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DOVER CORPORATION 2019 PROXY Since 1955 Redefining what’s possible
May 6, 2022
May 2, 2019
1:9:00 p.m. Easterna.m. Central Time
Conrad Fort Lauderdale BeachDover Corporation Headquarters
551 North Fort Lauderdale Beach Boulevard3005 Highland Parkway
Fort Lauderdale, Florida 33304Downers Grove, Illinois 60515
Dear Fellow Shareholder:
You are cordially invited to attend ourthe Annual Meeting of Shareholders (the “Annual Meeting”) of Dover Corporation (“Dover” or the “Company”) at the Conrad Fort Lauderdale Beach hotelour headquarters on May 2, 20196, 2022 at 1:9:00 p.m.a.m., EasternCentral Time, to be held for the following purposes:
1. | To elect |
2. | To ratify the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for |
3. | To approve, on an advisory basis, named executive officer (“NEO”) compensation. |
4. | To |
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To consider such other business as may properly come before the Annual Meeting, including any adjournments or postponements thereof. |
All holders of record at the close of business on March 8, 20199, 2022 are entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements thereof.Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares as soon as possible.
March 21, 201917, 2022
By authority of the Board of Directors,
Ivonne M. Cabrera
Secretary
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Dover’s Alignment with Leading Compensation Governance Practices | 43 | |||
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DOVER CORPORATION –20192022 Proxy Statement i
TABLE OF CONTENTS
DOVER CORPORATION – 20192022 Proxy Statement ii
Date: | May | |
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Record Date: | March | |
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For additional information about our Annual Meeting, please see “General Information About |
There are fivefour proposals to be voted on at the Annual Meeting:
ITEM
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Board Voting
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| FOR each director | 11 | |||||
ITEM 2 | The ratification of the appointment of PwC as our independent registered public accounting firm for | |||||||
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ITEM 3 | An advisory resolution to approve NEO compensation
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How to CastSubmit Your VoteProxy
Even if you plan to attend the Annual Meeting in person, please castsubmit your voteproxy as soon as possible using one of the following methods:
Viainternet by visiting www.proxyvote.com
Viatelephone by calling1-800-690-6903
Viamail by marking, signing and dating your proxy card or voting instruction form (if you received proxy materials by mail) and returning it to the address listed therein
DOVER CORPORATION –20192022 Proxy Statement 1
PROXY STATEMENT SUMMARY
Dover is a diversified global manufacturer and solutions provider delivering innovative equipment and components, specialty systems, consumable supplies, aftermarket parts, software and digital solutions, and support services through threefive operating segments: Engineered Systems, FluidsProducts, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions, and RefrigerationClimate & Food Equipment. OurSustainability Technologies. We combine global scale, operational agility, world-class engineering capability, and customer intimacy to lead the markets we serve. Recognized for our entrepreneurial business model encourages, promotes, and fosters deep customer engagement and collaboration, which has ledapproach for over 60 years, our team of over 25,000 employees takes an ownership mindset, collaborating with customers to Dover’s well-established and valued reputation for providing superior customer service and industry-leading product innovation.
Our businesses are aligned in three segments structured around our key end markets and designed to support focused growth strategies. Our segment structure also allows us to leverage our scale and channel presence, and capitalize on productivity initiatives.redefine what’s possible.
Management Philosophy
Our leadershipexecutive management team is committed to generatingsteadily creating shareholder value through a combination of sustained long-term profitable growth, operational excellence, and superior free cash-flow generation.
cash flow generation, and productive capital Our operating culturere-deployment fosters high ethical standards that value accountability, rigor, trust, respect, and open communications, designedwhile adhering to allow individual growth and operational effectiveness.a conservative financial policy.
Our businesses seek to be leaders in our enda diverse set of growing markets as measuredwhere customers are loyal to trusted partners and suppliers, and value product performance and differentiation driven by market share,superior engineering, manufacturing precision, total solution development, and excellent supply chain performance.
Our companies are long-time leaders in their respective markets and are known for their innovation, engineering capability, and customer satisfaction, growth, and return on invested capital.service excellence.
Our sustainable business practices are focused on reducing environmental impact and developing products that help our customers meet their sustainability goals.
Our operating structure of threefive business segments allows for focuseddifferentiated acquisition activity, acceleratesfocus consistent with our portfolio and capital allocation priorities which, coupled with functional expertise at our corporate center, presents opportunities to identify and capture operating synergies, includingsuch as global sourcing and supply chain integration, shared services, and manufacturing and advances the development of our executive talent.practices.
Our segment and executive management team teams formulate strategy, developsets strategic direction, initiatives and goals, provides oversight of strategy execution and oversee progress byachievement of these goals for our operating companies on these matters,business segments, and with oversight from our Board of Directors (“Board”(our “Board”), makemakes capital allocation decisions, regardingincluding organic investment initiatives, major capital projects, acquisitions, and the return of capital to our shareholders.
Our businessesoperating culture are committedfosters high ethical and performance standards, values accountability, rigor, trust, inclusion, respect, and open communications, and is designed to creating value for our customers, employees,encourage individual growth and shareholders through sustainable business practices that protect the environment and the development of products that help our customers meet their sustainability goals.operational effectiveness.
DOVER CORPORATION – 20192022 Proxy Statement 2
PROXY STATEMENT SUMMARY
Company Goals
We are committed to driving superior shareholder return through three key objectives:tenets of our corporate strategy.
First, we are committed toachieving organic sales growth above gross domestic product growth (or 3% to 5% annually on average) over a long-term business cycle, absent prolonged adverse economic conditions, complemented bygrowth through strategic acquisitions.
Second, we continue to focus onimproving returns on capital and segment margins through effective cost management and productivity initiatives, including supply chain activities, targeted restructuring activities, strategic pricing, and portfolio management.
Third, we aim to generatefree cash flow as a percentage of sales of approximately8-12% through strong earnings performance, productivity improvements, and active working capital management.
We are committed to achieving organic sales growth above global gross domestic product growth (greater than GDP or 3% to 5% annually on average) over a long-term business cycle, absent prolonged adverse economic conditions, complemented by growth through strategic acquisitions. | ||
We are focused on improving returns on capital, as well as segment and corporate earnings margins by enhancing our operational capabilities and making investments across the organization in digital capabilities, automation, operations management, information technology, shared services, and talent. We also focus on continuous, effective cost management and productivity initiatives, including automation and digitally-supported manufacturing, supply chain optimization, e-commerce and digital go-to-market, restructuring activities, improved footprint utilization, strategic pricing and portfolio management. | ||
We aim to generate strong and growing free cash flow and earnings per share (“EPS”)through strong earnings performance, productivity improvements, and active working capital management. |
We support achievement of these goals through (1) alignment ofby aligning management compensation with strategic and financial objectives, (2) well-definedactively managing our portfolio to increase enterprise scale, improve business mix over time, and actively managed mergerspursuing acquisitions that fit the characteristics of an ideal Dover business, and acquisitions (“M&A”) processes, and (3)investing in talent development programs.
Our Strategic Priorities2021 Financial Results
In 2021, we continued our long track record of delivering value to Realize Earnings and Growth Potentialour shareholders, despite an operational environment that continues to present challenges due to the COVID-19 pandemic.
US GAAP | FY2021 | FY2020 | Δ | |||||||||
Revenue ($M) | 7,907 | 6,684 | 18% | |||||||||
Net earnings ($M)(1) | 1,124 | 683 | 64% | |||||||||
Diluted EPS ($) | 7.74 | 4.70 | 65% | |||||||||
Non-GAAP(2) | ||||||||||||
Organic revenue change | 15% | |||||||||||
Adjusted net earnings ($M)(3) | 1,109 | 824 | 35% | |||||||||
Adjusted diluted EPS ($) | 7.63 | 5.67 | 35% |
(1)Full year 2021 and 2020 net earnings include rightsizing and other costs of $31.1 million and $40.7 million, respectively. Full year 2020 also includes a $3.9 million non-cash gain on the sale of AMS Chino, and full year 2021 also includes a $135.1 million gain on the sale of Unified Brands and a $18.0 million gain related to the sale of our Race Winning Brands equity method investment.
Near Term Strengthen Execution, Deliver(2)Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement.
(3)Full year 2021 and 2020 adjusted net earnings exclude acquisition-related amortization costs of $107.2 million and $104.1 million, respectively, and rightsizing and other costs of $31.1 million and $40.7 million, respectively. Full year 2020 also excludes a $3.9 million non-cash gain on Commitments Focusthe sale of AMS Chino, and full year 2021 also excludes a $135.1 million gain on margin improvement through cost rightsizing Use portionthe sale of SG&A savingsUnified Brands and a $18.0 million gain related to fund key strategic initiatives — operational talent, e-commerce and digital and R&D Deliver on SG&A rightsizing initiative Improve performance in Retail Fueling & Transportation and Retail Refrigeration Continue organic growth and productivity investments Completed $1 B buyback program in 2018; opportunistically undertake repurchases Pursue bolt-on M&A around existing platforms Comprehensive footprint evaluation — Rightsizing began in 04 2018 Longer Term Realize Dover's Earnings and Growth Potential Invest behind Dover's leading businesses to capture growth potential Solidify focus on reliable execution as a key tenetthe sale of the Dover culture Further opportunity for margin improvement: footprint rationalization, automation Pursue inorganic opportunities to build out Dover platforms: gain scale, growth exposure, customer relevance, efficiency Repurchase own stock opportunistically Continue to grow dividendour Race Winning Brands equity method investment.
DOVER CORPORATION – 20192022 Proxy Statement 3
PROXY STATEMENT SUMMARY
Portfolio & Strategic Actions | • In 2021, we completed 9 acquisitions. The acquisitions of Acme Cryogenics, Inc. (“Acme Cryogenics”), Engineered Controls International, LLC (“RegO”) and LIQAL B.V. (“LIQAL”) within the Clean Energy & Fueling segment complement our existing operations and expand our evolving fueling portfolio toward clean energy. • As part of the regular review of our portfolio and the fit of our businesses, we completed the sale of Unified Brands within the Climate & Sustainability Technologies segment and our Race Winning Brands equity method investment within the Engineered Products segment. • In recognition of recent portfolio changes, we recently changed the name of the Fueling Solutions segment to “Clean Energy & Fueling,” and the Refrigeration & Food Equipment segment to “Climate & Sustainability Technologies” to better reflect the markets and customers served by the businesses within these segments. | |||
Strong Operational Execution and Profitability | • Increased revenue, profitability, and earnings per share despite a challenging global business environment caused by COVID-19. • We continued to execute on our broad-based multi-year efficiency and margin expansion program, designed to reduce our selling, general and administrative cost base and rationalize our manufacturing and supply chain footprint across the portfolio. • Continuing to build upon our four enterprise capabilities in support of margin expansion initiatives. - We are continuing to (1) leverage our Digital Labs team to improve our internal and market-facing digital capabilities, (2) improve utilization and optimization of our manufacturing footprint through centralized resources and investment, (3) further centralize shared services under Dover Business Services, and (4) invest in our India Innovation Center shared services with a focus on engineering capabilities. • Synergy capture from recent acquisitions presents additional margin upside. | |||
Disciplined Capital Allocation | • We made 9 strategic bolt-on acquisitions — the most since 2016 — for an aggregate consideration of $1,125.1 million, net of cash acquired and including contingent consideration, that enhance our businesses with new capabilities and attractive end-market exposures. • We continued our history of providing regular capital returns to shareholders by increasing our quarterly dividend, marking our 66thconsecutive year of dividend increases. • We made $171.5 million in capital expenditures in 2021, representing 2.2% of revenue, in line with our priority of organic reinvestment to grow and strengthen our existing businesses. |
DOVER CORPORATION – 2022 Proxy Statement 4
PROXY STATEMENT SUMMARY
2021 Performance Overview, cont.
Cash Flow Generation | • We generated free cash flow(1) of $944 million, representing 11.9% of revenue and 84.0% of net earnings as a result of broad-based cost-control efforts and proactive working capital management. Cash flow provided by operating activities was $1,115.9 million. | |||
ESG Initiative | • We made progress on several fronts in line with our three-year plan to expand the scope and robustness of our environmental, social, and governance (“ESG”) practices and disclosures. - We announced science-based targets to reduce our greenhouse gas (“GHG”) emissions, including an absolute reduction of scope 1 and scope 2 market-based GHG emissions of 30 percent by 2030 (from a 2019 baseline year), and an absolute reduction of scope 3 GHG emissions of 15 percent by 2030 (from a 2019 baseline year). - Given the increasing focus on climate risk, we conducted a climate risk assessment and scenario analysis aligned with the Task Force on Climate-related Financial Disclosures (“TCFD”) reporting framework and published a summary of the results to further improve transparency regarding our ESG areas of focus. • We established a working group with four of our largest operating companies by emissions designed to embed sustainability considerations into product development in 2021. • We announced a goal of reducing Total Recordable Injury Rate (“TRIR”) by 40% by 2025 (from a 2019 baseline year). |
(1) Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement.
DOVER CORPORATION – 2022 Proxy Statement 5
PROXY STATEMENT SUMMARY
Total Shareholder Return
In 2021, we continued our long track record of delivering superior value-creation to our shareholders.
Total Shareholder Return1,2 |
Note : These figures represent annualized returns. 1) End date for returns periods is December 31, 2021. 2) Annualized Total Shareholder Return including dividends and spin-offs. Fortive Corporation went public in July 2016 and Ingersoll-Rand merged with Gardner Denver in March 2020. Both stocks are excluded from periods prior to go public / merger dates. Source: Capital IQ |
DOVER CORPORATION – 2022 Proxy Statement 6
PROXY STATEMENT SUMMARY
2018 Performance OverviewGovernance Highlights
Our Board is committed to sound governance practices designed to promote the long-term interests of shareholders and strengthen Board and management accountability. Highlights include:
US GAAP from continuing operations | FY2018 | FY2017 | D | |||||||||
Revenue ($M) |
| 6,992 |
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Earnings ($M) |
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Diluted EPS ($) |
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Non-GAAP(1) from continuing operations | ||||||||||||
Adjusted Earnings ($M) |
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| 15% |
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Adjusted diluted EPS ($) |
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| 20% |
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BOARD OF DIRECTORS |
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✓ Independent Board leadership ✓ In 2020, adopted a diversity search policy for external director and ✓ All directors are independent, other than the CEO ✓ Annual election of directors
✓ Comprehensive annual individual evaluations of one-third of the directors ✓ Regular executive sessions of independent directors ✓ Robust succession planning | ✓ In 2019, achieved removal of all remaining supermajority voting provisions in our charter ✓ In February 2020, reduced ownership threshold required to call a special meeting of shareholders to 15% from 25% ✓ Proxy access right at ✓ Strong share retention guidelines for directors and executive officers ✓ Executive compensation driven by pay-for-performance philosophy ✓ Executive officers not permitted to hedge or pledge company shares |
We encourage feedback from shareholders and have a strong history of engaging with investors on a range of topics, including our executive compensation program, evolving trends and best practices. In 2021, we continued our focus on regularly engaging with shareholders. We reached out to holders of approximately 60% of our shares outstanding, and engaged with governance professionals and/or portfolio managers at investors holding approximately 31% of our shares outstanding. During these discussions, we discussed many key topics, including our commitment to diversity and inclusion, progress on our ESG program and disclosures, our executive compensation program, and our corporate governance practices. Investors continued to express broad support for our governance structures and executive compensation program, including the changes implemented in 2020 in response to shareholder feedback, and shared their views on matters related to diversity and inclusion and our independent, well-qualified Board. Further, investors highlighted the importance of continuing our ongoing engagement with them in the future on long-term corporate strategy and ESG initiatives. For more detailed information regarding these discussions, please see “Shareholder Engagement and History of Board Responsiveness” on page 31.
DOVER CORPORATION – 2022 Proxy Statement 7
PROXY STATEMENT SUMMARY
Our compensation program for executive officers is designed to emphasize performance-based compensation in alignment with our business strategy.
2021 Executive Compensation
The following table summarizes pay mix for our CEO and other NEOs, which is highly performance-based.
EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS |
✓ Pay-for-performance philosophy — a substantial majority of NEO pay is performance-based and tied to Dover’s stock price performance ✓ Significant portion of long-term compensation is performance-based, with long-term incentives vesting over three years subject to rigorous three-year performance period ✓ Strong share ownership guidelines for NEOs ✓ Equity awards with anti-hedging and anti-pledging provisions ✓ Investors provided with clear disclosure regarding the individual strategic objectives and financial metrics in our Executive Officer Annual Incentive Plan (“AIP”) ✓ ESG oversight incorporated into our CEO’s individual strategic objectives in the AIP ✓ Robust clawback structure |
DOVER CORPORATION – 2022 Proxy Statement 8
PROXY STATEMENT SUMMARY
Our Governance and Nominating Committee maintains an active and engaged Board through a robust refreshment process, which focuses on ensuring our Board has a diverse skill set that benefits from both the industry- and company-specific knowledge of our longer-tenured directors, as well as the fresh perspectives brought by our newer directors.
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NAME | OCCUPATION | INDEPENDENT | COMMITTEES MEMBERSHIPS* | OTHER PUBLIC COMPANY BOARDS | ||||||
Deborah L. DeHaas Age: 62 Director Since: 2021 | CEO of the Corporate Leadership Center; Former Vice Chairman of Deloitte and Managing Partner of the Center for Board Effectiveness | ✓ | A | 1 | ||||||
H. John Gilbertson, Jr. Age: 65 Director Since: 2018 | Retired Managing Director at Goldman Sachs | ✓ | A, F | 1 | ||||||
Kristiane C. Graham Age: 64 Director Since: 1999 | Private Investor | ✓ | C, G | 0 | ||||||
Michael F. Johnston Chair of the Board Age: 74 Director Since: 2013 | Retired CEO of Visteon Corporation | ✓ | C, G | 1 | ||||||
Eric A. Spiegel Age: 64 Director Since: 2017 | Former President and CEO of Siemens USA; Special Advisor at Brighton Park Capital | ✓ | A, F (Chair) | 1 | ||||||
Richard J. Tobin Age: 58 Director Since: 2016 | President and CEO of Dover | No (CEO of Dover) | — | 1 | ||||||
Stephen M. Todd Age: 73 Director Since: 2010 | Former Global Vice Chairman of Assurance Professional Practice of Ernst & Young Global Limited | ✓ | A (Chair) | 1 | ||||||
Stephen K. Wagner Age: 74 Director Since: 2010 | Former Senior Adviser, Center for Corporate Governance, Deloitte & Touche LLP | ✓ | A, G (Chair) | 1 | ||||||
Keith E. Wandell Age: 72 Director Since: 2015 | Former President and CEO of Harley-Davidson, Inc. | ✓ | C (Chair), F | 1 | ||||||
Mary A. Winston Age: 60 Director Since: 2005 | President of WinsCo Enterprises Inc.; Former Executive Vice President and Chief Financial Officer (“CFO”) of Family Dollar Stores, Inc. | ✓ | C, F | 3 |
*A = Audit Committee; C = Compensation Committee; G = Governance and Nominating Committee; F = Finance Committee
DOVER CORPORATION – 2022 Proxy Statement 9
Proposal 1 — Election of Directors
Criteria for Director Nominees
The Board seeks to recommend qualified director nominees who, in the opinion of the Board, demonstrate the highest personal and professional integrity as well as exceptional ability and judgment, who can serve as a sounding board for our CEO on planning and policy, and who will be most effective, together with the other nominees to the Board, in collectively serving the long-term interests of all our shareholders.
Key areas of expertise for director nominees, which are reflected in our current director nominees, include:
✓ Strategic M&A | Experience with international acquisitions, post-merger integration, and portfolio restructuring | |||||
✓ Global Operations & Management | Experience with cross-border transactions, global market entry and expansion, and implementation of operational efficiency | |||||
| Experience with capital markets and complex financing transactions | |||||
✓ Strategy Development | Experience with diversified manufacturing in many of the markets and product areas relevant to Dover’s businesses | |||||
✓ Risk Management Expertise | Experience evaluating risk management policies and procedures | |||||
✓ Audit & Corporate Governance Matters | Experience with assurance and audit, regulation, and financial reporting | |||||
✓ Human Capital Management | Experience attracting, developing and retaining talent and building strong cultures | |||||
✓ Sustainability | Experience creating long-term value by embracing opportunities and managing risks deriving from ESG developments | |||||
✓ Executive Leadership Experience | Leadership experience as former CEOs and CFOs of global public companies |
Diversity. In considering diversity in selecting director nominees, the Governance and Nominating Committee gives weight to the extent to which candidates would increase the effectiveness of the Board by broadening the mix of experience, knowledge, backgrounds, skills, ages, and tenures represented among its members. In 2020, our Board adopted a policy reflected in our Corporate Governance Guidelines requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. Our Board believes that diverse perspectives enhance its decision-making and contribute to the success of Dover.
Skills Aligned with Dover’s Strategy. The Governance and Nominating Committee also considers our current Board composition and the projected retirement date of current directors, as well as such other factors it may deem to be in the best interests of Dover and its shareholders, including a director nominee’s leadership and operating experience (particularly as a CEO), financial and investment expertise, and strategic planning experience. We believe that our current director nominees possess the right mix of skills and backgrounds to enable us to achieve our strategic goals.
DOVER CORPORATION – 2022 Proxy Statement 11
PROPOSAL 1 — ELECTION OF DIRECTORS
Independence & Depth of Experience. The Board prefers nominees to be independent but believes it is desirable to have our CEO on the Board as a representative of current management. Given the global reach and broad array of the types of businesses operated by Dover, the Governance and Nominating Committee highly values director nominees with multi-industry and multi-geographic experience.
Whenever the Governance and Nominating Committee concludes that a new nominee to our Board is required or advisable, it will consider recommendations from directors, management, shareholders and, if it deems appropriate, consultants retained for that purpose. In such circumstances, it will evaluate individuals recommended by shareholders in the same manner as nominees recommended from other sources.
Shareholder Nominations for Director
Shareholders who wish to recommend an individual for nomination should send that person’s name and supporting information to the Governance and Nominating Committee, in care of the Corporate Secretary at our principal executive offices, 3005 Highland Parkway, Downers Grove, Illinois, 60515, or through our communications coordinator. Shareholders who wish to directly nominate an individual for election as a director, without going through the Governance and Nominating Committee, must comply with the procedures in our by-laws. Please see “General Information About the Annual Meeting” for nomination deadlines.
Proxy Access Shareholder Right
Following extensive engagement with our shareholders, our Board determined to adopt proxy access in February 2016, permitting a shareholder or group of up to 20 shareholders holding 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our by-laws.
DOVER CORPORATION – 2022 Proxy Statement 12
PROPOSAL 1 — ELECTION OF DIRECTORS
There are ten nominees for election to our Board at this Annual Meeting, each to serve until the next annual meeting of shareholders or his or her earlier removal, resignation or retirement. All of the nominees currently serve on our Board and are being proposed for re-election by our Board.
If any nominee for election becomes unavailable or unwilling to serve as a director before the Annual Meeting, an event which we do not anticipate, the persons named as proxies will vote for a substitute nominee or nominees as may be designated by our Board, or the Board may reduce the number of directors. Directors will be elected by a majority of the votes cast in connection with their election.
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Independent Director Nominee Director since: 2021 Age: 62 Committees: Audit | ||||
Skills and Qualifications: |
Significant leadership, financial and corporate governance expertise garnered from her nearly 40 years of experience at major audit, assurance and consulting firms
Certified public accountant (“CPA”) and has extensive experience with financial, accounting, internal controls, and enterprise risk management
Has deep expertise on governance, both as a topic and discipline, developed during her career at Deloitte
As a member of the Value Reporting Foundation Board (formerly the SASB Foundation Board), contributes valuable and well-informed insights on a variety of ESG matters
Brings relevant public company board service, serving on the board of CF Industries Holdings, Inc.
Brings experience and perspective on matters regarding human capital and culture, including diversity and inclusion
Holds a bachelor’s degree in management science and accounting from Duke University
Included in the National Association of Corporate Directors (“NACD”) Directorship 100 from 2015-2020, recognizing influential leaders in corporate governance and is also an NACD Board Leadership Fellow
Business Experience: |
CEO of the Corporate Leadership Center, a non-profit leadership development forum
Former Vice Chairman and National Managing Partner of the Center for Board Effectiveness at Deloitte
Former member of the U.S. Executive Committee
Former Vice Chairman and Chief Inclusion Officer
Former member of the U.S. Board of Directors
Former Vice Chairman and Central Region Managing Partner
Former Vice Chairman and Midwest Regional Managing Partner
Former Regional Managing Partner, Strategic Clients
Former positions of increasing responsibility at Arthur Andersen, an audit, financial advisory, tax and consulting firm, most recently as Managing Partner & Business Advisory Assurance, Central Region
Other Board Experience: |
CF Industries Holdings, Inc.
DOVER CORPORATION –20192022 Proxy Statement 413
PROXY STATEMENT SUMMARYPROPOSAL 1 — ELECTION OF DIRECTORS
| H. John Gilbertson, Jr. | |||
Independent Director Nominee Director since: 2018 Age: 65 Committees: Audit, Finance | ||||
Skills and Qualifications: |
On May 1, 2018, Richard J. Tobin became our new President and Chief Executive Officer (“CEO”) following Robert A. Livingston’s retirement. Mr. Tobin continues to serve on our Board, which he joined in August 2016. Mr. Livingston resigned as a director concurrent with his retirement. Michael F. Johnston, as independent Chair of the Board, provided continuity of oversight of management through the transition.
Mr. Tobin’s appointment is the result of our Board’s active engagement in a thoughtful and comprehensive succession planning process led by our independent Chair and the independent Chair of our Governance and Nominating Committee, who identified talented external leaders and worked with our former CEO to evaluate and develop internal candidates. Ultimately, our Board determined that Mr. Tobin’s extensive experience as a public company CEO leading complex global industrial businesses and his expertise in finance and technology made him the best candidate to lead Dover. Our Board was impressed with Mr. Tobin’s contributions as a director and is confident that he is the right leader to guide us through the next phase of our evolution.
Immediately after starting as President and CEO, Mr. Tobin performed anin-depth study of our businesses, makingon-site visits, conducting management team reviews, and analyzing the three-year strategic plans for each of our operating companies. As an outgrowth of this review, he identified and began executing on strategic priorities designed to position us to realize our earnings and growth potential, including near-term initiatives to improve our margins through cost rightsizing and footprint consolidation. Mr. Tobin also has articulated our Board’s capital allocation priorities and developed a disciplined framework for portfolio enhancement and a balanced operating model for Dover. He has committed to report to shareholders in 2019 on our progress on operational improvements and capital allocation priorities as well as to present a holistic view on portfolio strategy, growth drivers, and areas for reinvestment and to articulate longer term strategic goals for the next evolution of Dover.
Our Board welcomed H. John Gilbertson, Jr. as a director in August 2018. As a former Managing Director of Goldman Sachs Group Inc. (“Goldman Sachs”), Mr. Gilbertson has extensiveExtensive experience in corporate finance, capital markets, and mergers and acquisitions. The insights he gainedacquisitions
Served as ana strategic and financial advisor to his clients, acrossforming deep relationships with companies in a broad range of industries will bring valuable perspective
Has nearly four decades of experience in the professional and financial services industry
Deep expertise in financial management, coupled with his analytical and collaborative mindset, allows him to make invaluable contributions to our Board. Mr. Gilbertson serves on ourBoard
Strong background in senior leadership development, succession planning, and organizational culture development
Brings to the Board considerable expertise in financial risk oversight and capital allocation
Bachelor’s degree in political economy from Dartmouth College and an MBA from Harvard University
Business Experience: |
Retired Managing Director at Goldman Sachs
Served as Advisory Director and Partner-in-Charge, Midwest Region Investment Banking Services
Served as Managing Director at Travelers Group Inc.
Former Associate, Mergers and Acquisitions at Morgan Stanley
Former Consultant, Corporate Strategy at Bain & Company
Former Assistant Treasurer, Corporate Banking at Chase Manhattan Bank
Former News Reporter at The Providence Journal Company
Other Board Experience: |
Director and Chair of Audit Committee and Finance Committee.
Current directors Peter T. Francis and Richard K. Lochridge are not standing forre-election and will retire from the Board effective as of the Annual Meeting. Mr. Francis has been a director since 2007, and Mr. Lochridge has been a director since 1999. The Board expresses its deep gratitude to eachMeijer, Inc. (“Meijer”)
Director of Messrs. Francis and Lochridge for their guidance and significant contributions to Dover during their years of dedicated service on the Board.
The Board established a new Finance Committee comprised of independent directors in 2018. The Finance Committee assists the Board in overseeing policies, practices, strategies, and risks relating to our financial affairs, including with respect to capital allocation matters such as share repurchases, dividend policy, capital expenditures and M&A, as well as global treasury activities, insured risk management, and tax planning.
In 2018, we continued our focus on regularly engaging with our shareholders. We reached out to holders of over 51% of our shares outstanding, and engaged with governance professionals and/or portfolio managers at investors holding 32% of our shares outstanding. During these discussions, we discussed many topics, including our recent CEO transition, executive compensation program, and Board refreshment practices. Investors continued to express broad support for our governance structures and shared their views on matters related to shareholder rights and ourAAR Corp.
DOVER CORPORATION –20192022 Proxy Statement 514
PROXY STATEMENT SUMMARYPROPOSAL 1 — ELECTION OF DIRECTORS
| Kristiane C. Graham | |||
Independent Director Nominee Director since: 1999 Age: 64 Committees: Compensation, Governance and Nominating | ||||
Skills and Qualifications: |
Experience as a private investor with substantial holdings of Dover stock and her shared interests in Dover, including interests through charitable organizations of which she is a director, makes her a good surrogate for our individual and retail investors
Experience with a commercial bank, primarily as a loan officer; founded and operated an advisory company and a publication regarding international thoroughbred racing and now co-manages her family’s investments
Actively works with and has served on the boards of various organizations to support the objectives of local communities, affordable housing, education, and health
Currently serves on the Board of Directors for the Walter N. Ridley Scholarship Fund at the University of Virginia
Serves as an Emeritus Trustee of the College Foundation of the University of Virginia and has previously served on the Advisory Board of the University of Virginia School of Nursing
Brings valuable insights on the development of our policies and strategies relating to talent, leadership, and culture, with a focus on diversity and inclusion
Devoted substantial time to monitoring the development of Dover operating company leaders, enabling her to provide the Board valuable insights regarding management succession
As a member of one of the founding families of Dover, Ms. Graham also brings to the Board a sense of Dover’s historical values, culture and strategic vision which the Board believes is beneficial as it considers various strategic planning alternatives for shaping Dover’s future
Business Experience: |
Private Investor
DOVER CORPORATION – 2022 Proxy Statement 15
PROPOSAL 1 — ELECTION OF DIRECTORS
| Michael F. Johnston | |||
Independent Board Chair; Independent Director Nominee Director since: 2013 Age: 74 Committees: Compensation, Governance and Nominating | ||||
Skills and Qualifications: |
Brings industry insight, financial expertise and leadership experience garnered from his 17 years on the boards of global companies
Served as CEO of an $18 billion global manufacturer
Mr. Johnston also brings valuable corporate governance perspectives from his prior board service, including as a lead Director and Chair of other major public companies
Brings deep operations experience has helped him gain knowledge and a deep understanding in manufacturing, design, innovation, engineering, accounting and finance and capital structure
Brings nearly two decades of experience in building businesses in emerging economies
Bachelor’s degree in industrial management from the University of Massachusetts and an MBA from Michigan State University
Business Experience: |
Former CEO and President of Visteon Corporation (“Visteon”)
Former Chief Operating Officer of Visteon
Former President of North America/Asia Pacific, Automotive Systems Group, of Johnson Controls, Inc. (“Johnson Controls”)
Former President of Americas Automotive Group of Johnson Controls
Other Board Experience: |
Director of Armstrong Flooring, Inc.
Former Chairman and Director of Visteon
Former Director of Armstrong World Industries, Flowserve Corporation, and Whirlpool Corporation
DOVER CORPORATION – 2022 Proxy Statement 16
PROPOSAL 1 — ELECTION OF DIRECTORS
| Eric A. Spiegel | |||
Independent Director Nominee Director since: 2017 Age: 64 Committees: Audit, Finance (Chair) |
Skills and Qualifications: |
Experienced business leader with diversified, global experience who brings deep and valuable expertise in strategy development, corporate restructuring, portfolio management and M&A to our Board
40+ years of experience working with large, global companies in the energy and industrial markets, mostly recently as President & CEO of Siemens USA
At Siemens, he led strategic reviews across a portfolio of ~45 businesses in the company’s largest market with over $22 billion in revenue, 50,000 employees and over 60 manufacturing facilities
Led the acquisition, divestiture, joint venture and carve-out of over 30 business units and segments
Executed Siemens’ “Vision 2020” initiative to optimize growth and margins in the U.S., across all sectors
Prior to Siemens, Mr. Spiegel was a global consultant at Booz Allen Hamilton focused on complex organizations in the energy, power, chemical, water, industrial and automotive fields
At Booz, he worked with major energy clients globally on projects around corporate strategy, M&A, major capital projects, cost restructuring, margin enhancement and supply chain re-design and was also closely involved with the government sector
An expert on the global energy industry, Mr. Spiegel co-authored the book Energy Shift: Game-changing Options for Fueling the Future
Holds a bachelor’s degree in economics from Harvard University and an MBA from the Tuck School of Business at Dartmouth College
Business Experience: |
Special Advisor at Brighton Park Capital, a private equity firm, where he supports the firm’s sector investment teams and portfolio companies by providing strategic counsel on industry trends and growth strategies
Former President and CEO of Siemens USA
Former Managing Partner, Global Energy, Chemicals, and Power, and Managing Partner, Washington, D.C. office, and other roles at Booz & Company, Inc. (now known as Strategy&) and Booz Allen Hamilton, Inc., global consulting firms
Former Associate, Energy and Industrials Practice, at Temple, Barker & Sloane, Inc. (now known as Oliver Wyman)
Former Marketing and Strategy Manager at Brown Boveri & Cie (now known as ABB), a Swiss group of electrical engineering companies
In connection with his position at Brighton Park Capital, Mr. Spiegel serves as Chair of Relatient, Inc.
Other Board Experience: |
Director and Audit Committee Chair of Liberty Mutual Holding Company, Inc.
Director and Audit Committee Chair of Project Energy Reimagined Acquisition Corp.
DOVER CORPORATION – 2022 Proxy Statement 17
PROPOSAL 1 — ELECTION OF DIRECTORS
| Richard J. Tobin | |||
Chief Executive Officer Director since: 2016 Age: 58 Committees: None | ||||
Skills and Qualifications: |
Mr. Tobin is Dover’s current CEO. The Board believes it is desirable to have one active management representative on the Board to facilitate its access to timely and relevant information and its oversight of management’s long-term strategy, planning, and performance
Has a broad range of industry and functional experiences acquired through regional and global leadership positions
Former CEO of CNH Industrial, a complex international industrial company, where he led efforts to increase efficiencies, innovate through new technologies, expand geographically, and maximize the company’s portfolio of businesses
Gained extensive experience in international finance, operations, management, and information technology in his prior roles
Developed deep expertise with global capital markets through his international finance leadership roles
Prior to beginning his business career, Mr. Tobin was an officer in the United States Army
Member of the Board of Trustees of the John G. Shedd Aquarium in Chicago
Formerly served on the U.S. Chamber of Commerce Board of Directors, and is a former member of the Business Roundtable
Holds a bachelor of arts from Norwich University and an MBA from Drexel University
Business Experience: |
President and CEO of Dover
Former CEO of CNH Industrial NV (“CNH Industrial”)
Former Group Chief Operating Officer of Fiat Industrial S.p.A
Former President and CEO of CNH Global NV
Former CFO of CNH Global NV
Former Chief Finance Officer & Head of Information Technology of SGS Group
Former Chief Operating Officer for North America of SGS Group
Other Board Experience: |
Director of KeyCorp.
Former director of CNH Industrial
DOVER CORPORATION – 2022 Proxy Statement 18
PROPOSAL 1 — ELECTION OF DIRECTORS
| Stephen M. Todd | |||
Independent Director Nominee Director since: 2010 Age: 73 Committees: Audit (Chair) | ||||
Skills and Qualifications: |
Extensive accounting and financial experience in both domestic and international business developed during a four decade career at Ernst & Young where he specialized in assurance and audit
Brings unique insights into accounting and financial issues relevant to multinational companies like Dover
Brings the perspective of an outside auditor to the Audit Committee
Brings leadership and financial strategy experience as developer and director of Ernst & Young’s Global Capital Markets Centers, which provides accounting, regulatory, internal control and financial reporting services to multinational companies in connection with cross-border debt and equity securities transactions and acquisitions
Business Experience: |
Former Global Vice of Assurance Professional Practice of Ernst & Young Global Limited, London, UK; and prior thereto, various positions with Ernst & Young
Other Board Experience: |
Director and Audit Committee member of ChampionX Corporation (formerly known as Apergy Corporation)
Former member of the Board of Trustees of PNC Funds
DOVER CORPORATION – 2022 Proxy Statement 19
PROPOSAL 1 — ELECTION OF DIRECTORS
| Stephen K. Wagner | |||
Independent Director Nominee Director since: 2010 Age: 74 Committees: Audit, Governance and Nominating (Chair) | ||||
Skills and Qualifications: |
Mr. Wagner’s over 30 years of experience in accounting make him a valuable resource for the Board and the Audit Committee
His work with Sarbanes-Oxley and other corporate governance regulations, including his years as Managing Partner at Deloitte & Touche’s Center for Corporate Governance, makes him well suited to advise the Board on financial, auditing and finance-related corporate governance matters as well as risk management
Expert in risk oversight and co-authored a book on risk management entitled Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise
Brings to the Board an outside auditor’s perspective on matters involving audit committee procedures, internal control and accounting and financial reporting matters
Business Experience: |
Former Senior Advisor, Center for Corporate Governance, of Deloitte & Touche LLP (“Deloitte”)
Former Managing Partner, Center for Corporate Governance of Deloitte
Former Deputy Managing Partner, Innovation, Audit and Enterprise Risk, United States of Deloitte
Former Co-Leader, Sarbanes-Oxley Services, of Deloitte
Other Board Experience: |
Director and Audit Committee member of ChampionX Corporation (formerly known as Apergy Corporation)
DOVER CORPORATION – 2022 Proxy Statement 20
PROPOSAL 1 — ELECTION OF DIRECTORS
| Keith E. Wandell | |||
Independent Director Nominee Director since: 2015 Age: 72 Committees: Compensation (Chair), Finance | ||||
Skills and Qualifications: |
Mr. Wandell brings to the Board the valuable perspective of a strategic, experienced leader with a strong record focused on growth, profitability, international expansion and innovation.
Has over 30 years of experience in diversified manufacturing businesses, most recently as the former Chairman and CEO of Harley-Davidson, Inc. (“Harley-Davidson”) where he led transformation efforts across the company’s product development, manufacturing and retail functions, focused on international expansion and implemented a restructuring plan
Prior to joining Harley-Davidson, Mr. Wandell served as President and Chief Operating Officer of Johnson Controls, Inc. (“Johnson Controls”) and helped manage the company’s entry into the Chinese car-battery market as well as its subsequent joint venture with China’s largest battery manufacturer
Gained valuable insights into the effective development of executive leadership capabilities and strong corporate cultures through his experience as a senior leader at various companies
Served on the boards of four other public companies, including the two on which he currently serves
Holds a bachelor’s degree in business administration from Ohio University and an MBA from the University of Dayton
Business Experience: |
Former President and CEO of Harley-Davidson
Former President and Chief Operating Officer of Johnson Controls
Former Executive Vice President of Johnson Controls
Former Corporate Vice President of Johnson Controls
Former President of the Automotive Experience business of Johnson Controls
Former President of the Power Solutions business of Johnson Controls
Other Board Experience: |
Director of Dana Incorporated. Former Chairman of Harley-Davidson
Former Director of Constellation Brands, Inc. and Clarcor, Inc.
DOVER CORPORATION – 2022 Proxy Statement 21
PROPOSAL 1 — ELECTION OF DIRECTORS
| Mary A. Winston | |||
Independent Director Nominee Director since: 2005 Age: 60 Committees: Compensation, Finance | ||||
Skills and Qualifications: |
Ms. Winston brings to the Board valuable experience and expertise based on her years of broad financial management and broad executive leadership experience.
Started her career as a CPA with Arthur Andersen & Co, and has extensive experience with financial, accounting and internal control matters for large public companies.
Served as CFO of three large companies: Family Dollar Stores, Inc., Giant Eagle, Inc. and Scholastic, Inc., as well as prior global finance leadership roles (prior to 2004) at Visteon Corporation and Pfizer, Inc.
Developed deep expertise in capital markets, M&A, capital structure matters, capital allocation, financial risk management, real estate financing transactions, dividend and stock repurchase programs, and investor relations
Ms. Winston’s background and experience make her a valuable contributor to the Board on matters involving risk oversight and capital allocation, as well as executive compensation and general corporate governance matters
Holds a bachelor’s degree in accounting from the University of Wisconsin and an MBA from Northwestern University’s Kellogg School of Management
Designated as a Board Leadership Fellow by the NACD and serves on the national board of the NACD
Business Experience: |
President of WinsCo Enterprises Inc
Former Interim CEO, Bed Bath & Beyond Inc.
Former Executive Vice President and CFO of Family Dollar Stores, Inc.
Former Senior Vice President and CFO of Giant Eagle, Inc.
Former President of WinsCo Financial LLC
Former Executive Vice President and CFO of Scholastic Corporation
Other Board Experience: |
Director of Bed Bath & Beyond, Inc., Chipotle Mexican Grill, and Acuity Brands, Inc.
Former Director of Domtar Corporation, SUPERVALU INC., and Plexus Corporation
THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH
OF THE NOMINEES NAMED ABOVE.
DOVER CORPORATION – 2022 Proxy Statement 22
PROPOSAL 1 — ELECTION OF DIRECTORS
Board Oversight and Governance Practices
Our Board is responsible for, and committed to, overseeing our long-term strategic development as well as managing the principal and most significant risks that we face. In carrying out this duty, our Board advises senior management to help drive long-term value creation for our shareholders. The Board delegates specific areas of responsibility to relevant Board committees, as detailed below under the heading “Overview of Committee Responsibilities”, who report on their deliberations to the Board. The following summarizes our Board’s key areas of oversight responsibility.
Board Oversight
KEY AREAS OF BOARD OVERSIGHT | ||
Long-Term Business Strategy | • One of the primary responsibilities of our Board is the oversight of management’s long-term strategy and planning. Accordingly, our Board maintains a deep level of engagement with management in setting and overseeing Dover’s long-term business strategy. | |
Capital Allocation | • Our Board is focused on the efficient allocation of capital to drive growth and provide returns to our shareholders. Our capital allocation priorities are organic investments, strategic acquisitions, and the return of capital to our shareholders. • We consistently return cash to shareholders by paying dividends, which have increased annually over each of the last 66 years. • We also undertake opportunistic share repurchases as part of our capital allocation strategy, completing $21.6 million of share repurchases in 2021 and $106.3 million in 2020. • We made $171.5 million in capital expenditures in 2021, representing 2.2% of revenue, and $165.7 million in capital expenditures in 2020, representing 2.5% of revenue, in line with our priority of organic reinvestment to grow and strengthen our existing businesses. • We employ a prudent financial policy to support our capital allocation strategy, which includes maintaining an investment grade credit rating. | |
Portfolio Management | • Businesses in our portfolio are continually evaluated for strategic fit. • We seek to deploy capital in acquisitions in attractive growth areas across our five segments. We focus primarily on bolt-on acquisitions, applying strict selection criteria of market attractiveness (including growth, market landscape, and performance-based competition), business fit (including sustained leading position, revenue visibility, and favorable customer value-add versus switching cost or risk) and financial return profile (accretive growth and margins and double-digit return on invested capital). • We have sold or divested some of our businesses based on changes in specific market outlook, structural changes in financial performance, value-creation potential, or for other strategic considerations, which included an effort to reduce our exposure to cyclical markets or focus on our higher margin growth spaces. • In recognition of recent portfolio changes, we recently changed the name of the Fueling Solutions segment to “Clean Energy & Fueling,” and the Refrigeration & Food Equipment segment to “Climate & Sustainability Technologies” to better reflect the markets and customers served by the businesses within these segments. |
DOVER CORPORATION – 2022 Proxy Statement 23
PROPOSAL 1 — ELECTION OF DIRECTORS
KEY AREAS OF BOARD OVERSIGHT | ||
Risk | • Our Board has established a comprehensive enterprise risk management process to identify and manage risks, and periodically reviews the processes established by management to identify and manage risks and communicates with management about these processes. • We have established a risk assessment team consisting of senior executives, which annually, with the assistance of a consultant, oversees a risk assessment made at the corporate center, segment and operating company levels and, with that information in mind, performs an assessment of the overall risks our company may face and reports to the Board on that assessment. Each quarter, this team reassesses the risks, the severity of these risks, and the status of efforts to mitigate them. | |
ESG | • The full Board has oversight of ESG matters and is regularly briefed on strategic planning, risks, and opportunities related to ESG by senior management, including our CEO. • Our Compensation Committee has integrated ESG oversight responsibility into our CEO’s individual strategic objectives within the AIP. | |
Culture & Human Capital Management | • Our entrepreneurial culture depends upon an inclusive approach that values employees’ diversity and contributions. • We foster an operating culture with high ethical standards that values accountability, rigor, trust, inclusion, respect, and open communication and is designed to encourage individual growth and operational effectiveness. We continue to make significant investments in talent development, including in the areas of digital applications and operational management, and recognize that the growth and development of our employees is essential for our continued success. • As part of our commitment to strong corporate governance practices, we maintain an active and robust ethics program. Our Code of Business Conduct & Ethics (“Code of Conduct”) applies to all employees and directors of Dover and its subsidiaries. We enforce our Code of Conduct fairly and consistently, regardless of one’s position in Dover, and will not tolerate retaliation against those who report suspected misconduct in good faith. | |
Succession Planning | • Another of the Board’s primary responsibilities is overseeing a sound Board and management succession process. The Board has developed a comprehensive plan to address management succession — both over the long term and for emergency purposes. The framework for the long-term plan includes thoughtful, deliberate monitoring of management beyond our top executives to ensure Dover continues to build a deep internal bench of talent. • Our Board is also focused on its own succession plan, which drives not only our director selection efforts, but also how we approach Board and committee leadership structure and membership, with a focus on critical board skills, diversity, and independence. | |
Cybersecurity | • The full Board is briefed on enterprise-wide cybersecurity risk management and the overall cybersecurity risk environment, and oversees major tasks related to cybersecurity risk management, periodically reviews our response capabilities, and meets with the Chief Information Security Officer on at least an annual basis. • Dover employs the National Institute of Standards & Technology Framework for Improving Critical Infrastructure Cybersecurity (The NIST Framework). This voluntary guidance developed with much private sector input provides a framework and a toolkit for organizations to manage cybersecurity risk. |
DOVER CORPORATION – 2022 Proxy Statement 24
PROPOSAL 1 — ELECTION OF DIRECTORS
Board Committees
Our Board has four standing committees — the Audit Committee, the Compensation Committee, the Governance and Nominating Committee, and the Finance Committee. The table below sets forth a summary of our committee structure and membership information.
