DEF 14A of Franklin Electric Co Inc, Mar 19, 2024

DEF 14A of Franklin Electric Co Inc

Filed Mar 19, 2024 · FY20230000038725-24-000062

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS The Company's Amended and Restated By-laws provide that the Board of Directors shall consist of at least seven directors and not more than eleven members, divided into three classes. Each year, the directors of one of the three classes are elected to serve terms of three years or until their successors have been elected and qualified. Two directors will be elected at the Annual Meeting this year. Directors are elected by the affirmative vote of a majority of the shares voted, unless the number of nominees for director exceeds the number of directors to be elected, in which case directors shall be elected by a plurality of the shares voted (i.e., the two nominees who receive the most votes will be elected). Gregg C. Sengstack and David M. Wathen have been nominated to serve as directors of the Company for terms expiring in 2027. The nominees are current directors of the Company and have indicated their willingness to continue to serve as directors if elected. If, however, any nominee is unwilling or unable to serve as a director, shares represented by the proxies will be voted for the election of another nominee proposed by the Board of Directors or the Board may reduce the number of directors to be elected at the Annual Meeting.

  2. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS

    THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE.

  3. INFORMATION CONCERNING NOMINEES AND CONTINUING DIRECTORS

    INFORMATION CONCERNING NOMINEES AND CONTINUING DIRECTORS Set forth below for the director nominees and continuing directors are their ages, year they first became a director, principal occupations and directorships for at least the past five years, and legal proceedings, if any, for the past ten years. With respect to each nominee or continuing director, we describe under the heading “Relevant Experience” the particular experience and other attributes that have led to the conclusion that the individual should serve on the Board of Directors of the Company.

  4. Gregg C. Sengstack David M. Wathen

    Gregg C. Sengstack David M. Wathen

  5. Gregg C. Sengstack David M. Wathen

    | Gregg C. Sengstack | | Age: 65 | | Director and Chief Executive Officer of the Company | | Director Since: 2014 | | | Principal Occupation: Chief Executive Officer of the Company since 2014. | | | | Formerly: President and Chief Operating Officer of the Company from 2011 to 2014; prior thereto, Senior Vice President and President, Franklin Fueling Systems and International Water Group from 2005 to 2011; prior thereto, Chief Financial Officer of the Company from 1999 to 2005. | | | | Directorships - Public Companies: Woodward, Inc. | | | | Relevant Experience: Mr. Sengstack received his bachelor's degree in math and economics from Bucknell University and his MBA from the University of Chicago. Mr. Sengstack joined the Company in 1988 and has significant experience holding various positions in the Company, which provides the Board with a unique depth of understanding of the Company's markets and businesses that is beneficial to the Board in its deliberations. Mr. Sengstack's long tenure with the Company also helps give the Board a historical perspective of the Company. | | | David M. Wathen | | Age: 71 | | Director of the Company | | Director Since: 2005 | | | Principal Occupation: Retired in 2016. | | | | Formerly: President and Chief Executive Officer of TriMas Corporation, a manufacturer of engineered products, that serve a variety of industrial, commercial and consumer end markets worldwide, from 2009 to 2016; prior thereto, President and Chief Executive Officer, Balfour Beatty, Inc. (U.S. Operations), an engineering, construction and building management services company, from 2002 to 2006; prior thereto, Group Executive/Corporate Officer, Eaton Corporation, a global technology leader in diversified power management solutions, from 1997 to 2000. | | | | Relevant Experience: Mr. Wathen received his bachelor's degree in mechanical engineering from Purdue University and his MBA from Saint Francis College, Fort Wayne, Indiana. Mr. Wathen brings to the Board his experience as CEO of two companies and leadership positions in others, including over twenty years direct technical and general management experience in the same industry as the Company and direct experience managing electrical businesses serving pump OEMs and distributor channels similar to those served by the Company. His background enables him to serve as an "audit committee financial expert". His experience on the Board of the Company also helps give the Board a historical perspective in its deliberations. | |

  6. Renee J. Peterson Jennifer L. Sherman Chris Villavarayan

    Renee J. Peterson Jennifer L. Sherman Chris Villavarayan

  7. Renee J. Peterson Jennifer L. Sherman Chris Villavarayan

    | Renee J. Peterson | | Age: 62 | | Director of the Company | | Director Since: 2015 | | | Principal Occupation: Retired in 2023. | | | | Formerly: Vice President and Chief Financial Officer of The Toro Company, a leading provider of solutions for the outdoor environment, including turf maintenance, snow and ice management, landscape, retail and specialty construction equipment, and irrigation and outdoor lighting solutions, from 2011 to 2023; prior thereto, Vice President, Finance and Planning of Eaton Corporation from 2008 to 2011; prior thereto, Vice President and Division Chief Financial Officer of the Aerospace and Defense Segment of Honeywell International Inc. Ms. Peterson held a variety of positions of increasing responsibility throughout her Honeywell career from 1983 to 2008. | | | | Relevant Experience: Ms. Peterson received her bachelor's degree in accounting from Saint Cloud State University and her MBA from the University of Minnesota. Ms. Peterson brings financial and operational experience at three large manufacturers that provides the Board with specific expertise and assists in its deliberations. At Toro, Ms. Peterson also provided leadership oversight of the Information Systems function. Her background enables her to serve as an "audit committee financial expert." | | | Jennifer L. Sherman | | Age: 59 | | Director of the Company | | Director Since: 2015 | | | Principal Occupation: President and Chief Executive Officer of Federal Signal Corporation, a diversified manufacturer of specialized vehicles and systems in maintenance and infrastructure as well as safety and security products, including audible and visual warning devices, since 2016. | | | | Formerly: Chief Operating Officer of Federal Signal from 2014 to 2015; prior thereto, Chief Administrative Officer of Federal Signal from 2010 to 2014; prior thereto, General Counsel of Federal Signal from 2004 to 2010. | | | | Relevant Experience: Ms. Sherman received her bachelor's degree in business administration and her Juris Doctor from the University of Michigan. She is also a fellow of the Kellogg School of Management at Northwestern University. Ms. Sherman's background has provided her with a broad range of experiences that will complement the Board. Specifically, Ms. Sherman's experience includes, but is not limited to, compliance, human resources, legal issues, governance and business operations. Consequently, Ms. Sherman has the background and capability to serve as an important member of the Board. | | | Chris Villavarayan | | Age: 53 | | Director of the Company | | Director Since: 2022 | | | Principal Occupation: Chief Executive Officer and President of Axalta Coating Systems Ltd., since 2023. | | | | Formerly: Former Chief Executive Officer and President of Meritor, Inc. from 2021 to 2023, a leading global supplier of drivetrain, mobility, braking, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets. | | | | Relevant Experience: Mr. Villavarayan holds a bachelor’s degree in engineering from McMaster University in Hamilton, Ontario. Mr. Villavarayan has over twenty years of significant global manufacturing operations experience, providing the Board with specific expertise in the areas of engineering, product development, manufacturing, plant management and operations. | |

  8. Victor D. Grizzle Alok Maskara Thomas R. VerHage

    Victor D. Grizzle Alok Maskara Thomas R. VerHage

  9. Victor D. Grizzle Alok Maskara Thomas R. VerHage

    | Victor D. Grizzle | | Age: 62 | | Director of the Company | | Director Since: 2020 | | | Principal Occupation: President and Chief Executive Officer of Armstrong World Industries, Inc., a leading designer and manufacturer of commercial and residential ceiling, wall and suspension system solutions, since 2016. | | | | Formerly: Executive Vice President and Chief Executive Officer of Armstrong Building Products from 2011 to 2016; prior thereto, Group President of Global Structures, Coatings and Tubing for Valmont Industries, a global leader of infrastructure and manufacturer of mechanized irrigation equipment for large scale farming. Prior to his employment with Valmont Industries, Mr. Grizzle held several general management positions over 16 years with the General Electric Company. | | | | Relevant Experience: Mr. Grizzle received his Bachelor of Science in Mechanical Engineering from California Polytechnic University. He brings to the Board his experience as CEO of Armstrong, in addition to extensive senior leadership experience in the areas of international business, acquisitions, process improvement, sales and marketing for large, publicly traded manufacturing companies. | | | Alok Maskara | | Age: 52 | | Director of the Company | | Director Since: 2021 | | | Principal Occupation: Chief Executive Officer of Lennox International Inc. since 2022. | | | | Formerly: Chief Executive Officer of Luxfer Holdings PLC, an international industry company focused on advanced materials. Prior thereto, business segment President at Pentair PLC, a water solutions company, for eight years where he led businesses of progressively larger sizes. Prior to Pentair, Mr. Maskara was employed by General Electric Company where he gained significant experience in Lean Manufacturing. Mr. Maskara also worked at McKinsey & Company in both their Chicago and Amsterdam offices where he advised businesses on industrial turnarounds and driving growth through customer insights and segmentation. | | | | Relevant Experience: Mr. Maskara holds an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University, an M.S. in Chemical Engineering from the University of New Mexico, and a Bachelor of Technology degree in Chemical Engineering from the Indian Institute of Technology, Mumbai. He has nearly thirty years of leadership experience in multiple manufacturing and technology industries, including advanced materials, water and flow technologies, and electrical protection. His background enables him to serve as an “audit committee financial expert.” | | | Thomas R. VerHage | | Age: 71 | | Director of the Company | | Director Since: 2010 | | | Principal Occupation: Retired in 2011. | | | | Formerly: Vice President and Chief Financial Officer, Donaldson Company, Inc., a worldwide provider of filtration systems and replacement parts, from 2004 until 2011; prior thereto, Partner, Deloitte & Touche, LLP, an international accounting and consulting firm, from 2002 to 2004; prior thereto, Partner, Arthur Andersen, LLP, a consulting and accounting firm, from 1976 to 2002. | | | | Relevant Experience: Mr. VerHage received his bachelor’s degree in business administration and his MBA from the University of Wisconsin. Mr. VerHage adds to the Board his financial and accounting expertise from his experience as CFO of Donaldson Company, Inc. and his prior experience with two major public accounting firms. His background enables him to serve as an “audit committee financial expert.” | |

