safety, Health & Environment Committee Charter is available on our website at www.investor.ecolab.com/corporate-governance. | | | | Principal Oversight Responsibilities ▪
Oversee the Company’s safety, health & environmental (“SH&E”) framework and organization, policies, programs, goals and practices, including SH&E risks, SH&E statistics and metrics, pending SH&E matters and industry best practices. ▪
Review personal safety policies, programs and practices. ▪
Review manufacturing process and safety policies, programs and practices, including our waste management strategies and the number of our sites located in or adjacent to protected areas and/or key biodiversity areas. ▪
Review environmental and regulatory trends, issues, and concerns which affect or could affect our SH&E practices, including: ▪
the food safety impact of our products and programs, ▪
the human health impact of our products and services and our product safety practices, and ▪
any material product liability risks. ▪
Review compliance with our stated sustainability principles as represented in our sustainability reports, including overall climate risks and progress toward the UN Global Compact Business Ambition for 1.5℃ and actions to implement the recommendations of the Task Force on Climate-related Financial Disclosure or similar bodies. | |
ECOLAB PROXY STATEMENT 2024 27
Corporate Governance and Board Matters
BOARD’S ROLE IN RISK OVERSIGHT | | Oversight of Risk Management | |
| | THE COMPANY BELIEVES THAT ITS LEADERSHIP STRUCTURE, DISCUSSED BELOW, SUPPORTS THE
RISK OVERSIGHT FUNCTION OF THE BOARD | | | | | | | Our Lead Independent Director has robust and clearly defined role pursuant to our Corporate Governance Principles | | | | | | | Independent directors chair the Board committees involved in risk oversight | | | | | | | There is open communication between management and directors | | | | | | | All directors are actively involved in the risk oversight function | |
Management is responsible for managing the Company’s risk, and the Board and its committees oversee management in this regard, as summarized below: | | | | | | ![[MISSING IMAGE: ic_board-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_board-pn.gif) BOARD OF DIRECTORS | | | | | | | | | | | | Responsible for oversight of overall risks with an emphasis on strategic and operational risks as well as oversight of management’s risk management and risk management procedures. The committees of the Board play a key role in this responsibility based on certain areas of risk that relate to each committee’s area of focus. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | AUDIT
COMMITTEE | | | | COMPENSATION & HUMAN
CAPITAL MANAGEMENT
COMMITTEE | | | | FINANCE
COMMITTEE | | | | GOVERNANCE
COMMITTEE | | | | SAFETY, HEALTH &
ENVIRONMENT
COMMITTEE | | | | Responsible for overseeing risks related to: ▪
financial matters, especially: ▪
financial reporting ▪
cybersecurity ▪
internal controls | | | | Responsible for overseeing risks related to: ▪
compensation policies and practices ▪
our human capital management practices | | | | Responsible for overseeing risks related to: ▪
our financial management ▪
capital strategies ▪
tax strategies | | | | Responsible for overseeing risks related to: ▪
our governance structure ▪
Board composition ▪
Director independence and succession | | | | Responsible for overseeing risks related to: ▪
safety, health, and environmental matters | | | | | | | | | | | | ![[MISSING IMAGE: ic_whomayvote-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_whomayvote-pn.gif) MANAGEMENT | | | | | | | | | | | | Responsible for the day-to-day management of the Company’s risks, including management of the Company’s enterprise risk management program. | | | |
28ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
| | Risk Management Processes and Procedures | |
The Board of Directors has established various processes and procedures for oversight of risk management and sustainability matters. For example, annually, as a core agenda item of the Annual Meeting, your proxy includes discretionary authorityfull Board, management presents to the Board a comprehensive and detailed risk assessment of the Company after following a rigorous enterprise risk review and analysis. ANNUAL ENTERPRISE
RISK REVIEW & ANALYSIS | | | | ANNUAL RISK
ASSESSMENT | | | | BOARD AND EXECUTIVE TEAM’S
ONGOING REVIEW | | | | ANNUAL IT SECURITY
TRAINING & COMPLIANCE | | ▪
Conducted by an audit services vice president ▪
Consists of annual enterprise Assessment of Significant Business Risks that identifies company risks, including: ▪
strategic ▪
operational ▪
financial ▪
compliance-related ▪
cybersecurity ▪
Assesses risks, their likelihood, and the potential impact of their occurrence | | | | ▪
Management presents the results to the Board ▪
Board approval is required for the Company’s annual strategic plan and major transactions | | | | ▪
Board reviews operating performance and strategic plan as appropriate ▪
Review includes significant developments, such as: ▪
acquisitions ▪
financings ▪
market developments ▪
senior management succession ▪
Independent, external third-party auditor’s findings are reviewed, relating to: ▪
National Institute of Technology Cyber Security Framework and industry standards ▪
Cybersecurity peer benchmarking ▪
periodic site security assessments | | | | ▪
Company conducts: ▪
robust program for the entire company ▪
awareness campaigns ▪
testing and business resiliency training and drills with our supply chain | |
| | Strategic Risk Oversight | |
This review consists of our annual enterprise Assessment of Significant Business Risks, which provides the foundation for assessing the materiality of issues to our business and our stockholders. This comprehensive review is conducted using a survey tool designed to identify strategic, operational, financial, and compliance-related risks to the company. Risks are documented along with the likelihood and impact of their occurrence. An audit-services vice president manages the process, and the results are presented to the Executive Management team and the Board of Directors. This process identified key risks including: ▪
strategic risk (which relates to the Company properly defining and achieving its high-level goals and mission) ▪
operating risk (which relates to the effective and efficient use of resources and pursuit of opportunities) These risks are monitored and managed by the full Board through the Board’s review of the Company’s operating performance and strategic plan. For example, at each of the Board’s regularly scheduled meetings throughout the year, management provided the Board presentations on the partCompany’s various business units as well as the Company’s performance as a whole. The Board addressed significant developments as appropriate, such as significant acquisitions, important market developments, and senior management succession. Pursuant to the Board’s established monitoring procedures, Board approval is required for the Company’s annual strategic plan which is reported on by management at each Board meeting. Similarly, significant transactions (such as acquisitions and financings) are brought to the Board for approval. | | Cybersecurity Risk Oversight | |
Information security or cybersecurity is a strategic and operating risk for many companies. Since 2014, when the Ecolab cybersecurity program was established, the Company has continuously matured our program to proactively address cybersecurity trends and risks. Senior management provides in-depth reviews of cybersecurity matters to the individuals appointedBoard directly and to vote your Common Stock or actthe Audit Committee. Cybersecurity is also considered in the detailed enterprise risk assessment presented to the Board each year. The Company has entered into, and plans to maintain, an information security risk insurance policy on those matters accordingcommercially available terms. ECOLAB PROXY STATEMENT 2024 29
Corporate Governance and Board Matters
The Company is formally assessed by an independent third party against the National Institute of Technology (“NIST”) Cyber Security Framework (“CSF”) and industry standards, including peer benchmarking. The Company also reviews information security standards and controls with its independent external auditor and conducts security assessments at key sites with external security consultants. The Company also operates an information security training and compliance program for personnel, as well as monthly awareness campaigns and testing and business resiliency training and drills with our supply chain and other key functions. For more information, refer to their best judgment, including to adjourn the Annual Meeting.Adjournments – Adjournment“Cybersecurity” section of our Annual Meeting may be made forReport on Form 10-K, at page 21.
CORPORATE GOVERNANCE PRACTICES The Company and the purposeBoard regularly review and evaluate our corporate governance practices and policies. Many of amongthese practices are set forth in our Corporate Governance Principles and Director Independence Standards, Committee Charters, and Code of Conduct. | | THESE DOCUMENTS ARE AVAILABLE ON OUR WEBSITE AT: ![[MISSING IMAGE: ic_internet-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_internet-pn.gif) www.investor.ecolab.com/corporate-governance | | | | BOARD COMMITTEE CHARTERS | | | | CORPORATE GOVERNANCE DOCUMENTS | | | | ▪
Audit Committee Charter ▪
Compensation & Human Capital Management Committee Charter ▪
Finance Committee Charter ▪
Governance Committee Charter ▪
Safety, Health & Environment Committee Charter | | | | ▪
By-Laws of Ecolab Inc. ▪
Code of Conduct ▪
Corporate Governance Principles (including Director Independence Standards) ▪
Restated Certificate of Incorporation of Ecolab Inc. ▪
Political Contribution Policy | |
BOARD AND COMMITTEE EVALUATIONS Our Board continually seeks to improve its performance. A formal evaluation of the Board and its committees is conducted on an annual basis and is led by the Governance Committee. Each committee’s results are discussed by the respective committee, and the Board reviews the results of the Board and committee evaluations. CODE OF CONDUCT Our Code of Conduct is the foundation of our success and we are committed to upholding the highest legal and ethical standards, regardless of when and where we conduct business. Our Code of Conduct applies to our Chief Executive Officer, Chief Financial Officer, and our Corporate Controller, as well as to our directors and all other things, soliciting additional proxies. Any adjournment may be madeemployees. Employees and directors receive training on the Code of Conduct annually and certify compliance. Our Code of Conduct was last updated in January 2023. We will disclose future amendments to and any waiver that applies to any of our executive officers or a member of our Board on our website within four business days following the date of any such amendment or waiver. POLITICAL CONTRIBUTIONS AND TRADE ASSOCIATIONS DISCLOSURES The Company maintains a Political Contribution Policy, which is amended from time to time by approvaltime. The Political Contribution Policy, together with other Ecolab policies and procedures, guides Ecolab’s approach to political contributions. Among other things, the Political Contribution Policy provides that a report of contributions will be posted on Ecolab’s website semi-annually and that Ecolab will report annually on its website on its adherences to the holdersPolitical Contribution Policy and related provisions in the Code of Common Stock representingConduct. The Governance Committee oversees the Political Contribution Policy, including reviewing the policy and a majorityreport of corporate political contributions annually. The Political Contribution Policy and current and archived political contributions are available at www.investor.ecolab.com/corporate-governance/political-contribution-reporting. The Company also reports on its website its significant trade association memberships. We join trade associations that we believe will benefit our business and shareholders. A management committee reviews proposed and existing significant trade association memberships at least semi-annually to assess their effectiveness and to determine if continued membership is appropriate. In addition, the votes present in person or by proxyGovernance Committee oversees significant trade association memberships and annually reviews Ecolab’s policies and practices relating to trade association memberships. More information on Ecolab’s trade association memberships is available at the Annual Meeting, whether or not a quorum exists, without further notice other than by an announcement made at the Annual Meeting. We do not currently intend to seek an adjournment of the Annual Meeting. | | 6
| ECOLAB - 2018 Proxy Statement
| | |
30ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
STOCKHOLDER ACCESS
Communications with Directors
COMMUNICATIONS WITH DIRECTORS Our stakeholders and other interested parties, including our stockholders and employees, can send substantive communications to our Board using the following methods published on our website at www.investor.ecolab.com/corporate-governance: corporate-governance/contact-the-board: | | ·
» | | to
| To correspond with the Board’s Lead Director, please complete and submit the on-line “Contactonline “Contact Lead Director” form; |
Director” form | ·
| | to
| » | | | To report potential issues regarding accounting, internal controls, and other auditing matters to the Board’s Audit Committee, please complete and submit the on-line “Contactonline “Contact Audit Committee” form; orCommittee” form | |
In addition to online communications, interested parties may direct correspondence to our Board of Directors, our Board Committees, to all independent directors as a group, or to individual directors, at our headquarters address, referenced on page 90. | ·
| | to make a stockholder recommendation for a potential candidate for nomination to the Board, please submit an e-mail to the Board’s Governance Committee, in care of our Corporate Secretary, at investor.info@ecolab.com.
|
All substantive communications regarding governance matters or potential accounting, control, compliance, or auditing irregularities are promptly relayed or brought to the attention of the Lead Director or Chair of the Audit Committee following review by our management. Communications not requiring the substantive attention of our Board, such as employment inquiries, sales solicitations, questions about our products, and other such matters, are handled directly by our management. In such instances, we respond to the communicating party on behalf of the Board. Nonetheless, our management periodically updates the Board on all of the on-lineonline communications received, whether or not our management believes they are substantive. In addition STOCKHOLDER RECOMMENDATIONS FOR DIRECTORS Stockholders wishing to on-line communications, interested parties may direct correspondence to our Board of Directors, our Board Committees or to individual directors at our headquarters address, repeated at the top of page 4 of this Proxy Statement.Future Stockholder Proposals and Director Nomination Process
Any stockholder proposal, other than thosesubmit recommendations for director nominations,candidates for consideration by the Governance Committee must comply with advance notice procedures set forthprovide the following information in Article II, Section 4writing to the attention of our By-Laws. As described in more detail below, stockholder proposals for director nominations must comply with Article II, Section 3 and Section 15 of our By-Laws. Under our By-Laws, to be in proper written form, the stockholder’s notice to our Corporate Secretary must set forth as to each matter such stockholder proposes to bring before by certified or registered mail:
▪
the Annual Meeting a brief descriptionname, address, and biography of the business desiredcandidate, and an indication of whether the candidate has expressed a willingness to be brought before serve; ▪
the Annual Meetingname, address, and the reasons for conducting such business at the Annual Meeting and, as tophone number of the stockholder givingor group of stockholders making the noticerecommendation; and any Stockholder Associated Person (i.e., any person acting in concert, directly or indirectly, with such stockholder and any person controlling, controlled by or under common control with such stockholder): (i) the name and record address of such person, (ii) the class or series and ▪
the number of shares of common stock beneficially owned by the stockholder (iii)or group of stockholders making the nominee holder for,recommendation, the length of time held, and number of, shares owned beneficially but not of record by such person, (iv) whether and the extent to which any hedging or other transaction or series of transactions has been entered into by or on behalf of, or any other agreement or arrangement has been made, the effect or intent of which is to mitigate loss to or manage risk or benefit of share price changes for, or to increase or decrease the voting power of, such person with respect to any share of stock of the Company, (v) to the extent known, the name and addressany stockholder is not a registered holder of any other stockholder supporting the proposal, (vi) a descriptionsuch securities, proof of all arrangements or understandings between or among such persons in connection with the proposal and any material interest in such proposal, and (vii) a representationownership. To be considered by the stockholder that he or she intends to appear atGovernance Committee for the 2025 Annual Meeting, to present the business. Any ownership information shalla director candidate recommendation must be supplementedreceived by the stockholder givingCorporate Secretary by January 2, 2025. The Governance Committee evaluates director candidates recommended by stockholders in the notice not later than ten (10) days after the record date for the meeting as of the record date. This summary is qualified insame way that it evaluates candidates recommended by its entirety by reference to the full text of our By-Laws, which can be found on our website at www.investor.ecolab.com/corporate-governance. If the presiding Chairperson of the Annual Meeting of Stockholders determines that business, or a nomination, was not brought before the meeting in accordance with the By-Law provisions, that business will not be transacted or the defective nomination will not be accepted. | | ECOLAB - 2018 Proxy Statement
| 7
| | |
| ·
| | Deadline for Inclusion in the Proxy Statement – All proposals,members, other than with respect to director nominees (as discussed below), to be considered by the Board for inclusion in the Proxy Statement and form of proxy for next year’s Annual Meeting of Stockholders expected to be held on May 2, 2019, must be received by the Corporate Secretary at our headquarters address, repeated at the top of page 4 of this Proxy Statement, no later than November 19, 2018.
|
| ·
| | Deadline for Consideration – Stockholder proposals not included in a Company proxy statement for an annual meeting as well as proposed stockholder nominations for the election of directors for inclusion in the Company’s proxy statement and form of proxy at an annual meeting must each comply with advance notice procedures set forth in our By-Laws in order to be properly brought before that annual meeting of stockholders. In general, written notice of a stockholder proposal or a director nomination must be received by the Corporate Secretary not less than 120 days nor more than 150 days prior to the anniversary date of the preceding annual meeting of stockholders. With regard to next year’s Annual Meeting of Stockholders, expected to be held on May 2, 2019, the written notice must be received between December 4, 2018 and January 3, 2019, inclusive.
|
| ·
| | Director Nomination Process – Our Board’s Governance Committee has, under its Charter, responsibility for director nominee functions, including review of any director nominee candidates recommended by stockholders. The Governance Committee has the following duties and authority:
|
| -
| | Review and recommend to the Board of Directors policies for the composition of the Board, including such criteria as:
|
| §
| | diversity of gender, race, ethnicity, experience, employment, background and other relevant factors of Board members;
|
| §
| | the proportion of the Board to be comprised of non-management directors;
|
| §
| | qualifications for new or continued membership on the Board, including experience, employment, background and other relevant considerations; and
|
| §
| | director retirement requirements or standards.
|
| -
| | Review any director nominee candidates recommended by stockholders.
|
| -
| | Identify, interview and evaluate director nominee candidates and have sole authority to:
|
| §
| | retain and terminate any search firm to be used to assist the Committee in identifying director candidates; and
|
| §
| | approve the search firm’s fees and other retention terms.
|
| §
| | the slate of director nominees to be presented by the Board for election at the Annual Meeting of Stockholders;
|
| §
| | the director nominees to fill vacancies on the Board; and
|
| §
| | the members of each Board Committee.
|
| | 8
| ECOLAB - 2018 Proxy Statement
| | |
| ·
| | Director Nominations – Any stockholder nomination for directors must comply with the advance notice procedures set forth in Article II, Section 3 and Section 15 of our By-Laws. Under our By-Laws, to be in proper written form, the stockholder’s notice to our Corporate Secretary must set forth as to each person whom the stockholder proposes to nominate for election as a director: (i) the name, age, business address, residence address and record address of such person, (ii) the principal occupation or employment of such person, (iii) the following information regarding such person: (A) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such person, (B) any option, warrant, convertible security, stock appreciation right, or similar derivative instrument related to any class or series of shares of the Company that is directly or indirectly owned beneficially by such person; (C) any proxy, contract, agreement, arrangement, understanding, or relationship pursuant to which such person has a right to vote any shares of any security of the Company; (D) any “short interest” in any security of the Company; (E) any rights to dividends on the shares of the Company owned beneficially by such person that are separated or separable from the underlying shares of the Company; (F) any proportionate interest in shares of the Company or derivative instruments held, directly or indirectly, by a general or limited partnership in which such person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner; and (G) any performance-related fees (other than an asset-based fee) to which such person is entitled based on any increase or decrease in the value of shares of the Company or any derivative instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such person’s immediate family sharing the same household, (iv) any information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, (v) the nominee holder for, and number of, shares owned beneficially but not of record by such person, (vi) to the extent known by the stockholder giving the notice, the name and address of any other stockholder supporting the nominee for election or reelection as a director on the date of such stockholder’s notice, (vii) a description of all arrangements or understandings between or among such persons pursuant to which the nomination(s) are to be made by the stockholder, and (viii) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice. In addition to the information required pursuant to Section 3, our By-Laws provide that the Company may require any proposed nominee to furnish such other information: (a) as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as an independent director under the rules and listing standards of the principal United States securities exchanges upon which the Common Stock of the Company is listed or traded, any applicable rules of the U.S. Securities and Exchange Commission or any publicly disclosed standards used by the Board of Directors in determining and disclosing the independence of the Company’s directors, (b) that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee, or (c) that may reasonably be requested by the Company to determine the eligibility of such nominee to serve as a director of the Company. Any ownership information shall be supplemented by the stockholder giving the notice not later than ten (10) days after the record date for the meeting as of the record date. The notice must be accompanied by a written consent of the proposed nominee to being named as a nominee and to serve as a director if elected. No person shall be eligible for election as a director of the Company unless nominated in accordance with the foregoing procedures. This summary is qualified in its entirety by reference to the full text of our By-Laws, which can be found on our website at www.investor.ecolab.com/corporate-governance.
|
| ·
| | Proxy Access – Under our By-Laws, a stockholder or a group of up to 20 stockholders owning 3% or more of the Company’s outstanding shares continuously for at least three years may nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in our By-Laws. Our proxy access by-law limits the number of stockholders that may aggregate their shares to satisfy the 3% test to 20 stockholders. For purposes of the 20 stockholder limit, certain related funds are counted as one stockholder.
|
In terms of our principles for composition of the Board, generally, and qualifications for director nominees specifically, we refer you to our Corporate Governance Principles, which can be found on our website at www.investor.ecolab.com/corporate-governance. Under these provisions, for example:
or other persons.DIRECTOR ATTENDANCE | | | ECOLAB - 2018 Proxy Statement
| 9
| | |
| ·
| | No more than three Board members will be from current management. These management members normally would be the Chief Executive Officer, the Chairman (if an employee of the Company and not the CEO) and the President (if an employee of the Company and not the CEO) but may be any other officer deemed appropriate by the Board;
|
| ·
| | It is desired that the members of the Board represent a geographical dispersion and variety of business disciplines so as to bring to the work of the Board a diversity of experience and background, with the predominance of members being chief or executive officers from different industries; and
|
| ·
| | A continuing effort is made to seek well-qualified women and minority group members for the Board, but these persons must be sought out and evaluated as individuals rather than as representatives of specific groups. The Board of Directors is committed to actively seeking out highly-qualified women and minority candidates for each search the Board undertakes. In identifying, evaluating and recommending director nominee candidates, the Committee will consider diversity of gender and ethnicity within the Board, the criteria set forth in the section above entitled “Director Nomination Process,” and such other factors as the Committee deems appropriate. The Board conducts a periodic review of its efforts to achieve such diversity among its members.
|
Other criteria relevant to service as a director of our Company are also set forth in our Corporate Governance Principles.
In recent years, the Governance Committee’s efforts in recruiting new directors have included a focus on candidates with significant organizational leadership experience, including individuals whoThere were chief executive officers or otherwise headed a large and complex organization, and on qualified candidates with experience that would round out our Board, particularly experience germane to our key end-markets, such as food, water and energy, and technical competencies, such as information technology and cybersecurity. The Committee has also sought to ensure that women and people of color were considered each time that the Committee undertook a formal search process to recruit director candidates.
All directors are encouraged to submit to the Governance Committee the name of any person deemed qualified to serve on the Board, together with information on the candidate’s qualifications. The Governance Committee screens and submits to the full Board the names and biographical information of those persons considered by the Committee to be viable candidates for election as directors. The same evaluation process and criteria are used by the Committee: (i) for recommendations for director candidates submitted by stockholders in accordance with our Restated Certificate of Incorporation and By-Laws, and (ii) for recommendations submitted by any other source, such as a director or a third-party search firm.
| | 10
| ECOLAB - 2018 Proxy Statement
| | |
SECURITY OWNERSHIP
Certain Beneficial Owners
The following table sets forth information as to entities which have reported to the Securities and Exchange Commission (“SEC”) or have advised us that they are a “beneficial owner,” as defined by the SEC’s rules and regulations, of more than 5% of our outstanding Common Stock.
| | | | | | | Title of
Class
| | Name and Address
of Beneficial Owner
| | Amount and Nature
of Beneficial
Ownership
| | Percent of
Class (1)
| Common
| | William H. Gates III
| | 32,862,318 (2)
| | 11.4% | | | One Microsoft Way
| | | | | | | Redmond, WA 98052
| | | | | Common
| | The Vanguard Group
| | 21,399,852 (3)
| | 7.4% | | | 100 Vanguard Blvd.
| | | | | | | Malvern, PA 19355
| | | | | Common
| | BlackRock, Inc.
| | 15,713,077 (4)
| | 5.4% | | | 55 East 52nd Street
| | | | | | | New York, NY 10022
| | | | |
| (1)
| | The percent of class is based on the number of voting shares outstanding as of March 6, 2018.
|
| (2)
| | This information is based on Amendment No. 5 to the Schedule 13D filed jointly with the SEC on May 7, 2012 by Cascade Investment, L.L.C., which we refer to as Cascade, William H. Gates III, whom we refer to as Mr. Gates, the Bill and Melinda Gates Foundation Trust, which we refer to as the Trust, and Melinda French Gates, whom we refer to as Mrs. Gates, and a Form 4 relating to Mr. Gates filed with the SEC on August 7, 2017. Mr. Gates reports that he has sole power to vote or direct the vote, and to dispose or to direct the disposition, of 28,495,893 shares of Ecolab Common Stock beneficially owned by Cascade, as the sole member of such entity. Additionally, Amendment No. 5 to the Schedule 13D reports that Mr. Gates and Mrs. Gates share the power to vote or direct the vote, and to dispose or to direct the disposition of, 4,366,425 shares of Ecolab Common Stock beneficially owned by the Trust, as co-trustees of such entity.
|
| (3)
| | This information is based on Amendment No. 5 to the Schedule 13G filed on February 9, 2018 by The Vanguard Group, Inc., which we refer to as Vanguard. Vanguard reports that, as of December 31, 2017, they have sole power to vote or direct the vote of 373,649 shares, shared power to vote or direct the vote of 63,754 shares, sole power to dispose or to direct the disposition of 20,974,892 shares and shared power to dispose or direct the disposition of 424,960 shares of Ecolab Common Stock.
|
| (4)
| | This information is based on Amendment No. 3 to the Schedule 13G filed on February 8, 2018 by BlackRock, Inc. (“BlackRock”). BlackRock reports that, as of December 31, 2017, they have sole power to vote or direct the vote of 13,332,859 shares, and sole power to dispose or to direct the disposition of 15,713,077 shares of Ecolab Common Stock.
|
| | ECOLAB - 2018 Proxy Statement
| 11
| | |
Executive Officers and Directors
In general, “beneficial ownership” includes those shares of our Common Stock which a director or executive officer has the power to vote or transfer, as well as stock options that are exercisable currently or within 60 days and stock underlying stock units that may be acquired within 60 days. On March 6, 2018, our current executive officers and directors beneficially owned, in the aggregate, 4,370,647 shares of Common Stock constituting approximately 1.5% of our shares outstanding. As required by SEC disclosure rules, “shares outstanding” for this purpose includes options exercisable within 60 days and stock underlying stock units that may be acquired within 60 days by such executive officers and directors. The detail of beneficial ownership is set forth in the following table.
| | | | | | | Name of Beneficial Owner | | Amount and Nature of Beneficial Ownership | | Percentage of Outstanding Shares Beneficially Owned | Named Executive Officers | | | | | | | Douglas M. Baker, Jr. (Chief Executive Officer) | | 1,896,660 | (1)(2)(4) | | * | | Daniel J. Schmechel (Chief Financial Officer) | | 332,159 | (1)(2) | | * | | Thomas W. Handley | | 388,002 | (1)(2)(4) | | * | | Christophe Beck | | 193,378 | (1)(2) | | * | | Michael A. Hickey | | 210,892 | (1)(2) | | * | | Directors | | | | | | | Barbara J. Beck | | 38,110 | (2)(3) | | * | | Leslie S. Biller | | 98,336 | (2)(3) | | * | | Carl M. Casale | | 21,986 | (2)(3) | | * | | Stephen I. Chazen | | 23,202 | (2)(3) | | * | | Jeffrey M. Ettinger | | 11,264 | (2)(3) | | * | | Arthur J. Higgins | | 40,560 | (2)(3) | | * | | Michael Larson | | 21,340 | (2)(3)(5) | | * | (5) | David W. MacLennan | | 11,939 | (2)(3)(4) | | * | | Tracy B. McKibben | | 9,301 | (2)(3) | | * | | Victoria J. Reich | | 45,072 | (2)(3) | | * | | Suzanne M. Vautrinot | | 12,517 | (2)(3) | | * | | John J. Zillmer | | 52,927 | (2)(3) | | * | | Directors and Executive Officers as a Group (26 persons) | | 4,370,647 | (4)(5) | | 1.5 | % (4)(5) |
*Indicates beneficial ownership of less than 1% of our outstanding Common Stock.
| (1)
| | Includes the following shares held by officers in the Ecolab Savings Plan and ESOP for Traditional Benefit Employees or Ecolab Savings Plan and ESOP as of the last Plan report: Mr. Baker, 10,182; Mr. Schmechel, 5,232; Mr. Handley, 1,035; Mr. Beck, 2,050; and Mr. Hickey, 7,409.
|
| (2)
| | Includes the following shares which could be purchased under Company-granted stock options within 60 days from March 6, 2018 including, in the case of retirement-eligible officers, options vesting upon retirement from the Company: Mr. Baker, 1,223,504 Mr. Schmechel, 181,743; Mr. Handley, 256,499; Mr. Beck, 164,525; Mr. Hickey, 154,805; Ms. Beck, 15,900; Mr. Biller, 34,000; Mr. Casale, 9,900; Mr. Chazen, 12,100; Mr. Ettinger, 6,500; Mr. Higgins, 24,600; Mr. Larson, 16,600; Mr. MacLennan, 5,300; Ms. McKibben, 6,900; Ms. Reich, 26,800; Ms. Vautrinot, 9,400; and Mr. Zillmer, 29,800.
|
| (3)
| | Includes the following interests in stock units under our 2001 Non-Employee Director Stock Option and Deferred Compensation Plan: Ms. Beck, 22,210; Mr. Biller, 34,792; Mr. Casale, 3,281; Mr. Chazen, 6,102; Mr. Ettinger, 4,764; Mr. Higgins, 15,960; Mr. Larson, 4,740; Mr. MacLennan, 1,704; Ms. McKibben, 2,401; Ms. Reich, 17,272; Ms. Vautrinot, 3,117; and Mr. Zillmer, 9,827. The stock units are Common Stock equivalents which may not be voted or transferred. They are included in the table because in certain circumstances they will be paid in the form of Common Stock within 60 days after a director leaves the Board.
|
| (4)
| | Beneficial ownership includes 14,385 shares held by or on behalf of family members of certain directors or executive officers; 21,901 shares of Mr. Baker, indirectly held in a foundation in which he has no economic interest but has voting authority and/or power of disposition; 145,350 shares of Mr. Baker, 46,653 shares of Mr. Handley, and 6,935 shares of Mr. MacLennan held in trusts over which they or an immediate family member have voting authority and/or power of disposition; 32,373 shares held for executive officers in Company-sponsored employee benefit plans as of the last plan reports; and 3,061,439 shares to which these persons have the right to acquire beneficial ownership within 60 days of March 6, 2018, including, in the case of retirement-eligible officers, options vesting upon retirement from the Company.
|
| (5)
| | Mr. Larson is the Business Manager of Cascade Investment, L.L.C. (“Cascade”), an entity owned by William H. Gates III, and the chief investment officer for Mr. Gates. As the Business Manager of Cascade, Mr. Larson may be deemed to have shared voting and investment power with respect to 28,495,893 shares of Ecolab Common Stock held by Cascade, and as the chief investment officer for Mr. Gates, he may be deemed to have voting and investment power with respect to 4,366,425 shares of Ecolab Common Stock held by the Bill & Melinda Gates Foundation Trust (the “Trust”). Mr. Larson disclaims beneficial ownership of any shares held by Cascade or the Trust.
|
| | 12
| ECOLAB - 2018 Proxy Statement
| | |
CORPORATE GOVERNANCE
Corporate Governance Materials and Code of Conduct
Our Company is managed under the overall direction of our Board of Directors for the benefit of all stockholders. Written materials concerning policies of our Board of Directors, corporate governance principles and corporate ethics practices, including our Code of Conduct as last amended in 2012, are available on our website at www.investor.ecolab.com/corporate-governance/code-of-conduct.
We intend to promptly disclose on our website should there be any amendments to, or waivers by the Board of Directors of, the Code of Conduct.
Board Structure
Under our Corporate Governance Principles, the preferable size of the Board is between 11 and 15 members, in order to facilitate effective discussion and decision-making, adequate staffing of Board Committees, and a desired mix of diversified experience and background. Our Board of Directors currently consists of 13 members. As described on page 23 under Proposal 1: Election of Directors, 13 nominees, if elected, will serve a one-year term ending as of the 2019 Annual Meeting expected to be held on May 2, 2019.
Board Leadership Structure
Our Board of Directors is led by Douglas M. Baker, Jr., our Chairman, who is also our Chief Executive Officer. Mr. Baker has served as our Chief Executive Officer and as a director since 2004, and he was elected Chairman in 2006.
As stated in our Corporate Governance Principles, the Board believes that it is best not to have a fixed policy on whether the offices of Chairman and Chief Executive Officer are to be held by one person or two. In May 2017, the Board determined that its current board leadership structure remains appropriate and best serves the interests of stockholders at this time. In making that annual determination, the Board considered numerous factors, including the benefits to the decision-making process with a leader who is both Chairman and Chief Executive Officer; the significant operating experience and qualifications of Mr. Baker; the importance of deep Ecolab knowledge in exercising business judgment in leading the Board; the size and complexity of our business; the significant business experience and tenure of our directors; and the qualifications and role of our Lead Director.
In accordance with our Corporate Governance Principles, the independent directors, after recommendation of the Governance Committee, appointed Jeffrey M. Ettinger as Lead Director in May 2017. Mr. Ettinger has extensive public company board experience. Mr. Ettinger also is independent and has considerable knowledge of our business. Specific responsibilities of the Lead Director, as enumerated in our Corporate Governance Principles, include:
| ·
| | presiding over meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;
|
| ·
| | acting as a liaison between the Chairman and the independent directors;
|
| ·
| | reviewing and approving information sent to the Board;
|
| ·
| | reviewing and approving meeting agendas for the Board;
|
| ·
| | reviewing and approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;
|
| ·
| | at the discretion of the Lead Director, calling meetings of the independent directors; and
|
| ·
| | if requested by significant stockholders, ensuring that he or she is available for consultation and direct communication.
|
Mr. Baker works closely with Mr. Ettinger to ensure the smooth and effective operation of the Board.
| | ECOLAB - 2018 Proxy Statement
| 13
| | |
Board’s Role in Risk Oversight
The Board of Directors, in exercising its overall responsibility to direct the business and affairs of the Company, has established various processes and procedures with respect to risk management. First, annually as a core agenda item of the full Board, management presents to the Board a comprehensive and detailed risk assessment of the Company after following a vigorous enterprise risk review and analysis. Pursuant to the risk assessment, the Company has categorized the most relevant risks as follows: strategic, operating, reporting and compliance. As part of the annual risk assessment, the Board determines whether any of the Company’s overall risk management processes or control procedures requires modification or enhancement.
Strategic risk, which relates to the Company properly defining and achieving its high-level goals and mission, and operating risk, which relates to the effective and efficient use of resources and pursuit of opportunities, are regularly monitored and managed by the full Board through the Board’s regular and consistent review of the Company’s operating performance and strategic plan. For example, at each of the Board’s five regularly scheduled meetings throughout the year, management provided the Board presentations on the Company’s various business units as well as the Company’s performance as a whole. Agenda items were included for significant developments as appropriate, for example, significant acquisitions, important market developments and senior management succession. Pursuant to the Board’s established monitoring procedures, Board approval is required for the Company’s strategic plan and annual plan which are reported on by management at each Board meeting. Similarly, significant transactions, such as acquisitions and financings, are brought to the Board for approval.
Reporting risk, which relates to the reliability of the Company’s financial reporting, and compliance risk, which relates to the Company’s compliance with applicable laws and regulations, are primarily overseen by the Audit Committee. The Audit Committee meets at least six times per year and, pursuant to its charter and core agendas, receives input directly from management as well as from the Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, regarding the Company’s financial reporting process, internal controls and public filings. The Committee also receives regular updates from the Company’s General Counsel and the Chief Compliance Officer regarding any Code of Conduct issues or legal compliance concerns and annually receives a summary of all Code of Conduct incidents during the preceding year from the Chief Compliance Officer. See “Board Committees – Audit Committee” on page 15 for further information on how the Audit Committee monitors, and assists the Board of Directors’ oversight of, reporting and compliance risks.
The Company believes that its leadership structure, discussed in detail above, supports the risk oversight function of the Board. While the Company has a combined Chairman of the Board and Chief Executive Officer, our Lead Director has substantial and clearly delineated authority pursuant to our Corporate Governance Principles, strong directors chair the various Board Committees involved in risk oversight, there is open communication between management and directors, and all directors are actively involved in the risk oversight function.
Compensation Risk Analysis
The Compensation Committee has established an annual process and criteria for assessing risk in our compensation programs and has directed management to apply that process and criteria to all compensation plans and practices that have the potential to give rise to behavior that creates risks that are reasonably likely to have a material adverse effect on the Company and to report the results to the Compensation Committee. As part of the process in 2017, the Company took the following steps to complete the assessment: (1) we agreed on a materiality framework for determining which compensation plans and practices to review; (2) we inventoried plans and practices that fell within the materiality framework; (3) we reviewed the identified plans and practices against our evaluation framework established in consultation with the Compensation Committee’s independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”); (4) we identified factors, processes or procedures in place which may mitigate any risks in identified plans and practices; and (5) the Compensation Committee reviewed the results of the analysis with FW Cook. Our risk assessment revealed that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company. In making this determination, we took into account the compensation mix for our employees as well as various risk control and mitigation features of our programs, including varied and balanced performance targets, review procedures for incentive pay calculations, appropriate incentive payout caps, the Company’s rights to cancel incentive awards for employee misconduct, discretionary authority of the Compensation Committee to reduce award pay-outs, internal controls around customer and distributor pricing and contract terms, our stock ownership guidelines, prohibition on hedging Company stock and our compensation recovery (“clawback”) policy.
| | 14
| ECOLAB - 2018 Proxy Statement
| | |
Director Attendance
There were six meetings of the Board of Directors during the year ended December 31, 2017. Each incumbent director attended at least 75% of all Board meetings and meetings held by all Committees on which he or she served. Overall attendance at Board and Committee meetings was 95%. Directors are expected, but are not required, to attend our Annual Meeting of Stockholders. All of the directors then serving who were continuing to serve following the meeting attended last year’s Annual Meeting.
Board Committees
Our By-Laws permit the Board of Directors to designate Committees, each comprised of three or more directors, to assist the Board in carrying out its duties. The Board annually reviews its Committee structure as well as the Charter and composition of each Committee and makes modifications as necessary. The Charters for the Board’s five standing Committees - Audit, Compensation, Finance, Governance and Safety, Health and Environment - were reviewed and approved by the Board in May 2017. The Charters of each of our Committees are available on our website at www.investor.ecolab.com/corporate-governance. The separately designated standing Audit Committee meets the requirements of Section 3(a)(58)(A) of the Exchange Act. The members of the Audit, Compensation and Governance Committees meet the “independence” and other requirements established by the rules and regulations of the SEC, the Internal Revenue Code of 1986, as amended (the “IRS Code”), the New York Stock Exchange and our Board, as applicable.
| ·
| | Audit Committee – The Audit Committee members are Mses. McKibben, Reich (Chair) and Vautrinot and Messrs. Casale and MacLennan (Vice Chair). The Committee met six times during 2017. In addition, either the full Audit Committee or the Committee Chair, as representative of the Committee (and at their election the other members of the Audit Committee), discussed the interim financial information contained in each quarterly earnings announcement for the first three calendar quarters of 2017 with our Chief Financial Officer and Controller and with our independent registered public accounting firm, prior to each of our quarterly earnings announcements. The Committee met to discuss the financial information contained in the fourth quarter and full year 2017 earnings announcement prior to dissemination of that press release and it being furnished to the SEC on a Form 8-K in February 2018. The Form 10-K for the year ended December 31, 2017, was also discussed2023. Overall attendance by all directors at meetings held by the CommitteeBoard and all Committees on which they served was over 98%. Each director attended 100% of the Board meetings and at its February 2018 meeting.
least 94% of meetings held by the Board and all Committees on which he or she served. Directors are expected to attend our Annual Meeting of Stockholders, absent unusual circumstances. All of the directors who continued to serve following the meeting attended last year’s Annual Meeting. | | | | |
COMPENSATION & HUMAN CAPITAL MANAGEMENT COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION The Committee fulfills, and assists the Board of Directors’ oversight of, its responsibilities to monitor: (i) the quality and integrity of our consolidated financial statements and management’s financial control of operations; (ii) the qualifications, independence and performance of the independent accountants; (iii) the role and performance of the internal audit function; (iv) our compliance with legal and regulatory requirements; and (v) our cybersecurity program and related risks. The Committee meets regularly and privately with our management and internal auditors and with our independent registered public accounting firm, PricewaterhouseCoopers LLP.A report of the AuditCompensation & Human Capital Management Committee is found under the heading “Audit Committee Report” at page 64.
The Boardcomprised of Directors has determined that each member of the Audit Committee is “independent” and meets the independence and other requirements of Sections 303A.02 and 303A.07(b) of the listing standards of the New York Stock Exchange, and Rule 10A-3 under the Exchange Act, as well as of our Board. The Board has determined that each of Mses. McKibben and Reichfour non-employee, independent directors: Ms. Beck (Chair) and Messrs. CasaleGreen, Higgins and MacLennan is an “audit committee financial expert” under the SEC’s rules and should be so designated. Further, the Board has determined, in its business judgment, that each of Mses. McKibben and Reich and Messrs. Casale and MacLennan has “accounting and related financial management expertise” and that each member of the Audit Committee is “financially literate” under the New York Stock Exchange’s listing standards.
| | ECOLAB - 2018 Proxy Statement
| 15
| | |
| ·
| | Compensation Committee – The Compensation Committee members are Messrs. Biller, Chazen (Vice Chair), Ettinger, Higgins and Zillmer (Chair). The Committee met five times during 2017. The principal functions of this Committee are to: (i) review and approve or recommend to the Board, as applicable, with respect to the establishment, amendment and administration of any compensation plans, benefits plans, severance arrangements and long-term incentives for directors and any executive officers (including the CEO); (ii) review and approve our overall compensation policy and annual executive salary plan, including CEO compensation; and (iii) administer our director stock option and deferred compensation plans, executive and employee stock incentive plans, stock purchase plans, cash incentive programs and stock retention and ownership guidelines. The Committee may not delegate its primary responsibilities with respect to overseeing executive officer compensation. In accordance with the terms of our 2010 Stock Incentive Plan, the Committee has delegated to the CEO (in his capacity as a director) the authority to grant long-term incentives to employees who are not officers or directors, subject to specified thresholds and applicable law. A report by the Committee is located on page 28 of this Proxy Statement.
|
To assist the Committee in the design and review of the executive and director compensation programs, the Committee has selected and retained FW Cook, an independent compensation consulting firm, which reports directly to the Committee. As requested from time to time on behalf of the Committee, FW Cook provides the Committee with market data regarding various components of executive and director compensation, reviews the methodology on which compensation is based and designed, and informs the Committee of market trends in executive and director compensation. FW Cook performs no services for us other than those performed on behalf of the Committee.
The Committee has considered the independence of FW Cook in light of SEC rules and New York Stock Exchange listing standards. In connection with this process, the Committee has reviewed, among other items, a letter from FW Cook addressing the independence of FW Cook and the members of the consulting team serving the Committee, including the following factors: (i) other services provided to us by FW Cook; (ii) fees paid by us as a percentage of FW Cook’s total revenue; (iii) policies or procedures of FW Cook that are designed to prevent conflicts of interest; (iv) any business or personal relationships between the senior advisor of the consulting team and any member of the Committee; (v) any Ecolab stock owned by the senior advisor; and (vi) any business or personal relationships between our executive officers and the senior advisor. The Committee discussed these considerations and concluded that the work performed by FW Cook and its senior advisor involved in the engagement did not raise any conflict of interest.
The Board of Directors has determined that eachZillmer. No member of the Compensation Committee meets the independence requirements of the SEC (including Rule 16b-3), the New York Stock Exchange, and Section 162(m) of the IRS Code and of our Board.
| ·
| | Finance Committee – The current Finance Committee members are Mses. McKibben and Vautrinot and Messrs. Biller (Chair), Chazen and Larson (Vice Chair). The Committee met six times during 2017. The principal functions of this Committee are to review and make recommendations to the Board concerning: (i) management’s financial and tax policies and standards; (ii) our financing requirements, including the evaluation of management’s proposals concerning funding to meet such requirements; (iii) share repurchases and dividends; (iv) our capital expenditure budget; (v) adequacy of insurance coverage; and (vi) our use of derivatives to limit financial risk. The Committee also evaluates specific acquisition, divestiture and capital expenditure projects from a financial standpoint and reviews the financial impact of our significant retirement plans.
|
| ·
| | Governance Committee – The Governance Committee members are Ms. Beck and Messrs. Casale (Vice Chair), Ettinger (Chair), MacLennan and Zillmer. The Committee met four times during 2017. Certain functions of the Governance Committee are described starting on page 8 of this Proxy Statement under the heading “Director Nomination Process.” In addition, the principal functions of this Committee include: (i) lead the annual review of Board performance and effectiveness; (ii) review the Board’s organizational structure and operations (including appointing a lead director for executive sessions of non-management directors) and its relationship to senior management; (iii) review issues of senior management succession; (iv) lead the annual Chief Executive Officer performance review and oversee the evaluation process for senior management; (v) review Certificate of Incorporation, By-Law or stockholder rights plan issues or changes in fundamental corporate charter provisions; (vi) review various corporate governance matters (including any necessary modifications to the Corporate Governance Principles); (vii) review and recommend to the Board with respect to director independence determinations and review, approve or ratify reportable related-person transactions; (viii) receive reports from management with regard to relevant social responsibility issues and report to the Board as appropriate; (ix) review our Company’s efforts to achieve its affirmative action and diversity goals; (x) review director orientation, training and continuing education; (xi) review our political contributions policy as well as our corporate contributions; and (xii) undertake special projects which do not fall within the jurisdiction of other committees of the Board.
|
| | 16
| ECOLAB - 2018 Proxy Statement
| | |
The Board of Directors has determined that each member of the Governance Committee meets the “independence” requirements of the SEC, the New York Stock Exchange and of our Board.
| ·
| | Safety, Health and Environment Committee – The members of the Safety, Health and Environment Committee are Mses. Beck (Chair) and Reich and Messrs. Baker, Higgins (Vice Chair) and Larson. The Committee met four times during 2017. This Committee monitors compliance with applicable safety, health and environmental (“SHE”) laws and regulations. The principle functions of this Committee include: (i) review SHE policies, programs and practices, SHE risks, SHE statistics, pending SHE matters, security risks and industry best practices; (ii) review regulatory, environmental and health and safety trends, issues and concerns which affect or could affect our SHE practices; (iii) review the implementation of our SHE practices and related compliance with applicable policies; and (iv) review our Sustainability Report.
|
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is comprised of five non-employee, independent directors: Messrs. Biller, Chazen (Vice Chair), Ettinger, Higgins, and Zillmer (Chair). No member of the Compensation& Human Capital Management Committee is or was formerly an officer or an employee of the Company or had any related person transaction required to be disclosed in which the Company was a participant during the last fiscal year. In addition, no executive officer of the Company serves on the compensation committeeCompensation & Human Capital Management Committee or board of directors of a company for which any of the Company’s directors serves as an executive officer.
