520 Lake Cook Road, Deerfield, Illinois 60015 NOTICE OF ANNUAL MEETING AND PROXY STATEMENT March Dear Fellow Stockholders: We are pleased to invite you to the such other business as may properly come before the Annual Meeting. Stockholders of record at the close of business on March YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE. This Notice of Annual Meeting and Proxy Statement and accompanying proxy are first being distributed on or about March Important Notice Regarding the Availability of Proxy Materials for the This Notice of Annual Meeting and Proxy Statement and the Annual Report on Form10-K for the fiscal year ended December 31, PROXY SUMMARY Location* Tuesday, May 16, 2023 at 8:00 a.m. (CDT) 500 Corporate Center Starlight Cafe entrance 520 Lake Cook Road, Deerfield, Illinois Agenda and This Proxy Summary highlights selected information in this Proxy Statement Proposal Board Recommendation 1 Election of three Class III Directors Nicholas I. Fink, A.D. David Mackay and Stephanie Pugliese FOR each Nominee 2 Ratify the appointment of the independent auditor Pricewaterhouse Coopers for 2023 3 Advisory vote to approve named executive officer compensation 4 Approval of an amendment to the Restated Certificate of Incorporation to provide for exculpation of officers See pages 59-63 for instructions on how to vote your shares. BUSINESS HIGHLIGHTS Our 2022 Transformation 2022 was a transformative year for our Company. It was also a challenging year for our Company and the market for our products. In the second half of 2022, the market experienced a sudden slow down, driven by higher interest rates and affordability concerns, which We completed the separation of MasterBrand, Inc., our cabinets business (“MasterBrand”), via a tax-free spin-off (the “Separation”) well-ahead of our timing expectations. We expect that the Separation will unlock greater shareholder value for both companies by allowing us to focus on and invest in our unique growth opportunities. 1 PROXY SUMMARY (CONTINUED) We rebranded our Company with a new identity to reflect our evolution as a business focused on driving accelerated growth in our categories through brand and innovation. Our name was changed to Fortune Brands Innovations, Inc. and our NYSE ticker symbol is now FBIN. We reorganized the Company from a decentralized structure to a more aligned operating model to prioritize activities that are core to brand, innovation, and channel. This change also placed our global supply chain resources under one leadership team to fully leverage the scale and execution of our total business. We acquired Solar Innovations, a leading producer of wide-opening exterior door systems and outdoor enclosures, further expanding our outdoor living product portfolio; Aqualisa, a UK leading manufacturer of smart digital shower products, strengthening our connected product offerings; and we finalized the Flo Technologies acquisition after our multi-year phase-in. We preserved margins in the face of a challenging macroeconomic environment. Amidst a challenging external macro environment that negatively impacted our results, we believe that our teams’ strong performance executing our transformative initiatives, while reducing cost and increasing efficiency, has positioned the Company for long-term growth. Our 2022 results were: Attributable to Fortune Brands (inclusive of Cabinets). Please refer to Appendix A for a reconciliation of earnings per share on a before charges/gains basis to GAAP earnings per share. The New Fortune Brands: Fortune Brands Innovations, Inc. Fortune Brands Innovations is powered by our brands, innovation, and service that provides a unique value to our customers. Following the Separation, our product portfolio is focused on Water, Outdoors and Security, and is now more heavily weighted toward smaller ticket repair and remodel items and less exposed to market cyclicality. Our focus on innovative products and operations are drivers of our growth, productivity enhancement, and margin expansion. Our category management expertise and strong customer relationships enables us to provide greater consistency and pricing discipline. We believe the Fortune Brands Advantage, a set of unifying capabilities leveraged across the Company, enables us to drive category management performance, simplify workstreams to better enable efficiencies, reduce costs by leveraging our global supply chain and enable the advancement of our digital strategy and capabilities. 2 PROXY SUMMARY (CONTINUED) We continue to be driven by our culture of doing the right thing, as evidenced by our safety records, Environmental, Social and Governance (“ESG”) programs and our focus on innovating products that help address some of the world’s most pressing sustainability and safety issues. BOARD OF DIRECTORS Other Public Company Boards Nicholas I. Fink Chief Executive Officer of Fortune Brands Stephanie Pugliese Former President, Americas, Under Armour, Inc. Audit Nominating, Environmental, Social & Governance A. D. David Mackay Former Chairman and Chief Executive Officer, Kellogg Company Audit Compensation (Chair) SUCCESSION AND REFRESHMENT In accordance with the Board’s retirement age policy, the Board did not nominate Mr. Thomas to stand for re-election at the Annual Meeting. In anticipation of Mr. Thomas’ retirement from the Board, our Board welcomed Stephanie Pugliese as a Class III director in March 2023, following a thoughtful and comprehensive board succession planning process led by our Nominating, Environmental, Social & Governance Committee (the “NESG Committee”). Ms. Pugliese’s experience as a commercial and strategic business leader with oversight of digital and e-commerce businesses at Under Armour, Inc. and Duluth Holdings, Inc. brings valuable perspective to our Board. Ms. Pugliese is serving on our Audit Committee and NESG Committee. The addition of Ms. Pugliese to our Board increases the Board’s diversity. Following Mr. Thomas’ retirement from our Board in May 2023, our Board composition will be: 3 PROXY SUMMARY (CONTINUED) CORPORATE GOVERNANCE HIGHLIGHTS Our Board is committed to maintaining a strong corporate governance program designed to promote the long-term interests of our stockholders and strengthen Board and management accountability. As a company, we are committed to core values that reflect a strong culture of integrity and accountability. These practices are reflected in our corporate governance policies, which are described in more detail on pages 12-20 of the Proxy Statement and highlighted below: Independent Chair of the Board Regular executive sessions of non-management directors Proxy access bylaw allows for 3% stockholders to nominate the greater of two directors or 20% of the board Five new Board members added since 2019 demonstrating the Board’s commitment to Board refreshment and succession planning Board oversight of ESG programs and related risks and publication of ESG report Annual Board and committee evaluations ENVIRONMENTAL, SOCIAL AND GOVERNANCE HIGHLIGHTS Our Board of Directors is committed to overseeing our ESG initiatives throughout Fortune Brands. We dedicate significant resources toward developing innovative products that positively impact the lives of our consumers, and to produce these products using increasingly sustainable methods. We are committed to being a good corporate citizen by ensuring high safety standards for our associates, fostering an inclusive culture and giving back to our larger communities. We believe that the high standards by which we conduct our business will help us to build on our strengths and continually improve how we measure and monitor our progress on ESG-related initiatives. Our philosophy is to have a holistic ESG program, integrated throughout our businesses, that focuses on what matters to our Company and its stakeholders, with the goal of continual improvement. Safety Safety is integral to Company culture and is a top priority, as reflected in our goal of zero safety incidents and through our efforts to create an injury-free workplace. Diversity, Equity& Inclusion (“DEI”)We continued to advance our DEI strategy and initiatives during 2022. Recent additions to the Company’s leadership team shows the Board’s and management’s commitment to increasing representation of professionals of color and women. In addition, we expanded our employee resource groups and continued to offer unconscious bias learning programs throughout the organization during 2022. We are committed to making employment data publicly available to our stakeholders and will make our EE0-1 report available on our website later this year and following our next filing with the U.S. Equal Employment Opportunity Commission. 4 PROXY SUMMARY (CONTINUED) Please see the resources available on our website at https://www.fbin.com/corporate-responsibility/esg-reporting. Our 2022 ESG Report will be available on our website in the second quarter of 2023. Information provided on the Company’s website is not incorporated by reference into this Proxy Statement. COMPENSATION HIGHLIGHTS PAYFOR PERFORMANCEOur executive compensation program is designed to reward named executive officers (“NEOs”) for the achievement of both strategic and operational goals that support the creation of long-term stockholder value. The vast majority of each NEO’s annual target compensation is at-risk because most compensation paid to our NEOs is dependent upon Company performance and/or stock price. In 2022: 88% of the CEO’s total target compensation was pay-at-risk; 50% of the annual equity awards granted to NEOs in 2022 were granted in the form of performance share awards (“PSAs”) with vesting based on three-year performance targets. Over the past five years, our stockholders have overwhelmingly supported our executive compensation program, with an average approval of COMPENSATION PRACTICESThe Compensation Discussion & Analysis (“CD&A”) section beginning on page 23 includes additional detail on the following compensation highlights: Prohibition on hedging and pledging of Company stock No single trigger change in control severance arrangements No excise tax gross ups 5 PROPOSAL 1 – ELECTIONOF DIRECTORS Summary of Qualification of Directors The Board • Considerable amount of education • Excellent business judgment • Extensive executive leadership experience or business management experience • Strong commitment to the Company’s goal of maximizing stockholder value • Knowledge about issues affecting, or that may in the future affect, the Company • High level of integrity and ethics Specific Qualifications, Expertise and • Consumer products expertise • Financial and/or accounting expertise • Public company experience as a chief executive, chief operating or chief financial officer • Public company board experience • Diversity of skill, background, race, gender and viewpoint Election of The Board currently consists of Each of the nominees has consented to be named as a nominee and to serve as a director, if elected. If any of them should become unavailable to serve as a director (which is not now expected), the Board may designate a substitute nominee. In that case, the persons named in the enclosed proxy card will vote for the substitute nominee designated by the Board. Shares cannot be voted for more than the number of nominees proposed for re-election. The names of the nominees (Class III) and the current Class 6 Name Present positions and offices with the Company, principal NOMINEES FOR DIRECTOR – CLASS I DIRECTORS – TERM EXPIRING 2021 Ann F. Hackett Ms. Hackett has extensive experience in leading companies that provide strategic, organizational and human resource consulting services to boards of directors and senior management teams. She has experience leading change initiatives, risk management, talent management and succession planning and in creating performance- based compensation programs, as well as significant international experience and technology experience. Ms. Hackett also has extensive board experience and currently serves as the lead independent director of Capital One Financial Corporation. John G. Morikis Ronald V. Waters, III PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED) 2023 NOMINEES FOR ELECTION - CLASS III DIRECTORS – TERM EXPIRING 2026 Nicholas I. Fink Director since: 2020 Age: 48 Committees: Executive Biography: Chief Executive Officer of Fortune Brands Innovations, Inc. since January 2020; President & Chief Operating Officer of Fortune Brands from March 2019 to January 2020; President of Fortune Brands Global Plumbing Group from August 2016 to March 2019. Current Public Company Boards: Constellation Brands, Inc. Skills & Qualifications Mr. Fink’s leadership as Chief Executive Officer of the Company and his significant international and consumer brand and business operating experience, as well as his mergers and acquisitions and strategy expertise provide him with intimate knowledge of our operations, the opportunities for growth and the challenges faced by the Company. He joined the Company as Senior Vice President, Global Growth & Corporate Development in June 2015 and held several leadership positions within the Company’s operations prior to being named Chief Executive Officer in 2020. Mr. Fink has successfully navigated the Company and its leaders through the COVID-19 pandemic and continues to transform our Company for future growth. Prior to joining Fortune Brands, Mr. Fink held key leadership positions at Beam Suntory, Inc., including President of Asia Pacific/South America of Beam Suntory, Inc., a global spirits company. A.D. David Mackay Director since: 2011 Independent Age: 67 Committees: Audit, Compensation (Chair); Executive Biography: Retired since January 2011; President and Chief Executive Officer of Kellogg Company, a packaged foods manufacturer, prior thereto. Current Public Company Boards: The Clorox Company Skills & Qualifications Mr. Mackay held various key executive positions with Kellogg Company including Chief Executive Officer and Chief Operating Officer, bringing to our Board the perspective of a leader who faced a similar set of external economic, social and governance issues to those that face our Company. Mr. Mackay also has significant international business experience, as well as extensive board experience. His prior Board experience serving as both an executive Chairman (Kelllogg Co.) and non-executive Chairman (Beam, Inc.) on public company boards and his previous leadership roles provide him with expertise in executive compensation and succession planning matters. Mr. Mackay also serves on the boards of several non-profit organizations. 7 PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED) Stephanie Pugliese Director since: 2023 Independent Age: 52 Committees: Audit; NESG Biography: Former President, Americas of Under Armour, Inc., a global sportswear brand, from September 2019 to March 2023; President and Chief Executive Officer of Duluth Holdings, Inc., a U.S. retailer of casual wear, workwear, and accessories from November 2015 to September 2019. Former Public Company Boards: Duluth Holdings, Inc. Skills & Qualifications Ms. Pugliese held various key executive positions with Under Armour, Inc. and Duluth Holdings, Inc., bringing to our Board the perspective of a leader who has had international commercial, operational, and strategic responsibilities including oversight for digital and e-commerce businesses and marketing. She has served as a public company chief executive officer and board member of Duluth Holdings, Inc. The Board of Directors recommends that you vote FOR the election of each nominee named above. CLASS I DIRECTORS – TERM EXPIRING 2024 Name Present positions and offices with the Company, principal CLASS II DIRECTORS – TERM EXPIRING 2019 Susan S. Kilsby Retired since May 2014; Senior Advisor at Credit Suisse AG, an investment banking firm, from 2009 to May 2014; Managing Director of European Mergers and Acquisitions of Credit Suisse prior thereto. Currently also a director of Shire Plc, BBA Aviation PLC and Goldman Sachs International.Formerly a director of Keurig Green Mountain, Inc., and Coca-Cola HBC AG. Christopher J. Klein Ann Fritz Hackett Director since: 2011 Independent Age: 69 Committees: Compensation; NESG Biography: Retired since January 2020. Strategy Consulting Partner and Co-founder of Personal Pathways, LLC, a company providing web-based enterprise collaboration platforms, from 2015 through January 2020. Prior to her role at Personal Pathways, she was President of Horizon Consulting Group, LLC, a strategic and human resource consulting firm founded by Ms. Hackett in 1996. Current Public Company Boards: Capital One Financial Corporation and MasterBrand, Inc. Skills & Qualifications: Ms. Hackett has extensive experience in leading companies that provided strategic, organizational and human resource consulting services to boards of directors and senior management teams. She has experience leading change initiatives, risk management, talent management and succession planning and in creating performance-based compensation programs, as well as significant international experience and technology experience. Ms. Hackett also has extensive international experience, including spending years working in the United Kingdom, Africa and Switzerland. Ms. Hackett also has extensive board experience, including serving as chair of two other public company compensation committees and three other public company governance committees. She also serves as the lead independent director of Capital One Financial Corporation. Name Present positions and offices with the Company, principal A.D. David Mackay Retired since January 2011; President and Chief Executive Officer of Kellogg Company, a packaged foods manufacturer, prior thereto. Currently also a director of The Clorox Company. Formerly a director of Keurig Green Mountain, Inc., McGrath Limited, Woolworths Limited and Beam Inc. David M. Thomas Norman H. Wesley Retired since October 2008; Chairman of the Board and Chief Executive Officer of Fortune Brands, Inc. prior thereto. Currently also a director of Acuity Brands, Inc. and Acushnet Holdings Corp. Formerly a director of Keurig Green Mountain, Inc. and ACCO Brands Corporation. PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED) John G. Morikis Director since: 2011 Independent Age: 59 Committees: Audit; Compensation Biography: Chairman since January 2017 and Chief Executive Officer since January 2016 of The Sherwin-Williams Company, a manufacturer of paint and coatings products. President and Chief Operating Officer of The Sherwin-Williams Company prior thereto. Current Public Company Boards: The Sherwin-Williams Company Skills & Qualifications: Mr. Morikis’ experience as a Chief Executive Officer and a Chief Operating Officer of The Sherwin-Williams Company, and his more than 30 years of experience with a consumer home products company, brings to our Board the perspective of a leader who faces similar external economic issues that face our Company. His experience actively serving as Chairman and Chief Executive Officer of The Sherwin-Williams Company also provides him with valuable insight into board operations and provides him with expertise into accounting, executive compensation and succession planning and ESG matters. Mr. Morikis also serves on the board of the Joint Center for Housing Studies of Harvard University and other non-profit organizations. Jeffery S. Perry Director since: 2020 Independent Age: 57 Committees: Audit; NESG Biography: Founder and CEO of Lead Mandates LLC, a business and leadership advisory firm; Retired since October 2020 from Ernst & Young LLP, a leading global professional services firm, where he served as EY Global Client Service Partner for major consumer product accounts from April 2014 to October 2020 and as Americas Operational Transaction Services Practice Leader prior thereto. Current Public Company and Registered Investment Company Boards: MasterBrand, Inc. and Equitable Funds Skills & Qualifications: Mr. Perry has extensive experience as a strategic, operational and financial advisor helping boards of directors and management teams. He held several senior positions with Ernst & Young and A.T. Kearney Inc. and is the founder and Chief Executive Officer of Lead Mandates LLC. Mr. Perry brings to our Board relevant experience and perspectives in mergers, acquisitions, integrations, divestitures, business transformations and consumer products. He serves as chair of the NESG Committee of MasterBrand, Inc. and as a Board member of the Chicago Chapter of the National Association of Corporate Directors and other non-profit organizations. 9 PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED) Ronald V. Waters, III Director since: 2011 Independent Age: 70 Committees: Audit (Chair); NESG; Executive Biography: Retired since May 2010; President and Chief Executive Officer of LoJack Corporation, a provider of tracking and recovery systems, prior thereto. Current Public Company Boards: Paylocity Holding Corporation Former Public Company Boards: HNI Corporation Skills & Qualifications: Mr. Waters has considerable executive leadership and financial management experience and brings significant financial and accounting expertise to our Board. He served as Chief Executive Officer and Chief Operating Officer at LoJack Corporation, a premier technology company, and as Chief Operating Officer and Chief Financial Officer at Wm. Wrigley Jr. Company, a leading confectionary manufacturing company. Mr. Waters also has extensive board experience, including by serving on the compensation committee of Paylocity Holding Corporation and the audit committee of HNI Corporation and Paylocity Holding Corporation. CLASS II DIRECTORS – TERM EXPIRING 2025 Susan S. Kilsby Director since: 2015 Independent, Non-Executive Chair Age: 64 Committees: Compensation; NESG; Executive (Chair) Biography: Retired since May 2014; Senior Advisor at Credit Suisse AG, an investment banking firm, prior thereto. Current Public Company Boards: Diageo plc and Unilever plc Former Public Company Boards: Shire plc, Goldman Sachs International, BBA Aviation plc, BHP Group plc and BHP Limited Skills & Qualifications Ms. Kilsby has a distinguished global career in investment banking and brings extensive mergers and acquisitions, finance and international business experience to the Board. In addition to serving as a Senior Advisor, Ms. Kilsby also served as Managing Director of European Mergers and Acquisitions at Credit Suisse. She also held a variety of senior positions with The First Boston Corporation, Bankers Trust and Barclays de Zoete Wedd. Ms. Kilsby also has extensive board experience, including serving as Chair of Shire plc for five years. She also serves on multiple non-profit boards and as a member of the Takeover Panel, a UK independent body that regulates takeovers in the United Kingdom for the purpose of ensuring fair treatment for shareholders and an orderly framework for takeover bids. Her extensive history of board and committee service provides her with expertise in board oversight and function of its committees. 