DEF 14A of Esco Technologies Inc
Filed Dec 10, 2025 · FY20250001104659-25-119876
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| 2021–Present: | Member of the Naval Shipbuilding Expert Advisory Panel (to February 2024) and Submarine Advisory Committee (since December 2024) providing advice to the Commonwealth of Australia on its National Naval Shipbuilding Enterprise | | 2015–2018: | Deputy Assistant Secretary of the Navy within the Office of the Assistant Secretary of the Navy (ASN) for Research, Development and Acquisition (executive oversight of all naval shipbuilding programs, major ship conversions, and maintenance, modernization and disposal of in-service ships) | | 1986–2015: | Served in a number of other civilian positions within the Navy Department including as Executive Director for the Program Executive Office for submarines and Director of the Investment and Development division; also served as Budget Director for U.S. Immigration and Customs Enforcement within the Department of Homeland Security |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
M.S. in management from Florida Institute of Technology; B.S. in Mechanical Engineering from the University of New Mexico; sponsor of the Virginia Class submarine USS Vermont (SSN 792) commissioned in 2020
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Proxy Statement | ESCO Technologies Inc. 13 |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| BOARD OF DIRECTORS |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Responsibilities |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
The Company’s Board of Directors is ultimately responsible for the conduct of the business of the Company in accordance with ethical and honorable business practices and applicable laws, to justify the confidence that the shareholders have placed in the Company by their investment in its shares. Among the Board’s core responsibilities are to:
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Oversee the conduct of the Company’s business in order to evaluate whether the business is being properly managed |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Review and, where appropriate, approve the Company’s major strategic and financial plans and goals, and evaluate results compared to those plans and goals |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Oversee the Company’s global risk management framework |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Review and approve significant indebtedness, significant capital allocations including dividends and stock repurchase plans, and significant transactions not arising in the ordinary course of business |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Review management’s determinations of principal considerations related to the auditing and accounting principles and practices used in the preparation of the Company’s financial statements; review and approve the Company’s financial controls and reporting systems; and review and approve the Company’s financial statements and financial reporting |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Select individuals for election to the Board and evaluate the performance of the Board and Board committees |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Select, evaluate and compensate the CEO and monitor the same decisions with respect to other executive officers; approve and evaluate compensation plans for senior management in conjunction with the Compensation Committee |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| ● | Oversee the conduct of the Company’s Sustainability program including annually reviewing the Governance Committee’s Sustainability program assessment |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Composition |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
The Board is currently comprised of eight directors divided into three classes, with the terms of office of each class ending in successive years. There have been no changes in the composition of the Board since the 2025 Annual Meeting of Shareholders.
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Independence |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
Mr. Sayler is the only Board member who is a member of the Company’s management. The Board of Directors has affirmatively determined that none of the non-management directors has any material relationship with the Company other than in his or her capacity as a director and shareholder, and that therefore all of those directors are, and at all times during their service in fiscal 2025 were, independent as defined under the Company’s Corporate Governance Guidelines and the listing standards of the NYSE.
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Meetings |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
The Board of Directors held five meetings during fiscal 2025. All of the directors attended, either in person or by video conference call, at least 75% of the meetings of the Board and of each of the committees on which they served which were held during their periods of service. The Company’s policy requires that all directors attend the Annual Meeting, except for absences due to causes beyond the reasonable control of the director. All of the directors serving at the time of the 2025 Annual Meeting attended the meeting.
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| 14 ESCO Technologies Inc. | Proxy Statement |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| DIVERSITY AND TENURE |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
Diversity is one of the factors that our Governance Committee considers in identifying the pool of director search candidates. The Board appreciates the benefits diversity brings and strives to assemble a Board with not only a variety of business and professional backgrounds, but also diversity in areas such as race, ethnicity and gender.
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| COMMITTEES |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
The members of the Board of Directors are appointed to various committees. The standing committees of the Board are the Executive Committee, the Audit and Finance Committee (Audit Committee), the Nominating and Corporate Governance Committee (Governance Committee), and the Human Resources and Compensation Committee (Compensation Committee). Each Committee operates under a written charter adopted by the Board of Directors. The charters are posted on the Company’s website, www.escotechnologies.com, under the Investor Center/Committees & Charters tab, and a copy of each Committee’s charter is available in print to any shareholder who requests it.
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| Executive Committee |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Current Members | Functions | | | ● Phillippy ● Sayler Two meetings in fiscal 2025 | | | | | ● | May exercise the powers of the Board between Board meetings, subject to limitations specified in the committee charter | | | ● | May not: | | | | » Declare dividends | | | | » Amend the Bylaws | | | | » Approve, propose or recommend for approval any action requiring approval by the shareholders | | | | » Elect directors or fill vacancies on the Board | | | | » Change the membership or composition of committees |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Proxy Statement | ESCO Technologies Inc. 15 |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Audit Committee |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
The Audit Committee assists the Board in fulfilling its oversight responsibilities for the integrity of the Company’s financial statements; the Company’s compliance with legal and regulatory requirements; the qualifications, independence and performance of the Company’s independent public accounting firm (the Accounting Firm); and the performance of the Company’s internal audit function.
