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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
SCHEDULE 14A
(Rule
14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
 
Filed by the Registrant  ☒
Filed by a Party other than the Registrant   ☐
Check the appropriate box:
 
Preliminary Proxy Statement
 
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
 
Definitive Proxy Statement
 
Definitive Additional Materials
 
Soliciting Material Pursuant Rule
14a-12
NORDSON CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
 
No fee required.
 
Fee paid previously with preliminary materials.
 
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules
14a-6(i)(1)
and
0-11.
 
 
 


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LOGO


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LOGO

Nordson Corporation

28601 Clemens Road

Westlake, Ohio 44145

January 19, 2024

Dear Shareholder:

On behalf of the Board of Directors of Nordson Corporation (the “Board of Directors”), it is my pleasure to invite you to attend our virtual annual meeting of shareholders (the “Annual Meeting”), which will be conducted in an audio-only format on Tuesday, March 5, 2024, at 9:00 a.m. Eastern Time. You will be able to attend the Annual Meeting online registering at www.proxydocs.com/NDSN, where you will be able to vote your shares electronically, and submit your questions electronically during the Annual Meeting. As the Annual Meeting is being held in a virtual format only, you will not be able to attend the Annual Meeting in person.

The accompanying Notice of Annual Meeting and Proxy Statement describe the proposals that will be discussed and voted upon during the Annual Meeting. It is important that you vote your shares whether or not you plan to virtually attend the Annual Meeting. You have a choice of voting through the internet, by telephone, or by returning the proxy/voting instruction card by mail. You may also vote electronically during the Annual Meeting. Please refer to the instructions in the proxy materials.

On behalf of management and the Board of Directors, I want to thank you for your continued support and confidence in 2024.

 

LOGO

  

Sincerely,

 

 

LOGO

 

MICHAEL J. MERRIMAN, JR.

Chair of the Board of Directors

  


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NORDSON CORPORATION

TABLE OF CONTENTS

 

Notice of Annual Meeting of Shareholders

     1  

Proxy Statement Summary

     3  

Annual Meeting Information

     3  

Voting Matters and Board Recommendations

     3  

Directors Serving on Boards of Other Public Companies

     7  

Proxy Statement

     8  

Proposal 1: Election of Directors

     9  

Corporate Governance

     21  

Shareholder Engagement, Environmental and Social Governance, and Sustainability

     21  

Committees of the Board of Directors

     27  

Proposal 2: Ratify the Appointment of Independent Registered Public Accounting Firm

     32  

Security Ownership of Nordson Common Shares by Certain Beneficial Owners and Management

     34  

Proposal 3: Approve, on an Advisory Basis, the Compensation of Our Named Executive Officers

     36  

Executive Compensation Discussion and Analysis

     37  

Executive Summary

     39  

Discussion of Our Compensation Program

     42  

Compensation Committee Report

     63  

Risks Related to Executive Compensation Policies and Practices

     64  

Summary Compensation for Fiscal Year 2023

     65  

Grants of Plan-Based Awards

     69  

Outstanding Equity Awards at October 31, 2023

     72  

Option Exercises and Stock Vested Tables

     75  

Pension Benefits

     76  

Non-Qualified Deferred Compensation

     79  

Potential Benefits Upon Termination or Change of Control

     81  

CEO Pay Ratio

     85  

Audit Committee Report

     90  

Questions and Answers About the Annual Meeting and These Proxy Materials

     91  

Website References

Throughout this proxy statement, we identify certain materials that are available in full on our website. The information contained on, or available through Nordson’s internet website is not and shall not be deemed to be, incorporated by reference in this proxy statement.

Forward-looking Statements

This proxy statement contains forward-looking statements within the meaning of the federal securities laws. Forward looking statements may be identified by the use of words such as “believe,” “expect,” “plans,” “intends,” “may,” “strategy,” “target,” “goals,” “anticipate,” and other similar words, and include, without limitation, statements regarding the anticipated effects of the August 2023 acquisition of the ARAG Group and its integration, as well as


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our expectations about our future earnings and dividend growth. These statements are subject to certain risks, uncertainties, and other factors, which could cause actual results to differ materially from those anticipated. Such risks include those contained in Nordson’s Annual Report on Form 10-K for the year ended October 31, 2023 and other documents Nordson files with the Securities and Exchange Commission. These risks are not comprehensive and given these and other possible risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Any forward-looking statements made by Nordson speak only as of the date on which they are made. Nordson is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, subsequent events or otherwise.


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Nordson Corporation

NOTICE OF ANNUAL MEETING

OF SHAREHOLDERS

To Be Held Tuesday, March 5, 2024

 

Date and Time:   

Tuesday, March 5, 2024

9:00 a.m. Eastern Time

Place:   

Virtually, Via Audio-Only

To attend the Annual Meeting you must register at www.proxydocs.com/NDSN

Proposals:           

1.   To elect four director nominees to our Board of Directors;

 

2.   To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2024;

 

3.   To approve, on an advisory basis, the compensation of our named executive officers; and

 

4.   To transact other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

Record Date:    Close of business on January 5, 2024

We have provided access to our proxy materials over the internet at www.proxydocs.com/NDSN by mailing our shareholders a Notice of Internet Availability of Proxy Materials or, upon your request, by mailing this Proxy Statement and the enclosed proxy/voting instruction card on or about January 19, 2024. The Notice of Internet Availability of Proxy Materials provides information on how shareholders can obtain paper copies of our proxy materials, if they so choose.

Our Proxy Statement, and our Annual Report on Form 10-K for the fiscal year ended October 31, 2023, are also available at: https://investors.nordson.com/financials/default.aspx#annual-reports. The Board of Directors has determined that shareholders of record at the close of business on January 5, 2024 are entitled to notice of, and to vote during, the Annual Meeting.

By Order of the Board of Directors,

 

 

LOGO

Jennifer L. McDonough

Executive Vice President, General Counsel

and Secretary

January 19, 2024

Westlake, Ohio

 

Nordson Corporation – 2024 Proxy Statement   |   1


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Important Notice Regarding the Availability of Proxy Materials for the

Annual Meeting of Shareholders to be held on March 5, 2024:

The proxy materials, including this Proxy Statement, and the Annual Report for the fiscal year ended October 31, 2023, are available at:

www.proxydocs.com/NDSN

 

2   |   Nordson Corporation – 2024 Proxy Statement


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PROXY STATEMENT SUMMARY

This summary highlights select information about Nordson’s 2024 Annual Meeting of Shareholders and our corporate governance and executive compensation practices. These charts do not contain all of the information provided elsewhere in this Proxy Statement; therefore you should read the entire proxy statement carefully before voting.

We first released this proxy statement and the accompanying proxy materials to shareholders on or about January 19, 2024.

 

 

ANNUAL MEETING INFORMATION

 

     
DATE & TIME   LOCATION             RECORD DATE     
     

 

      LOGO      

 

 

      LOGO      

 

 

      LOGO      

 

Tuesday, March 5, 2024

9:00 a.m. Eastern Time

 

 

Virtually, via the internet. Please visit:     

www.proxydocs.com/NDSN to register     

 

       January 5, 2024     

 

 

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

       
PROPOSALS    REQUIRED VOTE  

BOARD

  RECOMMENDATION  

    PAGE  
       

Proposal 1

Election of four director nominees to our Board of Directors

   Each nominee must receive a plurality of the votes cast.  

FOR

each nominee

  9
       

Proposal 2

Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2024

   This non-binding proposal will be considered approved if more votes are cast in favor than against.   FOR   32
       

Proposal 3

Approve, on an advisory basis, the compensation of our named executive officers

   This non-binding proposal will be considered approved if more votes are cast in favor than against.   FOR   36

 

 

HOW TO VOTE

 

       
VIA THE INTERNET   BY TELEPHONE              BY MAIL              VOTE AT MEETING     
       

 

LOGO

 

 

LOGO      

 

  

      LOGO      

 

  

      LOGO      

 

www.proxypush.com/NDSN  

Call 1-866-868-2638     

in the U.S. or Canada     

  

     Follow the instructions on the     

     proxy / voting instruction card     

  

     Attend our Annual Meeting     

     and vote electronically     

Abstentions as to any matter are counted in determining the presence of a quorum at the Annual Meeting. Abstentions are not included in the vote count for election of directors. However, abstentions will affect the outcome of the votes on Proposals 2 and 3, being equivalent to votes “against” the proposals.

We will also consider any other matters that may properly be brought before the Annual Meeting and any postponement(s) or adjournment(s) thereof. As of the date of this Proxy Statement, we have not received notice of other matters that may be properly presented at the Annual Meeting.

 

Nordson Corporation – 2024 Proxy Statement   |   3


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The tables below highlight select information about our corporate governance and executive compensation practices:

 

 

BOARD COMPOSITION AND LEADERSHIP PRACTICES

 

       
  Size of Board   9       Board and Committee Meetings Held in 2023   25
       
  Number of Independent Directors   8       Board Meetings Held in 2023   8
       
  Percentage of Independent Committee Members   100%       Directors Attending Fewer than 75% of Meetings   None
       
  New Independent Directors in the last 5 years   5       Annual Board and Committee Self-Evaluations  
       
  Average Director Tenure (years)   6.25       Independent Directors Meet without Management  
       
  Average Director Age   61       Limits on Director Service on Other Boards  
       
  Number of Gender or Racially Diverse Directors   4       Robust share ownership guidelines for Directors  
       
  Percentage of Committees with Female Leadership   33%       Resignation Policy  
       
  Mandatory Retirement Age (72)         Strategy, ESG & risk management oversight  
       
  Independent Chair of the Board           Corporate culture, D&I, cybersecurity oversight  

 

 

STAKEHOLDER AND GOVERNANCE PRACTICES

   
  One share, one vote standard  
   
  No shareholder rights plan or “poison pill”  
   
  Shareholder right to call a special meeting**  
   
  Majority voting policy for Directors  
   
  ESG Report with climate targets  
   
  Code of Conduct for Directors, NEOs & Employees  
   
  Supplier Code of Conduct  
   
  Anti-hedging/pledging policy  
   
  Independent Auditor: Ernst & Young LLP  
**

Special meetings can be called by shareholders holding at least 50% of the voting power

 

COMPENSATION PRACTICES

   
  Pay for Performance  
   
  Annual Say-on-Pay Advisory Vote  
   
  Compensation aligned with strategic initiatives  
   

  Incentive plans do not encourage excessive risk

  taking

 
   
  No excessive perquisites  
   
  Robust share ownership guidelines for NEOs  
   
  Clawback policy  
   
  Double-trigger change-in-control policy  
   
  Independent Compensation Consultant: Exequity  
   
  CEO Pay Ratio   82:1
 

 

 

4   |   Nordson Corporation – 2024 Proxy Statement


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2023 HIGHLIGHTS

FINANCIAL

 

Sales          EBITDA          Adjusted Operating Profit(1)

 

$2.6 Billion

 

A Nordson Record

 

    

 

$819 Million

 

A Nordson Record

 

    

 

$707 Million

 

27% of Sales

 

                
Dividends Paid          Total Shareholder Return(2)          Net Income/Free Cash Flow(1)

$150 Million

 

60th consecutive year

dividend has increased

 

    

10 Year = 227%

 

5 Year = 82%

 

    

$487 Million/

$607 Million

 

FCF 125% of net income

 

GOVERNANCE

 

Board Refreshment          Leadership Changes          Environmental, Social &
Governance

•  Christopher L. Mapes was appointed to our Board in January 2024 (our fifth new independent director in five years).

 

•  Mary G. Puma retired from our Board after 22 years of service.

 

    

•  Joseph Kelley stepped into the role of Industrial Precision Solutions segment leader, effective Nov. 1, 2023.

 

•  Jeffrey A. Pembroke retired as Executive Vice President after 18 years of service.

    

•  Our Board updated the Charter of each standing committee to reflect the oversight of our strategies and initiatives related to corporate social responsibility and sustainability, including environmental, social and governance matters and updated the name of our Governance and Sustainability Committee to further reflect this change.

 

 

1.

See Reconciliation of Financial Measures (Unaudited) following the Questions and Answers About the Annual Meeting and These Proxy Materials section of this Proxy Statement.

 

2.

“Total Shareholder Return” is defined as (share price end of period – share price start of period + dividends paid) / share price start of period.

 

Nordson Corporation – 2024 Proxy Statement   |   5


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COMPENSATION

 

SAY-ON-PAY   

 

INCENTIVE BASED

COMPENSATION PAYMENTS

 

 

Votes cast in favor at our last Annual Meeting:

 

LOGO

 

  

 

Based on our 2023 financial performance, our incentive- based compensation payments were as follows:

 

•  Annual Cash Incentive Award:

 

¡  CEO: 28.3% of Target

 

¡  All other NEOs: 0-55.6% of Target

 

•  Performance Share Incentive Award: 141% of Target

        

    

 

6   |   Nordson Corporation – 2024 Proxy Statement


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DIRECTORS SERVING ON BOARDS OF OTHER PUBLIC COMPANIES

Board service by members of our Board is set forth in our Governance Guidelines, which provides that directors who are not executive officers of a public company may serve on up to three other public company boards, and directors who also serve as an executive officer of a public company may serve on a maximum of one other public company board. The following table shows our directors as of our record date, January 5, 2024, and the public company boards upon which they serve other than ours:

 

 

Director

 

  

 

Other Public Companies

 

   
John A. DeFord   

Globus Medical Inc. (NYSE: GMED)

Maravai LifeSciences Holdings, Inc. (NASDAQ: MRVI)

   
Frank M. Jaehnert   

Itron, Inc. (Nasdaq: ITRI)

   
Ginger M. Jones   

Tronox Limited (NYSE: TROX)

Holley, Inc. (NYSE: HLLY)

   
Christopher L. Mapes   

Lincoln Electric Holdings, Inc. (Nasdaq: LECO)

The Timken Company (NYSE: TKR)

A.O. Smith Corporation (NYSE: AOS)

   
Michael J. Merriman, Jr. (Chair)   

Regis Corporation (NYSE: RGS)

   
Milton M. Morris   

Embecta Corporation (Nasdaq: EMBC)

Myomo, Inc. (NYSE: MYO)

   
Sundaram Nagarajan (CEO)   

Wesco International, Inc. (NYSE: WCC)

   
Jennifer A. Parmentier   

Parker-Hannifin Corporation (NYSE: PH)

   
Victor L. Richey, Jr.   

