ROK Rockwell Automation Inc

UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

 

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Rockwell Automation, Inc.

 

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BLAKE D. MORET

CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

December 14, 2021

“ROCKWELL RETURNED TO GROWTH THIS YEAR, AS AUTOMATION OF ESSENTIAL MANUFACTURING PROCESSES HELPED THE WORLD RECOVER.”

Dear Fellow Shareowners:

 

The initial challenges of the COVID-19 pandemic accelerated Rockwell Automation’s transformation in 2020 and we made great progress in building on and operationalizing changes in fiscal 2021. Across all three business segments, in sales and marketing, and through our other functional areas, we have picked up the pace to create a pure play industrial automation and information company unlike any other.

Rockwell returned to growth this year, as automation of essential manufacturing processes helped the world recover. We stepped up investment in both internal development and acquisitions to expand our value in new industries and applications. Additional investments underscored our commitment to our people, who remain the foundation of our success.

The outlook for 2022 is exciting, as high backlog, continued strong orders, and very good execution give us confidence in our forecast. Continued very low order cancellation rates and direct line of sight to end customer projects validate the durability of this demand, and continued supply chain challenges are prudently embedded in even the top end of our guidance range.

Our mid- and long-term differentiation is strengthened by the growing capabilities of our management team, important new product releases showcased at our Automation Fair last month, and an evolving partner eco-system that is recognized as the best in the business.

The Rockwell Board has embraced this transformation, encouraging a sense of urgency and relentless quest for finding new ways to win. The evolution of our culture is modeled by the Board and seen throughout our 24,500 worldwide employees, creating a shared purpose that more rapidly integrates new talent with experienced Rockwell employees. I’m proud of the way that new employees from recent acquisitions such as Plex, Fiix, Kalypso, and ASEM are having an influence that goes beyond their acquired businesses. I’m also grateful for the way that the thousands of other employees who have joined Rockwell in the last year are being welcomed by their management and human resources teams, under conditions that remain very difficult. As I meet with new hires, I’m impressed by the diverse perspectives they bring and by their conviction that what we do matters.

Our technology and people are helping to build a more resilient economy through solutions that enable safe, secure remote operation of manufacturing processes. We are unlocking new agility with advanced material handling products and software that simulates and optimizes new production. And we are helping industrial companies grow more sustainably, by running existing processes more efficiently and by helping renewable energy producers lower their costs and increase their capacity. Our rock-solid automation products and new sources of value have never been more in demand, and nobody is better positioned to bring them together for even more impact.

We’re working every day to do extraordinary things for our customers. Thank you for your trust in and your ownership of Rockwell Automation.

 

BLAKE D. MORET

Chairman, President and Chief Executive Officer

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TABLE OF CONTENTS

 

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MEETING INFORMATION

TUESDAY, FEBRUARY 1, 2022

5:30 p.m. CST

VIRTUAL ANNUAL MEETING
Attend the meeting online and vote at

www.virtualshareholdermeeting.com/ROK2022

TO THE SHAREOWNERS OF ROCKWELL AUTOMATION, INC.

You are cordially invited to attend our 2022 Annual Meeting of Shareowners on Tuesday, February 1, 2022, at 5:30 p.m. (Central Standard Time). The meeting will be a completely virtual meeting of shareowners conducted via live audio webcast for the following purposes:

Item 1 - to elect as directors the four nominees named in the accompanying proxy statement;

Item 2 - to approve on an advisory basis the compensation of our named executive officers;

Item 3 - to approve the selection by the Audit Committee of our Board of Directors of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2022;

and to transact such other business as may properly come before the meeting.

RECORD DATE

December 6, 2021

WHO MAY VOTE

You may vote if you were a shareowner of record at the close of business on the December 6, 2021 record date.

IMPORTANT MEETING INFORMATION

You will find information about the business to be conducted at the meeting in the attached proxy statement. Due to the continued public health impact of the COVID-19 pandemic, and to support the health and well-being of our shareowners, employees and communities, this year’s annual meeting will be held online via a live audio webcast. Shareowners will be able to listen to the annual meeting live online, submit questions, and vote their shares virtually. You can read about our performance in the accompanying 2021 Annual Report on Form 10-K. In addition, we make available on our Investor Relations website at https://ir.rockwellautomation.com/investors a variety of information for investors.

Your vote is important to us. Whether or not you plan to attend the meeting, it is important that your shares are represented and voted. We encourage you to vote before the meeting by returning your proxy card or voting via the internet or by telephone. If you decide to attend the meeting, you will still be able to vote online during the meeting, even if you previously submitted your proxy. If you plan to attend the meeting, please follow the instructions on page 73 of this proxy statement for login instructions.

DISTRIBUTION

We are furnishing our proxy materials to our shareowners over the internet using “Notice and Access” delivery. This method reduces the environmental impact of our annual meeting. Certain shareowners will receive a printed copy of our proxy materials.

By order of the Board of Directors,

REBECCA W. HOUSE

Secretary

December 14, 2021

 

 

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PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and you should read the entire proxy statement carefully before voting. Page references are supplied to help you find further information in this proxy statement.

VOTING MATTERS

We are asking you to vote on the following proposals at the Annual Meeting:

BOARD AND GOVERNANCE HIGHLIGHTS

 

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The following chart highlights Board composition and certain key attributes of our director nominees and continuing directors on the Board. Additional information about each director’s experience and qualifications is set forth in their profiles.

 

 

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EXECUTIVE COMPENSATION

We seek sustained growth and performance through a business strategy that depends on our executives for planning and execution. We believe it is important to align the compensation of our leadership with this growth and performance strategy through pay for performance, with appropriate levels of risk that are aligned with shareowner interests. We believe our shareowners support this philosophy based on positive shareowner approval of our executive compensation program.

We strive to align our compensation programs with best practices that address shareowner interests as provided in the Compensation Discussion & Analysis section. Our executive compensation program includes:

 

We have a long-standing and strong orientation toward pay for performance in our executive compensation program. In response to the evolving conditions and uncertainty the COVID-19 pandemic presented, we implemented temporary cost reduction actions, including reduction in executive compensation, that began in fiscal 2020 and ended during the first quarter of fiscal 2021. Reflecting our pay-for-performance orientation, no adjustments were made to fiscal 2020 performance targets or our zero annual incentive and below target performance share payout.

Economic conditions stabilized in fiscal 2021, and the Company benefited from the work done by all our employees to achieve strong fiscal 2021 financial results. Again, in accordance with our pay-for-performance orientation, we took actions in fiscal 2021 to recognize these results. The actions taken in fiscal 2020 and 2021, outlined below, applied consistently across all participants in these programs:

 

Our compensation actions helped to minimize workforce reductions and enabled us to make strategic investments that enhance value to our customers across diverse industries and deliver value to our shareowners through fast growth from areas of new value.

 

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PROXY STATEMENT

2022 ANNUAL MEETING

This proxy statement and the accompanying proxy are furnished in connection with the solicitation by our Board of Directors (our Board) of proxies to be used at the Annual Meeting of Shareowners of Rockwell Automation on February 1, 2022 (the Annual Meeting) and at any adjournment of the Annual Meeting. We will refer to the company in this proxy statement as “we,” “us,” “our,” the “Company” or “Rockwell Automation.”

ROCKWELL AUTOMATION OVERVIEW

We are a global leader in industrial automation and digital transformation. We connect the imaginations of people with the potential of technology to expand what is humanly possible, making the world more productive and more sustainable. Our hardware and software products, solutions and services are designed to meet our customers’ needs to reduce total cost of ownership, maximize asset utilization, improve time to market and reduce enterprise business risk.

Our principal executive office is located at 1201 South Second Street, Milwaukee, Wisconsin 53204, USA. Our telephone number is +1 (414) 382-2000, and our website is located at https://www.rockwellautomation.com. Our common stock trades on the New York Stock Exchange (NYSE) under the symbol ROK.

 

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CORPORATE GOVERNANCE

LEAD INDEPENDENT DIRECTOR LETTER

DONALD R. PARFET

LEAD INDEPENDENT DIRECTOR

 

“THE BOARD IS ACTIVELY ENGAGED WITH THE COMPANY’S INITIATIVES THAT UNDERSCORE OUR COMMITMENT TO MAINTAINING A STRONG AND INCLUSIVE CULTURE.”

Dear Fellow Shareowners:

On behalf of our Board, thank you for your investment in the Company and the trust you place in us to oversee your interests in its success. The Board is committed to independent oversight and strong corporate governance to enhance the value of your investment over the long term. As always, this year we worked closely with the Company’s management team to guide its strategic priorities as it addressed near-term challenges related to the COVID-19 pandemic and invested in opportunities that will drive the Company’s growth and create long-term shareowner value. I am pleased to update you on the Board’s priorities and actions over the past year.

Board Oversight of Company Strategy and Risk

In addition to the Company’s outstanding work to manage through the challenges brought on by the pandemic, this year was pivotal for the Company’s continued strategic transformation. The Company successfully operationalized its three new business segments that align with the value we deliver to customers. This year was also notable for the addition of new senior leaders who are adding expertise and different perspectives to help deliver the Company’s strategy. The Board was actively involved in their recruitment and hiring, and we are committed to adding leaders who are not only well-positioned to drive growth and value, but also share our commitment to our strong culture, including a keen focus on integrity, diversity, equity, and inclusion. In September we announced the completion of the acquisition of Plex Systems, which further accelerates growth in strategic areas of focus. The Board’s conversations on this transaction, as well as the other acquisitions this year, were part of our broader discussions at Board meetings where directors engaged in meaningful dialogue about the Company’s corporate strategy and key risks and opportunities. Our directors diligently provide this oversight with a purposefully curated mix of skills and experiences. As a Board we are aligned on the Company’s strategic direction and committed to open communication with the management team.

Board Oversight of Environmental, Social and Governance Initiatives

The Company’s strategy incorporates and is informed by our environmental, social, and governance (ESG) initiatives. The management team worked proactively with and received guidance from the Board as it addressed not only traditional human capital management issues but also novel issues presented by the pandemic. The Board is actively engaged with the Company’s initiatives that underscore our commitment to maintaining a strong and inclusive culture. Directors were involved in the recruitment of our new Chief Diversity, Equity and Inclusion officer, participated in diversity and inclusion programs with our employees, and continued our practice of meeting key talent across the organization. Our involvement with the Company’s stakeholders does not stop with employees. The Board reviews shareowner communications sent to its attention and is informed about shareowner feedback provided during the Company’s year-round investor engagements. We continue to use shareowner input to inform our governance practices to ensure they remain strong. I encourage you to review the Company’s annual Sustainability Report, which provides additional information about our Sustainability Strategy across ESG initiatives, which is focused on creating a sustainable Company, sustainable communities, and sustainable customers.

Again, thank you for your investment in the Company. It is my privilege to serve as Lead Independent Director of the Board, and I greatly value your continued support.

DONALD R. PARFET
Lead Independent Director

 

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ENVIRONMENTAL, SOCIAL, AND GOVERNANCE

Sustainability is central to our mission to make the world more productive and more sustainable, and to our promise of Expanding Human Possibility. We have long understood that sustainability is a key imperative for our business and our stakeholders and we continuously adapt our sustainability approach to meet new challenges and make a meaningful, lasting difference in the world. Under the three sustainability pillars of Environmental, Social, and Governance (ESG), we prioritize the topics we believe will create the most value and help us deliver three outcomes: Sustainable Customers, Sustainable Company, and Sustainable Communities.

 

Rockwell Automation is uniquely positioned to have a positive impact on the world because we help our customers to achieve their own sustainability goals. We offer innovative ways to reduce waste, increase operational and resource efficiency, and enable customers to successfully navigate sustainable digital transformation. We strive to operate our own business with maximum efficiency with a focus on programs and initiatives to maximize resource efficiency (energy, water, waste) to reduce demand and emissions. In 2010, we set a goal to cut greenhouse gas emissions intensity 30%, from a 2008 baseline, by 2022. Through various resource efficiency initiatives, in 2018 we met our goal four years early. In November 2020, we announced our goal to be carbon neutral by 2030 (scope 1 and 2 emissions). In 2021 we released our first Global Reporting Initiative report and announced the creation of our new sustainability team tasked with driving our holistic strategy for all aspects of sustainability. We also plan to release our first ever Task Force on Climate-Related Disclosures (TCFD) report by late December.

 

 

We are committed to making a positive impact on the world by investing in the communities where our employees live and work. Programs and activities that build science, technology, engineering, and math (STEM) skills are our key philanthropic focus. We invest heavily in university and workforce training programs that address shortages of skilled manufacturing talent while providing access to family-supporting jobs. Every partnership is designed to provide equitable access to people with diverse backgrounds and experiences.

Our diverse workforce and inclusive culture are a competitive advantage that improve our ability to recruit and retain top talent, maximizing innovation, teamwork, and problem-solving to accelerate business growth. In 2021 we increased investments to promote diversity, equity and inclusion (DEI) more broadly across our organization and hired our first Chief Diversity, Equity and Inclusion Officer. He leads the team responsible for designing and operationalizing our holistic DEI strategy that reaches employees, suppliers, and commercial and community partners. Our strategy builds on over a decade of work, with newer initiatives focused on including progress on strategic company goals, including DEI, in our executive compensation program and formally training leaders to manage and sponsor employees across difference. Our culture extends to our responsible supply chain practices. Our suppliers and distributors follow our Supplier and PartnerNetwork Codes of Conduct and abide by social compliance standards to support human rights, labor rights, security, and diversity and inclusion.

Integrity guides our every action as we inspire, enable and equip our people to innovate, outperform our competitors, and deliver on the needs of our customers. Our culture is focused on four tenets: strengthening our commitment to and demonstration of integrity, diversity, equity and inclusion, comparing ourselves to the best alternatives, increased speed of decision making, and ensuring a steady stream of fresh ideas, all in an effort to create an inclusive environment where all employees can and want to do their best work.

