UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

 

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 Under Rule 14a-12

Linde plc

(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 THE APPROPRIATE BOX):

 

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

 


 

 

 

Making our world more productive Sustainable Growth Notice of 2022 Annual General Meeting of Shareholders and Proxy Statement

 

 

 

 

 


 

 

 

A Message from

Our Chairman

 

 

 

Dear fellow shareholders,

On behalf of Linde’s entire Board of Directors, I am honored to write to you as the new Chairman of  Linde plc (“Linde” or the “Company”).  During the past year, there have been several corporate governance and leadership developments that culminated on March 1, 2022, which was effectively the third anniversary of the merger between Praxair and Linde AG.

 

Senior Executive Leadership Changes

 

In October 2021, the Board appointed me to succeed Wolfgang Reitzle as the new Chairman, and Sanjiv Lamba to become Linde’s new CEO, each effective March 1, 2022. Sanjiv previously served as the Chief Operating Officer since January 2021. This senior leadership transition was the result of a successful CEO succession planning process that the Board undertook starting in early 2020. I look forward to working with Sanjiv as he builds on the foundation of Linde’s success to drive results for all our stakeholders.

 

Director Retirements; New Director Recruitment

and Committee Changes  

 

Director Retirements. Effective March 1, 2022, the following five Linde directors retired from the Board as required by the Board’s Director Retirement Policy: Wolfgang Reitzle (the former Chairman of the Board), Clemens Borsig (the former Chairman of the Audit Committee), Nance K. Dicciani, Franz Fehrenbach and Larry D. McVay. I want to thank these directors for their outstanding contributions to Linde’s success,  and particularly to Wolfgang Reitzle for his leadership of the Board as the former Chairman.

 

New Directors. Beginning in 2020, the Governance and Nomination Committee began a comprehensive process to plan for the anticipated 2022 director retirements and to refresh the Board through the recruitment of new directors. This resulted in Linde adding two highly experienced directors who joined the Board effective November 1, 2021: Joe Kaeser, the former CEO and CFO of Siemens, AG, and Alberto Weisser, the former CEO and CFO of Bunge Limited.

 

Committee Changes. In connection with the director retirements, the Board reviewed and rotated committee assignments and appointed new committee Chairpersons as disclosed in the proxy statement. In addition, the Board added a new Sustainability Committee to focus on environmental matters and clean energy initiatives.

 

 

Board Oversight of Environmental, Social and

Governance Matters

 

The Board and its committees are actively involved in providing oversight and counsel to management regarding Environmental, Social and Governance (“ESG”) matters as discussed in the “Environmental, Social and Governance Highlights” section of the proxy statement. During 2021, the Board conducted a comprehensive review of its oversight of Linde’s ESG programs and practices and implemented several constructive enhancements, including (1) creating the new Sustainability Committee, (2) expanding the scope of and renaming the “Compensation Committee” to the “Human Capital Committee” and (3) revising the charters of certain committees to specify their oversight of ESG factors more clearly.

 

Other Key Board Actions

 

The Board and its committees undertook the other following key actions during the past year:

 

 

Exercised oversight of the Company’s capital allocation strategy, with a focus on investment for future growth and appropriate shareholder distribution levels. This included a 10% increase in the 2022 cash dividend and a new $10 billion stock repurchase program (each approved in February 2022), and the approval of large capital projects that will provide future revenue streams.

 

 

Conducted the annual enterprise risk assessment and multiple strategic business reviews throughout the year.

 

 

Undertook talent reviews and senior management succession planning, and appointed Sanjiv Lamba as the Company’s new Chief Executive Officer.

 

2022 AGM

I am pleased to invite you to the 2022 Annual General Meeting of Shareholders (“AGM”) of Linde plc. Due to health and safety considerations arising from the Covid-19 pandemic, we held the 2020 and 2021 AGMs primarily through an electronic online format. However, as many Covid-19 restrictions have eased, we are hopeful to return to an in-person meeting in London this year. We will continue to actively monitor ongoing developments, and health and safety protocols. Therefore, we may need to change the date, time and location of the 2022 AGM, including again holding the AGM primarily through electronic means. The accompanying Notice of the AGM and the proxy statement provide more details regarding potential contingencies and alternatives for the in-person AGM in London.

 

The Board thanks you for your continuing support and confidence in Linde.

 

Regards,

 

 

Stephen F. Angel

 

 


 

 

Table of Contents

 

 

Notice of 2022 Annual General Meeting of Shareholders

1

 

 

Proxy Statement Highlights

3

 

 

Proposals

3

 

 

2021 Business Performance Highlights

5

 

 

Board and Governance Highlights

7

 

 

Compensation Highlights

9

 

 

Environmental Social Governance Highlights

11

 

 

Linde’s Corporate Governance Framework

14

 

 

Board Committees

23

 

 

Director Compensation

27

 

 

Director Nominees

29

 

 

Proposal 1: Re-appointment of Directors

40

 

 

Audit Matters

41

 

 

Oversight of Independent Auditors

41

 

 

Auditor Independence

42

 

 

Fees Paid to the Independent Auditor

43

 

 

Audit Committee Report

44

 

 

Proposal 2a: Non-Binding Ratification of the Appointment of the Independent Auditor

45

 

 

Proposal 2b: Authorization of the Board to Determine the Auditor’s Remuneration

45

 

 

Executive Compensation Matters

46

 

 

Report of the Human Capital Committee

46

 

 

Compensation Discussion and Analysis

46

 

 

Executive Compensation Tables

63

 

 

Table 1: Summary Compensation

63

 

 

Table 2: Grants of Plan-Based Awards

65

 

 

Table 3: Outstanding Equity Awards at Fiscal Year-End

66

 

 

Table 4: Option Exercises and Stock Vested

67

 

 

Table 5: Pension Benefits

68

 

 

Table 6: Nonqualified Deferred Compensation

72

 

 

Severance and Other Change-In Control Benefits

74

 

 

Table 7: Amounts Potentially Payable upon Termination

75

 

 

CEO Pay Ratio

80

 

 

Proposal 3: Advisory and Non-Binding Vote on Named Executive Officer Compensation

81

 

 

Proposal 4: Advisory and Non-Binding Vote on Board and CEO Renumeration Report

82

 

 

Proposal 5: Determination of Price Range for Re-allotment of Treasury Shares

83

 

 

Proposal 6: Shareholder Proposal Regarding Supermajority Voting Requirements

84

 

 

Information on Share Ownership

89

 

 

Information About the Annual General Meeting and Voting

90

 

 

General Information

90

 

 

Miscellaneous

95

 

 

Appendix 1: Linde plc Directors’ Remuneration Report

1-1

 

 

Appendix 2: Irish Legal Advice of Arthur Cox LLP Regarding Shareholder Proposal

2-1

 

 

 

 


 

 

 

 

 

Notice of 2022 Annual General Meeting of Shareholders

Dear Shareholder:

 

The Annual General Meeting (“AGM”) of Shareholders of Linde plc (“Linde” or the “Company”) will be held at 1:00 PM United Kingdom time (8:00 AM Eastern Daylight Time in the U.S.) on Monday, July 25, 2022, at the Corinthia Hotel, Whitehall Place, Westminster, London, SW1A 2BD, U.K., for the following purposes: (please see the notice below regarding possible changes to the meeting as a result of the COVID-19 pandemic)

 

1.

By separate resolutions, to re-appoint the ten director nominees described in the proxy statement.

 

2.

To (a) ratify, on an advisory and non-binding basis, the appointment of PricewaterhouseCoopers (“PwC”) as independent auditor of the Company and (b) to authorize the Board, acting through the Audit Committee, to determine PwC’s remuneration.

 

 

3.

To approve, on an advisory and non-binding basis, the compensation of the Company’s named executive officers, as required under applicable U.S. law and U.S. Securities and Exchange Commission rules.

 

4.

To approve, on an advisory and non-binding basis, the Directors’ Remuneration Report (excluding the Directors’ Remuneration Policy) as set forth in the Company’s IFRS Annual Report for the financial year ended December 31, 2021, as required under Irish law

 

5.

To determine the price range at which the Company can re-allot shares that it acquires as treasury shares under Irish law.

 

6.

To consider and vote on a shareholder proposal regarding supermajority voting requirements in Linde’s Irish Constitution.

 

7.

To conduct such other business as may properly come before the meeting.

 

Potential Impact of the COVID-19 Pandemic on the Annual General Meeting

 

Linde is monitoring coronavirus (COVID-19) developments and the related recommendations and protocols issued by public health authorities and governments. The health and well-being of Linde’s shareholders is a high priority. If the Company determines that it is not possible or advisable to hold the Annual General Meeting in person, Linde will announce alternative arrangements for the meeting, which may include a change in the date or time of the meeting, a change in the meeting location and/or holding the meeting primarily by means of remote electronic communication. Linde will announce any such change and the details on how to participate by press release, which will be available on Linde’s website at https://www.linde.com/news-media/press-releases and filed with the Securities and Exchange Commission as additional proxy materials. If you are planning to attend the meeting, please check the website prior to the meeting date.

 

Linde plc  |  1


 

 

 

Shareholders may, by technological means, participate in the 2022 Annual General Meeting in Ireland in accordance with the section 176 of the Irish Companies Act 2014 by attending the offices of Arthur Cox LLP, Ten Earlsfort Terrace, Dublin 2, DO2 T380, Ireland at the time of the meeting.

This Proxy Statement and a form of proxy are being distributed to shareholders on or about April 29, 2022.  Only holders of record of Linde ordinary shares at the close of business on April 28, 2022, will be entitled to notice of the meeting or any adjournment or postponement thereof.  Pursuant to section 1105(2) of the Irish Companies Act 2014, only holders of record of Linde ordinary shares at 1:00 p.m. Irish time on July 23, 2022, will be entitled to attend, speak, ask questions and vote at the meeting in respect of the number of shares registered in their name at that time.

It is important that your shares be represented and voted at the meeting.  Any shareholder entitled to attend, speak, ask questions and vote at the meeting, may exercise his or her right to vote by appointing a proxy or proxies to attend and vote on his or her behalf.  A shareholder may appoint the persons named in the proxy card provided or another person, who need not be a shareholder of the Company, as a proxy, by electronic means or in writing, to vote some or all of their shares.  Appointment of a proxy does not preclude members from attending, speaking and asking questions at the meeting should they subsequently wish to do so.  Please note that proxies may be required to provide identification to attend the meeting.

Whether or not you expect to attend the AGM in person, please promptly provide your proxy either online or by telephone, as further explained in the accompanying proxy statement, or by filling in, signing, dating and promptly mailing a proxy card.  We recommend that you review the further information on the process for, and deadlines applicable to, voting, attending the meeting and appointing a proxy under “Information About the Annual General Meeting and Voting” on page 92 of the proxy statement.

Please be aware that, if you own shares in a brokerage account, you must instruct your broker on how to vote your shares.  Without your instructions, New York Stock Exchange rules do not allow your broker to vote your shares on any of the proposals except those identified herein.  Please exercise your right as a shareholder to vote on all proposals, including the re-appointment of the director nominees, by instructing your broker by proxy.

 

 

 

By Order of The Board of Directors

 

 

Stephen F. Angel

 

Chairman of the Board

 

April 29, 2022

 

 

 

 

  2  |  Linde plc


Proxy Statement Highlights

 

 

Proxy Statement Highlights

This summary highlights selected information in this Proxy Statement.  Please review the entire document before voting.

Annual General Meeting of Shareholders of Linde plc

 

Date

Time

Location

Admission

Monday, July 25, 2022

1:00 PM UK time

(8:00 AM Eastern Daylight Time in the U.S.)

Corinthia Hotel

Whitehall Place

Westminster

London,

SW1A 2BD

United Kingdom

See “Attending the Annual General Meeting” on page 93 for instructions.

 

 

 

 

 

Please see the notice above regarding a potential change to the in-person meeting place and/or the cancellation of holding the in-person meeting format as a result of the COVID-19 pandemic.

 

Shareholders may, by technological means, participate in the 2022 Annual General Meeting in Ireland in accordance with the section 176 of the Irish Companies Act 2014 by attending the offices of Arthur Cox LLP, Ten Earlsfort Terrace, Dublin 2, DO2 T380, Ireland at the time of the meeting.

 

 

Proposals

 

 Proposal

Board Voting

Recommendation

Explanation of Proposal and Reason(s) for Board Recommendations

Further

Information

(page)

 1.

By separate resolutions, to appoint the ten director nominees described in the proxy statement

FOR each

nominee

Directors must be elected to the Board annually. Linde’s nominees are seasoned leaders who bring a mix of skills and qualifications to the Board.

40

 2.

(a) To ratify, on an advisory and non-binding basis, the appointment of PwC as the independent auditor of the Company and (b) to authorize the Board, acting through the Audit Committee, to determine PwC’s remuneration

FOR

 

FOR

Based on its recent evaluation, Linde’s Audit Committee believes that the retention of PricewaterhouseCoopers as the Auditor for 2022 is in the best interests of the Company and its shareholders.  The Company requests shareholders’ non-binding ratification of the Auditor’s retention and the authorization for the Audit Committee to determine the Auditor’s remuneration.

45

 3.

To approve, on an advisory and non-binding basis, the compensation of the Company’s named executive officers as required under applicable U.S. law and SEC rules

FOR

Shareholders must vote annually on whether to approve the compensation paid to Linde’s five most highly compensated executive officers (“Say-On-Pay” vote).  Linde’s executive compensation program reflects its commitment to paying for performance. This vote is required under applicable U.S. law and SEC rules.

81

 4.

To approve, on an advisory and non-binding basis, the Directors’ Remuneration Report for the financial year ended December 31, 2021, as required under Irish law

FOR

In accordance with European Union law as implemented in Ireland, Shareholders’ must vote annually on the Directors’ Remuneration Report.  Linde’s Directors’ Remuneration Report for the year ended December 31, 2021, is included in the 2021 IFRS Annual Report and in Appendix 1 to this Proxy Statement. This vote is required under Irish law. As this Report applies to Linde Directors only, it is distinguished from our non-binding advisory vote in respect of the compensation for the Company’s named executive officers in voting item 3 as required under U.S. laws and SEC rules.

82

 

Linde plc  |  3


Proxy Statement Highlights

Proposals

 

 5.

To determine the price range at which the Company can re-allot shares that it acquires as treasury shares under Irish law

FOR

The Board has authorized the Company’s share repurchase programs and believes that such programs enhance shareholder value as a means of returning capital to shareholders. Repurchased shares are held as treasury shares until they are either cancelled or used to fund employee and Director stock compensation awards.  Irish law requires periodic shareholder approval of the price range at which treasury shares may be re-allotted for these purposes.

83

 6.

Shareholder Proposal regarding eliminating supermajority shareholder votes.

AGAINST

The proposal requests that the Board take steps to amend Linde’s Irish Constitution so that any shareholder vote requirement is a simple majority of the votes cast at a shareholder meeting and that any greater vote requirement (a “supermajority vote”) be reduced to a simple majority. The Board has considered the proposal and has concluded that it is not in shareholders’ best interest because of the 10 supermajority vote requirements in the Constitution: (1) five are mandated by Irish law and cannot be reduced, and (2) the other five provide shareholders with various protections under Irish law and the supermajority vote of four of these provisions simply reflect the default voting requirements provided under Irish law.

84

 

 

 

How to Vote

Your vote is important. You are eligible to vote if you are a shareholder of record at 1:00 p.m. United Kingdom time on July 23, 2022.  Even if you plan to attend the meeting, please vote as soon as possible using one of the following methods. In all cases, you should have your proxy card in hand.

 

Your Vote is Important

Online

By Phone

By Mail

In person

 

 

www.proxyvote.com

 

 

1-800-690-6903

Fill out your proxy card and submit via mail

Attend in person at the above time and location. Please

bring a photo ID.

 

 

  4  |  Linde plc


Proxy Statement Highlights

2021 Business Performance Highlights

 

 

2021 Business Performance Highlights

2021 Year in Review

Linde employees once again demonstrated their steadfast commitment to supply products and services safely and reliably to millions of customers around the globe.  With our dense network and high-performance culture, the company supplied critical industrial gases and engineering for world scale projects.