DIRECTOR | Audit Committee | Compensation Committee | Governance and Nominating | Finance Committee | ||||
DEBORAH L. DEHAAS | ✓ | |||||||
H. JOHN GILBERTSON, JR. | ✓ | ✓ | ||||||
KRISTIANE C. GRAHAM | ✓ | ✓ | ||||||
MICHAEL F. JOHNSTON | ✓ | ✓ | ||||||
ERIC A. SPIEGEL | ✓ | ✓ (Chair) | ||||||
RICHARD J. TOBIN | ||||||||
STEPHEN M. TODD | ✓ (Chair) | |||||||
STEPHEN K. WAGNER | ✓ | ✓ (Chair) | ||||||
KEITH E. WANDELL | ✓ (Chair) | ✓ | ||||||
MARY A. WINSTON | ✓ | ✓ | ||||||
MEETINGS HELD IN 2021 | 8 | 5 | 4 | 9 |
DOVER CORPORATION – 2022 Proxy Statement 25
PROPOSAL 1 — ELECTION OF DIRECTORS
Overview of Committee Responsibilities
Audit Committee | ||
Stephen M. Todd (Chair) Deborah L. DeHaas H. John Gilbertson, Jr. Eric A. Spiegel Stephen K. Wagner | Key Responsibilities • Selecting and engaging our independent registered public accounting firm (“independent auditors”) • Overseeing the work of our independent auditors and our internal audit function • Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the committee • Reviewing with management and the independent auditors the audit plan and results of the auditing engagement • Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting The Audit Committee holds regular quarterly meetings at which it meets separately with each of our independent registered public accounting firm, PwC, our internal audit function, financial management and our general counsel to assess certain matters including the status of the independent audit process, management’s assessment of the effectiveness of internal control over financial reporting and the operation and effectiveness of our compliance program. In addition, the Audit Committee, as a whole, reviews and meets to discuss the contents of each Form 10-Q and Form 10-K (including the financial statements) prior to its filing with the SEC. Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the SEC rules. The Audit Committee’s responsibilities and authority are described in greater detail in its written charter. |
Compensation Committee | ||
Keith E. Wandell (Chair) Kristiane C. Graham Michael F. Johnston Mary A. Winston | Key Responsibilities The Compensation Committee, together with our independent directors, approves compensation for the CEO of Dover. The functions of the Compensation Committee also include: • Approving compensation for executive officers who report directly to the CEO (together with the CEO, “senior executive officers”) • Granting awards and approving payouts under our 2012 Equity and Cash Incentive Plan (the “2012 LTIP”), our 2021 Omnibus Incentive Plan (the “2021 LTIP”). and our AIP • Approving changes to our executive compensation plans • Reviewing and recommending compensation for the Board • Overseeing succession planning and management development programs The Compensation Committee’s responsibilities and authority are described in greater detail in its written charter. |
DOVER CORPORATION – 2022 Proxy Statement 26
PROPOSAL 1 — ELECTION OF DIRECTORS
Governance and Nominating Committee | ||
Stephen K. Wagner (Chair) Kristiane C. Graham Michael F. Johnston | Key Responsibilities • Developing and recommending corporate governance principles to our Board • Annually reviewing the requisite skills and characteristics of board members as well as the size, composition, functioning and needs of our Board as a whole • Considering and recommending to the Board nominees for election to, or for filling any vacancy on, our Board in accordance with our by-laws, our governance guidelines, and the committee’s charter • Identifying and recommending to our Board any changes it believes desirable in the size and composition of our Board • Recommending to our Board any changes it believes desirable in structure and membership of our Board’s committees • Providing oversight of Dover’s practices on political contributions and lobbying expenses and reviewing annually Dover’s political contributions and lobbying expenses The Governance and Nominating Committee’s responsibilities and authority are described in greater detail in its written charter. |
Finance Committee | ||
Eric A. Spiegel (Chair) H. John Gilbertson, Jr. Keith E. Wandell Mary A. Winston | Key Responsibilities • Reviewing and recommending for approval by the Board proposed changes to dividend policies, stock splits, and repurchase programs • Reviewing our capital structure, liquidity, and financing plans • Reviewing and approving the registration and issuance of debt or equity securities • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, capital expenditures • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, M&A transactions • Oversight of treasury, insurance, and tax planning matters The Finance Committee’s responsibilities and authority are described in greater detail in its written charter. |
DOVER CORPORATION – 2022 Proxy Statement 27
PROPOSAL 1 — ELECTION OF DIRECTORS
Corporate Governance
Our Board is committed to sound governance practices and regularly reviews and refines our profile to reflect evolving best practices and matters raised by our shareholders. The following summarizes key aspects of our governance framework.
GOVERNANCE HIGHLIGHTS | ||
Independent Board of Directors | • All directors are independent, other than our CEO, and our Board has leadership that is independent from management, by way of an independent Chair. | |
Commitment to Diversity | • In 2020, our Board adopted a policy reflected in our Corporate Governance Guidelines requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. | |
Special Shareholder Meetings | • In 2020, we amended our by-laws to reduce the ownership threshold required to call a special meeting of shareholders to 15% or more of the voting power of our outstanding stock from 25%. | |
Elimination of | • All of the supermajority voting provisions in our charter were eliminated in 2019. | |
Board Committee Refreshment | • Our Board periodically reviews committee composition and chair positions, seeking the appropriate blend of continuity and fresh perspectives on committees. | |
Annual Majority Vote Director Elections & Mandatory Resignation Policy | • All of our directors are elected annually by our shareholders. • Our directors must receive a majority of the votes cast in uncontested elections to be elected. • We have a director resignation policy that requires a director to tender an irrevocable resignation letter to the Board prior to being nominated, contingent on the director not receiving a majority of the votes cast in an uncontested election and the Board’s acceptance of the resignation. The Governance and Nominating Committee will recommend to the full Board whether to accept the resignation or whether to take other action. | |
Proxy Access | • Our by-laws permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws. |
Board Leadership Structure
We believe that having an independent well-qualifiedleader of the Board is important to the Board’s oversight role and decision-making involving corporate strategy, performance, succession, and other critical matters. Under our current Board leadership structure, our Board has leadership that is independent from management by way of an independent Chair. Our CEO is also a member of the Board as a management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. In our view, this board leadership structure gives us an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.
Board, Committee and Individual Director Evaluations
Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluates one-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. Further, investors highlightedNew directors undergo the importanceevaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a more in-depth, comprehensive evaluation for each of our directors.
DOVER CORPORATION – 2022 Proxy Statement 28
PROPOSAL 1 — ELECTION OF DIRECTORS
Directors’ Meetings and Attendance
During 2021, the Board met seven times. No director attended less than 75% of the board and standing committee meetings held while he or she was a member of the Board and relevant standing committee. Average board attendance was over 97% in 2021. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives or non-independent directors present. The Chair of the Board presides at these sessions. We expect our directors to attend the Annual Meeting. All directors attended the 2021 Annual Meeting.
Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls, or in-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with themshareholders.
Management Meetings and Site Visits
We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makes on-site visits to our businesses to tour the manufacturing facilities and meet face-to-face with company management and employees. These visits serve as an important tool in the futureBoard’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture. In 2021, these types of opportunities for engagement were largely conducted virtually rather than in-person.
Director Orientation and Education
All new directors participate in our director orientation program. New directors meet with senior corporate leaders to review and discuss our businesses, operations, strategy, end markets, governance, internal controls, and culture. We believe that our on-boarding approach, coupled with participation in regular Board and committee meetings, as well as additional exposure to our business through participation in management meetings and site visits, whether virtually or in-person, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.
Our Board also encourages directors to participate annually in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.
Director Independence
Our Board has determined that each of the current members of the Board, except for Richard J. Tobin, who is our CEO, has no material relationship with Dover and satisfies all the criteria for being “independent” members of our Board. This includes the criteria established by the U.S. Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”) listing standards, as well as our standards for classification as an independent director which are available on long-termour website at www.dovercorporation.com. Our Board makes an annual determination of the independence of each nominee for director prior to his or her nomination for re-election. No director may be deemed independent unless the Board determines that he or she has no material relationship with Dover, directly or as an officer, shareholder or partner of an organization that has a material relationship with Dover.
Majority Standard for Election of Directors and Mandatory Resignation Policy
Under our by-laws and corporate strategygovernance guidelines, the voting standard in director elections is a majority of the votes cast. Under this majority of the votes cast standard, a director must receive more votes in favor of his or her election than votes against his or her election. Abstentions and sustainability initiatives. broker non-votes do not count as votes cast with respect to a director’s election. In contested director elections (where there are more nominees than available seats on the board), the plurality standard will apply. Under the plurality standard, the nominees who receive the most “for” votes are elected to the Board until all seats are filled.
For more detailed informationan incumbent director to be nominated for re-election, he or she must submit an irrevocable resignation letter. The resignation will be contingent on the nominee not receiving a majority of the votes cast in an uncontested election and on the Board’s acceptance of the resignation. If an incumbent director fails to receive a majority of the votes cast in an uncontested
DOVER CORPORATION – 2022 Proxy Statement 29
PROPOSAL 1 — ELECTION OF DIRECTORS
election, the Governance and Nominating Committee will make a recommendation to our Board concerning whether to accept or reject the resignation or whether other action should be taken. Our Board will act on the resignation within 90 days following certification of the election results, taking into account the committee’s recommendation. The Board will publicly announce its decision and, if the resignation is rejected, the rationale for its decision.
Governance Guidelines and Code of Ethics
Our Board long ago adopted written corporate governance guidelines that set forth the responsibilities of our Board and the qualifications and independence of its members and the members of its standing committees. The Board reviews these guidelines at least annually, in light of evolving best practices, shareholder feedback and the evolution of our business. In 2020, the Board amended the guidelines to require that initial lists of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. In addition, our Board has a long-standing Code of Conduct setting forth standards applicable to all of our companies and their employees, a code of ethics for our CEO and senior financial officers, and charters for each of its standing committees. All of these documents (referred to collectively as “governance materials”) are available on our website at www.dovercorporation.com.
Procedures for Approval of Related Person Transactions
We generally do not engage in transactions in which our senior executive officers or directors, any of their immediate family members or any of our 5% shareholders have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and an amount that exceeds $120,000, it would be subject to review and approval by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are available with the governance materials on our website.
Under the procedures, management determines whether a proposed transaction requires review under the policy and, if so, presents the transaction to the Governance and Nominating Committee. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves or rejects the transaction. If the proposed transaction is immaterial or it is impractical or undesirable to defer the proposed transaction until the next committee meeting, the Chair of the committee decides whether to (i) approve the transaction and report the transaction at the next meeting or (ii) call a special meeting of the committee to review and approve the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve or reject the transaction. No director may participate in the review of any transaction in which he or she is a related person.
Communication with Directors
The Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (“accounting matters”) and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting matters. Such complaints or concerns may be submitted to Dover, care of our Corporate Secretary or through the communications coordinator, an external service provider, by mail, fax, telephone, or via the internet as published on our website. The communications coordinator forwards such communications to Dover without disclosing the identity of the sender if anonymity is requested.
Shareholders and other interested persons may also communicate with our Board and the non-management directors in any of these discussions, please see “same manners. Such communications are forwarded to the Chair of the Governance and Nominating Committee.
DOVER CORPORATION – 2022 Proxy Statement 30
PROPOSAL 1 — ELECTION OF DIRECTORS
Shareholder Engagement and History of Board Responsiveness
Shareholder EngagementNominations for Director”.
These discussions provide our Board with valuable insights into our shareholders’ views. In this proxy statement, we describe the feedback we received, and acted upon, regarding several matters, including our Board’s proposals to remove super-majority voting provisions from our charter. We plan to continue to actively engage with our shareholders on a regular basis to better understand and consider their views.
Management Proposals to Remove Super-Majority Voting Provisions
Proposals 4Shareholders who wish to recommend an individual for nomination should send that person’s name and 5 of this proxy statement request that shareholders approvesupporting information to the removalGovernance and Nominating Committee, in care of the remaining super-majority provisionsCorporate Secretary at our principal executive offices, 3005 Highland Parkway, Downers Grove, Illinois, 60515, or through our communications coordinator. Shareholders who wish to directly nominate an individual for election as a director, without going through the Governance and Nominating Committee, must comply with the procedures in our charter. The super-majority voting provisions are limited to (1) amendments to Article 15 of our charter relating to certain share repurchases from “interested stockholders” (defined in our charter as a beneficial holder of 5% or more of our shares, unless heldby-laws. Please see “General Information About the Annual Meeting” for more than four years) at a per share price in excess of the applicable market price or the ability for shareholders to use cumulative voting in the election of directors once there is a “substantial stockholder” (defined in our charter as a beneficial holder of 40% or more of our shares) (Proposal 4), and (2) amendments to the provision of Article 16 of our charter that prohibits action by written consent of shareholders (Proposal 5). These provisions were originally designed to ensure that the interests of all shareholders were adequately represented in the event any of the actions contemplated by these provisions were to occur. However, the Board is aware that some shareholders oppose super-majority provisions, arguing that super-majority voting provisions may limit the ability of a majority of common shareholders to effect changes they desire.nomination deadlines.
Informed in part byProxy Access Shareholder Right
Following extensive engagement with our shareholders, we presented these proposals at our 2017 and 2018 Annual Meetings. The proposals were supported by holdersBoard determined to adopt proxy access in February 2016, permitting a shareholder or group of just over 79% of our outstanding common stock in both 2017 and 2018, a level of support below the required affirmative vote of the holders of at least 80%up to 20 shareholders holding 3% of our outstanding shares of common stock.
Following the 2018 meeting, we sought further shareholder input as our Board considered next steps regarding the remaining super-majority provisions. Shareholders expressed appreciationstock for our continued effortsat least three years to remove the provisions and acknowledged our continued responsiveness to shareholder feedback while facing the high hurdle presented by the current 80% voting requirement in our charter to approve amendments to remove the super-majority provisions. Given our proactive and continued efforts to remove the remaining super-majority provisions over the past several years,nominate a number of investors stated that they would have been supportive ifdirectors constituting the greater of two directors or 20% of the number of directors on our Board, did not present a management proposal to eliminate supermajority provisionsas set forth in 2018. However, several shareholders continued to express a preference for simple majority voting requirements and encouraged us to put forth another management proposal to remove the remaining super-majority voting provisionsdetail in our charter. Shareholder feedback was a factor in the Board’s decision to again present these two proposals at the 2019 Annual Meeting in order to continue evolving our governance practices to ensure we operate with abest-in-classby-laws. governance structure.
DOVER CORPORATION –2019 Proxy Statement 6
PROXY STATEMENT SUMMARY
Our compensation program for executive officers is designed to emphasize performance-based compensation in alignment with our business strategy.
New CEO Employment Agreement
In connection with Mr. Tobin’s appointment as President and CEO and to ensure a smooth executive transition, our independent directors, after considering market data, advice from our independent compensation consultant, and other factors, including Mr. Tobin’s position as a sitting CEO, approved Dover’s entry into a three-year employment agreement with Mr. Tobin. In order to offset forfeited compensation and pension benefit from his prior company, Mr. Tobin received aone-time award when he joined Dover, subject to termination and claw-back provisions, comprised of restricted stock units (“RSUs”) and internal Total Shareholder Return (“iTSR”) performance share units and a make-whole cash payment.
We sought shareholder feedback on Mr. Tobin’s compensation arrangements after his appointment, including hisone-time award. Our shareholders indicated they were supportive of the structure because it ensured a smooth transition and the Board’s ability to hire a highly qualified candidate.
2018 Executive Compensation
The following table summarizes pay mix for our CEO and other NEOs, which is highly performance based.
TARGET CEO PAY MIX TARGET OTHER NEO PAY MIX
Executive Compensation Program Highlights
Pay-for-performance philosophy — a substantial majority of NEO pay is performance based and tied to Dover’s stock price performance
Significant portion of long-term compensation is performance based, with long-term incentives vesting over three years subject to rigorous three-year performance period
Strong share ownership guidelines for NEOs
Equity awards with anti-hedging and anti-pledging provisions
DOVER CORPORATION –2019 Proxy Statement 7
PROXY STATEMENT SUMMARY
Our Governance and Nominating Committee maintains an active and engaged Board through a robust refreshment process, which focuses on ensuring our Board has a diverse skill set that benefits from both the industry- and company-specific knowledge of our longer-tenured directors, as well as the fresh perspectives brought by our newer directors.
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*A = Audit Committee; C = Compensation Committee; G = Governance and Nominating Committee; F = Finance Committee
DOVER CORPORATION –2019 Proxy Statement 8
PROXY STATEMENT SUMMARY
Upon the retirement of Messrs. Francis and Lochridge, the Board will have the following composition:
Our Board is committed to sound governance practices designed to promote the long-term interests of shareholders and strengthen Board and management accountability. Highlights include:
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DOVER CORPORATION –2019 Proxy Statement 9
Proposal 1 — Election of Directors
Criteria for Director Nominees
The Board, in part through its delegation to the Governance and Nominating Committee, seeks to recommend qualified individuals to become members of the Board. The Board selects individuals as director nominees who, in the opinion of the Board, demonstrate the highest personal and professional integrity as well as exceptional ability and judgment, who can serve as a sounding board for our CEO on planning and policy, and who will be most effective, in connection with the other nominees to the Board, in collectively serving the long-term interests of all our shareholders.
Key areas of expertise for director nominees, which are reflected in our current director nominees, include:
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In considering diversity in selecting director nominees, the Governance and Nominating Committee gives weight to the extent to which candidates would increase the effectiveness of the Board by broadening the mix of experience, knowledge, backgrounds, skills, ages and tenures represented among its members.
The Governance and Nominating Committee also considers our current Board composition and the projected retirement date of current directors, as well as such other factors it may deem to be in the best interests of Dover and its shareholders, including a director nominee’s leadership and operating experience (particularly as a CEO), financial and investment expertise and strategic planning experience.
The Board prefers nominees to be independent, but believes it is desirable to have our CEO on the Board as a representative of current management. Given the global reach and broad array of the types of businesses operated by Dover, the Governance and Nominating Committee highly values director nominees with multi-industry and multi-geographic experience.
Whenever the Governance and Nominating Committee concludes that a new nominee to our Board is required or advisable, it will consider recommendations from directors, management, shareholders and, if it deems appropriate,
DOVER CORPORATION –20192022 Proxy Statement 1012
PROPOSAL 1 — ELECTION OF DIRECTORS
consultants retained2022 Director Nominees
There are ten nominees for that purpose. In such circumstances, itelection to our Board at this Annual Meeting, each to serve until the next annual meeting of shareholders or his or her earlier removal, resignation or retirement. All of the nominees currently serve on our Board and are being proposed for re-election by our Board.
If any nominee for election becomes unavailable or unwilling to serve as a director before the Annual Meeting, an event which we do not anticipate, the persons named as proxies will evaluate individuals recommendedvote for a substitute nominee or nominees as may be designated by shareholdersour Board, or the Board may reduce the number of directors. Directors will be elected by a majority of the votes cast in connection with their election.
| Deborah L. DeHaas | |||
Independent Director Nominee Director since: 2021 Age: 62 Committees: Audit | ||||
Skills and Qualifications: |
Significant leadership, financial and corporate governance expertise garnered from her nearly 40 years of experience at major audit, assurance and consulting firms
Certified public accountant (“CPA”) and has extensive experience with financial, accounting, internal controls, and enterprise risk management
Has deep expertise on governance, both as a topic and discipline, developed during her career at Deloitte
As a member of the Value Reporting Foundation Board (formerly the SASB Foundation Board), contributes valuable and well-informed insights on a variety of ESG matters
Brings relevant public company board service, serving on the board of CF Industries Holdings, Inc.
Brings experience and perspective on matters regarding human capital and culture, including diversity and inclusion
Holds a bachelor’s degree in management science and accounting from Duke University
Included in the same mannerNational Association of Corporate Directors (“NACD”) Directorship 100 from 2015-2020, recognizing influential leaders in corporate governance and is also an NACD Board Leadership Fellow
Business Experience: |
CEO of the Corporate Leadership Center, a non-profit leadership development forum
Former Vice Chairman and National Managing Partner of the Center for Board Effectiveness at Deloitte
Former member of the U.S. Executive Committee
Former Vice Chairman and Chief Inclusion Officer
Former member of the U.S. Board of Directors
Former Vice Chairman and Central Region Managing Partner
Former Vice Chairman and Midwest Regional Managing Partner
Former Regional Managing Partner, Strategic Clients
Former positions of increasing responsibility at Arthur Andersen, an audit, financial advisory, tax and consulting firm, most recently as nominees recommendedManaging Partner & Business Advisory Assurance, Central Region
Other Board Experience: |
CF Industries Holdings, Inc.
DOVER CORPORATION – 2022 Proxy Statement 13
PROPOSAL 1 — ELECTION OF DIRECTORS
| H. John Gilbertson, Jr. | |||
Independent Director Nominee Director since: 2018 Age: 65 Committees: Audit, Finance | ||||
Skills and Qualifications: |
Extensive experience in corporate finance, capital markets, and mergers and acquisitions
Served as a strategic and financial advisor to his clients, forming deep relationships with companies in a range of industries
Has nearly four decades of experience in the professional and financial services industry
Deep expertise in financial management, coupled with his analytical and collaborative mindset, allows him to make invaluable contributions to our Board
Strong background in senior leadership development, succession planning, and organizational culture development
Brings to the Board considerable expertise in financial risk oversight and capital allocation
Bachelor’s degree in political economy from Dartmouth College and an MBA from Harvard University
Business Experience: |
Retired Managing Director at Goldman Sachs
Served as Advisory Director and Partner-in-Charge, Midwest Region Investment Banking Services
Served as Managing Director at Travelers Group Inc.
Former Associate, Mergers and Acquisitions at Morgan Stanley
Former Consultant, Corporate Strategy at Bain & Company
Former Assistant Treasurer, Corporate Banking at Chase Manhattan Bank
Former News Reporter at The Providence Journal Company
Other Board Experience: |
Director and Chair of Audit Committee of Meijer, Inc. (“Meijer”)
Director of AAR Corp.
DOVER CORPORATION – 2022 Proxy Statement 14
PROPOSAL 1 — ELECTION OF DIRECTORS
| Kristiane C. Graham | |||
Independent Director Nominee Director since: 1999 Age: 64 Committees: Compensation, Governance and Nominating | ||||
Skills and Qualifications: |
Experience as a private investor with substantial holdings of Dover stock and her shared interests in Dover, including interests through charitable organizations of which she is a director, makes her a good surrogate for our individual and retail investors
Experience with a commercial bank, primarily as a loan officer; founded and operated an advisory company and a publication regarding international thoroughbred racing and now co-manages her family’s investments
Actively works with and has served on the boards of various organizations to support the objectives of local communities, affordable housing, education, and health
Currently serves on the Board of Directors for the Walter N. Ridley Scholarship Fund at the University of Virginia
Serves as an Emeritus Trustee of the College Foundation of the University of Virginia and has previously served on the Advisory Board of the University of Virginia School of Nursing
Brings valuable insights on the development of our policies and strategies relating to talent, leadership, and culture, with a focus on diversity and inclusion
Devoted substantial time to monitoring the development of Dover operating company leaders, enabling her to provide the Board valuable insights regarding management succession
As a member of one of the founding families of Dover, Ms. Graham also brings to the Board a sense of Dover’s historical values, culture and strategic vision which the Board believes is beneficial as it considers various strategic planning alternatives for shaping Dover’s future
Business Experience: |
Private Investor
DOVER CORPORATION – 2022 Proxy Statement 15
PROPOSAL 1 — ELECTION OF DIRECTORS
| Michael F. Johnston | |||
Independent Board Chair; Independent Director Nominee Director since: 2013 Age: 74 Committees: Compensation, Governance and Nominating | ||||
Skills and Qualifications: |
Brings industry insight, financial expertise and leadership experience garnered from his 17 years on the boards of global companies
Served as CEO of an $18 billion global manufacturer
Mr. Johnston also brings valuable corporate governance perspectives from his prior board service, including as a lead Director and Chair of other sources.major public companies
Brings deep operations experience has helped him gain knowledge and a deep understanding in manufacturing, design, innovation, engineering, accounting and finance and capital structure
Brings nearly two decades of experience in building businesses in emerging economies
Bachelor’s degree in industrial management from the University of Massachusetts and an MBA from Michigan State University
Business Experience: |
Former CEO and President of Visteon Corporation (“Visteon”)
Former Chief Operating Officer of Visteon
Former President of North America/Asia Pacific, Automotive Systems Group, of Johnson Controls, Inc. (“Johnson Controls”)
Former President of Americas Automotive Group of Johnson Controls
Other Board Experience: |
Director of Armstrong Flooring, Inc.
Former Chairman and Director of Visteon
Former Director of Armstrong World Industries, Flowserve Corporation, and Whirlpool Corporation
DOVER CORPORATION – 2022 Proxy Statement 16
PROPOSAL 1 — ELECTION OF DIRECTORS
| Eric A. Spiegel | |||
Independent Director Nominee Director since: 2017 Age: 64 Committees: Audit, Finance (Chair) |
Skills and Qualifications: |
Experienced business leader with diversified, global experience who brings deep and valuable expertise in strategy development, corporate restructuring, portfolio management and M&A to our Board
40+ years of experience working with large, global companies in the energy and industrial markets, mostly recently as President & CEO of Siemens USA
At Siemens, he led strategic reviews across a portfolio of ~45 businesses in the company’s largest market with over $22 billion in revenue, 50,000 employees and over 60 manufacturing facilities
Led the acquisition, divestiture, joint venture and carve-out of over 30 business units and segments
Executed Siemens’ “Vision 2020” initiative to optimize growth and margins in the U.S., across all sectors
Prior to Siemens, Mr. Spiegel was a global consultant at Booz Allen Hamilton focused on complex organizations in the energy, power, chemical, water, industrial and automotive fields
At Booz, he worked with major energy clients globally on projects around corporate strategy, M&A, major capital projects, cost restructuring, margin enhancement and supply chain re-design and was also closely involved with the government sector
An expert on the global energy industry, Mr. Spiegel co-authored the book Energy Shift: Game-changing Options for Fueling the Future
Holds a bachelor’s degree in economics from Harvard University and an MBA from the Tuck School of Business at Dartmouth College
Business Experience: |
Special Advisor at Brighton Park Capital, a private equity firm, where he supports the firm’s sector investment teams and portfolio companies by providing strategic counsel on industry trends and growth strategies
Former President and CEO of Siemens USA
Former Managing Partner, Global Energy, Chemicals, and Power, and Managing Partner, Washington, D.C. office, and other roles at Booz & Company, Inc. (now known as Strategy&) and Booz Allen Hamilton, Inc., global consulting firms
Former Associate, Energy and Industrials Practice, at Temple, Barker & Sloane, Inc. (now known as Oliver Wyman)
Former Marketing and Strategy Manager at Brown Boveri & Cie (now known as ABB), a Swiss group of electrical engineering companies
In connection with his position at Brighton Park Capital, Mr. Spiegel serves as Chair of Relatient, Inc.
Other Board Experience: |
Director and Audit Committee Chair of Liberty Mutual Holding Company, Inc.
Director and Audit Committee Chair of Project Energy Reimagined Acquisition Corp.
DOVER CORPORATION – 2022 Proxy Statement 17
PROPOSAL 1 — ELECTION OF DIRECTORS
| Richard J. Tobin | |||
Chief Executive Officer Director since: 2016 Age: 58 Committees: None | ||||
Skills and Qualifications: |
Mr. Tobin is Dover’s current CEO. The Board believes it is desirable to have one active management representative on the Board to facilitate its access to timely and relevant information and its oversight of management’s long-term strategy, planning, and performance
Has a broad range of industry and functional experiences acquired through regional and global leadership positions
Former CEO of CNH Industrial, a complex international industrial company, where he led efforts to increase efficiencies, innovate through new technologies, expand geographically, and maximize the company’s portfolio of businesses
Gained extensive experience in international finance, operations, management, and information technology in his prior roles
Developed deep expertise with global capital markets through his international finance leadership roles
Prior to beginning his business career, Mr. Tobin was an officer in the United States Army
Member of the Board of Trustees of the John G. Shedd Aquarium in Chicago
Formerly served on the U.S. Chamber of Commerce Board of Directors, and is a former member of the Business Roundtable
Holds a bachelor of arts from Norwich University and an MBA from Drexel University
Business Experience: |
President and CEO of Dover
Former CEO of CNH Industrial NV (“CNH Industrial”)
Former Group Chief Operating Officer of Fiat Industrial S.p.A
Former President and CEO of CNH Global NV
Former CFO of CNH Global NV
Former Chief Finance Officer & Head of Information Technology of SGS Group
Former Chief Operating Officer for North America of SGS Group
Other Board Experience: |
Director of KeyCorp.
Former director of CNH Industrial
DOVER CORPORATION – 2022 Proxy Statement 18
PROPOSAL 1 — ELECTION OF DIRECTORS
| Stephen M. Todd | |||
Independent Director Nominee Director since: 2010 Age: 73 Committees: Audit (Chair) | ||||
Skills and Qualifications: |
Extensive accounting and financial experience in both domestic and international business developed during a four decade career at Ernst & Young where he specialized in assurance and audit
Brings unique insights into accounting and financial issues relevant to multinational companies like Dover
Brings the perspective of an outside auditor to the Audit Committee
Brings leadership and financial strategy experience as developer and director of Ernst & Young’s Global Capital Markets Centers, which provides accounting, regulatory, internal control and financial reporting services to multinational companies in connection with cross-border debt and equity securities transactions and acquisitions
Business Experience: |
Former Global Vice of Assurance Professional Practice of Ernst & Young Global Limited, London, UK; and prior thereto, various positions with Ernst & Young
Other Board Experience: |
Director and Audit Committee member of ChampionX Corporation (formerly known as Apergy Corporation)
Former member of the Board of Trustees of PNC Funds
DOVER CORPORATION – 2022 Proxy Statement 19
PROPOSAL 1 — ELECTION OF DIRECTORS
| Stephen K. Wagner | |||
Independent Director Nominee Director since: 2010 Age: 74 Committees: Audit, Governance and Nominating (Chair) | ||||
Skills and Qualifications: |
Mr. Wagner’s over 30 years of experience in accounting make him a valuable resource for the Board and the Audit Committee
His work with Sarbanes-Oxley and other corporate governance regulations, including his years as Managing Partner at Deloitte & Touche’s Center for Corporate Governance, makes him well suited to advise the Board on financial, auditing and finance-related corporate governance matters as well as risk management
Expert in risk oversight and co-authored a book on risk management entitled Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise
Brings to the Board an outside auditor’s perspective on matters involving audit committee procedures, internal control and accounting and financial reporting matters
Business Experience: |
Former Senior Advisor, Center for Corporate Governance, of Deloitte & Touche LLP (“Deloitte”)
Former Managing Partner, Center for Corporate Governance of Deloitte
Former Deputy Managing Partner, Innovation, Audit and Enterprise Risk, United States of Deloitte
Former Co-Leader, Sarbanes-Oxley Services, of Deloitte
Other Board Experience: |
Director and Audit Committee member of ChampionX Corporation (formerly known as Apergy Corporation)
DOVER CORPORATION – 2022 Proxy Statement 20
PROPOSAL 1 — ELECTION OF DIRECTORS
| Keith E. Wandell | |||
Independent Director Nominee Director since: 2015 Age: 72 Committees: Compensation (Chair), Finance | ||||
Skills and Qualifications: |
Mr. Wandell brings to the Board the valuable perspective of a strategic, experienced leader with a strong record focused on growth, profitability, international expansion and innovation.
Has over 30 years of experience in diversified manufacturing businesses, most recently as the former Chairman and CEO of Harley-Davidson, Inc. (“Harley-Davidson”) where he led transformation efforts across the company’s product development, manufacturing and retail functions, focused on international expansion and implemented a restructuring plan
Prior to joining Harley-Davidson, Mr. Wandell served as President and Chief Operating Officer of Johnson Controls, Inc. (“Johnson Controls”) and helped manage the company’s entry into the Chinese car-battery market as well as its subsequent joint venture with China’s largest battery manufacturer
Gained valuable insights into the effective development of executive leadership capabilities and strong corporate cultures through his experience as a senior leader at various companies
Served on the boards of four other public companies, including the two on which he currently serves
Holds a bachelor’s degree in business administration from Ohio University and an MBA from the University of Dayton
Business Experience: |
Former President and CEO of Harley-Davidson
Former President and Chief Operating Officer of Johnson Controls
Former Executive Vice President of Johnson Controls
Former Corporate Vice President of Johnson Controls
Former President of the Automotive Experience business of Johnson Controls
Former President of the Power Solutions business of Johnson Controls
Other Board Experience: |
Director of Dana Incorporated. Former Chairman of Harley-Davidson
Former Director of Constellation Brands, Inc. and Clarcor, Inc.
DOVER CORPORATION – 2022 Proxy Statement 21
PROPOSAL 1 — ELECTION OF DIRECTORS
| Mary A. Winston | |||
Independent Director Nominee Director since: 2005 Age: 60 Committees: Compensation, Finance | ||||
Skills and Qualifications: |
Ms. Winston brings to the Board valuable experience and expertise based on her years of broad financial management and broad executive leadership experience.
Started her career as a CPA with Arthur Andersen & Co, and has extensive experience with financial, accounting and internal control matters for large public companies.
Served as CFO of three large companies: Family Dollar Stores, Inc., Giant Eagle, Inc. and Scholastic, Inc., as well as prior global finance leadership roles (prior to 2004) at Visteon Corporation and Pfizer, Inc.
Developed deep expertise in capital markets, M&A, capital structure matters, capital allocation, financial risk management, real estate financing transactions, dividend and stock repurchase programs, and investor relations
Ms. Winston’s background and experience make her a valuable contributor to the Board on matters involving risk oversight and capital allocation, as well as executive compensation and general corporate governance matters
Holds a bachelor’s degree in accounting from the University of Wisconsin and an MBA from Northwestern University’s Kellogg School of Management
Designated as a Board Leadership Fellow by the NACD and serves on the national board of the NACD
Business Experience: |
President of WinsCo Enterprises Inc
Former Interim CEO, Bed Bath & Beyond Inc.
Former Executive Vice President and CFO of Family Dollar Stores, Inc.
Former Senior Vice President and CFO of Giant Eagle, Inc.
Former President of WinsCo Financial LLC
Former Executive Vice President and CFO of Scholastic Corporation
Other Board Experience: |
Director of Bed Bath & Beyond, Inc., Chipotle Mexican Grill, and Acuity Brands, Inc.
Former Director of Domtar Corporation, SUPERVALU INC., and Plexus Corporation
THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH
OF THE NOMINEES NAMED ABOVE.
DOVER CORPORATION – 2022 Proxy Statement 22
PROPOSAL 1 — ELECTION OF DIRECTORS
Board Oversight and Governance Practices
Our Board is responsible for, and committed to, overseeing our long-term strategic development as well as managing the principal and most significant risks that we face. In carrying out this duty, our Board advises senior management to help drive long-term value creation for our shareholders. The Board delegates specific areas of responsibility to relevant Board committees, as detailed below under the heading “Overview of Committee Responsibilities”, who report on their deliberations to the Board. The following summarizes our Board’s key areas of oversight responsibility.
Board Oversight
KEY AREAS OF BOARD OVERSIGHT | ||
Long-Term Business Strategy | • One of the primary responsibilities of our Board is the oversight of management’s long-term strategy and planning. Accordingly, our Board maintains a deep level of engagement with management in setting and overseeing Dover’s long-term business strategy. | |
Capital Allocation | • Our Board is focused on the efficient allocation of capital to drive growth and provide returns to our shareholders. Our capital allocation priorities are organic investments, strategic acquisitions, and the return of capital to our shareholders. • We consistently return cash to shareholders by paying dividends, which have increased annually over each of the last 66 years. • We also undertake opportunistic share repurchases as part of our capital allocation strategy, completing $21.6 million of share repurchases in 2021 and $106.3 million in 2020. • We made $171.5 million in capital expenditures in 2021, representing 2.2% of revenue, and $165.7 million in capital expenditures in 2020, representing 2.5% of revenue, in line with our priority of organic reinvestment to grow and strengthen our existing businesses. • We employ a prudent financial policy to support our capital allocation strategy, which includes maintaining an investment grade credit rating. | |
Portfolio Management | • Businesses in our portfolio are continually evaluated for strategic fit. • We seek to deploy capital in acquisitions in attractive growth areas across our five segments. We focus primarily on bolt-on acquisitions, applying strict selection criteria of market attractiveness (including growth, market landscape, and performance-based competition), business fit (including sustained leading position, revenue visibility, and favorable customer value-add versus switching cost or risk) and financial return profile (accretive growth and margins and double-digit return on invested capital). • We have sold or divested some of our businesses based on changes in specific market outlook, structural changes in financial performance, value-creation potential, or for other strategic considerations, which included an effort to reduce our exposure to cyclical markets or focus on our higher margin growth spaces. • In recognition of recent portfolio changes, we recently changed the name of the Fueling Solutions segment to “Clean Energy & Fueling,” and the Refrigeration & Food Equipment segment to “Climate & Sustainability Technologies” to better reflect the markets and customers served by the businesses within these segments. |
DOVER CORPORATION – 2022 Proxy Statement 23
PROPOSAL 1 — ELECTION OF DIRECTORS
KEY AREAS OF BOARD OVERSIGHT | ||
Risk | • Our Board has established a comprehensive enterprise risk management process to identify and manage risks, and periodically reviews the processes established by management to identify and manage risks and communicates with management about these processes. • We have established a risk assessment team consisting of senior executives, which annually, with the assistance of a consultant, oversees a risk assessment made at the corporate center, segment and operating company levels and, with that information in mind, performs an assessment of the overall risks our company may face and reports to the Board on that assessment. Each quarter, this team reassesses the risks, the severity of these risks, and the status of efforts to mitigate them. | |
ESG | • The full Board has oversight of ESG matters and is regularly briefed on strategic planning, risks, and opportunities related to ESG by senior management, including our CEO. • Our Compensation Committee has integrated ESG oversight responsibility into our CEO’s individual strategic objectives within the AIP. | |
Culture & Human Capital Management | • Our entrepreneurial culture depends upon an inclusive approach that values employees’ diversity and contributions. • We foster an operating culture with high ethical standards that values accountability, rigor, trust, inclusion, respect, and open communication and is designed to encourage individual growth and operational effectiveness. We continue to make significant investments in talent development, including in the areas of digital applications and operational management, and recognize that the growth and development of our employees is essential for our continued success. • As part of our commitment to strong corporate governance practices, we maintain an active and robust ethics program. Our Code of Business Conduct & Ethics (“Code of Conduct”) applies to all employees and directors of Dover and its subsidiaries. We enforce our Code of Conduct fairly and consistently, regardless of one’s position in Dover, and will not tolerate retaliation against those who report suspected misconduct in good faith. | |
Succession Planning | • Another of the Board’s primary responsibilities is overseeing a sound Board and management succession process. The Board has developed a comprehensive plan to address management succession — both over the long term and for emergency purposes. The framework for the long-term plan includes thoughtful, deliberate monitoring of management beyond our top executives to ensure Dover continues to build a deep internal bench of talent. • Our Board is also focused on its own succession plan, which drives not only our director selection efforts, but also how we approach Board and committee leadership structure and membership, with a focus on critical board skills, diversity, and independence. | |
Cybersecurity | • The full Board is briefed on enterprise-wide cybersecurity risk management and the overall cybersecurity risk environment, and oversees major tasks related to cybersecurity risk management, periodically reviews our response capabilities, and meets with the Chief Information Security Officer on at least an annual basis. • Dover employs the National Institute of Standards & Technology Framework for Improving Critical Infrastructure Cybersecurity (The NIST Framework). This voluntary guidance developed with much private sector input provides a framework and a toolkit for organizations to manage cybersecurity risk. |
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PROPOSAL 1 — ELECTION OF DIRECTORS
Board Committees
Our Board has four standing committees — the Audit Committee, the Compensation Committee, the Governance and Nominating Committee, and the Finance Committee. The table below sets forth a summary of our committee structure and membership information.
DIRECTOR | Audit Committee | Compensation Committee | Governance and Nominating | Finance Committee | ||||
DEBORAH L. DEHAAS | ✓ | |||||||
H. JOHN GILBERTSON, JR. | ✓ | ✓ | ||||||
KRISTIANE C. GRAHAM | ✓ | ✓ | ||||||
MICHAEL F. JOHNSTON | ✓ | ✓ | ||||||
ERIC A. SPIEGEL | ✓ | ✓ (Chair) | ||||||
RICHARD J. TOBIN | ||||||||
STEPHEN M. TODD | ✓ (Chair) | |||||||
STEPHEN K. WAGNER | ✓ | ✓ (Chair) | ||||||
KEITH E. WANDELL | ✓ (Chair) | ✓ | ||||||
MARY A. WINSTON | ✓ | ✓ | ||||||
MEETINGS HELD IN 2021 | 8 | 5 | 4 | 9 |
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PROPOSAL 1 — ELECTION OF DIRECTORS
Overview of Committee Responsibilities
Audit Committee | ||
Stephen M. Todd (Chair) Deborah L. DeHaas H. John Gilbertson, Jr. Eric A. Spiegel Stephen K. Wagner | Key Responsibilities • Selecting and engaging our independent registered public accounting firm (“independent auditors”) • Overseeing the work of our independent auditors and our internal audit function • Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the committee • Reviewing with management and the independent auditors the audit plan and results of the auditing engagement • Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting The Audit Committee holds regular quarterly meetings at which it meets separately with each of our independent registered public accounting firm, PwC, our internal audit function, financial management and our general counsel to assess certain matters including the status of the independent audit process, management’s assessment of the effectiveness of internal control over financial reporting and the operation and effectiveness of our compliance program. In addition, the Audit Committee, as a whole, reviews and meets to discuss the contents of each Form 10-Q and Form 10-K (including the financial statements) prior to its filing with the SEC. Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the SEC rules. The Audit Committee’s responsibilities and authority are described in greater detail in its written charter. |
Compensation Committee | ||
Keith E. Wandell (Chair) Kristiane C. Graham Michael F. Johnston Mary A. Winston | Key Responsibilities The Compensation Committee, together with our independent directors, approves compensation for the CEO of Dover. The functions of the Compensation Committee also include: • Approving compensation for executive officers who report directly to the CEO (together with the CEO, “senior executive officers”) • Granting awards and approving payouts under our 2012 Equity and Cash Incentive Plan (the “2012 LTIP”), our 2021 Omnibus Incentive Plan (the “2021 LTIP”). and our AIP • Approving changes to our executive compensation plans • Reviewing and recommending compensation for the Board • Overseeing succession planning and management development programs The Compensation Committee’s responsibilities and authority are described in greater detail in its written charter. |
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PROPOSAL 1 — ELECTION OF DIRECTORS
Governance and Nominating Committee | ||
Stephen K. Wagner (Chair) Kristiane C. Graham Michael F. Johnston | Key Responsibilities • Developing and recommending corporate governance principles to our Board • Annually reviewing the requisite skills and characteristics of board members as well as the size, composition, functioning and needs of our Board as a whole • Considering and recommending to the Board nominees for election to, or for filling any vacancy on, our Board in accordance with our by-laws, our governance guidelines, and the committee’s charter • Identifying and recommending to our Board any changes it believes desirable in the size and composition of our Board • Recommending to our Board any changes it believes desirable in structure and membership of our Board’s committees • Providing oversight of Dover’s practices on political contributions and lobbying expenses and reviewing annually Dover’s political contributions and lobbying expenses The Governance and Nominating Committee’s responsibilities and authority are described in greater detail in its written charter. |
Finance Committee | ||
Eric A. Spiegel (Chair) H. John Gilbertson, Jr. Keith E. Wandell Mary A. Winston | Key Responsibilities • Reviewing and recommending for approval by the Board proposed changes to dividend policies, stock splits, and repurchase programs • Reviewing our capital structure, liquidity, and financing plans • Reviewing and approving the registration and issuance of debt or equity securities • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, capital expenditures • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, M&A transactions • Oversight of treasury, insurance, and tax planning matters The Finance Committee’s responsibilities and authority are described in greater detail in its written charter. |
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PROPOSAL 1 — ELECTION OF DIRECTORS
Corporate Governance
Our Board is committed to sound governance practices and regularly reviews and refines our profile to reflect evolving best practices and matters raised by our shareholders. The following summarizes key aspects of our governance framework.
GOVERNANCE HIGHLIGHTS | ||
Independent Board of Directors | • All directors are independent, other than our CEO, and our Board has leadership that is independent from management, by way of an independent Chair. | |
Commitment to Diversity | • In 2020, our Board adopted a policy reflected in our Corporate Governance Guidelines requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. | |
Special Shareholder Meetings | • In 2020, we amended our by-laws to reduce the ownership threshold required to call a special meeting of shareholders to 15% or more of the voting power of our outstanding stock from 25%. | |
Elimination of | • All of the supermajority voting provisions in our charter were eliminated in 2019. | |
Board Committee Refreshment | • Our Board periodically reviews committee composition and chair positions, seeking the appropriate blend of continuity and fresh perspectives on committees. | |
Annual Majority Vote Director Elections & Mandatory Resignation Policy | • All of our directors are elected annually by our shareholders. • Our directors must receive a majority of the votes cast in uncontested elections to be elected. • We have a director resignation policy that requires a director to tender an irrevocable resignation letter to the Board prior to being nominated, contingent on the director not receiving a majority of the votes cast in an uncontested election and the Board’s acceptance of the resignation. The Governance and Nominating Committee will recommend to the full Board whether to accept the resignation or whether to take other action. | |
Proxy Access | • Our by-laws permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws. |
Board Leadership Structure
We believe that having an independent leader of the Board is important to the Board’s oversight role and decision-making involving corporate strategy, performance, succession, and other critical matters. Under our current Board leadership structure, our Board has leadership that is independent from management by way of an independent Chair. Our CEO is also a member of the Board as a management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. In our view, this board leadership structure gives us an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.