We believe the health and safety of our employees is integral to operational excellence. We strive for zero workplace injuries and illnesses and operate in a manner that recognizes safety as fundamental to the employee experience. We demonstrate leadership with our safety performance and have consistently reported best-in-class recordable case rate measures.

 

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Our Governance pillar includes a focus on ethics and integrity, cybersecurity, product quality and safety, enterprise risk management, corporate governance and engaging our stakeholders. The following provides an overview of certain of our corporate governance practices and Board attributes:

 

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BOARD’S ROLE AND RESPONSIBILITIES

 

The Board is responsible for overseeing the business and affairs of the Company, including corporate governance, corporate responsibility, business strategy, enterprise risk, business performance, capital management, executive compensation, and human capital management, including succession planning and development of the executive management team. The Board is focused on helping the Company achieve long-term value creation for its shareowners and other stakeholders and maintaining the Company’s strong commitment to integrity and ethical conduct in all of the Company’s relationships and business transactions.

 

The Board provides oversight of management’s program of enterprise risk management and reviews significant risks through both the whole Board and its Committees. Our Annual Report on Form 10-K for the year ended September 30, 2021 contains a detailed description of the most significant enterprise risks that we face.

 

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Our Board considers succession planning and development to be a critical part of the Company’s long-term strategy. The Board oversees CEO and senior management succession and development plans and receives regular reports on employee engagement and retention matters. The Board also takes an active role in the oversight of overall talent management and has opportunities to engage with high potential and emerging leaders and interact with and assess talent throughout the organization. In particular, the Board Composition and Corporate Governance Committee defines the skills, attributes and other criteria to be used for succession plans and recruitment for the CEO, and the Compensation and Talent Management Committee oversees the succession and development of other senior management. At least annually the full Board reviews senior management succession and development plans with our CEO. With regard to CEO succession planning, the Board regularly discusses potential CEO candidates and their development and preparedness.

 

 

Corporate responsibility and sustainability are important priorities for the Board and the Company. We have a strong commitment to being an ethical and responsible company acting with integrity and respect for each other, our communities and the environment, which starts with the tone set by the Board. We adhere to a Code of Conduct that applies to all employees and directors. The Code of Conduct is based on principles and laws that guide the decisions and actions of our employees.

The Board has primary responsibility for oversight of ESG matters, including initiatives and programs related to sustainability, corporate culture, and human capital management, with the standing Committees supporting the Board by addressing these specific ESG matters related to their respective areas of oversight. The Board Composition and Corporate Governance Committee reviews and assesses the Company’s policies and practices with respect to matters affecting the Company’s culture and corporate responsibilities, including environmental protection and sustainability. In relation to human capital management in particular, the standing Committees of the Board address the risks related to their respective areas of oversight as outlined below.

BOARD OVERSIGHT OF HUMAN CAPITAL MANAGEMENT

 

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SHAREOWNER ENGAGEMENT

We believe that effective corporate governance should include regular engagement with our shareowners. We are committed to fostering strong relationships and an open dialogue with shareowners through our ongoing program of outreach to shareowners that is management-led and overseen by the Board. During the fall, we invite our largest shareowners (excluding brokerage accounts) to discuss our ESG practices and executive compensation program. We also solicit input on topics of importance to our shareowners. We conduct additional outreach with our largest shareowners during the proxy season, with post-meeting follow-up as appropriate. In addition, throughout the year our Investor Relations team along with our CEO and CFO engage with our shareowners frequently.

In fall 2021, we invited shareowners representing approximately half of our outstanding shares to calls and received feedback from shareowners representing over 20% of our outstanding shares. Our discussions focused on ESG initiatives, practices and trends, including sustainability practices and opportunities, diversity, equity and inclusion, and our executive compensation program. We also received feedback on other topics important to our shareowners.

Shareowner feedback from our outreach calls and any shareowner letters that we receive are presented to and discussed with the Board. The Board values the views of shareowners and considers shareowner feedback in establishing and evaluating appropriate policies and practices. Acting in line with shareowner feedback and other input, in the past our Board proactively adopted a proxy access by-law and enhanced disclosure of director skills, Board processes, ESG matters, and the Audit Committee’s review of auditor tenure and rotation in our proxy statement.

We believe that regular engagement with our shareowners helps to strengthen our relationships with shareowners, helps us to better understand shareowner views on our ESG practices and initiatives, and provides us with insights into ESG and compensation topics and trends.

COMMUNICATIONS TO THE BOARD AND OMBUDS

Shareowners and other interested parties may send communications to the Board, an individual director, the Lead Independent Director, the non-management directors as a group, or a Board Committee at the following address:

Rockwell Automation, Inc.

c/o Corporate Secretary
1201 South Second Street
Milwaukee, Wisconsin 53204, USA
Attn: Board of Directors

The Secretary will receive and process all communications before forwarding them to the addressee. The Secretary will forward all communications unless the Secretary determines that a communication is a business solicitation or advertisement, or requests general information about us.

In accordance with procedures approved by the Audit Committee, concerns about accounting, internal controls or auditing matters should be reported to the Ombuds as outlined in our Code of Conduct, which is available on our website at https://ir.rockwellautomation.com, select “Integrity & Compliance” from the Corporate Governance dropdown menu, select the “Integrity & Sustainability” tile, then the “Ethics & Compliance” tile, and finally the “Rockwell Automation Code of Conduct.” The Code of Conduct is also available in print to any shareowner upon request. The Ombuds and Chief Compliance Officer are required to report promptly to the Audit Committee all reports of questionable accounting or auditing

 

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matters that the Ombuds receives and all matters involving allegations of a serious violation of the Code of Conduct by a senior executive or director that the Chief Compliance Officer receives. You may contact the Ombuds by addressing a letter to:

Ombuds
Rockwell Automation, Inc.

1201 South Second Street
Milwaukee, Wisconsin 53204, USA

You may also contact the Ombuds by telephone at
+1 (800) 552-3589 (US only) or +1 (414) 382-8484,
e-mail at ombudsman@ra.rockwell.com,
fax at +1 (414) 382-8485, or,
if you wish to remain anonymous, by going to:
https://rockwellautomationombudsman.alertline.com.

BOARD STRUCTURE

The Board takes a flexible approach to its leadership structure, allowing it to adapt its structure depending on current circumstances. The Board reviews its leadership structure at least annually and will vary that structure in order to ensure effective oversight and operations. The Board regularly evaluates whether to separate or combine the roles of Chairman and CEO, and the leadership structure depends on the current performance of the Company and the experience and knowledge of the CEO. Currently, the Board has combined the roles of Chairman and CEO and Mr. Moret serves in both capacities. The Board believes that this structure enhances overall Board effectiveness and interaction with management, and provides the Company with strong, clear leadership and strategic vision.

The Board believes that a unified leadership structure continues to work well and is the right model for us to successfully execute our strategy. In making this decision, the Board considers the Company’s performance, operating and governance environment, investor feedback, and the Board’s composition, functioning and effectiveness. The Board believes that Mr. Moret has the skills, experience and character to provide the Company with strong and effective leadership, including:

The leadership structure of the Board and Company is further strengthened by:

Our Guidelines on Corporate Governance require the appointment of a Lead Independent Director in the event the Chairman is a management director. The Board believes that this framework further strengthens the leadership of the Company. In February 2016, the Board elected Donald R. Parfet to serve as Lead Independent Director. Mr. Parfet is an experienced director having served as a senior executive of a pharmaceutical company and currently serving as a director of two other public companies, including one of which he serves as non-executive chairman. The Board adopted a separate charter for the Lead Independent Director to formalize existing practices and strengthen the role.

The Board’s independent oversight function is further enhanced because the directors have complete access to management, the Board and the Committees may retain their own advisors, and there is an annual evaluation by the independent Compensation and Talent Management Committee in collaboration with the Lead Independent Director of our CEO’s performance against predetermined goals with input from the other independent directors.

 

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The following chart sets forth the primary roles and responsibilities of the Chairman and the Lead Independent Director. We believe the Board’s leadership structure is appropriate for the Company, providing effective independent oversight of management and ensuring a highly independent, engaged and functioning Board.

 

 

BOARD MEETINGS AND COMMITTEES

Our business is managed under the direction of the Board. The Board has established four standing committees: the Audit Committee, the Board Composition and Corporate Governance Committee, the Compensation and Talent Management Committee and the Technology Committee, whose principal functions are briefly described below. Each Committee has a written charter that sets forth the duties and responsibilities of the Committee. Current copies of the Committee charters are available on our website at https://ir.rockwellautomation.com/corporate-governance/governance-documents/default.aspx. The Committees review and assess the adequacy of their charters each year and recommend any proposed changes to the Board for approval. During fiscal 2021, the Board Composition and Corporate Governance Committee and the Compensation and Talent Management Committee amended their charters to clarify and define their respective responsibilities with respect to oversight of corporate responsibility, diversity, equity and inclusion and talent management and employee engagement. The Audit Committee and Technology Committee did not make any changes to their charters during fiscal 2021.

In fiscal 2021, the Board held nine meetings and on four occasions acted by written consent in lieu of a meeting. Eight of the directors attended 100% of the meetings and three directors did not attend one of the meetings of the Board or the Committees on which they served. All directors attended 89% or more of the total number of meetings. Under our Guidelines on Corporate Governance, directors are expected to attend the Annual Meeting of Shareowners. All directors attended the 2021 Annual Meeting of Shareowners.

INDEPENDENT DIRECTOR SESSIONS

The independent directors meet in executive session without any officer or member of management present in conjunction with regular meetings of the Board and each Committee. The Lead Independent Director presides over independent director sessions of the Board, and Committee Chairs preside over executive sessions of their respective Committees. Following each executive session, the Lead Independent Director and the Committee Chairs discuss with the Chairman and CEO appropriate matters from these sessions.

 

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COMMITTEES OF THE BOARD

 

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BOARD PROCESSES

BOARD AND COMMITTEE EVALUATIONS

The Board and its Committees conduct self-assessments annually at their October/November meetings. The Board Composition and Corporate Governance Committee annually reviews the style and manner in which the evaluations will be conducted to ensure they are effective for the Company and its strategy. The Board will vary its evaluation approach based on the needs of the Board at any given time and change it from time to time to enable different forms of feedback. The Board uses different approaches for its evaluations, including written questionnaires and in-depth confidential interviews with individual directors conducted by the Chair of the Board Composition and Corporate Governance Committee, and meetings with certain members of management, and has explored the use of a third-party facilitator. The Chair of the Board Composition and Corporate Governance Committee oversees the Board evaluation process, including the evaluation of the Lead Independent Director. The current annual evaluation process is summarized below.

 

 

 

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DIRECTOR EDUCATION

Our Board believes in continuous improvement of Board effectiveness and functioning as well as individual skills and knowledge. All new directors are required to participate in our director orientation program to familiarize them with the Company’s business, strategic plans, significant financial, accounting and risk management issues, ethics and compliance programs, corporate governance practices, sustainability strategy, principal officers, and internal and independent auditors.

In addition to annual ethics training, we also provide directors with regular presentations and memoranda on key business, ESG, and other important topics intended to help directors stay current on practices and emerging issues and in carrying out their responsibilities, with focus last year on compliance matters, corporate culture and sustainability. Directors from time-to-time tour Company facilities and attend our trade shows and investor events. In addition, directors receive presentations and reports from our auditors, consultants and other outside advisors and participate in outside continuing education programs to increase their knowledge and understanding of the duties and responsibilities of directors and the Company, regulatory developments, emerging trends, and best practices.

RELATED PERSON TRANSACTIONS

The Board adopted a written policy regarding how it will review and approve related person transactions (as defined below). The Board Composition and Corporate Governance Committee is responsible for administering this policy. The policy is available on our website at https://ir.rockwellautomation.com/corporate-governance/governance-documents/default.aspx.

The policy defines a related person transaction as any transaction in which the Company is or will be a participant, in which the amount involved exceeds $120,000, and in which any Related Person or any of their immediate family members has or will have a direct or indirect material interest. Related Persons include directors, director nominees, executive officers, and shareowners who own more than 5% of the Company’s securities. The policy sets forth certain transactions, arrangements and relationships not reportable under SEC rules that do not constitute related person transactions.

Under this policy, each director, director nominee and executive officer must report each proposed or existing transaction between us and that individual or any of that individual’s immediate family members to our Chief People and Legal Officer. Our Chief People and Legal Officer will assess and determine whether any transaction reported to her, or of which she learns, constitutes a related person transaction. If our Chief People and Legal Officer determines that a transaction constitutes a related person transaction, she will refer it to the Board Composition and Corporate Governance Committee. The Board Composition and Corporate Governance Committee will approve or ratify a related person transaction only if it determines that the transaction is in, or is not inconsistent with, the best interests of the Company and its shareowners. In determining whether to approve or ratify a related person transaction, the Board Composition and Corporate Governance Committee will consider factors it deems appropriate, including:

There are no related person transactions to report in this proxy statement.

Rebecca W. House, the Company’s Senior Vice President, Chief People and Legal Officer and Secretary, is married to a partner in the law firm of Foley & Lardner LLP (Foley). The Company has used Foley to perform various legal services for many years, significantly predating Ms. House joining the Company in January 2017. Ms. House’s spouse does not have a material interest in Foley’s relationship with the Company because he is not involved in providing or supervising services that Foley performs for the Company, he does not receive any direct compensation from the fees the Company pays to Foley, and the fees paid by the Company to Foley in the last fiscal year were less than one-half of one percent of Foley’s annual revenues. Under the Company’s related person transactions policy, the Board Composition and Corporate Governance Committee reviewed the Company’s relationship and transactions with Foley and concluded that they comply with the policy and do not constitute related person transactions. The Board Composition and Corporate Governance Committee also approved additional guidelines that require the Company’s CFO to review and pre-approve any recommendations to engage Foley for legal services. The Company elected to voluntarily disclose its relationship with Foley in this proxy statement.

 

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CORPORATE GOVERNANCE DOCUMENTS

You will find current copies of the following corporate governance documents on our website at https://ir.rockwellautomation.com/corporate-governance/governance-documents/default.aspx:

We will provide printed copies of any of these documents to any shareowner upon written request to Rockwell Automation Shareowner Relations, 1201 South Second Street, Milwaukee, WI 53204, USA.

