2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
| | | | | | 30 | | COMPENSATION DISCUSSION AND ANALYSIS | | |
OVERVIEW The Compensation Committee is composed entirely of independent directors, sets the Company’s executive compensation philosophy and reviews and approves compensation for executive officers, in consultation with the Compensation Committee’s independent executive compensation consultant. In this section, we describe and analyze: | (1) | the material components of our executive compensation programs for the “named executive officers” or “NEOs”; |
| (2) | the material compensation decisions the Compensation DiscussionCommittee made for 2023; and Analysis (continued) Executive Summary
| | | | | | | ● Our executive pay program aligns with long-term shareholder value creation. A significant portion of executive pay is performance-based, and subject to rigorous performance targets that are important to our shareholders.
●Initial decisions on our 2020 compensation plan were made prior to the COVID-19 pandemic. The compensation plan design and targets were established in January 2020, prior to the global emergence of the COVID-19 pandemic and the production shutdowns that ensued. The 2020 compensation plan design included certain changes in order to better align our compensation programs with shareholder interests, including increasing the weighting of relative TSR in our 2020-2022 long-term incentive program from 25% to 33%. In our annual incentive plan metrics, we replaced New Business Bookings with revenue Growth Over Market (“GOM”), a measure of relative revenue growth versus underlying global vehicle production. These changes strengthened alignment of our compensation programs to our strategic objectives, competitive market practices, and shareholder interests.
● All of our NEOs voluntarily reduced their base salary for the period from April 2020 through August 2020 in response to the financial pressures brought about by the COVID-19 pandemic. All NEOs also deferred their approved base salary increases until September 1, 2020.
● COVID-19 had a significant impact on achievement against both our short- and long-term original financial objectives. The impact of COVID-19, including global shutdowns, periods of reduced automotive demand, and the increased costs of keeping our employees safe rendered the previously established financial targets for our annual incentive plan and performance-based restricted stock units (“RSUs”) unachievable. In light of the Company’s strong operating and financial performance, including in response to COVID-19 and the unprecedented challenges it presented, and the extraordinary efforts of our employees and leaders around the world to enable the success of the Company following the onset of the COVID-19 pandemic, the Compensation Committee determined this outcome did not reflect our pay-for-performance philosophy.
● The Compensation Committee recognized the need to re-align the compensation programs in light of COVID-19. In response to management’s decisive actions to successfully respond to and generate strong results in light of the COVID-19 pandemic, the Compensation Committee evaluated changes to compensation programs. The key principles underlying the Compensation Committee’s consideration of compensation program changes were to:
 Consider the welfare of our employees first
 Preserve value for our shareholders
 Compensate and reward performance and value creation
 Reduce pay opportunity in conjunction with adjusted goals
 Cap long-term payouts at target if we do not outperform our peers
●In July 2020, the Compensation Committee prudently reset the goals and reduced payout opportunities in the Annual Incentive Plan. As the industry emerged from global shutdowns and the Company successfully restarted operations, the Compensation Committee approved the Updated Incentive Plan (as defined below) to motivate participating employees, including executives, and to encourage sustained focus on enterprise-wide goals. The Updated Incentive Plan provided reduced target and maximum incentive opportunities at 50% and 65% of original target payout, respectively.
| | | | 3-YEAR TSR
49.6%
89TH
PERCENTILE OF OUR TSR
PEER GROUP
BELOW TARGET
INCENTIVE PAYOUT
65%
ANNUAL INCENTIVE
95%
2018-2020 LONG-TERM
INCENTIVE
CEO BASE SALARY
REDUCTION
50%
BASE SALARY REDUCTION
FROM APRIL-AUGUST
2020
3 YEAR AVERAGE
SAY-ON-PAY
96%
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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| (3) | Compensation Discussion and Analysis (continued)the key factors considered in making those decisions, including Company performance.
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2023 YEAR IN REVIEW Company Financial and Business Performance Highlights.Our 2023 performance reflects increasing global vehicle production and our solid execution despite the global inflationary environment and North American OEM labor strikes. Our recent financial and business achievements include the following: | • | | ● | In December 2020, the Compensation Committee took thoughtful action to adjust long-term compensation programs in response to COVID-19. Due to the emergence of the COVID-19 pandemic and resultant impacts on the Company’s industry and operations in 2020, the Compensation Committee determined that it was reasonable and appropriate to truncate the performance period for the 2018-2020 performance cycle to measure achievement of the financial results based on actual and estimated financial performance as of December 31, 2019. In addition, adjustments were made to restore our 2019 and 2020 compensation programs’ intended effectiveness. Ensuring alignment of pay-for-performance with shareholder value creation remains a key focus and ensures that the management team is accountable for strategic and operational execution. The Compensation Committee made the following changes:Generating record new business awards of approximately $34 billion, representing program lifetime revenue, validating our industry leading portfolio of advanced technologies tied to the accelerating megatrends in our industry.
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| • | | AdjustedDelivering strong revenue growth over the original 3-year financial performance objectives forprior year despite adverse impacts from the 2019 and 2020 performance-based RSU grants, while maintaining the overall plan design. The revised targets were established at levels that the Compensation Committee deemed rigorous and challenging, while acknowledging the current operating environment;
Reduced the maximum payouts for 2019 and 2020 performance-based RSU grants from 200% to 150%; with payouts capped at 100% if relative TSR is below median; and
Did not grant any new incremental awards.
● | Our 3-year TSR was 49.6% – at the 89th percentile of our TSR peer group, reflecting operational performance well above industry peers. Despite COVID-19 disruptions, our Company delivered strong shareholder returns in 2020, driven by its operating and financial performance to which our management team contributed significantly.
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● | Even following these adjustments, our executives were awarded below-target short- and long-term payouts. Although the Company and its leadership exceeded expectations in navigating the unprecedented environment throughout 2020, the Compensation Committee acknowledged that the original targets were not achieved. Following the compensation program adjustments described above, our CEO earned 65% of his annual incentive target for 2020, and 95% of his target shares for the 2018-2020 long-term incentive award. In determining these levels, the Committee applied negative discretion to further align compensation earned by our executives with the austerity measures taken in 2020, including cost reduction and cash conservation actions, while recognizing the overall impact on our employees.North American OEM labor strikes.
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| | | | | | | Plan| • | | Before Adjustments | | After Adjustments | | After Application
of Negative
Discretion | | | | | Annual Incentive Plan | | 10% payout (GOM) | | 65% payout | | 65% payout | | | | | 2018-2020 performance-based RSUs | | 49% payout | | 106% payout | | 95% payout |
● | Accounting guidelines distort the compensation reported in our 2020 Summary Compensation Table. The approved adjustments to 2019-2021 and 2020-2022 long-term incentive grants, while maintaining the value and intent of the original grants, require disclosure in the “Stock Awards” column of the “2020 Summary Compensation Table” as additional stock awards granted in 2020 due to the accounting impact of the program adjustments. For example, the amount disclosed in the “Stock Awards” column for our CEO of approximately $28.5 million reflects his original 2020 performance-based RSU grant as well as including the accounting impact of the adjustments approved in December 2020 to the 2019 and 2020 grants. What would typically be disclosed for this amount is approximately $10.7 million, which reflects the grant date fair value of the 2020 annual grant at the time it was made. Refer to the “Supplemental Compensation Information and Reconciliation” section below, which is provided in order to illustrate the implicit value of awards for our CEO after these adjustments.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT Producing a record $2.1 billion of adjusted operating income and record cash flow from operations of $1.9 billion, demonstrating strong operating execution in the face of the OEM labor disruptions and continuing material cost inflation.
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| • | | Compensation Discussion and Analysis (continued)
2020 Year in Review
2020 Company Financial and Business Performance Highlights. COVID-19 affected nearly every facet of our operations. In spite of these impacts, our 2020 performance reflects our team’s dedication and efforts to ensure the health and safety of our employees first, while positioning the Company for flawless execution for our customers as operations resumed. Management’s actions preserved and enhanced Aptiv’s financial strength during the COVID-19 pandemic and generated strong returns following the restart of our global operations.
Our financial and business achievements in 2020 include the following:
StrengtheningFurther strengthening our balance sheet and liquidity position in order to continue to invest in value-enhancing opportunities, despite COVID-19by opportunistically paying off the outstanding principal balance of $301 million on the Tranche A Term Loan, Aptiv’s only variable rate borrowing.
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Leveraging opportunistic market pricing dynamics and strong market demand by issuing $1.15 billion of ordinary shares and $1.15 billion of 5.50% preferred shares; and
Extending the maturity of substantially all of our existing revolving credit facility to August 2022.
Acting decisively in response to the global COVID-19 pandemic
Taking early and decisive actions to preserve our financial strength, including temporarily reducing executive pay, reducing capital expenditures, and suspending share repurchases and ordinary share dividends; and
Designing and successfully implementing our safe operations protocols, which enabled our facilities to restart safely and operate with zero production disruptions following the restart.
Generating strong results despite the COVID-19 pandemic
Delivering sustained outperformance, with 10% sales growth over market, attributable to our portfolio of leading technologies aligned with secular growth drivers;
Generating $1.621 billion of Adjusted EBITDA and cash flow before financing of $836 million, despite the COVID-19 pandemic’s negative impact on automotive production; and
Achieving 49.6% TSR over the period 2018 through 2020, illustrating our investors’ belief in our long-term strategy and current financial performance.
| • | | Continuing our relentless focus on cost structure and operational optimizationoptimization. |
Maximizing our operational flexibility and profitability by having approximately 97% of our hourly workforce based in best cost countries. | • | | MaximizingEnhancing our operational flexibility and profitability at all points in the normal automotive business cycle, by having approximately 97% of our hourly workforce based in best cost countries, and approximately 20% of our hourly workforce composed of contract and temporary employees; andoptimized full system, edge-to-cloud capabilities.
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Increasing commercial traction, including new business awards that leverage the software product offerings of Wind River Systems, Inc. (“Wind River”) integrated with Aptiv’s full system solutions. | • | | RecruitingMeeting our sustainability-linked targets for greenhouse gas emissions and retaining top talent from various industries, including technology.workplace safety.
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| | | | | | | COMPENSATION DISCUSSION AND ANALYSIS | | 31 |
Our strong strategic, operational and financial performance over time is reflected in our results shown below. 
| * | Continuing to executeReturn on our long-term Safe, Green and Connected strategy to enable a more sustainable future
Furthering our leadership positionnet assets in automated driving through2023 includes the formationimpacts of the Motional autonomous driving joint venture with Hyundai, which is focused$2.1 billion deferred tax benefit recognized from the Company’s initiation of changes to its corporate entity structure, including intercompany transfers of intellectual property and other related transactions. Excluding the impacts of these transactions, return on the design, development and commercialization of autonomous driving technologies;net assets was 21.8% in 2023.
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Metric Definitions: Adjusted Net Income represents net income attributable to Aptiv before amortization, restructuring and other special items, including the tax impact thereon. Adjusted Operating Income is defined as net income before interest expense, other income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, amortization, restructuring and other special items. Adjusted Operating Income Margin is defined as Adjusted Operating Income as a percentage of net sales. Adjusted Revenue Growth is defined as the year-over-year change in reported net sales relative to the comparable period, excluding the impact on net sales from currency exchange, commodity movements, acquisitions, divestitures and other transactions. 
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Cash Flow Before Financing represents cash provided by (used in) operating activities plus cash provided by (used in) investing activities, adjusted for the purchase price of business acquisitions and other transactions, the cost of significant technology investments and net proceeds from the divestiture of discontinued operations and other significant businesses. Return on Net Assets is defined as tax-affected operating income (net income before interest expense, other income (expense), net income tax expense, equity income (loss), net of tax), divided by average net working capital plus average net property, plant and equipment, measured each calendar year; not adjusted for restructuring expenses that are expected to provide future benefit to the Company. Appendix A contains a reconciliation of these numbers to U.S. GAAP financial measures. CEO REALIZED PAY AND OUR PERFORMANCE The compensation programs for our named executive officers are heavily weighted toward performance-based opportunities that are at-risk and subject to our performance. Incentive plan metrics are intended to drive results that create value for our shareholders. The chart below illustrates the relationship between Mr. Clark’s target performance-based long-term incentive award opportunity and the amounts he realized based on our performance against the metrics established for the performance period ended December 31, 2023. While our strong financial performance over the three-year performance period exceeded target, our stock price performance over the same period had a significant impact on how much value Mr. Clark realized from the target opportunity granted to him. This table supplements, but is not a substitute for, the information contained in the “2023 Summary Compensation Table” and the “2023 Pay Versus Performance Table”. 
| • | | Expanding our market relevant portfolio to addressThe chart above depicts the industry’s top challenges, including high voltage electrification and active safety technologies; and
Significantly enhancing our commitment to corporate sustainability.
Appendix A contains a reconciliationTarget value of non-GAAP financial measures usedperformance-based RSUs granted in this disclosure to U.S. GAAP financial measures.
2020 Shareholder Engagement. Aptiv is committed to proactive engagement, communication, and transparency with shareholders. During 2020, we engaged institutional shareholders with respect to a variety of topics related to employee and board culture, board recruitment and refreshment, safety performance and sustainability efforts, and executive compensation. Raj Gupta,2021. The Realized value represents the Chairmanvalue of the Board and Chairman of the Compensation Committee, as well as members of management,
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2021 performance-based RSUs that vested on December 31, 2023.
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| • | | Compensation Discussion and Analysis (continued)
participated, as appropriate. In these meetings, we solicited feedback and provided information to our shareholders. We also specifically solicited insight regarding shareholder sentiment about potential adjustments to executive compensation programs.
In addition, membersTarget value reflects 44,910 target performance-based RSUs multiplied by grant date closing share price of management met with our investors throughout the year to discuss our businesses, technologies, end markets, financial results, operational execution and our sustainability efforts at numerous conferences and roadshows, in addition to Company-hosted events and quarterly conference calls. We also shared financial and ESG information relevant to our shareholders through our Sustainability Report, our Investor Relations website, our Annual Report and this Proxy Statement.
2020 Say-on-Pay. At our 2020 Annual Meeting of Shareholders, we received support from approximately 96% of votes cast as to our named executive officers’ compensation. Management and the Compensation Committee reviewed our shareholders’ 2020 Say-on-Pay vote and believe it to be a strong indication of continuing support for the Company’s executive compensation program and pay-for-performance philosophy. Therefore, the Compensation Committee maintained its overall pay-for-performance philosophy, compensation objectives and governing principles it has used in recent years when making decisions or adopting policies regarding executive compensation for 2020 and subsequent years. However, given the significant disruptions caused by COVID-19 after the establishment of 2020 executive compensation goals, the Compensation Committee and management believed it was important to solicit additional shareholder insight related to executive compensation practices related to COVID-19, as described above.
COVID-19 Impacts on Shareholders, Employees, and Executives. Our Board and management team took immediate and decisive actions in response to COVID-19 to protect the interests of many stakeholder groups, including employees, shareholders, customers, suppliers, and our communities.
For those actions that related to or impacted compensation, our Compensation Committee’s philosophy was simple:
Ensure our shareholders’ value is preserved and our non-executive employees’ compensation is addressed first, with our executives’ compensation adjusted afterward;
Reasonably adjust executive compensation for the impacts of COVID-19 on our outstanding compensation programs in order to preserve our pay-for-performance philosophy, and design these adjustments to be more resilient to potential future COVID-19 impacts;
Reduce pay opportunities in light of the updated metrics and targets following the impacts of COVID-19; and
Transparently report the compensation program adjustments.
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT $149.84.
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| • | | Compensation Discussion and Analysis (continued)
We believe we have been successful in following those principles. The table below sets forth the short-term impactsRealized value of the COVID-19 pandemic on our shareholders, our employees and our executives, andperformance-based RSUs represents a share price of $89.72 as of December 31, 2023 with a performance factor of 86%, as described in the status of these effects at the end of 2020.
| | | | | | | | | | | | | SHORT-TERM IMPACTS | | | | END-OF-YEAR IMPACTS | INCREASING
SHAREHOLDER
VALUE
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| | Temporary stock price decline
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| | Stock price reached all-time highs in Q4 2020
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| | Stock price on March 18th closed at $33.55, down 64% from the December 31, 2019 close
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| | At December 31, 2020, stock closed at
$130.29, resulting in a 2018-2020 TSR of 49.6%
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| | Dividend suspended in March 2020
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| | On a relative basis, our TSR performed at the 89th percentile within our TSR peer group
| CARING FOR
OUR
EMPLOYEES
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| | Temporary lay-offs for workers in production facilities aligned with customer and government-mandated shutdowns
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| | Approved a program to provide financial recognition to approximately 15,000 employees (excluding NEOs and other officers)
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| | Furloughs for salaried non-plant roles | |
| | Implemented previously-approved salary increases for salaried employees, effective September 1, 2020
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| | Suspension of annual salary increases | |
| | Reinstated Aptiv’s retirement plan contributions for US, Ireland, and Mexico employees, effective January 1, 2021
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| | Suspension of retirement plan contributions in the US, Ireland and Mexico | |
| | Shared Aptiv’s safety protocols with governments for adoption
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| | Implemented SAFE start protocols and contact tracing systems to keep our employees safe
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| | Provided PPE to our communities
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| | Following mitigation of impacts of COVID-19 on shareholders and employees, the
Compensation Committee adjusted incentive programs to restore their motivational impact
and preserve our pay-for-performance philosophy
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| | | | | | | | | | | | | | | | | | RETAINING AND MOTIVATING OUR EXECUTIVES
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| | Voluntary base salary reduction of 50% by the CEO and 10% by our senior officers
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| | Adjusted incentive awards to restore intended motivational and retentive value and preserve our pay-for-performance philosophy
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| | Short- and long-term performance compensation programs decreased significantly in retentive and motivational value across all three outstanding long-term performance cycles
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| | Reduced upside potential in the 2020 short-term incentive award cycle and in the 2019 and 2020 long-term incentive award cycles
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| | Capped payouts at target if relative TSR is below median for the 2019 and 2020 long-term incentive cycles
“2021-2023 Performance-Based RSUs” discussion below. |
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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Compensation Discussion and Analysis (continued)
Compensation Governance and Alignment with Shareholders
Aptiv’s executive compensation program is designed to attract, retain and motivate the leaders who drive the successful execution of our business strategies, which seek to balance achievement of targeted near-term results with building long-term shareholder value through sustained execution. Our focus on pay-for-performance and corporate governance aims to help ensure alignment with the interests of our shareholders, as highlighted below:
| | | | | | | Pay for Performance
| | More information
on page
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| | 90% of 2020 total target annual compensation for the CEO is at risk and 75% is granted in equity, while, on average, 81% of 2020 target annual compensation for the other NEOs is at risk and 63% is granted in equity.
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| | We target executive compensation to approximate a competitive range around the market median (50th percentile) and deliver compensation above or below this level as determined by performance.
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| | We use a structured goal-setting process for performance incentives, with multiple levels of review.
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| | NEOs’ annual incentives in typical years are based on achievement of Corporate, Segment and individual performance goals.
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| | 75% of the NEOs’ long-term incentive compensation consists of performance-based RSUs, which deliver value based on achievement of financial and relative TSR goals. The value of the remaining 25% of the NEOs’ long-term incentive compensation is awarded in the form of time-based RSUs and fluctuates with Aptiv’s share price.
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| | We review and analyze our pay-for-performance alignment on an annual basis.
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| | | | | | | COMPENSATION DISCUSSION AND ANALYSIS | | 33 |
| | | | | | | Compensation Governance
| | More information
on page
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| | We actively engage with our shareholders by conducting regular meetings with our major shareholders to discuss governance and executive compensation matters.
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| | We disclose our performance metrics.
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| | We maintain a reasonable severance practice with market appropriate post-employment provisions.
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| | We maintain stock ownership guidelines for our NEOs and directors.
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| | We maintain clawback, anti-hedging and anti-pledging policies.
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| | We offer no excise tax gross-ups or tax assistance unique to our NEOs.
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| | Our Compensation Committee utilizes an independent compensation consultant.
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| | Our compensation programs are designed to discourage imprudent risk.
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| | We devote focused time to leadership development and succession planning efforts.
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| | Our equity grant practices, including burn rate and dilution, are prudent.
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| | The Compensation Committee is provided tally sheets to assess total compensation for our NEOs.
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OUR NAMED EXECUTIVE OFFICERS
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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Compensation Discussion and Analysis (continued)
2020 Compensation Program Overview
Our Named Executive Officers
| | | For fiscal year 2020,
For fiscal year 2023, the NEOs were: | | | | | Kevin P. Clark | | Chairman and Chief Executive Officer (“CEO”) | | | Joseph R. Massaro | | Chief Financial Officer (“CFO”) and Senior Vice President, Business Operations | | | William T. Presley | | Senior Vice President and Chief Operating Officer, and President, Signal & Power Solutions | | | Obed D. Louissaint | | Senior Vice President and Chief People Officer | | | Benjamin Lyon | | Senior Vice President and Chief Technology Officer | | | Katherine H. Ramundo | | Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Secretary | |
We have included Mr. Presley as an additional NEO given his role with Aptiv.
| | President and Chief Executive Officer (“CEO”)
| Joseph R. Massaro
| | Chief Financial Officer (“CFO”) and Senior Vice President, Business Operations
| David Paja
| | Senior Vice President and President, Advanced Safety and User Experience Segment
| David M. Sherbin
| | Senior Vice President, General Counsel, Chief Compliance Officer and Secretary (Mr. Sherbin is retiring from Aptiv effective April 1, 2021.)
| Mariya K. Trickett
| | | | | | 34 | | COMPENSATION DISCUSSION AND ANALYSIS | | |
COMPENSATION GOVERNANCE AND ALIGNMENT WITH SHAREHOLDERS Aptiv’s executive compensation program is designed to attract, retain and motivate the leaders who drive the successful execution of our business strategies. Our program seeks to balance achievement of targeted near-term results with building long- term shareholder value through sustained long-term performance. Our focus on pay-for-performance and corporate governance aims to achieve alignment with the interests of our shareholders, as highlighted below: Senior Vice President and Chief Human Resources Officer
| | | | | | | Pay for Performance | | More Information On Page | | | |  | | 91% of 2023 total target annual compensation for the CEO is at risk and 78% is granted in equity; on average, 83% of 2023 total target annual compensation for the other NEOs is at risk and 65% is granted in equity. | | 37 | | | | | | We use a structured goal-setting process for performance incentives, with multiple levels of review including the Compensation Committee, its consultant and senior management. | | 38 | | | | | | NEOs’ annual incentives are typically based on achievement of multi-faceted financial and strategic annual performance goals. | | 38 | | | | | | 60% of the NEOs’ long-term incentive compensation consists of performance-based RSUs, which deliver value based on achievement of multi-year financial and relative TSR goals. | | 43 | | | | | | We review and analyze our pay-for-performance alignment on an annual basis, both in absolute terms and relative to our peer group. | | — |
| | | | | | | Compensation Governance | | More Information On Page | | | | | | We actively engage with our shareholders to discuss governance and executive compensation matters. | | 34 | | | | | | We maintain reasonable severance practices in line with market practices, including double-trigger change in control provisions. | | 45 | | | | | | We maintain stock ownership guidelines for our NEOs and directors. | | 46 | | | | | | We maintain insider trading, comprehensive clawback, anti-hedging and anti-pledging policies. | | 46 | | | | | | We offer no excise tax gross-upsto our NEOs. | | 47 | | | | | | Our Compensation Committee utilizes an independent compensation consultant. | | 47 | | | | | | Our compensation programs are designed to discourage imprudent risk. | | — |
| | | | | | | COMPENSATION DISCUSSION AND ANALYSIS | | 35 |
EXECUTIVE COMPENSATION PHILOSOPHY AND STRATEGY General Philosophy in Establishing and Making Pay Decisions.Our executive compensation programs reflect our pay-for-performance philosophy and encourage executives to make sound decisions that drive short- and long-term shareholder value creation. The Compensation Committee utilizes a combination of fixed and variable pay elements in order to achieve the following objectives: | • | | Emphasize a pay-for-performance culture by linking incentive compensation to defined short- and long-term performance goals; |
| • | | In September 2020, Mr. Massaro’sAttract, retain and motivate key executives by providing competitive total compensation opportunities; and
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| • | | Align executive and investor interests by establishing market- and investor-relevant metrics that drive shareholder value creation. |
Given the on-going transformation of our Company, we seek talent across a broad range of industries, including technology. Our goal for target total direct compensation (base salary, annual and long-term incentives) for our officers, including the NEOs, is to provide market competitive compensation that allows us to attract and retain the best global talent. Compensation for individual roles is based on a review of market data and multiple factors, including each executive’s role and responsibilities, the individual’s performance over time, the experience and critical skills the individual may bring to his or her role with Aptiv, and talent market dynamics. 2023 Say-on-Pay.At our 2023 Annual Meeting, we received support from approximately 77.7% of votes cast for our named executive officers’ compensation. Management and the Compensation Committee closely reviewed our shareholders’ 2023 Say-on-Pay vote and believe it indicates support for the Company’s executive compensation program and pay-for-performance philosophy. Based on this support, as well as with the feedback we have heard through our shareholder engagement efforts described below, the Compensation Committee has maintained the overall pay-for-performance philosophy, compensation objectives and governing principles it has used in recent years when making decisions or adopting policies regarding executive compensation. However, in response to specific feedback received from shareholders as part of Aptiv’s engagement efforts and to provide the relevant context for its compensation decisions, Aptiv has expanded this year’s Compensation Disclosure and Analysis disclosure to provide a greater level of detail about the compensation decisions taken by the Compensation Committee. 2023 Shareholder Engagement.Aptiv is committed to regular, proactive engagement, communication, and transparency with shareholders, which enables the Company to better understand shareholders’ perspectives about Aptiv and the market generally. As part of this commitment, we extended the opportunity to our top 25 shareholders representing approximately 53% of our then-outstanding shares, to meet with us in April 2023 prior to our 2023 Annual Meeting. Eight shareholders, representing over 26% of our then-outstanding shares, accepted our invitation and met with members of the Compensation Committee, along with our Chief Legal Officer, Chief People Officer and Vice President, Investor Relations, during these outreach sessions. The principal focus of the April engagement was executive compensation, and as described above we heard from our shareholders that they would appreciate disclosure of additional detail regarding compensation decisions. We again extended the opportunity to our top 25 shareholders representing approximately 52% of our then-outstanding shares in Fall 2023, for a discussion focused on stewardship with the same members of senior management that participated in the outreach in April. 13 of these shareholders, representing approximately 24% of Aptiv’s then-outstanding shares, accepted our invitation to meet at that time. While Aptiv was prepared to focus on executive compensation in these engagements, for the most part, shareholders preferred to discuss topics more generally related to sustainability and related topics, such as Aptiv’s path to carbon neutrality, supply chain management, talent development, and diversity and inclusion. The Board and management appreciated the constructive and positive input received from shareholders on all topics, which has continued to give us valuable insight into our shareholders’ priorities. We have and will continue to incorporate shareholder feedback into our practices. In addition to the formal outreach discussed above, members of management continue to have regular and extensive interaction with our investors throughout the year to discuss our businesses, technologies, end markets, financial results, operational
| | | | | | 36 | | COMPENSATION DISCUSSION AND ANALYSIS | | |
execution and our sustainability efforts at numerous conferences and roadshows, in addition to Company-hosted events and quarterly conference calls; in particular, in 2023, the Company hosted 290 investor calls, 13 investor conferences and 19 marketing/non-deal roadshow events. We have also shared financial and sustainability information relevant to our shareholders through our Sustainability Report, our Investor Relations website, our Annual Report and this Proxy Statement. 2023 Peer Group Analysis.We use a group of peer companies to compare NEO compensation to market. The Compensation Committee reviews and determines the composition of our peer group on an annual basis, with input from its independent compensation consultant and management. Aptiv’s 2023 peer group (referenced for purposes of 2023 compensation decisions) consisted of the following companies, whose aggregate profile was comparable to Aptiv in terms of size, industry, operating characteristics and competition for executive talent: | | | | | Amphenol Corporation | | Illinois Tool Works, Inc. | | | Corning Incorporated | | Johnson Controls International plc | | | Cummins, Inc. | | Lear Corporation | | | Eaton Corporation plc | | Rockwell Automation, Inc. | | | Emerson Electric Co. | | TE Connectivity Ltd. | | | Fortive Corporation | | Textron Inc. | | | Honeywell International Inc. | | Trane Technologies PLC |
No changes were made to the peer group referenced for purposes of our 2023 compensation decisions. In 2023, target total direct compensation among our NEOs, on average, was positioned within what we view as a competitive range of the peer group. In addition to the competitive market reference provided by our 2023 peer group, the Compensation Committee periodically uses supplemental market references from the technology sector for select roles to help prioritize building the leadership and technology skills within Aptiv that are fundamental to our ability to achieve our long-term strategy. One of the areas of highest focus has been on strengthening our product management, software development, artificial intelligence and machine learning, and systems engineering expertise. These skills are crucial to the development and deployment of next generation applications, cloud-native software, and sensor-to-cloud connectivity platforms which enable vehicles to efficiently evolve and improve over time. These capabilities are accelerating the commercialization of our Smart Vehicle Architecture (“SVA”) and other future full-systems solutions. These supplemental market references serve as an additional resource for the Compensation Committee to evaluate certain compensation decisions, where appropriate.
| | | | | | | COMPENSATION DISCUSSION AND ANALYSIS | | 37 |
2023 COMPENSATION PROGRAM OVERVIEW We regularly undertake a comprehensive review of our business plan to identify strategic initiatives that should be linked to executive compensation. We also assess the level of risk in our Company-wide compensation programs to ensure that they do not encourage imprudent risk-taking. The following table outlines the primary elements of executive compensation for the NEOs for 2023 and indicates how these elements relate to our key strategic objectives: | | | | | | Element | | Key Features | | Relationship to include responsibilityStrategic Objectives |  | | | | Annual Base Salary | | • Commensurate with job responsibilities, individual performance, experience, market competitiveness and talent market dynamics • Reviewed on an annual basis for global manufacturingmarket competitiveness and supply chain operations,individual performance | | • Attract and his title was updated in acknowledgementretain key executives by providing market-competitive fixed compensation | | | | Annual Incentive Plan Awards | | • Compensation Committee approves an incentive design for each performance period based on selected financial, operational and strategic metrics • Each executive is granted a target award opportunity based upon job responsibilities, individual performance, experience, market competitiveness and talent market dynamics • Payouts can range from 0% to 200% of this added role.target and are determined by achievement of pre-established financial goals and strategic objectives 2020
| | • Pay-for-performance and encourages accountability by rewarding achievement of corporate objectives • Align executive and shareholder interests • Motivate the pursuit of specific business goals that drive long-term value creation • Drive our current and future platforms and Aptiv’s sustainability commitments through strategic goals • Attract, retain and motivate key executives with market-competitive incentive compensation opportunities | | | | Long-Term Incentive Plan Awards | | • Target Annual Total Direct Compensation Mix.award granted commensurate with job responsibilities, individual performance, experience, market competitiveness and talent market dynamics • Grant RSU awards, 60% of which are earned based upon achievement of Company performance goals, including multi-year financial and relative TSR targets, and 40% of which vest over time | | • Pay-for-performance and encourages accountability by rewarding achievement of corporate objectives • Align executive and shareholder interests • Attract, retain and motivate key executives with market-competitive incentive compensation opportunities • Utilize multi-year vesting period and multiple metrics aligned to long-term shareholder value creation, including stock price performance |  | | | | Retirement Programs | | • Qualified defined contribution plan available to all U.S. salaried employees, including NEOs • Non-qualified defined contribution plan available to eligible U.S. employees, including NEOs, that allows for contributions that exceed statutory limits under our qualified defined contribution plan | | • Attract and retain key executives with market-competitive compensation opportunities that foster long-term savings opportunities |
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Additional, non-primary elements of executive compensation, such as payments related to life insurance, tax preparation, expatriate assignments or relocation, may be provided to NEOs from time to time. Any of these elements that were provided to NEOs in 2023 are reflected in the “All Other Compensation” column of the “2023 Summary Compensation Table”. | | | | |  | | 2023 TARGET ANNUAL TOTAL DIRECT COMPENSATION MIX FOR CEO AND OTHER NEOS* Base salary and annual and long-term incentive award opportunities (all as more fully described below) are the elements of our NEOs’ total direct compensation. A majority of each NEO’s total direct compensation opportunity is comprised of performance-based (“at-risk”)pay, in line with the Committee’sCompany’s compensation philosophy. OurThe payouts of our annual incentive awards and the performance-based componentcomponents of our long-term incentive awards are considered performance-based pay, as the payout of these awards is dependent on the achievement of specified performance goals. The time-based portion ofAll our RSU awards, is retentive while also aligningboth time-based and performance-based, are aligned with Company performance, as the final value realized is based on the Company’s share price. The significant proportion of performance-based pay aligns the compensation interests of our NEO’s with those of Aptiv’s shareholders.
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| * | The mix of annual target direct compensation for our CEO and the average for our other NEOs on average in 2020, prior to the adjustments made to our executive compensation program in light of COVID-19 as described above,2023 is shown below:above. |
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| | | | | | | | | | | | | | | | | | | | | | | | 2023 NEO Target Total Direct Compensation Opportunities The following table depicts 2023 target annual total direct compensation opportunities for the NEOs. This table reflects base salary,
plus Annual and Long-Term Incentive Plan target award values, and therefore uses different valuation methodologies from those
required for purposes of the “2023 Summary Compensation Table” under applicable SEC rules. Further, this table does not include
information regarding changes in pension value and in non-qualified deferred compensation earnings, information regarding all other
compensation or certain additional footnote disclosure, each as required to be presented in the “2023 Summary Compensation Table”
under the rules of the SEC. As such, this table should not be viewed as a substitute for the “2023 Summary Compensation Table”. | | | | | | | Name | | Base Salary ($)(1) | | | Annual Incentive
Target Award ($) | | Long-Term Incentive Plan Target Annual Award ($) | | Total Direct Compensation ($)(2) | | | | | | | | | | | | Kevin P. Clark Chairman and Chief Executive Officer | | | $1,462,272 | | | | $2,193,408 | | | | $13,000,000 | | | | $16,655,680 | | | | | | | | | | | | | Joseph R. Massaro Chief Financial Officer and Senior Vice President, Business Operations | | | 1,275,000 | | | | 1,593,750 | | | | 5,750,000 | | | | 8,618,750 | | | | | | | | | | | | | William T. Presley Senior Vice President and Chief Operating Officer, and President, Signal & Power Solutions | | | 900,000 | | | | 900,000 | | | | 3,500,000 | | | | 5,300,000 | | | | | | | | | | | | | Obed D. Louissaint Senior Vice President and Chief People Officer | | | 750,000 | | | | 750,000 | | | | 3,000,000 | | | | 4,500,000 | | | | | | | | | | | | | Benjamin Lyon Senior Vice President and Chief Technology Officer | | | 800,000 | | | | 800,000 | | | | 2,900,000 | | | | 4,500,000 | | | | | | | | | | | | | Katherine H. Ramundo Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Secretary | | | 775,000 | | | | 775,000 | | | | 2,300,000 | | | | 3,850,000 | | | | | | | | | (1) Reflects base salary rates as of April 1, 2023. (2) This table does not reflect the value of new hire awards for Messrs. Louissaint and Lyon, and a special award for Ms. Ramundo, which are discussed below. | | | |
2023 ANNUAL COMPENSATION DETERMINATION Individual base salaries and annual incentive targets for the NEOs are established based on the scope of each NEO’s responsibilities, individual performance, experience, market pay data and talent market dynamics. 2023 Base Salaries. Base salary is intended to be commensurate with each NEO’s responsibilities, individual performance and experience. Our practice is to make periodic adjustments to base salary, although we review compensation competitiveness annually. During 2023, the Compensation Committee approved base salary increases for two of our NEOs. Generally, these adjustments were intended to increase the market competitiveness of their compensation and to recognize the continued growth in their respective organizational responsibilities and exceptional performance. The following table summarizes the adjustments: | | | | | | | | | | | | | Name(1) | | Base Salary Adjustment Effective Date | | | Adjusted Base Salary ($) | | | Increase (%) | | | | | | Joseph R. Massaro | | | April 1, 2023 | | | $ | 1,275,000 | | | | 6.3 | % | | | | | Katherine H. Ramundo | | | April 1, 2023 | | | | 775,000 | | | | 14.6 | |
| (1) | Neither Mr. Clark nor Mr. Presley received a base salary increase in 2023. In connection with Mr. Presley’s promotion to Chief Operating Officer on December 15, 2022, he received a base salary increase to $900,000. Messrs. Louissaint and Lyon joined Aptiv on January 1, 2023 and December 28, 2022, respectively; as a result, neither of them was eligible for a base salary increase in 2023. | 33 | | APTIV PLC |
| | | | | | 40 | | COMPENSATION DISCUSSION AND ANALYSIS | | |
2023 Annual Incentive Plan Awards. Our Annual Incentive Plan is designed to motivate our NEOs to drive profitable growth, including earnings and cash flow, and our strategic priorities by measuring the NEOs’ performance against our goals. The Compensation Committee establishes the individual annual incentive target for each NEO at a market competitive level, based on the NEO’s position, individual performance, and the scope of his or her responsibilities. As designed, payouts based on the metrics described below can range from 0% to 200% of each NEO’s annual incentive target. The Compensation Committee, working with management and its independent compensation consultant, sets the performance metrics and objectives based on Aptiv’s annual business objectives. For 2023, each NEO’s award payout was designed to be determined as follows: NEO AIP Weighting 
Financial Performance Objectives (75% Weighting).For 2023, financial performance objectives were based on the following metrics, which measure our overall financial performance in support of our business strategy: | | | | | Weighting (%) Performance Metrics | | 75% Financial | | Rationale | | | | Adjusted Net Income (NI)(1) | | 25% | | Adjusted NI provides a measure of our underlying earnings and serves as an indicator of our overall financial performance | | | | Cash Flow Before Financing (CFBF)(2) | | 25% | | CFBF measures the generation of cash required to gain scale in our current platforms and to pursue future platforms | | | | Growth Over Market (GOM) | | 25% | | GOM measures sales growth relative to the markets in which we operate and supports the conversion of bookings to revenue |
| (1) | Adjusted NI represents net income attributable to Aptiv before restructuring and other special items, including the tax impact thereon. |
| (2) | CFBFrepresents cash provided by (used in) operating activities plus cash provided by (used in) investing activities, adjusted for the purchase price of business acquisitions and other transactions, the cost of significant technology investments and net proceeds from the divestiture of discontinued operations and other significant businesses. | |
Performance Goal Setting. The NI, CFBF and GOM goals and the award payout levels related to the achievement of those goals are measured on a performance scale set by the Compensation Committee. Performance below the minimum threshold for a metric would result in no payout for that metric, and performance above the maximum level for a metric would be capped at a maximum total payout of 200% of target with respect to that metric. The Compensation Committee consistently sets performance targets that are rigorous and aligned with Aptiv’s three-year goal planning process and commitments to operational excellence. Our Annual Incentive Plan target goals, approved by the Compensation Committee, are generally established to reflect our focus on growth over prior year actual outcomes and above market growth in the performance period. Aptiv’s targeted levels of performance continue to reflect rigorous hurdles taking into account the challenging macroeconomic outlook and consistent with our goal of delivering exceptional operational performance. Given the ongoing market uncertainty and the goal-setting challenges associated with macroeconomic headwinds in January 2023, the Compensation Committee determined that the 2023 Annual Incentive Plan would include the following design changes:
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| • | | The Compensation Committee widened the performance ranges by lowering the threshold performance level and increasing the maximum performance level. To balance the impact of these changes, the Committee lowered the possible payout for threshold performance from 40% to 25%. The Committee made these adjustments because in an uncertain market environment, executive leadership stability is paramount. |
| • | | Compensation Discussion and Analysis (continued)
2020 Target Compensation Structure.The following table depicts the initial 2020 target annual direct compensation opportunities for the NEOs. The amounts reflected in this table were determined by the Compensation Committee in January 2020, prior toapproved financial targets for two consecutive six-month financial performance periods, with one payout at the global spreadend of the COVID-19 pandemicfiscal year to address near-term macroeconomic and subsequent production shutdowns in China, North America and Europe duringsupply chain headwinds. The Compensation Committee believed that this structure would enhance visibility for goal setting purposes over a shorter horizon within the framework of the Board-approved annual financial plan. The Compensation Committee established performance criteria for the first half of 2020. This2023 (“H1 23”) and for the second half of 2023 (“H2 23”). Both H1 23 and H2 23 performance targets were consistent with the Board-approved annual financial plan. Despite the momentum in the business in the first half of 2023, during which Aptiv delivered results exceeding the H1 23 targets, the United Automobile Workers strike and subsequent vehicle production slow down created a more challenging performance environment in the second half of 2023, which impacted the Company’s financial results, as depicted in the table does not reflect the base salary reductions, deferrals of base salary increases, and reductions of target annual incentive plan awards that subsequently occurred during 2020 in light of COVID-19 and the resultant impacts on the Company. It also does not reflect the grant date fair valuebelow.