In 2020, Linde demonstrated the resiliency of the operating model and this year it proved its ability to leverage the economic recovery.  Sales grew 13% to $31 billion, earnings per share grew 30% to $10.69, operating cash flow increased 31% to $9.7 billion and after-tax return on capital rose 430 basis points to 17.7%.  Pricing actions coupled with productivity efforts globally enabled operating margins to expand 200 basis points, or 270 basis points excluding the effects of contractual energy cost pass through.  Linde increased its dividend by another 10%, representing the 28th consecutive year of dividend increase. These results are a testament to Linde’s ability to outperform in any macro-economic environment.

Financial highlights

 

Sales growth of 13%

 

Operating margin expanded by 200 basis points to 23.3%(a)

 

Earnings per share increased by 30%, following a 13% increase in 2020(a)

 

After-tax return on capital increased by 430 basis points to 17.7%(a)

 

Operating cash flow increased 31% to $9.7 billion

 

Business highlights

 

Record backlog providing a strong growth foundation for the next several years

 

Strong pipeline of new opportunities in Clean Energy, tracking approximately 300 projects with an estimated value of $5B

 

Reduced greenhouse gas intensity by 24%; on track to meet overall 35% reduction goal by 2028(b)(c)

 

Announced more ambitious medium and long-term greenhouse gas emission targets, including 35% absolute emissions reduction by 2035 and climate neutrality by 2050(c)

 

Included in the Dow Jones Sustainability World Index for 19th consecutive year

 

Awarded by CDP ‘A’ rating for Water Stewardship

 

Continued to prioritize diversity and inclusivity; at 28% gender diversity, on track to exceed gender diversity goal of 30% professional female employees by 2030

 

Maintained best in class safety performance, despite challenging environment

 

 

(a)

Adjusted operating margin, earnings per share and after-tax return on capital are non-GAAP measures.  Adjusted operating margin and earnings per share amounts are reconciled to reported amounts in the “Non-GAAP Financial Measures” Section in Item 7 of the Linde plc 2021 Form 10-K.  For definition of after-tax return on capital and reconciliation to GAAP please see the “Non-GAAP Measures and Reconciliations” set forth in the financial tables that are included as an appendix to the 4th quarter and full year 2021 earnings press release that was furnished in the Linde plc Form 8-K filed on February 10, 2022.

 

(b)

Million tons of Co2 equivalent divided by adjusted EBITDA

 

(c)

GHG emission reduction targets relate to Linde’s Scope 1 and 2 emissions.

 

Linde plc  |  5  


Proxy Statement Highlights

2021 Business Performance Highlights

 

 

Returned $6.8 billion to shareholders

 

Dividend increased by 10%

 

Share repurchases, net of issuances, in the amount of $4.6 billion

 

Total shareholder return for 2021 was 33.4%

 

The graph below compares the most recent five-year cumulative returns of the common stock of Praxair, the Company's predecessor, through October 31, 2018 (the date of the closing of the Praxair-Linde AG Business Combination) and Linde's ordinary shares from October 31, 2018 through December 31, 2021 with those of the Standard & Poor’s 500 Index ("SPX") and the S5 Materials Index ("S5MATR") which covers 28 companies, including Linde. The figures assume an initial investment of $100 on December 31, 2016 and that all dividends have been reinvested.

 

 

 

 

2016

2017

2018

2019

2020

2021

LIN

$100

$135

$139

$194

$244

$325

SPX

$100

$122

$117

$153

$181

$233

S5MATR

$100

$124

$106

$132

$159

$202

 

 

 

 

 

 

  6  |  Linde plc


Proxy Statement Highlights

Board and Governance Highlights

 

 

Board and Governance Highlights

 

Corporate Governance Highlights

Linde plc has a strong corporate governance structure that compares favorably to that of other large public companies and to the standards of recognized governance organizations.  A summary of the key aspects of Linde plc’s corporate governance structure is set forth below, followed by a more detailed discussion of certain governance matters.

 

Board and Governance Information

Size of Board

10

Annual Board and Committee Evaluations

Yes

Number of Independent Directors

 

8

80%

Limits service on other Boards for Directors
(4 other public company Boards)

Limits service on other Boards for CEO

(2 other public company Boards)

Yes

 

Yes

Split Chairman and CEO

Yes

Succession Planning Process

Yes

Lead Independent Director

Yes

 

 

Board Committees (Audit, Human Capital, Nomination and Governance, Sustainability and Executive)

5

Board Risk Oversight

Yes

Board Meetings

5

Code of Conduct for Directors, Officers and Employees

Yes

Annual Election of Directors

Yes

Stock Ownership Guidelines for Directors and Executive Officers

Yes

Mandatory Retirement Age

72

Anti-Hedging and Pledging Policies

Yes

Board Diversity – two women, one African American Director

Yes

Clawback Policy

Yes

Average Director Age

63.2

Rights Agreement (Poison Pill)

No

Average Director Tenure (Years)

2.6

Board Sustainability Oversight

Yes

Majority Voting in Director Elections

Yes

Shareholders May Call Special Meetings

Yes

Proxy Access

Yes

 

 

Public Company Legal and Regulatory Framework

Linde plc is incorporated in Ireland and is subject to Irish corporate law pursuant to the Irish Companies Act 2014.  In addition, Linde plc ordinary shares are listed and trade on the New York Stock Exchange (“NYSE”) and the Frankfurt Stock Exchange (“FSE”).  Linde plc’s primary governance obligations arise from its designation as a domestic issuer for NYSE purposes and, as such, the Company is subject to the corporate governance rules of the NYSE, requiring it to adopt certain governance policies (which the Company has complied with), and to the reporting and other rules of the United States Securities and Exchange Commission (the “SEC”) requiring it to file Forms 10-K, 10-Q, 8-K, proxy statements and other public company reports.  The Company is also subject to applicable laws of the European Union.

 

 

Linde plc  |  7  


Proxy Statement Highlights

Board and Governance Highlights

 

 

Board of Directors and Nominees

The following ten persons currently serve on the Board of Directors and have been nominated for re‑appointment to serve until the 2023 annual general meeting of shareholders and the election and qualification of their successors.

 

 Name

Age

Director

Background

Independent

Current

Other Current Public

 

 

Since

 

Yes

No

Committee

Memberships (1)

Company Boards

Stephen F. Angel

66

2018

Chairman of the Board of Linde plc; former Chief Executive Officer of Linde plc; former Chief Executive Officer and Chairman of the Board of Praxair, Inc.

 

X

EX

•    General Electric Company

•    PPG Industries, Inc.

Sanjiv Lamba

57

2022

Chief Executive Officer of Linde plc; former Chief Operating Officer of Linde plc

 

X

EX

 

Prof. DDr. Ann-Kristin Achleitner

56

2018

Scientific Co-Director, Center for Entrepreneurial and Finance Studies, Technical University Munich, Germany

X

 

HC, SC

•    Lazard Ltd.

   Münchener Rückversicherungs-Gesellschaft AG

 

Dr. Thomas Enders

63

2018

Former Chief Executive Officer & Member of Executive Committee, Airbus SE

X

 

Chair of SC, AC, EX

   Knorr-Bremse AG

•    Lilium B.V.

   Lufthansa Group

 

Edward G. Galante

71

2018

Former Senior Vice President and a member of the Management Committee of ExxonMobil Corporation

X

 

Chair of HC, NG

   Celanese Corporation

   Clean Harbors, Inc.

   Marathon Petroleum

Joe Kaeser

64

2021

Former President and Chief Executive Officer of Siemens AG

X

 

Chair of NG, HC

•    Daimler Truck Holding AG

•    NXP Semiconductors B.V. (until June 1, 2022)

•    Siemens Energy AG

 

Dr. Victoria E. Ossadnik

53

2018

Management Board member and Chief Operating Officer – Digital-

E. ON SE

X

 

AC, NG

   E.ON SE

 

Prof. Dr. Martin H. Richenhagen

69

2018

Former Chief Executive Officer, President and Chairman of the Board of AGCO Corporation

X

 

Chair of AC, HC

   AXIOS Sustainable Growth Acquisition Corporation

   Daimler Truck Holding AG

   PPG Industries, Inc.

Alberto Weisser

66

2021

Former Chairman and Chief Executive Officer of Bunge Limited

X

 

AC, SC

•    Bayer AG

•    PepsiCo

Robert L. Wood

68

2018

Lead Independent Director of Linde Plc; Partner, The McChrystal Group; Former Chairman, President & Chief Executive Officer of Chemtura Corporation

X

 

HC, SC, EX

   MRC Global Inc.

   Univar Inc.

 

(1)

Committees:    AC means Audit Committee; HC means Human Capital Committee; EX means Executive Committee; NG means Nomination and Governance Committee; SC means Sustainability Committee

 

 

  8  |  Linde plc


Proxy Statement Highlights

Compensation Highlights

 

 

Compensation Highlights

Alignment of Executive Compensation Programs with Linde Business Objectives

 

 

 

The Human Capital Committee seeks to achieve its executive compensation objectives by aligning the design of the Company’s executive compensation programs with the Company’s business objectives ensuring a balance between financial and strategic non-financial goals.

FINANCIAL BUSINESS OBJECTIVES: Achieve sustained profitable growth and shareholder return resulting in a robust cash flow to fund capital investment growth opportunities, dividend payments and share repurchases.

 

Annual performance-based variable compensation earned by meeting or exceeding pre-established financial goals.

 

 

Annual grants of performance share units that vest based upon performance results over three years.

 

 

Annual grants of stock options, the value of which is directly linked to the growth in the Company’s stock price.

 

 

Annual grants of restricted stock units with three-year cliff vesting and value based on the Company’s stock price.

 

STRATEGIC BUSINESS OBJECTIVES: Maintain world-class standards in safety, environmental responsibility, global compliance, strategic positioning, productivity, talent management, and financial controls.

 

Annual payout of variable compensation is impacted by performance in these strategic and non-financial objectives.

Attract and retain executives who thrive in a sustainable performance-driven culture.

 

A competitive compensation and benefits program regularly benchmarked against peer companies of similar size in market capitalization, revenue and other financial metrics and business attributes.

 

 

Realized compensation that varies with Company performance, with downside risk and upside opportunity.

 

Annual Performance-Based Variable Compensation Program Design

 

 

In January 2022, in recognition of the importance of the Company’s standards for, and impacts from environmental, social and governance (ESG) considerations, the Human Capital Committee approved changes to the non-financial component of the annual variable compensation program, which will continue to be weighted 25% of the total payout.  

 

The non-financial component will now be comprised of three pillars, each with their own weights: 1) reduction in absolute greenhouse gas emissions (weighted 20% of non-financial component), 2) ESG values: safety, health & environment; sustainability (excluding greenhouse gas emissions), compliance & integrity; and human capital (weighted 60%), and 3) the Company’s relative performance and strategic positioning (weighted 20%).

 

 

 

 

 

Linde plc  |  9  


Proxy Statement Highlights

Compensation Highlights

 

 

 

Best Practices Supporting Executive Compensation Objectives

What We Do:

Link a substantial portion of total compensation to Company performance:

Annual variable compensation awards based principally upon performance against objective, pre-established financial goals

Equity grants consisting largely of PSUs and stock options, focused on longer term shareholder value creation

Set compensation within competitive market ranges

Require substantial stock ownership and retention requirements for officers

Limit perquisites and personal benefits

Have a clawback (“recapture”) policy that applies to performance-based cash awards and equity grants, including gains realized through exercise or sale of equity securities

 

What We Do Not Do:

X Guarantee bonuses for executive officers

X Allow pledging or hedging of Company stock held by officers

X Pay tax “gross-ups” on perquisites and personal benefits unless related to international assignment benefits that are available to employees generally

X Include the same metrics in the short and long-term incentive programs

X Allow backdating or repricing of stock option awards

X Pay or accrue dividends or dividend equivalents on unvested PSU and RSU awards

X Include an excise tax “gross-up” provision in the event of a change-in-control

X Accelerate equity award vesting upon change-in-control

 

 

 

 

 

 

  10  |  Linde plc


Proxy Statement Highlights

Environmental, Social and Governance Highlights

 

 

Environmental, Social and Governance Highlights

Commitment to Environmental, Social and Governance (“ESG”) Matters

Our core values – Safety, Inclusion, Accountability, Integrity and Community – combined with our mission of Making our World more Productive, underpin our commitment to the environment and social responsibility. From the oversight exercised by Linde’s Board of Directors to the culture of sustainability driven by our mission statement, our commitment to ESG matters is embedded in our company culture and operating rhythm.  

Linde’s System of ESG management is focused on four priority pillars: Climate Change; Safety, Health & Environment; People & Community; and Integrity & Compliance. Details on these pillars are provided in our annual Sustainability Report which also describes our approach to ESG, including materiality assessment, determination of priorities, target setting, performance measurement, and continued surveillance and improvement.  

Linde has two sets of targets, which coexist: SD 2028 Targets, which cover the period from 2018-2028, and recently announced targets for absolute GHG reduction by 2035 and climate neutrality ambition by 2050.  We regularly review key actions and continue to report on  progress toward the SD 2028 targets annually. Going forward we will include reporting on progress against the most recent climate change commitments.  The Sustainable Development Report and other ESG information are available on our website https://www.linde.com/sustainable-development.   

While we continue to work towards meeting or exceeding the goals across these priority pillars set forth in our Sustainable Development Report, the following are key actions undertaken in 2021:

 

We announced our new absolute greenhouse gas reduction target of 35% by 2035 and our ambition to achieve climate neutrality by 2050.

 

 

We reaffirmed Linde’s commitment to global human rights through the release of our global human rights policy.

 

Linde plc  |  11  


Proxy Statement Highlights

Environmental, Social and Governance Highlights

 

 

We released Linde’s water position statement, confirming our commitment to water stewardship across the globe.

 

 

The Board of Directors performed a comprehensive review of and realigned and enhanced its oversight of ESG (see “Board Oversight of ESG Matters” below).

 

 

 

We incorporated a greenhouse gas reduction metrics as part of the non-financial factors considered in our Short-Term Incentive Plan compensation, with ESG factors comprising 20% of the payout.

 

Our leadership and performance on sustainability and ESG received widespread external recognition in 2020-2021.  These are listed on our website at https://www.linde.com/sustainable-development/awards-and-recognition.  Examples include: :

 

Selected to Dow Jones

Sustainability World Index

For the 19th consecutive year

 

Included in S&P Global’s
Sustainability Yearbook
in recognition of strong
sustainability track record

 

Included as a FTSE4Good
Index
Series Constituent

 

 

 

 

 

Recognized as one of the
2021 World’s Most Ethical
Companies
by Ethisphere

 

Received ‘A’ rating for Water
Stewardship
and ‘A-’ rating
for climate change
from the
Carbon Disclosure Project

 

Recognized as a Best Employer
by Forbes
and a Noteworthy
Company by DiversityInc

 

 

 

Board Oversight of ESG Matters

Overview; 2021 ESG Review and Changes to Board Structure

The Board’s oversight of ESG risks and opportunities is integral to our business strategy. The Board and its committees actively oversee Linde’s ESG strategy, programs and policies, which in turn are managed on a day-to-day basis by senior executives including the CEO and his direct reports.

In 2021, the Board, through the Nomination and Governance Committee, conducted a comprehensive review of its oversight of Linde’s ESG programs and practices to ensure that the Board or one of its committees has appropriate oversight responsibility.  As a result of this review, the Board (1) created the new Sustainability Committee to focus on environmental matters, including climate change, decarbonization solutions, greenhouse gas emission reduction, and other key programs and initiatives; (2) expanded the scope of and renamed the “Compensation Committee” to the “Human Capital Committee” to reflect that committee's enhanced oversight of policies, practices and goals related to Linde's workforce generally, including diversity and inclusion, safety and community engagement; and (3) revised the charters of certain committees to more clearly specify the ESG programs and practices overseen by these committees. The Nominating and Governance Committee actively monitors the changing ESG landscape and recommends changes to Linde’s governance programs and practices. Below is a summary of the Board’s, its committees’ and senior management’s oversight of key ESG matters

 

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Proxy Statement Highlights

Environmental, Social and Governance Highlights

 

 

 

 

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Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

 

Linde operates under Corporate Governance Guidelines which are posted at Linde’s public website, www.linde.com in the About Linde/Corporate Governance section.  Consistent with those guidelines, the charters of the various Board committees and Linde’s Constitution, the Board has adopted the following policies and practices, among others:

Director Independence

 

 

The Board has adopted independence standards for service on Linde’s Board of Directors which are posted at Linde’s public website referenced above.  The Board has applied these standards to all the directors and has determined that each qualifies as independent except for Mr. Angel, the Company’s Chairman of the Board and former Chief Executive Officer, and Mr. Lamba, the Company’s current Chief Executive Officer.  The Board is not otherwise aware of any relationship with the Company or its management that could potentially impair the independent judgment of these directors.  See also related information in this Proxy Statement under the caption “Certain Relationships and Transactions.”