10 PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED) Amit Banati Director since: 2020 Independent Age: 54 Committees: Audit; Compensation Biography: Vice Chair and Chief Financial Officer of Kellogg Company, a packaged foods manufacturer, from January 2023 to Present; Senior Vice President and Chief Financial Officer of Kellogg Company from July 2019 to January 2023; President - Asia Pacific, Middle East, Africa of Kellogg Company from March 2012 to July 2019. Skills & Qualifications Mr. Banati has extensive executive leadership, operations and financial management experience in leading consumer products companies, both domestically and internationally, working extensively across the Asia Pacific region, particularly in Australia, India, China, Japan, Korea, Southeast Asia and Singapore. He brings to our Board the perspective of a leader with extensive international experience in the consumer products industry. As the Chief Financial Officer of Kellogg Company, he also brings significant financial and accounting expertise to our Board. Irial Finan Director since: 2019 Independent Age: 65 Committees: Compensation; NESG Biography: Retired since April 2018; Consultant to the CEO of The Coca-Cola Company, a beverage company, from January 2018 to March 2018; Executive Vice President of The Coca-Cola Company and President of Coca-Cola Bottling Investments Group, a bottling operations company, from August 2004 to December 2017. Current Public Company Boards: Smurfit Kappa Group plc Former Public Company Boards: Coca-Cola Bottlers Japan Holdings, Inc. and Coca-Cola European Partners plc Skills & Qualifications Mr. Finan’s experience as an Executive Vice President of The Coca-Cola Company and President of its worldwide bottling operations, as well of his years of international consumer products experience, brings to our Board the perspective of a leader with extensive international operational leadership experience in the consumer products industry. Mr. Finan has extensive board experience, including serving as Chair of Smurfit Kappa Group plc. He also serves on multiple non-profit boards. 11 CORPORATE GOVERNANCE Fortune Brands is committed to maintaining strong corporate governance practices that are good for our stockholders and our Corporate Governance Principles The Board The Company’s Corporate Governance Principles provide that a majority of the members of the Board shall be independent directors. New York Stock Exchange requirements, as well as the Company’s committee charters, require that each member of the Audit, Compensation and NESG Committees be independent. The Board applies Applying that definition, Messrs. Banati, Finan, Mackay, Morikis, Perry, Thomas, Hackett, Kilsby and Policies with Respect to Transactions with Related Persons The Board The Board has also established a Conflicts of Interest Committee (comprised of management) which is responsible for administering, interpreting and applying the Company’s Conflicts of Interest Policy, which describes the types of relationships that may constitute a conflict of interest with the Company. Under the Conflicts of Interest Policy, directors and executive officers are responsible for reporting any potential related person transaction (as defined in Item 404 of RegulationS-K) to the Conflicts of Interest Committee in advance of commencing a potential transaction. The Conflicts of Interest Committee will present to the Audit Committee any potential related party transaction. The Audit Committee will evaluate the transaction, determine whether the interest of the related person is material and approve or ratify, as the case may be, the transaction. In addition, the Company’s executive officers and directors annually complete a questionnaire on which they are required to disclose any related person transactions and potential conflicts of interest. The General Counsel reviews the responses to the questionnaires, and, if a related person transaction is reported by a director or executive officer, submits the transaction for review by the Audit Committee. The Conflicts of Interest Committee also reviews potential conflicts of interest and reports findings involving any director of the Company to the 12 CORPORATE GOVERNANCE (CONTINUED) The Certain Relationships and Related Transactions Since January 1, Anti-Hedging and Anti-Pledging Policy The Company has a policy prohibiting directors and executives from hedging or pledging Company stock, including Company stock held indirectly, and from engaging in any derivative transactions designed to offset the decrease or increase in the market value of the Company’s stock. Board Refreshment and Succession The Board believes that Board refreshment and director succession are important to ensuring that Board composition is aligned with the needs of the Company and the Board. The Board also believes that continuity is critical to the effectiveness of the Board as a group over time and allows directors to develop a deeper understanding of the Company. The NESG Committee assesses the composition of the Board and aims to strike a balance between Board members with longer term service and newer members who bring a fresh perspective. As part of the Board’s succession planning process and in anticipation of Mr. Thomas’ retirement from the Board following the Annual Meeting, the Board appointed Stephanie Pugliese as a Class III director. The Board’s strong commitment to succession and refreshment have been demonstrated over the last four years by adding five new directors. The majority of the director appointments over this period of time also demonstrates the Board’s commitment to increasing racial and gender diversity. Director Nomination Process The When identifying director candidates, the With respect to 13 CORPORATE GOVERNANCE (CONTINUED) In connection with future director elections, or any time there is a vacancy on the Board, It is the The nomination process is designed to ensure that the Board and Committee Evaluation Process To increase the effectiveness and provide an opportunity to improve processes and effectiveness, the NESG and the Chair of the Board facilitate an annual evaluation of the Board and its committees. The evaluation typically includes both an interview of each director relating to topics including the function and culture of the Board and its committee’s and performance, the Board’s oversight, responsibilities and resources. In 2022, the Chair of the Board led this process, the results of which were discussed with the Board. Director Orientation and Continuing Education The Board is briefed regularly on a variety of topics such as industry updates, corporate governance developments, the Company’s regulatory environment, applicable federal securities and state corporate laws, financial principles and standard accounting procedures. In addition, the Corporate Governance Principles provide for the Company to make external continuing education opportunities available to directors and reimburse costs incurred while furthering their education. New directors participate in comprehensive orientation sessions that are designed to familiarize them with the Company’s strategic plans, operations, financial information and governance, among other relevant topics. This orientation program is considered an essential part of the director onboarding process. New director orientation is tailored to complement the background of the new director. These activities are designed to ensure that the Board remains knowledgeable about the most important issues affecting our Company and its businesses. In 2022, several directors participated in external continuing education focused on a variety of topics, including corporate governance, ESG developments, leadership succession planning, the lead director function, audit committee functions, and enterprise risk management and innovation. 14 CORPORATE GOVERNANCE (CONTINUED) Communication with the Board The Board and management encourage communication from the Company’s stockholders. Stockholders who wish to communicate with the Company’s management should direct their communication to the Chief Executive Officer or the Secretary of Fortune Brands Illinois 60015. Stockholders, or other interested parties, who wish to communicate with thenon-management directors or any individual director should direct their communication c/o the Secretary at the address above. The Secretary will forward communications intended for the Board to the Chairman of the Board, or, if intended for an individual director, to that director. If multiple communications are received on a similar topic, the Secretary may, in his or her discretion, forward only representative correspondence. Any communications that are abusive, in bad taste or present safety or security concerns may be handled differently. The Board does not believe that a single leadership structure is right at all times, so the Board periodically reviews its leadership structure to determine, based on the circumstances at the time, whether other leadership structures might be appropriate for the Company. The Board has been and remains committed to maintaining strong corporate governance practices and appropriate independent oversight of management. Pursuant to the Company’s Corporate Governance Principles,non-management directors of the Board are required to meet on a regularly scheduled basis without the presence of The responsibility for theday-to-day management of risks lies with the Company’s management team; however, the Board has an active role, as a whole and also at the committee level, in overseeing the strategy and process for managing the Company’s risks. 15 CORPORATE GOVERNANCE (CONTINUED) assesses and ranks these risks according to the likelihood of occurrence and the potential monetary impact. It also assesses the The The While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about all of the risks described above. The Board’s assignment of responsibility for the oversight of specific risks to its committees enables the entire Board, under the leadership of the The Compensation Committee’s compensation consultant, Willis Towers Watson (“WTW”) conducts an annual assessment of the risks associated with the compensation policies and practices used to compensate the Company’s executives and reports on the assessment to the Compensation Committee. In 16 CORPORATE GOVERNANCE (CONTINUED) The Company uses multiple and diverse performance metrics in incentive plans; The upside on payout potential is capped for both short-term and long-term incentives; The Company utilizes multiple long-term incentive vehicles, with PSAs The majority of an individual’s total compensation mix is not derived from a single component of compensation; and The Company maintains stock ownership guidelines, a policy prohibiting hedging and pledging of Company stock and a formal clawback policy. As described in our Pursuant to the Company’s Corporate Governance Principles, all directors are encouraged to attend the Annual Meeting of Stockholders. All of the Company’s then-serving directors attended our 2022 Annual Stockholder Meeting. Board Committees The Board has established an Audit Committee, a Compensation Committee, an Executive Committee and Audit Compensation Executive NESG Amit Banati Irial Finan Nicholas I. Fink Ann F. Hackett Susan S. Kilsby A. D. David Mackay John G. Morikis Jeffery S. Perry David M. Thomas Ronald V. Waters, III An “X” indicates membership on the committee. A “C” indicates that the director serves as the chair of the committee. 17 CORPORATE GOVERNANCE (CONTINUED) Audit Committee The Audit Committee’s primary function is to assist the Board in overseeing the (i) integrity of the Company’s financial statements, the financial reporting process and the Company’s system of internal controls; (ii) the Company’s compliance with legal and regulatory requirements; (iii) independence and qualifications of the Company’s external auditors; (iv) performance of the Company’s external and internal auditors; and (v) the Company’s enterprise risk management Each member of the Audit Committee (Messrs. Banati, Mackay, Morikis, Perry, Thomas and Waters and The Compensation Committee’s primary function is to assist the Board in attracting and retaining high quality leadership by (i) developing and critically reviewing the Company’s executive compensation program design and pay philosophy; and (ii) setting the compensation of the Company’s executive officers As required by its charter, each member of the Compensation Committee (Messrs. Banati, Finan, Mackay Compensation Committee Interlocks and Insider Participation None of the members of the Compensation Committee has (i) served as one of the Company’s officers or employees, or (ii) had a relationship requiring disclosure under Item 404 of RegulationS-K. Compensation Committee Procedures The Compensation Committee directs management to prepare financial data to be used by the Compensation Committee in determining executive compensation. In addition, members of the Company’s human resources department assist in the preparation of executive compensation tally sheets and historical information describing compensation paid to executives, program design and plan provisions, and the Compensation Committee’s independent consultant provides market data for use in determining executive compensation. The Compensation Committee is presented with recommendations from management and from the Committee’s independent compensation consultant as to the level and type of compensation The Chief Executive Officer attends meetings of the Compensation Committee, except for portions of meetings where his performance or compensation is being discussed. The Chief Executive Officer’s feedback 18 CORPORATE GOVERNANCE (CONTINUED) Compensation Committee Consultant WTW has served as the Compensation Committee’s outside compensation consultant since 2020. In 2022, WTW received fees of approximately $586,000 for executive compensation-related services provided to the Compensation Committee. WTW also provided certain human capital, benefits and corporate risk and brokering services to the Company for which WTW received approximately $1.28 million. The Compensation Committee Made recommendations as to best practices for structuring executive pay arrangements and executive compensation (including the amount and form of compensation) consistent with the Company’s business needs, pay philosophy, market trends and latest legal, regulatory and governance considerations; Performed an assessment of the Company’s compensation peers; Made recommendations as to non-employee director and executive compensation best practices, pay arrangements, short and long term incentive program design, equity compensation and conversion and compensation peer group decisions relating to the Separation and the Company’s reorganization; Provided market data (including compiling compensation data and related performance data) as background for decisions regarding the compensation of the Chief Executive Officer and other executive officers; Performed an assessment of risks associated with the Company’s Attended Compensation Committee meetings (including executive sessions without the presence of management) and summarized alternatives for compensation arrangements that may have been considered in formulating final recommendations, as well as the consultant’s rationale for supporting or opposing management’s proposals. Nominating, Environmental, Social and The As required by its charter, each member of the 19 CORPORATE GOVERNANCE (CONTINUED) Other Corporate Governance Resources The Company’s Corporate Governance Principles, the Company’s Code of Business Conduct and Ethics and the Company’s Code of Ethics for Senior Financial 20 DIRECTOR COMPENSATION Fortune Brands is committed to attracting and retaining qualified and experienced directors Compensation Element* Compensation Amount Cash Retainer $100,000 Equity Retainer** $145,000 in Company Common stock Committee Chair Fee $15,000 for service as Chair of the Audit Committee, Compensation Committee or the NESG Committee Committee Membership Fee $7,500 for service on the Audit Committee, Compensation Committee or the NESG Committee Board Chair Fee $200,000 Stock Ownership Guidelines*** Ownership of common stock equivalent to five times the annual cash retainer within five years of joining the Board Cash compensation elements are pro-rated to reflect the portion of the year the director served on the Board or committee, or as Chair of a committee. Directors may elect to defer receipt of their annual stock awards until the January following the year in which the individual ceases serving as a director of the Company. All of our directors currently meet the multiple or fall within the five-year time period allowed to meet the multiple under the Stock Ownership Guidelines. No changes were made to the compensation program during 2022. In May Due to In connection with the Separation, Ms. Hackett was credited with one notional share of MasterBrand stock Director Stock Ownership Guidelines To further align the Board’s interests with those of our stockholders, the Board maintains Stock Ownership Guidelines fornon-employee directors. The guidelines encouragenon-employee directors to own Company 21 DIRECTOR COMPENSATION (CONTINUED) minor children sharing the same home and any trust in which the director is a trustee with voting and/or Fees Earned or Paid in Cash ($) Stock Awards ($) (1) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($)(2) Total ($) Amit Banati $115,000 $144,996 n/a n/a n/a $5,750 $265,746 Irial Finan $115,000 $144,996 n/a n/a n/a $ 750 $260,746 Ann F. Hackett $115,000 $144,996 n/a n/a n/a $1,300 $261,296 Susan S. Kilsby $315,000 $144,996 n/a n/a n/a $ 812 $460,808 A.D. David Mackay $130,000 $144,996 n/a n/a n/a $ 750 $275,746 John G. Morikis $115,000 $144,996 n/a n/a n/a $5,750 $265,746 Jeffery S. Perry $115,000 $144,996 n/a n/a n/a $5,750 $265,746 David M. Thomas $130,000 $144,996 n/a n/a n/a $5,750 $280,746 Ronald V. Waters $130,000 $144,996 n/a n/a n/a $5,750 $280,746 * Although Mr. Included in this column are premiums paid for group life insurance coverage and the Company’s match on gifts paid by the director to charitable organizations, both of which are generally available to Company employees, and costs associated with the Company’s COMPENSATION DISCUSSIONAND ANALYSIS This Mr. Hallinan This CD&A is divided into the following Section Page Attributable to 23 COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) In connection with the Separation, equity awards were adjusted to preserve the intrinsic value of the awards held by the MasterBrand, with his unvested Fortune Brands PSAs converting into MasterBrand RSUs The Compensation Committee All references to metrics used to determine incentive compensation are shown in this CD&A on an unaudited and before charges/gains basis. See Appendix A for definitions and a description of the methodology of these non-GAAP measures used to determine incentive compensation. 24 COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) 2022 NEO Annual Total Target Compensation The following chart summarizes annual total target compensation awarded to each NEO in Christopher J. Klein Patrick D. Hallinan (3) David M. Randich Nicholas I. Fink Robert K. Biggart E. Lee Wyatt, Jr. 2022 Annual Base Salary(1) 2022 Long- Award Target Value(2) 2022 Total Target Compensation Nicholas I. Fink $1,200,000 $1,560,000 $7,150,000 $9,910,000 Patrick D. Hallinan $700,000 $630,000 $2,000,000 $3,330,000 Cheri M. Phyfer $725,000 $582,978 $1,700,000 $3,007,978 Sheri R. Grissom $505,000 $353,500 $900,000 $1,758,500 Hiranda S. Donoghue $500,000 $350,000 $900,000 $1,750,000 R. David Banyard, Jr. $755,000 $641,750 $2,225,000 $3,621,750 Brett E. Finley $620,000 $496,000 $1,475,000 $2,591,000 The amounts listed in this column reflect annual base salary Includes the value of the annual target incentive equity awards, expressed as the aggregate grant date fair value of PSAs (at target), stock options and RSUs, as determined using the assumptions found in note 13 to the consolidated financial statement contained in the Company’s Annual Report on Form10-K for the year ended December 31, RESULTS OF THE 2022 SAY ON PAY VOTE The Compensation Committee and Board value the input of our stockholders. 