DEF 14A of Linde PLC
Filed Apr 30, 2025 · FY20240000950170-25-060925
Compensation Highlights
Compensation Highlights Compensation Highlights Alignment of Executive Compensation Programs with Linde Business Objectives The Human Capital Committee seeks to achieve its executive compensation objectives by aligning the design of the Company’s executive compensation programs with the Company’s business objectives, ensuring a balance between financial and strategic non-financial goals. FINANCIAL BUSINESS OBJECTIVES: Achieve sustained growth in profitability and shareholder return resulting in a robust cash flow to fund capital investment growth opportunities, dividend payments, and share repurchases. • Annual performance-based variable compensation earned by meeting or exceeding pre-established financial goals. • Annual grants of performance share units (PSUs) that vest based upon performance results over three years. • Annual grants of stock options, the value of which is directly linked to the growth in the Company’s stock price. • Annual grants of restricted stock units (RSUs) with three-year cliff vesting and value based on the Company’s stock price. NON-FINANCIAL BUSINESS OBJECTIVES: Maintain world-class standards in safety, environmental responsibility, global compliance, strategic positioning, productivity, talent management, and financial controls. Achieve reduction in absolute GHG emissions. • Annual payout of variable compensation is impacted by performance in these strategic and non-financial objectives. Attract and retain executives who thrive in a sustainable performance-driven culture. • A competitive compensation and benefits program regularly benchmarked against peer companies of similar size in market capitalization, revenue, and other financial metrics and business attributes. • Realized compensation that varies with Company performance, with downside risk and upside opportunity. Best Practices Supporting Executive Compensation Objectives
Compensation Highlights
| WHAT WE DO: ✓ Link a substantial portion of total compensation to Company performance: ✓ Annual variable compensation awards based principally upon performance against objective, pre-established financial goals ✓ Equity grants consisting largely of PSUs and stock options, focused on longer term shareholder value creation ✓ Set compensation within competitive market ranges ✓ Require substantial stock ownership and retention requirements for officers ✓ Limit perquisites and personal benefits ✓ Have a clawback (“recapture”) policy that applies to performance-based cash awards and equity grants, including gains realized through exercise or sale of equity securities | WHAT WE DO NOT DO: X Guarantee bonuses for executive officers X Allow pledging or hedging of Company stock held by officers X Pay tax “gross-ups” on perquisites and personal benefits unless related to international assignment benefits that are available to employees generally X Include the same metrics in the short and long-term incentive programs X Allow backdating or repricing of stock option awards X Pay or accrue dividends or dividend equivalents on unvested PSU and RSU awards X Include an excise tax “gross-up” provision in the event of a change-in-control X Accelerate equity award vesting upon change-in-control |
Lead Independent Director Responsibilities
performance share unit awards, restricted stock unit awards and stock options. Set forth below is the stock ownership required by the policy expressed as a multiple of base salary for each executive officer position. As of the date of this Proxy Statement, all covered individuals are in compliance with this policy. Stock ownership of the Named Executive Officers can be found in the table presented under the section titled “Information on Share Ownership.”
Executive Committee
| Committee Chair Stephen F. Angel Current Members: Sanjiv Lamba Dr. Thomas Enders Robert L. Wood Meetings in 2024 0 | The purpose of the Executive Committee is primarily to act on behalf of the entire Board with respect to certain matters that may arise in between regularly scheduled Board meetings, and act on certain other matters from time to time. In particular, the Executive Committee duties include, among others: (1) evaluating and approving any investments, acquisitions, partnerships or divestments requiring Board approval, that are within value thresholds specified by the Board; (2) evaluating and approving any financing or other capital markets transactions requiring Board approval, that are within value thresholds specified by the Board; and (3) acting upon any other such matters within the competencies of the Board, that are not reserved solely to the Board, that are within value thresholds specified by the Board and, in the opinion of the Chairman of the Board, should not be postponed until the next regularly scheduled Board meeting. |
Sustainability Committee
