John Chevedden, whose address is 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, has submitted the shareholder proposal and supporting statement below (the “Proposal”), and the Proposal will be voted on if it is properly presented at the Annual General Meeting. Mr. Chevedden has advised the Company that, as of December 15, 2021, he has beneficially owned at least 40 ordinary shares of the Company since November 1, 2018. The Board’s statement in opposition to this proposal is set forth immediately after the proposal. The text of the Proposal and supporting statement are as follows:
RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against such proposals, or a simple majority in compliance with applicable laws.
.
The Board has considered the above proposal (the “Proposal”), believes that it is not in the best interests of the shareholders and, therefore, recommends that shareholders vote AGAINST this Item 6 as it would dilute shareholder protections provided by Irish Law and for the other reasons discussed below.
The Proposal requests that the Board take steps to amend Linde’s governing documents (the Linde Irish Memorandum and Articles of Association or “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 ten Supermajority Vote requirements in the Constitution: (1) five are mandated by Irish law and cannot be reduced to a lesser vote, and (2) the other five provide shareholders with various protections under Irish law and the Supermajority Vote provisions of four of these requirements simply reflect the default votes provided under Irish law.
Linde is incorporated in Ireland and thus subject to the Irish corporate laws set forth in the Irish Companies Act 2014 (the “Act”) which, among other things, defines the corporate law rights of Irish companies’ shareholders. Section 191 of the Act provides the following two thresholds for matters requiring shareholder approval at a general meeting of a company duly called and convened:
Matters approved by Ordinary Resolution equate to the simple majority voting threshold requested in the Proposal - matters approved by Special Resolution do not. The Constitution may also include a greater vote threshold than the Special Resolution threshold.
Linde’s principal corporate governance rules are set forth in both the Act and in Linde’s Irish Constitution. In general, the Act requires shareholder action by the Ordinary Resolution simple majority of the votes cast at a meeting standard. However, as to certain matters, the Act requires or defaults to the Special Resolution (i.e., at least 75% of the votes cast at a meeting standard). Linde’s Constitution generally follows these provisions of the Act. Many of the Supermajority Vote requirements in the Constitution are mandated by Irish law and cannot be changed, while others simply reflect the default vote requirement set by Irish law but could be lowered to a simple majority vote requirement. One Supermajority Vote provision requires the vote of two-thirds (2/3) of the outstanding shares but could be lowered to a simple majority vote.
There are nine shareholder actions in the Constitution that require Special Resolution approval (75 % of the votes cast at a meeting), and one that requires the vote of two-thirds (2/3) of the outstanding shares. The table on the next page identifies those articles in Linde’s Constitution that require action by a Supermajority Vote and the Board’s recommendation with respect to each voting threshold. A more detailed discussion of these requirements follows the table. The Board made these recommendations based in part upon the legal advice provided to the Board by the Company’s Irish legal counsel, Arthur Cox LLP, Dublin, Ireland, included as Appendix 2 to this Proxy Statement.
As required under Irish law, the resolution in respect of Proposal 6 is an ordinary resolution that requires the affirmative vote of a simple majority of the votes cast.
Shareholder Proposals, Director Nominations and Other Business for the 2023 Annual General Meeting
SEC Rule 14a-8: In order to be included in Linde’s proxy statement and form of proxy for Linde’s 2023 Annual General Meeting of shareholders, a shareholder proposal must be received in writing at Linde’s principal executive offices on or before January 2, 2023, unless the date of the 2023 Annual General Meeting of shareholders has been changed by more than 30 calendar days from the anniversary of the 2022 Annual General Meeting. In that case, Linde must include in the proxy statement for its 2023 Annual General Meeting any shareholder proposals pursuant to Rule 14a-8 under the Exchange Act that it receives a reasonable time before it beings to print and send its proxy materials.
Proxy Access: Under Linde’s Constitution, a shareholder or a group of up to 20 shareholders owning shares representing at least 3% of Linde’s ordinary shares continuously for at least three years, is eligible to nominate and include in the Company’s Proxy Statement their own Director nominee(s) constituting up to 20% of the total number of Directors then serving on the Board (with a minimum of up to two Director nominees), provided that the shareholder(s) and the nominee(s) satisfy the Proxy Access requirements in Linde’s Constitution.
Notice of Director nominees must include the information required under Linde’s Constitution and must be received by the Company’s Corporate Secretary at its principal executive offices no earlier than the close of business on November 28, 2022 and no later than the close of business on December 28, 2022, unless the date of the 2023 Annual General Meeting of shareholders has been scheduled to be held more than 30 calendar days from the anniversary of the distribution date of this proxy statement. In that case, such notice must be received by Linde’s Corporate Secretary no earlier than the close of business on the 180th calendar day before the date of the 2023 Annual General Meeting of shareholders and no later than the close of business on the later of (i) the 150th calendar day before the date of the 2023 Annual General Meeting of shareholders and (ii) the 10th calendar day following the date on which public announcement of the date of the 2023 Annual General Meeting of shareholders is first made.
Irish Statutory Shareholder Proposal Deadline. To be considered timely pursuant to section 1104 of the Irish Companies Act 2014, a request by a shareholder (or shareholders) holding 3% of the issued share capital of the Company (representing at least 3% of the total voting rights of all of the shareholders having a right to vote at the 2023 Annual General Meeting) to put an item on the agenda of the 2023 Annual General Meeting and/or to present a draft resolution to be adopted at the 2023 Annual General Meeting under section 1104 of the Irish Companies Act 2014 must be received by the Company in written or electronic form no later than the 42 calendar days before the 2023 Annual General Meeting of shareholders.
Linde plc | 95
Information About the Annual General Meeting and Voting
Miscellaneous
Advance Notice Provisions: To be considered timely under the advance notice provisions of the Company’s Constitution, notice of any other shareholder proposal or nomination notice not submitted for inclusion in the Company’s proxy statement pursuant to the proxy access provisions of the Company’s Constitution or Rule 14a-8 under the Exchange Act, and not submitted pursuant to section 1104 of the Irish Companies Act 2014, must be given to the Company’s Secretary in writing at the principal executive offices of the Company and received no earlier than April 26, 2023 and no later than the close of business on May 26, 2023. This applies unless the date of the 2023 Annual General Meeting of shareholders has been advanced by more than 30 calendar days or delayed by more than 60 calendar days from the anniversary of the 2022 Annual General Meeting. In that case, such notice must be received by Linde’s Corporate Secretary no earlier than the close of business on the 90th calendar day before the date of the 2023 Annual General Meeting of shareholders and no later than the close of business on the later of (i) the 60th calendar day before the date of the 2023 Annual General Meeting of shareholders and (ii) the 10th calendar day following the date on which the notice of the meeting is sent or public disclosure of the date of the meeting is made by the Company, whichever event in this clause (ii) occurs first.
Shareholder proposals, director nominations or related written notices must be delivered to the Corporate Secretary, Linde plc, Forge, 43 Church Street West, Woking, Surrey GU21 6HT United Kingdom.
Annual Reports
Shareholders of record at close of business on April 28, 2022 should have received either (1) a notice that Linde’s 2021 Form 10-K and Annual Report to Shareholders and 2021 IFRS Annual Report are available on the internet or (2) a printed copy of this Proxy Statement and the 2021 Form 10-K and Annual Report to Shareholders. If you have received a printed copy of this Proxy Statement without the 2021 Form 10-K and Annual Report to Shareholders, please contact Investor Relations at the address below and a copy will be sent to you.
A copy of Linde’s Annual Report on Form 10-K for the Fiscal Year Ended December 31, 2021 is available to each holder or beneficial owner of Linde’s ordinary shares as of April 28, 2022. This report will be furnished without charge upon written request to the Investor Relations Department, Linde plc, Forge, 43 Church Street West, Woking, Surrey GU21 6HT United Kingdom. You may also call 001-203-837-2210 or 49-89-35757-1332.
Cost of Proxy Solicitation
The entire cost of soliciting proxies will be borne by Linde including the expense of preparing, printing and mailing this Proxy Statement. Solicitation costs include payments to brokerage firms and others for forwarding solicitation materials to beneficial owners of Linde’s stock and reimbursement of out-of-pocket costs incurred for any follow up mailings. Linde also has engaged Morrow Sodali LLC to assist in the solicitation of proxies from shareholders at a fee of $8,000 plus reimbursement of out-of-pocket expenses. In addition to use of the mail, proxies may be solicited personally or by telephone by employees of Linde without additional compensation, as well as by employees of Morrow Sodali LLC.
April 29, 2022
You are Urged to Promptly Complete and Submit Your Proxy
96 | Linde plc
Appendix 1: Linde plc Directors’ Remuneration Report
Appendix 1: Linde plc Directors’ Remuneration Report
DIRECTORS' REMUNERATION REPORT FOR LINDE PLC
The company is subject to disclosure regimes in the United States, Germany and Ireland. While some of the disclosure requirements in these jurisdictions overlap or are otherwise similar, some differ and require distinct disclosures. As a result, you will find our Irish Statutory Directors' Remuneration Report (the "Remuneration Report") within this section of the Annual Report. The company paid the directors in accordance with the remuneration policy on which the company's shareholders will be asked to vote, on an advisory and non-binding basis, at the 2022 Annual General Meeting of Shareholders.
Introduction
Linde's Board of Directors (the “Board”) believes that our current program is competitive and appropriate within the market where we primarily compete for directors and executive talent. We are sensitive to the compensation governance practices prevalent in our peer group.
2021 compensation 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 prior year. 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 prior year. 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.
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.
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. When making compensation program decisions, the Human Capital Committee considered shareholder feedback received during outreach sessions.
Linde plc | Appendix 1-1
Appendix 1: Linde plc Directors’ Remuneration Report
Role of the Compensation Consultant
The Human Capital Committee engages a third-party compensation consultant to assist in analysis to inform and support the Human Capital Committee’s decisions on executive compensation. For its consideration of 2021 executive compensation, the Human Capital Committee engaged Pearl Meyer LLC (“Pearl Meyer”) as its compensation consultant.
