DEF 14A 1 ingersoll_def14a.htm DEFINITIVE PROXY STATEMENT

Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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

Filed by the Registrant Filed by a Party other than the Registrant      

CHECK THE APPROPRIATE BOX:
  Preliminary Proxy Statement
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
  Definitive Additional Materials
Soliciting Material Under Rule 14a-12

Ingersoll-Rand Public Limited Company

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
  No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
Fee paid previously with preliminary materials:
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:



Table of Contents


Ingersoll-Rand plc
Registered in Ireland No. 469272

U.S. Mailing Address:           Registered Office:
800-E Beaty Street 170/175 Lakeview Dr.
Davidson, NC 28036 Airside Business Park
(704) 655-4000 Swords, Co. Dublin
Ireland

NOTICE OF 2016 ANNUAL GENERAL
MEETING OF SHAREHOLDERS

DATE AND TIME
Thursday, June 2, 2016, at 2:30 p.m., local time

LOCATION
The K Club
Straffan
County Kildare
Ireland

PROPOSALS TO BE VOTED
1. To re-elect or elect 12 directors for a period of 1 year.
 
2. To give advisory approval of the compensation of the Company’s Named Executive Officers.
 
3. To approve the appointment of PricewaterhouseCoopers LLP as independent auditors of the Company and authorize the Audit Committee of the Board of Directors to set the auditors’ remuneration.
 
4. To renew the existing authority of the directors of the Company (the “Directors”) to issue shares.
 
5. To renew the Directors’ existing authority to issue shares for cash without first offering shares to existing shareholders. (Special Resolution)
 
6. To determine the price range at which the Company can re-allot shares that it holds as treasury shares. (Special Resolution)
 
7. To amend the Company’s Articles of Association to implement proxy access. (Special Resolution)
 
8A.

To amend the Company’s Articles of Association to make certain administrative amendments in connection with the Companies Act 2014. (Special Resolution)

 
8B.

To amend the Company’s Memorandum or Association to make certain administrative amendments in connection with the Companies Act 2014. (Special Resolution)

 
9A.

To amend the Company’s Articles of Association to provide for a plurality voting standard in the event of a contested election. (Special Resolution)

 
9B. 

To amend the Company’s Articles of Association to grant the board sole authority to determine its size. (Special Resolution)

 
10.

To conduct such other business properly brought before the meeting.

RECORD DATE
Only shareholders of record as of the close of business on April 8, 2016, are entitled to receive notice of and to vote at the Annual General Meeting.

By Order of the Board of Directors,


EVAN M. TURTZ
Secretary

HOW TO VOTE
Whether or not you plan to attend the meeting, please provide your proxy by either using the Internet or telephone as further explained in the accompanying proxy statement or filling in, signing, dating, and promptly mailing a proxy card.

   
 

BY TELEPHONE
In the U.S. or Canada, you can vote your shares by submitting your proxy toll-free by calling 1-800-690-6903.

BY INTERNET
You can vote your shares online at www.proxyvote.com.

BY MAIL
You can vote by mail by marking, dating, and signing your proxy card or voting instruction form and returning it in the postage-paid envelope.

ATTENDING THE MEETING
Directions to the meeting can be found on page A-1 of the attached Proxy Statement.

If you are a shareholder who is entitled to attend and vote, then you are entitled to appoint a proxy or proxies to attend and vote on your behalf. A proxy is not required to be a shareholder in the Company. If you wish to appoint as proxy any person other than the individuals specified on the proxy card, please contact the Company Secretary at our registered office.

Important Notice regarding the availability of proxy materials for the Annual General Meeting of Shareholders to be held on June 2, 2016.

The Annual Report and Proxy Statement are available at www.proxyvote.com.

The Notice of Internet Availability of Proxy Materials or this Notice of 2016 Annual General Meeting of Shareholders, the Proxy Statement and the Annual Report are first being mailed to shareholders on or about April 21, 2016.



Ingersoll Rand 2016 Proxy Statement   01



Table of Contents

TABLE OF CONTENTS

    PROXY STATEMENT HIGHLIGHTS 4
OVERVIEW OF PROPOSALS TO BE VOTED 5
PROPOSALS REQUIRING YOUR VOTE 13
Item 1. Election of Directors 13
Item 2. Advisory Approval of the Compensation of Our Named Executive Officers 17
Item 3. Approval of Appointment of Independent Auditors 18
Audit Committee Report 18
Fees of the Independent Auditors 19
Item 4. Renewal of the Directors’ existing authority to issue shares 19
Item 5. Renewal of the Directors’ existing authority to issue shares for cash without first offering shares to existing shareholders 20
Item 6. Determine the price at which the Company can re-allot shares held as treasury shares 21
Item 7. Amend the Company’s Articles of Association to implement proxy access 22
Item 8A. Amend the Company’s Articles of Association to make certain administrative amendments 25
Item 8B. Amend the Company’s Memorandum of Association to make certain administrative amendments 26
Item 9A. To amend the Company’s Articles of Association to provide for a plurality voting standard in the event of a contested election 27
Item 9B. Amend the Company’s Articles of Association to grant the Board sole authority to determine its size 28
CORPORATE GOVERNANCE 29
Corporate Governance Guidelines 29
Role of the Board of Directors 29
Board Responsibilities   29
Board Leadership Structure 29
Board Risk Oversight 30
Director Compensation and Share Ownership 30
Board Committees 30
  Board Diversity 31
Board Advisors 31
Executive Sessions 31
Board and Board Committee Performance Evaluation 31
Director Orientation and Education 31
Director Nomination Process 31
Director Retirement 31
Director Independence 31
Communications with Directors 32
Code of Conduct 32
Anti-Hedging Policy and Other Restrictions 32
Investor Outreach 32
Committees of the Board 33
Board, Committee and Annual Meeting Attendance 35

02



Table of Contents

    COMPENSATION OF DIRECTORS 36
COMPENSATION DISCUSSION AND ANALYSIS 39
COMPENSATION COMMITTEE REPORT 53
SUMMARY OF REALIZED COMPENSATION 54
EXECUTIVE COMPENSATION 55
Summary Compensation Table 55
2015 Grants of Plan-Based Awards 58
Outstanding Equity Awards at December 31, 2015 60
2015 Option Exercises and Stock Vested 62
2015 Pension Benefits 62
2015 Nonqualified Deferred Compensation 64
Post-Employment Benefits 66
Post-Employment Benefits Table 69
INFORMATION CONCERNING VOTING AND SOLICITATION 72
Why Did I Receive This Proxy Statement? 72
Why Are There Two Sets Of Financial Statements Covering The Same Fiscal Period? 72
How Do I Attend The Annual General Meeting? 72
Who May Vote? 72
How Do I Vote? 72
How May Employees Vote Under Our Employee Plans? 73
May I Revoke My Proxy? 73
How Will My Proxy Get Voted? 73
What Constitutes A Quorum? 74
What Vote Is Required To Approve Each Proposal? 74
  Who Pays The Expenses Of This Proxy Statement? 74
How Will Voting On Any Other Matter Be Conducted?   74
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 75
EQUITY COMPENSATION PLAN INFORMATION 76
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS 76
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE 77
SHAREHOLDER PROPOSALS AND NOMINATIONS 77
HOUSEHOLDING 78
APPENDIX A – DIRECTIONS TO THE ANNUAL GENERAL MEETING A-1
APPENDIX B – PROXY ACCESS AMENDMENTS TO ARTICLES B-1
APPENDIX C – COMPANIES ACT AMENDMENTS TO MEMORANDUM AND ARTICLES OF ASSOCIATION C-1
APPENDIX D – OPTIONAL PROVISIONS FROM WHICH THE COMPANY PROPOSES TO OPT-OUT D-1
APPENDIX E – PLURALITY VOTING IN CONTESTED ELECTIONS AND BOARD SIZE AMENDMENTS TO ARTICLES E-1

Ingersoll Rand 2016 Proxy Statement   03



Table of Contents

PROXY STATEMENT HIGHLIGHTS

This summary highlights information contained elsewhere in this Proxy Statement. For more complete information about these topics, please review Ingersoll-Rand plc’s Annual Report on Form 10-K and the entire Proxy Statement.

MEETING INFORMATION

Date and Time:        June 2, 2016 at 2:30 p.m., local time
 
Place: The K Club
Straffan
County Kildare
Ireland
 
Record Date: April 8, 2016
 
Voting: Shareholders as of the record date are entitled to vote. Each ordinary share is entitled to one vote for each director nominee and each of the other proposals.
 
Attendance: All shareholders may attend the meeting.

CORPORATE GOVERNANCE HIGHLIGHTS

Substantial majority of independent directors (11 of 12) directors
 

Annual election of directors
 

Majority vote for directors
 

Independent Lead Director
 

Board oversight of risk management
 

Succession planning at all levels, including for Board and CEO
 

Annual Board and committee self-assessments
 

Executive sessions of non-management directors
 

Continuing director education
 

Executive and director stock ownership guidelines
 

Board oversight of sustainability program


2017 ANNUAL MEETING

Deadline for shareholder proposals for inclusion in the proxy statement:        December 26, 2016
 
Deadline for business proposals and nominations for director: March 4, 2017

04



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED

    Item 1.

Election of Directors

 

The Board of Directors recommends a vote FOR the directors nominated for election

   

See page 13 for further information


Director Nominees
    Ingersoll-Rand    
Committees
Name/ Director Other current
Occupation Age since Independent public Boards A C CG F T E
  Ann C. Berzin 64 2001 YES - Exelon Corporation M C M
Former Chairman and CEO of Financial Guaranty                     - Baltimore Gas & Electric                                
Insurance Company     Company      
John Bruton 68 2010   YES     M M M
Former Prime Minister of the Republic of Ireland      
and Former European Union Commission Head of    
Delegation to the United States    
Elaine L. Chao 63 2015 YES - News Corp. M M
24th U.S. Secretary of Labor from 2001 until 2009 - Wells Fargo & Co.
- Vulcan Materials Company
Jared L. Cohon 68 2008 YES - Lexmark, Inc. M M C
President Emeritus of Carnegie Mellon University, - Unisys
University Professor of Civil and Environmental
Engineering and of Engineering and Public Policy, and
Director of the Scott Institute for Energy Innovation
Gary D. Forsee 66 2007 YES - Great Plains Energy Inc. M C M M
Former President of University of Missouri System - DST Systems Inc.
and Former Chairman of the Board and Chief
Executive Officer of Sprint Nextel Corporation
Constance J. Horner 74 1994 YES - Prudential Financial, Inc. M M
Former Commissioner of U.S. Commission
on Civil Rights
Linda P. Hudson 65 2015 YES - The Southern Company M M M
Founder, Chairman and CEO of The Cardea Group - Bank of America
and Former President and CEO of BAE Systems, Inc.
Michael W. Lamach 52 2010 NO - PPG Industries, Inc. C
Chairman and CEO of Ingersoll-Rand plc
Myles P. Lee 62 2015 YES - Babcock International Group plc M M
Former Director and CEO of CRH plc
John P. Surma 61 2013 YES - Marathon Petroleum Corporation C M M
Former Chairman and CEO of United States - MPLX LP (a publicly traded
Steel Corporation   subsidiary of Marathon
  Petroleum Corporation)
- Concho Resources Inc.
Richard J. Swift 71 1995 YES - CVS Health Corporation M M M M
Lead Director - Hubbell Incorporated
Former Chairman of Financial Accounting Standards - Kaman Corporation
Advisory Council and Former Chairman, President - Public Service Enterprise Group
and CEO of Foster Wheeler Ltd.
Tony L. White 69 1997 YES - C.R. Bard, Inc. C M M M
Former Chairman, President - CVS Health Corporation
and CEO of Applied Biosystems Inc.
A: Audit Committee
C: Compensation Committee
CG: Corporate Governance &
Nominating Committee
F: Finance Committee
T: Technology and Innovation
Committee
E: Executive Committee
C: Chair
M: Member


Ingersoll Rand 2016 Proxy Statement   05



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED


    Item 2.

Advisory Approval of the Compensation of Our Named Executive Officers

  

The Board of Directors recommends a vote FOR this item

We are asking for your advisory approval of the compensation of our named executive officers (“NEOs”). While our Board of Directors intends to carefully consider the shareholder vote resulting from the proposal, the final vote will not be binding on us and is advisory in nature. Before considering this proposal, please read our Compensation Discussion and Analysis, which explains our executive compensation programs and the Compensation Committee’s compensation decisions.

  

See page 17 and 39 for further information

EXECUTIVE COMPENSATION

BUSINESS HIGHLIGHTS

Ingersoll Rand is a world leader in the creation of comfortable, sustainable and efficient environments. Our people and our family of brands – including Ingersoll-Rand, Trane, Thermo King and Club Car – work together to enhance the quality and comfort of air in homes and buildings, transport and protect food and perishables, and increase industrial productivity and efficiency. We continue to focus on improving the efficiencies and capabilities of the products and services of our businesses. We also continue to focus on operational excellence strategies as a central theme to improving our earnings and cash flow. In 2015, we:

Achieved organic revenue growth of 5% when excluding the impacts of currency and acquisitions.
 
Achieved 3-year average adjusted earnings per share (“EPS”) growth of 13%, which approximates the 75th percentile of companies in the S&P 500 Industrials Index.
 
Acquired and successfully integrated the Cameron Centrifugal Compression Division and FRIGOBLOCK, strengthening our ability to better serve our customers and shareholders.
 
Continued to make significant strides toward our commitment to cut greenhouse gas emissions and incorporate potential alternatives into our portfolio to lower the Company’s impact on global warming. In recognition of our actions we were rated in the top 10 percent of companies on S&P’s CDP (Climate Disclosure Project) annual climate change report and selected for the Dow Jones Sustainability World and North America Indices for the fifth consecutive year.
 
Continued to improve employee engagement as we sought meaningful ways to improve the working lives of our employees, which translates into improved commitment to the company’s core values and ultimately leads to improved performance.
 
Increased our dividend by 16 percent in 2015, delivering on our strategy to provide market value to our shareholders. Since 2010, the annual dividend has increased more than 300%.

2015 RESULTS

The following table documents the financial results realized in 2015:

Metric       Performance
Revenue Adjusted annual Revenue of $13.600 billion, an increase of 5.6% over 2014
Operating Income
(“OI”)
Adjusted OI of $1.535 billion, an increase of 7.9% over 2014
Operating Income
Margin (“OI Margin”)
  Adjusted OI margin of 11.3%, an increase of 0.2 percentage points over 2014
Cash Flow Adjusted Cash Flow of $1.021 billion, an increase of 19.7% from 2014
EPS Adjusted EPS of $3.41, an increase of 3.3% over 2014
3-Year EPS Growth 3-year EPS growth (2013 - 2015) of 12.89%, which ranks at the 76th percentile of the companies in the S&P 500 Industrials Index
3-Year Total
Shareholder Return
(“TSR”)
3-year TSR (2013-2015) of 52.48%, which ranks at the 53rd percentile of the companies in the S&P 500 Industrials Index


06



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED



Based on our adjusted 2015 results for Revenue, OI, Cash Flow and OI margin, we achieved an Annual Incentive Matrix (“AIM”) financial score of 92.51% of target for the Enterprise. At the Segment level, 2015 AIM financial scores were 128.34% of target for the Climate Segment and 0% of target for the Industrial Segment.

Based on our achievement of an average EPS growth rate of 12.89% and a TSR of 52.48% during the 2013 to 2015 performance period, performance share units (“PSUs”) under our Performance Share Program (“PSP”) paid out at 157% of target.

CONSIDERATION OF 2015 ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Compensation Committee regularly reviews the philosophy, objectives and elements of our executive compensation programs in relation to our short and long-term business objectives. In undertaking this review, the Compensation Committee considers the views of shareholders as reflected in their annual advisory vote on our executive compensation proposal. Shareholders voted 96.82% in favor of the company’s Advisory Approval of the Compensation of Our Named Executive Officers at our 2015 annual general meeting. Based on the Compensation Committee’s review and the support our executive compensation programs received from shareholders, the Compensation Committee determined it would be appropriate to maintain the core elements of our executive compensation programs.

EXECUTIVE COMPENSATION PRINCIPLES

Our executive compensation programs are based on the following principles:

(i) business strategy alignment (iii)   mix of short and long-term incentives (v) shareholder alignment
(ii)   pay for performance (iv) internal parity (vi)   market competitiveness

Consistent with these principles, the Compensation Committee has adopted executive compensation programs with a strong link between pay and achievement of short and long-term Company goals.


Ingersoll Rand 2016 Proxy Statement   07



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED



EXECUTIVE COMPENSATION ELEMENTS

The primary elements of the executive compensation programs are:

Total Direct Compensation

Element 1       Objective of Element

Base Salary

Fixed cash compensation.

Annual Incentive
(the Annual Incentive
Matrix or “AIM”)

 

Variable cash incentive compensation. Any award earned is based on performance against pre-defined annual revenue (“Revenue”), Operating Income (“OI”), cash flow (“Cash Flow”) and OI margin percent objectives, as well as individual performance.

Long-Term Incentives
(“LTI”)

Variable long-term incentive compensation. Performance is aligned with the Company’s stock price and is awarded in the form of stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”). PSUs are only payable if the Company’s earnings per share (“EPS”) growth and total shareholder return (“TSR”) relative to companies in the S&P 500 Industrials Index exceed threshold performance against pre-defined objectives.


1    See Section V, “Compensation Program Descriptions and Compensation Decisions of Compensation Discussion and Analysis”, for additional discussion of these elements of compensation.

EXECUTIVE COMPENSATION MIX

As illustrated in the charts below, the Compensation Committee places significant emphasis on variable compensation (AIM and LTI) so that a substantial percentage of each NEO’s target total direct compensation is contingent on the successful achievement of the Company’s short-term and long-term performance goals.

Target Total Direct Compensation        
Chairman and CEO
2015 Compensation Mix
(Target Total Direct Compensation)
  Other NEOs
2015 Compensation Mix
(Target Total Direct Compensation)



08



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED



2015 EXECUTIVE COMPENSATION

The summary below shows the 2015 compensation for our CEO and other NEOs, as required to be reported in the Summary Compensation Table pursuant to U.S. Securities and Exchange Commission (“SEC”) rules. Please see the notes accompanying the Summary Compensation Table for further information.

Name and
Principal Position
    Salary ($)    
Bonus
($)
    Stock
Awards ($)
    Option Awards
($)
    Non-Equity
Incentive Plan
Compensation
($)
    Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
    All Other
Compensation
    Total ($)
M.W. Lamach 1,287,500 7,860,622 2,241,176 2,020,000 3,390,703 481,598 17,281,599
Chairman and Chief
Executive Officer  
S.K. Carter 669,750 1,657,199 472,474 686,887 270,747 143,413 3,900,470
Senior Vice President
and Chief Financial
Officer
D. P. M. Teirlinck 677,500 1,487,163 424,016 680,801 1,132,731 135,778 4,537,989
Executive Vice  
President, Climate
Segment
R.G. Zafari 565,000 1,062,301 302,865 212,923 609,249 95,904 2,848,242
Executive Vice
President, Industrial
Segment
M. J. Avedon 570,000 1,019,759 290,761 497,357 633,107 100,193 3,111,177
Senior Vice President,
Human Resources,
Communications and
Corporate Affairs
G. S. Michel 486,250 679,915 193,845 447,985 409,619 790,928 3,008,542
SVP, HVAC Residential
T. D. Wyman 493,750 699,898 1,182,119 346,913 355,028 82,053 3,159,761
SVP, Compression
Technology and Services


  Item 3.

Approval of Appointment of Independent Auditors

  

The Board of Directors recommends a vote FOR this item

We are asking you to approve the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for 2016 and to authorize the Audit Committee to set PwC’s remuneration.

  

See page 18 for further information



Ingersoll Rand 2016 Proxy Statement   09



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED


  Item 4.            Item 5.             Item 6.  
 
        

To renew the Directors’ existing authority to issue shares.

 

To renew the Directors’ existing authority to issue shares for cash without first offering shares to existing shareholders. (Special Resolution)

To determine the price range at which the Company can re-allot shares that it holds as treasury shares. (Special Resolution)

        
   

The Board of Directors recommends a vote FOR this item

 

The Board of Directors recommends a vote FOR this item

The Board of Directors recommends a vote FOR this item

 
 

We are asking you to renew our Directors’ authority to issue shares under Irish law. This authority is fundamental to our business and granting the Board this authority is a routine matter for public companies incorporated in Ireland.

We are asking you to renew the Directors’ authority to issue shares for cash without first offering shares to existing shareholders. This authority is fundamental to our business and granting the Board this authority is a routine matter for public companies incorporated in Ireland. As required under Irish law, this proposal requires the affirmative vote of at least 75% of the votes cast.

We are asking you to determine the price at which the Company can reissue shares held as treasury shares. From time to time the Company may acquire ordinary shares and hold them as treasury shares. The Company may re-allot such treasury shares, and under Irish law, our shareholders must authorize the price range at which we may re-allot any shares held in treasury. As required under Irish law, this proposal requires the affirmative vote of at least 75% of the votes cast.

 
 

See page 19 for further information

 

See page 20 for further information

 

See page 21 for further information


10



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED


  Item 7.            Item 8A.             Item 8B.  
 