ECOLAB PROXY STATEMENT 2024 31
Corporate Governance and Board Matters
RELATED PERSON TRANSACTIONS The Governance Committee of the Board of Directors is responsible for reviewing, approving, or ratifying transactions and proposed transactions in excess of $120,000 with the Company’s executive officers or directors, including their immediate family members, or any greater than 5% stockholder known to us. Our practices and procedures for identifying transactions with related persons are located in the charter of the Governance Committee. The Governance Committee considers the related person’s relationship to the Company and interest in the transaction; the material facts of the transaction, including the proposed aggregate value of such transaction; the benefits to the Company of the proposed related-person transaction; if applicable, the availability of other sources of comparable products or services; an assessment of whether the proposed related-personrelated person transaction is on terms that are comparable to the terms available to an unrelated third party or to employees; and such other factors and information as the Governance Committee may deem appropriate. The Governance Committee determined that there were no such transactions with related persons during 2017,since the beginning of 2023, nor any currently anticipated transactions. | | ECOLAB - 2018 Proxy Statement
| 17
| | |
DIRECTOR COMPENSATION FOR 2017 DIRECTOR COMPENSATION FOR 2017
Director Compensation Table
The following table summarizes the compensation that our non-employee directors received during 2017.
| | | | | | | | | | | | | | | | | Name | | Fees Earned or
Paid in Cash(1)
($) | | Stock
Awards(2)
($) | | Option
Awards(3)
($) | | Total
($) | Barbara J. Beck | | 120,000 | | 100,000 | | 56,380 | | 276,380 | Leslie S. Biller | | 120,000 | | 100,000 | | 56,380 | | 276,380 | Carl M. Casale | | 115,000 | | 100,000 | | 56,380 | | 271,380 | Stephen I. Chazen | | 108,434 | | 100,000 | | 56,380 | | 264,814 | Jeffrey M. Ettinger | | 131,370 | | 100,000 | | 56,380 | | 287,750 | Jerry A. Grundhofer(4) | | 42,938 | | 34,350 | | 0 | | 77,288 | Arthur J. Higgins | | 105,000 | | 100,000 | | 56,380 | | 261,380 | Michael Larson | | 105,000 | | 100,000 | | 56,380 | | 261,380 | Jerry W. Levin(4) | | 49,794 | | 34,350 | | 0 | | 84,144 | David W. MacLennan | | 115,000 | | 100,000 | | 56,380 | | 271,380 | Tracy B. McKibben | | 115,000 | | 100,000 | | 56,380 | | 271,380 | Victoria J. Reich | | 125,000 | | 100,000 | | 56,380 | | 281,380 | Suzanne M. Vautrinot | | 115,000 | | 100,000 | | 56,380 | | 271,380 | John J. Zillmer | | 118,187 | | 100,000 | | 56,380 | | 274,567 |
| (1)
| | Represents annual retainer of $105,000 (or a pro rata portion thereof) earned during 2017, plus additional fees paid to the Lead Director, the respective Chairs of Board Committees and the members of the Audit Committee; includes retainer and fees, if any, deferred at the election of directors pursuant to the 2001 Non-Employee Director Stock Option and Deferred Compensation Plan (the “2001 Plan”). The features of the 2001 Plan are described in the Summary below. The dollar amount of retainer and fees deferred by applicable directors during 2017 is as follows: Ms. Beck, $120,000; Mr. Biller $120,000; Mr. Chazen, $54,217; Mr. Ettinger, $131,370; Mr. Grundhofer, $42,938; and Mr. Higgins, $105,000.
|
| (2)
| | Represents the crediting by the Company of $100,000 (or a pro rata portion thereof) to a deferred stock unit account under the 2001 Plan during 2017, which also represents the full grant date fair value of each stock unit award under FASB ASC Topic 718. The features of the deferred stock unit account are described under the Summary below. The aggregate number of stock units held by each non-employee director is set forth under footnote (3) to the “Security Ownership – Executive Officers and Directors” table at page 12.
|
| (3)
| | Represents the full grant date fair value of each option award, computed in accordance with FASB ASC Topic 718. The value has been determined by application of the lattice (binomial)-pricing model, based upon the terms of the option grant to directors. Director stock options granted in May 2017 to directors have a ten-year contractual exercise term and vest 25% at the end of each three-month period following the date of grant. Key assumptions include: risk-free rate of return, expected life of the option, expected stock price volatility and expected dividend yield. The specific assumptions used in the valuation of these options are summarized in the table below:
|
| | | | | | | | | | | | | | | | | | Grant Date | | Risk Free Rate | | Expected Life | | Expected Volatility | | Expected Dividend Yield | 05/04/2017 | | 2.05% | | 6.14 years | | 23.25% | | 1.18% |
As of December 31, 2017, the aggregate number of stock options held by each director named in the table above is as follows: Ms. Beck, 15,900; Mr. Biller, 34,000; Mr. Casale, 9,900; Mr. Chazen, 12,100; Mr. Ettinger, 6,500; Mr. Grundhofer, 18,100; Mr. Higgins, 24,600; Mr. Larson, 16,600; Mr. Levin, 575; Mr. MacLennan, 5,300; Ms. McKibben, 6,900; Ms. Reich, 26,800; Ms. Vautrinot, 9,400; and Mr. Zillmer, 34,000.
| (4)
| | Messrs. Grundhofer and Levin retired from the Board effective May 2017, and each received a pro-rated portion of compensation for 2017.
|
| | 18
| ECOLAB - 2018 Proxy Statement
| | |
DIRECTOR COMPENSATION FOR 2017
Summary
During 2017,2023, members of the Board of Directors who are not employees of the Company were entitled to receive base annual compensation valued at $260,000 as follows: the following compensation: | ·
| | An annual retainer of $105,000;
|
| | ·
ADDITIONAL SUPPLEMENTAL RETAINERS FOR SELECT BOARD SERVICE
($) | | $100,000 annually in the form of stock units (which are described below); and
|
| ·
| | Stock options having a grant date fair value of approximately $55,000.
|
We also paid the following supplemental retainers to the Lead Director, committee chairs and members of the Audit Committee:
| | | | | Lead Director | | | | | | 35,000 | | | Director Role
| Committee Chairs: | Amount ($)
| | | | | Lead Director
| | ▪
Audit Committee | | | | | | 25,000 | | | Audit Committee Chair
| | ▪
Compensation & Human Capital Management Committee | | | | | | 20,000 | | | Compensation Committee Chair
| | ▪
Finance Committee | | | | | | 20,000 | | | Finance Committee Chair
| | ▪
15,000Governance Committee | | | | | | 20,000 | | | Governance Committee Chair
| | ▪
15,000Safety, Health & Environment Committee | | | | | | 20,000 | | | Safety, Health and Environment Committee Chair
| | ▪
15,000 | Audit Committee Member | | | | | | 10,000 | | |
The base annual compensation of $260,000$300,000 per year, excluding committee retainers, is within the median range of our competitive market, as is the total equity compensation of $155,000$180,000 comprising a portion of such base. For director compensation, we define our competitive market as a peer group of 19 comparison21 companies we use for compensation benchmarking and the median range as within 10% of the median for total annual director compensation. The companies comprising our comparisonpeer group are the same as the executive compensation comparisonpeer group and are set forth under the heading “Compensation Benchmarking”“Compensation Benchmarking” found under the Compensation Discussion and Analysis of this Proxy Statement at page 35. 47. All reasonable travel and other expenses incurred by directors on behalf of Ecolab were reimbursed.The features of
Equity awards are granted to our non-employee directors under the 2001 Non-Employee Director Stock Option and Deferred Compensation Plan (the “2001 Plan”). Under the 2001 Plan, the aggregate grant date fair value of 2001 Plan awards denominated in shares that may be made to any non-employee director of the Company during any calendar year may not exceed $800,000, excluding such awards made at the election of a director to defer the receipt of cash compensation otherwise payable for services as a director. Director stock option grants are granted on the date of the Annual Meeting of Stockholders and vest in 25% installments three, six, nine and twelve months, respectively, after the grant date. A director appointed after the annual meeting will receive a pro rata grant at the next annual meeting based on the number of days in service. Stock unit awards are credited to a director’s deferred stock unit account in 25% installments on a quarterly basis, are prorated for any director who serves for only part of a quarter, based on the number of days in service, and are paid in shares following cessation of Board service pursuant to the director’s distribution election for deferred stock units in the director’s deferral plan. The 2001 Plan also permits non-employee directors to defer some or all of their cash retainers into accounts that provide for either interest at market rates or an investment in Company stock units, which include the right to dividend equivalents. Upon cessation of Board service, deferred amounts are paid in a lump sum or installments over a maximum of ten years as follows:elected by the director, with payments from the interest-bearing account made in cash and payments from the stock unit account made in shares of our Common Stock. 32ECOLAB PROXY STATEMENT 2024
Corporate Governance and Board Matters
STOCK RETENTION AND OWNERSHIP GUIDELINES | | ·
| | Non-employeeOur stock retention and ownership guidelines encourage our directors may elect to defer some, or all, of the cash portion of their annual retainer and additional fees inaccumulate a cash account or a deferred stock unit account until cessation of Board service. Amounts deferredsignificant ownership stake in the cash account earn interest atCompany so they are incentivized to maximize long-term stockholder returns. Our guidelines provide that our directors own Company stock with a market rates and amounts deferred in the stock unit account are credited with dividend equivalents. Upon cessation of Board service, deferred amounts are paid in a lump sum or in equal installments over a maximum of ten years as elected by the director, with payments from the interest-bearing account made in cash and payments from the stock unit account made in shares of our Common Stock.
|
| ·
| | Director stock option grants are made on the date of the Annual Meeting of Stockholders and have an exercise price which is the average of the high and low market price on the date of grant. We believe that the use of the average of the high and low market price on the date of the grant removes same-day stock volatility. Director stock options vest 25% at the end of each three-month period following the grant date and will terminate 10 years after the grant date. If a non-employee director ceases to serve as a director of the Company for any reason, then each of his or her stock options will, to the extent it was already exercisable, remain exercisable for the shorter of the remaining term of the stock option or five years after the date service as a director ceased. The stock options granted to directors under the 2001 Plan may be transferred to defined family members or legal entities established for their benefit. We do not have a program, plan or practice to time stock option grants to directors in coordination with the release of material non-public information.
|
| ·
| | The 2001 Plan is the only plan or arrangement under which share-based compensation is provided to our non-employee directors.
|
| | ECOLAB - 2018 Proxy Statement
| 19
| | |
DIRECTOR COMPENSATION FOR 2017
| ·
| | The aggregate grant date fair value of 2001 Plan awards denominated in shares that may be made to any non-employee director ofat least five times the Company during any calendar year may not exceed $800,000, excluding such awards made at the election of a director to defer the receipt of cash compensation otherwise payable for services as a director.
annual retainer. | | | | |
Stock Retention and Ownership Guidelines
We have in place stock retention and ownership guidelines to encourage our directors to accumulate a significant ownership stake so they are vested in maximizing long-term stockholder returns. Our guidelines provide that our directors own Company stock with a market value of at least five times the annual retainer.
Until the stock ownership guideline is met, the director is expected to retain 100% of all after-tax profitthe net shares received from stock option exercises. For purposes of complying with our guidelines, stock is not considered owned if subject to an unexercised stock option. Shares owned outright, legally or beneficially, by a director or his or her immediate family members residing in the same household and deferred stock units in the director’s deferral plan count towards meeting the guidelines. Unexercised stock options do not count towards the guidelines. Our directors may not pledge shares or enter into any risk hedging arrangements with respect to Company stock. Our directors are in compliance with our guidelines by either having achieved the ownership guideline or, if the guideline is not yet achieved, by retaining 100% of all after-tax profit shares from any stock option exercises.Changes Effective
DIRECTOR COMPENSATION TABLE The following table summarizes the compensation that our non-employee directors received during 2023. | | NAME | | | | FEES EARNED OR
PAID IN CASH(1)
($) | | | | STOCK AWARDS(2)
($) | | | | OPTION
AWARDS(3)
($) | | | | TOTAL
($) | | | | Shari L. Ballard | | | | | | 126,593 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 310,545 | | | | | Barbara J. Beck | | | | | | 140,000 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 323,952 | | | | | Jeffrey M. Ettinger(4) | | | | | | 60,495 | | | | | | | 49,451 | | | | | | | 58,952 | | | | | | | 168,898 | | | | | Eric M. Green(5) | | | | | | 120,000 | | | | | | | 125,000 | | | | | | | 82,115 | | | | | | | 327,115 | | | | | Arthur J. Higgins | | | | | | 120,000 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 303,952 | | | | | Michael Larson | | | | | | 140,000 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 323,952 | | | | | David W. MacLennan | | | | | | 164,835 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 348,787 | | | | | Tracy B. McKibben | | | | | | 130,000 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 313,952 | | | | | Lionel L. Nowell III | | | | | | 139,890 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 323,842 | | | | | Victoria J. Reich | | | | | | 135,110 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 319,062 | | | | | Suzanne M. Vautrinot | | | | | | 150,000 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 333,952 | | | | | John J. Zillmer | | | | | | 126,813 | | | | | | | 125,000 | | | | | | | 58,952 | | | | | | | 310,765 | | |
(1)
Represents annual retainer of $120,000 (or a pro rata portion thereof) earned during 2023, plus additional fees paid to the Lead Director, the respective Chairs of Board Committees, and the members of the Audit Committee; includes retainer and fees, if any, deferred at the election of directors pursuant to the 2001 Plan. The dollar amount of retainer and fees deferred by applicable directors during 2023 is as follows: Ms. Ballard, $126,593; Ms. Beck, $140,000; Mr. Green, $120,000; and Mr. Higgins, $120,000. (2)
Represents the $125,000 (or a pro rata portion thereof) value credited to a deferred stock unit account in 201825% installments on a quarterly basis under the 2001 Plan during 2023 by the Company and is the full grant date fair value of each stock unit award under FASB ASC Topic 718. The aggregate number of stock units held by each non-employee director is set forth under footnote (3) to the “ Executive Officers and Directors” table in the Security Ownership section on page 35. (3)
Represents the full grant date fair value of each stock option grant, computed in accordance with FASB ASC Topic 718. The value has been determined by application of the lattice (binomial)-pricing model, based upon the terms of the option grants. Director stock options granted in May 2023 have a ten-year contractual exercise term and vest 25% at the end of each three-month period following the date of grant. Key assumptions include the following risk-free rate of return, expected life of the option, expected stock price volatility, and expected dividend yield: | | GRANT DATE | | | | RISK FREE RATE | | | | EXPECTED LIFE | | | | EXPECTED VOLATILITY | | | | EXPECTED DIVIDEND YIELD | | | | 05/04/2023 | | | | | | 3.28% | | | | | 6.10 years | | | | | | 22.33% | | | | | | | 1.23% | | |
ECOLAB PROXY STATEMENT 2024 33
Corporate Governance and Board Matters
As of December 31, 2023, none of the directors held any unvested stock units and the aggregate number of stock options held by each director named in the table above is as follows: | | NAME | | | | AGGREGATE NUMBER OF
STOCK OPTIONS HELD | | | | Ms. Ballard | | | | | | 7,182 | | | | | Mr. MacLennan | | | | | | 13,765 | | | | | Ms. Beck | | | | | | 10,465 | | | | | Ms. McKibben | | | | | | 15,365 | | | | | Mr. Ettinger | | | | | | 13,555 | | | | | Mr. Nowell | | | | | | 7,182 | | |
| | NAME | | | | AGGREGATE NUMBER OF
STOCK OPTIONS HELD | | | | Mr. Green | | | | | | 1,964 | | | | | Ms. Reich | | | | | | 14,965 | | | | | Mr. Higgins | | | | | | 14,965 | | | | | Ms. Vautrinot | | | | | | 17,865 | | | | | Mr. Larson | | | | | | 17,365 | | | | | Mr. Zillmer | | | | | | 17,365 | | |
(4)
Mr. Ettinger resigned from the Board effective May 23, 2023. He received pro-rated compensation for 2023 and the option granted to him on May 4, 2023 was forfeited. (5)
Mr. Green received an initial stock option grant on May 4, 2023 valued at $23,163 under FASB ASC Topic 718 to reflect his prorated service beginning in December 2022, as well as the regular annual director stock option grant in May 2023 valued at $58,952. CHANGES EFFECTIVE IN 2024 The Committee reviews our compensation program for non-employee directors annually; however, it is our general practice to consider adjustments to our program every other year.changes less frequently than annually. Based upon the recommendation of the Compensation Committee'sCommittee’s independent consultant, Frederic W. Cook & Co., Inc. (“FW Cook,Cook”), we made the following changes effective as of January 1, 2018: | ·
| | Increased the annual retainer from $105,000 to $110,000; and
|
2024: | ·
| | Increased the annual deferred stock unit award from $100,000 to $115,000.
|
▪
Increased the annual cash retainer from $120,000 to $125,000; ▪
Increased the annual deferred stock unit award from $125,000 to $135,000; and ▪
Increased the supplemental retainer for the Lead Director from $35,000 to $40,000. We retained all of the other components of our non-employee director compensation program, including the annual stock option grant with a grant date fair value of $55,000 and the retainers forof the Lead Director, committee chairs and the Audit Committee members, without change. The changes to the annual retainer and stock unit awards increase total annual director compensation from $260,000$300,000 per year to $280,000$315,000 per year, excluding committee retainers, which is within the median range of our competitive market as previously defined at page 1932 of this Proxy Statement. Prior to these changes, the compensation amounts under the program were last changed effective as of January 1, 2022. 34ECOLAB PROXY STATEMENT 2024
EXECUTIVE OFFICERS AND DIRECTORS In general, “beneficial ownership” includes those shares of our Common Stock which a director or executive officer has the power to vote or transfer, as well as stock options that are exercisable currently or within 60 days and stock underlying stock units that may be acquired within 60 days. On March 5, 2024, our current executive officers and directors beneficially owned, in the aggregate, 1,514,747 shares of Common Stock constituting approximately 0.5% of our shares outstanding. As required by SEC disclosure rules, “shares outstanding” for this purpose includes options exercisable within 60 days and stock underlying stock units that may be acquired within 60 days by such executive officers and directors. The detail of beneficial ownership is set forth in the following table. | | NAME OF BENEFICIAL OWNER | | | | AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
(#) | | | | PERCENT OF CLASS | | 20
| ECOLAB - 2018 Proxy Statement
Named Executive Officers | | | | | | | | | | | | Christophe Beck (Chairman and Chief Executive Officer) | | | | | | 417,884(1)(2) | | | | | | | * | | | | | Scott D. Kirkland (Chief Financial Officer) | | | | | | 59,488(1)(2) | | | | | | | * | | | | | Darrell R. Brown | | | | | | 145,992(1)(2) | | | | | | | * | | | | | Machiel Duijser | | | | | | 39,482(1)(2) | | | | | | | * | | | | | Lanesha T. Minnix | | | | | | 9,276(1)(2) | | | | | | | * | | | | | Directors | | | | | | | | | | | | Judson B. Althoff | | | | | | 0(2)(3) | | | | | | | * | | | | | Shari L. Ballard | | | | | | 13,980(2)(3) | | | | | | | * | | | | | Barbara J. Beck | | | | | | 42,919(2)(3) | | | | | | | * | | | | | Eric M. Green | | | | | | 3,394(2)(3) | | | | | | | * | | | | | Arthur J. Higgins | | | | | | 40,161(2)(3) | | | | | | | * | | | | | Michael Larson | | | | | | 31,083(2)(3)(4) | | | | | | | * | | | | | David W. MacLennan | | | | | | 34,220(2)(3)(5) | | | | | | | * | | | | | Tracy B. McKibben | | | | | | 23,572(2)(3) | | | | | | | * | | | | | Lionel L. Nowell III | | | | | | 12,463(2)(3) | | | | | | | * | | | | | Victoria J. Reich | | | | | | 38,567(2)(3) | | | | | | | * | | | | | Suzanne M. Vautrinot | | | | | | 25,360(2)(3) | | | | | | | * | | | | | John J. Zillmer | | | | | | 59,910(2)(3) | | | | | | | * | | | | | Directors and Executive Officers as a Group (27 persons) | | | | | | 1,514,747(4)(5) | | | | | | | 0.5%(4)(5) | | |
DIRECTOR INDEPENDENCE STANDARDS AND DETERMINATIONS
DIRECTOR INDEPENDENCE STANDARDS AND DETERMINATIONS
“Independence” Standards
Pursuant to
(1)
Includes the Boardfollowing shares held by officers in the Ecolab Savings Plan and ESOP as of Directors’ policy, a director is not independent if: | ·
| | The director is, or has been within the last three years, an employee of the Company, or an immediate family member is, or has been within the last three years, an executive officer, of the Company.
|
the last Plan report: Mr. Beck, 2,858; Mr. Kirkland, 2,517; Mr. Brown, 0; Ms. Minnix, 0; and Mr. Duijser, 0. | ·
| | The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
|
| ·
| | (A) The director is a current partner or employee of a firm that is the Company’s internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on the Company’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the Company’s audit within that time.
|
(2)
| ·
| | The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company's present executive officers at the same time serves or served on that company's compensation committee.
|
| ·
| | The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company's consolidated gross revenues.
|
The Board of Directors’ independence policy is also available on our website at www.investor.ecolab.com/corporate-governance/board-of-directors.
“Independence” Determinations
In February 2018,Includes the Governance Committee undertook a review of director independence by examining the nature and magnitude of transactions and relationships during 2017, 2016 and 2015 between each director serving during 2017 or director nominee, as the case may be (or any member of his or her immediate family or the company he or she is employed by and its subsidiaries and affiliates), and the Company, its subsidiaries and affiliates. Appropriate scrutiny is given to any situationfollowing shares which could be reasonably consideredpurchased under Company-granted stock options within 60 days from March 5, 2024, including, in the case of retirement-eligible officers, options vesting upon retirement from the Company: Mr. Beck, 355,220; Mr. Kirkland, 49,574; Mr. Brown, 120,643; Mr. Duijser, 30,038; and Ms. Minnix, 7,410; Mr. Althoff, 0; Ms. Ballard, 7,182; Ms. Beck, 10,465; Mr. Green, 1,964; Mr. Higgins, 14,965; Mr. Larson, 17,365; Mr. MacLennan, 13,765; Ms. McKibben, 15,365; Mr. Nowell, 7,182; Ms. Reich, 14,965; Ms. Vautrinot, 17,865; and Mr. Zillmer, 14,965.
ECOLAB PROXY STATEMENT 2024 35
(3)
Includes the following interests in stock units under our 2001 Non-Employee Director Stock Option and Deferred Compensation Plan: Mr. Althoff, 0; Ms. Ballard, 6,798; Ms. Beck, 32,454; Mr. Green, 1,430; Mr. Higgins, 25,196; Mr. Larson, 9,228; Mr. MacLennan, 5,988; Ms. McKibben, 6,732; Mr. Nowell, 5,281; Ms. Reich, 22,602; Ms. Vautrinot, 7,495; and Mr. Zillmer, 14,657. The stock units are Common Stock equivalents which may not be voted or transferred. They are included in the table because in certain circumstances they will be paid in the form of Common Stock within 60 days after a material relationship. Bothdirector leaves the existenceBoard. (4)
Mr. Larson is the Business Manager of Cascade Investment, L.L.C. (“Cascade”), an entity owned by William H. Gates III, and naturethe chief investment officer for Mr. Gates. As the Business Manager of Cascade, Mr. Larson may be deemed to have shared voting and investment power with respect to 31,185,554 shares of Ecolab Common Stock held by Cascade, and as the chief investment officer for Mr. Gates, he may be deemed to have voting and investment power with respect to 5,218,044 shares of Ecolab Common Stock held by the Bill & Melinda Gates Foundation Trust (the “Trust”). Mr. Larson disclaims beneficial ownership of any shares held by Cascade or the Trust. (5)
Beneficial ownership includes 4,209 shares of Mr. MacLennan held in trusts over which Mr. MacLennan or an immediate family member have voting authority and/or power of disposition; 20,218 shares held for executive officers in Company-sponsored employee benefit plans as of the relationship are considered. last plan reports; and 1,251,796 shares to which these persons have the right to acquire beneficial ownership within 60 days of March 5, 2024, including, in the case of retirement-eligible officers, options vesting upon retirement from the Company. CERTAIN BENEFICIAL OWNERS The relationships include, among others, commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships. The Company also endeavorsfollowing table sets forth information as to identify, quantify and evaluate ordinary course commercial transactions between the Company and any companyeach person or entity that employs a director or director nominee, including subsidiaries and affiliates of the company. In this regard, the Board’s Governance Committee has reviewed the following transactions and determined that the transactions do not exceed the Board’s categorical “independence” standards described above or adversely affect the director for “independence” status as the combined impact of the transactions is immaterialreported to the CompanySecurities and Exchange Commission (“SEC”) or has advised us that they are a “beneficial owner,” as defined by the respective organizations. | ·
| | Mr. MacLennan serves as Chairman and Chief Executive Officer of Cargill, Incorporated. During 2017, Ecolab’s sales to Cargill and its affiliates were approximately $29 million, or less than 0.03% of Cargill’s revenues, and Ecolab’s purchases from Cargill and its affiliates were approximately $6 million, or less than 0.006% of Cargill’s revenues. Ecolab believes all sales to Cargill were made in the ordinary course, at arm’s length, and at prices and on terms customarily available. Further, Ecolab believes Mr. MacLennan had no personal interest in, or received any personal benefit from, such commercial transactions.
|
| | ECOLAB - 2018 Proxy Statement
| 21
| | |
DIRECTOR INDEPENDENCE STANDARDS AND DETERMINATIONS
Based on the review of the Governance Committee, the Board of Directors has determined that the following directors, including those on the slate of nominees for election to the Board at this year’s Annual Meeting (other than Mr. Baker), are, and have been since January 1, 2017, or the date which they became a director of the Company if later than January 1, 2017, independent in accordance with the listing standards of the New York Stock Exchange, theSEC’s rules and regulations, of more than 5% of our outstanding Common Stock.
| | NAME AND ADDRESS OF BENEFICIAL OWNER | | | | AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
(#) | | | | PERCENT OF CLASS(1) | | | | William H. Gates III
2365 Carillon Point
Kirkland, WA 98033 | | | | | | 36,403,598(2) | | | | | | | 12.73% | | | | | The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355 | | | | | | 23,181,648(3) | | | | | | | 8.11% | | | | | BlackRock, Inc.
50 Hudson Yards
New York, NY 10001 | | | | | | 21,715,848(4) | | | | | | | 7.60% | | |
(1)
The percent of class is based on the number of voting shares outstanding as of March 5, 2024. (2)
This information is based on Amendment No. 7 to the Schedule 13D filed jointly with the SEC applicable law,on August 22, 2022 by Cascade Investment, L.L.C., which we refer to as Cascade, William H. Gates III, whom we refer to as Mr. Gates, and the Board’s “independence” policy: Barbara J. Beck, Leslie S. Biller, Carl M. Casale, Stephen I. Chazen, Jeffrey M. Ettinger, Jerry A. Grundhofer, Arthur J. Higgins, Michael Larson, Jerry W. Levin, David W. MacLennan, Tracy B. McKibben, Victoria J. Reich, Suzanne M. VautrinotBill and John J. Zillmer.The Board determined that Douglas M. Baker, Jr. is not “independent,” dueMelinda Gates Foundation Trust, which we refer to his status as the current Chief Trust, the most recent Form 4 relating to Mr. Gates filed with the SEC on August 23, 2022, and the most recent Form 13F relating to the Trust filed with the SEC on February 14, 2024. According to these filings, Mr. Gates has sole power to vote or direct the vote, and to dispose or to direct the disposition, of 31,185,554 shares of Ecolab Common Stock beneficially owned by Cascade, as the sole member of such entity. Additionally, Mr. Gates shares the power to vote or direct the vote, and to dispose or to direct the disposition of, 5,218,044 shares of Ecolab Common Stock beneficially owned by the Trust.
(3)
This information is based on Amendment No. 11 to the Schedule 13G filed on February 13, 2024 by The Vanguard Group, Inc., which we refer to as Vanguard. Vanguard reports that, as of December 29, 2023, they have sole power to vote or direct the vote of 0 shares, shared power to vote or direct the vote of 326,722 shares, sole power to dispose or to direct the disposition of 22,133,720 shares and shared power to dispose or direct the disposition of 1,047,928 shares of Ecolab Common Stock. (4)
This information is based on Amendment No. 9 to the Schedule 13G filed on January 26, 2024 by BlackRock, Inc. (“BlackRock”). BlackRock reports that, as of December 31, 2023, they have sole power to vote or direct the vote of 19,261,689 shares, shared power to vote or direct the vote of 0 shares, sole power to dispose or to direct the disposition of 21,715,848 shares and shared power to dispose or direct the disposition of 0 shares of Ecolab Common Stock. 36ECOLAB PROXY STATEMENT 2024
Executive Officer.Leadership ![[MISSING IMAGE: ph_christophebecknew-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ph_christophebecknew-pn.jpg) | | CHRISTOPHE BECK Chairman & Chief
Executive Officer NEO | | | SCOTT D. KIRKLAND Chief Financial Officer NEO | | | DARRELL R. BROWN President & Chief
Operating Officer NEO | | | MIKE DUIJSER EVP & Chief Supply
Chain Officer NEO | | | LANESHA T. MINNIX EVP, General Counsel & Secretary NEO | | | | | | | | NICHOLAS ALFANO EVP & President, Global Industrial Group | | | DR. LARRY BERGER EVP & Chief Technical
Officer | | | JENNIFER BRADWAY SVP & Corporate
Controller | | | ANGELA BUSCH EVP, Corporate Strategy &
Business Development | | | GREG COOK EVP & President,
Institutional Group | | | | SAM DE BOO EVP & President, Global Markets | | | NICOLAS A. GRANUCCI EVP & President, Global
Pest | | | LAURIE M. MARSH EVP, Human Resources | | | GAIL PETERSON EVP, Global
Marketing &
Communications | | | GERGELY (GG) SVED EVP & President,
Global Healthcare &
Life Sciences | |
ECOLAB PROXY STATEMENT 2024 37
| | | 22
PROPOSAL 2 — ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION | ECOLAB - 2018 Proxy Statement
| | | | | | | | The Board of Directors recommends that you vote FOR approval of the compensation of Ecolab’s named executive officers as described in the Compensation Discussion and Analysis and the compensation tables pursuant to the compensation disclosure rules of the SEC. | |
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
Our BoardAt the 2023 Annual Meeting, we provided our stockholders with an advisory vote regarding how frequently the Company will conduct future stockholder advisory votes to approve the compensation of Directors currently consists of 13 members. The 13 nominees, if elected, will serve a one-year term ending asour named executive officers. More than 98% of the 2019 Annual Meeting expected to be held on May 2, 2019.
Pursuant tototal votes cast voted in favor of an annual vote, consistent with the recommendation of the Governance Committee, Mses. Beck, McKibben, ReichBoard. Based on these results, the Board has determined to continue to hold an advisory vote on the compensation of our named executive officers on an annual basis.
| | | | | Our compensation programs encourage executive decision-making that is aligned with the long-term interests of our stockholders. | | | | | | | We tie a significant portion of pay to Company performance over a multi-year period. | |
As discussed in the Compensation Discussion and VautrinotAnalysis contained in this Proxy Statement, we believe that our executive compensation program for 2023 was reasonable and Messrs. Baker, Biller, Casale, Chazen, Ettinger, Higgins, Larson, MacLennanappropriate, with payout results justified by the performance of the Company. Our compensation program is the result of a carefully considered approach, including input and Zillmer were nominatedadvice from the Compensation & Human Capital Management Committee’s independent compensation consultant and input of stockholders through the Company’s stockholder engagement efforts. The Company is presenting this proposal pursuant to Section 14A of the Exchange Act, which gives you as a stockholder the opportunity to endorse or not endorse our executive pay program through an advisory vote for electionor against the following resolution: “RESOLVED, that the stockholders approve, on an advisory basis, the compensation of our named executive officers, as Directors. disclosed in the Company’s Proxy Statement for the 2023 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the Proxy Statement.” The Board of Directors has no reasonencourages stockholders to believe that any ofapprove the compensation program for our named nomineesexecutive officers by voting FOR the above resolution. Because your vote is not available oradvisory, it will not serve if elected.Board of Directors’ Recommendation – The Board of Directors recommends a vote FOR the election of the 13 nominees named in this Proxy Statement. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FOR each of the nominees named in this Proxy Statement.
The following information with regard to business experience, qualifications and directorships has been furnished by the respective director nominees or obtained from our records.
Nominees for Election tobinding upon the Board of Directors (Term Ending in May 2019)
Directors. However, as it has done historically, the Compensation & Human Capital Management Committee will take into account the outcome of the vote when considering future executive compensation arrangements. Our next advisory vote on the compensation program for our named executive officers will occur at our 2025 Annual Meeting. DOUGLAS M. BAKER, JR.
| | | | | | 
| Years of Service: 14
Age: 59
Board Committees:
Safety, Health and Environment
| | President in December 2011 upon completion of the Nalco merger. Prior to joining Ecolab in 1989, Mr. Baker was employed by
The Procter & Gamble Company in various marketing and management positions.Qualifications
Mr. Baker has more than 25 years of Ecolab marketing, sales and general management experience, including leadership roles in Ecolab’s Institutional, Europe and Kay businesses before becoming Ecolab’s Chief Operating Officer in 2002 and Chief Executive Officer in 2004. He has deep and direct knowledge of Ecolab’s businesses and operations. In addition, his experience at The Procter & Gamble Company included various marketing and management positions, including in the institutional market in which Ecolab operates. As a director of two other public companies, Mr. Baker also has extensive corporate governance experience.
Other directorships held during the past five years
Lead Director of Target Corporation and director of U.S. Bancorp (retiring April 2018).
| Biography
Chairman of the Board and Chief Executive Officer of Ecolab. Director of Ecolab since 2004. Member of the Safety, Health and Environment Committee.
Since joining Ecolab in 1989, Mr. Baker has held various leadership positions within our Institutional, Europe and Kay operations. Mr. Baker was named Ecolab’s President and Chief Operating Officer in August 2002, was promoted to President and Chief Executive Officer in July 2004, and added the position of Chairman of the Board in May 2006. Mr. Baker relinquished the office of
| | | | BARBARA J. BECK
| | | | | 
| Years of Service: 10
Age: 57
Board Committees:
Safety, Health and Environment
Governance
| | France), the Middle East and Africa. She previously served as Executive Vice President of Manpower’s U.S. and Canada business unit from 2002 to 2005. Prior to joining Manpower, Ms. Beck was an executive of Sprint, a global communications company, serving in various operating and leadership roles for 15 years.
Qualifications
Ms. Beck has extensive North American and European general management and operational experience, including as a current CEO, allowing her to contribute to Ecolab’s strategic vision particularly as it relates to Europe, the Middle East and Africa. With her Manpower knowledge of the impact of labor market trends on global and local economies combined with her knowledge of employment services, which tends to be a leading economic indicator, she provides timely insight into near-term projections of general economic activity. As an executive at Sprint, Ms. Beck obtained experience in the information technology field which is relevant to Ecolab’s development of its ERP systems as well as field automation tools.
Other directorships held during the past five years
None.
| Biography
Chief Executive Officer, Learning Care Group, Inc., a leading for-profit early education/child care provider in North America. Director of Ecolab since 2008. Chair of the Safety, Health and Environment Committee and member of the Governance Committee.
Prior to joining Learning Care Group in 2011 as Chief Executive Officer, Ms. Beck spent nine years as an executive of Manpower Inc., a world leader in the employment services industry. From 2006 to 2011, Ms. Beck was President of Manpower’s EMEA operations, overseeing Europe (excluding
| | | |
| | ECOLAB - 2018 Proxy Statement
| 23
| | |
PROPOSAL 1: ELECTION OF DIRECTORS
LESLIE S. BILLER
| | | | | 
| Years of Service: 20
Age: 70
Board Committees:
Finance
Compensation
| | with Wells Fargo & Company in November 1998. Mr. Biller retired as Vice Chairman and Chief Operating Officer of Wells Fargo & Company in October 2002. He became Chairman of Sterling Financial Corporation in 2010 and served in that capacity until its merger with Umpqua Corporation in April 2014.
Qualifications
Throughout his career in banking, including as Vice Chair and Chief Operating Officer of Wells Fargo, Mr. Biller gained extensive public company senior management and board experience. Having spent a significant part of his career in international assignments in Europe, he is familiar with operating businesses in that region, which allows him to provide advice and guidance relevant to our significant European operations. He has extensive knowledge and experience in banking, treasury and finance, which enables him to provide insight and advice on financing, treasury and enterprise risk management areas. As a chemical engineer, he is familiar with chemicals manufacturing and distribution, which allows him to relate well to our operations.
Other directorships held during the past five years
Formerly a director of Sterling Financial Corporation.
| Biography
Chief Executive Officer of Harborview Capital, a private investment and consultive company. Director of Ecolab since 1997. Chair of the Finance Committee and member of the Compensation Committee.
After holding various positions with Citicorp and Bank of America, Mr. Biller joined Norwest Corporation in 1987 as Executive Vice President in charge of strategic planning and acquisitions for Norwest Banking. He was appointed Executive Vice President in charge of South Central Community Banking in 1990. Mr. Biller served as President and Chief Operating Officer of Norwest Corporation from February 1997 until its merger
| | | | CARL M. CASALE
| | | | | 
| Years of Service: 4
Age: 56
Board Committees:
Governance
Audit
| | through sales, strategy, marketing and technology-related positions before being named Chief Financial Officer in 2009.
Qualifications
As the former Chief Executive Officer of CHS, Mr. Casale has experience running a large diverse organization, which includes a significant energy business. In addition to his extensive industry experience, through his more than 25-year career at CHS and Monsanto and his experience as a director of other public companies, Mr. Casale possesses knowledge and experience in finance, international operations, sales, corporate management, strategy, public company governance and board practices. Mr. Casale is also familiar with our water and energy businesses, having served as a director of Nalco Holding Company from 2009 until Ecolab’s acquisition of Nalco in 2011.
Other directorships held during the past five years
Director of Syngenta AG.
| Biography
Former President and Chief Executive Officer of CHS Inc., a leading integrated agricultural company. Vice Chair of the Governance Committee and member of the Audit Committee.
From 2011 to May 2017 Mr. Casale was President and Chief Executive Officer of CHS. Previously he spent 26 years with Monsanto Company, advancing
| | | | STEPHEN I. CHAZEN
| | | | | 
| Years of Service: 5
Age: 71
Board Committees:
Compensation
Finance
| | Corporate Development and Chief Financial Officer. Prior to joining Occidental in 1994, Mr. Chazen was a Managing Director in Corporate Finance and Mergers and Acquisitions at Merrill Lynch.
Qualifications
With more than 20 years of senior management experience in the oil and gas industry, Mr. Chazen has significant direct experience in the energy sector, one of Ecolab’s most significant end markets. As the President and Chief Executive Officer of TPG Pace Energy Holdings and the former Chief Executive Officer of Occidental, Mr. Chazen is intimately familiar with the competitive landscape and trends within the energy sector as well as the regulatory framework. In addition to his important industry experience, through his more than 30-year career at TPG Pace Energy Holdings, Occidental and Merrill Lynch and his experience as a director of other public companies, Mr. Chazen possesses knowledge and experience in corporate management, strategy, mergers and acquisitions, public company governance and board practices.
Other directorships held during the past five years
Director of TPG Pace Energy Holdings Corp., Occidental Petroleum Corporation and The Williams Companies, Inc.
| Biography
Chairman, President and Chief Executive Officer of TPG Pace Energy Holdings Corp. Director of Ecolab since 2013. Vice Chair of the Compensation Committee and member of the Finance Committee.
Prior to joining TPG Pace Energy Holdings in February 2017, Mr. Chazen had a 23-year career at Occidental Petroleum Corporation holding executive positions of increasing responsibility. From 2011 to 2016 he served as Chief Executive Officer, from 2007 to 2015 as President, from 2010 to 2011 as President and Chief Operating Officer, from 2007 to 2010 as President and Chief Financial Officer, and from 1999 to 2007 as Executive Vice President –
| | | |
| | 24
| ECOLAB - 2018 Proxy Statement
| | |
PROPOSAL 1: ELECTION OF DIRECTORS
JEFFREY M. ETTINGER
| | | | | 
| Years of Service: 3
Age: 59
Lead Director
Board Committees:
Governance
Compensation
| | Corporation, Mr. Ettinger served as President of Jennie-O Turkey Store, the largest subsidiary of Hormel Foods, and in various other positions including Treasurer, Product Manager for Hormel® chili products, and corporate and senior attorney.
Qualifications
With more than 25 years of experience with Hormel Foods, a public food products company with global operations, Mr. Ettinger brings directly relevant operational experience in one of Ecolab’s major end-markets. From his experience as Chairman and Chief Executive Officer of a Fortune 500 public company with global operations, Mr. Ettinger possesses executive leadership attributes and provides relevant insight and guidance with respect to numerous issues important to Ecolab, including public company governance, mergers and acquisitions and regulatory matters.
Other directorships held during the past five years
Director of The Toro Company. Formerly a director of Hormel Foods Corporation.
| Biography
During his 28-year career at Hormel, Mr. Ettinger held the offices of Chairman from 2006 to 2017, Chief Executive Officer from 2006 to 2016 and President from 2005 to 2015. Prior to being named President of Hormel Foods
| | | | ARTHUR J. HIGGINS
| | | | | 
| Years of Service: 8
Age: 62
Board Committees:
Safety, Health and Environment
Compensation
| | including serving as President of the Pharmaceutical Products Division from 1998 to 2001. He is a past member of the Board of Directors of the Pharmaceutical Research and Manufacturers of America (PhRMA), of the Council of the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) and President of the European Federation of Pharmaceutical Industries and Associations (EFPIA).
Qualifications
Mr. Higgins has extensive leadership experience in the global healthcare market. Through leadership positions with large healthcare developers and manufacturers in both the United States and Europe, Mr. Higgins has gained deep knowledge of the healthcare market and the strategies for developing and marketing products in this highly regulated area. This knowledge and industry background allows him to provide valuable insight to Ecolab’s growing Healthcare business, which is developing in both the U.S. and Europe. In addition, his global perspective from years of operating global businesses and his background in working with high growth companies fits well with Ecolab’s ambitions for global growth and provide him experiences from which to draw to advise Ecolab on strategies for sustainable growth. In his role as Chief Executive Officer of Bayer HealthCare, he gained significant exposure to enterprise risk management as well as quality and operating risk management necessary in a highly regulated industry such as healthcare.
Other directorships held during the past five years
Director of Depomed Inc. and Zimmer Biomet Holdings, Inc. Formerly a director of Endo International plc and Resverlogix Corp.
| Biography
President and Chief Executive Officer and member of the Board of Directors of Depomed Inc., a specialty pharmaceutical company. Director of Ecolab since 2010. Vice Chairrecommends that you vote FOR approval of the Safety, Healthcompensation of Ecolab’s named executive officers as described in the Compensation Discussion and Environment CommitteeAnalysis and memberthe compensation tables pursuant to the compensation disclosure rules of the Compensation Committee.
Prior to joining Depomed in March 2017, Mr. Higgins was a Senior Advisor to Blackstone Healthcare Partners, the dedicated healthcare teamSEC.
Proxies solicited by our Board of The Blackstone Group, from May 2010 to March 2017. He previously served at Bayer HealthCare AG as ChairmanDirectors will be voted FOR approval of the Board of Management from January 2006 to May 2010 and as Chairman of the Executive Committee from July 2004 to May 2010. Prior to that time, Mr. Higgins held the offices of Chairman, President and Chief Executive Officer of Enzon Pharmaceuticals, Inc. from 2001 to 2004. Prior to joining Enzon Pharmaceuticals, Mr. Higgins spent 14 years with Abbott Laboratories, holding several executive leadership positions,
| | proposal unless otherwise specified. | | |
MICHAEL LARSON
| | | | | 
| Years of Service: 6
Age: 58
Board Committees:
Finance
Safety, Health and Environment
| | Gates’ non-Microsoft investments as well as the investment assets of the Bill & Melinda Gates Foundation Trust. Previously, Mr. Larson was at Harris Investment Management, Putnam Management Company and ARCO.
Qualifications
With more than 30 years of portfolio management experience, Mr. Larson has deep investment expertise and broad understanding of the capital markets, business cycles and capital efficiency and allocation practices. He also has served on several other public company boards providing him relevant corporate governance experience. In addition, as a professional investor and as the investment officer of Ecolab’s largest shareholder, Mr. Larson brings a long-term shareholder perspective to the Board.
Other directorships held during the past five years
Director of AutoNation, Inc., Republic Services, Inc. and Fomento Mexicano Economico, S.A.B. de C.V. In addition, he is Chairman of the Board of Trustees of two funds in the Western Asset Management fund complex. Formerly a director of Pan American Silver Corp. and Grupo Televisa, S.A.B.
| Biography
Chief investment officer to William H. Gates III. Director of Ecolab since 2012. Vice Chair of the Finance Committee and member of the Safety, Health and Environment Committee.
Mr. Larson has been chief investment officer for Mr. Gates and the Business Manager of Cascade Investment, L.L.C., since 1994. He is responsible for Mr.
| | | |
| | ECOLAB - 2018 Proxy Statement
| 25
| | |
PROPOSAL 1: ELECTION OF DIRECTORS
DAVID W. MACLENNAN
| | | | | 
| Years of Service: 3
Age: 58
Board Committees:
Audit
Governance
| | Officer and President from 2011 until his appointment as Chief Executive Officer in 2013. Prior to these roles, Mr. MacLennan held several other positions with Cargill, including Chief Financial Officer, President of Cargill Energy and Managing Director of the Value Investment Group. He has also held various management positions with US Bancorp Piper Jaffray and Goldberg Securities.
Qualifications
With more than 25 years of leadership experience at Cargill, Mr. MacLennan has developed significant leadership and strategic planning skills, as well as extensive knowledge and insight in corporate governance, risk management, financial management and global business practices.
Other directorships held during the past five years
Director of Cargill, Incorporated. Formerly a director and Governance Committee chair of C.H. Robinson Worldwide, Inc.
| Biography
Chairman and Chief Executive Officer of Cargill, Incorporated. Director of Ecolab since 2015. Vice Chair of the Audit Committee and member of the Governance Committee.
Mr. MacLennan has served as Chairman of the Board of Cargill since 2015 and as Chief Executive Officer since 2013. He held the offices of Chief Operating
| | | | TRACY B. MCKIBBEN
| | | | | 
| Years of Service: 3
Age: 48
Board Committees:
Audit
Finance
| | Director of European Economic Affairs and EU Relations and as Acting Senior Director for European Affairs. Before joining the National Security Council, she served in various senior advisory roles in the U.S. Department of Commerce from March 2001 to July 2003.
Qualifications
Ms. McKibben has more than 15 years of experience in the energy sector, with a focus on alternative energy, water and infrastructure. In this role and in her prior role at Citigroup, Ms. McKibben developed considerable strategic and financial experience advising energy companies and multinational corporations on strategic investments, M&A, and energy policy. In addition to her experience in the energy and financial sectors, Ms. McKibben has gained extensive public sector and international experience working at the U.S. Department of Commerce and within the National Security Council at The White House where she advised the President of the United States, Cabinet Secretaries and other senior officials on political, security, commercial and international trade issues.
Other directorships held during the past five years
Director of GlassBridge Enterprises, Inc. Formerly a director of ROI Acquisition Corp. II.
| Biography
Founder and Chief Executive Officer of MAC Energy Advisors, LLC, an investment consulting company that provides integrated and innovative energy solutions to help clients utilize capital strategically around the globe. Director of Ecolab since 2015. Member of the Audit and Finance Committees.
Ms. McKibben has been the head of MAC Energy Advisors since its founding in 2010. From September 2007 to August 2009, she served as Managing Director and Head of Environmental Banking Strategy at Citigroup Global Markets. Prior to joining Citigroup, Ms. McKibben served in the National Security Council at the White House from July 2003 to August 2007 as
| | | | VICTORIA J. REICH
| | | | | 
| Years of Service: 8
Age: 60
Board Committees:
Audit
Safety, Health and Environment
| | Brunswick European Group, and previously as Senior Vice President and Chief Financial Officer. Before joining Brunswick, Ms. Reich was employed for 17 years at General Electric Company in various financial management positions.
Qualifications
As a former Chief Financial Officer of a public company, Ms. Reich possesses relevant financial leadership experience with respect to all financial management disciplines relevant to Ecolab, including public reporting, strategic planning, treasury, IT and financial analysis. Her financial management background at Essendant, Brunswick and General Electric, combined with her experience in European general management at Brunswick, enables her to provide strategic input as well as financial discipline. Essendant operates a cleaning supplies distribution business which provided Ms. Reich familiarity with the institutional market, one of our largest end-markets.
Other directorships held during the past five years
Director of H&R Block, Inc. and Ingredion Incorporated.
| Biography
Former Senior Vice President and Chief Financial Officer of Essendant Inc. (formerly United Stationers Inc.), a broad line wholesale distributor of business products. Director of Ecolab since 2009. Chair of the Audit Committee and member of the Safety, Health and Environment Committee.
From 2007 to 2011 Ms. Reich was Senior Vice President and Chief Financial Officer of Essendant Inc. Prior to joining Essendant, Ms. Reich spent ten years as an executive with Brunswick Corporation, last serving as President -
| | | |
| | 26
| ECOLAB - 2018 Proxy Statement
| | |
SUZANNE M. VAUTRINOT
| | | | | 
| Years of Service: 4
Age: 58
Board Committees:
Audit
Finance
| | General Vautrinot was the Director of Plans and Policy, U.S. Cyber Command and the Special Assistant to the Vice Chief of Staff of the U.S. Air Force. On multiple occasions, she was selected by military leaders and White House officials to spearhead high-profile engagements. General Vautrinot is the recipient of the Symantec Cyber Award, Women in Aerospace Leadership Award, Aerospace Citation of Honor and the Presidential Award for Training. During her career, she has also been awarded numerous medals and commendations, including the Distinguished Service Medal. She was inducted into the National Academy of Engineering in 2017.
Qualifications
General Vautrinot brings a unique perspective to the Board with her 31-year military career. Having led large and complex organizations, she provides insights into the challenges facing large global organizations. As an expert in cyber security, she can advise Ecolab on appropriate protections for its networks. In addition, General Vautrinot has significant experience in strategic planning, organizational design and change management, which allows her to provide advice and insight to Ecolab as its business grows and develops.
Other directorships held during the past five years
Director of Symantec Corporation and Wells Fargo & Company.
| Biography
President, Kilovolt Consulting Inc. Retired Major General of the U.S. Air Force. Director of Ecolab since 2014. Member of the Audit and Finance Committees.
General Vautrinot retired from the Air Force in 2013. During her 31-year career in the Air Force, she served in various assignments, including cyber operations, plans and policy, strategic security and space operations. General Vautrinot commanded at the squadron, group, wing and numbered Air Force levels, as well as the Air Force Recruiting Service. She has served on the Joint Staff, the staffs at major command headquarters and Air Force headquarters. From 2011 to 2013, she was Commander, 24th Air Force and Commander, Air Forces Cyber, where she was responsible for cyber defense operations. Prior to that,
| | | |
JOHN J. ZILLMER
| | | | | 
| Years of Service: 12
Age: 62
Board Committees:
Compensation
Governance
| | industry, most recently as Executive Vice President of ARAMARK Corporation, a provider of food, uniform and support services. During his eighteen-year career with ARAMARK, Mr. Zillmer served as President of ARAMARK’s Business Services division, the International division and the Food and Support Services group. Prior to joining ARAMARK, Mr. Zillmer was employed by Szabo Food Services until Szabo was acquired by ARAMARK in 1986.
Qualifications
As the former Chief Executive Officer of Univar and previously Allied Waste, Mr. Zillmer has experience leading both public and large private companies. With Univar, he became intimately familiar with the chemical market, including with respect to chemicals that Ecolab uses to manufacture its products. He also has extensive knowledge of the environmental aspects of chemicals manufacturing and distribution. His experience leading various ARAMARK operations has given him deep knowledge of the institutional market, particularly the contract catering segment, which is a large market for Ecolab. His roles on the boards of Reynolds American, Allied Waste and CSX Corporation have provided him with significant public company board experience.
Other directorships held during the past five years
Director of Veritiv Corp., Performance Food Group Company and CSX Corporation. Formerly a director of Reynolds American Inc.
| Biography
Retired President and Chief Executive Officer of Univar Inc., a global distributor of industrial chemicals and related specialty services. Director of Ecolab since 2006. Chair of the Compensation Committee and member of the Governance Committee.
