DEF 14A of Johnson Controls International plc
Filed Jan 21, 2025 · FY20240001104659-25-004921
Looking ahead to 2025
Looking ahead to 2025 We are energized by our continued progress as we look to achieve our financial and operational goals, building on the momentum we created in 2024. It is clear that our transformation efforts have taken hold, and our team has reached important milestones this year, creating strong momentum entering fiscal 2025. We are excited for the incredible opportunity ahead of us creating value for our shareholders, serving our customers, and caring for our communities. Thank you, George R. Oliver Chairman and Chief Executive Officer Notice of Annual General Meeting of Shareholders
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| Date and Time 3:00 pm, local time March 12, 2025 | Place The Merrion Hotel 24 Upper Merrion Street Dublin 2, Ireland | Record Date January 7, 2025 |
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NOTICE IS HEREBY GIVEN that the 2025 Annual General Meeting of Shareholders of Johnson Controls International plc will be held on March 12, 2025 at The Merrion Hotel, 24 Upper Merrion Street, Dublin 2, Ireland at 3:00 pm, local time for the following purposes: Ordinary Business 1. By separate resolutions, to elect each of the following individuals as Directors for a period of one year, expiring at the end of the Company’s Annual General Meeting of Shareholders in 2026:
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| (a) Timothy M. Archer | (b) Jean Blackwell | (c) Pierre Cohade | | (d) Patrick K. Decker | (e) W. Roy Dunbar | (f) Gretchen R. Haggerty | | (g) Ayesha Khanna | (h) Seetarama (Swamy) Kotagiri | (i) George R. Oliver | | (j) Jürgen Tinggren | (k) Mark Vergnano | (l) John D. Young |
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2. To ratify the appointment of PricewaterhouseCoopers LLP as the independent auditors of the Company and to authorize the Audit Committee of the Board of Directors to set the auditors’ remuneration. Special Business 3. To authorize the Company and/or any subsidiary of the Company to make market purchases of Company shares. 4. To determine the price range at which the Company can re-allot shares that it holds as treasury shares (special resolution). 5. To approve, in a non-binding advisory vote, the compensation of the named executive officers. 6. To approve the Directors’ authority to allot shares up to approximately 20% of issued share capital. 7. To approve the waiver of statutory pre-emption rights with respect to up to 20% of issued share capital (special resolution). To act on such other business as may properly come before the meeting or any adjournment thereof. This notice of Annual General Meeting and Proxy Statement and the enclosed proxy card are first being sent on or about January 21, 2025 to each holder of record of the Company’s ordinary shares at the close of business on January 7, 2025. The record date for the entitlement to vote at the Annual General Meeting is January 7, 2025 and only registered shareholders of record on such date are entitled to notice of, and to attend and vote at, the Annual General Meeting and any adjournment or postponement thereof. During the meeting, management will also present the Company’s Irish Statutory Accounts for the fiscal year ended September 30, 2024. Whether or not you plan to attend the meeting, please complete, sign, date and return the enclosed proxy card to ensure that your shares are represented at the meeting. Shareholders of record who attend the meeting may vote their shares personally, even though they have sent in proxies. In addition to the above resolutions, the business of the Annual General Meeting shall include, prior to the proposal of the above resolutions, the consideration of the Company’s statutory financial statements and the report of the Directors and of the statutory auditors and a review by the shareholders of the Company’s affairs. Your vote is important and we encourage you to submit your proxy as soon as possible so that your shares will be represented at the meeting. This can be done in advance of the Annual General Meeting by availing of one of the voting options detailed in the accompanying Proxy Statement. In addition, details of the business to be presented at the meeting can also be found in the accompanying Proxy Statement. This Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended September 30, 2024 are available to shareholders at www.proxyvote.com and are also available in the Investor Relations section of our website at http://investors.johnsoncontrols.com. The Company’s Irish Statutory Accounts will also be available at those locations at least 21 days before the date of the Annual General Meeting. By Order of the Board of Directors, John Donofrio Executive Vice President and General Counsel January 21, 2025 PLEASE PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD. THE PROXY IS REVOCABLE AND IT WILL NOT BE USED IF YOU: GIVE WRITTEN NOTICE OF REVOCATION TO THE PROXY PRIOR TO THE VOTE TO BE TAKEN AT THE MEETING; SUBMIT A LATER-DATED PROXY; OR ATTEND AND VOTE PERSONALLY AT THE MEETING. ANY SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE MEETING MAY APPOINT ONE OR MORE PROXIES USING THE ENCLOSED PROXY CARD (OR THE FORM IN SECTION 184 OF THE COMPANIES ACT 2014) TO ATTEND, SPEAK AND VOTE ON THAT SHAREHOLDER’S BEHALF. THE PROXY NEED NOT BE A SHAREHOLDER. PROXIES MAY BE APPOINTED VIA THE INTERNET OR PHONE IN THE MANNER SET OUT IN THE ENCLOSED PROXY CARD. ALTERNATIVELY, THEY MAY BE APPOINTED BY DEPOSITING THE ENCLOSED PROXY CARD (OR OTHER VALID SIGNED INSTRUMENT OF PROXY) WITH JOHNSON CONTROLS INTERNATIONAL PLC, C/O BROADRIDGE, 51 MERCEDES WAY, EDGEWOOD, NY 11717 BY 5:00 P.M., EASTERN STANDARD TIME, ON MARCH 11, 2025 (WHICH WILL THEN BE FORWARDED TO JOHNSON CONTROLS INTERNATIONAL PLC’S REGISTERED ADDRESS ELECTRONICALLY) OR WITH JOHNSON CONTROLS INTERNATIONAL PLC, ONE ALBERT QUAY, CORK, IRELAND BY 5:00 P.M. LOCAL TIME ON MARCH 11, 2025. IF YOU WISH TO APPOINT A PERSON OTHER THAN THE INDIVIDUAL SPECIFIED IN THE ENCLOSED PROXY CARD, PLEASE CONTACT OUR COMPANY SECRETARY AND ALSO NOTE THAT YOUR NOMINATED PROXY MUST ATTEND THE MEETING IN PERSON IN ORDER FOR YOUR VOTES TO BE CAST.
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| Proxy Statement Summary | 1 | | Agenda Items | 9 | | Proposal Number One – Election of Directors | 9 | | Proposal Number Two – Appointment of Auditors and Authority to Set Remuneration | 15 | | Audit and Non-Audit Fees | 15 | | Audit Committee Report | 16 | | Proposal Number Three – Authorization to Make Market Purchases of Company Shares | 18 | | Proposal Number Four – Determine the Price Range at which the Company can Re-Allot Treasury Shares | 19 | | Proposal Number Five – Advisory Vote on Executive Compensation | 20 | | Proposal Number Six – Authorization for Directors to Allot Company Shares | 21 | | Proposal Number Seven – Waiver of Statutory Pre-Emption Rights | 22 | | Governance of the Company | 23 | | Compensation of Non-Employee Directors | 42 | | Committees of the Board | 43 | | Compensation Discussion & Analysis | 46 | | Executive Compensation Tables | 70 | | Summary Compensation Table | 70 | | Grants of Plan-Based Awards Table | 72 | | Outstanding Equity Awards Table | 74 | | Option Exercise and Stock Vested Table | 76 | | Non-Qualified Deferred Compensation Table | 76 | | Potential Payments upon Termination and Change-in-Control | 77 | | CEO Pay Ratio | 79 | | Pay Versus Performance Disclosure | 80 | | The Annual General Meeting Questions and Answers | 84 | | Annex A: Non-GAAP Reconciliations | A-1 |
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| Frequently Requested Information | | | Vision and Values of Our Board | 23 | | Areas of Focus for the Board | 24 | | Board Composition, Tenure and Expertise | 26 | | Board Leadership | 27 | | Board Oversight of Strategy | 27 | | Oversight of Cybersecurity | 30 | | Shareholder Engagement | 33 | | Fiscal 2024 Priorities and Performance | 46 | | Fiscal 2024 Compensation | 48 | | Pay for Performance | 48 | | Executive Compensation Philosophy and Principles | 51 | | Roles in Determining Executive Compensation | 54 | | Annual Say-on-Pay Vote | 54 | | Metric Selection and Goal Setting | 57 | | Summary Compensation Table | 70 |
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Unless we have indicated otherwise in this Proxy Statement, references to the “Company,” “Johnson Controls,” “we,” “us,” “our” and similar terms refer to Johnson Controls International plc and its consolidated subsidiaries. 2025 Notice and Proxy Statement i Proxy Summary This proxy summary is intended to provide a broad overview of our 2024 performance, corporate governance and compensation highlights. As this is only a summary, we encourage you to read the entire Proxy Statement for more information prior to voting. Annual General Meeting of Shareholders
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| Date and Time 3:00 pm, local time March 12, 2025 | Place The Merrion Hotel 24 Upper Merrion Street Dublin 2, Ireland | Record Date January 7, 2025 |
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Admission. All shareholders are invited to attend. Registration will occur on day of meeting. Your vote is important and we encourage you to submit your proxy as soon as possible so that your shares will be represented at the meeting. This can be done in advance of the Annual General Meeting by availing of one of the voting options detailed in this Proxy Statement. In addition, details of the business to be presented at the meeting can also be found in this Proxy Statement. Meeting Agenda and Voting Matters
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| Proposal | | Board’s Voting Recommendation | Page Reference | | No. 1 | Election of Directors | ✓ FOR (each nominee) | p. 9 | | No. 2 | Ratify appointment of independent auditors and authorize audit committee to set auditors’ remuneration | ✓ FOR (both 2(a) and 2(b)) | p. 15 | | No. 3 | Authorize market purchases of Company shares by the Company and/or any subsidiary | ✓ FOR | p. 18 | | No. 4 | Determine the price range to re-allot treasury shares | ✓ FOR | p. 19 | | No. 5 | Advisory vote to approve executive compensation | ✓ FOR | p. 20 | | No. 6 | Approve the allotment of up to 20% of issued share capital | ✓ FOR | p. 21 | | No. 7 | Approve the waiver of statutory pre-emption rights | ✓ FOR | p. 22 |
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Proxy Summary › Fiscal Year 2024 In Review Fiscal Year 2024 In Review Business Performance Highlights • We refocused our portfolio with our decision to divest nearly 20% of our non-core assets, including the sale of our Air Distribution Technologies business and entering into an agreement to sell our Residential & Light Commercial HVAC business. This marks a pivotal step in our journey towards becoming a dedicated provider of comprehensive solutions for commercial buildings. Focusing our resources and expertise on our core strengths better positions us to innovate, deliver superior value to our clients, and drive sustainable growth. This strategic realignment enhances our operational efficiency while also reinforcing our commitment to excellence in commercial buildings. • We extended our leading position in cooling for data centers with orders for the full year more than doubling the sales we delivered. • Backlog increased 7% to a record $13.1 billion as demand for our solutions grows with our customers around the globe. • Our Digital Portfolio, which includes OpenBlue and FM:Systems, collectively serves users managing over 3 billion square feet of real estate. These solutions provide more than 10,000 facility professionals with enhanced visibility into workplace operations, improved performance and operation of building equipment, and support in achieving their decarbonization goals. • By leveraging our connected assets, we utilized over 50 terabytes of data to predict equipment failures and identify proactive service opportunities, enhancing our global approach to lifecycle solutions. • We were named to the 2023 CDP Climate Change “A List,” joining fewer than 400 companies recognized for global climate leadership. Additionally, we were featured on the 2024 Corporate Knights “Clean 200” list, marking our 9th consecutive year on this prestigious list. * See Annex A to this Proxy Statement for a reconciliation of adjusted EPS from continuing operations and organic revenue to our results for the most directly comparable financial measure as reported under GAAP in the United States. Proxy Summary › Sustainability Leadership Sustainability Leadership At Johnson Controls, we pride ourselves on building smarter, healthier and more sustainable tomorrows. This unwavering focus on sustainability is at the core of our purpose as a company and informs every aspect of our work, from our strategy and our customer service to our corporate citizenship. We approach our decarbonization goals as an opportunity to lead by example, while our 140-year heritage of technologies and services in the built environment provides solutions that enable our customers to achieve their sustainability commitments. Buildings are responsible for nearly 40 percent of global carbon emissions. With the trifecta of low carbon, energy efficient products, electrification, and the digitalization of buildings, we can reduce both carbon and operating costs. Since 2020, we transformed our business to focus on sustainability and committed to invest at least 75 percent of new product research and development annually in climate-related innovation to develop sustainable products and services. Our 2024 highlights include: • We delivered energy-efficiency and cost savings for customers resulting in over 39 million metric tons of CO2e and $8.4 billion saved since 2000. In 2024, we entered a 20-year energy savings performance contract with Cobb County, Georgia. The infrastructure project utilizes Johnson Controls equipment and digital technology to improve indoor air quality, reduce utility costs, and tackle deferred maintenance in nearly a dozen facilities. The project is expected to reduce carbon dioxide emissions by more than 8,700 metric tons and over $2 million in guaranteed utility bill savings. • We were named as one of the US Department of Energy’s manufacturing partners by passing all the requirements of the Cold Climate Heat Pump Technology (CCHP) Challenge. The CCHP Challenge represents a best-in-class heat pump product that provides high-efficiency heating performance in cold climates, employs environmentally friendly low-Global Warming Potential (GWP) refrigerants, and is designed to be grid interactive. • We doubled the training capacity at The Johnson Controls Academy, an industry-leading national workforce development initiative to tackle the shortage of skilled building systems technicians. This expansion, developed in partnership with Lincoln Tech (parent company Lincoln Educational Services), is designed to address the growing demand for skilled technicians in the installation, service and maintenance of building systems. Graduates of the program will be placed into service technician roles throughout the U.S. • We were named a finalist in the Empire Technology Prize, a $10 million competition to advance building technologies for low-carbon heating system retrofits in tall commercial and multifamily buildings in New York State. We proposed an innovative heat pump solution that delivers cooling and heating for buildings, consisting of a heat pump that runs on ultra-low GWP refrigerant, in combination with zero-GWP mechanical vapor recompression technology, which met the competition’s criteria for sustainability and performance. • Through global volunteerism and philanthropy, Johnson Controls helps build smart, healthy and sustainable communities our employees call home. The Johnson Controls Community College Partnership Program is on track to donate up to $15 million by the end of 2026 to expand access to educational programs in the HVAC, fire, security, and digital disciplines. • We are honored to be recognized for our ongoing innovation and leadership: • 2023 CDP Climate Change ‘A List’, one of less than 400 companies recognized for global climate leadership • 2024 Corporate Knights Clean 200, marking our 9th consecutive year on the list • 2024 TIME World’s Best Companies List • 2024 Forbes Net Zero Leaders list • 2024 EcoVadis Gold, top 5% percent of companies assessed 2024 Ethisphere World’s Most Ethical Companies list, for the 17th time Proxy Summary › Zero Harm Vision Zero Harm Vision Since bringing our Zero Harm to People and the Environment vison to life in 2017, Johnson Controls has demonstrated step change improvement in safety performance and has improved its Total Recordable Incident Rate (TRIR) by nearly 40%. Within each Zero Harm pillar, “Safety”, “Health & Wellness” and “Environment”, corporate and business stakeholders collaborate to define and implement new initiatives to achieve our vision. This includes collaboration with leaders across business operations, environmental health and safety, human resources, and sustainability. The Board of Directors and the Governance and Sustainability Committee provide oversight over our Zero Harm Vision, with the Governance and Sustainability Committee receiving regular updates on Zero Harm initiatives and progress and the full Board regularly reviewing enterprise-wide health and safety data. During fiscal year 2024, the company continued to deliver improvement in safety performance achieving a record low Total Recordable Incident Rate (per 200,000 workhours) of 0.34. Proxy Summary › Our Director Nominees Our Director Nominees Our Board has a diversity of experiences and backgrounds. Our Board believes that having a diverse mix of directors with a variety of skills, experience and backgrounds is essential to meeting its oversight responsibility. Proxy Summary › Our Director Nominees
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We are asking you to vote FOR all the Director nominees listed below. All current Directors attended at least 75% of the Board and committee meetings on which he or she sits during fiscal year 2024. Detailed information regarding these individuals is set forth in this Proxy Summary and under Proposal Number One. The Governance and Sustainability Committee and the Board believe that the qualifications, skills, experience and attributes set forth in this Proxy Statement for all individuals nominated for election support the conclusion that these individuals are qualified to serve as Directors and collectively possess a variety of skills, professional experience, and diversity of backgrounds that align with our needs and allow our Board to effectively oversee our business. As previously disclosed, Simone Menne will retire from the Board at the 2025 Annual General Meeting. Summary information on our Director nominees is set forth below.