        

To amend the Company’s Articles of Association to implement proxy access. (Special Resolution)

 

To amend the Company’s Articles of Association to make certain administrative amendments. (Special Resolution)

To amend the Company’s Memorandum of Association to make certain administrative amendments. (Special Resolution)

        
   

The Board of Directors recommends a vote FOR this item

 

The Board of Directors recommends a vote FOR this item

The Board of Directors recommends a vote FOR this item

 
 

We are asking you to approve amendments to our Articles of Association to implement proxy access. As required under Irish law, this proposal requires the affirmative vote of at least 75% of the votes cast.

We are asking you to approve amendments to the Company’s Articles of Association to make certain administrative amendments as a result of the Companies Act 2014. As required under Irish law, this proposal requires the affirmative vote of at least 75% of the votes cast. Given the link between Proposals No. 8A and 8B, each proposal is subject to the other being approved by shareholders, and as a result, both proposals will fail if either proposal does not pass.

We are asking you to approve amendments to the Company’s Memorandum of Association to make certain administrative amendments as a result of the Companies Act 2014. As required under Irish law, this proposal requires the affirmative vote of at least 75% of the votes cast. Given the link between Proposals No. 8A and 8B, each proposal is subject to the other being approved by shareholders, and as a result, both proposals will fail if either proposal does not pass.

 
 

See page 22 for further information

 

See page 25 for further information

 

See page 26 for further information


Ingersoll Rand 2016 Proxy Statement   11



Table of Contents

OVERVIEW OF PROPOSALS TO BE VOTED
 

    Item 9A.

To amend the Company’s Articles of Association to provide for a plurality voting standard in the event of a contested election. (Special Resolution)

   The Board of Directors recommends a vote FOR this item

We are asking you to approve amendments to the Company’s Articles of Association to provide for a plurality voting standard in the event of a contested election. As required under Irish law, this proposal requires the affirmative vote of at least 75% of the votes cast. Given the link between Proposals No. 9A and 9B, each proposal is subject to the other being approved by shareholders, and as a result, both proposals will fail if either proposal does not pass.

   See page 27 for further information


    Item 9B.

To amend the Company’s Articles of Association to grant the Board sole authority to determine its size. (Special Resolution)

   The Board of Directors recommends a vote FOR this item

We are asking you to approve amendments to the Company’s Articles of Association to grant the Board sole authority to determine its size. Under Irish law, unless the Board is granted sole authority to set its size, the plurality voting standard would not achieve its desired results. As required under Irish law, this proposal requires the affirmative vote of at least 75% of the votes cast. Given the link between Proposals No. 9A and 9B, each proposal is subject to the other being approved by shareholders, and as a result, both proposals will fail if either proposal does not pass.


   See page 28 for further information


12



Table of Contents

PROPOSALS REQUIRING YOUR VOTE

In this Proxy Statement, “Ingersoll Rand,” the “Company,” “we,” “us” and “our” refer to Ingersoll-Rand plc, an Irish public limited company. This Proxy Statement and the enclosed proxy card, or the Notice of Internet Availability of Proxy Materials, are first being mailed to shareholders of record on April 8, 2016 (the “Record Date”) on or about April 21, 2016.

  Item 1.

Election of Directors

   The Board of Directors recommends a vote FOR the directors nominated for election listed below.

The Company uses a majority of votes cast standard for the election of directors. A majority of the votes cast means that the number of votes cast “for” a director nominee must exceed the number of votes cast “against” that director nominee. Each director of the Company is being nominated for election for a one-year term beginning at the end of the 2016 Annual General Meeting of Shareholders to be held on June 2, 2016 (the “Annual General Meeting”) and expiring at the end of the 2017 Annual General Meeting of Shareholders. Under our Articles of Association, if a director is not re-elected in a director election, the director shall retire at the close or adjournment of the Annual General Meeting.


Principal Occupation
Chairman and Chief Executive Officer of Financial Guaranty Insurance Company (insurer of municipal bonds and structured finance obligations), a subsidiary of General Electric Capital Corporation, from 1992 to 2001.

 
Current Public Directorships
-
Exelon Corporation
- Baltimore Gas & Electric Company
Other Directorships Held in the Past Five Years
-
Constellation Energy Group, Inc.
- Kindred Healthcare, Inc.
   
   

ANN C. BERZIN
Independent Director

Age 64
Director since 2001
Committees Audit,
Finance (Chair),
Executive

Nominee Highlights
Ms. Berzin’s extensive experience in finance at a global diversified industrial firm and her expertise in complex investment and financial products and services bring critical insight to the Company’s financial affairs, including its borrowings, capitalization, and liquidity. In addition, Ms. Berzin’s relationships across the global financial community strengthen Ingersoll Rand’s access to capital markets. Her board memberships provide deep understanding of trends in the energy and healthcare sectors, both of which present ongoing opportunities and challenges for Ingersoll Rand.

   

Principal Occupation
-
European Union Commission Head of Delegation to the United States from 2004 to 2009.
- Prime Minister of the Republic of Ireland from 1994 to 1997.

 
Current Public Directorships
-
None
Other Directorships Held in the Past Five Years
-
Montpelier Re Holding Ltd.
   
 
 
 

JOHN BRUTON
Independent Director

Age 68
Director since 2010
Committees
Compensation,
Corporate Governance
and Nominating,
Technology and
Innovation

Nominee Highlights
Mr. Bruton’s long and successful career of public service on behalf of Ireland and Europe provides extraordinary insight into critical regional and global economic, social and political issues, all of which directly influence the successful execution of the Company’s strategic plan. In particular, Mr. Bruton’s leadership role in transforming Ireland into one of the world’s leading economies during his tenure, as well as in preparing the governing document for managing the Euro, lend substantial authority to Ingersoll Rand’s economic and financial oversight.


Ingersoll Rand 2016 Proxy Statement   13



Table of Contents

PROPOSALS REQUIRING YOUR VOTE
 

Principal Occupation
-
24th U.S. Secretary of Labor from 2001 until 2009, the first Asian American woman cabinet officer in American history.
- Distinguished Fellow at the Heritage Foundation from August 1996 to January 2001 and January 2009 to August 2014.
- President and Chief Executive Officer of United Way of America from November 1992 to August 1996.

 
Current Public Directorships
-
News Corp.
- Wells Fargo & Co.
- Vulcan Materials Company
Other Directorships Held in the Past Five Years
-
Dole Food Company, Inc.,
- Protective Life
   
 
 
 

ELAINE L. CHAO
Independent Director

Age 63
Director since 2015
Committees
Compensation,
Corporate Governance
and Nominating

Nominee Highlights
Ms. Chao’s extensive leadership experience including high profile positions at large, complex organizations in the public, private and non-profit sectors brings valuable perspective to matters relevant to the Company in the areas of global competitiveness, international geopolitical dynamics, workforce development, trends in governmental policies and corporate governance. In particular, Ms. Chao’s service as U.S. Secretary of Labor provides extensive knowledge and experience regarding labor and employment trends, workforce health and safety, pension benefits and competition in a worldwide economy. Ms. Chao’s ongoing board memberships in the financial and communications industries also provide further insight into finance, macroeconomics and new media developments.

   

Principal Occupation
- President Emeritus at Carnegie Mellon University, President of Carnegie Mellon University from 1997-2013 and also appointed University Professor of Civil and Environmental Engineering / Engineering and Public Policy and Director of the Scott Institute for Energy Innovation.
 
Current Public Directorships
-
Lexmark, Inc.
- Unisys
Other Directorships Held in the Past Five Years
-
None
   
Other Activities
-
Carnegie Corporation, Trustee
- Heinz Endowments, Trustee
- Center for Sustainable Shale Gas Development, Director and Chair
- Health Effects Institute, Director

JARED L. COHON
Independent Director

Age 68
Director since 2008
Committees
Compensation,
Corporate Governance
and Nominating,
Technology and
Innovation (Chair)

Nominee Highlights
Dr. Cohon’s extensive career in academics, including 16 years as president of an institution known throughout the world for its leadership in the fields of computer science and engineering offers the Company tremendous insight into the latest developments in areas critical to commercial innovation and manufacturing process improvement. A member of the National Academy of Engineering, Dr. Cohon is a recognized authority on environmental and water resources systems analysis and management. As such, Dr. Cohon also brings unique perspectives on sustainable business practices, both within our own operations and on behalf of our customers and communities. In 2008 and 2009, at the request of Congress, Dr. Cohon chaired the National Research Council Committee that produced the report, “Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use.” In 2014, Dr. Cohon was appointed co-chair of the Congressionally-mandated Commission to review and evaluate the National Energy Laboratories. Finally, Dr. Cohon’s more than nine years of service as a member of Trane Inc.’s (formerly American Standard) board of directors provides critical insight into that part of the Company’s business.

   

Principal Occupation
- President, University of Missouri System from 2008 to 2011.
- Chairman of the Board (from 2006 to 2007) and Chief Executive Officer (from 2005 to 2007) of Sprint Nextel Corporation (a telecommunications company).
 
Current Public Directorships
-
Great Plains Energy Inc.
- DST Systems Inc.
Other Directorships Held in the Past Five Years
-
None
   
Other Activities
- Trustee, Midwest Research Institute
- Board, University of Missouri – Kansas City Foundation
- Board, University of Missouri – Kansas City Bloch Business School Foundation

GARY D. FORSEE
Independent Director

Age 66
Director since 2007
Committees
Compensation,
Corporate Governance
and Nominating
(Chair), Technology and
Innovation, Executive

Nominee Highlights
In addition to his broad operational and financial expertise, Mr. Forsee’s experience as chairman and chief executive officer with the third largest U.S. firm in the global telecommunications industry offers a deep understanding of the challenges and opportunities within markets experiencing significant technology-driven change. His recent role as president of a major university system provides insight into the Company’s talent development initiatives, which remain a critical enabler of Ingersoll Rand’s long-term success. Mr. Forsee’s membership on the board of an energy services utility also benefits the Company as it seeks to achieve more energy-efficient operations and customer solutions.


14



Table of Contents

PROPOSALS REQUIRING YOUR VOTE
 

Principal Occupation
- Guest Scholar at the Brookings Institution (a non-partisan research institute) from 1993 to 2005.
- Commissioner of U.S. Commission on Civil Rights from 1993 to 1998.
- Assistant to the President and Director of Presidential Personnel from 1991 to 1993.
- Deputy Secretary, U.S. Department of Health and Human Services from 1989 to 1991.

 

Current Directorships
-
Prudential Financial, Inc.

Other Directorships Held in the Past Five Years
-
Pfizer Inc.
   

Other Activities
- Trustee, The Prudential Foundation
- Fellow, National Academy of Public Administration

CONSTANCE J. HORNER
Independent Director

Age 74
Director since 1994
Committees
Compensation, Corporate
Governance and
Nominating

Nominee Highlights
Ms. Horner’s substantial leadership experience and public-policy expertise resulting from her service in two presidential administrations and several U.S. government departments provide Ingersoll Rand with important perspective on matters that directly affect the Company’s operations and financial affairs. In particular, Ms. Horner has deep insight into employee relations, talent development, diversity, operational management and healthcare through her leadership positions at various federal departments and commissions. Ms. Horner’s board memberships afford ongoing engagement in the areas of healthcare, risk management and financial services, all of which have a direct influence on Ingersoll Rand’s success.

   

Principal Occupation
- Founder, Chairman, and Chief Executive Officer of The Cardea Group, a business management consulting firm
- Former President and Chief Executive Officer of BAE Systems, Inc.

 
Current Directorships
-
The Southern Company
- Bank of America
Other Directorships Held in the Past Five Years
-
BAE Systems Plc
   

Other Activities
- Director, University of Florida Foundation, Inc. and the University of Florida Engineering Leadership Institute
- Director, Center for a New American Security
- Director, Wake Forest Charlotte Center

LINDA P. HUDSON
Independent Director

Age 65
Director since 2015
Committees
Audit, Finance, Technology
and Innovation

Nominee Highlights
Ms. Hudson’s prior role as President and CEO of BAE Systems and her extensive experience in the defense and engineering sectors provides the Company with strong operational insight and understanding of matters crucial to the Company’s business. Prior to becoming CEO, Ms. Hudson was president of BAE Systems’ Land & Armaments operating group, the world’s largest military vehicle and equipment business, with operations around the world. In addition, Ms. Hudson has broad experience in strategic planning and risk management in complex business environments.

   

Principal Occupation
-
Chairman of the Company since June 2010
- Chief Executive Officer (since February 2010) of the Company.
- President and Chief Operating Officer of the Company from February 2009 to February 2010.
- Senior Vice President and President, Trane Commercial Systems, of the Company from June 2008 to September 2009.

 
Current Directorships
-
PPG Industries, Inc.
Other Directorships Held in the Past Five Years
-
Iron Mountain Incorporated
 
  
 

MICHAEL W. LAMACH
Chairman and CEO

Age 52
Director since 2010
Committees Executive

Nominee Highlights
Mr. Lamach’s extensive career of successfully leading global businesses, including twelve years with Ingersoll Rand, brings significant experience and expertise to the Company’s management and governance. His 30 years of business leadership encompass global automotive components, controls, security and HVAC systems businesses, representing a broad and diverse range of products and services, markets, channels, applied technologies and operational profiles. In his current role of Chief Executive Officer, he led the successful spin-off of the Company’s commercial and residential security business and has been instrumental in driving growth and operational excellence initiatives across the Company’s global operations.


Ingersoll Rand 2016 Proxy Statement   15



Table of Contents

PROPOSALS REQUIRING YOUR VOTE
 

Principal Occupation
-
Former Director and Chief Executive Officer of CRH plc

 
Current Public Directorships
-
Babcock International Group plc
Other Directorships Held in the Past Five Years
-
CRH plc
   

Other Activities
- Director, St. Vincent’s Healthcare Group
 
 

 

MYLES P. LEE
Independent Director

Age 62
Director since 2015
Committees
Audit, Finance

Nominee Highlights
Mr. Lee’s experience as the former head of the largest public or private company in Ireland provides strategic and practical judgment to critical elements of the Company’s growth and productivity strategies, expertise in Irish governance matters and significant insight into the building and construction sector. In addition, Mr. Lee’s previous service as Finance Director and General Manager of Finance of CRH plc and in a professional accountancy practice provides valuable financial expertise to the Company.

   

Principal Occupation
- Former Chairman (from 2006-2013) and Chief Executive Officer (from 2004-2013) of United States Steel Corporation (a steel manufacturing company).
 
Current Public Directorships
-
Marathon Petroleum Corporation
- MPLX LP (a publicly traded subsidiary of
  Marathon Petroleum Corporation)
- Concho Resources Inc.
Other Directorships Held in the Past Five Years
-
The Bank of New York Mellon Corporation
   
Other Activities
- Director and Deputy Chair, Federal Reserve Bank of Cleveland
- Director, UPMC
- Director and Chair, National Safety Council

JOHN P. SURMA
Independent Director

Age 61
Director since 2013
Committees
Audit (Chair), Finance,
Executive

Nominee Highlights
Mr. Surma’s experience as the former chairman and chief executive officer of a large industrial company provides significant and direct expertise across all aspects of Ingersoll Rand’s operational and financial affairs. In particular, Mr. Surma’s financial experience, having previously served as the chief financial officer of United States Steel Corporation and as a partner of the audit firm Price Waterhouse LLP, provides the Board with valuable insight into financial reporting and accounting oversight of a public company. Mr. Surma’s board memberships and other activities provide the Board an understanding of developments in the energy sector as the Company seeks to develop more energy-efficient operations and insight into national and international business and trade policy that could impact the Company.

   

Principal Occupation
-
Chairman of Financial Accounting Standards Advisory Council from 2002 through 2006.
- Chairman, President and Chief Executive Officer of Foster Wheeler Ltd. (provider of design, engineering, construction, manufacturing, management and environmental services) from 1994 to 2001.
 
Current Directorships
-
CVS Caremark Corporation
- Hubbell Incorporated
- Kaman Corporation
- Public Service Enterprise Group
Other Directorships Held in the Past Five Years
None
   
   

RICHARD J. SWIFT
Lead Director
Independent Director

Age 71
Director since 1995
Committees
Audit, Finance, Executive,
Technology and Innovation

Nominee Highlights
Mr. Swift’s experience as chairman and chief executive officer of a global engineering firm, the fact that he was a licensed professional engineer for 35 years prior to the retirement of his license and his five-year leadership of the advisory organization to a major accounting standards board imparts substantial expertise to all of the Company’s operational and financial matters. His leadership of an organization that was instrumental in some of the world’s most significant engineering projects provides unique insight into the complex systems involved in the efficient and effective development of buildings and industrial operations, which represent key global market segments for Ingersoll Rand’s products and services. Mr. Swift’s board memberships include firms engaged in the manufacture and distribution of industrial, electrical and electronic products, which directly correspond to key elements of the Company’s growth and operational strategies.


16



Table of Contents

PROPOSALS REQUIRING YOUR VOTE
 

Principal Occupation
- Chairman, President and Chief Executive Officer of Applied Biosystems Inc. (a developer, manufacturer and marketer of life science systems and genomic information products) from 1995 until his retirement in 2008.
 
Current Directorships
-
C.R. Bard, Inc.
- CVS Caremark Corporation
Other Directorships Held in the Past Five Years
None
   
   

TONY L. WHITE
Independent Director

Age 69
Director since 1997
Committees
Compensation (Chair),
Corporate Governance and
Nominating, Executive, and
Technology and Innovation

Nominee Highlights
Mr. White’s extensive management experience, including 13 years as chairman and chief executive officer of an advanced-technology life sciences firm, provides substantial expertise and guidance across all aspects of Ingersoll Rand’s operational and financial affairs. In particular, Mr. White’s leadership of an organization whose success was directly connected to innovation and applied technologies aligns with the Company’s focus on innovation as a key source of growth. The Company benefits from Mr. White’s ongoing board memberships, where developments related to biotechnology and healthcare delivery systems can offer instructive process methodologies to accelerate our innovation efforts.


  Item 2.

Advisory Approval of the Compensation of Our Named Executive Officers

   The Board of Directors recommends a vote FOR advisory approval of the compensation of our Named Executive Officers as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in this proxy statement.

The Company is presenting the following proposal, commonly known as a “Say-on-Pay” proposal, which gives you as a shareholder the opportunity to endorse or not endorse our compensation program for Named Executive Officers by voting for or against the following resolution:

“RESOLVED, that the shareholders approve the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the related disclosure contained in the Company’s proxy statement.”

While our Board of Directors intends to carefully consider the shareholder vote resulting from the proposal, the final vote will not be binding on us and is advisory in nature.

In considering your vote, please be advised that our compensation program for Named Executive Officers is guided by our design principles, as described in the Compensation Discussion and Analysis section of this Proxy Statement:

(i) business strategy alignment (iii) mix of short and long-term incentives (v) shareholder alignment
(ii) pay for performance (iv) internal parity (vi) market competitiveness

By following these design principles, we believe that our compensation program for Named Executive Officers is strongly aligned with the long-term interests of our shareholders.

Ingersoll Rand 2016 Proxy Statement   17



Table of Contents

PROPOSALS REQUIRING YOUR VOTE


    Item 3.

Approval of Appointment of Independent Auditors
  

The Board of Directors recommends a vote FOR the proposal to approve the appointment of PwC as independent auditors of the Company and to authorize the Audit Committee of the Board of Directors to set the auditors’ remuneration.
 


At the Annual General Meeting, shareholders will be asked to approve the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent auditors for the fiscal year ending December 31, 2016, and to authorize the Audit Committee of our Board of Directors to set the independent auditors’ remuneration. PwC has been acting as our independent auditors for many years and, both by virtue of its long familiarity with the Company’s affairs and its ability, is considered best qualified to perform this important function.

Representatives of PwC will be present at the Annual General Meeting and will be available to respond to appropriate questions. They will have an opportunity to make a statement if they so desire.

AUDIT COMMITTEE REPORT

While management has the primary responsibility for the financial statements and the financial reporting process, including the system of internal controls, the Audit Committee reviews the Company’s audited financial statements and financial reporting process on behalf of the Board of Directors. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and to issue a report thereon. The Audit Committee monitors those processes. In this context, the Audit Committee has met and held discussions with management and the independent auditors regarding the fair and complete presentation of the Company’s results. The Audit Committee has discussed significant accounting policies applied by the Company in its financial statements, as well as alternative treatments. Management has represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with United States generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent auditors. The Audit Committee also discussed with the independent auditors the matters required to be discussed by Auditing Standard No. 16, “Communications with Audit Committees” issued by the Public Company Accounting Oversight Board (United States).

In addition, the Audit Committee has received and reviewed the written disclosures and the letter from PwC required by the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence and discussed with PwC the auditors’ independence from the Company and its management in connection with the matters stated therein. The Audit Committee also considered whether the independent auditors’ provision of non-audit services to the Company is compatible with the auditors’ independence. The Audit Committee has concluded that the independent auditors are independent from the Company and its management.

The Audit Committee discussed with the Company’s internal and independent auditors the overall scope and plans for their respective audits. The Audit Committee meets separately with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (“2015 Form 10-K”), for filing with the Securities and Exchange Commission (the “SEC”). The Audit Committee has selected PwC, subject to shareholder approval, as the Company’s independent auditors for the fiscal year ending December 31, 2016.