Mr. Zillmer joined Univar in 2009 as President and Chief Executive Officer. In 2012, he stepped down as President and CEO and became Executive Chairman until December 2012 when he retired from Univar. Prior to joining Univar, Mr. Zillmer served as Chairman and Chief Executive Officer of Allied Waste Industries, a solid waste management business, from 2005 until the merger of Allied Waste with Republic Services, Inc. in December 2008. Before Allied Waste, Mr. Zillmer spent 30 years in the managed services
| | | |
| | ECOLAB - 2018 Proxy Statement
| 27
| | |
COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION& HUMAN CAPITAL MANAGEMENT COMMITTEE REPORT
The Compensation & Human Capital Management Committee has reviewed and discussed the following Compensation Discussion and Analysis of the Company with management. Based on their review and discussion, the Compensation & Human Capital Management Committee recommended to the Board of Directors, and the Board has approved, the inclusion of the Compensation Discussion and Analysis in both the Company’s Annual Report on Form 10-K for the year ended December 31, 2017,2023, and the Company’s Proxy Statement for the Annual Meeting of Stockholders to be held May 3, 2018.2, 2024. THE COMPENSATION & HUMAN CAPITAL MANAGEMENT COMMITTEE | | Barbara J. Beck (Chair) | | | | Eric M. Green | | | | | | Dated: February 23, 2018
| Leslie S. Biller
| Arthur J. Higgins | | | | | Stephen I. Chazen
| John J. Zillmer | | | | Jeffrey M. Ettinger
| | |
Dated: February 21, 2024 ECOLAB PROXY STATEMENT 2024 39
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) provides information about the principles underlying our executive compensation programsprogram and the key executive compensation decisions that were made for the fiscal year ended December 31, 20172023 (“2017”2023”), including the most important factors relevant to those decisions.. This CD&A is intended to provide additional context and background for the compensation earned by and awarded to the following named executive officers (“NEOs”) for 20172023 as reported in the “Summary Compensation TableTable” which follows this discussion:
| | NAME | | | | POSITION | | Douglas M. Baker, Jr.
| Christophe Beck | | | | Chairman of the Board and Chief Executive Officer | | Daniel J. Schmechel
| Scott D. Kirkland | | | | Chief Financial Officer and Treasurer | | Thomas W. Handley
| Darrell R. Brown | | | | President and Chief Operating Officer | | Christophe Beck
| Machiel Duijser | | | | Executive Vice President and President – Global Nalco WaterChief Supply Chain Officer | | Michael A. Hickey
| Lanesha T. Minnix | | | | Executive Vice President, General Counsel and President – Global InstitutionalSecretary* | |
*
As previously announced, Ms. Minnix rendered her resignation as Executive Vice President, General Counsel and Secretary. She will continue in her role until her departure on April 1, 2024. EXECUTIVE SUMMARY | | OUR 2023 BUSINESS PERFORMANCE HIGHLIGHTS* | | | | Reported Sales
Growth | | | | Organic Sales
Growth | | | | Reported OI
Margin Expansion | | | | Organic OI Margin
Expansion | | | | Reported Diluted
EPS Growth | | | | Adjusted Diluted
EPS Growth | | | | 8% | | | | 9% | | | | 200 bps | | | | 140 bps | | | | 26% | | | | 16% | |
*
Non-GAAP financial measures are described in our 10-K for fiscal year 2023: Organic Sales Growth, page 31; Organic OI Margin Expansion, page 34; Adjusted Diluted EPS Growth, page 36. In 2023, Ecolab delivered very strong performance despite continued soft macro demand. Organic sales grew 9% and organic operating income margin expanded by 140 basis points, resulting in 16% growth in adjusted diluted earnings per share (hereinafter “adjusted EPS” or “adjusted diluted EPS”). These achievements are the result of the work done over the last few years to strengthen Ecolab’s key long-term growth drivers, enabling the Company to grow fast and drive performance while making a positive impact. 40ECOLAB PROXY STATEMENT 2024
| | Incentive Compensation Highlights | |
The Company’s compensation programs enable us to attract and retain the leadership talent that is necessary to successfully manage our strong earnings growth and return on invested capital objectives, while balancing necessaryessential investment in the businesses in order to achieve attractive, long-term shareholder returns. Our corporate short-term and long-term incentive plan performance measures are aligned with this strategy by utilizing growth in adjusted diluted earnings per share (hereinafter, “adjusted EPS,” unless the context otherwise requires) and adjusted return on invested capital (hereinafter, “adjusted ROIC,” unless the context otherwise requires), both as defined later in this CD&A. At the business unit level, we also incorporate business unit sales and operating income performance measures.Executive Summary
Business Environment
The Company achieved accelerating sales and earnings growth through 2017 as it drove new product introductions, new business wins and improved operating efficiency in a mixed market environment. Increased pricing was implemented to offset higher delivered product costs. Earnings per share (hereinafter “EPS”) leveraged the solid operating income growth, benefiting from lower interest expense, taxes and shares outstanding, to deliver the attractive EPS gain.
| | 28
| ECOLAB - 2018 Proxy Statement
| | |
COMPENSATION DISCUSSION AND ANALYSIS
As a result of this business environment,our 2023 performance, payouts under our annual incentive planMIP versus our pre-established performance goals were 98%achieved at 200% of target for corporate performance (adjusted EPS), and ranged from 61% to 96%160% of target for division performance,the enterprise goal (which includes both adjusted EPS and the commercial average components), as illustrated below: 
below. The Growth & Impact modifier was achieved at 6%. Adjusted Diluted EPS is a non-GAAP financial measure that is described on page 50 under “Program Elements — Annual Cash Incentives.” Commercial Average is a component of the Enterprise Goal, which also includes an adjusted EPS component. The Enterprise Goal was achieved at 160% and is described in more detail on page 50 under “Program Elements — Annual Cash Incentives.” ECOLAB PROXY STATEMENT 2024 41
Performance under our 2015-20172021-2023 performance-based restricted stock unit grant cycle versusexceeded our pre-established adjusted ROIC performance goal and payout of shares was capped at 100% of target, as illustrated below:
Compensation Actions
We took the following actions with respect to our NEOs in 2017:
| | | Compensation Element
| 2017 NEO Compensation Action
| Base salaries
| •
| With respect to NEOs who were employed by us in 2016 and 2017, base salaries increased between 3.2% and 4.2% and on average 3.7% versus 2016, excluding promotions
| Annual cash incentives
| •
| Annual cash incentive bonus payouts were between 73% and 100% of target, and averaged 91% of target
| | •
| Annual cash incentive bonus payout for our CEO was at 100% of target
| Long-term incentives
| •
| Long-term equity incentive awards, consisting of stock options and performance-based restricted stock units (“PBRSUs”), were granted in the same proportion as prior years and were within the median range of our size-adjusted competitive market for each NEO
| | •
| For the 2015 to 2017 PBRSU grant cycle, average award payouts were at 100% of target award opportunities
|
| | ECOLAB - 2018 Proxy Statement
| 29
| | |
![[MISSING IMAGE: bc_performancebased-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_performancebased-pn.jpg) COMPENSATION DISCUSSION AND ANALYSIS
The charts below illustrate our Company’s actual performance relative to our pre-established performance goals as well as our actual award payouts as a percentage of target award opportunities for the annual cash and long-term incentive plans:
* The achievement of adjusted EPS of $4.69 per share actually aligned with a payout of 98% of target under the annual cash incentive plan. The payout was increased to 100% of the target which aligned with adjusted EPS of $4.70 per share. The $0.01 adjustment was made to offset the impact of the sale of the Company’s Equipment Care business on November 1, 2017, as the target level was based upon including a full year’s worth of Equipment Care results. See “Annual Cash Incentives – Performance Goals and Achievement – Corporate,” starting on page 38 for a further discussion of the adjustment.
*Adjusted ROIC is a non-GAAP financial measure that is described in the section starting on page 37 entitled “Adjustments to Reported Financial Results.54 under “Program Elements — Long-Term Equity Incentives — Payout of 2021-2023 PBRSUs.”
| | | 30
Compensation of Our Chief Executive Officer | ECOLAB - 2018 Proxy Statement
| | |
COMPENSATION DISCUSSION AND ANALYSIS
Compensation of ourIn connection with Mr. Beck’s appointment as Chief Executive Officer
The compensation of our CEO is positioned within the median range of our compensation benchmark and is based on the same design elements and performance standards that are applicable to our other corporate officers. For 2017, effective January 1, 2021, the Compensation & Human Capital Management Committee determined to increase the CEO’s base salary by 4.2%, maintain his target annual incentive opportunity at 150% of base salary, and increase his long-term incentive opportunity from $9.5 million to $10 million (a 5.3% change), which is equally allocated to stock options and performance-based restricted stock units.
The chart below illustrates the increase in targetinitially positioned Mr. Beck’s total direct compensation (“TDC”) below the market median range, with the intent to gradually increase towards median over the following years, subject to Mr. Beck’s performance. Accordingly, 2023 TDC for our CEO represents a 20% increase over 2022 but remains 6% below the market median, reflecting the Company’s approach to increase toward the median over a three to four year period. The following reflects each component of Mr. Beck’s TDC for 2017,2023, as well as his aggregate target TDC for 2021, 2022 and 2023 and the total shareholder return for 2017 for the Company and our comparison group.
Target total direct compensation represents the sumrelation of base salary,his target annual incentive plan opportunity, and long-term incentive grant guideline, as summarized below:
TDC to market median: | | ECOLAB - 2018 Proxy Statement
| 31
| | |
![[MISSING IMAGE: tb_christdc-pn.jpg]](/files/DEF 14A/0001104659-24-035047/tb_christdc-pn.jpg)
42ECOLAB PROXY STATEMENT 2024
In addition to reviewing TDC, the Compensation PracticesOur compensation programs encourage executive decision-making that is aligned with the long-term interests of our stockholders. We tie a significant portion of pay to Company performance over a multi-year period. Our Compensation Committee has incorporated the following market-leading governance features into our executive compensation programs:
| | Compensation Philosophy
| We maintain a market median range compensation philosophy for all elements of total direct compensation, with Committee discretion to position our NEOs appropriately relative to that range based on factors such as tenure, past performance, and future potential
| Goal Setting Process
| We have in place a robust planning process to establish financial and business performance metrics for incentive plans
| Performance Measures
| We use different performance measures in our short-term and long-term incentive plans
| Stock Ownership
| We maintain stock ownership guidelines that encourage executives to retain a significant long-term position in our stock and thereby align their interests with the interests of our stockholders
| Change in Control
| We have implemented a balanced change-in-control severance policy that provides our officers severance at two times the sum of base salary plus annual incentive pay at target following a change in control and termination of employment (a so-called “double-trigger”), with no tax gross-ups
| Risk Mitigation
| We employ features to mitigate against our executives taking excessive risk in order to maximize pay-outs, including varied and balanced performance targets, discretionary authority of the Compensation Committee to reduce award pay-outs, bonus caps at 200% of target and a Policy on Reimbursement of Incentive Payments (or so-called “clawback” policy)
| Problematic Practices
| We do not provide or permit “single-trigger” vesting in event of change in control, hedging or pledging of our Company stock, or backdating or repricing of stock option awards
| Employment Agreements
| We do not maintain employment agreements with any of our NEOs
|
The Compensation Committee oversees the design and administration of our executive compensation programs according to the processes and procedures discussed in the Corporate Governance section of this Proxy Statement. The Compensation Committee is advised by an independent compensation consultant, FW Cook.
Pay-Versus-Performance Alignment
We emphasize pay-for-performance and structure our programs to provide incentives for executives to drive business and financial results. We believe that the pay of our executives, particularly our CEO, correlates well with our total shareholder returns; and while our incentive programs help to drive results, they do so without encouraging excessive risk-taking that would threaten the long-term growth of our business.
The Compensation& Human Capital Management Committee annually evaluates how the amount oftotal cash compensation paid aligns with the Company’s size and performance relative to the comparison companies.Company’s peer group, which is described in more detail under
“Compensation Philosophy and Process — Compensation Benchmarking” below. For purposes of this analysis, composite size and performance is calculated based on various measures of company size, profitability, growth, and total shareholder return. CashTotal cash compensation paid represents the sum of actual base salariessalary and annual bonusescash incentive paid to our CEO for each fiscal year. The chart below illustrates how annualtotal cash compensation paid for the NEOsto our CEO has been conservative relative to the Company’s size and performance over the last four years for which such data was available for the comparison companies as of the date of this Proxy Statement.
three years. ![[MISSING IMAGE: lc_payversuas-pn.jpg]](/files/DEF 14A/0001104659-24-035047/lc_payversuas-pn.jpg) ECOLAB PROXY STATEMENT 2024 43
| | ![[MISSING IMAGE: ic_checkcirclegreen-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_checkcirclegreen-pn.gif) WHAT WE DO | | | | ![[MISSING IMAGE: ic_againstcirclered-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_againstcirclered-pn.gif) WHAT WE DON’T DO | | 32
| ECOLAB - 2018 Proxy Statement
| ▪
We pay annual cash compensation to the NEOs that is conservative for our composite size and performance over the last five years relative to our peer group ▪
We grant long-term equity incentives at levels informed by market, including our peer group and other companies directly competing for our talent, using a portfolio of stock options and PBRSUs ▪
We provide an appropriate balance of short- and long-term compensation, with payouts based on our achievement of certain financial metrics and specific business objectives ▪
Our PBRSUs vest based on average annual adjusted ROIC (or organic ROIC, commencing with 2023 awards) goals over a three-year performance period ▪
We maintain maximum payout caps for annual cash incentives and long-term performance awards ▪
We have a robust stock ownership policy for officers ▪
We maintain clawback policies that go beyond minimum NYSE listing standard requirements ▪
We solicit annual “say-on-pay” stockholder votes | | | | ▪
We don’t have excessive perquisites for any of our NEOs ▪
Our compensation programs don’t encourage excessive risk-taking ▪
Our Insider Trading Policy prohibits certain short-term or speculative transactions by insiders in Company securities ▪
We don’t permit hedging or pledging of Company stock ▪
We don’t offer “single trigger” change in control benefits ▪
We don’t provide change-in-control tax gross-ups ▪
We don’t individually negotiate employment agreements with our NEOs | |
| | Say-on-Pay Results and Stockholder Outreach | |
COMPENSATION DISCUSSION AND ANALYSIS
Shareholder Outreach and 2017 Say-on-Pay Results
During 2017, we engaged stockholders holding approximately 50% of our shares concerning a variety of topics, including our executive compensation program. The stockholders did not raise any significant issues with respect to our program. Additionally, atAt the 20172023 Annual Meeting, our stockholders approvedthe advisory vote on an advisory basis the compensation of our NEOs disclosed in that year’s proxy statement,was approved with more than 94%the support of just over 67% of the total votes cast, by holdersreflecting a decrease in the support demonstrated in prior years. Although the advisory vote received the support of shares represented atwell over a majority of the meetingvotes cast, the Compensation & Human Capital Management Committee, the full Board, and management were disappointed with this decline in support and took the voting in favoroutcome seriously.
After publishing our 2023 Proxy and before the 2023 Annual Meeting, we commenced a targeted shareholder outreach campaign to better understand our stockholder’s perspectives on our compensation program. We continued these efforts after the 2023 Annual Meeting. Throughout the spring outreach and late summer/fall outreach, we contacted stockholders holding approximately 53% of our executive compensation proposal. Theshares and held meetings with stockholders holding approximately 48% of our shares. Our Lead Independent Director or the Chair of our Compensation & Human Capital Management Committee took this favorable stockholder support into account in deciding to retainattended several of these meetings, having conversations with stockholders representing almost 36% of our shares. While stockholders generally supported the overall structure and philosophy of our compensation plans and programs in 2017.Program Elements
The principalprogram, we received some constructive feedback relating to the design of certain elements of our executive compensation programs for 2017 are illustrated below:
program. We listened and have implemented program changes, where the Compensation & Human Capital Management Committee determined appropriate, to address this feedback. | | INVESTORS CONTACTED | | | | DISCUSSIONS HELD | | | | 29 INVESTORS | | | | 21 INVESTORS | | | | | | | 53% Outstanding Shares | | | | | | | 48% Outstanding Shares | |
44ECOLAB PROXY STATEMENT 2024
| | WHAT WE HEARD | | | | HOW WE RESPONDED | | ECOLAB - 2018 Proxy Statement
| 33
Long-Term Incentives ▪
All of the stockholders who engaged with us asked about the composition of the equity awards granted to our NEOs. Some stockholders expressed a preference to shift the historical weighting of stock options and PBRSUs (50% each) towards a higher weighting of PBRSUs, to place a stronger emphasis on the performance goals underlying these awards. ▪
While stockholders generally demonstrated support for the use of an ROIC metric, a few stockholders expressed a preference for using multiple performance measures for PBRSUs, rather than the single performance measure used historically (Adjusted ROIC). ▪
Some stockholders indicated that the Company’s historical achievement of the Adjusted ROIC metric applicable to the PBRSUs, as compared to Company performance, suggested that there may be value in incorporating reasonable “stretch” performance goals, with upside for executives who exceed the target goals, in order to drive performance. ▪
Some of our stockholders asked about the rationale for specific larger, special equity awards. Most of these stockholders agreed that such grants, including time-based grants, can be appropriate under the right circumstances, but indicated that they would like more information to enable them to assess the reasonableness of specific grants. | | | | Long-Term Incentives ▪
In response to feedback, the Compensation & Human Capital Management Committee revised the design of the equity awards granted in December as follows: ▪
Increased the relative weighting of PBRSUs to 60% of each NEO’s target equity award opportunity, with stock options making up the remainder. ▪
Shifted from a 3-year average Adjusted ROIC metric for the PBRSUs to a 3-year average Organic ROIC metric, which excludes the impact of acquisitions and certain other adjustments as described starting on page 53 under “Long-Term Equity Incentives” during the performance period. This metric aligns the ROIC calculation with the industry standard. Target Average Organic ROIC goals for the three-year performance period were set at levels that would require significant year-over-year organic growth and focus our management team on our long-term fundamentals. ▪
Added a relative total shareholder return (“TSR”). modifier to the PBRSUs, which may increase or reduce the payout percentage based on our 3-year TSR compared to the S&P 500. If our relative TSR performance is in the 80th percentile or higher, the payout percentage will be increased by 10% and if relative TSR performance is in the 20th percentile or lower, the payout percentage will be decreased by 10%. No modification occurs for relative TSR performance between these percentiles. ▪
Added stretch goals to the PBRSU program, allowing for above-target payouts for overperformance, with payouts ranging from 40% for threshold performance to 200% for maximum performance. The payout opportunity for the 2023 PBRSUs is capped at 200% of target, inclusive of the new relative TSR modifier. ▪
We believe that our current compensation program provides competitive pay, but we recognize that special equity awards can be a meaningful tool to attract and retain key employees. We enhanced our disclosure about the special equity award made in 2023 to an NEO. | | | | Annual Cash Incentives ▪
Numerous stockholders that we spoke with commented that they would like the MIP to include metrics that reflect the achievement of sustainability goals and progress toward our aspirations for creating a diverse, equitable and inclusive workplace for all our associates. | | | | Annual Cash Incentives ▪
The Compensation & Human Capital Management Committee incorporated a new Growth & Impact modifier into the 2023 MIP that adjusts an executive officer’s payout percentage based on the Company’s achievement of reductions in water intensity across our operations and demonstrated progress toward our aspirations for a more diverse, equitable and inclusive workplace. The assessment of performance for the Growth & Impact modifier is made for all officers in the aggregate. The MIP payout is increased by 3%, 6%, or 10%, or reduced by 10% based on achievement of year-over-year progress in these areas as determined by the Compensation & Human Capital Management Committee. Although the modifier may result in an increase in the payout percentage otherwise achieved under the annual incentive plan, in no event will payouts exceed 200% of target. | |
ECOLAB PROXY STATEMENT 2024 45
COMPENSATION DISCUSSIONPHILOSOPHY AND ANALYSIS PROCESSTo align pay levels for NEOs with the Company’s performance, our pay mix places the greatest emphasis on performance-based incentives. Approximately 91% of our CEO’s target total direct compensation (salary, target bonus and the grant date fair value of long-term incentive awards), and approximately 77% of the average target total direct compensation of our other NEOs is performance-based, as summarized below, with equity elements depicted in blue and cash elements depicted in gray:
| | | CEO Pay Mix
Our Compensation Philosophy | Average Other Named Executive Officer Pay Mix
| 
| 
|
Our Analysis
Our analysis indicates that total direct compensation mix for our NEOs on average is generally consistent with the competitive market. The CEO receives a higher proportion of his total direct compensation allocated to performance-based components than non-performance-based components and more allocated to equity-based compensation than cash-based compensation compared to the other NEOs. The higher emphasis on performance-based compensation for the CEO is designed to reward him for driving company performance and creating long-term shareholder value that is a greater responsibility in his position than in the positions of the other NEOs, and is consistent with the competitive market for the CEO position. The level of compensation of our CEO reflects the many responsibilities of serving as CEO of a public company. Accordingly, our CEO’s median range competitive pay levels (including long-term equity awards) reflect his broader scope and greater responsibilities compared to our other NEOs.
Compensation Philosophy
Our
Ecolab’s executive compensation program is designed to meet the following objectives:to: | | ·
| | | Support our corporate vision and long-term financial objectives |
| ·
| | | | | | Communicate the importance of our business results |
| ·
| | | | | | Retain and motivate executives important to our success |
| ·
| | | | | | Reward executives for contributions at a level reflecting our performance | |
Our executive compensation program as a whole, as well as each element, is designed to be market-competitive in order to attract, motivate, and retain our executives in a manner that is in the best interests of our stockholders. Our executive compensationThe program is further designed to to: ▪
reinforce and complement ethical and sustainable management practices, ▪
promote sound risk management, and ▪
align management interests (such as sustainable long-term growth) with those of our stockholders. We believe that our long-term equity incentive program, which typically accounts for at least half of our NEOs’ total annual compensation, is an effective tool in aligning our executives’ interests with those of our stockholders and in incentivizing long-term value creation. | | 34
| ECOLAB - 2018 Proxy Statement
| | |
COMPENSATION DISCUSSION AND ANALYSIS
Our philosophy is to position base salary, annual cash incentives, and long-term equity incentives in the median range of our competitive market, adjusted for the Company’s size. We define the median range as within 15% of the median for base salaries and within 20% of the median for annual cash incentive targets and long-term incentive targets. Foralso design annual cash incentives our philosophy generally is to also position themsuch that they pay out at a level commensurate with the Company’s performance based on adjusted EPS compared to EPS growth in the Standard & Poor’s 500 (“S&P 500”). We position annual cash incentives and long-term incentives to provide, with lower than median compensation for lower than competitive market performance and higher than median compensation for higher than competitive market performance. This approach provides motivation to executives without incentivizing inappropriate risk-taking to achieve pay-outs,payouts, as we believe that the Company’s prospects for growth are generally at least as favorable as the average of the S&P 500. Our Analysis
For 2017, total direct compensation opportunities As described above, TDC opportunity for all our CEO was positioned 6% below market median. All our other NEOs were positioned in the market median range. range, other than Mr. Duijser whose compensation is above market median as described in more detail on page 53.
| | Roles & Responsibilities in the Compensation Process | |
The Compensation & Human Capital Management Committee oversees the design and administration of our executive compensation program as discussed in the Corporate Governance section of this Proxy Statement. The Compensation & Human Capital Management Committee is advised by an independent compensation consultant, FW Cook. As requested from time to time, FW Cook: ▪
provides the Compensation & Human Capital Management Committee with market data regarding various components of executive and director compensation, ▪
reviews the methodology on which compensation is based and designed, and ▪
informs the Compensation & Human Capital Management Committee of market trends in executive and director compensation. FW Cook performs no services for us other than those performed on behalf of the Compensation & Human Capital Management Committee. The Compensation & Human Capital Management Committee has determined to establish total direct compensation opportunities for our CEO towardconsidered the high endindependence of FW Cook in light of SEC rules and NYSE listing standards. In connection with this process, the median rangeCompensation & Human Capital Management Committee has concluded that the work performed by FW Cook and its senior advisor involved in recognitionthe engagement did not raise any conflict of his long tenure and sustained exceptional performance.Compensation Process
interest. For our NEOs, the Compensation & Human Capital Management Committee reviewed and approved all elements of 20172023 compensation, taking into consideration recommendations from our CEO (but not for(other than with respect to his own compensation), as well as competitive market guidance and feedback provided by the Compensation Committee’s independent compensation consultant andFW Cook, information from our human resources staff regarding individual performance, time in position, and internal pay comparisons. The Compensation Committee reviewed and approved all elements of 2017 compensation forWith respect to our CEO, takingthe Compensation & Human Capital Management Committee also took into consideration the Board’s performance assessment of the CEO and recommendations, competitive market guidance and feedback from the Compensation Committee’s independent compensation consultant and our human resources staff.CEO. Recommendations with respect to the compensation of our CEO are not shared with our CEO.CEO until approved by the Compensation Benchmarking& Human Capital Management Committee. The Committee may form and delegate authority to subcommittees as it deems appropriate. To the extent permitted by applicable law, the Committee may also delegate to one or more executive officers of the Company the authority, within guidelines established by the Committee, to approve equity compensation awards under established equity compensation plans of the Company to employees other than those subject to Section 16 of the Exchange Act and other officers of the Company. The Committee may also delegate any non-discretionary administrative authority under Company compensation and benefit plans consistent with any limitations specified in the applicable plans. 46ECOLAB PROXY STATEMENT 2024
| | Compensation Benchmarking | |
For benchmarking purposes, we define our competitive market for compensation data to be a simple average of median compensation from a 19-company comparison21-company peer group and size-adjusted median general industry data from third-party surveys in which we participate. The comparisonpeer group and benchmarking methodology is selectedapproved by the independent compensation consultant based on input from the Company and the Compensation Committee, and is reviewed and approved annually by the Compensation& Human Capital Management Committee in the spring of each year. The independent consultant utilizesyear based on input from FW Cook and management. FW Cook presents an objective selection methodology as follows: | | 1 | | | | Focus on companies in the S&P 500 Materials, Industrials, Life Sciences, or Consumer Staples sectors | | | | 2 | | | | Screen for companies with annual revenues of 1∕4 to 4x the annual revenues of our Company | | | | 3 | | | | Further screen for companies within a reasonable size range in various other measures, such as: ▪
revenue ▪
EBITDA ▪
total assets ▪
total equity ▪
total employees ▪
market capitalization | | | | 4 | | | | Identify companies that meet several other criteria, such as: ▪
significant international operations ▪
including Ecolab as a compensation benchmarking peer ▪
business-to-business focus ▪
not highly cyclical | |
Following this review process methodology that consists ofin 2023, the Compensation & Human Capital Management Committee approved the following steps:21-company peer group for 2023. | | ·
Peer Group | | Focus on
| | 3M Co. | | | | Dover Corp. | | | | Illinois Tool Works Inc. | | | | Agilent Technologies, Inc. ![[MISSING IMAGE: ic_plus-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_plus-pn.gif) | | | | Dow Inc. | | | | Linde plc | | | | Air Products and Chemicals Inc. | | | | DuPont de Nemours Inc. | | | | PPG Industries Inc. | | | | Celanese Corp. | | | | Eastman Chemical Co. | | | | Republic Services Inc. | | | | Cintas Corp. | | | | Eaton Corporation plc | | | | Sherwin-Williams Co. | | | | Clorox Co. | | | | Emerson Electric Co. | | | | Thermo Fisher Scientific Inc. | | | | Danaher Corp. | | | | Honeywell International, Inc. | | | | Waste Management Inc. | |
| | | | | New in 2023: added companies in the chemicals, oil & gas equipment & services,life sciences and industrial conglomerates industry groups |
| ·
| | Screen for companies with annual revenues of one-fourth to four timesdigital technologies industries, reflecting the annual revenues of our Company
|
| ·
| | Further screen for companies within a reasonable size range in various other measures such as annual operating income, total assets, total equity, total employees and market capitalization
|
| ·
| | Identify companies that meet several other criteria, such as significant international operations, inclusionshift in the S&P 500, business-to-business focus,business mix of the Company.
| | | | | | Removed in 2023: General Mills Inc., LyondellBasell Industries NV, and not highly cyclicalRoper Technologies Inc | |
| | ECOLAB - 2018 Proxy Statement
| 35
| | |
COMPENSATION DISCUSSION AND ANALYSIS
The chart below summarizes our Company’s percentile ranking versus the 19 companies selected for the comparisonthis group for 20172023 based on the above selection criteria: 
All financial and market data are taken from Standard & Poor’s Capital IQIQ. ECOLAB PROXY STATEMENT 2024 47
The third‐party general industry surveys used during 20172023 were from from: ▪
Aon Hewitt, Willis Towers Watson and FW Cook. For benchmarking 2017 base salary and annual cash incentive compensation, we used the average of size‐adjusted median compensation data fromRadford ▪
The 2022 Aon Hewitt and Willis Towers Watson, as well as median compensation data from the comparison companies. The 2016 Willis Towers Watson CDB General Industry Executive CompensationRadford U.S. Survey includes 484over 300 organizations that range in revenue from approximately $1 billionmillion to over $42$158 billion. We also used the 2016 Aon Hewitt TCM ▪
Willis Towers Watson ▪
The 2022 Willis Towers Watson General Industry Executive Regression AnalysisCompensation Survey which includes over 400780 organizations that range in revenue from approximately $120$649 million to $152over $31 billion. For benchmarking long‐term incentives, we used the average of the median compensation data yielded by the comparison companies, the 2017 ▪
The 2023 Willis Towers Watson CDB General Industry Executive Compensation Survey and thehas over 800 participants which range in revenue from $647 million to over $33 billion. ▪
FW Cook ▪
The 2023 FW Cook 2017Executive Compensation Survey of Long‐Term Incentives. The 2017 Willis Towers Watson survey has 507over 190 participants which range in revenue from approximately $1 billion to greater than $41 billion. The FW Cook survey has 56 participants which range in revenue from over $5 billion$328 million to over $190$276 billion.Base Salaries
| | APPROACH TO 2023 COMPENSATION BENCHMARKING | | | | For benchmarking 2023 base salary and target annual cash incentives, we used the average of size-adjusted median compensation data from the 2022 Aon Radford survey and 2022 Willis Towers Watson survey, as well as median compensation data from the peer group. | | | | For benchmarking 2023 long-term incentives, we used the average of size-adjusted median compensation data from the 2023 Willis Towers Watson survey and the 2023 FW Cook survey, as well as median compensation data from the peer group. | |
PROGRAM ELEMENTS The principal elements of our executive compensation programs for 2023 are illustrated below: | | COMPENSATION COMPONENT | | | | BASIC DESIGN | | | | PURPOSE | | | | ![[MISSING IMAGE: ic_arrowleft-ko.gif]](/files/DEF 14A/0001104659-24-035047/ic_arrowleft-ko.gif) FIXED![[MISSING IMAGE: ic_arrowright-ko.gif]](/files/DEF 14A/0001104659-24-035047/ic_arrowright-ko.gif) | | | | BASE SALARY | | | | ▪
Calibrated with the median range of the size-adjusted competitive market | | | | ▪
Designed to provide a base wage not subject to Company performance risk ▪
Recognizes individual experiences, skills, and sustained performance | | | | AT RISK | | | | ANNUAL CASH INCENTIVE | | | | ▪
Actual pay varies between 0% and 200% of target ▪
Uses adjusted EPS and, for Messrs. Brown and Duijser, uses enterprise goals, and for all NEOs other than CEO, individual goals ▪
Subject to Growth & Impact modifier, up to the annual cash incentive cap of 200% | | | | ▪
Incentivizes the accomplishment of annual corporate, business, and individual goals, and Impact aspirations ▪
EPS and enterprise goals reflect the performance of all of our businesses | | | | LONG-TERM
EQUITY
INCENTIVES | | | | Stock Options | | | | ▪
Represents 40% of annual long-term incentive award opportunity ▪
Vests 1/3 per year starting on the 1st anniversary of grant date | | | | ▪
Aligns pay to performance by linking value to stock price appreciation and shareholder value creation; value of the award is driven by share price appreciation following the grant date | | | | PBRSUs | | | | ▪
Represents 60% of annual long-term incentive award opportunity ▪
Performance measured on 3-year average organic ROIC, subject to a relative TSR modifier ▪
Actual payout ranges from 0% to 200% of target | | | | ▪
Aligns a portion of equity compensation to a longer-term strategic financial goal coupled with a relative stock price performance measure | | | | OTHER | | | | CHANGE IN CONTROL SEVERANCE COMPENSATION POLICY | | | | ▪
Double trigger ▪
Severance is 2x the sum of base salary and target annual incentive, pro rata actual annual bonus in year of termination, outplacement, and continued medical and dental for up to 18 months | | | | ▪
Applies to all elected officers ▪
Promotes continuity, impartiality, and objectivity in the event of a change in control to enhance stockholder value | |
48ECOLAB PROXY STATEMENT 2024
To align pay levels for NEOs with the Company’s performance, our pay mix places the greatest emphasis on performance-based incentives. As summarized below, 89% of our CEO’s target TDC and 79% of the average target TDC (which excludes any special equity awards) of the remaining NEOs other than our CEO is performance-based. The higher emphasis on performance-based compensation for the CEO is designed to reward him for driving company performance and creating long-term shareholder value given his position and responsibilities in the Company. Target compensation mix does not include any grants of special long-term equity incentives. For more information on our compensation philosophy and process, see page 46. With limited exceptions, such as promotions and executive transitions, the Compensation & Human Capital Management Committee reviews base salaries for our NEOs and other executives annually in February to be effective as ofin April 1 of the current fiscal year, and adjustments are based on on: ▪
changes in our competitive market, ▪
changes in scope of responsibility, ▪
individual performance, and ▪
time in position. Our philosophy is to pay base salaries that are within the median range of our size-adjusted competitive market. When an executive officer is new to his or her position, his or her initial base salary will likelytypically be at the low end of the median range, but ifwith strong performance, is acceptable, his or her base salary will be increased over severala number of years to arrive at the median. | | 36
| ECOLAB - 2018 Proxy Statement
| | |
COMPENSATION DISCUSSION AND ANALYSIS
Salary Increases
For 2016 and 2017, annualized Accordingly, the base salary rates for our NEOs are summarized below:
| | | | | | | | | | | | | | Name | | 2016
Annualized Base
Salary Rate ($) | | 2017
Annualized Base
Salary Rate ($) | | Increase
Percentage(1) | Douglas M. Baker, Jr. | | 1,200,000 | | 1,250,000 | | 4.2 % | Daniel J. Schmechel | | 600,000 | | 625,000 | | 4.2 % | Thomas W. Handley | | 675,000 | | 700,000 | | 3.7 % | Christophe Beck | | 552,500 | | 570,000 | | 3.2 % | Michael A. Hickey | | 552,500 | | 570,000 | | 3.2 % |
| (1)
| | All increases represent merit increases.
|
Our Analysis
For 2017, base salaries accounted for approximately 9% of total compensation forCEO has gradually been increased to the market median range following his appointment as CEO and 23% on average for the four other NEOs. 2017effective January 1, 2021. The base salary rateslevels were within the median range for all of our NEOs. In general,Except as explained above for our CEO, whose increase reflects phased-in adjustments to bring his salary to market median, the 2017 merit salary increases for our other NEOs were in line with the principles and metrics used to deliver the Company’s U.S. salary increases broadly.
Adjustments to Reported Financial Results
The Compensation Committee has authority to adjust the reported diluted EPS2023 annualized base salary rates in effect for our NEOs before and ROIC on which incentive compensation payoutsafter increases are determined in order to eliminate the distorting effect of unusual income or expense items that may occur during a given year and that impact year-over-year growth or return percentages.For purposes of the adjusted EPS performance measure used in oursummarized below:
| | NAME | | | | BEGINNING
ANNUALIZED BASE
SALARY RATE
($) | | | | ANNUALIZED BASE SALARY
RATE FOLLOWING 2023
ANNUAL ADJUSTMENT
($) | | | | INCREASE
PERCENTAGE | | | | Christophe Beck | | | | | | 1,075,000 | | | | | | | 1,300,000 | | | | | | | 20.9% | | | | | Scott D. Kirkland | | | | | | 750,000 | | | | | | | 800,000 | | | | | | | 6.7% | | | | | Darrell R. Brown | | | | | | 750,000 | | | | | | | 800,000 | | | | | | | 6.7% | | | | | Machiel Duijser | | | | | | 585,000 | | | | | | | 625,000 | | | | | | | 6.8% | | | | | Lanesha T. Minnix | | | | | | 615,000 | | | | | | | 650,000 | | | | | | | 5.7% | | |
ECOLAB PROXY STATEMENT 2024 49
The Company maintains an annual cash incentive program a reconciliation of 2017 diluted EPS as reported to 2017 adjusted diluted EPS is summarized below: | | 2017 reported diluted EPS
| $
5.13 | Adjustments:
| | Special (gains) and charges
| $
0.19 | Discrete tax net expense (benefit)
| ($0.63)
| Adjusted diluted EPS
| $
4.69 |
Note: Per-share amounts do not necessarily sum due to rounding. Additional information regarding the composition of the adjustments identified in the table above is contained on pages 33-37 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017.
Reported diluted earnings per share and adjusted EPS for the years 2013 through 2017 are provided in our 2017 Annual Report. We believe that in this context adjusted EPS is a more meaningful measure of the Company’s underlying business performance than reported diluted earnings per share because it provides greater transparency with respect to our results of operations and that it is more useful for period-to-period comparison of results. In addition, we use adjusted EPS internally to evaluate our performance and in making financial and operational decisions.
For purposes of the measurement of divisional and business unit performance goals and in the determination of payouts to executives under our annual cash incentive program, the revenue and operating income performance measures are recorded at fixed currency rates of foreign exchange and adjusted for special gains and charges, as well as certain other exceptional items, such as the results of certain businesses acquired during the year and certain strategic initiatives. We include within special gains and charges items that we believe can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future operating results, as more fully identified on pages 33-35 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. We use these measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our use of these measures provides greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.
| | ECOLAB - 2018 Proxy Statement
| 37
| | |
COMPENSATION DISCUSSION AND ANALYSIS
For purposes of the adjusted ROIC performance measure used in our PBRSU program, we define ROIC as the quotient of after-tax operating income divided by the sum of short-term and long-term debt and shareholders’ equity, less cash and cash equivalents. The PBRSU awards provide for adjustment of the ROIC calculation in the event of a large acquisition (such as the Nalco and Champion transactions) or other significant transaction or event approved by the Board. Considering the significant impact of purchase accounting and special gains and charges related to the Nalco and Champion transactions on the ROIC calculation, for the 2018 to 2020 performance cycle, adjusted ROIC is measured excluding the purchase accounting impact and special gains and charges related to these transactions and is also adjusted for acquisitions, accounting or tax changes, gains or losses from discontinued operations, restructurings, and certain other unusual or infrequently occurring charges during the performance period.
This CD&A contains statements regarding incentive targets and goals. These targets and goals are disclosed in the limited context of the Company’s compensation programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance.
Annual Cash Incentives
The Company maintains annual cash incentive programs for executives referred to as the Management Incentive Plan, or MIP, andMIP. The Compensation & Human Capital Management Performance Incentive Plan, or MPIP. In effect, the MPIPCommittee establishes the maximum bonus payouts for the NEOs, whilegoals under the MIP criteria are used byat its February meeting. In February 2024, the Compensation Committee to guide the exercise of its downward discretion in determining the actual pay-outs which have historically been (and were in 2017) well below the MPIP maximum permitted payouts. As further described under the “Regulatory Considerations” heading on page 44, the annual cash incentive programs have been historically designed and administered in this manner to preserve the federal income tax deductibility of the associated compensation expense by the Company. To determine the 2017 award payments (which were paid in March 2018), the& Human Capital Management Committee reviewed the performance of the NEOs and other executives at its February 2018 meeting prior to filing. With respect to the 2017 awards, the Committee established a performance goal under the MPIP to determine the maximum pay-out potential and then used the goals described below with respect to the2023 MIP to determine whether and to what degree the actual payout amount for each NEO’s annual cash incentive award would be less than the maximum permitted amount.
Target Award Opportunities
payments earned in 2023 (which were paid in March 2024). TARGET AWARD OPPORTUNITIES Under the MIP, we establish annual target award opportunities expressed as a percentage of base salary paid during the year and various award payment limits expressed as a percentage of the target award.year. Our annual cash incentive targets are generally set within the median range relative to our competitive market for each position, and the annual cash incentive plan is structured so that lower performance results in below-market payouts and superior performance drives payouts above the median range. For 2017,No changes were made to the 2023 target award opportunities were withinfor the median range for all our NEOs, and ranged from 75% to 150% of base salary. Minimum and maximum payout opportunities ranged from 40% to 200% of target award opportunity, respectively, with no payout for performance below the minimum level specified.Performance Measures
which are set forth below: | | NAME | | | | MIP TARGET AWARD
(% OF BASE SALARY) | | | | MIP TARGET AWARD
($) | | | | Christophe Beck | | | | | | 150% | | | | | | | 1,865,625 | | | | | Scott D. Kirkland | | | | | | 100% | | | | | | | 787,500 | | | | | Darrell R. Brown | | | | | | 100% | | | | | | | 787,500 | | | | | Machiel Duijser | | | | | | 75% | | | | | | | 461,250 | | | | | Lanesha T. Minnix | | | | | | 85% | | | | | | | 545,063 | | |
OVERVIEW OF PERFORMANCE MEASURES Under the MIP, we use a mix of overall corporate performance, business unit andperformance, individual performance and impact measures to foster cross-divisional cooperation and to assure that executives have a reasonable measure of control over the factors that affect their awards. This performance measure mix varies by executive position.Performance Goals and Achievement - Corporate
Under Payout opportunities range from 0% to 200% of each NEO’s target award opportunity.
▪
ADJUSTED EPS: As in prior years, the MIP, several performance goals are used, including goals measuringprimary measure of overall corporate performance as well as goals for specific business unit performance for those executives who are responsible for these business units. Overall corporate performance in 2017under the 2023 MIP was based on adjusted EPS goals.(or “adjusted diluted EPS”). We believe that adjusted diluted EPS is a better measure of the Company’s underlying business performance than reported diluted EPS because it provides greater transparency with respect to our results of operations, which is more useful for period-to-period comparison of results. We also use adjusted EPS internally in making financial and operational decisions and evaluating our performance. In addition, a total company measure of performance such as adjusted EPS is used as one of the performance measures with respect to our NEOs who manage particular business units because it reinforces our Circle the Customer --— Circle the Globe strategy and fosters cross-divisional cooperation. ▪
| | 38
| ECOLAB - 2018 Proxy Statement
| | |
ENTERPRISE GOAL: For NEOs such as Messrs. Brown and Duijser, whose roles have a significant impact on the performance of all of the Company’s businesses, and a direct impact on the Company’s ability to meet business sales and operating income targets, the 2023 MIP also is based on an enterprise performance goal. This goal is intended to incentivize and reward the NEOs based on the financial performance of Ecolab’s various businesses and overall Ecolab performance. 60% is comprised of a commercial average payout, which represents the aggregate of the payouts for the achievement of business unit sales and/or operating income goals to all employees in the commercial organization over the aggregate of the business unit payouts at target. The remaining 40% of such bonuses are earned based on the Company-wide adjusted EPS, which reflects Ecolab’s overall business performance. ▪
INDIVIDUAL GOALS: We utilize strategic corporate initiatives and goals, as detailed beginning on page 52, which may include human capital and sustainability indicators such as safety and environment, as a part of the individual performance measures to promote sustained company success. ▪
GROWTH & IMPACT MODIFIER: New for 2023 and in response to stockholder feedback, the Compensation & Human Capital Management Committee added a Growth & Impact modifier to the 2023 MIP for officers. The modifier is based on reducing water intensity across our operations and demonstrating progress toward our aspirations for a more diverse, equitable and inclusive workplace. This modifier recognizes that delivering a net positive impact for our associates, in our operations and for our customers, drives performance and innovation, and enables fast growth. The Compensation & Human
50ECOLAB PROXY STATEMENT 2024
Capital Management Committee determined to include this new goal in our annual incentive plan to measure annual progress and ensure continuous progress is made against these important objectives. PERFORMANCE MEASURES AND ANALYSIS ACHIEVEMENT — ADJUSTED EPSIn establishing these goalsthe adjusted EPS goal for 2017,2023, we took into consideration our prior year results, overall economic and market trends, other large companies’ performance expectations, and our anticipated business opportunities, investment requirements, and the competitive situation. The minimum adjusted EPS level was set at $4.40, slightly below our actual adjusted EPS of $4.49 for 2022; however, the target opportunity was set at a level requiring 4% growth and the maximum opportunity at a level requiring 14% growth. For 2017,2023, the adjusted EPS goals were: were as follows: | | PERCENTAGE OF THE TARGET AWARD OPPORTUNITY | | | | ADJUSTED EPS
($) | | Payout at
| 40% of the target award opportunity (minimum level) at(Minimum Level) | | $4.43
| | | | 4.40 | | | Payout at
| 100% of the target award opportunity (target level) at(Target Level) | | $4.70
| | | | 4.67 | | | Payout at
| 140% percent of the target award opportunity (140% level) atLevel) | | $
| | | | 4.85 | | | Payout at
| 200% of the target award opportunity (maximum level) at(Maximum Level) | | $4.95 or greater
| | | | ≥5.12 | | |
Payouts for results between performance levels are interpolated on a straight-line basis. Actual 20172023 adjusted EPS of $5.21 was $4.69above the maximum level resulting in 200% payout with respect to this performance goal. For purposes of the adjusted EPS performance measure used in the MIP, a reconciliation of 2023 diluted EPS as reported to 2023 adjusted diluted EPS is summarized below: | | 2023 reported diluted EPS | | | | | $ | 4.79 | | | | | Adjustments: | | | | | | | | | | | Special (gains) and charges, after tax | | | | | | 0.38 | | | | | Discrete tax net (benefit) expense | | | | | | 0.04 | | | | | Adjusted diluted EPS | | | | | $ | 5.21 | | |
Note: Per-share amounts do not necessarily sum due to rounding. Additional information regarding the composition of the adjustments identified in the table above is contained on pages 32 to 36 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. PERFORMANCE MEASURES AND ACHIEVEMENT — GROWTH & IMPACT MODIFIER In assessing the achievement of the adjusted EPS goal at 98%Growth & Impact modifier for 2023, we considered the necessary steps to achieve our 2030 aspirations for reducing water use intensity across our operations and supporting our diverse, equitable and inclusive workplace. This modifier recognizes that delivering a net positive impact for our associates, in our operations and for our customers, drives performance and innovation, and enables fast growth. The MIP payout is increased by 3%, 6%, or 10%, or reduced by 10%, based on achievement of target. However,year-over-year progress in these areas as determined by the Compensation & Human Capital Management recommendedCommittee. For 2023, the Compensation & Human Capital Management Committee determined that the Compensation Committee exercise its discretion as providedGrowth & Impact modifier should increase the MIP payout by 6% for NEOs, up to a cap of 200% payout under the MIPMIP. This payout level is aligned to exceeding the target set for reduction in water intensity across our operations and adjust the Company'sassessment that performance achievement with respect totowards Ecolab’s aspirations for a diverse, equitable and inclusive workplace demonstrated year-over-year improvement in some, but not all areas. The assessment of performance for the Growth & Impact modifier is made for all officers in the aggregate, and not on an individual basis. Performance indicators may be adjusted EPS from the actual adjusted EPS achieved of $4.69 to $4.70.for acquisitions and divestitures that have a material impact. The Compensation Committee followed Management's recommendation, and as a result, the adjusted EPS pay-outwater impact target was adjusted from 98% of target to 100% of target.by the Compensation & Human Capital Management recommendedCommittee for the $0.01 adjustment for all participants in the MIP to offset the impact of the sale of the Company’s Equipment Care business on November 1, 2017, as the target level was based upon including a full year’s worth of Equipment Care results.Performance Goals and Achievement - Division
For Mr. Handley, who is our President and Chief Operating Officer, Purolite acquisition.
PERFORMANCE MEASURES AND ACHIEVEMENT — ENTERPRISE GOAL 30% of hisMr. Brown’s and 35% of Mr. Duijser’s 2023 MIP annual cash incentive is based uponon the performance of our enterprise goal. Mr. Brown’s and Mr. Duijser’s roles have a 2017 total divisionsignificant impact on the performance of all of the Company’s businesses, and direct impact on the Company’s ability to meet business sales and operating income goal. For 2017,targets. The enterprise performance goal is intended to incentivize and reward these NEOs based on the financial performance of Ecolab’s various businesses and overall Company performance. Performance of the Enterprise Goal is measured 60% on the commercial average payout which is calculated by dividing the sum of all annual cash incentives earned by all employees in the commercial organization by the total division operating income goals were: | 2.3% growth over 2016 total division operating incometarget annual cash incentives for such employees. The resulting average reflects the aggregate commercial performance based on the aggregate payouts for payout at 40% of the target award opportunity (minimum level)
| 7.9% growth over 2016 total division operating income for payout at 100% of the target award opportunity (target level)
| 10.7% growth over 2016 total division operating income for payout at 140% percent of the target award opportunity (140% level)
| 20.3% growth over 2016 total division operating income for payout at 200% of the target award opportunity (maximum level)
|
Payouts for results between performance levels are interpolated on a straight-line basis. Adjusted as noted above, 2017 total division operating income grew 5.3% over 2016 total division operating income resulting in the achievement of the total divisionbusiness unit sales and/or operating income goals. 40% of the Enterprise Goal is measured
ECOLAB PROXY STATEMENT 2024 51
on Company-wide adjusted EPS, which reflects Ecolab’s overall business performance. Because this measure includes aggregate performance across all business units, there is no threshold payout level; however, the maximum payout of 200% of target continues to apply. The commercial average performance was measured at 134%, and EPS was achieved at 200%, resulting in an enterprise goal payout of 160%. Payouts to employees outside of the United States were converted to US$ at 72%fixed currency rates of target.foreign exchange. Business unit performance plan results may be adjusted for special gains and charges, as well as certain other exceptional items, such as the results of certain businesses acquired during the year and certain strategic initiatives not contemplated by the annual business plan, and these adjustments are included in determining the average payouts of the business unit performance plans. We include within special gains and charges items that we believe can significantly affect the period-over-period assessment of operating results and that do not necessarily reflect costs and/or income associated with historical trends and future operating results, as more fully identified on pages 32 to 34 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. PERFORMANCE MEASURES AND ACHIEVEMENT — INDIVIDUAL For twothree of our NEOs namely Messrs. Beckwho hold staff positions — Mr. Kirkland (Chief Financial Officer), Mr. Duijser (Executive Vice President and Hickey who manage particular business units for us, 70% of their annual cash incentive is based upon their respective 2017 business unit performance goals which are measured against the achievement of revenueChief Supply Chain Officer), and operating income goals. The revenueMs. Minnix (Executive Vice President, General Counsel and operating income goals, which are weighted equally, are set forth below.The 2017 revenue goal for Mr. Beck was:
| | 1.6% growth over 2016 business unit revenue for payout at 40% of the target award opportunity (minimum level)
| 3.6% growth over 2016 business unit revenue for payout at 100% of the target award opportunity (target level)
| 4.0% growth over 2016 business unit revenue for payout at 140% percent of the target award opportunity (140% level)
| 8.2% growth over 2016 business unit revenue for payout at 200% of the target award opportunity (maximum level)
|
The 2017 revenue goal for Mr. Hickey was:
| -0.7% growth over 2016 business unit revenue for payout at 40% of the target award opportunity (minimum level)
| 2.5% growth over 2016 business unit revenue for payout at 100% of the target award opportunity (target level)
| 4.0% growth over 2016 business unit revenue for payout at 140% percent of the target award opportunity (140% level)
| 7.0% growth over 2016 business unit revenue for payout at 200% of the target award opportunity (maximum level)
|
The 2017 operating income goal for Mr. Beck was:
| | 2.4% growth over 2016 business unit operating income for payout at 40% of the target award opportunity (minimum level)
| 9.1% growth over 2016 business unit operating income for payout at 100% of the target award opportunity (target level)
| 11.1% growth over 2016 business unit operating income for payout at 140% percent of the target award opportunity (140% level)
| 24.1% growth over 2016 business unit operating income for payout at 200% of the target award opportunity (maximum level)
|
| | ECOLAB - 2018 Proxy Statement
| 39
| | |
COMPENSATION DISCUSSION AND ANALYSIS
The 2017 operating income goal for Mr. Hickey was:
| 1.4% growth over 2016 business unit operating income for payout at 40% of the target award opportunity (minimum level)
| 6.1% growth over 2016 business unit operating income for payout at 100% of the target award opportunity (target level)
| 11.3% growth over 2016 business unit operating income for payout at 140% percent of the target award opportunity (140% level)
| 15.5% growth over 2016 business unit operating income for payout at 200% of the target award opportunity (maximum level)
|
No pay‐out is made with respect to the business unit revenue goal unless the business unit achieves at least the minimum level on its operating income goal. Pay‐outs for results between these two performance levels are interpolated on a straight‐line basis. Adjusted as noted above, revenue growth and operating income growth for the business units managed by Mr. Beck were 4.1% and 3.6%Secretary), respectively, resulting in achievement by Mr. Beck of his business unit goal at 96% of target. Revenue growth and operating income growth for the business units managed by Mr. Hickey were 0.9% and 2.3%, respectively, resulting in achievement by Mr. Hickey of his business unit goal at 61% of target.
Performance Goals and Achievement - Individual
For Mr. Schmechel, who holds a staff position as our Chief Financial Officer, 30% of histheir annual cash incentive is based upon attainment of individual performance goals. This individual component of his staff position awardawards under the MIP is set at 30% of the performance measure mix for annual cash incentives so that achievement of these goals is a component of the award but remains balanced against achievement of corporate performance goals.