 

Board Leadership

 

 

In General

Linde’s Corporate Governance Guidelines provide the Board with flexibility to determine the appropriate Board leadership structure from time to time.  The Nomination and Governance Committee (consisting entirely of independent directors) regularly reviews the leadership structure, and considers many factors, including the specific needs of Linde and its businesses, corporate governance best practices, shareholder feedback and succession planning, as different structures may be appropriate in different circumstances. The Corporate Governance Guidelines also provide that the Board: (a) shall select a Chairman of the Board and determine his/her duties and responsibilities; and (b)  If the Chairman of the Board has not been determined to be independent in accordance with the Board’s independence standards and those of the New York Stock Exchange and applicable law, then the Board may appoint a Lead Independent Director who has been determined to be independent under such standards and determine his/her responsibilities.

Given the recent leadership transition discussed below, the Board believes that the best leadership model for Linde at this time is that the position of the Chairman of the Board should continue to be separate from that of the Chief Executive Officer.  In addition to assure effective independence in the Board’s oversight, advice and counsel of management, the Board believes that the appointment of a Lead Independent Director is appropriate.  

 

2022 Leadership Transition and New Structure

 

Effective March 1, 2022, after the Board’s thorough and thoughtful Chief Executive Officer succession planning process, Sanjiv Lamba was appointed Linde’s new Chief Executive Officer (having served as the Chief Operating Officer since January 2021) and a member of the Board, succeeding Stephen F. Angel who served as CEO since 2018. The Board also elected Mr. Angel as the new Chairman of the Board to succeed Wolfgang Reitzle who retired from the Board. In addition, the Board appointed Robert L. Wood as the Lead Independent Director. The Board believes this new leadership structure is effective and appropriate and in the best interests of Linde and its shareholders. With Mr. Angel as Chairman of the Board, Linde continues to leverage his significant industry expertise, prior CEO experience and effective working relationship with the Board to lead the Board and focus its attention on strategic matters and facilitate effective communication between the Board and management. As the Lead Independent Director

 

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Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

with clearly defined responsibilities, Mr. Wood ensures robust independent oversight of the Company by the Board.

 

Chairman of the Board Responsibilities

 

The Board believes that while the Chairman and CEO roles should be separate at this time, the Chairman should work collaboratively with the CEO who has the day-to-day familiarity with the business issues confronting the Company and an understanding of the specific areas in which management seeks advice and counsel from the Board.  The designated responsibilities of the Chairman are set forth in the Board’s Corporate Governance Guidelines and include, among others:

 

Serving as chairman of the meetings of the Board (other than meetings solely of the independent directors);

 

 

Having the authority to call meetings of the Board;

 

 

Serving as a liaison between the Board and the CEO;

 

 

Being available to consult with the CEO about the concerns of the Board;

 

 

Approving the Board meeting agendas and related information sent to the Board;

 

 

Approving the Board meeting schedules to assure that there is sufficient time for discussion of all agenda items;

 

 

Being available for consultation and direct communication with major shareholders if requested; and

 

Coordinating an annual performance review of the CEO with input from the Human Capital Committee and the Independent   Directors.

 

Lead Independent Director Responsibilities

 

The roles and responsibilities of the Lead Independent Director will be determined by the Board periodically and reviewed at least annually. It is the Board’s current policy that such duties include, among others, the following:

 

Providing advice and assistance to the Chairman, as requested;

 

 

Consulting on and approving, in consultation with the Chairman, the agendas for and the scheduling of meetings of the Board;

 

 

Chairing meetings of the Board in the absence of the Chairman;

 

 

Serving as a liaison between the Chairman and the Independent Directors;

 

 

Calling and chairing executive sessions of the Independent Directors if required;

 

 

Reviewing in consultation with the Chairman, the quality, quantity, appropriateness, and timeliness of information provided to the Board; and

 

 

Communicating with shareholders and other stakeholders in consultation with the Chairman and Chief Executive Officer

 

 

 

 

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Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

 

Board Role in Risk Oversight

 

 

At least annually, the Board reviews the Company’s risk identification, assessment and management processes and the guidelines and policies by which key risks are managed.  As part of that review, the Board discusses (1) the key enterprise risks that management has identified, (2) management accountability for managing or mitigating each risk, (3) the steps being taken to manage each risk, and (4) which Board Committees will oversee each risk area on an ongoing basis.

The risk factors disclosed in Item 1A of the Company’s Form 10-K and Annual Report illustrate the range of the risks faced by a global industrial company and help explain the need for strong Board Committee oversight of the management of risks in specific subject areas.  Each Committee’s calendar of recurring meeting agenda topics addresses risk areas pertinent to the Committee’s subject-matter responsibilities.  These areas include: financing and currency exchange risks (Audit Committee); compensation risks, and executive development and retention (Human Capital Committee); regular

review of the Board’s governance practices (Nomination and Governance Committee); internal controls, investigations, and integrity standards compliance (Audit Committee); and risks related to climate change (Sustainability Committee). Other risk areas are regularly reviewed by the full Board.  These include: safety (covered at each Board meeting), economic, market and competitive risk (part of business operating reports at each Board meeting, and the annual operating and strategic reviews), geopolitical risks, cyber security, and global compliance risks (supplementing reporting within the Audit Committee).  In addition, risk identification and assessment is integrated into Board decision-making with respect to capital projects and acquisitions, entry into new markets, financings, and cash flow analysis, among other matters.  In Committee meetings and full Board deliberations, each director brings his or her particular operating, financial, management development, and other experiences and expertise to bear in assessing management’s response to specific risks and in providing advice and counsel with respect to risk mitigation and management.

 

Board Oversight of Business Strategy

 

 

Each year, the Board conducts a comprehensive long-term strategic review of the Company’s outlook and business plans and provides advice and counsel to management regarding the Company’s strategic issues.  This process involves engagement by all Board members and senior management.  The Board performs a detailed review of management’s proposed strategy for each of the key business units, which is designed to drive profitable growth over the near-and long-term independent of the macro environment and drive long-term shareholder value creation.

 

 

Board Effectiveness Assessment

 

 

The Board assesses its effectiveness annually under a process determined by the Nomination and Governance Committee.  Typically, this assessment includes each non-management director completing written questionnaires that are used to evaluate the Board’s effectiveness in the areas of Performance of Core Responsibilities, Decision-Making Support, the Quality of Deliberations, Director Performance, and Committee Functions, as well as consideration of additional Board practices and policies recommended as best practices by recognized governance authorities.  Similarly, each Committee annually assesses its effectiveness in meeting its oversight responsibilities under its charter from the Board.  The Nomination and Governance Committee reviews the results of the written assessments, provides the results to all Board members, and the Chairman may conduct a discussion of the results in an executive session of the non-management directors. Subsequently, the Nomination and Governance Committee may recommend certain actions be taken to enhance the operations and effectiveness of the Board and its committees.

 

 

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Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

 

The Nomination and Governance Committee conducted the assessment process in 2021. The results were very favorable, and the Committee concluded that the Board and its committees are functioning properly and efficiently and are performing the core responsibilities of the Board generally and that the committees are meeting their key charter responsibilities.    

 

Governance Practices Review

 

 

In addition to leading the annual Board and Committee effectiveness assessment referred to above, the Nomination and Governance Committee annually reviews the Company’s governance practices (which may include an outside expert) and updates those practices as it deems appropriate.  The Committee considers, among other things, the results of the Board and Committee effectiveness assessments, developments in Irish company law, federal laws and regulations promulgated by the SEC, applicable public company and related standards of the European Union (“EU”), and the views and standards of recognized governance authorities and institutional investors.

 

Succession Planning and Personnel Development

 

 

In addition to periodic senior management talent and succession reviews conducted by the Board, the Human Capital Committee conducts an annual Succession Planning and Personnel Development session to which all Board members are invited and at which executives are evaluated with respect to their potential for promotion into senior leadership positions, including that of the CEO.  In addition, a variety of executives are introduced to the Board by way of Board and Committee presentations, and directors have unrestricted access to a broad cross-section of managers and high potential employees.

 

During 2021, the Board completed a thorough CEO succession planning process that resulted in the selection of Sanjiv Lamba as the Company’s new CEO to replace Stephen F. Angel upon his retirement as CEO effective March 1, 2022.

 

Mandatory Director Retirement

 

 

The Board’s policy is that a director who has attained the age of 72 may not stand for re-election at the next annual shareholders’ meeting.  However, for the three-year period following the closing of the Praxair-Linde AG business

combination on October 31, 2018 (the “Integration Phase”), this retirement requirement did not apply to the directors (including their replacements) who began to serve on the Board in October 2018 to ensure continuity.

 

As required by this policy, the following five directors retired from the Board of Directors in 2022: Prof. Dr. Wolfgang Reitzle, Prof. Dr. Clemens Börsig, Dr. Nance K. Dicciani, Franz Fehrenbach and Larry D. McVay. Therefore, beginning in 2020, the Board, through the Nomination and Governance Committee, began a comprehensive review and planning process for such retirements and commenced new director recruitment (See “Director & Nominee Selection Criteria-Director Retirement and Recruitment” below). This resulted in the appointment of Joe Kaeser and Alberto Weisser as new directors, effective November 1, 2021.  

 

Limits to Service on Other Boards

 

 

The Board’s policy is that a non-management director may not serve on more than four additional public company boards, and the CEO may not serve on more than two additional public company boards.

 

Also, a member of the Audit Committee may not serve on more than two additional public company audit committees unless the Board determines that such simultaneous service would not impair the ability of such member to effectively serve on the Audit Committee.  If the Board so determines, it will disclose such determination in the Company’s annual proxy statement.

 

 

 

Linde plc  |  17  


Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

 

 

 

Shareholder Outreach and Communications with the Board

 

 

The Company has a robust shareholder outreach program which ensures that the Board and management remain responsive to shareholder concerns.  This includes ongoing interaction between Investor Relations and major institutional investors, as well as an extensive shareholder outreach program that is conducted annually. In addition, the Board has established procedures to enable a shareholder or other interested party to direct a communication to the Board of Directors.  Such communications may be confidential or anonymous and may be communicated by mail, e-mail, or telephone.  Information on how to submit communications, and how they will be handled, is included at www.linde.com in the About Linde/ Corporate Governance section.

 

 

 

Director Attendance at Board and Committee Meetings and the Annual Shareholders Meeting

 

 

Absent extenuating circumstances, each member of the Board is expected to attend all meetings of the Board, all meetings of each Committee of which he or she is a member, and the Annual General Meeting of Shareholders.  Director meeting attendance is one of the factors that the Nomination and Governance Committee considers in determining whether to re-nominate an incumbent director for election at the Annual General Meeting.

 

All members of the Board attended the 2021 AGM.

 

 

Business Integrity and Ethics

 

 

Linde’s Board of Directors has adopted a Code of Business Integrity that is posted on Linde’s public website, www.linde.com, in the About Linde/Corporate Governance section and is available in print to any shareholder who requests it.  This Code of Business Integrity applies to Linde’s directors and to all employees, including Linde’s CEO, CFO, Chief Accounting Officer and other officers.

 

Director Election by Majority Vote and Resignation Policy

 

 

Linde’s Constitution requires directors to be elected annually and that a director nominee must receive a majority of the votes cast at an annual general meeting in order to be elected (meaning a greater number of “for” votes than “against” votes) in an uncontested election of directors.  The Board’s Tenure and Resignation Policy requires that any director nominee who is then serving as a director must tender his or her resignation if he or she fails to receive this majority vote.  The Nomination and Governance Committee of the Board would then consider the resignation offer and recommend to the Board whether to accept or reject the resignation, or whether other action should be taken.  The Board would take action on the Committee’s recommendation within 90 days following certification of the vote, and promptly thereafter publicly disclose its decision and the reasons therefor.

 

 

Proxy Access

 

Linde’s Constitution provides that a shareholder, or a group of up to 20 shareholders, who have owned at least 3% of the Company’s outstanding ordinary shares continually for at least three years, may nominate persons for election as directors and have these nominees included in the Company’s proxy statement.  The shareholders or group must meet the requirements in the Company’s Constitution.  The number of nominees is generally limited to the greater of two persons or 20% of the number of directors serving on the Board.

 

 

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Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

 

Shareholder Rights Agreements

 

 

The Company does not have a Shareholder Protection Rights Agreement (sometimes referred to as a “Poison Pill”).  It is possible for Linde plc to adopt a shareholder rights agreement in certain circumstances.  As Linde plc is an Irish public company with securities admitted to trading on NYSE and the Frankfurt Stock Exchange, it is subject to the Irish Takeover Panel Act, 1997 Takeover Rules 2013, which govern certain aspects of the manner in which a takeover offer can be made for shares in Linde plc.  If an offer has been made or is deemed to be imminent, Linde plc is prevented from engaging in frustrating action.  The adoption of a shareholder rights agreement would constitute frustrating action, meaning that it could only be adopted on a “clear day” where no such offer is anticipated.

 

Extraordinary General Meetings of Shareholders

Shareholders of the Company holding not less than 5% of the paid up share capital of the Company may call an extraordinary general meeting of shareholders in accordance with the provisions set forth in Linde’s Constitution.

Director Stock Ownership Guidelines

 

 

The Board’s policy is that non-management directors must acquire and hold the Company’s ordinary shares equal in value to at least five times the annual base compensation retainer awarded in the form of equity or equity-based awards.  Directors have five years from their initial election to meet this guideline.  All non-management directors have met this guideline or are within the five-year transition period afforded to them to do so.  See the section titled “Information on Share Ownership” in this Proxy Statement.

 

 

Executive Stock Ownership and Shareholding Policy

 

 

The Board believes that it is important for executive officers to acquire a substantial ownership position in Linde.  In this way, their interests are more closely aligned with those of shareholders.  Significant stock ownership ensures that executives manage Linde as equity owners.

 

Accordingly, a stock ownership and shareholding policy has been established for the Company’s executive officers that requires them to own a minimum number of ordinary shares equal or greater in value to a multiple of their base salary, as set forth below.  Individuals must meet the applicable ownership level within five years after first becoming subject to the guidelines by acquiring at least 20% of the required level of stock ownership each year.  Until the stock ownership requirement is met, executive officers (i) may not sell, transfer or otherwise dispose of any of their Linde ordinary shares and (ii) must retain and hold all Linde ordinary shares acquired from all equity incentive awards, net of shares withheld for taxes and option exercise prices, including performance share unit awards, restricted stock unit awards and stock options.

Set forth below is the stock ownership required by the policy expressed as a multiple of base salary for each executive officer position.  As of the date of this Proxy Statement, all covered individuals are in compliance with this policy.  Stock ownership of the Named Executive Officers can be found in the table presented under the section titled “Information on Share Ownership.”

 

 

 

 

Share ownership as a multiple of base salary

 Chief Executive Officer

 

6X

 Chief Financial Officer

 

3X

 Other Executive Officers

 

3X

 

 

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Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

 

 

 

Hedging, Pledging and Similar Transactions Prohibited. The purpose of the Director and Executive Stock Ownership Policies is to ensure that directors and executive leaders will have a meaningful ownership stake in Linde so that their interests will be aligned with shareholder interests. Any investment activities intended to reduce or eliminate the economic risk that ordinarily accompanies such ownership would defeat this purpose. Therefore, directors and executive leaders may not engage in hedging transactions related to Linde’s stock that would have the effect of reducing the economic risk of their holding Linde stock. This prohibition applies to any Linde stock that a director or executive leader beneficially owns, regardless of whether he/she has fulfilled all or any part of the total stock ownership requirement as set forth above.  For example, a director or executive leader may not purchase a “put option” on Linde stock or on certain derivative market instruments of which Linde is a significant component (more than 5%).

Directors and executive leaders also may not pledge or otherwise encumber Linde stock that they own.