In February 2021, as part of the Committee’s standard practice to conduct such a review on an annual basis, the Committee assessed the independence of the compensation consultant. After considering the six independence factors specified in the NYSE listing standards, the Committee determined that Pearl Meyer met the criteria for independence.
The scope of Pearl Meyer’s engagement includes:
|
|
a. |
Review of compensation programs and preparation and presentation to the Human Capital Committee of reports on executive compensation trends and other various materials |
|
|
b. |
Review of the peer group analysis and compensation benchmarking studies prepared by management and review of other independent compensation data |
|
|
c. |
Input on the CEO’s compensation |
|
|
d. |
Review of and advice on compensation program design proposals presented by management for the Human Capital Committee’s consideration. |
Compensation Peer Group
The Human Capital Committee established a Compensation Peer Group to be used to assess competitive market compensation ranges for its top officers, including its CEO. Elements considered by the 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 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.
|
Compensation Peer Group |
|
3M |
|
Gilead Sciences |
|
Merck & Co. |
|
Abbvie |
|
Halliburton Company |
|
Mondelez Intl |
|
Abbott |
|
Honeywell Intl |
|
PPG Industries |
|
Caterpillar |
|
InBev |
|
Raytheon Technologies |
|
Coca-Cola |
|
Johnson Controls |
|
Roche |
|
Cummins |
|
Kraft Heinz |
|
SAP |
|
Danaher |
|
LyondellBasell |
|
Sherwin-Williams |
|
Deere |
|
Medtronic |
|
Thermo Fisher |
|
Eaton |
|
Micron Technology |
|
|
CEO Pay Design and Decisions
In establishing the 2021 compensation for the CEO, the Human Capital Committee considered whether the value of the aggregate compensation package was consistent with its objectives for Linde’s executive compensation program, the material components of which are set forth in the company's Remuneration Policy. It evaluated the following factors when determining the compensation level for the CEO:
|
|
• |
market median data of international companies traded on the U.S. stock exchanges |
Linde plc | Appendix 1-2
Appendix 1: Linde plc Directors’ Remuneration Report
|
|
• |
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 |
The Human Capital 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 Human Capital 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.
For 2021, 79% of the CEO’s target total direct compensation opportunity was in the form of performance-based variable compensation and equity grants, motivating him 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 Human Capital Committee and, for equity incentives, also the Company’s share 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.
Direct Compensation for CEO
Salary
The salary level for the CEO was established by the Human Capital Committee after its consideration of multiple factors including positioning to market and advice from Pearl Meyer. Salary adjustments, if any, are typically effective April 1 of each year.
Annual Performance-Based Variable Compensation
The Human Capital Committee established an annual performance-based variable compensation program for the 2021 calendar year that focuses the CEO and 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 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.
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
Linde plc | Appendix 1-3
Appendix 1: Linde plc Directors’ Remuneration Report
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 Human Capital 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 the CEO and 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 and policy, 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 Human Capital 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 Human Capital 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
Linde plc | Appendix 1-4
Appendix 1: Linde plc Directors’ Remuneration Report
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:
|
|
|
GOAL |
ADDITIONAL DETAIL |
|
Values: Safety, Compliance, Sustainability and Inclusion |
|
|
• Zero fatalities with fatality potential event reduction |
• 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 |
|
• No significant process safety or environmental events |
|
• Best in class recordable injury, lost workday case and vehicle accident rates |
• 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 |
|
• Continue to manage COVID-19 risks and protocols |
• Create and maintain a strong ethical culture in every country where Linde operates |
|
• Achieve world class performance in sustainability and continue progress toward greenhouse gas intensity reduction goals |
• 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 |
|
• A strong global compliance program and culture focusing on policies, procedures, training, reporting, accountability and verification via audit |
• Attraction, retention and development of a diverse and engaged workforce through a robust succession planning process |
|
• Strengthen leadership pipeline, including globally diverse talent, through a single succession planning and performance management approach across the enterprise |
• 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 |
• Deliver excellent results in the short-term and over a longer, sustainable period of time |
|
• Operationalize the decarbonization strategy |
• Rigorously assess the quality and future impact of actions taken, as benefits may not be recognized for several years |
|
• Deliver profitable growth by commercializing new applications, new end-use markets and new business models. |
• Monitor the “health” of the organization through pulse surveys |
|
• Ensure robust backlog execution and positioning for mega projects |
• Focus on meeting schedules and cost estimates, starting-up plants reliably and efficiently, and supporting plant availability |
|
• Leverage digitalization to support growth, productivity, and automation with demonstrable bottom line impact. |
• Deliver value through continuous innovation to help Linde’s customers enhance their product quality, service, reliability, productivity, safety, and environmental performance |
|
• Enhance organizational capabilities in productivity tools, processes and practices |
• 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 |
Annual Performance-Based Variable Compensation Opportunity for 2021
The Human Capital Committee established the 2021 variable compensation target for the CEO (expressed as a percent of salary that would be earned for 100% achievement of the performance goals). The target level for the CEO was 180% of base salary.
Linde plc | Appendix 1-5
Appendix 1: Linde plc Directors’ Remuneration Report
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 Human Capital Committee to actual financial results in order to account for these elements. The Human Capital 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 Human Capital Committee and the actual performance achieved. The overall Corporate payout factor for financial performance was 200% of target variable compensation. The payout for the CEO is based on Linde plc Corporate results.
|
Financial Measure |
|
2020
Actual
($ millions) |
|
|
2021
Target
($ millions) |
|
|
2021
Actual
($ millions) |
|
|
Weight |
|
|
Achievement |
|
|
Payout |
|
|
Sales* |
|
|
27,297 |
|
|
|
27,654 |
|
|
|
29,978 |
|
|
25% |
|
|
200% |
|
|
50% |
|
|
Net Income* |
|
|
4,382 |
|
|
|
4,775 |
|
|
|
5,537 |
|
|
50% |
|
|
200% |
|
|
100% |
|
|
Operating Cash Flow |
|
|
7,429 |
|
|
|
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 Human Capital Committee approves. |
Strategic Non-Financial Business Results
Coupled with its assessment of performance related to financial goals, the Human Capital Committee reviewed the strategic actions taken by management that focused on long term sustainable success. After the end of the year, management presented to the Human Capital Committee the degree of achievement in meeting each goal, and for each element, provided its view of the relative degree of importance to long term success.
Based on the results, the Human Capital Committee determined that the Company’s performance with respect to the strategic and non-financial goals was favorable and set the Corporate strategic and non-financial payout factor at 140% of target variable compensation (relative to a 200% maximum). The Human Capital Committee noted the following as examples of actions that support the Company’s strategic objectives in determining 2021 variable compensation payouts:
|
|
• |
Exemplary support for patients through supplies of medical oxygen to hospitals during the global pandemic. Lincare was able to service critical oxygen needs of 165,000 patients at home. |
|
|
• |
Reliably and cost effectively delivered products and services to customers, despite the challenges posed by the pandemic and global supply chain issues. |
|
|
• |
Environmental Sustainability efforts made good progress with reduction in greenhouse gas intensity, which was down -24% by year-end and on track to achieving -35% by 2028. In addition, Linde announced new absolute greenhouse gas emission reduction targets of 35% by 2035 and climate neutrality by 2050 (GHG emission reduction targets relate to Linde’s Scope 1 and 2 emissions). |
Linde plc | Appendix 1-6
Appendix 1: Linde plc Directors’ Remuneration Report
|
|
• |
Dedicated Clean Energy team set up to develop and pursue opportunities for low carbon intensity Hydrogen in mobility, energy and industrial end markets. |
|
|
• |
Significant increase in number of sites participating in Zero Waste program, up to 700 sites from 500 sites in the previous year. Also reduced 300 million gallons of water in operations. |
|
|
• |
250,000 people benefited from nearly 400 global employee community engagement projects. |
|
|
• |
Delivered efficiency improvement of 5.5% through the organization. |
|
|
• |
Launched “Strengthening the Pipeline” program providing employee sponsorship and development for a diverse group of more than 200,000 high performers as part of efforts towards meeting “30 by 30” gender representation goal. |
|
|
• |
Received Public Recognition: |
|
|
• |
Dow Jones Sustainability World Index: only chemical company recognized for 19 consecutive years. |
|
|
• |
Maintained MSCI ESG Rating of “A.” |
|
|
• |
Received “A-“ rating for climate change and “A” rating for water security from the Carbon Disclosure Project. |
|
|
• |
Consistently listed on major Diversity and Inclusion indices: Bloomberg’s Gender Equality Index and Forbes Best Employer for Diversity. |
|
|
• |
Achieved a score of 90 percent on the 2021 Human Rights Campaign’s Corporate Equality Index. |
•Recognized as Top Noteworthy Company by DiversityInc.
Set forth below is the calculation of the CEO’s 2021 variable compensation payout determined in accordance with the criteria described above. The variable compensation paid to the CEO in 2021 accounted for 23% of the CEO’s total compensation with cash compensation accounting for 30% of the CEO’s total compensation for the year.
|
CEO Actual
VC Calculation |
|
2020
Actual VC
Amount |
|
|
2021
Target VC
Amount |
|
|
2021
Corporate VC
Payout Factor |
|
|
2021
Actual VC
Amount |
|
|
|
|
$ |
3,441,874 |
|
|
$ |
2,855,250 |
|
|
185% |
|
|
$ |
5,282,213 |
|
2021 Equity Awards Design
Equity awards are the largest portion of the CEO’s target compensation. This weighting helps ensure a strong alignment of the CEOs’ and shareholders’ long-term interests. Annual grants of equity awards are made to incent and reward sustained performance. Equity awards are granted as a mix of share options, performance share units (PSUs) and restricted share units (RSUs). The mix and type of equity awards granted to the CEO is the same as those granted to all eligible executives of the Company. Fully aligning the leadership team, from mid-management to officers, helps sustain the Company’s pay for performance culture by incenting and rewarding all participants with the same goals and performance results.