  10. INFORMATION ABOUT THE BOARD AND ITS COMMITTEES

    INFORMATION ABOUT THE BOARD AND ITS COMMITTEES

  11. Executive Summary

    Executive Summary The Management Organization and Compensation Committee of the Board (the “Committee”) believes that a significant portion of the total compensation opportunity for each executive should be tied to performance, both of the Company and of the individual executive. This summary contains a discussion of the 2023 executive compensation highlights, 2023 performance and the prior year Advisory Vote on Executive compensation ("say on pay") results. 2023 Executive Compensation Overview •Performance-based compensation represented between 51 percent and 68 percent of the named executive officers’ total targeted compensation for fiscal 2023. •The annual cash incentive awards are directly aligned with critical one-year operating results. No cash awards are earned unless a threshold level of performance is attained. Earned payouts cannot exceed 200 percent of the target opportunity. •Performance is evaluated holistically and include assessment of objectives relative to applicable corporate responsibility risk and metrics, which are aligned to the Company’s key strategic objectives; •Long-term incentive awards are equity-based and are designed to align management’s interests with those of the Company’s shareholders and to foster retention of key executives. The 2023 long-term incentive grants are predominantly performance-based, with 50 percent of the targeted value awarded as performance-based share units (earned units cannot exceed 200 percent of the target number of units) and 25 percent of the targeted value awarded as stock options. The remaining 25 percent of the targeted value is awarded as time-based restricted stock or restricted stock units. These awards focus executives on delivering results that drive shareholder value. •The Company generally does not provide perquisites to the named executive officers but will, in certain circumstances, such as relocation, provide perquisites. •The Company has stock ownership requirements in place to further align the interests of the Company’s executives with those of the Company’s shareholders. •In October 2023, the Company reviewed and revised its compensation recoupment policy to be compliant with the Securities Exchange Commission’s (SEC’s) Final Rule on the Dodd-Frank Mandatory Clawback policy. •The Company has anti-hedging and anti-pledging provisions that prohibit executives and directors from hedging the value of Company securities or pledging Company securities held by them. 2023 Company Performance The financial results achieved by the Company included sales of $2,065.1 million compared to $2,043.7 million in the prior year. The sales increase was primarily due to price realization, partially offset by the negative impact of foreign currency translation and lower volumes. Full year 2023 operating income was $262.4 million, up from $257.2 million in 2022, an increase of 2 percent. Full year 2023 GAAP fully diluted earnings per share (EPS) was $4.11, versus GAAP fully diluted EPS in 2022 of $3.97. Water Segment sales were $1,203.7 million in 2023, an increase of $46.2 million compared to 2022. Fueling Segment sales were $296.5 million in 2023, a decrease of $37.6 million from 2022. Distribution sales were $673.3 million versus 2022 sales of $668.1 million, an increase of $5.2 million. After conducting its first-ever employee engagement survey in 2021, the Company’s leadership leveraged the results in 2022 to drive improvements in employee engagement. Subsequently, the Company repeated the engagement survey in 2023, demonstrating a commitment to ongoing assessment and enhancement of the employee experience. The Company issued its fourth Sustainability Report, available on its website, detailing important corporate responsibility initiatives and increasing transparency of non-financial metrics that are important to our stakeholders. Water Systems Segment Water Systems is a global leader in the production and marketing of water pumping systems and is a technical leader in submersible motors, pumps, drives, electronic controls, water treatment systems, and monitoring devices. The Water Systems segment designs, manufactures, and sells motors, pumps, drives, electronic controls, monitoring devices and related parts, and equipment primarily for use in groundwater, water transfer, and wastewater. Water Systems motors, pumps, and controls are used principally for pumping clean water and wastewater in a variety of residential, agricultural, municipal, and industrial applications. Water Systems also manufactures electronic drives and controls for the motors which control functionality and provide protection from various hazards, such as electrical surges, over-heating and dry wells or dry tanks. In the last three years, the Company acquired substantially all of the assets of Action Manufacturing & Supply, Inc. and all of the ownership interest of Puronics, Inc.; New Aqua, LLC; and B&R Industries, Inc. expanding its portfolio to include water treatment systems and acquired Minetuff Dewatering Pumps Australia Pty Ltd expanding its industrial dewatering product line. Water Systems products are sold in highly competitive markets. Water Systems contributed about 60 percent of the Company’s total revenue in 2023. Significant portions of segment revenue come from selling groundwater and surface pumps, motors, and controls for residential and commercial buildings, as well as agricultural sales which are more seasonal and subject to commodity price changes. The Water Systems segment generates approximately 25 to 30 percent of its revenue in developing markets, which often lack municipal water systems. As those countries install water systems and further develop with an expanding middle class or improving quality of living, the Company views those markets as an opportunity. The Company has had 6 to 9 percent compounded annual sales growth in developing regions in recent years. Water Systems competes in each of its targeted markets based on product design, quality, performance, availability and price. The Company’s principal competitors in the specialty water products industry are Grundfos Management A/S, Pentair, Inc. and Xylem, Inc. 2023 Water Systems research and development expenditures were primarily related to the following activities: •Electronic variable frequency drives and controls for Pump and HVAC applications, including enhancements to include IOT capability for our drive and protection products and making our key platforms solar pumping capable •Development of integrated electronic pressure boosting systems for residential and commercial applications •Development of new standard electric skid pump package designs including the new "SmartPrime" variable frequency drive skid packages for mining and municipal dewatering markets •Greywater pumping equipment, including the development of 60Hz electrical submersible pumps from the acquisition of Minetuff and expansion of Non-Clog and grinder pumps for the Americas market •Submersible pumps for commercial, municipal, and agricultural applications including the development of a new cast stainless submersible turbine line, and upgrading the performance of the line shaft turbine product offering •Water treatment products focused on component performance improvements and IOT enabled sensing systems Fueling Systems Segment Fueling Systems is a global leader in the production and marketing of fuel pumping systems, fuel containment systems and monitoring and control systems. The Fueling Systems segment designs, manufactures and sells pumps, motors, pipe, sumps, fittings, vapor recovery components, electronic controls, monitoring devices and related parts, and equipment primarily for use in fueling system applications.

  12. Compensation Philosophy and Pay Objectives

    Compensation Philosophy and Pay Objectives The Company and the Committee believe that compensation paid to executive officers, including the named executive officers, should be aligned with the strategy and performance of the Company on both a short-term and long-term basis, and that such compensation should assist the Company in attracting and retaining key executives critical to the Company’s success. Compensation is structured to ensure that a significant portion of the executive’s compensation opportunities will be directly related to Company performance and other factors that directly and indirectly influence shareholder value, including performance evaluated against the achievement of objectives relative to applicable corporate responsibility risks and metrics. The Committee encourages superior short-term performance through annual cash incentive awards and superior long-term performance through equity incentive awards. For the Company’s CEO, CFO and CAO the cash incentive compensation is designed to reward Company-wide performance by tying 100 percent of their target cash incentive opportunity to corporate financial goals, including earnings per share and consolidated working capital ratio. For other named executive officers, the cash incentive compensation is weighted to reward the achievement of specific financial metrics within areas under his control or influence, although Company-wide performance is still an important factor. Stock-based compensation consists of a combination of stock options, restricted stock (or restricted stock units for retirement-eligible executives) and performance share units. The Committee believes that all three equity-based components create a strong link to shareholder value creation, with the majority of the awards in the form of stock options and performance share units. The Committee sets executive pay opportunities based on a number of factors deemed appropriate by the Committee, including market competitive pay data, individual and Company performance, experience level, proficiency in role, and criticality to the organization. Going forward, the Committee will seek to position target total compensation within a competitive range (typically plus or minus 15%) of the 50th percentile of the market data for similar roles among peer companies. Actual target total compensation positioning for each executive may vary based on the factors described above. For its 2023 pay decisions, the Committee used the following pay objectives as a guide in assessing competitiveness of pay opportunities at a peer group of companies. Targeted pay objectives for annual bonus and long-term incentive components reflected the Committee’s objective to attract and retain high quality executive talent in order to meet the aggressive performance goals of the Company and its belief that a significant portion of total compensation should be at risk and variable.

  13. Compensation Philosophy and Pay Objectives

    | Component | Target Pay Objectives | | Base Salary | 50th percentile | | Annual Bonus Opportunity | 65th percentile | | Long-Term Incentives | 65th percentile |

  14. Role of Compensation Consultant and Advisers in Compensation Decisions

    Role of Compensation Consultant and Advisers in Compensation Decisions The Committee utilizes the Company’s Human Resources department and has the authority under its charter to engage the services of outside consultants to assist the Committee. In accordance with this authority, the Committee has engaged the services of Meridian Compensation Partners, LLC (“Meridian”), an independent executive compensation consulting firm, to conduct reviews of its total compensation program for executive officers and to provide advice to the Committee in the design and implementation of its executive compensation program. Pursuant to its charter and NASDAQ listing standards, the Committee regularly reviews Meridian’s independence relative to key factors, including: (i) whether Meridian provides any other services to the Company; (ii) the amount of fees paid to Meridian relative to the total revenue of the firm; (iii) policies in place to prevent conflicts of interest; (iv) any personal or business relationships with members of the Committee; (v) ownership of Company stock; and (vi) any personal or business relationships with executive officers. One or more representatives from Meridian are invited by the Committee to attend the relevant portions of its meetings. During 2023, Meridian participated in all six of the Committee meetings in person or virtually. In the course of fulfilling its consulting responsibilities, representatives of Meridian frequently communicate with the Chairperson of the Committee outside of regular Committee meetings. A representative of Meridian meets with the Committee in executive session at most meetings. Meridian also interacts with management from time to time to exchange information and to review proposals that management may present to the Committee.

  15. Peer Group Benchmarking

    Peer Group Benchmarking In late 2022, the Committee, with the assistance of Meridian, conducted an analysis of the current peer group used for compensation benchmarking purposes to ensure that all included companies continued to be relevant comparators. As part of this process, the Committee considered revenue size and industry, as well as companies that compete with the Company for executive talent. Based on this review and input from Meridian, Lydall was removed due to acquisition, but no further changes were made to the peer group. As a result, the Committee approved the 23-company peer group listed below (the “2023 Peer Group”) for purposes of updating the executive pay study to assist in 2023 pay decisions. The companies in the 2023 Peer Group are primarily engaged in manufacturing, are publicly traded, and had trailing twelve-month revenue (as of 9/30/2022) between $512 million and $4.511 billion.

  16. Peer Group Benchmarking

    | Chart Industries, Inc. | Hillenbrand, Inc. | Standex International Corp. | | CIRCOR International, Inc. | IDEX Corporation | The Gorman-Rupp Co. | | Crane Holdings Co. | ITT, Inc. | The Timken Co. | | Curtiss-Wright Corporation | Lindsay Corporation | The Toro Co. | | Donaldson Company, Inc. | Mueller Water Products, Inc. | TriMas Corporation | | Enerpac Tool Group Corporation | Nordson Corporation | Watts Water Technologies, Inc. | | ESCO Technologies, Inc. | RBC Bearings, Inc. | Woodward, Inc. | | Graco, Inc. | SPX FLOW, Inc. | |

  17. Setting Executive Compensation

    Setting Executive Compensation In General The Company compensates its executives through programs that emphasize performance-based compensation. For the executive officers, including the named executive officers, the compensation package for 2023 included base salary, an annual cash incentive opportunity and an annual long-term incentive opportunity in the form of stock options, performance share units, and restricted stock/units. Base salary is intended to provide a certain level of fixed compensation commensurate with an executive’s position, responsibilities and contributions to the Company. The Company has structured annual and long-term incentive compensation to motivate executives to achieve the strategic objectives set by the CEO and the Board, to tie executives’ long- term interests to those of the Company’s shareholders, to reward the executives for achieving such goals, and to provide a retention incentive. The mix of compensation among base salary, annual bonus opportunity and long-term incentives is a result of the targeted pay objective for each component of pay. This approach results in a significant portion of the compensation of those executive officers having the greatest ability to influence the Company’s performance being performance-based, which the Committee believes is appropriate. Additionally, after setting each separate component of pay, the Committee reviews the total compensation package of each named executive officer to assess the level of total target compensation provided in relation to the competitive range of market practice and may make adjustments to one or more components of pay based on this assessment. Each year Meridian provides a study of market competitive compensation data. The updated study included 2022 compensation data for the companies in the 2023 Peer Group, with cash data “aged” at an annualized rate of 3.0 percent to reflect expected 2023 compensation levels for the 2023 Peer Group. In February 2023, the Committee set the specific components of the compensation of the named executive officers, with the overall goal of providing compensation opportunities at levels generally competitive with the 2023 pay study. The following table shows the 2023 total targeted compensation (the sum of base salary, target annual bonus opportunity and long-term incentives) for the named executive officers, using targets of the 50th percentile of the 2023 Peer Group for base salary and the 65th percentile of the 2023 Peer Group for annual bonus opportunity and long-term incentives:

  18. Annual Cash Incentive Award

    Annual Cash Incentive Award The executive officers of the Company are eligible to participate in the Executive Officer Annual Incentive Cash Bonus Program (the “Annual Bonus Plan”). The Annual Bonus Plan is designed to motivate and reward participants for achieving or exceeding financial goals that support the overall business objectives and strategic direction of the Company. The table below shows the target annual bonus opportunities for each of the named executive officers for 2023. Target amounts for the named executive officers are based on their respective target bonus percentage (which only changed for Mr. Sengstack from 2022) multiplied by the amount of base salary paid to the executive for the year.