 

Review, Approval or Ratification of Transactions with Related Persons

 

 

The Company’s Code of Business Integrity (“Ethics Policy”) prohibits employees, officers and Board members from having a personal, financial or family interest that could in any way prevent the individual from acting in the best interests of the Company (a “conflict of interest”) and provides that any conflict of interest waiver relating to Board members or executive officers may be made only after review and approval by the Board upon the recommendation of its Audit Committee.  In addition, the Board’s Corporate Governance Guidelines require that any “related party transaction” by an executive officer or director be pre-approved by a committee of independent and disinterested directors.  For this purpose, a “related party transaction” means any transaction or relationship that is reportable under Regulation S-K, Item 404, of the Securities and Exchange Commission (“SEC”) or that, in the case of a non-management director, would violate the Board’s independence standards.

Reporting and review procedures. To implement the foregoing policies, the Audit Committee has adopted a written procedure for the Handling of Potential Conflicts of Interests which specifies a process for the referral of potential conflicts of interests to the Board and standards for the Board’s evaluation of those matters.  This policy applies to any transaction or relationship involving an executive officer, a member of the Board of Directors, a nominee for election as a director of the Company, or a family member of any of the foregoing which (1) could violate the Company’s Ethics Policy provisions regarding conflicts of interest, (2) would be reportable under the SEC’s disclosure rules, or (3) in the case of a non-management director, would violate the Board’s independence standards.

 

Under this procedure, potential conflicts of interest are reported to the Corporate Secretary for preliminary analysis to determine whether referral to the Audit Committee is appropriate.  Potential conflicts of interest can be self-identified by the director or executive officer or may arise from internal audits, the integrity hotline or other referrals, or through periodic due diligence conducted by the Corporate Secretary’s office.  The Audit Committee then examines the facts and circumstances of each matter referred to it and makes a final determination as to (1) whether the transaction or relationship would (or does) constitute a violation of the conflicts of interest provisions of the Company’s Ethics Policy, and (2) whether the transaction or relationship should be approved or ratified and the conditions, if any, of such approval or ratification.  In determining whether a transaction or relationship constitutes a violation of the conflicts of interest provisions of the Company’s Ethics Policy, the Audit Committee considers, among other factors, the materiality of the transaction or relationship to the individual’s personal interest, whether the individual’s personal interest is materially adverse to or competitive with the interests of the Company, and whether the transaction or relationship materially interferes with the proper performance of the individual’s duties or loyalty to the Company.  In determining whether to approve or ratify a transaction or relationship, the Audit Committee considers, among other factors, whether the matter would constitute a violation of the conflicts of interest provisions of the Company’s Ethics Policy, whether the matter would violate the NYSE listing standards, the expected practical impact of the transaction or relationship on the individual’s

 

  20  I  Linde Inc.


Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

 

independence of judgment or ability to act in the best interests of the Company, the availability, practicality and effectiveness of mitigating controls or safeguards such as recusal, restricted access to information, reassignment etc., and the best interests of the Company and its shareholders generally.

Application of Policies & Procedures. During 2021, no actual or potential conflicts of interest were identified with respect to the executive officers and directors of the Company.

 

 

Certain Relationships and Transactions

 

 

When determining whether any director or nominee is independent, the Board considers all facts and circumstances and any relationships that a director or nominee may have with the Company, directly or indirectly, other than in the capacity of serving as a director.  To assist the Board in making independence determinations, it also applies the independence standards which are posted at Linde’s public website, www.linde.com in the About Linde/Corporate Governance section.  In February 2022, the Board considered the following circumstances and relationships of those directors and nominees who then had any direct or indirect relationship with the Company.  In the ordinary course of its business, Linde sells industrial gases to, and purchases certain goods or services from E. ON SE, of which Dr. Victoria Ossadnik is an executive officer; The 2021 consolidated revenues for each of Linde and E.ON SE were $31 billion and €77.4 billion, respectively. For the 2019, 2020 and 2021 fiscal years, the dollar value of Linde’s sales to, or purchases from, E.ON SE were $2.3 million, $0.1 million and $0.2 million in sales, respectively and $1.4 million, $2.0 million and $1.0 million of purchases, respectively.  Such sale and purchase transactions were well below the limits set forth in the Board’s independence standards and were significantly less than 1% of the consolidated revenues of Linde or E.ON SE.  Therefore, the Board has determined that such ordinary course business relationships are not material and do not otherwise impair the ability of Dr. Ossadnik to exercise independent judgment as a director.

 

Delinquent Section 16(a) Reports

 

 

Based solely upon a review of SEC Forms 3, 4 and 5 furnished to the Company and written representations from the Company’s executive officers and directors, the Company believes that those persons complied with all Section 16(a) filing requirements during 2021 with respect to transactions in the Company’s stock.

  

 

Director & Nominee Selection Criteria

 

 

The Nomination and Governance Committee will consider any candidate for election to the Board who is timely recommended by a shareholder and whose recommendation otherwise complies with the requirements under Linde’s Constitution.  Recommendations should be sent to the Corporate Secretary of Linde and should include the candidate’s name and qualifications and a statement from the candidate that he or she consents to being named in the proxy statement and will serve as a director if elected.  In order for any candidate to be considered by the Nomination and Governance Committee and, if nominated, to be included in the proxy statement, such recommendations must be received by the Corporate Secretary on or before the date specified in this Proxy Statement under the caption “Shareholder Proposals, Director Nominations and Other Business for the 2023 Annual General Meeting.”

 

The qualities and skills sought in director nominees are governed by the projected needs of the Board at the time the Nomination and Governance Committee considers adding a new director or renominating incumbent directors. Consistent with the Board’s Corporate Governance Guidelines, the Committee seeks to build and maintain a Board that contains a range of experiences, competencies, and perspectives that is well-suited for advice and counsel to, and oversight of, the Company’s business and operations.  In doing so, the Committee takes into account a variety of factors, including:

(1)

the Company’s strategies and its market, geographic and regulatory environments, both current and projected,

(2)

the mix of experiences, competencies, and perspectives (including gender, ethnic and

 

Linde plc  |  21  


Corporate Governance and Board Matters

Linde’s Corporate Governance Framework

 

cultural diversity) currently represented on the Board,

(3)

the results of the Board’s annual self-assessment process,

(4)

the CEO’s views as to areas in which management would like to have additional advice and counsel from the Board, and

(5)

with respect to the incumbent directors, meeting attendance, participation and contribution, and the director’s current independence status.

The Committee also seeks in each director candidate a breadth of experience and background that (a) will allow the director to contribute to the full range of issues confronting a global industrial company and (b) will qualify the director to serve on, and contribute to, any of the Board’s standing committees.  In addition, the Nomination and Governance Committee believes that every director nominee should demonstrate a

strong record of integrity and ethical conduct, an absence of conflicts that might interfere with the exercise of his or her independent judgment, and a willingness and ability to represent all shareholders of the Company.

When the need to recruit a director arises, the Nomination and Governance Committee will consult the Chairman and other directors, as well as the CEO, and may engage third party recruiting firms to identify potential candidates.  The candidate evaluation process may include inquiries as to the candidate’s reputation and background, examination of the candidate’s experiences and skills in relation to the Board’s needs at the time, consideration of the candidate’s independence as measured by the Board’s independence standards, and other considerations that the Nomination and Governance Committee deems appropriate at the time.  Prior to formal consideration by the Nomination and Governance Committee, any candidate who passes such screening would be interviewed by the Nomination and Governance Committee or its Chairman and by the Chairman of the Board and the CEO.

Additional information about the specific skills, qualifications and backgrounds of each of the director nominees is set forth in this Proxy Statement under the caption “Director Nominees.”

Proxy Access Nominees. The foregoing description applies only to the Nomination and Governance Committee’s consideration of director nominees who may be nominated by the Committee itself.  It does not apply to persons nominated by eligible shareholders under the Company’s Proxy Access structure which has separate requirements that are set forth in Linde’s Constitution.

Director Retirement and Recruitment. Under the Board’s Director Retirement Policy, the following five directors retired from the Board effective March 1, 2022: Prof. Dr. Wolfgang Reitzle, Prof. Dr. Clemens Börsig, Dr. Nance K. Dicciani, Franz Fehrenbach and Larry D. McVay. Therefore, during 2020, the Governance and Nomination Committee began a comprehensive process to review the director retirements and to plan for Board refreshment by recruiting new directors to join the Board. The Committee engaged the services of reputable international recruitment firm and directed the search to include the key elements of Board diversity discussed above. This resulted in the recruitment and appointment of Alberto Weisser and Joe Kaeser as new directors, effective November 1, 2021.  The Committee may continue the recruitment process to recruit additional directors if it is desirable.

 

 

 

 

 

 

 

  22  |  Linde plc


Corporate Governance and Board Matters

Board Committees

 

 

Board Committees

The Board currently has five standing committees as described below and each is comprised of only independent directors except for the Executive Committee of which the Chairman of the Board and the CEO are members.  The Charters for each of these committees may be found on Linde’s public website, www.linde.com, in the About Linde/Corporate Governance section.

 

Board Director

 

Audit

Committee

 

Human Capital 

Committee

 

Executive

Committee

 

Nomination

and

Governance

Committee

 

Sustainability Committee

Stephen F. Angel (Chairman)

 

 

 

 

 

Chair

 

 

 

 

Sanjiv Lamba (Chief Executive Officer)

 

 

 

 

 

 

 

 

 

Prof. DDr. Ann-Kristin Achleitner

 

 

 

 

 

 

 

 

Dr. Thomas Enders

 

 

 

 

 

 

 

Chair

Edward G. Galante

 

 

 

Chair

 

 

 

 

 

Dr. Victoria E. Ossadnik

 

 

 

 

 

 

 

 

Joe Kaeser

 

 

 

 

 

 

Chair

 

 

Prof. Dr. Martin H. Richenhagen

 

Chair

 

 

 

 

 

 

 

Alberto Weisser

 

 

 

 

 

 

 

 

Robert L. Wood

 

 

 

 

 

 

 

 

Description of Key Committee Functions

 

Audit Committee

Committee Chair     

Prof. Dr. Martin H.

Richenhagen  

 

Current Members:

Dr. Thomas Enders

Dr. Victoria E. Ossadnik

Alberto Weisser

Meetings in 2021

6

 

 

The Audit Committee assists the Board in its oversight of (a) the independence, qualifications and performance of Linde’s independent auditor, (b) the integrity of Linde’s financial statements, (c) the performance of Linde’s internal audit function, and (d) Linde’s compliance with legal and regulatory requirements.  In furtherance of these responsibilities, the Audit Committee, among other duties:

(1)  appoints the independent auditor to audit Linde’s financial statements, approves the fees and terms of such engagement, approves any non-audit engagements of the independent auditor, and meets regularly with, and receives various reports from, the independent auditor.  The independent auditor reports directly to the Audit Committee;

(2)  reviews Linde’s principal policies for accounting and financial reporting and its disclosure controls and processes, and reviews with management and the independent auditor Linde’s financial statements prior to their publication;

(3)  reviews assessments of Linde’s internal controls, the performance of the Internal Audit function, the performance evaluations of the General Auditor and the Chief Compliance Officer, and the guidelines and policies by which Linde undertakes risk assessment and risk management; and

(4)  reviews the effectiveness of Linde’s compliance with laws, business conduct, integrity and ethics programs.

 

 

Linde plc  |  23  


Corporate Governance and Board Matters

Board Committees

 

 

 

Human Capital Committee

Committee Chair

 Edward G. Galante

Current Members:

 Prof. DDr. Ann-Kristin

 Achleitner

 Joe Kaeser

 Prof. Dr. Martin H.

 Richenhagen

  Robert L. Wood

Meetings in 2021

 4

 

 

The Human Capital Committee assists the Board in its oversight of (a) Linde’s compensation and incentive policies and programs, and (b) management development and succession, in both cases particularly as they apply to Linde’s executive officers.  In furtherance of these responsibilities, the Human Capital Committee, among other duties:

(1)  determines Linde’s policies relating to the compensation of executive officers and assesses the competitiveness and appropriateness of their compensation and benefits;

(2)  determines the salaries, performance-based variable compensation, equity awards, terms of employment, retirement or severance, benefits, and perquisites of executive officers;

(3)  establishes the corporate goals relevant to the CEO’s compensation, evaluates the CEO’s performance in light of these goals and sets the CEO’s compensation accordingly;

(4)  reviews management’s long-range planning for executive development and succession, and develops a CEO succession plan;

(5)  assesses the design, administration and risk associated with Linde’s management incentive compensation and equity compensation plans; and

(6)  evaluates periodically the Company’s diversity policies and objectives, and programs to achieve those objectives.

 

 

 

 

 

Certain Committee Processes for Determining Executive Compensation

 

 

Delegation and CEO Involvement. Except under limited circumstances, the Human Capital Committee may not delegate its executive compensation authority to any other persons.  With respect to the allocation of compensation and awards to employees other than the executive officers, the Human Capital Committee may, and has, delegated authority to the CEO, subject to guidelines established by the Human Capital Committee.  The CEO does not determine the compensation of any of the executive officers, but he does offer for the Human Capital Committee’s consideration his views on relevant matters, as described in more detail in this Proxy Statement in the CD&A section.

 

Compensation Risk Analysis. The Human Capital Committee considers whether the Company’s compensation policies and practices create incentives for risk-taking that could have a material adverse effect on the Company.  Each year, the Human Capital Committee examines management’s review of the Company’s incentive compensation programs applicable to all employees, including executive officers, in order to evaluate whether they encourage excessive risk-taking through either the design of the executive and management incentive programs, or operational decision-making that could affect compensation payouts.  The Human Capital Committee determines if (1) there exists sufficient operational controls, checks and balances that prevent or constrain compensation-driven decision-making that is inappropriate or excessively risky including, among others, frequent risk discussions with the Board, particularly in connection with capital project or acquisition proposals, (2) the Company uses highly leveraged short-term incentives that would tend to drive high short-term risk decisions or unsustainable gains, and (3) the Company’s executive stock ownership policy and the “recapture” policy described in the CD&A also serve as disincentives for unacceptable risk-taking.

 

 

  24  |  Linde plc


Corporate Governance and Board Matters

Board Committees

 

 

A more detailed description of how the Human Capital Committee considers and determines executive compensation is described in this Proxy Statement in the CD&A section.

 

Executive Committee

Committee Chair

  Stephen F. Angel  

 

  Current Members:

 Sanjiv Lamba

 Dr. Thomas Enders

 Robert L. Wood

 

 

 

The purpose of the Executive Committee is primarily to act on behalf of the entire Board with respect to certain matters that may arise in between regularly scheduled Board meetings, and act on certain other matters from time to time.  In particular, the Executive Committee duties include, among others:

(1)  evaluating and approving any investments, acquisitions, partnerships or divestments requiring Board approval, that are within value thresholds specified by the Board;

(2)  evaluating and approving any financing or other capital markets transactions requiring Board approval, that are within value thresholds specified by the Board; and

(3)  acting upon any other such matters within the competencies of the Board, that are not reserved solely to the Board, that are within value thresholds specified by the Board and, in the opinion of the Chairman of the Board, should not be postponed until the next regularly scheduled Board meeting.

 

 

 

 

 

 

 

Nomination and Governance Committee

Committee Chair

 Joe Kaeser

Current Members:

  Edward G. Galante

   Dr.Victoria E.Ossadnik  

 

Meetings in 2021

 5

 

 

The Nomination and Governance Committee assists the Board in its oversight of (a) the selection, qualifications, compensation and performance of Linde’s directors, (b) Linde’s governance, including the practices and effectiveness of the Board, and (c) various important public policy concerns that affect the Company.  In furtherance of these responsibilities, the Nomination and Governance Committee, among other duties:

(1)  recommends to the Board nominees for election as directors, and periodically reviews potential candidates, including incumbent directors;

(2)  reviews policies with respect to the composition, compensation, organization and practices of the Board, and developments in corporate governance matters generally; and

(3)  reviews Linde’s policies and responses to broad public policy issues such as social responsibility, corporate citizenship, charitable contributions, legislative issues, and important shareholder issues, including management and shareholder proposals offered for shareholder approval.