Thermon Group Holdings, Inc. (NYSE: THR)

 

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NORDSON CORPORATION

PROXY STATEMENT

FOR THE ANNUAL MEETING OF SHAREHOLDERS

March 5, 2024

The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) of Nordson Corporation for use at the 2024 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held virtually, via live webcast on Tuesday, March 5, 2024, at 9:00 a.m. Eastern Time, for the following purposes:

 

  1.

To elect four director nominees to our Board of Directors;

 

  2.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2024;

 

  3.

To approve, on an advisory basis, the compensation of our named executive officers; and

 

  4.

To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement.

The Notice of Internet Availability of Proxy Materials or, if requested, the Proxy Statement and the accompanying proxy/voting instruction card were first mailed to shareholders on or about January 19, 2024.

We are once again holding the Annual Meeting virtually this year. You will be able to attend the Annual Meeting online, vote your shares electronically, and submit your questions during the Annual Meeting by registering in advance at www.proxydocs.com/NDSN. You will not be able to attend the Annual Meeting in person. This Proxy Statement includes more information about the procedures for the virtual Annual Meeting.

This Proxy Statement contains important information regarding our Annual Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote, and information about voting procedures. As used in this Proxy Statement, “we,” “us,” “our,” “Nordson,” or the “Company” refers to Nordson Corporation.

 

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PROPOSAL 1: ELECTION OF DIRECTORS

The Governance and Sustainability Committee is responsible for identifying and evaluating nominees for director and for recommending to the Board a slate of nominees for election at the Annual Meeting. Our Board is divided into three classes, with each class serving for three-year terms. The Board underwent a change in its composition in 2023: Mary Puma retired from the Board effective November 1, 2023 and Christopher L. Mapes was appointed to the Board effective January 16, 2024. The Board is currently comprised of nine directors, with equally balanced classes having three directors per class. Although Mr. Mapes was appointed in January 2024 to the class of directors whose term expires in 2026, he is standing for election at the 2024 Annual Meeting to allow for shareholder approval of his appointment.

The Governance and Sustainability Committee has recommended, and the Board has approved, the persons named as nominees and, unless otherwise marked, a duly executed and properly submitted proxy will be voted for those nominees. Nominees Frank M. Jaehnert, Ginger M. Jones, Christopher L. Mapes and Milton M. Morris currently serve as directors. All nominees other than Mr. Mapes have agreed to stand for election for a three-year term. Mr. Mapes has agreed to stand for election for a two-year term.

In assessing each director nominee and the composition of the Board as a whole, the Governance and Sustainability Committee considers a diverse group of experiences, qualifications, attributes, and skills that the Committee believes enable a director nominee to make significant contributions to the Board, Nordson, and our shareholders. The Board is committed to an inclusive director search process, which includes actively seeking diverse candidates, including women and racially or ethnically diverse candidates, for each search the Board undertakes.

 

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The current-serving directors, including the nominees, collectively have a mix of various skills and qualifications, some of which are listed in the table below. These collective attributes enable the Board to provide insightful leadership as it strives to advance our strategies and deliver returns to shareholders.

DIRECTOR SKILLS & ATTRIBUTES

 

                   

SKILLS, EXPERIENCE & ATTRIBUTES

  LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO  
           

BUSINESS STRATEGY & OPERATIONS

Provides a practical understanding of developing, implementing, and assessing our operating plan and business strategy

                                   
                   

ACCOUNTING & FINANCIAL

Provides guidance in evaluating our financial reporting obligations, financial statements, capital structure, and internal controls

                                                   
           

GLOBAL BUSINESS

Helps oversee the management of our global operations and

understands operating in foreign countries

                                   
                   

PUBLIC COMPANY

Helps oversee an ever-changing mix of strategic, operational, and

compliance-related matters as well as drive business strategy, growth, performance, and to create shareholder value

                                   
           

ADDITIONAL PUBLIC BOARD(S)

Current or previous service on additional Boards of public companies

                                   
                   

C-SUITE

Current or previous experience as a CEO, CFO or other member of the C-Suite

                                   
           

MERGERS & ACQUISITIONS

Provides insight into developing and implementing strategies for growing our business

                                   
                   

CORPORATE GOVERNANCE

Supports our goals of strong Board and management accountability, transparency, and protection of shareholder interests

                                       
           

INDUSTRY & END MARKET EXPERTISE

Provides deep experience and insight into end markets, customers and industries that are strategically important to the Company

                             
                   

TECHNOLOGY

Helps drive technological innovation and assists in overseeing our technology-related security risks

                                                       

ETHNIC, GENDER, NATIONAL ORIGIN, OR OTHER DIVERSITY

Provides diversity of background and life experience, which together with diverse thought and opinion improves the quality of decision making; helps the Board respond effectively to the needs of customers, shareholders, employees, suppliers, and other stakeholders, enhancing the Company’s business performance.

                                                   

 

See director biographies beginning on page 11 for further detail.

 

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Our Board recognizes the importance of Board refreshment to ensure that the directors possess a composite set of skills, experience, and qualifications necessary to successfully oversee the Company’s strategic priorities. We do not believe in a specific limit for the overall length of time an independent director may serve; however, we believe that the tenure spectrum of our directors should provide an effective mix of deep knowledge and new perspectives. Our Governance Guidelines provide that a director is expected to retire on or before the annual meeting immediately following a director’s 72nd birthday. We periodically rotate the chairs of each of our committees to ensure continued diverse perspectives. As a result of our refreshment, as of our record date for the Annual Meeting, the average tenure of our independent directors is 6.25 years, the average age of our independent directors is 61 years, and forty-four percent of our directors represent gender and racial or ethnic diversity.

 

 

BOARD DIVERSITY MATRIX (as of January 19, 2024)

 

Total Number of Directors

  9
         
        Female           Male             Non-Binary          Did Not Disclose
Gender
   

Part I: Gender Identity

   
       

Directors

 

2

 

7

 

  

   

Part II: Demographic Background

   
       

African American or Black

 

 

1

 

  

         

Alaskan Native or Native American

 

 

 

  

       

Asian

 

 

1

 

  

         

Hispanic or Latinx

 

 

 

  

       

Native Hawaiian or Pacific Islander

 

 

 

  

         

White

 

2

 

5

 

  

       

Two or More Races or Ethnicities

 

 

 

  

       

LGBTQ+

 

 

 

  

         

Did Not Disclose Demographic Background

 

 

 

  

   

Directors who are Military Veterans

 

1

   

Directors with Disabilities

 

0

In determining whether to recommend a director for re-election, the Governance and Sustainability Committee considers, among other attributes, the director’s skills and expertise, participation in and contributions to the activities of the Board, the results of the annual Board evaluation, and past meeting attendance.

The name and age (as of the Annual Meeting) of each of the four nominees for election as directors, as well as present directors whose terms will continue after the Annual Meeting, are listed in the next section, together with his or her principal occupation for at least the past five years, the year each became a director of the Company and certain other relevant information.

Proxies that are duly executed and properly submitted but do not withhold the authority to vote for any or all of the nominees will be voted for the election as directors of all of the nominees named below. At this time, the Board is not aware of any reason that would prevent any nominee from being a candidate at the Annual Meeting. However, in the event any one or more of such nominees becomes unavailable for election, proxies will be voted in accordance with the best judgment of the proxy holder.

 

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Nominee for Terms Expiring in 2026

 

 

   LOGO   

 

 

CHRISTOPHER L. MAPES

 

    
 

Director Since: 2024                    

 

Age: 62

 

Committees:

 

•  Audit

  

Other Public Directorships (current in bold):

 

•  Lincoln Electric Holdings, Inc.
(Nasdaq: LECO)

 

•  The Timken Company (NYSE: TKR)

 

•  A.O. Smith Corporation (NYSE: AOS)

 

    

Mr. Mapes retired as president and chief executive officer of Lincoln Electric Holdings, Inc. (Nasdaq: LECO) (global manufacturer of welding and automation solutions) in December 2023, a position he held since December 2012 after serving as chief operating officer in 2011. Prior to that, he served as executive vice president and a divisional president of A.O. Smith Corporation (NYSE: AOS) (residential and commercial water heater and boiler manufacturing) until its divestiture in 2011. He continues to serve as executive chairman of Lincoln Electric, a position he has held since 2013.

Mr. Mapes’ experience spans more than 35 years of industrial manufacturing experience in large, global, publicly-traded companies. Beyond his keen understanding of the manufacturing industry, Mr. Mapes has significant experience developing and implementing strategies related to operating plans, merger and acquisitions, global operations and international compliance. Additionally, his service on other public boards enables Mr. Mapes to provide meaningful insight on corporate governance and financial matters.

Based on his strong background, experience and performance in senior leadership roles and as a director, our Board believes Mr. Mapes represents each of the key skills and qualifications noted for him in the Director Skills Matrix on page 9, and will continue to effectively serve our Board, our business, our management team and our shareholders.

 

 

 

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Nominees for Terms Expiring in 2027

 

 

   LOGO   

 

 

FRANK M. JAEHNERT

 

    
 

Director Since: 2012                    

 

Age: 66

 

Committees:

 

•  Audit (Chair)

 

•  Executive

 

  

Other Public Directorships (current in bold):

 

•  Itron, Inc. (Nasdaq: ITRI)

 

•  Briggs & Stratton Corporation
(formerly NYSE: BGG) (2014-2021)

    

Now retired, Mr. Jaehnert served as chief executive officer and president of Brady Corporation (NYSE: BRC) (high performance labels, signage, printers, and software) from 2003 through 2013. Previously, he served as a divisional president and chief financial officer of Brady Corporation and held various financial positions in Germany and in the United States for Robert Bosch GmbH (international manufacturer). Mr. Jaehnert has earned a NACD Directorship Certification and was named as an NACD Directorship 100 honoree for the year 2020. Mr. Jaehnert has also earned a Certificate in Cybersecurity through the NACD/Software Institute of Carnegie Mellon University in 2023.

Mr. Jaehnert has served in the public company leadership capacities noted above as well as other significant leadership roles at global companies. His experience includes leading and overseeing corporate strategy, profitable growth, mergers and acquisitions, corporate governance, and financial performance, including corporate finance, financial reporting, risk management, capital allocation and strategic planning. Additionally, Mr. Jaehnert has significant experience, perspective and insight from his service and leadership with other public company boards.

Based on his strong background, experience and performance in senior leadership roles and as a director, our Board believes Mr. Jaehnert represents each of the key skills and qualifications noted for him in the Director Skills Matrix on page 9, and will continue to effectively serve our Board, our business, our management team and our shareholders.

 

 

 

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   LOGO   

 

 

GINGER M. JONES

 

    
 

Director Since: 2019                    

 

Age: 59

 

Committees:

 

•  Audit

 

•  Compensation

 

  

Other Public Directorships (current in bold):

 

•  Tronx Limited (NYSE: TROX)

 

•  Holley (NYSE: HLLY)

 

•  Libbey, Inc. (formerly NYSE: LBY)
(2013-2020)

    

Now retired, Ms. Jones served as the senior vice president and chief financial officer of Cooper Tire & Rubber Company (NYSE: CTB) (tire manufacturing), from 2014 until her retirement in 2018. Prior to joining Cooper, Ms. Jones served as chief financial officer of Plexus Corporation (Nasdaq: PLXS) (electronics manufacturing) from 2004 to 2014.

Ms. Jones brings 30 years of accounting and finance skills, in industries ranging from consumer goods, industrial manufacturing, supply chain management and software. In addition to her strong financial acumen, Ms. Jones has meaningful expertise in business strategy and operations, mergers and acquisitions, corporate governance, and understands the unique challenges that come with operating a global business. Ms. Jones’ also brings her experience on previous and currently held board positions on other publicly traded companies, including with audit committees.

Based on her strong background, experience and performance in senior leadership roles and as a director, our Board believes Ms. Jones represents each of the key skills and qualifications noted for her in the Director Skills Matrix on page 9, and will continue to effectively serve our Board, our business, our management team and our shareholders.

 

 

 

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   LOGO   

 

 

 

MILTON M. MORRIS

 

    
 

Director Since: 2022                            

 

Age: 53

 

Committees:

 

•  Audit

 

•  Governance and Sustainability

 

  

Other Public Directorships (current in bold):

 

•  Embecta Corp. (Nasdaq: EMBC)

 

•  Myomo, Inc. (NYSE: MYO)

    

Dr. Morris currently serves as a Principal of MEHL BioMedical, LLC (biomedical consulting services), where he has provided consulting services to start-up companies in the biomedical device industry since 2015. Dr. Morris retired from Neuspera Medical Inc., a privately held company (medical technology), where he had served as president and chief executive officer from 2015 to 2022. He previously was the senior vice president, research and development of Cyberonics, Inc., maker of the Vagus Nerve Stimulation (VNS Therapy) System from 2009 through 2014. His prior work experience also includes serving as a director, program management and operations of InnerPulse, Inc., (medical technology), as well as director, marketing and arrythmia franchise leader of Boston Scientific Corporation (NYSE: BSX) (multinational medical device manufacturing).

Dr. Morris brings to the Board significant new product development experiences in the medical device markets. Dr. Morris’s robust business leadership experience gives him expertise in global decentralized organizations, mergers and acquisitions, international compliance, and affords the Board a unique perspective in identifying strategic and tactical risks attendant to the medical device market.

Based on his strong background, experience and performance in senior leadership roles and as a director, our Board believes Dr. Morris represents each of the key skills and qualifications noted for him in the Director Skills Matrix on page 9, and will continue to effectively serve our Board, our business, our management team and our shareholders.