92.2% of the votes cast at our 2022 Annual Stockholder Meeting were in support of the Company’s executive compensation program. Over the past five years, our stockholders have overwhelmingly supported our executive compensation program, with an average approval of approximately 93% of the votes cast for 25 COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) PHILOSOPHY AND PROCESS FOR AWARDING NEO COMPENSATION Philosophy of the Executive Compensation Program Our executive compensation program is designed to reward NEOs for the achievement of both short-term and long-term financial, strategic and operational goals that lead to the creation of long-term stockholder 2022 Compensation Peer Group and Market Data • Allegion • A.O. Smith Corporation • Ball Corp. • Borgwarner Inc. • Dover Corp. • Owens Corning • JELD-WEN Holding, Inc. • Leggett & Platt, Incorporated FORTUNE BRANDS vs. PEER GROUP (1) (1) Reflects 2021 fiscal year-end results, which were The Compensation Committee believes that compensation decisions are complex and require a deliberate review of Company performance, peer compensation levels, Committee generally strives to set NEO compensation around the 50th percentile of the market data. The Compensation Committee may, however, determine that COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) 2023 Compensation Peer Group and Market Data In 2022, the Compensation Committee • Allegion plc • A.O. Smith Corporation • ADT Inc. • Church & Dwight Co., Inc. • Leggett & Platt, Incorporated • Lennox International Inc. • Masco Corporation Evaluating NEO Performance All NEOs undergo an annual performance appraisal. For the evaluation of our CEO, the Board Maintaining Best Practices The Compensation Committee maintains policies to protect the interests of our stockholders and What We Do ✓ ✓ ✓ ✓ ✓ Double-Trigger in Change in ControlSeverance benefits are payable upon a change in control only if there is also a qualifying termination of employment. Our equity award agreements also include double-trigger provisions. ✓ ✓ Clawback PolicyThe Company may recover all or part of annual cash incentives and equity incentive compensation under certain circumstances. ✓ 27 COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) What We Don’t Do ✘ No Employment ContractsNEOs and other executive officers are employees “at ✘ No Hedging or PledgingDirectors, NEOs and other ✘ No Tax Gross UpsNEOs and other executive officers are not entitled to tax gross ups in the event of a change in control ✘ No Backdating or Repricing of Stock OptionsStock options are never backdated or issued with below-market prices. Repricing of underwater stock options without stockholder approval is prohibited (except in the event of certain extraordinary corporate events). ✘ No Excessive PerquisitesPerquisites are limited to the executive health program, cybersecurity privacy protection and other benefits generally available to employees, such as company product purchase programs. TYPES AND AMOUNTS OF NEO COMPENSATION AWARDED IN As part of The following charts show each element of As shown in the charts above, a significant portion of the compensation granted to our NEOs was equity and pay-at-risk. Equity grants represented 72% of Mr. Fink’s annual total target compensation and 56% (on average) of the other NEOs’ annual total target compensation for 2022. 88% of Mr. Fink’s annual total target compensation for 2022 was pay-at-risk and 75% (on average) of the other NEOs’ annual total target compensation for 2022 was pay-at-risk. COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) 2022 Compensation Base Salary For 2022, the Compensation Committee Named Executive Officer 2017 2016 Christopher J. Klein Patrick D. Hallinan David M. Randich Nicholas I. Fink Robert K. Biggart E. Lee Wyatt, Jr. Named Executive Officer December 31, 2021 December 31, 2022 Nicholas I. Fink $1,160,000 $1,200,000 Patrick D. Hallinan $680,000 $700,000 Cheri M. Phyfer $630,000 $725,000 Sheri R. Grissom $490,000 $505,000 Hiranda S. Donoghue $500,000 $500,000 R. David Banyard, Jr. $740,000 $755,000 Brett E. Finley $600,000 $620,000 The Compensation Committee believes that annual cash incentive awards (“bonus”) reinforce a 29 COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) Target Bonus Opportunity Patrick D. Hallinan 90% 90% 70% 70% 85% Brett E. Finley 80% home products market, For Messrs. Banyard and Finley, this metric was OM for their respective business segments, Cabinets and Outdoors & Security, respectively. For Ms. Phyfer, this metric was Sales Growth Above Market for Water Innovations from January - September 2022. The bonus awards for each of Messrs. Fink and Hallinan and Mses. Grissom and Donoghue were The Compensation Committee believes that COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) 2022 Annual Cash Incentive Performance Goals and Results Performance and Goals(1) Named Executive Officer Performance Metric Minimum Performance Measure Target Performance Measure Maximum Performance Measure Actual Performance(2) Amount Paid Nicholas I. Fink Patrick D. Hallinan Cheri M. Phyfer Water Innovations Corporate Sheri R Grissom Hiranda S. Donoghue R. David Banyard, Jr. Brett E. Finley OI minimum, target and maximum performance measures and actual performance results are shown in millions. For Ms. Phyfer, Sales Growth Above Market was determined by calculating the percentage change in Water Innovations annual sales in excess of the percentage change in the Water Innovations market’s prior year sales. EPS, OI and OM actual performance were adjusted to exclude the effect of currency fluctuations. See “Use of Non-GAAP Financial Information in Connection with Incentive Compensation” included in Appendix A for a description of all adjustments. Long-Term Equity Awards The Compensation Committee believes that equity compensation reinforces a pay for performance culture and aligns The 2022 annual equity award for NEOs consisted of 50% PSAs, 25% RSUs and 25% stock options. In setting COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) Nicholas I. Fink $6,150,000 $7,150,000 Patrick D. Hallinan $1,900,000 $2,000,000 Cheri M. Phyfer $1,575,000 $1,700,000 Sheri R. Grissom $850,000 $900,000 Hiranda S. Donoghue1 N/A $900,000 R. David Banyard, Jr. $2,150,000 $2,225,000 Brett E. Finley2 $1,375,000 $1,475,000 Ms. Donoghue was hired in December 2021 and as a result was not entitled to an annual equity award in 2021. For 2022, the Compensation Committee included an additional $100,000 in the grant date fair value of Mr. Finley’s award in recognition of a loss bonus opportunity in 2021 resulting from the acquisition of Larson Manufacturing. In anticipation of Performance Share Awards:PSAs awarded to the NEOs in RSUs and Stock Options:The Compensation Committee believes that both RSUs and stock options RSUs 32 COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) Stock options The Compensation Committee assessed the actual performance achievement of each outstanding PSA performance cycle through September 30, 2022 and determined that it was appropriate to recognize the performance achieved through such date given the proximity to the conclusion of the 2020-2022 and 2021-2023 PSA cycles and that such performance would have been materially above target had the cycles completed. The Compensation Committee determined that it would be more appropriate to reward performance by converting all three outstanding PSA cycles based on projected performance rather than attempt to meaningfully adjust the goals or convert the PSAs to RSUs at target performance. As a result of this assessment and as permitted under the terms of the underlying equity plans and award agreements, all unvested PSAs were converted into time-based RSUs based on projected performance results calculated based on actual performance from the beginning of the applicable performance period through the end of the fiscal quarter immediately preceding the Separation (or September 30, 2022) and expected performance through the remainder of the applicable performance period had the Separation not occurred. Each PSA converted into an RSU, which will vest in accordance with the original vesting schedule. Consistent with the treatment of other employees who remained with MasterBrand, Mr. Banyard’s outstanding PSAs were converted into MasterBrand RSUs using the same methodology described above. At the time of the Separation there were three outstanding PSA performance cycles: 2020-2022; 2021-2023 and 2022-2024. The PSA performance achievement approved by the Compensation Committee 2015-2017 PSA Target EPS and ROIC Goals and Results EPS (75%) ROIC (25%) Performance Cycle January 2020 - December 2022 200% January 2021 - December 2023 200% January 2022 - December 2024 82% Based on the approved achievement, Named Executive Officer Nicholas I. Fink 209,258 Patrick D. Hallinan 63,413 51,820 23,389 Brett E. 47,721 COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) Benefits Retirement All of the NEOs are eligible for retirement benefits through the Fortune Brands In addition to the Qualified Savings Plan, the Company providesnon-qualified retirement benefits for contributions that would have been made under thetax-qualified plan but for limitations imposed by the The Company Severance The Company has Agreements for the Payment of Benefits Following Termination of Employment (the “Severance Agreements”) with each NEO. Under the terms of the Severance Agreements, each NEO is entitled to severance benefits upon a The Compensation Committee believes that it is appropriate to provide NEOs with the protections afforded under these Severance Agreements and that doing so helps the Company remain competitive with market All of the Severance Agreements contain “double-trigger” change in control provisions, which means that there must be both a change in control of the Company (or applicable In connection with the Neither Mr. Banyard nor Mr. Hallinan were eligible to receive severance benefits under their Severance Agreements with the Company in connection with their resignations from the Company. See the “2022 Potential Payments Upon Termination or Change in Control” table COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) Perquisites All NEOs were provided with an executive health program that provides all NEOs with annual medical Policies Clawback Policy The Company has a policy that allows it to recoup all or part of annual cash incentives or PSAs if there is: (1) a significant or material restatement of the Company’s financial statements covering any of the three fiscal years preceding the grant or Stock Ownership Guidelines The Company maintains Position 6 3 3 Executives have five years from the date of hire or date of promotion to acquire the requisite amount of stock and are required to hold 50% of net shares acquired from the vesting of PSAs and RSUs until the ownership guidelines are met. All of the continuing NEOs currently meet The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement and the Company’s Annual Report on Form10-K for the year ended December 31, Compensation Committee A.D. David Mackay, Chair Amit Banati Irial Finan Ann F. Hackett Susan S. Kilsby John G. Morikis 2022 EXECUTIVE COMPENSATION 2022 SUMMARY COMPENSATION TABLE Non- Plan All Other A B C D E F G H I Nicholas I. Fink 2022 1,192,308 0 5,362,469 1,787,499 900,120 0 357,601 9,599,997 Chief Executive Officer 2021 1,148,462 0 4,612,510 1,537,493 2,534,600 0 337,316 10,170,381 2020 1,097,138 0 4,643,703 1,881,263 1,765,088 0 228,782 9,615,974 Patrick D. Hallinan 2022 696,154 0 1,499,998 499,994 363,510 0 156,341 3,215,997 Executive Vice President and Chief Financial Officer 2021 671,346 0 1,424,973 474,993 950,912 0 128,554 3,650,778 2020 630,897 0 1,525,010 675,011 655,828 18,000 116,932 3,621,678 Cheri M. Phyfer 2022 655,000 0 1,274,964 425,001 212,086 0 95,559 2,662,610 Executive Vice President, Group President 2021 623,077 0 1,181,260 393,757 923,832 0 69,466 3,191,392 2020 575,229 0 1,512,464 537,486 673,485 0 53,862 3,352,526 Sheri R. Grissom 2022 502,115 0 899,964 0 203,970 0 104,613 1,710,662 Executive Vice President, Chief Human Resources & Transformation Officer Hiranda S. Donoghue 2022 500,000 0 675,016 225,004 201,950 0 61,204 1,663,174 Executive Vice President, Chief Legal Officer and Secretary R. David Banyard, Jr. 2022 754,943 0 1,668,753 556,257 623,100 0 21,773 3,624,826 Former President, Cabinets 2021 736,154 0 1,612,465 537,498 460,576 0 19,700 3,366,393 2020 720,000 0 1,724,968 725,011 471,744 0 17,142 3,658,865 Brett E. Finley Former President, Outdoors & Security 2022 616,538 0 1,181,280 746,170 0 0 38,539 2,582,527 2021 597,750 0 1,031,249 343,749 442,080 0 148,002 2,562,830 2020 555,856 0 1,125,017 474,995 561,759 0 68,663 2,786,290 Salary: Base salaries shown for all NEOs represent the Stock Awards:The amounts listed in column D for The amounts included in this column for the PSAs granted during Option Awards:The amounts listed in column E for Non-Equity Incentive Plans: Column F lists amounts earned under the annual cash incentive plan. Please see the CD&A for further details regarding these awards. Change in Actuarial Value of Pension Benefits:Column G includes the aggregate change in actuarial valueof 36 2022 EXECUTIVE COMPENSATION (CONTINUED) Perquisites and All Other Compensation:The amounts in column H include the following: Matching Contributions Profit Sharing Contributions to the Qualified Savings Plan. Profit sharing contributions for 2022 to the Qualified Savings Plan were made by Fortune Brands in the amount of $20,670 for Messrs. Fink, Hallinan, Ms. Grissom and Ms. Donoghue and by Water Innovations in the amount of $15,250 for Ms. Phyfer. Profit Sharing Contributions to Supplemental Plans.The following contributions were made to the Fortune Brands Other: Included in column H Estimated Future Payouts Under Estimated Future Payouts Under Equity Incentive Plan Awards All Other or Units All Other Options Exercise Awards Grant Awards Nicholas I. Fink 2/28/22(2) 2/28/22(3) 2/28/22(4) 2/28/22(5) Patrick D. Hallinan 2/28/22(2) $ 0 $ 630,000 $ 1,260,000 2/28/22(3) 19,275 $ 86.90 $ 499,994 2/28/22(4) 5,775 $ 500,028 2/28/22(5) 0 11,549 23,098 $ 999,970 Cheri M. Phyfer 2/22/22(2) 2/22/22(3) 2/22/22(4) 2/22/21(5) Sheri R. Grissom 2/28/22(2) $ 0 $ 353,500 $ 707,000 2/28/22(4) 10,394 $ 899,964 12/14/22(6) Hiranda S. Donoghue 2/28/22(2) $ 0 $ 350,000 $ 700,000 2/28/22(3) 2/28/22(4) 2/28/22(5) R. David Banyard, Jr. 2/28/22(2) $ 0 $ 641,750 $ 1,283,500 2/28/22(3) 21,444 $ 86.90 $ 556,257 2/28/22(4) 6,424 $ 556,222 2/28/22(5) 0 12,849 25,698 $ 1,112,531 Brett E. Finley 2/28/22(2) $ 0 $ 496,000 $ 992,000 2/28/22(3) 2/28/22(4) 2/28/22(5) 11/21/22(6) 37☐ Preliminary Proxy Statement ☐ ☒ Definitive Proxy Statement ☐ Definitive Additional Materials ☐ Soliciting Material Pursuant tounderFortune Brands Home & Security, Inc.Payment of Filing Fee (Check the appropriate box)all boxes that apply):☒ No fee required. ☐Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.(1)Title of each class of securities to which transaction applies:(2)Aggregate number of securities to which transaction applies:(3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):(4)Proposed maximum aggregate value of transaction:(5)Total fee paid:☐ Fee paid previously with preliminary materials.materials☐ Check box if any part of the fee is offset as providedFee computed on table in exhibit required by Item 25(b) per Exchange Act Rule0-11(a)(2)Rules identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.(1)Amount Previously Paid:(2)Form, Schedule or Registration Statement No.:(3)Filing Party:(4)Date Filed:14, 201830, 202320182023 Annual Meeting of Stockholders (“Annual Meeting”) of Fortune Brands Home & Security,Innovations, Inc. (“Fortune Brands” or “the Company”) on Tuesday, May 1, 201816, 2023 at 8:00 a.m. (CDT) at the Renaissance Chicago North Shore Hotel, 933 Skokie Boulevard, Northbrook,520 Lake Cook Road, Deerfield, Illinois. The following matters will be considered at the Annual Meeting:Proposal 1: Election of the three director nominees identified in this Proxy Statement for a three yearthree-year term expiring at the 20212026 Annual Meeting of Stockholders (see pages6-9) 6-11);Proposal 2: Ratification of the appointment by the Company’s Audit Committee of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 20182023 (see page 45)53);Proposal 3: Advisory vote to approve the compensation paid to the Company’s named executive officers (see page 46)54);Proposal 4: Advisory vote to approve the frequencyApproval of voting on the compensation paidan amendment to the Company’s named executiveRestated Certificate of Incorporation to provide exculpation of officers (see page 47)55); and2, 2018,17, 2023, the record date for the Annual Meeting, are entitled to vote.Stockholders who wish to attend theFor information about attending our Annual Meeting in person should review theand for voting instructions, beginning on page 1.please see pages 59-63. See pages1-5 for voting instructions.14, 2018.30, 2023.Hiranda S. Donoghue Robert K. BiggartSeniorExecutive Vice President, General CounselChief Legal Officer and Corporate Secretary20182023 Annual Meeting of Stockholders to be Held on Tuesday, May 1, 2018.16, 2023.20172022 (“Form10-K”) are available atwww.proxyvote.comwww.proxyvote.com.Why did I receive these materials?These materials were provided to you in connection with the solicitation by the Board of Directors (the “Board”) of Fortune Brands Home & Security, Inc. (“Fortune Brands” or the “Company”) of proxies to be voted at our Annual Meeting InformationTime and Date Record Date March 17, 2023 at any adjournment or postponement of the Annual Meeting. The Annual Meeting will take place on May 1, 2018 at 8:00a.m. (CDT) at the Renaissance Chicago North Shore Hotel, 933 Skokie Boulevard, Northbrook, Illinois. Voting Recommendationsdescribes the matters on which you, as a stockholder, are entitled to vote and gives youdoes not contain all of the information that you need to make an informed decision on these matters.Why did I receive a “Notice of Internet Availability of Proxy Materials” instead of printed proxy materials?Companies are permitted to provide stockholders with access to proxy materials over the Internet instead of mailing a printed copy. Unless we were instructed otherwise, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to stockholders. The Notice contains instructions onshould consider in deciding how to accessvote. Please read the proxy materials oncomplete Proxy Statement carefully before voting. The following table summarizes the Internet, how to vote and how to request a printed set of proxy materials. This approach reduces the environmental impact and our costs of printing and distributing the proxy materials, while providing a convenient method of accessing the materials and voting.The Company will make its Annual Report on Form10-K for the last fiscal year, including any financial statements or schedules, available to stockholders without charge, upon written request to the Secretary, Fortune Brands Home & Security, Inc., 520 Lake Cook Road, Deerfield, Illinois 60015. The Company will furnish exhibits to Form10-K to each stockholder requesting them upon payment of a $.10 per page fee to cover the Company’s cost.Can I get electronic access to the proxy materials if I received printed materials?Yes. If you received printed proxy materials, you can also access them online atwww.proxyvote.combefore voting your shares. The Company’s proxy materials are also available on our website athttp://ir.fbhs.com/annuals-proxies.cfm. Stockholders are encouraged to elect to receive future proxy materials electronically. If you opt to receive our future proxy materials electronically, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting website. Your election to receive proxy materials by email will remain in effect until you terminate it or for as long as the email address provided by you is valid. Stockholders of record who wish to participate can enroll athttp://enroll.icsdelivery.com/fbhs. If your shares are held in an account by a bank, broker or other nominees, you should check with your bank, broker or other nominee regarding the availability of this service.What is the difference between being a stockholder of record and a beneficial owner?If your shares are registered directly in your name with EQ Shareholder Services, the Company’s transfer agent, you are the “stockholder of record.” If your shares are held in an account by a bank, broker or other nominee, you hold your shares in “street name” and are a “beneficial owner” of those shares. The majority of stockholders are beneficial owners. For such shares, a bank, broker or other nominee is considered the stockholder of record for purposes of voting at the Annual Meeting. Beneficial owners have the right to direct their bank, broker or other nominee on how to vote the shares held in their account by using the voting instructions provided by the bank, broker or other nominee.Who is entitled to vote?Only stockholders who owned the Company’s common stock of record at the close of business on March 2, 2018 (the “Record Date”) are entitled to vote. Each holder of common stock is entitled to one vote per share. There were 148,018,012 shares of common stock outstanding on the Record Date.FREQUENTLY ASKED QUESTIONS (CONTINUED)Who can attend the Annual Meeting?Only stockholders who owned Fortune Brands’ common stock as of the close of business on the Record Date, or their authorized representatives, may attend the Annual Meeting. At the entrance to the meeting, stockholders will be asked to present valid photo identification to determine stock ownership on the Record Date. If you are acting as a proxy, you will need to submit a valid written legal proxy signed by the owner of the common stock.You must bring such evidence with you to be admitted to the Annual Meeting.Stockholders who own their shares in “street name” will be required to submit proof of ownership at the entrance to the meeting. Either your voting instruction card or brokerage statement reflecting your stock ownership as of the Record Date may be used as proof of ownership.What mattersitems that will be voted on at the Annual Meeting?Four matters will be considered at theour 2023 Annual Meeting of Stockholders (the “Annual Meeting”), along with the Board’s voting recommendations.
