DEF 14A 1 d815760ddef14a.htm DEF 14A DEF 14A
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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.        )

Filed by the Registrant  

Filed by a Party other than the Registrant  

Check the appropriate box:

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to § 240.14a-12

JOHNSON CONTROLS INTERNATIONAL PUBLIC LIMITED COMPANY

 

 

(Name of Registrant as Specified In Its Charter)

 

 

 

 

LOGO

 

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LOGO

Notice of Annual General Meeting of Shareholders

 

 

LOGO

Date and Time

3:00 pm, local time,

March 4, 2020

    

 

 

LOGO

Place

The Merrion Hotel,

24 Upper Merrion Street,

Dublin 2, Ireland

 

    

 

 

LOGO

Record Date

January 2, 2020

     

NOTICE IS HEREBY GIVEN that the 2020 Annual General Meeting of Shareholders of Johnson Controls International plc will be held on March 4, 2020 at The Merrion Hotel, 24 Upper Merrion Street, Dublin 2, Ireland at 3:00 pm, local time for the following purposes:

Ordinary Business

 

1.

By separate resolutions, to elect each of the following individuals as Directors for a period of one year, expiring at the end of the Company’s Annual General Meeting of Shareholders in 2020:

 

(a)  Jean Blackwell

  

(b)  Pierre Cohade

  

(c)   Michael E. Daniels

(d)  Juan Pablo del Valle Perochena

  

(e)  W. Roy Dunbar

  

(f) Gretchen R. Haggerty

(g)  Simone Menne

  

(h)  George R. Oliver

  

(i)  Jürgen Tinggren

(j)  Mark Vergnano

  

(k)   R. David Yost

  

(l)  John D. Young

 

2.

To ratify the appointment of PricewaterhouseCoopers LLP as the independent auditors of the Company and to authorize the Audit Committee of the Board of Directors to set the auditors’ remuneration.

Special Business

 

3.

To authorize the Company and/or any subsidiary of the Company to make market purchases of Company shares.

 

4.

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

 

5.

To approve, in a non-binding advisory vote, the compensation of the named executive officers.

 

6.

To approve the Directors’ authority to allot shares up to approximately 33% of issued share capital.

 

7.

To approve the waiver of statutory pre-emption rights with respect to up to 5% of issued share capital (special resolution).

 

8.

To act on such other business as may properly come before the meeting or any adjournment thereof.

This notice of Annual General Meeting and proxy statement and the enclosed proxy card are first being sent on or about January 17, 2020 to each holder of record of the Company’s ordinary shares at the close of business on January 2, 2020. The record date for the entitlement to vote at the Annual General Meeting is January 2, 2020 and only registered shareholders of record on such date are entitled to notice of, and to attend and vote at, the Annual General Meeting and any adjournment or postponement thereof. During the meeting, management will also present the Company’s Irish Statutory Accounts for the fiscal year ended September 30, 2019. Whether or not you plan to attend the meeting, please complete, sign, date and return the enclosed proxy card to ensure that your shares are represented at the meeting. Shareholders of record who attend the meeting may vote their shares personally, even though they have sent in proxies. In addition to the above resolutions, the

 


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business of the Annual General Meeting shall include, prior to the proposal of the above resolutions, the consideration of the Company’s statutory financial statements and the report of the Directors and of the statutory auditors and a review by the shareholders of the Company’s affairs.

This proxy statement and our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 and our Irish Statutory Accounts are available to shareholders at www.proxyvote.com and are also available in the Investor Relations section of our website at www.johnsoncontrols.com.

 

By Order of the Board of Directors,

 

 

LOGO

John Donofrio
Executive Vice President and General Counsel

January 17, 2020

PLEASE PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD. THE PROXY IS REVOCABLE AND IT WILL NOT BE USED IF YOU: GIVE WRITTEN NOTICE OF REVOCATION TO THE PROXY PRIOR TO THE VOTE TO BE TAKEN AT THE MEETING; SUBMIT A LATER-DATED PROXY; OR ATTEND AND VOTE PERSONALLY AT THE MEETING.

ANY SHAREHOLDER ENTITLED TO ATTEND AND VOTE AT THE MEETING MAY APPOINT ONE OR MORE PROXIES USING THE ENCLOSED PROXY CARD (OR THE FORM IN SECTION 184 OF THE COMPANIES ACT 2014) TO ATTEND, SPEAK AND VOTE ON THAT SHAREHOLDER’S BEHALF. THE PROXY NEED NOT BE A SHAREHOLDER. PROXIES MAY BE APPOINTED VIA THE INTERNET OR PHONE IN THE MANNER SET OUT IN THE ENCLOSED PROXY CARD. ALTERNATIVELY THEY MAY BE APPOINTED BY DEPOSITING THE ENCLOSED PROXY CARD (OR OTHER VALID SIGNED INSTRUMENT OF PROXY) WITH JOHNSON CONTROLS INTERNATIONAL PLC C/O BROADRIDGE, 51 MERCEDES WAY, EDGEWOOD, NY 11717 BY 5:00 P.M., EASTERN STANDARD TIME, ON MARCH 3, 2020 (WHICH WILL THEN BE FORWARDED TO JOHNSON CONTROLS INTERNATIONAL PLC’S REGISTERED ADDRESS ELECTRONICALLY) OR WITH JOHNSON CONTROLS INTERNATIONAL PLC, ONE ALBERT QUAY, CORK, IRELAND BY 5:00 P.M. LOCAL TIME ON MARCH 3, 2020. IF YOU WISH TO APPOINT A PERSON OTHER THAN THE INDIVIDUAL SPECIFIED IN THE ENCLOSED PROXY CARD, PLEASE CONTACT OUR COMPANY SECRETARY AND ALSO NOTE THAT YOUR NOMINATED PROXY MUST ATTEND THE MEETING IN PERSON IN ORDER FOR YOUR VOTES TO BE CAST.

 


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TABLE OF CONTENTS

 

Proxy Statement Summary

     1  

Agenda Items

     5  

Proposal Number One – Election of Directors

     5  

Proposal Number Two – Appointment of Auditors and Authority to Set Remuneration

     11  

Audit and Non-Audit Fees

     11  

Audit Committee Report

     12  

Proposal Number Three – Authorization to Make Market Purchases of Company Shares

     14  

Proposal Number Four – Determine the Price Range at which the Company can Re-Allot Treasury Shares

     15  

Proposal Number Five – Advisory Vote on Executive Compensation

     16  

Proposal Number Six – Authorization for Directors to Allot Company Shares

     17  

Proposal Number Seven – Waiver of Statutory Pre-Emption Rights

     18  

Governance of the Company

     19  

Compensation of Non-Employee Directors

     34  

Committees of the Board

     35  

Compensation Discussion & Analysis

     37  

Executive Compensation Tables

     59  

Summary Compensation Table

     59  

Grants of Plan-Based Awards Table

     61  

Outstanding Equity Awards Table

     63  

Option Exercise and Stock Vesting Table

     65  

Non-Qualified Deferred Compensation Table

     67  

Potential Payments upon Termination and Change-in-Control

     68  

CEO Pay Ratio

     71  

The Annual General Meeting Questions and Answers

     72  

Annex I Non-GAAP Reconciliations

     81  

Unless we have indicated otherwise in this proxy statement, references to the “Company,” “Johnson Controls,” “we,” “us,” “our” and similar terms refer to Johnson Controls International plc and its consolidated subsidiaries.

 

2020 Notice and Proxy Statement        i


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PROXY SUMMARY

This proxy summary is intended to provide a broad overview of our 2019 performance, corporate governance and compensation highlights. As this is only a summary, we encourage you to read the entire Proxy Statement for more information prior to voting.

Annual General Meeting of Shareholders

 

 

LOGO

Date and Time

3:00 pm, local time,

March 4, 2020

    

 

 

LOGO

Place

The Merrion Hotel,

24 Upper Merrion Street,

Dublin 2, Ireland

 

    

 

 

LOGO

Record Date

January 2, 2020

     

Admission. All shareholders invited to attend, registration will occur on day of meeting

Meeting Agenda and Voting Matters

 

       
  Proposal          Board’s Voting
Recommendation
   Page
Reference

No. 1

  

Election of Directors

  

FOR

(each nominee)

  

p. 5

No. 2

  

Ratify Appointment of Independent Auditors and Authorize Audit Committee to set auditors’ remuneration

  

FOR

(both 2(a) and 2(b))

  

p. 11

No. 3

  

Authorize market purchases of Company shares by the Company and/or any subsidiary

  

FOR

  

p. 14

No. 4

  

Determine the price range to re-allot treasury shares

  

FOR

  

p. 15

No. 5

  

Advisory Vote to Approve Executive Compensation

  

FOR

  

p. 16

No. 6

  

Approve the allotment of up to 33% of issued share capital

  

FOR

  

p. 17

No. 7

  

Approve the waiver of statutory pre-emption rights

  

FOR

  

p. 18

2019 Performance Highlights

 

è

Financial Results — Delivered on Commitments to Shareholders

 

Organic Sales

Growth of 5%

   

Adjusted EPS

from continuing

operations of

$1.96, up 23%

from prior year

 

   

Adjusted free

cash flow of

$1.7 billion,

representing a 99%

conversion rate

   

Adjusted EBIT

Margin

Expansion of

60bps

   

Synergy and

Productivity

Savings of

$196 million

During fiscal year 2019, our total shareholder return increased 28.9% compared to 4.3% for the S&P 500 and 1.4% for the S&P 500 Industrials Index as we continued our transformation and made significant progress in advancing our strategic initiatives and growth agenda, implementing operational improvements, improving the employee experience, and delivering financial commitments.