 

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ELECTION OF DIRECTORS

BOARD OF DIRECTORS

INTRODUCTION

Our certificate of incorporation provides that the Board will consist of three classes of directors serving staggered three-year terms that are as nearly equal in number as possible. One class of directors is elected each year with terms extending to the third succeeding Annual Meeting after election.

The Board has nominated four directors for election at this Annual Meeting. The Board has nominated all four of these current directors, upon the recommendation of the Board Composition and Corporate Governance Committee, for election as directors with terms expiring at the 2025 Annual Meeting. Mr. Keane was reassigned from the class of directors with terms expiring in 2023 to the class with terms expiring in 2025 to better align director tenure across director classes.

Proxies properly submitted will be voted at the meeting, unless authority to do so is withheld, for the election of the four nominees specified below, subject to applicable NYSE regulations. If for any reason any of these nominees is not a candidate when the election occurs (which is not expected), proxies and shares properly authorized to be voted will be voted at the meeting for the election of a substitute nominee. Alternatively, the Board may decrease the number of directors.

The Board has adopted Guidelines on Corporate Governance that contain general principles regarding the responsibilities and function of our Board and Board Committees. The Guidelines on Corporate Governance set forth the Board’s governance practices with respect to leadership structure, Board meetings and access to senior management, director compensation, director qualifications, Board performance, management development and succession planning, director stock ownership, and enterprise risk management. The Guidelines on Corporate Governance are available on our website at https://ir.rockwellautomation.com/corporate-governance/governance-documents/default.aspx.

DIRECTOR INDEPENDENCE

Our Guidelines on Corporate Governance require that a substantial majority of the members of the Board be independent directors. For a director to be independent, the Board must affirmatively determine that the director has no direct or indirect material relationship with the Company. The Board has established guidelines, which are contained in our Guidelines on Corporate Governance, to assist it in determining director independence in conformity with the NYSE listing requirements. These guidelines are available on our website at https://ir.rockwellautomation.com/corporate-governance/governance-documents/default.aspx.

After considering these guidelines and the independence criteria of the NYSE, the Board has determined that none of the current directors, other than Mr. Moret (who is a current employee of the Company), have a material relationship with the Company and each of the directors, other than Mr. Moret, is independent. There were no transactions, relationships or arrangements that required review by the Board for purposes of determining director independence in fiscal 2021.

NOMINATION PROCESS

The Board Composition and Corporate Governance Committee is responsible for screening potential director candidates and recommending qualified candidates to the full Board.

The Committee will consider director candidates recommended by shareowners. Shareowners can recommend director candidates by writing to the Corporate Secretary at Rockwell Automation, 1201 South Second Street, Milwaukee, Wisconsin 53204, USA. The recommendation must include the candidate’s name, biographical data and qualifications and any other information required by the SEC to be included in a proxy statement with respect to a director nominee. Any shareowner recommendation must be accompanied by a written statement from the candidate indicating his or her willingness to serve if nominated and elected. The recommending shareowner also must provide evidence of being a shareowner of record of our common stock at that time.

In addition to recommending director candidates to the Committee, shareowners may nominate candidates for election to the Board directly at the Annual Meeting by following the procedures and providing the information set forth in our by-laws. See “Shareowner Proposals for 2023 Annual Meeting” set forth later in this proxy statement. Eligible shareowners may also use our proxy access by-law to nominate candidates for election to our Board provided the shareowners and nominees satisfy specified requirements.

 

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The Committee, the Chairman and CEO or other members of the Board may identify a need to add new members to the Board or fill a vacancy on the Board. In that case, the Committee will initiate a search for qualified director candidates, seeking input from senior management and Board members, and to the extent it deems it appropriate, outside search firms. The Committee will evaluate qualified candidates and then make its recommendation to the Board.

DIRECTOR QUALIFICATIONS

In making its recommendations to the Board with respect to director candidates, the Committee considers various criteria set forth in our Board Membership Criteria (see Exhibit A to the Committee’s Charter), including experience, professional background, specialized expertise, diversity and concern for the best interests of shareowners as a whole. In addition, directors must be of the highest character and integrity, be free of conflicts of interest with the Company, and have sufficient time available to devote to the affairs of the Company. The Committee from time to time reviews with the Board our Board Membership Criteria.

The Committee will evaluate properly submitted shareowner recommendations under substantially the same criteria and in substantially the same manner as other potential candidates.

We believe that our directors should possess the highest character and integrity and be committed to working constructively with others to oversee the management of the business and affairs of the Company. Our Board Membership Criteria provide that our directors should (i) have a variety of experience and backgrounds, (ii) have high level managerial experience or be accustomed to dealing with complex problems, and (iii) represent the balanced best interests of all shareowners, considering the overall composition and needs of the Board and factors such as diversity, age, and specialized expertise in the areas of corporate governance, finance, industry, international operations, technology and risk management. The Board Membership Criteria attach importance to directors’ experience, ability to collaborate, integrity, ability to provide constructive and direct feedback, lack of bias, and independence. Our Board seeks to maintain members with strong collective abilities that allow it to fulfill its responsibilities.

BOARD SKILLS, QUALIFICATIONS, AND EXPERIENCE

The Board has determined that all of the Company’s directors are financially literate and possess the skills, judgment, experience, reputation, and commitment to make a constructive contribution to the Board. In addition, there are seven distinct sets of skills or experience described below that we believe should be represented on our Board to enable the Board to effectively fulfill its governance responsibilities and provide guidance to the management team on the Company’s strategy and execution of that strategy. The Board Composition and Corporate Governance Committee strives to ensure that our directors have an appropriate balance of these talents.

 

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BOARD REFRESHMENT, TENURE AND DIVERSITY

A continuing priority of the Board is ensuring the Board is composed of directors who bring diverse perspective and viewpoints and have a variety of skills, experiences and backgrounds to enable the Board to effectively fulfill its governance responsibilities and represent the long-term interests of shareowners. The Board is mindful that director tenure is an important consideration in evaluating Board composition.

The Board does not have a formal policy with respect to diversity but recognizes the value of a diverse Board and thus has included diversity as a factor that is taken into consideration in its Board Membership Criteria. The Board believes that it is important that its members reflect diverse viewpoints so that, as a group, the Board includes a sufficient mix of perspectives to allow the Board to best fulfill its responsibilities to shareowners.

The Board believes that tenure should be discussed and evaluated by the Board from time to time and depends on the Board’s current situation and the needs of the Company. The Board believes that it contains an ideal balance of newer and longer-tenured directors, so we get the benefit of both fresh perspectives and extensive experience. Three directors have served at least nine years, while five directors were added to the Board in the past six years. The Board believes its current tenure mix is appropriate for the Board at this time and recognizes the merits of a board with balanced tenure. Our directors with longer service are highly valued for their experience and Company-specific knowledge. They have a deep understanding of our business, provide historical context as the Board reviews and evaluates the Company’s strategy, and enhance Board dynamics and the Board’s relationship with management.

The Board regularly reviews director succession and the mix of Board composition, diversity and experience, especially when adding a new member. As part of this process, the Board evaluates the contributions and tenure of current Board members and compares them to the skills that might benefit the Company in light

 

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of emerging needs. The Board seeks people with a variety of occupational and personal backgrounds to ensure that the Board benefits from a range of perspectives and to enhance the diversity of the Board in such areas as experience, geography, race, gender, and ethnicity. The Board also conducts annual self-assessments and director evaluations. The Board believes it is in the best position to determine the appropriate length of service for a director and overall board tenure, with its current mix providing for a highly effective and functioning Board. In addition to director refreshment, the Board considers refreshment of continuing directors at the Board Committee level by regularly evaluating and rotating Committee Chairs and members. In February 2020, the Board updated its Guidelines on Corporate Governance to implement formal term limits for directors in order to ensure proper Board refreshment and alignment of director attributes and skills with the Company’s evolving strategy. A non-management director will not be nominated for re-election to the Board after he or she has served on the Board for 15 years or, if earlier, attained age 72, subject to limited exceptions for up to one additional three-year term.

SHAREOWNER ALIGNMENT

Our Board believes its interests are aligned with shareowners, both economically and in carrying out its responsibility of oversight of the Company’s strategic priorities and the creation of shareowner value.

Our director compensation program is designed to align director compensation directly with the interests of shareowners by paying a meaningful portion of director compensation in shares of our common stock. To further align their interests with shareowners, directors can defer cash fees to restricted stock units that are paid out in shares. In addition, directors are subject to stock ownership requirements. They are required to own shares of our common stock equal in value to five times the portion of the annual retainer payable in cash (with the cash retainer for fiscal 2021 at $107,500) and may not sell any shares of our common stock until their stock ownership requirements are met. None of our directors receive compensation for their Board service from any source other than the Company.

We seek to maintain a Board with experienced leaders who are familiar with governance issues and compliance with the laws and regulations applicable to our business. Our Board monitors shareowner views and considers shareowner feedback and perspectives in establishing and evaluating Company policies and practices.

SUMMARY

 

We have provided certain information about the capabilities, experience and other qualifications of our directors in their profiles. The Board considered these qualifications in particular in concluding that each current director is qualified to serve as a director of the Company. In addition, the Board has determined that each director is financially literate and possesses the skills, judgment, experience, reputation, and commitment to make a constructive contribution to the Board.

 

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NOMINEES FOR ELECTIONS AS DIRECTORS WITH TERMS EXPIRING IN 2025

 

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DIRECTOR COMPENSATION

Our director compensation program is designed to attract and retain qualified directors, fairly compensate directors for the time they spend in fulfilling their duties and align their compensation directly with the interests of shareowners. The Board Composition and Corporate Governance Committee determines the form and amount of director compensation, with discussion and approval by the full Board. The Committee relies on Willis Towers Watson to provide advice on director compensation trends. The Committee benchmarks its director compensation on an annual basis relative to proxy data available for companies of similar size ($5-10 billion revenue range). The market data analysis is a significant factor in our compensation determinations. As shown, using equity within the director compensation program, the Board believes that a meaningful portion of director compensation should be in the form of our common stock to further align the economic interests of directors and shareowners. Employees who serve as directors do not receive any compensation for their director service.

In response to the macroeconomic situation caused by the COVID-19 pandemic, we instituted temporary cost reductions, including salary reductions for our executives. Consistent with those actions, effective April 1, 2020, the Board reduced the quarterly cash payments for its annual cash retainer, Committee Chair Fees, and the Lead Independent Director fee, by 50%. These amounts were reinstated to the full amount effective January 2021.

ANNUAL DIRECTOR COMPENSATION

There are three elements of our director compensation program: an annual retainer, equity awards and Committee Chair fees. The following table describes each element of director compensation for fiscal 2021.

 

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Share-based compensation to non-employee directors is delivered under the 2020 Long-Term Incentives Plan effective February 5, 2020 and includes an annual limit of $750,000 on total compensation of each non-employee director, including cash- and share-based compensation.

Under the terms of our Directors Deferred Compensation Plan, directors may elect to defer all or part of the cash payment of Board retainer or Committee fees until such time as the director specifies, with interest on deferred amounts accruing quarterly at 120% of the federal long-term rate set each month by the Secretary of the Treasury. In addition, each director has the opportunity each year to defer all or any portion of the annual grants of common stock, cash retainer, and Committee fees by electing to instead receive restricted stock units valued, in the case of cash deferrals, at the closing price of our common stock on the NYSE on the date each payment would otherwise be made in cash.

We reimburse directors for transportation, lodging and other expenses actually incurred in attending Board and Committee meetings. We also reimburse directors for similar travel, lodging and other expenses for their spouses to accompany them to a limited number of Board meetings held as retreats to which we invite spouses for business purposes. From time to time and when available, directors and their spouses are permitted to use our corporate aircraft for travel to Board meetings. In fiscal 2021 we hosted one in-person Board retreat and spouses were not in attendance at any meetings during fiscal 2021.

Directors are eligible to participate in a matching gift program under which we match donations made to eligible educational, arts or cultural institutions. Gifts are matched up to an annual calendar year maximum of $10,000. This same program is available to all our U.S. salaried employees.

DIRECTOR STOCK OWNERSHIP REQUIREMENT

Non-employee directors are subject to stock ownership requirements and may not sell any shares of our common stock until the requirement is met. To further align directors’ and shareowners’ economic interests, our Guidelines on Corporate Governance provide that non-management directors are required to own, within five years after joining the Board, shares of our common stock (including restricted stock units) equal in value to five times the portion of the annual retainer that is payable in cash. All directors met the requirements as of September 30, 2021, except for Mr. Gipson, who joined the Board in November 2020 and is within the five-year compliance window.

DIRECTOR COMPENSATION FOR FISCAL 2022

As stated above, in fiscal 2021 we provided equity awards to our non-employee directors equal to 50% of the annual retainer ($107,500) on October 1, 2020, and $40,000 on the same date as our annual shareowner meeting on February 2, 2021. Effective October 1, 2021, we consolidated the equity award timing to coincide with the date of the annual long term incentive awards for our management team on the date of the Compensation and Talent Management Committee meeting in December. On December 7, 2021, each director received shares equal to $147,500 granted under the 2020 Long Term Incentives Plan based on the closing price of our common stock on the NYSE on that date. No other changes were made to director compensation.

 

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DIRECTOR COMPENSATION TABLE

The following table shows the total compensation earned by each of our non-employee directors during fiscal 2021.

 

COMPENSATION AND TALENT MANAGEMENT COMMITTEE REPORT

The Compensation and Talent Management Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this proxy statement. Based on this review and discussion, the Compensation and Talent Management Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.

Compensation and Talent
Management Committee
Lisa A. Payne, Chair
J. Phillip Holloman
Steven R. Kalmanson
Thomas W. Rosamilia

 

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EXECUTIVE COMPENSATION

 

 

 

 

 

 

 

 

 

 

 

 

 

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Every year our shareowners have the opportunity to provide an advisory vote on our executive compensation. This advisory vote is one of many ways you can convey your views about our compensation programs and policies.