 

 

 

 

 


 

Linde plc  |  25  


Corporate Governance and Board Matters

Board Committees

 

 

 

 

Sustainability Committee

Committee Chair

 Dr. Thomas Enders

Current Members:

 Prof. DDr. Ann-Kristin

 Achleitner

  Alberto Weisser

  Robert L. Wood  

 

Meetings in 2021

 0

(Committee created in November 2021)

 

 

The Sustainability Committee assists the Board with its oversight of the Company’s programs, policies, practices and strategies related to environmental matters generally, including:

(1)  the Company’s decarbonization efforts, including those related to the reduction of greenhouse gas emissions from operations;

(2) the Company’s clean energy efforts, including those related to clean hydrogen as well as technology and innovation for decarbonization solutions; 

(3)  sustainable productivity, water conservation and management, energy consumption, product stewardship and zero waste sites; and

(4)   The Company’s environmental sustainability goals, including those related to climate change and greenhouse gas emissions, and the Company’s Sustainability Report.

 

 

 

 

 

 

 

  26  |  Linde plc


Corporate Governance and Board Matters

Director Compensation

 

 

Director Compensation

 

 

Director Compensation Program

The Board adopted the initial Director Compensation Program based in part on an extensive director compensation study and analysis performed in 2018 by F. W. Cook, a recognized expert compensation consultant.  This study was updated and refreshed by F. W. Cook in 2021. These reports included data, analysis and advice, a report on director compensation trends and benchmarking of director compensation against groups of large U.S. and European public companies.

The Company paid the amounts reported in the 2021 Director Compensation table below pursuant to its Director Compensation Program in effect for 2021.  The Company does not pay any director who is a Company employee (Mr. Angel in 2021 or Mr. Lamba in 2022) for serving as a member of the Board of Directors or any committee of the Board of Directors.  The Nomination and Governance Committee of the Board determines non-management director compensation consistent with the Directors’ Compensation principles set forth in the Corporate Governance Guidelines.  The Director Compensation Program in effect for 2021 is described below but was amended in February 2022 for 2022 compensation as described below.

Cash Compensation

Cash compensation comprises 60% of the entire annual Board compensation, as follows:

 

A $450,000 annual retainer paid quarterly to the Chairman of the Board.

 

A $180,000 annual retainer paid quarterly to all other directors.

 

An additional $100,000 annual retainer paid quarterly to the Chairman of the Audit Committee.

 

An additional $50,000 annual retainer paid quarterly to each chairman of the Human Capital Committee, the Nomination and Governance Committee and the Sustainability Committee.

 

The two directors, Messrs. Kaeser and Weisser, who joined the Board effective November 1, 2021, were paid for their service on a pro rata basis for the months of November and December.

Equity Compensation

In addition to the cash compensation set forth above, each non-management Director receives an annual equity stock compensation grant equal to 40% of the value of the entire annual Board compensation.  In 2021, an equity grant valued at $300,000 was made to the Chairman of the Board, and an equity grant valued at $120,000 was made to each other director for their services in 2021.

 

The number of restricted stock units granted to deliver the $300,000 and $120,000 values, respectively, as of the February 22, 2021 grant date was based upon the average of the closing prices of the Company’s Ordinary Shares for the 200 trading days before February 10, 2021.  Because the closing price of the Company’s Ordinary Shares on February 22, 2021 was higher than this 200-day average, the full grant date fair market value of the restricted stock units granted on February 22,2021 and reported in the 2021 Director Compensation Table below was $320,868 for the Chairman of the Board, and $128,297 for each other director.

 

The Nomination and Governance Committee selected restricted stock units as the sole form of equity for the 2021 grant.  The restricted stock units are fully vested (non-forfeitable) after one-year from the date of grant, but a prorated portion will be paid out if a director’s service on the Board terminates before the one year anniversary of the grant unless the director is removed by the shareholders or is removed for cause, in which case the grant will be forfeited.  Restricted stock units will be paid out as soon as practicable after the vesting in Linde plc ordinary shares on a one-for-one basis.

Expenses

The Company pays or reimburses directors for travel, lodging and related expenses incurred in connection with attending board and committee meetings, the Annual General Meeting and other Company business-related events (including the expenses related to the attendance of spouses if they are specifically invited for appropriate business purposes) and may provide use of Company chartered aircraft.  From time to time, the Company may reimburse a director’s expenses for his or her participation in third party-supplied continuing education related to the director’s board or committee service.

 

Linde plc  |  27  


Corporate Governance and Board Matters

Director Compensation

 

 

2022 Director Compensation Program Amendment

In February 2022, the Nomination and Governance Committee reviewed and considered the updated 2021 F.W. Cook director compensation study. In order to continue to maintain the Director Compensation Program to be competitive with the peer group of benchmark companies, the Board amended the Director Compensation Program for 2022 to: (1) increase the annual base retainer paid to all directors (except the Chairman of the Board) to $325,000, and (2) to enhance the Board’s alignment with the interests of shareholders, the mix of compensation was changed to 40% cash and 60% equity from the prior mix of 60% cash and 40% equity. The compensation of the Chairman of the Board and the additional compensation of all committee chairpersons did not change. In addition, the Director Compensation Program was amended to provide for an additional $35,000 annual retainer paid quarterly to the Lead Independent Director.

 

 

 

 

The table below shows the fees that the Company’s non-management directors earned in 2021.

 

2021 Director Compensation Table

 

Name

 

Fees Earned

or

Paid in Cash

($)

 

 

Stock

Awards

($)(1)

 

 

Option

Awards

($)

 

 

Non-Equity

Incentive

Plan

Compensation

($)

 

 

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

 

 

All Other

Compensation

($)(2)

 

 

Total

($)

 

Prof. Dr. Wolfgang H. Reitzle (3)

 

 

450,000

 

 

 

320,868

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

770,868

 

Prof. DDr. Ann-Kristin Achleitner

 

 

180,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

308,297

 

Prof. Dr. Clemens A. H. Börsig (3)

 

 

280,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

20,000

 

 

 

428,297

 

Dr. Nance K. Dicciani (3)

 

 

180,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

15,000

 

 

 

323,297

 

Dr. Thomas Enders

 

 

180,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

308,297

 

Franz Fehrenbach (3)

 

 

180,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

308,297

 

Edward G. Galante

 

 

230,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

358,297

 

Josef Kaeser

 

 

30,165

 

(4)

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

30,165

 

Larry D. McVay (3)

 

 

180,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

308,297

 

Dr. Victoria E. Ossadnik

 

 

180,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

308,297

 

Prof. Dr. Martin H. Richenhagen

 

 

180,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

308,297

 

Alberto Weisser

 

 

30,165

 

(4)

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

30,165

 

Robert L. Wood

 

 

230,000

 

 

 

128,297

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

0

 

 

 

358,297

 

 

(1)

Full grant date fair value of restricted stock units granted to each director on February 22, 2021 as determined under accounting standards related to share-based compensation.

 

(2)

Amounts in this column represent benefits provided to the directors that exceed $10,000 per director. These amounts are the value of the following benefits provided to the directors by the Company: (a) $15,000 for Ms. Dicciani and Prof. Dr. Börsig as 2021 matching contributions for their eligible personal charitable contributions pursuant to the Company's charitable matching gift program that is available to Company employees and non-management directors on the same basis and that matches personal donations to eligible charitable institutions up to a $15,000 maximum per year per donor, and (b) $5,000 for Prof. Dr. Börsig for fees paid by the Company for the preparation and filing of director's personal tax returns in the United Kingdom with respect to the taxation of directors' compensation in the United Kingdom.

 

(3) Retired from the Board effective March 1, 2022

 

(4) Fees paid to Messrs. Kaeser and Weisser for the period November 1-December 31, 2021, as they joined the Board effective November 1, 2021.

 

 

 

  28  |  Linde plc


Corporate Governance and Board Matters

Director Nominees

 

 

Director Nominees

 

 

Experience and Qualifications of
All Nominees

Ten persons have been nominated for election to the Board to serve for a one-year term concluding on the later of (a) the 2023 annual general meeting of shareholders and (b) the election and qualification of his or her successor.  The Nomination and Governance Committee has nominated each current director of the Board for reelection at the Annual General Meeting.  The Nomination and Governance Committee believes that each director nominee has an established record of accomplishment in areas relevant to Linde’s business and objectives and possesses the characteristics identified in Linde’s Corporate Governance Guidelines as essential to a well-functioning and deliberative governing body, including integrity, independence and commitment.

Each of the director nominees listed below has experience as a senior executive of a public company or comparable business organization.  Each nominee also is serving or has served as a director of one or more public companies and on a variety of board committees.  As such, each has executive management and director oversight experience in most, if not all, of the following areas which are critical to the conduct of the Company’s business, including: strategy development and implementation, risk assessment and management, financial accounting and reporting, internal controls, corporate finance, capital project evaluation, the evaluation, compensation, motivation and retention of senior executive talent, public policies as they affect global industrial corporations, compliance, corporate governance, productivity management, safety management, project management, sustainable development and, in most cases, global operations.  Many of the nominees also bring particular insights into specific end-markets and foreign markets that are important to the Company.  These nominees collectively provide a range of perspectives, experiences and competencies well-suited to providing advice and counsel to management and to overseeing the Company’s business and operations.  In addition to these qualifications that are shared by all of the nominees, more specific information about each of their individual experience and qualifications is included below.

The following pages include information about those persons currently serving on Linde’s Board of Directors who have been nominated for reelection to serve for a one-year term concluding on the later of (a) the 2023 annual general meeting of shareholders or (b) the election and qualification of his or her successor.  The graph below shows the number of directors who have certain of the skills, qualifications and experience in key areas that are important for the Board’s oversight of the Company’s business.

 

 

Director Meeting Attendance

During 2021, the Board held five meetings.  The nominees for reelection to the Board collectively attended 100% of all Board meetings and meetings of committees of which they are members.

 

 

 

Linde plc  |  29  


Corporate Governance and Board Matters

Director Nominees

 

 

 

 

 

Stephen F. Angel

Chairman of the Board of Linde plc

 

 

 

 

 

Age

Director Since

Other Public Company

Directorships

 

66

2018

 

General Electric Company

PPG Industries, Inc.

 

Qualification Highlights

   Industry

   Linde End-Markets

   Linde Foreign Markets

   Operations

   International Business

   Technology

   Risk Management

   Public Company Board

 

Biography

Mr. Stephen Angel became the Chairman of the Board of Linde plc as of March 1, 2022. Prior to that, he served as the Chief Executive Officer of Linde plc from October 2018 to February 2022.  Mr. Angel was Chairman, President and Chief Executive Officer of Praxair, Inc. from 2007 to 2018.  Mr. Angel joined Praxair in 2001 as an Executive Vice President and was named President and Chief Operating Officer in February 2006.  Prior to joining Praxair, Mr. Angel spent 22 years in a variety of management positions with General Electric.

Mr. Angel serves on the board of directors of General Electric Company. He also serves on the board of directors of PPG Industries, where he chairs the Human Capital Management and Compensation Committee and serves on the Nominating and Governance Committee.  He also serves on the board of the Hydrogen Council and is a member of The Business Council.

Experience and Qualifications

As the former Chief Executive Officer of Linde, the former Chairman and Chief Executive Officer of Praxair, and as a former senior operating executive at General Electric, a global diversified manufacturing company, Mr. Angel brings the senior executive experience and skills described above.  He also has a deep insight into the industrial gases industry and the needs, challenges and global opportunities of Linde in particular.  He has deep operating experience and knowledge of the industry and the Company, all of which provide him the skills and background necessary to lead Linde’s Board of Directors.  

 


 

  30  |  Linde plc


Corporate Governance and Board Matters

Director Nominees

 

 

Sanjiv Lamba

Chief Executive Officer of Linde plc

 

 

 

 

 

Age

Director Since

Other Public Company

Directorships

 

57

2022

 

 

Qualification Highlights

   Industry

   Linde End-Markets

   Linde Foreign Markets

   Operations

   International Business

   Technology

   Risk Management

 

 

Biography

Sanjiv Lamba became Chief Executive Officer of Linde plc as of March 1, 2022. Prior to that, Mr. Lamba served as Chief Operating Officer for Linde plc from January 2021 to February 2022. Before his appointment as COO, Mr. Lamba was Executive Vice President, APAC since 2018.

Mr. Lamba started his career in 1989 with BOC India in Finance, was appointed Director of Finance and subsequently Managing Director for the India business in 2001. He has worked in a number of geographies for Linde including India, UK, Singapore and Germany where he served as member of the Executive Board of Linde AG.

 

Experience and Qualifications

Mr. Lamba brings the senior executive experience and skills described above by virtue of serving as Linde’s Chief Executive Officer, his prior service as the Chief Operating Officer, and his many years of leading Linde’s APAC segment as an Executive Vice President. He has substantial knowledge of the industrial gases and engineering industries. In collaboration with the Chairman, Mr. Lamba facilitates Board discussions and keeps the Board apprised of significant developments in the Company’s business and industry

 

Linde plc  |  31  


Corporate Governance and Board Matters

Director Nominees

 

 

Prof. DDr. Ann-Kristin Achleitner

Professor at the Technical University Munich (TUM)

 

Age

Director Since

Other Public Company

Directorships

 

56

2018

Lazard Ltd.

Münchener Rückversicherungs-Gesellschaft AG

 

 

Qualification Highlights

   Linde Foreign Markets

   International Business

   Financial Expertise

   Risk Management

   Public Company Board

 

 

Biography

Prof. DDr. Ann-Kristin Achleitner has served as Scientific Co-Director of the Center for Entrepreneurial and Financial Studies since 2003 and has been Holder of Chair for Entrepreneurial Finance from 2001 to 2020 at Technical University Munich, Germany. She began her career with MS Management Service AG in St. Gallen, Switzerland in 1991.  In 1992, she began as a university lecturer in Finance and External Auditing at the University of St. Gallen (HSG) in Switzerland.  In 1994, she became a consultant at McKinsey & Company, Inc, in Frankfurt, Germany.  In 1995, she was appointed Holder of the Endowed Chair for Banking and Finance and Chair of the Board of the Institute for Financial Management at the European Business School (International University Schloß Reichartshausen) in Oestrich-Winkel, Germany.

Prof. DDr. Achleitner is a member of the Board of Directors of Lazard Ltd., where she is a member of the Audit Committee and the Nominating & Governance Committee. She is also a member of the Supervisory Board of Münchener Rückversicherungs-Gesellschaft (Munich Re) AG in Munich, Germany, where she is the Chairperson of the Compensation Committee and a member of the Audit and Nomination Committees. Prof. DDr. Achleitner is a member of the Advisory Board of Luxembourg Investment 261 S.à.r.L. (Techem GmbH), where she is the Chairperson of the Nomination & Compensation Committee and a member of the Audit Committee.

Prof. DDr. Achleitner was a member of the Supervisory Board of Deutsche Börse AG in Frankfurt am Main, Germany, until May 2019 and a member of the Board of Directors of ENGIE SA in Paris, France, until May 2019. She was a member of the Supervisory Board of Linde AG from 2011-2019 where she was also member of the Audit Committee and the Nomination Committee.  She also served as a member of the Supervisory Board of Metro AG in Düsseldorf, Germany, until February 2017, and as a member of the Board of Directors of Vontobel Holding AG and Vontobel Bank AG in Zurich, Switzerland until April 2013.

Experience and Qualifications

Prof. DDr. Achleitner is a Doctor of Business Administration and a Doctor of Law.  Her educational background, along with her research and studies in the area of entrepreneurial finance, provides the Board with substantial financial expertise.  She brings experience in international public company boards, audit, ethics, environment and sustainable development committees.  Her years as a member of the Supervisory Board of Linde AG and service on the audit and nomination committees of Linde AG provides her with substantial experience and insight into the business segments of Linde and the financial performance of the Company.

 

 

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Corporate Governance and Board Matters

Director Nominees

 

 

 

Dr. Thomas Enders

Former Chief Executive Officer of Airbus SE

 

Age

Director Since

Other Public Company

Directorships

 

63

 

 

2018

 

Knorr-Bremse AG

Lilium B.V.

Lufthansa Group

 

 

Qualification Highlights

   Linde End-Markets

   Linde Foreign Markets

   Operations

   International Business

   Technology

   Risk Management

   Public Company Board

 

Biography

Dr. Thomas Enders served on the Executive Committee and the Board of Directors of EADS NV and its successor Airbus SE in various functions from 2000 to 2019. Between 2005 and 2019 he served as Chief Executive Officer of EADS/Airbus.

He joined the aerospace industry in 1991. Before that he worked in the German Bundestag, the German Ministry of Defense and in various foreign policy think tanks.

