DEF 14A of Ametek Inc/
Filed Mar 12, 2024 · FY20230001037868-24-000022
The AMETEK Growth Model
The AMETEK Growth Model The AMETEK Growth Model has proven successful and is a result of the well-ingrained, performance-based culture embodied at AMETEK. It serves as the engine that powers our growth, innovation, and sustained success. The AMETEK Growth Model has allowed the company to: •Transition into higher-quality, niche businesses and markets •Drive strong and consistent sales and earnings growth •Generate robust cash flows to accelerate growth through acquisitions •Develop world-class talent •Deliver consistent and superior shareholder returns •Position AMETEK as a premier multi-industry company. Each element of the AMETEK Growth Model supports and enhances the others, while playing an important role in achieving our vision of double-digit earnings growth over the business cycle. As the AMETEK Growth Model has evolved, it has provided tremendous growth for the company, resulting in superior shareholder returns.
BOARD NOMINEES
BOARD NOMINEES The following table provides summary information about each Director nominee. The nominees receiving a majority of the votes cast at the meeting will be elected as Directors. Each of the Directors attended at least 75% of the meetings of the Board and the Committees on which such Director served during the period that he or she served.
BOARD NOMINEES
| Name | Age | Director Since | Independent | Committee Membership | | Tod E. Carpenter | 64 | 2019 | Yes | Compensation | | Karleen M. Oberton | 54 | 2021 | Yes | Audit | | Suzanne L. Stefany | 60 | 2022 | Yes | Compensation and Corporate Governance/Nominating |
DIRECTOR COMPENSATION – 2023
DIRECTOR COMPENSATION – 2023
DIRECTOR COMPENSATION – 2023
| Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | Thomas A. Amato | $130,000 | $167,537 | — | — | — | $2,544 | $300,081 | | Tod E. Carpenter | 110,000 | 167,537 | — | — | — | 2,544 | 280,081 | | Anthony J. Conti | 166,250 | 167,537 | — | — | — | 2,544 | 336,331 | | Steven W. Kohlhagen | 110,000 | 167,537 | — | — | — | 2,544 | 280,081 | | Gretchen W. McClain | 130,000 | 167,537 | — | — | $76,775 | 2,544 | 376,856 | | Karleen M. Oberton | 110,000 | 167,537 | — | — | — | 2,763 | 280,300 | | Dean Seavers | 110,000 | 167,537 | — | — | — | — | 277,537 | | Suzanne L. Stefany | 110,000 | 167,537 | — | — | — | — | 277,537 |
DIRECTOR COMPENSATION – 2023
(1)The amounts shown are the annual base cash retainer and additional annual retainer fees for serving as Lead Director and Chair of a Committee. The amounts shown include amounts that have been deferred under the deferred compensation plan for Directors. (2)The amounts shown for stock awards relate to restricted shares granted under our 2020 Omnibus Incentive Compensation Plan. These amounts are equal to the grant date fair value, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation, but without giving effect to estimated forfeitures related to service-based vesting conditions. At December 31, 2023, the non-management members of the Board held unvested restricted stock awards with respect to the number of shares of our common stock set forth next to their names in the chart below.
DIRECTOR COMPENSATION – 2023
| Name | Stock Awards | | Thomas A. Amato | 2,490 | | Tod E. Carpenter | 2,490 | | Anthony J. Conti | 2,490 | | Steven W. Kohlhagen | 2,490 | | Gretchen W. McClain | 2,490 | | Karleen M. Oberton | 2,490 | | Dean Seavers | 2,590 | | Suzanne L. Stefany | 2,020 |
DIRECTOR COMPENSATION – 2023
Directors are able to participate in a deferred compensation plan for Directors. Ms. McClain participates in this plan. Under this plan, a Director may defer payment of his or her fees into a notional investment in the same investments available in The AMETEK Retirement & Savings Plan, commonly referred to as the “AMETEK 401(k) Plan,” plus an interest-bearing account. One of the investment options is a notional fund consisting of our common stock. A Director generally may elect to have the value of his or her account distributed following retirement, either in a lump sum or in up to 15 annual installments, or in the form of an in-service distribution, payable either in a lump sum or in up to 15 annual installments commencing on a date specified by the Director in his or her distribution election. Payments may commence sooner upon the Director’s separation from service prior to plan retirement eligibility, upon the death of the Director, in the event of an unforeseeable financial emergency or upon a change of control. Payments from the notional common stock fund are made in shares of our common stock, while payments from all other investments are paid in cash. Mandatory Retirement. The retirement policy for our Board prohibits a Director from standing for re-election following his or her 75th birthday. Certain Relationships and Related Transactions. Under our written related party transactions policy, transactions that would require disclosure under SEC regulations must be approved in advance by the Audit Committee. Prior to entering into a transaction covered by the policy, the person proposing to enter into the transaction must provide a notice to our Vice President – Audit Services, who must promptly forward the notice to the Chair of the Audit Committee. Following a reasonable review by the Audit Committee, the transaction is permissible if the Audit Committee finds that, notwithstanding the involvement of a related person, there is an appropriate business reason to approve the transaction. We had no related party transactions in 2023. To our knowledge, no related party transactions are currently proposed.
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The nominees for election at this year’s meeting are Tod E. Carpenter, Karleen M. Oberton and Suzanne L. Stefany, who have been nominated to serve as Class III Directors and, if elected, will serve for three-year terms expiring at the 2027 Annual Meeting of Stockholders. There are no other nominees competing for their seats on the Board. This means we have an uncontested election. If a quorum is present, Directors in uncontested elections are elected by a majority of the votes cast, via the webcast or by proxy. This means that the nominees will be elected if they receive more “for” votes than “against” votes. Votes marked “for” a nominee will be counted in favor of that nominee. Votes marked “abstain” will have no effect on the vote since a majority of the votes cast at the meeting is required for the election of each nominee. Since we do not have cumulative voting, you may not cast all of your votes “for” a single Director nominee. Any nominee for Director who does not receive a majority of votes cast shall immediately tender his or her resignation for consideration by the GNC. The Committee will promptly consider the resignation tendered by the Director and will recommend to the Board whether to accept the tendered resignation or reject it. In considering whether to accept or reject the tendered resignation, the Committee will weigh all factors it deems relevant, including the reasons for the “against” votes by stockholders, the length of service and qualifications of the Director, and the Director’s contributions to AMETEK. No Director whose tendered resignation is under consideration will participate in the deliberation process as a member of the GNC or the process of the Board described below. The Board will act on the GNC’s recommendation within 120 days following certification of the stockholders’ vote and will promptly disclose (by press release, filing of a Current Report on Form 8-K or any other public means of disclosure deemed appropriate) its decision regarding whether to accept the Director’s resignation offer. In considering the GNC’s recommendation, the Board will weigh the factors considered by the Committee and any additional information deemed relevant by the Board. If any Directors’ resignations are accepted by the Board, the GNC will recommend to the Board whether to fill such vacancy or vacancies or to reduce the size of the Board. If any nominee is unable to serve, the shares represented by all valid proxies will be voted for the election of such other person as the Board may nominate, unless the Board determines to reduce the number of Directors. The Directors’ biographies are set forth on pages 26 through 28, and a summary of their skills and attributes is set forth on page 25. Your Board of Directors Recommends a Vote FOR Each of the Nominees.