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Current Members | Functions | | | ● Dewar (Chair) ● Campbell ● Hess ● Khilnani Four meetings in fiscal 2025 | ● | Appoints, retains and oversees the Accounting Firm and its performance of the annual audit | | | ● | Annually evaluates the qualifications, independence and performance of the Accounting Firm | | | ● | Reviews the scope of the Accounting Firm’s work and approves its annual audit fees and any non-audit service fees | | | ● | Reviews the Company’s internal controls with the Accounting Firm and the internal audit executive, and reviews with the Accounting Firm any problems it may have encountered during the annual audit | | | ● | Discusses the Company’s Form 10-K and 10-Q reports with management and the Accounting Firm before filing; reviews and discusses earnings press releases | | | ● | Reviews management’s assessment and oversight of information security, cybersecurity and IT risks, breaches (if any), and any preventive or remedial actions taken on a quarterly basis | | | ● | Reviews the annual internal audit plan and associated resource allocation | | | ● | Evaluates the performance of the Company’s internal audit executive and the results of the annual internal audit | | | ● | Reviews the Company’s reports to shareholders with management and the Accounting Firm and receives certain assurances from management | | | ● | Issues the Committee Report required to be included in this Proxy Statement pursuant to the regulations of the SEC (see Audit-and Finance Committee Report on page 60) |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
The Board of Directors has determined that all members of the Committee are financially literate and have accounting or related financial management expertise, as those terms are defined under the Company’s Corporate Governance Guidelines and the applicable listing standards of the NYSE, and are also “audit committee financial experts” within the meaning of Item 407(d)(5)(ii) of SEC Regulation S-K.
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| 16 ESCO Technologies Inc. | Proxy Statement |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Governance Committee |
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
The Governance Committee assists the Board in fulfilling its Corporate Governance responsibilities.
PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
| Current Members | Functions | | | ● Valdez (Chair) ● Conner ● Hess ● Phillippy Four meetings in fiscal 2025 | ● | Identifies individuals qualified to become Board members and recommends them for election to the Board at the Annual Meeting of shareholders or for appointment to fill vacancies occurring between Annual Meetings (see Director Candidates and Nominations below) | | | ● | Reviews the size of the Board and recommends any appropriate changes to the Board | | | ● | Reviews the composition of Board committees and recommends any appropriate changes to the Board | | | ● | Develops and recommends to the Board effective corporate governance guidelines | | | ● | Reviews the Company’s corporate governance and compliance programs | | | ● | Assists the Board in its oversight of the Company’s Sustainability program and annually provides an assessment of the program for the Board | | | ● | Oversees the Company’s ethics programs | | | ● | Reviews any conflicts of interest involving Related Persons, and oversees and administers the Company’s policy on Related Person transactions | | | ● | Leads the Board in its annual review of the Board’s performance |
Compensation Committee Interlocks and Insider Participation
| DIRECTOR COMPENSATION |
Compensation Committee Interlocks and Insider Participation
| Components of Calendar 2025 and 2026 Director Compensation |
Fiscal 2025 Compensation
| Name | Fees Earned or Paid in Cash | Stock Awards(1) | Option Awards | Non-Equity Incentive Plan Compensation | Change In Pension Value and Nonqualified Deferred Compensation Earnings(2) | All Other Compensation | Total | | David A. Campbell | $50,000(3) | $180,420 | — | — | $569 | — | $230,989 | | Penelope M. Conner | 50,000(4) | 270,392 | — | — | 0 | — | 320,392 | | Patrick M. Dewar | 67,500(5) | 180,466 | — | — | 6,942 | — | 254,908 | | Janice L. Hess | 50,000(6) | 180,466 | — | — | 2,571 | — | 233,037 | | Vinod M. Khilnani | 65,110(7) | 180,466 | — | — | 0 | — | 245,576 | | Leon J. Olivier | 12,610(8) | 278 | — | — | 5,921 | — | 18,809 | | Robert J. Phillippy | 135,110(9) | 180,466 | — | — | 3,264 | — | 318,840 | | Gloria L. Valdez | 79,255(10) | 180,466 | — | — | 2,993 | — | 262,714 |
Compensation Objective
| Executive Compensation Program Highlights | | | Pay for performance philosophy | A significant portion of NEO pay is at-risk in order to align pay with business strategy and shareholder interests | | At-risk annual cash incentive | Based on achievement of specified Company performance metrics | | Long-term equity incentive compensation (LTI) | Incorporates long-term Company performance metrics, and retention factors such as delayed vesting | | Limited perquisites | Perquisites are appropriate to the position and not excessive | | No tax gross-ups | No tax gross-up on any perquisites or severance benefits | | Competitive stock ownership policy | NEO stock ownership requirement is based on a multiple of base salary | | Clawback policy | Cash incentive and equity awards may be reclaimed by the Company in case of malfeasance or accounting restatements due to noncompliance with financial reporting requirements | | No hedging or pledging | NEOs must retain the risks of Company stock ownership | | Double trigger vesting | NEO change in control agreements and stock awards contain double trigger vesting provisions | | Independent compensation consultant | The Compensation Committee retains its own independent compensation consultant | | Strong say-on-pay support | Over 98% of the shares voting at the 2025 Annual Meeting supported the Company’s executive compensation program |
Compensation Consultant and Benchmarking
Compensation Consultant and Benchmarking The Compensation Committee is authorized by its charter to employ independent compensation and other consultants. The Committee annually engages with a nationally recognized compensation consulting firm (Compensation Consultant) to assist the Committee in evaluating executive compensation. The Compensation Consultant provides information, research and analysis pertaining to executive compensation as requested by the Committee, including updates on the peer group, market trends, survey data and analysis for market review. The Committee also from time to time engages our primary outside counsel, Bryan Cave Leighton Paisner LLP (BCLP) to advise it on selected executive compensation issues.
