DEF 14A: Definitive proxy statements
Published on April 21, 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under § 240.14a-12 |
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2025
Proxy
Statement
and Notice of Annual
Meeting of Shareholders
We compete for
shareholders.
We believe in prioritizing
trust, sustainability, and positive
impact to create long-term value
for all of our stakeholders, including
our shareholders, our employees, our
customers and our communities.
Customer success inspires our innovation.
We believe our most important breakthroughs are the ones that help
our customers succeed, and we strive
to break down barriers and forge new
paths to world-changing innovations
to move our customers forward.
Kaizen is our way of life.
We know we can always
do and be better. Our
commitment to continuous
improvement, grounded in
our Fortive Business System
Inspires us to approach our
work with curiosity. We are
always growing and learning.
We build extraordinary teams for extraordinary results.
We believe we are more together, and we
all have something unique to offer as we
come together to solve problems no
one could solve alone, committed
to a strong and inclusive culture.
Our Values
FORTIVE CORPORATION
6920 Seaway Blvd
Everett, WA 98203
Notice of 2025 Annual Meeting of Shareholders
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ITEMS OF BUSINESS |
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BOARD RECOMMENDATION |
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When: June 3, 2025 at 3:00 p.m., PDT.
Items of Business: 5 proposals as listed here
Date of Mailing: The date of mailing of this Proxy Statement is on or about April 21, 2025.
Who Can Vote: Shareholders of Fortive’s common stock at the close of business on April 7, 2025.
Virtual-Only Meeting: The 2025 Annual Meeting of Shareholders will be held in a virtual-only meeting format.
Where: www.virtualshareholder meeting.com/FTV2025 |
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1. To elect the nine director nominees named in the Proxy Statement, each for a one-year term expiring at the 2026 annual meeting and until his or her respective successor is duly elected and qualified.
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2. To approve on an advisory basis Fortive’s named executive officer compensation.
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3. To approve the amendment and restatement of the 2016 Stock Incentive Plan to extend the term of the plan.
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4. To ratify the appointment of Ernst & Young LLP as Fortive’s independent registered public accounting firm for the year ending December 31, 2025.
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5. To act upon a shareholder proposal regarding special shareholder meetings.
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AGAINST |
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YOUR VOTE IS IMPORTANT. PLEASE SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AT YOUR EARLIEST CONVENIENCE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING. Most shareholders have a choice of voting in advance over the Internet, by telephone or by using a traditional proxy card or voting instruction form. You may also vote during the annual meeting by following the instructions available on the meeting website during the meeting. Please refer to the attached proxy materials or the information forwarded by your bank, broker or other holder of record to see which voting methods are available to you. The rules and procedures applicable to the 2025 Annual Meeting, together with a list of shareholders of record for inspection for any legally valid purpose, will be available at the 2025 Annual Meeting for shareholders of record at www.virtualshareholdermeeting.com/FTV2025. We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. You will be able to attend the meeting online, vote your shares electronically, and submit questions and receive technical support during the virtual meeting. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON June 3, 2025: The Notice of Internet Availability, Notice of Annual Meeting, Proxy Statement and the Annual Report are available at: http://www.proxyvote.com. By Order of the Board of Directors,
Daniel B. Kim Secretary April 21, 2025 |
Table of Contents
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Compensation Discussion and Analysis |
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Proposal 4: Ratification of Independent Registered Public Accounting Firm |
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Proposal 5: shareholder proposal regarding special shareholder meetings |
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Appendix B Amended and Restated Fortive Corporation Stock Incentive Plan |
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Business, Career Development, and Reward Systems |
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About Fortive
Our Company
Fortive Corporation (“Fortive”) is a provider of essential technologies for connected workflow solutions across a range of attractive end markets. Our strategic segments—Intelligent Operating Solutions, Precision Technologies, and Advanced Healthcare Solutions—include well-known brands with leading positions in their markets. Our businesses design, develop, manufacture, and service professional and engineered products, software, and services, building upon leading brand names, innovative technologies, and significant market positions. We are headquartered in Everett, Washington and have a workforce of more than 18,000 research and development, manufacturing, sales, distribution, service, and administrative professionals in more than 50 countries around the world.
Fortive Business System
Our teams across our operating companies are united by our culture of continuous improvement – characterized by the high expectations, inclusion, humility, and transparency embodied in the Fortive Business System (“FBS”). This cultural foundation is reinforced by the rigor of our disciplined operating cadence. FBS enables us to operate our businesses with a focus on relentless execution, powered by our mindset and a set of tools consistently applied across our portfolio. We are committed to delivering on our financial commitments and engaging our leaders and teams to accelerate and sustain progress in every aspect of the business, including new product development and commercialization, sales and marketing, finance, human capital management, and sustainability. We are continually evolving FBS to meet the changing needs of our portfolio and incorporating new technology enablers, like artificial intelligence and machine learning, to drive faster growth, more productivity, and greater impact. The execution of our disciplined acquisition strategy is strengthened by the value FBS creates and is a critical component of how we achieve sustained results over time.
Financial Performance Highlights*
* Adjusted EPS and Free Cash Flow are non-GAAP financial measures. For the definition of these non-GAAP financial measures and the reconciliation of such measures to the corresponding GAAP measures, please refer to “Non-GAAP Financial Measures” in Appendix A.
2 FORTIVE CORPORATION 2025 PROXY STATEMENT
Separation
On September 4, 2024, we announced our intention to separate the Precision Technologies segment business into a publicly traded company (the “Separation”). The Separation will create (i) a technology solutions company, retaining the Fortive name, with a portfolio of the brands currently operating under Fortive’s Intelligent Operating Solutions and Advanced Healthcare Solutions business segments, focused on resilient, high-quality recurring growth by delivering productivity and safety to customers, and (ii) a global technology company, named Ralliant, consisting of our brands currently operating under the Precision Technologies segment with a focus on precision instruments and highly engineered products essential for breakthrough innovation and aligned to powerful secular trends.
Sustainability Strategic Pillars
FORTIVE CORPORATION 2025 PROXY STATEMENT 3
Proxy Voting Roadmap
PROPOSAL 1: Election of Directors (page 9) >
Overview of Director Nominees
Our nine director nominees are comprised of current directors with a broad range of skills, background, and experience, which the Board of Directors (“Board”) believes contributes to the effective oversight of the Company. Additional details on board membership criteria are set forth on page 28 under “Corporate Governance – Director Nomination Process.”
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Eric Branderiz |
Daniel Comas |
Sharmistha Dubey |
Rejji Hayes |
Wright Lassiter |
James Lico |
Kate Mitchell |
Gregory Moore |
Jeannine Sargent |
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Skills and Attributes |
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Global Experience |
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Senior Executive Leadership Experience |
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Sustainability Experience |
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Technology Management Experience |
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4 FORTIVE CORPORATION 2025 PROXY STATEMENT
PROPOSAL 2: Advisory Vote on Executive Compensation (page 42) >
2024 Compensation Mix (At Target)1
Our 2024 executive compensation program aligned compensation with the creation of long-term value for our shareholders. As shown below, the significant majority of our 2024 executive compensation was performance-based (including compensation that was dependent on performance of our stock price).
FORTIVE CORPORATION 2025 PROXY STATEMENT 5
PROPOSAL 3: approval of the amendment and restatement of the 2016 Stock Incentive Plan to extend the term of the plan (page 85) >
The Board is seeking shareholder approval of the Amended and Restated Fortive Corporation 2016 Stock Incentive Plan (the “Restated Plan”) to extend the term of the plan.
Fortive currently maintains the Fortive Corporation 2016 Stock Incentive Plan, as amended and restated (the “2016 Plan”), which our shareholders approved at the 2018 Annual Meeting of Shareholders. The 2016 Plan allows Fortive to issue equity awards to individuals that it wishes to recruit or retain as employees, directors, or consultants. Pursuant to its terms, the 2016 Plan is set to expire on July 2, 2026. The 2016 Plan is Fortive’s only equity compensation plan.
In February 24, 2025, upon the recommendation of the Compensation Committee, the Board of Directors approved and adopted the Restated Plan, subject to shareholder approval at the Annual Meeting, to renew the term of the 2016 Plan for ten years until February 24, 2035. The Restated Plan does not change any material provision of the plan except the plan term, nor does it increase the aggregate number of shares of our common stock which may be issued or used for awards granted under the 2016 Plan. As of April 7, 2025, 10,345,515 shares of our common stock, par value $0.01 per share, were available to be issued or used for awards granted under the 2016 Plan, and the closing price of a share of our common stock on the NYSE was $64.65.
A summary of the material terms of the Restated Plan, which are substantially similar to the current 2016 Plan, is set forth below and is qualified in its entirety by the full text of the Restated Plan, a copy of which is attached to this proxy statement as Appendix B. The Restated Plan will become effective as of the date of the Annual Meeting if approved by the shareholders, and will not become effective if shareholder approval is not received.
The Board believes that it is in the best interest of Fortive and its shareholders to approve this proposal so that Fortive can continue to use the Restated Plan to grant equity compensation to attract, retain and reward employees, directors, and consultants and closely align their interests with those of Fortive’s shareholders. If the shareholders do not approve this proposal, the Restated Plan will not become effective, Fortive’s ability to grant equity awards will be limited in the coming years as the 2016 Plan is currently scheduled to expire in 2026, and the Board will have to re-evaluate whether to propose alternatives, or alternative amendments, to the 2016 Plan or consider alternative means of incentivizing and compensating employees, directors, and consultants, such as through significant increases in other forms of compensation.
6 FORTIVE CORPORATION 2025 PROXY STATEMENT
PROPOSAL 4: Ratification of Independent Registered Public Accounting Firm (page 93) >
After careful consideration of the independence and performance of the Company’s independent registered public accounting firm, the Audit Committee believes that the continued retention of Ernst & Young LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders. Consequently, the Audit Committee has appointed Ernst & Young LLP as the Company’s independent registered public accounting firm for 2025.
FORTIVE CORPORATION 2025 PROXY STATEMENT 7
PROPOSAL 5: shareholder proposal regarding special shareholder meetings (page 96) >
The Board of Directors recommends that shareholders vote “AGAINST” the shareholder proposal for the following reasons:
8 FORTIVE CORPORATION 2025 PROXY STATEMENT
PROPOSAL 1: Election of Directors
At the Annual Meeting, shareholders will be asked to elect Eric Branderiz, Daniel L. Comas, Sharmistha Dubey, Rejji P. Hayes, Wright L. Lassiter III, James A. Lico, Kate D. Mitchell, Gregory J. Moore, and Jeannine Sargent (each of whom has been recommended by the Nominating and Governance Committee, has been nominated by the Board and currently serves as a director of Fortive) to serve a one-year term until the 2026 Annual Meeting of Shareholders and until his or her respective successor is duly elected and qualified.
Alan Spoon will not stand for re-election and will retire from our Board as of the 2025 Annual Meeting. Although as of the date of this Proxy Statement the number of directors is fixed at ten, the Board has adopted a resolution that, effective as of the retirement of Mr. Spoon at the 2025 Annual Meeting, the size of the Board will be reduced to nine directors.
In the event a nominee declines or is unable to serve, the proxies may be voted at the discretion of the proxy holders for a substitute nominee designated by the Board, or the Board may reduce the number of directors to be elected. We know of no reason why this would occur.
FORTIVE CORPORATION 2025 PROXY STATEMENT 9
Directors
Overview of Director Nominees
Our nine director nominees are comprised of current directors with a broad range of skills, background, and experience, which the Board believes contributes to the effective oversight of the Company. Additional details on board membership criteria are set forth on page 28 under “Corporate Governance – Director Nomination Process.”
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Eric Branderiz |
Daniel Comas |
Sharmistha Dubey |
Rejji Hayes |
Wright Lassiter |
James Lico |
Kate Mitchell |
Gregory Moore |
Jeannine Sargent |
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Skills and Attributes |
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10 FORTIVE CORPORATION 2025 PROXY STATEMENT
Board Refreshment: Majority of the Board Appointed since 2020
FORTIVE CORPORATION 2025 PROXY STATEMENT 11
Director Nominees
We have included information as of the date of this Proxy Statement relating to each nominee for election as director, including his or her age, the year in which he or she became a director, his or her principal occupation, any board memberships at other public companies (to the extent required under Item 401(e)(2) of Regulation S-K) currently ("Other Current US Listed Public Company Directorships") and during the past five years, and the other experience, qualifications, attributes or skills that led the Board to conclude that he or she should continue to serve as a director of Fortive. Please see “Corporate Governance – Director Nomination Process” for a further discussion of the Board’s process for nominating Board candidates. In the event a nominee declines or is unable to serve, the proxies may be voted at the discretion of the proxy holders for a substitute nominee designated by the Board, or the Board may reduce the number of directors to be elected. We know of no reason why this will occur.
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Background
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Previously served as Executive Vice President and Chief Financial Officer of Enphase Energy, Inc., a publicly traded semiconductor and renewable energy technology company, from 2018 to 2022
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Had also served as Vice President, Chief Accounting Officer and Corporate Controller of Tesla, Inc., an automotive and renewable energy company, from 2016 to 2018
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Had also served in various senior roles, including as a Senior Vice President, Chief Accounting Officer and Corporate Controller of SunPower Corporation, from 2010 to 2016
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Held various senior roles with Knowledge Learning Corporation, Spansion, Inc., and Advanced Micro Devices, in addition to the executive roles with Enphase Energy, Tesla, and SunPower Corporation, with oversight of global business operations and strategy, financial operations, business transformation, product development, commercial and service operations, logistics, supply chain, and procurement
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Currently serves as a director of Cognizant Technology Solutions Corporation, an information technology services and consulting company, since 2023
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Currently certified as a public accountant in California
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Holds a bachelor’s degree from University of Alberta
Other Current US Listed Public Company Directorships
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Cognizant Technology Solutions Corporation
Director Qualifications
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Deep knowledge and experience with innovation and disruptive technology, hypergrowth, and the sustainable energy and semiconductor sectors
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Extensive expertise in financial operations, accounting and financial reporting, mergers & acquisitions, capital markets, risk management, legal operations, and ESG
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Extensive experience in business operations, innovative product development and strategy, business transformation, logistics, commercial operations, procurement, and supply chain
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12 FORTIVE CORPORATION 2025 PROXY STATEMENT
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Background
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Previously served as Executive Vice President of Danaher Corporation, a global science and technology company, from April 2005 to December 2020, including as Chief Financial Officer through December 2018
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Had served in various other roles at Danaher, including in roles with responsibilities over corporate development, treasury, finance and risk management after joining Danaher in 1991
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Currently serves as an advisor to Danaher since 2019 and is an adjunct professor at Georgetown University
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Currently serves as a director of Veralto Corporation, a water and product quality solutions company, since 2023
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Holds a Bachelor’s degree in Economics from Georgetown University and a Master’s degree in Business Administration from Stanford University
Other Current US Listed Public Company Directorships
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Veralto Corporation
Director Qualifications
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Deep expertise in finance, strategy, corporate development, capital allocation, accounting, human capital management, and risk management
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Through his extensive leadership experience at Danaher, direct understanding of the principles of the Fortive Business System and our culture of continuous improvement
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Background
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Currently serves as the Chair of the Board of Fortive
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Currently serves as an operating partner of Advent International LP, a global private equity firm, since 2022
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Previously served as the Chief Executive Officer of Match Group, Inc., a publicly-traded provider of global dating products, from March 2020 to May 2022, overseeing growth for the portfolio of brands, including Tinder, Match, Meetic, OkCupid, Hinge, Pairs, PlentyOfFish, and OurTime
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Had served in various other senior leadership positions at Match Group, Inc., including as Match Group’s President, Chief Operating Officer of Tinder, President of Match Group Americas, Chief Product Officer of Match, and Chief Product Officer and EVP of The Princeton Review after joining Match Group in 2016
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Currently serves as a director of Naspers Limited, a technology investment company, and Prosus N.V., a global consumer internet group that is majority-owned by Naspers, since 2022
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Holds an undergraduate degree in Engineering from the Indian Institute of Technology and a master’s degree in Engineering from Ohio State University
Other Current US Listed Public Company Directorships
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Match Group, Inc.
Director Qualifications
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Extensive experience and leadership in operation, innovative product development, competitive strategy and marketing in the technology industry
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Extensive significant experience in governance, data privacy, cybersecurity, human capital management, scaling of new technologies into new markets, financial reporting, and execution of portfolio and investment strategies
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FORTIVE CORPORATION 2025 PROXY STATEMENT 13
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Background
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Currently serves as Executive Vice President and Chief Financial Officer of CMS Energy Corporation, a publicly-traded electric and natural gas company, since 2017, overseeing the treasury, tax, investor relations, accounting, financial planning and analysis, internal audit services, supply chain, facilities, fleet, corporate safety, real estate, and mergers & acquisitions functions
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Previously served as Chairman of the Board of EnerBank USA®, a nationwide provider of home improvement loans and former CMS Energy subsidiary
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Had served as the Chief Financial Officer of ITC Holdings Corp, a publicly-traded electric transmission company, from 2014 to 2016, and as its Vice President, Finance and Treasurer from 2012 to 2014
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Held strategy and financial leadership roles for Exelon Corporation, Lazard Freres & Co., and Bank of America Securities prior to joining ITC Holdings Corp.
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Holds a bachelor’s degree from Amherst College and a master’s degree in business from Harvard Business School
Other Current US Listed Public Company Directorships
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None
Director Qualifications
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Strong knowledge of the power and energy sector
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Extensive experience in finance, capital markets, accounting and financial reporting, valuation, mergers & acquisitions, risk management, ESG and regulatory matters, cybersecurity, and corporate governance
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Significant expertise in structuring capital financing and executing investment and acquisition strategies
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Background
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Currently serves as CEO of CommonSpirit Health, a private, integrated health system comprising more than 2,200 care sites in 24 states, since 2022
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Serves as the chair of The American Hospital Association Board of Trustees, a national organization that represents America’s hospitals and health systems to advance health in America
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Previously served as President and CEO of Henry Ford Health System, a $7 billion, private, not-for-profit health system comprised of six hospitals, a health plan and wide range of ambulatory and retail health services, from 2014 to 2022
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Serves as a director of Quest Diagnostics, a publicly-traded diagnostic information services company, since 2020
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Previously served as the lead independent director of DT Midstream, a publicly-traded energy company, from 2021 to 2023
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Had also served as a Director of the Federal Reserve Bank of Chicago from 2018 to 2021
Other Current US Listed Public Company Directorships
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Quest Diagnostics, Inc.
Director Qualifications
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Extensive experience and leadership in healthcare services
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Extensive experience in innovation, strategic planning, operation, and execution, corporate governance, ESG, human capital management, finance and community service
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14 FORTIVE CORPORATION 2025 PROXY STATEMENT
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Background
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Currently serves as the Chief Executive Officer and President of Fortive since 2016
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Serves as a director of DuPont de Nemours, Inc., a provider of technology-based materials and solutions, since 2024
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Had served in various leadership positions at Danaher Corporation, a global science and technology company, including as Executive Vice President from 2005 to 2016
Other Current US Listed Public Company Directorships
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DuPont de Nemours, Inc.