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The 2023 corporate financial performance goals and results by metric for each of the two financial performance periods were: | | | | | | | | | | | Performance Metric* | | Performance
Period | | Threshold 25% Payout | | Target 100% Payout | | Maximum 200% Payout | | Achievement | Adjusted Net Income (NI) | | H1 23 | | | | | | Actual: $434M | | 200% | | |  | | | $222M | | $332M | | $425M | | | H2 23 | | | | Actual: $691M | | | | 99% | | |  | | | $463M | | $695M | | $888M | Cash Flow Before Financing (CFBF) | | H1 23 | | | | | | Actual: ($197M) | | 200% | | | | | | ($423M) | | ($282M) | | ($220M) | | | H2 23 | | Actual: $946M | | | | 74% | | |  | | | $713M | | $1,070M | | $1,367M | Growth Over Market (GOM) | | H1 23 | | | | | | Actual: 7.5% | | 185% | | |  | | | 3.6% | | 5.4% | | 7.8% | | | Actual: (1.3%)
| | | | | | 0% | | | H2 23 | |  | | | 3.6% | | 5.4% | | 7.8% | | | | | | Financial Performance (% of Target) | | | | | | | | 126% |
| * | For purposes of the annual 2020 long-term incentive awards grantedAdjusted NI calculated results under the Annual Incentive Plan, to maintain the program rigor, the results shown in February 2020, orAppendix A of our Proxy Statement were adjusted to remove income earned by the Company on incremental accounting impact associated with adjustments made tosales volumes that were not anticipated at the outstanding performance-based equity awards during 2020, eachstart of which are discussed in further detail belowthe performance period and not included in the “Supplemental Compensation Information and Reconciliation” section. Further, this table does not include information regarding changesoriginal target. For purposes of the Cash Flow Before Financing calculated results under the Annual Incentive Plan, the results shown in pension value and non-qualified deferred compensation earnings, or information regarding all other compensation, each of which are presented in the “2020 Summary Compensation Table.” As such, this table should not be viewed as a substitute for the “2020 Summary Compensation Table.” | | | | | | | | | | | | | | | | | | Name | | Base Salary ($)(1) | | | Annual Incentive
Target Award ($) | | | Long-Term
Incentive Plan
Target Annual
Award ($) | | | Total ($) | | Kevin P. Clark | | $ | 1,462,272 | | | | $2,193,408 | | | $ | 11,000,000 | | | $ | 14,655,680 | | | President and Chief Executive Officer | | | | | | | | | | | | | | | | | Joseph R. Massaro | | | 935,000 | | | | 935,000 | | | | 3,700,000 | | | | 5,570,000 | | | Chief Financial Officer and Senior Vice President, Business Operations | | | | | | | | | | | | | | | | | David Paja(2) | | | 649,666 | | | | 552,216 | | | | 2,200,000 | | | | 3,401,882 | | Senior Vice President and President, Advanced Safety and
User Experience Segment | | | | | | | | | | | | | | | | | David M. Sherbin | | | 621,500 | | | | 559,350 | | | | 1,550,000 | | | | 2,730,850 | | | Senior Vice President, General Counsel, Chief Compliance Officer and Secretary | | | | | | | | | | | | | | | | | Mariya K. Trickett | | | 550,000 | | | | 467,500 | | | | 1,500,000 | | | | 2,517,500 | | | Senior Vice President and Chief Human Resources Officer | | | | | | | | | | | | | | | | |
(1) | Reflects base salary rates as of September 1, 2020, which were originally to be effective April 1, 2020. As described below, base salaries for the NEOs were reduced from April 2020 through August 2020 prior to the implementation of these base salary rates.
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(2) | Mr. Paja is a German employee and his salary and bonus are paid in Euros. U.S. Dollar amounts in this Proxy Statement with respect to Mr. Paja have been converted from Euros at a rate of 1.14 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each calendar month in 2020.
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General Philosophy in Establishing and Making Pay Decisions. Our executive compensation programs reflect our pay-for-performance philosophy and encourage executives to make sound decisions that drive short- and long-term shareholder value creation. The Compensation Committee utilizes a combination of fixed and variable pay elements in order to achieve the following objectives:
Emphasize a pay-for-performance culture by linking incentive compensation to defined short- and long-term performance goals;
Attract, retain and motivate key executives by providing competitive total compensation opportunities; and
Align executive and investor interests by establishing market- and investor-relevant metrics that drive shareholder value creation.
Given the transformationAppendix A of our Company, we seek talent across a broad rangeProxy Statement were adjusted to remove the impact of industries, including technology,M&A activity and
our goal for target total direct compensation (base salary, annual incremental sales volumes that were not anticipated and long-term incentives) for our officers, including the NEOs, is to approximate a competitive range around the market median (50th percentile). Compensation for individual roles may be positioned higher or lower than the market median where we believe it is appropriate, considering multiple factors such as each executive’s role and responsibilities, labor market dynamics, the individual’s performance over time, and the experience and critical skills the individual may bring to his or her role with Aptiv.
2020 Peer Group Analysis. We use a group of peer companies to compare NEO compensation to market. The Compensation Committee reviews and determines the composition of our peer group on an annual basis, considering input from its independent compensation consultant and management.
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Compensation Discussion and Analysis (continued)
Aptiv’s 2020 peer group consistedwere not part of the following companies, whose aggregate profile was comparable to Aptiv in terms of size, industry, operating characteristics and competition for executive talent.
| | | Amphenol Corporation
| | Illinois Tool Works, Inc.
| Corning Incorporated
| | Johnson Controls International plc
| Cummins Inc.
| | Lear Corporation
| Eaton Corporation plc
| | Rockwell Automation, Inc.
| Emerson Electric Co.
| | TE Connectivity Ltd.
| Fortive Corporation
| | Textron Inc.
| Honeywell International Inc.
| | Trane Technologies PLC
|
No changes were made to the 2019 peer group for 2020; however, Ingersoll-Rand plc was renamed Trane Technologies PLC.
In 2020, target total direct compensation among our NEOs, on average, was positioned within a competitive range of the peer group median identified above. We adjust compensation when we believe that there is a market or individualoriginal performance issue that should be addressed to preserve the best interests of the shareholders.
Elements of Executive Compensation. In line with our executive compensation philosophy, for 2020 we provided the following primary elements of compensation to our officers, including the NEOs:
Base salary;
Annual incentive award;
Long-term incentive award; and
Other compensation, such as participation by the NEOs in defined contribution retirement plans and benefits that are the same as those in which similarly situated non-officer employees may participate.
Additional, non-primary elements of executive compensation, such as payments related to life insurance, tax preparation, expatriate assignments or relocation, may be provided to NEOs from time to time. Any of these elements that were provided to NEOs in 2020 are reflected in the “All Other Compensation” column of the “2020 Summary Compensation Table”.
We regularly undertake a comprehensive review of our business plan to identify strategic initiatives that should be linked to executive compensation. We also assess and review the level of risk in our Company-wide compensation programs to ensure that they do not encourage imprudent risk-taking.
The following table outlines the primary elements of executive compensation for the NEOs for 2020 and indicates how these elements relate to our key strategic objectives:
| | | | | Element | | Key Features | | Relationship to Strategic Objectives | Total Direct Compensation
| Annual Base Salary
| | • Commensurate with job responsibilities, experience, and qualitative and quantitative company or individual performance factors
• Reviewed on a periodic basis for competitiveness and individual performance
• Targeted within competitive range of peer group
| | • Attract and retain key executives by providing market-competitive fixed compensation
| Annual Incentive Plan
Awards
| | • Compensation Committee approves a target incentive pool for each performance period based on selected financial and/or operational metrics
• Each executive is granted a target award opportunity based on level of responsibility and market competitiveness
• Payouts in a typical year can range from 0% to 200% of target and are determined by achievement of financial goals based on pre-established objectives (at both the Corporate and, where applicable, Segment level), then may be adjusted to reflect individual performance achievement
| | • Pay-for-performance
• Align executive and shareholder interests
• Motivate the pursuit of specific business goals that drive long-term value creation
• SRM reflects ESG metrics related to talent, culture and diversity outcomes, and quality
• Attract, retain and motivate key executives with market-competitive compensation opportunitiestarget.
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Strategic Results Metric (25% Weighting).In January 2023, the Compensation Committee decided to shift achievement on our strategic initiatives from a +/- 10% modifier (a design feature in previous Annual Incentive Plan performance periods) to a 25% weighted metric (“Strategic Results Metric”) for 2023 to reinforce the importance of our strategic goals in executing on our business strategy. The strategic goals under the Strategic Results Metric fall under the following three pillars and align with our broader strategic framework, including our sustainability program, and are intended to motivate focus across the organization on specific goals that drive long-term value creation. Aptiv’s strategic goals are reviewed with the same rigor and processes as the quantitative goal-setting described above, because these strategic goals are important to our ability to drive shareholder value creation. 
Based on its holistic evaluation of our performance against our pre-established strategic goals, the Compensation Committee determined that a payout factor of 80% of target reflected the progress made and challenges faced in 2023 in relation to our Strategic Results Metric, as set forth in more detail below. | | | | | | | | | | | | | Strategic Results Metric | | | | | | | | | | | Business Foundation | | APTIV PLC |
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Compensation Discussion
| | | | | | | | | | | | | | | • Substantial enhancement in the transparency and Analysis (continued)depth of our supply chain, to manage risk proactively, as well as respond more effectively to unforeseen risk events. • Made progress in increasing leadership diversity, improving high performer retention and employee engagement, and scaling employee resource groups. Earned recognition from several external publications as a top employer. | | | | | Element | | Key Features | | Relationship to Strategic Objectives | | | • Strategic Results Modifier (“SRM”) provides for an adjustment to individual payout levels based on an assessment of performance against strategic qualitative factors reviewed and approved by the Compensation Committee at the beginning of each year
• For information on how the 2020 program was modified from our typical design, see “Executive Summary” above
| | | Long-Term Incentive Plan
Awards
| | • Target award granted commensurate with job responsibilities, market competitiveness, experience, and qualitative and quantitative Company and individual performance factors
• Grant RSU awards, 75% of which are earned based on Company performance metrics, including relative TSR, and 25% of which are time-based, which means that the value is determined by Aptiv’s share price
• For information on how the 2018, 2019 and 2020 programs were modified from our typical design, see “Executive Summary” above
| | • Pay-for-performance
• Aligns executive and shareholder interests
• Attract, retain and motivate key executives with market-competitive compensation opportunities
• Utilizes multi-year vesting period and metrics aligned to long-term shareholder value creation including stock price performance
| Other Compensation
| Retirement Programs
| | • Qualified defined contribution plan available to all U.S. salaried employees, including NEOs
• Non-qualified defined contribution plan available to eligible U.S. employees, including NEOs, who exceed statutory limits under our qualified defined contribution plan
• Non-qualified defined benefit plan that was frozen in 2008
• For information on certain changes in effect during 2020 regarding these programs, see “COVID-19 Impacts on Shareholders, Employees, and Executives” above
| | • Attract and retain key executives with market-competitive compensation opportunities
| | | | | | | | | Current Platforms | |  | | | | | | | | | | | | | | | • Exceeded bookings targets, with key awards across geographies and customers to gain momentum with deliverables and SVA bookings. • Achieved development milestones for power electronics and key software products. | | | | | | | | | Future Platforms | |  | | | | | | | | | | | | | | | • Integrated Wind River, progressed on synergy targets, cross business product development, internal usage of Wind River Studio, and growth of Wind River revenue. | | | | | | | | • Achieved development milestones for Aptiv software architecture; increased bookings pipeline; on-track with product roadmaps for ADAS, cockpit and middleware. | | | | | | | | | | Strategic Results Metric (% of Target) | | 80% | | |
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Compensation Discussion and Analysis (continued)
Alignment of Incentive Plans. We have aligned our 2020 performance-based annual and long-term incentive plans for executives with metrics on which the Company and its shareholders evaluate performance. The impact of COVID-19 on the Company’s 2020 performance is illustrated in the below financial metrics. Although the COVID-19 pandemic and the resultant impacts on the Company’s industry led to overall declines in most financial metrics as compared to prior years, the Company was able to take decisive actions as the
COVID-19 pandemic emerged that positioned us to generate positive financial returns following the resumption of global vehicle production. The Company’s successful response to the COVID-19 pandemic was reflected in the total shareholder returns delivered over the past 3 years. We have considered adjustments to our 2020 performance-based annual and long-term incentive programs for executives based on these metrics:
| | | | | | | Adjusted Net Income
(In Millions)
| | Cash Flow Before Financing
(In Millions)
|  | |  |
| | | Adjusted EBITDA
(In Millions)
| | Growth over Market
|  | |  | | | COMPENSATION DISCUSSION AND ANALYSIS | | 43 |
| | | Total Shareholder Return
2023 Annual Incentive Plan Payouts.The 2023 Annual Incentive Plan payouts for our CEO and other NEOs were based 75% on corporate financial performance and 25% on strategic goals. Initial Calculated Results. In determining the final payouts, the Compensation Committee evaluated our financial performance against identified threshold, target and maximum levels of corporate financial performance goals, which resulted in a calculated score of 126% of the target described above. Our Strategic Results Metric payout factor of 80% of target was determined by the Compensation Committee in its sole discretion, and reflected the Compensation Committee’s evaluation of the progress made on our strategic initiatives year-over-year, while recognizing that not all our goals were achieved. On a weighted basis, as shown below, the calculated payout score was 115% of target. Exercise of Negative Discretion. Despite strong performance in achieving the Company’s financial targets and the Company’s leadership team making significant progress on the Company’s strategic priorities in 2023, the Compensation Committee considered Aptiv shareholders’ experience and decided to exercise negative discretion to reduce the initial calculated payout score (115%) earned by the NEOs to 100% of target. (2018 through 2020)
| | Return on Net Assets
|  | |  |
* | The increase in return on net assets in 2020 is attributable to the $1.4 billion gain recognized on the formation of the Motional autonomous driving joint venture. Excluding the gain on the Motional joint venture, return on net assets was 14.0% in 2020, reflecting continued investments for revenue growth and profitability, as well as the impacts of the COVID-19 pandemic on the Company’s industry and operations.
As a result of the analysis described above, the Compensation Committee approved the following 2023 Annual Incentive Plan payouts for the NEOs. |
| | | | | | | | | Name | | Calculated Incentive Award Payout (115%) ($) | | | Impact of Negative Discretion (from 115% to 100%) | | Actual Payment ($) | | | | | Kevin P. Clark | | | $2,522,419 | | | ($329,011) | | $2,193,408 | | | | | Joseph R. Massaro | | | 1,832,813 | | | (239,063) | | 1,593,750 | | | | | William T. Presley | | | 1,035,000 | | | (135,000) | | 900,000 | | | | | Obed D. Louissaint | | | 862,500 | | | (112,500) | | 750,000 | | | | | Benjamin Lyon | | | 920,000 | | | (120,000) | | 800,000 | | | | | Katherine H. Ramundo | | | 891,250 | | | (116,250) | | 775,000 |
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Compensation Discussion and Analysis (continued)
| | | | | | 44 | | COMPENSATION DISCUSSION AND ANALYSIS | | |
2023 LONG-TERM INCENTIVE COMPENSATION Performance Metrics. Aptiv’s Long-Term Incentive Plan is designed to reward performance on long-term strategic metrics and to attract, retain and motivate participants. Aptiv’s Long-Term Incentive Plan is primarily performance-based, with 60% of the NEOs’ award consisting of performance-based RSUs, which deliver value if financial and relative TSR goals are met. The targets reflect Aptiv’s pay-for-performance culture, which help align executive and investor interests. The remaining 40% are time-based RSUs, the value of which fluctuates with Aptiv’s share price performance. The performance-based RSUs are settled after the results of a three-year performance period are determined. The time-based RSUs generally vest ratably over three years, beginning on the first anniversary of the grant date. The 2023 performance-based RSU grant vests at the end of 2025 and will be settled in early 2026 after the outcomes of the performance period are determined and approved. Under the design of the performance-based RSU awards, each NEO could receive from 0% to 200% of his or her target performance-based RSU award, as determined by Aptiv’s performance against certain Company-wide performance metrics. The metrics and weights used in the 2023 awards are: | | | | | Metric Definitions | | Weighting (%) | | | Adjusted EBITDA represents net income before depreciation and amortization (including asset impairments), interest expense, other income (expense), net, income tax (expense) benefit, equity income (loss), net of tax, restructuring and other special items.
Average Return on Net Assets (RONA)(1) | | | 33.3 | % | | | Cumulative Net Income (NI)(2) | | | 33.3 | | | | Relative Total Shareholder Return (TSR)(3) | | | 33.3 | |
| (1) | Average RONA is defined as tax-affected operating income [net income before interest expense, other income (expense), net, income tax expense, equity income (loss), net of tax, divided by average net working capital plus average net property, plant and equipment measuredfor each calendar year; notyear, as adjusted for incentive plan calculation purposes. |
| (2) | Cumulative NI represents net income attributable to Aptiv before restructuring expenses that are expected to provide future benefit toand other special items, including the Company.tax impact thereon. |
| (3) | Total Shareholder ReturnRelative TSR is measured by comparing the average closing price per share of the Company’s ordinary shares for all available trading days in December 2025 to the average closing price per share of the Company’s ordinary shares for all available trading days in December 2022, including the reinvestment of dividends, relative to the companies in the Russell 3000 Auto Parts Index.
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2023 Grants. The Compensation Committee established the following 2023 target long-term incentive award values for our NEOs (consisting of performance-based RSUs and time-based RSUs, as described above). In so doing, the Compensation Committee considered market compensation benchmarks and each NEO’s scope of responsibilities, individual performance and retention considerations. Mr. Presley’s year-over-year increase in target long-term incentive value was connected to his promotion to Chief Operating Officer role, effective December 15, 2022. | | | | | | | | | | | | | Name | | Performance-Based RSUs ($ at Target) | | Time-Based RSUs | | Total Long-Term Incentive Plan Target Annual Award ($) | | | | | Kevin P. Clark | | | $7,800,000 | | | | $5,200,000 | | | | $13,000,000 | | | | | | Joseph R. Massaro | | | 3,450,000 | | | | 2,300,000 | | | | 5,750,000 | | | | | | William T. Presley | | | 2,100,000 | | | | 1,400,000 | | | | 3,500,000 | | | | | | Obed D. Louissaint | | | 1,800,000 | | | | 1,200,000 | | | | 3,000,000 | | | | | | Benjamin Lyon | | | 1,740,000 | | | | 1,160,000 | | | | 2,900,000 | | | | | | Katherine H. Ramundo | | | 1,380,000 | | | | 920,000 | | | | 2,300,000 | |
In addition to their respective annual long-term incentive awards, Messrs. Louissaint and Lyon were awarded new hire equity awards, both granted in February 2023. These awards were granted to keep Messrs. Louissaint and Lyon whole for the cash and equity incentive compensation that each forfeited at their prior employers in order to join Aptiv. Mr. Louissaint, who joined Aptiv from IBM, received a new hire award comprised of time-based RSUs, which has a target value of $8,000,000, and vests ratably (33.3% per year) over three years in October 2023, 2024, and 2025. Mr. Lyon, who joined Aptiv from Astra Space, a provider of space products and launch services to the global space industry, following a 20-year career at Apple, received a new hire award comprised of time-based RSUs, which has a target value of $8,000,000, and vests ratably (50% per year) over two years in February 2024 and 2025.
| | | | | | | COMPENSATION DISCUSSION AND ANALYSIS | | 45 |
Ms. Ramundo was also granted a special equity award in addition to her 2023 annual long-term incentive award. The special equity award was granted in February 2023, has a target value of $2,000,000, and vests ratably (50% per year) over two years on each of February 2024 and 2025. This award was granted to recognize Ms. Ramundo’s extraordinary efforts to accelerate the closure of our Wind River transaction and effective management of the regulatory challenges in multiple geographies, which effectively accelerates our path to the fully-electrified software-defined vehicle. 2021-2023 Performance-Based RSUs. The Compensation Committee assessed the performance awards granted in February 2021 for which vesting was based on achievement of three-year cumulative performance through December 31, 2023. In February 2024, we paid out the performance-based RSUs for the 2021-2023 performance period. The following tables set forth: (1) the threshold, target and maximum levels, as well as the performance level achieved during the performance period; and (2) for each NEO, the target number of performance-based RSUs and actual number of performance-based RSUs earned. | | | | | | | | | | | | | | | | | | | | | Performance Metric | | Weight | | | Threshold 40% Payout | | | Target 100% Payout | | | Maximum 200% Payout | | | Achievement (% of Target) | | | | | | | Average Return on Net Assets (RONA)(1),(2) | | | | | | | | | | | Actual: 27.7% | | | | | | | | | 33.3% | | | |  | | | | 113% | | | | | | | | | 20.9% | | | | 26.9% | | | | 31.4% | | | | | | | | | | | | | | | | | Actual: $3,551M | | | | | | Cumulative Net Income (NI)(2) | | | 33.3% | | | |  | | | | 144% | | | | | | | | | $2,514M | | | | $3,232M | | | | $3,771M | | | | | | | | | Actual: 24th | | | | | | | | | | | | | | Relative Total Shareholder Return (TSR)(3) | | | 33.3% | | | |  | | | | 0% | | | | | | | | | 30th | | | | 50th | | | | 90th | | | | | | | | | | | Total Weighted Financial Performance Payout | | | | | | | | | | | | | | | | 86% | |
| (1) | Average RONA is tax-affected adjusted operating income divided by average net working capital plus average net property, plant and equipment for each calendar year, as adjusted for incentive plan calculation purposes. |
| (2) | For purposes of the Adjusted NI calculated results under the Long-Term Incentive Plan, the results shown in Appendix A of our Proxy Statement were adjusted to neutralize the impact of a 2022 reporting change to remove amortization from Adjusted NI and to remove the impact of M&A activity not included in the original target. |
| (3) | Relative TSR is measured by comparing the average closing price per share of the Company’s ordinary shares for the specified trading days in the fourth quarter of the final year of the performance period to the average closing price per share of the Company’s ordinary shares for all availablethe specified trading days in Decemberthe fourth quarter of the year prior to the beginning of the performance period, including the reinvestment of dividends, relative to the companies in the Russell 3000 Auto Parts Index. |
Based on the achievement of the performance goals during the period, the earned award was 86% of the target opportunity. As a result, the Compensation Committee approved the following 2021-2023 performance-based RSU award payouts. | | | | | | | | Performance-Based RSUs | Name(1) | | Target Units Granted (#) | | Actual Units Earned (#) | | | | Kevin P. Clark | | 44,910 | | 38,623 | | | | Joseph R. Massaro | | 16,597 | | 14,273 | | | | William T. Presley | | 10,153 | | 8,733 | | | | Katherine H. Ramundo | | 6,411 | | 5,513 |
| (1) | Adjusted Net Income represents net income attributable toMessrs. Louissaint and Lyon joined Aptiv before restructuringin January 2023, and other special items, including the tax impact thereon.
Cash Flow Before Financing represents cash provided by (used in) operating activities plus cash provided by (used in) investing activities, adjusted for the purchase priceDecember 2022, respectively, and therefore neither was a recipient of business acquisitions and other transactions, net of cash acquired.
Growth over Market represents the year-over-year changea long-term incentive award in net sales, excluding the impact on net sales from currency exchange, commodity movements and divestitures and other transactions, as compared to the year-over-year change in2021.
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| | | | | | 46 | | COMPENSATION DISCUSSION AND ANALYSIS | | |
RECENT NEW HIRE INFORMATION Mr. Louissaint joined Aptiv on January 1, 2023 from IBM and he received the compensation package set forth below: | • | | global vehicle production weighted to the geographic regions in which the Company generates its revenue.
Appendix A contains a reconciliation of these numbers to U.S. GAAP financial measures.
2020 Annual Compensation Determination
Individual base salaries and annual incentive targets for the NEOs are established based on the scope of each NEO’s responsibilities, individual performance, experience and market pay data. At the beginning of each year, we also define key strategic objectives each NEO is expected to achieve during that year, which are then considered by the Compensation Committee when making final compensation determinations.
2020 Base Salaries.Base salary is intended to be commensurate with each NEO’s responsibilities, individual performance and experience. Our practice is to make periodic adjustments to base salary, although we review compensation competitiveness annually. In January 2020, the Compensation Committee approved NEO base salary adjustments of between 2.4% to 7%, dependent on the individual, which were originally to be effective April 1, 2020. Generally, these adjustments were intended to increase the competitiveness of salary and to reflect the Company’s and the individual’s performance. As part of the Company’s response to COVID-19, the CEO took a voluntary 50% reduction in base salary and the remaining NEOs took 10% voluntary reductions in base salary, effective April 1, 2020, and the previously-approved base salary increases were deferred. Subsequently, in response to the success of the Company’s efforts to mitigate the impacts of COVID-19, including putting the safety and welfare of its employees first as it restarted operations safely and effectively as well as ensuring zero customer disruptions, the Company reinstated the approved base salary increases for all affected employees, including NEOs, effective September 1, 2020. The following table summarizes the adjustments:
| | | | | | | | | | | | | | | | | | | | Name | | January 1,
2020 Base
Salary ($) | | | Approved
Increase in
January
2020
(%) | | | Approved
Base Salary-
Deferred to
September 1,
2020 ($) | | | Voluntary Salary
Reduction % Effective April 1,
2020-August 31,
2020 | | Actual 2020
Salary Paid
($) | | | | | | | | | Kevin P. Clark | | $ | 1,428,000 | | | | 2.4 | % | | $ | 1,462,272 | | | 50% | | $ | 1,141,924 | | | | | | | | | Joseph R. Massaro | | | 874,000 | | | | 7.0 | | | | 935,000 | | | 10 | | | 857,917 | | | | | | | | | David Paja | | | 610,738 | | | | 6.4 | | | | 649,666 | | | 10 | | | 618,624 | | | | | | | | | David M. Sherbin | | | 607,000 | | | | 2.4 | | | | 621,500 | | | 10 | | | 586,542 | | | | | | | | | Mariya K. Trickett | | | 520,000 | | | | 5.8 | | | | 550,000 | | | 10 | | | 508,333 | |
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT $750,000 per year;
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| • | | Compensation Discussion and Analysis (continued)
2020Payment of $750,000 for the 2023 Annual Incentive Plan, Awards. Our Annual Incentive Plan is designed to motivate our NEOs to drive earnings, cash flowpayable in 2024; and profitable growth by measuring the NEOs’ performance against our goals at the Corporate and relevant Segment levels.
The Compensation Committee establishes the individual annual incentive target for each NEO at approximately the median of our peer group, but such target can be adjusted based on the NEO’s position, individual performance, and the size and scope of his or her responsibilities. As originally designed, final payouts based on the financial metrics described below can range from 0% to 200% of each NEO’s annual incentive target.
The Compensation Committee, working with management and its independent compensation consultant, sets the performance metrics and objectives for the preliminary annual incentive plan payout levels based on Aptiv’s annual business objectives. For 2020, each NEO’s award payout was originally designed to be determined as follows:
Corporate performance metrics were to be weighted 100% for Messrs. Clark, Massaro and Sherbin and Ms. Trickett. For Mr. Paja, who is a Segment President, Corporate and Segment performance metrics were to be weighted 50% each;
Individual performance was to be considered for adjustments to the final annual incentive payouts, based on individual performance and achievements; and
Individual performance was also to be considered with respect to the Strategic Results Modifiers, as further discussed below.
For 2020, both Corporate and Segment performance objectives were initially based on the following metrics which were aligned with our business strategy:
Net Income (“NI” — Corporate) and Operating Income (“OI” — Segment), which we believe are appropriate measurements of our underlying earnings and a representative indication of our overall financial performance;
Cash Flow Before Financing (“CFBF” — Corporate) and Simplified Operating Cash Flow (“SOCF” — Segment), which are metrics for measuring cash generation; and
Growth over Market (“GOM”), which measures the Company’s sales growth relative to the markets in which it operates.
The Compensation Committee initially selected the following weightings in 2020 for both Corporate and Segment performance metrics:
| | | | | | | | | | Clark, Massaro,
Sherbin and Trickett | | Paja | Weighting (%) Performance Metrics | | 100%
Corporate | | 50%
Segment | | 50%
Corporate | | | | | NI (Corporate) or OI (Segment)(1) | | 50% | | 50% | | 50% | | | | | CFBF (Corporate) and SOCF (Segment)(2) | | 40 | | 40 | | 40 | | | | | GOM | | 10 | | 10 | | 10 | | In addition, discretionary adjustments could be applied based on qualitative factors and considerations(3) |
(1) | Net Income represents net income attributable to Aptiv before restructuring and other special items, including the tax impact thereon.
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(2) | CFBF is cash flow before financing, which is defined as cash provided by (used in) operating activities plus cash provided by (used in) investing activities, adjusted for the purchase price of business acquisitions and other transactions, net of cash acquired. SOCF is defined, on a Segment basis, as earnings before interest, tax, depreciation and amortization (“EBITDA”), plus or minus changes in accounts receivable, inventory and accounts payable, less capital expenditures net of proceeds from asset dispositions, plus restructuring expense, less cash expenditures for restructuring.
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(3) | May be applied, based on any of the Strategic Results Modifier factors (further described below), CEO discretion with Compensation Committee approval (approved by the full Board of Directors for the CEO), and/or consideration of individual performance goals/criteria established at the beginning of the year.
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The NI / OI and CFBF / SOCF goals and the award payout levels related to the achievement of those goals were to be measured on a performance scale set by the Compensation Committee. Performance below the minimum threshold for a metric would result in no payout for that metric, and performance above the maximum level for a metric would be capped at a maximum total payout of 200% of the target with respect to that metric. For the NI / OI and CFBF / SOCF metrics the threshold, target and maximum payout levels were originally established at 50%, 100% and 200%, respectively. GOM was designed to be treated differently than the NI / OI and CFBF /SOCF metrics. If the GOM targets were achieved, the target payout for that metric was to be paid. If the GOM targets were not achieved, no amount was to be paid for the GOM portion of the award.
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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| • | | Compensation Discussion and Analysis (continued)2023 long-term incentive award valued at $3,000,000, granted in February 2023.
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Mr. Louissaint also received a cash award of $2,000,000, which was paid in the first quarter of 2023, and a special RSU award granted in 2023 with a target value of $8,000,000 which vests ratably in October 2023, 2024 and 2025 (as described above). These special cash and equity awards were made to keep Mr. Louissaint whole in respect of cash and equity compensation that he otherwise forfeited at IBM. As disclosed in Aptiv’s 2023 Proxy Statement, Mr. Lyon joined Aptiv in December 2022 from Astra Space, and accordingly his new hire equity award was granted in 2023, as detailed in the “2023 Long-Term Incentive Compensation” section above. This award was made to keep Mr. Lyon whole with respect to cash and equity compensation he otherwise forfeited at Astra Space. OTHER COMPENSATION Additional compensation and benefit programs available to our NEOs are described below. Aptiv Salaried 401(k) Plan. Along with other eligible U.S. Aptiv salaried employees, our NEOs participate in our broad-based and tax-qualified defined contribution plan, the Aptiv Salaried 401(k) Plan, which is a qualified plan under Section 401(k) of the Internal Revenue Code (the “Code”). All contributions are subject to any contribution limits imposed by the Code. Aptiv Deferred Compensation Plan (“DCP”). Under the DCP, eligible U.S. employees, including our NEOs, receive Aptiv contributions in excess of the limits imposed upon the Aptiv Salaried 401(k) Plan by the Code. No guaranteed or above-market rates are earned; the investment options available are a subset of those available to all employees under the Aptiv Salaried 401(k) Plan. Additional details regarding benefits and payouts under this plan are provided in the “Non-Qualified Deferred Compensation” section. Severance Plans. In 2017, we adopted the Aptiv PLC Executive Severance Plan (the “Severance Plan”) and the Aptiv PLC Executive Change in Control Severance Plan (the “Change in Control Plan”). The plans were adopted to provide severance protections to certain executives who are designated by the Compensation Committee as eligible to participate in each plan, including our NEOs. For the participating NEOs, the Severance Plan generally provides for severance benefits in the event of a “qualifying separation” (as defined in the Severance Plan to include a termination without “cause” or a resignation for “good reason”) of the NEO’s employment. Pursuant to the Severance Plan, an NEO who incurs a qualifying separation would be entitled to receive severance payments equal in the aggregate to a multiple of annual base salary (1.5 times for officers with at least two years of service, and 1 time for all other officers), unless and until the NEO is employed by another employer. The Severance Plan also provides a COBRA subsidy for a period of up to 18 months following a qualifying separation. The Change in Control Plan generally provides for “double-trigger” severance benefits in connection with a “qualifying separation” (as defined in the Change in Control Plan to include a termination without “cause” or a resignation for “good reason”) that occurs in connection with or within two years after a Change in Control (as defined in the Change in Control Plan). Pursuant to the Change in Control Plan, an NEO who incurs a qualifying separation would generally be entitled to receive a lump sum cash payment in an amount equal to the sum of (1) three times base salary in the case of the CEO and two times base salary in the case of an NEO other than the CEO, and (2) in the case of the CEO, three times the higher of the CEO’s target annual cash incentive award
The original 2020 performance goals by metric were:
| | | | | | | COMPENSATION DISCUSSION AND ANALYSIS | | 47 |
opportunity for the year in which the separation occurs or in effect immediately prior to the Change in Control (or in the case of an NEO other than the CEO, two times the higher of the NEO’s target annual cash incentive award opportunity for the year in which the separation occurs or in effect immediately prior to the Change in Control). In addition, an NEO who incurs a qualifying separation is also entitled to receive a lump sum payment representing the sum of 36 monthly COBRA premiums for the CEO and 24 monthly COBRA premiums for NEOs other than the CEO. Benefits under the Severance Plan and the Change in Control Plan are generally subject to execution by the NEO of a general waiver and release of claims in favor of Aptiv. Other Benefits. We provide additional benefits, such as relocation and expatriate benefits to our NEOs, when applicable, and in general, these benefits are the same as those provided to similarly situated non-officer employees. Additional details are covered in the “2023 Summary Compensation Table”. COMPENSATION GOVERNANCE PRACTICES Stock Ownership Guidelines. To support alignment of our executives’ interests with those of our shareholders, Aptiv’s Board believes that our officers should maintain an appropriate level of equity interest in Aptiv. To that end, our Board has adopted the following stock ownership guidelines: | | | | | | | | | | | | | | Category | | NI / OI
($ in millions) | | | CFBF / SOCF
($ in millions) | | | GOM | | | | | | Corporate Metrics: | | $ | 1,251 | | | $ | 955 | | | | 5 | % | | | | | Segment Metrics: | | | | | | | | | | | | | | | | | Advanced Safety and User Experience (Paja) | | | 450 | | | | 263 | | | | 6 | |
| | | | | Strategic Results Modifier. As partRole
| | Guideline | | CEO | | | 6x base salary | | Other Section 16 officers, including all of our focus on strategic priorities, the Strategic Results Modifier (“SRM”) is approved by the Compensation Committee at the beginning of each year as part of the Annual Incentive Plan design. The SRM can range, in the aggregate, from plus or minus 10% of the total Annual Incentive Plan target opportunity. The SRM allows the Compensation Committee to consider progress on or achievement of strategic priorities in addition to the financial metrics under the Annual Incentive Plan. The SRM is determined based on a qualitative performance assessment and recommendation by the CEO as to each other NEO’s achievement of SRM objectives, with final approval by the Compensation Committee. For 2020, the focus areas of the SRM were:NEOs | | | 3x base salary | | Elected Corporate staff officers | | | 1x base salary | |
Our officers, including the NEOs, are expected to fulfill the ownership requirement within five years from the time they are appointed to their respective positions. Until such time as the required holding is met, officers may not sell stock, subject to limited exceptions. Once the ownership requirement has been met, an officer may sell stock, provided, however, that the minimum ownership requirement must continue to be met. The Compensation Committee reviews the ownership level for covered executives each year. As of the 2023 measurement of ownership, all of our NEOs were at or above the applicable ownership requirement or on track to meet the applicable ownership requirement within five years of their respective appointments. Clawback. During 2023, we adopted a new Compensation Clawback Policy that complies with new rules promulgated by the NYSE and the SEC (the “Clawback Policy”). The Clawback Policy generally applies to current and former executive officers, and it provides for the recovery of certain incentive-based compensation received during a three-year recovery period if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the securities laws. The incentive-based compensation recoverable under the Clawback Policy generally includes the amount of incentive-based compensation received (on or after October 2, 2023) that exceeds the amount that would have been received had it been determined based on the restated amounts (without regard to any taxes paid). The Clawback Policy does not condition clawback on the fault of the executive officer, but the required clawback under the Clawback Policy is subject to certain limited exceptions in accordance with the SEC and NYSE rules. We also continue to maintain our prior clawback policy (the “Supplemental Policy”) as a supplement to the Clawback Policy. The Supplemental Policy gives the Compensation Committee discretion to provide for forfeiture of awards or repayment of prior amounts if our financial statements are materially misstated or in material noncompliance with any financial reporting requirement under securities laws. Under the Supplemental Policy, if the misstatement is due to fraud, then the participants responsible for the fraud will forfeit their rights to future awards and must repay any amounts they received from prior awards due to the fraudulent behavior.
| | | | | | 48 | | COMPENSATION DISCUSSION AND ANALYSIS | | | | | | Focus Areas | | Corporate
Participants | | Segment
Participants | | | | |
Restrictive Covenants. All executives, including the NEOs, are required to sign confidentiality and non-interference agreements in order to participate in the Long-Term Incentive Plan. The non-interference agreements include non-compete and non-solicitation covenants, which generally prohibit executives from: Talent, culture and diversity outcomes
Outcomes of the SRM are discussed in the following section.
COVID-19 Related Adjustments to 2020 Annual Incentive Plan.In light of the global COVID-19 pandemic and the resulting impact on the Company’s industry and operations, in July 2020 the Compensation Committee revised certain components of the annual incentive plan to maintain focus on Aptiv’s performance through the remainder of the year (the “Updated Incentive Plan”). The Updated Incentive Plan revised the underlying metrics and reduced the annual incentive plan target opportunity. This plan, which moved from separate corporate- and segment-based metrics to one set of enterprise-wide goals, reflects Aptiv’s revised business objectives and corporate values in response to the COVID-19 pandemic.
The Compensation Committee approved the following adjustments as part of the Updated Incentive Plan:
Set rigorous yet achievable performance goals in light of COVID-19 pandemic;
Require funding of program to compensate salaried workforce first prior to any payout to executives under the Updated Incentive Plan;
Establish Adjusted EBITDA and CFBF as the sole financial performance metrics, each equally weighted; and
Reduce target opportunity to 50% of the participant’s original Annual Incentive Plan target (down from 100%), and reduce maximum opportunity to 65% of the participant’s original Annual Incentive Plan target (down from 200%).
As a prerequisite to funding payments under the Updated Incentive Plan, the Compensation Committee approved a program to provide financial recognition awards to salaried employees that were required to take unpaid time-off and participate in other cost reduction measures in early 2020, specifically excluding NEOs and other officers. This pre-requisite represented a non-financial performance goal for the Updated Incentive Plan.
The Updated Incentive Plan annual performance goals by metric for 2020 were:
| | | | | | | | | | Performance Threshold | | Adjusted EBITDA ($ in millions) | | | CFBF ($ in millions) | | | | | | Threshold | | $ | 1,066 | | | $ | 36 | | | | | | Target | | | 1,184 | | | | 155 | | | | | | Maximum | | | 1,303 | | | | 273 | |
The original Annual Incentive Plan target goals were established to reflect our focus on growth over prior year actual outcomes and above market growth in the performance period. The Updated Incentive Plan target goals were established to reflect the Company’s financial performance in light of the global industry impacts that resulted from the COVID-19 pandemic.
Actual performance on both the Adjusted EBITDA goal and CFBF goal exceeded the maximum. Following a strong recovery in the second half of the year, and as reflected in the Company’s 2020 TSR, the Company achieved strong Adjusted EBITDA and CFBF results, leading to a maximum payout on both metrics. Due to the limits put in place in the Updated Incentive Plan, 2020 overall performance produced a calculated payout of 65% of the original award opportunity.
The SRM continued in effect for the Updated Incentive Plan. The Compensation Committee believed that in light of the events of 2020, a continued focus on talent, culture and diversity outcomes, as well as product quality, remained critically important for the success of our business. The Compen-
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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Compensation Discussion and Analysis (continued)
sation Committee’s final determination was that, although the NEOs performed very strongly individually and as a group on the SRM metrics, in light of the impacts of the COVID-19 pandemic, they would not use the SRM to modify payouts under the Updated Incentive Plan.