2024 Compensation Report (Fiscal 2025 Compensation Review)
2024 Compensation Report (Fiscal 2025 Compensation Review) In the summer of 2024, the Committee engaged Pay Governance LLC as the Compensation Consultant to provide a compensation report (the 2024 Compensation Report) for the Committee’s fiscal 2025 compensation review. One of the elements of the 2024 Compensation Report was the 2024 Mercer Benchmark Database/Total Remuneration Survey – Executive (the Mercer Survey), a broad-based survey of management compensation, as the primary source for benchmarking its executive compensation levels. A broad market survey provides decision-quality data that is generally reliable and consistent year-over-year. The Company was a participant in the Mercer Survey. A list of all of the participating companies included in the Mercer Survey is attached as Appendix B to this Proxy Statement. For its 2024 Compensation Report, the Compensation Consultant also provided proxy data from the peer group described below (2024 Peer Group) to be used in conjunction with the Mercer Survey in order to add context to the decision-making process and provide a supplemental perspective on the market. Peer group proxy data provides transparent line-by-line information for each company in the peer group, and provides the ability to review industry trends and compensation design practices as well as pay-for-performance alignment. The 2024 Peer Group was based on the GICS codes assigned to the Company’s subsidiaries and represented companies in the following industries in which the Company participates:
2024 Compensation Report (Fiscal 2025 Compensation Review)
Companies in the above industries were then filtered for revenue size in order to determine the 2024 Peer Group. The following is a list of the companies in the 2024 Peer Group, with their ticker symbols:
Fiscal 2025 Benchmarking
Fiscal 2025 Benchmarking For its compensation review for fiscal 2025, the Committee reviewed each principal element of compensation (base salary, cash incentive and LTI), as well as total cash compensation (base salary and cash incentive), and total direct compensation (target cash compensation and LTI) for each of the Company’s executive officer positions, and compared them against the benchmark range from the Compensation Report. For all three of the NEOs, the benchmark range for each element of compensation in the Compensation Report is the median plus or minus 15%. For fiscal 2025, the Committee utilized the benchmark ranges from the Compensation Report in determining the competitiveness of the executives’ compensation. The Committee also compared relative Company performance against the performance of the companies in the 2024 Peer Group to test the overall reasonableness of pay for performance. The Committee used the Compensation Report described above as a guideline and frame of reference in determining appropriate compensation levels and incentives for the executive officers; however, the Committee does not make its decisions according to a formula, and the Committee exercises considerable judgment and discretion in making them. The complexity and composition of the Company does not lend itself to comparisons with a readily ascertainable peer group, and while matching by SIC codes can provide some measure of comparability, there are wide variations in the type and complexity of these companies. The Committee therefore considers the benchmark ranges to be only a guide, and makes individual determinations of compensation for each of the executive officers based on numerous factors including the comparative responsibilities of the executive officers and the Committee’s assessments of individual and Company performance.
Change in Compensation Consultant for Fiscal 2026
Change in Compensation Consultant for Fiscal 2026 In May 2025, the Committee engaged Meridian Compensation Partners (Meridian) as the Compensation Consultant for fiscal 2026.
Compensation Consultant Independence
Compensation Consultant Independence In August 2024 and August 2025, the Committee assessed the independence of the Compensation Consultant and BCLP in line with the SEC’s compensation consultant independence factors, and determined there were no conflicts of interest. The Committee will continue to review their independence status annually and will keep the compliance letters on file.
Principal Elements of Compensation Program
| Pay Element | Form | 2025 Metrics | Objectives | | Base Salary | Cash | Benchmarked to market median, subject to adjustment for individual factors such as experience and performance | Attract and retain qualified executives | | Annual Incentive Plan (PCP) | Cash | 100% based on financial results: ● 70% based on Adjusted EPS ● 30% based on Adjusted Cash Flow from Operating Activities | Drive profitability, growth and progress against strategy | | Long-Term Equity Incentive (LTI) | Performance Share Units (PSUs) Restricted Share Units (RSUs) | Awards vest after 3-year performance period ● 60% based on EBITDA growth ● 40% based on Return on Invested Capital ● Potential for modification based on rTSR 2025 awards vest in thirds approximately 1, 2 and 3 years after grant | Align NEOs’ efforts with creation of long-term shareholder value Retention, ownership and full alignment with the shareholder experience | | Benefits | Consistent with other similarly situated personnel | | |
Total Direct Compensation
Total Direct Compensation The executive officers receive total direct compensation consisting of cash compensation (base salary plus annual cash incentive compensation) and long-term equity incentive compensation. Each of these elements is described in detail in the corresponding sections below. The Committee sets target levels for total direct compensation based on the skills, experience, breadth of their role, and performance of each executive officer, taking into account the benchmarking described above and compensation recommendations made by the CEO (except with respect to his own position). The Committee also considers the Company’s performance. For fiscal 2025, the Committee increased the executive officers’ total direct compensation as described in detail below. Total direct compensation for fiscal 2025 was within the benchmark range for Mr. Sayler, slightly above the benchmark range for Mr. Tucker, and within the benchmark range for Mr. Schatz.
Annual Cash Incentive
Annual Cash Incentive The Committee uses annual performance-based cash incentives to compensate the executive officers. The Committee establishes at-risk performance targets for the executive officers using financial and operational goals linking compensation to overall Company performance. The annual cash incentive targets for fiscal 2025 and fiscal 2024 were as follows:
Target Cash Incentive Compensation(1)
Target Cash Incentive Compensation(1)
Target Cash Incentive Compensation(1)
| Officer | FY 2025 Target Cash Incentive | FY 2024 Target Cash Incentive | Percent Increase from FY 2024 | | Bryan H. Sayler | $830,500 | $755,000 | 10% | | Christopher L. Tucker | $400,700 | $389,000 | 3% | | David M. Schatz | $213,100 | $202,900 | 5% |
Target Cash Incentive Compensation(1)
(1) Amounts shown are annual targets for fiscal 2025; the actual amounts paid are set forth in the Summary Compensation Table. The fiscal 2025 cash incentive targets for the executive officers were established pursuant to our Performance Compensation Plan (PCP) authorized under the 2018 Omnibus Incentive Plan. This at risk plan closely links the executive officers’ pay to our financial results and provides compensation variability in the form of reduced payments when performance is below targets and higher compensation when performance exceeds targets. The PCP has a fixed target with a payout range based on performance. The Committee has discretion to either increase or decrease the actual cash incentive payouts. For fiscal 2025, the Committee determined to set the cash incentive targets as a percent of base salary in line with market practices. The 2025 cash incentive targets for Mr. Sayler, Mr. Tucker and Mr. Schatz were 100% of 2025 base salary, 65% of 2025 base salary, and 50% of 2025 base salary, respectively.