Director Qualifications
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Over 25 years of extensive experience in senior leadership positions, including as an Executive Vice President of Danaher with oversight at various times of each of the businesses that was separated from Danaher into Fortive
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Through his various senior leadership positions at Danaher and Fortive, broad operating and functional experience with, and deep knowledge of, Fortive’s businesses, the Fortive Business System, capital allocation strategies, acquisitions, marketing and branding, and leadership strategies
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Background
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Currently serves as a founding partner of Scale Venture Partners, a Silicon Valley-based firm that invests in early-stage technology companies, since 1997
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Previously served with Bank of America from 1988 to 1996, most recently as Senior Vice President for Bank of America Online Banking
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Had served as director of SVB Financial Group from 2010 to 2024
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Serves as Chairman and Founder of Venture Forward, a non-profit affiliate of the National Venture Capital Association (NVCA) where she also served as Chair and board member from 2007 to 2016
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Serves as a member of the investment committees of Silicon Valley Community Foundation and the San Francisco Museum of Modern Art
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Holds a BA from Stanford University, an MBA from the Evening Program Golden Gate University, and has attended Executive programs at Harvard Business School (strategic marketing) and MIT CSAIL/Sloan (artificial intelligence)
Other Current US Listed Public Company Directorships
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None
Director Qualifications
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Over 40 years of extensive experience in the technology industry, with a focus on building and investing in high growth, innovative software companies solving business problems at scale
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Expertise in digital transformation through technology cycles including the current wave driven by artificial intelligence
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Deep experience as a director, investor and senior executive in the areas of governance, finance, product development, business management, investment and acquisition strategy, cybersecurity, and executive compensation
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FORTIVE CORPORATION 2025 PROXY STATEMENT 15
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Background
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Serves as a senior advisor to Gates Ventures, a venture capital firm focused on health and global development
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Previously served as the Corporate Vice President of Microsoft Health & Life Sciences at Microsoft Corporation, from 2019 to 2023
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Had also served as the the Vice President and Founder of Google Cloud Healthcare & Life Sciences at Google Inc., a multinational technology company that specializes in Internet-related products and services, from 2016 to 2019
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Had also served as served as the Chief Emerging Technology and Informatics Officer at Geisinger Health System, a regional healthcare provider
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Serves as an Associate Fellow at Stanford University’s Center for Artificial Intelligence in Medicine and Imaging
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Currently serves as a director of Davita, Inc., a health care provider, since 2021
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Previously served as a director of Olink Holding AB and Hill-Rom Holdings, Inc.
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Holds a PhD in Radiological Sciences from Massachusetts Institute of Technology, and MD from Wayne State University School of Medicine
Other Current US Listed Public Company Directorships
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Davita, Inc.
Director Qualifications
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Board certified in Diagnostic Radiology, Neuroradiology and Clinical informatics
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Substantial experience both in the medical field as a practitioner and as a technology executive experienced in digital health and AI
* Dr. Moore, who was appointed by the Board effective February 26, 2025, was recommended by a third-party search firm engaged by the Nominating and Governance Committee. |
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Background
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Previously served as president of Energy and as president of Innovation and New Ventures at Flex, a leader in global design and manufacturing, from 2012 to 2017
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Had also served as the chief executive officer at Oerlikon Solar, a thin-film silicon solar photovoltaic module manufacturer and a wholly owned subsidiary of Oerlikon, a publicly-traded Swiss company, and Voyan Technology, an embedded systems software provider
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Serves as a senior advisor at Generation Investment Management, LLP since 2017, a venture partner and senior advisor at Breakthrough Energy Ventures since 2019, a senior advisor and operating partner of Katalyst Ventures since 2018, and an operating partner at G2VP since 2024, each an investment firm focused on sustainable innovation
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Serves as a director of Synopsys, Inc., an electronic design automation company, since 2020
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Previously served as a director of Cypress Semiconductor Corp., Proterra, Inc. and Queens’ Gambit Growth Capital
Other Current US Listed Public Company Directorships
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Synopsys, Inc.
Director Qualifications
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Over 30 years of experience encompassing leadership, operations, marketing and engineering roles with a wide mix of high technology hardware and software companies across multiple industries
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Significant experience with development and global launch of disruptive technology, execution of investment and acquisition strategies, corporate governance, cybersecurity, sustainable innovation and ESG, and executive compensation
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16 FORTIVE CORPORATION 2025 PROXY STATEMENT
Corporate Governance
Corporate Governance Overview
Governance Highlights
Board Composition
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We have engaged in rigorous refreshment of the Board, with a majority of the Board appointed on or after 2020 |
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We have fully declassified the Board to provide for the election of all directors for one-year terms |
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We have adopted proxy access to permit a shareholder, or a group of up to 20 shareholders, owning at least 3% of the outstanding shares continuously for at least 3 years, to nominate and include in our proxy materials director nominees constituting up to 20% of the board of directors, as further detailed in our Bylaws |
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We maintain a majority vote requirement for the election of directors in uncontested elections |
Board Structure
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We have separated our Chair and CEO positions, with an independent Chair |
Board Risk Oversight and Shareholder Engagement
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We conduct multi-layered oversight of our Sustainability disclosure by the Nominating and Governance Committee and the full Board |
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We have formalized and documented in the Compensation Committee Charter oversight of our human capital management by the Compensation Committee, including matters related to overall employee retention and inclusive and diverse company culture, with annual review by the full Board |
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We have formalized and documented in the Nominating and Governance Committee Charter oversight of our CEO succession planning by the Nominating and Governance Committee, with annual review by the full Board |
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We have formalized and documented in the Nominating and Governance Committee Charter oversight of climate-related risk management and strategies by the Nominating and Governance Committee, with annual review by the full Board |
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We have formalized and documented in the Audit Committee Charter oversight of our cybersecurity by the Audit Committee, with quarterly review by the Audit Committee of our cybersecurity planning, monitoring, risk management, remediation, and controls and annual review by the full Board |
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We have implemented a robust annual shareholder engagement program |
Other Governance Policies and Practices
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We have no shareholder rights plan |
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We have implemented the right of shareholders to call a special meeting |
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We have eliminated all supermajority voting requirements |
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We have adopted a Political Contribution Policy overseen by the Nominating and Governance Committee |
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We have an absolute prohibition against pledging of our stock by our director and executive officers |
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We have implemented stock ownership requirements for directors and executive officers |
FORTIVE CORPORATION 2025 PROXY STATEMENT 17
Corporate Governance Guidelines, Committee Charters and Code of Conduct
As part of its ongoing commitment to good corporate governance, our Board of Directors has codified its corporate governance practices into a set of Corporate Governance Guidelines and adopted written charters for each of its committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, and the Finance Committee. The Board of Directors has also adopted our Code of Conduct that includes, among other things, a code of business conduct and ethics for directors, officers (including our principal executive officer, principal financial officer and principal accounting officer) and employees. The Corporate Governance Guidelines, Audit Committee Charter, Compensation Committee Charter, Nominating and Governance Committee Charter, and Code of Conduct referenced above are each available in the “Investors – Corporate Governance” section of our website at http://www.fortive.com.
Board Leadership Structure
The Board has separated the positions of Chair and CEO because it believes that the separation of the positions best enables the Board to ensure that our businesses, risks, opportunities and affairs are managed effectively and in the best interests of our shareholders.
The entire Board selects its Chair, and our Board has selected Sharmistha Dubey, an independent director, as its Chair, in light of Ms. Dubey’s independence and her deep experience and knowledge with CEO leadership, strategy, corporate governance, public board management, risk management, and Fortive’s various businesses and industries.
As the independent Chair of the Board, Ms. Dubey leads the activities of the Board, including:
In the event that the Chair of the Board is not an independent director, the Corporate Governance Guidelines provide that the independent directors, upon recommendation from the Nominating and Governance Committee, will select by majority vote an independent director to serve as the Lead Independent Director with the authority to:
The Board’s non-management directors meet in executive session following the Board’s regularly scheduled meetings, with the executive sessions chaired by the independent Chair. In addition, the independent directors meet as a group in executive session at least once a year.
18 FORTIVE CORPORATION 2025 PROXY STATEMENT
Risk Oversight
The Board’s role in risk oversight of the Company is consistent with the Company’s leadership structure, with management having day-to-day responsibility for assessing and managing the Company’s risk exposure and the Board and its committees overseeing those efforts, with particular emphasis on the most significant risks facing the Company.
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Risk category |
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board oversight responsibility |
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director expertise |
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Enterprise Risk |
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Board of Directors Audit Committee Compensation Committee Nominating and Governance Committee Finance Committee |
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Eric Branderiz Daniel Comas Sharmistha Dubey Rejji Hayes Kate Mitchell Alan Spoon* |
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Portfolio Strategy |
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Board of Directors Finance Committee |
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Eric Branderiz Daniel Comas Sharmistha Dubey Rejji Hayes Wright Lassiter James Lico Jeannine Sargent Alan Spoon* |
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Cybersecurity |
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Board of Directors Audit Committee |
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Sharmistha Dubey Rejji Hayes Kate Mitchell Jeannine Sargent Alan Spoon* |
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Sustainability |
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Board of Directors Nominating and Governance Committee |
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Eric Branderiz Rejji Hayes Jeannine Sargent |
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Human Capital Management |
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Board of Directors Compensation Committee |
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Eric Branderiz Daniel Comas Sharmistha Dubey Wright Lassiter James Lico Kate Mitchell Jeannine Sargent Alan Spoon* |
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Management Succession |
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Board of Directors Nominating and Governance Committee |
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All Directors |
* Mr. Spoon will retire from the Board at the 2025 Annual Meeting.
FORTIVE CORPORATION 2025 PROXY STATEMENT 19
Risk Oversight Process
Enterprise Risk
The Board oversees the Company’s risk management processes directly and through each of its committees. In general, the Board oversees the management of risks inherent in the operation of the Company’s businesses on a consolidated basis, by each operating segment and by key corporate functions. In addition, the enterprise risk oversight includes review of the risks and opportunities related to the implementation by the Company of its strategic plan, its acquisition and capital allocation program, its capital structure and liquidity and its organizational structure. Furthermore, through the Audit Committee, the Board oversees the Company’s enterprise risk management process and policies. At least on an annual basis or more frequently as deemed appropriate by the Board, the Board reviews in depth with senior leaders of the Company the Company’s enterprise risk management, with particular focus on the enterprise risks and opportunities with the greatest impact and highest probability. In addition, the chairs of the Audit Committee, the Compensation Committee and the Nominating and Governance Committee review with each other and with the rest of the Board during executive sessions of Board meetings as appropriate updates to the Company’s enterprise risk management discussed during the corresponding committee meetings. Furthermore, at least on an annual basis or more frequently as deemed appropriate by the Board, the Board reviews with the SVP – Chief Legal Officer our insurance policies, including our D&O insurance policy, general liability policy, and our information security risk insurance policy.
Portfolio Strategy
At each Board meeting, the Board oversees the Company’s performance and execution against the strategic goals for the Company’s operating segments, overall portfolio, and innovation, including overseeing the corresponding management of risks and opportunities. In addition, on an annual basis, the Board conducts an informal meeting led by senior management and dedicated entirely to deeper review of the acquisition, product development, commercial, innovation, capital allocation, human capital and risk management strategies for each of the operating segments. Furthermore, the Finance Committee meets with management to assess acquisition and other corporate development strategies as appropriate
Cybersecurity and Product Security
The Board has delegated to the Audit Committee the responsibility of exercising oversight with respect to the Company’s cybersecurity risk management and risk controls. Our Chief Information Officer and our Chief Information Security Officer report to the Audit Committee and to the Board regarding cybersecurity threat, risks, and other cybersecurity related matters. Our Chief Information Officer and our Chief Information Security Officer are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, cybersecurity risk management and strategy processes, including the operation of our incident response plan and oversight of the IT function. In addition, our Chief Information Officer and our Chief Information Security Officer review with the Audit Committee the results of certain cybersecurity-related assessments including, the annual risk assessment and penetration test performed by an independent third party. The incident response and escalation procedures are tested through our annual tabletop exercises with senior management and our quarterly tabletop exercises with the IT operations teams. The Company’s security framework is based on the National Institute of Security and Technology (NIST) Frameworks, Generally Accepted Privacy Program (GAPP) guiding principles, and ISO 27001/2 standards.
Sustainability
The Board has delegated to the Nominating and Governance Committee the responsibility of exercising oversight with respect to the reporting of our Sustainability disclosure as well as oversight of our climate-related strategies, goals, risk management and performance. Consistent with such delegation, our SVP – Chief Legal Officer provides frequent reports and updates to the Nominating and Governance Committee, and a report to the Board on an annual basis, regarding the Company’s Sustainability program and strategies, including the corresponding risks and opportunities, climate-related goals and strategies, progress, shareholder engagement and disclosure. See “Sustainability” for further discussion on governance structure of our Sustainability program.
20 FORTIVE CORPORATION 2025 PROXY STATEMENT
Human Capital Management
The Board has delegated to the Compensation Committee the responsibility of exercising oversight of the Company’s human capital and compensation, including oversight of overall compensation, retention and inclusion strategies. Our SVP - Chief People Officer provides regular reports on compensation and other human capital management risks, trends, best practices, strategies and disclosure to the Compensation Committee. While the Board has delegated these responsibilities to the Compensation Committee, the Board remains actively involved and receives additional reports throughout the year on employee engagement, inclusion, talent development, company culture and alignment of human capital strategies with the Company’s overall portfolio and operational strategies.
Management Succession
The entire Board oversees the recruitment, development, retention, and succession planning of our executive officer positions, with the responsibilities of oversight of CEO succession planning delegated to the Nominating and Governance Committee, and the responsibilities of ensuring appropriate compensation strategies and programs to align with the retention and recruitment delegated to the Compensation Committee. Our SVP - Chief People Officer provides regular reports on the CEO succession planning process and strategies to the Nominating and Governance Committee and on compensation strategies and programs to assist in retention and recruitment of future leaders to the Compensation Committee. The SVP - Chief People Officer also provides additional reports throughout the year to the full Board on short-term and long-term readiness of potential successors, outside recruitment to populate the succession funnel as necessary, and development plans of future leaders. In addition to the formal activities noted below, the Board and its committee members engage and assess our executive officers and high-potential employees during management presentations, our annual multi-day leadership conference, our annual strategy sessions for the Board, regular visits to our operating companies, and periodic informal meetings and communications.
As a result of this rigorous, thoughtful, and well-designed approach to succession planning, on September 4, 2024, the Company announced that Olumide Soroye, current President and CEO of the Company's Advanced Healthcare Solutions and Intelligent Operation Solutions segments, will succeed James Lico as CEO upon the completion of the separation of the Precision Technologies segment into a new, publicly-traded company.
FORTIVE CORPORATION 2025 PROXY STATEMENT 21
Committees’ Role in Risk Oversight
Each committee reports to the full Board on a regular basis, including as appropriate with respect to the committee’s risk oversight activities.
Internal Risk Committee
The Company’s Risk Committee (consisting of members of senior management) inventories, assesses and prioritizes the most significant risks facing the Company as well as related mitigation efforts, and, on at least an annual basis, provides a report to the Board and provides a report of the process to the Audit Committee.
Director Independence At least a majority of the Board must qualify as independent within the meaning of the listing standards of the NYSE. The Board has affirmatively determined that nine out of our ten current directors, including Mss. Sharmistha Dubey, Kate D. Mitchell and Jeannine Sargent and Messrs. Eric Branderiz, Daniel L. Comas, Rejji P. Hayes, Wright Lassiter III, Gregory J. Moore, and Alan G. Spoon, are independent within the meaning of the listing standards of the NYSE. |
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22 FORTIVE CORPORATION 2025 PROXY STATEMENT
Board of Directors and
Committees of the Board
Director Attendance
In 2024, the Board met seven times and acted by unanimous written consent two times. All directors attended at least 75% of the aggregate of the total number of meetings of the Board and of all committees of the Board on which they served during 2024. As a general matter, directors are expected to attend annual meetings of shareholders. Each of our current directors who were serving on the Board at the time attended our virtual 2024 Annual Meeting of Shareholders.
Committee Membership
The membership of each of the Audit, Compensation, Nominating and Governance, and Finance Committees as of the date of this Proxy Statement is set forth below.
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Name of Director |
Audit |
Compensation
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Nominating and |
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Finance |
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Eric Branderiz |
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Daniel L. Comas |
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Member |
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Member |
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Sharmistha Dubey |
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Rejji P. Hayes |
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Chair |
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Member |
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Wright Lassiter III |
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Member |
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James A. Lico |
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Member |
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Kate D. Mitchell |
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Member |
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Chair |
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Member |
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Gregory J. Moore, M.D., Ph.D. |
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Member |
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Member |
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Jeannine Sargent |
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Member |
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Chair |
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Alan G. Spoon* |
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Member |
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Chair |
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* Mr. Spoon will retire from the Board at the 2025 Annual Meeting.
FORTIVE CORPORATION 2025 PROXY STATEMENT 23
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The Audit Committee is responsible for:
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Assessing the qualifications and independence of Fortive’s independent auditors;
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Appointing, compensating, retaining, and evaluating Fortive’s independent auditors;
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Overseeing the quality and integrity of Fortive’s financial statements and making a recommendation to the Board regarding the inclusion of the audited financial statements in Fortive’s Annual Report on Form 10-K;
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Overseeing Fortive’s internal auditing processes;
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Overseeing management’s assessment of the effectiveness of Fortive’s internal control over financial reporting;
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Overseeing management’s assessment of the effectiveness of Fortive’s disclosure controls and procedures;
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Overseeing risks related to financial controls, legal and compliance risks and major financial, privacy, security and business continuity risks;
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Overseeing Fortive’s risk assessment and risk management policies;
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Overseeing Fortive’s compliance with legal and regulatory requirements;
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Overseeing Fortive’s cybersecurity and product security risk management and risk controls;
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Overseeing swap and derivative transactions and related policies and procedures; and
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Preparing a report as required by the SEC to be included in this proxy statement.
The Board has determined that each member of the Audit Committee is:
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Independent for purposes of Rule 10A-3(b)(1) under the Exchange Act and the NYSE listing standards;
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Qualified as an audit committee financial expert as that term is defined in SEC rules; and
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Financially literate within the meaning of the NYSE listing standards.
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As of the date of this proxy statement, no Audit Committee member serves on the audit committee of more than three public companies.
The Audit Committee typically meets in executive session, without the presence of management, at regularly scheduled meetings, and reports to the Board on its actions and recommendations at regularly scheduled Board meetings.
The Audit Committee relies on the expertise and knowledge of management, the internal auditor, and the independent auditor in carrying out its oversight responsibilities. Management is responsible for the preparation, presentation, and integrity of Fortive’s financial statements, accounting and financial reporting principles, internal control over financial reporting, and disclosure controls and procedures designed to ensure compliance with accounting standards, applicable laws, and regulations. Management is also responsible for objectively reviewing and evaluating the adequacy, effectiveness, and quality of Fortive’s system of internal control over financial reporting. Fortive’s independent auditor, Ernst & Young LLP, is responsible for performing independent audits of Fortive’s financial statements and internal control over financial reporting and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States.