In determining the final individual payouts, the Compensation Committee, in consultation with the CEO (except related to his own performance and payout), evaluated each eligible NEO’s qualitative performance in relation to the Company’s performance. Each NEO was also evaluated based on his or her individual achievements. In the evaluation, the Compensation Committee recognized the exceptional performance of our NEOs throughout this unprecedented year. The Compensation Committee elected not to make any SRM-related adjustments to payouts. For NEOs other than Mr. Paja, the Compensation Committee did not exercise discretion, and the financial performance under the Updated Incentive Plan determined final payouts. The Committee exercised downward discretion, from 65% of target to 55% of target, for Mr. Paja in relation to certain operational challenges of the Company’s Advanced Safety & User Experience segment. As a result of the considerations described above, the Compensation Committee approved the following 2020 annual incentive award payments for the NEOs:
| | | | | | | | | | | | | | Name | | Annual
Incentive Target
Award ($) | | | Annual
Incentive Plan Actual
Payment for
2020 ($)(1) | | | Percent of
Target Incentive (%) | | | | | | | Kevin P. Clark | | $ | 2,193,408 | | | $ | 1,425,715 | | | | 65 | % | | | | | | Joseph R. Massaro | | | 935,000 | | | | 607,750 | | | | 65 | | | | | | | David Paja | | | 552,216 | | | | 303,940 | | | | 55 | | | | | | | David M. Sherbin | | | 559,350 | | | | 363,578 | | | | 65 | | | | | | | Mariya K. Trickett | | | 467,500 | | | | 303,875 | | | | 65 | |
(1) | These award amounts are reported in the “Non-Equity Incentive Plan Compensation” column of the “2020 Summary Compensation Table”.
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2020 Long-Term Compensation
Performance Metrics. Aptiv’s Long-Term Incentive Plan is designed to reward performance on long-term strategic metrics and to attract, retain and motivate participants. Aptiv’s incentive plans are aggressively performance-based, with 75% of the NEOs’ award consisting of performance-based RSUs, which deliver value if financial and relative TSR goals are met. The targets are aligned with Aptiv’s pay-for-performance culture, which align executive and investor interests. The remaining 25% are time-based RSUs and fluctuate with Aptiv’s share price.
The performance-based RSUs are settled after the results of a three-year performance period are determined. The time-based RSUs generally vest ratably over three years, beginning on the first anniversary of the grant date. The 2020
performance-based RSU grant vests at the end of 2022 and will be settled in early 2023 after the outcomes of the performance period are determined and approved. Under the original design of the performance-based RSU awards, each NEO could receive from 0% to 200% of his or her target performance-based RSU award, as determined by Aptiv’s performance against certain company-wide performance metrics. The metrics used in the 2020 performance-based RSU awards are similar to those used in recent years, however the weighting has been adjusted in an effort to increase alignment with shareholder interests. Specifically, the metrics are evenly weighted in the 2020 awards, whereas in previous years the Average RONA metric had been weighted at 50%. The metrics and weights used in the 2020 awards are:
| | | | | | Metric | | Weighting (%) | Average Return on Net Assets (RONA)(1)
| | | | 33.3
| %
| Cumulative Net Income (NI)(2)
| | | | 33.3
| | Relative Total Shareholder Return (TSR)(3)
| | | | 33.3
| |
(1) | Average RONA is tax-affected operating income divided by average net working capital plus average net property, plant and equipment for each calendar year, as adjusted for incentive plan calculation purposes.
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(2) | Cumulative Net Income represents net income attributable to Aptiv before restructuring and other special items, including the tax impact thereon.
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(3) | Relative TSR is measured by comparing the average closing price per share of the Company’s ordinary shares for all available trading days in December of 2022 to the average closing price per share of the Company’s ordinary shares for all available trading days in December of 2019, including the reinvestment of dividends, relative to the companies in the Russell 3000 Auto Parts Index.
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The Long-Term Incentive Plan allows for dividend equivalents to accrue on unvested RSUs; however, the dividend equivalents vest and pay out only if and to the extent that the underlying RSUs vest and pay out. As part of the Company’s response to COVID-19, dividends were suspended in March 2020; therefore, no dividend equivalents accrued after that date.
2020 Grants. The Compensation Committee established the following 2020 target long-term incentive awards for our NEOs (consisting of time-based RSUs and performance-based RSUs, as described above), in early 2020 prior to the adverse impacts of the COVID-19 pandemic, including production shutdowns in China, North America and Europe throughout the first half of 2020. These awards take into account scope of responsibilities, individual performance, retention considerations and market compensation data:
| | | | | | Name | | Long-Term
Incentive Plan
Target Annual
Award ($) | | | Kevin P. Clark | | $ | 11,000,000 | | | Joseph R. Massaro | | | 3,700,000 | | | David Paja | | | 2,200,000 | | | David M. Sherbin | | | 1,550,000 | | | Mariya K. Trickett | | | 1,500,000 | |
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Compensation Discussion and Analysis (continued)
Adjustments to Performance-Based RSUs Granted in 2019 and 2020 Due to COVID-19 Impacts. In February 2019 and February 2020, the Compensation Committee granted long-term incentive awards to NEOs based on the Company’s business plans at each respective grant date.
Subsequent to the February 2020 grant, the COVID-19 pandemic severely impacted the global economy, our industry, and the Company’s financial results. As described in the “Executive Summary” section above, in response to these impacts and in consideration of the Company’s decisive and successful response to COVID-19, in December 2020, the Compensation Committee approved adjustments to the RONA and NI performance targets that were previously established for the performance awards granted in 2019 and 2020. These adjustments were made in order to take into consideration the impacts of the COVID-19 pandemic on the Company’s industry and operating environment, which impacts were deemed to be outside the control and influence of the management team.
In determining that such action was appropriate with respect to the Company’s outstanding long-term incentive award cycles, the Compensation Committee considered the following:
Aptiv is committed to pay for performance, as reflected by the challenging year over year goals we set for ourselves;
Aptiv’s long-term incentive program design for these awards is strongly weighted towards performance (with a 75% performance-based / 25% time-based mix, as compared to market practice where a 50% / 50% mix is typical);
Our long-term incentive programs measure 3-year cumulative performance — as a result, the unforeseen and unprecedented COVID-19 impact on our business resulted in unachievable financial goals under all three active long-term incentive cycles;
Over the past several years, Aptiv hired significant talent outside of the automotive industry to support our strategy to become a leading industrial technology company;
The negative effect of significant reductions in long-term incentive opportunities for the next three years creates a significant pay competitiveness issue, which is not reflective of Aptiv’s relative performance;
Company performance (operational and TSR) was strong as compared to the Company’s industry — 2018-2020 TSR performance of 49.6% was at the 89th percentile of our TSR peer group; and
Despite significant near-term disruption in industry volumes, the Company delivered on its consistent high-single
| digit growth over market target, resulting in three-year average growth over market of approximately 10%.
|
The Compensation Committee believes Aptiv’s long-term incentive programs are well designed with a strong emphasis on performance, and as such the Compensation Committee determined that an adjustment for the impact of COVID-19 to the 2019-2021 and 2020-2022 targets to reflect new market realities was appropriate and permitted by the terms of Aptiv’s Long-Term Incentive Plan. The Compensation Committee believes this change further serves to motivate, retain and incentivize our dedicated leaders whose collective efforts in 2020 positioned Aptiv to not only weather the storm, but emerge as a stronger company.
The Compensation Committee closely monitored the impact of COVID-19 throughout the year on the Company’s three outstanding long-term incentive award cycles. The Committee evaluated several alternatives and decided to exercise discretion under the Long-Term Incentive Plan on each of the three in-progress awards, as further described below. This determination was based on the Committee’s assessment that Aptiv’s incentive programs are well-aligned to our strategic and financial objectives, shareholder interests, and that the financial goals under these award cycles became unachievable due to the impacts of COVID-19. The adjustments made by the Compensation Committee were made based on the original intent at the time these awards were granted, while taking into consideration the unprecedented challenges and impacts of COVID-19.
Changes to the 2019 and 2020 performance-based RSU awards consist of:
Reducing maximum payout opportunity—Lowering the maximum upside for these awards to 150% from 200%;
• | | Requiring “at or above market for above target”—Capping the 2019 and 2020 LTI payout at target unless Aptiv’s relative TSR is at or above the 50th percentile of the TSR peer group; and |
Adjusting goals on the financial metrics only—The financial targets were adjusted in consideration of the global impact of COVID-19 on the overall market, our industry, and Aptiv. The 2020, 2021, and 2022 financial goals have been adjusted to reflect new market conditions while remaining rigorous and challenging. The payout percentages and the range of performance versus target have not been changed. Also, the above added restrictions serve to mitigate the potential for windfall opportunities within the program.
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Compensation Discussion and Analysis (continued)
Adjustments and Payouts from Long-Term Compensation Granted in 2018
2018-2020 Performance-Based RSUs. The Compensation Committee also carefully assessed the performance awards granted in February 2018 for which vesting was originally based on achievement of 3-year cumulative financial results through December 31, 2020. Due to the same reasons described above related to the emergence of the COVID-19 pandemic and resultant impacts on the Company’s industry and operations in 2020, the Compensation Committee also made adjustments to the 2018 performance awards. In December 2020, the Compensation Committee determined that it was reasonable and appropriate to truncate the performance period for the 2018-2020 performance cycle to measure achievement of the financial results based on actual and estimated financial performance as of December 31,
2019. The goals for the truncated period for each of the Average Return on Net Assets (RONA) and Cumulative Net Income (NI) metrics were unchanged from those established at the time of the original grant. The relative TSR metric goals and performance period were also unchanged from the original grant.
In February 2021, we paid out the performance-based RSUs for the performance period. The following tables set forth: (1) the threshold, target and maximum levels, as well as the performance level achieved during the adjusted performance period; and (2) for each NEO, the target total number of performance-based RSUs and actual number of performance-based RSUs earned. Based on the achievement of the performance goals during the truncated period the earned award was 106% of the target opportunity.
| | | | | | | | | | | | | | | | | | | | | | | | | | Metric | | Weighting (%) | | Threshold | | Target | | Maximum | | Achievement | Average Return on Net Assets (RONA)(1)(2) | | | | 50 | % | | | | 27.9 | % | | | | 31.2 | % | | | | 34.5 | % | | | | 30.1 | % | Cumulative NI(2) | | | | 25 | | | | $ | 3,826 | | | | $ | 4,276 | | | | $ | 4,726 | | | | $ | 3,911 | | Relative Total Shareholder Return (TSR) | | | | 25 | | | | | 30th%ile | | | | | 50th%ile | | | | | 90th%ile | | | | | 89th%ile | |
(1) | Average RONA is tax-affected adjusted operating income divided by average net working capital plus average net property, plant and equipment for each calendar year, as adjusted for incentive plan calculation purposes.
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(2) | Achievement reflects actual performance achieved through December 31, 2019 as well as estimated performance for 2020 as of December 31, 2019.
|
Further, the Compensation Committee is permitted under the Company’s Long-Term Incentive Plan to make discretionary adjustments to payouts as the Compensation Committee deems appropriate. For the 2018-2020
performance period, the Compensation Committee considered the following factors when determining if and how discretion should be exercised:
| | | Positive Factors | | Adverse Factors | Peer-leading 2018-2020 TSR performance of 49.6%, placing Aptiv at the 89th percentile of our TSR peer group
| | Financial performance fell short of original goals for 2018-2020 performance period
| Strong executive team leadership and performance
| | Stakeholder impacts of cost reduction and cash conservation actions
| Stakeholder care during COVID-19 pandemic
| | The impact of furloughs on employees
| Commitment to Diversity, Talent and Culture, and Quality
| | |
Despite strong Company and leadership team performance and achieving a cumulative three-year TSR of 49.6% across the three-year cycle, the Compensation Committee decided to exercise additional negative discretion to reduce the payout
earned on the 2018-2020 long-term incentive awards to 95% of target.
As a result, the Compensation Committee approved the following 2018-2020 performance-based RSU award payouts.
| | | | | | | | | | | | | | Performance-based RSUs | | Name(1) | | Target Total Number of
Units Granted (#) | | Actual Total Number of Units Earned (#)(1)(2) | Kevin P. Clark | | | | 82,590 | | | | | 78,461 | | Joseph R. Massaro | | | | 20,648 | | | | | 19,616 | | David Paja | | | | 12,389 | | | | | 11,770 | | David M. Sherbin | | | | 11,976 | | | | | 11,378 | | Mariya K. Trickett | | | | 11,257 | | | | | 10,694 | |
(1) | Includes accrued dividend equivalents. Dividends were suspended in March 2020 and no further dividend equivalents were accrued thereafter.
|
(2) | Absent the adjustments approved by the Compensation Committee, the total number of units earned would have been 49% of the target total number of units granted.
|
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Compensation Discussion and Analysis (continued)
Supplemental Compensation Information and Reconciliation
Required Disclosure regarding Accounting Impacts Significantly Inflates the Value of Stock Awards. As discussed above, in December 2020, the Compensation Committee approved adjustments to the RONA and NI performance targets that were previously established for the 2019-2021 and 2020-2022 long-term incentive awards. Although no additional incremental awards were granted as a result of these adjustments, in accordance with disclosure rules, the full modification date incremental value of the December 2020 adjustments is required to be disclosed and added in the 2020 Summary Compensation Table. This is in addition to disclosure of the full grant date fair value of the long-term incentive award granted in February 2020 as part of our typical annual compensation practice. In a typical year, only the grant date fair value of the 2020-2022 long-term incentive award would be reported in the 2020 Summary Compensation
Table. The impact of required disclosure of the modification date incremental value results in the presentation of an increase in year-over-year reported compensation for our executives. However, as stated above, no additional incremental awards were granted in 2020, and the modification date incremental value of the awards reflects only an approximation of the originally granted value for each of the respective grant years.
The following supplemental table demonstrates the value of stock awards, using the modification date fair value for the December 2020 adjustments made to the stock grants in 2020 and 2019, for our CEO. Absent the value of the modification on the stock awards, the value of the stock awards granted to Mr. Clark would have been $10,695,886, resulting in total compensation reported in the Summary Compensation Table of $13,460,707. With the modifications, the reported value of the stock awards was $28,502,508, resulting in reported total compensation of $31,267,329.
STOCK AWARD ACCOUNTING RECONCILIATION
| | | | | | | | | | | | | | | | | | | | Original Grant Date
Fair Value of 2020
Grant(1) | | | Accounting Impact of
December
Modification to
Original 2020 Grant
($130.79/share on
12/30)(2) | | | Accounting Impact of
December Modification
to Original 2019 Grant
($130.79/share on
12/30)(3) | | | Total “Stock Awards”
Reported in 2020
Summary
Compensation Table(4) | | | Kevin P. Clark | | $ | 10,695,886 | | | $ | 8,336,380 | | | $ | 9,470,242 | | | $ | 28,502,508 | |
(1) | Represents the grant date fair value of the February 2020 long-term incentive award that had a target value of $11 million.
|
(2) | Represents the incremental accounting impact on the 2020 long-term incentive award of the adjustments approved by the Compensation Committee in December 2020.
|
(3) | Represents the incremental accounting impact on the 2019 long-term incentive award of the adjustments approved by the Compensation Committee in December 2020.
|
(4) | Represents the total accounting impact of the 2020 grant, the 2020 grant adjustment and the 2019 grant adjustment. No additional awards were granted to Mr. Clark in 2020.
|
Other Compensation
Additional compensation and benefit programs available to our NEOs are described below. Only those benefits and policies offered to the other salaried employee populations are available to our NEOs.
Salaried Retirement Savings Program (“SRSP”). Along with other eligible U.S. Aptiv salaried employees and executives, our eligible NEOs participate in our broad-based and tax-qualified defined contribution plan, the SRSP, which is a qualified plan under Section 401(k) of the Internal Revenue Code (the “Code”). All contributions are subject to any contribution limits imposed by the Code. All Company contributions to the SRSP were suspended as of April 1, 2020 in response to COVID-19 and were restarted on January 1, 2021.
Salaried Retirement Equalization Savings Program (“SRESP”). Under the SRESP, eligible U.S. employees receive Aptiv contributions in excess of the limits imposed upon the SRSP by the Code. No guaranteed or above-market
rates are earned; the investment options available are a subset of those available to all employees under the SRSP. Additional details regarding benefits and payouts under this plan are provided in the “Non-Qualified Deferred Compensation” section. All Company contributions to the SRESP were suspended as of April 1, 2020 in response to COVID-19 and were restarted on January 1, 2021.
Supplemental Executive Retirement Program (“SERP”). The SERP was frozen (for purposes of credited service and compensation calculations) in 2008, as described further under the “Pension Benefits” section. Only Mr. Sherbin is eligible for the SERP.
Severance Plans. In 2017, we adopted the Aptiv PLC Executive Severance Plan (the “Severance Plan”) and the Aptiv PLC Executive Change in Control Severance Plan (the “Change in Control Plan”). The plans were adopted to provide severance protections to certain executives who are designated by the Compensation Committee as eligible to participate in each plan, including certain of the NEOs.
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Compensation Discussion and Analysis (continued)
For the eligible NEOs, the Severance Plan generally provides for severance benefits in the event of a “qualifying separation” (as defined in the Severance Plan to include a termination without “cause” or a resignation for “good reason”) of the NEO’s employment. Pursuant to the Severance Plan, an NEO who incurs a qualifying separation would be entitled to receive generally severance payments equal in the aggregate to a multiple of annual base salary (1.5X for officers with at least two years of service, and 1X for all other officers), unless and until the NEO is employed by another employer. The Severance Plan also provides a COBRA subsidy for a period of up to 18 months following a qualifying separation.
The Change in Control Plan generally provides for severance benefits in connection with a “qualifying separation” (as defined in the Change in Control Plan to include a termination without “cause” or a resignation for “good reason”) that occurs in connection with or within two years after a Change in Control (as defined in the Change in Control Plan). Pursuant to the Change in Control Plan, an NEO who incurs a qualifying separation would be entitled to receive generally a lump sum cash payment in an amount equal to the sum of (1) three times base salary in the case of the CEO and two times base salary in the case of an NEO other than the CEO, and (2) in the case of the CEO, three times the higher of the CEO’s target annual cash incentive award opportunity for the year in which the separation occurs or in effect immediately prior to the Change in Control (or in the case of an NEO other than the CEO, two times the higher of the NEO’s target annual cash incentive award opportunity for the year in which the separation occurs or in effect immediately prior to the Change in Control). In addition, an NEO who incurs a qualifying separation is also entitled to receive a lump sum payment representing the sum of 36 monthly COBRA premiums for the CEO and 24 monthly COBRA premiums for NEOs other than the CEO.
Benefits under the Severance Plan and the Change in Control Plan are generally subject to execution by the NEO of a general waiver and release of claims in favor of Aptiv.
Other Benefits. We provide additional benefits, such as relocation and expatriate benefits to our NEOs, when applicable, and in general, these benefits are the same as those provided to similarly situated non-officer employees. The primary expatriate benefits include housing allowance, transportation allowance and tax equalization in home and host country. Additional details are covered in the “2020 Summary Compensation Table”.
Compensation Governance Practices
Stock Ownership Guidelines. To support better alignment of our executives’ interests with those of our shareholders, Aptiv’s Board believes that our officers should maintain an appropriate level of equity interest in Aptiv. To that end, our Board has adopted the following stock ownership guidelines:
| | | | | Role | | Guideline | | CEO
| | | 6x base salary
| | Most senior elected officers (generally, our other Section 16 officers, including all of our NEOs)
| | | 3x base salary
| | Elected Corporate staff officers
| | | 1x base salary
| |
Our officers, including the NEOs, are expected to fulfill the ownership requirement within five years from the time they are appointed to their position. Until such time as the required holding is met, officers may not sell stock, subject to limited exceptions. Once the ownership requirement has been met, an officer may sell stock, provided, however, that the minimum ownership requirement must continue to be met. The Compensation Committee reviews the ownership level for covered executives each year. As of the 2020 measurement of ownership, all of our NEOs were at or above the applicable ownership requirement or on track to meet the applicable ownership requirement within five years of their start date.
Clawback. As a matter of policy, if our financial statements are materially misstated or in material noncompliance with any financial reporting requirement under securities laws, then the Compensation Committee will review the circumstances and determine if any participants should forfeit certain future awards or repay prior payouts. If the misstatement is due to fraud, then the participants responsible for the fraud will forfeit their rights to future awards and must repay any amounts they received from prior awards due to the fraudulent behavior. The Compensation Committee expects to update our clawback policy, as appropriate, to comply with the requirements for clawbacks under the final provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as implemented by the Securities and Exchange Commission and the New York Stock Exchange.
Restrictive Covenants. All executives, including the NEOs, are required to sign confidentiality and non-interference agreements in order to participate in the Long-Term Incentive Plan. The non-interference agreements include non-compete and non-solicitation covenants, which generally prohibit executives from:
Working for a competitor or otherwise directly or indirectly engaging in competition with us for 12 months after leaving Aptiv;
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| • | | Compensation Discussion and Analysis (continued)
Soliciting or hiring employees for 24 months after leaving Aptiv; and |
| • | | Soliciting customers for 24 months after leaving Aptiv. If the terms of the confidentiality and non-interference agreements are violated, Aptiv has the right to cancel or rescind any final Long-Term Incentive Plan award, consistent with applicable law.
No Excise Tax Gross-Ups. We do not provide any excise tax gross-ups specific to our officer population. Certain expatriate policy and relocation provisions, applicable to all salaried employees, allow for tax gross-ups as reimbursement for additional taxes or expenses incurred due to expatriate status or relocation expenses.
No Hedging/No Pledging. The Company’s Insider Trading Policy prohibits its directors and employees from entering into transactions that “hedge” the value of Aptiv stock and from pledging Aptiv securities as collateral for a loan. The Company interprets this prohibition on hedging to extend to engaging in short-term or speculative transactions and from engaging in short sales or the use of prepaid variable forward contracts, equity swaps, collars and exchange funds. In addition, the Company’s Insider Trading Policy prohibits its directors and employees from trading in options (such as put and call options) on Aptiv stock and purchasing Aptiv securities on margin or holding Aptiv securities in a margin account. Further, directors and employees are encouraged to avoid frequent trading or speculating in Aptiv stock. The Company’s Insider Trading Policy is available on aptiv.com by clicking on the tab “Investors” and then the caption “Governance Documents” under the heading “Governance.”
Independent Compensation Consultant. The Compensation Committee retained Compensation Advisory Partners LLC (“CAP”) as its independent compensation consultant from 2012-mid 2020. In 2020, the Compensation Committee decided to review the executive compensation consultant services arrangement. After a competitive assessment and selection process, the Compensation Committee retained Semler Brossy Consulting Group (“Semler Brossy”) as its independent compensation consultant going forward. The scope of the work done by both CAP and Semler Brossy during 2020 for the Compensation Committee included the following:
|
If the terms of the confidentiality and non-interference agreements are violated, Aptiv has the right to cancel or rescind any unvested Long-Term Incentive Plan award, consistent with applicable law. No Excise Tax Gross-Ups. We do not provide any excise tax gross-ups specific to our officer population, including our NEOs. Certain expatriate policy and relocation provisions, applicable to all salaried employees, allow for tax gross-ups as reimbursement for additional taxes or expenses incurred due to expatriate status or relocation expenses. No Hedging/No Pledging. The Company’s Insider Trading Policy prohibits directors and employees from entering into transactions that “hedge” the value of Aptiv stock and from pledging Aptiv securities as collateral for a loan, which includes engaging in short-term or speculative transactions and from engaging in short sales or the use of prepaid variable forward contracts, equity swaps, collars and exchange funds. In addition, the Company’s Insider Trading Policy prohibits directors and employees from trading in options (such as put and call options) on Aptiv stock and purchasing Aptiv securities on margin or holding Aptiv securities in a margin account. Further, directors and employees are encouraged to avoid frequent trading or speculating in Aptiv stock. The Company’s Insider Trading Policy is available on aptiv.com by clicking on the tab “Investors” and then the caption “Governance Documents” under the heading “Governance.” Independent Compensation Consultant. The Compensation Committee retained Semler Brossy as its independent compensation consultant until November 2023. The scope of the work done by Semler Brossy during 2023 for the Compensation Committee included the following: | • | | Providing analyses and recommendations that inform the Compensation Committee’s decisions; |
| • | | Preparing and evaluating market pay data and competitive position benchmarking;analysis; |
| • | | Assisting in the design and development of Aptiv’s executive compensation programs; |
| • | | Providing updates on market compensation trends and the | | regulatory environment as they relate to executive compensation; |
| • | | Reviewing various management proposals presented to the Compensation Committee related to executive compensation; and |
| • | | Working with the Compensation Committee to validate and strengthen the pay-for-performance relationship and alignment with shareholders. The Compensation Committee has assessed the independence of Semler Brossy (and, prior to Semler Brossy’s engagement, CAP) pursuant to SEC and NYSE rules and concluded that no conflict of interest exists that would prevent Semler Brossy or CAP from independently representing the Compensation Committee. Semler Brossy does not perform (and CAP did not perform) other services for the Company, and Semler Brossy will not do so without the prior consent of the Chair of the Compensation Committee. Semler Brossy meets (and CAP met) with the Compensation Committee Chair and the Compensation Committee outside the presence of management. In addition, Semler Brossy participates (and CAP previously participated) in all of the Compensation Committee’s meetings and, when requested by the Compensation Committee Chair, in the preparatory meetings and the executive sessions.
Compensation Risk Assessment. The Aptiv Executive Compensation team, with input from global HR team members, conducted a risk assessment of our compensation programs in January 2021 and concluded that our compensation policies, practices and programs do not create risks that are reasonably likely to have a material adverse effect on Aptiv. The compensation risk assessment included a review of our pay and incentive plan structures, pay practices and policies, and governance process, including the Compensation Committee’s oversight of such programs (supported by an independent consultant).
|
In November 2023, the Compensation Committee retained Meridian Compensation Partners (“Meridian”) as its independent compensation consultant, and Meridian provided guidance and advice to assist the Compensation Committee in its year-end decision-making regarding our 2023 executive compensation program. It is anticipated that Meridian will provide services to the Compensation Committee as described above in 2024. The Compensation Committee assessed the independence of Semler Brossy and Meridian pursuant to SEC and NYSE rules and no conflict of interest exists that would prevent Semler Brossy or Meridian from independently representing the Compensation Committee. Neither Semler Brossy nor Meridian performs other services for the Company. Both firms met with the Compensation Committee Chair and the Compensation Committee outside the presence of management. In addition, both Semler Brossy and Meridian participated in all of the Compensation Committee’s meetings during their respective tenures and, when requested by the Compensation Committee Chair, in the preparatory meetings and the executive sessions.
The Compensation Committee and Semler Brossy reviewed the 2021
| | | | | | | COMPENSATION DISCUSSION AND ANALYSIS | | 49 |
Compensation Risk Assessment. The Aptiv Human Resources team completed a risk assessment of our compensation programs in January 2023 and concluded that our compensation policies, practices and programs do not create risks that are reasonably likely to have a material adverse effect on Aptiv. The compensation risk assessment included a review of our pay and incentive plan structures, pay practices and policies, and governance processes, including the Compensation Committee’s oversight of such programs (supported by an independent consultant). The Compensation Committee reviewed the 2023 assessment and discussed the report with management. The Compensation Committee agreed that our compensation policies, practices and programs do not create risks that are reasonably likely to have a material adverse effect on Aptiv. In doing so, the Compensation Committee also reaffirmed the following key risk mitigating factors with respect to our NEOs: | • | | Mix of fixed versusand variable, cash versuscash-based and equity-based, and short- versusand long-term compensation, with an emphasis on equity-based pay; |
| • | | Incentive award opportunities, with performance-based awards capped at approximately two times200% of the target amount, that span both annual and overlapping, multi-year
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Compensation Discussion and Analysis (continued)
| | time periods and incorporate a broad range of financial metrics, strategic initiatives and TSR; |
| • | | Existence of a clawback policy; and |
| • | | Stock ownership guidelines, with retention requirements, until the guideline is achieved, and the prohibition on hedging and pledging of Company stock. |
| | | | | | 50 | | COMPENSATION COMMITTEE REPORT | | |
| | | 
| | Compensation Committee Report |
We, the undersigned members of the Compensation Committee, have reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussion, we recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2023. Respectfully submitted, Joseph L. Hooley, Chairman Merit E. Janow Paul M. Meister
| | | | | | | 2023 SUMMARY COMPENSATION TABLE | | 51 |
| | |
| | 2023 Summary Compensation Table |
The table below sets forth specified information regarding the compensation of the individuals who served in 2023 as Chairman and Chief Executive Officer (Kevin P. Clark) and Chief Financial Officer and Senior Vice President, Business Operations (Joseph R. Massaro), and the next four most highly compensated executive officers who were serving as of December 31, 2023 (William T. Presley, Obed D. Louissaint, Benjamin Lyonand Katherine H. Ramundo, and together with our CEO and CFO, Aptiv’s NEOs). | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($)(1) | | | Bonus ($)(2) | | | Stock Awards ($)(3) | | | Non-Equity Incentive Plan Compensation ($) | | | All Other Compensation ($)(4) | | | Total ($) | | | | | | | | | | Kevin P. Clark Chairman and Chief Executive Officer | | | 2023 | | | $ | 1,462,272 | | | $ | — | | | $ | 14,032,595 | | | | $2,193,408 | | | | $311,861 | | | $ | 18,000,136 | | | | | 2022 | | | | 1,462,272 | | | | — | | | | 12,358,679 | | | | 2,193,408 | | | | 192,262 | | | | 16,206,621 | | | | | 2021 | | | | 1,462,272 | | | | — | | | | 12,295,011 | | | | 745,759 | | | | 241,738 | | | | 14,744,780 | | | | | | | | | | Joseph R. Massaro Chief Financial Officer and Senior Vice President, Business Operations | | | 2023 | | | | 1,256,250 | | | | | | | | 6,206,788 | | | | 1,593,750 | | | | 172,336 | | | | 9,229,124 | | | | | 2022 | | | | 1,150,000 | | | | — | | | | 4,943,446 | | | | 1,500,000 | | | | 103,463 | | | | 7,696,909 | | | | | 2021 | | | | 983,750 | | | | — | | | | 4,543,905 | | | | 340,000 | | | | 114,631 | | | | 5,982,286 | | | | | | | | | | William T. Presley Senior Vice President and Chief Operating Officer, and President, Signal & Power Solutions | | | 2023 | | | | 900,000 | | | | | | | | 3,778,060 | | | | 900,000 | | | | 136,450 | | | | 5,714,510 | | | | | 2022 | | | | 731,250 | | | | — | | | | 2,076,265 | | | | 900,000 | | | | 72,403 | | | | 3,779,918 | | | | | 2021 | | | | 643,750 | | | | — | | | | 2,779,753 | | | | 221,000 | | | | 79,556 | | | | 3,724,059 | | | | | | | | | | Obed D. Louissaint Senior Vice President and Chief People Officer | | | 2023 | | | | 750,000 | | | | 2,000,000 | | | | 11,139,181 | | | | 750,000 | | | | 82,190 | | | | 14,721,371 | | | | | | | | | | Benjamin Lyon Senior Vice President and Chief Technology Officer | | | 2023 | | | | 800,000 | | | | — | | | | 11,031,269 | | | | 800,000 | | | | 74,276 | | | | 12,705,545 | | | | | 2022 | | | | 9,091 | | | | 4,000,000 | | | | — | | | | 800,000 | | | | — | | | | 4,809,091 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Katherine H. Ramundo Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Secretary | | | 2023 | | | | 750,250 | | | | — | | | | 4,457,991 | | | | 775,000 | | | | 103,500 | | | | 6,086,741 | |
| (1) | Base salary and annual incentive awards are eligible for deferral under the Aptiv DCP. All NEOs participated in the DCP in 2023. Total base salaries and annual incentive awards, including the deferred portions, are presented in this 2023 Summary Compensation Table. Contributions to the DCP are displayed in the “2023 Non-Qualified Deferred Compensation” section. |
| (2) | For Messrs. Louissaint and Lyon, this bonus amount represents one-time cash payments made in connection with their respective hirings to make up for compensation forfeited upon leaving their respective prior employers. |
| (3) | The award values reflected in the “Stock Awards” column are the grant date fair values of the NEOs’ respective long-term incentive awards determined in accordance with FASB ASC Topic 718. The 2023 grant date for accounting purposes for the annual award was set at February 28, 2023, as approved by the Board of Directors and the Compensation Committee. For assumptions used in determining the fair value of these awards, see Note 21. Share-Based Compensation to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The award values include the grant date fair value of 2023 performance-based RSUs based on target performance, which was the probable outcome at grant. Assuming maximum performance achievement and based on grant date share price, for the NEOs’ performance-based RSUs granted in 2023, the values for such awards in the “Stock Awards” column would be $20,542,025 for Mr. Clark; $9,086,003 for Mr. Massaro; $5,530,626 for Mr. Presley; $12,641,380 for Mr. Louissaint; $12,483,356 for Mr. Lyon; and $5,609,696 for Ms. Ramundo. |
| | | | | | 52 | | 2023 SUMMARY COMPENSATION TABLE | | |
| (4) | Amounts reported in the “All Other Compensation” column for 2023 reflect the following: |
| | | | | | | | | | | | | | | | | Name | | Aptiv Contributions(a) | | | Life Insurance(b) | | | Other(c) | | | Total | | | | | | | Kevin P. Clark | | | $273,876 | | | | $ 185 | | | | $ 37,800 | | | | $311,861 | | | | | | | Joseph R. Massaro | | | 157,894 | | | | 2,442 | | | | 12,000 | | | | 172,336 | | | | | | | William T. Presley | | | 134,700 | | | | 1,750 | | | | — | | | | 136,450 | | | | | | | Obed D. Louissaint | | | 78,269 | | | | 621 | | | | 3,300 | | | | 82,190 | | | | | | | Benjamin Lyon | | | 73,614 | | | | 662 | | | | — | | | | 74,276 | | | | | | | Katherine H. Ramundo | | | 98,999 | | | | 2,701 | | | | 1,800 | | | | 103,500 | |
| (a) | For NEOs, this column reflects Aptiv’s contributions to both the qualified Aptiv Salaried 401(k) Plan, and the non-qualified DCP. For all participants in the Aptiv Salaried 401(k) Plan, Aptiv provides a contribution of 4% of base salary and annual incentive award payment. Aptiv also provides a matching contribution equal to 50% of the participant’s contributions to the program, up to a maximum of 7% of the participant’s base salary and annual incentive award. Additional details regarding the DCP are provided in the “2023 Non-Qualified Deferred Compensation” section. |
| (b) | This column reflects the dollar value of the insurance premiums paid for each NEO for premium payments made regarding his or her life insurance policy. |
| (c) | For Messrs. Clark and Massaro, these amounts represent tax preparation expenses in connection with working in Ireland. For Mr. Louissaint and Ms. Ramundo, these amounts represent parking and transit subsidies. |
| | | | | | | 2023 GRANTS OF PLAN-BASED AWARDS | | 53 |
| | |
| | 2023 Grants of Plan-Based Awards |
The table below sets forth the threshold, target and maximum award payout opportunities (or full award opportunity, as applicable) for plan-based awards that were granted to our NEOs in 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(6) | | Grant Date
Fair Value of Stock and Option Awards ($)(7) | | | | | | | | Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(4) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(5) | | Name | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | | | | | | | | | | | Kevin P. Clark | | | | | | | $548,352 | | | | $2,193,408 | | | | $4,386,816 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 44,166 | | | | $5,135,622 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | 16,562 | | | | 66,247 | | | | 132,494 | | | | | | | | 8,896,972 | | | | | | | | | | | | Joseph R. Massaro | | | | | | | 398,438 | | | | 1,593,750 | | | | 3,187,500 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 19,535 | | | | 2,271,530 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | 7,326 | | | | 29,302 | | | | 58,604 | | | | | | | | 3,935,259 | | | | | | | | | | | | William T. Presley | | | | | | | 225,000 | | | | 900,000 | | | | 1,800,000 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,891 | | | | 1,382,685 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | 4,459 | | | | 17,836 | | | | 35,672 | | | | | | | | 2,395,375 | | | | | | | | | | | | Obed D. Louissaint | | | | | | | 187,500 | | | | 750,000 | | | | 1,500,000 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2023 | (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | 67,947 | | | | 7,900,877 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,192 | | | | 1,185,126 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | 3,822 | | | | 15,288 | | | | 30,576 | | | | | | | | 2,053,178 | | | | | | | | | | | | Benjamin Lyon | | | | | | | 200,000 | | | | 800,000 | | | | 1,600,000 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2023 | (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | 67,947 | | | | 7,900,877 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,853 | | | | 1,145,707 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | 3,695 | | | | 14,778 | | | | 29,556 | | | | | | | | 1,984,685 | | | | | | | | | | | | Katherine H. Ramundo | | | | | | | 193,750 | | | �� | 775,000 | | | | 1,550,000 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2023 | (3) | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,987 | | | | 1,975,248 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,814 | | | | 908,612 | | | | | 2/28/2023 | | | | | | | | | | | | | | | | 2,930 | | | | 11,721 | | | | 23,442 | | | | | | | | 1,574,130 | |
| (1) | Mr. Louissaint received a one-time RSU award as part of his new hire package to make up for compensation forfeited upon leaving his prior employer; his start date was January 1, 2023. This award vests ratably on each of October 1 2023, 2024, and 2025. |
| (2) | Mr. Lyon received a one-time RSU award as part of his new hire package to make up for compensation forfeited upon leaving his prior employer; his start date was December 28, 2022. This award vests 50% on each of February 28, 2024 and 2025. |
| (3) | Ms. Ramundo received a one-time RSU award, as described in the “2023 Long-Term Incentive Compensation” section of the Compensation Discussion and Analysis with management. BasedAnalysis. This award vests 50% on such revieweach of February 28, 2024 and discussion, we recommended2025. |
| (4) | These columns show the threshold, target and maximum awards payable to our NEOs under the Board that2023 Annual Incentive Plan. The final award is determined by corporate performance, as determined by the Compensation DiscussionCommittee. |
| (5) | These columns show the threshold, target and Analysismaximum number of RSUs possible under the performance-based RSUs granted in 2023 pursuant to our Long-Term Incentive Plan. The actual payouts will be includedbased on three performance metrics (Average Return on Net Assets, Cumulative Net Income and relative TSR) during the performance period from January 1, 2023 through December 31, 2025. |
| (6) | This column shows the number of time-based RSUs granted to our NEOs in this Proxy Statement2023 pursuant to our Long-Term Incentive Plan. Annual time-based RSUs generally vest ratably over three years on the first, second and incorporated by reference into our Annual Report on Form 10-Kthird anniversary dates of the date of grant. The specific vesting terms for the year ended December 31, 2020. Respectfully submitted,
Rajiv L. Gupta, Chairman
Joseph L. Hooley
Paul M. Meister
Lawrence A. Zimmerman
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT one-time awards to Messrs. Louissaint and Lyon and Ms. Ramundo are described herein.
|
| (7) | 2020 SUMMARY COMPENSATION TABLE
The table below sets forth specified information regardingThis column reflects the compensationgrant date fair value of each 2023 equity award determined in accordance with FASB ASC Topic 718. For the individuals who served for 2020 as President and Chief Executive Officer (Kevin P. Clark) and Chief Financial Officer and Senior Vice President, Business Operations (Joseph R. Massaro), and the next three most highly compensated executive officers who were serving asgrant date fair values of December 31, 2020 (David Paja, David M. Sherbin and Mariya K. Trickett).
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary ($)(1)(2) | | | Bonus ($) | | | Stock Awards
($)(3) | | | Non-Equity
Incentive Plan
Compensation
($)(2)(4) | | | Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings
($)(5) | | | All Other
Compensation
($)(6) | | | Total ($) | | | Kevin P. Clark | | | 2020 | | | $ | 1,141,924 | | | $ | — | | | $ | 28,502,508 | | | $ | 1,425,715 | | | $ | — | | | $ | 197,182 | | | $ | 31,267,329 | | | President and Chief | | | 2019 | | | | 1,421,000 | | | | — | | | | 11,504,627 | | | | 1,970,640 | | | | — | | | | 268,266 | | | | 15,164,533 | | | Executive Officer | | | 2018 | | | | 1,375,000 | | | | — | | | | 10,643,793 | | | | 1,827,000 | | | | — | | | | 277,310 | | | | 14,123,103 | | | Joseph R. Massaro | | | 2020 | | | | 857,917 | | | | — | | | | 9,107,543 | | | | 607,750 | | | | | | | | 100,080 | | | | 10,673,290 | | | Chief Financial Officer and | | | 2019 | | | | 865,625 | | | | — | | | | 3,287,098 | | | | 917,780 | | | | | | | | 116,654 | | | | 5,187,157 | | | Senior Vice President, | | | 2018 | | | | 790,500 | | | | — | | | | 3,055,017 | | | | 797,260 | | | | — | | | | 64,334 | | | | 4,707,111 | | | Business Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David Paja | | | 2020 | | | | 618,624 | | | | — | | | | 5,294,782 | | | | 303,940 | | | | — | | | | 343,937 | | | | 6,561,283 | | | Senior Vice President and | | | 2019 | | | | 594,217 | | | | — | | | | 1,807,948 | | | | 444,351 | | | | — | | | | 289,611 | | | | 3,136,127 | | | President, Advanced | | | 2018 | | | | 603,275 | | | | — | | | | 1,596,632 | | | | 488,171 | | | | — | | | | 307,773 | | | | 2,995,851 | | | Safety and User | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Experience Segment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | David M. Sherbin | | | 2020 | | | | 586,542 | | | | — | | | | 4,034,723 | | | | 363,578 | | | | 11,562 | | | | 50,987 | | | | 5,047,392 | | | Senior Vice President, | | | 2019 | | | | 604,000 | | | | — | | | | 1,643,591 | | | | 502,596 | | | | 7,266 | | | | 87,020 | | | | 2,844,473 | | | General Counsel, Chief | | | 2018 | | | | 595,000 | | | | — | | | | 1,740,428 | | | | 465,885 | | | | — | | | | 96,766 | | | | 2,898,079 | | | Compliance Officer and | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Secretary | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mariya K. Trickett | | | 2020 | | | | 508,333 | | | | — | | | | 3,704,902 | | | | 303,875 | | | | — | | | | 189,151 | | | | 4,706,261 | | | Senior Vice President and | | | 2019 | | | | 515,000 | | | | — | | | | 1,780,353 | | | | 408,300 | | | | — | | | | 274,933 | | | | 2,978,586 | | | Chief Human Resources | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Officer | | | | | | | | | | | | | | | | | | | | | | | | | | �� | | | | | | |
As noted in “2020 Annual Incentive Plan Awards” and “2020 Long-Term Compensation”, the Compensation Committee approved adjustments to the financial performance targets for the 2020 annual cash incentive awards and the performance-based RSU awards granted in 2019 and 2020 in order to mitigate2023, the impactsamount reflects the target outcome of the COVID-19 pandemic that were deemed to be outsideperformance conditions, excluding the control and influenceeffect of estimated forfeitures. Except for the performance-based RSUs based on relative TSR (33.3% of the management team.annual performance-based RSUs), the grant date value for the 2023 equity awards was determined based on the grant date closing price of our stock on the NYSE. The amount shown in the “Stock Awards” column reflects the originalclosing price of Aptiv shares on February 28, 2023 was $116.28. The grant date fair value as well asfor the incremental accounting expense related to the adjustments to the outstandingrelative TSR performance-based RSU awards. See “Supplemental Compensation InformationRSUs granted in 2023 was determined using a Monte Carlo simulation and Reconciliation” for more explanationwas based on a price of the nature and scope of the accounting impacts on our CEO’s compensation.