 

 

 

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Present Directors with Terms Expiring in 2025

 

 

   LOGO   

 

 

 

JOHN A. DEFORD

 

    
 

Director Since: 2020                            

 

Age: 62

 

Committees:

 

•  Audit

 

•  Governance and
Sustainability

 

  

Other Public Directorships (current in bold):

 

•  Globus Medical Inc. (NYSE: GMED)

 

•  Maravai LifeSciences Holdings, Inc. (Nasdaq: MRVI)

 

•  NuVasive, Inc. (Nasdaq: NUVA)
(2018-2023)

    

Dr. DeFord is currently chairman, chief executive officer and president of Samothrace Medical Innovations, Inc., a privately held medical technology company, which he co-founded in March 2022. Previously, Dr. DeFord served as executive vice president and chief technology officer of Becton, Dickinson and Company (NYSE: BDX) (medical technology and manufacturing) from 2017 until 2021. Prior to that, he was senior vice president of Science, Technology and Clinical Affairs for C.R. Bard, Inc. (medical technology manufacturing), which was acquired by BDX in 2017, managing director of Early Stage Partners, a venture capital fund, and president and chief executive officer of Cook Incorporated, a privately held medical device manufacturer.

Dr. DeFord brings a wealth of diverse experiences resulting from serving in various leadership positions over the past 35 years, he holds 14 U.S. patents, is the author of numerous peer-reviewed scientific papers, and has a Ph.D in Electrical Engineering. His experience also includes leading and overseeing mergers and acquisitions and corporate governance initiatives. Dr. DeFord’s expertise in the medical device sector and executive experience in multi-billion dollar, global companies enables him to make significant contributions to discussions regarding the Company’s strategy and growth.

 

 

 

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   LOGO   

 

 

 

JENNIFER PARMENTIER

 

    
 

Director Since: 2020                    

 

Age: 56

 

Committees:

 

•  Governance and Sustainability (Chair)

 

•  Audit

 

•  Executive

 

  

Other Public Directorships (current in bold):

 

•  Parker-Hannifin Corp. (NYSE: PH)

    

Ms. Parmentier has served as chief executive officer of Parker-Hannifin Corp. (NYSE: PH) (motion control manufacturing) since January 2023. Immediately prior to her current role, Ms. Parmentier served as the chief operating officer at Parker-Hannifin from August 2021 to January 2023. She also served as vice president and president of Motion Systems Group from February 2019 to August 2021, vice president and president of the Engineered Materials Group from September 2015 to February 2019, and general manager for the Hose Products Division in the Fluid Connectors Group since joining Parker-Hannifin in 2008.

Ms. Parmentier brings strong international operating experience in the industrial sector to the Board. Her experiences, specifically her career with Parker-Hannifin, which serves a diverse market base spanning mobile, industrial, and aerospace clients, enables her to make significant contributions to discussions regarding the Company’s diverse and complex global organization. She also has extensive experience in financial planning and performance, mergers and acquisitions, employee engagement, management of corporate initiatives and other corporate governance matters.

 

 

 

 

   LOGO   

 

 

 

VICTOR L. RICHEY, JR.

 

    
 

Director Since: 2010                    

 

Age: 66

 

Committees:

 

•  Compensation (Chair)

 

•  Executive

 

  

Other Public Directorships (current in bold):

 

•  Thermon Group Holdings, Inc. (NYSE: THR)

 

•  ESCO Technologies Inc. (NYSE: ESE)
(2006-2023)

    

Now retired, Mr. Richey served as executive chair of the board of ESCO Technologies Inc. (NYSE: ESE) (fluid management manufacturing) from January 2023 to June 2023. He previously served as ESCO Technologies’ chair of the board, president, and chief executive officer from 2003 to 2022.

Mr. Richey has extensive experience in senior leadership of a diversified global producer and marketer of technology, and he has significant executive management and board experience at public and private companies within several of our end markets, including the semiconductor industry, which provides our Board with a breadth of skills critical to its oversight responsibility. He has also demonstrated meaningful expertise in mergers and acquisitions and the ability to provide accountability, transparency and protection of shareholder interests.

 

 

 

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Present Directors with Terms Expiring in 2026

 

 

   LOGO   

 

 

 

MICHAEL J. MERRIMAN, JR.

 

    
 

Director Since: 2008                    

 

Age: 67

 

Committees:

 

•  Executive (Chair)

 

•  Compensation

 

  

Other Public Directorships (current in bold):

 

•  Regis Corporation (NYSE: RGS)

 

•  Invacare Corporation (NYSE: IVC)
(2014-2018), (2022-2023)

 

•  OMNOVA Solutions Inc. (formerly, NYSE: OMN) (2008-2020)

    

Mr. Merriman has served as Chair of our Board since February 2018. He is a business consultant for Product Launch Ventures, LLC, a company that he founded in 2004 to pursue consumer product opportunities and provide business advisory services. Previously, Mr. Merriman was an operating and strategic advisor of Resilience Capital Partners LLC, a private equity firm, from 2008 until 2017. Prior to that, Mr. Merriman served as president and chief executive officer of Lamson & Sessions Co. (formerly, NYSE: LMS) (thermoplastic conduit manufacturing) and as senior vice president and chief financial officer of American Greetings Corporation (formerly, NYSE: AM) (greeting card manufacture and design).

Mr. Merriman’s prior roles as a public company chief executive officer and chief financial officer, his history of service on the multiple public company boards, and his experience at Resilience all provide him with valuable experience and significant knowledge in the areas of executive management, strategy, corporate governance, acquisitions and divestitures, finance and financial reporting, product development expertise, and investor relations. Mr. Merriman has extensive finance, financial reporting, and accounting expertise and was formerly a certified public accountant, which provides the Board with valuable financial expertise.

 

 

 

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   LOGO   

 

 

 

SUNDARAM NAGARAJAN

 

    
 

Director Since: 2019                    

 

Age: 61

 

Committees:

 

•  Executive

 

  

Other Public Directorships (current in bold):

 

•  Wesco International,Inc. (NYSE: WCC)

 

•  Sonoco Products Company (NYSE: SON)
(2015-2022)

    

Mr. Nagarajan has served as Nordson’s President and Chief Executive Officer since August, 2019. He joined Nordson following a 23-year career with Illinois Tool Works Inc. (NYSE: ITW), a FORTUNE® 200 manufacturer of industrial products and equipment. In his last role at Illinois Tool Works, Mr. Nagarajan served as executive vice president, ITW Automotive OEM Segment, a position he held since 2015. Prior to that he held various executive and managerial roles of increasing responsibility.

Mr. Nagarajan is the only member of Nordson’s management serving on our Board. He brings to the Board significant global manufacturing company experience, with a focus on creating value for customers through innovation and industry-leading excellence in quality and delivery. Mr. Nagarajan has an intimate understanding of management, leadership, strategy development and day-to-day operations of global companies. He has been instrumental in driving and implementing strategies to strengthen our financial performance, culture, values, purpose, employee engagement, customer experience, profitable growth and management of ESG initiatives, cybersecurity and other significant risks and opportunities.

 

 

 

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No shareholder or group that beneficially owns 1% or more of our outstanding common shares has recommended a candidate for election as a director at the 2024 Annual Meeting.

Cumulative Voting

Voting for directors will be cumulative if any shareholder provides notice in writing to the President, an Executive Vice President, or the Secretary of Nordson of a desire to have cumulative voting. The notice must be received at least 48 hours before the time set for the Annual Meeting, and an announcement of the notice must be made at the beginning of the meeting by the Chair or the Secretary, or by or on behalf of the shareholder giving the notice. If cumulative voting is in effect, each shareholder will be entitled to cast, in the election of directors, a number of votes equal to the product of the number of directors to be elected multiplied by the number of shares that the shareholder is voting. Shareholders may cast all of these votes for one nominee or distribute them among several nominees, as they see fit. If cumulative voting is in effect, shares represented by each properly submitted proxy will also be voted on a cumulative basis, with the votes distributed among the nominees in accordance with the judgment of the persons named on the proxy/voting instruction card.

To date, we have not received a notice from any shareholder of his, her, or its intention to request cumulative voting.

Majority Voting Policy

The Director nominees receiving the greatest number of votes will be elected (plurality standard). However, our majority voting policy states that any Director who fails to receive a majority of the votes cast in his/her favor is required to submit his/her resignation to the Board. The Governance and Sustainability Committee of the Board would then consider each resignation and determine whether to accept or reject it. Abstentions and broker non-votes will have no effect on the election of a Director and are not counted under our majority voting policy.

Required Vote

The election of directors requires the affirmative vote of the holders of a plurality of the shares of common stock voting at the Annual Meeting. Under the plurality voting standard, the nominees receiving the most “for” votes will be elected, regardless of whether any nominee received a majority of the votes. Only shares that are voted in favor of a particular nominee will be counted toward the nominee’s achievement of a plurality. Shares present at the meeting that are not voted for a particular nominee or shares present by proxy where the shareholder properly withheld authority to vote for the nominee (including broker non-votes) will not be counted toward the nominee’s achievement of a plurality, but will be counted for quorum purposes.

RECOMMENDATION REGARDING PROPOSAL 1:

 

 

LOGO

The Board of Directors recommends that

you vote “FOR” all four nominees as directors.

Proxies received by the Board will be voted for all nominees

unless shareholders specify a contrary vote.

 

 

 

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CORPORATE GOVERNANCE

Corporate Governance Documents

The following corporate governance documents are available at: https://www.nordson.com/en/about-us/corporate-governance and https://www.nordson.com/en/about-us/corporate-responsibility.

 

    Governance Guidelines

 

    Committee Charters

 

    Conflict Minerals Policy

 

    Related Persons Transaction Policy

 

    Share Ownership Guidelines

 

    Code of Ethics and Business Conduct

 

    Suppliers Code of Conduct
 

 

The Governance Guidelines contain general principles regarding the functions of Nordson’s Board and Board committees and the Director Recruitment and Performance Guidelines. The Annual Report to Shareholders, which includes the Annual Report on Form 10-K for the fiscal year ended October 31, 2023 (the “2023 Annual Report”) and this Proxy Statement, are available at: www.nordson.com/investors/financials/annual-reports. Upon request, copies of the Annual Report to Shareholders will be mailed to you (at no charge) by contacting Nordson Corporation, Attn: Corporate Communications, 28601 Clemens Road, Westlake, Ohio 44145. The information in, or that can be accessed through, our internet site is not part of this Proxy Statement, and all references in this document to our internet site are for informational or reference purposes only.

Code of Ethics and Business Conduct

We have a Code of Ethics and Business Conduct (the “Code”) that applies to all Nordson directors, officers, employees, and its subsidiaries, wherever located. Our Code contains the general guidelines and principles for conducting Nordson’s business consistent with the highest standards of business ethics. Our Code embodies our five guiding values, which form the foundation of our Company: Integrity, Excellence, Passion for Our Customers, Energy, and Respect for People. Our employees are expected to report all suspected violations of Company policies and the law, including incidents of harassment or discrimination, directly to their managers, human resources, or the Chief Compliance Officer. We also provide confidential, anonymous reporting through our third-party helpline, which is available 24 hours per day, seven days per week via a toll-free telephone line or the internet. We provide interpreters who speak the reporter’s preferred language. We will take appropriate steps to investigate all reports we receive through these channels and will take appropriate action. Under no circumstances will our employees be subject to any disciplinary or retaliatory action for reporting, in good faith, a possible violation of our Code or applicable law or for cooperating in any investigation of a possible violation.

Shareholder Engagement, Environmental and Social Governance, and Sustainability

We recognize that managing our economic, environmental, social, and governance impacts enhances our ability to deliver results over the long term for shareholders, employees, our communities, and other stakeholders. Our Board oversees our corporate responsibility efforts, while cross functional teams of senior management drive these and our sustainability efforts throughout the Company. Further information about our Corporate Responsibility and Sustainability initiatives can be found on our website at www.nordson.com/en/our-company/corporate-responsibility.

Sharing the Nordson story and being accessible to our shareholders is a priority for Nordson. In 2023, we engaged over 200 institutional investors and analysts through phone calls, virtual and in-person conferences, and virtual and in-person road trips hosted by sell-side research analysts. Key themes from these conversations included the diversity of our end markets and geographies, growth drivers of our business, the ongoing deployment of the NBS Next growth framework and capital deployment, including our acquisition strategy.

In November 2023, Nordson published its latest Environmental, Social and Governance (“ESG”) report. The reports reflect an intentional, systemic approach to organizing and communicating our commitments, accomplishments and aspirations through an ESG lens. To view the reports, visit https://www.nordson.com/en/our-company/corporate-responsibility.

 

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Director Independence

In accordance with the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), and our Governance Guidelines, the Board must consist of a majority of independent directors. The Board has determined that all of our current directors, except Mr. Nagarajan, and our former director, Ms. Puma, who retired from the Board effective November 1, 2023, are or were, as applicable, independent under these standards. Mr. Nagarajan is not an independent director because he serves as our President and Chief Executive Officer. Our Governance Guidelines also require that our Audit, Compensation, and Governance and Sustainability committees each be comprised of independent directors who meet all the independence and experience requirements of Nasdaq.

In determining independence, each year the Board affirmatively determines, among other things, whether directors have a “material relationship” with Nordson. When assessing the “materiality” of a director’s relationship with Nordson, the Board considers all relevant facts and circumstances, including a consideration of the persons or organizations with which the director has an affiliation. Where an affiliation is present, the Board considers the frequency or regularity of the provision of services, whether the services are being carried out at arm’s length in the ordinary course of business and whether the services are being provided substantially on the same terms to Nordson as those prevailing at the time from unrelated parties for comparable transactions. With respect to Audit Committee members, the Board must affirmatively determine that these directors, in addition to the general independence requirements described above, satisfy certain financial education requirements and do not, among other things, accept any consulting, advisory, or other compensatory fee from Nordson. With respect to Compensation Committee members, the Board must consider, in addition to the general independence requirements described above, the source of compensation of the members, including any consulting, advisory or other compensatory fee paid by Nordson to these directors, and whether the directors are affiliated with Nordson, a subsidiary of Nordson or an affiliate of a subsidiary of Nordson.

 

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As part of our commitment to ensuring director independence, and in accordance with out Related Person Transaction Policy (described in more detail below) we have a monitoring and reporting program with respect of products supplied by, or to, a company that may employ a director or may have a director serving on its board to identify and address any potential conflicts of interest resulting from our relationship. In 2023, all transactions and relationships evaluated by the Board involved only immaterial ordinary course of business purchase and sale of goods and services at companies where directors serve as an officer or director. The table below more particularly describes the transactions and relationships the Board considered in the 2023 fiscal year and, in each case, the amounts involved were less than the greater of $1 million or 1% of our and the recipient’s respective annual revenues in each of the last three years.