24 FORTIVE CORPORATION 2025 PROXY STATEMENT
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The Compensation Committee is responsible for:
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Determining and approving the form and amount of annual compensation of the CEO and our other executive officers, including evaluating the performance of, and approving the compensation paid to, our CEO and other executive officers;
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Reviewing and making recommendations to the Board with respect to the adoption, amendment and termination of all executive incentive compensation plans and all equity compensation plans, and exercising all authority with respect to the administration of such plans;
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Reviewing and making recommendations to the Board with respect to the form and amounts of director compensation;
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Overseeing and monitoring compliance with Fortive’s compensation clawback policy;
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Overseeing and monitoring compliance by directors and executive officers with Fortive’s stock ownership requirements;
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Overseeing risks associated with Fortive’s compensation policies and practices;
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Overseeing our engagement with shareholders and proxy advisory firms regarding executive compensation matters;
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Assisting the Board in oversight of our human capital management practices, including strategies, risk management, employee retention and inclusive culture;
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Overseeing the Company’s reporting on the Company’s human capital management practices; and
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Reviewing and discussing with management the Compensation Discussion & Analysis (“CD&A”) in the annual proxy statement and recommending to the Board the inclusion of the CD&A in the proxy statement.
Each member of the Compensation Committee is:
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Independent under NYSE listing standards and under Rule 10C-1 under the Exchange Act.
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The Chair of the Compensation Committee works with our Senior Vice President-Chief People Officer, Vice President-Total Rewards, and our Vice President-Corporate Secretary to schedule the Compensation Committee’s meetings and set the agenda for each meeting. Our Senior Vice President-Chief People Officer, Vice President-Total Rewards, Senior Vice President-Chief Legal Officer, and Vice President-Corporate Secretary generally attend, and from time-to-time our CEO and CFO attend, the Compensation Committee meetings and support the Compensation Committee in preparing meeting materials and taking meeting minutes. In particular, our CEO provides background regarding the interrelationship between our business objectives and executive compensation matters and advises on the alignment of incentive plan performance measures with our overall strategy; participates in the Compensation Committee’s discussions regarding the performance and compensation of the other executive officers; and provides recommendations to the Compensation Committee regarding all significant elements of compensation paid to such other executive officers, their annual strategic performance objectives and his evaluation of their performance. The Compensation Committee typically meets in executive session, without the presence of management, at each regularly scheduled meeting, and reports to the Board on its actions and recommendation at regularly scheduled Board meetings.
FORTIVE CORPORATION 2025 PROXY STATEMENT 25
Under the terms of its charter, the Compensation Committee has the authority to engage the services of outside advisors and experts to assist the Compensation Committee. Following the assessment and determination of Pearl Meyer & Partners, LLC’s (“Pearl Meyer”) independence from Fortive’s management, the Compensation Committee engaged Pearl Meyer as the Compensation Committee’s independent compensation consultant for 2024. The Compensation Committee had the sole discretion and authority to select, retain and terminate Pearl Meyer as well as to approve any fees, terms and other conditions of its services. Pearl Meyer reported directly to the Compensation Committee and took its direction solely from the Compensation Committee. Pearl Meyer’s primary responsibilities in 2024 were to provide advice and data in connection with the selection of Fortive’s peer group for assessing executive compensation, the structuring of the executive compensation programs in 2024 and 2025, the compensation levels for our executive officers, including in connection with the planned separation of the Precision Technologies segment and CEO transition, and the compensation levels for our directors; assess our executive compensation program in the context of market practices and corporate governance best practices; and advise the Compensation Committee regarding our proposed executive compensation public disclosures. In the course of discharging its responsibilities, the Compensation Committee’s independent compensation consultant may, from time to time and with the Compensation Committee’s consent, request from management certain information regarding compensation amounts and practices, the interrelationship between our business objectives and executive compensation matters, the nature of our executive officer responsibilities and other business information. Pearl Meyer did not provide any services to Fortive or its management in 2024, and the Compensation Committee is not aware of any work performed by Pearl Meyer that raises any conflicts of interest.
Compensation Committee Interlocks and Insider Participation
During 2025, none of the members of the Compensation Committee was an officer or employee of Fortive. No executive officer of Fortive served on the compensation committee (or other board committee performing equivalent functions) or on the board of directors of any entity having an executive officer who served on the Compensation Committee.
26 FORTIVE CORPORATION 2025 PROXY STATEMENT
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The Nominating and Governance Committee is responsible for:
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Reviewing and making recommendations to the Board regarding the size, classification and composition of the Board;
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Assisting the Board in identifying individuals qualified to become Board members;
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Assisting the Board in identifying characteristics, skills, and experiences for the Board with the objective of having a Board with a broad range of backgrounds, experiences, skills, and perspectives;
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Proposing to the Board the director nominees for election by our shareholders at each annual meeting;
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Overseeing and reviewing the process for, and making recommendations to the Board relating to the management of, the Company’s CEO succession planning;
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Assisting the Board in determining the independence and qualifications of the Board and Committee members and making recommendations to the Board regarding committee membership;
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Developing and making recommendations to the Board regarding a set of corporate governance guidelines and reviewing such guidelines on an annual basis;
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Overseeing compliance with the corporate governance guidelines;
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Overseeing director education and director orientation process and programs;
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Overseeing Fortive’s Sustainability reporting;
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Overseeing climate-related risk management and strategies;
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Reviewing and making recommendation to the Board relating to the governance matters set forth in the Company’s Certificate of Incorporation and Bylaws;
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Administrating the Company’s Political Contribution Policy;
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Assisting the Board and the Committees in engaging in annual self -assessment of their performance; and
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Administering Fortive’s Related Person Transactions Policy.
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The Board has determined that each member of the Nominating and Governance Committee is independent within the meaning of the NYSE listing standards.
The Nominating and Governance Committee typically meets in executive session, without the presence of management, at each regularly scheduled meeting and reports to the Board on its actions and recommendations at regularly scheduled Board meetings.
FORTIVE CORPORATION 2025 PROXY STATEMENT 27
FINANCE COMMITTEE |
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Alan G. Spoon* (Chair) |
Daniel L. Comas |
Rejji P. Hayes |
James A. Lico |
Kate D. Mitchell |
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The Finance Committee is responsible for:
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Assisting the Board in assessing potential acquisition, investment and divestiture opportunities; and
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Approving business acquisitions, investments and divestitures up to the levels of authority delegated to it by the Board.
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* Mr. Spoon will retire from the Board at the 2025 Annual Meeting.
Director Nomination Process
The Nominating and Governance Committee recommends to the Board director candidates for nomination and election at the annual meeting of shareholders and, in the event of vacancies between annual meetings of shareholders, for appointment to fill such vacancies.
Board Membership Criteria
In assessing the candidates for recommendation to the Board as director nominees, the Nominating and Governance Committee will evaluate such candidates against the standards and qualifications set out in our Corporate Governance Guidelines, including:
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Personal and professional integrity and character Skills, knowledge, broad range of background and experience, and expertise (including business or other relevant experience) useful and appropriate to the effective oversight of our business |
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The extent to which the interplay of the candidate’s skills, knowledge, expertise and broad range of background and experience with that of the other Board members will help build a Board that is effective in collectively meeting our strategic needs and serving the long-term interests of the shareholders |
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Prominence and reputation in the candidate’s profession The capacity and desire to represent the interests of the shareholders as a whole Availability to devote sufficient time to the affairs of Fortive |
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28 FORTIVE CORPORATION 2025 PROXY STATEMENT
Skills and Attributes
The Nominating and Governance Committee annually reviews with the Board the skills, knowledge, experience, background and attributes required of Board nominees, considering current Board composition and the Company’s circumstances. In making its recommendations to our Board, the Nominating and Governance Committee considers the criteria noted above, as well as, among others, the following skills, knowledge, experience, background and attributes:
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Independence |
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Sustainability Experience |
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Mergers and Acquisition |
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Technology Management |
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Global Experience and International Exposure |
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Financial Literacy or Public |
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Legal and Corporate |
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Senior Executive Leadership |
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Cybersecurity Experience |
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Relevant Industry Experience |
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Human Capital Management |
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Operational and Risk |
The Nominating and Governance Committee takes into account a candidate’s ability to contribute to the variety of perspective and analysis of the Board and, as such, believes it is important to consider attributes such as professional experience in evaluating candidates who may be able to contribute to the perspective and practical insight of the Board as a whole.
Limits on Other Public Board Memberships
Under our Corporate Governance Guidelines, our directors are restricted from serving on more than three other boards of public companies; provided, however, that if a director serves as an executive officer of a public company, such director is further restricted from serving on more than one other board of a public company.
Board and Peer Assessment and Board Refreshment Process
On an annual basis, the Nominating and Governance Committee reviews and assesses, with input from the various other committees, the process for the annual self-assessment of the full Board and each of the committees of the Board. The process assessment takes into account the feedback from the directors on the effectiveness of the prior self-assessment process, incremental perspective and expertise a new director may bring, and input from the shareholder engagement process.
For 2024, the Nominating and Governance Committee engaged Boardspan, an independent board governance company with deep expertise in board performance assessment, to assist in conducting a facilitated interview of each director and key management members to conduct an assessment of the full Board (including each committee) and each individual director and to assist in Board succession planning.
FORTIVE CORPORATION 2025 PROXY STATEMENT 29
The following describes the self-assessment process implemented and conducted by the Board and the committees of the Board in 2024.
Shareholder Recommendations on Director Nomination
Shareholders may recommend a director nominee to the Nominating and Governance Committee. A shareholder who wishes to recommend a prospective nominee for the Board should notify the Nominating and Governance Committee in writing using the procedures described below under “— Communications with the Board of Directors” with whatever supporting material the shareholder considers appropriate. If a prospective nominee has been identified other than in connection with a director search process initiated by the Nominating and Governance Committee, the Nominating and Governance Committee makes an initial determination as to whether to conduct a full evaluation of the candidate. The Nominating and Governance Committee’s determination of whether to conduct a full evaluation is based primarily on the Nominating and Governance Committee’s view as to whether a new or additional Board member is necessary or appropriate at such time, and the likelihood that the prospective nominee can satisfy the evaluation factors described above under “— Board Membership Criteria” and any such other factors as the Nominating and Governance Committee may deem appropriate. The Nominating and Governance Committee takes into account whatever information is provided to it with the recommendation of the prospective candidate and any additional inquiries the Nominating and Governance Committee may in its discretion conduct or have conducted with respect to such prospective nominee.
The Nominating and Governance Committee evaluates director nominees in the same manner whether a shareholder or the Board has recommended the candidate.
Proxy Access
Pursuant to the proxy access provisions in Section 2.12 of our Amended and Restated Bylaws, a shareholder, or group of up to 20 shareholders, owning 3% or more of Fortive’s outstanding shares of common stock continuously for at least three years may nominate and include in our proxy materials directors constituting up to 20% of the Board. With respect to the 2026 Annual Meeting of Shareholders, the nomination notice and other materials required by these provisions must be delivered or mailed to and received by Fortive’s Secretary in writing between November 22, 2025 and December 22, 2025 (or, if the 2026 Annual Meeting of Shareholders is called for a date that is not within 30 calendar days of the anniversary of the date of the Annual Meeting, by the later of the close of business on the date that is 120 days prior to the date of the 2026 Annual Meeting of Shareholders or within 10 days after the public announcement of the date of the 2026 Annual Meeting of Shareholders) at the following address: Fortive Corporation, Attn: Secretary, 6920 Seaway Blvd., Everett, WA 98203. When submitting nominees for inclusion in the proxy materials pursuant to the proxy access provisions, shareholders must follow the notice procedures and provide the information required by our Amended and Restated Bylaws. Our Amended and Restated Bylaws are available at “Investor – Corporate Governance” section of our corporate website, http://www.fortive.com.
30 FORTIVE CORPORATION 2025 PROXY STATEMENT
Majority Voting for Directors
Our Amended and Restated Bylaws provide for majority voting in uncontested director elections, and our Board has adopted a related director resignation policy. Under the policy, our Board will not appoint or nominate for election to the Board any person who has not tendered in advance an irrevocable resignation effective in such circumstances where the individual does not receive a majority of the votes cast in an uncontested election and such resignation is accepted by the Board. If an incumbent director is not elected by a majority of the votes cast in an uncontested election, our Nominating and Governance Committee will submit for prompt consideration by the Board a recommendation whether to accept or reject the director’s resignation. The Board expects the director whose resignation is under consideration to abstain from participating in any decision regarding that resignation.
At any meeting of shareholders for which Fortive’s Secretary receives a notice that a shareholder has nominated a person for election to the Board in compliance with our Amended and Restated Bylaws and such nomination has not been withdrawn on or before the tenth day before we first mail our notice of meeting to our shareholders, the directors will be elected by a plurality of the votes cast (which means that the nominees who receive the most affirmative votes would be elected to serve as directors).
Shareholder Engagement
SPRING We publish our proxy statement and our annual report We continue our discussions with our largest shareholders, as warranted We publish our annual sustainability report |
SUMMER We conduct our annual meeting We assess how our shareholders voted on our proposals at our annual meeting |
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WINTER |
FALL |
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We assess governance best practices We review policy updates from stakeholders We update our annual governance framework and policies |
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The Board and the committees approve the self-assessment process, which includes considerations from the shareholder engagement process The Board conducts the annual self-assessment We conduct our annual shareholder outreach |
In addition, throughout the year, senior members of management engage in extensive discussions with our investor community to discuss our strategy, our results, our operations, our product offerings, our end markets, our Sustainability efforts, and our outlook through numerous investor conferences, investor calls, investor meetings, investor events, and earnings calls.
FORTIVE CORPORATION 2025 PROXY STATEMENT 31
2024 Annual Shareholder Outreach
In 2024, as part of our annual shareholder outreach, we invited our top 25 shareholders, representing approximately 65 percent of our outstanding shares, and leading proxy advisory firms to discuss Corporate Governance, Board Composition, Risk Oversight, Executive Compensation, Human Capital Management, Sustainability, and upcoming Separation and CEO Transition. With a significant number of our investors accepting our invitation, our senior leaders met with investors holding approximately 37 percent of our shares outstanding in the third quarter of 2024.
Consistent with our prior practice, our management team shared the feedback from our shareholder outreach process with our Board for potential responsive actions. We have identified below feedback we have received from our shareholders in the past years during our annual shareholder outreach and the corresponding actions taken by the Board:
Shareholder Feedback |
Responsive Actions |
Increase shareholder rights and board accountability |
• We declassified the Board
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• We provided proxy access
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• We provided right of shareholders to call a special meeting
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• We eliminated the supermajority voting requirements
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• We provided for majority vote requirement for director election
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Increase the level of independence on the Board |
• We refreshed our Board, with 9 out of our 10 current directors (and 8 out of our 9 director nominees) independent, with only our CEO representing a non-independent director on the Board
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• We maintained an independent Chair of the Board, with the CEO and the Chair positions separated
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Provide transparency in workforce demographics |
• We publish our annual EEO-1 report on our website
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Increase the percentage of long-term equity awards dependent on relative total shareholder return and include additional performance measures |
• In 2022, we increased the allocation of PSUs that are dependent on relative TSR from 35% to 50% and added three-year average core revenue growth as an incremental performance measure
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• We increased the emphasis on Company financial performance results for annual incentives starting in 2024 by adjusting the weighting from 60% to 80% of the overall award
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• We adjusted the relative TSR structure to eliminate the ability to earn a payout of 25% of target PSUs if absolute TSR performance is positive, but relative performance is below threshold
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Aligned with standardized disclosure for sustainability efforts |
• We have aligned our ESG disclosures with GRI since 2020 and SASB since 2021; we continue our alignment with the Task Force on Climate-related Financial Disclosure (TCFD)
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• We became a United Nations Global Compact (UNGC) signatory in 2021
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• Our Sustainability Goals are aligned with the United Nations Sustainable Development Goals (UN SDGs)
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Disclose climate change data through CDP |
• We submit the CDP Corporate Questionnaire annually for scoring on climate change and water topics
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Provide transparency in political contributions |
• We maintained a political contribution policy resulting in 90 score on the CPA-Zicklin Index in 2024 and identification as a CPA-Zicklin Trendsetter every year since 2021
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Communications with the Board of Directors
Shareholders and other parties interested in communicating directly with the Board or with individual directors, the independent Chair of the Board or, if the Chair is not independent, the Lead Independent Director, or the non-management directors as a group may do so by addressing communications to the Board of Directors, to the specified individual director or to the non-management directors, as applicable, c/o Secretary, Fortive Corporation, 6920 Seaway Blvd, Everett, WA 98203.
32 FORTIVE CORPORATION 2025 PROXY STATEMENT
Sustainability
At Fortive, our commitment to Sustainability is inextricably linked with our shared purpose: essential technology for the people who accelerate progress. The work we do, and how we do it, centers around IMPACT. Every day, Fortive’s products, services, and people are making an impact behind the scenes to:
Fortive continues to deliver on our commitments towards accelerating progress in workplace safety, engineering, and healthcare. Our portfolio of operating companies has strategic connections to Sustainability through their products and services, and we are uniquely positioned to address critical customer safety, quality, productivity, and efficiency challenges. By further integrating Sustainability into our business strategy and FBS, our engine for growth and innovation, we are able to scale our impact and capitalize on the Sustainability opportunities in our current markets and drive growth and long-term value in new markets.
Our Commitment to Sustainability
We are boldly pursuing our vision of accelerating a sustainable future for all by investing in our people, our operations, and breakthrough innovations that directly address environmental and societal challenges. Our Sustainability Pillars align our actions with our purpose and values. The Pillars serve as the blueprint for our Sustainability strategy, and we have goals to support and drive progress within each Pillar. Our sustainability pillars, and our alignment with the United Nations Sustainable Development Goals (UN SDGs), guide us in how we work and ensure we continue delivering on our sustainability commitments.
FORTIVE CORPORATION 2025 PROXY STATEMENT 33
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Innovate for Impact |
Our operating companies advance sustainability with products and services that:
In 2024, over 60% of revenue generated was attributed to sales of products and services that enable sustainability-related outcomes and are aligned with the United Nations Sustainable Development Goals (UN SDGs). These outcomes range from improved human health and safety to efficient use of necessary natural resources and operational productivity to data security, privacy, and the safety of critical infrastructure.
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Empower Inclusive Teams |
Organizational culture is all about people, and we believe we are more together. People are at the heart of who we are, what we do, and how we work. Our people strategy is defined by our inclusive growth culture, advanced through talent and reward systems, and measured by our employee experience processes. These key elements enable us to accelerate progress for our customers, our teams, and the world around us.
Our culture sets the tone for Fortive’s people strategy and drives Fortive’s success. FBS, continuous improvement, and inclusion are core to our strategy and culture. We are focused on cultivating an inclusive environment where everyone can contribute to their fullest potential, attracting and retaining top talent from a wide variety of candidate sources, and sustaining policies and practices that ensure no group is inadvertently disadvantaged.
Our teams are committed to being engaged, responsible neighbors and citizens. Across Fortive, we actively contribute to and have a positive impact in the communities around the world where we live and work:
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Protect the Planet |
Fortive recognizes and embraces the responsibility of protecting the planet now, and for future generations. We harness our culture of innovation and continuous improvement to protect the environment and advance Sustainability across our value chain.
In 2024, we reduced our absolute Scope 1 and 2 greenhouse gas (GHG) emissions by 31.0% from 2019 levels, and saw our 2023-2024 Scope 3 emissions reduced by 17.4%. Fortive continued to enhance our calibrate our Scope 3 strategy through targeted supplier engagement and product use emissions profiling. With these added insights and understandings, we are formalizing our Scope 3 strategy.