(1) | All of our NEOs voluntarily reduced their base salary for the period from April 2020 through August 2020. All NEOs deferred their approved base salary increases until September 1, 2020. See “2020 Annual Compensation Determination, 2020 Base Salaries.” Mr. Paja is a German employee. His salary, bonus and other non-equity compensation items are paid in Euros. U.S. Dollar amounts in this Proxy Statement with respect to Mr. Paja’s non-equity compensation have been converted from Euros at a rate of 1.14 Dollars to one Euro. The exchange rate used was calculated by averaging exchange rates for each calendar month in 2020.
|
(2) | Base salary and annual incentive awards are eligible for deferral under the SRESP. All of the NEOs, other than Mr. Paja, participated in the SRESP in 2020. Total base salaries and annual incentive awards, including the deferred portions, are presented in this 2020 Summary Compensation Table. Contributions to the SRESP are displayed in the “2020 Non-Qualified Deferred Compensation” section.
|
(3) | The award values reflected in the “Stock Awards” column are the grant date fair values of the NEOs’ respective long-term incentive awards determined in accordance with FASB ASC Topic 718. The 2020 grant date for accounting purposes for the annual award was set at February 28, 2020, as approved by the Board of Directors and the Compensation Committee. In addition, the Compensation Committee approved modifications to the 2019 and 2020 performance-based RSU grants on December 30, 2020. The incremental fair values associated with such modifications, as required under FASB ASC 718, are also included in the “Stock Awards” value for 2020. For assumptions used in determining the fair value of$170.34 per share.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
|
2020 Summary Compensation Table (continued)
| these awards, see Note 21. Share-Based Compensation to the Consolidated Financial Statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The award values include the grant date fair value of 2020 performance-based RSUs based on target performance. Assuming maximum performance achievement under the terms of the original grant and based on grant date share price, for the NEOs’ performance-based RSUs granted in 2020, the values for such awards in the “Stock Awards” column would be $17,425,247 for Mr. Clark; $5,861,218 for Mr. Massaro; $3,485,112 for Mr. Paja; $2,455,388 for Mr. Sherbin; and $2,376,262 for Ms. Trickett. |
(4) | The “Non-Equity Incentive Plan Compensation” column reflects payments made under our Annual Incentive Plan.
|
(5) | Mr. Sherbin was eligible to receive benefits under the SERP during 2020. No amount in this column represents above-market or preferential earnings on non-qualified deferred compensation. Although the SERP is a frozen program (see “2020 Pension Benefits” section) with fixed measurement parameters, the year-over-year balances change because his age and the interest rates used to estimate the pension liability change each year.
|
(6) | Amounts reported in the “All Other Compensation” column for 2020 reflect the following:
|
| | | | | | | | | | | | | | | | | | | | | Name | | Aptiv Contributions(a) | | | Life Insurance(b) | | | Expatriate Assignment(c) | | | Other(d) | | | Total | | | | | | | | | Kevin P. Clark | | $ | 179,973 | | | $ | 2,988 | | | $ | — | | | $ | 14,221 | | | $ | 197,182 | | | | | | | | | Joseph R. Massaro | | | 85,221 | | | | 913 | | | | — | | | | 13,946 | | | | 100,080 | | | | | | | | | David Paja | | | — | | | | — | | | | 343,937 | | | | — | | | | 343,937 | | | | | | | | | David M. Sherbin | | | 49,076 | | | | 1,911 | | | | — | | | | — | | | | 50,987 | | | | | | | | | Mariya K. Trickett | | | 38,947 | | | | 243 | | | | — | | | | 149,961 | | | | 189,151 | |
(a) | For NEOs other than Mr. Paja, this column reflects Aptiv’s contributions to both the qualified SRSP and the non-qualified SRESP. For all participants in the SRSP, Aptiv provides a contribution of 4% of base salary and annual incentive award payment. We also provide a matching contribution equal to 50% of the participant’s contributions to the program, up to a maximum of 7% of the participant’s base salary and annual incentive award. Aptiv contributions to the SRSP and SRESP were suspended as of April 1, 2020 in response to COVID-19. Additional details regarding the SRESP are provided in the “2020 Non-Qualified Deferred Compensation” section.
|
(b) | This column reflects the dollar value of the insurance premiums paid for each NEO for premium payments made regarding his or her life insurance policy.
|
(c) | Mr. Paja receives certain expatriate benefits. The payment represented in this column for Mr. Paja includes: housing of $64,980, healthcare of $23,346, Company-provided automobile of $40,144, education and language of $71,068 and tax equalization payments totaling $144,399 to tax authorities in Germany on Mr. Paja’s behalf, in connection with his expatriate benefits.
|
(d) | For Mr. Clark and Mr. Massaro, these amounts represent tax preparation expenses in connection with working in Ireland; and for Ms. Trickett, this amount represents relocation expenses of $149,961.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
|
2020
| | | | | | 54 | | 2023 GRANTS OF PLAN-BASED AWARDS The table below sets forth the threshold, target and maximum award payout opportunities (or full award opportunity, as applicable) for plan-based awards that were granted to our NEOs in 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under
Equity Incentive Plan Awards(2) | | | All Other
Stock
Awards:
Number of
Shares of
Stock or Units
(#)(3) | | | Grant Date
Fair Value of
Stock and
Option
Awards
($)(5) | | Name | | Grant Date | | | Threshold
($) | | | Target ($) | | | Maximum ($) | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | Kevin P. Clark | | | | | | $ | 877,363 | | | $ | 1,096,704 | | | $ | 1,425,715 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 31,870 | | | $ | 2,489,366 | | | | | 2/28/2020 | | | | | | | | | | | | | | | | 66,926 | | | | 95,608 | | | | 191,216 | | | | | | | | 8,206,520 | | | | | 12/30/2020 | (4) | | | | | | | | | | | | | | | 80,821 | | | | 136,147 | | | | 204,220 | | | | | | | | 17,806,623 | | Joseph R. Massaro | | | | | | | 374,000 | | | | 467,500 | | | | 607,750 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,720 | | | | 837,339 | | | | | 2/28/2020 | | | | | | | | | | | | | | | | 22,511 | | | | 32,159 | | | | 64,318 | | | | | | | | 2,760,370 | | | | | 12/30/2020 | (4) | | | | | | | | | | | | | | | 25,352 | | | | 42,127 | | | | 63,191 | | | | | | | | 5,509,834 | | David Paja | | | | | | | 220,886 | | | | 276,108 | | | | 358,940 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,374 | | | | 497,873 | | | | | 2/28/2020 | | | | | | | | | | | | | | | | 13,385 | | | | 19,122 | | | | 38,244 | | | | | | | | 1,641,338 | | | | | 12/30/2020 | (4) | | | | | | | | | | | | | | | 14,613 | | | | 24,127 | | | | 36,191 | | | | | | | | 3,155,570 | | David M. Sherbin | | | | | | | 223,740 | | | | 279,675 | | | | 363,578 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,491 | | | | 350,792 | | | | | 2/28/2020 | | | | | | | | | | | | | | | | 9,430 | | | | 13,472 | | | | 26,944 | | | | | | | | 1,156,370 | | | | | 12/30/2020 | (4) | | | | | | | | | | | | | | | 11,459 | | | | 19,325 | | | | 28,988 | | | | | | | | 2,527,560 | | Mariya K. Trickett | | | | | | | 187,000 | | | | 233,750 | | | | 303,875 | | | | | | | | | | | | | | | | | | | | | | | | | 2/28/2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,346 | | | | 339,466 | | | | | 2/28/2020 | | | | | | | | | | | | | | | | 9,127 | | | | 13,038 | | | | 26,076 | | | | | | | | 1,119,118 | | | | | | 12/30/2020 | (4) | | | | | | | | | | | | | | | 10,326 | | | | 17,175 | | | | 25,763 | | | | | | | | 2,246,318 | |
As noted in “2020 Annual Incentive Plan Awards” and “2020 Long-Term Compensation”, the Compensation Committee approved adjustments to the financial performance targets for the 2020 annual cash incentive awards and the performance-based RSU awards granted in 2019 and 2020 in order to mitigate the impacts of the COVID-19 pandemic on the Company’s operating environment that were deemed to be outside the control and influence of the management team. The amount shown in the “Grant Date Fair Value of Stock and Option Awards” column for the awards dated 12/30/2020 reflect the incremental accounting expense related to the adjustments to performance-based RSU awards.
(1) | | | These columns show the threshold, target and maximum awards payable to our NEOs under the 2020 Updated Incentive Plan. The final award is determined by Corporate performance, as well as individual performance achievements, as determined by the Compensation Committee. The “target” and “maximum” amounts reflect the reduction to such opportunities in connection with the adjustment of 2020 annual incentive awards in July 2020.
(2) | These columns show the threshold, target and maximum number of RSUs possible under the performance-based RSUs granted in 2020 pursuant to our Long-Term Incentive Plan. The actual payouts will be based on three performance metrics (Average Return on Net Assets, Cumulative Net Income and relative TSR) during the performance period from January 1, 2020 through December 31, 2022. The “maximum” amounts shown for the original February 28, 2020 performance grant reflect the original maximum opportunities under these awards. However, in connection with the adjustment of such awards in December 2020, the maximum possible payout for each award was reduced to 150% of target.
|
(3) | This column shows the number of time-based RSUs granted to our NEOs in 2020 pursuant to our Long-Term Incentive Plan excluding dividend equivalents. These time-based RSUs generally vest ratably over three years on the first, second and third anniversary dates of the date of grant.
|
(4) | This award represents a modification to the existing 2019 and 2020 performance-based RSU awards. The total realizable opportunity has not increased for the 2019 or 2020 grants, and the maximum attainable number of shares has been reduced to 150% of the target shares.
|
(5) | This column reflects the original grant date fair value of each 2020 equity award, as well as the incremental fair value associated with the modifications to the 2019 and 2020 performance-based RSU awards approved in December 2020, in each case determined in accordance with FASB ASC Topic 718, For the original grant date fair values of performance-based RSU awards granted in 2020, the amount reflects the target outcome of the performance conditions, excluding the effect of estimated forfeitures. Except for the performance-based RSUs based on relative TSR (33.3%of the annual performance-based RSUs), the original grant date value for the 2020 equity awards was determined based on the grant date closing price of our stock on the New York Stock Exchange. If the grant is issued on a non-trading day, the grant date closing price was deemed to be the closing price of our stock on the last preceding date on which any reported sale occurred. The closing price of Aptiv shares on February 28, 2020 was $78.11. The grant date fair value for the relative TSR performance-based RSUs granted in 2020 was determined using a Monte Carlo simulation and was based on a price of $101.29 per share. The incremental fair value associated with the modification of the 2019 and 2020 performance-based RSU awards was determined as of the December 30, 2020 modification date. The closing price of Aptiv shares on December 30, 2020 was $130.79.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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2020 Grants of Plan-Based Awards (continued)
Our NEOs are parties to offer letters or employment agreements with Aptiv that generally describe the compensation and benefits initially provided to them upon employment. For more information about these arrangements, refer to “Potential Payments Upon Termination or Change in Control”. For more information about the NEOs’ relative mix of salary and other compensation elements in proportion to total compensation, refer to “2020 Compensation Program Overview — 2020
Our NEOs are parties to offer letters with Aptiv that generally describe the compensation and benefits initially provided to them upon employment, including benefits upon termination. For more information about these arrangements, refer to “Potential Payments Upon Termination or Change in Control”. For more information about the NEOs’ relative mix of salary and other compensation elements in proportion to total compensation, refer to “2023 Compensation Program Overview — 2023 Target Annual Total Direct Compensation Mix”.
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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2020
| | | | | | | 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | | 55 |
| | |
| | 2023 Outstanding Equity Awards at Fiscal Year-End |
The values displayed in the table below reflect each Aptiv NEO’s outstanding long-term incentive awards as of December 31, 2023. The market values are calculated using a share price of $89.72, the closing price of our stock on December 29, 2023 (the last trading day of fiscal 2023). The performance-based RSUs granted in 2022 and 2023, labeled with performance periods 1/1/2022-12/31/2024 and 1/1/2023-12/31/2025, are presented at the maximum level of performance. | | | | | | | | | | | | | | | | | | | | | | | | Stock Awards | | Name | | Restricted Stock Unit Grant Date or Performance Period(1) | | | Number of Shares or Units of Stock That Have Not Vested (#)(5) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(6) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(7),(8) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6) | | | | | | | Kevin P. Clark | | | 2/28/2021 | | | | 9,981 | | | $ | 895,495 | | | | | | | | | | | | | 2/28/2022 | | | | 24,056 | | | | 2,158,304 | | | | | | | | | | | | | 2/28/2023 | | | | 44,166 | | | | 3,962,574 | | | | | | | | | | | | | 1/1/2022-12/31/2024 | | | | | | | | | | | | 108,250 | | | $ | 9,712,190 | | | | | 1/1/2023-12/31/2025 | | | | | | | | | | | | 132,494 | | | | 11,887,362 | | | | | | | | Joseph R. Massaro | | | 2/28/2021 | | | | 3,689 | | | | 330,977 | | | | | | | | | | | | | | | | | | | 2/28/2022 | | | | 9,622 | | | | 863,286 | | | | | | | | | | | | | | | | | | | 2/28/2023 | | | | 19,535 | | | | 1,752,680 | | | | | | | | | | | | | | | | | | | 1/1/2022-12/31/2024 | | | | | | | | | | | | 43,300 | | | | 3,884,876 | | | | | | | | | | | | 1/1/2023-12/31/2025 | | | | | | | | | | | | 58,604 | | | | 5,257,951 | | | | | | | | William T. Presley | | | 2/28/2021 | | | | 1,476 | | | | 132,427 | | | | | | | | | | | | | | | | | | | 2/28/2021 | | | | 782 | | | | 70,161 | | | | | | | | | | | | | | | | | | | 2/28/2022 | | | | 4,042 | | | | 362,648 | | | | | | | | | | | | | | | | | | | 2/28/2023 | | | | 11,891 | | | | 1,066,861 | | | | | | | | | | | | | | | | | | | 1/1/2022-12/31/2024 | | | | | | | | | | | | 18,186 | | | | 1,631,648 | | | | | | | | | | | | 1/1/2023-12/31/2025 | | | | | | | | | | | | 35,672 | | | | 3,200,492 | | | | | | | | Obed D. Louissaint | | | 2/28/2023 | (2) | | | 45,298 | | | | 4,064,137 | | | | | | | | | | | | | | | | | | | 2/28/2023 | | | | 10,192 | | | | 914,426 | | | | | | | | | | | | | | | | | | | | 1/1/2023-12/31/2025 | | | | | | | | | | | | 30,576 | | | | 2,743,279 | | | | | | | | Benjamin Lyon | | | 2/28/2023 | (3) | | | 67,947 | | | | 6,096,205 | | | | | | | | | | | | | 2/28/2023 | | | | 9,853 | | | | 884,011 | | | | | | | | | | | | | 1/1/2023-12/31/2025 | | | | | | | | | | | | 29,556 | | | | 2,651,764 | |
| | | | | | 56 | | 2023 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | | |
| | | | | | | | | | | | | | | | | | | | | | | | Stock Awards | | Name | | Restricted Stock Unit Grant Date or Performance Period(1) | | | Number of Shares or Units of Stock That Have Not Vested (#)(5) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(6) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(7),(8) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(6) | | | | | | | Katherine H. Ramundo | | | 3/15/2021 | | | | 1,425 | | | | 127,851 | | | | | | | | | | | | | | | | | | | 3/15/2021 | | | | 9,351 | | | | 838,972 | | | | | | | | | | | | | | | | | | | 2/28/2022 | | | | 3,464 | | | | 310,790 | | | | | | | | | | | | | | | | | | | 2/28/2023 | (4) | | | 16,987 | | | | 1,524,074 | | | | | | | | | | | | | | | | | | | 2/28/2023 | | | | 7,814 | | | | 701,072 | | | | | | | | | | | | | | | | | | | 1/1/2022-12/31/2024 | | | | | | | | | | | | 15,588 | | | | 1,398,555 | | | | | | | | | | | | 1/1/2023-12/31/2025 | | | | | | | | | | | | 23,442 | | | | 2,103,216 | |
| (1) | To better understand the information in this table, we included the time-based RSU award grant dates and the performance periods of our performance-based RSU awards. |
| (2) | Mr. Louissaint received a one-time RSU award as part of his new hire package to make up for compensation forfeited upon leaving his prior employer; his start date was January 1, 2023. This award vests ratably on each of October 1, 2023, 2024, and 2025. |
| (3) | Mr. Lyon received a one-time RSU award as part of his new hire package to make up for compensation forfeited upon leaving his prior employer; his start date was December 28, 2022. This award vests 50% on each of February 28, 2024 and 2025. |
| (4) | Ms. Ramundo received a one-time RSU award, as described in the “2023 Long-Term Incentive Compensation” section of the Compensation Discussion and Analysis. This award vests 50% on each of February 28, 2024 and 2025. |
| (5) | This column shows the unvested time-based RSU awards as of December 31, 2020. 2023, which, except for the one-time awards described in footnotes 2-4 of this table, generally vest ratably on each of the first, second and third anniversaries of the grant date. |
| (6) | The amount shown represents the market values are calculatedvalue of awards using a per share price of $130.29,$89.72, the December 31, 2020 closing price of our stock. Thestock on December 29, 2023 (the last trading day of fiscal 2023). |
| (7) | Performance-based RSUs presented at maximum performance levels. |
| (8) | Of the awards reflected in this column, the 2022-2024 performance-based RSUs grantedwill be settled in 2019 and 2020, labeled with performance periods 1/1/2019-12/31/2021 and 1/1/2020-12/31/2022, are presented atearly 2025 after the maximum level of performance. | | | | | | | | | | | | | | | | | | | | | | Stock Awards | | Name | | Restricted Stock Unit
Grant Date or
Performance Period(1) | | Number of
Shares or Units
of Stock That
Have Not Vested
(#)(2) | | | Market Value of
Shares or
Units of
Stock That
Have Not Vested
($)(3) | | | Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have
Not Vested
(#)(4),(5) | | | Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned
Shares, Units
or Other Rights
That Have
Not Vested
($)(3) | | Kevin P. Clark | | 2/28/2018 | | | 9,178 | | | $ | 1,195,802 | | | | | | | | | | | | 2/28/2019 | | | 21,685 | | | | 2,825,339 | | | | | | | | | | | | 2/28/2020 | | | 31,870 | | | | 4,152,342 | | | | | | | | | | | | 1/1/2019-12/31/2021 | | | | | | | | | | | 146,370 | | | $ | 19,070,547 | | | | 1/1/2020-12/31/2022 | | | | | | | | | | | 143,412 | | | | 18,685,149 | | Joseph R. Massaro | | 2/28/2018 | | | 2,295 | | | | 299,016 | | | | | | | | | | | | 2/28/2019 | | | 6,197 | | | | 807,407 | | | | | | | | | | | | 2/28/2020 | | | 10,720 | | | | 1,396,709 | | | | | | | | | | | | 1/1/2019-12/31/2021 | | | | | | | | | | | 41,821 | | | | 5,448,858 | | | | 1/1/2020-12/31/2022 | | | | | | | | | | | 48,239 | | | | 6,285,059 | | David Paja | | 2/28/2018 | | | 1,378 | | | | 179,450 | | | | | | | | | | | | 2/28/2019 | | | 3,409 | | | | 444,159 | | | | | | | | | | | | 2/28/2020 | | | 6,374 | | | | 830,468 | | | | | | | | | | | | 1/1/2019-12/31/2021 | | | | | | | | | | | 23,001 | | | | 2,996,800 | | | | 1/1/2020-12/31/2022 | | | | | | | | | | | 28,683 | | | | 3,737,108 | | David M. Sherbin | | 2/28/2018 | | | 1,331 | | | | 173,416 | | | | | | | | | | | | 2/28/2019 | | | 3,100 | | | | 403,899 | | | | | | | | | | | | 2/28/2020 | | | 4,491 | | | | 585,132 | | | | | | | | | | | | 1/1/2019-12/31/2021 | | | | | | | | | | | 20,911 | | | | 2,724,494 | | | | 1/1/2020-12/31/2022 | | | | | | | | | | | 20,208 | | | | 2,632,900 | | Mariya K. Trickett | | 10/15/2018 | | | 3,169 | | | | 412,889 | | | | | | | | | | | | 2/28/2019(6) | | | 5,261 | | | | 685,456 | | | | | | | | | | | | 2/28/2019 | | | 2,542 | | | | 331,197 | | | | | | | | | | | | 2/28/2020 | | | 4,346 | | | | 566,240 | | | | | | | | | | | | 1/1/2019-12/31/2021 | | | | | | | | | | | 17,148 | | | | 2,234,213 | | | | | 1/1/2020-12/31/2022 | | | | | | | | | | | 19,557 | | | | 2,548,082 | |
As noted in “2020 Long-Term Compensation”, the Compensation Committee approved adjustments to the financial performance targetsresults for the three-year performance period are determined and the 2023-2025 performance-based RSU awards grantedRSUs will be settled in 2019 and 2020 in order to mitigate the impacts of the COVID-19 pandemic that were deemed to be outside the control and influence of the management team.
(1) | To better understand the information in this table we included the time-based RSU award grant dates and the performance periods of our performance-based RSU awards. All unit amounts include dividend equivalents.
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(2) | This column shows the unvested time-based RSU awards as of December 31, 2020, which generally vest ratably on each of the first, second and third anniversaries of the grant date.
|
(3) | The amount shown represents the market value of awards using a per share price of $130.29, the closing price of our stock on December 31, 2020.
|
(4) | Performance-based RSUs presented at maximum performance levels. Pursuant to adjustments approved by the Compensation Committee for the 2019-2021 and 2020-2022 performance period, maximum performance is capped at 150% of target.
|
(5) | Of the awards reflected in this column, the 2019-2021 performance-based RSUs will be settled in early 2022 after the results for the three-year performance period are determined and the 2020-2022 performance-based RSUs will be settled in early 2023early 2026 after the results for the three-year performance period are determined.
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(6) | These RSUs vest in full on the second anniversary of the date of grant.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
| 2020
| | 2023 OPTION EXERCISES AND STOCK VESTED TABLE | | 57 |
| | | The following table sets forth information regarding vested stock awards during 2020
| | 2023 Option Exercises and Stock Vested Table |
The following table sets forth information regarding vested stock awards during 2023 for our NEOs. The value realized on vesting is based on the market price of the underlying shares on the date of vest. | | | | | | | | | | | | Stock Awards (2) | | Name | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | | | | Kevin P. Clark | | | 71,254 | | | $ | 7,259,588 | | | | | Joseph R. Massaro | | | 26,348 | | | | 2,684,628 | | | | | William T. Presley | | | 15,133 | | | | 1,527,743 | | | | | Obed D. Louissaint | | | 22,649 | | | | 2,633,626 | | | | | Benjamin Lyon(1) | | | — | | | | — | | | | | Katherine H. Ramundo | | | 18,021 | | | | 1,949,030 | |
| | | | | | | | | | | | Stock Awards | | | Name | | Number of Shares Acquired on Vesting (#)(1) | | | Value Realized on Vesting ($)(1) | | Kevin P. Clark | | | 111,097 | | | $ | 12,771,882 | | Joseph R. Massaro | | | 27,533 | | | | 3,174,166 | | David Paja | | | 26,875 | | | | 2,713,365 | | David M. Sherbin | | | 16,118 | | | | 1,852,681 | | Mariya K. Trickett | | | 15,130 | | | | 1,739,817 | |
| (1) | Mr. Lyon did not have any awards that vested during the year. (1) | The shares and values listed in these columns include time-based RSUs that vested on February 28, 2020 and performance-based RSUs that were earned as of December 31, 2020, and settled on February 28, 2021.
|
| (2) | Except for Mr. Louissaint’s awards, the shares and values listed in these columns include time-based RSUs that vested on February 28, 2023 and performance-based RSUs that vested on December 31, 2023, and settled on February 28, 2024. The shares and value listed for Mr. Louissaint include time-based RSUs that vested on October 1, 2023. |
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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2020 PENSION BENEFITS
Mr. Sherbin is the only NEO eligible to receive benefits under the SERP.
The SERP is a supplemental executive defined benefit plan, which was frozen on September 30, 2008. As a result of the freeze, no new benefits have accrued and no new participants have been allowed to join the plan. This plan is a non-qualified and unfunded defined benefit plan that supplemented the benefits of an underlying qualified defined benefit pension plan assumed by the Pension Benefit Guaranty Corporation (the “PBGC”) in July 2009.
Eligibility
To qualify for participation in the SERP, eligible executives must meet both of the following requirements:
The executive was appointed to an executive position at the former Delphi Corporation, as of September 30, 2008; and
The executive was employed by Aptiv on October 6, 2009, upon the formation of Delphi Automotive LLP.
To receive benefits under the SERP:
The executive must remain continuously employed by Aptiv until the earlier of separation, death or disability; and
At the time of termination of employment, death or disability, the executive must have at least 10 years of service and be at least 55 years of age (unless the executive is involuntarily separated other than for cause or dies, in which event the eligible executive or the surviving spouse will begin receiving payment of benefits when the executive attains or would have attained age 55).
Service is credited as of December 31, 2006. The benefit will be paid out in the form of a five-year annuity.
Valuation Method and Assumptions
The actuarial present value of accumulated benefits for the SERP shown in the 2020 Pension Benefits table is based on benefits accrued as of September 30, 2008, the last day on which benefits were accumulated under the former Delphi Corporation’s qualified plan. The amounts reflect the method and assumptions used in calculating our pension liability under U.S. GAAP as of that date, except that each participant is assumed to remain actively employed until age 62.
The present value figures shown are estimates only; actual benefit amounts will be based on the age, interest rates, mortality rates and other circumstances in effect upon the actual termination of employment or death of the participant.
The following table sets forth information regarding benefits provided to and years of service credited to eligible NEOs under the SERP.
2020 Pension Benefits
| | | | | | | | | | | | | | | | | | Name(1) | | Plan Name | | | Number of Years Credited Service(#)(2) | | | Present Value of Accumulated Benefit ($) | | | Payments During Last Fiscal Year ($) | | | | | | | | Kevin P. Clark | | | — | | | | — | | | $ | — | | | $ | — | | | | | | | | Joseph R. Massaro | | | — | | | | — | | | | — | | | | — | | | | | | | | David Paja | | | — | | | | — | | | | — | | | | — | | | | | | | | David M. Sherbin | | | SERP | | | | 1.3 | | | | 52,085 | | | | — | | | | | | | | Mariya K. Trickett | | | — | | | | — | | | | — | | | | — | |
| | | | | (1)Messrs. Clark, Massaro and Paja and Ms. Trickett joined Aptiv after the SERP was closed and frozen, and are therefore ineligible for benefits under the program.
|
(2) | Number of years of credited service is as of December 31, 2006 and includes service with the former Delphi Corporation. Mr. Sherbin had 15 actual years of service with Aptiv as of December 31, 2020. Mr. Sherbin was also subject to a two-year employment requirement, commencing in October 2009, which has been met.
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| | | APTIV PLC | | 58 | | 2023 NON-QUALIFIED DEFERRED COMPENSATION | | | 54
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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| | |
| | 2020 NON-QUALIFIED DEFERRED COMPENSATION2023 Non-Qualified Deferred Compensation
The SRESP is a non-qualified deferred compensation program available to a limited number of employees, including the NEOs. Under the SRESP, participants receive Aptiv contributions in excess of the limits imposed upon the SRSP, our 401(k) plan, by the Internal Revenue Code.
Plan Benefits
Employees who were eligible for SRESP deferrals in 2020, including the NEOs other than Mr. Paja, were permitted to defer additional income above $285,000, which is the maximum income deferral level imposed upon the SRSP by the Internal Revenue Code in 2020, into a SRESP deferral account. They also received the following benefits through March 31, 2020, after which Aptiv contributions were suspended in response to COVID-19:
|
The Aptiv Deferred Compensation Plan (“DCP”) is a non-qualified deferred compensation program available to a limited number of employees, including the NEOs. Under the DCP, participants receive Aptiv contributions in excess of the limits imposed upon the Aptiv Salaried 401(k) Plan by the Code. PLAN BENEFITS Employees who were eligible for DCP deferrals in 2023 were permitted to defer additional income above $330,000 (the maximum eligible compensation limit under the Aptiv Salaried 401(k) Plan for 2023) into a DCP deferral account. They also received the following benefits: | • | | All SRESP-eligibleDCP-eligible employees receive an Aptiv contribution of 4% of their base salary and annual incentive award. This contribution occurs even if the individual does not elect to make deferrals into the SRESP;DCP; and |
| • | | Eligible employees who made deferral contributions under the SRESPDCP received an additional Aptiv matching contribution of 50% on the individual’s voluntary deferrals up to 7% of the base salary and annual incentive award over the qualified plan limit, which constitutes a maximum contribution by Aptiv of 3.5% of each eligible employee’s base salary. Investment Options
Participants in the SRESP may select investment options for their deferred amounts. The investment options consist of
a small selection of index mutual funds and do not offer any guaranteed or above-market returns.
Deferral Election Process
The SRESP deferral election process is conducted prior to the year in which eligible income is earned. For the 2020 plan, deferral elections were required to be made by December 2019. During this process, eligible employees were allowed to make deferral elections related to their 2020 base salary and any annual incentive award based on 2020 performance that would be scheduled to be paid in 2021 (but no later than March 15, 2021).
Distributions
Eligible employees must also elect a distribution date for their deferred amounts. A base salary deferral must remain deferred for a minimum of one year, and any annual incentive deferral must remain deferred for a minimum of two years.
Vesting
|
INVESTMENT OPTIONS Participants in the DCP may select investment options for their deferred amounts. The investment options consist of a small selection of index mutual funds and do not offer any guaranteed or above-market returns. DEFERRAL ELECTION PROCESS The DCP deferral election process is conducted prior to the year in which eligible income is earned. For the 2023 plan year, deferral elections were required to be made no later than December 2022. During this process, eligible employees were allowed to make deferral elections related to their 2023 base salary and any annual incentive award based on 2023 performance that would be scheduled to be paid in 2024 (but no later than March 15, 2024). DISTRIBUTIONS Eligible employees must also elect a distribution date for their deferred amounts. A base salary deferral must remain deferred for a minimum of one year, and any annual incentive deferrals must remain deferred for a minimum of two years. VESTING All employee deferrals and Aptiv contributions are immediately vested. The values displayed in the table below include contributions to the NEOs’ DCP accounts by the NEOs and by Aptiv in 2023, as well as the aggregate balances of these accounts at the end of 2023.
| | | | | | | 2023 NON-QUALIFIED DEFERRED COMPENSATION | | 59 |
2023 NON-QUALIFIED DEFERRED COMPENSATION TABLE | | | | | | | | | | | | | | | | | | | | | Name | | Executive Contributions in Last FY ($)(1) | | | Registrant Contributions in Last FY ($)(2) | | | Aggregate Earnings in Last FY ($)(3) | | | Aggregate Withdrawals / Distributions ($)(4) | | | Aggregate Balance at Last FYE ($) | | Kevin P. Clark | | | $232,798 | | | | $249,426 | | | | $245,667 | | | | $— | | | | $1,819,044 | | Joseph R. Massaro | | | 72,788 | | | | 133,444 | | | | 93,779 | | | | 214,260 | | | | 488,097 | | William T. Presley | | | 102,900 | | | | 110,250 | | | | 47,982 | | | | — | | | | 511,685 | | Obed D. Louissaint | | | — | | | | 56,800 | | | | 1,762 | | | | — | | | | 58,562 | | Benjamin Lyon | | | — | | | | 50,800 | | | | 1,356 | | | | — | | | | 52,156 | | Katherine H. Ramundo | | | 69,640 | | | | 74,614 | | | | 31,052 | | | | — | | | | 283,064 | |
| (1) | All NEOs other than Messrs. Louissaint and Lyon elected to defer a portion of their salary and annual incentive awards as permitted under the DCP. Each NEO’s total salary and annual incentive award, including these deferred amounts, is reported in the “2023 Summary Compensation Table”. |
| (2) | Company contributions to the NEOs’ SRESPDCP accounts, along with contributions to the qualified Aptiv Salaried 401(k) Plan, are disclosed in the “All Other Compensation” column in the “2023 Summary Compensation Table”. |
| (3) | Aggregate earnings represent change (including losses) in market value less any fee paid by the NEOs and by Aptiv in 2020, as well as the aggregate balancesNEO, but none of these accounts atamounts are disclosed in the end“2023 Summary Compensation Table”. |
| (4) | The withdrawals of 2020. 2020 Non-Qualified Deferred Compensation Table
| | | | | | | | | | | | | | | | | | | | | | Name | | Executive Contributions in Last FY ($)(1) | | | Registrant Contributions in Last FY ($)(2) | | | Aggregate Earnings in Last FY ($)(3) | | | Aggregate Withdrawals /
Distributions ($)(4) | | | Aggregate Balance at Last FYE ($) | | | Kevin P. Clark | | | $202,969 | | | | $158,598 | | | $ | 370,527 | | | | $724,316 | | | $ | 2,613,767 | | | Joseph R. Massaro | | | 104,349 | | | | 63,846 | | | | 105,192 | | | | 115,560 | | | | 509,657 | | | David Paja | | | — | | | | — | | | | — | | | | — | | | | — | | | David M. Sherbin | | | 68,932 | | | | 27,701 | | | | 27,115 | | | | 150,081 | | | | 100,261 | | | Mariya K. Trickett | | | 44,214 | | | | 18,998 | | | | 8,141 | | | | — | | | | 145,523 | |
(1) | All of our NEOs, except Mr. Paja who is not an eligible SRESP participant, elected to defer a portion of their salary and annual incentive awards as permitted under the SRESP. Each NEO’s total salary and annual incentive award, including these deferred amounts, is reported in the “2020 Summary Compensation Table”.
|
(2) | Our contributions to the NEOs’ SRESP accounts, along with contributions to the qualified SRSP, are disclosed in the “All Other Compensation” column in the “2020 Summary Compensation Table”.
|
(3) | Aggregate earnings represent change (including losses) in market value less any fee paid by the NEO, but none of these amounts are disclosed in the “2020 Summary Compensation Table”.
|
(4) | The withdrawals of our NEOsour NEO(s) were made in accordance with the deferral election process described in this section.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | | |
| | |
| | Potential Payments Upon Termination or Change in Control |
EMPLOYMENT ARRANGEMENTS We have offer letters in place with all Aptiv NEOs. These offer letters describe our standard terms and conditions of employment and compensation and benefits provided to the individual. Mr. Clark’s offer letter also includes severance provisions, which provide for 18 months of base pay plus an amount equal to 1.5 times his annual incentive at target in the event he is terminated by the Company without cause. Each NEO who receives an amount equal to 1.5 times his annual incentive at target in the event he is terminated by the Company without cause. Each executive who participates in the annual Long-Term Incentive Plan equity grant must sign a grant agreement, as well as a non-interference and confidentiality agreement, described above in the “Compensation Discussion and Analysis” section. The non-interference agreement includes both non-compete and non-solicitation covenants.
Annual Incentive Plan
In the event of a change in control, each executive’s annual incentive target award will be prorated for the time period between the plan start date and the effective change in control date. A payment will also be calculated for that time period based on actual performance and compared to the prorated target, with the executive receiving the larger of the two values. Payment of the award will be made by March 15 of the calendar year following the year in which a change in control occurs.
A change in control under the annual incentive plan occurs if any of the following events occur:
A change in ownership or control of Aptiv resulting in any person or group other than Aptiv or a Aptiv employee benefit plan acquiring securities of Aptiv possessing more than 50% of the total combined voting power of Aptiv’s equity securities outstanding after such acquisition;
The majority of the board as of the date of the initial public offering is replaced by persons whose election was not approved by a majority of the incumbent board; or
The sale of all or substantially all of the assets of Aptiv, in one or a series of related transactions, to any person or group other than Aptiv.
If involuntarily terminated without “Cause” as defined below, each executive, including the NEOs, will also be eligible for a prorated portion of his or her annual incentive award, based on actual performance for the full performance period. The period used to determine the prorated award will be the beginning of the performance period to the individual’s termination date.
Long-Term Incentive Plan
An equity award must be outstanding for one year in order to receive any benefit at termination. Awards outstanding for less than one year will be forfeited upon termination. Upon a voluntary resignation from Aptiv (other than for good reason), including retirement, except as described below for Mr. Clark, any time-based RSUs that have not vested will be canceled. Upon a termination without cause, for good reason or due to death or disability, the time-based RSUs will be prorated over the period between the grant date and termination date. Any unvested pro-rata awards will be delivered at the next scheduled vesting date.
Upon a termination without cause, for good reason or due to retirement, death or disability, any outstanding performance-based RSUs will be prorated over the period between the grant date and termination date. The final performance payout will be determined based on actual performance at the end of the performance period and shares will be distributed at the time of the general distribution.
If an executive voluntarily departs (with the exception of the retirement and good reason provisions discussed above) or is terminated for cause, or in the event of any termination prior to the first anniversary of the grant date, all outstanding unvested equity awards will be canceled.
“Cause” is defined in the Long-Term Incentive Plan must sign a grant agreement, and has signed a non-interference and confidentiality agreement, described above in the “Compensation Discussion and Analysis” section. The non-interference agreement includes both non-compete and non-solicitation covenants.
ANNUAL INCENTIVE PLAN In the event of a change in control, each NEO’s annual incentive target award will be prorated for the time period between the plan start date and the effective change in control date. A payment will also be calculated for that time period based on actual performance and compared to the prorated target, with the NEO receiving the larger of the two values. Payment of the award will be made by March 15 of the calendar year following the year in which a change in control occurs. In the event of the death of an NEO or a termination of an NEO’s employment due to disability, such NEO’s annual incentive target award for the year of such event will be pro-rated, subject to further adjustment to reflect individual performance or other business factors. LONG-TERM INCENTIVE PLAN An equity award must be outstanding for one year in order to receive any benefit at termination. Awards outstanding for less than one year will be forfeited upon termination. Upon a voluntary resignation from Aptiv (other than for good reason), including retirement, any time-based RSUs that have not vested will be canceled. Upon a termination without cause, for good reason or due to death or disability, the time-based RSUs will be prorated over the period between the grant date and termination date. Any unvested pro-rata awards generally will be delivered at the next scheduled vesting date. Upon a termination without cause, for good reason or due to retirement, death or disability, any outstanding performance-based RSUs will be prorated over the period between the grant date and termination date. The final performance payout will be determined based on actual performance at the end of the performance period and shares generally will be distributed at the time of the general distribution. For this purpose, “retirement” generally means a voluntary termination of employment after attaining at least age 55 and at least 10 years of service. If an NEO voluntarily departs (with the exception of the retirement and good reason provisions discussed above) or is terminated for cause, or in the event of any termination prior to the first anniversary of the grant date, all outstanding unvested equity awards will be canceled. For purposes of our executive compensation plans and arrangements described in this section, “cause” is generally defined as: | • | | Indictment for a felony or for any other crime that has or could be reasonably expected to have an adverse impact on performance of duties to Aptiv or on the business or reputation of Aptiv; |
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| • | | The NEO being the subject of any order regarding a fraudulent violation of securities laws; |
| • | | Conduct in connection with employment or service that is not taken in good faith and has resulted or could reasonably be expected to result in material injury to the business or reputation of Aptiv; |
| • | | Willful violation of Aptiv’s Code of Ethical Business Conduct or other material policies; |
| • | | Willful neglect in the performance of duties for Aptiv, or willful or repeated failure or refusal to perform these duties; or |
| • | | Material breach of any applicable employment agreement. “Good Reason”
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For purposes of our executive compensation plans and arrangements described in this section, “good reason” is generally defined in the Long-Term Incentive Plan as: | • | | A material diminution in base salary;
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| • | | Potential Payments Upon Termination or Change in Control (continued)
A material diminution in authority, duties or responsibilities from those in effect immediately prior to the change in control; responsibilities; |
| • | | Relocation of the NEO’s principal place of employment by more than 50 miles from the location immediately prior to the change in control;miles; or |
| • | | Any other action or inaction that is a material breach by Aptiv of the agreement under which the NEO provides services to us. |
Upon a qualifying termination within two years after a change in control, or upon a change in control if a replacement award is not provided, outstanding unvested equity awards will vest as follows: | • | | Time-based RSUs will vest in full; and |
| • | | After a determination by the Compensation Committee of the Company’s performance at the time of the change in control, the number of performance-based RSUs that will vest will be equal to the greater of (a) the performance-based RSUs earned through the change in control date, or (b) 100% of the performance-based RSUs granted. A replacement award is an award with respect to the stock of Aptiv or its successor that is at least equal in value to the outstanding award, is a publicly traded security and has no less favorable terms than the outstanding award. A qualifying termination after a change in control includes any termination by Aptiv without cause, or by the NEO for good reason, or due to death or disability.