Number Description of Proposal Page
Number 6-11 FOR 53 FOR 54 FOR 55 are:impacted Company results. In addition, the Company was also impacted by continued inflation and inventory pressures as we saw typical seasonality return to the business. Notwithstanding this challenging environment, our teams delivered a significant transformation of our businesses. We also took decisive actions to reduce our fixed cost base and to preserve our margin while maintaining investments in our key strategic initiatives, including our digital transformation, brand-building, and incremental capacity critical to our long-term growth. Our team executed the following transformational initiatives during 2022: • • * Water Innovations Outdoors & Security Water Innovations is an industry leader with a powerful collection of water brands and focused on developing the future of water for today’s consumers. Water Innovations designs, manufactures, markets and distributes a growing portfolio of connected products, water management offerings, as well as consumer plumbing products, including faucets, showers, sinks and tubs. The Outdoors & Security segment is focused on driving growth in the attractive outdoor living space with products engineered for performance, providing homeowners protection and security. The segment’s products include a collection of digitally connected security products, as well as exterior entryway, storm, security and screen doors; eco-friendly synthetic decking, cladding and railing; retractable screens and porch windows; safety and security devices. 2023 Director Nominees – Class III – Term Expiring 2026 Name and Principal Occupation Age Director
Since Independent Board Committees 48 2020 Executive Constellation Brands, Inc. 52 2023 ✓ None 67 2011 ✓ The Clorox Company Independent Board (90%), except our CEO Three women and two ethnically/racially diverse directors (50% of the Board members are diverse following Mr. Thomas’ retirement) Majority vote in uncontested director elections, with a resignation policy The Board has a policy that it generally will not re-nominate a director for election following her or his 72nd birthday Active engagement and oversight by Board of three Class ICompany strategies and risksRobust stock ownership guidelines for directors identified in this Proxy Statement (Proposal 1and prohibition on hedging and pledging of Company stock;• • ratification75% of the appointmentother NEOs’ (on average) total target compensation was pay-at-risk; andour independent registered public accounting firm(Proposal 2);approximately 93% of the votes cast for the Company’s annual say on pay vote. •Long-term focus and stockholder alignment through equity compensation advisory voteNo problematic pay practices and historically strong stockholder support for say on pay (93% average over the last five years)Robust stock ownership guidelines Executive compensation subject to approve the compensation paid to the Company’s named executive officers(Proposal 3); anda clawback policyLimited perquisites •advisory vote to approve the frequency of voting on the compensation paid to the Company’s named executive officers (Proposal 4).How do I vote?If you received a Notice in the mail, you can either vote by (i) Internet (www.proxyvote.com) or (ii) in person at the Annual Meeting. Voting instructions are provided on the Notice. You may also request to receive printed proxy materials in the mail.Stockholders who received printed proxy materials in the mail can vote by (i) filling out the proxy card and returning it in the postage paid return envelope, (ii) telephone(800-690-6903), (iii) Internet (www.proxyvote.com), or (iv) in person at the Annual Meeting. Voting instructions are provided on the proxy card.Stockholders who received proxy materials electronically can vote by (i) Internet (www.proxyvote.com), (ii) telephone(800-690-6903), or (iii) in person at the Annual Meeting.If you are not the stockholder of record, but are a beneficial owner of our shares, you must vote by giving instructions to your bank, broker or other nominee. You should follow the voting instructions on the form that you receive from your bank, broker or other nominee, which will include details on available voting methods.To be able to vote in person at the Annual Meeting, you must obtain a legal proxy from your bank, broker or other nominee in advance and present it to the Inspector of Election with your completed ballot at the Annual Meeting.How will my proxy be voted?Your proxy card, when properly signed and returned to us, or processed by telephone or via the Internet, and not revoked, will be voted in accordance with your instructions. If any matter is properly presented other than the four proposals described above, the persons named in the enclosed proxy card or, if applicable, their substitutes, will have discretion to vote your shares in their best judgment.FREQUENTLY ASKED QUESTIONS (CONTINUED)What if I don’t mark the boxes on my proxy or voting instruction card?Unless you give other instructions on your proxy card or your voting instruction card, or unless you give other instructions when you cast your vote by telephone or the Internet, the persons named in the enclosed proxy card will vote your shares in accordance with the recommendations of the Board, which areFORthe election of each director named in Proposal 1,FOR Proposals 2 and 3 andONE YEAR for the frequency of the advisory vote to approve the compensation of the Company’s named executive officers (Proposal 4).If you hold shares beneficially and you have not provided voting instructions, your bank, broker or other nominee is only permitted to use its discretion and vote your shares on certain routine matters (Proposal 2). If you have not provided voting instructions to your bank, broker or other nominee onnon-routine matters (Proposals 1, 3 and 4), your bank, broker or other nominee is not permitted to use discretion and vote your shares.Therefore, we urge you to give voting instructions to your bank, broker or other nominee on all four proposals.Shares that are not permitted to be voted by your bank, broker or other nominee with respect to any matter are called “brokernon-votes.” Brokernon-votes are not considered votes for or against a proposal and will have no direct impact on the voting results, but will be counted for the purposes of establishing a quorum at the Annual Meeting.How many votes are needed to approve a proposal?The nominees for director, innon-contested elections, must receive a majority of the votes cast at the Annual Meeting, in person or by proxy, to be elected. A proxy card marked to abstain on the election of a director and any brokernon-votes will not be counted as a vote cast with respect to that director.Under the Company’s majority vote Bylaw provision relating to the election of directors, if the number of votes cast “for” a director nominee does not exceed the number of votes cast “against” the director nominee, then the director must tender his or her resignation from the Board promptly after the certification of the stockholder vote. The Board (excluding the nominee in question) will decide within 90 days of that certification, through a process managed by the Nominating and Corporate Governance Committee, whether to accept the resignation. The Board’s explanation of its decision will be promptly disclosed in a filing with the Securities and Exchange Commission (“SEC”).The affirmative vote of shares representing a majority in voting power of the common stock, present in person or represented by proxy at the Annual Meeting, and entitled to vote is necessary for the approval of Proposals 2 and 3.For Proposal 4, stockholders may vote in favor of holding the vote to approve the compensation paid to the Company’s named executive officers every one year, every two years or every three years and they may also choose to abstain. The option of every one year, every two years or every three years that receives the highest number of votes cast by stockholders will be considered by the Board as the stockholders’ recommendation as to the frequency of future advisory votes on executive compensation.Proxy cards marked to abstain on Proposals 2 and 3 will have the effect of a negative vote. Proxy cards marked to abstain on Proposal 4 will have no effect on the outcome. Brokernon-votes are not applicable to Proposal 2 because your bank, broker or other nominee will be permitted to use discretion to vote your shares on this proposal. Brokernon-votes will have no impact on Proposals 1, 3 and 4.How can I revoke my proxy or change my vote?You may revoke your proxy by giving written notice to the Secretary of the Company or by delivering a later dated proxy at any time before it is actually voted. If you voted on the Internet or by telephone, you may change your vote by voting again. Your last vote is the vote that will be counted. Attendance at the Annual Meeting does not revoke your proxy unless you vote at the Annual Meeting.FREQUENTLY ASKED QUESTIONS (CONTINUED)Will my vote be public?As a matter of policy, proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed, but are available to the independent Inspector of Election and certain employees of the Company.What constitutes a quorum?The presence at the Annual Meeting, in person or by proxy, of the holders of a majority in voting power of the issued and outstanding shares of common stock entitled to vote will constitute a quorum. Proxies received but marked as abstentions or without any voting instructions will be included in the calculation of the number of shares considered to be present at the Annual Meeting.Our Board is soliciting this proxy. The Company will bear the expense of soliciting proxies for this Annual Meeting, including mailing costs. To ensure that there is sufficient representation at the Annual Meeting, our employees may solicit proxies by telephone, facsimile or in person.What if I am a participant in the Fortune Brands Home & Security Retirement Savings Plan or the Fortune Brands Home & Security Hourly Employee Retirement Savings Plan?Participants who invest in the Fortune Brands Stock Fund through the Fortune Brands Home & Security Retirement Savings Plan and the Fortune Brands Home & Security Hourly Employee Retirement Savings Plan (collectively, the “Savings Plans”) were mailed a Notice. The Trustee of the Savings Plans, as record holder of the Fortune Brands common stock held in the Savings Plans, will vote whole shares attributable to your interest in the Fortune Brands Stock Fund in accordance with your directions. Follow the voting instructions provided in the Notice to allow the Trustee to vote the whole shares attributable to your interest in accordance with your instructions. If the Trustee does not receive timely voting instructions with respect to the voting of your shares held in the Fortune Brands Stock Fund, the Trustee will vote such shares in the same manner and in the same proportion as the shares for which the Trustee did receive voting instructions.How can I eliminate multiple mailings to the same address?If you and other residents at your mailing address are registered stockholders and you receive more than one copy of the Notice, but you wish to eliminate the duplicate mailings, you must submit a written request to the Company’s transfer agent, EQ Shareowner Services. To request the elimination of duplicate copies, please write to EQ Shareowner Services, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120.If you and other residents at your mailing address own shares in street name, your broker, bank or other nominee may have sent you a notice that your household will receive only one Notice or one set of proxy materials for each company in which you hold stock through that broker, bank or other nominee. This practice, known as “householding,” is designed to reduce our printing and postage costs. If you did not respond, the bank, broker or other nominee will assume that you have consented, and will send only one copy of the Notice to your address. You may revoke your consent to householding at any time by sending your name, the name of your brokerage firm, and your account number to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. The revocation of your consent to householding will be effective 30 days following its receipt. In any event, if you did not receive an individual copy of the Notice or proxy materials, or if you wish to receive individual copies of such documents for future meetings, we will send an individual copy to you if you call Shareholder Services at (847)484-4538, or write to the Secretary of Fortune Brands Home & Security, Inc., 520 Lake Cook Road, Deerfield, Illinois 60015.FREQUENTLY ASKED QUESTIONS (CONTINUED)How can I submit a stockholder proposal or nomination next year?Our Bylaws provide that in order for a stockholder to (i) nominate a candidate for election to our Board at the 2019 Annual Meeting of Stockholders, or (ii) propose business for consideration at the 2019 Annual Meeting of Stockholders, written notice containing the information required by the Bylaws must be delivered to the Secretary of the Company no less than 90 days nor more than 120 days before the anniversary of the prior year’s Annual Meeting, that is, after January 1, 2019 but no later than January 31, 2019 for the 2019 Annual Meeting.Under SEC rules, if a stockholder wishes to submit a proposal for possible inclusion in the Company’s 2019 proxy statement pursuant to Rule14a-8 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), we must receive it on or before November 14, 2018.The person presiding at the Annual Meeting is authorized to determine if a proposed matter is properly brought before the Annual Meeting or if a nomination is properly made.Copies of our Restated Certificate of Incorporation and Bylaws are available upon written request to the Secretary, Fortune Brands Home & Security, Inc., 520 Lake Cook Road, Deerfield, Illinois 60015.believeshas identified certain qualifications that are required of all directors must possessdirectors. Additionally, the Board seeks to maintain a considerable amountdiverse set of educationskills, knowledge, experiences, backgrounds and business management experience. The Board also believes that it is necessary for each of the Company’s directors to possess certain general qualities, while there are other skills and experiences that should beviewpoints represented on theour Board as a whole, but not necessarily by each individual director.General qualities for all directors:Qualifications Required of All DirectorsExtensive executive leadership experienceExcellent business judgmentExperience Personal Attributes ethicsOriginal thinkingStrong commitment to the Company’s goal of maximizing stockholder valueSpecific experiences, qualifications, and backgrounds to be representedKey Skills Represented on the Board as a whole:Qualifications, Expertise and Key Skills Financial and/or accounting expertiseConsumer products expertiseKnowledge of international marketsChief executive officer/chief operating officer/chief financial officer experienceExtensive board experienceDiversity of skill, background and viewpointThe process used by the Nominating and Corporate Governance Committee in recommending qualified director candidates is described below under Corporate Governance – Director Nomination Process (see page 6 of this Proxy Statement).Class I Directorseight11 members and is divided into three classes, each having three yearthree-year terms that expire in successive years. Ms. Stephanie Pugliese was appointed by the Board to serve as a Class III Director effective in March 2023. The term of theeach director currently serving in Class I directorsIII (Messrs. Nicholas I. Fink, A.D. David Mackay, David M. Thomas and Ms. Pugliese) expires at the 2018 Annual Meeting of Stockholders.Meeting. The Board has nominated Messrs. Fink and Mackay and Ms. Ann F. Hackett, Mr. John G. Morikis and Mr. Ronald V. Waters, III, each of whom is currently serving as a Class I director, forre-electionPugliese for a new term of three years expiring at the 20212026 Annual Meeting of Stockholders and until their successors are duly elected and qualified. Shares cannot be votedMr. Thomas will not stand for more thanre-election and will retire immediately following the Annual Meeting. Mr. Thomas has served as a valuable member of our Board since 2011, serving in positions as non-executive chairman, lead independent director and chair of the NESG Committee over the course of his tenure. We thank him for his dedicated service to the Company and the Board. Following Mr. Thomas’ retirement, the number of nominees proposed forre-election.directors will be reduced from 11 to 10 members.III and Class IIIII directors, along with their present positions, their principal occupations and employment during the last five years, any directorships held with other public companies or registered investment firms during the past five years, their ages and the year first elected as a director of the Company, are set forth below. IndividualEach director’s individual qualifications and experiences of our directors that contribute to the Board’s effectiveness as a whole are also described in the following paragraphs.PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED)
occupations and other directorships
during the past five years Age Year
first
elected
director Partner andco-founder of Personal Pathways, LLC, a company providingweb-based enterprise collaboration platforms, since 2015. Prior to that, President of Horizon Consulting Group, LLC, a strategic and human resource consulting firm founded by Ms. Hackett in 1996. Currently also a director of Capital One Financial Corporation. Formerly a director of Beam Inc. 64 2011 President and Chief Executive Officer since January 2016 and Chairman since January 2017 of The Sherwin-Williams Company, a manufacturer of paint and coatings products. President and Chief Operating Officer from 2006 to January 2016. Currently a director of The Sherwin-Williams Company. 54 2011 Mr. Morikis’ experience as a Chief Executive Officer and as a Chief Operating Officer of The Sherwin-Williams Company, and his more than 30 years of experience with a consumer home products company, brings to our Board the perspective of a leader who faces similar external economic issues that face our Company. Retired since May 2010; President and Chief Executive Officer of LoJack Corporation, a provider of tracking and recovery systems, from January 2009 to May 2010. Currently also a director of HNI Corporation and Paylocity Holding Corporation. Formerly a director of Chiquita Brands International, Inc. 65 2011 Mr. Waters has considerable executive leadership and financial management experience. He served as Chief Executive Officer and Chief Operating Officer at LoJack Corporation, a premier technology company, and as Chief Operating Officer and Chief Financial Officer at Wm. Wrigley Jr. Company, a leading confectionary manufacturing company. Mr. Waters also has extensive board experience. PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED)
occupations and other directorships
during the past five years Age Year
first
elected
director 59 2015 Ms. Kilsby has a distinguished global career in investment banking and brings extensive mergers and acquisitions and international business experience to the Board. In addition to her experience at Credit Suisse, she held a variety of senior positions with The First Boston Corporation, Bankers Trust and Barclays de Zoete Wedd. Ms. Kilsby also has extensive board experience and currently serves as thenon-executive Chair of Shire Plc. Chief Executive Officer of the Company since January 2010. President and Chief Operating Officer prior thereto. Currently also a director of Thor Industries, Inc. 54 2010 Mr. Klein’s leadership as Chief Executive Officer of the Company and his significant corporate strategy, business development and operational experience provide him with intimate knowledge of our operations and the challenges faced by the Company. Mr. Klein led the Company through thespin-off from Fortune Brands, Inc. in 2011. Prior to the Company’sspin-off, he held several leadership positions at Fortune Brands, Inc., helping to reshape the business through acquisitions and divestitures. Prior to joining Fortune Brands, Mr. Klein held key strategy and operating positions at Bank One Corporation and also served as a partner at McKinsey & Company, a global management consulting firm. PROPOSAL 1 – ELECTIONOF DIRECTORS (CONTINUED)
