SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Filed by the Registrant | ☒ | Filed by a Party other than the Registrant | ☐ |
☐ | Preliminary Proxy Statement | |||||
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||
☒ | Definitive Proxy Statement | |||||
☐ | Definitive Additional Materials | |||||
☐ | Soliciting Material |
☒ | No fee required. | |||||
☐ | Fee paid previously with preliminary materials. | |||||
☐ | Fee computed on table |
| ||||||
| ||||||
| ||||||
| ||||||
|
| ||||||
| ||||||
| ||||||
|
LETTER FROM THE LEAD DIRECTOR
|
March 15, 2022 DEAR SHAREOWNERS, The past year has proven our strength and resolve as we emerge from the pandemic. While Honeywell continues to face challenges created by the new normal, the Company's principles and core behaviors have provided tenets to help guide a roadmap to the future. With 2021
Honeywell is in the business of changing how the world works, and The Board's Corporate Governance and Responsibility Committee provides holistic oversight and thought leadership as the The Company and its Board are intensely committed to the highest levels of ESG performance. Honeywell is uniquely positioned to help industries across the globe improve their sustainability. A significant portion of the Company’s research and development spend on new products is in its ESG-related portfolio, much of which underscores its commitment to reducing greenhouse gas emissions throughout the value chain. I encourage you to read our 2021 Corporate Citizenship Report, at investor.honeywell.com (see “ESG/ESG Information”), to learn more about how Honeywell's ESG-oriented in energy, aviation, technology, and beyond will help shape our future. The Company is continuing its efforts to invent and commercialize breakthrough technologies in energy, safety, security, productivity, and urbanization. While the Company has and will continue to face challenges in the near term, |
I Before I close, I’d like to remember Gen. Raymond Odierno, a member of our Board
him. Sincerely, D. SCOTT DAVIS Lead Director | D. SCOTT DAVIS Lead Director | ||||
1 |
DATE: | April 25, 2022 | VOTE BY TELEPHONE In the U.S. or Canada, you can vote your shares by calling 800-690-6903. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card. VOTE BY INTERNET You can vote your shares online at www.proxyvote.com. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card. VOTE BY SCANNING You can vote your shares online by scanning the QR code on your proxy card. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card. Additional software may need to be downloaded. VOTE BY MAIL You can vote by mail by marking, dating, and signing your proxy card or voting instruction form, and returning it in the postage-paid envelope. VOTE DURING THE VIRTUAL MEETING OF SHAREOWNERS You can vote your shares during the virtual meeting. You will need the 16-digit control number on the Notice of Internet Availability or your proxy card. |
NOTICE OF ANNUAL
MEETING OF SHAREOWNERS
| |||||||||
10:30 a.m. EDT | |||||||||
PLACE: | www.virtualshareholdermeeting.com/ The meeting will be held in virtual format only. Please see page | ||||||||
RECORD | Close of business on | ||||||||
MEETING AGENDA |
Important Notice of Internet Availability of Proxy Materials |
The Securities and Exchange Commission’s “Notice and Access” rule enables Honeywell to deliver a Notice of Internet Availability of Proxy Materials to shareowners in lieu of a paper copy of the Proxy Statement, related materials, and its Annual Report to Shareowners. It contains instructions on how to access the Proxy Statement and 2020 Annual Report and how to vote online.
The Securities and Exchange Commission’s “Notice and Access” rule enables Honeywell to deliver a Notice of Internet Availability of Proxy Materials to shareowners in lieu of a paper copy of the Proxy Statement, related materials, and its Annual Report to Shareowners. It contains instructions on how to access the Proxy Statement and 2021 Annual Report and how to vote online. Shares cannot be voted by marking, writing on, and/or returning the Notice of Internet Availability. Any Notices of Internet Availability that are returned will not be counted as votes. Honeywell encourages shareowners to vote promptly as this will save the expense of additional proxy solicitation. Shareowners of record on the record date are entitled to vote online at the virtual meeting, by telephone, by mail, online at www.proxyvote.com, or by scanning the QR code on your proxy card. Meeting Admission You are entitled to attend the virtual Annual Meeting of Shareowners, vote and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/HON2022 and entering the 16-digit control number included on the Notice of Internet Availability of Proxy Materials, on your proxy card (if you requested printed materials), or on the instructions that accompanied your proxy materials. You will only be entitled to vote and submit questions at the Annual Meeting if you are a shareowner as of the close of business on February 25, 2022, the record date. In the event of a technical malfunction or other situation that at the discretion of the Chairman of the Board of Directors may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of shareowners to be held, the Chairman or Corporate Secretary of Honeywell will convene the meeting at 12 p.m. EDT on the same date and at the location specified above solely for the purpose of holding the adjourned meeting at this later time. Under the foregoing circumstances, we will post information regarding the announcement on Honeywell’s Investor Relations website at investor.honeywell.com. This Notice of Annual Meeting of Shareowners and related proxy materials are being distributed or made available to shareowners beginning on or about March 15, 2022. By Order of the Board of Directors, VICTOR J. MILLER Vice President, Deputy General Counsel, Corporate Secretary, and Chief Compliance Officer |
Honeywell encourages shareowners to vote promptly as this will save the expense of additional proxy solicitation. Shareowners of record on the record date are entitled to vote online at the virtual meeting, by telephone, by mail, online at www.proxyvote.com, or by scanning the QR code on your proxy card.
| ||||||||
2 | Notice and Proxy Statement | 2022 |
You are entitled to attend the virtual Annual Meeting of Shareowners, vote and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/HON2021 and entering the 16-digit control number included on the Notice of Internet Availability of Proxy Materials, on your proxy card (if you requested printed materials), or on the instructions that accompanied your proxy materials. You will only be entitled to vote and submit questions at the Annual Meeting if you are a shareowner as of the close of business on March
Notice and Proxy Statement | 2022 | 3 |
Reconciliation, notes, and definitions of non-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 50 or in Appendix A. | ||||||||||||||
4 | Notice and Proxy Statement | 2022 |
This Notice of Annual Meeting of Shareowners and related proxy materials are being distributed or made available to shareowners beginning on or about April 9, 2021.
By Order of the Board of Directors,
Victor J. Miller
Vice President, Deputy General Counsel,
Corporate Secretary, and Chief Compliance Officer
Vote By Telephone
In the U.S. or Canada, you can vote your shares by calling 800-690-6903. You will need the 16-digit control number on the Notice of Internet Availability or proxy card.
Vote By Internet
You can vote your shares online at www.proxyvote.com. You will need the 16-digit control number on the Notice of Internet Availability or proxy card.
Vote By Scanning
You can vote your shares online by scanning the QR code on your proxy card. You will need the 16-digit control number on the Notice of Internet Availability or proxy card. Additional software may need to be downloaded.
Vote By Mail
You can vote by mail by marking, dating, and signing your proxy card or voting instruction form, and returning it in the postage-paid envelope.
Vote During the Virtual Meeting of Shareowners
You can vote your shares during the virtual meeting. You will need the 16-digit control number on the Notice of Internet Availability or proxy card.
Performance Materials and Technologies | Aerospace | |||||||||||||
| ||||||||||||||
CONTENTS | i | | | Proxy Summary | Pg | 1 | |||||||
| 01 |
| | |
| Pg | 9 | ||||||
9 | ||||||||||||
10 | ||||||||||||
11 | ||||||||||||
12 | ||||||||||||
17 | ||||||||||||
02 | | | Corporate Governance | Pg | 18 | ||||||||
19 | ||||||||||||
21 | ||||||||||||
22 | ||||||||||||
23 | ||||||||||||
25 | ||||||||||||
26 | ||||||||||||
03 | | | Corporate Responsibility and Sustainability | Pg | 30 | ||||||||
30 | ||||||||||||
33 | ||||||||||||
35 | ||||||||||||
36 | ||||||||||||
04 | | | Director Compensation | Pg | 37 | ||||||||
37 | ||||||||||||
38 | ||||||||||||
39 | ||||||||||||
05 | | | Proposal 2: Advisory Vote to Approve Executive Compensation | Pg | 40 | ||||||||
06 | | | Compensation Discussion and Analysis | Pg | 41 | ||||||||
42 | ||||||||||||
42 | ||||||||||||
45 | ||||||||||||
51 | ||||||||||||
53 | ||||||||||||
53 | ||||||||||||
59 | ||||||||||||
65 | ||||||||||||
66 | ||||||||||||
67 | ||||||||||||
69 | ||||||||||||
07 | | | Executive Compensation Tables | Pg | 70 | ||||||||
70 | ||||||||||||
72 | ||||||||||||
86 | ||||||||||||
08 | | | Proposal 3: Approval of Independent Accountants | Pg | 87 | ||||||||
87 | ||||||||||||
87 | ||||||||||||
88 | ||||||||||||
09 | | | Proposal 4: Shareowner Proposal—Shareholder Right to Act by Written Consent | Pg | 89 | ||||||||
89 | ||||||||||||
10 | | | Additional Information | Pg | 91 | ||||||||
Reconciliation, notes, and definitions of non-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 41 or in Appendix A. | 91 | |||||||||||
91 | ||||||||||||
92 | ||||||||||||
93 | ||||||||||||
93 | ||||||||||||
95 | ||||||||||||
95 | ||||||||||||
96 | ||||||||||||
A-1 | | | Appendix A: Reconciliation of Non-GAAP Financial Measures | Pg | A-1 |
Safety and Productivity Solutions | Honeywell Building Technologies | ||||||||||||||||
| asset performance, including a wide range of PPE, gas detection technology, and custom-engineered sensors, switches, and controls | Hardware, software, and analytics to help improve quality of life and create safer, more efficient, and more productive facilities |
Honeywell Connected Enterprise | ||||||||||||||
Honeywell Forge includes a mix of software products and enabling services across our segments that help companies use operational data to drive insights that improve processes, enhance productivity, support sustainability initiatives, and empower workers. | ||||||||||||||
5 |
Sales | Segment Margin | Adj. Earnings per Share* | Free Cash Flow | ||||||||
Cumulative two-year TSR represents the COVID-19 pandemic impacted period | Cumulative five-year TSR is more than double the Compensation Peer Group median return | Cumulative 10-year TSR exceeded the Compensation Peer Group median by a multiple of 1.8x |
6 | Notice and Proxy Statement | 2022 |
3-Year Capital Deployment* vs. Operating Cash Flow ($B) | 1-Year Return on Invested Capital | ||||
Notice and Proxy Statement | 2022 | 7 |
8 | Notice and Proxy Statement | 2022 |
Notice and Proxy Statement | 2022 | 9 |
| ||||||||
We Protect Our people, our communities, and the environment | We Achieve Sustainable growth and accelerated productivity | We Develop Technologies that expand the sustainable capacity of our world | ||||||
ANNUAL MEETING OF SHAREOWNERS
CARBON NEUTRALITY BY 2035 AND COMMITMENT TO ALIGN WITH SBTi | •Committed to be carbon neutral in Honeywell's operations and facilities by 2035 •Joined the U.S. Department of Energy's Better Climate Challenge, under which we will reduce our Scope 1 and 2 emissions by 50% from a 2018 baseline by no later than 2030 •Submitted a commitment letter to the Science Based Targets initiative (SBTi) committing to develop a science-based target in line with SBTi protocols that will include Scope 3 emissions •Committing to address Scope 3 indirect emissions, including through partnerships with industry leaders to identify and implement best practices •Reduction being driven through Honeywell Accelerator, the Company's end-to-end business system •Multi-faceted approach, including energy savings projects, conversion to renewable energy sources, capital improvement projects, and utilization of credible carbon offsets | ||||||||||
10-10-10 GOALS BY 2024 | •Reduce global Scope 1 and Scope 2 greenhouse gas emissions by an additional 10%per dollar of sales from 2018 levels •Deploy at least 10 renewable energy opportunities •Achieve certification to ISO 50001 Energy Management Standard at 10 facilities •On-trackto meet 10-10-10 commitments by 2024 | ||||||||||
SUSTAINABLE OPERATIONS | •Approximately 70% improvement in energy efficiency since 2004 •Approximately 3,000 acres remediated and restored as valuable community assets •160 million gallons of water saved in water-stressed areas since 2013 •Safety record >4x better than the average of the industries in which Honeywell operates •6,100 sustainability projects since 2010, with annualized savings of $105 million | ||||||||||
| |||||||||||
ESG-ORIENTED SOLUTIONS | •Decades-long history of innovation to help customers meet their ESG-oriented goals •~60% of 2021 •>60% of 2021 sales were from offerings that contribute to ESG-oriented outcomes* •Honeywell Solstice® products have helped customers avoid potentially discharging >260 million metric tons of CO2e •Completed approximately 6,000 guaranteed efficiency projects around the world which, combined, will decrease customers’ energy and operating costs by an estimated $6 billion •Sustainable Technologies Solutions business established to develop innovative offerings that pave the way for a lower carbon economy while addressing other critical environmental concerns •Sustainable Building Technologies business established to advance technologies and services that drive carbon neutrality through carbon reduction, emphasize indoor air quality and occupant health, manage different sources of power, energy storage and usage, and help companies and communities meet their sustainability commitments | ||||||||||
10 |
Notice and Proxy Statement | 2022 | 11 |
TIME AND DATE | April 25, 2022, 10:30 a.m. EDT | |||||
PLACE | The meeting will be held in virtual format only. Please visit www.virtualshareholdermeeting.com/ | |||||
Shareowners as of | ||||||
To attend the virtual Annual Meeting of Shareowners online, vote, and submit questions during the meeting, you will need the 16-digit control number included on the Notice of Internet Availability of Proxy Materials, on your proxy card (if you requested printed materials), or on the instructions that accompanied your proxy materials. |
MEETING AGENDA AND
Recommended Vote | Page | ||||||||||||
No. 1 |
|
| |||||||||||
No. 2 | FOR |
|
| ||||||||||
No. 3 | FOR |
|
| ||||||||||
No. 4 | Shareowner Proposal — Special Shareholder Meeting Improvement | AGAINST | |||||||||||
No. | Shareowner Proposal — Climate Lobbying Report | AGAINST | |||||||||||
No. 6 | Shareowner Environmental and Social Due Diligence | AGAINST |
|
|
2020 PERFORMANCE HIGHLIGHTS
FINANCIAL RESULTS – DELIVERED ON OUR COMMITMENTS TO SHAREOWNERS
In 2020, Honeywell drove sequential improvements in key financial metrics through the COVID-19 downturn. We continued our track record of execution by moving quickly and decisively to ensure liquidity, drive growth, protect margins, and position ourselves for recovery.
Protected margin, driving sequential decremental margin improvement from 33% in the second quarter to 26% in the fourth quarter.
Deployed cost plans decisively, realizing $1.5 billion of year-over-year fixed cost savings.
Outperformed the market, delivering total shareowner returns more than double the Industrial Select Sector SPDR (XLI).
Source: S&P Capital IQ, as of December 31, 2020. TSR is calculated by the growth in capital from purchasing a share in the company and assuming dividends (regular and special) and share distributions received from any spins are reinvested in the applicable company at the time they are paid.
| 2022 |
|
COVID-19 RESPONSE
Ensured the Health and Safety of Our Employees
Honeywell paid for COVID-19 testing and treatment costs that are not covered by employees’ insurance and made paid sick time available up-front to U.S. non-exempt employees.
Established a $10 million employee relief fund for employees in financial distress and expanded access to well-being support programs and services, with regular communication from the Honeywell Medical Team.
Supported the Frontline Response
Ramped up production of personal protective equipment to address unprecedented demand and added manufacturing capabilities around the world to produce millions of N95 masks to help support the urgent need for critical safety equipment.
Shifted operations at two chemical manufacturing sites in the U.S. and Germany to produce and donate hand sanitizer to government agencies in response to shortages created by the pandemic.
Supported the fight against COVID-19 by increasing production of other critical personal protective equipment such as safety eyewear and face shields, increasing production of sensors used in ventilators, and providing testing services to ventilator manufacturers.
Innovated rapidly to provide creative solutions for new areas of customer demand.
|
|
|
|
HONEYWELL OPERATING SYSTEM
This year showcased the Company’s strategic, operational, and financial agility through innovations – bringing new products to the market that address the pandemic – and in cost control – taking swift actions to structurally reduce the fixed cost base.
The Company could take decisive action quickly because of a clear operating system that drives operational rigor, strategic alignment, and efficiency. The Honeywell Operating System, or HOS, can be thought of as a framework and operating model, providing a tool kit in each functional area to ensure the appropriate financial resources are in place to support the Company’s strategy. These tool kits evolve and expand over time to continuously support business needs and ensure operating strength.
HOS provides the tools required to make data-driven decisions and to create operating efficiencies, which ultimately drive the Company’s financial performance. Honeywell’s general managers and functional leaders use these tools to drive execution. Everything the Company does is underpinned by a monthly centralized operating rhythm, which ensures the effective use of the tools.
TRANSFORMATION INITIATIVES
The Company continued to execute on its strategy to be a premier software-industrial company and maintained an industry-leading return on invested capital by continuing to aggressively deploy capital into high-return opportunities such as asset-light businesses, including software and services with recurring revenue streams.
Honeywell Connected Enterprise
Delivered double-digit recurring connected software sales growth and connected software margin that is accretive to overall Honeywell segment margin.
|
|
|
|
Acquired Sine Group, a technology and SaaS company that provides visitor management, workplace, and supply chain solutions that are readily accessible with mobile devices. Sine’s technologies will support a cloud-based mobile platform for Honeywell Forge, Honeywell’s enterprise performance management offering, and Sine’s software will augment Honeywell’s Connected Buildings offerings with expanded safety, security, and compliance capabilities.
Announced a partnership with SAP to create a joint cloud-based solution to improve buildings by streamlining and combining operational and business data. This enables customers to benefit from building performance optimization, including reduced carbon footprint and lower energy cost as well as improved tenant experience. This will be especially useful as buildings come back online in the midst of the COVID-19 pandemic and economic crisis as building owners are expected to focus on key performance indicators tied to enhanced occupant safety and reduced operating costs.
Announced a new partnership between Honeywell and Microsoft that will reshape the industrial workplace. Honeywell Forge and Microsoft Dynamics Field Service will provide cloud-based predictive solutions to building owners and operators through closed-loop maintenance workflows, and by strengthening business continuity and improving operational efficiency. Moving forward, the two companies are exploring more ways to bring innovation to customers by integrating Honeywell Forge Solutions with Microsoft Azure services such as Azure Digital Twins or Azure Edge capabilities.
Supply Chain Transformation
Advanced the Company’s Integrated Supply Chain transformation initiative, which aims to drive over $0.5 billion in long-term, run-rate savings through improved material productivity, streamlined manufacturing footprint, and automation of procurement processes.
Reduced manufacturing square footage by 11% since 2018.
Invested over $20 million in robotics and automation to streamline processes, minimizing waste and maximizing yield; and planning to invest more in 2021 to drive meaningful improvements in year-over-year quality.
Embraced digitization to create end-to-end visibility into our supply chain, which makes the Company more agile and lean.
Leveraged Honeywell Forge to gain insights into manufacturing processes that can drive further improvements. These actions are helping to accelerate achievement of improved results for key metrics in the Company’s supply chain, including approximately $750 million of cumulative direct material productivity since 2018.
Honeywell Digital
Standardized business models and deployed them on an enterprise-wide basis using the Honeywell Digital playbook to run the Company with data-driven decision making. The Company is on track to deliver $0.5 billion in run rate benefits across sales, productivity, and working capital improvements.
Reduced ERP systems, websites, applications, and call centers, driving significant benefits across the entire value chain, including creating greater transparency of information, simplifying IT architecture, and delivering a better customer experience.
Deployed a more coherent IT architecture, including platforms and infrastructure which enabled effective, seamless work-from-home capabilities across approximately 60 countries and nearly 80,000 employees.
1 | Election of Directors | FOR each nominee | |||||||||
•Nominees were individually and | |||||||||||
Director Nominee | Years of Service | Independent | No. of Current Public Company Boards (Including Honeywell) | Committee Memberships (Effective April 25, 2022) | |||||||||||||||||||
Audit | CGRC | MDCC | |||||||||||||||||||||
Darius Adamczyk Chairman and CEO Honeywell International Inc. | 5 | No | 2 | ||||||||||||||||||||
D. Scott Davis (Lead Director) Retired Chairman and CEO United Parcel Service, Inc. | 16 | Yes | 2 | n | ex officio | ex officio | |||||||||||||||||
Duncan B. Angove Managing Partner Arcspring LLC | 4 | Yes | 1 | n | |||||||||||||||||||
William S. Ayer Retired Chairman and CEO Alaska Air Group, Inc. | 7 | Yes | 1 | n | n | ||||||||||||||||||
Kevin Burke Retired Chairman, President and CEO Consolidated Edison, Inc. | 12 | Yes | 1 | n | |||||||||||||||||||
Deborah Flint President and CEO Greater Toronto Airports Authority | 2 | Yes | 1 | n | |||||||||||||||||||
Rose Lee President and CEO Cornerstone Buildings Brands | 0 | Yes | 2 | n | |||||||||||||||||||
Grace D. Lieblein Former Vice President-Global Quality General Motors Corporation | 9 | Yes | 3 | n | n | ||||||||||||||||||
George Paz Retired Chairman and CEO Express Scripts | 13 | Yes | 2 | n | n | n | |||||||||||||||||
Robin L. Washington Former Executive Vice President and CFO Gilead Sciences | 9 | Yes | 4 | n |
|
YEAR IN REVIEW – EXECUTING THROUGH AN UNPRECEDENTED YEAR
In 2020, the Company performed with its usual level of operational rigor through the challenges of the global pandemic and economic downturn. Honeywell is proud of its work to quickly ramp up production of critical personal protective equipment to support frontline workers. The Company continued its balanced capital deployment strategy, raising its dividend for the eleventh time over ten consecutive years and completing three acquisitions. The Company also celebrated two key milestones in 2020: its return to the Dow Jones Industrial Average and its 100th anniversary as a publicly-listed company.
CREATING VALUE FOR STAKEHOLDERS
|
|
|
COMMITMENT TO SUSTAINABILITY
| Audit | Chair | ||||||||||
CGRC | Corporate Governance and Responsibility Committee |
| Member | |||||||||
MDCC | Management Development and |
|
2021 DIRECTOR NOMINEES
10 | 4 of 10 | 5 of 10 | 4 of 10 | 1 of 3 | 7 of 10 | 7.7 | ||||||||||||||||||||
nominees are independent |
nominees are women |
nominees are ethnically or racially diverse |
nominees were born outside the United States |
committees |
nominees have CEOexperience |
years average tenure | ||||||||||||||||||||
Nominee |
Title | Years of Service | Independent | No. of Current Public Company Boards (including Honeywell) | Committee Memberships (effective May 21, 2021) | |||||
Darius Adamczyk (Chairman and CEO) |
Chairman and Chief Executive Officer Honeywell International Inc.
|
4 |
No |
1 |
— | |||||
D. Scott Davis (Lead Director) |
Retired Chairman and Chief Executive Officer United Parcel Service, Inc.
|
15 |
Yes |
2 |
Audit Ex officio: CGRC, MDCC | |||||
Duncan B. Angove |
Managing Partner Arcspring LLC
|
3 |
Yes |
1 |
MDCC | |||||
William S. Ayer |
Retired Chairman and Chief Executive Officer Alaska Air Group, Inc.
|
6 |
Yes |
1 |
CGRC MDCC | |||||
Kevin Burke |
Retired Chairman, President and Chief Executive Officer Consolidated Edison, Inc.
|
11 |
Yes |
1 |
Audit | |||||
Deborah Flint |
President and Chief Executive Officer Greater Toronto Airports Authority
|
1 |
Yes |
1 |
CGRC | |||||
Judd Gregg |
Former Governor and U.S. Senator of New Hampshire |
10 |
Yes |
2 |
Audit CGRC (Chair)* MDCC
| |||||
Grace D. Lieblein |
Former Vice President-Global Quality General Motors Corporation
|
8 |
Yes |
3 |
MDCC (Chair) CGRC | |||||
Raymond T. Odierno |
Retired Four-Star General and United States Army
|
1 |
Yes |
2 |
CGRC | |||||
George Paz |
Retired Chairman and Chief Executive Officer Express Scripts Holding Company
|
12 |
Yes |
2 |
Audit (Chair) CGRC | |||||
Robin L. Washington |
Former Executive Vice President and Chief Financial Officer Gilead Sciences, Inc.
|
8 |
Yes |
4 |
Audit |
CGRC refers to the Corporate Governance and Responsibility Committee, and MDCC refers to the Management Development and Compensation Committee.
* Mr. Gregg’s membership on the CGRC and his appointment as its Chair will be effective upon his re-election to the Board at the Annual Meeting of Shareowners.
|
DIVERSE AND INDEPENDENT BOARD OF DIRECTORS |
|
CORPORATE GOVERNANCE HIGHLIGHTS
BEST-IN-CLASS BOARD STRUCTURE AND PROCESSES | ||||||
| 15% threshold for shareowners to call a special meeting | |||||
Majority shareowner vote to amend Certificate of Incorporation and By-laws | ||||||
Annual election of all directors, with majority shareowner vote requirement in uncontested elections | ||||||
No poison pill; we will seek shareowner approval if a shareowner rights plan is adopted | ||||||
Robust year-round shareowner engagement, with independent director participation | ||||||
Proxy access enabling shareowner(s) holding 3% of our stock for three years to include up to two director nominees (or nominees representing 20% of the Board) in our proxy | ||||||
| All director nominees are independent, except our CEO | |||||
Leader in Board diversity relative to personal characteristics | ||||||
Range of tenures enables balance between historical experience and fresh perspectives | ||||||
Skills and background aligned to our strategic direction | ||||||
No director may serve on more than four public company boards (including the Honeywell Board) | ||||||
Requirement to interview diverse candidates prior to selecting new Board members | Independent Lead Director elected by independent directors, with expanded responsibilities | |||||
ESG oversight by the CGRC Regular executive sessions of independent directors | ||||||
Lead Director and CGRC Chair empowered to call special Board meetings at any time for any reason | ||||||
Annual self-assessment to enable adequate Board refreshment and appropriate evolution of Board skills, experience, and | ||||||
perspectives Annual refresh of Corporate Governance Guidelines to ensure alignment with best practices | ||||||
Director stock ownership guidelines require equity holdings of at least 5x annual cash retainer |
ROBUST OVERSIGHT OF RISKS AND OPPORTUNITIES |
| |||||||
Robust Enterprise Risk Management (ERM) program to enable Board identification and monitoring of risk | ||||||||
Purposeful inclusion of key risk areas on Board and/or committee agendas | ||||||||
Engagement with business leaders to review short-term plans, long-term strategies, and associated risks | ||||||||
Incentive compensation not overly leveraged and with maximum payout caps and design features intended to balance pay for performance with the appropriate level of risk-taking | ||||||||
Robust stock ownership requirements and | ||||||||
Clawbacks in the event of a significant financial restatement | ||||||||
Combined Corporate Secretary and Chief Compliance Officer roles to facilitate Board oversight of compliance risk | ||||||||
| Code of Business Conduct applies to all directors, officers, and employees, with 100% certification by officers and employees where permitted by law | |||||||
Suppliers expected to comply with published Supplier Code of Business Conduct, including conflict minerals, anti-human trafficking, human rights, business integrity, and health, safety, and environmental policies | ||||||||
Strong adherence to foundational principles of Integrity and Ethics, Inclusion and Diversity, and Workplace Respect, while fostering a performance culture based on Honeywell Behaviors | ||||||||
Over 50% of executive officers are diverse by ethnic background, place of birth (non-U.S.), or gender | ||||||||
No use of corporate funds for political contributions; robust oversight of and transparency into political activities | ||||||||
|
| 2022 |
|
EXECUTIVE COMPENSATION SNAPSHOT
Proposal | Advisory Vote to Approve Executive Compensation | FOR | ||||||
•Honeywell's executive compensation program appropriately aligns executive compensation with Company and individual performance | ||||||||
WHAT WE DO |
| |||||||||
| ||||||||||
|
|
| ||||||||
| Performance |
|
| |||||||
|
|
|
| |||||||
| Goals |
|
| |||||||
|
|
| Change-in-Control | |||||||
Link to Strategy and Performance | Target Compensation Mix | |||||||||||||||||||
Element | Description | CEO | Other NEOs | |||||||||||||||||
Base Salary | •Base salaries are determined based on scope of responsibility, years of experience, and individual performance. | •To attract and compensate high-performing and experienced leaders at a competitive level of cash compensation. | ||||||||||||||||||
Annual Incentive Compensation Plan (ICP) | •80% based on formulaic determination against pre-established financial metrics. •20% based on assessment of individual performance. | •To motivate and reward executives for achieving annual corporate, business unit, and functional goals in key areas of financial and operational performance. | ||||||||||||||||||
Performance Stock Units (PSUs) (2021–2023) | •CEO and entire Leadership Team*: 50% of annual LTI •Covers three-year period •Relative total shareowner return (TSR) (25% weight) along with key financial metrics (75% weight) | •Focuses executives on the achievement of specific long-term | ||||||||||||||||||
|
|
|
| |||||||||||||||||
|
|
|
| |||||||||||||||||
| •CEO and entire Leadership Team*: 35% of annual LTI |
•Directly aligns the interest of our executives with shareowners. Stock options only have value for executives if operating performance results in stock price appreciation. | ||||||||||||||||||
Restricted Stock Units (RSUs) | •CEO and entire Leadership Team*: 15% of annual LTI | •Strengthens key executive retention over relevant time periods to | ||||||||||||||||||
|
|
Leadership Team refers to all direct CEO staff officers in 2021, which includes all NEOs.
Notice and Proxy Statement | 2022 | 15 |
NEO |
Position |
|
Base Salary |
|
|
Annual Incentive Plan (ICP)(1) |
|
|
2020-2022 Performance Plan Units(2) |
|
|
Stock Options(3) |
|
|
Restricted Stock |
|
|
Total Annual Direct Compensation |
| |||||||
Darius Adamczyk | Chairman and CEO | $ | 1,566,154 | $2,508,000 | $7,014,804 | $4,898,608 | $2,098,672 | $18,086,238 | ||||||||||||||||||
Gregory P. Lewis | SVP, Chief Financial Officer | $ | 753,711 | $ 689,000 | $2,168,555 | $1,502,982 | $ 633,220 | $ 5,747,468 | ||||||||||||||||||
Anne T. Madden | SVP, General Counsel | $ | 825,529 | $ 758,000 | $2,168,555 | $1,502,982 | $ 633,220 | $ 5,888,286 | ||||||||||||||||||
Rajeev Gautam | President and CEO, Performance Materials and Technologies | $ | 768,394 | $ 503,000 | $2,111,984 | $1,468,726 | $ 615,128 | $ 5,467,232 | ||||||||||||||||||
John F. Waldron | President and CEO, Safety and Productivity Solutions | $ | 704,769 | $ 908,000 | $1,753,701 | $1,224,652 | $ 524,668 | $ 5,115,790 |
NEO | Position | Base Salary | Annual Incentive Plan (ICP)(1) | 2021-2023 Performance Stock Units(2) | Stock Options(3) | Restricted Stock Units(4) | Total Annual Direct Compensation | ||||||||||||||||||||||||||||||||||
Darius Adamczyk | Chairman and CEO | $ | 1,675,616 | $ | 3,910,000 | $ | 7,502,309 | $ | 5,248,350 | $ | 2,229,920 | $ | 20,566,195 | ||||||||||||||||||||||||||||
Gregory P. Lewis | SVP, Chief Financial Officer | $ | 830,493 | $ | 1,107,000 | $ | 2,359,083 | $ | 1,643,520 | $ | 689,248 | $ | 6,629,344 | ||||||||||||||||||||||||||||
Anne T. Madden | SVP, General Counsel | $ | 869,458 | $ | 1,159,000 | $ | 2,359,083 | $ | 1,643,520 | $ | 689,248 | $ | 6,720,309 | ||||||||||||||||||||||||||||
Que Thanh Dallara | President and CEO, Honeywell Connected Enterprise | $ | 676,466 | $ | 804,000 | $ | 1,955,276 | $ | 1,364,250 | $ | 567,616 | $ | 5,367,608 | ||||||||||||||||||||||||||||
Michael R. Madsen | President and CEO, Aerospace | $ | 737,052 | $ | 827,000 | $ | 1,572,722 | $ | 1,094,610 | $ | 466,256 | $ | 4,697,640 |
|
|
|
|
3 | Approval of Independent Accountants | FOR | ||||||||
|
Proposal 4 | Shareowner Proposal — Special Shareholder Meeting Improvement | AGAINST | ||||||
•Honeywell's Board opposes the shareowner proposal for the following reasons: –Shareowners holding 15% of our outstanding shares already have the right to call a special meeting (either in-person or in a virtual format) at any time –Our robust shareowner outreach and engagement program provides shareowners with numerous avenues to voice their opinion and encourage Board accountability and responsiveness to shareowner feedback –In an unsolicited change in control scenario, the ability for a small minority of shareowners to call a special meeting can undermine the Board's ability to obtain the highest value for existing shareowners –A reduction in shareowner ownership threshold to call a special meeting is unnecessary given related Honeywell corporate governance best practices that are already in place |
Proposal 5 | Shareowner Proposal — Climate Lobbying Report | AGAINST | ||||||
•Shareowner proposal requesting that the Board conduct an evaluation and issue a report describing alignment of Honeywell's lobbying activities with the Paris Agreement and how Honeywell plans to mitigate risk presented by any misalignment, if properly presented at the meeting •Honeywell's Board opposes the shareowner proposal because the Company has issued a report that substantially complies with the above request – the report is available at investor.honeywell.com (see “ESG/ESG Information”) |
Proposal 6 | Shareowner Proposal — Environmental and Social Due Diligence | AGAINST | ||||||
•Shareowner proposal requesting that the Board report on Honeywell's due diligence process to identify and address environmental and social risks related to emissions, spills, or discharges from Honeywell's operations and value chain •Honeywell's Board opposes the shareowner proposal because the Company has issued a report that substantially complies with the above request – the report is available at investor.honeywell.com (see “ESG/ESG Information”) |
16 | Notice and Proxy Statement | 2022 |
|
ELECTION OF DIRECTORS
DIRECTOR SKILLS AND QUALIFICATIONS
I STRATEGIC SKILLS
Global Experience. Growing sales outside of the United States, particularly in what the Company considers “high growth regions” or “HGRs” a central part of its long-term strategy for growth. Hence, exposure to markets and economies outside of the United States is an important qualification for Honeywell directors. This exposure can take many forms, including government affairs, regulatory, managerial, or commercial.
Regulated Industries/Government Experience. Honeywell is subject to a broad array of government regulations, and demand for its products and services can be impacted by changes in law or regulation in areas such as aviation safety, security, and energy efficiency. It is important to have directors with experiences in government and regulated industries that provide them with insight and perspective in working constructively and proactively with governments and agencies globally.
Innovation and Technology. With Honeywell’s transformation to a software-industrial company in the digital age, expertise in combining software programming capabilities with leading-edge physical products and domain knowledge is critical to opening and securing new growth paths for all of Honeywell’s businesses.
Marketing. Developing new markets for products and services is critical for driving growth. The Company’s directors who have that expertise provide a much-desired perspective on how to better market and brand Honeywell’s products and services.
Industries, End Markets, and Growth Areas. Experience in industries, end markets, and growth areas that Honeywell serves enables a better understanding of the issues facing these businesses. These areas include our Commercial Aerospace, Industrial Productivity, Non-Residential, Oil and Gas / Petrochemical, Defense and Space, and Specialty Chemicals end markets as well as growth areas such as life sciences and sustainable technology solutions.
I CORE COMPETENCIES
Senior Leadership Experience. Experience serving as CEO or a senior executive as well as hands-on leadership experience in core management areas – such as strategic and operational planning, financial reporting, compliance, risk management, and leadership development – provide a practical understanding of complex organizations like Honeywell.
Public Company Board Experience. Service on the boards and board committees of other public companies provides an understanding of corporate governance practices and trends and insights into board management, relations between the board, the CEO and senior management, agenda setting, and succession planning.
Risk Management. In light of the Board’s role in risk oversight and the Company’s robust Enterprise Risk Management program, Honeywell seeks directors who can help identify, manage, and mitigate key risks, including cybersecurity, regulatory compliance, competition, brand integrity, human capital, and intellectual property.
Financial Expertise. The Company believes an understanding of finance and financial reporting processes is important for its directors to enable them to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. Honeywell seeks directors with background and experience in capital markets, corporate finance, accounting, and financial reporting.
|
|
|
The Honeywell Board adopted a skills and experience matrix to facilitate the comparison of its directors’ skills versus those deemed necessary to oversee the Company’s current strategy. The skills included in the matrix are evaluated against the Company’s articulated strategy each year so that the matrix can serve as an up-to-date tool for identifying director nominees who collectively have the complementary experience, qualifications, skills, and attributes to guide the Company. Honeywell’s 2021 Board skillset matrix reflecting the characteristics of its director nominees is below.
|
|
|
COMMITMENT TO BOARD INTEGRITY,
DIVERSITY, AND INDEPENDENCE
In addition to ensuring that director nominees possess the requisite skills and qualifications, the CGRC places an emphasis on ensuring that nominees demonstrate the right leadership traits, personality, work ethic, independence, and diversity of background to align with the Company’s performance culture and long-term strategic vision. Specifically, these criteria include:
Exemplification of the highest standards of personal and professional integrity.
Potential contribution to the diversity and culture of the Board, including by virtue of age, educational background, global perspective, gender, ethnicity, and nationality.
Independence from management under applicable securities law, listing regulations, and Honeywell’s Corporate Governance Guidelines.
Willingness to constructively challenge management through active participation in Board and committee meetings.
Ability to devote sufficient time to performing their Board and committee duties.
While the CGRC does not prescribe a diversity policy or standard, as a matter of practice, the Company is committed to enhancing both the diversity of the Board itself and the perspectives and values that are represented in Board and committee meetings. Honeywell’s slate of director nominees reflects this approach and the Board’s commitment to diversity.