Change in Control Plan
The Change in Control Plan generally provides for severance benefits in connection with a “qualifying separation” (as defined in the Change in Control Plan to include a termination without “cause” or a resignation for “good reason”) that
occurs in connection with or within two years after a Change in Control (as defined in the Change in Control Plan). Pursuant to the Change in Control Plan, an NEO who incurs a qualifying separation would be entitled to receive generally a lump sum cash payment in an amount equal to the sum of (1) three times base salary in the case of the CEO and two times base salary in the case of an NEO other than the CEO, and (2) in the case of the CEO, three times the higher of the CEO’s target annual cash incentive award opportunity for the year in which the separation occurs or in effect immediately prior to the Change in Control (or in the case of an NEO other than the CEO, two times the higher of the NEO’s target annual cash incentive award opportunity for the year in which the separation occurs or in effect immediately prior to the Change in Control)
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A replacement award is an award with respect to the stock of Aptiv or its successor that is at least equal in value to the outstanding award, relates to a publicly traded security and has no less favorable terms than the outstanding award. A qualifying termination after a change in control includes any termination by Aptiv without cause, or by the NEO for good reason, or due to death or disability. CHANGE IN CONTROL PLAN The Change in Control Plan generally provides for severance benefits in connection with a “qualifying separation” (as defined in the Change in Control Plan to include a termination without “cause” or a resignation for “good reason”) that occurs in connection with or within two years after a change in control (or, in the case of a termination without cause at the request of a party involved in a change in control, after the signing of the transaction agreement and prior to consummation or termination of the transaction). Pursuant to the Change in Control Plan, an NEO who incurs a qualifying separation would be entitled to receive generally a lump sum cash payment in an amount equal to the sum of (1) three times base salary in the case of the CEO and two times base salary in the case of an NEO other than the CEO, using the higher of the base salary at termination and the base salary immediately prior to the change in control, and (2) two times (or, for the CEO, three times) the higher of the NEO’s target annual cash incentive award opportunity for the year in which the separation occurs or in effect immediately prior to the change in control. In addition, an NEO who incurs a qualifying separation is also entitled to receive a lump sum payment representing the sum of 36 monthly COBRA premiums for the CEO and 24 monthly COBRA premiums for NEOs other than the CEO. Severance benefits under the Change in Control Plan are generally subject to the NEO’s execution of a customary release of claims in favor of Aptiv. SEVERANCE PLAN For the eligible NEOs, the Severance Plan generally provides for severance benefits in the event of a “qualifying separation” (as defined in the Severance Plan to include a termination without “cause” or a resignation for “good reason”) of the NEO’s employment. Pursuant to the Severance Plan, an NEO who incurs a qualifying separation would be entitled to receive generally
| | | | | | 62 | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | | |
severance payments equal in the aggregate to a multiple of annual base salary (1.5 times for officers with at least two years of service, and 1 time for all other officers), unless and until the NEO is employed by another employer. The Severance Plan also provides to eligible U.S. employees a COBRA subsidy for a period of up to 18 months following a qualifying separation. Severance benefits under the Severance Plan are generally subject to the NEO’s execution of a customary release of claims in favor of Aptiv. For purposes of our executive compensation plans and arrangements described in this section, a “change in control” generally occurs if any of the following events occur (subject to certain limitations and exceptions as further set forth in the applicable plans and arrangements): | • | | A change in ownership or control of Aptiv resulting in any person or group other than Aptiv or a Aptiv employee benefit plan acquiring securities of Aptiv possessing more than 30% of the total combined voting power of Aptiv’s equity securities outstanding after such acquisition; |
| • | | The majority of the board is replaced by persons whose election was not approved by a majority of the incumbent board; |
| • | | Consummation of a merger or consolidation of Aptiv, other than a merger or consolidation which would result in the voting securities of Aptiv outstanding immediately prior to such merger or consolidation continuing to represent at least 50% of the combined voting power and total fair market value of the resulting entity; or |
| • | | Consummation of a sale of all or substantially all of the assets of Aptiv, in one or a series of related transactions, to any person or group other than Aptiv. |
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TABLE | | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination Scenario | | Name | | Component | | Voluntary
Resignation /
Retirement
(If Eligible)(5)(6) | | | Involuntary
(Not For
Cause) or For
Good Reason | | | Involuntary
(For
Cause) | | | Change in
Control
and
Termination | | | Death /Disability | | Kevin P. Clark | | Cash Severance(1) | | | $ — | | | | $ 5,483,520 | | | | $— | | | | $10,967,040 | | | | $ — | | | | Annual Incentive Plan(2) | | | — | | | | — | | | | — | | | | 2,193,408 | | | | 2,193,408 | | | | Long-Term Incentives—Time-Based Restricted Stock Units(3)(4) | | | — | | | | 1,645,644 | | | | — | | | | 7,016,373 | | | | 1,645,644 | | | | Long-Term Incentives—Performance-Based Restricted Stock Units(3)(4) | | | 7,171,589 | | | | 7,171,589 | | | | — | | | | 14,829,101 | | | | 7,171,589 | | | | Benefits Continuation | | | — | | | | 29,233 | | | | — | | | | 76,035 | | | | — | | | | | Total | | | 7,171,589 | | | | 14,329,986 | | | | — | | | | 35,081,957 | | | | 11,010,641 | | Joseph R. Massaro | | Cash Severance(1) | | | — | | | | 4,303,125 | | | | — | | | | 5,737,500 | | | | — | | | | Annual Incentive Plan(2) | | | — | | | | — | | | | — | | | | 1,593,750 | | | | 1,593,750 | | | | Long-Term Incentives—Time-Based Restricted Stock Units(3)(4) | | | — | | | | 635,666 | | | | — | | | | 2,946,943 | | | | 635,666 | | | | Long-Term Incentives—Performance-Based Restricted Stock Units(3)(4) | | | 1,489,083 | | | | 2,745,970 | | | | — | | | | 6,060,496 | | | | 2,745,970 | | | | Benefits Continuation | | | — | | | | 29,233 | | | | — | | | | 50,690 | | | | — | | | | | Total | | | 1,489,083 | | | | 7,713,994 | | | | — | | | | 16,389,379 | | | | 4,975,386 | | William T. Presley | | Cash Severance(1) | | | — | | | | 1,350,000 | | | | — | | | | 3,600,000 | | | | — | | | | Annual Incentive Plan(2) | | | — | | | | — | | | | — | | | | 900,000 | | | | 900,000 | | | | Long-Term Incentives—Time-Based Restricted Stock Units(3)(4) | | | — | | | | 320,031 | | | | — | | | | 1,632,097 | | | | 320,031 | | | | Long-Term Incentives—Performance-Based Restricted Stock Units(3)(4) | | | 910,927 | | | | 1,438,840 | | | | — | | | | 3,326,997 | | | | 1,438,840 | | | | Benefits Continuation | | | — | | | | 18,475 | | | | — | | | | 30,682 | | | | — | | | | | Total | | | 910,927 | | | | 3,127,346 | | | | — | | | | 9,489,776 | | | | 2,658,871 | | Obed D. Louissaint | | Cash Severance(1) | | | — | | | | 750,000 | | | | — | | | | 3,000,000 | | | | — | | | | Annual Incentive Plan(2) | | | — | | | | — | | | | — | | | | 750,000 | | | | 750,000 | | | | Long-Term Incentives—Time-Based Restricted Stock Units(3)(4) | | | — | | | | — | | | | — | | | | 4,978,563 | | | | — | | | | Long-Term Incentives—Performance-Based Restricted Stock Units(3)(4) | | | — | | | | — | | | | — | | | | 1,371,639 | | | | — | | | | Benefits Continuation | | | — | | | | 27,280 | | | | — | | | | 44,845 | | | | — | | | | | Total | | | — | | | | 777,280 | | | | — | | | | 10,145,047 | | | | 750,000 | | Benjamin Lyon | | Cash Severance(1) | | | — | | | | 800,000 | | | | — | | | | 3,200,000 | | | | — | | | | Annual Incentive Plan(2) | | | — | | | | — | | | | — | | | | 800,000 | | | | 800,000 | | | | Long-Term Incentives—Time-Based Restricted Stock Units(3)(4) | | | — | | | | — | | | | — | | | | 6,980,216 | | | | — | | | | Long-Term Incentives—Performance-Based Restricted Stock Units(3)(4) | | | — | | | | — | | | | — | | | | 1,325,882 | | | | — | | | | Benefits Continuation | | | — | | | | 29,233 | | | | — | | | | 50,690 | | | | — | | | | | Total | | | — | | | | 829,233 | | | | — | | | | 12,356,788 | | | | 800,000 | | Katherine H. Ramundo | | Cash Severance(1) | | | — | | | | 1,162,500 | | | | — | | | | 3,100,000 | | | | — | | | | Annual Incentive Plan(2) | | | — | | | | — | | | | — | | | | 775,000 | | | | 775,000 | | | | Long-Term Incentives—Time-Based Restricted Stock Units(3)(4) | | | — | | | | 935,331 | | | | — | | | | 3,502,759 | | | | 935,331 | | | | Long-Term Incentives—Performance-Based Restricted Stock Units(3)(4) | | | 575,195 | | | | 1,027,743 | | | | — | | | | 2,326,081 | | | | 1,027,743 | | | | Benefits Continuation | | | — | | | | — | | | | — | | | | — | | | | — | | | | | Total | | | 575,195 | | | | 3,125,574 | | | | — | | | | 9,703,840 | | | | 2,738,074 | |
| (1) | In the case of an involuntary not for cause termination or a termination for good reason, Messrs. Clark and Massaro are eligible to receive severance payments equal to 18 months of base salary, plus 1.5 times the value of the annual incentive plan target award, payable in installments. Mr. Presley and Ms. Ramundo are eligible for a severance payment equal to 1.5 times base salary, payable in installments. Messrs. Louissaint and Lyon are eligible for a severance payment equal to 1 times base salary, payable in installments. In the case of a qualifying Change in Control termination, Mr. Clark is eligible to receive a lump sum severance payment representingequal to 3 times base salary, plus 3 times the sumvalue of 36 monthly COBRA premiums for the CEO and 24 monthly COBRA premiums for NEOs other thanannual incentive plan target award. In the CEO. Severance Plan
For the eligible NEOs, the Severance Plan generally provides for severance benefits in the eventcase of a “qualifying separation” (as defined in the Severance Plan to include a termination without “cause” or a resignation for “good reason”) of the NEO’s employment. Pursuant to the Severance Plan, an NEO who incurs a qualifying separation would be entitled to receive generally severance payments equal in the aggregate to a multiple of annual base salary (1.5X for officers with at least two years of service, and 1X for all other officers), unless and until the NEO is employed by another employer. The Severance Plan also provides to eligible U.S. employees a COBRA subsidy for a period of up to 18 months following a qualifying separation.
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Potential Payments Upon Termination or Change in Control (continued)
Potential Payments upon Termination or Change in Control Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination Scenario | | | Name | | Component | | Voluntary
Resignation /
Retirement
(If Eligible)(5)(6) | | | Involuntary
(Not For
Cause) or For
Good Reason | | | Involuntary
(For
Cause) | | | Change in
Control and Termination | | | Death/Disability | | Kevin P. Clark | | Cash Severance(1) | | $ | — | | | $ | 5,483,520 | | | $ | — | | | $ | 10,967,040 | | | $ | — | | | | Annual Incentive Plan(2) | | | 1,425,715 | | | | 1,425,715 | | | | — | | | | 1,425,715 | | | | 1,425,715 | | | | Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | | | — | | | | 2,173,889 | | | | — | | | | 8,173,483 | | | | 2,173,889 | | | | Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | | | 18,987,162 | | | | 18,987,162 | | | | — | | | | 35,931,116 | | | | 18,987,162 | | | | Benefits Continuation | | | — | | | | 22,940 | | | | — | | | | 57,687 | | | | — | | | | Total | | | 20,412,877 | | | | 28,093,226 | | | | — | | | | 56,555,041 | | | | 22,586,766 | | Joseph R. Massaro | | Cash Severance(1) | | | — | | | | 2,805,000 | | | | — | | | | 3,740,000 | | | | — | | | | Annual Incentive Plan(2) | | | 607,750 | | | | 607,750 | | | | — | | | | 607,750 | | | | 607,750 | | | | Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | | | — | | | | 585,784 | | | | — | | | | 2,503,131 | | | | 585,784 | | | | Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | | | 2,690,228 | | | | 5,040,790 | | | | — | | | | 10,512,840 | | | | 5,040,790 | | | | Benefits Continuation | | | — | | | | 13,146 | | | | — | | | | 22,424 | | | | — | | | | Total | | | 3,297,978 | | | | 9,052,470 | | | | — | | | | 17,386,145 | | | | 6,234,324 | | David Paja | | Cash Severance(1) | | | — | | | | 974,498 | | | | — | | | | 2,403,762 | | | | — | | | | Annual Incentive Plan(2) | | | 303,940 | | | | 303,940 | | | | — | | | | 303,940 | | | | 303,940 | | | | Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | | | — | | | | 334,845 | | | | — | | | | 1,454,167 | | | | 334,845 | | | | Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | | | 1,614,163 | | | | 2,906,900 | | | | — | | | | 6,103,435 | | | | 2,906,900 | | | | Benefits Continuation | | | — | | | | — | | | | — | | | | — | | | | — | | | | Total | | | 1,918,103 | | | | 4,520,183 | | | | — | | | | 10,265,304 | | | | 3,545,685 | | David M. Sherbin | | Cash Severance(1) | | | — | | | | 1,771,275 | | | | — | | | | 2,361,700 | | | | — | | | | Annual Incentive Plan(2) | | | 363,578 | | | | 363,578 | | | | — | | | | 363,578 | | | | 363,578 | | | | Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | | | — | | | | 312,957 | | | | — | | | | 1,162,447 | | | | 312,957 | | | | Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | | | 2,735,829 | | | | 2,735,829 | | | | — | | | | 5,132,123 | | | | 2,735,829 | | | | Benefits Continuation | | | — | | | | 22,940 | | | | — | | | | 38,458 | | | | — | | | | Total | | | 3,099,407 | | | | 5,206,579 | | | | — | | | | 9,058,306 | | | | 3,412,364 | | Mariya K. Trickett | | Cash Severance(1) | | | — | | | | 825,000 | | | | — | | | | 2,035,000 | | | | — | | | | Annual Incentive Plan(2) | | | 303,875 | | | | 303,875 | | | | — | | | | 303,875 | | | | 303,875 | | | | Long-Term Incentives — Time-Based Restricted Stock Units(3)(4) | | | — | | | | 1,143,034 | | | | — | | | | 1,995,782 | | | | 1,143,034 | | | | Long-Term Incentives — Performance- Based Restricted Stock Units(3)(4) | | | 1,466,675 | | | | 2,430,560 | | | | — | | | | 4,654,871 | | | | 2,430,560 | | | | Benefits Continuation | | | — | | | | 6,739 | | | | — | | | | 11,506 | | | | — | | | | | Total | | | 1,770,550 | | | | 4,709,208 | | | | — | | | | 9,001,034 | | | | 3,877,469 | |
(1) | In the case of an involuntary not for cause termination or a termination for good reason, Messrs. Clark, Massaro, and Sherbintermination, Messrs. Massaro, Presley, Louissaint and Lyon and Ms. Ramundo are eligible to receive severance payments equal to 18 months of base salary, plus 1.5 times the value of the annual incentive plan target award, payable in installments. Mr. Paja and Ms. Trickett are eligible for a lump sum severance payment equal to 1.5 times base salary, payable in installments. In the case of a qualifying Change in Control termination, Mr. Clark is eligible to receive a severance payment equal 3 times base salary, plus 3 times the value of the annual incentive plan target award. In the case of a qualifying Change in Control termination, Messrs. Massaro, Paja and Sherbin and Ms. Trickett are eligible to receive a severance payment equal 2 times base salary, plus 2 times the value of the annual incentive plan target award.
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(2)
| | | | | | 64 | | POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL | | | In all scenarios except a voluntary termination or an involuntary termination for cause, the NEO would receive a prorated annual incentive award. If the NEO voluntarily terminates employment, he or she must have worked on the last business day of the year in order to receive his or her annual incentive award; if not, the award is forfeited in its entirety. For each NEO, annual incentive award payments are subject to performance assessment and will be paid after the conclusion of the performance period.
(3) | The value shown is based on the market value of the award using a per-share price of $130.29, the closing price of our stock on December 31, 2020.
| (2) | In the case of a Change in Control, each NEO would receive a prorated annual incentive award payment based on the greater of (a) actual performance or (b) target. If the NEO terminates due to death or disability, he or she would receive a prorated annual incentive award based on actual performance. In the case of any other terminations prior to the payment date, the award is forfeited in its entirety. The values shown use target performance. |
| (3) | The value shown is based on the market value of the award using a per-share price of $89.72, the closing price of our stock on December 29, 2023 (the last trading day of fiscal 2023). |
| (4) | In the event of a qualifying termination within two years after a change in control the NEOs’ awards will vest as described under “Potential Payments Upon Termination or Change in Control — Long-Term Incentive Plan”. Also as described under “Potential Payments Upon Termination or Change in Control — Long-Term Incentive Plan”, if at the time of a change in control the NEOs do not receive replacement awards, their awards will vest upon the change in control regardless of whether their employment is terminated. The performance-based RSUs included represent a 100% payout of each award. |
(5) | In the event of a voluntary termination on December 31, 2020, each NEO would receive the value of their 2018 performance-based RSUs.
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(6) | As of December 31, 2020, Mr. Clark and Mr. Sherbin are the only NEOs eligible to retire.
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Potential Payments Upon Termination or Change in Control (continued)
As required by Section 409A of the Internal Revenue Code, all NEOs who have elected to participateControl—Long-Term Incentive Plan”. Also as described under “Potential Payments Upon Termination or Change in the SRESP must wait six months to receive a payment under the plan by reason of termination of employment. Payments for departure on December 31, 2020 would be made within 60 days after July 1, 2021. All amounts are estimates only, and actual amounts will vary depending upon the facts and circumstances applicableControl—Long-Term Incentive Plan”, if at the time of a change in control the triggering event.
CEO Pay Ratio
AptivNEOs do not receive replacement awards, their awards will vest upon the change in control regardless of whether their employment is terminated. The performance-based RSUs included represent a global company employing approximately 151,000 employees in 44 countries, as100% payout of each award.
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| (5) | In the event of a voluntary termination on December 29, 2023 (the last business day of fiscal 2023), each NEO would receive the value of their 2021 performance-based RSUs. |
| (6) | As of December 31, 2020. We refer2023, Mr. Clark is the only NEO eligible to the employee who received the median of the annual cash compensation of all of our employees (other than Mr. Clark) as the “Median Employee.” retire. |
As required by Section 409A of the Code, all NEOs who have elected to participate in the DCP generally must wait six months to receive a payment under the plan by reason of termination of employment. Payments for departure on December 31, 2023 would generally be made within 60 days after July 1, 2024. All amounts are estimates only, and actual amounts will vary depending upon the facts and circumstances applicable at the time of the triggering event.
| | |
| | CEO Pay Ratio |
We are required by the Dodd-Frank Wall Street Reform and Consumer Protection Act and SEC rules to disclose the ratio of the annual total compensation of Mr. Clark, our Chairman and Chief Executive Officer, to that of an employee whose annual compensation is at the median of all our employees (the “Median Employee”). Due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described below. As permitted under SEC rules, we are using the same Median Employee identified for purposes of our fiscal 2022 CEO pay ratio, as we believe there have been no changes to our employee population or employee compensation arrangements that would significantly impact our pay ratio disclosure. The Median Employee was identified by using “total annual base pay” as reflected in our enterprise-wide human resources information system, as of October 31, 2022, for all of our employees (including full-time, part-time, and temporary employees of Aptiv and its consolidated subsidiaries). The employees considered did not include any independent contractors or “leased” workers, which we refer to as our “contingent workforce” below. We did not use any statistical sampling or cost-of-living adjustments for purposes of this pay ratio disclosure. The total annual base pay for our salaried employees reflects base salary paid on an annual basis, and for hourly employees, the annual rate is determined using their hourly rate and standard work hours. This methodology was chosen because we believe it is a compensation measure that can be applied consistently across the globe and provides an accurate depiction of total earnings. Because there was more than one Median Employee identified using this methodology, we selected an individual who we determined to be reasonably representative of our Median Employee and who did not have any unusual or nonstandard compensation items. Aptiv is a global company employing approximately 154,000 employees in 50 countries as of December 31, 2023, with approximately 31,000 salaried employees and 123,000 hourly employees. In addition, we maintain a contingent workforce of approximately 47,000 to accommodate fluctuations in customer demand. 53% of our workforce is located in North America, where our largest presence is in Mexico. 80% of our North American workforce is part of our global manufacturing workforce. Market levels of pay and wage rates are generally lower in countries in which Aptiv has manufacturing facilities, in line with our regional service model that enables us to efficiently and effectively serve our global customers from best cost countries. In these countries, Aptiv provides market competitive compensation, which, in many cases, is dictated by local union agreements. The Median Employee is a full-time hourly employee located in Mexico, where competitive wages vary greatly from standard U.S. hourly rates. After identifying the Median Employee, identified for purposes of our fiscal 2018 CEO pay ratio, as we believe there have been no changes to our employee population or employee compensation arrangements that would significantly impact our pay ratio disclosure. We note that, due to our permitted use of reasonable estimates and assumptions in preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this ratio disclosure is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions described below. The Median Employee was identified by using a consistently applied compensation measure of cash compensation, as further described below, for the period beginning on January 1, 2018, and ending on December 31, 2018. All full-time, part-time, and temporary employees of Aptiv and its consolidated subsidiaries as of October 31, 2018, were included. The employees considered did not include any
independent contractors or “leased” workers. The compensation for any employee who was hired after January 1, 2018 (other than temporary employees) was annualized for 2018. We did not use any statistical sampling or cost-of-living adjustments for purposes of this pay ratio disclosure.
The cash compensation used in the analysis consisted of base salary or regular wages, premium pay (including but not limited to overtime, holiday pay, and shift differential), and incentive pay. This definition of cash compensation was chosen because we believe it is a compensation measure that provides an accurate depiction of total earnings, and can be applied consistently across the globe.
After determining that the same Median Employee could be used for this year’s disclosure, we calculated annual total compensation for the Median Employee using the same methodology as compensation reported in the 2023 Summary Compensation Table for the CEO. The Median Employee’s annual total compensation is $11,647. When compared to our CEO’s annual total compensation of $18,000,136, the ratio of the total annual compensation of our CEO to the total annual compensation of our Median Employee was approximately 1,545:1.
We believe that there are a number of reasons why our pay ratio is not comparable to that of other companies, including that other companies may have a median employee that works in the U.S., may outsource manufacturing, may have different types of workforces, may operate in different countries, or may utilize different compensation practices. Further, in calculating their own pay ratios, other companies may utilize methodologies, exclusions, estimates, and assumptions that substantially differ from Aptiv’s calculation methodology.
| | | | | | | | | | | 66 | | 2023 PAY VERSUS PERFORMANCE TABLE | | |
| | | | | 2023 Pay Versus Performance Table |
In accordance with SEC rules, the following table sets forth information with respect to how the compensation of our NEOs aligns with Company performance. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of Initial Fixed $100 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $18,000,136 | | | | $16,072,614 | | | | $9,691,458 | | | | $8,388,279 | | | | $ 94.70 | | | | $296.83 | | | | $2,938 | | | | $1,376 | | | | | 16,206,621 | | | | (3,338,551 | ) | | | 5,880,152 | | | | 3,091,630 | | | | 98.30 | | | | 183.92 | | | | 594 | | | | 967 | | | | | 14,744,780 | | | | 20,823,184 | | | | 4,899,559 | | | | 6,122,511 | | | | 174.11 | | | | 433.35 | | | | 590 | | | | 868 | | | | | 31,267,329 | | | | 32,047,839 | | | | 6,747,057 | | | | 6,881,294 | | | | 137.52 | | | | 291.17 | | | | 1,804 | | | | 646 | |
| (1) | NEOs included in the above compensation columns reflect the following: |
| | | | | | | Principal Executive Officer (“PEO”) | | | | | Kevin P. Clark | | Joseph R. Massaro, William T. Presley, Obed D. Louissaint, Benjamin Lyon, Katherine H. Ramundo | | | Kevin P. Clark | | Joseph R. Massaro, Benjamin Lyon, William T. Presley, Sophia M. Velastegui | | | Kevin P. Clark | | Joseph R. Massaro, William T. Presley, Katherine H. Ramundo, Mariya K. Trickett | | | Kevin P. Clark | | Joseph R. Massaro, David Paja, David M. Sherbin, Mariya K. Trickett |
| (2) | Fair value or change in fair value, as applicable, of equity awards in the “Actually Paid” columns was determined by reference to (1) for RSU awards (excluding TSR awards and other performance-based awards), the closing price on each applicableyear-end date or, in the case of vesting dates, the actual vesting date closing price, (2) for performance-based RSU awards (excluding TSR awards), the same valuation methodology as RSU awards above except thatyear-end award values are adjusted by the projected probability of achievement of each award as of each such date, and (3) forTSR-based awards, the fair value calculated by a Monte Carlo simulation as of the applicableyear-end date. |
| (3) | For the portion of “Actually Paid” compensation that is based onyear-end stock prices, the following prices were used: 2023: $89.72 (4% reduction from prior year), 2022: $93.13 (44% reduction from prior year), 2021: $164.95 (27% increase from prior year), 2020: $130.29 (38% increase from prior year). |
| (4) | “Compensation Actually Paid” to our PEO and the average “Compensation Actually Paid” tonon-PEO NEOs reflects adjustments from total compensation reported in the 2020 Summary Compensation Table (see reconciliation below) |
| | | | | | | | | | | | | | | | | | | | | Total Reported in 2023 Summary Compensation Table (SCT) | | | $ 18,000,136 | | | | $ 9,691,458 | | | + | | Value of Stock Awards reported in SCT | | | $0 | | | | $0 | | | + | | Year-end value of awards granted in fiscal year that are unvested and outstanding | | | ($14,032,595 | ) | | | ($7,322,658 | ) | | + | | Change in fair value of prior year awards that are unvested and outstanding | | | $0 | | | | $0 | | | + | | Fair market value of awards granted in fiscal year 2023 that vested in fiscal year 2023 | | | $13,237,937 | | | | $6,297,217 | | | + | | Change in fair value (from prior year-end) of prior year awards that vested in fiscal year 2023 | | | ($4,101,605 | ) | | | ($599,594 | ) | | + | | Prior year-end fair value of awards that failed to vest in fiscal year 2023 | | | $2,968,741 | | | | $321,856 | | | | | | Total Adjustments | | | ($1,927,522 | ) | | | ($1,303,179 | ) | Compensation Actually Paid for Fiscal Year 2023 | | | | | | | | |
| (5) | Peer group TSR reflects the Company’s 2023 Automotive Peer Group (“Russell 3000 Automobiles and Parts Sector”) as reflected in our 2023 Annual Report onForm 10-K pursuant to Item 201(e) of RegulationS-K. Each year reflects what the cumulative value of a $100 investment would be, including reinvestment of dividends. Peer group cumulative TSR results for the CEO. The Median Employee’s annual total compensation is $5,906. When comparedyears prior to our CEO’s annual total compensation of $31,267,329 (which is the total compensation reported for him2023 in the 2020 Summary Compensation Table for 2020),table above reflect updated values (based on a methodology change from each constituent’s TSR being weighted in the ratioprior year’s disclosure according to market capitalization in the base year to the current approach, reflecting the index return and its weighting methodology). |
| | | | | | | 2023 PAY VERSUS PERFORMANCE TABLE | | 67 |
| (6) | The year ended December 31, 2023 includes a $2.1 billion deferred tax benefit recognized from the Company’s initiation of the total annual compensationchanges to its corporate entity structure, including intercompany transfers of intellectual property and other related transactions, as further discussed in Note 14 of our CEO to the total annual compensation of our Median Employee was approximately 5,294:1.As noted previously in this Proxy Statement, the 2020 Summary Compensation Table includes required accounting adjustments related to the 2019 and 2020 stock awards that distort CEO total compensation. When looking at 2020 CEO compensation in the absence of these required accounting adjustments, the CEO’s annual total compensation would have been $13,460,707 and the pay ratio would be 2,279:1, in line with prior years’ ratios. See “Supplemental Compensation Information and Reconciliation” for more explanation of the nature and scope of the accounting impacts2023 Annual Report on CEO compensation.
Form10-K.
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
|
REPORT OF THE AUDIT COMMITTEE
The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Exchange Act. The Audit Committee currently consists of Ms. Cooper (Chair), Mr. Hooley, Mr. Ortberg, Dr. Parris and Ms. Pinczuk. All of the members of the Audit Committee are independent directors under the NYSE listing standards and the rules of the SEC. In addition, the Board has determined that all members of the Audit Committee are financially literate under the NYSE listing standards and that each of Ms. Cooper, Mr. Hooley and Mr. Ortberg qualify as an “audit committee financial expert” under the rules of the SEC.
The Audit Committee operates under a written charter adopted by the Board, which is evaluated annually. The charter of the Audit Committee is available on our website at aptiv.com by clicking on the tab “Investors”, then the heading “Governance” and then the caption “Governance Documents”.
The Audit Committee selects, evaluates and, where deemed appropriate, replaces Aptiv’s independent registered public accounting firm. As part of the evaluation of the independent registered public accounting firm, the Audit Committee considers the quality and efficiency of the services provided by the independent registered public accounting firm, the independent registered public accounting firm’s global capabilities and independent registered public accounting firm’s technical expertise and knowledge of the Company’s global operations and industry. In connection with the mandated rotation of the independent registered public accounting firm’s lead engagement partner, the Audit Committee is directly involved in the selection of the new lead engagement partner. The Audit Committee also pre-approves all audit services, engagement fees and terms, and all permitted non-audit engagements, except as otherwise prohibited under applicable law.
Management is responsible for Aptiv’s internal controls and the financial reporting process. Aptiv’s independent registered public accounting firm is responsible for performing an audit
of Aptiv’s consolidated financial statements and the effectiveness of internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). The Audit Committee’s responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has reviewed Aptiv’s audited financial statements for the fiscal year ended December 31, 2020 and has met and held discussions with management and Ernst & Young LLP (“EY”),includes a
pre-tax gain of $1.4 billion for the Company’s independent registered public accounting firm. Management represented to the Audit Committee that Aptiv’s consolidated financial statements for fiscal year 2020 were prepared in accordance with accounting principles generally accepted in the United States of America. The discussions between the Audit Committee and EY included the matters required to be discussed by Rules on Auditing Standard No. 1301, Communications with Audit Committees, and Related and Transitional Amendments to PCAOB Standards.The Audit Committee received the written disclosures and letter from EY required by the applicable requirementscompletion of the PCAOB regarding EY’s communications with the Audit Committee concerning its independence, and the Audit CommitteeMotional autonomous driving joint venture, as further discussed with EY the accounting firm’s independence.
Based upon the Audit Committee’s discussions with management and EY and the Audit Committee’s reviewin Note 20 of the representation of management and the report of EY to the Audit Committee, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in Aptiv’sour 2022 Annual Report on Form10-K
10-K. |
| (7) | Adjusted NI was selected by the Compensation Committee as the Company-Selected Measure (“CSM”). It is anon-GAAP measure which represents net income attributable to Aptiv before restructuring and other special items, including the tax impact thereon.Appendix A contains a reconciliation of Adjusted NI to U.S. GAAP Net Income. |
ANALYSIS OF THE INFORMATION PRESENTED IN THE PAY VERSUS PERFORMANCE TABLE In accordance with SEC rules, the following charts describe the relationship between the “Compensation Actually Paid” to our NEOs and the Company’s financial performance as measured by our cumulative TSR, GAAP NI and our CSM, Adjusted NI. As more fully described under “Compensation Governance and Alignment with Shareholders” in our “Compensation Discussion and Analysis” section, our focus onand corporate governance aims to help ensure alignment with the interests of our shareholders, as highlighted below. Aligning executive compensation to Company financial and stock price performance is one of the key design principles of our executive compensation program. This is evidenced by the program design elements, including: 91% of 2023 total target annual compensation for the CEO is at risk and 78% is granted in equity, while, on average, 83% of 2023 total target annual compensation for the other NEOs is at risk and 65% is granted in equity. We use a structured goal-setting process for performance incentives, with multiple levels of review including the Compensation Committee and its consultant, and senior management. NEOs’ annual incentives are typically based on achievement of multi-faceted financial and strategic annual performance goals. 60% of the NEOs’ long-term incentive compensation consists of performance-based RSUs, which deliver value based on achievement of multi-year financial and relative TSR goals. We review and analyzeour pay-for-performance alignment on Compensation Actually Paid Versus Total Shareholder Return(1) | (1) | TSR in the above chart, in the case of both the Company and our Automotive Peer Group as noted in footnote 5 of the above Pay for Performance Table, reflects the fiscalcumulative return of $100 as if invested on December 31, 2019, including reinvestment of any dividends. |
| | | | | | 68 | | 2023 PAY VERSUS PERFORMANCE TABLE | | |
Compensation Actually Paid Versus Net Income(1) | (1) | The year ended December 31, 2023 includes a $2.1 billion deferred tax benefit recognized from the Company’s initiation of changes to its corporate entity structure, including intercompany transfers of intellectual property and other related transactions, as further discussed in Note 14 of our 2023 Annual Report on Form 10-K. The year ended December 31, 2020 filed withincludes apre-tax gain of $1.4 billion for the SEC.The Audit Committee also considered whether non-audit services provided by EY during 2020 were compatible with maintaining their independence and concluded that such non-audit services did not affect their independence.