Board, Committee and Individual Director Evaluations
Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluates one-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. New directors undergo the evaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a more in-depth, comprehensive evaluation for each of our directors.
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PROPOSAL 1 — ELECTION OF DIRECTORS
Directors’ Meetings and Attendance
During 2021, the Board met seven times. No director attended less than 75% of the board and standing committee meetings held while he or she was a member of the Board and relevant standing committee. Average board attendance was over 97% in 2021. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives or non-independent directors present. The Chair of the Board presides at these sessions. We expect our directors to attend the Annual Meeting. All directors attended the 2021 Annual Meeting.
Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls, or in-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with shareholders.
Management Meetings and Site Visits
We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makes on-site visits to our businesses to tour the manufacturing facilities and meet face-to-face with company management and employees. These visits serve as an important tool in the Board’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture. In 2021, these types of opportunities for engagement were largely conducted virtually rather than in-person.
Director Orientation and Education
All new directors participate in our director orientation program. New directors meet with senior corporate leaders to review and discuss our businesses, operations, strategy, end markets, governance, internal controls, and culture. We believe that our on-boarding approach, coupled with participation in regular Board and committee meetings, as well as additional exposure to our business through participation in management meetings and site visits, whether virtually or in-person, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.
Our Board also encourages directors to participate annually in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.
Director Independence
Our Board has determined that each of the current members of the Board, except for Richard J. Tobin, who is our CEO, has no material relationship with Dover and satisfies all the criteria for being “independent” members of our Board. This includes the criteria established by the U.S. Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”) listing standards, as well as our standards for classification as an independent director which are available on our website at www.dovercorporation.com. Our Board makes an annual determination of the independence of each nominee for director prior to his or her nomination for re-election. No director may be deemed independent unless the Board determines that he or she has no material relationship with Dover, directly or as an officer, shareholder or partner of an organization that has a material relationship with Dover.
Majority Standard for Election of Directors and Mandatory Resignation Policy
Under our by-laws and corporate governance guidelines, the voting standard in director elections is a majority of the votes cast. Under this majority of the votes cast standard, a director must receive more votes in favor of his or her election than votes against his or her election. Abstentions and broker non-votes do not count as votes cast with respect to a director’s election. In contested director elections (where there are more nominees than available seats on the board), the plurality standard will apply. Under the plurality standard, the nominees who receive the most “for” votes are elected to the Board until all seats are filled.
For an incumbent director to be nominated for re-election, he or she must submit an irrevocable resignation letter. The resignation will be contingent on the nominee not receiving a majority of the votes cast in an uncontested election and on the Board’s acceptance of the resignation. If an incumbent director fails to receive a majority of the votes cast in an uncontested
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PROPOSAL 1 — ELECTION OF DIRECTORS
election, the Governance and Nominating Committee will make a recommendation to our Board concerning whether to accept or reject the resignation or whether other action should be taken. Our Board will act on the resignation within 90 days following certification of the election results, taking into account the committee’s recommendation. The Board will publicly announce its decision and, if the resignation is rejected, the rationale for its decision.
Governance Guidelines and Code of Ethics
Our Board long ago adopted written corporate governance guidelines that set forth the responsibilities of our Board and the qualifications and independence of its members and the members of its standing committees. The Board reviews these guidelines at least annually, in light of evolving best practices, shareholder feedback and the evolution of our business. In 2020, the Board amended the guidelines to require that initial lists of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. In addition, our Board has a long-standing Code of Conduct setting forth standards applicable to all of our companies and their employees, a code of ethics for our CEO and senior financial officers, and charters for each of its standing committees. All of these documents (referred to collectively as “governance materials”) are available on our website at www.dovercorporation.com.
Procedures for Approval of Related Person Transactions
We generally do not engage in transactions in which our senior executive officers or directors, any of their immediate family members or any of our 5% shareholders have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and an amount that exceeds $120,000, it would be subject to review and approval by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are available with the governance materials on our website.
Under the procedures, management determines whether a proposed transaction requires review under the policy and, if so, presents the transaction to the Governance and Nominating Committee. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves or rejects the transaction. If the proposed transaction is immaterial or it is impractical or undesirable to defer the proposed transaction until the next committee meeting, the Chair of the committee decides whether to (i) approve the transaction and report the transaction at the next meeting or (ii) call a special meeting of the committee to review and approve the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve or reject the transaction. No director may participate in the review of any transaction in which he or she is a related person.
Communication with Directors
The Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (“accounting matters”) and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting matters. Such complaints or concerns may be submitted to Dover, care of our Corporate Secretary or through the communications coordinator, an external service provider, by mail, fax, telephone, or via the internet as published on our website. The communications coordinator forwards such communications to Dover without disclosing the identity of the sender if anonymity is requested.
Shareholders and other interested persons may also communicate with our Board and the non-management directors in any of these same manners. Such communications are forwarded to the Chair of the Governance and Nominating Committee.
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PROPOSAL 1 — ELECTION OF DIRECTORS
Shareholder Engagement and History of Board Responsiveness
Shareholder Nominations for Director
Shareholders who wish to recommend an individual for nomination should send that person’s name and supporting information to the Governance and Nominating Committee, in care of the Corporate Secretary at our principal executive offices, 3005 Highland Parkway, Downers Grove, Illinois, 60515, or through our communications coordinator. Shareholders who wish to directly nominate an individual for election as a director, without going through the Governance and Nominating Committee, must comply with the procedures in ourby-laws. Please see “General Information About the Annual Meeting” for nomination deadlines.
Proxy Access Shareholder Right
Following extensive engagement with our shareholders, our Board determined to adopt proxy access in February 2016, permitting a shareholder or group of up to 20 shareholders holding 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in ourby-laws.
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PROPOSAL 1 — ELECTION OF DIRECTORS
There are nineten nominees for election to our Board at this Annual Meeting, each to serve until the next annual meeting of shareholders or his or her earlier removal, resignation or retirement. All of the nominees currently serve on our Board and are being proposed forre-election by our Board.
Current directors Peter T. Francis and Richard K. Lochridge are not standing forre-election and will retire from the Board effective as of the Annual Meeting.
If any nominee for election becomes unavailable or unwilling for good cause to serve as a director before the Annual Meeting, an event which we do not anticipate, the persons named as proxies will vote for a substitute nominee or nominees as may be designated by our Board, or the Board may reduce the number of directors. Directors will be elected by a majority of the votes cast in connection with their election.
| Deborah L. DeHaas | |||
Independent Director Nominee Director since: 2021 Age: 62 Committees: Audit | ||||
Skills and Qualifications: |
Significant leadership, financial and corporate governance expertise garnered from her nearly 40 years of experience at major audit, assurance and consulting firms
Certified public accountant (“CPA”) and has extensive experience with financial, accounting, internal controls, and enterprise risk management
Has deep expertise on governance, both as a topic and discipline, developed during her career at Deloitte
As a member of the Value Reporting Foundation Board (formerly the SASB Foundation Board), contributes valuable and well-informed insights on a variety of ESG matters
Brings relevant public company board service, serving on the board of CF Industries Holdings, Inc.
Brings experience and perspective on matters regarding human capital and culture, including diversity and inclusion
Holds a bachelor’s degree in management science and accounting from Duke University
Included in the National Association of Corporate Directors (“NACD”) Directorship 100 from 2015-2020, recognizing influential leaders in corporate governance and is also an NACD Board Leadership Fellow
Business Experience: |
CEO of the Corporate Leadership Center, a non-profit leadership development forum
Former Vice Chairman and National Managing Partner of the Center for Board Effectiveness at Deloitte
Former member of the U.S. Executive Committee
Former Vice Chairman and Chief Inclusion Officer
Former member of the U.S. Board of Directors
Former Vice Chairman and Central Region Managing Partner
Former Vice Chairman and Midwest Regional Managing Partner
Former Regional Managing Partner, Strategic Clients
Former positions of increasing responsibility at Arthur Andersen, an audit, financial advisory, tax and consulting firm, most recently as Managing Partner & Business Advisory Assurance, Central Region
Other Board Experience: |
CF Industries Holdings, Inc.
DOVER CORPORATION – 2022 Proxy Statement 13
PROPOSAL 1 — ELECTION OF DIRECTORS
| H. John Gilbertson, Jr.
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Independent Director Nominee Director since: 2018 Age:
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Business Experience: Retired Managing Director (1997 to 2012) at Goldman Sachs, a global investment banking, securities and investment management firm; also served as Advisory Director (2013 to 2015), andPartner-in-Charge, Midwest Region Investment Banking Services (2001 to 2010); prior thereto, various positions within Goldman Sachs (since 1987, except where noted). Mr. Gilbertson previously served as Managing Director at Travelers Group Inc. (1995), a financial services company; Associate, Mergers and Acquisitions at Morgan Stanley & Co. Incorporated (1985 to 1987), a financial services firm; Consultant, Corporate Strategy at Bain & Company (1982 to 1985), a management consulting firm; Assistant Treasurer, Corporate Banking at Chase Manhattan Bank (1979 to 1981), a commercial bank; and News Reporter at The Providence Journal Company (1978), a metropolitan daily newspaper.
Skills and Qualifications:Other Board Experience: Director and Chair of Audit Committee of Meijer, Inc. (“Meijer”)Skills and Qualifications:
Mr. Gilbertson has extensiveExtensive experience in corporate finance, capital markets, and mergers and acquisitions and the insights he gained as an advisor to clients across a broad range of industries bring valuable perspective to our Board.
Throughout his career, Mr. Gilbertson has servedServed as a strategic and financial advisor to his clients, forming deep relationships with companies in a range of industries including Baxter International, Walgreens, The Boeing Company, W.W. Grainger, Inc. and Exelon Corporation.
He hasHas nearly four decades of experience in the professional and financial services industry starting his career with Chase Manhattan Bank, then working at Bain & Company, where he lived abroad and served in a corporate strategy consulting role, next joining Morgan Stanley in mergers and acquisitions, and finally at Goldman Sachs, where he helped expand the Midwestern practice.
His deepDeep expertise in financial management, coupled with his analytical and collaborative mindset, allowallows him to make invaluable contributions to our Board as it focuses on delivering greater returns from our businesses, funding investments to drive profitable growth, and enhancing shareholder value.
Mr. Gilbertson has a strongStrong background in senior leadership development, succession planning, and organizational culture development gained from his time at Goldman Sachs and his service as a director at Meijer, and has first-hand experience assisting in onboarding new CEOs.
He also bringsBrings to the Board considerable expertise in financial risk oversight and capital allocation.allocation
He earned a bachelor’sBachelor’s degree in political economy from Dartmouth College and an MBA from Harvard University.University
Business Experience: |
Retired Managing Director at Goldman Sachs
Served as Advisory Director and Partner-in-Charge, Midwest Region Investment Banking Services
Served as Managing Director at Travelers Group Inc.
Former Associate, Mergers and Acquisitions at Morgan Stanley
Former Consultant, Corporate Strategy at Bain & Company
Former Assistant Treasurer, Corporate Banking at Chase Manhattan Bank
Former News Reporter at The Providence Journal Company
Other Board Experience: |
Director and Chair of Audit Committee of Meijer, Inc. (“Meijer”)
Director of AAR Corp.
DOVER CORPORATION –20192022 Proxy Statement 1214
PROPOSAL 1 — ELECTION OF DIRECTORS
| Kristiane C. Graham
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Independent Director Nominee Director since: 1999 Age:
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Business Experience: Private Investor.
Skills and Qualifications: |
Ms. Graham’s experienceExperience as a private investor with substantial holdings of Dover stock and her shared interests in Dover, including interests through charitable organizations of which she is a director, makes her a good surrogate for our individual and retail investors.investors
Ms. Graham also has past experienceExperience with a commercial bank, primarily as a loan officer. Sheofficer; founded and operated an advisory company and a publication regarding international thoroughbred racing and nowco-manages her family’s investments.investments
During her timeActively works with and has served on the boards of various organizations to support the objectives of local communities, affordable housing, education, and health
Currently serves on the Board sheof Directors for the Walter N. Ridley Scholarship Fund at the University of Virginia
Serves as an Emeritus Trustee of the College Foundation of the University of Virginia and has devotedpreviously served on the Advisory Board of the University of Virginia School of Nursing
Brings valuable insights on the development of our policies and strategies relating to talent, leadership, and culture, with a focus on diversity and inclusion
Devoted substantial time to monitoring the development of Dover operating company leaders, enabling her to provide the Board valuable insights regarding management succession.succession
As a member of one of the founding families of Dover, Ms. Graham also brings to the Board a sense of Dover’s historical values, culture and strategic vision which the Board believes is beneficial as it considers various strategic planning alternatives for shaping Dover’s future.future
Business Experience: |
Private Investor
DOVER CORPORATION – 2022 Proxy Statement 15
PROPOSAL 1 — ELECTION OF DIRECTORS
| Michael F. Johnston
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Independent Board Chair; Independent Director Nominee Director since: 2013 Age:
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Business Experience: Former CEO (from 2004 to 2008) and President and Chief Operating Officer (from 2000 to 2004) of Visteon Corporation, an automotive components supplier; former President of North America/Asia Pacific, Automotive Systems Group (from 1999 to 2000), President of Americas Automotive Group (from 1997 to 1999), and other senior management positions at Johnson Controls, Inc., an automotive and building services company. In May 2009, Visteon filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code.
Other Board Experience: Director of Armstrong Flooring, Inc. and Whirlpool Corporation. Former Chairman and Director of Visteon Corporation. Former Director of Armstrong World Industries and Flowserve Corporation.
Skills and Qualifications: |
Mr. Johnston brings to the BoardBrings industry insight, financial expertise and leadership experience garnered from his 17 years on the boards of global companies.companies
During his career, he has servedServed as CEO of an $18 billion global manufacturer and has been a lead Director and Chair of other major public companies.
Mr. Johnston also brings valuable corporate governance perspectives from his prior board service, while hisincluding as a lead Director and Chair of other major public companies
Brings deep operations experience has helped him gain knowledge and a deep understanding in manufacturing, design, innovation, engineering, accounting and finance and capital structure.structure
In addition, he hasBrings nearly 20 yearstwo decades of experience in building businesses in emerging economies.economies
Mr. Johnston holds a bachelor’sBachelor’s degree in industrial management from the University of Massachusetts and an MBA from Michigan State University.University
Business Experience: |
Former CEO and President of Visteon Corporation (“Visteon”)
Former Chief Operating Officer of Visteon
Former President of North America/Asia Pacific, Automotive Systems Group, of Johnson Controls, Inc. (“Johnson Controls”)
Former President of Americas Automotive Group of Johnson Controls
Other Board Experience: |
Director of Armstrong Flooring, Inc.
Former Chairman and Director of Visteon
Former Director of Armstrong World Industries, Flowserve Corporation, and Whirlpool Corporation
DOVER CORPORATION – 20192022 Proxy Statement 1316
PROPOSAL 1 — ELECTION OF DIRECTORS
| Eric A. Spiegel
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Independent Director Nominee Director since: 2017 Age:
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Skills and Qualifications: |
Experienced business leader with diversified, global experience who brings deep and valuable expertise in strategy development, corporate restructuring, portfolio management and M&A to our Board
40+ years of experience working with large, global companies in the energy and industrial markets, mostly recently as President & CEO of Siemens USA
At Siemens, he led strategic reviews across a portfolio of ~45 businesses in the company’s largest market with over $22 billion in revenue, 50,000 employees and over 60 manufacturing facilities
Led the acquisition, divestiture, joint venture and carve-out of over 30 business units and segments
Executed Siemens’ “Vision 2020” initiative to optimize growth and margins in the U.S., across all sectors
Prior to Siemens, Mr. Spiegel was a global consultant at Booz Allen Hamilton focused on complex organizations in the energy, power, chemical, water, industrial and automotive fields
At Booz, he worked with major energy clients globally on projects around corporate strategy, M&A, major capital projects, cost restructuring, margin enhancement and supply chain re-design and was also closely involved with the government sector
An expert on the global energy industry, Mr. Spiegel co-authored the book Energy Shift: Game-changing Options for Fueling the Future
Holds a bachelor’s degree in economics from Harvard University and an MBA from the Tuck School of Business Experience: at Dartmouth College
Business Experience: |
Special Advisor at General Atlantic,Brighton Park Capital, a private equity firm, where he supports the firm’s sector investment teams and portfolio companies by providing strategic counsel on industry trends and growth strategies. strategies
Former President and CEO (from 2010 to 2016) of Siemens USA a global business focusing on the areas of electrification, automation and digitalization; former
Former Managing Partner, Global Energy, Chemicals, and Power, and Managing Partner, Washington, D.C. office, and other roles at Booz & Company, Inc. (now known as Strategy&) and Booz Allen Hamilton, Inc., global consulting firms (1986 to 2010); former
Former Associate, Energy and Industrials Practice, at Temple, Barker & Sloane, Inc., a management consulting firm (now known as Oliver Wyman) (1984 to 1985; 1980 to 1982): former
Former Marketing and Strategy Manager at Brown Boveri & Cie (now known as ABB), a Swiss group of electrical engineering companies (1982 to 1984).
In connection with his position at General Atlantic,Brighton Park Capital, Mr. Spiegel serves as Chair of the Board of CLEAResult, a privately held portfolio company that provides energy efficiency programs and services in North America.Relatient, Inc.
Other Board Experience:
Other Board Experience: |
Director and Audit Committee Chair of Liberty Mutual Holding Company, Inc.
Skills and Qualifications:
Mr. Spiegel is an experienced business leader with diversified, global experience who brings deep and valuable expertise in strategy development, corporate restructuring, portfolio management and M&A to our Board.
He has over 35 yearsDirector and Audit Committee Chair of experience working with large, global companies in the energy and industrial markets, mostly recently as President and CEO of Siemens USA. At Siemens, he led strategic reviews across a portfolio of ~45 businesses in the company’s largest market with over $22 billion in revenue, 50,000 employees and over 60 manufacturing facilities. During that time, he led the acquisition, divestiture, joint venture andcarve-out of over 30 business units and segments. He also executed Siemens’ “Vision 2020” initiative to optimize growth and margins in the U.S., across all sectors.
Prior to Siemens, Mr. Spiegel was a global consultant at Booz Allen Hamilton focused on complex organizations in the energy, power, chemical, water, industrial and automotive fields. At Booz, he lived, and worked with major energy clients, in Asia, the Middle East, Europe, and Latin America on projects around corporate strategy, M&A, major capital projects, cost restructuring, margin enhancement and supply chainre-design and was also closely involved with the government sector.
|
He holds a bachelor’s degree in economics from Harvard University and an MBA from the Tuck School of Business at Dartmouth College.Project Energy Reimagined Acquisition Corp.
DOVER CORPORATION –20192022 Proxy Statement 1417
PROPOSAL 1 — ELECTION OF DIRECTORS
| Richard J. Tobin
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Chief Executive Officer Director since: 2016 Age:
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Business Experience: President and CEO of Dover (since 2018): former CEO (2013 to 2018) of CNH Industrial NV (“CNH Industrial”), a global manufacturer of agricultural and construction equipment, trucks, commercial vehicles, buses, specialty vehicles and powertrain applications; former Group Chief Operating Officer of Fiat Industrial S.p.A., a global capital goods manufacturer, and President and CEO (each from 2012 to 2013) of CNH Global NV, a multinational manufacturer of agricultural and construction equipment; former CFO of CNH Global NV (2010 to 2012); former Chief Finance Officer & Head of Information Technology (2004 to 2010) of SGS Group, a multinational provider of inspection, verification, testing and certification services; and former Chief Operating Officer for North America (2002 to 2004) of SGS Group.
Skills and Qualifications:Skills and Qualifications:
Mr. Tobin is Dover’s current CEO. The Board believes it is desirable to have one active management representative on the Board to facilitate its access to timely and relevant information and its oversight of management’s long-term strategy, planning, and performance.performance
He hasHas a broad range of industry and functional experiences acquired through regional and global leadership positions of significant responsibility and scope.
He is the formerFormer CEO of CNH Industrial, a complex international industrial company, where he led efforts to increase efficiencies, innovate through new technologies, expand geographically, and maximize the company’s portfolio of businesses.businesses
Mr. Tobin gainedGained extensive experience in international finance, operations, management, and information technology in his prior roles as CFO of CNH Global NV and Chief Finance Officer & Head of Information Technology at SGS Group.
He has developedDeveloped deep expertise with global capital markets through his international finance leadership roles.roles
Prior to beginning his business career, Mr. Tobin was an officer in the United States Army.Army
He is a memberMember of the Board of Trustees of the John G. Shedd Aquarium in Chicago. He formerlyChicago
Formerly served on the U.S. Chamber of Commerce Board of Directors, and is a former member of the Business Roundtable. Mr. Tobin holdsRoundtable
Holds a bachelor of arts from Norwich University and an MBA from Drexel University.University
Business Experience: |
President and CEO of Dover
Former CEO of CNH Industrial NV (“CNH Industrial”)
Former Group Chief Operating Officer of Fiat Industrial S.p.A
Former President and CEO of CNH Global NV
Former CFO of CNH Global NV
Former Chief Finance Officer & Head of Information Technology of SGS Group
Former Chief Operating Officer for North America of SGS Group
Other Board Experience: |
Director of KeyCorp.
Former director of CNH Industrial
DOVER CORPORATION – 20192022 Proxy Statement 1518
PROPOSAL 1 — ELECTION OF DIRECTORS
| Stephen M. Todd
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Independent Director Nominee Director since: 2010 Age:
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Business Experience: Former Global Vice Chairman (from 2003 to 2010) of Assurance Professional Practice of Ernst & Young Global Limited, London, UK, an assurance, tax, transaction and advisory services firm; and prior thereto, various positions with Ernst & Young (since 1971).
Skills and Qualifications:Other Board Experience: Director and Audit Committee member of Apergy Corporation and Member of the Board of Trustees of PNC Funds (registered management investment company).Skills and Qualifications:
Mr. Todd’s experience in theExtensive accounting profession makes him a valuable resource for the Board and Audit Committee.
Mr. Todd brings to the Board significant financial experience in both domestic and international business followingdeveloped during a40-year four decade career at Ernst & Young where he specialized in assurance and audit.audit
Mr. Todd developedBrings unique insights into accounting and directedfinancial issues relevant to multinational companies like Dover
Brings the perspective of an outside auditor to the Audit Committee
Brings leadership and financial strategy experience as developer and director of Ernst & Young’s Global Capital Markets Centers, which provideprovides accounting, regulatory, internal control and financial reporting services to multinational companies in connection with cross-border debt and equity securities transactions and acquisitions making him well suited to advise the Board on capital allocation decisions, financing alternatives, and acquisition activities.
Business Experience: |
His experience, especially his years asFormer Global Vice Chairmanof Assurance Professional Practice of Ernst & Young Global Limited’s Assurance Professional PracticeLimited, London, UK; and prior thereto, various positions with Ernst & Young
Other Board Experience: |
Director and Audit Committee member of ChampionX Corporation (formerly known as audit partner for several multinational companies, gives him unique insights into accounting and financial issues relevant to multinational companies like Dover, and he bringsApergy Corporation)
Former member of the perspectiveBoard of an outside auditor to the Audit Committee.Trustees of PNC Funds
DOVER CORPORATION –20192022 Proxy Statement 1619
PROPOSAL 1 — ELECTION OF DIRECTORS
| Stephen K. Wagner
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Independent Director Nominee Director since: 2010 Age:
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Business Experience: Former Senior Advisor, Center for Corporate Governance, of Deloitte & Touche LLP, an audit, financial advisory, tax and consulting firm (from 2009 to 2011); Managing Partner, Center for Corporate Governance, of Deloitte (from 2005 to 2009); Deputy Managing Partner, Innovation, Audit and Enterprise Risk, United States, of Deloitte (from 2002 to 2007); andCo-Leader, Sarbanes-Oxley Services, of Deloitte (from 2002 to 2005).
Skills and Qualifications:Other Board Experience: Director and Audit Committee member of Apergy CorporationSkills and Qualifications:
Mr. Wagner’s over 30 years of experience in accounting make him a valuable resource for the Board and the Audit Committee.Committee
His work with Sarbanes-Oxley and other corporate governance regulations, including his years as Managing Partner at Deloitte & Touche’s Center for Corporate Governance, makes him well suited to advise the Board on financial, auditing and finance-related corporate governance matters as well as risk management.management
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Expert in risk oversight and co-authored a book on risk management entitled Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise
He bringsBrings to the Board an outside auditor’s perspective on matters involving audit committee procedures, internal control and accounting and financial reporting matters.matters
Business Experience: |
Former Senior Advisor, Center for Corporate Governance, of Deloitte & Touche LLP (“Deloitte”)
Former Managing Partner, Center for Corporate Governance of Deloitte
Former Deputy Managing Partner, Innovation, Audit and Enterprise Risk, United States of Deloitte
Former Co-Leader, Sarbanes-Oxley Services, of Deloitte
Other Board Experience: |
Director and Audit Committee member of ChampionX Corporation (formerly known as Apergy Corporation)
DOVER CORPORATION – 20192022 Proxy Statement 1720
PROPOSAL 1 — ELECTION OF DIRECTORS
| Keith E. Wandell
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Independent Director Nominee Director since: 2015 Age:
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Business Experience: Former President and CEO (from 2009 to 2015) of Harley-Davidson, Inc., a global motorcycle manufacturer; and former President and Chief Operating Officer (from 2006 to 2009), former Executive Vice President (from 2005 to 2006), former Corporate Vice President (from 1997 to 2005), former President of the Automotive Experience business (from 2003 to 2006) and President of the Power Solutions business (from 1997 to 2003) of Johnson Controls, Inc., a global manufacturer of automotive, power and building solutions.
Skills and Qualifications:Other Board Experience: Director of Dana Incorporated and Constellation Brands, Inc. Former Chairman of Harley Davidson, Inc. and former Director of Clarcor, Inc.Skills and Qualifications:
Mr. Wandell brings to the Board the valuable perspective of a strategic, experienced leader with a strong record focused on growth, profitability, international expansion and innovation.
He hasHas over 30 years of experience in diversified manufacturing businesses, most recently as the former Chairman and CEO of Harley-Davidson, Inc., (“Harley-Davidson”) where he led transformation efforts across the company’s product development, manufacturing and retail functions, focused on international expansion and implemented a restructuring plan.plan
Prior to joining Harley-Davidson, Inc., Mr. Wandell served as President and Chief Operating Officer of Johnson Controls, Inc. (“Johnson Controls”) and helped manage the company’s entry into the Chinesecar-battery market as well as its subsequent joint venture with China’s largest battery manufacturer.manufacturer
Mr. Wandell has gainedGained valuable insights into the effective development of executive leadership capabilities and strong corporate cultures through his experience as a senior leader at various companies such as Harley-Davidson and Johnson Controls.
In addition to his significant operating, financial and leadership experience in both domestic and international business, Mr. Wandell has servedServed on the boards of four other public companies, including the two on which he currently serves.serves
He holdsHolds a bachelor’s degree in business administration from Ohio University and an MBA from the University of Dayton.Dayton
Business Experience: |
Former President and CEO of Harley-Davidson
Former President and Chief Operating Officer of Johnson Controls
Former Executive Vice President of Johnson Controls
Former Corporate Vice President of Johnson Controls
Former President of the Automotive Experience business of Johnson Controls
Former President of the Power Solutions business of Johnson Controls
Other Board Experience: |
Director of Dana Incorporated. Former Chairman of Harley-Davidson
Former Director of Constellation Brands, Inc. and Clarcor, Inc.
DOVER CORPORATION –20192022 Proxy Statement 1821
PROPOSAL 1 — ELECTION OF DIRECTORS
| Mary A. Winston
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Independent Director Nominee Director since: 2005 Age:
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Business Experience: President of WinsCo Enterprises Inc., a consulting firm providing financial and board governance advisory services (since 2016); former Executive Vice President and CFO of Family Dollar Stores, Inc., a general merchandise retailer (from 2012 to 2015); former Senior Vice President and CFO of Giant Eagle, Inc., a grocery and fuel retailer (from 2008 to 2012); former President of WinsCo Financial LLC, a financial and strategic consulting firm (from 2007 to 2008); and former Executive Vice President and CFO of Scholastic Corporation, a children’s publishing and media company (from 2004 to 2007).
Other Board Experience: Director of Domtar Corporation and Acuity Brands, Inc.; Former Director of SUPERVALU INC. and Plexus Corporation.
Skills and Qualifications:
Skills and Qualifications: |
Ms. Winston brings to the Board valuable experience and expertise based on her years of broad financial management and broad executive leadership experience.
Ms. Winston, who startedStarted her career as a CPA with Arthur Andersen & Co, and has extensive experience with financial, accounting and internal control matters for large public companies.
Ms. Winston servedServed as CFO of three large companies: Family Dollar Stores, Inc., Giant Eagle, Inc. and Scholastic, Inc., as well as prior global finance leadership roles (prior to 2004) at Visteon Corporation and Pfizer, Inc. Through these experiences, she developed
Developed deep expertise in capital markets, M&A, capital structure matters, capital allocation, financial risk management, real estate financing transactions, dividend and stock repurchase programs, and investor relations.relations
Ms. Winston’s background and experience make her a valuable contributor to the Board on matters involving risk oversight and capital allocation, as well as executive compensation and general corporate governance matters.matters
She holdsHolds a bachelor’s degree in accounting from the University of Wisconsin and an MBA from Northwestern University’s Kellogg School of Management. She has been designatedManagement
Designated as a Board Leadership Fellow by the NACD and serves as Chairon the national board of the NACD Carolinas chapter.
Business Experience: |
President of WinsCo Enterprises Inc
Former Interim CEO, Bed Bath & Beyond Inc.
Former Executive Vice President and CFO of Family Dollar Stores, Inc.
Former Senior Vice President and CFO of Giant Eagle, Inc.
Former President of WinsCo Financial LLC
Former Executive Vice President and CFO of Scholastic Corporation
Other Board Experience: |
Director of Bed Bath & Beyond, Inc., Chipotle Mexican Grill, and Acuity Brands, Inc.
Former Director of Domtar Corporation, SUPERVALU INC., and Plexus Corporation
THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH
OF THE NOMINEES NAMED ABOVE.
DOVER CORPORATION –20192022 Proxy Statement 1922
PROPOSAL 1 — ELECTION OF DIRECTORS
Board Oversight and Governance Practices
Our Board is responsible for, and committed to, overseeing our long-term strategic development as well as managing the principal and most significant risks that we face. In carrying out this duty, our Board advises senior management to help drive long-term value creation for our shareholders. The Board delegates specific areas of responsibility to relevant Board committees, as detailed below under the heading “Overview of Committee Responsibilities”, who report on their deliberations to the Board. The following summarizes our Board’s key areas of oversight responsibility.
Board Oversight
KEY AREAS OF BOARD OVERSIGHT | ||
Long-Term Business Strategy | • One of the primary responsibilities of our Board is theoversight of management’s long-term strategy and planning. Accordingly, our Board maintains a deep level of engagement with management in setting and overseeing Dover’s long-term business strategy.
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Capital Allocation | • Our Board is focused on theefficient allocation of capital to drive growth and provide returns to our
• We consistentlyreturn cash to shareholders by payingdividends, whichhave increased annually over each of the last
• We also undertake opportunistic share repurchases as part of our capital allocation strategy, • We made $171.5 million in capital expenditures in 2021, representing 2.2% of revenue, and $165.7 million in capital expenditures in 2020, representing 2.5% of revenue, in line with our priority of organic reinvestment to grow and strengthen our existing businesses.
• We employ aprudent financial policy to support our capital allocation strategy, which includes maintaining ani
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Portfolio Management | • Businesses in our portfolio are continually evaluated forstrategic fit. • We seek to deploy capital in acquisitions in attractive growth areas across our five segments. We focus primarily on bolt-on acquisitions, applying strict selection criteria of market attractiveness (including growth, market landscape, and performance-based competition), business fit (including sustained leading position, revenue visibility, and favorable customer value-add versus switching cost or risk) and financial return profile (accretive growth and margins and double-digit return on invested capital). • We have sold or divested some of our • In recognition of recent portfolio changes, we recently changed the name of the Fueling Solutions segment to “Clean Energy & Fueling,” and
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PROPOSAL 1 — ELECTION OF DIRECTORS
KEY AREAS OF BOARD OVERSIGHT | ||
Risk | • Our Board has established acomprehensive enterprise risk management process to identify and manage risks, and periodically reviews the processes established by management to identify and manage risks andcommunicates with management about these processes.
• We have established a risk assessment team consisting of senior executives, which annually, with the assistance of a consultant, oversees a risk assessment made at the corporate center, segment and operating company levels and, with that information in mind, performs an assessment of the overall risks our company may
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ESG | •
• Our Compensation Committee has integrated ESG oversight responsibility into our CEO’s individual strategic objectives
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PROPOSAL 1 — ELECTION OF DIRECTORS
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Culture & Human Capital Management | • Our entrepreneurial culture depends upon an inclusive approach that values employees’ diversity and contributions. • We fosteran operating culture with high ethical standards that values accountability, rigor, trust, inclusion, respect, and open communication and is designed to encourage individual growth and operational effectiveness. We continue to make significant investments in talent development,
• As part of our commitment to strong corporate governance practices,we maintain an active and robust ethics program. Our Code of Business Conduct &
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Succession Planning | • Another of the Board’s primary responsibilities isoverseeing a sound Board and management succession process. The Board has developed acomprehensive plan to address management succession — both over the long term and for emergency purposes. The framework for the long-term plan includes thoughtful, deliberate monitoring of management beyond our top executives to ensure Dover continues to build a deep internal bench of talent.
•
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Cybersecurity | • The full Board is briefed on enterprise-widecybersecurity risk management and the overall cybersecurity risk environment, and oversees major tasks related to cybersecurity risk management, periodically reviews our response capabilities, and meets with the Chief Information Security Officer on at least an annual basis.
• Dover employs the National Institute of Standards & Technology Framework for Improving Critical Infrastructure Cybersecurity (The NIST Framework). This voluntary guidance developed with much private sector input provides a framework and a toolkit for organizations to manage cybersecurity risk.
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Board Committees
Our Board has four standing committees — the Audit Committee, the Compensation Committee, the Governance and Nominating Committee, and the Finance Committee. The table below sets forth a summary of our committee structure and membership information.
DIRECTOR | Audit Committee | Compensation Committee | Governance and Nominating | Finance Committee | ||||
DEBORAH L. DEHAAS | ✓ | |||||||
H. JOHN GILBERTSON, JR. | ✓ | ✓ | ||||||
KRISTIANE C. GRAHAM | ✓ | ✓ | ||||||
MICHAEL F. JOHNSTON | ✓ | ✓ | ||||||
ERIC A. SPIEGEL | ✓ | ✓ (Chair) | ||||||
RICHARD J. TOBIN | ||||||||
STEPHEN M. TODD | ✓ (Chair) | |||||||
STEPHEN K. WAGNER | ✓ | ✓ (Chair) | ||||||
KEITH E. WANDELL | ✓ (Chair) | ✓ | ||||||
MARY A. WINSTON | ✓ | ✓ | ||||||
MEETINGS HELD IN 2021 | 8 | 5 | 4 | 9 |
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PROPOSAL 1 — ELECTION OF DIRECTORS
Overview of Committee Responsibilities
Audit Committee | ||
Stephen M. Todd (Chair) Deborah L. DeHaas H. John Gilbertson, Jr. Eric A. Spiegel Stephen K. Wagner | Key Responsibilities • Selecting and engaging our independent registered public accounting firm (“independent auditors”) • Overseeing the work of our independent auditors and our internal audit function • Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the committee • Reviewing with management and the independent auditors the audit plan and results of the auditing engagement • Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting The Audit Committee holds regular quarterly meetings at which it meets separately with each of our independent registered public accounting firm, PwC, our internal audit function, financial management and our general counsel to assess certain matters including the status of the independent audit process, management’s assessment of the effectiveness of internal control over financial reporting and the operation and effectiveness of our compliance program. In addition, the Audit Committee, as a whole, reviews and meets to discuss the contents of each Form 10-Q and Form 10-K (including the financial statements) prior to its filing with the SEC. Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the SEC rules. The Audit Committee’s responsibilities and authority are described in greater detail in its written charter. |
Compensation Committee | ||
Keith E. Wandell (Chair) Kristiane C. Graham Michael F. Johnston Mary A. Winston | Key Responsibilities The Compensation Committee, together with our independent directors, approves compensation for the CEO of Dover. The functions of the Compensation Committee also include: • Approving compensation for executive officers who report directly to the CEO (together with the CEO, “senior executive officers”) • Granting awards and approving payouts under our 2012 Equity and Cash Incentive Plan (the “2012 LTIP”), our 2021 Omnibus Incentive Plan (the “2021 LTIP”). and our AIP • Approving changes to our executive compensation plans • Reviewing and recommending compensation for the Board • Overseeing succession planning and management development programs The Compensation Committee’s responsibilities and authority are described in greater detail in its written charter. |
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PROPOSAL 1 — ELECTION OF DIRECTORS
Governance and Nominating Committee | ||
Stephen K. Wagner (Chair) Kristiane C. Graham Michael F. Johnston | Key Responsibilities • Developing and recommending corporate governance principles to our Board • Annually reviewing the requisite skills and characteristics of board members as well as the size, composition, functioning and needs of our Board as a whole • Considering and recommending to the Board nominees for election to, or for filling any vacancy on, our Board in accordance with our by-laws, our governance guidelines, and the committee’s charter • Identifying and recommending to our Board any changes it believes desirable in the size and composition of our Board • Recommending to our Board any changes it believes desirable in structure and membership of our Board’s committees • Providing oversight of Dover’s practices on political contributions and lobbying expenses and reviewing annually Dover’s political contributions and lobbying expenses The Governance and Nominating Committee’s responsibilities and authority are described in greater detail in its written charter. |
Finance Committee | ||
Eric A. Spiegel (Chair) H. John Gilbertson, Jr. Keith E. Wandell Mary A. Winston | Key Responsibilities • Reviewing and recommending for approval by the Board proposed changes to dividend policies, stock splits, and repurchase programs • Reviewing our capital structure, liquidity, and financing plans • Reviewing and approving the registration and issuance of debt or equity securities • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, capital expenditures • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, M&A transactions • Oversight of treasury, insurance, and tax planning matters The Finance Committee’s responsibilities and authority are described in greater detail in its written charter. |
DOVER CORPORATION – 2022 Proxy Statement 27
PROPOSAL 1 — ELECTION OF DIRECTORS
Corporate Governance
Our Board is committed to sound governance practices and regularly reviews and refines our profile to reflect evolving best practices and matters raised by our shareholders. The following summarizes key aspects of our governance framework.
GOVERNANCE HIGHLIGHTS | ||
Independent Board of Directors | • CEO, and our Board has leadership that is independent from management, by way of an independent Chair. | |
• In 2020, our Board adopted a policy reflected in our Corporate Governance Guidelines requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. | ||
Special Shareholder Meetings | • In 2020, we amended our by-laws to reduce the ownership threshold required to call a special meeting of shareholders to 15% or more of the voting power of our outstanding stock from 25%. | |
Elimination of | • All of the supermajority voting provisions in our charter were eliminated in 2019. | |
Board Committee Refreshment | • Our Board
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Annual Majority Vote Director Elections & Mandatory Resignation Policy | • All of our directors are elected annually by our shareholders.
• Our directors must receive a majority of the votes cast in uncontested elections to be elected.
• We have a director resignation policy that requires a | |
Proxy Access | • Ourby-laws permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in ourby-laws. | |
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Board Leadership Structure
We believe that having an independent leader of the Board is important to the Board’s oversight role and decision-making involving corporate strategy, performance, succession, and other critical matters. Under our current Board
DOVER CORPORATION –2019 Proxy Statement 22
PROPOSAL 1 — ELECTION OF DIRECTORS
leadership structure, our Board has leadership that is independent from management by way of an independent Chair. Our CEO is also a member of the Board as a management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. In our view, this board leadership structure gives us an appropriate, well-functioning balance betweennon-management and management directors that combines experience, accountability and effective risk oversight.
Board, Committee and Individual Director Evaluations
Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluatesone-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. New directors undergo the evaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a morein-depth, comprehensive evaluation for each of our directors.
DOVER CORPORATION – 2022 Proxy Statement 28
PROPOSAL 1 — ELECTION OF DIRECTORS
Directors’ Meetings and Attendance
During 2018,2021, the Board met 8seven times. No director attended less than 75% of the board and standing committee meetings held while he or she was a member of the Board and relevant standing committee. Average board attendance was over 95%97% in 2018.2021. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives ornon-independent directors present. The Chair of the Board presides at these sessions. We expect our directors to attend the Annual Meeting. All directors then on the Board attended the 20182021 Annual Meeting.
Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls, orin-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with shareholders.
Management Meetings and Site Visits
We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makeson-site visits to our businesses to tour the manufacturing facilities and meetface-to-face with company management and employees. These visits serve as an important tool in the Board’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture. In 2021, these types of opportunities for engagement were largely conducted virtually rather than in-person.
Director Orientation and Education
All new directors participate in our director orientation program. New directors meetin-person with senior corporate and segment leaders to review and discuss our businesses, operations, strategy, end markets, governance, internal controls, and culture. We believe that ouron-boarding approach, coupled with participation in regular Board and committee meetings, as well as additional exposure to our business through participation in management meetings and site visits, whether virtually or in-person, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.
Our Board also encourages directors to participate annually participate in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.
Director IndependenceOverview of Committee Responsibilities
Our Board has determined that each of the current members of the Board, except for Richard J. Tobin, who is our CEO, has no material relationship with Dover and satisfies all the criteria for being “independent” members of our Board. This includes the criteria established by the U.S. Securities and Exchange Commission (“SEC”) and the New
Audit Committee | ||
Stephen M. Todd (Chair) Deborah L. DeHaas H. John Gilbertson, Jr. Eric A. Spiegel Stephen K. Wagner | Key Responsibilities • Selecting and engaging our independent registered public accounting firm (“independent auditors”) • Overseeing the work of our independent auditors and our internal audit function • Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the committee • Reviewing with management and the independent auditors the audit plan and results of the auditing engagement • Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting The Audit Committee holds regular quarterly meetings at which it meets separately with each of our independent registered public accounting firm, PwC, our internal audit function, financial management and our general counsel to assess certain matters including the status of the independent audit process, management’s assessment of the effectiveness of internal control over financial reporting and the operation and effectiveness of our compliance program. In addition, the Audit Committee, as a whole, reviews and meets to discuss the contents of each Form 10-Q and Form 10-K (including the financial statements) prior to its filing with the SEC. Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the SEC rules. The Audit Committee’s responsibilities and authority are described in greater detail in its written charter. |
Compensation Committee | ||
Keith E. Wandell (Chair) Kristiane C. Graham Michael F. Johnston Mary A. Winston | Key Responsibilities The Compensation Committee, together with our independent directors, approves compensation for the CEO of Dover. The functions of the Compensation Committee also include: • Approving compensation for executive officers who report directly to the CEO (together with the CEO, “senior executive officers”) • Granting awards and approving payouts under our 2012 Equity and Cash Incentive Plan (the “2012 LTIP”), our 2021 Omnibus Incentive Plan (the “2021 LTIP”). and our AIP • Approving changes to our executive compensation plans • Reviewing and recommending compensation for the Board • Overseeing succession planning and management development programs The Compensation Committee’s responsibilities and authority are described in greater detail in its written charter. |
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Governance and Nominating Committee | ||
Stephen K. Wagner (Chair) Kristiane C. Graham Michael F. Johnston | Key Responsibilities • Developing and recommending corporate governance principles to our Board • Annually reviewing the requisite skills and characteristics of board members as well as the size, composition, functioning and needs of our Board as a whole • Considering and recommending to the Board nominees for election to, or for filling any vacancy on, our Board in accordance with our by-laws, our governance guidelines, and the committee’s charter • Identifying and recommending to our Board any changes it believes desirable in the size and composition of our Board • Recommending to our Board any changes it believes desirable in structure and membership of our Board’s committees • Providing oversight of Dover’s practices on political contributions and lobbying expenses and reviewing annually Dover’s political contributions and lobbying expenses The Governance and Nominating Committee’s responsibilities and authority are described in greater detail in its written charter. |
York Stock Exchange (“NYSE”) listing standards, as well as our standards for classification as an independent director which are available on our website at www.dovercorporation.com. Our Board makes an annual determination of the independence of each nominee for director prior to his or her nomination forre-election. No director may be deemed independent unless the Board determines that he or she has no material relationship with Dover, directly or as an officer, shareholder or partner of an organization that has a material relationship with Dover.
Finance Committee Eric A. Spiegel (Chair) H. John Gilbertson, Jr. Keith E. Wandell Mary A. Winston Key Responsibilities • Reviewing and recommending for approval by the Board proposed changes to dividend policies, stock splits, and repurchase programs • Reviewing our capital structure, liquidity, and financing plans • Reviewing and approving the registration and issuance of debt or equity securities • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, capital expenditures • Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, M&A transactions • Oversight of treasury, insurance, and tax planning matters The Finance Committee’s responsibilities and authority are described in greater detail in its written charter. DOVER CORPORATION –Majority Standard for Election of Directors and Mandatory Resignation PolicyUnder ourby-laws and corporate governance guidelines, the voting standard in director elections is a majority of the votes cast. Under the majority standard, a director must receive more votes in favor of his or her election than votes against his or her election. Abstentions and brokernon-votes do not count as votes cast with respect to a director’s election. In contested director elections (where there are more nominees than available seats on the board), the plurality standard will apply.For an incumbent director to be nominated forre-election, he or she must submit an irrevocable resignation letter. The resignation will be contingent on the nominee not receiving a majority of the votes cast in an uncontested election and on the Board’s acceptance of the resignation. If an incumbent director fails to receive a majority of the votes cast in an uncontested election, the Governance and Nominating Committee will make a recommendation to our Board concerning the resignation. Our Board will act on the resignation within 90 days following certification of the election results, taking into account the committee’s recommendation. The Board will publicly announce its decision and, if the resignation is rejected, the rationale for its decision.Governance Guidelines and Code of EthicsOur Board long ago adopted written corporate governance guidelines that set forth the responsibilities of our Board and the qualifications and independence of its members and the members of its standing committees. The Board reviews these guidelines at least annually, in light of evolving best practices, shareholder feedback and the evolution of our business. In addition, our Board has a long-standing code of business conduct and ethics setting forth standards applicable to all of our companies and their employees, a code of ethics for our CEO and senior financial officers, and charters for each of its standing committees. All of these documents (referred to collectively as “governance materials”) are available on our website at www.dovercorporation.com.Procedures for Approval of Related Person TransactionsWe generally do not engage in transactions in which our senior executive officers or directors, any of their immediate family members or any of our 5% shareholders have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and an amount that exceeds $120,000, it would be subject to review and approval by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are available with the governance materials on our website.Under the procedures, management determines whether a proposed transaction requires review under the policy and, if so, presents the transaction to the Governance and Nominating Committee. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves or rejects the transaction. If the proposed transaction is immaterial or it is impractical or undesirable to defer the proposed transaction until the next committee meeting, the Chair of the committee decides whether to (i) approve the transaction and report the transaction at the next meeting or (ii) call a special meeting of the committee to review and approve the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve or reject the transaction. No director may participate in the review of any transaction in which he or she is a related person.20192022 Proxy Statement 2427
PROPOSAL 1 — ELECTION OF DIRECTORS
Communication with Directors
The Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (“accounting matters”), and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting matters. Such complaints or concerns may be submitted to Dover, care of our Corporate Secretary or through the communications coordinator, an external service provider, by mail, fax, telephone, or via the internet as published on our website. The communications coordinator forwards such communications to Dover without disclosing the identity of the sender if anonymity is requested.