Biographies
Biographies As discussed under “Consideration of Director Candidates,” the GNC analyzes a number of factors when considering Directors for selection to the Board. Each of our Directors has been selected based on their demonstrated leadership and significant experience in areas significant to our company; ability to offer advice and guidance based upon that experience and expertise; sound business judgment; and character and integrity that support our core values. The biographical information set forth below is as of March 1, 2024 and includes a description of each Director’s background that supported the Board’s consideration of that Director for nomination. Unless we indicate otherwise, each Director has maintained the principal occupation and directorships described below for more than five years. Class III: Nominees for election at the meeting for terms expiring in 2027:
Biographies
| | TOD E. CARPENTER Independent Age 64 Director since 2019 Committee served: Compensation |
Biographies
Mr. Carpenter has served as Chairman since November 2017, and President and Chief Executive Officer of Donaldson Company, Inc. since April 2015. Mr. Carpenter brings to the Board a wealth of general management and global leadership experience. He is currently a Director of Donaldson Company, Inc.
Biographies
| | KARLEEN M. OBERTON Independent Age 54 Director since 2021 Committee served: Audit |
Biographies
Since August 2018, Ms. Oberton is the Chief Financial Officer of Hologic, Inc. Ms. Oberton brings to the Board deep financial advisory, audit and SEC reporting experience as well as extensive global leadership experience at a public company.
Biographies
| | SUZANNE L. STEFANY Independent Age 60 Director since 2022 Committees served: Compensation and Governance |
Biographies
Suzanne L. Stefany is a Partner at PJT Partners. Ms. Stefany brings to the Board deep investment advisory, capital markets and strategy development experience. She is currently a Director of JELD-WEN Holding, Inc. Class II: Directors whose terms continue until 2026:
Biographies
| | THOMAS A. AMATO Independent Age 60 Director since 2017 Committee served: Compensation |
Biographies
Mr. Amato is Chief Executive Officer and President of TriMas Corporation. Previously, he was Chief Executive Officer and President of Metaldyne, LLC and Co-President of Metaldyne Performance Group Inc. Mr. Amato brings to the Board more than 25 years of broad industrial and international experience, having served in several leadership positions at global, multibillion-dollar businesses. He is currently a Director of TriMas Corporation.
Biographies
| | ANTHONY J. CONTI Independent Age 75 Director since 2010 Committees served: Audit, Compensation and Governance |
Biographies
Mr. Conti is retired from his position as a Partner at PricewaterhouseCoopers. Mr. Conti brings to the Board expertise in financial accounting, finance, strategy, risk management and human resources management with his more than 35 years’ experience at a public accounting firm. He was a Director of BioTelemetry, Inc. from May 2012 to February 2021.
Biographies
| | GRETCHEN W. McCLAIN Independent Age 61 Director since 2014 Committee served: Governance |
Biographies
Ms. McClain is the President & CEO of J.M. Huber Corporation, a private company, since April 1, 2022. She was Operating Executive of The Carlyle Group from July 2019 to April 2022. Ms. McClain brings to the Board her extensive business, developmental, strategic and technical background from more than 25 years of global experience across multiple industries, including as CEO of a publicly traded industrial company and government agency leadership. She is currently a Director of Booz Allen Hamilton Holding Corporation. She was a Director of Boart Longyear Limited from November 2015 to August 2019, and Hennessy Capital Acquisition Corp. IV from February 2019 to December 2020. Class I: Directors whose terms continue until 2025:
Biographies
| | STEVEN W. KOHLHAGEN Independent Age 76 Director since 2006 Committees served: Audit and Governance |
Biographies
Mr. Kohlhagen is a retired financial executive. Mr. Kohlhagen brings to the Board expertise in financial accounting, finance and risk management through his extensive experience in, and knowledge of, the financial, securities and foreign exchange markets. He was a Director of the Federal Home Loan Mortgage Corporation from February 2013 to February 2020.
Biographies
| | DEAN SEAVERS Independent Age 63 Director since 2022 Committee served: Audit |
Biographies
Mr. Seavers was the President of National Grid US and Executive Director of National Grid plc, a multinational electric and gas utility, from December 2015 to January 2020. Mr. Seavers brings to the Board a broad background in business transformation, sustainability and safety. Mr. Seavers has been a Director of Albemarle Corporation since May 2018. He was a Director of Environmental Impact Acquisition Corp. from January 2021 to February 2022, James Hardie Industries plc from February 2021 to March 2022 and Pacific Gas & Electric Company from July 2020 to December 2022.
Biographies
| | DAVID A. ZAPICO Age 59 Director since 2016 |
Biographies
Mr. Zapico is the Chairman and Chief Executive Officer of AMETEK. Mr. Zapico brings to the Board extensive knowledge of our company and the markets in which we operate through his 34 years’ experience in our industry.
Executive Compensation – Governance Practices
| ✓ | Strong alignment between pay and performance | | ✓ | Large majority of executive compensation is at-risk and variable | | ✓ | Large majority of variable compensation is delivered as long-term incentives | | ✓ | All long-term incentives are denominated and delivered in equity | | ✓ | Stock ownership requirements for all executive officers | | ✓ | Minimum vesting requirements for equity awards per our equity plan | | ✓ | Caps on annual bonuses to avoid excessive short-term focus and potentially adverse risk-taking | | ✓ | Independent external compensation benchmarking is performed annually to ensure competitiveness | | ✓ | Use of an independent consultant to advise the Compensation Committee | | ✓ | Clawback policy applicable to current and former executive officers |
Executive Compensation – Governance Practices
| ✘ | No excise tax gross-ups on change of control payments | | ✘ | No excessive perquisites | | ✘ | No hedging of our common stock by our officers and Directors | | ✘ | No pledging of our common stock by our officers and Directors | | ✘ | No discounting, reloading or repricing of stock options without stockholder approval | | ✘ | No evergreen provision in our equity plan |
2023 Compensation
| Pay Component | Competitive Compensation | Performance Incentives | Stockholder Alignment | Retention Incentives | | Salary | ✓ | | | | | Short-Term Incentive Awards | ✓ | ✓ | ✓ | | | Long-Term Incentive Awards | ✓ | ✓ | ✓ | ✓ | | Stock Ownership Guidelines | | | ✓ | |
2023 Compensation
Determination of Competitive Compensation In assessing the competitiveness of our compensation levels, we review current-year compensation data provided to us by an independent compensation consultant, Pay Governance LLC. We generally refer to the median pay levels of both our compensation peer group and the general industry (a collection of more than 300 companies) for each pay component and for all pay components in the aggregate. We used the following process to determine a reference point for the compensation for each named executive officer in 2023: •We provided to the compensation consultant a description of the responsibilities for each named executive officer. •The compensation consultant employed its standard methodology to provide compensation levels for comparable executives in the market. Comparable executives are seasoned executives having similar responsibilities in companies of generally similar size and scope. The competitive compensation information was based on our compensation peer group and general industry data derived principally from Willis Towers Watson’s Executive Compensation Database, supplemented with data from public filings. The data were size-adjusted to reflect our estimated revenues and the relevant operating groups as appropriate. While the actual amount of total compensation earned will vary based on company and individual performance, our goal is for total target compensation, as well as each element of total target compensation, to be at or around the median target compensation for executives with similar positions in the market. Individual executive compensation is established based on an executive’s scope of responsibility, impact on profitable growth, individual performance and breadth of experience. The percentage of total target compensation delivered by each component of pay is shown in the following graphs.