Respectfully submitted,
Nancy E. Cooper, Chair
Joseph L. Hooley
Robert K. Ortberg
Colin J. Parris
Ana G. Pinczuk
completion of the Motional autonomous driving joint venture, as further discussed in Note 20 of our 2022 Annual Report on Form10-K. |
Compensation Actually Paid versus Adjusted Net Income(1) | (1) | Adjusted Net Income was selected by the Compensation Committee as the Company-Selected Measure. It is anon-GAAP measure which represents net income attributable to Aptiv before restructuring and other special items, including the tax impact thereon.Appendix A contains a reconciliation of Adjusted Net Income to U.S. GAAP Net Income. |
| | | | | | | 2023 PAY VERSUS PERFORMANCE TABLE | | 69 |
MOST IMPORTANT MEASURES IN LINKING COMPENSATION WITH PERFORMANCE IN FISCAL YEAR 2023 In the Company’s assessment, the following table lists the most important financial performance measures used by the Company to link compensation actually paid, as determined in accordance with SEC rules, to the NEOs to Company performance for 2023. The way these measures, together with certain other performance measures, determine the amounts of incentive compensation paid to our NEOs is described in the “Compensation Discussion and Analysis” section. | Most Important Performance Measures for 2023(1) | | Adjusted Net Income | | Cash Flow Before Financing | | Growth Over Market | | Return on Net Assets | | Relative Total Shareholder Return |
| (1) | In addition to the performance measures listed in the table above, the Company uses a Strategic Results Metric in the Annual Incentive Plan. The Strategic Resultsour executives on the Company’s strategic priorities. The Strategic Results Metric is more fully described under “2023 Annual Compensation Determination” in our “Compensation Discussion and Analysis” section. |
| | | | | | | 70 | | REPORT OF THE AUDIT COMMITTEE | | |
2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
| | |
| | Report of the Audit Committee |
The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed under the Securities Act of 1933 or the Exchange Act. The Audit Committee currently consists of Ms. Cooper (Chair), Mr. Hooley, Mr. Ortberg and Dr. Parris. All of the members of the Audit Committee are independent directors under the NYSE listing standards and the rules of the SEC. In addition, the Board has determined that all members of the Audit Committee are financially literate under the NYSE listing standards and that each of Ms. Cooper, Mr. Hooley and Mr. Ortberg qualify as an “audit committee financial expert” under the rules of the SEC. The Audit Committee operates under a written charter adopted by the Board, which is evaluated annually. The charter of the Audit Committee is available on our website at aptiv.com by clicking on the tab “Investors”, then the heading “Governance” and then the caption “Governance Documents”. The Audit Committee selects, evaluates and, where deemed appropriate, replaces Aptiv’s independent registered public accounting firm. As part of the evaluation of the independent registered public accounting firm, the Audit Committee considers the quality and efficiency of the services provided by the independent registered public accounting firm, the independent registered public accounting firm’s global capabilities and independent registered public accounting firm’s technical expertise and knowledge of the Company’s global operations and industry. In connection with the mandated rotation of the independent registered public accounting firm’s lead engagement partner, the Audit Committee is directly involved in the selection of the new lead engagement partner. The Audit Committee also pre-approves all audit services, engagement fees and terms, and all permitted non-audit engagements, except as otherwise prohibited under applicable law. Management is responsible for Aptiv’s internal controls and the financial reporting process. Aptiv’s independent registered public accounting firm is responsible for performing an audit of Aptiv’s consolidated financial statements and the effectiveness of internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”). The Audit Committee’s responsibility is to monitor and oversee these processes. In this context, the Audit Committee has reviewed Aptiv’s audited financial statements for the fiscal year ended December 31, 2023 and has met and held discussions with management and Ernst & Young LLP (“EY”), the Company’s independent registered public accounting firm. Management represented to the Audit Committee that Aptiv’s consolidated financial statements for fiscal year 2023 were prepared in accordance with accounting principles generally accepted in the United States of America. The discussions between the Audit Committee and EY included the matters required to be discussed by Rules on Auditing Standard No. 1301, Communications with Audit Committees, and Related and Transitional Amendments to PCAOB Standards. The Audit Committee received the written disclosures and letter from EY required by the applicable requirements of the PCAOB regarding EY’s communications with the Audit Committee concerning its independence, and the Audit Committee discussed with EY the accounting firm’s independence. Based upon the Audit Committee’s discussions with management and EY and the Audit Committee’s review of the representation of management and the report of EY to the Audit Committee, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in Aptiv’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC. The Audit Committee also considered whether non-audit services provided by EY during 2023 were compatible with maintaining their independence and concluded that such non-audit services did not affect their independence. Respectfully submitted, Nancy E. Cooper, Chair Joseph L. Hooley Robert K. Ortberg Colin J. Parris
| | | | | | | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S FEES | | 71 |
| | | INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM’S FEES
| | Independent Registered Public Accounting Firm’s Fees |
The Audit Committee has a policy concerning the approval of audit and non-audit services to be provided by Aptiv’s independent registered public accounting firm. The policy requires that the Audit Committee pre-approve all audit services and all permitted non-audit services to be provided by Aptiv’s independent registered public accounting firm. The policy requires that the Audit Committee pre-approve all audit services and all permitted non-audit services (including fees and terms thereof), except as otherwise prohibited pursuant to the Exchange Act. These services may include audit services, audit-related services, tax services and other services. For each proposed service, the Audit Committee reviews a description of the service and sufficient information to confirm the determination that the provision of such service will not impair the independent registered public accounting firm’s independence. The Chair of the Audit Committee is authorized to grant such pre-approvals in the event there is a need for such approvals prior to the next full Audit Committee meeting, provided all such pre-approvals are then reported to the full Audit Committee at its next scheduled meeting. During fiscal years 2023 and 2022, EY provided various audit, audit-related, tax and other services to Aptiv. The Audit Committee pre-approved all audit services, audit-related, tax and other services provided by EY in 2023 and 2022. The following table presents fees for professional services charged by EY by type and amount for fiscal years 2023 and 2022: | | | | | | | | | ($ in thousands) | | 2023 | | | 2022 | | Audit fees(1) | | $ | 16,200 | | | $ | 12,400 | | | | | Audit-related fees(2) | | | 1,300 | | | | 1,700 | | Total audit and audit related fees | | | 17,500 | | | | 14,100 | | | | | Tax fees(3) | | | 9,800 | | | | 3,600 | | | | | All other fees | | | — | | | | — | | Total fees | | $ | 27,300 | | | $ | 17,700 | |
| (1) | Audit Fees— Audit fees billed or to be billed are related to EY’s audit of our annual financial statements, including the audit of internal control over financial reporting, timely interim reviews of the quarterly financial statements, statutory or other required audit services, audit services performed in connection with registration statements and issuance of comfort letters and consents. |
| (2) | Audit-Related Fees— Audit-related services consist primarily of employee benefit plan audits, audit services not required by statute or regulation, ESG assurance related procedures, agreed-upon procedures required to comply with financial accounting or regulatory reporting matters, due diligence in connection with acquisitions and divestitures, and other attest services. |
| (3) | Tax Fees— Tax fees primarily represent fees for tax planning services and tax-related compliance. |
| | | | | | 72 | | APPOINTMENT OF AND PAYMENT TO AUDITORS | | |
| | |
| | Appointment of and Payment to Auditors |
(RESOLUTION 11) The Audit Committee of our Board has appointed EY as our auditors. Shareholders are requested to reappoint EY as the Company’s auditors for the period ending with the Annual Meeting of the Company to be held in 2025. Shareholders are also requested to authorize the directors to determine the fees to be paid to the auditors. Shareholders are also requested to ratify the appointment of EY as the Company’s independent registered public accounting firm for purposes of United States securities law reporting for the fiscal year ending December 31, 2024. A representative of EY will be present at the Annual Meeting with the opportunity to make a statement if the firm desires and to respond to appropriate questions. | | |  | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RE-APPOINTMENT OF ERNST & YOUNG LLP AS OUR AUDITORS, TO RATIFY THEIR APPOINTMENT AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND TO AUTHORIZE THE DIRECTORS TO DETERMINE THE FEES TO BE PAID TO THE AUDITORS. |
| | |
| | Approval of the Aptiv PLC 2024 Long-Term Incentive Plan |
(Resolution 12) | | We are asking shareholders to approve the Aptiv PLC 2024 Long-Term Incentive Plan (the “2024 LTIP”). |
Introduction Our Board is recommending that the Company’s shareholders vote in favor of the 2024 LTIP, which will succeed the Aptiv PLC Long-Term Incentive Plan (the “2015 LTIP”). If the 2024 LTIP is approved by our shareholders, no further grants will be made under the 2015 LTIP. However, outstanding awards under the 2015 LTIP will generally continue in effect in accordance with their terms. The 2024 LTIP will continue to afford the Compensation Committee the ability to design long-term incentive awards that are responsive to the Company’s needs and includes authorization for a variety of awards designed to advance the interests and long-term success of the Company by encouraging stock ownership among 2024 LTIP participants. Shareholder approval of the 2024 LTIP would constitute approval of 9,880,000 ordinary shares, par value $0.01 par per share, of the Company (“Ordinary Shares”) to be available for awards under the 2024 LTIP, as described below and in the 2024 LTIP, with such amount subject to adjustment, including under the 2024 LTIP’s share counting rules. If the 2024 LTIP is approved by our
| | | | | | | APPROVAL OF THE APTIV PLC 2024 LONG-TERM INCENTIVE PLAN | | 73 |
shareholders, it will be effective as of the day of the Annual Meeting. If the 2024 LTIP is not approved by our shareholders, no awards will be made under the 2024 LTIP, and the 2015 LTIP will remain in effect until it terminates in accordance with its terms. The actual text of the 2024 LTIP is attached to this Proxy Statement as Appendix B. The following description of the 2024 LTIP is only a summary of its material terms and provisions and is qualified by reference to the actual text as set forth in Appendix B. Why We Believe You Should Vote for this Proposal Importance of Equity Awards. Equity awards are an essential component of our compensation program for key employees, as they link compensation with long-term shareholder value creation and reward participants based on the Company’s performance. As discussed in further detail in the “Compensation Discussion & Analysis,” equity compensation represents a significant portion of the compensation package for our Chief Executive Officer and other NEOs. Because our equity awards generally vest over multiple years, the value ultimately realized from these awards depends on the long-term value of our Ordinary Shares. Our equity compensation program helps us to attract and retain talent in a highly competitive market, targeting individuals who are motivated by pay-for-performance. Some of the key features of the 2024 LTIP that reflect our commitment to effective management of equity and incentive compensation are set forth below in this proposal. Key Plan Features. Below are certain highlights of the 2024 LTIP. These features of the 2024 LTIP are designed to reinforce alignment between equity compensation arrangements awarded pursuant to the 2024 LTIP and shareholders’ interests, consistent with sound corporate governance practices. | | | | | Status | | | The 2024 LTIP generally prohibits granting discounted stock options and SARs. | | ✓ | | | The 2024 LTIP does not permit liberal share counting. | | ✓ | | | The 2024 LTIP prohibits stock option or SAR repricing. | | ✓ | | | The 2024 LTIP has no evergreen features. | | ✓ | | | The 2024 LTIP does notprovide forany tax gross-ups for excise taxes payable in connection with a change in control. | | ✓ | | | The 2024 LTIP includes forfeiture and clawback provisions. | | ✓ | | | The 2024 LTIP is administered by our independent Compensation Committee | | ✓ | | | The 2024 LTIP includes anon-liberal definition of “change in control” | | ✓ |
Share Usage and Overhang Under 2015 LTIP and 2024 LTIP. As of December 29, 2023, 11,395,027 Ordinary Shares remained available for issuance under the 2015 LTIP. However, under the terms of the 2015 LTIP, we will not be able to make grants under the 2015 LTIP after April 23, 2025. The following includes aggregated information regarding our view of the overhang and dilution associated with the 2015 LTIP, and the potential dilution associated with the 2024 LTIP. This information is as of December 29, 2023. As of that date, there were approximately 279,033,365 Ordinary Shares outstanding. Also as of that date: | • | | 2,150,942 shares (approximately 0.77% of our outstanding Ordinary Shares) were subject to outstanding full value awards under the 2015 LTIP (time-based and performance-based restricted stock units (“RSUs”)); |
| • | | no stock options were outstanding under the 2015 LTIP; and |
| • | | 11,395,027 shares (approximately 4.10% of our outstanding Ordinary Shares) were available for future awards under the 2015 LTIP. As a result, we view the 2015 Plan as representing an overhang percentage (in other words, potential dilution of the holders of Ordinary Shares) of approximately 4.89% as of December 29, 2023. |
As noted above, no further grants will be made under the 2015 LTIP upon the effective date of the 2024 LTIP. Further, any shares subject to awards that we may grant under the 2015 LTIP after December 29, 2023 and prior to the effective date of the 2024 LTIP
| | | | | | 74 | | APPROVAL OF THE APTIV PLC 2024 LONG-TERM INCENTIVE PLAN | | |
will reduce the number of shares initially available under the 2024 LTIP on a one-for-one basis. The proposed 9,880,000 Ordinary Shares available for awards under the 2024 LTIP represent approximately 3.54% of our outstanding Ordinary Shares as of December 29, 2023, a percentage that reflects the simple dilution of holders of Ordinary Shares that could occur if the 2024 LTIP is approved. Factoring both these shares and the 2,150,942 Ordinary Shares subject to outstanding awards under the 2015 LTIP, the approximate total overhang under the 2015 LTIP and the 2024 LTIP is 12,030,942 Ordinary Shares (or approximately 4.31% of the Ordinary Shares outstanding as of December 29, 2023). Based on the closing price on New York Stock Exchange for our Ordinary Shares on December 29, 2023 of $89.72 per share, the aggregate market value as of December 29, 2023 of the 9,880,000 Ordinary Shares requested under the 2024 LTIP was $886,433,600. Historic Share Usage and Grant Practices. Our historic equity usage has been effective in recruiting and retaining superior talent and aligning management incentives with Company performance. Our equity usage is reasonable in comparison with the broader market and consistent with the peer companies listed in the “Compensation Discussion and Analysis.” As part of our assessment of our grant practices, we regularly measure our share usage and the potential dilutive effects of future equity grants through the use of “burn rate” and “overhang.” Burn Rate. Burn rate is calculated as the number of shares underlying full-value awards and stock options granted, expressed as a percent of the Company’s total number of outstanding shares. Value-adjusted burn rate is calculated using a Black-Scholes option valuation model. As we have not granted stock options, the value-adjusted burn rate metric provides a more comparable view of our share usage against that of our peers, as many of our peers grant stock options in addition to full-value awards. Over the past three completed fiscal years (2021, 2022 and 2023), our annual shares granted (which shares were only granted under full-value awards) as a percentage of shares outstanding has been 0.24%, 0.35% and 0.56%, respectively. Our three-year average burn rate is 0.38%, and our value-adjusted burn rate for 2023 was 0.56%. In determining the number of shares to request for approval under the 2024 LTIP, our management worked with the Compensation Committee and our compensation consultant to evaluate a number of factors, including our recent share usage and criteria expected to be utilized by proxy advisory firms in evaluating our proposal for the 2024 LTIP. If the 2024 LTIP is approved, we intend to utilize the shares authorized under the 2024 LTIP to continue our practice of incentivizing key individuals through equity grants. We currently anticipate that the shares requested in connection with the approval of the 2024 LTIP will last for about four to six years. However, the actual duration of the proposed share reserve will depend on currently unknown factors, such as changes in participation, future grant practices, competitive market practices, acquisitions and divestitures, forfeiture rates, and the Company’s share price. Thus, the share reserve could last for a different period of time if actual practice does not match our current expectations or our share price changes materially. As noted below, our Compensation Committee retains full discretion under the 2024 LTIP to determine the number and amount of awards to be granted under the 2024 LTIP, subject to the terms of the 2024 LTIP, and future benefits that may be received by participants under the 2024 LTIP are not determinable at this time. We believe that we have demonstrated a commitment to sound equity compensation practices in recent years. We recognize that equity compensation awards dilute shareholders’ equity, so we have carefully managed our equity incentive compensation. Our equity compensation practices are intended to be competitive and consistent with market practices, and we believe our historical share usage has been responsible and mindful of shareholder interests, as described above. In evaluating this proposal, shareholders should consider all of the information in this proposal.
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Key Plan Features. The 2024 LTIP authorizes grants of a variety of equity awards, including RSUs, restricted stock, non-qualified stock options (“NQSOs”), incentive stock options (“ISOs”), stock appreciation rights (“SARs”) and other share-based awards. We use these awards to attract, motivate, retain and reward our eligible employees, directors and consultants and other advisors. The 2024 LTIP includes features that protect our shareholders’ interests and promote effective corporate governance, including: | • | | No Discounted Stock Options or SARs. The 2024 LTIP expressly prohibits us from granting stock options or SARs with an exercise price that is less than the fair market value of our Ordinary Shares on the date of grant, except with respect to certain Replacement Awards (as defined below). Under the existing 2015 LTIP, we have never granted a discounted stock option or SAR. |
| • | | No Liberal Share Counting. The 2024 LTIP does not permit the re-use of any shares that are withheld or delivered to satisfy the exercise price of a stock option or SAR or to satisfy tax withholding requirements. |
| • | | No Repricing of Stock Options or SARs. The 2024 LTIP expressly prohibits the direct or indirect repricing of stock options or SARs without shareholder approval. |
| • | | No Evergreen Features. The maximum number of shares that can be issued from the 2024 LTIP is fixed and cannot be increased without shareholder approval, subject to the share counting provisions of the 2024 LTIP. |
| • | | No Gross-Ups for Excise Taxes Paid by Participant. The 2024 LTIP does not provide for the reimbursement of participants for any excise taxes paid by the participant in connection with a payment or a distribution following a change in control. |
| • | | Awards Are Subject to Forfeiture/Clawback. The 2024 LTIP provides that awards are subject to recoupment under certain circumstances, including as required pursuant to applicable laws, rules, regulations or stock exchange listing standards. |
| • | | Independent Committee Administration. The 2024 LTIP will continue to be administered by the Compensation Committee, which is made up entirely of independent directors. |
Summary of the Material Provisions of the 2024 LTIP The following is a brief description of the material features of the 2024 LTIP. The full text of the 2024 LTIP is set forth in Appendix B to this Proxy Statement. The description set forth below is qualified in its entirety by reference to Appendix B. Purpose. The purpose of the 2024 LTIP is to permit award grants to eligible employees, consultants, non-employee directors, and other advisors of the Company and its affiliates, and to provide such persons incentives and rewards for performance and/or service. Plan Term. No awards may be granted under the 2024 LTIP on or after the tenth anniversary of the date our shareholders approve the 2024 LTIP, but all awards granted prior to such date will continue in effect thereafter subject to their terms and the terms of the 2024 LTIP. Authorized Shares. Subject to the adjustments and share counting provisions of the 2024 LTIP, the total number of shares available for issuance or transfer under the 2024 LTIP will not exceed the aggregate of 9,880,000 shares, minus any shares subject to awards granted under the 2015 LTIP after December 31, 2023 and prior to the effective date of the 2024 LTIP. Any shares delivered pursuant to a 2024 LTIP award may consist, in whole or in part, of authorized and unissued shares or shares reacquired by the Company. Share Counting. Subject to the terms of the 2024 LTIP, to the extent a 2024 LTIP award expires or is canceled, forfeited, settled in cash or unearned, or otherwise terminates without the delivery of shares, the shares covered by such award (to the same extent) will again be available for issuance or transfer under the 2024 LTIP. If, after December 31, 2023, any award granted under the 2015 LTIP (in whole or in part) expires or is canceled, forfeited, settled in cash or unearned, or otherwise terminates without the delivery of shares, the shares subject to such award will, to the extent of such expiration, cancellation, forfeiture, cash settlement or unearned amount, be available under the 2024 LTIP. The following shares will not be added (or added back, as applicable) to the aggregate number of shares available under the 2024 LTIP: (1) shares withheld by the Company, tendered or otherwise used in payment of the exercise price of a stock option; (2) shares withheld by the Company, tendered or otherwise used to satisfy tax withholding; (3) shares subject to a stock-settled
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SAR (or a stock appreciation right granted under the 2015 LTIP) that are not actually issued in connection with the settlement of such right on exercise; and (4) shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of stock options. If, under the 2024 LTIP, a participant has elected to give up the right to receive compensation in exchange for shares based on fair market value, such shares will not count against the aggregate limit under the 2024 LTIP. ISO Limit. Subject to adjustment as provided in the 2024 LTIP, the aggregate number of shares actually issued or transferred by the Company upon the exercise of ISOs will not exceed 9,880,000 Ordinary Shares. Administration. The 2024 LTIP is generally administered by the Compensation Committee. The Compensation Committee has the authority to select individuals to whom awards are granted and determine the types of awards and number of shares covered and the terms and conditions of awards, including the applicable vesting schedule, performance conditions and whether the award will be settled in cash or shares. The Compensation Committee may delegate its authority under the 2024 LTIP to a subcommittee, and to the extent permitted by law, the Compensation Committee may delegate to one or more of its members, to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable. Subject to certain limitations, the Compensation Committee may delegate the authority to grant awards under the 2024 LTIP to one or more officers of the Company. At the discretion of our Board, the 2024 LTIP may be administered by our Board. Eligibility. Employees, consultants, advisors and other service providers of the Company and its affiliates, and non-employee directors of the Company, are eligible to receive awards under the 2024 LTIP, provided that any such person is eligible for grants pursuant to Form S-8. As of December 31, 2023, the Company and its affiliates had approximately 154,000 employees, eight non-employee service providers, and nine non-employee directors. Types of Awards. The 2024 LTIP permits grants of RSUs, restricted stock, NQSOs, ISOs, SARs and other share-based awards. | • | | Restricted Stock Units. RSUs represent a contractual right to receive the value of an Ordinary Share at a future date, subject to specified vesting and/or other restrictions. RSUs may be subject to restrictions, including performance restrictions, which may lapse as the Compensation Committee deems appropriate. Following the lapse of any restrictions, RSUs may be settled in cash, Ordinary Shares, other awards, other property or a combination of the foregoing, as determined by the Compensation Committee. The Compensation Committee may set forth in the applicable award agreement whether an award of RSUs is entitled to dividends or dividend equivalents, voting rights or any other rights. Any dividends or dividend equivalents or other distributions with respect to RSUs will be deferred until, and paid contingent upon, the vesting of the applicable RSUs to which they relate. |
| • | | Restricted Stock. Restricted stock is an award of Ordinary Shares that are subject to restrictions on transfer and a substantial risk of forfeiture. Restricted stock may be subject to restrictions, including performance restrictions, which may lapse as the Compensation Committee deems appropriate. The Compensation Committee may set forth in the applicable award agreement whether an award of restricted stock is entitled to dividends or dividend equivalents, voting rights or any other rights. Any dividends or dividend equivalents or other distributions with respect to restricted stock will be deferred until, and paid contingent upon, the vesting of the applicable shares of restricted stock to which they relate. |
| • | | Stock Options. A stock option is a contractual right to acquire shares at a specified exercise price. The Compensation Committee is authorized to grant both ISOs and NQSOs. The per share exercise price of a stock option will be determined by the Compensation Committee but, except in the case of an award granted in connection with an award that is assumed, converted or substituted in connection with certain transactions (a “Replacement Award”), may not be less than the fair market value (as determined in accordance with the 2024 LTIP) of an Ordinary Share on the grant date. The Compensation Committee will determine the time at which each stock option may be exercised and the expiration date of each option. However, no stock option will be exercisable more than 10 years from the grant date. Stock options that are intended to qualify as ISOs are subject to certain additional limitations under Section 422 of the Code. Stock options will not provide for dividends or dividend equivalents. Subject to applicable law, the Compensation Committee will determine the method or methods by which, and the form or forms, including cash, shares, other awards, other property, net |
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| settlement (including broker-assisted cashless exercise) or any combination thereof, having a fair market value on the exercise date equal to the relevant exercise price, in which payment of the exercise price may be made or deemed to have been made. |
| • | | Stock Appreciation Rights. A SAR is a contractual right to receive, in cash or shares, an amount equal to the appreciation of one Ordinary Share from the applicable grant price. SARs may be granted either alone, as freestanding awards, or in addition to other awards granted under the 2024 LTIP (which such pre-approvalsawards may, but do not need to be, stock options). Any SAR will be granted subject to substantially similar terms and conditions as apply to stock options, as described above. A tandem SAR may be exercised only at a time when the related award is exercisable. SARs will not provide for dividends or dividend equivalents. |
| • | | Other Awards. The Compensation Committee is authorized to grant Ordinary Shares or other awards, which may be denominated in or based on Ordinary Shares or factors that may influence the value of our shares, including convertible or exchangeable debt securities, other rights convertible or exchangeable into shares, purchase rights for shares, awards with value and payment contingent upon our performance or our business units’ performance or any other factors that the Compensation Committee specifies, and awards valued by reference to the book value of the Ordinary Shares or the value of securities of, or the performance of specified subsidiaries or affiliates or other business units of the Company. Cash awards, including as stand-alone awards or as an element of or supplement to any other award, may also be granted under the 2024 LTIP. The Compensation Committee may authorize the grant of Ordinary Shares as a bonus, or may authorize the grant of other awards in lieu of obligations of the Company or a subsidiary to pay cash or deliver other property under the 2024 LTIP or under other plans or compensatory arrangements, subject to such terms determined by the Compensation Committee in a manner that complies with Section 409A of the Code. The Compensation Committee may, at or after the applicable grant date, authorize the payment of dividends or dividend equivalents on awards described in this paragraph, either in cash or in additional shares, but dividend equivalents or other distributions on shares underlying such awards will be deferred until, and paid contingent upon, the earning and vesting of such awards. |
Performance Awards. The Compensation Committee may specify performance objectives regarding the vesting of any award granted under the 2024 LTIP. The Compensation Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance objectives or other applicable performance conditions. Subject to the terms of the 2024 LTIP, regarding any such performance-based award, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any award granted and the amount of any payment or transfer to be made pursuant to any award will be determined by the Compensation Committee. The Compensation Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such performance-based awards. Performance objectives for performance-based awards may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual participant or of one or more of the subsidiaries, divisions, departments, regions, functions or other organizational units within the Company or its subsidiaries. The performance objectives may be made relative to the performance of other companies or subsidiaries, divisions, departments, regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves. The performance objectives may be based on one or more, or a combination, of the following metrics (including relative or growth achievement regarding such metrics), or such other metrics as may be determined by the Compensation Committee: market capitalization; stock price; value appreciation; total shareholder return; revenue; sales; bookings; unit volume; production; pre-tax income; earnings; earnings per share; net income; operating income; EBIT (earnings before interest and taxes); EBITDA (earnings before interest, taxes, depreciation and amortization); operating or profit margin; cost structure; restructuring; expense control; overhead costs; general and administration expense; economic value added; net capital employed; net asset value; reserve value; market share; customer satisfaction or service quality; capacity utilization; reserve replacement; increase in customer base; customer diversification; cash flow; cash from operations; debt leverage; debt to equity ratio; return on assets or RONA; return on equity; return on capital; assets levels; asset turnover; inventory turnover; environmental health and safety; diversity; productivity; risk mitigation; corporate compliance; employee retention or engagement; and goals relating to acquisitions or divestitures.
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If the Compensation Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the performance objectives unsuitable, the Compensation Committee may in its discretion modify such performance objectives or the goals or actual levels of achievement regarding the performance objectives, in whole or in part, as the Compensation Committee deems appropriate and equitable. Adjustments. If the Compensation Committee determines that an adjustment is equitably required to prevent dilution or enlargement of participant benefits under the 2024 LTIP, it will equitably adjust the terms of any outstanding awards (including the number of shares subject to such awards and the applicable exercise or grant prices) and the number and type of securities issuable under the 2024 LTIP to reflect any change in the Ordinary Shares resulting from a dividend or other distribution, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, spin-out, combination, repurchase or exchange of our Ordinary Shares or other securities, issuance of warrants or other rights to acquire our Ordinary Shares or other securities, issuance of our Ordinary Shares pursuant to the anti-dilution provisions of our securities, other change in our capital structure, partial or complete liquidation or other distribution of assets, or any other similar corporate transaction or event affecting our Ordinary Shares. In the event of any such transaction or event or in the event of a change in control (as defined in the 2024 LTIP), the Compensation Committee may provide in substitution for any or all outstanding awards under the 2024 LTIP such alternative consideration (including cash), if any, as it, in good faith, may determine to be equitable in the circumstances and will require the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each stock option or SAR with an exercise price or hurdle price, as applicable, greater than the consideration offered in connection with any such transaction or event or change in control, the Compensation Committee may in its sole discretion elect to cancel such stock option or SAR without any payment to the person holding such stock option or SAR. Prohibition on Stock Option and SAR Repricing. Except in connection with certain corporate transactions or events described in the 2024 LTIP or in connection with a change in control, the terms of outstanding 2024 LTIP awards may not be amended to reduce the exercise price of outstanding stock options or the exercise or hurdle price of outstanding SARs, or cancel outstanding “underwater” stock options or SARs (including following a participant’s voluntary surrender of “underwater” stock options or SARs) in exchange for cash, other awards or stock options or SARs with an exercise or hurdle price, as applicable, that is less than the exercise price of the original stock options or exercise or hurdle price of the original SARs, as applicable, without approval of the Company’s shareholders. This repricing provision may not be amended without approval by the Company’s shareholders. Vesting Terms. Each award will specify the period of continuous service by the participant or the fulfillment of other conditions (if any) that are necessary for the applicable award to vest. An award may provide for the earning or vesting of such award upon certain events, including in the event of the retirement, death, disability or termination of employment or service of a participant, or in the event of a change in control. Accelerated or Continued Vesting. If permitted by Section 409A of the Code, and subject to the terms of the 2024 LTIP, including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances or in the event of a change in control, to the extent a participant holds a stock option or SAR not immediately exercisable in full, or any restricted stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any RSUs as to which the vesting period has not been completed, or any performance-based awards which have not been fully earned, or any dividend equivalents or other awards made pursuant to the 2024 LTIP subject to any vesting schedule or transfer restriction, or holds shares subject to any transfer restriction imposed pursuant to the 2024 LTIP, the Compensation Committee may, in its sole discretion, provide for continued vesting or accelerate the time at which such stock option or SAR or other award may vest or be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such vesting period will end or the time at which such performance-based awards will be deemed to have been earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award.
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“Change in Control” Definition. Except as otherwise provided by the Compensation Committee in an applicable award document, the 2024 LTIP generally defines a “change in control” to mean (subject to certain limitations and exceptions set forth in the 2024 LTIP): | • | | A transaction or series of related transactions within a 12-month period whereby any person or group of persons acquires or maintains more than 30% of the combined voting power of our outstanding securities; |
| • | | The replacement of the majority of directors during any 12-month period (other than by directors approved by a majority of the remaining directors); |
| • | | The consummation of our merger or consolidation with another entity (unless our voting securities outstanding immediately prior to such transaction continue to represent at least 50% of the combined voting power and total fair market value of our securities or those of the surviving entity outstanding immediately after such transaction); or |
| • | | The transfer within a 12-month period of all or substantially all of the assets of us and our subsidiaries. |
Allowances for Conversion Awards and Assumed Plans. Ordinary Shares issued or transferred under awards granted under the 2024 LTIP in substitution for or conversion of, or in connection with an assumption of, restricted stock, RSUs, stock options, SARs or other share or share-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with us or any of our subsidiaries will not count against (or be added to) the aggregate share limit or other 2024 LTIP limits described above. Additionally, shares available under certain plans that we or our subsidiaries may assume in connection with corporate transactions from another entity may be available for certain awards under the 2024 LTIP, under circumstances further described in the 2024 LTIP, but will not count against the aggregate share limit or other 2024 LTIP limits described above. Amendment and Termination. Generally, our Board may amend, alter, suspend, discontinue or terminate the 2024 LTIP, subject to the approval of our shareholders if required by the rules of the exchange on which our shares are principally traded (as determined by the Board). The Compensation Committee may amend any outstanding award. However, no such Board or committee action that would materially adversely affect the rights of a holder of an outstanding award may be taken without the holder’s consent (subject to certain exceptions set forth in the 2024 LTIP). New Plan Benefits Any awards under the 2024 LTIP will be at the discretion of the Compensation Committee. It is not possible at present to determine the amount or the form of any award that will be granted to any individual during the term of the 2024 LTIP. U.S. Federal Income Tax Consequences The following is a summary of the U.S. federal income tax consequences associated with awards under the 2024 LTIP, as of the date of this Proxy Statement. This summary, which is presented for the information of shareholders considering how to vote on this proposal and not for 2024 LTIP participants, is not intended to be complete and does not describe U.S. federal taxes other than income taxes (such as Medicare and Social Security taxes), or state, local or foreign tax consequences. The federal tax laws are complex and subject to change, and the tax consequences for any 2024 LTIP participant will be dependent on his or her individual circumstances. | • | | Restricted Stock Units. The grant of an award of RSUs generally will not result in income for the participant. Upon the settlement of the award, the participant will recognize ordinary income equal to the aggregate value of the payment received. |
| • | | Restricted Stock. A participant generally will not recognize any income upon the receipt of restricted stock unless the participant elects under Section 83(b) of the Code, within thirty days of receipt, to recognize ordinary income in an amount equal to the fair market value of the restricted stock at the time of receipt, less any amount paid for the shares. If an election is made, the participant will not be allowed a deduction for amounts subsequently required to be returned to the Company. If an election is not made, the participant will generally recognize ordinary income on the date that the shares are no longer subject to forfeiture or restrictions on transfer for purposes of Section 83 of the Code, in an amount equal to the fair market value of the shares on such date, less any amount paid for the shares. |
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| • | | Nonqualified Stock Options. The grant of an NQSO generally will not result in an income event for the participant. Upon the exercise of an NQSO, the excess of the fair market value of the underlying Ordinary Shares on the exercise date less the stock option exercise price will be taxable as income to the participant. The participant’s tax basis for shares received pursuant to the exercise of an NQSO will equal the sum of the income recognized and the exercise price. Special rules apply in the event therethat all or a portion of the exercise price is paid in the form of Ordinary Shares of the Company. Gain or loss upon a need for such approvals prior tosubsequent sale of any shares received upon the next full Audit Committee meeting, provided all such pre-approvals are then reported toexercise of NQSOs will generally be taxed as long-term or short-term capital gain or loss, depending upon the full Audit Committee at its next scheduled meeting. During fiscal years 2020 and 2019, EY provided various audit, audit-related, tax and other services to Aptiv. The Audit Committee pre-approved all audit services, audit-related, tax and other services provided by EY in 2020 and 2019. The
following table presents fees for professional services charged by EY by type and amount for fiscal years 2020 and 2019:
| | | | | | | | | | ($ in thousands) | | 2020 | | | 2019 | | Audit fees(1) | | $ | 12,700 | | | $ | 11,600 | | Audit-related fees(2) | | | 600 | | | | 900 | | Total audit and audit related fees | | | 13,300 | | | | 12,500 | | Tax fees(3) | | | 2,900 | | | | 2,400 | | All other fees(4) | | | — | | | | 100 | | Total fees | | $ | 16,200 | | | $ | 15,000 | |
(1) | Audit Fees — Audit fees billed or to be billed are related to EY’s audit of our annual financial statements, including the audit of internal control over financial reporting, timely interim reviews of the quarterly financial statements, statutory or other required audit services, audit services performed in connection with registration statements and issuance of comfort letters and consents.
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(2) | Audit-Related Fees — Audit-related services consist primarily of employee benefit plan audits, audit services not required by statute or regulation, agreed-upon procedures required to comply with financial accounting or regulatory reporting matters, due diligence in connection with acquisitions and divestitures, carve-out audits associated with divestitures and spin-off transactions, and other attest services.
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(3) | Tax Fees — Tax fees primarily represent fees for tax planning services and tax-related compliance.
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(4) | All Other Fees — All other fees relate to advisory services at certain international locations.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT holding period of the shares sold.
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| • | | APPOINTMENTISOs. The grant of an ISO generally will not result in an income event for the participant. If the shares are not disposed of within the one-year period beginning on the date of the transfer of such shares to the participant or within the two-year period beginning on the date of grant of the stock option, any amount realized by the participant in excess of the exercise price upon the disposition of such shares will be taxed as long-term capital gain and any loss sustained will be a long-term capital loss. If the shares are disposed of within the one-year period from the date of transfer of such shares to the participant or within the two-year period from the date of grant of the stock option, the excess of the fair market value of the shares on the date of exercise or, if less, the fair market value on the date of disposition, less the exercise price will be taxable as ordinary income to the participant at the time of disposition. Special rules apply in the event that all or a portion of the exercise price is paid in the form of Ordinary Shares of the Company.
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| • | | SARs. The grant of a SAR will not result in an income event for the participant. Upon the exercise of a SAR, the amount of cash received and the fair market value of any unrestricted shares received will be taxable as income to the participant. Gain or loss upon a subsequent sale of any shares received upon the exercise of SARs will generally be taxed as long-term or short-term capital gain or loss, depending upon the holding period of the shares sold. |
| • | | Tax Consequences to the Company and its Subsidiaries. To the extent that a participant recognizes ordinary income in the circumstances described above, the Company or the subsidiary for which the participant performs services will be entitled to a corresponding deduction provided that, among other things, it is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m) of the Code. |
| | | | | THE BOARD OF AND PAYMENT TO AUDITORSDIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE APTIV PLC 2024 LONG-TERM INCENTIVE PLAN. (Resolution 13)
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The Audit Committee of our Board has appointed EY as our auditors. Shareholders are requested to reappoint EY as the Company’s auditors for the period ending with the Annual Meeting of the Company to be held in 2021. Shareholders are also requested to authorize the directors to determine the fees to be paid to the auditors. Shareholders are also requested to ratify the appointment of EY as the Company’s independent registered public accounting firm for purposes of United States securities law reporting for the fiscal year ending December 31, 2021.
A representative of EY will be present at the Annual Meeting with the opportunity to make a statement if the firm desires and to respond to appropriate questions.
The Board of Directors recommends a vote “FOR” the re-appointment of Ernst & Young LLP as our auditors, to ratify their appointment as our independent registered public accounting firm and to authorize the directors to determine the fees to be paid to the auditors.
| | | | | | | ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION (Resolution 14)
As required by Section 14A of the Exchange Act, we are providing shareholders with the opportunity to cast an advisory, non-binding vote on the compensation of our named executive officers as disclosed in this Proxy Statement.
Our executive compensation programs are designed to align executive and shareholder interests by reinforcing the long-term growth, value creation and sustainability of Aptiv and to ensure that the majority of compensation opportunities are a result of pay-for-performance.
The Company is presenting Resolution 14 which gives shareholders the opportunity to approve or not approve our compensation program for NEOs by voting for or against the following resolution (a “say-on-pay” vote). While the vote on the resolution is advisory in nature and therefore will not bind us to take any particular action, the Board intends to carefully
consider the shareholder vote resulting from the proposal in making future decisions regarding the Company’s compensation programs.
“RESOLVED, that the Company’s shareholders approve, on an advisory, non-binding basis, the compensation paid to the Company’s named executive officers as disclosed in the Proxy Statement pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the “Compensation Discussion and Analysis,” the compensation tables and narrative discussion.”
The Board of Directors recommends a vote “FOR” approval of the compensation of the Company’s NEOs, as disclosed in this Proxy Statement, on an advisory, non-binding basis.
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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| | Advisory Vote to Approve Executive Compensation |
(RESOLUTION 13) As required by Section 14A of the Exchange Act, we are providing shareholders with the opportunity to cast an advisory, non-binding vote on the compensation of our named executive officers as disclosed in this Proxy Statement. Our executive compensation programs are designed to align executive and shareholder interests by reinforcing the long-term growth, value creation and sustainability of Aptiv and to ensure that the majority of compensation opportunities are a result of pay-for-performance. The Company is presenting Resolution 13 which gives shareholders the opportunity to approve or not approve our compensation program for NEOs by voting for or against the following resolution (a “say-on-pay” vote). While the vote on the resolution is advisory in nature and therefore will not bind us to take any particular action, the Board intends to carefully consider the shareholder vote resulting from the proposal in making future decisions regarding the Company’s compensation programs. “RESOLVED, that the Company’s shareholders approve, on an advisory, non-binding basis, the compensation paid to the Company’s named executive officers as disclosed in the Proxy Statement pursuant to the Securities and Exchange Commission’s compensation disclosure rules, including the “Compensation Discussion and Analysis,” the compensation tables and narrative discussion.” | | | | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” APPROVAL OF THE COMPENSATION OF THE COMPANY’S NEOS, AS DISCLOSED IN THIS PROXY STATEMENT, ON AN ADVISORY, NON-BINDING BASIS. |
| | | | | | 82 | | ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION | | |
| | |
| | Advisory Vote on the Frequency of an Advisory Vote to Approve Executive Compensation |
(RESOLUTION 14) Section 14A of the Exchange Act also requires the Company to provide shareholders with the opportunity to cast an advisory, non-binding vote on how frequently the Company should seek an advisory vote on the compensation of the Company’s NEOs, as disclosed pursuant to the SEC’s compensation disclosure rules. By voting on this Resolution 14, shareholders may indicate whether they would prefer an advisory, non-binding vote on NEO compensation to occur once every one, two or three years. Shareholders will have an opportunity to cast an advisory vote on the frequency of the say-on-pay vote at least every six years. After careful consideration of this Proposal, the Board has determined that an advisory, non-binding vote on executive compensation that occurs every year is the most appropriate alternative for Aptiv, and therefore the Board recommends that you vote to conduct future advisory votes on NEO compensation every year. In formulating its recommendation, the Board considered that at our 2018 annual meeting, our shareholders indicated their preference for such advisory vote to be held every year and we have included such proposal annually since the 2018 annual meeting. In addition, we believe an annual advisory, non-binding vote on executive compensation will allow shareholders to provide the Company with their direct input on the Company’s compensation philosophy, policies and practices as disclosed in the Proxy Statement every year. You may cast your vote on your preferred voting frequency by choosing the option of every year, every two years or every three years, or you may abstain from voting. “RESOLVED, that the Company’s shareholders determine, by voting on one of the three alternatives below, or abstaining, on an advisory, non-binding basis, the frequency with which they should have an advisory vote on the compensation of the Company’s named executive officers: Choice 1 — EVERY YEAR; Choice 2 — EVERY TWO YEARS; Choice 3 — EVERY THREE YEARS; or Choice 4 — ABSTAIN. ” The option that receives the highest number of votes cast by shareholders will be considered approved by the shareholders on an advisory, non-binding basis. If no choice receives the required majority vote approval, the Board will take into account all voting results in determining the frequency of the say-on-pay vote. However, because this vote is advisory and not binding on the Board or Aptiv, the Board may decide that it is in the best interests of our shareholders and Aptiv to hold an advisory, non-binding vote on executive compensation more or less frequently than the option approved by our shareholders. | | | | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE OPTION OF “EVERY YEAR” AS THE FREQUENCY OF ADVISORY, NON-BINDING VOTES ON THE COMPENSATION OF THE COMPANY’S NEOS AS DISCLOSED IN THIS PROXY STATEMENT. |
| | | | | | | OWNERSHIP OF CERTAIN BENEFICIAL OWNERS | | 83 |
| | |
| | Ownership of Certain Beneficial Owners |
Set forth in the table below is information about the number of ordinary shares held by persons (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act), we know to be the beneficial owners of more than 5% of Aptiv ordinary shares (based on 279,033,365 ordinary shares outstanding at December 31, 2023), based on information furnished by the identified persons to the SEC. The definition of beneficial ownership for proxy statement purposes includes shares over which a person has sole or shared voting power or dispositive power, whether or not a person has any economic interest in the shares. The definition also includes shares that a person has a right to acquire currently or within 60 days of March 4, 2024. | | | | | | | Name and Address of Beneficial Owner | | Number of Shares Beneficially Owned | | | Percent of Class | | | | The Vanguard Group, Inc.(1) 100 Vanguard Blvd. Malvern, PA 19355 | | | 31,697,555 | | | 11.2% | | | | BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | | | 23,200,017 | | | 9.1% |
| (1) | Represents ordinary shares heldbeneficially owned by persons (including any “group” as that termThe Vanguard Group, Inc. This information is used in Section 13(d)(3) ofbased on a Schedule 13G/A filed with the Exchange Act), we know to be the beneficial owners of more than five percent (5%) of AptivSEC February 13, 2024. |
| (2) | Represents ordinary shares (based on 270,025,374ordinary shares outstanding at December 31, 2020),beneficially owned by BlackRock, Inc. and/or certain other non-reporting entities. This information is based on information furnished bya Schedule 13G/A filed with the identified persons to the SEC. The definition of beneficial ownership for proxy statement purposes includes shares over which a person has sole or shared voting power or dispositive power, whether or not a person has any economic interest in the shares. The definition also includes shares that a person has a right to acquire currently or within 60 days of March 2, 2021.
| | | | | | Name and Address of Beneficial Owner | | Number of Shares Beneficially Owned | | Percent of Class | The Vanguard Group, Inc.(1) 100 Vanguard Blvd. Malvern, PA 19355 | | 28,084,954 | | 10.40% | BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | | 22,695,310 | | 8.4% | T. Rowe Price Associates, Inc.(3) 100 E. Pratt Street Baltimore, MD 21202 | | 22,254,163 | | 8.2% |
(1) | Represents ordinary shares beneficially owned by The Vanguard Group, Inc. This information is based on a Schedule 13G/A filed with the SEC February 10, 2021.SEC on February 12, 2024.
|
(2) | Represents ordinary shares beneficially owned by BlackRock, Inc. and/or certain other non-reporting entities. This information is based on a Schedule 13G/A filed with the SEC on February 5, 2021.
|
(3) | Represents ordinary shares beneficially owned by T. Rowe Price Associates, Inc. This information is based on a Schedule 13G/A filed with the SEC on February 16, 2021.