Shareholders and other interested persons may also communicate with our Board and thenon-management directors in any of these same manners. Such communications are forwarded to the Chair of the Governance and Nominating Committee.
Board Committees
Our Board has four standing committees — the Audit Committee, the Compensation Committee, the Governanceis committed to sound governance practices and Nominating Committee,regularly reviews and the Finance Committee.refines our profile to reflect evolving best practices and matters raised by our shareholders. The table below sets forth a summaryfollowing summarizes key aspects of our committee structure and membership information.governance framework.
DIRECTOR | Audit Committee | Compensation Committee | Governance and Nominating | Finance Committee | ||||
PETER T. FRANCIS* | ✓ | ✓ | ||||||
H. JOHN GILBERTSON, JR. | ✓ | ✓ | ||||||
KRISTIANE C. GRAHAM | ✓ | ✓ | ||||||
MICHAEL F. JOHNSTON | ✓ | ✓ | ||||||
RICHARD K. LOCHRIDGE* | ✓ | |||||||
ERIC A. SPIEGEL | ✓ | ✓ (Chair) | ||||||
RICHARD J. TOBIN | ||||||||
STEPHEN M. TODD | ✓ (Chair) | |||||||
STEPHEN K. WAGNER | ✓ | ✓ (Chair) | ||||||
KEITH E. WANDELL | ✓ (Chair) | ✓ | ||||||
MARY A. WINSTON | ✓ | ✓ | ||||||
MEETINGS IN 2018 | 9 | 7 | 4 | 4 |
GOVERNANCE HIGHLIGHTS | ||
Independent Board of Directors |
• All directors are independent, other than our CEO, and | |
Commitment to Diversity | • In 2020, our Board adopted a policy reflected in our Corporate Governance Guidelines requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. | |
Special Shareholder Meetings | • In 2020, we amended our by-laws to reduce the ownership threshold required to call a special meeting of shareholders to 15% or more of the voting power of our outstanding stock from 25%. | |
Elimination of | • All of the supermajority voting provisions in our charter were eliminated in 2019. | |
Board Committee Refreshment | • Our Board periodically reviews committee composition and chair positions, seeking the appropriate blend of continuity and fresh perspectives on committees. | |
Annual Majority Vote Director Elections & Mandatory Resignation Policy | • All of our directors are • Our directors must receive a majority of the votes cast in uncontested elections to be elected. • We have a director resignation policy that requires a director to tender an irrevocable resignation letter to the Board | |
Proxy Access | • Our by-laws permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, |
Board Leadership Structure
We believe that having an independent leader of the Board is important to the Board’s oversight role and decision-making involving corporate strategy, performance, succession, and other critical matters. Under our current Board leadership structure, our Board has leadership that is independent from management by way of an independent Chair. Our CEO is also a member of the Board as a management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. In our view, this board leadership structure gives us an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.
Board, Committee and Individual Director Evaluations
Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluates one-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. New directors undergo the evaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a more in-depth, comprehensive evaluation for each of our directors.
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PROPOSAL 1 — ELECTION OF DIRECTORS
Directors’ Meetings and Attendance
During 2021, the Board met seven times. No director attended less than 75% of the board and standing committee meetings held while he or she was a member of the Board and relevant standing committee. Average board attendance was over 97% in 2021. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives or non-independent directors present. The Chair of the Board presides at these sessions. We expect our directors to attend the Annual Meeting. All directors attended the 2021 Annual Meeting.
Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls, or in-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with shareholders.
Management Meetings and Site Visits
We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makes on-site visits to our businesses to tour the manufacturing facilities and meet face-to-face with company management and employees. These visits serve as an important tool in the Board’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture. In 2021, these types of opportunities for engagement were largely conducted virtually rather than in-person.
Director Orientation and Education
All new directors participate in our director orientation program. New directors meet with senior corporate leaders to review and discuss our businesses, operations, strategy, end markets, governance, internal controls, and culture. We believe that our on-boarding approach, coupled with participation in regular Board and committee meetings, as well as additional exposure to our business through participation in management meetings and site visits, whether virtually or in-person, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.
Our Board also encourages directors to participate annually in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.
Overview of Committee Responsibilities
Audit Committee | ||
Stephen M. Todd (Chair)
Deborah L. DeHaas H. John Gilbertson, Jr. Eric A. Spiegel Stephen K. Wagner |
Key Responsibilities
• Selecting and engaging our independent registered public accounting firm (“independent auditors”)
• Overseeing the work of our independent auditors and our internal audit function
• Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the committee
• Reviewing with management and the independent auditors the audit plan and results of the auditing engagement
• Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting
The Audit Committee holds regular quarterly meetings at which it meets separately with each of our independent registered public accounting firm, PwC, our internal audit function, financial management and our general counsel to assess certain matters including the status of the independent audit process, management’s assessment of the effectiveness of internal control over financial reporting and the operation and effectiveness of our compliance program. In addition, the Audit Committee, as a whole, reviews and meets to discuss the contents of each Form10-Q and Form10-K (including the financial statements) prior to its filing with the SEC.
Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the SEC rules.
The Audit Committee’s responsibilities and authority are described in greater detail in its written charter.
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Compensation Committee | ||
Keith E. Wandell (Chair)
Kristiane C. Graham Michael F. Johnston
Mary A. Winston
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Key Responsibilities
The Compensation Committee, together with our independent directors, approves compensation for the CEO of Dover. The functions of the Compensation Committee also include:
• Approving compensation for executive officers who report directly to the CEO (together with the CEO, “senior executive officers”)
• Granting awards and approving payouts under our 2012 Equity and Cash Incentive Plan (the
• Approving changes to our executive compensation plans
• Reviewing and recommending compensation for the Board
• Overseeing succession planning and management development programs
The Compensation Committee’s responsibilities and authority are described in greater detail in its written charter.
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PROPOSAL 1 — ELECTION OF DIRECTORS
Governance and Nominating Committee | ||
Stephen K. Wagner (Chair)
Kristiane C. Graham Michael F. Johnston |
Key Responsibilities
• Developing and recommending corporate governance principles to our Board
• Annually reviewing the requisite skills and characteristics of board members as well as the size, composition, functioning and needs of our Board as a whole
• Considering and recommending to the Board nominees for election to, or for filling any vacancy on, our Board in accordance with ourby-laws, our governance guidelines, and the committee’s charter
• Identifying and recommending to our Board any changes it believes desirable in the size and composition of our Board
• Recommending to our Board any changes it believes desirable in structure and membership of our Board’s committees
• Providing oversight of Dover’s practices on political contributions and lobbying expenses and reviewing annually Dover’s political contributions and lobbying expenses The Governance and Nominating Committee’s responsibilities and authority are described in greater detail in its written charter.
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Finance Committee | ||
Eric A. Spiegel (Chair)
H. John Gilbertson, Jr. Keith E. Wandell Mary A. Winston |
Key Responsibilities
• Reviewing and recommending for approval by the Board proposed changes to dividend policies, stock splits, and repurchase programs
• Reviewing our capital structure, liquidity, and financing plans
• Reviewing and
• Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, capital expenditures
•
• Oversight of treasury, insurance, and tax planning
The Finance Committee’s responsibilities and authority are described in greater detail in its written charter.
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DOVER CORPORATION –20192022 Proxy Statement 27
PROPOSAL 1 — ELECTION OF DIRECTORS
Corporate Governance
Our Board is committed to sound governance practices and regularly reviews and refines our profile to reflect evolving best practices and matters raised by our shareholders. The following summarizes key aspects of our governance framework.
GOVERNANCE HIGHLIGHTS | ||
Independent Board of Directors | • All directors are independent, other than our CEO, and our Board has leadership that is independent from management, by way of an independent Chair. | |
Commitment to Diversity | • In 2020, our Board adopted a policy reflected in our Corporate Governance Guidelines requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. | |
Special Shareholder Meetings | • In 2020, we amended our by-laws to reduce the ownership threshold required to call a special meeting of shareholders to 15% or more of the voting power of our outstanding stock from 25%. | |
Elimination of | • All of the supermajority voting provisions in our charter were eliminated in 2019. | |
Board Committee Refreshment | • Our Board periodically reviews committee composition and chair positions, seeking the appropriate blend of continuity and fresh perspectives on committees. | |
Annual Majority Vote Director Elections & Mandatory Resignation Policy | • All of our directors are elected annually by our shareholders. • Our directors must receive a majority of the votes cast in uncontested elections to be elected. • We have a director resignation policy that requires a director to tender an irrevocable resignation letter to the Board prior to being nominated, contingent on the director not receiving a majority of the votes cast in an uncontested election and the Board’s acceptance of the resignation. The Governance and Nominating Committee will recommend to the full Board whether to accept the resignation or whether to take other action. | |
Proxy Access | • Our by-laws permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws. |
Board Leadership Structure
We believe that having an independent leader of the Board is important to the Board’s oversight role and decision-making involving corporate strategy, performance, succession, and other critical matters. Under our current Board leadership structure, our Board has leadership that is independent from management by way of an independent Chair. Our CEO is also a member of the Board as a management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. In our view, this board leadership structure gives us an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.
Board, Committee and Individual Director Evaluations
Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluates one-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. New directors undergo the evaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a more in-depth, comprehensive evaluation for each of our directors.
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PROPOSAL 1 — ELECTION OF DIRECTORS
Directors’ Meetings and Attendance
During 2021, the Board met seven times. No director attended less than 75% of the board and standing committee meetings held while he or she was a member of the Board and relevant standing committee. Average board attendance was over 97% in 2021. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives or non-independent directors present. The Chair of the Board presides at these sessions. We expect our directors to attend the Annual Meeting. All directors attended the 2021 Annual Meeting.
Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls, or in-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with shareholders.
Management Meetings and Site Visits
We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makes on-site visits to our businesses to tour the manufacturing facilities and meet face-to-face with company management and employees. These visits serve as an important tool in the Board’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture. In 2021, these types of opportunities for engagement were largely conducted virtually rather than in-person.
Director Orientation and Education
All new directors participate in our director orientation program. New directors meet with senior corporate leaders to review and discuss our businesses, operations, strategy, end markets, governance, internal controls, and culture. We believe that our on-boarding approach, coupled with participation in regular Board and committee meetings, as well as additional exposure to our business through participation in management meetings and site visits, whether virtually or in-person, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.
Our Board also encourages directors to participate annually in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.
Director Independence
Our Board has determined that each of the current members of the Board, except for Richard J. Tobin, who is our CEO, has no material relationship with Dover and satisfies all the criteria for being “independent” members of our Board. This includes the criteria established by the U.S. Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”) listing standards, as well as our standards for classification as an independent director which are available on our website at www.dovercorporation.com. Our Board makes an annual determination of the independence of each nominee for director prior to his or her nomination for re-election. No director may be deemed independent unless the Board determines that he or she has no material relationship with Dover, directly or as an officer, shareholder or partner of an organization that has a material relationship with Dover.
Majority Standard for Election of Directors and Mandatory Resignation Policy
Under our by-laws and corporate governance guidelines, the voting standard in director elections is a majority of the votes cast. Under this majority of the votes cast standard, a director must receive more votes in favor of his or her election than votes against his or her election. Abstentions and broker non-votes do not count as votes cast with respect to a director’s election. In contested director elections (where there are more nominees than available seats on the board), the plurality standard will apply. Under the plurality standard, the nominees who receive the most “for” votes are elected to the Board until all seats are filled.
For an incumbent director to be nominated for re-election, he or she must submit an irrevocable resignation letter. The resignation will be contingent on the nominee not receiving a majority of the votes cast in an uncontested election and on the Board’s acceptance of the resignation. If an incumbent director fails to receive a majority of the votes cast in an uncontested
DOVER CORPORATION – 2022 Proxy Statement 29
PROPOSAL 1 — ELECTION OF DIRECTORS
election, the Governance and Nominating Committee will make a recommendation to our Board concerning whether to accept or reject the resignation or whether other action should be taken. Our Board will act on the resignation within 90 days following certification of the election results, taking into account the committee’s recommendation. The Board will publicly announce its decision and, if the resignation is rejected, the rationale for its decision.
Governance Guidelines and Code of Ethics
Our Board long ago adopted written corporate governance guidelines that set forth the responsibilities of our Board and the qualifications and independence of its members and the members of its standing committees. The Board reviews these guidelines at least annually, in light of evolving best practices, shareholder feedback and the evolution of our business. In 2020, the Board amended the guidelines to require that initial lists of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. In addition, our Board has a long-standing Code of Conduct setting forth standards applicable to all of our companies and their employees, a code of ethics for our CEO and senior financial officers, and charters for each of its standing committees. All of these documents (referred to collectively as “governance materials”) are available on our website at www.dovercorporation.com.
Procedures for Approval of Related Person Transactions
We generally do not engage in transactions in which our senior executive officers or directors, any of their immediate family members or any of our 5% shareholders have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and an amount that exceeds $120,000, it would be subject to review and approval by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are available with the governance materials on our website.
Under the procedures, management determines whether a proposed transaction requires review under the policy and, if so, presents the transaction to the Governance and Nominating Committee. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves or rejects the transaction. If the proposed transaction is immaterial or it is impractical or undesirable to defer the proposed transaction until the next committee meeting, the Chair of the committee decides whether to (i) approve the transaction and report the transaction at the next meeting or (ii) call a special meeting of the committee to review and approve the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve or reject the transaction. No director may participate in the review of any transaction in which he or she is a related person.
Communication with Directors
The Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (“accounting matters”) and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting matters. Such complaints or concerns may be submitted to Dover, care of our Corporate Secretary or through the communications coordinator, an external service provider, by mail, fax, telephone, or via the internet as published on our website. The communications coordinator forwards such communications to Dover without disclosing the identity of the sender if anonymity is requested.
Shareholders and other interested persons may also communicate with our Board and the non-management directors in any of these same manners. Such communications are forwarded to the Chair of the Governance and Nominating Committee.
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PROPOSAL 1 — ELECTION OF DIRECTORS
Shareholder Engagement and History of Board Responsiveness
AnnualShareholder Engagement Program
In 2018,2021, we continued our focus on regularly engaging with our shareholders. We reached out to holders of over 51%approximately 60% of our shares outstanding, and engaged with governance professionals andand/or portfolio managers at investors holding 32%approximately 31% of our shares outstanding. Our stockholdershareholder engagement team consists of senior management from our Legal, Human Resources, and Investor Relations departments and has also included our Chair from time to time. Members of our engagement teamWe also participate in various governance forums with our shareholders and regularly engage with shareholders through industry conferences and meetings.
Our Board continuesWe received feedback from investors on a range of topics, including corporate governance topics such as the right of shareholders to findact by written consent. We are pleased with the feedback it receives from these discussionswe received with investors on the topics we discussed, and look forward to be invaluable. We planongoing engagement with our shareholders in order to continue to incorporate their views into our program of proactive, regular engagementBoard’s decision-making process. We aim to further deepen our relationship with our investors.
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PROPOSAL 1 — ELECTION OF DIRECTORS
have Shareholder Engagement in 2018best-in-class governance and compensation structures at Dover.
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Performance & Long-Term Strategy | • We
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pandemic. | ||
Capital Allocation | • We discussed how our | |
Diversity & Inclusion | • We discussed how we are taking a thoughtful approach to developing a center-led approach to human capital management and diversity and inclusion. • Shareholders expressed appreciation for the new transparency on the sustainability portion of our website regarding workforce demographics (gender, ethnicity, age). • We also discussed the diversity & inclusion goals we set in 2021 related to conducting an engagement survey to establish a baseline measure of inclusivity, and implementing unconscious bias training for employees with direct reports. | |
ESG | • We discussed ESG program, including our recently announced goals to reduce our GHG emissions by 2030,the results of our climate risk assessment and scenario analysis aligned with the TCFD reporting framework, the extensive disclosures available on the sustainability portion of our website, and our SASB and GRI-aligned disclosures. • We also discussed that, in 2022, we plan to continue to make progress in several key priority areas in line with our three-year plan to expand the scope and robustness of our ESG practices and disclosures. | |
Executive Compensation | • Shareholders expressed strong support for the meaningful changes implemented to our executive compensation program in 2020. They expressed appreciation for the additional detail presented in our proxy statement regarding the weighting, nature and performance outcomes for the individual strategic objectives in our AIP, as well as improved disclosure regarding the threshold, target and maximum levels for the financial goals in our AIP. For LTIP awards made in 2020, they also supported the increase in the proportion of awards dedicated to performance shares and the shift to relative TSR from internal TSR as the performance metric for performance shares. In addition, shareholders expressed support for continuing to include the effective oversight and management of ESG matters as a strategic objective for our CEO under the AIP and welcomed our recent adoption of a comprehensive clawback policy. | |
Corporate Governance | • Our shareholders continued to express their broad support for our governance practices and shareholder rights, including special meeting right, use of annual director elections, and independent Board leadership structure, and thoughtful and active refreshment process.
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History of Board Responsiveness
We are committed to being responsive to our shareholders as demonstrated by the number of changes we have made over the years based on their input. In direct response to shareholder feedback, over the past 8 years, Dover has adopted and amended our special meeting right, adopted proxy access, implemented meaningful changes to our executive compensation program, removed all our super-majority voting provisions in our charter, adopted a robust clawback policy, and enhanced our disclosures to investors. The table below highlights many of the changes to our governance structures and compensation program that have been implemented over the past several years informed by shareholder feedback. These changes specifically address shareholders’ areas of focus and input gathered through our extensive shareholder engagements and outreach efforts.
Year | % of Outstanding Shares | Actions in Response to Shareholder Feedback | ||||||
2022 | Lead-up to 2022 AGM: Ongoing | ✓ Currently engaging with shareholders on corporate governance, executive compensation and sustainability ahead of the 2022 Annual Meeting | ||||||
2021 | 59% / 31% | ✓ Continued to maintain a refreshed and diverse board by appointing an additional female director ✓ Made several ESG accomplishments including: ✓ Announcing goals to reduce our GHG emissions by 2030 ✓ Undertaking a climate risk assessment aligned with the TCFD reporting framework ✓ Setting new diversity & inclusion goals ✓ Establishing a working group of operating companies with a goal of embedding sustainability considerations into product development | ||||||
2020 | Winter: 65% / 15% Lead-up to 2020 AGM: 51% / 12% Fall: 59% / 38% | ✓ Implemented for 2020 executive compensation program: ✓ Increased proportion of LTIP dedicated to performance shares and shifted from internal TSR to relative TSR as metric for performance shares ✓ Reduced maximum payout ceiling from 400% to 300% in LTIP ✓ Reduced ownership threshold required to call a special meeting of shareholders to 15% from 25% ✓ Adopted a diversity search policy for external director and CEO searches conducted by third-party search firms ✓ Made several ESG accomplishments including: ✓ A robust materiality assessment to help identify go-forward focus areas ✓ The launch of the sustainability portion of our website ✓ Publication of SASB and GRI indices ✓ Release of an “investor tear sheet” covering key ESG highlights ✓ Increased transparency into workforce demographics | ||||||
2019 | Lead-up to 2019 AGM: 63% / 37% Fall: 63% / 41% | ✓ Achieved removal of all supermajority provisions through submission of management proposal and comprehensive retail investor campaign ✓ Enhanced disclosure regarding individual strategic objectives and financial metrics in AIP ✓ Adopted comprehensive clawback policy ✓ Incorporated ESG oversight into CEO’s individual strategic objectives in AIP | ||||||
2018 | 51% / 32% | ✓ Put forth management proposal to remove supermajority voting provisions alongside comprehensive campaign with retail investors to build support – did not pass | ||||||
2017 | 53% / 33% | ✓ Updated AIP to 60% financial metrics / 40% strategic objectives from 50% / 50% ✓ Put forth management proposal to remove supermajority voting provisions – did not pass | ||||||
2016 | 60% / 28% | ✓ Adoption of proxy access ✓ Put forth management proposal to provide shareholders with written consent right – did not pass | ||||||
2015 | 39% / 24% | ✓ Launch of governance-focused shareholder engagement program | ||||||
2014 | - / - | ✓ Adoption of special meeting right |
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SustainabilityEnvironmental, Social, and Governance Oversight (ESG)
Throughout our history, our commitment to corporate responsibility and sustainability has created significant value for our shareholders and stakeholders. Across our portfolio of businesses and our team of employees, we remain focused on operating and innovating sustainably to help meet the goals of our customers, realize the full potential of our employees through a culture that supports and values their efforts, and make the communities in which we operate stronger. For more information on our initiatives and accomplishments, please visit https://www.dovercorporation.com/sustainability/overview.
Materiality Analysis
We conducted a materiality analysis in 2020 to identify the ESG issues most important to our business and stakeholders. Please see below for the specific areas of focus identified through the analysis. The findings from the materiality analysis were used by our Sustainability Steering Committee, comprised of our corporate and business leaders, to identify the ESG topics that are committedmost critical to creating economic value for shareholders by developing products designedthe company. These ESG areas of focus will guide our sustainability strategy moving forward as we implement a three-year ESG plan. For each sustainability topic, we are applying our resources, expertise, and innovation to help our customers meet their sustainability goals in response to evolving regulatoryimprove outcomes and environmental standards. We also foster sustainable business practices across our own businesses in order to reduce our greenhouse gas emissions and energy consumption.drive results.
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Governance Oversight of ESG
Our governance framework serves as a strong foundation to promote the long-term interests of our shareholders. Our Board oversees our long-term strategic development and enterprise risk, including ESG risks. The Board’s oversight spans a wide array of ESG issues, including those related to climate change, health and safety, diversity and inclusion, ethics and compliance, and long-term environmental protection. As part of its continued focus on sustainability, our Board incorporates ESG oversight into the CEO’s annual performance and compensation evaluation as one of the CEO’s strategic objectives. The Board also has established a comprehensive enterprise risk management process to identify and manage risks, including any risks related to environmental and social issues.
Additionally, our cross-functional Sustainability Steering Committee was established in 2020 to manage ESG issues, meets at least four times per year, and provides an update to the Board at least annually. The Committee is responsible for guiding our sustainability strategy, initiatives, target-setting, performance, and reporting.
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Progress Toward Goals In 2021, we made progress on a number of fronts in line with our three-year ESG plan. We formalized our commitment to science-based emissions targets by announcing a goal of reducing scope 1 and scope 2 market-based GHG emissions of 30 percent by 2030 (from a 2019 baseline year) and reducing scope 3 GHG emissions of 15 percent by 2030 (from a 2019 baseline year). We also conducted a TCFD-aligned climate risk assessment and scenario analysis and recently published a summary of the results on our website to further improve transparency regarding our ESG areas of focus. Also, as part of our efforts around increasing our focus on developing products that help our customers meet their sustainability goals, we engaged with some of our operating companies during 2021 regarding innovation for sustainable products. Finally, we announced new goals regarding diversity & inclusion and TRIR reduction.
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Ournon-employee directors receive annual compensation in an amount our Board sets from time to time. The directors’ annual compensation is payable partly in cash and partly in common stock in an allocation our Board may adjust from time to time. If any director serves for less than a full calendar year, the compensation to be paid to that director for the year will bepro-rated as deemed appropriate by theour Compensation Committee.
Our Board has adopted a policy that directors are expected to hold at any time a number of shares at least equal to the aggregate number of shares they received as the stock portion of their annual retainer during the past five years, net of an assumed 30% tax rate.
FOR |
Annual retainer of |
Audit Committee Chair — additional annual cash retainer of $30,000 |
Compensation Committee Chair |
Governance and $15,000 |
Board Chair — additional annual retainer of |
Under our 2021 LTIP, eachnon-employee director can elect to defer the receipt of 0%, 50%, or 100% of the equity compensation payable in a year until termination of services as anon-employee director. Shares deferred are converted into deferred stock units representing the right to receive one share of our common stock for each unit held at the end of the deferral period. Dividend equivalents are credited on deferred stock units and will be distributed in cash at the time that shares are distributed in settlement of deferred stock units. Messrs. Francis, Johnston, Spiegel, Tobin, Todd, and Wagner and Ms.Mses. Graham and DeHaas elected to defer receipt of their 20182021 equity compensation and received deferred stock units.
The table below sets forth the compensation paid to our directors for services in 2018.2021.
NAME
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FEES EARNED OR PAID IN CASH ($)(1)
| STOCK AWARDS ($)(1)(2)
| TOTAL ($)
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PETER T. FRANCIS | 120,000 | 129,975 | 249,975 | |||
H. JOHN GILBERTSON, JR | 60,000 | 54,127 | 114,127 | |||
KRISTIANE C. GRAHAM | 120,000 | 129,975 | 249,975 | |||
MICHAEL F. JOHNSTON | 245,000 | 154,970 | 399,970 | |||
RICHARD K. LOCHRIDGE | 125,000 | 129,975 | 254,975 | |||
ERIC A. SPIEGEL | 127,500 | 129,975 | 257,475 | |||
MICHAEL B. STUBBS | 60,000 | 63,177 | 123,177 | |||
RICHARD J. TOBIN | 40,000 | 49,904 | 89,904 | |||
STEPHEN M. TODD | 131,250 | 129,975 | 261,225 | |||
STEPHEN K. WAGNER | 130,000 | 129,975 | 259,975 | |||
KEITH E. WANDELL | 127,500 | 129,975 | 257,475 | |||
MARY A. WINSTON | 127,500 | 129,975 | 257,475 |
NAME | FEES EARNED OR PAID IN CASH ($)(1) | STOCK AWARDS ($)(2) | TOTAL ($) | |||||||||
DEBORAH L. DEHAAS(3) |
| 106,521 |
|
| 133,075 |
|
| 239,595 |
| |||
H. JOHN GILBERTSON, JR |
| 120,000 |
|
| 150,078 |
|
| 270,078 |
| |||
KRISTIANE C. GRAHAM |
| 120,000 |
|
| 150,078 |
|
| 270,078 |
| |||
MICHAEL F. JOHNSTON |
| 250,000 |
|
| 189,983 |
|
| 439,983 |
| |||
ERIC A. SPIEGEL |
| 135,000 |
|
| 150,078 |
|
| 285,078 |
| |||
STEPHEN M. TODD |
| 150,000 |
|
| 150,078 |
|
| 300,078 |
| |||
STEPHEN K. WAGNER |
| 135,000 |
|
| 150,078 |
|
| 285,078 |
| |||
KEITH E. WANDELL |
| 140,000 |
|
| 150,078 |
|
| 290,078 |
| |||
MARY A. WINSTON |
| 120,000 |
|
| 150,078 |
|
| 270,078 |
|
(1) | Amounts include the standard annual cash retainer, the Chair’s additional cash retainer, and the additional annual cash retainer for committee Chairs. |
DOVER CORPORATION –2019 Proxy Statement 32
PROPOSAL 1 — ELECTION OF DIRECTORS
(2) | On November 15, |
(3) | Ms. DeHaas was first elected to the Board on February 11, 2021 and accordingly received |
Our Compensation Committee reviews our non-employee director compensation policy biennially and proposes changes to the Board, as appropriate. In reviewing the non-employee director compensation policy in 2022, our Compensation Committee
DOVER CORPORATION – 20192022 Proxy Statement 3335
worked with its independent compensation consultant to assess the competitiveness of our non-employee director compensation policy based on benchmark information from peer companies and relevant compensation surveys. Based on its review, our Compensation Committee proposed and the Board adopted the following change to our non-employee director compensation policy to be effective in 2022: an increase by $15,000 of the annual retainer for non-employee directors, payable in common stock.
DOVER CORPORATION – 2022 Proxy Statement 36
Proposal 2 — Ratification of Appointment of Independent Registered Public Accounting Firm
The Audit Committee has appointed the independent registered public accounting firm of PwC to audit the annual accounts of Dover and its subsidiaries for 2019.2022. PwC has audited the financial statements for the Company since 1995. Representatives of PwC are not expected to be present at the Annual Meeting.
Although shareholder ratification of PwC’s appointment is not required by Dover’sby-laws or otherwise, our Board is submitting the ratification of PwC’s appointment for the year 20192022 to Dover’s shareholders. If the shareholders do not ratify the appointment of PwC, the Audit Committee will reconsider whether or not to retain PwC as Dover’s independent registered public accounting firm for the year 20192022 but will not be obligated to terminate the appointment. Even if the shareholders ratify the appointment of PwC, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in Dover’s interests.
THE BOARD RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT
OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2019.2022.
DOVER CORPORATION –20192022 Proxy Statement 3437
PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee is composed of directors who, in the opinion of the Board, are independent and financially literate under NYSE rules and qualify as audit committee financial experts as defined by the SEC. Information concerning the credentials of the Audit Committee members can be found in the section of this proxy statement entitled “Proposal 1 — Election of Directors”.
The Audit Committee operates under a written charter adopted by the Board and available on Dover’s website. The Audit Committee assists the Board in overseeing the quality and integrity of Dover’s financial statements, compliance with legal and regulatory requirements, the qualifications, performance and independence of the independent auditors, and the performance of the internal audit function.
Among other things, the Audit Committee appoints the Company’s independent auditors and is directly involved in the selection of the lead audit engagement partner, discusses with the internal audit function and independent auditors the overall scope and plans for their respective audits, reviews the Company’s accounting policies and system of internal controls, reviews significant financial transactions, discusses with management and with the Board processes relating to risk management,pre-approves audit and permissiblenon-audit services provided by the independent auditors, and approves all fees paid to the independent auditors for such services.
For 2018, the Audit Committee engaged the independent registered public accounting firm PwC as Dover’s independent auditor. In selecting PwC, the Audit Committee considered, among other things: the experience and qualifications of the lead audit partner and other senior members of the PwC team; PwC’s historical performance on Dover’s audit and the quality of its communications with the Audit Committee; the results of the most recent internal quality control review or Public Company Accounting Oversight Board (“PCAOB”) inspection; PwC’s independence; its reputation for integrity and competence in the fields of accounting and auditing; the appropriateness of its fees; and its tenure as Dover’s independent auditors, including its understanding of the Company’s global businesses, accounting policies and practices, and internal control over financial reporting.
The Audit Committee discussed with PwC the overall scope and plans for the audit of Dover’s 2018 financial statements. The Audit Committee met with PwC, with
and without management present, to discuss the results of PwC’s examination, their assessment of internal controls and the overall quality of financial reporting.
The Audit Committee reviewed and discussed, with both the management of Dover and PwC, Dover’s 2018 audited financial statements, including a discussion of critical accounting policies, the quality, not just the acceptability, of the accounting principles followed, the reasonableness of significant judgments reflected in such financial statements and the clarity of disclosures in the financial statements. The Audit Committee met a total of nine times in 2018 and 2019 to discuss 2018 quarterly and full-year financial results and related disclosures.
The Audit Committee has received the written disclosures and the Rule 3526 letter from PwC required by the applicable requirements of PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and discussed with PwC its independence, including the impact of any relationships or permittednon-auditing services on PwC’s independence. The Audit Committee also discussed with PwC the matters required to be discussed under PCAOB Auditing Standard No. 1301. The Audit Committee has also received written materials addressing PwC’s internal control procedures and other matters required by NYSE listing standards.
Based upon the review and discussions referred to above, the Audit Committee recommended that the audited financial statements for the year ended December 31, 2018 be included in Dover’s Annual Report on Form10-K.
Audit Committee:
Stephen M. Todd (Chair)
H. John Gilbertson, Jr.
Eric A. Spiegel
Stephen K. Wagner
This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent we specifically incorporate this report by reference, and shall not otherwise be deemed filed under such Acts.
The Audit Committee is composed of directors who, in the opinion of the Board, are independent and financially literate under NYSE rules and qualify as audit committee financial experts as defined by the SEC. Information concerning the credentials of the Audit Committee members can be found in the section of this proxy statement entitled “Proposal 1 — Election of Directors”. The Audit Committee operates under a written charter adopted by the Board and available on Dover’s website. The Audit Committee assists the Board in overseeing the quality and integrity of Dover’s financial statements, compliance with legal and regulatory requirements, the qualifications, performance and independence of the independent auditors, and the performance of the internal audit function. Among other things, the Audit Committee appoints the Company’s independent auditors and is directly involved in the selection of the lead audit engagement partner, discusses with the internal audit function and independent auditors the overall scope and plans for their respective audits, reviews the Company’s accounting policies and system of internal controls, reviews significant financial transactions, discusses with management and with the Board processes relating to risk management, pre-approves audit and permissible non-audit services provided by the independent auditors, and approves all fees paid to the independent auditors for such services. For 2021, the Audit Committee engaged the independent registered public accounting firm PwC as Dover’s independent auditor. In selecting PwC, the Audit Committee considered, among other things: the experience and qualifications of the lead audit partner and other senior members of the PwC team; PwC’s historical performance on Dover’s audit and the quality of its communications with the Audit Committee; the results of the most recent internal quality control review or Public Company Accounting Oversight Board (“PCAOB”) inspection; PwC’s independence; its reputation for integrity and competence in the fields of accounting and auditing; the appropriateness of its fees; and its tenure as Dover’s independent auditors, including its understanding of the Company’s global businesses, accounting policies and practices, and internal control over financial reporting. The Audit Committee discussed with PwC the overall scope and plans for the audit of Dover’s 2021 financial statements. The Audit Committee met with PwC, with and without management present, to discuss the results of PwC’s examination, their assessment of internal controls and the overall quality of financial reporting. The Audit Committee reviewed and discussed, with both the management of Dover and PwC, Dover’s 2021 audited financial statements, including a discussion of critical accounting policies, the quality, not just the acceptability, of the accounting principles followed, the reasonableness of significant judgments reflected in such financial statements and the clarity of disclosures in the financial statements. The Audit Committee met a total of eight times in 2021 and 2022 to discuss 2021 quarterly and full-year financial results and related disclosures. The Audit Committee has received the written disclosures and the Rule 3526 letter from PwC required by the applicable requirements of PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and discussed with PwC its independence, including the impact of any relationships or permitted non-auditing services on PwC’s independence. The Audit Committee also discussed with PwC the matters required to be discussed under PCAOB Auditing Standard No. 1301. The Audit Committee has also received written materials addressing PwC’s internal control procedures and other matters required by NYSE listing standards. Based upon the review and discussions referred to above, the Audit Committee recommended that the audited financial statements for the year ended December 31, 2021 be included in Dover’s Annual Report on Form 10-K. Audit Committee: Stephen M. Todd (Chair) Deborah L. DeHaas H. John Gilbertson, Jr. Eric A. Spiegel Stephen K. Wagner This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent we specifically incorporate this report by reference, and shall not otherwise be deemed filed under such Acts. |
DOVER CORPORATION –20192022 Proxy Statement 3538
PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Fees Paid to Independent Registered Public Accounting Firm
Fees paid to, or accrued for, PwC for services to us and our subsidiaries for 20182021 and 20172020 (including reimbursable expenses) were as follows:
2018 | 2017 | 2021 | 2020 | |||||||||||||
AUDIT FEES | $
| 9,658,287
|
| $
| 12,169,363
|
| $ | 7,487,600 | $ | 7,697,324 | ||||||
AUDIT-RELATED FEES | $
| 400,000
|
| $
| 400,000
|
| $ | 55,870 | $ | 41,880 | ||||||
TAX FEES | $
| 603,942
|
| $
| 283,394
|
| $ | 182,323 | $ | 173,305 | ||||||
ALL OTHER FEES | $
| 4,500
|
| $
| 3,600
|
| $ | 900 | $ | 12,476 | ||||||
|
|
|
| |||||||||||||
TOTAL |
$ |
10,666,729 |
|
$ |
12,856,357 |
| $ | 7,726,693 | $ | 7,924,985 |
Audit Fees. Audit fees include fees for audit or review services in accordance with generally accepted auditing standards of our consolidated financial statements (including internal control over financial reporting), statutory and subsidiary audits and review of documents filed with the SEC. In 2018 and 2017, audit fees include fees for audit and review services in connection with thespin-off of Apergy from Dover, including associated filings with the SEC.
Audit-Related Fees. Audit-related fees include fees for assurance and related services that are reasonably related to the audit of our financial statements, such as due diligence services pertaining to potential business acquisitions and dispositions and consultations concerning the accounting and disclosure treatment of events and the impact of final or proposed rules and standards. In 2018 and 2017, audit-related fees include fees for services in connection with our adoption of new accounting standards.including system implementation assessments.
Tax Fees. Tax fees include fees for services that are performed by professional tax staff other than in connection with the audit. These services include tax compliance, consulting and advisory services.
All Other Fees. Other fees include fees fornon-audit services not listed above that do not impair the independence of the auditor and are not prohibited by the SEC or PCAOB.
Pre-Approval of Services Provided by Independent Registered Public Accounting Firm
Consistent with its charter and applicable SEC rules, our Audit Committeepre-approves all audit and permissiblenon-audit services provided by PwC to us and our subsidiaries. With respect to certain services which PwC has traditionally provided, the Audit Committee has adopted specificpre-approval policies and procedures. In developing these policies and procedures, the Audit Committee considered the need to ensure the independence of PwC while recognizing that, in certain situations, PwC may possess the expertise and be in the best position to advise us and our subsidiaries on issues and matters other than accounting and auditing.
The policies and procedures adopted by the Audit Committee allow thepre-approval by the Audit Committee of permissible audit-related services,non-audit-related services and tax services. Under the policies and procedures,pre-approval is generally provided for up to one year and any generalpre-approval is detailed as to the particular services or category of services and is subject to a specific budget for each of them. The policies and procedures require that any other services be expressly and separately approved by the Audit Committee prior to such services being performed by the independent auditors. In addition,pre-approved services which are expected to exceed the budgeted amount included in a generalpre-approval require separate, specificpre-approval. For each proposed service, the independent auditors and management are required to provide detailed information to the Audit Committee at the time of approval. The Audit Committee considers whether eachpre-approved service is consistent with the SEC’s rules and regulations on auditor independence.
DOVER CORPORATION –2019 Proxy Statement 36
PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
All audit-related andnon-audit-related services of PwC during 20182021 listed above under “Fees Paid to Independent Registered Public Accounting Firm” werepre-approved specifically or pursuant to the procedures outlined above. With respect to any tax services provided by PwC, PwC provided to the Audit Committee the communications required under PCAOB Rule 3524.
DOVER CORPORATION – 20192022 Proxy Statement 3739
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) describes Dover’s executive compensation programs in 2018. It describes Dover’s pay philosophy, how the Board, the Compensation Committee and the CEO have applied that philosophy to Dover’s executives and the process the Compensation Committee uses to make executive pay decisions, assess performance goals and results, and implement updates to our compensation program. On May 1, 2018, Mr. Tobin becameprogram and how it operates for our new President and CEO, following Mr. Livingston’s retirement. There are five current officers who are a NEO, plus Mr. Livingston:NEOs. Our NEOs for 2021 are:
NAMED EXECUTIVE OFFICERS | ||
RICHARD J. TOBIN | President & CEO | |
BRAD M. CEREPAK |
| |
| Senior Vice President & CFO | |
GIRISH JUNEJA | Senior Vice President & Chief Digital Officer | |
IVONNE M. CABRERA | Senior Vice President & General Counsel | |
KIMBERLY K. BORS | Senior Vice President & Chief Human Resource Officer |
Our compensation programs areprogram is based on a pay-for-performance philosophy and is designed to supportincent executives to achieve financial and strategic goals that are aligned with the primary objectiveCompany’s long-term business strategy and the creation of creating sustained, long-term value for our shareholders. To achieve this objective, management is required to execute Dover’s strategy, resulting in sustainable revenue and earnings growth. The Compensation Committee believes that a strongpay-for-performance philosophy aligns our executives’ goals with long-term value creation for our shareholders.
Dover Business Overview
Dover is a diversified global manufacturer delivering innovative equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services through three operating segments: Engineered Systems, Fluids, and Refrigeration2021 Performance & Food Equipment. Our entrepreneurial business model encourages, promotes, and fosters deep customer engagement and collaboration, which has led to Dover’s well-established and valued reputation for providing superior customer service and industry-leading product innovation. Our businesses are aligned in three segments structured around our key end markets and are designed to support focused growth strategies. Our segment structure also allows us to leverage Dover’s scale and channel presence while capitalizing on productivity initiatives.
2018 Company Performance HighlightsResults
In 2018, we:
Generated consolidated revenue from continuing operations of $7.0 billion, reflecting2021, despite the COVID-related challenges we continued to face, including increased material, labor and logistics costs, we delivered strong financial results, made advancements in organic growth of 3.7% for the year.
Delivered diluted EPS from continuing operations of $3.89, comparedinvestments and productivity initiatives, and deployed capital in a disciplined manner, in keeping with EPS of $4.73 for 2017. The decrease was largely driven by net benefits realized in 2017 from dispositions and the Tax Reform Act.
Completed thetax-freespin-off of our upstream energy businesses into a standalone, publicly traded company named Apergy.return-seeking strategic priorities.
Generated revenue of $7.9 billion, up 18% (+15% organic) compared to the prior year |
✓ | Increased GAAP earnings by 64% and adjusted earnings by 35% |
✓ | Increased GAAP earnings per share by 65% and adjusted earnings per share by 35% |
✓ | Generated free cash flow of $944.4 million, an increase of $5.3 million compared to the prior year, representing 11.9% of revenue. Cash flow provided by operating activities was $1,115.9 million. |
✓ | Continued to evolve our operating model to include center-led value capture from digital opportunities, and continued to invest in growth and productivity initiatives, including automation, capacity expansion, and the implementation of common corporate systems and measurement tools. |
✓ | Increased our quarterly dividend, |
Completed the acquisition of Ettlinger, a leading manufacturer of filtering solutions for the plastics recycling industry, which enhances our ability to serve the Process Solutions end market within our Fluids segment.
Executed a rightsizing plan that is expected to deliver $136 million of annualizedpre-tax earnings byyear-end 2019, of which $34 million will be reinvested in high-return growth initiatives.
DOVER CORPORATION –2019 Proxy Statement 38
COMPENSATION DISCUSSION AND ANALYSIS
While our financial performance was strong in 2018, our EBIT margins were below our expectations. As a result, our NEOs’ annual bonuses were lower than those earned for 2017. With respect to long-term compensation, Mr. Spurgeon, President and CEO of Dover Fluids, was the only NEO who received a payout on the performance share award for the 2016-2018 performance period. Based on his business unit’s iTSR performance over that period, his payout was below target.
Components of Compensation Aligned with Company Performance
In light of the strong support from our shareholders for our compensation program structure and its close alignment with our pay for performance philosophy, our 2018 executive compensation program structure was generally unchanged.
✓ |
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| including contingent consideration
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DOVER CORPORATION – 20192022 Proxy Statement 3940
COMPENSATION DISCUSSION AND ANALYSIS
2018 Compensation Drivers and OutcomesSuccess on Key Metrics (2019-2021)
The primary elements
(1) | Definitions and reconciliations ofnon-GAAP measures are included at the end of this proxy statement. |
(2) | Source: Capital IQ |
2021 Pay Decisions Align with Dover’s Performance
Our compensation program structure is designed to align pay outcomes with our philosophy include a clearshareholders’ experience by emphasizing variable, at-risk pay for our management team, including the NEOs, through our AIP and long-term incentive program.
For 2021, our pay decisions and outcomes were consistent with our pay-for-performance philosophy. Our financial performance strategy, an emphasis on incentive-driven paywas strong in 2021, and we exceeded the financial performance target under our AIP. In addition, our NEOs made significant progress against their pre-defined individual strategic objectives as evaluated by our Compensation Committee under our AIP. Consistent with our value creation over the three-year performance period of 2019-2021, the performance shares for that period, which vested at the end of 2021 and were based on metrics that align with value creationour historic internal TSR metric, had a payout percentage of 300% for our shareholders and objectives that support our strategy. The following are key elements of our program:NEOs.
DOVER CORPORATION – 2022 Proxy Statement 41
Financial metrics that are clearly linked to the creation of shareholder value: earnings from continuing operations, revenue, and iTSR (increased enterprise value as measured by EBITDA growth plus free cash flow generation).COMPENSATION DISCUSSION AND ANALYSIS
Focus on our business strategy to ensure our long-term compensation program aligns the interests of our executives with those of our shareholders by placing an emphasis on performance-based stock compensation.
An annual review of the level of compensation and the components of our programs.
A reference to the median of our peer group for total direct compensation, with consideration for internal pay equity, sustained performance, specific responsibilities, and experience with comparable market talent.
Total compensation opportunities designed so that the large majority of compensation is based on business performance.
An annual cash bonus plan designed to reward annual financial performance as well as attainment of strategic objectives for the current year that the Board believes will assure the long-term success of Dover.
Executive benefits and programs that are consistent with those offered to other employees. We provide substantially no executive perquisites, nor do we own or operate any corporate aircraft.
2018Say-on-Pay AdvisorySay on Pay Vote Results and Shareholder OutreachEngagement
93% Say on Pay support | 60% Shares Outstanding Contacted | 31% Shares Engaged |
Our Board has a strong history of engaging with shareholders and soliciting feedback on a range of topics, including our executive compensation program. Historically, our program has received strong shareholder support as expressed during our 96%one-on-one engagement discussions with shareholders and through our Say on Pay support | 51%Shares Outstanding Contacted | 32% Shares Engagedvote levels.