Performance Share Units (50% of award target value)
The Human Capital Committee includes PSUs in its award mix as this vehicle focuses executives on the Company’s mid-term performance objectives. A three-year performance period is believed to be an appropriate balance between the one-year performance-based variable compensation goals and the longer-term share option share price growth goals. Additionally, the overlapping three-year performance periods that result from regular annual grants promote retention and encourage management to focus on sustainable growth and shareholder returns. Key features of the PSUs include:
Linde plc | Appendix 1-7
Appendix 1: Linde plc Directors’ Remuneration Report
|
|
• |
Vest if pre-established multi-year performance goals are attained and forfeited if threshold goals are not met. |
|
|
• |
Pay no dividends nor accrue dividend equivalents prior to vesting. |
|
|
• |
Require executives to hold all after-tax shares derived from vested awards until their respective stock ownership requirement is met. |
The Committee determined that using a Return on Capital (ROC) performance goal would be appropriate as it encourages and rewards the executive team for focusing decisions and taking actions that drive long term ROC performance. A relative Total Shareholder Return (TSR) goal was also considered appropriate as this portion of the equity award will further strengthen alignment of management payouts with shareholder returns. In order to align with the Company’s global shareholder base, it was determined that TSR performance would be measured against a blended group of companies that is comprised of those that are listed on the S&P 500, excluding the Financial sector, plus those that are designated as Eurofirst 300 at 1 January 2021.
Share Options (30% of award target value)
The Human Capital Committee believes that share options present an appropriate balance of risk and reward in that the options have no value unless the Company’s share price increases above the option exercise price and that the opportunity to realize value from growth in shareholder value over the ten-year grant term encourages long term decision-making. The Human Capital Committee notes that the Company’s executives place a high value on share options as a compensation vehicle. Key features of the share options include:
|
|
• |
Exercise price is fixed at 100% of the closing market price on date of grant. |
|
|
• |
Vest in equal annual tranches over three years and expire after ten years. |
|
|
• |
No repricing without shareholder approval. |
|
|
• |
Require executives to hold all shares obtained from exercise, net of taxes and exercise price, until their respective share ownership requirement is met |
Restricted Share Units (20% of award target value)
The Human Capital Committee recognizes that RSUs can provide appropriate rewards to executives through alignment with the Company’s share price. The RSUs are the smallest component of the equity award mix, and cliff vest three years after their grant date to aid Named Executive Officer ("NEO") retention. RSUs can also mitigate some of the impact of an economic downturn on the PSU and share option components of the annual awards. Key features of the RSUs include:
|
|
• |
Pay no dividends nor accrue dividend equivalents prior to vesting. |
|
|
• |
Require executives to hold all after-tax shares derived from vested awards until their respective stock ownership requirement is met |
2021 Equity Award Grants
The Human Capital Committee established the target dollar value of 2021 equity awards for the CEO (and each NEO). The Human Capital Committee examined relative responsibility of the executive officers and the CEO’s position to market with consideration of how long he or she had been in the current role. Particular emphasis was placed on the importance of providing the CEO with incentive and appropriate reward for taking high quality actions to support sustainable long-term growth.
Linde plc | Appendix 1-8
Appendix 1: Linde plc Directors’ Remuneration Report
ROC-measured performance share units
The ROC goal for the PSU awards covering fiscal years 2021 - 2023 was determined after the Human Capital Committee examined prior-year ROC results, industry ROC averages, capital expenditure projections and the Company’s weighted average cost of capital. The payout schedule was set with the intent of encouraging and rewarding the executive team for taking actions that result in industry-leading ROC performance. The March 2021 awards are measured against the following ROC goals:
|
2021-2023 |
|
Average
Annual ROC |
|
|
Payout* |
|
|
Below Threshold |
|
<13.5% |
|
|
0% |
|
|
Threshold |
|
13.5% |
|
|
50% |
|
|
Target |
|
15.0% |
|
|
100% |
|
|
Maximum |
|
≥17.0% |
|
|
200% |
|
|
* |
Interpolated for results between threshold and maximum. |
ROC is the Company's after-tax return on capital as reported in its quarterly and annual Consolidated Financial Statements, adjusted to eliminate the after-tax effect of any acquisition occurring during the Performance Period that was not known at the time the goals were set.
Relative TSR-measured performance share units
The March 2021 Relative TSR awards are measured against a blended group of companies that is comprised of those that are listed on the S&P 500, excluding the Financial sector, plus those that are designated as Eurofirst 300 at 1 January 2021, and payouts will be determined based on the following schedule:
|
2021-2023 |
|
TSR Rank |
|
Payout* |
|
|
Below Threshold |
|
<25%ile |
|
0% |
|
|
Threshold |
|
25%ile |
|
25% |
|
|
Target |
|
50%ile |
|
100% |
|
|
Maximum |
|
≥75%ile |
|
200% |
|
|
* |
Interpolated for results between threshold and maximum. |
2019-21 Performance Share Unit Payouts
In March 2022, the grants of the ROC- and relative TSR-measured PSUs that met the pre-established performance criteria at the end of 2021 vested and were settled in Company shares. The Company achieved an industry-leading average annual ROC over the three-year performance period of 14.2%, which exceeded the pre-established goal for maximum performance of 12.5%. The Human Capital Committee certified the vesting at 200% of the target number of ROC PSUs granted. The Company’s relative TSR over the three-year performance period ended in the 82nd percentile of the pre-established peer group comprised of companies that were listed on the S&P 500, excluding the Financial sector, plus companies that were designated as Eurofirst 300 at 1 January, 2019. This exceeded the goal for
Linde plc | Appendix 1-9
Appendix 1: Linde plc Directors’ Remuneration Report
maximum performance of the 75th percentile, and the Human Capital Committee certified the vesting at 200% of the target number of relative TSR PSUs granted.
|
PSU Measure |
|
Threshold
Goal |
|
|
Target
Goal |
|
|
Maximum
Goal |
|
|
2019-21
Actual |
|
|
Payout |
|
|
ROC |
|
|
10.2 |
% |
|
|
11.5 |
% |
|
|
12.5 |
% |
|
|
14.2 |
% |
|
|
200 |
% |
|
Relative TSR |
|
25th %ile |
|
|
50th %ile |
|
|
75th %ile |
|
|
82nd %ile |
|
|
|
200 |
% |
CEO Compensation Table
The table below presents compensation information for the CEO and includes footnotes and other narrative explanations important for understanding of the compensation information in the table. The Summary Compensation Table summarizes key components of the CEO compensation for 2020 and 2021. The tables following the Summary Compensation Table provide more detailed information about the various types of CEO compensation for 2021, some of which are included in the Summary Compensation Table.
|
Name and Principal Position |
|
Year |
|
Salary
($)(1) |
|
|
Share Awards
($)(2) |
|
|
Option Awards
($)(2) |
|
|
Non-equity
Incentive Plan
Compensation
($)(3) |
|
|
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings ($)(4) |
|
|
All Other
Compensation
($)(5) |
|
|
Total
($) |
|
|
Stephen F. Angel, |
|
2021 |
|
|
1,586,250 |
|
|
|
10,764,948 |
|
|
|
5,044,977 |
|
|
|
5,282,213 |
|
|
|
8,450,000 |
|
|
|
297,644 |
|
|
|
31,426,032 |
|
|
Chief Executive Officer |
|
2020 |
|
|
1,545,000 |
|
|
|
7,880,305 |
|
|
|
2,950,344 |
|
|
|
3,441,874 |
|
|
|
2,474,000 |
|
|
|
265,378 |
|
|
|
18,556,901 |
|
|
(1) |
Amounts reported are actual salaries paid for the calendar year and include adjustments to base salary rates if applicable. |
|
(2) |
These amounts were not paid in the respective year but rather are the full grant date fair value of equity awards made for each year as determined under accounting standards related to share-based compensation. The Share Awards amounts are the value for the PSU grants made in 2020 and 2021 to the CEO valued at the target number of shares granted and the values of RSU grants made to the CEO in each year. The Option Awards amounts are the values for options granted in each year. The assumptions used in computing the Options Awards and Share Awards amounts are included in Note 15 to the Company's 2021 financial statements in the 2021 Form 10-K and Annual Report. The amounts shown in the Share Awards and Option Awards columns are subject to vesting conditions that may or may not result in actual payouts in future years. In addition, a share option has value only if the Company's share price increases above the option exercise price (an "in-the-money" option). If the CEO exercises an in-the-money option, he would then realize an actual gain. Any gain realized for options exercised in 2021 and the value realized in connection with RSUs that vested in 2021, are reported in the "2021 Option Exercises and Shares Vested" table. |
|
(3) |
The CEO was paid a performance-based variable compensation payment in 2022 based upon the Company's 2021 performance, and in 2021 based upon the Company's 2020 performance. These amounts are reported as "Non-equity Incentive Plan Compensation". |
|
(4) |
Amounts in this column are the annual increase in actuarial present value of retirement benefits payable under the Company's Pension Program. These amounts were not actually paid to the CEO. The total pension present value accrued for the CEO through 2021 is disclosed in the 2021 Pension Benefits Table. |
|
(5) |
This column includes any perquisites or personal benefits that exceeded $10,000 for the CEO during 2021, valued at incremental costs. The CEO was not reimbursed for any taxes due based on the |
Linde plc | Appendix 1-10
Appendix 1: Linde plc Directors’ Remuneration Report
|
imputed value of Company-provided perquisites or personal benefits not generally available to all employees. Such perquisites or personal benefits were: |
|
Year |
|
Matching
Contribution |
|
|
Personal Use
of Company
Aircraft |
|
|
Financial
Planning |
|
|
Other |
|
|
2021 |
|
|
58,397 |
|
|
|
224,462 |
|
|
|
13,785 |
|
|
|
1,000 |
|
|
2020 |
|
|
57,038 |
|
|
|
193,816 |
|
|
|
13,525 |
|
|
|
1,000 |
|
Matching Contribution includes Company contributions to the Company's U.S. 401(k) Plan and Company contributions to the U.S. Compensation Deferral Program described under the "2021 Nonqualified Deferred Compensation" table below. For reasons of security and time management, the Board requires the CEO to use the Company's corporate aircraft for personal use as well as business travel. The aircraft is available for the Company's use through a time-share arrangement with a fixed time-share charge for the right to use the aircraft and a per-trip charge. The Company calculates the incremental aircraft costs for Mr. Angel's personal use as the full amount of those per-trip charges attributable to his personal use. The fixed time-share charge is not included as an incremental cost, as the Company must pay this amount even if Mr. Angel does not use the aircraft for personal travel.
