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

SCHEDULE 14A

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

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Definitive Proxy Statement

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Soliciting Material under §240.14a-12

 

LOGO
Pentair plc

(Name of Registrant as Specified In Its Charter)

 

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LETTER TO SHAREHOLDERS

GRAPHIC
David A. Jones
Pentair Chairman of the Board

GRAPHIC

John L. Stauch
Pentair President and Chief Executive Officer

  You are cordially invited to attend the Annual General Meeting of Shareholders of Pentair plc on Tuesday, May 4, 2021, at 8:00 a.m. Central Time. The Annual General Meeting of Shareholders will be held at Pentair's office in the United States located at 5500 Wayzata Blvd., Suite 900, Golden Valley, Minnesota 55416. The enclosed notice of annual general meeting and proxy statement describe the items of business that we will conduct at the meeting and also provide you with important information about Pentair plc, including our practices in the areas of corporate governance and executive compensation. We strongly encourage you to read these materials and then to vote your shares.

Our Board successfully navigated the challenges and opportunities of 2020

2020 presented unique challenges — and opportunities — to Pentair and all of our constituents. As the Company responded to the COVID-19 pandemic, our Board first prioritized the safety of our employees, customers and communities, as well as ensured the stability of our operations. The Board has received regular updates on the operational and financial impacts of the pandemic on our business.

As individuals and families spent more time at home, our Consumer Solutions businesses, led by our Pool business, had an opportunity to meet customer demand, and they did. The Board also guided our continued investments in digital infrastructure and innovation throughout Pentair to well-position Pentair for an eventually strengthened economy. Our employees rose to the challenges presented and demonstrated the enduring strength of our Win Right values and culture. As a result, we believe that coming out of the pandemic, we will emerge as an even stronger Pentair.

Our Board is leading our commitment to further advance our environmental, social and governance stewardship

Our Board is providing oversight and strategic direction of our social responsibility program to execute our ESG goals. In furtherance of these efforts, the Board reviewed the results of a comprehensive ESG assessment and identified areas of amplified focus, directed at improving the environment and making positive impacts for our employees, communities and our shareholders. To lead these efforts and achieve accelerated progress, the Board appointed one of our executive officers to serve in the additional role of Chief Social Responsibility Officer.

Our Board continues to refresh itself with new expertise and diversity

We believe our directors bring a well-rounded variety of diversity, skills, qualifications and experiences, and represent an effective mix of deep company knowledge and fresh perspectives. Five of our current directors joined the Board in the last three years. The diversity of perspectives represented on the Board allows us to effectively oversee our dynamic business.

Effective January 1, 2021, Gregory E. Knight joined our Board as an independent director, bringing significant executive leadership experience, including in the areas of customer care, digital transformation, information management and operations. With Gregg's appointment, we have further expanded the diversity on our Board, reflecting our commitment to inclusion and diversity at all levels of our company.

We remain committed to ensuring strong governance at Pentair, which is demonstrated through practices such as our independent board leadership, annual election of directors and providing shareholders with proxy access rights. On behalf of the entire Board, we thank you for your confidence in us. We value your investment, your input and your support.

GRAPHIC   GRAPHIC
David A. Jones
Pentair Chairman of the Board
  John L. Stauch
Pentair President and CEO

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NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

To Be Held May 4, 2021

Our Annual General Meeting of Shareholders will be held at Pentair's office in the United States located at 5500 Wayzata Blvd., Suite 900, Golden Valley, Minnesota 55416, on Tuesday, May 4, 2021, at 8:00 a.m. Central Time, to consider and vote upon the following proposals:

1.   By separate resolutions, to re-elect the following director nominees:

 

 

(i)

 

Mona Abutaleb Stephenson

 

(vi)

 

David A. Jones

 

 

(ii)

 

Glynis A. Bryan

 

(vii)

 

Michael T. Speetzen

 

 

(iii)

 

T. Michael Glenn

 

(viii)

 

John L. Stauch

 

 

(iv)

 

Theodore L. Harris

 

(ix)

 

Billie I. Williamson

 

 

(v)

 

Gregory E. Knight

 

 

 

 

2.

 

To approve, by nonbinding, advisory vote, the compensation of the named executive officers.

3.

 

To ratify, by nonbinding, advisory vote, the appointment of Deloitte & Touche LLP as the independent auditor of Pentair plc and to authorize, by binding vote, the Audit and Finance Committee of the Board of Directors to set the auditor's remuneration.

4.

 

To approve the Pentair plc Employee Stock Purchase and Bonus Plan, as amended and restated.

5.

 

To authorize the Board of Directors to allot new shares under Irish law.

6.

 

To authorize the Board of Directors to opt-out of statutory preemption rights under Irish law.

7.

 

To authorize the price range at which Pentair plc can re-allot shares it holds as treasury shares under Irish law.

 

 

To consider and act on such other business as may properly come before the Annual General Meeting or any adjournment.

Proposals 1, 2, 3, 4 and 5 are ordinary resolutions, requiring the approval of a simple majority of the votes cast at the meeting. Proposals 6 and 7 are special resolutions, requiring the approval of not less than 75% of the votes cast.

Only shareholders of record as of the close of business on March 5, 2021 are entitled to receive notice of and to vote at the Annual General Meeting.

GRAPHIC

If you are a shareholder entitled to attend and vote at the Annual General Meeting, you are entitled to appoint a proxy or proxies to attend, speak and vote on your behalf. A proxy need not be a shareholder. If you wish to appoint as proxy any person other than the individuals specified on the proxy card, please contact our Corporate Secretary at our registered office.

At the Annual General Meeting, management will review Pentair plc's affairs and will also present Pentair plc's Irish Statutory Financial Statements for the fiscal year ended December 31, 2020 and the report of the statutory auditors thereon.

By Order of the Board of Directors,

Karla C. Robertson, Secretary

March 19, 2021

Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on May 4, 2021. The Annual Report, Notice of Annual General Meeting, Proxy Statement, and Irish Statutory Financial Statements and Related Reports are available by Internet at www.proxyvote.com.

Shareholders in Ireland may participate in the Annual General Meeting by audio link at Arthur Cox LLP, Ten Earlsfort Terrace, Dublin 2, D02 T380, Ireland, at 2:00 p.m. local time. See "Questions and Answers About the Annual General Meeting and Voting" for further information on participating in the Annual General Meeting in Ireland.

4     2021 Proxy Statement


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PROXY STATEMENT FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
OF PENTAIR PLC TO BE HELD ON TUESDAY, MAY 4, 2021

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PROXY SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and you should read the entire Proxy Statement before voting.

VOTING MATTERS


Proposal



Board Vote
Recommendation




Vote Required



Page Reference
1.   Re-Elect Director Nominees   FOR each nominee   Majority of votes cast   9
2.   Approve, by Nonbinding, Advisory Vote, the Compensation of the Named Executive Officers   FOR   Majority of votes cast   28
3.   Ratify, by Nonbinding, Advisory Vote, the Appointment of the Independent Auditor and Authorize, by Binding Vote, the Audit and Finance Committee to Set the Auditor's Remuneration   FOR   Majority of votes cast   61
4.   Approve the Pentair plc Employee Stock Purchase and Bonus Plan, as amended and restated   FOR   Majority of votes cast   64
5.   Authorize the Board of Directors to Allot New Shares   FOR   Majority of votes cast   68
6.   Authorize the Board of Directors to Opt-Out of Statutory Preemption Rights   FOR   75% of votes cast   69
7.   Authorize the Price Range at which Pentair Can Re-allot Treasury Shares   FOR   75% of votes cast   71

DIRECTOR NOMINEES

        Committee Memberships
  Name Age Director
Since

Independent Audit and
Finance

Compensation Governance
  Mona Abutaleb Stephenson 58 2019 ·    
  Glynis A. Bryan 62 2003 GRAPHIC    
  T. Michael Glenn 65 2007   GRAPHIC ·
  Theodore L. Harris 56 2018   · ·
  David A. Jones (Chairman) 71 2003   · ·
  Gregory E. Knight 53 2021 ·    
  Michael T. Speetzen 51 2018 ·    
  John L. Stauch 56 2018        
  Billie I. Williamson 68 2014   · GRAPHIC

·

 

committee member

GRAPHIC

 

committee chair

DIRECTOR DASHBOARD

GRAPHIC

6     2021 Proxy Statement


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PROXY SUMMARY

CORPORATE GOVERNANCE STRENGTHS

GRAPHIC   Independent Board Leadership, via an independent, non-executive Chairman of the Board and all independent directors on committees

GRAPHIC

 

Annual Election of Directors

GRAPHIC

 

Majority Voting, the vote requirement for director elections, except in the case of a contested election

GRAPHIC

 

Proxy Access, available to shareholders who meet certain ownership, retention and other requirements set forth in our Articles of Association
GRAPHIC   Share Ownership Guidelines, establishes meaningful minimum share ownership levels for directors and executives with a transition period for new appointments

GRAPHIC

 

Company Strategy, reviewed and monitored throughout the year by the Board

GRAPHIC

 

Board and Committee Self-Assessments, conducted annually

GRAPHIC

 

Related Person Transactions Policy, designed to avoid conflicts of interest

FISCAL 2020 EXECUTIVE COMPENSATION DECISIONS

The Compensation Committee believes that the most effective executive compensation program aligns executive initiatives with shareholders' interests. The Compensation Committee seeks to accomplish this objective by rewarding the achievement of specific annual, long-term and strategic goals that create lasting shareholder value.

The charts below illustrate the approximate targeted mix of fixed, annual, and long-term incentive compensation we provided in 2020 to our Chief Executive Officer and our other executive officers who are named in the Summary Compensation Table below (the "Named Executive Officers" or "NEOs"). These charts also illustrate the approximate amount of target direct compensation considered at risk.

GRAPHIC

Shareholder support of our executive compensation program was reflected in our 2020 "say on pay vote" with 95% of votes cast in favor of our proposal. In 2020, the Compensation Committee maintained the majority of changes adopted over the last number of years, which reflected the Committee's focus on pay for performance, shareholder feedback, and industry and market practices. In addition, the Committee approved compensation for our new Named Executive Officers, adopted an Executive Officer Severance Plan, and approved annual incentive and long term incentive payouts.

This summary of fiscal 2020 compensation decisions should be read in connection with "Executive Compensation" below, including "Compensation Discussion and Analysis" (see page 30).

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TABLE OF CONTENTS


3   LETTER TO SHAREHOLDERS
4   NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
5   PROXY STATEMENT FOR THE ANNUAL GENERAL MEETING OF SHAREHOLDERS OF PENTAIR PLC TO BE HELD ON TUESDAY, MAY 4, 2021
6   PROXY SUMMARY
9   PROPOSAL 1 RE-ELECT DIRECTOR NOMINEES
10   Directors Standing for Re-Election
15   Director Independence
15   Director Qualifications; Diversity and Tenure
16   Shareholder Recommendations, Nominations and Proxy Access
17   ESG OVERVIEW
18   CORPORATE GOVERNANCE MATTERS
18   The Board's Role and Responsibilities
21   Board Structure and Processes
23   Committees of the Board
24   Attendance at Meetings
24   Director Compensation
28   EXECUTIVE COMPENSATION
28   PROPOSAL 2 APPROVE, BY NONBINDING, ADVISORY VOTE, THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
29   COMPENSATION COMMITTEE REPORT
30   COMPENSATION DISCUSSION AND ANALYSIS
30   Overview of Compensation Program and Objectives
31   Our Executive Compensation Program
31   2020 Highlights and Business Results
33   Evolution of Executive Compensation Program
34   Shareholder Outreach and Say on Pay
35   Comparative Framework
35   2020 Compensation Program Elements
35   Base Salaries
36   Annual Incentive Compensation
38   2020 Long-Term Incentive Compensation
40   Perquisites and Other Personal Benefits
40   Stock Ownership Guidelines
41   Equity Holding Policy
42   Clawback Policy
42   Policy Prohibiting Hedging and Pledging
42   Retirement and Other Benefits
43   Severance and Change in Control Benefits
44   Impact of Tax Considerations
44   Compensation Consultant
45   Evaluating the Chief Executive Officer's Performance
45   Equity Award Practices

46   EXECUTIVE COMPENSATION TABLES
46   Summary Compensation Table
48   Grants of Plan-Based Awards in 2020
49   Outstanding Equity Awards at December 31, 2020
51   2020 Option Exercises and Stock Vested Table
51   2020 Pension Benefits
53   2020 Nonqualified Deferred Compensation Table
54   Potential Payments Upon Termination or Change in Control
59   Pay Ratio
60   Risk Considerations in Compensation Decisions
61   PROPOSAL 3 RATIFY, BY NONBINDING, ADVISORY VOTE, THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITOR OF PENTAIR PLC AND TO AUTHORIZE, BY BINDING VOTE, THE AUDIT AND FINANCE COMMITTEE OF THE BOARD OF DIRECTORS TO SET THE AUDITOR'S REMUNERATION
62   Audit and Finance Committee Pre-Approval Policy
62   Fees Paid to the Independent Auditors
63   AUDIT AND FINANCE COMMITTEE REPORT
64   PROPOSAL 4 APPROVE THE PENTAIR PLC EMPLOYEE STOCK PURCHASE AND BONUS PLAN, AS AMENDED AND RESTATED
68   PROPOSAL 5 AUTHORIZE THE BOARD OF DIRECTORS TO ALLOT NEW SHARES UNDER IRISH LAW
69   PROPOSAL 6 AUTHORIZE THE BOARD OF DIRECTORS TO OPT-OUT OF STATUTORY PREEMPTION RIGHTS UNDER IRISH LAW
71   PROPOSAL 7 AUTHORIZE THE PRICE RANGE AT WHICH PENTAIR PLC CAN RE-ALLOT SHARES IT HOLDS AS TREASURY SHARES UNDER IRISH LAW
72   SECURITY OWNERSHIP
73   QUESTIONS AND ANSWERS ABOUT THE ANNUAL GENERAL MEETING AND VOTING
77   SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE 2022 ANNUAL GENERAL MEETING OF SHAREHOLDERS
78   IRISH DISCLOSURE OF SHAREHOLDER INTERESTS
78   2020 ANNUAL REPORT ON FORM 10-K
78   REDUCE DUPLICATE MAILINGS
A-1   APPENDIX A — RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
B-1   APPENDIX B — PENTAIR PLC EMPLOYEE STOCK PURCHASE AND BONUS PLAN, AS AMENDED AND RESTATED

8     2021 Proxy Statement


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PROPOSAL 1

GRAPHIC


Our Board currently has nine members. The size of our Board is limited to no fewer than seven and no more than eleven members, and our Board believes that any size in this range is appropriate. On the recommendation of the Governance Committee, our Board has nominated the nine director nominees named in the resolutions below, all of whom are current directors for re-election for a one-year term expiring on completion of the 2022 Annual General Meeting. If any of the director nominees should become unable to accept election, your proxy or proxies may vote for other persons selected by the Board. Management has no reason to believe that any of the director nominees named below will be unable to serve his or her full term if elected.