 

  Director / Nominee         Entity and Relationship   Transactions  

 

% of Entity’s Annual

Revenues in each of
the last 3 years

 

    
         

John A. DeFord

 

Globus Medical Inc.

Director

  We sell products to Globus Medical   Less than 1%    

 

 

NuVasive, Inc.

Former Director

  We sell products to NuVasive, Inc.   Less than 1%    

 

         

Frank M. Jaehnert

 

Itron, Inc.

Director

  We sell products to Itron, Inc.   Less than 1%    

 

         

Ginger M. Jones

 

Tronox Holdings PLC

Director

  We sell products to Tronox Holdings PLC   Less than 1%    

 

         

Michael J. Merriman, Jr.

 

Regis Corporation

Director

  We sell products to Regis Corporation   Less than 1%    

 

         

Sundaram Nagarajan

 

Wesco International, Inc.

Director

  We sell products to and purchase products from Wesco International   Less than 1%    

 

         

Jennifer Parmentier

 

Parker-Hannifin Corporation

Director and Chief Executive Officer

  We sell products to and purchase products from Parker-Hannifin Corporation.   Less than 1%    

 

         

Mary G. Puma

 

Axcelis Technologies, Inc.

Retired President and CEO;

Chair of the Board of Directors

  We sell products to Axcelis Technologies, Inc.   Less than 1%    

 

         

Victor L. Richey, Jr.

 

ESCO Technologies Inc.

Retired Director, President and Chief Executive Officer

  We sell products to and purchase products from ESCO Technologies Inc.   Less than 1%    

 

Based on this review and the information provided in response to annual questionnaires completed by each independent director regarding employment, business, familial, compensation, and other relationships with the Company and management, the Board has determined that every director that served during 2023 and director nominee (i) has no material relationship with Nordson, (ii) satisfies all of the Nasdaq independence standards and our independence standards, and (iii) is independent, with the exception of Sundaram Nagarajan, who is an employee director. The Board has also determined that each member and chair of its Audit, Compensation, and Governance and Sustainability committees are independent directors. For more information on our review standards for related party transactions, see “Review of Transactions with Related Persons” below.

Review and Approval of Transactions with Related Persons

The Board has adopted a written policy regarding the review and approval of transactions between the Company and its subsidiaries and certain persons that are required to be disclosed in proxy statements, which are commonly referred to as “related persons transactions.” Related persons include our directors, nominees for election as a director, persons controlling over 5% of our common shares, executive officers, and the immediate family members of each of these individuals. Under the written policy, Nordson’s Audit Committee is responsible for reviewing any related persons transactions and will consider factors it deems appropriate, including but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated

 

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third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction. To the extent any member of the Audit Committee is involved in any transaction under review, that member recuses him or herself.

Our monitoring and reporting program with respect to transactions involving products supplied by, or to, a company that may employ a director or may have a director serving on its board includes all relevant transactions collectively over $120,000 in one annual period. Under the program, we reviewed all relevant transactions with all of these companies for 2023. Our Audit Committee determined that any related persons transactions were neither material nor significant to either Nordson or the respective director’s company based on our written policy and the guidelines set forth in Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All transactions were conducted at arms-length. Additional information on the related persons transaction review is set forth under the caption “Director Independence” above.

Compensation Committee Interlocks and Insider Participation

There are no matters relating to compensation committee interlocks or insider participation that we are required to report.

Director Qualifications

We believe that the Board, as a whole, should reflect a combination of skills, professional experience, and diversity of backgrounds necessary to oversee the Company’s business. The Governance and Sustainability Committee periodically evaluates the composition of the Board to assess the skills and experience that are currently represented on the Board, as well as the skills and experience that the Board will find valuable in the future, considering the Company’s current situation and strategic plans. Through its selection and vetting process, the Governance and Sustainability Committee seeks not only to identify directors that meet desired qualifications, but also to enhance the diversity of the Board in areas such as professional experience, race, gender, ethnicity, and age, and to obtain a variety of occupational, educational, and personal backgrounds on the Board in order to provide a range of viewpoints and perspectives. This focus on identifying and nominating qualified directors from diverse backgrounds has enabled the Company to assemble a Board comprised of high caliber directors with a range of expertise and viewpoints. Forty-four percent of our directors are women or racially or ethnically diverse individuals.

Consideration of Director Candidates Recommended by Shareholders

Under its charter, the Governance and Sustainability Committee is responsible for reviewing shareholder nominations of directors. The Governance and Sustainability Committee’s considers shareholder-nominated candidates on the same basis and in the same manner as it considers recommendations from other sources. For more information on how a shareholder can recommend a candidate, see the “Questions and Answers About the Annual Meeting and These Proxy Materials” section of this proxy statement.

Board Leadership Structure

Our Governance Guidelines require us to have either an independent Chair of the Board or a presiding independent director if the Chair is not an independent director. The Governance Guidelines set forth the responsibilities of the Chair of the Board and the Presiding Director when the Chair of the Board is not an independent director.

At present, we have an independent Chair of the Board separate from the Chief Executive Officer position.

We separated the Chair of the Board and Chief Executive Officer positions to further enhance independent oversight of management and to allow our Chief Executive Officer to focus his time and energy on setting the strategic direction for the Company, overseeing daily operations, engaging with external constituents, developing and mentoring our future leaders, and promoting employee engagement at all levels of the organization. Our independent Chair of the Board leads the Board in the performance of its duties by establishing agendas and

 

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ensuring appropriate meeting content (in collaboration with our Chief Executive Officer), presiding during regularly held executive sessions with our independent directors, actively engaging with all independent directors and our Chief Executive Officer between Board meetings, and providing overall guidance to our Chief Executive Officer as to the Board’s views and perspectives, particularly on the strategic direction of the Company.

Meetings of the Board of Directors

The Board held eight meetings and our committees held 17 meetings during fiscal year 2023. Nordson’s policy requires attendance and active participation by directors at Board and committee meetings. In fiscal year 2023, each director who served during the year attended at least 75% of the aggregate of (i) the total number of meetings of the Board held during the period for which he or she served as a director and (ii) the total number of meetings held by all committees on which he or she served (during the period that he or she served). Directors are encouraged to attend the Annual Meeting. All of Nordson’s directors serving at the time attended the 2023 Annual Meeting of Shareholders held on February 28, 2023.

Executive Sessions of Independent Directors

Pursuant to our Governance Guidelines, independent directors meet in regularly scheduled executive sessions without management. The Chair of the Board (or, when our Chair is not an independent director, the Presiding Director) chairs all regularly scheduled executive sessions of the Board, and also has authority to convene meetings of the independent directors at any time with appropriate notice.

Risk Oversight

The Board plays an active role, both as a whole and also at the committee level, in the oversight and management of the Company’s risks. Management is responsible for the Company’s day-to-day risk management activities and oversees areas of material risk, which include operational, financial, legal and regulatory, human capital, information technology, cybersecurity and physical security, ESG and strategic and reputational risks. The Company has established an enterprise risk framework for identifying, aggregating, and evaluating risk across the enterprise. The risk framework is integrated with the Company’s annual planning, audit scoping, and control evaluation management by its internal auditor.

The involvement of the Board in assessing our business strategy at least annually is a key part of its oversight of risk management, its assessment of management’s appetite for risk, and its determination of what constitutes an appropriate level of risk for Nordson. The Board regularly receives updates from management and outside advisors regarding this oversight responsibility.

In addition, our Board committees each oversee certain aspects of risk management as presented below:

 

Audit Committee          Compensation Committee         

Governance and Sustainability

Committee

Risks associated with financial matters, particularly financial reporting, accounting, disclosure, cybersecurity, and internal controls.

 

    

Risks associated with the establishment and administration of executive compensation and equity-based compensation programs, performance management of officers, and human capital management.

 

    

Risks associated with Board

independence, effectiveness and organization, director succession and ESG oversight.

 

The Audit and Compensation Committees also rely on the advice and counsel of our independent auditors and independent compensation consultant, respectively, to raise awareness of any risks that may arise during their regular reviews of our financial statements, audit work, and executive compensation policies and practices.

Like all businesses, we face cybersecurity threats, as we rely on information systems and the internet to conduct our business activities. In light of the pervasive and increasing threat from cyberattacks, the Audit Committee, with input from management, identifies, assesses and monitors the Company’s cybersecurity and other information

 

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technology risks and threats and the measures implemented by the Company to mitigate and prevent cyberattacks, and the Board receives periodic reports from the Audit Committee on the Company’s cybersecurity program.

The Board receives regular updates from management regarding matters critical to the business, which may include the safety of our workforce, supply chain interruptions, material availability, labor shortages and potential financial implications of all these issues.

While our Governance and Sustainability Committee has primary oversight of ESG matters for the Company, certain aspects of risk oversight related to ESG matters fall to the Board or to other committees, e.g., Audit (financial, environmental, and regulatory under our Enterprise Risk Management program), Compensation (human capital), and Governance and Sustainability (governance) Committees.

Senior management attends Board and committee meetings at the invitation of the Board or its committees, respectively, and is available to address any questions or concerns raised by the Board on risk management and any other matters.

The Board is updated on each committee’s risk oversight and other activities via meeting reports from each committee chair to the full Board at each Board meeting.

The Board’s Role in Talent Development

A primary responsibility of the Board is to ensure that we have the appropriate management talent to successfully execute our strategies. Our Board believes that effective talent development is critical to Nordson’s continued success. Our Board’s involvement in leadership development and succession planning is systematic and ongoing. The Board plans for CEO succession and oversees management’s planning for succession of other key executive positions. Our Board calendar includes at least one meeting each year during which the Board conducts a detailed review of the Company’s talent strategies, leadership pipeline, and succession plans for key executive positions. The Compensation Committee oversees the process of succession planning and implements programs to retain and motivate key talent. To assist the Board, the CEO annually provides the Board with an in-depth assessment of senior managers and their potential to succeed to the position of CEO or other key executive positions.

Self-Assessments

On a regular basis, the Board conducts a self-assessment of the Board as a whole to determine, among other matters, whether the Board is functioning effectively. The independent directors also undertake a peer assessment of other independent directors as part of this self-assessment process. Each committee of the Board also conducts a self-assessment of the committee’s effectiveness. The Board considers the results of this process when determining whether incumbent directors continue to demonstrate the attributes that should be reflected on the Board, or whether changes to membership are appropriate.

 

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COMMITTEES OF THE BOARD OF DIRECTORS

The Board has three standing committees – Audit Committee, Compensation Committee, and Governance and Sustainability Committee – and an Executive Committee that convenes on an as-needed basis. The respective committee functions, memberships, and number of meetings held during fiscal year 2023 are listed below. A more detailed discussion of the purposes, duties, and responsibilities of the committees is found in the respective committee charters which are available at: https://www.nordson.com/en/about-us/corporate-governance.

 

   

 

  Audit Committee

   No. of meetings in 2023:  8
Members  

Key Responsibilities

 

 

  Frank M. Jaehnert (Chair)

 

  John A. DeFord

 

  Ginger M. Jones

 

  Christopher L. Mapes

 

  Milton M. Morris

 

•  Review the proposed audits (including both independent and internal audits) for each fiscal year, the results of these audits, and the adequacy of our systems of internal controls over financial reporting;

 

•  Select, retain, compensate, oversee and terminate, if necessary, the independent auditors for each fiscal year;

 

•  Establish and oversee procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters;

 

•  Review, approve and oversee all related-persons transactions; and

 

•  Provide oversight of cyber security risks.

 

Independence/Qualifications

 

•  All Audit Committee members are independent under Nasdaq listing standards, our Governance Guidelines and the heightened independence requirements applicable to audit committee members under SEC rules.

 

•  The Board has determined that Mr. Jaehnert and Ms. Jones each qualify as an “audit committee financial expert” pursuant to SEC rules and each of Mr. Jaehnert and Ms. Jones are independent directors under Nasdaq listing standards.

   

 

  Compensation Committee

   No. of meetings in 2023:  5
Members  

Key Responsibilities

  
 

 

  Victor L. Richey, Jr. (Chair)

 

  Ginger M. Jones

 

  Michael J. Merriman, Jr.

 

  Jennifer A. Parmentier

 

•  Review and approve compensation for our executive officers;

 

•  Administer the incentive and equity participation plans under which we compensate our executive officers;

 

•  Provide oversight to executive talent and management succession planning, other than chief executive officer succession, which is a responsibility of the entire Board; and

 

•  Oversee the strong links between executive compensation and performance of our business by (i) holding executive sessions (without management present) at every regularly scheduled committee meeting; (ii) engaging an independent compensation consultant to advise on executive compensation issues, including peer benchmarking data; (iii) examining peer group compensation structures, goals, and financial performance; and (iv) basing incentive/variable pay on the achievement of financial and operating performance goals to foster alignment with shareholder interests.

 

Independence/Qualifications

 

•  All Compensation Committee members are independent under Nasdaq listing standards and our Governance Guidelines.

   

 

  Governance and Sustainability Committee

   No. of meetings in 2023:  4
Members  

Key Responsibilities

  
 

 

  Jennifer A. Parmentier (Chair)

 

  John A. DeFord

 

  Milton M. Morris

 

•  Assist the Board by identifying individuals qualified to serve as directors, and to recommend to the Board the director nominees for each annual meeting of shareholders;

 

•  Review and recommend to the Board qualifications for committee membership and committee structure and operations;

 

•  Oversee the Company’s strategy for ESG programs;

 

•  Develop and recommend to the Board a set of corporate governance policies and procedures;

 

•  Develop, administer, and oversee the self-assessment process for the Board and its committees;

 

•  Oversee management’s development of an orientation program for new directors; and

 

•  Review director’s compensation.

 

Independence/Qualifications

 

•  All Governance and Sustainability Committee members are independent under Nasdaq listing standards and our Governance Guidelines.

 

 

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The Audit Committee has confirmed Ernst & Young LLP’s independence from management and the Company, including compatibility of non-audit services with the auditors’ independence. The Audit Committee Report to the Board is at page 98 of this Proxy Statement.