Changes to Annual Cash Incentive for Fiscal 2026
Changes to Annual Cash Incentive for Fiscal 2026 Consistent with fiscal 2025, the Committee determined that the cash incentive targets for fiscal 2026 would be set as a percent of base salary in line with market practices. The fiscal 2026 cash incentive targets for Mr. Sayler, Mr. Tucker and Mr. Schatz are $900,000 (100% of 2026 base salary), $448,400 (70% of 2026 base salary), and $267,200 (60% of 2026 base salary), respectively.
Target Total Cash Compensation – Fiscal 2025(1)
| | Base Salary | | Cash Incentive Target (PCP) | | | | Officer | | Percent of Target Total Cash Compensation | | Percent of Target Total Cash Compensation | Target Total Cash Compensation | | Bryan H. Sayler | $830,500 | 50% | 830,500 | 50% | 1,661,000 | | Christopher L. Tucker | $616,500 | 61% | 400,700 | 39% | 1,017,200 | | David M. Schatz | $426,100 | 67% | 213,100 | 33% | 639,200 |
Target Total Cash Compensation – Fiscal 2025(1)
The higher at-risk target percentage for the CEO as compared to the other executive officers is based on our at risk philosophy and the greater responsibilities of the CEO. Similarly, the CFO has a higher at-risk percentage as compared to the General Counsel. Near the beginning of each fiscal year, after reviewing our business plans for the fiscal year, the Committee determines the key short-term business metrics on which senior management should focus in order to drive results and approves the cash incentive target for each executive officer. Because of the broad responsibilities of the executive officers, their criteria are tied to Company-wide metrics. The Committee then determines the percentage of the cash incentive target which should be tied to each of the metrics and the performance target for each metric, and approves the threshold and maximum multipliers which will be applied to each of the performance targets to determine the payment under the plan. If performance is below the threshold for a metric, there is no payout for that metric.
Cash Incentive Metrics
Cash Incentive Metrics During the first quarter of fiscal 2025 the Committee approved two metrics for achievement of the fiscal 2025 PCP incentive targets, based on the annual operating plan reviewed by the Board of Directors. The first metric in 2025 was “Adjusted EPS,” weighted at 70% of the total PCP target opportunity. Adjusted EPS is a non-GAAP financial measure and its target was $4.76 for fiscal 2025. Fiscal 2025 Adjusted EPS of $5.54 equaled GAAP diluted EPS from continuing operations of $4.49 plus $0.31 in transaction costs related to the Maritime acquisition and restructuring costs; $0.31 in Maritime operations, interest and amortization expenses, all of which were excluded because they were not in the target; and $0.43 in VACCO earnings prior to the divestiture which were reported in Discontinued Operations but which were added back because they were in the original target. The second metric in 2025 was “Adjusted Cash Flow from Operating Activities,” weighted at 30% of the total PCP target opportunity. Adjusted Cash Flow from Operating Activities is a non-GAAP financial measure, and its target was $140.2 million for fiscal 2025. The unadjusted 2025 GAAP Cash Flow from Continuing Operations of $200.4 million delivered the maximum payout, so further adjustments related to VACCO and Maritime cash flow would have increased the amount but not the payout for this metric and are therefore not shown here. The following table summarizes the targets for the two fiscal 2025 cash incentive metrics, the results achieved, and the actual payouts for 2025. The Committee believes that the selected metrics and the performance benchmarks for each metric, and the threshold and maximum multipliers, provided meaningful incentives for 2025 performance.
2025 PCP Targets and Results
| | | 2025 Benchmarks | | | | | | Metric | Weight (% of Target Incentive) | Threshold | Target | Maximum | Actual Value Achieved | Actual % of Payout Earned (unweighted) | | Adjusted EPS | 70% | $3.81 | $4.76 | $5.47 | $5.54 | 200% | | Adjusted Cash Flow from Operating Activities (millions) | 30% | $112.2 | $140.2 | $161.2 | $200.4(2) | 200% | | % of Target Earned at Each Benchmark | | 50%(1) | 100% | 200% | | | | Weighted % of Total Target Earned | | | | | | 200% |
Changes to Cash Incentive Metrics for Fiscal 2026
Changes to Cash Incentive Metrics for Fiscal 2026 In line with its practice in recent years, the Committee determined to allocate 100% of the executive officers’ cash incentive compensation opportunity to the PCP, and approved the following performance criteria for fiscal 2026:
Changes to Cash Incentive Metrics for Fiscal 2026
| ● | Adjusted EPS, weighted at 70% of the total target opportunity; and |
Changes to Cash Incentive Metrics for Fiscal 2026
| ● | Adjusted Cash Flow from Operating Activities, weighted at 30% of the total target opportunity. |
Changes to Cash Incentive Metrics for Fiscal 2026
As in 2025, the potential cash incentive compensation for fiscal 2026 will range from 0 to 2.0 times the target opportunity for both Adjusted EPS and Adjusted Cash Flow from Operating Activities, depending on actual 2026 performance.