Biographies of the director nominees follow. These biographies include for each director his or her age (as of the date of the filing of this Proxy Statement); his or her business experience; his or her directorships in public companies and other organizations within the past five years; and a discussion of the specific experience, qualifications, attributes or skills that led to the conclusion that each should serve as a director.

Gregory E. Knight is standing for election by our shareholders for the first time. In December 2020, Mr. Knight was appointed by our Board to serve as a director effective January 1, 2021. Mr. Knight was identified as a potential candidate for our Board by an independent search firm who assisted the Governance Committee in identifying and evaluating potential candidates.

The text of the resolutions with respect to Proposal 1 is as follows:

"IT IS RESOLVED, by separate resolutions to re-elect the following nine director nominees for a term expiring on completion of the 2022 Annual General Meeting:

(i)   Mona Abutaleb Stephenson   (vi)   Gregory E. Knight
(ii)   Glynis A. Bryan   (vii)   Michael T. Speetzen
(iii)   T. Michael Glenn   (viii)   John L. Stauch
(iv)   Theodore L. Harris   (ix)   Billie I. Williamson."
(v)   David A. Jones        

THE BOARD RECOMMENDS A VOTE "FOR" RE-ELECTION OF EACH DIRECTOR NOMINEE.

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PROPOSAL 1

DIRECTORS STANDING FOR RE-ELECTION

Mona Abutaleb Stephenson

Age:  58

Director Since:  2019

Committee Served:

    Audit and Finance

  PHOTO

Biography

Ms. Abutaleb Stephenson has been the Chief Executive Officer of Medical Technology Solutions, LLC, a provider of technology solutions for the healthcare industry, since 2019. From 2013 to 2018, Ms. Abutaleb was the Chief Executive Officer of mindSHIFT Technologies, Inc., an IT outsourcing/managed services and cloud services provider. From 2006 to 2013, Ms. Abutaleb served as President and Chief Operating Officer of mindSHIFT. In 2012, mindSHIFT was acquired by Best Buy Co., Inc. and then later, in 2014, was acquired by Ricoh Company, Ltd., a leading provider of document management solutions, IT services, printing, digital cameras and industrial systems. Ms. Abutaleb also served as Senior Vice President of Ricoh USA from 2015 to 2017 and Executive Vice President of Ricoh Global Services from 2017 to 2018.

Skills & Qualifications

Ms. Abutaleb has significant executive leadership experience, including in the areas of technology, cyber risk management and strategic planning. Ms. Abutaleb's experience serving on the board of a company operating in a highly regulated industry contributes to her experience overseeing governance and risk.

Other Public Board Service:

Sandy Spring Bancorp, Inc. (2015–present)

Glynis A. Bryan

Age:  62

Director Since:  2003

Committee Served:

    Audit and Finance (Chair)

  PHOTO

Biography

Since 2007, Ms. Bryan has been the Chief Financial Officer of Insight Enterprises, Inc., a leading provider of information technology products and solutions to clients in North America, Europe, the Middle East and the Asia-Pacific region. Between 2005 and 2007, Ms. Bryan was the Executive Vice President and Chief Financial Officer of Swift Transportation Co., a holding company that operates the largest fleet of truckload carrier equipment in the United States. Between 2001 and 2005, Ms. Bryan was the Chief Financial Officer of APL Logistics, the supply-chain management arm of Singapore-based NOL Group, a logistics and global transportation business. Prior to joining APL, Ms. Bryan spent 16 years with Ryder System, Inc., a truck leasing company where Ms. Bryan served as Senior Vice President and Chief Financial Officer of Ryder Transportation Services from 1999 to 2000.

Skills & Qualifications

Ms. Bryan has extensive global financial and accounting experience in a variety of business operations along with significant leadership experience. Ms. Bryan's institutional knowledge of Pentair, her global perspective, and her logistics expertise allow her to make significant contributions to the Board.

Other Public Board Service:

Pinnacle West Capital Corporation (2020–present)

10     2021 Proxy Statement


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PROPOSAL 1

T. Michael Glenn

Age:  65

Director Since:  2007

Committees Served:

    Compensation (Chair)

    Governance

  PHOTO

Biography

Mr. Glenn serves as the Chair of our Compensation Committee. Mr. Glenn served as a Senior Advisor to Oak Hill Capital Partners, a private equity firm, from 2017 to August 2020. Since 2017, Mr. Glenn also has served on the board of directors of Lumen Technologies, Inc. (formerly CenturyLink, Inc.), a global communications and information technology services company, including as Chairman of the board of directors since May 2020. In 2019, Mr. Glenn was appointed to the board of directors of Safe Fleet Holdings, LLC, a provider of integrated safety platforms for fleets. From 1998 until his retirement in 2016, Mr. Glenn served as the Executive Vice President-Market Development and Corporate Communications of FedEx Corporation, a global provider of supply chain, transportation, business and related information services. From 2000 to 2016, Mr. Glenn also served as President and Chief Executive Officer of FedEx Corporate Services, responsible for all marketing, sales, customer service and retail operations functions for all FedEx Corporation operating companies, including FedEx Office.

Skills & Qualifications

Mr. Glenn brings extensive strategic, marketing and communications experience to our Board from his service as one of the top leaders at FedEx Corporation. He has been an active participant in the development of our strategic plans and a strong proponent for strengthening our branding and marketing initiatives.

Other Public Board Service:

Lumen Technologies, Inc. (2017–present); Level 3 Communications, Inc. (2012–2017); Renasant Corporation (2008–2012); Deluxe Corporation (2004–2007)

Theodore L. Harris

Age:  56

Director Since:  2018

Committees Served:

    Compensation

    Governance

    Audit and Finance
(former; term ended
December 31, 2020)

  PHOTO

Biography

Since 2015, Mr. Harris has been the Chief Executive Officer and a Director of Balchem Corporation, a provider of specialty performance ingredients and products for the food, nutritional, feed, pharmaceutical, medical sterilization and industrial industries. Since 2017, Mr. Harris has served as Chairman of Balchem Corporation's board of directors. Prior to joining Balchem, Mr. Harris spent 11 years at Ashland, Inc., a global specialty chemical provider in a wide variety of markets and applications, including architectural coatings, adhesives, automotive, construction, energy, food and beverage, personal care, and pharmaceutical. Mr. Harris served in a variety of senior management positions at Ashland, Inc., serving most recently as Senior Vice President and President, Performance Materials, from 2014 to 2015. Prior to this position, from 2011 to 2014, Mr. Harris served as Senior Vice President and President, Performance Materials & Ashland Supply Chain, and prior to that, Vice President and President, Performance Materials & Ashland Supply Chain. Between 1993 and 2004, Mr. Harris served in a variety of senior level roles for FMC Corporation, a global provider of crop-protection products, where he last served as General Manager of the Food Ingredients Business.

Skills & Qualifications

Mr. Harris brings to our Board broad managerial, international, operational, financial and sales experience, as well as his track record of developing worldwide marketing strategies and his strong connectivity to consumer end markets.

Other Public Board Service:

Balchem Corporation (2015–present)

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PROPOSAL 1

David A. Jones

Age:  71

Director Since:  2003

Committees Served:

    Compensation

    Governance

  PHOTO

Biography

Mr. Jones serves as the Chairman of the Board. Since 2008, Mr. Jones has been Senior Advisor to Oak Hill Capital Partners, a private equity firm. In 2017, Mr. Jones was appointed to the board of directors of Checkers Drive-In Restaurants, Inc., a leading national restaurant chain, from 2016 to October 2019, Mr. Jones served on the board of directors of Imagine! Print Solutions, a provider of in-house marketing solutions, and from 2012 to October 2020, Mr. Jones served on the board of directors of Earth Fare, Inc., one of the largest natural food retailers in the U.S., all of which are privately owned by Oak Hill Capital Partners. Between 1996 and 2007, Mr. Jones was Chairman and Chief Executive Officer of Spectrum Brands, Inc. (formerly Rayovac Corporation), a global consumer products company with major businesses in batteries, lighting, shaving/grooming, personal care, lawn and garden, household insecticide, and pet supply product categories. Mr. Jones also served in leadership roles with Rayovac, Spectrum Brands, Thermoscan, The Regina Company and Electrolux Corp.

Skills & Qualifications

Mr. Jones' extensive management experience with both public and private companies and private equity, coupled with his global operational, financial, and mergers and acquisitions expertise, have given the Board invaluable insight into a wide range of business situations. Mr. Jones has served on each of our Board Committees, which allows him to bring to the Board insight into a wide range of business and governance situations.

Other Public Board Service:

Dave & Buster's Entertainment, Inc. (2010–2016); The Hillman Group (2010–2014); Simmons Bedding Company (2000–2010); Spectrum Brands, Inc. (1996–2007); Tyson Foods, Inc. (1995–2005)

Gregory E. Knight

Age:  53

Director Since:  2021

Committee Served:

    Audit and Finance

  PHOTO

Biography

Mr. Knight serves as the Executive Vice President, Customer Transformation and Business Services of CenterPoint Energy, Inc., an energy delivery company. He was the Chief Customer Officer, US Energy and Utilities, of National Grid US, an energy delivery company, from 2019 until August 2020. Mr. Knight served at CenterPoint Energy, Inc. as Senior Vice President and Chief Customer Officer, Utility and Commercial Businesses from 2014 to 2019 and Division Vice President, Customer Services from 2009 to 2014. Mr. Knight also previously served in management positions at Ricoh Americas from 2004 to 2009, Reliant retail energy from 2001 to 2004, Allen Knight Inc. from 2000 to 2001 and Verizon from 1992 to 2000.

Skills & Qualifications

Mr. Knight brings to our Board a strong background in customer care and experience in both business to business and business to customer environments, as well as experience in digital transformation, information technology and operations.

12     2021 Proxy Statement


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PROPOSAL 1

Michael T. Speetzen

Age:  51

Director Since:  2018

Committee Served:

    Audit and Finance

  PHOTO

Biography

Since January 2021, Mr. Speetzen has served as the Interim Chief Executive Officer of Polaris Inc., a global powersports leader with a product line-up that includes side-by-side and all-terrain off-road vehicles, motorcycles, boats, and snowmobiles. Mr. Speetzen served as Executive Vice President, Finance and Chief Financial Officer of Polaris from 2015 to 2020. From 2011 to 2015, Mr. Speetzen was Senior Vice President, Finance and Chief Financial Officer of Xylem Inc., a leading global water technology equipment and service provider. Prior to joining Xylem, Mr. Speetzen served as Vice President and Chief Financial Officer of ITT Fluid and Motion Control from 2009 to 2011, Chief Financial Officer for the StandardAero division of the private equity firm Dubai Aerospace Enterprise Ltd. from 2007 to 2009, and various positions of increasing responsibility in the finance functions at Honeywell International, Inc. and General Electric Company.

Skills & Qualifications

Mr. Speetzen brings to our Board extensive financial experience and knowledge of global markets and transacting international business.

John L. Stauch

Age:  56

Director Since:  2018

  PHOTO

Biography

Mr. Stauch is the President and Chief Executive Officer of Pentair plc having previously served as Chief Financial Officer of Pentair from 2007 to 2018. Prior to joining Pentair, Mr. Stauch served as Chief Financial Officer of the Automation and Control Systems unit of Honeywell International Inc. from 2005 to 2007. Previously, Mr. Stauch served as Chief Financial Officer and Information Technology Director of PerkinElmer Optoelectronics and various executive, investor relations and managerial finance positions within Honeywell International Inc. and its predecessor AlliedSignal Inc. from 1994 to 2005. Mr. Stauch serves as a Director of Deluxe Corporation, where he is currently Chair of the Audit Committee and a member of the Finance Committee.