occupations and other directorships
during the past five years Age Year
first
elected
director 62 2011 Mr. Mackay held various key executive positions with Kellogg Company including Chief Executive Officer and Chief Operating Officer, bringing to our Board the perspective of a leader who faced a similar set of external economic, social and governance issues to those that face our Company. Mr. Mackay also has significant international business experience, as well as extensive board experience. Retired since March 2006; Chairman of the Board and Chief Executive Officer of IMS Health Incorporated, a provider of information services to the pharmaceutical and healthcare industries, prior thereto. Currently also a director of The Interpublic Group of Companies, Inc. and a member of the Fidelity Investments Board of Trustees. 68 2011 Mr. Thomas’ experience as a Chief Executive Officer of IMS Health Incorporated and his management experience at premier global technology companies, including as Senior Vice President and Group Executive of IBM, helps the Board address the challenges the Company faces due to rapid changes in IT capabilities and communications and global distribution strategies. Mr. Thomas also has extensive board experience. 68 2011 Mr. Wesley’s experience as Chief Executive Officer of a consumer products conglomerate gives him unique insights into the Company’s challenges, opportunities and operations. Mr. Wesley also has extensive board experience. business.Company. We are dedicated to maintaining these practices and upholding high standards of conduct.adoptedmaintains a set of Corporate Governance Principles which describe our corporate governance practices and address corporate governance issues such as Board composition and responsibilities, Board meeting procedures, the establishment of Board committees, management succession planning process and review of risks. The Corporate Governance Principles, which were enhanced in December 2022, most notably to include a Director Code of Conduct, are available athttp:https://ir.fbhs.com/corporate-governance.cfmir.fbin.com/governing-high-standards.The Company’s Corporate Governance Principles provide that a majority of the members of the Board shall be independent directors. New York Stock Exchange requirements, as well as the Company’s committee charters, require that each member of the Audit, Compensation and Nominating and Corporate Governance Committees be independent. The Board applies the definition of independence found in the New York Stock Exchange Listed Company Manual in determining which directors are independent. When determining each director’s independence, the Board also considered charitable contributions made by the Company to organizations with which each director is affiliated.the definition of independence found in the New York Stock Exchange Listed Company Manual in determining which directors are independent. When determining each director’s independence, the Board also considered charitable contributions made by the Company to organizations with which each director is affiliated. The Company’s Corporate Governance Principles were enhanced in 2022 to ensure that each independent director promptly discloses to the Board any existing or proposed relationships or transactions that could impact his or her independence. Wesley and Waters and Mses.KilsbyPugliese were affirmatively determined by the Board to be independent. Due to Mr. Klein’sFink’s employment with the Company, he is not considered independent.None of thenon-employee directors has any material relationship with the Company other than being a director and stockholder. Also, none of thenon-employee directors have participated in any transaction or arrangement that interferes with such director’s independence. has adopted a Code of Business Conduct &and Ethics which sets forth various policies and procedures intended to promote the ethical behavior of all of the Company’s employees, officers and directors (the “Code of Conduct”). The Code of Conduct describes the Company’s policy on conflicts of interest. The Board has established a Compliance Committee (comprised of management) which is responsible for administering and monitoring compliance with the Code of Conduct.Conduct (other than monitoring director compliance which is the responsibility of the NESG Committee). The Compliance Committee periodically reports on the Company’s compliance efforts to the Audit Committee and to the Board.Nominating and Corporate Governance Committee (the “Nominating Committee”). NESG Committee.NominatingNESG Committee will review any potential conflict of interest involving a member of the Board to determine whether such potential conflict would affect that director’s independence.CORPORATE GOVERNANCE (CONTINUED)2017,2022, the Company did not participate in any transactions in which any of its directors or executive officers, any immediate family member of a directorany of its directors or executive officerofficers, or any beneficial owner of more than 5% of the Company’s common stock, had a direct or indirect material interest.NominatingNESG Committee is responsible for, among other things, screening potential director candidates, recommending qualified candidates to the Board for nomination, and assessing director independence.independence and evaluating whether the Board and its committees are functioning effectively.NominatingNESG Committee determines whether there are any evolving needs that require an expert in a particular field or other specific skills or experiences. When evaluating director candidates, the NominatingNESG Committee first considers a candidate’s management experience and then considers issues of judgment, background, stature, leadership, conflicts of interest, integrity, ethics, original thinking and commitment to the goal of maximizing stockholder value.value, as well as diversity of background and experiences of the Board as a whole. The Nominating Committee also focuses on issues of diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. The NominatingTo align with the Company’s DEI initiatives and investor priorities, the NESG Committee does not haveinstructed its search firm to include a formal policy withdiverse slate of candidates by including individuals that are diverse in gender and race when searching for new director candidates during 2022. Ms. Pugliese was identified as a potential director candidate through a third-party search firm. As a result of the Board’s succession planning process, the Board appointed an additional female director, increasing the Board’s gender diversity to 30% when taking into account Mr. Thomas’s planned retirement at the Annual Meeting.diversity;the nomination of continuing directors for re-election, the individual’s contributions to the Board are considered. The Board generally will not re-nominate a director at the annual meeting of stockholders following his or her 72nd birthday; however, the Board andhas the Nominating Committee believediscretion to re-nominate a director after reaching age 72 if it believes that itnomination is essential thatin the best interest of the Company’s stockholders.members representthe NESG Committee may retain a third-party search firm to assist in identifying qualified candidates who meet the needs of the Board at that time.The Board is committed to the inclusion of diverse viewpoints. Incandidats when conducting a director candidate search; however, in considering candidates for the Board, the NominatingNESG Committee considers the entirety of each candidate’s credentials in the context of these standards. With respect to the nomination of continuing directors forre-election, the individual’s contributions to the Board are also considered. For the purpose of this Annual Meeting, the Nominating Committee recommended the nomination of Ms. Hackett and Messrs. Morikis and Waters as Class I directors.In connection with future director elections, or at any time there is a vacancy on the Board, the Nominating Committee may retain a third-party search firm to assist in locating qualified candidates that meet the needs of the Board at that time.NominatingNESG Committee’s policy to consider director candidates recommended by stockholders, if such recommendations are properly submitted to the Company. Stockholders that wish to recommend an individual as a director candidate for consideration by the NominatingNESG Committee can do so by writing to the Secretary of Fortune Brands Home & Security, Inc. at 520 Lake Cook Road, Deerfield, Illinois 60015. Recommendations must include the proposed nominee’srecommended candidate’s name, biographical data and qualifications, as well as other information that would be required if the stockholder were actually nominating the recommended candidate pursuant to the procedures for such nominations provided in our Bylaws. The NominatingNESG Committee will consider the candidate and the candidate’s qualifications in the same manner in which it evaluates nominees identified by the NominatingNESG Committee. The NominatingNESG Committee may contact the stockholder making the nominationrecommendation to discuss the qualifications of the candidate and the stockholder’s reasons for making the nomination.recommendation. Members of the NominatingNESG Committee may then interview the candidate if the committee deems the candidate to be appropriate. The NominatingNESG Committee may use the services of a third-party search firm to provide additional information about the candidate prior to making a recommendation to the Board. For a stockholder to directly nominate a candidate for director, such stockholder must follow the procedures set forth in the Company’s Bylaws.NominatingNESG Committee fulfills its responsibility to recommend candidates that are properly qualified to serve the Company for the benefit of all of its stockholders, consistent with the standards established under the Company’s Corporate Governance Principles.Home & Security, Inc. at 520 Lake Cook Road, Deerfield,CORPORATE GOVERNANCE (CONTINUED)Mr. Thomas serves as the Company’snon-executive, independent Chairman. The Board of Directors has determined that having an independent director serve as Chairman of the Board is in the best interests of our stockholders to have an independent, non-executive chair serve as the Company’s Board Chair at this time. This leadership structure aids the Board’s oversight of management and allows our Chief Executive Officer to focus primarily on his management responsibilities. Thenon-executive Chairman Chair has the responsibility of presiding atover all meetings of the Board, consulting with the Chief Executive Officer on Board meeting agendas, acting as a liaison between management and thenon-management directors, including maintaining frequent contact with the Chief Executive Officer and advising him or her on the efficiency of the Board meetings, facilitating teamwork and communication between thenon-management directors and management, as well as additional responsibilities that are more fully described in the Company’s Corporate Governance Principles. In addition, the Company’snon-executive Chairman Chair facilitates the Board’s annual performance assessment of the Chief Executive Officer.Given that eachIf, in the future, the Board appoints an executive chair or any other non-independent director as chair, the Board will elect an independent director to serve as the Lead Director. The duties of the membersChair of the Board other than Mr. Klein, is independent we believe that the leadership structure currently utilized by the Board provides effective independent Board leadership and oversight.Lead Director are further described in our Corporate Governance Principles.management. Thenon-executive Chairman ofmanagement and are led by the Board leadsNon-Executive Chair. During 2022, Ms. Kilsby led these sessions. In addition, Board Committeescommittees also meet regularly in executive session without the presence of management.periodically as deemed appropriate by such committee.The Board of Directors met six times in 2017. Each director attended more than 75% of the total meetings of the Board and committees of the Board of which the director was a member during 2017. Pursuant to the Company’s Corporate Governance Principles, all directors are encouraged and expected to attend the Annual Meeting. All of the directors attended the Company’s 2017 Annual Meeting of Stockholders.The BoardManagement regularly reviews information regarding the Company’s business strategy, leadership development, resource allocation, succession planning, credit, liquidity and operations, talent development, succession and DEI, as well as the risks associated with each.each, with the full Board. The Company’s overall risk management program consists of periodic management discussions analyzing and mitigating risks, an annual review of risks associated with each of the Company’s operating businesses and an annual review of risks related to the Company’s compensation programs and practices.CORPORATE GOVERNANCE (CONTINUED)Annually,The Audit Committee oversees management of the Company’s financial and operational risks. In addition, the Audit Committee oversees the enterprise risk management program, which identifies both external risks (i.e., economic) and internal risks (i.e., strategic, operational, financial and compliance)compliance, including climate-related),impact of these risks and determines howCompany’s plans to mitigate such risks. The Audit Committee managesAnnually, management identifies and assesses the Company’senterprise risk management program, which the Audit Committee reviews. Cybersecurity-related risks and reviewscertain climate-related risks, such as physical risk to our operations and supply chains and commodity price volatility resulting from severe weather events caused climate change and new regulations designed to protect the resultsenvironment, are some of the annual assessment.external risks assessed in the enterprise risk management program. Management also provides the Audit Committee with quarterly updates on the Company’s risks. In addition,The Company has a comprehensive enterprise-wide cybersecurity program aligned to the U.S. Department of Commerce National Institute of Standards and Technology Cybersecurity Framework industry standards and maintains security risk insurance coverage to defray the costs of potential information security breaches. The Company conducts automated online training twice a year for its employees and mock phishing campaigns on a regular basis throughout the year. The Company’s cybersecurity team provides regular updates to our senior executives and typically reports twice a year to the Audit Committee oversees managementon the status of the Company’s financialsecurity posture and our efforts to identify and mitigate cybersecurity risks. In 2022, the Company’s chief information officer also reported to the full Board on the Company’s cybersecurity programs and risk mitigation efforts. Company’s Compensation Committee is responsible for overseeing the management of risks relating to the compensation paid to the Company’s executives and the Company’s executive compensation plans. Annually, the Compensation Committee’s independent compensation consultant conducts an assessment of the risks associated with the Company’s executive compensation policies and practices. The compensation consultant conducts a more extensive review of all of the Company’s broad-based compensation incentive arrangements every few years. In 2022, the compensation consultant conducted a review of the Company’s executive compensation arrangements. For more information about that assessment see “Compensation Risks” below.NominatingNESG Committee manages risks associated with the independence of the Board, potential conflicts of interest of Board members and the Company’s corporate governance structure, as well as management ofstructure. In addition, the NESG Committee oversees the Company’s ESG programs, initiatives and related risks, associated withwhich include the environment,Company’s environmental, health and safety, diversity,DEI, philanthropy, global citizenship and sustainability.other social and governance programs and policies. Management reports to the NESG Committee on the Company’s safety programs and statistics as well as the Company’s DEI strategy and goals.non-executive Chairman Chair and the Chief Executive Officer, to better monitor the risks of the Company and more effectively develop strategic direction, taking into account the magnitude of the various risks facing the Company.2017,2022, the Compensation Committee, with assistance from its independentCompany’s compensation consultant reviewedanalyzed the elements of executive compensation to determine whether any portion of executive compensation encouraged excessive risk taking and whether incentive designs include appropriate risk-mitigation provisions. After reviewing the compensation consultant’s analysis, the Compensation Committee concluded that they do not. In general,none of the executiveCompany’s compensation arrangements encourage excessive risk taking and are consistent with the structure and design of other companies of similar size and industry sector, andsector. The Company utilizes the following risk-mitigating design features have been incorporated into the Company’s programs:features:that havehistorically having overlapping three-year performance cycles;Compensation Discussion and Analysis,CD&A, compensation decisions are made using a combination of objective and subjective considerations designed to mitigate excessive risk taking by executives.CORPORATE GOVERNANCE (CONTINUED)a Nominating and Corporate Governancean NESG Committee. A list of current Committee memberships may be found on the Company’s website athttp:https://ir.fbhs.com/committees.cfmir.fbin.com/committees-and-charters. The Committee memberships as of the date of this Proxy Statement are set forth below: Name AuditCompensationExecutiveNominating andCorporate GovernanceX X X X X X CX XX C X XChristopher J. KleinXX XC X XX X X X John G. Morikis Stephanie PuglieseX X XX X C CC CX X XNorman H. WesleyXXprogram.program, which includes oversight of cybersecurity related risks.Wesley),Ms. Pugliese) is financially literate. Each ofIn addition, Messrs. Banati, Mackay, Perry, Thomas and Waters and Wesley haseach have accounting or financial management expertise and is an audit committee financial expert as defined in Item 407(d)(5)(ii) and (iii) of RegulationS-K under the Securities Exchange Act.Act of 1934, as amended (the “Exchange Act”). As required by its charter, each Audit Committee member has also been determined by our Board to be independent as such term is defined in the Exchange Act and the New York Stock Exchange Listed Company Manual. The Audit Committee met ten times in 2017.which includes the presidents of the Company’s principal operating companies, in a manner that is consistent with competitive practices and Company, operating companybusiness segment and individual performance.Morikis and WesleyMorikis and Mses. Hackett and Kilsby) has been determined by our Board to be independent as such term is defined in the Exchange Act and the New York Stock Exchange Listed Company Manual. The Committee has created a Subcommittee comprised of Mses. Hackett and Kilsby and Messrs. Mackay and Morikis that is responsible for approving all performance standards and payments for any pay program intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code (the “Code”). The Compensation Committee met five times in 2017.CORPORATE GOVERNANCE (CONTINUED)to provideand related program designs provided to the Company’s executive officers. Members of the Company’s legal department provide the Compensation Committee with general advice on laws applicable to executive compensation and the directors’ fiduciary duties in setting compensation.abouton each officer’s performance is essential in the Compensation Committee’s determination of the officer’s salary, target annual incentive and long-term equity compensation determinations. See pages19-3223-35 of this Proxy Statement for more information about how the Compensation Committee determined the executive officers’ compensation in 2017.2022.engages andid not review or approve these additional services provided by WTW to the Company because they are of the type directly secured by