 

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DIRECTOR COMPENSATION

Objectives of Director Compensation

Quality non-employee directors are critical to our success. We believe that the two primary duties of non-employee directors are (1) to effectively represent the long-term interests of our shareholders and (2) to provide guidance to management. As such, our compensation program for non-employee directors is designed to meet several key objectives:

 

   

Adequately compensate directors for their responsibilities and time commitments and for the personal liabilities and risks that they face as directors of a public company;

 

   

Attract the highest caliber non-employee directors by offering a compensation program consistent with those at companies of similar size, complexity, and business character;

 

   

Align the interests of directors with our shareholders by providing a significant portion of compensation in equity and requiring directors to own our stock;

 

   

Provide compensation that is simple and transparent to shareholders and reflects corporate governance best practices; and

 

   

Where possible, provide flexibility in the form and timing of payments.

Elements of Director Compensation

We believe that the following features of our director compensation program support the objectives above:

 

   

We provide cash compensation through retainers for Board and committee service, as well as supplemental cash retainers to the Chair of the Board and chairs of our standing Board committees. The supplemental retainers compensate directors for the additional responsibilities and time commitments involved with chair responsibilities.

 

   

We do not provide separate Board and committee meeting fees.

 

   

All of the non-employee directors receive annual awards of restricted share units which vest 100% on the last day of the fiscal year.

 

   

As a practice, we do not grant securities to address any decrease in the market value of equity securities granted as compensation or held, directly or indirectly, by any officer, director, or other employee.

 

   

We pay for, provide, or reimburse directors for expenses incurred to attend Board and committee meetings and director education programs.

 

   

Directors do not have a retirement plan but are afforded business travel and accident insurance coverage.

 

   

Our share ownership guidelines require non-employee directors to own at least five times their annual cash retainer in Nordson common shares.

 

   

Directors are prohibited from pledging or hedging Nordson common shares.

Determining Director Compensation.    The Governance and Sustainability Committee oversees, reviews, and reports to the Board on director compensation. The Governance and Sustainability Committee annually reviews competitive market data for non-employee director compensation and makes recommendations to the Board for its approval. The Governance and Sustainability Committee is assisted in performing its duties by Exequity LLP (“Exequity”), the Compensation Committee’s independent compensation consultant.

Exequity’s review for 2023 consisted of an analysis of competitive market data from a selected peer group of companies approved by the Compensation Committee. The peer group is consistent with the peer group used for the executive compensation review conducted during 2023.

 

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The components and respective amounts of non-employee director compensation for 2023 were:

 

   
ANNUAL DIRECTOR COMPENSATION(1)        ANNUAL CHAIR COMPENSATION

 

LOGO

 

 

Chair of the Board

 

 

 

$100,000

 

 

 

Audit Committee Chair

 

 

 

$20,000

 

 

 

Compensation Committee Chair

 

 

 

$15,000

 

 

 

Governance and Sustainability Committee Chair

 

 

 

$15,000

 

 

(1)

The number of restricted share units granted is determined by dividing the target dollar value by the average of the fourth quarter closing price of Nordson common shares.

Annual Cash Retainer.    The cash retainers are paid in equal quarterly installments. Generally, for directors who join the Board after the commencement of a fiscal year, the annual retainer is prorated based on the number of days remaining in the fiscal year.

Annual Equity Award.    Restricted share unit awards are granted annually and are effective the first business day of the fiscal year. The awards vest 100% on the last day of the fiscal year. If a director retires from the Board prior to the vesting date, restricted share units are forfeited on a pro-rata basis, based on the number of days served prior to retirement. If a director is appointed by the Board or elected by the shareholders after the commencement of a fiscal year, generally, the restricted share unit award is prorated based on the number of days remaining in the fiscal year. If restricted share units are not deferred, then the units and accrued dividend equivalents convert to Nordson common shares on a one-for-one basis on the vesting date.

Deferred Compensation Program.    Under the directors deferred compensation plan, non-employee directors may defer all or a portion of their annual cash retainer into a non-qualified, unfunded deferred compensation account in the form of deferred cash or share equivalent units. Amounts deferred (i) as cash will earn a return based on the 10-year Treasury bill constant maturity interest rate or (ii) as share equivalent units will earn a return based on our common share price and accrued dividend equivalents. We do not pay above market or preferential interest rates under this deferred compensation plan.

Directors may elect to defer the receipt of restricted share units prior to the grant date. If the receipt is deferred, the restricted share units and accrued dividend equivalents will convert to share equivalent units on a one-for-one basis on the vesting date and thereafter are not subject to forfeiture.

After retirement or resignation from our Board, the share equivalent units and any cash retainers that were deferred as share equivalent units are paid out in our common shares in predetermined quarterly installments over a four-year period or in a lump sum, as elected by the director. Any cash retainers that were deferred as cash, and accrued interest thereon, will be paid out in cash in predetermined quarterly installments over a four-year period or in a lump sum, as elected by the director.

Share Ownership Guidelines.    The Board believes that our non-employee directors should have a meaningful ownership interest in the Company and has implemented share ownership guidelines for our non-employee directors. The ownership guidelines require non-employee directors to own a minimum of five times their annual cash retainer in common shares. Shares held in the form of share equivalent units or restricted share units qualify as shares owned under the guidelines. Newly elected directors have five years within which to achieve the share ownership requirement. All non-employee directors currently meet the guidelines, except for Mr. Mapes, Dr. Morris and Ms. Parmentier, who were appointed within the last four years and have five years from the date of their respective appointment to achieve their ownership requirement, per the Governance Guidelines.

 

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Charitable Matching Gifts Program.    Current and retired non-employee directors may participate in our charitable matching gifts program that is available to all current and retired employees. Messrs. Merriman, Morris and Richey, and Mses. Jones and Puma participated in this program in 2023, under which we made matching contributions totaling $125,000 in 2023.

Indemnity Agreements.    To attract and retain highly qualified candidates to serve as our directors, we provide indemnification agreements that are intended to secure protection for our directors contemplated by our Amended Regulations (the “Regulations”) and to the full extent permitted by Ohio law.

Director Compensation Table for Fiscal Year 2023

The following table sets forth the total compensation of each non-employee director for services provided as a director in 2023.

 

 

Name

 

Fees Earned or Paid

in Cash

($) 

 

 

Stock Awards

($)(1)

 

 

All Other

Compensation

($)(2)

 

 

Total

($)

 

   

John A. DeFord

  90,000   164,869 $ 5,727 $ 260,596
   

Frank M. Jaehnert

  110,000   164,869 $ 24,645 $ 299,513
   

Ginger M. Jones

  90,000   164,869 $ 25,589 $ 280,458
   

Michael J. Merriman, Jr.

  190,000   164,869 $ 112,063 $ 466,932
   

Milton M. Morris

  90,000   164,869 $ 15,065 $ 269,934
   

Jennifer A. Parmentier

  92,609   164,869 $ 65 $ 257,542
   

Mary G. Puma

  102,391   164,869 $ 46,837 $ 314,097
   

Victor L. Richey, Jr.

  105,000   164,869 $ 65,493 $ 335,362

 

(1)

This column represents the grant date fair value of the restricted share unit awards as calculated under FASB ASC Topic 718 and does not reflect whether the recipient has actually received a financial gain from these awards. The assumptions made in valuing share awards reported in this column for 2023 are discussed in Note 14 Stock-based Compensation in the “Notes to Consolidated Financial Statements” section of our Form 10-K for 2023. Because the restricted share unit awards vest at the end of each fiscal year, none of our non-employee directors had any awards outstanding as of the end of fiscal 2023.

 

(2)

The following table describes each component of the “All Other Compensation” column of the Director Compensation Table for 2023:

 

 

Name

 

Interest and
dividends on
deferred
compensation
accounts ($)

 

 

Health, life, and
business travel
accident
insurance
benefits ($)

 

 

Charitable
matching
contributions
made by the
Company ($)

 

 

Total All Other
Compensation
($)

 

   

John A. DeFord

$ 5,662 $ 65 $ 0 $ 5,727
   

Frank M. Jaehnert

$ 24,580 $ 65 $ 0 $ 24,645
   

Ginger M. Jones

$ 5,524 $ 65 $ 20,000 $ 25,589
   

Michael J. Merriman, Jr.

$ 62,834 $ 19,229 (a)  $ 30,000 $ 112,063
   

Milton M. Morris

$ 0 $ 65 $ 15,000 $ 15,065
   

Jennifer A. Parmentier

$ 0 $ 65 $ 0 $ 65
   

Mary G. Puma

$ 6,772 $ 65 $ 40,000 $ 46,837
   

Victor L. Richey, Jr.

$ 45,428 $ 65 $ 20,000 $ 65,493

(a) Mr. Merriman receives $19,164 in income for insurance premiums for coverage based on the full COBRA premium value for 2023 because Mr. Merriman participates in our company-sponsored health care plan under a legacy program which affords health care coverage to a non-employee director on the same terms as our employees. No other non-employee directors participate in this legacy, and now discontinued, program.

 

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PROPOSAL 2: RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING OCTOBER 31, 2024

Ernst & Young LLP served as our independent registered public accounting firm for the fiscal year ended October 31, 2023. The Audit Committee has appointed Ernst & Young LLP to serve as our auditors for the fiscal year ending October 31, 2024. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire, and are expected to be available to respond to appropriate shareholder questions. Although ratification of the appointment of the independent auditors is not required by law, the Audit Committee and the Board believe that shareholders should be given the opportunity to express their views on the subject. While not binding on the Audit Committee or the Board, the failure of the shareholders to ratify the appointment of Ernst & Young LLP as our independent auditors would be considered by the Board in determining whether or not to continue the engagement of Ernst & Young LLP. Ultimately, the Audit Committee retains full discretion and will make all determinations with respect to the appointment of independent auditors, whether or not our shareholders ratify the appointment.

As provided in the Audit Committee’s charter, the Audit Committee is responsible for directly appointing, retaining, terminating, and overseeing our independent registered public accounting firm. Our Audit Committee continuously evaluates the independence and effectiveness of Ernst & Young LLP and its personnel, and the cost and quality of its audit and audit-related services.

Pre-Approval of Audit and Non-Audit Services

At the start of each fiscal year, our Audit Committee pre-approves the audit services and audit-related services, if any, together with specific details regarding such services that we anticipate will be required for the fiscal year including, as available, estimated fees. The Audit Committee reviews the services provided to date and actual fees against the estimates and such fee amounts may be updated for presentation at the regularly scheduled meetings of the Audit Committee. Additional pre-approval is required before actual fees for any service can exceed the originally pre-approved amount. The Audit Committee may also revise the list of pre-approved services and related fees from time to time. All of the services described below under the captions “Audit Fees” and “Audit-Related Fees” with respect to fiscal years 2022 and 2023 were approved in accordance with this policy.

If we seek to engage our independent registered public accounting firm for other services that are not considered subject to general approval as described above, then the Audit Committee must approve each specific engagement as well as the estimated fees. The engagement will be presented to the Audit Committee for approval at its next regularly scheduled meeting. If the timing of the project requires an expedited decision, then we may ask the chair of the Audit Committee to approve the engagement. Any approval by the chair is then reported to the full Audit Committee for ratification at the next Audit Committee meeting. In any event, approval of any engagement by the Audit Committee or the chair of the Audit Committee is required before our independent registered public accounting firm may commence any engagement. Additional approval is required before any fees can exceed approved fees for any specifically-approved services.

 

32   |   Nordson Corporation – 2024 Proxy Statement


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Fees Paid to Ernst & Young LLP

The following table shows the fees we paid or accrued for audit and other services provided by Ernst & Young LLP for the fiscal years ended October 31, 2023 and October 31, 2022:

 

 

Services

 

  

 

Fiscal Year 2023

 

  

 

Fiscal Year 2022       

 

   

Audit Fees (1)

   $2,967,500        $2,394,000       
   

Audit-Related Fees (2)

   $   140,000        $     16,000       
   

Tax Fees (3)

   $              0        $     56,000       
   

All Other Fees

   $              0        $              0       
   

Total Fees

   $3,107,500        $2,466,000       

 

(1)

Audit Fees of Ernst & Young LLP consisted of the audit of our annual consolidated financial statements, the quarterly review of interim financial statements, the audit of internal control over financial reporting, and statutory audits required internationally.

 

(2)

Audit-Related Fees include fees related to SEC registration statements.

 

(3)

Tax Fees include professional services rendered in connection with tax transaction diligence services.

RECOMMENDATION REGARDING PROPOSAL 2:

 

 

LOGO

The Board of Directors recommends that

you vote “FOR” ratification of the Audit Committee’s

appointment of Ernst & Young LLP as our independent

registered public accounting firm for the fiscal year ending

October 31, 2024.

 

 

 

Nordson Corporation – 2024 Proxy Statement   |   33


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SECURITY OWNERSHIP OF NORDSON COMMON SHARES BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number and percentage of issued and outstanding Nordson common shares beneficially owned as of January 5, 2024 by directors, director nominees, each named executive officer, and all directors and executive officers as a group. There were 57,115,502 shares of common stock outstanding as of January 5, 2024. The business address for matters related to Nordson for each of our directors, director nominees, and executive officers is 28601 Clemens Road, Westlake, Ohio 44145.

This beneficial ownership information is based on information furnished by the directors, director nominees, and executive officers. Beneficial ownership is determined in accordance with Rule 13d-3 under the Exchange Act for purposes of this Proxy Statement and is not necessarily to be construed as beneficial ownership for other purposes.