The CGRC believes that, in addition to diversity of personal characteristics and experiences, diversity of service tenures on the Honeywell Board also facilitates effective Board oversight. Directors with many years of service to Honeywell provide the Board with a deep knowledge of the Company, while newer directors lend fresh perspectives.
|
|
|
|
|
| ||||||
|
|
| ||||||
|
|
|
|
|
| ||||||
|
|
| ||||||
|
|
|
|
|
| ||||||
|
|
| ||||||
|
|
|
|
|
| ||||||
|
|
| ||||||
* Mr. Gregg’s membership on the CGRC and his appointment as its Chair will be effective upon his re-election to the Board at the Annual Meeting of Shareowners.
|
|
|
|
|
| ||||||
|
|
| ||||||
|
|
|
|
|
| ||||||
NOMINATION AND ELECTION PROCESS
Honeywell’s directors are elected at each Annual Meeting of Shareowners and hold office for one-year terms until the next Annual Meeting of Shareowners and until their successors have been duly elected and qualified. Honeywell’s By-laws provide that in any uncontested election of directors (an election in which the number of nominees does not exceed the number of directors to be elected), any nominee who receives a greater number of votes cast “FOR” his or her election than votes cast “AGAINST” his or her election (excluding abstentions) will be elected to the Board of Directors. The By-laws also provide that any incumbent nominee who does not receive a majority of votes cast in an uncontested election is expected to promptly tender his or her resignation to the Chairman of the Board following the certification of the shareowner vote. This resignation will be promptly considered through a process managed by the CGRC, excluding any director nominees who did not receive a majority of votes cast to elect him or her to the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR |
Notice and Proxy Statement | 2022 | 17 |
STRATEGIC SKILLS | STRATEGIC SKILLS | ||||||||||||||||||||||||||||||||||||||||
Global Experience Growing sales outside of the United States, particularly in what the Company considers “high growth regions” or “HGRs” is a central part of its long-term strategy for growth. Hence, exposure to markets and economies outside of the United States is an important qualification for Honeywell directors. This exposure can take many forms, including government affairs, regulatory, managerial, orcommercial. | Regulated Industries/ Government Experience Honeywell is subject to a broad array of government regulations, and demand for its products and services can be impacted by changes in law or regulation in areas such as aviation safety, security, and energy efficiency. It is important to have directors with experiences in government and regulated industries that provide them with insight and perspective in working constructively and proactively with governments and agencies globally. | Innovation and Technology With Honeywell’s transformation to a software-industrial company in the digital age, expertise in combining software programming capabilities with leading-edge physical products and domain knowledge is critical to opening and securing new growth paths for all of Honeywell’s businesses. | Marketing Developing new markets for products and services is critical for driving growth. The Company’s directors who have that expertise provide a much-desired perspective on how to better market and brand Honeywell’s products and services. | Industries, End- Markets, and Growth Areas Experience in industries, end markets, and growth areas that Honeywell serves enables a better understanding of the issues facing these businesses. These areas include our Commercial Aerospace, Industrial Productivity, Non-Residential, Oil and Gas / Petrochemical, Defense and Space, and Specialty Chemicals end markets as well as growth areas such as life sciences and sustainable technology solutions. | ESG Experience in environmental, social, and governance (ESG) matters enables management of ESG risks and opportunities as strategic business imperatives. With ESG at the forefront of Honeywell’s long-term strategy, it is important to have directors with expertise in products and solutions that support more sustainable outcomes, climate change drivers and impacts, corporate social responsibility, human capital management, inclusion and diversity, and corporate ethics. |
CORE COMPETENCIES | |||||||||||||||||||||||||||||
Senior Leadership Experience Experience serving as CEO or a senior executive as well as hands-on leadership experience in core management areas – such as strategic and operational planning, financial reporting, compliance, risk management, and leadership development – provide a practical understanding of complex organizations like Honeywell. | Public Company Board Experience Service on the boards and board committees of other public companies provides an understanding of corporate governance practices and trends and insights into board management, relations between the board, the CEO and senior management, agenda setting, and succession planning. | Risk Management In light of the Board’s role in risk oversight and the Company’s robust Enterprise Risk Management program, Honeywell seeks directors who can help identify, manage, and mitigate key risks, including cybersecurity, regulatory compliance, competition, brand integrity, human capital, and intellectual property. | Financial Expertise The Company believes an understanding of finance and financial reporting processes is important for its directors to enable them to monitor and assess the Company’s operating and strategic performance and to ensure accurate financial reporting and robust controls. Honeywell seeks directors with background and experience in capital markets, corporate finance, accounting, and financial reporting. |
| 2022 |
Global Experience | |||||||||||||||||||||||||||||||||||
Regulated Industries/ Government Experience | |||||||||||||||||||||||||||||||||||
Innovation and Technology | |||||||||||||||||||||||||||||||||||
Marketing | |||||||||||||||||||||||||||||||||||
Industries, End-Markets & Growth Areas | |||||||||||||||||||||||||||||||||||
ESG | |||||||||||||||||||||||||||||||||||
Senior Leadership Experience (most senior position held) | Chair and CEO | Chair and CEO | Presi-dent | Chair and CEO | Chair and CEO | CEO | CEO | VP | Chair and CEO | CFO | |||||||||||||||||||||||||
No. of Public Company Boards | 2 I 1 | 2I 2 | 1I 0 | 1I 2 | 1I 1 | 1I 0 | 2 I 1 | 3I 0 | 2I 1 | 4 I 2 | |||||||||||||||||||||||||
Risk Management | |||||||||||||||||||||||||||||||||||
Financial Expertise | |||||||||||||||||||||||||||||||||||
Gender | Male | Male | Male | Male | Male | Female | Female | Female | Male | Female | |||||||||||||||||||||||||
Race/Ethnicity | White | White | White | White | White | Black | Asian | Hispanic | Hispanic | Black | |||||||||||||||||||||||||
Technical Expertise (direct hands-on experience or subject-matter expert during his/her career) | |||||
Managerial Expertise (expertise derived through direct managerial experience) | |||||
Working Knowledge (experience derived through investment banking, private equity investing, serving as a member of a relevant board committee at Honeywell or at another public company, or serving as an executive officer or on the board of a public company in the relevant industry) |
Notice and Proxy Statement | 2022 | 19 |
Diversity of Nominees | Tenure | ||||
Female | Male | Non-Binary | Did Not Disclose Gender | |||||||||||
PART I: GENDER IDENTITY | ||||||||||||||
Directors | 4 | 6 | — | — | ||||||||||
PART II: DEMOGRAPHIC BACKGROUND | ||||||||||||||
African American or Black | 2 | — | — | — | ||||||||||
Alaskan Native or Native American | — | — | — | — | ||||||||||
Asian | 1 | — | — | — | ||||||||||
Hispanic or Latinx | 1 | 1 | — | — | ||||||||||
Native Hawaiian or Pacific Islander | — | — | — | — | ||||||||||
White | — | 5 | — | — | ||||||||||
Two or More Races or Ethnicities | — | — | — | — | ||||||||||
LGBTQ+ | — | — | — | — | ||||||||||
Did Not Disclose Demographic Background | — | — | — | — |
20 | Notice and Proxy Statement | 2022 |
Background •Chairman and Chief Executive Officer of Honeywell International Inc. since April 2018. •Was President and Chief Executive Officer from March 2017 to April 2018 and Chief Operating Officer from April 2016 to March 2017. •Served as President and CEO of Honeywell Performance Materials and Technologies (PMT) from April 2014 to April 2016. •Served as President of Honeywell Process Solutions from 2012 to 2014 and as President of Honeywell Scanning and Mobility from 2008 to 2012. •Joined Honeywell in 2008 when Honeywell acquired Metrologic, Inc., where he was the Chief Executive Officer. •Previously held several general management assignments at Ingersoll Rand, served as a senior associate at Booz Allen Hamilton, and started his career as an electrical engineer at General Electric. | ||||||||||||||||||||
DARIUS ADAMCZYK Chairman and Chief Executive Officer, Honeywell International Inc. Years of Service: 5 Age: 56 | ||||||||||||||||||||
Other Current Public Company Boards: •Johnson & Johnson | Past Public Company Boards: •Garrett Motion Inc. | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Senior leadership roles in global organizations, both large and small. •Deep understanding of software, both technically and commercially, and a proven track record in growing software-related businesses at Honeywell. •Demonstrated ability to deliver financial results as a leader in a variety of different industries, with disparate business models, technologies, and customers. •Strategic leadership skills necessary to grow Honeywell sales organically and inorganically while meeting the challenges of a constantly changing environment across Honeywell’s diverse business portfolio. | ||||||||||||||||||||
|
Background •Managing Partner of Arcspring LLC, a next-generation private equity firm that combines capital, technology, operational expertise, and design-thinking to unlock exponential growth, since 2019. •Was President of Infor, Inc., a privately held provider of enterprise software and a strategic technology partner for more than 90,000 organizations worldwide, from 2010 to 2018. Infor’s software is purpose-built for specific industries, from manufacturing to healthcare, providing complete suites that are designed to support end-to-end business processes and digital transformation. •Served as the Senior Vice President and General Manager of the Retail Global Business Unit of Oracle Corporation, a global technology provider of enterprise software, hardware, and services, from 2005 to 2010. •Joined Oracle through its acquisition of Retek Inc., then a publicly-traded provider of software solutions and services to the retail industry, where he served in various roles of increasing responsibility from 1997 until 2005. | ||||||||||||||||||||
DUNCAN B. ANGOVE Managing Partner, Arcspring LLC Years of Service: 4 Age: 55 Committees: •Management Development and Compensation | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •None | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Senior technology industry leader with global operating experience, including in software and digital transformation, and skilled at driving value creation. •Deep understanding of the trends across enterprise cloud, infrastructure software, digital, and the Internet of Things, and the corresponding risks, including cybersecurity and data privacy compliance. •Extensive experience in corporate strategy, mergers and acquisitions, sales, marketing, and business and product development. | ||||||||||||||||||||
Notice and Proxy Statement | 2022 | 21 |
Background •Retired Chairman and Chief Executive Officer of Alaska Air Group, Inc. (Alaska Air Group), the parent company of Alaska Airlines and its sister carrier, Horizon Air. •Served as Chief Executive Officer of Alaska Air Group and its subsidiaries through 2012, and as Chairman through 2013. •A veteran of more than three decades in aviation, he began his career with Horizon Air in 1982, where he held a variety of marketing and operations positions. •Joined Alaska Airlines in 1995 as Vice President of Marketing and Planning, and subsequently held the posts of Senior Vice President, Chief Operating Officer, and President. Became Alaska Air Group’s Chief Executive Officer in 2002, and, in May 2003, he was appointed Chairman. •Previously served on the Board of Directors of the Seattle Branch of the Federal Reserve Bank of San Francisco. | ||||||||||||||||||||
WILLIAM S. AYER Retired Chairman and Chief Executive Officer, Alaska Air Group, Inc. Years of Service: 7 Age: 67 Committees: •Corporate Governance and Responsibility (Chair, effective April 25, 2022) •Management Development and Compensation | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •Alaska Air Group, Inc. •Puget Sound Energy, Inc. and Puget Energy, Inc. | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Deep aerospace industry knowledge as well as sales, marketing, and operations experience through his three decades of leadership roles at Alaska Air Group, a company recognized for its best-in-class operating metrics among U.S. air carriers. •Proven leadership skills in developing a business enterprise that can deliver long-term, sustained excellence based on a management style that includes a relentless focus on the customer, continuous improvement, and building a culture of safety, innovation, sustainability, and diversity. •Understanding of the U.S. public utility industry through his service as a director on the board of directors of Puget Energy. | ||||||||||||||||||||
Background •Retired Chairman, President, and Chief Executive Officer of Consolidated Edison, Inc. (Con Edison), a utility provider of electric, gas, and steam services. •Served as President and Chief Executive Officer from 2005 through 2013, and served as Chairman from 2006 through April 2014. •Joined Con Edison in 1973 and held positions of increasing responsibility in system planning, engineering, law, nuclear power, construction, and corporate planning, including Senior Vice President with responsibility for customer service and for Con Edison’s electric transmission and distribution systems, President of Orange and Rockland Utilities, Inc., a subsidiary of Con Edison, and Chief Executive Officer of Consolidated Edison Company of New York, Inc. •Member of the Board of Trustees of Consolidated Edison Company of New York, Inc. until May 2015. | ||||||||||||||||||||
KEVIN BURKE Retired Chairman, President, and Chief Executive Officer, Consolidated Edison, Inc. Years of Service: 12 Age: 71 Committees: •Audit | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •Consolidated Edison, Inc. | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Extensive management expertise gained through various executive positions, including senior leadership roles, at Con Edison. •Wealth of experience in energy production and distribution, energy efficiency, alternative energy sources, engineering and construction, government regulation, and development of new offerings. •Significant expertise in developing clean and renewable energy infrastructure technology used in clean energy, solar generation, and other energy efficient products and services. •Oversaw the implementation of financial and management information systems, utility operational systems, and process simulators. •Deep knowledge of corporate governance and regulatory issues facing the energy, utility, and service industries. | ||||||||||||||||||||
22 | Notice and Proxy Statement | 2022 |
Background •Joined United Parcel Service, Inc. (UPS), a leading global provider of package delivery, specialized transportation, and logistics services in 1986. •Served as the non-Executive Chairman of UPS from September 2014 until May 2016 and as Chairman and Chief Executive Officer from January 1, 2008 to September 2014. •Served as Vice Chairman starting December 2006 and as Senior Vice President, Chief Financial Officer and Treasurer starting January 2001 prior to serving as Chairman and Chief Executive Officer. •Previously held various leadership positions with UPS, primarily in the finance and accounting areas. •Served a critical role in helping UPS to reinvent itself into a technology company. •Chief Executive Officer of II Morrow Inc., a technology company and developer of general aviation and marine navigation instruments, prior to joining UPS. •A Certified Public Accountant. •Previously served on the Board of Directors of the Federal Reserve Bank of Atlanta 2003-2009, serving as Chairman in 2009. | ||||||||||||||||||||
D. SCOTT DAVIS Retired Chairman and Chief Executive Officer, United Parcel Service, Inc. Years of Service: 16 Age: 70 Lead Director Committees: •Audit •Corporate Governance and Responsibility (ex officio) •Management Development and Compensation (ex officio) | ||||||||||||||||||||
Other Current Public Company Boards: •Johnson & Johnson | Past Public Company Boards: •United Parcel Service, Inc. •EndoChoice Holdings, Inc. | |||||||||||||||||||
•Significant expertise in management, strategy, finance, and operations gained over 25 years at UPS, including through senior leadership roles. •Financial management expertise, including financial reporting, accounting, and controls. •Strong banking experience and a deep understanding of public policy and global economic indicators. •Extensive experience in the global transportation and logistics services industry. •In-depth understanding of technology and software solutions that support automated and web-based shipping, tracking, and specialized transportation logistics. | ||||||||||||||||||||
Background •President and Chief Executive Officer of the Greater Toronto Airports Authority since April 2020. •Served as Chief Executive Officer of Los Angeles World Airports (LAWA) from June 2015 to March 2020, and had previously held roles of increasing responsibility at the Port of Oakland for 23 years. •Currently serves as a director on the Airport Council International World Board and is the Board Chair of the World Standing Safety and Technical Committee. •Previously served on President Obama’s Advisory Committee on Aviation Consumer Protection and as the Chair of the Oversight Committee of the Transportation Research Board’s Airport Cooperative Research Program. •Co-chaired the Blue Ribbon Task Force on UAS Mitigation at Airports and served as a federal appointee to the U.S. Department of Transportation’s Drone Advisory Committee. •Previously served on the Board of Directors of the Los Angeles Branch of the Federal Reserve Bank of San Francisco. | ||||||||||||||||||||
DEBORAH FLINT President and Chief Executive Officer, Greater Toronto Airports Authority Years of Service: 2 Age: 54 Committees: •Corporate Governance and Responsibility | ||||||||||||||||||||
Other Current Public Company Boards: •None | Past Public Company Boards: •None | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Broad understanding of transportation networks and cybersecurity risk management. •Deep experience in critical infrastructure, connected buildings, and advanced security solutions. •Oversaw the fourth busiest passenger airport in the world, the largest airport police force in the United States, and the largest public works agreements in the history of Los Angeles. •Significant insight and experience in public and private partnerships. | ||||||||||||||||||||
Notice and Proxy Statement | 2022 | 23 |
Background •President, Chief Executive Officer and board member of Cornerstone Building Brands, a leading manufacturer of exterior building products in North America, since September 2021. •Served as President of the DuPont Water & Protection business, focusing on improving sustainability through the company’s water, shelter, and safety solutions, through August 2021. •Joined DuPont in 2015 as Global Business Director, DuPont™Kevlar® and Aramid Intermediates, assumed the role of President, DuPont Protection Solutions in 2016, and was named President, Safety & Construction in 2017. •Previously spent 15 years with Saint-Gobain in a number of general management, strategic planning, and information technology roles, serving construction, transportation, energy, and defense sectors. •Held various engineering and management positions at Pratt & Whitney, a Raytheon Technologies company, andwas a senior consultant at Booz Allen Hamilton in New York City. •Previously served as a member of the Economic Advisory Council for the Federal Reserve Bank of Philadelphia and is a member of the Forum of Executive Women. | ||||||||||||||||||||
ROSE LEE President and Chief Executive Officer Cornerstone Building Brands Years of Service: 0 Age: 56 Committees: •Management Development and Compensation (effective April 25, 2022) | ||||||||||||||||||||
Other Current Public Company Boards: •Cornerstone Building Brands | Past Public Company Boards: •Crown Holdings Inc. | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Extensive ESG experience, including a focus on improving sustainability through water, shelter and safety solutions and spearheading initiatives that have advanced minorities, women, and veterans. •Deep understanding of construction, transportation, energy, and defense sectors. •Significant knowledge of aerospace and mechanical engineering, and experience working on projects ranging from implementing lean manufacturing to designing a 3-D turbine for aircraft jet engines. •Unique blend of leadership skills and deep knowledge of operations and technology, cybersecurity risk management, and strategic planning. | ||||||||||||||||||||
Background •Served as Vice President, Global Quality of General Motors (GM), a company that designs, manufactures and markets cars, crossovers, trucks, and automobile parts worldwide, from November 2014 to March 2016. •Served in multiple leadership roles at GM, including Vice President, Global Purchasing and Supply Chain from December 2012 to November 2014, GM Brazil President and Managing Director from June 2011 until December 2012, GM Mexico President and Managing Director from January 2009 until June 2011, and Vehicle Chief Engineer from October 2004 to January 2009. •Joined GM in 1978 as a co-op student at the General Motors Assembly Division in Los Angeles and held a variety of leadership positions at GM in engineering, product development, and manufacturing. | ||||||||||||||||||||
GRACE D. LIEBLEIN Former Vice President-Global Quality, General Motors Corporation Years of Service: 9 Age: 61 Committees: •Management Development and Compensation (Chair) •Corporate Governance and Responsibility | ||||||||||||||||||||
Other Current Public Company Boards: •Southwest Airlines Co. •American Tower Corporation | Past Public Company Boards: •None | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Wide-ranging management and operating experience gained through various executive positions during an extensive career at GM. •Significant expertise in supply chain management, global manufacturing, engineering, technology, and product design and development. •International business, operations, and finance experience gained through senior leadership positions in Brazil and Mexico. | ||||||||||||||||||||
24 | Notice and Proxy Statement | 2022 |
Background •Served as Chairman of the Board of Express Scripts Holding Company (Express Scripts), a pharmacy benefit management company, from May 2006 until its acquisition by Cigna in December 2018, as Chief Executive Officer from April 2005 to May 2016, and as President from October 2003 to February 2014. •First became a director of Express Scripts in January 2004. •Joined Express Scripts as Senior Vice President and Chief Financial Officer in January 1998 and continued to serve as its Chief Financial Officer following his election as President until April 2004. •A Certified Public Accountant. •Previously served on the Board of Directors of the Federal Reserve Bank of St. Louis, Missouri. | ||||||||||||||||||||
GEORGE PAZ Retired Chairman and Chief Executive Officer, Express Scripts Holding Company Years of Service: 13 Age: 66 Committees: •Audit (Chair) •Corporate Governance and Responsibility •Management Development and Compensation (effective April 25, 2022) | ||||||||||||||||||||
Other Current Public Company Boards: •Prudential Financial, Inc. | Past Public Company Boards: •Express Scripts Holding Company | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Significant management and finance experience gained through senior leadership positions at Express Scripts. •Financial expertise, including in tax, financial reporting, accounting, and controls. •Information technology, data privacy, and cyber expertise in the healthcare and pharmaceutical industries and a strong track record of developing automated solutions in the healthcare marketplace. •Developed technologies for adjudication, compliance, prior authorization, and safety standards in healthcare. •Extensive experience in corporate finance, insurance and risk management, mergers and acquisitions, capital markets, government regulation, and employee health benefits. | ||||||||||||||||||||
Background •Served as Executive Vice President and Chief Financial Officer of Gilead Sciences, Inc. (Gilead), a research-based biopharmaceutical company, from May 2008 through October 2019. In that role, she oversaw Gilead’s Global Finance, Investor Relations, and Information Technology organizations. •Served as Chief Financial Officer of Hyperion Solutions, an enterprise software company that was acquired by Oracle Corporation in March 2007, from 2006 through 2007. •Previously spent nearly 10 years at PeopleSoft, a provider of enterprise application software, where she served in a number of executive positions, including Senior Vice President and Corporate Controller. •A Certified Public Accountant. | ||||||||||||||||||||
ROBIN L. WASHINGTON Former Executive Vice President and Chief Financial Officer, Gilead Sciences, Inc. Years of Service: 9 Age: 59 Committees: •Audit | ||||||||||||||||||||
Other Current Public Company Boards: •Alphabet Inc. •Salesforce.com Inc. •Vertiv Group Corp. | Past Public Company Boards: •Tektronix, Inc. •MIPS Technologies, Inc. | |||||||||||||||||||
Specific Qualifications, Attributes, Skills, and Experience | ||||||||||||||||||||
•Extensive management, operational, cyber, and accounting experience in the healthcare and information technology industries. •Financial expertise, including in tax, financial reporting, accounting and controls, corporate finance, mergers and acquisitions, and capital markets. •Broad experience on corporate governance issues gained through public company directorships. | ||||||||||||||||||||
Notice and Proxy Statement | 2022 | 25 |
| ||||||
Year |
| |||||
| ||||||
•Published | ||||||
•Initiated significant changes to our executive compensation | ||||||
| ||||||
| ||||||
2017 |
| |||||
•Amended Corporate Governance Guidelines to improve | ||||||
• | ||||||
| ||||||
| ||||||
2018 | •Nominated a new director for election to the Board by our shareowners under an enhanced recruitment process | |||||
•Reduced ownership threshold to call a special meeting of shareowners from 20% to 15% | ||||||
2019 | •Adopted executive approval requirements to increase oversight of trade association memberships | |||||
| ||||||
•Reduced the total number of public company boards | ||||||
•Formalized equivalency of independent Lead Director and independent Chairman roles and responsibilities •Amended committee charters to formalize areas of risk oversight responsibility | ||||||
|
Year |
| |||||
| ||||||
• •ESG reporting in-line with SASB and TCFD •Proactive refreshment of •Established a bi-partisan Political Contributions Advisory Board to ensure alignment of HIPAC political contributions with | ||||||
2021 | • •Assigned responsibility for oversight of overall ESG performance, strategy, and risks to the Corporate Governance and Responsibility Committee •ESG considerations integrated into enterprise risk management framework •Appointed Chief Sustainability Officer, Chief Inclusion and Diversity | |||||
| ||||||
2022 | • •Political •Commitment to publicly disclose the | |||||
|
Comprehensive Governance and Disclosure Practices |
|
The Company’s shareowner and investor outreach and engagement take many forms. The Company participates in numerous investor conferences and analyst meetings, holds its own investor events, some of which focus on individual businesses held at Honeywell facilities, and meet one-on-one with shareowners in a variety of contexts and forums. As part of Honeywell’s governance-focused shareowner engagement program, members of the Board, including the Lead Director or the CGRC Chair, participate in many of these meetings to discuss a range of Environmental, Social, and Governance (ESG) matters, including executive compensation, corporate governance, and sustainability. In addition, Honeywell’s Chairman and Chief Executive Officer, Chief Financial Officer, Vice President of Investor Relations and other senior management engage with shareowners on a frequent basis throughout the year to discuss Honeywell’s strategy and financial and business performance and to provide updates on key developments.
Shareowner engagement during 2020 was robust. The Company held 32 one-on-one meetings with shareowners during 2020 (representing approximately 38% of outstanding shares) to discuss a wide range of business performance and ESG topics. In addition, the Company’s Chairman and Chief Executive Officer, Chief Financial Officer, and other executive officers hosted 105 one-on-one or small group shareowner meetings to discuss business performance, strategy, end-markets, and overall competitive landscape while seeking shareowner feedback.
I GOVERNANCE-FOCUSED SHAREOWNER ENGAGEMENT PROGRAM
| ||||||||
SHAREOWNER ENGAGEMENT IN 2021 Shareowner engagement during 2021 was robust. The Company’s shareowner and investor outreach and engagement take many forms: | ||||||||
The Company participates in numerous investor conferences and analyst meetings, holds its own investor events, some of which focus on individual businesses held at Honeywell facilities, and meets one-on-one with shareowners in a variety of contexts and forums. |
| In addition, the Company’s Chairman and Chief Executive Officer, Chief Financial Officer, and other executive officers hosted >100 one-on-one or small group shareowner meetings to discuss business performance, strategy, end-markets, and overall competitive landscape while seeking shareowner feedback. | ||||||
|
I 2020 SHAREOWNER ENGAGEMENT FOCUS AREAS
60 | |||||||||||
shareowners received invitationsto participate in one-on-one dialogue focused on ESG matters, representing 56%of outstanding shares | |||||||||||
27 | |||||||||||
one-on-one meetingswith shareowners to discuss ESG matters, representing29%of outstanding shares | |||||||||||
7 | |||||||||||
one-on-one shareowner meetings hosted by our Lead Director or MDCC Chairto discuss ESG matters, representing 20%of outstanding shares |
Notice and Proxy Statement | 2022 | 27 |
2021 SHAREOWNER ENGAGEMENT FOCUS AREAS In •Honeywell’s •Ability to execute on priorities during the downturn and position Honeywell for growth during global recovery from the COVID-19 pandemic. •
•Honeywell’s governance practices, including its executive compensation program and Board composition, diversity, and refreshment. •Honeywell’s compensation actions related to the pandemic, including salary reductions, cancellation of merit increases in 2020, and an adjustment to the 2020-2022 Performance Plan, as fully disclosed in the 2021 proxy statement. •Honeywell’s commitment to proactively addressing environmental and social risks and opportunities through a robust sustainability governance framework. •Honeywell’s continued investment in developing solutions that improve environmental and social outcomes for customers and communities. •Corporate citizenship through Honeywell Hometown Solutions and our STEM education, inclusion and diversity, and humanitarian relief initiatives. •Political engagement and our disclosure of political lobbying expenditures and trade association memberships. |
| ||||||||
| |||||||||
I SHAREOWNER FEEDBACK
Honeywell’s shareowners welcomed the Company’s level of outreach and expressed appreciation for engagement and responsiveness to shareowner concerns. Below is a summary of the feedback received:
COVID-19 Response. High marks received for our support of employees and communities.
Board Composition. Continued interest in Board refreshment and the use of a nuanced skillset matrix to identify candidates.
Enhanced Sustainability Disclosure. Acknowledgement of our SASB/TCFD-aligned disclosure and focus on sustainable opportunities.
Political Lobbying Disclosure. Positive feedback on enhanced political lobbying disclosure, including our disclosure of trade association memberships.
Inclusion and Diversity. High level of interest in Honeywell’s inclusion and diversity initiatives and strategies.
I VIRTUAL ANNUAL MEETING
Honeywell’s commitment to robust governance practices was evident in 2020 when we quickly pivoted to a virtual meeting format in response to COVID-19 safety concerns. The planning focused on facilitating shareowner attendance and ensuring a meaningful shareowner experience. Honeywell’s Chairman and CEO led the meeting and used the platform to speak directly to shareowners about Honeywell’s response to the pandemic. Proponents of the two shareowner proposals had a choice between presenting their statements live by dialing in to the meeting or providing a pre-recorded message, and shareowners also had an opportunity to submit questions both before and during the meeting. Honeywell’s Chairman and CEO answered most of the questions during the time allotted for Q&A, and the Company provided email responses to all other questions received. In comparison to typical in-person meetings, the Company believes the virtual format enabled more meaningful engagement and a greater level of information sharing with a broader group of shareowners. Considering ongoing COVID-19 safety concerns and our positive virtual meeting experience last year, the Board has chosen to hold the Company’s Annual Meeting in a virtual format again this year.
|
|
■ | ||||||
SHAREOWNER FEEDBACK Honeywell’s shareowners welcomed the Company’s level of outreach and expressed appreciation for engagement and responsiveness to shareowner concerns. Below is a summary of the feedback received: •ESG. Continued interest in ESG initiatives and the Board's role in ESG strategy and oversight. •Inclusion & Diversity. Praise for Honeywell programs and processes (especially our diversity of slate requirement). •COVID-19 Impact. High marks received for our continued innovation during the COVID-19 pandemic and for our continued support of employees and communities. Shareowners viewed the pandemic-related compensation actions as appropriate under the circumstances, with recognition that that adverse pandemic-related impacts on incentive plans was not unique to Honeywell and that thoughtful recalibrations were appropriate in industries hardest hit by the pandemic. | ||||||
|
I
In reaching its decision to recombine the roles of Chairman and CEO under Mr. Adamczyk, the Board considered a wide range of factors as follows:
The benefits of a unified leadership structure during a period when Honeywell was in the process of a major portfolio realignment and a strategic shift designed to focus resources and management’s attention on high-growth businesses in six attractive industrial end markets where the Company can deploy its core technological strengths related to software, data analytics and the Industrial Internet of Things.
An evaluation of the strength of Mr. Adamczyk’s character, the quality of his leadership, and the likelihood that Mr. Adamczyk’s service as both Chairman and CEO would enhance Company performance; the Board continues to believe that an independent Chairman would not enhance Company performance or improve governance effectiveness under Mr. Adamczyk’s leadership.
28 | Notice and Proxy Statement | 2022 |
Honeywell’s longstanding track record of outperformance under a unified leadership structure in which the roles of Chairman and CEO were combined.
The highly independent nature of the Board where there is only one non-independent director.
In reaching its decision to recombine the roles of Chairman and CEO under Mr. Adamczyk, the Board considered a wide range of factors as follows: •The benefits of a unified leadership structure during a period when Honeywell was in the process of a major portfolio realignment and a strategic shift designed to focus resources and management’s attention on high-growth businesses in six attractive industrial end markets where the Company can deploy its core technological strengths related to software, data analytics, and the Industrial Internet of Things. •An evaluation of the strength of Mr. Adamczyk’s character, the quality of his leadership, and the likelihood that Mr. Adamczyk’s service as both Chairman and CEO would enhance Company performance; the Board continues to believe that an independent Chairman would not enhance Company performance or improve governance effectiveness under Mr. Adamczyk’s leadership. •Honeywell’s longstanding track record of outperformance under a unified leadership structure in which the roles of Chairman and CEO were combined. •The highly independent nature of the Board where there is only one non-independent director. •Steps taken by Honeywell’s Board to strengthen the role of the independent Lead Director. | ||
Steps taken by Honeywell’s Board to strengthen the role of the independent Lead Director.
The Board carefully weighed the views of its shareowners as part of the deliberations leading up to its decision to combine the roles and has continued to engage with shareowners on this topic during shareowner engagement meetings thereafter. The Company has continued to hear a range of views during those meetings, with most shareowners expressing confidence that the Honeywell Board understands the importance of good corporate governance and has the ability to make the right decisions regarding its ongoing leadership structure, specifically the determination of whether and when to separate and combine the roles of Chairman and CEO.
I
The roles and responsibilities of the Lead Director are described in the Company’s Corporate Governance Guidelines, which explicitly acknowledge that, in the absence of an independent Chairman, the Lead Director would assume the same roles and responsibilities, including: •As and when the Board considers adding new members, work with the CEO, the CGRC and the full Board to help identify and prioritize the specific skill sets, experience, and knowledge that candidates for election to the Board must possess. •Review, and when appropriate, make changes to Board meeting agendas and Board meeting schedules to ensure there is sufficient time for discussion of all agenda items. •Review, and when appropriate, make changes to presentation material and other written information provided to directors for Board meetings. •Preside at all Board meetings at which the Chairman is not present, including executive sessions of the independent directors, and apprise the Chairman of the issues considered. •Serve as liaison between the Chairman and the independent directors. •Be available for consultation and direct communication with the Company’s shareowners. •Call meetings of the independent directors when necessary and appropriate. •Retain outside professionals on behalf of the Board. •Consult with management about what information is to be sent to the Board. •Identify key strategic direction and operational issues upon which the Board’s annual core agenda is based. •Serve as an ex officio member of each committee on which he or she does not otherwise serve. | ||
The roles and responsibilities of the Lead Director are described in the Company’s Corporate Governance Guidelines, which the Board amended in 2019 to formalize the equivalency of independent Lead Director and independent Chairman roles and responsibilities. The guidelines explicitly acknowledge that, in the absence of an independent Chairman, the Lead Director would assume the same roles and responsibilities, including:
As and when the Board considers adding new members, work with the CEO, the CGRC and the full Board to help identify and prioritize the specific skill sets, experience, and knowledge that candidates for election to the Board must possess.
Review, and when appropriate, make changes to Board meeting agendas and Board meeting schedules to ensure there is sufficient time for discussion of all agenda items.
Review, and when appropriate, make changes to presentation material and other written information provided to directors for Board meetings.
Preside at all Board meetings at which the Chairman is not present, including executive sessions of the Our independent directors and apprise the Chairman of the issues considered.
Serve as liaison between the Chairman and the independent directors.
Be available for consultation and direct communication with the Company’s shareowners.
Call meetings of the independent directors when necessary and appropriate.
Retain outside professionals on behalf of the Board.
Consult with management about what information is to be sent to the Board.
Identify key strategic direction and operational issues upon which the Board’s annual core agenda is based.
|
| 29 |
Lead Director Selection Criteria | Mr. Davis’ Qualifications | ||||
Commitment Able to commit the time and level of engagement required to fulfill the substantial responsibilities of the role | |||||
Effective Communication Able to facilitate discussions among Board members, including between the non-management directors and the CEO/Chairman, and engage with shareowners and key stakeholders | Mr. Davis proved himself to be an effective communicator in his numerous meetings with shareowners particularly with respect to our COVID-19 response and ESG initiatives | ||||
Rapport Strong rapport with other members of the Board | Mr. Davis is extremely well-regarded by his fellow Board members. As the longest-tenured director (16 years) who has served as MDCC Chair (2010 to 2020) and Audit Committee Chair (2006-2010), he has developed a strong rapport with each director | ||||
Integrity High personal integrity and ethical character | Mr. Davis has conducted himself in accordance with the highest ethical standards throughout his career and as a Honeywell Board member As former MDCC Chair and Lead Director, he has been a key enabler of a culture of integrity and ethics at Honeywell by ensuring the appropriate tone at the top | ||||
Skill Set Skills and experience broadly in line with Honeywell’s corporate strategy | Mr. Davis’ skills and experiences are well-aligned with the strategic skills and core competencies that are critical for Honeywell Board members He has led global organizations in transportation and logistics services industries aligned with Honeywell’s strategic end-markets and where innovation is a critical enabler | ||||
I
I Members of the Audit Committee and MDCC currently meet and, during the year ended December 31, 2021 met, the additional independence requirements of Nasdaq applicable to audit committee and compensation committee members.
•No non-employee director or nominee receives any direct compensation from Honeywell other than under the director compensation program described in this Proxy Statement.
•No immediate family member (within the meaning of the NYSENasdaq listing standards) of any non-employee director or nominee receives direct compensation from Honeywell other than compensation received for service as a non-executive employee.
30 | Notice and Proxy Statement | 2022 |
•No non-employee director or nominee is an employee of Honeywell’s independent accountants, and no non-employee director or nominee (or any of their respective immediate family members) is a current partner of Honeywell’s independent accountants, or was within the last three years, a partner or employee of Honeywell’s independent accountants and personally worked on Honeywell’s audit.
•No non-employee director or nominee is a member, partner, or principal of any law firm, accounting firm, or investment banking firm that receives any consulting, advisory, or other fees from Honeywell.
•No non-employee director or nominee has an immediate family member who is, or was during the past three years, an executive officer of Honeywell.
•No non-employee director or nominee (or any of their respective immediate family members) is indebted to Honeywell, nor is Honeywell indebted to any non-employee director or nominee (or any of their respective immediate family members).
•No non-employee director or nominee is an executive officer of a charitable or other tax-exempt organization that received contributions from Honeywell outside our director charitable match program.