Peer Group
Peer Group The Compensation Committee selects companies for inclusion in the compensation benchmarking peer group based on similarity of industry classification and general comparability of key size measures including market capitalization, revenue, assets and employees. This defined peer group data is used in conjunction with general industry market data when benchmarking each compensation component and total target compensation. We used the following peer group to inform pay actions effective in 2023.
Peer Group
| Agilent Technologies, Inc. | Illinois Tool Works, Inc. | Parker-Hannifin Corporation | Snap-On Incorporated | | Dover Corporation | Ingersoll Rand, Inc. | Pentair plc | Teledyne Technologies Incorporated | | Fortive Corporation | Keysight Technologies, Inc. | Rockwell Automation, Inc. | TransDigm Group Incorporated | | Hubbell Incorporated | Mettler-Toledo International, Inc. | Sensata Technologies Holding plc | Xylem Inc. | | IDEX Corporation | Otis Worldwide Corporation | | |
Peer Group
The Compensation Committee reviewed the composition of our compensation peer group in August 2023. Following this review, two companies (Pentair plc and Sensata Technologies Holding plc) were removed and two companies (Howmet Aerospace Inc. and TE Connectivity Ltd.) were added to the compensation peer group. These changes position AMETEK closer to the peer group median revenue and market capitalization.
2023 Compensation Components
2023 Compensation Components Salaries The salary amounts set forth in the Summary Compensation Table for 2023 reflect salary decisions made by the Compensation Committee in November 2022. In determining base salary, our CEO and the Compensation Committee consider the size and scope of the executives’ responsibilities, experience, performance and the median base salary of similar positions in the market. The Compensation Committee believes that median base salary is an appropriate general reference point to attract and retain top executive talent. Base salaries are reviewed annually, and adjustments are intended to recognize performance and contributions over the prior year, as well as any significant changes in duties or scope of responsibility. Short-Term Incentive Program The principal objective of our short-term incentive program is to strongly link a portion of annual compensation to our business achievements. We set target short-term incentive opportunities at the median for comparable executives. However, actual payouts may vary based on performance. Target bonus amounts are typically stated as a percentage of base salary. For 2023, the target bonus amounts were Mr. Zapico – 145%; Mr. Burke – 80%; Mr. Ciampitti - 70%; Mr. Hardin – 70%; and Mr. Oscher – 70%. Under our short-term incentive program, we selected performance measures that are key drivers of stockholder value. In some instances, performance metrics varied among the named executive officers. These differences reflect the different responsibilities of the executives. We also established targets, or expected levels of performance, for each performance measure, as well as threshold and maximum levels of performance. The large majority of our executives’ annual incentive is based on formula-driven, non-discretionary, financial metrics. The target goal for each non-discretionary measure in 2023 was largely developed from our 2023 budget. Consistent with past practice, the Compensation Committee can make adjustments on a case-by-case basis, such as for group operating income, as described below.
2023 Compensation Components
| Award Type | CEO & CFO | Other NEOs | | Performance-Based Restricted Stock Units (“PRSU”) | 50% | 40% | | Nonqualified Stock Options (“NQSO”) | 25% | 30% | | Restricted Stock Awards (“RSA”) | 25% | 30% |
2023 Compensation Components
| Performance Measure | Why It Is Used | How It Is Measured | | Return on Tangible Capital | An important input to value creation | Target performance is based on a review of historical results and expectations of future business performance. | | | Measured on an absolute basis against internal standards | Threshold performance is target minus four thousand basis points (-4,000 bps) and is set above the median for the constituents of the S&P 500 Industrials. | | | | Maximum performance is target plus two thousand basis points (+2,000 bps). | | Relative Total Shareholder Return | Reflects the collective output of management efforts | The relative TSR performance target is set at the median of the constituents of the S&P 500 Industrials. | | | Measured relative to the TSR for the constituents of the S&P 500 Industrials index | TSR is calculated based on the average closing stock price for the 10 trading days immediately prior to the beginning and immediately prior to and including the end of the performance period. Dividends are assumed to be accrued on the applicable payment date. | | | AMETEK is a member of the robust S&P 500 Industrials index which best represents the competition for investor funds | Threshold performance is the 30th percentile. Maximum performance is the 80th percentile. |
Performance Outcomes for the 2021-2023 Performance Period
Performance Outcomes for the 2021-2023 Performance Period The number of PRSUs which will vest is the sum of: •One-half of the Target Award multiplied by the Return on Tangible Capital (“ROTC”) vested percentage, and •One-half of the Target Award multiplied by the Relative Total Shareholder Return (“TSR”) vested percentage The payout for the 2021-2023 performance period is 131.50%. •AMETEK’s target average ROTC for the three-year period 2021-2023 is 100%. The actual average ROTC is 108% resulting in a ROTC vested percentage of 140%. •AMETEK’s 2021-2023 TSR of +40.2% places the Company at the 56.9th percentile of the comparator group, which results in a TSR vested percentage of 123%. The following table shows the number of performance-based restricted stock units to be earned upon achievement of target performance under the terms of the 2022 and 2023 awards, the number of performance-based restricted stock units earned (131.50%) under the terms of the 2021 awards as certified by the Compensation Committee in early 2024 and the respective value of each award as of the most recent fiscal year-end.
Performance Conditions for the 2023-2025 Performance Period
Performance Conditions for the 2023-2025 Performance Period •The ROTC performance range is anchored by a target of 107%, with the threshold set at 67% and the maximum set at 127%. The threshold is set above the median for the constituents of the S&P 500 Industrials. •The TSR performance range remains consistent with prior periods. The target is the 50th percentile among the comparator group, with the threshold set at the 30th percentile and the maximum set at the 80th percentile.