At our 2021 annual meeting, approximately 93% of the voting shareholders approved the compensation of the NEOs. At our 2020 annual meeting, over approximately 96% of the voting shareholders approved the compensation of the NEOs. In 2018, our executive compensation program received 96% approval from our shareholders, which was the same level of support received in 2017, reflecting shareholders’ continuing approval of our compensation program. In 2018,2021, we continued our shareholder engagement program. We reached out to holders of over 51%approximately 60% of our outstanding shares and engaged with governance professionals and/or portfolio managers atof investors holding approximately 32%31% of our outstanding shares. In addition to the governance topics detailed earlier in this proxy statement, we had thoughtful discussions with our shareholders regarding our compensation program. Our investors generallyShareholders told us they believe Dover’sour pay practices are aligned with ourpay-for-performance philosophy. We also sought shareholder feedback on Mr. Tobin’s compensation arrangements after his appointment, including hisone-time make-whole award. Our shareholders indicated they were supportive of the structure because it ensured a smooth transition and the Board’s ability to hire a highly qualified candidate. The Board appreciated the feedback it received, particularly regarding shareholder opinions on Mr. Tobin’s compensation arrangements, our metrics and the rigor of our target selection. The Compensation Committee will continue to consider this feedback from shareholders, as well as the results from future shareholder advisory votes, in its ongoing evaluation of executive compensation programs and practices at Dover.
DOVER CORPORATION – 20192022 Proxy Statement 4042
COMPENSATION DISCUSSION AND ANALYSIS
Dover’s Alignment with Leading Compensation Governance Practices
WHAT WE DO
|
| |||||||||
✓ The majority of target NEO pay opportunity is performance based
✓
✓
✓ Compensation program includes ESG objectives | ||||||||||
✓ All long-term incentives are paid in stock, not cash
✓ Executives must hold significant amounts of Dover stock: five-times salary for the CEO, three-times for other NEOs
✓ All long-term incentives are earned or vest over three years
✓ Change in control
✓ Comprehensive clawback policy | ||||||||||
✓ Executives participate in benefit and employee programs on the same basis as other Dover employees
✓
✓ Annual compensation risk assessment
|
WHAT WE DON’T DO | ||||
✗ No tax gross ups
✗ No repricing, reloads, or exchanges of SSARs
✗ No SSARs granted below fair market value
✗ No hedging or pledging of Dover securities by executives, including margin loans
✗ No dividends are paid on performance shares or
✗ No special executive retirement arrangements
✗ No substantial executive perquisites, nor do we own or operate any corporate aircraft |
DOVER CORPORATION – 20192022 Proxy Statement 4143
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Process: Aligning Business Strategy and PerformancePrinciples
Guiding Principles for Dover’s Executive Compensation Program
Dover’s executive compensation programs are designed to do
Based on these principles, these were the following:key elements of our program in 2021:
✓ | Financial metrics that are clearly linked to the creation of shareholder value: adjusted earnings and three-year relative TSR. | |||
✓ Focus executives on consistent long-term value creation and a balanced capital allocation program to outperform our investors’ alternative investment choices in our industry.
✓ | A focus on our business strategy to ensure our long-term compensation program aligns the interests of our executives with those of our shareholders by placing an emphasis on performance-based stock compensation. |
✓ Attract and retain highly qualified executives to look after our shareholders’ interests and manage our businesses.
✓ | An annual review by our Compensation Committee of executive compensation levels and the components of our program. |
✓ |
median of our peer group for total direct compensation, with consideration for internal pay equity, sustained performance, specific responsibilities, and experience with comparable market talent. |
✓ | Total compensation opportunities designed so that the large majority of compensation is variable and at-risk based on financial, strategic, operational, and share price performance. |
✓ | An annual cash bonus plan (the AIP) designed to reward annual financial performance and the attainment of well-defined strategic objectives that the Board believes will assure the long-term success of Dover. |
✓ | Executive benefits and programs that are consistent with those offered to other employees. We provide substantially no executive perquisites, nor do we own or operate any corporate aircraft. |
DOVER CORPORATION – 2022 Proxy Statement 44
COMPENSATION DISCUSSION AND ANALYSIS
Setting Executive Compensation — Roles
The process for determining our compensation program structure and payouts involves the dedicated participation of theour Compensation Committee, the independent directors of the Board, the CEO, and theour Compensation Committee’s independent consultant. The roles of each in making compensation decisions are:
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DOVER CORPORATION – 20192022 Proxy Statement 4245
COMPENSATION DISCUSSION AND ANALYSIS
Setting Executive Compensation – Timeline
The process for making executive compensation decisions for 20182021 began with goal setting at the beginning of the year and concluded with the actual compensation payout decisions in early 2019. In 2018, the process also took our CEO transition into consideration.2022. As described below, this year-long process integrates key factors, such as Dover’s business strategy, our annual budget, and market compensation data.
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DOVER CORPORATION – 20192022 Proxy Statement 4346
COMPENSATION DISCUSSION AND ANALYSIS
Executive Compensation Program Peer GroupingGroup
For assessing executive pay programs and levels, the Compensation Committee selected a group of companies that are similar to Dover in terms of end markets, complexity, revenues and market capitalization. In 2018,2021, with the help of its independent consultant, the Compensation Committee approvedreviewed the peer group and made no changes to the peer group to better match Dover’s end markets, complexity, revenue and market capitalization after thespin-off of Apergy. As a result, 3M Company, Weatherford International plc and Pentair plc were removed from the peer group. Corning Incorporated, Stanley Black & Decker, Inc. andSnap-on Incorporated were added to the peer group.
IN USD MILLIONS | FINANCIAL CONSIDERATIONS | QUALITATIVE CONSIDERATIONS | ||||||||||||||||||||||||||||||||||||
FINANCIAL CONSIDERATIONS (IN USD MILLIONS) | QUALITATIVE CONSIDERATIONS | |||||||||||||||||||||||||||||||||||||
COMPANY
|
2018
|
2018 MARKET CAP(1)
|
INDUSTRY |
>20% GLOBAL REVENUES
|
DOVER-LIKE STRUCTURE
|
SAME ANALYST COVERAGE(2)
| 2021 REVENUE | 2021 MARKET CAP(1) | INDUSTRY | >20% GLOBAL REVENUES | DOVER-LIKE STRUCTURE | SAME ANALYST COVERAGE(2) | ||||||||||||||||||||||||||
CARLISLE COMPANIES | $ | 4,480 | $ | 5,985 |
Industrial Conglomerates
| ✗ | ✗ | $ | 4,810 | $ | 12,932 | Industrial Conglomerates | ✗ | ✗ | ||||||||||||||||||||||||
COLFAX CORPORATION | $ | 3,667 | $ | 2,449 |
Industrial Machinery
| ✗ | ✗ | ✗ | $ | 3,854 | $ | 7,115 | Industrial Machinery | ✗ | ✗ | ✗ | ||||||||||||||||||||||
CORNING INCORPORATED | $ | 11,290 | $ | 24,180 |
Electrical Equipment
| ✗ | ✗ | $ | 14,082 | $ | 31,772 | Electrical Equipment | ✗ | ✗ | ||||||||||||||||||||||||
EATON CORPORATION | $ | 21,609 | $ | 29,757 |
Electrical Equipment
| ✗ | ✗ | ✗ | $ | 19,628 | $ | 68,886 | Electrical Equipment | ✗ | ✗ | ✗ | ||||||||||||||||||||||
EMERSON ELECTRIC CO. | $ | 17,408 | $ | 37,413 |
Electrical Equipment
| ✗ | ✗ | ✗ | $ | 18,236 | $ | 55,308 | Electrical Equipment | ✗ | ✗ | ✗ | ||||||||||||||||||||||
FLOWSERVE CORPORATION | $ | 3,833 | $ | 4,975 |
Machinery
| ✗ | ✗ | $ | 3,541 |
| $ | 3,986 |
| Machinery | ✗ | ✗ | ||||||||||||||||||||||
FORTIVE CORPORATION | $ | 6,453 | $ | 22,596 |
Industrial
| ✗ | ✗ | ✗ | $ | 5,255 | $ | 27,356 | Industrial Machinery | ✗ | ✗ | ✗ | ||||||||||||||||||||||
ILLINOIS TOOL WORKS INC. | $ | 14,768 | $ | 42,036 |
Machinery
| ✗ | ✗ | ✗ | $ | 14,455 |
| $ | 77,466 |
| Machinery | ✗ | ✗ | ✗ | ||||||||||||||||||||
INGERSOLL-RAND PLC | $ | 15,668 | $ | 22,411 |
Machinery
| ✗ | ✗ | ✗ | $ | 5,152 |
| $ | 25,217 |
| Machinery | ✗ | ✗ | ✗ | ||||||||||||||||||||
PARKER-HANNIFIN CORPORATION | $ | 14,302 | $ | 19,739 |
Machinery
| ✗ | ✗ | $ | 14,348 |
| $ | 40,883 |
| Machinery | ✗ | ✗ | ||||||||||||||||||||||
ROCKWELL AUTOMATION INC. | $ | 6,666 | $ | 18,099 |
Electrical Equipment
| ✗ | ✗ | $ | 6,997 | $ | 40,471 | Electrical Equipment | ✗ | ✗ | ||||||||||||||||||||||||
ROPER INDUSTRIES INC. | $ | 5,191 | $ | 27,566 |
Industrial Conglomerates
| ✗ | ✗ | ✗ | $ | 5,778 | $ | 51,884 | Industrial Conglomerates | ✗ | ✗ | ✗ | ||||||||||||||||||||||
SNAP-ON INCORPORATED | $ | 4,070 | $ | 8,090 |
Industrial | ✗ | $ | 4,602 | $ | 11,530 | Industrial Machinery | ✗ | ||||||||||||||||||||||||||
STANLEY BLACK & DECKER, INC. | $ | 13,982 | $ | 18,088 |
Industrial | ✗ | ✗ | $ | 15,617 | $ | 30,751 | Industrial Machinery | ✗ | ✗ | ||||||||||||||||||||||||
TEXTRON INC. | $ | 13,972 | $ | 11,174 |
Aerospace & Defense
| ✗ | ✗ | $ | 12,382 | $ | 17,017 | Aerospace & Defense | ✗ | ✗ | ||||||||||||||||||||||||
XYLEM, INC. | $ | 5,207 | $ | 11,991 |
Industrial Machinery
| ✗ | ✗ | $ | 5,195 | $ | 21,625 | Industrial Machinery | ✗ | ✗ | ||||||||||||||||||||||||
75TH PERCENTILE |
$
|
14,419
|
|
$
|
25,027
|
| $ | 14,374 |
| $ | 43,633 |
| ||||||||||||||||||||||||||
MEDIAN
|
$
|
8,978
|
|
$
|
18,989
|
| $ | 6,388 |
| $ | 29,054 |
| ||||||||||||||||||||||||||
25TH PERCENTILE
|
$
|
5,013
|
|
$
|
10,403
|
| $ | 5,067 |
| $ | 15,996 |
| ||||||||||||||||||||||||||
DOVER
|
$
|
6,992
|
|
$
|
10,382
|
| $ | 7,907 |
| $ | 26,148 |
|
(1) | As of 12/31/ |
(2) | “Same analyst coverage” means company is covered by at least |
DOVER CORPORATION – 20192022 Proxy Statement 4447
COMPENSATION DISCUSSION AND ANALYSIS
Role of Internal Equity in Setting Executive Compensation
Management and theour Compensation Committee consider both market benchmarks (i.e., external equity)competitiveness), as well as the impact each executive role has relative to internal peers (i.e., internal equity), in establishing the executive pay structures used to govern pay.
Role of the Independent Compensation Consultant
TheOur Compensation Committee has the authority and discretion to retain external compensation consultants as it deems appropriate. TheOur Compensation Committee has adopted a policy to ensure the continuing independence and accountability to the committee of any advisor hired to assist the committee in the discharge of its duties. The policy formalizes the independent relationship between the committee’sCompensation Committee’s advisor and Dover, while permitting management limited ability to access the advisor’s knowledge of Dover for compensation matters. Under the policy, theour Compensation Committee will annually review andpre-approve the services that may be provided to management by the independent advisor without further committeeCompensation Committee approval. Compensation Committee approval is required prior to Dover retaining the independent advisor for any executive compensation services or other consulting services or products above an aggregate annual limit of $50,000.
Since February 2010, theSeptember 2020, our Compensation Committee has retained Semler Brossy Consulting Group,Meridian Compensation Partners, LLC (“Semler Brossy”Meridian”) to serve as its advisor. Semler Brossyindependent compensation consultant. Meridian does no other work for and has no other relationships with Dover. Semler Brossy focusesMeridian is focused on executive compensation and does not have departments, groups, or affiliates that provide services other than those related to executive compensation and benefits.
TheOur Compensation Committee looks to its consultant to periodically review and advise regarding the adequacy and appropriateness of our overall executive compensation plans, programs, and practices and, from time to time, to answer specific questions raised by theour Compensation Committee or management. Compensation decisions are made by, and are the responsibility of, theour Compensation Committee and our Board, and may reflect factors and considerations other than the information and recommendations provided by theour Compensation Committee’s consultant.
To ensure independence of the compensation consultant, the consultant reports directly to the Chair of theour Compensation Committee and works specifically for the Compensation Committee solely on compensation and benefits.
Semler BrossyMeridian did not engage in any projects for management in 2018. The2021. Our Compensation Committee has assessed the independence of Semler BrossyMeridian and concluded that its work for the Compensation Committee does not raise any conflict of interest.
New CEO Compensation and Employment Agreement
On May 1, 2018, Richard J. Tobin became Dover’s President and CEO. Immediately prior to joining Dover, Mr. Tobin was the CEO of CNH. The independent directors, with the support of Semler Brossy, the Compensation Committee’s independent consultant, approved Dover’s entry into a three-year employment agreement with Mr. Tobin commencing May 1, 2018.
Under the terms of the agreement, Mr. Tobin is entitled to an initial annual base salary of $1.2 million and a target annual bonus equal to 125% of base salary and receipt of an annual equity grant for each of Dover’s fiscal years ending during the term of the agreement with a grant date fair value of not less than $7 million. Mr. Tobin’s annual bonus for 2018 was guaranteed to be no less than the target annual bonus,pro-rated for the portion of 2018 on and following the commencement of the term.
Annual Compensation Package for 2018 and 2019 | Base | Target Bonus | LTIP Grant | Total | ||||||||||||
Richard J. Tobin | $ | 1,200,000 | $ | 1,500,000 | $ | 7,000,000 | $ | 9,700,000 |
DOVER CORPORATION – 20192022 Proxy Statement 4548
COMPENSATION DISCUSSION AND ANALYSIS
In addition, Mr. Tobin received aone-time make-whole equity grant consisting of $6 million in the form of performance shares, having the same performance and vesting terms as our February 2018 iTSR performance share grants to our other employees, and $13 million in the form of RSUs, which vest in five equal installments on December 15th of each calendar year, starting on December 15, 2018 and ending on December 15, 2022. Mr. Tobin also received aone-time make-whole cash payment of $1,000,000, provided that he is obligated to repay this amount if he terminates his employment without good reason or if Dover terminates his employment for cause, as such terms are defined in the employment agreement, prior to May 1, 2019, and he is required to repay apro-rata portion of this amount if his employment is terminated without good reason or for cause prior to May 1, 2020.
For a more detailed description of Mr. Tobin’s employment agreement, see “CEO Employment Agreement” on page 58.
Elements of Executive Compensation
Focus on Variable, Performance-Based PayCompensation Program Structure Drives Pay-For-Performance Alignment
The pay packages of Dover executives consist predominantly of incentive-based pay, both annual and long-term. The ratio between fixed and variable pay varies by executive level, but for the CEO and his direct reports, including the NEOs, we feel it is appropriate that the vast majority of the pay package should be “at risk” incentive-based pay as shown in the chart below. Additionally, we believe that their incentive pay should be heavily weighted toward long-term performance and tied to share performance, with the annual incentives focused on key short-term drivers and progress on strategy. The CEO chart presented below excludes theone-time sign on cash and equity.
DOVER CORPORATION – 2019 Proxy Statement 46
COMPENSATION DISCUSSION AND ANALYSIS
Each of the compensation components has a specific role in the overall design of our executive pay program. While the components are designed to be mutually reinforcing, care is taken to minimize overlap between them. The following table below shows how each element fits into our overall executive payprovides an overview of the 2021 compensation program and incentivizes performance over multiple time horizons.structure.
| Pay Element | 2021 Metrics & Weighting | Objectives | |||||
Base Salary | Cash | ◾ n/a | ◾ Attract and retain qualified executives ◾ Benchmarked to peer group median while also considering additional factors such as experience and performance in role | |||||
Annual Incentive Plan (AIP) | Cash | ◾60% Financial
◾40% Individual Strategic Objectives ○ ESG oversight included in CEO and select NEO individual strategic objectives | ◾ Intended to drive profitability, growth, and progress | ◾Individual objectives are ◾ Including ESG oversight in objectives establishes clear tone at the top regarding the importance of | ||||
Long-Term Incentive Plan | Performance Shares | ◾ 40% LTIP weighting ◾ Performance Criteria: 3-Year relative TSR with the S&P 500 Industrials index companies as the comparator group | ◾ Focus executives on shareholder value ◾ Relative TSR closely aligns our executive-level measurement system with the experience of shareholders | |||||
| SSARs |
◾ Performance Criteria: Dover stock price, exercisable three years after grant date and remain exercisable for another seven years (subject to 10-year stock price movement) | ◾ Focus executives on share price appreciation ◾ SSARs are an important component of our program, reflecting input from investors, many of whom acknowledge the role SSARs play in emphasizing growth and | |||||
RSUs | ||||||||
◾ 20% LTIP weighting ◾Performance |
| |||||||
| Consistent with other similarly situated employees |
DOVER CORPORATION – 2022 Proxy Statement 49
COMPENSATION DISCUSSION AND ANALYSIS
2021 Target Pay Mix
The ratio between fixed and variable pay varies by executive level, but for the CEO and his direct reports, including the NEOs, we believe it is appropriate that the vast majority of the compensation should be “at risk” incentive-based pay as shown in the chart below. Additionally, we believe that incentive pay should be heavily weighted toward long-term performance and tied to share performance, with the annual incentives focused on key short-term drivers and progress on strategy.
DOVER CORPORATION – 2022 Proxy Statement 50
COMPENSATION DISCUSSION AND ANALYSIS
Pay-for-Performance Philosophy
Our Compensation Committee remains fully committed to its pay-for-performance philosophy. Dover’s record of long-term value creation is shown in the graphs below.
Total Shareholder Return1,2 |
Note: These figures are annualized returns. (1) End date for returns period is December 31, 2021. (2) Annualized Total Shareholder Return including dividends and spin-offs. Fortive Corporation went public in July 2016 and Ingersoll Rand merged with Gardner Denver in March 2020. Both stocks are excluded from periods prior to go public / merger dates. Source: Capital IQ |
DOV TSR vs. Proxy Peer Group (12/31/18 – 12/31/21)1 |
Note: These figures are annualized returns. Source: Capital IQ. (1) Ingersoll Rand merged with Gardner Denver in March 2020 and is excluded from this analysis. |
DOVER CORPORATION – 2022 Proxy Statement 51
COMPENSATION DISCUSSION AND ANALYSIS
Annual Incentive Plan Compensation
An annual bonus may be earned each year based on an NEO’s performance against both financial objectives tied to the NEO’s business unit andour financial performance as well as individual strategic goals. Each NEO’s bonus target amount is determined in reference to market benchmarking and according to the scope and complexity of the NEO’s business/function complexity, size andfunctional responsibilities, overall impact on Dover’sour results, as well as strategic leadership, and managerial responsibility. We believe that balancing the measurement of performance for the annual bonus between financial and strategic objectives is important in mitigating risk and executing on our long-term strategy for value creation.
For 2018, 60%Each executive officer is eligible for a bonus equal to his or her base salary multiplied by his or her target award percentage multiplied by the Overall Payout Factor (which is the sum of the annual bonus of our NEOs other than Mr. TobinFinancial Objective Factor (weighted 60%) and the Strategic Objectives Factor (weighted 40%)).
2021 AIP Financial Objective Factor – Target
The Financial Objective Factor in the 2021 AIP was calculated based on Adjusted Earnings. In setting the achievement of financial objective, our Compensation Committee considered our annual budget, operational priorities, plans for capital allocation, historical performance, criteria based on revenue and earnings (EBITexternal factors, among other items. The target performance level for segment executives and earnings from continuing operations for executivesthe financial objective was established at the corporate level)beginning of the fiscal year and was subjectprovided for appropriate adjustments for acquisitions and dispositions occurring during the year. For this measure, our Compensation Committee established threshold, target, and maximum levels of performance, as well as a payout percentage curve that relates each level of performance to a modifier basedpayout percentage.
Threshold and maximum performance levels are set at 85% and 107%, respectively, of target. The threshold and maximum performance levels were narrowed around target in 2021 to increase the performance sensitivity of the AIP. There is no payout on the EBIT margin ofFinancial Objective Factor if performance is below the NEO’s business unit. Financial targets were setthreshold. At threshold, the payout percentage curve begins at 50%. If performance is at the overall corporatetarget level, for corporate NEOs (Tobin, Cerepak, Cabrera and Kloosterboer) andthe payout percentage is 100%. For performance at or above the segmentmaximum level for segment NEOs (Spurgeon). Rightsizing and other costs incurred inof achievement, the third and fourth quarters of 2018 related to our initiative to reduce selling, general and administrative expense were not included in the calculation.payout percentage is capped at 200%.
The other 40%financial objective measure as originally established was adjusted to exclude forecasted performance contributions from Unified Brands following its sale on December 1, 2021, and to include forecasted contributions from the acquisitions of Innovative Control Systems, Inc. on December 30, 2020, AvaLAN Wireless Systems, Incorporated on April 19, 2021, Quantex Arc Limited on June 23, 2021, Blue Bite LLC on June 24, 2021, CDS Visual, Inc. on July 23, 2021, The Espy Corporation on September 15, 2021, LIQAL B.V. on October 15, 2021, Acme Cryogenics, Inc. on December 16, 2021, and Engineered Controls International, LLC on December 28, 2021.
DOVER CORPORATION – 2022 Proxy Statement 52
COMPENSATION DISCUSSION AND ANALYSIS
2021 AIP Financial Objective Factor – Results
Following the annual bonus wasend of 2021, we calculated the Financial Objective Factor as follows:
2021 AIP FINANCIAL OBJECTIVE RESULTS (in millions) | ||||||||||
| TARGET PERFORMANCE LEVEL | ACTUAL PERFORMANCE LEVEL | PAYOUT% (BEFORE WEIGHTING) | WEIGHTING OF MEASURE | WEIGHTED PAYOUT% | |||||
Adjusted Earnings(1) | $902 | $1,109 | 200%(2) | 60% | 120% | |||||
Financial Objective Factor | 120% | |||||||||
Performance Payout Curve | ||||||||||
|
|
|
| PERFORMANCE LEVEL | PAYOUT PERCENTAGE | |||||
Threshold | 85% | 50% | ||||||||
Target | 100% | 100% | ||||||||
Maximum | 107% | 200% |
(1) | Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement. |
(2) | The payout percentage for the Adjusted Earnings Financial Objective Factor would also have been at the maximum performance level using the performance levels in effect in 2020. |
2021 AIP Individual Strategic Objectives Factor
The Strategic Objectives Factor is based on the achievement of individual strategic objectives designed to create long-term value for our shareholders. The individual strategic objectives for the CEO were set for our then CEO, Mr. Livingston,developed by our independent directorsCompensation Committee at the beginning of the year, approved by our independent directors, and communicated to the CEO in February. The individual strategic objectives were based on specific strategic initiatives that the Board and management agreed were important to achieve in 2018.2021. These objectives were cascaded to the CEO’s direct reports, as appropriate, based on their responsibilities or business portfolio. The Board monitored progress on the CEO’s strategic objectives and, following the end of the year, reviewed the CEO’s performance against these objectives when determining his annual bonus. Mr. Tobin’s annual bonus
Following the end of 2021, our Compensation Committee determined for 2018 was based oneach NEO a Strategic Objectives Factor between 0% and 200%. Our Compensation Committee believes such judgment is an important risk-mitigating element to our compensation program and provides an opportunity to further align executive compensation with long-term value creation. To make this determination, our Compensation Committee took into account each executive’s execution against his or her personal strategic objectives for the terms of his employment agreementyear and included consideration of his accomplishments in 2018 relating to strategic priorities established in consultation with the Board following his appointment as CEO.executive’s overall performance for the year.
DOVER CORPORATION – 20192022 Proxy Statement 4753
COMPENSATION DISCUSSION AND ANALYSIS
2018 AIP Financial Results PerformanceStrategic Objectives Factor — CEO
The actual bonuses paid to our NEOs for 2018 were lower than those earned for 2017 based on business results, reflecting ourpay-for-performance focus. Mr. Livingston, our former CEO, retired on May 1, 2018 and did not receive an AIP bonus for 2018.
NEO
| 2018 Targets
| 2018 Results
| ||||||||||||||||||||||||||||||
(in millions, except EBIT Margin)
| ||||||||||||||||||||||||||||||||
Net Income(1)
| Sales
| EBIT(2)
| EBIT
| Net Income(1)
| Sales
| EBIT(2)
| EBIT
| |||||||||||||||||||||||||
DOVER CORPORATION • Richard J. Tobin • Brad M. Cerepak • Ivonne M. Cabrera • Jay L. Kloosterboer
| $ | 634 | $ | 6,960 | N/A | 13.5% | $ | 636 | $ | 6,992 | N/A | 12.8% | ||||||||||||||||||||
DOVER FLUIDS • William W. Spurgeon, Jr.
| N/A | $ | 2,655 | $ | 403 | 15.2% | N/A | $ | 2,797 | $ | 407 | 14.6% |
|
|
|
2018 AIP Individual Strategic Objective Performance
Each oftable below summarizes the NEOs had uniqueindividual strategic objectives, in keeping withweightings, and results the strategic priorities communicated toCompensation Committee considered for our shareholders. Strategic objectives are intended to focus on a limited and measurable set of goals which, if accomplished, will benefit our shareholders over the long term. For NEOs other than Mr. Tobin, these objectives were used to determine 40% of their annual incentive. Similarly, Mr. Tobin’s strategic objectives were consideredCEO in determining his annual incentive but were not specifically tied to a portion of his 2018 bonus opportunity in keeping with the terms of his employment agreement.Strategic Objectives Factor for 2021.
Strategic Objectives & Accomplishments – Richard J. Tobin (President & CEO) |
Capital Markets (16.67%)
|
✓ Pursued active engagement with investors regarding our long-term strategy execution and value-creation priorities |
|
✓ Successfully oversaw the integration of several recent acquisitions |
Organic Investment and
|
✓ Made progress on three-year capital structure plan to support our capital allocation priorities (organic investments, strategic acquisitions, and the return of capital to our shareholders) including in presentations to investors regarding our long-term strategy execution and value-creation priorities |
|
✓ Completed several objectives in the multi-year strategy to help ensure that our culture continues to take an inclusive approach that values diversity ✓ Completed talent and succession planning review |
|
✓ Successfully implemented the second year of a multi-year ESG strategic plan by further improving transparency and setting public facing goals on ESG topics, including GHG emissions. |
|
|
Our Compensation Committee evaluated Mr. Tobin’s achievements against his strategic objectives and assigned him a Strategic Objectives Factor of 100%.
DOVER CORPORATION – 20192022 Proxy Statement 4854
COMPENSATION DISCUSSION AND ANALYSIS
2018 AIP Target Performance and PayoutStrategic Objectives Factor — Other NEOs
Overall, we meetThe following table summarizes the individual strategic objectives the Compensation Committee considered for our revenue and earnings targetsother NEOs in 2018, while missing our EBIT margin targets. In addition, we made progress on our strategic objectives. Actual compensation varies widely based on the individual’s business unit and performance against specific strategic objectives.determining their respective Strategic Objectives Factors for 2021.
NEO
| Annual Bonus in $ | Annual Bonus % of Target | ||||||||||||||||||||
2016
|
2017
|
2018
|
2016
|
2017
|
2018
| |||||||||||||||||
Richard J. Tobin(1)
|
|
1,000,000
|
|
N/A(1)
| ||||||||||||||||||
Brad M. Cerepak
|
|
530,000
|
|
|
970,000
|
|
|
773,000
|
|
|
79%
|
|
|
142%
|
|
110%
| ||||||
William W. Spurgeon, Jr.
|
|
310,000
|
|
|
640,000
|
|
|
601,700
|
|
|
48%
|
|
|
98%
|
|
93%
| ||||||
Ivonne M. Cabrera(2)
|
|
434,000
|
|
115%
| ||||||||||||||||||
Jay L. Kloosterboer(2)
|
|
434,000
|
|
115%
|
|
Mr. Cerepak’s strategic objectives were focused on corporate strategy (25% weighting), capital structure analysis (25%), finance transformation and control environment (25% weighting), and audit plan initiatives (25% weighting). Our Compensation Committee considered his: (1) role in assessing our portfolio of businesses and evaluating options for capital deployment; (2) support on aligning key metrics and market positions to drive shareholder communications; (3) efforts to support the preparation of our three-year capital structure plan; (4) continued commitment to optimizing the structure of our finance team and improving process efficiency of shared services; and (5) enhancements to our internal controls environment; and (6) role in improving our audit plan structure. |
Girish Juneja (Senior Vice President & Chief Digital Officer) |
Mr. Juneja’s strategic objectives were focused on strategic digital initiatives (35% weighting), digital customer experience (25% weighting), data security (25% weighting), and product development (15% weighting). Our Compensation Committee considered his: (1) role in supporting our strategic initiatives and priorities by assessing the digital capabilities of acquisition targets and driving adoption of shared services; (2) continued support in building common platforms to enhance the customer experience and in delivering efficiencies by enabling automated transactions; (3) efforts related to our enterprise-wide strategy to improve data and identity security; (4) progress on our information technology centralization initiatives; and (5) expansion of connected software and machine learning augmented solutions built to integrate and work with our equipment and component offerings. |
Ivonne M. Cabrera (Senior Vice President, General Counsel & Secretary) |
Ms. |
Kimberly K. Bors (Senior Vice President & Chief Human Resource Officer) |
Ms. Bors’ strategic objectives were focused on the global HR operating model (25% weighting), enterprise talent management (25% weighting), strategic HR project initiatives (25% weighting), and ESG/Diversity & Inclusion (25%). Our Compensation Committee considered her: (1) role in developing the global operating model designed to expand shared services and centers of expertise, and improve operational effectiveness of the human resources function; (2) continuing progress to enhance talent management processes, capabilities and succession depth across the enterprise; (3) efforts to develop and launch a global career architecture and compensation structure, and a comprehensive Diversity & Inclusion roadmap; (4) successfully streamlining, outsourcing, and offshoring several HR processes to achieve cost reductions; (5) continuing role in the COVID-19 pandemic response and guidance for employee protocols; and (6) membership on the Sustainability Steering Committee and, in connection therewith, role in establishing goals and execution plans related to both an employee engagement survey with inclusivity index and unconscious bias training for employees with direct reports. |
Our Compensation Committee assigned an average Strategic Objectives Factor of 100% to the 2018 Performance Sharesnon-CEO NEOs.
The 2018 performance shares are based onOverall Payout Factors resulting from the three-year performance period of 2016-2018,above Financial Objective Factors and the performance is measured on iTSR, which is described below. TheStrategic Objectives Factors resulted in the payouts set forth in the 2021 Summary Compensation Committee believes our iTSR measure focuses executives on key financial and strategic drivers of long-term shareholder value. All equity awards outstanding as of May 9, 2018 were adjusted as a result of thespin-off of Apergy to preserve the value of the awards in accordance with the Employee Matters Agreement, dated May 9, 2018, between Dover and Apergy.Table.
NEO
|
TARGET # OF SHARES |
ACTUAL SHARES AWARDED | ||||||
2018
|
2018
| |||||||
Richard J. Tobin
|
|
N/A
|
|
|
N/A
|
| ||
Robert A. Livingston
|
|
26,930
|
|
|
0
|
| ||
Brad M. Cerepak
|
|
7,665
|
|
|
0
|
| ||
William W. Spurgeon, Jr.
|
|
6,836
|
|
|
2,231
|
| ||
Ivonne M. Cabrera
|
|
3,314
|
|
|
0
|
| ||
Jay L. Kloosterboer
|
|
3,314
|
|
|
0
|
|
DOVER CORPORATION – 20192022 Proxy Statement 4955
COMPENSATION DISCUSSION AND ANALYSIS
Long-Term Incentive Compensation
The following table summarizes the components of awards under our Dover Corporation 2012 Equity and Cash Incentive Plan (“LTIP”)LTIP and the related performance criteria for awards granted in 2018.2021. Note that all components are paid in stock rather than cash to encourage shareholder alignment through stock ownership.
Performance Shares |
| |||||
| ◾ Focus executives on shareholder value creation | |||||
Stock Settled Stock Appreciation Rights | ◾ 40% LTIP weighting
| ◾ Focus executives on share price appreciation | ||||
Restricted Stock Units | ◾ 20% LTIP weighting
| |||||
| ◾Retention and full alignment with the shareholder experience |
| ||||
|
|
|
|
Long-Term Incentive Plan MixPerformance Shares Granted in 2020 and 2021 – Relative TSR Metric
Beginning with grants made in 2020, performance shares are earned based on our relative TSR performance against the S&P 500 Industrials index companies. The relative TSR metric provides shareholders with a transparent and simple measure to gauge our performance against companies in our industry, and aligns the interests of our executives with our shareholders. The relative TSR targets for our performance shares are highly competitive. Awards are earned three years after the grant, provided relative TSR exceeds a threshold level with a maximum payout capped at 300% of target. Performance share payouts will be capped at 100% if absolute TSR is negative over the performance period.
For performance share grants made in 2020 and after, payouts will be made on a sliding scale using the following formula based on our relative TSR performance:
DOVER CORPORATION – 2022 Proxy Statement 56
COMPENSATION DISCUSSION AND ANALYSIS
Performance Shares & iTSRGranted Prior to 2020 – Internal TSR Metric
The Compensation Committee believesperformance shares that vested in 2021 are based on the three-year performance period of 2019-2021, and the performance is based on our iTSR measure focuses executiveshistoric internal TSR metric, which is described below. Consistent with our value creation over the three-year performance period, the performance shares that vested in 2021 had a payout percentage of 300% for our NEOs.
Target # of Shares
| Actual Shares Awarded
| |||||||||
Richard J. Tobin | 15,351 | 46,053 | ||||||||
Brad M. Cerepak | 4,386 | 13,158 | ||||||||
Girish Juneja | 987 | 2,961 | ||||||||
Ivonne M. Cabrera | 1,754 | 5,262 | ||||||||
Kimberly K. Bors | N/A | 0 |
Definition of Internal TSR.The performance shares granted to NEOs for the performance period of 2019-2021 are measured based on key financial and strategic drivers of long-term shareholder value. iTSR,internal TSR, which, by definition, is a measure of value creation for our business segments and operating companies. The key components of iTSRinternal TSR are EBITDA Growth and Free Cash Flow. Based on rigorous testing over time, the Compensation Committee continues to believe iTSRinternal TSR is:
highly correlated with long-term shareholder value creation for a multi-industry company such as Dover,
highly correlated with the combination of return on invested capital (“ROIC”) and organic growth, and
more effective in driving behaviors than relative TSR because it measures outcomes that are more within management’s control, such as revenue growth (organic and acquisition), and margin improvements.
DOVER CORPORATION – 2019 Proxy Statement 50
COMPENSATION DISCUSSION AND ANALYSIS
Definition of iTSR.iTSRInternal TSR measures the change in enterprise value over a three-year period. EBITDA is assigned a multiple based on prevailing market multiples among industrial companies. iTSRInternal TSR tracks the change in that EBITDA-based value, along with Free Cash Flow generated during the three-year performance period. The two together work similarly to an external TSR measure: the EBITDA-based value becomes a proxy for share price, and Free Cash Flow becomes a proxy for dividends. Further, EBITDA Growth and Free Cash Flow together focus our business leaders on growing our business, investing in continuing operations, and shaping our portfolio with capital-effective acquisitions and dispositions.
EBITDA Growth — We believe that EBITDA is useful for purposes of evaluating our ongoing operating profitability as it excludes the depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating our operating performance in relation to our competitors.
Free Cash Flow — Free Cash Flow is operating cash flow less capital spending, less cash used for acquisitions, plus cash received from divestitures. We believe that Free Cash Flow is an important measure of our operating performance as it provides a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
DOVER CORPORATION – 2022 Proxy Statement 57
COMPENSATION DISCUSSION AND ANALYSIS
Safeguards.Since iTSRinternal TSR is an absolute measure of value creation, we have implemented safeguards to substantially eliminate large payouts resulting solely from economic cycles. Further, payouts under the program are in shares, and our shareholding requirements ensure that executives are exposed to the same stock price changes as our shareholders, including external stock market factors. Dividends are not accrued or paid on performance shares during the performance period.
Rigorous iTSRInternal TSR Targets, Threshold and Cap Levels.iTSRInternal TSR targets for our Performance Sharesperformance shares are demanding and were rigorously back-tested to confirm that they are set to tie performance share payouts with comparable relative TSR performance levels. Awards are earned three years after the grant, provided iTSRinternal TSR exceeds a threshold level. No payouts will be made unless iTSRinternal TSR equals or exceeds 6%5%. The payout to any individual may not exceed 500,000 shares.
DOVER CORPORATION – For performance share grants made in 2019, Proxy Statement 51
COMPENSATION DISCUSSION AND ANALYSIS
Payouts of performance shares arepayouts were made on a sliding scale using the following formula:formula with a maximum payout at 300% of target:
Stock Settled Stock Appreciation Rights
Similar to stock options, SSARs align executive interests with shareholder interests for stock price growth for several years into the future. They focus executives on increasing the stock price over the long term. SSARsStock Settled Stock Appreciation Rights (SSARs) give our NEOs the ability to participate in the price appreciation of a set number of shares of Company stock. Once SSARs vest, an NEO may exercise them any time prior to the expiration date. Thedate and the proceeds from the exercise are paid to the NEO in the form of shares of Dover common stock to encourage continued share ownership and shareholder alignment.
SSARs vest and are exercisable 3 years after grant date and remain exercisable for seven years, which means the awards are subject to Illustration10-year stock price movement thus aligning executive interests with shareholder interests over the long term. Importantly, in light of SSARs Exercise:our active acquisition program, SSARs’ forward-looking orientation is effective for incentivizing our newly-acquired companies and employees, who must create new value in order to realize gains. Furthermore, SSARs’ 10-year life cycle is essential to managing value creation with a business that has a portfolio of industrial companies whose economic cycles vary.
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Restricted Stock Units
RSU grants attract and retain NEOs by providing them with some of the benefits associated with stock ownership during the vesting period. Executives do not actually own the shares underlying the units, nor do they enjoy the benefits of ownership such as dividends and voting, until the vesting conditions are satisfied. Once vested, the NEO receives shares of Dover stock equivalent in number to the vested units and receives a cash amount equal to accrued dividends during the vesting period, net of withholding taxes.
DOVER CORPORATION – 2019 Proxy Statement 52
COMPENSATION DISCUSSION AND ANALYSIS
2019 Changes to our Executive Compensation
Changes in Salary, Target Bonus, or LTIP grants
None of our NEOs received a salary, target bonus or LTIP grant increase for 2019.
401(k), Pension Plan and Health & Wellness Plans
Our executive officers are able to participate in retirement and benefit plans generally available to our employees on the same terms as other employees. Dover and most of our businesses offer a 401(k) plan to substantially all U.S.-based employees
DOVER CORPORATION – 2022 Proxy Statement 58
COMPENSATION DISCUSSION AND ANALYSIS
and provide a Company matching contribution denominated as a percentage of the amount of salary deferred into the plan by a participant during the course of the year. Some of our U.S.-based employees also participate in atax-qualified defined benefit pension plan. Effective December 31, 2013, we closed both our qualified andnon-qualified defined benefit retirement plans to new employees. We intend to freeze any future benefit accruals in both plans effective December 31, 2023. All of our U.S.-based employees are offered a health and wellness plan (including health, term life and disability insurance). NEOs do not receive enhanced health and wellness benefits.
Non-Qualified Retirement Plans
We offer twonon-qualified plans with participation generally limited to individuals whose annual salary and bonus earnings exceed the Internal Revenue Service (“IRS”) limits applicable to our qualified plans: our PRPPension Replacement Plan (“PRP”) and our deferred compensation plan. Participation in the deferred compensation plan is open to employees with an annual salary equal to or greater than $175,000.$175,000 for 2021 deferral elections and $250,000 for 2022 deferral elections.
After December 31, 2009, benefits under the PRP before offsets are determined using the benefit calculation and eligibility criteria as under the pension plan, except that IRS limits on compensation and benefits do not apply. Prior to December 31, 2009, the participants in the PRP accrued benefits greater than those offered in the pension plan. Effective January 1, 2010, we modified this plan so that executives subject to IRS compensation limits will accrue future benefits that are substantially the same as benefits under the pension plan. Individuals who participated in the PRP prior to January 1, 2010 will receive benefits calculated under the prior benefit formula through December 31, 2009 and benefits calculated under the lower PRP benefit formula on and after January 1, 2010. Amounts receivable by the executives under the PRP are reduced by any amounts receivable by them under the pension plan, any qualifying profit sharing plan, Company-paid portion of social security benefits, and the amounts of the Company match in the 401(k) plan.
Effective December 31, 2013, the PRP was closed to new employees. All eligible employees as of December 31, 2013 will continue to earn PRP benefits through December 31, 2023 as long as they remain employed by Dover and its affiliates. Effective December 31, 2023, Dover intends to eliminate any future benefit accruals consistent with the freezing of benefit accruals under the pension plan.
We offer a deferred compensation plan to allow participants to elect to defer their receipt of some or all of their salary, bonuses and any payout of a cash performance award. The plan permits executive officers to defer receipt of part of their compensation to later periods and facilitates tax planning for the participants. Effective January 1, 2014,2022, the deferred compensation plan was amended to also provide for certain matching and additionalautomatic Company contributions for participants who do not also participate in the PRP. Our NEOs are participants inPRP or have a present value benefit under the PRP and are not eligible for matching or additional contributions under the deferred compensation plan. Accordingly, we do not consider the deferred compensation plan to play a major role in our compensation program for our NEOs as we do not match any amounts deferred or guarantee any particular return on deferrals.of less than $100,000.
DOVER CORPORATION – 2019 Proxy Statement 53
COMPENSATION DISCUSSION AND ANALYSIS
Executive Severance
All of our NEOs are eligible to participate in our severance plan. Under the plan, if we terminate an NEO’s employment without cause (as defined in the severance plan), the NEO will generally be entitled to receive twelve months of salary plus target annual cash bonus, outplacement services, and healthcare benefits continuation, and a prorated annual cash bonus and a prorated performance share award for time worked during the year. In addition, Mr. Tobin is entitled to receive certain severance payments and benefits under his employment agreement in the event his employment is terminated by Dover without cause or by him for good reason. See “Potential Payments Upon Termination or Change in Control.”
Change-in-Control.”Senior Executive Change in Control Severance Plan
Our Senior ExecutiveChange-in-Control Change in Control Severance Plan
We have a senior executive CIC severance plan. The CIC severance plan (the “CIC Severance Plan”) establishes the severance benefits payable to eligible executives if they are involuntarily terminated following achange-in-control. change in control. All of our NEOs are eligible to participate in the CIC severance plan.Severance Plan. An executive eligible to participate in the CIC severance planSeverance Plan as of the date of achange-in-control change in control will be entitled to receive severance payments under the plan if, within 1824 months after thechange-in-control, change in control, either the executive’s employment is terminated by the Company without “cause” or he or she terminates employment for “good reason” (as such terms are defined in the plan). The severance payments and benefits will consist of: a lump sum payment equal to 2.0 times their annual salary and target bonus, a prorated annual cash bonus at target, full acceleration of all unvested SSARs and RSUs, performance share payout at target for all in-cycle awards, outplacement services, and a lump sum payment equal to the cost of Consolidated Omnibus Budget Reconciliation Act (COBRA) health care benefit continuation of the executive and covered family members for twelve24 months. See “Potential Payments Upon Termination orChange-in-Control. Change in Control.”
DOVER CORPORATION – 2022 Proxy Statement 59
COMPENSATION DISCUSSION AND ANALYSIS
No executive may receive severance benefits under more than one plan or arrangement. Dover does not provide taxgross-ups in the CIC severance plan.Severance Plan.
Other Elements of Compensation
Clawback Policy
Currently,In 2019, we adopted a formal clawback and recoupment policy applicable to our executive officers. If our Board determines, in its sole discretion acting in good faith, that any executive officer has engaged in fraud or intentional misconduct that caused or was a significant contributing factor to a material restatement of all or a portion of our consolidated financial statements, the Board may, to the extent permitted by law, and to the extent it determines that it is in Dover’s best interest, require reimbursement to Dover for, or reduce or cancel, any incentive compensation paid, granted or credited to such executive officer on or after November 7, 2019. We may effect any such recoupment by requiring the executive officer to pay Dover the relevant amount, by set-off, by reducing future compensation or by such other means or combination of means as the Board determines to be appropriate.
Apart from the clawback policy described above, our PRP includes clawback provisions for termination for cause and the severance plan and CIC severance planSeverance Plan provide for clawback of benefits for breaches of the plan. Our LTIP provides that awards will be subject to such clawback requirements and policies as may be required by applicable law or Dover policies in effect from time to time. We intend to adopt a broader recovery policy once the SEC issues final rules.
Anti-hedging and Anti-pledging Policy
Currently, all employeesOur Securities Trading and Confidentiality Policy prohibits directors, executive officers and any employee who receive anhas previously received or receives any type of long-term incentive plan award, under our LTIP, including all NEOs, are prohibitedand certain persons and entities related to any such persons, from engaging in short-sales, transactions in derivative securities or any other form of hedging transaction designed to hedge or pledging their positionoffset any decrease in the market value of Dover stock.securities granted to or held by such persons. In addition, such persons may not hold Dover securities in a margin account or pledge securities as collateral for a loan or any other obligation.
Perquisites
We provide substantially no executive perquisites, nor does the Company own or operate any corporate aircraft. Management and theour Compensation Committee believe that providing significant perquisites to executive officers would not be consistent with our overall compensation philosophy. As a result, we do not provide executive officers with perquisites such as social club memberships, company cars or car allowances, or financial counseling, or any other perquisites. Executivescounseling. Except for executive physicals, our NEOs participate only in programs generally available to Dover employees.
DOVER CORPORATION – 2019 Proxy Statement 54
COMPENSATION DISCUSSION AND ANALYSIS
Shareholding Guidelines
We believe that our executives will most effectively pursue the long-term interests of our shareholders if they are shareholders themselves. As a result, share ownership guidelines are in place for all NEOs (subject to exceptions that may be granted by theour Compensation Committee for significant personal events or retirement planning). Our CEO is required to hold shares equal in value to five-times salary and our other NEOs are required to hold shares equal in value to three-times salary. Our policy requires that NEOs hold/retain all equity grants until the share ownership guidelines are met. Based on current share ownership, all executives serving as NEOs are currently in compliance with the guidelines.