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| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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| | | | | | 84 | | SECURITY OWNERSHIP OF MANAGEMENT | | |
| | | The following table sets forth information as
| | Security Ownership of March 2, 2021 concerning beneficial ownership of Aptiv ordinary shares by each director, nominee and each of the executive officers named in the Summary Compensation Table. The definition of beneficial ownership for proxy statement purposes includes shares over which a person has sole or shared voting power or dispositive power, whether or not a person has any economic interest in the shares. The definition also includes shares that a person has the right to acquire currently or within 60 days of March 2, 2021. Except as otherwise indicated and subject to applicable community property laws, each owner has sole voting and dispositive power with respect to the securities listed. | | | | | | | | | | | | | | | | | | Name of Beneficial Owner | | Number of
Shares Owned | | | Number of
RSUs that
Vest within
60 Days | | | Total | | | Percent of
Class | | | | | | | Directors | | | | | | | | | | | | | | | | | | | | | | Richard L. Clemmer | | | — | | | | 2,929 | | | | 2,929 | | | | * | | | | | | | Nancy E. Cooper | | | 3,474 | | | | 4,776 | | | | 8,250 | | | | * | | | | | | | Nicholas M. Donofrio | | | 122,627 | | | | 4,611 | | | | 127,238 | | | | * | | | | | | | Rajiv L. Gupta | | | 36,300 | | | | 8,563 | | | | 44,863 | | | | * | | | | | | | Joseph L. Hooley | | | 402 | | | | 4,364 | | | | 4,766 | | | | * | | | | | | | Merit E. Janow | | | — | | | | — | | | | — | | | | * | | | | | | | Sean O. Mahoney | | | 12,266 | | | | 4,364 | | | | 16,630 | | | | * | | | | | | | Paul M. Meister | | | 2,214 | | | | 4,364 | | | | 6,578 | | | | * | | | | | | | Robert K. Ortberg | | | 2,691 | | | | 4,364 | | | | 7,055 | | | | * | | | | | | | Colin J. Parris | | | 4,074 | | | | 4,364 | | | | 8,438 | | | | * | | | | | | | Ana G. Pinczuk | | | 7,474 | | | | 4,364 | | | | 11,838 | | | | * | | | | | | | Lawrence A. Zimmerman | | | 19,600 | | | | 4,611 | | | | 24,211 | | | | * | | | | | | | | Officers | | | | | | | | | | | | | | | | | | | | | | Kevin P. Clark | | | 730,706 | | | | — | | | | 730,706 | | | | * | | | | | | | Joseph R. Massaro | | | 67,586 | | | | — | | | | 67,586 | | | | * | | | | | | | David Paja | | | 37,781 | | | | — | | | | 37,781 | | | | * | | | | | | | David M. Sherbin | | | 48,732 | | | | — | | | | 48,732 | | | | * | | | | | | | Mariya K. Trickett | | | 16,805 | | | | — | | | | 16,805 | | | | * | | | | | | | | Directors and Officers as a Group (20 Persons) | | | 1,160,991 | | | | 51,674 | | | | 1,212,665 | | | | | |
|
The following table sets forth information as of March 2, 2024 concerning beneficial ownership of Aptiv ordinary shares by each director, nominee and each of the executive officers named in the Summary Compensation Table. The definition of beneficial ownership for proxy statement purposes includes shares over which a person has sole or shared voting power or dispositive power, whether or not a person has any economic interest in the shares. The definition also includes shares that a person has the right to acquire currently or within 60 days of March 2, 2024. Except as otherwise indicated and subject to applicable community property laws, each owner has sole voting and dispositive power with respect to the securities listed. | | | | | | | | | | | | | | | | | Name of Beneficial Owner | | Number of Shares Owned | | Number of RSUs that Vest within 60 Days | | Total | | | Percent of Class | | | | | | | Directors | | | | | | | | | | | | | | | | | | | | | | Richard L. Clemmer | | | 6,777 | | | | 1,750 | | | | 8,527 | | | | * | | | | | | | Nancy E. Cooper | | | 9,590 | | | | 1,925 | | | | 11,515 | | | | * | | | | | | | Joseph L. Hooley | | | 8,674 | | | | 3,160 | | | | 11,834 | | | | * | | | | | | | Vasumati P. Jakkal | | | — | | | | — | | | | — | | | | * | | | | | | | Merit E. Janow | | | 3,242 | | | | 1,750 | | | | 4,992 | | | | * | | | | | | | Sean O. Mahoney | | | 18,179 | | | | 1,867 | | | | 20,046 | | | | * | | | | | | | Paul M. Meister | | | 10,968 | | | | 3,598 | | | | 14,566 | | | | * | | | | | | | Robert K. Ortberg | | | 8,886 | | | | 1,750 | | | | 10,636 | | | | * | | | | | | | Colin J. Parris | | | 11,531 | | | | 1,867 | | | | 13,398 | | | | * | | | | | | | Ana G. Pinczuk | | | 15,561 | | | | 2,917 | | | | 18,478 | | | | * | | | | | | | Officers | | | | | | | | | | | | | | | | | | | | | | Kevin P. Clark | | | 594,574 | | | | — | | | | 594,574 | | | | * | | | | | | | Joseph R. Massaro | | | 122,819 | | | | — | | | | 122,819 | | | | * | | | | | | | Obed D. Louissaint | | | 13,231 | | | | — | | | | 13,231 | | | | | | | | | | | Benjamin Lyon | | | 18,680 | | | | — | | | | 18,680 | | | | * | | | | | | | William T. Presley | | | 17,122 | | | | — | | | | 17,122 | | | | * | | | | | | | Katherine H. Ramundo | | | 25,592 | | | | — | | | | 25,592 | | | | * | | | | | | | Directors and Officers as a Group (18 Persons) | | | 903,501 | | | | 20,584 | | | | 924,085 | | | | * | |
| | | | | | | EQUITY COMPENSATION PLAN INFORMATION | | 85 |
| | |
| | Equity Compensation Plan Information |
The table below contains information about securities authorized for issuance under equity compensation plans. The features of these plans are discussed further in Note 21. Share-Based Compensation to our audited consolidated financial statements. All numbers in the table are as of December 31, 2023: | | | | | | | | | | | | | Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Restricted Common Stock Warrants and Rights (a) | | | Weighted-Average Exercise Price of Outstanding Options, Restricted Common Stock Warrants and Rights (b) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c) | | | | | | Equity compensation plans approved by security holders | | | 2,150,942 | (1) | | | $— | (2) | | | 11,395,027 | (3) | | | | | Equity compensation plans not approved by security holders | | | — | | | | — | | | | — | | | | | | Total | | | 2,150,942 | | | | — | | | | 11,395,027 | |
| (1) | Includes (a) 20,584 outstanding RSUs granted to our Board of Directors and (b) 2,130,358 outstanding time- and performance-based RSUs to our employees. All grants were made under the 2015 LTIP. |
| (2) | The RSUs have no exercise price. |
| (3) | Remaining shares available under the 2015 LTIP. |
| | | APTIV PLC
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | | |
| | |
| | Relationships and Related Party Transactions |
The Board has adopted a written Related Party Transaction Policy. Pursuant to this policy, the Company’s executive officers, directors and nominees for director must promptly disclose any actual or potential material conflict of interest to our Chief Legal Officer, who will then assess and communicate the information to the Nominating and Governance Committee for evaluation and appropriate resolution. The Nominating and Governance Committee will generally not approve or ratify a related party transaction unless it has determined that, upon consideration of all relevant information, the related party transaction is in, or not inconsistent with, the best interests of the Company and its shareholders. If we become aware of an existing related party transaction that has not been pre-approved under our Related Party Transaction Policy, the transaction will be referred to the Nominating and Governance Committee, which will evaluate all options available, including ratification, revision or termination of such transaction. No related party transactions were identified during 2023.
The Board has adopted a written Related Party Transaction Policy. Pursuant to this policy, the Company’s executive officers, directors and nominees for director must promptly disclose any actual or potential material conflict of interest to our General Counsel, who will then assess and communicate the information to the Nominating and Governance Committee for evaluation and appropriate resolution. The Nominating and Governance Committee will generally not approve or ratify a related party transaction unless it has determined that, upon consideration of all relevant information, the related party transaction is in, or not inconsistent with, the best interests of the Company and its shareholders. If we become aware of an existing related party transaction that has not been pre-approved under our Related Party Transaction Policy, the transaction will be referred to the Nominating and Governance Committee, which will evaluate all options available, including ratification, revision or termination of such transaction.
No related party transactions were identified during 2020.
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
| | | OTHER INFORMATION | | 87 |
| | | OTHER INFORMATION
| | Other Information |
PRESENTATION OF ACCOUNTS Under Jersey law, the directors are required to present the accounts of the Company and the reports of the auditors before shareholders at a general meeting. The accounts of the Company for the fiscal year ended December 31, 2023 will be presented to the shareholders at the Annual Meeting. OTHER BUSINESS Management is not aware of any other matters to be brought before the Annual Meeting, except those set forth in this Notice of Annual Meeting of Shareholders. If other business is properly presented for consideration at the Annual Meeting, the proxies will be voted by the persons named therein in accordance with their judgment on such matters. SHAREHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING To be considered for inclusion in next year’s proxy statement, shareholder proposals submitted in accordance with the SEC’s rules must be received by our Corporate Secretary no later than the close of business on November 11, 2024, 120 days before the one-year anniversary of the mailing date. If you wish to bring a matter before a general meeting outside the process described above, you may do so by following the procedures set forth in the Company’s Memorandum and Articles of Association and the Companies (Jersey) Law 1991, as amended. HOUSEHOLDING Only one copy of each of our annual report to shareholders and this Proxy Statement have been sent to multiple shareholders who share the same address and last name, unless we have received contrary instructions from one or more of those shareholders. This procedure is referred to as “householding.” We have been notified that certain intermediaries (brokers or banks) will also household proxy materials. We will deliver promptly, upon oral or written request, separate copies of the annual report and proxy statement to any shareholder at the same address. If you wish to receive separate copies of one or both of these documents, or if you do not wish to participate in householding in the future, you may write to our Corporate Secretary at Aptiv PLC, 5 Hanover Quay, Grand Canal Dock, Dublin 2, Ireland D02 VY79, or call (248) 813-3005. You may contact your broker or bank to make a similar request. Shareholders sharing an address who now receive multiple copies of our annual report and proxy statement may request delivery of a single copy of each document by writing or calling us at the address or telephone number above or by contacting their broker or bank (provided the broker or bank has determined to household proxy materials). RECORD DATE Shareholders owning Aptiv ordinary shares at the close of business on March 4, 2024 (the record date) may vote at the 2024 Annual Meeting. On that date, 272,678,642 ordinary shares were outstanding. Each ordinary share is entitled to one vote on each matter to be voted upon at the Annual Meeting. VOTING PRIOR TO THE ANNUAL MEETING If you are a shareholder of record, you may vote by proxy in any of the following ways: By Internet or Telephone - If you have Internet or telephone access, you may authorize the submission of a proxy on your behalf by following the voting instructions in the materials you receive. If you vote by Internet or telephone, you should not return your proxy card.
Presentation of Accounts
Under Jersey law, the directors are required to present the accounts of the Company and the reports of the auditors before shareholders at a general meeting. The accounts of the Company for the fiscal year ended December 31, 2020 will be presented to the shareholders at the Annual Meeting.
Other Business
Management is not aware of any other matters to be brought before the Annual Meeting, except those set forth in this Notice of Annual Meeting of Shareholders. If other business is properly presented for consideration at the Annual Meeting, the proxies will be voted by the persons named therein in accordance with their judgment on such matters.
Shareholder Proposals for the 2022 Annual Meeting
To be considered for inclusion in next year’s proxy statement, shareholder proposals submitted in accordance with the SEC’s rules must be received by our Corporate Secretary no later than the close of business on November 15, 2021, 120 days before the one-year anniversary of the mailing date.
If you wish to bring a matter before a general meeting outside the process described above, you may do so by following the procedures set forth in the Company’s Memorandum and Articles of Association and the Companies (Jersey) Law 1991, as amended.
Householding
Only one copy of each of our annual report to shareholders and this Proxy Statement have been sent to multiple shareholders who share the same address and last name, unless we have received contrary instructions from one or more of those shareholders. This procedure is referred to as “householding.” We have been notified that certain intermediaries (brokers or banks) will also household proxy materials. We will deliver promptly, upon oral or written request, separate copies of the annual report and proxy statement to any shareholder at the same address. If you wish to receive separate copies of one or both of these documents, or if you do not wish to participate in householding in the future, you may write to our Corporate Secretary at Aptiv PLC, 5 Hanover Quay, Grand Canal Dock, Dublin 2, Ireland D02 VY79, or call (248) 813-3005. You may contact your broker or bank to make a similar request. Shareholders shar-
ing an address who now receive multiple copies of our annual report and proxy statement may request delivery of a single copy of each document by writing or calling us at the address or telephone number above or by contacting their broker or bank (provided the broker or bank has determined to household proxy materials).
Record Date
Shareholders owning Aptiv ordinary shares at the close of business on March 2, 2021 (the record date) may vote at the 2021 Annual Meeting. On that date, 270,462,749 ordinary shares were outstanding. Each Ordinary Share is entitled to one vote on each matter to be voted upon at the Annual Meeting.
Voting prior to the Annual Meeting
If you are a shareholder of record, you may vote by proxy in any of the following ways:
By Internet or Telephone- If you have Internet or telephone access, you may authorize the submission of a proxy on your behalf by following the voting instructions in the materials you receive. If you vote by Internet or telephone, you should not return your proxy card.
By Mail-You may vote by mail by completing, dating and signing your proxy card and mailing it in the envelope provided. You must sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as officer of a corporation, guardian, executor, trustee or custodian), you must indicate your name and title or capacity.
If you vote over the Internet or by telephone, your vote must be received by 8:00 a.m., Eastern Time, on April 28, 2021.
If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the beneficial owner of shares held in “street name.” The street name holder will provide you with instructions that you must follow in order to have your shares voted.
Changing Your Vote before the Annual Meeting
By Mail - You may vote by mail by completing, dating and signing your proxy card and mailing it in the envelope provided. You must sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as officer of a corporation, guardian, executor, trustee or custodian), you must indicate your name and title or capacity. If you vote over the Internet or by telephone, your vote must be received by 4:00 a.m., Eastern Time, on April 22, 2024. If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the beneficial owner of shares held in “street name.” The street name holder will provide you with instructions that you must follow in order to have your shares voted. CHANGING YOUR VOTE BEFORE THE ANNUAL MEETING If you are a shareholder of record, you may revoke your proxy before it is exercised by: | • | | Written notice to the Corporate Secretary at Aptiv PLC, 5 Hanover Quay, Grand Canal Dock, Dublin 2, Ireland D02 VY79;
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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| • | | Other Information (continued)
Timely delivery of a valid, later-dated proxy or later-dated vote by Internet or telephone; or |
| • | | Voting virtuallyin person at the Annual Meeting. If you are a beneficial owner of shares held in street name, you may submit new voting instructions by contacting your brokerage firm, bank or other holder of record.
Voting at the Annual Meeting
If you are a shareholder of record, you may also vote virtually at the Annual Meeting or you may be represented by another person at the Annual Meeting by executing a proxy designating that person.
If you hold your shares in street name and you wish to vote virtually at the Annual Meeting, you must obtain a legal proxy issued in your name from the street name holder.
Quorum for the Annual Meeting
A quorum will consist of one or more shareholders present online or by proxy who hold or represent shares of not less than a majority of the total voting rights of all of the shareholders entitled to vote at the Annual Meeting.
Voting Tabulation
To be approved, Resolutions 1 to 13 require a simple majority of the votes cast at the Annual Meeting in favor of each Resolution, assuming a quorum has been met. If a director does not receive a majority of the votes cast for his or her election, then that director will not be elected to the Board, and the Board may fill the vacancy with a different person, or the Board may reduce the number of directors to eliminate the vacancy. The vote on Resolution 14 is advisory and is not binding on our Board or the Company. Abstentions and broker non-votes are counted for the purpose of determining a quorum, but are not counted as votes cast.
Broker Non-Votes
A broker non-vote occurs when the broker that holds your shares in street name is not entitled to vote on a matter without instruction from you and you do not give any instruction. Unless instructed otherwise by you, brokers will not have discretionary authority to vote on any matter other than Resolution 13 (Appointment of and Payment to Auditors), which is considered to be “routine” for these purposes. It is important that you cast your vote for your shares to be represented on all matters.
Attending the Annual Meeting
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If you are a beneficial owner of shares held in street name, you may submit new voting instructions by contacting your brokerage firm, bank or other holder of record. VOTING AT THE ANNUAL MEETING If you are a shareholder of record, you may also vote in person at the Annual Meeting or you may be represented by another person at the Annual Meeting by executing a proxy designating that person. If you hold your shares in street name and you wish to vote in person at the Annual Meeting, you must obtain a legal proxy issued in your name from the street name holder. QUORUM FOR THE ANNUAL MEETING A quorum will consist of one or more shareholders present online or by proxy who hold or represent shares of not less than a majority of the total voting rights of all of the shareholders entitled to vote at the Annual Meeting. VOTING TABULATION To be approved, Resolutions 1 to 12 require a simple majority of the votes cast at the Annual Meeting in favor of each Resolution, assuming a quorum has been met. If a director does not receive a majority of the votes cast for his or her election, then that director will not be elected to the Board, and the Board may fill the vacancy with a different person, or the Board may reduce the number of directors to eliminate the vacancy. The vote on Resolutions 13 and 14 is advisory and is not binding on our Board or the Company. Abstentions and broker non-votes are counted for the purpose of determining a quorum, but are not counted as votes cast. BROKER NON-VOTES A broker non-vote occurs when the broker that holds your shares in street name is not entitled to vote on a matter without instruction from you and you do not give any instruction. Unless instructed otherwise by you, brokers will not have discretionary authority to vote on any matter other than Resolution 11 (Appointment of and Payment to Auditors), which is considered to be “routine” for these purposes. It is important that you cast your vote for your shares to be represented on all matters. ATTENDING THE ANNUAL MEETING If you plan to attend the virtual Annual Meeting, you must present proof that you own Aptiv shares to be admitted. Record Shareholders. If you are a record shareholder (a person who owns shares registered directly in his or her name with Computershare, Aptiv’s transfer agent) and plan to attend the virtual Annual Meeting, please indicate this when voting, either by marking the attendance box on the proxy card or responding affirmatively when prompted during telephone or Internet voting.
Owners of Shares Held in Street Name. Beneficial owners of Aptiv ordinary shares held in street name by a broker, bank or other nominee will need proof of ownership to be admitted to the virtual Annual Meeting. A recent brokerage statement or letters from the broker, bank or other nominee are examples of proof of ownership. If your shares are held in street name and you want to vote virtually at the Annual Meeting, you must obtain a written proxy from the broker, bank or other nominee holding your shares.
Accessing Proxy Materials on the Internet
This Proxy Statement and our 2020 Annual Report on Form 10-K are available at aptiv.com. If you received a printed copy of our proxy materials, you may choose to receive future proxy materials by email. Choosing to receive your future proxy materials by email will lower our costs of delivery and is beneficial for the environment. If you choose to receive our future proxy materials by email, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it or for so long as the email address provided by you is valid.
Notice and Access
The SEC permits companies to furnish proxy materials to shareholders by providing access to these documents over the Internet instead of mailing a printed copy. Accordingly, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to shareholders. Shareholders have the ability to access, view and print the proxy materials on a website referred to in the Notice and request a printed set of proxy materials.
Proxy Solicitation
We will pay the cost for soliciting proxies for the Annual Meeting. Aptiv will distribute proxy materials and follow-up
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Other Information (continued)
reminders by mail and electronic means. We have engaged Morrow Sodali LLC (“Morrow”) at 470 West Avenue, Stamford, CT 06902 to assist with the solicitation of proxies. We will pay Morrow an aggregate fee, including reasonable out-of-pocket expenses, of $12,000, depending on the level of services actually provided. Certain Aptiv employees, officers and directors may also solicit proxies by mail, telephone or personal visits but they will not receive any additional compensation for their services.
We will also reimburse brokers, banks and other nominees for their expenses in forwarding proxy materials to beneficial owners.
Corporate Governance Information
Record Shareholders. If you are a record shareholder (a person who owns shares registered directly in his or her name with Computershare, Aptiv’s transfer agent) and plan to attend the Annual Meeting, please indicate this when voting, either by marking the attendance box on the proxy card or responding affirmatively when prompted during telephone or Internet voting. Owners of Shares Held in Street Name. Beneficial owners of Aptiv ordinary shares held in street name by a broker, bank or other nominee will need proof of ownership to be admitted to the Annual Meeting. A recent brokerage statement or letters from the broker, bank or other nominee are examples of proof of ownership. If your shares are held in street name and you want to vote in person at the Annual Meeting, you must obtain a written proxy from the broker, bank or other nominee holding your shares. ACCESSING PROXY MATERIALS ON THE INTERNET This Proxy Statement and our 2023 Annual Report on Form 10-K are available at aptiv.com. If you received a printed copy of our proxy materials, you may choose to receive future proxy materials by email. Choosing to receive your future proxy materials by email will lower our costs of delivery and is beneficial for the environment. If you choose to receive our future proxy materials by email, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it or for so long as the email address provided by you is valid. NOTICE AND ACCESS The SEC permits companies to furnish proxy materials to shareholders by providing access to these documents over the Internet instead of mailing a printed copy. Accordingly, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to shareholders. Shareholders have the ability to access, view and print the proxy materials on a website referred to in the Notice and request a printed set of proxy materials. PROXY SOLICITATION We will pay the cost for soliciting proxies for the Annual Meeting. Aptiv will distribute proxy materials and follow-up reminders by mail and electronic means. We have engaged Morrow Sodali LLC (“Morrow Sodali”) at 333 Ludlow Street, 5th Floor, South Tower, Stamford, CT 06902 to assist with the solicitation of proxies. We will pay Morrow an aggregate fee, including reasonable out-of-pocket expenses, of $12,000, depending on the level of services actually provided. Certain Aptiv employees, officers and directors may also solicit proxies by mail, telephone or personal visits but they will not receive any additional compensation for their services. We will also reimburse brokers, banks and other nominees for their expenses in forwarding proxy materials to beneficial owners. CORPORATE GOVERNANCE INFORMATION The following documents are available on our website at aptiv.com by clicking on the tab “Investors”, then the heading “Governance” and then the caption “Governance Documents”: | • | | Board Committee Charters; |
| • | | Memorandum and Articles of Association; |
| • | | Corporate Governance Guidelines; |
| • | | Insider Trading Policy; and |
| • | | Regulation FD Policy. The Code of Ethical Business Conduct is also available on our website at aptiv.com by clicking on the tab “Investors”, then the heading “Governance” and then the caption “Code of Conduct”.
Voting Results for the Annual Meeting
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The Code of Ethical Business Conduct is also available on our website at aptiv.com by clicking on the tab “Investors”, then the heading “Governance” and then the caption “Code of Conduct”.
The voting results will be published in a current report on Form 8-K, which will be filed with the SEC no later than four business days after the Annual Meeting. The voting results will also be published on our website at aptiv.com.
Requests for Copies of Annual Report
Aptiv will furnish to shareholders, without charge, a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC, upon receipt of a written request addressed to our Corporate Secretary at Aptiv PLC, 5 Hanover Quay, Grand Canal Dock, Dublin 2, Ireland D02 VY79.
VOTING RESULTS FOR THE ANNUAL MEETING The voting results will be published in a current report on Form 8-K, which will be filed with the SEC no later than four business days after the Annual Meeting. The voting results will also be published on our website at aptiv.com. Shareholders owning Aptiv’s ordinary shares will not have any dissenters’ rights of appraisal in connection with any of the matters to be voted on at the meeting. REQUESTS FOR COPIES OF ANNUAL REPORT Aptiv will furnish to shareholders, without charge, a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC, upon receipt of a written request addressed to our Corporate Secretary at Aptiv PLC, 5 Hanover Quay, Grand Canal Dock, Dublin 2, Ireland D02 VY79. | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on April 30, 2021
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON APRIL 24, 2024 The SEC has adopted rules to allow proxy materials to be posted on the Internet and to provide only a Notice of Internet Availability of Proxy Materials to shareholders. Our Proxy Materials and Annual Report are available at www.proxyvote.com. |
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| | Appendix A |
ADJUSTED NET INCOME AND ADJUSTED NET INCOME PER SHARE | | | | | | | | | | | | | | | | Year Ended December 31, | | (in millions, except per share amounts) | | 2023 | | | 2022 | | | 2021 | | Net income attributable to ordinary shareholders | | $ | 2,909 | | | $ | 531 | | | $ | 527 | | | | | | Mandatory convertible preferred share dividends | | | 29 | | | | 63 | | | | 63 | | Net income attributable to Aptiv | | | 2,938 | | | | 594 | | | | 590 | | Adjusting items: | | | | | | | | | | | | | | | | | Amortization | | | 233 | | | | 149 | | | | 148 | | | | | | Restructuring | | | 211 | | | | 85 | | | | 24 | | | | | | Other acquisition and portfolio project costs | | | 80 | | | | 26 | | | | 15 | | | | | | Asset impairments | | | 18 | | | | 8 | | | | 2 | | | | | | Other charges related to Ukraine/Russia conflict (a) | | | — | | | | 29 | | | | — | | | | | | Compensation expense related to acquisitions | | | 26 | | | | — | | | | — | | | | | | Costs associated with acquisitions and other transactions | | | 4 | | | | 61 | | | | — | | | | | | Debt extinguishment costs | | | 1 | | | | — | | | | 126 | | | | | | Debt modification costs | | | — | | | | — | | | | 1 | | | | | | Impairment of equity investments without readily determinable fair value | | | 18 | | | | — | | | | — | | | | | | Loss on change in fair value of publicly traded equity securities | | | 6 | | | | 52 | | | | — | | | | | | Gain on change in fair value of equity investments without readily determinable fair value | | | — | | | | — | | | | (9 | ) | | | | | Tax impact of intercompany transfers of intellectual property and other related transactions (b) | | | (2,082 | ) | | | — | | | | — | | | | | | Tax impact of adjusting items (c) | | | (77 | ) | | | (37 | ) | | | (29 | ) | Adjusted net income attributable to Aptiv | | $ | 1,376 | | | $ | 967 | | | $ | 868 | | Adjusted weighted average number of diluted shares outstanding (d) | | | 282.88 | | | | 283.55 | | | | 283.59 | | Diluted net income per share attributable to ordinary shareholders | | $ | 10.39 | | | $ | 1.96 | | | $ | 1.94 | | Adjusted net income per share | | $ | 4.86 | | | $ | 3.41 | | | $ | 3.06 | |
| (a) | Adjustment is reduced by the portion of charges attributable to noncontrolling interest for our former majority owned Russian subsidiary. Our interest in this subsidiary was sold during the second quarter of 2023 and the subsidiary was deconsolidated. |
| (b) | In response to the OECD’s Pillar Two Directive, the Company initiated changes to its corporate entity structure, including intercompany transfers of certain intellectual property to one of its subsidiaries in Switzerland during the second half of 2023. Furthermore, during the third quarter, the Company’s Swiss subsidiary was granted a ten-year tax incentive, beginning in 2024. The measurement of certain deferred tax assets and associated income tax benefits resulting from these transactions was impacted by tax legislation in Switzerland enacted in the fourth quarter of 2023, which increased the statutory income tax rate, resulting in additional deferred tax benefit impacts, net of valuation allowances. These adjustments represent the total income tax benefits recorded as a result of these transactions during the year ended December 31, 2023. |
| (c) | Represents the income tax impacts of the adjustments made for amortization, restructuring and other special items by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred. |
| (d) | In June 2020, the Company issued $1,150 million in aggregate liquidation preference of 5.50% Mandatory Convertible Preferred Shares (the “MCPS”) and received proceeds of $1,115 million, after deducting expenses and the underwriters’ discount of $35 million. Each share of MCPS automatically converted on June 15, 2023 into 1.0754 Aptiv ordinary shares. Dividends on the MCPS were payable on a cumulative basis at an annual rate of 5.50% on the liquidation preference of $100 per share. For purposes of calculating Adjusted Net Income Per Share, the Company has excluded the MCPS cash dividends and assumed the “if-converted” method of share dilution (the incremental ordinary shares deemed outstanding applying the “if-converted” method of calculating share dilution are referred to as the “Weighted average MCPS Converted Shares” in the following table). The Adjusted Weighted Average Number of Diluted Shares Outstanding calculated below, assumes the conversion of all 11.5 million MCPS at the later of the beginning of the period or the time of issuance, and resulting issuance of the underlying ordinary shares applying the “if-converted” method (method already applied for U.S. GAAP purposes of calculating the weighted average number of diluted shares outstanding for the year ended December 31, 2023) on a weighted average outstanding basis for all periods subsequent to issuance of the MCPS. We believe that using the “if-converted” method provides additional insight to investors on the impact of the MCPS upon their conversion. |
Adjusted Weighted Average Number of Diluted Shares Outstanding: | | | | | | | | | | | | | | | | Year Ended December 31, | | (in millions) | | 2023 | | | 2022 | | | 2021 | | Weighted average number of diluted shares outstanding | | | 282.88 | | | | 271.18 | | | | 271.22 | | | | | | Weighted average MCPS Converted Shares | | | — | | | | 12.37 | | | | 12.37 | | Adjusted weighted average number of diluted shares outstanding | | | 282.88 | | | | 283.55 | | | | 283.59 | |
CASH FLOW BEFORE FINANCING | | | | | | | | | | | | | | | | Year Ended December 31, | | | | | | (in millions) | | 2023 | | | 2022 | | | 2021 | | Cash flows from operating activities: | | | | | | | | | | | | | | | | | Net income | | $ | 2,966 | | | $ | 590 | | | $ | 609 | | | | | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | | | | | Depreciation and amortization | | | 912 | | | | 762 | | | | 773 | | | | | | Restructuring expense, net of cash paid | | | 83 | | | | 18 | | | | (56 | ) | | | | | Working capital | | | (128 | ) | | | (618 | ) | | | (408 | ) | | | | | Pension contributions | | | (33 | ) | | | (24 | ) | | | (28 | ) | | | | | Increase in deferred income tax assets from intercompany transfers of intellectual property and other related transactions | | | (2,082 | ) | | | — | | | | — | | | | | | Other, net | | | 178 | | | | 535 | | | | 332 | | Net cash provided by operating activities | | | 1,896 | | | | 1,263 | | | | 1,222 | | Cash flows from investing activities: | | | | | | | | | | | | | | | | | Capital expenditures | | | (906 | ) | | | (844 | ) | | | (611 | ) | | | | | Proceeds from business divestitures, net of cash sold | | | (17 | ) | | | — | | | | — | | | | | | Cost of business acquisitions and other transactions, net of cash acquired | | | (83 | ) | | | (4,310 | ) | | | (130 | ) | | | | | Proceeds from sale of technology investments | | | — | | | | 3 | | | | 22 | | | | | | Cost of technology investments | | | (6 | ) | | | (42 | ) | | | (2 | ) | | | | | Settlement of derivatives | | | 6 | | | | 7 | | | | (17 | ) | | | | | Other, net | | | 4 | | | | 4 | | | | 9 | | Net cash used in investing activities | | | (1,002 | ) | | | (5,182 | ) | | | (729 | ) | Adjusting items: | | | | | | | | | | | | | | | | | Adjustment for the cost of business acquisitions and other transactions, net of cash acquired | | | 83 | | | | 4,310 | | | | 130 | | | | | | Adjustment for cost of significant technology investments | | | 4 | | | | 40 | | | | — | | Cash flow before financing | | $ | 981 | | | $ | 431 | | | $ | 623 | |
Adjusted Operating Income | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year Ended December 31, | | | | | 2023 | | | 2022 | | | 2021 | | | | | ($ in millions) | | | | | $ | | | Margin | | | $ | | | Margin | | | $ | | | Margin | | Net income attributable to Aptiv | | $ | 2,938 | | | | | | | $ | 594 | | | | | | | $ | 590 | | | | | | | | | | | | | Interest expense | | | 285 | | | | | | | | 219 | | | | | | | | 150 | | | | | | | | | | | | | Other (income) expense, net | | | (63 | ) | | | | | | | 54 | | | | | | | | 129 | | | | | | | | | | | | | Income tax (benefit) expense | | | (1,928 | ) | | | | | | | 121 | | | | | | | | 101 | | | | | | | | | | | | | Equity loss, net of tax | | | 299 | | | | | | | | 279 | | | | | | | | 200 | | | | | | | | | | | | | Net income (loss) attributable to noncontrolling interest | | | 28 | | | | | | | | (3 | ) | | | | | | | 19 | | | | | | | | | | | | | Net loss attributable to redeemable noncontrolling interest | | | — | | | | | | | | (1 | ) | | | | | | | — | | | | | | Operating income | | | 1,559 | | | | 7.8 | % | | | 1,263 | | | | 7.2 | % | | | 1,189 | | | | 7.6 | % | | | | | | | | Amortization | | | 233 | | | | | | | | 149 | | | | | | | | 148 | | | | | | | | | | | | | Restructuring | | | 211 | | | | | | | | 85 | | | | | | | | 24 | | | | | | | | | | | | | Other acquisition and portfolio project costs | | | 80 | | | | | | | | 26 | | | | | | | | 15 | | | | | | | | | | | | | Asset impairments | | | 18 | | | | | | | | 8 | | | | | | | | 2 | | | | | | | | | | | | | Other charges related to Ukraine/Russia conflict | | | — | | | | | | | | 54 | | | | | | | | — | | | | | | | | | | | | | Compensation expense related to acquisitions | | | 26 | | | | | | | | — | | | | | | | | — | | | | | | | | | | | | | | Adjusted operating income | | $ | 2,127 | | | | 10.6 | % | | $ | 1,585 | | | | 9.1 | % | | $ | 1,378 | | | | 8.8 | % |
Adjusted Revenue Growth | | | | | | | | | | | | | | | | Year Ended December 31, | | | | | 2023 | | | 2022 | | | 2021 | | Reported net sales % change | | | 15 | % | | | 12 | % | | | 20 | % | | | | | Less: foreign currency exchange and commodities | | | (1 | )% | | | (4 | )% | | | 5 | % | | | | | Less: acquisitions | | | 4 | % | | | — | | | | — | | Adjusted revenue growth | | | 12 | % | | | 16 | % | | | 15 | % |
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| | Appendix B |
APTIV PLC 2024 LONG-TERM INCENTIVE PLAN Section 1. Purpose. The purpose of the Aptiv PLC 2024 Long-Term Incentive Plan (as amended or as amended and restated from time to time, the “Plan”) is to permit Award grants to eligible employees, Non-Employee Directors, consultants and other advisors of the Company and its Affiliates, and to provide such persons incentives and rewards for performance and/or service. Section 2. Eligibility. Any employee, consultant or other advisor of (or any other individual who provides services to) the Company or any Affiliate, plus any Non-Employee Director, shall be eligible to be selected to receive an Award under the Plan (provided, in each such case, that such individual is a Form S-8 Eligible Service Provider). Section 3. Administration. (a) The Plan shall be administered by the Committee; provided, however, that, at the discretion of the Board, this Plan may be administered by the Board, including with respect to the administration of any responsibilities and duties held by the Committee hereunder. The Committee may from time to time delegate all or any portion of its authority under this Plan to a subcommittee thereof. To the extent permitted by law, the Committee may delegate to one or more of its members, to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee, the subcommittee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under this Plan. To the extent permitted by applicable law and subject to applicable legal requirements, the Committee may delegate to one or more officers of the Company the authority to grant Awards, except that such delegation shall not be applicable to any Award fora person then covered by Section 16 of the Exchange Act or for a Non-Employee Director. The Committee may issue rules and regulations for administration of the Plan. For the purposes of this Section 3(a), “officer” means an executive of the Company who is elected to his or her position by the Board. (b) Subject to the terms of the Plan and applicable law, the Committee (or its delegate) shall have full power and authority to: designate Participants; determine the type or types of Awards (including Replacement Awards) to be granted to each Participant under the Plan; determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) Awards; determine the terms and conditions of any Award; determine whether, to what extent and under what circumstances Awards may be settled or exercised in cash, Shares, other Awards, other property, net settlement (including broker-assisted cashless exercise) or any combination thereof, or canceled, forfeited or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; determine whether, to what extent and under what circumstances cash, Shares, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee; interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan. (c) All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, its shareholders and Participants and any Beneficiaries thereof.
Section 4. Shares Available for Awards. (a) Maximum Shares Available Under Plan. Subject to adjustment as provided in Section 4(d) and to the Share counting rules of this Plan, the total number of Shares available for issuance or transfer under this Plan shall not exceed in the aggregate (i) 9,880,000 Shares, minus (ii) any Shares subject to awards granted under the Predecessor Plan after December 31, 2023 and prior to the Effective Date, plus (iii) any Shares that are subject to Awards granted under this Plan or awards granted under the Predecessor Plan that are added (or added back, as applicable) to the aggregate number of Shares available under this Section 4(a) pursuant to the Share counting rules of this Plan. (b) Incentive Stock Option Limit. Notwithstanding anything to the contrary contained in this Plan, and subject to adjustment as provided in Section 4(d) of this Plan, the aggregate number of Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 9,880,000 Shares. (c) Share Counting Rules. (i) Except as provided in Section 21 of this Plan, if any Award granted under this Plan (in whole or in part) expires or is canceled, forfeited, settled in cash or unearned, or otherwise terminates without the delivery of Shares, the Shares subject to such Award will, to the extent of such expiration, cancellation, forfeiture, cash settlement or unearned amount, be available (or again be available) under Section 4(a). (ii) If, after December 31, 2023, any award granted under the Predecessor Plan (in whole or in part) expires or is canceled, forfeited, settled in cash or unearned, or otherwise terminates without the delivery of Shares, the Shares subject to such award will, to the extent of such expiration, cancellation, forfeiture, cash settlement or unearned amount, be available under Section 4(a). (iii) Notwithstanding anything to the contrary contained in this Plan, the following Shares will not be added (or added back, as applicable) to the aggregate number of Shares available under Section 4(a) of this Plan: (A) Shares withheld by the Company, tendered or otherwise used in payment of the exercise price of an Option (or the exercise price of an option granted under the Predecessor Plan); (B) Shares withheld by the Company, tendered or otherwise used to satisfy tax withholding; (C) Shares subject to a stock-settled SAR (or a stock appreciation right granted under the Predecessor Plan) that are not actually issued in connection with the settlement of such right on the exercise thereof; and (D) Shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options (or stock options granted under the Predecessor Plan). If, under this Plan, a Participant has elected to give up the right to receive compensation in exchange for Shares based on fair market value, such Shares will not count against the aggregate limit under Section 4(a) of this Plan. (d) Adjustments. In the event that, as a result of any dividend or other distribution (whether in the form of cash, Shares or other securities), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, spin-out, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to acquire Shares or other securities of the Company, issuance of Shares pursuant to the anti-dilution provisions of securities of the Company, other change in the capital structure of the Company, partial or complete liquidation or other distribution of assets, or other similar corporate transaction or event affecting the Shares, or of changes in applicable laws, regulations or accounting principles, the Committee determines, in its sole discretion, exercised in good faith, that an adjustment is equitably required in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, subject to Section 18, adjust equitably any or all of: (i) the number and type of Shares (or other securities) which thereafter may be made the subject of Awards, including the limits specified in Section 4(a) and Section 4(b); provided, however, that any such adjustment to the number specified in Section 4(b) of this Plan will be made only if and to the extent that such adjustment would not cause any Option intended to qualify as an Incentive Stock Option to fail to so qualify;
(ii) the number and type of Shares (or other securities) subject to outstanding Awards; (iii) the grant, acquisition, exercise or hurdle price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; and (iv) other Award terms. Moreover, in the event of any such transaction or event or in the event of a Change in Control, the Committee may provide in substitution for any or all outstanding Awards under this Plan such alternative consideration (including cash), if any, as it, in good faith, may determine to be equitable in the circumstances and shall require in connection therewith the surrender of all Awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each Option or SAR with an exercise price or hurdle price, as applicable, greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its sole discretion elect to cancel such Option or SAR without any payment to the person holding such Option or SAR. (e) Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or Shares acquired by the Company. Section 5. Options. The Committee is authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine. (a) The exercise price per Share under an Option shall be determined by the Committee; provided, however, that, except in the case of Replacement Awards, such exercise price shall not be less than the Fair Market Value of a Share on the date of grant of such Option. (b) The term of each Option shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such Option. (c) The Committee shall determine the time or times at which an Option may be exercised in whole or in part. (d) Subject to applicable law, the Committee shall determine the method or methods by which, and the form or forms, including cash, Shares, other Awards, other property, net settlement (including broker-assisted cashless exercise) or any combination thereof, having a fair market value on the exercise date equal to the relevant exercise price, in which payment of the exercise price with respect thereto may be made or deemed to have been made. (e) Options shall not be granted under the Plan in consideration for and shall not be conditioned upon the delivery of Shares to the Company in payment of the exercise price and/or tax withholding obligation under any other stock option. (f) Options granted under this Plan may not provide for any dividends or dividend equivalents thereon. (g) The terms of any Incentive Stock Option granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code. Section 6. Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine. (a) SARs may be granted under the Plan to Participants either alone (“freestanding”) or in addition to other Awards granted under the Plan (“tandem”) and may, but need not, relate to a specific Option granted under Section 5.