 

Name of Beneficial

 

Owner

 

 

 

Total Number
of Shares
Beneficially

Owned(1)

 

 

Percent of         
Outstanding         
Shares         

 

 

Right to         
Acquire
(2)         

 

   

 

John A. DeFord, Director

 

   

 

 

 

 

3,153

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Frank M. Jaehnert, Director

 

   

 

 

 

 

17,812

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Ginger M. Jones, Director

 

   

 

 

 

 

3,853

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Christopher L. Mapes, Director(2)

 

   

 

 

 

 

0

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Michael J. Merriman, Jr., Chair of the Board

 

   

 

 

 

 

26,504

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Milton M. Morris, Director

 

   

 

 

 

 

817

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Jennifer A. Parmentier, Director

 

   

 

 

 

 

1,965

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Victor L. Richey, Jr., Director

 

   

 

 

 

 

18,134

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

—       

 

 

 

   

 

Sundaram Nagarajan, Director, President and Chief Executive Officer

 

   

 

 

 

 

118,667

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

90,020       

 

 

 

   

 

Joseph P. Kelley, Executive Vice President

 

   

 

 

 

 

32,245

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

28,749       

 

 

 

   

 

Jeffrey A. Pembroke, Executive Vice President

 

   

 

 

 

 

58,682

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

42,372       

 

 

 

   

 

Stephen P. Lovass, Executive Vice President

 

   

 

 

 

 

25,650

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

19,025       

 

 

 

   

 

James DeVries, Executive Vice President

 

   

 

 

 

 

95,483

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

47,436       

 

 

 

   

 

Directors, director nominees, and executive officers as a Group (18 persons)

 

   

 

 

 

 

488,879

 

 

 

   

 

 

 

 

*       

 

 

 

   

 

 

 

 

269,925       

 

 

 

 

*

Less than 1%

 

(1)

This column reflects the total number of securities beneficially owned by each of the listed individuals. Except as otherwise stated, beneficial ownership of the shares held by each of the directors, director nominees, and executive officers consists of sole voting power and/or sole investment power, or of voting power and investment power that is shared with the spouse of the director, director nominee, or executive officer, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days after January 5, 2024. More than one person may be deemed to be a beneficial owner of the same securities.

 

(2)

Mr. Mapes was appointed to our Board, effective January 16, 2024, and does not beneficially own any common shares as of January 16, 2024.

Five Percent Beneficial Owners

The following table lists each person we know to be an owner of more than 5% of our common shares as of December 30, 2023.

 

Beneficial Owner

 

  

 

Total Number

of Shares

Beneficially Owned

 

  

 

Percent of  

Outstanding  

Shares 

 

 
   

 

The Vanguard Group, Inc.(1)

 

  

 

6,085,856

 

  

 

 

 

 

10.7%    

 

 

 

 

   

 

BlackRock, Inc.(2)

 

  

 

3,797,338

 

  

 

 

 

 

6.6%    

 

 

 

 

   

 

Jane B. Nord (3)

 

  

 

2,785,058

 

  

 

 

 

 

5.2%    

 

 

 

 

 

34   |   Nordson Corporation – 2024 Proxy Statement


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(1)

The information set forth is based solely on the Schedule 13G/A filed February 9, 2023 with the SEC by The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355, wherein it reported beneficial ownership of 6,085,856 shares and stated that it has sole voting power over none of the reported shares, sole investment power over 5,906,578 of the reported shares, shared voting power over 67,676 of the reported shares, and shared investment power over 179,278 of the reported shares.

 

(2)

The information set forth is based solely on the Schedule 13G/A filed February 1, 2023 with the SEC by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, wherein it reported beneficial ownership of 3797338 shares and stated that it has sole voting power over 3451013 of the reported shares and sole investment power over all of the reported shares.

 

(3)

The information set forth is based solely on the Schedule 13G/A filed January 11, 2023 with the SEC by Jane B. Nord, P.O. Box 457, Oberlin, Ohio 44074, wherein she reported beneficial ownership of 2,988,954 shares and stated that she has sole voting and investment power over 2,234,418 of the reported shares and shared voting and investment power over 754,536 of the reported shares. According to the Schedule 13G/A, the amount of shares beneficially owned by Ms. Nord includes 2,234,418 shares owned by the Jane B. Nord Grantor Trust, of which Jane B. Nord is the sole trustee, and 754,536 shares owned by the Eric T. Nord Trusts, of which Jane B. Nord is a co-trustee.

 

Nordson Corporation – 2024 Proxy Statement   |   35


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PROPOSAL 3: APPROVE, ON AN ADVISORY BASIS,

THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

We are asking shareholders to vote, on an advisory basis, to approve the compensation of our named executive officers, or NEOs, as further described in the “Executive Compensation Discussion and Analysis” section of the Proxy Statement.

We encourage you to read the “Executive Compensation Discussion and Analysis” section of the Proxy Statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives. Also, we encourage you to review the Summary Compensation Table and related compensation tables and narrative of this Proxy Statement, which provide detailed information on the compensation of our named executive officers.

We are asking our shareholders to indicate their support for compensation paid to our named executive officers as described in this Proxy Statement by voting “FOR” the following resolution at the 2024 Annual Meeting:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the Company’s Proxy Statement for the 2024 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Executive Compensation Discussion and Analysis, the executive compensation tables, and related narrative.”

This advisory resolution, commonly referred to as a “Say-on-Pay” resolution, is being presented to our shareholders for a vote pursuant to Section 14A of the Exchange Act and is non-binding on the Board. Although non-binding, the Board and the Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program. The next Say-on-Pay resolution will be voted upon at the 2025 Annual Meeting of Shareholders.

RECOMMENDATION REGARDING PROPOSAL 3:

 

 

LOGO

The Board of Directors recommends that you vote “FOR

the approval, on an advisory basis, of the compensation of

our named executive officers.

 

 

 

36   |   Nordson Corporation – 2024 Proxy Statement


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EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS

All references in this Executive Compensation Discussion and Analysis section of the Proxy Statement to “year” or “years” are references to fiscal years unless otherwise noted. Our fiscal year ends October 31.

This Executive Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy, our compensation decision process, and the elements of our executive compensation program for our named executive officers for 2023. They are:

 

 

Named Executive Officer

 

  

 

Title(1)

 

   
Sundaram Nagarajan    President and Chief Executive Officer
   
Joseph P. Kelley    Executive Vice President and Chief Financial Officer
   
Jeffrey A. Pembroke    Executive Vice President, Industrial Precision Solutions
   
Stephen P. Lovass    Executive Vice President, Medical and Fluid Solutions
   
James E. DeVries    Executive Vice President, Continuous Improvement

 

(1)

This column reflects the title of each NEO as of October 31, 2023.

Effective November 1, 2023, Mr. Kelley became Executive Vice President, Industrial Precision Solutions.

Effective November 1, 2023, Mr. Pembroke retired from the Company.

 

Nordson Corporation – 2024 Proxy Statement   |   37


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The CD&A and the Executive Compensation Tables are organized as follows:

 

     

Section

 

Subject

  

Page

Executive Summary

 

•   Fiscal Year 2023 Performance

  

39

   

•   Long-Term Shareholder Value Creation

  

39

 

•   Say on Pay Results

  

40

 

•   Pay for Performance

  

40

Discussion of our

Compensation Program

 

•   Executive Compensation Philosophy

   42
 

•   Executive Compensation Decision Process

   43
 

•   Elements of Compensation

   46
 

•   CEO Compensation

   47
 

•   Total Target Compensation Mix

   47
 

•   2023 Actions and Analysis

   51
 

 

•   Other Components of Compensation

 

  

 

57

 

 

•   Additional Compensation Policies

   60

Compensation Committee Report

   63

Compensation Tables

and Explanatory Notes

 

•   2023 Summary Compensation Table

   66
 

•   2023 Grants of Plan-Based Awards

   70
 

•   2023 Outstanding Equity Awards

   73
 

•   2023 Options Exercised and Stock Vested

   75
 

•   Non-Qualified Deferred Compensation

   79
 

•   Potential Benefits Upon Termination or Change of Control

   81

 

38   |   Nordson Corporation – 2024 Proxy Statement


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EXECUTIVE SUMMARY

Fiscal Year 2023 Financial Performance

In 2023, our team focused on making a strong Nordson even stronger in the face of new and ongoing challenges. We launched the Ascend Strategy in 2021 to achieve top-tier margins and returns. The strategy aims to deliver $3 billion in sales at a sustained 30%+ EBITDA margin by 2025. With our third consecutive year of record sales topping $2.6 billion and 2023 EBITDA(1) totaling a record $819 million, or 31% of sales, we are well on our way toward meeting these targets.

During 2023, we grew through acquisitions. Our most recent acquisition of ARAG Group was the largest in Nordson history, introducing us to the exciting growth market of precision agriculture. To enable our future growth, Nordson went to the public debt market in September 2023. As a first-time issuer, we achieved investment-grade ratings from both Moody’s and S&P Global. This long-term public debt will provide us the flexibility to execute on the acquisition portion of our capital deployment strategy.

We also increased our dividend by 5% marking the 60th consecutive year of annual dividend increases.

In 2023, we saw momentum accelerating the Ascend Strategy as it delivered results for our employees, customers, communities and investors, despite another year of macro-economic challenges.

 

(1)

See Reconciliation of Financial Measures (Unaudited) following the Questions and Answers About the Annual Meeting and These Proxy Materials section of this Proxy Statement.

Long-Term Shareholder Value Creation

 

LOGO

 

*

“Total Shareholder Return” is defined as (share price end of period—share price start of period + dividends paid) / share price start of period.

 

Nordson Corporation – 2024 Proxy Statement   |   39


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2023 Say-On-Pay Results

Our most recent Say-on-Pay proposal received support from 95% of our shareholders.

 

VOTES CAST IN FAVOR    LOGO

Pay for Performance

2023 Annual Cash Incentive Award

 

   

Performance Measure (Weight)(1)

   Achievement % of Target(2)  
   Corporate       IPS      ATS       MFS   
   

Organic Revenue (40%)

     0%        78%        0%        0%  
   

Base Business Operating Profit (60%)

     0%        131%        0%        0%  

 

(1)

See the Compensation Discussion and Analysis below for how these metrics are defined.

 

(2)

Achievement is shown for actual currency results.

2021—2023 Performance Share Unit Award: Performance Measures

 

         
      2021      2022      2023         
         

Performance
  Measure (Weight)
(1)

   Target      Actual     

Result

(% of
Target) 

     Target      Actual      Result
(% of
Target) 
     Target      Actual      Result
(% of
Target) 
     Total   
         

EPS Growth (40%)

     7     35     200      8     20     200      8     (10 )%          
         

ROIC (30%)

     11     17     200      12     19     200      12     15     155     
         

EBITDA Margin (30%)

     26     31     200      28     31     174      28     30     146         
         

Total Performance

                     200                      192                      90      161

 

(1)

See the Compensation Discussion and Analysis below for how these metrics are defined and weighted.

 

40   |   Nordson Corporation – 2024 Proxy Statement


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2021—2023 Performance Share Unit Award: Relative TSR Modifier

 

   

TSR Relative to S&P 900 Selected Peer Group

  

Pay-for-

Performance Result

 
   

Threshold

(-20 % points from

Total Performance)

 

25th percentile of the

peer group

    

 

 


Target

(no change)

 

 

25th - 75th percentile
of the peer group

 

 

 

 

 
 

   Maximum

(+ 20 % points to
Total Performance)

 

75th percentile of the

peer group

             
   
        S&P 900 Peer Group
TSR%
       
Nordson percentile
rank
 
 
        42%         <25  
         
                   Payout      141%  

 

Nordson Corporation – 2024 Proxy Statement   |   41


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DISCUSSION OF OUR COMPENSATION PROGRAM

Executive Compensation Philosophy

Our compensation plans and programs are designed to drive sustainable results and deliver long-term, superior shareholder returns. We believe that Nordson’s consistent long-term shareholder value creation is attributable to a rigorously-applied management process that has been strengthened by our Ascend strategy and is implemented by a team of talented and committed executives. Accordingly, our executive compensation program underpins and reinforces this process and the performance it generates. We design our executive compensation plans and programs based on three fundamental objectives as set forth below:

 

     

Align with Shareholder Interests

  Pay for Performance   Talent Retention

Executives are primarily rewarded through equity-based, long-term awards, which directly tie to share price movement and the creation of shareholder value.

  A significant portion of compensation is provided through variable, performance based components that are at-risk and based on achievement of designated objectives.   Our program is designed to achieve the Company’s goal of attracting, developing and retaining agile, global business leaders who can establish and drive financial and strategic growth objectives to build long-term shareholder value.

To accomplish these objectives, we adhere to the following practices and procedures:

 

   

What We Do

   What We Do Not Do
   

Pay-for-Performance. A significant portion of executive pay is tied to key financial and operating measures.

  

×  No Significant Perquisites. Our modest perquisites include reimbursement for airline club memberships (up to two); financial and tax planning services (up to $5,000 per year) and executive physicals.

   

 Compensation Consultant. The Compensation Committee engages an independent compensation consultant.

  

×  No Above-Market or Preferential Earnings. We do not pay above-market or preferential earnings on non-qualified deferred compensation.

   

 Share Ownership Guidelines. There are restrictions on sales of vested awards until an executive officer has attained meaningful stock ownership.

  

×  No Hedging, Pledging or Short Sales Transactions. We prohibit directors and executive officers from pledging Nordson securities for loans or engaging in hedging transactions.

   

 Peer Group Benchmarking. We review our compensation peer group annually and make adjustments as needed.

  

×  No Change-in-Control Severance Tax Gross-Ups. We have eliminated tax gross ups on any severance benefits for officers elected after November 1, 2015.

   

 Balanced Compensation Structure. We combine fixed and variable, short-term and long-term, and cash and equity compensation.

  

×  No Single-Trigger for Change-in-Control Severance. Cash severance payments and equity awards provide for “double-trigger” vesting.

   

 Market Competitive Compensation. Our compensation program is competitive within our peer group, which allows us to attract and retain key talent.

  

×  No Dividends or Dividend Equivalents on Unearned Equity. PSUs and RSUs do not earn or pay dividends until the shares are earned.

   

 Capped Award Payouts. We have maximum limits on the amount of annual cash incentives and equity awards that may be paid out.

  

×  No Excessive Dilution. We review and monitor relative to competitive practice ongoing awards, forfeitures, dilutive impact of equity compensation on our shareholders, and annual run rates.

   

 Clawback Provisions in our Equity and Cash Incentive Awards. Our Annual Cash Incentive Award and equity-based compensation awards are subject to recoupment and forfeiture.

  

×  No Share Repricing. We prohibit repricing of underwater stock options and other awards without shareholder approval.

   

 Talent Management. We engage in an ongoing, rigorous review of executive talent and succession plans for key operating and corporate roles.

  

×  No Automatic Vesting. We generally require a minimum vesting period of at least one year for all types of equity awards.

