DEF: Badger Meter, Inc. Announces Details for 2025 Annual Shareholder Meeting

Badger Meter, Inc. sets date for its annual shareholder meeting, outlining key proposals including director elections, executive compensation approval, and auditor ratification.

Summary

• Badger Meter, Inc. will hold its Annual Meeting of Shareholders on April 25, 2025, at 8:30 a.m. Central Time at its Milwaukee headquarters.
• Shareholders will vote on electing nine directors, approving executive compensation, and ratifying Ernst & Young LLP as the independent auditor for the year ending December 31, 2025.
• The Board of Directors recommends voting for all director nominees and for the proposals regarding executive compensation and auditor ratification.
• The record date for determining shareholders eligible to vote is February 28, 2025.
• As of the record date, there were 29,410,868 shares of common stock outstanding and entitled to vote.
• The proxy statement and the 2024 Annual Report on Form 10-K are available online at www.proxyvote.com.
• The company's executive compensation program is designed to attract and retain qualified executive officers, as well as motivate and reward individual and company performance.
• The Compensation Committee strives to achieve a fair and market competitive compensation structure for our executive officers, including each NEO, that supports our business by establishing an emphasis on balancing critical annual objectives and long-term strategy without encouraging excessive risk taking.
• The payment of annual incentive compensation is directly linked to the attainment of performance goals approved by the Compensation Committee.
• The long-term incentive program is designed to align with shareholder interests by utilizing equity and other awards based on the achievement of long-duration targets in order to ensure that our executive officers are committed to and focused on our long-term success.
• Compensation policies are structured to drive enterprise financial and operational outcomes in a manner that improves the company's operational performance, creates shareholder value and aligns the interests of management with the interests of shareholders, in a manner that does not encourage excessive risk taking.
• To discourage excessive risk taking, the Compensation Committee conducts an annual risk assessment of our compensation plans and places great emphasis on variable and equity-based incentive compensation and stock ownership by executive officers.

Sentiment

Score: 7

Explanation: The document is largely positive, highlighting strong financial performance, sustainability initiatives, and sound governance practices. However, the mention of a cybersecurity risk and an increase in the safety incident rate temper the overall sentiment.

Positives

• All director nominees have a reputation for integrity, honesty, and adherence to high ethical standards.
• The company actively seeks out highly qualified female, underrepresented minority, and LGBTQ+ candidates for Board positions.
• The company has a Compensation Recoupment Policy (clawback policy) to ensure incentive-based compensation is paid based on accurate financial statements and ethical conduct.
• The company prohibits executive officers and directors from engaging in short selling, hedging transactions, or pledging company stock.
• The company disclosed achievement of double digit intensity reductions in both greenhouse gas (GHG) emissions at 18%, and water usage at 27%.
• Our GHG intensity is down 44% from our 2020 baseline as compared to our current goal of 50% by 2030.

Negatives

• The Company inadvertently neglected to timely file Form 4s for the Performance Stock Units (PSUs) earned as a result of the achievement of performance criteria and approved by the Compensation and Resources Committee of the Board relating to the 2021-2023 performance period which occurred on February 6, 2024.
• Safety, as measured by our global Total Case Incident Rate (TCIR), was 0.43 in 2024, compared to 0.40 in 2023 and 0.59 in 2022. Our goal remains zero.

Risks

• The company acknowledges the ongoing threat of cybersecurity incidents, though no material breaches have occurred to date.
• The company's safety record, as measured by the Total Case Incident Rate (TCIR), increased from 0.40 in 2023 to 0.43 in 2024, indicating a potential area of concern.

Future Outlook

The Board remains focused on delivering long-term shareholder value and appreciates investors' trust and confidence in our leadership.

Management Comments

• Mr. Tellock stated: 'A critical element of our independent oversight includes assessing our performance and driving continuous improvement in our overall effectiveness. It also includes ensuring a productive partnership with management. I work closely with our Chairman and CEO to ensure that in addition to scheduled Board and Committee meetings, our directors engage with management to provide additional insight on matters of strategic importance. As a Board, we remain focused on delivering long-term shareholder value and we appreciate investors' trust and confidence in our leadership.'

Industry Context

Badger Meter operates in the water management industry, providing flow measurement, control, and communication solutions. The company's performance is influenced by factors such as infrastructure spending, water scarcity concerns, and technological advancements in metering and data analytics.

Comparison to Industry Standards

• The peer group for executive compensation includes companies like A. O. Smith, Watts Water Technologies, and Mueller Water Products, all operating in similar industrial and water-related sectors.
• The company's executive compensation practices are benchmarked against these peers to ensure competitiveness and alignment with industry standards.
• The company's sustainability efforts, including reductions in GHG emissions and water usage, align with increasing industry focus on environmental responsibility.

Corporate Governance

Related Party Transactions

• There were no related person transactions during 2024, and none are currently proposed, in which we were a participant and in which any related person had a direct or indirect material interest.

Stakeholder Impact

• The company's sustainability initiatives aim to reduce its environmental footprint and contribute to a more sustainable future, benefiting the environment and society.
• The company's commitment to diversity and inclusion in Board nominations promotes inclusiveness and better representation of all constituents.
• The company's executive compensation program is designed to align management's interests with those of shareholders, driving long-term value creation.

Next Steps

• Shareholders are urged to submit their proxies as soon as possible.
• The Board of Directors will review and consider the outcome of the advisory vote on executive compensation when making future compensation decisions.

Key Dates