LINDE PLC LIN

Removed from 2025

• form of dividends and stock repurchases, while growing adjusted diluted earnings per share to $15.51, up 9% versus 2023 (10% excluding currency translation impact).
• Year-Over-Year Performance in Key Financial Measures(a)
• (a)Adjusted operating profit and margin, earnings per share and after-tax return on capital are non-GAAP measures.
• 2024 Compensation Highlights
• performance period.
• The Company exceeded the maximum performance level that was established for the ROC PSUs, resulting in a payout of 200% of target.
• The Company’s relative Total Shareholder Return (TSR) ranking was in the 71st percentile of its pre-established peer group over the three-year performance period, resulting in a payout of 184% of target.
• FINANCIAL BUSINESS OBJECTIVES: Achieve sustained growth in profitability and shareholder return resulting in a robust cash flow to fund capital investment growth opportunities, dividend payments, and share repurchases.
• · Annual performance-based variable compensation earned by meeting or exceeding pre-established financial goals.
• · Annual grants of PSUs that vest based upon performance results over three years.
• · Annual grants of stock options, the value of which is directly linked to the growth in the Company’s stock price.
• · Annual grants of restricted stock units (RSUs) with three-year cliff vesting and value based on the Company’s stock price.
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• STRATEGIC BUSINESS OBJECTIVES: Maintain world-class standards in safety, environmental responsibility, global compliance, strategic positioning, productivity, talent management, and financial controls.
• · Annual payout of variable compensation is impacted by performance in these strategic and non-financial objectives.
• Attract and retain executives who thrive in a sustainable performance-driven culture.
• · A competitive compensation and benefits program regularly benchmarked against peer companies of similar size in market capitalization, revenue, and other financial metrics and business attributes.
• · Realized compensation that varies with Company performance, with downside risk and upside opportunity.
• Overview of Executive Compensation Program
• Executive Compensation Philosophy
• The HC Committee established its compensation philosophy to serve as the basis for designing executive compensation programs.
• Key Objectives
• •Attract and retain talented executives.
• •Motivate executives to deliver strong business results in line with shareholder expectations.
• •Build and support a performance-driven culture.
• •Encourage executives to earn and own Company stock, aligning their interests with those of shareholders.
• Other Main Principles
• •Comparator groups should reflect talent markets, customer segments, and investment markets, and will be adjusted to meet changes in these elements.
• •Target total direct compensation will include a fixed base pay component plus variable short- and long-term incentives.
• •Total target direct compensation will be focused at the median (50th percentile) of the competitive market.
• •Challenging but achievable performance goals to be established with performance levels defined as “maximum” representing truly exceptional, outstanding performance, and a carefully and objectively established threshold level of performance, below which no incentives will be earned.
• •Long-term incentives should mainly be in the form of equity, which focuses executives on total Company performance in the eyes of shareholders and rewards executives when shareholders are rewarded.
• WHAT WE DO: ✓ Link a substantial portion of total compensation to Company performance:✓ ✓ Annual variable compensation awards based principally upon performance against objective, pre-established financial goals ✓ Equity grants consisting largely of PSUs and stock options, focused on longer term shareholder value creation✓ ✓ Set compensation within competitive market ranges✓ ✓ Require substantial stock ownership and stock retention requirements for officers✓ ✓ Limit perquisites and personal benefits✓ ✓ Have a clawback (“recapture”) policy that applies to performance-based cash awards and equity grants, including gains realized through exercise or sale of equity securities WHAT WE Do Not DO: X Guarantee bonuses for executive officers X Allow pledging or hedging of Company stock held by officers X Pay tax “gross-ups” on perquisites and personal benefits unless related to international assignment benefits that are available to employees generally X Include the same metrics in the short- and long-term incentive programs X Allow backdating or repricing of stock option awards X Pay or accrue dividends or dividend equivalents on unvested PSU and RSU awards X Include an excise tax “gross-up” provision in the event of a change-in-control X Accelerate equity award vesting upon change-in-control
• The following table describes the elements of our executive compensation program and the form of each element.
