DEF: TE Connectivity Sets 2026 AGM, Details Executive Pay & Governance

TE Connectivity plc announces its 2026 Annual General Meeting agenda, including director elections, auditor appointments, and an advisory vote on executive compensation, alongside a review of strong fiscal year 2025 financial performance.

Summary

• The 2026 Annual General Meeting (AGM) of Shareholders of TE Connectivity plc will be held on Wednesday, March 11, 2026, at 2:00 p.m. GMT, in Dublin, Ireland.
• Shareholders will vote on five agenda items: election of thirteen director nominees, ratification of Deloitte & Touche LLP as independent auditors and Deloitte Ireland LLP as statutory auditor, an advisory vote on Named Executive Officer (NEO) compensation, authorization for market purchases of company shares, and determination of the price range for re-allotting treasury shares.
• Fiscal Year 2025 highlights include record net sales of $17.3 billion, a record GAAP operating margin of 19%, GAAP EPS of $6.16, and record cash flow from operating activities of $4.1 billion.
• The company returned $2.2 billion to shareholders and deployed $2.6 billion for bolt-on acquisitions in FY2025.
• Executive compensation for FY2025 included base salary increases for several NEOs, annual incentive payouts ranging from 126.8% to 167.1% of target, and equity awards (50% Performance Stock Units (PSUs) and 50% stock options).
• FY2023 PSUs, with a three-year relative EPS growth performance cycle, vested in December 2025 at 136% of target.
• The CEO's target total compensation is 92% performance-based and at risk, while other NEOs average 82% performance-based and at risk compensation.
• The Board of Directors recommends voting FOR all director nominees and FOR each of the other agenda items.

Sentiment

Score: 8

Explanation: The filing highlights strong financial performance in fiscal year 2025, including record sales, operating margin, and cash flow, coupled with significant capital returns and strategic acquisitions. Executive compensation is tied to these above-target results, and robust corporate governance practices are emphasized. The overall tone is highly positive, reflecting a well-managed company with strong operational execution despite market challenges.

Positives

• Achieved record net sales of $17.3 billion in fiscal year 2025.
• Attained a record GAAP operating margin of 19% in fiscal year 2025, driven by strong operational performance.
• Generated record cash flow from operating activities of $4.1 billion for the full fiscal year 2025.
• Returned $2.2 billion to shareholders in fiscal year 2025.
• Deployed $2.6 billion for strategic bolt-on acquisitions in fiscal year 2025.
• Fiscal year 2025 annual incentive payouts for Named Executive Officers (NEOs) ranged from 126.8% to 167.1% of target, reflecting strong performance against established metrics.
• Fiscal year 2023 Performance Stock Units (PSUs) vested at 136% of target, indicating strong relative EPS growth over the three-year performance cycle.
• Received strong shareholder support for the executive compensation program in fiscal year 2025, with approximately 91.07% of votes cast in favor.
• Demonstrated significant progress in environmental sustainability, achieving over a 25% reduction in energy use intensity, over a 25% reduction in total water withdrawal, and over an 80% reduction in absolute GHG emissions for Scopes 1 and 2 from fiscal 2020 to 2025.
• Had GHG emissions reduction goals validated by the Science Based Targets initiative (SBTi).
• Reduced the Occupational Safety and Health Administration (OSHA) total recordable incident rate to 0.06 in fiscal 2025, indicating improved employee safety.

Risks

• Actual results could differ materially from forward-looking statements due to various risks and uncertainties described in the Annual Report on Form 10-K for the fiscal year ended September 26, 2025.
• Environmental, social, governance (ESG) and sustainability statements are based on assumptions and estimates subject to a high level of uncertainty, and may not be representative of current or actual risk or performance.
• Historical, current, and forward-looking environmental and social related statements may be based on developing standards for measuring progress and evolving internal controls and processes.
• The Audit Committee oversees risks related to privacy.
• The Management Development and Compensation Committee reviews risks related to chief executive officer succession plans for senior executives, overall compensation structure, incentive compensation plans, equity-based plans, severance programs, change-of-control agreements, benefit programs, and human capital management.
• The Nominating, Governance and Compliance Committee reviews risks related to related person transactions, the effectiveness of the Company's environmental, health and safety management program, enterprise-wide risk assessment processes, and compliance programs.
• The Joint Committee on Cybersecurity assists the Board with oversight of the Company's cybersecurity program and risks, including information technology and security risk exposures, cybersecurity attacks, and security breaches.
• The company operates in a complex operating environment with continued macroeconomic uncertainty and uneven demand across industrial end-markets.
• Specific business units face challenges including a slower global automotive production environment and an inventory correction in industrial automation and Medical markets.
• Global tariffs were introduced and continuously fluctuated in the second half of fiscal year 2025, impacting the operating environment.

Future Outlook

The company anticipates its 2027 Annual General Meeting of Shareholders will be held on or about March 17, 2027. For fiscal year 2026, the Annual Incentive Program (AIP) design will maintain two performance periods for financial metrics and a single payout at year-end, allowing for mid-year target adjustments in response to evolving global market conditions, including shifts in automotive production, industrial demand cycles, and supply chain normalization. The Board expects to propose renewal of the authorization for market purchases of company shares and re-allotment of treasury shares at subsequent Annual General Meetings.