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| | | | | | Current Committee Membership | | | | | Nominee | Age | Director Since | Principal Occupation | Independent | AC | CC | EC | GC | | Timothy M. Archer | 57 | 2024 | President and Chief Executive Officer of Lam Research Corporation | ✓ | | ✓ | | | | Jean Blackwell | 70 | 2018 | Retired Executive Vice President & Chief Financial Officer of Cummins Inc. | ✓ | | | ✓ | Chair | | Pierre Cohade | 63 | 2018 | Former Chief Executive Officer of Triangle Tyre Co. Ltd. | ✓ | ✓ | | | | | Patrick K. Decker | 60 | 2024 | Retired President and Chief Executive Officer of Xylem Inc. | ✓ | | ✓ | | | | W. Roy Dunbar | 63 | 2017 | Retired Chief Executive Officer and Chairman of Network Solutions | ✓ | | | | ✓ | | Gretchen R. Haggerty | 69 | 2018 | Retired Executive Vice President & Chief Financial Officer of United States Steel Corporation | ✓ | Chair | | ✓ | | | Ayesha Khanna | 51 | 2023 | Co-Founder and Chief Executive Officer of Addo | ✓ | | | | ✓ | | Seetarama (Swamy) Kotagiri | 56 | 2024 | Chief Executive Officer of Magna International Inc. | ✓ | ✓ | | | | | George R. Oliver | 64 | 2012 | Chairman and Chief Executive Officer of Johnson Controls | | | | Chair | | | Jürgen Tinggren(*) | 66 | 2014 | Retired Chief Executive Officer and Director of Schindler Group | ✓ | | | ✓ | ✓ | | Mark Vergnano | 66 | 2016 | Retired Chief Executive Officer and Chairman of The Chemours Company | ✓ | | Chair | ✓ | | | John D. Young | 60 | 2017 | Retired Chief Business Officer, Pfizer Inc. | ✓ | | ✓ | | |
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| AC = Audit Committee | EC = Executive Committee | | CC = Compensation and Talent Development Committee | GC = Governance and Sustainability Committee |
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Independent Lead Director Proxy Summary › Corporate Governance Snapshot Corporate Governance Snapshot We are committed to maintaining robust governance practices and a strong ethical culture that benefit the long-term interests of our shareholders. We, with the oversight of our Board, regularly review, update and enhance our corporate governance practices and compliance and training programs, as appropriate, in light of shareholder interests, changes in applicable laws, regulations and stock exchange requirements, and the evolving needs of our business. Our corporate governance and compliance practices include:
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| Director Independence & Board Leadership | • 11 of 12 Director nominees are independent • 3 fully independent Board committees • Strong, independent Lead Director with significant governance duties, including chairing regular executive sessions of independent Directors and hosting regular Board update calls • Independent Directors regularly meet in executive session | | Board and Committee Self Evaluations | • Annual Board and committee self-assessments • Lead Director and the Chair of the Governance and Sustainability Committee consult with each Director supplementing formal evaluations | | Tenure | • Balance of new and experienced Directors. 33% of Director nominees have tenures of less than 5 years and average tenure is ~6 yrs • Director retirement policy states that Directors may not stand for reelection after age 75 and does not permit waivers or exceptions | | Best Practices | • Absolute majority voting for Directors in uncontested elections • A comprehensive anti-hedging and anti-pledging policy is in place under our Insider Trading Policy • Clawback policy providing for the mandatory recoupment of incentive compensation for financial restatements, discretionary recoupment of incentive based and equity compensation for misconduct that has the potential to cause material reputational harm and discretionary recoupment of certain compensation from culpable individuals in certain circumstances • Maintain an equity award grant policy establishing standard, predetermined equity grant practices to avoid any actual or perceived market timing of equity awards | | Risk Oversight | • Risk oversight by the Board and its committees • Board and committee oversight of sustainability and other environmental, social and governance matters • Board and committee oversight of cybersecurity | | Share Ownership Requirements | • Robust executive share ownership requirements (6x of base salary for the CEO, 3x base salary for all other NEOs) • Robust Director share ownership requirements (5x of annual retainer) |
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Our Board adopted our Corporate Governance Guidelines, Code of Ethics, and charters for our Governance and Sustainability Committee, Audit Committee, Compensation and Talent Development Committee and Executive Committee to assist the Board in the exercise of its responsibilities and to serve as a framework for the effective governance of the Company. You can access our current committee charters, our Corporate Governance Guidelines and our Code of Ethics in the “Corporate Governance” section of the “Investor Relations” page of our website. Proxy Summary › Non-Binding Advisory Vote on Executive Compensation Non-Binding Advisory Vote on Executive Compensation Proposal Number Five is our annual advisory vote on the Company’s executive compensation philosophy and program. Detailed information regarding these matters is included under the heading “Compensation Discussion & Analysis,” and we urge you to read it in its entirety. Our compensation philosophy and structure for executive officers remains dedicated to the concept of paying for performance and continues to be heavily weighted with performance-based awards.
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| Pay-for-performance | • Set majority of compensation as variable and at-risk • Tie incentives to performance against financial, operational, strategic and individual goals • Use quantifiable and measurable performance metrics and goals that are clearly disclosed • Provide significant upside and downside potential for superior and low performance | | Target pay appropriately | • Conduct competitive market based total compensation benchmark analysis against similarly sized industrial companies for comparable positions | | Align interests with our stakeholders | • Design programs that discourage unnecessary or excessive risk-taking • Cap payout opportunities under the incentive plans • Require minimum vesting periods for equity awards • Reward long-term financial results that drive value creation through a balanced equity mix • Operate meaningful share ownership guidelines • Maintain a pay recoupment (i.e., clawback) policy that exceeds regulatory requirements • Maintain an equity award grant policy establishing standard, predetermined equity grant practices • Prohibit insider trading, hedging and pledging of Company stock • Engage with shareholders on executive compensation matters • Engage an independent compensation consultant to provide analysis and advice • Conduct an annual say-on-pay vote | | Avoid poor governance practices | • No tax gross-ups on any change-in-control benefits • No single-trigger accelerated vesting on a change-in-control (double-trigger provisions) • No discounting, reloading or re-pricing of share options without shareholder approval • No guaranteed compensation or guaranteed increases • No excessive perquisites • No employment agreements with executive officers, except where legally required, in which case they follow market norms • No dividends paid on unvested restricted share units or performance share units until such awards vest |
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Agenda Items PROPOSAL NUMBER ONE Election of Directors Upon the recommendation of the Governance and Sustainability Committee, the Board has nominated for election at the Annual General Meeting a slate of 12 nominees. Biographical information regarding each of the nominees is set forth below. We are not aware of any reason why any of the nominees will not be able to serve if elected. The term of office for members of the Board of Directors commences upon election and terminates upon completion of the first Annual General Meeting of Shareholders following election.
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| | Timothy M. Archer, Age 57 Director Since: March 2024 Independent: Yes Committee: Compensation Other Public Directorships: • Lam Research Corporation | | Mr. Archer is the President and Chief Executive Officer of Lam Research Corporation, a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry, a position he has held since December 2018. Mr. Archer previously served as President and Chief Operating Officer from January 2018 until December 2018 and Executive Vice President, Chief Operating Officer from 2012 until 2018. Prior to joining Lam Research Corporation, Mr. Archer spent 18 years at Novellus Systems, Inc., a manufacturer of equipment used in the fabrication of integrated circuits, in various technology development and business leadership roles, including most recently as Chief Operating Officer from 2011 to 2012; Executive Vice President of Worldwide Sales, Marketing, and Customer Satisfaction from 2009 to 2011; and Executive Vice President of the PECVD and Electrofill business units from 2008 to 2009. Mr. Archer began his career in 1989 at Tektronix, where he was responsible for process development for high-speed bipolar integrated circuits. Mr. Archer currently serves on the International Board of Directors for SEMI, the global industry association representing the electronics manufacturing and design supply chain. Value Delivered to our Board: • Extensive experience in the technology industry throughout his career, including in his current role as CEO of Lam Research. • Experience leveraging digital technology to enable and drive service growth through a mix of equipment and software. • Experience in driving growth in an evolving and increasingly complex industry driven by technology and innovation. • Experience in leading a global manufacturing, service and technology company. • Experience in establishing and driving Lam’s sustainability initiatives, including setting renewable energy and net zero targets. • Experience in leading complex transactions, including mergers and acquisitions. | |
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| | Jean Blackwell, Age 70 Director Since: June 2018 Independent: Yes Committees: Governance, Executive Other Public Directorships: • Ingevity Corporation | | Ms. Blackwell served as Chief Executive Officer of Cummins Foundation and Executive Vice President, Corporate Responsibility, of Cummins Inc., a global power leader that designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products, from March 2008 until her retirement in March 2013. She previously served as Executive Vice President and Chief Financial Officer from 2003 to 2008, Vice President, Cummins Business Services from 2001 to 2003, Vice President, Human Resources from 1998 to 2001, and Vice President and General Counsel from 1997 to 1998. Prior thereto, Ms. Blackwell was a partner at the Indianapolis law firm of Bose McKinney & Evans LLP from 1984 to 1991. She has also served in state government, including as Executive Director of the Indiana State Lottery Commission and State of Indiana Budget Director. Ms. Blackwell serves as a Director of Ingevity Corporation, a leading global manufacturer of specialty chemicals and high-performance carbon materials. Ms. Blackwell previously served as a Director of Celanese Corporation, a global technology and specialty materials company, from 2014 until 2024, Essendant Inc., a leading national wholesale distributor of business products, from 2007 to 2018 and Phoenix Companies Inc., a life insurance company, from 2004 to 2009. Value Delivered to our Board: • Extensive experience as a global business leader, including serving as the Chief Financial Officer of Cummins Inc. • Significant board leadership experience through her service as board chair and chair of multiple committees at other public companies. • Extensive experience with public policy and ESG topics through service as CEO of the Cummins Foundation and Executive Vice President of Corporate Responsibility for Cummins Inc. • Deep financial acumen as CFO and a senior finance leader in the industrial sector. • Experience serving on the board of directors of multiple international companies. • Significant knowledge of the global marketplace gained from her business experience and background. | |
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| | Pierre Cohade, Age 63 Director Since: December 2018 Independent: Yes Committee: Audit Other Public Directorships: • CEAT Ltd. | | Mr. Cohade served as the Chief Executive Officer of Triangle Tyre, China’s largest private tire manufacturer from 2015 to 2016. From 2013 to 2015, Mr. Cohade was a Senior Advisor at ChinaVest, Wells Fargo’s investment banking affiliate in China. During 2012, he served as an independent consultant for various private equity concerns. Prior thereto he served as the President, Asia Pacific, of The Goodyear Tire & Rubber Company from 2004 to 2011. From 2003 to 2004, Mr. Cohade served as the Division Executive Vice President of the Global Water and Beverage division of Danone SA. From 1985 to 2002, Mr. Cohade served in roles of increasing responsibility at Eastman Kodak Co., ultimately serving as the Chairman of Kodak’s Europe, Africa, Middle East and Russia Region. Mr. Cohade serves as a director of CEAT Ltd., one of India’s leading tire manufacturers and Eurofor Group, a manufacturer and distributor of drilling machines and equipment. Mr. Cohade previously served as a director of Acorn International Inc., a leading marketing and branding company in China focused on content creation, distribution, and product sales through digital media, from 2017 to 2021. Mr. Cohade also served as a director of Deutsche Bank China from 2017 to 2023. Mr. Cohade is currently the Chairman of IMA in China, a leading peer group forum for CEOs and senior executives located in China, and is an independent advisor to companies on China, strategy and operations. Value Delivered to our Board: • Significant experience in a number of senior global positions, with extensive experience and expertise in China. • Experience in overseeing manufacturing and operations in China at The Goodyear Tire & Rubber Company and Triangle Tyre. • Experience engaging with regulators and governments on public policy issues in Asia. • Experience leading corporate responsibility initiatives at Goodyear Tire & Rubber Company and Triangle Tyre. • Experience leading large business units at The Goodyear Tire & Rubber Company, Danone SA, and Eastman Kodak Co. • Deep experience in the consumer products industry. | |
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| | Patrick K. Decker, Age 60 Director Since: July 2024 Independent: Yes Committee: Compensation Other Public Directorships: None | | Mr. Decker served as President and CEO of Xylem Inc., a leading water technology provider, from March 2014 until his retirement in December 2023. Prior to leading Xylem, Mr. Decker served as president and CEO of Harsco Corporation, a global industrial products company, from 2012 until 2014. Prior to Harsco, he served in various leadership roles at Tyco International from 2003 until 2012, including as president, Tyco Flow Control, a global provider of industrial solutions to the energy and water sectors. Prior to Tyco, Mr. Decker served with Bristol-Myers Squibb for twelve years in financial and operational roles, predominantly in its Latin America and Asia divisions. He started his career at Price Waterhouse LLP. Mr. Decker Serves on the advisory council for the Dean of the Kelley School of Business at Indiana University and was a founding member of the Bipartisan Council on Infrastructure. Value Delivered to our Board: • Global leadership experience transforming Xylem from an industrial products company to an advanced technology, services and solutions enterprise. • Extensive knowledge of emerging markets and relevant industries. • Experience leading corporate sustainability initiatives, including driving and expanding Xylem’s initiatives to address water scarcity and support resilient water infrastructure. • Expertise in strategy, business operations, sustainability, finance and risk management through his roles as CEO of Xylem and Harsco. • Deep experience leading and integrating transformative acquisitions and executing strategic transactions. | |
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| | W. Roy Dunbar, Age 63 Director Since: June 2017 Independent: Yes Committee: Governance Other Public Directorships: • Duke Energy Corporation • McKesson Corporation • SiteOne Landscape Supplies | | Mr. Dunbar was Chairman of the Board of Network Solutions, a technology company and web service provider, and was the Chief Executive Officer from January 2008 until October 2009. Mr. Dunbar served as the President of Global Technology and Operations for MasterCard Incorporated from September 2004 until January 2008. Prior to MasterCard, Mr. Dunbar worked at Eli Lilly and Company for 14 years, serving as President of Intercontinental Operations, and earlier as Chief Information Officer. He currently serves as a director of Duke Energy Corporation, one of America’s largest energy holding companies, McKesson Corporation, a national wholesale distributor of pharmaceuticals and SiteOne Landscape Supply, Inc., a national wholesale distributor of landscape supplies. Mr. Dunbar previously served as a Director of Humana, Inc., Lexmark International and iGate. Value Delivered to our Board: • Career-spanning depth of experience across numerous disciplines including healthcare, information technology, payments, insurance and renewable energy. • Experience in global leadership and service as a director of companies across multiple sectors. • Experience in leading innovation through information technology at MasterCard and Eli Lilly, including managing cybersecurity risk. • Significant experience as a leader and director across US and international markets. | |
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| | Gretchen R. Haggerty, Age 69 Director Since: March 2018 Independent: Yes Committees: Audit, Executive Other Public Directorships: • Teleflex Corporation • Atmus Filtration Technologies, Inc. | | Ms. Haggerty retired in August 2013 after a 37-year career with United States Steel Corporation, an integrated global steel producer, and its predecessor, USX Corporation, which, in addition to its steel production, also managed and supervised energy operations, principally through Marathon Oil Corporation. From March 2003 until her retirement, Ms. Haggerty served as Executive Vice President & Chief Financial Officer and also served as Chairman of the U. S. Steel & Carnegie Pension Fund and its Investment Committee. Earlier, she served in various financial executive positions at U.S. Steel and USX, beginning in November 1991 when she became Vice President & Treasurer. Ms. Haggerty is currently a Director of Teleflex Corporation, a global provider of medical technology products and Atmus Filtration Technologies, a leading provider of filtration products for on-highway commercial vehicles and off-highway agriculture, construction, mining and power generation vehicles and equipment. Ms. Haggerty is a former Director of USG Corporation, a leading manufacturer of building materials. Value Delivered to our Board: • Deep financial acumen as CFO and senior finance leader in steel and energy industries. • Financial oversight experience as a director on the audit committee of multiple companies. • Experience serving on the board of directors of multiple international companies. • Significant knowledge of the global marketplace gained from her business experience and background. • Experience leading global teams. | |
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| | Dr. Ayesha Khanna, Age 51 Director Since: March 2023 Independent: Yes Committee: Governance Other Public Directorships: None | | Dr. Khanna is the co-founder and CEO of Addo, a privately held artificial intelligence firm with a focus on smart cities, a position she has held since 2017. From 2015-2016, prior to founding Addo, Dr. Khanna served as the Chief Executive Officer of The Keys Global, an education hub for students in coding, robotics, 3D printing and other new technologies. She previously served as Co-Founder and Director of Hybrid Reality Institute, a research and advisory group established to analyze the social impact of accelerating technologies, from 2010-2014. In addition, Dr. Khanna spent more than a decade on Wall Street developing large scale trading, risk management and data analytics systems. Dr. Khanna was previously a director of Aveva, a publicly-traded multinational engineering and industrial software solutions provider. She is also a director of Neom Tonomous, a subsidiary of Neom, responsible for the delivery of the cognitive infrastructure for the $500 billion smart city under development in Saudi Arabia. Dr. Khanna has a PhD of Information Systems and Innovation from the London School of Economics and Political Science and has been a strategic advisor on artificial intelligence, smart cities and fintech to corporations and governments. She was the founder and Chair of 21st Century Girls (21C Girls) a charity delivering free coding, artificial intelligence and web3 classes for girls in Singapore. Value Delivered to our Board: • Extensive experience in enterprise information technology, data and artificial intelligence strategy, implementation and risk, including deep, focused expertise on artificial intelligence and smart cities. • Deep understanding of risk management related to the emerging impacts of accelerating technologies, including cybersecurity, data privacy, artificial intelligence and compliance. • Public policy experience advising governments on artificial intelligence and smart cities and through membership in organizations such as the World Economic Forum’s Global Future Councils and the Singapore Infocomm Media Authority. • Executive leadership experience founding and leading Addo. • Experience leading global teams. | |