34 FORTIVE CORPORATION 2025 PROXY STATEMENT
In 2023, we announced our commitment to reduce absolute water use 10% by 2029, from 2022 levels. Of primary focus are sites that are in high-risk areas for water scarcity, as defined by the World Resources Institute (WRI) Aqueduct 3.0 Water Risk Atlas, as water availability is both a business risk as well as a community resilience concern. Fortive saw a 0.3% reduction in water use from 2024 to 2025, largely due to root-cause analysis and corrective actions following 2023 performance. In 2025, we will be applying key learnings and successes to bring us closer to our 2029 target.
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Work & Source Responsibly |
We are committed to cultivating a culture of respect, integrity, and fairness. This applies to our employees as well as the suppliers, business partners, and other third parties we partner with to serve our customers on time, within budget, and at the highest standard of quality.
The health, safety, and well-being of our employees is of paramount importance, and to keep our employees safe, we prioritize identifying environmental, health and safety (EHS) risks and mitigating hazards to avoid injury or incidents. To drive accountability, we strive to have 100% of our operating companies in the top quartile for standard EHS metrics, namely total recordable incident rate (TRIR) and days away, restricted or transferred (DART).
We use our homegrown EHS Risk Score and site-level EHS risk profiles to inform areas of risk, priority of preventive actions, and drive proactive EHS and Sustainability-related programs and practices across our operations.
Our focus on safety, health, and well-being extends to our suppliers as well. The Fortive Supplier Code is available in 15 languages and provided to every supplier and articulates our expectations and standards for conduct and transparency, which includes but is not limited to, worker health and safety. The tenets of the Fortive Supplier Code are:
We uphold fair labor standards for all employees across our operating companies and value chain by cultivating a culture of respect, integrity, and fairness. We are committed to partnering with suppliers who treat their employees in an ethical and responsible manner. Annually, we conduct responsible sourcing reviews of our suppliers, reviewing policies and practices that range from fair competition and trade practices to EHS and sustainability to human and labor rights in-house and through materials sourced, as well as information security and data privacy.
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Operate with Principle |
We believe that ethical business conduct is foundational to our growth and success. We are committed to operating with integrity and set these same high expectations for those who do business on our behalf. The Fortive Code of Conduct, available in 23 languages and signed by every employee, is a clear guide to act with integrity in everything we do. Our industry leading compliance program includes SpeakUp!, a confidential channel for employees or partners to raise issues and concerns at any time.
Our Enterprise Risk Management (ERM) model provides continuity of core business operations, including better understanding of ESG risks and opportunities. Our integrated approach to risk management enables a swift and effective response to unexpected events, ensuring we continue providing for our customers and employees.
The Risk Assessment Process (RAP) is a core tool we use to identify and manage risks on an ongoing basis. Fortive requires all operating companies to participate in the RAP annually, to ensure that we are effectively identifying risk, mitigating where necessary, and driving to opportunity where applicable. The process requires that operating companies assess risks across a variety of categories that are updated annually to capture new and evolving areas.
FORTIVE CORPORATION 2025 PROXY STATEMENT 35
Data Privacy
Our commitment to being an employer and partner of choice makes digital privacy and security a top priority. We protect critical assets by establishing and enforcing clear boundaries. Transparency is needed surrounding the data we collect, how it’s used, and importantly, how it’s protected. We deeply value the trust we’ve built with our customers and employees and understand our responsibility to apply trusted technologies and best practices to our data safekeeping.
Cybersecurity
Information security is as critical to Fortive as to the world. Our operating companies provide and use digital and software capabilities and cloud-based services, which bring increased value for our customers; they can also introduce vulnerabilities that require careful management. Fortive’s team creates policies and standards that serve as a baseline across all operating companies.
Our Cybersecurity team’s strategy and annual performance targets align with the National Institute of Standards and Technology (NIST) Cyber Security Framework. NIST’s maturity rating is the best-in-class industry standard, the one against which our security programs are measured.
Disclosure and Transparency
At Fortive, we value transparency, accountability, and winning with integrity. That is why we joined the United Nations Global Compact (UNGC) as a signatory in 2021. In our 2022 Sustainability Report, we published our first Communication on Progress, to share our progress on the Ten Principles of the UNGC. In addition, we identified ten UN Sustainable Development Goals (SDGs) that we support through our Sustainability goals and operating company products and services.
We prepare our annual Sustainability Report in accordance with leading ESG frameworks, including the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), the Task Force for Climate-related Financial Disclosure (TCFD), and the UN Sustainable Development Goals (SDGs). Annually, we also submit and affirm our commitment to the UN Global Compact (UNGC) and disclose our GHG emissions inventory and performance as well as our water use data through CDP’s Climate Change and Water Security disclosures, respectively.
ESG Governance
|
Board The Nominating and Governance Committee of the Board has responsibility for oversight of climate-related strategies and goals, and sustainability disclosure and reporting. Fortive’s SVP and Chief Legal Officer, Peter Underwood, provides updates at every meeting to the Board’s Nominating and Governance Committee as well as, at least annual, to the full Board of Directors on Fortive’s Sustainability strategy and goals, and disclosure plans and reports. |
|
|
SVP, Chief Legal Officer Fortive’s Sustainability strategy and execution are managed by Peter Underwood. Mr. Underwood reports directly to the CEO, and his responsibilities include among others, management of Compliance, Enterprise Risk Management, EHS, and Sustainability. Mr. Underwood provides regular updates to Fortive’s senior leadership team, segment CEOs, and operating company leaders on Sustainability-related targets, initiatives, and performance. |
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Fortive Sustainability Team The Sustainability team works cross-functionally to guide implementation of the Sustainability strategy with other functions and the operating companies. The team is responsible for development and implementation of the company’s Sustainability strategy, focusing primarily on the Protect the Planet pillar and our Annual Day of Caring. The team reports to Mr. Underwood and briefs the senior leadership team each quarter on Sustainability targets and performance. |
36 FORTIVE CORPORATION 2025 PROXY STATEMENT
Human Capital Management
Fortive is a global team, over 18,000 strong, energized by a powerful purpose. Our people strategy centers on empowering inclusive teams working together to solve problems no one could solve alone. We intentionally seek out different skills, backgrounds, and voices to deliver results for our customers and fulfill our employee promise – For you. For us. For growth. Our people strategy is defined by this inclusive growth culture and is advanced through FBS and our career development and rewards systems. We continually measure, review, and refine our people strategy through measured employee experience processes. These key elements enable us to accelerate progress for our customers, our teams, and the world.
Inclusive Growth Culture
We are more together. Our inclusive growth culture sets the tone for Fortive’s people strategy and drives Fortive’s success.
We know that a workforce empowered by inclusivity, continuous improvement, and FBS, creates extraordinary long-term value for our people and shareholders. We are focused on cultivating an inclusive environment where everyone can contribute to their fullest potential, attracting and retaining top talent from a wide variety of candidate sources, and sustaining policies and practices that ensure no group is inadvertently disadvantaged. Fortive is committed to adhering to EEO (equal employment opportunity) principles. All people are evaluated through a neutral merit-based process. We do not consider race, ethnicity, gender, or any other protected trait in our hiring, promotional, or other processes.
To oversee our inclusive growth culture as part of our people strategy, our FBS office and Inclusive Growth Culture Center of Excellence (CoE) work closely with senior management, other Human Resource CoE’s, our Operating Companies, and Employee and Friends Resource Groups (EFRGs). Our Board of Directors, along with the Compensation Committee, also oversee our inclusive growth culture efforts as part of our people strategy and measurement actions.
We are committed to continued transparency by publicly sharing our workforce representation and inclusion results through our website (where we provide our EEO-1 report), and our annual Sustainability Report.
Business, Career Development, and Reward Systems
Our culture of continuous improvement inspires us to keep experimenting, growing, and learning. Our robust career development and reward systems advance our people strategy by attracting, growing, and retaining the exceptional people we need now and in the future. These business and career development systems strengthen our ability to deliver our employee value proposition, build our employer brand, drive professional growth for our people and results for our customers.
Our Performance and Development processes drive results and career growth for our global teams. Performance for Growth rigorously deploys our strategies into cascaded goals throughout the organization, while Development for Growth translates our beliefs and values into desired leader competencies, at all levels of the organization. Together, these processes provide a roadmap for the way we work, deliver results, and build high-performing teams.
Additionally, we design our Total Rewards programs to attract and retain talented, curious people with a growth mindset and a passion for innovation, collaboration, and continuous improvement. We offer leading programs that inspire and reward superior performance, are equitable, and foster an inclusive, diverse, and healthy global workforce.
We also invest in our people at every level through our growth and development experiences. These experiences range from leadership learning and FBS immersion to hands-on skill building in each of our three FBS pillars – growth, lean, and leadership. Collectively, these experiences build skills, strengthen performance, and prepare our people for challenging opportunities.
With our strong and evolving portfolio, our people have the opportunity to accelerate their career across multiple industries, meaningfully contributing to customer success and impact in the world.
FORTIVE CORPORATION 2025 PROXY STATEMENT 37
The following is a summary of some of our key employee growth and development experiences:
Experience |
|
Description |
Fortive Leadership Summit |
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Development experience tailored toward senior vice presidents and presidents to accelerate growth, drive unrivaled performance with FBS, and advance our inclusive culture. |
People Leader Experience |
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Deep, experiential learning for both new and experienced leaders, harnessing the best of interactive learning, and providing critical tools as our people take on greater people leadership responsibilities. |
Accelerated Leadership Experience |
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Designed for high performing employees preparing to lead Fortive businesses or functions. We use immersive and experiential learning, where leaders develop personal skills and insight to fulfill their potential. |
FBS Office and University |
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The FBS Office is dedicated to strategically embedding the mindset and toolset in everything we do. FBS University, our proprietary virtual and hands-on learning environment, develops and reinforces learning for hundreds of FBS Champions across our company each year to deliver value for our customers and shareholders. |
FBS Ignite |
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Supported with intensive development in the FBS toolset, active mentoring from the FBS Office, and executive career coaching, participants advance and share their expertise across different businesses. Over the past two years, we have expanded FBS Ignite to include our senior operating company leaders, further enabling them to lead with FBS to drive impact. |
Growth Accelerator |
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A key development experience that enables our team to solve challenges in new, inspiring ways through three key innovation tools: Deep Customer Insight, Solution Generation, and Experimentation – each designed to enable our people to develop critical, breakthrough solutions for customers. |
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Employee Experience and Feedback
Our promise to our people is – For you. For us. For growth. To achieve this promise, our leaders at all levels of the organization actively seek feedback with quarterly touchpoints to strengthen our inclusive growth culture.
In our last comprehensive census survey in Q4 2024, over 85% of our global team responded, delivering continued strength in overall engagement and inclusion and belonging at high ratings of 76% and 84%, respectively. Our results continue to inform both management and our Board of Directors on appropriate actions to enhance our culture and overall employee experience.
38 FORTIVE CORPORATION 2025 PROXY STATEMENT
Certain Relationships and Related Transactions
Policy
Under our Related Person Transactions Policy adopted by the Board, the Nominating and Governance Committee of the Board is required to review and, if appropriate, approve all related person transactions prior to consummation. If management becomes aware of a related person transaction that has not been previously approved or ratified, the transaction is submitted to the Nominating and Governance Committee at its next meeting. The Nominating and Governance Committee is required to review and consider all relevant information available to it about each related person transaction, and a transaction is considered approved or ratified under the policy if the Nominating and Governance Committee authorizes it according to the terms of the policy after full disclosure of the related person’s interests in the transaction. Related person transactions of an ongoing nature are reviewed annually by the Nominating and Governance Committee. The definition of “related person transactions” for purposes of the policy covers the transactions that are required to be disclosed under Item 404(a) of Regulation S-K.
Relationships and Transactions
Mr. Rejji P. Hayes, who is a director on our Board, is an Executive Vice President and Chief Financial Officer of CMS Energy Corporation, a publicly-traded power and energy company. Certain of our subsidiaries sell products to CMS Energy from time to time in the ordinary course of business and on an arm’s-length basis. In 2024, our subsidiaries sold approximately $300,000 of products to CMS Energy. Our subsidiaries intend to sell products to and purchase products and services from CMS Energy in the future in the ordinary course of their businesses and on an arms’-length basis.
Mr. Wright Lassiter III, who is a director on our Board, is the CEO of CommonSpirit Health, a private, not-for-profit health system. Certain of our subsidiaries sell products to CommonSpirit from time to time in the ordinary course of business and on an arm’s-length basis. In 2024, our subsidiaries sold approximately $9 million of products to CommonSpirit. Our subsidiaries intend to sell products to CommonSpirit in the future in the ordinary course of their businesses and on an arms’-length basis.
Mr. Abhijit Dubey, brother of Sharmistha Dubey, who is a director on our Board, is the Global CEO of NTT, a publicly-traded global technology company. Certain of our subsidiaries sell products to NTT from time to time in the ordinary course of business and on an arm’s-length basis. In 2024, our subsidiaries sold approximately $500,000 of products to NTT. Our subsidiaries intend to sell products to NTT in the future in the ordinary course of their businesses and on an arms’-length basis.
Our transactions with CMS, CommonSpirit, and NTT represented less than 0.2% of Fortive’s, CMS’s, CommonSpirit’s, and NTT's respective revenues in 2024.
FORTIVE CORPORATION 2025 PROXY STATEMENT 39
Director Compensation
Director Compensation Policy
The Compensation Committee reviews our non-employee director compensation policy annually and proposes changes to the Board, as appropriate. In reviewing the non-employee director compensation policy in 2024, the Compensation Committee worked with Pearl Meyer to assess the competitiveness of our non-employee director compensation policy based on benchmark information from peer companies and relevant compensation surveys. Based on its review, the Compensation Committee proposed the following non-employee director compensation policy, which recommendation the Board adopted.
Each of our non-management directors receives the following compensation:
In addition, the Board chair receives an annual retainer of $92,500, payable in cash or in RSUs pursuant to the Election, and an annual equity award with a target value of $92,500 (with 75% allocated to RSUs and 25% allocated to options ), the chair of the Audit Committee receives an annual retainer of $25,000, each of the non-chair members of the Audit Committee receives an annual retainer of $15,000, the chair of the Compensation Committee receives an annual retainer of $20,000, each of the non-chair members of the Compensation Committee receives an annual retainer of $10,000, the chair of the Nominating and Governance Committee receives an annual cash retainer of $20,000, each of the non-chair members of the Nominating and Governance Committee receives an annual retainer of $10,000, the chair of the Finance Committee receives an annual retainer of $10,000, and each of the non-chair members of the Finance Committee receives an annual retainer of $10,000, in each case, payable pursuant to the Election.
Pursuant to the Non-Employee Director’s Deferred Compensation Plan, each director may make an election during the prior year to receive the director’s annual retainer, including the base annual retainer payable to all directors, additional annual retainer payable to the Board chair, and the additional annual retainer payable to the committee chairs and members, in:
Stock Ownership Policy
Our Board has also adopted stock ownership requirements for non-management directors. Under the requirements, each non-management director (within five years of his or her initial election or appointment) is required to beneficially own shares of our common stock with a market value of at least five times his or her annual retainer. Once a director has acquired a number of shares that satisfies such ownership multiple, such number of shares then becomes such director’s minimum ownership requirement (even if his or her retainer increases or the fair market value of such shares subsequently declines). Under the policy, beneficial ownership includes time-based RSUs held by the director and shares in which the director or his or her spouse
40 FORTIVE CORPORATION 2025 PROXY STATEMENT
or child has a direct or indirect interest, but does not include shares subject to unexercised stock options. In addition, our Board has adopted a policy that prohibits any director or executive officer from pledging as security under any obligation any shares of our common stock that he or she directly or indirectly owns and controls. We have also adopted a policy that prohibits our directors and employees from engaging in any transactions involving a derivative of our securities, including hedging transactions.
Director Compensation Table
The table below summarizes the compensation paid to the non-management directors for the year ended December 31, 2024. Mr. Lico is a member of the Board but does not receive any additional compensation for services provided as a director and, therefore, is not included in the table below.
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NAME |
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FEES EARNED |
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STOCK |
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OPTION |
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TOTAL |
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Eric Branderiz(3) |
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– |
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$268,456 |
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$57,412 |
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$325,868 |
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Daniel L. Comas |
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$125,000 |
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$143,712 |
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$57,412 |
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$326,123 |
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Sharmistha Dubey(3) |
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– |
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$263,714 |
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$57,412 |
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$321,126 |
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Rejji P. Hayes(3) |
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$5,000 |
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$268,456 |
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$57,412 |
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$330,868 |
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Wright Lassiter III(3) |
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– |
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$254,231 |
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$57,412 |
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$311,642 |
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Kate D. Mitchell(3) |
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$75,000 |
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$215,567 |
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$57,412 |
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$347,979 |
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Jeannine Sargent |
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$140,000 |
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$143,712 |
|
|
$57,412 |
|
|
$341,123 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan G. Spoon(3) |
|
$54,375 |
|
|
$419,098 |
|
|
$84,242 |
|
|
$557,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME |
AGGREGATE NUMBER |
|
AGGREGATE NUMBER |
||
|
|
|
|
|
|
|
|
|
|
|
|
Eric Branderiz |
6,380 |
|
|
3,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Daniel L. Comas |
9,830 |
|
|
1,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sharmistha Dubey |
17,210 |
|
|
3,615 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Rejji P. Hayes |
6,200 |
|
|
3,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Wright Lassiter III |
10,730 |
|
|
3,485 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Kate D. Mitchell |
36,681 |
|
|
2,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeannine Sargent |
13,729 |
|
|
1,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan G. Spoon |
56,344 |
|
|
5,745 |
|
|
|
|
|
|
|
FORTIVE CORPORATION 2025 PROXY STATEMENT 41
PROPOSAL 2: Advisory Vote on Executive Compensation
In accordance with Section 14A of the Exchange Act, we are asking our shareholders to vote at the Annual Meeting to approve, on an advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement (the “say-on-pay vote”).
As discussed in detail under the heading “Compensation Discussion and Analysis,” our executive compensation program is designed to attract and retain talented, high-performing leaders by delivering a total pay opportunity that is competitive in the market; place a strong emphasis on long-term, equity-based compensation to align interests of our executive officers and our shareholders; incentivize performance that leads to achievement of our business objectives in both the short-term and long-term; and reward both short-term and long-term performance aligned with our culture of high expectations.
Our executive compensation program is structured within a strong framework of compensation governance with a bias toward compensation that is dependent on long-term company performance and with compensation that is balanced to mitigate risks appropriately.
We are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement. Accordingly, we are asking our shareholders to vote on an advisory basis “FOR” the following non-binding resolution:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby approved.”
The vote on this proposal is not intended to address any specific element of compensation; rather, the vote relates to all compensation relating to the Company’s named executive officers, as described in this Proxy Statement. The vote is advisory and is not binding on the Company, the Board, or the Compensation Committee and will not be construed as overruling a decision by, or creating or implying any additional fiduciary duty for, the Company, the Board, or the Compensation Committee. However, the Board and Compensation Committee value the opinions expressed by shareholders in their votes on this proposal and will consider the outcome of the vote when making future compensation decisions and policies regarding the Company’s executive officers.