Skills & Qualifications

Mr. Stauch brings to our Board extensive knowledge of Pentair as our President and Chief Executive Officer and former Chief Financial Officer and extensive experience as a financial executive with many aspects of public company strategy and operations.

Other Public Board Service:

Deluxe Corporation (2016–present)

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PROPOSAL 1

Billie I. Williamson

Age:  68

Director Since:  2014

Committees Served:

    Governance (Chair)

    Compensation

  PHOTO

Biography

Ms. Williamson serves as Chair of our Governance Committee. Ms. Williamson has over three decades of experience auditing public companies as an employee and partner of Ernst & Young LLP. From 1998 to 2011, Ms. Williamson served Ernst & Young as a Senior Assurance Partner. Ms. Williamson was also Ernst & Young's Americas Inclusiveness Officer, a member of its Americas Executive Board, which functions as the Board of Directors for Ernst & Young dealing with strategic and operational matters, and a member of the Ernst & Young U.S. Executive Board responsible for partnership matters for the firm.

Skills & Qualifications

Ms. Williamson brings to our Board extensive financial and accounting knowledge and experience, including her service as a principal financial officer and an independent auditor to numerous Fortune 250 companies and her professional training and standing as a Certified Public Accountant, as well as her broad experience with SEC reporting and governance matters.

Other Public Board Service:

Cushman & Wakefield plc (2018–present); Kraton Corporation (2018–present); XL Group Ltd. (2018); CSRA Inc. (2015–2018); Janus Capital Group Inc. (2015–2017); Exelis Inc. (2012–2015); Annie's Inc. (2012–2014)

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PROPOSAL 1

DIRECTOR INDEPENDENCE

The Board, based on the recommendation of the Governance Committee, determines the independence of each director based upon the New York Stock Exchange ("NYSE") listing standards and the categorical standards of independence included in our Corporate Governance Principles. Based on these standards, the Board has affirmatively determined that all of our non-employee directors (i.e., Mses. Abutaleb, Bryan, and Williamson and Messrs. Glenn, Harris, Jones, Knight, and Speetzen) are independent and have no material relationship with us (including our directors and officers) that would interfere with their exercise of independent judgment. John L. Stauch, our President and Chief Executive Officer, is the only director who is not independent.

In determining independence, our Board and Governance Committee consider circumstances where a director serves as an employee of another company

that is a customer or supplier. The Board and Governance Committee have reviewed each of these relationships, which are set forth below. In every case, the relationship involves sales to or purchases from the other company that, for each of 2018, 2019, and 2020, were (a) less than the greater of $1 million or 2% of that organization's consolidated gross revenues during each of 2018, 2019, and 2020; and (b) not of an amount or nature that impeded the director's exercise of independent judgment.

Director

Relationship(s) Considered
Ms. Bryan   Chief Financial Officer, Insight Enterprises, Inc.
Mr. Glenn   Senior Advisor, Oak Hill Capital Partners
Mr. Jones   Senior Advisor, Oak Hill Capital Partners
Mr. Speetzen   Interim Chief Executive Officer, Polaris Inc.

DIRECTOR QUALIFICATIONS; DIVERSITY AND TENURE

 

The Governance Committee and the Board recognize that the Board's contributions and effectiveness depend on the character and abilities of each director individually as well as on their collective strengths. Accordingly, the Governance Committee and the Board evaluate candidates based on several criteria. Directors are chosen with a view to bringing to the Board a diversity of skills, qualifications, experiences, perspectives and backgrounds. In this regard, the Governance Committee considers diversity of age, gender, race, ethnicity and other characteristics. The Governance Committee and the Board seek to establish a core of strategic and business advisers with financial and management expertise, and also consider candidates with substantial experience outside the business community, such as in the public, academic or scientific communities. In addition, the Governance Committee and the Board consider the tenure of incumbent directors, with the goal of having a mix of shorter-tenured directors who provide fresh perspectives and longer-tenured directors who provide institutional knowledge regarding our company and our business.

When considering candidates for election as directors, the Governance Committee and the Board are guided by the following principles, found in our Corporate Governance Principles:

at least a majority of the Board must consist of independent directors;
each director should be an individual of the highest character and integrity and have an inquiring mind, vision and the ability to work well with others;
each director should be free of any conflict of interest that would violate any applicable law or regulation or interfere with the proper performance of his or her responsibilities as a director;
each director should possess substantial and significant experience that could be important to us in the performance of his or her duties;
each director should have sufficient time available to devote to our affairs; and
each director should have the capacity and desire to represent the balanced, best interests of the shareholders as a whole and not primarily the interests of a special interest group or constituency and be committed to enhancing long-term shareholder value.

The Governance Committee in the first instance is charged with observing these policies, and strives in reviewing each candidate to assess the fit of his or her qualifications with the needs of the Board and our company at that time, given the then current mix of directors' attributes. Board composition, effectiveness and processes are all subject areas of our annual Board self-assessment, which is described in more detail below under "Board and Committee Self-Assessments."

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PROPOSAL 1

SHAREHOLDER RECOMMENDATIONS, NOMINATIONS AND PROXY ACCESS

 

Our Corporate Governance Principles provide that the Governance Committee will consider persons properly recommended by shareholders to become nominees for election as directors in accordance with the criteria described above under "Director Qualifications; Diversity and Tenure." Recommendations for consideration by the Governance Committee, together with appropriate biographical information concerning each proposed nominee, should be sent in writing to c/o Corporate Secretary, Pentair plc, Regal House, 70 London Road, Twickenham, London, TW1 3QS, United Kingdom.

Our Articles of Association set forth procedures to be followed by shareholders who wish to nominate candidates for election as directors in connection with an Annual General Meeting. All such nominations must be accompanied by certain background and other information specified in the Articles of Association and

submitted within the timing requirements set forth in the Articles of Association. See "Shareholder Proposals and Nominations for the 2022 Annual General Meeting of Shareholders" below for more information.

In addition, eligible shareholders may under certain circumstances be able to nominate and include in our proxy materials a specified number of candidates for election as directors under the proxy access provisions in our Articles of Association. All such nominations must be accompanied by certain background and other information specified in our Articles of Association and submitted within the timing requirements set forth in our Articles of Association. See "Shareholder Proposals and Nominations for the 2022 Annual General Meeting of Shareholders" below for more information.

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ESG OVERVIEW

As a leading provider of water treatment and sustainable solutions and with a foundation of Win Right values, we recognize that the work we do and the products and services we provide improve lives and the environment around the world. Pentair strives to be a positive influence on the social and environmental issues of today. As we progress, we are committed to building on our Win Right values and culture by further contributing to the development of a sustainable and responsible society that we believe will also drive our future growth. We are focused on further integrating our environmental, social, and governance (ESG) goals throughout our business by creating broad accountability for our social responsibility strategy and creating shared commitments and targets. In 2020, Pentair completed a formal ESG assessment to identify ESG topics of importance to our shareholders, customers, suppliers, employees, and communities. Through engagement with these stakeholders, internal business leaders, and subject matter experts, we identified ESG goals designed to culminate into targets to further our commitment to social responsibility.

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Environmental

We are focused on reducing our impact on climate change by reducing greenhouse gas emissions while increasing energy and water use efficiency measures throughout our operations. We also seek to continue reducing waste from operations; increase reuse and recycling; support the use of sustainable, renewable natural resources; and design products that facilitate environmental sustainability.

Social

We are focused on enhancing our efforts to engage our suppliers, customers and employees by augmenting our supplier code of conduct. We are also focused on continuing our employee engagement efforts, and executing on our inclusion and diversity strategies and initiatives. We also remain committed to providing a safe workplace for all our employees.

Governance

We are focused on our culture of Winning Right and compliance, including delivering for our customers on product safety and regulatory compliance. We are also focused on creating value for our shareholders with accountability for performance.

We have published an annual corporate responsibility report that has reported on ESG and our accomplishments. In addition, we established a formal social responsibility program to further advance our social responsibility goals. Karla Robertson, our EVP, General Counsel, and Secretary, was appointed to the additional role of Chief Social Responsibility Officer. She leads Pentair's social responsibility program with oversight and strategic direction provided by our Board of Directors and its Governance Committee.

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THE BOARD'S ROLE AND RESPONSIBILITIES

Our Response to the Pandemic

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic. The COVID-19 pandemic has continued to spread throughout the United States and the world, with the continued potential for significant impact. The effects of the COVID-19 pandemic have had, and may continue to have, an unfavorable impact on certain parts of our business. From the earliest signs of the outbreak we have taken proactive action to protect the health and safety of our employees, customers, and suppliers. We have enacted rigorous safety measures in our sites, including implementing social distancing protocols, implementing working from home arrangements for those employees who do not need to be physically present on the manufacturing floor and do not provide manufacturing-support activities, suspending travel, extensively and frequently disinfecting our workspaces, conducting temperature monitoring at our facilities, and providing or accommodating the wearing of facial coverings by those employees who must be physically present in their workplace and where facial coverings are required by local government orders. We expect to continue to implement these measures until we determine that the COVID-19 pandemic is adequately contained for purposes of our business, and we may take further actions as government authorities require or recommend or as we determine to be in the best interests of our employees, customers, and suppliers.

In response to the pandemic, Pentair has also done the following:

Implemented a broad and effective crisis response
Established a COVID-19 Core Response Team, with oversight by the Executive Team and Board of Directors
Built a globally aligned pandemic response plan with standardized site-level Exposure Control Plans covering among other things:

Standard process on social distancing, barriers and facial coverings
    Expanded disinfection and sanitation procedures

    Centralized supply management to ensure access to protective equipment

    Audit and escalation processes
Implemented a telework policy for employees able to work from home
Developed and optimized a case tracking system
Deployed a controlled visitor access policy across our sites
Established and updated a COVID-19 Information Hub on our employee intranet site, providing employees with updated information, protocols and guidance
Established travel, field work and meeting safety protocols and guidance and provided employee training on the protocols
Continuously reviewed customer needs and re-balanced lines and staffing levels to mitigate business impact to customers and mitigate the effects of COVID-19 related supply chain disruptions
Deployed a global shelter in place/government decree review process to ensure compliance with various dynamic government orders
Offered enhanced employee support including: COVID-19 pay assistance, expanded telemedicine access, and a third-party professional partnership on COVID case management, contact tracing and testing
Provided information and resources on vaccines

For more discussion of the impact of the COVID-19 pandemic on our business, please see our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the "Form 10-K") filed with the Securities and Exchange Commission (the "SEC").

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Risk Oversight

The Board is responsible for general oversight of our risk management. The Board focuses on the most significant and material risks facing us and helps to ensure that management develops and implements controls and appropriate risk mitigation strategies.

At the direction of the Board, we have instituted an enterprise-wide risk management process that identifies potential exposure to risks that arise in the course of our business. The Board has determined that the Board as a whole, and not a separate committee, will oversee our enterprise risk management process. Each of our Board Committees has historically focused and continues to focus on specific risks within its respective area of responsibility

and regularly reports to the full Board. The Board uses our enterprise-wide risk management system as a key tool for understanding the risks facing us as well as assessing whether management's processes, procedures and practices for mitigating those risks are effective. Our General Counsel is the primary person responsible to the Board in the planning, assessment and reporting of our risk profile and this risk management system. The Board reviews and discusses an assessment of and a report on our risk profile on a regular basis, including reports on strategic, operational, financial, cybersecurity, information technology, and legal and regulatory compliance risks.

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Oversight of Company Strategy

At least once per year, the Board and senior management engage in an in-depth strategic review of our company's outlook and strategy, which is designed to create long-term shareholder value and serves as

the foundation upon which goals are established. Throughout the year, the Board reviews our strategy and monitors management's progress against such goals.

Oversight of Succession Planning

The Board views its role in succession planning and talent development as a key responsibility. At least once per year, usually as part of the annual talent review process, the Board discusses and reviews the succession plans for the Chief Executive Officer position and other executive officers and key contributors. The Board becomes familiar with potential

successors for key management positions through various means, including annual talent reviews, presentations to the Board, and communications outside of meetings. Our succession planning process is an organization-wide practice designed to proactively identify, develop and retain the leadership talent that is critical for our future business success.

Communicating with Shareholders and Other Stakeholders

We believe that maintaining an active dialogue with our shareholders is important to our long-term success. We value the opinions of our shareholders and other stakeholders and welcome their views throughout the year on key issues. During 2020, we continued our shareholder outreach efforts with respect to corporate governance, executive compensation and ESG matters by initiating communications with our largest shareholders representing a majority of our outstanding shares. The majority of shareholders with whom we spoke supported our corporate governance

practices and executive compensation program, and shareholders have expressed their support for our ESG initiatives. If you wish to communicate with the Board, non-employee directors as a group, or any individual director, including the Chairman, you may send a letter addressed to the relevant party, c/o Corporate Secretary, Pentair plc, Regal House, 70 London Road, Twickenham, London, TW1 3QS, United Kingdom. Any such communications will be forwarded directly to the relevant addressee(s).