* See Annex I to this Proxy Statement for a reconciliation of organic sales growth, adjusted EPS from continuing operations, adjusted free cash flow, free cash flow conversion and adjusted EBIT margin to our results for the most directly comparable financial measures as reported under generally accepted accounting principles in the United States.

 

2020 Notice and Proxy Statement        1


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Proxy Summary  ›  2019 Performance Highlights

 

 

è

Portfolio Transformation — Sale of Power Solutions Business

 

 

On April 30, 2019, the Company completed the sale of its Power Solutions business for a purchase price of $13.2 billion. The net cash proceeds after tax and transaction-related expenses were $11.6 billion. The sale transformed the Company into a “pure play” buildings company, positioning it to be a leader in the evolution of smart buildings, infrastructure and cities.

 

è

Capital Deployment — Significant Reduction in Debt and Shares Outstanding

 

 

During fiscal year 2019, we repurchased approximately 155 million shares for approximately $6 billion, lowering our weighted average share count by more than 6.1%.

 

 

Primarily as a result of the deployment of proceeds from the Power Solutions sale, we reduced debt by $3.7 billion.

 

è

Key Leadership Appointments — Leveraging Both Internal and External Talent to Adapt to the Rapidly Changing Nature of our Business

 

 

In September 2018, Visal Leng was named Vice President and President, Building Solutions, APAC. Mr. Leng is a seasoned leader and is instrumental in driving the Company’s growth platform across Asia Pacific to position Johnson Controls as a leader in smart and sustainable solutions for its customers.

 

 

In July 2019, Jeff Williams was named Vice President and President, Global Products, Building Technologies & Solutions. Jeff has an established track record in his 35 years of experience with Johnson Controls. He most recently served as Vice President and President, Building Solutions, Europe, Middle East, Africa and Latin America (EMEALA) where he led sustained growth and improved margins across the region.

 

 

In September 2019, Tomas Brannemo was named Vice President and President, Building Solutions Europe, Middle East, Africa, and Latin America (EMEALA), succeeding Mr. Williams. Mr. Brannemo brings to Johnson Controls a wealth of experience in strategy, sales and manufacturing and is a seasoned leader with strong business acumen and a growth mindset.

 

 

In October 2019, Michael Ellis was named Executive Vice President and Chief Customer & Digital Officer. In this newly created role, Mr. Ellis will oversee the Company’s digital strategy, innovation and execution, working closely with customers to drive new growth and value opportunities across the globe.

 

 

In December 2019, Ganesh Ramaswamy was named Vice President and President, Global Services and Transformation. In this newly created role, Mr. Ramaswamy will lead the Company’s global services business of approximately $6.3 billion. He will also drive the Company’s transformation by improving consistency of fundamentals across the Company’s global direct channels, leverage infrastructure and work closely with regional leaders to execute strategic priorities.

 

è

Sustainability and Corporate Responsibility Highlights

 

 

At the UN Climate Action Summit in September 2019, Johnson Controls made three additional global commitments including the Three Percent Club for Energy Efficiency, the Cool Coalition and the EP100 Cooling Challenge. These commitments expand on our existing work with the World Resources Institute and Sustainable Energy for All with a focus on building efficiency and highly efficient cooling solutions that reduce the impact to the environment.

 

 

In December 2019, we entered into two of the first sustainable improvement loans in the U.S. and the industrial sector with the execution of our new $2.5 billion Five-Year Senior Revolving Credit Facility and our $500 million 364 Day Senior Revolving Credit Facility. These facilities include a sustainability-linked pricing mechanism that reduces interest rates applicable to the facilities in connection with our sustainability performance, including reductions in our greenhouse gas intensity and improvements in our safety record through a reduction in our total recordable incident rate.

 

 

Johnson Controls achieved two significant sustainability milestones in 2019 with respect to its legacy Johnson Controls operations by reducing greenhouse gas intensity by one-half while doubling the energy productivity of these operations over a 16 year period.

 

 

Johnson Controls, along with its project partners, won the Digie Award for “Most Intelligent Building — Corporate Headquarters” for its groundbreaking work on Bee’ah’s new headquarters in the United Arab Emirates. The award recognizes extraordinary examples of buildings, projects and communities that best demonstrate smart, connected, high performance intelligent building concepts throughout the world.

 

2        Johnson Controls International plc


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Proxy Summary  ›  Our Director Nominees

 

Our Director Nominees

 

11 of 12

Directors are independent

   

25% of

Directors are

Women

   

50% of

Directors are

ethnically or

racially diverse

or non-US

citizens

 

   

50% of

Directors have

CEO experience

   

4 years average

tenure

   

50% of

Directors

joined after

September

2016 merger

We are asking you to vote FOR all the director nominees listed below. All current directors attended at least 75% of the Board and committee meetings on which he or she sits. Detailed information regarding these individuals, along with all other Board nominees, is set forth under Proposal Number One. Summary information is set forth below.

 

           
                    Current Committee Membership
  Nominee   Age  

Director

Since

 

Principal Occupation

  Independent   AC   CC   EC   GC
       

Jean Blackwell

 

65

 

2018

 

Retired Executive Vice President & Chief Financial Officer of Cummins Inc.

 

   

 

 

 

         

   

 

       

Pierre Cohade

 

58

 

2018

 

Former Chief Executive Officer of Triangle Tyre Co. Ltd.

 

 

   

 

   

 

   

 

       

Michael E. Daniels

 

65

 

2010

 

Retired Senior Vice President of Global Technology at IBM

 

   

 

 

Chair

 

   

 

       

Juan Pablo del Valle Perochena

 

47

 

2016

 

Chairman of Orbia Advance Corporation, S.A.B. de C.V.

 

   

 

   

 

 

 

Chair

       

W. Roy Dunbar

 

58

 

2017

 

Retired CEO and Chairman Network Solutions

 

   

 

 

   

 

   

 

       

Gretchen R. Haggerty

 

64

 

2018

 

Retired Executive Vice President & Chief Financial Officer of United States Steel Corporation

 

 

   

 

   

 

   

 

       

Simone Menne

 

59

 

2018

 

Former Chief Financial Officer, Boehringer Ingelheim

 

 

   

 

   

 

   

 

       

George R. Oliver

 

59

 

2012

 

Chairman and Chief Executive Officer of Johnson Controls

   

 

   

 

   

 

 

   

 

       

Jürgen Tinggren*

 

61

 

2014

 

Retired Chief Executive Officer and Director of Schindler Group

 

 

Chair

   

 

 

   

 

       

Mark Vergnano

 

61

 

2016

 

President, Chief Executive Officer and Director, The Chemours Company

 

   

 

 

   

 

   

 

       

R. David Yost

 

72

 

2009

 

Retired Chief Executive Officer of AmerisourceBergen

 

   

 

   

 

   

 

 

       

John D. Young

 

55

 

2018

 

Chief Business Officer,
Pfizer Inc.

 

   

 

   

 

   

 

 

 

AC = Audit Committee

CC = Compensation Committee

EC = Executive Committee

GC = Governance Committee

 

 

*

Independent Lead Director

 

2020 Notice and Proxy Statement        3


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Proxy Summary  ›  The Nominees to our Board of Directors

 

Non-Binding Advisory Vote on Executive Compensation

Proposal Number Five is our annual advisory vote on the Company’s executive compensation philosophy and program. Detailed information regarding these matters is included under the heading “Compensation Discussion & Analysis,” and we urge you to read it in its entirety. Our compensation philosophy and structure for executive officers remains dedicated to the concept of paying for performance and continues to be heavily weighted with performance-based awards.

 

4        Johnson Controls International plc


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AGENDA ITEMS

PROPOSAL NUMBER ONE

ELECTION OF DIRECTORS

Upon the recommendation of the Governance Committee, the Board has nominated for election at the Annual General Meeting a slate of 12 nominees, all of whom currently serve on our Board. Biographical information regarding each of the nominees is set forth below. We are not aware of any reason why any of the nominees will not be able to serve if elected. The term of office for members of the Board of Directors commences upon election and terminates upon completion of the first Annual General Meeting of Shareholders following election.