Our compensation philosophy is designed to attract, retain, and motivate executive talent and emphasize pay for performance, including the creation of shareowner value. We encourage you to read the Compensation Discussion and Analysis (CD&A) and compensation tables that follow for a detailed discussion of our compensation programs and policies. We believe our compensation programs and policies are aligned with shareowner interests and worthy of your continued support as they are supported by a strong framework of compensation governance and are effective in implementing our compensation philosophy and achieving our short- and long-term goals with the appropriate level of risk.

The following resolution will be submitted for a shareowner vote at the 2022 Annual Meeting:

Although this vote is not binding on the Company, the Board values your views. The Board and Compensation and Talent Management Committee will review the results of the vote and take them into consideration in addressing future compensation policies and decisions.

 

COMPENSATION DISCUSSION AND ANALYSIS

This CD&A describes our executive compensation philosophy and program, as well as the specific compensation paid during fiscal year 2021 to the five current executives shown below, as well as two former SVP & Chief Financial Officers, Patrick P. Goris⁽¹⁾ and Steven W. Etzel⁽¹⁾, during fiscal 2021. We refer to these individuals as our “named executive officers,” or NEOs.

 

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COMPENSATION PROGRAM OVERVIEW

COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

 

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EXECUTIVE COMPENSATION BEST PRACTICES

We employ the following best practices to effectively manage our executive compensation program:

SHAREOWNER SUPPORT ON EXECUTIVE COMPENSATION

At our 2021 Annual Meeting of Shareowners our shareowners voted to approve our executive compensation programs on an advisory basis. We have always received shareowner approval for our executive compensation programs. In 2021, we engaged with shareowners to discuss our executive compensation program and feedback from our outreach calls was presented to the Committee. We believe these voting results and shareowner feedback received represent an endorsement of our executive compensation philosophy and pay programs.

2021 FINANCIAL PERFORMANCE HIGHLIGHTS

Despite continued challenges related to the COVID-19 pandemic, including supply chain constraints, the Company achieved several key financial, operational, and strategic performance milestones in fiscal 2021 including:

The table below demonstrates the year-over-year results for the financial measures used in our annual incentive plan:

 

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COMPENSATION ACTIONS DURING FISCAL 2021

We have a long-standing and strong orientation toward pay for performance in our executive compensation program. The COVID-19 pandemic had a significant impact on our business. We prioritized the safety of our employees, customers, and communities while demonstrating agility and ability to maintain production and business operations. In response to the evolving conditions and uncertainty the COVID-19 pandemic presented, we implemented temporary cost reduction actions, including reduction in executive compensation, that began in fiscal 2020 and ended during the first quarter of fiscal 2021. Reflecting our pay-for-performance orientation, our fiscal 2020 financial performance resulted in no payouts earned under our fiscal 2020 annual incentive compensation plan (ICP) and a below target number of performance shares earned for the performance period from October 1, 2017 to September 30, 2020. Also, despite the pandemic’s negative impact on the Company, no adjustments were made to fiscal 2020 performance targets or incentive payouts.

Economic conditions stabilized in fiscal 2021, and the Company benefited from the work done by all our employees to achieve strong fiscal 2021 financial results. Again, in accordance with our pay-for-performance orientation, we took actions in fiscal 2021 to recognize these results. The actions taken in fiscal 2020 and 2021, outlined below, applied consistently across all participants in these programs:

 

 

 

We are performance oriented and set stretch financial goals, balancing rewards with appropriate risk. We had overall above target financial performance and progress towards key strategic goals, resulting in fiscal 2021 ICP awards above target for our NEOs, average payout of 139.1% of target. Please reference 2021 Performance and Payout Results section below for further information.

For the performance period from October 1, 2018 to September 30, 2021, our three year TSR of 74.4% was at the 67th percentile of the S&P 500 Index and above our target of 60th percentile, resulting in 144% of the target number of performance shares earned. Please reference the 2019-2021 Performance Share Payout Results section below for further information.

Our strategy is to bring The Connected Enterprise to life by integrating control and information across the enterprise. We improve customer outcomes by combining advanced industrial automation with the latest information technology. Our growth and performance strategy seeks to:

We believe:

 

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The table below outlines the typical timing and annual review process that our Committee follows.

 

 

 

 

The Committee may deviate from this timing to make compensation changes regarding executives who are promoted or hired during the year or to respond to unusual conditions, such as the COVID-19 pandemic, that require decisions on a different timetable.

Willis Towers Watson, the Committee’s independent compensation consultant, the CEO, and certain other executives assist the Committee with its review of compensation of our officers.

PEER GROUP

The Committee believes it is important to clearly understand the relevant market for executive talent to inform its decision-making and to ensure that our executive compensation program supports our recruitment and retention needs. The compensation review process incorporates the prevalent market practice of using a defined peer group for benchmarking NEO pay levels and practices. Reflecting our growth in information technology and industrial operational technology software solutions, we incorporate specific industry sectors as part of the selection process for a relevant benchmark to our labor market for executive talent.

 

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Following a review process led by Willis Towers Watson, the Committee selected the following 20 companies to constitute the 2021 peer group (the “Compensation Peer Group”) at their September 2020 meeting. The only change from the 2020 peer group was to remove Symantec Corporation as they were acquired by Broadcom Inc.

 

 

We also consider broader market data in setting each element of our NEOs’ and other officers’ compensation. In particular, the Committee reviewed custom industry market data from the results of surveys provided by Willis Towers Watson and Aon Hewitt. This custom benchmarking includes specific industry sectors that best represent our labor market, size-adjusted based on revenue to yield an index of approximately 275 companies. The Company is near to or above the median revenue of both this group and the Compensation Peer Group (collectively, the “Peer Groups”).

We believe our compensation review process provides an appropriate picture of where we compete for talent and aligns with best practices in the market.

USE OF TALLY SHEETS

We consider the total compensation (earned or potentially available) for each NEO in establishing each element of compensation. As part of our compensation review process, the Committee conducts a total compensation review or “Tally Sheet”. This review encompasses three years of all elements of compensation, including base salary, annual incentives, realized value of LTI grants, perquisites, health benefits, and retirement benefits. We also review each NEOs’ Company stock ownership as well as potential termination payments. Based upon the results of this analysis, the Committee concluded that our compensation programs are in line with our compensation philosophy.

ROLE OF MANAGEMENT

The Committee assesses the performance of the CEO and sets the CEO’s compensation in executive session without the CEO present. The CEO reviews the performance of our other officers, including the other NEOs, with the Committee and makes recommendations regarding each element of their compensation for the Committee’s review and approval. The Committee and the CEO are assisted in their review by Willis Towers Watson and the Senior Vice President, Chief People & Legal Officer. The other NEOs do not play a role in their own compensation determinations other than discussing their performance with the CEO.

 

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BASE SALARY

The Committee reviews base salaries for our officers on an annual basis, as well as at the time of hire, promotion or other change in responsibilities. In determining our NEOs’ base salaries, the Committee considers:

In response to the COVID-19 pandemic, we instituted temporary cost reductions, including base salary reductions of 25% for Mr. Moret and 15% for the other officers reporting to our CEO effective from April 27 to December 6, 2020. The table below summarizes the changes in NEO base salary during fiscal 2021.

 

 

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ANNUAL INCENTIVE COMPENSATION

We provide annual incentive opportunities to our NEOs under our ICP.

NEO TARGETS

At the start of each fiscal year, or upon hire, we establish for each executive an incentive compensation target equal to a percentage of the individual’s base salary effective as of the fiscal year-end period. For the NEOs, the target is based on the median of the Peer Groups, with adjustments to reflect internal equity and other subjective factors.

Effective for fiscal 2021, the targets as a percentage of base salary (annual incentive targets) for our NEOs are provided below. Mr. Moret increased from 130% to 140% and Ms. House and Mr. Kulaszewicz increased from 70% to 80% to reflect each officer’s scope of role, internal equity, and position relative to the market benchmarks. The table below summarizes the fiscal 2021 annual and prorated incentive targets for our NEOs eligible for fiscal 2021 ICP awards which can range from 0 to 200% of target incentive, in line with our pay-for-performance orientation:

2021 ICP MEASURES AND GOALS

The Committee annually reviews the compensation measures and weightings and our fiscal 2021 ICP was designed to reward our executives for achieving Company financial results. The following table indicates the fiscal 2021 ICP financial measures and weightings for assessment of Company-wide financial performance for all the NEOs:

Beginning in fiscal 2021, organic annual recurring revenue growth was added as one of the four incentive compensation measures, in lieu of return on invested capital (ROIC). Annual recurring revenue (ARR) enables measurement of progress in growing our recurring revenue business. It represents the annual contract value of all active recurring revenue contracts at any point in time. Recurring revenue is defined as a revenue stream that is contractual, typically for a period of 12 months or more, and has a high probability of renewal. The probability of renewal is based on historical revenue experience of the individual revenue streams, or management’s best estimates if historical renewal experience is not available. Organic ARR growth is calculated as the dollar change in ARR between September 30, 2021 and September 30, 2020 and adjusted to exclude the effects of currency translation and acquisitions, divided by ARR as of September 30, 2020. Organic ARR growth, combined with organic sales growth, adjusted EPS, and free cash flow directly link incentive metrics to key company financial goals with a balance between earnings, sales, and capital management.

The Committee uses the Company’s annual operating plan as the basis for setting goals for adjusted EPS, organic sales growth, free cash flow, and organic ARR growth under our incentive compensation plans. The ICP financial goals for fiscal 2021 are shown below. The Committee determined that meeting these goals would require significant effort and achievement on the part of the management team and all Company employees in the continued execution of our strategy. Target goals for adjusted EPS and organic sales growth were set at the midpoint of external guidance and higher than the performance levels achieved in fiscal 2020. Moreover, the Committee determined that no payments would be made under the ICP if adjusted EPS was less than $7.60—regardless of performance against any of the other financial goals. The Committee determined that the organic ARR growth of 25% and free cash flow goal of $1,043 million, set at 103% of adjusted income, were appropriate based on economic conditions and long-term sales growth expectations.

Beginning in fiscal 2021, the Company has changed its adjusted EPS definition to exclude the impact of purchase accounting depreciation and amortization attributable to Rockwell Automation, Inc. and the related tax effects of such exclusion ($0.28 in fiscal 2021). We believe this new definition provides more useful information about our operating performance and allows management and investors to better compare our operating performance period over period, given our increased inorganic investments.

While achieving our financial goals is extremely important in determining our annual incentive compensation, the ICP award process was refined in 2021 to include an adjustment based on strategic company goal performance. In 2021, our strategic goals were focused on organizational development and our cultural evolution that are foundational to driving business results and are inclusive of environmental, social, and governance (ESG) goals. Having the right environment where all people can be engaged and productive is critical to our success. A positive or negative ten percent adjustment to the fiscal 2021 annual ICP formula payout based on financial measure performance could be made based on the CEO and Committee’s assessment of progress made in four tenets of our culture: strengthening our commitment to

 

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and demonstration of integrity, diversity, equity and inclusion, comparing ourselves to the best alternatives, increased speed of decision making, and ensuring a steady stream of fresh ideas. Additionally, the Committee can adjust the NEO payout based on individual performance downwards to zero or upwards to two times the NEOs target annual incentive amount.

2021 PERFORMANCE AND PAYOUT RESULTS

The following table shows the 2021 Company financial goals used to determine award payouts under our ICP for fiscal 2021 and our performance compared to those goals. Based on our above target performance of adjusted EPS, organic sales growth, and free cash flow performance, and progress toward our new organic ARR growth measure, we have 2021 ICP plan performance of 134.1% of target incentive for our NEOs.

As noted above, the ICP award process was refined to include an adjustment based on strategic company goal performance. In 2021, we made progress on all four of our culture tenets. In particular, our attraction and integration of new talent, including executive leaders and talent from recent acquisitions, demonstrated a successful focus on ensuring we have a steady stream of fresh ideas. Given the impact this progress had on our fiscal year 2021 results and how it positions us well for the future, upon recommendation of our CEO, the Committee made a positive adjustment of 5% of target to the calculated FY 2021 Incentive Plan Performance for all of our ICP plan participants, including our NEOs. This adjustment highlights the importance of our culture to delivering our strategy. No other individual NEO payout adjustments were made in 2021.

 

 

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The following table includes the fiscal 2021 incentive payment calculations for our NEOs. Mr. Etzel is excluded as he received a one-time bonus of $480,000 as part of his interim assignment as SVP & Chief Financial Officer. Mr. Goris was not eligible because of his termination on November 13, 2020.

LONG-TERM INCENTIVES (LTI)

The principal purpose of our long-term incentives is to reward management for creating shareowner value and to align the financial interests of management and shareowners. The creation of shareowner value is important not only in absolute terms, but also relative to the value created as compared to other investment alternatives available to our shareowners. The Committee approves annual LTI awards for the CEO and executive officers, including the other NEOs, by individual and the CEO recommends to the Committee the LTI awards for other employees in total as a group.

As a critical element of our executive compensation program, at-risk long-term incentives make up the largest component of total pay for our NEOs. In fiscal 2021, the overall structure of our LTI program for executives continued to have three components but the allocation of stock options, performance shares, and restricted stock was adjusted to the following percentages of the total LTI value:

This allocation of LTI awards considers a review of market practice for our Peer Groups, our pay-for-performance philosophy, and strong emphasis on creating shareowner value and attracting and retaining talent.

We generally make LTI awards near the beginning of each fiscal year at the same time the Committee performs its annual management performance evaluation and takes other compensation actions. Annual LTI awards for officers occur on the same date as annual LTI awards for our other professional and managerial employees. As the grant date for our annual LTI awards generally occurs on the day the Committee meets in the first quarter of our fiscal year, the grant date is set in advance when the schedule of Committee meetings is arranged. We do not grant LTI awards in anticipation of the release of material non-public information. Similarly, we do not time the release of information based on LTI award grant dates.