AUDIT COMMITTEE
 
John P. Surma (Chair)
Ann C. Berzin
Linda P. Hudson
Myles P. Lee
Richard J. Swift

18



Table of Contents

PROPOSALS REQUIRING YOUR VOTE


FEES OF THE INDEPENDENT AUDITORS

The following table shows the fees paid or accrued by the Company for audit and other services provided by PwC for the fiscal years ended December 31, 2015 and 2014:

2015
($)
2014
($)
Audit Fees (a) 12,853,000       12,660,000
Audit-Related Fees (b) 109,000 319,000
Tax Fees (c) 3,033,000 5,391,000
All Other Fees (d) 18,000 21,000
Total 16,013,000 18,391,000

(a) Audit Fees for the fiscal years ended December 31, 2015 and 2014, respectively, were for professional services rendered for the audits of the Company’s annual consolidated financial statements and its internal controls over financial reporting, including quarterly reviews, statutory audits, issuance of consents, comfort letters and assistance with, and review of, documents filed with the SEC.
 
(b) Audit-Related Fees consist of assurance services that are related to performing the audit and review of our financial statements. Audit-Related Fees for the fiscal year ended December 31, 2015 include employee benefit plan audits, and abandoned and unclaimed property tax assessments. Audit-Related Fees for the fiscal year ended December 31, 2014 include employee benefit plan audits, abandoned and unclaimed property tax assessments, and comfort letter related to the 2014 bond offering.
 
(c) Tax Fees for the fiscal year ended December 31, 2015 include consulting and compliance services in the U.S. and non-U.S. locations. Tax Fees for the fiscal year ended December 31, 2014 include consulting and compliance services in the U.S. and non-U.S. locations and primarily relate to the Allegion spin-off.
 
(d) All Other Fees for the fiscal year ended December 31, 2015 and 2014 include license fees for technical accounting software.

The Audit Committee has adopted policies and procedures which require that the Audit Committee pre-approve all non-audit services that may be provided to the Company by its independent auditors. The policy: (i) provides for pre-approval of an annual budget for each type of service; (ii) requires Audit Committee approval of specific projects if not included in the approved budget; and (iii) requires Audit Committee approval if the forecast of expenditures exceeds the approved budget on any type of service. The Audit Committee pre-approved all of the services described under “Audit-Related Fees,” “Tax Fees” and “All Other Fees.” The Audit Committee has determined that the provision of all such non-audit services is compatible with maintaining the independence of PwC.

   

Item 4.


Renewal of the Directors’ existing authority to issue shares
  

The Board of Directors recommends that you vote FOR renewing the Directors’ authority to issue shares.
 


Under Irish law, directors of an Irish public limited company must have authority from its shareholders to issue any shares, including shares which are part of the company’s authorized but unissued share capital. Our shareholders provided the Directors with this authorization at our 2015 annual general meeting on June 4, 2015 for a period of 18 months. Because this share authorization period will expire in December 2016, we are presenting this proposal to renew the Directors’ authority to issue our authorized shares on the terms set forth below.

We are seeking approval to authorize our Board of Directors to issue up to 33% of our issued ordinary share capital as of April 8, 2016 (the latest practicable date before this proxy statement), for a period expiring 18 months from the passing of this resolution, unless renewed.

Granting the Board of Directors this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish market practice. This authority is fundamental to our business and enables us to issue shares, including in connection with our equity compensation plans (where required) and, if applicable, funding acquisitions and raising capital. We are not asking you to approve an increase in our authorized share capital or to approve a specific issuance of shares. Instead, approval of this proposal will only grant the Board of Directors the authority to issue shares that are already authorized under our articles upon the terms below. In addition, we note that, because we are a NYSE-listed company, our shareholders continue to benefit from the protections afforded to them under the rules and regulations of the NYSE and SEC, including those rules that limit our ability to issue shares in specified circumstances. Furthermore, we note that this authorization is required as a matter of Irish law and is not otherwise required for other U.S. companies listed on the NYSE with whom we compete. Renewal of the Directors’ existing authority to issue shares is fully consistent with NYSE rules and listing standards and with U.S. capital markets practice and governance standards.

Ingersoll Rand 2016 Proxy Statement   19



Table of Contents

PROPOSALS REQUIRING YOUR VOTE


As required under Irish law, the resolution in respect of Item 4 is an ordinary resolution that requires the affirmative vote of a simple majority of the votes cast.

The text of this resolution is as follows:

“That the Directors be and are hereby generally and unconditionally authorized with effect from the passing of this resolution to exercise all powers of the Company to allot relevant securities (within the meaning of Section 1021 of the Companies Act) up to an aggregate nominal amount of $85,819,339 (85,819,339 shares) (being equivalent to approximately 33% of the aggregate nominal value of the issued ordinary share capital of the Company as of April 8, 2016 (the latest practicable date before this proxy statement)), and the authority conferred by this resolution shall expire 18 months from the passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the Directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”


    Item 5.

Renewal of the Directors’ existing authority to issue shares for cash without first offering shares to existing shareholders.
  

The Board of Directors recommends that you vote FOR renewing the Directors’ authority to issue shares for cash without first offering shares to existing shareholders.
 


Under Irish law, unless otherwise authorized, when an Irish public limited company issues shares for cash, it is required first to offer those shares on the same or more favorable terms to existing shareholders of the company on a pro-rata basis (commonly referred to as the statutory pre-emption right). Our shareholders provided the Directors with this authorization at our 2015 annual general meeting on June 4, 2015 for a period of 18 months. Because this share authorization period will expire in December 2016, we are presenting this proposal to renew the Directors’ authority to opt-out of the pre-emption right on the terms set forth below.

We are seeking approval to authorize our Board of Directors to opt out of the statutory pre-emption rights provision in the event of (1) the issuance of shares for cash in connection with any rights issue and (2) any other issuance of shares for cash, if the issuance is limited to up to 5% of our issued ordinary share capital as of April 8, 2016 (the latest practicable date before this proxy statement), for a period expiring 18 months from the passing of this resolution, unless renewed.

Granting the Board of Directors this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish market practice. Similar to the authorization sought for Item 4, this authority is fundamental to our business and enables us to issue shares under our equity compensation plans (where required) and if applicable, will facilitate our ability to fund acquisitions and otherwise raise capital. We are not asking you to approve an increase in our authorized share capital. Instead, approval of this proposal will only grant the Board of Directors the authority to issue shares in the manner already permitted under our articles upon the terms below. Without this authorization, in each case where we issue shares for cash, we would first have to offer those shares on the same or more favorable terms to all of our existing shareholders. This requirement could undermine the operation of our compensation plans and cause delays in the completion of acquisitions and capital raising for our business. Furthermore, we note that this authorization is required as a matter of Irish law and is not otherwise required for other U.S. companies listed on the NYSE with whom we compete. Renewal of the Directors’ existing authorization to opt out of the statutory pre-emption rights as described above is fully consistent with NYSE rules and listing standards and with U.S. capital markets practice and governance standards.

As required under Irish law, the resolution in respect of this proposal is a special resolution that requires the affirmative vote of at least 75% of the votes cast.

20



Table of Contents

PROPOSALS REQUIRING YOUR VOTE


The text of the resolution in respect of this proposal is as follows:

“As a special resolution, that, subject to the passing of the resolution in respect of Item 4 as set out above and with effect from the passing of this resolution, the Directors be and are hereby empowered pursuant to Section 1023 of the Companies Act 2014 to allot equity securities (as defined in Section 1023 of that Act) for cash, pursuant to the authority conferred by Item 4 as if sub-section (1) of Section 1022 did not apply to any such allotment, provided that this power shall be limited to:

 
(a) the allotment of equity securities in connection with a rights issue in favor of the holders of ordinary shares (including rights to subscribe for, or convert into, ordinary shares) where the equity securities respectively attributable to the interests of such holders are proportional (as nearly as may be) to the respective numbers of ordinary shares held by them (but subject to such exclusions or other arrangements as the directors may deem necessary or expedient to deal with fractional entitlements that would otherwise arise, or with legal or practical problems under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory, or otherwise); and
 
(b) the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal value of $12,872,900 (12,872,900 shares) (being equivalent to approximately 5% of the aggregate nominal value of the issued ordinary share capital of the Company as of April 8, 2016 (the latest practicable date before this proxy statement)) and the authority conferred by this resolution shall expire 18 months from the passing of this resolution, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the Directors may allot equity securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”

    Item 6.

Determine the price at which the Company can re-allot shares held as treasury shares.
  

The Board of Directors recommends that shareholders vote FOR the proposal to determine the price at which the Company can re-allot shares held as treasury shares.
 


Our open-market share repurchases (redemptions) and other share buyback activities may result in ordinary shares being acquired and held by the Company as treasury shares. We may reissue treasury shares that we acquire through our various share buyback activities including in connection with our executive compensation program and our director programs.

Under Irish law, our shareholders must authorize the price range at which we may re-allot any shares held in treasury. In this proposal, that price range is expressed as a minimum and maximum percentage of the closing market price of our ordinary shares on the NYSE the day preceding the day on which the relevant share is re-allotted. Under Irish law, this authorization expires 18 months after its passing unless renewed.

The authority being sought from shareholders provides that the minimum and maximum prices at which an ordinary share held in treasury may be re-allotted are 95% and 120%, respectively, of the closing market price of the ordinary shares on the NYSE the day preceding the day on which the relevant share is re-issued, except as described below with respect to obligations under employee share schemes, which may be at a minimum price of nominal value. Any re-allotment of treasury shares will be at price levels that the Board considers in the best interests of our shareholders.

As required under Irish law, the resolution in respect of this proposal is a special resolution that requires the affirmative vote of at least 75% of the votes cast.

Ingersoll Rand 2016 Proxy Statement   21



Table of Contents

PROPOSALS REQUIRING YOUR VOTE


The text of the resolution in respect of this proposal is as follows:

“As a special resolution, that the re-allotment price range at which any treasury shares held by the Company may be re-allotted shall be as follows:

 
(a) the maximum price at which such treasury share may be re-allotted shall be an amount equal to 120% of the “market price”; and
 
(b) the minimum price at which a treasury share may be re-allotted shall be the nominal value of the share where such a share is required to satisfy an obligation under an employee share scheme or any option schemes operated by the Company or, in all other cases, an amount equal to 95% of the “market price”; and
 
(c) for the purposes of this resolution, the “market price” shall mean the closing market price of the ordinary shares on the NYSE the day preceding the day on which the relevant share is re-allotted.
 

FURTHER, that this authority to reissue treasury shares shall expire at 18 months from the date of the passing of this resolution unless previously varied or renewed in accordance with the provisions of Sections 109 and 1078 of the Companies Act 2014.”


    Item 7.

Amend the Company’s Articles of Association to implement proxy access.
  

The Board of Directors recommends that shareholders vote FOR the proposal to amend the Company’s Articles of Association to implement proxy access.
 

In connection with a review of our corporate governance practices, our Board of Directors has decided to proactively propose the adoption of proxy access to our shareholders. We are recommending that our shareholders approve amendments to our Articles of Association to implement proxy access. Proxy access would allow eligible shareholders to nominate their own nominees for election to our Board and have their nominees included in our proxy materials, along with the candidates nominated by the Board. Our Board is committed to strong corporate governance practices and believes that proxy access is in the best interests of the Company and its shareholders.

We believe that the implementation of proxy access in the manner set forth in this proposal will provide meaningful rights to our shareholders while ensuring the rights are used by shareholders in a responsible manner. The resolution in respect of this Item 7 is a special resolution that requires the affirmative vote of the holders of at least 75% of the votes cast. If approved by shareholders, proxy access will become effective immediately and will be available for use at our 2017 annual general meeting of shareholders.

DESCRIPTION OF THE PROXY ACCESS AMENDMENTS

The following description is only a summary and is qualified in its entirety by reference to the complete text of the proposed amendments, which is attached to this proxy statement as Appendix B. We urge you to read Appendix B in its entirety before casting your vote.

SHAREHOLDER ELIGIBILITY TO NOMINATE DIRECTORS

Any shareholder or group of up to 20 shareholders that has maintained ownership of 3% or more of the Company’s shares continuously for at least three years would be permitted to include a specified number of director nominees in the Company’s proxy materials for the annual general meeting.

CALCULATION OF QUALIFYING OWNERSHIP

In order to ensure that the interests of shareholders seeking to include candidates in the Company’s proxy materials are aligned with those of other shareholders, a shareholder would be deemed to own only those shares of the Company as to which the shareholder possesses both (1) the full voting and investment rights pertaining to such shares and (2) the full economic interest in (including the opportunity for profit and risk of loss on) such shares. The following shares would not count as “owned” shares for purposes of determining whether the ownership threshold has been met:

shares sold by a person or any of its affiliates in any transaction that has not been settled or closed;
 

shares that a person or any of its affiliates borrowed or purchased pursuant to an agreement to resell; and
 

shares subject to any derivative instrument or similar agreement in respect of the Company’s shares, which instrument or agreement has the purpose or effect of (1) reducing the person’s or affiliates’ full right to vote or direct the voting of any such


22



Table of Contents

PROPOSALS REQUIRING YOUR VOTE


shares and/or (2) hedging, offsetting or altering the gain or loss arising from the full economic ownership of such person’s or affiliates’ shares.

A shareholder will be deemed to “own” shares held in the name of a nominee or other intermediary so long as the person claiming ownership of such shares retains the right to instruct how the shares are voted with respect to the election of directors and possesses the full economic interest in the shares. A shareholder’s ownership of shares will also be deemed to continue during any period in which such person has loaned such shares, provided that the person has the power to recall such loaned shares on three U.S. business days’ notice.

NUMBER OF SHAREHOLDER-NOMINATED CANDIDATES

The maximum number of candidates nominated by all eligible shareholders that the Company would be required to include in its proxy materials cannot exceed the greater of two nominees or 20% of the number of directors in office as of the last day on which a notice of proxy access nomination may be delivered to the Company. Any candidate who is subsequently withdrawn, disqualified or included by the Board in the Company’s proxy materials as a Board-nominated candidate would be counted against the nominee limit.

In addition, candidates that are included in the Company’s proxy materials pursuant to an agreement or other arrangement with one or more shareholders in lieu of such person being formally nominated as a director pursuant the Company’s advance notice or proxy access provisions would be counted against the nominee limit. Moreover, directors that the Board nominates for reelection that were previously elected pursuant to the Company’s proxy access provisions or pursuant to an agreement or other arrangement with one or more shareholders in lieu of such person being formally nominated as a director pursuant to the Company’s advance notice or proxy access provisions, in each case, at one of the previous two annual general meetings, would be counted against the nominee limit.

PROCEDURE FOR ELECTING CANDIDATES IF NOMINEE LIMIT IS EXCEEDED

Any shareholder or group of shareholders that submits more than one candidate for inclusion in the Company’s proxy materials would be required to rank its candidates. If the number of candidates exceeds the nominee limit, the highest ranking eligible candidate from each shareholder or group of shareholders will be included in the Company’s proxy materials until the limit is reached, beginning with the shareholder or group of shareholders with the largest number of shares.

NOMINATING PROCEDURES

In order to provide adequate time to assess shareholder-nominated candidates, requests to include such candidates in the Company’s proxy materials must be received no earlier than 150 days and no later than 120 days before the first anniversary of the date on which the Company’s definitive proxy statement was released to shareholders in connection with the prior year’s annual general meeting.

INFORMATION REQUIRED BY ALL NOMINATING SHAREHOLDERS

Each shareholder seeking to include a candidate in the Company’s proxy materials would be required to provide certain information to the Company, including but not limited to:

verification of, and information regarding, the stock ownership of the shareholder as of the date of the submission and the record date for the annual meeting;
 

information regarding each candidate, including biographical and stock ownership information;
 

in the case of a nomination by a group of shareholders, the designation by all group members of one specified group member that is authorized to act on behalf of all group members with respect to the nomination and all related matters;
 

a copy of the Schedule 14N filed by the shareholder(s) with the SEC; and
 

a description of any financial arrangement with respect to the nomination between the shareholder or candidate and any other person.


Shareholders and candidates, as applicable, would also be required to make certain representations to, and agreements with, the Company, including but not limited to:

representation that such person does not have any intent to change or influence control of the Company;
 

representation that such shareholder will maintain qualifying ownership through the date of the applicable annual general meeting;
 

agreement to refrain from soliciting in support of the election of any individual as a director other than its candidate(s) or a nominee of the Board;


Ingersoll Rand 2016 Proxy Statement   23



Table of Contents

PROPOSALS REQUIRING YOUR VOTE


agreement to provide written statements verifying continuous qualifying ownership through the record date for the applicable annual general meeting;
 

agreement by the candidate to refrain from becoming a party to any agreement or commitment as to how such candidate will vote on any issue if elected as a director of the Company;
 

unless disclosed to the Company, agreement by the candidate to refrain from becoming a party to any compensatory or other financial arrangement with any person other than with the Company in connection with such person’s service as a director of the Company;
 

agreement to not distribute any form of proxy for the annual general meeting other than the form distributed by the Company;
 

agreement to comply with applicable laws and Company policies and assume liability arising out of the communications with the Company and its shareholders and indemnify the Company and its directors and officers for liability arising from or relating to the nomination; and
 

representation as to the accuracy and completeness of all information provided to the Company.


EXCLUSION OF SHAREHOLDER NOMINEES

The Company would not be required to include a candidate in the Company’s proxy materials if, among other things:

any shareholder nominates a person for election pursuant to the advance notice provisions of the Company’s Articles, or any director then in office was previously nominated by a shareholder pursuant to the advance notice provisions in the Company’s Articles at one of the previous two annual general meetings;
 

the candidate is not independent under applicable independence standards or has been an officer or director of a competitor within the past three years;
 

the election of the candidate would cause the Company to violate its Memorandum or Articles of Association, the rules and listing standards of the principal exchange upon which the Company’s shares are listed, any applicable law, rule or regulation or any publicly disclosed standards of the Company applicable to directors;
 

the candidate or the shareholder has provided materially untrue or misleading information to the Company; or
 

the candidate’s then-current business or personal interests or those within the preceding ten years place the candidate in a conflict of interest with the Company or any of its subsidiaries that would cause the candidate to violate any fiduciary duties of directors under the Companies Act 2014.

In addition, the Board or the chairman of the annual general meeting will declare a director nomination to be defective, and such nomination will be disregarded, if the shareholder or candidate breaches any of their respective obligations under the Company’s Articles of Association, including its proxy access provision, or either the candidate or the shareholder does not appear at the annual general meeting in person.

FUTURE DISQUALIFICATION OF SHAREHOLDER-NOMINATED CANDIDATES AND NOMINATING SHAREHOLDERS

Any candidate who is included in the Company’s proxy materials but subsequently either withdraws from or becomes ineligible for election at the meeting or does not receive at least 25% of the votes cast in favor of election would be ineligible for nomination at the following two annual general meetings.

Shareholders will be disqualified from using proxy access at the following two annual general meetings if they submit a candidate under either proxy access or advance notice and such candidate does not receive 10% of the votes cast or such candidate withdraws or becomes ineligible.

SUPPORTING STATEMENT

Shareholders would be permitted to include in the Company’s proxy statement for the applicable annual general meeting a written statement of up to 500 words in support of the election of the candidate. The Company would be permitted to omit any information or statement that the Company determines is materially false or misleading or whose disclosure would violate any applicable law or regulation.

The text of the resolution in respect of this proposal is as follows:

“As a special resolution that the Articles of Association be and are hereby amended in the manner provided in Appendix B of this proxy statement.”

24



Table of Contents

PROPOSALS REQUIRING YOUR VOTE

    Item 8A and 8B.

Amend the Company’s: (A) Articles of Association to make certain administrative amendments and (B) Memorandum of Association to make certain administrative amendments.

  

The Board of Directors recommends that shareholders vote FOR the proposals to amend the Company’s: (A) Articles of Association to Make Certain Administrative Amendments and (B)Memorandum of Association to Make Certain Administrative Amendments.

Item 8A sets out certain proposed amendments to our Articles of Association, and Item 8B sets out certain proposed amendments to our Memorandum of Association. Under Irish law, any amendment to a public company’s Articles of Association must be voted on separately from any amendment to a public company’s Memorandum of Association. For that reason, we are asking shareholders to separately vote on Items 8A and 8B; however, given the inextricable link between Items 8A and 8B, each proposal is subject to the other being approved by shareholders, and as a result, both proposals will fail if either proposal does not pass.

    Item 8A.

Amend the Company’s Articles of Association to make certain administrative amendments.

  

The Board of Directors recommends that shareholders vote FOR the proposal to amend the Company’s Articles of Association to make certain administrative amendments.

Set out below is background information on the proposed amendments to our Articles of Association pursuant to this proposal. The description of the following proposed amendments is only a summary and is qualified in its entirety by reference to the complete text of the proposed amendments, which is attached to this proxy statement as Part I of Appendix C. We urge you to read Part I of Appendix C in its entirety before casting your vote.