The Our Compensation Committee reserves the right to provide a portion of annual bonus in stock for any officer who fails to meet or make satisfactory progress toward satisfying the guidelines.
Risk Assessment
In 2018,2021, Dover, with the assistance of Willis Towers Watson, updated the formal risk assessment that was conducted in 20172020 for all our incentive compensation programs that have material impact on our financial statements. Willis Towers Watson inventoried incentive compensation programs at the corporate and operating company levels globally and conductedin-depth reviews of financially material plans, identified based on expected spend and income statement accounts tied to the program. The reviews focused on both the plan design features as well as internal risk mitigation controls in place. Based on this 2017 review and the 2018 update,assessment, we have concluded that Dover’s compensation practices and policies do not create risks that are reasonably likely to have a material adverse effect on the Company.
DOVER CORPORATION – 20192022 Proxy Statement 5560
We reviewed and discussed with management the Compensation Discussion and Analysis for the year ended December 31, 2018.
Based on the review and discussions referred to above, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Dover’s Annual Report on Form10-K for the year ended December 31, 2018.
We reviewed and discussed with management the Compensation Discussion and Analysis for the year ended December 31, 2021. Based on the review and discussions referred to above, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Dover’s Annual Report on Form 10-K for the year ended December 31, 2021. | ||||||
Compensation Committee: | Keith E. Wandell (Chair) | |||||
Kristiane C. Graham Michael F. Johnston Mary A. Winston | ||||||
This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference, and shall not otherwise be deemed filed under such Acts. |
This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference, and shall not otherwise be deemed filed under such Acts.
DOVER CORPORATION –20192022 Proxy Statement 5661
The Summary Compensation Table and notes show all remuneration for 20182021 provided to our NEOs, consisting of the following officers:
Our President & CEO and our former President & CEO;
Our Senior Vice President & CFO; and
Our three other most highly compensated executive officers as of the end of 2018.2021.
The determination of the most highly compensated executive officers is based on total compensation paid or accrued for 2018,2021, excluding changes in the actuarial value of defined benefit plans and earnings on nonqualified deferred compensation balances.
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | |||||||||||||||||||||||||
Richard J. Tobin President & Chief Executive Officer
| 2018 |
| 776,924 |
|
| 2,000,000 |
|
| 22,013,074 |
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| 3,071,394 |
|
| 0 |
|
| 0 |
|
| 70,009 |
|
| 27,931,401 |
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Robert A. Livingston Former President & Chief Executive Officer | 2018 |
| 366,667 |
|
| 0 |
|
| 271,307 |
|
| 333,303 |
|
| 0 |
|
| 628,096 |
|
| 83,609 |
|
| 1,682,982 |
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2017 |
| 1,060,000 |
|
| 1,725,000 |
|
| 2,699,960 |
|
| 2,580,618 |
|
| 0 |
|
| 1,814,023 |
|
| 73,765 |
|
| 9,953,366 |
| ||||||||||
2016 |
| 1,030,000 |
|
| 880,000 |
|
| 2,599,952 |
|
| 2,519,488 |
|
| 0 |
|
| 1,225,883 |
|
| 37,932 |
|
| 8,293,255 |
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Brad M. Cerepak Senior Vice President & Chief Financial Officer | 2018 |
| 705,000 |
|
| 773,000 |
|
| 800,049 |
|
| 901,146 |
|
| 0 |
|
| 123,659 |
|
| 30,830 |
|
| 3,333,684 |
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2017 |
| 685,000 |
|
| 970,000 |
|
| 799,936 |
|
| 764,629 |
|
| 0 |
|
| 397,072 |
|
| 27,872 |
|
| 3,644,509 |
| ||||||||||
2016 |
| 670,000 |
|
| 530,000 |
|
| 740,014 |
|
| 717,089 |
|
| 0 |
|
| 278,934 |
|
| 320,331 |
|
| 3,256,368 |
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William W. Spurgeon President & Chief Executive Officer, Dover Fluids | 2018 |
| 650,000 |
|
| 601,700 |
|
| 550,003 |
|
| 413,019 |
|
| 0 |
|
| 0 |
|
| 22,057 |
|
| 2,236,779 |
| |||||||||
2017 |
| 650,000 |
|
| 640,000 |
|
| 549,965 |
|
| 350,458 |
|
| 0 |
|
| 1,119,977 |
|
| 21,289 |
|
| 3,331,689 |
| ||||||||||
2016 |
| 650,000 |
|
| 310,000 |
|
| 550,001 |
|
| 355,313 |
|
| 0 |
|
| 726,584 |
|
| 13,832 |
|
| 2,605,730 |
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Ivonne M. Cabrera Senior Vice President & General Counsel
| 2018 |
| 540,000 |
|
| 434,000 |
|
| 319,987 |
|
| 360,455 |
|
| 0 |
|
| 177,611 |
|
| 18,672 |
|
| 1,850,725 |
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Jay L. Kloosterboer Senior Vice President, Human Resources | 2018 |
| 540,000 |
|
| 434,000 |
|
| 319,987 |
|
| 360,455 |
|
| 0 |
|
| 37,317 |
|
| 19,759 |
|
| 1,711,518 |
|
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | |||||||||||||||||||||||||||
Richard J. Tobin President & Chief Executive Officer | 2021 | 1,235,000 | 2,964,000 | 5,808,134 | 3,580,475 | 0 | 0 | 498,251 | 14,085,860 | |||||||||||||||||||||||||||
2020 | 1,217,500 | 1,722,825 | 6,024,137 | 2,674,529 | 0 | 0 | 343,347 | 11,982,338 | ||||||||||||||||||||||||||||
2019 | 1,200,000 | 1,665,000 | 2,800,022 | 3,232,903 | 0 | 0 | 251,150 | 9,149,075 | ||||||||||||||||||||||||||||
Brad M. Cerepak Senior Vice President & Chief Financial Officer | 2021 | 731,000 | 1,169,600 | 1,452,071 | 895,111 | 0 | 182,670 | 29,577 | 4,460,029 | |||||||||||||||||||||||||||
| 2020 |
|
| 718,000 |
|
| 679,830 |
|
| 1,505,922 |
|
| 668,627 |
|
| 0 |
|
| 649,315 |
|
| 35,329 |
|
| 4,257,023 |
| ||||||||||
| 2019 |
|
| 705,000 |
|
| 740,250 |
|
| 800,006 |
|
| 923,692 |
|
| 0 |
|
| 553,203 |
|
| 37,166 |
|
| 3,759,317 |
| ||||||||||
Girish Juneja Senior Vice President & Chief Digital Officer | | 2021 2020 | | | 500,000 491,404 | | | 560,000 325,500 | | | 341,738 376,533 | | | 210,626 167,157 | | | 0 0 | | | 0 0 |
| | 51,884 38,967 | | | 1,664,248 1,399,561 | | |||||||||
Ivonne M. Cabrera Senior Vice President & General Counsel |
| 2021 |
|
| 560,000 |
|
| 627,200 |
|
| 546,632 |
|
| 336,979 |
|
| 0 |
|
| 0 |
|
| 17,922 |
|
| 2,088,733 |
| |||||||||
| 2020 |
|
| 550,000 |
|
| 364,560 |
|
| 602,459 |
|
| 267,460 |
|
| 0 |
|
| 648,534 |
|
| 21,616 |
|
| 2,454,629 |
| ||||||||||
| 2019 |
|
| 540,000 |
|
| 396,900 |
|
| 319,930 |
|
| 369,480 |
|
| 0 |
|
| 408,519 |
|
| 23,238 |
|
| 2,058,067 |
| ||||||||||
Kimberly K. Bors Senior Vice President & Chief Human Resource Officer | 2021 | 450,000 | 504,000 | 362,136 | 223,247 | 0 | 0 | 43,615 | 1,582,998 |
(1) | Bonus amounts generally represent payments under our AIP for the year indicated, for which payments are made in the first quarter of the following year. The AIP constitutes anon-equity incentive plan under FASB ASC Topic 718. Although they are based on the satisfaction ofpre-established performance targets, AIP amounts are reported in the bonus column rather than thenon-equity incentive plan compensation column to make clear that they are annual bonus payments for the year indicated. |
(2) | The amounts generally represent (a) the aggregate grant date fair value of performance shares granted during the year indicated, and (b) the aggregate grant date fair value of restricted stock unit awards granted during the year, in each case, calculated in accordance with FASB ASC Topic 718. |
Under FASB ASC Topic 718, the 2019, 2020 and 2021 performance share awards are considered performance and service conditioned. The grant date fair value for the 2019 performance share awards was $91.20, the grant date fair value for the 2020 performance share awards was $165.71 and the grant date fair value for the 2021 performance share awards was $148.29. The grant date fair value of 2021 RSU awards was $122.73. All RSU grants are eligible for dividend equivalent payments which are paid upon vesting. |
DOVER CORPORATION –20192022 Proxy Statement 5762
EXECUTIVE COMPENSATION TABLES
The grant date fair values of 2018 RSU awards were $79.75 and $82.09, respectively, for awards granted to Mr. Tobin and awards granted to the other NEOs. All RSU grants are eligible for dividend equivalent payments which are paid upon vesting.
For a discussion of the assumptions relating to calculation of the cost of equity awards, see Note 14 to the Notes to the Financial Statements contained in our Annual Report on Form10-K for the year ended December 31, 2018.
(3) | The amounts represent the aggregate grant date fair value of SSAR awards granted during the year indicated, calculated in accordance with FASB ASC Topic 718, and do not correspond to the actual value that may be realized by the named executives. The grant date fair value for the |
(4) | See Note (1) for a discussion of annual bonuses under the AIP asnon-equity incentive plan compensation. |
(5) | Amounts represent changes in present value of accumulated benefits under the pension plan and/or PRP during the year indicated. For more information, see |
(6) |
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CEO Employment Agreement
In connection with the hiring of Mr. Tobin as our CEO, Mr. Tobin and Dover have entered into a three-year employment agreement commencing May 1, 2018. In recognition of Mr. Tobin’s outstanding leadership and contributions to value creation, the agreement was renewed for a three-year period ending May 1, 2024. Under the terms of the agreement, Mr. Tobin is entitled to an initiala minimum annual base salary for 2018 of $1.2 million and a minimum target annual bonus equal to 125% of his base salary, and the receipt of an annual equity grant for each of Dover’s fiscal years ending during the term of the agreement with a grant date fair value of not less than $7 million. Mr. Tobin’s annual bonus for 2018 was guaranteed to be no less than the target annual bonus,pro-rated for the portion of 2018 on and following the commencement of the term. In addition, duringDuring the term of the employment agreement, Mr. Tobin will also be entitled to employee benefits on the same basis as those generally available to similarly situated executivesexecutive officers of Dover and certain indemnification protections, and Dover reimburse him for his legal expenses incurred inDover.
In connection with negotiation of the employment agreement.
In addition,his hiring, Mr. Tobin received aone-time make-whole equity grant consisting of $6 million in the form of75,971 performance shares, having the same performance and vesting terms as our February 2018 iTSR performance share grants to our other employees, and $13 million in the form of RSUs, which vest in five equal installments on December 15th of each calendar year, starting on December 15, 2018 and ending on December 15, 2022.164,603 RSUs. Mr. Tobin also received aone-time make-whole cash payment of $1,000,000, provided that $1,000,000.
Mr. Tobin is obligatedentitled to repay this amount if he terminates his employment without good reason or if Dover terminates his employment for cause, as such terms are defined in the employment agreement, prior to May 1, 2019,receive certain severance payments and he is required to repay apro-rata portion of this amount if his employment is terminated without good reason or for cause prior to May 1, 2020.
The employment agreement provides thatbenefits in the event Mr. Tobin’shis employment is terminated by Dover without cause or by Mr. Tobinhim for good reason, then he will be entitled to receive a cash payment equal to one and one half (1.5) times the sum of his base salary and target bonus, a prorated annual bonus for the year of termination, time-vesting of the one-time make-whole equity awards (with performance shares continuing to be subject to performance
DOVER CORPORATION – 2019 Proxy Statement 58
EXECUTIVE COMPENSATION TABLES
conditions) and a cash payment equal to 18 months’ of COBRA premiums,reason. See “Potential Payments upon Termination or Change in each case, subject to the execution of a general release and compliance with applicable restrictive covenants.
The employment agreement contains an 18 month (or, if termination occurs following the third anniversary of the start date, a 12 month) post-terminationnon-competition andnon-solicitation of employees and customers covenants, a confidentiality covenant, a mutualnon-disparagement covenant, and an assignment of inventions covenant.Control”.
At the end of the term of the agreement, Mr. Tobin will continue to be employed by Dover as anat-will employee and participate in severance and other benefit plans on the same terms as other executives.
CEO Pay Ratio
In 2018, Dover completedWe are providing thespin-off following information about the relationship of Apergy, which reduced itsthe annual total compensation of our Chief Executive Officer and our median employee. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.
Under the rules, we are permitted to use the same median employee headcount significantly from that employed for its 2017in calculating the pay ratio calculation. Given this impact, Dover hasre-identifiedas the median employee we identified in fiscal year 2020 for 2018.up to three years if there have been no changes that we reasonably believe would significantly affect this pay ratio disclosure and are permitted to substitute another employee for the median employee in certain circumstances. We believe that there have been no changes to our employee population or compensation arrangements that would result in a significant change to the pay ratio disclosure. However, in fiscal year 2021, there were significant changes in the circumstances of the median employee identified in fiscal year 2020 that we reasonably believe would result in a significant change in our pay ratio disclosure. Therefore, to calculate the pay ratio disclosure for fiscal year 2021, we are using another employee whose compensation is substantially similar to last year’s median employee using the same compensation measure we used to determine the fiscal year 2020 median employee. The date chosen for identifying the median employee was December 31, 2021.
For purposes of this analysis, our global headcount was 24,946 employees (12,984 U.S. and 11,962 non-U.S) as of our December 31, 2021 determination date. Eleven countries were excluded (2.1% of the total workforce) under the permissible
DOVER CORPORATION – 2022 Proxy Statement 63
EXECUTIVE COMPENSATION TABLES
5% exclusion, with employee counts as follows: Argentina (22), Colombia (4), Costa Rica (4), Dominican Republic (53), Indonesia (6), Malaysia (125), Mexico (102), Russian Federation (39), Taiwan (19), Thailand (134), and Turkey (10). After country exclusions, our total headcount was 24,428 employees (12,984 U.S. and 11,444 non-U.S.). As permitted under SEC rules, the global headcount does not include employees from the following companies acquired in December 2021: Acme Cryogenics, Inc. (205 employees) and Engineered Controls International, LLC (725 employees). As is permitted under SECthe rules, to determine our median employee, we chose “base salary” as our consistently applied compensation measure. We estimated annual base salary for hourly workers employed for the entire year using their hourly rate and a reasonable estimate of hours worked for the year. For employees who commenced work during 2018,2021, we annualized their annual base salary. Thirteen countries were excluded (2.7% of the total workforce) under the permissible 5% exclusion when we determined headcount on December 10, 2018, with employee counts as follows: Argentina (28), Austria (3), Costa Rica (17), Czech Republic (42), Dominican Republic (43), Kenya (2), Malaysia (111), Mexico (163), Norway (13), Portugal (12), South Korea (23), Taiwan (24), and Thailand (158). Our headcount was 23,874 employees (11,960 U.S. and 11,914non-U.S.) and after country exclusions 23,235 employees (11,960 U.S. and 11,275non-U.S.). A valid statistical sampling methodology was used to estimate the median base salary of our employees. We then produced a sample of employees who were paid within a 5%0.5% range of that median and selected an employee from within that group as our median employee. We determined that employee’s (Summary Compensation Table) total compensation was $42,889.$48,794 for 2021.
We calculated 20182021 annual total compensation for both our median employee and Mr. Tobin using the same methodology that we use to determine our NEOs’named executive officers’ annual total compensation for the Summary Compensation Table. Because Mr. Tobin became our CEO during 2018, and was the CEO on the determination date of December 10, 2018, we annualized his 2018 compensation by increasing his salary to the amounts he would have received for a full year of service in 2018, so that hisTobin’s total compensation was $28,354,477,$14,085,860 resulting in an estimated ratio of 661:289:1 for CEO pay to median worker pay.
Mr. Tobin’s compensation in 2018 included aone-time, make-whole equity award and cash payment that will not recur in future years. Without the make-whole award, Mr. Tobin’s annualized compensation in 2018 would have been $8,168,700, and would have resulted in an estimated pay ratio of 190:1.
DOVER CORPORATION – 2019 Proxy Statement 59
EXECUTIVE COMPENSATION TABLES
Grants of Plan-Based Awards in 20182021
All awards listed in the table below have a grant date of May 23, 2018 for Mr. Tobin, and February 9, 201812, 2021 for all other executive officers. All equity awards outstanding as of May 9, 2018 were adjusted asFor a result of thespin-off of Apergy to preserve the valuediscussion of the awards, in accordance with the Employee Matters Agreement, dated May 9, 2018, between Doversee “Compensation Discussion and Apergy.Analysis – Elements of Executive Compensation”.
Name | Type | Estimated Future Payouts UnderNon-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | Type | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Share of (#) | All Other Securities | Exercise Price of | Grant Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Thresh- old ($)(1) | Target ($) | Maximum ($) | Thresh- old (#)(1) | Target (#) | Maximum (#) | Threshold ($)(1) | Target ($) | Maximum ($) | Threshold (#)(1) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Richard J. Tobin | SSAR (2) |
| 210,658 |
| $ | 79.75 |
| $ | 3,071,394 |
| AIP (2) |
| 926,250 |
|
| 1,852,500 |
|
| 3,705,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares (3) |
| 93,697 |
|
| 374,788 |
| $ | 7,472,336 |
| SSAR (3) |
| 123,125 |
|
| 122.73 |
|
| 3,580,475 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU (4) |
| 182,329 |
| $ | 14,540,738 |
| Performance |
| 27,703 |
|
| 83,109 |
|
| 4,108,078 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AIP (5) |
| 1,500,000 |
|
| 3,000,000 |
| RSU (5) |
| 13,852 |
|
| 1,700,056 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Robert A. Livingston | SSAR (6) |
| 21,629 |
| $ | 82.09 |
| $ | 333,303 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares (7) |
| 0 |
|
| 0 |
| $ | 0 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU (8) |
| 3,305 |
| $ | 271,307 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AIP (9) |
| 1,375,000 |
|
| 2,750,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brad M. Cerepak | SSAR (6) |
| 58,478 |
| $ | 82.09 |
| $ | 901,146 |
| AIP (2) |
| 365,500 |
| 731,000 |
|
| 1,462,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares (10) |
| 4,873 |
|
| 19,492 |
| $ | 400,025 |
| SSAR (3) |
| 30,781 |
|
| 122.73 |
|
| 895,111 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU (8) |
| 4,873 |
| $ | 400,025 |
| Performance |
| 6,926 |
|
| 20,778 |
|
| 1,027,057 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AIP (11) |
| 705,000 |
|
| 1,410,000 |
| RSU (5) |
| 3,463 |
|
| 425,014 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
William W. Spurgeon, Jr. | SSAR (6) |
| 26,802 |
| $ | 82.09 |
| $ | 413,019 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares (10) |
| 4,020 |
|
| 16,080 |
| $ | 330,002 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU (8) |
| 2,680 |
| $ | 220,001 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AIP (11) |
| 650,000 |
|
| 1,300,000 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Girish Juneja | AIP (2) |
| 175,000 |
| 350,000 |
|
| 700,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SSAR (3) |
| 7,243 |
|
| 122.73 |
|
| 210,626 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance |
| 1,630 |
|
| 4,890 |
|
| 241,713 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU (5) |
| 815 |
|
| 100,025 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ivonne M. Cabrera | SSAR (6) |
| 23,391 |
| $ | 82.09 |
| $ | 360,455 |
| AIP (2) |
| 196,000 |
| 392,000 |
|
| 784,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares (7) |
| 1,949 |
|
| 7,796 |
| $ | 159,994 |
| SSAR (3) |
| 11,588 |
|
| 122.73 |
|
| 336,979 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU (8) |
| 1,949 |
| $ | 159,994 |
| Performance |
| 2,607 |
|
| 7,821 |
|
| 386,592 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AIP (11) |
| 378,000 |
|
| 756,000 |
| RSU (5) |
| 1,304 |
|
| 160,040 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jay L. Kloosterboer | SSAR (6) |
| 23,391 |
| $ | 82.09 |
| $ | 360,455 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance Shares (10) |
| 1,949 |
|
| 7,796 |
| $ | 159,994 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU (8) |
| 1,949 |
| $ | 159,994 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
AIP (11) |
| 378,000 |
|
| 756,000 |
|
DOVER CORPORATION – 2022 Proxy Statement 64
EXECUTIVE COMPENSATION TABLES
Name | Type | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Share of (#) | All Other Securities | Exercise Price of | Grant Stock | |||||||||||||||||||||||||||||||||||
Thresh-old ($)(1) | Target ($) | Maximum ($) | Thresh-old (#)(1) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||
Kimberly K. Bors | AIP (2) |
| 157,500 |
| 315,000 |
|
| 630,000 |
| |||||||||||||||||||||||||||||||||
SSAR (3) |
| 7,677 |
|
| 122.73 |
|
| 223,247 |
| |||||||||||||||||||||||||||||||||
Performance |
| 1,727 |
|
| 5,181 |
|
| 256,097 |
| |||||||||||||||||||||||||||||||||
RSU (5) |
| 864 |
|
| 106,039 |
|
(1) | Represents the minimum amount payable for a certain level of performance. Under each of our plans, there is no guaranteed minimum payment. |
(2) | The amounts shown in this row reflect the potential payouts in February 2022 for 2021 under the AIP. The bonus amount actually paid in February 2022 is disclosed in the Summary Compensation Table in the column “Bonus” for 2021 for the executive officer. |
(3) | Represents an award of SSARs under the 2012 LTIP that will not be exercisable until |
Represents an award of performance shares under the 2012 LTIP. The performance shares vest and become payable after the three-year performance period ending December 31, |
DOVER CORPORATION – 2019 Proxy Statement 60
EXECUTIVE COMPENSATION TABLES
performance share awards are considered |
Represents an award of RSUs under the 2012 LTIP made on |
|
|
|
|
|
|
|
DOVER CORPORATION –20192022 Proxy Statement 6165
EXECUTIVE COMPENSATION TABLES
Outstanding Equity Awards at FiscalYear-End 20182021
Awards listed below with grant dates beginning in 2013 were made under the LTIP. Awards listed below with grant dates between 2006 through 2012 were made under the 2005 Plan.LTIP. All equity awards outstanding as of May 9, 2018 were adjusted as a result of thespin-off of Apergy to preserve the value of the awards in accordance with the Employee Matters Agreement, dated May 9, 2018, between Dover and Apergy.
Effective May 7, 2021, we adopted the 2021 LTIP. All future grants of equity awards will be made under the 2021 LTIP.
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Unvested | Option Exercise Price ($) | Option Expiration Date | Number of of Stock That Have Not | Market Vested ($) | Equity Units or | Equity Market or | |||||||||||||||||||||||||
Richard J. Tobin |
| 210,658 | (1) |
| 79.75 |
|
| 5/23/2028 |
| |||||||||||||||||||||||
| 131,683 | (11) |
| 9,342,909 | (16) |
| 75,971 | (17) |
| 5,390,142 | (20) | |||||||||||||||||||||
| 17,726 | (12) |
| 1,257,660 | (16) |
| 17,726 | (17) |
| 1,257,660 | (20) | |||||||||||||||||||||
Robert A. Livingston |
| 21,629 | (2) |
| 82.09 |
|
| 4/30/2023 |
| |||||||||||||||||||||||
| 242,348 | (3) |
| 66.85 |
|
| 4/30/2023 |
| ||||||||||||||||||||||||
| 323,174 | (4) |
| 48.28 |
|
| 4/30/2023 |
| ||||||||||||||||||||||||
| 252,480 | (5) |
| 61.79 |
|
| 4/30/2023 |
| ||||||||||||||||||||||||
| 224,236 | (6) |
| 69.57 |
|
| 4/30/2023 |
| ||||||||||||||||||||||||
| 348,340 | (7) |
| 53.40 |
|
| 2/14/2023 |
| ||||||||||||||||||||||||
| 3,305 | (13) |
| 234,490 | (16) | |||||||||||||||||||||||||||
| 13,463 | (14) |
| 955,200 | (16) | |||||||||||||||||||||||||||
| 8,976 | (15) |
| 636,847 | (16) | |||||||||||||||||||||||||||
Brad M. Cerepak |
| 58,478 | (2) |
| 82.09 |
|
| 2/9/2028 |
| |||||||||||||||||||||||
| 71,806 | (3) |
| 66.85 |
|
| 2/10/2027 |
| ||||||||||||||||||||||||
| 91,981 | (4) |
| 48.28 |
|
| 2/11/2026 |
| ||||||||||||||||||||||||
| 71,860 | (5) |
| 61.79 |
|
| 2/12/2025 |
| ||||||||||||||||||||||||
| 60,371 | (6) |
| 69.57 |
|
| 3/10/2024 |
| ||||||||||||||||||||||||
| 93,732 | (7) |
| 53.40 |
|
| 2/14/2023 |
| ||||||||||||||||||||||||
| 56,605 | (8) |
| 48.59 |
|
| 2/9/2022 |
| ||||||||||||||||||||||||
| 44,462 | (9) |
| 49.49 |
|
| 2/10/2021 |
| ||||||||||||||||||||||||
| 4,873 | (13) |
| 345,739 | (16) |
| 4,873 | (18) |
| 345,739 | (20) | |||||||||||||||||||||
| 3,989 | (14) |
| 283,020 | (16) |
| 5,983 | (19) |
| 424,494 | (20) | |||||||||||||||||||||
| 2,555 | (15) |
| 181,277 | (16) | |||||||||||||||||||||||||||
William W. Spurgeon, Jr. |
| 26,802 | (2) |
| 82.09 |
|
| 2/9/2028 |
| |||||||||||||||||||||||
| 32,911 | (3) |
| 66.85 |
|
| 2/10/2027 |
| ||||||||||||||||||||||||
| 45,575 | (4) |
| 48.28 |
|
| 2/11/2026 |
| ||||||||||||||||||||||||
| 35,606 | (5) |
| 61.79 |
|
| 2/12/2025 |
| ||||||||||||||||||||||||
| 28,747 | (6) |
| 69.57 |
|
| 3/10/2024 |
| ||||||||||||||||||||||||
| 33,709 | (7) |
| 53.40 |
|
| 2/14/2023 |
| ||||||||||||||||||||||||
| 2,680 | (13) |
| 190,146 | (16) |
| 4,020 | (18) |
| 285,219 | (20) | |||||||||||||||||||||
| 2,194 | (14) |
| 155,664 | (16) |
| 4,936 | (19) |
| 350,209 | (20) | |||||||||||||||||||||
| 1,519 | (15) |
| 107,773 | (16) |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Prices ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have not Vested ($) | ||||||||||||||||||||||||||||
Richard J. Tobin | 123,125 (1) | 122.73 | 2/12/2031 | |||||||||||||||||||||||||||||||||
118,657 (2) | 119.86 | 2/14/2030 | ||||||||||||||||||||||||||||||||||
184,211 (3) | 91.20 | 2/15/2029 | ||||||||||||||||||||||||||||||||||
210,658 (4) | 79.75 | 5/23/2028 | ||||||||||||||||||||||||||||||||||
13,852 (11) | 2,515,523 (15) | 27,703 (16) | 5,030,865 (18) | |||||||||||||||||||||||||||||||||
8,900 (12) | 1,616,240 (15) | 26,698 (17) | 4,848,357 (18) | |||||||||||||||||||||||||||||||||
5,117 (13) | 929,247 (15) | |||||||||||||||||||||||||||||||||||
32,923 (14) | 5,978,817 (15) | |||||||||||||||||||||||||||||||||||
Brad M. Cerepak | 30,781 (1) | 122.73 | 2/12/2031 | |||||||||||||||||||||||||||||||||
29,664 (2) | 119.86 | 2/14/2030 | ||||||||||||||||||||||||||||||||||
52,632 (3) | 91.20 | 2/15/2029 | ||||||||||||||||||||||||||||||||||
58,478 (5) | 82.09 | 2/9/2028 | ||||||||||||||||||||||||||||||||||
71,806 (6) | 66.85 | 2/10/2027 | ||||||||||||||||||||||||||||||||||
91,981 (7) | 48.28 | 2/11/2026 | ||||||||||||||||||||||||||||||||||
71,860 (8) | 61.79 | 2/12/2025 | ||||||||||||||||||||||||||||||||||
3,463 (11) | 628,881 (15) | 6,926 (16) | 1,257,762 (18) | |||||||||||||||||||||||||||||||||
2,225 (12) | 404,060 (15) | 6,674 (17) | 1,211,998 (18) | |||||||||||||||||||||||||||||||||
1,462 (13) | 265,499 (15) | |||||||||||||||||||||||||||||||||||
Girish Juneja | 7,243 (1) | 122.73 | 2/12/2031 | |||||||||||||||||||||||||||||||||
7,416 (2) | 119.86 | 2/14/2030 | ||||||||||||||||||||||||||||||||||
11,842 (3) | 91.20 | 2/15/2029 | ||||||||||||||||||||||||||||||||||
11,695 (5) | 82.09 | 2/9/2028 | ||||||||||||||||||||||||||||||||||
815 (11) | 148,004 (15) | 1,630 (16) | 296,008 (18) | |||||||||||||||||||||||||||||||||
556 (12) | 100,970 (15) | 1,669 (17) | 303,090 (18) | |||||||||||||||||||||||||||||||||
329 (13) | 59,746 (15) | |||||||||||||||||||||||||||||||||||
Ivonne M. Cabrera | 11,588 (1 | ) | 122.73 | 2/12/2031 | ||||||||||||||||||||||||||||||||
11,866 (2 | ) | 119.86 | 2/14/2030 | |||||||||||||||||||||||||||||||||
21,053 (3 | ) | 91.20 | 2/15/2029 | |||||||||||||||||||||||||||||||||
23,391 (5 | ) | 82.09 | 2/9/2028 | |||||||||||||||||||||||||||||||||
28,722 (6 | ) | 66.85 | 2/10/2027 | |||||||||||||||||||||||||||||||||
39,775 (7 | ) | 48.28 | 2/11/2026 | |||||||||||||||||||||||||||||||||
31,074 (8 | ) | 61.79 | 2/12/2025 | |||||||||||||||||||||||||||||||||
25,873 (9 | ) | 69.57 | 3/10/2024 | |||||||||||||||||||||||||||||||||
28,841 (10 | ) | 53.40 | 2/14/2023 | |||||||||||||||||||||||||||||||||
1,304 (11 | ) | 236,806 (15 | ) | 2,607 (16 | ) | 473,431 (18 | ) | |||||||||||||||||||||||||||||
890 (12 | ) | 161,624 (15 | ) | 2,670 (17 | ) | 484,872 (18 | ) | |||||||||||||||||||||||||||||
585 (13 | ) | 106,236 (15 | ) | |||||||||||||||||||||||||||||||||
Kimberly K. Bors | 7,677 (1 | ) | 122.73 | 2/12/2031 | ||||||||||||||||||||||||||||||||
7,416 (2 | ) | 119.86 | 2/14/2030 | |||||||||||||||||||||||||||||||||
864 (11 | ) | 156,902 (15 | ) | 1,727 (16 | ) | 313,623 (18 | ) | |||||||||||||||||||||||||||||
556 (12 | ) | 100,970 (15 | ) | 1,669 (17 | ) | 303,090 (18 | ) |
DOVER CORPORATION – 20192022 Proxy Statement 6266
EXECUTIVE COMPENSATION TABLES
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||
Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Unvested | Option Exercise Price ($) | Option Expiration Date | Number of of Stock That Have Not | Market Vested ($) | Equity Units or | Equity Market or | |||||||||||||||||||||||||
Ivonne M. Cabrera |
| 23,391 | (2) |
| 82.09 |
|
| 2/9/2028 |
| |||||||||||||||||||||||
| 28,722 | (3) |
| 66.85 |
|
| 2/10/2027 |
| ||||||||||||||||||||||||
| 39,775 | (4) |
| 48.28 |
|
| 2/11/2026 |
| ||||||||||||||||||||||||
| 31,074 | (5) |
| 61.79 |
|
| 2/12/2025 |
| ||||||||||||||||||||||||
| 25,873 | (6) |
| 69.57 |
|
| 3/10/2024 |
| ||||||||||||||||||||||||
| 28,841 | (7) |
| 53.40 |
|
| 2/14/2023 |
| ||||||||||||||||||||||||
| 9,880 | (8) |
| 48.59 |
|
| 2/9/2022 |
| ||||||||||||||||||||||||
| 13,337 | (9) |
| 49.49 |
|
| 2/10/2021 |
| ||||||||||||||||||||||||
| 20,713 | (10) |
| 31.87 |
|
| 2/11/2020 |
| ||||||||||||||||||||||||
| 1,949 | (13) |
| 138,282 | (16) |
| 1,949 | (18) |
| 138,282 | (20) | |||||||||||||||||||||
| 1,596 | (14) |
| 113,236 | (16) |
| 2,393 | (19) |
| 169,783 | (20) | |||||||||||||||||||||
| 1,105 | (15) |
| 78,400 | (16) | |||||||||||||||||||||||||||
Jay L. Kloosterboer |
| 23,391 | (2) |
| 82.09 |
|
| 2/9/2028 |
| |||||||||||||||||||||||
| 28,722 | (3) |
| 66.85 |
|
| 2/10/2027 |
| ||||||||||||||||||||||||
| 39,775 | (4) |
| 48.28 |
|
| 2/11/2026 |
| ||||||||||||||||||||||||
| 31,074 | (5) |
| 61.79 |
|
| 2/12/2025 |
| ||||||||||||||||||||||||
| 27,598 | (6) |
| 69.57 |
|
| 3/10/2024 |
| ||||||||||||||||||||||||
| 32,960 | (7) |
| 53.40 |
|
| 2/14/2023 |
| ||||||||||||||||||||||||
| 1,949 | (13) |
| 138,282 | (16) |
| 1,949 | (18) |
| 138,282 | (20) | |||||||||||||||||||||
| 1,596 | (14) |
| 113,236 | (16) |
| 2,393 | (19) |
| 169,783 | (20) | |||||||||||||||||||||
| 1,105 | (15) |
| 78,400 | (16) |
(1) | SSARs granted on February 12, 2021 that are not exercisable until February 12, 2024. |
(2) | SSARs granted on February 14, 2020 that are not exercisable until February 14, 2023. |
(3) | SSARs granted on February 15, 2019 that became exercisable on February 15, 2022. |
(4) | SSARs granted on May 23, 2018 that became exercisable on May 23, 2021. |
SSARs granted on February 9, 2018 that |
SSARs granted on February 10, 2017 that |
SSARs granted on February 11, 2016 that became exercisable on February 11, 2019. |
SSARs granted on February 12, 2015 that became exercisable on February 12, 2018. |
SSARs granted on March 10, 2014 that became exercisable on March 10, 2017. |
SSARs granted on February 14, 2013 that became exercisable on February 14, 2016. |
|
|
|
Unvested portion of RSUs granted on May 23, 2018. The units vest in five equal annual installments beginning on December 15, 2018. |
|
|
DOVER CORPORATION – 2019 Proxy Statement 63
EXECUTIVE COMPENSATION TABLES
|
(15) |
|
The amount reflects the number of units granted multiplied by |
Performance shares granted on |
Performance shares granted on February |
|
The amount reflects the number of performance shares payable based on achievement of the target level of performance multiplied by |
Option Exercises and Stock Vested in 20182021
Name | Option Awards | Stock Awards | Number of Shares Acquired on Exercise (#)(1) | Value Realized | Number of Shares | Value Realized | ||||||||||||||||||||||||
Number of Shares Exercise (#)(1) | Value Realized | Number of Shares Vesting (#)(3) | Value Realized | |||||||||||||||||||||||||||
Richard J. Tobin | 32,920 | 2,538,626 |
| 94,449 |
|
| 16,041,842 |
| ||||||||||||||||||||||
Robert A. Livingston | 1,124,319 | 49,529,457 | 19,159 | 1,893,772 | ||||||||||||||||||||||||||
Brad M. Cerepak | 69,047 | 3,211,031 | 5,518 | 545,442 |
| 60,371 |
|
| 6,409,891 |
|
| 17,357 |
|
| 2,954,804 |
| ||||||||||||||
William W. Spurgeon, Jr. | 5,438 | 475,277 | ||||||||||||||||||||||||||||
Girish Juneja |
| 3,893 |
|
| 663,193 |
| ||||||||||||||||||||||||
Ivonne M. Cabrera | 2,332 | 230,501 |
| 9,880 |
|
| 784,423 |
|
| 6,942 |
|
| 1,181,758 |
| ||||||||||||||||
Jay L. Kloosterboer | 67,308 | 2,036,513 | 2,332 | 230,501 | ||||||||||||||||||||||||||
Kimberly K. Bors |
| 278 |
|
| 37,427 |
|
(1) | Represents exercise of SSARs; number of shares reported as acquired is the total number of shares underlying the SSAR, rather than the net number of shares received by the NEO. |
(2) | The “value realized on exercise” provided in the table represents the difference between the average of the high and low trading price on the exercise date and the exercise or base price, multiplied by the number of shares acquired upon exercise of the award. |
(3) | This column represents the vesting of a portion of the |
(4) | This value represents |
DOVER CORPORATION – 20192022 Proxy Statement 6467
EXECUTIVE COMPENSATION TABLES
Pension Benefits through 20182021
Name | Plan Name | Number of (#) | Normal (#) | Present ($)(1) | Payments During Last Fiscal Year ($) | |||||||||||||
Richard J. Tobin (2) |
Pension Plan
|
| N/A
|
|
| N/A
|
|
| N/A
|
|
| N/A
|
| |||||
PRP
|
| N/A
|
|
| N/A
|
|
| N/A
|
|
| N/A
|
| ||||||
Robert A. Livingston (3), (4) |
Pension Plan
|
| N/A
|
|
| 65
|
|
| N/A
|
|
| 572,659
|
| |||||
PRP
|
| N/A
|
|
| 65
|
|
| 4,089,510
|
|
| 12,877,327
|
| ||||||
Brad M. Cerepak |
Pension Plan
|
| 10.0
|
|
| 65
|
|
| 364,112
|
|
| N/A
|
| |||||
PRP
|
| 9.6
|
|
| 65
|
|
| 1,504,502
|
|
| N/A
|
| ||||||
William W. Spurgeon, Jr. (5), (6) |
Pension Plan
|
| 26.0
|
|
| 65
|
|
| 950,019
|
|
| N/A
|
| |||||
PRP
|
| 25.9
|
|
| 65
|
|
| 6,109,316
|
|
| N/A
|
| ||||||
Ivonne M. Cabrera (5), (7) |
Pension Plan
|
| 15.6
|
|
| 65
|
|
| 395,806
|
|
| N/A
|
| |||||
PRP
|
| 14.9
|
|
| 65
|
|
| 903,480
|
|
| N/A
|
| ||||||
Jay L. Kloosterboer |
Pension Plan
|
| 10.0
|
|
| 65
|
|
| 341,829
|
|
| N/A
|
| |||||
PRP
|
| 10.0
|
|
| 65
|
|
| 754,155
|
|
| N/A
|
|
Name | Plan Name | Number of Years Credited Service (#) | Normal Retirement Age (#) | Present Value of Accumulated Benefit ($)(1) | Payments During Last Fiscal Year ($) | |||||||||||||
Richard J. Tobin (2) | Pension Plan |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
| |||||
PRP |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
| ||||||
Brad M. Cerepak | Pension Plan |
| 13.0 |
|
| 65 |
|
| 659,470 |
|
| N/A |
| |||||
PRP |
| 12.6 |
|
| 65 |
|
| 2,594,332 |
|
| N/A |
| ||||||
Girish Juneja (2) | Pension Plan |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
| |||||
PRP |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
| ||||||
Ivonne M. Cabrera (3) | Pension Plan |
| 18.6 |
|
| 65 |
|
| 730,962 |
|
| N/A |
| |||||
PRP |
| 17.9 |
|
| 65 |
|
| 1,555,674 |
|
| N/A |
| ||||||
Kimberly K. Bors | Pension Plan |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
| |||||
PRP |
| N/A |
|
| N/A |
|
| N/A |
|
| N/A |
|
(1) | This amount was earned by the |
(2) | Mr. Tobin, |
(3) |
|
|
|
service, and the portion of her PRP benefit accrued from January 1, 2010 through December 31, 2021 payable unreduced at age 65. The present value of |
|
The amounts shown in the Pension Benefits table above are actuarial present values of the benefits accumulated through December 31, 2018.2021. An actuarial present value is calculated by estimating expected future payments starting at an assumed retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and discounting the weighted payments at an assumed discount rate to reflect the time value of money. The actuarial present value represents an estimate of the amount which, if invested today at the assumed discount rate, would be sufficient on an average basis to provide estimated future payments totaling the current accumulated benefit. For purposes of the table, the assumed retirement age for each NEO is 65, the normal retirement age under each plan. Actual benefit present values will vary from these estimates depending on many factors, including an executive’s actual retirement age.
Pension Plan
We have a pension plan for which eligible Dover employees, and the salaried employees of our participating subsidiaries, were eligible to become participants after they completed one year of service. Benefits under the pension plan for Dover employees, including those for the applicable NEOs, are determined by multiplying a participant’s years of
DOVER CORPORATION – 2019 Proxy Statement 65
EXECUTIVE COMPENSATION TABLES
credited service (up to a maximum of 35 years) by a percentage of their final average compensation, subject to statutory limits applicable totax-qualified pension plans. Benefits for a number of the participating subsidiaries are determined under different benefit formulae.
Pension plan participants generally vest in their benefits after five years of employment or, if earlier, upon reaching age 65, which is the normal retirement age under the plan. All NEOs who participate in the pension plan are vested in their pension plan benefits and are eligible to begin receiving reduced benefits if their employment terminates before normal retirement age.
Effective December 31, 2013, the pension plan is closed to new employees. All pension eligible employees as of December 31, 2013 will continue to earn pension benefits through December 31, 2023 as long as they remain employed by an operating company participating in the plan. It is Dover’s present intention to eliminate any future benefit accruals after December 31, 2023.
DOVER CORPORATION – 2022 Proxy Statement 68
EXECUTIVE COMPENSATION TABLES
Pension Replacement Plan
We also maintain the PRP, which is anon-qualified plan for tax purposes, to provide benefits to certain employees whose compensation and pension plan benefits are greater than the compensation and benefit limits applicable totax-qualified pension plans. Prior to January 1, 2010, our plan which providednon-qualified retirement benefits was the Supplemental Executive Retirement Plan (“SERP”). Effective January 1, 2010, the SERP was amended to provide reduced benefits that are more consistent with the benefits provided under the pension plan and its name was changed to the PRP.
Employees are eligible to participate in the PRP if they hold certain positions within Dover, or its subsidiaries, are U.S. taxpayers and earn more than a set percentage above the Internal Revenue Code’s compensation limits fortax-qualified pension plans. Dover’s CEO may designate other employees as eligible and may revoke the eligibility of participants.
The formula for determining benefits accrued under the PRP after December 31, 2009, before offsets, is determined using the same benefit formula as under the pension plan, except that the Internal Revenue Code’s limits on compensation and benefits applicable totax-qualified pension plans will not apply. Benefits under the former SERP, before offsets, were determined by multiplying the participant’s years of actual service with Dover companies, plus, in limited cases, prior service credit by a percentage of the participant’s final average compensation as defined under the plan.
Benefits payable under the PRP or SERP are reduced by the amount of Company-provided benefits under any other retirement plans, including the pension plan, as well as the Company-paid portion of social security benefits. PRP participants must complete five years of service to vest in their benefits. All NEOs who participate in the PRP are fully vested in their benefits and will commence receiving benefits upon termination of employment. PRP benefits may be forfeited for “cause” (defined as conviction of a felony which places a Dover company at legal or other risk or is expected to cause substantial harm to the business of a Dover company or its relationships with employees, distributors, customers or suppliers).
Normal retirement age for purposes of the PRP is age 65. Certain employees who were participants on or before March 1, 2010 will be entitled to receive the portion of their benefits that accrued through December 31, 2009 without any reduction due to early retirement if they retire after they reach age 62 and complete 10 years of service. Generally, benefits accrued after December 31, 2009 will be subject to early retirement reduction factors consistent with the reduction factors in the pension plan.
Effective December 31, 2013, the PRP is closed to new employees. All eligible employees as of December 31, 2013 will continue to earn to their PRP benefits through December 31, 2023 as long as they remain employed by Dover and its affiliates. It is Dover’s intention to eliminate any future benefit accruals after December 31, 2023, consistent with the freezing of benefit accruals under the pension plan.