Dr. Enders is a member of the Supervisory Board of Knorr-Bremse AG since June 2020. In September 2021, he became the Chairman of the Board of Directors of Lilium N.V. and was previously a member of the Advisory Board of Lilium GmbH in Weßling, Germany from January 2021 to September 2021. Dr. Enders also serves on the Supervisory Board of Lufthansa Group since May 2020, where he is a member of the Presidium and the Nomination Committee. Dr. Enders was a member of the Supervisory Board of Linde AG from 2017 until 2019, where he was a member of the Standing Committee. He is also President (non-executive) of the German Council on Foreign Relations (DGAP) in Berlin.

Experience and Qualifications

As the former Chief Executive Officer and member of the Executive Committee of Airbus SE, one of the largest aerospace companies in the world and a large international manufacturer, Dr. Enders contributes the senior executive experience and skills described above.  In particular, his background includes extensive international, operational and manufacturing experience.  As Airbus SE operates in many of the foreign markets in which the Company operates, Dr. Enders also brings his understanding of these large markets where the Company has a significant presence.

 

Linde plc  |  33  


Corporate Governance and Board Matters

Director Nominees

 

 

 

Edward G. Galante

Former Senior Vice President of ExxonMobil Corporation

 

Age

Director Since

Other Public Company

Directorships

 

71

2018

Celanese Corporation

Clean Harbors, Inc.

Marathon Petroleum

 

Qualification Highlights

   Linde End-Markets

   Linde Foreign Markets

   Operations

   International Business

   Technology

   Risk Management

   Public Company Board

 

Biography

Mr. Edward Galante is a former Senior Vice President and was member of the Management Committee of ExxonMobil Corporation from 2001 until his retirement in 2006.  His principal responsibilities included the worldwide downstream business: refining & supply, fuels marketing, lubricants and specialties, and research and engineering.  Immediately prior to that, Mr. Galante was Executive Vice President of ExxonMobil Chemical Company.

Mr. Galante is a director of Celanese Corporation, where he serves as Chairman of the Compensation and Management Development Committee and is a member of the Environmental, Health, Safety, Quality and Public Policy Committee. He is also a director of Clean Harbors, Inc., where he is Chairman of the Environmental, Safety and Health Committee and serves on the Governance Committee and the Compensation Committee.  He is also a director of Marathon Petroleum Corporation, where he Chairs the Compensation and Organizational Committee and is a member of the Sustainability Committee.  

During the past five years, Mr. Galante served as a director of Praxair, Inc. from 2007 until the Business Combination of Praxair, Inc. and Linde AG in October 2018.  Immediately prior to the Business Combination he was the Chairman of the Compensation & Management Development Committee of the Board of Directors of Praxair, Inc.  Mr. Galante was also a director of Foster Wheeler Ltd., where he served on the Audit Committee and was the Chairman of the Compensation and Executive Development Committee.  He was a member of the Board of Directors of Andeavor Corporation (formerly Tesoro Corporation), where he served on the Compensation Committee and the Environmental, Health and Safety Committee until the company merged into Marathon Petroleum in October 2018.

Mr. Galante sits on the Board of Artis-Naples, the United Way Foundation of Metropolitan Dallas, and is the Vice Chairman of the Board of Trustees of Northeastern University.  

Experience and Qualifications

As a former senior operating executive at ExxonMobil, one of the largest global energy companies, Mr. Galante brings the senior executive experience and skills described above and has significant experience in the operations and management of a large, global business.  He has substantial experience in the oil, gas, refining and chemical sectors of the energy industry, all of which are important end-markets for the Company.  He also has an in-depth understanding of engineering management, operations and technology, which are important in the execution of many of the Company’s large capital projects.

 

 

  34  |  Linde plc


Corporate Governance and Board Matters

Director Nominees

 

 

 

Joe Kaeser

Former Chief Executive Officer of Siemens AG

 

Age

Director Since

Other Public Company

Directorships

 

64

 

2021

 

Daimler Truck Holding AG

NXP Semiconductors N.V. (Until June 1, 2022)          

Siemens Energy AG

 

Qualification Highlights

   Linde End-Markets

   Linde Foreign Markets

   Operations

   International Business

   Technology

   Financial Expertise

   Risk Management

   Public Company Board

 

 

Biography

Joe Kaeser was the Chief Executive Officer of Siemens AG from August 2013 until February 2021. From May 2006 to August 2013, he was Chief Financial Officer of Siemens AG. Prior to this, Mr. Kaeser served as Chief Strategy Officer for Siemens AG from 2004 to 2006 and as the Chief Financial Officer for the mobile communications group from 2001 to 2004. Mr. Kaeser additionally held various positions within the Siemens group since he joined Siemens in 1980.

Mr. Kaeser is the Chairman of the Supervisory Board of Daimler Truck Holding AG, where he also chairs the Presidential Committee and the Nomination Committee. He is Vice Chairman of the Board of NXP Semiconductors N.V. and a member of its Nominating and Governance Committee when he will retire from the NXP Semiconductors Board. Mr. Kaeser is the Chairman of the Supervisory Board of Siemens Energy AG. He also served as a member of the Supervisory Board of Daimler AG until October 1, 2021.

Experience and Qualifications

As the former Chief Executive Officer of Siemens AG, a large global industrial manufacturing, technology and services company, Mr. Kaeser contributes the senior executive experience and skills described above. He has substantial operating experience and knowledge of numerous end markets and industries that are important to Linde’s business. Having also served as the Chief Financial Officer at Siemens, Mr. Kaeser also brings substantial financial expertise to Linde’s Board.

 

Linde plc  |  35  


Corporate Governance and Board Matters

Director Nominees

 

 

Dr. Victoria E. Ossadnik

Management Board Member of E.ON SE

 

Age

Director Since

Other Public Company Directorships

 

53

2018

E.ON SE

 

 

Qualification Highlights

   Linde Foreign Markets

   Operations

   International Business

   Technology

   Risk Management

   Public Company Board

 

Biography

Dr. Victoria Ossadnik became a Member of the Board of Management of E.ON SE and Chief Operating Officer - Digital of E.ON SE in Essen, Germany effective April 1, 2021. Prior to that, she served as Chief Executive Officer of E.ON Energie Deutschland GmbH and E.ON Energie Deutschland Holding GmbH from April 2018 – April 2021.  Prior to this, in 2011, she joined Microsoft Deutschland GmbH and was appointed as a member of the Board of Management from 2011 to 2016. She served as Vice President, Enterprise Services Delivery from 2016 to 2018.

Dr. Ossadnik began her career with SCANLAB GmbH, Germany, in 1996.  From 1999 to 2003, she served as CEO of the CSC Ploenzke AG, Germany, joint venture CSC/Dachser.  In 2003, she joined Oracle Deutschland GmbH, serving as Head of Technology Consulting (Northern Europe) and, in 2007, was appointed a member of the Board of Management.

Dr. Ossadnik served as a member of the Supervisory Board of Commerzbank AG until May 2021 where she served on the Committee for Digitalization and Technology. She was a member of the Supervisory Board of Linde AG from 2016 until 2019. From 2019 until 2020, she was also a member of Supervisory Board of innogy SE.

Experience and Qualifications

As a member of the Management Board of E.ON SE, one of the world's largest investor-owned electric utility service providers and as the former Chief Executive Officer of E.ON Energie, the largest electricity supply company in Germany, Dr. Ossadnik brings the senior executive experience and skills described above. In addition, given her substantial senior management experience as the Chief Operating Officer – Digital at E.ON SE and previously at both Microsoft and Oracle in Germany, she contributes key insights and counsel as to Linde’s use of technology and further development of digitization in its business operations.

 

  36  |  Linde plc


Corporate Governance and Board Matters

Director Nominees

 

 

Prof. Dr. Martin H. Richenhagen

Former Chairman, President and Chief Executive Officer of AGCO Corporation

 

Age

Director Since

Other Public Company

Directorships

 

69

 

2018

 

AXIOS Sustainable Growth Acquisition Corporation

Daimler Truck Holding AG

PPG Industries, Inc.

 

 

Qualification Highlights

   Linde End-Markets

   Linde Foreign Markets

   Operations

   International Business

   Risk Management

   Public Company Board

 

Biography

Prof. Dr. Martin Richenhagen served as the Chairman, President and Chief Executive Officer of AGCO Corporation, a global manufacturer and distributor of agricultural equipment, from 2004 until his retirement in 2020.  From 2003 until 2004, Prof. Dr. Richenhagen was Executive Vice President of Forbo International SA, a flooring material company headquartered in Switzerland.  He also served as Group President for CLAAS KGaA mbH, a global agricultural equipment manufacturer and distributor headquartered in Germany, from 1998 until 2002.  Prof. Dr. Richenhagen was the Senior Executive Vice President for Schindler Deutschland Holdings GmbH, Germany, a worldwide manufacturer and distributor of elevators and escalators, from 1995 until 1998.

Prof. Dr. Richenhagen is the Chairman of the Board of AXIOS Sustainable Growth Acquisition Corporation. He also serves as a member of the Supervisory Board of Daimler Truck Holding AG. Prof. Dr. Richenhagen is also a director of PPG Industries, where he serves on the Human Capital Management and Compensation Committee as well as on the Sustainability and Innovation Committee. He is a member of the Advisory Board of Stihl Holding AG and Co.KG. Prof. Dr. Richenhagen was Chairman of AGCO Corporation until his retirement in 2020. He also served as a director of Praxair, Inc. from 2015 until 2018.

Prof. Dr. Richenhagen was the Chairman of the German American Chambers of Commerce of the United States, and he was a member of the U.S. Chamber of Commerce Board of Directors. He also served as Chairman of the Board of the Association of Equipment Manufacturers (AEM) and is a Life Honorary Director of AEM. He is currently Chairman of the Board of Trustees of the American Institute for Contemporary German Studies at Johns Hopkins University (AICGS).  

Experience and Qualifications

As the former Chairman, President and Chief Executive Officer of AGCO Corporation, a large international manufacturer and distributor of agricultural equipment, Prof. Dr. Richenhagen brings the senior executive experience and skills described above.  In particular, his background includes extensive international, operational and manufacturing experience.  In addition, AGCO Corporation operates in many of the markets in which Linde operates, including Europe and South America, and Prof. Dr. Richenhagen adds his understanding of these large markets where the Company has a significant presence.

 


 

Linde plc  |  37  


Corporate Governance and Board Matters

Director Nominees

 

 

Alberto Weisser

Former Chairman and Chief Executive Officer of Bunge Limited

 

Age

Director Since

Other Public Company Directorships

 

66

2021

 

Bayer AG

PepsiCo

 

 

Qualification Highlights

   Linde End-Markets

   Linde Foreign Markets

   Operations

   International Business

   Financial Expertise

   Risk Management

   Public Company Board

 

Biography

 

Alberto Weisser served as Chairman and Chief Executive Officer of Bunge Limited, a global food, commodity and agribusiness company, from 1999 until June 2013, and as Executive Chairman until December 2013. Mr. Weisser previously served as Bunge’s Chief Financial Officer from 1993 to 1999. Prior to his tenure at Bunge, Mr. Weisser worked at BASF Group, a chemical company, in various finance-related positions. He also served as a Senior Advisor at Lazard Ltd. from 2015 until August 2018.

 

Mr. Weisser serves as a member of the Supervisory Board of Bayer AG. He is also a member of the Board of Directors of PepsiCo, where he has been a member of the Audit Committee since 2011 and Chairman of the Audit Committee since 2016. He also serves on the Americas Advisory Panel of Temasek International Pte. Ltd., a Singapore-based investment company.

Experience and Qualifications

As the former Chief Executive Officer of Bunge Limited, a global food, commodity and agribusiness company, Mr. Weisser contributes the senior executive experience and skills described above. He has substantial operating experience and knowledge of numerous end markets where Linde operates.  Having also served as the Chief Financial Officer at Bunge, Mr. Weisser also brings substantial financial expertise to Linde’s Board and to the Audit Committee.

 

 

  38  |  Linde plc


Corporate Governance and Board Matters

Director Nominees

 

 

 

Robert L. Wood

Lead Independent Director, Linde plc

Former Chairman, President & Chief Executive Officer of Chemtura Corporation

 

Age

Director Since

Other Public Company

Directorships

 

68

2018

MRC Global Inc.

Univar Inc.

 

Qualification Highlights

   Industry

   Linde End-Markets

   Operations

   Risk Management

   Public Company Board

 

Biography

Robert Wood is a Partner in the consulting firm The McChrystal Group, specializing in leadership development for business organizations.  He was the Chairman, President & Chief Executive Officer of Chemtura Corporation, a specialty chemicals company, from 2004 until 2008.  Prior to joining Chemtura, Mr. Wood served in various senior management positions at Dow Chemical Company, most recently as business group president for Thermosets and Dow Automotive from November 2000.

Mr. Wood is Linde’s Lead Independent Director. He is also a director of MRC Global Inc., where he is Chairman of the Compensation Committee and a member of the Governance Committee. He is a director of Univar Inc., where he chairs the Compensation Committee and sits on the Audit Committee.  Mr. Wood was a director of Praxair, Inc. from 2004 until 2018 and was the Lead Director and the Chairman of the Nomination and Governance Committee.  He also was a director of Jarden Corporation, where he was a member of the Nominating and Policies Committee and Chairman of the Audit Committee.

Mr. Wood was Chairman of the American Plastics Council and the American Chemistry Council and is a member of the United States Olympic Committee.

Experience and Qualifications

As a former Chief Executive Officer of Chemtura Corporation, a global specialty chemicals company, and a former senior executive of Dow, a global chemicals company, Mr. Wood brings the senior executive experience and skills described above.  He also has a deep understanding of the specific challenges and opportunities facing a global basic materials company.  Mr. Wood’s knowledge of the chemicals industry, an important end-market for the Company, provides valuable insight to the Board and management.

 

 

 

Linde plc  |  39  


Proposal 1: Appointment of Directors

 

 

Proposal 1: Appointment of Directors

 

Ten director nominees have been nominated for appointment to serve for a one-year term concluding on the later of (a) the 2023 annual general meeting of shareholders and (b) the election and qualification of their respective successors.  The Nomination and Governance Committee has recommended to the Board, and the Board has approved and recommends, that Stephen F. Angel, Sanjiv Lamba, Prof. DDr. Ann-Kristin Achleitner, Dr. Thomas Enders, Edward G. Galante, Joe Kaeser, Dr. Victoria E. Ossadnik, Prof. Dr. Martin H. Richenhagen, Alberto Weisser and Robert L. Wood, each be appointed to serve for a one-year term concluding on the later of (a) the 2023 annual general meeting of shareholders and (b) the election and qualification of their respective successors.  Each nominee has agreed to be named in this Proxy Statement and to serve if elected.  Qualifications and biographical data for each of these nominees is presented above.  If one or more of the nominees becomes unavailable for election or service as a director, the proxy holders will vote your shares for one or more substitutes designated by the Board of Directors, or the size of the Board of Directors will be reduced.

As required under Irish law, the resolution in respect of Proposal 1 is an ordinary resolution that requires the affirmative vote of a simple majority of the votes cast with respect to each director nominee (meaning that the number of shares voted “FOR” a nominee must exceed the number of shares voted “AGAINST” such nominee).

The text of the resolution in respect of Proposal 1 is as follows:

“By separate resolutions, to appoint the following ten directors: Stephen F. Angel, Sanjiv Lamba, Prof. DDr. Ann-Kristin Achleitner, Dr. Thomas Enders, Edward G. Galante, Joe Kaeser, Dr. Victoria E. Ossadnik, Prof. Dr. Martin H. Richenhagen, Alberto Weisser and Robert L. Wood,”

 

 

 

 

 

The Board recommends you vote “FOR” the re-appointment of each of the Board’s director nominees listed above.

 

 

 

 

  40  |  Linde plc


Audit Matters

Oversight of Independent Auditors

 

 

Audit Matters

Oversight of Independent Auditors

 

The Audit Committee is directly responsible for the appointment, compensation (including approval of audit and non-audit fees), retention and oversight of the independent registered public accounting firm that audits Linde plc’s financial statements and its internal control over financial reporting.  The Audit Committee has selected PricewaterhouseCoopers (“PwC”) as Linde plc’s independent auditor for 2022.  PwC has served as Linde plc’s independent auditor since 2019.  Representatives of PwC are expected to be present at the Annual General Meeting to be available to respond to appropriate questions and to make a statement if they desire.