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation ($)(2) | Total ($) | | Stephen F. Angel | 300,000 | 511,819 | — | — | — | — | $811,819 | | Prof. DDr. Ann-Kristin Achleitner | 180,000 | 221,943 | — | — | — | — | $401,943 | | Dr. Thomas Enders | 180,000 | 221,943 | — | — | — | — | $401,943 | | Hugh Grant | 130,000 | 221,943 | — | — | — | 40,000 | $391,943 | | Joe Kaeser | 180,000 | 221,943 | — | — | — | — | $401,943 | | Dr. Victoria E. Ossadnik | 130,000 | 221,943 | — | — | — | — | $351,943 | | Paula Rosput Reynolds (3) | 109,643 | 221,943 | | | | — | $331,586 | | Martin H. Richenhagen (4) | 75,824 | — | | | | — | $75,824 | | Alberto Weisser (5) | 170,220 | 221,943 | — | — | — | — | $392,163 | | Robert L. Wood | 165,000 | 221,943 | — | — | — | — | $386,943 |
Sustainability Committee
| (1) Full grant date fair value of restricted stock units granted to each director on March 7, 2024, as determined under accounting standards related to share-based compensation. | | (2) Amounts in this column represent benefits provided to the directors that exceeded $10,000 per director. These amounts are the value of the following benefits provided to the directors by the Company: (a) $40,000 for Mr. Grant as 2024 matching contributions for his eligible personal charitable contributions pursuant to the Company’s charitable matching gift program that is available to the Company employees and non-management directors on the same basis. The Company matches personal donations to eligible charitable institutions up to a $15,000 maximum per year per donor, with matches for certain charitable programs that may exceed the general $15,000 match. | | (3) Joined the Board effective February 27, 2024 | | (4) Retired from the Board effective April 29, 2024 | | (5) Appointed Audit Chair effective April 30, 2024 |
Sustainability Committee
Biography Dr. Thomas Enders served on the Executive Committee and the Board of Directors of EADS NV and its successor Airbus SE in various functions from 2000 to 2019. Between 2005 and 2019 he served as Chief Executive Officer of EADS/Airbus. He joined the aerospace industry in 1991. Before that he worked in the German Bundestag, the German Ministry of Defense and in various foreign policy think tanks. Dr. Enders has been a director of GE Aerospace, formerly named “General Electric Company,” since December 1, 2023. In September 2021, Dr. Enders became the Chairman of the Board of Directors of Lilium N.V. and was previously a member of the Advisory Board of Lilium GmbH in Weßling, Germany from January 2021 to September 2021. Dr. Enders also serves on the Supervisory Board of Lufthansa Group since May 2020, where he is a member of the Presidium and the Nomination Committee. Dr. Enders was a member of the Supervisory Board of Linde AG from 2017 until 2019, where he was a member of the Standing Committee. He was a member of the Supervisory Board of Knorr-Bremse AG from June 2020 to May 2022. Since March 2022, Dr. Enders has been a member of the Board of Directors of Helsing, a European AI company. He is also President (non-executive) of the German Council on Foreign Relations (DGAP) in Berlin. As the former Chief Executive Officer and member of the Executive Committee of Airbus SE, one of the largest aerospace companies in the world and a large international manufacturer, Dr. Enders contributes the senior executive experience and skills described above. In particular, his background includes extensive international, operational and manufacturing experience. As Airbus SE operates in many of the foreign markets in which the Company operates, Dr. Enders also brings his understanding of these large markets where the Company has a significant presence.
The Human Capital Committee
| · | Annual performance-based variable compensation earned by meeting or exceeding pre-established financial goals. | | · | Annual grants of PSUs that vest based upon performance results over three years. | | · | Annual grants of stock options, the value of which is directly linked to the growth in the Company’s stock price. | | · | Annual grants of restricted stock units (RSUs) with three-year cliff vesting and value based on the Company’s stock price. |
The Human Capital Committee
| · | Annual payout of variable compensation is impacted by performance in these strategic and non-financial objectives. |
The Human Capital Committee
| · | A competitive compensation and benefits program regularly benchmarked against peer companies of similar size in market capitalization, revenue, and other financial metrics and business attributes. | | · | Realized compensation that varies with Company performance, with downside risk and upside opportunity. |
The Human Capital Committee