  19. Annual Cash Incentive Award

    | Named Executive Officer | 2023 Target Bonus Opportunity (as a % of Base Salary) | 2023 Target Bonus Opportunity(1) ($) | | | Gregg C. Sengstack | 115% | | 1,092,500 | | Jeffery L. Taylor | 75% | | 386,250 | | Jonathan M. Grandon | 75% | | 330,000 | | DeLancey W. Davis | 75% | | 330,000 | | Jay J. Walsh | 75% | | 305,625 | | Donald P. Kenney | 75% | | 386,250 |

  20. Annual Cash Incentive Award

    (1)For Mr. Kenney, the table reflects the full year annualized target bonus opportunity since that amount was used to compare compensation for his role to the 2023 Peer Group. His target bonus opportunity based on base salary actually paid to him in 2023 was $234,447. In the first quarter of 2023, the Committee approved financial performance targets to be used under the Annual Bonus Plan for 2023. As in prior years, the corporate-wide financial performance targets for the named executive officers were consolidated working capital ratio (WC) and earnings per share (EPS). The Committee selected WC due to its determination that management should continue to focus on managing key elements of the balance sheet, including inventory, accounts receivable and accounts payable. The Committee continues to believe that diluted EPS as adjusted is an important indicator of profitability that aligns the interests of the executive officers with those of the Company’s shareholders. Financial performance targets for Mr. Davis, Mr. Walsh and Mr. Kenney also included their business unit’s operating income after non-GAAP adjustments. While the Committee continues to set individual goals for executives, including relating to corporate responsibility risk and metrics, and assesses their achievement for purposes of merit increases and promotions, individual performance will not impact the annual bonus outside of extraordinary circumstances. With respect to each performance measure, the Committee set a threshold level of performance below which no bonus is earned for that performance measure. For each of the financial-based measures the performance threshold was set at 80 percent of the target performance level. Payout for threshold level performance was set at 33 percent of target. For every 1 percent by which performance exceeds the threshold level, the actual payout level increases 3.35 percent up to the target level (i.e., 100 percent of target payout), and for every 1 percent by which performance exceeds the target level, up to 110 percent of the target, the actual payout increases 10 percent up to the maximum performance level (i.e., 200 percent of target payout). The following graph illustrates the payout percentages by performance for the financial-based bonus metrics: The performance measures, and the relative percentage of the 2023 target bonus opportunity assigned to each performance measure, were as follows:

  21. Annual Cash Incentive Award

    | Performance Measure | Gregg C. Sengstack | Jeffery L. Taylor | Jonathan M. Grandon | DeLancey W. Davis | Jay J. Walsh | Donald P. Kenney | | Consolidated Working Capital Ratio | 50% | 50% | 50% | 25% | 25% | 25% | | EPS | 50% | 50% | 50% | 25% | 25% | 25% | | Headwater Operating Income | | | | 50% | | | | Global Water Operating Income | | | | | | 50% | | Fueling Systems Operating Income | | | | | 50% | |

  22. Annual Cash Incentive Award

    The chart below sets forth the threshold, target, maximum and actual performance levels for the 2023 performance goals (other than business unit operating income), and for all performance goals, the percentage at which target was attained. The performance goals were established assuming the goals would be adjusted for certain discrete items. Accordingly, with the approval of the Committee, restructuring expense was excluded in calculating EPS, which decreased EPS by $0.02. This adjustment to EPS was approved solely for the purpose of calculating the achievement of performance goals under the Annual Bonus Plan. The “Actual” results shown in the table reflect these adjustments. The Company does not publicly report operating income by business units below the operating segment level given the size of the business units as compared to its competitors and the potential for competitive harm. The operating income goals were set at the beginning of 2023 and the Committee believed at the time that it would require a high degree of execution of the 2023 business plan in order to attain these goals.

  23. Annual Cash Incentive Award

    | Performance Goal Achievement | Threshold | Target | Maximum | Actual | % of Attainment of Target | | Working Capital Ratio | 33.6% | 28.0% | 25.2% | 31.1% | 88.9% | | EPS ($) | 3.50 | 4.37 | 4.81 | 4.13 | 94.5% | | Business Unit Operating Income | | | | | 57.8% - 103.2% (1) |

  24. Annual Cash Incentive Award

    (1)The percentage of attainment of target results for the business unit metrics represents the range of results for the business units. Mr. Sengstack evaluated the extent to which the other named executive officers attained their individual strategic goals, including those relating to corporate responsibility risks and metrics. The annual bonus plan has a discretionary adjustment component of a positive or negative 20 percent. The intended application of this discretionary adjustment component is reserved, in part, for “above and beyond” accomplishments based on individual achievements or extraordinary events outside of the executive’s control despite exceptional performance. Based on his evaluation, Mr. Sengstack did not recommend any discretionary adjustments to the calculated bonus payouts for 2023, and the Committee did not make any changes, resulting in the entire bonus payments being based on the pre-established financial goals. Based on the results summarized above, the following table sets forth the actual bonus payouts for each named executive officer as a percentage of his target opportunity.

  25. Annual Cash Incentive Award

    | Named Executive Officer | Payout Percentage (% of Target) | | Gregg C. Sengstack | 72.2% | | Jeffery L. Taylor | 72.2% | | Jonathan M. Grandon | 72.2% | | DeLancey W. Davis | 36.1% | | Jay J. Walsh | 70.1% | | Donald P. Kenney | 102.0% |

  26. Annual Cash Incentive Award

    For additional information about the specific awards made to the named executive officers for 2023 pursuant to the above criteria, see the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 31.

  27. Long-Term Incentive Compensation

    Long-Term Incentive Compensation The Committee grants equity incentives to its executive officers to more closely align the executives’ compensation with the return received by the Company’s shareholders, to offer an incentive for long-term performance, to provide a retention incentive and to encourage stock ownership. The regular cycle long-term incentive awards to executive officers include a combination of performance share units, stock options and restricted stock/units. Retirement eligible executives, including the eligible named executive officers, receive restricted stock units instead of restricted stock because, unlike restricted stock units, restricted stock grants to a retirement eligible individual results in the early recognition of income even though the individual has not actually retired and received the stock subject to awards. By policy, grants and awards are only made at times when the Company’s trading “window” for executive officer transactions in the Company’s stock is open (i.e., during the regularly scheduled “window period” and at a time when trading is not restricted for other reasons), and grants and awards are dated the date of official action approving such awards, and the valuation of stock or stock unit grants and the exercise price of options will be the closing price on the date of grant. LTI Award Target Values In determining the size of equity grants made to the named executive officers, the Committee uses the pay study provided by Meridian as a guide. The Committee then considers other important factors such as experience level and individual performance to approve the long-term incentive value to be granted to each named executive officer. The following table shows the 2023 targeted economic value for the annual equity awards to the named executive officers.

  28. Long-Term Incentive Compensation

    | Named Executive Officer | Targeted Economic Value for 2023 ($) | | | Gregg C. Sengstack | | 4,200,000 | | Jeffery L. Taylor | | 890,000 | | Jonathan M. Grandon | | 590,000 | | DeLancey W. Davis | | 565,000 | | Jay J. Walsh | | 437,500 | | Donald P. Kenney | | 950,000 |

  29. Long-Term Incentive Compensation

    LTI Award Mix Based on a review of market data and input from Meridian, the Committee determined to deliver the targeted economic value of long-term incentives to the named executive officers as follows: 50 percent in the form of performance share units; 25 percent in the form of restricted stock (or restricted stock units); and 25 percent in the form of stock options. All three long-term incentive components are used to align the interests of the named executive officers with those of shareholders. Stock options provide an element of risk to the executives in that value is created for the executive only when the stock price increases, while restricted stock and restricted stock units provide executives with outright value which supports their retention and helps manage the potential increased dilution that would result in using only options. Through the use of performance share units, the Committee can focus the executives on one or more select performance metrics deemed to be critical to driving Company performance and, in turn, increasing shareholder value. Performance Share Units The performance share units vest based solely on the aggregate change in the Company’s consolidated normalized EBITDA (adjusted for certain non-recurring items) relative to the aggregate change in the consolidated normalized EBITDA reported by companies in the S&P Small Cap 600® Industrials Index (adjusted for non-recurring items) over a three-year performance period, as reported by Thompson Reuters. For purposes of determining this aggregate increase, a target dollar increase in adjusted operating income is established for the Company for each year of the three-year performance period based on the annual percentage increase of the S&P 600® Industrials Index consolidated normalized EBITDA from the base year. The annual target amounts are then aggregated to calculate the cumulative three-year target dollar increase. The actual cumulative growth of the Company’s consolidated normalized EBITDA (in dollars) over the performance period will be compared to the target level of cumulative growth in consolidated normalized EBITDA based on the increases relative to the companies in the S&P Small Cap 600® Industrials Index over the performance period. The Committee believes that consolidated normalized EBITDA is a relevant benchmark to gauge Company performance over time against a broad index of similarly situated manufacturing firms. For performance share units granted in 2023, the applicable performance period is January 1, 2023 through December 31, 2025. Performance share units will be earned based on the following:

  30. Long-Term Incentive Compensation

    | Performance Level (1) | Aggregate Actual Change for Company Relative to Targeted Change | Number of Performance Share Units Earned (as a % of Target) | | Below Threshold | <75% | 0% | | Threshold | 75% | 50% | | Target | 100% | 100% | | Maximum | 125% (or more) | 200% |

  31. Long-Term Incentive Compensation

    (1)Performance between threshold and target, and target and maximum will be interpolated on a straight-line basis. Earned performance share units will be paid out in shares of Company stock. Any dividends declared during the performance period will accrue and be paid out in cash at the end of the performance period based on the number of performance share units actually earned. For additional information about the material terms of these awards, see the narrative disclosure under the Summary Compensation Table. Performance Share Units Earned in Fiscal 2023 The three-year performance period for the performance share units awarded in 2021 ended on December 31, 2023. The base year for measuring the aggregate change in the consolidated normalized EBITDA for both the Company and the S&P 600® Industrials Index in each year of the performance period was 2020. The annual change in normalized EBITDA for each year in the performance period for the S&P 600® Industrials Index was 10.3 percent, 30.4 percent and 5.4 percent, which represents the respective annual target levels for the Company. Normalized EBITDA consists of the Company's reported operating income adjusted for restructuring expense, transaction costs for acquisitions, depreciation and amortization expense. For 2020, these values were $130.5 million, $2.5 million, $0.0 million, $27.1 million and $9.4 million. The following table provides the target performance levels (based on the table above) for the performance period:

  32. Long-Term Incentive Compensation

    | | Year 1 Target (Fiscal 2021) | Year 2 Target (Fiscal 2022) | Year 3 Target (Fiscal 2023) | | Base Year Company Normalized EBITDA Target Change in Normalized EBITDA (over Base Year) Target Level of Normalized EBITDA for Relevant Period | $169.5 million 10.3% ($17.4 million) $186.9 million | $169.5 million 43.8% ($74.3 million) $243.8 million | $169.5 million 51.6% ($87.6 million)* $257.1 million* |

  33. Long-Term Incentive Compensation

    As a result, (i) the Company’s target level of aggregate adjusted operating income over the performance period was $687.8 million ($186.9 million + $243.8 million + $257.1 million) and (ii) the threshold level was calculated as $515.9 million (75 percent of target) and (iii) the maximum level was calculated as $859.8 million (125 percent of target). The Company’s actual aggregate consolidated normalized EBITDA for the performance period was $861.3 million, resulting in an estimated 125.2 percent attainment of target ($861.3 ÷ $687.8) and 200.0 percent of the targeted level of the performance share units were estimated to be earned. Normalized EBITDA for the performance period consisted of operating income of $708.8 million, restructuring expense of $3.9 million, transaction costs for acquisitions of $1.4 million, depreciation expense of $98.5 million and amortization expense of $48.7 million. *The numbers for 2023 are based on all but four companies in the index having reported their 2023 financial results, including normalized EBITDA. It is expected that the final results will not change the final payout result of 200 percent. LTI Award Grant Practices Equity grants are typically made on an annual basis at the Committee’s meeting following the public release of the Company’s fiscal year-end results. Stock options are valued as of the date of grant using a modified Black-Scholes methodology. They have an exercise price equal to 100 percent of the fair market value of the Company’s common stock on the date of grant and vest ratably over three years. Restricted stock, restricted stock units and performance share units are valued based on the closing price of the Company’s common stock on the date of grant. The restricted stock and restricted stock units generally vest 100 percent on the third anniversary of the grant date. Performance share units are earned based on the level of performance attainment against the pre-established earnings goal (relative to the S&P Small Cap 600® Industrials Index) set by the Committee over a three-year performance period.