(b) The exercise or hurdle price per Share under a SAR shall be determined by the Committee; provided, however, that, except in the case of Replacement Awards, such exercise or hurdle price shall not be less than the Fair Market Value of a Share on the date of grant of such SAR (or if granted in connection with an Option, on the grant date of such Option). (c) The term of each SAR shall be fixed by the Committee but shall not exceed 10 years from the date of grant of such SAR. A tandem SAR may be exercised only at a time when the related Award is exercisable. (d) The Committee shall determine the time or times at which a SAR may be exercised or settled in whole or in part. (e) Upon the exercise of a SAR, the Company shall pay to the Participant an amount equal to the number of Shares subject to the SAR multiplied by the excess, if any, of the Fair Market Value of one Share on the exercise date over the exercise or hurdle price of such SAR. The Company shall pay such excess in cash, in Shares valued at Fair Market Value, or any combination thereof, as determined by the Committee. (f) SARs granted under this Plan may not provide for any dividends or dividend equivalents thereon. Section 7. Restricted Stock and RSUs. The Committee is authorized to grant Awards of Restricted Stock and RSUs to Participants with the following terms and conditions and with such additional terms and conditions, in either case not inconsistent with the provisions of the Plan, as the Committee shall determine. (a) The applicable Award Document shall specify the vesting schedule and, with respect to RSUs, the delivery schedule (which may include deferred delivery later than the vesting date) and whether the Award of Restricted Stock or RSUs is entitled to dividends or dividend equivalents, voting rights or any other rights. (b) Shares of Restricted Stock and RSUs shall be subject to such restrictions as the Committee may impose (including any limitation on the right to vote a Share of Restricted Stock or the right to receive any dividend, dividend equivalent or other right), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. Notwithstanding the foregoing, any dividends, dividend equivalents or other distributions with respect to Restricted Stock or RSUs will be deferred until, and paid contingent upon, the vesting of the applicable Shares of Restricted Stock or RSUs to which they relate. (c) Any share of Restricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates. In the event that any stock certificate is issued in respect of shares of Restricted Stock granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock. (d) The Committee may provide in an Award Document that an Award of Restricted Stock is conditioned upon the Participant making or refraining from making an election with respect to the Award under Section 83(b) of the Code. If a Participant makes an election pursuant to Section 83(b) of the Code with respect to an Award of Restricted Stock, the Participant shall be required to file promptly a copy of such election with the Company and the Internal Revenue Service. (e) The Committee may determine the form or forms (including cash, Shares, other Awards, other property or any combination thereof) in which payment of the amount owing upon settlement of any RSU Award may be made. Section 8. Other Awards. (a) Subject to applicable law and the applicable limits set forth in Section 4 of this Plan, the Committee may authorize the grant to any Participant of Shares or such other Awards that may be denominated or payable in, valued in whole or
in part by reference to, or otherwise based on, or related to, Shares or factors that may influence the value of such Shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, purchase rights for Shares, awards with value and payment contingent upon performance of the Company or specified subsidiaries, affiliates or other business units thereof or any other factors designated by the Committee, and Awards valued by reference to the book value of the Shares or the value of securities of, or the performance of specified subsidiaries or affiliates or other business units of the Company. The Committee will determine the terms and conditions of such Awards. Shares delivered pursuant to an Award in the nature of a purchase right granted under this Section 8 will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, Shares, other Awards, notes or other property, as the Committee determines. (b) Cash awards, including as stand-alone Awards or as an element of or supplement to any other Award granted under this Plan, may also be granted pursuant to this Section 8. (c) The Committee may authorize the grant of Shares as a bonus, or may authorize the grant of other awards in lieu of obligations of the Company or a subsidiary thereof to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code. (d) The Committee may, at or after the applicable grant date, authorize the payment of dividends or dividend equivalents on Awards granted under this Section 8, either in cash or in additional Shares; provided, however, that dividend equivalents or other distributions on Shares underlying awards granted under this Section 8 shall be deferred until, and paid contingent upon, the earning and vesting of such Awards. Section 9. Performance-Based Awards. The Committee is authorized to specify Performance Objectives regarding the vesting of any Award granted under the Plan, which Awards will be subject to the following terms and conditions regarding the Performance Objectives and such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any Performance Objectives or other applicable performance conditions. Subject to the terms of the Plan, regarding any such performance-based Award, the performance goals to be achieved during any Performance Period, the length of any Performance Period, the amount of any Award granted and the amount of any payment or transfer to be made pursuant to any Award shall be determined by the Committee. The Committee may, in its discretion, increase or reduce the amount of a settlement otherwise to be made in connection with such performance-based Awards. Section 10. Vesting Terms; Effect of Termination of Service or a Change in Control. (a) Each Award will specify the period or periods of continuous service by the Participant with the Company or an Affiliate or the fulfillment of other conditions, if any, that are necessary for the applicable Award to vest. Any Award may specify Performance Objectives regarding the earning of the Award pursuant to Section 9. (b) Notwithstanding anything to the contrary contained in this Plan, any Award may provide for the earning or vesting of, or earlier termination of restrictions applicable to, such Award upon certain events, including in the event of the retirement, death, disability or termination of employment or service of a Participant, or in the event of a Change in Control. (c) If permitted by Section 409A of the Code, but subject to Section 12(b), including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances or in the event of a Change in Control, to the extent a Participant holds an Option or SAR not immediately exercisable in full, or any Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any RSUs as to which the vesting period has not been completed, or any performance-based Awards which have not been fully earned, or any dividend equivalents or other Awards made pursuant to Section 8 of this Plan subject to any vesting schedule or transfer restriction, or holds Shares
subject to any transfer restriction imposed pursuant to this Plan, the Committee may, in its sole discretion, provide for continued vesting or accelerate the time at which such Option or SAR or other Award may vest or be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such vesting period will end or the time at which such performance-based Awards will be deemed to have been earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such Award. Section 11. General Provisions Applicable to Awards. (a) Awards may, in the discretion of the Committee, be granted either alone or in addition to or in tandem with any other Award or any award granted under any other plan of the Company. Awards granted in addition to or in tandem with other Awards, or in addition to or in tandem with awards granted under any other plan of the Company, may be granted either at the same time as or at a different time from the grant of such other Awards or awards; provided, however, that a tandem SAR granted in relation to an Incentive Stock Option must be granted concurrently with such Incentive Stock Option. (b) Subject to the terms of the Plan and Section 18, payments or transfers to be made by the Company upon the grant, exercise or settlement of an Award may be made in the form of cash, Shares, other Awards, other property, net settlement or any combination thereof, as determined by the Committee in its discretion, and may be made in a single payment or transfer, in installments or on a deferred basis, in each case in accordance with rules and procedures established by the Committee. Such rules and procedures may include provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of dividend equivalents in respect of installment or deferred payments. (c) Except as may be permitted by the Committee or as specifically provided in an Award Document, and subject to compliance with Section 18(b) and Section 409A of the Code, no Award and no right under any Award shall be assignable, alienable, saleable or transferable by a Participant otherwise than by will or pursuant to Section 11(d) and during a Participant’s lifetime, each Award, and each right under any Award, shall be exercisable only by the Participant or, if permissible under applicable law, by the Participant’s guardian or legal representative; provided, however, that the Committee shall not permit, and an Award Document shall not provide for, any Award to be transferred or transferable to a third party for value or consideration without the approval of the Company’s shareholders. The provisions of this Section 11(c) shall not apply to any Award that has been fully exercised or settled, as the case may be, and shall not preclude forfeiture of an Award in accordance with the terms thereof. (d) A Participant may designate a Beneficiary or change a previous Beneficiary designation at such times prescribed by the Committee by using forms and following procedures approved or accepted by the Committee for that purpose. (e) All certificates for Shares and/or other securities delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the Securities and Exchange Commission, any stock market or exchange upon which such Shares or other securities are then quoted, traded or listed, and any applicable securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. (f) Without limiting the generality of Section 11(g), the Committee may impose restrictions on any Award with respect to noncompetition, confidentiality and other restrictive covenants, or requirements to comply with minimum stock ownership requirements, as it deems necessary or appropriate in its sole discretion. (g) The Committee may specify in an Award Document that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include a Termination of Service with or without Cause (and, in the case of any Cause that is resulting from an indictment or other non-final determination, the Committee may provide for such Award to be held in escrow or abeyance until a final resolution of the matters related to such event occurs, at which time the Award shall either be reduced, cancelled or forfeited (as provided in such Award
Document) or remain in effect, depending on the outcome), violation of material policies, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates. (h) If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, and if the Participant knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct, or if the Participant is one of the individuals subject to automatic forfeiture under Section 304 of the United States Sarbanes-Oxley Act of 2002 (and not otherwise exempted), the Committee may, in its discretion, require the Participant to reimburse the Company the amount of any payment in settlement of any Award earned or accrued during the 12-month period following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document not in compliance with such financial reporting requirement. (i) Any Award Document (or any part thereof) may provide for the cancellation or forfeiture of an Award or the forfeiture and repayment to the Company of any gain or earnings related to an Award, or other provisions intended to have a similar effect, upon such terms and conditions as may be determined by the Committee in accordance with (i) any Company clawback or recoupment policy, including the Aptiv PLC Compensation Recoupment Policy Effective October 2, 2023 and any other policy that is adopted to comply with the requirements of any applicable laws, rules, regulations, stock exchange listing standards or otherwise (in each case, the “Clawback Policy”), or (ii) any applicable laws that impose mandatory clawback or recoupment requirements under the circumstances set forth in such laws, including as required by the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or other applicable laws, rules, regulations, or stock exchange listing standards, as may be in effect from time to time, and which may operate to create additional rights for the Company with respect to Awards and the recovery of amounts relating thereto. By accepting Awards under the Plan, the Participants consent to be bound by the terms of the Clawback Policy, if applicable, and agree and acknowledge that they are obligated to cooperate with, and provide any and all assistance necessary to, the Company in its efforts to recover or recoup any Award, any gains or earnings related to any Award, or any other amount paid under the Plan or otherwise subject to clawback or recoupment pursuant to such laws, rules, regulations, stock exchange listing standards or Company policy. Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to facilitate the recovery or recoupment by the Company from the Participant of any such amounts, including from the Participants’ accounts or from any other compensation, to the extent permissible under Section 409A of the Code. Section 12. Amendments and Termination. (a) Except to the extent prohibited by applicable law and unless otherwise expressly provided in the Plan, the Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) shareholder approval, if such approval is required by applicable law or the rules of the stock market or exchange, if any, on which the Shares are principally quoted or traded, as determined by the Board, or (ii) the consent of the affected Participant, if such action would materially adversely affect the rights of such Participant under any outstanding Award, except to the extent any such amendment, alteration, suspension, discontinuance or termination is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations, or to impose any recoupment provisions on any Awards in accordance with Section 11(i). (b) Subject to Section 13, the Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or holder or Beneficiary of an Award; provided, however, that, subject to Section 4(d), no such action shall materially adversely affect the rights of any affected Participant or holder or Beneficiary under any Award theretofore granted under the Plan without such Participant’s consent, except to the extent any such action is made to cause the Plan to comply with applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations, or to impose any recoupment provisions on any Awards in accordance with Section 11(i); and provided further, that the Committee’s authority under this Section 12(b) is limited by the provisions of Section 11(c).
(c) The Committee shall be authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of events affecting the Company, or the financial statements of the Company, or of changes in applicable law, stock market or exchange rules and regulations or accounting or tax rules and regulations, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. (d) The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect. Section 13. Prohibition on Option and SAR Repricing. Except in connection with a corporate transaction or event described in Section 4(d) or in connection with a Change in Control, the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or the exercise or hurdle price of outstanding SARs, or cancel outstanding “underwater” Options or SARs (including following a Participant’s voluntary surrender of “underwater” Options or SARs) in exchange for cash, other Awards or Options or SARs with an exercise or hurdle price, as applicable, that is less than the exercise price of the original Options or exercise or hurdle price of the original SARs, as applicable, without approval of the Company’s shareholders. This Section 13 is intended to prohibit the repricing of “underwater” Options and SARs and will not be construed to prohibit the adjustments provided for in Section 4(d) of this Plan. Notwithstanding any provision of this Plan to the contrary, this Section 13 may not be amended without approval by the Company’s shareholders. Section 14. Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a Participant or other person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other person make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of Shares, and such Participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the Committee, the Company will withhold Shares having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Company an amount required to be withheld under applicable income, employment, tax and other laws, the Committee may require the Participant to satisfy the obligation, in whole or in part, by having withheld, from the Shares delivered or required to be delivered to the Participant, Shares having a value equal to the amount required to be withheld, or by delivering to the Company other Shares held by such Participant. The Shares used for tax or other withholding will be valued at an amount equal to the fair market value of such Shares on the date the benefit is to be included in the Participant’s income. In no event will the market value of the Shares to be withheld and delivered pursuant to this Section 14 exceed the minimum amount required to be withheld, unless (a) an additional amount can be withheld and not result in adverse accounting consequences, and (b) such additional withholding amount is authorized by the Committee. Participants will also make such arrangements as the Company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of Shares acquired upon the exercise of Options. Section 15. Miscellaneous. (a) No employee, Participant or other person shall have any claim to be granted any Award under the Plan, and there is no obligation for uniformity of treatment of employees, Participants or holders or Beneficiaries of Awards under the Plan. The terms and conditions of Awards need not be the same with respect to each recipient. Any Award granted under the Plan shall be a one-time Award that does not constitute a promise of future grants. The Company, in its sole discretion, maintains the right to make available future grants under the Plan. (b) The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of, or to continue to provide services to, the Company or any Affiliate. Further, the Company or the applicable Affiliate may at any time dismiss a Participant, free from any liability, or any claim under the Plan, unless otherwise expressly provided in the Plan or in any
Award Document or in any other agreement binding the parties. The receipt of any Award under the Plan is not intended to confer any rights on the receiving Participant except as set forth in the applicable Award Document. (c) Nothing contained in the Plan shall prevent the Company from adopting or continuing in effect other or additional compensation arrangements, and such arrangements may be either generally applicable or applicable only in specific cases. (d) If any provision of the Plan or any Award Document is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award Document, such provision shall be stricken as to such jurisdiction, person or Award, and the remainder of the Plan and any such Award Document shall remain in full force and effect. Notwithstanding anything in this Plan or an Award Document to the contrary, nothing in this Plan or an Award Document prevents a Participant from providing, without prior notice to the Company, information to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity a Participant is not prohibited from providing information voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act. (e) Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and a Participant or any other person. To the extent that any person acquires a right to receive payments from the Company pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company. (f) The Company shall not be required to issue or deliver fractional Shares pursuant to the Plan or any Award, and the Committee may in its discretion determine whether cash or other securities shall be paid or transferred in lieu of any fractional Shares, or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated. (g) In order to facilitate the making of any Award or combination of Awards under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Affiliate outside of the United States of America or who provide services to the Company or any Affiliate under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (including sub-plans) (to be considered part of this Plan) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the Company’s shareholders. (h) The Company shall take responsibility for the information set out in the Plan. Section 16. Effective Date of the Plan. This Plan will be effective as of the Effective Date. No grants will be made on or after the Effective Date under the Predecessor Plan, provided that outstanding awards granted under the Predecessor Plan will continue unaffected following the Effective Date. For clarification purposes, the terms and conditions of this Plan shall not apply to or otherwise impact previously granted and outstanding awards under the Predecessor Plan, as applicable (except for purposes of providing for Shares under such awards to be added to the aggregate number of Shares available under Section 4 of this Plan pursuant to the share counting rules of this Plan). Section 17. Term of the Plan. No Award shall be granted under the Plan after the date immediately preceding the tenth anniversary of the Effective Date, but all Awards granted on or prior to such date will continue in effect thereafter subject to the
terms thereof and of this Plan, and the authority of the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award, or to waive any conditions or rights under any such Award, and the authority of the Board to amend the Plan, shall extend beyond such date. Section 18. Section 409A of the Code. (a) With respect to Awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code, and the provisions of the Plan and any Award Document shall be administered and interpreted in a manner consistent with this intent. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. (b) Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and Awards hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owed by a Participant to the Company or any of its affiliates. (c) If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the fifth business day of the seventh month after such separation from service. (d) If the Award includes a “series of installment payments” (within the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participant’s right to the series of installment payments shall be treated as a right to a series of separate payments and not as a right to a single payment, and if the Award includes “dividend equivalents” (within the meaning of Section 1.409A-3(e) of the Treasury Regulations), the Participant’s right to the dividend equivalents shall be treated separately from the right to other amounts under the Award. Notwithstanding the foregoing, the tax treatment of the benefits provided under the Plan or any Award Document is not warranted or guaranteed, and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A of the Code. (e) Solely with respect to any Award that constitutes nonqualified deferred compensation subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5), but only to the extent necessary to establish a time and form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for any purpose in respect of such award. (f) Notwithstanding any provision of this Plan and Awards hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and Awards hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
Section 19. Data Protection. By participating in the Plan, the Participant consents to the holding and processing of personal information provided by the Participant to the Company or any Affiliate, trustee or third party service provider, for all purposes relating to the operation of the Plan. These include, but are not limited to: (i) administering and maintaining Participant records; (ii) providing information to the Company, Affiliates, trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan; (iii) providing information to future purchasers or merger partners of the Company or any Affiliate, or the business in which the Participant works; and (iv) transferring information about the Participant to any country or territory that may not provide the same protection for the information as the Participant’s home country. Section 20. Governing Law. The Plan, all grants and actions taken hereunder, and each Award Document shall be governed by and construed in accordance with the laws of the State of New York, without application of the conflicts of law principles thereof. Section 21. Stock-Based Awards in Substitution for Awards Granted by Another Company. Notwithstanding anything in this Plan to the contrary: (a) Awards may be granted under this Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any of its subsidiaries. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the Code. The Awards so granted may reflect the original terms of the awards being assumed or substituted or converted for and need not comply with other specific terms of this Plan, and may account for Shares substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction. (b) In the event that a company acquired by the Company or any of its subsidiaries or with which the Company or any of its subsidiaries merges has shares available under a pre-existing plan previously approved by shareholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for Awards made after such acquisition or merger under this Plan; provided, however, that Awards using such available shares may not be made after the date awards or grants could have been made under the terms of the pre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any of its subsidiaries prior to such acquisition or merger. (c) Any Shares that are issued or transferred by, or that are subject to any awards that are granted by, or become obligations of, the Company under Sections 21(a) or 21(b) of this Plan will not reduce the Shares available for issuance or transfer under this Plan or otherwise count against the limits contained in Section 4 of this Plan. In addition, no Shares subject to an award that is granted by, or becomes an obligation of, the Company under Sections 21(a) or 21(b) of this Plan, will be added to the aggregate limit contained in Section 4(a) of this Plan. Section 22 Definitions. As used in the Plan, the following terms shall have the meanings set forth below: (a) “Affiliate” means any entity that, directly or indirectly, is controlled by the Company, or any entity in which the Company, directly or indirectly, has a significant equity interest, in each case as determined by the Committee and any other entity which the Committee determines should be treated as an “Affiliate.”
(b) “Award” means any Option, SAR, Restricted Stock, RSU or Other Award granted under the Plan. (c) “Award Document” means any agreement, contract or other instrument or document, which may be in electronic format or limited to notation on the books and records of the Company, evidencing any Award granted under the Plan, which may, but need not, be executed or acknowledged by a Participant. (d) “Beneficiary” means a person entitled to receive payments or other benefits or exercise rights that are available under the Plan in the event of the Participant’s death. If no such person is named by a Participant, or if no Beneficiary designated by the Participant is eligible to receive payments or other benefits or exercise rights that are available under the Plan at the Participant’s death, such Participant’s Beneficiary shall be such Participant’s estate. (e) “Board” means the board of directors of the Company. (f) “Cause” means, with respect to any Participant, “cause” as defined in such Participant’s Employment Agreement, if any, or if not so defined, except as otherwise provided in such Participant’s Award Document, such Participant’s: (i) indictment for any crime (A) constituting a felony, or (B) that has, or could reasonably be expected to result in, an adverse impact on the performance of a Participant’s duties to the Company, or otherwise has, or could reasonably be expected to result in, an adverse impact to the business or reputation of the Company; (ii) having been the subject of any order, judicial or administrative, obtained or issued by the Securities and Exchange Commission for any securities violation involving fraud, including, for example, any such order consented to by the Participant in which findings of facts or any legal conclusions establishing liability are neither admitted nor denied; (iii) conduct, in connection with his or her employment or service, which is not taken in good faith and has, or could reasonably be expected to result in, material injury to the business or reputation of the Company; (iv) willful violation of the Company’s Code of Conduct or other material policies set forth in the manuals or statements of policy of the Company; (v) willful neglect in the performance of a Participant’s duties for the Company or willful or repeated failure or refusal to perform such duties; or (vi) material breach of any applicable Employment Agreement. The occurrence of any such event that is susceptible to cure or remedy shall not constitute Cause if such Participant cures or remedies such event within 30 days after the Company provides notice to such Participant. (g) “Change in Control” means, except as may be otherwise prescribed by the Committee in an Award Document made under this Plan, the occurrence of any one or more of the following events: (i) a direct or indirect change in ownership or control of the Company effected through one transaction or a series of related transactions within a 12-month period, whereby any “person” (as defined in Section 3(a)(9) of the Exchange Act) or any two or more persons deemed to be one “person” (as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) (in each case a “Person”) other than the Company or an employee benefit plan maintained by the Company, directly or indirectly acquire or maintain “beneficial ownership” (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company constituting more than 30% of the total combined voting power of the Company’s equity securities outstanding immediately after such acquisition;
(ii) at any time during a period of 12 consecutive months, individuals who at the beginning of such period constituted the Board cease for any reason to constitute a majority of members of the Board; provided, however, that any new member of the Board whose election or nomination for election was approved by a vote of at leasta majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was so approved, shall be considered as though such individual were a member of the Board at the beginning of the period, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; (iii) the consummation of a merger or consolidation of the Company or any of its subsidiaries with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or, if applicable, the ultimate parent thereof) at least 50% of the combined voting power and total fair market value of the securities of the Company or such surviving entity or parent outstanding immediately after such merger or consolidation; or (iv) the consummation of any sale, lease, exchange or other transfer to any Person (other than an Affiliate of the Company), in one transaction or a series of related transactions within a 12-month period, of all or substantially all of the assets of the Company and its subsidiaries. (h) “Code” means the United States Internal Revenue Code of 1986, as amended from time to time, and the rules, regulations and guidance thereunder. Any reference to a provision in the Code shall include any successor provision thereto. (i) “Committee” means the Compensation and Human Resources Committee of the Board (or its successor(s)) or such other committee of the Board as may be designated by the Board; provided that, with respect to any Award granted to any Non-Employee Director, the “Committee” means the Nominating and Corporate Governance Committee of the Board (or its successor(s)) or such other committee of the Board as may be designated by the Board. If the Board does not designate the Committee, references herein to the “Committee” shall refer to the Board. (j) “Company” means Aptiv PLC, a Jersey public limited company, and its successors. (k) “Disability” means, with respect to any Participant, “disability” as defined in such Participant’s Employment Agreement, if any, or if not so defined, except as otherwise provided in such Participant’s Award Document: (i) a permanent and total disability that entitles the Participant to disability income payments under any long-term disability plan or policy provided by the Company under which the Participant is covered, as such plan or policy is then in effect; or (ii) if such Participant is not covered under a long-term disability plan or policy provided by the Company at such time for whatever reason, then a “permanent and total disability” as defined in Section 22(e)(3) of the Code and, in this case, the existence of any such Disability will be certified by a physician acceptable to the Company. (l) “Employment Agreement” means any employment, severance, consulting or similar agreement (including any offer letter) between the Company or any of its Affiliates and a Participant. (m) “Effective Date” means the date this Plan is approved by the Company’s shareholders. (n) “Exchange Act” means the United States Securities Exchange Act of 1934, as amended, and the rules, regulations and guidance thereunder, as such law, rules, regulations and guidance may be amended from time to time. Any reference to a provision in the Exchange Act shall include any successor provision thereto.
(o) “Fair Market Value” means with respect to a Share, the closing price of a Share on the date in question (or, if there is no reported sale on such date, on the last preceding date on which any reported sale occurred) on the principal stock market or exchange on which the Shares are quoted or traded, or if Shares are not so quoted or traded, the fair market value of a Share as determined by the Committee, and with respect to any property other than Shares, the fair market value of such property determined by such methods or procedures as shall be established from time to time by the Committee. The Committee is authorized to adopt another fair market value pricing method provided such method is stated in the applicable Award Document and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code. (p) “Form S-8 Eligible Service Provider” means an individual who (i) is a natural person, and (ii) provides bona fide services to the Company, which services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for the Company’s securities. (q) “Good Reason” means, with respect to any Participant, “good reason” as defined in such Participant’s Employment Agreement, if any, or if not so defined, except as otherwise provided in such Participant’s Award Document, the occurrence of any one or more of the following events: (i) a material diminution in the Participant’s base salary; (ii) a material diminution in the Participant’s authority, duties, or responsibilities; (iii) a relocation of the Participant’s principal place of employment more than fifty (50) miles from its location; or (iv) any other action or inaction that constitutes a material breach by the Company of the Participant’s Employment Agreement, if any; in each case, without the Participant’s consent. A Participant must provide notice to the Company of the existence of any one or more of the conditions described in (i) through (iv) above within sixty (60) days of the initial existence of the condition, upon the notice of which the Company will have a period of thirty (30) days during which it may remedy the condition before the condition gives rise to Good Reason. (r) “Incentive Stock Option” means an option representing the right to acquire Shares from the Company, granted in accordance with the provisions of Section 5, that meets the requirements of Section 422 of the Code or any successor provision. (s) “Non-Employee Director” means a member of the Board who is not an employee of the Company or an Affiliate. (t) “Non-Qualified Stock Option” means an option representing the right to acquire Shares from the Company, granted in accordance with the provisions of Section 5, that is not an Incentive Stock Option. (u) “Option” means an Incentive Stock Option or a Non-Qualified Stock Option; provided, however, that any Option granted to a Non-Employee Director, consultant or other non-employee advisor shall be a Non-Qualified Stock Option. (v) “Other Award” means an Award granted in accordance with the provisions of Section 8. (w) “Participant” means the recipient of an Award granted under the Plan. (x) “Performance Objectives” means the performance objective or objectives established pursuant to this Plan for Participants who have received grants of performance-based Awards. Performance Objectives may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Participant or of one or more of the subsidiaries, divisions, departments, regions, functions or other organizational units within the Company or its subsidiaries. The Performance Objectives may be made relative to the performance of other companies or subsidiaries, divisions, departments,
regions, functions or other organizational units within such other companies, and may be made relative to an index or one or more of the performance objectives themselves. The Performance Objectives may be based on one or more, or a combination, of the following metrics (including relative or growth achievement regarding such metrics), or such other metrics as may be determined by the Committee: market capitalization; stock price; value appreciation; total shareholder return; revenue; sales; bookings; unit volume; production; pre-tax income; earnings; earnings per share; net income; operating income; EBIT (earnings before interest and taxes); EBITDA (earnings before interest, taxes, depreciation and amortization); operating or profit margin; cost structure; restructuring; expense control; overhead costs; general and administration expense; economic value added; net capital employed; net asset value; reserve value; market share; customer satisfaction or service quality; capacity utilization; reserve replacement; increase in customer base; customer diversification; cash flow; cash from operations; debt leverage; debt to equity ratio; return on assets or RONA; return on equity; return on capital; assets levels; asset turnover; inventory turnover; environmental health and safety; diversity; productivity; risk mitigation; corporate compliance; employee retention or engagement; and goals relating to acquisitions or divestitures. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may in its discretion modify such Performance Objectives or the goals or actual levels of achievement regarding the Performance Objectives, in whole or in part, as the Committee deems appropriate and equitable. Performance Objectives may be adjusted for material items not originally contemplated in establishing the performance target for items resulting from discontinued operations, extraordinary gains and losses, the effect of changes in accounting standards or principles, acquisitions or divestitures, changes in tax rules or regulations, capital transactions, restructuring, non-recurring gains or losses or other such items. (y) “Performance Period” means the period established by the Committee at the time any performance-based Award is granted or at any time thereafter during which any performance goals specified by the Committee with respect to such Award are measured. (z) “Predecessor Plan” means the Aptiv PLC Long-Term Incentive Plan, as amended and restated effective April 23, 2015. (aa) “Replacement Award” means an Award granted in connection with an award that is assumed, converted or substituted pursuant to Section 21(a). (bb) “Restricted Stock” means any Share granted in accordance with the provisions of Section 7. (cc) “RSU” means a contractual right granted in accordance with the provisions of Section 7 that is denominated in Shares. Each RSU represents a right to receive the value of one Share. (dd) “SAR” means any right granted in accordance with the provisions of Section 6 to receive upon exercise by a Participant or settlement the excess of (i) the Fair Market Value of one Share on the date of exercise or settlement over (ii) the exercise or hurdle price of the right on the date of grant, or if granted in connection with an Option, on the date of grant of the Option. (ee) “Shares” means the ordinary shares, par value $0.01 per share, of the Company, or any security into which such ordinary shares may be changed by reason of any transaction or event of the type referred to in Section 4(d) of this Plan. (ff) “Termination of Service” means, except as otherwise provided in a Participant’s Award Document: (i) in the case of a Participant who is an employee of the Company or an Affiliate, cessation of the employment relationship such that the Participant is no longer an employee of the Company or Affiliate; (ii) in the case of a Participant who is a Non-Employee Director, the date that the Participant ceases to be a member of the Board for any reason; or
(iii) in the case of a Participant who is a consultant or other advisor, the effective date of the cessation of the performance of services for the Company or an Affiliate; provided, however, that in the case of an employee, the transfer of employment from the Company to an Affiliate, from an Affiliate to the Company, from one Affiliate to another Affiliate or, unless the Committee determines otherwise, the cessation of employee status but the continuation of the performance of services for the Company or an Affiliate as a member of the Board or a consultant or other advisor shall not be deemed a cessation of service that would constitute a Termination of Service; and provided further, that a Termination of Service will be deemed to occur for a Participant employed by an Affiliate when an Affiliate ceases to be an Affiliate, unless such Participant’s employment continues with the Company or another Affiliate. Notwithstanding the foregoing, with respect to any Award subject to Section 409A of the Code (and not exempt therefrom), to the extent necessary to comply with Section 409A of the Code, a Termination of Service occurs when a Participant experiences a “separation from service” (as such term is defined under Section 409A of the Code).
| 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
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APPENDIX AAPTIV PLC
5 HANOVER QUAY, GRAND CANAL DOCK DUBLIN 2, IRELAND D02 VY79 | | | | 
Adjusted Net IncomeVOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and Adjusted Net Income per Sharefor electronic delivery of information up until April 22, 2024 at 4:00 a.m. Eastern Time. 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. | | | | | | | | | | | | | | | | | | Year Ended December 31, | | | (in millions, except per share amounts) | | 2020 | | | 2019 | | | 2018 | | Net income attributable to ordinary shareholders | | $ | 1,769 | | | $ | 990 | | | $ | 1,067 | | Mandatory Convertible Preferred Share dividends | | | 35 | | | | — | | | | — | | Net income attributable to Aptiv | | | 1,804 | | | | 990 | | | | 1,067 | | Adjusting items: | | | | | | | | | | | | | Restructuring | | | 136 | | | | 148 | | | | 109 | | Other acquisition and portfolio project costs | | | 23 | | | | 71 | | | | 78 | | Asset impairments | | | 10 | | | | 11 | | | | 34 | | Deferred compensation related to acquisitions | | | 14 | | | | 42 | | | | 57 | | Gain on business divestitures and other transactions | | | (1,434 | ) | | | — | | | | — | | Debt modification costs | | | 4 | | | | — | | | | — | | Debt extinguishment costs | | | — | | | | 6 | | | | — | | Transaction and related costs associated with acquisitions | | | — | | | | 5 | | | | 14 | | Gain on changes in fair value of equity investments | | | (10 | ) | | | (19 | ) | | | — | | Contingent consideration liability fair value adjustments | | | — | | | | — | | | | 23 | | Tax impact of U.S. tax reform enactment | | | — | | | | — | | | | 29 | | Tax impact of adjusting items(a) | | | (22 | ) | | | (18 | ) | | | (15) | | Adjusted net income attributable to Aptiv | | $ | 525 | | | $ | 1,236 | | | $ | 1,396 | | Weighted average number of diluted shares outstanding | | | 270.70 | | | | 257.39 | | | | 265.22 | | Diluted net income per share attributable to Aptiv | | $ | 6.66 | | | $ | 3.85 | | | $ | 4.02 | | Adjusted net income per share | | $ | 1.94 | | | $ | 4.80 | | | $ | 5.26 | |
(a) | | | | | | | Represents the income tax impacts of the adjustments made for restructuring and other special items by calculating the income tax impact of these items using the appropriate tax rate for the jurisdiction where the charges were incurred and the impact of the intra-entity transfer of intellectual property of approximately $33 million during the year ended December 31, 2018.
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APTIV PLC A-1
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until April 22, 2024 at 4:00 a.m. Eastern Time. Have your proxy card in hand when you call and then follow the instructions. | | | | | | | | | | | | | | | | 2021 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
| Appendix A (continued)VOTE BY MAIL
Cash Flow Before Financing
| | | | | | | | | | | | | | | | Year Ended December 31, | | | (in millions) | | 2020 | | | 2019 | | | 2018 | | | | | | | Cash flows from operating activities: | | | | | | | | | | | | | | | | | Net income | | $ | 1,822 | | | $ | 1,009 | | | $ | 1,107 | | | | | | | Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | | | | | | | | | Depreciation and amortization | | | 764 | | | | 717 | | | | 676 | | | | | | Restructuring expense, net of cash paid | | | (15 | ) | | | 29 | | | | (26) | | | | | | Working capital | | | (65 | ) | | | 67 | | | | (3) | | | | | | Pension contributions | | | (33 | ) | | | (38 | ) | | | (48) | | | | | | Gain on autonomous driving joint venture | | | (1,434 | ) | | | — | | | | — | | | | | | Other, net | | | 374 | | | | (160 | ) | | | (66) | | Net cash provided by operating activities | | | 1,413 | | | | 1,624 | | | | 1,640 | | | | | | | Cash flows from investing activities: | | | | | | | | | | | | | | | | | Capital expenditures | | | (584 | ) | | | (781 | ) | | | (846) | | | | | | Cost of business acquisitions and other transactions, net of cash acquired | | | (49 | ) | | | (334 | ) | | | (1,197) | | | | | | Cost of technology investments | | | (2 | ) | | | (10 | ) | | | (16) | | | | | | Settlement of derivatives | | | (1 | ) | | | — | | | | (2) | | | | | | Other, net | | | 10 | | | | 14 | | | | 13 | | Net cash used in investing activities | | | (626 | ) | | | (1,111 | ) | | | (2,048) | | Adjusting items: | | | | | | | | | | | | | | | | | | Adjustment for the cost of business acquisitions and other transactions, net of cash acquired | | | 49 | | | | 334 | | | | 1,197 | | | | | | | Adjustment for settlement of derivatives related to business acquisitions | | | — | | | | — | | | | (4) | | Cash flow before financing | | $ | 836 | | | $ | 847 | | | $ | 785 | |
Adjusted EBITDA
| | | | | | | | | | | | | | | | Year Ended December 31, | | | (in millions) | | 2020 | | | 2019 | | | 2018 | | | | | | | Net income attributable to Aptiv | | $ | 1,804 | | | $ | 990 | | | $ | 1,067 | | | | | | Interest expense | | | 164 | | | | 164 | | | | 141 | | | | | | Other income, net | | | — | | | | (14 | ) | | | (2) | | | | | | Income tax expense | | | 49 | | | | 132 | | | | 250 | | | | | | Equity loss (income), net of tax | | | 83 | | | | (15 | ) | | | (23) | | Net income attributable to noncontrolling interest | | | 18 | | | | 19 | | | | 40 | | | | | | | Operating income | | | 2,118 | | | | 1,276 | | | | 1,473 | | Depreciation and amortization | | | 764 | | | | 717 | | | | 676 | | EBITDA | | $ | 2,882 | | | $ | 1,993 | | | $ | 2,149 | | | | | | Restructuring | | | 136 | | | | 148 | | | | 109 | | | | | | Other acquisition and portfolio project costs | | | 23 | | | | 71 | | | | 78 | | | | | | Deferred compensation related to acquisitions | | | 14 | | | | 42 | | | | 57 | | Gain on business divestitures and other transactions | | | (1,434 | ) | | | — | | | | — | | Adjusted EBITDA | | $ | 1,621 | | | $ | 2,254 | | | $ | 2,393 | |
A-2 APTIV PLC
| | | 
APTIV PLC
5 HANOVER QUAY, GRAND CANAL DOCK
DUBLIN 2, IRELAND D02 VY79
| | VOTE BY INTERNET
Before The Meeting - Go towww.proxyvote.com
| | Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. 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.
| | | | | During The Meeting - Go towww.virtualshareholdermeeting.com/APTV2021
| | You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. | | | | | VOTE BY PHONE - 1-800-690-6903 | | | Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. 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 postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | | | | | | | | | |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: V29575-P04638 KEEP THIS PORTION FOR YOUR RECORDS | | — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — |
DETACH AND RETURN THIS PORTION ONLY | | | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | D32798-P49190 KEEP THIS PORTION FOR YOUR RECORDS | — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | APTIV PLC | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR thefollowing: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. | | Election of Directors | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees: | | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1a. | | Kevin P. Clark | | ☐ | | ☐ | | ☐ | | | | The Board of Directors recommends you vote FOR proposals 2 3, and 4. | | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | | | | 1b. | | Nancy E. Cooper | | ☐ | | ☐ | | ☐ | | | | 2. | | Proposal to re-appoint auditors, ratify independent public accounting firm and authorize the directors to determine the fees paid to the auditors. | | ☐ | | ☐ | | ☐ | | | | | | | 1c. | | Joseph L. Hooley | | | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1d. | | Vasumati P. Jakkal | | ☐ | | ☐ | | ☐ | | | | 3. | | Proposal to approve the Aptiv PLC 2024 Long-Term Incentive Plan. | | ☐ | | ☐ | | ☐ | | | | | | | 1e. | | Merit E. Janow | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1f. | | Sean O. Mahoney | | ☐ | | ☐ | | ☐ | | | | 4. | | Say-on-Pay - To approve, by advisory vote, executive compensation. | | | | | | | | | | | | | | | | | | | | | | | | | | | 1g. | | Paul M. Meister | | ☐ | | ☐ | | ☐ | | | | The Board of Directors recommends you vote 1 YEAR on proposal 5. | | 1 Year | | 2 Years | | 3 Years | | Abstain | | | | | | | | | | | | | | | | | | | | | | 1h. | | Robert K. Ortberg | | ☐ | | ☐ | | ☐ | | | | 5. | | Say-When-on-Pay - To determine, by advisory vote, the frequency of shareholder votes on executive compensation. | | ☐ | | ☐ | | ☐ | | ☐ | | | | | | | 1i. | | Colin J. Parris | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1j. | | Ana G. Pinczuk | | ☐ | | ☐ | | ☐ | | | | NOTE: Such other business as may properly come before the meeting or any adjournment thereof. | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, 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 officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | | | | | | | | | | | Signature (Joint Owners) | | | | Date | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board recommends a vote FOR all director nominees, and FOR Proposals 2 and 3.
| | | | | | | | | | | | | | | | | | | | | | | | | 1.
| | Election of Directors:
| | | | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1a. | | Kevin P. Clark
| | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1b. | | Richard L. Clemmer
| | | | ☐ | | ☐ | | ☐ | | | | | | | | For | | Against | | Abstain | | | | | | | | | | | | | | | | | | | | | | | | | 1c.
| | Nancy E. Cooper
| | | | ☐
| | ☐
| | ☐
| | | | | | 1k. Colin J. Parris
| | ☐ | | ☐ | | ☐ | | | | | | | | | 1d. | | Nicholas M. Donofrio
| | | | ☐ | | ☐ | | ☐ | | | | | | 1l. Ana G. Pinczuk
| | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | 1e. | | Rajiv L. Gupta
| | | | ☐ | | ☐ | | ☐ | | | | | | | | | | For
| | Against
| | Abstain
| | | | | | | | | | | | | | | | | | | | | | | | | 1f.
| | Joseph L. Hooley
| | | | ☐
| | ☐
| | ☐
| | | | | | 2. Proposal to re-appoint auditors, ratify independent public accounting firm and authorize the directors to determine the fees paid to the auditors.
| | ☐
| | ☐
| | ☐
| | | | | | | | | 1g.
| | Merit E. Janow
| | | | ☐
| | ☐
| | ☐
| | | | | | 3. Say-on-Pay - To approve, by advisory vote, executive compensation.
| | ☐ | | ☐ | | ☐ | | | | | | | | | 1h.
| | Sean O. Mahoney
| | | | ☐
| | ☐
| | ☐
| | | | | | NOTE: Such other business as may properly come before the meeting or any adjournment thereof.
| | | | | | | | | | | | | | | | | | | 1i.
| | Paul M. Meister
| | | | ☐
| | ☐
| | ☐
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1j.
| | Robert K. Ortberg
| | | | ☐
| | ☐
| | ☐
| | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, 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 officer.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASESIGNWITHINBOX]
| | Date
| | | | | | | | | | Signature (Joint Owners)
| | Date
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Proxy Materials are available at www.proxyvote.com. | — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
D32799-P49190 V29576-P04638
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APTIV PLC Annual Meeting of Shareholders April 24, 2024 9:00 AM Local Time This proxy is solicited by the Board of Directors Katherine H. Ramundo, with the power of substitution, is hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Aptiv PLC to be held on April 24, 2024 or at any postponement or adjournment thereof. Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees, FOR Proposals 2, 3 and 4, and 1 YEAR on Proposal 5. (Items to be voted appear on reverse side.) | | | | | | | | | | | APTIV PLC
| | | | | | Annual Meeting of Shareholders | | | | | | April 30, 2021 8:00 AM Eastern Time | | | | | | This proxy is solicited by the Board of Directors | | | | | | Joseph R. Massaro, with the power of substitution, is hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders of Aptiv PLC to be held on April 30, 2021 or at any postponement or adjournment thereof.
Shares represented by this proxy will be voted as directed by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees, and FOR Proposals 2 and 3.
| | | | | | (Items to be voted appear on reverse side.)
| | | | | | | Continued and to be signed on reverse side
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