Policies and Procedures Regarding Related Person Transactions

Our Board has adopted written policies and procedures regarding related person transactions. For purposes of these policies and procedures:

a "related person" means any of our directors, executive officers, or 5% shareholders or any of their immediate family members; and
a "related person transaction" generally is a transaction (including any indebtedness or a guarantee of indebtedness) in which we were or are a participant and the amount involved exceeds $50,000, and in which a related person had or will have a direct or indirect material interest.

Potential related person transactions must be disclosed and brought to the attention of the Governance Committee directly or to the General Counsel for transmission to the Governance Committee. Disclosure to the Governance Committee should occur before, if possible, or as soon as practicable after the related person transaction is effected, but in any event as soon as practicable after the executive officer or director becomes aware of the

related person transaction. The Governance Committee's decision whether to approve or ratify a related person transaction is to be made in light of a number of factors, including the following:

whether the terms of the related person transaction are fair to us and on terms at least as favorable as would apply if the other party had no affiliation with any of our directors, executive officers or 5% shareholders;
whether there are demonstrable business reasons for us to enter into the related person transaction;
whether the related person transaction could impair the independence of a director under our Corporate Governance Principles' standards for director independence;
whether the related person transaction would present an improper conflict of interest for any of our directors or executive officers, taking into account the size of the transaction, the overall financial position of the director or executive officer; and

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the direct or indirect nature of the interest of the director or executive officer in the transaction, the ongoing nature of the relationship, and any other factors the Governance Committee deems relevant.

We had no related person transactions during 2020. To our knowledge, no related person transactions are currently proposed.

BOARD STRUCTURE AND PROCESSES

We and our Board are committed to the highest standards of corporate governance and ethics. As part of this commitment, the Board has adopted a set of Corporate Governance Principles that sets forth our policies on:

selection and composition of the Board;
Board leadership;
Board composition and performance;
responsibilities of the Board;
the Board's relationship to senior management;
meeting procedures;
committee matters; and
succession planning and leadership development.

The Board regularly reviews and, if appropriate, revises the Corporate Governance Principles and other governance instruments, including the charters of its Audit and Finance, Compensation, and Governance Committees, in accordance with rules of the Securities and Exchange Commission ("SEC"), the NYSE and Irish law. The Board has also adopted a Code of Business Conduct and Ethics that applies to all of our employees, contractors, directors and executive officers, including our Chief Executive Officer and senior financial officers.

Copies of these documents are available, free of charge, on our website at https://www.pentair.com/en-us/about/corporate-governance.html.

Board Leadership Structure

We do not have a policy requiring the positions of Chairman of the Board and Chief Executive Officer to be held by different persons. Rather, the Board has the discretion to determine whether the positions should be combined or separated. Since 2018, the positions of Chief Executive Officer and Chairman of the Board have been separated.

Mr. Stauch is our Chief Executive Officer, and Mr. Jones, an independent member of the Board, serves as Chairman of the Board. The role of the Chairman is to provide independent leadership to the Board, act as liaison between and among the non-employee directors and our company, and seek to ensure that the Board operates independently of management. The Chairman's principal responsibilities include:

leading meetings of the Board;
presiding over all executive sessions of the Board;
in conjunction with the Chair of the Compensation Committee, reporting to the Chief Executive Officer on the Board's annual review of his performance;
approving the agenda for Board meetings, including scheduling to assure sufficient time for discussion of all agenda items;
in conjunction with the Committee Chairs, ensuring an appropriate flow of information to the Board;
holding one-on-one discussions with individual directors where requested by directors or the Board; and
carrying out other duties as requested by the Board.

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Board and Committee Self-Assessments

The Board annually conducts a self-assessment of the Board and each committee in addition to verbal assessments conducted in independent executive session at the end of Board and committee meetings. In 2020, the annual assessment process consisted of individual meetings with the Chairman and each director

to discuss his or her assessment of the Board, and a written evaluation of the Board and each committee by its members comprising both quantitative scoring and narrative comments on a range of topics, including:

GRAPHIC

The written evaluation responses were compiled by a third party. The committee results were shared with each committee Chair who each led a discussion of the assessment at the following regular committee

meeting. The results of the written Board evaluations were shared with the Chairman of the Board and Governance Committee Chair who led a discussion of the assessment at the following Board meeting.

Board Education

Board education is an ongoing, year-round process, which begins when a director joins our Board. Upon joining our Board, new directors are provided with a comprehensive orientation to our company, including our business, strategy and governance. For example, new directors typically participate in one-on-one introductory meetings with our senior business and

functional leaders. On an ongoing basis, directors receive presentations on a variety of topics related to their work on the Board and within the industry, both from senior management and from experts outside of our company. Directors may also enroll in continuing education programs sponsored by third parties at our expense.

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COMMITTEES OF THE BOARD

The Board has three standing committees comprised solely of independent directors: the Audit and Finance Committee, the Compensation Committee, and the Governance Committee. The committee members also meet in executive session without management present at each regularly scheduled meeting.

The information below reflects the number of meetings of the Board and each committee held during fiscal year 2020. The information below regarding Committee membership lists the current members. Gregory E. Knight joined the Audit and Finance Committee effective January 1, 2021 and Theodore L. Harris transitioned from the Audit and Finance Committee to the Compensation and Governance Committees at that same time.

GRAPHIC

  Audit and Finance Committee    
  Role:   The Audit and Finance Committee is responsible, among other things, for assisting the Board with oversight of our accounting and financial reporting processes, oversight of our financing strategy, investment policies, and financial condition, and audits of our financial statements. These responsibilities include the integrity of the financial statements, compliance with legal and regulatory requirements, the independence and qualifications of our external auditor, and the performance of our internal audit function and of the external auditor. The Committee also reviews and discusses disclosure of non-GAAP measures. The Committee is directly responsible for the appointment, compensation, evaluation, terms of engagement (including retention and termination), and oversight of the independent registered public accounting firm. The Committee discusses with the independent auditor any critical audit matters. The Committee holds meetings regularly with our independent and internal auditors, the Board, and management to review and monitor the adequacy and effectiveness of reporting, internal controls, risk assessment, and compliance with our Code of Business Conduct and Ethics and other policies.    
     
  Members:   Glynis A. Bryan (Chair), Mona Abutaleb, Gregory E. Knight, and Michael T. Speetzen. All members have been determined to be independent under SEC and NYSE rules.    
     
  Report:   You can find the Audit and Finance Committee Report under "Audit and Finance Committee Report" of this Proxy Statement.    
     
  Financial Experts:   The Board has determined that all members of the Committee are financially literate under NYSE rules and that Ms. Bryan and Mr. Speetzen qualify as "audit committee financial experts" under SEC standards.    

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  Compensation Committee    
  Role:   The Compensation Committee approves, amends, and administers the policies that govern executive compensation. This includes establishing and reviewing executive base salaries and administering cash bonus and equity-based compensation under the Pentair plc 2020 Share and Incentive Plan (the "2020 Plan"). The Committee also sets the Chief Executive Officer's compensation in conjunction with the Board's annual evaluation of his performance. The Committee has engaged Aon Consulting (formerly Aon Hewitt), a human resources consulting firm, to aid the Committee in its annual review of our executive compensation program for continuing appropriateness and reasonableness and to make recommendations regarding executive officer compensation levels and structures. In reviewing our executive compensation program, the Compensation Committee also considers other sources to evaluate external market, industry and peer-company practices. Information regarding the independence of Aon Consulting is included under "Compensation Discussion and Analysis — Compensation Consultant." A more complete description of the Compensation Committee's practices can be found under "Compensation Discussion and Analysis" under the headings "Comparative Framework" and "Compensation Consultant."    
     
  Members:   T. Michael Glenn (Chair), Theodore L. Harris, David A. Jones, and Billie I. Williamson. All members have been determined to be independent under SEC and NYSE rules.    
     
  Report:   You can find the Compensation Committee Report under "Compensation Committee Report" of this Proxy Statement.    

 

  Governance Committee    
  Role:   The Governance Committee is responsible for, among other things, identifying individuals suited to become directors and recommending nominees to the Board for election at Annual General Meetings. In addition, the Committee monitors developments in director compensation and, as appropriate, recommends changes in director compensation to the Board. The Committee is also responsible for reviewing annually and recommending to the Board changes to our Corporate Governance Principles and administering the annual Board and Board Committee self-assessments. The Governance Committee oversees public policy matters and compliance with our Code of Business Conduct and Ethics. The Governance Committee also oversees ESG-related matters.    
     
  Members:   Billie I. Williamson (Chair), T. Michael Glenn, Theodore L. Harris, and David A. Jones. All members have been determined to be independent under NYSE rules.    

ATTENDANCE AT MEETINGS

The Board held eight meetings in 2020. Members of the Board are expected to attend all scheduled meetings of the Board and the committees on which they serve and all Annual and Extraordinary General Meetings. All current directors attended at least 90% of the meetings of the Board and meetings of the committees on which they served during the period for which such persons served in 2020. In each regularly

scheduled meeting, the independent directors also met in executive session, without the Chief Executive Officer or other members of management present. All of the current directors who were then-serving joined the 2020 Annual General Meeting telephonically due to pandemic-related health and safety concerns and travel restrictions.

DIRECTOR COMPENSATION

The Governance Committee annually reviews the compensation of our non-employee directors and makes recommendations to the Board. Our independent directors approve our director compensation.

We use a combination of cash and equity-based incentive compensation to attract and retain qualified directors. Compensation of our directors reflects our belief that a significant portion of directors' compensation should be tied to long-term growth in shareholder value.

Mr. Stauch, our only employee-director, is not, and will not be, separately compensated for service as a member of the Board. Mr. Knight joined the Board effective January 1, 2021 and therefore is not included in any of the following director compensation tables because he did not receive any compensation in fiscal 2020.

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Director Retainers

The annual retainers for non-employee directors' service on the Board and Board Committees during 2020 were as follows:

 

Board Retainer

  $90,000    

 

Non-Employee Director Chair

  $140,000    

 

Audit and Finance Committee Chair Supplemental Retainer

  $22,750    

 

Compensation Committee Chair Supplemental Retainer

  $15,000    

 

Governance Committee Chair Supplemental Retainer

  $15,000    

 

Audit and Finance Committee Retainer

  $13,500    

 

Compensation Committee Retainer

  $7,500    

 

Governance Committee Retainer

  $7,500    

The above fee structure was reviewed and re-approved by our independent directors in December 2019 based on recommendations from the Governance Committee and from Aon Consulting who reviewed our director compensation practices against the practices of our peer group. We also previously adopted a policy to provide, beginning in 2019, a tax equalization payment to non-employee directors on any U.K. taxes that may be paid on account of our company's payment of, or reimbursement for, travel, lodging and meal expenses incidental to Board and Board Committee meetings and reimbursement of fees and expenses in connection with assistance in the

preparation of U.K. tax returns and any U.K. taxes on such payment or reimbursement. In addition, for the purposes of limiting double-taxation on U.K. sourced income, non-employee directors are eligible to receive tax equalization payments if the income taxes owed on U.K. sourced income exceeds the income tax rates relative to their countries of residence.

In December 2020, Aon Consulting again reviewed our director compensation with the Governance Committee based on the director compensation practices of our peer group, and our independent directors approved the same level of director compensation for 2021.

Equity Awards

Non-employee directors receive an annual equity grant as a part of their compensation. The full value of the annual equity grant is delivered in the form of restricted stock units. The restricted stock units vest on the first anniversary of the grant date. Each restricted stock unit represents the right to receive one ordinary share upon vesting. The restricted stock units accrue dividend equivalents that will be paid out in ordinary shares if and when the award vests.

The annual grant for 2020, as approved by our independent directors based on the recommendation from the Governance Committee, was valued at $140,000 and was granted on January 2, 2020. Based on the review of director compensation by Aon Consulting and the recommendation of the Governance Committee, our independent directors approved an annual grant for 2021 again valued at $140,000, which was granted on January 4, 2021.

Stock Ownership Guidelines for Non-Employee Directors

Our Corporate Governance Principles establish that non-employee directors should acquire and hold our company shares or share equivalents at a level of five times the annual board retainer.

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STOCK OWNERSHIP FOR NON-EMPLOYEE DIRECTORS SERVING AS OF DECEMBER 31, 2020

 

 

Share
Ownership(1)





12/31/20
Market Value
($)(2)






Ownership
Guideline
($)





Meets
Guideline(3)


 

 

Mona Abutaleb

    6,330     336,060     450,000     No    

 

Glynis A. Bryan

    30,341     1,610,804     450,000     Yes    

 

T. Michael Glenn

    27,733     1,472,345     450,000     Yes    

 

Theodore L. Harris

    7,010     372,161     450,000     No    

 

David A. Jones

    71,768     3,810,163     450,000     Yes    

 

Michael T. Speetzen

    7,010     372,161     450,000     No    

 

Billie I. Williamson

    13,610     722,555     450,000     Yes    
(1)
The amounts in this column include ordinary shares owned by the director, both directly and indirectly, and unvested restricted stock units.

(2)
Based on the closing market price for our ordinary shares on December 31, 2020 of $53.09.