Stock-Based Award Grant Practices
Stock-Based Award Grant Practices Our practices for the grant of stock-based awards encompass the following principles: •Stock-based awards for our named executive officers are approved annually by the Compensation Committee on a pre-scheduled date. •The annual stock-based awards will not be made when the Compensation Committee is aware that executive officers or non-employee Directors are in possession of material, non-public information, or during quarterly or other specified “blackout” periods. •While stock-based awards other than annual awards may be granted to address, among other things, the recruiting or hiring of new employees and promotions, such awards will not be made to executive officers if the Compensation Committee is aware that the executive officers are in possession of material, non-public information, or during quarterly or other specified “blackout” periods. •The Compensation Committee has established that stock options are granted with an exercise price equal to the per-share fair market value on the date of grant. •Backdating of stock options is prohibited. •We are prohibited from repricing stock options and stock appreciation rights and from cash buy-outs of underwater stock options and stock appreciation rights, except in connection with a corporate transaction involving us including, without limitation, any stock dividend, distribution (whether in the form of cash, company stock, other securities or other property), stock split, extraordinary cash dividend, recapitalization, change of control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of company stock or other securities, or similar transaction(s), unless stockholders approve such actions.
Grant Practices Specific to Stock Option Awards
Grant Practices Specific to Stock Option Awards Our policy is to not grant stock options or similar awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement, and not time the public release of such information based on stock option grant dates. In addition, it is our policy to not grant stock options during periods in which there is material nonpublic information about our company, including (i) during “blackout” periods or outside a “trading window” established in connection with the public release of earnings information under our insider trading policy (each, a “Blackout”) or (ii) at any time during the four business days prior to or the one business day following the filing of our periodic reports or the filing or furnishing of a Form 8-K that discloses material nonpublic information (each, a “Filing Window”). These restrictions do not apply to RSUs or other types of equity awards that do not include an exercise price related to the market price of our common stock on the date of grant. Our executive officers are not permitted to choose the grant date for their individual stock option grants. Stock option grants to our employees, including our executive officers, and our Directors are generally made annually at a meeting of the Compensation Committee that is held during the first quarter of each year. The grants are effective on the date of the meeting. However, if the meeting occurs during a Blackout or a Filing Window, the stock option grants will not be effective until after the first full business day following the earnings announcement, unless such day is within a Filing Window, in which case such grants will not be effective until after the first full business day following the filing of the applicable report with the Securities and Exchange Commission. During 2023, we have not timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. During 2023, none of our named executive officers were awarded options with an effective grant date during any period beginning four business days before the filing or furnishing of a Form 10-Q, Form 10-K, or Form 8-K that disclosed material nonpublic information (other than a Form 8-K that disclosed a material new option award grant under Item 5.02(e)), and ending one business day after the filing or furnishing of such reports.
Ongoing and Post-Employment Agreements
Ongoing and Post-Employment Agreements We have plans and agreements addressing compensation for our named executive officers that accrue value as the executive continues to work for us, provide benefits upon certain types of termination events and provide retirement benefits. These plans and agreements were adopted and, in some cases, amended at various times over the past 25 years, and were designed to be a part of a competitive compensation package. All plans apply to each named executive officer, except for the 2004 Executive Death Benefit Plan and Executive Life Insurance Program as further explained below, and the specific named executive officers who participate are indicated in the discussion below. •Supplemental Executive Retirement Plan (“SERP”) – This plan is a non-qualified deferred compensation plan that provides benefits for executives to the extent that their compensation cannot be taken into account under our tax-qualified plans because the compensation exceeds limits imposed by the Internal Revenue Code. We refer to the compensation that exceeds these limits as “excess compensation.” For 2023, compensation in excess of $330,000 constitutes excess compensation. All the named executive officers participate in the SERP. See the Non-Qualified Deferred Compensation table and accompanying narrative for additional information. •Deferred Compensation Plan – This plan provides an opportunity for named executive officers to defer payment of their short-term incentive award to the extent that such award, together with other relevant compensation, constitutes excess compensation. In advance of the year in which the short-term incentive award will be paid, a named executive officer may elect to defer all or part of his or her eligible incentive award into a notional investment. Mr. Zapico and Mr. Burke elected to participate in the Deferred Compensation Plan. See the Non-Qualified Deferred Compensation table and accompanying narrative for additional information. •2004 Executive Death Benefit Plan – This plan provides for retirement benefits or, if the named executive officer dies before retirement, a death benefit. Messrs. Zapico, Burke and Hardin participate in this plan. Mr. Ciampitti and Mr. Oscher do not participate as they were not eligible to participate on January 1, 2004, the date the plan was frozen to new participants. See the Non-Qualified Deferred Compensation table and accompanying narrative for further information. •Executive Life Insurance Program – Under this program, U.S.-based named executive officers not participating in the 2004 Executive Death Benefit Plan receive term life insurance equal to three times base salary up to a maximum of $1,200,000. Coverage is provided while the named executive officers are actively employed. The imputed cost of coverage is reported as income for each participating named executive officer. •Change of Control Agreements – We have change of control agreements with each of our named executive officers, which are described under “Potential Payments Upon Termination or Change of Control.” We entered into these change of control agreements so that our named executive officers can focus their attention and energies on our business during periods of uncertainty that may occur due to a potential change of control. In addition, we want our named executive officers to support a corporate transaction involving a change of control that is in the best interests of our stockholders, even though the transaction may have an effect on his or her continued employment with us. We believe these arrangements provide an important incentive for our named executive officers to remain with us through a transaction. See “Potential Payments Upon Termination or Change of Control” for more information.