 

42   |   Nordson Corporation – 2024 Proxy Statement


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Executive Compensation Decision Process

The implementation and oversight of our executive compensation program spans the entire year with meaningful touchpoints between the Compensation Committee, management, and our independent compensation consultant, Exequity, LLP (“Exequity”). We believe the program strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our executives to dedicate themselves fully to creating value for our shareholders. In support of this belief, the Compensation Committee employs diligent oversight of the executive compensation program to ensure its operation and effectiveness as detailed below:

 

 

LOGO

Roles in the Compensation Decision Process

Role of the Compensation Committee

The Compensation Committee has responsibility for establishing our executive compensation program and for making compensation decisions under the program. Each year, the Compensation Committee reviews and sets the performance targets that apply to incentive awards taking into consideration shareholder feedback and the performance of the Company. The Compensation Committee also discusses the Board’s evaluation of the CEO and the CEO’s evaluation of the other executives to approve recommendations about base salary, annual cash incentive compensation and long-term incentive compensation. The Compensation Committee may delegate power and authority to subcommittees of the Compensation Committee as it deems appropriate.

Role of Executive Management

Our Chief Executive Officer, along with our Chief Human Resources Officer, provide additional information and analysis as requested by the Compensation Committee. More specifically, they provide support for Compensation Committee meetings and make recommendations about designs for our Annual Cash Incentive Award and long-term equity-based awards. In addition to the responsibilities above, Mr. Nagarajan also: (i) provides to the Board of Directors a self-assessment of his own performance; (ii) provides an assessment of each executive officer’s performance; and (iii) recommends annual base salary adjustments, payouts of Annual Cash Incentive Awards and Performance Share Unit Awards, and the grant value of annual and other long-term incentive equity awards for the upcoming year for executive officers other than himself.

 

Nordson Corporation – 2024 Proxy Statement   |   43


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Role of the Third-Party Executive Compensation Consultant

The Compensation Committee retained Exequity as its independent executive compensation consultant to support the Compensation Committee’s oversight and management of our executive compensation programs. Exequity reports directly to the Compensation Committee, and its responsibilities include assisting the Compensation Committee with validating our executive compensation plans and programs through periodic benchmarking studies and analysis. In addition, Exequity informs the Compensation Committee of regulatory developments and market trends related to executive compensation practices. The Compensation Committee’s charter requires that it annually assess the independence of Exequity in light of SEC rules and Nasdaq listing standards. In 2023, the Compensation Committee performed this assessment and concluded that no conflict of interest prevented Exequity from independently and objectively advising the Compensation Committee.

Key Factors in the Executive Compensation Decision Process

Shareholder Say-on-Pay Vote

Our executive compensation program aligns with our shareholders’ interests and rewards executives for achieving Company performance. In making executive compensation decisions, the Compensation Committee considers the results of the advisory say-on-pay shareholder vote and believes that these results represent an affirmation that our pay practices align with our compensation philosophy. The results of our say-on-pay vote for the past three years are as follows:

 

       

    

 

Annual Meeting Year

  FOR Vote (%)       
   
   

2023

  95.06%    
   
   

2022

  93.99%    
   
   

2021

  96.11%    

We value the positive endorsement by our shareholders of our executive compensation policies and believe that the outcome signals our shareholders’ support of our executive compensation program. As a result, our Compensation Committee has retained our general approach to executive officer compensation, with an emphasis on performance-based short and long-term incentive compensation that rewards our most senior executives when they deliver value for our shareholders. We currently hold our “Say-on-Pay” vote annually. Our next shareholder vote on the frequency of our “Say-on-Pay” vote is expected to be held at our 2029 Annual Meeting of Shareholders.

Benchmarking - Peer Group and Compensation Surveys

As part of its compensation decision process, the Compensation Committee conducts an annual review of the compensation practices of the competitive market against a group of peer companies. The Compensation Committee also reviews the peer group annually and makes modifications so that the group closely resembles our competitive market for executive talent. Generally, we set our executive compensation to be in line with benchmark data using companies selected as our proxy peers. In line with our pay-for-performance philosophy, we would expect that, over time, incentive awards would pay out above target for performance that outperforms our peer group median, and below target for performance that falls short of peer group performance. At its May 2022 meeting, the Compensation Committee, in consultation with Exequity, approved a compensation peer group for 2023 compensation decisions based on the following criteria:

 

 
Peer Group Determining Criteria
 

•  Revenue generally between 0.5x - 2.0x Nordson’s revenue

 

•  Market value generally between 0.33x - 3.0x Nordson’s market value

 

•  Global scope and similar business model characteristics

 

•  Profiles similar to Nordson’s, based on industries served

 

 

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Based on a review of companies meeting this criteria, the following companies are included in our peer group for 2023:

 

 

Nordson’s Peer Group for 2023

   
  AMETEK, Inc.   Graco Inc.   Lincoln Electric Holdings, Inc.   Trimble Inc.
   
  Barnes Group Inc.   ICU Medical, Inc.*   MKS Instruments, Inc.   Vontier Corporation*
   
  Chart Industries, Inc.   IDEX Corporation   National Instruments Corporation   Watts Water Technologies, Inc.
   
  Donaldson Company, Inc.   ITT Inc.   Teleflex Incorporated*   Woodward, Inc.
   
  Entegris, Inc.   Keysight Technologies   Teradyne, Inc.    

 

*

Companies added to the 2023 compensation peer group based on the selection criteria. FLIR Systems, Inc. was removed because it was acquired by Teledyne Technologies in 2021.

 

       
     

Revenue(1)

($MMs)

      

Market Cap

As of Dec. 2021(2)

($MMs)

 
   

75th Percentile

   $3,112      $ 18,371  
   

Average

   $2,733      $ 13,565  
   

Median

   $2,765      $ 8,747  
   

25th Percentile

   $1,898        $ 6,166  
   

Nordson Corporation

   $2,362        $ 14,851  

 

(1)

Revenue values are as of the most recent fiscal year ending on or before December 31, 2021.

(2)

Our compensation peer group for 2023 was approved during the May 2022 meeting. Due to the date of this meeting, the latest full-year data available to and considered by the Compensation Committee was December 2021.

Setting Goals and Compensation

Our Ascend Strategy provides the basis for determining annual and long-term performance goals and objectives under our executive compensation program. The established performance goals focus on delivering growth and value for shareholders over time and aligns performance with shareholder expectations and market trends. Our incentive plan metrics are designed to be highly performance-oriented, with rigorous targets to drive shareholder value.

We establish goals using the prior year-end financials as a baseline for growth and keep consistent metrics for the entire Company. We look at additional internal and external data to further develop our recommendation and establish our relevant targets.

 

   

Expected future performance.    We assess our future expected performance based on our five-year plan and thoroughly analyze our incentive goals compared to those of our peers.

 

   

Historic performance.    We conduct a rigorous annual review of our historic performance and the historic performance of our peers, particularly our proxy peers, but also consider a group of mid-cap industrial peers and growth-focused companies for reference, to help us establish relevant targets.

 

   

Other external factors.    We consider economic conditions, investor and shareholder expectations, pay for performance alignment, and other factors in establishing our targets.

Based on a qualitative analysis of all factors, and considering input from the independent executive compensation consultant, the Compensation Committee sets the goals and targets for our executive officer compensation. Throughout the year, the Compensation Committee receives regular updates from management on performance against these goals and targets to monitor performance.

 

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Elements of Compensation

Our executive compensation program is primarily performance-based. The following chart summarizes the principal components of our executive compensation program and the drivers of each element.

 

       

Pay Component

       Role    Determination Factors
     

Salary

 

LOGO

 

   Fixed cash compensation that provides a reliable source of income   

•   Competitive positioning against benchmark data for similar roles, individual performance, experience and potential.

 

Annual Cash Incentive Awards

 

LOGO

 

  

Cash incentive compensation that rewards for driving key business, operational and individual performance.

 

Range: 0-200%

  

 

One-year performance period

 

 

 

  

 

•   50% Segment Performance*

 

¡  40% Organic Revenue Growth

 

¡  60% Base Business Profit Growth

 

  

•   50% Total Company Performance

 

¡  40% Organic Revenue Growth

 

¡  60% Base Business Profit Growth

 

Long-Term Incentive Awards

  

Long-term equity based compensation that facilitates retention, increases share ownership and aligns interest of executives and shareholders.

 

 

    
   

Performance

Share Units

(40%)

 

LOGO

  

Rewards executives for achieving long-term financial goals.

 

Granted at the beginning of a three-year performance period with units earned based on performance achievement over the three-year period.

 

Range: 0-200%

  

 

Three-year performance period

 

 

 

 

    

 

•   40% EPS Growth

    

 

•   30% ROIC

 

    

•   30% EBITDA Margin

      
      
      
      
      
   

Stock Options

(40%)

 

LOGO

   Incentivizes executives through share price appreciation. Vested options remain exercisable for 10 years from the date of the grant.   

 

Four-year incremental vesting

 

 

 

 

 

    

 

•   Share price

      
      
      
           
           
             
   

Restricted

Share Units

(20%)

 

LOGO

 

   Promotes execution on longer-term financial and strategic goals that drive shareholder value creation.   

 

 

Three-year incremental vesting

  

 

•   Share price

  

 

•   Continued employment

    
    
    
    
           

Perquisites

      

Minimal perquisites are provided to enable executives to focus on company business with minimal distractions.

 

 

  

•   Competitive market practice for similar roles

 

*

Individual Segment performance for Segment Leaders; Combined Segment performance for CEO & Functional Executive Leaders

 

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CEO Compensation

During its November 21, 2022 meeting, the Compensation Committee, with input from Exequity, established Mr. Nagarajan’s 2023 total target direct compensation as Chief Executive Officer, taking into account a number of factors, including a competitive market review, tenure and experience, relative internal pay equity, the Board’s assessment of Mr. Nagarajan’s performance, and the Company’s overall financial and operating performance. Considering these factors, the Compensation Committee established his 2023 compensation as:

 

   

    2023 Compensation Element

   Value
   

Base Salary

   $975,000
   

Annual Cash Incentive Award Target Opportunity

  

$1,170,000

(120% of base salary)

   

2023-2025 Performance Share Unit Award Target Opportunity

  

8,852 share units

$2,124,569 grant date fair value

   

Stock Options

  

25,582 shares

$2,012,792 grant date fair value (1)

   

Restricted Share Units

  

4,426 share units

$1,062,284 grant date fair value

 

(1)

The grant date fair value was determined using the Black-Scholes option pricing model on the date of grant. The actual value of stock option awards earned will be determined by the value of our common shares on the date of exercise.

Total Target Compensation Mix

We design our executive officers’ compensation opportunity to be largely performance-based and at-risk. Consistent with our pay for performance philosophy and to incentivize our executives to focus on performance, approximately 87% of the target total compensation opportunity for Mr. Nagarajan and 75% of the average total target compensation opportunity for our other named executive officers in 2023 was at-risk or based on attainment of performance metrics. This includes approximately 71% for Mr. Nagarajan’s compensation and 56% for the average named executive officer’s compensation in the form of long-term and multi-year incentive opportunities granted in restricted share units, stock options, and performance share units. The performance share units depend on attainment of pre-established performance metrics and for the 2021-2023 performance cycle, alignment with relative total shareholder return. Approximately 16% of Mr. Nagarajan’s and 17% of the average of the other named executive officers’ 2023 compensation was in the form of an at-risk annual cash incentive opportunity that is tied to year over year achievement of strategic goals.

 

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Our executive compensation program does not prescribe a specific formula for the mix of base salary and annual and long-term incentive components. This allows us to develop an appropriate compensation mix, depending on business performance.

 

 

LOGO

 

 

LOGO

     

 

Base Salary

     

•  Represents 13% of the CEO’s, and 25% of the average of the other named executive officers’ target direct compensation(1)

 

     

 

Annual Cash Incentive Award

     

•  Represents 16% (at target) of the CEO’s, and 17% (at target) of the average of the other named executive officers’ target direct compensation

 

•  Designed to drive high performance results year-over-year

 

•  Places significant portion of annual compensation at risk

 

  

 

Long-term Incentive Awards

     

•  Represents 71% of the CEO’s, and 58% of the average of the other named executive officers’ target direct compensation

 

•  Intended to align interests of executive officers with shareholders’ long-term interests

 

•  Performance share incentive awards (at target, 40% of long-term compensation opportunity) are payable in unrestricted Nordson common shares to the extent pre-established quantitative performance goals are met

 

•  Stock options (approximately 40% of long-term compensation opportunity) vest in 25% increments over four years and only have value if the price of the Company’s shares increases after the award

 

•  Restricted share unit awards (approximately 20% of long-term compensation opportunity) vest over a three-year period and are an important management succession planning, retention, and recognition tool

 

(1)

Target direct compensation is defined as the sum of an executive officer’s base salary, annual cash incentive award, and long-term incentive awards, in each case, calculated at the target level specified by the Compensation Committee.

 

 Base Salary

The Compensation Committee determines annually the base salaries of our executive officers, including whether to award base salary increases from the previous year and, if so, the magnitude of the increase, based on the following factors:

 

   

level of tenure, experience and responsibility;

 

   

Company, business segment, and individual performance during the prior year;

 

   

market and survey data;

 

   

internal pay equity;

 

   

the Compensation Committee’s assessment of other elements of compensation provided to the executive officer; and

 

   

our Chief Executive Officer’s recommendation for all executive officers other than himself.

 

 Annual Cash Incentive Award

The Annual Cash Incentive Award is designed to drive high-performance results based on the achievement of our annual financial objectives, which focus our executives on key business strategies and align the interests of our

 

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executive officers with our shareholders. Through the Annual Cash Incentive Award, executive officers are provided the opportunity to earn a significantly higher payout if target performance is exceeded but bear the risk of a lower payout if target performance is not achieved, and no payout if threshold performance is not achieved.

Performance and payouts under the Annual Cash Incentive Award were determined based on financial measures — organic revenue growth (weighted 40%) and base business operating profit growth (weighted 60%), excluding acquisition or divestiture revenue and operating profit impact from the calculations for a full 12 months from the acquisition or divestiture.

We consider organic revenue growth and base business operating profit growth to be measures critical to our success and that offer the proper balance between growth and profitability. More specifically:

 

   

Organic revenue growth measures the rate at which management has succeeded in increasing sales from its existing businesses and excludes any growth from acquisitions or divestitures.

 

   

Base business operating profit growth measures the total earnings from the core business, and excludes the deduction of interest, taxes, and profits from any ancillary investments, the impact on operating profit of an acquisition or divestiture for one year following such acquisition or divestiture, or other one-time actions of the Company.