 

LOGO   

Jean Blackwell, Age 65

 

Director Since: June 2018

Independent: Yes

Committee: Compensation

Other Public Directorships:

•  Celanese Corporation

•  Ingevity Corporation

Ms. Blackwell served as Chief Executive Officer of Cummins Foundation and Executive Vice President, Corporate Responsibility, of Cummins Inc., a global power leader that designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products, from March 2008 until her retirement in March 2013. She previously served as Executive Vice President and Chief Financial Officer from 2003 to 2008, Vice President, Cummins Business Services from 2001 to 2003, Vice President, Human Resources from 1998 to 2001, and Vice President and General Counsel from 1997 to 1998 of Cummins Inc. Prior thereto, Ms. Blackwell was a partner at the Indianapolis law firm of Bose McKinney & Evans LLP from 1984 to 1991. She has also served in state government, including as Executive Director of the Indiana State Lottery Commission and State of Indiana Budget Director. Ms. Blackwell serves as a Director of Celanese Corporation, a global technology and specialty materials company, and Ingevity Corporation, a leading global manufacturer of specialty chemicals and high performance carbon materials. Ms. Blackwell previously served as a Director of Essendant Inc., a leading national wholesale distributor of business products, from 2007 to 2018 and Phoenix Companies Inc., a life insurance company, from 2004 to 2009.

Skills and Qualifications

Extensive experience as a business leader, including serving as the Chief Financial Officer of Cummins Inc. Deep financial acumen as CFO and senior finance leader in engine-related industry. Experience serving on the board of directors of multiple international companies. Significant knowledge of the global marketplace gained from her business experience and background. Extensive experience with ESG topics through service as CEO of Cummins Foundation and Executive Vice President of Corporate Responsibility for Cummins Inc. Experience leading global teams.

LOGO   

Pierre Cohade, Age 58

 

Director Since: December 2018

Independent: Yes

Committee: Audit

Other Public Directorships:

•  CEAT Ltd.

•  Acorn International Inc.

Mr. Cohade served as the Chief Executive Officer of Triangle Tyre, China’s largest private tire manufacturer from 2015 to 2016. From 2013 to 2015, Mr. Cohade was a Senior Advisor at ChinaVest, Wells Fargo’s investment banking affiliate in China. During 2012, he served as an independent consultant for various private equity concerns. Prior thereto he served as the President, Asia Pacific, of The Goodyear Tire & Rubber Company from 2004 to 2011. From 2003 to 2004, Mr. Cohade served as the Division Executive Vice President of the Global Water and Beverage division of Danone SA. From 1985 to 2003, Mr. Cohade served in roles of increasing responsibility at Eastman Kodak Co., ultimately serving as the Chairman of Kodak’s Europe, Africa, Middle East and Russia Region. Mr. Cohade serves as a Director of CEAT Ltd. (one of India’s leading tire manufacturers), Acorn International Inc., (a leading marketing and branding company in China focused on content creation, distribution, and product sales through digital media), and Deutsche Bank China. Mr. Cohade is currently the Chairman of IMA in China, a leading peer group forum for CEOs and senior executives located in China, and is an independent advisor to companies on China, strategy and operations.

Skills and Qualifications

Extensive experience as a business leader in a number of industries. Experience leading large business units at The Goodyear Tire & Rubber Company, Danone SA, and Eastman Kodak Co. Significant experience in a number of senior global positions, with extensive experience and expertise in China. Deep experience in the consumer products industry. Experience in overseeing manufacturing and operations in China at The Goodyear Tire & Rubber Company and Triangle Tyre. Experience leading global teams.

 

 

2020 Notice and Proxy Statement        5


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Agenda Items  ›  Proposal Number One

 

LOGO   

Michael E. Daniels, Age 65

 

Director Since: March 2010

Independent: Yes

Committees: Compensation, Executive

Other Public Directorships:

•  Thomson Reuters

•  SS&C Technologies, Inc.

 

Prior to his retirement in March 2013, Mr. Daniels was the Senior Vice President and Group Executive of IBM Services, a business and IT services company with operations in more than 160 countries around the world. In this role, Mr. Daniels had worldwide responsibility for IBM’s Global Services business operations in outsourcing services, integrated technology services, maintenance, and Global Business Services, the consulting and applications management arm of Global Services. Since he joined IBM in 1976, Mr. Daniels held a number of leadership positions in sales, marketing, and services, and was general manager of several sales and services businesses, including IBM’s Sales and Distribution operations in the United States, Canada and Latin America; its Global Services team in the Asia Pacific region; Product Support Services; Availability Services; and Systems Solutions. Mr. Daniels serves as a Director of Thomson Reuters, a provider of intelligent information for businesses, and SS&C Technologies, a provider of specialized software, software enabled-services and software as a service solutions to the financial services industry.

Skills and Qualifications

Decades of senior leadership experience at IBM. Broad and extensive global business experience in a wide range of global roles as an executive at IBM, including decades of experience in the service space. Deep understanding of critical areas of enterprise service functions and information technology, including cyber security. Experience as a senior manager of a global organization as well as international experience living and working in a variety of cultures. Experience leading global teams at IBM and in service on the compensation committee of public companies.

LOGO   

Juan Pablo del Valle

Perochena, Age 47

 

Director Since: September 2016

Independent: Yes

Committees: Governance, Executive

Other Public Directorships:

•  Orbia Advance Corporation,

   S.A.B. de C.V.

•  Elementia S.A.B.

Mr. Perochena has been the Chairman of Orbia Advance Corporation, S.A.B. de C.V., a chemical and petrochemical producer and seller and a subsidiary of Kaluz, S.A. de C.V., since April 2011. He became a member of our Board in connection with the merger of Johnson Controls, Inc. and a subsidiary of Tyco International plc in September 2016. He has been a Director of Orbia Advance Corporation, S.A.B. de C.V. since 2001, and serves as a Director of Kaluz, S.A. de C.V., and Elementia S.A. de C.V., a manufacturer and marketer of building materials in the Americas. He is a former Director of Grupo Pochteca S.A.B., a manufacturer and marketer of specialty chemicals and Grupo Lala S.A.B., a dairy products company based in Mexico.

Skills and Qualifications

Significant experience as an executive officer and board member of several Mexican companies. Deep knowledge of the manufacturing industry from his experiences at Orbia Advance Corporation, S.A.B. de C.V. Significant knowledge of the global marketplace gained from his business experience and background. Mr. del Valle Perochena’s service with Kaluz, S.A. de C.V. gives him unique insight into the construction industry and real estate development. Experience leading global teams.

 

 

6        Johnson Controls International plc


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Agenda Items  ›  Proposal Number One

 

LOGO   

W. Roy Dunbar, Age 58

 

Director Since: June 2017

Independent: Yes

Committee: Compensation

Other Public Directorships:

•  Humana, Inc.

•  SiteOne Landscape Supplies

Mr. Dunbar was Chairman of the Board of Network Solutions, a technology company and web service provider, and was the Chief Executive Officer from January 2008 until October 2009. Mr. Dunbar also served as the President of Global Technology and Operations for MasterCard Incorporated from September 2004 until January 2008. Prior to MasterCard, Mr. Dunbar worked at Eli Lilly and Company for 14 years, serving as President of Intercontinental Operations, and earlier as Chief Information Officer. He currently serves as a Director of Humana and SiteOne Landscape Supply, Inc. and previously served as a Director of Lexmark International and iGate.

Skills and Qualifications

Extensive experience leading across functional disciplines. Significant experience as a leader and director across US and international markets. Experience in global leadership and service as a director on the compensation committees of multiple companies. Career-spanning depth of experience across numerous disciplines including healthcare, information technology, payments, insurance and renewable energy.

 

LOGO   

Gretchen R. Haggerty, Age 64

 

Director Since: March 2018

Independent: Yes

Committee: Audit

Other Public Directorships:

•  Teleflex Corporation

Ms. Haggerty retired in August 2013 after a 37-year career with United States Steel Corporation, an integrated global steel producer, and its predecessor, USX Corporation, which, in addition to its steel production, also managed and supervised energy operations, principally through Marathon Oil Corporation. From March 2003 until her retirement, she served as Executive Vice President & Chief Financial Officer and also served as Chairman of the U. S. Steel & Carnegie Pension Fund and its Investment Committee. Earlier, she served in various financial executive positions at U. S. Steel and USX, beginning in November 1991 when she became Vice President & Treasurer. Ms. Haggerty is currently a Director Teleflex Incorporated, a global provider of medical technology products, and is a former Director of USG Corporation, a leading manufacturer of building materials.

Skills and Qualifications

Decades of senior leadership experience at United States Steel Corporation and USX Corporation. Deep financial acumen as CFO and senior finance leader in steel and energy industries. Experience serving on the board of directors of multiple international companies. Significant knowledge of the global marketplace gained from her business experience and background. Experience leading global teams.