42 FORTIVE CORPORATION 2025 PROXY STATEMENT
Compensation Discussion and Analysis
Table of Contents
Compensation Discussion And Analysis |
44 |
44 |
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45 |
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46 |
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47 |
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47 |
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48 |
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49 |
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49 |
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51 |
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53 |
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55 |
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55 |
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55 |
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61 |
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66 |
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Timing of Option Awards in Relation to the Disclosure of Material Nonpublic Information |
66 |
66 |
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67 |
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Insider Trading Policy |
67 |
67 |
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67 |
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67 |
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68 |
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68 |
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70 |
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70 |
FORTIVE CORPORATION 2025 PROXY STATEMENT 43
This Compensation Discussion and Analysis (“CD&A”) explains our executive compensation program for our Named Executive Officers (“NEOs”) and the Compensation Committee’s process and rationale for making pay decisions for 2024.
Executive Summary
The Compensation Committee uses a rigorous, ongoing process to align executive pay with long-term value creation for shareholders and all stakeholders. This ensures our executive compensation programs are intentionally designed to align compensation outcomes with company performance.
Changes Made in 2024 Reinforces our Focus on Pay-for-Performance |
We continue to listen to our shareholders and thoughtfully refine our programs. We believe these changes align our executive compensation programs with shareholder returns while continuing to reward performance and retain talent. In 2024, we: |
•
Increased the weighting of company financial goals in our annual incentive plan (“ICP”) to 80% (from 60%), and
•
Aligned our relative Total Shareholder Return (“rTSR”) metric to market best practices, and
•
Removed two of our largest peers from our Compensation Peer Group to ensure our peer group continue to remain appropriate
|
Sustained Long-term Value Creation |
Since our inception, we have evolved our portfolio and leveraged the Fortive Business System (“FBS”) to accelerate growth and innovation and expand market share and profitability to unlock exceptional value for customers and shareholders as demonstrated by our financial results over the last five years: |
•
An acceleration to mid-single-digit CAGR on Core Revenue Growth*
•
Delivered 14% CAGR on Adjusted Earnings per Share*
•
Achieved 18% CAGR on Free Cash Flow* underpinned by industry-leading net working capital performance
•
Achieved ~600 basis points of Adjusted Operating Profit Margin* expansion and ~350 basis points of adjusted gross margin expansion amidst unprecedented inflation
|
2024 Company Performance |
In 2024, our operational discipline led to our portfolio performing at or above initial guidance1 to the investment community on most financial metrics: |
•
Adjusted Earnings Per Share of $3.89 (13% growth)
•
Free Cash Flow of $1.4B (13% growth)
•
Adjusted Operating Profit Margin of ~27% (+100 bps)
•
In light of the mixed macroeconomic environment for Precision Technologies segment, however, Core Revenue Growth across the Fortive portfolio was 1% which is reflected in the lower Company Performance Factor applied to our annual ICP as well as in our performance stock units
•
In addition, we executed on our plan to prioritize the return of capital to shareholders by utilizing our record free cash flow to return ~$1B to shareholders through the repurchase of ~12M shares and grew dividends ~10% year-over-year
|
Our culture of continuous improvement and commitment to FBS – the foundation for our executive officer’s individual Strategic Performance Factors – led to another year of productive Kaizen activity. The ongoing integration of AI and automation into our evolving FBS toolset resulted in a faster, more efficient pipeline of exciting new products, significant productivity improvements, enhanced customer experiences, and increased win rates with reduced customer costs.
Our accelerated pace of innovation in 2024 helped sustain top-line momentum. The separation of our Precision Technologies segment positions Fortive to drive improved core sales growth, and our commitment to leverage FCF through the separation to return capital to shareholders with share repurchases provides greater clarity on our near-term focus and future long-term value creation strategy.
1 We set our incentive plan goals at mid to high range of guidance.
* Core Revenue Growth (“Core Growth”), Adjusted Operating Profit Margin, Adjusted Earnings Per Share (“Adjusted EPS”), and Free Cash Flow are non-GAAP financial measures. For the definition of these non-GAAP financial measures and the reconciliation of such measures to the corresponding GAAP measures, please refer to “Non-GAAP Financial Measures” in Appendix A.
44 FORTIVE CORPORATION 2025 PROXY STATEMENT
Pay For Performance
Our executive compensation program is designed so that the compensation realized by our executive officers is dependent on actual performance and aligned to our shareholders experience. This is the foundation of our compensation philosophy and demonstrated by:
The rigor of our goal-setting and alignment of our executive officers to shareholder value creation is further reflected when examining our PSUs in the chart below, with PSUs constituting the largest component of target compensation. The realizable value of PSUs often trail target grant date fair value as shown in the corresponding “Summary Compensation Table” when our total shareholder return did not outperform relative to the S&P 500 index companies.
The contents of this section are supplemental to, and not intended to replace, the disclosure in the “Pay vs. Performance” section made pursuant to Item 402(v) of Regulation S-K.
* 27% of Target 2024 PSUs were projected to payout as of December 31, 2024.
** Realizable PSU Compensation is based on, for vested awards, the actual number of shares earned based on the corresponding 3YR performance multiplied by the closing price of our common stock on the last trading day of the grant year (“the Applicable Price”) and, for unvested awards, the projected number of shares that would be earned assuming the relative TSR performance and the Core Growth performance as calculated at the end of 2024 applied for the remainder of the performance period multiplied by the Applicable Price.
*** For vested awards, the actual 3YR TSR percentile ranking corresponding to the PSUs granted to the CEO during such year. For unvested awards, the corresponding projected 3YR TSR percentile ranking as calculated at the end of 2024 applied for the remainder of the performance period.
FORTIVE CORPORATION 2025 PROXY STATEMENT 45
Overview of Fortive
2024 Named Executive Officers
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James A. Lico President and Chief Executive Officer |
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Charles E. McLaughlin Senior Vice President |
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Tamara Newcombe President and CEO of |
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Olumide Soroye President and CEO of |
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Stacey Walker Senior Vice President |
|
1 Title and role as of December 31, 2024.
How We Drive Innovation and Optimize Performance
Our 2024 results contributed to our strong 5-year execution track record in financial performance and helped sustain top-line momentum going into 2025 to improve core sales growth. Our announcement of the separation of the Precision Technologies segment into a new company, Ralliant, will provide additional clarity on strategy and enhance value creation.
46 FORTIVE CORPORATION 2025 PROXY STATEMENT
Looking Ahead to 2025
Spin of Precision Technologies Segment: In September 2024, we announced our intention to separate our company into two independent, publicly traded companies, each with a focused business model and its own clear growth and capital allocation priorities. Upon completion of this separation, Fortive will be a technology solutions company comprised of a leading portfolio of brands currently operating under Fortive’s Intelligent Operating Solutions ("IOS") and Advanced Healthcare Solutions ("AHS") business segments. These durable growth-oriented businesses, with approximately 50 percent recurring revenue, are aligned with significant long-term growth trends driven by the shift towards software-enabled workflows, the growing importance of connected devices and IoT offerings, rising productivity, safety and security requirements, and the demand for safer, high-quality healthcare globally. Fortive will be well positioned to continue to drive growth and profitability across its portfolio through a combination of organic compounding and execution of a focused and balanced capital allocation strategy, prioritizing M&A that enhances recurring revenue, growth, and free cash flow. The Precision Technologies business segment will become an independent entity doing business under the name Ralliant.
Leadership Transitions: We foster leadership potential in all our people and have been intentional about growing our next generation of leaders, who are energized by the immense opportunities ahead. In connection with the separation, we also announced leadership changes aligned with our internal talent-development and succession plans. Jim Lico, President and CEO will be retiring upon completion of the separation and Olumide Soroye, currently President and CEO of our IOS and AHS segments, will become Fortive’s next President and CEO. On March 24, 2025, Chuck McLaughlin, retired as SVP and CFO, and Mark Okerstrom was appointed Fortive's SVP and CFO. Mr. Lico and Mr. McLaughlin will continue to serve in non-executive officer roles through the end of the year to assist with the transitions and ensure continuity.
Impact on Executive Compensation Programs: As always, we adapt our practices to keep pace with our company's evolution. In light of these transformative events, we plan to conduct a comprehensive review of our philosophy, programs, and compensation peer group in 2025. This will ensure continued alignment with our future portfolio, talent profile, and the business economics of our new company.
Equity Plan Renewal: We will be requesting the renewal of our equity plan due to its upcoming expiration in 2026. No new shares are being requested; instead, outstanding equity will be rolled over into this new plan. This approach ensures we can continue our commitment to primarily incentivize our executives through equity compensation and maintain alignment with our shareholders.
2024 Say-on-Pay Advisory Vote and Shareholder Engagement
The Compensation Committee has a history of keeping an open dialogue with our investor community. Consistent with this approach, we held our regular annual engagement that covered executive compensation and renewal of our equity plan, among other topics, including the results of our advisory shareholder vote on compensation in 2024. In addition, we had an active dialogue about the positive program changes we implemented in 2024, further described below. The results of the 2024 say-on-pay advisory vote was 92.06% in favor.
What We Heard and What We Did
During the most recent rounds of discussions, we reached out to our top 25 investors representing ~65% of outstanding shares and met with investors representing 37% of outstanding shares.
Many shareholders reiterated their appreciation for our proactivity, responsiveness, and continued efforts to strengthen our programs. Investors were pleased to see the changes we confirmed in 2024 in response to prior outreach.
FORTIVE CORPORATION 2025 PROXY STATEMENT 47
A summary of the actions we took in 2024 and prior years is described below:
What We Heard |
|
What We Did |
|
When We |
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||
Enhance transparency of the annual incentive award determined by individual strategic measures, given the weighting. |
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•
Committed to more transparency, and highlighted the competitive reasons for any limited disclosure.
•
Reduced the weighting of the individual strategic performance goals to 20% (from 40%).
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|
2024 |
Align the relative TSR payout structure for the PSUs to competitive market practice. |
|
•
Aligned the relative TSR payout structure to peer and market practices for our 2024 PSU cycle, creating a stronger pay-for-performance relationship.
•
Removed "floor" payout on relative TSR PSU for positive absolute TSR performance.
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2024 |
Refine the peer group to ensure it appropriately reflects our business mix and talent markets. |
|
•
Enhanced peer group selection methodology and alignment to our business mix and talent markets.
•
Eliminated two larger peers for comparability.
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|
2024 |
Limit maximum cash severance payment without shareholder approval. |
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•
Adopted a cash severance policy that prohibits cash severance payment arrangements with Section 16 officers in excess of 2.99 times the sum of base salary and target bonus.
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2023 |
Subject time-based equity awards, in addition to incentive compensation, to the clawback policy. |
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•
Added the discretionary ability of the Board to clawback compensation, including time-based equity awards, upon gross misconduct leading to a financial restatement.
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2023 |
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|
Increase the percentage of long-term incentive awards dependent on TSR and include additional performance measures. |
|
•
Increased PSUs from 35% to 50% of the equity mix.
•
Added absolute three-year average Core Revenue Growth as a performance measure.
•
Set PSUs weightings to 60% relative TSR performance and 40% three-year average Core Revenue Growth performance.
|
|
2022 |
Compensation Best Practices
Our executive compensation program reflects best practices in design and governance:
|
|
|
What We Do |
|
What We Don’t Do |
|
|
|
✓ Frequent and Robust Shareholder Outreach ✓ Performance Measures Aligned with Business Objectives ✓ Rigorous Performance Goal Setting ✓ Extended Vesting Requirements for Equity Awards ✓ Enhanced Clawback Policy ✓ Stock Ownership Requirements ✓ Annual Risk Assessment ✓ Independent Compensation Consultant ✓ Limited Perquisites ✓ ESG Performance Incorporated into the Compensation Program |
|
× No Excise Tax Gross-Ups × No “Single-Trigger” Change-in-Control Benefits × No Pledging or Hedging × No Evergreen Provision in Stock Incentive Plan × No Repricing of Stock Options without Shareholder Approval × No Liberal Share Recycling under Stock Incentive Plan × No Defined Benefit Plans for Executive Officers × No Delivery of Dividends or Dividend Equivalents on Unvested Equity Awards × No Cash Severance Benefits above 2.99x of the Annual Cash Compensation (base salary plus target bonus) without Shareholder Approval |
48 FORTIVE CORPORATION 2025 PROXY STATEMENT
What Guides Our Program
Our Compensation Philosophy
Our compensation philosophy is aligned with building long-term value for our shareholders and other stakeholders, with our executive compensation program designed to:
Principle |
|
Description |
|
How We Accomplish |
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|
|
||
Attract, Recruit & Retain |
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Recruit, retain, and motivate talented, high-performing leaders by delivering a total pay opportunity that is competitive in the market. |
|
Design our executives’ pay packages considering our Compensation Peer Group pay practices, performance, succession planning, complexity, and relative importance of role. |
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|
||
Align with Shareholders |
|
Place a strong emphasis on long-term, equity-based compensation to align interests of our executive officers and our shareholders. |
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Deliver 78% and 72% of total direct compensation to the CEO and average other NEOs, respectively, in the form of equity-based compensation (Options, PSUs, RSUs) where intrinsic value is tied to the delivery of long-term value to our shareholders. In addition, PSUs provide alignment and accountability to achievement of our long-term strategic and financial priorities. |
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Align with Business Strategy |
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Incentivize performance that leads to achievement of our business objectives in both the short-term and long-term. |
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Set substantive financial performance goals with targets at or above midpoint guidance provided to external investors, reflecting our strategy at the beginning of performance cycles and hold executives accountable for achieving those targets. Consider individual performance in achievement against strategic goals to balance focus on business operations with business financial performance. |
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Align with Performance |
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Reward both short-term and long-term performance aligned with our culture of high expectations. |
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92% of CEO target total direct compensation is performance-based; 78% of target compensation is based on long-term performance and 14% on short-term performance. 88% of average other NEOs target total direct compensation is performance-based; 72% of target compensation is based on long-term and 16% on short-term performance.
|
FORTIVE CORPORATION 2025 PROXY STATEMENT 49
How We Make Compensation Decisions
The Compensation Committee oversees the executive compensation program for our NEOs. The Compensation Committee is comprised of independent, non-employee members of the Board. The Compensation Committee works very closely with the full Board, management and our independent consultant to examine the effectiveness of the Company’s executive compensation program throughout the year. Specific responsibilities are summarized in the table below:
|
|
|
Compensation Committee |
|
Determines our compensation philosophy and design as well as specific programs and policies for our executive officers; and Approves the annual compensation targets and awards for our executive officers. |
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Board of Directors and Management |
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The Compensation Committee consults with the Board, the CEO, the Chief Human Resource Officer, and other members of management as they establish the compensation program and policies, and evaluate performance. |
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Independent Compensation Consultant |
|
Provides counsel and guidance to the Compensation Committee concerning our compensation design, program effectiveness, and annual compensation; and Reports directly to the Compensation Committee. The Committee engaged Pearl Meyer in 2024 as its independent compensation consultant to provide counsel and guidance to the Compensation Committee in the design of our 2024 and 2025 executive compensation programs. The Compensation Committee reviewed Pearl Meyers’ independence in accordance with the NYSE Listing Standards and applicable SEC regulations and concluded that the firm’s work did not raise any conflict of interest.
|
The Compensation Committee’s authority and responsibilities are specified in the Compensation Committee’s charter, which is accessible on our website, www.fortive.com, by selecting ‘‘Investors,’’ then ‘‘Governance", and then “Governance Documents.’’ Web addresses to the Fortive website (www.fortive.com) are provided throughout this document for convenience only. Please note that information on or accessible through the Fortive website is not part of, or incorporated by reference into, this proxy statement.
Compensation Elements and Objectives
While fixed compensation is important to provide a stable source of income, the Compensation Committee believes executive compensation should primarily be performance-based, emphasizing long-term incentive compensation in the form of equity awards aligned with our shareholders’ interests. The following table sets forth the three primary elements of our compensation program:
ELEMENT |
|
FORM |
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COMPENSATION PERIOD |
|
PERFORMANCE MEASURES |
|
PRIMARY OBJECTIVES |
Base Salary |
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Cash |
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1-year Paid regularly |
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N/A |
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Attract and retain executive talent. Recognize day-to-day role and scope of responsibility and impact. Provide stable source of income. |
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Annual |
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Cash |
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1-year Annual performance, paid once |
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Adj. EPS Free Cash Flow Core Revenue Growth Strategic Objectives |
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Align compensation with business strategy. Reward annual performance on key strategic, financial, and operational measures. Motivate and reward high performance. |
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Long-Term Incentive |
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PSUs |
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4-years 3-year performance, |
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Relative TSR vs. S&P 500 Core Revenue Growth |
|
Align the interests of our executives with the delivery of long-term value to shareholders. Retain executive talent through an extended vesting period. Incentivize strong relative TSR and absolute Core Revenue Growth. |
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RSUs |
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4-years 50% vesting in years 3 and 4 |
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Adj. EBITDA Margin for incremental RSUs |
|||
|
Stock Options |
|
4-years 50% vesting in years 3 and 4 |
|
Stock Price |
50 FORTIVE CORPORATION 2025 PROXY STATEMENT
2024 Compensation Mix (At Target)¹
Our executive compensation program emphasizes performance-based compensation that aligns with long-term value creation for our shareholders. We design our program to be heavily weighted toward performance-based compensation. As shown below, the majority of our 2024 executive compensation was performance-based.
How We Stay Competitive
The Compensation Committee believes it is essential to understand the relevant market for executive talent to inform our decision-making and ensure our executive compensation program supports our recruitment and retention needs.
In designing the 2024 executive compensation program, the Compensation Committee worked with Pearl Meyer to assess the competitiveness of our executive compensation levels and practices using the peer group of companies listed below.
In response to shareholder feedback, the Compensation Committee worked with Pearl Meyer to identify changes to the peer group and specifically, two of our largest peers, Danaher and 3M were removed. The resulting group of 15 peers better aligns with our current portfolio mix, size (based on revenues and market capitalization) and talent market.
In assessing the composition of the peer group, the Compensation Committee considered:
•
Companies in relevant industries (e.g., electrical/electronic equipment, industrial conglomerates/machinery, healthcare equipment & supplies, life science, software, etc.), and
•
Companies with whom we compete for executive talent, and
•
Companies with similar revenue (primary metric), market capitalization, an enterprise value/revenue ratio of at least 2x, and strong operating margin and long-term TSR results.
|
|
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Percentile |
Revenue |
|
|
75th Percentile |
$12.0B |
|
|
|
50th Percentile |
$6.0B |
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25th Percentile |
$5.1B |
|
|
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FTV |
$6.0B |
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|
|
FTV Positioning |
50th %ile |
|
|
|
Source: S&P Capital IQ; based on Fortive and peer financials at the time of the Compensation Peer Group review (Fall 2023) used to inform fiscal 2024 pay decisions |
FORTIVE CORPORATION 2025 PROXY STATEMENT 51
Our 2024 Compensation Peer Group
INDUSTRY |
|
COMPANY |
||
|
|
|
||
Electrical Equipment/Machinery (27%) |
|
Ametek Inc IDEX Corporation |
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Illinois Tool Works Inc. Rockwell Automation Inc. |
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|
||
Health/Life Sciences (20%) |
|
Mettler-Toledo International Inc. STERIS plc |
|
Stryker Corporation |
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Multi-Industry (33%) |
|
Ecolab, Inc. Honeywell International Inc. Roper Technologies, Inc |
|
Trimble Inc. Zebra Technologies Corporation |
|
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||
Software Cos. (20%) |
|
Autodesk, Inc. ServiceNow, Inc. |
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Synopsys, Inc. |
In addition to peer group data and compensation survey data, the Compensation Committee also considers our diverse business mix, individual performance, succession planning, and complexity of role to establish meaningful compensation.
