DEF 14A
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LOGO


Notice of 2023 Annual Meeting of Shareholders

May 5, 2023

9:00 a.m. Central Time

The Westin Chicago Lombard

70 Yorktown Center

Lombard, Illinois 60148

Dear Fellow Shareholder:

You are cordially invited to attend the Annual Meeting of Shareholders (the “Annual Meeting”) of Dover Corporation (“Dover” or the “Company”) at The Westin Chicago Lombard on May 5, 2023 at 9:00 a.m., Central Time, to be held for the following purposes:

 

  1.

To elect nine directors.

 

  2.

To ratify the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for 2023.

 

  3.

To approve, on an advisory basis, named executive officer (“NEO”) compensation.

 

  4.

To approve, on an advisory basis, the frequency of holding an advisory vote on executive compensation.

 

  5.

To consider a shareholder proposal regarding approval of certain termination payments, if properly presented.

 

  6.

To consider such other business as may properly come before the Annual Meeting, including any adjournments or postponements thereof.

All holders of record at the close of business on March 8, 2023, are entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements thereof. Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares as soon as possible.

March 17, 2023

By authority of the Board of Directors,

Ivonne M. Cabrera

Secretary


TABLE OF CONTENTS

 

Notice of 2023 Annual Meeting of Shareholders   
Proxy Statement Summary      1  

Annual Meeting Information

     1  

Items of Business

     1  

How to Submit Your Proxy

     1  

Company Overview

     2  

2022 Performance Overview

     4  

Governance Highlights

     5  

Shareholder Engagement

     5  

Executive Compensation

     6  

Director Nominees

     6  

Board Composition

     8  
Proposal 1 — Election of Directors      9  

Criteria for Director Nominees

     9  

Director Nomination Process

     10  

2023 Director Nominees

     11  

Board Oversight and Governance Practices

     20  

Shareholder Engagement and History of Board Responsiveness

     28  

Environmental, Social, and Governance Oversight (ESG)

     30  

Directors’ Compensation

     33  

Proposal 2 — Ratification of Appointment of Independent Registered Public Accounting Firm

     34  

Audit Committee Report

     35  

Fees Paid to Independent Registered Public Accounting Firm

     36  

Pre-Approval of Services Provided by Independent Registered Public Accounting Firm

     36  
Compensation Discussion and Analysis      37  

Executive Summary

     37  

Say on Pay Vote Results and Shareholder Engagement

     39  

Dover’s Alignment with Leading Compensation Governance Practices

     40  

Compensation Principles

     41  

Compensation Process

     42  

Elements of Executive Compensation

     46  

Other Benefits

     53  

Other Elements of Compensation

     55  

Compensation Committee Report

     56  

Executive Compensation Tables

     57  

Summary Compensation Table

     57  

Grants of Plan-Based Awards in 2022

     59  

Outstanding Equity Awards at Fiscal Year-End 2022

     60  

Option Exercises and Stock Vested in 2022

     62  

Pension Benefits through 2022

     62  

Nonqualified Deferred Compensation in 2022

     64  

Potential Payments upon Termination or Change in Control

     65  

Pay versus Performance

     70  

 

DOVER CORPORATION2023 Proxy Statement i


TABLE OF CONTENTS

 

Proposal 3 — Advisory Resolution to Approve Named Executive Officer Compensation      73  
Proposal 4 — Advisory Vote on the Frequency of Holding an Advisory Vote on Executive Compensation      74  
Shareholder Proposal      75  

Proposal 5 – Shareholder Proposal Regarding Approval of Certain Termination Payments

     75  
Share Ownership Information      79  

Security Ownership of Certain Beneficial Owners and Management

     79  
General Information About the Annual Meeting      81  

 

DOVER CORPORATION2023 Proxy Statement ii


PROXY STATEMENT SUMMARY

Annual Meeting Information

 

Date:   May 5, 2023
Time:   9:00 a.m., Central Time
Record Date:           March 8, 2023
Location:  

The Westin Chicago Lombard

70 Yorktown Center

Lombard, Illinois 60148

  For additional information about our Annual Meeting, please see “General Information About the Annual Meeting.” We are first mailing this Notice of Annual Meeting and Proxy Statement beginning on or about March 17, 2023.

Items of Business

There are five proposals to be voted on at the Annual Meeting:

 

       

ITEM

 

  

Proposal

 

  

 

Board Voting
Recommendation

 

  

Page  

Reference  

 

 
 

 

ITEM 1

 

  

 

The election of nine nominees for director

 

  

 

FOR each director
nominee

 

  

 

 

 

 

9  

 

 

 

 

 

ITEM 2  

 

  

 

The ratification of the appointment of PwC as our independent registered public accounting firm for 2023

 

  

 

FOR

 

  

 

 

 

 

34  

 

 

 

 

 

ITEM 3

 

  

 

An advisory resolution to approve NEO compensation

 

  

 

FOR

 

  

 

 

 

 

73  

 

 

 

 

 

ITEM 4

 

  

 

An advisory resolution to approve the frequency of holding an advisory vote on executive compensation

 

  

 

ONE YEAR

 

  

 

 

 

 

74  

 

 

 

 

 

ITEM 5

 

  

 

A shareholder proposal regarding approval of certain termination payments, if properly presented

 

  

 

AGAINST

 

  

 

 

 

 

75  

 

 

 

How to Submit Your Proxy

Even if you plan to attend the Annual Meeting in person, please submit your proxy as soon as possible using one of the following methods:

 

   

Via internet by visiting www.proxyvote.com

 

   

Via telephone by calling 1-800-690-6903

 

   

Via mail by marking, signing and dating your proxy card or voting instruction form (if you received proxy materials by mail) and returning it to the address listed therein

 

DOVER CORPORATION2023 Proxy Statement 1


PROXY STATEMENT SUMMARY

 

Company Overview

Dover is a diversified global manufacturer and solutions provider delivering innovative equipment and components, consumable supplies, aftermarket parts, software and digital solutions, and support services through five operating segments: Engineered Products, Clean Energy & Fueling, Imaging & Identification, Pumps & Process Solutions, and Climate & Sustainability Technologies. We combine global scale, operational agility, world-class engineering capability, and customer intimacy to lead the markets we serve. Recognized for our entrepreneurial approach for over 65 years, our team of over 25,000 employees takes an ownership mindset, collaborating with customers to redefine what’s possible.

 

LOGO

Management Philosophy

 

   

Our executive management team is committed to steady shareholder value creation through a combination of sustained long-term profitable growth, operational excellence, superior free cash flow generation, and productive capital re-deployment while adhering to a conservative financial policy.

 

   

Our businesses seek to be leaders in a diverse set of growing markets where customers are loyal to trusted partners and suppliers, and value product performance and differentiation driven by superior engineering, manufacturing precision, total solution development, and excellent supply chain performance.

 

   

Our companies are long-time leaders in their respective markets and are known for their innovation, engineering capability, and customer service excellence.

 

   

Our sustainable business practices are focused on reducing environmental impact and developing products that help our customers meet their sustainability goals.

 

   

Our operating structure of five business segments allows for differentiated acquisition focus consistent with our portfolio and capital allocation priorities which, coupled with value-creating functional expertise at our corporate center, presents opportunities to identify and capture operating synergies, such as global sourcing and supply chain integration, centralized shared services, and cross-pollination of manufacturing best practices.

 

   

Our executive management team sets strategic direction, initiatives and goals, provides oversight of strategy execution and achievement of these goals for our business segments, and with oversight from our Board of Directors (our “Board”), makes capital allocation decisions, including organic investment initiatives, major capital projects, acquisitions, and the return of capital to our shareholders.

 

   

Our operating culture fosters high ethical and performance standards, values accountability, rigor, trust, inclusion, respect, and open communications, and is designed to encourage individual growth and operational effectiveness.

 

DOVER CORPORATION2023 Proxy Statement 2


PROXY STATEMENT SUMMARY

 

Company Goals

We are committed to driving superior shareholder return through three key tenets of our corporate strategy.

 

LOGO

  We are committed to achieving organic sales growth above global gross domestic product growth (3% to 5% annually on average) over a long-term business cycle, absent prolonged adverse economic conditions, complemented by growth through strategic acquisitions.

LOGO

  We are focused on improving returns on capital, as well as segment and corporate earnings margins, by enhancing our operational capabilities and making investments across the organization in digital capabilities, automation, operations management, information technology, shared services, and talent. We also focus on continuous, effective cost management and productivity initiatives, including automation and digitally-supported manufacturing, supply chain optimization, e-commerce and digital go-to-market, restructuring activities, improved footprint utilization, strategic pricing and portfolio management.

LOGO

  We aim to generate strong and growing free cash flow and earnings per share (“EPS”) through strong earnings performance, productivity improvements, and active working capital management.

We support achievement of these goals by aligning management compensation with strategic and financial objectives, actively managing our portfolio to increase enterprise scale, improving business mix over time, pursuing acquisitions that fit the characteristics of an ideal Dover business, and investing in talent development programs.

2022 Financial Results

In 2022, we continued our long track record of delivering value to our shareholders, despite an operational environment that continues to present challenges due to ongoing input shortages, inflationary cost pressure and foreign currency translation headwinds.

 

       

US GAAP

   FY2022        FY2021        Δ     

        Revenue ($M)

     8,508          7,907          8%

        Net earnings ($M)

     1,065          1,124          (5)%

        Diluted EPS ($)

     7.42          7.74          (4)%

Non-GAAP(1)

                           

        Organic revenue change

               9%

        Adjusted net earnings ($M)(2)

     1,213          1,109          9%

        Adjusted diluted EPS ($)

     8.45          7.63          11%

(1) Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement.

(2) Full year 2022 and 2021 adjusted net earnings exclude after tax purchase accounting expenses of $139.4 million and $107.2 million, respectively, and restructuring and other costs of $30.8 million and $31.1 million, respectively. Full year 2022 also excludes a $22.6 million reduction to income taxes previously recorded related to the Tax Cuts and Jobs Act, and full year 2021 excludes a $135.5 million gain on the sale of Unified Brands and a $18.0 million gain related to the sale of our Race Winning Brands equity method investment.

 

DOVER CORPORATION2023 Proxy Statement 3


PROXY STATEMENT SUMMARY

 

2022 Performance Overview

 

Capital Return Program

 

 

•   We continued our history of providing regular capital returns to shareholders by increasing our quarterly dividend, marking our 67th consecutive year of dividend increases.

 

•   We made $585 million of share repurchases in 2022, including completing a $500 million accelerated share repurchase program.

 

Portfolio & Strategic Actions  

 

•   We made a total of five bolt-on acquisitions totaling $325 million, net of cash acquired and including contingent consideration, which complement and expand upon our existing operations.

 

Strong Operational Execution and

Profitability

 

 

•   Increased 2022 revenue and delivered strong margin improvement in the fourth quarter despite ongoing input shortages, inflationary cost pressure and foreign currency translation.

 

•   We continued to execute on our broad-based multi-year efficiency and margin expansion program, designed to reduce our selling, general and administrative cost base and rationalize our manufacturing and supply chain footprint across the portfolio.

 

•   Continuing to build upon our four enterprise capabilities in support of margin expansion initiatives.

 

-   We are continuing to (1) leverage our Digital Labs team to improve our internal and market-facing digital capabilities, (2) improve utilization and optimization of our manufacturing footprint through centralized resources and investment, (3) further centralize shared services under Dover Business Services, and (4) invest in our India Innovation Center shared services with a focus on engineering capabilities.

 

•   Synergy capture from recent acquisitions presents additional margin upside.

 

Organic Investment  

 

•   We made $221.0 million in capital expenditures in 2022, representing 2.6% of revenue, in line with our plan to support growth capacity, digitization, innovation, and productivity.

 

ESG
Initiative
 

 

•   Completed our initial three-year plan to expand the scope and robustness of our environmental, social, and governance (“ESG”) practices and disclosures.

 

-   Our ESG website contains disclosure on eighteen topics identified as areas of focus during the three-year plan.

 

-   We continue to report our company-wide greenhouse gas (“GHG”) emissions and progress against our science-based targets to reduce our GHG emissions, including an absolute reduction of scope 1 and scope 2 market-based GHG emissions of 30 percent by 2030 (from a 2019 baseline year), and an absolute reduction of scope 3 GHG emissions of 15 percent by 2030 (from a 2019 baseline year).

 

-   We continue to report our progress against our goal of reducing Total Recordable Injury Rate (“TRIR”) by 40% by 2025 (from a 2019 baseline year).

 

-   We completed our first annual global engagement survey, which yielded a 77% participation rate.

 

•   Formalized our cross-functional Sustainability Steering Committee’s oversight responsibilities in a committee charter.

 

 

DOVER CORPORATION2023 Proxy Statement 4


PROXY STATEMENT SUMMARY

 

Governance Highlights

Our Board is committed to sound governance practices designed to promote the long-term interests of shareholders and strengthen Board and management accountability. Highlights include:

 

     

BOARD OF DIRECTORS

  

GOVERNANCE HIGHLIGHTS

 

  

 

 Independent Board leadership

 

 Diversity search policy for external director and Chief Executive Officer (“CEO”) searches conducted by third-party search firms

 

 All directors are independent, other than the CEO

 

 Annual election of directors

 

 Majority voting for directors and director resignation policy in uncontested elections

 

 Comprehensive annual individual evaluations of one-third of the directors

 

 Regular executive sessions of independent directors

 

 Robust succession planning

 

  

 

 15% ownership threshold required to call a special meeting of shareholders

 

 Proxy access right at 3%/3 years/2 or 20% of Board/20 shareholder aggregation allowance

 

 Strong share retention guidelines for directors and executive officers

 

 Executive compensation driven by pay-for-performance philosophy

 

 Executive officers not permitted to hedge or pledge company shares

 

 In 2019, achieved removal of all remaining supermajority voting provisions in our charter

   

Shareholder Engagement

We encourage feedback from shareholders and have a strong history of engaging with investors on a range of topics, including our executive compensation program, evolving trends and best practices. In 2022, we continued our focus on regularly engaging with shareholders. We reached out to holders of approximately 63% of our shares outstanding, and engaged with governance professionals and/or portfolio managers at investors holding approximately 39% of our shares outstanding. During these discussions, we discussed many topics, including Board oversight and composition, our commitment to diversity and inclusion, progress on our ESG program and disclosures, our executive compensation program, and our corporate governance practices. Investors continued to express broad support for our governance structures and executive compensation program, and shared their views on matters related to diversity and inclusion and our independent, well-qualified Board. Further, investors highlighted the importance of continuing our ongoing engagement with them in the future on long-term corporate strategy and ESG initiatives. For more detailed information regarding these discussions, please see “Shareholder Engagement and History of Board Responsiveness” on page 28.

 

DOVER CORPORATION2023 Proxy Statement 5


PROXY STATEMENT SUMMARY

 

Executive Compensation

Our compensation program for executive officers is designed to emphasize performance-based compensation in alignment with our business strategy.

2022 Executive Compensation

The following table summarizes pay mix for our CEO and other NEOs, which is highly performance-based.

 

LOGO

 

 

 

EXECUTIVE COMPENSATION PROGRAM HIGHLIGHTS

 

 

 Pay-for-performance philosophy — a substantial majority of NEO pay is performance-based and tied to Dover’s stock price performance

 

 Significant portion of long-term compensation is performance-based, with long-term incentives vesting over three years subject to rigorous three-year performance period

 

 Strong share ownership guidelines for NEOs

 

 Equity awards with anti-hedging and anti-pledging provisions

 

 Investors provided with clear disclosure regarding the individual strategic objectives and financial metrics in our Executive Officer Annual Incentive Plan (“AIP”)

 

 ESG oversight incorporated into our CEO’s individual strategic objectives in the AIP

 

 Robust clawback structure

 

Director Nominees

Our Governance and Nominating Committee maintains an active and engaged Board through a robust refreshment process, which focuses on ensuring our Board has a diverse skill set that benefits from both the industry- and company-specific knowledge of our longer-tenured directors, as well as the fresh perspectives brought by our newer directors.

 

DOVER CORPORATION2023 Proxy Statement 6


PROXY STATEMENT SUMMARY

 

Recent Changes to Board

Our Board recently welcomed Michael Manley to the Board of Directors in February 2023. As the Chief Executive Officer of AutoNation, Inc., the largest automotive retailer in the United States and the former Chief Executive Officer of Fiat Chrysler Automobiles N.V., Mr. Manley brings valuable leadership experience to the Board. He has extensive knowledge of manufacturing operations and supply chains, multi-national business management, capital markets, and mergers and acquisitions.