•Honeywell has commercial relationships (purchase and/or sale of products and services) with companies at which our directors serve or have served as officers within the past three years (Ms. Flint — Greater Toronto Airports Authority and Los Angeles World Airports, Mr. PazMs. Lee — Express Scripts,Cornerstone Building Brands and Dupont de Nemours, and Ms. Washington — Gilead Sciences). In each case:
|
|
|
•The relevant products and services were provided on terms and conditions determined on an arm’s-length basis and consistent with those provided by or to similarly situated customers and suppliers;
The above information was derived from Honeywell’s books and records and responses to questionnaires completed by directors in connection with the preparation of this Proxy Statement.
|
DEVELOP EVALUATION FORM | ■ | LAUNCH EVALUATION | ■ | REVIEW FEEDBACK | ■ | RESPOND TO INPUT | ■ | ||||||||||||||||||||||||||||
•Members of our Board, and each committee, participate in the formal evaluation process, responding to questions designed to elicit information to be used for improving Board and committee effectiveness. | •Director feedback is solicited from the formal self-evaluation process and is shared verbatim on an anonymous basis with the entire Board and committee and, where appropriate, addressed with management. | •In response to feedback from the evaluation process, the Board and committees work with management to take concrete steps to improve policies, processes, and procedures to further Board and committee effectiveness. | |||||||||||||||||||||||||||||||||
ASSESS |
| ||||||||||
■ | |||||||||||
IDENTIFY | •Potential director candidates meeting the criteria established by the CGRC and Lead Director are identified either by reputation, existing Board members, or shareowners. •The CGRC is also authorized, at the expense of Honeywell, to retain search firms to identify potential director candidates, as well as other external advisors, including for purposes of performing background reviews of potential candidates. •Search firms retained by the CGRC are provided guidance as to the particular experience, skills, or other characteristics that the Board is then seeking. •The CGRC may delegate responsibility for day-to-day management and oversight of a search firm engagement to the Chairman and/or the Senior Vice President and Chief Human Resources Officer. | ||||||||||
■ | |||||||||||
EVALUATE | •Candidates are interviewed multiple times by the Chairman and CEO, Lead Director, other members of the Board, and certain executive officers to ensure that candidates not only possess the requisite skills and characteristics, but also the personality, leadership traits, work ethic, and independence of thought to effectively contribute as a member of the Board. One or more diverse candidates must be interviewed before a successful candidate is identified. •To ensure that the Board continues to evolve in a manner that serves the changing business and strategic needs of the Company, before recommending for re-nomination a slate of incumbent directors for an additional term, the CGRC also evaluates whether incumbent directors possess the requisite skills and perspective, both individually and collectively. This evaluation is based primarily on the results of the annual review it performs with the Board of the requisite skills and characteristics of Board members, as well as the composition of the Board as a whole and the results of the Board’s annual self-evaluation. | ||||||||||
■ | |||||||||||
RECOMMEND | •The Board nominates the successful candidate for election to the Board at the Annual Meeting of Shareowners. Director candidates are principally identified and evaluated in anticipation of upcoming director elections and other potential or expected Board vacancies. | ||||||||||
■ | |||||||||||
32 | Notice and Proxy Statement | 2022 |
Notice and Proxy Statement | 2022 | 33 |
Name | Audit | Corporate Governance and Responsibility | Management Development and Compensation | ||||||||
Mr. Angove | |||||||||||
Mr. Ayer | Chair | ||||||||||
Mr. Burke | |||||||||||
Mr. Davis* | ex officio | ex officio | |||||||||
Ms. Flint | |||||||||||
Ms. Lee | |||||||||||
Ms. Lieblein | Chair | ||||||||||
Mr. Paz | Chair | ||||||||||
Ms. Washington |
Committee Chair: George Paz† Other Committee Members (effective April 25, 2022)* Kevin Burke D. Scott Davis† Robin L. Washington† † Audit Committee Financial Expert Meetings Held in 2021: 10 •All members independent •Has oversight over our independent accountant •Separately designated standing audit committee established in accordance with Section 3(a)(58) (A) of the Exchange Act | •Consider the independence of, appoint (and recommend to shareowners for approval), and be directly responsible for the compensation, retention, and oversight of the firm that serves as independent accountants to audit our financial statements and to perform services related to the audit; this includes resolving disagreements between the firm and management regarding financial reporting. •Review the scope and results of the audit with the independent accountants. •Review with management and the independent accountants, prior to filing, the annual and interim financial results (including Management’s Discussion and Analysis) to be included in Forms 10-K and 10-Q. •Consider the adequacy and effectiveness of our internal control over financial reporting and auditing procedures. •Review, approve, and establish procedures for the receipt, retention and treatment of complaints received by Honeywell regarding accounting, internal control over financial reporting, or auditing matters and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters. •Monitor and provide risk oversight with respect to focus areas assigned to the committee from time to time by the Board. •Together with the full Board, exercise oversight over the ERM process and assess adequacy of mitigation strategies for the risks identified through ERM. •Oversee performance of the Company's internal audit function. | ||||
34 | Notice and Proxy Statement | 2022 |
Committee Chair: William S. Ayer* Other Committee Members (effective April 25, 2022)* D. Scott Davis (ex officio) Deborah Flint Grace D. Lieblein George Paz Meetings Held in 2021: 3 •All members independent •Also serves as the nominating committee | •Identify and evaluate potential director candidates and recommend to the Board the nominees for election to the Board. •Review and make a recommendation to the Board regarding whether to accept a resignation tendered by a Board nominee who does not receive a majority of votes cast for his or her election in an uncontested election of directors. •Review and recommend changes to the Corporate Governance Guidelines. •Together with the Lead Director, lead the Board in its annual evaluation of the performance of the Board and its committees. •Review policies and make recommendations to the Board concerning the size and composition of the Board, qualifications and criteria for director nominees, director retirement policies, compensation and benefits of non-employee directors, conduct of business between Honeywell and any person or entity affiliated with a director, and the structure and composition of Board committees, and the allocation of risk oversight responsibilities among Board committees. •Oversee overall ESG performance and associated risks and opportunities. •Monitor and provide risk oversight with respect to focus areas assigned to the committee from time to time by the Board, including political contributions and lobbying, regulatory compliance matters such as data privacy, integrity and ethics, geopolitical risk, and health, safety, environmental, product stewardship and sustainability. •Review Honeywell’s policies and programs as may be brought to the attention of the committee regarding Honeywell’s role as a responsible corporate citizen. | ||||
Committee Chair: Grace D. Lieblein Other Committee Members (effective April 25, 2022)* Duncan B. Angove William S. Ayer D. Scott Davis (ex officio) Rose Lee George Paz Meetings Held in 2021: 6 •All members independent •Administers Honeywell’s executive compensation program •Retains independent compensation consultant | •Evaluate and approve executive compensation plans, policies, and programs, including review and approval of executive compensation-related corporate goals and objectives. •Review and approve the individual goals and objectives of the Company’s executive officers. •Evaluate the CEO’s performance relative to established goals and objectives and, together with the other independent directors, determine and approve the CEO’s compensation level. •Review and determine the annual salary and other remuneration (including incentive compensation and equity-based plans) of all other officers. •Review and discuss with management the Compensation Discussion and Analysis and other executive compensation disclosure included in this Proxy Statement. •Produce the annual Committee Report included in this Proxy Statement. •Form and delegate any of the MDCC’s authorities to subcommittees when appropriate. •Review the management development program, including executive succession. •Review or take such other action as may be required in connection with the bonus, stock, and other benefit plans of Honeywell and its subsidiaries. •Monitor and provide risk oversight with respect to focus areas assigned to the committee from time to time by the Board, including succession planning, progress implementing diversity goals and objectives, retention and recruitment of key talent, employment practices and policies, workplace respect and culture, workplace violence, and employee engagement and wellness. | ||||
Notice and Proxy Statement | 2022 | 35 |
36 | Notice and Proxy Statement | 2022 |
|
| |||
| FULL BOARD •Oversee the Company’s risk governance framework, including an enterprise-wide culture that supports appropriate risk awareness and the identification, escalation, and appropriate management of risk •Integrity, ethics, and compliance with its Code of Business Conduct •General strategic and commercial risks such as new product launch, capital spend, raw material price increases, foreign currency fluctuation, diminished customer demand, technology obsolescence, reductions to government spending, and slowdown in economic growth, including impacts of the COVID-19 pandemic •Disruption, including disruptive technologies, emerging competition, and changing business models •M&A transactions, including execution and integration, and the M&A competitive landscape •Legal risks such as those arising from litigation, environmental, and intellectual property matters | |||
|
■ | ■ | |||||||||||||||||||||||||||||||
AUDIT COMMITTEE • •Cybersecurity, including protection of customer and employee data, trade secrets, and other proprietary “crown jewel” information, ensuring the security of data on the cloud, persistent threats, and cyber risks associated with the Company’s own products and facilities •Accounting, controls, and financial disclosure •Tax and liquidity management •Product integrity and product security •Vendor risk, including supply chain disruption •Operational business continuity | ||||||||||||||||||||||||||||||||
| CORPORATE GOVERNANCE AND RESPONSIBILITY COMMITTEE (CGRC) •Political contributions and lobbying •Regulatory compliance, including data privacy, sanctions, export, and government contracts •Integrity and compliance programs and policies •Geopolitical risk, including political, economic or military conflicts, and tariffs • | |||||||||||||||||||||||||||||||
| MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE (MDCC) •Succession planning •Compensation plans, programs, and arrangements and other employment practices and policies •Recruitment and retention of key talent •Labor compliance •Inclusion and diversity •Workplace respect and culture •Workplace violence •Employee engagement and wellness | |||||||||||||||||||||||||||||||
■ | ■ |
I ENTERPRISE RISK MANAGEMENT PROGRAM
The Board uses the ERM program as a key tool for understanding the inherent risks facing Honeywell and assessing whether management’s processes, procedures and practices for mitigating those risks are effective. The ERM assessment deployed by management is based on an enterprise-wide “top down” and “bottom up” view of commercial, strategic, legal, compliance, human capital, cyber, and reputational risks and strategies for mitigating those risks. In 2020, the ERM program included interviews with the Chairman and CEO and each member of his leadership team as well as 82 workshop interviews with 96 risk owners and risk experts, covering 49 risk areas across all businesses and functions. In 2021, ERM-identified risks will drive over one-third of the audits to be conducted under the Internal Audit function’s annual plan.
| ||||||||||||||||||||||||||
ENTERPRISE RISK MANAGEMENT | ||||||||||||||||||||||||||
ASSESS | REVIEW | ■ | INCORPORATE | ■ | ||||||||||||||||||||||
•The ERM assessment deployed by management is based on an enterprise-wide “top down” and “bottom up” view of commercial, strategic, legal, compliance, human capital, cyber, and reputational risks and strategies for mitigating those risks. •In 2021, the ERM program included interviews with the Chairman and CEO and each member of his leadership team as well as 111 workshop interviews with 89 risk owners and risk experts, covering 49 risk areas across all businesses and functions. •In 2022, ERM-identified risks will drive over 45% of the audits to be conducted under the Internal Audit function’s annual plan. | •Both the Audit Committee and the full Board review the results of the annual ERM assessment. •During the reviews, Honeywell’s CFO and General Counsel jointly present the results of the ERM assessment in a manner designed to provide full visibility into the risks facing Honeywell and how management is mitigating those risks, thereby enabling the Board to effectively exercise its oversight function. •To facilitate continued monitoring and oversight by the Board, key risk areas identified during the ERM process and management’s associated mitigation activities become part of Board and/or committee meeting agendas for the following year. | •Every three years, the ERM process includes one-on-one meetings with each Board member to discuss each director’s “top down” view of risks facing the enterprise, to solicit the director’s recommendations for improving the ERM process, and to ensure that the universe of risks and the metrics for identifying key risks, in terms of likelihood of occurrence and potential financial impact, is both realistic and appropriate. •Feedback from the one-on-one interviews with the individual Board members is presented to the full Board and incorporated in the Company’s ERM program and risk mitigation efforts. | ||||||||||||||||||||||||
Notice and Proxy Statement | | 37 |
SPOTLIGHT ON CYBERSECURITY | |||
|
Both the Audit Committee and the full Board review the results of the annual ERM assessment. During the reviews, Honeywell’s CFO and General Counsel jointly present the results of the ERM assessment in a manner designed to provide full visibility into the risks facing Honeywell and how management is mitigating those risks, thereby enabling the Board to effectively exercise its oversight function. To facilitate continued monitoring and oversight by the Board, key risk areas identified during the ERM process and management’s associated mitigation activities become part of Board and/or committee meeting agendas for the following year.
Every three years, the ERM process includes one-on-one meetings with each Board member to discuss each director’s “top down” view of risks facing the enterprise, to solicit the director’s recommendations for improving the ERM process, and to ensure that the universe of risks and the metrics for identifying key risks, in terms of likelihood of occurrence and potential financial impact, is both realistic and appropriate. Feedback from the one-on-one interviews with the individual Board members is presented to the full Board and incorporated in the Company’s ERM program and risk mitigation efforts.
I
38 | Notice and Proxy Statement | 2022 |
Oversight of Overall ESG Performance | Board of Directors and CGRC | ||||||||||
Oversight of Discrete ESG Risk and Opportunities | CGRC •Environmental •Health •Safety •Climate •Remediation •Political Engagement •Governance •Board Diversity and Composition •Integrity and Compliance •Data Privacy | AUDIT COMMITTEE •Tax •Financial Controls •Enterprise Risk •Litigation/Controversies •Raw Materials Sourcing •Product Safety and Integrity •Supply Chain •Cybersecurity | MDCC •Human Capital Management •Inclusion and Diversity •Labor Practices •Culture •Compensation •Workplace Respect •Employee Engagement and Wellness | ||||||||
Management with Accountability and Regular, Direct Reporting to Responsible Board Committee on ESG Topics | •Chief Sustainability Officer •Corporate Secretary and Chief Compliance Officer •SVP, Global Government Relations •VP and General Counsel, ESG | •SVP, Chief Financial Officer •SVP, Enterprise Transformation •SVP, General Counsel •VP, Corporate Audit •Chief Information and Product Security Officer •VP, Controller •VP, Tax •Chief Supply Chain Officer | •SVP, Chief Human Resources Officer •Chief Diversity Officer |
>90% | ~70% | 6,100 | ||||||
reduction in Scope 1 and Scope 2 greenhouse gas intensity since 2004 | energy efficiency improvement since 2004 | sustainability projects completed since 2010, saving an annualized $105M | ||||||
160 | 0.25 | ~3,000 | ||||||
million gallons of water saved in water-stressed regions since 2013 from more than 180 projects | total case incident rate (TCIR), a safety record over 4x better than the weighted average TCIR of the industries in which we operate | acres remediated and restored as valuable community assets |
Notice and Proxy Statement | 2022 | 39 |
10-10-10 Goals by 2024. Honeywell remains on track to: | Carbon Neutrality by 2035.Honeywell has committed to: | |||||||
Reduce global Scope 1 and Scope 2 greenhouse emissions by an additional 10% per dollar of sales from 2018 levels. Deploy at least 10 renewable energy opportunities. Achieve certification to ISO’s 50001 Energy Management Standard at 10 facilities. | Become carbon neutral in its operations and facilities (Scope 1 and Scope 2) by 2035 through a combination of further investment in energy savings projects, conversion to renewable energy resources, completion of capital improvement projects, and utilization of credible carbon offsets. Address Scope 3 indirect emissions, including emissions in the value chain, by enhancing its existing tracking system, partnering with industry leaders to identify and implement best practices, and encouraging customers to adopt Honeywell’s climate offerings. | |||||||
SPOTLIGHT ON HEALTH, SAFETY, ENVIRONMENT, PRODUCT STEWARDSHIP AND SUSTAINABILITY (HSEPS) | ||
Honeywell’s HSEPS matters are managed by a global team of more than 800 trained professionals with extensive knowledge and hundreds of years of collective experience in occupational health, chemistry, hydrology, geology, engineering, safety, industrial hygiene, materials management, and energy efficiency. Honeywell’s Chief Sustainability Officer reports to the Company’s Senior Vice President and General Counsel and has overall responsibility for HSEPS programs. A Corporate Energy and Sustainability Team, led by the Chief Sustainability Officer, the Vice President for Global Real Estate and the Senior Director of Sustainability, helps drive the Company’s sustainability goals. Progress on these goals is reported to Honeywell’s CEO on a quarterly basis and is reviewed with the CGRC at least annually.We provide HSEPS disclosure in alignment with the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) frameworks. To view these disclosures and details about our environmental achievements, please see our 2021 Corporate Citizenship Report at investor.honeywell.com (see “ESG/ESG Information”). | ||
40 | Notice and Proxy Statement | 2022 |
SPOTLIGHT ON POLITICAL CONTRIBUTIONS ADVISORY BOARD | ||
•In 2020, the Company established a bipartisan Political Contributions Advisory Board (Advisory Board) of leaders representing a cross-section of Honeywell who meet regularly to review proposed HIPAC disbursements to assess alignment with Honeywell's foundational principles — Integrity and Ethics, Inclusion and Diversity, and Workplace Respect. Neither the CEO nor anyone from his staff sits on the Advisory Board. •In 2022, the Company expanded the Advisory Board's mandate to include assessment of alignment to the Company's sustainability goals as well as review of proposed disbursements of HIPAC and corporate funds to trade associations and other organizations. •The Advisory Board meets at the start of each Congress, and at least quarterly thereafter, to determine whether proposed recipients of funding are eligible based on alignment with Honeywell's foundational values and sustainability objectives. •Advisory Board decisions are informed by independent third-party due diligence reports identifying statements or activities that present potential misalignment with the Company's foundational principles or sustainability goals. •Advisory Board decisions are documented and reported quarterly to the HIPAC Board of Directors and to Honeywell's Chairman and CEO. Honeywell's Senior Vice President, Global Government Relations also includes notable Advisory Board decisions in his annual report to the CGRC. | ||
Notice and Proxy Statement | 2022 | 41 |
FOUNDATIONAL PRINCIPLES | INTEGRITY AND ETHICS | INCLUSION AND DIVERSITY | WORKPLACE RESPECT | |||||||||||||||||
BEHAVIORS | ||||||||||||||||||||
Have a Passion for Winning •Beat the competition •Fearless accountability for getting results | Think Big ... Then Make It Happen •Be willing to re-examine almost anything •Innovate with agility | |||||||||||||||||||
Become Your Best •Seek and accept feedback •Bounce back from disappointments | Be Committed •Act like you own this place •Lead by example and work hard | |||||||||||||||||||
Build Exceptional Talent •Continuously learn and grow •Set high expectations for yourself and others | Act With Urgency •Move with lightning speed •Use speed as a differentiator | |||||||||||||||||||
Be a Zealot for Growth •Obsess over growth and customers •Understand what creates value for customers | Be Courageous •Take on seemingly impossible goals •Confront problems directly and face adversity head on | |||||||||||||||||||
Each of the Board’s committees plays a role in ensuring that our core values remain at the center of Honeywell’s culture. •The CGRC meets regularly with our Chief Compliance Officer to review the Company’s integrity and compliance program, policies, and scorecard. •The Audit Committee receives detailed investigation reports on a quarterly basis to monitor trends, ensure that allegations are investigated promptly, and as necessary, confirm that appropriate disciplinary measures are taken in a timely fashion. •The MDCC has responsibility for working with management to monitor workplace culture, establish diversity expectations, and review progress. | ||
42 | Notice and Proxy Statement | 2022 |
Notice and Proxy Statement | 2022 | 43 |
SPOTLIGHT ON WORKFORCE DIVERSITY* | ||||||||||||||
| ||||||||||||||
|
Executives | Other Managers | Total Workforce | ||||||||||||
Starting with the 2021 report to be filed with the U.S. Equal Employment Opportunity Commission (EEOC) later this year, Honeywell will publicly disclose its EEO-1 report (adjusted to exclude Sandia and KCNSC workforces) annually within 30 days after the report is filed with the EEOC. | ||||||||||||||
*As of December 31, 2021 unless otherwise indicated. Excludes Sandia National Laboratories (Sandia) and Kansas City National Security Campus (KCNSC) workforces. Sandia and KCNSC are U.S. Department of Energy facilities. Honeywell manages these facilities as a contract operator and does not establish or control their human resources policies. API represents Asian or Pacific Islander. The executives category represents executive-band employees. |
I OVERSIGHT OF COVID-19 RESPONSE
The Board has been closely engaged with management from the earliest days of the COVID-19 crisis as the Company continues to navigate the challenges of the pandemic. The Board’s focus at the onset of the crisis was to monitor and oversee management’s efforts to ensure the health and safety of Honeywell’s employees and to support their communities. As a provider of essential products and services, maintaining business continuity and the productive capability of the Company’s facilities and its supply chain was paramount. In the face of economic uncertainty and disruption to the Company’s end-markets, the Board was also focused on further strengthening the balance sheet and managing costs while ensuring that the Company did not lose sight of long-term strategic initiatives, transformation goals, and new opportunities. To monitor and provide oversight in the volatile environment, the Board met more frequently and received detailed and frequent communication from management. The Board continues to work closely with management to oversee the Company’s ongoing response to the challenges posed by the pandemic.
I OVERSIGHT OF CYBERSECURITY
Cybersecurity is a critical component of the Company’s enterprise risk management program. The Company has established an information security framework to help safeguard the confidentiality, integrity, and availability of information assets and ensure regulatory, operational, and contractual requirements are fulfilled. The framework is aligned to industry standards including: NIST SPs 800-53 and 800-171, International Organization for Standardizations (ISO) 27702 and 22301, Payment Card Industry Data Security Standard (PCI DSS), Sarbanes-Oxley (SOX), and the Cloud Security Alliance (CSA) program. In addition, the Company has received Cyber Essential Scheme (CES) certification and ISO 27001 certification for certain businesses, complies with the IASME standard, has completed the CyberGRX Tier 3 assessment, and maintains a cybersecurity insurance policy. The Board and the Audit Committee provide oversight over cybersecurity risk. The Board receives annual cybersecurity updates from senior management, including the Chief Information and Product Security Officer, and the Audit Committee provides a deeper level of oversight through multiple engagements with senior management, including the Chief Information and Product Security Officer, each year to review the Company’s cybersecurity program, including the highest risk areas and key mitigation strategies. The Company has experienced, and expects to continue to experience, cyber threats and incidents, and the Audit Committee receives quarterly reports on any notable incidents that may have occurred during the quarter. To date, no such incidents have been material to the Company, and expenses incurred (including penalties or settlements, if any) in response to these incidents have been immaterial in any given fiscal year.
BOARD PRACTICES AND PROCEDURES
I BOARD AND COMMITTEE MEETINGS
Agenda. The Board and its committees perform an annual review of the agenda items to be considered for each meeting. During that review and throughout the year, each Board and committee member is encouraged to suggest items for inclusion on future agendas.
Number of Meetings and Attendance. In 2020, the Board held seven meetings, and the committees of the Board collectively held 19 meetings. The Board had 100% meeting attendance, and the directors’ average attendance rate at meetings of the committees of which they are members was 99.5%. Each of the directors participated in at least 75% of the aggregate of the total number of Board meetings held during the period for which he or she was a director and the total number of meetings held by all Board committees on which he or she served (during the period he or she served).
Special Meetings. The Chairman, the Lead Director, the CGRC Chair, and at the request of two independent directors, the Corporate Secretary, are permanently empowered and authorized to call special meetings of the Board at any time and for any reason.
Board Meeting Materials. Each director receives in advance the written material to be considered at every meeting of the Board and of the committees on which he or she is a member and can provide comments and suggestions.
I SELF-EVALUATION
Objective. The Board and each of its committees conduct a comprehensive evaluation of their effectiveness throughout the year. Committee members can provide input directly to the Lead Director, committee chairs or management. A more formal self-evaluation is launched in January of each year and the feedback gleaned from the evaluation is utilized to facilitate and enable Board refreshment and an appropriate evolution of Board skills, experiences, and perspectives specifically with a view toward eliciting feedback on whether our directors’ skills are matched to Honeywell’s strategic needs and its risk profile.
Process. The Lead Director, together with the CGRC Chair, are jointly responsible for leading the self-evaluation process which includes the development and approval of the evaluation by the CGRC, its administration through a third party, summarization of the results, and its report out to the full Board on an anonymous basis.
| 2022 |
|
I OTHER BEST PRACTICE BOARD PROCEDURES
Annual Shareowner Meeting Attendance. Honeywell’s Corporate Governance Guidelines encourage all directors to attend our Annual Meeting of Shareowners. All of its directors attended last year’s virtual Annual Meeting.
Engagement with Management. The Board and its committees provide feedback to management, and management is required to answer questions raised by the directors during Board and committee meetings. Our senior management meets regularly with the Board, including yearly reviews of each business’ long-term strategic plan and annual operating plan.
Director Education. Honeywell’s Board believes that director education is vital to the ability of directors to fulfill their roles and supports Board members in their continuous learning. Directors may enroll in continuing education programs at Honeywell’s expense on corporate governance and critical issues associated with a director’s service on a public company board. The Board also hears regularly from management on numerous subjects, including investor sentiments, shareowner activism, regulatory developments, data privacy and cybersecurity. In addition, the Board periodically participates in site visits to Honeywell’s facilities. For example, in 2020, Board members visited Honeywell’s Safety and Productivity Solutions facility in Charleston, South Carolina.
Director Orientation. All new directors participate in the Company’s director orientation program during the first year on the Board. New directors receive an extensive suite of onboarding materials covering director responsibilities, corporate governance practices and policies, business strategies, leadership structure, and long-term plans. Participation in regular Board and committee meetings also provide new directors with a strong foundation for understanding Honeywell’s businesses, connects directors with members of management with whom they will interact, and accelerates their effectiveness to engage fully in Board deliberations. Directors have access to additional orientation and educational opportunities upon acceptance of new or additional responsibilities on the Board or its committees.
The Board currently has three committees. All members of each committee are independent, non-employee directors. Each committee operates under a written charter, which is available at investor.honeywell.com (see “Corporate Governance/Board Committees”). The table below lists the anticipated leadership and membership of each committee following the 2021 Annual Meeting of Shareowners.
|
|
|
| |||
| ||||||
| ||||||
| ||||||
|
|
| ||||
| ||||||
|
| |||||
|
| |||||
| ||||||
|
| |||||
|
* Lead Director is an ex officio member of each committee on which he does not otherwise serve.
|
|
|
|
|
* The current members of the Audit Committee are Kevin Burke, D. Scott Davis (ex officio), Linnet F. Deily, Judd Gregg, Robin Washington, and George Paz (Chair).
|
|
|
* Mr. Gregg’s membership on the CGRC and his appointment as its Chair will be effective upon his re-election to the Board at the Annual Meeting of Shareowners. The current members of the CGRC are Linnet Deily (Chair), William S. Ayer, D. Scott Davis (ex officio), Deborah Flint, Grace D. Lieblein, Raymond T. Odierno, and George Paz.
|
|
|
|
Nomination of New Candidates. Potential director candidates meeting the criteria established by the CGRC and Lead Director are identified either by reputation, existing Board members, or shareowners. The CGRC is also authorized, at the expense of Honeywell, to retain search firms to identify potential director candidates, as well as other external advisors, including for purposes of performing background reviews of potential candidates. Search firms retained by the CGRC are provided guidance as to the particular experience, skills, or other characteristics that the Board is then seeking. The CGRC may delegate responsibility for day-to-day management and oversight of a search firm engagement to the Chairman and/or the Senior Vice President and Chief Human Resources Officer.
Candidates are interviewed multiple times by the Chairman and CEO, Lead Director, other members of the Board and certain executive officers to ensure that candidates not only possess the requisite skills and characteristics, but also the personality, leadership traits, work ethic, and independence of thought to effectively contribute as a member of the Board. After this process, the Board nominates the successful candidate for election to the Board at the Annual Meeting of Shareowners. Director candidates are principally identified and evaluated in anticipation of upcoming director elections and other potential or expected Board vacancies. From time to time, the Board fills vacancies in its membership which arise between annual meetings of shareowners using the process described above.
Re-nomination of Incumbents. To ensure that the Board continues to evolve in a manner that serves the changing business and strategic needs of the Company, before recommending for re-nomination a slate of incumbent directors for an additional term, the CGRC also evaluates whether incumbent directors possess the requisite skills and perspective, both individually and collectively. This evaluation is based primarily on the results of the annual review it performs with the Board of the requisite skills and characteristics of Board members, as well as the composition of the Board as a whole and the results of the Board’s annual self-evaluation.
|
|
* The current members of the MDCC are Grace D. Lieblein (Chair), Duncan B. Angove, William S. Ayer, D. Scott Davis (ex officio), Judd Gregg, and Clive Hollick.
|
|
|
|
|
|
The MDCC regularly reviews the services provided by its outside consultants and performs an annual assessment of the independence of its compensation consultant to determine whether the compensation consultant is independent. The MDCC conducted a specific review of its relationship with PM in 2020 and determined that PM is independent in providing Honeywell with executive compensation consulting and limited other employee benchmarking services, and that PM’s work for the MDCC did not raise any conflicts of interest, consistent with SEC rules and NYSE listing standards.
In making this determination, the MDCC reviewed information provided by PM on the following factors:
Any other services provided to Honeywell by PM.
Fees received by PM from Honeywell as a percentage of PM’s total revenue.
Policies and procedures maintained by PM to prevent a conflict of interest.
Any business or personal relationship between the individual PM consultants assigned to the Honeywell relationship and any MDCC member.
Any business or personal relationship between the individual PM consultants assigned to the Honeywell relationship, or PM itself, and Honeywell’s executive officers.
Any Honeywell stock owned by PM or the individual PM consultants assigned to the Honeywell relationship.
The MDCC noted that PM did not provide any services to the Company or its management other than service to the MDCC and limited other employee benchmarking services. Unless approved by the MDCC Chair, PM does not provide, directly or indirectly through affiliates, any non-executive compensation services, including, but not limited to, pension consulting or human resources outsourcing. The MDCC will continue to monitor the independence of its compensation consultant on a regular basis.
PM compiles information and provides advice regarding the components and mix (short-term/long-term; fixed/variable; cash/equity) of the executive compensation programs of Honeywell and its Compensation Peer Group (see pages 47 and 48 of this Proxy Statement for further detail regarding the Compensation Peer Group) and analyzes the relative performance of Honeywell and the Compensation Peer Group with respect to stock performance and the financial metrics generally used in the programs. PM also provides the MDCC with information regarding emerging trends and best practices in executive compensation. In addition to information compiled by PM, the MDCC also reviews general survey data compiled and published by third parties. Neither the MDCC nor Honeywell has any input into the scope of or the companies included in these third-party surveys.
PM reports to the MDCC Chair, has direct access to MDCC members, attends MDCC meetings either in person, virtually or by telephone, and meets with the MDCC in executive session without management present.
|
|
|
AND SUSTAINABILITY
Honeywell takes seriously its commitment to corporate social responsibility, protection of its environment, and creation of sustainable opportunity everywhere it operates. This unwavering commitment underlies the principle that good business, economic growth, and social responsibility work together. Honeywell’s Environmental, Social, and Governance (ESG) initiatives are aligned with the Company’s long-term strategy, both informing and supporting Honeywell’s strategic plans. This alignment emerges from the inclusion of Environmental and Social (E&S) considerations in scenario planning and other strategic processes where E&S-related business risks and opportunities are identified and addressed.
The Board’s engagement and oversight extends to E&S initiatives in four principle ways:
The Corporate Governance and Responsibility Committee (CGRC) has primary jurisdiction for managing risks and opportunities associated with E&S, meeting at least once a year with the Corporate Vice President of Health, Safety, Environment, Product Stewardship, and Sustainability (HSEPS), the Senior Vice President for Government Relations, the Senior Vice President and Chief Human Resources Officer and other leaders with responsibility for E&S to review and discuss various E&S topics.
Direct Audit Committee and Board engagement with E&S risk areas through a robust and comprehensive Enterprise Risk Management program.
Direct Board engagement on select E&S topics. In the past 12 months, management has presented to the Board on a variety of E&S initiatives such as employee diversity, sexual harassment prevention, safety, business continuity, and environmental matters.
Feedback from engagement with shareowners. The Board values shareowners’ perspectives on corporate responsibility and sustainability, and the Company (oftentimes with our Lead Director or CGRC Chair) engages directly with shareowners throughout the year to discuss activities, goals and achievements in these areas and to hear shareowners’ views and suggestions so that the feedback can be provided to directors.
Behind every invention, new technology and next-generation solution at Honeywell is a team of people committed to shaping the future. The Company’s performance culture enables Honeywell to be agile in response to the fast-changing needs of customers and is supported by the Honeywell Behaviors and three foundational principles: Integrity and Ethics, Inclusion and Diversity, and Workplace Respect. These principles are requirements for employment and every employee is expected to support and demonstrate them. Honeywell’s Behaviors reflect the bold, entrepreneurial spirit of the Company’s people.
|
|
|
The Honeywell Behaviors reinforce our performance culture and enable our strategy to be the world’s premier software-industrial company. Demonstrating the Honeywell Behaviors is important to the Company’s culture and achieving objectives, and employees are challenged to continue developing in these areas as there is always opportunity for improvement. However, no one can be deficient in any of the Company’s three foundational principles. These values are simply too important to everything the Company hopes to accomplish.
IINTEGRITY AND ETHICS
The Company’s integrity and compliance program includes, among other elements, a Supplier Code of Business Conduct that flows down to Honeywell’s global supply chain to reinforce the expectation that Honeywell suppliers also will abide by our high standards of integrity and compliance, including our conflict minerals, anti-human trafficking, business integrity, and health, safety, and environmental policies. We monitor our suppliers via quality, ethics, and good manufacturing practices, and when a supplier is found to be in violation of any Honeywell standard, we either replace the supplier or issue a corrective action plan. If the violation involves unethical or illegal activities, we remove the supplier as a viable supply source.
Honeywell’s Code applies to all directors, officers (including our Chief Executive Officer, Chief Financial Officer, and Controller) and employees.
I INCLUSION AND DIVERSITY
Working at Honeywell requires fully embracing InclusionBusiness Conduct and Diversity (I&D). The Board believes that its diversity (three women, two Hispanics, and two African Americans) and the diversityother components of Honeywell’s executive leadership (more than half of the Company’s executive officers are diverse by ethnic background, non-U.S. place of birth, or gender) supports its evolving business strategyintegrity and is a testament to Honeywell’s ongoing commitment to hiring, developing,compliance program can be found on our website at investor.honeywell.com (see “ESG/Integrity and retaining diverse talent. The Company’s commitment to I&D enables better decision-making, helps build competitive advantages, and furthers long-term success. I&D is one of our foundational principles, and Honeywell expects all employees to exemplify its I&D principles accordingly.
In 2020, Honeywell took several notable actions to promote racial equality and I&D:
Reinforced its commitment to I&D and our zero-tolerance policy on discrimination in a video featuring its Chairman and CEO and our Senior Vice President and General Counsel and through a series of town hall meetings conducted company-wide; the Company continues to emphasize this message through training programs and regular communications.
Deployed mandatory unconscious bias training to our global workforce to educate and influence behavior.
Established a Global Inclusion and Diversity Steering Committee co-sponsored by Honeywell’s Chairman and CEO and fortified its inclusion and diversity governance structure by embedding I&D Councils in each business group. The re-designed governance structure provides a scalable model that supports the Company’s six affinity group employee networks for women, Black, Hispanic, veteran, LGBTQ and disabled employees and facilitates the introduction of new networks to reflect the diverse characteristics of Honeywell’s workforce.
Entered a five-year corporate sponsorship with the National Museum of African American History and Culture in Washington, D.C. Part of the Smithsonian Institution, this museum hosts millions of visitors each year and focuses on the richness, diversity and resiliency of the African American experience. This partnership enables robust learning and virtual volunteering opportunities for Honeywell employees of all races and backgrounds.
| Compliance” |
|
Sponsored the Carolina Youth Coalition, a nonprofit organization that prepares high-achieving, under-resourced high school students to get into, excel at, and graduate from college.
Continued to expand recruitment efforts at diversity conferences and historically Black colleges and universities.
Established 2021 goals for each direct CEO staff officer that includes an annual objective of driving diversity within his or her organization.
Honeywell’s I&D strategy focuses on five key pillars, and we are driving a number of strategic initiatives behind each one, as follows:
|
|
|
|
|
For more information about Honeywell’s inclusion and diversity initiatives, please visit honeywell.com (see “Company/About Us”).
I
|
|
|
COMMITMENT TO A SUSTAINABLE FUTURE
Honeywell’s commitment to being environmentally responsible is reflected in the extensive work done to reduce greenhouse gas (GHG) emissions, increase energy efficiency, conserve water, minimize waste, and drive efficiency throughout its operations. The Company champions responsible remediation projects and efforts to make its operations and products safer and more sustainable.
Honeywell has a history of establishing and achieving public sustainability goals and remains on track to achieve its 10-10-10 goals by 2024. The Company has also committed to becoming carbon neutral in its operations and facilities by 2035 and to addressing indirect emissions, including emissions in the value chain.
10-10-10 Goals by 2024. Honeywell remains on track to:
|
|
|
Carbon Neutrality by 2035. Honeywell has committed to:
|
|
Honeywell’s Sustainable Opportunity policy is based on the principle that by integrating health, safety, and environmental considerations into all aspects of its business, Honeywell:
Protects its people and the environment;
Drives compliance with all applicable regulations;
Achieves sustainable growth and accelerated productivity; and
Develops technologies that expand the sustainable capacity of our world.
The Honeywell Operating System (HOS), which drives sustainable improvements and the elimination of waste in manufacturing operations to generate exceptional performance, is a critical component of how the Company thinks about sustainability. HOS is a lean-based manufacturing system with roles and ownership for all employees from the plant floor to the boardroom to engage in careful planning and analysis, continuous employee engagement in improvement, and thorough follow-through.
Honeywell has built sustainability directly into HOS, so the tools, personnel, activities and culture are used to drive sustainability with the same focus that the Company uses to propel other critical operational objectives such as quality, delivery, inventory and cost. This ensures that sustainability is an integrated and essential part of the Honeywell work experience every day. Progress on our sustainability program is a factor in determining annual incentive compensation for senior leadership.
| 45 |
|
I SUSTAINABLE OPPORTUNITY
Honeywell is uniquely positioned to shape a safer and more sustainable future both for the Company and its customers. The Company continues to invent and develop technologies that provide customers with adaptable and efficient solutions to their safety, energy, and environmental needs. Here are some of the challenges Honeywell technologies address:
I HEALTH, SAFETY, ENVIRONMENT, PRODUCT STEWARDSHIP AND SUSTAINABILITY (HSEPS)
Honeywell’s HSEPS matters are managed by a global team of trained professionals with extensive knowledge and hundreds of years of collective experience in occupational health, chemistry, hydrology, geology, engineering, safety, industrial hygiene, materials management, and energy efficiency.
Honeywell’s Corporate Vice President of HSEPS reports to the Company’s Senior Vice President and General Counsel and has overall responsibility for HSEPS programs. A Corporate Energy and Sustainability Team, led by the Corporate Vice President of HSEPS, the Vice President for Global Real Estate and the Director of Sustainability, helps drive the Company’s sustainability goals. Progress on these goals is reported to Honeywell’s CEO on a quarterly basis and is reviewed with the CGRC at least annually.
The Company utilizes a comprehensive HSEPS management system based on recognized third-party standards, including ISO 14001 and ISO 45001, and industry best practices. The system is fully integrated into HOS, the Company’s blueprint for continuous, sustainable operational improvement. A Company-wide, HSEPS-led audit process monitors compliance with standards and regulatory requirements and oversees timely development and implementation of process improvement and corrective action plans.
We provide HSEPS disclosure in alignment with the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-Related Financial Disclosures (TCFD) frameworks. To view these disclosures, please see our 2020 Corporate Citizenship Report at https://hwll.co/csr2020.
I HIGHLIGHTS OF OUR ENVIRONMENTAL ACHIEVEMENTS
Greenhouse Gas Reduction and Energy Efficiency. Honeywell reports on its global greenhouse gas emissions publicly through CDP, a U.K.-based organization that supports companies’ and cities’ environmental disclosures, various regulatory agencies, and its website, investor.honeywell.com (see “Corporate Governance/Sustainability”). A qualified third party has provided limited assurance per ISO 14064-3 of Honeywell’s 2011-2019 Scope 1 and Scope 2 greenhouse gas emissions inventories. Overall, the Company’s sustainability program has reduced its Scope 1 and Scope 2 greenhouse gas intensity by more than 90% since 2004.
|
|
|
|
|
|
Honeywell continues to be on track to achieve our “10-10-10” target to reduce global Scope 1 and Scope 2 greenhouse gas emissions by an additional 10% per dollar of sales from 2018 levels, to deploy at least 10 renewable energy opportunities, and to achieve certification to ISO’s 50001 Energy Management Standard at 10 facilities, all by 2024.