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation The Company’s annual LTI award program consists of a combination of performance-based share unit (PSU) awards and time-vested restricted share unit (RSU) awards. For fiscal 2025 the Committee determined to shift the mix of the LTI awards toward the performance-based PSUs rather than being divided equally between the PSUs and the RSUs as they were in in prior years, and it assigned 70% of the total LTI target value to the PSUs and 30% to the RSUs. For fiscal 2025, both the PSU and RSU grants were approved in the first quarter of the fiscal year. We do not coordinate LTI grants with the release of material non-public information. Company-wide equity grants, including equity grants to our executive officers, are made at regular meetings of the Compensation Committee. We also do not grant stock options or other awards which require a payment by the recipient in order to realize the value of the award. The target number of shares in each RSU and PSU award equals the Committee-approved target values divided by the average trading price of the Company’s stock over the last 15 trading days before the effective award date. The actual payout of the RSUs and PSUs will be in shares, whose value at the time of payout may be greater or less than the target values. For an award to vest, the recipient must generally be continuously employed by the Company from the award date through the vesting date. For the executive officers, the numbers of RSUs granted and the PSU threshold, target and maximum numbers of shares payable according to the performance criteria, were as follows:
Long-Term Equity Incentive Compensation
| | RSU Target Values as of Grant Date | Number of RSUs Granted | PSU Target Values as of Grant Date | PSU Payout Potential (Shares) | | | | Officer | | | | Threshold (50%) | Target (100%) | Maximum (200%) | | Bryan H. Sayler | $810,000 | 6,226 | $1,890,000 | 7,263 | 14,526 | 29,052 | | Christopher L. Tucker | 231,180 | 1,777 | 539,420 | 2,073 | 4,146 | 8,292 | | David M. Schatz | 127,830 | 982 | 298,270 | 1,146 | 2,292 | 4,584 |
Restricted Share Units (RSUs)
Restricted Share Units (RSUs) RSUs are time-vested awards. The terms of the fiscal 2025 awards were similar to those granted in fiscal 2024, vesting over a period of approximately three years, in three equal portions approximately 12, 24 and 36 months after the grant date; accordingly, for the fiscal 2025 awards, vesting will occur on the last NYSE trading days in November 2025, 2026 and 2027, at which time they will be converted into a like number of shares of Company common stock, and such shares will be paid out to the participant (after statutory tax withholdings) on the following business day.
Restricted Share Units (RSUs)
| 34 ESCO Technologies Inc. | Proxy Statement |
Performance Share Units (PSUs)
Performance Share Units (PSUs) Other than the specific share amounts and performance goals, the terms of the fiscal 2025 PSUs were substantially similar to those awarded for fiscal 2024, including that the awards are subject to the Company’s Clawback Policy (see Clawback Policy on page 40). The fiscal 2025 PSUs will vest after a three-year performance period beginning with fiscal 2025 and ending with fiscal 2027, on the day in the first quarter of fiscal 2028 on which the HRCC approves and certifies the extent to which the applicable performance goals have been achieved. To the extent earned, the vested awards will be converted into a number of shares of Company common stock based on achievement of the performance goals. The award distribution in shares may be less than or greater than the number of PSUs awarded, within certain specified threshold and maximum limits. Straight-line interpolation will be used to score between threshold, target and maximum performance levels. For the fiscal 2025 PSU awards, the Committee continued to align the performance measures with shareholders by continuing the use of EBITDA as a performance measure with a 60% weighting and Return on Invested Capital (ROIC) as a performance measure with a 40% weighting, and continuing the use of relative Total Shareholder Return (rTSR) as a potential modifier as described below:
EBITDA Performance Goals – 60% of PSU Award Value
EBITDA Performance Goals – 60% of PSU Award Value
EBITDA Performance Goals – 60% of PSU Award Value
| | | Below Threshold | Threshold | Target | Maximum | | Cumulative Company EBITDA for the three year performance period(1) | Performance Level | <85% of EBITDA target | 85% of EBITDA target | $713.2 million | 130% of EBITDA target | | | Payout(2) | 0% | 50% | 100% | 200% |
ROIC Performance Goals – 40% of PSU Award Value
ROIC Performance Goals – 40% of PSU Award Value
ROIC Performance Goals – 40% of PSU Award Value
| | | Below Threshold | Threshold | Target | Maximum | | Company ROIC for 2027(3) | Performance Level | <85% of ROIC target | 85% of ROIC target | 12% for FY2027 | 130% of ROIC target | | | Payout(2) | 0% | 50% | 100% | 200% |
ROIC Performance Goals – 40% of PSU Award Value
| (1) The EBITDA target was set by the Committee to represent a challenging performance incentive based on annual percentage increases over actual 2024 EBITDA and is not intended as guidance or a prediction of actual results. |
ROIC Performance Goals – 40% of PSU Award Value
| (2) Subject to adjustment as described below. |
ROIC Performance Goals – 40% of PSU Award Value
| (3) The ROIC target was set by the Committee to represent a challenging performance incentive and is not intended as guidance or a prediction of actual results. |
ROIC Performance Goals – 40% of PSU Award Value
After applying the above performance metrics, the resulting number of PSUs may be subject to increase or decrease based on the Company’s Total Shareholder Return (TSR) over the performance period compared to the TSR of the companies in a peer group based on the S&P SmallCap 600 Industrials Index. If the Company’s rTSR is below the 25th percentile or above the 75th percentile, the resulting number of shares will be decreased by 20% or increased by 20%, respectively; if the Company’s rTSR is from the 25th percentile to the 75th percentile, no adjustment will be made. In no event will the award payout be greater than 200% of the target.
ROIC Performance Goals – 40% of PSU Award Value
| Proxy Statement | ESCO Technologies Inc. 35 |
Vesting of FY 2022 Performance Share Unit Award
Vesting of FY 2022 Performance Share Unit Award The following table summarizes the payout for the FY 2022 PSU award that was earned and distributed in FY 2025.