Current directors Stephen K. Wagner and Mary Winston will not stand for election at this year’s Annual Meeting. Mr. Wagner and Ms. Winston will be retiring after having served on our Board since 2010 and 2005, respectively. Our Board expresses its deep appreciation to Mr. Wagner and Ms. Winston for their years of dedicated service to Dover, their effective independent leadership of Board committees over the years, and their camaraderie which will be missed from the Board’s deliberations.

 

           
     NAME   OCCUPATION   INDEPENDENT   

COMMITTEES

MEMBERSHIPS*

 

OTHER PUBLIC  

COMPANY

BOARDS

 

 

LOGO

 

 

Deborah L. DeHaas

Age: 63

Director Since: 2021

  CEO of the Corporate Leadership Center; Former Vice Chairman of Deloitte and Managing Partner of the Center for Board Effectiveness      A   1

 

LOGO

 

H. John Gilbertson, Jr.

Age: 66

Director Since: 2018

  Retired Managing Director at Goldman Sachs      A, F   0

 

LOGO

 

Kristiane C. Graham

Age: 65

Director Since: 1999

  Private Investor      C, G   0

 

LOGO

 

Michael F. Johnston

Chair of the Board

Age: 75

Director Since: 2013

  Retired CEO of Visteon Corporation      C, G   1

 

LOGO

 

Michael Manley

Age: 59

Director Since: 2023

  CEO of AutoNation, Inc.      A, F   2

 

LOGO

 

Eric A. Spiegel

Age: 65

Director Since: 2017

  Former President and CEO of Siemens USA; Special Advisor at Brighton Park Capital      A, F (Chair)   1

 

LOGO

 

Richard J. Tobin

Age: 59

Director Since: 2016

  President and CEO of Dover   No

(CEO of Dover)

     1

 

LOGO

 

 

Stephen M. Todd

Age: 74

Director Since: 2010

  Former Global Vice Chairman of Assurance Professional Practice of Ernst & Young Global Limited      A (Chair)   1

LOGO

 

Keith E. Wandell

Age: 73

Director Since: 2015

  Former President and CEO of Harley-Davidson, Inc.      C (Chair), F   1

*A = Audit Committee; C = Compensation Committee; G = Governance and Nominating Committee; F = Finance Committee

 

DOVER CORPORATION2023 Proxy Statement 7


PROXY STATEMENT SUMMARY

 

Board Composition

Upon the retirements of Mr. Wagner and Ms. Winston, the Board will have the following composition:

 

LOGO

 

LOGO

 

LOGO

 

LOGO

Expanding the diversity of the Board will be a key objective as the Board considers future appointments. See page 9 for more information on our Board diversity policy and refreshment practices.

 

DOVER CORPORATION2023 Proxy Statement 8


Proposal 1 — Election of Directors

Criteria for Director Nominees

The Board seeks to recommend qualified director nominees who, in the opinion of the Board, demonstrate the highest personal and professional integrity as well as exceptional ability and judgment, who can serve as a sounding board for our CEO on planning and policy, and who will be most effective, together with the other nominees to the Board, in collectively serving the long-term interests of all our shareholders.

Key areas of expertise for director nominees, which are reflected in our current director nominees, include:

 

 

 

 Strategic M&A

 

 

 

Experience with international acquisitions, post-merger integration, and portfolio restructuring

 

   
 

 

 Global Operations & Management

 

 

 

Experience with cross-border transactions, global market entry and expansion, and implementation of operational efficiency

 

   
 

 

 Capital Markets
Expertise

 

 

 

Experience with capital markets and complex financing transactions

 

   
 

 

 Strategy Development
& Execution

 

 

 

Experience with diversified manufacturing in many of the markets and product areas relevant to Dover’s businesses

 

   
 

 

 Risk Management Expertise

 

 

 

Experience evaluating risk management policies and procedures

 

   
 

 

 Audit & Corporate Governance Matters

 

 

 

Experience with assurance and audit, regulation, and financial reporting

 

   
 

 

 Human Capital Management

 

 

 

Experience attracting, developing and retaining talent and building strong cultures

 

   
 

 

 Sustainability

 

 

 

Experience creating long-term value by embracing opportunities and managing risks deriving from ESG developments

 

   
 

 

 Executive Leadership Experience

 

 

 

Leadership experience as former CEOs and CFOs of global public companies

 

Diversity. Our Board believes that diverse perspectives enhance its decision-making and contribute to the success of Dover. In considering diversity in selecting director nominees, the Governance and Nominating Committee gives weight to the extent to which candidates would increase the effectiveness of the Board by broadening the mix of experience, knowledge, backgrounds, skills, ages, and tenures represented among its members. Our Board has adopted a policy, reflected in our Corporate Governance Guidelines, requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. Expanding the diversity of the Board will be a key objective as the Board considers future appointments.

Skills Aligned with Dover’s Strategy. The Governance and Nominating Committee also considers our current Board composition and the projected retirement date of current directors, as well as such other factors it may deem to be in the best interests of Dover and its shareholders, including a director nominee’s leadership and operating experience (particularly as a

 

DOVER CORPORATION2023 Proxy Statement 9


PROPOSAL 1 — ELECTION OF DIRECTORS

 

CEO), financial and investment expertise, and strategic planning experience. We believe that our current director nominees possess the right mix of skills and backgrounds to enable us to achieve our strategic goals.

Independence & Depth of Experience. The Board prefers nominees to be independent but believes it is desirable to have our CEO on the Board as a representative of current management. Given the global reach and broad array of the types of businesses operated by Dover, the Governance and Nominating Committee highly values director nominees with multi-industry and multi-geographic experience.

Director Nomination Process

Whenever the Governance and Nominating Committee concludes that a new nominee to our Board is required or advisable, it will consider recommendations from directors, management, shareholders and, if it deems appropriate, consultants retained for that purpose. In such circumstances, it will evaluate individuals recommended by shareholders in the same manner as nominees recommended from other sources.

Shareholder Nominations for Director

Shareholders who wish to recommend an individual for nomination should send that person’s name and supporting information to the Governance and Nominating Committee, in care of the Corporate Secretary at our principal executive offices, 3005 Highland Parkway, Downers Grove, Illinois, 60515, or through our communications coordinator. Shareholders who wish to directly nominate an individual for election as a director, without going through the Governance and Nominating Committee, must comply with the procedures in our by-laws. Please see “General Information About the Annual Meeting” for nomination deadlines.

Proxy Access Shareholder Right

Following extensive engagement with our shareholders, our Board determined to adopt proxy access in February 2016, permitting a shareholder or group of up to 20 shareholders holding 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our by-laws.

 

DOVER CORPORATION2023 Proxy Statement 10


PROPOSAL 1 — ELECTION OF DIRECTORS

 

2023 Director Nominees

There are nine nominees for election to our Board at this Annual Meeting, each to serve until the next annual meeting of shareholders or his or her earlier removal, resignation or retirement. All nominees currently serve on our Board and are being proposed for re-election by our Board.

If any nominee for election becomes unavailable or unwilling to serve as a director before the Annual Meeting, an event which we do not anticipate, the persons named as proxies will vote for a substitute nominee or nominees as may be designated by our Board, or the Board may reduce the number of directors. Directors will be elected by a majority of the votes cast in connection with their election.

 

   LOGO

      

Deborah L. DeHaas

 

 

 

 

 

Independent Director Nominee

Director since: 2021

Age: 63

 

Committees:   Audit

 

 

    

 

Skills and Qualifications:

 

 

Significant leadership, financial and corporate governance expertise garnered from her nearly 40 years of experience at major audit, assurance and consulting firms

 

 

Certified public accountant (“CPA”) and has extensive experience with financial, accounting, internal controls, and enterprise risk management

 

 

Has deep expertise on governance, both as a topic and discipline, developed during her career at Deloitte

 

 

As a former member of the Value Reporting Foundation Board (formerly the SASB Foundation Board), contributes valuable and well-informed insights on a variety of ESG matters

 

 

Brings relevant public company board service, serving on the board of CF Industries Holdings, Inc.

 

 

Brings experience and perspective on matters regarding human capital and culture, including diversity and inclusion

 

 

Holds a bachelor’s degree in management science and accounting from Duke University

 

 

Included in the National Association of Corporate Directors (“NACD”) Directorship 100 from 2015-2020, recognizing influential leaders in corporate governance and is also an NACD Board Leadership Fellow

 

Business Experience:

 

 

CEO of the Corporate Leadership Center, a non-profit leadership development forum

 

 

Former Vice Chairman and National Managing Partner of the Center for Board Effectiveness at Deloitte

 

   

Former member of the U.S. Executive Committee

 

   

Former Vice Chairman and Chief Inclusion Officer

 

   

Former member of the U.S. Board of Directors

 

   

Former Vice Chairman and Central Region Managing Partner

 

   

Former Vice Chairman and Midwest Regional Managing Partner

 

   

Former Regional Managing Partner, Strategic Clients

 

 

Former positions of increasing responsibility at Arthur Andersen, an audit, financial advisory, tax and consulting firm, most recently as Managing Partner & Business Advisory Assurance, Central Region

 

Other Board Experience:

 

 

CF Industries Holdings, Inc.

 

DOVER CORPORATION2023 Proxy Statement 11


PROPOSAL 1 — ELECTION OF DIRECTORS

 

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H. John Gilbertson, Jr.

 

 

 

 

 

Independent Director Nominee

Director since: 2018

Age: 66

 

Committees:   Audit, Finance

 

 

 

Skills and Qualifications:

 

 

Extensive experience in corporate finance, capital markets, and mergers and acquisitions

 

 

Served as a strategic and financial advisor to his clients, forming deep relationships with companies in a range of industries

 

 

Has nearly four decades of experience in the professional and financial services industry

 

 

Deep expertise in financial management, coupled with his analytical and collaborative mindset, allows him to make invaluable contributions to our Board

 

 

Strong background in senior leadership development, succession planning, and organizational culture development

 

 

Brings to the Board considerable expertise in financial risk oversight and capital allocation

 

 

Bachelor’s degree in political economy from Dartmouth College and an MBA from Harvard University

 

Business Experience:

 

 

Retired Managing Director at Goldman Sachs

 

 

Served as Advisory Director and Partner-in-Charge, Midwest Region Investment Banking Services

 

 

Served as Managing Director at Travelers Group Inc.

 

 

Former Associate, Mergers and Acquisitions at Morgan Stanley

 

 

Former Consultant, Corporate Strategy at Bain & Company

 

 

Former Assistant Treasurer, Corporate Banking at Chase Manhattan Bank

 

 

Former News Reporter at The Providence Journal Company

 

Other Board Experience:

 

 

Director and Chair of Audit Committee of Meijer, Inc. (“Meijer”)

 

 

Former Director of AAR Corp.

 

DOVER CORPORATION2023 Proxy Statement 12


PROPOSAL 1 — ELECTION OF DIRECTORS

 

   LOGO

 

      

Kristiane C. Graham

 

 

 

 

 

Independent Director Nominee

Director since: 1999

Age: 65

 

Committees:   Compensation, Governance and Nominating

 

 

 

Skills and Qualifications:

 

 

Experience as a private investor with substantial holdings of Dover stock and her shared interests in Dover, including interests through charitable organizations of which she is a director, makes her a good surrogate for our individual and retail investors

 

 

Experience with a commercial bank, primarily as a loan officer; founded and operated an advisory company and a publication regarding international thoroughbred racing and now co-manages her family’s investments

 

 

Actively works with and has served on the boards of various organizations to support the objectives of local communities, affordable housing, education, and health

 

 

Serves on the Board of Directors for the Walter N. Ridley Scholarship Fund at the University of Virginia

 

 

Serves on the Board of Directors of Habitat for Humanity International

 

 

Serves on the Board of Trustees of the Virginia Museum of Fine Arts Foundation

 

 

Serves as an Emeritus Trustee of the College Foundation of the University of Virginia and has previously served on the Advisory Board of the University of Virginia School of Nursing

 

 

Brings valuable insights on the development of our policies and strategies relating to talent, leadership, and culture, with a focus on diversity and inclusion

 

 

Devoted substantial time to monitoring the development of Dover operating company leaders, enabling her to provide the Board valuable insights regarding management succession

 

 

As a member of one of the founding families of Dover, Ms. Graham also brings to the Board a sense of Dover’s historical values, culture and strategic vision which the Board believes is beneficial as it considers various strategic planning alternatives for shaping Dover’s future

 

Business Experience:

 

 

Private Investor

 

DOVER CORPORATION2023 Proxy Statement 13


PROPOSAL 1 — ELECTION OF DIRECTORS

 

   LOGO

 

      

Michael F. Johnston

 

 

 

 

 

Independent Board Chair; Independent Director Nominee

Director since: 2013

Age: 75

 

Committees:   Compensation, Governance and Nominating

 

 

 

Skills and Qualifications:

 

 

Brings industry insight, financial expertise and leadership experience garnered from his 17 years on the boards of global companies

 

 

Served as CEO of an $18 billion global manufacturer

 

 

Mr. Johnston also brings valuable corporate governance perspectives from his prior board service, including as a lead Director and Chair of other major public companies

 

 

Brings deep operations experience, which has helped him gain knowledge and a deep understanding in manufacturing, design, innovation, engineering, accounting and finance and capital structure

 

 

Brings nearly two decades of experience in building businesses in emerging economies

 

 

Bachelor’s degree in industrial management from the University of Massachusetts and an MBA from Michigan State University

 

Business Experience:

 

 

Former CEO and President of Visteon Corporation (“Visteon”)

 

 

Former Chief Operating Officer of Visteon

 

 

Former President of North America/Asia Pacific, Automotive Systems Group, of Johnson Controls, Inc. (“Johnson Controls”)

 

 

Former President of Americas Automotive Group of Johnson Controls

 

Other Board Experience:

 

 

Director of Armstrong Flooring, Inc.

 

 

Former Chairman and Director of Visteon

 

 

Former Director of Armstrong World Industries, Flowserve Corporation, and Whirlpool Corporation

 

DOVER CORPORATION2023 Proxy Statement 14


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

   LOGO

 

      

Michael Manley

 

 

 

 

 

Independent Director Nominee

Director since: 2023

Age: 59

 

Committees:   Audit, Finance

 

 

 

Skills and Qualifications:

 

 

Currently the Chief Executive Officer of AutoNation, Inc., the largest automotive retailer in the United States

 

 

Successfully managed a wide array of business models over his career

 

 

Extensive knowledge of manufacturing operations and supply chains, multi-national business management, capital markets, and mergers and acquisitions

 

 

MBA from Ashridge Management College and a Bachelor of Science in engineering from Southbank University

 

Business Experience:

 

 

Chief Executive Officer AutoNation, Inc.

 

 

Former head of Americas and member of the Group Executive Council for Stellantis N.V.

 

 

Former Chief Executive Officer of Fiat Chrysler Automobiles N.V. (“FCA”), a predecessor to Stellantis N.V.

 

   

Former Executive Vice President - International Sales & Marketing, Business Development and Global Product Planning Operations

 

   

Former Chief Executive Officer of Jeep

 

   

Former Chief Executive Officer of Ram

 

   

Former Chief Operating Officer for the Asia Pacific region

 

   

Former FCA Global Executive Council member

 

Other Board Experience:

 

 

AutoNation

 

 

Rolls-Royce Holdings plc (until 2023 annual meeting)

 

DOVER CORPORATION2023 Proxy Statement 15


PROPOSAL 1 — ELECTION OF DIRECTORS

 

   LOGO

 

      

Eric A. Spiegel

 

 

 

 

 

Independent Director Nominee

Director since: 2017

Age: 65

 

Committees:   Audit, Finance (Chair)

 

 

Skills and Qualifications:

 

 

Experienced business leader with diversified, global experience who brings deep and valuable expertise in strategy development, corporate restructuring, portfolio management and M&A to our Board

 

 

40+ years of experience working with large, global companies in the energy and industrial markets, mostly recently as President & CEO of Siemens USA

 

 

At Siemens, he led strategic reviews across a portfolio of ~45 businesses in the company’s largest market with over $22 billion in revenue, 50,000 employees and over 60 manufacturing facilities

 

 

Participated in the acquisition, divestiture, joint venture and carve-out of over 30 business units and segments

 

 

Executed Siemens’ “Vision 2020” initiative to optimize growth and margins in the U.S., across all sectors

 

 

Prior to Siemens, Mr. Spiegel was a global consultant at Booz Allen Hamilton focused on complex organizations in the energy, power, chemical, water, industrial and automotive fields

 

 

At Booz, he worked with major energy clients globally on projects around corporate strategy, M&A, major capital projects, cost restructuring, margin enhancement and supply chain re-design and was also closely involved with the government sector

 

 

An expert on the global energy industry, Mr. Spiegel co-authored the book Energy Shift: Game-changing Options for Fueling the Future

 

 

Holds a bachelor’s degree in economics from Harvard University and an MBA from the Tuck School of Business at Dartmouth College

 

Business Experience:

 

 

Special Advisor at Brighton Park Capital, a private equity firm, where he supports the firm’s sector investment teams and portfolio companies by providing strategic counsel on industry trends and growth strategies

 

 

Former President and CEO of Siemens USA

 

 

Former Managing Partner, Global Energy, Chemicals, and Power, and Managing Partner, Washington, D.C. office, and other roles at Booz & Company, Inc. (now known as Strategy&) and Booz Allen Hamilton, Inc., global consulting firms

 

 

Former Associate, Energy and Industrials Practice, at Temple, Barker & Sloane, Inc. (now known as Oliver Wyman)

 

 

Former Marketing and Strategy Manager at Brown Boveri & Cie (now known as ABB), a Swiss group of electrical engineering companies

 

 

In connection with his position at Brighton Park Capital, Mr. Spiegel serves as Chair of Relatient, Inc.