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| | Seetarama (Swamy) Kotagiri, Age 56 Director Since: March 2024 Independent: Yes Committee: Compensation Other Public Directorships: • Magna International Inc. | | Mr. Kotagiri is the CEO of Magna International, one of the largest suppliers in the automotive space, a position he has held since 2021. From 1999 until his appointment as Chief Executive Officer, Mr. Kotagiri served in a variety of roles of increasing responsibility at Magna International, including President, Magna International, President, Magna Power and Vision, and Executive Vice President and Chief Technology Officer. Mr. Kotagiri additionally oversaw several of Magna’s segments and businesses including serving as President, Magna Powertrain and President, Magna Electronics. Mr. Kotagiri holds over 12 patents in automotive product and process design. Value Delivered to our Board: • Deep understanding of technological transformation and innovation from his experience in leading Magna. • Significant knowledge of an industry characterized by technological and product transformation driven by digital and other emerging technologies. • Significant operational knowledge and experience gained through service as CEO of Magna and leading multiple segments and businesses. • Decades of experience leading global teams and adapting to macro-economic trends. • Significant experience driving Magna’s sustainability initiatives, including recently establishing emissions reduction targets and a net zero commitment. • Experience in leading large acquisitions and driving organic growth. | |
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| | George R. Oliver, Age 64 Director Since: September 2012 Independent: No Committee: Executive Other Public Directorships: • RTX Corporation | | Mr. Oliver became our Chairman and Chief Executive Officer in September 2017. He previously served as our President and Chief Operating Officer following the completion of the merger with Tyco International. Prior to that, Mr. Oliver was Tyco’s Chief Executive Officer, a position he held since September 2012. He joined Tyco in July 2006 and served as President of a number of operating segments from 2007 through 2011. Before joining Tyco, Mr. Oliver had a more than 20-year career with General Electric (GE), where he served in operational roles of increasing responsibility in several divisions, including as president and Chief Executive Officer of GE Water and Process Technologies and President and Chief Executive Officer of GE Engine Services, as well as previous leadership roles in GE’s Aircraft Engines and Appliances divisions. Mr. Oliver also serves as a director on the board of RTX Corporation, an aerospace and defense company. Mr. Oliver serves as Chairman of the Energy & Environment Committee of the Business Roundtable, an association of chief executive officers of America’s leading companies and as the Chairman of the Sustainable Buildings Task Force for The Sustainable Markets Initiative. Value Delivered to our Board: • Extensive leadership experience over several decades as an executive at Johnson Controls, Tyco and GE. • Brings valuable insights and perspective on the day to day management of the Company’s affairs. • Experience as a director, CEO and a senior manager of global organizations. • Experience leading sustainability initiatives at Johnson Controls and across industries through the Business Roundtable and Sustainable Markets Initiative. • Public policy experience through participation in nongovernmental organizations including the Business Roundtable and World Economic Forum, as well as engaging with state and national lawmakers on public policy issues. • Experience leading global teams at Johnson Controls, Tyco and GE. | |
Looking ahead to 2025
| | Jürgen Tinggren, Age 66 Director Since: March 2014 Independent: Yes Committees: Governance, Executive Other Public Directorships: • N.V. Bekaert S.A. | | Mr. Tinggren served as the Chief Executive Officer of the Schindler Group, a global provider of elevators, escalators and related services, through December 2013 and was a member of the Board of Directors of Schindler from March 2014 to 2016. He joined the Group Executive Committee of Schindler in April 1997, initially responsible for Europe and thereafter for the Asia/Pacific region followed by Technology and Strategic Procurement. In 2007, he was appointed Chief Executive Officer and President of the Group Executive Committee of the Schindler Group. Mr. Tinggren also serves as Chairman and head of the Nomination and Governance Committee of N.V. Bekaert S.A., a Belgian based supplier of steel cord products for tire reinforcement and other specialty steel wire products. From 2014 to 2018 he was a Director of the Sika AG Group and from 2017 to 2020 he was a director and Audit Committee member of OpenText Corporation. Value Delivered to our Board: • Extensive business experience as CEO and board member of leading global companies. • Deep understanding of building services, industrial products and installation and service businesses. • Experience as senior executive of European, U.S. and Asia-based organizations, deep understanding of international markets. • Understanding of digital businesses from his tenure as a director of OpenText. • Significant experience with mergers and acquisitions. • Experience leading global teams as CEO of Schindler. • Deep financial understanding as CEO of Schindler. | |
Looking ahead to 2025
| | Mark Vergnano, Age 66 Director Since: September 2016 Independent: Yes Committee: Compensation Other Public Directorships: • Waters Corporation | | Mr. Vergnano served as the Chairman of the Board of The Chemours Company, a titanium technologies, fluoroproducts, and chemical solutions producer, from July 2021 until his retirement in April 2022. Previously, Mr. Vergnano served as the President and Chief Executive Officer of Chemours from July 2015 to July 2021. He served as Executive Vice President, E. I. du Pont de Nemours and Company from 2009 to June 2015. While at DuPont, he served as Group Vice President — Safety & Protection from 2006 to 2009, Vice President and General Manager — DuPont Surfaces and Building Innovations from 2005 to 2006 and Vice President and General Manager — DuPont Nonwovens from 2003 to 2005. Mr. Vergnano joined DuPont in 1980 as a process engineer and held a variety of manufacturing, technical and management assignments throughout multiple global locations in DuPont’s organization. Mr. Vergnano is currently a director of Waters Corporation, a specialty measurement company. Mr. Vergnano is a former Chairman of the Board of Directors for the National Safety Council, and the American Chemistry Council and the Future of Stem Scholars Initiative. He is the founding chair of the Vergnano Institute for Inclusion at the University of Connecticut. Value Delivered to our Board: • Extensive global business experience as an executive and CEO of Chemours and DuPont. • Deep understanding of the operations, global sales and marketing in both the chemical and industrial sectors. • Experience leading global teams as CEO of Chemours and in managing a variety of functions and business units at DuPont. • Experience developing and driving DuPont’s government affairs, public policy and corporate social responsibility strategies. • Deep financial understanding as CEO of Chemours. | |
Looking ahead to 2025
| | John D. Young, Age 60 Director Since: December 2017 Independent: Yes Committee: Compensation Other Public Directorships: • Arvinas, Inc. • Novartis AG | | Mr. Young served as the Chief Business Officer of Pfizer Inc. from January 2019 until December 2021 and Special Advisor to the CEO from January 2022 until his retirement in July 2022. From January 2018 to December 2018, he served as Group President of Pfizer Innovative Health, and from June 2016 to January 2018 he served as Group President, Pfizer Essential Health. He was Group President, Global Established Pharma Business for Pfizer from January 2014 until June 2016 and President and General Manager, Pfizer Primary Care from June 2012 until December 2013. He also served as Pfizer’s Primary Care Business Unit’s Regional President for Europe and Canada from 2009 until June 2012 and U.K. Country Manager from 2007 until 2009. Mr. Young is currently a director of Arvinas, Inc., a clinical-stage biopharmaceutical company and Novartis AG, a multinational company specializing in the research, development, manufacturing and marketing of innovative pharmaceuticals and generic medicines. Value Delivered to our Board: • Extensive experience as a business leader with 30 years’ experience with Pfizer. • Specialized expertise in developing healthcare solutions in a variety of medical disciplines utilizing technology and innovation. • Experience in corporate social responsibility as a member of the Board of the Pfizer Foundation and his role in overseeing Pfizer’s ESG strategy and commitments. • Experience leading large business units at Pfizer. • Significant experience in a number of senior global positions at Pfizer. | |
Looking ahead to 2025
Election of each Director requires the affirmative vote of a majority of the votes properly cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy. Each Director’s election is the subject of a separate resolution and shareholders are entitled to one vote per share for each separate Director election resolution. The Board unanimously recommends that shareholders vote FOR the election of each nominee for Director to serve until the completion of the next Annual General Meeting. PROPOSAL NUMBER TWO Appointment of Auditors and Authority to Set Remuneration PricewaterhouseCoopers LLP (“PwC”) served as our independent auditors for the fiscal year ended September 30, 2024. The Audit Committee has selected and appointed PwC to audit our financial statements for the fiscal year ending September 30, 2025. The Board, upon the recommendation of the Audit Committee, is asking our shareholders to ratify the appointment of PwC as our independent auditors for the fiscal year ending September 30, 2025, and to authorize the Audit Committee of the Board of Directors to set the independent auditors’ remuneration. Although approval is not required by our Memorandum and Articles of Association or otherwise, the Board is submitting the selection of PwC to our shareholders for ratification because we value our shareholders’ views on the Company’s independent auditors. If the appointment of PwC is not approved by shareholders, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the appointment is approved, the Audit Committee, in its discretion, may select a different independent auditor at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders. How We Select Our Auditor. The Audit Committee considers many factors when appointing our independent auditor, including the reasonableness of audit fees, cultural fit and business acumen, the potential for disruption in our business due to the loss of cumulative institutional knowledge possessed by our current auditor, and the quality of the independent audit firm and overall audit process. When the mandated rotation of PwC’s lead engagement partner occurs, the Audit Committee is directly involved in the selection of PwC’s new lead engagement partner. The members of the Audit Committee and the Board believe that the continued retention of PwC to serve as our independent auditor is in our and our shareholders’ best interests. Representatives of PwC will attend the Annual General Meeting and will have an opportunity to make a statement if they wish. They will also be available to answer appropriate questions at the meeting. For independent auditor fee information, information on our pre-approval policy of audit and non-audit services, and the Audit Committee Report, please see below. The ratification of the appointment of the independent auditors and the authorization for the Audit Committee to set the remuneration for the independent auditors requires the affirmative vote of a majority of the votes properly cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy. The Audit Committee and the Board unanimously recommend a vote FOR these proposals. Audit and Non-Audit Fees Aggregate fees for professional services rendered to the Company by its independent auditors as of and for the two most recent fiscal years are set forth below. The aggregate fees include fees billed or reasonably expected to be billed for the applicable fiscal year. All Audit, Audit-Related, Tax and All Other services described below were pre-approved by the Audit Committee.
Looking ahead to 2025
| | Fiscal Year 2024 | Fiscal Year 2023 | | | (in millions) | (in millions) | | Audit Fees | $22.7 | $23.1 | | Audit-Related Fees | 0.4 | 0.0 | | Tax Fees | 2.7 | 2.6 | | All Other Fees | 0.0 | 0.0 | | Total | $25.8 | $25.7 |
Looking ahead to 2025
Audit Fees for the fiscal year ended September 30, 2024 were for professional services rendered by PwC and include fees for services performed to comply with auditing standards of the Public Company Accounting Oversight Board (“PCAOB”) (United States), including the annual audit of our consolidated financial statements including reviews of the interim financial statements contained in our Quarterly Reports on Form 10-Q, issuance of consents, the issuance of comfort letters associated with debt offerings and the audit of our internal control over financial reporting. This category also includes fees for audits provided in connection with statutory filings or services that generally only the principal auditor reasonably can provide to a client, such as assistance with and review of documents filed with the U.S. Securities and Exchange Commission (“SEC”). Audit-Related Fees for the fiscal year ended September 30, 2024, were for services rendered by PwC and include fees associated with assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. This category includes fees related to assistance in financial due diligence related to mergers, acquisitions and divestitures, carve-outs associated with divestitures and spin-off transactions, consultations concerning financial accounting and reporting standards and regulatory requirements, pre-implementation reviews of certain information technology systems, audits of pension and other employee benefit plans and audit services not required by statute or regulation. Tax Fees for the fiscal year ended September 30, 2024, were for services rendered by PwC and primarily include fees associated with tax audits, tax compliance, tax consulting, transfer pricing and tax planning. This category also includes tax planning on mergers and acquisitions and restructurings, as well as other services related to tax disclosure and filing requirements. All Other Fees for the fiscal year ended September 30, 2024, were for services rendered by PwC and primarily include fees associated with training seminars related to accounting, finance and tax matters, technology tools related to accounting and reporting research, and other permissible advisory services. Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors The Audit Committee has a pre-approval policy that provides guidelines for the audit, audit-related, tax and other permissible non-audit services that may be provided by the independent auditors. The policy identifies the guiding principles that must be considered by the Audit Committee in approving services to ensure that the auditors’ independence is not impaired. The policy provides that the Chief Accounting Officer will support the Audit Committee by providing a list of proposed services to the Committee, monitoring the services and fees pre-approved by the Committee, providing periodic reports to the Audit Committee with respect to pre-approved services and ensuring compliance with the policy. Under the policy, the Audit Committee annually pre-approves the audit fee and terms of the engagement, as set forth in the engagement letter. This annual pre-approval also includes a specified list of audit, audit-related and tax services with pre-approved amounts specified in each service category. Any service not included in the specified list of services must be submitted to the Audit Committee for pre-approval. No service may extend for more than 12 months, unless the Audit Committee specifically provides for a different period. The independent auditor may not begin work on any engagement without confirmation of Audit Committee pre-approval from the Chief Accounting Officer or his or her delegate. In accordance with the policy, the chair of the Audit Committee has been delegated the authority by the Committee to pre-approve the engagement of the independent auditors for a specific service when the entire Committee is unable to do so. All such pre-approvals must be reported to the Audit Committee at the next Committee meeting. Audit Committee Report The Audit Committee of the Board is composed of four Directors, each of whom the Board has determined meets the independence and experience requirements of the New York Stock Exchange (“NYSE”) and the SEC. The Audit Committee operates under a charter approved by the Board, which is posted on our website. As more fully described in its charter, the Audit Committee oversees Johnson Controls’ financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process. Management assures that the Company develops and maintains adequate financial controls and procedures, and monitors compliance with these processes. Johnson Controls’ independent auditors are responsible for performing an audit in accordance with auditing standards generally accepted in the United States to obtain reasonable assurance that Johnson Controls’ consolidated financial statements are free from material misstatement and expressing an opinion on the conformity of the financial statements with accounting principles generally accepted in the United States. The internal auditors are responsible to the Audit Committee and the Board for testing the integrity of the financial accounting and reporting control systems and such other matters as the Audit Committee and Board determine. In this context, the Audit Committee has reviewed the U.S. GAAP consolidated financial statements for the fiscal year ended September 30, 2024, and has met and held discussions with management, the internal auditors and the independent auditors concerning these financial statements, as well as the report of management and the report of the independent registered public accounting firm regarding the Company’s internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act. Management represented to the Committee that Johnson Controls’ U.S. GAAP consolidated financial statements were prepared in accordance with U.S. GAAP. In addition, the Committee has discussed with the independent auditors the auditors’ independence from Johnson Controls and its management as required under Public Company Accounting Oversight Board Rule 3526, Communication with Audit Committees Concerning Independence, and the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard AU Section 380 (Communication with Audit Committees) and Rule 2-07 of SEC Regulation S-X. In addition, the Audit Committee has received the written disclosures and the letter from the independent auditor required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence. Based upon the Committee’s review and discussions referred to above, the Committee recommended that the Board include Johnson Controls’ audited consolidated financial statements in Johnson Controls’ Annual Report on Form 10-K for the fiscal year ended September 30, 2024 filed with the Securities and Exchange Commission and that such report be included in Johnson Controls’ annual report to shareholders for the fiscal year ended September 30, 2024. Submitted by the Audit Committee, Gretchen R. Haggerty, Chair Pierre Cohade Seetarama Kotagiri Simone Menne Agenda Items › Proposal Number Three PROPOSAL NUMBER THREE Authorization to Make Market Purchases of Company Shares We have historically used open-market share purchases as a means of returning cash to shareholders and managing the size of our base of outstanding shares. These are longstanding objectives that management believes are important to continue.