| | Compensation Peer Group | | | 3M | Gilead Sciences | Merck & Co. | | Abbvie | Halliburton Company | Mondelez Intl | | Abbott | Honeywell Intl | PPG Industries | | Caterpillar | InBev | Raytheon Technologies | | Coca-Cola | Johnson Controls | Roche | | Cummins | Kraft Heinz | SAP | | Danaher | Lyondell Basell | Sherwin-Williams | | Deere | Medtronic | Thermo Fisher | | Eaton | Micron Technology | |
The Human Capital Committee
| Name | Title | Base Salary (1) | Target Annual VC (2) | Target Annual LTI Award (3) | Target Total Direct Compensation | | Sanjiv Lamba | Chief Executive Officer | $1,500,000 | 170% | $12,450,000 | $16,500,000 | | Matthew J. White | EVP, Chief Financial Officer | $920,000 | 110% | $5,100,000 | $7,032,000 | | Guillermo Bichara | EVP, Chief Legal Officer | $810,000 | 95% | $3,050,000 | $4,629,500 | | Sean F. Durbin | EVP, North America | $750,000 | 95% | $2,880,000 | $4,342,500 | | David P. Strauss | EVP, Chief Human Resources Officer | $785,000 | 95% | $2,400,000 | $3,930,750 |
The Human Capital Committee
| Financial Measure | Threshold ($ millions) | Target ($ millions) | Maximum ($ millions) | Actual ($ millions) | Weight | Achievement | Payout | | Sales* | 30,792 | 33,289 | 36,916 | 33,082 | 20% | 91.5% | 18.3% | | Net Income* | 6,734 | 7,390 | 8,164 | 7,480 | 55% | 111.6% | 61.4% | | Operating Cash Flow | 8,960 | 9,908 | 11,279 | 9,422 | 25% | 48.8% | 12.2% |
The Human Capital Committee
| Measure | Threshold Goal | Target Goal | Maximum Goal | Actual | Achievement | Payout | | GHG Emissions (MM MT) | 42.5 | 38.3 | 35.2 | 37.23 | 133.4% | 6.7% |
The Human Capital Committee
| · | Vest if pre-established multi-year performance goals are attained and forfeited if threshold goals are not met. | | · | Pay no dividends nor accrue dividend equivalents prior to vesting. | | · | Require NEOs to hold all after-tax shares derived from vested awards until their respective stock ownership requirement is met. |
The Human Capital Committee
| NEO | 2023 LTI Grant | 2024 LTI Grant | | Lamba | $11,000,000 | $12,450,000 | | White | $4,500,000 | $5,100,000 | | Bichara | $2,630,000 | $3,050,000 | | Durbin | $2,500,000 | $2,880,000 | | Strauss | $2,020,000 | $2,400,000 |
The Human Capital Committee
| 2024-2026 | Average Annual ROC | Payout* | | Below Threshold | <25.0 % | 0% | | Threshold | 25.0% | 50% | | Target | 26.0% | 100% | | Maximum | ≥27.0% | 200% |
The Human Capital Committee
| 2024-2026 | TSR Rank | Payout* | | Below Threshold | <25 %ile | —% | | Threshold | 25 %ile | 25% | | Target | 50 %ile | 100% | | Maximum | ≥75 %ile | 200% |
The Human Capital Committee
| 2025 EQUITY AWARD DESIGN: The HC Committee has determined that beginning with awards made in 2025, the PSU weighting will be evenly split so that ROC PSUs and TSR PSUs will each comprise 25% of the overall LTI award mix. The weights of the stock option and RSU components will remain 30% and 20%, respectively. |
The Human Capital Committee
| PSU Measure | Threshold Goal | Target Goal | Maximum Goal | 2022-24 Actual | Payout | | ROC* | 17.8% | 20.0% | 22.0% | 24.7% | 200% | | Relative TSR | 25th %ile | 50th %ile | 75th %ile | 71st %ile | 184% |
The Human Capital Committee
| · | Mr. Lamba has been a U.S. employee eligible for the Company’s U.S. benefits programs since |
The Human Capital Committee
| Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards ($)(2) | Non-equity Incentive Plan Compensation ($)(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(4) | All Other Compensation ($)(5) | Total ($) | | Sanjiv Lamba, | 2024 | 1,475,000 | 11,473,602 | 4,677,524 | 2,698,070 | 221,748 | 150,144 | 20,696,088 | | Chief Executive Officer (6) | 2023 | 1,375,000 | 9,409,791 | 3,880,751 | 3,480,263 | 868,883 | 185,567 | 19,200,255 | | | 2022 | 1,242,500 | 5,989,067 | 2,475,244 | 2,634,317 | 105,000 | 2,155,194 | 14,601,322 | | Matthew J. White, | 2024 | 910,000 | 4,702,961 | 1,916,399 | 1,292,491 | 161,000 | 40,250 | 9,023,101 | | Executive Vice President & | 2023 | 870,000 | 3,849,416 | 1,587,789 | 1,791,006 | 156,000 | 38,500 | 8,292,712 | | Chief Financial Officer | 2022 | 830,000 | 2,458,287 | 1,015,652 | 1,596,289 | 58,000 | 37,250 | 5,995,478 | | Guillermo Bichara | 2024 | 798,750 | 2,812,145 | 1,146,010 | 914,460 | 116,000 | 68,788 | 5,856,153 | | Executive Vice President & | 2023 | 758,750 | 2,253,317 | 927,815 | 1,271,585 | 115,000 | 67,028 | 5,393,494 | | Chief Legal Officer | 2022 | 731,250 | 1,450,691 | 598,530 | 1,113,376 | 42,000 | 50,623 | 3,986,469 | | Sean F. Durbin | 2024 | 737,500 | 2,658,769 | 1,082,374 | 859,247 | 105,000 | 48,575 | 5,491,465 | | Executive Vice President, | 2023 | 693,750 | 2,140,162 | 882,198 | 1,167,416 | 101,000 | 2,400,307 | 7,384,833 | | North America | 2022 | 668,750 | 1,352,058 | 558,643 | 1,111,864 | 45,000 | 1,417,213 | 5,153,528 | | David P. Strauss | 2024 | 773,750 | 2,213,228 | 902,166 | 933,294 | 29,000 | 28,814 | 4,880,252 | | Executive Vice President & | | | | | | | | | | Chief Human Resources Officer (7) | | | | | | | | |
The Human Capital Committee