 

Other Board Experience:

 

 

Director and Audit Committee Chair of Liberty Mutual Holding Company, Inc.

 

 

Director and Audit Committee Chair of Project Energy Reimagined Acquisition Corp.

 

 

Director of TeamBuilder LLC

 

DOVER CORPORATION2023 Proxy Statement 16


PROPOSAL 1 — ELECTION OF DIRECTORS

 

   LOGO

      

Richard J. Tobin

 

 

 

 

 

Chief Executive Officer

Director since: 2016

Age: 59

 

Committees:   None

 

 

 

Skills and Qualifications:

 

 

Mr. Tobin is Dover’s current CEO. The Board believes it is desirable to have one active management representative on the Board to facilitate its access to timely and relevant information and its oversight of management’s long-term strategy, planning, and performance

 

 

Has a broad range of industry and functional experiences acquired through regional and global leadership positions

 

 

Former CEO of CNH Industrial, a complex international industrial company, where he led efforts to increase efficiencies, innovate through new technologies, expand geographically, and maximize the company’s portfolio of businesses

 

 

Gained extensive experience in international finance, operations, management, and information technology in his prior roles

 

 

Developed deep expertise with global capital markets through his international finance leadership roles

 

 

Prior to beginning his business career, Mr. Tobin was an officer in the United States Army

 

 

Member of the Board of Trustees of the John G. Shedd Aquarium in Chicago

 

 

Formerly served on the U.S. Chamber of Commerce Board of Directors, and is a former member of the Business Roundtable

 

 

Holds a bachelor of arts from Norwich University and an MBA from Drexel University

 

Business Experience:

 

 

President and CEO of Dover

 

 

Former CEO of CNH Industrial NV (“CNH Industrial”)

 

 

Former Group Chief Operating Officer of Fiat Industrial S.p.A

 

 

Former President and CEO of CNH Global NV

 

 

Former CFO of CNH Global NV

 

 

Former Chief Finance Officer & Head of Information Technology of SGS Group

 

 

Former Chief Operating Officer for North America of SGS Group

 

Other Board Experience:

 

 

Director of KeyCorp.

 

 

Former director of CNH Industrial

 

DOVER CORPORATION2023 Proxy Statement 17


PROPOSAL 1 — ELECTION OF DIRECTORS

 

   LOGO

      

Stephen M. Todd

 

 

 

 

 

Independent Director Nominee

Director since: 2010

Age: 74

 

Committees:   Audit (Chair)

 

 

 

Skills and Qualifications:

 

 

Extensive accounting and financial experience in both domestic and international business developed during a four decade career at Ernst & Young where he specialized in assurance and audit

 

 

Brings unique insights into accounting and financial issues relevant to multinational companies like Dover

 

 

Brings the perspective of an outside auditor to the Audit Committee

 

 

Brings leadership and financial strategy experience as developer and director of Ernst & Young’s Global Capital Markets Centers, which provides accounting, regulatory, internal control and financial reporting services to multinational companies in connection with cross-border debt and equity securities transactions and acquisitions

 

Business Experience:

 

 

Former Global Vice Chair of Assurance Professional Practice of Ernst & Young Global Limited, London, UK; and prior thereto, various positions with Ernst & Young

 

Other Board Experience:

 

 

Director and Audit Committee member of ChampionX Corporation (formerly known as Apergy Corporation)

 

 

Former member of the Board of Trustees of PNC Funds

 

DOVER CORPORATION2023 Proxy Statement 18


PROPOSAL 1 — ELECTION OF DIRECTORS

 

   LOGO

      

Keith E. Wandell

 

 

 

 

 

Independent Director Nominee

Director since: 2015

Age: 73

 

Committees:   Compensation (Chair), Finance

 

 

 

Skills and Qualifications:

 

 

Mr. Wandell brings to the Board the valuable perspective of a strategic, experienced leader with a strong record focused on growth, profitability, international expansion and innovation.

 

 

Has over 30 years of experience in diversified manufacturing businesses, most recently as the former Chairman and CEO of Harley-Davidson, Inc. (“Harley-Davidson”) where he led transformation efforts across the company’s product development, manufacturing and retail functions, focused on international expansion and implemented a restructuring plan

 

 

Prior to joining Harley-Davidson, Mr. Wandell served as President and Chief Operating Officer of Johnson Controls, Inc. (“Johnson Controls”) and helped manage the company’s entry into the Chinese car-battery market as well as its subsequent joint venture with China’s largest battery manufacturer

 

 

Gained valuable insights into the effective development of executive leadership capabilities and strong corporate cultures through his experience as a senior leader at various companies

 

 

Served on the boards of four other public companies, including the two on which he currently serves

 

 

Holds a bachelor’s degree in business administration from Ohio University and an MBA from the University of Dayton

 

Business Experience:

 

 

Former President and CEO of Harley-Davidson

 

 

Former President and Chief Operating Officer of Johnson Controls

 

 

Former Executive Vice President of Johnson Controls

 

 

Former Corporate Vice President of Johnson Controls

 

 

Former President of the Automotive Experience business of Johnson Controls

 

 

Former President of the Power Solutions business of Johnson Controls

 

Other Board Experience:

 

 

Director of Dana Incorporated

 

 

Former Director of Constellation Brands, Inc. and Clarcor, Inc.

 

 

Former Chairman of Harley-Davidson

THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH

OF THE NOMINEES NAMED ABOVE.

 

DOVER CORPORATION2023 Proxy Statement 19


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Board Oversight and Governance Practices

Our Board is responsible for, and committed to, overseeing our long-term strategic development as well as managing the principal and most significant risks that we face. In carrying out this duty, our Board advises senior management to help drive long-term value creation for our shareholders. The Board delegates specific areas of responsibility to relevant Board committees, as detailed below under the heading “Overview of Committee Responsibilities”, who report on their deliberations to the Board. The following summarizes our Board’s key areas of oversight responsibility.

Board Oversight

 

 
KEY AREAS OF BOARD OVERSIGHT

Long-Term

Business Strategy

 

 

•   One of the primary responsibilities of our Board is the oversight of management’s long-term strategy and planning. Accordingly, our Board maintains a deep level of engagement with management in setting and overseeing Dover’s long-term business strategy.

 

Capital Allocation  

 

•   Our Board is focused on the efficient allocation of capital to drive growth and provide returns to our shareholders. Our capital allocation priorities are organic investments, strategic acquisitions, and the return of capital to our shareholders.

 

•   We consistently return cash to shareholders by paying dividends, which have increased annually over each of the last 67 years.

 

•   We also undertake opportunistic share repurchases as part of our capital allocation strategy, completing $585 million of share repurchases in 2022 including a $500 million ASR program.

 

•   We made $221 million in capital expenditures in 2022, representing 2.6% of revenue, and $171.5 million in capital expenditures in 2021, representing 2.2% of revenue, in line with our priority of organic reinvestment to grow and strengthen our existing businesses.

 

•   We employ a prudent financial policy to support our capital allocation strategy, which includes maintaining an investment grade credit rating.

 

Portfolio

Management

 

 

•   Businesses in our portfolio are continually evaluated for strategic fit.

 

•   We seek to deploy capital in acquisitions in attractive growth areas across our five segments. We focus primarily on bolt-on acquisitions, applying strict selection criteria of market attractiveness (including growth, market landscape, and performance-based competition), business fit (including sustained leading position, revenue visibility, and favorable customer value-add versus switching cost or risk) and financial return profile (accretive growth and margins and double-digit return on invested capital).

 

•   We have sold or divested some of our businesses based on changes in specific market outlook, structural changes in financial performance, value-creation potential, or for other strategic considerations, which included an effort to reduce our exposure to cyclical markets or focus on our higher margin growth spaces.

 

 

DOVER CORPORATION2023 Proxy Statement 20


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 
KEY AREAS OF BOARD OVERSIGHT

Risk
Management

 

 

•   Our Board has established a comprehensive enterprise risk management process to identify and manage risks, and periodically reviews the processes established by management to identify and manage risks and communicates with management about these processes.

 

•   We have established a risk assessment team consisting of senior executives, which annually, with the assistance of a consultant, oversees a risk assessment made at the corporate center, segment and operating company levels and, with that information in mind, performs an assessment of the overall risks our company may face and reports to the Board on that assessment. Each quarter, this team reassesses the risks, the severity of these risks, and the status of efforts to mitigate them.

 

ESG

 

 

•   The full Board has oversight of ESG matters and is regularly briefed on strategic planning, risks, and opportunities related to ESG by senior management, including our CEO.

 

•   Our Compensation Committee has integrated ESG oversight responsibility into our CEO’s individual strategic objectives within the AIP.

 

Culture & Human
Capital
Management
 

 

•   Our entrepreneurial culture depends upon an inclusive approach that values employees’ diversity and contributions.

 

•   We foster an operating culture with high ethical standards that values accountability, rigor, trust, inclusion, respect, and open communication and is designed to encourage individual growth and operational effectiveness. We continue to make significant investments in talent development, including in the areas of digital applications and operational management, and recognize that the growth and development of our employees is essential for our continued success.

 

•   As part of our commitment to strong corporate governance practices, we maintain an active and robust ethics program. Our Code of Conduct applies to all employees and directors of Dover and its subsidiaries. We enforce our Code of Conduct fairly and consistently, regardless of one’s position in Dover, and will not tolerate retaliation against those who report suspected misconduct in good faith.

 

Succession
Planning
 

 

•   Another of the Board’s primary responsibilities is overseeing a sound Board and management succession process. The Board has developed a comprehensive plan to address management succession — both over the long term and for emergency purposes. The framework for the long-term plan includes thoughtful, deliberate monitoring of management beyond our top executives to ensure Dover continues to build a deep internal bench of talent.

 

•   Our Board is also focused on its own succession plan, which drives not only our director selection efforts, but also how we approach Board and committee leadership structure and membership, with a focus on critical board skills, diversity, and independence. The recent appointment of Michael Manley demonstrates our commitment to active Board refreshment.

 

Cybersecurity  

 

•   The full Board is briefed on enterprise-wide cybersecurity risk management and the overall cybersecurity risk environment, and oversees major tasks related to cybersecurity risk management, periodically reviews our response capabilities, and meets with the Chief Information Security Officer on at least an annual basis.

 

•   Dover employs the National Institute of Standards & Technology Framework for Improving Critical Infrastructure Cybersecurity (The NIST Framework). This voluntary guidance developed with much private sector input provides a framework and a toolkit for organizations to manage cybersecurity risk.

 

 

DOVER CORPORATION2023 Proxy Statement 21


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Board Committees

Our Board has four standing committees — the Audit Committee, the Compensation Committee, the Governance and Nominating Committee, and the Finance Committee. The table below sets forth a summary of our committee structure and membership information.

 

         

 DIRECTOR

   Audit
Committee
  Compensation
Committee
  Governance

and

Nominating
Committee

  Finance

Committee

 DEBORAH L. DEHAAS

        

 H. JOHN GILBERTSON, JR.

  

     

 KRISTIANE C. GRAHAM

    

 

 

 MICHAEL F. JOHNSTON

        

 MICHAEL MANLEY

        

 ERIC A. SPIEGEL

  

       (Chair)

 RICHARD J. TOBIN

        

 STEPHEN M. TODD

    (Chair)      

 STEPHEN K. WAGNER*

        (Chair)  

 KEITH E. WANDELL

    

 (Chair)

   

 MARY A. WINSTON*

    

   

 MEETINGS HELD IN 2022

   8  

5

  4  

7

  *

Mr. Wagner and Ms. Winston will retire from the Board effective as of the Annual Meeting, at which time the size of our Board will be reduced to nine members.

 

DOVER CORPORATION2023 Proxy Statement 22


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Overview of Committee Responsibilities

 

 

Audit Committee

 

    Stephen M. Todd (Chair)    

 

    Deborah L. DeHaas

    H. John Gilbertson, Jr.

    Michael Manley

    Eric A. Spiegel

    Stephen K. Wagner

 

 

Key Responsibilities

 

•  Selecting and engaging our independent registered public accounting firm (“independent auditors”)

 

•  Overseeing the work of our independent auditors and our internal audit function

 

•  Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the committee

 

•  Reviewing with management and the independent auditors the audit plan and results of the auditing engagement

 

•  Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting

 

The Audit Committee holds regular quarterly meetings at which it meets separately with each of our independent registered public accounting firm, PwC, our internal audit function, financial management and our general counsel to assess certain matters including the status of the independent audit process, management’s assessment of the effectiveness of internal control over financial reporting and the operation and effectiveness of our compliance program. In addition, the Audit Committee, as a whole, reviews and meets to discuss the contents of each Form 10-Q and Form 10-K (including the financial statements) prior to its filing with the SEC.

 

Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the SEC rules.

 

The Audit Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

 

Compensation Committee

 

    Keith E. Wandell (Chair)    

 

    Kristiane C. Graham

    Michael F. Johnston

    Mary A. Winston

 

 

Key Responsibilities

 

The Compensation Committee, together with our independent directors, approves compensation for the CEO of Dover. The functions of the Compensation Committee also include:

 

•  Approving compensation for executive officers who report directly to the CEO (together with the CEO, “senior executive officers”)

 

•  Granting awards and approving payouts under our 2012 Equity and Cash Incentive Plan (the “2012 LTIP”), our 2021 Omnibus Incentive Plan (the “2021 LTIP”) and our AIP

 

•  Approving changes to our executive compensation plans

 

•  Reviewing and recommending compensation for the Board

 

•  Overseeing succession planning and management development programs

 

The Compensation Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

DOVER CORPORATION2023 Proxy Statement 23


PROPOSAL 1 — ELECTION OF DIRECTORS

 

 

Governance and Nominating Committee

 

    Stephen K. Wagner (Chair)

 

    Kristiane C. Graham

    Michael F. Johnston

 

 

Key Responsibilities

 

•  Developing and recommending corporate governance principles to our Board

 

•  Annually reviewing the requisite skills and characteristics of board members as well as the size, composition, functioning and needs of our Board as a whole

 

•  Considering and recommending to the Board nominees for election to, or for filling any vacancy on, our Board in accordance with our by-laws, our governance guidelines, and the committee’s charter

 

•  Identifying and recommending to our Board any changes it believes desirable in the size and composition of our Board

 

•  Recommending to our Board any changes it believes desirable in structure and membership of our Board’s committees

 

•  Providing oversight of Dover’s practices on political contributions and lobbying expenses and reviewing annually Dover’s political contributions and lobbying expenses

 

The Governance and Nominating Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

 

Finance Committee

 

    Eric A. Spiegel (Chair)       

 

    H. John Gilbertson, Jr.

    Michael Manley

    Keith E. Wandell

    Mary A. Winston

 

 

Key Responsibilities

 

•  Reviewing and recommending for approval by the Board proposed changes to dividend policies, stock splits, and repurchase programs

 

•  Reviewing our capital structure, liquidity, and financing plans

 

•  Reviewing and approving the registration and issuance of debt or equity securities

 

•  Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, capital expenditures

 

•  Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, M&A transactions

 

•  Oversight of treasury, insurance, and tax planning matters

 

The Finance Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

DOVER CORPORATION2023 Proxy Statement 24


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Corporate Governance

Our Board is committed to sound governance practices and regularly reviews and refines our profile to reflect evolving best practices and matters raised by our shareholders. The following summarizes key aspects of our governance framework.