Looking ahead to 2025
Under Irish law, neither the Company nor any subsidiary of the Company may make market purchases or overseas market purchases of the Company’s shares without shareholder approval. Accordingly, shareholders are being asked to authorize the Company, or any of its subsidiaries, to make market purchases and overseas market purchases of up to 10% of the Company’s issued shares. This authorization expires after eighteen months unless renewed; accordingly, we expect to propose renewal of this authorization at subsequent Annual General Meetings. Such purchases would be made only at price levels which the Directors considered to be in the best interests of the shareholders generally, after taking into account the Company’s overall financial position. The Company currently expects to effect repurchases under our existing share repurchase authorization as redemptions pursuant to Article 3(d) of our Articles of Association. Whether or not this proposed resolution is passed, the Company will retain its ability to effect repurchases as redemptions pursuant to its Articles of Association, although subsidiaries of the Company will not be able to make market purchases or overseas market purchases of the Company’s shares unless the resolution is adopted. In order for the Company or any of its subsidiaries to make overseas market purchases of the Company’s ordinary shares, such shares must be purchased on a market recognized for the purposes of the Companies Act 2014. The NYSE, on which the Company’s ordinary shares are listed, is specified as a recognized stock exchange for this purpose by Irish law. The general authority, if approved by our shareholders, will become effective from the date of passing of the authorizing resolution. Ordinary Resolution The text of the resolution in respect of Proposal 3 (which is proposed as an ordinary resolution) is as follows: RESOLVED, that the Company and any subsidiary of the Company is hereby generally authorized to make market purchases and overseas market purchases of ordinary shares in the Company (“shares”) on such terms and conditions and in such manner as the Board of Directors of the Company may determine from time to time but subject to the provisions of the Companies Act 2014 and to the following provisions: (a) The maximum number of shares authorized to be acquired by the Company and/or any subsidiary of the Company pursuant to this resolution shall not exceed, in the aggregate, 69,000,000 ordinary shares of US $0.01 each (which represents slightly less than 10% of the Company’s issued ordinary shares). (b) The maximum price to be paid for any ordinary share shall be an amount equal to 110% of the closing price on the New York Stock Exchange for the ordinary shares on the trading day preceding the day on which the relevant share is purchased by the Company or the relevant subsidiary of the Company, and the minimum price to be paid for any ordinary share shall be the nominal value of such share. (c) This general authority will be effective from the date of passing of this resolution and will expire on the earlier of the date of the Annual General Meeting in 2026 or eighteen months from the date of the passing of this resolution, unless previously varied, revoked or renewed by ordinary resolution in accordance with the provisions of section 1074 of the Companies Act 2014. The Company or any such subsidiary may, before such expiry, enter into a contract for the purchase of shares which would or might be executed wholly or partly after such expiry and may complete any such contract as if the authority conferred hereby had not expired. The authorization for the Company and/or any of its subsidiaries to make market purchases and overseas market purchases of Company shares requires the affirmative vote of a majority of the votes properly cast (in person or by proxy) at the Annual General Meeting. Agenda Items › Proposal Number Four PROPOSAL NUMBER FOUR Determine the Price Range at which the Company can Re-Allot Treasury Shares Our historical open-market share repurchases and other share buyback activities result in ordinary shares being acquired and held by the Company as treasury shares. We may re-allot treasury shares that we acquire through our various share buyback activities in connection with our executive compensation program and our other compensation programs. Under Irish law, our shareholders must authorize the price range at which we may re-allot any shares held in treasury (including by way of re-allotment off-market). In this proposal, that price range is expressed as a minimum and maximum percentage of the prevailing market price (as defined below). Under Irish law, this authorization expires after eighteen months unless renewed; accordingly, we expect to propose the renewal of this authorization at subsequent Annual General Meetings. The authority being sought from shareholders provides that the minimum and maximum prices at which an ordinary share held in treasury may be re-allotted are 95% and 120%, respectively, of the average closing price per ordinary share of the Company, as reported by the NYSE, for the thirty (30) trading days immediately preceding the proposed date of re-allotment, save that the minimum price for a re-allotment to satisfy an obligation under an employee share plan is the par value of a share. Any re-allotment of treasury shares will be at price levels that the Board considers in the best interests of our shareholders. Special Resolution The text of the resolution in respect of Proposal 4 (which is proposed as a special resolution) is as follows: RESOLVED, that the re-allotment price range at which any treasury shares held by the Company may be re-allotted shall be as follows: (a) the maximum price at which such treasury share may be re-allotted shall be an amount equal to 120% of the “market price,” and (b) the minimum price at which a treasury share may be re-allotted shall be the nominal value of the share where such a share is required to satisfy an obligation under an employee share plan operated by the Company or, in all other cases, an amount equal to 95% of the “market price,” and (c) for the purposes of this resolution, the “market price” shall mean the average closing price per ordinary share of the Company, as reported by the New York Stock Exchange, for the thirty (30) trading days immediately preceding the proposed date of re-allotment. FURTHER RESOLVED, that this authority to re-allot treasury shares shall expire on the earlier of the date of the Annual General Meeting of the Company held in 2026 or eighteen months after the date of the passing of this resolution unless previously varied or renewed in accordance with the provisions of section 109 and/or 1078 (as applicable) of the Companies Act 2014 (and/or any corresponding provision of any amended or replacement legislation) and is without prejudice or limitation to any other authority of the Company to re-allot treasury shares on-market. The authorization of the price range at which the Company may re-allot any shares held in treasury requires the affirmative vote of at least 75% of the votes properly cast (in person or by proxy) at the Annual General Meeting. Agenda Items › Proposal Number Five PROPOSAL NUMBER FIVE Advisory Vote on Executive Compensation The Board recognizes that providing shareholders with an advisory vote on executive compensation can produce useful information on investor sentiment with regard to the Company’s executive compensation programs. As a result, this proposal provides shareholders with the opportunity to cast an advisory vote on the compensation of our executive management team, as described in the section of this Proxy Statement entitled “Compensation Discussion & Analysis,” and endorse or not endorse our fiscal year 2024 executive compensation philosophy, programs and policies and the compensation paid to the Named Executive Officers.
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The advisory vote on executive compensation is non-binding, meaning that our Board will not be obligated to take any compensation actions or to adjust our executive compensation programs or policies, as a result of the vote. Notwithstanding the advisory nature of the vote, the resolution will be considered passed with the affirmative vote of a majority of the votes properly cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy. Although the vote is non-binding, our Board and the Compensation and Talent Development Committee will review the voting results. To the extent there is a significant negative vote, we would communicate directly with shareholders to better understand the concerns that influenced the vote. The Board and the Compensation and Talent Development Committee would consider constructive feedback obtained through this process in making future decisions about executive compensation programs. We currently hold the advisory vote on executive compensation on an annual basis and intend to hold the next such vote at the 2026 Annual General Meeting. Advisory Non-Binding Resolution The text of the resolution, which if thought fit, will be passed as an advisory non-binding resolution at the Annual General Meeting, is as follows: RESOLVED, that shareholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion & Analysis section of this Proxy Statement pursuant to Item 402 of Regulation S-K. Agenda Items › Proposal Number Six PROPOSAL NUMBER SIX Authorization for Directors to Allot Company Shares Under Irish law, directors of an Irish public limited company must have authority from its shareholders to issue any shares, including shares which are part of the company’s authorized but unissued share capital. The Company’s current authorization, approved by shareholders at our 2024 Annual General Meeting, will expire on March 12, 2025 — the date of the 2025 Annual General Meeting. We are presenting this proposal to renew the Board’s authority to issue authorized but unissued shares on the terms set forth below. If this proposal is not passed, the Company will have a limited ability to issue new ordinary shares. We understand it is customary practice for Irish companies listed in the U.S. to seek shareholder authority to issue shares up to an aggregate nominal value of 20% of the company’s issued share capital and for such authority to be renewed each year. Therefore, in accordance with customary practice in Ireland and the rules and standards applicable to companies listed in the U.S., we are seeking approval to issue up to a maximum of 20% of our issued ordinary share capital for a period expiring on the earlier of the date of the Company’s Annual General Meeting in 2026 or September 12, 2026, unless otherwise renewed, varied or revoked. We expect to propose renewal of this authorization at subsequent Annual General Meetings. Granting the Board this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish market practice. This authority is fundamental to our business and enables us to issue shares, including, if applicable, in connection with funding acquisitions and raising capital. We are not asking you to approve an increase in our authorized share capital or to approve a specific issuance of shares. Instead, approval of this proposal will only grant the Board the authority to issue shares that are already authorized under our Articles of Association upon the terms below. In addition, because we are a NYSE-listed company, our shareholders continue to benefit from the protections afforded to them under the rules and regulations of the NYSE and SEC, including those rules that limit our ability to issue shares in specified circumstances. This authorization is required as a matter of Irish law and is not otherwise required for other companies listed on the NYSE with whom we compete. Accordingly, approval of this resolution would merely place us on par with other NYSE-listed companies. Ordinary Resolution The text of the resolution in respect of Proposal 6 (which is proposed as an ordinary resolution) is as follows: “RESOLVED that the directors be and are hereby generally and unconditionally authorized to exercise all powers to allot and issue relevant securities (within the meaning of section 1021 of the Companies Act 2014) up to an aggregate nominal value of US $1,381,000 (being equivalent to approximately 20% of the aggregate nominal value of the issued share capital of the Company as at the last practicable date prior to the issue of the notice of this meeting) and the authority conferred by this resolution shall expire on the earlier of the date of the Company’s Annual General Meeting in 2026 or September 12, 2026, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.” As required under Irish law, the resolution in respect of this proposal is an ordinary resolution that requires the affirmative vote of a majority of the votes properly cast (in person or by proxy) at the Annual General Meeting. Agenda Items › Proposal Number Seven PROPOSAL NUMBER SEVEN Waiver of Statutory Pre-Emption Rights Under Irish law, unless otherwise authorized, when an Irish public limited company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders of the company on a pro-rata basis (commonly referred to as the pre-emption right). Our current authorization, approved by shareholders at our 2024 Annual General Meeting, will expire on March 12, 2025 — the date of the 2025 Annual General Meeting. We are therefore proposing to renew the Board’s authority to opt-out of the pre-emption right on the terms set forth below. We understand it is customary practice for Irish companies listed in the U.S. to seek shareholder authority to opt-out of the pre-emption rights provision in the event of the issuance of shares for cash, if the issuance is limited to up to 20% of a company’s issued ordinary share capital. It is also customary practice for such authority to be renewed on an annual basis. Therefore, in accordance with customary practice in Ireland and the rules and standards applicable to companies listed in the U.S., we are seeking this authority, pursuant to a special resolution, to authorize the directors to issue shares for cash up to a maximum of approximately 20% of the Company’s issued share capital without applying statutory pre-emption rights for a period expiring on the earlier of the Annual General Meeting in 2026 or September 12, 2026, unless otherwise varied, renewed or revoked. We expect to propose renewal of this authorization at subsequent Annual General Meetings.
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Granting the Board this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish customary practice. Similar to the authorization sought for Proposal 6, this authority is fundamental to our business and, if applicable, will facilitate our ability to fund acquisitions and otherwise raise capital. We are not asking you to approve an increase in our authorized share capital. Instead, approval of this proposal will only grant the Board the authority to issue shares in the manner already permitted under our Articles of Association upon the terms below. Without this authorization, in each case where we issue shares for cash, we would first have to offer those shares on the same or more favorable terms to all of our existing shareholders. This requirement could cause delays in the completion of acquisitions and capital raising for our business. This authorization is required as a matter of Irish law and is not otherwise required for other companies listed on the NYSE with whom we compete. Renewal of the authorization as described above is fully consistent with NYSE rules and listing standards and with U.S. capital markets practice and governance standards. Accordingly, approval of this resolution would merely place us closer to par with other NYSE-listed companies. Special Resolution The text of the resolution in respect of Proposal 7 (which is proposed as a special resolution) is as follows: “RESOLVED that the directors be and are hereby empowered pursuant to section 1023 of the Companies Act 2014 to allot equity securities (as defined in section 1023 of that Act) for cash, pursuant to the authority conferred by proposal 6 of the notice of this meeting as if sub-section (1) of section 1022 of that Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal value of US $1,381,000 (being equivalent to approximately 20% of the aggregate nominal value of the issued share capital of the Company as at the last practicable date prior to the issue of the notice of this meeting) and the authority conferred by this resolution shall expire on the earlier of the Company’s Annual General Meeting in 2026 or September 12, 2026, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the directors may allot equity securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.” As required under Irish law, the resolution in respect of Proposal 7 is a special resolution that requires the affirmative vote of at least 75% of the votes cast. In addition, under Irish law, the Board may only be authorized to opt-out of pre-emption rights if it is authorized to issue shares, which authority is being sought in Proposal 6. Governance of the Company Vision and Values of Our Board Our vision is a safe, comfortable and sustainable world. In addition to achieving financial performance objectives, our Board and management believe that we must assume a leadership position in the area of corporate governance to fulfill our vision. Our Board believes that good governance requires not only an effective set of specific practices but also a culture of responsibility throughout the company. We believe that good governance ultimately depends on the quality of leadership and are committed to recruiting and retaining Directors and officers of proven leadership ability and personal integrity. Our Board has adopted Corporate Governance Guidelines which provide a framework for our governance practices and philosophy. Johnson Controls’ Values: How We Seek to Conduct Ourselves
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| Integrity First | Purpose Led | Customer Driven | Future Focused | One Team | | We promise honesty and transparency. We uphold the highest standards of integrity and honor the commitments we make. | We believe in doing well by doing good and hold ourselves accountable to make the world a better place through the solutions we provide, our engagement in society, the way we do business, and our commitment to protect people and the environment. | We win when our customers win. Our long-term strategic relationships provide unique insights and the ability to deliver exceptional customer experiences and solutions. | Our culture of innovation and continuous improvement drives us to solve today’s challenges while constantly asking ‘what’s next.’ | We are one team, dedicated to working collaboratively together to create the purposeful solutions that propel the world forward. |
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| Purpose Led Board Engagement | | The Board recognizes the importance of sustainability in the Company’s vision, values and strategy. During fiscal year 2024, the Governance and Sustainability Committee provided oversight and guidance to management in connection with the Company’s continued progress toward its sustainability goals, the planning and execution of the Company’s sustainability strategy and the Company’s readiness for complying with new sustainability reporting regulations. | | The full Board was frequently engaged with management on the intersection of sustainability and the Company’s business strategy, reviewing and discussing the Company’s strategy to be a world leader in smart commercial building solutions creating safe, healthy and sustainable spaces. Throughout the year, the Board engaged with leaders of the Company’s businesses and functions to understand how the Company’s strategy was being deployed across the enterprise. |
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| Future Focused and Customer Driven Board Engagement | | The Board frequently engages with management on the Company’s ongoing product and service innovation. At every regularly scheduled Board meeting, the Board received updates from management on how the Company was developing and executing its strategy to build and expand its technological capabilities to deliver new and differentiated products and services grounded in deep understandings of how the Company’s customers operate, including lifecycle-based solutions that address customers’ needs to improve energy efficiency, enhance security and reduce greenhouse gas emissions. | | During fiscal year 2024, the Board toured the fabrication facility of one of the Company’s hyperscale HVAC customers, where it engaged directly with the customer to understand how the Company is developing and deploying cooling solutions at some of the most sophisticated hyperscale facilities around the globe. | | The Board deepened its understanding of the Company’s product and technology innovation with a visit to the Johnson Controls Advanced Development and Engineering Center, where the Board observed in-person technological demonstrations and engaged with manufacturing and engineering leaders. These engagements gave the Board a deeper understanding of how the Company is developing, testing and deploying new technologies and solutions designed to address customers’ needs and create competitive differentiation for the Company’s products and services. |
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Governance of the Company › Board Mission/Responsibilities Board Mission/Responsibilities The mission of the Board is to promote the long-term value and health of Johnson Controls in the interests of shareholders and set an ethical “tone at the top.” All corporate authority is exercised by the Board except for those matters reserved to the shareholders. The Board retains oversight authority — defining and overseeing the implementation of and compliance with standards of accountability and monitoring the effectiveness of management policies and decisions in an effort to ensure that the Company is managed in such a way to achieve its objectives. The Board delegates its authority to management, who is responsible for managing the everyday affairs of the Company. Management regularly reviews major actions and initiatives with the Board prior to implementation. The Board regularly engages with management on significant strategic matters, evaluating risk, strategic rationale, long-term value and other criteria to support its review and approval of management’s operational plan and other significant strategic matters. Areas of Focus for the Board
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| STRATEGY AND OPERATIONS • Ensuring that processes are in place designed to maintain the integrity and ethical conduct of the Company; reviewing and approving the strategic plans and profit plans; reviewing corporate performance and staying apprised of relations with shareholders | GOVERNANCE & RISK MANAGEMENT • Overseeing and evaluating management’s systems and processes for the identification, assessment, management, mitigation and reporting of major risks; establishing corporate governance standards | | TALENT AND SUCCESSION PLANNING • Overseeing and evaluating management’s systems and senior management performance and compensation; providing advice and counsel to senior management; planning for effective succession | BOARD COMPOSITION & EFFECTIVENESS • Recommending candidates to the shareholders for election to the Board; setting standards for Director qualification, orientation and continuing education; reviewing and assessing the Board’s leadership structure; and undertaking an annual performance evaluation regarding the effectiveness of the Board |
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Governance of the Company › Board Expertise Board Expertise The Director nominees as a whole are strong in their diversity, vision, strategy and business judgment. They possess a robust collective knowledge of management and leadership, business operations, crisis management, risk assessment, industry knowledge, accounting and finance, technology and innovation, public policy, sustainability and corporate social responsibility, corporate governance and global markets.