  34. Retirement Plans

    Retirement Plans The Company has various retirement plans in which certain of the named executive officers currently participate. Pension Plan Basic Retirement Portion The Basic Retirement portion of the Pension Plan generally covers employees in the U.S. A participant retiring at age 65 is eligible to receive a monthly single life annuity equal to his credited service times a flat dollar amount ($25 for most U.S. salaried employees). Participants age 55 or older with 10 years of vesting service may retire prior to age 65 with a reduced benefit. Participants who were younger than 50 as of December 31, 2011 (which includes Messrs. Davis and Walsh) stopped accruing benefits as of such date, and participants 50 or older as of such date (which include Messrs. Sengstack and Kenney) accrued benefits until December 31, 2016. Messrs. Taylor and Grandon are not eligible to participate in this portion of the Pension Plan because they were hired after February 21, 2006 when the Pension Plan was closed to all new salaried employees. Cash Balance Portion The Cash Balance portion of the Pension Plan covers most salaried employees in the U.S. All participants stopped accruing benefits as of December 31, 2011. At termination of employment a participant is eligible to receive the amount credited to his account or a monthly single life annuity based on the amount credited to his account. The account consists of: (i) an opening balance for a participant at December 31, 1999 equal to the present value of the participant’s accrued benefit earned at December 31, 1999 under the applicable prior pension plan; (ii) annual Company contributions through 2011 ranging from 3 percent to 12 percent of a participant’s compensation and transitional credits for certain participants from 2000-2004 equal to 6 percent of compensation; and (iii) interest credits, which continue until distribution of the account, based on the 30-year Treasury rate (subject to a minimum of 4.5 percent). All named executive officers participate in the Cash Balance portion except Messrs. Taylor and Grandon because they were hired after this portion of the Pension Plan was frozen. In order to provide eligible executives with the portion of their retirement benefits that cannot be paid under the tax- qualified Pension Plan due to IRS limits on compensation, the Company maintains the Pension Restoration Plan. All participants other than Mr. Sengstack (which includes Mr. Davis) stopped accruing benefits as of December 31, 2011, and effective as of January 1, 2012, their benefits were transferred to the Supplemental Retirement and Deferred Compensation Plan. Messrs Taylor, Grandon, Walsh and Kenney do not participate in the Pension Restoration Plan because it was frozen before Messrs. Walsh and Kenney became executive officers and before Messrs. Taylor and Grandon were hired. Retirement Program The Retirement Program is a tax-qualified 401(k) plan that covers the majority of U.S. employees, including the named executive officers. A participant can elect to defer 1-50 percent of his compensation, in accordance with the Retirement Program plan documents, up to a maximum in 2023 of $22,500, or $30,000 if age 50 or over, and the Company will make a matching contribution equal to 100 percent of the first 2 percent of the participant’s deferral contributions plus 50 percent of the next 3 percent of the participant’s deferral contributions, for a total of 3.5 percent of the participant’s compensation. The Company also makes annual service-based contributions to most participants, ranging from 3 percent to 9 percent of a participant’s compensation, depending on his or her years of service with the Company (3 percent in the case of hourly employees). The service-based contribution generally is made to all employees. Compensation taken into account under the Retirement Program is limited by the Internal Revenue Code (the limit for 2023 was $330,000). The Retirement Program also holds employees’ accounts that were held in the Company’s Employee Stock Ownership Plan, which was merged into the Retirement Program in 2010. Supplemental Retirement and Deferred Compensation Plan The Company maintains the Supplemental Retirement and Deferred Compensation Plan (the “Supplemental Retirement Plan”), which provides an additional benefit to attract and retain key executives. The Supplemental Retirement Plan permits executive officers of the Company to elect each year to defer up to 90 percent of their bonus awards and up to 50 percent of their salary. Deferred amounts are credited to a bookkeeping account maintained on behalf of the participant. The Company provides two types of contributions under the Supplemental Retirement Plan to the named executive officers other than Mr. Sengstack, who continues to participate in the Pension Restoration Plan. These contributions include: (i) the portion of the service-based contribution that could not be made under the Retirement Program due to IRS limitations; and (ii) a supplemental contribution of 2 percent to 4 percent of a participant’s compensation depending on years of service. In addition, participants who stopped accruing benefits under the Pension Restoration Plan (which includes Mr. Davis) had their benefit transferred to the Supplemental Retirement Plan as of January 1, 2012. A participant’s deferral account, service contribution account and transferred Pension Restoration Account are credited with earnings and losses based on the investment funds made available under the Supplemental Retirement and Deferred Compensation Plan. Earnings on the supplemental contribution account will follow the methodology used in the now-frozen Cash Balance Plan, which credits earnings based on the 30-year Treasury rate but not less than 4.5 percent. A participant’s accounts under the Supplemental Retirement Plan generally will be distributed to him or her in the seventh month following termination of employment. Mr. Taylor elected to contribute to the Supplemental Retirement Plan in 2023, and Messrs. Taylor, Grandon, Davis, Walsh and Kenney received Company contributions.

  35. Deductibility of Executive Compensation

    Deductibility of Executive Compensation Section 162(m) of the Internal Revenue Code as in effect prior to 2018 limited the deductibility for federal income tax purposes of executive compensation paid to the CEO and the three other most highly compensated officers other than the chief financial officer of a public company to $1,000,000 per year but contained an exception for certain performance-based compensation. The Tax Cuts and Jobs Act of 2017 amended Section 162(m) to cover a public company’s chief financial officer and eliminate the performance-based exception, beginning in 2018. Accordingly, the annual cash incentive awards, stock options and performance shares granted in 2018 and later years will no longer qualify for this exception (base salary and time- based restricted stock/units by their nature have never qualified as performance-based compensation). In addition, compensation paid to a covered employee after termination of employment will also be subject to the million dollar limitation. Following the Tax Cuts and Jobs Act, the Committee may consider tax deductibility as a factor in determining executive compensation, but may also choose to structure its compensation arrangements in ways that do not maximize tax deductibility, to achieve its goal to provide a compensation program that appropriately attracts, retains and rewards the executive officers who are crucial to the Company’s success.

  36. Summary Compensation Table

    Summary Compensation Table The following table sets forth compensation information for the Company’s Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers ("named executive officers") for the fiscal years ended December 31, 2023, December 31, 2022 and December 31, 2021, as well as one additional executive officer for the fiscal year ended December 31, 2023 who would have met the requirement for a named executive officer but for the fact that the individual was not serving as an executive officer at the end of the completed fiscal year.

  37. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($)(1) | Time-Based Stock Awards ($)(2) | Performance-Based Stock Awards ($)(2)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | Change in Pension Value & Nonqualified Deferred Compensation Earnings ($)(6) | All Other Compensation ($)(7) | Total ($) | | Gregg C. Sengstack, Chairperson and CEO | 2023 | 940,385 | 1,050,005 | 2,100,011 | 1,050,001 | 781,342 | 1,366,459 | 113,407 | 7,401,610 | | | 2022 | 894,231 | 1,200,022 | 1,599,973 | 1,199,993 | 1,145,957 | 557,862 | 102,209 | 6,700,247 | | | 2021 | 870,000 | 1,020,010 | 1,020,010 | 1,360,004 | 1,537,899 | 1,031,359 | 57,651 | 6,896,933 | | Jeffery L. Taylor, VP and CFO | 2023 | 510,673 | 222,542 | 444,988 | 222,486 | 276,721 | — | 59,453 | 1,736,863 | | | 2022 | 489,135 | 254,972 | 339,963 | 255,003 | 427,382 | — | 51,926 | 1,818,381 | | | 2021 | 264,904 | 600,000 | — | — | 319,276 | — | 24,353 | 1,208,533 | | Jonathan M. Grandon, VP, CAO, General Counsel and Corporate Secretary | 2023 | 435,192 | 147,507 | 295,015 | 147,496 | 235,820 | — | 65,770 | 1,326,800 | | | 2021 | 400,125 | 145,475 | 145,475 | 193,998 | 433,890 | — | 59,976 | 1,378,939 | | DeLancey W. Davis, VP and President, Headwater Companies | 2023 | 435,192 | 141,247 | 282,493 | 141,249 | 117,910 | — | 115,226 | 1,233,317 | | | 2022 | 412,115 | 146,993 | 195,990 | 147,000 | 489,129 | — | 117,610 | 1,508,837 | | | 2021 | 400,000 | 141,014 | 141,014 | 188,009 | 541,050 | — | 91,133 | 1,502,220 | | Jay J. Walsh, VP and President, Fueling Systems | 2023 | 403,798 | 109,374 | 218,747 | 109,362 | 212,221 | — | 126,169 | 1,179,671 | | | 2022 | 387,115 | 125,263 | 166,961 | 125,248 | 459,457 | — | 131,396 | 1,395,440 | | Donald P. Kenney, Former VP and President, Global Water | 2023 | 312,596 | 237,529 | 474,964 | 237,498 | 239,136 | — | 129,296 | 1,631,019 | | | 2022 | 489,135 | 273,011 | 363,958 | 273,004 | 574,401 | — | 151,520 | 2,125,029 | | | 2021 | 477,000 | 262,499 | 262,499 | 349,999 | 573,206 | 2,051 | 118,678 | 2,045,932 |

  38. Summary Compensation Table

    (1)Salary adjustments for 2023 were effective March 13, 2023 (2)These amounts represent the grant date fair value, computed in accordance with FASB Codification Topic 718, of the restricted stock and performance share unit awards granted in 2023 to the named executive officers. The value of the performance share units is based upon the probable outcome of the performance conditions. See Note 14 of the Company's Annual Report to Shareholders for the fiscal year ending December 31, 2023 for a complete description of the assumptions used for these valuations. (3)The grant date value of the performance shares granted in 2023, assuming the performance conditions were met at the maximum level, was: Mr. Sengstack: $4,200,022; Mr. Taylor: $889,976; Mr. Grandon: $590,030; Mr. Davis: $564,986; Mr. Walsh: $437,494; and Mr. Kenney: $949,928. (4)These amounts represent the grant date fair value, computed in accordance with FASB Codification Topic 718, of the stock options granted to the named executive officers in 2023. See Note 14 of the Company's Annual Report to Shareholders for the fiscal year ending December 31, 2023 for a complete description of the assumptions used for these valuations. (5)These amounts represent the bonuses paid to the named executive officers under the Company's performance-based Executive Officer Annual Incentive Cash Bonus Program. A description of this program can be found in the "Compensation Discussion and Analysis" section of this Proxy Statement. (6)These amounts represent the annual change in the present value of each named executive officer's benefits under the Company's defined benefit pension plans, which calculations use the same assumptions required to be used for financial reporting purposes. Benefits under the pension plans were frozen as of December 31, 2011 for most participants, including Messrs. Davis and Walsh; Messrs. Taylor and Grandon were never participants. (7)These amounts for 2023 represent (i) Company contributions under the Retirement Program: Mr. Sengstack: $41,550; Mr. Taylor $21,450; Mr. Grandon: $24,750; Mr. Davis: $34,650; Mr. Walsh $41,550; and Mr. Kenney: $41,550; (ii) Company contributions under the Supplemental Retirement and Deferred Compensation Plan: Mr. Taylor $37,003; Mr. Grandon: $39,949; Mr. Davis: $78,575; Mr. Walsh $82,523; and Mr. Kenney: $85,621; (iii) a Medicare tax reimbursement related to the non-qualified retirement plans: Mr. Sengstack: $53,983; Mr. Taylor $890; Mr. Grandon: $961; Mr. Davis: $1,891; Mr. Walsh: $1,986; and Mr. Kenney: $2,061; (iv) the Company's life insurance contributions of $110 for each named executive officer besides Mr. Kenney, whose was $64; (v) the non-business use of the Company airplane: Mr. Sengstack $17,764. Restricted Stock/Restricted Stock Unit/Performance Stock Unit Awards The 2023 restricted awards were granted on February 16, 2023 to Mr. Sengstack and the remaining Named Executive Officers. The awards consisted of 11,069 restricted stock units and 22,138 performance share units awarded to Mr. Sengstack; 2,346 restricted stock awards and 4,691 performance share units awarded to Mr. Taylor; 1,555 restricted stock awards and 3,110 performance stock units awarded to Mr. Grandon; 1,489 restricted stock units and 2,978 performance stock units awarded to Mr. Davis; 1,153 restricted stock units and 2,306 performance stock units awarded to Mr. Walsh; 2,504 restricted stock units and 5,007 performance stock units awarded to Mr. Kenney. The 2022 restricted awards were granted on February 24, 2022 to Mr. Sengstack and the remaining Named Executive Officers. The awards consisted of 14,303 restricted stock units and 19,070 performance share units awarded to Mr. Sengstack; 3,039 restricted stock awards and 4,052 performance share units awarded to Mr. Taylor; 3,254 restricted stock units and 4,338 performance stock units awarded to Mr. Kenney; 1,752 restricted stock units and 2,336 performance stock units awarded to Mr. Davis; 1,493 restricted stock units and 1,990 performance stock units awarded to Mr. Walsh. The 2021 restricted awards were granted on February 18, 2021 to Mr. Sengstack and the remaining Named Executive Officers besides Mr. Taylor. The awards consisted of 13,946 restricted stock units and 13,946 performance share units awarded to Mr. Sengstack; 4,102 restricted stock units and 4,102 performance share units awarded to Mr. Haines; 3,589 restricted stock units and 3,589 performance stock units awarded to Mr. Kenney; 1,928 restricted stock units and 1,928 performance stock units awarded to Mr. Davis; 1,989 restricted stock awards and 1,989 performance stock units awarded to Mr. Grandon. On June 14, 2021, 7,500 restricted stock awards were awarded to Mr. Taylor. Restricted stock and restricted stock unit awards vest on the third anniversary of the grant date. All grants are subject to accelerated pro-rata vesting upon death, disability, or retirement and accelerated vesting on a change in control. Performance share units granted in 2023 vest at the end of the three-year performance period ending December 31, 2025, depending on the level of achievement of the performance goals (subject to pro-rata vesting at the end of the performance period upon death, disability or retirement and accelerated vesting at target level upon a change in control). Dividends are paid on restricted stock awards and dividend equivalents are paid on restricted stock unit awards. Dividend equivalents are paid on performance share unit awards only to the extent the awards vest. Option Awards The 2023 grants to the named executive officers consisted of options for 30,426 shares to Mr. Sengstack; 6,447 shares to Mr. Taylor; 4,274 shares to Mr. Grandon; 4,093 shares to Mr. Davis; 3,169 shares to Mr. Walsh; and 6,882 shares to Mr. Kenney. These grants had an exercise price of $94.86. The 2022 grants to the named executive officers consisted of options for 46,065 shares to Mr. Sengstack; 9,789 shares to Mr. Taylor; 10,480 shares to Mr. Kenney; 5,643 shares to Mr. Davis; and 4,808 shares to Mr. Walsh. These grants had an exercise price of $83.90. The 2021 grants to the named executive officers consisted of options for 62,673 shares to Mr. Sengstack; 18,433 shares to Mr. Haines; 16,129 shares to Mr. Kenney; 8,664 shares to Mr. Davis; and 8,940 shares to Mr. Grandon. These grants had an exercise price of $73.14. Stock options granted in 2023, 2022, and 2021 vest over three years at 33 percent per year. All stock options are subject to accelerated vesting upon death, disability, retirement or a change in control and expire after ten years. Change in Pension Value and Nonqualified Deferred Compensation Earnings In connection with the redesign of the Company's retirement program, effective as of December 31, 2011, all named executive officers other than Messrs. Sengstack and Kenney stopped accruing benefits under the Pension Plan and/or the Pension Restoration Plan. Descriptions of these retirement plans, as in effect before and after December 31, 2011, and the level of participation by the named executive officers, can be found in the 2023 Pension Benefits Table and accompanying narrative included in this Proxy Statement.