 

 

2020 Notice and Proxy Statement        7


Table of Contents

Agenda Items  ›  Proposal Number One

 

LOGO   

Simone Menne, Age 59

 

Director Since: March 2018

Independent: Yes

Committee: Audit

Other Public Directorships:

•  Bayerische Motoren Werke AG

•  Deutsche Post DHL Group

Ms. Menne served as Chief Financial Officer at Boehringer Ingelheim GmbH, Germany’s second largest pharmaceutical company, from September 2016 to December 2017. She previously served as the Chief Financial Officer at Deutsche Lufthansa AG (“Lufthansa”) from January 2016 to August 2016 and as a member of its Executive Board from July 2012 to August 2016. She also served as Chief Officer of Finances and Aviation Services at Lufthansa from July 2012 to January 2016. Prior thereto she served in a number of roles of increasing responsibility at Lufthansa from 1989 to 2012. She currently serves on the Supervisory Boards of Bayerische Motoren Werke AG and Deutsche Post DHL Group. She also serves on the Börsensachverständigenkommission (Exchange Experts Commission, BSK) and on the Supervisory Board of Russell Reynolds Associates, a global search and leadership advisory firm.

Skills and Qualifications

Decades of senior leadership experience at Lufthansa and Boehringer Ingelheim. Experience serving on the supervisory boards of multiple international companies. Deep financial acumen as CFO and senior finance leader in transportation and pharmaceutical industries. Significant knowledge of the global marketplace gained from her business experience and background. Experience leading global teams.

 

LOGO   

George R. Oliver, Age 59

 

Director Since: September 2012

Independent: No

Committee: Executive

Other Public Directorships:

•  Raytheon Company

Mr. Oliver became our Chairman and Chief Executive Officer in September 2017. He previously served as our President and Chief Operating Officer following the completion of the merger. Prior to that, Mr. Oliver was Tyco’s Chief Executive Officer, a position he held since September 2012. He joined Tyco in July 2006, and served as President of a number of operating segments from 2007 through 2011. Before joining Tyco, he served in operational leadership roles of increasing responsibility at several General Electric divisions. Mr. Oliver also serves as a Director on the board of Raytheon Company, a company specializing in cybersecurity and defense throughout the world, is a Trustee of Worcester Polytechnic Institute, his alma mater, and serves on the Pro Football Hall Board of Trustees.

Skills and Qualifications

Extensive leadership experience over several decades as an executive at Tyco (now the Company) and GE. Nearly a decade of experience with Tyco, first as president of several of its business units and then as CEO. Experience as a director, CEO and a senior manager of global organizations. Experience leading global teams at Johnson Controls, Tyco and GE. Mr. Oliver offers valuable insights and perspective on the day to day management of the Company’s affairs.

 

 

8        Johnson Controls International plc


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Agenda Items  ›  Proposal Number One

 

LOGO   

Jürgen Tinggren, Age 61

 

Director Since: March 2014

Independent: Yes

Committees: Audit, Executive

Other Public Directorships:

•  N.V. Bekaert S.A.

•  OpenText Corporation

 

Mr. Tinggren joined our Board in March 2014. He was the Chief Executive Officer of the Schindler Group, a global provider of elevators, escalators and related services, through December 2013 and was a member of the Board of Directors of Schindler from March 2014 to 2016. He joined the Group Executive Committee of Schindler in April 1997, initially with responsibility for Europe and thereafter for the Asia/Pacific region and the Technology and Strategic Procurement. In 2007, he was appointed Chief Executive Officer and President of the Group Executive Committee of the Schindler Group. Mr. Tinggren also serves on the Board of Directors of N.V. Bekaert S.A., a Belgian based supplier of steel cord products for tire reinforcement and other specialty steel wire products, and OpenText Corporation, a Canadian based developer and seller of enterprise information management software. From 2011 to 2014 he was a Director of Schenker-Winkler Holding and from 2014 to 2018 he was a Director of the Sika AG Group.

Skills and Qualifications

Extensive global business experience as the CEO and a senior leader of Schindler. Experience as senior executive and director of European based organizations, deep understanding of international markets. Deep understanding of building services, industrial products and installation and service businesses. Deep financial understanding as CEO of Schindler. Significant experience with mergers and acquisitions. Experience leading global teams as CEO of Schindler.

LOGO   

Mark Vergnano, Age 61

 

Director Since: September 2016

Independent: Yes

Committee: Compensation

Other Public Directorships:

•  The Chemours Company

 

Mr. Vergnano has been the President, Chief Executive Officer and a director of the Chemours Company, a titanium technologies, fluoroproducts, and chemical solutions producer, since July 2015. He joined our Board in September 2016 upon the completion of the merger with Johnson Controls, Inc. Previously, Mr. Vergnano served as Executive Vice President, E. I. du Pont de Nemours and Company from 2009 to June 2015. While at DuPont, he served as Group Vice President—Safety & Protection from 2006 to 2009, Vice President and General Manager—DuPont Surfaces and Building Innovations from 2005 to 2006, and Vice President and General Manager—DuPont Nonwovens from 2003 to 2005.

Mr. Vergnano joined DuPont in 1980 as a process engineer and held a variety of manufacturing, technical and management assignments in DuPont’s global organization. Mr. Vergnano also serves on the Board of Directors for the National Safety Council, and is the Chairman of the American Chemistry Council.

Skills and Qualifications

Extensive global business experience as an executive and CEO of Chemours and DuPont. Experience as senior executive of a multinational company. Deep understanding of the operations, global sales and marketing in the chemical manufacturing industry. Deep financial understanding as CEO of Chemours. Experience leading global teams as CEO of Chemours and in managing a variety of business units at DuPont.

 

 

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Agenda Items  ›  Proposal Number One

 

LOGO   

R. David Yost, Age 72

 

Director Since: March 2009

Independent: Yes

Committee: Governance

Other Public Directorships:

•  Marsh & McLennan Companies, Inc.

•  Bank of America

 

Mr. Yost served as Director and Chief Executive Officer of AmerisourceBergen, a comprehensive pharmaceutical services provider, from August 2001 to June 2011 when he retired. He was Chairman and Chief Executive Officer of AmeriSource Health Corporation from May 1997 to August 2001, and President and Chief Executive Officer of AmeriSource from May 1997 to December 2000. Mr. Yost also held a variety of other positions with AmeriSource Health Corporation and its predecessors from 1974 to 1997. Mr. Yost also serves as a Director of Marsh & McLennan Companies, Inc. and Bank of America, and is a member of the Board of the United States Air Force Academy Endowment, and serves on its Executive Committee.

Skills and Qualifications

Extensive leadership experience gained as the CEO and a director of AmerisourceBergen. Significant corporate governance experience serving as a director of multiple public companies. Exposure to complex risk management concepts gained as a director of Marsh & McLennan and Bank of America. Experience leading global teams as CEO of AmerisourceBergen.

 

LOGO   

John D. Young, Age 55

 

Director Since: December 2017

Independent: Yes

Committee: Governance

Other Public Directorships:

None

 

Mr. Young has served as Chief Business Officer of Pfizer Inc. since January 2019. From January 2018 to December 2018, he served as Group President of Pfizer Innovative Health, and from June 2016 to January 2018 he served as Group President, Pfizer Essential Health. He was Group President, Global Established Pharma Business for Pfizer from January 2014 until June 2016 and President and General Manager, Pfizer Primary Care from June 2012 until December 2013. He also served as Pfizer’s Primary Care Business Unit’s Regional President for Europe and Canada from 2009 until June 2012 and U.K. Country Manager from 2007 until 2009.

Skills and Qualifications

Extensive experience as a business leader with 30 years’ experience with Pfizer. Experience leading large business units at Pfizer. Significant experience in a number of senior global positions at Pfizer. Specialized expertise in developing healthcare solutions in a variety of medical disciplines. Experience leading global teams.

 

 

Election of each Director requires the affirmative vote of a majority of the votes properly cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy. Each Director’s election is the subject of a separate resolution and shareholders are entitled to one vote per share for each separate Director election resolution.

The Board unanimously recommends that shareholders vote FOR the election of each nominee for Director to serve until the completion of the next Annual General Meeting.

 

10        Johnson Controls International plc


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Agenda Items  ›  Proposal Number Two

 

PROPOSAL NUMBER TWO

APPOINTMENT OF AUDITORS AND AUTHORITY TO SET REMUNERATION

PricewaterhouseCoopers LLP (“PwC”) served as our independent auditors for the fiscal year ended September 30, 2019. The Audit Committee has selected and appointed PwC to audit our financial statements for the fiscal year ending September 30, 2020. The Board, upon the recommendation of the Audit Committee, is asking our shareholders to ratify the appointment of PwC as our independent auditors for the fiscal year ending September 30, 2020 and to authorize the Audit Committee of the Board of Directors to set the independent auditors’ remuneration. Although approval is not required by our Memorandum and Articles of Association or otherwise, the Board is submitting the selection of PwC to our shareholders for ratification because we value our shareholders’ views on the Company’s independent auditors. If the appointment of PwC is not approved by shareholders, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the appointment is approved, the Audit Committee, in its discretion, may select a different independent auditor at any time during the year if it determines that such a change would be in the best interests of the Company and our shareholders.