Other perquisites include U.S Health Savings Account Contributions.
2021 Grants of Plan-Based Awards
Below is information regarding the 2021 Non-Equity Incentive Plan Compensation, Share Awards and the Option Awards reported in the Summary Compensation Table above. The 2021 option grants, performance share unit (PSU) and restricted share unit (RSU) awards reported in the table below were made under the Amended and Restated 2009 Linde Long Term Incentive Plan, which was subsequently closed to new grants upon approval by shareholders of the 2021 Linde plc Long Term Incentive Plan on
Linde plc | Appendix 1-11
Appendix 1: Linde plc Directors’ Remuneration Report
26 July 2021. The awards granted to the CEO were made on substantially the same terms as the 2021 grants that were made to all other eligible employees.
|
|
|
|
|
|
|
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards |
|
|
Estimated Future
Payouts Under
Equity Incentive
Plan Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date
(1) |
|
Human
Capital
Committee
Approval Date
(1) |
|
Thre-shold
($) |
|
|
Target
($) |
|
|
Maxi-mum
($) |
|
|
Thre-shold
(#) |
|
|
Target
(#) |
|
|
Maxi-mum
(#) |
|
|
All other
Share
Awards:
Number
of Shares or Units
(#) |
|
|
All Other
Option
Awards:
Number of
Securities
Under
-lying
Options
(#) |
|
|
Exer-cise or
Base Price of
Option Awards
($/Sh) |
|
|
Grant Date
Fair Value
of Shares and
Option
Awards
($)(6) |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable Cash (2) |
|
|
|
|
|
|
0 |
|
|
|
2,855,250 |
|
|
|
5,710,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Options (3) |
|
3/8/2021 |
|
2/22/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133,465 |
|
|
|
253.68 |
|
|
|
5,044,977 |
|
|
RSUs (4) |
|
3/8/2021 |
|
2/22/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,670 |
|
|
|
|
|
|
|
|
|
|
|
3,054,737 |
|
|
ROC PSUs (5) |
|
3/8/2021 |
|
2/22/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
19,000 |
|
|
|
38,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,580,900 |
|
|
TSR PSUs (5) |
|
3/8/2021 |
|
2/22/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
10,395 |
|
|
|
20,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,129,311 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable Cash (2) |
|
|
|
|
|
|
0 |
|
|
|
2,703,750 |
|
|
|
5,407,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Options (3) |
|
3/9/2020 |
|
2/24/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
169,560 |
|
|
|
173.13 |
|
|
|
2,950,344 |
|
|
RSUs (4) |
|
3/9/2020 |
|
2/24/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,935 |
|
|
|
|
|
|
|
|
|
|
|
2,253,708 |
|
|
ROC PSUs (5) |
|
3/9/2020 |
|
2/24/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
20,900 |
|
|
|
41,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,380,157 |
|
|
TSR PSUs (5) |
|
3/9/2020 |
|
2/24/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
11,300 |
|
|
|
22,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,246,440 |
|
|
(1) |
On February 22, 2021, the Company's Human Capital Committee approved the share options, PSUs and RSUs to be granted to NEOs. It set 8 March 2021 as the actual grant date for all award types. |
|
(2) |
The actual amount of performance-based variable compensation payable in March 2022 for 2021 performance is shown in the "Summary Compensation Table" under "Non-Equity Incentive Plan Compensation". The amounts shown in these columns in the table above are the range of potential 2021 payments that could have been made. |
|
(3) |
These are the number of shares underlying share option grants made in March 2021. |
|
(4) |
This is the number of restricted share units granted in March 2021. |
|
(5) |
These are the threshold, target and maximum number of shares that may be earned under PSU awards made in March 2021. |
|
(6) |
The amounts are the full grant date fair values of the RSU awards, PSU awards, and the share option grants made in 2021, calculated in accordance with accounting standards related to share-based compensation. The values for the PSU awards are based on the target number of shares granted. These amounts are neither paid to any NEO nor equal to the amounts recognized by the Company as compensation expense in 2021. |
Linde plc | Appendix 1-12
Appendix 1: Linde plc Directors’ Remuneration Report
2021 Outstanding Equity Awards at Fiscal Year-End
The table below shows the CEO’s outstanding equity awards at the end of 2021. The material terms of the awards are described under the caption “2021 Equity Award Grants” above and in the footnotes to the table below.
|
|
|
Option Awards |
|
Share Awards |
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable (1) |
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1) |
|
|
Option
Exercise
Price
($)(2) |
|
|
Option Grant
Date |
|
Option
Expiration
Date |
|
Number of
Shares or
Units of
Shares
That Have
Not
Vested
(#)(3) |
|
|
Market
Value
of Shares or
Units of
Shares
That Have
Not Vested
($)(4)(5) |
|
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(6) |
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights
That Have
Not Vested
($)(4) |
|
|
At 31st December 2021 |
|
|
416,355 |
|
|
|
0 |
|
|
|
102.22 |
|
|
2/23/2016 |
|
2/23/2026 |
|
|
42,360 |
|
|
|
14,674,775 |
|
|
|
132,135 |
|
|
|
45,775,528 |
|
|
|
|
|
435,850 |
|
|
|
0 |
|
|
|
118.71 |
|
|
2/28/2017 |
|
2/26/2027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
318,780 |
|
|
|
0 |
|
|
|
154.00 |
|
|
2/27/2018 |
|
2/25/2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
118,403 |
|
|
|
59,202 |
|
|
|
176.63 |
|
|
3/20/2019 |
|
3/20/2029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,520 |
|
|
|
113,040 |
|
|
|
173.13 |
|
|
3/9/2020 |
|
3/8/2030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
133,465 |
|
|
|
253.68 |
|
|
3/8/2021 |
|
3/7/2031 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 31st December 2020 |
|
|
261,075 |
|
|
|
0 |
|
|
|
128.38 |
|
|
2/24/2015 |
|
2/24/2025 |
|
|
67,960 |
|
|
|
17,908,140 |
|
|
|
67,470 |
|
|
|
17,779,020 |
|
|
|
|
|
416,355 |
|
|
|
0 |
|
|
|
102.22 |
|
|
2/23/2016 |
|
2/23/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
435,850 |
|
|
|
0 |
|
|
|
118.71 |
|
|
2/28/2017 |
|
2/26/2027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
212,520 |
|
|
|
106,260 |
|
|
|
154.00 |
|
|
2/27/2018 |
|
2/25/2028 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,201 |
|
|
|
118,404 |
|
|
|
176.63 |
|
|
3/20/2019 |
|
3/20/2029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
169,560 |
|
|
|
173.13 |
|
|
3/9/2020 |
|
3/8/2030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Each share option vests in three consecutive equal annual installments beginning on the first anniversary of the grant date. |
|
(2) |
The exercise price for all share options is the closing price on the NYSE on the date of grant. |
|
(3) |
This column includes the number of shares underlying the RSU awards granted to the CEO in March 2020 and 2021. |
|
(4) |
The market value reported in this column is the number of unvested restricted share units multiplied by the $346.43 December 31, 2021 closing price of the Company's ordinary shares as reported on the NYSE. |
|
(5) |
Where applicable under U.S. tax law, the Company collects from NEOs and pays Federal Insurance Contributions Act (FICA) taxes on awards. |
|
(6) |
This column includes actual number of shares paid in settlement of PSUs granted in May 2019, plus the target number of PSUs granted in March 2020 and March 2021. |
Linde plc | Appendix 1-13
Appendix 1: Linde plc Directors’ Remuneration Report
2021 Option Exercises and Shares Vested
This table provides information about any share options that were exercised by the CEO and restricted share units that vested during 2021.
|
|
|
Option Awards |
|
|
Share Awards |
|
|
|
Number of
Shares
Acquired
on Exercise
(#) |
|
|
Value Realized
on Exercise
($)(1) |
|
|
Number of
Shares
Acquired
on Vesting
(#)(2) |
|
Value Realized
on Vesting
($)(2) |
|
2021 |
|
|
261,075 |
|
|
|
51,679,796 |
|
|
38,270 (3) |
|
9,348,213 (3) |
|
2020 |
|
|
390,945 |
|
|
|
52,942,148 |
|
|
80,212 (3) |
|
15,321,294 (3) |
|
(1) |
The option exercise value realized for 2021 equals the (i) NYSE market price of the Company's ordinary shares at the time of the option exercise minus the option exercise price, multiplied by (ii) the option shares exercised. All amounts reported are before taxes. |
|
(2) |
The values represent shares acquired pursuant to the vesting and payout in February 2021 of the Company RSU awards that replaced the Praxair 2018 RSU awards outstanding at the time of the business combination. |
In all cases, the value of the shares is before taxes and equals the number of shares paid out multiplied by the NYSE closing price of the Company's ordinary shares on the applicable vesting dates.
|
(3) |
The amounts reported for Mr. Angel were not paid to him in 2021 because he previously made a voluntary election to defer payment of shares in settlement of his vested RSU award until a future date. See the "2021 Nonqualified Deferred Compensation" table for more information. |
2021 Pension Benefits
The table below shows certain retirement benefit information of the CEO under the Company’s Pension Programs and agreements.