Water and Waste. Honeywell maintains a global inventory of water usage and waste data and continually looks for savings opportunities. The Company strategically targets water conservation projects in areas that are experiencing “water stress” as defined by the World Resources Institute. Since 2013, Honeywell has implemented more than 170 water conservation projects in water-stressed areas, saving 155 million gallons. Each of the Company’s businesses establishes annual waste targets for reducing hazardous waste, as normalized by sales, and diverting non-hazardous waste from landfills.
Safety. The safety of the Company’s employees, contractors, and partners is a top priority, and Honeywell uses its HOS-based approach to maintain its safety record. Honeywell’s global TCIR (the number of occupational injuries and illnesses per 100 employees) was 0.29 at the end of 2020. This means that our safety record is over four times better than the weighted average TCIR of the industries in which we operate according to the U.S. Bureau of Labor Statistics. Honeywell has received worker safety awards from governments and organizations around the world.
New Uses from Legacy Properties. Honeywell has a history of successfully resolving complex environmental challenges and taking a proactive approach to remediation of legacy obligations from former operations and of predecessor companies. The Company spent over $4 billion in the last 15 years to clean up many of these sites and restore them to productive community use. Using cutting-edge science, design, and engineering to protect human health and the environment, the Company works cooperatively with governments and communities to implement effective solutions. Honeywell does not consider cleanups complete until the legacy property has been transformed into a valuable asset for the surrounding community, whenever possible.
For more information about Honeywell’s revitalization of brownfields while renewing communities, please visit the Company’s website at investor.honeywell.com (see “Corporate Governance/Sustainability”).
Honeywell demonstrates its commitment to corporate social responsibility (CSR) and community involvement through global programs emphasizing science, technology, engineering and mathematics (STEM) education, inclusion and diversity, and humanitarian relief. To date, more than 5 million elementary, middle, high school, and university students worldwide have participated in Honeywell’s STEM programs. Since 2005, the Honeywell Humanitarian Relief Foundation, an employee-funded nonprofit organization, has distributed more than $14.5 million in relief funding to nearly 2,500 employees and communities around the world after hurricanes, earthquakes, wildfires, flooding, typhoons, and tsunamis. The foundation has also repaired or rebuilt 900 homes, four schools, nine medical clinics, 900 wells, and one elder-care center in this time.
In 2020, as the COVID-19 pandemic spread around the globe and brought everyday life to a halt in many regions, Honeywell moved quickly to address the needs of employees, customers, and communities. To support its employees, the Company:
Covered out-of-pocket costs associated with prescribed COVID-19 testing for all employees, and covered out-of-pocket treatment costs for employees and their dependents enrolled in Honeywell’s medical plans.
Established a $10 million relief fund to support select employees worldwide in potential financial distress due to the COVID-19 pandemic.
Issued a $500 special “thank you” payment in early 2021 to every direct manufacturing employee who worked for more than six months in 2020.
Honeywell also established relief programs, expanded partnerships, and made monetary and in-kind donations to help communities around the world respond to the COVID-19 crisis and economic downturn. For instance, the Company:
Donated approximately 925,000 masks to hospitals and non-profits worldwide.
Distributed more than 3.7 million meals and 12,300 hygiene kits to families impacted by COVID-19 in five cities across India.
Invested $2 million to launch the Charlotte Center City Small Business Innovation Fund, in partnership with two leading civic organizations and other sponsors, to provide grants to small businesses to adapt their operating model in response to COVID-19 challenges.
Honeywell, Atrium Health, Tepper Sports & Entertainment and Charlotte Motor Speedway launched a unique public-private initiative, with support from North Carolina Gov. Roy Cooper, Charlotte Mayor Vi Lyles and leaders from Mecklenburg County, to optimize mass vaccination events that fully vaccinated more than 46,000 people.
Based on learnings from these events, Honeywell and our partners have developed and distributed a leader guide for mass vaccination events to the Biden Administration and the governors of all U.S. states and territories.
|
|
|
POLITICAL ENGAGEMENT AND CONTRIBUTIONS
Engagement in the political process is critical to Honeywell’s success. The Company’s future growth depends on forward-thinking legislation and regulation that makes society safer and more energy efficient and improves public infrastructure. The Company strives to engage responsibly in the political process and to ensure that its participation is consistent with all applicable laws and regulations, our principles of good governance, and our high standards of ethical conduct.
I TRANSPARENCY
Honeywell is committed to providing transparent disclosure of political contributions and lobbying activities. Based on feedback from stakeholders, Honeywell has continued to enhance its political engagement disclosures. The Center for Political Accountability now rates Honeywell as a “Trendsetter” among first-tier companies, and in 2020, Honeywell was one of only 12 companies in the S&P 500 that received a Center for Political Accountability score of 100%. Disclosures are available at investor.honeywell.com (see “Corporate Governance/Political Contributions”).
When considering what to include in disclosures, Honeywell makes every effort to be accurate, comprehensive and detailed, and consider the perspective of the Company’s largest shareowners. Disclosures include explanations of the Company’s rationale for engaging in the political process, identify top legislative and regulatory priorities, and define its governance processes. The Company’s disclosures also address the use of corporate funds for political contributions and contributions to tax-exempt organizations that may use funds for political purposes; supply details regarding Honeywell’s exclusively employee-funded political action committee, HIPAC, including its disbursements; and provide streamlined and direct access to federal, state and local lobbying reports. In 2020, Honeywell further enhanced its disclosures to include a list of trade associations receiving memberships dues of $50,000 or more from Honeywell annually and the corresponding non-deductible portion of the dues.
I MANAGEMENT AND BOARD OVERSIGHT
The Law Department oversees the Company’s lobbying activities. Honeywell’s Senior Vice President, Global Government Relations reports to the Senior Vice President and General Counsel and works closely with the Corporate Secretary and Chief Compliance Officer, whose organization ensures compliance with our political spending policy. The Company’s Senior Vice President and General Counsel, its Senior Vice President, Global Government Relations, and Corporate Secretary and Chief Compliance Officer meet regularly with Honeywell’s Chairman and Chief Executive Officer and his leadership team to review legislative, regulatory and political developments.
With respect to Board oversight, Honeywell’s public policy efforts, including all lobbying activities, political contributions, and payments to trade associations and other tax-exempt organizations, are the responsibility of the CGRC, which consists entirely of independent, non-employee directors. Each year the CGRC receives an annual report on the Company’s policies and practices regarding political contributions. In addition, each year, the Senior Vice President, Global Government Relations reports to the CGRC on trade association memberships and to the full Board on the global lobbying and government relations program. The CGRC’s oversight of the Company’s political activities ensures compliance with applicable law and alignment with our policies, strategic priorities, Code of Business Conduct, and values.
In 2020, the Company established an Advisory Board of leaders representing a cross-section of Honeywell who meet regularly to review proposed HIPAC disbursements to assess alignment with Honeywell’s foundational principles — Integrity and Compliance, Inclusion and Diversity, and Workplace Respect. The Advisory Board meets at the start of each Congress, and at least quarterly thereafter, to determine whether proposed recipients of HIPAC funding are eligible based on our criteria and in alignment with Honeywell’s foundational values. Advisory Board decisions are documented and reported quarterly to the HIPAC Board of Directors and to Honeywell’s Chairman and CEO. Honeywell’s Senior Vice President, Global Government Relations, also includes notable Advisory Board decisions in his annual report to the CGRC.
|
|
I
|
Board Cash Retainer | • | $100,000 per annum | ||||||||||
Lead Director Compensation | • | $60,000 per annum | ||||||||||
Committee Membership Compensation | • | $10,000 per annum | (or $15,000 per annum for members of the Audit Committee) | |||||||||
Committee Chair Compensation | • | $20,000 per annum | (or $40,000 per annum for the Audit Committee Chair) | |||||||||
Common Stock Equivalents | • •Payment of these amounts is deferred until termination of Board service. Payments are made in cash, as either a lump sum or in equal annual installments. | $60,000 in common stock equivalents | ||||||||||
Annual Equity Grants | •Awarded on the date of the Annual Meeting of Shareowners. •Each non-employee director receives an annual equity grant with a target value of $115,000, of which $65,000 is in the form of •Annual RSUs vest on the earliest of (i) the April •Stock options vest in equal annual installments on each of the April |
| 2022 |
|
IDEFERRED COMPENSATION
Prior to his retirement from the Board, Mr. Chico Pardo participated in the legacy Honeywell Inc. Non-Employee Directors Fee and Stock Unit Plan. The last fee deferral under that plan occurred on December 1, 1999. Since that date, deferred amounts were increased only by dividend equivalents. Final payment of his deferred account was made in January 2021, in the form of whole shares of common stock, as previously elected by the director.
I
IWashington.
Idirectors.
Director Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | Option Awards(2)(4) | Change in Pension Value and Nonqualified Compensation Earnings(5) | All Other Compensation(6) | Total | ||||||||||||||||||
Duncan B. Angove | $ | 164,158 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 4 |
| $ | 339,230 |
| ||||||
William S. Ayer | $ | 174,158 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 25,004 |
| $ | 374,230 |
| ||||||
Kevin Burke | $ | 169,158 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 25,004 |
| $ | 369,230 |
| ||||||
Jaime Chico Pardo(7) | $ | 113,929 |
|
| — |
|
| — |
|
| — |
| $ | 4,272 |
| $ | 118,201 |
| ||||||
D. Scott Davis | $ | 219,515 |
| $ | 125,062 |
| $ | 50,006 |
| $ | 12,109 |
| $ | 4 |
| $ | 406,696 |
| ||||||
Linnet F. Deily | $ | 199,158 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 25,004 |
| $ | 399,230 |
| ||||||
Deborah Flint | $ | 160,943 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 4 |
| $ | 336,015 |
| ||||||
Judd Gregg | $ | 179,158 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 26,176 |
| $ | 380,402 |
| ||||||
Clive Hollick | $ | 164,158 |
| $ | 125,062 |
| $ | 50,006 |
| $ | 13,377 |
| $ | 40,762 |
| $ | 393,365 |
| ||||||
Grace D. Lieblein | $ | 187,729 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 21,696 |
| $ | 384,493 |
| ||||||
Raymond Odierno | $ | 126,435 |
| $ | 133,351 |
| $ | 58,231 |
|
| — |
| $ | 4 |
| $ | 318,021 |
| ||||||
George Paz | $ | 219,158 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 27,844 |
| $ | 422,070 |
| ||||||
Robin L. Washington | $ | 169,158 |
| $ | 125,062 |
| $ | 50,006 |
|
| — |
| $ | 25,004 |
| $ | 369,230 |
|
Director Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | Option Awards(2)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | Total | ||||||||||||||||||||||||||||||||
Duncan B. Angove | $ | 170,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 4 | $ | 345,010 | ||||||||||||||||||||||||||
William S. Ayer | $ | 180,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 380,010 | ||||||||||||||||||||||||||
Kevin Burke | $ | 175,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 375,010 | ||||||||||||||||||||||||||
D. Scott Davis | $ | 235,000 | $ | 125,000 | $ | 50,006 | $ | 8,051 | $ | 520 | $ | 418,577 | ||||||||||||||||||||||||||
Linnet F. Deily (7) | $ | 116,566 | $ | 60,000 | $ | — | $ | — | $ | 25,219 | $ | 201,785 | ||||||||||||||||||||||||||
Deborah Flint | $ | 170,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 1,040 | $ | 346,046 | ||||||||||||||||||||||||||
Judd Gregg | $ | 203,297 | $ | 125,000 | $ | 50,006 | $ | — | $ | 28,996 | $ | 407,299 | ||||||||||||||||||||||||||
Clive Hollick (7) | $ | 102,912 | $ | 60,000 | $ | — | $ | 8,894 | $ | 8,187 | $ | 179,993 | ||||||||||||||||||||||||||
Grace D. Lieblein | $ | 200,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 400,010 | ||||||||||||||||||||||||||
Raymond Odierno (7) | $ | 170,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 370,010 | ||||||||||||||||||||||||||
George Paz | $ | 225,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 29,013 | $ | 429,019 | ||||||||||||||||||||||||||
Robin L. Washington | $ | 175,000 | $ | 125,000 | $ | 50,006 | $ | — | $ | 25,004 | $ | 375,010 |
|
|
Director Name | Outstanding Option Awards | Outstanding Stock Awards | Outstanding Deferred Comp Plan (Non-Elective) | |||||||||||||||||
Mr. Angove | 8,118 | 3,988 | 1,518 | |||||||||||||||||
Mr. Ayer | 17,565 | 599 | 3,603 | |||||||||||||||||
Mr. Burke | 23,285 | 599 | 10,518 | |||||||||||||||||
Mr. Davis | 20,133 | 599 | 19,929 | |||||||||||||||||
Ms. Flint | 5,156 | 472 | 730 | |||||||||||||||||
Sen. Gregg | 23,285 | 599 | 7,896 | |||||||||||||||||
Ms. Lieblein | 20,133 | 599 | 5,631 | |||||||||||||||||
Gen. Odierno | 4,232 | — | — | |||||||||||||||||
Mr. Paz | 26,357 | 599 | 13,322 | |||||||||||||||||
Ms. Washington | 20,133 | 599 | 5,109 |
|
|
Director Name | | Outstanding Option Awards |
| | Outstanding Stock Awards |
| | Outstanding Deferred Comp Plan (Non-Elective) |
| |||||
| Mr. Angove |
| 6,707 |
|
| 4,480 |
|
| 1,210 |
| ||||
Mr. Ayer |
| 16,154 |
|
| 1,149 |
|
| 3,260 |
| |||||
Mr. Burke |
| 24,946 |
|
| 1,149 |
|
| 10,058 |
| |||||
Mr. Chico Pardo(7) |
| — |
|
| — |
|
| — |
| |||||
Mr. Davis |
| 18,722 |
|
| 1,149 |
|
| 19,310 |
| |||||
Ms. Deily |
| 12,990 |
|
| 1,149 |
|
| 17,333 |
| |||||
Ms. Flint |
| 3,745 |
|
| 653 |
|
| 435 |
| |||||
Sen. Gregg |
| 24,946 |
|
| 1,149 |
|
| 7,481 |
| |||||
Mr. Hollick |
| 21,874 |
|
| 1,149 |
|
| 25,551 |
| |||||
Ms. Lieblein |
| 21,874 |
|
| 1,149 |
|
| 5,254 |
| |||||
Gen. Odierno |
| 2,821 |
|
| 531 |
|
| 316 |
| |||||
Mr. Paz |
| 30,196 |
|
| 1,149 |
|
| 12,816 |
| |||||
Ms. Washington |
| 21,874 |
|
| 1,149 |
|
| 4,740 |
|
|
|
|
|
|
Director stock ownership guidelines have been adopted under which each non-employee director, while serving as a director of Honeywell, must hold common stock (including shares held personally, RSUs, and/or common stock equivalents) with a market value of at least five times the annual cash retainer (or $500,000). Directors have five years from election to the Board to attain the prescribed ownership threshold. All current directors (other than Ms. Flint who joined the Board in October 2019 and In addition, directors must hold net gain shares from option exercises for one year. “Net gain shares” means the number of shares obtained by exercising the option, less the number of shares the director sells to cover the exercise price of the options and pay applicable taxes. | On average, Honeywell non-employee directors held, as of December 31, 43x the annual cash retainer, |
| 2022 |
|
PROPOSAL 2: ADVISORY VOTE TO APPROVE
EXECUTIVE COMPENSATION
We anticipate that shareowners will next have the opportunity to vote on the frequency of future Say-on-Pay votes at the 2023 Annual Meeting of Shareowners.
| |||||
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THIS PROPOSAL. |
|
|
|
DISCUSSION AND ANALYSIS
| Notice and Proxy Statement | 2022 | 49 |
| ||||||||||||||
| ||||||||||||||
|
| |||||||||||||
| ||||||||||||||
59 | ||||||||||||||
Other Definitions
Peer Median Reflects Compensation Peer Group Median
Multi-Industry Peer Median Includes EMR, GE, ITW, and MMM
Peer Median Net Income, EPS Reflect Adjusted (Non-GAAP) Results
Adjusted Net Income Before Interest = Adjusted Net Income + After-Tax Interest
Net Investment = Book Value of Equity + Total Debt
ROIC = Adjusted Net Income Before Interest ÷ Net Investment (2-Point Average)
ROA = Adjusted Net Income ÷ Total Assets (2-Point Average)
ROE = Adjusted Net Income ÷ Total Shareowner Equity (2-Point Average)
ROI = Adjusted Net Income Before Interest ÷ (Total Shareowner Equity + Net Debt)
Decremental Margin = Year-Over-Year Decline in Segment Profit ÷ Year-Over-Year Decline in Sales
Other Definitions | |||||
Peer Median Reflects Compensation Peer Group Median Peer Median Net Income, EPS Reflect Adjusted (Non-GAAP) Results Adjusted Net Income Before Interest = Adjusted Net Income + After-Tax Interest* Net Investment = Book Value of Equity + Total Debt * Interest expense tax effected for effective tax rates. | ROIC = Adjusted Net Income Before Interest1 ÷ Net Investment (2-Point Average) ROE = Adjusted Net Income ÷ Total Shareowner Equity (2-Point Average) ROI = Adjusted Net Income Before Interest* ÷ (Total Shareowner Equity + Net Debt) ROA = Adjusted Net Income ÷ Total Assets (2-Point Average) |
| 2022 |
|
STRONG SEQUENTIAL PERFORMANCE IN 2020
In 2020, Honeywell drove sequential improvements in key metrics in each quarter through the COVID-19 downturn. We continued our track record of execution by moving quickly and decisively to reduce fixed costs, ensure liquidity, drive growth, and position ourselves for recovery.
Drove sales growth in areas that were not as impacted by the COVID-19 downturn, generating sequential improvement in year-over-year organic sales.
Protected margins, driving sequential improvement in year-over-year decremental margin from 33% in the second quarter to 26% in the fourth quarter.
Deployed cost plans decisively in a two-phased approach, realizing $1.5 billion of year-over-year fixed cost savings.
Took quick actions to maximize our financial flexibility by entering into a $6 billion two-year delayed draw term loan agreement, which boosted our cash and short-term investments to over $15 billion by the end of the second quarter.
Outperformed the market, delivering total shareowner return by over 2x the Industrial Select Sector SPDR (XLI).
Reconciliation, notes, and definitions of non-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 41 or in Appendix A.
* Source: S&P Capital IQ, as of December 31, 2020. TSR is calculated by the growth in capital from purchasing a share in the company and assuming dividends (regular and special) and share distributions received from any spins are reinvested in the applicable company at the time they are paid.
|
|
|
INVESTED IN GROWTH THROUGH THE DOWNTURN
We continued to make investments in the businesses through research and development, capital expenditures, and M&A, despite the pandemic. In addition to our strong sequential financial performance, we strategically deployed capital into high-return growth investments that will continue to benefit shareowners over the long term. We maintained a balanced capital deployment strategy consisting of the following actions:
Deployed more than $900 million to high return capital expenditures.
Deployed approximately $300 million to M&A and Honeywell Ventures, including the acquisitions of Sine Group, Ballard Unmanned Systems, and Rocky Research, to add strategic assets and enhance our technology offerings and innovation.
Raised our dividend for the eleventh time over ten consecutive years.
Repurchased $3.7 billion in Honeywell shares, reducing the weighted average share count by 3%. This was the third consecutive year of deploying more than $6.0 billion of cash back to shareowners in the form of dividends and share repurchases, after spinning off ~20% of sales in 2018.
Issued $6 billion of debt at attractive interest rates to further strengthen our balance sheet.
|
|
|
PRUDENTLY MANAGED THROUGH THE DOWNTURN
Our execution through the downturn highlights our ability to move quickly and decisively to reduce fixed costs, ensure liquidity, drive growth, and position ourselves for recovery in 2021 and beyond.
Our strong balance sheet provides us with stability as well as opportunity for investment during challenging times. Through a series of quick actions to further bolster our financial flexibility, we boosted our cash and short-term investments, demonstrating our ability to generate strong cash flow and to access the capital markets efficiently during even the most disruptive times, while protecting our debt rating.
On the cost side, we curtailed discretionary expenses, took temporary actions to reduce costs including reducing executive and Board pay, and removed significant structural costs through our repositioning programs. The resulting streamlined cost base positions us well for a 2021 recovery and will drive margin expansion across all four of our segments and capacity for investment as sales recover in 2021.
We also pivoted to adapt our approach to demand generation, using the full strength of Honeywell to address the COVID-19 challenges of our customers around the world. We deployed additional capital into high-return growth investments to address urgent customer needs, particularly in personal protective equipment and warehouse automation.
All of this was made possible due to the strength of our digital capabilities and our global supply chain organization. We relied heavily on our new digital platforms to elevate our business operations, particularly in selling and customer experience. Our global supply chain organization managed the continuity of operations in compliance with safety regulations and minimized the impacts of operational constraints.
As a result of our swift actions during this downturn, we drove sequential decremental margin improvement from 33% in the second quarter and 29% in the third quarter, to 26% in the fourth quarter, protecting our margins during substantial declines in sales.
Reconciliation, notes, and definitions of non-GAAP financial measures used in the Compensation Discussion and Analysis section and elsewhere in this Proxy Statement, other than as part of disclosure of target levels, can be found on page 41 or in Appendix A.
Chart represents share price performance and excludes dividends. Updated as of Market Close on December 31, 2020
DARIUS ADAMCZYK |
| GREGORY P. LEWIS | ANNE T. MADDEN | QUE THANH DALLARA† | MICHAEL R. MADSEN | ||||||||||||||||||||||||||||||||||||
Chairman and |
| Senior Vice President Chief Financial Officer | Senior Vice President General Counsel | President and CEO Honeywell Connected Enterprise (HCE) | President and CEO Aerospace (AERO) |
WHAT WE DO | WHAT WE DON’T DO | ||||||||||
Robust Performance Goals. We establish clear and measurable goals and targets and hold our executives accountable for achieving specified levels to earn a payout under our incentive plans. We use different sets of operational metrics for the annual cash incentive plan (ICP) and performance-based long-term incentives (LTI) to drive top and bottom-line growth over multiple time frames, aligned with sustained long-term performance. Clawback Practices. We maintain a policy that allows for recoupment of incentive compensation in the event of misconduct and a significant financial restatement or if an executive leaves the Company to join a competitor. Double Trigger in the Event of a Change in Control (CIC). We have double trigger vesting on equity and severance for CIC; executives will not receive cash severance nor will equity vest in the event of a CIC unless accompanied by qualifying termination of employment. Maximum Payout Caps for Incentive Plans. ICP and Performance Plan payouts are capped. Robust Stock Ownership Requirements. We require executive officers to hold meaningful amounts of stock and require them to hold net shares for one year from exercise or vesting. Options Granted at Fair Market Value (FMV). Annual stock options awarded to all executives (including the NEOs) are approved by the MDCC on the same day, with an exercise price no less than the fair market value of Honeywell's common stock on the date of grant. Independent Compensation Consultant. The MDCC retains an independent compensation consultant to review and advise the MDCC on executive compensation matters. The independent consultant attends all MDCC meetings. | No Excessive Perks. We do not provide perquisites except in cases where there is a compelling business or security reason, nor do we provide tax gross-ups for officers, other than in connection with a Company-required relocation. No Guaranteed Annual Salary Increases or Bonuses. Annual salary increases are based on evaluations of individual performance and the competitive market. In addition, we do not provide guarantees on bonus payouts. No Hedging or Pledging. We do not allow hedging or pledging of our stock. No Excise Tax Gross-Ups and No Accelerated Bonus Payments Upon a CIC. Excise tax gross-ups have been eliminated for all executive officers. Plans provide that ICP awards earned in the year of a CIC would be paid at the time they would typically be paid based on business performance rather than at target. No Incentivizing of Short-Term Results to the Detriment of Long-Term Goals and Results. Pay mix is heavily weighted toward long-term incentives aligned with the interests of shareowners. No Excessive Risks. Compensation practices are appropriately structured and avoid incentivizing employees to engage in excessive risk-taking. No Options Repricing. We prohibit repricing (reduction in exercise price or exchange for cash or other consideration) or reloading of stock options. No Consultant Conflicts. Under the MDCC’s established policy, the compensation consultant cannot provide any other services to Honeywell without the MDCC’s approval. Regular independence reviews are conducted. |
|
|
•Attract and Retain World-Class Leadership Talentwith the skills and experience necessary to develop and execute business strategies, drive superior financial results, and nimbly adapt and react to constantly evolving end-market conditions in an enterprise with the Company’s scale, breadth, complexity, and global footprint. •Emphasize Variable, At-Risk Compensationwith an appropriate balance of near-term and long-term objectives that align executive and shareowner interests. •Pay for Superior Results and Sustainable Growthby rewarding and differentiating among executives based on the achievement of enterprise, business unit, and individual objectives |
|
The key factors that shape the MDCC’s overall assessment of performance and appropriate levels of compensation include:
Operational and financial performance for the entire corporation and the relevant business units.
Aggressiveness of each executive’s financial and operating goals and targets compared to peers as well as the business/macroeconomic conditions in whichefforts to advance Honeywell’s businesses operate.
Execution against strategic initiatives•Manage Risk Through Oversight and the impact of investments Compensation Program Design Features and Practicesthat will benefit financial performance in future years.
Each executive’sbalance short-term and long-term leadership potentialincentives, are not overly leveraged, and associated retention risk.
The senior executive succession plan.
Stock price performance and total shareowner return (TSR).
Trends and best practices in executive compensation.
Peer group comparisons, including performance, pay levels, and related practices.
The MDCC reviews these factors over various time frames to ensure a strong linkage between pay and performance. In addition, the MDCC reviews each NEO’s four-year compensation history in total and each element of total annual direct compensation. The MDCC also reviews projected benefit payments under Honeywell’s retirement and deferred compensation plans, and any previously granted awards or grants. This enables the MDCC to understand how each element of compensation interacts with the other elements and to see how current compensation decisions may affect future wealth accumulation and executive retention.
Honeywell’s senior executives are recognized as industry leaders with backgrounds, depth of experience, and management skills that are highly attractive to competitors. The MDCC prefers to address critical retention and succession risks through the existing compensation program. When appropriate, the MDCC may approve other compensation actions that it believes are in the best interest of the Company and its shareowners to strengthen the succession plan and guard against the loss of key talent, especially during critical transition periods.
|
|
|
I PROGRAM DESIGN AND LINK TO BUSINESS STRATEGY AND PERFORMANCE
The following table provides an overview of Honeywell’s 2020 executive compensation program, which reflects shareowner responsive design changes made over the past three years and describes the strong link between each of our direct compensation elements and our business strategy and performance.
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
|
| ||||
|
| |||||
|
|
* Leadership Team refers to all direct CEO staff officers in 2020, which includes all NEOs.
I HOW COMPENSATION DECISIONS ARE MADE
Decision-making over executive compensation rests with the MDCC, which holds five regularly scheduled meetings each year (six meetings held in 2020)2021). Specific topics may be covered in a separate meeting from time to time. Each meeting includes an executive session comprised solely of independent directors, and those meetings are attended by the MDCC’s independent compensation consultant. Meeting agendas contain items proposed by either management or the MDCC members.
•The importance of aligning pay with Company and individual performance.
•The need to attract, retain, and reward executives with a proven track record of delivering consistent financial and operating results and driving “seed-planting” initiatives that will create sustainable long-term shareowner value.
•The complex multi-industry and global nature of Honeywell’s businesses and the importance of growth outside of the United States for future success.
The positioning of pay relative to the competitive market.
•The importance of maintaining and executing on a thorough and rigorous succession planning process.
While
To create long-term shareowner value,
52 | Notice and Proxy Statement | 2022 |
Link to Strategy and Performance | Target Compensation Mix | |||||||||||||||||||
Element | Description | CEO | Other NEOs | |||||||||||||||||
Base Salary | Base salaries are determined based on scope of responsibility, years of experience, and individual performance. | To attract and compensate high-performing and experienced leaders at a competitive level of cash compensation. | ||||||||||||||||||
Annual Incentive Compensation Plan (ICP) | 80% based on formulaic determination against pre-established financial metrics. 20% based on assessment of individual performance. | To motivate and reward executives for achieving annual corporate, business unit, and functional goals in key areas of financial and operational performance. | ||||||||||||||||||
Performance Stock Units (PSUs) (2021-2023) | •CEO and entire Leadership Team*: 50% of annual LTI •Covers three-year period •Relative TSR (25% weight) along with key financial metrics (75% weight) | Focuses executives on the achievement of specific long-term financial performance goals directly aligned with our operating and strategic plans. TSR portion pays based on three-year return from stock price appreciation and dividends vs. the Compensation Peer Group. | ||||||||||||||||||
Stock Options | Directly aligns the interests of our executives with shareowners. Stock options only have value for executives if operating performance results in stock price appreciation. |
| ||||||||||||||||||
Restricted Stock Units (RSUs) | •CEO and entire Leadership Team*: 15% of annual LTI | Strengthens key executive retention over relevant time periods to ensure consistency and execution of long-term strategies. | ||||||||||||||||||
FIXED: Base Salary VARIABLE: ICP at target and PSUs, Stock Options, and RSUs at grant date value | ||||||||
SHORT-TERM: Base Salary and ICP at target LONG-TERM: PSUs, Stock Options, and RSUs at grant date value |
The MDCC also considers shareowner feedback and the results of the annual advisory vote on executive compensation in making determinations about the structure of Honeywell’s pay program, or whether any changes to the program should be considered. The Company routinely engages with its shareowners to better understand their views on Honeywell’s governance and compensation practices. The Company’s Lead Director and CGRC Chair often participate in these engagements. The feedback the Company receives from shareowners enables the Board to better understand shareowners’ perspectives on its executive compensation programs, which resulted in significant changes to programs that have now been fully implemented. These changes led to over 92% of shareowners voting in favor of “Say-on-Pay” in each of the last four years, including a 93% result in 2020.
In 2020, the Company extended meeting invitations to 57 of its top shareowners during proxy season and again during summer/fall outreach to discuss environmental, social, and governance (ESG) matters (including Honeywell’s executive compensation program). As a result of these invitations, the Company held 32 separate meetings with shareowners, representing 38% of common shares outstanding, many of which included the participation of either Honeywell’s Lead Director or CRGC Chair. General support for Honeywell’s executive compensation program remained uniformly positive in 2020. No executive compensation program modifications were made in 2020 as a result of these meetings, however management did consider feedback from shareowners when considering alternatives for addressing the significant impacts of the pandemic on the most recently awarded performance stock unit awards.
ENGAGEMENT | •The Company routinely engages with its shareowners to better understand their views on Honeywell’s governance and compensation practices. •The Company’s Lead Director and MDCC Chair regularly participate in these engagements. •In 2021, the Company extended meeting invitations to 60 of its top shareowners during proxy season and again during summer/fall outreach to discuss environmental, social, and governance (ESG) matters (including Honeywell’s executive compensation program). •As a result of these invitations, the Company held 27 separate one-on-one meetings with shareowners, representing 29% of common shares outstanding, many of which included the participation of either Honeywell’s Lead Director or MDCC Chair. | |||||||
■ | ||||||||
FEEDBACK | •Shareowner support for Honeywell’s executive compensation program remained positive in 2021. •Shareowners viewed the pandemic-related compensation actions as appropriate under the circumstances, with recognition that adverse pandemic-related impacts on incentive plans were not unique to Honeywell and that thoughtful recalibrations were appropriate in industries hardest hit by the COVID-19 pandemic. •In addition to shareowner feedback, the MDCC also considers the results of the annual advisory vote on executive compensation in making determinations about the structure of Honeywell’s pay program, or whether any changes to the program should be considered. | |||||||
■ | ||||||||
RESPONSE | •Feedback the Company receives from shareowners enables the Board to better understand shareowners’ perspectives on its executive compensation program, which resulted in significant changes to the program in the past that have now been fully implemented. •These changes led to over 92% of shareowners voting in favor of “Say-on-Pay” in each of the last five years, including a 93% result in 2021. •There were no changes made to the executive compensation program in 2021 as a result of these meetings, as most shareowners remained supportive of the executive compensation program and the actions taken by the MDCC in 2020 and the first quarter of 2021, including those taken in response to the COVID-19 pandemic. •Throughout 2021 and into the first quarter of 2022, the MDCC continued to monitor and assess the risks and impacts to the incentive plans from the protracted COVID-19 pandemic and related supply chain dynamics, and remained committed to maintaining alignment between pay and performance in its decision making. | |||||||
■ |
54 | Notice and Proxy Statement | 2022 |
Compensation Peer Group.companies with complex multi-industry characteristics, like Honeywell, or relevant indices.
•Business operations in the industries and markets in which Honeywell participates.
Similar sales and/or market capitalization.
•Similar breadth of portfolio and complexity.
•Global scope of operations and/or diversified product lines.
•Within reasonable range of sales and/or market capitalization.
The MDCC reviews the appropriateness of the Compensation Peer Group companies on an annual basis and discusses whether any changes are necessary. In
The following provides a view of the multi-industry profile of the Honeywell businesses in 2020, which helps explain the breadth of the companies in the Compensation Peer Group:
|
|
|
Multi-Industry Peer Group. This peer group is a subset of the Compensation Peer Group and is primarily used for performance comparison purposes. The 2020 multi-industry peer group is made up of Emerson Electric Co. (EMR), General Electric Company (GE), Illinois Tool Works Inc. (ITW), and 3M Company (MMM); companies against whom Honeywell frequently competes for investor dollars. Each of these four companies is a multi-industrial company that has broadly overlapping institutional ownership, is covered by the research analysts that cover Honeywell, and operate in a similarly diverse set of end markets on a global basis. The MDCC removed United Technologies Corporation (UTX) from the Multi-Industry Peer Group in 2020 upon the merger of UTX with Raytheon Corporation and subsequent spin-off activities, and the determination that the successor companies did not meet the multi-industry profile.