EBITDA Performance Goals – 70% of the FY 2022 PSU Award Value
EBITDA Performance Goals – 70% of the FY 2022 PSU Award Value
EBITDA Performance Goals – 70% of the FY 2022 PSU Award Value
| | | Below Threshold | Threshold | Target | Maximum | Actual Achieved | | Cumulative Company EBITDA for the three year performance period(1) | Performance Level (in millions) | <$405.5 | $405.5 | $477.1 | $620.2 | $548.3 | | | Payout Earned | 0% | 50% | 100% | 200% | 149.77% |
rTSR Performance Goals – 30% of FY 2022 PSU Award Value
rTSR Performance Goals – 30% of FY 2022 PSU Award Value
rTSR Performance Goals – 30% of FY 2022 PSU Award Value
| | | Below Threshold | Threshold | Target | Maximum | Actual Achieved | | Company TSR over the three year performance period compared to TSRs of all companies in the S&P 600 Industrials Index(2) | Performance Level (in millions) | <30th percentile | 30th percentile | 50th percentile | 80th percentile | 65th percentile | | | Payout Earned | 0% | 50% | 100% | 200% | 150% |
rTSR Performance Goals – 30% of FY 2022 PSU Award Value
| Total Weighted Payout Multiplier | 149.84% |
rTSR Performance Goals – 30% of FY 2022 PSU Award Value
| 1 | EBITDA target represents EBITDA growth targets for the performance period using actual 2021 EBITDA plus 15% then 5.5% CAGR for 2023 and 2024. Straight-line interpolation was used to score between threshold, target and maximum performance levels. |
rTSR Performance Goals – 30% of FY 2022 PSU Award Value
| 2 | The Company’s TSR for the performance period was compared to each company in the S&P 600 Industrials Index. The Index companies’ TSR was ranked and the Company’s TSR was compared to the ranked list to determine the rTSR score. Straight-line interpolation was used to score between threshold, target and maximum performance levels. |
rTSR Performance Goals – 30% of FY 2022 PSU Award Value
For more information about the fiscal 2025 LTI awards and the grants to the individual executive officers, see Grants of Plan-Based Awards on page 42.
Changes to Long Term Incentive Compensation for 2026
Changes to Long Term Incentive Compensation for 2026 The 2025 Meridian market assessment indicated that the executive officers’ total direct compensation was lagging the market primarily due to below-market LTI. In response, the Committee significantly increased the total 2026 LTI values as percentages of base salaries, resulting in fiscal 2026 target LTI values as of the grant date of $3,500,000 (389% of base salary) for Mr. Sayler, $960,800 (150% of base salary) for Mr. Tucker, and $556,600 (125% of base salary) for Mr. Schatz.
Changes to Long Term Incentive Compensation for 2026
| 36 ESCO Technologies Inc. | Proxy Statement |
Changes to Long Term Incentive Compensation for 2026
The fiscal 2026 RSU awards were granted in November 2025; they will vest in three equal portions approximately 12, 24 and 36 months after the month in which they are granted; for the fiscal 2026 awards, vesting will occur on the last trading days in November of 2026, 2027 and 2028. The fiscal 2026 PSU awards were also granted in November 2025, and after a three-year performance period ending with fiscal 2028, they will vest on the last trading day of the month in which the HRCC approves and certifies the extent to which the applicable performance goals have been achieved. To the extent earned, the vested awards will be converted into a currently undeterminable number of shares of Company common stock, which may be less than or greater than the number of PSUs awarded, within certain specified threshold and maximum limits, depending on the degree to which the Company has achieved one or more specified performance goals. If the performance is less than the threshold goal for a particular performance measure, there will be no payout of that portion of the PSUs dependent on that measure.
Severance Plan
Severance Plan Severance provisions in the event of a change of control benefit a company by allowing executives who are parties to such arrangements to focus on continuing business operations and the success of a potential business combination rather than seeking alternative employment, thereby providing stability to a corporation during a potentially uncertain period. Accordingly, the Company has adopted a Severance Plan which prescribes the compensation and benefits to be provided in the event of a change of control to certain executives, including the CEO and the other executive officers. Our change of control arrangements are designed to provide executives with severance payments and certain other benefits in the event that their employment is terminated in connection with a change of control transaction. The Severance Plan includes a “double trigger,” which means that it provides severance benefits only if there is both (1) a change of control of the Company, and (2) the Company (or any successor) terminates the employee’s employment without cause within 36 months following a change of control, or the employee terminates his or her employment for good reason within 36 months following a change of control, or the Company terminates the employee’s employment within 90 days before a change of control at the request of a third party who, at such time, had taken steps reasonably calculated to effect the change of control. For purposes of the Severance Plan, “change of control” means any of the following (subject to the specific definitions in the Severance Plan): (i) the acquisition by any person or group of at least 20% of the then-outstanding shares of the Company’s common stock; or (ii) a change in a majority of the members of the Board of Directors that is not approved by the incumbent Board; or (iii) the approval by the shareholders of either a reorganization, merger or consolidation after which the shareholders will not own at least a majority of the Company’s common stock and voting power, or a liquidation or dissolution of the Company, or the sale of all or substantially all of the Company’s assets.