We occasionally award LTI awards to new executives as they are hired or promoted during the year. These awards are approved by the Committee or through CEO delegation, and the award date is the date the award is approved or, if later, the start date for a new executive or promotion date.

In determining the fiscal 2021 LTI awards for the NEOs, the following factors were considered:

 

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The following table includes the aggregate grant date fair value of awards granted in fiscal 2021. These amounts were determined using the valuation method described in the Grants of Plan-Based Awards Table. Mr. Moret received an LTI award that was 15% higher than prior year because of his leadership and competencies demonstrated in the role and his position to market median of our Compensation Peer Group. Messrs. Gangestad and Genereux were hired March 1, 2021 and February 1, 2021, respectively, and amounts below reflect LTI awards upon hire of restricted stock units that vest in three equal increments at one, two, and three years after the grant date. The awards for Messrs. Gangestad and Genereux were required to induce them to join the Company and were intended to recognize they did not participate in the Company’s fiscal 2021 annual LTI awards delivered December 2020. Ms. House received a one-time LTI award of $300,000 of restricted shares that vest three years after the award date in recognition of her promotion to Chief People & Legal Officer in addition to her annual LTI award of $1.2 million. Mr. Etzel received an LTI award of restricted stock in recognition of his agreement to delay his retirement to serve as interim SVP & Chief Financial Officer after Mr. Goris terminated from this role on November 13, 2020. Mr. Etzel’s LTI award vested on October 31, 2021, which was six months after his April 30, 2021 retirement.

STOCK OPTIONS

We believe that stock options are an appropriate vehicle to reward management for increases in shareowner value, as they provide no value unless our share price increases. Our stock option grants vest in three equal increments one, two, and three years after the grant date, and have a 10-year life. The exercise price of all stock options is the fair market value of our stock at the close of trading on the date of the grant. We do not reprice stock options, and it is prohibited by our long-term incentive plan.

PERFORMANCE SHARES

Performance shares are designed to reward management for our relative TSR performance compared to our benchmarks over a three-year period. The payouts of performance shares granted will be made in shares of our common stock or cash, as determined by the Committee, and will range from 0% to 200% of the target number of shares awarded. The performance shares are not eligible for dividends.

For performance shares awarded in fiscal 2021, we changed our relative performance benchmark group index to include companies that are more aligned with the Company’s strategic direction as indicated below. We also updated the payout formula, as summarized below, to align more closely to our Compensation Peer Groups’ prevalent practices to ensure we can attract and retain talent. The number of shares earned will be interpolated for results between those percentiles. If performance shares are earned but absolute TSR is negative, the number of shares earned will be capped at target.

 

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For performance shares awarded in fiscal 2019 and 2020, our relative TSR performance is compared to the S&P 500 Index and payout formula, as shown below. The number of shares earned will be interpolated for results between those percentiles. If performance shares are earned but absolute TSR for the three-year period is negative, the number of shares earned will be reduced by 50%.

2019-2021 PERFORMANCE SHARE PAYOUT RESULTS

For the performance period from October 1, 2018, to September 30, 2021, our three-year TSR of 74.4% was at the 67^th percentile of the companies in the S&P 500 Index, above the target 60^th percentile, resulting in 144% of the target number of performance shares being earned. See footnote 4 to the Outstanding Equity Awards at Fiscal Year-End Table for information about the number of shares earned by the NEOs.

The following line graph compares the cumulative TSR of our common stock against the cumulative total return of the S&P 500 Index for the three-year period from October 1, 2018, to September 30, 2021, assuming in each case a fixed investment of $100 at the respective closing prices on September 30, 2018, and reinvestment of all dividends. Our cumulative three-year performance outpaced the S&P 500 Index, over the same period.

 

The cumulative total returns on Rockwell Automation common stock and the S&P 500 Index as of each September 30 plotted in the above graph are as follows:

We believe the TSR we have delivered, and the payout history of our long-term incentive plan demonstrates our pay-for-performance philosophy and our emphasis on long-term incentives that are aligned with the interest of shareowners.

RESTRICTED STOCK

We grant restricted shares primarily to attract and retain high quality executives.

We previously granted shares of restricted stock that cliff-vested after three years, if continuously employed through the vesting date, and paid dividends quarterly in cash at the same time dividends were paid to shareowners. Effective with our annual awards granted on December 10, 2020, we grant restricted stock units that vest in three equal increments at one, two, and three years after the grant date. The restricted stock units accrue dividend equivalents that are paid in cash upon vesting of the underlying shares. We believe these changes align to prevalent market practice and better position us to attract and retain talent.

 

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OUTSTANDING LTI AWARDS

Below includes a summary of our outstanding LTI awards granted during the last three years.

 

PERQUISITES

During fiscal 2021, our officers received a very limited perquisite package that included personal liability insurance, annual physicals, and, if applicable, recreational activities at Board retreats, relocation assistance, expatriate benefits, and personal use of the Company plane. Upon retirement, officers may elect to continue the personal liability insurance coverage at their own expense. On occasion, and with the approval of our CEO, officers may have a family member accompany them on the Company plane when traveling on business. Personal use of the Company plane is generally prohibited; however, during fiscal 2021, Mr. Moret had three personal use trips to minimize the health risks during the COVID-19 pandemic. In line with our policy, Mr. Moret incurred taxable income for that travel. We do not in any way compensate officers for any income tax owed for personal travel.

OTHER

Our NEOs receive the same benefits as other eligible U.S. salaried employees. They participate on the same basis as other eligible U.S. salaried employees in our health and welfare plans, pension plan and 401(k) savings plan. Our non-qualified pension and savings plans use the same formulas as our qualified plans and provide benefits that may not be paid under our qualified plans due to limitations under the Internal Revenue Code of 1986, as amended (the “Code”). Our deferred compensation plan offers investment measurement options similar to those in our 401(k) savings plan and does not have any guaranteed rates of return.

The Compensation and Talent Management Committee engages Willis Towers Watson annually to conduct a review of all of our compensation programs relative to the potential for incentives to motivate excessive risk-taking in a way that could materially affect the Company. Willis Towers Watson reviews the measures used in each program, the target-setting process, and the overall governance of our compensation plans. The 2021 review concluded that we have strong governance procedures and that our plans do not present a material risk to the Company or encourage excessive risk-taking by participants.

 

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Willis Towers Watson determined our compensation programs do not encourage our executives to take excessive risk due to, among many considerations, the following plan design elements:

Based on our shareowner advisory vote on executive compensation, as well as input gained during shareowner outreach, the Compensation and Talent Management Committee determined that our current executive compensation program is well aligned with shareowner interests and expectations.

PEER GROUP

Following a rigorous process review of our Compensation Peer Group, led by Willis Towers Watson, the Compensation and Talent Management Committee removed Regal Beloit and Vishay Intertechnology from the 2022 peer group to better align our peer group with our Company’s revenue and market capitalization. Additions to the 2022 peer group include Palo Alto Networks to increase the peer group focus on the Systems and Software industry sector in alignment with the business strategy and Emerson Electric Co. as a direct competitor for talent.

BASE SALARY

The salaries for NEOs, excluding Messrs. Moret, Etzel and Goris, were increased 3.25% effective on January 3, 2022, consistent with the merit increases for all employees.

ANNUAL INCENTIVE COMPENSATION

For fiscal 2022, NEOs annual incentive compensation measures will be subject to ICP financial measures that remain the same as in fiscal 2021 as explained above.

In fiscal 2022, there were no changes in the annual incentive compensation target as a percentage of base salary for our NEOs except for Mr. Moret who was increased from 140% to 150% by the Committee. Target amounts will generally be earned under our ICP if we achieve our financial goals for the year, and maximum payouts will be earned if we significantly exceed the goals. In determining the payout curves, the Committee considered:

The Committee determined that no payments will be made under the ICP if Adjusted EPS is less than $9.20—regardless of performance against any of the other financial measures.

While achieving our financial goals is extremely important in determining our annual incentive compensation, the 2022 ICP award process will continue to include an adjustment based on strategic company goal performance. In 2022, our strategic goals will continue to be focused on organizational development and our cultural evolution that are foundational to driving business results and are inclusive of environmental, social, and governance (ESG) goals. Having the right environment where all people can be engaged and productive is critical to our success. A positive or negative ten percent adjustment to the fiscal 2022 annual ICP formula payout based on financial measure performance could be made based on the CEO and Committee’s assessment of progress made in four tenets of our culture: strengthening our commitment to and demonstration of integrity, diversity, equity and inclusion, comparing ourselves to the best alternatives, increased speed of decision making, and ensuring a steady stream of fresh ideas. Additionally, the Committee can adjust the NEO payout based on individual performance downwards to zero or upwards to two times the NEOs target annual incentive amount.

 

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LONG-TERM INCENTIVES

In fiscal 2022, the overall structure of our long-term incentive program for executives will continue to have three components and remain unchanged from fiscal 2021. At its December 2021 meeting, the Committee approved the following annual grants of equity awards to the NEOs for fiscal 2022:

We calculated the number of options, performance shares, and restricted stock units using the closing price of our common stock of $350.76 on the December 7, 2021, grant date. The exercise price of options continues to be the closing price on the date of the grant. The awards have terms and conditions as described in the Long-Term Incentives section above.

CHANGE OF CONTROL AND SEVERANCE

We have change of control agreements with each of the NEOs and certain other officers. Our current agreements are effective if there is a change of control (as defined in the agreements) on or before September 30, 2022. These agreements are reviewed and renewed every three years.

For a description of the purpose and value of the change of control agreements, see “Potential Payments Upon Termination or Change of Control.”

We do not have severance agreements in place with the NEOs for terminations other than those covered by our change of control agreements. However, we have at times entered into severance agreements with executives in connection with the termination of their employment, with the terms and conditions depending upon the individual circumstances of the termination, the transition role we expect from the executive, and the Company’s best interests.

STOCK OWNERSHIP POLICY

We believe our focus on pay for performance is sharpened by aligning the long-term financial interests of our officers with those of our other shareowners. Accordingly, our stock ownership policy sets the following minimum ownership requirements for our officers. Our policy requires the following ownership requirement for our NEOs:

Officers must meet the ownership requirement within five years. There is also a hold-until-met requirement that prohibits an officer below the ownership guideline from selling his or her shares of stock, except for sales to cover taxes, the exercise price of stock options, and transaction costs. In addition, the policy expressly encourages officers to use Rule 10b5-1 trading plans for transactions involving sales of Company common stock.

Effective October 27, 2021, the Board adopted an updated stock ownership policy that excludes stock option value in determining stock ownership. Shares owned directly (including restricted shares and restricted stock units) or through our savings plans (including share equivalents under our non-qualified savings plans) are considered in determining whether an officer meets the ownership requirements.

As of September 30, 2021, all NEOs met the stock ownership requirements, regardless of the exclusion of stock option values.

OFFICER TRADING RESTRICTIONS

Under our trading procedures, an officer may not engage in any transactions involving Company securities, including gifts and option exercises, without first obtaining pre-clearance of the transaction from our Chief People and Legal Officer or Assistant Secretary. Generally, trading is only permitted during announced trading periods. Employees subject to trading restrictions, including officers, may enter into a trading plan under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that would allow trades outside a trading period. Our policy on Rule 10b5-1 trading plans requires (i) plans to be entered into during an open trading window, (ii) trades to occur during a trading window unless the plan uses a limit price or is used to pay taxes on equity vesting outside a window, (iii) a 60-day wait before the first trade can occur (unless the trade is to cover taxes on equity vesting before then), and (iv) Company approval. Plans can be amended only during an open trading window and cannot be terminated except in extraordinary circumstances, subject in both cases to approval by our Chief People and Legal Officer.

 

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We also have an anti-hedging policy that prohibits employees from engaging in any transaction that is designed or intended to hedge or otherwise limit exposure to decreases in the market value of Company stock, and an anti-pledging policy that prohibits officers from pledging Company securities.

RECOUPMENT POLICY, CLAWBACKS AND OTHER POST-EMPLOYMENT PROVISIONS

Our recoupment policy applies to current and former officers subject to Section 16 of the Exchange Act and includes a three-year lookback for incentive compensation from the time of a material restatement if a recoupment is required. Under the policy, in the event of a material restatement of our consolidated financial statements (other than any restatement required pursuant to a change in the applicable accounting rules), our Compensation and Talent Management Committee may, to the extent permitted by law and to the extent it determines that it is in our best interest to do so, require reimbursement or payment to us of the excess amount of any incentive compensation received by the officer during the three fiscal years preceding the date on which the Company determines, or reasonably should have determined, such restatement is required, over the amount of incentive compensation that would have been received by the officer had it been based on the restated financial statements or restated performance measure results.

The Compensation and Talent Management Committee believes that the Company’s clawback policy is in keeping with good standards of corporate governance and mitigates the potential for excessive risk taking by Company executives.

Additionally, our equity award agreements contain certain post-employment restrictive covenants, including two-year non-competition and non-solicitation covenants, that give the Company the right, in the event of a breach, to recoup the gain on any shares of Company common stock acquired during the two years before the date of the officer’s retirement or other termination of employment.

DEDUCTIBILITY

The Tax Cuts and Jobs Act of 2017 enacted significant changes to Section 162(m) of the Code, including the repeal of the “performance-based” compensation exemption and the expansion of the definition of “covered employees”. As a result of these changes, we expect that compensation to NEOs in excess of $1 million will not be deductible by the Company unless it qualifies for limited transition relief that applies to certain arrangements in place as of November 2, 2017, that have not been materially modified.

 

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SUMMARY COMPENSATION TABLE

The following table sets forth the total compensation of each of the NEOs for the fiscal years ended September 30, 2021, 2020 and 2019.