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table provides information regarding the compensation of our Chief Executive Officer, Chief Financial Officer, and the next three most highly compensated executive officers.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary | Bonus | Stock Awards (1) | Option Awards (2) | Non-Equity Incentive Plan Compensation (3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) | All Other Compensation (5) | Total | | David A. Zapico | 2023 | $1,360,000 | $788,800 | $7,219,863 | $1,949,327 | $2,318,414 | $335,760 | $566,380 | $14,538,544 | | Chairman and Chief | 2022 | 1,360,000 | 707,200 | 6,462,300 | 1,762,366 | 2,275,482 | — | 552,293 | 13,119,641 | | Executive Officer | 2021 | 1,320,000 | 686,400 | 5,837,811 | 1,568,518 | 2,745,600 | 150,064 | 611,038 | 12,919,431 | | William J. Burke | 2023 | 704,238 | 112,678 | 1,902,348 | 513,342 | 662,359 | 356,963 | 173,397 | 4,425,325 | | Executive Vice President- | 2022 | 676,502 | 108,240 | 2,393,717 | 652,427 | 696,546 | — | 175,243 | 4,702,675 | | Chief Financial Officer | 2021 | 646,538 | 104,328 | 1,602,236 | 430,503 | 938,952 | 167,455 | 190,543 | 4,080,555 | | Tony J. Ciampitti | 2023 | 559,715 | 59,945 | 704,237 | 247,334 | 505,546 | 618 | 142,069 | 2,219,465 | | President - | 2022 | 535,613 | 112,089 | 796,429 | 281,471 | 382,690 | 2,273 | 160,641 | 2,271,206 | | Electronic Instruments | 2021 | 513,125 | 100,524 | 699,413 | 242,927 | 557,783 | 2,041 | 104,780 | 2,220,593 | | John W. Hardin | 2023 | 645,534 | 128,868 | 738,524 | 259,529 | 500,029 | 137,358 | 152,061 | 2,561,902 | | President - | 2022 | 620,110 | 119,455 | 839,306 | 296,765 | 379,617 | — | 169,438 | 2,424,691 | | Electronic Instruments | 2021 | 595,225 | 147,494 | 781,906 | 271,627 | 628,588 | 94,707 | 108,147 | 2,627,694 | | Ronald J. Oscher | 2023 | 559,715 | 137,522 | 704,237 | 247,334 | 379,527 | — | 155,566 | 2,183,901 | | Chief Administrative | 2022 | 535,613 | 146,850 | 796,429 | 281,471 | 425,615 | — | 150,409 | 2,336,387 | | Officer | 2021 | 513,125 | 118,456 | 699,413 | 242,927 | 578,875 | — | 108,290 | 2,261,086 |
SUMMARY COMPENSATION TABLE
(1)The amounts shown for stock awards relate to performance- and time-based restricted shares granted under our 2020 Omnibus Incentive Compensation Plan. These amounts are equal to the aggregate grant date fair value, computed in accordance with ASC 718, but without giving effect to estimated forfeitures related to service-based vesting conditions. For information regarding the number of shares subject to 2023 awards, other features of the awards and the grant date fair value of the awards, see the Grants of Plan-Based Awards table on page 41. (2)The amounts shown for option awards relate to shares granted under our 2020 Omnibus Incentive Compensation Plan. These amounts are equal to the aggregate grant date fair value, computed in accordance with ASC 718, but without giving effect to estimated forfeitures related to service-based vesting conditions. The assumptions used in determining the amounts in this column are set forth in Note 11 to our Consolidated Financial Statements in our Form 10-K filed with the SEC. For information regarding the number of shares subject to 2023 awards, other features of those awards, and the grant date fair value of the awards, see the Grants of Plan-Based Awards table on page 41. (3)Represents payments under our short-term incentive program based on achievement of company-wide or operating group performance measures. See “Compensation Discussion and Analysis – 2023 Compensation Components – Short-Term Incentive Program.” (4)Includes, for 2023, the aggregate change in actuarial present value of the accumulated benefit under defined benefit plans as follows: Mr. Zapico, $145,500 ; and Mr. Burke, $175,100 . Mr. Ciampitti, Mr. Hardin and Mr. Oscher are not eligible to participate in a defined-benefit pension. Gains and/or losses on non-qualified deferred compensation plans to the extent required to be disclosed under SEC regulations, were as follows: Mr. Zapico, $190,260; Mr. Burke, $181,863; Mr. Ciampitti, $618; and Mr. Hardin, $137,358. (5)Included in All Other Compensation for 2023 are the following items: •Employer contributions under the terms of company-sponsored defined contribution plans, including the Supplemental Executive Retirement Plan, as follows: Mr. Zapico, $539,038; Mr. Burke, $150,606; Mr. Ciampitti, $121,880; Mr. Hardin, $133,595; and Mr. Oscher, $128,679, and •Perquisites: Mr. Zapico, a car allowance totaling $27,342; Mr. Burke, a car allowance and income tax preparation; Mr. Ciampitti, a car allowance, executive life insurance and income tax preparation; Mr. Hardin, a car allowance and income tax preparation; and Mr. Oscher, a car allowance and executive life insurance.
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS The following table provides details regarding plan-based awards granted to the named executive officers in 2023.
GRANTS OF PLAN-BASED AWARDS
| 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 (4) | Exercise or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards (5) | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | | David A. | 3/22/2023 | $0 | $1,972,000 | $3,944,000 | — | — | — | — | — | — | N/A | | Zapico | 3/22/2023 | — | — | — | 15,940 | 31,880 | 63,760 | — | — | — | $5,012,811 | | | 3/22/2023 | — | — | — | — | — | — | 15,940 | 51,150 | $138.46 | 4,156,379 | | William J. | 2/8/2023 | 0 | 563,390 | $1,126,780 | — | — | — | — | — | — | N/A | | Burke | 3/22/2023 | — | — | — | 4,200 | 8,400 | 16,800 | — | — | — | 1,320,816 | | | 3/22/2023 | — | — | — | — | — | — | 4,200 | 13,470 | $138.46 | 1,094,874 | | Tony J. | 2/8/2023 | 0 | 391,801 | $783,602 | — | — | — | — | — | — | N/A | | Ciampitti | 3/22/2023 | — | — | — | 1,350 | 2,700 | 5,400 | — | — | — | 424,548 | | | 3/22/2023 | — | — | — | — | — | — | 2,020 | 6,490 | $138.46 | 527,023 | | John W. | 2/8/2023 | 0 | 451,874 | $903,748 | — | — | — | — | — | — | N/A | | Hardin | 3/22/2023 | — | — | — | 1,415 | 2,830 | 5,660 | — | — | — | 444,989 | | | 3/22/2023 | — | — | — | — | — | — | 2,120 | 6,810 | $138.46 | 553,064 | | Ronald J. | 2/8/2023 | 0 | 391,801 | $783,602 | — | — | — | — | — | — | N/A | | Oscher | 3/22/2023 | — | — | — | 1,350 | 2,700 | 5,400 | — | — | — | 424,548 | | | 3/22/2023 | — | — | — | — | — | — | 2,020 | 6,490 | $138.46 | 527,023 |
GRANTS OF PLAN-BASED AWARDS
(1)These targets were established under our short-term incentive program. See “Compensation Discussion and Analysis – 2023 Compensation Components – Short-Term Incentive Program” for information regarding the criteria applied in determining the amounts payable under the awards. There were no threshold amounts payable under the short-term incentive program. The actual amounts paid with respect to these awards are included in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table on page 40. Targets reflect the October 1, 2023 salary for each individual, as required by the program. (2)A detailed description of the equity incentive plan awards is provided under the Equity-Based Compensation subheading which appears earlier in this document. The awards consist of performance-based restricted stock award units granted under our 2020 Omnibus Incentive Compensation Plan. Units earned will vest within three months following the conclusion of the performance period upon certification of performance results by the Compensation Committee. Award holders who terminate from employment more than one year into the performance period and following