• Element Form Base Salary •Cash (salary increases, if applicable, are typically made effective on April 1st of each year).
• • Annual Variable Compensation •Cash (based on achievement against financial, strategic non-financial, and individual objectives during the year).
• • Equity Awards •Stock Options (each representing the right to purchase a share of Company stock at an exercise price equal to the closing market price on the date of grant).•PSUs (each representing one share of Company stock which vests only if threshold achievement against pre-established goals is met or exceeded).•RSUs (each representing one share of Company stock with a time-based vesting requirement).
• Pay Mix
• For 2024, between 72% and 79% of the NEOs’ target total direct compensation opportunity was in the form of
• performance-based variable compensation and equity grants, motivating them to deliver strong business performance and drive shareholder value.
• The performance-based compensation is “at risk” and dependent upon the Company’s achievement of pre-established financial and other business goals set by the HC Committee and, for equity incentives, also the Company’s stock price performance.
• The annual variable compensation payout and the ultimate value of the performance-based equity compensation awards could be zero if the Company does not perform.
• Performance-based equity compensation is valued at the “grant-date fair value” of each award as determined under accounting standards related to share-based compensation.
• For its consideration of 2024 executive compensation, the HC Committee engaged Pearl Meyer LLC (“Pearl Meyer”) as its compensation consultant.
• In February 2024, as part of the HC Committee’s standard practice to conduct such a review on an annual
• basis, the HC Committee assessed the independence of the compensation consultant.
• Compensation Peer Group 3M Gilead Sciences Merck & Co. Abbvie Halliburton Company Mondelez Intl Abbott Honeywell Intl PPG Industries Caterpillar InBev Raytheon Technologies Coca-Cola Johnson Controls Roche Cummins Kraft Heinz SAP Danaher Lyondell Basell Sherwin-Williams Deere Medtronic Thermo Fisher Eaton Micron Technology
• significant weight given to rewarding long-term performance through equity awards.
• White EVP, Chief Financial Officer $ 920,000 110% $ 5,100,000 $ 7,032,000 Guillermo Bichara EVP, Chief Legal Officer $ 810,000 95% $ 3,050,000 $ 4,629,500 Sean F.
• Durbin EVP, North America $ 750,000 95% $ 2,880,000 $ 4,342,500 David P.
• Strauss EVP, Chief Human Resources Officer $ 785,000 95% $ 2,400,000 $ 3,930,750
• (2) Represents annual variable compensation incentive target (as % of annual salary rate) in effect during 2024 plan year.
• Direct Compensation for Executive Officers
• Salary
• Salary adjustments, if any, are typically effective April 1 of each year.
• long-term business objectives or encouraging excessive risk-taking.
• The annual variable compensation program is comprised of three main components: financial performance, strategic and non-financial performance, and individual performance.
• This program is designed to deliver pay commensurate with performance wherein results that are greater than target goals are rewarded with above target payout levels and performance not meeting minimum threshold expectations reduces the payout to zero.
• Financial Performance Goals
• Top line sales growth is important to the Company and 20% of the financial performance goal is based on sales.
• Recognizing the importance of profitability and cash flow to the Company, 55% of the financial performance goal is based on net income, and the remaining 25% on operating cash flow.
• Strategic and Non-Financial Performance Goals
• The program design includes a component measuring annual performance against pre-established goals related to reducing greenhouse gas (“GHG”) emissions.
• This component comprises 20% of the strategic non-financial performance payout.
• The remainder of the strategic and non-financial goals are related to core values (weighted 60% of strategic non-financial performance) and the Company’s relative performance and strategic positioning, which accounts for the remaining 20%.
• Most of these strategic and non-
• financial goals are linked to quantitative and measurable objectives, although the HC Committee uses its judgment when determining the value awarded for goal achievement after a rigorous review of the results.