On June 1, 2015, the Companies Act 2014 took effect in Ireland. The Companies Act 2014 is meant to consolidate and modernize company law in Ireland. Although the changes to Irish company law will not impact our day-to-day operations, we must make some administrative updates to our Articles of Association to ensure that they are not impacted or affected by the introduction of this new law. None of the updates to our Articles of Association proposed to be made in connection with the Companies Act 2014 will materially change the rights of our shareholders.

As an example, the Companies Act 2014 will automatically apply certain sections of the Act to the Company unless we explicitly opt-out. Given many of these sections either address matters that are already covered by our Articles of Association or are not applicable to us, we are proposing to amend our Articles of Association to explicitly opt-out of certain provisions, as permitted by the Companies Act 2014. For example, the Companies Act 2014 includes a provision regarding the appointment of directors, which is already covered by existing provisions in our Articles of Association and we therefore recommend opting out of that provision.

Attached as Appendix D to this proxy statement is a table that sets out a summary of the optional provisions from which we propose to opt-out, as well as certain other administrative amendments that we propose to make to our Articles of Association to address the adoption of the Companies Act 2014. Each of the proposed administrative amendments is summarized in more detail in Part III of Appendix D.

As required under Irish law, the resolution in respect of Item 8A is a special resolution that requires the affirmative vote of the holders of at least 75% of the votes cast. In addition, Item 8A is subject to Item 8B being adopted. Therefore, unless shareholders approve Items 8B, Item 8A will fail.

The text of the resolution in respect of this proposal is as follows:

“As a special resolution that, subject to and conditional upon Item 8B being passed, the Articles of Association be and are hereby amended in the manner provided in Part I of Appendix C of this proxy statement.”

Ingersoll Rand 2016 Proxy Statement   25



Table of Contents

PROPOSALS REQUIRING YOUR VOTE

    Item 8B.

Amend the Company’s Memorandum of Association to make certain administrative amendments.

  

The Board of Directors recommends that shareholders vote FOR the proposal to amend the Company’s Memorandum of Association to make certain administrative amendments.

Set out below is background information on the proposed amendments to our Memorandum of Association. The description of the following proposed amendments is only a summary and is qualified in its entirety by reference of the complete text of the proposed amendments, which is attached to this proxy statement as Part II of Appendix C. We urge you to read Part II of Appendix C in its entirety before casting your vote.

As described above, on June 1, 2015, the Companies Act 2014 took effect in Ireland. In addition to the proposed amendments described above to our Articles of Association to accommodate the adoption of the Companies Act 2014, we must also make certain corresponding administrative amendments to our Memorandum of Association to account for the adoption of the Companies Act 2014. None of the updates to our Memorandum of Association proposed to be made in connection with the Companies Act 2014 will materially change the rights of our shareholders. The proposed amendments to our Memorandum of Association are each specifically described in the text of the resolution below, as required under Irish law.

As required under Irish law, the resolution in respect of Item 8B is a special resolution that requires the affirmative vote of the holders of at least 75% of the votes cast. In addition, Item 8B is subject to Item 8A being adopted. Therefore, unless shareholders approve Item 8A, Item 8B will fail.

The text of the resolution in respect of this proposal is as follows:

“As a special resolution that, subject to and conditional upon Item 8A being passed, the Memorandum of Association be and is hereby amended as follows and in the manner provided in Part II of Appendix C of this proxy statement:

     (a)  by the deletion of the existing clause 2 and the substitution therefor of the following new clause 2:
“2. The Company is a public limited company, registered under Part 17 of the Companies Act 2014”;
(b) by the deletion of the existing clause 3(c);
(c) the words “Section 155 of the Companies Act, 1963” in clause 3(14) be deleted and the words “the Companies Act 2014” be substituted therefor; and
(d) the words “wives” in clause 3(22) be deleted and the words “spouses, civil partners” be substituted therefor.”

    Item 9A and 9B.

To amend the Company’s Articles of Association to: (A) provide for a plurality voting standard in the event of a contested election and (B) grant the Board sole authority to determine its size.

  

The Board of Directors recommends that shareholders vote FOR the proposals to (A) provide for a plurality voting standard in the event of a contested election and (B) grant the Board sole authority to determine its size.

Item 9A sets out proposed amendments to our Articles of Association to provide for a plurality voting standard in the context of a contested election, and Item 9B sets out proposed amendments to our Articles of Association to provide the Board the sole authority to set its size. Under Irish law, unless the Board is granted sole authority to set its size, the plurality voting standard would not achieve its desired results. For example, unless the Board is granted sole authority to set its size, nominees (including the Company’s nominees) who receive a simple majority of votes cast may also be elected to the Board, even if those nominees receive fewer votes than other nominees that were elected to fill the available seats. In contrast, in the United States, under a plurality voting standard, only those directors who receive the most votes for the available seats are elected. Given the link between Items 9A and 9B, each proposal is subject to the other being approved by shareholders, and as a result, both proposals will fail if either proposal does not pass.

26



Table of Contents

PROPOSALS REQUIRING YOUR VOTE

    Item 9A.

To amend the Company’s Articles of Association to provide for a plurality voting standard in the event of a contested election.

  

The Board of Directors recommends that shareholders vote FOR the proposal to amend the Company’s Articles of Association to provide for a plurality voting standard in the event of a contested election.

Today, the Company has a majority voting standard for both uncontested and contested director elections. However, in the context of contested director elections, many believe that a plurality voting standard is more appropriate for a number of reasons, including to avoid the risk of a failed election (i.e., where one or more directors fails to receive a majority vote). In the United States, under a plurality voting standard, the nominees receiving the highest number of votes, regardless of whether the nominees receive a majority of the votes cast in the election, would be elected as directors. In the United States, proxy advisory firms generally support this view as well and best practice calls for a majority voting standard in uncontested director elections, and a plurality voting standard in contested elections.

In recent years, as best practices in corporate governance have evolved, there has been a shift from the historically dominant plurality voting standard in all director elections to a majority voting standard in uncontested elections and a plurality standard in contested elections. A survey of the 100 largest U.S. public companies reveals that the overwhelming majority have adopted a majority voting standard for uncontested elections while retaining a plurality voting standard for contested elections.

In light of the Board’s recommendation to proactively adopt proxy access, and the Board’s continual review of governance standards, the Board recommends that shareholders approve an amendment to our Articles of Association to provide for a plurality voting standard solely in the case of a contested election. If adopted, this amendment would provide that where the number of director nominees exceeds the number of directors to be elected, only those directors receiving the most votes for the available seats would be elected. The Board believes it is in the best interests of our shareholders to adopt the plurality voting standard in the case of contested elections, while maintaining the Company’s majority voting standard in the case of uncontested elections. Accordingly, Item 9A seeks shareholder approval to amend our Articles of Association to provide for plurality voting in a contested election.

As required under Irish law, the resolution in respect of Item 9A is a special resolution that requires the affirmative vote of the holders of at least 75% of the votes cast. In addition, Item 9A is subject to Item 9B being adopted. Therefore, unless shareholders approve Item 9B, Item 9A will fail.

The text of the resolution in respect of this proposal is as follows:

“As a special resolution that, subject to and conditional upon Item 9B being passed, the Articles of Association be and are hereby amended in the manner provided in Part I of Appendix E of this proxy statement.”

Ingersoll Rand 2016 Proxy Statement   27



Table of Contents

PROPOSALS REQUIRING YOUR VOTE

    Item 9B.

Amend the Company’s Articles of Association to grant the Board sole authority to determine its size.

  

The Board of Directors recommends that shareholders vote FOR the proposal to amend the Company’s Articles of Association to grant the Board sole authority to determine its size.

Our Board is also proposing to amend our Articles of Association to provide that the size of the Board be set solely by resolution of the Board. This amendment is necessary in order for the plurality voting mechanism described above to function effectively in Ireland. As discussed above, unless the Board is granted sole authority to set its size, nominees (including the Company’s nominees) who receive a simple majority of votes cast may also be elected to the Board, even if those nominees receive fewer votes than other nominees that were elected to fill the available seats. Accordingly, in order for proxy access (as described under Item 7 above) to operate effectively, the Board must have sole authority to set its size and a plurality voting standard must be applied in the context of contested elections.

As with plurality voting in contested elections, granting the Board sole authority to set its size is a common governance practice in the United States. A survey of the 100 largest U.S. public companies reveals that the overwhelming majority have granted their board sole authority to set the size of the board. Accordingly, Item 9B seeks shareholder approval to amend our Articles of Association to grant the Board sole authority to set its size within the parameters established in our Articles of Association.

As required under Irish law, the resolution in respect of Item 9B is a special resolution that requires the affirmative vote of the holders of at least 75% of the votes cast. In addition, Item 9B is subject to Item 9A being adopted. Therefore, unless shareholders approve Item 9A, Item 9B will fail.

The text of the resolution in respect of this proposal is as follows:

“As a special resolution that, subject to and conditional upon Item 9A being passed, the Articles of Association be and are hereby amended in the manner provided in Part II of Appendix E of this proxy statement.”

28



Table of Contents

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE GUIDELINES

Our Corporate Governance Guidelines, together with the charters of the various Board committees, provide a framework for the corporate governance of the Company. The following is a summary of our Corporate Governance Guidelines and practices. A copy of our Corporate Governance Guidelines, as well as the charters of each of our Board committees, are available on our website at www.ingersollrand.com under the heading “Investor Relations – Corporate Governance.”

ROLE OF THE BOARD OF DIRECTORS

The Company’s business is managed under the direction of the Board of Directors. The role of the Board of Directors is to oversee the management and governance of the Company and monitor senior management’s performance.

BOARD RESPONSIBILITIES

The Board of Directors’ core responsibilities include:

selecting, monitoring, evaluating and compensating senior management;
 

assuring that management succession planning is adequate;
 

reviewing the Company’s financial controls and reporting systems;
 

overseeing the Company’s management of enterprise risk;
 

reviewing the Company’s ethical standards and legal compliance programs and procedures; and
 

evaluating the performance of the Board of Directors, Board committees and individual directors.

BOARD LEADERSHIP STRUCTURE

The positions of Chairman of the Board and CEO at the Company are held by the same person, except in unusual circumstances, such as during a CEO transition. This policy has worked well for the Company. It is the Board of Directors’ view that the Company’s corporate governance principles, the quality, stature and substantive business knowledge of the members of the Board, as well as the Board’s culture of open communication with the CEO and senior management are conducive to Board effectiveness with a combined Chairman and CEO position.

In addition, the Board of Directors has a strong, independent Lead Director and it believes this role adequately addresses the need for independent leadership and an organizational structure for the independent directors. The Board of Directors appoints a Lead Director for a three-year minimum term from among the Board’s independent directors. The Lead Director coordinates the activities of all of the Board’s independent directors. The Lead Director is the principal confidant to the CEO and ensures that the Board of Directors has an open, trustful relationship with the Company’s senior management team. In addition to the duties of all directors, as set forth in the Company’s Governance Guidelines, the specific responsibilities of the Lead Director are as follows:

Chair the meetings of the independent directors when the Chairman is not present;
 

Ensure the full participation and engagement of all Board members in deliberations;
 

Lead the Board of Directors in all deliberations involving the CEO’s employment, including hiring, contract negotiations, performance evaluations, and dismissal;
 

Counsel the Chairman on issues of interest/concern to directors and encourage all directors to engage the Chairman with their interests and concerns;
 

Work with the Chairman to develop an appropriate schedule of Board meetings and approve such schedule, to ensure that the directors have sufficient time for discussion of all agenda items, while not interfering with the flow of Company operations;
 

Work with the Chairman to develop the Board and Committee agendas and approve the final agendas;
 

Keep abreast of key Company activities and advise the Chairman as to the quality, quantity and timeliness of the flow of information from Company management that is necessary for the directors to effectively and responsibly perform their duties; although Company management is responsible for the preparation of materials for the Board of Directors, the Lead Director will approve information provided to the Board and may specifically request the inclusion of certain material;
 

Engage consultants who report directly to the Board of Directors and assist in recommending consultants that work directly for Board Committees;
 

Work in conjunction with the Corporate Governance and Nominating Committee in compliance with Governance Committee processes to interview all Board candidates and make recommendations to the Board of Directors;


Ingersoll Rand 2016 Proxy Statement   29




Table of Contents

CORPORATE GOVERNANCE

Assist the Board of Directors and Company officers in assuring compliance with and implementation of the Company’s Governance Guidelines; work in conjunction with the Corporate Governance Committee to recommend revisions to the Governance Guidelines;
 

Call, coordinate and develop the agenda for and chair executive sessions of the Board’s independent directors; act as principal liaison between the independent directors and the CEO;
 

Work in conjunction with the Corporate Governance and Nominating Committee to identify for appointment the members of the various Board Committees, as well as selection of the Committee chairs;
 

Be available for consultation and direct communication with major shareholders;
 

Make a commitment to serve in the role of Lead Director for a minimum of three years; and
 

Help set the tone for the highest standards of ethics and integrity.

Mr. Swift has been the Company’s Lead Director since January 2010.

BOARD RISK OVERSIGHT

The Board of Directors has oversight responsibility of the processes established to report and monitor systems for material risks applicable to the Company. The Board of Directors focuses on the Company’s general risk management strategy and the most significant risks facing the Company and ensures that appropriate risk mitigation strategies are implemented by management. The full Board is responsible for considering strategic risks and succession planning and, at each Board meeting, receives reports from each Committee as to risk oversight within their areas of responsibility. The Board of Directors has delegated to its various committees the oversight of risk management practices for categories of risk relevant to their functions as follows:

The Audit Committee oversees risks associated with the Company’s systems of disclosure controls and internal controls over financial reporting, as well as the Company’s compliance with legal and regulatory requirements.
 

The Compensation Committee considers risks related to the attraction and retention of talent and risks related to the design of compensation programs and arrangements.
 

The Corporate Governance and Nominating Committee oversees risks associated with board succession, conflicts of interest, corporate governance and sustainability.
 

The Finance Committee oversees risks associated with foreign exchange, insurance, credit and debt.

The Company has appointed the Chief Financial Officer as its Chief Risk Officer and, in that role, the Chief Risk Officer periodically reports on risk management policies and practices to the relevant Board Committee or to the full Board so that any decisions can be made as to any required changes in the Company’s risk management and mitigation strategies or in the Board’s oversight of these. As part of its oversight of the Company’s executive compensation program, the Compensation Committee considers the impact of the Company’s executive compensation program and the incentives created by the compensation awards that it administers on the Company’s risk profile. In addition, the Company reviews all of its compensation policies and procedures, including the incentives that they create and factors that may reduce the likelihood of excessive risk taking, to determine whether they present a significant risk to the Company. Based on this review, the Company has concluded that its compensation policies and procedures are not reasonably likely to have a material adverse effect on the Company.

DIRECTOR COMPENSATION AND SHARE OWNERSHIP

It is the policy of the Board of Directors that directors’ fees be the sole compensation received from the Company by any non-employee director. The Company has a share ownership requirement of four times the annual cash retainer paid to the directors. A director cannot sell any shares of Company stock until he or she attains such level of ownership and any sale thereafter cannot reduce the total number of holdings below the required ownership level. Directors are required to retain this minimum level of Company share ownership until their resignation or retirement from the Board.

BOARD COMMITTEES

The Board of Directors has the following committees: Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee, Finance Committee, Technology and Innovation Committee and Executive Committee. The Board of Directors consists of a substantial majority of independent, non-employee directors. Only non-employee directors serve on the Audit, Compensation, Corporate Governance and Nominating, Finance and Technology and Innovation Committees. The Board of Directors has determined that each member of each of these committees is “independent” as defined in the NYSE listing standards and the Company’s Guidelines for Determining Independence of Directors. Chairpersons and members of these five committees are rotated periodically, as appropriate. The Chairman, who is also the CEO, serves on the Company’s Executive Committee and is Chairperson of such Committee. The remainder of the Executive Committee is comprised of the non-employee director Chairpersons of the Audit, Compensation, Corporate Governance and Nominating and Finance Committees.Committee memberships and chairs are rotated periodically.

30



Table of Contents

CORPORATE GOVERNANCE

BOARD DIVERSITY

The Company’s policy on Board diversity relates to the selection of nominees for the Board of Directors. In selecting a nominee for the Board, the Corporate Governance and Nominating Committee considers the skills, expertise and background that would complement the existing Board and ensure that its members are of sufficiently diverse and independent backgrounds, recognizing that the Company’s businesses and operations are diverse and global in nature. The Board of Directors has four female directors, one Hispanic director, one Asian director and two Irish directors out of a total of 12 directors.

BOARD ADVISORS

The Board of Directors and its committees may, under their respective charters, retain their own advisors to carry out their responsibilities.

EXECUTIVE SESSIONS

The Company’s independent directors meet privately in regularly scheduled executive sessions, without management present, to consider such matters as the independent directors deem appropriate. These executive sessions are required to be held no less than twice each year.

BOARD AND BOARD COMMITTEE PERFORMANCE EVALUATION

The Corporate Governance and Nominating Committee assists the Board in evaluating its performance and the performance of the Board committees. Each committee also conducts an annual self-evaluation. The effectiveness of individual directors is considered each year when the directors stand for re-nomination.

DIRECTOR ORIENTATION AND EDUCATION

The Company has developed an orientation program for new directors and provides continuing education for all directors. In addition, the directors are given full access to management and corporate staff as a means of providing additional information.

DIRECTOR NOMINATION PROCESS

The Corporate Governance and Nominating Committee reviews the composition of the full Board to identify the qualifications and areas of expertise needed to further enhance the composition of the Board, makes recommendations to the Board concerning the appropriate size and needs of the Board and, on its own or with the assistance of management, a search firm or others, identifies candidates with those qualifications. In considering candidates, the Corporate Governance and Nominating Committee will take into account all factors it considers appropriate, including breadth of experience, understanding of business and financial issues, ability to exercise sound judgment, diversity, leadership, and achievements and experience in matters affecting business and industry. The Corporate Governance and Nominating Committee considers the entirety of each candidate’s credentials and believes that at a minimum each nominee should satisfy the following criteria: highest character and integrity, experience and understanding of strategy and policy-setting, sufficient time to devote to Board matters, and no conflict of interest that would interfere with performance as a director. Shareholders may recommend candidates for consideration for Board membership by sending the recommendation to the Corporate Governance and Nominating Committee, in care of the Secretary of the Company. Candidates recommended by shareholders are evaluated in the same manner as director candidates identified by any other means.

DIRECTOR RETIREMENT

It is the policy of the Board of Directors that each non-employee director must retire at the annual general meeting immediately following his or her 75th birthday. Directors who change the occupation they held when initially elected must offer to resign from the Board of Directors. At that time, the Corporate Governance and Nominating Committee reviews the continued appropriateness of Board membership under the new circumstances and makes a recommendation to the Board of Directors. Employee directors, including the CEO, must retire from the Board of Directors at the time of a change in their status as an officer of the Company, unless the policy is waived by the Board.

DIRECTOR INDEPENDENCE

The Board of Directors has determined that all of our current directors and director nominees, except Mr. Lamach, who is an employee of the Company, are independent under the standards set forth in Exhibit I to our Corporate Governance Guidelines, which are consistent with the NYSE listing standards. In determining the independence of directors, the Board evaluated transactions between the Company and entities with which directors were affiliated that occurred in the ordinary course of business and that were provided on the same terms and conditions available to other customers. A copy of Exhibit I to our Corporate Governance Guidelines is available on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance.”

Ingersoll Rand 2016 Proxy Statement   31



Table of Contents

CORPORATE GOVERNANCE

COMMUNICATIONS WITH DIRECTORS

Shareholders and other interested parties wishing to communicate with the Board of Directors, the non-employee directors or any individual director (including our Lead Director and Compensation Committee Chair) may do so either by sending a communication to the Board and/or a particular Board member, in care of the Secretary of the Company, or by e-mail at irboard@irco.com. Depending upon the nature of the communication and to whom it is directed, the Secretary will: (a) forward the communication to the appropriate director or directors; (b) forward the communication to the relevant department within the Company; or (c) attempt to handle the matter directly (for example, a communication dealing with a share ownership matter).

CODE OF CONDUCT

The Company has adopted a worldwide Code of Conduct, applicable to all employees, directors and officers, including our Chief Executive Officer, our Chief Financial Officer and our Controller. The Code of Conduct meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K, as well as the requirements of a “code of business conduct and ethics” under the NYSE listing standards. The Code of Conduct covers topics including, but not limited to, conflicts of interest, confidentiality of information, and compliance with laws and regulations. A copy of the Code of Conduct is available on our website located at www.ingersollrand.com under the heading “Investor Relations—Corporate Governance.” Amendments to, or waivers of the provisions of, the Code of Conduct, if any, made with respect to any of our directors and executive officers will be posted on our website.

ANTI-HEDGING POLICY AND OTHER RESTRICTIONS

The Company prohibits its directors and executive officers from (i) purchasing any financial instruments designed to hedge or offset any decrease in the market value of Company securities, (ii) engaging in any form of short-term speculative trading in Company securities and (iii) holding Company securities in a margin account or pledging Company securities as collateral for a loan.