(3)
Non-employee directors have five years after their election as a director to meet the stock ownership guidelines. Messrs. Harris and Speetzen were first elected as directors in 2018 and Ms. Abutaleb was first elected as a director in 2019. All directors have met or are on track to meet the guidelines.

Director Compensation Table

The table below summarizes the compensation that we paid to non-employee directors for the year ended December 31, 2020.

 (a)



(b)

(c)

(d)

(e)

(f)

(g)

(h)  
             

 Name(1)






Fees
Earned or
Paid in
Cash ($)







Stock
Awards
($)(2)






Option
Awards
($)(3)







Non-Equity
Incentive Plan
Compensation
($)










Change in
Pension Value
and Deferred
Compensation
Earnings
($)









All Other
Compensation
($)(4)




Total
($)
 

 Mona Abutaleb

    108,002     140,003                 5,609     253,614  

 Glynis A. Bryan

    128,542     140,003                 5,739     274,284  

 Jacques Esculier

    37,492     140,003                 5,940     183,435  

 T. Michael Glenn

    122,292     140,003                 4,069     266,364  

 Theodore L. Harris

    105,792     140,003                 5,517     251,312  

 David A. Jones

    247,292     140,003                 10,381     397,676  

 Michael T. Speetzen

    105,792     140,003                 5,517     251,312  

 Billie I. Williamson

    122,292     140,003                 5,517     267,812  
(1)
Mr. Esculier's service on the Board ended May 5, 2020 when his term concluded at the 2020 Annual General Meeting.

(2)
The amounts in column (c) represent the aggregate grant date fair value, computed in accordance with Accounting Standards Codification 718 ("ASC 718"), of restricted stock units granted during 2020. Assumptions used in the calculation of these amounts are included in footnote 13 to our audited financial statements for the year ended December 31, 2020 included in our

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    Annual Report on Form 10-K filed with the SEC on February 16, 2021. As of December 31, 2020, each then-serving director had the unvested restricted stock units and deferred share units shown in the table below.

 Name


Unvested Restricted
Stock Units



Deferred
Share Units
 
 Mona Abutaleb     3,016      
 Glynis A. Bryan     3,016     5,349  
 T. Michael Glenn     3,016     1,854  
 Theodore L. Harris     3,016      
 David A. Jones     3,016     53,281  
 Michael T. Speetzen     3,016      
 Billie I. Williamson     3,016      
(3)
No stock options were granted to our non-employee directors during 2020. As of December 31, 2020, each then-serving director had the outstanding stock options shown in the table below.
 Name

Outstanding Stock
Options
 
 Mona Abutaleb      
 Glynis A. Bryan     22,017  
 T. Michael Glenn     28,324  
 Theodore L. Harris      
 David A. Jones     22,017  
 Michael T. Speetzen      
 Billie I. Williamson      
(4)
The amounts in column (g) for 2020 include tax equalization payments on any U.K. taxes paid on account of our company's payment of, or reimbursement for, (a) lodging expenses incidental to Board and Board Committee meetings, (b) fees and expenses in connection with assistance in the preparation of U.K. tax returns and (c) a U.K. tax equalization payment gross-up for Mr. Jones. The directors also occasionally receive personal use of event tickets when such tickets are not being used for business purposes for which we have no aggregate incremental cost.

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PROPOSAL 2

EXECUTIVE COMPENSATION

GRAPHIC



In accordance with Section 14A of the Securities Exchange Act of 1934, the Board is asking the shareholders to approve, by nonbinding, advisory vote, the compensation of the Named Executive Officers disclosed in the sections below titled "Compensation Discussion and Analysis" and "Executive Compensation Tables." We currently hold these votes annually.

Executive compensation is an important matter to the Board and the Compensation Committee and to our shareholders. We have designed our executive compensation program to align executive and shareholder interests by rewarding the achievement of specific annual, long-term, and strategic goals that create long-term shareholder value. We believe that our executive compensation program provides competitive compensation that motivates and rewards executives for achieving financial and strategic objectives, provides rewards commensurate with performance to incentivize the Named Executive Officers to perform at their highest levels, encourages growth and innovation, attracts and retains the Named Executive Officers and other key executives, and aligns our executive compensation with shareholders' interests through the use of equity-based incentive awards.

The Compensation Committee has overseen the development and implementation of our executive compensation program in line with these compensation objectives. The Compensation Committee continuously reviews, evaluates and updates our executive compensation program to ensure that we provide competitive compensation that motivates the Named Executive Officers to perform at their highest levels while increasing long-term value to our shareholders.

With these compensation objectives in mind, the Compensation Committee has taken a number of compensation actions in recent years to align with our shareholders' interests, including the following:

Annual cash incentives for the Named Executive Officers are based on performance goals that correlate strongly with several primary corporate objectives: focusing on revenue growth, improving the financial return from our business and strengthening our balance sheet through cash flow improvement and debt reduction.
Long-term incentive awards that are performance based and aligned with creating long-term shareholder value.
Robust stock ownership guidelines for executive officers.
No single trigger change in control vesting or excise tax gross-ups in our Key Executive Employment and Separation Agreements ("KEESAs").
Elimination of executive cash perquisite allowance.
Enhanced policy prohibiting hedging by directors, executive officers and employees.

As described in detail under "Compensation Discussion and Analysis — Shareholder Outreach and Say on Pay," we continued our shareholder outreach in 2020.

These and other actions demonstrate our continued commitment to align executive compensation with shareholders' interests while providing competitive compensation to attract, motivate and retain the Named Executive Officers and other key executives. We will continue to review and adjust our executive compensation program with these goals in mind to ensure the long-term success of our company and generate increased long-term value to our shareholders.

This nonbinding, advisory vote gives you an opportunity to express your views about our executive compensation program. As we further align our executive compensation program with the interests of our shareholders while continuing to retain key talented executives who drive our company's success, we ask that you approve the compensation of the Named Executive Officers.

The resolution in respect of this Proposal 2 is an ordinary resolution. The text of the resolution with respect to Proposal 2 is as follows:

"IT IS RESOLVED, that, on a nonbinding, advisory basis, the compensation of Pentair plc's Named Executive Officers as disclosed in the Compensation Discussion and Analysis, the accompanying tables and the related disclosures contained in Pentair plc's Proxy Statement is hereby approved."

EACH OF THE BOARD AND THE COMPENSATION COMMITTEE RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS.

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​    

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis with management and, based on such review and discussions, the Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2020.

THE COMPENSATION COMMITTEE

T. Michael Glenn, Chair
Theodore L. Harris
David A. Jones
Billie I. Williamson

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COMPENSATION DISCUSSION AND ANALYSIS

OVERVIEW OF COMPENSATION PROGRAM AND OBJECTIVES

The Compensation Committee sets and administers the policies that govern our executive compensation, including:

establishing and reviewing executive base salaries;
overseeing our annual incentive compensation plans;
overseeing our long-term equity-based compensation plan;
approving all awards under those plans;
annually evaluating risk considerations associated with our executive compensation program; and
annually approving all compensation decisions for executive officers, including those for the Named Executive Officers, who are named in the Summary Compensation Table below.

The Compensation Committee believes that the most effective executive compensation program aligns executive initiatives with shareholders' interests. The Compensation Committee seeks to accomplish this objective by rewarding the achievement of specific annual, long-term and strategic goals that create lasting shareholder value.

The Compensation Committee's specific objectives include:

motivating and rewarding executives for achieving financial and strategic objectives;
aligning management and shareholder interests by encouraging employee stock ownership;
providing rewards commensurate with company performance;
encouraging growth and innovation; and
attracting and retaining top-quality executives and key employees.

To balance the objectives described above, our executive compensation program uses the following direct compensation elements:

base salary, to provide fixed compensation competitive in the marketplace;
annual incentive compensation, to reward short-term performance against specific financial targets; and
long-term incentive compensation, to link management incentives to long-term value creation and shareholder return.

We also provide standard retirement and health and welfare benefits to attract and retain executives over the longer term.

The Compensation Committee reviews total compensation for executive officers and the relative levels of each of these forms of compensation against the Committee's goals. As such, our executive compensation program is predominantly performance-based, which encourages our executive officers to focus on our company's long-term success and aligns with the long-term interests of our shareholders. The approximate mix of total target direct compensation for 2020 for our Chief Executive Officer and the average of the other Named Executive Officers is shown in the charts that follow.

GRAPHIC

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COMPENSATION DISCUSSION AND ANALYSIS

OUR EXECUTIVE COMPENSATION PROGRAM

The Compensation Committee has taken a number of actions in recent years with the focus of aligning our executive compensation program with Pentair's short-term and long-term objectives while also addressing shareholder feedback and compensation best practices. The table below outlines a number of key features in our executive compensation program.


WHAT WE DO



WHAT WE DON'T DO
GRAPHIC   Annual Shareholder Outreach to seek input and feedback on executive compensation

GRAPHIC

 

Independent Consultant, hired by and reporting to the Compensation Committee and evaluated periodically

GRAPHIC

 

Comparator Group ("peer group") evaluated annually, based on industry and revenue of 1/2 to 2x revenue size

GRAPHIC

 

Significant CEO pay at risk (85%); average of 73% for other Named Executive Officers

GRAPHIC

 

Stock Ownership Guidelines and Holding Policy for the CEO at 6.0x base salary and 2.0-3.0x for executive officers

GRAPHIC

 

Formal Clawback Policy for cash bonuses and performance-based equity awards

GRAPHIC

 

Annual Risk-Assessment of our compensation programs and policies
GRAPHIC   No employment agreements or multi-year compensation commitments with any current executive officers

GRAPHIC

 

No Single-Trigger Change in Control Equity Vesting in KEESAs

GRAPHIC

 

No Excise Tax Gross-ups for executive officers

GRAPHIC

 

No individual supplemental executive retirement plans for newly appointed executive officers

GRAPHIC

 

No hedging or pledging of Pentair equity securities

GRAPHIC

 

No stock options granted below fair market value

GRAPHIC

 

No Flexible Perquisite Cash Allowance for executive officers

2020 HIGHLIGHTS AND BUSINESS RESULTS*

Organizational Changes

In 2020, we re-aligned our organizational structure into two reporting segments, Consumer Solutions and Industrial & Flow Technologies, to better position our businesses to the needs of our customers. In connection with this re-alignment, we eliminated the position held by Karl R. Frykman, our Chief Operating Officer, and instead installed executive leadership for each segment. Prior to his recent position, Mr. Frykman served in various positions at Pentair over his more than 20-year career with the Company, including many years building and leading our Pool business. As a result, in connection with Mr. Frykman's departure, it was critical to ensure a smooth transition of his responsibilities. In assessing the leadership needs for our new organizational structure, we hired Mario R. D'Ovidio to lead the Consumer Solutions segment and promoted Jerome O. Pedretti to lead the Industrial & Flow Technologies segment.

Also during 2020, Mark C. Borin, our former Chief Financial Officer, decided to leave the Company to accept an operational leadership position at a private, employee-owned business. We welcomed Robert P. Fishman as our new Chief Financial Officer and Mr. Borin remained with the Company for a period of time to ensure an orderly transition.

Impact of COVID-19

The COVID-19 pandemic affected companies around the world in unprecedented ways, including impacting both of our segments. We focused on stabilizing our businesses and operations for our customers, employees, and shareholders. Following the second quarter, we reintroduced guidance based on an updated outlook, and then further raised our guidance when reporting third quarter results. We concluded our year delivering growth in a uniquely challenged environment.

*    Please see Appendix A for reconciliation of GAAP to non-GAAP financial measures included in this section.

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Summary 2020 Financial Results

While the pandemic continued throughout 2020 and into 2021, we achieved growth in 2020. In 2020, as compared to 2019, we increased our adjusted earnings per share from continuing operations by 5%. Our net sales during 2020 were $3,018 million, growing by 2%. Our segment income in 2020 was

essentially flat to 2019 at $518 million for 2020 and $516 million for 2019. Our free cash flow from continuing operations was $512 million for 2020. In addition, we increased the cash dividend for the 44th consecutive year, returning $127 million to our shareholders during 2020.


GRAPHIC

 

Earnings per diluted share from continuing operations ("EPS") were $2.13 in 2020 compared to $2.12 in 2019. On an adjusted basis, EPS increased 5.0% to $2.50 in 2020 compared to $2.38 in 2019. Adjusted EPS is a key metric in our performance share unit awards, detailed on page 38.

GRAPHIC

 

Operating income in 2020 was $461 million compared to $433 million in 2019. On an adjusted basis, our segment income increased 0.3% over the prior year to $518 million in 2020 from $516 million in 2019. Segment income as a percent of sales decreased to 17.2% in 2020 from 17.5% in 2019. Segment income is a key metric in our MIP, detailed on page 36.

 

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GRAPHIC

 

Net cash provided by operating activities of continuing operations was $574 million in 2020 compared to $345 million in 2019. Free cash flow from continuing operations was $512 million in 2020, compared to $287 million in 2019. In 2020, we increased the cash dividend paid to our shareholders for the 44th consecutive year, returning $127 million to our shareholders. Free cash flow is a key metric in our MIP, detailed on page 36.

 


GRAPHIC

 

Our sales during 2020 were $3,018 million, an increase of 2.0% compared to $2,957 million in 2019. Revenue, which is the same as sales, is a key metric in our MIP, detailed on page 36.