 

 

GOVERNANCE HIGHLIGHTS

 

Independent

Board of Directors

 

 

• All directors are independent, other than our CEO, and our Board has leadership that is independent from management, by way of an independent Chair.

Commitment to Diversity  

 

• Our Board has adopted a policy, reflected in our Corporate Governance Guidelines, requiring that the initial list of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity. Expanding the diversity of the Board will be a key objective as the Board considers future appointments.

Special
Shareholder
Meetings
 

 

• Our by-laws include a right of shareholders holding 15% or more of the voting power of our outstanding stock to call a special meeting of shareholders.

 

Elimination of
Super-majority Provisions

 

 

• All of the supermajority voting provisions in our charter were eliminated in 2019.

Board Committee Refreshment  

 

• Our Board periodically reviews committee composition and chair positions, seeking the appropriate blend of continuity and fresh perspectives on committees.

Annual Majority
Vote Director
Elections &
Mandatory
Resignation Policy
 

 

• All of our directors are elected annually by our shareholders.

 

• Our directors must receive a majority of the votes cast in uncontested elections to be elected.

 

• We have a director resignation policy that requires a director to tender an irrevocable resignation letter to the Board prior to being nominated, contingent on the director not receiving a majority of the votes cast in an uncontested election and the Board’s acceptance of the resignation. The Governance and Nominating Committee will recommend to the full Board whether to accept the resignation or whether to take other action.

Proxy Access  

 

• Our by-laws permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws.

 

Board Leadership Structure

We believe that having an independent leader of the Board is important to the Board’s oversight role and decision-making involving corporate strategy, performance, succession, and other critical matters. Under our current Board leadership structure, our Board has leadership that is independent from management by way of an independent Chair. Our CEO is also a member of the Board as a management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. In our view, this board leadership structure gives us an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.

Board, Committee and Individual Director Evaluations

Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluates one-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. New directors undergo the evaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a more in-depth, comprehensive evaluation for each of our directors.

 

DOVER CORPORATION2023 Proxy Statement 25


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Directors’ Meetings and Attendance

During 2022, the Board met six times. Aside from Mr. Wagner, no director attended less than 75% of the board meetings and standing committee meetings on which he or she served in 2022. Average board attendance was 95% in 2022. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives or non-independent directors present. The Chair of the Board presides at these sessions. We expect our directors to attend the Annual Meeting. All directors then in office attended the 2022 Annual Meeting.

Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls, or in-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with shareholders.

Management Meetings and Site Visits

We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makes on-site visits to our businesses to tour the manufacturing facilities and meet face-to-face with company management and employees. These visits serve as an important tool in the Board’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture.

Director Orientation and Education

All new directors participate in our director orientation program. New directors meet with senior corporate leaders to review and discuss our businesses, operations, strategy, end markets, governance, internal controls, and culture. We believe that our on-boarding approach, coupled with participation in regular Board and committee meetings, as well as additional exposure to our business through participation in management meetings and site visits, whether virtually or in-person, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.

Our Board also encourages directors to participate annually in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.

Director Independence

Our Board has determined that each of the current members of the Board, except for Richard J. Tobin, who is our CEO, has no material relationship with Dover and satisfies all the criteria for being “independent” members of our Board. This includes the criteria established by the New York Stock Exchange (“NYSE”) listing standards, as well as our standards for classification as an independent director which are available on our website at www.dovercorporation.com. Our Board makes an annual determination of the independence of each nominee for director prior to his or her nomination for re-election. No director may be deemed independent unless the Board determines that he or she has no material relationship with Dover, directly or as an officer, shareholder or partner of an organization that has a material relationship with Dover.

Majority Standard for Election of Directors and Mandatory Resignation Policy

Under our by-laws and corporate governance guidelines, the voting standard in director elections is a majority of the votes cast. Under this majority of the votes cast standard, a director must receive more votes in favor of his or her election than votes against his or her election. Abstentions and broker non-votes do not count as votes cast with respect to a director’s election. In contested director elections (where there are more nominees than available seats on the board), the plurality standard will apply. Under the plurality standard, the nominees who receive the most “for” votes are elected to the Board until all seats are filled.

For an incumbent director to be nominated for re-election, he or she must submit an irrevocable resignation letter. The resignation will be contingent on the nominee not receiving a majority of the votes cast in an uncontested election and on the Board’s acceptance of the resignation. If an incumbent director fails to receive a majority of the votes cast in an uncontested election, the Governance and Nominating Committee will make a recommendation to our Board concerning whether to accept or reject the resignation or whether other action should be taken. Our Board will act on the resignation within 90 days following certification of the election results, taking into account the committee’s recommendation. The Board will publicly announce its decision and, if the resignation is rejected, the rationale for its decision.

 

DOVER CORPORATION2023 Proxy Statement 26


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Governance Guidelines and Code of Ethics

Our Board long ago adopted written corporate governance guidelines that set forth the responsibilities of our Board and the qualifications and independence of its members and the members of its standing committees. The Board reviews these guidelines at least annually, in light of evolving best practices, shareholder feedback and the evolution of our business. In 2020, the Board amended the guidelines to require that initial lists of potential director and external CEO candidates presented by third-party search firms include qualified candidates who reflect diverse backgrounds, including diversity of gender and race or ethnicity.

As noted above in the “Governance Highlights” chart and in the “Criteria for Director Nominees” section, enhancing the diversity of the Board will be an important objective in connection with future director appointments.

In addition to the corporate governance guidelines, our Board has a long-standing Code of Conduct setting forth standards applicable to all of our companies and their employees, a code of ethics for our CEO and senior financial officers, and charters for each of its standing committees. All of these documents (referred to collectively as “governance materials”) are available on our website at www.dovercorporation.com.

Procedures for Approval of Related Person Transactions

We generally do not engage in transactions in which our senior executive officers or directors, any of their immediate family members or any of our 5% shareholders have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and an amount that exceeds $120,000, it would be subject to review and approval by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are available with the governance materials on our website.

Under the procedures, management determines whether a proposed transaction requires review under the policy and, if so, presents the transaction to the Governance and Nominating Committee. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves or rejects the transaction. If the proposed transaction is immaterial or it is impractical or undesirable to defer the proposed transaction until the next committee meeting, the Chair of the committee decides whether to (i) approve the transaction and report the transaction at the next meeting or (ii) call a special meeting of the committee to review and approve the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve or reject the transaction. No director may participate in the review of any transaction in which he or she is a related person.

Communication with Directors

The Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (“accounting matters”) and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting matters. Such complaints or concerns may be submitted to Dover, care of our Corporate Secretary or through the communications coordinator, an external service provider, by mail, fax, telephone, or via the internet as published on our website. The communications coordinator forwards such communications to Dover without disclosing the identity of the sender if anonymity is requested.

Shareholders and other interested persons may also communicate with our Board and the non-management directors in any of these same manners. Such communications are forwarded to the Chair of the Governance and Nominating Committee.

 

DOVER CORPORATION2023 Proxy Statement 27


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Shareholder Engagement and History of Board Responsiveness

Shareholder Engagement

In 2022, we continued our focus on regularly engaging with our shareholders. We reached out to holders of approximately 63% of our shares outstanding, and engaged with governance professionals and/or portfolio managers at investors holding approximately 39% of our shares outstanding. Our shareholder engagement team consists of senior management and has also included our Chair from time to time. We also participate in various governance forums with our shareholders and regularly engage with shareholders through industry conferences and meetings.

We received feedback from investors on a range of topics, including corporate governance topics such as shareholder ratification of executive termination pay. We are pleased with the feedback we received with investors on the topics we discussed, and look forward to ongoing engagement with our shareholders in order to continue to incorporate their views into our Board’s decision-making process. We aim to have best-in-class governance and compensation structures at Dover.

 

 

KEY ITEMS OF DISCUSSION AND FEEDBACK

   

 

Performance &

Long-Term

Strategy

  

•   We reviewed our portfolio of businesses, performance, strategic priorities, and focus on continuing to deliver long-term value to shareholders despite challenging market environments.

   

Capital Allocation

  

•   We discussed how our balance sheet strength and history of prudent capital allocation serve as differentiating factors that allow us to remain flexible.

   

Diversity &

Inclusion

  

•   We discussed how we are taking a thoughtful approach to developing a center-led approach to human capital management and diversity and inclusion.

 

•   Shareholders expressed appreciation for continued transparency on the sustainability portion of our website regarding workforce demographics (gender, ethnicity, age).

 

•   We also discussed the progress we made regarding our diversity & inclusion goals, including successfully completing our first annual global engagement survey and expanding the breadth of our unconscious bias training for people leaders.

   

ESG

  

•   We discussed that, in 2022, we continued to execute on our three-year ESG strategy to expand our disclosures, metrics, goals and oversight, and continued to publish against key frameworks (SASB and GRI).

 

•   We discussed that we continued to report progress against our science-based targets to reduce our GHG emissions, and our continuing to report progress against our goal of reducing TRIR by 40% by 2025 (from a 2019 baseline year).

   

Executive

Compensation

  

•   We discussed our severance practices and the potential adoption of a cash severance policy.

 

•   After enhancements to our compensation program in recent years, informed by extensive shareholder feedback, shareholders expressed continued support of our executive compensation program, which ensures continued alignment with our strategy and performance. In addition, they expressed support for continuing to include the effective oversight and management of ESG matters as a strategic objective for our CEO under the AIP.

   

Corporate

Governance

  

•   Our shareholders continued to express their broad support for our governance practices and shareholder rights, including special meeting right, use of annual director elections, and independent Board leadership structure, and thoughtful and active refreshment process.

 

•   Many of our shareholders expressed appreciation for the adoption by the Board in 2022 of an amendment to the Governance and Nominating Committee’s charter to provide for oversight of Dover’s practices on political contributions and lobbying expenses.

 

DOVER CORPORATION2023 Proxy Statement 28


PROPOSAL 1 — ELECTION OF DIRECTORS

 

History of Board Responsiveness

We are committed to being responsive to our shareholders as demonstrated by the number of changes we have made over the years based on their input. In direct response to shareholder feedback, over the past 9 years, Dover has adopted and amended our special meeting right, adopted proxy access, implemented meaningful changes to our executive compensation program, removed all our super-majority voting provisions in our charter, adopted a robust clawback policy, and enhanced our disclosures to investors. The table below highlights many of the changes to our governance structures and compensation program that have been implemented over the past several years informed by shareholder feedback. These changes specifically address shareholders’ areas of focus and input gathered through our extensive shareholder engagements and outreach efforts.

 

        Year   

 

% of Outstanding Shares
Outreached /Engaged

 

   Actions in Response to Shareholder Feedback

 

  LOGO       2023        Ongoing   

 

  Currently engaging with shareholders on corporate governance, executive compensation and sustainability ahead of the 2023 Annual Meeting

  2022    63% / 39%   

 

  Made several ESG accomplishments including:

  Completing one diversity & inclusion goal and staying on track to complete the other

  Continuing to disclose progress against GHG emissions goals and TRIR reduction goals

  Amending Governance and Nominating Committee’s charter to provide for oversight of Dover’s practices on political contributions and lobbying expenses

  2021    59% / 31%   

 

  Continued to maintain a refreshed and diverse board by appointing an additional female director

  Made several ESG accomplishments including:

  Announcing goals to reduce our GHG emissions by 2030

  Undertaking a climate risk assessment aligned with the TCFD reporting framework

  Setting new diversity & inclusion goals

  Establishing a working group of operating companies with a goal of embedding sustainability considerations into product development

  2020   

Winter: 65% / 15%

 

Lead-up to 2020 AGM:

51% / 12%

 

Fall: 59% / 38%

  

 

  Implemented for 2020 executive compensation program:

  Increased proportion of LTIP dedicated to performance shares and shifted from internal TSR to relative TSR as metric for performance shares

  Reduced maximum payout ceiling from 400% to 300% in LTIP

  Reduced ownership threshold required to call a special meeting of shareholders to 15% from 25%

  Adopted a diversity search policy for external director and CEO searches conducted by third-party search firms

  Made several ESG accomplishments including:

  A robust materiality assessment to help identify go-forward focus areas

  The launch of the sustainability portion of our website

  Publication of SASB and GRI indices

  Release of an “investor tear sheet” covering key ESG highlights

  Increased transparency into workforce demographics

  2019   

Lead-up to 2019 AGM:

63% / 37%

 

Fall: 63% / 41%

  

 

  Achieved removal of all supermajority provisions through submission of management proposal and comprehensive retail investor campaign

  Enhanced disclosure regarding individual strategic objectives and financial metrics in AIP

  Adopted comprehensive clawback policy

  Incorporated ESG oversight into CEO’s individual strategic objectives in AIP

  2018    51% / 32%   

 

  Put forth management proposal to remove supermajority voting provisions alongside comprehensive campaign with retail investors to build support – did not pass

  2017    53% / 33%   

 

  Updated AIP to 60% financial metrics / 40% strategic objectives from 50% / 50%

  Put forth management proposal to remove supermajority voting provisions – did not pass

 

  2016    60% / 28%   

 

  Adoption of proxy access

  Put forth management proposal to provide shareholders with written consent right – did not pass

 

  2015    39% / 24%   

 

  Launch of governance-focused shareholder engagement program

 

 

 

2014

  

 

- / -

  

 

  Adoption of special meeting right

 

DOVER CORPORATION2023 Proxy Statement 29


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Environmental, Social, and Governance Oversight (ESG)

Throughout our history, our commitment to corporate responsibility and sustainability has created significant value for our shareholders and stakeholders. Our vision for sustainability at Dover is “a sustainable innovation for every customer challenge.” This vision helps guide our efforts across our portfolio of operating companies and a team of over 25,000 employees. We remain focused on operating sustainably to help meet the goals of our customers, realize the full potential of our employees by fostering a culture that supports and values their efforts, and strengthen the communities in which we operate. For more information on our initiatives and accomplishments, please visit https://www.dovercorporation.com/sustainability/overview.

 

LOGO

ESG Areas of Focus and Materiality Analysis

We pursue sustainability initiatives that support our employees, customers, and communities to ensure our businesses continue to create long-term value for our shareholders. Our eighteen ESG areas of focus — identified and prioritized in our materiality analysis conducted in 2020 – represent the ESG issues most important to our business and stakeholders and have guided our sustainability strategy during our inaugural three-ESG plan. Please see below for the specific areas of focus identified through the analysis. For each sustainability topic, we are applying our resources, expertise, and innovation to improve outcomes and drive results.

 

DOVER CORPORATION2023 Proxy Statement 30


PROPOSAL 1 — ELECTION OF DIRECTORS

 

LOGO

Governance Oversight of ESG

Our governance framework serves as a strong foundation to promote the long-term interests of our shareholders. Our Board oversees our long-term strategic development and enterprise risk, including ESG risks. The Board’s oversight spans a wide array of ESG issues, including those related to climate change, health and safety, diversity and inclusion, ethics and compliance, and long-term environmental protection. As part of its continued focus on sustainability, our Board incorporates ESG oversight into the CEO’s annual performance and compensation evaluation as one of the CEO’s strategic objectives. The Board also has established a comprehensive enterprise risk management process to identify and manage risks, including any risks related to environmental and social issues.

Additionally, our cross-functional Sustainability Steering Committee was established in 2020 to manage ESG issues, typically meets at least four times per year, and provides an update to the Board at least annually. In 2022, we formalized the organization and structure of the Sustainability Steering Committee in a committee charter. The committee is responsible for guiding our sustainability strategy, initiatives, target-setting, performance, and reporting.

 

DOVER CORPORATION2023 Proxy Statement 31


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Progress Toward Goals

We made progress on a number of fronts in line with our three-year ESG plan and are on track to meet each of our goals. These goals include our 2030 science-based targets to reduce both our operational and value chain greenhouse gas emissions as well as our goals to promote employee health and safety and diversity and inclusion. In 2022, we launched our first global employee engagement survey and have expanded the breadth of our unconscious bias training for people leaders. We continue to disclose progress against our greenhouse gas emissions and TRIR reduction goals. Also, as part of our efforts around increasing our focus on developing products that help our customers meet their sustainability goals, we have put in place working groups to develop and share best practices for embedding sustainability considerations into new product development.

 

DOVER CORPORATION2023 Proxy Statement 32


PROPOSAL 1 — ELECTION OF DIRECTORS

 

Directors’ Compensation

Our non-employee directors’ annual compensation is payable partly in cash and partly in common stock in an allocation our Board may adjust from time to time. If any director serves for less than a full calendar year, the compensation to be paid to that director for the year will be pro-rated as deemed appropriate by our Compensation Committee.