• The 2024 goals for these components were as follows:
• GOAL ADDITIONAL DETAIL Values: Safety, Compliance, Sustainability and Inclusion•Zero fatalities with fatality potential event reduction•No significant process safety or environmental events•Best in class recordable injury, lost workday case and vehicle accident rates•Maintain world class performance in sustainability•Drive a strong global compliance program and culture focusing on policies, procedures, training, reporting, accountability and verification via audit•Strengthen leadership pipeline, including globally diverse talent, through a single succession planning and performance management approach across the enterprise •Providing employees with a safe operating environment through investing in state of the art technology and by driving a culture in which safety is a top priority•Maintain rigorous processes and procedures to ensure compliance with all applicable environmental regulations, to meet sustainable development performance targets and to continuously reduce the environmental impact of the Company’s operations in the communities in which it operates•Create and maintain a strong ethical culture in every country where Linde operates•Hold all employees accountable for ensuring that business results are achieved in compliance with local laws and regulations and the Company’s Code of Business Integrity•Attract, retain and develop a highly qualified, inclusive and engaged workforce through a robust succession planning process•Employee value proposition includes providing strong, dynamic leadership, a challenging work environment, industry-leading performance, competitive pay and benefits, and rewards and recognition for outstanding performance Relative Performance and Strategic Positioning:•Position the business for long-term performance•Execute the decarbonization strategy•Deliver profitable growth by commercializing new applications and use cases•Win more than our fair share of high-quality projects•Leverage digitalization and targeted AI solutions to support growth, productivity, and automation with demonstrable bottom line impact•Enhance organizational capabilities in productivity tools, processes and practices•Strong performance relative to peer companies •Continue to be the best performing industrial gases company in the world•Deliver excellent results in the short-term and over a longer, sustainable period of time•Rigorously assess the quality and future impact of actions taken, as benefits may not be recognized for several years•Monitor the “health” of the organization through pulse surveys•Focus on meeting schedules and cost estimates, starting-up plants reliably and efficiently, and supporting plant availability•Deliver value through continuous innovation to help Linde’s customers enhance their product quality, service, reliability, productivity, safety, and environmental performance•Work across disciplines, industries and sectors, with employees, customers, suppliers and a range of other stakeholders to get more output utilizing fewer resources and with less environmental impact•Assess how well we anticipate and manage adversity to optimize results•Determine if management’s actions appear more or less effective than those of Linde’s peers•Appropriately respond to macroeconomic or other external factors unknown at the time financial goals were established
• Annual Performance-Based Variable Compensation Opportunity for 2024
• 2024 Annual Performance-Based Variable Compensation Results and Payout
• Financial Business Results
• As noted above, financial goals are set considering multiple factors with the recognition that there are some items that cannot be easily predicted and over which management has less control, such as foreign exchange rates and certain raw materials price changes.
• As part of the variable compensation plan design, certain pre-determined adjustments may be made by the HC Committee to actual financial results in order to account for these elements.
• The HC Committee may also conclude that additional adjustments are appropriate based upon unforeseen factors it deems extraordinary, non-recurring, or otherwise material.
• HC Committee and the actual performance achieved.
• The overall weighted average payout factor for financial performance for Mr. Durbin was 83.5%.
• FinancialMeasure Threshold($ millions) Target($ millions) Maximum($ millions) Actual($ millions) Weight Achievement Payout Sales* 30,792 33,289 36,916 33,082 20 % 91.5 % 18.3 % Net Income* 6,734 7,390 8,164 7,480 55 % 111.6 % 61.4 % Operating Cash Flow 8,960 9,908 11,279 9,422 25 % 48.8 % 12.2 %
• STRATEGIC NON-FINANCIAL BUSINESS RESULTS
• The chart below shows, for the GHG emissions reduction measure, the 2024 Corporate targets set by the HC Committee and the actual performance achieved.