DEF: Carrier Global Seeks Shareholder Approval for Incentive Plan Amendment Amid Strong Performance

Carrier Global Corporation is asking shareholders to approve an amendment to its long-term incentive plan to authorize an additional 17,000,000 shares for future issuance, aiming to align executive compensation with shareholder value and retain key talent.

Summary

• Carrier Global Corporation is soliciting proxies for its 2025 Annual Meeting of Shareowners to be held on April 9, 2025.
• The agenda includes the election of 10 director nominees, an advisory vote on executive compensation, approval of an amendment to the long-term incentive plan, ratification of the appointment of PricewaterhouseCoopers LLP as independent auditor, and a shareowner proposal requesting a lobbying transparency report.
• The Board recommends voting for all director nominees, the executive compensation advisory vote, the incentive plan amendment, and the auditor ratification, but against the lobbying transparency report proposal.
• A key proposal is to amend the Carrier Global Corporation 2020 Long-Term Incentive Plan to authorize 17,000,000 additional shares for future issuance.
• As of February 13, 2025, approximately 7,484,000 shares were available under the plan.
• The company emphasizes that equity compensation aligns director, employee, and shareowner interests, and that it carefully considers share usage and dilution.
• The Board believes the additional shares will last for approximately five years of grants, based on current practices and share price.
• The company highlights strong financial performance in 2024, including a 19% increase in net sales, a 3% organic sales growth, and a 16% increase in adjusted diluted earnings per share.
• The company returned approximately $2.6 billion in capital to shareowners through dividends and share repurchases.
• The company is committed to transparent communication with investors and has engaged with shareowners representing over 70% of outstanding shares.
• The company has implemented several corporate governance actions to increase shareowner rights, enhance the Board's structure, and augment its commitment to sustainability and corporate responsibility.

Sentiment

Score: 8

Explanation: The document expresses a positive outlook for Carrier, highlighting strong financial performance, strategic transformation, and commitment to shareholder value. The company's leadership and strategic vision are praised, and the document emphasizes the alignment of executive compensation with shareholder interests.

Positives

• The company emphasizes that equity compensation aligns director, employee, and shareowner interests.
• The Board believes the additional shares will last for approximately five years of grants, based on current practices and share price.
• Carrier's 2024 net sales increased by 19% year-over-year, with 3% organic sales growth.
• Adjusted diluted earnings per share increased by 16% year-over-year.
• The company returned approximately $2.6 billion in capital to shareowners through dividends and share repurchases.
• The company has engaged with shareowners representing over 70% of outstanding shares.
• The company has implemented several corporate governance actions to increase shareowner rights, enhance the Board's structure, and augment its commitment to sustainability and corporate responsibility.

Negatives

• The company received approximately 58% say-on-pay support at its 2024 Annual Meeting.
• Some shareowners conveyed that they voted against our say-on-pay proposal in 2024 primarily due to the Supplemental Equity Awards issued to our CEO, Dave Gitlin, and CFO, Patrick Goris, in January 2024.

Risks

• The document contains forward-looking statements that are subject to risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied.
• The company faces risks related to government actions, cybersecurity, competition, human capital management, logistics and supply chain, and the impact of disruptive events.

Future Outlook

Carrier enters 2025 uniquely poised to benefit from the megatrends driving sustainable growth and innovation.

Management Comments

• Under the strong and visionary leadership of David Gitlin, Carrier has not only reshaped its portfolio, but also strengthened its position as a simpler, more focused and customer-centric provider of intelligent climate and energy solutions.
• With a clear vision for the future, Carrier enters 2025 uniquely poised to benefit from the megatrends driving sustainable growth and innovation.

Industry Context

Carrier is transforming into a pure-play climate solutions provider, aligning with the increasing global focus on sustainability and energy efficiency.

Comparison to Industry Standards

• Carrier's total shareholder return of 330% since its Separation in 2020 has outperformed the S&P 500, the S&P Industrials indices, and the Dow Jones Industrial Average.
• The company's Price/Earnings (P/E) ratio has more than doubled, from 9.4x to approximately 22x.

Corporate Governance

Related Party Transactions

• Carrier purchases services in the ordinary course of business from financial institutions that beneficially own more than 5% of our common stock.
• Max Viessmann was appointed as a member of the Board. In light of Mr. Viessmanns current service as Chief Executive Officer and a member of the Executive Board of Viessmann Generations Group, and the ownership by Mr. Viessmann, together with other members of the Viessmann family, of a majority of the capital stock of Viessmann Generations Group, Viessmann Generations Group became a related party of Carrier.

Stakeholder Impact

• The company's actions are intended to deliver long-term value to Carrier's customers, employees, and shareowners.
• The company is committed to embedding sustainable practices across its global operations, ensuring that it continues to lead the way toward a more sustainable future.

Next Steps

• Shareowners will vote on the proposals at the 2025 Annual Meeting on April 9, 2025.
• The Board will continue to engage with shareowners to ensure compensation practices align with their interests.
• The company will continue its transformation journey to become the global leader in intelligent climate and energy solutions.

Key Dates