Looking Ahead to 2025
A holistic review of the compensation peer group is planned for 2025 to ensure continued alignment to our go-forward portfolio, talent profile, and business economics of our new company.
52 FORTIVE CORPORATION 2025 PROXY STATEMENT
How We Measure Performance
Our executive compensation program’s performance measures and goals are based on the factors we believe are most relevant to our shareholders and consistent with the expectations we communicate. Performance goals are based on the financial guidance provided to our shareholders, with targets established at or above midpoint of the corresponding guidance, and the thresholds set within a narrow range of the target. Given most of our executive compensation consists of equity awards, if we were to set financial guidance below shareholder expectations, it could negatively impact the market value of our common stock, affecting both shareholders and executives. Therefore, establishing performance targets at or above midpoint of our financial guidance to the investment community ensures that our compensation performance goals are aligned with measures that drive market value. |
|
Performance goals are based on the financial guidance provided to our shareholders, with targets established at or above midpoint of the corresponding guidance. The relative TSR target is set at the 55th percentile ranking relative to the S&P 500 index companies so that a target payout is dependent on outperforming within the market index. |
A Closer Look at Our Financial Performance Measures
The Compensation Committee discusses performance measure selection regularly. Based on those discussions, we have selected a carefully balanced mix of quantifiable absolute and relative financial measures across our incentive plans to support our business strategy and alignment with shareholder, as follows:
Measure(1) |
|
ICP |
|
LTI |
|
Rationale |
|
|
|
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|
||
Adjusted EPS |
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|
|
|
Adjusted EPS reflects our ability to generate profits for our shareholders, as well as our overall financial health and efficient management. By excluding non-recurring expenses or gains, Adjusted EPS aims to highlight a more accurate representation of our operational performance and earnings potential. We set our 2024 financial target for Adjusted EPS at the midpoint of the initial guidance provided to shareholders. |
|
Free Cash Flow (“FCF”) |
|
|
|
|
By tying annual incentives to FCF, executives are motivated to make decisions that prioritize long-term, sustainable financial health by rewarding activities that contribute to long-term cash generation. In order to better articulate the tie between initial guidance to our investment community and our financial target, we changed to FCF from FCF conversion ratio. We set our 2024 financial target for FCF at the initial guidance provided to shareholders. |
|
Core Revenue Growth |
|
|
|
Core Revenue Growth rate is the rate of revenue growth from our existing businesses on a year-over-year basis, which is an important measure of the performance of our existing businesses and is a key measure of the effectiveness and execution of our long-term organic growth strategies, including new product introductions, marketing and sales effectiveness, and customer growth. We set our 2024 financial target for Core Revenue Growth at the high-end of guidance provided to shareholders. |
||
Relative TSR |
|
|
|
|
Relative TSR provides a clear benchmark for evaluating our performance against the broader market, motivating management to achieve superior performance compared to peers. This fosters competitiveness and innovation to support the creation of long-term shareholder value. The target is set at the 55th percentile ranking relative to the S&P 500 index companies linking program payout to our TSR outperforming within the S&P 500 index. |
|
Adjusted EBITDA Margin(2) |
|
|
|
|
EBITDA provides a clear view of our operational performance and by excluding non-operating or non-recurring expenses, it reflects the core profitability of our business. Using Adjusted EBITDA in our long-term incentive plan encourages a focus on sustainable financial performance over the long term. We set our 2024 financial target for Adjusted EBITDA Margin at the high-end of guidance provided to shareholders. |
FORTIVE CORPORATION 2025 PROXY STATEMENT 53
Setting our Core Revenue Growth Goals
Why Is Core Revenue Growth also included in the Long-Term Incentive Program?
We believe that prioritizing Core Revenue Growth rate in both our short-term and long-term incentive programs provides the best opportunity to align our incentives with long-term value creation for our stakeholders.
Why do we not set a three-year Core Revenue Growth target at the time we award PSUs?
We set annual Core Revenue Growth goals for long-term incentives instead of three-year goals since we do not offer guidance for Core Revenue Growth beyond the annual period. Disclosing a three-year target for compensation could potentially mislead our investors. Additionally, predicting the contribution from acquisitions (after one year) is uncertain.
Why Was the Core Revenue Growth target in 2024 lower than the 2023 target and results?
The chart below illustrates the fluctuation in our Core Revenue Growth rate, emphasizing the importance of setting annual financial targets based on prevailing market and economic conditions. Our target-setting methodology aligns Core Revenue Growth at or above the guidance shared with shareholders at the start of each year. This ensures that we reward outperformance relative to these expectations. While many companies use absolute revenue as a compensation metric, we use revenue growth rate to demonstrate improvement in revenue year over year, with any positive growth rate resulting in year over year increase in absolute revenue. Because we use a growth rate, we believe using a “prior year plus” target-setting approach is not sustainable over time, or suitable for incentive plan purposes. Our approach has consistently led to increased revenues year after year. See graph below:
54 FORTIVE CORPORATION 2025 PROXY STATEMENT
2024 Executive Compensation in Detail
Base Salaries
In 2024, a company-wide merit adjustment budget was approved, including for our NEOs, who participated on the same terms as other eligible employees. Despite strong financial and personal performance, base salaries for our NEOs were held flat recognizing our philosophy to focus on variable compensation.
In making base salary decisions, the Compensation Committee considers the CEO’s recommendations (other than concerning his own base salary) and each NEO’s position and level of responsibility within the Company. The Committee also considers factors such as competitive market data as well as individual performance, experience, internal equity, and succession.
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EXECUTIVE OFFICER |
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2024 BASE |
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2023 BASE |
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PERCENTAGE |
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James A. Lico |
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$1,250,000 |
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$1,250,000 |
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0.0% |
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Charles E. McLaughlin |
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$760,000 |
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$760,000 |
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0.0% |
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Tamara Newcombe |
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$725,000 |
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$725,000 |
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0.0% |
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Olumide Soroye |
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$750,000 |
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$750,000 |
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0.0% |
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Stacey Walker |
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$625,000 |
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$625,000 |
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0.0% |
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Annual Incentive Compensation
Design At-A-Glance
In response to shareholder feedback, in 2024, the Compensation Committee increased the weighting of the Company Performance Factor to 80% (from 60%), with a corresponding decrease to the weighting of the Strategic Performance Factor to 20% (from 40%).
For 2024, each NEO was eligible for an incentive award equal to his or her base salary multiplied by his or her target award opportunity, multiplied by the Composite Performance Factor (which is the sum of the Company Performance Factor (80% weighting) and the individual Strategic Performance Factor (20% weighting)).
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THE 2024 ANNUAL INCENTIVE COMPENSATION FORMULA |
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Base Salary ($) |
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× |
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Target Award Opportunity (%) |
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× |
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Composite Performance Factor
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= |
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Actual Incentive Payout |
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Fortive Company Performance (80%)
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+ |
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Strategic Performance (20%)
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FORTIVE CORPORATION 2025 PROXY STATEMENT 55
80%
Fortive
Company
Performance
Factor
20%
Strategic
Performance
Factor
The graphic below describes the 2024 Annual Incentive Compensation components:
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The Compensation Committee approved financial measures that align with our investment community expectations. |
Performance Measures |
Weighting |
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Adjusted EPS |
60% |
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Free Cash Flow |
20% |
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Core Revenue Growth |
20% |
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We build |
Customer success |
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The Compensation Committee establishes individual performance goals to align with the Company's overall strategic initiatives and core values. |
extraordinary teams for extraordinary results |
inspires our innovation |
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We compete for shareholders |
Kaizen is our way of life |
Fortive Company Performance Factor (80% Weighting)
The Company Performance Factor portion applied to each NEOs’ 2024 Annual Incentive Compensation was designed to align with the expectations of our investment community as well as demonstrate the execution of our business strategy. We intentionally set our targets at the mid to high range of initial guidance provided to the investment community.
56 FORTIVE CORPORATION 2025 PROXY STATEMENT
Strategic Performance Factor (20% Weighting)
The Strategic Performance Factor portion applied to each NEOs’ 2024 Annual Incentive Compensation was determined based on the evaluation of their individual contributions to predefined financial, operational, strategic, and ESG measures across four performance categories that align with our corporate values. The performance categories and weightings varied based on the NEOs responsibilities and the function or group he or she leads, and included:
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EXTRAORDINARY |
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CUSTOMER |
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KAIZEN |
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SHAREHOLDERS |
TEAMS |
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SUCCESS |
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Fortive Business System Innovation and automation |
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Financial performance indicators |
Employee engagement & turnover Workforce planning & leadership funnels Inclusive culture |
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New product growth Innovation & transformation Customer satisfaction |
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Target Award Opportunity
Target award opportunities are expressed as a percentage of base salary. The Compensation Committee also considers market data in setting target award amounts. The Compensation Committee made a modest adjustment to Ms. Walker’s target award opportunity based on findings from a comprehensive benchmarking review. All other NEO target award opportunities remained unchanged from 2023. Target award opportunities for 2024 were as follows:
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EXECUTIVE OFFICER |
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2024 |
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2024 |
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2023 |
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2023 |
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YEAR |
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James A. Lico |
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190% |
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$2,375,000 |
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190% |
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$2,375,000 |
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0% |
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Charles E. McLaughlin |
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130% |
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$988,000 |
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130% |
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$988,000 |
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0% |
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Tamara Newcombe |
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150% |
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$1,087,500 |
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150% |
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$1,087,500 |
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0% |
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Olumide Soroye |
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150% |
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$1,125,000 |
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150% |
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$1,125,000 |
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0% |
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Stacey Walker |
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90% |
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$562,500 |
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85% |
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$531,250 |
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6% |
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2024 Company Performance Factor Determination
For 2024, the Compensation Committee established Adjusted EPS, Free Cash Flow, and Core Revenue Growth as the performance measures for the Company Performance Factor. For each measure, the Compensation Committee established threshold, target, and maximum levels of performance. The chart below shows the 2024 goals and weightings for each measure, as well as actual results. The payout percentages for performance between threshold and target, or between target and maximum, respectively, were determined by linear interpolation.
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2024 PERFORMANCE MEASURES & RESULTS |
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PAYOUT LEVEL |
% OF TARGET |
ACTUAL |
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ADJUSTED |
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FCF |
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CORE REVENUE |
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Maximum |
200% |
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$4.17 |
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$1,513 |
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5.6% |
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Target |
100% |
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$3.79 |
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$1,375 |
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4.0% |
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Threshold |
50% |
(0% for Core Revenue Growth) |
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$3.41 |
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$1,169 |
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2.8% |
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Actual Results |
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$3.89 |
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$1,406 |
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1.3% |
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Payout % (Before Weighting) |
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126.3% |
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122.5% |
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0% |
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Weighting of Measure |
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60% |
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20% |
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20% |
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Weighted Payout |
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75.8% |
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24.5% |
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0% |
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Final Company Performance Factor |
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100.3% |
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* Adjusted EPS, Free Cash Flow (“FCF”), and Core Revenue Growth are non-GAAP financial measures. For the definition of these non-GAAP financial measures and the reconciliation of such measures to the corresponding GAAP measures, please refer to “Non-GAAP Financial Measures” in Appendix A.
FORTIVE CORPORATION 2025 PROXY STATEMENT 57
2024 Strategic Performance Factor Determination
The Compensation Committee, in consultation with the Board, established performance goals for each NEO to align with the Company’s overall strategic initiatives at the beginning of 2024. The Compensation Committee considers the individual’s impact and results against performance goals, while also considering the individual’s overall performance, the contribution of such individual to the Company’s results and the individual’s demonstrated leadership behavior in alignment with the Company’s core values. Following such assessment, the Compensation Committee assigns each NEO a rating between 0% and 200%. The following tables summarize the individual strategic performance assessment for 2024:
James A. Lico
FORTIVE VALUE |
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Wgt. |
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goal |
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2024 Performance |
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Wgtd. |
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Extraordinary Teams |
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20% |
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Succession Planning: Continue to strengthen leadership funnels, C-suite succession |
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Accelerated year-over-year progress in the development and growth of our leadership talent: Successful CEO succession for FTV and Ralliant, and Improvements in C-suite roles and OpCo President roles with enhanced succession depth and strength (~33% improvement), and Successful succession of Presidents at four OpCos and two external hires to boost leadership capabilities. |
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20% |
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Talent Capability: Build capability in technology and innovation verticals |
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Year-over-year improvement in leadership capability among technology and innovation verticals (Product, FORT, ML/AI): New technology and innovation leaders across OpCos, and Expansion of FORT capability into OpCos. |
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Customer Success |
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20% |
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AI /Automation: Deliver more value to customers by leveraging AI and automation to expand portfolio evolution |
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Year-over-year progress in portfolio evolution of AI-related solutions to achieve operational efficiency gains (+75% against target). |
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20% |
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Kaizen |
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20% |
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Kaizen Activity: Use FBS toolkit to drive cyber and geopolitical risk reduction |
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Year-over-year improvement in de-risking Cyber through shared-service model. Continued improvement in geopolitical de-risking of manufacturing operations and processes through expanded diversification of manufacturing and supply chain. |
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20% |
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FBS: Successfully deploy FBS toolkit for SaaS to improve NDR performance |
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Largest CEO Kaizen event in history with 1,000+ participants. Improvement on Net Dollar Retention performance (+100 bps). |
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Shareholders |
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40% |
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Deliver Financials*: Meet or beat guidance provided to shareholders |
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Adjusted operating profit margin of 27%, up 100 bps year-on-year. Adjusted EPS growth of 13%, exceeding high range of guidance. Free cash flow of $1.4B, 13% growth and above high range of guidance; 200 bps improvement in FCF margins. Core revenue growth of 1%. Returned ~$1B to shareholders with repurchases of ~12M shares. |
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4O% |
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Investor Relations: Enhance IR and communications to create better understanding of Fortive and our financial strategy to improve shareholder value |
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The pending Ralliant separation will provide investors more clarity on each companies' investment thesis and enhances IR messaging. Increase in stock price since separation announcement. |
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TOTAL STRATEGIC PERFORMANCE FACTOR |
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100% |
* Core Revenue Growth, Adjusted Gross Margin, Adjusted Operating Profit Margin, and Adjusted EPS are non-GAAP financial measures. For the definition of these non-GAAP financial measures, please refer to “Non-GAAP Financial Measures” in Appendix A.
58 FORTIVE CORPORATION 2025 PROXY STATEMENT
Charles E. McLaughlin
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Fortive Value |
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wgt. |
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goal |
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2024 performance |
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Wgtd. |
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Extraordinary Teams |
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20% |
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Succession Planning: Develop and grow Finance leadership funnels |
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Year-over-year progress in the development and growth of the Finance leadership funnel: Increased quality and quantity within leadership funnels. |
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20% |
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Shareholders |
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40% |
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Deliver Financials*: Meet or beat guidance provided to shareholders |
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Adjusted operating profit margin of 27%, up 100 bps year-on-year. Adjusted EPS growth of 13%, exceeding high range of guidance. Free cash flow of $1.4B, 13% growth and above high range of guidance; 200 bps improvement in FCF margins. Core revenue growth of 1%. Returned ~$1B to shareholders with repurchases of ~12M shares. |
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40% |
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Shareholders |
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40% |
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Investor Relations: Enhance IR and communications to create better understanding of Fortive and our financial strategy to improve shareholder value |
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The pending Ralliant separation will provide investors more clarity on each companies' investment thesis and enhances IR messaging. Increase in stock price since separation announcement. |
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40% |
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Total Strategic Performance Factor |
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100% |
Tamara Newcombe
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Fortive Values |
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wgt. |
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Goal |
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2024 performance |
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wgtd. |
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Extraordinary Teams |
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20% |
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People Strategy: Yield year-on-year improvements in employee experience, turnover, and improving succession with developing leaders |
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Increased leadership funnels, succession and hired key talent into critical roles across the Advance Healthcare Solutions (“AHS”) and Precision Technologies (“PT”) segments: Accelerated the ramp-up of new leaders, and Improved 3-month rolling turnover within PT and AHS. |
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30% |
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Customer Success |
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20% |
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Innovation: Evolve segment strategies to drive organic and inorganic portfolio evolution and innovation |
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Year-over-year progress against segment market strategies: >10 initiatives across PT Segment to drive automation and AI-powered capabilities to boost productivity in engineering, customer experience, and operational efficiency, and Investment in innovation of three AI-driven solutions to integrate AI and advanced analytics into hardware, firmware, and software systems. |
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25% |
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Kaizen |
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20% |
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FBS: Apply FBS know-how to reduce cyber and geopolitical risk |
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Significant geopolitical and cyber risk reduction among PT and AHS segments with year-over-year improvement on operating companies now measuring low risk. |
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20% |
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Shareholders |
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40% |
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Segment Financials*: Year-over-year improvement of core revenue growth, core operating profit margin and other financials metrics |
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Delivered strong financial results for the PT and AHS segments with improvements in core revenue growth rate, margin expansion, acquisition ROIC and other financial performance measures. |
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35% |
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Total Strategic Performance Factor |
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110% |
* Core Revenue Growth, Adjusted Gross Margin, Adjusted Operating Profit Margin, and Adjusted EPS are non-GAAP financial measures. For the definition of these non-GAAP financial measures, please refer to “Non-GAAP Financial Measures” in Appendix A.
FORTIVE CORPORATION 2025 PROXY STATEMENT 59
Olumide Soroye
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Fortive Value |
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Wgt. |
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Goal |
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2023 Performance |
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Wgtd. |
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Extraordinary Teams |
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20% |
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People Strategy: Yield year-on-year improvements in employee experience, turnover, and improving succession with developing leaders |
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Achieved year-on-year improvement in employee turnover, engagement, and leadership development: Accelerated the ramp-up of new leaders, and Increased leadership funnels, succession and hired key talent into critical roles across the IOS segment, and Improved employee engagement and turnover in IOS segment. |
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25% |
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Customer Success |
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20% |
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Innovation: Evolve segment strategies to drive organic and inorganic portfolio evolution and innovation |
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Year-over-year progress against segment market strategies: Product innovation engine progression with 50% expansion in innovation funnel in IOS segment, and Accelerated initiatives across IOS Segment to drive AI-driven products and solutions for customers and AI-enabled improvements in productivity. |
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25% |
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Kaizen |
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20% |
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FBS: Apply FBS know-how to reduce cyber and geopolitical risk |
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Reduction in global manufacturing footprint risk within IOS segment. |
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25% |
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Shareholders |
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40% |
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Segment Financials*: Year-over-year improvement of core revenue growth, core operating profit margin and other financials metrics |
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Delivered strong financial results for the IOS segment with improvements in core revenue growth rate, margin expansion, acquisition ROIC and other financial performance measures. 20+ Kaizen events leading to improvement of bookings momentum across IOS Operating Companies. |
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50% |
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Total Strategic Performance Factor |
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125% |
STACEY WALKER
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Fortive Value |
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Wgt. |
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Goal |
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2023 Performance |
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Wgtd. |
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Extraordinary Teams |
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40% |
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People: Attract, retain and develop top talent to improve succession and depth, diversity and caliber of strategic talent funnels |
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Year-over-year improvements in the health of our talent: Successful execution of two CEO-ready successors, and Executive officer succession funnel improved year-over-year by ~33%, and Mid-single-digit percentage improvement in OpCo President succession funnel, and Product function talent funnel mid-teens percentage improvement. |
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50% |
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Customer Success |
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40% |
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HR Transformation: Deploy the new HR Operating Model that improves efficiency and quality outcomes for our businesses |
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New HR Operating Model stood up effectively including a global shared services function, payroll, and talent acquisition functions: Delivered project on time and to budget, and Met or exceeded most SLAs and KPIs related to stand-up. |
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50% |
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Kaizen |
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20% |
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FBS: Deploy and scale the Fortive Corp brand to create deeper stakeholder connection |
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Increased alignment between FBSO and Leadership Development functions. Developed a "FBS for HR" strategy to infuse FBS rigor and tools in our new HR operating model. Delivered against commitments in leadership development and learning. Exceeded Employee Attraction Campaign goal of LinkedIn to Fortive Career site referral conversions. |
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30% |
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|||||||
Total Strategic Performance Factor |
|
130% |
* Core Revenue Growth, Adjusted Gross Margin, Adjusted Operating Profit Margin, and Adjusted EPS are non-GAAP financial measures. For the definition of these non-GAAP financial measures, please refer to “Non-GAAP Financial Measures” in Appendix A.