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| Skills and Expertise | | | | | | | | | | | | | | | Archer | Blackwell | Cohade | Decker | Dunbar | Haggerty | Khanna | Kotagiri | Oliver | Tinggren | Vergnano | Young | | Executive Leadership Experience Directors with significant leadership experience over an extended period, including as chief executive officer or chief financial officer, provide the Company with special insight into how large organizations operate, including strategy, productivity, regulatory concerns, talent development and risk management. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Experience Leading Global Teams Directors who have worked in global companies have experience in markets outside of the United States and bring valuable knowledge to the Company, including exposure to different cultural perspectives and practices, and provide critical insight in light of the Company’s global operations. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Financial and Accounting Expertise Directors with an understanding of accounting and financial reporting processes, particularly in large global businesses, provide an important oversight role. | | ✓ | ✓ | ✓ | | ✓ | | | ✓ | ✓ | ✓ | ✓ | | Public Policy Experience Directors with public policy and government experience have key insight into the role of regulatory issues and government affairs affecting the Company. | ✓ | ✓ | ✓ | ✓ | | | ✓ | | ✓ | | ✓ | ✓ | | Cybersecurity, Technology and Innovation Experience Directors who have expertise in cybersecurity, IT, technology fields and/or driving technological innovation are important as we continue to transform and evolve our business through digital solutions and services. | ✓ | | | ✓ | ✓ | | ✓ | ✓ | ✓ | ✓ | | ✓ | | Manufacturing and Industry Experience Directors who have experience in the industry and markets served by the Company offer valuable perspective for operations. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | ✓ | ✓ | ✓ | ✓ | ✓ | | Corporate Governance Experience Directors with experience in corporate governance, such as service on boards and board committees, or as governance executives of other large, public companies, are familiar with the dynamics and operation of a board of directors and the impact that governance policies have on the Company. | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ | | Corporate Responsibility/Sustainability Experience Directors with experience in corporate responsibility initiatives, including sustainability, help drive our mission to create smart and sustainable buildings for the communities in which we live, work, learn and play. | ✓ | ✓ | ✓ | ✓ | ✓ | | ✓ | ✓ | ✓ | | ✓ | ✓ | | M&A Experience Directors with experience in M&A provide key insights relevant to our business portfolio and our long-term strategic planning. | ✓ | ✓ | ✓ | ✓ | | ✓ | | ✓ | ✓ | ✓ | ✓ | ✓ |
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Governance of the Company › Board Composition, Tenure and Refreshment Board Composition, Tenure and Refreshment
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| Nominee | Tenure (years) | Age | Gender | Diversity | Committee Chair | Other Public Boards | | Timothy M. Archer | 0 | 57 | M | | | 1 | | Jean Blackwell | 6 | 70 | F | ✓ | ✓ | 1 | | Pierre Cohade | 6 | 63 | M | ✓ | | 1 | | Patrick K. Decker | 0 | 60 | M | | | | | W. Roy Dunbar | 7 | 63 | M | ✓ | | 3 | | Gretchen R. Haggerty | 6 | 69 | F | ✓ | ✓ | 2 | | Ayesha Khanna | 1 | 51 | F | ✓ | | | | Seetarama (Swamy) Kotagiri | 0 | 56 | M | ✓ | | 1 | | George R. Oliver | 12 | 64 | M | | | 1 | | Jürgen Tinggren | 10 | 66 | M | ✓ | | 1 | | Mark Vergnano | 8 | 66 | M | | ✓ | 1 | | John D. Young | 7 | 60 | M | ✓ | | 2 | | (*) Diversity includes Female / Racial / Ethnic / LGBTQ+ / Geographically Diverse. | | | | | | |
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The Governance and Sustainability Committee, in accordance with the Board’s Corporate Governance Guidelines, seeks to create a Board that is strong in its collective knowledge and has a diversity of skills and experience with respect to vision and strategy, management and leadership, business operations, business judgment, crisis management, risk assessment, industry knowledge, accounting and finance, corporate governance and global markets. Although the Johnson Controls Board does not have a specific policy or requirement regarding diversity, the Board regards diversity as an important factor in evaluating the overall composition of the Board and when selecting Director nominees. The Board takes into account the current composition and diversity of the Board (including diversity with respect to race, gender, national origin and ethnicity) and the extent to which a candidate’s particular expertise and experience will complement the expertise and experience of other Directors. The Governance and Sustainability Committee also considers whether the Board has an appropriate combination of professional experience, background, skills, worldwide market exposure and subject matter expertise in light of Johnson Controls’ current and expected future needs. The Governance and Sustainability Committee believes that it is desirable for Directors to contribute to a variety of viewpoints on the Board, which may be enhanced by a mix of different professional and personal backgrounds and experiences. As previously disclosed, Simone Menne will retire from the Board at the 2025 Annual General Meeting. Including Ms. Menne, women currently comprise 30.7% of the Board and have composed at least 30% of the Board since 2023. The Governance and Sustainability Committee has engaged an outside director search firm and intends to appoint or nominate a new independent director prior to the 2026 Annual General Meeting and will take into account the Board’s historical composition and diversity when selecting a new director. Governance of the Company › Board Leadership Board Leadership The Board’s leadership structure generally includes a combined Chairman and CEO role with a strong, independent non-executive Lead Director. The Board believes our overall corporate governance measures help ensure that strong, independent Directors continue to effectively oversee our management and key issues related to strategy, risk and integrity; executive compensation; CEO evaluation; and succession planning. Why we combine the roles of Chairman and CEO. In choosing to combine the roles of Chairman and CEO, the Board takes into consideration the importance of in-depth, industry-specific knowledge and a thorough understanding of our business environment and risk management practices in setting agendas and leading the Board’s discussions. Combining the roles also provides a clear leadership structure for the management team and serves as a vital link between management and the Board. Mr. Oliver’s extensive leadership experience and understanding of the history, strategy and progression of the Company, first as CEO of Tyco beginning in 2012 and then as CEO of the Company since 2017, provides a deep, unique perspective that enables him to ensure that the Board’s agendas, presentations and discussions are thorough and thoughtfully constructed based on the key issues and risks impacting the Company. This allows Mr. Oliver to drive strategy and agenda setting at the Board level, while maintaining responsibility for executing on that strategy as CEO. At the same time, our lead director, Jürgen Tinggren, works with Mr. Oliver to set the agenda for the Board while also exercising additional oversight on behalf of the independent Directors. This allows the Board to more effectively perform its oversight role with the benefit of management’s perspective on our business strategy and all other aspects of the business. Our Board periodically reviews its determination to have a single individual act both as Chairman and CEO. The Role of the Lead Director. The Lead Director, currently Mr. Tinggren, acts as an intermediary between the Board and senior management. Among other things, the Lead Director’s duties include: Mr. Tinggren joined our Board in 2014. During his tenure as a Board member, Mr. Tinggren has established strong and effective working relationships with his fellow Directors and garnered their trust and respect. Furthermore, he has demonstrated strong leadership skills, independent thinking and a deep understanding of our business. Mr. Tinggren’ s deep understanding of building services, industrial products and installation and service businesses are valuable in helping the Board exercise its risk oversight function as the Company seeks to be a smart buildings solutions leader. Mr. Tinggren is highly engaged and is routinely in direct contact with the CEO, members of senior management and the Board’s external advisors. Mr. Tinggren collaborates with Mr. Oliver and the other Directors on Board governance and Director succession, providing feedback on the functioning of the Board and identification and recruitment of new Director candidates. Mr. Tinggren’s level of engagement allows him to have a significant impact on the operation of the Board, as well as the Company’s strategic and operational initiatives. Together with the Chairman and CEO, the Lead Director hosts informal Board update calls on a monthly basis in the periods between Board meetings to keep the Directors current on important developments in the business as well as the status of key strategic and operational initiatives. These update calls provide Directors with the opportunity to stay current on matters impacting the Company, which facilitates more efficient and robust discussions at the regularly scheduled Board meetings. Board Oversight of Strategy One of the Board’s primary responsibilities is overseeing management’s establishment and execution of the Company’s strategy. The full Board oversees strategy and strategic risk through robust and constructive engagement with management, taking into consideration our key priorities, global trends impacting our business, regulatory developments and disruptors to our businesses. The Board’s oversight of our strategy primarily occurs through deep-dive annual reviews of the Company’s long-term strategic plans. During these reviews, management provides the Board with its view of the key commercial and strategic risks and opportunities faced by the Company; and the Board provides management with feedback on whether management has identified the key risks and opportunities and is taking appropriate responsive actions. In addition to an annual deep-dive strategic review, because the Company’s strategic initiatives are subject to rapidly evolving business dynamics, the Board regularly receives updates on key strategic initiatives throughout the year to ensure progress is being made against goals, understand where adjustments or refinements to strategy may be appropriate and stay current on issues impacting the business. Governance of the Company › Board Oversight of Strategy
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The Board’s oversight of strategy was prominent throughout the year as the Company furthered its transformation into a pure-play provider of technologies and solutions for commercial buildings. At every regularly scheduled Board meeting, the Board received updates from management on how the Company was developing and executing its strategy to build and expand its technological, digital and service capabilities to maximize the opportunities around the lifecycle of the building, delivering outcomes to the customer that save energy, reduce emissions and optimize building lifecycle costs while improving the overall occupant experience. These discussions were supplemented by regular deep dive discussions of how the Company’s business segments and functions were supporting the execution of the Company’s strategy. Topics covered during fiscal year 2024 included global field operations and execution, product engineering and development, supply chain management and optimization, IT and digital enablement, and capitalizing on high growth verticals. The Board also engaged with management on the key risks to the Company’s strategy. This included focused discussions on cybersecurity, supply chain, product innovation and manufacturing risks. The Board provided focused oversight and guidance as the Company executed its strategy to simplify its portfolio. The Board was frequently engaged with management and the Company’s external advisors during the Company’s strategic review of its non-commercial product lines. The Board participated in regular portfolio review sessions and provided advice and guidance to management throughout the strategic review process, including the evaluation, approval and announcement of the sale of the Company’s Air Distribution Technologies and Residential & Light Commercial businesses. Throughout this process, the Board has and continues to be engaged with the Company and its external advisors to guide the Company’s portfolio simplification strategy. Johnson Controls has a clear vision and growth agenda. The visions and values described above are designed to achieve our mission of helping our customers win everywhere, every day through a relentless focus on customer needs, developing and deploying leading products and technology, distributing our products and services through accessible channels, and attracting and retaining top talent. Johnson Controls plans to achieve these objectives through: • Creating Growth Platforms: Growing our business through innovation, digital services, and partnerships to drive customer outcomes and deliver enhanced value. • Driving Operational improvements: Getting better at what we do and how we do it to drive productivity, quality, efficiency, and excellence. • Sustaining a High-Performance, Customer-Centric Culture: Building a safe, inclusive, sustainable and heathy organization that develops new skills, recognizes success and rewards excellence in order to create a customer-focused culture that drives customer loyalty and decisions. For additional information on our strategy, see “Business Strategy” in Item 1 of our Annual Report on Form 10-K filed with the SEC on November 19, 2024. Board Oversight of Talent and Succession Planning Our Board oversees management succession planning and talent development. The Compensation and Talent Development Committee is charged with reviewing the talent development and succession plans for the CEO and other senior leadership positions, senior leadership pipeline development and our diversity and inclusion initiatives and progress. The Compensation and Talent Development Committee regularly reviews the CEO succession plan and the succession plans for key positions at the senior executive level across the Company. The CEO and CHRO regularly review with the Compensation and Talent Development Committee the assessment and the development of a diverse pipeline of senior leaders who are potential successors for these roles. In addition, the full Board discusses succession and/or talent management at each of its regularly scheduled meetings. These discussions are led by the CEO and Chief Human Resources Officer, with periodic assistance from other senior leaders within the Company and firms with talent assessment expertise. These discussions include critical leadership competencies, talent assessment, short and long-term development and readiness of executives, the pool of external talent, and diversity. The Board also evaluates succession and development plans in the context of our overall business strategy and culture. Potential leaders are visible to Board members through formal presentations and informal events to allow Directors to personally engage with current and future leaders. In fiscal year 2024, Board members were actively involved in the succession planning for the Company’s Chief Financial Officer and Vice President and President, Building Solutions EMEALA. Board members were involved in working with management to develop the talent pipeline and succession plans for each position, allowing both positions to be filled by internal candidates. Governance of the Company › Board Oversight of Talent and Succession Planning During fiscal year 2024, the Company announced that Mr. Oliver informed the Board of Directors that it was time to initiate the CEO succession plan following the Company’s substantial progress on its portfolio transformation. The Board continues to actively execute on the CEO succession plan, including conducting a comprehensive search for the Company’s next CEO with the assistance of a nationally recognized executive search firm to aide in the evaluation of internal and external candidates. We have implemented several measures that focus on ensuring accountabilities exist for attracting and developing diverse talent in our workforce. Since fiscal year 2023, our CEO and other senior leaders have diversity and inclusion objectives included in their annual performance goals. We have also committed to having a diverse talent pipeline by leveraging our business resource groups to facilitate external engagement and support of talent acquisition sourcing initiatives. Our global flagship Future Leaders Internship Program continues to expand the diversity of its outreach and focus on the skills needed to advance our growth initiatives. We actively develop diversity sourcing strategies and partner with external organizations that develop and supply diverse talent. Our Board also establishes steps to address emergency CEO succession planning in extraordinary circumstances. Our emergency CEO succession planning is intended to enable our Company to respond to unexpected emergencies and minimize potential disruption or loss of continuity to our Company’s business and operations. Governance of the Company › Board and Committee Oversight of Risk Management Board and Committee Oversight of Risk Management Oversight of Cybersecurity We understand that cybersecurity is an essential component of the Board’s oversight responsibility. The Board receives information technology and cybersecurity updates from senior management, including the Chief Information Officer, Chief Information Security Officer and Chief Technology Officer, several times per year. These updates cover the cybersecurity risks facing our enterprise information technology structure, as well as our digital products and services. The Governance and Sustainability Committee provides a deeper level of oversight through quarterly engagements with senior management, including the Chief Information Officer and Chief Information Security Officer, to review our cybersecurity program, including the highest risk areas and key mitigation strategies. Topics covered in fiscal year 2024 included: internal and external cybersecurity Governance of the Company › Oversight of Cybersecurity
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updates, active cybersecurity defense, security awareness, AI-enabled cybersecurity attacks and spear phishing. In fiscal year 2024, the Board enhanced its oversight capabilities by engaging an independent third-party cybersecurity advisor to advise, educate and support the Board. This has included regular interactions with the Governance and Sustainability Committee and the full Board, in addition to leading a cybersecurity education training session to enhance the Board’s awareness of emerging cybersecurity trends and risks. We have experienced, and expect to continue to experience, cyber threats and incidents; and the Governance and Sustainability Committee receives quarterly reports on any notable incidents that may have occurred during the quarter, as well as updates on cybersecurity events impacting the marketplace (whether or not we are impacted). In September 2023, we experienced a cybersecurity incident impacting a portion of our internal information technology systems. Promptly following the detection of the event, the Board was notified and briefed by management. The Board was frequently engaged with management throughout the response, remediation and aftermath of the incident, receiving multiple updates from management while providing oversight on incident response and investigation, remediation, public disclosure, risk management, regulatory requirements, internal controls and overall impacts to the Company. The Board, supported by its independent third-party cybersecurity advisor, has continued to exercise its oversight to understand the lessons learned from the incident and ensure that they are applied by management. Our cybersecurity policies, standards, and procedures apply to all users, creating awareness of threats and the importance of information security and cybersecurity across our workforce. The policies and standards were created using elements of recognized standards such as ISO 27001 and the NIST Cybersecurity Framework for the overall enterprise and ISA/IEC 62443 for automation and control system products. We have implemented cybersecurity policies throughout our operations, including designing and incorporating cybersecurity into the development process for our products and services. Our ERM process considers cybersecurity threat risks alongside other significant risks as part of our overall risk assessment process. Our vulnerability management program conducts assessments with specified frequencies for specific asset types to validate system health against known threats. We leverage multiple tools, which are routinely updated with new threat signatures, to continually respond to evolving threats identified as part of its threat detection capability. We also maintain a cybersecurity insurance policy. We engage with third parties to perform security assessments of our technology environments, including penetration testing and maturity assessments, as well as services to support threat analysis and incident detection and response. Oversight of Political Spending We participate in the public policy process in various ways including corporate government affairs activities designed to educate policymakers on key issues related to our business, political giving through the Johnson Controls Political Action Committee (“PAC”), and limited direct corporate political contributions. To promote transparency, we make this information publicly available on our website and through various government filings, as required by law. Our PAC is governed by a steering committee, which is chaired by our Executive Vice President & General Counsel and made up of business and functional leaders across the Company in the United States. The steering committee provides operational oversight and direction of PAC activities. The steering committee also reviews candidate recommendations and uses the PAC’s selection criteria to determine who will receive financial support. Our lobbying and political activities are overseen by our Chief Sustainability & External Relations Officer, who works closely with our legal department to ensure compliance with our political engagement policy. Our Executive Vice President & General Counsel, Chief Sustainability & External Relations Officer, and Chief Compliance Officer meet together regularly with the Chief Executive Officer and the senior leadership team to review legislative, regulatory and political developments. The Governance and Sustainability Committee provides primary board-level oversight in reviewing our corporate political activity and public policy efforts. Our Chief Sustainability & External Relations Officer reports to the Governance and Sustainability Committee on our governmental outreach, PAC and other political activities on a regular basis and the full Board is briefed on government relations matters at least annually. Director Nomination The Governance and Sustainability Committee periodically reviews its nomination criteria and qualifications to determine any need to revise such criteria and qualifications based upon corporate governance best practices and Johnson Controls’ needs at the time of the review. The current composition of our Board and Director nominees reflects these ongoing efforts and the continued importance of a diversity of skills, backgrounds, characteristics and experience to the Board. General criteria for the nomination of Director candidates include: • The highest ethical standards and integrity A willingness to act on and be accountable for Board decisions Governance of the Company › Director Nomination An ability to provide wise, informed and thoughtful counsel to executive leadership on a range of issues • Diversity of expertise and experience as well as diversity with respect to race, gender and ethnicity • A history of achievement that reflects superior standards for themselves and others • Loyalty and commitment to driving the success of the Company • An ability to take tough positions while at the same time working as a team player • Individual backgrounds that provide a portfolio of experience and knowledge commensurate with the Company’s needs The Company also strives to have all non-employee Directors be independent. In addition to having such Directors meet the NYSE definition of independence, the Board has set its own more rigorous standard of independence. The Governance and Sustainability Committee must also ensure that the members of the Board as a group maintain the requisite qualifications under NYSE listing standards for populating the Audit, Compensation and Talent Development and Governance and Sustainability Committees. In addition, the Governance and Sustainability Committee ensures that each member of the Compensation and Talent Development Committee is a “Non-Employee” Director as defined in the Securities Exchange Act of 1934 and is an “outside director” as defined in section 162(m) of the U.S. Code. As provided in its charter, the Governance and Sustainability Committee will consider Director candidates recommended by shareholders. To recommend a Director candidate, a shareholder should write to Johnson Controls’ Secretary at Johnson Controls’ current registered address: One Albert Quay, Cork, Ireland, T12 X8N6. Such recommendation must include: • The name and address of the candidate • A brief biographical description, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements set forth above • The candidate’s signed consent to serve as a Director if elected and to be named in the proxy statement • Evidence of share ownership of the person making the recommendation • All information required by Article 62 of our Memorandum and Articles of Association to be included in notices for any nomination by a shareholder of an individual for election to the Board