|
|
|
Plan Name(1) |
|
Number of
Years of
Credited
Service
(#) |
|
|
Present
Value of
Accumulated
Benefit
($)(2) |
|
|
Payments
During Last
Fiscal Year
($) |
|
|
2021 (3) |
|
Linde U.S. Pension Plan |
|
|
21 |
|
|
|
1,185,000 |
|
|
|
0 |
|
|
|
|
Supplemental Retirement Income Plan |
|
|
42 |
|
|
|
16,638,000 |
|
|
|
0 |
|
|
2020 (3) |
|
Linde U.S. Pension Plan |
|
|
20 |
|
|
|
1,181,000 |
|
|
|
0 |
|
|
|
|
Supplemental Retirement Income Plan |
|
|
41 |
|
|
|
8,192,000 |
|
|
|
0 |
|
|
(1) |
Mr. Angel participates in the Linde U.S. Pension Program's Traditional Design component. |
|
(2) |
See the narrative after the table for a description of the Present Value of Accumulated Benefit. The values for each plan listed above are additive. |
|
(3) |
The Linde U.S. Pension Plan credited years of service for Mr. Angel represent his actual years of service with the Company. |
The Supplemental Retirement Income Plan credited years of service adds the recognition of Mr. Angel's 21.64 years of prior General Electric service. In connection with Mr. Angel's recruitment to the Company
Linde plc | Appendix 1-14
Appendix 1: Linde plc Directors’ Remuneration Report
in 2001 and in order to provide him with a retention incentive, the Company agreed to provide Mr. Angel with credit under the Linde Inc. Supplemental Retirement Income Plans (collectively referred to as the "SRIP") to recognize his years of service with his prior employer, General Electric. The receipt of this additional credited service was subject to time-based vesting requirements which were satisfied in 2016. The Company has recognized as an accrued pension liability, the additional years of service credit that Mr. Angel received under the SRIP over the course of his anticipated years of service, and no future accruals are expected as the liability has been fully accrued and the years of service credit fully vested.
Mr. Angel retired from employment with the Company in March 2022 and assumed the role of Chairman of the Board. Following his retirement, Mr. Angel will receive retirement benefits under the Pension Program based on his Company service plus the additional years of recognized General Electric service, less offsets for the benefits paid pursuant to the SRIP in connection with the 2018 Business Combination of Linde AG and Praxair, Inc. and the benefits he receives under the General Electric retirement plans. The values shown above include the effect of these offsets.
Additional information regarding his separation from employment is included in the section below entitled “Subsequent Development.”
Present Value of Accumulated Benefit
The 2021 Pension Benefits table includes a “Present Value of Accumulated Benefit.” This is the value in today’s dollars of the total expected future retirement benefits that the CEO may receive under the Pension Program, and these are accrued amounts as of the end of 2021. For any given year, there will be a change in the accumulated benefit. For example, from one year to the next, the accumulated benefit may increase because the CEO has worked for an additional year and received credit for that or his pensionable earnings have increased. The accumulated benefit may also increase or decrease based on the interest rate used to calculate the present value of the CEO’s retirement payments compared to the prior year. The annual change in accumulated benefit is disclosed in the “CEO Compensation Table” in the “Change in Pension Value” column.
The company recognizes these amounts as a future pension liability on its financial statements. The company calculates these amounts using complex actuarial valuations and assumptions. These assumptions are described in Note 17 to the Company’s 2021 financial statements in the 2021 Form 10-K and Annual Report. However, as required by SEC rules, the 2021 Pension Benefits table assumes that the CEO will retire at the earliest retirement age that would provide full (unreduced) benefits. The value in today’s dollars of the total retirement benefits that the CEO eventually receives may be more or less than the amount shown in the 2021 Pension Benefits table.
2021 Nonqualified Deferred Compensation
This table shows information regarding compensation amounts that (i) the CEO decided not to receive in cash but elected to defer to a later date under the U.S. Linde Compensation Deferral Program, (ii) are company contributions to the Compensation Deferral Program; or (iii) are shares payable in settlement of
Linde plc | Appendix 1-15
Appendix 1: Linde plc Directors’ Remuneration Report
a vested PSU or RSU award that the CEO elected to defer to a later date pursuant to the terms of the applicable Linde Long Term Incentive Plan and award agreements.
|
|
|
Executive
Contributions
in Last Fiscal
Year ($)(1) |
|
|
Company
Contributions
in Last Fiscal
Year ($)(2) |
|
|
Aggregate
Earnings
in Last
Fiscal
Year ($) |
|
|
Aggregate
Withdrawals/
Distributions ($) |
|
|
Aggregate
Balance at
Last Fiscal
Year
End ($)(3) |
|
|
2021 |
|
|
14,630,426 |
|
|
|
48,609 |
|
|
|
28,049,122 |
|
|
|
0 |
|
|
|
117,897,212 |
|
|
2020 |
|
|
19,047,716 |
|
|
|
47,250 |
|
|
|
16,686,605 |
|
|
|
0 |
|
|
|
71,679,932 |
|
|
(1) |
These amounts are voluntary deferrals elected by Mr. Angel under Linde's U.S. Compensation Deferral Program of his variable compensation for the 2021 plan year paid in March 2022 under the Company's Variable Compensation Plan. These amounts are included in the "Non-equity Incentive Plan Compensation" in the "CEO Compensation Table" above. The amount shown also includes the value of the Company shares that would have been paid to Mr. Angel in settlement of the RSU award that vested in February 2021 in the absence of his prior election to defer the payment of these shares until a later date. |
|
(2) |
These amounts are the Company contributions for the CEO made in 2022 for 2021. These amounts are included in "All Other Compensation" in the "CEO Compensation Table". |
|
(3) |
Balances are net of prior payouts and otherwise are the total of (i) all compensation that the CEO previously elected to defer (ii) Company contributions made to the U.S. Compensation Deferral Program on behalf of the CEO, and (iii) any notional investment earnings on these amounts. The balances are not amounts paid in 2021. |
Subsequent Development
Mr. Angel retired from employment with the Company in March 2022 and assumed the role of Chairman of the Board. Mr. Angel did not receive any severance benefits in connection with his retirement and the treatment of his retirement benefits, equity awards and other post-retirement benefits from the Company will be consistent with the terms of the applicable programs and service crediting agreement as described herein.
Mr. Angel remains subject to an agreement under which he is obligated not to (a) disclose Company confidential information, (b) solicit the Company’s customers and employees for a period of two years following his retirement, and (c) engage in any activities that compete with those of the Company for a period of two years following his retirement.
Remuneration of Non-Executive Directors
The compensation paid to our non-executive directors for the fiscal years ended 31 December 2021 and 2020 is reported in the tables below. The compensation paid to non-executive directors includes an element of equity-based compensation, designed to provide greater alignment of interests between non-executive directors and the Company's shareholders. This equity-based compensation is not subject to the achievement of performance metrics given the nature of the role performed by the non-executive directors, but is subject to a one-year time vesting requirement from the date of grant. Stephen F. Angel is the only executive director currently on the Board. While serving as executive director, Mr Angel receives
Linde plc | Appendix 1-16
Appendix 1: Linde plc Directors’ Remuneration Report
no additional compensation for his service as director and accordingly is not included in the following tables or discussion. All other members of the Board are non-executive directors.
|
Name |
|
2021 Fees
Earned or
Paid in Cash
($) |
|
|
2021 Share
Awards ($)(1) |
|
|
2021 Other
Compensation
($)(2) |
|
|
2021 Total
($) |
|
|
Prof. Dr. Wolfgang H. Reitzle |
|
|
450,000 |
|
|
|
325,392 |
|
|
|
5,000 |
|
|
|
780,392 |
|
|
Prof. DDr. Ann-Kristin Achleitner |
|
|
180,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
315,106 |
|
|
Prof. Dr. Clemens A. H. Börsig |
|
|
280,000 |
|
|
|
130,106 |
|
|
|
20,000 |
|
|
|
430,106 |
|
|
Dr. Nance K. Dicciani |
|
|
180,000 |
|
|
|
130,106 |
|
|
|
15,000 |
|
|
|
325,106 |
|
|
Dr. Thomas Enders |
|
|
180,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
315,106 |
|
|
Franz Fehrenbach |
|
|
180,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
315,106 |
|
|
Edward G. Galante |
|
|
230,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
365,106 |
|
|
Joe Kaeser |
|
|
30,165 |
|
|
|
0 |
|
|
|
5,000 |
|
|
|
35,165 |
|
|
Larry D. McVay |
|
|
180,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
315,106 |
|
|
Dr. Victoria E. Ossadnik |
|
|
180,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
315,106 |
|
|
Prof. Dr. Martin H. Richenhagen |
|
|
180,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
315,106 |
|
|
Alberto Weisser |
|
|
30,165 |
|
|
|
0 |
|
|
|
5,000 |
|
|
|
35,165 |
|
|
Robert L. Wood |
|
|
230,000 |
|
|
|
130,106 |
|
|
|
5,000 |
|
|
|
365,106 |
|
|
TOTAL: |
|
|
2,510,330 |
|
|
|
1,626,452 |
|
|
|
90,000 |
|
|
|
4,231,782 |
|
|
(1) |
Full grant date fair value of restricted share units granted to each director on 22 February 2021 as determined under U.S GAAP accounting standards related to share-based compensation. |
|
(2) |
Amounts in this column do not represent cash or share compensation paid to the directors. 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 matches personal donations to eligible charitable institutions up to a $15,000 maximum per year per donor, and (b) $5,000 for each director, except Ms. Dicciani, for fees paid by the Company for the preparation and filing of director's personal tax returns in the United Kingdom with respect to the taxation of directors' compensation in the United Kingdom. |
|
Name |
|
2020 Fees
Earned or
Paid in Cash
($) |
|
|
2020 Share
Awards ($)(1) |
|
|
2020 Other
Compensation
($)(2) |
|
|
2020 Total
($) |
|
|
Prof. Dr. Wolfgang H. Reitzle |
|
|
450,000 |
|
|
|
321,510 |
|
|
|
5,000 |
|
|
|
776,510 |
|
|
Prof. DDr. Ann-Kristin Achleitner |
|
|
180,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
313,646 |
|
|
Prof. Dr. Clemens A. H. Börsig |
|
|
280,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
413,646 |
|
|
Dr. Nance K. Dicciani |
|
|
180,000 |
|
|
|
128,646 |
|
|
|
15,000 |
|
|
|
323,646 |
|
|
Dr. Thomas Enders |
|
|
180,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
313,646 |
|
|
Franz Fehrenbach |
|
|
180,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
313,646 |
|
|
Edward G. Galante |
|
|
230,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
363,646 |
|
|
Larry D. McVay |
|
|
180,000 |
|
|
|
128,646 |
|
|
|
6,000 |
|
|
|
314,646 |
|
|
Dr. Victoria E. Ossadnik |
|
|
180,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
313,646 |
|
|
Prof. Dr. Martin H. Richenhagen |
|
|
180,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
313,646 |
|
|
Robert L. Wood |
|
|
230,000 |
|
|
|
128,646 |
|
|
|
5,000 |
|
|
|
363,646 |
|
|
TOTAL: |
|
|
2,450,000 |
|
|
|
1,607,970 |
|
|
|
66,000 |
|
|
|
4,123,970 |
|
Linde plc | Appendix 1-17
Appendix 1: Linde plc Directors’ Remuneration Report
|
(1) |
Full grant date fair value of restricted share units granted to each director on 24 February 2020 as determined under U.S GAAP accounting standards related to share-based compensation. |
|
(2) |
Amounts in this column do not represent cash or share compensation paid to the directors. These amounts are the value of the following benefits provided to the directors by the Company: (a) $15,000 for Ms. Dicciani and $1,000 for Mr. McVay as 2020 matching contributions for their eligible personal charitable contributions pursuant to the Company's charitable matching gift program that matches personal donations to eligible charitable institutions up to a $15,000 maximum per year per donor, and (b) $5,000 for each director except Ms. Dicciani 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. |
Director Expenses
Directors are entitled to reimbursement for travel and other expenses incurred on behalf of the company in accordance with the Linde plc Directors Travel and Expenses Policy or pursuant to other Board-approved policies.