Our Board has adopted a policy that directors are expected to hold at any time a number of shares at least equal to the aggregate number of shares they received as the stock portion of their annual retainer during the past five years, net of an assumed 30% tax rate.

 

 

FOR 2022, NON-EMPLOYEE DIRECTOR COMPENSATION WAS AS FOLLOWS:

Annual retainer of $285,000, payable $165,000 in common stock and $120,000 in cash

Audit Committee Chair — additional annual cash retainer of $30,000

Compensation Committee Chair — additional annual cash retainer of $20,000

Governance and Nominating Committee Chair and Finance Committee Chair — additional annual cash retainer of $15,000

Board Chair — additional annual retainer of $170,000, payable $130,000 in cash and $40,000 in common stock

Under our 2021 LTIP, each non-employee director can elect to defer the receipt of 0%, 50%, or 100% of the equity compensation payable in a year until termination of services as a non-employee director. Shares deferred are converted into deferred stock units representing the right to receive one share of our common stock for each unit held at the end of the deferral period. Dividend equivalents are credited on deferred stock units and will be distributed in cash at the time that shares are distributed in settlement of deferred stock units. Messrs. Johnston, Spiegel, Todd, and Wagner and Mses. Graham and DeHaas elected to defer receipt of their 2022 equity compensation and received deferred stock units.

The table below sets forth the compensation paid to our directors for services in 2022.

 

       

NAME

    

FEES EARNED

OR PAID

IN CASH ($)(1)

      

STOCK

AWARDS ($)(2)

      

TOTAL

($)

 

DEBORAH L. DEHAAS

    

 

120,000

 

    

 

165,048

 

    

 

285,048

 

H. JOHN GILBERTSON, JR

    

 

120,000

 

    

 

165,048

 

    

 

285,048

 

KRISTIANE C. GRAHAM

    

 

120,000

 

    

 

165,048

 

    

 

285,048

 

MICHAEL F. JOHNSTON

    

 

250,000

 

    

 

204,995

 

    

 

454,995

 

MICHAEL MANLEY(3)

    

 

 

    

 

 

    

 

 

ERIC A. SPIEGEL

    

 

135,000

 

    

 

165,048

 

    

 

300,048

 

STEPHEN M. TODD

    

 

150,000

 

    

 

165,048

 

    

 

315,048

 

STEPHEN K. WAGNER

    

 

135,000

 

    

 

165,048

 

    

 

300,048

 

KEITH E. WANDELL

    

 

140,000

 

    

 

165,048

 

    

 

305,048

 

MARY A. WINSTON

    

 

120,000

 

    

 

165,048

 

    

 

285,048

 

  (1)

Amounts include the standard annual cash retainer, the Chair’s additional cash retainer, and the additional annual cash retainer for committee Chairs.

  (2)

On November 15, 2022, each of Messrs. Gilbertson and Wandell and Ms. Winston received 1,161 shares of common stock with an aggregate grant date fair market value of $165,048, Messrs. Spiegel, Todd and Wagner and Mses. Graham and DeHaas each received 1,161 deferred stock units with an aggregate grant date fair market value of $165,048, and Mr. Johnston received 1,442 deferred stock units with an aggregate grant date fair market value of $204,995, which included his additional compensation as Board Chair.

  (3)

Mr. Manley was first elected to the Board on February 9, 2023 and accordingly did not receive compensation in 2022.

Our Compensation Committee reviews our non-employee director compensation policy biennially and proposes changes to the Board, as appropriate. The review is performed with the assistance of the Compensation Committee’s independent compensation consultant to assess the competitiveness of our non-employee director compensation policy based on benchmark information from peer companies and relevant compensation surveys.

 

DOVER CORPORATION2023 Proxy Statement 33


Proposal 2 — Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee has appointed the independent registered public accounting firm of PwC to audit the annual accounts of Dover and its subsidiaries for 2023. PwC has audited the financial statements for the Company since 1995. Representatives of PwC are not expected to be present at the Annual Meeting.

Although shareholder ratification of PwC’s appointment is not required by Dover’s by-laws or otherwise, our Board is submitting the ratification of PwC’s appointment for the year 2023 to Dover’s shareholders. If the shareholders do not ratify the appointment of PwC, the Audit Committee will reconsider whether or not to retain PwC as Dover’s independent registered public accounting firm for the year 2023 but will not be obligated to terminate the appointment. Even if the shareholders ratify the appointment of PwC, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in Dover’s interests.

THE BOARD RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT

OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2023.

 

DOVER CORPORATION2023 Proxy Statement 34


PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Audit Committee Report

 

 

The Audit Committee is composed of directors who, in the opinion of the Board, are independent and financially literate under NYSE rules and qualify as audit committee financial experts as defined by the SEC. Information concerning the credentials of the Audit Committee members can be found in the section of this proxy statement entitled “Proposal 1 — Election of Directors.”

 

The Audit Committee operates under a written charter adopted by the Board and available on Dover’s website. The Audit Committee assists the Board in overseeing the quality and integrity of Dover’s financial statements, compliance with legal and regulatory requirements, the qualifications, performance and independence of the independent auditors, and the performance of the internal audit function.

 

Among other things, the Audit Committee appoints the Company’s independent auditors and is directly involved in the selection of the lead audit engagement partner, discusses with the internal audit function and independent auditors the overall scope and plans for their respective audits, reviews the Company’s accounting policies and system of internal controls, reviews significant financial transactions, discusses with management and with the Board processes relating to risk management, pre-approves audit and permissible non-audit services provided by the independent auditors, and approves all fees paid to the independent auditors for such services.

 

For 2022, the Audit Committee engaged the independent registered public accounting firm PwC as Dover’s independent auditor. In selecting PwC, the Audit Committee considered, among other things: the experience and qualifications of the lead audit partner and other senior members of the PwC team; PwC’s historical performance on Dover’s audit and the quality of its communications with the Audit Committee; the results of the most recent internal quality control review or Public Company Accounting Oversight Board (“PCAOB”) inspection; PwC’s independence; its reputation for integrity and competence in the fields of accounting and auditing; the appropriateness of its fees; and its tenure as Dover’s independent auditors, including its understanding of the Company’s global businesses, accounting policies and practices, and internal control over financial reporting.

 

The Audit Committee discussed with PwC the overall scope and plans for the audit of Dover’s 2022 financial statements. The Audit Committee met with PwC, with and without management present, to discuss the results of PwC’s examination, their assessment of internal controls and the overall quality of financial reporting.

 

The Audit Committee reviewed and discussed, with both the management of Dover and PwC, Dover’s 2022 audited financial statements, including a discussion of critical accounting policies, the quality, not just the acceptability, of the accounting principles followed, the reasonableness of significant judgments reflected in such financial statements and the clarity of disclosures in the financial statements. The Audit Committee met a total of eight times in 2022 and 2023 to discuss 2022 quarterly and full-year financial results and related disclosures.

 

The Audit Committee has received the written disclosures and the Rule 3526 letter from PwC required by the applicable requirements of PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and discussed with PwC its independence, including the impact of any relationships or permitted non-auditing services on PwC’s independence. The Audit Committee also discussed with PwC the matters required to be discussed under PCAOB Auditing Standard No. 1301. The Audit Committee has also received written materials addressing PwC’s internal control procedures and other matters required by NYSE listing standards.

 

Based upon the review and discussions referred to above, the Audit Committee recommended that the audited financial statements for the year ended December 31, 2022 be included in Dover’s Annual Report on Form 10-K.

 

Audit Committee:

 

Stephen M. Todd (Chair)

Deborah L. DeHaas

H. John Gilbertson, Jr.

Michael Manley

Eric A. Spiegel

Stephen K. Wagner

 

This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent we specifically incorporate this report by reference, and shall not otherwise be deemed filed under such Acts.

 

 

DOVER CORPORATION2023 Proxy Statement 35


PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Fees Paid to Independent Registered Public Accounting Firm

Fees paid to, or accrued for, PwC for services to us and our subsidiaries for 2022 and 2021 (including reimbursable expenses) were as follows:

 

     
    

2022

   

2021

 

AUDIT FEES

 

$

6,367,600      

 

$

7,487,600      

AUDIT-RELATED FEES

 

$

2,533      

 

$

55,870      

TAX FEES

 

$

39,078      

 

$

182,323      

ALL OTHER FEES

 

$

5,400      

 

$

900      

 

 

 

   

 

 

 

TOTAL

 

$

                6,414,611      

 

$

                7,726,693      

Audit Fees. Audit fees include fees for audit or review services in accordance with generally accepted auditing standards of our consolidated financial statements (including internal control over financial reporting), statutory and subsidiary audits and review of documents filed with the U.S. Securities and Exchange Commission (“SEC”).

Audit-Related Fees. Audit-related fees include fees for assurance and related services that are reasonably related to the audit of our financial statements, including system implementation assessments.

Tax Fees. Tax fees include fees for services that are performed by professional tax staff other than in connection with the audit. These services include tax compliance, consulting and advisory services.

All Other Fees. Other fees include fees for non-audit services not listed above that do not impair the independence of the auditor and are not prohibited by the SEC or PCAOB.

Pre-Approval of Services Provided by Independent Registered Public Accounting Firm

Consistent with its charter and applicable SEC rules, our Audit Committee pre-approves all audit and permissible non-audit services provided by PwC to us and our subsidiaries. With respect to certain services which PwC has traditionally provided, the Audit Committee has adopted specific pre-approval policies and procedures. In developing these policies and procedures, the Audit Committee considered the need to ensure the independence of PwC while recognizing that, in certain situations, PwC may possess the expertise and be in the best position to advise us and our subsidiaries on issues and matters other than accounting and auditing.

The policies and procedures adopted by the Audit Committee allow the pre-approval by the Audit Committee of permissible audit-related services, non-audit-related services and tax services. Under the policies and procedures, pre-approval is generally provided for up to one year and any general pre-approval is detailed as to the particular services or category of services and is subject to a specific budget for each of them. The policies and procedures require that any other services be expressly and separately approved by the Audit Committee prior to such services being performed by the independent auditors. In addition, pre-approved services which are expected to exceed the budgeted amount included in a general pre-approval require separate, specific pre-approval. For each proposed service, the independent auditors and management are required to provide detailed information to the Audit Committee at the time of approval. The Audit Committee considers whether each pre-approved service is consistent with the SEC’s rules and regulations on auditor independence.

All audit-related and non-audit-related services of PwC during 2022 listed above under “Fees Paid to Independent Registered Public Accounting Firm” were pre-approved specifically or pursuant to the procedures outlined above. With respect to any tax services provided by PwC, PwC provided to the Audit Committee the communications required under PCAOB Rule 3524.

 

DOVER CORPORATION2023 Proxy Statement 36


Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) describes our compensation program and how it operates for our NEOs. Our NEOs for 2022 were:

 

   
      NAMED EXECUTIVE OFFICERS

RICHARD J. TOBIN

  

President & CEO

BRAD M. CEREPAK

  

Senior Vice President & CFO

GIRISH JUNEJA

  

Senior Vice President & Chief Digital Officer

IVONNE M. CABRERA

  

Senior Vice President & General Counsel

KIMBERLY K. BORS

  

Senior Vice President & Chief Human Resources Officer

Executive Summary

Our compensation program is based on a pay-for-performance philosophy and is designed to incentivize executives to achieve financial and strategic goals that are aligned with the Company’s long-term business strategy and the creation of sustained, long-term value for our shareholders.

2022 Performance & Results

In 2022, despite an operating environment characterized by input shortages, inflationary cost pressures and foreign currency translation headwinds, we delivered strong financial results, made advancements in organic investments and productivity initiatives, and opportunistically stepped-up the return of capital to our shareholders, in keeping with our strategic priorities.

 

 

Generated revenue of $8.5 billion, up 8% (+9% organic) compared to the prior year.

 

 

Delivered GAAP earnings per share of $7.42, down 4% compared to the prior year, and adjusted earnings per share of $8.45, up 11% compared to the prior year.

 

 

Completed five bolt-on acquisitions for an aggregate consideration of $325.0 million, net of cash acquired and including contingent consideration, which complement and expand upon our existing operations.

 

 

Made $221.0 million in capital expenditures in 2022, representing a recent record-high 2.6% of revenue, in line with our plan to support growth capacity, digitization, innovation, and productivity.

 

 

Generated cash flow provided by operating activities of $805.7 million, and free cash flow of $584.8 million, representing 6.9% of revenue.

 

 

Continued to evolve our operating model to include center-led value capture from digital opportunities, and continued to invest in growth and productivity initiatives, including automation, capacity expansion, and the implementation of common corporate systems and measurement tools.

 

 

Completed $585 million in share repurchases, including a $500 million accelerated share repurchase program.

 

 

Increased our quarterly dividend, marking our 67th consecutive year of dividend increases.

 

DOVER CORPORATION2023 Proxy Statement 37


COMPENSATION DISCUSSION AND ANALYSIS

 

Financial Performance Summary

 

LOGO

 

(1)

Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement.

2022 Pay Decisions Align with Dover’s Performance

Our compensation program structure is designed to align pay outcomes with our shareholders’ experience by emphasizing variable, at-risk pay for our management team, including the NEOs, through our AIP and long-term incentive program.

For 2022, our pay decisions and outcomes were consistent with our pay-for-performance philosophy. Our NEOs made significant progress against their pre-defined individual strategic objectives as evaluated by our Compensation Committee under our AIP. As a result of strong operational and strategic achievements, 2022 annual bonus payouts were modestly above target but below last year. Consistent with our value creation over the three-year performance period of 2020-2022, the performance shares for that period, which vested at the end of 2022 and were based on relative TSR to the companies in the S&P 500 Industrials index, had a payout percentage of 71.4% for our NEOs.

 

DOVER CORPORATION2023 Proxy Statement 38


COMPENSATION DISCUSSION AND ANALYSIS

 

Say on Pay Vote Results and Shareholder Engagement

 

   
94% Say on Pay support            63% Shares Outstanding Contacted            39% Shares Engaged

Our Board has a strong history of engaging with shareholders and soliciting feedback on a range of topics, including our executive compensation program. Historically, our program has received strong shareholder support as expressed during our one-on-one engagement discussions with shareholders and through our Say on Pay vote levels.

At our 2022 annual meeting, approximately 94% of the voting shareholders approved the compensation of the NEOs. At our 2021 annual meeting, over approximately 93% of the voting shareholders approved the compensation of the NEOs. In 2022, we continued our shareholder engagement program. We reached out to holders of approximately 63% of our outstanding shares and engaged with governance professionals and/or portfolio managers of investors holding approximately 39% of our outstanding shares. In addition to the governance topics detailed earlier in this proxy statement, we had thoughtful discussions with our shareholders regarding our compensation program. Shareholders told us they believe our pay practices are aligned with our pay-for-performance philosophy. The Compensation Committee will continue to consider feedback from shareholders, as well as the results from future shareholder advisory votes, in its ongoing evaluation of executive compensation programs and practices at Dover.

 

DOVER CORPORATION2023 Proxy Statement 39


COMPENSATION DISCUSSION AND ANALYSIS

 

Dover’s Alignment with Leading Compensation Governance Practices

 

 

WHAT WE DO

 

   The majority of target NEO pay opportunity is performance based (75% for the CEO; 63% for the other NEOs)

 

   A significant portion of target NEO pay opportunity is tied to Dover stock performance (75% for the CEO; 52% for the other NEOs)

 

   Robust engagement with shareholders to seek feedback on executive compensation programs

 

   Compensation program includes ESG objectives

 

   All long-term incentives are paid in stock, not cash

 

   Executives must hold significant amounts of Dover stock: five-times salary for the CEO, three-times for other NEOs

 

   All long-term incentives are earned or vest over three years

 

   Change in control provisions require double trigger

 

   Comprehensive clawback policy

 

   Executives participate in benefit and employee programs on the same basis as other Dover employees

 

   Our Compensation Committee retains its own independent consultant

 

   Annual compensation risk assessment

 

 

 

WHAT WE DON’T DO

 

   No tax gross ups

 

   No repricing, reloads, or exchanges of stock-settled stock appreciation rights (“SSARs”)

 

   No SSARs granted below fair market value

 

   No hedging or pledging of Dover securities by executives, including margin loans

 

   No dividends are paid on performance shares or restricted stock units (“RSUs”) during the earning or vesting period. Dividend equivalents are accrued on RSUs, but are only paid if the RSUs vest

 

   No special executive retirement arrangements

 

   No NEO cash severance over 2.99x the sum of base salary and target bonus without shareholder approval

 

    No substantial executive perquisites, nor do we own or operate any corporate aircraft

 

 

 

 

DOVER CORPORATION2023 Proxy Statement 40


COMPENSATION DISCUSSION AND ANALYSIS

 

Compensation Principles

Guiding Principles for Dover’s Executive Compensation Program

 

LOGO

Based on these principles, these were the key elements of our executive compensation program in 2022:

 

 

Financial metrics that are clearly linked to the creation of shareholder value: adjusted earnings and three-year relative TSR.