The following table lists relevant comparative information for the Compensation Peer Group companies for 2020:
Mkt Cap ($M) (12/31/2020) | Total Assets ($M) | Sales ($M) | # Employees | Total Shareowner Return (12/31/2020)
| ||||||||||||||||||||||||||||||||||||||||||||
Company Name | 1 Year | 3 Years | 5 Years | 10 Years | ||||||||||||||||||||||||||||||||||||||||||||
Honeywell International Inc.
| $149,249 | $ 64,586 | $ 32,637 | 103,000 | 23 | % | 54 | % | 140 | % | 423 | % | ||||||||||||||||||||||||||||||||||||
Multi-Industry Peer Group (4) | ||||||||||||||||||||||||||||||||||||||||||||||||
3M Company |
| $100,823 |
|
| $ 47,344 |
|
| $32,184 |
|
| 95,000 |
|
| 3 | % |
| -18 | % |
| 34 | % |
| 165 | % | ||||||||||||||||||||||||
Emerson Electric Co. |
| $ 48,179 |
|
| $ 22,882 |
|
| $16,785 |
|
| 83,500 |
|
| 9 | % |
| 26 | % |
| 97 | % |
| 91 | % | ||||||||||||||||||||||||
General Electric Company |
| $ 94,607 |
|
| $253,452 |
|
| $79,619 |
|
| 174,000 |
|
| -3 | % |
| -33 | % |
| -60 | % |
| -20 | % | ||||||||||||||||||||||||
Illinois Tool Works Inc. |
| $ 64,532 |
|
| $ 15,612 |
|
| $12,574 |
|
| 43,000 |
|
| 16 | % |
| 32 | % |
| 148 | % |
| 385 | % | ||||||||||||||||||||||||
Honeywell Percentile Rank |
| 100 | % |
| 69 | % |
| 67 | % |
| 70 | % |
| 100 | % |
| 100 | % |
| 95 | % |
| 100 | % | ||||||||||||||||||||||||
Honeywell TSR Rank Order
|
| 1 |
|
| 1 |
|
| 2 |
|
| 1 |
| ||||||||||||||||||||||||||||||||||||
Other Comp Peers (12) | ||||||||||||||||||||||||||||||||||||||||||||||||
The Boeing Company |
| $120,843 |
|
| $152,136 |
|
| $58,158 |
|
| 141,000 |
|
| -34 | % |
| -24 | % |
| 65 | % |
| 311 | % | ||||||||||||||||||||||||
Caterpillar Inc. |
| $ 98,884 |
|
| $ 78,324 |
|
| $41,748 |
|
| 97,300 |
|
| 27 | % |
| 25 | % |
| 211 | % |
| 157 | % | ||||||||||||||||||||||||
Deere & Company |
| $ 84,310 |
|
| $ 75,091 |
|
| $35,514 |
|
| 69,634 |
|
| 58 | % |
| 81 | % |
| 290 | % |
| 305 | % | ||||||||||||||||||||||||
Dow Inc. |
| $ 41,167 |
|
| $ 61,470 |
|
| $38,542 |
|
| 35,700 |
|
| 8 | % |
| N/A |
|
| N/A |
|
| N/A |
| ||||||||||||||||||||||||
DuPont de Nemours, Inc. |
| $ 52,206 |
|
| $ 70,904 |
|
| $20,397 |
|
| 34,000 |
|
| 13 | % |
| -24 | % |
| 11 | % |
| 98 | % | ||||||||||||||||||||||||
Eaton Corporation plc |
| $ 48,092 |
|
| $ 31,824 |
|
| $17,858 |
|
| 91,987 |
|
| 31 | % |
| 68 | % |
| 174 | % |
| 225 | % | ||||||||||||||||||||||||
General Dynamics Corporation |
| $ 42,609 |
|
| $ 51,308 |
|
| $37,925 |
|
| 100,700 |
|
| -13 | % |
| -22 | % |
| 21 | % |
| 165 | % | ||||||||||||||||||||||||
Johnson Controls International plc |
| $ 33,727 |
|
| $ 40,815 |
|
| $22,317 |
|
| 97,000 |
|
| 18 | % |
| 33 | % |
| 51 | % |
| 74 | % | ||||||||||||||||||||||||
Lockheed Martin Corporation |
| $ 99,318 |
|
| $ 50,710 |
|
| $65,398 |
|
| 114,000 |
|
| -6 | % |
| 19 | % |
| 86 | % |
| 601 | % | ||||||||||||||||||||||||
Phillips 66 |
| $ 30,550 |
|
| $ 54,721 |
|
| $64,171 |
|
| 14,300 |
|
| -34 | % |
| -22 | % |
| 2 | % |
| N/A |
| ||||||||||||||||||||||||
Raytheon Technologies Corporation |
| $107,863 |
|
| $162,153 |
|
| $56,587 |
|
| 181,000 |
|
| -17 | % |
| 2 | % |
| 43 | % |
| 96 | % | ||||||||||||||||||||||||
Schlumberger Limited
|
| $ 30,388 |
|
| $ 42,434 |
|
| $23,601 |
|
| 86,000 |
|
| -44 | % |
| -63 | % |
| -63 | % |
| -66 | % | ||||||||||||||||||||||||
All Compensation Peers (16) | ||||||||||||||||||||||||||||||||||||||||||||||||
Honeywell Percentile Rank | 100 | % | 62 | % | 41 | % | 74 | % | 84 | % | 90 | % | 77 | % | 94 | % | ||||||||||||||||||||||||||||||||
Honeywell TSR Rank Order | 4 | 3 | 5 | 2 |
MKT Cap ($M) (12/31/2021) | Total Assets ($M) | Sales ($M) | Empees (#) | Total Shareowner Return (12/31/2021) | ||||||||||||||||||||||||||||||||||||||||
Company Name | 1 Year | 2 Years | 3 Years | 5 Years | 10 Years | |||||||||||||||||||||||||||||||||||||||
Honeywell International Inc. | $ | 143,543 | $ | 64,470 | $ | 34,392 | 99,000* | 0% | 23% | 68% | 108% | 397% | ||||||||||||||||||||||||||||||||
3M Company | $ | 102,360 | $ | 47,072 | $ | 35,355 | 95,000 | 5% | 8% | 3% | 16% | 186% | ||||||||||||||||||||||||||||||||
The Boeing Company | $ | 118,316 | $ | 138,552 | $ | 62,286 | 142,000 | -6% | -38% | -36% | 39% | 235% | ||||||||||||||||||||||||||||||||
Caterpillar Inc. | $ | 111,834 | $ | 82,793 | $ | 50,971 | 107,700 | 16% | 47% | 76% | 154% | 202% | ||||||||||||||||||||||||||||||||
Deere & Company | $ | 105,407 | $ | 84,114 | $ | 43,956 | 75,550 | 29% | 104% | 141% | 262% | 449% | ||||||||||||||||||||||||||||||||
Dow Inc. | $ | 41,951 | $ | 62,990 | $ | 54,968 | 35,700 | 7% | 15% | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
DuPont de Nemours, Inc. | $ | 41,852 | $ | 45,707 | $ | 16,653 | 28,000 | 15% | 31% | 13% | 11% | 164% | ||||||||||||||||||||||||||||||||
Eaton Corporation plc | $ | 68,886 | $ | 34,027 | $ | 19,628 | 86,000 | 47% | 92% | 174% | 200% | 441% | ||||||||||||||||||||||||||||||||
Emerson Electric Co. | $ | 55,308 | $ | 24,715 | $ | 18,236 | 86,700 | 18% | 28% | 69% | 92% | 169% | ||||||||||||||||||||||||||||||||
General Dynamics Corporation | $ | 58,108 | $ | 50,073 | $ | 38,469 | 103,100 | 44% | 25% | 43% | 35% | 297% | ||||||||||||||||||||||||||||||||
General Electric Company | $ | 103,696 | $ | 198,874 | $ | 74,196 | 168,000 | 10% | 7% | 64% | -58% | -13% | ||||||||||||||||||||||||||||||||
Illinois Tool Works Inc. | $ | 77,466 | $ | 16,077 | $ | 14,455 | 45,000 | 24% | 44% | 110% | 127% | 566% | ||||||||||||||||||||||||||||||||
Johnson Controls International plc | $ | 57,269 | $ | 41,890 | $ | 23,668 | 101,000 | 77% | 109% | 194% | 124% | 270% | ||||||||||||||||||||||||||||||||
Lockheed Martin Corporation | $ | 98,017 | $ | 50,873 | $ | 67,044 | 114,000 | 3% | -4% | 47% | 62% | 499% | ||||||||||||||||||||||||||||||||
Phillips 66 | $ | 31,752 | $ | 55,594 | $ | 111,930 | 14,000 | 9% | -28% | -4% | 2% | N/A | ||||||||||||||||||||||||||||||||
Raytheon Technologies Corporation | $ | 129,019 | $ | 161,404 | $ | 64,388 | 174,000 | 23% | 3% | 48% | 50% | 154% | ||||||||||||||||||||||||||||||||
Schlumberger Limited | $ | 42,009 | $ | 41,511 | $ | 22,929 | 92,000 | 40% | -22% | -8% | -58% | -43% | ||||||||||||||||||||||||||||||||
Compensation Peer Median | $ | 73,176 | $ | 50,473 | $ | 41,213 | 93,500 | 17% | 20% | 48% | 50% | 219% | ||||||||||||||||||||||||||||||||
Honeywell Percentile Rank | 100% | 67% | 39% | 58% | 4% | 52% | 62% | 68% | 75% | |||||||||||||||||||||||||||||||||||
Honeywell TSR Rank Order | 16 | 9 | 7 | 6 | 5 |
Honeywell TSR Outperformed Compensation Peer |
|
Sales Growth | Incremental Margin | Adjusted EPS Growth | Free Cash Flow Margin | ||||||||
Peer segment margin calculated as EBIT divided by sales.
Three-Year Cumulative Growth
Total Shareowner Return | Sales Growth | Segment Margin Expansion (bps) | Adjusted EPS Growth | ||||||||
| 2022 |
|
Three-Year Average Return
THREE-YEAR AVERAGE RETURN
Return on Invested Capital | Return on Assets | Return on Equity | ||||||
Cumulative Total Shareowner Return
RELATIVE TO PEERS
Cumulative two-year TSR represents the COVID-19 pandemic impacted period | Cumulative five-year TSR is more than double the Compensation Peer Group median return | Cumulative 10-year TSR exceeded the Compensation Peer Group median by a multiple of 1.8x |
2021.
|
Base Salary | • |
2022. • | his role, and to better align his cash compensation with comparable peer company CFOs. •For Mses. Madden and Dallara and Mr.
•For all NEOs,
| |||||||||||||||||
| •For Mr. Adamczyk, ICP
|
| target. •80% of payout based on Company performance against the two pre-established ICP metrics of adjusted EPS and Mr. Madsen. •20% of payouts were determined based on the MDCC’s qualitative assessment of individual performance and accomplishments discussed starting on page | |||||||||||||||||
Performance
(2021-2023) | •Represented 50% of annual LTI. | • |
| |||||||||||||||||
Stock Options | •Represented 35% of annual LTI. | • |
| |||||||||||||||||
| •Represented 15% of annual LTI. | • |
| |||||||||||||||||
| 2022 |
|
I 20202021 TOTAL ANNUAL DIRECT COMPENSATION FOR EACH NAMED EXECUTIVE OFFICER (NEO)
NEO
NEO | Position | Base Salary | Annual Incentive Plan (ICP)(1) | 2020-2022 Performance Plan Units(2) | Stock Options(3) | Restricted Stock Units(4) | Total Annual Direct Compensation | |||||||||||||||||||
Darius Adamczyk | Chairman and CEO | $ | 1,566,154 |
|
| $2,508,000 |
|
| $7,014,804 |
| $ | 4,898,608 |
| $ | 2,098,672 |
|
| $18,086,238 |
| |||||||
Gregory P. Lewis | SVP, Chief Financial Officer | $ | 753,711 |
|
| $ 689,000 |
|
| $2,168,555 |
| $ | 1,502,982 |
| $ | 633,220 |
|
| $ 5,747,468 |
| |||||||
Anne T. Madden | SVP, General Counsel | $ | 825,529 |
|
| $ 758,000 |
|
| $2,168,555 |
| $ | 1,502,982 |
| $ | 633,220 |
|
| $ 5,888,286 |
| |||||||
Rajeev Gautam | President and CEO, Performance Materials and Technologies | $ | 768,394 |
|
| $ 503,000 |
|
| $2,111,984 |
| $ | 1,468,726 |
| $ | 615,128 |
|
| $ 5,467,232 |
| |||||||
John F. Waldron | President and CEO, Safety and Productivity Solutions | $ | 704,769 |
|
| $ 908,000 |
|
| $1,753,701 |
| $ | 1,224,652 |
| $ | 524,668 |
|
| $ 5,115,790 |
|
|
|
|
|
I ELEMENTS OF 2020 TOTAL ANNUAL DIRECT COMPENSATION
DARIUS ADAMCZYK Chairman and CEO | Total Annual Direct Compensation: $20,566,195 | ||||
GREGORY P. LEWIS | Total Annual Direct Compensation: $6,629,344 | ||||
| |||||
ANNE T. MADDEN SVP, General Counsel | Total Annual Direct Compensation: $6,720,309 | ||||
QUE THANH DALLARA President and CEO, Honeywell Connected Enterprise | Total Annual Direct Compensation: $5,367,608 | ||||
MICHAEL R. MADSEN President and CEO, Aerospace | Total Annual Direct Compensation: $4,697,640 |
nAnnual Incentive Plan (ICP)(1) |
| |||||||
nStock Options(3) | nRestricted Stock Units (RSUs)(4) |
Effective January 1, 2020, Ms. Madden received a 10% promotional increase in base salary when her role of Senior Vice President, General Counsel was expanded to include responsibility for company-wide mergers and acquisitions.
Effective March 31, 2020, the base salary for each of the NEOs (including the CEO) was reduced by 10% as part ofCOVID-19 pandemic-related cost reduction actions. This reduction remained in place until November 1, 2020, at which time the 10% reduction was lifted.actions). The MDCC did not approve any actions or awards intended to make-upaverage 2021 merit increase for these base salary reductions.
Notice and Proxy Statement | 2022 | 59 |
For 2020,
•Mr. Adamczyk: 175%
•Other NEOs: 100%
I2021.
Significance | ICP Weighting (Formulaic) | |||||||||
Metric | Corporate NEOs | Business Unit NEOs | ||||||||
Adjusted EPS |
• Viewed as the most important measure of near-term profitability that has a direct impact on stock price and shareowner value creation. |
|
50% |
|
|
25 |
% | |||
Business Unit Income Contribution |
• Business unit measure of near-term profitability and contribution to overall Company performance. |
|
— |
|
|
25 |
% | |||
Total Honeywell Adjusted Free Cash Flow |
• Reflects quality of earnings and incremental cash generated from operations that may be reinvested in Honeywell businesses, used to make acquisitions, or returned to shareowners in the form of dividends or share repurchases. |
|
50% |
|
|
25 |
% | |||
Business Unit Adjusted Free Cash Flow |
• Business unit contribution to overall Company adjusted free cash flow performance. |
|
— |
|
|
25 |
% | |||
Total |
|
100% |
|
|
100 |
% |
ICP Weighting (Formulaic) | |||||||||||
Metric | Significance | Corporate NEOs | Business Unit NEOs | ||||||||
Adjusted Honeywell EPS | Viewed as the most important measure of near-term profitability that has a direct impact on stock price and shareowner value creation. | 50 | % | 25 | % | ||||||
Business Unit Metric 1: Revenue Contribution (HCE) Income Contribution (AERO) | HCE: Measure of contribution of HCE initiatives toward segment level revenue goals. AERO: Business unit measure of near-term profitability and contribution to overall Company performance. | — | 25 | % | |||||||
Total Honeywell Free Cash Flow | Reflects quality of earnings and incremental cash generated from operations that may be reinvested in our businesses, used to make acquisitions, or returned to shareowners in the form of dividends or share repurchases. | 50 | % | 25 | % | ||||||
Business Unit Metric 2: Profit Contribution (HCE) Free Cash Flow (AERO) | HCE: Measure of contribution of HCE initiatives toward profitability. AERO: Business unit contribution to overall Company free cash flow performance. | — | 25 | % | |||||||
Total | 100 | % | 100 | % |
ICP Goal | 2019 ICP Goal (Target) | 2019 ICP Goal (Actual) | 2020 ICP Goal (Target) | 2020 Goal v. 2019 Goal | Basis for 2020 Goals | 2020 (50% | 2020 (200% | |||||||||
Adjusted EPS
|
$7.95 |
$8.16 |
$8.80 | +10.7% |
• Midpoint of initial guidance range communicated to investors on January 31, 2020 (pre-pandemic) | $7.04 | $10.56 | |||||||||
Total Honeywell Adjusted Free Cash Flow | $5.700 billion | $6.271 billion | $5.950 billion | +4.4% | $4.760 billion | $7.140 billion | ||||||||||
ICP Goal | 2020 ICP Goal Actual Performance | 2021 ICP Goal | 2021 Goal v. 2020 Actual | Basis for 2021 Goals | 2021 Threshold (50% Payout) | 2021 Maximum (200% Payout) | |||||||||||||||||||||||
Adjusted EPS | $7.10 | $7.80 | +9.9% | Midpoint of initial guidance range communicated to investors on January 29, 2021 (Guidance Range) | $6.24 | $9.36 | |||||||||||||||||||||||
Total Honeywell Free Cash Flow | $5.30 billion | $5.30 billion | same | $4.24 billion | $6.36 billion |
| 2022 |
|
Determining Actual Performance Against the 2020 ICP Goals
For 2020, despite the negative impacts of the pandemic on earnings and free cash flow, the MDCC maintained the existing ICP target goals and plan design that were established in early February 2020. While the MDCC considered adjustments to the payout calculation due to the extraordinary impact of the pandemic, as permitted by the plan, no such adjustments were made to the measurement of results against the 2020 formulaic ICP Goals.
IACTUAL PERFORMANCE AGAINST 20202021 ICP GOALS
ICP Goal
| 2020 ICP
| 2020 Actual
| Achievement
| 2020 Performance
| Metric
| Corporate
| Calculated
| |||||||||||
Adjusted EPS | $8.80 | $7.10 | 80.7% | • Annual Goal set in February 2020 based on pre-pandemic guidance. • Actual performance just above goal Threshold. • No pandemic related adjustments made to 2020 formulaic calculation. | 51.8% | 50% | 26% | |||||||||||
Total Honeywell Adjusted Free Cash Flow | $5.950 billion | $5.302 billion | 89.1% | • Annual Goal set in February 2020 based on pre-pandemic guidance. • No pandemic related adjustments made to 2020 formulaic calculation. | 72.8% | 50% | 36% | |||||||||||
Total Calculated (Formulaic) Payout: Corporate NEOs | 62% |
Mr. Gautam’s formulaic payout portion of ICP (80% of ICP) was based on performance against the 2020 ICP goals for both Total Honeywell and the PMT business unit, as follows:
ICP Goal | 2020 ICP (Target) | 2020 Actual Performance | Achievement % | Metric Payout Percentage* | PMT Weighting | Calculated Payout Percentage | ||||||||||
Adjusted EPS
|
$8.80
|
$7.10
|
80.7%
|
51.8%
|
25%
|
13%
| ||||||||||
Total Honeywell Adjusted Free Cash Flow
|
$5.950 billion
|
$5.302 billion
|
89.1%
|
72.8%
|
25%
|
18%
| ||||||||||
PMT Income Contribution
|
$1.912 billion
|
$1.431 billion
|
74.8%
|
0%
|
25%
|
0%
| ||||||||||
PMT Adjusted Free Cash Flow
|
$1.912 billion
|
$1.882 billion
|
98.4%
|
96.0%
|
25%
|
24%
| ||||||||||
Total Calculated (Formulaic) Payout: PMT | 55% |
Mr. Waldron’s formulaic payout portion of ICP (80% of ICP) was based on performance against the 2020 ICP goals for both Total Honeywell and the SPS business unit, as follows:
ICP Goal | 2020 ICP (Target) | 2020 Actual Performance | Achievement % | Metric Payout Percentage* | SPS Weighting | Calculated Payout Percentage | ||||||||||
Adjusted EPS
|
$8.80
|
$7.10
|
80.7%
|
51.8%
|
25%
|
13%
| ||||||||||
Total Honeywell Adjusted Free Cash Flow
|
$5.950 billion
|
$5.302 billion
|
89.1%
|
72.8%
|
25%
|
18%
| ||||||||||
SPS Income Contribution |
$0.636 billion
|
$0.707 billion
|
111.2%
|
156.0%
|
25%
|
39%
| ||||||||||
SPS Adjusted Free Cash Flow
|
$0.668 billion
|
$0.832 billion
|
124.6%
|
200.0%
|
25%
|
50%
| ||||||||||
Total Calculated (Formulaic) Payout: SPS | 120% |
ICP Goal | 2021 ICP Goal (Target) | 2021 Actual Performance | Achievement % | 2021 Performance | Metric Payout Percentage* | Corporate NEO Weighting | Calculated Payout Percentage | ||||||||||||||||
Adjusted EPS | $7.80 | $8.06 | 103.3% | Annual Goal set in February 2021 based on midpoint of the Guidance Range. Actual performance exceeded top end of the Guidance Range of $7.60-$8.00. | 116.5% | 50% | 58.25 | % | |||||||||||||||
Total Honeywell Free Cash Flow | $5.30 billion | $5.73 billion | 108.1% | Annual Goal set in February 2021 based on midpoint of the Guidance Range. Actual performance exceeded top end of the Guidance Range of $5.10B-$5.50B. | 140.5% | 50% | 70.25 | % | |||||||||||||||
Total Calculated (Formulaic) Payout: Corporate NEOs | 129 | % |
Total Calculated (Formulaic) Payout: HCE (Ms. Dallara) | 111 | % |
ICP Goal | 2021 ICP Goal (Target) | 2021 Actual Plan Performance | Achievement % | Metric Payout Percentage* | Aerospace Weighting | Calculated Payout Percentage | ||||||||||||||||||||
Adjusted EPS | $7.80 | $8.06 | 103.3 | % | 116.5 | % | 25 | % | 29.1 | % | ||||||||||||||||
Total Honeywell Free Cash Flow | $5.30 billion | $5.73 billion | 108.1 | % | 140.5 | % | 25 | % | 35.1 | % | ||||||||||||||||
AERO Income Contribution | $2.462 billion | $2.403 billion | 97.6 | % | 94.0 | % | 25 | % | 23.5 | % | ||||||||||||||||
AERO Free Cash Flow | $2.511 billion | $2.343 billion | 93.3 | % | 83.3 | % | 25 | % | 20.8 | % | ||||||||||||||||
Total Calculated (Formulaic) Payout: AERO (Mr. Madsen) | 109 | % |
|
|
IICP INDIVIDUAL QUALITATIVE PORTION (20% OF TARGET AWARD)
ICP qualitative assessment.
| |||||||||||
Mr. Adamczyk – Qualitative Considerations • –Innovated quickly,
–Deployed supply chain automation capabilities to organize and conduct mass vaccination events at Bank of America Stadium and Charlotte Motor Speedway, two of the largest sporting venues in North Carolina, enabling over 150,000 people to get vaccinated against COVID-19. –Managed through supply chain challenges and mitigated sales risk by deploying digital tools to manage impact of shortages, by proactively identifying part substitutions, and by reengineering products with alternative components. –Implemented swift pricing adjustments to combat the outsized inflation environment. • business day-to-day. •Under Mr. free cash flow growth. •Further advanced year. •
• • Cambridge Quantum Computing to form Quantinuum, the world's largest and most advanced full-stack quantum computing company. •Recognized as one of the World's Most Ethical Companies by Ethisphere; the sixth time receiving this recognition. •Drove a robust
| |||||||||||
DARIUS ADAMCZYK Chairman and Chief Executive Officer | |||||||||||
–Public commitment to achieving carbon neutral facilities and operations by 2035. –>60% of
–~60% of new product research and
–An award-winning global citizenship initiative, including STEM (science, technology, engineering, and math) education as well as focus on inclusion and diversity and humanitarian relief.
| –An inclusion and diversity program ingrained in
–Increased representation of women and
–Ensuring that Honeywell has zero tolerance for discrimination or a hostile work environment. –Required annual training and certification on Code of Business Conduct from 100% of all eligible employees. | ||||||||||
| 2022 |
|
| ||||||||
Mr. Lewis – Qualitative Considerations •Under Mr.
•Continued to lead Honeywell's crisis management process and team through the prolonged pandemic. •Mobilized the organization to respond to inflationary pressures; took decisive actions to increase price by over $1.1 billion resulting in operating system; validated accuracy of price reporting through targeted audits. • •Furthered Honeywell Digital initiatives delivering over $500 million in benefits across gross margin, productivity, and working capital. •Deployed $8.5 billion of capital to share repurchases, dividends, capital expenditures, and •Drove working capital improvements across the company resulting in •Issued $2.5 billion of debt at attractive long-term interest rates to further strengthen our balance sheet. •
managed ratings agency relationships, protecting Honeywell's strong credit rating. • |
GREGORY P. LEWIS Senior Vice President, Chief Financial Officer | ||||||||
|
|
|
|
|
Ms. Madden – Qualitative Considerations • •Championed Honeywell’s ESG and communities. •Played key leadership role in inclusion and diversity efforts across the Company, including co-sponsorship of •Further refined the strategic Center of Excellence (COE) for Compliance, increasing productivity in risk assessment and risk management. Successfully negotiated the Export Consent Agreement with the State Department. Implemented the Consent Agreement management team and process and appointed a new Export leader. Effectively built relationships with State Department, independent monitor, and company leadership on the Export Consent Agreement plan and support required. •Created renewed focus on mergers and acquisitions and Honeywell Ventures by establishing new leadership on both teams and new structures designed to drive more robust strategic pipeline development. Closed the acquisitions of Sparta Systems, Fiplex, and Performix, created Quantinuum, and completed nine venture stage investments – a total of over $1.6 billion deployed on M&A. Divested the retail footwear business and announced the agreement to acquire US Digital Designs. •Drove •Achieved positive resolution of key •Oversaw implementation of new process for cyber risk analysis, quantification, and risk reduction. Implemented new tools and automation to provide augmented identification of opensource vulnerabilities for all products and enhanced the | ||||||||
ANNE T. MADDEN Senior Vice President, General Counsel | ||||||||
| Notice and
|
|
Ms. Dallara – Qualitative Considerations • •Successfully completed the acquisition and integration of Sparta Systems, opening the Life Sciences vertical to HCE. Delivered double-digit growth in Sparta and positioned the business to be earnings accretive in 2022. Also successfully completed the acquisition and integration of Sine Group, leading Sine to become the benchmark employee experience application for helping customers in their return-to-work efforts. Oversaw the continued workforce expansion of these businesses. •Landed a key partnership with Microsoft to accelerate the Connected Enterprise product vision across key verticals in Industrials and Buildings. The agreement will focus on co-development of key product initiatives while also driving a joint go-to-market effort to better serve our mutual customers on their digital transformation journey. •Pioneered the Operational Technology system of record with the development of the •Deployed a centralized AI Advanced analytics platform, “Forge Insights”, accelerating digital transformation for Honeywell operations, realizing over $50 million in | ||||||||
QUE THANH DALLARA President and Chief Executive Officer, Honeywell Connected Enterprise (HCE) |
Mr. Madsen – Qualitative Considerations •Delivered strong Aerospace financial performance •Launched the Anthem cockpit suite, Honeywell’s first all-new cockpit system in approximately 20 years, with •Successfully led multiple key urban air mobility / unmanned aerial systems (UAM / UAS) pursuits including wins with the
•Led the
•Completed critical software development, certification, and •Successfully supported COMAC C919 certification efforts across multiple product offerings, further positioning Honeywell to capitalize on the promising new platform. •Improved our operational quality performance by 35% to an all-time best performance of 1,162 ppm or 99.88% delivered quality. •Improved Airbus airline rating scores by 15% (versus average supplier improvement of 10%), with our APU business •Improved Boeing airline rating scores by 12% placing Honeywell •Launched important STEM-focused community engagement activities with Arizona. • | ||||||||
MICHAEL R. MADSEN President and
Chief Executive Officer, Aerospace (AERO) | ||||||||
| 2022 |
|
|
|
|
|
|
IAPPROVED ICP PAYOUT AMOUNTS
Formulaic Portion(1) | + |
Qualitative Portion(2) | = | Total Individual ICP Payout Percentage | × | Target 2020 ICP Award Amount (5) | = | Actual 2020 ICP Award (rounded) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Attainment | × | Weight | Payout% | Attainment | x | Weight% | Payout% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk |
| 62% |
|
| 80% |
|
| 49.6% |
|
| 200% |
|
| 20% |
|
| 40% |
|
| 89.6% |
|
| $2,800,000 |
|
| $2,508,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis |
| 62% |
|
| 80% |
|
| 49.6% |
|
| 200% |
|
| 20% |
|
| 40% |
|
| 89.6% |
|
| $ 770,000 |
|
| $ 689,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden | 62% |
| 80% |
|
| 49.6% |
|
| 200% |
|
| 20% |
|
| 40% |
|
| 89.6% |
|
| $ 847,000 |
|
| $ 758,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Gautam |
| 55% | (3) |
| 80% |
|
| 44.0% |
| 100% |
| 20% |
|
| 20% |
|
| 64.0% |
|
| $ 785,000 |
|
| $ 503,000 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Waldron |
| 120% | (4) |
| 80% |
|
| 96.0% |
|
| 150% |
|
| 20% |
|
| 30% |
|
| 126.0% |
|
| $ 720,000 |
|
| $ 908,000 |
|
|
|
|
|
|
2020 Base Salary(a) | x | Individual Target ICP Award % | = | Target 2020 ICP Award Amount | ||||||||||||||||
Mr. Adamczyk |
| $1,600,000 |
|
| 175 | % |
| $2,800,000 |
| |||||||||||
Mr. Lewis |
| $ 770,000 |
| 100 | % |
| $ 770,000 |
| ||||||||||||
Ms. Madden |
| $ 847,000 |
| 100 | % |
| $ 847,000 |
| ||||||||||||
Mr. Gautam |
| $ 785,000 |
|
| 100 | % |
| $ 785,000 |
| |||||||||||
Mr. Waldron |
| $ 720,000 |
|
| 100 | % |
| $ 720,000 |
|
|
Formulaic Portion(1) | + | Qualitative Portion(2) | = | Total Individual ICP Payout Percentage | x | Target 2021 ICP Award Amount(5) | = | Actual 2021 ICP Award (rounded) | |||||||||||||||||||||||||||||||||||||||||||||
Attainment | x | Weight | Payout % | Attainment | x | Weight% | Payout % | ||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk | 129 | % | 80 | % | 103.2 | % | 150 | % | 20 | % | 30 | % | 133.2 | % | $ | 2,932,328 | $ | 3,910,000 | |||||||||||||||||||||||||||||||||||
Mr. Lewis | 129 | % | 80 | % | 103.2 | % | 150 | % | 20 | % | 30 | % | 133.2 | % | $ | 830,493 | $ | 1,107,000 | |||||||||||||||||||||||||||||||||||
Ms. Madden | 129 | % | 80 | % | 103.2 | % | 150 | % | 20 | % | 30 | % | 133.2 | % | $ | 869,458 | $ | 1,159,000 | |||||||||||||||||||||||||||||||||||
Ms. Dallara (3) | 111 | % | 80 | % | 88.8 | % | 150 | % | 20 | % | 30 | % | 118.8 | % | $ | 676,466 | $ | 804,000 | |||||||||||||||||||||||||||||||||||
Mr. Madsen (4) | 109 | % | 80 | % | 87.2 | % | 125 | % | 20 | % | 25 | % | 112.2 | % | $ | 737,052 | $ | 827,000 |
2021 Applicable Base Salary (a) | x | Individual Target ICP Award % | = | Target 2021 ICP Award Amount | |||||||||||||
Mr. Adamczyk | $1,675,616 | 175 | % | $2,932,328 | |||||||||||||
Mr. Lewis | $830,493 | 100 | % | $830,493 | |||||||||||||
Ms. Madden | $869,458 | 100 | % | $869,458 | |||||||||||||
Ms. Dallara | $676,466 | 100 | % | $676,466 | |||||||||||||
Mr. Madsen | $737,052 | 100 | % | $737,052 |
Grants of LTI awards to the CEO and |
I
Notice and Proxy Statement | 2022 | 65 |
•The relative value of long-term incentive awards granted to comparable named executive officers at the Compensation Peer Group companies.
Any changes in scope•Scope of responsibilities.
•The senior executive development and succession plan.
•Each NEO’s leadership impact and expected future contribution toward the overall success of Honeywell.
|
|
|
IPERFORMANCE STOCK UNITS
2018-2020 Performance Plan Assessment
PSUs are issued under the share-based Performance Plan first introduced in 2017 in response to shareowner feedback. In February 2021, the MDCC certified the performance results and payouts for the 2018-2020 performance period of the Performance Plan, which ended on December 31, 2020. In reviewing performance for this cycle, the MDCC noted that the extraordinary impacts from the pandemic on 2020 company performance had reduced the level of payout from pre-pandemic projections by an average of over 25% across the business units. However, the MDCC elected not to make any adjustments to the metrics or measurement of performance for this period as the earned awards were deemed appropriate and reflective of the strong performance delivered, particularly in the first two years of the cycle, and relative TSR outperformance over the three-year period.
For the NEOs who were executive officers in 2018 at the time of grant (Messrs. Adamczyk, Gautam, and Waldron and Ms. Madden), 2018-2020 Performance Plan awards were made in the form of PSUs, with 75% of their earned award based on performance against internal financial goals, and 25% of the earned award based on Honeywell’s TSR relative to the 2018 Compensation Peer Group over the three-year performance period. For the NEO who was not an executive officer at the time of grant in 2018 (Mr. Lewis), 2018-2020 Performance Plan awards were made in the form of performance cash units, with 100% of the earned award based exclusively on the same internal financial goals as the officer PSUs, but with no relative TSR component.
Honeywell’s plan-basis TSR of 49.2% for the three-year performance period (January 1, 2018-December 31, 2020) was 90th percentile when ranked with the 2018 Compensation Peer Group, as follows:
Company Name | 3-Year TSR(1) | 3-Year Relative Percentile Ranking | ||||||||||
Deere & Company | 66.8 | % | 100 | % | ||||||||
Eaton Corporation plc | 57.0 | % | 92 | % | ||||||||
Illinois Tool Works Inc. | 30.7 | % | 85 | % | ||||||||
Johnson Controls International plc | 27.4 | % | 77 | % | ||||||||
Emerson Electric Co. | 20.7 | % | 69 | % | ||||||||
Caterpillar Inc. | 18.1 | % | 62 | % | ||||||||
Lockheed Martin Corporation | 15.5 | % | 54 | % | ||||||||
Raytheon Technologies Corporation | -1.8 | % | 46 | % | ||||||||
3M Company | -20.9 | % | 38 | % | ||||||||
General Dynamics Corporation | -23.7 | % | 31 | % | ||||||||
Phillips 66 | -26.0 | % | 23 | % | ||||||||
The Boeing Company | -30.4 | % | 15 | % | ||||||||
General Electric Company | -31.5 | % | 8 | % | ||||||||
Schlumberger Limited | -66.5 | % | 0 | % | ||||||||
Honeywell International Inc. | 49.2 | % | 90 | % |
|
|
|
|
Based on their assessment of Company performance against the targets established for the 2018-2020 performance period, the MDCC determined payouts for the NEOs as displayed and described in the tables below:
2018-2020 PSU Payouts (Messrs. Adamczyk, Gautam, and Waldron and Ms. Madden)
Total Honeywell (HON) | Weight | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weighted Payout % | |||||||||||||||||||||||||||||||||||||
3-Year Cumulative Revenue ($M) |
| 25% |
|
| $106,582 |
|
| $110,448 |
|
| >= $114,313 |
|
| $111,160 |
|
| 118% |
|
| 29.5% |
| |||||||||||||||||||||||
3-Year Average Segment Margin Rate |
| 25% |
|
| 19.7% |
|
| 20.2% |
|
| >= 20.7% |
|
| 20.5% |
|
| 160% |
|
| 40.0% |
| |||||||||||||||||||||||
3-Year Average ROI |
| 25% |
|
| 22.5% |
|
| 23.2% |
|
| >= 24.0% |
|
| 23.7% |
|
| 163% |
|
| 40.8% |
| |||||||||||||||||||||||
3-Year Relative TSR |
| 25% |
|
| 35th Percentile |
|
| 50th Percentile |
|
| >= 75th Percentile |
|
| 90th Percentile |
|
| 200% |
|
| 50.0% |
| |||||||||||||||||||||||
Total Earned Payout Percentage–Corporate NEOs (Mr. Adamczyk and Ms. Madden)–Based 100% on performance against Total Honeywell (HON) goals |
|
| 160% |
| ||||||||||||||||||||||||||||||||||||||||
Total Earned Payout Percentage–PMT Business Unit (Mr. Gautam)–Financial metrics portion based 50% on HON and 50% on Business Unit goals(2) |
|
| 105% |
| ||||||||||||||||||||||||||||||||||||||||
Total Earned Payout Percentage–SPS Business Unit (Mr. Waldron)–Financial metrics portion based 50% on HON and 50% on Business Unit goals(2) |
|
| 155% |
| ||||||||||||||||||||||||||||||||||||||||
(1) Revenue adjusted to exclude the impact of corporate transactions and fluctuations in foreign currency. Segment margin adjusted to exclude the impact of corporate transactions. ROI adjusted to exclude the impact of corporate transactions and impact of pension. |
| |||||||||||||||||||||||||||||||||||||||||||
(2) Business Unit goals are based on the Business Unit’s performance on 3-year revenue, segment margin and ROI metrics. |
|
Based on the earned award percentages for the 2018-2020 performance period, for those NEOs who received their 2018-2020 Performance Plan award in the form of PSUs, the following individual awards were earned:
NEO | 2018-2020 PSUs @ Target(1) | Total Earned Payout % | Total PSUs Earned | |||||||||
Mr. Adamczyk |
| 43,086 |
|
| 160 | % |
| 68,938 |
| |||
Ms. Madden | �� |
| 9,834 |
|
| 160 | % |
| 15,734 |
| ||
Mr. Gautam |
| 13,258 |
|
| 105 | % |
| 13,921 |
| |||
Mr. Waldron |
| 9,171 |
|
| 155 | % |
| 14,215 |
|
|
Earned awards became fully vested on February 27, 2021. 50% of the PSUs earned were converted to shares of Honeywell common stock, with the net shares paid subject to an additional one-year holding period, in accordance with the officer stock ownership guidelines. The remaining 50% was converted to cash based on the closing stock price of Honeywell common stock on December 31, 2020 and paid in March 2021.
2018-2020 Performance Cash Unit Payouts (Mr. Lewis only)
Weight | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weighted Payout % | ||||||||||||||||||||||||||||||||||||||
3-Year Cumulative Revenue ($M) |
| 33.3% |
|
| $106,582 |
|
| $110,448 |
|
| >= $114,313 |
|
| $111,160 |
|
| 118% |
|
| 39.3% |
| |||||||||||||||||||||||
3-Year Average Segment Margin Rate |
| 33.3% |
|
| 19.7% |
|
| 20.2% |
|
| >= 20.7% |
|
| 20.5% |
|
| 160% |
|
| 53.3% |
| |||||||||||||||||||||||
3-Year Average ROI |
| 33.3% |
|
| 22.5% |
|
| 23.2% |
|
| >= 24.0% |
|
| 23.7% |
|
| 163% |
|
| 54.3% |
| |||||||||||||||||||||||
Total Earned Payout Percentage–Corporate NEO (Mr. Lewis) — Based 100% on performance against Total Honeywell goals |
| 147% |
|
Based on the earned award percentage for the 2018-2020 performance period, the NEO who was originally granted his 2018-2020 Performance Plan award in the form of performance cash units received the following earned payout:
NEO | 2018-2020 Performance Cash Units | Value Per Unit | Total Earned Award Percentage | Total Cash Award Earned | ||||||||||||
Mr. Lewis |
| 5,250 |
| $ | 100 |
|
| 147% |
| $ | 771,750 |
|
|
|
|
The earned award for Mr. Lewis became fully vested on February 27, 2021 and was paid in cash in March 2021. In accordance with SEC disclosure requirements for cash-based awards, 100% of the earned cash award for Mr. Lewis for the 2018-2020 performance period is included as 2020 Non-Equity Incentive Compensation on the Summary Compensation Table in this Proxy Statement, even though originally granted in 2018.
2020-2022 Performance Plan Awards
Under the 2020-20222021-2023 Performance Plan, a target number of PSUs was issued to each NEO on February 14, 2020March 15, 2021 for the performance period of January 1, 2020,2021 through December 31, 2022,2023, representing 50% of their total annual LTI value and mix. Established before COVID-19 began to have wide-ranging impact on the global economy, the original performance targets envisioned growth in each year of the three-year performance period and did not anticipate the unprecedented disruption caused by the pandemic which began a month later. While the three-year relative TSR metric remains relevant, as a result of the significant impact of the pandemic on our major end-markets, the original internal financial metric targets set for the 2020-2022 cycle became unattainable soon after they were set, with projected full cycle performance against each of the three financial metrics falling to near, or below, threshold levels. Over the course of the year, the MDCC discussed the negative impact of the pandemic on all three PSU cycles in progress and assessed whether the objectives of the 2019-2021 and 2020-2022 plans (to incentivize, retain and reward executives for driving attainment of specific company goals) had been compromised by the extraordinary events that occurred in 2020. The MDCC recognized these circumstances were not unique to Honeywell and solicited feedback from its shareowners regarding their views on adjustments to incentive plans for companies that experienced a significant negative financial impact from the pandemic, like Honeywell. Shareowners generally recognized the possible need for pandemic-related incentive plan changes in industries hardest hit by the pandemic, with some tolerance for reasonable modifications to annual incentive plans or long-term incentives for the most recent award cycle beginning in 2020. Shareowners noted they would be assessing any such changes on a case-by-case basis, with particular attention paid to the alignment of experience among shareowners, executives, and the broader employee population.
In March 2021, the MDCC determined that, while no changes would be made with respect to the 2019-2021 cycle PSUs at that time, it would be in the best interest of the Company and its shareowners to realign the link between pay and performance for the most recent 2020-2022 PSU awards by recasting the targets for the three internal financial metrics. This was a one-time adjustment to the normal operation of the plan given the extraordinary impact of the pandemic. The MDCC considered alternative approaches, including adjustments to exclude the impact of COVID-19-related expenses or separate, supplemental awards, but determined that the approach chosen was more consistent with the existing plan design, did not require subjective estimates of COVID-19 expenses for a multi-year period, and served to refocus executives on financial goals to be achieved in the post-2020 recovery period. The recast targets retained the original three-year relative TSR goal and effectively replaced the original three-year financial targets with meaningful two-year (2021 and 2022) financial growth targets for the remainder of the three-year cycle, using the mid-point of external guidance for 2021 and accelerating growth rates for 2022. Coincident with this change, the upside total payout opportunity for this performance cycle was reduced by 40%. PSUs issued for the 2021-2023 performance cycle return to using 3-year financial targets, consistent with past practice.