INVESTOR OUTREACH

We believe it is important to understand our shareholders and their concerns and questions about our Company. During 2015, we met with a number of our top shareholders to answer questions about our Company and to learn about issues that are important to them. We hosted an Investor Day which was attended by over 50 of our investors and all of our senior management and publicly webcast informational sessions for availability to all of our shareholders. We also worked with a third party firm to survey investor perception regarding our Company on a wide range of topics including corporate governance and executive compensation. The results of this survey were favorable. We intend to continue our investor outreach efforts and plan to expand those efforts during 2016.

32



Table of Contents

CORPORATE GOVERNANCE

COMMITTEES OF THE BOARD

       

AUDIT COMMITTEE
Meetings in 2015: 9

Members
John P. Surma (Chair)
Ann C. Berzin
Linda P. Hudson
Myles P. Lee
Richard J. Swift

      
Key Functions
Review annual audited and quarterly financial statements, as well as the Company’s disclosures under “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” with management and the independent auditors.
 
Obtain and review periodic reports, at least annually, from management assessing the effectiveness of the Company’s internal controls and procedures for financial reporting.
 
Review the Company’s processes to assure compliance with all applicable laws, regulations and corporate policy.
 
Recommend the public accounting firm to be proposed for appointment by the shareholders as our independent auditors and review the performance of the independent auditors.
 
Review the scope of the audit and the findings and approve the fees of the independent auditors.
 
Approve in advance, subject to and in accordance with applicable laws and regulations, permitted audit and non-audit services to be performed by the independent auditors.
 
Satisfy itself as to the independence of the independent auditors and ensure receipt of their annual independence statement.
 

The Board of Directors has determined that each member of the Audit Committee is “independent” for purposes of the applicable rules and regulations of the SEC, as defined in the NYSE listing standards and the Company’s Corporate Governance Guidelines, and has determined that each member meets the qualifications of an “audit committee financial expert,” as that term is defined by rules of the SEC. In addition, each member of the Audit Committee qualifies as an independent director and possesses the requisite competence in accounting or auditing in satisfaction of the requirements for audit committees prescribed by the Companies Act 2014.

A copy of the charter of the Audit Committee is available on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance.”


       

COMPENSATION
COMMITTEE

Meetings in 2015: 6

Members
Tony L. White (Chair)
John Bruton
Elaine L. Chao
Jared L. Cohon
Gary D. Forsee
Constance J. Horner

      
Key Functions
Establish our executive compensation strategies, policies and programs.
 
Review and approve the goals and objectives relevant to the compensation of the Chief Executive Officer, evaluate the Chief Executive Officer’s performance against those goals and objectives and set the Chief Executive Officer’s compensation level based on this evaluation. The Compensation Committee Chair presents all compensation decisions pertaining to the Chief Executive Officer to the full Board of Directors.
 
Approve compensation of all other elected officers.
 
Review and approve executive compensation and benefit programs.
 
Administer the Company’s equity compensation plans.
 
Review and recommend significant changes in principal employee benefit programs.
 
Approve and oversee Compensation Committee consultants.
 

For a discussion concerning the processes and procedures for determining NEO and director compensation and the role of executive officers and compensation consultants in determining or recommending the amount or form of compensation, see “Compensation Discussion and Analysis” and “Compensation of Directors,” respectively. The Board of Directors has determined that each member of the Compensation Committee is “independent” as defined in the NYSE listing standards and the Company’s Corporate Governance Guidelines. In addition, the Board of Directors has determined that each member of the Compensation Committee qualifies as a “Non-Employee Director” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 and an “outside director” within the meaning of Section 162(m) of the Code.

A copy of the charter of the Compensation Committee is available on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance.”


Ingersoll Rand 2016 Proxy Statement   33



Table of Contents

CORPORATE GOVERNANCE

       

CORPORATE
GOVERNANCE
AND NOMINATING
COMMITTEE

Meetings in 2015: 6

Members
Gary D. Forsee (Chair)
John Bruton
Elaine L. Chao
Jared L. Cohon
Constance J. Horner
Tony L. White

      
Key Functions
Identify individuals qualified to become directors and recommend the candidates for all directorships.
 
Recommend individuals for election as officers.
 
Review the Company’s Corporate Governance Guidelines and make recommendations for changes.
 
Consider questions of independence of directors and possible conflicts of interest of directors as well as executive officers.
 
Take a leadership role in shaping the corporate governance of the Company.
 
Oversee the Company’s sustainability efforts.
 

The Board of Directors has determined that each member of the Corporate Governance and Nominating Committee is “independent” as defined in the NYSE listing standards and the Company’s Corporate Governance Guidelines.

A copy of the charter of the Corporate Governance and Nominating Committee is available on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance.”


       

FINANCE
COMMITTEE

Meetings in 2015: 6

Members
Ann C. Berzin (Chair)
Linda P. Hudson
Myles P. Lee
John P. Surma
Richard J. Swift

      
Key Functions
Consider and recommend for approval by the Board of Directors of (a) issuances of equity and/or debt securities; or (b) authorizations for other financing transactions, including bank credit facilities.
 
Consider and recommend for approval by the Board of Directors the repurchase of the Company’s shares.
 
Review cash management policies.
 
Review periodic reports of the investment performance of the Company’s employee benefit plans.
 

The Board of Directors has determined that each member of the Finance Committee is “independent” as defined in the NYSE listing standards and the Company’s Corporate Governance Guidelines.

A copy of the charter of the Finance Committee is available on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance” on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance.”


       

EXECUTIVE
COMMITTEE

Meetings in 2015: 0

Members
Michael W. Lamach
(Chair)
Ann C. Berzin
Gary D. Forsee
John P. Surma
Richard J. Swift
Tony L. White

      
Key Functions
Aids the Board in handling matters which, in the opinion of the Chairman of the Board or Lead Director, should not be postponed until the next scheduled meeting of the Board (except as limited by the charter of the Executive Committee).
 
 
 
 
 
 
 
 

The Board of Directors has determined that each member of the Executive Committee (other than Michael W. Lamach) is “independent” as defined in the NYSE listing standards and the Company’s Corporate Governance Guidelines.

A copy of the charter of the Executive Committee is available on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance” on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance.”


34



Table of Contents

CORPORATE GOVERNANCE

       

TECHNOLOGY
AND INNOVATION
COMMITTEE

Meetings in 2015: 0*

Members
Jared L. Cohon (Chair)
John Bruton
Gary D. Forsee
Linda P. Hudson
Richard J. Swift
Tony L. White

*Committee formed in
2016

      
Key Functions
Reviews the Company’s technology and innovation strategy and approach, including its impact on the Company’s performance, growth and competitive position.
 
Reviews with management technologies that can have a material impact on the Company, including product and process development technologies, manufacturing technologies and practices, and the utilization of quality assurance programs.
 
Assists the Board in its oversight of the Company’s investments in technology and innovation, including through acquisitions and other business development activities.
 
Reviews technology trends that could significantly affect the Company and the industries in which it operates. Assists the Board in its oversight of the Company’s technology and innovation initiatives.
 
Oversees the direction and effectiveness of the Company’s research and development operations
 

The Board of Directors has determined that each member of the Technology and Innovation Committee is “independent” as defined in the NYSE listing standards and the Company’s Corporate Governance Guidelines.

A copy of the charter of the Technology and Innovation Committee is available on our website, www.ingersollrand.com, under the heading “Investor Relations—Corporate Governance.”

BOARD, COMMITTEE AND ANNUAL MEETING ATTENDANCE

The Board of Directors and its committees held the following number of meetings during the fiscal year ended December 31, 2015:

   Board                                6   
Audit Committee 9
Compensation Committee 6
Corporate Governance and Nominating Committee 6
Finance Committee 6
Executive Committee 0

Each incumbent director attended 95% or more of the total number of meetings of the Board of Directors and the committees on which he or she served during the year. The Company’s non-employee directors held six independent director meetings without management present during the fiscal year 2015. It is the Board’s general practice to hold independent director meetings in connection with regularly scheduled Board meetings.

The Company expects all Board members to attend the annual general meeting, but from time to time other commitments prevent all directors from attending the meeting. All of our Board members standing for election or re-election at the 2015 Annual General Meeting attended that meeting, which was held on June 4, 2015.

Ingersoll Rand 2016 Proxy Statement   35



Table of Contents

COMPENSATION OF DIRECTORS

DIRECTOR COMPENSATION

Our director compensation program is designed to compensate non-employee directors fairly for work required for a company of our size and scope and to align their interests with the long-term interests of our shareholders. The program reflects our desire to attract, retain and use the expertise of highly qualified people serving on the Company’s Board of Directors. Employee directors do not receive any additional compensation for serving as a director. Our 2015 director compensation program for non-employee directors consisted of the following elements:

   Compensation Element            Compensation Value ($)   
Annual Retainer (1/2 paid in cash and 1/2 paid in restricted stock units) * 285,000
Audit Committee Chair Cash Retainer 30,000
Compensation Committee Chair Cash Retainer 20,000
Corporate Governance and Nominating Committee Chair and Finance Committee Chair Cash Retainer 15,000
Audit Committee Member Cash Retainer (other than Chair) 7,500
Lead Director Cash Retainer 50,000
Additional Meetings or Unscheduled Planning Session Fees ** 2,500
(per meeting or session)

* The number of restricted stock units granted are determined by dividing the grant date value of the award, $142,500 by the average of the high and low closing price of the Company’s common stock on the date of grant. A director who retires, resigns or otherwise separates from the Company receives a pro-rata cash retainer payment for the quarter in which such event occurs based on the number of days elapsed since the end of the immediately preceding quarter.
 
** The Board and the Compensation Committee, Corporate Governance and Nominating Committee and Finance Committee, each has 6 regularly scheduled meetings each year. The Audit Committee has 9 regularly scheduled meetings each year. The Technology and Innovation Committee meets at least once a year. The Executive Committee meets on an as needed basis when directed by the Chairman or Lead Director.

In addition, non-employee directors were previously eligible to receive a tax equalization payment if the Irish income taxes owed on their director compensation exceeded the income taxes owed on such compensation in their country of residence. Without these tax equalization payments, a director would have been subject to double taxation since they were already paying taxes on their director income in their country of residence. We believe these tax equalization payments were appropriate to ensure our ability to continue to attract highly qualified persons who did not reside in Ireland. In 2015, one non-employee director received a tax equalization payment relating to the retainer earned in the 2013 fiscal year. In 2014, our Corporate Governance and Nominating Committee eliminated the tax equalization payments on retainers beginning with the retainers earned for the 2014 fiscal year.

In October 2015, we formed an Executive Committee. Mr. Lamach does not receive any compensation for serving as the chairman of the Executive Committee. In 2016, we formed a Technology and Innovation Committee. The Chair of the Technology and Innovation Committee receives a $7,500 annual retainer fee.

SHARE OWNERSHIP REQUIREMENT

To align the interests of directors with shareholders, the Board of Directors has adopted a share ownership requirement of four times the annual cash retainer paid to the directors. A director cannot sell any shares of Company stock until he or she attains such level of ownership and any sale thereafter cannot reduce the total number of holdings below the required ownership level. Directors are required to retain this minimum level of Company share ownership until their resignation or retirement from the Board.

36



Table of Contents

COMPENSATION OF DIRECTORS

2015 DIRECTOR COMPENSATION

The compensation paid or credited to our non-employee directors for the year ended December 31, 2015, is summarized in the table below.

   Name Fees earned
or paid in cash

($) (a)
        Equity / Stock
Awards

($) (b)
        All Other
Compensation

($) (c)
        Total
($)
  
A. C. Berzin 167,500 142,542 38,473 348,515
J. Bruton 145,000 142,542 287,542
E. L. Chao 81,820 142,542 224,362
J.L. Cohon 142,500 142,542 285,042
G.D. Forsee 167,500 142,542 310,042
E.E. Hagenlocker (d) 127,317 127,317
C.J. Horner 142,500 142,542 285,042
L. P. Hudson 86,126 142,542 228,668
M. P. Lee 135,833 142,542 278,375
T.E. Martin (d) 127,317 24,899 152,216
J.P. Surma 167,857 142,542 310,399
R.J. Swift 217,143 142,542 359,685
T.L. White 165,000 142,542 307,542

(a) The amounts in this column represent the following annual cash retainer, the Committee Chair retainers, the Audit Committee member retainer, the Lead Director retainer, and the Board, Committee and other meeting or session fees:

         Name      Cash
Retainer
($)
     Committee
Chair Retainer
($)
     Audit
Committee
Member
Retainer
($)
     Lead Director
Retainer Fees
($)
     Board,
Committee and
Other Meeting
or Session Fees
($)
     Total Fees
earned or
paid in cash
($)
  
A. C. Berzin 142,500 15,000 7,500 2,500 167,500
J. Bruton 142,500 2,500 145,000
E. L. Chao 81,820 81,820
J.L. Cohon 142,500 142,500
G.D. Forsee 142,500 15,000 10,000 167,500
E.E. Hagenlocker 121,603 3,214 2,500 127,317
C.J. Horner 142,500 142,500
L. P. Hudson 81,820 4,306 86,126
M. P. Lee 129,042 6,791 135,833
T.E. Martin 121,603 3,214 2,500 127,317
J.P. Surma 142,500 17,143 3,214 5,000 167,857
R.J. Swift 142,500 12,857 4,286 50,000 7,500 217,143
T.L. White 142,500 20,000 2,500 165,000

(b) Represents RSUs awarded in 2015 as part of each director’s annual retainer. The amounts in this column reflect the aggregate grant date fair value of RSU awards granted for the year under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 and do not reflect amounts paid to or realized by the directors. For a discussion of the assumptions made in determining the ASC 718 values see Note 12, “Share-Based Compensation,” to the Company’s consolidated financial statements contained in its 2015 Form 10-K.
 
(c) In the case of Ms. Berzin, represents a tax equalization payment relating to the retainer earned in the 2013 fiscal year. In the case of Mr. Martin, represents the value of a retirement gift of a Trane air conditioning system.
 
(d) Mr. Hagenlocker and Mr. Martin retired from the Board on June 4, 2015.

Ingersoll Rand 2016 Proxy Statement   37



Table of Contents

COMPENSATION OF DIRECTORS

For each non-employee director, the following table reflects at December 31, 2015 (i) unexercised stock options (all of which are vested) and (ii) unvested RSU awards:

   Name Number of Stock Options       Number of Unvested RSUs   
A. C. Berzin 2,075
J. Bruton 2,075
E. L. Chao 2,075
J.L. Cohon 10,080 2,075
G.D. Forsee 2,075
E.E. Hagenlocker
C.J. Horner 2,075
L. P. Hudson 2,075
M. P. Lee 2,075
T.E. Martin
J.P. Surma 2,075
R.J. Swift 2,075
T.L. White 2,075

38



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


The Compensation Discussion and Analysis (“CD&A”) set forth below provides an overview of our executive compensation programs, including the philosophy and objectives of such programs, as well as a discussion of how awards are determined for our Named Executive Officers (“NEOs”). These NEOs include our Chairman and Chief Executive Officer (“CEO”), our Chief Financial Officer (“CFO”), and our five most highly compensated executive officers from the 2015 fiscal year. Two additional executive officers, beyond the customary five, have been included as NEOs based on certain non-recurring compensation events that occurred in 2015. The NEOs are:

NEO Title
Mr. Michael W. Lamach Chairman and Chief Executive Officer
Ms. Susan K. Carter, Senior Vice President and Chief Financial Officer
Mr. Didier P. M. Teirlinck, Ph.D. Executive Vice President, Climate Segment
Mr. Robert G. Zafari Executive Vice President, Industrial Segment
Ms. Marcia J. Avedon, Ph.D. Senior Vice President, Human Resources, Communications and Corporate Affairs
Mr. Gary S. Michel Senior Vice President, Residential HVAC
Mr. Todd D. Wyman Senior Vice President, Compression Technologies and Services

This discussion and analysis is divided into the following sections:

I. Executive Summary

II. Compensation Philosophy and Design Principles

III. Factors Considered in the Determination of Target Total Direct Compensation

IV. Role of the Committee, Independent Advisor, and Committee Actions

V. Compensation Program Descriptions and Compensation Decisions

VI. Other Compensation and Tax Matters

I. EXECUTIVE SUMMARY

Ingersoll Rand is a world leader in the creation of comfortable, sustainable and efficient environments. Our people and our family of brands – including Ingersoll-Rand, Trane, Thermo King and Club Car – work together to enhance the quality and comfort of air in homes and buildings, transport and protect food and perishables, and increase industrial productivity and efficiency. We continue to focus on improving the efficiencies and capabilities of the products and services of our businesses. We also continue to focus on operational excellence strategies as a central theme to improving our earnings and cash flow.

In 2015 we:

Achieved organic revenue growth of 5% when excluding the impacts of currency and acquisitions.
 

Achieved 3-year average adjusted EPS growth of 13%, which approximates the 75th percentile of companies in the S&P 500 Industrials Index.
 

Acquired and successfully integrated the Cameron Centrifugal Compression Division and FRIGOBLOCK, strengthening our ability to better serve our customers and shareholders.
 

Continued to make significant strides toward our commitment to cut greenhouse gas emissions and incorporate potential alternatives into our portfolio to help lower the Company’s and our customers’ impact on global warming. In recognition of our actions we were rated in the top 10 percent of companies on S&P’s CDP (Climate Disclosure Project) annual climate change report and selected for the Dow Jones Sustainability World and North America Indices for the fifth consecutive year.
 

Continued to improve employee engagement as we sought meaningful ways to improve the working lives of our employees, which translates into improved commitment to the company’s core values and ultimately leads to improved performance.
 

Increased our dividend by 16 percent in 2015, delivering on our strategy to provide market value to our shareholders. Since 2010, the annual dividend has increased more than 300%.


Ingersoll Rand 2016 Proxy Statement   39



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


2015 RESULTS

The following table documents the financial results realized in 2015:

Metric Performance
Revenue Adjusted annual Revenue of $13.600 billion, an increase of 5.6% over 2014
Operating Income (“OI”)        Adjusted OI of $1.535 billion, an increase of 7.9% over 2014
Operating Income Margin
(“OI Margin”)
Adjusted OI margin of 11.3%, an increase of 0.2 percentage points over 2014
Cash Flow Adjusted Cash Flow of $1.021 billion, an increase of 19.7% from 2014
EPS Adjusted EPS of $3.41, an increase of 3.3% over 2014
3-Year EPS Growth 3-year EPS growth (2013 - 2015) of 12.89%, which ranks at the 76th percentile of the companies in the S&P 500 Industrials Index
3-Year TSR 3-year TSR (2013-2015) of 52.48%, which ranks at the 53rd percentile of the companies in the S&P 500 Industrials Index

Based on our adjusted 2015 results for Revenue, OI, Cash Flow and OI margin, we achieved an Annual Incentive Matrix (“AIM”) financial score of 92.51% of target for the Enterprise. At the Segment level, 2015 AIM financial scores were 128.34% of target for the Climate Segment and 0% of target for the Industrial Segment.
 

Based on our achievement of an average EPS growth rate of 12.89% and a total shareholder return (“TSR”) of 52.48% during the 2013 to 2015 performance period, PSUs under our Performance Share Program (“PSP”) paid out at 157% of target.


The Compensation Committee (the “Committee”) has adopted executive compensation programs with a strong link between pay and the achievement of short and long-term Company goals. The primary elements of the executive compensation programs are:

Total Direct Compensation
Element (1) Objective of Element
Base Salary Fixed cash compensation.
Annual Incentive (the Annual
Incentive Matrix or “AIM”)
Variable cash incentive compensation. Any award earned is based on performance against pre-defined annual revenue (“Revenue”), Operating Income (“OI”), cash flow (“Cash Flow”) and OI margin percent objectives, as well as individual performance.
Long-Term Incentives (“LTI”) Variable long-term incentive compensation. Performance is aligned with the Company’s stock price and is awarded in the form of stock options, restricted stock units (“RSUs”) and performance share units (“PSUs”). PSUs are only payable if the Company’s earnings per share (“EPS”) growth and total shareholder return (“TSR”) relative to companies in the S&P 500 Industrials Index exceed threshold performance against pre-defined objectives.

(1)

See Section V, “Compensation Program Descriptions and Compensation Decisions”, for additional discussion of these elements of compensation.


40



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


As illustrated in the charts below, the Committee places significant emphasis on variable compensation (AIM and LTI) so that a substantial percentage of each NEO’s target total direct compensation is contingent on the successful achievement of the Company’s short-term and long-term performance goals.

Chairman and CEO
2015 Compensation Mix
(Target Total Direct Compensation)

    

Other NEOs
2015 Compensation Mix
(Target Total Direct Compensation)


2015 COMMITTEE ACTIONS

The Committee took the following actions in 2015:

Reviewed proposed Dodd-Frank regulations related to pay versus performance disclosure, claw-back policies, and CEO Pay Ratios to ensure thoughtful and timely compliance when the final regulations are released.
 

Approved an amendment to the Key Management Supplemental Pension Program (the “KMP”) to require that new participants complete a minimum of five years of service following their date of participation before becoming vested in the KMP benefit.