DOVER CORPORATION – 2019 Proxy Statement 66
EXECUTIVE COMPENSATION TABLES
Nonqualified Deferred Compensation in 20182021
Name | Plan Name | Executive contributions in last FY ($)(1) | Registrant contributions in last FY ($) | Aggregate earnings ($) | Aggregate distributions ($) | Aggregate balance ($) | Plan Name | Executive contributions in last FY ($)(1) | Registrant contributions in last FY ($) | Aggregate earnings ($) | Aggregate distributions ($) | Aggregate balance ($) | ||||||||||||||||||||||||||||||||
Richard J. Tobin | Deferred Compensation Plan | 171,154 | N/A | (12,585 | ) | N/A | 158,569 | Deferred Compensation Plan | 1,048,206 | 116,845 | 47,504 | N/A | 2,978,962 | |||||||||||||||||||||||||||||||
Robert A. Livingston | Deferred Compensation Plan | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||
Executive Deferred Income Plan (2) | N/A | N/A | 13,115 | 2,972 | 412,616 | |||||||||||||||||||||||||||||||||||||||
Brad M. Cerepak | Deferred Compensation Plan | N/A | N/A | N/A | N/A | N/A | Deferred Compensation Plan | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
William W. Spurgeon, Jr. | Deferred Compensation Plan | 258,833 | N/A | (266,865 | ) | N/A | 2,558,772 | |||||||||||||||||||||||||||||||||||||
Girish Juneja | Deferred Compensation Plan | 564,108 | 20,604 | 57,348 | N/A | 2,208,499 | ||||||||||||||||||||||||||||||||||||||
Ivonne M. Cabrera | Deferred Compensation Plan | N/A | N/A | (14,452 | ) | N/A | 110,562 | Deferred Compensation Plan | N/A | N/A | 40,416 | N/A | 212,351 | |||||||||||||||||||||||||||||||
Jay L. Kloosterboer | Deferred Compensation Plan | N/A | N/A | (714 | ) | N/A | 60,129 | |||||||||||||||||||||||||||||||||||||
Kimberly K. Bors | Deferred Compensation Plan | 44,577 | 1,477 | 2,620 | N/A | 75,289 |
(1) | If any amounts were shown as executive contributions in |
DOVER CORPORATION – 2022 Proxy Statement 69 EXECUTIVE COMPENSATION TABLES |
Our deferred compensation plan is a nonqualified plan that permits select key management and highly compensated employees on a U.S. payroll with an annual salary equal to or greater than $175,000 for 2021 deferrals and $250,000 for 2022 deferrals to irrevocably elect to defer a portion of their salary and bonus. The deferred compensation plan provides participants who are not eligible to participate in the Pension Replacement PlanPRP with the same level of matching and other employer contributions that they would have received if certain compensation limits under our Retirement Savings plan did not apply. Our NEOsOnly Mr. Cerepak and Ms. Cabrera participate in the Pension Replacement PlanPRP and are therefore not eligible to receive matching and other employer contributions under the deferred compensation plan. AsThe plan, as amended the planeffective January 1, 2022, operates similar to an “excess” deferred compensation plan in that it provides for employer contributions on salary and bonuses in excess of the compensation limit permitted under thetax-qualified retirement savings plan.
Under the amended deferred compensation plan, an eligible participant’s account will be credited each year with matchingautomatic employer contributions onequal to 4.5% of the amount by which the eligible participant’s salary and bonus deferredexceed the limitation imposed under the plan eachInternal Revenue Code Section 401(a)(17) for such year on or after January 1, 2014, at the same rate as under our retirement savings plan plus additional employer contributions at the same rate that the participant’s business unit makes “automatic” contributions under our retirement savings plan each year.
Amounts deferred under the plan are credited with hypothetical investment earnings based on the participant’s investment elections made from among investment options designated under the plan. Participants are 100% vested in all amounts they defer, as adjusted for any earnings and losses on such deferred amounts. Effective as of January 1, 2010, a hypothetical investment option that tracks the value of Dover common stock, including any dividend payments, was added to the plan. This Dover stock unit fund does not actually hold any Dover stock, and
DOVER CORPORATION – 2019 Proxy Statement 67
EXECUTIVE COMPENSATION TABLES
participants who elect to participate in this option do not own any Dover common stock, or have any voting or other rights associated with the ownership of our common stock. Participants’ accounts are credited with the net returns of shares of our common stock equal to the number of stock units held by the participant. All distributions from the stock unit fund will be paid in cash. Balances allocated into the stock unit fund must remain in the stock unit fund for the remainder of the participant’s participation in the plan.
Generally, deferred amounts will be distributed from the plan only on account of retirement at age 65 (or age 55 with 10 years of service), disability or other termination of service, or at a scheduledin-service withdrawal date chosen by the participant.
Potential Payments upon Termination orChange-in-Control Change in Control
The discussion and tablestable below describe the incremental payments or values to which each of the NEOs would be entitled in the event of termination of such executive’s employment or achange-in-control.
In November 2010, Dover adopted change in control. The only compensation plans under which an executive severance plan (the “severance plan”) and senior executive CIC severance plan. See “Compensation Discussion and Analysis — Other Compensation Programs and Policies” for a description of the plans. The severance plan creates a consistent and transparent severance policy for determining benefits for all similarly-situated executives and formalizes Dover’s current executive severance practices. All of our executives, including our NEOs,may be entitled to incremental payments are eligible to participate in the severance plan. The CIC severance plan likewise establishes a consistent policy regarding double-triggerchange-in-control severance payments based on current market practices. The CIC severance plan applies to all executives who are subject to Dover’s senior executive shareholding guidelines on the date of achange-in-control (as defined in the plan), including all NEOs. Each of the severance plan, the CIC Severance Plan and the CIC severance plan gives Dover the right to recover amounts paid to an executive2012 and 2021 LTIP. No incremental values would be payable under the PRP, pension plan as required under any clawback policy of Dover as in effect from time to time or under applicable law.
The 2005 Plan, the LTIP and Dover’s other benefit plans each have their own provisions relating to rights and obligations under thedeferred compensation plan upon termination.
The table below shows the aggregate amount of potential payments and other benefits that each NEO would have been entitled to receive if his employment had terminated in certain circumstances, other than as a result of achange-in-control, on December 31, 2018. The amounts shown assume that termination was effective as of December 31, 2018, include amounts earned through such timeevent or change in control.
Voluntary termination. If an NEO voluntarily terminates his or her employment, he or she will not be entitled to any incremental payments and are estimates ofunvested equity awards will be forfeited, unless the amounts which could have been paid out to the executives upon their termination at that time. The actual amounts to be paid out can only be determined at the time of each executive’s separation from our Company. Annual bonuses are discretionary and are therefore omitted from the tables. No NEO wasexecutive is eligible for normal retirement as of December 31, 2018 so we have omitted that column from the table. As of December 31, 2018, Mr. Spurgeon is eligible foror early retirement under the Rule2012 and 2021 LTIP as discussed below.
Involuntary termination without cause. If Dover terminates the employment of 70 (as defined below)an NEO without cause (excluding termination due to death or disability), the NEO will be entitled to a cash severance payment under the 2005 Plan and LTIPseverance plan consisting of:
An amount equal to base salary plus target annual cash bonus for 12 months following the date of termination;
A pro rata portion (based on the completed calendar months worked in respectthe year of termination) of the NEO’s target annual incentive bonus payable for the year of termination, subject to all awardspotential reduction in the discretion of the Compensation Committee based upon attainment of the applicable performance criteria;
A pro rata performance share award granted prior to August 6, 2014, and the Rule of 65 under the 2012 or 2021 LTIP for awards grantedhaving a scheduled payment date next following the date of termination (based on or after August 6, 2014. Mr. Livingston retired as of April 30, 2018, prior toyear-end and, accordingly, he is not includedthe completed calendar months worked in the tables below. Mr. Tobin is obligated to repay the $1,000,000 cash payment he received as partyear of his one-time make-whole grant if he terminates his employment without good reason or if Dover terminates his employment for cause, as such terms are defined in the employment agreement, prior to May 1, 2019, and he is required to repay apro-rata portion of this amount if his employment is terminated without good reason or for cause prior to May 1, 2020. For a discussiontermination) based upon attainment of the special termination provisionsperformance criteria applicable to Mr. Tobin pursuantthe award as determined by the Compensation Committee;
Outplacement services, at the company’s discretion, for 12 months up to his employment agreement, see “CEO Employment Agreement” on page 58.
Normal retirement is defined as (i) age 65 under the pension plan and PRP (however, as noted in the PRP plan description, Mr. Spurgeon and Ms. Cabrera can receive an unreduced portiona maximum cost of their PRP benefit as of age 62), (ii) age 65 (or 55 with 10 years of service) under the deferred compensation plan,$25,000; and (iii) age 62 under the LTIP for awards prior to August 6, 2014 and 65 for all grants thereafter. Early retirement is defined in each of the deferred compensation plan, the PRP and the pension plan as described in the applicable plan description above.
DOVER CORPORATION – 20192022 Proxy Statement 6870
EXECUTIVE COMPENSATION TABLES
With respectA lump sum payment equal to the then cost of COBRA health continuation coverage, based on the level of health care coverage in effect on the termination date, for 12 months.
Unvested equity awards will be forfeited.
Retirement (for awards made in 2020 and earlier). Under the 2012 LTIP, an NEO eligible for normal or early retirement will be entitled to continued vesting of SSARs and restricted stock unit awards for 24 months in the case of early retirement under the LTIP,Rule of 65, 36 months in the case of early retirement under the Rule of 70 and 60 months in the case of normal retirement at or after age 65. In the case of normal retirement, the outstanding performance share awards for the performance period ending the soonest will continue to vest, subject to the satisfaction of the applicable performance targets. In the case of early retirement under the Rule of 65 or 70, outstanding performance share awards are payable, subject to the satisfaction of the applicable performance targets, only at the Compensation Committee’s discretion.
Early retirement under the 2012 LTIP is defined as termination for any reason other than normal retirement, death, disability or cause, under one of the following circumstances:circumstances applicable to the NEOs:
The executive has at least 10 years of service with a Dover company, the sum of his or her age and years of service on the date of termination equals at least 65, and for awards granted on or after August 6, 2014, is at least 55 years old (the “Rule of 65”), and the executive complies with certain notice requirements; or
The executive has at least 15 years of service with a Dover company, the sum of his or her age and years of service on the date of termination equals at least 70, and for awards granted on or after August 6, 2014, is at least 60 years old (the “Rule of 70”), and the executive complies with certain notice requirements; or
The executive’s employment terminates because the company or line of business in which he or she is employed is sold and the executive remains employed in good standing through the closing date of the sale (“sale of a company”).requirements.
Any person who takes early or normal retirement under the 2012 LTIP is deemed to have expressly agreed that he or she will not compete with us on the following terms: the participant will not compete with us or any of our companies at which he or she was employed within the three years immediately prior to his or her termination, in the geographic areas in which we or that company actively carried on business at the end of the participant’s employment, for the period during which such retirement affords him or her enhanced benefits.
DOVER CORPORATION – 2019 Proxy Statement 69
EXECUTIVE COMPENSATION TABLES
benefits (24 months in the case of the Rule of 65, 36 months in the case of the Rule of 70 or 60 months in the case of normal retirement). If the participant fails to comply with thenon-compete provision, he or she forfeits theany enhanced benefits referred to aboveunder the 2012 LTIP and must return to Dover the economic value previously realized by reason of such benefits.
Voluntary Termination ($)(1) | Involuntary Not for Cause Termination ($)(2) | For Cause Termination ($)(3) | Early Retirement ($) | |||||
Richard J. Tobin | ||||||||
Cash severance (4) | N/A | 4,050,000 | N/A | N/A | ||||
Performance share award (5) | 0 | 5,390,142 | 0 | N/A | ||||
Stock options/SSARs (6) | 0 | 0 | 0 | N/A | ||||
Restricted Stock Units (7) | 0 | 9,342,909 | 0 | N/A | ||||
Retirement plan payments (8) | N/A | N/A | N/A | N/A | ||||
Deferred comp plan | 158,569 | 158,569 | 158,569 | N/A | ||||
Health and welfare benefits (10) | 0 | 35,598 | 0 | N/A | ||||
Outplacement | N/A | 10,000 | N/A | N/A | ||||
Total: | 158,569 | 18,987,218 | 158,569 | N/A | ||||
Brad M. Cerepak | ||||||||
Cash severance (4) | N/A | 1,675,000 | N/A | N/A | ||||
Performance share award (5) | 0 | 0 | 0 | N/A | ||||
Stock options/SSARs (6) | 4,606,389 | 4,606,389 | 0 | N/A | ||||
Restricted Stock Units (7) | 0 | 0 | 0 | N/A | ||||
Retirement plan payments (8) | 1,743,926 | 1,743,926 | 353,975 | N/A | ||||
Deferred comp plan | 0 | 0 | 0 | N/A | ||||
Health and welfare benefits (10) | 0 | 23,732 | 0 | N/A | ||||
Outplacement | N/A | 10,000 | N/A | N/A | ||||
Total: | 6,350,315 | 8,059,047 | 353,975 | N/A | ||||
William W. Spurgeon, Jr. | ||||||||
Cash severance (4) | N/A | 1,290,000 | N/A | N/A | ||||
Performance share award (5) | N/A | 508,499 | 0 | 508,499 | ||||
Stock options/SSARs (6) | N/A | 2,125,535 | 0 | 2,125,535 | ||||
Restricted Stock Units (7) | N/A | 390,154 | 0 | 390,154 | ||||
Retirement plan payments (8) | N/A | 8,359,592 | 923,852 | 8,359,592 | ||||
Deferred comp plan (9) | N/A | 2,558,772 | 2,558,772 | 2,558,772 | ||||
Health and welfare benefits (10) | N/A | 18,755 | 0 | 0 | ||||
Outplacement | N/A | 10,000 | N/A | N/A | ||||
Total: | N/A | 15,261,307 | 3,482,624 | 13,942,552 |
Retirement (for awards made in 2021 onwards). Under the 2012 and 2021 LTIP, an NEO eligible for normal or early retirement will be entitled to continued vesting of SSARs and restricted stock unit awards for 36 months in the case of early retirement and 60 months in the case of normal retirement at or after age 62. In the case of normal retirement, the outstanding performance share awards for the performance period ending the soonest will continue to vest, subject to the satisfaction of the applicable performance targets. In the case of early retirement, outstanding performance share awards are payable, subject to the satisfaction of the applicable performance targets, only at the Compensation Committee’s discretion.
DOVER CORPORATION –2019 Proxy Statement 70
EXECUTIVE COMPENSATION TABLESAny person who takes early or normal retirement under the 2012 or 2021 LTIP is deemed to have expressly agreed that he or she will not compete with us or any of our companies at which he or she was employed within the three years immediately prior to his or her termination, in the geographic areas in which we or that company actively carried on business at the end of the participant’s employment, for the period during which such retirement affords him or her enhanced benefits (36 months in the case of early retirement or 60 months in the case of normal retirement). If the participant fails to comply with the non-compete provision, he or she forfeits any enhanced benefits under the 2012 and 2021 LTIP and must return to Dover the economic value previously realized by reason of such benefits.
Change in Control (without termination of employment). All the change in control provisions in Dover’s compensation plans are double-trigger. Accordingly, an NEO’s compensation generally will not be affected by a change in control without termination of his or her employment. An executive will be entitled to incremental payments or values upon a change in control without termination of employment only if an executive’s outstanding awards under the 2012 or 2021 LTIP are impaired. In that circumstance, all unvested SSARs and restricted stock units will immediately vest on the date of the change in control and
Voluntary Termination ($)(1) | Involuntary Not for Cause Termination ($)(2) | For Cause Termination ($)(3) | Early Retirement ($) | |||||
Ivonne M. Cabrera | ||||||||
Cash severance (4) | N/A | 1,040,000 | N/A | N/A | ||||
Performance share award (5) | 0 | 0 | 0 | N/A | ||||
Stock options/SSARs (6) | 2,143,095 | 2,143,095 | 0 | N/A | ||||
Restricted Stock Units | 0 | 0 | 0 | N/A | ||||
Retirement plan payments (8) | 1,461,455 | 1,461,455 | 379,192 | N/A | ||||
Deferred comp plan (9) | 110,562 | 110,562 | 110,562 | N/A | ||||
Health and welfare benefits (10) | 0 | 23,732 | 0 | N/A | ||||
Outplacement | N/A | 10,000 | N/A | N/A | ||||
Total: | 3,715,112 | 4,788,844 | 489,754 | N/A | ||||
Jay L. Kloosterboer | ||||||||
Cash severance (4) | N/A | 1,040,000 | N/A | N/A | ||||
Performance share award (5) | 0 | 0 | 0 | N/A | ||||
Stock options/SSARs (6) | 901,171 | 901,171 | 0 | N/A | ||||
Restricted Stock Units (7) | 0 | 0 | 0 | N/A | ||||
Retirement plan payments (8) | 1,037,293 | 1,037,293 | 330,603 | N/A | ||||
Deferred comp plan (9) | 60,129 | 60,129 | 60,129 | N/A | ||||
Health and welfare benefits (10) | 0 | 19,919 | 0 | N/A | ||||
Outplacement | N/A | 10,000 | N/A | N/A | ||||
Total: | 1,998,593 | 3,068,512 | 390,732 | N/A |
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DOVER CORPORATION – 20192022 Proxy Statement 71
EXECUTIVE COMPENSATION TABLES
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Potential Payments in Connection with aChange-in-Control (Without Termination)
As discussed below, the payment of severance benefits following achange-in-control is subject to a double-trigger —that is, such benefits are payable only upon certain specified termination events following achange-in-control. However, rights of an executive under the 2005 Plan, the LTIP, the deferred compensation plan, the pension plan, the PRP and other incentive and benefit plans are governed by the terms of those plans and typically are effected by thechange-in-control event itself, even if the executive continues to be employed by us or a successor company following thechange-in-control.
All equity awards outstanding as of December 31, 2018 were granted under the 2005 Plan or the LTIP. Under the 2005 Plan, upon achange-in-control, all outstanding options and SSARs will immediately become exercisable in accordance with the terms of the appropriate stock option or SSAR agreement. All outstanding performance share awards will immediately vest and become immediately due and payable. The performance periods of all outstanding performance share awards terminatepayable on the last daydate of the month priorchange in control on a pro-rata basis for a shortened performance period.
Each person granted an award under the 2012 or 2021 LTIP is deemed to agree that, upon a tender or exchange offer, proxy solicitation or other action seeking to effect a change in control of Dover, he or she will not voluntarily terminate employment with us or any of our companies and, unless terminated by us, will continue to render services to us until the person seeking to effect a change in control of our Company has abandoned, terminated or succeeded in such person’s efforts to effect the change in control.
Under the PRP, upon a change in control, each participant will become entitled to receive the actuarial value of the participant’s benefit accrued through the date of the change in control. No additional incremental amounts are payable under the PRP upon a change in control.
Termination following a change in control. Upon the double-trigger events of a termination of employment following a change in control, an NEO may be eligible for certain cash severance payments and accelerated vesting of equity awards as described below.
An NEO will be entitled to receive severance payments if, within 24 months after the change in control, either his or her employment is terminated by Dover without “cause” or the executive terminates employment for “good reason,” under and as such terms are defined in the CIC Severance Plan. The severance payments will consist of the following:
A lump sum payment equal to 2.0 multiplied by the sum of (i) the executive’s annual salary on the termination date or the change in control date, whichever is higher, and (ii) his or her target annual incentive bonus for the year in which the termination or the date of the change in control occurs, whichever is higher;
A lump sum payment equal to the monthpro rata portion (based on the completed days worked in the year in which thechange-in-control occurs. The participant is entitled date of termination occurs divided by the number of days in such year) of the NEO’s target annual incentive bonus;
12 months of outplacement services up to a maximum of $25,000, as adjusted upwards for inflation; and
A lump sum payment equal to the then cost of COBRA health continuation coverage, based on the level of health care coverage in effect on the termination date, if any, for 24 months.
No executive may receive severance benefits under more than one plan or arrangement. If Dover determines that (i) any payment or distribution to an executive in connection with change in control, whether under the CIC Severance Plan or otherwise, would be subject to excise tax as an excess parachute payment under the Internal Revenue Code and (ii) the executive would receive a greater net-after-tax amount by reducing the amount of which is determined in accordance with the plan andseverance payment, Dover will reduce the relevant performance share award agreement, which is then prorated based onseverance payments made under the portion of the performance period that the participant completed priorCIC Severance Plan to the maximum amount that might be paid (but not less than zero) without the executive becoming subject to the excise tax. The CIC Severance Plan does not provide any change-in-control.gross-up for excise taxes.
Under the LTIP, uponIn addition, if, within 24 months following a change in control of Dover (as defined in the 2012 or 2021 LTIP) and if, within 18 months following the date of the change in control, the participantexecutive is either involuntarily terminated other than for cause, death or disability such that the participant is no longer employed by a Dover company or an event or condition that constitutes “good reason” under the LTIP occurs, and the participantexecutive subsequently resigns for good reason within applicable time limits and other applicable requirements under the 2012 or 2021 LTIP:
All optionsunvested SSARs and SSARsRSUs immediately vest upon the date of termination and become exercisable in accordance with the terms of the applicable award agreement; and
All performance share awards will be deemed to have been earned “at target” as if the performance target had been achieved and such awards will immediately vest and become immediately due and payable on the date of termination; and
All outstanding restrictions, including any performance targets, on restricted stock or restricted stock unit awards will immediately vest or expire on the date of termination and be deemed to have been satisfied or earned “at target” as if the performance targets, if any, have been achieved, and the award will become immediately due and payable on the date of termination.
DOVER CORPORATION – 20192022 Proxy Statement 72
EXECUTIVE COMPENSATION TABLES
InPotential Payments upon Termination or Change in Control Table. The table below shows the eventincremental amounts payable to each NEO if his or her employment had terminated in certain circumstances on December 31, 2021. The amounts shown assume that termination was effective as of a change in control in which a participant’s outstanding awards are impaired in value or rights asDecember 31, 2021. The actual amounts to be paid out can only be determined solely in the discretion of Dover’s “continuing directors” (as defined in the plan), are not assumed by a successor corporation or an affiliate thereof, or are not replaced with an award or grant that, solely in the discretion of the Dover’s continuing directors, will preserve the existing value of the outstanding awards at the time of the change in control:each executive’s separation from Dover.
All outstanding options and SSARs will immediately vest on the date of the change in control and become exercisable in accordance with the terms of the applicable award agreement;
All outstanding performance share awards will immediately vest and become due and payable on the date of the change in control as follows: the performance period of each such award will terminate on the last day of the month prior to the month in which the change in control occurs and the participant will be entitled to a cash or stock payment, the amount of which will be determined in accordance with the LTIP and the applicable award agreement prorated based on the number of months in the performance period which have passed prior to the change in control as compared to the total number of months in the original performance period; and
All outstanding restrictions, including any performance targets with respect to any options, SSARs, restricted stock or restricted stock unit awards will immediately vest or expire on the date of the change in control and be deemed to have been satisfied or earned at “target” as if the performance targets, if any, have been achieved and such awards will become immediately due and payable on the date of the change in control.
Each person granted an award under the 2005 Plan or LTIP is deemed to agree that, upon a tender or exchange offer, proxy solicitation or other action seeking to effect achange-in-control of Dover, he or she will not voluntarily terminate employment with us or any of our companies and, unless terminated by us, will continue to render services to us until the person seeking to effect achange-in-control of our Company has abandoned, terminated or succeeded in such person’s efforts to effect thechange-in-control.
Under the PRP, upon achange-in-control, each participant will become entitled to receive the actuarial value of the participant’s benefit accrued through the date of thechange-in-control. Under the deferred compensation plan, amounts deferred under the plan will continue to accrue any earnings and will be payable in accordance with the elections made by the executive officer.
The following table shows the aggregate potential equity values and potential payments under plans to which each of the continuing NEOs would have been entitled upon achange-in-control on December 31, 2018.
Named Executive Officer | Stock Options/ | Restricted Stock Awards ($) | Performance Share Awards ($) | PRP and Pension Plan ($) | Deferred Compensation Plan ($) | |||||||||||||||
Richard J. Tobin | 0 | 0 | 0 | N/A | 158,569 | |||||||||||||||
Brad M. Cerepak | 2,219,842 | 0 | 0 | 1,389,951 | 0 | |||||||||||||||
William W. Spurgeon, Jr. | 0 | 0 | 158,289 | 7,435,740 | 2,558,772 | |||||||||||||||
Ivonne M. Cabrera | 1,316,593 | 0 | 0 | 1,082,263 | 110,562 | |||||||||||||||
Jay L. Kloosterboer | 0 | 0 | 0 | 706,690 | 60,129 |
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Name | Voluntary Termination ($) (1) | Involuntary Not for Cause Termination ($) (2) | For Cause Termination ($) (3) | Normal Retirement or Early Retirement under Rule 65 or 70 ($) | Involuntary or Good Reason Termination following a Change-in-Control ($) | |||||||||||||||
Richard J. Tobin | ||||||||||||||||||||
Cash severance | N/A | 4,631,250 (5) | N/A | N/A | 6,175,000 (6) | |||||||||||||||
Performance share award | 0 | 0 | 0 | N/A | 9,879,222 (8) | |||||||||||||||
Stock options/SSARs | 0 | 0 | 0 | N/A | 31,226,926 (9) | |||||||||||||||
Restricted Stock Units | 0 | 5,978,817 (10) | 0 | N/A | 11,039,827 (11) | |||||||||||||||
Health and welfare benefits | 0 | 40,613 (12) | 0 | N/A | 54,150 (12) | |||||||||||||||
Outplacement | N/A | 25,000 | N/A | N/A | 25,000 | |||||||||||||||
Total: | 0 | 10,675,679 | 0 | N/A | 58,400,125 | |||||||||||||||
Brad M. Cerepak | ||||||||||||||||||||
Cash severance | N/A | 1,462,000 (5) | N/A | N/A | 2,924,000 (6) | |||||||||||||||
Performance share award | N/A | 1,211,998 (7) | 0 | 1,211,998 (7) | 2,469,760 (8) | |||||||||||||||
Stock options/SSARs | N/A | 8,401,466 (4) | 0 | 8,401,466 (4) | 8,401,466 (9) | |||||||||||||||
Restricted Stock Units | N/A | 1,298,440 (10) | 0 | 1,298,440 (10) | 1,298,440 (11) | |||||||||||||||
Health and welfare benefits | N/A | 27,075 (12) | 0 | 0 | 54,150 (12) | |||||||||||||||
Outplacement | N/A | 25,000 | N/A | N/A | 25,000 | |||||||||||||||
Total: | N/A | 12,425,979 | 0 | 10,911,904 | 15,172,815 | |||||||||||||||
Girish Juneja | ||||||||||||||||||||
Cash severance | N/A | 850,000 (5) | N/A | N/A | 1,700,000 (6) | |||||||||||||||
Performance share award | 0 | 0 | 0 | N/A | 599,098 (8) | |||||||||||||||
Stock options/SSARs | 0 | 0 | 0 | N/A | 1,954,776 (9) | |||||||||||||||
Restricted Stock Units | 0 | 0 | 0 | N/A | 308,720 (11) | |||||||||||||||
Health and welfare benefits | 0 | 13,047 (12) | 0 | N/A | 26,094 (12) | |||||||||||||||
Outplacement | N/A | 25,000 | N/A | N/A | 25,000 | |||||||||||||||
Total: | 0 | 888,047 | 0 | N/A | 4,613,689 |
DOVER CORPORATION –20192022 Proxy Statement 73
EXECUTIVE COMPENSATION TABLES
Potential Payments upon Termination Following aChange-in-Control
Under the CIC severance plan, an NEO covered by the plan will be entitled to receive severance payments if, within 18 months after thechange-in-control, either his or her employment is terminated by Dover without “cause” or the executive terminates employment for “good reason,” as such terms are defined in the plan. The severance payments will consist of the following:
A lump sum payment equal to 2.0 multiplied by the sum of (i) the executive’s annual salary on the termination date or thechange-in-control date, whichever is higher, and (ii) his or her target annual incentive bonus for the year in which the termination or the date of thechange-in-control occurs, whichever is higher; and
A lump sum payment equal to the then cost of COBRA health continuation coverage, based on the level of health care coverage in effect on the termination date, if any, for one year.
No executive may receive severance benefits under more than one plan or arrangement. If Dover determines that (i) any payment or distribution to an executive in connection withchange-in-control, whether under the CIC severance plan or otherwise, would be subject to excise tax as an excess parachute payment under the Internal Revenue Code and (ii) the executive would receive a greaternet-after-tax amount by reducing the amount of the severance payment, Dover will reduce the severance payments made under the CIC severance plan to the maximum amount that might be paid (but not less than zero) without the executive becoming subject to the excise tax. The CIC severance plan does not provide anygross-up for excise taxes.
The following table shows the potential payments and other benefits that each of the NEOs would have been entitled to receive upon involuntary or good reason termination following achange-in-control on December 31, 2018.
Named Executive Officer | Lump Sum Amount | Health and Welfare Benefits ($) | Outplace- ment ($) | Stock Options/ SSARs ($)(1) | Restricted Stock Units ($)(2) | Perfor- mance Share Awards ($)(3) | 280G Tax Gross-Up /Cutback Amount ($)(4) | Total ($)(5) | ||||||||||||||||||||||||
Richard J. Tobin |
| 5,400,000 |
| 35,598 | (6) |
| 10,000 |
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| 0 |
| 10,600,569 |
| 6,647,802 |
| 0 |
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| 22,693,969 |
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Brad M. Cerepak |
| 2,820,000 |
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| 23,732 |
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| 10,000 |
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| 4,766,160 |
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| 810,036 |
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| 770,233 |
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| 0 |
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| 9,200,162 |
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William W. Spurgeon Jr. |
| 2,600,000 |
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| 18,755 |
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| 10,000 |
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| 2,125,535 |
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| 453,583 |
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| 635,428 |
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| 0 |
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| 6,001,591 |
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Ivonne M. Cabrera |
| 1,836,000 |
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| 23,732 |
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| 10,000 |
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| 1,845,962 |
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| 329,918 |
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| 308,065 |
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| 0 |
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| 4,353,676 |
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Jay L. Kloosterboer |
| 1,836,000 |
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| 19,919 |
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| 10,000 |
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| 1,920,631 |
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| 329,918 |
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| 308,065 |
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| 0 |
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| 4,424,532 |
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Name | Voluntary Termination ($)(1) | Involuntary Not for Cause Termination ($)(2) | For Cause Termination ($)(3) | Normal Retirement or Early Retirement under Rule 65 or 70 ($) | Involuntary or Good Reason Termination following a Change-in-Control ($) | |||||||||||||||
Ivonne M. Cabrera | ||||||||||||||||||||
Cash severance | N/A | 952,000 (5) | N/A | N/A | 1,904,000 (6) | |||||||||||||||
Performance share award | N/A | 484,872 (7) | 0 | 484,872 (7) | 958,303 (8) | |||||||||||||||
Stock options/SSARs | N/A | 3,317,984 (4) | 0 | 3,317,984 (4) | 3,317,984 (9) | |||||||||||||||
Restricted Stock Units | N/A | 504,666 (10) | 0 | 504,666 (10) | 504,666 (11) | |||||||||||||||
Health and welfare benefits | N/A | 27,075 (12) | 0 | 0 | 54,150 (12) | |||||||||||||||
Outplacement | N/A | 25,000 | N/A | N/A | 25,000 | |||||||||||||||
Total: | 5,311,597 | 0 | 4,307,522 | 6,764,103 | ||||||||||||||||
Kimberly K. Bors | ||||||||||||||||||||
Cash severance | N/A | 765,000 (5) | N/A | N/A | 1,530,000 (6) | |||||||||||||||
Performance share award | 0 | 0 | 0 | N/A | 616,714 (8) | |||||||||||||||
Stock options/SSARs | 0 | 0 | 0 | N/A | 909,809 (9) | |||||||||||||||
Restricted Stock Units | 0 | 0 | 0 | N/A | 257,872 (11) | |||||||||||||||
Health and welfare benefits | 0 | 13,934 (12) | 0 | N/A | 27,868 (12) | |||||||||||||||
Outplacement | N/A | 25,000 | N/A | N/A | 25,000 | |||||||||||||||
Total | 0 | 803,934 | 0 | N/A | 3,367,263 |
(1) |
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(2) |
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(3) | A NEO whose employment is terminated by us for cause will forfeit all outstanding cash and equity awards, whether or not vested or exercisable. The executive will also forfeit benefits under the PRP in accordance with the PRP terms. |
(4) | Reflects for Mr. Cerepak the value of unvested SSARs that would vest within 24 months for SSARs granted in 2019 and 2020, and within 60 months for SSARs granted in 2021; for Ms. Cabrera, the value of unvested SSARs that would vest within 24 months for SSARs granted in 2019 and 2020 and within 36 months for SSARs granted in 2021. |
(5) | For Mr. Tobin, the amount is equal to 1.5 times the sum of his annual salary plus target bonus; for the other NEOs, the amounts represent 12 month salary continuation and an annual incentive bonus at target. |
(6) | Represents a payment equal to 2 times the sum of (i) the executive’s annual salary on the termination date or the change in control date, whichever is higher, and (ii) his or her target annual incentive bonus for the year in which the termination or the date of the change in control occurs, whichever is higher, |
(7) | Represents payout at target of performance share awards granted under the 2012 LTIP for the |
(8) |
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DOVER CORPORATION – 20192022 Proxy Statement 74
EXECUTIVE COMPENSATION TABLES
(9) | Represents acceleration of vesting of unvested SSAR awards granted under the 2012 LTIP, calculated as the difference between the closing price of $181.60 per share of our common stock on December 31, 2021, and the exercise price of each unvested SSAR award multiplied by the number of shares covered by such award. |
(10) | For Mr. Cerepak the amount reflects the value of unvested RSUs as of December 31, 2021 that will vest within the following 24 months for RSUs granted in 2019 and 2020 and 60 months for RSUs granted in 2021. For Ms. Cabrera the amount reflects the value of unvested RSUs as of December 31, 2021 that will vest within the following 24 months for RSUs granted in 2019 and 2020 and 36 months for RSUs granted in 2021. Mr. Tobin is eligible per his employment agreement to fully vest all sign-on RSUs, and the amount shown represents the one remaining tranche that vests in 2022. |
(11) | Represents acceleration of vesting of unvested RSUs granted under the 2012 LTIP. |
(12) | Represents COBRA health continuation coverage costs under the severance plan or CIC Severance Plan as applicable. Under the Severance Plan, an executive is entitled to a lump sum payment equal to the then cost of COBRA health continuation coverage for 12 months. Mr. Tobin would receive 18 months COBRA per his employment agreement; under the CIC Severance Plan, the COBRA lump sum payments for Mr. Tobin and all the NEOs would receive 24 months. |
DOVER CORPORATION – 2022 Proxy Statement 75
Proposal 3 — Advisory Resolution to Approve
Named Executive Officer Compensation
Each year, we offer our shareholders an opportunity to vote to approve, on an advisory and nonbinding basis, the compensation of our NEOs as disclosed in this Proxy Statement in accordance with Section 14A of the Exchange Act.
We are asking our shareholders to indicate their support for our NEO compensation as described in this Proxy Statement. This proposal, commonly known as a“say-on-pay” “Say on Pay” proposal, gives our shareholders the opportunity to express their views on our NEOs’ compensation. We believe that Dover’sour compensation programs are well designed and reinforce our strategic focus on continued revenue and profit growth. Over
Our Board has a strong history of engaging with shareholders and soliciting feedback on a range of topics, including our executive compensation program. Historically, our program has received strong shareholder support as expressed during our one-on-one engagement discussions with shareholders and through our Say on Pay vote levels. At our 2021 annual meeting, approximately 93% of the past few years, Dover has enacted many changes to its programs that are outlined invoting shareholders approved the Compensation Discussion and Analysis sectioncompensation of this Proxy Statement. We believe these changes have further strengthened the linkage betweenNEOs. At our compensation programs and the creation of shareholder value. At the 2018 Annual Meeting,2020 annual meeting, over approximately 96% of the voting shareholders approved the compensation of the NEOs. The Compensation Committee will continue to consider feedback from shareholders, as well as the results from future shareholder advisory votes, in its ongoing evaluation of executive compensation programs and practices at Dover.
This vote is not intended to address any specific item of compensation but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that Dover’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in Dover’s Proxy Statement for the 20192022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosures.”
Thesay-on-pay Say on Pay vote is advisory and therefore not binding on Dover, our Compensation Committee or our Board. Our Board and our Compensation Committee value the opinions of our shareholders and, to the extent there is any significant vote against the NEO compensation as disclosed in this Proxy Statement, we will consider our shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
THE BOARD RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF
OUR NEOs, AS
DISCLOSED IN THIS PROXY STATEMENTSTATEMENT.
DOVER CORPORATION –20192022 Proxy Statement 7576
Management ProposalsShareholder Proposal
Background of ProposalsProposal 4 and 5— Shareholder Proposal Regarding the Right to Act by Written Consent
Subject MatterJohn Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, California 90278, beneficial owner of Vote
Ourno fewer than 50 shares of Dover’s common stock, has given notice that he intends to present a proposal for consideration at the Annual Meeting. In accordance with SEC rules, John Chevedden’s proposed resolution and supporting statement are printed verbatim below. The Board accepts no responsibility for the content or accuracy of the proposal and the Governancesupporting statement.
Proposal 4 — Shareholder Right to Act by Written Consent
Shareholders request that our board of directors take the necessary steps to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and Nominating Committee believevoting. This includes that adherenceone shareholder shall be able to soundperform the ministerial function of asking for a record date.
This proposal is on the ballot because management used misleading statements to resist this proposal in 2021. Thus the 2021 shareholder vote on this proposal topic was tainted by Dover management’s use of misleading statements.
Dover management claimed that with written consent shareholders would not receive ample advance notice. This is misleading because written consent can be structured so that all shareholders receive ample advance notice.
Dover management also clamed that Dover had a “robust shareholder engagement program.” If the management statement next to the 2021 written consent proposal is typical, then the so called “robust shareholder engagement” is based on Dover management attempting to mislead shareholders.
Due to management’s attempt to mislead shareholders a whole year was wasted in presenting this proposal topic to shareholders.
When reading the management statement next to the 2022 written consent proposal please remember that there is a formal process to root out any supposedly misleading shareholder text in a shareholder proposal but there is no formal process to root out misleading management text next to a shareholder proposal.
This proposal topic won impressive 85%-support at the 2021 Conagra annual meeting without any special effort by the shareholder proponent.
A reasonable shareholder right to act by written consent can make shareholder engagement meaningful. If management is insincere in its shareholder engagement, a right for shareholders to act by written consent in our bylaws can make management think twice about insincerity.
A shareholder right to act by written consent in our bylaws will help ensure that management engages with shareholders in good faith because shareholders will have a viable Plan B through acting by written consent. Our bylaws give no assurance that shareholder engagement will continue.
Please vote yes:
Shareholder Right to Act by Written Consent — Proposal 4
DOVER CORPORATION – 2022 Proxy Statement 77
SHAREHOLDER PROPOSAL
Opposition Statement of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” THE PROPOSAL FOR THE FOLLOWING REASONS:
The Board is committed to strong corporate governance and responsiveness to Dover’s shareholders and believes in maintaining policies and practices informed by evolvingthat serve the best practices and shareholder feedbackinterests of all shareholders. After careful consideration, the Board has determined that the proposal is important, and they are committed to ensuring that Dover is governed and managed with the highest standards of responsibility andnot in the best interests of Dover and its shareholders.
To The Board believes that end, our Board and Governance and Nominating Committee have carefully considereda written consent right is unnecessary given the advantages and disadvantages of Dover’s current super-majority voting provisions and, after careful consideration and upon the recommendation by the Governance and Nominating Committee, our Board has adopted, declared advisable and recommends that shareholders approve the amendment and restatementability of our charter to eliminate the super-majority voting provisions contained therein, which are limited to the following matters:
Amendments to the charter relating to certain share repurchases from “interested stockholders” (defined in our charter as a beneficial holder of 5%shareholders holding 15% or more of our outstanding shares unless heldto call special meetings of shareholders.
The proposal would deprive the right of all shareholders to be consulted on important matters concerning their investment in Dover.
Our governing documents require that actions subject to a shareholder vote be considered at a meeting of shareholders. This requirement ensures that all shareholders receive advance notice of the proposed action and have an opportunity to discuss it and consider all points of view. In contrast, the proposal would allow one group of shareholders to approve and adopt critical actions relating to the company without notice to other shareholders and without an opportunity for more than four years)discussion at a shareholder meeting. Action by written consent can occur with little or no advance notice to the Company, other shareholders or the abilitymarket. As a result, the Board may not have a meaningful opportunity to consider the merits of the proposed action, to consider alternative courses of action or to communicate its views to shareholders. Therefore, this proposal, if adopted, could disenfranchise shareholders and may deprive them of their rights, while enabling other short-term or special interest investors to approve proposals that are not in the best interest of all shareholders. Because of these deficiencies, the Board believes that the written consent process is not appropriate for a widely held public company like Dover.
We have a robust shareholder engagement program and our shareholders have indicated that a 15% special meeting right is preferable to a written consent right.
In 2021, we continued our focus on regularly engaging with our shareholders. We reached out to holders of approximately 60% of our shares outstanding, and engaged with governance professionals and/or portfolio managers at investors holding approximately 31% of our shares outstanding. As described under “Shareholder Engagement and History of Board Responsiveness” on pages 31 through 32, engagement topics included diversity and inclusion, ESG, compensation, and governance matters. Although shareholders possess a variety of views, many of our shareholders expressed that the right to act by written consent was unnecessary in light of our shareholders’ right to call special meetings. Moreover, to the extent some shareholders desired greater rights, the overall feedback was that the adoption in 2020 of a 15% ownership threshold for special meetings was preferable to a written consent right.
Our shareholder right to call special meetings allows shareholders to use cumulative voting in the election of directors once therepropose actions without waiting for our next annual meeting. A special meeting right set at an appropriate threshold is a “substantial stockholder” (defined in our charter as a beneficial holder of 40% or more of our shares) (Proposal 4); and
Amendmentspreferable to the charter provision that prohibits action by written consent because a meeting allows all shareholders to participate in, and discuss the merits of, shareholders (Proposal 5).
Under Dover’s existing governing documents, a majority vote requirement appliesproposed action, and allows the Board to all other matters submittedmake a thoughtful recommendation about the action. As a result, a strong shareholder special meeting right is better suited to a vote (other thanculture of transparency and good corporate governance.
The Board believes that having a special meeting right at a 15% ownership threshold strikes the useright balance for Dover, as it is a low enough threshold to provide a meaningful right for shareholders to act between annual meetings yet high enough to prevent a single shareholder (or small group of plurality votingshareholders) from acting without broad shareholder support.
Our shareholders voted against substantially similar shareholder proposals at our 2021 and 2020 annual meetings.
The same shareholder proponent submitted at each of our last two annual meetings a substantially similar shareholder proposal regarding the right to act by written consent. Consistent with the views expressed by many shareholders in the eventcourse of a contested election). There are no super-majority provisions in ourby-laws and the only super-majority provisions in our charter are described above and subject to Proposals 4 and 5.
Board Analysis
These super-majority voting provisions have been part of our charter for many years and were originally designed to ensure that the interests of all shareholders were adequately represented in the event any of the actions contemplated by these provisions were to occur. On the other hand, the Board is aware that some shareholders oppose super-majority provisions, arguing that super-majority voting provisions may limit the ability of holders ofshareholder engagement, a majority of shareholders have rejected these proposals at each of the 2020 and 2021 annual meetings, with each proposal receiving support from only 32 to 33 percent of the votes cast at each of the meetings.
DOVER CORPORATION – 2022 Proxy Statement 78
SHAREHOLDER PROPOSAL
We have a strong corporate governance structure and a record of responsiveness and accountability.
Our corporate governance structure reflects a significant and ongoing commitment to strong and effective corporate governance and accountability and responsiveness to shareholders. Our Board regularly assesses and refines our common stockgovernance policies and procedures to effect changes they desire.
The Board also tooktake into account that:
We have takenproactive stepsevolving best practices and to remove super-majority provisions fromaddress feedback provided by our shareholders during our engagement with them. In addition to our 15% special meeting right, other corporate governance materials.practices that reflect our accountability and responsiveness to shareholders include:
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DOVER CORPORATION –2019 Proxy Statement 76
MANAGEMENT PROPOSALS
Following our 2018 Annual Meeting,we sought further shareholder input as our Board considered next steps with respect to the removal of the remaining super-majority provisions in our charter.
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✓ | Elimination of Supermajority Voting Provisions – All of the supermajority voting provisions in our charter were eliminated in 2019. |
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Our Board iscommitted to evolving our governance practices to ensure we continue to operate with abest-in-class governance structure. Recent changes that show this commitment include:
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Therefore, after careful consideration of the foregoing matters, the Board, upon the recommendation of the Governanceshareholder proposal is unnecessary and Nominating Committee, has determined that it is appropriate to propose the amendment and restatement of the charter to eliminate the super-majority voting provisions and that doing so isnot in the best interests of Dover and its shareholders.
You are being provided with an opportunity to vote separately on the removal of each of the super-majority voting provisions currently contained in our charter as described below under Proposals 4 and 5. In accordance with Delaware law, the Board has adopted resolutions approving and declaring advisable the amendment and restatement of our charter and is recommending the removal of both of the super-majority voting provisions to shareholders for approval. Under our charter and Delaware law, approval of each of Proposal 4 and 5 requires the affirmative vote of the holders of at least 80% of our outstanding common stock.
DOVER CORPORATION –2019 Proxy Statement 77
Proposal 4 — Approval of Amendments to Article 15 of Our Charter to Eliminate Super- Majority Voting Requirement
Subject Matter of Vote
Article FIFTEENTH of our charter (“Article 15”) requires that, subject to certain exceptions, any purchases by Dover or its subsidiaries of “voting shares” (defined in our charter as the outstanding shares of our capital stock entitled to vote generally in the election of directors) held by an “interested stockholder” (defined in our charter, among other things, as a beneficial owner of 5% or more of our voting shares that has been such a beneficial owner for less than four years) at a per share price in excess of the applicable market price must be approved by the affirmative vote of not less than a majority of the votes entitled to be cast by holders of all outstanding voting shares not beneficially owned by the “interested stockholder.” In addition, Article 15 provides shareholders with cumulative voting rights in the election of directors if at the time of such election there exists a “substantial stockholder” (defined in our charter as a beneficial owner of 40% or more of our voting shares). As of December 31, 2017, we are not aware of any beneficial owner that holds more than 12% of our outstanding voting shares.
Subsection (E) of Article 15 currently provides that amendments, alterations, changes or repeals (“Changes”) to or of Article 15 must be approved, subject to certain exceptions, by the affirmative vote of the holders of at least 80% of our outstanding voting shares (the “Article 15 Amendment Provision”).
On the recommendation of the Governance and Nominating Committee, and based on the careful review of the advantages and disadvantages of the Article 15 Amendment Provision as described in the “Background of Proposals 4 and 5” above, the Board has approved, and recommends that shareholders approve, this Proposal 4 to eliminate the Article 15 Amendment Provision in its entirety.
If this Proposal 4 is approved by shareholders, future Changes to Article 15 may be effected in accordance with Delaware law and will not be subject to a super-majority voting requirement. If this Proposal 4 is adopted, under Delaware law, future Changes to Article 15 would need to be approved by the Board and by the holders of at least a majority of the voting power of the capital stock of Dover outstanding and entitled to vote on the amendment.
The approval of this Proposal 4 is not conditioned on the approval of any other Proposal.
This summary of the proposed amendment is qualified in its entirety by reference to the text of the proposed elimination of the Article 15 Amendment Provision attached as Appendix A to this Proxy Statement, with deletions indicated by strike outs and additions indicated by underlining.
Required Vote
In accordance with Delaware law, our Board has approved and declared advisable the amendment and restatement of our charter, including the elimination of the Article 15 Amendment Provision, and is recommending it to shareholders for approval. Under our charter and Delaware law, approval of Proposal 4 will require the affirmative vote of holders at least 80% of our outstanding shares of common stock. If Proposal 4 is approved, our shareholders will be deemed to have approved an amended and restated certificate of incorporation of Dover incorporating the elimination of the Article 15 Amendment Provision set forth in Appendix A.