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The recommendation must also follow the procedures set forth in Articles 54 through 68 of our Memorandum and Articles of Association to be considered timely and complete in order to be considered for nomination to the Board. To be considered by the Governance and Sustainability Committee for nomination and inclusion in the Company’s Proxy Statement for the 2026 Annual General Meeting, shareholder recommendations for Director must be received by Johnson Controls’ Corporate Secretary no later than September 23, 2025. Once the Company receives the recommendation, the Company may deliver a questionnaire to the candidate that requests additional information about the candidate’s independence, qualifications and other information that would assist the Governance and Sustainability Committee in evaluating the candidate, as well as certain information that must be disclosed about the candidate in the Company’s proxy statement, if nominated. Candidates must complete and return the questionnaire within the time frame provided to be considered for nomination by the Governance and Sustainability Committee. To comply with the universal proxy rules, shareholders who intend to solicit proxies in support of Director nominees other than the Company’s nominees must also provide the additional information required by Rule 14a-19(b) under the Exchange Act. Such additional information must be received by the Corporate Secretary at the Company’s registered address by no later than January 12, 2026. No candidates were recommended by shareholders in connection with the 2025 Annual General Meeting. The Governance and Sustainability Committee from time to time employs an unrelated search firm to assist the Committee in Identifying candidates for Director when a vacancy occurs. The Governance and Sustainability Committee also receives suggestions for Director candidates from Board members. All of our nominees for Director are current members of the Board. In evaluating candidates for Director, the Governance and Sustainability Committee uses the qualifications described above and evaluates shareholder candidates in the same manner as candidates from all other sources. During fiscal year 2024, the Board, based on the recommendation of the Governance and Sustainability Committee, appointed Patrick Decker as a Director. Mr. Decker was referred to the Governance and Sustainability Committee following constructive dialogue with Elliott Investment Management L.P., one of the Company’s shareholders. Based on the Governance and Sustainability Committee’s evaluation of the current Directors, each nominee was recommended for election at the Annual General Meeting. Director Orientation All new Directors participate in our director orientation program during his or her first few months on our Board. New Directors receive an extensive suite of onboarding materials covering Director responsibilities, corporate governance practices and policies, Governance of the Company › Director Orientation business strategies, leadership structure, and long-term plans. They then participate in a series of meetings with management representatives from our business and functional areas to review and discuss information about the Company’s strategic plans, financial statements, and key issues, policies, and practices. Based on feedback from our Directors, we believe this onboarding approach provides new Directors with a strong foundation for understanding our businesses, connects Directors with members of management with whom they will interact, and accelerates their effectiveness to engage fully in Board deliberations. During fiscal year 2024, Messrs. Archer, Decker and Kotagiri participated in our director orientation program, meeting on-site with management representatives and subject matter experts to understand our business, strategy and risks. These meetings were supplemented with additional meetings with members of management during the year. Director Education Our Board believes that Director education empowers Directors to fulfill their roles and actively supports Board members in their continuous learning. Directors may enroll in continuing education programs at our expense on corporate governance and other critical issues relevant to the Directors’ service on the Board. The Corporate Secretary, in collaboration with the Governance and Sustainability Committee, advises Directors of opportunities for Director education in areas important to the Company and the overall functioning of the Board. Our Board also hears regularly from management on numerous subjects, including investor relations, human capital management, sustainability, technology, regulatory developments, data privacy, and cybersecurity. In addition, the Board periodically participates in site visits to our facilities. For example, in fiscal year 2024, our Board toured the fabrication facility of one of the Company’s hyperscale customers, where it engaged directly with the customer to observe and understand how the Company is developing and deploying cooling solutions at some of the most sophisticated hyperscale facilities around the globe. This visit was coupled with a deep dive into the Company’s hyperscale cooling business, where the Board received an overview of the Company’s hyperscale cooling portfolio and gained an understanding of the Company’s strategy and value proposition for hyperscale facilities, including data centers and chip fabrication facilities. The Board also conducted a visit to the Johnson Controls Advanced Development and Engineering Center, where the Board observed in-person technological demonstrations and engaged with manufacturing and engineering leaders. This engagement gave the Board a deeper understanding of how the Company is developing, testing and deploying new technologies and solutions designed to address customers’ needs and create competitive differentiation for the Company’s products and services. During 2024, the Board’s independent cybersecurity advisor led a dedicated education session on cybersecurity matters. During the session, the Board engaged in an interactive discussion on disruptive technologies, the cybersecurity threat environment, targeting of executives and directors, managing technological debt and how the Board can operate effectively to oversee continually evolving cybersecurity risks. Shareholder Engagement In fiscal year 2024, we continued our focus on regularly engaging with our shareholders. We reached out to holders of over 60% of our outstanding shares. Meetings were requested by eleven shareholders, representing approximately 46.8% of the Company’s outstanding shares. During these meetings, we discussed many topics including CEO succession, board refreshment, executive compensation, cybersecurity incident remediation and our sustainability strategy. Investors provided valuable comments and perspectives on the Company’s governance, risk and compensation practices and were generally supportive of the Company’s approach in these areas. Investors also expressed their approval of the Company’s corporate responsibility and sustainability efforts. This outreach and the corresponding discussions provide our Board with valuable insights into our shareholders’ views. We plan to continue to actively engage with our shareholders on a regular basis to better understand and consider their views. Board Committees To conduct its business the Board maintains three standing committees: Audit, Compensation and Talent Development, and Governance and Sustainability; and each of these NYSE-required committees are entirely composed of independent Directors. The Board also maintains an Executive Committee comprised of the Chairman, Lead Director and each committee chair that meets to review matters as delegated to it by the Board. All committees report on their activities to the full Board.
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The Lead Director may also convene “special committees” to review discrete matters that require the consideration of a Board committee, but do not fit within the mandate of any of the standing committees. Special committees report their activities to the full Board. To ensure effective discussion and decision making while at the same time having a sufficient number of independent Directors for its three standing committees, the Board is normally constituted of between ten and thirteen Directors. The minimum and maximum number of Directors is set forth in our Articles of Association. Governance of the Company › Board Committees The Governance and Sustainability Committee reviews the Board’s governance guidelines annually and recommends appropriate changes to the full Board. Board Meetings The Board meets at least four times annually and additional meetings may be called in accordance with our Articles of Association. The Board may also meet more frequently where warranted by business circumstances or other matters impacting the Company. Frequent board meetings are critical not only for timely decisions, but also for Directors to be well informed about our operations and other issues. One meeting is scheduled in conjunction with the Annual General Meeting of Shareholders and Board members are required to attend such meeting either in person or virtually. The Lead Director and the Chair of the Board are responsible for setting meeting agendas with input from the other Directors. Directors receive the agenda and materials for regularly scheduled meetings in advance. Best efforts are made to make materials available as soon as one week in advance, but no later than three days in advance. When practical, the same applies to special meetings of the Board. The Board’s intent is for Directors to attend all regularly scheduled Board and committee meetings. Directors are expected to use their best efforts to attend regularly scheduled Board and committee meetings in person. All independent Board members are welcome to attend any committee meeting. Committee meetings are normally held in conjunction with Board meetings. Major committee decisions are reviewed and approved by the Board. The Board Chair and committee chairs are responsible for conducting meetings and informal consultations in a fashion that encourages informed, meaningful and probing deliberations. Presentations at Board meetings are concise and focused, and they include adequate time for discussion and decision-making. An executive session of independent Directors, chaired by the Lead Director occurs at least once during most Board meetings. Mr. Tinggren ensures that the executive sessions are highly interactive and include robust discussions on the Company’s strategic and operational initiatives and related risks. They also include in-depth discussions on matters such as executive performance and succession planning. These discussions are key to informing the Board’s oversight role and appropriately challenging management. Formal Board meetings are supplemented by informal Board update calls hosted by the CEO and Lead Director. These calls are held on at least a monthly basis in the periods between Board meetings to keep the Directors current on important developments in the business as well as the status of key strategic and operational initiatives. These update calls provide Directors with the opportunity to stay current on matters impacting the Company, which facilitates more efficient and robust discussions at the regularly scheduled Board meetings. Directors may ask for additional information from, or meetings with, members of management at any time. The Board also makes periodic visits to our facilities to learn more about our products and customers. For example, in fiscal year 2024 our Board participated in on-site visits to the Johnson Controls Advanced Development and Engineering Center and the fabrication facility of one of the Company’s hyperscale customers. Board and Committee Calendars A calendar of agenda items for the regularly scheduled Board meetings and all regularly scheduled committee meetings is prepared annually by the Chair of the Board in consultation with the Lead Director, committee chairs, and other Directors. Board Communication Management speaks on behalf of Johnson Controls and the Board normally communicates through management with outside parties including shareholders, business journalists, analysts, rating agencies and government regulators. In certain circumstances Directors may also meet with shareholders to discuss specific governance topics. The Board has established a process for interested parties to communicate with members of the Board, including the Lead Director. If you have any concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board, you can reach the Johnson Controls Board of Directors via email at jciboard@jci.com. Depending upon the nature of the communication and to whom it is directed, the Corporate Secretary will: (a) forward the communication to the appropriate Director or Directors; (b) forward the communication to the relevant department within the Company; or (c) attempt to handle the matter directly (for example, a communication dealing with a share ownership matter). Shareholders, customers, vendors, suppliers and employees can also raise concerns at www.johnsoncontrolsintegrityhelpline.com. Inquiries can be submitted anonymously and confidentially. All Integrity helpline inquiries are received and reviewed by the Integrity Helpline manager, who is part of the Compliance function. A report summarizing all items received resulting in cases is prepared for the Audit Committee of the Board. The Integrity Helpline manager directs cases to the applicable department (such as customer service, human resources, or in the case of accounting or control issues, forensic audit) and follows up with the assigned case owner to ensure that the cases are responded to in a timely manner. The Board also reviews non-trivial shareholder communications received by management through the Corporate Secretary’s Office or Investor Relations. Governance of the Company › Board and Committee Evaluation Process Board and Committee Evaluation Process The Board views self-evaluation of Board and committee performance as an integral part of its commitment to continuous improvement. The Governance and Sustainability Committee annually reviews the evaluation process and considers ways to augment it. Governance of the Company › Board Advisors Board Advisors The Board and its committees (consistent with the provisions of their respective charters) may retain their own advisors, at the expense of the Company, as they deem necessary in order to carry out their responsibilities. Board Share Ownership To help align Board and shareholder interests, Directors are encouraged to own Johnson Controls ordinary shares or their equivalent, with the guideline set at five times the annual cash retainer. Directors are expected to attain this minimum share ownership guideline within five years of joining the Board. Once a Director satisfies the minimum share ownership recommendation, the Director will remain qualified, regardless of market fluctuations, under the guideline as long as the Director does not sell any shares. Director Independence
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To maintain its objective oversight of management, the Board consists of a substantial majority of independent Directors. Our Board annually determines the independence of each Director and nominee for election as a Director based on a review of the information provided by the Directors and the executive officers and a survey by our legal and finance departments. The Board makes these determinations under the NYSE Listed Company Manual’s independence standards and our Corporate Governance Guidelines, which are more restrictive than the NYSE independence standards, and are available on our website at www.johnsoncontrols.com under the heading “Investors-Corporate Governance.” Independent Directors: • are not former officers or employees of Johnson Controls or its subsidiaries or affiliates, nor have they served in that capacity within the last five years; • have no current or prior material relationships with Johnson Controls aside from their directorship that could affect their judgment; • have not worked for, nor have any immediate family members that have worked for, been retained by, or received anything of substantial value from Johnson Controls aside from his or her compensation as a Director; • have no immediate family member who is an officer of Johnson Controls or its subsidiaries or has any current or past material relationship with Johnson Controls; • do not work for, nor does any immediate family member work for, consult with, or otherwise provide services to, another publicly traded company on whose board of directors Johnson Controls’ CEO or other senior executive serves; • do not serve as, nor does any immediate family member serve as, an executive officer of any entity with respect to which Johnson Controls’ annual sales to, or purchases from, exceed the greater of two percent of either entity’s annual revenues for the prior fiscal year or $1,000,000; • do not serve, nor does any immediate family member serve, on either the board of directors or the compensation committee of any corporation that employs either a nominee for director or a member of the immediate family of any nominee for director; and • do not serve, nor does any immediate family member serve, as a director, trustee, executive officer or similar position of a charitable or non-profit organization with respect to which the Company or its subsidiaries made charitable contributions or payments in excess of the greater of $1,000,000 or two percent of such organization’s charitable receipts in the last fiscal year. Directors meet stringent definitions of independence and for those Directors that meet this definition, the Board will make an affirmative determination that a Director is independent. The Board has determined that all of the Director nominees, with the exception of Mr. Oliver, meet these standards and are therefore independent of the Company. Director Service Directors are elected by an affirmative vote of a majority of the votes cast (in person or by proxy) by shareholders at the Annual General Meeting. They are elected to serve for one-year terms (except in instances where a Director is elected during a special meeting), ending after completion of the next succeeding Annual General Meeting. If a Director resigns or otherwise terminates his or her directorship prior to the next Annual General Meeting, the Board may appoint an interim Director until the next Annual General Meeting. Any nominee for Director who does not receive an affirmative vote of a majority of votes cast (in person or by proxy) by shareholders at the Annual General Meeting is not elected to the Board. The rotation of committee chairs and members is considered on an annual basis to ensure diversity of Board member experience and variety of perspectives across the committees, but there is no strict committee chair rotation policy. Any changes Governance of the Company › Director Service in committee chair or member assignments are made based on committee needs, Director interests, succession planning, experience and availability, and applicable regulatory and legal considerations. Moreover, the value of rotation is weighed carefully against the benefit of committee continuity and experience. Each Director is required to tender their resignation from the Board at the Annual General Meeting following his or her 75th birthday and such resignation may not be waived by the Board. Directors are also expected to inform the Governance and Sustainability Committee of any significant change in their employment or professional responsibilities and are required to offer their resignation to the Board in the event of such a change. This allows for discussion with the Governance and Sustainability Committee to determine if it is in the mutual interest of both parties for the Director to continue on the Board. The Governance and Sustainability Committee is responsible for the review of all Directors and where necessary will take action to recommend to shareholders the removal of a Director for performance, which requires the affirmative vote of a majority of the votes represented (in person or by proxy) at a duly called shareholder meeting. Other Directorships, Conflicts and Related Party Transactions We recognize the importance of having Directors with significant experience in other businesses and activities; however, Directors are expected to ensure that other commitments, including outside board memberships (including board leadership roles), do not interfere with their duties and responsibilities as members of the Board. In order to provide sufficient time for informed participation in their Board responsibilities, non-executive Directors are required to limit their external directorships of other public companies to three and Audit Committee members are required to limit their audit committee membership in other public companies to two. The Board may, in its discretion, waive these limits in special circumstances. When a Director or the CEO intends to serve on another public company board, the Governance and Sustainability Committee is required to be notified. The Governance and Sustainability Committee reviews the possibility of conflicts of interest or time constraints and must approve the CEO’s or Director’s appointment to the outside board. The Governance and Sustainability Committee also considers each Director’s outside commitments, including continued compliance with the Board’s limits on external directorships, when nominating or re-nominating Directors for election. Each Director is required to notify the Corporate Secretary of any potential conflicts. The CEO may serve on no more than one other public company board. The CEO shall resign or retire from the Board upon resigning or retiring from his role as CEO, following a transition period mutually agreed upon between the CEO and the Compensation and Talent Development Committee. The Company has a formal, written procedure intended to ensure compliance with the related party provisions in our Code of Ethics and with our Corporate Governance Guidelines. For the purpose of the policy, a “related party transaction” is a transaction in which we participate and in which any related party has a direct or indirect material interest, other than ordinary course, arms-length transactions of less than 1% of the revenue of the counterparty. Transactions exceeding the 1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a Director’s independence, must be approved in advance by our Governance and Sustainability Committee. Any related party transaction in which an executive officer or a Director has a personal interest, or which could present a possible conflict under the Code of Ethics, must be approved in advance by a majority of disinterested Directors, following appropriate disclosure of all material aspects of the transaction.