 

During 2019, the Audit Committee conducted a comprehensive, competitive formal tender process to consider, and ultimately to recommend to the Board, the selection of an independent auditor for the Company in accordance with applicable rules of the European Union.  The Audit Committee considered and evaluated internationally recognized independent registered public accounting firms, including PwC, based upon a thorough set of criteria that the Audit Committee adopted.  After conducting this process, the Audit Committee selected PwC as the independent auditor.

 

The Audit Committee will annually review the independence and performance of any potential independent auditor in deciding whether to select any given firm as the independent auditor.  The Audit Committee considers, among other things, a firm’s:

 

•     Recent performance on the Linde audit, if applicable;

•     Capability and expertise in providing audit and related services to companies with the breadth and complexity of Linde’s worldwide operations;

•     An analysis of the firm’s known legal risks and any significant legal or regulatory proceedings in which it is involved;

•     External data on audit quality and performance, including recent Public Company Accounting Oversight Board (“PCAOB”) reports on the firm and its peer firms;

•     The appropriateness of the firm’s proposed fees for audit and non-audit services;

•     the firm’s independence (discussed below); and

•     if applicable, the firm’s tenure as Linde’s independent auditor, including the benefits of having a tenured auditor and controls and processes that help ensure the firm’s independence.

 

 

 

 

Linde plc  |  41  


Audit Matters

Auditor Independence

 

 

Auditor Independence

As noted in the Audit Committee Charter and in the Audit Committee Report presented below, the independent auditor reports directly to the Audit Committee and the Audit Committee is charged with evaluating its independence.  The Audit Committee has adopted the policies and procedures discussed below that are designed to ensure that PwC is independent.  

Based on this evaluation and representations from PwC, the Audit Committee believes that PwC is independent and that it is in the best interest of Linde and its shareholders to have PwC as the Company’s independent auditor for 2022.

Non-Audit Engagement Services Pre-Approval Policy

 

 

The Audit Committee has utilized PwC (along with other accounting firms) to provide non-audit services in 2021.  Linde understands the need for PwC to maintain objectivity and independence as the auditor of the Company’s financial statements and its internal control over financial reporting.  Accordingly, the Audit Committee has established a policy whereby all non-audit fees of the independent auditor must be approved in advance by the Audit Committee or its Chairman, and has adopted a guideline that, absent special circumstances, the aggregate cost of non-audit engagements in a year should not exceed the audit fees for that year.  The non-audit fees that are incurred are typically far less than this limit and, as noted below in the report on independent auditor fees, such non-audit fees were approximately 2% of total fees in 2021.  All the Audit-Related Fees, Tax Fees and All Other Fees disclosed below were approved by the Audit Committee.

 

 

Audit Partner and Audit Firm Rotation

 

 

The Audit Committee’s policy and applicable regulations require that the lead audit engagement partner of the independent auditor must rotate off the Company’s account at least every five years.  Under Irish and EU law, as a “public interest entity,” Linde plc is required to replace its audit firm at least once every ten years and is required to conduct an audit tender procedure in accordance with such applicable laws to identify the replacement auditor and submit its choice to shareholders at a general meeting.  Apart from these requirements, the Audit Committee believes that it is inappropriate to establish a fixed limit on the tenure of the independent auditor.  Continuity and the resulting in-depth knowledge of the Company strengthens the audit.  Moreover, the mandatory partner rotation policy expressed above, normal turnover of audit personnel, the Audit Committee’s policy regarding the hiring of auditor personnel as described below, and the Audit Committee’s practices restricting non-audit engagements of the independent auditor as described above, all mitigate against any loss of objectivity that theoretically could arise from a long-term relationship.  As provided in the Audit Committee’s Charter and as further described above, the Audit Committee continuously evaluates the independence and effectiveness of the independent auditor and its personnel, and the cost and quality of its audit services in order to ensure that the Audit Committee and the Company’s shareholders are receiving the best audit services available.

 

Hiring Policy – Auditor Employees

The Audit Committee has established a policy whereby no former employee of the independent auditor may be elected or appointed as an officer of the Company earlier than two years after termination of the engagement or employment.

 

 

 

  42  |  Linde plc


Audit Matters

Fees Paid to the Independent Auditor

 

 

Fees Paid to the Independent Auditor

The Audit Committee authorizes and oversees the fees paid to PwC for audit and non-audit services.  The aggregate fees billed by PwC in 2021 and 2020 for its services are set forth in the table below, followed by a description of the fees.  

Types of Fees

 

 

 

Audit

 

Audit - Related

 

Tax

 

All Other

 

Total

 

2021

 

 

19,810,000

 

 

 

 

190,000

 

 

 

 

120,000

 

 

 

 

20,000

 

 

 

 

20,140,000

 

 

 

2020

 

 

24,400,000

 

 

 

 

60,000

 

 

 

 

740,000

 

 

 

 

10,000

 

 

 

 

25,210,000

 

 

 

 

 

 

Audit Fees.  These are fees paid for the audit of Linde plc’s annual U.S. GAAP and IFRS financial statements, the reviews of the financial statements included in Linde plc’s reports on Form 10-Q, the half-year IFRS report, the opinion regarding Linde plc’s internal controls over financial reporting as required by §404 of the Sarbanes-Oxley Act of 2002, and services that are normally provided by the independent auditor in connection with statutory audits in foreign jurisdictions and regulatory filings or engagements for those fiscal years.

 

Audit-Related Fees.  These are fees paid for assurance and related services rendered that are reasonably related to the performance of the audit or review of Linde plc’s financial statements other than the fees disclosed in the foregoing paragraph

Tax Fees.  These are fees paid for professional services rendered primarily for preparation of expatriate employee tax returns, preparation of tax returns in non-U.S. jurisdictions and assistance with tax audits.

All Other Fees.  These are fees paid for services rendered other than those described in the foregoing paragraphs.  These services related primarily to online research tools and subscriptions.

 

 

 

 

 

 

 

Linde plc  |  43  


Audit Matters

Audit Committee Report

 

 

Audit Committee Report

 

 

As set forth in the Audit Committee’s Charter, the management of the Company is responsible for: (1) the preparation, presentation and integrity of the Company’s financial statements; (2) the Company’s accounting and financial reporting principles; and (3) internal controls and procedures designed to ensure compliance with applicable laws, regulations, and standards, including internal control over financial reporting.  The independent auditor is responsible for auditing the Company’s financial statements and expressing an opinion as to their conformity with generally accepted accounting principles and expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

A principal role of the Audit Committee is to assist the Board of Directors in its oversight of the Company’s financial reporting process.  In the performance of its oversight function, the Audit Committee has considered and discussed the audited financial statements with management and the independent auditor.  The Audit Committee has also discussed with the independent auditor the matters that are required to be discussed in accordance with Public Company Accounting Oversight Board (PCAOB) standards relating to communications with audit committees.

 

The Audit Committee has discussed with the independent auditor its independence from the Company and its management.  The Audit Committee has received the written disclosures and the letters from the independent auditor required by applicable requirements of the PCAOB.  The Audit Committee has also received written communications from management with respect to non-audit services provided to the Company by the independent auditor in calendar year 2021 and those planned for 2022.  The Audit Committee has further considered whether the provision of such non-audit services is compatible with maintaining PricewaterhouseCoopers’ independence.

In its oversight role for these matters, the Audit Committee relies on the information and representations made by management and the independent auditor.  Accordingly, the Audit Committee’s oversight does not provide an independent basis to certify that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that the Company’s independent auditor is, in fact, independent.

Based upon the review and discussions described in this report, and subject to the limitations on the role and responsibilities of the Audit Committee referred to above and in the Charter, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Form 10-K and Annual Report for the year ended December 31, 2021 filed with the SEC.

The Audit Committee

Martin H. Richenhagen, Chairman

Dr. Thomas Enders

Dr. Victoria E. Ossadnik

Alberto Weisser

 

 

 

 

 

 

  44  |  Linde plc


Proposal 2a: Non-Binding Ratification of the Appointment of the Independent Auditor

Proposal 2b: Authorization of the Board to Determine the Auditor’s Remuneration

 

 

Proposal 2a: Non-Binding Ratification of the Appointment of the Independent Auditor

Proposal 2b: Authorization of the Board to Determine the Auditor’s Remuneration

 

 

Under New York Stock Exchange (“NYSE”) and SEC rules, selection of the Company’s independent auditor is the direct responsibility of the Audit Committee.  The Board has determined, however, to seek shareholder ratification of that selection as a good practice in order to provide shareholders an avenue to express their views on this important matter.  If shareholders fail to ratify the selection, the Audit Committee may reconsider the appointment.  Even if the current selection is ratified by shareholders, the Audit Committee reserves the right to appoint a different independent auditor at any time during the year if the Audit Committee determines that such change would be in the best interests of the Company and its shareholders.

Information concerning the independent auditor may be found under the caption “Audit Matters” above.  The Audit Committee believes the selection of PwC as the Company’s independent auditor for 2022 is in the best interest of the Company and its shareholders.

 

In addition, Irish law provides that the remuneration of the Company’s statutory auditor may be determined by shareholders at the AGM.  At its February 2022 meeting, the Audit Committee approved PwC’s remuneration, subject to receiving the necessary shareholder approval at the 2022 AGM.

As required under Irish law, the resolutions in respect of Proposals 2a and 2b are ordinary resolutions that require the affirmative vote of a simple majority of the votes cast.

The text of the resolution in respect of Proposal 2a is as follows:

“To ratify, in a non-binding vote, the appointment of PricewaterhouseCoopers as independent auditor of the Company.”

The text of the resolution in respect of Proposal 2b is as follows:

“To authorize, in a binding vote, the Board, acting through the Audit Committee, to determine the remuneration of PricewaterhouseCoopers.”

 

 

 

 

 

 

The Board recommends that you vote “FOR” the ratification, on an advisory and non-binding basis, of the appointment of PricewaterhouseCoopers as independent auditor and “FOR” the authorization of the Board, acting through the Audit Committee, to determine the remuneration of PricewaterhouseCoopers.

 

 

 

 

 

 

 

Linde plc  |  45  


Executive Compensation Matters

Compensation Discussion and Analysis

 

Executive Compensation Matters

Report of the Human Capital Committee

The Company’s Human Capital Committee (“HC Committee”) reviewed and discussed with management the “Compensation Discussion and Analysis” and recommended to the Board that it be included herein.  The HC Committee has represented to management that, to the extent that the “Compensation Discussion and Analysis” discloses the HC Committee’s deliberations and thinking in making executive compensation policies and decisions, it is accurate and materially complete.

The Human Capital Committee

Edward G. Galante, Chairman

Prof. DDr. Ann-Kristin Achleitner

Joe Kaeser

Prof. Dr. Martin H. Richenhagen

Robert L. Wood

 

Compensation Discussion and Analysis

 

 

This Compensation Discussion and Analysis (“CD&A”) provides context for the policies and decisions underlying the 2021 compensation reported in the executive compensation tables included herein for the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the three other executive officers who had the highest total compensation for 2021, as set forth in the “Summary Compensation Table” (these five executive officers are collectively referred to as the “Named Executive Officers” or the “NEOs”).  The HC Committee is responsible for policies and decisions regarding the compensation and benefits for the Company’s NEOs.

 

 

Executive Summary

 

2021 Company Performance Highlights

 

 

In 2021, Linde achieved strong financial results and, through the efforts of its employees, supplied products and services to its customers on a reliable and cost-effective basis.  The Company grew revenue by 13% year-over-year to $30.8 billion, and achieved adjusted operating profit of $7.2 billion, 24% above 2020.(a)  Linde delivered value to its shareholders by distributing $6.8 billion in the form of dividends and stock repurchases, while growing adjusted diluted earnings per share to $10.69, up 30% versus 2020.  Furthermore, the Company ended 2021 with a record backlog in contractually secured projects and has committed almost $500 million to clean energy initiatives in order to ensure robust and sustainable performance into the future.  

 

 

 

(a)

Adjusted operating margin, earnings per share and after-tax return on capital are non-GAAP measures.  Adjusted operating margin and earnings per share amounts are reconciled to reported amounts in the “Non-GAAP Financial Measures” Section in Item 7 of the Linde plc 2021 Form 10-K.  For definition of after-tax return on capital and reconciliation to GAAP please see the “Non-GAAP Measures and Reconciliations” set forth in the financial tables that are included as an appendix to the 4th quarter and full year 2021 earnings press release that was furnished in the Linde plc Form 8-K filed on February 10, 2022.

 

  46  |  Linde plc


Executive Compensation Matters

Compensation Discussion and Analysis

 

Year-Over-Year Performance in Key Financial Measures

 

 

Comparison of Cumulative Total Shareholder Return Since Merger ($100 Initial Investment)

 

 

 

2021 Compensation Highlights  

 

 

As a result of the Company’s strong performance, the annual variable compensation program’s 2021 Corporate payout factor was 185% of target.  The performance share units (PSUs) granted in 2019 under the Company’s long-term incentive program also achieved above-target payouts against the challenging goals that were established at the beginning of their three-year performance period.  The Company exceeded the maximum performance levels that were established for both the Return on Capital (ROC) and relative Total Shareholder Return (TSR) PSUs, resulting in a payout of 200% of target for each award.  

 

Alignment of Executive Compensation with Company Performance

 

 

The HC Committee seeks to achieve its executive compensation objectives by aligning the design of the Company’s executive compensation programs with the Company’s business objectives, ensuring a balance between financial and strategic non-financial goals.

FINANCIAL BUSINESS OBJECTIVES: Achieve sustained growth in profitability and shareholder return resulting in a robust cash flow to fund capital investment growth opportunities, dividend payments and share repurchases.

 

Annual performance-based variable compensation earned by meeting or exceeding pre-established financial goals.

 

Annual grants of PSUs that vest based upon performance results over three years.

 

Annual grants of stock options, the value of which is directly linked to the growth in the Company’s stock price.

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Executive Compensation Matters

Compensation Discussion and Analysis

 

 

Annual grants of restricted stock units (RSUs) with three-year cliff vesting and value based on the Company’s stock price.

 

STRATEGIC BUSINESS OBJECTIVES: Maintain world-class standards in safety, environmental responsibility, global compliance, strategic positioning, productivity, talent management, and financial controls.

 

Annual payout of variable compensation is impacted by performance in these strategic and non-financial objectives.

Attract and retain executives who thrive in a sustainable performance-driven culture.

 

A competitive compensation and benefits program regularly benchmarked against peer companies of similar size in market cap, revenue and other financial metrics and business attributes.

 

Realized compensation that varies with Company performance, with downside risk and upside opportunity.

 

 

 

Overview of Executive Compensation Program

 

Executive Compensation Philosophy

 

 

The HC Committee established its compensation philosophy to serve as the basis for designing executive compensation programs.

Key Objectives

 

Attract and retain talented executives.

 

Motivate executives to deliver strong business results in line with shareholder expectations.

 

Build and support a performance-driven culture.

 

Encourage executives to earn and own Company stock, aligning their interests with those of shareholders.

Other Main Principles  

 

Comparator groups should reflect talent markets, customer segments, and investment markets, and will be adjusted to meet changes in these elements.

 

Target total direct compensation will include a fixed base pay component plus variable short- and long-term incentives.

 

Total target direct compensation will be focused at the median (50th percentile) of the competitive market.

 

Challenging but achievable performance goals to be established with performance levels defined as “maximum” representing truly exceptional, outstanding performance and a carefully and objectively established threshold level of performance, below which no incentives will be earned.

 

Long-term incentives should mainly be in the form of equity, which focuses executives on total Company performance in the eyes of shareholders and rewards executives when shareholders are rewarded.