The 20172023 individual performance objectives for our Chief Financial Officer are these officers are: ▪
specific, ▪
qualitative, and ▪
achievable with significant effort, and ▪
if achieved, provide meaningful benefit to the Company. Mr. Schmechel’s individual performance goals covered financial, organizational and strategic initiatives, including delivering on financial objectives, developing talent and projects to increase efficient service delivery. Mr. Schmechel | | NEO | | | | INDIVIDUAL PERFORMANCE OBJECTIVES | | | | Scott D. Kirkland | | | | Financial and organizational initiatives, including: ▪
strategic leadership of accounting, audit, financial planning and analytics, treasury, tax, investor relations, shared services, and information services functions, ▪
collaboration with the CEO and Board to develop, execute and evaluate financial and investment strategies aligned with the Company’s growth goals, and ▪
implementation of digital tools to enhance efficiency, accuracy, and decision-making through automation, analytics | | | | Machiel Duijser | | | | Supply chain and organizational initiatives, including: ▪
strategic leadership of global supply chain functions including procurement, planning, production, logistics and customer service, ▪
optimization of key processes to deliver products safely, efficiently, cost effectively and with the highest quality, and ▪
achievement of sustainability commitments, balancing environmental responsibility, social impact, and economic success | | | | Lanesha T. Minnix | | | | Legal and organizational initiatives, including: ▪
strategic leadership of law, regulatory affairs, compliance, safety, health & environment, and government relations functions, ▪
development and oversight of risk management, governance, and compliance strategies to advance company performance and Ecolab’s recognized ethical business culture, and ▪
enablement of business growth through protection of intellectual property, implementation of effective contract language, and integration of Ecolab’s regulatory expertise to deliver customer value | |
52ECOLAB PROXY STATEMENT 2024
2023 ANNUAL CASH INCENTIVE PAYOUT SUMMARY | | NAME | | | | EPS
WEIGHTING
(%) | | | | ENTERPRISE
GOAL
(%) | | | | INDIVIDUAL
WEIGHTING
(%) | | | | WEIGHTED
MIP
TARGET
AWARD
($) | | | | MIP
PERFORMANCE
ACHIEVED
(% OF
WEIGHTED
TARGET) | | | | GROWTH &
IMPACT
MODIFIER
(%) | | | | PAYOUT
BASED ON MIP
PERFORMANCE
($) | | | | ACTUAL
PAYOUT
($) | | | | Christophe Beck | | | | | | 100 | | | | | | | | | | | | | | | | | | | | | 1,865,625 | | | | | | | 200 | | | | | | | | | | | | | | 3,731,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6(1) | | | | | | | 0 | | | | | | | 3,731,250 | | | | | Scott D. Kirkland | | | | | | 70 | | | | | | | | | | | | | | | | | | | | | 551,250 | | | | | | | 200 | | | | | | | | | | | | | | 1,102,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30 | | | | | | | 236,250 | | | | | | | 160 | | | | | | | | | | | | | | 379,059 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6 | | | | | | | 88,894 | | | | | | | 1,570,453 | | | | | Darrell R. Brown | | | | | | 70 | | | | | | | | | | | | | | | | | | | | | 551,250 | | | | | | | 200 | | | | | | | | | | | | | | 1,102,500 | | | | | | | | | | | | | | | | | | | | | 30 | | | | | | | | | | | | | | 236,250 | | | | | | | 160 | | | | | | | | | | | | | | 379,059 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6 | | | | | | | 88,894 | | | | | | | 1,570,453 | | | | | Machiel Duijser | | | | | | 35 | | | | | | | | | | | | | | | | | | | | | 161,438 | | | | | | | 200 | | | | | | | | | | | | | | 322,875 | | | | | | | | | | | | | | | | | | | | | 35 | | | | | | | | | | | | | | 161,438 | | | | | | | 160 | | | | | | | | | | | | | | 259,024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30 | | | | | | | 138,375 | | | | | | | 200 | | | | | | | | | | | | | | 276,750 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6 | | | | | | | 48,235 | | | | | | | 906,887 | | | | | Lanesha T. Minnix | | | | | | 70 | | | | | | | | | | | | | | | | | | | | | 381,544 | | | | | | | 200 | | | | | | | | | | | | | | 763,088 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30 | | | | | | | 163,519 | | | | | | | 160 | | | | | | | | | | | | | | 262,363 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6 | | | | | | | 61,527 | | | | | | | 1,086,980 | | |
(1)
The CEO’s Growth & Impact modifier was paid at 0% because he achieved 72%his maximum payout of his individual target performance goals. The Compensation Committee, with input from the CEO, approved an annual cash incentive of $453,400, including the component based on the Chief Financial Officer’s achievement of his 2017 individual performance goals.2017 Annual Incentive Compensation Pay-Out Summary
200%. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Performance Measure Mix | | | 2017
Base Salary
Earnings ($) | | MIP Target Award Opportunity (% of Base Salary) (%) | | EPS (%) | | Business Unit (%) | | Individual (%) | | MIP Target
Pay-Out Level ($) | | MIP
Performance
Achieved (%) | | Pay-Out Based on MIP
Performance ($) | | Compensation
Committee
Adjustments(1) ($) | | Actual
Payout
($) | Douglas M. | | 1,237,500 | | 150 | | 100 | | | | | | 1,856,250 | | 98 | | 1,819,200 | | 37,100 | | 1,856,300 | Baker, Jr. | | | | | | | | | | | | | | | | | | | | | Daniel J. | | 618,750 | | 80 | | 70 | | | | | | 346,500 | | 98 | | 339,600 | | | | | Schmechel | | | | | | | | | | 30 | | 148,500 | | 72 | | 106,800 | | | | | | | | | | | | | | | | | | | | | 446,400 | | 7,000 | | 453,400 | Thomas W. | | 693,750 | | 90 | | 70 | | | | | | 437,063 | | 98 | | 428,300 | | | | | Handley | | | | | | | | 30 | | | | 187,313 | | 72 | | 134,800 | | | | | | | | | | | | | | | | | | | | | 563,100 | | 8,800 | | 571,900 | Christophe | | 565,625 | | 75 | | 30 | | | | | | 127,266 | | 98 | | 124,700 | | | | | Beck | | | | | | | | 70 | | | | 296,953 | | 96 | | 285,600 | | | | | | | | | | | | | | | | | | | | | 410,300 | | 2,600 | | 412,900 | Michael A. | | 565,625 | | 75 | | 30 | | | | | | 127,266 | | 98 | | 124,700 | | | | | Hickey | | | | | | | | 70 | | | | 296,953 | | 61 | | 182,000 | | | | | | | | | | | | | | | | | | | | | 306,700 | | 2,600 | | 309,300 |
(1)Management recommended thatAlthough the Compensation & Human Capital Management Committee exercise its discretion as provided under the MIP and adjust the Company's performance achievement with respecthas ultimate authority to adjusted earnings per share from the actual adjusted earnings per share achieved of $4.69 to $4.70. The Compensation Committee followed Management's recommendation, and, as a result, the adjusted earnings per share pay-out was adjusted from 98% of target to 100% of target. See “Annual Cash Incentives — Performance Goals and Achievement - Corporate”, beginning at page 38 for a discussion of the reasons for the adjustment. | | 40
| ECOLAB - 2018 Proxy Statement
| | |
COMPENSATION DISCUSSION AND ANALYSIS
Discretionary Adjustments
To recognize individual performance, the Compensation Committee also may increase or decrease an NEO’s payout from the level recommended by applying the MIP performance metrics, (but always subject to the maximum permitted MPIP payout), with input from the CEO (other than as to his or her own award), based on the individual performance of the NEO. This is done to recognize either inferior or superior individual performance in cases where this performance isNEO, they have not fully represented by the performance measures. Nohistorically made such discretionary adjustments were made to an NEO’s payout, except in new hire situations in which the 2017amount of an executive’s annual cash incentive payouts.
is guaranteed, or other exceptional circumstances. The Compensation Committee reviews and approves all adjustments to our overall corporate results and significant adjustments to our business unit performance results. Other than described above, the 20172023 annual cash incentive payouts were made in accordance with the overall corporate results and business unitenterprise or individual performance results established for the NEOs without adjustment. Our Analysis
In 2017 the Compensation Committee set the minimum, target and maximum levels of the adjusted EPS component of the annual incentive so that the intended relative difficulty of achieving the various levels is consistent with the past several years, taking into account current prospects and market considerations. Target award opportunities in 2017 accounted for approximately 17% of total compensation on average for the NEOs receiving all elements of our compensation program and were within the median range of our competitive market for each position. Actual award payments for the NEOs averaged 91% of target award opportunities. The 2017 award payouts are indicative of solid fixed currency organic sales and earnings growth for the Company and differing levels of sales and earnings growth for the business segments during the year.
Long-Term Equity Incentives
| | Long-Term Equity Incentives | |
The Compensation & Human Capital Management Committee grantedmade annual grants of long-term equity incentives to our NEOs and other executives in December 2017,2023, consistent with its core agenda and past practice of granting these incentives at its regularly scheduled December meeting. For 2017, ourOur philosophy is to grant long-term equity incentive program consisted of an annual grant of stock options and PBRSUs, weighted approximately equally in terms of grant value.Our program continues to be based on pre-established grant guidelinesincentives that are calibrated annuallywithin the median range of our size-adjusted competitive market. In 2023, our NEOs received long-term incentives within the median range, other than Mr. Duijser whose long-term incentive grant was above market median, in consideration of his unique skill set and background, which includes experience with products similar to those sold by all of our competitive market on a position-by-position basis for the NEOs. Actual grants may be above or belowbusinesses, as well as his success in implementing step changes in technology and efficiency within our guidelines based on our assessment of individual performance and future potential.supply chain organization. Generally, long-term equity incentives are granted on the same date as our Compensation & Human Capital Management Committee approval date and in no event is the grant date prior to the approval date.
Stock Options
Our stock options have a 10-year contractual exercise term from the date of grant and vest ratably over three years. Our stock options have an exercise price which is the average of the high and low market price on the date of grant. We believe that the use of the average of the high and low market price on the date of the grant removes potential same-day stock volatility. We do not have a program, plan, or practice to time stock optionlong-term equity incentive grants to executives in coordination with the release of material non-public information. From timeThe table below sets forth each NEO’s annual long-term incentive award value at target, as well as the number of target PBRSUs and stock options granted in December 2023.
| | NAME | | | | TARGET LTI AWARD
VALUE
($) | | | | TARGET PBRSUs
GRANTED | | | | STOCK OPTIONS
GRANTED | | | | Christophe Beck | | | | | | 9,000,000 | | | | | 31,333 | | | | | | 80,342 | | | | | Scott D. Kirkland | | | | | | 2,600,000 | | | | | 9,052 | | | | | | 23,210 | | | | | Darrell R. Brown | | | | | | 2,700,000 | | | | | 9,400 | | | | | | 24,103 | | | | | Machiel Duijser | | | | | | 1,600,000 | | | | | 5,570 | | | | | | 14,283 | | | | | Lanesha T. Minnix | | | | | | 1,500,000 | | | | | 5,222 | | | | | | 13,390 | | |
ECOLAB PROXY STATEMENT 2024 53
The material terms of the 2023 annual long-term equity incentive awards are as follows: | | AWARD TYPE | | | | MATERIAL TERMS | | | | PBRSUs | | | | ▪
Cliff-vests after three-year performance period, subject to attainment of three-year average annual organic ROIC goals ▪
Payout ranges from 0% to 200% of the target award, with a threshold payout of 40% of target ▪
Utilizes organic ROIC, instead of the adjusted ROIC used in previous years, to simplify and improve alignment of the ROIC calculation with the industry standard ▪
Set 2024 to 2026 average annual organic ROIC target of 13.4%, with a threshold of 10.0% and a maximum of 15.7%, which is challenging as compared to the actual three-year average annual organic ROIC of 11.2% for each of the 2020 — 2022 and 2021 — 2023 performance periods ▪
Organic ROIC is defined as the quotient of net operating profit after taxes, over the Company’s invested capital determined as total assets less cash and cash equivalents minus total liabilities less short- and long-term debt, as may be adjusted for acquisitions, accounting or tax changes, gains or losses from discontinued operations, and certain other unusual or infrequently occurring charges during the performance period. Invested capital is not adjusted for acquisitions made prior to the reporting period. ▪
Includes relative TSR modifier, which may increase or reduce the payout based on the Company’s three-year TSR compared to the S&P 500 three-year TSR, with performance in the 80th percentile or higher increasing the payout percentage by 10% and performance in the 20th percentile or lower decreasing the payout percentage by 10% (subject to cap on total payout of 200% of target) ▪
No dividend equivalents are paid or accrued on PBRSUs | | | | STOCK OPTIONS | | | | ▪
Vests in equal annual installments over three years ▪
Exercise price equal to the average of the high and low market price on the date of grant, which we believe lessens the impact of potential same-day stock volatility ▪
10-year term from the date of grant | |
PAYOUT OF 2021 TO 2023 PBRSUs Each of our NEOs other than Ms. Minnix held outstanding 2021 to time,2023 PBRSUs granted by the Compensation & Human Capital Management Committee in December 2020 which vested on December 31, 2023. The following chart sets forth the threshold and target average annual adjusted ROIC and the Company’s actual average annual adjusted ROIC performance under the 2021 to 2023 PBRSUs, which resulted in a payout at 100% of target. Adjusted ROIC under the 2021 to 2023 PBRSUs is defined as the quotient of after-tax operating income divided by the sum of short-term and long-term debt and shareholders’ equity, less cash and cash equivalents. Adjusted ROIC is measured excluding the purchase accounting impact and special gains and charges relating to the Nalco and Purolite transactions considering the significant impact of these transactions on the calculation. 54ECOLAB PROXY STATEMENT 2024
2023 SPECIAL EQUITY AWARDS In addition to ourthe annual equity grants, we may make special grants of stock optionsequity awards to our NEOs and other executives in connection with promotions and recruitment, and for general retention purposes. During 2017, we did not make any such special grants of stock optionsIn February 2023, prior to our NEOs. | | ECOLAB - 2018 Proxy Statement
| 41
| | |
COMPENSATION DISCUSSION AND ANALYSIS
Performance-Based Restricted Stock Units
Our PBRSUs cliff-vest after three years, subject to attainment2023 Annual Meeting of three-year average annual adjusted ROIC goals over the performance period. We selected ROIC as the performance measure because it reinforces focus on capital efficiency throughout the organization, is highly correlated with shareholder returns, matches well with our long-standing corporate goal of achieving consistent return on beginning equity and is understood by our external market. As further described under the “Regulatory Considerations” heading on page 44, our PBRSUs have been historically designed and administered in a manner to preserve the federal income tax deductibility of the associated compensation expense by the Company. In this connection,Stockholders, the Compensation Committee annually establishes an adjusted ROIC goal for the executive officers to determine maximum payout potential, with the ability to exercise downward discretion to reduce the actual payout in accordance with the adjusted ROIC goals described below to be applied to a broader group of PBRSU award recipients.
For the 2018 to 2020 performance cycle, 40% of the PBRSUs granted may be earned subject to attainment of a threshold goal of 10% average annual ROIC over the cycle, and 100% of the PBRSUs may be earned subject to attainment of a target goal of 15% average annual ROIC over the cycle, in each case adjusted as described above under the heading “Adjustments to Reported Financial Results” beginning at page 37, with straight-line interpolation for performance results between threshold and target goals. No PBRSUs may be earned if adjusted ROIC is below the threshold goal, and no more than 100% of the PBRSUs may be earned if adjusted ROIC is above the target goal; accordingly, target and maximum are equal. Importantly, the threshold goal exceeds our cost of capital, thereby ensuring that value is created before awards are earned. Excluding the impact of purchase accounting and special gains and charges related to the Nalco and Champion transactions, the Company’s annual adjusted ROIC for 2017 was 22.6%. Dividend equivalents are not paid or accrued on the PBRSUs during the performance period.
Pay-out of Performance-Based Restricted Stock Units Vesting in 2017
The PBRSUs granted by the Committee in December 2014 for the 2015 to 2017 performance cycle vested on December 31, 2017 and the Committee has determined the pay‐out for such PBRSUs, including with respect to Messrs. Baker, Schmechel, Handley, Beck and Hickey, to be 100% of the target opportunity. For the PBRSUs granted in December 2014, the target payout would be earned upon attainment of an average annual ROIC, adjusted as previously described, of 15% over the 2015 through 2017 performance cycle. Consistent with the established formula and definition of adjusted ROIC, the Company’s average annual ROIC over the cycle, excluding the impact of purchase accounting and special gains and charges relating to the Nalco and Champion transactions, was 21.6%. Based upon this performance, the& Human Capital Management Committee approved pay‐outa grant to Mr. Duijser of 100% of the PBRSUs.
Restricted Stock
From time to time, we may make special grants of restricted stock or13,112 restricted stock units subject only(‘‘RSUs’’) valued at approximately $2,000,000.
The RSUs cliff-vest after four years and were granted in recognition of Mr. Duijser’s: ▪
exceptional leadership in navigating the negative external impacts of inflation and post-Covid-19 supply chain complexity, ▪
unique skill set and background, which includes experience with products similar to service-based vesting to our NEOs and other executives in connection with promotions and recruitment, and for general retention purposes. During 2017, we did not make any special grants of restricted stock units to our NEOs.Our Analysis
For the last completed fiscal year, long-term equity incentives accounted for approximately 77% of total target compensation for the CEO and 59% on average for the other NEOs, which is consistent with our competitive market. Actual grants to the NEOs were within the median range forthose sold by all of our NEOs. Our annual practice of granting equity incentivesbusinesses, as well as success in implementing step changes in technology and efficiency within our supply chain organization, and
▪
for retention purposes given the form of stock options and PBRSUs is similar to ourexceptionally competitive market where other forms of long-term equity and cash compensation are typically awardedfor talent in addition to, or in lieu of, stock options. Our selective use of restricted stock or restricted stock units as a retention or recruitment incentive is consistent with our competitive market. We believe that our overall long-term equity compensation cost is within a reasonable range of our competitive market as to our NEOs and also our other employees.this function. | | | 42
Executive Benefits and Perquisites | ECOLAB - 2018 Proxy Statement
| | |
COMPENSATION DISCUSSION AND ANALYSIS
Executive Benefits and Perquisites
Our NEOs participate in all of the same health care, disability, life insurance, pension, and 401(k) benefit plans made available generally to the Company’s U.S. employees.employees, with executive supplements as described in this Proxy Statement. In addition, our NEOs are eligible to participate in in: ▪
a deferred compensation program, ▪
a restoration plansplan for the qualifiedtax-qualified 401(k) andplan, ▪
a restoration pension plans,plan, and ▪
with respect to certain of our NEOs, an executive disability and life benefit and a supplemental retirement benefit. The non-qualified retirement plans supplement the benefits provided under our tax-qualified plans, taking into account compensation and benefits above the IRS limits for qualified plans. The NEOs also receive limited perquisites that are described in more detail in the footnotes to the “Summary Compensation Table, including certain allowancesTable”. Our perquisites account for 0.9% of total compensation for the CEO and limited1.5% of total compensation on average for the other NEOs in 2023. Executive benefits and perquisites received by Mr. Beck related to his relocation.are consistent with our competitive market. The Company has maintained a private aircraft use policy for several years authorizing the use of private aircraft for business and personal use by the Company’s Chairman of the Board and Chief Executive Officer and, under certain circumstances, business use by its directors and certain other executives. Under the policy, personal use of private aircraft by the Chairman of the Board and Chief Executive Officer is limited to $100,000 of unreimbursed usage per year.year, with personal use historically falling far below the limit. Additional information with respect to this perquisite is provided in more detail in the footnotes to the “Summary Compensation Table.Our Analysis
We review our executive benefitsTable”
. The Compensation & Human Capital Management Committee approved an annual commuter allowance of $50,000 for Mr. Brown, Mr. Duijser and perquisites program periodicallyMs. Minnix that is designed to ensure it remains market-competitiveoffset commuting expenses incurred by these executives for our executivestravel to headquarters. None of Mr. Brown, Mr. Duijser and supportable to our stockholders. Excluding allowances and perquisites provided to Mr. Beck to support his relocation, our perquisites account for 1.5% of total compensation for the CEO and the other NEOs receiving all elements of our compensation program in 2017. Executive benefits and perquisites are consistent with our competitive market.Executive Change-In-Control Policy
Ms. Minnix receives any tax gross up on this allowance. OTHER COMPENSATION POLICIES AND CONSIDERATIONS | | Executive Change-In-Control Policy | |
The terms of our Change-In-Control Severance Compensation Policy, including the events constituting a change in control under our policy, are described in the “Potential Payments upon Termination or Change in Control” section of this Proxy Statement. Our policy applies to all elected officers, including the NEOs, except those who are covered by separate change-in-control or similar agreements with the Company or a subsidiary, a circumstance which arises only in the case of an executive having such an agreement with a company we acquire. Such an executive will become covered automatically under the Company’sacquire, which agreements are not renewed after they terminate or expire. The Change-In-Control Severance Compensation Policy when the existing agreements terminate or expire.Our Analysis
We review ouronly provides “double-trigger” severance benefits following a change-in-control, protection periodically to ensure it continues to address the best interests of our stockholders. Our analysis indicates that our change-in-control policy, which is structured as a so-called “double-trigger” policy, promotes the interests of stockholders by mitigating executives’ concerns about the impact a change in control may have on them, thereby allowing the executives to focus on the best interests of stockholders under such circumstances.
Stock Retention
ECOLAB PROXY STATEMENT 2024 55
The Company’s Insider Trading Policy provides that certain short-term or speculative transactions by insiders in Company securities are prohibited at any time. These include: (i)
short-term “in and Ownership GuidelinesWe have in place stock retention and ownership guidelines to encourage our NEOs and other executives to accumulate a significant ownership stake so they are vested in maximizing long-term stockholder returns. Our guidelines provide that the CEO ownout” trading;
(ii)
selling Company stock with a market valueshort; (iii)
purchases of at least six times current base salary. The Company also requires other corporate officers to own Company stock with a market valueon margin; (iv)
pledging of at least three times current base salary. UntilEcolab stock; and (v)
dealing in derivative securities (e.g., options, puts, calls) other than through the Company’s stock ownership guideline is met,incentive plans. Our directors, executive officers (including our CEO, CFONEOs), senior management team, and President are expectedcertain other employees designated from time to retain 100% of all after-tax profit shares from exercise, vesting or payout of equity awards. Our other officers are expected to retain 50% of all after-tax profit shares from exercise, vesting or payout of equity awards until their stock ownership guidelines are met. For purposes of complying with our guidelines, stock is not considered owned if subject to an unexercised stock option or unvested PBRSU. Shares owned outright, legally or beneficially,time by an officer or his or her immediate family members residing in the same household and shares held inGeneral Counsel constitute the 401(k) plan count towards meetingCompany’s “insiders” under the guideline. Our NEOs and other officers may not pledge shares or enter into any risk hedging arrangements with respect to Company stock.policy. | | Stock Retention and Ownership Guidelines | |
| | We maintain stock retention and ownership guidelines to encourage our NEOs and other executives to accumulate a significant ownership stake so they are incentivized to maximize long-term stockholder returns. Until the guideline is met, our CEO, CFO and President and COO are expected to retain 100% of net shares realized from equity awards, with other officers expected to retain 50%. Shares subject to unexercised stock options and unvested RSUs/PBRSUs are not considered owned for purposes of complying with the guidelines. | | | STOCK OWNERSHIP GUIDELINES
| | ECOLAB - 2018 Proxy Statement
| 43
| | |
COMPENSATION DISCUSSION AND ANALYSIS
NEO Stock Ownership Relative to Guidelines
The table below illustrates the standing of each of our NEOs in relation to their respective stock ownership guidelines as of December 29, 2017,31, 2023, based on the closing market price of our Common Stock on such dateDecember 29, 2023 of $134.18$198.35 per share. | | NAME | | | | BASE SALARY
AS OF 12/31/2023
($) | | | | STOCK OWNERSHIP
GUIDELINES | | | | STOCK OWNERSHIP(1)
(#) | | | | MULTIPLE OF 2023
BASE SALARY | | | | Christophe Beck | | | | | | 1,300,000 | | | | | 6x salary | | | | | | 55,791 | | | | | 8.5x salary | | | | Scott D. Kirkland | | | | | | 800,000 | | | | | 3x salary | | | | | | 9,217 | | | | | 2.3x salary | | | | Darrell R. Brown | | | | | | 800,000 | | | | | 3x salary | | | | | | 23,084 | | | | | 5.7x salary | | | | Machiel Duijser | | | | | | 625,000 | | | | | 3x salary | | | | | | 7,399 | | | | | 2.3x salary | | | | Lanesha T. Minnix | | | | | | 650,000 | | | | | 3x salary | | | | | | 1,866 | | | | | 0.6x salary | |
| | | | | | | | | | | | | | | | | | | | 2017
Annualized
Base Salary ($) | | Stock
Ownership Guideline | | Stock
Ownership(1) | | Multiple of
2017 Base Salary | Douglas M. Baker, Jr. | | 1,250,000 | | 6 X salary | | 617,086 | | 66.2 X salary | Daniel J. Schmechel | | 625,000 | | 3 X salary | | 143,593 | | 30.8 X salary | Thomas W. Handley | | 700,000 | | 3 X salary | | 115,970 | | 22.2 X salary | Christophe Beck | | 570,000 | | 3 X salary | | 23,462 | | 5.5 X salary | Michael A. Hickey | | 570,000 | | 3 X salary | | 50,801 | | 12.0 X salary |
(1)
Excludes shares underlying unexercised stock options and unvested RSUs/PBRSUs. | | (1)
Clawback and Compensation Recovery Policies | | Excludes shares underlying unexercised or unvested long-term incentive awards.
|
Our Analysis
Our analysis indicates that our stock retention and ownership guidelines are consistent with the design provisions of other companies disclosing such guidelines, as reported in public SEC filings and as periodically published in various surveys and research reports. Our analysis further indicates that our NEOs are in compliance with our guidelines either by having achieved the ownership guideline or, if the guideline is not yet achieved, by retaining 100% or 50%, as applicable, of all after-tax profit shares from any stock option exercises or restricted stock unit vesting.
Compensation Recovery
The Company’s Board of Directors has adopted a Policy on Reimbursement of Incentive Payments, which was most recently amended in November 2023. Under this policy, requiring the reimbursement of annual cash incentive and long-term equity incentive payments made toif an executive officer due tohas engaged in misconduct (including a material violation of the executive officer’s misconduct,Company’s Code of Conduct), as determined by the Compensation & Human Capital Management Committee, then the Company will, in appropriate circumstances, recoup annual or long-term cash or equity-based incentives or discretionary bonuses (whether based on financial measures, stock price, TSR or non-financial measures), as well as time-based stock options or other equity-based awards (collectively, “incentive compensation”). In addition, in the event of an accounting restatement of the Company’s financial statements due to material non-compliance with any financial reporting requirement under the federal securities laws or if incentive compensation is paid based on a materially inaccurate calculation, the Compensation & Human Capital Management Committee may recoup any excess incentive compensation. Also in 2023, the Company’s Board of Directors adopted a Rule 10D-1 Clawback Policy, which is intended to comply with the requirements of NYSE Listing Standard 303A.14 implementing Rule 10D-1 under the Exchange Act. In the event the Company is required to prepare an accounting restatement of the Company’s financial statements due to material non- compliance with any financial reporting requirement under the federal securities laws, the Company will recover the excess incentive-based 56ECOLAB PROXY STATEMENT 2024
compensation received by any covered executive, including the NEOs, during the prior three fiscal years that exceeds the amount that the executive otherwise would have received had the incentive-based compensation been determined based on the recommendation ofrestated financial statements. COMPENSATION RISK ANALYSIS The Compensation & Human Capital Management Committee has established an annual process for assessing risk in our compensation programs. The Committee has directed management to apply that process to all compensation plans and practices that have the potential to create risks that are reasonably likely to have a material adverse effect on the Company and to report the results to the Compensation & Human Capital Management Committee. EachThe Committee maintains final authority for overseeing risk in our compensation programs. Our risk assessment revealed that our compensation programs do not create risks that are reasonably likely to have a material adverse effect on the Company. In making this determination, we took into account the compensation mix for our employees as well as various risk control and mitigation features of our executive officers has agreed in writing to this policy. This policy was filed with the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 as Exhibit (10)W and is available along with our other SEC filings at our website at www.investor.ecolab.com/earnings-center/sec-filings.Regulatory Considerations
We monitor changes in the tax and accounting regulatory environment when assessing the financial efficiency of the various elements of our executive compensation program. We have designed and administered our annual cash incentives, particularly our stockholder-approved MPIP, and long-term equity incentive plans in a manner that is intended to preserve the federal income tax deductibility of the associated compensation expense.
As part of the recent tax law changes, the exemption from Section 162(m)’s deduction limit for performance-based compensation has been repealed, effective for our 2018 year, such that compensation paid to the NEOs in excess of $1 million will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.
Despite the Compensation Committee’s efforts to structure the MPIP and PBRSUs in a manner intended to be exempt from Section 162(m) and therefore not subject to its deduction limits, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m), including the uncertain scope of the transition relief under the legislation repealing Section 162(m)’s exemption from the deduction limit, no assurance can be given that compensation intended to satisfy the requirements for exemption from Section 162(m) in fact will. Further, the Compensation Committee reserves the right to modify compensation that was initially intended to be exempt from Section 162(m) if it determines that such modifications are consistent with our business needs.
The MPIP was designed to meet the prior requirements of Internal Revenue Code Section 162(m) regarding performance-based compensation and is administered by the Compensation Committee, which selects the participants each year and establishes the annual performance goal based upon performance criteria that it selects, the performance target and a maximum annual cash award dependent on achievement of the performance goal. For 2017, the Compensation Committee selected reported diluted earnings per share as the performance measure under the MPIP. The Compensation Committee
programs, including: | | COMPENSATION PROGRAM RISK CONTROL AND MITIGATION FEATURES | | | | | | | Varied and balanced performance targets | | 44
| ECOLAB - 2018 Proxy Statement
| | | Procedures for incentive pay calculations review | | | | | | | Appropriate incentive payout caps | | | | | | | Discretionary authority of the Compensation & Human Capital Management Committee to reduce award payouts | | | | | | | Internal controls around customer and distributor pricing and contract terms | | | | | | | Stock ownership guidelines | | | | | | | Prohibition on hedging or pledging Company stock | | | | | | | Compensation recovery (“clawback”) policies and the Company’s rights to cancel incentive awards for employee misconduct | |
ECOLAB PROXY STATEMENT 2024 57
COMPENSATION TABLES COMPENSATION DISCUSSION AND ANALYSIS
certifies the extent to which the performance goal has been met and the corresponding amount of the award earned by the participants, with the ability to exercise downward discretion to lower, but not raise, the award to an amount based upon the metrics used for our broader-based MIP cash incentive and to recognize individual performance.
The Compensation Committee has similarly positioned the PBRSUs to meet the prior requirements of Section 162(m). The Compensation Committee annually establishes an adjusted ROIC goal for the executive officers to determine maximum payout potential for Code Section 162(m) purposes, with the ability to exercise downward discretion to reduce the actual payout in accordance with the adjusted ROIC goals to be applied to a broader group of PBRSU award recipients as described above under “Performance-Based Restricted Stock Units.”
We have designed and administered our deferred compensation, equity compensation and change-in-control severance plans to be in compliance with federal tax rules affecting non-qualified deferred compensation. In accordance with FASB Accounting Standards Codification 718, Compensation - Stock Compensation, for financial statement purposes, we expense all equity-based awards over the service period for awards expected to vest, based upon their estimated fair value at grant date. Accounting treatment has not resulted in changes in our equity compensation program design for our NEOs.
| | ECOLAB - 2018 Proxy Statement
| 45
| | |
SUMMARY COMPENSATION TABLE FOR 2017 SUMMARY COMPENSATION TABLE FOR 2017
The following table shows cash and non-cash compensation for the years ended December 31, 2017, 20162023, 2022 and 20152021 for the persons serving as the Company’s “Principal Executive Officer” and “Principal Financial Officer” during the year ended December 31, 20172023 and for the next three most highly-compensated executive officers who were serving in those capacities at December 31, 2017. 2023.| | NAME AND
PRINCIPAL POSITION | | | | YEAR | | | | SALARY(1)
($) | | | | BONUS(1)
($) | | | | STOCK
AWARDS(2)
($) | | | | OPTION
AWARDS(3)
($) | | | | NON-EQUITY
INCENTIVE PLAN
COMPENSATION(1)(4)
($) | | | | CHANGE IN
PENSION VALUE
AND
NON-QUALIFIED
DEFERRED
COMPENSATION
EARNINGS(5)
($) | | | | ALL OTHER
COMPENSATION(6)
($) | | | | TOTAL
($) | | | | Christophe Beck
Chairman and Chief Executive Officer | | | | | | 2023 | | | | | | | 1,243,750 | | | | | | | — | | | | | | | 5,874,624 | | | | | | | 4,055,664 | | | | | | | 3,731,250 | | | | | | | 195,936 | | | | | | | 445,831 | | | | | | | 15,547,055 | | | | | | | 2022 | | | | | | | 1,056,250 | | | | | | | — | | | | | | | 3,613,018 | | | | | | | 3,918,064 | | | | | | | 0 | | | | | | | 0 | | | | | | | 133,088 | | | | | | | 8,720,419 | | | | | | | 2021 | | | | | | | 1,000,000 | | | | | | | — | | | | | | | 2,879,914 | | | | | | | 2,870,215 | | | | | | | 1,426,047 | | | | | | | 0 | | | | | | | 189,713 | | | | | | | 8,365,888 | | | | | Scott D. Kirkland(7)
Chief Financial Officer | | | | | | 2023 | | | | | | | 787,500 | | | | | | | — | | | | | | | 1,697,159 | | | | | | | 1,171,641 | | | | | | | 1,570,453 | | | | | | | 64,270 | | | | | | | 47,165 | | | | | | | 5,338,188 | | | | | | | 2022 | | | | | | | 637,500 | | | | | | | — | | | | | | | 1,385,028 | | | | | | | 1,501,940 | | | | | | | 0 | | | | | | | 21,536 | | | | | | | 42,883 | | | | | | | 3,588,887 | | | | | Darrell R. Brown(7)
President and Chief Operating Officer | | | | | | 2023 | | | | | | | 787,500 | | | | | | | — | | | | | | | 1,762,406 | | | | | | | 1,216,719 | | | | | | | 1,570,453 | | | | | | | 59,090 | | | | | | | 279,330 | | | | | | | 5,675,498 | | | | | | | 2022 | | | | | | | 643,750 | | | | | | | — | | | | | | | 1,204,292 | | | | | | | 1,306,009 | | | | | | | 416,828 | | | | | | | 0 | | | | | | | 101,973 | | | | | | | 3,672,852 | | | | | Machiel Duijser(7)
Executive Vice President and Chief Supply Chain Officer | | | | | | 2023 | | | | | | | 615,000 | | | | | | | — | | | | | | | 3,017,282 | | | | | | | 721,006 | | | | | | | 906,887 | | | | | | | 27,116 | | | | | | | 139,366 | | | | | | | 5,426,657 | | | | | Lanesha T. Minnix(7)
Executive Vice President, General Counsel and Secretary | | | | | | 2023 | | | | | | | 641,250 | | | | | | | — | | | | | | | 979,073 | | | | | | | 675,927 | | | | | | | 1,086,980 | | | | | | | 18,771 | | | | | | | 180,630 | | | | | | | 3,582,631 | | | | | | | 2022 | | | | | | | 340,114 | | | | | | | 1,693,267 | | | | | | | 2,044,326 | | | | | | | 822,806 | | | | | | | 0 | | | | | | | 0 | | | | | | | 51,249 | | | | | | | 4,951,762 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name & Principal Position | | Year | | Salary(1)
($) | | Bonus
($) | | Stock
Awards(2)
($) | | Option
Awards(3)
($) | | Non-Equity
Incentive Plan
Compensation (1)(4)
($) | | Change in
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings(5)
($) | | All Other
Compensation(6)
($) | | Total ($) | Douglas M. Baker, Jr. | | 2017 | | 1,237,500 | | - | | 5,006,515 | | 5,247,902 | | 1,856,300 | | 791,404 | | 243,608 | | 14,383,229 | Chairman of the Board and | | 2016 | | 1,187,500 | | - | | 4,680,970 | | 4,839,616 | | 1,699,100 | | 1,749,879 | | 193,386 | | 14,350,452 | Chief Executive Officer (principal executive officer) | | 2015 | | 1,140,343 | | - | | 4,355,360 | | 4,453,947 | | 0 | | 3,513,831 | | 139,888 | | 13,603,369 | Daniel J. Schmechel | | 2017 | | 618,750 | | - | | 901,233 | | 944,605 | | 453,400 | | 896,678 | | 469,764 | | 4,284,430 | Chief Financial Officer | | 2016 | | 581,250 | | - | | 886,936 | | 916,988 | | 443,100 | | 444,275 | | (307,949) | | 2,964,599 | and Treasurer
(principal financial officer) | | 2015 | | 518,750 | | - | | 822,722 | | 841,312 | | 124,500 | | 1,000,637 | | 278,152 | | 3,586,073 | Thomas W. Handley | | 2017 | | 693,750 | | - | | 1,001,356 | | 1,049,568 | | 571,900 | | 375,567 | | 111,652 | | 3,803,793 | President and | | 2016 | | 661,250 | | - | | 985,497 | | 1,018,869 | | 542,800 | | 240,017 | | 102,600 | | 3,551,034 | Chief Operating Officer | | 2015 | | 615,000 | | - | | 967,909 | | 989,754 | | 150,600 | | 1,027,943 | | 72,235 | | 3,823,441 | Christophe Beck | | 2017 | | 565,625 | | - | | 600,734 | | 629,747 | | 412,900 | | 355,178 | | 149,945 | | 2,714,129 | Executive Vice President | | 2016 | | 548,125 | | - | | 591,253 | | 611,316 | | 400,900 | | 171,790 | | 134,738 | | 2,458,122 | and President – Global Nalco Water | | 2015 | | 530,000 | | - | | 580,745 | | 593,848 | | 295,100 | | 349,476 | | 150,173 | | 2,499,342 | Michael A. Hickey | | 2017 | | 565,625 | | - | | 600,734 | | 629,747 | | 309,300 | | 469,051 | | 99,470 | | 2,673,927 | Executive Vice President | | 2016 | | 543,125 | | - | | 591,253 | | 611,316 | | 451,800 | | 791,405 | | 73,564 | | 3,062,464 | and President – Global Institutional | | 2015 | | 508,750 | | - | | 580,745 | | 593,848 | | 442,600 | | 1,161,591 | | 64,022 | | 3,351,556 |
| (1)
| | Includes amounts deferred under Section 401(k) of the Internal Revenue Code pursuant to the Company’s Savings Plan and ESOP, amounts deferred under a non-qualified mirror 401(k) deferred compensation plan maintained by the Company for a select group of executives, and any salary reductions per Section 125 or Section 132(f)(4) of the Internal Revenue Code.
|
(1)
| (2)
| | Represents the aggregate grant date fair value of performance-based restricted stock unit (PBRSU) award grants during the year in accordance with FASB ASC Topic 718, based on the average daily share price of the Company’s Common Stock at the date of grant, adjusted for the absence of future dividends, and assuming full (maximum) achievement of applicable performance criteria over the performance period. The PBRSU awards cliff-vest after three years, subject to attainment of three-year average annual return on invested capital goals for the Company over the performance period. See Note 11 to the Company’s Consolidated Financial Statements for the year ended December 31, 2017, located at Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, for further discussion of the assumptions used in determining these values. See footnote (1) to the “Grants of Plan-Based Awards for 2017” table on page 48 for a description of the specific performance goals for the PBRSUs.
|
Includes amounts deferred under Section 401(k) of the Internal Revenue Code pursuant to the Company’s Savings Plan and ESOP, amounts deferred under a non-qualified defined contribution deferred compensation plan maintained by the Company for a select group of executives, and any salary reductions per Section 125 or Section 132(f)(4) of the Internal Revenue Code. | (3)
| | Represents the aggregate grant date fair value of stock option grants during the year in accordance with FASB ASC Topic 718 but with no discount for estimated forfeitures. The value of grants has been determined by application of the lattice (binomial)-pricing model. Key assumptions include: risk-free rate of return, expected life of the option, expected stock price volatility and expected dividend yield. See Note 11 to the Company’s Consolidated Financial Statements for the year ended December 31, 2017, located at Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, for further discussion of the assumptions used in determining these values. The specific assumptions used in the valuation of the options granted in 2017 are summarized in the table below:
|
| | | | | | | | | | | | | | | | | | Grant Date | | Risk Free Rate | | Expected Life (years) | | Expected Volatility | | Expected Dividend Yield | 12/06/2017 (all executives) | | 2.19% | | 6.15 | | 22.67% | | 1.20% |
| (4)
| | Represents the annual cash incentive awards earned and paid in respect of 2017 under the Company’s Management Performance Incentive Plan (“MPIP”). The MPIP is discussed in the Compensation Discussion and Analysis beginning at page 38and as part of the table entitled “Grants of Plan-Based Awards For 2017” at page 48.
|
(3)
Represents the aggregate grant date fair value of stock option grants during the year in accordance with FASB ASC Topic 718 but with no discount for estimated forfeitures. The value of grants has been determined by application of the lattice (binomial)-pricing model. Key assumptions include risk-free rate of return, expected life of the option, expected stock price volatility, and expected dividend yield. See Note 11 to the Company’s Consolidated Financial Statements for the year ended December 31, 2023, located at Item 8 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for further discussion of the assumptions used in determining these values. The specific assumptions used in the valuation of the options granted in 2023 are summarized in the table below: | | GRANT DATE | | | | RISK FREE RATE | | | | EXPECTED LIFE
(YEARS) | | | | EXPECTED
VOLATILITY | | | | EXPECTED DIVIDEND
YIELD | | | | 12/06/2023 (all executives) | | | | | | 4.10% | | | | | | | 6.11 | | | | | | | 22.37% | | | | | | | 1.19% | | |
| | 46
| ECOLAB - 2018 Proxy Statement
| | |
58ECOLAB PROXY STATEMENT 2024
(4)
Represents the annual cash incentive awards earned and paid in respect of 2023 under the Company’s MIP. The MIP is discussed in more detail at page 50 and as part of the table entitled “Grants of Plan-Based Awards for 2023” at page 60. (5)
Represents the aggregate change in the actuarial present value of the NEO’s accumulated benefit under the Company’s defined benefit plans as of December 31, 2023 over such amount as of December 31, 2022, except as otherwise noted. The Company’s defined benefit plans include the Pension Plan, the Mirror Pension Plan, the Supplemental Executive Retirement Plan (“SERP”), and the AMP Signature Super — One Ecolab Superannuation Plan (“Australia Plan”) which are discussed beginning at page 64 as part of the table entitled “Pension Benefits for 2023.” Mr. Brown is an inactive participant in the Australia Plan, which is a broad-based pension plan covering certain Australian employees, and no other named executive officer participates in the Australia Plan. The change in the actuarial present value during 2023 of Mr. Brown’s Australia Plan benefit is primarily attributable to changes in actuarial assumptions and increases related to the passage of time and does not reflect any additional accruals for service or compensation earned or paid in 2023. Mr. Brown’s change in pension benefit is accrued in Australian dollars and is reported based on a conversion rate of 1.5140AUD = 1$U.S. on November 30, 2023, and a conversion rate of 1.4736AUD = 1$U.S. on November 30, 2022, using pension measurement dates of November 30, 2023 and November 30, 2022, consistent with the Company’s assumptions under FASB ASC Topic 715 for financial reporting regarding international retirement plans. There are no “above market” earnings under the Ecolab Mirror Savings Plan, a non-qualified defined contribution plan, because all earnings under this plan are calculated at the same rate as earnings on one or more externally managed investments available to participants in Ecolab’s broad-based tax-qualified deferred compensation plans. The Ecolab Mirror Savings Plan is discussed at page 67. (6)
Except as otherwise noted, amounts reported as All Other Compensation include: (a)
Payment by the Company of certain perquisites, including costs relating to the following: (i)
executive physical examinations for Messrs. Kirkland, and Brown; (ii)
the personal use of corporate aircraft by Mr. Beck, with incremental cost calculated using a method that takes into account aircraft fuel expenses and engine reserve expense per flight hour, as well as any landing and parking fees, crew travel expenses, on-board catering costs, and dead-head flight costs attributable to such use; (iii)
in the case of Mr. Brown, the personal use of a company vehicle, as well as tax preparation fees related to his foreign citizenship and a gross up thereon of $1,193; (iv)
in the case of Mr. Brown, Mr. Duijser and Ms. Minnix, $50,000 representing an annual commuter allowance to offset commuting expenses incurred for travel between their residences and corporate headquarters; (v)
in the case of Ms. Minnix, relocation allowance and relocation expense of $52,211, and a gross up thereon of $50,566; (vi)
attendance by Mr. Beck and Mr. Brown at incentive trips and the gross-up thereon in the amounts of $15,037 and $10,683, respectively; (vii)
spousal travel for Mr. Beck and Mr. Brown in the amounts of $28,645 and $34,705, respectively, and the gross up thereon of $27,223 and $25,992, respectively. Amounts do not include certain occasions where the spouses of Mr. Beck, Mr. Brown and Ms. Minnix accompanied them on business trips using corporate aircraft for which no incremental aircraft cost is allocated; and (viii)
business travel and accident insurance for each of the named executive officers for which no incremental cost is allocated to the named executive officers. (b)
Payment by the Company of life insurance premiums in 2023 for Mr. Beck in the amount of $40,238. This program has been closed to new participants. (c)
Payment of matching contributions made by the Company for 2023 as follows: (i)
matching contributions made by the Company under the Company’s tax-qualified defined contribution 401(k) Savings Plan and ESOP available generally to all employees for: Mr. Beck, $17,853; Mr. Kirkland, $17,853; Mr. Brown, $17,853; Mr. Duijser $17,853, and Ms. Minnix, $17,853; and (ii)
matching contributions made or to be made by the Company on base salary and annual cash incentive award earned in respect of 2023 that the executive deferred under a non-qualified defined contribution deferred compensation plan maintained by the Company for a select group of executives, in the following amounts: Mr. Beck, $278,700; Mr. Kirkland, $27,450; Mr. Brown, $121,677; Mr. Duijser $71,513, and Ms. Minnix, $0. The Company maintains a self-funded, supplemental long-term disability benefit plan for certain executives, which benefits each of the named executive officers. No specific allocation of cost is made to any named executive officer prior to the occurrence of a disability. (7)
Mr. Duijser was not an NEO in 2022 and 2021 and Mr. Brown, Mr. Kirkland and Ms. Minnix were not NEOs in 2021. SUMMARY COMPENSATION ECOLAB PROXY STATEMENT 2024 59
| (5)
| | Represents the change in the actuarial present value of the executive officer’s accumulated benefit under the Company’s defined benefit plans as of December 31, 2017 over such amount as of December 31, 2016. The Company’s defined benefit plans include the Pension Plan, the Mirror Pension Plan and the Supplemental Executive Retirement Plan which are discussed beginning at page 52 and as part of the table entitled “Pension Benefits for 2017.” There are no “above market” earnings under the Mirror Savings Plan, a non-qualified defined contribution plan, because all earnings under this plan are calculated at the same rate as earnings on one or more externally managed investments available to participants in the Company’s broad-based tax-qualified deferred compensation plans. The Mirror Savings Plan is discussed beginning at page 56.
|
| (6)
| | Amounts reported as All Other Compensation include:
|
| (a)
| | Payment by the Company of certain perquisites, including costs relating to the following: (i) executive physical examinations for each of the named executive officers; (ii) in the case of Mr. Baker, business entertainment expense and transportation, and $44,893 for the personal use of corporate aircraft, with incremental cost calculated using a method that takes into account aircraft fuel expenses and engine reserve expense per flight hour, as well as any landing and parking fees, crew travel expenses, on-board catering costs and dead-head flight costs attributable to such use; (iii) housing and auto allowances in connection with Mr. Beck’s assignment at the Company’s Naperville worksite, $61,773; (iv) travel of immediate family members, and gross-ups on such amounts of: Mr. Baker, $13,867; Mr. Handley, $4,664; Mr. Beck, $2,980; and Mr. Hickey, $15,531; and (v) business travel and accident insurance for each of the named executive officers for which no incremental cost is allocated to the named executive officers.
|
| (b)
| | Pursuant to the Company’s tax equalization policy, the Company paid tax preparation fees, and a gross-up of $292,503 on foreign income, on behalf of Mr. Schmechel, in connection with income earned during a previous international assignment. The total amount listed in the All Other Compensation Column also reflects $103,184 in foreign taxes paid on Mr. Schmechel’s earnings pursuant to the Company’s tax equalization policy.
|
| (c)
| | Payment by the Company of life insurance premiums in 2017 for: Mr. Baker, $45,967; Mr. Schmechel, $30,896; Mr. Handley, $49,643; Mr. Beck, $22,168; and Mr. Hickey, $30,638.
|
| (d)
| | Payment of matching contributions made by the Company for 2017 as follows: (i) matching contributions made by the Company under the Company’s tax-qualified defined contribution 401(k) Savings Plan and ESOP available generally to all employees for: Messrs. Baker, Schmechel, Handley and Hickey, $10,800; Mr. Beck, $16,200; and (ii) matching contributions made or to be made by the Company on base salary and annual cash incentive award earned in respect of 2017 that the executive deferred under a non-qualified mirror 401(k) deferred compensation plan maintained by the Company for a select group of executives, in the following amounts: Mr. Baker, $112,952; Mr. Schmechel, $32,086; Mr. Handley, $39,826; Mr. Beck, $42,512; and Mr. Hickey, $24,197.
|
| (e)
| | The Company maintains a self-funded, supplemental long-term disability benefit plan for certain executives, which benefits each of Messrs. Baker, Schmechel, Handley, Beck and Hickey. No specific allocation of cost is made to any named executive officer prior to the occurrence of a disability.