 

 

A focus on our business strategy to ensure our long-term compensation program aligns the interests of our executives with those of our shareholders by placing an emphasis on performance-based stock compensation.

 

 

An annual review by our Compensation Committee of executive compensation levels and the components of our program.

 

 

A reference to the median of our peer group for total direct compensation, with consideration for internal pay equity, sustained performance, specific responsibilities, and experience with comparable market talent.

 

 

Total compensation opportunities designed so that the large majority of compensation is variable and at-risk based on financial, strategic, operational, and share price performance.

 

 

An annual cash bonus plan (the AIP) designed to reward annual financial performance and the attainment of well-defined strategic objectives that the Board believes will assure the long-term success of Dover.

 

 

Executive benefits and programs that are consistent with those offered to other employees. We provide substantially no executive perquisites, nor do we own or operate any corporate aircraft.

 

DOVER CORPORATION2023 Proxy Statement 41


COMPENSATION DISCUSSION AND ANALYSIS

 

Compensation Process

Setting Executive Compensation — Roles

The process for determining our executive compensation program structure and payouts involves the dedicated participation of our Compensation Committee, the independent directors of the Board, the CEO, and our Compensation Committee’s independent consultant. The roles of each in making compensation decisions are:

 

 

LOGO

 

DOVER CORPORATION2023 Proxy Statement 42


COMPENSATION DISCUSSION AND ANALYSIS

 

Setting Executive Compensation – Timeline

The process for making executive compensation decisions for 2022 began with goal setting at the beginning of the year and concluded with the actual compensation payout decisions in early 2023. As described below, this year-long process integrates key factors, such as Dover’s business strategy, our annual budget, and market compensation data.

 

 

LOGO

 

DOVER CORPORATION2023 Proxy Statement 43


COMPENSATION DISCUSSION AND ANALYSIS

 

Executive Compensation Program Peer Group

For assessing executive pay programs and levels, the Compensation Committee selected a group of companies that are similar to Dover in terms of end markets, complexity, revenues and market capitalization. In 2022, with the help of its independent consultant, the Compensation Committee approved changes to the existing peer group for the year 2023. Colfax Corporation was removed from the peer group following the spin-off of their fabrication technology business and Ametek, Inc. was added to the peer group.

 

     FINANCIAL CONSIDERATIONS
(IN USD MILLIONS)
  QUALITATIVE CONSIDERATIONS
 

COMPANY
    

  2022
REVENUE
    2022
MARKET
CAP(1)
   

INDUSTRY

  >20%
GLOBAL
REVENUES
  DOVER-LIKE
STRUCTURE
  SAME ANALYST
COVERAGE(2)
 

AMETEK, INC.

  $ 6,151     $ 32,087     Electrical
Equipment
     
 

CARLISLE COMPANIES

  $ 6,592     $ 12,150     Industrial
Conglomerates
     
 

CORNING INCORPORATED

  $ 14,189     $ 27,015     Electrical
Equipment
     
 

EATON CORPORATION

  $ 20,752     $ 62,419     Electrical
Equipment
     
 

EMERSON ELECTRIC CO.

  $ 19,629     $ 56,810     Electrical
Equipment
     
 

 

FLOWSERVE CORPORATION

 

 

 

$

 

 

3,615

 

 

 

 

 

 

$

 

 

4,010

 

 

 

 

 

Machinery

 

 

 

 

   

 

 

 

FORTIVE CORPORATION

  $ 5,826     $ 22,732     Industrial
Machinery
     
 

 

ILLINOIS TOOL WORKS INC.

 

 

 

$

 

 

15,932

 

 

 

 

 

 

$

 

 

 67,673

 

 

 

 

 

Machinery

 

 

 

 

 

 

 

 

 

 

 

 

INGERSOLL-RAND PLC

 

 

 

$

 

 

5,916

 

 

 

 

 

 

$

 

 

21,157

 

 

 

 

 

Machinery

 

 

 

 

 

 

 

 

 

 

 

 

PARKER-HANNIFIN CORPORATION

 

 

 

$

 

 

15,862

 

 

 

 

 

 

$

 

 

37,366

 

 

 

 

 

 

Machinery

 

 

 

 

   

 

 

 

ROCKWELL AUTOMATION INC.

  $ 7,760     $ 29,555     Electrical
Equipment
     
 

ROPER TECHNOLOGIES, INC.

  $ 5,372     $ 45,824     Industrial
Conglomerates
     
 

SNAP-ON INCORPORATED

  $ 4,843     $ 12,145     Industrial
Machinery
     
 

STANLEY BLACK & DECKER, INC.

  $ 16,947     $ 11,113     Industrial
Machinery
     
 

TEXTRON INC.

  $ 12,869     $ 14,781     Aerospace &
Defense
     
 

XYLEM, INC.

  $ 5,522     $ 19,927     Industrial
Machinery
     
 

75TH PERCENTILE

  $ 15,879     $ 39,481    

 

     
 

MEDIAN

  $ 7,176     $ 24,874    

 

     
 

25TH PERCENTILE

  $ 5,750     $ 14,123    

 

     
 

DOVER

  $ 8,508     $ 19,005      

 

           

 

  (1)

As of 12/31/2022.

  (2)

“Same analyst coverage” means company is covered by at least five of the analysts that cover Dover.

 

DOVER CORPORATION2023 Proxy Statement 44


COMPENSATION DISCUSSION AND ANALYSIS

 

Role of Internal Equity in Setting Executive Compensation

Management and our Compensation Committee consider both market benchmarks (i.e., external competitiveness), as well as the impact each executive role has relative to internal peers (i.e., internal equity), in establishing the executive pay structures used to govern pay.

Retention and Independence of Compensation Consultant

Our Compensation Committee has the authority and discretion to retain external compensation consultants as it deems appropriate. Our Compensation Committee has adopted a policy to ensure the continuing independence and accountability to the committee of any advisor hired to assist the committee in the discharge of its duties. The policy formalizes the independent relationship between the Compensation Committee’s advisor and Dover, while permitting management limited ability to access the advisor’s knowledge of Dover for compensation matters. Under the policy, our Compensation Committee will annually review and pre-approve the services that may be provided to management by the independent advisor without further Compensation Committee approval. Compensation Committee approval is required prior to Dover retaining the independent advisor for any executive compensation services or other consulting services or products above an aggregate annual limit of $50,000.

Since September 2020, our Compensation Committee has retained Meridian Compensation Partners, LLC (“Meridian”) to serve as its independent compensation consultant. Meridian does no other work for and has no other relationships with Dover. Meridian is focused on executive compensation and does not have departments, groups, or affiliates that provide services other than those related to executive compensation and benefits.

Our Compensation Committee looks to its consultant to periodically review and advise regarding the adequacy and appropriateness of our overall executive compensation plans, programs, and practices and, from time to time, to answer specific questions raised by our Compensation Committee or management. Compensation decisions are made by, and are the responsibility of, our Compensation Committee and our Board, and may reflect factors and considerations other than the information and recommendations provided by our Compensation Committee’s consultant.

To ensure independence of the compensation consultant, the consultant reports directly to the Chair of our Compensation Committee and works specifically for the Compensation Committee solely on compensation and benefits.

Meridian did not engage in any projects for management in 2022. Our Compensation Committee has assessed the independence of Meridian and concluded that its work for the Compensation Committee does not raise any conflict of interest.

 

DOVER CORPORATION2023 Proxy Statement 45


COMPENSATION DISCUSSION AND ANALYSIS

 

Elements of Executive Compensation

Variable, Performance-Based Compensation Program Structure Drives Pay-For-Performance Alignment

The pay packages of Dover executives consist predominantly of incentive-based pay, both annual and long-term. Each of the compensation components has a specific role in the overall design of our executive pay program. While the components are designed to be mutually reinforcing, care is taken to minimize overlap between them. The following table provides an overview of the 2022 compensation program structure.

 

Component

  Pay Element       2022 Metrics & Weighting       Objectives

 

Base Salary

 

 

 

Cash

 

 

 

  n/a

 

 

 

  Attract and retain qualified executives

 

  Benchmarked to peer group median while also considering additional factors such as experience and performance in role

 

Annual Incentive Plan (AIP)

  Cash  

 

  60% Financial Results:

 

  Adj. Earnings (100%)

 

  40% Individual Strategic

 

  ESG oversight included in CEO and select NEO individual strategic objectives

 

 

  Intended to drive profitability, growth, and progress against strategy

 

  Individual objectives are focused on a limited and measurable set of goals to benefit shareholders over the long-term

 

  Including ESG oversight in objectives establishes clear tone at the top regarding the importance of ESG

 

Long-Term Incentive

Plan

  Performance Shares  

 

  40% LTIP weighting

 

   Performance Criteria: 3-Year relative TSR with the S&P 500 Industrials index companies as the comparator group

 

 

  Focus executives on shareholder value creation

 

  Relative TSR closely aligns our executive-level measurement system with the experience of shareholders

 

  SSARs  

 

  40% LTIP Weighting

 

  Performance Criteria: Dover stock price, exercisable three years after grant date and remain exercisable for another seven years (subject to 10-year stock price movement)

 

 

  Focus executives on share price appreciation

 

  SSARs are an important component of our program, reflecting input from investors, many of whom acknowledge the role SSARs play in emphasizing growth and go-forward value creation

 

  RSUs  

 

  20% LTIP weighting

 

  Performance Criteria: Dover stock price; awards vest ratably over three years

 

 

  Retention, ownership, and full alignment with the shareholder experience

 

Benefits

 

 

 

Consistent with other similarly situated employees

 

 

DOVER CORPORATION2023 Proxy Statement 46


COMPENSATION DISCUSSION AND ANALYSIS

 

2022 Target Pay Mix

For 2022, the vast majority of the CEO’s and other NEOs’ target pay mix was composed of “at risk” incentive-based pay as shown in the chart below. Additionally, the target pay mix was heavily weighted toward long-term performance and tied to share performance, with the annual incentives focused on key short-term drivers and progress on strategy.

 

LOGO

Annual Incentive Plan Compensation

An annual bonus may be earned each year based on an NEO’s performance against objectives tied to our financial performance as well as individual strategic goals. Each NEO’s bonus target amount is determined in reference to market benchmarking and according to the scope and complexity of the NEO’s functional responsibilities, overall impact on our results, strategic leadership, and managerial responsibility. We believe that balancing the measurement of performance for the annual bonus between financial and strategic objectives is important in mitigating risk and executing on our long-term strategy for value creation.

Each executive officer is eligible for a bonus equal to his or her base salary multiplied by his or her target award percentage multiplied by the Overall Payout Factor (which is the sum of the Financial Objective Factor (weighted 60%) and the Strategic Objectives Factor (weighted 40%)).

 

LOGO

2022 AIP Financial Objective Factor – Target

The Financial Objective Factor in the 2022 AIP was calculated based on Adjusted Earnings. In setting the financial objective, our Compensation Committee considered our annual budget, operational priorities, plans for capital allocation, historical performance, and external factors, among other items. The target performance level for the financial objective was established at the beginning of the fiscal year and provided for appropriate adjustments for acquisitions and dispositions occurring during the year. For this measure, our Compensation Committee established threshold, target, and maximum levels of performance, as well as a payout percentage curve that relates each level of performance to a payout percentage.

 

DOVER CORPORATION2023 Proxy Statement 47


COMPENSATION DISCUSSION AND ANALYSIS

 

Threshold and maximum performance levels are set at 85% and 107%, respectively, of target. There is no payout on the Financial Objective Factor if performance is below the threshold. At threshold, the payout percentage curve begins at 50%. If performance is at the target level, the payout percentage is 100%. For performance at or above the maximum level of achievement, the payout percentage is capped at 200%.

2022 AIP Financial Objective Factor – Results

Following the end of 2022, we calculated the Financial Objective Factor as follows:

 

   

2022 AIP FINANCIAL OBJECTIVE RESULTS (in millions)

  

 

  TARGET
PERFORMANCE
LEVEL
  ACTUAL
PERFORMANCE
LEVEL
  PAYOUT%
(BEFORE
WEIGHTING)
 

WEIGHTING

OF MEASURE

  WEIGHTED
PAYOUT%

Adjusted Earnings(1)

 

$1,248

 

$1,213

 

90.7%

 

60%

 

 54.4%

Financial Objective Factor                    

 

 54.4%

 

  (1)

Definitions and reconciliations of non-GAAP measures are included at the end of this proxy statement.

2022 AIP Individual Strategic Objectives Factor

The Strategic Objectives Factor is based on the achievement of individual strategic objectives designed to create long-term value for our shareholders. The strategic objectives for the CEO were developed by our Compensation Committee at the beginning of the year, approved by our independent directors, and communicated to the CEO in February. The individual strategic objectives were based on specific strategic initiatives that the Board and management agreed were important to achieve in 2022. These objectives were cascaded to the CEO’s direct reports, as appropriate, based on their responsibilities or business portfolio. The Board monitored progress on the CEO’s strategic objectives and, following the end of the year, reviewed the CEO’s performance against these objectives when determining his annual bonus.

Following the end of 2022, our Compensation Committee determined for each NEO a Strategic Objectives Factor between 0% and 200%. Our Compensation Committee believes such judgment is an important risk-mitigating element to our compensation program and provides an opportunity to further align executive compensation with long-term value creation. To make this determination, our Compensation Committee took into account each executive’s execution against his or her personal strategic objectives for the year and the executive’s overall performance for the year.

 

DOVER CORPORATION2023 Proxy Statement 48


COMPENSATION DISCUSSION AND ANALYSIS

 

Strategic Objectives Factor — CEO

The table below summarizes the individual strategic objectives, weightings, and results the Compensation Committee considered for our CEO in determining his Strategic Objectives Factor for 2022.

 

 

Strategic Objectives & Accomplishments – Richard J. Tobin (President & CEO)

 

 Company Goals (20%)

 

 

 Progressed on our productivity initiatives and on our margin expansion initiatives, principally enabled by advances in e-commerce adoption and back-office consolidation.

 Continued to build on our four enterprise capabilities.

 Helped deliver additional margin upside by capturing synergies from recent acquisitions.

 

 

 Capital Markets and Shareholder Engagement (20%)

 

 

 Engaged with investors regarding our long-term strategy execution and value-creation priorities.

 Reached out to holders of approximately 63% of outstanding shares and engaged with investors holding approximately 39% of outstanding shares.

 

 

 Portfolio Management (20%)

 

 

 Effectively deployed capital to increase the value of our portfolio, including through investments in organic growth and $325 million deployed toward acquisitions.

 Increased capital expenditures to a recent record of $221 million.

 Completed the integration of several recent acquisitions that provide exposure to high-growth technologies and markets.

 

 

 Talent, Succession Planning & Workforce Diversity (20%)

 

 

 Completed several objectives in the multi-year strategy to help ensure that our culture continues to take an inclusive approach that values diversity.

 Helped lead the expansion of our unconscious bias training for people leaders.

 Completed talent and succession planning review.

 

 

 ESG (20%)

 

 

 Implemented the final year of a multi-year ESG strategic plan by continuing to report progress toward public facing goals on ESG topics, including GHG emissions; we are on track to meet each of our goals.

 Completed our first annual global engagement survey.

 Developed and reviewed new three-year ESG plan with the Board.

 

 

Our Compensation Committee evaluated Mr. Tobin’s achievements against his strategic objectives and assigned him a Strategic Objectives Factor of 120%.

 

DOVER CORPORATION2023 Proxy Statement 49


COMPENSATION DISCUSSION AND ANALYSIS

 

Strategic Objectives Factor — Other NEOs

The following table summarizes the individual strategic objectives and results the Compensation Committee considered for our other NEOs in determining their respective Strategic Objectives Factors for 2022.

 

 

Brad M. Cerepak (Senior Vice President & CFO)

Strategic Objectives & Accomplishments

 

 
 

 

Corporate Strategy (25%)

 Evaluated options for capital deployment.

 Helped Dover opportunistically step-up the return of capital through $585 million in share repurchases and to raise our dividend for the 67th consecutive year.

 Supported the alignment of key metrics and market positions to drive shareholder communications.