management in the ordinary course of business. In their capacity as outside compensation consultant. Meridian Compensation Partners, LLC (“Meridian”) was retained directly by and reportsconsultant, WTW reported directly to the Compensation Committee. In 2017, MeridianCommittee and provided the following services and information to the Compensation Committee:• executive compensation structure and design; andThe Compensation Committee has authorized Meridian to interact with management in connection with advising the Compensation Committee. Meridian is included in discussions with management on matters being brought to the Compensation Committee for consideration. Meridian is prohibited from performing any services for management outside of services needed in connection with advising the Compensation and Nominating Committees. The Compensation Committee has assessed Meridian’s independence and concluded that Meridian’s work for the Compensation Committee does not raise any conflict of interest.CORPORATE GOVERNANCE (CONTINUED)The Executive Committee did not meet in 2017. The Executive Committee has all the authority of the full Board, except for specific powers that are required by law to be exercised by the full Board. The Executive Committee may not amend the Company’s charter, adopt an agreement of merger, recommend actions for stockholder approval, amend or repeal the Bylaws, elect or appoint any director or remove an officer or director, amend or repeal any resolutions of the Board, fix the Board’s compensation, and unless expressly authorized by the Board, declare a dividend, authorize the issuance of stock or adopt a certificate of merger. Corporate Governance CommitteeNominatingNESG Committee’s primary functions are to (i) provide recommendations to the Board with respect to the organization and function of the Board and its committees; (ii) recruit, identify and recommend qualified potential director candidates and nominees; (iii) review the qualifications and independence of directors and provide recommendations to the Board regarding composition of the committees; (iv) develop and recommend changes to the Company’s corporate governance framework including the Company’sBoard a set of corporate governance principles; (v) oversee the process of the evaluation of the Board and management; and (vi) review and advise management on matters relating tooversee the Company’s responsibilities to its employeesenvironmental, social and the community.governance programs, policies and related risks. The NominatingNESG Committee also makes recommendations to the Board regarding the level and composition of compensation fornon-employee directors and grants annual equity awards to non-employee directors.NominatingNESG Committee (Messrs. Finan, Perry, Thomas and Waters and Mses. Hackett, Kilsby and Kilsby)Pugliese) has been determined by our Board to be independent as such term is defined in the Exchange Act and the New York Stock Exchange Listed Company Manual. The Nominating Committee met four times in 2017.Other Corporate Governance ResourcesThe Company’s Corporate Governance Principles, the Company’s Code of Business Conduct and Ethics and the Company’s Code of Ethics for Senior Financial Officers are available on the Company’s website athttp://ir.fbhs.com/corporate-governance.cfm. The charters of each committee are also available on the Company’s website athttp://ir.fbhs.com/committees.cfm.Officers are available on the Company’s website at https://ir.fbin.com/governing-high-standards. The charters of each committee are also available on the Company’s website at https://ir.fbin.com/committees-and-charters. A copy of our ESG report and other ESG resources are also available on the Company’s website at https://www.fbin.com/corporate-responsibility. thatto contribute to the Board’s effectiveness and the Company’s goal of maximizing stockholder value. To accomplish this, the Company maintains anon-employee director compensation program that consists of cash feesretainers and Company stock. During 2017, the Board did not make any changes to the structure of or the amounts provided under thenon-employee director compensation program. Below is a description of the 2022 non-employee director compensation program.In 2017,* ** *** annual cash fee for services as anon-employee director of the Company was $90,000. The members of the Audit Committee (Messrs. Mackay, Morikis, Thomas, Waters and Wesley) and the Compensation Committee (Mses. Hackett and Kilsby and Messrs. Mackay, Morikis and Wesley) received an additional annual cash fee of $7,500 for their service on each of these committees. In addition, the chairperson of each of the Audit, Compensation and Nominating Committees received an additional annual cash fee of $15,000 for such service (Mr. Waters, Ms. Hackett and Mr. Thomas, respectively). Mr. Thomas received an additional annual cash fee of $200,000 for his service asnon-executive Chairman of the Board. Directors may elect to receive payment of their cash fees in Company common stock rather than cash.2017,2022, eachnon-employee director received an annual stock grant that was based on a set dollar value of $135,000. The number of shares granted was determined by dividing the dollar value of the annual stock grant ($135,000)145,000) by the closing price of the Company’s common stock on the grant date ($63.32)73.94), rounded to the nearest share. Accordingly, 2,1321,961 shares of Company common stock were granted to each of the then serving non-employee directors. Directors may electdefer receiptthe Separation and the establishment of theira new compensation peer group, the NESG Committee, with the assistance of WTW, assessed the Board’s compensation program, its elements and amounts paid. Based on this assessment, effective beginning in January 2023, the Board eliminated committee membership fees, increased the annual cash retainer to $120,000 per year and increased the value of the annual equity retainer to $160,000.awards untilunder the January followingMasterBrand non-employee director compensation plan for every notional share held in Ms. Hackett’s deferral account under the year in which the individual ceases servingCompany’s Non-Employee Director Deferred Compensation Plan, to reflect her continuing role as a director of the Company.Company and as a director of MasterBrand. common stock with a fair market value equal to five times theirthe annual cash fee ($450,000 based on the annual fee currently set at $90,000). The guidelinesretainer (for 2022, $500,000) and allow directors five years from the date of the director’s election to the Board to meet the guidelines. All of our directors currently meetShares owned directly by a director, the multiple director’s spouse,fall withininvestment power, as well as any shares that have been granted to a director, but receipt has been deferred pursuant to the five year time period allowed to meet the multiple under the Stock Ownership Guidelines.Company’s Deferred Compensation Plans, are counted towards ownership. For information about the beneficial ownership of the Company’s securities held by directors and executive officers, see “Certain Information Regarding Security Holdings” on pages48-49.Anti-Hedging and Anti-PledgingThe Company has a policy prohibiting directors (as well as senior management) from hedging the risk of owning Company common stock and from pledging or otherwise encumbering shares of Company common stock as collateral for indebtedness in any manner including, but not limited to, holding shares in a margin account.DIRECTOR COMPENSATION (CONTINUED)2022 DIRECTOR COMPENSATION* Name Klein currentlyFink serves as a member of the Board, he does not receive any additional compensation for such service. Ms. Pugliese is not included in this chart as she did not serve as a director of the Company for any portion of 2022. (1) Mr. Morikis elected to convert the cash fees he earned during the fourth quarter of 2017 to Company common stock pursuant to theNon-Employee Director Stock Election Program.(2)The amounts in this column represent the aggregate grant date fair value of the stock awards granted in 2022, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“FASB ASC Topic 718”). The grant date fair value on May 3, 2022 (the grant date) was $63.32$73.94 per share. Ms. Hackett elected to defer receipt of her stock award until the January following the year in which she ceases serving as a director pursuant to the Company’sNon-Employee Director Deferred Compensation Plan (as amended and restated January 1, 2013). As of December 31, 2017,2022, Ms. Hackett and Messrs. Morikis and Thomas had the following number of deferred shares outstanding: 27,017,34,815, 5,742, and 2,914, respectively. (3)(2)executiveconcierge health program.service program and director insurance programs. Under the Company’s matching gift program, the Company makes a 100% match of gifts totaling up to $5,000 annually made by the director to an eligible charitable institution.Compensation Discussion and Analysis (“CD&A”)&A describes the Company’sFortune Brands’ executive compensation program and explains how the Compensation Committee made compensation decisions for the following Named Executive Officers (the “NEOs”)NEOs in 2017:2022*:Named Executive Officer Nicholas I. Fink Patrick D. Hallinan** Cheri M. Phyfer Sheri R. Grissom Hiranda S. Donoghue Chief Executive Officer Executive Vice President & Chief Financial Officer Executive Vice President, Group President Executive Vice President, Chief Human Resources & Transformation Officer Executive Vice President, Chief Legal Officer & Secretary * PositionPursuant to SEC disclosure rules, we are required to include Mr. R. David Banyard, former President, Cabinets, and Mr. Brett E. Finley, former President, Outdoors & Security, as additional NEOs although they were no longer serving as executive officers of the Company as of December 31, 2022. In connection with the Separation, Mr. Banyard resigned from the Company During 2017Christopher J. Kleinon December 14, 2022 in order to assume the position of President and Chief Executive Officer Fortune Brandsof MasterBrand. As a result of the Company’s restructuring, Mr. Finley’s position was eliminated and he ceased serving as an executive officer on September 6, 2022 and continued in an advisory capacity until December 31, 2022.Patrick. D.**Senior resigned as Executive Vice President and Chief Financial Officer Fortune BrandsDavid M. RandichPresident, MasterBrand Cabinets (“MBCI”)Nicholas I. FinkPresident, Global Plumbing Group (“GPG”)Robert K. BiggartSenior Vice President, General Counsel and Secretary, Fortune BrandsE. Lee Wyatt, Jr.*Executive Vice President, Fortune Brands*Mr. Wyatt retired fromof the Company on December 31, 2017. He is included as an additional NEO because he served as the Company’s Chief Financial Officer through June 2017. Effective July 1, 2017, Mr. Hallinan assumed the role of the Company’s Chief Financial Officer.effective March 2, 2023.main sections:an Executive Summary;
Number23 25 26 28 the Results of the 2017Say-on-Pay Vote;a discussion of the Compensation Committee’s Philosophy and Process for Awarding NEO Compensation; anda description of the Types and Amounts of NEO Compensation Awarded in 2017.2017 Business & Financial Highlights1In 2017,During 2022, the Company and its management team executed on key transformative initiatives in the face of a challenging economic environment. Despite a slowing market due to interest rate increases and inflation, we drove profitable growthsuccessfully completed the Separation of our Cabinets business, rebranded our Company and delivered increasesreorganized our business model under a centralized leadership team. While executing on multipleour transformative initiatives, we also reduced our fixed cost base and maintained investments in our key financialstrategic initiatives, including our digital transformation, brand-building, and efficiency measures. The measures marked with an * below were linkedincremental capacity, which are viewed as critical to 2017 executive compensation.our long-term growth. Our 2022 results were:Net Sales increased 6% to $5.3 billionOperating Income (OI*) increased 10% to $725 millionEarnings per share (EPS*) increased 12% to $3.08Return on Invested Capital (ROIC*) increased 4% to 13.9%Operating Margin (OM*) increased 50 basis points to 13.7%Net Income (NI) increased 10% to $479 millionGPG continued to drive growth through acquisitions, expanding its portfolio of brandsCompleted the purchase of Shaws of England, a UK premium sink company, and Victoria + Albert, a UK premium free-standing bath tub company.1All data presented in this CD&A is from continuing operations and all references*OI,Fortune Brands (inclusive of Cabinets). Please refer to Appendix A for a reconciliation of EPS ROIC, OM and NI are unaudited and on a before charges/gains basis. See Appendix A of this Proxy Statement for definitions and a description of the methodology of thesenon-GAAP measures.basis to GAAP EPS.COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)The chart below shows how Fortune Brands grew total shareholder return (TSR)We believe our compensation program is designed to and reflectslinks compensation to performance as reflected by the Company’s long-term stock price performance vs. publicly-traded companies inimpact of the Company’s 2017 Peer Group2 (see page 24 for more information) since the beginning of 2012. TSR has consistently exceeded the Company’s Peer Groupeconomic environment on our 2022 financial results and S&P 500 index performance over the long-term.(TSR %)The following charts show how the Company has delivered substantial growth in Net Sales, OI, EPS, ROIC, OM and NI since 2012. The compensation earned by the NEOs in 2017 reflected the Company’s strong financial performance in 2017 and continued execution against many of the metrics2022. We believe that the Compensation Committee believes are tiedactions taken by the leadership team in 2022 have positioned the Company to increased shareholder value.continue to grow and create long-term value for our stockholders. We also believe that our compensation program and the goals used within our program continue to incentivize and reward performance.2Chart data from Bloomberg. Data measured from January 1, 2012 through December 29, 2017. Peer Index includes average of individual performance of Allegion plc, A.O. Smith Corporation, Armstrong World Industries Inc., Ball Corp., Borgwarner Inc., Dover Corp., Ingersoll-Rand Plc, Leggett & Platt, Incorporated, Lennox International Inc., Masco Corporation, Mohawk Industries, Inc., Newell Brands Inc., Owens Corning Inc., Parker-Hannifin Corp., Pentair plc, RPM International Inc.,Snap-On Inc., Stanley Black & Decker, Inc., The Sherwin-Williams Company and USG Corporation.COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)20172022 Compensation Highlights3We use ourThe Company’s compensation program to attract, motivate and retain the executives who lead our Company. The Compensation Committee has established programs and practices that are designed to pay for performance and to align management’s interests with those of the Company’s stockholders. We believestockholders while attracting, motivating and retaining superior talent to lead our Company. The Compensation Committee believes that our compensation program helps drive Companyincentivizes high performance by providing a significant amount of compensation in the form ofas equity, by utilizing both short-term and long-term incentives that are tied to Company performance and by making efforts to balancebalancing fixed (base salary) and variable (annual cash incentive and equity) compensation. The Compensation Committee continues to believe that linking compensation to certain performance metrics results in increased profits and stronger returns, which supports improving stockholder returns. The 2017material components of our 2022 executive compensation program was guidedare summarized in the following chart:following principles:Equity-based compensation aligns executives’ interestsNEOs, with stockholders, drivesunvested PSAs being converted into time-based RSUs based on projected performance and facilitates retention of superior talent.In 2017,results calculated based on actual performance from the annual equity grants represented 68% of Mr. Klein’s annual total target compensation and 55% (on average)beginning of the other NEOs’ annual total target compensation.In 2017, annualapplicable performance period through the end of the fiscal quarter immediately preceding the Separation (or September 30, 2022) and expected performance through the remainder of the applicable performance period. Each outstanding equity award remains subject to continued employment through the vesting date of the original awards. Mr. Banyard’s outstanding equity awards for NEOs consistedwere converted into equity awards of performance share awards (PSAs), restricted stock units (RSUs) and stock options:will settle in Company stock only if the minimum performance goals set for the cumulative three-year performance period are exceeded; will settle in Company stock, in three equal annual installments, assuming the NEO remains employed through each vesting date; andStock options allow the NEO to purchase Company stock at the market price set on the grant date, vest in three equal annual installments, assuming the NEO remains employed through each vesting date, and expire ten years from the grant date.Equity and Incentive compensation linked to increasing profits and returns.The vast majority of compensation awarded to NEOs ispay-at-risk, or variable dependent upon Company performance. In 2017, 86% of Mr. Klein’s annual total target compensation and 74% (on average) of the other NEOs’ annual total target compensation waspay-at-risk.2017-2019 PSAs are based on EBITDA (weighted 75%) and RONTA (weighted 25%) for the January 1, 2017 through December 31, 2019 performance period.The value of stock options increases only if the Company’s stock price increases after the date of grant.The annual incentive awards were based on the following metrics:same methodology described above.The Company’s EPS, ROIC and Working Capital Efficiency (WCE) for Messrs. Klein, Hallinan, Biggart and Wyatt;MBCI’s OI, OM and WCE for Mr. Randich; andGPG’s OI, Sales Growth Above Market (Sales) and WCE for Mr. Fink.3Mr. Wyatt retired from the Company in December 2017. In anticipation of his retirement, Mr. Wyatt’s 2017 annual equity grant was comprised entirely of RSUs. Due to this difference in the equity mix compared to the other NEOs, all references to NEOs in this 2017 Compensation Highlights and in anypay-at-risk percentage shown throughout the CD&A exclude Mr. Wyatt.COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)Base salary represents the smallest portion of annual total target compensation.continuously makes effortsapproved a change to appropriately balance fixed (base salary) and variable (annual cash and equity) compensation for each NEO, while remaining competitive with the market.Fixed compensation represented 14% of Mr. Klein’s and 26% (on average)metrics used in our annual incentive plan program by aligning to the use of the remaining NEOs’ 2017 annual total targetsame consolidated corporate wide metrics for all executive officers in order to support the Company’s restructured organization beginning in 2023.(1) 2017:2022:Summary of 2017 NEO Annual Total Target Compensation Named Executive Officer 2017 Annual
Base Salary(1) 2017 Annual
Incentive
Target Value 2017 Long-
Term Incentive
Award Target
Value(2) 2017 Total Target
Compensation $1,135,000 $1,475,500 $5,500,000 $8,110,500 $550,000 $412,500 $1,250,000 $2,212,500 $615,000 $492,000 $1,325,000 $2,432,000 $535,000 $401,250 $1,100,000 $2,036,250 $500,000 $375,000 $950,000 $1,825,000 $800,000 $680,000 $2,000,000 $3,480,000 Summary of 2022 NEO Annual Total Target Compensation Named Executive Officer 2022 Annual
Incentive
Target Value