Severance Plan
| Proxy Statement | ESCO Technologies Inc. 37 |
Severance Plan
If the Severance Plan is triggered, the executive will be entitled to all accrued but unpaid compensation, a pro rata cash bonus for the year of separation and benefits through the date of separation, as well as a lump sum cash payment which is designed to replicate the cash compensation (base salary and cash incentive), plus certain benefits, that the executive would have received had he or she remained employed for two years. These payments and benefits would only be paid as a result of a double-trigger event. The determination of the appropriate level of payments and benefits to be provided in the event of a change of control termination involved consideration of several factors. The two-year multiple was determined based on a survey of the Company’s peers at the time the Severance Plan was adopted by the Company, and is deemed to be reasonable. The Committee considered that a high-level executive, who is more likely to lose his or her job in connection with a change of control than other employees, may require more time than other employees in order to secure an appropriate new position, and, unless that executive was provided with change of control benefits, he or she may be motivated to start a job search early if a change of control is anticipated, to the detriment of the Company. Thus, the existence of the Severance Plan provides an incentive for the executive to remain with the Company until a change of control actually occurs. In addition, payments are not provided under the Severance Plan unless there has been not only a change of control but also a qualifying termination of employment, thus providing an acquirer the opportunity to retain the Company’s management team during or after a transition period. For further information about the Severance Plan, and a sample calculation of the cash compensation and benefits to be provided to our executive officers under the Severance Plan, based on certain stated assumptions, see Potential Payments Upon Termination or Change in Control beginning on page 45. In addition, pursuant to the executive officers’ severance agreements as well as their LTI award agreements, in the event of a change of control, all LTI awards are to be assumed by the acquirer or successor entity and converted to an equivalent agreement. If for any reason the awards will not or cannot be assumed, they will be paid out in cash.
Employment Agreements
Employment Agreements We have entered into employment and compensation agreements with each of our executive officers. The agreements provide for payment of an annual base salary, participation in our cash incentive plans, eligibility for participation in our LTI plans and benefit plans and programs applicable to senior executives, and continuance of certain perquisites. For more information about the terms of these agreements, including specifics regarding the cash compensation and benefits provided in the event of a qualifying separation, and for a sample calculation based on certain stated assumptions, see Employment Agreements on page 44, and Potential Payments Upon Termination or Change in Control beginning on page 45. The Compensation Committee periodically assesses the reasonableness of the executive officers’ employment agreements to consider whether any changes are appropriate.
Deferred Compensation Plan for Selected Employees
Deferred Compensation Plan for Selected Employees Effective in 2025, the Company established the ESCO Technologies Inc. Deferred Compensation Plan (the Plan), under which its executive officers and other selected management or highly compensated employees may elect in advance to defer receipt of from 5% to 75% of their base salary and/or from 5% to 100% of their at-risk compensation, including PCP payouts, RSUs and PSUs. Deferrals may be for a period or periods specified in advance by the participant, or until the participant’s employment terminates, if earlier, and distribution will be accelerated in certain circumstances, including a change in control of the Company. For fiscal 2025, Mr. Sayler elected to defer 10% of his PCP payment, which was paid in November 2025. Deferred amounts are credited to the participant’s deferred compensation account either in cash or in common stock equivalents depending on the nature of the deferred compensation, and receipt is subject to any vesting requirements specified in the compensation award. Deferrals of cash-based compensation (such as base salary and PCP payouts) are measured and paid in dollars and credited with earnings based on the earnings of one or more notional investment options offered by the Company and elected by the participant; however, those options are provided solely as measuring devices, and at no time will the participant have any interest in any such investment option. Cash deferrals may not be allocated to Company common stock. Deferrals of share-based compensation (such as RSUs and PSUs) are credited to the participant’s
Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants
Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants Our Insider Trading Policy prohibits any employee from trading in Company securities while in possession of material non-public information. In addition, the Insider Trading Policy strictly prohibits our directors, officers and employees from engaging in transactions in Company securities involving puts, calls or other derivative securities on an exchange or in any other organized market, selling Company securities “short”, or entering into hedging or similar arrangements (such as exchange funds) involving Company securities. The Insider Trading Policy also prohibits our directors, officers, corporate office employees, and other designated employees in management positions from pledging Company securities as collateral for a loan or holding Company securities in a margin account. These policies are intended to ensure that the executive officers, as well as other Company personnel in positions of authority, cannot offset or hedge against declines in the price of the Company stock they own or have a personal interest in the price of their shares which may be different from the interests of other shareholders generally. A clickable link to the Insider Trading Policy is located at Exhibit 19 in the Exhibit Index to our 2025 Annual Report on Form 10-K on file with the SEC. We do not coordinate LTI grants with the release of material non-public information. Company-wide equity grants, including equity grants to our executive officers, are made at regular meetings of the Compensation Committee. We also do not grant stock options or other awards which require a payment by the recipient in order to realize the value of the award.
Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants
| Proxy Statement | ESCO Technologies Inc. 39 |
Clawback Policy
| 2025 SUMMARY COMPENSATION TABLE |
Clawback Policy
| (a) See Pension Benefits on page 38. |
Clawback Policy
| 2025 GRANTS OF PLAN-BASED AWARDS |
Clawback Policy
| OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-END |
Clawback Policy
| 2025 OPTION EXERCISES AND STOCK VESTED |
Clawback Policy
| PENSION BENEFITS |
401(k) Plan
| POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL |
Footnotes to the Above Three Tables
| PAY RATIO DISCLOSURE |
CEO Pay Ratio
CEO Pay Ratio Pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the implementing regulations of the SEC, we are providing the following information about the relationship between the total annual compensation of our CEO, Mr. Sayler, and the median total annual compensation of our employees. As reported in the Summary Compensation Table on page 41, Mr. Sayler’s 2025 total annual compensation was $5,586,139. The 2025 median total annual compensation of all of our employees who were employed as of August 1, 2025 (the Determination Date), other than Mr. Sayler, was $71,384, resulting in a pay ratio of 78:1.