Time-vested restricted shares
The following table sets forth information regarding the number and amount of restricted share awards outstanding at the beginning and end of the fiscal year ended 31 December 2021 for each director serving on the Board during 2021:
|
Name |
|
Date of
Grant |
|
|
End of
Period
Over Which
Qualifying
Conditions
Must
be Fulfilled
for Each
Award |
|
|
Restricted Units
Outstanding at Beginning of FY 2021
(#)(1) |
|
|
Restricted
Units
Granted
During FY
2021
(#)(2) |
|
|
Restricted
Units
Vested
During FY 2021
(#) |
|
|
Market
Price
Per Share on Date
of Grant
(3) |
|
|
Market
Price Per
Share
on Vesting of Award
(4) |
|
|
Income
realized
Upon
Vesting (5) |
|
|
Restricted
Units
Outstanding
at End of
FY 2021
(#)(1) |
|
|
Prof. Dr. Wolfgang H. Reitzle |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
1,556 |
|
|
|
1,278 |
|
|
|
1,562 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
396,173.16 |
|
|
|
1,296 |
|
|
Prof. DDr. Ann-Kristin Achleitner |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
622 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
518 |
|
|
Prof. Dr. Clemens A. H. Börsig |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
622 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
518 |
|
|
Dr. Nance K. Dicciani |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
6,841 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
6,739 |
|
|
Dr. Thomas Enders |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
622 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
518 |
|
|
Franz Fehrenbach |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
622 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
518 |
|
|
Edward G. Galante |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
8,803 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
8,700 |
|
|
Joe Kaeser |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
|
— |
|
|
Larry D. McVay |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
5,492 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
5,388 |
|
|
Dr. Victoria E. Ossadnik |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
622 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
518 |
|
|
Prof. Dr. Martin H. Richenhagen |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
622 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
518 |
|
|
Alberto Weisser |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
$ |
0.00 |
|
|
|
— |
|
|
Robert L. Wood |
|
2/24/2020 |
|
|
2/24/2021 |
|
|
|
2,887 |
|
|
|
511 |
|
|
|
625 |
|
|
$ |
210.55 |
|
|
$ |
254.61 |
|
|
$ |
158,367.42 |
|
|
|
2,783 |
|
|
(1) |
Includes all other RSU awards granted to directors Dicciani, Galante, McVay and Wood during their service as directors of Praxair, Inc. prior to the business combination, that have fully vested but whose payment in Linde plc ordinary shares has been deferred by the director until termination of service as a director or a specific future date. |
|
(2) |
Restricted share units were granted on 24 February 2020 and vesting one year later. |
|
(3) |
Closing price per share of Linde plc ordinary shares on the 24 February 2020 grant date with respect to the 2020 RSU grant. |
|
(4) |
Closing price per share of Linde plc ordinary shares on the 24 February 2021 vesting date with respect to the 2020 RSU grant. |
Linde plc | Appendix 1-18
Appendix 1: Linde plc Directors’ Remuneration Report
|
(5) |
Income realized equals the number of RSUs vested and paid out multiplied by the closing price per share of Linde ordinary shares on the February 24 2021 vesting date. |
|
(6) |
Mssrs. Kaeser and Weisser did not receive any RSU grants as they were elected to the Board on November 1, 2021. |
Statement of change in pay of employees
The table below summarizes the percentage change in average remuneration of our employees (on a full time equivalent basis and excluding our directors) from fiscal year 2020 to 2021.
|
|
|
2021 Average
Total
Remuneration ($) |
|
|
2020 Average
Total
Remuneration ($) |
|
|
Percentage
Change in
2021
Compared
with 2020 |
|
|
Employees Other than Executive Directors |
|
|
50,042 |
|
|
|
48,701 |
|
|
|
2.8 |
% |
Linde plc | Appendix 1-19
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
|
|
|
Arthur Cox LLP |
|
|
Ten Earlsfort Terrace |
|
|
Dublin 2 |
|
|
|
D02 T380 |
|
|
|
|
|
|
|
|
|
|
|
+353 1 920 1000 |
|
|
|
dublin@arthurcox.com |
|
|
|
dx: 27 dublin |
|
|
|
|
|
|
|
Dublin |
|
|
|
Belfast |
|
|
|
London |
|
|
|
New York |
|
Our Reference: 3174/1326/LI186/005/ |
|
San Francisco |
|
|
|
|
|
|
|
arthurcox.com |
February 25, 2022
Board of Directors
Linde plc
The Priestley Centre
10 Priestley Road
Surrey Research Park
Guildford
Surrey
GU2 7XY
United Kingdom
Re:Linde plc
LI186/005/AC#41941871.4
Dear Ladies and Gentlemen,
We act as Irish legal counsel to Linde plc (the “Company”).
We refer to the shareholder proposal dated December 7, 2021 submitted by Mr. John Chevedden for inclusion in the Company’s 2022 annual general meeting proxy statement, a copy of which is attached as Schedule 1 to this letter (the “Proposal”). In particular, that Proposal seeks to request that the Board of Directors of the Company (the “Board”) take each step necessary to replace any voting threshold prescribed by the Company’s constitution that requires more than a simple majority vote with a simple majority vote.
Linde plc | Appendix 2-1
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
As the Company is incorporated as a public limited company (“PLC”) in Ireland, it is governed by the Companies Act 2014 (the principal legislation governing companies and company law in Ireland) (the “Act”).
The Act reserves certain actions for a shareholder vote and prescribes two different voting thresholds, depending on the action. The first threshold is an “ordinary resolution”, meaning a resolution passed by a simple majority of the votes cast by members of a company as, being entitled to do so, vote in person or by proxy at a general meeting of the company. The second is a super majority threshold called a “special resolution”, being a resolution that is referred to as such in the Act, or is required (whether by the Act or by a company’s constitution or otherwise) to be passed as a special resolution and for which certain notice periods are complied with. To pass, a special resolution requires a vote in favour of not less than 75 per cent of the votes cast by such members of the company concerned as, being entitled to do so, vote in person or by proxy at a general meeting of the company. Matters approved by ordinary resolution equate to the simple majority voting threshold requested in the Proposal - matters approved by special resolution do not.
We have identified nine actions requiring a special resolution approval (75% of the votes cast) and one action requiring a bespoke approval of two thirds of the paid up ordinary share capital (excluding the interested party) by virtue of the Company’s constitution and have set out in Schedule 2 an analysis of whether such action can be approved by ordinary resolution, and if so, whether to do so would in our view be in favour of the interests of the Company’s shareholders.
In summary, we recommend that the Company should not (and in certain cases cannot) change the current approval thresholds of the ten actions, of which:
five actions (articles 2.22, 55.2, 109.2, 176.3 and 254) replicate mandatory provisions of Irish law which require a special resolution vote to approve. No amendment can be made to the voting threshold for those actions;
four actions (articles 15, 38, 55.1 and 56.3) replicate the default provisions of Irish law which require a special resolution vote to approve. To reduce the voting requirement for any of these to an ordinary resolution (a majority of the votes cast) would itself require an amendment to the Company’s constitution which amendment would require a special resolution (75% of the votes cast). However, we believe it is in the best interests of shareholders to maintain the special resolution (75% of the votes cast) threshold for each of these four actions as they are protective of shareholder interests for the reasons noted in our analysis set out in Schedule 2; and
one action (article 255) relates to a takeover protection which requires the approval of two thirds of the paid up ordinary share capital (excluding the interested party) and may assist the Board in defending an unsolicited takeover approach that the Board believes is opportunistic and undervalues the Company or where it does not believe such approach represents the best interests of the Company and its shareholders. The provision should not prevent an unsolicited offer being made to shareholders however and the Board may itself waive this provision in connection with any offer. Therefore, we believe it is in the best interests of shareholders to maintain the two thirds of paid up ordinary share capital (excluding the interested party) threshold for this action.