Name and Principal Position	Year	Salary(1) ($)		Bonus(2) ($)		Stock Awards(3) ($)		Option Awards(4) ($)		Non-Equity Incentive Plan Compensation(5) ($)		Change in Pension Value and Nonqualified Deferred Compensation Earnings(6) ($)		All Other Compensation(7) ($)		Total ($)
Blake D. Moret President & Chief Executive Officer	2021		1,111,502		0		4,551,639		1,952,544		2,266,600		3,572,868		128,317		13,583,470
	2020		1,030,769		0		3,133,316		2,520,180		0		2,595,298		93,092		9,372,656
	2019		1,123,103		0		2,806,825		2,251,076		1,105,600		4,344,133		79,428		11,710,165
Nicholas C. Gangestad(8) Senior Vice President & Chief Financial Officer	2021		472,031		750,000		4,000,997		0		649,100		0		114,994		5,987,122
Scott A. Genereux Senior Vice President, Chief Revenue Officer	2021		400,000		300,000		2,000,016		0		445,200		0		38,844		3,184,060
Rebecca W. House Senior Vice President, Chief People & Legal Officer & Secretary	2021		588,207		0		1,142,458		360,555		687,800		0		57,602		2,836,622
	2020		522,733		0		562,063		452,340		0		0		54,933		1,592,069
	2019		526,013		0		563,291		452,167		274,900		0		71,873		1,888,244
Frank C. Kulaszewicz Senior Vice President Lifecycle Services	2021		687,124		0		911,315		391,064		803,400		716,528		30,470		3,539,901
	2020		650,962		0		729,160		585,170		0		1,194,468		23,545		3,183,306
	2019		677,397		0		730,352		585,540		410,000		1,905,302		33,347		4,341,938
Steven W. Etzel(8) Former Senior Vice President & Chief Financial Officer	2021		341,383		480,000		601,848		0		0		1,002,971		10,633		2,436,835
Patrick P. Goris(8) Former Senior Vice President & Chief Financial Officer	2021		75,811		0		0		0		0		0		500		76,311
	2020		556,161		0		952,414		768,260		0		442,380		26,266		2,745,481
	2019		566,734		0		787,645		631,082		329,700		583,394		32,075		2,930,630
(1) For Messrs. Etzel and Goris, amount includes an accrued vacation payout due to their separation from the Company, in addition to fiscal 2021 salary paid. (2) Amounts in this column represent the cash sign-on bonus upon hire inclusive of two-year clawback upon certain terminations for Messrs. Gangestad and Genereux and the fiscal 2021 cash payment as part of interim assignment for Mr. Etzel. (3) Amounts in this column represent the grant date fair value of restricted stock and performance share awards granted calculated in accordance with U.S. GAAP. The grant date fair value of restricted stock was $251.24, $247.68, $246.77, $219.52, $196.43, and $171.46 per share for March 1, 2021, February 1, 2021, December 10, 2020, October 1, 2020, December 5, 2019, and December 4, 2018, respectively. Performance share awards are valued at the target number of shares with a grant date fair value of $298.10, $265.04, and $155.04, for 2021, 2020, and 2019, respectively. The assumptions applicable to these valuations are set forth in Note 13, Share-Based Compensation, to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. The amounts shown may not correspond to the actual value that may be realized by the NEOs. If the performance share awards are valued at two times the target number of shares (the maximum potential payout), then for fiscal 2021 the stock award amount would increase by $2,600,923, $520,185, and $481,432, for Messrs. Moret and Kulaszewicz and Ms. House, respectively. For additional information on awards made in fiscal 2021, see the Grants of Plan-Based Awards Table and Outstanding Equity Awards at Fiscal Year-End Table. (4) Amounts in this column represent the grant date fair value of option awards granted calculated in accordance with U.S. GAAP. The grant date fair value was $55.47, $35.90, and $32.53 per share for December 10, 2020, December 5, 2019, and December 4, 2018, respectively. The assumptions applicable to these valuations are set forth in Note 13, Share-Based Compensation, to our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021. The amounts shown may not correspond to the actual value that may be realized by the NEOs. For additional information on awards made in fiscal 2021, see the Grants of Plan-Based Awards Table and Outstanding Equity Awards at Fiscal Year-End Table. (5) This column represents amounts paid under our ICP for performance in the fiscal year. For more information about our ICP, see the “Compensation Discussion and Analysis” and Grants of Plan-Based Awards Table.

 

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The following table describes each element of the All Other Compensation column in the Summary Compensation Table for fiscal 2021.

 

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GRANTS OF PLAN-BASED AWARDS TABLE

The following table provides information about equity and non-equity awards made to the NEOs in fiscal 2021. Mr. Goris terminated his employment November 13, 2020 and did not earn fiscal 2021 Non-Equity Incentive Plan or Equity Incentive Plan Awards so is excluded from this table.

 

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

The following table provides information about equity awards made to the NEOs that are outstanding as of September 30, 2021. Mr. Goris terminated his employment November 13, 2020 and forfeited his unvested Option and Stock Awards so is excluded from this table.

 

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OPTION EXERCISES AND STOCK VESTED TABLE

The following table provides additional information about stock option exercises and shares acquired upon the vesting of stock awards, including the value realized, during the fiscal year ended September 30, 2021 by the NEOs. Messrs. Gangestad and Genereux began employment during fiscal year 2021 so are excluded from this table.

 

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PENSION BENEFITS TABLE

The following table shows the present value of accumulated benefits as of September 30, 2021 payable to the NEOs under the Rockwell Automation Pension (Qualified) Plan and Rockwell Automation Pension (Non-Qualified) Plan based on the assumptions described in footnote 1 to this table.

The NEOs, excluding Messrs. Gangestad and Genereux and Ms. House, participate in two pension plans with the same requirements and benefits as other employees: the Rockwell Automation Pension Plan (the Qualified Pension Plan), which is qualified under the Code, and the Rockwell Automation Non-Qualified Pension Plan (the Non-Qualified Pension Plan), which is an unfunded, non-qualified plan. The Qualified Pension Plan provides retirement benefits to nearly all U.S. employees of the Company hired before July 1, 2010. The Qualified Pension Plan and the Non-Qualified Pension Plan were closed to new participants hired or re-hired on or after July 1, 2010. In place of becoming a participant in the Qualified Pension Plan and, if applicable, the Non-Qualified Pension plan, employees hired or re-hired on or after July 1, 2010, including Messrs. Gangestad and Genereux and Ms. House, are eligible for an NEC in the Qualified and, if applicable, Non-Qualified Savings Plan. The NEC is based on a combination of age and service and the percentage contribution is outlined in the Non-Qualified Savings Plan section below. The NEC formula is the same for both the Qualified Savings Plan and the Non-Qualified Savings Plan.

The Non-Qualified Pension Plan provides benefits that may not be paid from the Qualified Pension Plan due to limitations imposed by the Code on qualified plan benefits. Non-Qualified Pension Plan benefits are provided to any U.S. salaried employee whose benefits are affected by these limits. Our policy with respect to funding our pension obligations is to fund at least the minimum amount required by applicable laws and governmental regulations. We maintain a rabbi trust for our non-qualified plans, including the Non-Qualified Pension Plan, which we will fund in the event there is a change of control of the Company.

Effective January 1, 2011, the pension plans were amended to allow participants to elect a lump sum payment instead of an annuity option offered under the plans. The present values in the above table are determined based on assumptions required by SEC rules, which are different from those used to calculate the lump sum payment under the plans. Note that due to Code Section 409A regulations, if an NEO elected to receive his or her benefit from the Non-Qualified Plan in the form of a lump sum, he or she would not be eligible to receive the lump sum payment for at least five years.

For employees hired before July 1, 2010, benefits provided by both the Qualified Pension Plan and the Non-Qualified Pension Plan have the same requirements for vesting, which occurs at five years of service credit. Benefits in both plans are determined using the same formula. Named executive officers do not receive any additional service or other enhancements in determining the form, timing or amount of their benefits.

 

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The reduction for early retirement benefits is determined using an actuarial equivalence with an applicable interest rate and mortality table. Currently, Messrs. Moret and Kulaszewicz have met the eligibility requirements for early retirement with a reduced benefit.

 

 

Average monthly earnings represent the monthly average of the participant’s pensionable earnings for the highest five calendar years during the last 10 calendar years while the participant was actively employed. A participant’s earnings used for calculating pension plan benefits (pensionable earnings) include base salary and annual incentive compensation awards. Awards of stock options, restricted stock, performance shares and performance-based long-term cash awards, and all other cash awards are not considered when determining pension benefits.

 

 

Disability pension benefits are available under the Qualified Pension Plan and the Non-Qualified Pension Plan to active employees before age 65 upon total and permanent disability if the participant has at least 15 years of credited service or at least 10 years of credited service with 70 points or more (age plus credited service is equal to or greater than 70). The benefit is generally calculated in the same manner as the normal retirement benefit.

 

 

 

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NON-QUALIFIED DEFERRED COMPENSATION

The following table provides information on our non-qualified defined contribution and other non-qualified deferred compensation plans in which all eligible U.S. salaried employees, including the NEOs, participate, which consist of the following:

 

 

Our U.S. employees, including the NEOs, whose earnings exceed certain applicable federal limitations on compensation that may be recognized under our Qualified Savings Plan, are entitled to defer earnings on a pre-tax basis to the Non-Qualified Savings Plan. Company matching contributions that cannot be made to the Qualified Savings Plan due to applicable federal tax limits are also made to the Non-Qualified Savings Plan. Under the Qualified Savings Plan, we match half up to 7% of the employee’s eligible earnings contributed to the plan each pay period, subject to a maximum amount of earnings under applicable federal tax regulations. Company matching contributions to the Non-Qualified Savings Plan were suspended for all plan participants effective April 27, 2020 and reinstated effective December 7, 2020. In addition, on December 7, 2020, the Company made a one-time voluntary NEC of $500 to U.S. based employees eligible to participate in the Rockwell Savings plan as of September 30, 2020, which includes Messrs. Moret, Kulaszewicz, Etzel, Goris, and Ms. House. Earnings under the Non-Qualified Savings Plan are credited to participant accounts on a daily basis in the same manner as under the Qualified Savings Plan. Investment options are selected by the participant, may be changed daily, and include the same fund and Company stock investments that are offered by the Qualified Savings Plan. No preferential interest or earnings are provided under the Non-Qualified Savings Plan. Account balances under the Non-Qualified Savings Plan are distributed in a lump-sum cash payment within 60 days after the end of the month occurring six months, or five years if elected, after the employee terminates employment or retires.

In addition to the Company matching contributions, an NEC is provided for employees hired or rehired on or after July 1, 2010. If employed on the last day of the year, eligible employees receive an annual NEC benefit equal to eligible pay multiplied by a percentage based on “points”, which equal the sum of age and years of service as of each December 31 and based on the following chart. The NEC is provided by the end of the first quarter of the following year.

All NEOs, except for Messrs. Gangestad and Genereux and Ms. House, were hired before July 1, 2010 and are not eligible for an NEC. Ms. House received a total NEC of $21,709 during fiscal 2021 in her Qualified and Non-Qualified Savings Plans. Messrs. Gangestad and Genereux will be eligible for their first NEC payment in fiscal 2022.

 

 

Our U.S. salaried employees in career band E, including the NEOs, may elect annually to defer up to 50% of base salary and up to 100% of their annual incentive compensation award to the Deferred Compensation Plan.

 

MATCHING

For participants who defer base salary to the plan, we provide a matching contribution equal to what we would have contributed to the Qualified Savings Plan or Non-Qualified Savings Plan for the deferred amounts.

 

DISTRIBUTION ELECTIONS

 

TIMING OF DISTRIBUTIONS

 

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NON-QUALIFIED DEFERRED COMPENSATION TABLE

 

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

The tables and narrative below describe and quantify compensation that would become payable to the NEOs under existing plans and arrangements if the NEO’s employment had terminated on September 30, 2021, for the reasons set forth below. We do not have employment agreements with the NEOs but do have change of control agreements with the NEOs and certain other officers. There are two main purposes of these agreements.

 

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In short, the change of control agreements seek to ensure that we may rely on key executives to continue to manage our business consistent with our best interests despite concerns for personal risks. We do not believe these agreements encourage our executives to favor or oppose a change of control. We believe these agreements strike a balance that the amounts are neither so low to cause an executive to oppose a change of control nor so high as to cause an executive to favor a change of control. In addition, we have at times entered into severance agreements with executive officers in connection with the termination of their employment, with the terms and conditions depending on the individual circumstances of the termination, the transition role we expect from the officer and our best interests. The information set forth below does not include payments and benefits to the extent they are provided on a non-discriminatory basis to salaried employees upon termination of employment, including unused vacation pay, distributions of balances under savings and deferred compensation plans and accrued pension benefits. The information set forth below also does not include any payments and benefits that may be provided under severance arrangements that may be entered into with any NEO upon termination of their employment.

We have change of control agreements with Mr. Moret, each of the other NEOs and certain other officers. These agreements become effective if there is a change of control (as defined in the agreements) on or before September 30, 2022. Each agreement provides for the continuing employment of the executive for two years after the change of control on conditions no less favorable than those in effect before the change of control. If the executive’s employment is terminated by us without “cause” or if the executive terminates his or her employment for “good reason” (such as, diminution of responsibilities or a relocation) within that two-year period, each agreement entitles the executive to:

The agreements do not include a provision that entitles the executives to receive tax gross-ups related to any excise tax imposed on change of control agreements. In each change of control agreement, the executive agreed to certain confidentiality provisions.

Under the change of control agreements, a change of control would include any of the following events:

The following table provides details with respect to potential post-employment payments to the NEOs, excluding Messrs. Etzel and Goris who terminated during fiscal 2021, under our change of control agreements in the event of separation due to a change of control of the Company, assuming a termination covered by the change of control agreement occurred on September 30, 2021.