GOOD GOVERNANCE PRACTICES

In addition to the actions taken in 2015, a number of good governance practices are in place, including:

We employ diversified metrics for our AIM and Performance Share Program (“PSP”) programs to align with business strategies and shareholder interests;
 

We tie incentive awards to the achievement of pre-determined and measurable performance objectives;
 

We place significant emphasis on variable compensation (AIM and LTI) in designing our compensation mix;
 

We maintain a claw-back/recoupment policy and robust stock ownership requirements for our executives;
 

We do not provide tax gross-ups for any change-in-control agreement entered into after May of 2009. Only 4 of our 17 officers (less than 25%) have a tax gross-up provision in an agreement entered into with such officer prior to May 2009;
 

We use tally sheets to fully understand all elements of current and potential future compensation, which are reviewed by the Committee prior to making compensation decisions for the NEOs;
 

We evaluate our peer group regularly and make adjustments when deemed appropriate;
 

We prohibit the re-pricing of equity awards;
 

We require double-trigger vesting for any cash payments under our change in control agreements; and,
 

We conduct regular reviews of our executive compensation design to ensure it addresses business needs, shareholder interests and regulatory requirements.


CONSIDERATION OF 2015 ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Committee regularly reviews the philosophy, objectives and elements of our executive compensation programs in relation to our short and long-term business objectives. In undertaking this review, the Committee considers the views of shareholders as reflected in their annual advisory vote on our executive compensation proposal. Shareholders voted 96.82% in favor of the company’s Advisory Approval of the Compensation of Our Named Executive Officers proposal at our 2015 annual general meeting. Based on the Committee’s review and the support our executive compensation programs received from shareholders, the Committee determined it would be appropriate to maintain the core elements of our executive compensation programs.

Ingersoll Rand 2016 Proxy Statement   41



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


II. COMPENSATION PHILOSOPHY AND DESIGN PRINCIPLES

Our executive compensation programs are designed to enable us to attract, retain and focus the talents and energies of executive officers (including our NEOs) who are capable of meeting the Company’s current and future goals, most notably the creation of sustainable shareholder value. As we operate in an ever-changing environment, our Committee makes decisions with consideration of economic, technological, regulatory, investor and competitive factors as well as our executive compensation principles.

The design principles that govern our executive compensation programs are:

Business strategy alignment

Our executive compensation programs provide flexibility to align with changing Company or business unit strategies. In addition, the programs allow for individuals within the Company’s businesses to focus on specific financial measures to meet the short and long-term plans of the particular business for which they are accountable. It is not only possible but also desirable for certain leaders to earn substantial awards in years when their business unit outperforms the Company as a whole. Conversely, if a business fails to meet its performance goals, that business’ leader may earn a lesser award than his or her peers in that year. To provide a balanced incentive, all executives have a significant portion of their compensation tied to Company performance.

Pay for performance

A strong pay for performance culture is paramount to our Company’s success. As a result, each executive’s target total direct compensation (“TDC”) is tied to performance of the Company, the applicable business, and the individual. Company and business performance is measured against pre-established financial, operational and strategic objectives. Individual performance is measured against pre-established individual goals as well as demonstrated leadership competencies and behaviors consistent with our Company values. In addition, a portion of the long-term incentive is earned based upon earnings and shareholder value performance relative to peer companies.

Mix of short and long-term incentives

A proper mix between short and long-term incentives is important to encourage decision making that mitigates risk and balances the need to meet our Annual Operating Plan (“AOP”) objectives while also taking into account the long-term interests of the Company and its shareholders. The mix of pay, including short and long-term incentives, is determined by considering the Company’s pay for performance compensation philosophy and strategic objectives in addition to competitive market practice.

Internal parity

Each executive’s target TDC opportunity is proportionate with the responsibility, scope and complexity of his or her role within the Company. Thus, similar jobs are assigned similar target compensation opportunities.

Shareholder alignment

Our executive compensation programs align the interests of our executives with those of our shareholders by rewarding the achievement of key financial targets such as revenue growth, EPS, and cash flow, which should correlate with share price appreciation over time. In addition, our long-term incentives are tied to total shareholder returns and increase in value as share price increases. Other program requirements, including share ownership guidelines for executives and vesting schedules on equity awards further align executives’ and shareholders’ interests.

Market competitiveness

Compensation opportunities must serve to attract and retain high performing executives in a competitive environment for talent. Therefore, TDC levels are set referencing applicable market compensation benchmarks with consideration of retention and recruiting demands in the industries and markets where we compete for business and executive talent. As a result, each executive’s target TDC may be above or below the market benchmark reference based on his or her experience, proficiency, performance and potential in performing the duties of his or her position as well as the competitive market for that individual and his or her experience.


III. FACTORS CONSIDERED IN THE DETERMINATION OF TARGET TOTAL DIRECT COMPENSATION

Our Committee reviews and evaluates our executive compensation levels and practices against those companies with which we compete for executive talent. These reviews are conducted throughout the year using a variety of methods such as:

the direct analysis of the proxy statements of other diversified industrial companies (refer to peer group below),
 

a review of compensation survey data of other global, diversified industrial companies of similar size published by independent consulting firms,
 

a review of customized compensation survey data provided by independent consulting firms, and
 

feedback received from external constituencies.


42



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


The Committee does not rely on a single source of information when making executive compensation decisions. Many of the companies included in these compensation surveys are also included in the S&P 500 Industrials Index referred to in our 2015 Form 10-K under the caption “Performance Graph.”

The Committee, with the assistance of its independent advisor, develops a peer group that it uses to evaluate executive compensation programs and levels. The 2015 peer group is comprised of seventeen global diversified industrial companies that have comparable revenue, industry and/or business fit.

The peer group is reviewed annually and is updated periodically to ensure that it appropriately reflects the Company’s size, businesses and complexity. It was last updated in 2014 and consists of the following companies:

3M Honeywell International Pentair
Cummins, Inc. Illinois Tool Works SPX Corporation
Danaher Corp Johnson Controls Inc. Stanley Black & Decker
Dover Paccar Inc. Textron
Eaton plc Parker Hannifin Corp Tyco International
Emerson Electric PPG Industries  

In assessing the relationship of CEO compensation to compensation of other executive officers (including our NEOs), the Committee considers overall organization structure and scope of responsibility and also reviews NEOs’ compensation levels relative to one another. This ensures that the target TDC levels are set in consideration of internal equity as well as market references and each executive’s experience, proficiency, performance and potential in performing the duties of their role.

IV. ROLE OF THE COMMITTEE, INDEPENDENT ADVISOR AND COMMITTEE ACTIONS

Our Committee, which is composed solely of independent directors, oversees our compensation plans and policies, administers our equity-based programs and reviews and approves all forms of compensation relating to our executive officers, including the NEOs.

The Committee exclusively decides the compensation elements and the amounts to be awarded to our CEO. Our CEO does not make any recommendations regarding his own compensation and is not informed of these awards until the decisions have been finalized. Our CEO makes compensation recommendations related to our other NEOs and executive officers. The Committee considers these recommendations when approving the compensation elements and amounts to be awarded to our other NEOs.

Our Committee is responsible for reviewing and approving amendments to our executive compensation and benefit plans. In addition, our Committee is responsible for reviewing our major broad-based employee benefit plans and making recommendations to our Board of Directors for significant amendments to, or termination of, such plans. The Committee’s duties are described in the Committee’s Charter, which is available on our website at www.ingersollrand.com.

Our Committee has the authority to retain an independent advisor for the purpose of reviewing and providing guidance related to our executive compensation and benefit programs. The Committee is directly responsible for the compensation and oversight of the independent advisor. For 2015, the Committee continued to engage Hay Group, Inc. (“Hay Group”) to serve as its independent compensation advisor. Hay Group also provided the Corporate Governance and Nominating Committee with advice on director compensation matters. The Committee determined that Hay Group is independent and does not have a conflict of interest. In making this determination, the Committee considered the factors adopted by the New York Stock Exchange with respect to independence and conflicts of interest. The Committee also considered that Hay Group was acquired in a transaction that closed on December 1, 2015, and that Hay Group became an indirectly-held, wholly owned subsidiary of Korn/Ferry International (“Korn Ferry”) and the services performed from time to time for the Company by Korn Ferry.

Ingersoll Rand 2016 Proxy Statement   43



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


V. COMPENSATION PROGRAM DESCRIPTIONS AND COMPENSATION DECISIONS

The following table provides a summary of the elements, objectives, risk mitigation factors and other key features of our TDC program. Each of these elements is described in detail below:

Element Objective of Element including
Risk Mitigation Factors
Key Features Relative to NEOs

Base Salary

To provide a sufficient and stable source of cash compensation.

To avoid encouraging excessive risk-taking by ensuring that an appropriate level of cash compensation is not variable.

Adjustments are determined by the Committee based on an evaluation of the NEO’s proficiency in fulfilling his or her responsibilities, as well as performance against key objectives and behaviors.

Base salary represents only 10% of the CEO’s target total direct compensation and only 25%, on average, for the other NEOs.

Annual Incentive Matrix       
(“AIM”) Program

To serve as an annual cash award tied to the achievement of pre-established performance objectives.

Structured to take into consideration the unique needs of the various business units.

Amount of compensation earned cannot exceed a maximum payout of 200% of individual target levels and is also subject to a claw-back in the event of a financial restatement.

Each NEO has an AIM target expressed as a percentage of base salary. Targets are set based on the compensation levels of similar jobs in comparable companies, as well as on the NEO’s experience and proficiency level in performing the duties of the role.

Actual AIM payouts are dependent on business and enterprise financial and individual performance. The financial metrics used to determine the awards for 2015 were Revenue, OI, and Cash Flow, modified (up or down) based on OI Margin performance.

AIM represents 17% of the CEO’s target total direct compensation and 22%, on average, for the other NEOs.

Performance Share
Program (“PSP”)

To serve as a long-term incentive to outperform, on a relative basis, companies in the S&P 500 Industrials Index.

To promote long-term strategic planning and discourage an overemphasis on attaining short-term goals.

Amount earned cannot exceed a maximum payout of 200% of individual target levels and is also subject to a claw-back in the event of a financial restatement.

Performance share units (“PSUs”) granted under the PSP are earned over a 3-year performance period.

The number of PSUs earned is based on relative TSR and relative EPS growth compared to companies within the S&P 500 Industrials Index (with equal weight given to each metric).

Actual value of the PSUs earned depends on our share price at the time of payment.

PSUs represent 37% of the CEO’s target total direct compensation and 27%, on average, for the other NEOs.

Stock Options /
Restricted Stock Units
(“RSUs”)

Aligns the interests of the NEOs and shareholders.

Awards provide a balanced approach between risk and retention.

Awards are subject to a claw-back in the event of a financial restatement.

Stock options and RSUs are granted annually, with stock options having an exercise price equal to the fair market value of ordinary shares on the date of grant.

Both stock options and RSUs typically vest ratably over three years, at a rate of one-third per year.

Stock options expire on the day immediately preceding the 10th anniversary of the grant date (unless employment terminates sooner).

A balanced mix of stock options and RSUs represent 37% of the CEO’s target total direct compensation and 27%, on average, for the other NEOs.


44



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


BASE SALARY

The table below reflects the base salary adjustments for the NEOs for the 2015 performance period. When determining base salary adjustments, each NEO is evaluated based on their position to the market for their job and on the results achieved and the behaviors demonstrated.

(dollar amounts annualized) 2014
($)
2015
($)
  Percentage
Change
(%)
M. W. Lamach 1,250,000   1,300,000 4.0%
S. K. Carter 654,000 675,000 3.2%
D. P. M. Teirlinck 655,000 685,000 4.6%
R. G. Zafari 550,000 570,000 3.6%
M. J. Avedon 555,000 575,000 3.6%
G. S. Michel 475,000 490,000 3.2%
T. D. Wyman 475,000 500,000 5.3%

ANNUAL INCENTIVES (ANNUAL INCENTIVE MATRIX OR “AIM”)

The AIM program is an annual cash incentive program designed to reward NEOs for Revenue growth, increases in OI, the delivery of strong Cash Flow and individual contributions to the Company. We believe that our AIM design provides participants with clarity as to how they can earn a cash incentive based on strong performance relative to each metric. The Committee establishes a target award for each NEO that is expressed as a percentage of base salary. Individual AIM payouts are calculated as the product of a financial performance score and an individual performance score, both of which are based on achievement relative to pre-established performance objectives adopted by the Committee. Individual AIM awards are calculated by multiplying individual AIM targets by an AIM Payout Percentage calculated as illustrated below:

    

Financial Score:
Core Financial Metrics

x

Multiplier

=

Adjusted
Financial Score
(0% to 200%)

x

Individual
Performance Score
(0% to 150%)

=

AIM Payout
Percentage
(0% to 200%)

    

1/3 Revenue
1/3 Operating Income
1/3 Cash Flow

 

Operating Margin
Percent

 

Financial Score x
Multiplier

 

Performance against
Individual Objectives

 

Adjusted Financial
Score x Individual
Performance Score


Financial Performance

AIM incentive opportunity is tied to pre-established goals for three equally-weighted performance metrics (“Core Financial Metrics”): Revenue, OI, and Cash Flow. Threshold performance for each metric must be achieved in order for any incentive to be payable for that metric. The financial AIM payout is the sum of the calculated payout percentage for each metric, adjusted by an OI margin percentage multiplier (“Multiplier”), which can range from 85% to 115%.

The Committee retains the authority to adjust the Company’s reported financial results for the impact of changes in accounting principles, extraordinary items and unusual or non-recurring gains or losses, including significant differences from the assumptions contained in the financial plan upon which the incentive targets were established. Adjustments to reported financial results are intended to better reflect an executive’s line of sight and ability to affect performance results, align award payments with decisions which support the AOP, avoid artificial inflation or deflation of awards due to unusual or non-recurring items in the applicable period and emphasize the Company’s preference for long-term and sustainable growth.

Ingersoll Rand 2016 Proxy Statement   45



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


2015 AIM financial performance goals for the NEOs are summarized in the following table:

Pre-Established Financial Targets ($ million) *
Revenue OI   Cash Flow   Payout as %
of Target **
  OI Margin OI Margin
  Multiplier **
Enterprise            
Threshold $12,929.0   $1,423.7 $780.0 30% 11.01% 85%
Target $13,609.5 $1,581.9 $975.0 100% 11.62% 100%
Maximum $14,290.0 $1,740.1 $1,170.0 200% 12.18% 115%
Climate Segment
Threshold $9,727.1 $1,181.0 $1,147.0 30% 12.14% 85%
Target $10,239.1 $1,312.2 $1,433.8 100% 12.82% 100%
Maximum $10,751.1 $1,443.4 $1,720.6 200% 13.43% 115%
Industrial Segment            
Threshold $3,287.4 $442.7 $394.9 30% 13.47% 85%
Target $3,460.4 $491.9 $493.5 100% 14.22% 100%
Maximum $3,633.4 $541.1 $592.3 200% 14.89% 115%

* Reflects the financial goals for the Enterprise and segments to which incentive opportunity for our 2015 NEOs was tied.
     
** Results are interpolated between performance levels.

For 2015 AIM purposes, Mr. Lamach, Ms. Carter, and Ms. Avedon were measured on the basis of the Enterprise financial metrics. Messrs. Teirlinck and Zafari were measured based on a combination of Enterprise financial objectives (50% weighting) and their respective 2015 Segment financial objectives (50% weighting). We believe this weighting appropriately focuses segment leaders on achieving the pre-established objectives for their business as well as aligning their interests with Enterprise goals to help deliver sustainable shareholder value. Mr. Michel was measured on a combination of Enterprise, Segment and Residential HVAC business unit objectives. Mr. Wyman was measured on the basis of the Enterprise financial metrics for the full year as he did not transition to the Compression Technologies and Services business until the fourth quarter.

The table below summarizes 2015 performance relative to performance targets and corresponding 2015 AIM payout levels.

(in millions) Financial Targets     Adjusted Financial
Performance
    Payout as a
% of Target
Aggregate
    Payout as % of
Target
    OI Margin
Multiplier
AIM Financial
    Score for 2015
Enterprise            
Revenue $13,609.5 $13,600.4 99% 100.67% 91.89% 92.51%
OI $1,581.9 $1,534.9 79%
Cash Flow $975.0 $1,021.3 124%
OI Margin 11.62% 11.29% N/A
Climate Segment            
Revenue $10,239.1 $10,429.3 137% 124.97% 102.70% 128.34%
OI $1,312.2 $1,348.5 128%
Cash Flow $1,433.8 $1,462.7 110%
OI Margin 12.82% 12.93% N/A
Industrial Segment            
Revenue $3,460.4 $3,076.4 0% 0% 85.00% 0.00%
OI $491.9 $388.5 0%
Cash Flow $493.5 $372.7 0%
OI Margin 14.22% 12.63% N/A

46



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


Individual Performance

Individual objectives are established annually and include strategic initiatives as well as financial and non-financial metrics. Each NEO is evaluated based upon actual results against established measures and our core competencies. At the end of the fiscal year the CEO evaluates each NEO’s overall performance against individual objectives and submits a recommendation to the Committee. The Committee evaluates the CEO’s performance against individual objectives. Based on its evaluation of the CEO and the CEO’s recommendation for other NEOs, the Committee determines the individual performance score for each NEO, which can range from 0% to 150%.

In determining the individual factor for each NEO’s AIM award, the Committee considered pre-established individual performance objectives, including the following:

Successful achievement of milestones to further implement operational excellence, the business operating system and sustainability initiatives.
 

Execution of key growth initiatives including product growth team initiatives, enterprise sales excellence initiatives and innovation programs.
 

Successful integration of strategic acquisitions.
 

Accomplishments to further implement the information technology strategy and system launches.
 

Improvements in employee engagement, talent development and retention.
 


Determination of Payout

The actual AIM payout is determined by multiplying the NEO’s target award by the financial performance score and multiplying that result by the individual performance score. AIM payouts cannot exceed 200% of the target award. If the overall AIM payout score is less than 30%, no award is payable. In that event, the CEO and the Committee may establish a discretionary pool (equal to 30% of the target payout levels) for top performers and/or other deserving employees in an amount determined to be appropriate based on their performance against objectives.

2015 AIM Revenue, Operating Income and Cash Flow performance goals were set based on 2015 financial plans using foreign currency exchange rates in effect at the time that the plans were established. There was significant strengthening of the U.S dollar in 2015 to a degree meaningfully outside of historical norms. To offset the impact of this unforeseen foreign currency exchange rate movement during the year, the Committee adjusted 2015 performance results to reflect exchange rates used in setting 2015 performance goals. This resulted in increased Revenue, Operating Income and Cash Flow for purposes of determining AIM payout levels.

In addition, the Committee approved adjustments to 2015 performance results for AIM purposes at the enterprise and segment levels to (a) offset the impact of the terms of a settlement agreement with the U.S. Internal Revenue Service to resolve all disputes related to certain intercompany debt positions in place during the tax years 2002 to 2011, (b) exclude the performance contributions from FRIGOBLOCK, and (c) offset the impact of government restrictions limiting business opportunity in Venezuela. These events had not been contemplated when the 2015 performance goals were determined. All of the above adjustments were also reviewed with the Audit Committee prior to approval by the Compensation Committee.

The Committee approved the following AIM awards for NEOs based on achieving both the 2015 financial and individual objectives:

Name AIM Target      AIM Financial Score for 2015      Individual Performance Score AIM Award for 2015
M. W. Lamach 160% of $1,300,000 92.51% 105% $2,020,000
S. K. Carter 100% of $675,000 92.51% 110% $686,887
D. P. M. Teirlinck 90% of $685,000 110.43% 100% $680,801
R. G. Zafari 85% of $570,000 46.26% 95% $212,923
M. J. Avedon 85% of $575,000 92.51% 110% $497,357
G. S. Michel 80% of $490,000 108.84% 105% $447,985
T. D. Wyman 75% of $500,000 92.51% 100% $346,913

Ingersoll Rand 2016 Proxy Statement   47



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


LONG-TERM INCENTIVE PROGRAM (“LTI”)

Our long-term incentive program is comprised of PSUs, stock options and RSUs. It is designed to further align the executives’ interests with the interests of our shareholders. This approach enables us to develop and implement long-term strategies that we believe are in the best interest of shareholders.

Performance Share Program (“PSP”)

Our PSP is an equity-based incentive compensation program that provides our NEOs and other key executives with an opportunity to earn PSUs based on the Company’s performance relative to other companies in the S&P 500 Industrials Index. PSUs are earned over a 3-year performance period based equally on our relative EPS growth (from continuing operations) and TSR as compared to the companies within the S&P 500 Industrials Index. The actual number of PSUs earned for grants made in 2015 (which can range from 0% to 200% of target) is based on the following thresholds:

Ingersoll Rand’s Performance Relative to the Companies
within the S&P 500 Industrials Index
2015 – 2017 Measurement Period
% of Target PSUs Earned *
< 25th Percentile 0%
25th Percentile 25%
50th Percentile 100%
≥ 75th Percentile 200%

* Results are interpolated between percentiles achieved.

The NEOs’ PSP target awards, expressed as a dollar amount, are set by assessing competitive market values for executives in our peer group with similar roles and responsibilities. The dollar target is converted to share equivalent PSUs based on the fair market value of the Company’s shares on the date that the award is granted. Our Committee retains the authority and discretion to make downward adjustments to the calculated PSP award payouts or not to grant any award payout regardless of actual performance. EPS is calculated in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”), subject to adjustments for unusual or infrequent items; the impact of any change in accounting principles; goodwill and other intangible asset impairments; and gains or charges associated with discontinued operations or with obtaining or losing control of a business. As a result, expense for outstanding PSP awards is recorded using fixed accounting.