  39. 2023 Grant of Plan Based Awards Table

    2023 Grant of Plan Based Awards Table The following table sets forth the plan-based grants made during the fiscal year ended December 31, 2023.

  40. 2023 Grant of Plan Based Awards Table

    | Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Possible Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(3) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/sh)(4) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Gregg C. Sengstack | 2/16/2023 | 356,876 | 1,081,443 | 2,162,886 | | | | | | | | | | 2/16/2023 | | | | 11,069 | 22,138 | 44,276 | | | | | | | 2/16/2023 | | | | | | | 11,069 | 30,426 | 94.86 | 4,200,017 | | Jeffery L. Taylor | 2/16/2023 | 126,392 | 383,005 | 766,010 | | | | | | | | | | 2/16/2023 | | | | 2,346 | 4,691 | 9,382 | | | | | | | 2/16/2023 | | | | | | | 2,346 | 6,447 | 94.86 | 890,016 | | Jonathan M. Grandon | 2/16/2023 | 107,710 | 326,394 | 652,788 | | | | | | | | | | 2/16/2023 | | | | 1,555 | 3,110 | 6,220 | | | | | | | 2/16/2023 | | | | | | | 1,555 | 4,274 | 94.86 | 590,018 | | DeLancey W. Davis | 2/16/2023 | 107,710 | 326,394 | 652,788 | | | | | | | | | | 2/16/2023 | | | | 1,489 | 2,978 | 5,956 | | | | | | | 2/16/2023 | | | | | | | 1,489 | 4,093 | 94.86 | 564,989 | | Jay J. Walsh | 2/16/2023 | 99,940 | 302,849 | 605,698 | | | | | | | | | | 2/16/2023 | | | | 1,153 | 2,306 | 4,612 | | | | | | | 2/16/2023 | | | | | | | 1,153 | 3,169 | 94.86 | 437,483 | | Donald P. Kenney | 2/16/2023 | 77,368 | 234,447 | 468,894 | | | | | | | | | | 2/16/2023 | | | | 2,504 | 5,007 | 10,014 | | | | | | | 2/16/2023 | | | | | | | 2,504 | 6,882 | 94.86 | 949,991 |

  41. 2023 Grant of Plan Based Awards Table

    (1)The amounts in these columns reflect estimated possible payouts for 2023 and were established under the Executive Officer Annual Incentive Bonus Program. The estimated payouts shown in the Table were based on performance in 2023, which has now occurred. Thus, the amounts shown in “threshold”, “target”, and “maximum” columns reflect the range of potential payouts when the performance goals were set in early 2023. Actual amounts paid for 2023 are reflected in the Summary Compensation Table. A description of this program can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement. (2)The amounts in these columns reflect the estimated possible payouts of shares of common stock that may be issued pursuant to the settlement of performance share units that were granted in 2023. Vesting occurs at the end of the three-year performance period (December 31, 2025), depending on the level of attainment of the performance goals. A pro-rata portion is paid at the end of the performance period in the event of the executive's death, disability or retirement, and vesting is accelerated at target level upon a change in control. Dividend equivalents are paid to the extent the performance share units vest. A description of the performance share units can be found in the "Compensation, Discussion, and Analysis" section of this Proxy Statement. (3)Restricted stock units were granted to Messrs. Sengstack, Davis, Walsh, and Kenney because they are retirement eligible or will become retirement eligible within the vesting period, and restricted stock was granted to Messrs. Taylor and Grandon. The awards vest three years from the grant date if they are still employed with the Company on such date. Vesting is accelerated upon a change in control of the Company and a pro-rata portion is accelerated upon death, disability or retirement. (4)The exercise price for grants of stock options is determined using the closing price of the Company’s common stock on the date of grant. The option grants expire after ten years and vest over three years, at 33 percent per year. Vesting is accelerated upon death, disability, retirement or a change in control of the Company. (5)The grant date fair value of the target performance share units, restricted stock, restricted stock units and option awards shown in the above table was computed in accordance with FASB Codification Topic 718.

  42. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    2023 Outstanding Equity Awards at Fiscal Year-End Table The following table sets forth the outstanding equity awards as of December 31, 2023.

  43. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    | Name | Option Awards(1) | | | | Stock Awards | | | | | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise price ($/sh) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(7) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(7) | | Gregg C. Sengstack | 94,952 | — | 29.08 | 2/25/2026 | 39,318(2) | 3,800,085 | 55,154(9) | 5,330,634 | | | 70,569 | — | 43.00 | 2/24/2027 | | | | | | | 96,501 | — | 40.25 | 2/22/2028 | | | | | | | 76,872 | — | 55.16 | 2/21/2029 | | | | | | | 84,453 | — | 59.71 | 2/20/2030 | | | | | | | 41,777 | 20,896 | 73.14 | 2/18/2031 | | | | | | | 15,353 | 30,712 | 83.90 | 2/24/2032 | | | | | | | — | 30,426 | 94.86 | 2/16/2033 | | | | | | Jeffery L. Taylor | 3,262 | 6,527 | 83.90 | 2/24/2032 | 5,385(3) | 520,460 | 8,743(10) | 845,011 | | | — | 6,447 | 94.86 | 2/16/2033 | | | | | | Jonathan M. Grandon | 12,747 | — | 42.20 | 2/23/2027 | 5,439(4) | 525,679 | 7,626(11) | 737,053 | | | 14,458 | — | 40.25 | 2/22/2028 | | | | | | | 11,147 | — | 55.16 | 2/21/2029 | | | | | | | 11,644 | — | 59.71 | 2/20/2030 | | | | | | | 5,959 | 2,981 | 73.14 | 2/18/2031 | | | | | | | 2,034 | 4,070 | 83.90 | 2/24/2032 | | | | | | | — | 4,274 | 94.86 | 2/16/2033 | | | | | | DeLancey W. Davis | — | 2,889 | 73.14 | 2/18/2031 | 5,169(5) | 499,584 | 7,242(12) | 699,939 | | | 1,880 | 3,763 | 83.90 | 2/24/2032 | | | | | | | — | 4,093 | 94.86 | 2/16/2033 | | | | | | Jay J. Walsh | 1,634 | — | 42.20 | 2/23/2027 | 4,287(6) | 414,339 | 5,937(13) | 573,811 | | | 2,151 | — | 40.25 | 2/22/2028 | | | | | | | 2,755 | — | 55.16 | 2/21/2029 | | | | | | | 7,550 | — | 59.71 | 2/20/2030 | | | | | | | 4,914 | 2,459 | 73.14 | 2/18/2031 | | | | | | | 1,602 | 3,206 | 83.90 | 2/24/2032 | | | | | | | — | 3,169 | 94.86 | 2/16/2033 | | | | | | Donald P. Kenney | 17,546 | — | 40.25 | 7/31/2026 | — | — | 6,167(14) | 596,041 | | | 16,015 | — | 55.16 | 7/31/2026 | | | | | | | 20,473 | — | 59.71 | 7/31/2026 | | | | | | | 16,129 | — | 73.14 | 7/31/2026 | | | | | | | 10,480 | — | 83.90 | 7/31/2026 | | | | | | | 6,882 | — | 94.86 | 7/31/2026 | | | | |

  44. 2023 Outstanding Equity Awards at Fiscal Year-End Table

    (1)Each option grant has a ten-year term and vests pro-rata over three or four years beginning on the first anniversary of the grant date. Vesting is accelerated upon death, disability, retirement or a change in control of the Company. Exercise prices are determined using the closing price of the Company’s Common Stock on the date of grant. (2)Of Mr. Sengstack's restricted awards, 11,069 shares vest after three years on February 16, 2026, 14,303 shares vest after three years on February 24, 2025, and 13,946 shares vest after three years on February 18, 2024. (3)Of Mr. Taylor's restricted awards, 2,346 shares vest after three years on February 16, 2026 and 3,039 shares vest after three years on February 24, 2025. (4)Of Mr. Grandon's restricted awards, 1,555 shares vest after three years on February 16, 2026, 1,895 shares vest after three years on February 24, 2025, and 1,989 shares vest after three years on February 18, 2024. (5)Of Mr. Davis's restricted awards, 1,489 shares vest after three years on February 16, 2026, 1,752 shares vest after three years on February 24, 2025, and 1,928 shares vest after three years on February 18, 2024. (6)Of Mr. Walsh's restricted awards, 1,153 shares vest after three years on February 16, 2026, 1,493 shares vest after three years on February 24, 2025, and 1,641 shares vest after three years of February 18, 2024. (7)The market value of the stock and stock unit awards was determined using the closing price of the Company’s common stock on December 31, 2023 ($96.65 per share). (8)Of Mr. Sengstack’s target performance share awards, 22,138 will vest at the end of the performance period that ends on December 31, 2025 and 19,070 will vest at the end of the performance period that ends on December 31, 2024. (9)Of Mr. Taylor’s target performance share awards, 4,691 will vest at the end of the performance period that ends on December 31, 2025 and 4,052 will vest at the end of the performance period that ends on December 31, 2024. (10)Of Mr. Grandon's target performance share awards, 3,110 will vest at the end of the performance period that ends on December 31, 2025 and 2,527 will vest at the end of the performance period that ends on December 31, 2024. (11)Of Mr. Davis's target performance share awards, 2,978 will vest at the end of the performance period that ends on December 31, 2025 and 2,336 will vest at the end of the performance period that ends on December 31, 2024. (12)Of Mr. Walsh's target performance share awards, 2,306 will vest at the end of the performance period that ends on December 31, 2025 and 1,990 will vest at the end of the performance period that ends on December 31, 2024. (13)Of Mr. Kenney's target performance share awards, 859 will vest at the end of the performance period that ends on December 31, 2025 and 2,231 will vest at the end of the performance period that ends on December 31, 2024.

  45. 2023 Option Exercises and Stock Vested Table

    2023 Option Exercises and Stock Vested Table The following table sets forth the exercised options and vested awards for the fiscal year ended December 31, 2023.

  46. 2023 Option Exercises and Stock Vested Table

    | Name | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#)(2) | Value Realized on Vesting ($)(3) | | Gregg C. Sengstack | 66,144 | 4,159,293 | 44,472 | 4,294,074 | | Jeffery L. Taylor | — | — | 3,750 | 372,638 | | Jonathan M. Grandon | — | — | 6,264 | 604,844 | | DeLancey W. Davis | 9,487 | 248,415 | 6,042 | 583,413 | | Jay J. Walsh | — | — | 4,764 | 460,070 | | Donald P. Kenney | 27,684 | 1,746,657 | 15,074 | 1,466,533 |

  47. 2023 Option Exercises and Stock Vested Table

    (1)Represents the difference between the closing price of the stock on the date of exercise and the exercise price, multiplied by the number of shares covered by the options. (2)Includes shares based on estimated release of performance share units earned in 2023 as follows: Mr. Sengstack, 27,892; Mr. Grandon, 3,978; Mr. Davis, 3,856; Mr. Walsh, 3,282; and Mr. Kenney, 6,154. See the "Compensation Discussion & Analysis" section for further information. (3)Represents the value realized by multiplying the closing price of the stock on the date of vesting by the number of shares that vested. Includes vesting of restricted stock/units granted in 2020 and performance share awards granted in 2021. See the "Compensation Discussion & Analysis" section for a discussion of this vesting.