the attainment of age fifty-five and at least ten years of service are provisionally vested pending performance certification by the Committee. Recipients who terminate employment due to death or disability, or as a result of and concurrent with a change of control, shall become vested in the target number of units awarded upon certification of performance results by the Compensation Committee. Cash dividends are earned on the units awarded but are not paid until the award vests. Until the award vests, the dividends accrue interest at the 5-year Treasury note rate plus 0.5%, compounded quarterly. (3)The stock awards constitute restricted shares granted under our 2020 Omnibus Incentive Compensation Plan. These shares become vested and nonforfeitable on the earliest of: (a) with respect to one-third of the restricted shares awarded (and any dividends with respect thereto) on each of the first, second and third anniversaries of the award date, subject to the recipient’s continuous employment with the company through each such date; (b) the death or disability of the recipient; (c) the recipient’s termination of employment with the company as a result of and concurrent with a change of control. Cash dividends are earned on the restricted shares but are not paid until the restricted shares vest. Until the restricted stock vests, the dividends accrue interest at the five-year Treasury note rate plus 0.5%, compounded quarterly. (4)The option awards constitute stock options granted under our 2020 Omnibus Incentive Compensation Plan. Stock options become exercisable as to one-third of the underlying shares on each of the first three anniversaries of the date of grant. Options generally become fully exercisable in the event of: retirement after the completion of at least two full years of employment and the attainment of age sixty-five, the grantee’s death or permanent disability, or termination of employment in connection with a change of control. (5)The grant date fair value is computed in accordance with ASC 718, but without giving effect to estimated forfeitures related to service-based vesting conditions. The assumptions used in determining the grant date fair value of option awards in this column are set forth in Note 11 to our Consolidated Financial Statements in our Form 10-K filed with the SEC.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following table provides details regarding outstanding equity awards for the named executive officers at December 31, 2023.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| Option Awards (1) | | | | | | Stock Awards | | | | | Name | Option Grant Date | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (2) | Market Value of Shares or Units of Stock That Have Not Vested (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested (3) | | David A. | 3/22/2023 | — | 51,150 | $138.46 | 3/22/2033 | 15,940 | $5,105,654 | 31,880 | $16,781,680 | | Zapico | 3/21/2022 | 18,053 | 36,107 | 134.69 | 3/21/2032 | 9,947 | | 29,840 | | | | 3/11/2021 | 40,806 | 20,404 | 121.91 | 3/11/2031 | 5,077 | | 40,055 | | | | 3/20/2020 | 99,080 | — | 63.37 | 3/20/2030 | | | | | | | 5/9/2019 | 75,720 | — | 85.45 | 5/9/2029 | | | | | | | 5/8/2018 | 45,644 | — | 73.45 | 5/8/2028 | | | | | | William J. | 3/22/2023 | — | 13,470 | 138.46 | 3/22/2033 | 4,200 | 1,530,344 | 8,400 | 5,019,911 | | Burke | 3/21/2022 | 6,683 | 13,367 | 134.69 | 3/21/2032 | 3,687 | | 11,050 | | | | 3/11/2021 | 11,200 | 5,600 | 121.91 | 3/11/2031 | 1,394 | | 10,994 | | | | 3/20/2020 | 27,400 | — | 63.37 | 3/20/2030 | | | | | | | 5/9/2019 | 23,410 | — | 85.45 | 5/9/2029 | | | | | | Tony J. | 3/22/2023 | — | 6,490 | 138.46 | 3/22/2033 | 2,020 | 725,681 | 2,700 | 1,652,692 | | Ciampitti | 3/21/2022 | 2,883 | 5,767 | 134.69 | 3/21/2032 | 1,594 | | 3,180 | | | | 3/11/2021 | 6,320 | 3,160 | 121.91 | 3/11/2031 | 787 | | 4,143 | | | | 3/20/2020 | 14,310 | — | 63.37 | 3/20/2030 | | | | | | | 5/9/2019 | 11,980 | — | 85.45 | 5/9/2029 | | | | | | | 5/8/2018 | 16,210 | — | 73.45 | 5/8/2028 | | | | | | John W. | 3/22/2023 | — | 6,810 | 138.46 | 3/22/2033 | 2,120 | 771,685 | 2,830 | 1,782,296 | | Hardin | 3/21/2022 | 3,040 | 6,080 | 134.69 | 3/21/2032 | 1,680 | | 3,350 | | | | 3/11/2021 | 7,066 | 3,534 | 121.91 | 3/11/2031 | 880 | | 4,629 | | | | 3/20/2020 | 16,070 | — | 63.37 | 3/20/2030 | | | | | | | 5/9/2019 | 13,720 | — | 85.45 | 5/9/2029 | | | | | | | 5/8/2018 | 19,450 | — | 73.45 | 5/8/2028 | | | | | | Ronald J. | 3/22/2023 | — | 6,490 | 138.46 | 3/22/2033 | 2,020 | 725,681 | 2,700 | 1,652,692 | | Oscher | 3/21/2022 | 2,883 | 5,767 | 134.69 | 3/21/2032 | 1,594 | | 3,180 | | | | 3/11/2021 | 6,320 | 3,160 | 121.91 | 3/11/2031 | 787 | | 4,143 | | | | 3/20/2020 | 14,310 | — | 63.37 | 3/20/2030 | | | | | | | 5/9/2019 | 11,980 | — | 85.45 | 5/9/2029 | | | | | | | 5/8/2018 | 16,210 | — | 73.45 | 5/8/2028 | | | | |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
(1)Stock options granted in 2018 and thereafter become exercisable as to one-third of the underlying shares on each of the first three anniversaries of the grant date. (2)Restricted stock awards vest in three equal installments, one-third on each of the first three anniversaries of the grant date. (3)The dollar values are based on the NYSE closing price of our common stock on December 29, 2023 ($164.89). Cash dividends will be earned but will not be paid until the restricted shares vest. The dividends will be payable at the same rate as dividends to holders of our outstanding common stock. Until the restricted stock vests, the dividends accrue interest at the 5-year Treasury note rate plus 0.5%, compounded quarterly. (4)Represents the number of performance-based restricted stock units to be earned upon achievement of target performance under the terms of the 2022 and 2023 awards, and the number of performance-based restricted stock units earned (131.50% of target) under the terms of the 2021 awards as certified by the Compensation Committee in early 2024. The number of units earned vest within three months following the conclusion of the three-year performance period – December 31, 2023 for the 2021 awards, December 31, 2024 for the 2022 awards and December 31, 2025 for the 2023 awards - upon certification of performance results by the Compensation Committee.
OPTION EXERCISES AND STOCK VESTED
OPTION EXERCISES AND STOCK VESTED The following table provides information regarding option exercises and vesting of restricted stock awards for the named executive officers in 2023.
OPTION EXERCISES AND STOCK VESTED
| Option Awards | | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise (1) | Number of Shares Acquired on Vesting | Value Realized on Vesting (2) | | David A. Zapico | 75,876 | $6,915,357 | 80,033 | $11,536,455 | | William J. Burke | 33,930 | 2,946,492 | 22,602 | 3,256,602 | | Tony J. Ciampitti | — | — | 8,683 | 1,247,528 | | John W. Hardin | — | — | 9,693 | 1,392,807 | | Ronald J. Oscher | — | — | 8,683 | 1,247,528 |
OPTION EXERCISES AND STOCK VESTED
(1)The value realized on exercise is equal to the difference between the market price of the shares acquired upon exercise and the option exercise price for the acquired shares. (2)The total value realized on vesting is equal to (1) the number of shares acquired on vesting, (2) multiplied by the NYSE closing price per share of our common stock on the vest date, (3) plus the dividends accrued since the date of award, (4) plus the interest accrued on these dividends. Details pertaining to the vesting activity summarized in the table above are presented in the table below.