EVOLUTION OF EXECUTIVE COMPENSATION PROGRAM

The Compensation Committee reviews annually the effectiveness of our executive compensation program and considers a number of factors, including business results, strategic priorities, shareholder alignment, and market practice. As a result of the evolution of our compensation program and changes we have made in response to market dynamics and shareholder feedback, key aspects of our current executive compensation program include:

50% of the value of long-term incentive awards are delivered in the form of performance-based restricted stock units;
100% of our annual incentive metrics are tied to business results; and
Our stock ownership requirements generally meet or exceed market levels.

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COMPENSATION DISCUSSION AND ANALYSIS

The chart below highlights additional changes adopted over the last three years:

    2018*
  2019
  2020

 

 

Established new executive leadership team for new Pentair
New compensation peer groups and pay ranges took effect
Eliminated flexible perquisite cash allowance

 

 

 

Reduced maximum payout opportunity on segment income under the 2019 MIP from 300% to 200%
Replaced ROE with return on invested capital ("ROIC") as a 2019-2021 PSU metric
Enhanced policy prohibiting hedging by directors, executive officers and employees

 

 

 

Adopted Executive Officer Severance Plan

 

 
*
On April 30, 2018, we transferred our electrical business to nVent Electric plc ("nVent") and spun off nVent as a public company to our shareholders (the "Separation") and retained our water business as a pure play residential and commercial water treatment company.

SHAREHOLDER OUTREACH AND SAY ON PAY

The Compensation Committee believes it is important to maintain an open dialogue with our shareholders to gain input on their perspectives regarding our governance and our executive compensation program and to provide clarifying information enabling them to make informed decisions in our annual advisory shareholder vote (our "say on pay vote") on the compensation of our executive officers named in our Proxy Statement.

In 2020, we maintained our shareholder outreach to gain additional insight, better understand shareholder perspectives, and evaluate any concerns regarding our executive compensation program. Specifically, our outreach in 2020 consisted of initiating communications with our largest shareholders representing a majority of our outstanding shares. These shareholders either arranged for individual discussions with us or provided us with feedback that they did not require a meeting.

The majority of shareholders with whom we spoke supported our executive compensation program and the changes adopted over the last several years. This support was reflected in the results of the say on pay vote at the 2020 Annual General Meeting, with approximately 95% of votes cast in favor of our proposal.

Shareholder feedback is an important factor in how we approach and evaluate our executive compensation program. Consistent with the strong vote of shareholder approval, and support from our shareholders, we did not make any material changes to our compensation programs in 2020. We expect to carry forward the general themes provided in the feedback, which include:

Themes

Changes to our executive compensation program in recent years were viewed positively and balanced market practice with alignment to Pentair's strategic objectives.
Our executive compensation program demonstrates a pay-for-performance linkage and shareholder alignment, and is appropriately risk-based, balancing annual and long-term performance.
Our annual incentive plan measures of income, revenue and free cash flow, and long-term incentive plan measures of adjusted EPS and ROIC are generally aligned with shareholder interests.

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COMPARATIVE FRAMEWORK

In setting compensation for our executive officers, including our Named Executive Officers, the Compensation Committee uses competitive compensation data from an annual total compensation study of selected peer companies and other relevant survey sources to inform its decisions about overall compensation opportunities and specific compensation elements. The Compensation Committee uses multiple reference points when establishing targeted compensation levels. The Compensation Committee applies judgment and discretion in establishing targeted pay levels, taking into account not only

competitive market data, but also factors such as company, business unit and individual performance, scope of responsibility, critical needs and skill sets, experience, leadership potential, and succession planning. All companies in our peer group are:

publicly-traded on a major exchange;
similar in business scope and/or operations to our business units and global in nature; and
range from 1/2 to 2x our revenue size and in the same competitive sectors.

Considering Aon Consulting's assessment, the Compensation Committee maintained the same group of companies for benchmarking purposes (the "Comparator Group") for use in setting target compensation for 2020 for our executive officers, including our Named Executive Officers. Our Comparator Group for 2020 included the following 16 peer companies, which had revenues ranging from approximately $1.56 billion to $5.20 billion, with median revenues of approximately $3.26 billion:

  Acuity Brands, Inc.   A.O. Smith Corporation   Colfax Corporation
  Crane Co.   Donaldson Company, Inc.   Flowserve Corporation
  Graco Inc.   IDEX Corporation   Lennox International Inc.
  Lincoln Electric Holdings, Inc.   SPX FLOW, Inc.   Snap-on Incorporated
  The Timken Company   Valmont Industries, Inc.   Watts Water Technologies, Inc.
  Xylem Inc.        

2020 COMPENSATION PROGRAM ELEMENTS

For 2020, the principal components of compensation for our Named Executive Officers were:

base salary;
annual incentive compensation;
long-term incentive compensation, consisting of stock options, restricted stock units and performance share units; and
retirement and health and welfare benefits.

The Compensation Committee reviews total compensation for executive officers and the relative levels of each of these forms of compensation against the Compensation Committee's goals to attract, retain and incentivize talented executives and to align the interests of these executives with those of our long-term shareholders.

BASE SALARIES

We provide each Named Executive Officer with a fixed base salary. In setting base salaries, the Compensation Committee generally references comparable positions at peer companies based on available market data, which include published survey data and proxy statement data for our Comparator Group. The Compensation Committee considers compensation at comparable companies but does not set base salaries based on a particular peer group benchmark or any single factor.

Base salaries for the Named Executive Officers are determined by the Compensation Committee based on numerous factors such as competitive conditions for the Named Executive Officer's position within the Comparator Group and in the broader employment market, as well as the Named Executive Officer's level of responsibility, experience, and individual performance.

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COMPENSATION DISCUSSION AND ANALYSIS

In December 2019, the Compensation Committee undertook its annual review of base salaries for executive officers and other management personnel, in accordance with its normal procedures. Following a review with Aon Consulting, the Compensation Committee approved annual salary increases ranging from 2.1% to 3.0% for Messrs. Stauch, Jacko and Borin and Ms. Robertson effective January 1, 2020 as set forth in the table below. In connection with the appointment of Mr. Fishman, the Compensation Committee reviewed and approved a base salary for

Mr. Fishman of $650,000 based on a wide range of factors, including a market review, his prior compensation level and arm's length negotiations with Mr. Fishman. In connection with the appointment of Mr. D'Ovidio, the Compensation Committee reviewed and approved a base salary for Mr. D'Ovidio of $600,000 based on a wide range of factors, including a market review, his prior compensation level and arm's length negotiations with Mr. D'Ovidio.

  2020 Base
Salary
($)



2019 Base
Salary
($)



Increase
From 2019
to 2020
(%)

John L. Stauch

  970,000   950,000   2.1

Robert P. Fishman(1)

  650,000    

Karla C. Robertson

  540,000   525,000   2.9

Mario R. D'Ovidio(2)

  600,000    

John H. Jacko

  510,000   495,000   3.0

Mark C. Borin(3)

  580,000   565,000   2.7

Karl R. Frykman(4)

  665,000   665,000   0.0
(1)
Mr. Fishman joined Pentair on April 20, 2020 and his appointment as the Company's Executive Vice President, Chief Financial Officer and Chief Accounting Officer was effective May 1, 2020.

(2)
Mr. D'Ovidio was appointed as the Company's Executive Vice President and President of Consumer Solutions effective May 4, 2020.

(3)
Mr. Borin ceased serving as the Company's Chief Financial Officer and Chief Accounting Officer effective April 30, 2020, and ceased serving as an Executive Vice President upon his resignation from the Company on June 6, 2020 following an orderly transition of his responsibilities.

(4)
Mr. Frykman ceased serving as the Company's Executive Vice President and Chief Operating Officer effective June 6, 2020. Mr. Frykman remained employed in a non-executive officer capacity through December 31, 2020 to assist with a smooth transition of his responsibilities.

ANNUAL INCENTIVE COMPENSATION

To provide competitive compensation to attract and retain top talent while linking pay to annual performance, we pay a portion of our executives' cash compensation as incentive compensation tied to annual business performance as measured against annual goals established by the Compensation Committee. In 2020, we provided a cash annual incentive compensation opportunity to each of our executive officers, including the Named Executive Officers, under our MIP.

The Compensation Committee determines a percentage of each executive officer's base salary as a targeted level of incentive compensation opportunity under the MIP, based on the Compensation Committee's review of Aon Consulting's recommendations, relevant survey data and, in the case of executive officers other than the Chief Executive Officer, the recommendations of the Chief Executive Officer. The Compensation Committee

generally sets each executive officer's target incentive compensation opportunity taking into consideration the Comparator Group's target payouts but does not set target incentive compensation opportunities based on a particular peer group benchmark or any single factor.

The actual target incentive compensation opportunity set by the Compensation Committee for each executive officer varies depending on a wide range of factors, including competitive conditions for the executive officer's position within the Comparator Group and in the broader employment market, as well as the executive officer's performance, level of responsibility, and experience. An executive officer's base salary multiplied by the incentive compensation opportunity percentage establishes the target incentive compensation for which the executive officer is eligible.

In December 2019, the Compensation Committee undertook its annual review of targeted levels of

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incentive compensation opportunities and determined to maintain the same levels from the prior year for Messrs. Stauch, Jacko, Borin and Frykman and Ms. Robertson. The Compensation Committee approved target levels of annual incentive compensation for Mr. Fishman and Mr. D'Ovidio in

connection with their appointment as executive officers based on factors similar to those used to determine their base salaries as described above.

The Named Executive Officers' incentive compensation targets as a percentage of salary and as a dollar amount were as follows:

  Target as a
% of Salary


Target

John L. Stauch

  120%   $1,164,000

Robert P. Fishman(1)

  100%   $650,000

Karla C. Robertson

  75%   $405,000

Mario R. D'Ovidio(1)

  80%   $480,000

John H. Jacko

  65%   $331,500

Mark C. Borin

  80%   $464,000

Karl R. Frykman

  90%   $598,500
(1)
Because Mr. Fishman and Mr. D'Ovidio did not join our company until mid-year in 2020, their awards were pro-rated from the amount shown in the table to reflect their partial year of service.

For the 2020 MIP, the Compensation Committee approved, based on recommendations of the Chief Executive Officer, the following performance measures, which applied to our Named Executive Officers except Mr. D'Ovidio: segment income, revenue, and free cash flow, each measured with respect to company-wide performance. For Mr. D'Ovidio, the MIP performance goals were specific to the Consumer Solutions

segment, for which he had primary responsibility, as well as company-wide income performance.

2020 performance goals that applied to each of our Named Executive Officers, as well as the weight assigned to each performance goal and the corresponding payout levels were as follows:

Company-wide
Financial Performance Measure


Weight
Threshold
(Required for any
payout; payouts
begin at 50%)




Target
(100% payout)


Maximum
(200% payout)
Segment Income   50%   $491 million   $545 million   $600 million
Revenue   30%   $2,741 million   $3,045 million   $3,350 million
Free Cash Flow   20%   $366 million   $430 million   $495 million

 

Consumer Solutions
Financial Performance Measure


Weight
Threshold
(Required for any
payout; payouts
begin at 50%)




Target
(100% payout)


Maximum
(200% payout)
Consumer Solutions Income   20%   $364 million   $405 million   $445 million
Consumer Solutions Revenue   40%   $1,518 million   $1,686 million   $1,855 million
Consumer Solutions Free Cash Flow   20%   $284 million   $335 million   $385 million
Pentair Income   20%   $491 million   $545 million   $600 million

Consistent with our continuous effort to align pay with performance, and in response to shareholder feedback that compensation should be tied to strategic financial and operating performance goals, the individual contribution component for Named Executive Officer annual incentive compensation was eliminated in 2017. As such, annual incentive compensation for Named Executive Officers is solely based on the achievement of financial performance goals. The Compensation

Committee maintained this same general framework for the MIP for 2020.

The target levels for the performance goals were aligned with the corporate objectives in our annual operating plan. To provide an added performance incentive, the Compensation Committee determined that the amount of incentive compensation related to each performance goal would be scaled according to

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the amount by which the measure exceeded or fell short of the target. For 2020, the Compensation Committee changed payout levels at threshold performance from achievement of 75% of target, as in prior year MIP plans, to achievement of 50% of target. In determining to make this change, the Compensation Committee reviewed information about annual incentive plan design among peer companies and considered the need for the Company to ensure that performance goals are reasonably attainable to provide appropriate incentives for executive officers. As such,

payouts for 2020 performance were scaled from 0.50 at threshold performance to 2.0 times at the maximum, as detailed in the tables above.

The actual incentive compensation of each Named Executive Officer was determined by multiplying the eligible target incentive compensation amount by a multiplier determined as described above. For 2020, actual results as measured by the performance goals under the MIP for each of our Named Executive Officers were as follows:

Company-wide
Financial Performance Measure


Weight
Actual Financial Results*
Payout %
Weighted Payout %
Segment Income*   50%   $518 million   74.9%   37.4%
Revenue   30%   $3,018 million   95.5%   28.7%
Free Cash Flow*   20%   $512 million   200.0%   40.0%
Total   100%           106.1%

 

Consumer Solutions
Financial Performance Measure


Weight
Actual Financial Results*
Payout %
Weighted
Payout %
Consumer Solutions Income   20%   $419 million   134.8%   27.0%
Consumer Solutions Revenue   40%   $1,743 million   133.7%   53.5%
Consumer Solutions Free Cash Flow   20%   $422 million   200.0%   40.0%
Pentair Income   20%   $518 million   74.9%   15.0%
Total   100%           135.4%

Totals may not sum due to rounding.