 

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The following table sets forth the treatment of equity-based awards upon termination of employment for the following reasons:

 

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RATIO OF ANNUAL COMPENSATION FOR THE CEO TO OUR MEDIAN EMPLOYEE

As required in Item 402(u) of Regulation S-K, we have estimated the ratio of the 2021 annual total compensation of our CEO to the annual total compensation of our median employee was 230 to 1, calculated as follows:

As a global organization, approximately 61% of our 24,500 employees were located outside of the United States as of September 30, 2021. The countries with our largest number of employees are the United States, Mexico, China, and Poland. Consistent with our executive compensation program, our global compensation program is designed to be competitive in terms of both the position and the geographic location in which an employee is located. We have an Annual Employee Incentive Plan that covers the majority of our non-executive or non-sales employees worldwide and is linked to certain of the executive ICP financial metrics (adjusted EPS, organic sales growth, and organic ARR growth). Additionally, the majority of our employees worldwide participate in either a Company defined-contribution or defined-benefit pension plan, a mandatory plan, or combination of these.

We identified our median employee based on target cash compensation (base salary including overtime, if applicable, plus target annual cash incentive) of all our employees as of September 30, 2021. The median employee was employed in the United States. He was eligible for an NEC in the Qualified Savings Plan and does not participate in the Qualified Pension Plan that was closed to entrants hired or re-hired on or after July 1, 2010, as described under the Pension Benefits Table above. We calculated the median employee’s compensation under the Summary Compensation Table rules and compared that to the annual total compensation of our CEO, as disclosed in the Summary Compensation Table.

 

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AUDIT MATTERS

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the Company’s independent auditor. The Audit Committee annually evaluates the qualifications, performance and independence of the Company’s independent auditor and considers whether there should be a change of the independent audit firm and potential impact of making a change. The Audit Committee has selected the firm of Deloitte & Touche LLP (D&T) as our independent registered public accounting firm for the fiscal year ending September 30, 2022 (the D&T appointment), subject to the approval of our shareowners. D&T and its predecessors have acted as the independent registered public accounting firm for the Company and its corporate predecessors since 1934, and for the Company and its accounting predecessors since 1967.

The Audit Committee reviews all non-audit services that the independent auditor may provide and conducts regular private sessions with the independent auditor. This review includes consideration of whether any non-audit services provided by the independent auditor are compatible with maintaining the firm’s independence.

The Audit Committee annually reviews and evaluates the lead audit partner and is involved in the process of the independent audit firm’s selection of a new lead audit partner when rotation is required after 5 years under the SEC’s audit partner rotation rules. This year a new lead audit partner was selected as required by these rules effective for fiscal 2022. The selection process includes a meeting between the Chair of the Audit Committee and the candidate for lead audit partner as well as discussion by the full Audit Committee and with management.

Company policy generally restricts the hiring of certain individuals who have been employed by the independent auditor until after a two year “cooling off” period, which is more restrictive than regulatory requirements. We understand the need to maintain the independence of the Company’s independent auditor both in appearance and in fact.

Before the Audit Committee selected D&T as its auditors for fiscal 2022, it carefully considered the independence and qualifications of that firm, including their performance in prior years, their tenure as our independent auditors, the appropriateness of their fees, and their reputation for integrity and for competence in the fields of accounting and auditing, with input from management on their assessment of D&T’s performance. Based on this evaluation, the Audit Committee believes it is in the best interests of the Company and its shareowners for D&T to continue as its independent auditors for fiscal 2022.

We expect that representatives of D&T will attend the Annual Meeting to answer appropriate questions and make a statement if they desire to do so.

 

 

 

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The following table sets forth the aggregate fees for services provided by D&T for the fiscal years ended September 30, 2021 and 2020 (in millions), all of which were approved by the Audit Committee:

 

 

The Audit Committee is responsible for appointing, compensating and overseeing the work performed by D&T and audit services performed by other independent public accounting firms. The Audit Committee pre-approves all audit (including audit-related) services provided by D&T and others and permitted non-audit services provided by D&T in accordance with its pre-approval policies and procedures.

The Audit Committee annually approves the scope and fee estimates for the year-end audit of the Company, statutory audits and employee benefit plan audits. The Audit Committee receives reports from the Company’s Chief Financial Officer and Controller on the appropriateness of the audit engagement fees and meets separately with management and the independent auditor to discuss and review the fees prior to engagement.

With respect to other permitted services to be performed by our independent registered public accounting firm, the Audit Committee has adopted a policy pre-approving certain categories and specific types of audit and non-audit services that may be provided by our independent registered public accounting firm on a fiscal year basis, subject to individual and aggregate monetary limits. The policy requires the Company’s Controller or Chief Financial Officer to pre-approve the terms and conditions of any engagement under the policy. The Audit Committee must specifically approve any proposed engagement for an audit or non-audit service that does not meet the guidelines of the policy. The Audit Committee also authorized the Chair of the Audit Committee to pre-approve any individual service not covered by the general pre-approval policy, with any such approval reported by the Chair at the next regularly scheduled meeting of the Audit Committee. The Audit Committee annually reviews and approves the categories of pre-approved services and monetary limits under the pre-approval policy. The Company’s Controller reports to the Audit Committee regarding the aggregate fees charged by D&T and other public accounting firms compared to the pre-approved amounts, by category.

 

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AUDIT COMMITTEE REPORT

The Audit Committee assists the Board in overseeing and monitoring the integrity of the Company’s financial reporting processes, its internal control and disclosure control systems, the integrity and audits of its financial statements, the Company’s compliance with legal and regulatory requirements, the qualifications and independence of its independent registered public accounting firm and the performance of its internal audit function and independent registered public accounting firm.

Our Committee’s roles and responsibilities are set forth in a written Charter adopted by the Board, which is available on the Company’s website at https://www.rockwellautomation.com under the “Investors” link. We review and reassess the Charter annually, and more frequently as necessary to address any changes in NYSE corporate governance and SEC rules regarding audit committees, and recommend any changes to the Board for approval.

Management is responsible for the Company’s financial statements and the reporting processes, including the system of internal control. Deloitte & Touche LLP (D&T), the Company’s independent registered public accounting firm, is responsible for expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles, and on the Company’s internal control over financial reporting.

Our Committee is responsible for overseeing the Company’s overall financial reporting processes. In fulfilling our responsibilities for the financial statements for fiscal year 2021, we:

We reviewed and approved all audit and audit-related fees and services. For information on fees paid to D&T for each of the last two years, see the section entitled “Proposal to Approve the Selection of Independent Registered Public Accounting Firm” in this proxy statement.

We considered the non-audit services provided by D&T in fiscal year 2021 and determined that engaging D&T to provide those services is compatible with and does not impair D&T’s independence.

In fulfilling our responsibilities, we discussed with D&T the scope and plans for the annual audit and met with the Company’s General Auditor and D&T, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s internal control over financial reporting and the overall quality of the Company’s financial reporting, critical audit matters addressed during the fiscal year, and other matters as are required to be discussed by applicable requirements of the PCAOB and SEC. We considered the status of pending litigation, taxation matters and other areas of oversight relating to the financial reporting and audit processes that we determined appropriate. We discussed with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies. We also met separately with the Company’s Chief Executive Officer, Chief Financial Officer, Controller, Chief People and Legal Officer and Ombuds.

Based on our review of the audited financial statements and the discussions and reports referred to above, we recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2021 for filing with the SEC.

Audit Committee

James P. Keane, Chair
William P. Gipson
Pam Murphy
Patricia A. Watson

 

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STOCK OWNERSHIP INFORMATION

OWNERSHIP OF EQUITY SECURITIES OF THE COMPANY

 

The following table shows the beneficial ownership, reported to us as of November 1, 2021, of our common stock, including shares as to which a right to acquire ownership within 60 days exists, of each director, and each executive officer listed in the table on page 50 (NEOs) and of these persons and other executive officers as a group. On November 1, 2021, we had outstanding 115,983,877 shares of our common stock.

 

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Based on filings made under Sections 13(d) and 13(g) of the Exchange Act on or before December 14, 2021, the following table lists the persons who we believe beneficially owned more than 5% of our common stock as of such date.

 

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OTHER INFORMATION

SUPPLEMENTAL FINANCIAL INFORMATION

This proxy statement contains information regarding organic sales, free cash flow, free cash flow conversion, adjusted income, and adjusted EPS, which are non-GAAP financial measures. This proxy statement also contains information regarding organic annual recurring revenue growth, a key metric.

 

We translate sales of subsidiaries operating outside of the United States using exchange rates effective during the respective period. Therefore, changes in currency exchange rates affect our reported sales. Sales by acquired businesses also affect our reported sales. We believe that organic sales, defined as sales excluding the effects of acquisitions and changes in currency exchange rates, which is a non-GAAP financial measure, provides useful information to investors because it reflects regional and operating segment performance from the activities of our businesses without the effect of acquisitions and changes in currency exchange rates. We use organic sales as one measure to monitor and evaluate our regional and operating segment performance. When we acquire businesses, we exclude sales in the current period for which there are no comparable sales in the prior period. We determine the effect of changes in currency exchange rates by translating the respective period’s sales using the same currency exchange rates that were in effect during the prior year. When we divest a business, we exclude sales in the prior period for which there are no comparable sales in the current period. Organic sales growth is calculated by comparing organic sales to reported sales in the prior year, excluding divestitures.

ROCKWELL ORGANIC SALES GROWTH

	Year Ended September 30, 2021		Year Ended September 30, 2020
Reported sales growth	10.5%		(5.5	)%
Effect of acquisitions	(1.5)%		(3.5	)%
Effect of changes in currency	(2.3)%		1.2	%
Organic sales growth	6.7%		(7.8	)%

 

 

Annual recurring revenue (ARR) is a key metric that enables measurement of progress in growing our recurring revenue business. It represents the annual contract value of all active recurring revenue contracts at any point in time. Recurring revenue is defined as a revenue stream that is contractual, typically for a period of 12 months or more, and has a high probability of renewal. The probability of renewal is based on historical renewal experience of the individual revenue streams, or management’s best estimates if historical renewal experience is not available. Organic ARR growth is calculated as the dollar change in ARR, adjusted to exclude the effects of currency translation and acquisitions, divided by ARR as of the prior period. The effects of currency translation are excluded by calculating Organic ARR on a constant currency basis. When we acquire businesses, we exclude the effect of ARR in the current period for which there was no comparable ARR in the prior period. Organic ARR growth is also used as a financial measure of performance for our annual incentive compensation. Because ARR is based on annual contract value, it does not represent revenue recognized during a particular reporting period or revenue to be recognized in future reporting periods and is not intended to be a substitute for revenue, contract liabilities, or backlog.

ROCKWELL ORGANIC ARR GROWTH

 

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Our definition of free cash flow, which is a non-GAAP financial measure, takes into consideration capital investments required to maintain the operations of our business and execute our strategy. Cash provided by operating activities adds back non-cash depreciation expense to earnings but does not reflect a charge for necessary capital expenditures. Our definition of free cash flow excludes the operating cash flows and capital expenditures related to our discontinued operations, if any. In our opinion, free cash flow provides useful information to investors regarding our ability to generate cash from business operations that is available for acquisitions and other investments, service of debt principal, dividends and share repurchases. We use free cash flow, as defined, as one measure to monitor and evaluate our performance, including as a financial measure for our annual incentive compensation. Our definition of free cash flow may differ from definitions used by other companies.

FREE CASH FLOW (IN MILLIONS) AND FREE CASH FLOW CONVERSION

Adjusted income and adjusted EPS are non-GAAP earnings measures that exclude non-operating pension and postretirement benefit (cost) credit, purchase accounting depreciation and amortization attributable to Rockwell Automation, net income (loss) attributable to noncontrolling interests, and gains and losses on investments, including their respective tax effects.

We believe that adjusted income and adjusted EPS provide useful information to our investors about our operating performance and allow management and investors to compare our operating performance period over period. Adjusted EPS is also used as a financial measure of performance for our annual incentive compensation. Our measures of adjusted income and adjusted EPS may be different from measures used by other companies. These non-GAAP measures should not be considered a substitute for net income attributable to Rockwell Automation, Inc. and diluted EPS.

The following are reconciliations of net income attributable to Rockwell Automation, Inc. and diluted EPS to adjusted income and adjusted EPS, respectively:

ADJUSTED INCOME (IN MILLIONS)

 

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ADJUSTED EPS

 

OTHER MATTERS

The Board does not know of any other matters that may be presented at the meeting. Our by-laws required notice by November 4, 2021, for any matter to be brought before the Annual Meeting by a shareowner. In the event of a vote on any matters other than those referred to in the accompanying Notice of 2022 Annual Meeting of Shareowners, proxies in the accompanying form will be voted in accordance with the judgment of the persons voting such proxies.

 

ANNUAL REPORT

Our Annual Report on Form 10-K, including financial statements and financial statement schedules, for the fiscal year ended September 30, 2021, was mailed with this proxy statement to shareowners who received a printed copy of this proxy statement. A copy of our Annual Report on Form 10-K is available on the internet as set forth in the Notice of Internet Availability of Proxy Materials.

We will send a copy of our Annual Report on Form 10-K to any shareowner without charge upon written request addressed to:

Rockwell Automation, Inc.

Shareowner Relations, E-7F19
1201 South Second Street
Milwaukee, Wisconsin 53204, USA
+1 (414) 382-8410

 

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SHAREOWNER PROPOSALS FOR 2023 ANNUAL MEETING

If a shareowner wants to submit, in accordance with SEC Rule 14a-8, a proposal for possible inclusion in our proxy statement for the 2023 Annual Meeting of Shareowners, the proposal must be received by our Corporate Secretary at the address listed below by August 24, 2022.

Our by-laws provide proxy access to eligible shareowners. The proxy access by-law provides that a shareowner, or group of up to 20 shareowners, that owns 3% or more of the Company’s outstanding common stock continuously for at least three years may submit director nominees for up to the greater of two directors or 20 percent of the Board (provided the shareowner or a group of shareowners and nominees satisfy specified requirements). A shareowner’s notice of nomination of one or more director candidates to be included in the Company’s proxy statement and ballot pursuant to Section 9 of Article II of our by-laws (a proxy access nomination) must be delivered to our principal executive offices no earlier than July 26, 2022 and no later than August 24, 2022 (i.e., no earlier than the 150th day and no later than the 120th day before the anniversary of the date the Company filed its proxy statement for the previous year’s annual meeting with the SEC).