|
| | ECOLAB - 2018 Proxy Statement
| 47
| | |
GRANTS OF PLAN-BASED AWARDS FOR 2017 2023| | | | | | | | | | ESTIMATED FUTURE PAYOUTS
UNDER NON-EQUITY INCENTIVE
PLAN AWARDS | | | | ESTIMATED FUTURE PAYOUTS
UNDER EQUITY INCENTIVE
PLAN AWARDS (3)(5) | | | | ALL OTHER
STOCK
AWARDS:
NUMBER
OF
SHARES
OF STOCK
OR
UNITS(4)(5)
(#) | | | | ALL OTHER
OPTION
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS(5)(6)
(#) | | | | EXERCISE
OR BASE
PRICE OF
OPTION
AWARDS(7)
($/SH) | | | | GRANT
DATE FAIR
VALUE OF
STOCK
AND
OPTION
AWARDS(8)
($) | | | | NAME | | | | GRANT
DATE | | | | THRESHOLD(1)
($) | | | | TARGET
($) | | | | MAXIMUM
($) | | | | THRESHOLD(2)
(#) | | | | TARGET
(#) | | | | MAXIMUM
(#) | | | | | Christophe Beck (PEO) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MIP(9) | | | | | | N/A | | | | | | | 671,625 | | | | | | | 1,865,625 | | | | | | | 3,731,250 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 80,342 | | | | | | | 191.03 | | | | | | | 4,055,664 | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 11,280 | | | | | | | 31,333 | | | | | | | 62,666 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 5,874,624 | | | | | Scott D. Kirkland (PFO) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MIP(9) | | | | | | N/A | | | | | | | 232,470 | | | | | | | 787,500 | | | | | | | 1,575,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 23,210 | | | | | | | 191.03 | | | | | | | 1,171,641 | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,259 | | | | | | | 9,052 | | | | | | | 18,104 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 1,697,159 | | | | | Darrell R. Brown | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MIP(9) | | | | | | N/A | | | | | | | 232,470 | | | | | | | 787,500 | | | | | | | 1,575,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 24,103 | | | | | | | 191.03 | | | | | | | 1,216,719 | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,384 | | | | | | | 9,400 | | | | | | | 18,800 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 1,762,406 | | | | | Machiel Duijser | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MIP(9) | | | | | | N/A | | | | | | | 101,291 | | | | | | | 461,250 | | | | | | | 922,500 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | 2010 Stock Incentive Plan | | | | | | 02/26/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 13,112 | | | | | | | — | | | | | | | — | | | | | | | 1,972,963 | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 14,283 | | | | | | | 191.03 | | | | | | | 721,006 | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,005 | | | | | | | 5,570 | | | | | | | 11,140 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 1,044,319 | | | | | Lanesha T. Minnix | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | MIP(9) | | | | | | N/A | | | | | | | 160,902 | | | | | | | 545,063 | | | | | | | 1,090,125 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 13,390 | | | | | | | 191.03 | | | | | | | 675,927 | | | | | 2010 Stock Incentive Plan | | | | | | 12/06/2023 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 1,880 | | | | | | | 5,222 | | | | | | | 10,444 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 979,073 | | |
(1)
Threshold amount is based on achievement of the minimum adjusted EPS performance measure at 40% of target (which also comprises a portion of the enterprise goal), without achievement of the commercial average, assuming the Growth & Impact modifier is not achieved and the negative 10% modifier applies. (2)
Threshold amount is calculated assuming the relative TSR modifier is not achieved and the negative 10% modifier applies. (3)
Amounts reflect the threshold (adjusted as noted in footnote 2 above), target, and maximum number of shares of Company Common Stock that may be earned pursuant to PBRSU awards granted in 2023. No PBRSUs may be earned if organic ROIC is below the threshold goal, and no more than 200% of the PBRSUs may be earned if organic ROIC is above the maximum goal. Payout is further subject to a relative TSR modifier which may increase or reduce the payout percentage based on our 3-year TSR compared to the S&P 500. Dividend equivalents are not paid or accrued during the performance period. See the discussion under the heading “Performance-Based Restricted Stock Units” in the Compensation Discussion and Analysis for more information on these awards, including with respect to the performance goals and relative TSR modifier. (4)
Represents the grant of an RSU award to Mr. Duijser. The award will vest as to 100% of the units on the fourth anniversary of the date of grant. Dividend equivalents are not paid or accrued on unvested units. (5)
If an option holder terminates employment at or after age 55 with five or more years of continuous employment, stock options held at least six months will become immediately exercisable in full and the service-based vesting conditions on PBRSU awards held at least six months will be deemed satisfied but vesting will remain subject to attainment of the performance goals; all unvested RSU awards will terminate and be forfeited. A discussion of the consequences of a change in control on outstanding options, PBRSU awards, and restricted stock awards begins at page 70GRANTS under the heading “Change in Control (Double Trigger).” (6)
Options granted in 2023 have a ten-year contractual exercise term and vest (or will be exercisable) over three years, on a cumulative basis, as to one third of the option shares on the first and second anniversaries of the date of grant and as to the remaining option shares on the third anniversary. 60ECOLAB PROXY STATEMENT 2024
TABLE OF PLAN-BASED AWARDS FOR 2017 | | | | | | | | | | | | | | | | op | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Future Payouts Under | | Estimated Future Payouts Under | | | | | | | | | | | | | | | Non-Equity Incentive Plan Awards | | Equity Incentive Plan Awards (1) (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other | | All Other | | | | | | | | | | | | | | | | | | | | | | | Stock | | Option | | | | Closing | | | | | | | | | | | | | | | | | | | Awards: | | Awards: | | Exercise | | Market | | Grant Date | | | | | | | | | | | | | | | | | Number | | Number | | or Base | | Price of | | Fair Value | | | | | | | | | | | | | | | | | of Shares | | of Securities | | Price of | | Stock on | | of Stock | | | | | | | | | | | | | | | | | of Stock | | Underlying | | Option | | Grant | | and Option | | | Grant | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | or Units | | Options(2)(3) | | Awards(4) | | Date(4) | | Awards(5) | Name | | Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#) | | (#) | | ($/Sh) | | ($/Sh) | | ($) | Douglas M. Baker, Jr. (PEO) | | | | | | | | | | | | | | | | | | | | | | | | | MPIP(6) | | N/A | | 742,600 | | 1,856,300 | | 3,712,600 | | - | | - | | - | | - | | - | | - | | - | | - | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | - | | - | | - | | - | | 172,742 | | 137.087 | | 136.88 | | 5,247,902 | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | 15,202 | | 38,003 | | 38,003 | | - | | - | | - | | - | | 5,006,515 | Daniel J. Schmechel (PFO) | | | | | | | | | | | | | | | | | | | | | | | | | MPIP(6) | | N/A | | 198,100 | | 495,100 | | 990,100 | | - | | - | | - | | - | | - | | - | | - | | - | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | - | | - | | - | | - | | 31,093 | | 137.087 | | 136.88 | | 944,605 | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | 2,737 | | 6,841 | | 6,841 | | - | | - | | - | | - | | 901,233 | Thomas W. Handley | | | | | | | | | | | | | | | | | | | | | | | | | MPIP(6) | | N/A | | 249,800 | | 624,400 | | 1,248,800 | | - | | - | | - | | - | | - | | - | | - | | - | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | - | | - | | - | | - | | 34,548 | | 137.087 | | 136.88 | | 1,049,568 | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | 3,041 | | 7,601 | | 7,601 | | - | | - | | - | | - | | 1,001,356 | Christophe Beck | | | | | | | | | | | | | | | | | | | | | | | | | MPIP(6) | | N/A | | 169,700 | | 424,300 | | 848,500 | | - | | - | | - | | - | | - | | - | | - | | - | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | - | | - | | - | | - | | 20,729 | | 137.087 | | 136.88 | | 629,747 | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | 1,824 | | 4,560 | | 4,560 | | - | | - | | - | | - | | 600,734 | Michael A. Hickey | | | | | | | | | | | | | | | | | | | | | | | | | MPIP(6) | | N/A | | 169,700 | | 424,300 | | 848,500 | | - | | - | | - | | - | | - | | - | | - | | - | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | - | | - | | - | | - | | 20,729 | | 137.087 | | 136.88 | | 629,747 | 2010 Stock Incentive Plan | | 12/06/2017 | | - | | - | | - | | 1,824 | | 4,560 | | 4,560 | | - | | - | | - | | - | | 600,734 |
| (1)
| | Amounts reflect the threshold, target and maximum number of shares of Company Common Stock that may be earned pursuant to performance-based restricted stock unit (PBRSU) awards granted in 2017. No PBRSUs may be earned if adjusted ROIC is below the threshold goal, and no more than 100% of the PBRSUs may be earned if adjusted ROIC is above the target goal; accordingly, target and maximum are equal. Dividend equivalents are not paid or accrued during the performance period. See the discussion under the heading “Performance-Based Restricted Stock Units” in the Compensation Discussion and Analysis for more information on these awards, including with respect to the target and maximum performance goals.
|
| (2)
| | Options granted in 2017 have a ten-year contractual exercise term and vest (or will be exercisable) over three years, on a cumulative basis, as to one third of the option shares on the first and second anniversaries of the date of grant and as to the remaining option shares on the third anniversary.
|
| (3)
| | If a holder terminates employment at or after age 55 with five or more years of continuous employment, stock options held at least six months will become immediately exercisable in full and the service-based vesting conditions on PBRSU awards held at least six months will be deemed satisfied but vesting will remain subject to attainment of the performance goals; all unvested restricted stock unit awards will terminate and be forfeited. A discussion of the consequences of a change in control on outstanding options, PBRSU awards and restricted stock awards begins at page 61 under the heading “Change in Control.”
|
| (4)
| | Each of the stock options granted to our named executive officers during the year ended December 31, 2017 and reported in the table above were granted on the same date as our Compensation Committee approval date and have an exercise price which is the average of the high and low market price on the date of grant. We believe that the use of the average of the high and low market price on the date of the grant removes potential same-day stock volatility.
|
| (5)
| | Represents the grant date fair value of each equity award, computed in accordance with FASB ASC Topic 718. With respect to stock options, the value has been determined by application of the lattice (binomial)-pricing model, based upon the terms of the option grant and Ecolab’s stock price performance history as of the date of the grant. Key assumptions include: risk-free rate of return, expected life of the option, expected stock price volatility and expected dividend yield. The specific assumptions used in the valuation of these options are located in footnote (3) to the Summary Compensation Table at page 46. With respect to PBRSUs, the value has been determined based on the maximum award payout, consistent with the estimate of aggregate compensation cost to be recognized over the three-year vesting period of the award. See footnote (1) above for a description of the performance goals and performance period.
|
| | 48
| ECOLAB - 2018 Proxy Statement
| | |
(7)
Each of the stock options granted to our NEOs during the year ended December 31, 2023 and reported in the table above were granted on the same date as our Compensation & Human Capital Management Committee approval date and have an exercise price which is the average of the high and low market price on the date of grant. We believe that the use of the average of the high and low market price on the date of the grant removes potential same-day stock volatility. (8)
Represents the grant date fair value of each equity award, computed in accordance with FASB ASC Topic 718. With respect to stock options, the value has been determined by application of the lattice (binomial)-pricing model, based upon the terms of the option grant and Ecolab’s stock price performance history as of the date of the grant. Key assumptions include: ▪
risk-free rate of return, ▪
expected life of the option, ▪
expected stock price volatility, and ▪
expected dividend yield. The specific assumptions used in the valuation of these options are located in footnote (3) to the “Summary Compensation Table” at page 58. With respect to PBRSUs, the value has been determined based on the average daily share price of the Company’s Common Stock at the date of the grant, adjusted for the absence of future dividends, and assuming the target award payout, consistent with the estimate of aggregate compensation cost to be recognized over the three-year vesting period of the award. See footnote (3) above for a description of the performance goals and performance period. With respect to RSUs, the value has been determined based on the average daily share price of the Company’s Common Stock at the date of the grant, adjusted for the absence of future dividends. (9)
The Company maintains an annual cash incentive program for executives referred to as the MIP, which is discussed in the Compensation Discussion and Analysis under the heading “Annual Cash Incentives,” including detail regarding the MIP performance Growth & Impact modifier. In the case of the NEO participants, the potential payouts that could be earned under the MIP for 2023 and that would be used to guide the Committee’s discretion under the MIP are noted in the MIP row of the above table. Amounts shown are based on the base salary earned during 2023. Actual payouts to each of the NEOs with respect to 2023 are included under the Non-Equity Incentive Plan Compensation column in the “Summary Compensation Table” at page 58. Each award is subject to and interpreted in accordance with the terms and conditions of the MIP, and no amount will be paid under the MIP unless and until the Committee has determined the extent to which the applicable performance goal has been met, the corresponding amount of the award earned by the participant, and the degree to which the Committee chooses to exercise its permitted discretion under the MIP. GRANTSECOLAB PROXY STATEMENT 2024 61
| (6)
| | The Company maintains annual cash incentive programs for executives referred to as the Management Incentive Plan, or MIP, and Management Performance Incentive Plan, or MPIP, which are discussed in the Compensation Discussion and Analysis under the headings “Annual Cash Incentives” and “Regulatory Considerations,” including detail regarding the MPIP and MIP performance goals. In the case of the named executive officer participants, the potential payouts that could be earned under the MIP for 2017 and that would be used to guide the Committee’s discretion under the MPIP are noted in the MPIP row of the above table. Actual payouts to each of the named executive officers with respect to 2017 are included under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table at page 46. Each award is subject to and interpreted in accordance with the terms and conditions of the MPIP or MIP, as applicable, and no amount will be paid under the MPIP or the MIP unless and until the Committee has determined the extent to which the applicable performance goal has been met, the corresponding amount of the award earned by the participant and the degree to which the Committee chooses to exercise its permitted discretion under the MPIP.
|
| | ECOLAB - 2018 Proxy Statement
| 49
| | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2017 2023| | | | | | OPTION AWARDS | | | | STOCK AWARDS | | | | NAME | | | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS
(#)
EXERCISABLE | | | | NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
OPTIONS
(#)
UNEXERCISABLE(1) | | | | EQUITY
INCENTIVE
PLAN
AWARDS:
NUMBER OF
SECURITIES
UNDERLYING
UNEXERCISED
UNEARNED
OPTIONS
(#) | | | | OPTION
EXERCISE
PRICE
($) | | | | OPTION
EXPIRATION
DATE | | | | NUMBER
OF
SHARES
OR UNITS
OF STOCK
THAT
HAVE NOT
VESTED
(#) | | | | MARKET
VALUE OF
SHARES OR
UNITS OF
STOCK
THAT HAVE
NOT
VESTED
($) | | | | EQUITY
INCENTIVE
PLAN AWARDS:
NUMBER OF
UNEARNED
SHARES,
UNITS, OR
OTHER RIGHTS
THAT HAVE
NOT VESTED(2)
(#) | | | | EQUITY
INCENTIVE PLAN
AWARDS:
MARKET OR
PAYOUT VALUE
OF UNEARNED
SHARES, UNITS,
OR OTHER
RIGHTS THAT
HAVE NOT
VESTED(2)
($) | | | | Christophe Beck (PEO) | | | | | | 24,471 | | | | | | | 0 | | | | | | | — | | | | | | | 107.685 | | | | | | | 12/03/24 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 23,071 | | | | | | | 0 | | | | | | | — | | | | | | | 119.120 | | | | | | | 12/02/25 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 23,833 | | | | | | | 0 | | | | | | | — | | | | | | | 117.730 | | | | | | | 12/07/26 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 20,729 | | | | | | | 0 | | | | | | | — | | | | | | | 137.087 | | | | | | | 12/06/27 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 16,287 | | | | | | | 0 | | | | | | | — | | | | | | | 158.515 | | | | | | | 12/04/28 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 29,957 | | | | | | | 0 | | | | | | | — | | | | | | | 184.390 | | | | | | | 12/03/29 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 50,759 | | | | | | | 0 | | | | | | | — | | | | | | | 221.410 | | | | | | | 12/03/30 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 40,165 | | | | | | | 20,083 | | | | | | | — | | | | | | | 223.780 | | | | | | | 12/01/31 | | | | | | | — | | | | | | | — | | | | | | | 13,255 | | | | | | | 2,629,129 | | | | | | | 35,288 | | | | | | | 70,577 | | | | | | | — | | | | | | | 148.495 | | | | | | | 12/07/32 | | | | | | | — | | | | | | | — | | | | | | | 25,408 | | | | | | | 5,039,677 | | | | | | | 0 | | | | | | | 80,342 | | | | | | | — | | | | | | | 191.030 | | | | | | | 12/06/33 | | | | | | | — | | | | | | | — | | | | | | | 31,333 | | | | | | | 6,214,901 | | | | | Scott D. Kirkland (PFO) | | | | | | 2,753 | | | | | | | 0 | | | | | | | — | | | | | | | 107.685 | | | | | | | 12/03/24 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,884 | | | | | | | 0 | | | | | | | — | | | | | | | 119.120 | | | | | | | 12/02/25 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,972 | | | | | | | 0 | | | | | | | — | | | | | | | 117.730 | | | | | | | 12/07/26 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 4,146 | | | | | | | 0 | | | | | | | — | | | | | | | 137.087 | | | | | | | 12/06/27 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,189 | | | | | | | 0 | | | | | | | — | | | | | | | 158.515 | | | | | | | 12/04/28 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 3,159 | | | | | | | 0 | | | | | | | — | | | | | | | 184.390 | | | | | | | 12/03/29 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 4,230 | | | | | | | 0 | | | | | | | — | | | | | | | 221.410 | | | | | | | 12/03/30 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 11,714 | | | | | | | 5,858 | | | | | | | — | | | | | | | 223.780 | | | | | | | 12/01/31 | | | | | | | — | | | | | | | — | | | | | | | 3,866 | | | | | | | 766,821 | | | | | | | 13,527 | | | | | | | 27,055 | | | | | | | — | | | | | | | 148.495 | | | | | | | 12/07/32 | | | | | | | — | | | | | | | — | | | | | | | 9,740 | | | | | | | 1,931,929 | | | | | | | 0 | | | | | | | 23,210 | | | | | | | — | | | | | | | 191.030 | | | | | | | 12/06/33 | | | | | | | — | | | | | | | — | | | | | | | 9,052 | | | | | | | 1,795,464 | | | | | Darrell R. Brown | | | | | | 10,000 | | | | | | | 0 | | | | | | | — | | | | | | | 117.730 | | | | | | | 12/07/26 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 17,274 | | | | | | | 0 | | | | | | | — | | | | | | | 137.087 | | | | | | | 12/06/27 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 16,287 | | | | | | | 0 | | | | | | | — | | | | | | | 158.515 | | | | | | | 12/04/28 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 13,072 | | | | | | | 0 | | | | | | | — | | | | | | | 184.390 | | | | | | | 12/03/29 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 14,664 | | | | | | | 0 | | | | | | | — | | | | | | | 221.410 | | | | | | | 12/03/30 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 9,372 | | | | | | | 4,686 | | | | | | | — | | | | | | | 223.780 | | | | | | | 12/01/31 | | | | | | | — | | | | | | | — | | | | | | | 3,093 | | | | | | | 613,497 | | | | | | | 11,762 | | | | | | | 23,526 | | | | | | | — | | | | | | | 148.495 | | | | | | | 12/07/32 | | | | | | | — | | | | | | | — | | | | | | | 8,469 | | | | | | | 1,679,826 | | | | | | | 0 | | | | | | | 24,103 | | | | | | | — | | | | | | | 191.030 | | | | | | | 12/06/33 | | | | | | | — | | | | | | | — | | | | | | | 9,400 | | | | | | | 1,864,490 | | | | | Machiel Duijser | | | | | | 13,536 | | | | | | | 0 | | | | | | | — | | | | | | | 221.410 | | | | | | | 12/03/30 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 8,033 | | | | | | | 4,017 | | | | | | | — | | | | | | | 223.780 | | | | | | | 12/01/31 | | | | | | | 13,112(3) | | | | | | | 2,600,765 | | | | | | | 2,651 | | | | | | | 525,826 | | | | | | | 8,469 | | | | | | | 16,939 | | | | | | | — | | | | | | | 148.495 | | | | | | | 12/07/32 | | | | | | | — | | | | | | | — | | | | | | | 6,098 | | | | | | | 1,209,538 | | | | | | | 0 | | | | | | | 14,283 | | | | | | | — | | | | | | | 191.030 | | | | | | | 12/06/33 | | | | | | | — | | | | | | | — | | | | | | | 5,570 | | | | | | | 1,104,810 | | | | | Lanesha T. Minnix | | | | | | 7,410 | | | | | | | 14,822 | | | | | | | — | | | | | | | 148.495 | | | | | | | 12/07/32 | | | | | | | 5,382(4) | | | | | | | 1,067,520 | | | | | | | 5,336 | | | | | | | 1,058,396 | | | | | | | 0 | | | | | | | 13,390 | | | | | | | — | | | | | | | 191.030 | | | | | | | 12/06/33 | | | | | | | — | | | | | | | — | | | | | | | 5,222 | | | | | | | 1,035,784 | | |
(1)
Stock options have a ten-year contractual exercise term and vest ratably on the first three anniversaries of the date of grant, subject to the post-termination and change-in-control provisions generally described on page 68 under the heading “Potential Payments Upon Termination or Change in Control.” OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2017
| | | | | | | | | | | | | | | | | |
That Have
Not Vested(2)
($)
| | | | Option Awards | | Stock Awards | Name | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1) | |
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
| | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number
of Shares or
Units of Stock
That Have
Not Vested
(#) | | Market Value
of Shares or
Units of Stock
That Have
Not Vested
($) | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have
Not Vested(2)
(#) | | Equity
Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units or Other Rights
That Have
Not Vested(2)
($) | Douglas M. Baker, Jr. | | 160,100 | | 0 | | - | | 48.055000 | | 12/01/20 | | - | | - | | - | | - | (PEO) | | 192,100 | | 0 | | - | | 55.595000 | | 12/01/21 | | - | | - | | - | | - | | | 195,800 | | 0 | | - | | 71.540000 | | 12/05/22 | | - | | - | | - | | - | | | 150,650 | | 0 | | - | | 103.265000 | | 12/04/23 | | - | | - | | - | | - | | | 163,139 | | 0 | | - | | 107.685000 | | 12/03/24 | | - | | - | | - | | - | | | 115,357 | | 57,679 | | - | | 119.120000 | | 12/02/25 | | - | | - | | 38,068 | | 5,107,964 | | | 62,893 | | 125,786 | | - | | 117.730000 | | 12/07/26 | | - | | - | | 41,509 | | 5,569,678 | | | 0 | | 172,742 | | - | | 137.087000 | | 12/06/27 | | - | | - | | 38,003 | | 5,099,242 | | | | | | | - | | | | | | - | | - | | | | | Daniel J. Schmechel | | 14,500 | | 0 | | - | | 48.055000 | | 12/01/20 | | - | | - | | - | | - | (PFO) | | 15,400 | | 0 | | - | | 55.595000 | | 12/01/21 | | - | | - | | - | | - | | | 22,800 | | 0 | | - | | 71.540000 | | 12/05/22 | | - | | - | | - | | - | | | 27,980 | | 0 | | - | | 103.265000 | | 12/04/23 | | - | | - | | - | | - | | | 32,628 | | 0 | | - | | 107.685000 | | 12/03/24 | | - | | - | | - | | - | | | 21,790 | | 10,895 | | - | | 119.120000 | | 12/02/25 | | - | | - | | 7,191 | | 964,888 | | | 11,916 | | 23,834 | | - | | 117.730000 | | 12/07/26 | | - | | - | | 7,865 | | 1,055,326 | | | 0 | | 31,093 | | - | | 137.087000 | | 12/06/27 | | - | | - | | 6,841 | | 917,925 | Thomas W. Handley | | 42,300 | | 0 | | - | | 55.595000 | | 12/01/21 | | - | | - | | - | | - | | | 52,200 | | 0 | | - | | 71.540000 | | 12/05/22 | | - | | - | | - | | - | | | 43,040 | | 0 | | - | | 103.265000 | | 12/04/23 | | - | | - | | - | | - | | | 40,785 | | 0 | | - | | 107.685000 | | 12/03/24 | | - | | - | | - | | - | | | 25,634 | | 12,818 | | - | | 119.120000 | | 12/02/25 | | - | | - | | 8,460 | | 1,135,163 | | | 13,240 | | 26,482 | | - | | 117.730000 | | 12/07/26 | | - | | - | | 8,739 | | 1,172,599 | | | 0 | | 34,548 | | - | | 137.087000 | | 12/06/27 | | - | | - | | 7,601 | | 1,019,902 | Christophe Beck | | 2,500 | | 0 | | - | | 45.665000 | | 12/02/19 | | - | | - | | - | | - | | | 25,100 | | 0 | | - | | 48.055000 | | 12/01/20 | | - | | - | | - | | - | | | 30,700 | | 0 | | - | | 55.595000 | | 12/01/21 | | - | | - | | - | | - | | | 32,600 | | 0 | | - | | 71.540000 | | 12/05/22 | | - | | - | | - | | - | | | 25,830 | | 0 | | - | | 103.265000 | | 12/04/23 | | - | | - | | - | | - | | | 24,471 | | 0 | | - | | 107.685000 | | 12/03/24 | | - | | - | | - | | - | | | 15,380 | | 7,691 | | - | | 119.120000 | | 12/02/25 | | - | | - | | 5,076 | | 681,098 | | | 7,944 | | 15,889 | | - | | 117.730000 | | 12/07/26 | | - | | - | | 5,243 | | 703,506 | | | 0 | | 20,729 | | - | | 137.087000 | | 12/06/27 | | - | | - | | 4,560 | | 611,861 | Michael A. Hickey | | 25,000 | | 0 | | - | | 55.595000 | | 12/01/21 | | - | | - | | - | | - | | | 32,600 | | 0 | | - | | 71.540000 | | 12/05/22 | | - | | - | | - | | - | | | 25,830 | | 0 | | - | | 103.265000 | | 12/04/23 | | - | | - | | - | | - | | | 24,471 | | 0 | | - | | 107.685000 | | 12/03/24 | | - | | - | | - | | - | | | 15,380 | | 7,691 | | - | | 119.120000 | | 12/02/25 | | - | | - | | 5,076 | | 681,098 | | | 7,944 | | 15,889 | | - | | 117.730000 | | 12/07/26 | | - | | - | | 5,243 | | 703,506 | | | 0 | | 20,729 | | - | | 137.087000 | | 12/06/27 | | - | | - | | 4,560 | | 611,861 |
| (1)
| | Stock options have a ten-year contractual exercise term and vest ratably on the first three anniversaries of the date of grant, subject to the post-termination and change-in-control provisions generally described on page 58 under the heading “Potential Payments Upon Termination or Change in Control.”
|
| | 50
| ECOLAB - 2018 Proxy Statement
| | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR 2017
The vesting dates of the respective stock options held at December 31, 20172023 that were unexercisable are summarized in the table below: | | NAME | | | | OPTION GRANT
DATE | | | | SECURITIES VESTING
DECEMBER 2024
(#) | | | | SECURITIES VESTING
DECEMBER 2025
(#) | | | | SECURITIES VESTING
DECEMBER 2026
(#) | | | | OPTION
EXPIRATION
DATE | | | | Christophe Beck (PEO) | | | | | | 12/01/21 | | | | | | | 20,083 | | | | | | | 0 | | | | | | | 0 | | | | | | | 12/01/31 | | | | | | | 12/07/22 | | | | | | | 35,288 | | | | | | | 35,289 | | | | | | | 0 | | | | | | | 12/07/32 | | | | | | | 12/06/23 | | | | | | | 26,780 | | | | | | | 26,781 | | | | | | | 26,781 | | | | | | | 12/06/33 | | | | | Scott D. Kirkland (PFO) | | | | | | 12/01/21 | | | | | | | 5,858 | | | | | | | 0 | | | | | | | 0 | | | | | | | 12/01/31 | | | | | | | 12/07/22 | | | | | | | 13,527 | | | | | | | 13,528 | | | | | | | 0 | | | | | | | 12/07/32 | | | | | | | 12/06/23 | | | | | | | 7,736 | | | | | | | 7,737 | | | | | | | 7,737 | | | | | | | 12/06/33 | | | | | Darrell R. Brown | | | | | | 12/01/21 | | | | | | | 4,686 | | | | | | | 0 | | | | | | | 0 | | | | | | | 12/01/31 | | | | | | | 12/07/22 | | | | | | | 11,763 | | | | | | | 11,763 | | | | | | | 0 | | | | | | | 12/07/32 | | | | | | | 12/06/23 | | | | | | | 8,034 | | | | | | | 8,034 | | | | | | | 8,035 | | | | | | | 12/06/33 | | | | | Machiel Duijser | | | | | | 12/01/21 | | | | | | | 4,017 | | | | | | | 0 | | | | | | | 0 | | | | | | | 12/01/31 | | | | | | | 12/07/22 | | | | | | | 8,469 | | | | | | | 8,470 | | | | | | | 0 | | | | | | | 12/07/32 | | | | | | | 12/06/23 | | | | | | | 4,761 | | | | | | | 4,761 | | | | | | | 4,761 | | | | | | | 12/06/33 | | | | | Lanesha T. Minnix | | | | | | 12/07/22 | | | | | | | 7,411 | | | | | | | 7,411 | | | | | | | 0 | | | | | | | 12/07/32 | | | | | | | 12/06/23 | | | | | | | 4,463 | | | | | | | 4,463 | | | | | | | 4,464 | | | | | | | 12/06/33 | | |
| | | | | | | | | | | | | | | | | | | | | | Name | | Option Grant
Date | | Securities vesting
December 2018 | | Securities vesting
December 2019 | | Securities vesting
December 2020 | | Option Expiration
Date | Douglas M. Baker, Jr. | | 12/02/15 | | 57,679 | | 0 | | 0 | | 12/02/25 | (PEO) | | 12/07/16 | | 62,893 | | 62,893 | | 0 | | 12/07/26 | | | 12/06/17 | | 57,580 | | 57,581 | | 57,581 | | 12/06/27 | Daniel J. Schmechel | | 12/02/15 | | 10,895 | | 0 | | 0 | | 12/02/25 | (PFO) | | 12/07/16 | | 11,917 | | 11,917 | | 0 | | 12/07/26 | | | 12/06/17 | | 10,364 | | 10,364 | | 10,365 | | 12/06/27 | Thomas W. Handley | | 12/02/15 | | 12,818 | | 0 | | 0 | | 12/02/25 | | | 12/07/16 | | 13,241 | | 13,241 | | 0 | | 12/07/26 | | | 12/06/17 | | 11,516 | | 11,516 | | 11,516 | | 12/06/27 | Christophe Beck | | 12/02/15 | | 7,691 | | 0 | | 0 | | 12/02/25 | | | 12/07/16 | | 7,944 | | 7,945 | | 0 | | 12/07/26 | | | 12/06/17 | | 6,909 | | 6,910 | | 6,910 | | 12/06/27 | Michael A. Hickey | | 12/02/15 | | 7,691 | | 0 | | 0 | | 12/02/25 | | | 12/07/16 | | 7,944 | | 7,945 | | 0 | | 12/07/26 | | | 12/06/17 | | 6,909 | | 6,910 | | 6,910 | | 12/06/27 |
| (2)
| | Represents performance-based restricted stock unit (PBRSU) awards which cliff-vest after three years, subject to attainment of performance goals over a three-year performance period, and assuming attainment of target (which also represents maximum) performance, as the performance over the prior three-year period has exceeded threshold. In order from top to bottom, the PBRSUs have performance periods of 2016-2018, 2017-2019, and 2018-2020 and will vest on December 31, 2018, December 31, 2019 and December 31, 2020, respectively, and, subject to certification of results by the Compensation Committee, will be paid out in shares of Common Stock no later than March 15 following each vesting date. The awards are subject to the post-termination and change-in-control provisions generally described at pages 58 through 62 under the heading “Potential Payments Upon Termination or Change in Control.” The reported market value of $134.18 per share is based on the closing market price of the Company’s Common Stock on December 29, 2017, the last trading day of 2017.
|
(2)
Represents PBRSU awards which cliff-vest after three years, subject to attainment of performance goals over a three-year performance period. In order from top to bottom, the PBRSUs have performance periods of 2022-2024, 2023-2025 and 2024-2026 and will vest on December 31, 2024, December 31, 2025 and December 31, 2026, respectively, and, subject to certification of results by the Compensation & Human Capital Management Committee, will be paid out in shares of Common Stock no later than March 15 following each vesting date. The amounts presented assume attainment of performance goals at target, which also represents maximum performance for the awards vesting in December 31, 2024 and December 31, 2025. The awards are subject to the post-termination and change-in-control provisions generally described at pages 68 through 71 under the heading “Potential Payments Upon Termination or Change in Control.” The reported market value of $198.350 per share is based on the closing market price of the Company’s Common Stock on December 29, 2023. (3)
Represents the grant of an RSU award to Mr. Duijser on February 22, 2023. The award will vest as to 100% of the units on the fourth anniversary of the date of grant. Dividend equivalents are not paid or accrued on unvested units. The award is subject to the post-termination and change-in-control provisions generally described at pages 68 through 71 under the heading “Potential Payments Upon Termination or Change in Control.” The reported market value of $198.350 per share is based on the closing market price of the Company’s Common Stock on December 29, 2023. (4)
Represents the grant of an RSU award to Ms. Minnix on August 3, 2022. The award will vest as to one-third of the units on each of the first three anniversaries of the date of grant. Dividend equivalents are not paid or accrued on unvested units. The award is subject to the post-termination and change-in-control provisions generally described at pages 68 through 71 under the heading “Potential Payments Upon Termination or Change in Control.” The reported market value of $198.350 per share is based on the closing market price of the Company’s Common Stock on December 29, 2023. OPTION EXERCISES AND STOCK VESTED FOR 20172023 | | | | | | OPTION AWARDS | | | | STOCK AWARDS | | | | NAME | | | | NUMBER OF SHARES
ACQUIRED ON EXERCISE(1)
(#) | | | | VALUE REALIZED ON
EXERCISE(1)
($) | | | | NUMBER OF SHARES
ACQUIRED ON VESTING(2)
(#) | | | | VALUE REALIZED ON
VESTING(2)
($) | | | | Christophe Beck (PEO) | | | | | | 25,830 | | | | | | | 1,820,291 | | | | | | | 11,167 | | | | | | | 2,214,974 | | | | | Scott D. Kirkland (PFO) | | | | | | 2,150 | | | | | | | 166,801 | | | | | | | 3,413(3) | | | | | | | 661,568(3) | | | | | Darrell R. Brown | | | | | | — | | | | | | | — | | | | | | | 3,226 | | | | | | | 639,877 | | | | | Machiel Duijser | | | | | | — | | | | | | | — | | | | | | | 7,181(3) | | | | | | | 1,251,755(3) | | | | | Lanesha T. Minnix | | | | | | — | | | | | | | — | | | | | | | 2,690(3) | | | | | | | 492,566(3) | | |
| | | | | | | | | | | | | | | | | | | | Option Awards | | Stock Awards | Name | | Number of Shares
Acquired on Exercise
(#)(1) | | Value Realized on
Exercise
($)(1) | | Number of Shares
Acquired on Vesting
(#)(2) | | Value Realized on
Vesting
($)(2) | Douglas M. Baker, Jr. (PEO) | | 156,400 | | 14,195,646 | | 35,891 | | 4,815,854 | Daniel J. Schmechel (PFO) | | 14,500 | | 1,331,999 | | 7,178 | | 963,144 | Thomas W. Handley | | 66,100 | | 5,606,559 | | 8,973 | | 1,203,997 | Christophe Beck | | 21,000 | | 1,701,735 | | 5,384 | | 722,425 | Michael A. Hickey | | 33,000 | | 2,897,899 | | 5,384 | | 722,425 |
| (1)
| | Represents the aggregate number of shares and dollar amount realized by the named executive officer upon exercise of one or more stock options during 2017. The dollar amount realized on exercise represents the difference between the fair market value of our Common Stock on the exercise date and the exercise price of the option.
|
(1)
| (2)
| | Represents the performance-based restricted stock unit (PBRSU) shares earned for the 2015-2017 performance period that ended on December 31, 2017 because performance targets were met. The value shown as realized is based on the number of shares earned for the 2015-2017 performance period using the per-share closing market price of our Common Stock of $134.18 on December 29, 2017, the last trading day of 2017, although shares were not issued until Compensation Committee certification of results on February 21, 2018.
|
(2)
| | ECOLAB - 2018 Proxy Statement
| 51
| | |
Includes the PBRSU shares earned by Messrs. Beck, Brown, Duijser, and Kirkland for the 2021-2023 performance period that ended on December 31, 2023 because performance targets were met. The value shown as realized is based on the number of shares earned for the
ECOLAB PROXY STATEMENT 2024 63
2021-2023 performance period using the per-share closing market price of our Common Stock of $198.350 on December 29, 2023, although shares were not issued until Compensation & Human Capital Management Committee certification of results on February 21, 2024. (3)
The number of shares acquired on vesting and value realized on vesting for Mr. Kirkland represents the sum of (a) 931 PBRSU shares with vesting and value realized as described in footnote (2) above and (b) 2,482 RSU shares vesting on December 3, 2023 with a value realized of $192.145 per share. The number of shares acquired on vesting and value realized on vesting for Mr. Duijser represents the sum of (a) 2,978 PBRSU shares with vesting and value realized as described in footnote (2) above and (b) 4,203 RSU shares vesting on February 26, 2023 with a value realized of $157.285 per share. The number of shares acquired on vesting and value realized on vesting for Ms. Minnix represents 2,690 RSU shares vesting on August 3, 2023 with a value realized of $183.11 per share. The PBRSU shares were earned for the 2021-2023 performance period that ended on December 31, 2023 because performance targets were met, with the value shown as realized for the PBRSU shares using the per-share closing market price of our Common Stock of $198.350 on December 29, 2023, although shares were not issued until Compensation & Human Capital Management Committee certification of results on February 21, 2024. PENSION BENEFITS FOR 20172023 | | NAME | | | | PLAN NAME | | | | NUMBER OF YEARS OF
CREDITED SERVICE
(#) | | | | PRESENT VALUE OF
ACCUMULATED BENEFIT(1)
($) | | | | PAYMENTS DURING
LAST FISCAL YEAR
($) | | | | Christophe Beck (PEO) | | | | Pension Plan | | | | | | 16.00 | | | | | | | 148,309 | | | | | | | 0 | | | | | Mirror Pension Plan | | | | | | 16.00 | | | | | | | 418,701 | | | | | | | 0 | | | | | SERP(2) | | | | | | 18.10 | | | | | | | 2,086,811 | | | | | | | 0 | | | | | Scott D. Kirkland (PFO) | | | | Pension Plan | | | | | | 18.00 | | | | | | | 227,103 | | | | | | | 0 | | | | | Mirror Pension Plan | | | | | | 18.00 | | | | | | | 84,069 | | | | | | | 0 | | | | | Darrell R. Brown | | | | Pension Plan | | | | | | 6.63 | | | | | | | 64,757 | | | | | | | 0 | | | | | Mirror Pension Plan | | | | | | 6.63 | | | | | | | 125,214 | | | | | | | 0 | | | | | Australia Plan | | | | | | 15.22 | | | | | | | 1,824,967 | | | | | | | 0 | | | | | Machiel Duijser | | | | Pension Plan | | | | | | 3.00 | | | | | | | 27,347 | | | | | | | 0 | | | | | Mirror Pension Plan | | | | | | 3.00 | | | | | | | 50,559 | | | | | | | 0 | | | | | Lanesha T. Minnix | | | | Pension Plan | | | | | | 1.00 | | | | | | | 9,339 | | | | | | | 0 | | | | | Mirror Pension Plan | | | | | | 1.00 | | | | | | | 9,431 | | | | | | | 0 | | |
PENSION BENEFITS FOR 2017
· | · | · | · | · | · | · | · | · | · | · | | | | | | | | | | | | Name | | Plan Name | | Eligible for Early
Retirement as of
Dec. 31, 2017 (1) | | Number of Years
of Credited Service
(#) | | Present Value of
Accumulated Benefit
($) | | Payments During
Last Fiscal Year ($) | Douglas M. Baker, Jr. (PEO) | | Pension Plan | | Y | | 28.0 | | 1,263,059 | | 0 | | | Mirror Pension Plan | | Y | | 28.0 | | 17,011,277 | | 0 | | | Supplemental Executive Retirement Plan | | Y | | 28.0 | | 5,424,738 | | 0 | Daniel J. Schmechel (PFO) | | Pension Plan | | Y | | 22.0 | | 963,911 | | 0 | | | Mirror Pension Plan | | Y | | 22.0 | | 2,850,007 | | 0 | | | Supplemental Executive Retirement Plan | | Y | | 23.35 | | 1,244,038 | | 0 | Thomas W. Handley | | Pension Plan | | Y | | 14.0 | | 200,100 | | 0 | | | Mirror Pension Plan | | Y | | 14.0 | | 529,884 | | 0 | | | Supplemental Executive Retirement Plan | | Y | | 28.10 | | 4,676,369 | | 0 | Christophe Beck | | Pension Plan | | N | | 10.0 | | 71,811 | | 0 | | | Mirror Pension Plan | | N | | 10.0 | | 152,636 | | 0 | | | Supplemental Executive Retirement Plan | | N | | 15.10 | | 1,395,930 | | 0 | Michael A. Hickey | | Pension Plan | | Y | | 32.0 | | 1,310,719 | | 0 | | | Mirror Pension Plan | | Y | | 32.0 | | 4,395,926 | | 0 | | | Supplemental Executive Retirement Plan | | Y | | 32.0 | | 1,376,766 | | 0 |
| (1)
| | As cash balance formula participants, Mr. Handley and Mr. Beck would be eligible to receive their vested benefits under the Pension Plan and Mirror Pension upon separation from service.
|
The Company maintains the following non-contributory defined benefit plans for its executives: (i) a U.S. tax-qualified plan (Pension Plan); (ii) a non-qualified excess plan (Mirror Pension); and (iii) a supplemental executive retirement plan (SERP). The preceding table shows the actuarial present value of the accumulated benefit for each executive officer under the Pension Plan, the Mirror Pension and the SERPplans identified above as of December 31, 2017,2023 (November 30, 2023, for the Australia Plan).
▪
The actuarial present value is calculated using the same assumptions as are used by the Company for financial reporting purposes under generally accepted accounting principles, except that retirement age is assumed to be age 62,62. The present value is determined by using a discount rate of 4.96% for the earliest retirement agePension Plan and 4.79% for the Mirror Pension Plan and SERP for 2023 and assuming that benefits are vested at whichDecember 31, 2023. The present value of Mr. Brown’s current accrued benefit in the Australia Plan was determined based on a participant may retire under the plans without any benefit reduction due to age.5.77% discount rate and based on a conversion rate of 1.5140AUD = 1$U.S. ▪
The current accrued benefit for U.S. executivesbenefits is allocated between the tax-qualified Pension Plan and the related supplemental non-qualified plans based on the Internal Revenue Code limitations applicable to tax-qualified plans as of December 31, 2017.The present value is determined by using a discount rate of 3.72% for the Pension Plan and 3.39% for the Mirror Pension Plan and SERP for 2017 and assuming that the executive officer: (i) terminated employment on December 31, 2017 with vested benefits; and (ii) commenced a retirement benefit at age 62 as a single life annuity or lump sum, if available. 2023.
▪
The present value of the Pension Plan, generally payable as a single life annuity, assumed mortality rates from the “RP 2014 Healthy Annuitant Mortality” table, projected back to 2006“Pre-2012 Mortality Table” with mortality improvement scale MP 2014, and projected forward with scale MP 2017.the MP-2021 projection scale. Mirror Pension and SERP annuities were converted tovalued assuming annual installment payments, or lump sums where available, using an interest rate of 2.95%6.00% and the mortality rates defined in the Mirror Pension and SERP plans as prescribed in Revenue Ruling 2001-62. Cash balance benefits were valued assuming future interest credits of 2.35%3.89% for periods after December 31, 2017.2023. The cash balance annuity conversion for the SERP offset used the interest rate and mortality assumptions prescribed by the IRS under Internal Revenue Code Section 417(e) for 2017 pension lump-sum calculations.calculations at December 31, 2020, when the SERP benefit was frozen. (2)
Mr. Beck has past service credits valued in the above table at $282,198 for 5.10 years of past service credit. 64ECOLAB PROXY STATEMENT 2024
The pension benefits described above relate to the following non-contributory defined benefit plans maintained by the Company: | | | | | | KEY FEATURES OF PENSION PLANS | | 52
| ECOLAB - 2018 Proxy Statement
PENSION PLAN | | | | PLAN
DESCRIPTION | | | | BENEFIT ACCRUAL FORMULA | | | | VESTING | | | | BENEFIT PAYMENTS | | | | EARLY
RETIREMENT
PROVISIONS | | | | Pension Plan |
PENSION BENEFITS FOR 2017
Pension Plan - The Pension Plan is a tax-qualified defined benefit plan covering
| | | Tax-qualified defined benefit plan that covers most U.S. employees of the Company and its U.S. affiliates. It is intended to provide long-service employees a foundation for retirement benefits in the form of regular income. | ·
| | Participants hired prior to January 1, 2003, including Messrs. Baker, Schmechel and Hickey, earn monthly pension benefits under the following formula (“traditional formula”): 1/12 of the sum of: (a) years of credited service times 1% of “final average compensation” plus (b) years of credited service (not exceeding 35) times 0.45% of “final average compensation” minus “covered compensation.” “Final average compensation” is the average of the participant’s annual compensation for the five consecutive calendar years that produce the highest average, counting the participant’s base salaryCompany and annual cash incentive compensation for a plan year, excluding any long-term and non-cash incentive bonuses and amounts above the IRS compensation limits for qualified plans. “Covered compensation” is the average Social Security taxable wage base over a 35 year period ending at a participant’s Social Security retirement age.
|
| its U.S. affiliates. | ·
| | Participants hired after 2002, including Mr. Handley and Mr. Beck, accrue an account
| Account credit at the end of each year equal to a fixed percentage3% of the participant’s compensation for that year plus an interest credit applied to the participant’s account balance on the first day of that year (“cash balance formula”). The fixed percentage is either 5% or 3% depending on a participant’s date of entry intoyear. Other legacy pension benefit formulas do not apply to the Pension Plan. Mr. Handley’s and Mr. Beck’s cash balance formulas are based on 5% and 3% of compensation, respectively. NEOs. ▪
Compensation used in determining the credits is the participant’sincludes base salary and annual cash incentive compensation for a plan year, excluding anyand excludes long-term and non-cash incentive bonuses, and amounts above theup to IRS limits for qualified plans. |
plan compensation limit.| | ·
| | Participants become entitled to a non-forfeitable (“vested”) right to their Pension Plan benefit upon completing three
| Vested after 3 years of continuous service withservice. | | | | Actuarial equivalent value of account balance using mortality and interest factors prescribed by the Company. Normal retirement date is the date on which the participant attains age 65 and has completed at least three years of continuous service. |
IRS for cash balance plans. | ·
| | Traditional formula participants who have terminated employment with the Company may begin to receive benefit payments as early as age 55, reducing the benefit by 1/280 for each month by which payment begins before age 62. Unreduced benefits may begin after attaining age 62. The normal▪
Normal form of benefit is a single life only annuity for participants who are not married and aunmarried participants; joint and 50% survivor annuity for married participants. Subject ▪
Optional forms of benefit include lump-sum and annuity options; death benefit to a spousal consent requirement for married participants, participants may select an actuarially equivalent benefit in one of the following forms: single life only annuity; joint and 75% or 100% survivor annuity (married participants only); life and five-year certain annuity; and life and ten-year certain annuity. If a participant dies after benefit commencement, payments to a beneficiary if any,die before starting pension. | | | | N/A — benefit payable at termination of employment; no subsidies for early retirement. | | | | Mirror Pension Plan | | | | Non-qualified plan intended to restore benefits under the tax-qualified Pension Plan for certain executives whose benefits under the Pension Plan are made accordingreduced by Internal Revenue Code limits. | | | | Same as Pension Plan, but only with respect to the payment option selected by the participant. If a participant with a vested traditional formula benefit dies before benefit payments commence, the participant’s beneficiary is entitled to a death benefit. If the beneficiary is the participant’s surviving spouse, the benefit is a life annuity beginningcompensation and benefits that would otherwise exceed IRS qualified plan limits. | | | | Vested after the participant would have attained age 55. Other beneficiaries receive a five- or ten-year annuity benefit. |
| ·
| | Cash balance formula participants with at least three3 years of continuous service may commence benefit payment at any time after termination. The payment will beand in the actuarialevent of a change-in-control.
| | | | Actuarial equivalent value of their account balance determined using the mortality and interest factors prescribed by the IRS. The normalIRS for cash balance plans. ▪
Normal form of benefit for cash balance formula participants is a single life only annuity for participants who are not married and a joint and 50% survivor annuity for married participants. Optional forms of payment for cash balance formula participants are lump-sum payment, single life annuity, and, for married participants only, joint and 75% or 100% survivor annuity. The beneficiary of a cash balance formula participant who dies before10 annual installments commencing benefits will receive a death benefit actuarially equivalent to the participant’s account balance. |
Mirror Pension Plan - The Mirror Pension Plan is a non-qualified plan intended to restore benefits under the tax-qualified Pension Plan for those employees whose benefits are reduced by Internal Revenue Code limits. The Mirror Pension has generally the same terms as the Pension Plan except:
| (i)
| | compensation is determined without regard to the IRS limits for qualified plans;
|
| (ii)
| | vesting is accelerated upon a change in control;
|
| | ECOLAB - 2018 Proxy Statement
| 53
| | |
PENSION BENEFITS FOR 2017
| (iii)
| | benefits may be forfeited for certain serious misconduct; and
|
| (iv)
| | the optional forms of benefits available to participants with respect to benefits accrued and vested as of December 31, 2004 (“Grandfathered Mirror Pension Benefits”) include a lump-sum payment.
|
| ·
| | Benefits accrued or vested after December 31, 2004 are subject to Internal Revenue Code Section 409A (“409A Mirror Pension Benefits”) and are not linked to the Pension Plan. The normal form of 409A Mirror Pension Benefits is a 10-year annual installment payout commencing upon the later of attainment of age 55 or separation from service for traditional formula participants, or upon separation from service for cash balance formula participants, provided that payment to a “specified employee” (corporate officers, including each of the named executive officers) may not commence earlier than six months after separation from service.
▪
Optional forms of benefits available to participants include 5-year annual installments, lump sum or anand annuity option (single life, life and 5-year certain, life and 10-year certain, and for married participants, joint and 50%, 75% or 100% survivor). Participants were permitted to make a transition election as to an optional form of benefit for their 409A Mirror Pension Benefits before the end of 2008 as permitted under 409A regulations. Any subsequent change in optional form by a participantoptions. ▪
Payment is subject to the “1-year/5-year rule” which requires that the change be made 12 months before separation from service and must not become effective for 12 months after the election is made (the 1-year rule), and the payment commencement date must be delayed for five years after the date the amounts would otherwise have been paid (the 5-year rule). A participant who elects an annuity option may choose among the various types of annuity forms at any time before benefit commencement. |
| ·
| | Despite the plan’s normal form of benefit or a participant’s election of an optional form of benefit, the Company will cash out the participant’s Grandfathered Mirror Pension Benefit and/or the participant’s 409A Mirror Pension Benefit in a lump sum if the present value does not exceed $25,000 at time of suchdistribution.