This letter is addressed to and for sole benefit of the Board of Directors of Linde plc. It may not be relied upon by any other person or entity without our prior written consent. This letter is governed by and interpreted in accordance with the laws of Ireland and is based only on the laws of Ireland and the articles of association of the Company as at the date of this letter.
Yours faithfully
ARTHUR COX LLP
Linde plc | Appendix 2-2
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
SCHEDULE 1
Shareholder Proposal
JOHN CHEVEDDEN
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2215 Nelson Avenue, No. 205 |
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olmsted7p@earthlink.net |
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Redondo Beach, CA 90278 |
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310-371-7872 |
Mr. Tony Pepper
Corporate Secretary
Mr. Stephen F. Angel
CEO & Director
Linde plc (LIN)
10 Riverview Dr.
Danbury, Connecticut 06810
Dear Mr. Pepper,
This Rule 14a-8 proposal is respectfully submitted in support of the long- term performance of our company.
This Rule 14a-8 proposal is intended as a low-cost method to improve company performance – especially compared to the substantial capitalization of our company.
This proposal is for the next annual shareholder meeting.
I intend to continue to hold through the date of the Company’s 2022 Annual Meeting of Stockholders the requisite amount of Company share used to satisfy the applicable ownership requirement.
This submitted format, with the shareholder-supplied emphasis, is intended to be used for definitive proxy publication.
Please assign the proper sequential propsal number in each appropriate place.
I expect to forward a broker letter soon so if you acknowledge this proposal in an email message it may very well save you from requesting a broker letter from me.
Sincerely,
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Date |
Linde plc | Appendix 2-3
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
Proposal 6 — Simple Majority Vote
RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) That calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against such proposals, or a simple majority in compliance with applicable laws.
If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. This includes any existing supermajority vote requirement that result from default to state law and can be subject to replacement.
Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are used to block proposals supported by most shareholders but opposed by a status quo management.
It makes no sense to have an 80% supermajority vote requirement from all shares outstanding when only 80% of shares typically cast ballots at the annual meeting.
This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. The proponents of these proposals included Ray T. Chevedden and William Steiner. The votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice.
Church & Dwight shareholders gave 99% support to a 2020 Proposal on this same topic. This proposal topic also won 99%-support at the 2021 ConocoPhillips annual meeting.
Please vote yes:
Simple Majority Vote — Proposal 6
Linde plc | Appendix 2-4
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
Notes:
“Proposal 4” stands in for the final proposal number that management will assign.
This proposal is believed to conform with staff Legal Bulletin No. 14B (CF), September 15, 2004 including (emphasis added):
Accordingly, going forward, we believe that it would not be appropriate for companies to exclude supporting statement language and/or an entire proposal in reliance on rule 14a-8(I)(3) in the following circumstances:
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the company objects to factual assertions because they are not supported; |
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the company objects to factual assertions that, while not materially false or misleading, may be disputed or countered; |
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the company objects to factual assertions because those assertions may be interpreted by shareholders in a manner that is unfavorable to the company, its directors, or its officers; and/or |
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the company objects to statements because they represent the opinion of the shareholder proponent or a referenced source, but the statements are not identified specifically as such. |
We believe that it is appropriate under rule 14a-8 for companies to address these objections in their statements of opposition.
See also: Sun Microsystems, Inc. (July 21, 2005).
The stock supporting this proposal will be held until after the annual meeting and the proposal will be presented at the annual meeting. Please acknowledge this proposal promptly by email [olmsted7p (at) earthlink.net].
The color version of the below graphic is to be published immediately after the bold title line of the proposal.
Will consider withdrawal of the graphic if management commits to a fair presentation of the proposal which includes:
No management graphic in connection with the rule 14a-8 proposals in the proxy or ballot.
No proxy or ballot text suggesting that the proposal will be moot due to lack of presentation.
No ballot electioneering text repeating the negative management recommendation.
Management will give me the opportunity to correct any typographical errors.
Management will give me advance notice if it does a special solicitation that mentions this proposal.
Linde plc | Appendix 2-5
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
SChedule 2
Analysis of articles of association of linde plc
The below table identifies those articles in the articles of association of Linde which require action by a super majority vote (a vote greater than a simple majority of the votes casts at a shareholder meeting).
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Article No. |
Article Content |
Article Wording |
Analysis and Recommendation |
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2.22
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Amending Articles of Association |
“Any such extracts which are appended to these Articles shall be deemed to form part of these Articles and as such may only be amended by a special resolution”.
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Article 2.22 replicates a mandatory provision of Irish company law (section 1015 of the Act states that a public limited company may, by special resolution, alter or add to its articles).
Recommendation: no change as this is a requirement of Irish law and cannot be changed.
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15 |
Variation of Class Rights attaching to Class of Shares |
“Without prejudice to the authority conferred on the Directors pursuant to Article 6 to issue Preferred Shares in the Capital of the Company, where the shares in the Company are divided into different classes, the rights attached to a class of shares may only be varied or abrogated if (A) the holders of the 75% nominal value of the issued shares of that class consent in writing to the variation, or (b) a special resolution, passed at a separate general meeting of the holders of that class, sanctions the variation”. |
Article 15 provides that where the shares of the company are divided into different classes, the rights attaching to a class of shares may only be varied or abrogated if a special resolution is passed at a separate general meeting of the holders of that class which sanctions the variation.
This article replicates a provision of Irish company law which sets out the default rule applicable to Irish companies (section 1044 of the Act). A company could set a lower threshold in its articles to vary class rights.
Linde has separate classes of shares, but only one such class is in issue.
In essence, the provisions of Article 15 are protective of shareholder rights as a variation or abrogation is generally classified as a matter that is adverse to a particular class.
It also aligns with the requirement to approve any amendments to the Company’s constitution by special resolution, where most shareholder rights are contained.
The lowering therefore of the consent requirement from the current 75% to a simple majority of those voting is demonstrably not in the best interests of shareholders as it would permit a lower threshold than that recommended by statute to adversely amend or vary the rights attaching to ordinary shares.
Recommendation: no change as this article is protective of shareholder interests. |
Linde plc | Appendix 2-6
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
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Article No. |
Article Content |
Article Wording |
Analysis and Recommendation |
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38 |
Limitations on calling up Share capital |
“The Company may: by special resolution determine that any portion of its share capital which has not been already called up shall not be capable of being called up except in the event and for the purposes of the Company being wound up; upon the Company doing so, that portion of its share capital shall not be capable of being called up except in that event and for that purpose”. |
Article 38 provides that where shares have been issued, other than as fully paid, the company may by special resolution (75%) waive the requirement to pay the uncalled amount save in the case of a winding up.
This article replicates a provision of Irish company law which sets out the default rule applicable to Irish companies in respect of calling up any unpaid capital on its shares. Pursuant to the Act, a company could, in its articles set a lower threshold (section 77 of the Act).
As Linde is a publicly traded company, it would be highly unusual for it to issue shares other than as fully paid and we would expect that it is a requirement of the exchanges it is listed on to only admit shares to trading that are fully paid.
By reducing the threshold from a special resolution to an ordinary resolution to approve a potential forgiveness on any unpaid capital, it would not appear to be in the best interests of the company or shareholders as it would make it easier to allow a particular shareholder or shareholders to contribute less to the equity of the company than others while still retaining the full benefits of equity. Even if such a proposal was passed, it would be open to dissenting shareholders to challenge this on the grounds that the action is oppressive to their interests by employing a statutory provision to seek Court relief.
Recommendation: no change as this article is protective of shareholder interests.
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55.1 |
Converting Shares into Redeemable Shares |
“The Company may: by special resolution, and subject to the provisions of the Act governing the variation of rights attached to classes of shares and the amendments of these Articles, convert any of its shares into redeemable shares”. |
Article 55 allows the company, acting by special resolution, to convert its shares into redeemable shares. Shares may only be redeemed if they are redeemable shares.
Article 55.1 replicates a provision of Irish company law (section 83 of the Act) which sets out the default rule applicable to Irish companies, but a company could, in its articles set a lower threshold, subject always to the provisions regarding the variation of class rights.
Article 9 provides that any share which the Company has agreed to acquire (e.g. through a buyback programme) is automatically deemed to be a redeemable share and no |
Linde plc | Appendix 2-7
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
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Article No. |
Article Content |
Article Wording |
Analysis and Recommendation |
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resolution is required for that purpose. Accordingly, any “buy back” automatically makes a share redeemable. Article 9 further provides that no resolution of the shareholders shall be required to deem any share in the company a redeemable share.
Recommendation: no change required as any redemption would ultimately need to be effected by Linde and such conversion is pre-built into the articles of association such that no such resolution should ever be required.
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55.2 |
Amending Memorandum/Articles of Association |
“The Company may: by special resolution, and subject to the provisions of the Act (or as otherwise required of permitted by applicable law) alter or add to the Memorandum with respect to any objects, powers or other matters specified therein or alter or add to these Articles”.
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Article 55.2 replicates a mandatory provision of Irish company law (section 1013 of the Act states that a public limited company, may by special resolution, alter the provisions of its memorandum of association and section 1015 of the Act states that a public limited company may, by special resolution, alter or add to its articles)
Recommendation: no change as this is a requirement of Irish law and cannot be changed.
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56.3 |
Reserve arising from reduction of Company Capital |
“Unless a special resolution provides otherwise, a reserve arising from the reduction of the company capital is to be treated for all purposes as a realised profit in accordance with section 117(9) of the Act”. |
Article 56.3 provides that where Linde reduces its share capital, the reserve created will be treated as a realised profit unless the special resolution of Linde approving the reduction provides otherwise.