  48. Pay Ratio Disclosure

    Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, the Company is providing the following information about the relationship of the median of the annual total compensation of Company employees and the annual total compensation of Mr. Sengstack: In 2021, the Company identified its median employee, who is an administrative employee employed in the Company’s manufacturing facility in South Africa. The median employee’s compensation and employment circumstances have not materially changed relative to 2021 and the Company has not experienced significant changes in its employee population or compensation practices that would result in a material change to this pay ratio disclosure. Therefore, the Company believes the previously identified median employee for 2021 remains appropriate for 2023 and is disclosing the updated calculation of the total compensation earned by that median employee for 2023. For 2023, the median of the annual total compensation of all employees of the Company (other than Mr. Sengstack), was $26,254 and the annual total compensation of Mr. Sengstack was $7,401,610. The median employee’s base compensation and benefits were converted from South African Rand to United States Dollars using the exchange rate in effect on December 31, 2023. Based on this information, for 2023 the ratio of the median of the annual total compensation of all employees to the annual total compensation of Mr. Sengstack was 1 to 282. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of SEC Regulation S-K. To determine the median of the annual compensation of all employees, to identify the median employee and to determine the annual total compensation of the median employee and Mr. Sengstack, the Company used the following material assumptions, adjustments, and estimates: •As of December 31, 2020, the Company’s employee population consisted of approximately 5,116 individuals working at the Company and its wholly-owned subsidiaries. This population consisted of full-time, part-time, and temporary employees. •As permitted under SEC rules, the employee population was adjusted to exclude 189 non-U.S. employees (or approximately 3.7 percent of the employee population) working in India. The Company excluded these employees because the complex compensation structure for employees in India, which includes a number of social and economic benefits commonly provided to such employees, is not easily comparable to that of employees in other jurisdictions. Additionally, 505 employees (or approximately 9.9 percent of the employee population) who were hired during 2020, but who were not employed for a full year, were excluded. Based on the exclusion of these employees, the adjusted employee population was 4,422 employees. •Each employee’s base salary was determined using fiscal year 2020 payroll records and the median employee was identified from the adjusted employee population based on these records. In accordance with the SEC rules, the median employee’s annual total compensation for 2023 was calculated as follows: $26,254, which represents the amount of such employee’s compensation for fiscal year 2023 that would have been reported in the Summary Compensation Table in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K if the employee was a named executive officer for 2023. In accordance with the SEC rules, the annual total compensation of Mr. Sengstack is equal to $7,401,610, which represents the amount reported in the “Total” column of the Summary Compensation Table beginning on page 31.

  49. Pay versus Performance

    Pay versus Performance As required by Item 402(v) of Regulation S-K, the Company is providing the following information about the relationship between executive compensation actually paid and the Company’s financial performance for each of the last four completed fiscal years. In determining the “compensation actually paid” to named executive officers (“NEOs”), the Company is required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table in each such previous year, as the valuation methods for this disclosure under Item 402(v) differ from those required in reporting the compensation information in the Summary Compensation Table. For NEOs other than the principal executive officer (the “PEO”), compensation is reported as an average.

  50. Pay versus Performance

    | Year | Summary Compensation Table Total for PEO ($)(1) | Compensation Actually Paid to PEO ($)(1)(3)(5) | Average Summary Compensation Table Total for Non-PEO NEOs ($)(2) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2)(4)(5) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($)(7) | Adjusted EPS ($/sh)(8) | | | | | | | Total Stockholder Return ($) | Peer Group Total Stockholder Return ($)(6) | | | | 2023 | 7,401,610 | 9,293,165 | 1,421,534 | 1,631,420 | 175 | 156 | 193,272,000 | 4.13 | | 2022 | 6,700,247 | 4,504,643 | 1,711,922 | 1,428,875 | 143 | 132 | 187,332,000 | 4.00 | | 2021 | 6,896,933 | 14,635,531 | 1,656,125 | 2,850,173 | 168 | 139 | 153,860,000 | 3.14 | | 2020 | 5,953,917 | 8,684,141 | 1,476,632 | 2,139,130 | 122 | 115 | 100,460,000 | 2.20 |

  51. Pay versus Performance

    (1)Gregg C. Sengstack is the PEO for each year presented. (2)The Non-PEO NEOs for each year presented are: 2023 - Jeffery L. Taylor, Jonathan M. Grandon, DeLancey W. Davis, Jay J. Walsh, and Donald P. Kenney 2022 - Jeffery L. Taylor, Donald P. Kenney, DeLancey W. Davis, and Jay J. Walsh 2021 - John J. Haines, Jeffery L. Taylor, Donald P. Kenney, DeLancey W. Davis, and Jonathan M. Grandon 2020 - John J. Haines, Donald P. Kenney, DeLancey W. Davis, and Jonathan M. Grandon (3)The table below presents adjustments to the summary compensation table total to reflect the compensation actually paid to the PEO for 2023, 2022, 2021, and 2020.

  52. Pay versus Performance

    | | 2023 | 2022 | 2021 | 2020 | | Summary Compensation Table Total for PEO | $7,401,610 | $6,700,247 | $6,896,933 | $5,953,917 | | Less: Grant Date Fair Value of Equity Awards and Change in Pension Value Reported in the Summary Compensation Table | (5,566,476) | (4,557,850) | (4,431,383) | (4,175,317) | | Add: Actuarially Determined Service Cost for Services Rendered During the Fiscal Year and Change in Pension Value Attributable to Plan Amendments Made in the Current Year | 397,761 | 371,687 | 287,737 | 247,704 | | Add: Year-End Fair Value of Awards Granted in the Current Year | 3,730,241 | 3,600,652 | 5,479,618 | 4,239,112 | | Add: Change in Fair Value from Prior Year-End to Vesting Date of Equity Awards Granted in Prior Years that Vested in the Current Year | 1,443,501 | (1,253,153) | 878,040 | (184,789) | | Add: Change in Fair Value from Prior Year-End to Current Year-End of Outstanding and Unvested Equity Awards Granted in Prior Years | 1,794,718 | (474,620) | 5,424,642 | 2,523,911 | | Less: Fair Value at the End of the Prior Year of Equity Awards that were Forfeited in the Current Year | — | — | — | — | | Add: Value of Dividends or Other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | 91,810 | 117,680 | 99,944 | 79,603 | | Compensation Actually Paid for PEO | $9,293,165 | $4,504,643 | $14,635,531 | $8,684,141 |

  53. Pay versus Performance

    (4)The table below presents adjustments to the average summary compensation table total to reflect the average compensation actually paid to the Non-PEO NEOs for 2023, 2022, 2021, and 2020.

  54. Pay versus Performance

    | | 2023 | 2022 | 2021 | 2020 | | Average of Summary Compensation Table Total for Non-PEO NEOs | $1,421,534 | $1,711,922 | $1,656,125 | $1,476,632 | | Less: Grant Date Fair Value of Equity Awards and Change in Pension Value Reported in the Summary Compensation Table | (686,499) | (666,842) | (686,414) | (687,834) | | Add: Actuarially Determined Service Cost for Services Rendered During the Fiscal Year and Change in Pension Value Attributable to Plan Amendments Made in the Current Year | — | — | — | — | | Add: Year-End Fair Value of Awards Granted in the Current Year | 512,427 | 600,271 | 923,429 | 863,867 | | Add: Change in Fair Value from Prior Year-End to Vesting Date of Equity Awards Granted in Prior Years that Vested in the Current Year | 248,948 | (160,773) | 318,544 | (28,487) | | Add: Change in Fair Value from Prior Year-End to Current Year-End of Outstanding and Unvested Equity Awards Granted in Prior Years | 204,660 | (71,623) | 678,613 | 498,417 | | Less: Fair Value at the End of the Prior Year of Equity Awards that were Forfeited in the Current Year | (82,029) | — | (56,683) | — | | Add: Value of Dividends or Other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | 12,379 | 15,920 | 16,559 | 16,535 | | Average Compensation Actually Paid for Non-PEO NEOs | $1,631,420 | $1,428,875 | $2,850,173 | $2,139,130 |

  55. Pay versus Performance

    (5)The fair values of unvested and outstanding equity awards were remeasured as of the end of each fiscal year and as of each vesting date during the years presented in the compensation actually paid calculation. For performance share units, fair values reflect the probable outcome of the performance vesting conditions as of each measurement date. For stock options, fair values use the Black-Scholes valuation method with an expected life assumption that uses the midpoint of the remaining contractual term and time until vesting as of each valuation date. The other Black-Scholes valuation criteria remained consistent with the criteria used at the grant of the options. (6)The peer group consists of the proxy disclosed peer group listed in the "Compensation Discussion and Analysis" section of this Proxy Statement. (7)Net Income refers to "Net Income attributable to Franklin Electric Co., Inc." as reported in the Company's Annual Report on Form 10-K in Item 8. Financial Statements and Supplementary Data. (8)In 2023 and 2022, restructuring expense was excluded in calculating Adjusted EPS, which decreased GAAP EPS by $0.02 and $0.03. In 2021, restructuring expense and the non-operational impact of the bargain purchase gains recognized in the fourth quarter of 2020 and second quarter 2021 acquisitions were excluded in calculating adjusted EPS, which increased GAAP EPS by $0.11. In 2020, restructuring expense and the non-operational income statement impact of the December 31, 2020 acquisition were excluded in calculating adjusted EPS, which decreased GAAP EPS by $0.06. As illustrated in the tables on the previous page and the charts below, the compensation actually paid (calculated as required under SEC rules) for the Company’s named executive officers over the past four fiscal years has directionally aligned with the Company’s Total Stockholder Return (“TSR”), Net Income, and Adjusted Earnings Per Share (“EPS”), the Company-selected financial performance metric. The Company believes the compensation actually paid in each of the years reported above and over the four-year cumulative period are reflective of the Compensation Committee’s emphasis on pay-for-performance as the compensation actually paid fluctuated year-over-year, primarily due to the result of the Company’s stock performance and varying levels of achievement against pre-established performance goals under the Company’s annual and long-term incentive programs. The chart below shows the relationship between compensation actually paid to the PEO and the average of the compensation actually paid to the other NEOs and the Company’s net income over the four fiscal years ending December 31, 2023. The SEC requires companies to compare compensation actually paid to the PEO and other NEOs and net income. However, the Company does not link NEO compensation to net income performance. The chart below shows the relationship between compensation actually paid to the PEO and the average of compensation actually paid to the other NEOs and the Company’s cumulative TSR over four fiscal years ending December 31, 2023. The SEC requires companies to compare compensation actually paid to the PEO and other NEOs and the Company’s cumulative TSR. However, the Company does not link NEO compensation to the Company’s cumulative TSR. The chart below shows the relationship between compensation actually paid to the PEO and the average of the compensation actually paid to the other NEOs and Adjusted EPS over four fiscal years ending December 31, 2023. The chart below compares the Company’s cumulative TSR to the cumulative TSR of the Company’s Peer Group over the four fiscal years ending December 31, 2023. The financial performance measures listed below represent the most important metrics the Company used to link compensation actually paid to the PEO and other NEOs to Company performance for the most recently completed fiscal year.

  56. Pay versus Performance

    | Financial Performance Measure | Relationship to Pay | | Adjusted EPS | Annual Incentive Plan | | Adjusted Operating Income | Annual Incentive Plan | | Working Capital | Annual Incentive Plan | | Normalized EBITDA | Long-term Incentive Plan |

  57. 2023 Pension Benefits Table

    2023 Pension Benefits Table The following table sets forth (i) the years of service currently credited to each named executive officer under the Company’s pension plans and (ii) the present value of the accumulated benefit payable under each pension plan to each of the named executive officers upon retirement.