▪
Payments of benefits subject to Internal Revenue Code Section 409A to “specified employees” are delayed until 6 months after separation from service, and further delayed in accordance with IRS rules if an executive changes the time or form of payment. | | | | N/A — benefit payable at termination of employment; no subsidies for early retirement. | |
ECOLAB PROXY STATEMENT 2024 65
| | | | | | KEY FEATURES OF PENSION PLANS | | | | PENSION PLAN | | | | PLAN
DESCRIPTION | | | | BENEFIT ACCRUAL FORMULA | | | | VESTING | | | | BENEFIT PAYMENTS | | | | EARLY
RETIREMENT
PROVISIONS | | | | SERP | | | | Non-qualified supplemental executive retirement plan intended to ensure a pension benefit that replaces a significant portion of the income of certain executives. ▪
Mr. Beck is the only NEO in this plan. | | | | Maximum SERP benefit atequals 2% of final average compensation multiplied by years of credited service (up to 30 years), reduced by the timebenefits payable under the Pension Plan, the Mirror Pension and 50% of distribution doesthe age 65 Primary Social Security benefit. ▪
Plan provides an additional “past service benefit” to certain executives hired by the Company after age 35 since the executive would not exceed $25,000. |
SERP - The SERP is a non-qualified supplemental executive retirement plan intended to ensure a pension benefit that replaces a significant portion of the income of certain executives. The maximum SERP benefit equals 2% of final average compensation multiplied by years of credited service (up to 30 years), reduced by the benefits payable under the Pension Plan, the Mirror Pension and 50% of the age 65 Primary Social Security benefit. A participant age 65 with 30 years of service would receive benefits from all three defined benefit plans equal to 60% of final average compensation (less 50% of the age 65 Social Security benefit). For certain executives hired by the Company after age 35 and therefore unable to earn the maximum benefit at age 65, the SERP provides an additional “past service benefit.” The annualbe able to earn the maximum benefit by age 65. Annual past service benefit equals 1% of the difference between final average compensation and annualized earnings at the time of joining the Company (“first year earnings”) multiplied by the difference between the executive’s age at date of hire and 35.
| ·
| | Material terms of the SERP are similar to those of the Pension Plan except:
|
| (i)
| | compensation is determined without regard to the IRS limits for qualified plans;
|
| (ii)
| | the SERP benefit vests upon attainment of age 55 and completion of ten years of service or attainment of age 65;
|
| (iii)
| | vesting is accelerated upon a change in control;
|
| (iv)
| | benefits may be forfeited for certain serious misconduct; and
|
| (v)
| | participants hired after age 35 are credited with additional “past service credit” equal to one year for each year by which the executive’s age at date of hire exceededand 35. In addition, the normal form of benefit with respect
▪
Compensation is determined without regard to SERP benefits accrued and vested as ofIRS qualified plan compensation limit. ▪
Benefit accruals frozen after December 31, 2004 (“Grandfathered SERP Benefits”) is a 15-year certain monthly annuity commencing2020. | | | | Vested after 10 years of service and age 55, or at age 65, and participants may elect to receive an actuarially equivalent benefit in anythe event of the optional forms of payment available under the Pension Plan or in a lump sum. SERP benefits accrued or vested after December 31, 2004 are subject to Internal Revenue Code Section 409A (“409A SERP Benefits”). The normalchange-in-control. | | | | Benefit formula described above. ▪
Normal form of benefit, election of optional forms of benefit, and time of commencement of the 409A SERP Benefits are linked tosame as under the Mirror Pension. |
| | 54
| ECOLAB - 2018 Proxy Statement
| | |
PENSION BENEFITS FOR 2017
| ·
| | Despite the normal form of benefit or a participant’s optional form of benefit election, the Company will cash out the participant’s grandfathered SERP Benefits and/or the participant’s 409A SERP Benefits▪
Payment is in a lump sum if the present value of such portion of the benefit at the time of distribution does not exceed $25,000.$25,000 at time of distribution. ▪
Payments of benefits subject to Internal Revenue Code Section 409A to “specified employees” are delayed until 6 months after separation from service, and further delayed in accordance with IRS rules if an executive changes the time or form of payment. | | | | Benefit reduced by 1/280th for each month by which the commence-ment date precedes age 62. | | | | Australia Plan | | | | Defined benefit pension plan covering certain employees of Ecolab in Australia, meeting local government requirements for broad-based retirement plans. ▪
Mr. Brown is the only NEO in this plan. | | | | Benefit is equal to the greatest of: ▪
Amount determined in accordance with the formula of R x PS x FAE, where R is 15% per annum based on Mr. Brown’s membership category; PS is the participant’s plan service completed at the date the participant became a frozen member, with fractions of a year in complete days counting pro-rata; and FAE is the final pensionable earnings of the participant determined on the date of calculation/retirement, subject to a maximum of 7 x FAE; ▪
Twice the participant’s own basic contribution account; and ▪
Minimum requisite benefit under the Australian SG Act. Mr. Brown does not accrue additional benefits with respect to his service or compensation earned or paid in 2023, other than an annual salary adjustment of 3% to reflect the passage of time. | | | | Mr. Brown is 100% vested. | | | | Account balance is paid in a lump sum at termination of employment. | | | | Eligibility at age 55 for full normal retirement benefit. | |
| ·
| | The Company does not grant extra years of credited service under the Pension Plan or the Mirror Pension Plan except as approved by its Board of Directors. Prior service credits have been approved by the Board in limited circumstances in connection with a business acquisition or merger, entry into plan participation by employees formerly participating in a union plan while employed with the Company and for employment with the Company before the Pension Plan was adopted in 1972. None of the named executive officers has been granted extra years of service under these plans.
|
66ECOLAB PROXY STATEMENT 2024
| ·
| | Messrs. Schmechel, Handley and Beck were hired by the Company after age 35 and will benefit from the past service benefit and past service credits under the SERP. The SERP benefit in the above table includes past service benefits for Mr. Schmechel totaling $115,209 for 1.35 years of past service credit, Mr. Handley totaling $1,493,486 for 14.10 years of past service credit and Mr. Beck totaling $227,626 for 5.10 years of past service credit.
|
| ·
| | In 2010, the SERP was amended to eliminate further benefit accruals after December 31, 2020.
|
| | ECOLAB - 2018 Proxy Statement
| 55
| | |
NON-QUALIFIED DEFERRED COMPENSATION FOR 2017 2023| | NAME | | | | EXECUTIVE
CONTRIBUTIONS
IN LAST FY(1)
($) | | | | REGISTRANT
CONTRIBUTIONS
IN LAST FY(2)
($) | | | | AGGREGATE
EARNINGS
IN LAST FY
($) | | | | AGGREGATE
WITHDRAWALS/
DISTRIBUTIONS
($) | | | | AGGREGATE
BALANCE AT
LAST FY(3)
($) | | | | Christophe Beck (PEO) | | | | | | 371,600 | | | | | | | 278,700 | | | | | | | 469,965 | | | | | | | 0 | | | | | | | 2,420,933 | | | | | Scott D. Kirkland (PFO) | | | | | | 36,600 | | | | | | | 27,450 | | | | | | | 38,585 | | | | | | | 0 | | | | | | | 294,863 | | | | | Darrell R. Brown | | | | | | 162,236 | | | | | | | 121,677 | | | | | | | 76,251 | | | | | | | 0 | | | | | | | 606,732 | | | | | Machiel Duijser | | | | | | 95,351 | | | | | | | 71,513 | | | | | | | 9,170 | | | | | | | 0 | | | | | | | 87,568 | | | | | Lanesha T. Minnix | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | |
NON-QUALIFIED DEFERRED COMPENSATION FOR 2017
| | | | | | | | | | | | | | | | | | | | | | Name | | Executive
Contributions in
Last FY(1)(2)
($) | | Registrant
Contributions in
Last FY(1)(2)
($) | | Aggregate
Earnings in
Last FY
($) | | Aggregate
Withdrawals/
Distributions
($) | | Aggregate
Balance at
Last FYE(3)
($) | Douglas M. Baker, Jr. (PEO) | | 141,190 | | 112,952 | | 605,232 | | 0 | | 5,120,935 | Daniel J. Schmechel (PFO) | | 130,788 | | 32,086 | | 200,961 | | 0 | | 1,360,756 | Thomas W. Handley | | 49,783 | | 39,826 | | 80,231 | | 0 | | 2,203,082 | Christophe Beck | | 56,682 | | 42,512 | | 114,314 | | 0 | | 867,054 | Michael A. Hickey | | 30,246 | | 24,197 | | 105,503 | | 0 | | 849,805 |
Reflects contributions credited to the NEO’s account in the Mirror Savings Plan described below, including deferrals on base salary earned in 2023 and annual cash incentive earned in respect of 2023 (which amounts are included in the Salary and Non-Equity Incentive Plan columns of the “Summary Compensation Table”, at page 58). (2)
Reflects the Company’s matching contributions on the NEO’s deferral of base salary earned in 2023 and annual cash incentive earned in respect of 2023, which were credited to the NEO’s account in the Mirror Savings Plan described below (which amounts are included in the All Other Compensation column of the “Summary Compensation Table”, at page 58). (3)
Amounts reported in the aggregate balance at last fiscal year end include the following amounts which were previously reported as compensation to the NEO in the “Summary Compensation Table”: Mr. Beck, $892,976 (Mr. Beck was an NEO in 2015-2017 and 2019-2022); Mr. Brown, $199,765 (Mr. Brown was an NEO in 2018 and 2022-2023), and Mr. Kirkland, $46,550 (Mr. Kirkland was an NEO in 2023). Ms. Minnix was an NEO in 2023 but did not defer any amounts in 2023; Mr. Duijser has not previously been an NEO. | | (1)
KEY FEATURES OF MIRROR SAVINGS PLAN | | | | Contributions credited in 2017 include deferralsPLAN
| | | | PLAN
DESCRIPTION | | | | BENEFIT FORMULA | | | | VESTING | | | | BENEFIT PAYMENTS | | | | EARLY
RETIREMENT
PROVISIONS | | | | Mirror Savings Plan | | | | Non-qualified defined contribution deferred compensation and match onexcess benefit plan intended to restore benefits under the Company’s tax-qualified 401(k) plan for certain executives whose benefits under the 401(k) plan are reduced by Internal Revenue Code limits. | | | | ▪
Participants may defer 8% of base salary earned in 2017excess of the Internal Revenue Code compensation limit for tax-qualified plans and up to 100% of annual cash incentive earned in respect of 2017. |
compensation for the calendar year. | (2)
| | Amounts reported for executive contributions and included in the aggregate balance at year end include the following amounts which were reported as salary in 2017 in the Summary Compensation Table at page 46 and which were deferred by each named executive officer: Mr. Baker, $48,375; Mr. Schmechel, $17,438; Mr. Handley, $21,188; Mr. Beck, $23,650; and Mr. Hickey, $14,781. Amounts reported for executive contributions include the following amounts reported as annual incentive bonus in the Summary Compensation Table at page 46 and which were deferred by each
▪
Company matching contribution is equal to: (i) 100% of the following namedamount of the NEO’s deferrals that do not exceed 4% of covered compensation, plus (ii) 50% of the NEO’s deferrals that exceed 4% but do not exceed 8% of the NEO’s covered compensation. ▪
Compensation is determined without regard to IRS qualified plan compensation limit. | | | | 100% vested. | | | | ▪
Normal form is 10-year annual installments at separation from service, with optional forms of benefits of 5-year annual installments or a lump-sum. ▪
Payments of benefits subject to Internal Revenue Code Section 409A to “specified employees” are delayed until 6 months after separation from service, and further delayed in accordance with IRS rules if an executive officers: Mr. Baker, $92,815; Mr. Schmechel, $113,350; Mr. Handley, $28,595; Mr. Beck, $33,032; and Mr. Hickey, $15,465. Amounts reported for registrant contributions are described in more detail in part (ii)changes the time or form of footnote 6(d) to the Summary Compensation Table at page 46. payment. | | | | N/A — no early retirement provisions. | |
| (3)
| | Amounts reported in the aggregate balance at last fiscal year end include the following amounts which were reported as compensation to the named executive officer in the Summary Compensation Table in 2007-2017: Mr. Baker, $2,541,593; Mr. Schmechel, $393,400 (Mr. Schmechel became a named executive officer in 2012); Mr. Handley, $929,139 (Mr. Handley became a named executive officer in 2007); Mr. Beck, $174,177 (Mr. Beck was a named executive officer in 2015 - 2017); and Mr. Hickey, $260,445 (Mr. Hickey was a named executive officer in 2012 and in 2014 - 2017).
|
TheAn account for Mirror Savings Plan is a non-qualified mirror 401(k) deferred compensation excess plan which enables executives to obtain the benefits of a tax-deferred savings and investment program without regard to limits on compensation and benefits imposed by the Internal Revenue Code on the Company’s tax-qualified deferred compensation plans. The plan is unfunded and does not protect the executive from insolvency of the Company. In 2017, participants were permitted to defer a specified percentage of base salary in excess of the Internal Revenue Code compensation limit for tax-qualified plans. For participants entitled to a final average pay benefit or 5% cash balance benefit in the Pension Plan, this percentage was 5%; for participants entitled to a 3% cash balance benefit in the Pension Plan (those entering the Pension Plan after January 1, 2007), the specified percentage was 8%. Participants were also permitted to defer up to 100% of their annual cash incentive compensation for the calendar year. The Company credits a matching contribution for each of the named executive officers participating in the plan. Participants who are entitled to a final average pay benefit or 5% cash balance benefit in the Pension Plan, including Messrs. Baker, Schmechel, Handley, and Hickey, receive a matching contribution credit equal to: (i) 100% of the amount of the executive’s deferrals that do not exceed 3% of covered compensation, plus (ii) 50% of the executive’s deferrals that exceed 3% but do not exceed 5% of the executive’s covered compensation. Participants in the Pension Plan who are eligible to accrue a 3% cash balance benefit in the Pension Plan, including Mr. Beck, receive a matching contribution credit equal to: (i) 100% of the amount of the executive’s deferrals that do not exceed 4% of covered compensation, plus (ii) 50% of the executive’s deferrals that exceed 4% but do not exceed 8% of the executive’s covered compensation.
| | 56
| ECOLAB - 2018 Proxy Statement
| | |
NON-QUALIFIED DEFERRED COMPENSATION FOR 2017
An account is maintained on the Company’s books in the name of each participating executive. The account is credited with phantom earnings at the same rate as earnings on externally managed investment funds available to participants in the Company’s tax-qualified deferred compensation plans. An executive is allowed to elect the investment fund or funds that will apply and may change the election at any time;time, provided that: (i)that an executive officer is not permitted to elect the Company stock fund, and (ii) effective January 1, 2006, the Company discontinued making its matching contributions to the Company stock fund. The earnings rate applicable to each such investment fund for 2017 is as set forth in the following table:
| | | | Fund Name
| | 2017 Earnings Rate (%)
| | Managed Income Portfolio II – Class 3
| | 1.76
| | Fidelity Investments Money Market Government Portfolio – Institutional Class
| | 0.79
| | Fidelity U.S. Bond Index Fund – Institutional Premium Class
| | 3.49
| | Western Asset Core Plus Bond Fund Class IS
| | 7.13 | | State Street Target Retirement Income Non-Lending Series Fund – Class W
| | 8.32 | | State Street Target Retirement 2015 Non-Lending Series Fund – Class W
| | 9.94 | | State Street Target Retirement 2020 Non-Lending Series Fund – Class W
| | 13.12 | | State Street Target Retirement 2025 Non-Lending Series Fund – Class W
| | 16.27 | | State Street Target Retirement 2030 Non-Lending Series Fund – Class W
| | 17.98 | | State Street Target Retirement 2035 Non-Lending Series Fund – Class W
| | 19.38 | | State Street Target Retirement 2040 Non-Lending Series Fund – Class W
| | 20.39 | | State Street Target Retirement 2045 Non-Lending Series Fund – Class W
| | 21.26 | | State Street Target Retirement 2050 Non-Lending Series Fund – Class W
| | 21.25 | | State Street Target Retirement 2055 Non-Lending Series Fund – Class W
| | 21.26 | | State Street Target Retirement 2060 Non-Lending Series Fund – Class W
| | 21.26 | | Janus Henderson Triton Fund – Class N
| | 27.24 | | Fidelity 500 Index Fund – Institutional Premium Class
| | 21.81 | | Harbor Capital Appreciation Fund – Institutional Class
| | 36.59 | | Dodge & Cox Stock Fund
| | 18.33 | | Vanguard Extended Market Index Fund – Institutional Plus Shares
| | 18.13 | | American Beacon Small Cap Value Fund – Class Institutional
| | 8.67 | | Dodge & Cox International Stock Fund
| | 23.94 | | Vanguard FTSE All-World Ex-U.S. Index Fund – Institutional Shares
| | 27.26 | | Ecolab Stock Fund
| | 15.51 | |
Participants are always 100% vested in their deferred compensation account and are entitled to receive a distribution in cash upon termination, death or disability. The normal form of distribution with respect to the portion of the account attributable to contributions made before 2005 (“Grandfathered Mirror Savings Benefit”) is a single lump sum, but an executive may elect to receive such portion of the account in the form of annual installments over a period not to exceed ten years. The portion of the executive’s account attributable to contributions made after 2004 is subject to Internal Revenue Code Section 409A (“409A Mirror Savings Benefit”). The normal form of 409A Mirror Savings Benefit is a 10-Year Annual Installment payout commencing upon separation from service, provided that payment to a “specified employee” (corporate officers, including each of the named executive officers) may not commence earlier than six months after separation from service. Optional forms of benefits available to participants include 5-year annual installments or a lump-sum payment. Participants were permitted to make a transition election as to an optional form of benefit for their 409A Mirror Savings Benefit before the end of 2008 as permitted under 409A regulations and new participants may make such an election at the time of initial enrollment. Any subsequent change in optional form by a participant is subject to the “1-year/5-year rule” which requires that the change be made 12 months before separation from service and must not become effective for 12 months after the election is made (the 1-year rule), and the payment commencement date must be delayed for five years after it would otherwise be paid (the 5-year rule). Despite the plan’s normal form of benefit or a participant’s election of an optional form of benefit, the Company will cash out the participant’s Grandfathered Mirror Savings Benefit and/or the participant’s 409A Mirror Savings Benefit in a lump sum if the present value of such portion of the benefit at the time of distribution does not exceed $25,000. Deferrals may be withdrawn during employment only upon an unforeseeable emergency and are limited to the amount needed to satisfy such emergency. Company matching amounts are not available for such in-service withdrawal and are subject to forfeiture for certain serious misconduct.
| | ECOLAB - 2018 Proxy Statement
| 57
| | |
ECOLAB PROXY STATEMENT 2024 67
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The Company maintains certain plans, policies, and practices covering named executive officersNEOs that will require it to provide incremental compensation upon certain types of terminations, including termination due to a change in control of the Company. Overview –
The following discussion describes additional amounts that the Company would pay or provide to a named executive officeran NEO or his or her beneficiaries as a result of termination of employment in each of the following situations: voluntary resignation, discharge for cause, discharge without cause, resignation due to constructive discharge, death or disability, and change in control of the Company. For purposes of this discussion, estimated benefits are calculated as if the termination and/or change in control occurred on December 31, 2017,2023, PBRSU and RSU awards are valued based on the value of a share of the Company’s stock of $134.18,$198.35, which is the closing price on December 29, 2017,2023, the last tradingbusiness day of 2017,the Company’s fiscal year, and option awards are valued based on the difference between $134.18$198.35 and the per share exercise price of the respective awards. As permitted by SEC rules, the following discussion and amounts do not include the payments and benefits that are not enhanced by the termination of employment or change in control. These payments and benefits are referred to hereafter in this discussion as “vested benefits” and include:benefits.” | | ·
Voluntary Resignation or Retirement | | benefits accrued under the Company’s Pension Plan, tax-qualified deferred compensation 401(k) and profit-sharing plan, in which all eligible employees participate;
|
| ·
| | benefits provided under a retiree health, and except as specified, a death benefits program, in which all eligible employees participate;
|
| ·
| | accrued vacation pay, health and life insurance plan continuation and other similar amounts payable when employment terminates under programs applicable to the Company’s salaried employees generally;
|
| ·
| | payment of earned annual cash incentive payable if employed through the end of the year described beginning at page 38;
|
| ·
| | benefits accrued under the Mirror Savings Plan described in connection with the “Non-Qualified Deferred Compensation for 2017” table beginning at page 56;
|
| ·
| | benefits accrued that have vested under the SERP described in connection with the “Pension Benefits for 2017” table beginning at page 52;
|
| ·
| | stock options that have vested and become exercisable as described at page 41;
|
| ·
| | PBRSU awards that have vested upon completion of the relevant service period and whose payout are subject to the attainment of the relevant performance goals as described at page 42; and
|
| ·
| | shares of restricted stock or restricted stock units that have vested as described at page 42.
|
Voluntary Resignation – The Company is not obligated to pay any amounts in addition to the named executive officer’sNEO’s vested benefits in the event of a voluntary termination of employment, unless the executive’s age and years of service qualify for special provisions applicable for retirement under the plans described below.
| ·
| | Annual Cash Incentive – If termination is after age 55 and completion of at least three years of service, the executive would receive payment of a portion of the annual cash incentive under the Company’s annual cash incentive program (Management Performance Incentive Plan or “MPIP” and Management Incentive Plan or “MIP”), which is described in the Compensation Discussion and Analysis beginning at page 38 and as part of the table entitled “Grants of Plan-Based Awards for 2017” beginning at page 48, earned for the year that is proportionate to the portion of the performance period under the Plan that was completed prior to the termination of employment. The earned annual cash incentive payable to such an eligible executive officer for termination on December 31, 2017 would be the full amount of the actual annual cash incentive earned as reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table at page 46.
|
| | 58
| ECOLAB - 2018 Proxy Statement
| | |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| ·
| | Retiree Life Insurance – Certain elected corporate officers who terminate employment at or after: (i) attaining age 55 and completing at least ten years of service or (ii) attaining age 65 are covered by an executive life insurance policy. Under the program, the beneficiary of the retired executive is entitled to a death benefit equal two times the executive’s average compensation for the five consecutive years of employment preceding retirement which yields the highest average compensation, subject to the maximum of $750,000.
|
| ·
| | Options – If termination is after: (i) age 55 and (ii) completion of at least five years of service, the executive would be entitled to accelerated vesting for options held at least six months and an extended, post-retirement exercise period of five years (or the remaining term of the options, if shorter).
|
| ·
| | PBRSUs – If termination is after: (i) age 55 and (ii) completion of at least five years of service, service-vesting conditions with respect to PBRSU awards held at least six months will be deemed satisfied, but vesting remains subject to the attainment of performance goals.
|
Messrs. Baker, Schmechel, Handley Two of our NEOs, Mr. Beck, and HickeyMr. Brown, would have been entitled to some or all of such special retirement provisions as of December 31, 2017,2023, as follows:
| | | | | | | | | | | | | | | | | | | | ACCELERATED PORTION
OF STOCK OPTIONS(3) | | | | ACCELERATED PORTION
OF PBRSUs(4) | | | | TOTAL
(EXCLUDING
RETIREE LIFE
INSURANCE)
($) | | | | NAME | | | | ANNUAL
CASH
INCENTIVE(1)
($) | | | | RETIREE
LIFE
INSURANCE(2)
($) | | | | NUMBER
(#) | | | | VALUE
($) | | | | NUMBER
(#) | | | | VALUE
($) | | | | | Christophe Beck (PEO) | | | | | | 3,731,250 | | | | | | | 750,000 | | | | | | | 90,660 | | | | | | | 3,518,616 | | | | | | | 38,663 | | | | | | | 7,668,806 | | | | | | | 14,918,672 | | | | | Darrell R. Brown | | | | | | 1,570,453 | | | | | | | — | | | | | | | 28,212 | | | | | | | 1,172,889 | | | | | | | 11,562 | | | | | | | 2,293,323 | | | | | | | 5,036,665 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Annual Cash Incentive | | Retiree Life Insurance | | Accelerated Portion of Stock Options | | Accelerated Portion of PBRSUs(1) | | Total (excluding Retiree Life Ins.) | Name | | ($) | | ($) | | Number (#) | | Value ($) | | Number (#) | | Value ($) | | ($) | Douglas M. Baker, Jr. (PEO) | | 1,856,300 | | 750,000 | | 183,465 | | 2,937,825 | | 79,577 | | 10,677,642 | | 15,471,767 | Daniel J. Schmechel (PFO) | | 453,400 | | 750,000 | | 34,729 | | 556,148 | | 15,056 | | 2,020,214 | | 3,029,762 | Thomas W. Handley | | 571,900 | | 750,000 | | 39,300 | | 628,668 | | 17,199 | | 2,307,762 | | 3,508,330 | Michael A. Hickey | | 309,300 | | 750,000 | | 23,580 | | 377,201 | | 10,319 | | 1,384,603 | | 2,071,104 |
Discharge(1)
If termination is after age 55 and completion of at least three years of service, the executive would receive their earned annual cash incentive under the Company’s annual cash incentive program as reported in the Non-Equity Incentive Plan Compensation column of the “Summary Compensation Table” at page 58. (2)
Certain elected corporate officers, including Mr. Beck, who terminate employment at or after: (i) attaining age 55 and completing at least ten years of service or (ii) attaining age 65 are covered by an executive life insurance policy. Under the program, the beneficiary of the retired executive is entitled to a death benefit equal to two times the executive’s average compensation for Cause – the five consecutive years of employment preceding retirement which yields the highest average compensation, subject to the maximum of $750,000. (3)
If termination is after: (i) age 55 and (ii) completion of at least five years of service, the NEO would be entitled to accelerated vesting for options held at least six months and an extended, post-retirement exercise period of five years (or the remaining term of the options, if shorter). Otherwise, all options may be exercised at any time during the three months after termination of employment, but not beyond the original ten-year term of the option. The closing stock price on December 29, 2023, the last business day of the Company’s fiscal year, of $198.35, is below the exercise price of certain stock options that would be accelerated and which are reported as having no intrinsic value, as follows: Mr. Beck, 20,083 options, and Mr. Brown, 4,686 options. (4)
If termination is after: (i) age 55 and (ii) completion of at least five years of service, service-vesting conditions with respect to PBRSU awards held at least six months will be deemed satisfied, but vesting remains subject to the attainment of performance goals. The listed value of the accelerated vesting of the PBRSUs for each of the NEOs assumes full attainment of performance goals, payment after the end of the performance period, and a stock price of $198.35. 68ECOLAB PROXY STATEMENT 2024
The Company is not obligated to pay any amounts in addition to the named executive officer’sNEO’s vested benefits in the event of a termination of employment for cause. The executive’s right to exercise vested options expires and unvested PBRSU and restricted stock unit awards are forfeited upon discharge for cause. Causecause as defined under the Company’s stock incentive plans includes: (a) deliberate injury or attempted injury related to the Company or any subsidiary, including dishonesty, fraud, misrepresentation, or embezzlement; (b) any unlawful or criminal activity of a serious nature; (c) any intentional and deliberate material breach of duty; or (d) material breach of any confidentiality or non-compete agreement.Anplans. Certain elected corporate officerofficers, including Mr. Beck, with qualifying age and years of service would receive coverage under the retiree life insurance program described in the above section entitled “Voluntary Resignation.“
Voluntary Resignation.”Death or Disability –
In the event of a termination as a result of death or disability, the named executive officerNEO or his or her beneficiaries would be entitled to the following benefits in addition to his or her vested benefits: | | | | | | EXECUTIVE
LONG-TERM
DISABILITY
BENEFITS(1)
($ PER MONTH) | | | | EXECUTIVE
LIFE
INSURANCE(2)
($) | | | | ANNUAL
CASH
INCENTIVE(3) | | | | ACCELERATED PORTION
OF STOCK OPTIONS(4) | | | | ACCELERATED PORTION
OF PBRSUs(5) AND RSUs(6) | | | | TOTAL
(EXCLUDING
EXECUTIVE LIFE
INSURANCE AND
LONG-TERM
DISABILITY
BENEFITS)
($) | | | | NAME | | | | NUMBER
(#) | | | | VALUE
($) | | | | NUMBER(7)
(#) | | | | VALUE(7)
($) | | | | | Christophe Beck (PEO) | | | | | | 35,000 | | | | | | | 9,000,000 | | | | | | | 3,731,250 | | | | | | | 171,002 | | | | | | | 4,106,720 | | | | | | | 69,996 | | | | | | | 13,883,707 | | | | | | | 21,721,677 | | | | | Scott D. Kirkland (PFO) | | | | | | 35,000 | | | | | | | — | | | | | | | 1,570,453 | | | | | | | 56,123 | | | | | | | 1,518,724 | | | | | | | 22,658 | | | | | | | 4,494,214 | | | | | | | 7,583,391 | | | | | Darrell R. Brown | | | | | | 35,000 | | | | | | | — | | | | | | | 1,570,453 | | | | | | | 52,315 | | | | | | | 1,349,323 | | | | | | | 20,962 | | | | | | | 4,157,813 | | | | | | | 7,077,589 | | | | | Machiel Duijser | | | | | | 31,250 | | | | | | | — | | | | | | | 906,887 | | | | | | | 35,239 | | | | | | | 949,045 | | | | | | | 27,431 | | | | | | | 5,440,939 | | | | | | | 7,296,871 | | | | | Lanesha T. Minnix | | | | | | 32,500 | | | | | | | — | | | | | | | 1,086,980 | | | | | | | 28,212 | | | | | | | 836,966 | | | | | | | 15,940 | | | | | | | 3,161,699 | | | | | | | 5,085,645 | | |
(1)
Certain executives who become “disabled” will, following a 180-day elimination period, receive payments from the Company equal to 60% of his or her base salary and annual cash incentive, reduced by the benefit paid under the Company’s insured long-term disability plan available to all full-time employees (which is limited to $15,000 per month). Total disability benefits are limited to $35,000 per month. (2)
Mr. Beck is covered by an executive life insurance policy which provides his beneficiary with an insured basic executive death benefit equal to three times base salary and target annual cash incentive for the year preceding the death, subject to a maximum benefit of $9,000,000; for an accidental death, an additional amount equal to the lesser of the death benefit or $6,000,000; for a death while on Company business, an additional amount equal to the lesser of three times annual compensation for the year preceding the death or $6,000,000. (3)
In the event of the executive’s death or disability, the NEO would receive their earned annual cash incentive under the Company’s annual cash incentive program as reported in the Non-Equity Incentive Plan Compensation column of the “Summary Compensation Table” at page 58. (4)
If employment terminates as a result of death or disability, the vesting of options is accelerated and the post-death/disability exercise period is extended to five years (or the remaining term of the options, if shorter). The closing stock price on December 29, 2023, the last business day of the Company’s fiscal year, of $198.35, is below the exercise price of certain stock options that would be accelerated and which are reported as having no intrinsic value, as follows: Mr. Beck, 20,083 options, Mr. Brown, 4,686 options, and Mr. Duijser, 4,017 options, Mr. Kirkland, 5,858 options. (5)
If employment terminates as a result of death or disability, service-based vesting conditions on PBRSUs will be deemed satisfied, but vesting remains subject to attainment of performance goals. The listed value of the accelerated vesting of the PBRSUs for each of the NEOs assumes full attainment of performance goals, payment after the end of the performance period, and a stock price of $198.35. (6)
If employment terminates as a result of death or disability, the vesting of RSU awards is accelerated. (7)
Amounts are with respect to PBRSUs for Messrs. Beck, Brown, and Kirkland, and PBRSUs and RSUs for Ms. Minnix (10,558 PBRSUs/$2,094,179 and 5,382 RSUs/$1,067,520), and Mr. Duijser (14,319 PBRSUs/$2,840,174 and 13,112 RSUs/$2,600,765). | | ·
Discharge Not for Cause: Resignation Due to Constructive Discharge | | Executive Long-Term Disability Benefits – Certain executives who become “disabled” will, following a 180-day elimination period, receive payments from the Company equal to 60% of his or her base salary and annual cash incentive, reduced by the benefit paid under the Company’s insured long-term disability plan available to all full-time employees (which is limited to $15,000 per month). Total disability benefits are limited to $35,000 per month. An executive is “disabled” during the first 18 months if he or she cannot earn at least 80% of his or her pre-disability compensation at his or her own occupation. After 18 months, the executive is “disabled” if he or she cannot earn at least 80% of his or her pre-disability compensation at any occupation for which he or she is qualified by training, education or experience. Benefits may continue until the executive reaches Social Security Normal Retirement Age, subject to certain minimum lengths of payment. Benefits are limited to 24 months if disability is a result of mental illness that results from any cause, any condition that may result from mental illness, alcoholism which is under treatment, or the non-medical use of narcotics, sedatives, stimulants, hallucinogens or any other such substance.
|
| ·
| | Executive Life Insurance – If an executive covered by executive life insurance dies, his beneficiary will receive an insured basic executive death benefit equal to three times the executive’s base salary and target annual cash incentive for the year preceding the death, subject to a maximum benefit of $9,000,000. If an executive’s death is accidental, the beneficiary would receive an additional accidental death benefit amount equal to the executive death benefit, subject to a maximum of $6,000,000. If an executive’s death occurs during travel on Company business, the benefit would be increased by three times the executive’s annual compensation for the year preceding the death, subject to a maximum business travel benefit of $6,000,000.
|
| | ECOLAB - 2018 Proxy Statement
| 59
| | |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| ·
| | Annual Cash Incentive – Payment of the annual cash incentive under the Company’s annual cash incentive program (Management Performance Incentive Plan or “MPIP” and Management Incentive Plan or “MIP”), which is described in the Compensation Discussion and Analysis beginning at page 38 and as part of the table entitled “Grants of Plan-Based Awards For 2017” at page 48, earned for the year that is proportionate to the portion of the performance period under the Plan that was completed prior to the termination of employment. The earned annual cash incentive payable to each of the named executive officers for termination due to death or disability on December 31, 2017 would be the full amount of the actual annual cash incentive earned as reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table at page 46.
|
| ·
| | Options – If employment terminates as a result of death or disability, the vesting of options is accelerated and the post-death/disability exercise period is extended to five years (or the remaining term of the options, if shorter).
|
| ·
| | PBRSUs – If employment terminates as a result of death or disability, service-based vesting conditions on PBRSUs will be deemed satisfied, but vesting remains subject to attainment of performance goals.
|
| ·
| | Restricted Stock Unit Awards – If employment terminates as a result of death or disability, the vesting of restricted stock unit awards is accelerated. None of the named executive officers holds any unvested restricted stock units.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Executive Long-Term Disability Benefits | | Executive Life Insurance | | Accelerated Portion of Stock Options | | Accelerated Portion of PBRSUs(1) | | Total (excluding Executive Life Ins. and Long-Term Disability Benefits) | Name | | ($) | | ($) | | Number (#) | | Value ($) | | Number (#) | | Value ($) | | ($) | Douglas M. Baker, Jr. (PEO) | | $35,000/mo | | 9,000,000 | | 356,207 | | 2,937,825 | | 117,580 | | 15,776,884 | | 18,714,709 | Daniel J. Schmechel (PFO) | | $35,000/mo | | 3,975,000 | | 65,822 | | 556,148 | | 21,897 | | 2,938,139 | | 3,494,287 | Thomas W. Handley | | $35,000/mo | | 4,746,000 | | 73,848 | | 628,668 | | 24,800 | | 3,327,664 | | 3,956,332 | Christophe Beck | | $35,000/mo | | 3,505,500 | | 44,309 | | 377,201 | | 14,879 | | 1,996,464 | | 2,373,665 | Michael A. Hickey | | $35,000/mo | | 3,505,500 | | 44,309 | | 377,201 | | 14,879 | | 1,996,464 | | 2,373,665 |
| (1)
| | Accelerated vesting of the PBRSUs for each of the named executive officers, assuming full attainment of performance goals, payment after the end of the performance period and a stock price of $134.18, the closing price on December 29, 2017, the last trading day of the year.
|
Discharge Not for Cause: Resignation Due to Constructive Discharge – The Company negotiates severanceseparation arrangements on a case-by-case basis if an executive’s employment is terminated involuntarily without cause or if the executive resigns as a result of a constructive discharge. Any such negotiated settlement would requirebe conditioned on the named executive officer to signsigning a general release and waiver of claims against the Company and would typically require compliance with confidentiality and non-compete restrictions. Payment of such severanceCash separation payments will generally be made in equal installments over regular payroll periods.
In addition, the Compensation & Human Capital Management Committee may, at its discretion, accelerate the vesting of PBRSU and RSU awards. The PBRSU awards further provide that vesting of the service-based vesting conditions will be ECOLAB PROXY STATEMENT 2024 69
accelerated on a pro-rated basis in the event an executive’s employment is terminated without cause, with payment of the pro-rated award subject to satisfaction of applicable performance criteria. Furthermore, if an executive’s position, age, and years of service qualify at time of termination, the executive would receive benefits under the same special provisions applicable for retirement as are described in the section entitled “Voluntary Resignation or Retirement” above. As noted in that section, two of our NEOs, Mr. Beck and Mr. Brown, would have been entitled to such special retirement provisions as of December 31, 2023. | | | | | | PAYMENTS(1)
($) | | | | STOCK OPTIONS(2) | | | | PBRSUs AND RSUs | | | | TOTAL VALUE
($) | | | | NAME | | | | NUMBER
(#) | | | | VALUE
($) | | | | NUMBER
(#) | | | | VALUE(3)
($) | | | | | Christophe Beck (PEO) | | | | | | 6,500,000 | | | | | | | — | | | | | | | — | | | | | | | 17,306 | | | | | | | 3,432,645 | | | | | | | 9,932,645 | | | | | Scott D. Kirkland (PFO) | | | | | | 3,200,000 | | | | | | | — | | | | | | | — | | | | | | | 5,824 | | | | | | | 1,155,190 | | | | | | | 4,355,190 | | | | | Darrell R. Brown | | | | | | 3,200,000 | | | | | | | — | | | | | | | — | | | | | | | 4,885 | | | | | | | 968,940 | | | | | | | 4,168,940 | | | | | Machiel Duijser | | | | | | 2,187,500 | | | | | | | — | | | | | | | — | | | | | | | 3,800 | | | | | | | 753,730 | | | | | | | 2,941,230 | | | | | Lanesha T. Minnix | | | | | | 2,405,000 | | | | | | | — | | | | | | | — | | | | | | | 1,779 | | | | | | | 352,865 | | | | | | | 2,757,865 | | |
(1)
For purposes of this disclosure, such awe have assumed that the negotiated severance is estimated to includesettlement includes payment of up to two years’ base salary and target annual cash incentive for each of the named executive officersNEOs listed. (2)
At the discretion of the Compensation & Human Capital Management Committee, the vesting of options may be accelerated or extended and the exercise period extended. However, no option may remain exercisable or continue to vestFor purposes of this disclosure, we have assumed that the negotiated settlement does not provide for more than two years beyond the date such option would have terminated if not for the Compensation Committee’s action, or beyond its expiration date, whichever first occurs.accelerated vesting of stock options. (3)
In addition, the Compensation & Human Capital Management Committee may, at its discretion, accelerate the vesting of PBRSU and restricted stock unitRSU awards. The PBRSU awards further provide that vesting of the service-based vesting conditions will be accelerated on a pro-rated basis in the event an executive’s employment is terminated without cause, with payment of the pro-rated award subject to satisfaction of applicable performance criteria. In addition, if an executive’s position, age and years For purposes of service qualify at timethis disclosure, we have assumed that the negotiated settlement does not provide for any additional acceleration of termination,vesting, other than the executive would receive benefits under the same special provisions applicable for retirement as are describedpro-rated vesting provided in the section entitled voluntary resignation above. As noted in that section, Messrs. Baker, Schmechel, Handley and Hickey would have been entitled to such special retirement provisions as of December 31, 2017.
PBRSU awards. | | | 60
Change in Control (Double Trigger) | ECOLAB - 2018 Proxy Statement
| | |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| | | | | | | | | | | | | | | | | | | | | | | | Severance Payments | | Accelerated Portion of Stock Options | | Accelerated Portion of PBRSUs(1) | | Total | Name | | ($) | | Number (#) | | Value ($) | | Number (#) | | Value ($) | | Value ($) | Douglas M. Baker, Jr. (PEO) | | 6,250,000 | | - | | - | | 39,215 | | 5,261,869 | | 11,511,869 | Daniel J. Schmechel (PFO) | | 2,250,000 | | - | | - | | 7,416 | | 995,079 | | 3,245,079 | Thomas W. Handley | | 2,660,000 | | - | | - | | 8,553 | | 1,147,642 | | 3,807,642 | Christophe Beck | | 1,995,000 | | - | | - | | 5,132 | | 688,612 | | 2,683,612 | Michael A. Hickey | | 1,995,000 | | - | | - | | 5,132 | | 688,612 | | 2,683,612 |
Change in Control – The Company maintains a Change-in-Control Severance Compensation Policy (the “Policy”) which applies to elected officers (other than assistant officers) of the Company, including each named executive officer listed in the Summary Compensation Table at page 46.NEO. The Policy excludes an officer who may otherwise be eligibleprovides for coverage but is covered by separate change-in-control or similar agreements with the Company or a subsidiary. The Board of Directors may terminate the Policy after two years’ advance notice, except that the Policy may not be terminated within two years after a change in control has occurred.
The Policy entitles an officer to a severance paymentbenefits if, within two years following a change in control, the officer’s employment with the Company is terminated without Just Cause (as defined in the Policy) or the officer voluntarily terminates employment for Good Reason (as defined in the Policy). The severance payment is paid in, conditioned on the executive’s execution of a lump sum equal to the sum of: (i) two times the sumgeneral release and waiver of the officer’s base salary plus target annual cash incentive; plus (ii) a pro-rated portion of the target annual cash incentive for the year of termination. The officer also is entitled to payment of reasonable outplacement service fees up to 20% of base salary, and continuation, for up to 18 months, of medical and dental health coverage at the cost the officer paid prior to termination of employment.claims. The Policy does not provide a gross-up for the 280G excise tax. However, the Policy does provide for a reduction of payments if the Policy results in higher after-tax income to the participant due to 280G excise tax. As a condition of the payment of such benefits, the officer must release the Company from employment-related claims.
The Company’s non-qualified Mirror Pension Plan and Supplemental Executive Retirement Plan discussed under the section entitled “Pension Benefits For 2017” beginningstock incentive plans also provide for certain benefits at page 52 provide that the interests of participants shall vest and become non-forfeitable upon a change in control of the Company. Messrs. Baker, Schmechel, Handley, Beck and Hickey each participateas defined in the Mirror Pension Plan and the Supplemental Executive Retirement Plan, and Messrs. Baker, Schmechel, Handley and Hickey are already vested in these benefits.Upon a change in control, if anythose plans. Unless an outstanding option, PBRSU award or restricted stock unitRSU award is continued, assumed, or replaced by the Company or the surviving or successor entity in connection with the change in control, andor if within two years after the change in controlsuch option or award is continued, assumed or replaced but an executive’s employment or other service is terminated without Cause or is terminated by the executive for Good Reason within two years after the change in control, then:
| (i)
| | each of the executive’s outstanding options will become exercisable in full and remain exercisable for the remaining term of the option,
|
| (ii)
| | each of the holder’s unvested restricted stock unit awards and PBRSU awards will fully vest, and
|
(i)
| (iii)
| | any performance goals applicable to the holder’s PBRSU awards will be deemed to have been satisfied to the target level of performance.
|
each of the executive’s outstanding options will become exercisable in full and remain exercisable for the remaining term of the option,If
(ii)
each of the holder’s unvested RSU awards and PBRSU awards will fully vest, and (iii)
any outstanding option,performance goals applicable to the holder’s PBRSU award or restricted stock unit award isawards will be deemed to have been satisfied to the target level of performance. However, in the event the awards are not continued, assumed or replaced in connection withby the change in control, thenCompany or the same consequences as specified in clauses (i) through (iii) of the previous sentence will occur in connection with a change in control unless and to the extentsurviving or successor entity, the Compensation & Human Capital Management Committee electsmay elect to terminate such options or awards in exchange for a payment with respect to each option or award in an amount equal to the excess, if any, between the fair market value of the shares subject to the option or award immediately prior to the effective date of such change in control (which may be the fair market value of the consideration to be received in the change-in-control transaction for the same number of shares) over the aggregate exercise price (if any) for the shares subject to such option or award (or, if there is not excess, such option or award may be terminated without payment). | | ECOLAB - 2018 Proxy Statement
| 61
| | |
70ECOLAB PROXY STATEMENT 2024
For purposes of the Policy and stock incentive plans, the term “change in control” means the occurrence of any of the following events:
| ·
| | a person or group acquires 25% or more of the Company’s outstanding voting power;
|
| ·
| | during any 24 consecutive month period, individuals who constitute the Board on the first day of the period or any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election relating to the election of directors) whose election or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds of the directors then still in office who were directors on the first day of such period (or whose election or nomination were previously so approved) shall cease for any reason to constitute at least a majority of the Board of Directors;
|
| ·
| | the Company engages in a merger or consolidation, other than a merger or consolidation in which the Company’s voting securities immediately prior to the transaction continue to represent over 50% of the voting power of the Company or the surviving entity immediately after the transaction and in which no person or group acquires 50% or more of the voting power of the Company or surviving entity; or
|
| ·
| | the consummation of a plan of complete liquidation or the Company sells all or substantially all of the Company’s assets, other than to an entity with more than 50% of its voting power owned by the Company’s stockholders in substantially the same proportion as their ownership of the Company immediately prior to the sale.
|
The table below summarizes the maximum additional payments the Company would be obligated to make if a qualifying termination due toin connection with a change in control occurred on December 31, 2017. 2023.| | | | | | SEVERANCE PAYMENTS | | | | EQUITY AWARDS | | | | TOTAL
POTENTIAL
VALUE(8)
($) | | | | | | | | | | | | (A) | | | | (B) | | | | (C) | | | | | | | | | CASH
LUMP
SUM(1)
($) | | | | ACCELERATED
PORTION OF
PENSION(2)
($) | | | | OUTPLACEMENT
SERVICE FEES(3)
($) | | | | HEALTH
INSURANCE
PREMIUMS(4)
($) | | | | TOTAL
SEVERANCE
PAYMENTS
($) | | | | ACCELERATED
PORTION OF STOCK
OPTIONS | | | | ACCELERATED
PORTION OF PBRSU
AND RSU AWARDS | | | | | NAME | | | | NUMBER(5)
(#) | | | | VALUE(6)
($) | | | | NUMBER
(#) | | | | VALUE(7)
($) | | | | | Christophe Beck | | | | | | 6,500,000 | | | | | | | — | | | | | | | 260,000 | | | | | | | 39,623 | | | | | | | 6,799,623 | | | | | | | 171,002 | | | | | | | 4,106,720 | | | | | | | 69,996 | | | | | | | 13,883,707 | | | | | | | 24,790,050 | | | | | Scott D. Kirkland | | | | | | 3,200,000 | | | | | | | — | | | | | | | 160,000 | | | | | | | 39,623 | | | | | | | 3,399,623 | | | | | | | 56,123 | | | | | | | 1,518,724 | | | | | | | 22,658 | | | | | | | 4,494,214 | | | | | | | 9,412,561 | | | | | Darrell R. Brown | | | | | | 3,200,000 | | | | | | | — | | | | | | | 160,000 | | | | | | | 29,174 | | | | | | | 3,389,174 | | | | | | | 52,315 | | | | | | | 1,349,323 | | | | | | | 20,962 | | | | | | | 4,157,813 | | | | | | | 8,896,310 | | | | | Machiel Duijser | | | | | | 2,187,500 | | | | | | | — | | | | | | | 125,000 | | | | | | | 43,256 | | | | | | | 2,355,756 | | | | | | | 35,239 | | | | | | | 949,045 | | | | | | | 27,431 | | | | | | | 5,440,939 | | | | | | | 8,745,740 | | | | | Lanesha T. Minnix | | | | | | 2,405,000 | | | | | | | — | | | | | | | 130,000 | | | | | | | 39,623 | | | | | | | 2,574,623 | | | | | | | 28,212 | | | | | | | 836,966 | | | | | | | 15,940 | | | | | | | 3,161,699 | | | | | | | 6,573,288 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Severance Payments | | Equity Awards | | | | | | | | | | | (A) | | (B) | | (C) | | | | | | | Accelerated | | | | Health | | Total | | Accelerated Portion of | | Accelerated Portion of | | Total | | | Cash Lump | | Portion of | | Outplacement | | Insurance | | Severance | | Stock Options | | PBRSU & RSU Awards | | Potential | | | Sum | | Pension | | Service Fees | | Premiums | | Payments | | Number | | Value | | Number | | Value | | Value | Name | | ($) | | ($)(1) | | ($) | | ($) | | ($) | | (#)(2) | | ($)(3) | | (#) | | ($)(4) | | ($)(5) | Douglas M. Baker, Jr. | | 6,250,000 | | - | | 250,000 | | 30,863 | | 6,530,863 | | 356,207 | | 2,937,825 | | 117,580 | | 15,776,884 | | 25,245,573 | Daniel J. Schmechel | | 2,250,000 | | - | | 125,000 | | 9,898 | | 2,384,898 | | 65,822 | | 556,148 | | 21,897 | | 2,938,139 | | 5,879,185 | Thomas W. Handley | | 2,660,000 | | - | | 140,000 | | 20,785 | | 2,820,785 | | 73,848 | | 628,668 | | 24,800 | | 3,327,664 | | 6,777,117 | Christophe Beck | | 1,995,000 | | 1,395,930 | | 114,000 | | 30,863 | | 3,535,793 | | 44,309 | | 377,201 | | 14,879 | | 1,996,464 | | 5,909,458 | Michael A. Hickey | | 1,995,000 | | - | | 114,000 | | 30,863 | | 2,139,863 | | 44,309 | | 377,201 | | 14,879 | | 1,996,464 | | 4,513,528 |
(1)
Cash severance payment equal to: (i) two times the sum of the officer’s base salary plus target annual cash incentive; plus (ii) a pro-rated portion of the target annual cash incentive for the year of termination. (2)
Represents that portion of the actuarial present value of accumulated pension benefits reported in the “Pension Benefits for 2023” table at page 64 which would become payable upon a change in control as a result of acceleration of vesting. (3)
Up to 20% of base salary. (4)
Subsidy on medical and dental continuation costs for 18 months based on premiums and elections in effect in December 2023. (5)
Total number of unvested options as of December 31, 2023. (6)
All options may be exercised at any time during the three months (or five years if retirement eligible) after employment after the change in control, but not beyond the original ten-year term of the option. The closing stock price on December 29, 2023, the last business day of the Company’s fiscal year, of $198.35, is below the exercise price of certain stock options that would be accelerated and which are reported as having no intrinsic value, as follows: Mr. Beck, 20,083 options, Mr. Brown, 4,686 options, and Mr. Duijser, 4,017 options, Mr. Kirkland, 5,858 options. (7)
Represents the value of PBRSU and RSU awards as of December 31, 2023, that would be accelerated at a stock price of $198.35. Amounts are with respect to PBRSUs for Messrs. Beck, Brown and Kirkland, and PBRSUs and RSUs for Ms. Minnix (10,558 PBRSUs/$2,094,179 and 5,382 RSUs/$1,067,520), and Mr. Duijser (14,319 PBRSUs/$2,840,174 and 13,112 RSUs/$2,600,765). (8)
Represents the sum of amounts in Column (A) Total Severance Payments, (B) Accelerated Portion of Stock Options, and (C) Accelerated Portion of PBRSU and RSU Awards. ECOLAB PROXY STATEMENT 2024 71
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K promulgated under the Exchange Act, we are providing the following information about the relationship between executive compensation actually paid and certain measures of financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the “Compensation Discussion and Analysis” beginning at page 40. For purposes of the tables below, the principal executive officer (“PEO”) and non-PEO named executive officers for 2020, 2021, 2022 and 2023 are the following: | | (1)
YEAR | | Represents that portion of the actuarial present value of accumulated pension benefits reported in the “Pension Benefits For 2017” table at page 52 which would become payable upon a change in control as a result of acceleration of vesting.