 

Capital Structure Analysis (25%)

 Assisted in the preparation of our three-year capital structure plan.

 

Finance Transformation and Control Environment (25%)

 Continued our commitment to optimize the structure of our finance team and improve process efficiency of shared services.

 Enhanced our internal controls environment.

 

Audit Plan Initiatives (25%)

 Conducted assessment of internal audit program and improved the efficiency of audits.

 

 

Assigned Strategic Objectives Factor of 120%

 

 

 

 

 

Girish Juneja (Senior Vice President & Chief Digital Officer)

Strategic Objectives & Accomplishments

 

 
 

 

Digital Strategy (25%)

 Supported our strategic initiatives and priorities by assessing the digital capabilities of acquisition targets and driving adoption of shared services and common practices.

 Helped progress our information technology centralization initiatives.

 

Digital Customer Experience (25%)

 Continued support in building common platforms to enhance the customer experience and deliver efficiencies by enabling automated transactions.

 

Data Security (25%)

 Supported our enterprise-wide strategy for data security.

 

Product Development (25%)

 Helped expand our connected software and machine learning augmented solutions, which were built to integrate and work with our equipment and component offerings.

 

 

Assigned Strategic Objectives Factor of 120%

 

 

 

 

 

DOVER CORPORATION2023 Proxy Statement 50


COMPENSATION DISCUSSION AND ANALYSIS

 

 

Ivonne M. Cabrera (Senior Vice President, General Counsel & Secretary)

Strategic Objectives & Accomplishments

 

 
 

 

ESG (25%)

 Continued effective leadership of our Sustainability Steering Committee and key roles in driving initiatives and communications aligned with completing our initial three-year ESG plan and developing a new three-year plan.

 

Commercial Contracts (25%)

 Supported the standardization of contract practices and tools across the enterprise.

 

Legal Spend Optimization (25%)

 Expanded the use of technology to collect and leverage data to drive cost optimization initiatives and support strategic priorities.

 

Intellectual Property (25%)

 Continued to engage with operating companies to align intellectual property activities with strategic priorities and to develop, product and maintain their intellectual property rights.

 

 

Assigned Strategic Objectives Factor of 120%

 

 

 

 

 

Kimberly K. Bors (Senior Vice President & Chief Human Resources Officer)

Strategic Objectives & Accomplishments

 

 
 

 

Enterprise Talent Management (25%)

 Continued to enhance our talent management processes, capabilities and succession depth across the enterprise.

 

Strategic HR Project Initiatives (25%)

 Established strategy to harmonize and streamline aspects of global benefits programs.

 Supported the roll out of a global career architecture and compensation structure.

 

ESG/Diversity & Inclusion (25%)

 Completed our first annual global engagement survey.

 Helped implement Diversity & Inclusion roadmap initiatives, including through the expansion of our unconscious bias training for employees with direct reports.

 

Global HR Operating Model (25%)

 Helped implement the global operating model designed to expand shared services and centers of expertise and improve the operational effectiveness of the human resources function.

 

 

Assigned Strategic Objectives Factor of 120%

 

 

 

The Overall Payout Factors resulting from the above Financial Objective Factors and the Strategic Objectives Factors resulted in the payouts set forth in the 2022 Summary Compensation Table.

 

DOVER CORPORATION2023 Proxy Statement 51


COMPENSATION DISCUSSION AND ANALYSIS

 

Long-Term Incentive Compensation

The following table summarizes the components of awards under our LTIP and the related performance criteria for awards granted in 2022. Note that all components are paid in stock rather than cash to encourage shareholder alignment through stock ownership.

 

     
Pay Element    2022 Weighting & Performance Criteria   Objectives
   

Performance Shares

  

 

   40% LTIP weighting

 

  Performance Criteria: 3-Year relative TSR with the S&P 500 Industrials index companies as the comparator group

 

  Focus executives on shareholder value creation

   

Stock Settled Stock Appreciation Rights

  

   40% LTIP weighting

  Performance Criteria: Dover stock price, exercisable three years after grant date and remain exercisable for seven years (subject to 10-year stock price movement)

 

  Focus executives on share price appreciation

   

Restricted Stock Units

  

   20% LTIP weighting

  Performance Criteria: Dover stock price; awards vest ratably over three years

 

  Retention and full alignment with the shareholder experience

Performance Shares – Relative TSR Metric

In February 2022, the Compensation Committee approved the grant of performance shares to each of our NEOs. Performance shares are earned based on our relative TSR performance against the S&P 500 Industrials index companies measured over the three-year performance period ending December 31, 2024. The relative TSR metric provides shareholders with a transparent and simple measure to gauge our performance against companies in our industry, and aligns the interests of our executives with our shareholders. The relative TSR targets for our performance shares are highly competitive. Awards are earned three years after the grant, provided relative TSR exceeds a threshold level with a maximum payout capped at 300% of target.

Payouts are made on a sliding scale using the following formula based on our relative TSR performance:

 

LOGO

Performance share payouts will be capped at 100% if absolute TSR is negative over the performance period.

 

DOVER CORPORATION2023 Proxy Statement 52


COMPENSATION DISCUSSION AND ANALYSIS

 

Performance Shares Vested in 2022

The performance shares vested in 2022 are based on the three-year performance period of 2020-2022, and the performance is measured on relative TSR as described above. Consistent with our value creation over the three-year performance period, the performance shares vested in 2022 had a payout percentage of 71.4% for our NEOs.

 

       
     

Target # of Shares

 

      

Actual Shares Awarded

 

         

Richard J. Tobin

     26,698          19,062       

Brad M. Cerepak

     6,674          4,765       

Girish Juneja

     1,669          1,192       

Ivonne M. Cabrera

     2,670          1,906       

Kimberly K. Bors

     1,669          1,192         

Stock Settled Stock Appreciation Rights

Stock Settled Stock Appreciation Rights (SSARs) give our NEOs the ability to participate in the price appreciation of a set number of shares of Company stock. Once SSARs vest, an NEO may exercise them any time prior to the expiration date and the proceeds from the exercise are paid to the NEO in the form of shares of Dover common stock to encourage continued share ownership and shareholder alignment. SSARs vest and become exercisable 3 years after the grant date and remain exercisable for seven years, which means the awards are subject to 10-year stock price movement thus aligning executive interests with shareholder interests over the long term. Importantly, in light of our active acquisition program, SSARs’ forward-looking orientation is effective for incentivizing our newly-acquired companies and employees, who must create new value in order to realize gains. Furthermore, SSARs’ 10-year life cycle is essential to managing value creation with a business that has a portfolio of industrial companies whose economic cycles vary.

Restricted Stock Units

RSU grants attract and retain NEOs by providing them with some of the benefits associated with stock ownership during the vesting period. Executives do not actually own the shares underlying the units, nor do they enjoy the benefits of ownership such as dividends and voting, until the vesting conditions are satisfied. Once an NEO’s RSUs vest, the NEO receives a number of shares of Dover common stock equivalent in number to the vested units and receives a cash amount equal to any dividend equivalents that were accrued during the vesting period, net of withholding taxes.

Other Benefits

401(k), Pension Plan and Health & Wellness Plans

Our executive officers are able to participate in retirement and benefit plans generally available to our employees on the same terms as other employees. Dover and most of our businesses offer a 401(k) plan to substantially all U.S.-based employees and provide a Company matching contribution denominated as a percentage of the amount of salary deferred into the plan by a participant during the course of the year. Some of our U.S.-based employees also participate in a tax-qualified defined benefit pension plan. Effective December 31, 2013, we closed both our qualified and non-qualified defined benefit retirement plans to new employees. We intend to freeze any future benefit accruals in both plans effective December 31, 2023. All of our U.S.-based employees are offered a health and wellness plan (including health, term life and disability insurance). NEOs do not receive enhanced health and wellness benefits.

Non-Qualified Retirement Plans

We offer two non-qualified plans with participation generally limited to individuals whose annual salary and bonus earnings exceed the Internal Revenue Service (“IRS”) limits applicable to our qualified plans: our Pension Replacement Plan (“PRP”) and our deferred compensation plan. Participation in the deferred compensation plan is open to employees with an annual salary equal to or greater than $250,000 for 2022 deferral elections.

 

DOVER CORPORATION2023 Proxy Statement 53


COMPENSATION DISCUSSION AND ANALYSIS

 

After December 31, 2009, benefits under the PRP before offsets are determined using the benefit calculation and eligibility criteria as under the pension plan, except that IRS limits on compensation and benefits do not apply. Prior to December 31, 2009, the participants in the PRP accrued benefits greater than those offered in the pension plan. Effective January 1, 2010, we modified this plan so that executives subject to IRS compensation limits will accrue future benefits that are substantially the same as benefits under the pension plan. Individuals who participated in the PRP prior to January 1, 2010 will receive benefits calculated under the prior benefit formula through December 31, 2009 and benefits calculated under the lower PRP benefit formula on and after January 1, 2010. Amounts receivable by the executives under the PRP are reduced by any amounts receivable by them under the pension plan, any qualifying profit sharing plan, Company-paid portion of social security benefits, and the amounts of the Company match in the 401(k) plan.

Effective December 31, 2013, the PRP was closed to new employees. All eligible employees as of December 31, 2013 will continue to earn PRP benefits through December 31, 2023 as long as they remain employed by Dover and its affiliates. Effective December 31, 2023, Dover intends to eliminate any future benefit accruals consistent with the freezing of benefit accruals under the pension plan.

We offer a deferred compensation plan to allow participants to elect to defer their receipt of some or all of their salary, bonuses and any payout of a cash performance award. The plan permits executive officers to defer receipt of part of their compensation to later periods and facilitates tax planning for the participants. Effective January 1, 2022, the deferred compensation plan was amended to also provide for automatic Company contributions for participants who do not also participate in the PRP or have a present value benefit under the PRP of less than $100,000.

Executive Non-Change-in Control Severance Plan

All of our NEOs are eligible to participate in our severance plan. Under the plan, if we terminate an NEO’s employment without cause (as defined in the severance plan), the NEO will generally be entitled to receive twelve months of salary plus target annual cash bonus, outplacement services, and healthcare benefits continuation, and a prorated annual cash bonus and a prorated performance share award for time worked during the year. In addition, Mr. Tobin is entitled to receive certain severance payments and benefits under his employment agreement in the event his employment is terminated by Dover without cause or by him for good reason. See “Potential Payments Upon Termination or Change in Control.”

Senior Executive Change in Control Severance Plan

Our Senior Executive Change in Control Severance Plan (the “CIC Severance Plan”) establishes the severance benefits payable to eligible executives if they are involuntarily terminated following a change in control. All of our NEOs are eligible to participate in the CIC Severance Plan. An executive eligible to participate in the CIC Severance Plan as of the date of a change in control will be entitled to receive severance payments under the plan if, within 24 months after the change in control, either the executive’s employment is terminated by the Company without “cause” or he or she terminates employment for “good reason” (as such terms are defined in the plan). The severance payments and benefits will consist of: a lump sum payment equal to 2.0 times their annual salary and target bonus, a prorated annual cash bonus at target, full acceleration of all unvested SSARs and RSUs, performance share payout at target for all in-cycle awards, outplacement services, and a lump sum payment equal to the cost of Consolidated Omnibus Budget Reconciliation Act (COBRA) health care benefit continuation of the executive and covered family members for 24 months. See “Potential Payments Upon Termination or Change in Control.” No executive may receive severance benefits under more than one plan or arrangement. Dover does not provide tax gross-ups in the CIC Severance Plan.

Executive Cash Severance Policy

Following discussions with investors, on February 9, 2023, the Compensation Committee adopted a new executive officer cash severance policy that applies to any new employment agreement, severance agreement or separation agreement with any executive officer of the Company or any new severance plan or policy covering any executive officer of the Company. The policy provides that cash severance benefits under any such new arrangement will be limited to no more than 2.99 times the sum of the executive officer’s base salary plus target annual bonus, unless approved by shareholders. The Compensation Committee believes that this policy will serve the interests of shareholders while preserving the Company’s ability to remain competitive in the market for talent.

 

DOVER CORPORATION2023 Proxy Statement 54


COMPENSATION DISCUSSION AND ANALYSIS

 

Other Elements of Compensation

Clawback Policy

In 2019, we adopted a formal clawback and recoupment policy applicable to our executive officers. If our Board determines, in its sole discretion acting in good faith, that any executive officer has engaged in fraud or intentional misconduct that caused or was a significant contributing factor to a material restatement of all or a portion of our consolidated financial statements, the Board may, to the extent permitted by law, and to the extent it determines that it is in Dover’s best interest, require reimbursement to Dover for, or reduce or cancel, any incentive compensation paid, granted or credited to such executive officer on or after November 7, 2019. We may effect any such recoupment by requiring the executive officer to pay Dover the relevant amount, by set-off, by reducing future compensation or by such other means or combination of means as the Board determines to be appropriate. The Company expects to update its clawback and recoupment policy as may be necessary to comply with the NYSE listing standards issued in connection with the SEC rules promulgated under the Dodd-Frank Act.

Apart from the clawback policy described above, our PRP includes clawback provisions for termination for cause and the severance plan and CIC Severance Plan provide for clawback of benefits for breaches of the plan.

Anti-hedging and Anti-pledging Policy

Our Securities Trading and Confidentiality Policy prohibits directors, executive officers and any employee who has previously received or receives any type of long-term incentive plan award, and certain persons and entities related to any such persons, from engaging in short-sales, transactions in derivative securities or any other form of hedging transaction designed to hedge or offset any decrease in the market value of Dover securities granted to or held by such persons. In addition, such persons may not hold Dover securities in a margin account or pledge securities as collateral for a loan or any other obligation.

Perquisites

We provide substantially no executive perquisites, other than the payment for executive physicals, nor does the Company own or operate any corporate aircraft. Management and our Compensation Committee believe that providing significant perquisites to executive officers would not be consistent with our overall compensation philosophy. As a result, we do not provide executive officers with perquisites such as social club memberships, company cars or car allowances, or financial counseling..

Shareholding Guidelines

We believe that our executives will most effectively pursue the long-term interests of our shareholders if they are shareholders themselves. As a result, share ownership guidelines are in place for all NEOs (subject to exceptions that may be granted by our Compensation Committee for significant personal events or retirement planning). Our CEO is required to hold shares equal in value to five-times salary and our other NEOs are required to hold shares equal in value to three-times salary. Our policy requires that NEOs hold/retain all equity grants until the share ownership guidelines are met. Based on current share ownership, all executives serving as NEOs are currently in compliance with the guidelines. Our Compensation Committee reserves the right to provide a portion of annual bonus in stock for any officer who fails to meet or make satisfactory progress toward satisfying the guidelines.

Risk Assessment

In 2022, Dover, with the assistance of Willis Towers Watson, updated the formal risk assessment that was conducted in 2020 for all our incentive compensation programs that have material impact on our financial statements. Willis Towers Watson inventoried incentive compensation programs at the corporate and operating company levels globally and conducted in-depth reviews of financially material plans, identified based on expected spend and income statement accounts tied to the program. The reviews focused on both the plan design features as well as internal risk mitigation controls in place. Based on this assessment, we have concluded that Dover’s compensation practices and policies do not create risks that are reasonably likely to have a material adverse effect on the Company.

 

DOVER CORPORATION2023 Proxy Statement 55


Compensation Committee Report

 

 

We reviewed and discussed with management the Compensation Discussion and Analysis for the year ended December 31, 2022.

 

Based on the review and discussions referred to above, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Dover’s Annual Report on Form 10-K for the year ended December 31, 2022.

 

Compensation Committee:

    

Keith E. Wandell (Chair)

Kristiane C. Graham

Michael F. Johnston

Mary A. Winston

    

 

This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference, and shall not otherwise be deemed filed under such Acts.

 

 

DOVER CORPORATION2023 Proxy Statement 56


Executive Compensation Tables

Summary Compensation Table

The Summary Compensation Table and notes show all remuneration for 2022 provided to our NEOs, consisting of the following officers:

 

   

Our President & CEO;

 

   

Our Senior Vice President & CFO; and

 

   

Our three other most highly compensated executive officers as of the end of 2022.

The determination of the most highly compensated executive officers is based on total compensation paid or accrued for 2022, excluding changes in the actuarial value of defined benefit plans and earnings on nonqualified deferred compensation balances.