In addition, if a shareowner wants to propose any matter for consideration by the shareowners at the 2023 Annual Meeting of Shareowners, other than a matter brought pursuant to SEC Rule 14a-8 or a proxy access director nomination, or the person the shareowner wants to nominate as a director, our by-laws require the shareowner to notify our Corporate Secretary in writing at the address listed below on or after October 4, 2022 and on or before November 3, 2022. If the number of directors to be elected to the Board at the 2023 Annual Meeting of Shareowners is increased and we do not make a public announcement naming all of the nominees for director or specifying the increased size of the Board on or before October 24, 2022, a shareowner proposal with respect to nominees for any new position created by such increase will be considered timely if received by our Corporate Secretary not later than the tenth day following our public announcement of the increase. The specific requirements and procedures for shareowner proposals to be presented directly at an Annual Meeting are set forth in our by-laws, which are available on our website at www.rockwellautomation.com on the “Investors” page under the heading “Corporate Governance.”

To be in proper form, a shareowner’s notice must include the information about the proposal or nominee as specified in our by-laws.

Notices of intention to present proposals or nominate directors at the 2023 Annual Meeting, and all supporting materials required by our by-laws, must be submitted to:

Rockwell Automation, Inc.

c/o Corporate Secretary
1201 South Second Street
Milwaukee, WI 53204

 

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GENERAL INFORMATION ABOUT THE MEETING AND VOTING

DISTRIBUTION AND ELECTRONIC AVAILABILITY OF PROXY MATERIALS

This year we are once again taking advantage of SEC rules that allow companies to furnish proxy materials to shareowners via the internet. If you received a Notice of Internet Availability of Proxy Materials (Notice) by mail, you will not receive a printed copy of the proxy materials unless you specifically request one. The Notice instructs you on how to access and review this proxy statement and our 2021 Annual Report on Form 10-K as well as how to vote by internet. If you received the Notice and would still like to receive a printed copy of our proxy materials, you should follow the instructions for requesting these materials included in the Notice.

We will mail the Notice to certain shareowners by December 23, 2021. We will continue to mail a printed copy of this proxy statement and form of proxy to certain shareowners and we expect that mailing to begin on December 22, 2021.

 

SHAREOWNERS SHARING THE SAME ADDRESS

SEC rules permit us to deliver only one copy of our annual report and this proxy statement or the Notice to multiple shareowners who share the same address and have the same last name, unless we received contrary instructions from a shareowner. This delivery method, called “householding,” reduces our printing and mailing costs. Shareowners who participate in householding will continue to receive separate proxy cards.

We will deliver promptly upon written or oral request a separate copy of our annual report and proxy statement or Notice to any shareowner who received these materials at a shared address. To receive a separate copy, please write or call Rockwell Automation Shareowner Relations, 1201 South Second Street, Milwaukee, Wisconsin 53204, USA, telephone: +1 (414) 382-8410.

If you are a holder of record and would like to revoke your householding consent and receive a separate copy of our annual report and proxy statement or Notice in the future, please contact Broadridge Financial Solutions, Inc. (Broadridge), either by calling +1 (800) 542-1061 (toll free in the United States and Canada only) or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717, USA. You will be removed from the householding program within 30 days.

Any shareowners of record who share the same address and wish to receive only one copy of future Notices or proxy statements and annual reports for their household should contact Rockwell Automation Shareowner Relations at the address or telephone number listed above.

If you hold your shares in street name with a broker or other nominee, please contact them for information about householding.

 

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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING

WHAT AM I VOTING ON?

You will be voting on whether to:

 

WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING?

Only holders of record of our common stock at the close of business on December 6, 2021, the record date for the meeting, may vote at the Annual Meeting. Each shareowner of record is entitled to one vote for each share of our common stock held on the record date. On December 6, 2021, 116,013,254 shares of our common stock were outstanding and entitled to vote.

 

SHAREOWNER OF RECORD

You are considered a shareowner of record of our common stock if your shares are registered directly in your name with our transfer agent, EQ Shareowner Services (formerly Wells Fargo Shareowner Services).

 

STREET NAME SHAREOWNER

If you hold shares through a bank, broker or other nominee, you are considered a “beneficial owner” of shares held in “street name”. If you hold shares in street name on the record date, you are entitled to vote them through your bank, broker or nominee who will send you these proxy materials and voting instructions.

 

HOW MAY I ATTEND THE ANNUAL MEETING?

Shareowners as of December 6, 2021, the record date, or individuals authorized as their duly appointed proxies, may attend the Annual Meeting. Shareowners of record and street name shareowners will be able to attend the Annual Meeting via live audio webcast, submit their questions during the meeting and vote their shares virtually at the Annual Meeting by visiting www.virtualshareholdermeeting.com/ROK2022. To participate in the Annual Meeting, you will need the control number included on your Notice or proxy card. In addition, a listen-only telephone line is included on your Notice or proxy card.

The Annual Meeting live audio webcast will begin promptly at 5:30 p.m. Central Time on Tuesday, February 1, 2022. We encourage you to access the meeting prior to the start time. Online check-in will begin at 5:15 p.m. Central Time, and you should allow ample time for the check-in procedures.

 

HOW DO I VOTE MY SHARES?

We encourage shareowners to vote their shares in advance of the Annual Meeting even if they plan to attend. Shareowners may vote virtually at the Annual Meeting. If you are a record holder and wish to vote virtually at the meeting, you may vote by obtaining a ballot at the meeting after entering your control number located on your Notice or proxy card. If you hold your shares in street name you may only vote your shares virtually at the Annual Meeting with a broker proxy because a street name shareowner is not the shareowner of record. You should follow your broker, bank or other nominee’s procedures for obtaining a legal proxy.

In addition, you may vote by proxy:

 

HOW WILL MY PROXY BE VOTED?

If you properly complete, sign and return a proxy or use our telephone or internet voting procedures to authorize the named proxies to vote your shares, your shares will be voted as specified. If your proxy card is signed but does not contain specific instructions, your shares will be voted as recommended by our Board, subject to applicable NYSE regulations.

For shareowners participating in our savings plans or in the EQ Shareowner Services Plus Plan, the trustee or administering bank will vote the shares that it holds for a participant’s account only in accordance with instructions given in a signed, completed and returned proxy card or direction card, or in accordance with instructions given pursuant to our internet or telephone voting procedures. If they do not receive instructions, the shares will not be voted. To allow sufficient time for voting by the trustees of the savings plans, your voting instructions for shares held in the plans must be received by January 27, 2022.

 

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MAY I CHANGE MY PROXY AFTER I VOTE MY SHARES?

For shareowners of record, you may revoke or change your proxy at any time before it is voted at the Annual Meeting by:

If you hold your shares in street name, you must contact your broker or other nominee to revoke or change your proxy. Your proxy is not revoked simply because you attend the Annual Meeting.

 

WILL MY VOTE BE CONFIDENTIAL?

It is our policy to keep confidential all proxy cards, ballots and voting tabulations that identify individual shareowners, except (i) as may be necessary to meet any applicable legal requirements, and (ii) in the case of any contested proxy solicitation, as may be necessary to permit proper parties to verify the propriety of proxies presented by any person and the results of the voting. Representatives of Broadridge will tabulate votes and act as the independent inspector of election at this year’s meeting. The independent inspector of election and any employees involved in processing proxy cards or ballots and tabulating the vote are required to comply with this policy of confidentiality.

 

Holders of at least a majority of the shares of our common stock issued and outstanding on the record date for the Annual Meeting must be present, in person or by proxy, for there to be a quorum in order to conduct business at the meeting.

 

ELECTION OF DIRECTORS

Directors are elected by a plurality of votes cast. This means that the four nominees for election as directors who receive the greatest number of votes cast by the holders of our common stock entitled to vote at the meeting will become directors. In an uncontested election where the number of nominees equals the number of director seats up for election, all the nominees will be elected as long as there is a quorum and somebody votes for their election. The election of directors, however, is subject to our director resignation policy if a director fails to receive a majority vote.

Our Guidelines on Corporate Governance set forth our policy if a director is elected by a plurality of votes cast but receives a greater number of votes “withheld” from his or her election than votes “for” such election. In an uncontested election, any nominee for director who receives more votes “withheld” than votes “for” his or her election must promptly tender his or her resignation to the Board. The Board Composition and Corporate Governance Committee will consider the resignation offer and make a recommendation to the Board. The Board will act on the tendered resignation within 90 days following certification of the election results. The Board Composition and Corporate Governance Committee, in making its recommendation, and the Board, in making its decision, may consider any factors or other information that it considers appropriate and relevant, including any stated reasons why the shareowners withheld votes from the director, the director’s tenure, the director’s qualifications, the director’s past and expected contributions to the Board, and the overall composition of the Board. We will promptly disclose the Board’s decision regarding whether to accept or reject the director’s resignation offer in a Form 8-K furnished to the SEC. If the Board rejects the tendered resignation or pursues any additional action, the disclosure will include the rationale behind the decision. Any director who tenders his or her resignation may not participate in the Board Composition and Corporate Governance Committee deliberations and recommendation or in the Board’s decision whether to accept or reject the resignation offer.

 

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COMPENSATION OF NAMED EXECUTIVE OFFICERS

An affirmative vote of the holders of a majority of the voting power of our common stock present in person or represented by proxy and entitled to vote on the matter is necessary to approve on an advisory basis the compensation of our NEOs, although such vote will not be binding on us.

D&T APPOINTMENT

An affirmative vote of the holders of a majority of the voting power of our common stock present in person or represented by proxy and entitled to vote on the matter is necessary to approve the D&T appointment.

 

HOW ARE VOTES COUNTED?

Under Delaware law and our certificate of incorporation and by-laws, all votes entitled to be cast by shareowners present in person or represented by proxy at the meeting and entitled to vote on the subject matter, whether those shareowners vote “for”, “against” or abstain from voting, will be counted for purposes of determining the minimum number of affirmative votes required to approve the D&T appointment and approve on an advisory basis the compensation of our NEOs.

 

WHAT IS THE EFFECT OF AN ABSTENTION?

The shares of a shareowner who abstains from voting on a matter will be counted for purposes of determining whether a quorum is present at the meeting so long as the shareowner is present in person or represented by proxy. An abstention from voting on a matter by a shareowner present in person or represented by proxy at the meeting has no effect on the election of directors, but has the same legal effect as a vote “against” the proposals to approve the compensation of our NEOs, and the D&T appointment.

 

HOW WILL VOTES BE COUNTED ON SHARES HELD THROUGH BROKERS?

Brokers are not entitled to vote on the election of directors, or the advisory proposal to approve the compensation of our NEOs, unless they receive voting instructions from the beneficial owner. However, under NYSE rules, brokers may use discretionary authority to vote on “routine” items such as the ratification of auditors. If a broker does not receive voting instructions, the broker may return a proxy card voting on routine items with no vote on the election of directors, and the advisory proposal to approve the compensation of our NEOs, which is usually referred to as a broker non-vote. The shares of a shareowner whose shares are not voted because of a broker non-vote on a particular matter will be counted for purposes of determining whether a quorum is present at the meeting so long as the shareowner is represented by proxy. A broker non-vote has no effect on the election of directors, or the advisory proposal to approve the compensation of our NEOs.

 

CAN I RECEIVE ELECTRONIC ACCESS TO SHAREOWNER MATERIALS?

As noted above, SEC rules permit us to furnish proxy materials to shareowners via the internet. However, we may choose to continue to provide printed copies to certain shareowners. If we send you printed copies, you can help us reduce the environmental impact of our Annual Meeting by electing to access proxy statements, annual reports and related materials electronically instead of receiving these documents in print. You must have an e-mail account and access to the internet and expect to have such access in the future to be eligible for electronic access to these materials. To enroll for these services, please go to https://enroll.icsdelivery.com/rok_ or visit our website at www.rockwellautomation.com, click on “Investors”, then under “Shareowner Resources”, click on “Investor Contact”, and you will find the link under the subheading “Electronic Delivery” under “Transfer Agent & Dividends”. If you own your shares through a broker or other nominee, you may contact them directly to request electronic access.

Your consent to electronic access will be effective until you revoke it. You may cancel your consent at no cost to you at any time by going to https://enroll.icsdelivery.com/rok_ and following the instructions or by contacting your broker or other nominee.

 

EXPENSES OF SOLICITATION

We will bear the cost of the solicitation of proxies. We are soliciting proxies by mail, e-mail and through the Notice. Proxies also may be solicited personally, or by telephone or facsimile, by a few of our regular employees without additional compensation. In addition, we have hired Innisfree M&A Incorporated, 501 Madison Avenue, New York, NY 10022, for $17,500 plus associated costs and expenses to assist in the solicitation. We will reimburse brokers and other persons holding stock in their names, or in the names of nominees, for their expenses for forwarding proxy materials to principals and beneficial owners and obtaining their proxies.

 

ROCKWELL AUTOMATION  |  FY2021 PROXY STATEMENT    75

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREOWNERS TO BE HELD ON FEBRUARY 1, 2022

This proxy statement and the Annual Report on Form 10-K for our fiscal year ended September 30, 2021, are available to you on the internet at www.proxyvote.com.

To view this material, you will need your control number from your proxy card.

The Annual Meeting (for shareowners as of the December 6, 2021 record date) will be held virtually on February 1, 2022, at 5:30 p.m. CST and may be accessed via www.virtualshareholdermeeting.com/ROK2022.

For instructions on how to attend the virtual meeting please refer to the section of this proxy titled How May I Attend The Annual Meeting? on page 73.

Shareowners will vote at the Annual Meeting on whether to:

1) elect James P. Keane, Blake D. Moret, Thomas W. Rosamilia, and Patricia A. Watson as directors;

2) approve on an advisory basis the compensation of our named executive officers as described in the proxy statement; and

3) approve the selection of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2022.

 

December 14, 2021

 

ROCKWELL AUTOMATION  |  FY2021 PROXY STATEMENT    76

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This regulatory filing also includes additional resources:
lrok2021_def14a.pdf