In arriving at this decision, the MDCC took into consideration management’s response and efforts to mitigate pandemic impacts in 2020 by quickly implementing cost controls and pivoting to new opportunities aimed to position the company for strong post-pandemic growth and greater opportunity for shareowner value creation, which resulted in a total shareowner return of 23% for 2020. The MDCC also believes this change is in alignment with the experience of both shareowners and employees. Since the pandemic-driven low of $103.86 on March 23, 2020, Honeywell’s stock price appreciated 105% to $212.70 as of December 31, 2020. The approach for 2020-2022 PSU awards to the NEOs also mirrors the adjustments made to financial metrics for the performance plan that extends to other executive and management-level employees of the Company.
|
|
|
|
The actual number of PSUs earned by each NEO for the 2020-20222021-2023 cycle will be determined at the end of the period based on Company performance as measured by the following four equally-weighted performance metrics;metrics:
3-Year Cumulative Revenue | 3-Year Average ROI | |||||||||||||
(25%) | (25%) | |||||||||||||
•Measures the effectiveness of the Company’s organic growth strategies, including new product introduction and marketing and sales effectiveness, as well as projected growth in our end markets. •Adjusted at measurement to exclude the impact of corporate transactions during the period (e.g., acquisitions and divestitures) and fluctuations in foreign currency rates. | •Focuses leadership on making investment decisions that deliver profitable growth. •Adjusted at measurement to exclude the impact of corporate transactions during the period and the impact of pensions. Results will not be adjusted for foreign currency changes over the cycle. | |||||||||||||
3-Year Average Segment Margin Rate | 3-Year Relative TSR | |||||||||||||
(25%) | (25%) | |||||||||||||
•Focuses executives on driving continued operational improvements and delivering synergies from recent corporate actions and prior period acquisitions. •Adjusted at measurement to exclude the impact of corporate transactions during the period. Results will not be adjusted for foreign currency changes over the cycle. | •Measures Honeywell’s cumulative TSR relative to the 2021 Compensation Peer Group over a three-year performance period of January 1, 2021 – December 31, 2023. •The beginning point for TSR determination (all companies) will be based on an average using the first 30 trading days of the performance period. The ending point will be based on an average using the last 30 trading days of the performance period. |
66 | Notice and Proxy Statement | 2022 |
|
| |||
|
| |||
|
| |||||
|
| |||||
2021-2022 Cumulative Revenue ($M) (1) | % of PSUs | 2021-2022 Average Segment Margin Rate (1) | % of PSUs | 2021-2022 Average ROI (1) | % of PSUs | 3-Year Relative Total Shareowner Return (2) | % of PSUs | |||||||||||||||||||||||||
No payout | < $67,613 | 0% | < 20.7% | 0% | < 20.8% | 0% | < 35th Percentile | 0% | ||||||||||||||||||||||||
— | — | — | 35th Percentile(3) | 6.25% | ||||||||||||||||||||||||||||
Threshold | $67,613 | 12.5% | 20.7% | 12.5% | 20.8% | 12.5% | 40th Percentile | 12.5% | ||||||||||||||||||||||||
Target | $69,170 | 25.0% | 21.1% | 25.0% | 21.3% | 25.0% | 50th Percentile | 25.0% | ||||||||||||||||||||||||
$69,948 | 37.5% | 21.3% | 37.5% | 21.55% | 37.5% | 60th Percentile | 37.5% | |||||||||||||||||||||||||
Maximum (4) | >= $70,726 | 50.0% | >= 21.5% | 50.0% | >= 21.8% | 50.0% | >= 75th Percentile | 50.0% |
| |||||||||||
Notice and | 67 |
|
| Threshold | Target | 150% Payout | Maximum |
|
For the Corporate NEOs, awards are earned based on performance against the Total Honeywell goals stated above. For the Business Unit NEOs, the financial goals portion of the award (75% of the award value, at target) is based 50% on performance against goals set for their respective business unit and 50% against the Total Honeywell goals. Like the Corporate NEOs, the Business Unit NEOs have 25% of their award based on performance against the three-year relative TSR metric noted above. If a NEO transfers between business units during the performance period, the final payout is prorated based on the number of days spent in each respective business unit during the three years covered by the award.
3-Year Cumulative Revenue ($M) | TOTAL MAXIMUM PAYOUT CAPPED AT 200% | ||||||||||||||||||||||||||||||
Segment Margin Rate |
|
% of PSUs earned for each metric | |||||||||||||||||||||||||||||
Threshold | Target | 150% Payout | Maximum | ||||||||||||||||||||||||||
3-Year Relative TSR Percentile (1) | |||||||||||||||||||||||||||||
% of PSUs earned | |||||||||||||||||||||||||||||
|
2020-2022 Performance Plan Awards
exclude unusual or infrequently occurring items, extraordinary items, and the cumulative effect of changes in accounting treatment when determining performance attainment where warranted by events and/or business conditions.
NEO | Target # of PSUs (1) | Grant Date Value(2) | |||||||||
Mr. Adamczyk | 35,300 | $ | 7,502,309 | ||||||||
Mr. Lewis | 11,100 | $ | 2,359,083 | ||||||||
Ms. Madden | 11,100 | $ | 2,359,083 | ||||||||
Ms. Dallara | 9,200 | $ | 1,955,276 | ||||||||
Mr. Madsen | 7,400 | $ | 1,572,722 |
NEO | # of PSUs(1) | Grant Date Value(2) | ||||||
Mr. Adamczyk |
| 37,200 |
| $ | 7,014,804 |
| ||
Mr. Lewis |
| 11,500 |
| $ | 2,168,555 |
| ||
Ms. Madden |
| 11,500 |
| $ | 2,168,555 |
| ||
Mr. Gautam |
| 11,200 |
| $ | 2,111,984 |
| ||
Mr. Waldron |
| 9,300 |
| $ | 1,753,701 |
|
|
|
$212.53 was determined based on the fair market value of Honeywell stock on the date of grant of $214.85 for the three internal financial metrics, and a value of $205.57 for the Relative TSR metric, based on a multifactor Monte Carlo simulation conducted by an independent valuation service provider.
68 | Notice and Proxy Statement | 2022 |
NEO | 2020-2022 Performance Stock Units Modification (1) | ||||
Mr. Adamczyk | $4,754,160 | ||||
Mr. Lewis | $1,469,700 | ||||
Ms. Madden | $1,469,700 | ||||
Ms. Dallara | $1,337,108 | ||||
Mr. Madsen | $898,594 |
Notice and Proxy Statement | 2022 | 69 |
2019-2021 SUMMARY | ||
•Three-year cumulative Shareowner return of 55.9% (61st percentile vs. relevant Compensation Peer Group) •Financial metric attainment impacted by COVID-19 (three-year growth goals set pre-pandemic) •MDCC approved 2019-2021 PSU payout = 87% of target (CEO and Corporate officers) | ||
Total Honeywell | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weight | Weighted Payout % | ||||||||||||||||||||||
3-Year Cumulative Revenue ($M) | $108,543 | $112,480 | $116,417 | $103,775 | 0 | % | 25 | % | 0 | % | |||||||||||||||||||
3-Year Average Segment Margin Rate | 20.7% | 21.2% | >= 21.7% | 20.8 | % | 60 | % | 25 | % | 15 | % | ||||||||||||||||||
3-Year Average ROI | 23.4% | 24.2% | >= 24.9% | 22.1 | % | 0 | % | 25 | % | 0 | % | ||||||||||||||||||
3-Year Relative TSR | 35th Percentile | 50th Percentile | >= 75th Percentile | 61st Percentile | 154 | % | 25 | % | 39 | % | |||||||||||||||||||
Total PSU Calculated Percentage–Corporate NEOs (Messrs. Adamczyk and Lewis, and Ms. Madden)–Based 100% on performance against Total Honeywell goals | 54 | % | |||||||||||||||||||||||||||
Total PSU Calculated Percentage–HCE Business Unit (Ms. Dallara)–Financial metrics portion based 67% on Total Honeywell and 33% on Business Unit goals(2) | 71 | % | |||||||||||||||||||||||||||
(1)Consistent with goal setting parameters, revenue was adjusted to exclude the impact of corporate transactions and fluctuations in foreign currency. Segment margin was adjusted to exclude the impact of corporate transactions. ROI was adjusted to exclude the impact of corporate transactions and the impact of pension income and asset fluctuations. | |||||||||||||||||||||||||||||
(2)Business Unit goals are based on the business unit’s performance on three-year revenue and segment margin performance. |
70 | Notice and Proxy Statement | 2022 |
Company Name | 3-Year TSR(1) | 3-Year Relative Percentile Ranking | ||||||
Johnson Controls International plc | 157.2 | % | 100 | % | ||||
Eaton Corporation plc | 155.0 | % | 92 | % | ||||
Deere & Company | 130.1 | % | 85 | % | ||||
Illinois Tool Works, Inc. | 93.8 | % | 77 | % | ||||
Caterpillar, Inc. | 66.5 | % | 69 | % | ||||
Emerson Electric Co. | 56.6 | % | 62 | % | ||||
General Electric Company | 36.3 | % | 54 | % | ||||
Raytheon Technologies Corp. | 34.0 | % | 46 | % | ||||
Lockheed Martin Corporation | 30.5 | % | 38 | % | ||||
General Dynamics Corporation | 29.4 | % | 31 | % | ||||
3M Company | (0.6) | % | 23 | % | ||||
Phillips 66 | (12.0) | % | 15 | % | ||||
Schlumberger Limited | (22.2) | % | 8 | % | ||||
The Boeing Company | (43.4) | % | 0 | % | ||||
2019 Compensation Peer Group Median | 35.1 | % | ||||||
Honeywell International Inc. | 55.9 | % | 61 | % |
Notice and Proxy Statement | 2022 | 71 |
Total Honeywell | Threshold | Target | Maximum | Actual Plan Performance(1) | Payout Factor | Weight (adjusted) | Weighted Payout % | ||||||||||||||||||||||
3-Year Cumulative Revenue ($M) | $108,543 | $112,480 | $116,417 | $103,775 | 0 | % | 16.67 | % | 0 | % | |||||||||||||||||||
3-Year Average Segment Margin Rate | 20.7% | 21.2% | >= 21.7% | 20.8 | % | 60 | % | 16.67 | % | 10 | % | ||||||||||||||||||
3-Year Average ROI | 23.4% | 24.2% | >= 24.9% | 22.1 | % | 0 | % | 16.67 | % | 0 | % | ||||||||||||||||||
3-Year Relative TSR | 35th Percentile | 50th Percentile | >= 75th Percentile | 61st Percentile | 154 | % | 50 | % | 77 | % | |||||||||||||||||||
Total PSU Calculated Percentage–Corporate NEOs (Messrs. Adamczyk and Lewis, and Ms. Madden)–Based 100% on performance against Total Honeywell goals | 87 | % | |||||||||||||||||||||||||||
Total PSU Calculated Percentage–HCE Business Unit (Ms. Dallara)–Financial metrics portion based 67% on Total Honeywell and 33% on Business Unit goals | 99 | % | |||||||||||||||||||||||||||
(1)Consistent with goal setting parameters, revenue was adjusted to exclude the impact of corporate transactions and fluctuations in foreign currency. Segment margin was adjusted to exclude the impact of corporate transactions. ROI was adjusted to exclude the impact of corporate transactions and the impact of pension income and asset fluctuations. |
NEO | 2019-2021 PSUs at Target (1) | Total Payout % | Total 2019-2021 PSUs Earned | ||||||||
Mr. Adamczyk | 43,640 | 87 | % | 37,967 | |||||||
Mr. Lewis | 11,595 | 87 | % | 10,088 | |||||||
Ms. Madden | 11,595 | 87 | % | 10,088 | |||||||
Ms. Dallara | 8,855 | 99 | % | 8,766 |
Eligible Participants | •Non-Officers (Executives) | ||||
Form of Award | •PCUs denominated at $100 per unit and settled in cash | ||||
Mix of Goals | •Equally weighted between Total Honeywell and Business Unit goals (50% Total Honeywell and 50% Aerospace) | ||||
Measurement and Goal Weighting | •Measurement for three, single years, 2019, 2020 and 2021*, with the total payout factor equal to the average of the three years. Cash payout is delayed to the end of the 3 years. For each year, 100% weight on financial metrics with 33.3% weight on each of three Corporate goals: –1-Year Cumulative Revenue (for each of 2019, 2020, and 2021) –1-Year Average Segment Margin Rate (for each of 2019, 2020, and 2021) –1-Year Average ROI (for each of 2019, 2020, and 2021) | ||||
Payout Cap | •120% of target | ||||
Stock Performance Goal | •Not applicable |
72 | Notice and Proxy Statement | 2022 |
AERO Performance Goals (1) | 2019 Performance | 2020 Performance (Pandemic Impacted) | 2021 Performance | 3-Year Average Performance(2) | Weight | Weighted Payout % | ||||||||||||||||||||
Revenue | 163 | % | 0 | % | 82% | 81.7 | % | 33.33 | % | 27 | % | |||||||||||||||
Segment Margin Rate | 180 | % | 100 | % | 160% | 146.7 | % | 33.33 | % | 49 | % | |||||||||||||||
ROI | 163 | % | 0 | % | 50% | 71.0 | % | 33.33 | % | 24 | % | |||||||||||||||
Total Earned Cash Unit Payout Percentage – AERO executives (non-officer), includes Mr. Madsen as non-officer in 2019 | 100 | % |
NEO | 2019-2021 Performance Cash Units at Target | Value Per Unit | Total Earned Award % | Total 2019-2021 Performance Cash Award Earned | ||||||||||
Mr. Madsen | 5,110 | $100 | 100 | % | $511,000 |
company using a Black-Scholes valuation method.
NEO | # of Stock Options Awarded (1) | Grant Date Value (2) | ||||||
Mr. Adamczyk |
| 228,800 |
| $ | 4,898,608 |
| ||
Mr. Lewis |
| 70,200 |
| $ | 1,502,982 |
| ||
Ms. Madden |
| 70,200 |
| $ | 1,502,982 |
| ||
Mr. Gautam |
| 68,600 |
| $ | 1,468,726 |
| ||
Mr. Waldron |
| 57,200 |
| $ | 1,224,652 |
|
NEO | # of Stock Options (1) | Grant Date Value (2) | |||||||||
Mr. Adamczyk | 163,500 | $ | 5,248,350 | ||||||||
Mr. Lewis | 51,200 | $ | 1,643,520 | ||||||||
Ms. Madden | 51,200 | $ | 1,643,520 | ||||||||
Ms. Dallara | 42,500 | $ | 1,364,250 | ||||||||
Mr. Madsen | 34,100 | $ | 1,094,610 |
|
|
|
|
IRESTRICTED STOCK UNITS
RSUs granted to Mr. Adamczyk, and all the otherOther NEOs, vest 33%, 33%, 34% on the second, fourth, and sixth anniversaries of the grant date, respectively. This extended vesting period is designed to strengthen retention.
NEO | Target # of RSUs (1)(2) | Grant Date Value (3) | ||||||
Mr. Adamczyk |
| 11,600 |
| $ | 2,098,672 |
| ||
Mr. Lewis |
| 3,500 |
| $ | 633,220 |
| ||
Ms. Madden |
| 3,500 |
| $ | 633,220 |
| ||
Mr. Gautam |
| 3,400 |
| $ | 615,128 |
| ||
Mr. Waldron |
| 2,900 |
| $ | 524,668 |
|
|
|
|
NEO | # of RSUs (1)(2) | Grant Date Value (3) | |||||||||
Mr. Adamczyk | 11,000 | $ | 2,229,920 | ||||||||
Mr. Lewis | 3,400 | $ | 689,248 | ||||||||
Ms. Madden | 3,400 | $ | 689,248 | ||||||||
Ms. Dallara | 2,800 | $ | 567,616 | ||||||||
Mr. Madsen | 2,300 | $ | 466,256 |
I
I84.
Executive officers
I87.
program.
| 2022 |
|
COMPENSATION PRACTICES AND POLICIES
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
| ||||||||
|
|
•Supports the achievement of competitive sales, earnings, and cash performance in variable economic and industry conditions without undue risk; and
•Mitigates the potential to reward risk-taking that may produce short-term results that appear in isolation to be favorable, but that may undermine the successful execution of the Company’s long-term business strategy and adversely impact shareowner value.
Robust processes for developing strategic and annual operating plans, approval of capital investments, internal controls over financial reporting, and other financial, operational, and compliance policies and practices.
Diversity of the Company’s overall portfolio of businesses with respect to industries and markets served (types, long-cycle / short-cycle), products and services sold, and geographic footprint.
MDCC review and approval of corporate, business, and individual executive officer objectives to ensure that these goals are aligned with the Company’s annual operating and strategic plans, achieve the proper risk/reward balance, and do not encourage unnecessary or excessive risk-taking.
Robust processesfor developing strategic and annual operating plans, approval of capital investments, internal controls over financial reporting, and other financial, operational, and compliance policies and practices. | ||
Diversity of the Company’s overall portfolioof businesses with respect to industries and markets served (types, long-cycle/short-cycle), products and services sold, and geographic footprint. | ||
MDCC review and approvalof corporate, business, and individual executive officer objectives to ensure that these goals are aligned with the Company’s annual operating and strategic plans, achieve the proper risk/reward balance, and do not encourage unnecessary or excessive risk-taking. |
•Pay mix between fixed and variable, annual and long-term, and cash and equity compensation is designed to encourage strategies and actions that are in the Company’s long-term best interests;
•Base salaries are positioned to be consistent with executives’ responsibilities, so they are not motivated to take excessive risks to achieve financial security;
•Incentive awards are determined based on a review of a variety of performance indicators, diversifying the risk associated with any single performance indicator;
•Design of long-term compensation program rewards executives for driving sustainable, profitable growth for shareowners;
•Vesting periods for equity compensation awards encourage executives to focus on sustained stock price appreciation; and
•Incentive plans are not overly leveraged, have maximum payout caps, and have design features that are intended to balance pay for performance with an appropriate level of risk-taking.
Adoption of clawback policies, which provide for the recoupment of incentive compensation paid to senior executives if there is a significant restatement of Company financial results. Clawback provisions in the Company’s current stock plan also allow the Company to cancel sharesexclude unusual or recover gains realized by an executive if non-competition or non-solicitation provisions are violated.
Prohibition on hedging and pledging of shares by executive officers and directors.
Ownership thresholds in the Company’s stock ownership guidelines for officers that require NEOs to hold shares of common stock equal to four times their current annual base salary (six times for the CEO), as detailed in the Stock Ownership Guidelines.
Officers must also hold 100% of the net shares from vesting of RSUs, the net shares issued from PSUs,infrequently occurring items, extraordinary items, and the net gain shares from option exercises for at least one year.
Clawback policieswhich provide the ability to recoup performance-based incentive awards (both equity and cash-based awards) in the event of misconduct and a restatement of Company financial results. In addition, clawback provisions in the Company’s stock plan and short-term incentive plan allow the Company to cancel shares or recover gains, or payments made, if an executive violates non-competition or non-solicitation provisions. | ||
Prohibition on hedging and pledging of sharesby executive officers and directors. | ||
Ownership thresholdsin the Company’s stock ownership guidelines for officers that require NEOs to hold shares of common stock equal to four times their current annual base salary (six times for the CEO), as detailed in the Stock Ownership Guidelines. | ||
Holding periods in the Company's stock ownership guidelinesrequire that officers must hold 100% of the net shares from vesting of RSUs, the net shares issued from PSUs, and the net gain shares from option exercises for at least one year. |
|
|
Named Executive Officers’ Stock Ownership
Notice and Proxy Statement | 2022 | 75 |
Mr. Adamczyk | Other NEOs (Average) | ||||||||||
At37xand 19xbase pay, the value of our Chairman and CEO and our Other NEOs’ shareholdings substantially exceed requirements | High levels of stock ownership reflectlong-term focus and commitmentof the Honeywell executive team |
2022.
•The amount of incentive compensation was calculated based upon the achievement of financial results that were subsequently reduced due to a Restatement;
•The senior executive engaged in misconduct; and
•The amount of incentive compensation that would have been awarded to the senior executive had the financial results been properly reported would have been lower than the amount actually awarded.
•Cancel all unexercised options; and
•Recover any gains attributable to options that were exercised, and any value attributable to RSUs and Performance Plan awards that were paid, during the period beginning 12 months before and ending two years after the executive officer’s termination of employment.
|
|
|
Honeywell has entered into non-competition agreements with each of the NEOs that preclude them from going to work for a competitor for up to two years after termination of employment. The list of competitors and the duration of the non-competition covenant has been tailored, in each case, to the executive officer’s position and the competitive threat this represents. Because money damages cannot adequately compensate Honeywell for violations of these non-competition covenants, we have a full range of equitable remedies at our disposal to enforce these agreements, including the ability to seek injunctive relief.
76 | Notice and Proxy Statement | 2022 |
2021.
member
)Clive Hollick
Notice and Proxy Statement | 2022 | 77 |
Named Executive Officer | Year | Salary | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | Change In Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | SEC Total Compensation(7) | Non-SEC Total Annual Direct Compensation(8) | |||||||||||||||||||||||||||||||||||||||||||||||
Darius Adamczyk Chairman and Chief Executive Officer | 2021 | $ | 1,675,616 | $ | 14,486,389 | $ | 5,248,350 | $ | 3,910,000 | $ | 608,232 | $ | 171,533 | $26,100,120 | $ | 20,566,195 | ||||||||||||||||||||||||||||||||||||||||
2020 | $ | 1,566,154 | $ | 9,113,476 | $ | 4,898,608 | $ | 2,508,000 | $ | 810,840 | $ | 178,203 | $19,075,281 | $ | 18,086,238 | |||||||||||||||||||||||||||||||||||||||||
2019 | $ | 1,600,000 | $ | 8,612,506 | $ | 4,635,409 | $ | 4,065,000 | $ | 748,107 | $ | 864,082 | $20,525,104 | $ | 18,912,915 | |||||||||||||||||||||||||||||||||||||||||
Gregory P. Lewis Senior Vice President, Chief Financial Officer | 2021 | $ | 830,493 | $ | 4,518,031 | $ | 1,643,520 | $ | 1,107,000 | $ | 215,089 | $ | 65,570 | $8,379,703 | $ | 6,629,344 | ||||||||||||||||||||||||||||||||||||||||
2020 | $ | 753,711 | $ | 2,801,775 | $ | 1,502,982 | $ | 1,460,750 | $ | 254,487 | $ | 57,627 | $6,831,332 | $ | 5,747,468 | |||||||||||||||||||||||||||||||||||||||||
2019 | $ | 749,808 | $ | 2,288,198 | $ | 1,222,904 | $ | 1,866,600 | $ | 185,939 | $ | 331,184 | $6,644,633 | $ | 5,316,910 | |||||||||||||||||||||||||||||||||||||||||
Anne T. Madden Senior Vice President, General Counsel | 2021 | $ | 869,458 | $ | 4,518,031 | $ | 1,643,520 | $ | 1,159,000 | $ | 389,020 | $ | 80,362 | $8,659,391 | $ | 6,720,309 | ||||||||||||||||||||||||||||||||||||||||
2020 | $ | 825,529 | $ | 2,801,775 | $ | 1,502,982 | $ | 758,000 | $ | 459,798 | $ | 87,544 | $6,435,628 | $ | 5,888,286 | |||||||||||||||||||||||||||||||||||||||||
2019 | $ | 757,019 | $ | 2,288,198 | $ | 1,222,904 | $ | 1,970,500 | $ | 399,898 | $ | 69,977 | $6,708,496 | $ | 5,370,121 | |||||||||||||||||||||||||||||||||||||||||
Que Thanh Dallara(1) President and Chief Executive Officer, Honeywell Connected Enterprise | 2021 | $ | 676,466 | $ | 3,860,000 | $ | 1,364,250 | $ | 804,000 | $ | 773 | $ | 52,160 | $6,757,649 | $ | 5,367,608 | ||||||||||||||||||||||||||||||||||||||||
Michael R. Madsen(1) President and Chief Executive Officer, Aerospace | 2021 | $ | 737,052 | $ | 2,937,572 | $ | 1,094,610 | $ | 1,338,000 | $ | 726 | $ | 53,362 | $6,161,322 | $ | 4,697,640 | ||||||||||||||||||||||||||||||||||||||||
NEO | 2021-2023 Performance Stock Units | Restricted Stock Units | 2020-2022 Performance Stock Unit Modification | Total SEC Reportable Stock Awards | ||||||||||||||||||||||
Mr. Adamczyk | $ | 7,502,309 | $ | 2,229,920 | $ | 4,754,160 | $ | 14,486,389 | ||||||||||||||||||
Mr. Lewis | $ | 2,359,083 | $ | 689,248 | $ | 1,469,700 | $ | 4,518,031 | ||||||||||||||||||
Ms. Madden | $ | 2,359,083 | $ | 689,248 | $ | 1,469,700 | $ | 4,518,031 | ||||||||||||||||||
Ms. Dallara | $ | 1,955,276 | $ | 567,616 | $ | 1,337,108 | $ | 3,860,000 | ||||||||||||||||||
Mr. Madsen | $ | 1,572,722 | $ | 466,256 | $ | 898,594 | $ | 2,937,572 |
| 2022 |
Named Executive Officer | Year | Salary(2) | Stock Awards(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation(5) | Change In Pension Value and Nonqualified Deferred Compensation Earnings(6) | All Other Compensation(7) | SEC Total Compensation(8) | Non-SEC Total Annual Direct Compensation(9) | |||||||||||||||||||||||||||||||||||
Darius Adamczyk Chairman and Chief Executive Officer |
| 2020 |
| $ | 1,566,154 |
| $ | 9,113,476 |
| $ | 4,898,608 |
|
| $2,508,000 |
|
| $810,840 |
|
| $178,203 |
|
| $19,075,281 |
|
| $18,086,238 |
| |||||||||||||||||
| 2019 |
| $ | 1,600,000 |
| $ | 8,612,506 |
| $ | 4,635,409 |
|
| $4,065,000 |
|
| $748,107 |
|
| $864,082 |
|
| $20,525,104 |
|
| $18,912,915 |
| ||||||||||||||||||
| 2018 |
| $ | 1,571,154 |
| $ | 9,561,215 |
| $ | 3,185,655 |
|
| $4,100,000 |
|
| $595,082 |
|
| $233,498 |
|
| $19,246,604 |
|
| $18,418,024 |
| ||||||||||||||||||
Gregory P. Lewis Senior Vice President, |
| 2020 |
| $ | 753,711 |
| $ | 2,801,775 |
| $ | 1,502,982 |
|
| $1,460,750 |
|
| $254,487 |
|
| $ 57,627 |
|
| $ 6,831,332 |
|
| $ 5,747,468 |
| |||||||||||||||||
| 2019 |
| $ | 749,808 |
| $ | 2,288,198 |
| $ | 1,222,904 |
|
| $1,866,600 |
|
| $185,939 |
|
| $331,184 |
|
| $ 6,644,633 |
|
| $ 5,316,910 |
| ||||||||||||||||||
| 2018 |
| $ | 578,981 |
| $ | 554,742 |
| $ | 591,250 |
|
| $ 730,000 |
|
| $103,155 |
|
| $ 48,365 |
|
| $ 2,606,493 |
|
| $ 2,979,973 |
| ||||||||||||||||||
Anne T. Madden(1) Senior Vice President, General Counsel |
| 2020 |
| $ | 825,529 |
| $ | 2,801,775 |
| $ | 1,502,982 |
|
| $ 758,000 |
|
| $459,798 |
|
| $ 87,544 |
|
| $ 6,435,628 |
|
| $ 5,888,286 |
| |||||||||||||||||
| 2019 |
| $ | 757,019 |
| $ | 2,288,198 |
| $ | 1,222,904 |
|
| $1,970,500 |
|
| $399,898 |
|
| $ 69,977 |
|
| $ 6,708,496 |
|
| $ 5,370,121 |
| ||||||||||||||||||
Rajeev Gautam(1) President and Chief Executive Officer Performance Materials and Technologies |
| 2020 |
| $ | 768,394 |
| $ | 2,727,112 |
| $ | 1,468,726 |
|
| $ 503,000 |
|
| $403,986 |
|
| $ 56,523 |
|
| $ 5,927,741 |
|
| $ 5,467,232 |
| |||||||||||||||||
| 2019 |
| $ | 779,231 |
| $ | 2,621,868 |
| $ | 1,412,368 |
|
| $ 976,000 |
|
| $685,839 |
|
| $ 55,857 |
|
| $ 6,531,163 |
|
| $ 5,789,467 |
| ||||||||||||||||||
| 2018 |
| $ | 755,247 |
| $ | 2,940,717 |
| $ | 979,110 |
|
| $ 900,000 |
|
| $ 6,799 |
|
| $ 51,790 |
|
| $ 5,633,663 |
|
| $ 5,575,074 |
| ||||||||||||||||||
John F. Waldron(1) President and Chief Executive Officer Safety and Productivity Solutions |
| 2020 |
| $ | 704,769 |
| $ | 2,278,369 |
| $ | 1,224,652 |
|
| $ 908,000 |
|
| $190,879 |
|
| $ 54,508 |
|
| $ 5,361,177 |
|
| $ 5,115,790 |
| |||||||||||||||||
|
|
|
NEO | 2020-2022 Performance Stock Units | Restricted Stock Units | Total Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk |
| $7,014,804 |
|
| $2,098,672 |
|
| $9,113,476 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis |
| $2,168,555 |
|
| $ 633,220 |
|
| $2,801,775 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden |
| $2,168,555 |
|
| $ 633,220 |
|
| $2,801,775 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Gautam |
| $2,111,984 |
|
| $ 615,128 |
|
| $2,727,112 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Waldron |
| $1,753,701 |
|
| $ 524,668 |
|
| $2,278,369 |
|
The 2020-2022 PSU2021 Non-Equity Incentive Plan Compensation value for each NEO, except Mr. Madsen, represents their annual ICP award values reflect the original grant date values. The subsequent pandemic-related adjustment to the plan financial metrics for the 2020-2022 PSUs,2021 plan year. 80% of the ICP award is determined using the pre-set formulaic methodology discussed beginning on page 60, and the remaining 20% is based on individual assessments determined by the MDCC discussed beginning on page 62. The amount for Mr. Madsen includes the sum of both his 2021 annual ICP award and his earned payout from Performance Plan cash units issued for the January 1, 2019 – December 31, 2021 cycle, that is required to be reported in the final year of the performance period under SEC rules, even though granted in 2019 and covering a three-year period. The following table provides the breakdown of the amounts reported as 2021 Non-Equity Incentive Plan Compensation for Mr. Madsen:
NEO | 2021 ICP Award | 2019-2021 Performance Plan Cash Award | Total Non-Equity Incentive Plan Compensation | ||||||||
Mr. Madsen | $827,000 | $511,000 | $1,338,000 |
NEO | Change in Pension Value(a) | NQDC Interest(b) | Total Change in Pension Value and Nonqualified Deferred Compensation Earnings | |||||||||||||||||
Mr. Adamczyk | $ | 605,743 | $ | 2,489 | $ | 608,232 | ||||||||||||||
Mr. Lewis | $ | 214,342 | $ | 747 | $ | 215,089 | ||||||||||||||
Ms. Madden | $ | 331,513 | $ | 57,507 | $ | 389,020 | ||||||||||||||
Ms. Dallara | $ | — | $ | 773 | $ | 773 | ||||||||||||||
Mr. Madsen | $ | — | $ | 726 | $ | 726 |
NEO | Matching Contributions(a) | Personal Use of Company Aircraft(b) | Security(c) | Excess Liability Insurance(d) | Executive Physical/ Medical Services (e) | Total Other Compensation | |||||||||||||||||||||||||||||||||||
Mr. Adamczyk | $ | 117,196 | $ | 43,040 | $ | 1,332 | $ | 1,515 | $ | 8,450 | $ | 171,533 | |||||||||||||||||||||||||||||
Mr. Lewis | $ | 58,057 | $ | 498 | $ | — | $ | 1,515 | $ | 5,500 | $ | 65,570 | |||||||||||||||||||||||||||||
Ms. Madden | $ | 60,833 | $ | 12,514 | $ | — | $ | 1,515 | $ | 5,500 | $ | 80,362 | |||||||||||||||||||||||||||||
Ms. Dallara | $ | 47,319 | $ | — | $ | — | $ | 1,515 | $ | 3,326 | $ | 52,160 | |||||||||||||||||||||||||||||
Mr. Madsen | $ | 51,546 | $ | — | $ | — | $ | 1,515 | $ | 301 | $ | 53,362 |
|
|
|
|
|
NEO | 2020 ICP Award | 2018-2020 Performance Plan Cash Award | Total Non-Equity Incentive Plan Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis |
| $689,000 |
|
| $771,750 |
|
| $1,460,750 |
|
|
NEO | Change in Pension Value(a) | NQDC Interest(c) | Total Change in Pension Value and Nonqualified Deferred | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Adamczyk | $ | 805,492 |
| $ | 5,348 |
| $ | 810,840 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Lewis | $ | 253,033 | $ | 1,454 | $ | 254,487 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ms. Madden | $ | 421,241 | $ | 38,557 | $ | 459,798 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Gautam | $ | 397,106 | (b) | $ | 6,880 |
| $ | 403,986 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Waldron | $ | 189,939 |
| $ | 940 |
| $ | 190,879 |
|
|
|
|
|
NEO | Matching Contributions(a) | Personal Use of Company Aircraft(b) | Security(c) | Excess Liability Insurance(d) | Executive Physical/ Medical Services (e) | Total Other Compensation | ||||||||||||||||||
Mr. Adamczyk | $ | 109,631 | $ | 35,489 | $ | 22,418 | $ | 1,515 | $ | 9,150 | $ | 178,203 | ||||||||||||
Mr. Lewis | $ | 52,760 | — | — | $ | 1,515 | $ | 3,352 | $ | 57,627 | ||||||||||||||
Ms. Madden | $ | 57,787 | $ | 22,739 | — | $ | 1,515 | $ | 5,503 | $ | 87,544 | |||||||||||||
Mr. Gautam | $ | 53,788 | — | — | $ | 1,515 | $ | 1,220 | $ | 56,523 | ||||||||||||||
Mr. Waldron | $ | 49,334 | — | — | $ | 1,515 | $ | 3,659 | $ | 54,508 |
|
|
|
|
|
|
|
| 79 |
Named Executive Officer | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities of Option Underlying Options(4) | Exercise or Base Price Awards ($/Sh) | Closing Price on Date of Grant of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(5) | |||||||||||||||||||||||||||||||||||||||||||||||
Award Type(1) | Grant Date | Threshold(2) | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||||||||||
Darius Adamczyk | ICP | $ | 28,000 |
| $ | 2,800,000 |
| $ | 5,600,000 |
| ||||||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/14/2020 |
|
| 228,800 |
|
| $180.92 |
|
| $180.81 |
| $ | 4,898,608 |
| |||||||||||||||||||||||||||||||||||||||
PSU |
| 2/14/2020 |
|
| 4,650 |
|
| 37,200 |
|
| 59,520 |
| $ | 7,014,804 |
| |||||||||||||||||||||||||||||||||||||||
RSU |
| 2/14/2020 |
|
| 11,600 |
| $ | 2,098,672 |
| |||||||||||||||||||||||||||||||||||||||||||||
Gregory P. Lewis | ICP | $ | 7,700 |
| $ | 770,000 |
| $ | 1,540,000 |
| ||||||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/14/2020 |
|
| 70,200 |
|
| $180.92 |
|
| $180.81 |
| $ | 1,502,982 |
| |||||||||||||||||||||||||||||||||||||||
PSU |
| 2/14/2020 |
|
| 1,438 |
|
| 11,500 |
|
| 18,400 |
| $ | 2,168,555 |
| |||||||||||||||||||||||||||||||||||||||
RSU |
| 2/14/2020 |
|
| 3,500 |
| $ | 633,220 |
| |||||||||||||||||||||||||||||||||||||||||||||
Anne T. Madden | ICP | $ | 8,470 |
| $ | 847,000 |
| $ | 1,694,000 |
| ||||||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/14/2020 |
|
| 70,200 |
|
| $180.92 |
|
| $180.81 |
| $ | 1,502,982 |
| |||||||||||||||||||||||||||||||||||||||
PSU |
| 2/14/2020 |
|
| 1,438 |
|
| 11,500 |
|
| 18,400 |
| $ | 2,168,555 |
| |||||||||||||||||||||||||||||||||||||||
RSU |
| 2/14/2020 |
|
| 3,500 |
| $ | 633,220 |
| |||||||||||||||||||||||||||||||||||||||||||||
Rajeev Gautam | ICP | $ | 7,850 |
| $ | 785,000 |
| $ | 1,570,000 |
| ||||||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/14/2020 |
|
| 68,600 |
|
| $180.92 |
|
| $180.81 |
| $ | 1,468,726 |
| |||||||||||||||||||||||||||||||||||||||
PSU |
| 2/14/2020 |
|
| 700 |
|
| 11,200 |
|
| 17,920 |
| $ | 2,111,984 |
| |||||||||||||||||||||||||||||||||||||||
RSU |
| 2/14/2020 |
|
| 3,400 |
| $ | 615,128 |
| |||||||||||||||||||||||||||||||||||||||||||||
John F. Waldron | ICP | $ | 7,200 |
| $ | 720,000 |
| $ | 1,440,000 |
| ||||||||||||||||||||||||||||||||||||||||||||
NQSO |
| 2/14/2020 |
|
| 57,200 |
|
| $180.92 |
|
| $180.81 |
| $ | 1,224,652 |
| |||||||||||||||||||||||||||||||||||||||
PSU |
| 2/14/2020 |
|
| 581 |
|
| 9,300 |
|
| 14,880 |
| $ | 1,753,701 |
| |||||||||||||||||||||||||||||||||||||||
RSU |
| 2/14/2020 |
|
| 2,900 |
| $ | 524,668 |
|
|
|
|
|
|
2021
(1)Award Type: ICP = Incentive Compensation Plan (for 2021 performance year, paid in 2022) NQSO = Nonqualified Stock Option PSU21-23 = 2021-2023 Performance Stock Unit (regular annual award) RSU = Restricted Stock Unit PSU20-22 = 2020-2022 Performance Stock Unit (modification) (2)Represents the minimum level |
|
|
|
|
Description of Plan-Basedperformance that must be achieved for any amount to be payable.
vest 100% in February 2024. 50% of the total number of PSUs earned will be converted to, and paid in, cash. 50% of the earned PSUs will be paid in shares subject to a minimum one-year holding period.