  58. 2023 Pension Benefits Table

    | Named Executive Officer | Plan Name(1) | Number of Years of Credited Service # | Present Value of Accumulated Benefit ($)(2)(3)(4) | Payments During Last Fiscal Year ($) | | Gregg C. Sengstack | Basic Retirement Portion Cash Balance Portion Pension Restoration Plan | 28.0 23.1 35.1 | 102,539 690,557 11,898,114 | — — — | | Jeffery L. Taylor | N/A | N/A | N/A | N/A | | Jonathan M. Grandon | N/A | N/A | N/A | N/A | | DeLancey W. Davis | Basic Retirement Portion Cash Balance Portion | 6.6 7.0 | 18,070 97,749 | — — | | Jay J. Walsh | Basic Retirement Portion Cash Balance Portion | 16.9 12.0 | 38,980 143,350 | — — | | Donald P. Kenney | Basic Retirement Portion Cash Balance Portion | 25.5 20.8 | 87,817 475,593 | — — |

  59. 2023 Pension Benefits Table

    (1)As of December 31, 2011, the Basic Retirement Plan and Cash Balance Pension Plan were merged and renamed the Pension Plan. (2)As of December 31, 2011, the named executive officers stopped accruing benefits under all plans except for Mr. Sengstack, who continues to accrue benefits under the Basic Retirement portion of the Pension Plan and the Pension Restoration Plan. (3)The amounts in this column are based on a retirement age of 65 for Messrs. Davis, Walsh, and Kenney. For Mr. Sengstack, retirement age is 65.5 for the Basic Retirement portion of the Pension Plan and the Pension Restoration Plan, and age 65.5 for the Cash Balance portion of the Pension Plan. (4)Messrs. Taylor and Grandon are ineligible for the Basic Retirement Portion, Cash Balance Portion, and the Pension Restoration Plan. Pension Plan In 2011, the Company implemented a redesign of its retirement program. Its two tax-qualified defined benefit pension plans, the Basic Retirement Plan and the Cash Balance Pension Plan, were merged into a single plan called the Pension Plan. As discussed below, as of December 31, 2011, benefit accruals under the Basic Retirement portion of the Pension Plan ceased for all participants younger than age 50 and benefit accruals under the Cash Balance portion of the Pension Plan ceased for all participants. In addition, benefits under the non-qualified Pension Restoration Plan ceased for all participants other than Mr. Sengstack. Participants will instead receive additional benefits under the Company’s defined contribution plans (see the discussion in the Compensation Discussion and Analysis and in the 2023 Nonqualified Deferred Compensation Table and narrative in this Proxy Statement). Basic Retirement Plan The Basic Retirement portion of the Pension Plan covers most U.S. employees of the Company and its affiliates, including the named executive officers, who were hired before February 21, 2006. The Basic Retirement Plan provides each eligible named executive officer with a monthly single life annuity commencing at normal retirement age (age 65) equal to the number of years of credited service times $25. Participants are eligible to receive benefits after completing five years of vesting service. Participants who terminate employment after age 55 with 10 years of vesting service are eligible to receive early retirement benefits that are reduced to reflect commencement prior to age 65. Participants who terminate employment on or after age 62 with 25 years of vesting service are eligible to receive early retirement benefits that are unreduced for commencement prior to age 65. Participants with five years of vesting service who terminate employment and are not eligible to receive early retirement benefits are eligible for benefits commencing at age 65. Mr. Sengstack is currently eligible for retirement benefits. Mr. Taylor and Grandon are not eligible to participate in the Basic Retirement Plan because he was hired after February 21, 2006. The benefit formula calculates the benefit payable in a single life annuity form, which is the normal form of benefit for unmarried participants. The normal form of benefit payment for married participants is a 50 percent joint and survivor annuity. Participants, with spousal consent, if applicable, can waive the normal form and elect to have benefits paid in various annuity forms, which are the actuarially equivalent of the single life annuity form. The Basic Retirement Plan was amended in 2011 to provide that participants younger than age 50 as of December 31, 2011 (which includes Messrs. Davis and Walsh) stopped earning benefits as of such date, and participants 50 or older as of December 31, 2011 (which includes Messrs. Sengstack and Kenney) stopped earning benefits on December 31, 2016 (or if earlier, their termination of employment). Cash Balance Pension Plan The Cash Balance portion of the Pension Plan is a tax-qualified pension plan that covers most U.S. employees of the Company and its affiliates who are classified as "exempt" and who are not covered by a collective bargaining agreement, which includes each named executive officer. As of December 31, 2011, the Cash Balance Pension Plan was closed to new participants and all participants stopped accruing further benefits. An account is maintained for each participant under the Cash Balance Pension Plan, which consists of (i) an opening account balance equal to the then present value of the participant's accrued benefit, if any, earned as of December 31, 1999 under one of the Company's prior pension plans; (ii) annual contributions made by the Company as of the end of each calendar year through 2011 that ranged from 3 percent to 12 percent of the participant's compensation (based on the participant's credited service); (iii) annual transitional credits made by the Company from 2000-2004 equal to 6 percent of compensation of each participant whose age and years of vesting service as of December 31, 1999 totaled 45 or more; and (iv) until distribution of the account, annual interest credits made by the Company as of the end of each calendar year, based on the 30-year Treasury security rate for the November preceding each such year (subject to a minimum interest rate of 4.5 percent). Compensation included wages subject to withholding, excluding income recognized in connection with the Company's stock based plans, reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation, and welfare benefits (as limited by applicable Internal Revenue Code limits). Participants are eligible to receive benefits after completing three years of service. They can elect to receive their benefits upon termination of employment or they can defer receipt of benefits until age 65. Any accounts remaining in the Cash Balance Plan will continue to be credited with interest until the account is paid. The normal form of benefit payment for unmarried participants is a single life annuity, and the normal form of benefit payment for married participants is a 50 percent joint and survivor annuity. Participants, with spousal consent, if applicable, can waive the normal form and elect to have benefits paid in various annuity forms, which are the actuarially equivalent of the normal form, or in a lump sum. Pension Restoration Plan The Pension Restoration Plan is an unfunded, non-qualified pension plan that is intended to provide an employee with the portion of his benefits that cannot be paid under the Pension Plan or the Contributory Retirement Plan (the predecessor to the Cash Balance portion of the Pension Plan) due to Internal Revenue Code limitations on the amount of compensation that can be taken into account in determining benefits under, and the amount of benefits that can be paid from, tax-qualified pension plans. The benefits of Mr. Sengstack are based on the formula in effect under the Contributory Retirement Plan on December 31, 1999, but without regard to the Internal Revenue Code limits. This formula is based on the employee's credited service and final three-year average compensation, with an offset for benefits provided by the Basic Retirement portion of the Pension Plan, the Cash Balance portion of the Pension Plan and Social Security. There is a minimum benefit whereby if the monthly benefit amount paid to the employee under the Pension Plan, Pension Restoration Plan and Social Security is less than a designated percentage of the employee's three-year final average compensation, the difference is paid from the Pension Restoration Plan. The current designated percentage (which is based on years of service at retirement) for Mr. Sengstack is 50 percent (assuming retirement at age 65.5).

  60. 2023 Pension Benefits Table

    The benefits of Mr. Davis was determined by applying the formula in the Cash Balance portion of the Pension Plan for all eligible compensation (including compensation in excess of the Code limits), offset for the benefits provided by the Cash Balance portion of the Pension Plan. All participants other than Mr. Sengstack stopped earning benefits as of December 31, 2011 and instead participate in the Supplemental Retirement and Deferred Compensation Plan, under which they receive additional Company contributions. The value of their frozen benefit under the Pension Restoration Plan was transferred to the Supplemental Retirement and Deferred Compensation Plan as of January 1, 2012. The benefit accrued under the Pension Restoration Plan is paid upon termination of employment as follows: (i) if the lump sum value is less than $1,000,000, it will be paid in a lump sum within 90 days following termination; (ii) if the lump sum value is more than $1,000,000 but less than $2,000,000, one-half of the benefit will be paid within 90 days following termination, the remaining benefit will be paid as a single life annuity over the first 12 months following termination, and the benefit remaining at the end of the 12-month period will be paid in a lump sum on the first anniversary of termination; (iii) if the lump sum value is $2,000,000 or more, one-third will be paid within 90 days following termination, the remaining benefit will be paid as a single life annuity over the first 12 months following termination, one-half of the benefit remaining at the end of the 12-month period will be paid in a lump sum on the first anniversary of termination, the remaining benefit will be paid as a single life annuity over the second 12-month period following termination and the benefit remaining at the end of the second 12-month period will be paid in a lump sum on the second anniversary of termination. If the participant is deemed to be a “key employee” as defined in Section 409A of the Internal Revenue Code, any distribution that is payable due to termination of employment will be delayed for six months following the date of such termination. Notwithstanding the foregoing, upon a change in control of the Company, all participants become fully vested in their benefits, all benefits will be paid in a lump sum within 60 days after the change in control and active participants will have three years of additional age and service credits in determining benefits. Pension Plan Assumptions The assumptions used in calculating the present value of the accumulated pension benefits are set forth in Note 7 of the audited financial statements contained in the Company's Annual Report to Shareholders for the year ended December 31, 2023. The Company does not grant additional years of credited service under its pension plans.

  61. 2023 Nonqualified Deferred Compensation

    2023 Nonqualified Deferred Compensation The following table sets forth (i) the contributions made by each named executive officer and the Company in fiscal 2023, (ii) the earnings on the account balances as of December 31, 2023 and (iii) the account balances as of December 31, 2023 under the Company’s Supplemental Retirement and Deferred Compensation Plan.

  62. 2023 Nonqualified Deferred Compensation

    | Name | Executive Contribution in Last Fiscal Year ($)(1) | Company Contribution in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(4)(5) | | Gregg C. Sengstack | — | — | 221,126 | — | 1,062,575 | | Jeffery L. Taylor | 222,020 | 37,003 | 20,680 | — | 316,510 | | Jonathan M. Grandon | — | 39,949 | 23,250 | — | 208,676 | | DeLancey W. Davis | — | 78,575 | 21,569 | — | 671,240 | | Jay J. Walsh | — | 82,523 | 13,050 | — | 902,330 | | Donald P. Kenney | — | 85,621 | 23,010 | — | 731,272 |

  63. 2023 Nonqualified Deferred Compensation

    (1)This amount is reported in the "Salary" of the Summary Compensation table in this Proxy Statement. For Mr. Taylor, a portion of this amount is reported in the prior year "Non-Equity Incentive Plan Compensation" column of the Summary Compensation table in this Proxy Statement. (2)The Company contributions are reflected in the "All Other Compensation" column of the Summary Compensation table of this Proxy Statement. (3)The earnings reported in this column are not included in the Summary Compensation table. (4)The aggregate balance reflects amounts previously reported in the Summary Compensation table except for the following earnings: Mr. Sengstack: $714,746; Mr. Taylor: $20,918; Mr Grandon: $26,020; Mr. Davis: $97,837; Mr. Walsh: $15,276; and Mr. Kenney: $76,173. (5)For Mr. Davis, the aggregate balances also include the cash balance accounts under the Pension Restoration Plan that were transferred to this Plan as of January 1, 2012: Mr. Davis: $34,477. The Supplemental Retirement and Deferred Compensation Plan permits executive officers of the Company to elect each year to defer up to 90 percent of their bonus awards and up to 50 percent of their salary. Deferred amounts are credited to a notional account maintained on behalf of the participant, which is adjusted for earnings and losses based on investment funds made available by the Management Organization and Compensation Committee. Beginning in 2012, the Company provides two types of contributions to participants who do not continue to accrue benefits under the Pension Restoration Plan. The Company provides the portion of the service-based contribution that could not be made under the Retirement Program due to IRS limitations (the service-based contribution ranges from 3 percent to 9 percent of a participant’s compensation depending on years of service). The Company also provides a supplemental contribution of 2 percent to 4 percent of a participant’s total compensation depending on years of service. In addition, participants who stopped accruing benefits under the Pension Restoration Plan had their benefit transferred to the Supplemental Retirement and Deferred Compensation Plan as of January 1, 2012. A participant’s deferral account, service contribution account and transferred Pension Restoration Plan account will be credited with earnings and losses based on the investment funds made available by the Management Organization and Compensation Committee. Earnings on the supplemental contribution account will follow the methodology used in the now-frozen Cash Balance portion of the Pension Plan, which credits earnings based on the 30-year Treasury rate but not less than 4.5 percent. A participant’s accounts under the Supplemental Retirement and Deferred Compensation Plan will generally be distributed to him as soon as practicable after the first of the month following termination of employment (provided that distribution to a “key employee” as defined in Section 409A of the Internal Revenue Code will be deferred for six months). Mr. Taylor is the only Named Executive Officer who contributed to the Supplemental Retirement and Deferred Compensation Plan in 2023, although Messrs. Grandon, Davis, Walsh, and Kenney received Company contributions.