For named executive officers who have responsibility for certain corporate functions (including our Chief Executive Officer, Chief Financial Officer, and Executive Vice President, Continuous Improvement) the corporate financial measures accounted for 50% of any payout with a weighted average of the business segments’ financial measures accounting for the other 50% of the payout. For the named executive officers with responsibility for a business segment, the corporate financial measures accounted for 50% of any payout with the applicable business segment’s financial measures accounting for the other 50% of the payout.

 

 Long-Term Incentive Awards

Our long-term incentive awards are currently delivered through a combination of three forms of equity: (i) performance share units; (ii) stock options; and (iii) restricted share units.

The Compensation Committee begins the process of determining equity awards by comparing our equity compensation programs to those of our peer group. The Compensation Committee also reviews market compensation data based on survey data provided by Aon Hewitt.

In reaching a final decision on the mix and amount of equity compensation our named executive officers should receive, the Compensation Committee took numerous factors into consideration. As referenced above, market alignment and competitiveness were key factors the Compensation Committee considered in setting equity compensation levels. Other factors considered were current industry trends, practices among our peer group, and the behaviors the awards were intended to drive. In addition to these factors, the Compensation Committee placed significant weight on the dilutive impact equity issuances have on our shareholders. In assessing dilution, the Compensation Committee considered the annualized effect of equity compensation by analyzing the equity “burn rate” over one-year and three-year periods. Burn rate, in its simplest form, is determined by dividing the projected number of shares to be issued to employees by the weighted average number of shares outstanding. The Compensation Committee also considered the aggregate impact of all past equity compensation grants by looking at the Company’s equity compensation “overhang.” Overhang is determined by dividing all outstanding equity grants and shares available for future grants by the total number of shares outstanding. The resulting percentage provided the Compensation Committee with insight into the long-term cost of the Company’s equity compensation programs.

The approximate allocation for 2023 of the three equity components (as a percent of the long-term incentive compensation opportunity) was as follows:

 

     

Equity Form

   % of Opportunity         
   

Performance Share Units

  

40

   
   

Stock Options

  

40

   
   

Restricted Share Units

  

20

       

 

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For fiscal year 2024, the Compensation Committee has adjusted the approximate allocation of the three components (as a percentage of the long-term incentive compensation opportunity) to 50% Performance Share Units, 30% Stock Options, and 20% Restricted Share Units.

Performance Share Incentive Award

A portion of each named executive officer’s annual total direct compensation opportunity is in the form of performance share units, which are settled in unrestricted Nordson common shares at the time of payout.

In selecting the quantitative performance measures and goals for the 2023 Performance Share Incentive Award, the Compensation Committee considered whether the measures were appropriately aligned with those in the Annual Cash Incentive Award so that the overall compensation design did not unintentionally encourage our executive officers to take unnecessary or excessive risk or actions that are inconsistent with our year-over-year and long-term objectives. Performance and payouts under the Performance Share Incentive Award are determined based on quantitative corporate financial measures — earnings per share growth, return on invested capital, and EBITDA margin. More specifically:

 

   

Earnings per share (EPS) growth measures the rate at which management has succeeded in growing profits per unit of shareholder ownership. We define it as net income divided by the weighted average common shares outstanding and it is consistent with financial disclosure in our Annual Report on Form 10-K. We believe it puts the highest emphasis on revenue growth and operating profit growth and focuses leadership on profitable growth in the long-term.

 

   

Return on invested capital (ROIC) measures the amount of profitability per unit of capital invested by management to generate earnings. We define it as the sum of net income (loss) plus after-tax interest expense on debt as a percentage of the sum of average quarterly shareholders’ equity plus average quarterly debt (net of cash and cash equivalents).

 

   

EBITDA margin measures the profitability created through a high level of differentiation and operation excellence of the Company. We define it as the sum of operating profit plus depreciation and amortization expenses divided by total revenue. While the growth in revenue and operating profit were of primary importance, management was also expected to maintain the highly differentiated business in terms of profitability and using this measure allows us to reward leaders when we sustain or improve our differentiated return.

Stock Options

Stock options align the interests of the named executive officers with those of shareholders because the stock options are granted with an exercise price equal to the fair market value on the grant date, meaning they only have value if the price of the Company’s share price increases after the stock options are awarded. Stock options vest in 25% increments over a four-year period (on the first four anniversaries of the grant date) and generally expire ten years from the grant date. Stock options are a valuable retention tool because our option awards vest over a four-year period and unvested options are forfeited if an executive officer voluntarily terminates employment.

Restricted Share Units

Restricted share units are designed to align executive officers’ interests with those of our long-term shareholders. The Compensation Committee also views these service-based awards as an important management succession planning, retention, and recognition tool, tying our executive officers’ compensation to shareholder interests. Restricted share units generally vest over a three-year period. Dividends on restricted share units are credited and earned on the number of underlying shares that ultimately vests.

We made equity grants, including performance awards, stock option awards, and restricted unit awards, to our executive officers on December 1, 2022, at the same time we granted equity to other key employees under our 2021 Stock Incentive and Award Plan. We have historically considered equity grants during the Compensation Committee’s November meeting, which is scheduled at this time of year to permit us to verify prior fiscal year performance results, to determine incentive award payouts, and to set compensation and performance measures and goals for the next fiscal year.

 

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2023 Actions and Analysis

 

 Base Salary

The Compensation Committee set individual base salaries of our named executive officers for 2023 at a level consistent with the general objective of paying total target direct compensation to approximate the median of our peer group; however, each named executive officer’s position relative to median may vary depending on a consideration of factors such as tenure, experience, future potential, internal pay equity, and performance. In setting the salaries, we considered Exequity’s input and analysis, and the recommendations of Mr. Nagarajan, Chief Executive Officer (except with respect to his own salary).

The following table reflects the annualized base salaries of our named executive officers for 2023 and 2022 (fiscal year end):

 

       

Named Executive Officer

  

  Base Salary  

2023 ($)

 

  Base Salary  

2022 ($)

 

  Increase in Base  

  Salary (%)  

 
   

Sundaram Nagarajan

   975,000   900,000     8.3%         
   

Joseph P. Kelley

   543,000   527,000     3.0%         
   

Jeffrey A. Pembroke

   520,000   500,000     4.0%         
   

Stephen P. Lovass

   464,000   450,000     3.1%         
   

James E. DeVries

   430,000   415,000     3.6%         

 

 Annual Cash Incentive Award

The Compensation Committee established target payout opportunities, including threshold and maximum payout opportunities, for our named executive officers after considering Exequity’s analysis of our peer group’s annual incentive opportunities and approximating the peer group median of such opportunities. Mr. Nagarajan’s target was increased from 100% to 120% and Mr. Kelley’s target was increased from 75% to 80% to align with benchmarking. The remainder of the named executive officers’ targets remained the same as the previous year.

The following table reflects the payout opportunities as a percentage of base salary:

 

   
  Incentive Amount as a
Percentage (%) of Base Salary
   

Named Executive Officer

    Threshold         Target         Maximum     
   

Sundaram Nagarajan

  30 %   120 %   240 %
   

Joseph P. Kelley

  20 %     80 %   160 %
   

Jeffrey A. Pembroke

  18 %     70 %   140 %
   

Stephen P. Lovass

  18 %     70 %   140 %
   

James E. DeVries

  15 %     60 %   120 %

 

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The Compensation Committee established the following quantitative financial performance measures and goals for the Annual Cash Incentive Awards (the applicability of which differ depending on the Named Executive Officer)(1):

 

   
  Measure (Weight in %) Growth Rate
   

Organic Revenue Growth (40%)

    Threshold    
25%
    Target    
100%
    Maximum    
200%
   

Corporate

0%   4%     9 %       
   

IPS (Industrial Precision Solutions)

0%   3%     6 %       
   

MFS (Medical Fluid Solutions)

0%   7%   14 %       
   

ATS (Advanced Technology Solutions)

0%   5%   10 %       

 

       
  Base Business Operating Profit Growth (60%)     Threshold    
25%
    Target    
100%
    Maximum    
200%
   

Corporate

0%     7%   16 %       
   

IPS (Industrial Precision Solutions)

0% 4.5%   10 %       
   

MFS (Medical Fluid Solutions)

0%  11%   24 %       
   

ATS (Advanced Technology Solutions)

0%  11%   24 %       

 

(1)

Straight line interpolation applies to performance between designated goals.

Determination of Payout Amounts

The Compensation Committee determined the Annual Cash Incentive Award by first certifying performance and calculating performance as a percentage of target for the financial measures. The results are presented in the table below:

 

       

Measure (Weight in %)

   Growth Rate   Actual Currency   Currency Neutral  
   

Organic Revenue Growth (40%)

     Threshold       Target       Result       % of Target       Result       % of Target    
   

Corporate

   0%   4%      -2%     0%   -1%         0 %        
   

IPS (Industrial Precision Solutions)

   0%   3%      2%   78%    3%     103 %        
   

MFS (Medical Fluid Solutions)

   0%   7%     -4%     0%   -4%         0 %        
   

ATS (Advanced Technology Solutions)

   0%   5%   -10%     0%   -9%         0 %        

 

       
      Growth Rate   Actual Currency   Currency Neutral  
   

Base Business Operating Profit Growth (60%)

     Threshold       Target       Result       % of Target       Result       % of Target    
   

Corporate

   0%      7%   -3%       0%      2%         0 %        
   

IPS (Industrial Precision Solutions)

   0%   4.5%      6%   131%      7%     150 %        
   

MFS (Medical Fluid Solutions)

   0%    11%   -13%       0%   -12%         0 %        
   

ATS (Advanced Technology Solutions)

   0%    11%   -18%       0%   -16%         0 %        

 

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Next, the Compensation Committee determined the combined factor payouts, as a percentage of target, for actual currency and currency neutral performance. The results are presented in the table below:

Actual Currency:

 

         

Named Executive Officer

Company

Factor

    (% of Target)    

Segment
Factor

    (% of Target)    

Combined

Factor

Payout

  (% of Target)  

     
   

Sundaram Nagarajan

  0.0 %   28.3 %   28.3 %
   

Joseph P. Kelley

  0.0 %   28.3 %   28.3 %
   

Jeffrey A. Pembroke

  0.0 %   54.9 %   54.9 %
   

Stephen P. Lovass

  0.0 %   0.0 %   0.0 %
   

James E. DeVries

  0.0 %   28.3 %   28.3 %

Currency Neutral:

 

         

Named Executive Officer

Company

Factor

    (% of Target)    

Segment
Factor

    (% of Target)    

Combined

Factor

Payout

  (% of Target)  

     
   

Sundaram Nagarajan

  0.0 %   33.9 %   33.9 %
   

Joseph P. Kelley

  0.0 %   33.9 %   33.9 %
   

Jeffrey A. Pembroke

  0.0 %   65.6 %   65.6 %
   

Stephen P. Lovass

  0.0 %   0.0 %   0.0 %
   

James E. DeVries

  0.0 %   33.9 %   33.9 %

Under our currency adjustment policy, because the difference between the two potential payout percentage rates for the IPS segment is greater than 10 percentage points, the Annual Cash Incentive Award payout includes a currency adjustment. The final payout for Jeffrey A. Pembroke, leader of the IPS segment, was adjusted down 10 percentage points from the currency neutral results, (which represents a 0.7% upward adjustment from the actual currency results), reflecting the Committee’s position that payouts should be affected only by currency fluctuation greater than 10 percentage points. The results are presented in the table below:

 

         

Named Executive Officer

  

Target Payout

Opportunity ($)

 

Combined

Factor

Payout

    (% of Target)    

 

Actual
  Payout ($)
 (1)  

 

     

 
   

Sundaram Nagarajan

   $1,170,000   28.3%   $331,012    
   

Joseph P. Kelley

   $   434,400   28.3%   $122,921    
   

Jeffrey A. Pembroke

   $   364,000   55.6%   $202,354    
   

Stephen P. Lovass

   $   324,800     0.0%   $           0    
   

James E. DeVries

   $   258,000   28.3%   $  73,004        

 

(1)

The Actual payout shows the dollar amount paid to each named executive officer and may not add due to rounding.

No discretion was exercised to increase or decrease the formulaic incentive award payouts to the named executive officers.

 

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 Long-Term Incentive Awards

Performance Share Incentive Awards

2021-2023 Performance Share Incentive Award – Calculation of Payout

The performance period for the 2021-2023 Performance Share Incentive Award ended on October 31, 2023. As established by the Compensation Committee, the quantitative performance measures and goals for the 2021-2023 Performance Share Incentive Award were set on a year-by-year basis. The Compensation Committee also established that the final payout of the 2021-2023 Performance Share Incentive Award would be further adjusted based on the Company’s relative shareholder return performance over the three-year period as compared to the S&P 900 Selected as follows:

 

       
  2021 2022 2023
   

Performance Measure

(Weight %)

Threshold
(25%)
Target
(100%)
Maximum
(200%)
Threshold
(25%)
Target
(100%)
Maximum
(200%)
Threshold
(25%)
Target
(100%)
Maximum
(200%)
   

EPS Growth (40%)

  %   7 %   14 %   %   8 %   16 %   %   8 %   16 %
   

ROIC (30%)

  8 %   11 %   15 %   8 %   12 %   18 %   10 %   16 %   22 %
   

EBITDA Margin (30%)

  23 %   26 %   29 %   23 %   28 %   32 %   26 %   30 %   34 %

 

 

TSR Relative to S&P 900 Selected Peer Group

   

        

Threshold

(-20 % points from Total Performance)

Target

(no change)

Maximum

(+ 20 % points to Total Performance)

   
25th percentile of the peer group 25th - 75th percentile of the peer group 75th percentile of the peer group

To determine the payout of this award, the Compensation Committee first certified performance for the applicable performance measures for each year and determined the overall attainment for the 2021—2023 Performance Share Incentive Award by averaging the performance achieved across each of the three years, as reflected in the table below :

 

         
  2021 2022 2023     
   

Performance Measure

(Weight %)

Target Actual

Result

(% of
  Target)  

Target Actual Result
(% of
  Target)  
Target Actual Result
(% of
  Target)  
    Total    
   

EPS Growth (40%)

  7 %   35 %   200 %   8 %   20 %   200 %   8 %   (10 )%   %