Representatives of PwC will attend the Annual General Meeting and will have an opportunity to make a statement if they wish. They will also be available to answer questions at the meeting.

For independent auditor fee information, information on our pre-approval policy of audit and non-audit services, and the Audit Committee Report, please see below.

The ratification of the appointment of the independent auditors and the authorization for the Audit Committee to set the remuneration for the independent auditors requires the affirmative vote of a majority of the votes properly cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy.

The Audit Committee and the Board unanimously recommend a vote FOR these proposals.

Audit and Non-Audit Fees

Aggregate fees for professional services rendered to the Company by its independent auditors as of and for the two most recent fiscal years are set forth below. The aggregate fees include fees billed or reasonably expected to be billed for the applicable fiscal year. Fees for fiscal year 2019 include fees billed or reasonably expected to be billed by PwC.

 

     
     

Fiscal Year

2019

    

Fiscal Year

2018

 

 

  

 

(in millions

  

 

(in millions

Audit Fees

  

$

22.8

  

$

26.9

 

Audit-Related Fees

  

 

1.1

 

  

 

2.7

 

Tax Fees

  

 

4.8

 

  

 

6.1

 

All Other Fees

  

 

0.1

 

  

 

1.1

 

Total

  

$

28.8

 

  

$

          36.8

 

Audit Fees for the fiscal year ended September 30, 2019 were for professional services rendered by PwC and include fees for services performed to comply with auditing standards of the PCAOB (United States), including the annual audit of our consolidated financial statements including reviews of the interim financial statements contained in Johnson Controls’ Quarterly Reports on Form 10-Q, issuance of consents and the audit of our internal control over financial reporting. This category also includes fees for audits provided in connection with statutory filings or services that generally only the principal auditor reasonably can provide to a client, such as assistance with and review of documents filed with the SEC.

Audit-Related Fees for the fiscal year ended September 30, 2019 were for services rendered by PwC and include fees associated with assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. This category includes fees related to assistance in financial due diligence related to mergers, acquisitions, and divestitures, carve-outs associated with divestitures and spin-off transactions, consultations concerning

 

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Agenda Items  ›  Proposal Number Two

 

financial accounting and reporting standards, issuance of comfort letters associated with debt offerings, general assistance with implementation of SEC and Sarbanes-Oxley Act requirements, audits of pension and other employee benefit plans, and audit services not required by statute or regulation.

Tax Fees for the fiscal year ended September 30, 2019 were for services rendered by PwC and primarily include fees associated with tax audits, tax compliance, tax consulting, transfer pricing, and tax planning. This category also includes tax planning on mergers and acquisitions and restructurings, as well as other services related to tax disclosure and filing requirements.

All Other Fees for the fiscal years ended September 30, 2019 were for services rendered by PwC and primarily include fees associated with information technology consulting, training seminars related to accounting, finance and tax matters, and other advisory services.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

In March 2004, the Audit Committee adopted a pre-approval policy that provides guidelines for the audit, audit-related, tax and other permissible non-audit services that may be provided by the independent auditors. The policy identifies the guiding principles that must be considered by the Audit Committee in approving services to ensure that the auditors’ independence is not impaired. The policy provides that the Corporate Controller will support the Audit Committee by providing a list of proposed services to the Committee, monitoring the services and fees pre-approved by the Committee, providing periodic reports to the Audit Committee with respect to pre-approved services, and ensuring compliance with the policy.

Under the policy, the Audit Committee annually pre-approves the audit fee and terms of the engagement, as set forth in the engagement letter. This approval includes approval of a specified list of audit, audit-related and tax services. Any service not included in the specified list of services must be submitted to the Audit Committee for pre-approval. No service may extend for more than 12 months, unless the Audit Committee specifically provides for a different period. The independent auditor may not begin work on any engagement without confirmation of Audit Committee pre-approval from the Corporate Controller or his or her delegate.

In accordance with the policy, the chair of the Audit Committee has been delegated the authority by the Committee to pre-approve the engagement of the independent auditors for a specific service when the entire Committee is unable to do so. All such pre-approvals must be reported to the Audit Committee at the next Committee meeting.

Audit Committee Report

The Audit Committee of the Board is composed of four Directors, each of whom the Board has determined meets the independence and experience requirements of the NYSE and the SEC. The Audit Committee operates under a charter approved by the Board, which is posted on our website. As more fully described in its charter, the Audit Committee oversees Johnson Controls’ financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process. Management assures that the Company develops and maintains adequate financial controls and procedures, and monitors compliance with these processes. Johnson Controls’ independent auditors are responsible for performing an audit in accordance with auditing standards generally accepted in the United States to obtain reasonable assurance that Johnson Controls’ consolidated financial statements are free from material misstatement and expressing an opinion on the conformity of the financial statements with accounting principles generally accepted in the United States. The internal auditors are responsible to the Audit Committee and the Board for testing the integrity of the financial accounting and reporting control systems and such other matters as the Audit Committee and Board determine.

In this context, the Audit Committee has reviewed the U.S. GAAP consolidated financial statements for the fiscal year ended September 30, 2019, and has met and held discussions with management, the internal auditors and the independent auditors concerning these financial statements, as well as the report of management and the report of the independent registered public accounting firm regarding the Company’s internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act. Management represented to the Committee that Johnson Controls’ U.S. GAAP consolidated financial statements were prepared in accordance with U.S. GAAP. In addition, the Committee has discussed with the independent auditors the auditors’ independence from Johnson Controls and its management as required under Public Company Accounting Oversight Board Rule 3526, Communication with Audit Committees Concerning Independence, and the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard AU Section 380 (Communication with Audit Committees) and Rule 2-07 of SEC Regulation S-X.

 

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Agenda Items  ›  Proposal Number Two

 

In addition, the Audit Committee has received the written disclosures and the letter from the independent auditor required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with the Audit Committee concerning independence. Based upon the Committee’s review and discussions referred to above, the Committee recommended that the Board include Johnson Controls’ audited consolidated financial statements in Johnson Controls’ Annual Report on Form 10-K for the fiscal year ended September 30, 2019 filed with the Securities and Exchange Commission and that such report be included in Johnson Controls’ annual report to shareholders for the fiscal year ended September 30, 2019.

Submitted by the Audit Committee,

Jürgen Tinggren, Chair

Pierre Cohade

Gretchen R. Haggerty

Simone Menne

 

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Agenda Items  ›  Proposal Number Three

 

PROPOSAL NUMBER THREE

AUTHORIZATION TO MAKE MARKET PURCHASES OF COMPANY SHARES

We have historically used open-market share purchases as a means of returning cash to shareholders and managing the size of our base of outstanding shares. These are longstanding objectives that management believes are important to continue.

Under Irish law, neither the Company nor any subsidiary of the Company may make market purchases or overseas market purchases of the Company’s shares without shareholder approval. Accordingly, shareholders are being asked to authorize the Company, or any of its subsidiaries, to make market purchases and overseas market purchases of up to 10% of the Company’s issued shares. This authorization expires after eighteen months unless renewed; accordingly, we expect to propose renewal of this authorization at subsequent Annual General Meetings.

Such purchases would be made only at price levels which the Directors considered to be in the best interests of the shareholders generally, after taking into account the Company’s overall financial position. The Company currently expects to effect repurchases under our existing share repurchase authorization as redemptions pursuant to Article 3(d) of our Articles of Association. Whether or not this proposed resolution is passed, the Company will retain its ability to effect repurchases as redemptions pursuant to its Articles of Association, although subsidiaries of the Company will not be able to make market purchases or overseas market purchases of the Company’s shares unless the resolution is adopted.

In order for the Company or any of its subsidiaries to make overseas market purchases of the Company’s ordinary shares, such shares must be purchased on a market recognized for the purposes of the Companies Act 2014. The New York Stock Exchange, on which the Company’s ordinary shares are listed, is specified as a recognized stock exchange for this purpose by Irish law. The general authority, if approved by our shareholders, will become effective from the date of passing of the authorizing resolution.

Ordinary Resolution

The text of the resolution in respect of Proposal 3 is as follows:

RESOLVED, that the Company and any subsidiary of the Company is hereby generally authorized to make market purchases and overseas market purchases of ordinary shares in the Company (“shares”) on such terms and conditions and in such manner as the Board of Directors of the Company may determine from time to time but subject to the provisions of the Companies Act 2014 and to the following provisions:

(a) The maximum number of shares authorized to be acquired by the Company and/or any subsidiary of the Company pursuant to this resolution shall not exceed, in the aggregate, 76,382,000 ordinary shares of US$0.01 each (which represents slightly less than 10% of the Company’s issued ordinary shares).