 

 

 

 

 

 

 


 

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Executive Compensation Matters

Compensation Discussion and Analysis

 

 

 

Best Practices Supporting Executive Compensation Objectives

 

What We Do:

Link a substantial portion of total compensation to Company performance:

Annual variable compensation awards based principally upon performance against objective, pre-established financial goals

Equity grants consisting largely of PSUs and stock options, focused on longer term shareholder value creation

Set compensation within competitive market ranges

Require substantial stock ownership and stock retention requirements for officers

Limit perquisites and personal benefits

Have a clawback (“recapture”) policy that applies to performance-based cash awards and equity grants, including gains realized through exercise or sale of equity securities

 

 

What We Do Not Do:

X Guarantee bonuses for executive officers

X Allow pledging or hedging of Company stock held by officers

X Pay tax “gross-ups” on perquisites and personal benefits unless related to international assignment benefits that are available to employees generally

X Include the same metrics in the short- and long-term incentive programs

X Allow backdating or repricing of stock option awards

X Pay or accrue dividends or dividend equivalents on unvested PSU and RSU awards

X Include an excise tax “gross-up” provision in the event of a change-in-control

X Accelerate equity award vesting upon change-in-control

 

 

Elements of Executive Compensation

 

 

 

 


 

Linde plc  |  49  


Executive Compensation Matters

Compensation Discussion and Analysis

 

 

 

The following table describes the elements of our executive compensation program and the form of each element.

 

Element

       Form

Base Salary

     Cash (salary increases, if applicable, are typically made effective on April 1st of each year).

Annual Variable Compensation

     Cash (based on achievement against financial, strategic non-financial, and individual objectives during the year).

Equity Awards

     Stock Options (each representing the right to purchase a share of Company stock at an exercise price equal to the closing market price on the date of grant).

     PSUs (each representing one share of Company stock which vests only if threshold achievement against pre-established goals is met or exceeded).

     RSUs (each representing one share of Company stock with a time-based vesting requirement).  

 

 

Perquisites and Personal Benefits

In addition to the compensation elements described above, the Company offers certain perquisites and personal benefits to the NEOs on a limited basis.  For 2021, the HC Committee reviewed and approved items that could be construed as perquisites or personal benefits for each NEO to ensure they are consistent with local country market practice or otherwise are provided for limited and specifically defined business purposes.  Some items that must be classified as perquisites relate to support provided to certain NEOs while on international assignment.  The international assignment benefits are fundamentally the same as available to other employees who are on similar international assignments.  International assignment compensation is tax equalized and no “tax gross-up” is permitted for any executive officer unless such gross-up is available to employees generally.

Pay Mix

For 2021, between 73% and 79% of the NEOs’ target total direct compensation opportunity was in the form of performance-based variable compensation and equity grants, motivating them to deliver strong business performance and drive shareholder value.  

The performance-based compensation is “at risk” and dependent upon the Company’s achievement of pre-established financial and other business goals set by the HC Committee and, for equity incentives, also the Company’s stock price performance.  The annual variable compensation payout and the ultimate value of the performance-based equity compensation awards could be zero if the Company does not perform.

 

 

 

Performance-based equity compensation is valued at the “grant-date fair value” of each award as determined under accounting standards related to share-based compensation.

 

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Executive Compensation Matters

Compensation Discussion and Analysis

 

How Compensation Decisions Are Made

 

Shareholder Engagement

 

 

The Company maintains a robust outreach program whereby management regularly discusses executive compensation design and other relevant matters with shareholders.  

 

At the July 2021 Annual General Meeting of Shareholders, approximately 93.1% of the votes cast were in favor of the Company’s Advisory Vote on NEO Compensation.  When making compensation program decisions, the HC Committee considered these results as well as shareholder feedback received during outreach sessions.

 

Role of the Human Capital Committee

 

The HC Committee reviews and approves the corporate goals and objectives relevant to the CEO’s compensation, evaluates the CEO’s performance relative to those goals, and determines and approves the CEO’s compensation. The HC Committee also reviews the performance of the other NEOs against the goals and objectives relevant to their compensation, and reviews and approves the compensation of the other NEOs.

 

Role of the Compensation Consultant

 

The HC Committee engages a third-party compensation consultant to assist in analysis to inform and support the HC Committee’s decisions on executive compensation.  For its consideration of 2021 executive compensation, the HC Committee engaged Pearl Meyer LLC (“Pearl Meyer”) as its compensation consultant.

 

In February 2021, as part of the HC Committee’s standard practice to conduct such a review on an annual basis, the HC Committee assessed the independence of the compensation consultant. After considering the six independence factors specified in the NYSE listing standards, the HC Committee determined that Pearl Meyer met the criteria for independence.

 

The scope of Pearl Meyer’s engagement includes:

 

Review of compensation programs and preparation and presentation to the HC Committee of reports on executive compensation trends and other various materials.

 

Review of the peer group analysis and compensation benchmarking studies prepared by management and review of other independent compensation data.

 

Advice on the determination of NEO’s compensation, the consultant’s view of the CEO’s recommendations for other NEO compensation, as well as input on the CEO’s compensation.

 

Review of and advice on compensation program design proposals presented by management for the HC Committee’s consideration.

 

Compensation Peer Group

 

The HC Committee established a Compensation Peer Group to be used to assess competitive market compensation ranges for its top officers.  Elements considered by the HC Committee when choosing companies for peers included market capitalization, revenue, net income, industry, global operations, location of headquarters, and stock markets where publicly traded.  The HC Committee reviews the peer group on an annual basis, though will only make changes when appropriate as it values year-over-year consistency.  Below are the companies comprising the Compensation Peer Group that was used for making pay decisions for calendar year 2021.

 

 

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Executive Compensation Matters

Compensation Discussion and Analysis

 

 

 

 

Risk Considerations

 

 

The HC Committee reviews the design of the Company’s incentive compensation plans on an annual basis to confirm that the incentive programs do not encourage excessive risk taking.  During the HC Committee’s review in January 2021, sufficient controls to incentive plan design were identified including payout caps, a blend of multiple financial and non-financial factors, and the significant weight given to rewarding long-term performance through equity awards.

 

Based on this review, management and the HC Committee do not believe that the Company’s incentive compensation plans create risks that are reasonably likely to have a material adverse effect on the Company.

 


 

  52  |  Linde plc


Executive Compensation Matters

Compensation Discussion and Analysis

 

 

 

2021 Executive Compensation Design and Decisions

Aggregate Compensation

 

 

 

 

 

 

 

In establishing the 2021 compensation for each NEO, the HC Committee considered whether the value of each NEO’s aggregate compensation package was consistent with its objectives for Linde’s executive compensation program.  It evaluated the following factors when determining compensation levels for NEOs:

 

market median data of international companies traded on the U.S. stock exchanges.

 

expected contribution to results, and exhibition of values, competencies and behaviors critical to the success of the Company.

 

internal equity: respective role, responsibilities and reporting relationships.

 

experience and time in similar roles.

 

retention objectives.

 

The HC Committee did not have a set formula for determining target compensation opportunity; however, it referred to the median benchmark data during its review.  Additionally, the HC Committee acknowledged that its general practice will be to establish compensation levels toward the lower end of a competitive market range for an executive officer who is newer to his or her role.  Conversely, a longer tenured executive officer with a history of strong performance will have target compensation levels set higher in the competitive range.

 

 

Direct Compensation for Executive Officers

 

Salary

 

 

The salary level for each NEO was established by the HC Committee after its consideration of multiple factors including positioning to market, CEO input (other than for himself) and advice from Pearl Meyer. Salary adjustments, if any, are typically effective April 1 of each year. Williams Thermo Fisher United Technologies

Annual Performance-Based Variable Compensation

The HC Committee established an annual performance-based variable compensation program for the 2021 calendar year that focuses executives on the key objectives that position Linde for sustained growth and the creation of shareholder value without compromising long-term business objectives or encouraging excessive risk-taking.  The HC Committee decided not to make any changes to the general design of the annual variable compensation program for the 2021 calendar year compared to 2020.

 

The annual variable compensation program is comprised of three main components: financial performance, strategic and non-financial performance and individual performance.  This program is designed to deliver pay commensurate with performance wherein results that are greater than target goals are rewarded with above target payout levels and performance not meeting minimum threshold expectations reduces the payout to zero.

 

 

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Executive Compensation Matters

Compensation Discussion and Analysis

 

 

 

 

Financial Performance Goals

 

 

Awards under the annual variable compensation program are determined based on Company performance against challenging, pre-established financial goals.  This component is weighted 75% of the total financial and non-financial payout and payouts related to this component can range from zero to 200% of target variable compensation (for up to 150 percentage points).  Top line sales growth is important to the Company and 25% of the financial performance goal is based on sales.  Recognizing the importance of profitability and cash flow to the Company, 50% of the financial performance goal is based on net income, and the remaining 25% on operating cash flow.

To establish the goals related to the financial component of the program, the HC Committee considers many factors including the degree of control senior management may have over certain factors that affect financial performance.  Goals are established with the expectation that executives will be rewarded with higher payouts if actual performance exceeds targets.  Factors considered in setting the threshold, target and maximum financial performance goals for each financial measure include:

 

management’s operating plan, including expected year-over-year challenges in performance,

 

macro-economic trends and outlooks in each of the countries in which the Company operates,

 

foreign exchange rate trends and outlook,

 

expected industrial gases industry peer performance and that of the broader S&P 500 and leading European companies,

 

shifts in key customer markets, and

 

expected contribution from contracts already awarded and decisions or actions already made or taken.

Strategic and Non-Financial Performance Goals

In alignment with the Company’s compensation philosophy, the design of the annual variable compensation program balances the need for management to deliver annual results with the desire to meet multi-year growth expectations.  Selected key strategic and non-financial performance objectives are included to recognize these critical measures of the Company’s health and potential for future success.  

When establishing the 2021 program design, the HC Committee identified the strategic and non-financial elements that were considered most important to long-term sustainable success and established annual goals with respect to those elements.  Most of the strategic and non-financial goals are linked to quantitative and measurable objectives, although the HC Committee uses its judgment when determining the value awarded for goal achievement after a rigorous review of the results.  This component is weighted 25% of the total financial and non-financial payout, and payouts related to this component can range from zero to 200% of target variable compensation (for up to 50 percentage points). The 2021 strategic and non-financial performance goals are as follows:

 

 

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Executive Compensation Matters

Compensation Discussion and Analysis

 

 

 

GOAL

ADDITIONAL DETAIL

Values: Safety, Compliance, Sustainability and Inclusion

     Zero fatalities with fatality potential event reduction

     No significant process safety or environmental events

     Best in class recordable injury, lost workday case and vehicle accident rates

     Continue to manage COVID-19 risks and protocols

     Achieve world class performance in sustainability and continue progress toward greenhouse gas intensity reduction goals

     A strong global compliance program and culture focusing on policies, procedures, training, reporting, accountability and verification via audit

     Strengthen leadership pipeline, including globally diverse talent, through a single succession planning and performance management approach across the enterprise

 

 

    Providing employees with a safe operating environment through investing in state of the art technology and by driving a culture in which safety is a top priority

    Rigorous processes and procedures to ensure compliance with all applicable environmental regulations, to meet sustainable development performance targets and to continuously reduce the environmental impact of the Company’s operations in the communities in which it operates

    Create and maintain a strong ethical culture in every country where Linde operates

    All employees accountable for ensuring that business results are achieved in compliance with local laws and regulations and the Company’s Code of Business Integrity

    Attraction, retention and development of a diverse and engaged workforce through a robust succession planning process

    Employee value proposition includes providing strong, dynamic leadership, a challenging work environment, industry-leading performance, competitive pay and benefits, and rewards and recognition for outstanding performance

Strategy:

     Position the business for long-term performance

     Operationalize the decarbonization strategy

     Deliver profitable growth by commercializing new applications, new end-use markets and new business models.

     Ensure robust backlog execution and positioning for mega projects

     Leverage digitalization to support growth, productivity, and automation with demonstrable bottom line impact.

     Enhance organizational capabilities in productivity tools, processes and practices

 

    Deliver excellent results in the short-term and over a longer, sustainable period of time

    Rigorously assess the quality and future impact of actions taken, as benefits may not be recognized for several years

    Monitor the “health” of the organization through pulse surveys

    Focus on meeting schedules and cost estimates, starting-up plants reliably and efficiently, and supporting plant availability

    Deliver value through continuous innovation to help Linde’s customers enhance their product quality, service, reliability, productivity, safety, and environmental performance

    Work across disciplines, industries and sectors, with employees, customers, suppliers and a range of other stakeholders to get more output utilizing fewer resources and with less environmental impact

 

Relative Performance:

     Strong performance relative to peer companies

    Continue to be the best performing industrial gases company in the world

    Assess how well we anticipate and manage adversity to optimize results

    Determine if management’s actions appear more or less effective than those of Linde’s peers

    Appropriately respond to macroeconomic or other external factors unknown at the time financial goals were established

 

 

Individual Performance

 

 

To reinforce a culture where pay is directly linked to performance and to recognize the contributions of individuals to overall Company results, an individual performance component is included in the annual variable compensation design.  Excluding the CEO, the HC Committee may make a positive, negative, or no adjustment to each NEO’s performance-based variable compensation based on its evaluation of his individual performance.  For the CEO, the HC Committee may make a negative or no adjustment to his annual variable compensation payment to reflect his performance.

In evaluating if an individual performance adjustment was appropriate, the HC Committee will consider various qualitative factors, such as the NEO’s:

 

performance in his principal area of responsibility,

 

degree of success in leading the Company to meet its strategic objectives, and

 

driving the Company’s key values (including sustainable development, safety, health & environment, diversity & inclusion, community engagement, and integrity & compliance) and competencies that are important to the success of the Company.

 

 

 

 

 

 

 

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Executive Compensation Matters

Compensation Discussion and Analysis

 

 

Annual Performance-Based Variable Compensation Opportunity for 2021

 

 

The HC Committee established the 2021 variable compensation target for each NEO (expressed as a percent of salary that would be earned for 100% achievement of the performance goals).  The target level for each NEO ranged from 85% to 180% of base salary.

 

 

2022 ANNUAL VARIABLE COMPENSATION DESIGN: In January 2022, the HC Committee approved the design and goals for the Company’s annual performance-based variable compensation program in 2022.

In recognition of the importance of net income to shareholders, the HC Committee approved adjustments to the weights within the financial component of the program, to 20% for sales (from 25%) and 55% for net income (from 50%), while maintaining the 25% weighting for operating cash flow.

In recognition of the importance of the Company’s standards for, and impacts from, environmental, social, and governance (ESG) considerations, the HC Committee also approved changes to the non-financial component of the program, which continues to be weighted 25% of the total financial and non-financial payout.  The non-financial component will now be comprised of three pillars, each with their own weights: 1) reduction in absolute greenhouse gas emissions (weighted 20% of non-financial component), 2) ESG values: safety, health & environment; sustainability (excluding greenhouse gas emissions), compliance & integrity; and human capital (weighted 60%), and 3) the Company’s relative performance and strategic positioning (weighted 20%).

 

2021 Annual Performance-Based Variable Compensation Results and Payout

 

Financial Business Results

 

 

As noted above, financial goals are set considering multiple factors with the recognition that there are some items that cannot be easily predicted and over which management has less control, such as foreign exchange rates and certain raw materials price changes.  As part of the variable compensation plan design, certain pre-determined adjustments may be made by the HC Committee to actual financial results in order to account for these elements.  The HC Committee may also conclude that additional adjustments are appropriate based upon unforeseen factors it deems extraordinary, non-recurring, or otherwise material.

 

The chart below shows for each financial performance measure, the 2021 Corporate financial targets set by the HC Committee and the actual performance achieved. The overall Corporate payout factor for financial performance was 200% of target variable compensation.

 

The payouts for Messrs. Angel, Lamba and White are based on Linde plc Corporate results. However, the financial payout factors for Messrs. Durbin and Panikar are based on a blend of the business segment results for their respective business segment (weighted 75%) and Corporate results (weighted 25%). The overall weighted average payout factors for financial performance for Messrs. Durbin and Panikar were 200% and 192.9%, respectively.

 

 

Financial

Measure

 

Target

($ millions)

 

 

Actual

($ millions)

 

 

Weight

 

 

Achievement

 

 

Payout

 

Sales*

 

 

27,654

 

 

 

29,978

 

 

25%

 

 

200%

 

 

50%

 

Net Income*

 

 

4,775

 

 

 

5,537

 

 

50%

 

 

200%

 

 

100%

 

Operating Cash Flow

 

 

7,671

 

 

 

9,725

 

 

25%

 

 

200%

 

 

50%

 

* For the annual variable compensation program, sales and net income are measured in accordance with GAAP subject to certain adjustments that the HC Committee approves.  

 

 

 

 

 

 

 

  56  |  Linde plc


Executive Compensation Matters

Compensation Discussion and Analysis

 

 

STRATEGIC NON-FINANCIAL BUSINESS RESULTS