Management Comments

• "On behalf of the Board of Directors and our senior management team, we are pleased to invite you to attend the 2026 Annual General Meeting of Shareholders of TE Connectivity plc..." Carol A. (John) Davidson, Chairman of the Board.
• "Our executive compensation philosophy calls for competitive total compensation that will reward executives for achieving individual and corporate performance objectives and will attract, motivate and retain leaders who will drive the creation of shareholder value." Management Development and Compensation Committee.
• "The Management Development and Compensation Committee believes the results of last year's Say on Pay vote affirmed our shareholders' support of our Company's executive compensation program. This confirmed our decision to maintain a consistent overall approach in setting executive compensation for 2025." Management Development and Compensation Committee.
• "At TE Connectivity, our purpose is to create a safer, sustainable, productive and connected future. Our values of integrity, accountability, inclusion, teamwork, and innovation govern us and guide our actions." Corporate Responsibility section.
• "The MDCC believes the above-target payouts appropriately recognize this strong execution and reinforce alignment between the Annual Incentive Plan and shareholder value creation in both favorable and challenging conditions." Management Development and Compensation Committee, regarding FY2025 annual incentive payouts.

Industry Context

TE Connectivity is positioned as a global industrial technology leader, providing connectivity and sensor solutions critical for next-generation transportation, energy networks, automated factories, and data centers, including those enabling artificial intelligence. The company emphasizes its diversification and global scale as key advantages. Despite operating in a complex macroeconomic environment characterized by uncertainty, uneven demand in industrial end-markets, a slower global automotive production environment, and inventory corrections in industrial automation and medical sectors, the company demonstrated strong financial performance in fiscal year 2025, indicating resilience and effective strategic execution within these challenging conditions.

Comparison to Industry Standards

• The company benchmarks executive compensation against an 'Industry Peer Group' of 21 companies within the electronics and related industries, including 3M Company, Eaton Corporation, Honeywell International Inc., and Texas Instruments Inc., with median annual revenues of $17.6 billion.
• The Performance Stock Unit (PSU) program uses three-year average Relative Earnings Per Share (EPS) Growth against the S&P 500 Non-Financial Index as a key performance metric, aligning management incentives with profitability per share compared to a relevant peer group.
• The CEO pay ratio of 621:1 is influenced by the company's global workforce composition, where a substantial portion of employees are based in regions with prevailing wage levels lower than in the United States, while the CEO's compensation is benchmarked against comparable U.S. market data.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders**: Directly impacted by voting on director elections, auditor appointments, executive compensation, and proposals for share repurchases and treasury share re-allotment. Benefit from strong financial performance, significant capital returns ($2.2 billion), and executive compensation aligned with shareholder interests.
• **Employees**: Benefit from an executive compensation program designed to attract, motivate, and retain leaders. Welfare benefits are provided on the same basis as all other employees. The company is committed to human rights, fair working hours, wages, and benefits, and focuses on diversity, inclusion, and employee safety (reduced OSHA incident rate).
• **Customers**: Benefit from the company's focus on technology and innovation, which drives the production of highly engineered connectivity and sensing products.
• **Suppliers**: Expected to comply with the Supplier Code of Conduct, with high-risk suppliers audited for compliance with child and forced labor laws and regulations.
• **Community/Environment**: Positively impacted by the company's commitment to ESG goals, including significant reductions in energy, water, and GHG emissions. The TE Connectivity Foundation supports access to technology and engineering for all, particularly women and underserved communities.

Next Steps

• Shareholders are invited to attend and vote at the Annual General Meeting on March 11, 2026.
• The Board expects to propose renewal of the authorization for market purchases of company shares and re-allotment of treasury shares at subsequent Annual General Meetings.
• The 2027 Annual General Meeting of Shareholders is anticipated to be held on or about March 17, 2027.
• Shareholder proposals for the 2027 AGM must be submitted by September 17, 2026 (Rule 14a-8) or between September 17, 2026, and October 17, 2026 (Articles of Association).

Key Dates

Recommendation

TE Connectivity demonstrated exceptional financial performance in fiscal year 2025, achieving record net sales, operating margin, and cash flow. The company also returned a substantial $2.2 billion to shareholders and made strategic bolt-on acquisitions totaling $2.6 billion, indicating effective capital allocation and growth initiatives. Executive compensation is clearly linked to these strong results, with above-target payouts. Coupled with robust corporate governance, a commitment to ESG, and a resilient performance despite macroeconomic headwinds, these factors present a compelling investment case for long-term value creation. The company appears well-positioned for continued success, making it an attractive 'buy' for seasoned investors.

Keywords

TE Connectivity, Proxy Statement, Annual General Meeting, Executive Compensation, Corporate Governance, Director Election, Auditor Appointment, Share Repurchase, Treasury Shares, Financial Performance, ESG, Sustainability, Industrial Technology, Connectivity Solutions, Sensor Solutions, Risk Management, Cybersecurity, Shareholder Value