plicable to Mr. Strauss) | · | The Traditional Design program is applicable only to eligible U.S. employees who were hired by legacy Praxair, Inc. prior to May 1, 2002. This benefit formula considers an employee’s final average pay and years of service with the Company. For this purpose, the employee’s “final average pay” is generally equal to the employee’s highest three years of salary plus annual variable compensation out of their last ten years of service. | | · | Generally, an employee’s annual pension benefit is determined using a formula of 1.5% times the employee’s years of service with the Company times the employee’s final average pay. This is subject to several reductions, including offsets for the employee’s projected Social Security benefits and certain pension benefits payable under pension programs maintained by the Company’s subsidiaries or affiliates. | | · | Unreduced pension benefits are generally payable from the Pension Plan in an annuity beginning following the employee’s separation from service after the earliest of (i) the employee’s reaching age 65, (ii) the employee’s reaching age 62 and completing at least 10 years of service with the Company, or (iii) when the sum of the employee’s age plus years of service with the Company equals at least 85. Mr. Strauss is currently eligible to immediately commence an unreduced pension benefit following his separation from service. | | · | Traditional Design benefits under the SRIP are generally payable in a lump sum following the employee’s separation from service with the Company with the lump sum payment being actuarially equivalent to the employee’s accrued benefit under the SRIP determined using actuarial factors set forth in the Pension Program. | | · | Traditional Design SRIP benefits become immediately vested and payable in a lump sum upon the occurrence of a
The Human Capital Committee
e. | | Linde plc | 65 | Linde Pension Commitments Applicable to Mr. Lamba for Service Prior to 2022 In addition to the benefits that he began accruing in 2022 under the U.S. Pension Program’s Account-Based Design, Mr. Lamba is entitled to pension benefits in connection with his service with Linde completed prior to 2022. These benefits are provided pursuant to an agreement between him and an affiliate of the Company. Following his retirement from service with the Company upon or after attaining age 65, Mr. Lamba is eligible to receive a monthly benefit for life equal to €20,227, subject to an annual adjustment to reflect changes in the consumer price index. In the event Mr. Lamba terminates employment with the Company prior to attaining age 65, including on account of his disability, he is eligible to commence payment of a reduced benefit. In the event of Mr. Lamba’s death, a benefit equal to 60% of the benefit he was receiving or, in the event his death prior to his commencement, the amount he would have received, is payable to his surviving spouse, and an additional benefit is payable to each of his of children until they attain age 18 or for as long as the child remains a student, through age 26. The benefit payable to each child is either 10% or 25% of Mr. Lamba’s benefit depending upon whether the child’s other parent remains alive. The collective benefit payable to all of Mr. Lamba’s children may not exceed 50% of his benefit and the aggregate benefits payable to his surviving spouse and children collectively, may not e
The Human Capital Committee
al severance benefits. | General Assumptions The table below shows the estimated payments and/or benefits in connection with the following events based upon the following assumptions. “Voluntary Termination,” which includes a NEO’s voluntary resignation, before or after meeting specified age and service requirements, and “Involuntary-for-Cause Termination,” which includes the Company’s termination of a NEO’s employment for reasons such as violation of certain Company policies or for certain performance-related issues. For purposes of this section, the specified “age and service” requirements are generally satisfied if a NEO terminates employment with the Company other than for cause after both (a) attaining age 55 (age 62 for awards made before 2019), and (b) completing at least 10 years of service. “Involuntary Termination,” which includes a termination other than for cause, but not including a termination related to a change-in-control of the Company. Terminations due to death or disability result in substantially the same treatment as an Involuntary Termination, except as otherwise described. A “Change-in-Control” of the Company, as defined under the plans and agreements described below. Generally, under these plans and agreements, a “change-in-control” means, (1) any consolidation or merger in which the Company is not the continuing or surviving corporation; (2) the liquidation of the Company or the sale of all or substantially all