Calculation Methodology
| PAY VERSUS PERFORMANCE |
Adjustments to Determine Compensation Actually Paid to Current CEO (PEO 1)
Adjustments to Determine Compensation Actually Paid to Current CEO (PEO 1)
Adjustments to Determine Compensation Actually Paid to Current CEO (PEO 1)
| Current CEO | 2021 | 2022 | 2023 | 2024 | 2025 | | SCT Total Compensation | N/A | N/A | $3,647,641 | $3,112,060 | $5,586,139 | | Less Equity Award Values Reported in SCT | – | – | (1,492,717) | (1,651,551) | (3,052,886) | | Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | – | – | 1,700,271 | 2,006,282 | 4,865,106 | | Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | – | – | 325,125 | 622,595 | 4,047,645 | | Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | – | – | 0 | 0 | 0 | | Plus Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | – | – | 44,914 | (24,366) | 137,176 | | Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | – | – | 0 | 0 | 0 | | Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | – | – | 0 | 0 | 0 | | Compensation Actually Paid (CAP) | N/A | N/A | $4,225,234 | $4,065,021 | $11,583,180 |
Adjustments to Determine Compensation Actually Paid to Current CEO (PEO 1)
| 50 ESCO Technologies Inc. | Proxy Statement |
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
| Former CEO | 2021 | 2022 | 2023 | 2024 | 2025 | | SCT Total Compensation | $4,161,742 | $5,452,715 | $2,677,153 | N/A | N/A | | Less Equity Award Values Reported in SCT | (2,462,845) | (2,963,694) | (1,499,967) | – | – | | Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 1,714,174 | 2,813,301 | 0 | – | – | | Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | (182,607) | (159,075) | 338,042 | – | – | | Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | 0 | 1,786,685 | – | – | | Plus Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 0 | 218,272 | 1,015,817 | – | – | | Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | 0 | (2,011,558) | – | – | | Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | 0 | 0 | 0 | – | – | | Compensation Actually Paid (CAP) | $3,230,464 | $5,361,519 | $2,306,171 | N/A | N/A |
Adjustments to Determine Compensation Actually Paid to Former CEO (PEO 2)
| Proxy Statement | ESCO Technologies Inc. 51 |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| Average Compensation | 2021 | 2022 | 2023 | 2024 | 2025 | | SCT Total Compensation | $1,039,962 | $1,428,876 | $1,434,053 | $1,289,492 | $1,841,516 | | Less Equity Award Values Reported in SCT | (257,270) | (543,430) | (576,795) | (493,819) | (676,500) | | Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | 179,064 | 517,034 | 645,518 | 599,886 | 1,078,079 | | Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | (23,168) | (15,413) | 332,101 | 493,583 | 1,552,156 | | Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | 0 | 0 | 0 | 0 | 0 | | Plus Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 276,464 | 18,900 | 27,940 | (14,618) | 83,039 | | Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | 0 | 0 | 0 | 0 | 0 | | Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | $0 | $0 | $0 | 0 | 0 | | Compensation Actually Paid (CAP) | $1,215,051 | $1,405,968 | $1,862,816 | $1,874,523 | $3,878,289 |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 1 | Bryan H. Sayler has served as the Company’s PEO (Principal Executive Officer) since the second quarter of fiscal 2023. |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 2 | Victor L. Richey served as the Company’s PEO during fiscal 2021, fiscal 2022 and the first quarter of fiscal 2023. |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 3 | The Company’s non-PEO executive officers for fiscal 2022 through 2025 were Christopher L. Tucker, Senior VP & CFO, and David M. Schatz, Senior VP, General Counsel & Secretary. In fiscal 2021, Mr. Tucker succeeded Gary E. Muenster as an executive officer, and Mr. Schatz succeeded Alyson S. Barclay as an executive officer. Accordingly, there were two persons serving as non-PEO executive officers at all times during these years. |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 4 | The following amounts were deducted from or added to Summary Compensation Table total compensation in accordance with the SEC-mandated adjustments to calculate Compensation Actually Paid to our principal executive officer (PEO) and the average Compensation Actually Paid to our non-PEO executive officers. The fair value of equity awards was determined using methodologies and assumptions developed in a manner substantively consistent with those used to determine the grant date fair value of such awards. In calculating the year-end fair values of equity awards, the assumptions made did not differ materially from the assumptions made in calculating the grant date fair values of such awards. |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 5 | The Peer Group TSR set forth in this table utilizes the S&P SmallCap 600 Industrials Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended September 30, 2025. The comparison assumes $100 was invested for the period starting September 30, 2021 through the last day of the subsequent fiscal years, in the Company and in the S&P SmallCap 600 Industrials Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 6 | We determined EPS to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and the other executive officers in 2025. This performance measure may not have been the most important financial performance measure for one or more of fiscal years 2021 through 2024 and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
Adjustments to Determine Compensation Actually Paid to Non-PEO NEOs
| 52 ESCO Technologies Inc. | Proxy Statement |
Pay Versus Performance Relationships
Pay Versus Performance Relationships
Approval; Effect of Failure to Approve
| 6 | Consists of the Company’s Compensation Plan for Non-Employee Directors (Directors Compensation Plan), under which the Company’s non-employee directors were compensated before 2021; since then the directors have been compensated under the Omnibus Plan. As of September 30, 2025, of the 400,000 shares authorized for issuance under the Directors Compensation Plan a total of 310,191 shares had been issued and approximately 68,493 shares had been elected by various directors to be issued on a deferred basis; the remaining 21,316 shares will be used, if at all, only to satisfy dividend accrual rights attached to deferred shares awarded prior to fiscal 2023 under the Directors Compensation Plan; however, all such accruals in fiscal 2025 were charged to the Omnibus Plan. Details of the directors’ compensation, including elective deferrals and dividend accrual rights, are hereby incorporated by reference to the section captioned “Directors Compensation” beginning on page 21. |