 

  Name and Principal Position   Year     Salary
($)
    Bonus
($)(1)
    Stock
Awards
($)(2)
    Option
Awards
($)(3)
    Non-Equity
Incentive Plan
Compensation
($)(4)
    Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
    All Other
Compensation
($)(6)
    Total ($)  

  Richard J. Tobin

  President & Chief

  Executive Officer

 

 

2022

 

 

 

1,261,250

 

 

 

1,951,101

 

 

 

6,213,263

 

 

 

4,201,489

 

 

 

0

 

 

 

0

 

 

 

516,149

 

 

 

14,143,252

 

 

 

2021

 

 

 

1,235,000

 

 

 

2,964,000

 

 

 

5,808,134

 

 

 

3,580,475

 

 

 

0

 

 

 

0

 

 

 

498,251

 

 

 

14,085,860

 

 

 

2020

 

 

 

1,217,500

 

 

 

1,722,825

 

 

 

6,024,137

 

 

 

2,674,529

 

 

 

0

 

 

 

0

 

 

 

343,347

 

 

 

11,982,338

 

  Brad M. Cerepak

  Senior Vice President &

  Chief Financial Officer

 

 

2022

 

 

 

747,448

 

 

 

771,151

 

 

 

1,467,135

 

 

 

992,011

 

 

 

0

 

 

 

0

 

 

 

27,865

 

 

 

4,005,610

 

 

 

2021

 

 

 

731,000

 

 

 

1,169,600

 

 

 

1,452,071

 

 

 

895,111

 

 

 

0

 

 

 

182,670

 

 

 

29,577

 

 

 

4,460,029

 

 

 

2020

 

 

 

718,000

 

 

 

679,830

 

 

 

1,505,922

 

 

 

668,627

 

 

 

0

 

 

 

649,315

 

 

 

35,329

 

 

 

4,257,023

 

  Girish Juneja

  Senior Vice President &

  Chief Digital Officer

 

 

2022

 

 

 

507,500

 

 

 

365,639

 

 

 

517,814

 

 

 

350,107

 

 

 

0

 

 

 

0

 

 

 

43,312

 

 

 

1,784,372

 

 

 

2021

 

 

 

500,000

 

 

 

560,000

 

 

 

341,738

 

 

 

210,626

 

 

 

0

 

 

 

0

 

 

 

51,884

 

 

 

1,664,248

 

 

 

2020

 

 

 

491,404

 

 

 

325,500

 

 

 

376,533

 

 

 

167,157

 

 

 

0

 

 

 

0

 

 

 

38,967

 

 

 

1,399,561

 

  Ivonne M. Cabrera

  Senior Vice President &

  General Counsel

 

 

2022

 

 

 

589,400

 

 

 

460,275

 

 

 

690,353

 

 

 

466,851

 

 

 

0

 

 

 

0

 

 

 

17,484

 

 

 

2,224,363

 

 

 

2021

 

 

 

560,000

 

 

 

627,200

 

 

 

546,632

 

 

 

336,979

 

 

 

0

 

 

 

0

 

 

 

17,922

 

 

 

2,088,733

 

 

 

2020

 

 

 

550,000

 

 

 

364,560

 

 

 

602,459

 

 

 

267,460

 

 

 

0

 

 

 

648,534

 

 

 

21,616

 

 

 

2,454,629

 

  Kimberly K. Bors

  SVP & CHRO

 

 

2022

 

 

 

460,125

 

 

 

332,302

 

 

 

365,896

 

 

 

247,414

 

 

 

0

 

 

 

0

 

 

 

37,616

 

 

 

1,443,353

 

 

 

2021

 

 

 

450,000

 

 

 

504,000

 

 

 

362,136

 

 

 

223,247

 

 

 

0

 

 

 

0

 

 

 

43,615

 

 

 

1,582,998

 

 

  (1)

Bonus amounts generally represent payments under our AIP for the year indicated, for which payments are made in the first quarter of the following year. The AIP constitutes a non-equity incentive plan under FASB ASC Topic 718. Although they are based on the satisfaction of pre-established performance targets, AIP amounts are reported in the bonus column rather than the non-equity incentive plan compensation column to make clear that they are annual bonus payments for the year indicated.

 

  (2)

The amounts generally represent (a) the aggregate grant date fair value of performance shares granted during the year indicated, and (b) the aggregate grant date fair value of restricted stock unit awards granted during the year, in each case, calculated in accordance with FASB ASC Topic 718. The amounts set forth in the table do not correspond to the actual value that might be realized by the named executives. As market condition awards, the performance share awards granted in 2020 and after were valued using the Monte Carlo simulation model. For a discussion of the assumptions relating to calculation of the cost of equity awards, see Note 15 to the Notes to the Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

 

    

The grant date fair value for the 2020 performance share awards was $165.71, the grant date fair value for the 2021 performance share awards was $148.29 and the grant date fair value for the 2022 performance share awards was $196.40. The grant date fair value of 2022 RSU awards was $160.21. All RSU grants are eligible for dividend equivalent payments which are paid upon vesting.

 

  (3)

The amounts represent the aggregate grant date fair value of SSAR awards granted during the year indicated, calculated in accordance with FASB ASC Topic 718, and do not correspond to the actual value that may be realized by the named executives. The grant date fair value for the 2022 SSAR awards was calculated using a Black-Scholes value of $42.07 per SSAR.

 

DOVER CORPORATION2023 Proxy Statement 57


EXECUTIVE COMPENSATION TABLES

 

  (4)

See Note (1) for a discussion of annual bonuses under the AIP as non-equity incentive plan compensation.

 

  (5)

Amounts represent changes in present value of accumulated benefits under the pension plan and/or PRP during the year indicated. For more information, see “Executive Compensation Tables — Pension Benefits through 2022.”

 

  (6)

Amounts for 2022 represent: (i) 401(k) matching contributions of $10,675 for Mr. Cerepak and Ms. Cabrera and $13,725 for Messrs. Tobin and Juneja, and Ms. Bors, (ii) dividends received on RSUs in the amount of $371,593, $17,190, $4,020 and $6,809 and $1,957 for Messrs. Tobin, Cerepak, Juneja and Mses. Cabrera and Bors respectively, and (iii) for Messrs. Tobin and Juneja, and Ms. Bors, respectively, $130,831, $25,566 and $21,934 for the 4.5% non-elective contributions in the nonqualified deferred compensation plan, since they do not participate in the PRP.

CEO Employment Agreement

In connection with the hiring of Mr. Tobin as our CEO, Mr. Tobin and Dover entered into a three-year employment agreement commencing May 1, 2018. In recognition of Mr. Tobin’s outstanding leadership and contributions to value creation, the agreement was renewed for a three-year period ending May 1, 2024. Under the terms of the agreement, Mr. Tobin is entitled to a minimum annual base salary of $1.2 million and a minimum target annual bonus equal to 125% of his base salary, and the receipt of an annual equity grant for each of Dover’s fiscal years ending during the term of the agreement with a grant date fair value of not less than $7 million. During the term of the agreement, Mr. Tobin will also be entitled to employee benefits on the same basis as those generally available to executive officers of Dover.

In connection with his hiring, Mr. Tobin received a one-time make-whole equity grant consisting of 75,971 performance shares, and 164,603 RSUs. Mr. Tobin also received a one-time make-whole cash payment of $1,000,000.

Mr. Tobin is entitled to receive certain severance payments and benefits in the event his employment is terminated by Dover without cause or by him for good reason. See “Potential Payments upon Termination or Change in Control.”

At the end of the term of the agreement, Mr. Tobin will continue to be employed by Dover as an at-will employee and participate in severance and other benefit plans on the same terms as other executives.

CEO Pay Ratio

We are providing the following information about the relationship of the annual total compensation of our Chief Executive Officer and our median employee. This ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K.

For purposes of identifying our global median employee, in accordance with SEC rules we used the same global median employee for calculating the 2022 ratio as we did for calculating the 2021 ratio, as we believe that there has been no material change in our employee population or the employee compensation arrangements, or in the circumstances of the median employee.

For purposes of this analysis, our global headcount was 25,606 employees (13,329 U.S. and 12,227 non-U.S.) as of our December 31, 2022 determination date. Eleven countries were excluded (2.1% of the total workforce) under the permissible 5% exclusion, with employee counts as follows: Argentina (20), Colombia (4), Costa Rica (1), Dominican Republic (59), Indonesia (5), Malaysia (136), Mexico (111), Russian Federation (34), Taiwan (19), Thailand (130), and Turkey (13). After country exclusions, our total headcount was 25,074 employees (13,329 U.S. and 11,745 non-U.S.). As is permitted under the rules, to determine our median employee, we chose “base salary” as our consistently applied compensation measure. We estimated annual base salary for hourly workers employed for the entire year using their hourly rate and a reasonable estimate of hours worked for the year. For employees who commenced work during 2022, we annualized their annual base salary. We then produced a sample of employees who were paid within a 0.5% range of that median and selected an employee from within that group as our median employee. We determined that employee’s (Summary Compensation Table) total compensation was $51,237 for 2022.

We calculated 2022 annual total compensation for both our median employee and Mr. Tobin using the same methodology that we use to determine our named executive officers’ annual total compensation for the Summary Compensation Table. Mr. Tobin’s total compensation was $14,143,252 resulting in an estimated ratio of 276:1 for CEO pay to median worker pay.

 

DOVER CORPORATION2023 Proxy Statement 58


EXECUTIVE COMPENSATION TABLES

 

Grants of Plan-Based Awards in 2022

All awards listed in the table below have a grant date of February 11, 2022 for all executive officers. For a discussion of the awards, see “Compensation Discussion and Analysis – Elements of Executive Compensation.”

 

  Name

 

Type

 

 

Estimated Future Payouts 
Under Non-Equity
Incentive Plan Awards

   

 

Estimated Future Payouts
Under Equity
Incentive Plan Awards

   

All Other
Stock
Awards:
Number
of

Share of
Stock or
Units

(#)

   

All Other
Stock
Awards:
Number of

Securities
Underlying
Options
(#)

   

Exercise

Price of
Option
Awards
($/Sh)

   

Grant
Date Fair
Value of

Stock
and
Option
Awards
($)

 
  Threshold
($)(1)
    Target
($)
    Maximum
($)
    Threshold
(#)(1)
    Target
(#)
    Maximum
(#)
 

  Richard J. Tobin

 

AIP (2)

 

 

952,500

 

 

 

1,905,000

 

 

 

3,810,000

 

                                                       
  SSAR (3)                                                          

 

99,869

 

 

 

160.21

 

 

 

4,201,489

 

 

Performance
Shares (4)

                                 

 

22,471

 

 

 

67,413

 

                         

 

4,413,304

 

 

RSU (5)

             

 

11,235

 

     

 

1,799,959

 

  Brad M. Cerepak

 

AIP (2)

 

 

376,465

 

 

 

752,930

 

 

 

1,505,861

 

                                                       
 

SSAR (3)

                                                         

 

23,580

 

 

 

160.21

 

 

 

992,011

 

 

Performance
Shares (4)

                                 

 

5,306

 

 

 

15,918

 

                         

 

1,042,098

 

 

RSU (5)

             

 

2,653

 

     

 

425,037

 

  Girish Juneja

 

AIP (2)

 

 

178,500

 

 

 

357,000

 

 

 

714,000

 

                                                       
  SSAR (3)                                                          

 

8,322

 

 

 

160.21

 

 

 

350,107

 

 

Performance
Shares (4)

                                 

 

1,873

 

 

 

5,619

 

                         

 

367,857

 

 

RSU (5)

             

 

936

 

     

 

149,957

 

  Ivonne M. Cabrera

 

AIP (2)

 

 

224,700

 

 

 

449,400

 

 

 

898,801

 

                                                       
 

SSAR (3)

                                                         

 

11,097

 

 

 

160.21

 

 

 

466,851

 

 

Performance
Shares (4)

                                 

 

2,497

 

 

 

7,491

 

                         

 

490,411

 

 

RSU (5)

             

 

1,248

 

     

 

199,942

 

  Kimberly K. Bors

 

AIP (2)

 

 

162,225

 

 

 

324,450

 

 

 

648,900

 

                                                       
  SSAR (3)                                                          

 

5,881

 

 

 

160.21

 

 

 

247,414

 

 

Performance
Shares (4)

                                 

 

1,323

 

 

 

3,969

 

                         

 

259,837

 

 

RSU (5)

                                                 

 

662

 

                 

 

106,059

 

 

  (1)

Represents the minimum amount payable for a certain level of performance. Under each of our plans, there is no guaranteed minimum payment.

 

  (2)

The amounts shown in this row reflect the potential payouts in February 2023 for 2022 under the AIP. The bonus amount actually paid in February 2023 is disclosed in the Summary Compensation Table in the column “Bonus” for 2022 for the executive officer.

 

  (3)

Represents an award of SSARs under the 2021 LTIP that will not be exercisable until February 11, 2025. The grant date fair value was calculated in accordance with FASB ASC 718, using a Black-Scholes value of $42.07 per SSAR.

 

  (4)

Represents an award of performance shares under the 2021 LTIP. The performance shares vest and become payable after the three-year performance period ending December 31, 2024 subject to the achievement of the applicable performance goal. The performance share awards are considered market condition awards per FASB ASC 718 and the grant date fair value for the awards was $196.40 per share, calculated using the Monte Carlo simulation model in accordance with FASB ASC 718.

 

  (5)

Represents an award of RSUs under the 2021 LTIP Plan made on February 11, 2022. The grant vests in three equal annual installments beginning on March 15, 2023. The grant date fair value for the awards were calculated in accordance with FASB ASC 718, using a value of $160.21 per share.

 

DOVER CORPORATION2023 Proxy Statement 59


EXECUTIVE COMPENSATION TABLES

 

Outstanding Equity Awards at Fiscal Year-End 2022

Awards listed below with grant dates beginning in 2013 were made under the 2012 LTIP. All equity awards outstanding as of May 9, 2018 were adjusted as a result of the spin-off of Apergy Corporation (now known as ChampionX Corporation) to preserve the value of the awards in accordance with the Employee Matters Agreement, dated May 9, 2018, between Dover and Apergy.

Effective May 7, 2021, we adopted the 2021 LTIP. All grants of equity awards made on or after May 7, 2021 were made under the 2021 LTIP.

 

     Option Awards            Stock Awards  
  Name   Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
    Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
    Option
Exercise
Prices
($)
    Option
Expiration
Date
           Number of
Shares or
Units of
Stock That
Have Not
Vested (#)
    Market Value
of Shares or
Units of
Stock That
Have Not
Vested ($)
    Equity
Incentive Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
not Vested (#)
    Equity
Incentive Plan
Awards: Market
or Payout
Value of
Unearned
Shares, Units
or Other Rights
That Have not
Vested ($)
 

 

  Richard J. Tobin

         

 

 

 

99,869 (1)

 

 

 

 

 

 

160.21

 

 

 

 

 

 

2/11/2032

 

 

                                       
         

 

123,125 (2)

 

 

 

122.73

 

 

 

2/12/2031

 

                                       
         

 

118,657 (3)

 

 

 

119.86

 

 

 

2/14/2030

 

                                       
 

 

184,211 (4)

 

         

 

91.20

 

 

 

2/15/2029

 

                                       
 

 

210,658 (5)

 

         

 

79.75

 

 

 

5/23/2028

 

                                       
                                         

 

11,235 (12)

 

 

 

1,521,331 (15)

 

 

 

22,471 (16)

 

 

 

3,042,798 (18)

 

                                         

 

9,235 (13)

 

 

 

1,250,511 (15)

 

 

 

27,703 (17)

 

 

 

3,751,263 (18)

 

           

 

4,450 (14)

 

 

 

602,575 (15)

 

   

 

  Brad M. Cerepak

         

 

 

 

23,580 (1)

 

 

 

 

 

 

160.21

 

 

 

 

 

 

2/11/2032

 

 

                                       
         

 

30,781 (2)

 

 

 

122.73

 

 

 

2/12/2031

 

                                       
         

 

29,664 (3)

 

 

 

119.86

 

 

 

2/14/2030

 

                                       
 

 

52,632 (4)

 

         

 

91.20

 

 

 

2/15/2029

 

                                       
 

 

58,478 (6)

 

         

 

82.09

 

 

 

2/9/2028

 

                                       
 

 

71,806 (7)

 

         

 

66.85

 

 

 

2/10/2027

 

                                       
 

 

91,981 (8)

 

         

 

48.28

 

 

 

2/11/2026

 

                                       
 

 

71,860 (9)

 

         

 

61.79

 

 

 

2/12/2025

 

                                       
                                         

 

2,653 (12)

 

 

 

359,243 (15)

 

 

 

5,306 (16)

 

 

 

718,485 (18)

 

                                         

 

2,309 (13)

 

 

 

312,662 (15)

 

 

 

6,926 (17)

 

 

 

937,850 (18)