(b) The maximum price to be paid for any ordinary share shall be an amount equal to 110% of the closing price on the New York Stock Exchange for the ordinary shares on the trading day preceding the day on which the relevant share is purchased by the Company or the relevant subsidiary of the Company, and the minimum price to be paid for any ordinary share shall be the nominal value of such share.

(c) This general authority will be effective from the date of passing of this resolution and will expire on the earlier of the date of the Annual General Meeting in 2021 or eighteen months from the date of the passing of this resolution, unless previously varied, revoked or renewed by ordinary resolution in accordance with the provisions of section 1074 of the Companies Act 2014. The Company or any such subsidiary may, before such expiry, enter into a contract for the purchase of shares which would or might be executed wholly or partly after such expiry and may complete any such contract as if the authority conferred hereby had not expired.

The authorization for the Company and/or any its subsidiaries to make market purchases and overseas market purchases of Company shares requires the affirmative vote of a majority of the votes properly cast (in person or by proxy) at the Annual General Meeting.

The Board unanimously recommends that shareholders vote FOR this proposal.

 

14        Johnson Controls International plc


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Agenda Items  ›  Proposal Number Four

 

PROPOSAL NUMBER FOUR

DETERMINE THE PRICE RANGE AT WHICH THE COMPANY CAN RE-ALLOT TREASURY SHARES

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

Under Irish law, our shareholders must authorize the price range at which we may re-allot any shares held in treasury (including by way of re-allotment off-market). In this proposal, that price range is expressed as a minimum and maximum percentage of the prevailing market price (as defined below). Under Irish law, this authorization expires after eighteen months unless renewed; accordingly, we expect to propose the renewal of this authorization at subsequent Annual General Meetings.

The authority being sought from shareholders provides that the minimum and maximum prices at which an ordinary share held in treasury may be re-alloted are 95% and 120%, respectively, of the average closing price per ordinary share of the Company, as reported by the New York Stock Exchange, for the thirty (30) trading days immediately preceding the proposed date of re-allotment, save that the minimum price for a re-allotment to satisfy an obligation under an employee share plan is the par value of a share. Any re-allotment of treasury shares will be at price levels that the Board considers in the best interests of our shareholders.

Special Resolution

The text of the resolution in respect of Proposal 4 (which is proposed as a special resolution) is as follows:

RESOLVED, that the re-allotment price range at which any treasury shares held by the Company may be re-alloted shall be as follows:

(a) the maximum price at which such treasury share may be re-alloted shall be an amount equal to 120% of the “market price”; and

(b) the minimum price at which a treasury share may be re-alloted shall be the nominal value of the share where such a share is required to satisfy an obligation under an employee share plan operated by the Company or, in all other cases, an amount equal to 95% of the “market price”; and

(c) for the purposes of this resolution, the “market price” shall mean the average closing price per ordinary share of the Company, as reported by the New York Stock Exchange, for the thirty (30) trading days immediately preceding the proposed date of re-allotment.

FURTHER RESOLVED, that this authority to re-allot treasury shares shall expire on the earlier of the date of the Annual General Meeting of the Company held in 2021 or eighteen months after the date of the passing of this resolution unless previously varied or renewed in accordance with the provisions of section 109 and/or 1078 (as applicable) of the Companies Act 2014 (and/or any corresponding provision of any amended or replacement legislation) and is without prejudice or limitation to any other authority of the Company to re-allot treasury shares on-market.

The authorization of the price range at which the Company may re-allot any shares held in treasury requires the affirmative vote of at least 75% of the votes properly cast (in person or by proxy) at the Annual General Meeting.

The Board unanimously recommends that shareholders vote FOR this proposal.

 

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Agenda Items  ›  Proposal Number Five

 

PROPOSAL NUMBER FIVE

ADVISORY VOTE ON EXECUTIVE COMPENSATION

The Board recognizes that providing shareholders with an advisory vote on executive compensation can produce useful information on investor sentiment with regard to the Company’s executive compensation programs. As a result, this proposal provides shareholders with the opportunity to cast an advisory vote on the compensation of our executive management team, as described in the section of this proxy statement entitled “Compensation Discussion & Analysis,” and endorse or not endorse our fiscal 2019 executive compensation philosophy, programs and policies and the compensation paid to the Named Executive Officers.

The advisory vote on executive compensation is non-binding, meaning that our Board will not be obligated to take any compensation actions or to adjust our executive compensation programs or policies, as a result of the vote. Notwithstanding the advisory nature of the vote, the resolution will be considered passed with the affirmative vote of a majority of the votes properly cast by the holders of ordinary shares represented at the Annual General Meeting in person or by proxy.

Although the vote is non-binding, our Board and the Compensation Committee will review the voting results. To the extent there is a significant negative vote, we would communicate directly with shareholders to better understand the concerns that influenced the vote. The Board and the Compensation Committee would consider constructive feedback obtained through this process in making future decisions about executive compensation programs.

Advisory Non-Binding Resolution

The text of the resolution, which if thought fit, will be passed as an advisory non-binding resolution at the Annual General Meeting, is as follows:

RESOLVED, that shareholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion & Analysis section of this proxy statement.

The Board unanimously recommends that shareholders vote FOR this proposal.

 

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Agenda Items  ›  Proposal Number Six

 

PROPOSAL NUMBER SIX

AUTHORIZATION FOR DIRECTORS TO ALLOT COMPANY SHARES

Under Irish law, directors of an Irish public limited company must have authority from its shareholders to issue any shares, including shares which are part of the company’s authorized but unissued share capital. The Company’s current authorization, approved by shareholders at our 2019 Annual General Meeting, is to issue up to 33% of the authorized but unissued share capital of the Company, which authorization will expire on March 4, 2020 — the date of the 2020 Annual General Meeting. We are presenting this proposal to renew the Board’s authority to issue authorized but unissued shares on the terms set forth below. If this proposal is not passed, the Company will have a limited ability to issue new ordinary shares.

It is customary practice in Ireland to seek shareholder authority to issue shares up to an aggregate nominal value of up to 33% of the aggregate nominal value of the company’s issued share capital and for such authority to be renewed each year. Therefore, in accordance with customary practice in Ireland, we are seeking approval to issue up to a maximum of 33% of our issued ordinary capital for a period expiring on the earlier of the date of the Company’s Annual General Meeting in 2021 or September 4, 2021, unless otherwise varied, revoked or renewed. The Directors of the Company expect to propose renewal of this authorization at subsequent Annual General Meetings.

Granting the Board this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish market practice. This authority is fundamental to our business and enables us to issue shares, including, if applicable, in connection with funding acquisitions and raising capital. We are not asking you to approve an increase in our authorized share capital or to approve a specific issuance of shares. Instead, approval of this proposal will only grant the Board the authority to issue shares that are already authorized under our Articles of Association upon the terms below. In addition, because we are a NYSE-listed company, our shareholders continue to benefit from the protections afforded to them under the rules and regulations of the NYSE and SEC, including those rules that limit our ability to issue shares in specified circumstances. This authorization is required as a matter of Irish law and is not otherwise required for other companies listed on the NYSE with whom we compete. Accordingly, approval of this resolution would merely place us on par with other NYSE-listed companies.

Ordinary Resolution

The text of the resolution in respect of Proposal 6 (which is proposed as an ordinary resolution) is as follows:

RESOLVED that the directors be and are hereby generally and unconditionally authorized to exercise all powers to allot and issue relevant securities (within the meaning of section 1021 of the Companies Act 2014) up to an aggregate nominal value of US $2,520,000 (being equivalent to approximately 33% of the aggregate nominal value of the issued share capital of the Company as at the last practicable date prior to the issue of the notice of this meeting) and the authority conferred by this resolution shall expire on the earlier of the date of the Company’s Annual General Meeting in 2021 or September 4, 2021, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the directors may allot relevant securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”

As required under Irish law, the resolution in respect of this proposal is an ordinary resolution that requires the affirmative vote of a majority of the votes properly cast (in person or by proxy) at the Annual General Meeting.

The Board unanimously recommends that shareholders vote FOR this proposal.

 

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Agenda Items  ›  Proposal Number Seven

 

PROPOSAL NUMBER SEVEN

WAIVER OF STATUTORY PRE-EMPTION RIGHTS

Under Irish law, unless otherwise authorized, when an Irish public limited company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders of the company on a pro-rata basis (commonly referred to as the pre-emption right). Our current authorization, approved by shareholders at our 2019 Annual General Meeting, will expire on March 4, 2020, the date of the 2020 Annual General Meeting. We are therefore proposing to renew the Board’s authority to opt-out of the pre-emption right on the terms set forth below.

It is customary practice in Ireland to seek shareholder authority to opt-out of the pre-emption rights provision in the event of the issuance of shares for cash, if the issuance is limited to up to 5% of a company’s issued ordinary share capital. It is also customary practice for such authority to be renewed on an annual basis.