60 FORTIVE CORPORATION 2025 PROXY STATEMENT
2024 Annual Incentive Award Payouts
Based on the results described above, the Compensation Committee approved annual incentive awards to the NEOs for 2024 performance as follows:
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EXECUTIVE OFFICER |
|
2024 |
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TARGET |
|
TARGET |
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FINAL |
|
FINAL |
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James A. Lico |
|
$1,250,000 |
|
|
190% |
|
|
$2,375,000 |
|
|
100.2% |
|
|
$2,380,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
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|
|
|
|
|
|
|
|
Charles E. McLaughlin |
|
$760,000 |
|
|
130% |
|
|
$988,000 |
|
|
100.2% |
|
|
$990,371 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tamara Newcombe |
|
$725,000 |
|
|
150% |
|
|
$1,087,500 |
|
|
102.2% |
|
|
$1,111,860 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olumide Soroye |
|
$750,000 |
|
|
150% |
|
|
$1,125,000 |
|
|
105.2% |
|
|
$1,183,950 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stacey Walker |
|
$625,000 |
|
|
90% |
|
|
$562,500 |
|
|
106.2% |
|
|
$597,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long Term Incentive Compensation
2024 Annual Equity Award Mix
Our long-term incentive program is designed to align the interests of our NEOs with those of our shareholders while promoting a balance between driving sustainable business performance and providing meaningful retention.
For 2024, the Compensation Committee granted long-term incentive awards using the following mix of equity vehicles: |
|
|
|
|
Form of Award |
|
Key Terms |
|
|
|
PSUs |
|
•
60% contingent on relative TSR versus the S&P 500 over a three-year performance period and 40% contingent on three-year average Core Revenue Growth.
•
Earned shares are subject to a one-year holding requirement after performance vesting.
•
No prorated vesting prior to completion of the full three-year performance period.
|
|
|
|
RSUs |
|
•
Ratable vesting on third and fourth anniversaries of grant.
•
NEOs may earn “incremental” RSUs above the “base” number of RSUs depending on outperformance of the Adjusted EBITDA Margin goals as described below.
|
|
|
|
Stock Options |
|
•
Ratable vesting on the third and fourth anniversaries of grant.
•
Exercise price based on the closing price on grant date.
|
FORTIVE CORPORATION 2025 PROXY STATEMENT 61
2024 Target Award Values
The Compensation Committee considers market data in setting target award amounts. The Compensation Committee increased target award values from 2023 to 2024 for Messrs. Lico, McLaughlin, Soroye, and Mmes. Newcombe and Walker between 4% to 13% to better align with the market and/or recognize individual contributions. Target award values for 2024 were as follows:
|
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|
|
|
|
|
|
|
EXECUTIVE OFFICER |
2024 |
|
2024 |
|
2024 |
|
2024 |
|
2023 |
|
YEAR |
||||||
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James A. Lico |
$6,500,000 |
|
|
$3,250,000 |
|
|
$3,250,000 |
|
|
$13,000,000 |
|
|
$12,500,000 |
|
|
4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. McLaughlin |
$2,375,000 |
|
|
$1,187,500 |
|
|
$1,187,500 |
|
|
$4,750,000 |
|
|
$4,400,000 |
|
|
8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tamara Newcombe |
$2,250,000 |
|
|
$1,125,000 |
|
|
$1,125,000 |
|
|
$4,500,000 |
|
|
$4,000,000 |
|
|
13% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olumide Soroye |
$2,750,000 |
|
|
$1,375,000 |
|
|
$1,375,000 |
|
|
$5,500,000 |
|
|
$5,000,000 |
|
|
10% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stacey Walker |
$1,250,000 |
|
|
$625,000 |
|
|
$625,000 |
|
|
$2,500,000 |
|
|
$2,250,000 |
|
|
11% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 PSU Performance Measures
The actual payout for the PSU awards granted in 2024 will be based on the following performance measures over a three-year period:
|
|
Wgt |
FY 2024 |
FY 2025 |
FY 2026 |
FY 2027 |
|
|
|
|
|
|
|
|
rTSR Percentile PSUs |
60% |
3-Year Relative TSR |
Year 4 |
||
PSUs |
Core Revenue Growth PSUs |
40% |
Year 1 |
Year 2 |
Year 3 |
(1-Year Hold) |
rTSR Percentile PSUs (60%)
In an effort to strengthen the pay for performance alignment and in response to shareholder feedback, we eliminated the ability to earn 25% of target PSUs for positive absolute TSR performance in the event our relative TSR performance fell below "Threshold" performance.
The 2024 rTSR Percentile PSU Performance Goals:
|
|
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|
|
|
|
PAYOUT |
|
% OF |
|
|
rTSR RANKING |
|
|
|
|
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|
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|
|
Maximum |
|
200% |
|
|
≥75th percentile |
|
|
|
|
|
|
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|
|
|
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|
|
|
|
Target |
|
100% |
|
|
55th percentile |
|
|
|
|
|
|
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|
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|
|
|
|
|
|
Threshold |
|
25% |
|
|
25th percentile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below Threshold |
|
0% |
|
|
<25th percentile |
|
|
|
|
|
|
|
|
62 FORTIVE CORPORATION 2025 PROXY STATEMENT
Core Revenue Growth PSUs (40%)
During the first quarter of each year of the three-year performance period, the Committee will establish an annual Core Revenue Growth target based at or above the midpoint of the initial Core Revenue Growth guidance provided to the investment community for such year. For each year during the three-year performance period, an annual performance result from 0% to 200%, based on a linear interpolation, will be assigned, with the final performance result for the Core Revenue Growth PSUs based on the average of the three consecutive annual performance results over the corresponding three consecutive performance years.
The 2024 PSU Core Revenue Growth Performance Goal was used to establish performance goals for year 1 of the 2024 PSUs, year 2 of the 2023 PSUs, and year 3 of the 2022 PSUs as shown below.
|
FY 2022 |
FY 2023 |
FY 2024 |
FY 2025 |
FY 2026 |
FY 2027 |
|
|
|
|
|
|
|
|
3-Year Relative TSR |
Year 4 |
|
|
||
PSUs |
Year 1 |
Year 2 |
Year 3 |
(1-Year Hold) |
|
|
|
|
|
|
|
|
|
|
|
3-Year Relative TSR |
Year 4 |
|
||
|
PSUs |
Year 1 |
Year 2 |
Year 3 |
(1-Year Hold) |
|
|
|
|
|
|
|
|
|
|
|
3-Year Relative TSR |
Year 4 |
||
|
|
PSUs |
Year 1 |
Year 2 |
Year 3 |
(1-Year Hold) |
The 2024 Core Revenue Growth PSU Performance Goals:
|
|
|
|
|
|
|
PAYOUT |
|
% OF |
|
2024 CORE REVENUE GROWTH |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum |
|
200% |
|
|
5.6% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target (1) |
|
100% |
|
|
4.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold |
|
0% |
|
|
2.8% |
|
|
|
|
|
|
|
|
Based on the actual performance of 1.3% in 2024, Core Revenue Growth performance was 0% of target payout. The final performance results for the 2024 Core Revenue Growth PSUs will be based on the average of the Core Revenue Growth performance results for 2024, 2025 and 2026. For more information about why Core Revenue Growth is an important performance measure in both our annual and long-term incentive plans, please refer to our discussion under the “Setting our Core Revenue Growth Goals” section above.
FORTIVE CORPORATION 2025 PROXY STATEMENT 63
2022 PSUs Earned for 2022-2024 Performance
The 2022 PSU payout was based 60% on relative Total Shareholder Return (“rTSR”) performance over the corresponding three-year performance period and 40% on Core Revenue Growth based on the average of the three annual performance results over the corresponding three consecutive performance years.
2022 rTSR Percentile PSUs:
|
|
|
|
|
|
|
PAYOUT |
|
% OF |
|
|
rTSR RANKING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum |
|
200% |
|
|
>=75th percentile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Target |
|
100% |
|
|
55th percentile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold |
|
50% |
|
|
35th percentile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below Threshold |
|
0% |
|
|
<35th percentile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual |
|
88.8% |
|
|
50th percentile |
|
|
|
|
|
|
|
|
2022 Core Revenue Growth PSUs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
PAYOUT LEVEL |
% OF TARGET(1) |
ACTUAL |
|
2022 Core Revenue Growth |
|
2023 Core Revenue Growth |
|
2024 Core Revenue Growth |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Maximum |
|
200 |
% |
|
|
|
|
10.0 |
% |
|
|
|
7.0 |
% |
|
|
|
5.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Target |
|
100 |
% |
|
|
|
|
7.0 |
% |
|
|
|
5.0 |
% |
|
|
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Threshold |
|
0 |
% |
|
|
|
|
5.0 |
% |
|
|
|
3.5 |
% |
|
|
|
2.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
Actual Results |
|
|
10.1 |
% |
|
|
|
4.8 |
% |
|
|
|
1.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
Payout % |
|
|
200.0 |
% |
|
|
|
86.7 |
% |
|
|
|
0.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
Final Payout - Average Payout % |
|
|
|
|
|
|
95.6 |
% |
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our rTSR ranking for the 2022-2024 performance period was at the 50th percentile resulting in 88.8% of target payout on rTSR Percentile PSUs. Based on the average of the three annual performance results over the corresponding three consecutive performance years, we achieved 95.6% of target payout on Core Revenue Growth PSUs. The NEOs earned a combined 91.5% of their target PSUs as follows:
|
|
|
|
|
|
|
EXECUTIVE OFFICER |
|
TARGET |
|
SHARES |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James A. Lico |
|
91,315 |
|
|
83,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. McLaughlin |
|
28,535 |
|
|
26,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tamara Newcombe |
|
12,175 |
|
|
11,143 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olumide Soroye |
|
34,245 |
|
|
31,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stacey Walker |
|
14,460 |
|
|
13,235 |
|
|
|
|
|
|
|
|
The above shares earned by the NEOs under the 2022 PSUs are subject to an additional one-year holding period following the end of the performance period.
64 FORTIVE CORPORATION 2025 PROXY STATEMENT
2024 RSU Performance Measure and Results
Our executive officers received Restricted Stock Units ("RSUs") in 2024. These RSUs consist of a base amount and a performance-based portion called “incremental” RSUs. NEOs can earn these incremental RSUs by exceeding specific financial goals. In 2024, the incremental RSUs could range from 10% to 50% of the base amount, depending on the company’s Adjusted EBITDA Margin performance. The initial target was set at the beginning of 2024 based on our high-end guidance, 28.4%. Actual Adjusted EBITDA Margin performance of 28.4% resulted in 10% incremental RSUs being earned in 2024. |
|
Adj. EBITDA Margin performance goals were set at the high-end of 2024 investor guidance |
|
|
|
|
|
|
|
PAYOUT LEVEL |
|
INCREMENTAL RSUs |
|
ADJUSTED EBITDA |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maximum |
|
50% |
|
|
≥29.2% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold |
|
10% |
|
|
≥28.4% |
|
|
|
|
|
|
|
|
Our Adjusted EBITDA Margin for 2024 was 28.4%. As a result, the NEOs earned an additional 10% of their base RSUs as follows:
|
|
|
|
|
|
|
EXECUTIVE OFFICER |
|
BASE RSUs |
|
INCREMENTAL |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James A. Lico |
|
38,620 |
|
|
3,862 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. McLaughlin |
|
14,110 |
|
|
1,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tamara Newcombe |
|
13,370 |
|
|
1,337 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olumide Soroye |
|
16,340 |
|
|
1,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stacey Walker |
|
7,430 |
|
|
743 |
|
|
|
|
|
|
|
|
Looking Ahead to 2025
A holistic review of long-term incentives and equity strategy is planned for 2025 to ensure not only our executive compensation program, but also our broader equity program appropriately reflects our go-forward portfolio talent market and business strategy of our new company and continues to align with our pay for performance philosophy.
FORTIVE CORPORATION 2025 PROXY STATEMENT 65
Other Practices, Policies & Guidelines
Timing of Option Awards in Relation to the Disclosure of Material Nonpublic Information
The following discussion contains information required by Item 402(x) of Regulation S-K about the timing of option awards in relation to the disclosure of material nonpublic information. The Compensation Committee has adopted the Fortive Corporation Policy on Granting Equity Awards (the “Grant Policy”) relating to the timing of all equity-based compensation, including stock options, awarded by the Compensation Committee.
Furthermore, pursuant to the Grant Policy, as a general principle, the Compensation Committee does not take any material nonpublic information into account when determining the timing and terms of any equity-based compensation awards.
During the fiscal year 2024, the Company did not award stock options to any named executive officer during the relevant period described in Item 402(x)(2) of Regulation S-K.
Stock Ownership Requirements
To further align management and shareholder interests and discourage inappropriate or excessive risk-taking, our stock ownership policy requires each executive officer to obtain a substantial equity stake in our common stock within five years of their appointment to an executive position. The multiples of base salary that the guidelines require are as follows:
Executive Level |
|
Stock Ownership Level |
Chief Executive Officer |
|
5.0x base salary |
All Other Executive Officers |
|
3.0x base salary |
|
|
|
Once an executive has acquired a number of shares that satisfies the ownership multiple then applicable to him or her, such number of shares then becomes his or her minimum ownership requirement (even if the executive’s salary increases or the fair market value of such shares subsequently changes) until he or she is promoted to a higher level.
Under the policy, beneficial ownership includes shares in which the executive or his or her spouse or child has a direct or indirect interest, notional shares of our common stock in the Executive Deferred Incentive Plan (“EDIP”) plan, shares held in a 401(k) plan, and unvested RSUs that are subject only to time-based vesting requirements but does not include shares subject to unexercised stock options or any unvested RSUs or PSUs that are subject to outstanding performance-based vesting requirements.
66 FORTIVE CORPORATION 2025 PROXY STATEMENT
Clawback Policy and Plan Terms
The Compensation Committee has adopted a clawback policy that applies to our Section 16 officers (“executive officers”). Under this policy, in the event of a material restatement of our consolidated financial statements (other than any restatement required according to a change in applicable accounting rules), the Company will seek reimbursement of the portion of any incentive-based compensation granted, earned or vested based on the attainment of a financial reporting measure that would not have been paid had the consolidated financial statements been correctly stated.
In addition to recoupment of incentive-based compensation mandated by the SEC and the NYSE, our clawback policy includes an enhancement that provides the Board with the discretion to also recoup additional compensation, including any time-based equity awards, from any executive officer if the Board determines that the triggering material restatement was at least in part the result of gross misconduct by such executive officer.
Furthermore, under the terms of our 2016 Stock Incentive Plan, all outstanding unvested equity awards will be terminated immediately upon, and no grantee may exercise any outstanding equity award after, such time as he or she is terminated for gross misconduct. In addition, under the terms of the Fortive Executive Deferred Incentive Plan, or EDIP, if the plan administrator determines that termination of an employee’s participation in the EDIP resulted from the employee’s gross misconduct, the plan administrator may determine that the employee’s vesting percentage is zero with respect to all account balances that were contributed by us.
Insider Trading Policy
Our Board has
Pledging Policy
Our Board has adopted a policy prohibiting any of our executive officers, including our NEOs, or directors from pledging as a security for any obligation any shares of our common stock that he or she directly or indirectly owns and controls.
Hedging Policy
We include within our Insider Trading Policy a prohibition applicable to all our employees, including our NEOs, and our directors against engaging at any time in:
General Benefits
Our NEOs are eligible to participate in broad-based employee benefit plans, which are generally available to all U.S. salaried employees and do not discriminate in favor of our NEOs. In addition, each of our NEOs participates in the EDIP. The EDIP is a shareholder-approved, non-qualified, unfunded deferred compensation program available to selected members of our management.
FORTIVE CORPORATION 2025 PROXY STATEMENT 67
We use the EDIP to tax-effectively contribute amounts to executives’ retirement accounts and give our executives an opportunity to defer taxes on cash compensation and realize tax-deferred, market-based notional investment growth on their deferrals. We set the amount we contribute annually to the executives’ accounts in the EDIP at a level that we believe is competitive with comparable plans offered by the companies in our peer group. Participants in the EDIP do not fully vest in such amounts until they have participated in the program for 15 years or have reached age 55 with at least five years of service (including for executives who were employed by Danaher prior to our separation from Danaher, years of service with Danaher prior to that separation). We show the amounts we contributed to the EDIP for 2024 with respect to our NEOs in the “Summary Compensation Table.”
Perquisites
We offer limited perquisites to our NEOs which are not a major component of our compensation package or philosophy. We believe these limited perquisites help make our executive compensation plans competitive, are generally aligned with market practices and are cost-effective in that the perceived value of these items is higher than our actual cost. The perquisites we made available to our NEOs during 2024 were as follows:
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Type |
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PARTICIPATING NEOs |
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Personal aircraft use |
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Messrs. Lico and McLaughlin |
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Tickets to sporting events |
|
Messrs. Lico, McLaughlin, |
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Stipend ($10,000) for financial services |
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All NEOs |
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Executive physical |
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Messrs. McLaughlin and Soroye and Ms. Walker |
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Executive data privacy protection services |
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All NEOs |
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|
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|
|
We made the personal aircraft use available under an aircraft use policy adopted by the Compensation Committee. The policy permits the use of our aircraft for business purposes only, other than with respect to a $150,000 and $50,000 personal use allowance to Messrs. Lico and McLaughlin, respectively. Messrs. Lico and McLaughlin must reimburse us for any personal use of the aircraft in a particular year in excess of their respective personal use allowances. Additional details on the other perquisites we made available to our NEOs in 2024 are described in the footnotes to the “Summary Compensation Table.”
Severance Benefits
To be consistent with market practices and ensure that our executive officers remain focused on our businesses during periods of uncertainty and are motivated to pursue transactions in the best interest of the shareholders and other stakeholders, we maintain a Severance and Change-in-Control Plan for Officers, which we refer to as the Severance Plan. It provides for severance benefits upon (i) a termination without cause not preceded by a change-in-control and (ii) a termination without cause, or good reason resignation, within 24 months following a qualified change-in-control.