EPS growth is measured as the average of the annual EPS growth in each of the three years of the performance cycle.
 

TSR is measured as the total stock price appreciation and dividends earned during the three years of the performance cycle. To account for stock price volatility, a 30-day average stock price at the beginning and ending periods is used.


Dividend equivalents are accrued on outstanding PSU awards at the same time and at the same rate as dividends paid to shareholders. Dividend equivalents are only paid upon vesting on the number of PSUs actually earned and vested. Dividend equivalents are payable in cash at the time the associated PSUs are distributed unless the NEO elected to defer the PSUs into our executive deferred compensation plan, in which case the dividends are also deferred.

Stock Options/Restricted Stock Units

We grant our NEOs an equal mix of stock options and RSUs. Our Committee believes that this mix provides an effective balance between risk and retention for our NEOs and conserves share usage under our incentive stock plan. Stock options are considered “at risk” since there is no value unless the stock price appreciates during the term of the option period. RSUs, on the other hand, provide strong retentive value because they have value even if our stock price does not grow during the restricted period. Our Committee annually reviews our equity mix and grant policies to ensure they are aligned with our pay for performance philosophy, our executive compensation objectives and the interests of our shareholders.

Stock option and RSU targets are expressed in dollars. The dollar target is converted to a number of shares based on the fair market value of the Company’s shares on the date that the award is granted.

Both stock options and RSUs generally vest ratably, one third per year, over a three year period following the grant. Dividend equivalents are accrued on outstanding RSU awards at the same time and at the same rate as dividends are paid to shareholders. Dividend equivalents on RSUs are only payable if the underlying RSU award vests. At the time of vesting, one ordinary share is issued for each RSU and any accrued dividend equivalents are paid in cash.

48



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


2015 EQUITY AWARDS

In 2015, the Committee approved the PSU, stock option and RSU awards based on its evaluation of market competitiveness and each NEO’s demonstrated potential to drive future business results and sustained individual performance. The values in the table below reflect equity-based awards approved by the Committee. These values differ from the corresponding values reported in the Summary Compensation Table and the Grants of Plan-Based Awards Table due to different methodologies used in assigning the economic value of equity-based awards required for accounting and proxy statement reporting purposes. The Committee makes its determination based on expected grant date value while the accounting and proxy statement values are determined as of the grant date in accordance with U. S. GAAP requirements. The difference is most significant for the PSU awards which are earned, in part, based on TSR relative to the S&P 500 Industrials Index over a three-year performance period. The accounting and proxy report values are greater because they take into account the expected payout distribution from 0-200% of target.

Name Target Value 2015-17
PSU Award
($)
Stock Option
Award
($)
RSU Award
($)
M. W. Lamach 4,625,000 2,312,500 2,312,500
S. K. Carter 975,000 487,500 487,500
D. P. M. Teirlinck 875,000 437,500 437,500
R. G. Zafari 625,000 312,500 312,500
M. J. Avedon 600,000 300,000 300,000
G. S. Michel 400,000 200,000 200,000
T. D. Wyman 400,000 220,000 220,000

Mr. Wyman became the Senior Vice President of Compression Technologies and Services business in October 2015. In conjunction with this change, Mr. Wyman was granted a special performance-based stock option award as an incentive to drive profitability improvements in the Compression Technologies and Services business. This one-time award is described in more detail in the Grants of Plan-based Awards table. Unless the performance criteria associated with this award are met within the performance period, the award will not vest.

2013 – 2015 PERFORMANCE SHARE UNITS PAYOUT

As discussed above, PSUs for the three-year 2013 - 2015 performance period were earned based on the Company’s EPS growth (from continuing operations) and TSR performance relative to all of the companies in the S&P 500 Industrials Index.

EPS growth is measured as the average of the annual EPS growth in each of the three years of the performance cycle. The rate of EPS growth was 12.89% for the 2013 to 2015 period, which ranked at the 76th percentile of the companies in the S&P 500 Industrials Index. 2013 EPS growth was calculated including earnings from the residential and commercial security business spun-off to form Allegion. 2014 EPS growth was calculated based on 2013 EPS excluding the residential and commercial security business spun-off to form Allegion.
 

TSR is measured as the total stock price appreciation and dividends earned during the three years of the performance cycle. To account for stock price volatility, a 30-day average stock price at the beginning and ending periods is used. TSR was 52.48% for the 2013 to 2015 period, which ranked at the 53rd percentile of the companies in the S&P 500 Industrials Index. The TSR calculation includes $14.63 for the 2013 Allegion share dividend associated with the spin-off of the residential and commercial security business.


PSUs for the 2013 to 2015 performance cycle paid out at 157% of target levels as summarized in the table below.

Performance Metric Ingersoll Rand
Performance
     Percentile
Rank
Metric
  Payout
  Weighting   Payout
Level
Relative EPS Growth 12.89% 76th 200% 50% 100%
Relative TSR 52.48% 53rd 114% 50% 57%
  Total Award Payout Percentage: 157%

Ingersoll Rand 2016 Proxy Statement   49



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


2016 COMPENSATION DECISIONS

The Committee annually reviews the total direct compensation for each NEO and, using its discretion based on its compensation philosophy and design principles, may revise such compensation. For 2016, the Committee has set the base salary and target AIM award for each NEO as follows:

Name   Base Salary
($)
  Change From 2015   Target AIM Award
M. W. Lamach 1,300,000 0.0% 160%
S. K. Carter 695,000 3.0% 100%
D. P. M. Teirlinck 700,000 2.2% 95%
R. G. Zafari 570,000 0.0% 85%
M. J. Avedon 600,000 4.3% 85%
G. S. Michel 505,000 3.1% 80%
T. D. Wyman 500,000 0.0% 75%

The Committee established the following target long-term incentives including PSU awards for the 2016 - 2018 performance period and granted the following stock option and RSU awards for each NEO in 2016:

Name Target 2016
Long-Term
  Incentive Value
($) (1)
  Shares Underlying
Stock Option
Awards
(#) (2)
  RSU Shares
(#) (3)
  Target 2016-18
PSU Shares
(#) (3)
M. W. Lamach 9,500,000 242,347 47,498 94,996
S. K. Carter 2,000,000 51,021 10,000 20,000
D. P. M. Teirlinck 1,850,000 47,194 9,250 18,500
R. G. Zafari 1,300,000 33,164 6,500 13,000
M. J. Avedon 1,200,000 30,613 6,000 12,000
G. S. Michel 800,000 20,409 4,000 8,000
T. D. Wyman 800,000 20,409 4,000 8,000

(1) The target long-term incentive value is delivered 25% in stock options, 25% in RSUs and 50% in PSUs.
   
(2) The number of stock options was determined based on the Black-Scholes ratio on December 31, 2015 and the fair market value of our ordinary shares on the date of grant.
   
(3) The number of RSUs and target PSUs were determined using the fair market value of our ordinary shares on the date of grant.

VI. OTHER COMPENSATION AND TAX MATTERS

RETIREMENT PROGRAMS AND OTHER BENEFITS

We maintain qualified and nonqualified defined benefit pension plans for our employees, including the NEOs, to provide for fixed benefits upon retirement based on the individual’s age and number of years of service. These plans include the Pension Plan, the Supplemental Pension Plans and our supplemental executive retirement plans (the Executive Officer Supplemental Pension (“EOSP”) or the KMP). Refer to the Pension Benefits table and accompanying narrative for additional details on these programs.

We offer a qualified defined contribution (401(k)) plan called the Ingersoll-Rand Company Employee Savings Plan (the “ESP”) to our salaried non-union and hourly U.S. workforce, including the NEOs. The ESP is a plan that provides a dollar-for-dollar Company match on the first six percent of the employee’s eligible compensation that the employee contributes to the ESP. The ESP has a number of investment options and is an important component of our retirement program.

We also have a nonqualified defined contribution plan. The Ingersoll-Rand Company Supplemental Employee Savings Plan (the “Supplemental ESP”) is an unfunded plan that makes up matching contributions that cannot be made to the ESP due to Internal Revenue Code limitations. The Supplemental ESP is deemed to be invested in the funds selected by the NEOs, which are the same funds available in the ESP except for a self-directed brokerage account, which is not available in the Supplemental ESP.

50



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


In June 2012, our Board of Directors approved significant changes to our broad-based, qualified retirement programs with the intent to move employees from a combined defined benefit/defined contribution approach to a fully defined contribution plan approach over time. Employees active prior to July 1, 2012 were given a choice between continuing to participate in the defined benefit plan until December 31, 2022, or moving to an enhanced version of the ESP effective January 1, 2013. Employees hired or rehired on or after July 1, 2012 were automatically covered under the enhanced version of the ESP. Under the enhanced version of the ESP, employees will receive a basic employer contribution equal to two percent of eligible compensation in addition to the Company’s matching contribution while ceasing to accrue benefits under the defined benefit plan (employees of our Club Car business are generally not eligible for the basic employer contribution). Effective as of December 31, 2022, accruals in the defined benefit plan will cease for all employees. The Committee approved corresponding changes to the applicable nonqualified defined benefit and contribution pension plans. Additional details on the changes can be found in the narrative accompanying the Pension Benefits table.

Our Ingersoll Rand Executive Deferred Compensation Plan (the “EDCP Plan I”) and the Ingersoll Rand Executive Deferred Compensation Plan II (the “EDCP Plan II” and, together with the EDCP Plan I, the “EDCP Plans”) allow eligible employees to defer receipt of a part of their annual salary, AIM award and/or PSP award in exchange for investments in ordinary shares or mutual fund investment equivalents. Refer to the Nonqualified Deferred Compensation table for additional details on the EDCP Plans.

We provide an enhanced, long-term disability plan to certain executives. The plan provides for a higher monthly maximum benefit than provided under the standard group plan and a more favorable definition of disability. It has an underlying individual policy that is portable when the executive terminates.

In light of the American Jobs Creation Act of 2004 governing Section 409A of the Code, “mirror plans” for several of our nonqualified plans, including the Ingersoll-Rand Company Supplemental Pension Plan (“Supplemental Pension Plan I”) and the EDCP I, were created. The mirror plans are the Ingersoll-Rand Company Supplemental Pension Plan II (“Supplemental Pension Plan II” and, together with the Supplemental Pension Plan I, the “Supplemental Pension Plans”) and the EDCP II. The purpose of these mirror plans is not to provide additional benefits to participants, but merely to preserve the tax treatment of the plans that were in place prior to December 31, 2004. In the case of the Supplemental Plans, the mirror plan benefits are calculated by subtracting the original benefit value to avoid duplication of the benefit. For the EDCP Plans, balances accrued through December 31, 2004 are maintained separately from balances accrued after that date.

We provide our NEOs with other benefits that we believe are consistent with prevailing market practice and those of our peer companies. These other benefits and their incremental cost to the Company are reported in “All Other Compensation” shown in the Summary Compensation Table.

SEVERANCE ARRANGEMENTS

In connection with external recruiting of certain officers, we generally enter into employment arrangements that provide for severance payments upon certain termination events, other than in the event of a change in control (which is covered by separate agreements with the officers). Mr. Lamach, Ms. Carter, Ms. Avedon and Mr. Wyman have such arrangements. In 2012, we adopted a Severance Plan, amended outstanding award agreements and adopted new equity award agreements to provide certain employees, including our NEOs, with certain benefits in the event of a termination of employment without cause or for good reason under a Major Restructuring (as defined in the Post-Employment Section below). In addition, although we do not have a formal severance policy for our executives (other than in the event of a Major Restructuring), we do have guidelines that in most cases would provide for severance in the event of termination without cause. The severance payable under employment agreements for Mr. Lamach, Ms. Carter and Ms. Avedon and the benefits available in connection with a Major Restructuring and under the severance guidelines are further described in the Post-Employment Benefits section of the proxy statement.

CHANGE-IN-CONTROL PROVISIONS

We have entered into change-in-control agreements with our NEOs. Payments are subject to a double trigger, meaning that payments would be received only if an officer is terminated without cause or resigns for “good reason” within two years following a change in control. We provide change-in-control agreements to our NEOs to focus them on the best interests of shareholders and assure continuity of management in circumstances that reduce or eliminate job security and might otherwise lead to accelerated departures. Our incentive stock plans provide for the accelerated vesting of outstanding stock awards in the event of a change in control of the Company. Refer to the Post-Employment Benefits section of this proxy statement for a more detailed description of the change-in-control provisions.

Ingersoll Rand 2016 Proxy Statement   51



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


TAX AND ACCOUNTING CONSIDERATIONS

Section 162(m) of the Code imposes a limit of $1,000,000 on the amount that we may deduct for federal income tax purposes in any one year for compensation paid to our CEO and any of our three other highest-paid NEOs, other than our CFO, who are employed as of the end of the year. However, to the extent compensation is “performance-based” within the meaning of Section 162(m), the Section’s limitations will not apply. We intend most of the variable compensation (i.e., AIM, PSP and stock options) paid to NEOs to qualify as performance-based within the meaning of Section 162(m) so as to be tax deductible by us, which benefits our shareholders. In order to qualify as performance based, the compensation must, among other things, be paid pursuant to a shareholder approved plan upon the attainment of objective performance criteria. Our Committee believes that tax deductibility of compensation is an important factor, but not the sole factor, in setting executive compensation policies and in rewarding superior executive performance. Accordingly, although our Committee generally intends to avoid the loss of a tax deduction due to Section 162(m), it reserves the right, in appropriate circumstances, to pay amounts that are not deductible. In determining variable compensation programs, we consider other tax and accounting implications of particular forms of compensation, such as the implications of Section 409A of the Code governing deferred compensation arrangements and favorable accounting treatment afforded certain equity based plans that are settled in shares. However, the forms of variable compensation we utilize are determined primarily by their effectiveness in creating maximum alignment with our key strategic objectives and the interests of our shareholders.

SENIOR EXECUTIVE PERFORMANCE PLAN (“SEPP”)

The SEPP is a shareholder approved plan that funds the annual cash incentive awards that may be granted to each of the NEOs. Under the SEPP, the maximum amount of cash incentive that can be paid to the CEO is 0.6% of Consolidated OI from Continuing Operations (as defined in the SEPP) and the maximum amount of cash incentive that can be paid to any other covered executive is 0.3% of Consolidated OI from Continuing Operations. Our Committee generally exercises its discretion to pay less than the maximum amount to the NEOs, after considering the factors described in the AIM Program.

TIMING OF AWARDS

The Committee generally grants our regular annual equity awards after the annual earnings release. The grant date is never selected or changed to increase the value of equity awards for executives.

CLAW-BACK/RECOUPMENT POLICY

To further align the interests of our employees and our shareholders, we have a claw-back/recoupment policy to ensure that any fraud or intentional misconduct leading to a restatement of our financial statements would be properly addressed. The policy provides that if it is found that an employee committed fraud or engaged in intentional misconduct that resulted, directly or indirectly, in a need to restate our financial statements, then our Committee has the discretion to direct the Company to recover all or a portion of any cash or equity incentive compensation paid or value realized, and/or to cancel any stock-based awards or AIM award granted to an employee on or after the effective date of the policy. Our Committee may also request that the Company seek to recover any gains realized on or after the effective date of the policy for equity or cash awards made prior to that date (including AIM, stock options, PSUs and RSUs). Application of the claw-back/recoupment policy is subject to a determination by our Committee that: (i) the cash incentive or equity compensation to be recouped was calculated on, or its realized value affected by, the financial results that were subsequently restated; (ii) the cash incentive or equity award would have been less valuable than what was actually awarded or paid based on the application of the correct financial results; and (iii) the employee to whom the policy applied engaged in fraud or intentional misconduct. This policy will be revised if required under the Dodd-Frank Act once the regulations implementing the claw-back policy requirements of that law have been issued.

52



Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS


SHARE-OWNERSHIP GUIDELINES

We impose share ownership requirements on each of our officers. These share ownership requirements are designed to emphasize share ownership by our officers and to further align their interests with our shareholders. Each officer must achieve and maintain ownership of ordinary shares or ordinary share equivalents at or above a prescribed level. The requirements are as follows:

Position Number of Active
Participants as of
the Record Date
       
Individual Ownership
Requirement (Shares
and Equivalents)
Chief Executive Officer 1 150,000
Executive Vice Presidents 2 75,000
Senior Vice Presidents 6 40,000
Corporate Vice Presidents 8 15,000

Based on the closing stock price on the record date of $60.35, this equates to an ownership requirement of approximately 7x for the CEO and the Executive Vice Presidents, and in excess of 4x for the Senior Vice Presidents. These ownership requirements have been achieved with actual ownership exceeding these levels: the CEO at over 13x base salary, the Executive Vice Presidents at over 8x base salary on average, and the Senior Vice Presidents at over 6x base salary on average.

Our share-ownership program requires the accumulation of ordinary shares (or ordinary share equivalents) over a five-year period following the date the person becomes subject to share-ownership requirements at the rate of 20% of the required level each year. Executives who are promoted, and who have their ownership requirement increased, have three years to achieve the new level from the date of promotion. However, given the significant increase in the ownership requirement for an individual who is promoted to CEO, that individual has five years from the date of the promotion to achieve the new level. Ownership credit is given for actual ordinary shares owned, deferred compensation that is invested in ordinary shares within our EDCP Plans, ordinary share equivalents accumulated in our qualified and nonqualified employee savings plans as well as unvested RSUs. Stock options, SARs and unvested PSUs do not count toward meeting the share-ownership target. If executives fall behind their scheduled accumulation level during their applicable accumulation period, or if they fail to maintain their required level of ownership after their applicable accumulation period, their right to exercise stock options will be limited to “buy and hold” transactions and any shares received upon the vesting of RSU and PSU awards must be held until the required ownership level is achieved. As of the Record Date, all of our executives subject to the share-ownership guidelines were in compliance with these requirements.

COMPENSATION COMMITTEE REPORT

We have reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on our review and discussion, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement as well as the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

COMPENSATION COMMITTEE
Tony L. White (Chair)
John Bruton
Elaine L. Chao
Jared L. Cohon
Gary D. Forsee
Constance J. Horner

Ingersoll Rand 2016 Proxy Statement   53



Table of Contents

SUMMARY OF REALIZED COMPENSATION

The table below is a summary of the compensation actually realized by our CEO for 2015, 2014 and 2013. This information is intended as a supplement to and not as a substitute for the information shown on the Summary Compensation Table. The information required to be shown on the Summary Compensation Table includes elements of compensation that may or may not actually be realized by the NEOs at a future date. We believe this table enhances our shareholders’ understanding of our CEO’s compensation.

Year Salary
($)
      Performance-based
Cash Compensation
($) (1)
      Equity
Compensation
($) (2)
Other
Compensation
($) (3)
      Total Realized
Compensation
($)
2015 $1,287,500 $2,048,200 $23,865,069       $377,312 $27,578,081
2014 $1,250,000 $2,650,000 $15,106,336 $394,328 $19,400,664
2013 $1,237,500 $1,821,270 $19,720,521 $319,785 $23,099,076

(1) Represents the AIM award paid in the applicable year and earned in the immediately previous year.
 
(2) Represents amount realized upon the exercise of stock options and the vesting of RSUs and PSUs, before payment of applicable withholding taxes and brokerage commissions, and includes the value of dividend equivalents paid on such awards. For 2015, this includes the following amounts from stock options exercised, RSUs vesting and PSUs earned:

Value Realized       Total Shareholder Return (“TSR”)
Over the Period Outstanding *
Stock Options Exercised:
June 6, 2008 Grant $2,835,840 TSR for 2008 - 2015 was 71%
February 16, 2010 Grant $1,889,750 TSR for 2010 - 2015 was 111%
Total: $4,725,590
Restricted Stock Unit Vesting:
February 24, 2012 Grant $1,268,100 TSR for 2012 - 2015 was 143%
February 22, 2013 Grant $1,188,507 TSR for 2013 - 2015 was 52%
February 25, 2014 Grant $878,564 TSR for 2014 - 2015 was -7%
Total: $3,335,170
Performance Stock Units Earned:
2012-2014 Performance Period $15,238,181 TSR for 2012 - 2014 was 173%

* TSR calculated using closing stock price at the beginning and end of each period.
 
(3) Represents the amounts imputed as income under applicable IRS rules and regulations.

54



Table of Contents

EXECUTIVE COMPENSATION

The following table provides summary information concerning compensation paid by the Company or accrued on behalf of our NEOs for services rendered during the years ended December 31, 2015, 2014 and 2013.