  64. Potential Payments upon Termination or Change in Control of the Company

    Potential Payments upon Termination or Change in Control of the Company The Company provides benefits to certain of the named executive officers upon certain terminations of employment from the Company. These benefits are in addition to the benefits to which the executives would be entitled upon a termination of employment generally (i.e., vested retirement benefits accrued as of the date of termination, stock-based awards that are vested as of the date of termination and the right to elect continued health coverage pursuant to COBRA). The incremental benefits payable to the executives are described as follows: Employment Agreement The employment agreement of Mr. Sengstack has a three-year term that automatically renews for an additional year unless either party provides advance written notice of an election not to extend the term. The agreement provides the following severance benefits under the described termination scenarios: •Termination – Nonrenewal of Employment Agreement. If the executive terminates his employment at any time during the term of the agreement after receipt of notice from the Company of its decision to not extend the term, he is entitled to (i) a later payment of a pro-rata portion of the bonus payable for the year of termination), (ii) an immediate payment equal to 12 months of his then current salary and one times the target bonus for the year of termination, (iii) immediate vesting of all outstanding stock options, immediate pro-rata vesting of time-based restricted stock and units, and pro-rata vesting of performance-based restricted stock and units at the end of the performance period based on actual performance, (iv) continued participation in the Company’s health and welfare plans for 12 months, and (v) a lump sum payment equal to the benefits that would have accrued under the Company's retirement plans for 12 months. •Termination – Prior to a Change in Control. If a Change in Control of the Company (as defined in the agreements) has not occurred and the executive’s employment is terminated by the Company for other than “Good Cause” or the executive terminates his employment for “Good Reason,” he is entitled to (i) a later payment of a pro-rata portion of the bonus payable for the year of termination, (ii) an immediate payment equal to 18 months of his then current salary and one and one-half times the target bonus for the year of termination, (iii) immediate vesting of all outstanding stock options, immediate pro-rata vesting of time-based restricted stock and units and pro-rata vesting of performance-based restricted stock and units at the end of the performance period based on actual performance, (iv) continued participation in the Company’s health and welfare plans for the applicable severance period, and (v) a lump sum payment equal to the benefits that would have been earned under the Company's retirement plans during the applicable severance period. •Termination – Following a Change in Control. If following a Change in Control of the Company (as defined in the agreements) the executive’s employment is terminated within two years of the Change in Control by the Company for other than “Good Cause” or by the executive for “Good Reason”, he is entitled to an immediate payment equal to (i) a pro-rata portion of the target bonus paid for the year of termination, (ii) an immediate payment equal to 36 months of his then current salary and three times the target bonus for the year of termination, (iii) immediate vesting and cash out of all outstanding stock options and immediate vesting of all other restricted stock and units (with performance-based awards vesting at target level), (iv) continued participation in the Company’s health and welfare plans for the applicable severance period, and (v) a lump sum payment equal to the benefits that would have accrued under the Company's retirement plans (other than the Pension Restoration Plan) during the applicable service period. With respect to any excise tax, the executive can elect to either (i) receive the full amount of severance benefits and be responsible for paying any excise tax or (ii) receive severance benefits that are reduced to the maximum amount that can be paid without triggering the excise tax. The employment agreement contains a restrictive covenant that prohibits the executive from competing with the Company and soliciting the Company's customers and employees for 24 months following termination. The agreement provides that an amount of severance equal to one times salary and one times the prior year's bonus serves as consideration for this restrictive covenant as well as the separate confidentiality and non-compete agreement the executive has executed. For purposes of the employment agreement: •“Good Cause” means the executive’s death or disability, his fraud, misappropriation of, or intentional material damage to the property or business of the Company, his commission of a felony likely to result in material harm or injury to the Company, or his willful and continued material failure to perform his obligations. •“Good Reason” exists if (a) there is a change in the executive’s title or a significant change in the nature or the scope of his authority, (b) there is a reduction in the executive’s salary or retirement benefits or a material reduction in the executive’s compensation and benefits in the aggregate, (c) the Company changes the principal location in which the executive is required to perform services to more than fifty miles away, (d) the executive reasonably determines that, as a result of a change in circumstances significantly affecting his position, he is unable to exercise the authority or duties attached to his positions, or (e) any purchaser of substantially all of the assets of the Company declines to assume the obligations under the employment agreement. Employment Security Agreements Certain executives, including Messrs. Taylor, Grandon, Davis, and Walsh are parties to employment security agreements ("ESA") with the Company that provide benefits upon a Change in Control (as defined in the ESA). Each ESA provides that if within two years after a Change in Control the Company terminates the executive’s employment for any reason other than “Good Cause”, or the executive terminates his employment with the Company for “Good Reason” (as defined in the ESA), the executive is entitled to the following: •a lump sum payment equal to the sum of two times the executive’s base salary, a pro-rata portion of the executive’s target bonus for the current year (based on the termination date), and two times the executive’s target bonus for the current year; •a lump sum payment equal to the increase in benefits under the Company’s tax-qualified and supplemental retirement plans that results from crediting the executive with additional service for 24 months; •immediate vesting of all stock-based awards and deemed satisfaction of all performance-based awards at target level; •continued coverage under the Company’s health and welfare plans for 24 months following termination; •12 months of executive outplacement services (not to exceed $50,000) with a professional outplacement firm selected by the Company; and •with respect to any excise tax, each executive can elect to either receive the full amount of severance benefits and be responsible for paying any excise tax, or receive severance benefits that are reduced to the maximum amount that can be paid without triggering the excise tax. For purposes of the ESAs: •“Good Cause” means the executive’s intentional and material misappropriation of, or damage to, the property or business of the Company, his conviction of a criminal violation involving fraud or dishonesty or of a felony that causes material harm or injury to the Company, or his willful and continuous failure to perform his obligations under the ESA that is not cured.

  65. Potential Payments upon Termination or Change in Control of the Company

    •“Good Reason” means a material reduction in the executive’s salary or retirement benefits or a material reduction in his compensation and benefits in the aggregate, or any purchaser of substantially all of the assets of the Company declines to assume all of the Company’s obligations under the ESA. The ESAs contain a restrictive covenant that prohibits the executive from soliciting employees of the Company for 18 months following termination. The agreements provide that an amount of severance equal to one times salary and one times the prior year’s bonus serves as consideration for this restrictive covenant as well as the separate confidentiality and non-compete agreement each executive has executed. Executive Non-CIC Severance Plan Certain executives, including Messrs. Taylor, Grandon, Davis, and Walsh are parties to the Executive Severance Policy, which provides non-CIC severance for executives if not already stated in the executive's employment agreement. Under the policy, if the executive’s employment is terminated by the Company without cause and prior to a change in control (as defined in the ESA), the executive is entitled to the following payments and benefits: •A lump sum payment equal to the one and one-half times the sum of the annual base pay plus target bonus in the case of the Chief Executive Officer, and one times annual base pay plus target bonus for all other Executive Officers; •A lump sum payment equal to a pro-rata portion of the Executive Officer’s annual bonus in effect on the employment termination date, based on the level of achievement of the Company’s performance goals, as approved by the Management Organization and Compensation Committee of the Board for the year in which the Executive’s termination of employment occurs; •Accelerated vesting of stock-based awards not otherwise eligible for accelerated vesting under the terms of an applicable stock award agreement, and the removal of all restrictions on time-based awards of restricted stock or restricted stock units; and •Accelerated vesting of any performance-based stock awards or units; and •Payment of COBRA premiums until the eighteen-month anniversary, in the case of the Chief Executive Officer, or the one-year anniversary, in the case of all other Executive Officers, of the termination date. The Pension Restoration Plan, in which Mr. Sengstack participates, provides that upon a Change in Control of the Company (as defined in the Pension Restoration Plan), (i) all participants will become 100 percent vested in their benefits, which will be paid in an immediate lump sum within 60 days and (ii) active participants will have three years of additional credit for age and service in determining their benefits under the Pension Restoration Plan. Stock Plan Awards under the Company's stock plans fully vest, and performance measures are deemed met at the target level, upon a Change in Control (as defined in the applicable stock plan) of the Company. Stock Option Agreements provide for full vesting upon a termination of employment due to death, disability or retirement. Restricted Stock Agreements and the Restricted Stock Unit Agreements provide for pro-rata vesting upon termination of employment due to death, disability or retirement. Performance Share Unit Agreements provide for pro-rata vesting at the end of the performance period upon termination due to death, disability or retirement. The following tables quantify the additional benefits described on the previous pages that would be paid to each named executive officer, except for Mr. Kenney as he retired on July, 31, 2023, pursuant to the arrangements described above under the following termination scenarios: assuming a non-renewal of the employment agreement, termination of employment and/or change in control occurred on December 31, 2023.

  66. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION Compensation for non-employee directors is determined by the Board of Directors, upon recommendation of the Corporate Governance Committee. Management makes recommendations to the Corporate Governance Committee with respect to non-employee director compensation. The Management Organization and Compensation Committee, pursuant to the Company’s Stock Plan, makes the actual stock-based award. Director Compensation is determined by compiling the compensation data for each of the Peer Group companies listed in the Compensation Discussion and Analysis and comparing such compensation to the current pay for the Company’s directors. The following table sets forth the compensation received by the Company’s non-employee directors for the year ended December 31, 2023.

  67. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | All Other Compensation ($) | Total ($) | | Victor D. Grizzle | 96,000 | 130,000 | — | — | 226,000 | | Alok Maskara | 102,500 | 130,000 | — | — | 232,500 | | Renee J. Peterson | 103,500 | 130,000 | — | — | 233,500 | | Jennifer L. Sherman | 103,500 | 130,000 | — | — | 233,500 | | Thomas R. VerHage | 93,500 | 130,000 | — | — | 223,500 | | Chris Villavarayan | 93,500 | 130,000 | — | — | 223,500 | | David M. Wathen | 81,000 | 130,000 | — | — | 211,000 |

  68. DIRECTOR COMPENSATION

    (1)Fees deferred into the Non-Employee Directors’ Deferred Compensation Plan were: Mr. Grizzle $96,000, Ms. Peterson $103,500, Ms. Sherman $103,500, Mr. VerHage $93,500, and Mr. Villavarayan $93,500. (2)The amounts in this column are the grant date fair values of the stock awards granted to the non-employee directors, computed in accordance with FASB Codification Topic 718. Each director received an award of 1,388 shares, and Messrs. Grizzle, VerHage, and Villavarayan and Mses. Peterson and Sherman elected to defer their stock awards into the Non-Employee Directors’ Deferred Compensation Plan. (3)No options were granted to non-employee directors in 2023 and no non-employee director holds any outstanding options. Retainer and Fees Non-employee directors are paid an annual retainer of $75,000. The Audit Committee Chairperson receives an additional fee of $22,500 and Audit Committee members receive an additional fee of $12,500. The Governance Committee Chairperson and Compensation Committee Chairperson each receive an additional fee of $15,000, and members of each committee receive an additional fee of $6,000. The Lead Independent Director receives an additional fee of $22,500. Directors who are employees of the Company receive no additional compensation for serving on the Board or Board committees during their employment. Stock Awards On May 4, 2023, each non-employee director received an award of 1,388 shares of the Company’s common stock, which vested immediately upon grant and had a market value of $130,000 on the date of grant. Deferred Compensation Non-employee directors may participate in the Non-Employee Directors’ Deferred Compensation Plan (the “Deferred Compensation Plan”). Under the Deferred Compensation Plan, each non-employee director may elect to defer, for each calendar year, all or a portion of their annual retainer, fees or stock award. The non-employee director may elect to receive such deferred compensation in a lump sum payment or in equal monthly or annual installments beginning on a date of their choosing, provided such date is at least one year after the deferral election is made. At the time the director makes the deferral election, they must elect to have the deferred retainer and fees either (i) credited with interest on a monthly basis at the rate in effect for the Wells Fargo Stable Return fund or (ii) converted into stock units, with credits equal to the cash that would have been paid had the units been actual shares of common stock owned by the director. Deferred stock awards will also be converted into stock units and credited with dividends. Stock Ownership Guidelines The Company's stock ownership guidelines for the non-employee directors require them to maintain direct ownership in the Company’s common stock with a value equal to five times their annual retainer. An individual has five years to comply with these guidelines. All shares held directly or beneficially, including stock awards, shares acquired upon exercise of stock options and stock units credited under the Non-Employee Directors’ Compensation Plan, count toward these guidelines. Stock options do not count toward these guidelines. All non-employee directors either meet or exceed these guidelines or were within the applicable grace period to comply with such requirements.