*
Please see Appendix A for reconciliation of GAAP to non-GAAP financial measures included in this section.

2020 LONG-TERM INCENTIVE COMPENSATION

The Compensation Committee emphasizes executive compensation that is tied to building and sustaining our company's value through ordinary share performance over time.

GRAPHIC

The Compensation Committee establishes long-term incentive compensation targets taking into consideration both published survey data and data from our Comparator Group. The Compensation Committee does not set award levels based on a

particular peer group benchmark or any single factor. The Compensation Committee determines appropriate performance incentives based on a wide range of factors, such as competitive conditions for the Named Executive Officer's position within the Comparator Group and in the broader employment market, as well as the Named Executive Officer's level of responsibility, experience, and individual performance.

As it does each year, in determining 2020 long-term incentive compensation, the Compensation Committee referenced benchmark data (including compensation surveys, Comparator Group information and other data provided by Aon Consulting) in setting target dollar award levels for each Named Executive Officer and for each position or grade level.

As in prior years, the Compensation Committee continued to balance our long-term incentive compensation program components in a manner focused on shareholder wealth creation, the creation of a sustainable business, and ensuring the leadership is committed to the long-term success of our company.

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COMPENSATION DISCUSSION AND ANALYSIS

For 2020, the Compensation Committee maintained the mix of long-term incentive award of performance share units at 50% of the total long-term award value and stock options and restricted stock units each at 25% of the total long-term award value, except for certain awards made in connection with newly hired or promoted executive officers as described below. The components had the features described below.

Stock options – Each stock option has a term of ten years, with one-third of the options vesting on each of the first, second, and third anniversaries of the grant date.
Restricted stock units – Each restricted stock unit represents the right to receive one ordinary share upon vesting. The restricted stock units generally vest as to one-third of the restricted stock units on each of the first, second, and third anniversaries of the grant date. Restricted stock units granted after May 2020 accrue dividend equivalents that will be paid out in ordinary shares if and when the award vests. Earlier restricted stock units entitled the holder to receive cash dividends on the units when dividends were declared.
Performance share units – Each performance share unit represents the right to receive one ordinary share at the end of a three-year performance period if specified performance goals are achieved. For the performance share units granted in 2020 for the performance period 2020-2022, the Compensation Committee retained adjusted EPS and ROIC as the performance goals.

The Compensation Committee selected these metrics because of their relationship to driving long-term shareholder value and alignment with business strategy. The Compensation Committee believes that, while long-term interests should be reflected in performance-based awards, the targets should also be

realistic and attainable. As such, the Compensation Committee set performance metrics for the 2020-2022 PSUs based on adjusted EPS and ROIC targets aligned with the growth objectives as defined within Pentair's strategic plan, including payouts at Threshold levels that would pay out only at minimum Adjusted EPS growth and minimum ROIC performance. Payouts would be based on achievement of the threshold, target and maximum level of performance set for each metric, with payouts scaled for performance between those levels.

In connection with equity awards to the Named Executive Officers who joined the Company in the spring of 2020 shortly following the emergence of the pandemic, the Committee determined to grant the value of the long-term incentive awards to these executive officers entirely in the form of restricted stock units that cliff vest after three years. The Committee determined that this form of award was appropriate in light of concerns that our stock price at the time did not reflect a more normalized fair value of our shares, which could lead to a windfall for the new executives, and it was unclear whether the performance metrics under our PSUs reflected meaningful objectives in light of pandemic.

The numbers of shares subject to the stock options, restricted stock units and performance share units and the values of the awards granted to the Named Executive Officers in 2020 are reflected under "Executive Compensation Tables — Grants of Plan-Based Awards in 2020."

The value of restricted stock units that vested for each Named Executive Officer in 2020 and the value of options exercised by each Named Executive Officer in 2020 are shown in the table under "Executive Compensation Tables — 2020 Option Exercises and Stock Vested Table."

Achievement under 2018-2020 PSUs

The Committee granted stock settled performance share units to the Named Executive Officers in 2018, relating to the three-year performance period 2018-2020. Each performance unit entitled the holder to one ordinary share following the end of the three-year performance period if we achieved specific company performance goals on metrics established by the Committee. The performance goals selected by the Committee for the 2018-2020 performance period were

Adjusted EPS and Average ROE, weighted 75% and 25% respectively. Payouts would be scaled for performance between threshold and target and between target and maximum.

The Compensation Committee reviewed and approved the performance share units for the 2018-2020 performance period as reflected in the chart below.

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The payout levels for 2018-2020 PSUs were as follows:

Financial Performance Measure
Weight
Threshold
(50%
Payout)



Target
(100% payout)


Maximum
(200% payout)


Actual
Actual
Weighted
Payout
(% of Target)
Adjusted EPS*   75%   $2.25   $2.58   $3.35   $2.50   66.0%
ROE**   25%   14.0%   16.0%   19.0%   18.9%   49.1%
2018-2020 Total Weighted Performance   100%                   115.1%
*
Adjusted EPS is determined based on full year 2020 adjusted earnings per diluted share from continuing operations.

**
ROE is the 3-year average of adjusted net income from continuing operations for the years ended 2018 to 2020 divided by the 3-year average shareholders' equity (excluding foreign currency translation adjustment) for 2018 to 2020.

PERQUISITES AND OTHER PERSONAL BENEFITS

The Compensation Committee periodically reviews market data provided by Aon Consulting to assess the levels of perquisites and other personal benefits provided to the Named Executive Officers.

We provide our executive officers with limited perquisites in the form of occasional personal use of

event tickets when such tickets are not being used for business purposes and a limited financial counseling benefit, for which, in both cases, we have no aggregate incremental cost, as well as one executive physical per year for preventative care.

STOCK OWNERSHIP GUIDELINES

The Compensation Committee has established stock ownership guidelines for the Named Executive Officers and other executives to motivate them to become significant shareholders, to further encourage long-term performance and growth, and to align their interests with those of shareholders generally. The Compensation Committee monitors executives' compliance with these guidelines and periodically reviews the definition of "stock ownership" to reflect the practices of companies in the Comparator Group. "Stock ownership" currently includes ordinary shares

owned by the executives both directly and indirectly, the pro-rated portion of unvested restricted stock units, and shares held in our employee stock ownership plan or our employee stock purchase plan. Stock ownership does not include performance share units until they are earned at the end of the performance period. The Compensation Committee determined that, over a period of five years from appointment, certain executives should accumulate and hold ordinary shares equal to specified multiples of their base salaries.

Executive Level
Stock Ownership Guidelines
(as a multiple of salary)
Chief Executive Officer   6.0x base salary
Executive Vice President and Chief Financial Officer
Executive Vice President and Chief Operating Officer
  3.0x base salary
Executive Vice President and Chief Human Resources Officer   2.5x base salary
Executive Vice President and General Counsel
Executive Vice President and Chief Growth Officer
Executive Vice President and Chief Technology Officer
Executive Vice President and Chief Supply Chain Officer
   
Segment Presidents    
Other key executives   2.0x base salary

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COMPENSATION DISCUSSION AND ANALYSIS

STOCK OWNERSHIP FOR THE CONTINUING NAMED EXECUTIVE OFFICERS AS OF DECEMBER 31, 2020

Name


Share
Ownership


12/31/20
Market Value
($)(1)



Ownership
Guideline
($)





Meets
Guideline


John L. Stauch

  338,705   17,981,848   5,820,000     Yes  

Robert P. Fishman

  7,544   400,511   1,950,000     No (2)

Karla C. Robertson

  25,413   1,349,176   1,350,000     No (2)

Mario R. D'Ovidio

  3,772   200,255   1,500,000     No (2)

John H. Jacko

  22,354   1,186,774   1,275,000     No (2)
(1)
The amounts in this column were calculated by multiplying the closing market price of our ordinary shares on the last trading day of our most recently completed fiscal year of $53.09 by the number of shares owned.

(2)
Per the terms of our stock ownership guidelines, an executive has five years from the date of his or her appointment to meet his or her ownership guideline. Each of Mr. Fishman, Ms. Robertson, Mr. D'Ovidio and Mr. Jacko joined the Company within the last five years; thus none of these Named Executive Officers was required to have met the applicable ownership guidelines as of December 31, 2020.

(3)
Messrs. Borin and Frykman each ceased serving in their respective executive positions with the Company effective June 6, 2020.

GRAPHIC

EQUITY HOLDING POLICY

We maintain an equity holding policy under which executive officers subject to our stock ownership guidelines are required to retain 100% of the net number of shares acquired under equity awards until

the ownership guidelines are satisfied. This policy may be waived to the extent its application to any individual executive officer would cause undue hardship to the executive officer.

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COMPENSATION DISCUSSION AND ANALYSIS

CLAWBACK POLICY

We maintain a clawback policy under which certain incentive compensation earned by an executive officer may be recouped if the executive officer's fraud or intentional misconduct is a significant contributing factor to a restatement of financial results. The incentive compensation subject to this policy includes

cash bonuses, cash performance units and equity-based awards subject to performance-based vesting conditions to the extent the compensation was paid, credited or earned during the year after the financial results were first disclosed.

POLICY PROHIBITING HEDGING AND PLEDGING

We maintain a policy that prohibits our executive officers, directors and other employees from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Pentair securities. Prohibited transactions include transactions in puts, calls, cashless collars, options (other than options issued by Pentair to acquire Pentair securities), short sales and similar rights and obligations. This restriction applies to all Pentair

securities owned directly or indirectly by the individual, including Pentair securities owned by their family members and their respective designees. Nothing in our policy precludes an executive officer, director or employee or their designees from engaging in general portfolio diversification or investing in broad-based index funds. In addition, our executive officers, directors and other employees and their family members are also prohibited from holding Pentair securities in a margin account or otherwise pledging Pentair securities as collateral for a loan.

RETIREMENT AND OTHER BENEFITS

Eligible Named Executive Officers and other executives and employees participate in a number of retirement and similar plans that are described below under "Executive Compensation Tables — 2020 Pension Benefits." We also provide other benefits

such as medical, dental, life insurance and disability coverage to substantially all of our full-time U.S. salaried employees, including the Named Executive Officers. We aim to provide employee and executive benefits that are competitive in the market.

Medical, Dental, Life Insurance and Disability Coverage

Employee benefits such as medical, dental, life insurance and disability coverage are available to all full-time U.S.-based employees through our active employee plans. In addition to these benefits for active employees, we provide post-retirement medical, dental and life insurance coverage to certain retirees in accordance with the legacy company plans that

applied at the time the employees were hired. We provide up to one and a half times annual salary (up to $1,000,000) in life insurance, and up to $15,000 per month in long-term disability coverage. The value of these benefits is not required to be included in the Summary Compensation Table because they are made available to all full-time U.S. employees.

Other Paid Time-Off Benefits

We also provide vacation and other paid holidays to all employees, including the Named Executive Officers, which we have determined to be comparable to those provided at other large companies.

Deferred Compensation

We sponsor a non-qualified deferred compensation program, called the Sidekick Plan, for our U.S. executives within or above the pay grade that has a

midpoint annual salary of $197,300 in 2020. This plan permits executives to defer up to 25% of their base salary and 75% of their annual cash incentive

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compensation. Executives also may defer receipt of restricted stock units or performance share units. We normally make contributions to the Sidekick Plan on behalf of participants with respect to each participant's contributions from that portion of his or her income above the maximum imposed by the U.S. Internal Revenue Code of 1986, as amended (the "Code"), which was $285,000 in 2020, but below the Sidekick Plan's compensation limit of $700,000. Please see the narrative following the "Nonqualified Deferred Compensation Table" below for additional information on our contributions.

Participants in the Sidekick Plan may invest their account balances in a number of possible mutual fund investments. Fidelity Investments Institutional Services Co. provides these investment vehicles for

participants and handles all allocation and accounting services for the Sidekick Plan. We do not guarantee or subsidize any investment earnings under the Sidekick Plan, and our ordinary shares are not a permitted investment choice under the Sidekick Plan, although deferred restricted stock units and performance share units are automatically invested in shares.

Amounts deferred, if any, under the Sidekick Plan by the Named Executive Officers are included in the "Salary" and "Non-Equity Incentive Plan Compensation" columns in the Summary Compensation Table. Our contributions allocated to the Named Executive Officers under the Sidekick Plan are included in the "All Other Compensation" column in the Summary Compensation Table.