Therefore, in accordance with customary practice in Ireland, we are seeking this authority, pursuant to a special resolution, to authorize the directors to issue shares for cash up to a maximum of approximately 5% of the Company’s authorized share capital without applying statutory pre-emption rights for a period expiring on the earlier of the Annual General Meeting in 2021 or September 4, 2021, unless otherwise varied, renewed or revoked. We expect to propose renewal of this authorization at subsequent Annual General Meetings.

Granting the Board this authority is a routine matter for public companies incorporated in Ireland and is consistent with Irish customary practice. Similar to the authorization sought for Proposal 6, this authority is fundamental to our business and, if applicable, will facilitate our ability to fund acquisitions and otherwise raise capital. We are not asking you to approve an increase in our authorized share capital. Instead, approval of this proposal will only grant the Board the authority to issue shares in the manner already permitted under our Articles of Association upon the terms below. Without this authorization, in each case where we issue shares for cash, we would first have to offer those shares on the same or more favorable terms to all of our existing shareholders. This requirement could cause delays in the completion of acquisitions and capital raising for our business. This authorization is required as a matter of Irish law and is not otherwise required for other companies listed on the NYSE with whom we compete. Accordingly, approval of this resolution would merely place us on par with other NYSE-listed companies.

Special Resolution

The text of the resolution in respect of Proposal 7 (which is proposed as a special resolution) is as follows:

RESOLVED that the directors be and are hereby empowered pursuant to section 1023 of the Companies Act 2014 to allot equity securities (as defined in section 1023 of that Act) for cash, pursuant to the authority conferred by proposal 6 of the notice of this meeting as if sub-section (1) of section 1022 of that Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal value of US $381,000 (being equivalent to approximately 5% of the aggregate nominal value of the issued share capital of the Company as at the last practicable date prior to the issue of the notice of this meeting) and the authority conferred by this resolution shall expire on the earlier of the Company’s Annual General Meeting in 2021 or September 4, 2021, unless previously renewed, varied or revoked; provided that the Company may make an offer or agreement before the expiry of this authority, which would or might require any such securities to be allotted after this authority has expired, and in that case, the directors may allot equity securities in pursuance of any such offer or agreement as if the authority conferred hereby had not expired.”

As required under Irish law, the resolution in respect of Proposal 7 is a special resolution that requires the affirmative vote of at least 75% of the votes cast. In addition, under Irish law, the Board may only be authorized to opt-out of pre-emption rights if it is authorized to issue shares, which authority is being sought in Proposal 6.

The Board unanimously recommends that shareholders vote FOR this proposal.

 

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GOVERNANCE OF THE COMPANY

Vision and Values of Our Board

Our vision is a safe, comfortable and sustainable world. In addition to achieving financial performance objectives, our Board and management believe that we must assume a leadership position in the area of corporate governance to fulfill our vision. Our Board believes that good governance requires not only an effective set of specific practices but also a culture of responsibility throughout the company, and governance at Johnson Controls is intended to optimize both. Johnson Controls also believes that good governance ultimately depends on the quality of its leadership, and it is committed to recruiting and retaining Directors and officers of proven leadership ability and personal integrity. Our Board has adopted Corporate Governance Guidelines which provide a framework for the effective governance of Johnson Controls.

Johnson Controls’ Values: How We Seek to Conduct Ourselves

 

 

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Governance of the Company  ›  Board Mission/Responsibilities

 

Board Mission/Responsibilities

The mission of the Board is to promote the long-term value and health of Johnson Controls in the interests of the Shareholders and set an ethical “tone at the top.” All corporate authority is exercised by the Board except for those matters reserved to the shareholders. The Board has retained oversight authority — defining and overseeing the implementation of and compliance with standards of accountability and monitoring the effectiveness of management policies and decisions in an effort to ensure that the Company is managed in such a way to achieve its objectives. The Board delegates its authority to management for managing the everyday affairs of the Company. The Board requires that senior management review major actions and initiatives with the Board prior to implementation. Management, not the Board, is responsible for managing the Company.

Board Leadership

The Board’s leadership structure generally includes a combined Chairman and CEO role with a strong, independent non-executive lead director. The Board believes our overall corporate governance measures help ensure that strong, independent directors continue to effectively oversee our management and key issues related to strategy, risk and integrity; executive compensation; CEO evaluation; and succession planning. In choosing generally to combine the roles of Chairman and CEO, the Board takes into consideration the importance of in-depth, industry-specific knowledge and a thorough understanding of our business environment and risk management practices in setting agendas and leading the Board’s discussions. Combining the roles also provides a clear leadership structure for the management team and serves as a vital link between management and the Board. This allows the Board to perform its oversight role with the benefit of management’s perspective on our business strategy and all other aspects of the business. Our Board periodically reviews its determination to have a single individual act both as Chairman and CEO.

Currently, the Board operates with a designated Lead Director with a well-defined role. The Lead Director, currently Mr. Jürgen Tinggren, acts as an intermediary between the Board and senior management. Among other things, the Lead Director’s duties include:

 

 

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Mr. Tinggren is highly engaged and is routinely in direct contact with members of senior management, including the Chief Financial Officer, the General Counsel, the Corporate Controller, the Corporate Secretary, the Chief Compliance Officer, the head of Corporate Development and the head of Internal Audit, among others. He also has routine discussions with the Company’s independent auditors. Mr. Tinggren’s level of engagement allows him to have a continuous impact on the Company’s strategic and operational initiatives.

Along with the CEO, the Lead Director also hosts Board update calls on a monthly basis in the periods between Board meetings to keep the Directors current on important developments in the business as well as the status of key strategic and operational initiatives. These update calls provide Directors with the opportunity to stay current on matters impacting the Company, which facilitates more efficient and robust discussions at the regularly scheduled Board meetings.

 

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Governance of the Company  ›  Areas of Focus for the Board

 

Areas of Focus for the Board

 

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Board Oversight of Strategy

One of the Board’s primary responsibilities is overseeing management’s establishment and execution of the Company’s strategy and the associated risks. The full Board oversees strategy and strategic risk through robust and constructive engagement with management, taking into consideration our key priorities, global trends impacting our business, regulatory developments, and disruptors in our businesses. The Board’s oversight of our strategy primarily occurs through deep-dive annual reviews of the long-term strategic plans of each of our businesses. During these reviews, management provides the Board with its view of the key commercial and strategic risks faced by each business or region, and the Board provides management with feedback on whether management has identified the key risks and is taking appropriate actions to mitigate risk. In addition to the annual deep-dive strategic review, because the Company’s strategic initiatives are subject to rapidly evolving business dynamics, the Board regularly reviews key strategic initiatives throughout the year to ensure progress is being made against goals, understand where adjustments or refinements to strategy may be appropriate, and stay current on issues impacting the business.

The Board’s oversight of strategy was prominent during the portfolio review process that ultimately led to the sale of the Power Solutions business. With the ultimate goal of achieving an outcome that would promote long-term shareowner value, the Board engaged in a rigorous, thorough, and unbiased review of our Power Solutions business and its fit within the Company’s long-term strategic vision, devoting a substantial amount of time and resources to reviewing and probing the financial and strategic analyses prepared by management and external advisors.

Johnson Controls has a clear vision and growth agenda. The visions and values described above are designed to achieve our mission of helping our customers win everywhere, every day through a relentless focus on customer needs, developing and deploying leading products and technology, distributing our products and services through accessible channels, and attracting and retaining top talent. Johnson Controls plans to achieve these objectives through:

 

   

Creating Growth Platforms by developing sales excellence through building intimate customer relationships to understand customer needs and how to solve them; driving innovation to translate customer problems into business opportunities; developing advantaged solutions and enhanced business models; making it easy for customers to do business with Johnson Controls; and building an acquisition pipeline.

 

   

Driving Operational Improvements by standardizing processes and improving cost and service; being best-in-class in G&A effectiveness and efficiency; leveraging IT to increase efficiency and effectiveness; enhancing manufacturing efficiency at all levels; and improving service and installation productivity, and optimizing field infrastructure.

 

   

Building a Performance Culture by establishing a transparent, data-driven performance culture; aligning strategy, structure, people and processes to create One Team; investing in all talent, focusing on skill building and professional development, and diversity and inclusion; and driving a global commitment to wellness and sustainability.

 

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Governance of the Company  ›  Board Oversight of Talent and Succession Planning

 

Through these efforts we plan to substantially improve organizational health while creating greater shareholder value and generating 100%+ long-term free cash flow conversion.

Board Oversight of Talent and Succession Planning

Our Board oversees management succession planning and talent development. The Compensation Committee regularly reviews and discusses with management the CEO succession plan and the succession plans for key positions at the senior officer level across the Company. The Compensation Committee reviews potential internal senior management candidates with our CEO and the Executive Vice President of Human Resources, including the qualifications, experience, and development priorities for these individuals. The full Board generally discusses succession and/or talent management at each one of its regularly scheduled meetings. These discussions are led by the CEO and the Executive Vice President of Human Resources, with periodic assistance from firms with talent assessment expertise. These discussions include critical leadership competencies, talent assessment, short and long-term development potential of executives, the pool of external talent, and diversity. The Board also evaluates succession and development plans in the context of our overall business strategy and culture. Potential leaders are visible to Board members through formal presentations and informal events to allow Directors to personally assess candidates. In 2019, we followed this process when implementing succession plans for certain recent executive officer changes.