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Under the rules of the Securities and Exchange Commission, public issuers such as Johnson Controls must disclose certain “related person transactions.” These are transactions in which Johnson Controls is a participant where the amount involved exceeds $120,000, and a Director, executive officer or holder of more than 5% of our ordinary shares has a direct or indirect material interest. Although Johnson Controls engaged in commercial transactions in the normal course of business with companies where Johnson Controls’ Directors and Director nominees were employed and served as officers, none of these transactions exceeded 1% of Johnson Controls’ gross revenues and these transactions are not considered to be related party transactions. Code of Ethics We have adopted the Code of Ethics, which applies to all employees, officers, and Directors of Johnson Controls. The Code of Ethics meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K and applies to our CEO, Chief Financial Officer and Chief Accounting Officer, as well as all other employees. The Code of Ethics also meets the requirements of a code of business conduct and ethics under the listing standards of the NYSE. The Code of Ethics is posted on our website at www.johnsoncontrols.com under the heading “About Us — Our Company — Ethics and Compliance.” We will also provide a copy of the Code of Ethics to shareholders upon request. We disclose any amendments to the Code of Ethics, as well as any waivers for executive officers or Directors on our website at www.johnsoncontrols.com under the heading “About Us — Our Company — Ethics and Compliance.” The Board of Directors annually certifies their compliance with the Code of Ethics. The Company maintains established procedures by which employees may anonymously report a possible violation of the Code of Ethics. The Audit Committee maintains procedures for the receipt, retention, and treatment of complaints received by the Governance of the Company › Code of Ethics Company regarding accounting, internal accounting controls, or auditing matters. The Audit Committee also maintains procedures for employees to report concerns regarding questionable accounting or auditing policies or practices on a confidential, anonymous basis. Insider Trading Policy We have adopted an insider trading policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, employees and independent contractors that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to the Company. Directors, executive officers, employees and other related persons may not buy, sell or engage in other transactions in the Company’s shares while aware of material non-public information; buy or sell securities of other companies while aware of material non-public information about those companies that they became aware of as a result of business dealings between the Company and those companies; or disclose material non-public information to any unauthorized persons outside of the Company. The policy also restricts trading and other transactions for a limited group of Company employees (including executives and directors) to defined window periods that follow our quarterly earnings releases and restricts trading and other transactions following announcements of a share repurchase program. A copy of our Insider Trading Policy is filed as Exhibit 19.1 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2024. Governance of the Company › Sustainability Sustainability At Johnson Controls, sustainability is at the heart of our business and fundamental to everything we do. As a global leader in smart, healthy and sustainable buildings, and with employees in more than 150 countries around the world, Johnson Controls provides innovative products and services that make spaces healthier and empower customers and communities to consume less energy, reduce carbon, and conserve resources. Our emissions commitments, approved by the Science-Based Targets initiative, are to reduce Scope 1 and 2 emissions 55% and Scope 3 emissions 16% by 2030 vs. a 2017 baseline. We are also committed to achieve net zero scope 1 and 2 carbon emissions in alignment with The Climate Pledge, by 2040. The management of Johnson Controls is responsible for developing our overall mission and strategic plan on an enterprise and business level. Our Board of Directors retains oversight authority, overseeing the implementation of the strategy and monitoring the effectiveness of management policies and decision making to ensure the company is managed to achieve its objectives. Our Enterprise ESG Governance Program includes four levels of oversight: Board of Directors, Executive Committee, ESG Leadership Committee, and Enterprise ESG Workstreams. All sustainability topics and associated strategies, targets, and metrics fall into one of six ESG Workstreams: climate; product stewardship; sustainable value chain; high performance culture; social impact; and governance. Ambitious vision. Impactful, measurable results. Our Enterprise ESG Workstreams are responsible for developing our long-term strategy and achieving annual commitments.
Governance
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Current Directors | | | | | Mr. Timothy M. Archer | $80,069 | $180,000 | $260,069 | | Ms. Jean Blackwell (GC) | $170,000 | $180,000 | $350,000 | | Mr. Pierre Cohade | $145,000 | $180,000 | $325,000 | | Mr. Patrick K. Decker | $24,429 | $105,000 | $129,429 | | Mr. W. Roy Dunbar | $145,000 | $180,000 | $325,000 | | Ms. Gretchen R. Haggerty (AC) | $170,000 | $180,000 | $350,000 | | Dr. Ayesha Khanna | $145,000 | $180,000 | $325,000 | | Mr. Seetarama (Swamy) Kotagiri | $80,069 | $180,000 | $260,069 | | Ms. Simone Menne | $145,000 | $180,000 | $325,000 | | Mr. Jürgen Tinggren (L) | $185,000 | $180,000 | $365,000 | | Mr. Mark Vergnano (CC)(2) | $158,805 | $180,000 | $338,805 | | Mr. John D. Young | $145,000 | $180,000 | $325,000 | | Retired Director | | | | | Mr. Michael E. Daniels(2) | $76,593 | N/A | $76,593 |
Navigating the CD&A
| Executive Compensation Framework | Executive Compensation Philosophy and Principles | Elements of Executive Compensation | Page 51 | | Executive Compensation Management | Roles in Determining Executive Compensation | Use of an Independent Compensation Consultant | Annual Say-on-Pay Vote | Shareholder Engagement | Use of Market Data | Metric Selection and Goal Setting | Page 54 | | Fiscal 2024 Compensation Decisions and Outcomes | Base Salary | Annual Incentive Performance Program | Long-Term Equity Incentive Awards | Retention Awards | Page 58 | | Additional Information | Other Executive Compensation Policies | Executive Benefits and Perquisites | Executive Severance and Change-in-Control Policy | Global Executive Assignment Agreement | Tax and Accounting Considerations | Page 66 |
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| Pay-for- performance | ✓ Set majority of compensation as variable and at-risk ✓ Tie incentives to performance against financial, operational, strategic and individual goals ✓ Use quantifiable and measurable performance metrics and goals that are clearly disclosed ✓ Provide significant upside and downside potential for superior and low performance | | Target pay appropriately | ✓ Conduct competitive market based total compensation benchmark analysis against similarly sized industrial companies for comparable positions | | Align interests with our stakeholders | ✓ Design programs that discourage unnecessary or excessive risk-taking ✓ Cap payout opportunities under the incentive plans ✓ Require minimum vesting periods for equity awards ✓ Reward long-term financial results that drive value creation through a balanced equity mix ✓ Operate meaningful share ownership guidelines ✓ Maintain a pay recoupment (i.e., claw back) policy that exceeds regulatory requirements ✓ Prohibit insider trading, hedging and pledging of Company stock ✓ Maintain Equity Award Grant Policy ensuring appropriate policies and practices with respect to equity awards ✓ Engage with shareholders on executive compensation matters ✓ Engage an independent compensation consultant to provide analysis and advice ✓ Conduct an annual say-on-pay vote | | Avoid poor governance practices | ✘ No tax gross-ups on any change-in-control benefits ✘ No single-trigger accelerated vesting on a change-in-control (double-trigger provisions) ✘ No discounting, reloading or re-pricing of share options without shareholder approval ✘ No guaranteed compensation or guaranteed increases ✘ No excessive perquisites ✘ No employment agreements with executive officers, except where legally required, in which case they follow market norms ✘ No dividends paid on unvested restricted share units or performance share units until such awards vest |
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| Element | Purpose | Performance Alignment | Recent Changes | | Base Salary | Recognize role scope, skills required, performance, contribution, leadership, and potential | Individual performance considered when determining changes | Mr. Manning received a 2% base salary increase recognizing performance and aligning with his competitive market position. Mr. Vandiepenbeeck received a 25% base salary increase in February 2024 recognizing his promotion to chief financial officer and aligning to his new competitive market position. The other NEOs did not receive increases in their base salaries for fiscal 2024. | | Annual Incentive Award | Tie compensation to the successful execution of our operating plan and strategic goals as well as Business Unit and individual performance | Opportunity of 0%-200% of target based on performance Based on performance against three equally weighted financial metrics: EBIT Growth, revenue growth, and free cash flow conversion; a strategic initiative modifier (+/- 15%) based on performance against pre-established shared strategic priorities; a Business Unit performance modifier; and an individual modifier (+10%/-25%) | Mr. Vandiepenbeeck received a 10% increase to his target opportunity percent in February 2024 recognizing his promotion to chief financial officer and aligning to his new competitive market position. The other NEOs did not receive increases to their target opportunity percent for fiscal 2024. | | Long-Term Incentive Equity Awards | Attract, retain and motivate executive talent; align interests with our shareholders and value realization with stock price; drive accountability for long-term performance | PSUs (50%), share options (25%) and restricted share units (“RSUs”) (25%) PSUs are based on performance against three equally weighted measures assessed over three years: cumulative pre-tax earnings, recurring revenue and relative TSR versus the S&P 500 Industrials; realized PSU values vary based on the value of Johnson Controls share price Share option and RSU value realization are tied to Johnson Controls’ stock price performance PSUs cliff vest after three-year performance period; Options vest 50% after two years and 50% after three years; RSUs vest equally over three years | Mr. Manning received an 8% increase in his target long-term incentive compensation awards to align with his competitive pay positioning. Mr. Vandiepenbeeck received an increase of 76.7% in his target long-term incentive in February 2024 recognizing his promotion to chief financial officer. The other NEOs did not receive increases in their target long- term incentive compensation for fiscal 2024. |
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Use of an Independent Compensation Consultant The Committee has the sole authority to engage the services of outside advisors, experts, and others to assist in performing its duties. Since December 2017, the Committee has engaged Farient Advisors. Other than the services it provided to the Committee, Farient Advisors did not provide any services to the Company during fiscal 2024. The Committee has considered and assessed all relevant factors that could give rise to a potential conflict of interest with respect to the work performed. Based on this review, the Committee has determined that Farient Advisers is independent of the Company and its management, and did not identify any conflict of interest. Annual Say-on-Pay Vote In designing our executive compensation program, the Committee annually presents a ‘say-on-pay’ vote to our shareholders. In March 2024, we received approximately 93.8% support, indicating that shareholders representing a majority of our shares supported our executive compensation program. Shareholder Engagement Johnson Controls is committed to maintaining ongoing dialogue with our shareholders to enable us to solicit and respond to feedback about our executive compensation programs in a timely manner. The feedback that we receive through our bi-annual Compensation Discussion & Analysis › Shareholder Engagement engagement efforts is an important input into discussions and decisions regarding executive compensation, in addition to market practices, the advice of our independent compensation consultant and business strategy. During fiscal 2024, we reached out to our top 25 shareholders, representing over 60% of our outstanding shares. Eleven investors representing approximately 46.8% of our outstanding shares, requested meetings. Consistent with prior years, we heard that our shareholders are pleased with our approach to executive compensation. Shareholders were supportive of the Committee’s efforts to drive management accountability by applying a negative discretionary adjustment to the Company’s fiscal 2023 annual incentive plan based on below threshold free cash flow conversion performance. We believe, based on our analysis, the input of our independent compensation consultant and external feedback received, both from our directed outreach and our regular year-round engagements between management and our shareholders, that our executive compensation program is well aligned with shareholders’ interests. Several investors provided feedback requesting the Committee consider the reintroduction of return on invested capital (ROIC) as a performance measure in the Company’s long-term incentive programs. The Committee has reviewed this feedback and continues to assess ROIC along with other potential incentive plan metrics as part of its regular incentive plan design process to ensure alignment with the Company’s business transformation and long-term strategic focus. Investors also raised topics related to CEO succession, board refreshment, our board governance structure and our sustainability strategy. Several of these topics are discussed in detail on pages 28, 30 and 39 of our Proxy Statement. Johnson Controls is committed to ongoing engagement as it provides helpful insight into the real-time perspectives of our shareholders. Compensation Discussion & Analysis › Use of Market Data Use of Market Data The Committee engages the independent compensation consultant to undertake an annual review of the compensation peers that are used to provide insight into market competitive pay levels and practices. In partnership with our independent compensation consultant, a robust process has been established to appropriately assess the relevance of different companies in the context of making compensation comparisons. As with prior years, an established process was used to assess the peer group composition and to establish the fiscal 2024 peers.
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| Fiscal 2024 Compensation Peers | | | • 3M Company • Carrier Global Corporation(*) • Caterpillar Inc. • Cummins Inc. • Deere & Company • Eaton Corporation(*) • Emerson Electric Co.(*) | • General Dynamics Corporation • Honeywell International, Inc.(*) • Otis Worldwide Corporation • Parker Hannifin Corporation • Stanley Black & Decker Inc. • Trane Technologies(*) |
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Compensation Discussion & Analysis › Annual Incentive Performance Program (AIPP) In December 2023, the Committee approved the fiscal 2024 AIPP performance measures and their associated goals. Financial measures remained unchanged, consisting of earnings before interest and taxes (“EBIT”) growth, revenue growth, and enterprise free cash flow conversion. The Strategic Incentive Modifier remained unchanged to further align with our business strategy, rewarding our ability to drive services growth. These measures, defined below, were selected as they focus our executive officers on the Company’s performance, profitability, operating strength and efficiency. Once the fiscal 2024 AIPP funding is established, the CEO assesses each Business Unit’s financial, sustainability, diversity and organizational health results to determine specific Business Unit AIPP pools (total combined pool not to exceed the overall pool created by the financial and strategic results). Participants within our various functions will align to the business they support. Finally, an individual contribution modifier is applied. The CEO assesses individual performance for the NEOs other than himself; the Committee assesses the CEO’s performance. Compensation Discussion & Analysis › Annual Incentive Performance Program (AIPP)
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| | | Fiscal 2024 Performance Goals | | | | Payout Factor | | | Financial Performance Metric | Weight | Threshold | Target | Maximum | Actual | Unweighted | Weighted | | EBIT Growth | 1/3 | 7.0% | 12.6% | 19.0% | 8.8% | 66% | 96% | | Revenue Growth | 1/3 | 3.0% | 5.5% | 8.0% | 3.6% | 62% | | | Enterprise Free Cash Flow Conversion | 1/3 | 80% | 90% | 100% | 96% | 160% | |
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| NEO | Target Opportunity (% salary) | Target Opportunity | Financial and Strategic Payout Factor | Business Unit Modifier | Individual Modifier | Total Payout Factor | Fiscal 2024 Annual Incentive Award | | George R. Oliver | 160% | $2,400,000 | 96% | 100% | 100% | 96% | $2,304,000 | | Marc Vandiepenbeeck(*) | 96.6% | $724,795 | 96% | 100% | 100% | 96% | $695,803 | | Lei Schlitz | 90% | $697,500 | 96% | 100% | 100% | 96% | $669,600 | | Nate Manning | 90% | $675,000 | 96% | 100% | 100% | 96% | $647,999 | | John Donofrio | 90% | $630,000 | 96% | 100% | 110% | 106% | $665,280 |
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Mr. Vandiepenbeeck received a 10% increase to his target opportunity in February 2024 to recognize him for his promotion to EVP & Chief Financial Officer. His total target opportunity for fiscal 2024 was 96.6%, reflecting a prorated 33.6% at 90% and a prorated 66.4% at 100%, based on the number of days at each target opportunity. Compensation Discussion & Analysis › Long-Term Equity Incentive Awards Long-Term Equity Incentive Awards Another key element in the compensation of our executive team is long-term equity incentive awards, which tie a significant portion of compensation to the Company’s performance over time. In fiscal 2024, three different types of long-term incentive awards were granted to our NEOs: In combination, we believe these grants provide a balanced focus on sustainable long-term shareholder value creation and retention of key executives in the interests of our collective stakeholders. They are also reflective of market practice within our compensation peer group. The total target grant value is established using applicable benchmarking and other market data to determine a competitive rate intended to balance the objectives of ensuring appropriate pay positioning in the market while enabling the Company to attract, recruit and retain high-performing talent in a competitive environment.