OPTION EXERCISES AND STOCK VESTED
| Named Executive Officer(s) | Grant Date | Award Type | Vest Date | Fair Market Value | | All | 3/20/2020 | PSU | 2/21/2023 | $143.00 | | All | 3/20/2020 | RSA | 3/20/2023 | $138.54 | | All | 3/11/2021 | RSA | 3/11/2023 | $135.35 | | All | 3/21/2022 | RSA | 3/21/2023 | $140.07 |
PENSION BENEFITS
PENSION BENEFITS We have the following defined benefit plans in which some or all of our named executive officers participate: •The Employees’ Retirement Plan – This plan is a qualified defined benefit pension plan that provides retirement benefits to our U.S.-based salaried employees who commenced employment with us prior to January 1, 1997. The plan pays benefits based upon eligible final average plan compensation and years of credited service. Compensation in excess of a specified amount prescribed by the Department of the Treasury ($330,000 for 2023) is not taken into account under the Retirement Plan. Mr. Ciampitti, Mr. Hardin and Mr. Oscher, who joined us after January 1, 1997, are not eligible to participate in The Employees’ Retirement Plan, and instead are eligible to participate in the Retirement Feature of the AMETEK 401(k) Plan, a defined contribution plan. Annual benefits earned under The Employees’ Retirement Plan are computed using the following formula: (A + B) x C x 1.02 where: •A = 32.0% of eligible compensation not in excess of Social Security covered compensation plus 40.0% of eligible compensation in excess of Social Security covered compensation, times credited service at the normal retirement date (maximum of 15 years) divided by 15; •B = 0.5% of eligible plan compensation times credited service at the normal retirement date in excess of 15 years (maximum of ten years); and •C = current credited service divided by credited service at the normal retirement date. Participants may retire as early as age 55 with 10 years of service. Unreduced benefits are available when a participant attains age 65 with 5 years of service. Otherwise, benefits are reduced if pension commencement precedes the attainment of age 65. Pension benefits earned are distributed in the form of a lifetime annuity. Messrs. Zapico and Burke are eligible for early retirement under the plan. The following table provides details regarding the present value of accumulated benefits under the plans described above for the named executive officers in 2023.
PENSION BENEFITS
| Name | Plan Name | Number of Years Credited Service at December 31, 2023 | Present Value of Accumulated Benefit (1) | Payments During 2023 | | David A. Zapico | The Employees’ Retirement Plan | 34 | $969,100 | — | | William J. Burke | The Employees’ Retirement Plan | 37 | 1,231,700 | — | | Tony C. Ciampitti | N/A | N/A | N/A | N/A | | John W. Hardin | N/A | N/A | N/A | N/A | | Ronald J. Oscher | N/A | N/A | N/A | N/A |
PENSION BENEFITS
(1)The amounts shown in the Pension Benefit table above are actuarial present values of the benefits accumulated through December 31, 2023. We used the following assumptions in quantifying the present value of the accumulated benefit: discount rate – 5.38%; limitation on eligible annual compensation under the Internal Revenue Code - $330,000; limitation on eligible annual benefits under the Internal Revenue Code - $265,000; retirement age - later of 65 or current age; termination and disability rates - none; Pri-2012 Healthy Retiree with scale MP2021, no collar adjustments; form of payment - single life annuity.
NON-QUALIFIED DEFERRED COMPENSATION
NON-QUALIFIED DEFERRED COMPENSATION We have the following non-qualified deferred compensation plans in which our named executive officers participate: •Supplemental Executive Retirement Plan (“SERP”) – This provides benefits for executives to the extent that their compensation cannot be taken into account under our tax-qualified plans because the compensation exceeds limits imposed by the Internal Revenue Code ($330,000 in 2023). Under the SERP, each year we credit to the account of a named executive officer an amount equal to 13% of the named executive officer’s excess compensation. Named executive officers may notionally invest their SERP contributions in the investment funds offered under the AMETEK 401(k) Plan (which includes the AMETEK Fund, a notional investment in AMETEK, Inc. common stock) designed to mirror those of the AMETEK 401(k) Plan and an interest-bearing account. The interest-bearing account is deemed to earn compound interest at one and one-half percent higher than the 10-year Treasury Note rate. The interest-bearing account is the default investment. Payments of a named executive officer’s account balance in the AMETEK Fund are made in shares of our common stock, while payments from all other investments are paid in cash. The named executive officer may generally elect to have the value of their account distributed following retirement, either in a lump sum or in up to 15 annual installments, or to have the SERP purchase an annuity in his or her name. Payments may commence sooner upon the named executive officer’s earlier separation from service, upon the death of the named executive officer, or upon a change of control. •Deferred Compensation Plan – This plan provides an opportunity for named executive officers to defer payment of their short-term incentive award to the extent that such award, together with other relevant compensation, exceeds limits imposed by the Internal Revenue Code ($330,000 in 2023). In advance of the year in which the short-term incentive award will be paid, a named executive officer may elect to defer all or part of his or her eligible incentive award into a notional investment. He or she may notionally invest their Deferred Compensation Plan contributions in the investment funds offered under the AMETEK 401(k) Plan (which includes the AMETEK Fund, a notional investment in AMETEK, Inc. common stock) and an interest-bearing account. The interest-bearing account is deemed to earn compound interest at one and one-half percent higher than the 10-year Treasury Note rate. A named executive officer generally may elect to have the value of his or her account distributed following retirement, either in a lump sum or in up to fifteen annual installments, or in the form of an in-service distribution, payable either in a lump sum or in up to fifteen annual installments commencing on a date specified by the participant in his or her distribution election. Payments may commence sooner upon the named executive officer’s earlier separation from service, upon the death of the named executive officer, in the event of an unforeseeable financial emergency or upon a change of control. Payments from the notional AMETEK Fund are made in shares of our common stock, while payments from all other investments are paid in cash. •2004 Executive Death Benefit Plan – Under this plan, we provide a retirement benefit to Messrs. Zapico, Burke and Hardin. The retirement benefit under this plan is designed to provide the lump sum necessary to deliver 20% of the executive’s final projected annual salary paid annually for 10 years, on a present value basis at age 70. However, the actual benefit will vary based on the gains and losses from the underlying investments in a pool of insurance policies that we own covering the lives of the named executive officers, and on death benefits received from these same policies. The maximum salary on which the benefit can be based is $500,000. If before age 65 the covered named executive officer dies while disabled or actively employed, the named executive officer’s beneficiaries will receive monthly payments from the date of his or her death until the named executive officer would have attained age 80. The following table provides details regarding non-qualified deferred compensation for the named executive officers in 2023.