SEVERANCE AND CHANGE IN CONTROL BENEFITS

We provide severance and change in control benefits to selected executives to facilitate smooth executive transitions, attract and retain executive talent, and provide for continuity of management upon a threatened or completed change in control. We believe that the security that these benefits provide helps our key executives to remain focused on our ongoing business and reduces the key executives' concerns about future employment. We also believe that these benefits allow our executives to consider the best interests of our company and shareholders due to the economic security afforded by these benefits. We currently provide the following severance and change in control benefits to our executive officers:

We have agreements with our key corporate executives and other key leaders, including all Named Executive Officers, that provide for contingent benefits upon a change in control or upon a covered termination following a change in control. The benefits under these agreements are designed to provide economic protection to key executives following a change in control of our company so that our executives can remain focused on our business without undue personal concern.
If after a change in control of the Company, an eligible employee is terminated by the Company other than by reason of death, disability or cause (as defined in the KEESA), then all options, restricted stock and restricted stock units that are unvested become fully vested (e.g., double trigger vesting); all performance awards (other than annual

    incentive awards) are paid in full based on performance at the better of target or trend; and all annual incentive awards are paid based on full satisfaction of the performance goals (i.e., target). In addition, if an employee's employment is involuntarily terminated for a reason other than cause, death or disability, or if an employee who is a Board-appointed corporate officer voluntarily terminates employment for good reason, then the employee's outstanding awards will be eligible for continued or accelerated vesting as described below under "Executive Compensation Tables — Potential Payments Upon Termination Or Change In Control."

Our new executive officer severance plan provides our executive officers with severance benefits in the event of certain types of terminations of employment (other than a termination following a change in control). The severance benefits are aligned with market practices and are designed to attract and retain executive talent. The plan is described in more detail below.

We explain these benefits more fully below under "Executive Compensation Tables — Potential Payments Upon Termination Or Change In Control."

We have adopted a policy of not including single-trigger change in control vesting and excise tax gross-ups in new KEESAs with our executive officers. In addition, during 2018, all outstanding legacy KEESAs were replaced with the new form of KEESA adopted by Pentair for any new hires since 2015.

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COMPENSATION DISCUSSION AND ANALYSIS

These KEESAs replaced single-trigger vesting of cash and equity awards upon a change in control with double-trigger vesting and also eliminated excise tax gross-ups. Accordingly, none of our KEESAs with our Named Executive Officers include single-trigger vesting or excise tax gross-ups.

In connection with Mr. Frykman's termination of employment when his position was eliminated in connection with our new organizational structure, we

entered into a separation and release agreement with Mr. Frykman. The decision to eliminate Mr. Frykman's position and his associated transition out of the Company occurred prior to the adoption of our new executive officer severance plan. As a result, the terms of Mr. Frykman's payments and benefits were determined specific to his circumstances and the Company's desire to ensure a smooth transition of his responsibilities.

IMPACT OF TAX CONSIDERATIONS

Section 162(m) of the Code limits the amount we may deduct for compensation paid in any year to certain executive officers ("covered employees") to $1,000,000. Section 162(m) exempted qualifying performance-based compensation with respect to

taxable years beginning on or before December 31, 2017 and payable pursuant to binding written agreements in effect on November 2, 2017. Since that time all compensation to covered employees has been subject to the $1,000,000 deduction limit.

COMPENSATION CONSULTANT

The Compensation Committee engages an external compensation consultant to advise the Compensation Committee in implementing and overseeing appropriate compensation programs and policies. The Compensation Committee regularly evaluates the performance of its external compensation consultant and periodically conducts a competitive bid process for the role.

During 2020, the Compensation Committee continued to retain Aon Consulting, an external compensation consultant, to advise the Compensation Committee on executive compensation issues. See "Corporate Governance Matters — Committees of the Board — Compensation Committee." The Compensation Committee evaluated the independence of Aon Consulting and the individual representatives of Aon Consulting who served as the Compensation Committee's consultants based on the factors required by the NYSE. Aon Consulting is a wholly-owned subsidiary of Aon plc, which provides insurance brokerage and benefit consulting services to us. For the year ended December 31, 2020, we paid Aon plc approximately $1,350,000 for insurance brokerage and benefit consulting services and Aon Consulting approximately $192,000 for executive compensation consulting for the Compensation Committee. The decision to engage Aon plc for insurance brokerage and benefit consulting services was made by management and was not approved by the Board or

the Compensation Committee. The Compensation Committee concluded, based on the evaluation described above, that the services performed by Aon plc with respect to insurance and benefits administration did not raise a conflict of interest or impair Aon Consulting's ability to provide independent advice to the Compensation Committee regarding executive compensation matters and that Aon Consulting was independent for purposes of the Compensation Committee.

At the direction of the Compensation Committee, Aon Consulting advises the Compensation Committee in implementing and overseeing appropriate compensation programs and policies. As part of this process, Aon Consulting provides the Compensation Committee with comparative market data based on analyses of the practices of the Comparator Group defined above under "Comparative Framework" and relevant survey data. The comparative market data that Aon Consulting provides address the structure of the compensation programs maintained by the Comparator Group companies as well as the amount of compensation they provide. Aon Consulting provides guidance on industry best practices and advises the Compensation Committee in determining appropriate ranges for base salaries, annual incentive compensation and long-term incentive compensation for each senior executive position.

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COMPENSATION DISCUSSION AND ANALYSIS

EVALUATING THE CHIEF EXECUTIVE OFFICER'S PERFORMANCE

In 2020, the independent directors on the Board and the Compensation Committee employed a formal process to evaluate Mr. Stauch's performance. Each independent director provided an evaluation of Mr. Stauch's performance. The Board Chairman and the Compensation Committee Chair discussed the evaluation results with the Compensation Committee and independent directors, and the independent directors reviewed and discussed the evaluation

results and Mr. Stauch's compensation in executive session of the Board of Directors meeting. The Board Chairman and the Compensation Committee Chair finalized Mr. Stauch's performance assessment and reviewed the assessment results and commentary with Mr. Stauch. The Compensation Committee determined Mr. Stauch's compensation and performance targets for the following year.

EQUITY AWARD PRACTICES

The Compensation Committee reviews and approves equity awards to executive officers at regular meetings throughout the year. The Compensation Committee has also given the Chief Executive Officer discretion to grant equity awards to non-executive officers as required throughout the year (other than normal annual grants, which are granted by the Compensation Committee) within the guidelines of our equity incentive plan, up to a maximum grant date value of $2,000,000 total for 2020. The Chief Executive Officer provides a summary report to the Compensation Committee disclosing the aggregate awards granted by

the Chief Executive Officer during the preceding fiscal year. Awards granted outside of our regularly scheduled Compensation Committee meetings are generally effective on the last day of the month following the month in which they were approved. If the last day of such month is a day on which the NYSE is not open for trading, then the grant date will be the first day of the following month on which the NYSE is open for trading. All options are granted with an exercise price equal to fair market value based on the closing share price on the effective day of grant.

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EXECUTIVE COMPENSATION TABLES

SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation paid to or earned by each of the Named Executive Officers for the years ended December 31, 2018, 2019, and 2020.

(a)

(b)
(c)

(d)
(e)

(f)
(g)
(h)
(i)
(j)
                 
Name and
Principal Position



Year
Salary
($)(1)




Bonus
($)


Stock
Awards
($)(2)






Option
Awards
($)(3)



Non-Equity
Incentive
Plan
Compensation
($)(1)(4)





Change in
Pension
Value and
Non-Qualified
Deferred
Compensation
Earnings
($)(5)








All Other
Compensation
($)(6)



Total
Compensation
($)
John L. Stauch     2020   970,038       3,374,966     1,124,995   1,234,888   2,598,053   39,104   9,342,044
President and Chief     2019   950,037       3,150,018     1,050,003     1,226,295   37,507   6,413,860
Executive Officer     2018   852,618       2,850,014     949,997   1,292,799   344,162   41,474   6,331,064
Robert P. Fishman     2020   455,510       1,499,989       482,333     109,046   2,546,878
Executive Vice President,
Chief Financial Officer and
Chief Accounting Officer
                                         
Karla C. Robertson     2020   540,021       543,764     181,249   429,665     54,544   1,749,243
Executive Vice President,     2019   525,020       543,774     181,248       27,217   1,277,259
General Counsel, Secretary and     2018   500,000     350,000   506,251     168,751   465,345     13,750   2,004,097
Chief Social Responsibility Officer                                          
Mario R. D'Ovidio     2020   397,743       750,014       429,824     12,501   1,590,082
Executive Vice President and
President, Consumer Solutions
                                         
John H. Jacko     2020   510,020       506,257     168,753   351,688   214,357   18,157   1,769,232
Executive Vice President and
Chief Growth Officer
                                         
Mark C. Borin     2020   290,584       1,050,021     350,002     940,928   30,833   2,662,368
Former Executive Vice President     2019   565,022       1,031,235     343,749     695,529   35,250   2,670,785
and Chief Financial Officer     2018   524,789     300,000   899,997     300,002   520,920   25,752   39,300   2,610,760
Karl R. Frykman     2020   760,939       1,218,757     406,246   634,949   386,395   35,250   3,442,536
Former Executive Vice President     2019   665,026       1,218,762     406,253     357,093   35,250   2,682,384
and Chief Operating Officer     2018   599,864       1,199,996     400,005   695,364   171,208   39,300   3,105,737
(1)
Amounts shown in the "Salary" and "Non-Equity Incentive Plan Compensation" columns are not reduced by any deferrals under our nonqualified deferred compensation plans. The amounts shown in the "Salary "column for Mr. Borin and Mr. Frykman include a payment for unused vacation in the amounts of $37,923 and $95,913, respectively.

(2)
The amounts in column (e) represent the aggregate grant date fair value, computed in accordance with ASC 718, of restricted stock units and performance share units granted during each year. The values attributable to the 2020 grants of restricted stock units were as follows: Mr. Stauch – $1,124,989; Mr. Fishman – $1,499,989; Ms. Robertson – $181,270; Mr. D'Ovidio – $750,014; Mr. Jacko – $168,737; Mr. Borin – $350,007 and Mr. Frykman – $406,268. The values attributable to the 2020 grants of performance share units were based on the probable outcome of the performance conditions at the time of grant, and were as follows: Mr. Stauch – $2,249,977; Ms. Robertson – $362,494; Mr. Jacko – $337,520; Mr. Borin – $700,014; and Mr. Frykman – $812,489. The maximum values of the 2020 grants of performance share units at the time of grant assuming that the highest level of performance conditions are attained, are as follows: Mr. Stauch – $4,499,954; Ms. Robertson – $724,988; Mr. Jacko – $675,040; Mr. Borin – $1,400,028 and Mr. Frykman – $1,624,978. Mr. Fishman and Mr. D'Ovidio did not receive any performance share units in fiscal year 2020. Mr. Borin's equity awards were forfeited in connection with his resignation on June 6, 2020. Additional assumptions used in the calculation of the amounts in column (e) are included in footnote 13 to our audited financial statements for the year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on February 16, 2021.

(3)
The amounts in column (f) represent the aggregate grant date fair value, computed in accordance with ASC 718, of stock options granted during each year. Assumptions used in the calculation of these amounts are included in footnote 13 to our audited financial statements for the year December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on February 16.

(4)
The amounts in column (g) reflect cash awards to the named individuals pursuant to awards under the MIP as determined by the Compensation Committee.

(5)
The amounts in column (h) reflect the net increase, if any, in the actuarial present value of the Named Executive Officer's accumulated benefits under all of our pension plans determined using interest rate and mortality rate assumptions consistent with those used in our financial statements. Messrs. Stauch, Jacko, Borin and Frykman participated in the Pentair, Inc. Supplemental Executive Retirement Plan ("SERP"). Mr. Fishman, Ms. Robertson and Mr. D'Ovidio did not participate in the SERP.

(6)
The table below shows the components of column (i) for 2020, which include perquisites and other personal benefits, and the Company contributions under the Sidekick Plan, the Pentair, Inc. Retirement Savings and Stock Incentive Plan (the "RSIP") and the Employee Stock Purchase and Bonus Plan. The Named Executive Officers also receive perquisites in the form of occasional personal use of event tickets when

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EXECUTIVE COMPENSATION TABLES

    such tickets are not being used for business purposes and a limited financial counseling benefit, for which, in both cases, we have no aggregate incremental cost.

   
(A)

(B)

(C)

(D)  
       
Name




Other Perquisites
and Personal
Benefits
($)(a)








Contributions under
Defined Contribution
Plans
($)(b)








Matches under the
Employee Stock
Purchase Plan
($)






Total All Other
Compensation
($)
 
John L. Stauch     1,600     35,250     2,254     39,104  
Robert P. Fishman     100,582     8,464         109,046  
Karla C. Robertson     19,294     35,250         54,544  
Mario R. D'Ovidio         12,501         12,501  
John H. Jacko     4,657     13,500         18,157  
Mark C. Borin         30,833         30,833  
Karl R. Frykman         35,250         35,250  
(a)
The amount shown in column (A) consists of relocation assistance in the amount of $84,598 and a related tax gross-up in the amount of $13,298 for Mr. Fishman and annual executive physicals for Messrs. Stauch, Fishman and Jacko and Ms. Robertson.

(b)
The amount shown in column (B) for each individual reflects amounts contributed by us to the RSIP and the Sidekick Plan during 2020. In the case of the Sidekick Plan, the amounts contributed by us during 2020 relate to salary deferrals in 2019.

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EXECUTIVE COMPENSATION TABLES

GRANTS OF PLAN-BASED AWARDS IN 2020

         


Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(2)






Estimated Future Payouts
Under Equity Incentive Plan
Awards(3)



               
                       
(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

(m)  
                       
Name


Grant
Date






Compensation
Committee
Approval
Date(1)