|
|
|
I OUTSTANDING EQUITY AWARDS AT 2020 FISCAL YEAR-END
Option Awards(1)
| Stock Awards
| |||||||||||||||||||||||||||||||
Name | Grant Year | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | |||||||||||||||||||||||||
Darius Adamczyk |
| 2020 |
|
| — |
|
| 228,800 |
| $ | 180.92 |
|
| 2/13/2030 |
|
| 11,844 | (3) | $ | 2,519,219 |
| |||||||||||
| 2020 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 37,983 | (4) | $ | 8,078,984 |
| ||||||||||||
| 2019 |
|
| 53,825 |
|
| 161,475 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 13,262 | (5) | $ | 2,820,827 |
| ||||||||||||
| 2019 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 42,895 | (6) | $ | 9,123,767 |
| ||||||||||||
| 2018 |
|
| 70,342 |
|
| 70,343 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 15,175 | (7) | $ | 3,227,723 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 68,938 | (8) | $ | 14,663,113 |
| ||||||||||||
| 2017 |
|
| 169,198 |
|
| 56,400 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| — |
|
| — |
| ||||||||||||
| 2016 |
|
| 105,040 |
|
| — |
| $ | 107.42 |
|
| 4/3/2026 |
|
| — |
|
| — |
| ||||||||||||
| 2016 |
|
| 157,561 |
|
| — |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 38,598 | (9) | $ | 8,209,795 |
| ||||||||||||
| 2015 |
|
| 157,561 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
|
| — |
| ||||||||||||
| 2014 |
|
| 147,058 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| 10,613 | (10) | $ | 2,257,385 |
| ||||||||||||
| 2013 |
|
| 42,015 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
|
| — |
| ||||||||||||
| Total |
|
| 902,600 |
|
| 517,018 |
|
| 239,308 |
| $ | 50,900,812 |
| ||||||||||||||||||
Gregory P. Lewis |
| 2020 |
|
| — |
|
| 70,200 |
| $ | 180.92 |
|
| 2/13/2030 |
|
| 3,574 | (3) | $ | 760,190 |
| |||||||||||
| 2020 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 11,742 | (4) | $ | 2,497,523 |
| ||||||||||||
| 2019 |
|
| 14,200 |
|
| 42,600 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 3,523 | (5) | $ | 749,342 |
| ||||||||||||
| 2019 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 11,397 | (6) | $ | 2,424,142 |
| ||||||||||||
| 2018 |
|
| 13,054 |
|
| 13,056 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 3,945 | (11) | $ | 839,102 |
| ||||||||||||
| 2017 |
|
| 19,582 |
|
| 6,528 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| — |
|
| — |
| ||||||||||||
| 2016 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 3,819 | (12) | $ | 812,301 |
| ||||||||||||
| 2016 |
|
| 25,209 |
|
| — |
| $ | 98.70 |
|
| 2/24/2026 |
|
| — |
|
| — |
| ||||||||||||
| 2015 |
|
| 23,107 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| 2,002 | (13) | $ | 425,825 |
| ||||||||||||
| 2014 |
|
| 21,007 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| — |
|
| — |
| ||||||||||||
| 2013 |
|
| 6,301 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
|
| — |
| ||||||||||||
| 2012 |
|
| 6,301 |
|
| — |
| $ | 57.00 |
|
| 2/28/2022 |
|
| — |
|
| — |
| ||||||||||||
| Total |
|
| 128,761 |
|
| 132,384 |
|
| 40,002 |
| $ | 8,508,425 |
| ||||||||||||||||||
Anne T. Madden |
| 2020 |
|
| — |
|
| 70,200 |
| $ | 180.92 |
|
| 2/13/2030 |
|
| 3,574 | (3) | $ | 760,190 |
| |||||||||||
| 2020 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 11,742 | (4) | $ | 2,497,523 |
| ||||||||||||
| 2019 |
|
| 14,200 |
|
| 42,600 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 3,523 | (5) | $ | 749,342 |
| ||||||||||||
| 2019 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 11,397 | (6) | $ | 2,424,142 |
| ||||||||||||
| 2018 |
|
| 15,979 |
|
| 15,980 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 3,406 | (7) | $ | 724,456 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 15,734 | (8) | $ | 3,346,622 |
| ||||||||||||
| 2017 |
|
| 21,149 |
|
| 7,050 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| — |
|
| — |
| ||||||||||||
| 2016 |
|
| 28,885 |
|
| — |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 6,175 | (9) | $ | 1,313,423 |
| ||||||||||||
| 2015 |
|
| 26,259 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
|
| — |
| ||||||||||||
| 2014 |
|
| 21,007 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| — |
|
| — |
| ||||||||||||
| 2013 |
|
| 21,007 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
|
| — |
| ||||||||||||
| Total |
|
| 148,486 |
|
| 135,830 |
|
| 55,551 |
| $ | 11,815,698 |
|
| 2022 |
Option Awards (1) | Stock Awards | ||||||||||||||||||||||||||||||||||||||||
Name | Grant Year | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | Number of Unearned Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | ||||||||||||||||||||||||||||||||
Darius Adamczyk | 2021 | — | 163,500 | $202.72 | 2/11/2031 | 11,191 | (3) | $2,333,435 | 35,758 | (4) | $7,455,901 | ||||||||||||||||||||||||||||||
2020 | 57,200 | 171,600 | $180.92 | 2/13/2030 | 12,050 | (5) | $2,512,546 | 38,643 | (6) | $8,057,452 | |||||||||||||||||||||||||||||||
2019 | 107,650 | 107,650 | $154.22 | 2/25/2029 | 9,040 | (7) | $1,884,930 | — | — | ||||||||||||||||||||||||||||||||
2019 | — | — | — | — | 37,967 | (8) | $7,916,499 | — | — | ||||||||||||||||||||||||||||||||
2018 | 105,513 | 35,172 | $148.79 | 2/26/2028 | 15,439 | (9) | $3,219,186 | — | — | ||||||||||||||||||||||||||||||||
2017 | 225,598 | — | $119.69 | 2/27/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
2016 | 105,040 | — | $107.42 | 4/3/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
2016 | 157,561 | — | $98.70 | 2/24/2026 | 19,923 | (10) | $4,154,145 | — | — | ||||||||||||||||||||||||||||||||
2015 | 157,561 | — | $98.93 | 2/25/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
2014 | 147,058 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
Total | 1,063,181 | 477,922 | 105,610 | $22,020,741 | 74,401 | $15,513,353 | |||||||||||||||||||||||||||||||||||
Gregory P. Lewis | 2021 | — | 51,200 | $202.72 | 2/11/2031 | 3,459 | (3) | $721,236 | 11,244 | (4) | $2,344,486 | ||||||||||||||||||||||||||||||
2020 | 17,550 | 52,650 | $180.92 | 2/13/2030 | 3,636 | (5) | $758,142 | 11,946 | (6) | $2,490,860 | |||||||||||||||||||||||||||||||
2019 | 28,400 | 28,400 | $154.22 | 2/25/2029 | 2,401 | (7) | $500,633 | — | — | ||||||||||||||||||||||||||||||||
2019 | — | — | — | — | 10,088 | (8) | $2,103,449 | — | — | ||||||||||||||||||||||||||||||||
2018 | 19,582 | 6,528 | $148.79 | 2/26/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
2017 | 26,110 | — | $119.69 | 2/27/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
2016 | — | — | — | — | 1,972 | (11) | $411,182 | — | — | ||||||||||||||||||||||||||||||||
2016 | 25,209 | — | $98.70 | 2/24/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
2015 | 23,107 | — | $98.93 | 2/25/2025 | 2,036 | (12) | $424,526 | — | — | ||||||||||||||||||||||||||||||||
2014 | 21,007 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
Total | 160,965 | 138,778 | 23,592 | $4,919,168 | 23,190 | $4,835,346 | |||||||||||||||||||||||||||||||||||
Anne T. Madden | 2021 | — | 51,200 | $202.72 | 2/11/2031 | 3,459 | (3) | $721,236 | 11,244 | (4) | $2,344,486 | ||||||||||||||||||||||||||||||
2020 | 17,550 | 52,650 | $180.92 | 2/13/2030 | 3,636 | (5) | $758,142 | 11,946 | (6) | $2,490,860 | |||||||||||||||||||||||||||||||
2019 | 28,400 | 28,400 | $154.22 | 2/25/2029 | 2,401 | (7) | $500,633 | — | — | ||||||||||||||||||||||||||||||||
2019 | — | — | — | — | 10,088 | (8) | $2,103,449 | — | — | ||||||||||||||||||||||||||||||||
2018 | 23,969 | 7,990 | $148.79 | 2/26/2028 | 3,465 | (9) | $722,487 | — | — | ||||||||||||||||||||||||||||||||
2017 | 28,199 | — | $119.69 | 2/27/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
2016 | 28,885 | — | $98.70 | 2/24/2026 | 3,190 | (13) | $665,147 | — | — | ||||||||||||||||||||||||||||||||
2015 | 26,259 | — | $98.93 | 2/25/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
2014 | 21,007 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
Total | 174,269 | 140,240 | 26,239 | $5,471,094 | 23,190 | $4,835,346 | |||||||||||||||||||||||||||||||||||
Que Thanh Dallara (20) | 2021 | — | 42,500 | $202.72 | 2/11/2031 | 2,849 | (3) | $594,045 | 9,319 | (4) | $1,943,105 | ||||||||||||||||||||||||||||||
2020 | 14,300 | 42,900 | $180.92 | 2/13/2030 | 3,013 | (5) | $628,241 | 9,661 | (6) | $2,014,415 | |||||||||||||||||||||||||||||||
2019 | 21,800 | 21,800 | $154.22 | 2/25/2029 | 1,836 | (7) | $382,824 | — | — | ||||||||||||||||||||||||||||||||
2019 | — | — | — | — | 8,766 | (8) | $1,827,799 | — | — | ||||||||||||||||||||||||||||||||
2018 | 16,527 | 5,510 | $148.79 | 2/26/2028 | 2,412 | (9) | $502,926 | — | — | ||||||||||||||||||||||||||||||||
2018 | — | — | — | — | 2,664 | (14) | $555,471 | — | — | ||||||||||||||||||||||||||||||||
2017 | 13,577 | — | $119.69 | 2/27/2027 | 924 | (15) | $192,663 | — | — | ||||||||||||||||||||||||||||||||
Total | 66,204 | 112,710 | 22,464 | $4,683,969 | 18,980 | $3,957,520 | |||||||||||||||||||||||||||||||||||
Mike Madsen | 2021 | — | 34,100 | $202.72 | 2/11/2031 | 2,340 | (3) | $487,913 | 7,496 | (4) | $1,562,991 | ||||||||||||||||||||||||||||||
2020 | 11,425 | 34,275 | $180.92 | 2/13/2030 | 2,389 | (5) | $498,130 | 7,791 | (6) | $1,624,501 | |||||||||||||||||||||||||||||||
2019 | 11,866 | 11,869 | $154.22 | 2/25/2029 | 3,493 | (16) | $728,325 | — | — | ||||||||||||||||||||||||||||||||
2019 | — | — | — | — | 6,066 | (17) | $1,264,822 | — | — | ||||||||||||||||||||||||||||||||
2018 | 18,015 | 6,006 | $148.79 | 2/26/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
2017 | 24,021 | — | $119.69 | 2/27/2027 | 1,941 | (18) | $404,718 | — | — | ||||||||||||||||||||||||||||||||
2016 | 23,107 | — | $98.70 | 2/24/2026 | 1,994 | (19) | $415,769 | — | — | ||||||||||||||||||||||||||||||||
2015 | 13,696 | — | $98.93 | 2/25/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
2014 | 16,007 | — | $89.48 | 2/26/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
Total | 118,137 | 86,250 | 18,223 | $3,799,677 | 15,287 | $3,187,492 |
|
Option Awards(1)
| Stock Awards
| |||||||||||||||||||||||||||||||
Name | Grant Year | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested(2) | |||||||||||||||||||||||||
Rajeev Gautam |
| 2020 |
|
| — |
|
| 68,600 |
| $ | 180.92 |
|
| 2/13/2030 |
|
| 3,472 | (3) | $ | 738,494 |
| |||||||||||
| 2020 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 11,436 | (4) | $ | 2,432,437 |
| ||||||||||||
| 2019 |
|
| 16,400 |
|
| 49,200 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 4,041 | (5) | $ | 859,521 |
| ||||||||||||
| 2019 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 13,055 | (6) | $ | 2,776,799 |
| ||||||||||||
| 2018 |
|
| 21,619 |
|
| 21,620 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 4,665 | (7) | $ | 992,246 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 13,921 | (8) | $ | 2,960,997 |
| ||||||||||||
| 2017 |
|
| 54,832 |
|
| 18,278 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| — |
|
| — |
| ||||||||||||
| 2016 |
|
| 52,520 |
|
| — |
| $ | 108.87 |
|
| 5/1/2026 |
|
| — |
|
| — |
| ||||||||||||
| 2016 |
|
| 23,107 |
|
| — |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 11,523 | (14) | $ | 2,450,942 |
| ||||||||||||
| 2015 |
|
| 21,007 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| — |
|
| — |
| ||||||||||||
| 2014 |
|
| 17,856 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| — |
|
| — |
| ||||||||||||
| 2013 |
|
| 8,927 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
|
| — |
| ||||||||||||
| 2012 |
|
| 4,200 |
|
| — |
| $ | 57.00 |
|
| 2/28/2022 |
|
| — |
|
| — |
| ||||||||||||
| Total |
|
| 220,468 |
|
| 157,698 |
|
| 62,113 |
| $ | 13,211,435 |
| ||||||||||||||||||
John F. Waldron |
| 2020 |
|
| — |
|
| 57,200 |
| $ | 180.92 |
|
| 2/13/2030 |
|
| 2,961 | (3) | $ | 629,805 |
| |||||||||||
| 2020 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 9,496 | (4) | $ | 2,019,799 |
| ||||||||||||
| 2019 |
|
| 13,000 |
|
| 39,000 |
| $ | 154.22 |
|
| 2/25/2029 |
|
| 3,212 | (5) | $ | 683,192 |
| ||||||||||||
| 2019 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 10,361 | (6) | $ | 2,203,785 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 5,007 | (15) | $ | 1,064,989 |
| ||||||||||||
| 2018 |
|
| 14,883 |
|
| 14,883 |
| $ | 148.79 |
|
| 2/26/2028 |
|
| 3,185 | (7) | $ | 677,450 |
| ||||||||||||
| 2018 |
|
| — |
|
| — |
|
| — |
|
| — |
|
| 14,215 | (8) | $ | 3,023,531 |
| ||||||||||||
| 2017 |
|
| 43,082 |
|
| 14,361 |
| $ | 119.69 |
|
| 2/27/2027 |
|
| — |
|
| — |
| ||||||||||||
| 2016 |
|
| 33,612 |
|
| — |
| $ | 98.70 |
|
| 2/24/2026 |
|
| 7,719 | (9) | $ | 1,641,831 |
| ||||||||||||
| 2015 |
|
| 31,511 |
|
| — |
| $ | 98.93 |
|
| 2/25/2025 |
|
| 3,201 | (10) | $ | 680,853 |
| ||||||||||||
| 2014 |
|
| 21,007 |
|
| — |
| $ | 89.48 |
|
| 2/26/2024 |
|
| 6,182 | (16) | $ | 1,314,911 |
| ||||||||||||
| 2013 |
|
| 3,938 |
|
| — |
| $ | 66.43 |
|
| 2/26/2023 |
|
| — |
|
| — |
| ||||||||||||
| Total |
|
| 161,033 |
|
| 125,444 |
|
| 65,539 |
| $ | 13,940,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82 |
|
I
Option Awards | Stock Awards | |||||||||||||||||||
Named Executive Officer | Number of Shares Acquired on Exercise(1) | Value Realized on Exercise(2) | Number of Shares Acquired on Vesting(3) | Value Realized on Vesting(4) | ||||||||||||||||
Darius Adamczyk |
| 97,162 | (5) | $ | 10,436,851 |
| 93,375 | (6) | $ | 15,539,920 |
| |||||||||
Gregory P. Lewis |
| 3,675 | (7) | $ | 342,987 |
| 9,984 | (8) | $ | 1,450,294 |
| |||||||||
Anne T. Madden |
| 21,007 | (9) | $ | 2,010,782 |
|
| 10,025 | (10) | $ | 1,554,863 |
| ||||||||
Rajeev Gautam |
| — |
|
| — |
|
| 26,478 | (11) | $ | 4,405,971 |
| ||||||||
John F. Waldron |
| — |
|
| — |
|
| 24,256 | (12) | $ | 4,090,097 |
|
Option Awards | Stock Awards | ||||||||||||||||||||||||||||
Named Executive Officer | Number of Shares Acquired on Exercise(1) | Value Realized on Exercise(2) | Number of Shares Acquired on Vesting(3) | Value Realized on Vesting(4) | |||||||||||||||||||||||||
Mr. Adamczyk | 42,015 | (5) | $ | 6,953,609 | 103,174 | (6) | $ | 22,207,274 | |||||||||||||||||||||
Mr. Lewis | 12,602 | (7) | $ | 2,154,768 | 7,011 | (8) | $ | 1,453,829 | |||||||||||||||||||||
Ms. Madden | 21,007 | (9) | $ | 3,293,856 | 19,962 | (10) | $ | 4,234,626 | |||||||||||||||||||||
Ms. Dallara | — | — | 14,433 | (11) | $ | 3,000,203 | |||||||||||||||||||||||
Mr. Madsen | — | — | 10,377 | (12) | $ | 2,294,689 |
| |||||||||||
Notice and | 83 |
|
|
|
|
|
|
|
|
|
|
|
I
Named Executive Officer | Plan Name | Number of Years of Credited Service | Present Value of Accumulated Benefits(1) | |||||||
Darius Adamczyk | REP |
| 8.7 |
| $ | 143,438 |
| |||
SERP |
| 12.5 |
| $ | 3,029,101 |
| ||||
Total | $ | 3,172,539 |
| |||||||
Gregory P. Lewis | REP |
| 14.0 |
| $ | 231,813 |
| |||
SERP |
| 14.0 |
| $ | 727,682 |
| ||||
Total | $ | 959,495 |
| |||||||
Anne T. Madden | REP |
| 24.5 |
| $ | 404,951 |
| |||
SERP |
| 24.5 |
| $ | 1,560,673 |
| ||||
Total | $ | 1,965,624 |
| |||||||
Rajeev Gautam | REP |
| 42.3 |
| $ | 2,040,231 |
| |||
SERP |
| 42.3 |
| $ | 5,989,340 |
| ||||
Total | $ | 8,029,571 |
| |||||||
John F. Waldron | REP |
| 15.8 |
| $ | 260,609 |
| |||
SERP |
| 15.8 |
| $ | 935,835 |
| ||||
Total | $ | 1,196,444 |
|
|
Named Executive Officer | Plan Name | Number of Years of Credited Service | Present Value of Accumulated Benefits(1) | |||||||||||
Darius Adamczyk | REP | 9.7 | $ | 162,846 | ||||||||||
SERP | 13.5 | $ | 3,615,436 | |||||||||||
Total | $ | 3,778,282 | ||||||||||||
Gregory P. Lewis | REP | 15 | $ | 252,828 | ||||||||||
SERP | 15 | $ | 921,009 | |||||||||||
Total | $ | 1,173,837 | ||||||||||||
Anne T. Madden | REP | 25.5 | $ | 429,114 | ||||||||||
SERP | 25.5 | $ | 1,868,023 | |||||||||||
Total | $ | 2,297,137 | ||||||||||||
Que Thanh Dallara | REP | 0 | $ | — | ||||||||||
SERP | 0 | $ | — | |||||||||||
Total | $ | — | ||||||||||||
Michael R. Madsen | REP | 35.6 | $ | 1,890,262 | ||||||||||
SERP | 35.6 | $ | 2,661,942 | |||||||||||
Total | $ | 4,552,204 |
|
|
|
The SERP and REP benefits depend on the length of each Named Executive Officer’s employment with Honeywell (and companies that have been acquired by Honeywell). This information is provided in the table above under the column titled “Number of Years of Credited Service.” The column in the table above titled “Present Value of Accumulated Benefits” represents a financial calculation that estimates the cash value today of the full pension benefit that has been earned by each Named Executive Officer. It is based on various assumptions, including assumptions about how long each Named Executive Officer will live and future interest rates. Additional details about the pension benefits for each Named Executive Officer include:
•The REP is a tax-qualified pension plan in which a significant portion of Honeywell’s U.S. employees participate.
•The REP complies with tax requirements applicable to broad-based pension plans, which impose dollar limits on the amount of benefits that can be provided. As a result, the pensions that can be paid under the REP for higher-paid employees represent a much smaller fraction of current income than the pensions that can be paid to less highly paid employees. We make up for this difference, in part, by providing supplemental pensions through the SERP.
•All SERP benefits will be paid on the first day of the first month that begins following the 105th day after the later of the officer’s separation from service (as that term is defined in Internal Revenue Code Section 409A) or his or her earliest retirement date.
Pension Benefit Calculation Formulas
84 | Notice and Proxy Statement | 2022 |
Name of Formula | Benefit Calculation | |||||
REP | ||||||
| •Lump sum equal to (1) 6% of final average compensation (annual average compensation for the five calendar years out of the previous 10 calendar years that produces highest average) times (2) credited service. | |||||
ALLIED SALARIED | ||||||
| •
| |||||
SIGNAL | •Single life annuity equal to (1)(A) 1.5% of final average compensation (average of compensation for |
a lump sum.
|
|
|
As stated above, the pension formula used to determine the amount of pension benefits under each of the plans for our Named Executive Officers (NEO)NEOs differs for historical reasons. Also, additional contractual pension benefits have been provided to certain Named Executive Officers as deemed necessary and appropriate at the time of their recruitment to the Company or to retain the executive. The table below describes which formulas are applicable to each of our NEOs.
Name/Formula | Description of Total Pension Benefits | ||||
Darius Adamczyk Total pension benefit = REP formula benefits | •Mr. Adamczyk’s pension benefits under the REP and the SERP are determined under the REP formula, with the SERP benefit calculated using all his Honeywell employment as credited service. | ||||
Gregory P. Lewis Total pension benefit = REP formula benefits | |||||
| •Mr. Lewis’ pension benefits under the REP and the SERP are determined under the REP formula. | ||||
Anne T. Madden Total pension benefit = REP formula benefits | |||||
| •Ms. Madden’s pension benefits under the REP and the SERP are determined under the REP formula. | ||||
Michael R. Madsen Total pension benefit = | •Mr. | ||||
|
| ||||
These amounts are part of, not in addition to, his Allied Salaried formula benefits. |
| 85 |
|
INONQUALIFIED DEFERRED COMPENSATION—FISCAL YEAR 2020
Since 2005, 2021
Named Executive Officer | Plan | Executive Contributions in Last FY(3) | Registrant Contributions in Last FY(1) (3) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(3) | ||||||||||||||||
Darius Adamczyk | SS Plan(1) | $ | 105,792 |
| $ | 92,568 |
| $ | 163,667 |
|
| — |
| $ | 1,524,079 |
| ||||||
DIC Plan | $ | 813,000 |
|
| — |
| $ | 31,083 |
|
| — |
| $ | 1,268,939 |
| |||||||
Deferred RSUs(2) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Total | $ | 918,792 |
| $ | 92,568 |
| $ | 194,750 |
|
| — |
| $ | 2,793,018 |
| |||||||
Gregory P. Lewis | SS Plan(1) | $ | 113,858 |
| $ | 32,810 |
| $ | 46,670 |
|
| — |
| $ | 641,580 |
| ||||||
DIC Plan |
| — |
|
| — |
| $ | 3,210 |
|
| — |
| $ | 119,440 |
| |||||||
Deferred RSUs(2) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Total | $ | 113,858 |
| $ | 32,810 |
| $ | 49,880 |
|
| — |
| $ | 761,020 |
| |||||||
Anne T. Madden | SS Plan(1) | $ | 246,057 |
| $ | 37,837 |
| $ | 299,621 |
|
| — |
| $ | 3,501,043 |
| ||||||
DIC Plan | $ | 1,102,000 |
|
| — |
| $ | 150,636 |
|
| — |
| $ | 5,757,602 |
| |||||||
Deferred RSUs(2) |
| — |
|
| — |
| $ | 1,328,624 |
|
| — |
| $ | 7,726,615 |
| |||||||
Total | $ | 1,348,057 |
| $ | 37,837 |
| $ | 1,778,881 |
|
| — |
| $ | 16,985,260 |
| |||||||
Rajeev Gautam | SS Plan(1) | $ | 41,972 |
| $ | 33,838 |
| $ | 153,231 |
|
| — |
| $ | 2,332,295 |
| ||||||
DIC Plan |
| — |
|
| — |
| $ | 16,760 |
|
| — |
| $ | 623,673 |
| |||||||
Deferred RSUs(2) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Total | $ | 41,972 |
| $ | 33,838 |
| $ | 169,991 |
|
| — |
| $ | 2,955,968 |
| |||||||
John F. Waldron | SS Plan(1) | $ | 71,040 |
| $ | 29,384 |
| $ | 39,364 |
|
| — |
| $ | 531,852 |
| ||||||
DIC Plan |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Deferred RSUs(2) |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Total | $ | 71,040 |
| $ | 29,384 |
| $ | 39,364 |
|
| — |
| $ | 531,852 |
|
Named Executive Officer | Plan | Executive Contributions in Last FY(3) | Registrant Contributions in Last FY(1)(3) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(3) | ||||||||||||||||||||||||||
Darius Adamczyk | SS Plan(1) | $ | 114,438 | $ | 100,134 | $ | 14,217 | — | $ | 1,745,827 | ||||||||||||||||||||||
DIC Plan | $ | — | — | $ | 21,783 | — | $ | 1,291,629 | ||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
Total | $ | 114,438 | $ | 100,134 | $ | 36,000 | — | $ | 3,037,456 | |||||||||||||||||||||||
Gregory P. Lewis | SS Plan(1) | $ | 127,600 | $ | 37,757 | $ | 9,029 | — | $ | 811,336 | ||||||||||||||||||||||
DIC Plan | — | — | $ | 2,054 | — | $ | 121,579 | |||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
Total | $ | 127,600 | $ | 37,757 | $ | 11,083 | — | $ | 932,915 | |||||||||||||||||||||||
Anne T. Madden | SS Plan(1) | $ | 260,695 | $ | 40,533 | $ | 85,930 | — | $ | 3,886,846 | ||||||||||||||||||||||
DIC Plan | $ | 758,000 | — | $ | 110,553 | — | $ | 6,630,274 | ||||||||||||||||||||||||
Deferred RSUs(2) | — | — | $ | (42,263) | — | $ | 7,684,352 | |||||||||||||||||||||||||
Total | $ | 1,018,695 | $ | 40,533 | $ | 154,220 | — | $ | 18,201,472 | |||||||||||||||||||||||
Que Thanh Dallara | SS Plan(1) | $ | 99,930 | 30,256 | $ | 6,799 | — | $ | 515,323 | |||||||||||||||||||||||
DIC Plan | 55,600 | — | $ | 4,855 | — | $ | 294,014 | |||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
Total | $ | 155,530 | $ | 30,256 | $ | 11,654 | — | $ | 809,337 | |||||||||||||||||||||||
Michael R. Madsen | SS Plan(1) | $ | 39,410 | $ | 31,246 | $ | 10,479 | — | $ | 912,932 | ||||||||||||||||||||||
DIC Plan | — | — | — | — | — | |||||||||||||||||||||||||||
Deferred RSUs(2) | — | — | — | — | — | |||||||||||||||||||||||||||
Total | $ | 39,410 | $ | 31,246 | $ | 10,479 | — | $ | 912,932 |
Named Executive Officer | Executive Contributions in SCT | Registrant Contributions in SCT | Earnings in SCT | Portion of Aggregate Balance Included in Prior SCTs | ||||||||||||||||||||||
Darius Adamczyk | $ | 114,438 | $ | 100,134 | $ | 2,489 | $ | 2,126,264 | ||||||||||||||||||
Gregory P. Lewis | $ | 127,600 | $ | 37,757 | $ | 747 | $ | 338,075 | ||||||||||||||||||
Anne T. Madden | $ | 260,695 | $ | 40,533 | $ | 57,507 | $ | 2,469,873 | ||||||||||||||||||
Que Thanh Dallara | $ | 99,930 | $ | 30,256 | $ | 773 | $ | 0 | ||||||||||||||||||
Michael R. Madsen | $ | 39,410 | $ | 31,246 | $ | 726 | $ | 0 |
|
|
|
Named Executive Officer | Executive Contributions in SCT | Registrant Contributions in SCT | Earnings in SCT | Portion of Aggregate Balance Included in Prior SCTs | ||||||||||||||||||||||||||||||||||||||||
Darius Adamczyk |
| $105,792 |
|
| $92,568 |
|
| $ 5,348 |
|
| $1,922,556 |
| ||||||||||||||||||||||||||||||||
Gregory P. Lewis |
| $113,858 |
|
| $32,810 |
|
| $ 1,454 |
|
| $ 189,953 |
| ||||||||||||||||||||||||||||||||
Anne T. Madden |
| $246,057 |
|
| $37,837 |
|
| $38,557 |
|
| $1,389,422 |
| ||||||||||||||||||||||||||||||||
Rajeev Gautam |
| $ 41,972 |
|
| $33,838 |
|
| $ 6,880 |
|
| $ 333,245 |
| ||||||||||||||||||||||||||||||||
John F. Waldron |
| $ 71,040 |
|
| $29,384 |
|
| $ 940 |
|
| — |
|
|
|
Honeywell Excess Benefit Plan and Honeywell Supplemental Savings Plan
HONEYWELL EXCESS BENEFIT PLAN AND HONEYWELL SUPPLEMENTAL SAVINGS PLAN
2021.
Honeywell Salary and Incentive Award Deferral Plan for Selected Employees
Distribution.
Notice and Proxy Statement | 2022 | 87 |
|
|
|
Deferral of RSUs
The Named Executive Officers may defer the receipt of up to 100% of theircertain RSUs upon vesting based on an election made at the time of grant. The executive may defer payment to:
•A specific year after the vesting year; or
•The year following the executive’s termination of active employment.
Unvested Dividend Equivalents
I
•Termination of Employment
•Change in Control (CIC)
Senior Severance Plan
88 | Notice and Proxy Statement | 2022 |
|
|
|
Summary of Benefits—Termination Events
The following table summarizes the termination of employment and CIC benefits payable to our NEOs. None of these termination benefits are payable to NEOs who voluntarily quitresign (other than voluntary resignations for good reason after a CIC) or whose employment is terminated by us for cause. The information in the table below assumes, in each case, that termination of employment occurred on December 31, 2020.2021. Pension and nonqualifiednon-qualified deferred compensation benefits, which are described elsewhere in this Proxy Statement, are not included in the table below in accordance with applicable SEC rules, even though they may become payable upon the occurrence of the events specified in the table. The effect of a termination of employment or CIC on outstanding stock options, RSUs and PSUs is described in the section below entitled “Impact on Equity-Based Awards.”
Payments and Benefits | Named Executive Officer | Termination by the Company Without Cause | Death | Disability | Change in Control— No Termination of Employment | Change in Control— Termination of Employment by Company Without Cause, By NEO for Good Reason or Due to Disability | ||||||||||||||||
Cash Severance (Base Salary + Bonus) | Darius Adamczyk | $ | 13,200,000 |
|
| — |
|
| — |
|
| — |
| $ | 13,200,000 |
| ||||||
Gregory P. Lewis | $ | 2,310,000 |
|
| — |
|
| — |
|
| — |
| $ | 3,080,000 |
| |||||||
Anne T. Madden | $ | 2,541,000 |
|
| — |
|
| — |
|
| — |
| $ | 3,388,000 |
| |||||||
Rajeev Gautam | $ | 2,355,000 |
|
| — |
|
| — |
|
| — |
| $ | 3,140,000 |
| |||||||
John F. Waldron | $ | 2,160,000 |
|
| — |
|
| — |
|
| — |
| $ | 2,880,000 |
| |||||||
ICP (Year of Termination) | Darius Adamczyk |
| — |
|
| — |
|
| — |
| $ | 2,508,000 |
| $ | 2,508,000 |
| ||||||
Gregory P. Lewis |
| — |
|
| — |
|
| — |
| $ | 689,000 |
| $ | 689,000 |
| |||||||
Anne T. Madden |
| — |
|
| — |
|
| — |
| $ | 758,000 |
| $ | 758,000 |
| |||||||
Rajeev Gautam |
| — |
|
| — |
|
| — |
| $ | 503,000 |
| $ | 503,000 |
| |||||||
John F. Waldron |
| — |
|
| — |
|
| — |
| $ | 908,000 |
| $ | 908,000 |
| |||||||
Performance Cash Units | Darius Adamczyk |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| ||||||
Gregory P. Lewis |
| — |
| $ | 766,500 |
| $ | 766,500 |
|
| — |
| $ | 766,500 |
| |||||||
Anne T. Madden |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Rajeev Gautam |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
John F. Waldron |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Benefits and Perquisites | Darius Adamczyk | $ | 29,664 |
|
| — |
|
| — |
|
| — |
| $ | 29,664 |
| ||||||
Gregory P. Lewis | $ | 12,132 |
|
| — |
|
| — |
|
| — |
| $ | 16,176 |
| |||||||
Anne T. Madden | $ | 14,346 |
|
| — |
|
| — |
|
| — |
| $ | 19,128 |
| |||||||
Rajeev Gautam | $ | 16,380 |
|
| — |
|
| — |
|
| — |
| $ | 21,840 |
| |||||||
John F. Waldron | $ | 11,286 |
|
| — |
|
| — |
|
| — |
| $ | 15,048 |
| |||||||
All Other-Payments/Benefits | Darius Adamczyk | $ | 144,104 |
|
| — |
|
| — |
|
| — |
| $ | 144,104 |
| ||||||
Gregory P. Lewis | $ | 185,619 |
|
| — |
|
| — |
|
| — |
| $ | 185,619 |
| |||||||
Anne T. Madden | $ | 284,833 |
|
| — |
|
| — |
|
| — |
| $ | 549,152 |
| |||||||
Rajeev Gautam |
| — |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
John F. Waldron | $ | 164,280 |
|
| — |
|
| — |
|
| — |
|
| — |
| |||||||
Total | Darius Adamczyk | $ | 13,373,768 |
|
| — |
|
| — |
| $ | 2,508,000 |
| $ | 15,881,768 |
| ||||||
Gregory P. Lewis | $ | 2,507,751 |
| $ | 766,500 |
| $ | 766,500 |
| $ | 689,000 |
| $ | 4,737,295 |
| |||||||
Anne T. Madden | $ | 2,840,179 |
|
| — |
|
| — |
| $ | 758,000 |
| $ | 4,714,280 |
| |||||||
Rajeev Gautam | $ | 2,371,380 |
|
| — |
|
| — |
| $ | 503,000 |
| $ | 3,664,840 |
| |||||||
John F. Waldron | $ | 2,335,566 |
|
| — |
|
| — |
| $ | 908,000 |
| $ | 3,803,048 |
|
Payments and Benefits | Named Executive Officer | Termination by the Company Without Cause | Death | Disability | Change in Control—No Termination of Employment | Change in Control—Termination of Employment by Company Without Cause, By NEO for Good Reason or Due to Disability | |||||||||||||||||||||||||||||
Cash Severance | Mr. Adamczyk | $ | 14,025,000 | $ | — | $ | — | $ | — | $ | 14,025,000 | ||||||||||||||||||||||||
(Base Salary + Bonus) | Mr. Lewis | $ | 2,550,000 | $ | — | $ | — | $ | — | $ | 3,400,000 | ||||||||||||||||||||||||
Ms. Madden | $ | 2,603,100 | $ | — | $ | — | $ | — | $ | 3,470,800 | |||||||||||||||||||||||||
Ms. Dallara | $ | 2,055,000 | $ | — | $ | — | $ | — | $ | 2,740,000 | |||||||||||||||||||||||||
Mr. Madsen | $ | 2,247,000 | $ | — | $ | — | $ | — | $ | 2,996,000 | |||||||||||||||||||||||||
ICP | Mr. Adamczyk | $ | — | $ | — | $ | — | $ | 3,910,000 | $ | 3,910,000 | ||||||||||||||||||||||||
(Year of Termination) | Mr. Lewis | $ | — | $ | — | $ | — | $ | 1,107,000 | $ | 1,107,000 | ||||||||||||||||||||||||
Ms. Madden | $ | — | $ | — | $ | — | $ | 1,159,000 | $ | 1,159,000 | |||||||||||||||||||||||||
Ms. Dallara | $ | — | $ | — | $ | — | $ | 804,000 | $ | 804,000 | |||||||||||||||||||||||||
Mr. Madsen | $ | — | $ | — | $ | — | $ | 827,000 | $ | 827,000 | |||||||||||||||||||||||||
Performance Cash Units | Mr. Adamczyk | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
Mr. Lewis | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Ms. Madden | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Ms. Dallara | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Mr. Madsen | $ | — | $ | 511,000 | $ | 511,000 | $ | — | $ | 511,000 | |||||||||||||||||||||||||
Benefits and Perquisites | Mr. Adamczyk | $ | 37,346 | $ | — | $ | — | $ | — | $ | 37,346 | ||||||||||||||||||||||||
Mr. Lewis | $ | 13,017 | $ | — | $ | — | $ | — | $ | 17,356 | |||||||||||||||||||||||||
Ms. Madden | $ | 14,237 | $ | — | $ | — | $ | — | $ | 18,996 | |||||||||||||||||||||||||
Ms. Dallara | $ | 5,198 | $ | — | $ | — | $ | — | $ | 6,930 | |||||||||||||||||||||||||
Mr. Madsen | $ | 8,134 | $ | — | $ | — | $ | — | $ | 10,846 | |||||||||||||||||||||||||
All Other-Payments/Benefits | Mr. Adamczyk | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
Mr. Lewis | $ | 192,745 | $ | — | $ | — | $ | — | $ | 192,745 | |||||||||||||||||||||||||
Ms. Madden | $ | 258,890 | $ | — | $ | — | $ | — | $ | 547,788 | |||||||||||||||||||||||||
Ms. Dallara | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Mr. Madsen | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||
Total | Mr. Adamczyk | $ | 14,062,346 | $ | — | $ | — | $ | 3,910,000 | $ | 17,972,346 | ||||||||||||||||||||||||
Mr. Lewis | $ | 2,755,762 | $ | — | $ | — | $ | 1,107,000 | $ | 4,717,101 | |||||||||||||||||||||||||
Ms. Madden | $ | 2,876,227 | $ | — | $ | — | $ | 1,159,000 | $ | 5,196,584 | |||||||||||||||||||||||||
Ms. Dallara | $ | 2,060,198 | $ | — | $ | — | $ | 804,000 | $ | 3,550,930 | |||||||||||||||||||||||||
Mr. Madsen | $ | 2,255,134 | $ | 511,000 | $ | 511,000 | $ | 827,000 | $ | 4,344,846 |
| 89 |
|
Explanation of Benefits—Termination Events
EXPLANATION OF BENEFITS—TERMINATION EVENTS
Benefit/Event | ||||||||||
| Amount and Terms of Payments ( | Change | ||||||||
| •Three years of base salary and bonus for Mr. Adamczyk, and 18 months of base salary and bonus for the Other NEOs. •Paid periodically, in cash. •Bonus is equal to target percentage of base salary. •Payment conditioned upon a general release in favor of the Company, non-compete, non-disclosure (indefinite duration), and non-solicitation covenants (two years for customers and two years for employees) and refraining from certain other misconduct. | •Three years of base salary and bonus for Mr. Adamczyk, and two years of base salary and bonus for the Other NEOs. •Amounts are paid in a lump sum within 60 days following the later of the date of termination or the CIC date. | ||||||||
Annual Bonus for the Year of Termination-Cash Payment Annual ICP Plan bonus is payable to NEOs for the year in which a CIC occurs. | •N/A. | •Based on achievement of pre-established ICP goals and the MDCC’s assessment of other relevant criteria, for the stub period ending on the CIC (as defined in the ICP Plan) date, prorated through the CIC date. •Paid in cash at the time ICP awards are typically paid to Honeywell executives for the year in which a CIC occurs, but only if the employee is actively employed on the payment date, has been involuntarily terminated other than for cause or has terminated employment for good reason. | ||||||||
Performance Cash Units Performance Cash Unit awards are paid out in the event of death, disability and a qualifying termination of employment upon a CIC. | •Only Mr. | •Upon a CIC, unvested PCUs remain outstanding to the extent assumed by the successor. Following a CIC, unvested PCUs would vest on a pro rata basis in the event of an involuntary termination other than for cause or a voluntary termination for good reason, within 2 years of the CIC event. For a performance cycle that has already concluded, payout would be based on actual performance. For a performance cycle in progress, the prorated payout would be based on target performance. The “Change in Control-Termination of Employment” column includes the full payout for the |
90 | Notice and Proxy Statement | 2022 |
Benefit/Event | Amount and Terms of Payments (Other Than Upon a Change In Control) | Change In Control Provisions | ||||||||
Certain Benefits and Perquisites Termination of employment without cause; CIC, voluntary termination of employment for good reason. | •Basic life insurance coverage is continued at Honeywell’s cost for the severance period. •Medical and dental benefits are continued during the severance period at active employee contribution rates. | •Basic life insurance coverage is continued at Honeywell’s cost for the severance period. •Medical and dental benefits are continued during the severance period at active employee contribution rates. | ||||||||
|
|
|
|
| |||||||
Other Benefits | • | •If employment terminated upon CIC, service credit for pension purposes during the first 12 months of the severance period. Additional 3 years of age & service credit for pension purposes for Ms. Madden under pre-2007 Corporate CIC Severance Plan provisions. | ||||||
No Excise Tax Gross-Ups
Impact on Equity-Based Awards
gross-ups.