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| Fiscal 2024 Long-Term Equity Grant | | | | | | NEO | Target Value of Share Options | Target Value of RSUs | Target Value of PSUs | Total Target Value of Award | | George R. Oliver | $2,750,000 | $2,750,000 | $5,500,000 | $11,000,000 | | Marc Vandiepenbeeck(*) | $340,000 | $1,382,500 | $680,000 | $2,402,500 | | Lei Schlitz | $687,500 | $687,500 | $1,375,000 | $2,750,000 | | Nate Manning | $567,000 | $567,000 | $1,134,000 | $2,268,000 | | John Donofrio | $550,000 | $550,000 | $1,100,000 | $2,200,000 | | Olivier Leonetti | $800,000 | $800,000 | $1,600,000 | $3,200,000 |
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(*) In February 2024, Mr. Vandiepenbeeck received an additional $1,042,500 RSU grant, reflecting the prorated increase in his target long-term incentive compensation award in recognition of his promotion to EVP & Chief Financial Officer Fiscal 2024-2026 Performance Share Units Performance Share Units (“PSUs”) help to ensure our executives’ pay is directly linked to the achievement of strong, sustained long-term operating performance. The balance of metrics focuses senior leaders on making strategic investments that optimize long-term shareholder value. For fiscal 2024-2026 awards, the Committee remained committed to using three-year cumulative metrics and maintaining a balanced emphasis on pre-tax earnings, recurring revenue and TSR aligned with our strategy to drive growth through digitally-enabled products, services and solutions over the building lifecycle. Compensation Discussion & Analysis › Fiscal 2024-2026 Performance Share Units
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Compensation Discussion & Analysis › Fiscal 2024-2026 Performance Share Units The Committee set the earnings growth and recurring revenue thresholds, targets and maximums for the fiscal 2024-2026 performance period based on Johnson Controls’ long-term strategic plan, as well as consideration of long-term performance expectations for the S&P 500 Industrials. This approach ensures that we provide competitive incentive compensation based on market competitive performance while continuing to focus on our strategic long-term commitments. Given the commercial sensitivity of our long-term goals, the 2024 PSU performance goals will be disclosed at the conclusion of the three-year performance period.
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| | | Fiscal 2024-2026 Performance Goals | | | | Performance Metric | Weight | Threshold | Target | Maximum | | Pre-tax Earnings Growth | 1/3 | The three-year performance goals associated with these measures will be disclosed at the conclusion of the performance period | | | | Recurring Revenue | 1/3 | | | | | TSR Relative to S&P 500 Industrials | 1/3 | ≥25th percentile | 50th percentile | ≥75th percentile |
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| Performance Metric | Below Threshold | Threshold | Target | Maximum | | Payout (% of Target) | 0% | 50% | 100% | 200% |
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The payout opportunity in respect of each element is calculated separately and weighted to arrive at a final payout. The payout is calculated using interpolation between threshold and target, and target and maximum. Fiscal 2022-2024 Performance Share Units The 2022-2024 PSU awards were subject to three independently weighted measures, Pre-tax Earnings Growth, Recuring Revenue and Relative TSR. While we experienced success achieving growth and positioning ourselves for the future, we were not able to fully overcome the impacts of headwinds incurred during the performance period, negatively impacting our ability to fully achieve some of the ambitious goals we set at the onset of fiscal 2022. This was evidenced through above target Recurring Revenue being offset by achievement of Pre-Tax Earnings Growth and TSR relative to S&P 500 Industrials at levels below target. Based on cumulative performance over three-years, awards vested at 84.3% of target, reflecting our commitment to pay for performance.
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| | | Fiscal 2022-2024 Performance Goals | | | | | | | Performance Metric | Weight | Threshold | Target | Maximum | Actual Performance | Results | Weighted Performance | | Pre-tax Earnings Growth | 1/3 | $818 | $1,000 | $1,435 | $888 | 69% | 23.1% | | Recurring Revenue | 1/3 | $208 | $535 | $881 | $634 | 129% | 42.9% | | TSR Relative to S&P 500 Industrials | 1/3 | ≥ 25th percentile | 50th percentile | ≥ 75th percentile | 28th percentile | 55% | 18.4% | | 2022-2024 PSU Final Payout Percentage | | | | | | | 84.3% |
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Fiscal 2024 Share Options and Restricted Share Units By awarding share options and RSUs, we link long-term incentives directly to our share price. If our share price decreases, so does the value of the executive officer’s compensation. Share options and RSUs also help us maintain competitive compensation levels in the market and retain high-performing employees through multi-year vesting requirements. We valued fiscal 2024 share options using a Black-Scholes valuation. Their strike price is equal to the closing price of our ordinary shares on the date of the grant. Fifty percent of each share option award vests two years after the date of grant, and the other fifty percent vests three years after the date of grant. Share option vesting is subject to continued employment, with earlier vesting upon retirement, and share options have a ten-year exercise term. The Committee does not permit or engage in “backdating,” repricing or cash buyout of share options. We value RSUs based on the closing price of our shares at the date of grant. RSUs generally vest in equal installments over three years. Compensation Discussion & Analysis › Retention Awards Retention Awards During fiscal 2024, the Committee approved one-time equity retention awards for Marc Vandiepenbeeck, Lei Schlitz, and Nate Manning, with the RSUs vesting 100% after a two-year period. The objectives of these special one-time awards are to recognize each recipient’s strong performance and to ensure the continuity of our leadership throughout a time of transition, including our ongoing portfolio simplification efforts and the execution of the Company’s CEO succession plan. The amount of these awards was set at an amount determined to be appropriate and retentive to ensure each executive remains motivated and committed to the Company during the retention period.
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| NEO | Target value of one-time RSU award | | Marc Vandiepenbeeck | $2,750,000 | | Lei Schlitz | $2,750,000 | | Nate Manning | $2,750,000 |
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Termination and recoupment provisions have been included in these awards to provide additional protection to shareholders. Termination provisions included in the one-time RSU award are structured to reflect various potential termination scenarios. • Involuntary not for cause termination: award accelerated on a pro-rated basis based on the number of full months actively employed • Death or disability: award accelerated in full All other scenarios, including retirement, voluntary and ‘for cause’ termination: full forfeiture of the outstanding unvested award Compensation Discussion & Analysis › Additional Information Additional Information Other Executive Compensation Policies To further ensure the alignment of executive interests with those of our shareholders, the Committee has approved additional compensation-related policies that apply to our NEOs. Share Ownership Guidelines NEOs are required to hold specified amounts of Johnson Controls shares. If an executive does not meet the minimum guideline within five years, they cannot sell any shares until they meet the requirement. Until the guideline is met, executives are required to retain after-tax shares resulting from an exercise of share options and must retain shares resulting from the vesting of RSUs and PSUs. All shares directly or indirectly owned by, and unvested RSUs granted to, NEOs count towards the requirement. Share options and non-vested PSUs do not count toward the requirement.
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At the end of fiscal 2024, all NEOs were in compliance with their ownership requirements or had additional time to meet the minimum guideline, demonstrating the strong alignment of interests between our NEOs and Johnson Controls’ stakeholders. Compensation Recoupment Policy The Committee maintains a Compensation Recoupment Policy that complies with the SEC’s regulations on the recovery of erroneously awarded compensation and the related NYSE listing standards. Our policy provides that, if we are required to prepare a qualifying accounting restatement, then, unless an exception applies, we will recover reasonably promptly the excess of (1) the amount of incentive-based compensation received during the three completed years immediately preceding the date we are required to prepare the accounting restatement by any person who served as a covered officer at any time during the applicable performance period over (2) the amount that would have been received had it been determined based on the restated financials. Our recoupment policy also provides that, if the Committee determines that a covered officer has engaged in certain types of misconduct resulting in material reputational harm, then we will be entitled, if so instructed by the Committee, to (1) cause the full or partial forfeiture or reduction of any unearned performance incentives or unexercised or unvested equity-based awards then held by any covered officer, and (2) obtain full or partial reimbursement from the covered officer of any performance incentives or equity-based awards previously paid to, or earned by, the covered officer during the period of misconduct, in each case to the extent permitted by applicable law. Our policy also authorizes us to recover from culpable individuals’ certain compensation amounts if the Criminal Division of the United States Department of Justice determines criminal resolutions are warranted. Insider Trading, Anti-Hedging And Anti-Pledging Policy Directors, executive officers, employees and other related persons may not buy, sell or engage in other transactions in the Company’s shares while aware of material non-public information; buy or sell securities of other companies while aware of material non-public information about those companies that they became aware of as a result of business dealings between the Company and those companies; disclose material non-public information to any unauthorized persons outside of the Company. The policy also restricts trading for a limited group of Company employees (including executives and directors) to defined window periods that follow our quarterly earnings releases and announcements of a share repurchase program. In addition, the Company’s directors, executive officers, employees and other related persons are prohibited from: • Pledging any Company securities held by them or their families as security for a loan, including by holding such securities in a margin account; and • Trading in puts, calls or any other derivative securities relating to in the Company’s shares, and engaging in hedging or monetization transactions relating to in the Company’s shares (including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds) or short sales of the Company’s shares. Equity Grant Policy As part of its continued monitoring of and response to trends and developments with respect to equity award grant practices, the Committee has established an Equity Award Grant Policy. The policy describes the Company’s delegated authority to grant Compensation Discussion & Analysis › Other Executive Compensation Policies equity awards, codifies pre-existing equity award practices, and establishes standardized schedules for granting equity awards. Under the Equity Award Grant Policy, annual equity awards, including the Company’s annual option, RSU and PSU awards, will generally have a grant date of the first business day of December and any off-cycle or special equity awards will generally have a grant date of the second business day following the next quarterly earnings release after the date of approval of such award. The Committee’s objective in adopting the policy was to establish standard, predetermined practices to avoid any actual or perceived market timing of equity awards and to ensure the Company maintains appropriate policies and practices with respect to equity award grants. The Committee may, however, modify or make exceptions to the general timing parameters in the policy based on special circumstances, the needs of the business or other appropriate considerations. Neither the Committee nor our Chief Executive Officer takes into account material nonpublic information in determining the timing and terms of equity-based awards, and we have not timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. Executive Benefits and Perquisites 401(k) Plan All U.S. employees are eligible for the 401(k) plan, including our NEOs. Participants can contribute up to a specified percentage of their compensation on a pre-tax or after-tax (Roth) basis; however, executive officers’ percentages may be lower than other participants due to IRS requirements applicable to the 401(k) plan. Based on Company performance, we matched 100% of each dollar an employee contributes up to 4% of the employee’s eligible pay, and 50% of each additional dollar up to a total of 6% of the employee’s eligible pay. In addition, the Company makes a varied annual retirement contribution for eligible employees. This group of employees includes all NEOs. The contribution for this group of employees is usually between 1% and 5% of the participant’s eligible compensation, based on the participant’s age and participation or service. Both the matching contribution and the annual retirement contribution are subject to vesting requirements. Retirement Restoration Plan The Internal Revenue Code limits the benefits we can provide to employees under the 401(k) plan, including the annual retirement contribution. Thus, we sponsor the Retirement Restoration Plan, which allows all employees whose annual retirement contributions are affected by these Internal Revenue Code limits to receive the full intended amount of the additional annual retirement contributions without regard to such limits. All employees whose annual retirement contributions under the 401(k) plan are limited, including NEOs, are eligible for the Retirement Restoration Plan. Prior to January 1, 2018, the Retirement Restoration Plan also provided for 401(k) spillover deferrals and employer matching contributions for eligible participants. Those benefits were eliminated as of January 1, 2018, for participants other than those participants who were officers of the Company immediately following the merger between Johnson Controls, Inc. and a subsidiary of Tyco International plc in 2016 (the “Merger”), including Messrs. Oliver and Donofrio and certain other high-level employees who participated in the Retirement Restoration Plan prior to January of 2018. Executive Deferred Compensation Plan and Senior Executive Deferred Compensation Plan As of January 1, 2018, to integrate our plans following the Merger, we adopted a Senior Executive Deferred Compensation Plan. The Senior Executive Deferred Compensation Plan allows participants, including our NEOs, to defer base salary and annual bonus compensation and the associated taxes until retirement or termination of employment to assist such participants with personal financial planning. The investment options under the Senior Executive Deferred Compensation Plan mirror investment options in our 401(k) Plan, which includes a company stock fund. Perquisites
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We provide a limited amount of perquisites to our executive officers, which we believe are reasonable and consistent with market practice. We maintain a strict policy regarding the eligibility and use of these benefits. The Committee grants each executive officer a perquisite allowance of 5% of their base salary annually. Upon termination, any unused funds are forfeited. Allowable perquisites include: • Financial and tax planning • Personal use of corporate aircraft capped at $10,000 per year for the NEOs, other than the CEO, with such amounts calculated pursuant to the Standard Industry Fare level, or SIFL rate • Executive physical The CEO is encouraged to use the corporate aircraft for both business and personal use to enhance his productivity, maintain confidentiality, ensure personal security and protect his health and wellbeing particularly during the pandemic. The Committee has limited the CEO’s annual personal usage of company aircraft to an annual incremental cost of $200,000. Any such personal usage of the corporate aircraft in excess of this amount is required to be reimbursed to Johnson Controls by the CEO based on the aggregate incremental cost of such usage. Compensation Discussion & Analysis › Executive Severance and Change-in-Control Policy Executive Severance and Change-in-Control Policy The Executive Severance and Change-in-Control Policy applies to all NEOs.
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| | Change-in-Control | Severance | | Triggers | • Involuntary termination other than for Cause, permanent disability or death within the period beginning 60 days prior to and ending two years following a change-in-control • Good reason resignation within the same period | • Involuntary termination other than for Cause, permanent disability or death. | | Cash Severance | Base salary + target annual bonus | | | Severance Multiple | CEO: 3X Other NEOs: 2X | CEO: 2X Other NEOs: 1.5X | | Claims Release | Required | | | Benefits Continuation | Aligned with severance multiple | | | Equity Acceleration | • Pro-rated equity acceleration based on number of months worked during vesting period (pro-rated PSUs based on target performance) • For awards granted after March 10, 2021, if the 2021 Equity and Incentive Plan would provide more favorable result, then its treatment would govern; Under the Plan, the Committee may provide either for adjustment/assumption of awards that includes a right to full vesting upon an involuntary termination or termination for Good Reason or full accelerated vesting (assuming higher of target or trend for PSUs) and a cash settlement upon the change-in-control | • Pro-rated equity acceleration based on number of months worked during vesting period (pro-rated PSUs based on target performance earned at vesting). | | Annual Incentive Performance Program | • Payment of a prorated portion of the target bonus amount for the year of termination | | | Excise Tax Gross-Up | None | | | Restrictive Covenants | • Unlimited time for non-disparagement, trade secrets and confidential information • Two-year post-termination non-solicitation of employees and customers • One and one-half year post-termination non-compete • Employee must affirmatively consent to be bound by these covenants as a condition of plan participation | |
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| Name and Principal Position | Year ($) | Salary ($)(1) | Bonus ($)(2) | Stock/Unit Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($)(5) | Total ($)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | George Oliver Chairman & Chief Executive Officer | 2024 | 1,500,000 | — | 8,312,634 | 2,749,992 | 2,304,000 | 542,360 | 15,408,986 | | | 2023 | 1,500,000 | — | 9,301,583 | 2,749,983 | 1,773,600 | 557,480 | 15,882,646 | | | 2022 | 1,500,000 | — | 9,007,740 | 2,749,982 | 1,924,800 | 504,680 | 15,687,202 | | Marc Vandiepenbeeck(7) Executive Vice President & Chief Financial Officer | 2024 | 698,077 | — | 4,820,130 | 339,996 | 695,803 | 786,772 | 7,340,778 | | Lei Schlitz Vice President & President, Global Products | 2024 | 775,000 | — | 4,828,112 | 687,495 | 669,600 | 75,641 | 7,035,848 | | | 2023 | 685,577 | 900,000 | 6,245,277 | 687,482 | 453,316 | 39,013 | 9,010,665 | | Nate Manning(8) Vice President and President, Building Solutions North America | 2024 | 750,000 | — | 4,463,891 | 566,995 | 647,999 | 71,986 | 6,500,871 | | John Donofrio Executive Vice President, General Counsel | 2024 | 700,000 | — | 1,662,506 | 549,998 | 665,280 | 122,502 | 3,700,286 | | | 2023 | 700,000 | — | 1,860,272 | 549,997 | 465,570 | 145,071 | 3,720,909 | | | 2022 | 700,000 | — | 1,801,465 | 549,985 | 505,260 | 141,022 | 3,697,732 | | Olivier Leonetti(9) Former Executive Vice President & Chief Financial Officer | 2024 | 275,846 | — | 2,418,179 | 799,998 | — | 64,096 | 3,558,119 | | | 2023 | 815,000 | — | 2,705,829 | 799,984 | 602,285 | 72,423 | 4,995,521 | | | 2022 | 775,000 | — | 2,374,653 | 724,991 | 621,550 | 37,700 | 4,533,894 |