NON-QUALIFIED DEFERRED COMPENSATION
| Name | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year (1) | Aggregate Earnings (Losses) in Last Fiscal Year (2) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year-End (3) | | David A .Zapico | $1,553,607 | $537,838 | $2,603,923 | — | $24,725,402 | | William J. Burke | 775,037 | 149,406 | 710,106 | — | 6,653,598 | | Tony C. Ciampitti | — | 94,184 | 217,764 | $(369,918) | 1,450,635 | | John W. Hardin | — | 105,899 | 772,734 | — | 4,637,422 | | Ronald J. Oscher | — | 104,283 | 212,712 | — | 1,464,143 |
NON-QUALIFIED DEFERRED COMPENSATION
(1)Includes the following contributions for each named executive officer, which are also reported in the Summary Compensation Table on page 40: Mr. Zapico, $537,838; Mr. Burke, $149,406; Mr. Ciampitti, $94,184; Mr. Hardin, $105,899; and Mr. Oscher, $104,283. (2)Includes the following earnings for each named executive officer, which are also reported in the Summary Compensation Table on page 40: Mr. Zapico, $190,260; Mr. Burke, $181,863; Mr. Ciampitti, $618; Mr. Hardin $137,358; and Mr. Oscher, $0. (3)Includes for each named executive officer the following amounts that were reported as compensation in the Summary Compensation Table in previous years: Mr. Zapico, $11,969,791; Mr. Burke, $2,909,231; Mr. Ciampitti, $599,618; Mr. Hardin, $1,312,123; and Mr. Oscher, $259,985.
POTENTIAL PAYMENTS UPON TERMINATION OR
POTENTIAL PAYMENTS UPON TERMINATION OR
CEO PAY RATIO
CEO PAY RATIO Pursuant to Item 402(u) of Regulation S-K and Section 953(b) of the Dodd-Frank Act, presented below is the ratio of annual total compensation of our CEO to the annual total compensation of our median employee (excluding our CEO). The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u). AMETEK identified a new median employee to use as the basis for comparison in 2023. The previous median employee was used for three successive years, the maximum permitted by regulation. We used annual base pay, the one pay element all AMETEK employees receive, as the consistently applied compensation measure to identify the median employee. The median employee was selected from all remaining employees, other than our CEO, employed by AMETEK on October 1, 2023. We included all employees, whether employed on a full-time, part-time or seasonal basis. We did not make any assumptions, adjustments or estimates with respect to annual base salary. We did not include independent contractors or leased workers in our determination. After identifying the median employee based on annual base pay, we calculated annual total compensation for such employee as determined under Item 402 of Regulation S-K, the same methodology we use for our named executive officers as set forth in the Summary Compensation Table – 2023 on page 40. The 2023 annual total compensation for our CEO was $14,538,544. The 2023 annual total compensation for our median employee, including overtime, was $68,084. The ratio of our CEO’s annual total compensation to our median employee’s total compensation for 2023 is 214 to 1.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The table below contains information about the relationship between executive compensation and financial performance for the five years 2019 - 2023. The 2023 Total Shareholder Return (“TSR”) depicts a hypothetical $100 investment in our common stock on December 31, 2018, and shows the value of that investment (assuming the reinvestment of dividends) at the end of each calendar year. A hypothetical $100 investment in the peer group using the same methodology is shown for comparison. The peer group referenced in the table below is the S&P 500 Industrials.
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO (1) | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs (1) | Value of Initial Fixed $100 Investment Based On: | | Net Income (millions) | Adjusted Earnings Per Share | | | | | | | Total Shareholder Return | Peer Group Total Shareholder Return | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $14,538,544 | $19,613,798 | $2,847,648 | $3,659,296 | $252 | $194 | $1,313.2 | $6.38 | | 2022 | 13,119,641 | 13,667,339 | 2,933,740 | 2,987,503 | 212 | 164 | 1,159.5 | 5.68 | | 2021 | 12,919,431 | 23,384,945 | 2,905,396 | 4,553,585 | 222 | 174 | 990.1 | 4.85 | | 2020 | 8,518,221 | 19,470,063 | 2,042,482 | 3,827,884 | 181 | 144 | 872.4 | 3.95 | | 2019 | 10,188,028 | 21,965,622 | 2,450,605 | 4,874,454 | 148 | 129 | 861.3 | 4.19 | | 2018 | | | | | 100 | 100 | | |
PAY VERSUS PERFORMANCE
(1)The following table sets forth the adjustments made during the most recent year represented in the PVP table to arrive at compensation “actually paid” to our PEO and the average compensation “actually paid” to our Non-PEO NEOs.
PAY VERSUS PERFORMANCE
| | 2023 | | | Adjustments to Determine Compensation “Actually Paid" | PEO | Average of Non-PEO NEOs | | Deduction for change in the actuarial present values reported under the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the SCT | $(145,500) | $(43,775) | | Deduction for amounts reported under the “Stock Awards” column in the SCT | (7,219,863) | (1,012,337) | | Deduction for amounts reported under the “Option Awards” column in the SCT | (1,949,327) | (316,885) | | Increase for “Service Cost” for pension plans | 27,789 | 7,105 | | Fair value of current year's equity awards that remain unvested as of year-end | 11,132,703 | 1,626,754 | | Change in fair value of prior years' equity awards that remain unvested as of year-end | 1,828,473 | 353,441 | | Change in fair value from prior year-end to vesting date of prior years' awards that vested during year | 1,400,979 | 197,345 | | Total Adjustments | $5,075,254 | $811,648 |
PAY VERSUS PERFORMANCE
In all the years in question, David A. Zapico was our PEO. The non-PEO NEOs included in average compensation shown in columns (d) and (e) above are named in the table below.
PAY VERSUS PERFORMANCE
| 2022 - 2023 | 2019 - 2021 | | William J. Burke | William J. Burke | | Tony J. Ciampitti | John W. Hardin | | John W. Hardin | Timothy N. Jones | | Ronald J. Oscher | Thomas C. Marecic |
PAY VERSUS PERFORMANCE
AMETEK’s cumulative TSR of 152% compares very favorably to the Peer Group cumulative TSR of 94%. The company-selected measure we use to link CAP to company performance during the most recently completed fiscal year is adjusted earnings per share (“Adjusted EPS”). Adjusted EPS is net income, adjusted for tax-effected acquisition-related intangible amortization, divided by the total number of fully diluted shares of our common stock outstanding. Adjusted EPS is an important performance measure used to determine annual short-term incentive award amounts. Additionally, changes in Adjusted EPS are closely correlated to changes in the year-end fair market value of AMETEK’s common stock, which significantly influences CAP. Finally, Adjusted EPS is a measure of our executive officers’ success at increasing stockholder returns. The ratio of our PEO’s CAP to the average CAP to our non-PEO NEOs has increased or decreased, as the case may be, in correlation to the year-over-year increase or decrease to our Adjusted EPS, Relative Total Shareholder Return and Return on Tangible Capital. As our PEO receives a greater percentage of equity-based compensation than the non-PEO NEOs, higher Cumulative TSR has a greater impact on the calculation of the amount of compensation actually paid (“CAP”) to our PEO than it does on the calculation of the amount of CAP paid to the non-PEO NEOs. Net income is not a performance metric we use when setting executive compensation but is included in the PVP table above as required. The tables below show the relationship between Adjusted EPS and CAP, and Net Income and CAP. Because Net Income is a primary component of Adjusted EPS, the relationships are similar. The most important performance measures used to link executive compensation and company performance during the most recently completed fiscal year, sorted alphabetically, were:
PAY VERSUS PERFORMANCE
| Adjusted Earnings Per Share | | Relative Total Shareholder Return | | Return on Tangible Capital |