of the assets of the Company; (3) an acquisition by a person or group of more than 20% of the Company’s outstanding shares; or (4) a change in the majority composition of the Board not approved by two-thirds of the directors in office before the change. Set forth below after the table are narrative descriptions of payments and/or benefits that would have been provided, if any, related to each employment termination event or a change-in-control, as of December 31, 2024. Also discussed is the basis upon which the payments and/or benefits were calculated. Except as noted, these amounts are the incremental or enhanced amounts that a NEO would have received that are greater than those that the Company would have provided to employees generally under the same circumstances. They are estimates only and are based on various assumptions. The actual amounts that would be paid or the benefits that would be provided can be determined only at the time that each event occurs. The table and the narrative discussion assume that (i) each NEO’s employment terminated on December 31, 2024 due in turn to each termination event; (ii) a change-in-control occurred on December 31, 2024 under the terms of various plans and agreements, regardless of a termination of employment, and (iii) values related to outstanding stock awards reflect the market value of the Company’s common stock of $418.67 per share, which was the closing price on the Nasda
CEO Pay Ratio
CEO Pay Ratio CEO Pay Ratio The Company calculated the ratio of the annual total compensation of its CEO to that of its median employee as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and related SEC rules. Consistent with Instruction 2 of Item 402(u) of Regulation S-K, the applicable SEC rule, which allows for the identification of the median employee once every three years as long as there were no changes to the employee population or employee compensation arrangements that the Company reasonably believes would create a significant change to the prior year’s Pay Ratio disclosure, the Company applied the method originally used in 2022 to identify the median employee. The Company reviewed changes in the employee population and compensation arrangements and determined that there were no material changes that would require the identification of a new median employee for 2024. However, because the median employee used in 2022 and 2023 terminated from employment during 2024, the Company selected a different median employee in 2024 whose compensation is substantially similar to that of the original median employee, as permitted by the applicable SEC rule. The Company calculated 2024 annual total compensation for both the median employee and the CEO in accordance with SEC rules to arrive at the Pay Ratio. The median employee’s 2024 annual total compensation was $52,889 and the CEO’s 2024 annual total compensation was $20,696,088 resulting in a 2024 Pay Ratio of 391:1. When first identifying the median employee for the 2022 Pay Ratio disclosure, the Company gathered information for its entire employee population as of December 31, 2022. The Company then chose a consistently applied compensation measure (“CACM”) of ‘base pay’ to determine its median employee. Base pay is made up of base salary, base wages, and scheduled overtime pay. For the analysis, each employee’s scheduled work hours were used as a reasonable estimate for actual hours worked during 2022 and applied to their base pay rate, therein capturing part-time and non-standard work arrangements. The results were converted to U.S. dollars at the average exchange rate from January 1 through December 31, 2022. Base pay was annualized only for those who began work with the Company during 2022. The Company excluded all its employees in certain countries under the “De Minimis Exemption” as permitted by SEC rules. This excluded population of employees, detailed in the table below, totaled 3,308 of the Company’s entire employee population (as defined by the Pay Ratio rule) of 66,261 as of December 31, 2022, or 4.99%. SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to use a variety of methodologies, exclusions, assumptions and reasonable estimates. As a result, the pay ratios reported above may not be comparable to the pay ratio disclosures made by other companies. Countries Excluded Under “De Minimis Exemption”
CEO Pay Ratio
| Country | Number of Employees | Country | Number of Employees | Country | Number of Employees | | Algeria | 538 | Kenya | 67 | Sri Lanka | 65 | | Bangladesh | 299 | Malawi | 45 | Swaziland | 31 | | Botswana | 41 | Pap. New Guinea | 82 | Tunisia | 49 | | Bulgaria | 40 | Paraguay | 61 | Turkey | 273 | | Colombia | 248 | Philippines | 342 | Ukraine | 120 | | Cyprus | 39 | Portugal | 611 | Vietnam | 34 | | Dominican Rep. | 39 | Serbia | 54 | Zambia | 87 | | Indonesia | 143 | | | | |
CEO Pay Ratio
| Linde plc | 79 |