SUMMARY COMPENSATION TABLE

Name and
Principal
Position
Year Salary
($)
(a)
Bonus
($) (b)
Stock
Awards
($) (c)
Option
Awards
($) (d)
Non-
Equity
Incentive
Plan
Compensation
($) (e)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) (f)
All
Other
 Compensation
($) (g)
    Total
($)
M. W. Lamach
Chairman and Chief
Executive Officer
2015 1,287,500 7,860,622 2,241,176 2,020,000 3,390,703 481,598 17,281,599
2014 1,250,000     7,493,591     2,096,815     2,048,200     6,026,605     502,295 19,417,506
   2013     1,237,500     250,000 7,176,489 2,265,976 2,650,000 917,847 490,026 14,987,838
S. K. Carter
Senior Vice President and
Chief Financial Officer
2015 669,750 1,657,199 472,474 686,887 270,747 143,413 3,900,470
2014 649,250 1,539,248 430,701 669,761 168,481 139,335 3,596,776
2013 163,790 960,000 2,302,436 65,408 218,050 29,347 364,657 4,103,688
D. P. M. Teirlinck
Executive Vice President,
Climate Segment
2015 677,500 1,487,163 424,016 680,801 1,132,731 135,778 4,537,989
2014 655,000 1,336,792 374,026 787,041 1,159,571 150,536 4,462,966
2013 604,167 1,939,504 362,505 855,547 356,770 186,124 4,304,617
R. G. Zafari
Executive Vice President,
Industrial Segment
2015 565,000 1,062,301 302,865 212,923 609,249 95,904 2,848,242
2014 550,000 972,208 272,024 384,005 815,343 94,916 3,088,496
2013 492,250 1,652,530 284,102 397,354 392,678 88,626 3,307,540
M. J. Avedon
Senior Vice President, Human
Resources, Communications and
Corporate Affairs
2015 570,000 1,019,759 290,761 497,357 633,107 100,193 3,111,177
2014 548,250 891,174 249,361 483,119 985,227 114,066 3,271,197
2013 523,500 100,000 902,256 275,006 615,125 46,862 87,814 2,550,563
G. S. Michel
SVP, HVAC Residential
2015 486,250 679,915 193,845 447,985 409,619 790,928 3,008,542
2014 470,375 648,201 181,354 465,832 1,636,472 363,267 3,765,501
2013 453,125 1,656,333 204,868 592,720 94,442 76,132 3,077,620
T. D. Wyman
SVP, Compression
Technology and Services
2015 493,750 699,898 1,182,119 346,913 355,028 82,053 3,159,761

(a) Pursuant to the EDCP Plans, a portion of a participant’s annual salary may be deferred into a number of investment options. In 2015, there were no salary deferrals by any NEO into the EDCP Plans.
 
(b) The amounts in this column for 2013 reflect completion recognition bonuses that were awarded in December 2013 to certain individuals, including Mr. Lamach and Ms. Avedon, whose contributions were critical to the successful completion of the spin-off of the Company’s commercial and residential securities business. Ms. Carter, as part of her employment offer, received a cash payment of $960,000 in 2013 in consideration of the bonus and performance share plan payments forfeited at her prior employer. In the event Ms. Carter had voluntarily left the company within two years of her hire date, she would have had to repay this amount to the Company.

Ingersoll Rand 2016 Proxy Statement   55



Table of Contents

EXECUTIVE COMPENSATION

(c) The amounts in this column reflect the aggregate grant date fair value of PSU awards and any RSU awards granted for the year under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 and do not reflect amounts paid to or realized by the NEOs. For a discussion of the assumptions made in determining the ASC 718 values see Note 12, “Share-Based Compensation,” to the Company’s consolidated financial statements contained in its 2015 Form 10-K. The ASC grant date fair value of the PSU award is spread over the number of months of service required for the grant to become non-forfeitable, disregarding any adjustments for potential forfeitures. In determining the aggregate grant date fair value of the PSU awards, the awards are valued assuming target level performance achievement. If the maximum level performance achievement is assumed, the aggregate grant date fair value of the PSU awards would be as follows:
   
Name Maximum Grant Date Value of
2015-17 PSU Awards
($)
M. W. Lamach 11,096,192
S. K. Carter 2,339,283
    D. P. M. Teirlinck 2,099,258
R. G. Zafari 1,499,516
M. J. Avedon 1,439,510
G. S. Michel 959,780
T. D. Wyman 959,780

Amounts in 2013 for Messrs. Teirlinck and Zafari include $814,968 from special RSU awards granted to them on December 6, 2013 in connection with the reorganization of the company and their respective promotions.
 
(d) The amounts in this column reflect the aggregate grant date fair value of stock option grants for financial reporting purposes for the year under ASC 718 and do not reflect amounts paid to or realized by the NEOs. For a discussion of the assumptions made in determining the ASC 718 values see Note 12, “Share-Based Compensation,” to the Company’s consolidated financial statements contained in its 2015 Form 10-K. Please see “2015 Grants of Plan-Based Awards” and “Outstanding Equity Awards at December 31, 2015” for additional detail.
 
(e) This column reflects the amounts earned as annual awards under the AIM program. Unless deferred into the EDCP Plans, AIM program payments are made in cash. In 2015, Mr. Zafari was the only NEO who elected to defer a percentage (15%) of his AIM award into the EDCP Plans.Amounts shown in this column are not reduced to reflect deferrals of AIM awards into the EDCP Plans. Ms. Carter's 2013 AIM award was prorated to reflect her September 27, 2013 employment date.
 
(f) Amounts reported in this column reflect the aggregate increase in the actuarial present value of the benefits under the qualified Ingersoll Rand Pension Plan Number One (the “Pension Plan”), Supplemental Pension Plans, Ingersoll-Rand Company Key Management Supplemental Program (the “KMP”) and EOSP, as applicable. The change in pension benefits value is attributable to the additional year of service and age, the annual AIM award and any annual salary increase. Amounts are higher for those NEOs who are older and closer to retirement than for those who are younger and further from retirement since the period over which the benefit is discounted to determine its present value for an older NEO is shorter and the impact of discounting is therefore reduced.
 
Other external factors, outside the influence of the plan design, also impact the values shown in this column. For all the NEOs, the amounts in this column for 2014 and 2015 were impacted by decreasing interest rates (rates for ten-year Constant Maturities for US Treasury Securities), which cause the value of the lump sum distributions under the EOSP and the KMP to increase and in 2013 by increasing interest rates which cause the value of the lump sum distributions under the EOSP and the KMP to decrease. The 2014 change in value attributable to the change in interest rates is as follows for each of the NEOs: Lamach ($1,887,297), Carter ($15,034), Teirlinck ($121,415), Zafari ($193,966), Avedon ($259,400) and Michel ($490,648). In addition, 2014 amounts for all NEOs were impacted by a change to the applicable mortality table as defined by the Internal Revenue Code that is used to estimate life expectancy. The change in value for each of the NEOs attributable to Changes in the applicable mortality table is as follows: Lamach ($1,357,339), Carter ($14,682), Teirlinck ($242,397), Zafari ($259,258), Avedon ($213,190) and Michel ($349,491).
 
There was no above market interest earned by the NEOs in any year.
 
(g) The following table summarizes the components of this column for fiscal year 2015:

     Name Company
Contributions
($) (1)
Company
Cost for
Life
Insurance
($)
    Company Cost
for Long Term
Disability
($)
    Tax Assistance
($) (2)
    Other Benefits
($) (3)
    Retiree Medical
(S) (4)
Total
($)
M. W. Lamach     200,142     3,312 1,285 93,980 182,879     481,598
S. K. Carter 107,161 3,117 2,262 30,873 143,413
  D. P. M. Teirlinck 87,872 3,122 2,528 312 41,944 135,778
R. G. Zafari 56,940 2,580 2,029 78 34,277 95,904
M. J. Avedon 63,187 1,394 1,824 33,788 100,193
G. S. Michel 57,125 1,173 2,077 14,751 714,002 1,800 790,928
T. D. Wyman 51,515 765 1,437 28,336 82,053

(1) Represents Company contributions under the Company’s ESP and Supplemental ESP plans.

56



Table of Contents

EXECUTIVE COMPENSATION


(2) The amount for Mr. Lamach represents tax equalization payments related to Irish taxes owed on $315,000, which is the portion of his income that is allocated to his role as a director of the Company. Without these payments, Mr. Lamach would be subject to double taxation on this amount since he is already paying U.S. taxes on this income. The amount for (i) Mr. Michel represents payments made on his behalf for taxes related to relocation costs and (ii) Messrs. Teirlinck and Zafari represent payments of taxes on their behalf related to Company contributions made to the Belgium social scheme.
 
(3) For Mr. Lamach, this amount includes the incremental cost to the Company of personal use of the Company aircraft (whether leased or owned) by the CEO. For security and safety reasons and to maximize his availability for Company business, the Board of Directors requires the CEO to travel on Company-provided aircraft for business and personal purposes, unless commercial travel is deemed a minimal security risk by the Company. The incremental cost to the Company of personal use of the aircraft is calculated: (i) by taking the hourly average variable operating costs to the Company (including fuel, maintenance, on board catering and landing fees) multiplied by the amount of time flown for personal use in the case of leased aircraft; and (ii) by multiplying the flight time by a variable fuel charge and the average fuel price per gallon and adding any ground costs such as landing and parking fees as well as crew charges for travel expenses in the case of the Company owned aircraft. Both methodologies exclude fixed costs that do not change based on usage, such as pilots’ and other employees’ salaries, management fees and training, hangar and insurance expenses. We impose an annual limit of $150,000 on the CEO’s non-business use of Company-provided aircraft. For 2015, the amount for Mr. Lamach includes $150,000 for personal use of Company-provided aircraft. Under the Company’s aircraft use policy, the Compensation Committee has determined that business use includes travel that is related to the Company’s business or benefits the Company, such as travel to meetings of other boards on which the CEO sits. For 2015, the amount for Mr. Lamach includes $18,982 for such business-related travel.
 
These amounts also include: (i) the following relocation costs for Mr. Michel, including closing costs and loss on home sale $682,568, (ii) the following incremental cost of the Company-leased cars, calculated based on the lease, insurance, fuel and maintenance costs to the Company (and for Mr. Zafari, it also includes the difference between the resale value and the book value for the Company car he purchased under the program): Mr. Lamach, $21,313; Ms. Carter $19,085; Mr. Teirlinck, $18,828; Mr. Zafari, $21,681; Ms. Avedon, $19,819; Mr. Michel, $14,766; and Mr. Wyman $18,633: (iii) the following costs for financial counseling services, which may include tax preparation and estate planning services: Mr. Lamach, $10,454; Ms. Carter $9,000; Mr. Teirlinck, $6,500; Mr. Zafari, $6,728; Ms. Avedon $10,454; Mr. Michel, $8,340 and Mr. Wyman, $9,000; (iv) the following costs for medical services provided through an on-site physician under the Executive Health Program: Mr. Lamach, $47; Ms. Carter, $2,788; Mr. Teirlinck, $2,376; Mr. Zafari, $2,630; Ms. Avedon $3,010; Mr. Michel, $2,078 and Mr. Wyman, $703;(v) the payments of $12,955 and $3,238 to permit Messrs. Teirlinck and Zafari to remain covered under the Belgium social scheme and have access to the country’s health plan should they return to Europe; and (vi) the following amounts for product rebates that are available to all U.S. employees: Mr. Lamach; $1,065; Mr. Teirlinck, $1,285; Ms. Avedon, $505; and Mr. Michel, $6,250.
 
(4) Represents the estimated year-over-year increase in the value of the retiree medical plan, calculated on the methods used for financial statement reporting purposes.Mr. Michel is the only NEO eligible for this benefit.

Ingersoll Rand 2016 Proxy Statement   57



Table of Contents

EXECUTIVE COMPENSATION


2015 GRANTS OF PLAN-BASED AWARDS

The following table shows all plan-based awards granted to the NEOs during fiscal 2015. This table is supplemental to the Summary Compensation Table and is intended to complement the disclosure of equity awards and grants made under non-equity incentive plans in the Summary Compensation Table.

Estimated Future Payouts
Under Non-Equity Plan Awards
Estimated Future Payouts
Under Equity Incentive Plan
Awards
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) (c)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (c)
Exercise or
Base Price
of Option
Awards
($/Sh) (d)
Grant Date Fair
Value of Stock
and Option
Awards
($) (e)
Threshold Target

Maximum
Threshold Target Maximum
Name Grant Date ($) (a) ($) (a) ($) (a) (#) (b)

(#) (b)

(#) (b)
M. W. Lamach                                 
      AIM 2/3/2015 624,000 2,080,000 4,160,000
      PSUs (2015-17) 2/3/2015 17,244 68,974 137,948 5,548,096
      Options 2/3/2015 158,499 67.055 2,241,176
      RSUs 2/3/2015 34,487 2,312,526
S. K. Carter
      AIM 2/3/2015 202,500 675,000 1,350,000
      PSUs (2015-17) 2/3/2015 3,636 14,541 29,082 1,169,642
      Options 2/3/2015 33,414 67.055 472,474
      RSUs 2/3/2015 7,271 487,557
D. P. M. Teirlinck
      AIM 2/3/2015 184,950 616,500 1,233,000
      PSUs (2015-17) 2/3/2015 3,263 13,049 26,098 1,049,629
      Options 2/3/2015 29,987 67.055 424,016
      RSUs 2/3/2015 6,525 437,534
R. G. Zafari
      AIM 2/3/2015 145,350 484,500 969,000
      PSUs (2015-17) 2/3/2015 2,331 9,321 18,642 749,758
      Options 2/3/2015 21,419 67.055 302,865
      RSUs 2/3/2015 4,661 312,543
M. J. Avedon
      AIM 2/3/2015 146,625 488,750 977,500
      PSUs (2015-17) 2/3/2015 2,237 8,948 17,896 719,755
      Options 2/3/2015 20,563 67.055 290,761
      RSUs 2/3/2015 4,474 300,004
G. S. Michel
      AIM 2/3/2015 117,600 392,000 784,000
      PSUs (2015-17) 2/3/2015 1,492 5,966 11,932 479,890
      Options 2/3/2015 13,709 67.055 193,845
      RSUs 2/3/2015 2,983 200,025

58



Table of Contents

EXECUTIVE COMPENSATION


Estimated Future Payouts
Under Non-Equity Plan Awards
Estimated Future Payouts
Under Equity Incentive Plan
Awards
   All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#) (c)
   All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#) (c)
   Exercise or
Base Price
of Option
Awards
($/Sh) (d)
   Grant Date Fair
Value of Stock
and Option
Awards
($) (e)
     Threshold    Target   

Maximum
   Threshold    Target    Maximum
Name Grant Date ($) (a) ($) (a) ($) (a) (#) (b) (#) (b) (#) (b)
T. D. Wyman
      AIM 2/3/2015 112,500 375,000 750,000
      PSUs (2015-17) 2/3/2015 1,492 5,966 11,932 479,890
      Options 2/3/2015 15,079 67.055 213,217
      Options 12/3/2015 79,745 57.635 968,902
      RSUs 2/3/2015 3,281 220,007

(a) The target award levels established for the AIM program are established annually in February and are expressed as a percentage of the NEO’s base salary. Refer to Compensation Discussion and Analysis under the heading “Annual Incentive Matrix Program” for a description of the Compensation Committee’s process for establishing AIM program target award levels. The amounts reflected in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns represent the threshold, target and maximum amounts for awards under the AIM program that were paid in February 2016, based on performance in 2015. Thus, the amounts shown in the “threshold,” “target” and “maximum” columns reflect the range of potential payouts when the target award levels were established in February 2015 for all NEOs. The AIM program pays $0 for performance below threshold. The actual amounts paid pursuant to those awards are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
 
(b) The amounts reflected in the “Estimated Future Payouts Under Equity Incentive Plan Awards” columns represent the threshold, target and maximum amounts for PSU awards. The PSP pays $0 for performance below threshold. For a description of the Compensation Committee’s process for establishing PSP target award levels and the terms of PSU awards, please refer to Compensation Discussion and Analysis under the heading “Long-Term Incentive Program” and the “Post-Employment Benefits” section below.
 
(c) The amounts in these columns reflect the stock option and RSU awards. Awards in 2015 were granted in February 2015. For a description of the Compensation Committee’s process for determining stock option and RSU awards and the terms of such awards, see Compensation Discussion and Analysis under the heading “Long-Term Incentive Program” and the “Post-Employment Benefits” section below.
 
(d) Stock options were granted under the Company’s Incentive Stock Plan of 2013 (the “2013 Plan”), which requires options to be granted at an exercise price equal to or greater than the fair market value of the Company’s ordinary shares on the date of grant. The fair market value is defined in the 2013 Plan as the average of the high and low trading price of the Company’s ordinary shares listed on the NYSE on the grant date. The closing price on the NYSE of the Company’s ordinary shares was $67.45 on the February 2015 grant date.
 
(e) Amounts in this column include the grant date fair value of the equity awards calculated in accordance with ASC 718. The Company cautions that the actual amount ultimately realized by each NEO from the stock option awards will likely vary based on a number of factors, including stock price fluctuations, differences from the valuation assumptions used and timing of exercise or applicable vesting. For a description of the assumptions made in valuing the equity awards see Note 12, “Share- Based Compensation” to the Company’s consolidated financial statements contained in its 2015 Form 10-K. For PSUs, the grant date fair value has been determined based on achievement of target level performance, which is the performance threshold the Company believes is the most likely to be achieved under the grants.

Ingersoll Rand 2016 Proxy Statement   59



Table of Contents

EXECUTIVE COMPENSATION


OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2015

  Option Awards (a) Stock Awards (a)
Name Grant Date Number of
Securities

Underlying
Unexercised
Options
(#)
Exercisable (b)
Number of
Securities

Underlying
Unexercised
Options
(#)
Unexercisable (b)
Option
Exercise

Price
($)
Option
Expiration

Date (c)
Number of
Shares or

Units of Stock
that have Not
Vested
(#) (d)
Market
Value of

Shares or
Units of
Stock that
have Not
Vested
($) (e)
Equity
Incentive

Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
have Not
Vested
(#) (f)
Equity
Incentive

Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights that
have Not
Vested
($) (g)
M. W. Lamach    2/16/2010    200,000       25.2192    2/15/2020            
2/14/2011 140,351 37.7420 2/13/2021
2/14/2011 88,083 37.7116 2/13/2021
2/24/2012 41,351 32.4643 2/23/2022
2/24/2012 103,806 32.4256 2/23/2022
2/22/2013 110,938 55,469 41.9062 2/21/2023 17,401 962,101 104,400 5,772,276
2/25/2014 48,911 97,822 59.8250 2/24/2024 25,770 1,424,823 77,309 4,274,415
2/3/2015 158,499 67.0550 2/2/2025 34,487 1,906,786 68,974 3,813,572
S. K. Carter 10/1/2013 4,016 51.9167 9/30/2023 18,577 1,027,122 13,966 772,180
2/25/2014 10,046 20,094 59.8250 2/24/2024 5,294 292,705 15,880 878,005
2/3/2015 33,414 67.0550 2/2/2025 7,271 402,014 14,541 803,972
D. P. M. Teirlinck 2/24/2012 9,733 32.4256 2/23/2022
2/22/2013 9,192 9,192 41.9062 2/21/2023 2,884 159,456 17,302 956,628
12/6/2013 13,230 731,487
2/25/2014 8,724 17,450 59.8250 2/24/2024 4,598 254,223 13,791 762,504
2/3/2015 29,987 67.0550 2/2/2025 6,525 360,767 13,049 721,479
R. G. Zafari 2/24/2012 7,210 32.4256 2/23/2022
2/22/2013 6,973 6,974 41.9062 2/21/2023 2,188 120,975 13,126 725,737
12/6/2013 13,230 731,487
2/25/2014 6,345 12,691 59.8250 2/24/2024 3,344 184,890 10,030 554,559
2/3/2015 21,419 67.0550 2/2/2025 4,661 257,707 9,321 515,358
M. J. Avedon 2/16/2010 15,815 25.2192 2/15/2020
2/14/2011 6,826 37.7116 2/13/2021
2/14/2011 10,877 37.7420 2/13/2021
2/24/2012 6,317 32.4643 2/23/2022
2/24/2012 15,860 32.4256 2/23/2022
2/22/2013 13,946 6,974 41.9062 2/21/2023 2,188 120,975 13,126 725,737
2/25/2014 5,816 11,634 59.8250 2/24/2024 3,065 169,464 9,194 508,336
2/3/2015 20,563 67.0550 2/2/2025 4,474 247,367 8,948 494,735

60



Table of Contents

EXECUTIVE COMPENSATION


Option Awards (a) Stock Awards (a)
Name Grant Date Number of
Securities

Underlying
Unexercised
Options
(#)
Exercisable (b)
Number of
Securities

Underlying
Unexercised
Options
(#)
Unexercisable (b)
Option
Exercise

Price
($)
Option
Expiration

Date (c)
Number of
Shares or

Units of Stock
that have Not
Vested
(#) (d)
Market
Value of

Shares or
Units of
Stock that
have Not
Vested
($) (e)
Equity
Incentive

Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
have Not
Vested
(#) (f)
Equity
Incentive

Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights that
have Not
Vested
($) (g)
G. S. Michel    2/14/2011    4,129       37.7116    2/13/2021            
2/14/2011 6,579 37.7420 2/13/2021
2/24/2012 4,020 32.4643 2/23/2022
2/24/2012 10,092 32.4256 2/23/2022
2/22/2013 10,143 5,072 41.9062 2/21/2023 1,592 88,022 9,546 527,798
12/6/2013 5,880 325,105