Term Incentive (1) effective March 1, 2017 for all NEOs, except forin effect as of December 31, 2022, with the exception of Mr. HallinanBanyard, which became effective in July 2017 when he assumedreflects his salary immediately prior to the role of Chief Financial Officer of the Company.Separation. (2) 2017. the Company’s annual say on pay vote. The Compensation Committee interpreted the high level of stockholder support as endorsement of the Company’s executive compensation program and did not make any changes to the Company’s executive compensation program in response to the 2022 Say on Pay vote. (3)The amounts shown reflect Mr. Hallinan’s annual total target compensation effective July 2017 when he assumed the role of Chief Financial Officer.The Board believes that this approach to our compensation program, along with our leading market positions and structural competitive advantages, have allowed our Company to continue to outperform the market for our products in the continued housing market recovery.RESULTS OF THE 2017SAY-ON-PAY VOTEIn 2017, we sought an advisory vote from our stockholders on NEO compensation (commonly referred to as“Say-on-Pay”). More than 95% of the votes cast were in support of NEO compensation. Even though our stockholders’ showed that they strongly endorsed our NEO pay practices, the Compensation Committee evaluated the executive compensation program and concluded that the compensation program provides rewards that it believes motivate our NEOs to maximize long-term stockholder value and encourage long-term retention. Accordingly, the Compensation Committee did not make any changes to the design of the Company’s executive compensation program in response to the 2017Say-on-Pay vote.Prior to the 2017Say-on-Pay vote, the Compensation Committee decided to change the metrics used for 2017-2019 PSAs from EPS to EBIDTA (weighted 75%) and from ROIC to RONTA (weighted 25%). This change eliminated the duplication that had historically been in our executive compensation program between the short-term and long-term performance metrics (see page 29 for information about this change).COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)value, while at the same time avoid incentives that encourage unnecessary or excessive risk taking. To accomplish this, the Compensation Committee has designed anvalue. The 2022 executive compensation program that it believes:was designed to:Creates and reinforces apay-for-performance culture by tying compensation to Company performance;Aligns management’s interests with those of the Company’s stockholders;Attracts, retains and motivates superior talent through competitive compensation;Provides incentive compensation that promotes performance without encouraging excessive risk-taking; andRecognizes the cyclical nature of our business.When setting annual NEO compensation, theThe Compensation Committee uses compensation data from a group of similarly sized peer companies to evaluate our compensation arrangements against those of the Company (the “Peer Group”). Annually,With the help of the Compensation Committee’s consultant, each year the Committee reviews the Peer Group and decides whether any changes should be made. As recommended by WTW, the Compensation Committee reviews and assesses the appropriateness of the Peer Group. Based on Meridian’s recommendations, the Committee made modificationsdid not make any changes to the composition of the Peer Group used for evaluating 2017 executiveto evaluate 2022 compensation decisions by excluding Fastenal Company (due to the different nature of its business), companies that were not publicly-traded (Andersen Corporation, Kohler Co. and Pella Corporation) and companies that were acquired or pending acquisition (Jarden Corporation, Nortek, Inc. and Valspar Corporation). Eight new S&P 500 companies were added to the group based on their classification as cyclical companies with similar revenue and market capitalization that were more aligned with the Company. The Peer Group reported a median 2016 revenue of $6.24 billion and market capitalization of $10.643 billion.decisions. The Peer Group consisted of the following companies:2022 Peer Group plc*plc Leggett & Platt, Incorporated• Lennox International Inc. Pentair plc*• RPM International Inc. Lennox International Inc.RPM International Inc.Armstrong World Industries, Inc.• Masco Corporation • The Sherwin-Williams Company * • Mohawk Industries, Inc. • Snap-On Inc. ** • Newell Brands Inc. • Stanley Black & Decker, Inc. *Ingersoll-Rand Plc* • Trane Technologies plc Parker-Hannifin Corp.* USG• Parker-Hannifin Corp.• Whirlpool Corporation • Pentair plc *Denotes companies thatadded toused at the 2017time the Peer Group.Group was compiled.MeridianWTW provided the Compensation Committee with competitivemarket data to consider in setting each element of compensation of the NEOs for use in evaluating and setting NEO 2017 base salary, annual cash incentive awards and long-term incentive awards (“market data”). When evaluating 2017 total target compensation, the2022. This market data primarily consisted of revenue size-adjusted competitiverevenue-size-adjusted general industry survey data received from Aon Hewitt,WTW, supplemented with Peer Grouppeer group proxy data providing a supplemental viewpoint.data.responsibilities of the role, experience and impact of individual executives, and individual performance. In determining executive compensation, the Compensation Committee considers all forms of compensation and uses appropriate tools – such as tally sheets and market data – to review the value delivered by each component of compensation. When evaluating total target compensation, to each executive. Accordingly, the CompensationCOMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) with respect to any individual it is appropriate for total target compensation or any particular element of compensation to meet, exceed or fall below the 50th percentile of the market data.data for an NEO. The factors that might influence the amount of compensation awarded include market competition for a particular position, the strategic importance of the position, retention considerations, an individual’s performance, possession of a unique skill or knowledge set, proven leadership capabilities or other business experience and internal pay equity.Evaluating NEO PerformanceAt the end of each year,26in conjunctiondetermined that the Peer Group would need to be adjusted to align with the othernon-management membersCompany’s refined market and peers following the completion of the Separation. The criteria used to evaluate and select the 2023 Peer Group included comparable sized companies (based on revenue) that were more aligned with our business strategies, such as companies that manufacture household products and provide specialized consumer services, including security and alarm services, and companies with strong brand recognition and technology enabled products. The criteria used to evaluate and select the 2023 Peer Group also eliminated businesses with less relevance to our Company’s business strategies, such as those in the auto parts and equipment and specialty chemical industries. With the assistance of WTW, the Compensation Committee approved the following Peer Group for use in connection with 2023 compensation decisions:2023 Peer Group • Mohawk Industries, Inc. • Tempur Sealy International Inc. • Newell Brands Inc. • The Clorox Company • Owens Corning • Trane Technologies plc • Resideo Technologies, Inc. • Whirlpool Corporation • Roper Technologies, Inc. • Xylem Inc. • Snap-On, Inc. • Zurn Elkay Water Solutions Corporation • Stanley Black & Decker, Inc. conductsconducted a formal evaluation of the Company’s Chief Executive Officer (the “CEO”) to analyze hisCEO’s performance against strategic,certain financial, operational, business strategy (including advancing the Company’s ESG and operational goalsDEI strategies) and personal development objectives established at the beginning of the year. TheProgress on such objectives is regularly reviewed throughout the year with the Board. At the end of the year, the Board discusses the CEO’s accomplishments and achievement of the goals with the CEO and in executive session without the presence of the CEO. Following the annual performance review, the Compensation Committee then setsutilizes market data provided by the compensation consultant to set the CEO’s annual total target compensation after reviewing related recommendations and market data from Meridian. Thebased on the results of the performance assessment. For the other NEOs, the CEO reviews and evaluates each of the other NEOs relative to their performance against strategic, financial and operational goals established at the beginning of the year and then presents his evaluations to the Compensation Committee. The Compensation Committee reviews the CEO’s recommendations and the market data from Meridianthe compensation consultant and then independently sets each of the other NEO’s annual total target compensation. Regarding Executive Compensationprocedures for itself and for certain executives of the Company, including the NEOs, many of which it believes representfollows commonly viewed best practices in corporate governance. The chart below summarizes these policies. Pay-for-PerformancePay for PerformanceA significant portionvast majority of NEO annual total target compensation is tied to Company performance. In 2017, 86%2022, 88% of Mr. Klein’sFink’s and 74%75% (on average) of allour other NEOs’ (excluding Mr. Wyatt) annual total target compensation waspay-at-risk. ClawbackPolicyThe Company may recover all or part of annual cash incentives and equity incentive Independent Compensation Consultantadvises the Compensation Committee on executive compensation under certain circumstances.matters. AnnualAssessmentMaximum Payouts on IncentivesAnnual cash incentive awards and MitigationPSA payouts are capped at 200% of RisksThe Compensation Committee annually assesses whether our compensation programs, plans and awards are designed and working in a way that discourages excessive risk taking.target. Double-Triggerin Tally SheetsTally sheets and wealth accumulation analyses are reviewed annually before making compensation decisions.✓MaximumPayouts on IncentivesAnnual cash incentive awardsand PSAs are capped at 200%. ✓ TallySheetsTally sheets and wealth accumulation analyses are reviewed annually before making compensation decisions.StockOwnership Robust Stock Ownership GuidelinesWe maintain rigorous stock ownership guidelines for NEOs. Executives are required to hold 50% of net shares from the vesting of PSAs and RSUs until the ownership requirement is met. IndependentCompensation ConsultantMeridian advises the Executive Sessions The Compensation Committee onperiodically meets in executive compensation matters. Meridian is prohibited from performing services forsession without the presence of management.×will.”will”. The Company does not have employment contracts with any of its NEOs or other executive officers. ×officersexecutives are prohibited from hedging, pledging or otherwise encumbering sharesengaging in derivative transactions designed to offset a decrease or increase in the market value of the Company’s common stock, including holding shares in a margin account.stock.×and related termination or for perquisites (other than relocation expenses). ××The CEO hasCertain executives have limited personal use of Company aircraft, however, he must reimburse the Company for such use.subject to reimbursement obligations. COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)20172022Summary of ExecutivePay-at-Risk Compensation Elements20172022 annual target compensation, the Company provided both fixed (base salary) and variable (annual cash incentivebonus, PSAs, RSUs and equity)stock options) compensation to the NEOs. The vast majority of annual target compensation is at risk to each NEO because the compensation that is actually paid is variable dependent upon Company (or individual operating company)the Company’s performance andor stock price. As a result, the amount of compensation actually paid to an NEO may significantly vary from the NEO’s target compensation that was awarded by the Compensation Committee. compensation.20172022 annual target compensation, including the mix of short-term and long- termlong-term incentives, as well as the amount ofpay-at-risk for the CEO and the average for the other NEOs. These charts illustrate annual target compensation.COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)28 Provided to NEOs in 2017WeBase salaries provide a portionfixed level of 2017cash compensation in the form of base salaryand are paid in order to attract retain and motivateretain our NEOs. In setting 2017The Compensation Committee sets each NEO’s base salary levels,to be appropriate and commensurate with the NEO’s position, experience and performance.(together with Mr. Kleinincreased the annual base salaries for the NEOseach NEO, other than himself) consideredMs. Donoghue, to better align with competitive market data and in recognition of each individual’s prior year performance. Ms. Donoghue’s initial base salary was determined at the time she joined the Company in December 2021 based on the competitive market data, the individual performancecompensation received from Ms. Donoghue’s prior employer and the competitiveness of annual total target compensation of each NEO. For eachto be comensurate with her experience. As a result of the NEOs other than Mr. Hallinan, the annual base salary increases ranged from3.1-4.9%. Mr. HallinanCompany’s transformation and reorganization, Ms. Phyfer was promoted from chief financial officer of Moen to Seniora newly created position, Executive Vice President – Finance of Fortune Brandsand Group President, where she is responsible for the commercial businesses, brands, innovation and product development across our organization. In connection with her promotion to this position in January, at which time heSeptember 2022, she received an increase to hisher base salary of 17.7%. When he assumed12% to bring her compensation in line with market data for a position of similar scope. Below are the role2022 and 2021 annual base salaries for each NEO, effective as of Chief Financial OfficerDecember 31st of the Companyapplicable year (or, in July, he received an additional increase tothe case of Mr. Banyard, his base salarylast day of 22.2%. Below isemployment with the 2017 and 2016 annual base salary for each NEO:Company): $1,135,000 $1,100,000 $550,000 $382,427 $615,000 $590,000 $535,000 $510,000 $500,000 $485,000 $800,000 $775,000 pay-for-performance pay for performance culture because the payment is based on the Company’s financial results of the Company, or where applicable, our operating companies, and helps the Company maintain a competitive compensation program. Annually,operational results. Each year, the Compensation Committee sets a target percentage of base salary used to determine each NEO’s cash incentive.bonus payout at 100% of target.In 2017, theThe Compensation Committee considered competitive market data and the individual performance of each of the NEOs and decided to increaseincreased the percentage of base salary used to determine the 2022 bonus awards for Messrs. Randich’s, Fink’sFink, Hallinan and Biggart’s annual cash incentive award by 10%Banyard and Mses. Phyfer and Grissom from the percentage of base salary used to determine their 2021 bonus awards. The increases were made to better align their awardswith market data and for internal pay equity purposes. The Committee did not make any adjustment to the target bonus opportunities for any of the other NEOs. Ms. Donoghue’s annual incentive target was established at the time she joined the Company in December 2021 based on the competitive market data for similar positions and the Company’s internal pay practices. In connection with Ms. Phyfer’s promotion in recognition of each individual’s performance. For Mr. Hallinan, his target percentage was set at 50% for the period January to June. When he assumed the role of Chief Financial Officer, hisSeptember 2022, her target percentage was increased from 85% to 75%90% to bring her compensation in line with market data for the perioda position of July to December.similar scope. As a result, Mr. Hallinan’s 2017Ms. Phyfer’s 2022 annual cash incentive award was proratedpro-rated to reflect the portion of the year in which hisher target was set at 50%85% and 75%90%, respectively. The Compensation Committee did not to make any increases in the percentages used to determine thetarget annual cash incentive awards for Messrs. Klein and Wyatt. The target percentagebonus opportunities for each NEO for 2017 was:of the NEOs in 2022, reflected as a percentage of base salary, were:Named Executive Officer
as a Percentage of
Base Salary 2022Named Executive OfficerNicholas I. Fink Percentage ofBase Salary(as of 12/31/17)Christopher J. Klein130%130% 75%DavidCheri M. RandichPhyfer 80%Nicholas I. FinkSheri R. Grissom 75%Robert K. BiggartHiranda S. Donoghue 75%E. Lee Wyatt,R. David Banyard, Jr. Annually,Bonus payouts under the Compensation Committee also sets the minimum, target and maximum annual performance metrics and goals used to determine each NEO’s annual cash incentive award. The annual incentive payouts areawards were based on the achievement of theapplicable performance goals and can rangecould have ranged from 0% to 200% of target. To establish challenging performance goals under the annual cash incentive program, the Compensation Committee reviewed the target performance goals and actual results for awards paid in 2016 and2021, as well as the 20172022 expected growth rate in theCOMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)as well asthe Company’s three-year operating plan and key assumptions relating to share gains, pricing, material inflation and productivity. No changesFor 2022, the Compensation Committee approved the following performance metrics and weighting for bonus awards:* madesubject entirely to the typessatisfaction of corporate performance measures usedmetrics described above, while the bonus awards for each of Messrs. Banyard and Finley were subject entirely to determine 2017 annual incentive awards as compared to 2016, which were as follows:For Messrs. Klein, Hallinan, Biggartthe satisfaction of their respective business segment performance metrics set forth above. Ms. Phyfer’s award was calculated using a target bonus opportunity of 85% of base salary and Wyatt, Fortune Brands’ EPS (weighted 60%), ROIC (weighted 20%)based on Water Innovations business segment performance results for the period between January 1, 2022 and company-wide WCE (weighted 20%);For Mr. Randich, MBCI’s OI (weighted 60%), OM (weighted 20%)September 6, 2022 and WCE (weighted 20%);a target bonus opportunity of 90% of base salary andFor Mr. Fink, GPG’s OI (weighted 60%), Sales (weighted 20%) based on corporate performance metrics for the period between September 6, 2022 and WCE (weighted 20%).December 31, 2022.thesethe performance measures chosen for the 2022 bonus awards focus executives on maximizing long-term stockholder value (EPS), operational efficiency (ROIC, OM and WCE)sales and profitability (OI, OM and Sales).for the Company. The following table sets forth the minimum (0% payout), target (100% payout) and maximum (200% payout) financial performance measures, the actual performance results, the percentage payout and the amount paid to each NEO for the 20172022 annual cash incentive awards:(1) OI minimum, target and maximum performance measures and actual performance results are shown in millions.(2) EPS, ROIC, OI and OM actual performance were adjusted to exclude the effect of currency fluctuations.(3) Mr. Hallinan’s award was prorated based on 50% of his base salary for the period January 1 – June 30 2017 and 75% of his base salary for the period July 1 – December 31, 2017.(4) Mr. Randich’s goals related to MBCI’s performance.(5) Mr. Fink’s goals related to GPG’s performance.(6) Sales Growth Above Market was determined by calculating the percentage change in GPG’s annual sales in excess of the percentage change in the plumbing market’s prior year sales.COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED) Results and Awards