Named Executive Officer | In-the-Money Value of Unvested Stock Options | Unvested RSUs | Unvested PSUs(1) | |||||||||
Darius Adamczyk | $ | 26,455,707 |
| $ | 10,825,154 |
| $ | 40,075,658 |
| |||
Gregory P. Lewis | $ | 6,163,782 |
| $ | 3,586,760 |
| $ | 4,921,665 |
| |||
Anne T. Madden | $ | 6,399,206 |
| $ | 3,547,411 |
| $ | 8,268,287 |
| |||
Rajeev Gautam | $ | 8,139,095 |
| $ | 2,590,261 |
| $ | 10,621,174 |
| |||
John F. Waldron | $ | 6,385,425 |
| $ | 5,051,200 |
| $ | 8,888,945 |
|
Named Executive Officer | In-the-Money Value of Unvested Stock Options | Unvested RSUs | Unvested PSUs(1) | |||||||||||||||||
Mr. Adamczyk | $ | 13,625,899 | $ | 22,020,741 | $ | 7,856,935 | ||||||||||||||
Mr. Lewis | $ | 3,680,750 | $ | 4,919,168 | $ | 2,442,069 | ||||||||||||||
Ms. Madden | $ | 3,768,060 | $ | 5,471,094 | $ | 2,442,069 | ||||||||||||||
Ms. Dallara | $ | 2,942,265 | $ | 4,683,969 | $ | 1,990,645 | ||||||||||||||
Mr. Madsen | $ | 2,507,520 | $ | 3,799,677 | $ | 1,603,998 |
|
| 91 |
|
Termination orTERMINATION OR CIC Impact On Outstanding Awards
IMPACT ON OUTSTANDING AWARDS
Plan | Treatment of Stock Options, | ||||
2011 Stock Incentive Plan of Honeywell International Inc. and its Affiliates | •RSUs become vested in full upon death or disability. •Following termination of employment, unless otherwise agreed by the Company pursuant to the terms of the plan, participants (or their beneficiaries) have until the earlier of the original expiration date or the following period in which to exercise vested options:
–Three (3) years in the event of death, disability or a voluntary or involuntary termination (other than for cause) after qualifying for “early retirement” (age 55 and 10 years of service) or “full retirement” (age 60 and 10 years of service);
–One (1) year in the case of any other involuntary termination without cause; and
–Thirty (30) days in the case of a voluntary termination. •These rules are hereinafter referred to as the “2011 Stock Plan Exercise Rules.” •Unvested stock options and RSUs do not automatically vest upon a CIC if rolled over or replaced by the successor. Following a CIC, vesting shall only occur if a participant’s employment is terminated, either by the successor without cause or by the participant for good reason (that is, “double trigger” vesting), within two years following a CIC. These rules are hereinafter referred to as the “Double Trigger CIC Rules”. | ||||
2016 Stock Incentive Plan of Honeywell International Inc. and its Affiliates | •The Double Trigger CIC Rules apply to unvested stock options and RSUs under this plan. Double trigger vesting also applies to PSUs awarded under this plan where the awards are rolled over or replaced by the successor, with vesting on a pro rata basis at target for incomplete performance periods, and based on the actual earned award for completed performance cycles, and paid within 90 days of a participant’s termination of employment, either by the successor without cause or by the participant for good reason (that is, “double trigger” vesting), within two years following a CIC. RSU and PSU awards that are not rolled over or replaced by the successor vest immediately upon the CIC. •The 2011 Stock Plan Exercise Rules apply to vested stock options under this plan. In the case of Ms. Dallara, the Company agreed that her vested options will expire on the first anniversary of the effective date of her resignation. •There is no acceleration of vesting of awards upon reaching retirement age. Unvested RSUs and a prorated amount of a PSU award are paid upon a termination due to death or disability. Unvested stock options vest upon a termination due to death or disability. |
Defined Terms Used in This Section
92 | Notice and Proxy Statement | 2022 |
Term | Summary of Definition | ||||
Change in Control | •The acquisition of 30% or more of the Company's common stock; •The purchase of all or part of the common stock pursuant to a tender offer or exchange offer; •A merger where Honeywell does not survive as an independent, publicly-owned corporation; •A sale of substantially all of Honeywell’s assets; or •A substantial change in Honeywell’s Board over a two-year period. •Additionally, under the Senior Severance Plan, any event that the MDCC, in its discretion, determines to be a Change in Control for purposes of that plan; provided that under the 2011 or 2016 Stock Incentive Plan, each of the events described above would only be a Change in Control if it constitutes a “change in control event” within the meaning of United States Department of Treasury Regulation §1.409A-3(i)(5)(i). | ||||
|
|
|
|
| |||
Termination for Cause | •Clear and convincing evidence of a significant violation of the Company’s Code of Business Conduct; •The misappropriation, embezzlement, or willful destruction of Company property of significant value; •The willful failure to perform, gross negligence or intentional misconduct of significant duties that results in material harm to the business of the Company; •The conviction (treating a nolo contendere plea as a conviction) of a felony (whether or not any right to appeal has been or may be exercised); •The failure to cooperate fully in a Company investigation or to be fully truthful when providing evidence or testimony in such investigation; or •Clear and convincing evidence of the willful falsification of any financial records of the Company that are used in compiling the Company’s financial statements or related disclosures, with the intent of violating Generally Accepted Accounting Principles or, if applicable, International Financial Reporting Standards. | |||
Termination for Good Reason | •A material diminution in the NEO’s authority, duties, or responsibilities; •A material decrease in base compensation; •A material reduction in the aggregate benefits available to the NEO where such reduction does not apply to all similarly-situated employees; •Any geographic relocation of the NEO’s position to a location that is more than 50 miles from his or her previous work location; •Any action that constitutes a constructive discharge; or •The failure of a successor to assume these obligations under the Senior Severance Plan. |
| 93 |
As permitted by the SEC rules, the median employee utilized for the 2020 pay ratio disclosure is the same median employee identified and used for the 2018 CEO pay ratio as there were no changes to our employee population or employee compensation arrangements during 2019 and 2020 that would result in a significant change to our pay ratio disclosure. We most recently identified our median employee using our global employee population as of November 1, 2018 (Determination Date). We collected actual base salary, incentive awards paid, and any overtime paid during the 12-month period ending on the Determination Date. As permitted under SEC rules, we annualized the compensation of all newly hired permanent employees during this period.
CEO.
•For purposes of the 2021 pay ratio disclosure, Honeywell identified a new median employee using our global employee population as of October 31, 2021 (Determination Date). We consideredselected October 31 as the Determination Date, as it was a date within the last three months of 2021, and would allow sufficient time to gather the information to identify the median employee given the global scope of our operations.
|
Total U.S. Employees (1) |
| 54,192 | ||||||||||
Total non-U.S. Employees |
|
| ||||||||||
Total Global Workforce |
| 120,063 |
Total U.S. Employees |
| 54,192 | ||||||||||
Total non-U.S. Employees |
|
| ||||||||||
Total Global Workforce |
| 114,851 |
For
year, was $75,529, calculated in accordance with the rules applicable to the Summary Compensation Table (SCT) of this proxy statement. The annual total compensation of thefor our median employee of our Company (other than our CEO) was $64,438; and
TheFor 2021, the annual total compensation of the CEO for purposes of determining the CEO Pay Ratio was $19,075,281.
|
(in millions of $) | 2020 | 2019 | ||||||||
Audit Fees |
$ |
16.93 |
|
$ |
17.88 |
|
• Annual integrated audit of the Company’s consolidated financial statements, and internal control over financial reporting, statutory audits of foreign subsidiaries, attest services, consents, issuance of comfort letters, and review of documents filed with the SEC. | |||
Audit-Related Fees |
$ |
1.76 |
|
$ |
5.64 |
|
• Audit-related services in both 2020 and 2019 related primarily to carve out audits and agreed upon procedures. | |||
Tax Fees |
|
— |
|
|
— |
|
• No tax services in 2020 or 2019. | |||
All Other Fees |
| — |
|
| — |
| ||||
Total Fees | $ | 18.69 |
| $ | 23.52 |
|
(In Millions of $) | 2021 | 2020 | |||||||||||||||||||||
Audit Fees | $16.94 | $ | 16.93 | •Annual integrated audit of the Company’s consolidated financial statements, and internal control over financial reporting, statutory audits of foreign subsidiaries, attest services, and review of documents filed with the SEC. | |||||||||||||||||||
Audit-Related Fees | $ | 4.71 | $ | 1.76 | •Audit-related services in both 2021 and 2020 related primarily to carve out audits, consents, issuance of comfort letters, and agreed upon procedures. The year-over-year fee increase was primarily attributable to higher costs for carve-out audits in 2021, including the Quantinuum business. | ||||||||||||||||||
Tax Fees | $ | 0.03 | — | •Fees related to tax compliance in 2021. No tax services in 2020. | |||||||||||||||||||
All Other Fees | $ | 0.31 | — | •Fees related to advisory and consulting services. No services in 2020. | |||||||||||||||||||
Total Fees | $ | 21.99 | $ | 18.69 |
•The Audit Committee reviews and pre-approves an annual budget for specific categories of non-audit services (that are detailed as to the particular services) which Deloitte is to be permitted to provide (those categories do not include any of the prohibited services in the auditor independence provisions of the Sarbanes-Oxley Act of 2002). This review includes an evaluation of the possible impact of the provision of such services by Deloitte on the firm’s independence in performing its audit and audit-related services.
•The Audit Committee reviews the non-audit services performed by, and amount of fees paid to, Deloitte, by category in comparison to the pre-approved budget.
•The engagement of Deloitte to provide non-audit services that do not fall within a specific category of pre-approved services, or that would result in the total fees payable to Deloitte in any category to exceed the pre-approved amount, requires the prior approval of the Audit Committee. Between regularly scheduled meetings of the Audit Committee, the Audit Committee Chair may represent the entire committee for purposes of review and approval of any such engagement, and the Chair is required to report on all such interim reviews at the committee’s next regularly scheduled meeting.
| 95 |
Kevin Burke
D. Scott Davis
Linnet F. Deily
Judd Gregg
Robin L. Washington
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE APPOINTMENT OF DELOITTE AND TOUCHE LLP AS INDEPENDENT ACCOUNTANTS. |
|
|
|
PROPOSAL 4: SHAREOWNER PROPOSAL—
SHAREHOLDER RIGHT TO ACT BY WRITTEN CONSENT
This proposal has been submitted by John Chevedden, 2215 Nelson Ave., No. 205 Redondo Beach, CA 90278 (the beneficial owner of 100 shares of common stock):
Shareholders request that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This includes shareholder ability to initiate any appropriate topic for written consent.
Taking action by written consent in place of a meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle like the election of a new director.
This proposal topic won 40% support at a previous Honeywell annual meeting. And this was before the shareholder right to call a special in-person shareholder meeting was eliminated by the 2020 pandemic.
Ms. Linnet Deily, the Chair of the Honeywell Governance Committee, seems to have completely overlooked the safeguards that can be built into granting shareholders a right to act by written consent.
The Bank of New York Mellon Corporation (BK) said it adopted written consent in 2019 after 45%-support (clearly less than a majority vote) for a written consent shareholder proposal. And this was a year before the pandemic put an end to in-person shareholder meetings – perhaps forever. It is so much easier for management to conduct an online shareholder meeting that management is now spoiled and will never want to return to an in-person shareholder meeting.
Shareholders need to be able to accomplish more outside of a shareholder meeting due to the onslaught of online shareholder meetings replacing in-person shareholder meetings.
With the near universal use of online annual shareholder meetings starting in 2020 shareholders no longer have the right to discuss concerns with other shareholders and with their directors at a shareholder meeting. Shareholder meetings can now be online meetings which has an inferior format to a Zoom meeting.
Shareholders are also severely restricted in making their views known at online shareholder meetings because all challenging questions and comments can be screened out at an online meeting.
For instance Goodyear management became an example of turning an online shareholder meeting into a mute button meeting. Goodyear management hit the mute button right in the middle of a formal shareholder proposal presentation at its 2020 shareholder meeting. With a deep slumping stock price Goodyear management simply did not want shareholders to hear constructive shareholder criticism.
Shareholders now need to have the option more than ever to take action outside of a shareholder meeting since online shareholder meetings are devoid of significance.
Please vote yes: Shareholder Right to Act by Written Consent–Proposal 4
The Honeywell Board recommends that shareowners vote AGAINST this proposal for the following reasons:
|
|
| 2022 |
|
|
|
|
|
|
|
|
|
•The adoption of a proxy access By-laws amendment (instituted in 2015 in response to shareowner sentiment).
The ability of shareowners to submit live proposals for presentation at an annual meeting.
•The establishment of an independent Lead Director role and designation of the Lead Director as a point of contact for shareowner communications (instituted in 2014 in response to shareowner feedback). See “Communicating With the Board” on page 96.
The annual•Annual election of directors and majority voting in uncontested director elections.
•The authority of the Lead Director and the Chair of the Corporate Governance and Responsibility Committee to call special meetings of the Board at any time for any reason.
•The elimination of supermajority voting provisions in our charter documents.
•Shareowner approval of poison pills.
Robust shareowner outreach and engagement practices. See “Shareowner Outreach and Engagement” beginning on page 19 for a description of our shareowner engagement activities.
•Virtual annual meeting format that allows shareowner proponents the opportunity to present their proposal live via audio during the meeting and for shareowners to submit questions before and during the meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL. |
|
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL. | |||||
100 | Notice and Proxy Statement | 2022 |
Notice and Proxy Statement | 2022 | 101 |
102 | Notice and Proxy Statement | 2022 |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE AGAINST THIS PROPOSAL. | |||||
Notice and Proxy Statement | 2022 | 103 |
If a conflict
•The benefits of the transaction to Honeywell;
•The terms of the transaction and whether they are arm’s-length and in the ordinary course of the Company’s business;
•The direct or indirect nature of the related person’s interest in the transaction;
•The size and expected term of the transaction; and
•Other facts and circumstances that bear on the materiality of the related person transaction under applicable law and listing standards.
| 2022 |
|
|
| ||||||
|
|
| ||||||
|
|
|
|
|
|
2021.
Name and Complete Mailing Address | Number of Shares | Percent of Common Stock Outstanding(3) | |||||||||
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | 56,119,426 | (1) | 8.18% | ||||||||
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055 | 41,185,153 | (2) | 6.0% |
Components of Beneficial (Number of Shares) | ||||||||||||||||
Name(1) | Common Stock Beneficially Owned | Right To Acquire(2) | Other Based | Total Number of Shares(4) | ||||||||||||
Darius Adamczyk |
| 140,849 |
|
| 1,105,196 |
|
| 4,187 |
|
| 1,250,232 |
| ||||
Duncan B. Angove |
| — |
|
| 4,193 |
|
| 3,730 |
|
| 7,923 |
| ||||
William S. Ayer |
| 5,082 |
|
| 13,640 |
|
| 3,559 |
|
| 22,281 |
| ||||
Kevin Burke |
| 20,011 |
|
| 21,664 |
|
| 10,388 |
|
| 52,063 |
| ||||
D. Scott Davis |
| 24,955 |
|
| 16,208 |
|
| 19,682 |
|
| 60,845 |
| ||||
Linnet F. Deily |
| 7,509 |
|
| 10,476 |
|
| 17,696 |
|
| 35,681 |
| ||||
Deborah Flint |
| — |
|
| 1,415 |
|
| 1,521 |
|
| 2,936 |
| ||||
Judd Gregg |
| 14,532 |
|
| 19,360 |
|
| 15,593 |
|
| 49,485 |
| ||||
Clive Hollick |
| 17,499 |
|
| 19,360 |
|
| 25,951 |
|
| 62,810 |
| ||||
Grace D. Lieblein |
| 6,135 |
|
| 19,360 |
|
| 6,590 |
|
| 32,085 |
| ||||
Raymond T. Odierno |
| — |
|
| 1,184 |
|
| 1,248 |
|
| 2,432 |
| ||||
George Paz |
| 19,384 |
|
| 22,432 |
|
| 13,158 |
|
| 54,974 |
| ||||
Robin L. Washington |
| 6,115 |
|
| 19,360 |
|
| 9,142 |
|
| 34,617 |
| ||||
Gregory P. Lewis |
| 24,656 |
|
| 173,567 |
|
| 1,102 |
|
| 199,325 |
| ||||
Anne T. Madden |
| 30,105 |
|
| 195,276 |
|
| 39,940 |
|
| 265,321 |
| ||||
Rajeev Gautam |
| 13,244 |
|
| 283,106 |
|
| 2,885 |
|
| 299,235 |
| ||||
John F. Waldron |
| 37,065 |
|
| 210,135 |
|
| 936 |
|
| 248,136 |
| ||||
All directors, nominees and executive officers as a group, including the above-named persons (22 people)
|
| 435,047 |
|
| 2,468,138 |
|
| 179,911 |
|
| 3,083,096 |
|
|
|
|
|
|
|
Common
Stock
Beneficially
OwnedDarius Adamczyk 147,903 1,257,857 4,719 1,410,479 Duncan B. Angove 862 3,341 4,581 8,784 William S. Ayer 6,011 12,788 3,891 22,690 Kevin Burke 22,056 18,508 10,805 51,369 D. Scott Davis 25,817 15,356 20,216 61,389 Deborah Flint 485 1,287 2,278 4,050 Judd Gregg 15,485 18,508 16,785 50,778 Rose Lee 9 0 267 276 Grace D. Lieblein 8,411 15,356 6,731 30,498 George Paz 20,251 21,580 13,610 55,441 Robin L. Washington 10,175 15,356 10,015 35,546 Gregory P. Lewis 31,518 212,043 1,296 244,857 Anne T. Madden 32,006 228,515 40,343 300,864 Que Thanh Dallara 6,302 108,726 597 115,625 Michael R. Madsen 35,002 153,519 1,483 190,004 All directors, nominees and executive officers as a group, including the above-named persons (20 people) 429,672 2,542,047 139,992 3,111,711
Section 16(a)c/o Honeywell International Inc., 855 S. Mint Street, Charlotte, NC 28202.
providing a pre-recorded message, and shareowners also had an opportunity to submit questions both before and during the meeting. Honeywell’s Chairman and CEO answered most of the questions during the time allotted for Q&A. We responded to appropriately submitted, but unanswered, questions in writing by posting the questions and answers on our Investor Relations website after the meeting. In comparison to typical in-person meetings, the Company believes the virtual format enables more meaningful engagement and a greater level of information sharing with a broader group of shareowners. See “Participation in the Annual Meeting” below for additional information regarding attending our virtual Annual Meeting.
106 | Notice and Proxy |
I
April 24, 2022.
Brokers
April 24, 2022.
The
|
April 21, 2022.
|
|
|
We may be informed whether or not a particular shareowner has voted and will have access to any comment written on a proxy, ballot or other material and to the identity of the commenting shareowner. Under the policy, the inspectors of election at any shareowner meeting will be independent parties unaffiliated with Honeywell.
Notice and Proxy Statement | 2022 | 107 |
•Sending a timely written statement to that effect to the Corporate Secretary of Honeywell;
•Submitting a properly signed proxy with a later date;
•Voting by telephone, mobile device or via the Internet at a later time (if initially able to vote in that manner) so long as such vote or voting direction is received by the applicable date and time set forth above for shareowners of record and participants in Honeywell savings plans; or
•Voting at the Annual Meeting (except for shares held in the savings plans).
I
Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present.
Icompensation and the auditor appointment, respectively.
I
I
I11717 and including their name, the name of their broker or other nominee and their account number(s). Beneficial owners may also contact Broadridge if they received multiple copies of the proxy materials and prefer to receive a single copy in the future.
108 | Notice and Proxy Statement | 2022 |
|
|
|
IELECTRONIC ACCESS TO THE PROXY MATERIALS
|
|
| |||||||||||
Notice | 109 |
|
I
|
|
|
IDIRECTOR NOMINATIONS FOR 20222023 ANNUAL MEETING
The CGRC evaluates candidates recommended by shareowners using the same criteria as for other candidates recommended by existing Board members or other persons, as described above under “Nomination and Election Process”.
110 | Notice and Proxy Statement | 2022 |
I
I
I
I
I
|
Victor
MILLER
April 9, 2021
|
|
NON-GAAP FINANCIAL MEASURES
($M) | 2019 | 2020 | ||||||
Cash provided by operating activities | $ | 6,897 |
| $ | 6,208 |
| ||
Expenditures for property, plant and equipment |
| (839 | ) |
| (906 | ) | ||
|
|
|
| |||||
Free cash flow |
| 6,058 |
|
| 5,302 |
| ||
Separation cost payments |
| 213 |
|
| — |
| ||
|
|
|
| |||||
Adjusted free cash flow | $ | 6,271 |
| $ | 5,302 |
| ||
|
|
|
| |||||
($M) | 2020 | 2021 | ||||||||||||
Cash provided by operating activities | $ | 6,208 | $ | 6,038 | ||||||||||
Expenditures for property, plant, and equipment | (906) | (895) | ||||||||||||
Garrett Cash Receipts | — | 586 | ||||||||||||
Free cash flow | $ | 5,302 | 5,729 |
equipment plus cash receipts from Garrett.
2017 | 2019 | 2020 | ||||||||||
Earnings per share of common stock—assuming dilution(1) | $ | 2.00 |
| $ | 8.41 |
| $ | 6.72 |
| |||
Pension mark-to-market expense(2) |
| 0.09 |
|
| 0.13 |
|
| 0.04 |
| |||
Separation costs(3) |
| 0.02 |
|
| — |
|
| — |
| |||
Separation related tax adjustment(4) |
| — |
|
| — |
|
| (0.26 | ) | |||
Impacts from U.S. Tax Reform |
| 5.04 |
|
| (0.38 | ) | ||||||
Garrett related adjustment(5) |
| — |
|
| — |
|
| 0.60 |
| |||
|
|
|
|
|
| |||||||
Adjusted earnings per share of common stock—assuming dilution | $ | 7.15 |
| $ | 8.16 |
| $ | 7.10 |
| |||
|
|
|
|
|
| |||||||
|
|
|
|
|
2018 | 2019 | 2020 | 2021 | |||||||||||||||||||||||
Earnings per share of common stock—assuming dilution(1) | $ | 8.98 | $ | 8.41 | $ | 6.72 | $ | 7.91 | ||||||||||||||||||
Pension mark-to-market expense(2) | 0.04 | 0.13 | 0.04 | 0.05 | ||||||||||||||||||||||
Separation related tax adjustment(3) | — | — | (0.26) | — | ||||||||||||||||||||||
Changes in fair value for Garrett equity securities(4) | — | — | — | (0.03) | ||||||||||||||||||||||
Garrett related adjustment(5) | — | — | 0.60 | 0.01 | ||||||||||||||||||||||
Impacts from U.S. Tax Reform | (1.98) | (0.38) | — | — | ||||||||||||||||||||||
Gain on sale of retail footwear business(6) | — | — | — | (0.11) | ||||||||||||||||||||||
Expense related to UOP Matters(7) | — | — | — | 0.23 | ||||||||||||||||||||||
Separation costs(8) | 0.97 | — | — | — | ||||||||||||||||||||||
Adjusted earnings per share of common stock—assuming dilution | $ | 8.01 | $ | 8.16 | $ | 7.10 | $ | 8.06 | ||||||||||||||||||
Less: EPS, attributable to spin-offs | 0.62 | — | — | — | ||||||||||||||||||||||
Adjusted earnings per share of common stock - assuming dilution, excluding spin-off impact | $ | 7.39 | $ | 8.16 | $ | 7.10 | $ | 8.06 |
| 2022 |
|
(3) Reconciliation of Segment Profit to Operating Income and Calculation of Segment Profit and Operating Income Margins
($M) | 2017 | 2019 | 2020 | |||||||||
Segment profit | $ | 7,690 |
| $ | 7,739 |
| $ | 6,665 |
| |||
Stock compensation expense(1) |
| (176 | ) |
| (153 | ) |
| (168 | ) | |||
Repositioning, Other(2,3) |
| (962 | ) |
| (598 | ) |
| (641 | ) | |||
Pension and other postretirement service costs(4) |
| (249 | ) |
| (137 | ) |
| (160 | ) | |||
|
|
|
|
|
| |||||||
Operating income | $ | 6,303 |
| $ | 6,851 |
| $ | 5,696 |
| |||
|
|
|
|
|
| |||||||
Segment profit | $ | 7,690 |
| $ | 7,739 |
| $ | 6,665 |
| |||
÷ Sales | $ | 40,534 |
| $ | 36,709 |
| $ | 32,637 |
| |||
|
|
|
|
|
| |||||||
Segment profit margin % |
| 19.0 | % |
| 21.1 | % |
| 20.4 | % | |||
|
|
|
|
|
| |||||||
Operating income | $ | 6,303 |
| $ | 6,851 |
| $ | 5,696 |
| |||
÷ Sales | $ | 40,534 |
| $ | 36,709 |
| $ | 32,637 |
| |||
|
|
|
|
|
| |||||||
Operating income margin % |
| 15.6 | % |
| 18.7 | % |
| 17.5 | % | |||
|
|
|
|
|
| |||||||
|
|
|
|
($M) | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||||||||||||||
Segment profit | $ | 8,190 | $ | 7,739 | $ | 6,665 | $ | 7,212 | ||||||||||||||||||||||||
Stock compensation expense(1) | (175) | (153) | (168) | (217) | ||||||||||||||||||||||||||||
Repositioning, Other(2,3) | (1,100) | (598) | (641) | (636) | ||||||||||||||||||||||||||||
Pension and other postretirement service costs(4) | (210) | (137) | (160) | (159) | ||||||||||||||||||||||||||||
Operating income | $ | 6,705 | $ | 6,851 | $ | 5,696 | $ | 6,200 | ||||||||||||||||||||||||
Segment profit | $ | 8,190 | $ | 7,739 | $ | 6,665 | $ | 7,212 | ||||||||||||||||||||||||
÷ Sales | $ | 41,802 | $ | 36,709 | $ | 32,637 | $ | 34,392 | ||||||||||||||||||||||||
Segment profit margin % | 19.6% | 21.1% | 20.4% | 21.0% | ||||||||||||||||||||||||||||
Operating income | $ | 6,705 | $ | 6,851 | $ | 5,696 | $ | 6,200 | ||||||||||||||||||||||||
÷ Sales | $ | 41,802 | $ | 36,709 | $ | 32,637 | $ | 34,392 | ||||||||||||||||||||||||
Operating income margin % | 16.0% | 18.7% | 17.5% | 18.0% |
($M) | 2017 | |||
Sales | $ | 40,534 |
| |
Spin-off impact(1) |
| (7,630 | ) | |
|
| |||
Sales excluding spin-off impact | $ | 32,904 |
| |
|
| |||
|
(5) Reconciliation of Adjusted Net Income
($M) | 2018 | 2019 | 2020 | |||||||||
Net income attributable to Honeywell | $ | 6,765 | $ | 6,143 | $ | 4,779 | ||||||
Separation costs, includes net tax impacts | 732 | — | — | |||||||||
Separation related tax adjustment | — | — | (186 | ) | ||||||||
Pension mark-to-market expense(1) | 28 | 94 | 33 | |||||||||
Impacts from U.S. Tax Reform | (1,494 | ) | (281 | ) | — | |||||||
Garrett related adjustment(2) | — | — | 427 | |||||||||
|
|
|
|
|
| |||||||
Adjusted net income attributable to Honeywell | $ | 6,031 | $ | 5,956 | $ | 5,053 | ||||||
|
|
|
|
|
| |||||||
|
|
|
|
|
(6) Reconciliation of Segment Profit to Operating Income and Calculation of Decremental Margin
($M) | 2Q19 | 3Q19 | 4Q19 | 2Q20 | 3Q20 | 4Q20 | ||||||||||||||||||
Sales | $ | 9,243 | $ | 9,086 | $ | 9,496 | $ | 7,477 | $ | 7,797 | $ | 8,900 | ||||||||||||
Segment profit | 1,970 | 1,928 | 2,032 | 1,385 | 1,553 | 1,879 | ||||||||||||||||||
Stock compensation expense(1) | (34 | ) | (37 | ) | (41 | ) | (34 | ) | (40 | ) | (50 | ) | ||||||||||||
Repositioning, Other(2,3) | (137 | ) | (109 | ) | (259 | ) | (295 | ) | (161 | ) | (111 | ) | ||||||||||||
Pension and other postretirement service costs(4) | (37 | ) | (30 | ) | (37 | ) | (38 | ) | (41 | ) | (42 | ) | ||||||||||||
Operating income | $ | 6,303 | $ | 6,851 | $ | 5,696 | $ | 6,303 | $ | 6,851 | $ | 5,696 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Year-over-year change in Segment Profit | $ | (585 | ) | $ | (375 | ) | $ | (153 | ) | |||||||||||||||
÷ Year-over-year change in Sales | $ | (1,766 | ) | $ | (1,289 | ) | $ | (596 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Decremental Margin | 33 | % | 29 | % | 26 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
|
|
|
We define segment profit as operating income, excluding stock compensation expense, pension and other postretirement service costs, and repositioning and other charges. We believe these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
(7) Reconciliation of Organic Sales % Change
1Q20 | 2Q20 | 3Q20 | 4Q20 | |||||||||||||
Reported sales % change | (5 | )% | (19 | )% | (14 | )% | (6 | )% | ||||||||
Less: Foreign currency translation | (1 | )% | (1 | )% | — | % | 1 | % | ||||||||
Less: Acquisitions, divestitures and other, net | — | % | — | % | — | % | — | % | ||||||||
|
|
|
|
|
|
|
| |||||||||
Organic sales % change | (4 | )% | (18 | )% | (14 | )% | (7 | )% | ||||||||
|
|
|
|
|
|
|
| |||||||||
1Q21 | 2Q21 | 3Q21 | 4Q21 | 2021 | |||||||||||||||||||||||||
Reported sales % change | —% | 18% | 9% | (3)% | 5% | ||||||||||||||||||||||||
Less: Foreign currency translation | 2% | 3% | 1% | (1)% | 1% | ||||||||||||||||||||||||
Less: Acquisitions, divestitures, and other, net | —% | —% | —% | —% | —% | ||||||||||||||||||||||||
Organic sales % change | (2)% | 15% | 8% | (2)% | 4% |
(8)
($M) | Twelve Months Ended December 31, 2021 | ||||||||||||||||||||||
Cash provided by operating activities | $ | 6,038 | |||||||||||||||||||||
Expenditures for property, plant and equipment | (895) | ||||||||||||||||||||||
Garrett cash receipts | 586 | ||||||||||||||||||||||
Free cash flow | 5,729 | ||||||||||||||||||||||
| |||||||||||||||||||||||
| $ | 6,038 | |||||||||||||||||||||
| $ | 34,392 | |||||||||||||||||||||
Operating cash flow margin % | 17.6 | % | |||||||||||||||||||||
Free cash flow | $ | 5,729 | |||||||||||||||||||||
÷ Net sales | $ | 34,392 | |||||||||||||||||||||
Free cash flow margin % | 16.7 | % |
Notice and Proxy Statement | 2022 | ||||||||||||
| ||||||||||||
113 |
($M) | 2018 | 2019 | 2020 | 2021 | ||||||||||||||||||||||
Net Income attributable to Honeywell | $ | 6,765 | $ | 6,143 | $ | 4,779 | $ | 5,542 | ||||||||||||||||||
Separation related tax adjustment | — | — | (186) | — | ||||||||||||||||||||||
Pension mark-to-market expense(1) | 28 | 94 | 33 | 30 | ||||||||||||||||||||||
Impacts of U.S. Tax Reform | (1,494) | (281) | — | — | ||||||||||||||||||||||
Garret related adjustment(2) | — | — | 427 | 7 | ||||||||||||||||||||||
Changes in fair value of equity related securities | — | — | — | (19) | ||||||||||||||||||||||
Gain on sale of retail footwear business | — | — | — | (76) | ||||||||||||||||||||||
Expense related to UOP Matters | — | — | — | 160 | ||||||||||||||||||||||
Separation Costs, includes net tax impacts | 732 | — | — | — | ||||||||||||||||||||||
Adjusted net income attributable to Honeywell | $ | 6,031 | $ | 5,956 | $ | 5,053 | $ | 5,644 |
($M) | 2020 | 2021 | |||||||||||||||
Net sales | $ | 32,637 | 34,392 | ||||||||||||||
Segment profit | $ | 6,665 | $ | 7,212 | |||||||||||||
Stock compensation expense(1) | (168) | (217) | |||||||||||||||
Repositioning, Other(2,3) | (641) | (636) | |||||||||||||||
Pension and other postretirement service costs(4) | (160) | (159) | |||||||||||||||
Operating income | $ | 5,696 | $ | 6,200 | |||||||||||||
Year-over-year change in Segment profit | $ | 547 | |||||||||||||||
÷ Year-over-year change in Net sales | $ | 1,755 | |||||||||||||||
Incremental Margin % | 31.2 | % |
| 2022 |
World’s Most Admired Companies
Fortune Magazine. 2006-2020
America’s Top 100 Most Reputable2006-2021
Forbes Magazine. 2018-2019
Canada’s Best Employers
Forbes Magazine. 2018
Most Innovative In-House Legal Team
Financial Times. 2018
Innovation in Managing Complexity and Scale
Financial Times. 2018
2015-2021
Corporate Ethics
Golden Peacock Award. 2018
Top Military Friendly Employer
G.I. Jobs Magazine. 2013-2018
Best Corporations for Veterans Business Enterprises
National Veteran Owned Business Association. 2017
Forbes Magazine. 2018
100 People Transforming Business, Que Dallara
Business Insider, 2020
Women Worth Watching
Diversity Journal. 2005, 2007, 2010-2019
Best for Vets: Employers
Military Times. 2017, 2019
Most Influential Black Corporate Directors, Robin L. Washington
Savoy Magazine. 2017
TECHNOLOGY AWARDS
World’s Most Innovative Companies
Fast Company. 2021
Top 100 Global Innovators
Clarivate Analytics. 2018
Clarivate Analytics. 2018
Global Top 50 Gold
IR Magazine. 2015, 2017
IR Magazine. 2015, 2017
Top 2018 Corporate Social Responsibility Influence Leaders
Assent Compliance. 2018
Voluntary Protection Program
OSHA and Industrial Commission of Arizona. 2018
Best Safety Organization
Ministry of Labor Thailand. 2018
CSR China Education Award
Central Committee of the Communist Youth League of China. 2018
Invest in Education
Junior Achievement Romania. 2018—2019
Hope Award
National Center for Missing and Exploited Children. 2018
Honeywell Educators at Space Academy. 2019
|
| ||
| ||
| ||
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
|
| ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
| ||||||||||||||||||||||||||
|
| |||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||
For more information www.honeywell.com |
Important Notice Regarding Availability of Proxy Materials: The 2021 Notice and Proxy Statement and 2020 Annual Report are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
D28532-P47941-Z78821
| ||||||||||||||
All rights reserved. |
FORM OF EMAIL MESSAGE REGARDING PROXY MATERIALS AND VOTING
Subject: Vote Your Shares Now: HONEYWELL INTERNATIONAL INC. Annual Meeting
|
Important proxy voting material is ready for your action.
This email represents the following share(s):
| ||||
| ||||
| ||||
| ||||
| ||||
|
| ||||||||||
| ||||||||||
|
|
For holders as of March 26, 2021