Abstentions and brokernon-votes will have the effect of votes against the proposal. If this Proposal 4 is approved by shareholders, the Board has authorized the officers of Dover to file with the Delaware Secretary of State an amended and restated certificate of incorporation incorporating the elimination of the Article 15 Amendment Provision as set forth in Appendix A. The amendment and restatement of our charter will become effective on the date the amended and restated certificate of incorporation is filed with the Delaware Secretary of State (or at such later effective date set forth therein). If Proposal 4 is not approved by the requisite vote, the proposed elimination of the Article 15 Amendment Provision of our charter will not be implemented and Dover’s current voting requirements contained therein will remain in place.
THE BOARD RECOMMENDS A VOTE “FOR”“AGAINST” THE AMENDMENTSHAREHOLDER PROPOSAL
REGARDING THE RIGHT TO ARTICLE 15 OF OUR CHARTER TO ELIMINATE SUPER-MAJORITY VOTING PROVISIONS CONTAINED THEREIN.ACT BY WRITTEN CONSENT.
DOVER CORPORATION –2019 Proxy Statement 78
Proposal 5 — Approval of Amendments to Article 16 of Our Charter to Eliminate Super- Majority Voting Requirement
Subject Matter of Vote
The first paragraph of Article SIXTEENTH of our charter (“Article 16”) contains a prohibition on shareholder action by written consent. The second paragraph of Article 16 currently provides that Changes to Article 16 must be approved, subject to certain exceptions, by the affirmative vote of the holders of at least 80% of our outstanding voting shares (the “Article 16 Amendment Provision”).
On the recommendation of the Governance and Nominating Committee, and based on the careful review of the advantages and disadvantages of the Article 16 Amendment Provision as described in the “Background of Proposals 4 and 5” above, the Board has approved, and recommends that shareholders approve, this Proposal 5 to eliminate the Article 16 Amendment Provision in its entirety.
If this Proposal 5 is approved by shareholders, future Changes to Article 16 may be effected in accordance with Delaware law and will not be subject to a super-majority voting requirement. If this Proposal 5 is adopted, under Delaware law, future Changes to Article 16 would need to be approved by the Board and by the holders of at least a majority of the voting power of the capital stock of Dover outstanding and entitled to vote on the amendment.
The approval of this Proposal 5 is not conditioned on the approval of any other Proposal.
This summary of the proposed amendment is qualified in its entirety by reference to the text of the proposed elimination of the Article 16 Amendment Provision attached as Appendix B to this Proxy Statement, with deletions indicated by strike outs and additions indicated by underlining.
Required Vote
In accordance with Delaware law, our Board has approved and declared advisable the amendment and restatement of our charter, including the elimination of the Article 16 Amendment Provision, and is recommending it to shareholders for approval. Under our charter and Delaware law, approval of Proposal 5 will require the affirmative vote of holders of at least 80% of our outstanding shares of common stock. If Proposal 5 is approved, our shareholders will be deemed to have approved an amended and restated certificate of incorporation of Dover incorporating the elimination of the Article 16 Amendment Provision set forth in Appendix B.
Abstentions and brokernon-votes will have the effect of votes against the proposal. If this Proposal 5 is approved by shareholders, the Board has authorized the officers of Dover to file with the Delaware Secretary of State an amended and restated certificate of incorporation incorporating the elimination of the Article 16 Amendment Provision as set forth in Appendix B. The amendment and restatement of our charter will become effective on the date the amended and restated certificate of incorporation is filed with the Delaware Secretary of State (or at such later effective date set forth therein). If Proposal 5 is not approved by the requisite vote, the elimination of the Article 16 Amendment Provision of our charter will not be implemented and Dover’s current voting requirements contained therein will remain in place.
THE BOARD RECOMMENDS A VOTE “FOR” THE AMENDMENT TO ARTICLE 16 OF OUR CHARTER TO ELIMINATE SUPER-MAJORITY VOTING PROVISIONS CONTAINED THEREIN.
DOVER CORPORATION –20192022 Proxy Statement 79
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding the beneficial ownership, as of March 8, 20199, 2022 (except as otherwise stated), of our common stock by the following:
Each director and each of our executive officers named in the Summary Compensation Table under “Executive Compensation — Summary Compensation Table”Tables”;
All of the directors and executive officers as a group including the NEOs; and
Each person known to us to own beneficially more than 5% of our outstanding common stock.
The beneficial ownership set forth in the table is determined in accordance with the rules of the SEC. The percentage of beneficial ownership for directors and executive officers is based on 145,213,280144,106,147 shares of common stock outstanding on March 8, 2019.9, 2022. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and investment power as to all shares beneficially owned.
NAME OF BENEFICIAL OWNER | Number of Shares(1) | Percentage(1) | ||||||
DIRECTORS (EXCEPT MR. TOBIN): | ||||||||
PETER T. FRANCIS |
| 23,857 | (2) |
| * |
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H. JOHN GILBERTSON, JR. |
| 628 |
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| * |
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KRISTIANE C. GRAHAM |
| 543,235 | (3) |
| * |
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MICHAEL F. JOHNSTON |
| 15,575 | (4) |
| * |
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RICHARD K. LOCHRIDGE |
| 22,734 | (5) |
| * |
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ERIC A. SPIEGEL |
| 2,994 | (6) |
| * |
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STEPHEN M. TODD |
| 18,860 | (7) |
| * |
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STEPHEN K. WAGNER |
| 14,860 | (8) |
| * |
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KEITH E. WANDELL |
| 5,150 |
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| * |
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MARY A. WINSTON |
| 14,563 |
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| * |
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NEOS: | ||||||||
RICHARD J. TOBIN |
| 27,411 | (9) |
| * |
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ROBERT A. LIVINGSTON |
| 925,135 | (10) |
| * |
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BRAD M. CEREPAK |
| 477,972 | (11) |
| * |
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WILLIAM W. SPURGEON, JR. |
| 100,857 | (12) |
| * |
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IVONNE M. CABRERA |
| 161,242 | (13) |
| * |
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JAY L. KLOOSTERBOER |
| 91,579 | (14) |
| * |
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DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP | 2,536,217 | (15) | 1.7 | % | ||||
5% BENEFICIAL OWNERS: | ||||||||
BLACKROCK, INC. |
| 11,821,885 | (16) |
| 8.1 | % | ||
STATE STREET CORPORATION |
| 8,367,126 | (17) |
| 5.7 | % | ||
THE VANGUARD GROUP |
| 17,214,835 | (18) |
| 11.76 | % | ||
JPMORGAN CHASE & CO. |
| 8,333,335 | (19) |
| 5.6 | % |
NAME OF BENEFICIAL OWNER
| Number of Shares(1) | Percentage(1) | ||||||
DIRECTORS (EXCEPT MR. TOBIN): | ||||||||
DEBORAH L. DEHAAS (2) | 767 | * | ||||||
H. JOHN GILBERTSON, JR. | 3,873 | * | ||||||
KRISTIANE C. GRAHAM (3) | 238,355 | * | ||||||
MICHAEL F. JOHNSTON (4) | 19,596 | * | ||||||
ERIC A. SPIEGEL (5) | 7,739 | * | ||||||
STEPHEN M. TODD (6) | 22,105 | * | ||||||
STEPHEN K. WAGNER (7) | 18,105 | * | ||||||
KEITH E. WANDELL | 8,263 | * | ||||||
MARY A. WINSTON | 16,348 | * | ||||||
NEOS: | ||||||||
RICHARD J. TOBIN (8) | 606,259 | * | ||||||
BRAD M. CEREPAK (9) | 414,362 | * | ||||||
IVONNE M. CABRERA (10) | 224,532 | * | ||||||
GIRISH JUNEJA (11) | 29,863 | * | ||||||
KIMBERLY K. BORS (12) | 3,399 | * | ||||||
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (18 PERSONS) (13) | 1,670,963 | 1.2 | * | |||||
5% BENEFICIAL OWNERS: | ||||||||
BLACKROCK, INC. (14) | 10,713,313 | 7.4 | % | |||||
JPMORGAN CHASE & CO. (15) | 11,268,963 | 7.8 | % | |||||
THE VANGUARD GROUP (16) | 16,671,379 | 11.6 | % |
* | Less than one percent. |
DOVER CORPORATION –2019 Proxy Statement 80
SHARE OWNERSHIP INFORMATION
(1) | In computing the number of shares beneficially owned by an executive officer and the percentage ownership of such executive officers, we have included (i) shares of common stock subject to stock-settled appreciation rights (“SSARs”) held by that person that are currently exercisable or exercisable within 60 days of March |
DOVER CORPORATION – 2022 Proxy Statement 80
SHARE OWNERSHIP INFORMATION
In computing the number of shares beneficially owned by anynon-employee directorsa director and the percentage ownership of suchnon-employee directors, director, we have included shares of common stock subject to deferred stock units which will bebecome payable in an equal numberupon the director’s termination of shares of common stock at the time such director departs from the Board.service. Such shares, however, are not deemed to be outstanding for purposes of computing the percentage ownership of any other person.
(2) |
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(3) | Includes |
(4) | Includes |
(5) |
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(6) |
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(7) | Includes |
(8) |
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Includes 3,126 deferred stock units, |
(9) | Includes |
(10) | Includes |
(11) | Includes |
(12) | Includes |
(13) | Includes |
(14) |
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Number of shares beneficially owned and percentage ownership based on information contained in a Schedule 13G/A filed with the SEC on February |
(15) | Number of shares beneficially owned and percentage ownership based on information contained in a Schedule |
(16) | Number of shares beneficially owned and percentage ownership based on information contained in a Schedule 13G/A filed with the SEC on February |
DOVER CORPORATION –2019 Proxy Statement 81
SHARE OWNERSHIP INFORMATION
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Stock Ownership Guidelines
Our Board has adopted a policy that directors are expected to hold at any time a number of shares at least equal to the aggregate number of shares they received as the stock portion of their annual retainer during the past five years, net of an assumed 30% tax rate.
Executive officers are expected to hold a number of shares with a value at least equal to a multiple of their annual salary. For a discussion of the executive officer share ownership guidelines, see “Executive Compensation —Compensation“Compensation Discussion and Analysis — Other Compensation Programs and Policies.”
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a)Elements of the Securities Exchange Act of 1934 (the “Exchange Act”) requires that our directors and certain of our officers file reports of ownership and changes of ownership of our common stock with the SEC and the NYSE. Based solelyCompensation” on copies of such reports provided to us, we believe that all directors and officers filed on a timely basis all such reports required of them with respect to stock ownership and changes in ownership during 2018.page 60.
DOVER CORPORATION –20192022 Proxy Statement 8281
General Information About the Annual Meeting
We are providing this Proxy Statement to our shareholders in connection with the solicitation of proxies by the Board for use at the Annual Meeting. We are mailing this Notice of Annual Meeting and Proxy Statement beginning on or about March 21, 2019.17, 2022.
Record Date
The record date for determining shareholders eligible to vote at the Annual Meeting is March 8, 2019.9, 2022. As of the close of business on that date, we had outstanding 145,213,280144,106,147 shares of common stock. Each share of common stock is entitled to one vote on each matter.
Electronic Delivery of Proxy Materials
As permitted under SEC rules, we are making this Proxy Statement and our Annual Report to Shareholders (which includes our Annual Report on Form10-K for the year ended December 31, 2018 (which is our Annual Report)2021) available to shareholders electronically via the internet. We believe electronic delivery expedites receipt of our proxy materials by shareholders, while lowering the costs and reducing the environmental impact of the Annual Meeting. If you receive a notice of internet availability of proxy materials by mail, you will not receive a printed copy of the proxy materials by mail unless you specifically request them. Instead, the notice of internet availability will provide instructions as to how you may review the proxy materials and submit your voting instructions over the internet. If you receive the notice by mail and would like to receive a printed copy of the proxy materials, you should follow the instructions in the notice of internet availability for requesting a printed copy. In addition, the proxy card contains instructions for electing to receive proxy materials over the internet or by mail in future years.
Shareholders of Record; Beneficial Owners
Most holders of our common stock hold their shares beneficially through a broker, bank or other nominee rather than of record directly in their own name. As summarized below, there are some differences in the way to vote shares held of record and those owned beneficially.
If your shares are registered directly in your name with our transfer agent, you are considered the shareholder of record of those shares, and the notice of internet availability or proxy materials are being sent directly to you. As a shareholder of record, you have the right to
grant your voting proxy directly to the persons named as proxy holders or to vote in person at the Annual Meeting. If you received or requested printed copies of the proxy materials, Dover has enclosed a proxy card for you to use. You may also submit your proxy on the internet or by telephone as described in the proxy card.
If your shares are held in a brokerage account or by a bank or other nominee, you are considered the beneficial owner of the shares held in “street name,” and these proxy materials are being forwarded to you by your broker or nominee who is considered the shareholder of record of those shares. As the beneficial owner, you generally have the right to direct your broker on how to vote and are also invited to attend the Annual Meeting. However, since you are not the shareholder of record, you may not vote those shares in person at the Annual Meeting unless you have a proxy, executed in your favor, from the holder of record of your shares. Your broker or nominee has enclosed a voting instruction card for you to use in directing your broker or nominee as to how to vote your shares. We strongly encourage you to instruct your broker or nominee how you wish to vote.
Vote Required; Abstentions and BrokerNon-Votes; Quorum
For Proposal 1, a majority of the votes cast at the Annual Meeting is required to elect each of the directors. This means that the number of votes cast “FOR” a director must exceed the number of votes cast “AGAINST” that director in order for that director to be elected. Our organizational documents do not provide for cumulative voting.
Proposal 2 will require the affirmative vote of at least a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meeting.thereon.
Proposal 3 is a nonbinding, advisory resolution so its ultimate adoption is at the discretion of the Board. The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote at the Annual Meetingthereon will be deemed to be approval by the shareholders of Proposal 3.
ProposalsProposal 4 and 5 will require the affirmative vote of at least 80%a majority of shares present in person or represented by proxy and entitled to vote thereon. Proposal 4 is a shareholder advisory resolution that will not itself effect any amendment to our outstanding shares of common stock.charter or by-laws.
DOVER CORPORATION – 2022 Proxy Statement 82
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
If you are a shareholder of record and you sign and return your proxy card or vote electronically without
DOVER CORPORATION –2019 Proxy Statement 83
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
making any specific selection, then your shares will be voted FOR all director nominees listed in Proposal 1 and FOR Proposals 2 and 3, 4 and 5.AGAINST Proposal 4.
If you specify that you wish to “ABSTAIN” from voting on an item, then your shares will not be voted on that particular item. Abstentions will not affect the outcome of the vote on Proposal 1. However, they will have the same effect as a vote against Proposals 2, 3, 4 and 5.4.
If you are a beneficial owner and hold your shares through a broker or other nominee and do not provide your broker or nominee with voting instructions, the broker or nominee will have discretionary authority to vote your shares on routine matters only and will not vote your shares onnon-routine matters. This is generally referred to as a “brokernon-vote.” Only Proposal 2 will be considered a routine matter for the Annual Meeting. Accordingly, a broker or other nominee will not be able to vote on Proposals 1, 3, and 4 without voting instructions. Broker non-votes will not affect the outcome of the vote on ProposalProposals 1, but will have the same effect as a vote against Proposals 3 4 and 54 as they will not be counted as being present.present and entitled to vote on such proposals.
For purposes of the Annual Meeting, there will be a quorum if the holders of a majority of the outstanding shares of our common stock entitled to vote at the Annual Meeting are present in person or represented by proxy. Abstentions and brokernon-votes will be counted for purposes of determining if a quorum is present.
Additional Matters
We have been notified that a beneficial owner may seek to present a shareholder proposal to adjourn the Annual Meeting to solicit the votes necessary to pass Proposals 4 and 5 if these proposals do not have the requisite votes to pass at the Annual Meeting (the “Additional Proposal”). We do not believe that the Additional Proposal was submitted to us in accordance with the advance notice requirements of our by-laws. However, if the Additional Proposal is considered at the Annual Meeting, it will require the affirmative vote of at least a majority of shares present in person or by proxy and entitled to vote at the Annual Meeting. Abstentions and broker non-votes will have the same effect as a vote against the Additional Proposal. The Board’s designated proxyholders have discretionary authority to vote the proxies solicited by Dover on the Additional Proposal. If the Additional Proposal is considered at the Annual Meeting, the Board’s designated proxyholders intend to exercise their discretion to vote “AGAINST” it.
Voting Procedures
If you are a shareholder of record, you may vote in person at the Annual Meeting or submit your proxy or voting instruction form over the internet, by telephone or by mail by following the instructions provided in our notice of internet availability, in the proxy materials or in the voting instruction form. If you hold your shares beneficially in “street name” through a broker or other nominee, you must follow the instructions provided by your broker or nominee to vote your shares.
Revoking Your Proxy/Changing Your Voting Instructions
If you are a shareholder of record, whether you give your proxy over the internet, by telephone or by mail, you may revoke it at any time before it is exercised. You may submit a new proxy by using the internet or the telephone or by mailing a new proxy card bearing a later date so long as it is received before the Annual Meeting. You may also revoke your proxy by attending the Annual Meeting and voting in person, although attendance at the Annual Meeting will not, by itself, revoke your proxy. If you hold your shares beneficially in “street name” through a broker or other nominee, you must follow the instructions provided by your broker or nominee as to how you may change your voting instructions.
Shareholders Sharing the Same Address
SEC rules permit us to deliver one copy of the Proxy Statement or a notice of internet availability of the Proxy Statement to multiple shareholders of record who share the same address and have the same last name, unless we have received contrary instructions from one or more of such shareholders. This delivery method, called “householding,” reduces our printing and mailing costs. Shareholders who participate in householding will continue to receive or have internet access to separate proxy cards.
If you are a shareholder of record subject to householding and wish to receive a separate copy of the Proxy Statement or notice of internet availability of the proxy materials, now or in the future, at the same address or if you are currently receiving multiple copies of such materials at the same address and wish to receive only a single copy, please write to or call the Corporate Secretary, Dover Corporation, 3005 Highland Parkway, Downers Grove, Illinois 60515, telephone:(630) 541-1540.
DOVER CORPORATION –2019 Proxy Statement 84
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Beneficial owners sharing an address who are currently receiving multiple copies of the proxy materials or notice of internet availability of the proxy materials and wish to receive only a single copy in the future, or who currently receive a single copy and wish to receive separate copies in the future, should contact their bank, broker or other holder of record to request that only a single copy or separate copies, as the case may be, be delivered to all shareholders at the shared address in the future.
Proxy Solicitation Costs
We will pay the reasonable and actual costs of printing, mailing and soliciting proxies, but we will not pay a fee to any of our officers or employees or to officers or employees of any of our subsidiaries as compensation for soliciting proxies. We have retained Morrow Sodali, LLC to solicit brokerage houses and other custodians, nominees or fiduciaries, and to send proxies and proxy materials to the beneficial owners of such shares, for a fee of approximately $20,000$12,000 plus expenses.
DOVER CORPORATION – 2022 Proxy Statement 83
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Other Matters
Our Board and management have not received notice of, and are not aware of, any business to come before the Annual Meeting other than the agenda items referred to in this Proxy Statement and the submission of the Additional Proposal.Statement. If, however, any other business properly comes before the meeting, the persons named as proxies will use their best judgment in voting the proxies.
Shareholder Proposals and Director Nominations for 20202023 Annual Meeting
In order for shareholder proposals to be included in our proxy statement for the Annual Meeting of Shareholders to be held in 20202023 (the “2020“2023 Annual Meeting”), they must be received by our Corporate Secretary at our principal executive offices, 3005 Highland Parkway, Downers Grove, Illinois, 60515, no later than the close of business on November 22, 2019.17, 2022.
In 2016, we adopted a proxy access right to permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in ourby-laws. In order to be timely, notice of proxy access director nominees must be received by our Corporate Secretary at our principal executive offices at the address above no earlier than the open of business on October 23, 201918, 2022 and no later than the close of business on November 22, 201917, 2022 being, respectively, 150 days and 120 days prior to the first anniversary of the date we first distributed this proxy statement.
All other shareholder nominations and proposals, in order to be voted on at the 20202023 Annual Meeting, must be received by us no earlier than the open of business on January 3, 2020,6, 2023, and no later than the close of business on February 2, 20205, 2023 being, respectively, 120 days and 90 days prior to the date of the first anniversary of the 20192022 Annual Meeting.
Where You Can Find Additional Information
Our website is located at www.dovercorporation.com. Although the information contained on or connected to our website is not part of this Proxy Statement, youYou can view additional information on our website, such as:
Charters of our Board committees
Corporate Governance Guidelines
Code of Business Conduct & Ethics
Related Person Transactions Policy
Standards for Director Independence
Other governance materials and reports that we file with the SEC. Copies of these documents also may be obtained free of charge by writing or calling the Corporate Secretary, Dover Corporation, 3005 Highland Parkway, Downers Grove, Illinois 60515, telephone:(630) 541-1540
All Dover Corporation website addresses contained in this proxy statement are intended to be inactive, textual references only. The information on, or accessible through, any such website identified in this proxy statement is not a part of, and is not incorporated by reference into, this proxy statement.
Caution Concerning Forward-Looking Statements
This proxy statement contains forward-looking statements that are inherently subject to uncertainties and risks. We caution investors to be guided in their analysis of Dover by referring to the documents we file with the SEC, including our Annual Report on Form10-K for 2019,2021, for a list of factors that could cause our results to differ from those anticipated in any such forward-looking statements.
DOVER CORPORATION –20192022 Proxy Statement 8584
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Non-GAAP Disclosures
In an effort to provide investors with additional information regarding our results as determined by accounting principles generally accepted in the United States of America (“GAAP”), we also disclosenon-GAAP information that we believe provides useful information to investors. Adjusted net earnings, and adjusted diluted net earnings per common share, total segment earnings (EBIT), adjusted segment EBIT, adjusted segment EBIT margin, free cash flow, free cash flow as a percentage of revenue, free cash flow as a percentage of earnings, and organic revenue growth are not financial measures under GAAP and should not be considered as a substitute for net earnings, or diluted net earnings per common share, cash flows from operating activities, or revenue as determined in accordance with GAAP, and they may not be comparable to similarly titled measures reported by other companies.
Adjusted Net Earnings Per Share
(in millions, except per share data) | 2021 | 2020 | 2019 | |||||||||
Adjusted net earnings: | ||||||||||||
Net earnings | $ | 1,124 | $ | 683 | $ | 678 | ||||||
Acquisition-related amortization, pre-tax 1 | 142 | 139 | 138 | |||||||||
Acquisition-related amortization, tax impact 2 | (35 | ) | (34 | ) | (35 | ) | ||||||
Rightsizing and other costs, pre-tax 3 | 38 | 51 | 32 | |||||||||
Rightsizing and other costs, tax impact 2 | (7 | ) | (11 | ) | (7 | ) | ||||||
Gain on dispositions, pre-tax 4 | (206 | ) | (5 | ) | — | |||||||
Gain on dispositions, tax impact 2 | 53 | 1 | — | |||||||||
Loss on extinguishment of debt, pre-tax 5 | — | — | 24 | |||||||||
Loss on extinguishment of debt, tax impact 2 | — | — | (5 | ) | ||||||||
Loss on assets held for sale 6 | — | — | 47 | |||||||||
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Adjusted net earnings | $ | 1,109 | $ | 824 | $ | 872 | ||||||
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Diluted average shares outstanding | 145 | 145 | 147 | |||||||||
Adjusted diluted net earnings per common share*: | ||||||||||||
Net earnings | $ | 7.74 | $ | 4.70 | $ | 4.61 | ||||||
Acquisition-related amortization, pre-tax 1 | 0.98 | 0.95 | 0.94 | |||||||||
Acquisition-related amortization, tax impact 2 | (0.24 | ) | (0.24 | ) | (0.24 | ) | ||||||
Rightsizing and other costs, pre-tax 3 | 0.26 | 0.35 | 0.22 | |||||||||
Rightsizing and other costs, tax impact 2 | (0.05 | ) | (0.07 | ) | (0.06 | ) | ||||||
Gain on dispositions, pre-tax 4 | (1.42 | ) | (0.03 | ) | — | |||||||
Gain on dispositions, tax impact 2 | 0.37 | 0.01 | — | |||||||||
Loss on extinguishment of debt, pre-tax 5 | — | — | 0.16 | |||||||||
Loss on extinguishment of debt, tax impact 2 | — | — | (0.04 | ) | ||||||||
Loss on assets held for sale 6 | — | — | 0.32 | |||||||||
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Adjusted diluted net earnings per common share | $ | 7.63 | $ | 5.67 | $ | 5.93 | ||||||
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¹ Includes amortization on acquisition-related intangible assets and inventory step-up.
2 Adjustments were tax effected using the statutory tax rates in the applicable jurisdictions or the effective tax rate, where applicable, for each period.
3 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges. 2021 includes a $12.1 million other than temporary impairment charge related to an equity method investment and a $6.1 million write-off of assets incurred in connection with an exit from continuing operations arecertain Latin America countries within our Climate & Sustainability Technologies segment, as well as a $9.1 million payment received for previously incurred restructuring costs related to a product line exit in our Engineered Products segment.
4 2021 represents a $181.6 million gain on the disposition of Unified Brands, a wholly owned subsidiary of the Company within the Climate & Sustainability Technologies segment, and a $24.7 million gain on disposition of our Race Winning Brands equity method investment in the Engineered Products segment. 2020 represents a $5.2 million net gain on the sale of AMS Chino within the Climate & Sustainability Technologies segment, including working capital adjustments.
5 Represents a loss on early extinguishment of €300.0 million 2.125% notes due 2020 and $450.0 million 4.30% notes due 2021.
DOVER CORPORATION – 2022 Proxy Statement 85
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
6 Represents a loss on assets held for sale of Finder Pompe S.r.l. (“Finder”). Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
* Per share data and totals may be impacted by rounding.
Adjusted Segment EBIT Margin
Segment earnings (EBIT) is adjusted by the effect of acquisition-related amortization, the Tax Cuts and Jobs Act, gains on disposition of businesses, disposition costs, rightsizing and other costs, loss on assets held for sale, and a product recall reserve reversalgain on dispositions to derive at total adjusted segment earnings (EBIT). Total adjusted segment earnings (EBIT) is divided by total segment revenue to derive at adjusted earnings from continuing operations and adjusted diluted earnings per common sharesegment EBIT margin as follows:
(in millions, except per share data) | 2018 | 2017 | ||||||
Adjusted earnings from continuing operations: | ||||||||
Earnings from continuing operations | $ | 591 | $ | 747 | ||||
Acquisition-related amortization,pre-tax1 | 146 | 151 | ||||||
Acquisition-related amortization, tax impact2 | (37 | ) | (49 | ) | ||||
Tax Cuts and Jobs Act 3 | (3 | ) | (55 | ) | ||||
Gain on dispositions,pre-tax4 | — | (205 | ) | |||||
Gain on dispositions, tax impact2 | — | 33 | ||||||
Disposition costs,pre-tax5 | — | 5 | ||||||
Disposition costs, tax impact2 | — | (2 | ) | |||||
Rightsizing and other costs,pre-tax6 | 73 | 49 | ||||||
Rightsizing and other costs, tax impact2 | (15 | ) | (15 | ) | ||||
Product recall reversal,pre-tax | — | (7 | ) | |||||
Product recall reversal, tax impact2 | — | 3 | ||||||
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Adjusted earnings from continuing operations | $ | 756 | $ | 655 | ||||
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Diluted average shares outstanding | 152 | 158 | ||||||
Adjusted diluted earnings per common share: | ||||||||
Earnings from continuing operations | $ | 3.89 | $ | 4.73 | ||||
Acquisition-related amortization,pre-tax1 | 0.96 | 0.96 | ||||||
Acquisition-related amortization, tax impact2 | (0.24 | ) | (0.31 | ) | ||||
Tax Cuts and Jobs Act 3 | (0.02 | ) | (0.35 | ) | ||||
Gain on dispositions,pre-tax4 | — | (1.30 | ) | |||||
Gain on dispositions, tax impact2 | — | 0.21 | ||||||
Disposition costs,pre-tax5 | — | 0.03 | ||||||
Disposition costs, tax impact2 | — | (0.01 | ) | |||||
Rightsizing and other costs,pre-tax6 | 0.48 | 0.31 | ||||||
Rightsizing and other costs, tax impact2 | (0.10 | ) | (0.09 | ) | ||||
Product recall reversal,pre-tax | — | (0.04 | ) | |||||
Product recall reversal, tax impact2 | — | 0.02 | ||||||
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Adjusted diluted earnings per common share | $ | 4.97 | $ | 4.15 | ||||
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(in thousands) | 2021 | 2020 | 2019 | |||||||||
Segment earnings (EBIT) | ||||||||||||
Engineered Products | $ | 285,511 | $ | 238,167 | $ | 291,848 | ||||||
Clean Energy & Fueling | 271,388 | 236,974 | 231,873 | |||||||||
Imaging & Identification | 237,147 | 193,473 | 229,484 | |||||||||
Pumps & Process Solutions | 546,863 | 305,276 | 240,081 | |||||||||
Climate & Sustainability Technologies | 322,622 | 102,872 | 118,832 | |||||||||
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Total segment earnings (EBIT) 1 | 1,663,531 | 1,076,762 | 1,112,118 | |||||||||
Rightsizing and other costs 2 | 33,907 | 44,171 | 26,555 | |||||||||
Loss on assets held for sale 3 | — | — | 46,946 | |||||||||
Gain on dispositions 4 | (206,338 | ) | (5,213 | ) | — | |||||||
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Adjusted segment EBIT | $ | 1,491,100 | $ | 1,115,720 | $ | 1,185,619 | ||||||
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Adjusted segment EBIT margin | 18.9% | 16.7% | 16.6% |
¹ Refer to the table below for reconciliation of total segment earnings (EBIT) to net earnings.
2 Rightsizing and other costs include actions taken on employee reductions, facility consolidations and site closures, product line exits and other asset charges. 2021 includes a $9,078 payment received for previously incurred restructuring costs related to a product line exit in our Engineered Products segment, as well as a $12,073 other than temporary impairment charge related to an equity method investment and a $6,072 write-off of assets incurred in connection with an exit from certain Latin America countries within our Climate & Sustainability Technologies segment.
3 Represents a loss on assets held for sale for Finder. Under local law, no tax benefit is realized from the loss on the sale of a wholly-owned business.
4 2021 represents a $181,615 gain on the disposition of Unified Brands, a wholly owned subsidiary of the Company within the Climate & Sustainability Technologies segment, and a $24,723 gain on disposition of our Race Winning Brands equity method investment in the Engineered Products segment. 2020 represents a $5,213 net gain on the sale of AMS Chino within the Climate & Sustainability Technologies segment, including working capital adjustments.
(in thousands) | 2021 | 2020 | 2019 | |||||||||
Net earnings: | ||||||||||||
Total segment earnings (EBIT) | $ | 1,663,531 | $ | 1,076,762 | $ | 1,112,118 | ||||||
Corporate expense / other | 160,827 | 126,662 | 147,817 | |||||||||
Interest expense | 106,319 | 111,937 | 125,818 | |||||||||
Interest income | (4,441 | ) | (3,571 | ) | (4,526 | ) | ||||||
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Net earnings before provision for income taxes | 1,400,826 | 841,734 | 843,009 | |||||||||
Provision for income taxes | 277,008 | 158,283 | 165,091 | |||||||||
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Net earnings | $ | 1,123,818 | $ | 683,451 | $ | 677,918 | ||||||
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DOVER CORPORATION –20192022 Proxy Statement 86
GENERAL INFORMATION ABOUT THE ANNUAL MEETING
Free Cash Flow
Free cash flow represents net cash provided by operating activities minus capital expenditures as follows:
(in thousands) | 2021 | 2020 | 2019 | |||||||||
Cash flow from operating activities | $ | 1,115,865 | $ | 1,104,810 | $ | 945,306 | ||||||
Less: Capital expenditures | (171,465 | ) | (165,692 | ) | (186,804 | ) | ||||||
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Free cash flow | $ | 944,400 | $ | 939,118 | $ | 758,502 | ||||||
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Free cash flow as a percentage of revenue | 11.9% | 14.1% | 10.6% | |||||||||
Free cash flow as a percentage of net earnings | 84.0% | 137.4% | 111.9% |
Organic Revenue Growth Factor
2021 Full Year | ||||
Organic | 15.3 | % | ||
Acquisitions | 1.3 | % | ||
Dispositions | (0.2) | % | ||
Currency translation | 1.9 | % | ||
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Non-GAAP Disclosures
Adjusted net earnings from continuing operations represents net earnings from continuing operations adjusted for the effect of acquisition-related amortization, the Tax Reform Act, gains on disposition of businesses, disposition costs, rightsizing and other costs, gain on dispositions, loss on extinguishment of debt, and a product recall reserve reversal.loss on assets held for sale. We excludeafter-tax acquisition-related amortization because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate.the Company consummates. We exclude the other items because they occur for reasons that may be unrelated to ourthe Company’s commercial performance during the period and/or we believeManagement believes they are not indicative of ourthe Company’s ongoing operating costs or gains in a given period. We believe this information
Adjusted diluted net earnings per share represents adjusted net earnings divided by average diluted shares.
Total segment earnings (EBIT) is defined as net earnings before income taxes, net interest expense, and corporate expenses. Total segment earnings (EBIT) margin is defined as total segment earnings (EBIT) divided by revenue.
Management believes these measures are useful to investors to better understand ourthe Company’s ongoing profitability as it will better reflect ourthe Company’s core operating results, offer more transparency and facilitate easier comparability to prior and future periods and to its peers. Adjusted diluted earnings per common share
Free cash flow represents adjustednet cash provided by operating activities minus capital expenditures. Free cash flow as a percentage of revenue equals free cash flow divided by revenue. Free cash flow as a percentage of net earnings equals free cash flow divided by average diluted shares.net earnings. Management believes that free cash flow and free cash flow ratios are important measures of operating performance because they provide management and investors a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.
Management believes that reporting organic revenue growth, which excludes the impact of foreign currency exchange rates and the impact of acquisitions and dispositions, provides a useful comparison of our revenue performance and trends between periods.
DOVER CORPORATION – 20192022 Proxy Statement 87
PROPOSED AMENDMENTSCAN TO ARTICLE FIFTEENTHVIEW MATERIALS & VOTE w DOVER CORPORATION 3005 HIGHLAND PARKWAY VOTE BY INTERNET—www.proxyvote.com or scan the QR Barcode above DOWNERS GROVE, IL 60515 Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 5, 2022 for shares held directly and by 11:59 p.m. Eastern Time on May 3, 2022 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF RESTATED
CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPER-MAJORITY
VOTE REQUIREMENT EXPLAINED IN PROPOSAL 4
(matterFUTURE PROXY MATERIALS If you would like to be deleted is stricken)
FIFTEENTH: (A) (1) Except as otherwise expressly providedreduce the costs incurred by our company in paragraph (A)(2) below, any purchase bymailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the corporation, or any subsidiary ofInternet. To sign up for electronic delivery, please follow the corporation, of Voting Shares (as hereinafter defined) from a person or persons known by the corporation to be an Interested Stockholder (as hereinafter defined) at a per share price in excess of the Market Price (as hereinafter defined) at the time of such purchase of the shares so purchased, shall require the affirmative vote of not less than a majority of the votes entitled to be cast by the holders of all then outstanding Voting Shares not beneficially owned by the Interested Stockholder, voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage or separate class vote may be specified, by law or in any agreement with any national securities exchange or otherwise.
(2) The provisions of Paragraph (A)(1) of this Article Fifteenth shall not be applicable to any purchase of Voting Shares, if such purchase is pursuant to (i) an offer, made available on the same terms, to the holders of all of the outstanding shares of the same class of those purchased or (ii) a purchase program effected on the open market and not the result of a privately-negotiated transaction.
(B) (1) In the event that there shall exist a Substantial Stockholder (as hereinafter defined) of the corporation and such existence shall be known or made known to the corporation in advance of a meeting of stockholders at which directors will be elected, each holder of Voting Shares shall be entitled, in connection with any vote taken for such election of directors, to as many votes as shall equal the number of votes which (except for this provision as to cumulative voting) such stockholder would be entitled to cast for the election of directors with respect to such stockholder’s Voting Shares multiplied by the number of directors to be elected, and such stockholder may cast all of such votes for a single director may distribute them among the number of directors to be voted for, or for any two or more of them as such stockholder may see fit.
(2) In connection with any election of directors in which stockholders are entitled to cumulative voting:
(a) The Board of Directors shall appoint a committee (the “Committee”) consisting of three Directors.
(b) The Committee shall send to all stockholders of the corporation entitledinstructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 5, 2022 for shares held directly and by 11:59 p.m. Eastern Time on May 3, 2022 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the election of directors at least 90 days in advance of such election a written notice informing stockholders (i) that the cumulative voting provisions of this Article will be in effect, (ii) that persons meeting the eligibility requirements of subparagraph (B)(2)(c) may submit nominationspostage-paid envelope we have provided or return it to the Committee, if such nominations are received at least 60 days in advance of the election and contain relevant information concerning the nominee, including all information required to be included in a proxy statement under the Securities and Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations), and the nominee’s consent to be nominated, and (iii) as to the time, place and date of the meeting at which such election will be held.
(c) The Committee will review all nominees, and the corporation’s proxy materials being prepared in connection with such meeting will include information relating to, and afford stockholders the opportunity to vote for, all nominees who are included by the Committee in the corporation’s proxy materials. The Committee shall be required to include in such proxy materials at least one nominee of each stockholder or group of stockholders who beneficially own Voting Shares with a Market Price (as herein defined) of at least $250,000 at the time notice of such meeting is sent to stockholders and who submit the information required with respect to such nominee under subparagraph (B)(2)(b). The Committee may include more than one nominee of such person or persons, provided that the number of nominees included by the Committee which are submitted by any one person or group of persons may not exceed the number of directors to be elected at such a meeting.
(d) The corporation’s proxy statement and other communications with respect to the election shall contain, on an equal basis and at the expense of the corporation, descriptions and other statements of or with respect to all nominees for election which qualify under the procedures set forth in this Article.
(3) If necessary to assure that the provisions of this Paragraph (B) are fairly applied and complied with, the Board of Directors may postpone any meeting of stockholders to which this Article would apply for such period of time as shall be necessary to permit the Committee to perform its responsibilities hereunder.
(4) Notwithstanding any other provision which may be contained from time to time in this Certificate of Incorporation or theby-laws of the corporation concerning the manner in which the size of the Board of Directors of the corporation may be established or changed, in the event that a person becomes a Substantial Stockholder, the number of directors at the time such person becomes a Substantial Stockholder shall remain fixed and may not be changed by the Board of Directors or the stockholders until such time as such person is no longer a Substantial Stockholder.
(C) For purposes of this Article Fifteenth:
(1) “Interested Stockholder” shall mean any person (other than the corporation or any Subsidiary; and other than any profit sharing, employee stock ownership, or other employee benefit plan of the corporation or any subsidiary, or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who or which:
(a) is the beneficial owner, directly or indirectly, of not less than 5% of the Voting Shares and has been such a beneficial owner for less than four years; or
(b) is an Affiliate of the corporation and at any time within two years prior thereto was the beneficial owner, directly or indirectly, for a period of less than four years of not less than 5% of the then outstanding Voting Shares; or
(c) is an assignee of or has otherwise succeeded to any shares of capital stock of the corporation which were at any time within two years prior thereto beneficially owned by any Interested Stockholder and such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.
(2) The term “Substantial Stockholder” shall mean any person (other than the corporation or any Subsidiary; and other than any profit sharing, employee stock ownership or other employee benefit plan of the corporation or any subsidiary, or any trustee of or fiduciary with respect to any such plan when acting in such capacity) who or which is the beneficial owner, directly or indirectly, of not less than 40% of the Voting Shares.
(3) For the purpose of determining whether a person is an Interested Stockholder or a Substantial Stockholder, the number of Voting Shares deemed to be outstanding shall include shares deemed beneficially owned by such person through application of subparagraph (4) of Paragraph (C) of Article Fourteenth, but shall not include any other Voting Shares that may be issuable pursuant to any agreement, or upon exercise of conversion rights, warranties or options, or otherwise.
(4) For purposes of this Article Fifteenth, the terms “Voting Shares,” “beneficial owner,” “person,” “Affiliate,” “Associate,” “Subsidiary,” and “Market Price” shall have the meanings set forth in Article Fourteenth of this Certificate of Incorporation, except that “Market Price” shall mean the last closing sale price or the last closing bid quotation immediately preceding the date in question instead of the highest closing sale price or the highest closing bid quotation during the30-day period immediately preceding the date in question; and
(D) The Board of Directors shall have the power and the duty to determine for the purposes of this Article Fifteenth (a) whether the provisions of the Article are applicable to a particular transaction, (b) whether a person is an Interested Stockholder or a Substantial Stockholder, (c) the number of Voting Shares or other securities beneficially
owned by any person, (d) whether a person is an Affiliate or Associate of another, (e) what the Market Price is and whether a price is above the Market Price as of a given date, and (f) whether any person nominating directors in accordance with Paragraph B.2. beneficially owns Voting Shares with an aggregate Market Price of at least $250,000.
(E) Notwithstanding any other provisions of this Certificate of Incorporation or theBy-laws of the corporation to the contrary (and notwithstanding the fact that a lesser percentage may be specified by law, this Certificate of Incorporation or theby-laws of the corporation), any amendment, alteration, change or repeal of this Article Fifteenth of this Certificate of Incorporation shall require the affirmative vote of the holders of at least 80% of the then outstanding Voting Shares; provided, however, that this Paragraph E shall not apply to and such 80% vote shall not be required for, any amendment, alteration, change or repeal recommended to the stockholders by the majority vote of the Board of Directors and at the time such amendment, alteration, change or repeal is under consideration there is, to the knowledge of the Board of Directors, neither an Interested Stockholder nor a Substantial Stockholder.
PROPOSED AMENDMENT TO ARTICLE SIXTEENTH OF RESTATED
CERTIFICATE OF INCORPORATION TO ELIMINATE THE SUPER-MAJORITY
VOTE REQUIREMENT EXPLAINED IN PROPOSAL 5
(matter to be deleted is stricken)
SIXTEENTH: No action required to be taken or which may be taken at any annual or special meeting of stockholders of the corporation may be taken without a meeting, and the power of stockholders to consent in writing, without a meeting, to the taking of any action is specifically denied.
Notwithstanding any other provisions of this Certificate of Incorporation or theBy-laws of the corporation to the contrary (and notwithstanding the fact that a lesser percentage may be specified by law, this Certificate of Incorporation or theBy-laws of the corporation), any amendment, alternation, change or repeal of this Article Sixteenth of this Certificate of Incorporation shall require the affirmative vote of the holders of at least 80% of the then outstanding Voting Shares; provided, however, that such 80% vote of the then outstanding vote shall not required for, any amendment, alteration, change or repeal recommended to the stockholders by the majority vote of the Board of Directors and at the time such amendment, alteration, change or repeal is under consideration there is, to the knowledge of the Board of Directors, neither an Interested Stockholder nor a Substantial Stockholder.
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Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
E62269-P17210-Z73847 D67671-P66680-Z81818 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY DOVER CORPORATION The Board of Directors recommends a vote FOR each director under Item 1: 1. Election of Directors For Against Abstain 1a. D. L. DeHaas The Board of Directors recommends a vote FOR ! ! ! Items 2 and 3: For Against Abstain 1b. H. J. Gilbertson, Jr. 2. To ratify the appointment of PricewaterhouseCoopers LLP ! ! ! as our independent registered public accounting ?rm ! ! ! for 2022. 1c. K. C. Graham ! ! ! 3. To approve, on an advisory basis, named executive of?cer ! ! ! compensation. 1d. M. F. Johnston ! ! ! The Board of Directors recommends a vote AGAINST Item 4: 1e. E. A. Spiegel ! ! ! 4. To consider a shareholder proposal regarding the right to ! ! ! allow shareholders to act by written consent. 1f. R. J. Tobin ! ! ! NOTE: Such other business as may properly come before the meeting or any adjournment thereof. 1g. S. M. Todd ! ! ! 1h. S. K. Wagner ! ! ! 1i. K. E. Wandell ! ! ! 1j. M. A. Winston ! ! ! Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other ?duciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized of?cer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING,
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and telephone voting are available through 11:59 PM Eastern Time
the day before the annual meeting date.
Your Internet or telephone vote authorizes the named proxies to vote these shares in the
same manner as if you marked, signed and returned your proxy card.
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INTERNET OR TELEPHONE http://www.proxyvote.com 1-800-690-6903 Use the Internet to vote your proxy. Use any touch-tone telephone to Have your proxy card in hand when vote your proxy. Have your proxy you access the website. card in hand when you call. If you vote your proxy by Internet or telephone, you do NOT need to mail back your proxy card.
To vote by mail, sign and date your proxy card and return it in the enclosed postage-paid envelope.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available atwww.proxyvote.com.
E62270-P17210-Z73847
www.proxyvote.com. D67672-P66680-Z81818 PROXY
DOVER CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING
MAY 2, 2019
6, 2022 The undersigned hereby appoints Richard J. Tobin, Brad M. Cerepak and Ivonne M. Cabrera, and each of them, as the undersigned’s proxy or proxies, each with full power of substitution, to vote all shares of Common Stock of Dover Corporation which the undersigned is entitled to vote at the Annual Meeting of Shareholders to be held in Fort Lauderdale, FLDowners Grove, IL on May 2, 20196, 2022 at 1:9:00 P.M.A.M., local time, and any adjournments thereof, as fully as the undersigned could if personally present, upon the proposals set forth on the reverse side hereof, revoking any proxy or proxies heretofore given. For participants in the Company’s Retirement Savings Plan, this proxy will govern the voting of stock held for the account of the undersigned in the Plan.
IMPORTANT - IMPORTANT—You have the option of voting these shares by returning the enclosed proxy card, voting via Internet or by using a toll-free telephone number above and on the reverse side. On the reverse side of this proxy card are instructions on how to vote via the Internet or by telephone. If you vote by either of these methods, your vote will be recorded as if you mailed in your proxy card. If you vote by returning this proxy card, you must sign and date this proxy on the reverse side.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE REVERSE SIDE, BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES LISTED ON THE REVERSE SIDE, AND FOR PROPOSALS 2 AND 3 4 AND 5.
AGAINST PROPOSAL 4. Continued and to be signed on reverse side