and Weighting % Payout EPS(60%) $5.44 $6.45 $7.45 $6.36 RONTA(20%) 48.2% 56.4% 64.6% 46.3% 57.7% $900,120 WCE(20%) 18.3% 16.6% 15.2% 20.2% EPS(60%) $5.44 $6.45 $7.45 $6.36 RONTA(20%) 48.2% 56.4% 64.6% 46.3% 57.7% $363,510 WCE(20%) 18.3% 16.6% 15.2% 20.2% OI(60%) $602.0 $688.6 $775.3 $624.3 SALES(20%) 1.9% 3.9% 5.9% -6.6% 24.5% WCE(20%) 19.3% 17.5% 16.0% 23.5% $212,086 EPS(60%) $5.44 $6.45 $7.45 $6.36 RONTA(20%) 48.2% 56.4% 64.6% 46.3% 57.7% WCE(20%) 18.3% 16.6% 15.2% 20.2% EPS(60%) $5.44 $6.45 $7.45 $6.36 RONTA(20%) 48.2% 56.4% 64.6% 46.3% 57.7% $203,970 WCE(20%) 18.3% 16.6% 15.2% 20.2% EPS(60%) $5.44 $6.45 $7.45 $6.36 RONTA(20%) 48.2% 56.4% 64.6% 46.3% 57.7% $201,950 WCE(20%) 18.3% 16.6% 15.2% 20.2% OI(60%) $275.7 $344.7 $413.6 $376.4 OM(20%) 10.1% 11.5% 12.6% 11.5% 93.1% $623,100 WCE(20%) 14.0% 12.7% 11.6% 14.7% OI(60%) $318.8 $373.8 $428.7 $312.8 OM(20%) 15.6% 16.6% 17.6% 14.5% 0.0% $0 WCE(20%) 22.5% 20.4% 18.7% 24.8% (1) (2) management’sthe interests of management with those of stockholders, reinforces apay-for-performance culture and helps the Company maintain a competitive compensation program.our stockholders. Annually, the Compensation Committee sets a target equity award value and determines the types of equity to award.20172022 target long-term equity award values, the Compensation Committee (together with Mr. Klein for NEOs other than himself) considered competitive market data and the individual performance and the competitiveness of total compensation of each ofNEO. The Compensation Committee increased the NEOs. Mr. Klein’starget long-term equity award values granted to all NEOs, other than Ms. Donoghue, from the 2021 target long-term equity award value was increased by ten percent (10%) in recognition of his performanceprior year performance. In addition, the award values for Messrs. Fink and Hallinan and Ms. Phyfer were increased to better align with the market data. Mr. Hallinan received an increase in his annual equity award value due to his promotion in January 2017. When he assumed the role of Chief Financial Officer in July 2017, he was granted an additional equity award to bring his total 2017 award value in line with the market data for his position.similar positions. Ms. Donoghue’s 2022 target annual equity value was established at the time she joined the Company in December 2021. Below isare the 2017 target equity award valuevalues for 2022 and the 2016 target award value2021 for each NEO:For each NEO (other than Mr. Wyatt), the 2017 target long-term equity award value was comprised equally31Named Executive Officer 2021 Target Annual
Equity Award Value 2022 Target Annual
Equity Award Value (1) (2) PSAs (with the PSAs valued assuming achievement of the target performance level), RSUs and stock options. Given Mr. Wyatt’sMs. Grissom’s planned retirement, at the end of 2017, his annualher equity award was comprisedgranted solely ofin RSUs which vestedthat were scheduled to vest on December 31, 2017,28, 2022, subject to hisher continued employment. Foremployment through such date, in order to support a smooth transition of her role by retaining Ms. Grissom through 2022. As the remainder of this section, references toCompany’s Separation and reorganization projects developed over the NEOs excludes Mr. Wyatt becausesecond half of the different mix of equity grantedyear, Ms. Grissom’s retirement was delayed in order to him.assist the Company and to have her lead its transformation and reorganization projects.2017 will2022 were awarded to be settled in shares of the Company’s common stock only if the Company exceeds specified EBITDA (earningsbased on earnings before interest, tax,taxes, depreciation and amortization), weightedamortization (“EBITDA”) (weighted 75%,) and RONTA (returnreturn on net tangible assets), weightedinvested capital (“ROIC”) (weighted 25%, performance goals during) for the cumulativethree-year performance period from January 1, 2017 through2022 to December 31, 2019. Payouts will2024, with payouts that could range from 0% to 200% of the target award based on performance. No shares will be paid unlessUnder the original terms of the PSAs, if the Company failed to achieve the minimum established performance goals are exceeded and payout, if any, will not occur until early in 2020, following completionthreshold, none of the performance period and certificationPSAs would vest. See below for further information regarding the treatment of the 2022 PSAs, along with all other outstanding PSAs for prior performance results byperiods, in connection with the Compensation Committee.Separation.In 2017, the Compensation Committee evaluated the metrics used by the Company and the Peer Group companies and decided to change the performance metrics used to determine the long-term equity awards granted in 2017 to be based on EBITDA and RONTA. This change in long-term goals eliminated the duplication that previously existed between the Company’s short-term and long-term performance metrics. The Compensation Committee based the performance goals on EBITDA and RONTAROIC because it believes that these metricsincentivizemetrics incentivize management to grow earnings in a focused and efficient way that rewards operating excellence and aligns the interests of management with our stockholders.The EBITDA and RONTA goals were intended to be challenging. The Compensation Committee believes that awarding PSAs with a cumulative three yearthree-year performance goal drives long-term sustained growth and, as a result, management is rewarded if the long-term growth goals are exceeded. In establishing performance goals for PSAs, the Compensation Committee considered the Company’s strategic operating plan, the expected3-year three-year compound market growth rate, as well as key assumptions relating to share gains, pricing, material inflation and productivity.focus management on increasingincent NEOs to increase stockholder returns and further align the interests of managementNEOs with stockholders.COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)awardedgranted to the NEOs generally vest in three equal annual installments, assuming the NEO remains employed through each annual vesting date. RSUs serve as a long-term retention devicetool in a cyclical business as an executivebecause the NEO must remain employed with the Company through each of the three annual vesting dates to receive all of the shares. As noted above, Ms. Grissom’s 2022 RSU grant vested on December 28, 2022, subject to her continued employment through such date. The Compensation Committee also believes that theRSUs represent at-risk compensation since their value of RSUs is at risklinked directly to the NEOs because the value of RSUs will fluctuate based on the Company’s stock price and only grows when the Company’s long-term stock price increases.share price.granted in 2017allow an NEO to purchase a specific number of shares of Company stock at a fixed price (i.e., the share price set on the grant date). The 2022 stock options vest in three equal annual installments, assuming the NEO remains employed through each annual vesting date, and expire ten years from the date of grant.grant date. The Compensation Committee believes that stock options are performance-based and at-riskbecause the value of stock options grows when the Company’s long-term stock price increases. The value of stock options is at risk to the NEOs as theyNEO only realize arealizes value to the extent the Company’s stock price increases after the grant date.2015-2017 Performance ShareImpact of the Separation on Company Equity Awards PayoutIn 2015,Consistent with the treatment of other Fortune Brands employees, each outstanding RSU and stock option held by the NEOs (other than Mr. Banyard) immediately prior to the Separation was adjusted to preserve the intrinsic value of the awards. Each outstanding RSU and stock option remain subject to continued employment through the vesting date of the original awards. Consistent with the treatment of other employees who remained with MasterBrand, Mr. Banyard’s outstanding RSUs and stock options were converted into RSUs and stock options of MasterBrand in a manner intended to preserve the value of the awards prior to the Separation.awarded allbased on performance through September 30, 2022 and projected performance through the end of the then-serving NEOs PSAs to be settled in early 2018 if the Company achieved certain EPS and ROIC goals during the cumulativeeach performance period from January 1, 2015 through December 31, 2017, with EPS weighted 75% and ROIC weighted 25%. The Compensation Committee certified a payout level of 162.3%. The threshold, target and maximum goals for cumulative EPS and average ROIC from January 1, 2015 through December 31, 2017 and the Company’s actual results were as follows:each outstanding performance cycle was:Metric Threshold Target Maximum Actual
Performance % of Payout $6.51 $7.22 $7.97 $7.90 162.3% 11.9% 13.2% 14.5% 12.9% Approved Achievement of the 2015-2017 EPS and ROIC performance goals,PSAs for all of the NEOs receivedoutstanding cycles were converted into the following number of shares of Company common stock pursuant to the terms of the award agreements:RSUs:Shares GrantedChristopher J. Klein Shares Converted 52,260 3,408DavidCheri M. RandichPhyfer 12,497Nicholas I. FinkSheri R. Grissom 11,685Robert K. BiggartHiranda S. Donoghue 9,5754,836 Lee Wyatt, Jr.Finley 20,936BenefitsRetirement33Home & SecurityInnovations Retirement Savings Plan (the “Qualified Savings Plan”), atax-qualified defined contribution 401(k) plan. The Compensation Committee believes that the Qualified Savings Plan benefits are consistent with competitive pay practices and are an important element in attracting and retaining talent in a competitive market.Code.Internal Revenue Code (the “Code”). Please see the narratives and the “2017“2022 Nonqualified Deferred Compensation” table on pages 38-3941-42 of this Proxy Statement for further information regarding these retirement benefits.maintains a frozentax-qualified defined benefitfroze pension plan benefit accruals in 2016 and as anon-qualified defined result none of the NEOs are entitled to a benefit pension plan. Benefit accruals were frozen on December 31, 2016,under these plans. Mr. Hallinan retained a retirement benefit that accrued while he was an employee of MasterBrand from 2005 through 2008, which means that participants, including Mr. Klein, no longer accrue additional benefits.was transferred to MasterBrand as a result of the Separation.COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)qualifying“qualifying termination of employmentemployment” (i.e., termination by the Company without “cause” or by the NEO for “good reason”) or in the event of a qualifying termination of employment following a change in control.practicepractices and attract and retain superior talent. The Compensation Committee also believes that these Severance Agreements promote management independence and keepskeep management focused on the Company’s business in the face of any potential change in control events.operating company)business) and a qualifying termination of employment (i.e., termination by the Company without “cause” or by the NEO for “good reason”) before any enhanced benefits can be paid following a change in control. The NEOs are not entitled to any tax gross ups under the Severance Agreements, including those related to thechange-in-control related excise taxes imposed under the Code. Please see“PotentialCompany’s reorganization, Mr. Finley’s position was eliminated and he stepped down as an executive officer of the Company on September 6, 2022, continuing to serve the Company in an advisory capacity until December 31, 2022. In connection with his departure, Mr. Finley became eligible to receive separation benefits under his Severance Agreement following his separation of employment on December 31, 2022. In connection with his separation, the Compensation Committee also approved an extension of the post-termination option exercise period for Mr. Finley’s outstanding stock options for 24 months.as well as the narratives that followon page 43 below for further informationdetails regarding the Severance Agreements, andincluding a quantification of the treatment of outstanding equity upon a qualifying termination of employment or a changebenefits to be received by Mr. Finley in control on pages 40 - 42.connection with his departure from the Company.PerquisitesThe Company provides a limited number of perquisites, which include limited annual use of Company aircraft by Messrs. Klein and Wyatt (the cost of which is reimbursed by the executive based on the cost of a first class airplane ticket) and34examinations.examinations and cybersecurity privacy protection services. The Company also provides certain broad-based plans, which are generally available to employees such as reimbursement of certain relocation expenses incurred when the Company requires an employee to relocate, a matchmatching on charitable contributions and company product purchase programs. In 2022, the Company provided a limited number of perquisites to the NEOs, which included limited use of Company aircraft by Messrs. Fink and Hallinan (the costs of which were reimbursed to the Company based on the cost of a first class airplane ticket for each passenger on a personal flight).is a:payment,payment; or (2) a restatement of the Company’s financial statements for any year which results from fraud or willful misconduct committed by an award holder. The Company also includesAn executive’s unvested RSUs and PSAs and both unvested and vested but unexercised stock options are forfeited and cancelled in the right to recoup all or part ofevent an executive’s other equity awards inemployment is terminated for cause under the terms and conditions of these awards. the following stock ownership guidelines for NEOs and other Company executives, which require them to hold a number of shares equal to a multiple of their annual base salary. The ownership guidelines are as follows: Stock Ownership Level as a Multiple
of Base SalaryChief Executive OfficerCEO Chief Financial OfficerOfficers that report directly to the CEO Operating Company PresidentsSVP Finance and Investor Relations Senior Vice PresidentsLeaders reporting to the Executive Leadership Team 3Vice Presidents11COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)thetheir applicable multiple threshold or fall within the time period allowed to meet the multiple threshold under the stock ownership guidelines. Mr. Hallinan has five years from the date of his appointment as Chief Financial Officer to meet the requirement.2017.2022. ChairA.D. David MackayNorman H. Wesley Name and Principal
Position Year Salary
($)(1) Bonus
($) Stock
Awards
($)(2) Option
Awards
($)(3)
Equity
Incentive
Compen-
sation
($)(4) Change in
Pension
Value &
Nonqualified
Deferred
Compen-
sation
Earnings
($)(5)
Compen-
sation
($)(6) Total
($) (1) *Mr. Hallinan served asChief Financial Officer of Moen Incorporated until January 1, 2017, when he transitioned toactual amount paid during the role of Senior Vice President-Finance at Fortune Brands. He was promoted to Senior Vice President and Chief Financial Officer of Fortune Brands in July 2017.year.(2) **Mr. Wyatt served as Senior Vice President and Chief Financial Officer through June 2017 and as Executive Vice President until his retirement in December 2017.(1)20172022 represent the aggregate grant date fair values calculated in accordance with FASB ASC Topic 718 for RSUs and PSAs granted in 2017.2022. For assumptions used in determining these values, see note 13 to the consolidated financial statements contained in the Company’s Annual Report on Form10-K for the year ended December 31, 2017 (“Form10-K”). 20172022 are calculated based on the probable outcome at the time of the grant that the target performance level will be achieved. Assuming the highest level of performance isachievement was achieved with respect to the 2022 PSAs, the maximum value of the awards as of the grant date fair value for the PSAs granted during 2017 is: $3,666,714would be as follows: $7,150,016 for Mr. Klein; $833,348Fink, $1,999,940 for Mr. Hallinan; $883,374Hallinan, $1,700,010 for Ms. Phyfer, $899,964 for Ms. Donoghue,$2,225,062 for Mr. Randich; $733,388Banyard and $1,574,982 for Mr. Fink;Finley. At the time of the Separation, all outstanding PSAs were converted into RSUs based on performance through September 30, 2022 and $633,360 for Mr. Biggart.projected performance through the remainder of the performance period.(2)(3)20172022 reflect the aggregate grant date fair values calculated in accordance with FASB ASC Topic 718 for stock options granted in 2017.2022. In addition, the amount for Mr. Finley includes $352,427, which represents the incremental fair value incurred in connection with the modificaiton of his option awards to extend the post-termination exercise period. For assumptions used in determining these values, see note 13 to the consolidated financial statements contained in the Company’s Form10-K.(3)Non-Equity Incentive Plans:Column F lists amounts earned as annual cash incentives.(4) (5) Mr. Klein’sthe tax-qualified and Mr. Hallinan’stax-qualified andnon-qualified defined benefit pension plans. The narrative and footnotes followingplan benefits previously accrued by Mr. Hallinan from 2005 through 2008 under the 2017MasterBrand Cabinets Pension Benefits table on pages 37-38 provide additional detail aboutPlan, the pension plans. Messrs. Randich, Fink, Biggart and Wyattliability of which remained with MasterBrand at the time of the Separation. In 2022, the change in Mr. Hallinan’s actuarial value was negative in the amount of ($37,000). None of the other NEOs were not eligible to participate in any of the Company’s defined benefit pension plans. The narrative and 2022 Pension Benefits table on pages 41-42 provide additional details.(5)(6) (a) to the Savings Plan. Matching contributions for 2017and Qualified Non-Elective Contributions to the Qualified Savings Plan were made: by Fortune Brands in the amount of $12,150 for Messrs. Klein, Hallinan, Biggart and Wyatt; by MBCI in the amount of $13,500 for Mr. Randich; and by GPG in the amount of $8,100 for Mr. Fink.(b)Profit Sharing Contributions to the Savings Plan.Profit sharing Matching contributions for 20172022 to the Qualified Savings Plan were made by Fortune Brands in the amount of $18,342$13,725 for Messrs. Klein,Fink, Hallinan Biggart and WyattMs. Grissom, $11,750 for Ms. Donoghue and by GPGMasterBrand for Mr. Banyard in the amount of $13,500$15,250. A Qualified Non-Elective contribution was made by Therma-Tru in the amount of $9,150 for Mr. Fink.Finley.(b) (c) Home & Security,Innovations, Inc. Supplemental Retirement Plan for 2017: $186,5952022: $256,643 for Mr. Klein, $28,363Fink; $100,655 for Mr. Hallinan, $43,993$56,539 for Mr. BiggartMs. Grissom, and $95,711$14,625 for Mr. Wyatt.Ms. Donoghue. A contribution was made to the Global Plumbing GroupWater Innovations Supplemental Retirement Plan for Mr. FinkMs. Phyfer in the amount of $30,836$66,829. A contribution was made to the Therma-Tru Supplemental Executive Retirement Plan for 2017.Mr. Finley in the amount of $22,609. These contributions would have been made under the Qualified Savings Plan but for the limitations on compensation imposed by the Code. These amounts were credited to the executives’ Supplemental Plan accounts in early 2018. (d) Premiums for Life Insurance:The amounts set forthincludefor each NEO are costs associated with the dollar valueCompany’s executive health and cybersecurity privacy protection programs. In 2022, limited use of all life insurance premiums paidthe Company’s aircraft was provided to Messrs. Fink and Hallinan, who each reimbursed the Company for his personal use in an amount equivalent to the cost of a first class ticket for each passenger on these flights. The calculation of incremental cost of personal aircraft usage is based on estimated variable costs to the Company, including fuel costs, crew expenses, landing fees and other miscellaneous variable costs. In 2022, the Company’s incremental cost for personal use of Company aircraft not reimbursed by the applicable employerMr. Fink was $53,167, and by Mr. Hallinan was $3,980 which amounts are in 2017. These amounts were: $4,104 for Mr. Klein; $2,138 for Mr. Hallinan; $984 for Mr. Randich; $2,130 for Mr. Fink; $6,576 for Mr. Biggart; and $15,782 for Mr. Wyatt.2022 GRANTS OF PLAN-BASED AWARDS
Non-Equity Incentive Plan Awards
Stock
Awards:
Number
of Shares
of Stock
(#)
Option
Awards:
Number of
Securities
Underlying
(#)
or Base
Price of
Option
($/Sh)
Date
Value of
Stock and
Option
($)(1) Name and
Grant Date Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) $ 0 $ 1,560,000 $ 3,120,000 68,909 $ 86.90 $ 1,787,499 20,644 $ 1,787,461 0 41,289 82,578 $ 3,575,008 $ 0 $ 582,978 $ 1,165,957 16,384 $ 86.90 $ 425,001 4,908 $ 424,959 0 9,817 19,634 $ 850,005 8,674 $ 86.90 $ 225,004 2,599 $ 225,034 0 5,197 10,394 $ 449,982 15,179 $ 86.90 $ 393,743 4,548 $ 393,789 0 9,095 18,190 $ 787,491 81,771 $ 352,427 2017 EXECUTIVE COMPENSATION (CONTINUED)