|
| | (2)
| PEO | Total number of unvested options as of December 31, 2017.
|
| | (3)
| | Represents the difference between the closing price of our Common Stock as of December 29, 2017 ($134.18) and the exercise price of each option that would be accelerated. All options may be exercised at any time during the three months (or five years if retirement eligible) after employment after the change in control, but not beyond the original ten-year term of the option.
|
| NON-PEO NAMED EXECUTIVE OFFICERS | (4)
| | Represents the value of PBRSU and restricted stock unit awards as of December 29, 2017 ($134.18) that would be accelerated.
|
| (5)
| | Represents the sum of amounts in Column (A) Total Severance Payments, (B) Accelerated Portion of Stock Options and (C) Accelerated Portion of PBRSU and Restricted Stock Unit Awards.
|
| | 62
| ECOLAB - 2018 Proxy Statement
2023 | | | | Christophe Beck | | | | Scott D. Kirkland, Darrell R. Brown, Machiel Duijser, and Lanesha T. Minnix | | | | 2022 | | | | Christophe Beck | | | | Scott D. Kirkland, Lanesha T. Minnix, Laurie M. Marsh, and Darrell R. Brown | | | | 2021 | | | | Christophe Beck | | | | Daniel J. Schmechel, Angela M. Busch, Timothy P. Mulhere, and Douglas M. Baker, Jr. | | | | 2020 | | | | Douglas M. Baker, Jr. | | | | Daniel J. Schmechel, Christophe Beck, Machiel Duijser and Elizabeth A. Simermeyer | |
| | (A) | | | | (B) | | | | (C) | | | | (D) | | | | (E) | | | | (F) | | | | (G) | | | | (H) | | | | (I) | | | | | | | | SUMMARY
COMPENSATION
TABLE TOTAL
FOR PEO(1)
($) | | | | COMPENSATION
ACTUALLY PAID
TO PEO(2)
($) | | | | AVERAGE
SUMMARY
COMPENSATION
TABLE TOTAL
FOR NON-PEO
NAMED
EXECUTIVE
OFFICERS(3)
($) | | | | AVERAGE
COMPENSATION
ACTUALLY PAID
TO NON-PEO
NAMED
EXECUTIVE
OFFICERS(4)
($) | | | | VALUE OF FIXED $100
INVESTMENT BASED ON: | | | | NET
INCOME(7)
($ MILLIONS) | | | | ADJUSTED
EPS(8)
($) | | | | YEAR | | | | TOTAL
SHAREHOLDER
RETURN(5)
(#) | | | | PEER GROUP
TOTAL
SHAREHOLDER
RETURN(6)
($) | | | | | 2023 | | | | | | 15,547,055 | | | | | | | 22,727,541 | | | | | | | 5,005,743 | | | | | | | 7,106,251 | | | | | | | 107.41 | | | | | | | 151.73 | | | | | | | 1,372.3 | | | | | | | 5.21 | | | | | 2022 | | | | | | 8,720,419 | | | | | | | 2,627,030 | | | | | | | 4,044,487 | | | | | | | 2,631,032 | | | | | | | 77.87 | | | | | | | 134.30 | | | | | | | 1,091.7 | | | | | | | 4.49 | | | | | 2021 | | | | | | 8,365,888 | | | | | | | 10,099,689 | | | | | | | 3,082,720 | | | | | | | 4,579,856 | | | | | | | 123.79 | | | | | | | 151.89 | | | | | | | 1,129.9 | | | | | | | 4.69 | | | | | 2020 | | | | | | 16,905,180 | | | | | | | 18,110,719 | | | | | | | 5,434,441 | | | | | | | 5,377,090 | | | | | | | 113.17 | | | | | | | 119.36 | | | | | | | (1,205.1) | | | | | | | 4.02 | | |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
PAY RATIO DISCLOSURE
We are required
(2)
The dollar amounts reported in column (C) represent the amount of “compensation actually paid” to the PEO, 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 SEC rules and regulationsor paid to disclose: (i) the annualPEO during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to the PEO’s total compensation for our CEO; (ii) an estimateeach year to determine the compensation actually paid: | | YEAR | | | | REPORTED SUMMARY
COMPENSATION
TABLE TOTAL FOR PEO
($) | | | | REPORTED
VALUE OF
EQUITY
AWARDS(a)
($) | | | | EQUITY AWARD
ADJUSTMENTS(b)
($) | | | | REPORTED CHANGE IN
THE ACTUARIAL PRESENT
VALUE OF PENSION
BENEFITS(c)
($) | | | | PENSION BENEFIT
ADJUSTMENTS(d)
($) | | | | COMPENSATION
ACTUALLY PAID
TO PEO
($) | | | | 2023 | | | | | | 15,547,055 | | | | | | | (9,930,288) | | | | | | | 17,279,060 | | | | | | | (195,936) | | | | | | | 27,650 | | | | | | | 22,727,541 | | | | | 2022 | | | | | | 8,720,419 | | | | | | | (7,531,081) | | | | | | | 1,398,052 | | | | | | | 0 | | | | | | | 39,640 | | | | | | | 2,627,030 | | | | | 2021 | | | | | | 8,365,888 | | | | | | | (5,750,129) | | | | | | | 7,440,403 | | | | | | | 0 | | | | | | | 43,527 | | | | | | | 10,099,689 | | | | | 2020 | | | | | | 16,905,180 | | | | | | | (10,854,129) | | | | | | | 16,619,383 | | | | | | | (4,601,533) | | | | | | | 41,818 | | | | | | | 18,110,719 | | |
(a)
The grant date fair value of equity awards represents the total of the median annualamounts reported in the “Stock Awards” and “Option Awards” columns in the “Summary Compensation Table” for the applicable year. (b)
The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i)
the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii)
the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii)
for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv)
for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v)
for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and 72ECOLAB PROXY STATEMENT 2024
(vi)
the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for a global population consistingthe applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of our associates (excluding our CEO)grant. The amounts deducted or added in calculating the equity award adjustments are as follows: | | YEAR | | | | YEAR END
FAIR
VALUE OF
EQUITY
AWARDS
($) | | | | YEAR OVER
YEAR CHANGE
IN FAIR VALUE
OF
OUTSTANDING
AND UNVESTED
EQUITY
AWARDS
($) | | | | FAIR VALUE
AS OF
VESTING
DATE OF
EQUITY
AWARDS
GRANTED
AND VESTED
IN THE YEAR
($) | | | | YEAR OVER
YEAR CHANGE
IN FAIR VALUE
OF EQUITY
AWARDS
GRANTED IN
PRIOR YEARS
THAT VESTED
IN THE YEAR
($) | | | | FAIR VALUE AT
THE END OF
THE PRIOR
YEAR OF
EQUITY
AWARDS THAT
FAILED TO
MEET VESTING
CONDITIONS IN
THE YEAR
($) | | | | VALUE OF
DIVIDENDS OR
OTHER EARNINGS
PAID ON STOCK OR
OPTION AWARDS
NOT OTHERWISE
REFLECTED IN FAIR
VALUE OR TOTAL
COMPENSATION
($) | | | | TOTAL EQUITY
AWARD
ADJUSTMENTS
($) | | | | 2023 | | | | | | 10,534,522 | | | | | | | 4,750,990 | | | | | | | — | | | | | | | 1,993,548 | | | | | | | — | | | | | | | — | | | | | | | 17,279,060 | | | | | 2022 | | | | | | 7,843,382 | | | | | | | (4,114,803) | | | | | | | — | | | | | | | (2,330,527) | | | | | | | — | | | | | | | — | | | | | | | 1,398,052 | | | | | 2021 | | | | | | 6,429,092 | | | | | | | 897,867 | | | | | | | — | | | | | | | 113,444 | | | | | | | — | | | | | | | — | | | | | | | 7,440,403 | | | | | 2020 | | | | | | 10,538,992 | | | | | | | 2,677,081 | | | | | | | — | | | | | | | 3,403,310 | | | | | | | — | | | | | | | — | | | | | | | 16,619,383 | | |
(c)
The amounts included in this column are the amounts reported in “Change in Pension and other individuals whom such rules and regulations deem to be our employees (collectively, our “global employees,” andNon-Qualified Deferred Compensation” column of the global employee having“Summary Compensation Table” for each applicable year. (d)
The total pension benefit adjustments for each applicable year include the medianaggregate of such global employees’ estimated annual total compensation, our “global median employee”two components: (i)
the actuarially determined service cost for services rendered by the PEO during the applicable year (the “service cost”); and (iii) (ii)
the ratioentire cost of benefits granted in a plan amendment (or initiation) during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. The amounts deducted or added in calculating the pension benefit adjustments are as follows: | | YEAR | | | | SERVICE COST
($) | | | | PRIOR SERVICE COST
($) | | | | TOTAL PENSION BENEFIT
ADJUSTMENTS
($) | | | | 2023 | | | | | | 27,650 | | | | | | | — | | | | | | | 27,650 | | | | | 2022 | | | | | | 39,640 | | | | | | | — | | | | | | | 39,640 | | | | | 2021 | | | | | | 43,527 | | | | | | | — | | | | | | | 43,527 | | | | | 2020 | | | | | | 41,818 | | | | | | | — | | | | | | | 41,818 | | |
(3)
The dollar amounts reported in column (D) represent the average of the annualamounts reported for the Company’s non-PEO NEOs as a group in the “Total” column of the “Summary Compensation Table” in each applicable year. (4)
The dollar amounts reported in column (E) represent the average amount of “compensation actually paid” to the non-PEO NEOs as a group, 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 following adjustments were made to 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 above in Note 2: | | YEAR | | | | AVERAGE REPORTED
SUMMARY
COMPENSATION
TABLE TOTAL FOR
NON-PEO NEOS
($) | | | | AVERAGE
REPORTED
VALUE OF
EQUITY
AWARDS
($) | | | | AVERAGE EQUITY
AWARD
ADJUSTMENTS(a)
($) | | | | AVERAGE REPORTED
CHANGE IN THE
ACTUARIAL PRESENT
VALUE OF PENSION
BENEFITS
($) | | | | AVERAGE
PENSION BENEFIT
ADJUSTMENTS(b)
($) | | | | AVERAGE
COMPENSATION
ACTUALLY PAID
TO NON-PEO
NEOS
($) | | | | 2023 | | | | | | 5,005,743 | | | | | | | (2,810,303) | | | | | | | 4,938,491 | | | | | | | (42,312) | | | | | | | 14,633 | | | | | | | 7,106,251 | | | | | 2022 | | | | | | 4,044,487 | | | | | | | (2,919,197) | | | | | | | 1,494,256 | | | | | | | (5,384) | | | | | | | 16,870 | | | | | | | 2,631,032 | | | | | 2021 | | | | | | 3,082,720 | | | | | | | (1,594,538) | | | | | | | 3,073,423 | | | | | | | 0 | | | | | | | 18,251 | | | | | | | 4,579,856 | | | | | 2020 | | | | | | 5,434,441 | | | | | | | (3,078,907) | | | | | | | 3,700,875 | | | | | | | (821,580) | | | | | | | 142,261 | | | | | | | 5,377,090 | | |
ECOLAB PROXY STATEMENT 2024 73
(a)
The amounts deducted or added in calculating the equity award adjustments are as follows: | | YEAR | | | | AVERAGE
YEAR END
FAIR
VALUE OF
EQUITY
AWARDS
($) | | | | YEAR OVER
YEAR AVERAGE
CHANGE IN
FAIR VALUE OF
OUTSTANDING
AND UNVESTED
EQUITY
AWARDS
($) | | | | AVERAGE
FAIR VALUE
AS OF
VESTING
DATE OF
EQUITY
AWARDS
GRANTED
AND VESTED
IN THE YEAR
($) | | | | YEAR OVER
YEAR AVERAGE
CHANGE IN
FAIR VALUE OF
EQUITY
AWARDS
GRANTED IN
PRIOR YEARS
THAT VESTED
IN THE YEAR
($) | | | | AVERAGE FAIR
VALUE AT THE
END OF THE
PRIOR YEAR OF
EQUITY
AWARDS THAT
FAILED TO
MEET VESTING
CONDITIONS IN
THE YEAR
($) | | | | AVERAGE VALUE OF
DIVIDENDS OR
OTHER EARNINGS
PAID ON STOCK OR
OPTION AWARDS
NOT OTHERWISE
REFLECTED IN FAIR
VALUE OR TOTAL
COMPENSATION
($) | | | | TOTAL
AVERAGE
EQUITY AWARD
ADJUSTMENTS
($) | | | | 2023 | | | | | | 3,085,820 | | | | | | | 1,338,182 | | | | | | | — | | | | | | | 514,489 | | | | | | | — | | | | | | | — | | | | | | | 4,938,491 | | | | | 2022 | | | | | | 2,931,884 | | | | | | | (721,836) | | | | | | | — | | | | | | | (715,792) | | | | | | | — | | | | | | | — | | | | | | | 1,494,256 | | | | | 2021 | | | | | | 1,788,525 | | | | | | | 976,574 | | | | | | | — | | | | | | | 308,324 | | | | | | | — | | | | | | | — | | | | | | | 3,073,423 | | | | | 2020 | | | | | | 3,084,855 | | | | | | | 296,176 | | | | | | | — | | | | | | | 319,844 | | | | | | | — | | | | | | | — | | | | | | | 3,700,875 | | |
(b)
The amounts deducted or added in calculating the pension benefit adjustments are as follows: | | YEAR | | | | AVERAGE SERVICE COST
($) | | | | AVERAGE PRIOR SERVICE COST
($) | | | | TOTAL AVERAGE PENSION
BENEFIT ADJUSTMENTS
($) | | | | 2023 | | | | | | 14,633 | | | | | | | — | | | | | | | 14,633 | | | | | 2022 | | | | | | 16,870 | | | | | | | — | | | | | | | 16,870 | | | | | 2021 | | | | | | 18,251 | | | | | | | — | | | | | | | 18,251 | | | | | 2020 | | | | | | 142,261 | | | | | | | — | | | | | | | 142,261 | | |
(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. (6)
The peer group reflected for 2023 is the S&P 500 Materials Index and the peer group reflected for 2020-2022 is our CEOcompensation peer group from those years. In an effort to provide a more general comparison to companies in our sector and minimize year-over-year variability in the peer group, we have transitioned from use of our compensation peer group to the annualS&P 500 Materials Index for purposes of our peer TSR calculations. The table below provides a comparison of the Company’s cumulative total return with that of both the S&P 500 Materials Index and the previous peer group. | | | | | | 1-Year TSR
12/31/19 - 12/31/20 | | | | 2-Year TSR
12/31/19 - 12/31/21 | | | | 3-Year TSR
12/31/19 - 12/31/22 | | | | 4-Year TSR
12/31/19 - 12/31/23 | | | | Ecolab Inc. | | | | | $ | 113.17 | | | | | | $ | 123.79 | | | | | | $ | 77.87 | | | | | | $ | 107.41 | | | | | S&P 500 Materials Index | | | | | $ | 120.73 | | | | | | $ | 153.67 | | | | | | $ | 134.82 | | | | | | $ | 151.73 | | | | | Previous Peer Group | | | | | $ | 119.36 | | | | | | $ | 151.89 | | | | | | $ | 134.30 | | | | | | $ | 154.95 | | |
The previous peer group was comprised of the following 21 comparison companies used by the Company for compensation benchmarking for the years 2020-2022: | | 3M Company | | | Dover Corp. | | | Emerson Electric Co. | | | PPG Industries Inc. | | | | Air Products and Chemicals, Inc. | | | Dow Inc. | | | General Mills, Inc. | | | Republic Services Inc. | | | | Celanese Corporation | | | DuPont de Nemours Inc. | | | Illinois Tool Works Inc. | | | Roper Technologies Inc. | | | | Cintas Corporation | | | Eastman Chemical Co. | | | Linde plc | | | Sherwin-Williams Co. | | | | Clorox Co. | | | Eaton Corporation plc | | | LyondellBasell Industries NV | | | Waste Management Inc. | | | | Danaher Corp. | | | | | | | | | | |
(7)
The dollar amounts reported represent the amount of net income reflected in the Company’s audited financial statements for the applicable year. The amount of net income for 2020 reflects a loss from discontinued operations, net of tax, of $2,172.5 million. (8)
Our non-GAAP adjusted financial measure for diluted earnings per share excludes the impact of special (gains) and charges and the impact of discrete tax items. We include items within special (gains) and charges and discrete tax items that we believe can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs associated with historical trends and future results. After tax special (gains) and charges are derived by applying the applicable local jurisdictional tax rate to the corresponding pre-tax special (gains) and charges. 74ECOLAB PROXY STATEMENT 2024
FINANCIAL PERFORMANCE MEASURES As described in greater detail in the “Compensation Discussion and Analysis,” the Company’s compensation programs are designed to enable us to attract and retain the leadership talent that is necessary to successfully manage our global median employee. strong earnings growth and return on invested capital objectives, while balancing necessary investment in the businesses in order to achieve attractive, long-term shareholder returns. As required by Item 402(v) of Regulation S-K, the following is a list of performance measures, which in our assessment represents the most important performance measures used by the Company to link compensation actually paid to the Company’s NEOs for 2023: | | ▪
Adjusted diluted earnings per share | | | | ▪
Organic return on invested capital | | | | ▪
Weighted average business unit operating income* | | | | ▪
Weighted average business unit sales* | | | | ▪
Relative total shareholder return | |
*
Commercial average component of Enterprise Goal described under the heading “Annual Cash Incentives” of the Compensation Discussion and Analysis beginning at page 40. ECOLAB PROXY STATEMENT 2024 75
DESCRIPTION OF RELATIONSHIPS BETWEEN INFORMATION PRESENTED In accordance with Item 402(v) of Regulation S-K, the Company is providing the following descriptions of the relationships between information presented in the Pay versus Performance table. 76ECOLAB PROXY STATEMENT 2024
ECOLAB PROXY STATEMENT 2024 77
PAY RATIO DISCLOSURE For the year ended December 31, 2017,2023, the annual total compensation for our CEO was $14,383,229,$15,547,055, as reported in the final column of the “Summary Compensation TableTable” at page 46,58, and the annual total compensation for our global median employee was $60,556,$49,177, calculated in accordance with the rules applicable to the “Summary Compensation Table.Table”. For the year ended December 31, 2017,2023, the annual total compensation for our CEO was 238316 times the annual total compensation for our global median employee.For purposes of identifying our global median employee, we used our global employee population as of November 1, 2017, which consisted of 52,563 total global employees, of whom 21,908 were employed in the United States and 30,655 were employed in foreign jurisdictions. As permitted by SEC rules and regulations, we excluded: (i) leased employees and independent contractors; (ii) approximately 827 employees from the Laboratories Anios, Prochimservice, and Georgia-Pacific Paper Chemicals Business acquisitions that closed in 2017; and (iii) 2,546 employees in the foreign jurisdictions of Uganda (92 employees), South Africa (506 employees), Chile (564 employees), Russia (595 employees), and Indonesia (789 employees).
| | For purposes of identifying our global median employee in 2023, we used our global employee population as of November 1, 2023, which consisted of 53,048 total global employees, of whom 19,418 were employed in the United States and 33,630 were employed in foreign jurisdictions. As permitted by SEC rules, we excluded leased employees and independent contractors, as well as 2,599 employees in the following foreign jurisdictions: | | | | |
| | COUNTRY | | | | NUMBER OF
EMPLOYEES | | | | Lebanon | | | | | | 1 | | | | | Suriname | | | | | | 1 | | | | | Antigua and Barbuda | | | | | | 2 | | | | | Jordan | | | | | | 2 | | | | | Tunisia | | | | | | 4 | | | | | Guam | | | | | | 7 | | | | | Tanzania | | | | | | 19 | | |
| | COUNTRY | | | | NUMBER OF
EMPLOYEES | | | | Uganda | | | | | | 23 | | | | | El Salvador | | | | | | 26 | | | | | Nicaragua | | | | | | 28 | | | | | Ukraine | | | | | | 35 | | | | | Honduras | | | | | | 40 | | | | | Pakistan | | | | | | 74 | | | | | | | | | | | | | |
| | COUNTRY | | | | NUMBER OF
EMPLOYEES | | | | Venezuela | | | | | | 86 | | | | | Malta | | | | | | 103 | | | | | Vietnam | | | | | | 122 | | | | | Egypt | | | | | | 202 | | | | | Philippines | | | | | | 858 | | | | | Indonesia | | | | | | 966 | | | | | | | | | | | | | |
After giving effect to these exclusions, the number of global employees from which our global median employee was identified was 50,017. We used50,449. To identify the median employee, we first calculated the sum of base salary and commissionstarget bonus for the 12-month period ending October 31, 2017 as the compensation measure that we applied consistently to all global employees, and wepopulation. We annualized this amount for global employees who commenced employment during that period. For global employees paid in currencies other than U.S. dollars, we converted to U.S. dollars using treasury rates as of September 30, 2017. We2023. Upon calculating the median amount of compensation utilizing this methodology, we applied statistical sampling with the assistance of an outside expert to identify the population of global employees with compensation within a 15 percent range around the median. OnceFrom this population of global employees, waswe identified we included all other elements ofa median employee and then calculated their total annual total compensation to determinecompensation. We believe the pay ratio presented above is a reasonable estimate calculated in a manner consistent with applicable SEC rules. Because the SEC rules for identifying the global median employee including, butand calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not limitedbe comparable to bonus and overtimethe pay the grant date fair value of stock and option awards, the actuarial increase in the present value of pension benefits, Company contributions to defined contribution plans, and perquisites.ratio reported above. 78ECOLAB PROXY STATEMENT 2024
| | | ECOLAB - 2018 Proxy Statement
PROPOSAL 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 63
| | | | | | | | The Board of Directors recommends that the stockholders vote FOR the ratification of the appointment of PwC as our independent registered public accounting firm for the year ending December 31, 2024. | |
AUDIT COMMITTEE REPORT
The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent auditors. The Audit Committee assesses the independent auditor annually, and considers many factors, including: ▪
the firm’s independence and process for monitoring and maintaining its independence, ▪
the capabilities of the firm’s personnel and key members of the engagement team, ▪
how well the firm meets agreed objectives for the audit, ▪
the firm’s responsiveness, ▪
the firm’s objectivity, ▪
their knowledge of our business, ▪
their status as a registered public accounting firm with the Public Company Accounting Oversight Board (United States) (“PCAOB”) as required by the Sarbanes-Oxley Act of 2002 and the Rules of the PCAOB, ▪
the reasonableness of the fees for the engagement, and ▪
the quality and frequency of communication with the Company and the Audit Committee. The Audit Committee requires the lead engagement partner to rotate periodically, and no less frequently than every five years, to support their independence. After assessing the qualifications, performance, and independence of PricewaterhouseCoopers LLP (“PwC”), which has served as this Company’s independent auditor since 1970, the Audit Committee appointed PwC as our independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2024, and to perform other appropriate services. The Audit Committee considered a number of factors in determining whether to re-engage PwC as the Company’s independent registered public accounting firm for the year ending December 31, 2024, including: ▪
the firm’s professional qualifications and resources, ▪
the firm’s past performance, ▪
the firm’s capabilities in handling the breadth and complexity of our business, ▪
the length of time the firm has served in this role, and ▪
the potential impact of changing independent auditors which may include loss of efficiencies. Representatives of PwC are expected to be present at our Annual Meeting of Stockholders. They 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. PwC has provided professional services to the Company in 2023, the aggregate fees and expenses of which are reported at page 81. | | | | | The Board of Directors recommends that the stockholders vote FOR the ratification of the appointment of PwC as our independent registered public accounting firm for the year ending December 31, 2024. Although stockholder ratification of the appointment of our independent registered public accounting firm is not required, the Board believes it is a matter of good governance to submit the appointment of PwC for stockholder consideration and ratification. If the appointment of PwC is not ratified, the Audit Committee will reconsider the matter, but will not be required to change its decision to appoint PwC as independent registered public accounting firm. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FOR ratification of the appointment of PwC. | |
ECOLAB PROXY STATEMENT 2024 79
AUDIT COMMITTEE REPORT Our Audit Committee is comprised of the members listed below, each of whom the Board has determined to be independent under the NYSE listing standards, SEC rules, and our Corporate Governance Principles, and each of whom is financially literate as defined under NYSE listing standards. The Board has determined that Mses. McKibben and Reich and Messrs. MacLennan and Nowell each qualify as audit committee financial experts as defined by SEC rules. The Audit Committee operates under a written Charter and the functions of the Committee are described under the heading “Board Committees –— Audit Committee” at page 1525 hereof. The Audit Committee’s Charter recognizes that (i) it is the responsibility of management to prepare the Company’s financial statements in accordance with Accounting Principles Generally Accepted in the United States of America and to maintain an effective system of financial control; and (ii)that it is the responsibility of the independent auditors to plan and conduct the annual audit and express their opinion on the consolidated financial statements in accordance with professional standards. As recognized in the Charter, the Committee’s responsibilities include overseeing the work of the participants in the financial reporting and control process.In this context, the The Audit Committee has meets periodically with management, including with the Company employee primarily responsible for preparing financial statements, the employee primarily responsible for internal audit activities, the Company’s Chief Compliance Officer, and also meets periodically with the Company’s registered public accounting firm, PwC.
The Audit Committee has: (i)
reviewed and discussed the audited consolidated financial statements of the Company as of December 31, 2017,2023, and for the year then ended (the “Financial Statements”) with management which has represented that the Financial Statements were prepared in accordance with Accounting Principles Generally Accepted in the United States of America, (ii)
discussed the Financial Statements with PricewaterhouseCoopers LLPPwC (our independent registered public accounting firm), including the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard 1301, “Communications with Audit Committees,”the applicable requirements of the PCAOB and SEC, and (iii)
received the written disclosures and the letter from PricewaterhouseCoopers LLPPwC required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with PricewaterhouseCoopers LLPPwC their independence. The Committee has also considered whether PricewaterhouseCoopers LLP’sand determined that PwC’s provision of non-audit services as described below under the heading “Audit Fees” is compatible with maintaining PricewaterhouseCoopers LLP’s“Audit Fees” do not compromise PwC’s independence. Based on the foregoing review and discussions, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the Financial Statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20172023, for filing with the SEC. THE AUDIT COMMITTEE Dated: February 22, 2018
| Carl M. Casale
Lionel L.
Nowell III (Chair) | | | Judson B.
Althoff | | | Shari L.
Ballard | | | David W.
MacLennan | | | Tracy B.
McKibben | | | Victoria J.
Reich | | David W. MacLennan
| | Suzanne M.
Vautrinot | | Tracy B. McKibben
| |
| | 64
| ECOLAB - 2018 Proxy Statement
| | |
80ECOLAB PROXY STATEMENT 2024
AUDIT FEES
The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP (“PwC”)PwC for the years ended December 31, 20172023 and 2016. 2022.| | | | | | YEAR ENDED | | | | FEE CATEGORY | | | | 2023
($) | | | | 2022
($) | | | | Audit fees(1) | | | | | | 14,843,500 | | | | | | | 11,851,700 | | | | | Audit-related fees(2) | | | | | | 228,459 | | | | | | | 136,300 | | | | | Tax fees(3) | | | | | | 7,562,000 | | | | | | | 3,327,000 | | | | | All other fees(4) | | | | | | 900 | | | | | | | 3,200 | | | | | Total | | | | | | 22,634,859 | | | | | | | 15,318,200 | | |
| | | | | | | | Fee Category | | 2017 | | 2016 | Audit Fees (1) | $ | 12,953,000 | $ | 12,013,000 | Audit-related Fees (2) | $ | 710,000 | $ | 107,000 | Tax Fees (3) | $ | 4,830,000 | $ | 4,070,000 | All Other Fees (4) | $ | 42,000 | $ | 23,000 |
| (1)
| | Fees and expenses paid to PwC for: (i) annual audit (annual audit and quarterly reviews of the consolidated financial statements required to be performed in accordance with generally accepted auditing standards); (ii) 404 attestation services (attestation services relating to the report on the Company’s internal controls as specified in Section 404 of Sarbanes-Oxley Act); (iii) statutory audits (statutory audits or financial audits for subsidiaries or affiliates required to be performed in accordance with local regulations); (iv) regulatory financial filings (services associated with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents) and assistance in responding to SEC comment letters); (v) incremental audit procedures related to acquisitions or other transactions; and (vi) consultations on accounting and disclosure matters.
|
(1)
| (2)
| | Fees and expenses paid to PwC for: (i) agreed-upon procedures (agreed-upon or expanded audit procedures related to accounting records required to respond to or comply with financial, accounting or regulatory matters); (ii) attest services; and (iii) employee benefit plan audits (financial statement audits of pension and other employee benefit plans).
|
Fees and expenses paid to PwC for: | (3)
| | Fees and expenses paid to PwC for: (i) U.S. federal, state and local tax advice (assistance with tax audits, technical interpretations, applicable laws and regulations, tax advice on mergers, acquisitions and restructurings), $800,000; (ii) US Federal, state and local tax compliance (preparation and/or review of tax returns including sales and use tax, excise tax, income tax, and property tax; consultation regarding applicable handling of items for tax returns, required disclosures, elections, and filing positions available to the Company), $100,000; (iii) international non-U.S. tax compliance (preparation and review of income, local, VAT, and GST tax returns or other tax filings, required disclosures, elections and filing positions available to the Company) and international non-U.S. tax advice (assistance with tax examinations (other than legal or other representation in tax courts or agencies), advice on various matters including foreign tax credit, foreign income tax, tax accounting, foreign earnings and profits, U.S. treatment of foreign subsidiary income, VAT, GST, excise tax or equivalent taxes in the jurisdiction, and tax advice on restructurings, mergers, and acquisitions), $2,430,000; and (iv) transfer pricing (advice and assistance with respect to transfer pricing matters, including preparation of reports used by the Company to comply with taxing authority documentation requirements regarding royalties and inter-company pricing and assistance with tax exemptions), $1,500,000.
|
| (4)
| | This category includes all fees paid to PwC that must be disclosed and are appropriately not included in the Audit, Audit-Related and Tax categories.
|
(i)
annual audit (annual audit and quarterly reviews of the consolidated financial statements required to be performed in accordance with generally accepted auditing standards); (ii)
404 attestation services (attestation services relating to the report on the Company’s internal controls as specified in Section 404 of the Sarbanes-Oxley Act); (iii)
statutory audits (statutory audits or financial audits for subsidiaries or affiliates required to be performed in accordance with local regulations); (iv)
regulatory financial filings (services associated with SEC registration statements, periodic reports, and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters, consents) and assistance in responding to SEC comment letters); (v)
incremental audit procedures related to acquisitions or other transactions; and (vi)
consultations on accounting and disclosure matters. (2)
Fees and expenses paid to PwC for: (i)
agreed-upon procedures (agreed-upon or expanded audit procedures related to accounting records required to respond to or comply with financial, accounting or regulatory matters); (ii)
attest services; and (iii)
employee benefit plan audits (financial statement audits of pension and other employee benefit plans). (3)
Fees and expenses paid to PwC for: (i)
U.S. federal, state, and local tax advice (assistance with tax audits, technical interpretations, applicable laws and regulations, tax advice on mergers, acquisitions and restructurings), and compliance (preparation and/or review of tax returns including sales and use tax, excise tax, income tax, and property tax; consultation regarding applicable handling of items for tax returns, required disclosures, elections, and filing positions available to the Company); (ii)
international non-U.S. tax compliance (preparation and review of income, local, VAT, and GST tax returns or other tax filings, required disclosures, elections and filing positions available to the Company), and international non-U.S. tax advice (assistance with tax examinations (but not legal or other representation in tax courts or agencies), advice on various matters including foreign tax credit, foreign income tax, foreign earnings and profits, U.S. treatment of foreign subsidiary income, VAT, GST, excise tax or equivalent taxes in the jurisdiction, and tax advice on restructurings, mergers, and acquisitions); and (iii)
transfer pricing (advice and assistance with respect to transfer pricing matters, including preparation of reports used by the Company to comply with taxing authority documentation requirements regarding royalties and inter-company pricing and assistance with tax exemptions). (4)
This category includes fees for technical accounting publications and subscriptions. All of the professional services provided by PwC in 20172023 and 20162022 were approved or pre-approved in accordance with policies and procedures of the Audit Committee and the Company. The Audit Committee has pre-approved projects for certain permissible non-audit services. Under the policy,policies and procedures, requests for pre-approvals of permissible non-audit services must be accompanied by detailed documentation regarding specific services to be provided. The policy specifiespolicies and procedures specify that: | ·
| | annual pre-approval of the audit engagement (including internal control attestation) is required;
|
| ·
| | the independent auditor may not provide prohibited services;
|
▪
| ·
| | annual pre-approval is provided for employee benefit plan audits and special audits, as well as other attestation services;
|
annual pre-approval of the audit engagement (including internal control attestation) is required; | ·
| | management and the independent auditors report to the Committee on all non-audit service projects and related fees;
|
| ·
| | all services and fees are reviewed annually; and
|
▪
| ·
| | the Committee Chair has been delegated authority to approve specific permissible non-audit service projects and fees to ensure timely handling of unexpected matters.
|
the independent auditor may not provide prohibited services; ▪
annual pre-approval is provided for employee benefit plan audits and special audits, as well as other attestation services; ▪
management and the independent auditors report to the Committee on all non-audit service projects and related fees; ▪
all services and fees are reviewed annually; and ▪
the Committee Chair has been delegated authority to approve specific permissible non-audit service projects and fees to ensure timely handling of unexpected matters. Examples of permissible non-audit services under the policy include: (i) ▪
merger/acquisition due diligence services; (ii) ▪
attest services; (iii) ▪
tax compliance, filings, and returns; and (iv) ▪
tax planning services, provided that such services are limited to projects having “known or accepted” outcomes. ECOLAB PROXY STATEMENT 2024 81
| | | ECOLAB - 2018 Proxy Statement
PROPOSAL 4 — STOCKHOLDER PROPOSAL REGARDING AN INDEPENDENT BOARD CHAIR POLICY | 65
| | | | | | | | The Board of Directors unanimously recommends that you vote AGAINST this stockholder proposal. | |
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm to audit our consolidated financial statements for the year ending December 31, 2018 and to perform other appropriate services. Representatives of PwC are expected to be present at our Annual Meeting of Stockholders. They 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.
PwC has provided professional services to the Company in 2017, the aggregate fees and expenses of which are reported at page 65.
Board of Directors’ Recommendation – The Board of Directors recommends that the stockholders vote FOR the ratification of the appointment of PwC as our independent registered public accounting firm for the year ending December 31, 2018. Under the laws of the State of Delaware, stockholder ratification of the appointment of our independent registered public accounting firm is not required. However, the Board deems it advisable to submit the appointment of PwC for stockholder consideration and ratification. If the appointment of PwC is not ratified, the Audit Committee will reconsider the matter, but will not be required to change its decision to appoint PwC as independent registered public accounting firm. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted FOR ratification of the appointment of PricewaterhouseCoopers LLP.
| | 66
| ECOLAB - 2018 Proxy Statement
| | |
PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF EXECUTIVES DISCLOSED IN THIS PROXY STATEMENT
PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF EXECUTIVES DISCLOSED IN THIS PROXY STATEMENT
Ecolab’s executive compensation program is intended to: (1) support our corporate vision and long-term financial objectives, (2) communicate the importance of business results, (3) retain and motivate executives important to our success and (4) reward executives for contributions at a level reflecting our performance. We believe that our compensation policies and procedures have met these objectives. They have contributed to the Company’s historically strong growth and returns, rewarded executives based on performance and are aligned with the long-term interests of our stockholders. See “Compensation Discussion and Analysis,” beginning at page 28.
The Company is presenting this proposal, which gives you as a stockholder the opportunity to endorse or not endorse our executive pay program through an advisory vote for or against the following resolution:
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the Company’s Proxy Statement for the 2018 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the Proxy Statement.”
The Company has presented this proposal at each Annual Meeting since 2010 and each year the proposal has received support from greater than 94% of the total shares cast on the proposal.
The Board of Directors encourages stockholders to endorse the compensation program for our named executive officers by voting FOR the above resolution. As discussed in the Compensation Discussion and Analysis contained in this Proxy Statement, we believe that the executive compensation for 2017 was reasonable and appropriate and was justified by the performance of the Company. Our compensation program is the result of a carefully considered approach, including input and advice from the Compensation Committee’s independent compensation consultant.
Because your vote is advisory, it will not be binding upon the Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements.
Board of Directors’ Recommendation – The Board of Directors recommends that you vote FOR approval of the compensation of Ecolab’s executives as described in the Compensation Discussion and Analysis and the compensation tables and otherwise in this Proxy Statement pursuant to the compensation disclosure rules of the SEC. Proxies solicited by our Board of Directors will be voted FOR approval of the proposal unless otherwise specified.
| | ECOLAB - 2018 Proxy Statement
| 67
| | |
PROPOSAL 4: STOCKHOLDER PROPOSAL REGARDING THE THRESHOLD TO CALL SPECIAL SHAREHOLDER MEETINGS
PROPOSAL 4: STOCKHOLDER PROPOSAL REGARDING THE THRESHOLD TO CALL SPECIAL STOCKHOLDER MEETINGS
Mr. John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, who owns no fewer than 100 shares of our Common Stock, has notified the Companyrequested that he intends to present the following resolutionproposal be included in this proxy statement and voted on at the Annual Meeting. The Company disclaims any responsibility for the accuracy or content of this proposal, and statement of support,which is presented in the text of which,form received from the proponent in accordance with rules of the Securities and Exchange Commission, is printed verbatim from its submission, with only minor formatting changes. SEC rules. After careful consideration, the Board of Directors unanimously recommends that you vote AGAINST the stockholder proposal set forth below.
Proposal 4 – Special Shareholder Meeting ImprovementRESOLVED, Shareowners ask our board— Independent Board Chairman
Shareholders request that the Board of Directors adopt an enduring policy, and amend the governing documents as necessary in order that 2 separate people hold the office of the Chairman and the office of the CEO as follows: Whenever possible, the Chairman of the Board shall be an Independent Director. The Board has the discretion to takeselect a Temporary Chairman of the steps necessary (unilaterally if possible)Board who is not an Independent Director to amend our bylaws and each appropriate governing document to give holdersserve while the Board is seeking an Independent Chairman of the Board on an accelerated basis This policy could be phased in the aggregate of 10% of our outstanding common stock the power to callwhen there is a special shareowner meeting. This proposal does not impact our board’s current power to call a special meeting.Scores of Fortune 500 companies allow a 10% of shares to call a special meeting compared to Ecolab’s higher requirement. Ecolab shareholders do not have the full right to call a special meeting that is available under Delaware law.
Special meetings allow shareholders to vote on important matters, such as electing new directors that can arise between annual meetings. leadership transition.
This proposal topic won 52% support at Boeing and 54% support at Baxter International. Boeing then adopted this proposal topic in June 2020. The roles of Chairman and CEO are fundamentally different and should be held by 2 directors, a CEO and a Chairman who is completely independent of the CEO and our company. This proposal won 45% shareholder support at the 2023 Ecolab annual meeting. This laws more than 70%-supportdouble the support it received previously. Meanwhile executive pay was rejected by 32% of the vote when a 5% rejection is often the norm at Edwards Lifescienceswell performing companies. And Mr. John Zillmer, chair of the executive pay committee was rejected by 38% of the vote. The 45% support for this proposal in 2023 and SunEdison in 2013.An enhanced abilitythe 32% rejection of executive pay were all the more noteworthy since the Board of Directors made a special appeal to shareholders to oppose this proposal and to approve executive pay.
According to the 2023 Ecolab proxy Jeffrey Ettinger, the Ecolab Lead Director, does not originate any information, schedules or agendas that are forwarded to other Ecolab directors. A lead director is thus no substitute for an independent board chairman. With the current CEO serving as Chair this means giving up a substantial check and balance safeguard that can only occur with an independent Board Chairman. A lead director cannot call a special meeting would giveshareholder meeting. A lead director can delegate many details of his lead director duties to others and then simply rubber-stamp it. The Board of Directors has not explained how shareholders greater standingcan be sure of what goes on in regard to have input in improvinglead director delegation. The Board of Directors failed to publish any comparison of the makeupduties of our boardan Ecolab Chairman compared to the duties of directors aftera lead director. 82ECOLAB PROXY STATEMENT 2024
One of the 2018 annual meeting. For instance, we did not have oversightprimary functions of our CEO by an independent chairman. And our CEO received as much as 9-timeschairman of the negative votes as other directors.Carl Casale, David MacLennan and Stephen Chazen had relatively short tenure and were marked as inside-related directors – thisBoard is notto manage the Board of Directors which is lacking at Ecolab since director John Zillmer, with 18 years on the ECL Board, was rejected by a good trend for board refreshment at Ecolab. Leslie Stuart Biller had 20 years long tenure. Long-tenure can detract from38% vote
The increased complexities of companies of more than $45 Billion in market capitalization, like Ecolab, demand that 2 persons fill the independence of a director no matter how well qualified. Independence is a high valuable attribute2 most important jobs in a director. Inside-related status and long-tenure are the opposite of this high valuable attribute.To compound matters the 3 relatively new directors, who were inside-related, had an oversized influence on our audit committee – holding 50%-control. They also had 40%-control of our nomination committee. Serious consideration should be given to keeping inside-related directors off such important board committees.
company. Please vote to improve accountability to shareholders:Special Shareholder Meeting Improvement –yes:
Independent Board Chairman — Proposal 4RESPONSE
RECOMMENDATION OF THE BOARD OF DIRECTORS
| | | | | After careful consideration, our Board of Directors unanimously recommends that you vote AGAINST this proposal because of our commitment to independent board leadership (including a robust Lead Independent Director role) and the Board’s belief that the Company and our stockholders are best served by a flexible policy that allows the Board to determine the leadership structure that best meets the needs of the Company and its stockholders at any given time. | |
OUR COMMITMENT TO INDEPENDENT BOARD LEADERSHIP The Board of Directors recommendsstrongly believes that you vote AGAINST this proposalindependent board oversight is vital. As a result, under our corporate governance framework, our Lead Director and independent directors have strong oversight of management and the Company’s governance and effectively oversee management and key issues facing our Company. Robust Lead Director Role. Our Corporate Governance Principles require an independent Lead Director at any time when the Chairman also holds the office of Chief Executive Officer (“CEO”) or is otherwise not independent. Further, our Corporate Governance Principles provide that, as a guideline, the Lead Director role should rotate every four to six years to continuously bring new independent perspectives to that role. Our Lead Director is elected annually by a majority of the independent directors after recommendation of the fully independent Governance Committee. The Lead Director has a clearly defined and robust role in managing the Board. | | | Robust Responsibilities and Powers of the Lead Director ▪
Calling meetings of the independent directors. ▪
Presiding over meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors, which occur at every regularly scheduled meeting of the Board. ▪
Acting as a liaison between the Chairman and the independent directors. ▪
Reviewing and approving meeting schedules to assure there is sufficient time for discussion of agenda items. ▪
Reviewing and approving information sent to the directors. ▪
Reviewing and approving meeting agendas and participants at meetings of the Board. ▪
Engaging with stockholders in appropriate circumstances. | | |
Our Corporate Governance Principles provide that the Lead Director should rotate every four to six years, which promotes the Lead Director’s independence. In accordance with our Corporate Governance Principles, the independent directors appointed David MacLennan as Lead Director in May 2023. Independent Director Oversight. Currently, all of our directors, with the exception of Mr. Beck, are independent in accordance with the listing standards of the New York Stock Exchange, the rules and regulations of the SEC, applicable law, and the Board’s independence policy. In addition, each of the Audit, Compensation & Human Capital Management and Governance Committees is comprised solely of, and chaired by, independent directors. Additionally, each of the Finance and Safety, Health & Environment Committees is comprised of a majority of, and chaired by, independent directors. As a result, independent directors are responsible for overseeing key matters, including, among other items, the integrity of Ecolab’s financial statements, the evaluation of the Board’s and the Committees’ performance, Ecolab’s executive compensation, the nomination of directors, the composition and leadership of each Board committee, and the selection of the Lead Director. ECOLAB PROXY STATEMENT 2024 83
This robust independent oversight is supported by strong corporate governance practices. | | | Strong Corporate Governance Practices Further Independent Oversight ▪
Individual directors and Board committees have direct access to Ecolab’s senior management. ▪
The Board and individual committees may retain independent advisors and consultants, including the Company’s public accounting firm, compensation consultant, and others. ▪
Our Lead Director chairs executive sessions of independent directors without the CEO present, which occur at every regularly scheduled meeting of the Board. ▪
The Governance Committee leads a review of the Board’s performance and effectiveness each year as well as evaluates the CEO’s performance with feedback from all of the independent directors. ▪
The Governance Committee reviews the structure of the Board annually, including whether the current model of having a combined Chairman and CEO role is in the best interests of the Company and stockholders. ▪
The Governance Committee selects all independent directors, committee chairs and committee members, and the Chairman does not actively participate in these selections. ▪
The Compensation & Human Capital Management Committee reviews and approves the corporate goals and objectives relevant to CEO compensation and sets the CEO’s compensation based on the evaluation of CEO performance in light of those goals and objectives. ▪
Directors are elected annually, offering stockholders an opportunity to provide input on director performance. | | |
FLEXIBILITY IN BOARD LEADERSHIP STRUCTURE IS MORE SUITABLE THAN THE PROPOSAL’S PRESCRIPTIVE APPROACH The Board also strongly believes that stockholders are best served by not having a fixed policy on whether the offices of Chairman and CEO are to be held by one person or not. This allows for the following reasons:The Company’s By-Laws include aBoard to re-evaluate the needs of the Company from time to time and make determinations regarding Board leadership based upon then-existing conditions, including business needs, stockholder rightpreferences and feedback, and individual director skills and experiences. This proposal would remove this flexibility and narrow the governance arrangements that the Board may consider, which could in certain instances be contrary to call special meetings that strikes the appropriate balance between enhancing stockholder rights and adequately protecting the best interests of allour stockholders.
In recent years, the roles of our stockholders. | | 68
| ECOLAB - 2018 Proxy Statement
| | |
PROPOSAL 4: STOCKHOLDER PROPOSAL REGARDING THE THRESHOLD TO CALL SPECIAL SHAREHOLDER MEETINGS
Under our By-Laws, stockholders holding 25%Chairman and CEO were combined, and then split when Mr. Beck was first appointed CEO. The Board’s decision to separate the roles of Chairman and CEO at that time enabled Mr. Beck to assume leadership of the voting powerCompany while the Chairman and former CEO, Mr. Douglas Baker, managed the duties of our outstanding capital stock may call a special stockholder meeting. Chairman of the Board.
In February 2010,connection with Mr. Baker’s retirement from Ecolab in May 2022, the Board amended our By-Lawsundertook extensive deliberations regarding the Board’s leadership structure at numerous meetings, including the merits of separating or combining the Chairman and CEO roles and whether the Chairman role should be held by an independent director. The Board gave thorough consideration to establish the current 25% ownership threshold after soliciting input from some of the Company’s larger stockholders.In its consideration of this proposal, the Board evaluated a number of factors, including the interestssize and complexity of our stockholders to call a special meeting,Ecolab’s business, the resources required to convene a special meeting,Company’s performance and strategy, the existing opportunities stockholders have to engage withcomposition of the Board, Ecolab’s corporate governance practices, market practice, and management between annual meetings, and the characteristics and composition of ourEcolab’s stockholder base including that one stockholder currently holds greater than 10% of our stock and two other stockholders each hold greater than 5% of our stock.investor views and engaged third party consultants to provide additional insight and enhance the Board’s deliberations. The Board also considered that approximately 82% of Delaware-incorporated S&P 500 companies either provide stockholders no right to call a special meeting or have an ownership threshold of 25% or more, whereas only approximately 5% of Delaware-incorporated S&P 500 companies have a 10% ownership threshold. Additionally,reflected upon the Board considered that, at our 2010 Annual Meeting, a similar stockholder proposal requesting that our special meeting by-law be amended to a 10% threshold was not approved by stockholders. The Board continues to believe that the current 25% ownership threshold provides an appropriate balance between ensuring the Board’s accountability to stockholders and enabling the Board and management to operate the Company in an effective manner.
Convening a meeting of stockholders imposes significant administrative and operational costs. The Company must prepare required disclosures, print and distribute materials, solicit proxies and tabulate votes. A significant amount of attentionCompany’s strong, independent oversight function exercised by the Board, management and employees is required to prepare for special meetings, distracting them from their primary focus of maximizing long-term financial returns and operating the Company’s business in the best interests of stockholders. Because special meetings require a considerable diversion of resources, they should be limited to circumstances where a substantial number of stockholders believe a matter is sufficiently urgent or extraordinary that it must be addressed between annual meetings. Unlike a 10% ownership threshold, the current 25% threshold prevents one or two stockholders from calling a special meeting and imposing these costs on all stockholders even when most stockholders do not want a special meeting. Accordingly, the current 25% ownership threshold is a more appropriate standard to ensure that special meetings are held only for matters important to an appropriately large group of stockholders.
We have a strong corporate governance structure and record of accountability.