“Double Trigger” Change-in-Control Severance. Because we intend the change-in-control severance benefit under the Severance Plan to ensure that the executive officers pursue transactions in the best interest of the shareholders and other stakeholders, the Committee limited the definition of “change-in-control” to include only:
68 FORTIVE CORPORATION 2025 PROXY STATEMENT
If, within 24 months following a qualified change-in-control, a NEO is terminated without cause, or resigns for good reason, then the following severance payment would be due:
Compensation |
|
CEO |
|
OTHER NEOs |
Cash Severance Payment |
|
2x base salary and target annual incentive award |
|
1x base salary and target annual incentive award |
Cash Annual Incentive Award |
|
Target annual incentive award prorated from the beginning of the year to the date of termination |
|
Same |
Equity Awards |
|
Immediate acceleration of all unvested outstanding equity awards, with any performance conditions measured based on target performance |
|
Same |
Health Benefits |
|
24 months |
|
12 months |
280G Excise Tax |
|
No tax gross up |
|
Same |
|
|
|
|
|
Termination without Cause Severance. Recognizing the increased risk of forfeiture for equity awards by the NEOs as a result of our four-year vesting schedule with a three-year cliff before the initial vesting and to ensure that our executive officers remain focused on our businesses during periods of uncertainty, the Committee provided the following severance benefits under the Severance Plan upon a termination without cause other than within 24 months following a qualified change-in-control:
Compensation |
|
CEO |
|
OTHER NEOs |
Cash Severance Payment |
|
2x base salary |
|
1x base salary |
Cash Annual Incentive Award |
|
•
Payments based on actual performance; and
•
Prorated from the beginning of the year to the date of termination
|
|
Same |
Equity Awards |
|
•
Based on actual performance against performance targets;
•
Subject to original time-vesting; and
•
Prorated for the period from the date of the grant to the date of termination
|
|
Same |
Health Benefits |
|
24 months |
|
12 months |
280G Excise Tax |
|
No tax gross up |
|
Same |
|
|
|
|
|
Shareholder Ratification Policy. We adopted a policy that, without prior shareholder approval, we will not pay or enter into any new agreement with an executive officer, including an NEO, that provides for cash severance benefits in connection with the executive officer’s voluntary or involuntary termination in an amount that exceeds 2.99 times the sum of the executive officer’s target cash compensation (base salary plus target bonus) in the year of termination.
CEO Early Retirement Policy for Equity Awards Granted During or After 2022
In connection with the long-term CEO succession planning by the Board and to grant the Board additional flexibility in determining the timing and collaborative nature of any future CEO transition, the Compensation Committee adopted an early retirement policy with respect to equity awards granted to Mr. Lico during or after 2022.
If Mr. Lico provides notice of early retirement on or after (i) January 1, 2026 or (ii) an earlier date on which the Board, at its sole discretion in the future, formally approves a specific successor to the CEO position (the “qualified date”), the Board may designate a CEO transition period of up to twelve additional months following such notice during which Mr. Lico will be required to provide transition services, as requested by the Company (the “CEO transition period”). Upon such notice of early retirement on or after the qualified date and upon completion of the requested transition services during the CEO transition period, all equity awards granted to Mr. Lico on or after 2022 will continue to vest under their original time-based vesting terms and will be subject to the satisfaction of all original performance-based vesting requirements.
FORTIVE CORPORATION 2025 PROXY STATEMENT 69
The Compensation Committee considered and implemented the following governance features to align this policy:
Subject to Mr. Lico's continued service through the completion of the Ralliant separation and the formal appointment of Mr. Soroye as the President and CEO of Fortive, Mr. Lico would be deemed to have met the requirements under the policy.
Regulatory Considerations
Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to public corporations for compensation in excess of $1 million paid for any fiscal year to certain covered employees, generally including our NEOs. At the time of determining our executive compensation for 2024, we reviewed the tax impact of such compensation on the Company as well as on our executive officers. In addition, we reviewed the impact of our compensation programs against other considerations, such as accounting impact, alignment of interest with shareholders and other stakeholders, market competitiveness, effectiveness and perceived value to employees. Because we believe these considerations, other than tax deductibility, should play an important role in shaping our compensation programs, we have awarded, and may award in the future, compensation to our NEOs in excess of $1 million to the extent the Compensation Committee believes such compensation is necessary to continue to provide competitive arrangements intended to attract, retain, and provide appropriate incentives to, our NEOs.
Risk Considerations
Risk-taking is essential to growing a business, and prudent risk management is necessary to deliver long-term, sustainable shareholder value. The Compensation Committee engaged Pearl Meyer, its independent compensation consultant, to review our executive and non-executive compensation programs for risk considerations. The Compensation Committee determined, based on the recommendations received from Pearl Meyer and its own analysis and conclusions, that none of the elements of our compensation program encourage or create excessive risk-taking, and none is reasonably likely to have a material adverse effect on the Company. The Compensation Committee believes that our executive compensation program supports the objectives described above without encouraging inappropriate or excessive risk-taking.
70 FORTIVE CORPORATION 2025 PROXY STATEMENT
Compensation Committee Report
This report is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the SEC’s proxy rules or to the liabilities of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed to be incorporated by reference into any prior or subsequent filing by Fortive Corporation under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Fortive Corporation specifically incorporates this report by reference therein.
The Compensation Committee of the Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis set forth above, and based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement for incorporation by reference into Fortive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2024.
Compensation Committee of the Board of Directors
Kate D. Mitchell (Chair)
Daniel L. Comas
Sharmistha Dubey
Wright L. Lassiter III
Dated February 24, 2025
FORTIVE CORPORATION 2025 PROXY STATEMENT 71
Executive Compensation Tables
2024 Summary Compensation Table
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NAME AND |
YEAR |
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SALARY ($)(1) |
|
BONUS ($) |
|
STOCK |
|
OPTION |
|
NON-EQUITY |
|
CHANGE IN |
|
ALL OTHER |
|
TOTAL ($) |
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James A. Lico |
2024 |
|
$1,274,038 |
|
|
— |
|
|
$10,156,071 |
|
|
$3,921,979 |
|
|
$2,380,700 |
|
|
— |
|
|
$580,376 |
|
|
$18,313,164 |
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President and Chief |
2023 |
|
$1,250,000 |
|
|
— |
|
|
$9,617,124 |
|
|
$3,608,064 |
|
|
$2,757,375 |
|
|
— |
|
|
$576,601 |
|
|
$17,809,164 |
|
Executive Officer |
2022 |
|
$1,250,000 |
|
|
— |
|
|
$8,535,920 |
|
|
$2,837,891 |
|
|
$3,460,145 |
|
|
— |
|
|
$527,234 |
|
|
$16,611,190 |
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Charles E. |
2024 |
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$774,615 |
|
|
— |
|
|
$3,710,732 |
|
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$1,432,999 |
|
|
$990,371 |
|
|
— |
|
|
$260,150 |
|
|
$7,168,867 |
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McLaughlin |
2023 |
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$749,904 |
|
|
— |
|
|
$3,385,489 |
|
|
$1,270,080 |
|
|
$1,147,068 |
|
|
— |
|
|
$254,232 |
|
|
$6,806,773 |
|
Senior Vice President |
2022 |
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$725,000 |
|
|
— |
|
|
$2,667,497 |
|
|
$886,943 |
|
|
$1,320,319 |
|
|
— |
|
|
$185,491 |
|
|
$5,785,250 |
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Tamara Newcombe |
2024 |
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$738,942 |
|
|
— |
|
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$3,515,675 |
|
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$1,357,595 |
|
|
$1,111,860 |
|
|
— |
|
|
$148,346 |
|
|
$6,872,418 |
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President and CEO of |
2023 |
|
$681,731 |
|
|
— |
|
|
$3,077,780 |
|
|
$1,154,736 |
|
|
$1,262,588 |
|
|
— |
|
|
$98,746 |
|
|
$6,275,581 |
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Olumide Soroye |
2024 |
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$764,430 |
|
|
— |
|
|
$4,297,191 |
|
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$1,659,209 |
|
|
$1,183,950 |
|
|
— |
|
|
$157,297 |
|
|
$8,062,077 |
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President and CEO of |
2023 |
|
$750,006 |
|
|
— |
|
|
$3,847,053 |
|
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$1,443,226 |
|
|
$1,351,125 |
|
|
— |
|
|
$152,766 |
|
|
$7,544,176 |
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Intelligent Operating |
2022 |
|
$750,006 |
|
|
— |
|
|
$3,201,245 |
|
|
$1,064,209 |
|
|
$1,594,016 |
|
|
— |
|
|
$197,614 |
|
|
$6,807,090 |
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Stacey Walker |
2024 |
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$637,019 |
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|
— |
|
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$1,953,538 |
|
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$754,369 |
|
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$597,600 |
|
|
— |
|
|
$183,490 |
|
|
$4,126,016 |
|
Senior Vice President |
2023 |
|
$617,788 |
|
|
— |
|
|
$1,731,126 |
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$649,555 |
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$627,406 |
|
|
— |
|
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$171,384 |
|
|
$3,797,259 |
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and Chief Human |
2022 |
|
$600,000 |
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|
— |
|
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$1,351,663 |
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$449,319 |
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$753,221 |
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— |
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$129,648 |
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$3,283,851 |
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NAME |
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2024 COMPANY 401(K) |
|
2024 COMPANY EDIP |
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PERSONAL USE OF |
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EXECUTIVE |
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TAX/FINANCIAL |
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TICKETS TO |
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James A. Lico |
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$24,096 |
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$362,500 |
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$150,000 |
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— |
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$10,000 |
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$28,280 |
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Charles E. McLaughlin |
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$24,096 |
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$174,800 |
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$16,620 |
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$2,000 |
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$10,000 |
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$27,134 |
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Tamara Newcombe |
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$24,096 |
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$108,750 |
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— |
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— |
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$10,000 |
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— |
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Olumide Soroye |
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$24,096 |
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$112,501 |
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— |
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$3,000 |
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$10,000 |
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$2,200 |
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Stacey Walker |
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$24,096 |
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$69,375 |
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— |
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$3,000 |
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$10,000 |
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$71,519 |
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The amounts under “Personal Use of Company Airplane” reflect the incremental cost to us of personal use of our airplane by Mr. Lico and Mr. McLaughlin. We calculate that incremental cost by multiplying the total number of personal flight hours by the average direct variable Executive Compensation Tables operating costs (including costs related to fuel, on-board catering, maintenance expenses related to operation of the plane during the year, landing and parking fees, navigation fees, related ground transportation, crew accommodations and meals and supplies) per flight hour for the particular airplane for the year, net of any applicable employee reimbursement. Since the airplane is used primarily for business travel, we do not include in the calculation the fixed costs that do not change based on usage, such as crew salaries, the lease or acquisition cost of the airplane, exterior paint and other maintenance, inspection and capital improvement costs intended to cover a multiple-year period. Mr. Lico’s and Mr. McLaughlin’s annual perquisite allowance for personal use of our corporate airplane is limited to $150,000 and $50,000, respectively, and Mr. Lico and Mr. McLaughlin are required to reimburse us for any personal use of the airplane in a particular year in excess of such limit directs.
In addition, our NEOs received a one-time one-year subscription for enhanced executive data privacy protection services, valued at less than 10% of the total benefits and perquisites provided to each individual, respectively.
72 FORTIVE CORPORATION 2025 PROXY STATEMENT
Grants of Plan-Based Awards for Fiscal 2024
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ESTIMATED POSSIBLE PAYOUTS UNDER |
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ESTIMATED FUTURE PAYOUTS UNDER |
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ALL OTHER |
ALL OTHER |
EXERCISE |
GRANT DATE |
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NAME |
GRANT |
AWARD |
THRESHOLD ($) |
TARGET ($) |
MAXIMUM ($) |
|
THRESHOLD (#) |
TARGET (#) |
MAXIMUM (#) |
|
STOCK |
UNDERLYING |
AWARDS |
AND OPTION |
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James A. Lico |
— |
Annual |
$760,000 |
$2,375,000 |
$4,750,000 |
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— |
— |
— |
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— |
— |
— |
— |
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3/4/2024 |
Stock |
— |
— |
— |
|
— |
— |
— |
|
— |
117,030 |
$84.79 |
$3,921,979 |
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3/4/2024 |
RSU |
— |
— |
— |
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38,620 |
38,620 |
57,930 |
|
— |
— |
— |
$3,235,197 |
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3/4/2024 |
PSU |
— |
— |
— |
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11,585 |
77,235 |
154,470 |
|
— |
— |
— |
$6,920,874 |
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Charles E. McLaughlin |
— |
Annual |
$316,160 |
$988,000 |
$1,976,000 |
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— |
— |
— |
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— |
— |
— |
— |
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3/4/2024 |
Stock |
— |
— |
— |
|
— |
— |
— |
|
— |
42,760 |
$84.79 |
$1,432,999 |
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3/4/2024 |
RSU |
— |
— |
— |
|
14,110 |
14,110 |
21,165 |
|
— |
— |
— |
$1,181,995 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
PSU |
— |
— |
— |
|
4,233 |
28,220 |
56,440 |
|
— |
— |
— |
$2,528,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tamara Newcombe |
— |
Annual |
$348,000 |
$1,087,500 |
$2,175,000 |
|
— |
— |
— |
|
— |
— |
— |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
Stock |
— |
— |
— |
|
— |
— |
— |
|
— |
40,510 |
$84.79 |
$1,357,595 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
RSU |
— |
— |
— |
|
13,370 |
13,370 |
20,055 |
|
— |
— |
— |
$1,120,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
PSU |
— |
— |
— |
|
4,010 |
26,735 |
53,470 |
|
— |
— |
— |
$2,395,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Olumide Soroye |
— |
Annual |
$360,000 |
$1,125,000 |
$2,250,000 |
|
— |
— |
— |
|
— |
— |
— |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
Stock |
— |
— |
— |
|
— |
— |
— |
|
— |
49,510 |
$84.79 |
$1,659,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
RSU |
— |
— |
— |
|
16,340 |
16,340 |
24,510 |
|
— |
— |
— |
$1,368,802 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
PSU |
— |
— |
— |
|
4,902 |
32,680 |
65,360 |
|
— |
— |
— |
$2,928,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stacey Walker |
— |
Annual |
$180,000 |
$562,500 |
$1,125,000 |
|
— |
— |
— |
|
— |
— |
— |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
Stock |
— |
— |
— |
|
— |
— |
— |
|
— |
22,510 |
$84.79 |
$754,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
RSU |
— |
— |
— |
|
7,430 |
7,430 |
11,145 |
|
— |
— |
— |
$622,411 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/4/2024 |
PSU |
— |
— |
— |
|
2,228 |
14,855 |
29,710 |
|
— |
— |
— |
$1,331,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FORTIVE CORPORATION 2025 PROXY STATEMENT 73
Outstanding Equity Awards at 2024 Fiscal Year-End
The following table summarizes the number of securities underlying outstanding equity awards for each of our NEOs as of December 31, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTION AWARDS |
|
|
STOCK AWARDS |
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NAME |
|
|
OPTION |
|
NUMBER OF |
|
NUMBER OF |
|
OPTION |
|
OPTION |
|
NUMBER OF |
|
|
MARKET VALUE |
|
EQUITY |
|
|
EQUITY INCENTIVE |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James A. Lico |
|
|
3/4/2024 |
|
|
— |
|
|
117,030 |
(2) |
|
|
$84.79 |
|
|
3/4/2034 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/27/2023 |
|
|
— |
|
|
139,200 |
(2) |
|
|
$66.62 |
|
|
2/27/2033 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/28/2022 |
|
|
— |
|
|
138,320 |
(2) |
|
|
$64.75 |
|
|
2/28/2032 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/24/2021 |
|
|
93,920 |
|
|
93,920 |
(2) |
|
|
$67.64 |
|
|
2/24/2031 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/20/2020 |
|
|
130,124 |
|
|
130,124 |
(2) |
|
|
$63.85 |
|
|
2/20/2030 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/25/2019 |
|
|
235,398 |
|
|
— |
|
|
|
$67.85 |
|
|
2/25/2029 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/22/2018 |
|
|
220,219 |
|
|
— |
|
|
|
$63.76 |
|
|
2/22/2028 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/23/2017 |
|
|
241,701 |
|
|
— |
|
|
|
$47.61 |
|
|
2/23/2027 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7/5/2016 |
|
|
139,740 |
|
|
— |
|
|
|
$40.41 |
|
|
7/5/2026 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/24/2016 |
|
|
196,117 |
|
|
— |
|
|
|
$35.38 |
|
|
2/24/2026 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/24/2015 |
|
|
139,882 |
|
|
— |
|
|
|
$35.31 |
|
|
2/24/2025 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
208,573 |
(3) |
|
|
$15,642,975 |
|
|
169,120 |
(4) |
|
|
$12,684,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles E. McLaughlin |
|
|
3/4/2024 |
|
|
— |
|
|
42,760 |
(5) |
|
|
$84.79 |
|
|
3/4/2034 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/27/2023 |
|
|
— |
|
|
49,000 |
(5) |
|
|
$66.62 |
|
|
2/27/2033 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/28/2022 |
|
|
— |
|
|
43,230 |
(5) |
|
|
$64.75 |
|
|
2/28/2032 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/24/2021 |
|
|
29,350 |
|
|
29,350 |
(5) |
|
|
$67.64 |
|
|
2/24/2031 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
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|
|
|
|
|
|
|
2/20/2020 |
|
|
49,682 |
|
|
24,843 |
(5) |
|
|
$63.85 |
|
|
2/20/2030 |
|
|
— |
|
|
|
— |
|
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— |
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— |
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|
2/25/2019 |
|
|
62,388 |
|
|
— |
|
|
|
$67.85 |
|
|
2/25/2029 |
|
|
— |
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— |
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— |
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— |
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|
2/22/2018 |
|
|
56,278 |
|
|
— |
|
|
|
$63.76 |
|
|
2/22/2028 |
|
|
— |
|
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|
— |
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— |
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— |
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|
2/23/2017 |
|
|
64,457 |
|
|
— |
|
|
|
$47.61 |
|
|
2/23/2027 |
|
|
— |
|
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|
— |
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— |
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— |
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|
2/24/2016 |
|
|
87,173 |
|
|
— |
|
|
|
$35.38 |
|
|
2/24/2026 |
|
|
— |
|
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|
— |
|
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— |
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— |
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|
7/15/2015 |
|
|
16,467 |
|
|
— |
|
|
|
$35.84 |
|
|
7/15/2025 |
|
|
— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
|
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— |
|
|
66,884 |
(6) |
|
|
$5,016,300 |
|
|
60,565 |
(4) |
|
|
$4,542,375 |
|
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|
|
Tamara Newcombe |
|
|
3/4/2024 |
|
|
— |
|
|
40,510 |
(5) |
|
|
$84.79 |
|
|
3/4/2034 |
|
|
— |
|
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|
— |
|
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— |
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— |
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|
|
2/27/2023 |
|
|
— |
|
|
44,550 |
(5) |
|
|
$66.62 |
|
|
2/27/2033 |
|
|
— |
|
|
|
— |
|
|
— |
|
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— |
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|
|
2/28/2022 |
|
|
— |
|
|
18,450 |
(5) |
|
|
$64.75 |
|
|
2/28/2032 |
|
|
— |
|
|
|
— |
|
|
— |
|
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|
— |
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|
|
11/15/2021 |
|
|
9,920 |
|
|
9,920 |
(5) |
|
|
$78.03 |
|
|
11/15/2031 |
|
|
— |
|
|
|
— |
|
|
— |
|
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— |
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