Article 56.3 replicates a provision of Irish company law which sets out the default accounting rule (section 117 of the Act) applicable to Irish companies on the reduction of a company’s capital.
The Articles could be amended to provide for an alternative accounting treatment on a reduction of capital.
In the case of Linde, by virtue of the Constitution, any alternative accounting treatment on a reduction of capital to that set out in the Act would require a special resolution. Notably, a reduction of capital itself requires a special resolution and court sanction, which typically deals with the accounting treatment expressly as part of the court approval, meaning the implementation of any such transaction will in any event be controlled by special resolution. |
Linde plc | Appendix 2-8
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
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Article No. |
Article Content |
Article Wording |
Analysis and Recommendation |
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Recommendation: no change as this article is protective of shareholder interests and any change will have no impact on the ultimate approval required.
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109.2 |
Reducing notice period for EGM |
“Any other extraordinary general meeting shall also be called by at least twenty-one days’ notice, except that it may be called by fourteen days’ notice where: a special resolution reducing the period of notice to fourteen days has been passed at the immediately preceding annual general meeting, or at a general meeting held since that meeting”.
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Article 109.2 replicates a mandatory provision of Irish company law (section 1102 of the Act).
Recommendation: no change as this is a requirement of Irish law and cannot be changed.
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176.3 |
General Power of Management and Delegation |
“The business of the Company shall be managed by its Directors who may pay all expenses incurred in promoting and registering the Company and may exercise all such powers of the Company as are not, by the Act of by the Memorandum of these Articles, required to be exercised by the Company in a general meeting, but subject to: such directions, not being inconsistent with the foregoing regulations or provisions, as the Company in a general meeting may (by special resolution) give”. |
Article 176.3 replicates the statutory default under Irish company law (section 158 of the Act). The statutory default was introduced in the Act as a special resolution to reflect the outcome of Irish case law, which concluded that the equivalent provision of Irish company law in the preceding legislation (which did not specify whether a special resolution was required) could only be implemented by special resolution (consistent with the approval necessary to amend the constitution) unless such power is reserved to shareholders in the constitution. As the Company’s constitution reserves all management and implementation of its objects to the Board, any such shareholder direction is required to be via special resolution to be effective and as such this approval threshold is mandatory in order to be effective in complying with Irish company law.
Recommendation: no change as this is a requirement of Irish law and cannot be changed.
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254 |
Liquidator powers |
“If the Company is wound up, the liquidator, with the sanction of a special resolution and any other sanction required by the Act, may divide amongst the members in specie or kind the whole or any part of the assets of the Company…” |
Article 254 replicates a mandatory provision of Irish company law (Chapter 1 of Part 11 of the Act).
Recommendation: no change as this is a requirement of Irish law and cannot be changed.
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Linde plc | Appendix 2-9
Appendix 2: Irish Legal Advice of Arthur Cox, LLP Regarding Shareholder Proposal
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Article No. |
Article Content |
Article Wording |
Analysis and Recommendation |
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255
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Business Transactions with “Interested Persons” |
“In addition to any affirmative vote required by law or these Articles, and except as otherwise expressly provided in Article 256, a Business Transaction (as defined in Article 257.3) with, or proposed by or on behalf of, any Interested Person (as defined in Article 257.6) or any Affiliate (as defined in Article 257.1) of any Interested Person or any person who thereafter would be an Affiliate of such Interested Person shall require approval by the affirmative vote of members of the Company holding not less than two-thirds (2/3) of the paid up ordinary share capital of the Company, excluding the voting rights attached to any shares beneficially owned by such Interested Person. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any Exchange or otherwise”. |
Article 255 provides the Board with negotiating leverage in connection with certain potentially adverse, hostile or opportunistic offers to acquire the Company. This provision is not referable to any Irish company or takeover law. Article 256 gives the Board the power to dis-apply this provision, if it judges the action to be in the best interests of the Company.
Recommendation: no change as this Board discretion may assist the Board in defending an unsolicited or hostile takeover that it believes is opportunistic and undervalues the Company or does not believe represents the best interests of the company and its shareholders. The provision should not prevent a tender offer being made to shareholders and in any event, the Board may waive this requirement with respect to any given offer.
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Linde plc | Appendix 2-10
Linde plc Forge, 43 Church Street West, Woking, Surrey, GU21 6HT, United Kingdom 10 Riverview Drive, Danbury, Connecticut 06810, USA www.linde.com
Graphic PROXY/VOTING INSTRUCTION CARD This proxy is solicited on behalf of the Board of Directors of Linde plc for the Annual General Meeting of Shareholders on July 25, 2022 I (we) hereby authorize Matthew J. White and Guillermo Bichara, or either of them, and each with the power to appoint his substitute, to vote as Proxy for me (us) at the Annual General Meeting of Shareholders of Linde plc to be held at the Corinthia Hotel, Whitehall Place, Westminster, London, SW1A 2BD, U.K., on July 25, 2022 at 1:00 P.M., local time, or any adjournment or postponement thereof, the number of ordinary shares of Linde plc which I (we) would be entitled to vote if personally present. The proxies shall vote such shares as directed on the reverse side of this card and the proxies are authorized to vote in their discretion upon such other business as may properly come before the Annual General Meeting and any adjournments or postponements thereof. I (we) revoke all proxies heretofore given to vote at the Annual General Meeting. Please see the notice in the 2022 Linde plc Proxy Statement regarding possible changes to the meeting as a result of the COVID-19 pandemic. If I (we) properly sign and return this proxy card, the shares will be voted as I (we) specify on each Proposal. If I (we) do not specify a choice on one or more Proposals, the proxies will vote the shares as the Board of Directors recommends on each such Proposal. For Participants in the Linde Retirement Savings Plan and the Savings Program for Employees of Praxair Puerto Rico BV and its Participating Subsidiary Companies: As to those Linde plc ordinary shares, if any, that are held for me in the aforementioned Savings Plans, I instruct the Trustee of the applicable Savings Plan to vote my shares as I have directed on the reverse side of this proxy card. Where I do not specify a choice, the shares will be voted in the same proportion as the trustee votes the shares for which it receives instructions. Address Changes/Comments (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED. (Continued, and to be marked, dated and signed, on the other side) ANNUAL GENERAL MEETING OF SHAREHOLDERS — July 25, 2022 AT 1:00 P.M., local timeTHE CORINTHIA HOTEL, WHITEHALL PLACE, WESTMINSTER, LONDON, U.K. IF YOU PLAN TO ATTEND THE MEETING IN PERSON, PLEASE NOTE: Only shareholders, and the invited guests of Linde plc, will be granted admission to the Annual General Meeting. To assure admittance: If you hold Linde plc ordinary shares through a broker, bank or other nominee, please bring a copy of your broker, bank or nominee statement evidencing your ownership of Linde plc ordinary shares as of 1:00 P.M., local time on the July 23, 2022 voting record date Please bring a photo ID, if you hold shares of record as of 1:00 P.M., local time on July 23, 2022, including shares in certificate or book form or in the Linde plc Dividend Reinvestment and Stock Purchase Plan (“DRISP”) Please bring your employee ID if you are an employee shareholder The Annual General Meeting will start promptly at 1:00 P.M., local time, on Monday, July 25, 2022. Shareholders may, by technological means, participate in the Annual General Meeting in Ireland in accordance with section 176 of the Irish Companies Act 2014 by attending the offices of Arthur Cox, Ten Earlsfort Terrace, Dublin 2, D02 T380, Ireland at the time of the meeting. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL GENERAL MEETING TO BE HELD ON JULY 25, 2022: THE PROXY STATEMENT, 2021 FORM 10-K AND ANNUAL REPORT TO SHAREHOLDERS AND 2021 IFRS ANNUAL REPORT ARE NOW AVAILABLE FOR VIEWING AND DOWNLOADING AT: 2022 Notice of Annual General Meeting and Proxy Statement: https://investors.linde.com/proxystatement 2021 Form 10-K and Annual Report: https://investors.linde.com/annualreport 2021 IFRS Annual Report: https://investors.linde.com/ifrsreport
BY MARKING THIS CARD, YOU ARE VOTING ALL OF YOUR LINDE PLC ORDINARY SHARES HELD OF RECORD AND THOSE HELD IN THE SAVINGS PLAN(S). 1. Election of Directors. The Board of Directors recommends a vote “FOR” the nominees listed below. For Against Abstain Nominees For Against Abstain 1a. Stephen F. Angel 1f. Joe Kaeser 1b. Sanjiv Lamba 1g. Dr. Victoria Ossadnik 1c. Prof. DDr. Ann-Kristin Achleitner 1h. Prof. Dr. Martin H. Richenhagen 1d. Dr. Thomas Enders 1i. Alberto Weisser 1e. Edward G. Galante 1j. Robert L. Wood For Against Abstain 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 Linde plc 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 1a. Stephen F. Angel The Board of Directors recommends that you vote “FOR” PROPOSALS 2a and 2b, 3, 4 and 5 and “AGAINST” PROPOSAL 6. Check here if you Consent to future electronic delivery of the Annual Report/Proxy Statement (see explanation in the Proxy Statement)1 For Against Abstain 2a. To ratify, on an advisory and non-binding basis, the appointment of PricewaterhouseCoopers (“PWC”) as the independent auditor 2b. 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 Linde plc’s Named Executive Officers, as disclosed in the 2022 Proxy statement Check here if you Have written comments or change of address on this card Please be sure to sign and date this Proxy in the box below Date Stockholder sign above Co-holder (if any) sign above. Please sign name exactly as it appears on this card. Joint owners should each sign. Attorneys, trustees, executors, administrators, custodians, guardians or corporate officers should give full title. Please note that the last vote received, whether by telephone, Internet or by mail, will be the vote counted. IF YOU WISH TO VOTE BY INTERNET OR TELEPHONE, PLEASE READ THE INSTRUCTIONS BELOW PROXY VOTING INSTRUCTIONS VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on July 24, 2022. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on July 24, 2022. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.