Our corporate governance structure reflects our ongoing commitment to effective governance practices and a willingness to be responsive and accountable to our stockholders. In addition to our special meeting by-law, we have implemented numerous other corporate governance measures to ensure the Board remains accountable to stockholders and to provide our stockholders with a meaningful voice. For example:
| ·
| | Annual Election of Directors - Each of our directors serves a one-year term and stands for re-election at each annual meeting.
|
| ·
| | Majority Voting - Directors must be elected by a majority vote in an uncontested election and a director who fails to receive the required number of votes for re-election must tender his or her written resignation for consideration by the Board.
|
| ·
| | Each Non-Executive Member of our Board Is Independent - Each year, our Governance Committee conducts a thorough review of transactions and relationships to assist the Board in determining whether our directors are independent in accordance with the listing standards of the New York Stock Exchange, the rules and regulations of the Securities and Exchange Commission, applicable law and the Board’s independence policy, which can be found on our website at www.investor.ecolab.com/corporate-governance. As our Board has determined, all of our directors, with the exception of our Chief Executive Officer, are independent. The proposal’s assertion that directors Carl Casale, David MacLennan and Stephen Chazen are “inside-related” and not independent is inaccurate and misleading.
|
| ·
| | Independent Lead Director - We have an independent Lead Director with substantial and clearly delineated authority. Our Lead Director provides strong independent leadership of our Board by, among other things, presiding at executive sessions in connection with every regularly scheduled Board meeting.
|
| | ECOLAB - 2018 Proxy Statement
| 69
| | |
PROPOSAL 4: STOCKHOLDER PROPOSAL REGARDING THE THRESHOLD TO CALL SPECIAL SHAREHOLDER MEETINGS
| ·
| | No Supermajority Voting - In 2012, in response to a non-binding stockholder proposal at the 2011 Annual Meeting, the Board recommended and stockholders approved amendments to the Company’s Certificate of Incorporation to eliminate the supermajority voting provisions.
|
| ·
| | No Stockholder Rights Plan - We do not have a stockholder rights plan.
|
| ·
| | Stockholder Right to Act by Written Consent - Stockholders have the right to act by written consent.
|
| ·
| | Proxy Access - In 2015, the Board amended our By-laws to implement proxy access. Our proxy access by-law permits a stockholder or a group of up to 20 stockholders owning 3% or more of the Company’s outstanding shares continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the stockholder(s) and the nominee(s) satisfy the requirements specified in our By-Laws. Our proxy access by-law limits the number of stockholders that may aggregate their shares to satisfy the 3% test to 20 stockholders. For purposes of the 20-stockholder limit, certain related funds are counted as one stockholder.
|
| ·
| | Stockholder Input on Nominations Outside of Proxy Access — In addition to proxy access, our stockholders have the ability to recommend director candidates to the Board’s Governance Committee, which considers such recommendations in the same manner as recommendations received from other sources (as described further under “Stockholder Access” on page 7). Stockholders also have the option to directly nominate director candidates and solicit proxies for the election of those candidates in accordance with our By-Laws and the federal securities laws.
|
| ·
| | Stockholder Engagement — Stockholders can communicate directly with the Board and/or individual directors, and we regularly engage with our investors to solicit views on important issues such as executive compensation and corporate governance matters.
|
The Board will continue to evaluate corporate governance measures and changes to our governance policies that it believes will serve the best interests of Ecolab and its stockholders.
The Board continues to believe that the current 25% ownership threshold provides an appropriate balance between ensuring the Board’s accountability to stockholders and enabling the Board and management to operate the Company in an effective manner. In light of the Company’s carefully considered special meeting by-law, as well as the Board’s continuing commitment to ensuring effective corporate governance,independent leadership provided by the independent Lead Director.
After considering these factors and evaluating the leadership, qualifications, and performance of Mr. Beck in his roles as CEO and a director, the Board believesdetermined that this proposal is notit was again in the best interests of the Company or its stockholders.Boardto combine the roles of Directors’ Recommendation — Chairman and CEO under Mr. Beck, while preserving the important role of the Lead Director, for the following reasons:
| | | ▪
the benefits to the decision-making process with a leader who is both Chairman and Chief Executive Officer; ▪
the significant operating experience and qualifications of Mr. Beck, including 17 years at Ecolab where he held leadership roles within the Industrial, International and Institutional businesses; ▪
the importance of deep Ecolab knowledge in exercising business judgment in leading the Board; ▪
the size and complexity of our business; ▪
the significant business experience and tenure of our independent directors; and ▪
the qualifications and role of our Lead Director. | | |
84ECOLAB PROXY STATEMENT 2024
The Board re-evaluates its leadership structure each year and considers whether it remains appropriate. As set out under “Corporate Governance — Board Leadership Structure” on page 23, the Board continues to believe that at this time, combining our CEO and Chairman offices, along with an independent Lead Director, is the most appropriate leadership structure for the Company and best serves the interests of Directors recommendsour stockholders for the reasons stated above. Moreover, the Board believes that you vote AGAINSTthe appointment of Mr. Darrell Brown as the Chief Operating Officer of the Company in October 2022 further strengthens Mr. Beck’s ability to serve as CEO and Chairman, as this proposal. Proxies solicited byappointment provides Mr. Beck additional time to address his duties as Chairman and CEO of the Company. STOCKHOLDERS REJECTED THIS PROPOSAL IN RECENT YEARS The proponent submitted similar proposals in 2014, 2015, 2019 and 2023. Our stockholders rejected each of these proposals. In 2023, we reached out to stockholders representing over 50% of our outstanding shares and many of our top stockholders supported the Board’s decision to maintain flexibility concerning the structure of the Board, given the Board’s strong lead director role and independence. In view of our highly independent board structure, strong corporate governance practices and proven track record of success, the Board believes that this stockholder proposal’s rigid approach to our Board of Directors will be voted AGAINST the stockholder proposal unless otherwise specified.Approval of the non-binding stockholder proposal would serve as a recommendation to the Board of Directors to amend our special meeting by-law asleadership structure is not necessary to reflect the terms set forthand not in the proposal. best interest of our stockholders.
BOARD OF DIRECTORS’ RECOMMENDATION | | | | | For the reasons stated above, the Board of Directors unanimously recommends that you vote AGAINST this stockholder proposal. Unless a contrary choice is specified, proxies solicited by our Board of Directors will be voted AGAINST the stockholder proposal. | |
As with all proposals, if the stockholder proposal is not properly presented by the proponent at the Annual Meeting, itthe Company reserves the right not to hold a vote on this proposal at the Annual Meeting. ECOLAB PROXY STATEMENT 2024 85
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING | | | | | | | | | DATE AND TIME | | | | | | | VIRTUAL MEETING | | | | | | | WHO MAY VOTE | | | | | | | | | | | | Thursday, May 2, 2024
12:30 p.m. Central Time | | | | Visit www.virtualshareholdermeeting.com/ECL2024 | | | | Stockholders as of the close of business on the record date, March 5, 2024 | | | |
VOTING PROCEDURES WHO IS ENTITLED TO VOTE AT THE GENERAL MEETING? As of March 5, 2024, the record date for the meeting, there were 285,912,065 shares of Common Stock outstanding. Each share of Common Stock is entitled to one vote. Common Stock held by Ecolab in our treasury is not counted in shares outstanding and will not be voted. All valid proxies received by the deadlines set forth below will be voted upon.according to the instructions thereon. For holders of Common Stock, if you return a valid proxy but do not provide specific instructions, shares represented by the proxy will be voted in accordance with the Board of Directors’ recommendations. HOW DO I REGISTER MY VOTE? | | | | | | | | | ONLINE — PRIOR TO
THE ANNUAL MEETING | | | | | | | ONLINE — DURING
THE ANNUAL MEETING | | | | | | | TELEPHONE | | | | | | | MAIL | | | | 70
| ECOLAB - 2018
| | | | You may vote by proxy by visiting www.proxyvote.com and entering the 16-digit control number found on your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card. The availability of online voting may depend on the voting procedures of the organization that holds your shares. | | | | You may vote online during the Annual Meeting by visiting www.virtualshareholdermeeting.com/ECL2024, entering the 16-digit control number found on your Notice of Internet Availability of Proxy Materials, voting instruction form, or proxy card, and following the on-screen instructions. The availability of online voting may depend on the voting procedures of the organization that holds your shares. The meeting webcast will begin promptly at 12:30 p.m. Central Time. Online access to the webcast will open approximately 15 minutes prior to the start of the Annual Meeting to allow time for you to log in and test your system. If you experience technical difficulties during the check-in process or during the meeting please call the number listed on the virtual stockholder meeting landing page for assistance. | | | | Call 1-800-690-6903 using any touch-tone telephone. The availability of telephone voting may depend on the voting procedures of the organization that holds your shares. | | | | Mark, sign, and date your proxy card or voting instruction form and return it in the postage-paid envelope. | | | | | | | | | | | | | | | MOBILE DEVICE — PRIOR TO THE ANNUAL MEETING | | | | | | | | | | Scan the QR code using your mobile device to go to www.proxyvote.com. | | | | | | |
86ECOLAB PROXY STATEMENT 2024
HOW DO I VOTE MY PROXY? You may vote in person by ballot at our Annual Meeting or by submitting a valid proxy. We recommend you submit your proxy even if you plan to attend the Annual Meeting. If you attend the Annual Meeting, you may vote by ballot, thereby canceling any proxy previously submitted. Voting instructions are included on your proxy card. If you properly complete your proxy and submit it to us in time to be tabulated, one of the individuals named as your proxy will vote your Common Stock as you have directed. You may vote for or against each proposal, or you may abstain from voting on a proposal. With respect to the election of directors, you may vote for or against each nominee, or you may abstain from voting on the election of one or more nominees. CAN I REVOKE MY PROXY? You may revoke your proxy at any time before it is voted by: | | | | | Timely delivery of a valid, later-dated proxy, including a proxy given by telephone or Internet | | | | | | | Timely delivery of written notice that you have revoked your proxy to: Ecolab Inc.
Attention: Corporate Secretary
1 Ecolab Place
St. Paul, MN 55102 | | | | | | | Attending our Annual Meeting and voting electronically by entering the 16-digit control number found on your proxy card, voting instruction form, or Notice, as applicable | |
QUORUM, ABSTENTIONS, AND BROKER NON-VOTES WHAT IS A QUORUM? A quorum of stockholders is necessary to hold a valid meeting. The presence in person or by proxy at the meeting of holders of a majority of the outstanding shares of Common Stock entitled to vote at the meeting is a quorum. Abstentions and broker non-votes count as present for establishing a quorum. Common Stock held by Ecolab in our treasury does not count toward a quorum. WHAT DOES AN ABSTENTION MEAN? Shares voted “ABSTAIN” are not counted as votes cast and will have no effect on the proposals to be voted on at the Annual Meeting. WHAT ARE BROKER NON-VOTES? Broker non-votes occur on a proposal when the beneficial owner of Common Stock does not submit voting instructions to a broker or bank. Under New York Stock Exchange rules, brokers, banks, and other nominees generally will have discretionary authority to vote shares in absence of instructions on “routine” matters and will not have discretion to vote shares on non-routine matters. Broker non-votes, if any, are not counted as votes cast for any purpose in determining whether a matter has been approved. In order for their views to be represented at the meeting, we strongly urge all beneficial owners to provide specific voting instructions on all matters to be considered at the meeting to their record-holding brokers. ECOLAB PROXY STATEMENT 2024 87
VOTE TABULATION HOW ARE VOTES COUNTED? The vote on each proposal will be tabulated as follows: | | PROPOSAL | | | | BOARD
RECOMMENDATION | | | | VOTING REQUIREMENT | | | | 1 | | | Election of Directors | | | | | | | FOR each
director
nominee | | | | Each nominee will be elected to the Board if they receive a majority of the votes cast. Votes cast with respect to a nominee include votes FOR or AGAINST a nominee and exclude abstentions and broker non-votes. If an uncontested nominee for director does not receive an affirmative majority of FOR votes, he or she will be required to promptly offer his or her resignation to the Board’s independent Governance Committee. That committee will then make a recommendation to the Board as to whether the offered resignation should be accepted or rejected, or whether other action should be taken. The Board will publicly announce its decision regarding the offered resignation and the rationale behind it within 90 days after the election results have been certified. Any director who has so offered his or her resignation will not be permitted to vote on or participate in the recommendation of the Governance Committee or the Board’s decision with respect to his or her resignation. | | | | 2 | | | Advisory Vote to Approve the Compensation of Our Named Executive Officers Disclosed in this Proxy Statement | | | | | | | FOR | | | | The affirmative vote of a majority of the total votes cast by holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote will constitute approval of the compensation of executives disclosed in this Proxy Statement. | | | | 3 | | | Ratification of Appointment of Independent Registered Public Accounting Firm | | | | | | | FOR | | | | The affirmative vote of a majority of the total votes cast by holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote will constitute ratification of the appointment of PricewaterhouseCoopers LLP. | | | | 4 | | | Stockholder Proposal Regarding an Independent Board Chair Policy | | | | | | | AGAINST | | | | The affirmative vote of a majority of the total votes cast by holders of shares present in person or represented by proxy at the Annual Meeting and entitled to vote will constitute approval of the proposal, if properly presented at the meeting. | |
WHAT IS DISCRETIONARY VOTING? OTHER MATTERS
Proxy Solicitation Costs
We will bearare not currently aware of any other business to be acted upon at our Annual Meeting. If, however, other matters are properly brought before the costAnnual Meeting, or any adjournment or postponement of the preparation and solicitationAnnual Meeting, your proxy includes discretionary authority on the part of proxies,the individuals appointed to vote your Common Stock or act on those matters according to their best judgment, including to adjourn the charges and expensesAnnual Meeting. WHEN CAN A MEETING ADJOURNMENT OCCUR? Adjournment of brokerage firms, banks or other nominees for forwarding proxy material to beneficial owners. In addition to solicitation by mail, proxiesour Annual Meeting may be solicitedmade for the purpose of, among other things, soliciting additional proxies. Any adjournment may be made from time to time by telephone, the Internet or personally. We have retained Georgeson Inc., 480 Washington Blvd., 26th Floor, Jersey City, NJ 07310, to aid in the solicitation of proxies for a fee of $12,000 plus expenses. Proxies may also be solicited by certain directors, officers and employeesapproval of the Company without extra compensation.Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)holders of Common Stock representing a majority of the Exchange Act requiresvotes present in person or by proxy at the Company’s executive officers and directors, and persons who own moreAnnual Meeting, whether or not a quorum exists, without further notice other than ten percent of a registered classby an announcement made at the Annual Meeting. We do not currently intend to seek an adjournment of the Company’s equity securities, to file with the SEC reports on ownership of Company securities and changes in reported ownership. As a practical matter, Company personnel assist executive officers and directors by monitoring transactions and completing and filing Section 16 reports (SEC Forms 3, 4 and 5) on their behalf based upon company records and information provided to us.
Based solely on a review of Section 16 reports and on written representations from reporting persons, the Company believes that during the fiscal year ended December 31, 2017 the Company’s executive officers, directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a).
Householding Information
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy soliciting material. This means that you and other holders of our Common Stock in your household may not receive separate copies of the Company’s Proxy Statement or Annual Report. We will promptly deliver an additional copy of either document to any stockholder upon request to: Corporate Secretary, Ecolab Inc., 1 Ecolab Place, Saint Paul, MN 55102; telephone (651) 250-2981; or e-mail investor.info@ecolab.com. If you desire to reduce the number of copies mailed to your household, please contact your bank or broker.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be held on May 3, 2018
The Notice of 2018 Annual Meeting, Proxy Statement and Annual Report to Stockholders of Ecolab Inc. is available at www.proxyvote.com.
| | ECOLAB - 2018 Proxy Statement
| 71
| | |
88ECOLAB PROXY STATEMENT 2024
Voting by Plan Participants
VOTING BY PLAN PARTICIPANTS HOW DO PLAN PARTICIPANTS VOTE THEIR SHARES? Generally, you will receive only one notice, proxy card or voting instruction form covering all the shares you hold: | ·
| | in the Dividend Reinvestment Plan sponsored by Computershare Trust Company, N.A., if any; and
|
▪
| ·
| | if you participate in one or more of the following Plans:
|
in your own name; | -
| | the Ecolab Savings Plan and ESOP*; or
|
| -
| | the Ecolab Savings Plan and ESOP for Traditional Benefit Employees*; or
|
▪
| -
| | the Ecolab Puerto Rico Savings Plan*; or
|
in the Dividend Reinvestment Plan sponsored by Computershare Trust Company, N.A., if any; and | -
| | the Ecolab Stock Purchase Plan administered by Computershare Trust Company, N.A.; or
|
| -
| | the Ecolab Canada Share Purchase Plan administered by Computershare Trust Company of Canada
|
▪
if you participate in one or more of the following Plans: ▪
the Ecolab Savings Plan and ESOP*; or ▪
the Ecolab Puerto Rico Savings Plan*; or ▪
the Ecolab Stock Purchase Plan administered by Computershare Trust Company, N.A.; or ▪
the Ecolab Canada Share Purchase Plan administered by Computershare Trust Company of Canada. *
If you participate in the Ecolab Savings Plan and ESOP the Ecolab Savings Plan and ESOP for Traditional Benefit Employees or the Ecolab Puerto Rico Savings Plan, you are entitled to direct the respective plan trustee to vote (or not to vote) the equivalent number of shares of Common Stock credited to your Plan account. Your proxy card will serve as a voting instruction to the Trustee and if your instructions are timely received, the Trustee will follow your voting instructions. If you do not timely submit your voting instructions, the Trustee will vote your Plan shares in the same proportion as to each respective proposal as the shares for which voting instructions have been received from other Plan participants. To allow sufficient time for voting of your shares by the Trustee, your voting instructions should be received by May 1, 2017April 29, 2024 to ensure tabulation. If you hold Ecolab shares through any other Ecolab plans, you will receive voting instructions from that plan’s administrator. LIST OF REGISTERED STOCKHOLDERS IS THERE A LIST OF REGISTERED VOTERS AVAILABLE FOR INSPECTION? A list of the registered stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder for any purpose germane to the meeting ten days prior to the meeting during normal business hours: | | AT OUR OFFICE | | | | BY CONTACTING THE CORPORATE SECRETARY BY TELEPHONE OR EMAIL | | | | | | | | Ecolab Inc.
1 Ecolab Place
St. Paul, MN 55102 | | | | | | | | (651) 250-2054 | | | | | | | | ECLCorporateSecretary@ecolab.com | |
OTHER INFORMATION HOUSEHOLDING INFORMATION Some banks, brokers, and other nominee record holders may be participating in the practice of “householding” proxy soliciting material. This means that you and other holders of our Common Stock in your household may not receive separate copies of the Company’s Proxy Statement, Notice of Availability of Proxy Materials, or Annual Report. We will promptly deliver an additional copy of these documents to any stockholder upon request to: | | BY CONTACTING THE CORPORATE SECRETARY BY MAIL, TELEPHONE, OR EMAIL | | | |
| | | | Ecolab Inc.
Attention: Corporate Secretary
1 Ecolab Place
St. Paul, MN 55102 | | | | | | | | (651) 250-2054 | | | | | | | | ECLCorporateSecretary@ecolab.com | |
If you desire to reduce the number of copies mailed to your household, please contact your bank or broker.
ECOLAB PROXY STATEMENT 2024 89
PROXY SOLICITATION COSTS This proxy is solicited by our Board of Directors. We will bear the cost of the preparation and solicitation of proxies, including the charges and expenses of brokerage firms, banks, or other nominees for forwarding proxy material to beneficial owners. In addition to solicitation by mail, proxies may be solicited by telephone, the Internet or personally. We have retained Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022, to aid in the solicitation of proxies for a fee of $20,000 plus expenses. Proxies may also be solicited by certain directors, officers, and employees of the Company without extra compensation. 2025 STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATION | | Stockholder Proposals for Inclusion in the Proxy Statement for the 2025 Annual Meeting | |
If a stockholder wishes to have a proposal formally considered at the 2025 Annual Meeting of Stockholders and included in the Company’s Proxy Statement for that meeting, the proposal must be received by the Corporate Secretary at our headquarters no later than November 18, 2024, and must comply with the other requirements of Rule 14a-8 under the Securities Exchange Act of 1934. The submission of a stockholder proposal does not guarantee that it will be included in the proxy statement. | | Director Nominations for Inclusion in the Proxy Statement for the 2025 Annual Meeting | |
The Board has implemented a proxy access provision in our By-Laws, which allows a stockholder or group of up to 20 stockholders owning in aggregate 3% or more of our outstanding Common Stock continuously for at least three years to nominate and include in our proxy materials director nominees constituting up to 20% of the number of directors in office or two nominees, whichever is greater, provided the stockholder(s) and nominee(s) satisfy the requirements in the By-Laws. If a stockholder or group of stockholders wishes to nominate one or more director candidates to be included in the Company’s Proxy Statement for the 2025 Annual Meeting of Stockholders pursuant to these proxy access provisions in our By-Laws, proper written notice of any such nomination must be received by the Corporate Secretary at our headquarters no earlier than the close of business on October 19, 2024, and no later than the close of business on November 18, 2024, and the nomination must otherwise comply with our By-Laws. | | Other Proposals for Director Nominations for Presentation at the 2025 Annual Meeting | |
Under our By-Laws, if a stockholder wishes to present other business or nominate a director candidate at the 2025 Annual Meeting of Stockholders without seeking to have the matter included in the proxy materials, proper written notice (including information required under Rule 14a-19) of any such business or nomination must be received by the Corporate Secretary at our headquarters no earlier than the close of business on December 3, 2024, and no later than the close of business on January 2, 2025. If, however, the 2025 Annual Meeting is not within 30 days before or after the anniversary of this year’s Annual Meeting, such notice must be received by the Corporate Secretary at our headquarters no later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or public disclosure of that date was made, whichever occurs first. If a stockholder does not meet these deadlines or does not satisfy the requirements of Rule 14a-4 of the Exchange Act, the persons named as proxies will be allowed to use their discretionary voting authority when and if the matter is raised at the Annual Meeting. All notices of proposals or nominations, as applicable, must be addressed to the Corporate Secretary of Ecolab: | | BY MAIL | | | | BY EMAIL | | | | | | | | Ecolab Inc.
Attention: Corporate Secretary
1 Ecolab Place
St. Paul, MN 55102 | | | | | | | | generalcounsel@ecolab.com | |
Our Corporate Governance Principles provide that, with respect to director candidates nominated by stockholders to be included on a universal proxy card (SEC Rule 14a-19), the Chairman of the Company’s stockholders’ meeting or the Board will determine the nominee’s eligibility for inclusion on the universal proxy card based on the nomination satisfying the requirements of Rule 14a-19, applicable law and the applicable provisions in the Company’s By-laws. 90ECOLAB PROXY STATEMENT 2024
ANNUAL REPORT TO STOCKHOLDERS The Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (excluding the exhibits thereto) will be made available to stockholders at the same time as this Proxy Statement. If any person who was a beneficial owner of the common stock of the Company on March 5, 2024, desires a complete copy of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, including the exhibits thereto, they will be provided with such materials without charge upon written request. | | BY MAIL | | | | ONLINE | | | | | | | | Ecolab Inc.
Attention: Corporate Secretary
1 Ecolab Place
St. Paul, MN 55102 The request should identify the requesting person as a beneficial owner of the Company’s stock as of March 5, 2024. | | | | | | | | The Company’s Form 10-K, including the exhibits thereto, is also available through the SEC’s website at: www.sec.gov | |
VOLUNTARY ELECTRONIC RECEIPT OF FUTURE PROXY MATERIALS | | Ecolab is pleased to deliver proxy materials electronically via the internet. Electronic delivery allows Ecolab to provide you with the information you need for the annual meeting, while reducing environmental impacts and costs. | | | As a company with global manufacturing operations, we work tirelessly to minimize our total carbon footprint. Climate change must be managed with the urgency it demands, and we are committed to leading the way while supporting others who are doing their part. As we focus on building a positive future, that means turning net zero commitments into results. | | | | WE ENCOURAGE OUR SHAREHOLDERS
TO ENROLL IN E-DELIVERY | | | | | | | | | | | | Online at
www.proxyvote.com | | | | Scan the
QR code | | | | |
| | YOUR ADOPTION OF ELECTRONIC DELIVERY OF PROXY MATERIALS WILL HELP BRING US CLOSER TO OUR GOALS TO ELIMINATE APPROXIMATELY 214,700 SETS OF PROXY MATERIALS AND TO REDUCE THE IMPACT ON THE ENVIRONMENT BY: | | | | | | | using approximately 408 fewer tons of wood, or 2,450 fewer trees (38 acres of forest) | | | | saving approximately 2.18 million gallons of water, or the equivalent of filling approximately 99 swimming pools | | | | | | | | | | using approximately 2.6 million fewer BTUs, or the equivalent of the amount of energy used by 3,100 residential refrigerators for one full year | | | | eliminating approximately 120,000 pounds of solid waste | | | | | | | | | | using approximately 1.84 million fewer pounds of greenhouse gases, including CO2, or the equivalent of 167 automobiles running for one year | | | | reducing hazardous air pollutants by approximately 163 pounds | | | | |
Environmental impact estimates were calculated using the Environmental Paper Network Paper Calculator. For more information visit www.papercalculator.org. ECOLAB PROXY STATEMENT 2024 91
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. In particular, statements that are not historical facts, including but not limited to, statements about our anticipated financial results, capital development and growth, as well as about the development of our products, markets, and workforce, are forward-looking statements. These forward-looking statements are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project” or similar expressions, whether in the negative or affirmative. Forward-looking statements are based on our current plans, expectations, and assumptions and are not guarantees of future performance. Information about factors that could cause actual results to differ materially from those in the forward-looking statements can be in Ecolab’s Annual Report on Form 10-K, Forms 10-Q, and other filings with the U.S. Securities and Exchange Commission. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. Forward-looking and other statements in this document may also address our sustainability initiatives, goals, targets and progress, and the inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future and performance against our goals and targets may differ from such forward-looking statements in such event. WEBSITE REFERENCES Website references included throughout this Proxy Statement are provided for convenience. The content on the referenced websites is not incorporated herein and is not part of this Proxy Statement. OTHER MATTERS The Board of Directors is not aware of any matters to be presented at the Annual Meeting other than those set forth in this Proxy Statement. If any other business is properly brought before the Annual Meeting or any postponement or adjournment thereof, it is the intention of the proxy holders to vote on such business in accordance with their judgment. | | | | | By Order of the Board of Directors, | | | | 
Lanesha T. Minnix
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY | | | | Michael C. McCormick
| | | Executive Vice President, General Counsel
and Secretary
| | | | March 19, 201818, 2024 | |
92ECOLAB PROXY STATEMENT 2024
| | 72
| ECOLAB - 2018 Proxy Statement
| | |
![[MISSING IMAGE: px_24ecolabproxy1pg01-bw.jpg]](/files/DEF 14A/0001104659-24-035047/px_24ecolabproxy1pg01-bw.jpg) ECOLAB INC. CORPORATE SECRETARY 1 ECOLAB PLACE ST. PAUL, MN 55102-2739 SCAN TO VIEW MATERIALS & VOTE As a stockholder of Ecolab Inc., you have the option of voting the shares electronically through the Internet or on the telephone or by mail. Votes submitted electronically over the Internet or by telephone must be received by 11:59 P.M. Eastern Time on May 1, 2024 for shares held directly and by 11:59 P.M. Eastern Time on April 29, 2024 for shares held in a Plan. VOTE BY INTERNET Before the Annual Meeting - Go to www.proxyvote.com or scan the QR Barcode above. Have the 16-digit control number that is printed in the box marked by the arrow XXXX XXXX XXXX XXXX available and follow prompts to vote the shares. DURING THE ECOLAB ANNUAL MEETINGThe Ecolab Global Headquarters - Go to www.virtualshareholdermeeting.com/ECL2024. You may attend the meeting via the Internet, submit questions and vote during the meeting when the polls are located at 1 Ecolab Placeopen. Have the 16-digit control number available that is printed in downtown Saint Paul, adjacentthe box marked by the arrow XXXX XXXX XXXX XXXX and follow the prompts to register for access to the Landmark Center. There are numerous paid rampsvirtual meeting and parking meters within easy walking distance. The closest parking ramps are RiverCentre, Lawson Commonsto vote the shares. VOTE BY PHONE Call 1-800-690-6903 using any touch-tone telephone to transmit your voting instructions. Have your proxy card in hand when you call and Kellogg Street Ramp.
| | Global Headquarters
1 Ecolab Place, St. Paul, MN 55102
www.ecolab.com 1 800 2 ECOLAB
| 
|
 ®
ECOLAB INC.
CORPORATE SECRETARY
1 ECOLAB PLACE
SAINT PAUL, MN 55102-2739
|
VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above.
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form.
| | ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
| | VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. 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:
| E37961-P01436
| KEEP THIS PORTION FOR YOUR RECORDS
| | | DETACH AND RETURN THIS PORTION ONLY
|
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. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS V35128-P01793 DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | ECOLAB INC.
| | | | 
| | | The Board of Directors recommends you vote FOR each of the nominees listed in proposal 1:
| | | 1.
| Election of Directors.
| | | | | | | | | | Nominees:
| For
| Against
| Abstain
| | | | | | | | | | 1a.
| Douglas M. Baker, Jr.
| ☐
| ☐
| ☐
| | | | | | | | | | | 1b.
| Barbara J. Beck
| ☐
| ☐
| ☐
| | | | | For
| Against
| Abstain
| | | | 1c.
| Leslie S. Biller
| ☐
| ☐
| ☐
| | | 1l.
| Suzanne M. Vautrinot
| ☐
| ☐
| ☐
| | | | 1d.
| Carl M. Casale
| ☐
| ☐
| ☐
| | | 1m.
| John J. Zillmer
| ☐
| ☐
| ☐
| | | | 1e.
| Stephen I. Chazen
| ☐
| ☐
| ☐
| | The Board of Directors recommends you vote FOR management proposals 2 and 3:
| | | | | | | 1f.
| Jeffrey M. Ettinger
| ☐
| ☐
| ☐
| | 2.
| Ratify the appointment of Pricewaterhouse Coopers LLP as independent registered public accounting firm for the
| ☐
| ☐
| ☐
| | | | 1g.
| Arthur J. Higgins
| ☐
| ☐
| ☐
| | | current year ending December 31, 2018.
| | | | | | | 1h.
| Michael Larson
| ☐
| ☐
| ☐
| | 3.
| Advisory vote to approve the compensation of executives disclosed in the Proxy Statement.
| ☐
| ☐
| ☐
| | | | 1i.
| David W. MacLennan
| ☐
| ☐
| ☐
| | The Board of Directors recommends you vote AGAINST
| | | | | | | 1j.
| Tracy B. McKibben
| ☐
| ☐
| ☐
| | proposal 4:
| | | | | | | | 1k.
| Victoria J. Reich
| ☐
| ☐
| ☐
| | 4.
| Stockholder proposal regarding the threshold to call special stockholder meetings, if properly presented.
| | ☐
| ☐
| ☐
| | | | | | | | | | | | | | | | | | | | 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
| | | | | |
ECOLAB INC. The Board of Directors recommends you vote FOR each of the nominees listed in proposal 1: Nominees: 1a. Judson B. Althoff 1b. Shari L. Ballard 1c. Christophe Beck 1d. Eric M. Green 1e. Arthur J. Higgins 1f. Michael Larson 1g. David W. MacLennan 1h. Tracy B. McKibben 1i. Lionel L. Nowell III 1j. Victoria J. Reich 1k. Suzanne M. Vautrinot 1l. John J. Zillmer The Board of Directors recommends you vote FOR management proposals 2 and 3: 2. Approve, on an advisory basis, the compensation of our named executive officers disclosed in the Proxy Statement. 3. Ratify the appointment of PricewaterhouseCoopers LLP as Ecolab’s independent registered public accounting firm for the current year ending December 31, 2024. The Board of Directors recommends you vote AGAINST stockholder proposal 4: 4. Vote on a stockholder proposal regarding an independent board chair policy, if properly presented at the meeting. For Against Abstain For Against Abstain 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
Directions to the Ecolab Annual Meeting
The Ecolab Global Headquarters are located at 1 Ecolab Plaza in downtown St. Paul, adjacent to the Landmark Center. There are numerous paid ramps and parking meters within easy walking distance. The closest parking ramps are RiverCentre, Lawson Commons and Kellogg Street Ramp.
![[MISSING IMAGE: px_24ecolabproxy1pg02-bw.jpg]](/files/DEF 14A/0001104659-24-035047/px_24ecolabproxy1pg02-bw.jpg) Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:Materials:The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
| IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
|
|
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. V35129-P01793 Proxy — Ecolab Inc. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ECOLAB INC. ANNUAL MEETING OF STOCKHOLDERS MAY 2, 2024 The undersigned hereby appoints Christophe Beck and Theresa E. Corona, and each of them, with power of substitution to each as proxies to represent the undersigned at the Annual Meeting of Stockholders of Ecolab Inc., to be held virtually at www.virtualshareholdermeeting.com/ECL2024 at 12:30 p.m. Central Time on Thursday, May 2, 2024, and at any adjournment or postponement thereof, and to vote all shares of stock which the undersigned may be entitled to vote at said meeting as directed on the reverse side with respect to the proposals as set forth in the Proxy Statement, and in their discretion, upon any other matters that may properly come before the meeting. This proxy will be voted as specified by the undersigned. If no such direction is given, your proxies will have the authority to vote “FOR” each of the nominees listed in proposal 1, “FOR” on proposals 2 and 3, “AGAINST” on proposal 4 and in the discretion of the proxy holder on any other matter that may properly come before the annual meeting and any adjournment or postponement thereof.The tabulator cannot vote the shares unless you sign and return this card, or you use the telephone or Internet voting services to cast your proxy. Continued and to be signed on reverse sideE37962-P01436
| | | | | | | | | | Proxy — Ecolab Inc.
| | | | | THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
| ECOLAB INC.
ANNUAL MEETING OF STOCKHOLDERS
MAY 3, 2018
| The undersigned hereby appoints Douglas M. Baker, Jr., Michael C. McCormick and Theodore D. Herzog, and each of them, with power of substitution to each as proxies to represent the undersigned at the Annual Meeting of Stockholders of Ecolab Inc., to be held in St. Paul, Minnesota, at the Ecolab Global Headquarters at 9:30 a.m. on Thursday, May 3, 2018, and at any adjournment or postponement thereof, and to vote all shares of stock which the undersigned may be entitled to vote at said meeting as directed on the reverse side with respect to the proposals as set forth in the Proxy Statement, and in their discretion, upon any other matters that may properly come before the meeting.
| This proxy will be voted as specified by the undersigned. If no such direction is given, your proxies will have the authority to vote “for” each of the nominees listed in proposal 1, “for” proposals 2 and 3, “against” on proposal 4 and in the discretion of the proxy holder on any other matter that may properly come before the annual meeting and any adjournment or postponement thereof.
The tabulator cannot vote the shares unless you sign and return this card, or you use the telephone or Internet voting services to cast your proxy.
| Continued and to be signed on reverse side
| |
0000031462 5 2023-01-01 2023-12-31
| |
![[MISSING IMAGE: cv_ofc-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/cv_ofc-4clr.jpg)
![[MISSING IMAGE: lg_ecolabprotecting-pn.jpg]](/files/DEF 14A/0001104659-24-035047/lg_ecolabprotecting-pn.jpg)
![[MISSING IMAGE: ph_peopleplanet-pnlr.jpg]](/files/DEF 14A/0001104659-24-035047/ph_peopleplanet-pnlr.jpg)
![[MISSING IMAGE: ic_water-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_water-pn.jpg)
![[MISSING IMAGE: ic_food-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_food-pn.jpg)
![[MISSING IMAGE: ic_health1-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_health1-pn.jpg)
![[MISSING IMAGE: ic_climate-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_climate-pn.jpg)
![[MISSING IMAGE: lg_ecolabscience-4c.jpg]](/files/DEF 14A/0001104659-24-035047/lg_ecolabscience-4c.jpg)
![[MISSING IMAGE: lg_ecolabwaterclimate-4c.jpg]](/files/DEF 14A/0001104659-24-035047/lg_ecolabwaterclimate-4c.jpg)
![[MISSING IMAGE: lg_eroi-4c.jpg]](/files/DEF 14A/0001104659-24-035047/lg_eroi-4c.jpg)
![[MISSING IMAGE: hd_corner-4c.jpg]](/files/DEF 14A/0001104659-24-035047/hd_corner-4c.jpg)
![[MISSING IMAGE: ph_christophebeckbox-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ph_christophebeckbox-pn.jpg)
![[MISSING IMAGE: ic_quotemark-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_quotemark-pn.jpg)
![[MISSING IMAGE: sg_christophebeck-bw.jpg]](/files/DEF 14A/0001104659-24-035047/sg_christophebeck-bw.jpg)
![[MISSING IMAGE: ph_davidwmaclennanbox-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ph_davidwmaclennanbox-pn.jpg)
![[MISSING IMAGE: sg_davidwmaclennan-bw.jpg]](/files/DEF 14A/0001104659-24-035047/sg_davidwmaclennan-bw.jpg)
![[MISSING IMAGE: ic_dateandtime-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_dateandtime-pn.gif)
![[MISSING IMAGE: ic_virtualmeeting-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_virtualmeeting-pn.gif)
![[MISSING IMAGE: ph_laneshatminnix-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_laneshatminnix-4c.jpg)
![[MISSING IMAGE: sg_laneshatminnix-bw.jpg]](/files/DEF 14A/0001104659-24-035047/sg_laneshatminnix-bw.jpg)
![[MISSING IMAGE: ic_qrcode-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/ic_qrcode-4clr.jpg)
![[MISSING IMAGE: ic_telephone-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_telephone-pn.gif)
![[MISSING IMAGE: ic_mail-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_mail-pn.gif)
![[MISSING IMAGE: ic_mobiledevice-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_mobiledevice-pn.gif)
![[MISSING IMAGE: pc_business-pn.jpg]](/files/DEF 14A/0001104659-24-035047/pc_business-pn.jpg)
![[MISSING IMAGE: ic_checkcirclebluemedium-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_checkcirclebluemedium-pn.gif)
![[MISSING IMAGE: lg_cdp-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_cdp-4clr.jpg)
![[MISSING IMAGE: lg_terracarta-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_terracarta-4clr.jpg)
![[MISSING IMAGE: lg_dowjones-bwlr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_dowjones-bwlr.jpg)
![[MISSING IMAGE: lg_2023worldsmost-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_2023worldsmost-4clr.jpg)
![[MISSING IMAGE: lg_ftse4good-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_ftse4good-4clr.jpg)
![[MISSING IMAGE: lg_americasmostjustco-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_americasmostjustco-4clr.jpg)
![[MISSING IMAGE: lg_sellingpower50best-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_sellingpower50best-4clr.jpg)
![[MISSING IMAGE: lg_forbes2023-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_forbes2023-4clr.jpg)
![[MISSING IMAGE: lg_forbes2023newgrads-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_forbes2023newgrads-4clr.jpg)
![[MISSING IMAGE: lg_bloomberg-bwlr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_bloomberg-bwlr.jpg)
![[MISSING IMAGE: lg_vetsindexes-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_vetsindexes-4clr.jpg)
![[MISSING IMAGE: lg_americasgreatestwork-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_americasgreatestwork-4clr.jpg)
![[MISSING IMAGE: lg_dei100-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_dei100-4clr.jpg)
![[MISSING IMAGE: lg_diversityinctop50-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_diversityinctop50-4clr.jpg)
![[MISSING IMAGE: lg_2022bestplacestowork-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_2022bestplacestowork-4clr.jpg)
![[MISSING IMAGE: lg_gri-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_gri-4clr.jpg)
![[MISSING IMAGE: lg_apex-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_apex-4clr.jpg)
![[MISSING IMAGE: lg_sasb-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_sasb-4clr.jpg)
![[MISSING IMAGE: lg_tcfd-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_tcfd-4clr.jpg)
![[MISSING IMAGE: ph_sustainability-pnlr.jpg]](/files/DEF 14A/0001104659-24-035047/ph_sustainability-pnlr.jpg)
![[MISSING IMAGE: lg_worldeconomicforum-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/lg_worldeconomicforum-4clr.jpg)
![[MISSING IMAGE: ic_planetblue-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_planetblue-pn.gif)
![[MISSING IMAGE: ic_leafblue-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_leafblue-pn.gif)
![[MISSING IMAGE: ic_rightarrow-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_rightarrow-pn.gif)
![[MISSING IMAGE: ph_emiliotenuta-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ph_emiliotenuta-pn.jpg)
![[MISSING IMAGE: ph_ecolabbuilding-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/ph_ecolabbuilding-4clr.jpg)
![[MISSING IMAGE: fc_since-ko.gif]](/files/DEF 14A/0001104659-24-035047/fc_since-ko.gif)
![[MISSING IMAGE: pc_human37-pn.gif]](/files/DEF 14A/0001104659-24-035047/pc_human37-pn.gif)
![[MISSING IMAGE: fc_shareholder-pn.jpg]](/files/DEF 14A/0001104659-24-035047/fc_shareholder-pn.jpg)
![[MISSING IMAGE: pc_investors40-pn.gif]](/files/DEF 14A/0001104659-24-035047/pc_investors40-pn.gif)
![[MISSING IMAGE: pc_investors28-pn.gif]](/files/DEF 14A/0001104659-24-035047/pc_investors28-pn.gif)
![[MISSING IMAGE: ic_diversityhumanblue-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_diversityhumanblue-pn.gif)
![[MISSING IMAGE: ph_davidwmaclennan-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ph_davidwmaclennan-pn.jpg)
![[MISSING IMAGE: ph_judsonalthoff-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_judsonalthoff-4c.gif)
![[MISSING IMAGE: ph_shariballard-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_shariballard-4c.gif)
![[MISSING IMAGE: ph_christophebeck-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_christophebeck-4c.gif)
![[MISSING IMAGE: ph_ericgreen-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_ericgreen-4c.gif)
![[MISSING IMAGE: ph_arthurhiggins-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_arthurhiggins-4c.gif)
![[MISSING IMAGE: ph_michaellarson-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_michaellarson-4c.gif)
![[MISSING IMAGE: ph_davidmaclennan-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_davidmaclennan-4c.gif)
![[MISSING IMAGE: ph_tracymekibben-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_tracymekibben-4c.gif)
![[MISSING IMAGE: ph_lionelnowell-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_lionelnowell-4c.gif)
![[MISSING IMAGE: ph_victoriareich-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_victoriareich-4c.gif)
![[MISSING IMAGE: ph_suzannevautrinot-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_suzannevautrinot-4c.gif)
![[MISSING IMAGE: ph_johnzillmer-4c.gif]](/files/DEF 14A/0001104659-24-035047/ph_johnzillmer-4c.gif)
![[MISSING IMAGE: ic_chairman-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_chairman-pn.jpg)
![[MISSING IMAGE: ic_independent-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_independent-pn.jpg)
![[MISSING IMAGE: pc_age-pn.jpg]](/files/DEF 14A/0001104659-24-035047/pc_age-pn.jpg)
![[MISSING IMAGE: fc_corporate-pn.jpg]](/files/DEF 14A/0001104659-24-035047/fc_corporate-pn.jpg)
![[MISSING IMAGE: pc_summary-pn.jpg]](/files/DEF 14A/0001104659-24-035047/pc_summary-pn.jpg)
![[MISSING IMAGE: ic_compboard-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_compboard-pn.gif)
![[MISSING IMAGE: ic_qualifications-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_qualifications-pn.gif)
![[MISSING IMAGE: ic_riskassess-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_riskassess-pn.gif)
![[MISSING IMAGE: ic_newdirectors-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_newdirectors-pn.gif)
![[MISSING IMAGE: ic_ceo-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_ceo-pn.gif)
![[MISSING IMAGE: ic_industry-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_industry-pn.gif)
![[MISSING IMAGE: ic_globalbus-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_globalbus-pn.gif)
![[MISSING IMAGE: ic_innovation-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_innovation-pn.gif)
![[MISSING IMAGE: ic_accounting-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_accounting-pn.gif)
![[MISSING IMAGE: ic_human-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_human-pn.gif)
![[MISSING IMAGE: ic_esg-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_esg-pn.gif)
![[MISSING IMAGE: ic_digital-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_digital-pn.gif)
![[MISSING IMAGE: ic_manufacturing-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_manufacturing-pn.gif)
![[MISSING IMAGE: ic_public-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_public-pn.gif)
![[MISSING IMAGE: ic_manda-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_manda-pn.gif)
![[MISSING IMAGE: ic_women-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_women-pn.gif)
![[MISSING IMAGE: ic_ethnicity-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_ethnicity-pn.gif)
![[MISSING IMAGE: ic_lgbtq-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_lgbtq-pn.gif)
![[MISSING IMAGE: ic_militaryveter-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_militaryveter-pn.gif)
![[MISSING IMAGE: ph_judsonalthoff-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_judsonalthoff-4c.jpg)
![[MISSING IMAGE: ic_industry-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_industry-pn.jpg)
![[MISSING IMAGE: ic_globalbus-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_globalbus-pn.jpg)
![[MISSING IMAGE: ic_innovation-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_innovation-pn.jpg)
![[MISSING IMAGE: ic_human-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_human-pn.jpg)
![[MISSING IMAGE: ic_digital-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_digital-pn.jpg)
![[MISSING IMAGE: ph_shariballard-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_shariballard-4c.jpg)
![[MISSING IMAGE: ic_ceo-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_ceo-pn.jpg)
![[MISSING IMAGE: ic_public-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_public-pn.jpg)
![[MISSING IMAGE: ic_manda-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_manda-pn.jpg)
![[MISSING IMAGE: ph_christophebeck-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_christophebeck-4c.jpg)
![[MISSING IMAGE: ic_esg-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_esg-pn.jpg)
![[MISSING IMAGE: ph_ericgreen-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_ericgreen-4c.jpg)
![[MISSING IMAGE: ic_manufacturing-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_manufacturing-pn.jpg)
![[MISSING IMAGE: ph_arthurhiggins-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_arthurhiggins-4c.jpg)
![[MISSING IMAGE: ph_michaellarson-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_michaellarson-4c.jpg)
![[MISSING IMAGE: ic_accounting-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_accounting-pn.jpg)
![[MISSING IMAGE: ph_davidmaclennan-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_davidmaclennan-4c.jpg)
![[MISSING IMAGE: ph_tracymekibben-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_tracymekibben-4c.jpg)
![[MISSING IMAGE: ph_lionelnowell-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_lionelnowell-4c.jpg)
![[MISSING IMAGE: ph_victoriareich-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_victoriareich-4c.jpg)
![[MISSING IMAGE: ph_suzannevautrinot-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_suzannevautrinot-4c.jpg)
![[MISSING IMAGE: ph_johnzillmer-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_johnzillmer-4c.jpg)
![[MISSING IMAGE: ic_member-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_member-pn.gif)
![[MISSING IMAGE: ic_chair-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_chair-pn.gif)
![[MISSING IMAGE: ic_chair-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_chair-pn.jpg)
![[MISSING IMAGE: ic_member-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_member-pn.jpg)
![[MISSING IMAGE: ic_financialexpert-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_financialexpert-pn.jpg)
![[MISSING IMAGE: ph_barbarabeck-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_barbarabeck-4c.jpg)
![[MISSING IMAGE: ic_updownarrow-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_updownarrow-pn.jpg)
![[MISSING IMAGE: pc_directors-pn.jpg]](/files/DEF 14A/0001104659-24-035047/pc_directors-pn.jpg)
![[MISSING IMAGE: pc_annualnonemployee-pn.jpg]](/files/DEF 14A/0001104659-24-035047/pc_annualnonemployee-pn.jpg)
![[MISSING IMAGE: fc_stockretention-pn.jpg]](/files/DEF 14A/0001104659-24-035047/fc_stockretention-pn.jpg)
![[MISSING IMAGE: ph_scottdkirkland-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/ph_scottdkirkland-4clr.jpg)
![[MISSING IMAGE: ph_darrellrbrown-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_darrellrbrown-4c.jpg)
![[MISSING IMAGE: ph_mikeduijsernew-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_mikeduijsernew-4c.jpg)
![[MISSING IMAGE: ph_nicholasalfano-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_nicholasalfano-4c.jpg)
![[MISSING IMAGE: ph_drlarryberger-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/ph_drlarryberger-4clr.jpg)
![[MISSING IMAGE: ph_jenniferbradway-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_jenniferbradway-4c.jpg)
![[MISSING IMAGE: ph_angelabusch-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_angelabusch-4c.jpg)
![[MISSING IMAGE: ph_gregcook-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_gregcook-4c.jpg)
![[MISSING IMAGE: ph_samdeboo-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_samdeboo-4c.jpg)
![[MISSING IMAGE: ph_nicolasagranucci-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_nicolasagranucci-4c.jpg)
![[MISSING IMAGE: ph_lauriemmarsh-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_lauriemmarsh-4c.jpg)
![[MISSING IMAGE: ph_gailpeterson-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_gailpeterson-4c.jpg)
![[MISSING IMAGE: ph_gergelyggsved-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ph_gergelyggsved-4c.jpg)
![[MISSING IMAGE: ic_align-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_align-pn.gif)
![[MISSING IMAGE: ic_performance-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_performance-pn.gif)
![[MISSING IMAGE: bc_incentive-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_incentive-pn.jpg)
![[MISSING IMAGE: bc_commercail-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_commercail-pn.jpg)
![[MISSING IMAGE: ic_peergroup-ko.gif]](/files/DEF 14A/0001104659-24-035047/ic_peergroup-ko.gif)
![[MISSING IMAGE: ic_plus-pn.jpg]](/files/DEF 14A/0001104659-24-035047/ic_plus-pn.jpg)
![[MISSING IMAGE: bc_peergroup-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_peergroup-pn.jpg)
![[MISSING IMAGE: pc_pbrsus-pn.gif]](/files/DEF 14A/0001104659-24-035047/pc_pbrsus-pn.gif)
![[MISSING IMAGE: pc_stockoptions-pn.gif]](/files/DEF 14A/0001104659-24-035047/pc_stockoptions-pn.gif)
![[MISSING IMAGE: fc_ceoother-pn.jpg]](/files/DEF 14A/0001104659-24-035047/fc_ceoother-pn.jpg)
![[MISSING IMAGE: ic_riskreview-bw.gif]](/files/DEF 14A/0001104659-24-035047/ic_riskreview-bw.gif)
![[MISSING IMAGE: bc_compensationtsr-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_compensationtsr-pn.jpg)
![[MISSING IMAGE: bc_compensaincome-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_compensaincome-pn.jpg)
![[MISSING IMAGE: bc_compensationeps-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_compensationeps-pn.jpg)
![[MISSING IMAGE: bc_compensagroup-pn.jpg]](/files/DEF 14A/0001104659-24-035047/bc_compensagroup-pn.jpg)
![[MISSING IMAGE: pc_ourglobal-pn.jpg]](/files/DEF 14A/0001104659-24-035047/pc_ourglobal-pn.jpg)
![[MISSING IMAGE: ic_shareholderight-4c.jpg]](/files/DEF 14A/0001104659-24-035047/ic_shareholderight-4c.jpg)
![[MISSING IMAGE: ic_ittraining-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_ittraining-pn.gif)
![[MISSING IMAGE: ic_place-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_place-pn.gif)
![[MISSING IMAGE: ic_email-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_email-pn.gif)
![[MISSING IMAGE: ph_chooseedeliver-4clr.jpg]](/files/DEF 14A/0001104659-24-035047/ph_chooseedeliver-4clr.jpg)
![[MISSING IMAGE: ic_qrcode-4clr.gif]](/files/DEF 14A/0001104659-24-035047/ic_qrcode-4clr.gif)
![[MISSING IMAGE: ic_tree-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_tree-pn.gif)
![[MISSING IMAGE: ic_watercir-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_watercir-pn.gif)
![[MISSING IMAGE: ic_energy-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_energy-pn.gif)
![[MISSING IMAGE: ic_waste-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_waste-pn.gif)
![[MISSING IMAGE: ic_car2-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_car2-pn.gif)
![[MISSING IMAGE: ic_foctory-pn.gif]](/files/DEF 14A/0001104659-24-035047/ic_foctory-pn.gif)
![[MISSING IMAGE: cv_obc-4c.jpg]](/files/DEF 14A/0001104659-24-035047/cv_obc-4c.jpg)