Our Board also establishes steps to address emergency CEO succession planning in extraordinary circumstances. Our emergency CEO succession planning is intended to enable our Company to respond to unexpected emergencies and minimize potential disruption or loss of continuity to our Company’s business and operations.

Board Oversight of Risk

The Board’s role in risk oversight at Johnson Controls is consistent with Johnson Controls’ leadership structure, with management having day-to-day responsibility for assessing and managing Johnson Controls’ risk exposure and the Board and its committees providing oversight in connection with those efforts, with particular focus on the most significant risks facing Johnson Controls. The Board performs its risk oversight role in several ways. Board meetings regularly include strategic overviews by the CEO that describe the most significant issues, including risks, affecting Johnson Controls. In addition, the Board is regularly provided with business updates from the leaders of Johnson Controls’ business units, and updates from the General Counsel and other functional leaders. The Board reviews the risks associated with Johnson Controls’ financial forecasts, business plan and operations. These risks are identified and managed in connection with Johnson Controls’ robust enterprise risk management (“ERM”) process. The Company’s ERM process provides the enterprise with a common framework and terminology to ensure consistency in identification, reporting and management of key risks. It is also informs the strategic planning process, and includes a formal process to identify and document the key risks to Johnson Controls perceived by a variety of stakeholders in the enterprise. The results of the ERM process are presented to the Board at least annually.

The Board has delegated to each of its committees responsibility for the oversight of specific risks that fall within the committee’s areas of responsibility. For example:

 

 

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Board Composition and Effectiveness

The Johnson Controls Board as a whole is strong in its diversity, vision, strategy and business judgment. It possesses a robust collective knowledge of management and leadership, business operations, crisis management, risk assessment, industry knowledge, accounting and finance, corporate governance and global markets.

 

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Governance of the Company  ›  Board Composition and Effectiveness

 

The culture of the Board is such that it can operate swiftly and effectively in making key decisions and facing major challenges. Board meetings are conducted in an environment of trust, open dialogue and mutual respect that encourages constructive commentary. The Board strives to be informed, proactive and vigilant in its oversight of Johnson Controls and protection of shareholder assets. Below is a summary of the key attributes of our Directors:

 

 

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Director Orientation

All new Directors participate in our director orientation program during the first few months on our Board. New Directors receive an extensive suite of onboarding materials covering director responsibilities, corporate governance practices and policies, business strategies, leadership structure, and long-term plans. They then participate in a series of meetings with management representatives from our business and functional areas to review and discuss information about the Company’s strategic plans, financial statements, and key issues, policies, and practices. Based on feedback from our Directors, we believe this onboarding approach provides new directors with a strong foundation for understanding our businesses, connects Directors with members of management with whom they will interact, and accelerates their effectiveness to engage fully in Board deliberations.

Director Education

Our Board believes that director education is key to the ability of directors to fulfill their roles and supports Board members in their continuous learning. Directors may enroll in continuing education programs at our expense on corporate governance and critical issues associated with a Director’s service. Our Board also hears regularly from management on numerous subjects, including investor relations, cash management, regulatory developments, data privacy, and cybersecurity. In addition, the Board periodically participates in site visits to our facilities. For example, in 2019:

 

   

Board members visited our Norman, Oklahoma Rooftop Center of Excellence where they received a review on the rapidly changing technology in each of our Buildings businesses;

 

   

Board members visited the Building Solutions North America (BSNA) local office in Houston, Texas to gain a deeper understanding of how the Company interacts with its customers in the field. Board members also visited a significant customer in the Houston area to observe how the Company’s products and services can improve efficiency, safety and security for our customers.

 

   

In addition to the above visits, from time to time individual Directors will visit company facilities across the globe. In 2019, several directors visited a number of our facilities in China.

 

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Governance of the Company  ›  Shareholder Engagement

 

Shareholder Engagement

In 2019, we continued our focus on regularly engaging with our shareholders. The Company reached out to holders of over 66% of our shares outstanding, and engaged with governance professionals and/or portfolio managers at investors holding 41% of our shares outstanding. During these discussions, we discussed many topics, including our executive compensation program, strategic focus as well as our corporate responsibility and sustainability efforts. Investors generally acknowledged that significant progress had been made over the past few years with respect to the Company’s compensation practices and expressed general support for the Company’s leadership and strategic direction. Further, investors highlighted the importance of engaging with them in the future on long-term corporate strategy and sustainability initiatives.

These discussions provide our Board with valuable insights into our shareholders’ views. We plan to continue to actively engage with our shareholders on a regular basis to better understand and consider their views.

Board Tenure and Refreshment

 

 

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Board Committees

To conduct its business the Board maintains three standing committees: Audit, Compensation and Governance, and each of these NYSE required committees are entirely composed of independent Directors. The Board also maintains an Executive Committee comprised of the Chairman, Lead Director and each committee chair that meets to review matters as delegated to it by the Board. All committees report on their activities to the Board.

The Lead Director may also convene “special committees” to review discrete matters that require the consideration of a Board committee, but do not fit within the mandate of any of the standing committees. Special committees report their activities to the Board.

To ensure effective discussion and decision making while at the same time having a sufficient number of independent Directors for its three standing committees, the Board is normally constituted of between ten and thirteen Directors. The minimum and maximum number of Directors is set forth in Johnson Controls’ Articles of Association.

The Governance Committee reviews the Board’s governance guidelines annually and recommends appropriate changes to the Board.

Board Meetings

The Board meets at least four times annually, and additional meetings may be called in accordance with our Articles of Association. Frequent board meetings are critical not only for timely decisions but also for Directors to be well informed about Johnson Controls’ operations and issues. One of these meetings will be scheduled in conjunction with the Annual General Meeting of shareholders and Board members are required to be in attendance at such meeting either in person or by telephone. The Lead Director and the Chair of the Board are responsible for setting meeting agendas with input from the other Directors.

Committee meetings are normally held in conjunction with Board meetings. Major committee decisions are reviewed and approved by the Board. The Board Chair and committee chairs are responsible for conducting meetings and informal consultations in a fashion that encourages informed, meaningful and probing deliberations. Presentations at Board meetings

 

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Governance of the Company  ›  Board Meetings

 

are concise and focused, and they include adequate time for discussion and decision-making. An executive session of independent Directors, chaired by the Lead Director, is held at least annually, and in practice at most Board meetings. Mr. Tinggren ensures that the executive sessions are highly interactive and include robust discussions on the Company’s strategic and operational initiatives and related risks. They also include in-depth discussions on matters such as executive performance and succession planning. These discussions are key to informing the Board’s oversight role and appropriately challenging management.

Directors receive the agenda and materials for regularly scheduled meetings in advance. Best efforts are made to make materials available as soon as one week in advance, but no later than three days in advance. When practical, the same applies to special meetings of the Board. Directors may ask for additional information from, or meetings with, senior managers at any time.

Strategic planning and succession planning sessions are held at least annually at a regular Board meeting, but such sessions often occur more frequently. Succession planning meetings focus on the development and succession of not only the CEO but also the other senior executives.

The Board’s intent is for Directors to attend all regularly scheduled Board and committee meetings. Directors are expected to use their best efforts to attend regularly scheduled Board and committee meetings in person. All independent Board members are welcome to attend any committee meeting.

The Board also participates in monthly update calls in the periods between Board meetings to keep the Directors current on important developments impacting the Company as well as the status of key strategic and operational initiatives.

The Board also makes periodic visits to our facilities to learn more about our products and customers. For example, in 2019 members of the Board visited our Norman, Oklahoma manufacturing facility and testing lab to gain a deeper understanding of how technology is developed and integrated into our HVAC products. The Board also visited one of our field offices in Houston, Texas to learn how we bring our products to market and serve our customers’ needs. The visit also included a tour of a major healthcare customer to observe how our HVAC products, fire and security systems, building management solutions and employees operate in a mission critical environment.

Board and Committee Calendars

A calendar of agenda items for the regularly scheduled Board meetings and all regularly scheduled committee meetings is prepared annually by the Chair of the Board in consultation with the Lead Director, committee chairs, and all interested Directors.

Board Communication

Management speaks on behalf of Johnson Controls, and the Board normally communicates through management with outside parties, including shareholders, business journalists, analysts, rating agencies and government regulators. In certain circumstances Directors may also meet with shareholders to discuss specific governance topics. The Board has established a process for interested parties to communicate with members of the Board, including the Lead Director. If you have any concern, question or complaint regarding our compliance with any policy or law, or would otherwise like to contact the Board, you can reach the Johnson Controls Board of Directors via email at jciboard@jci.com. Depending upon the nature of the communication and to whom it is directed, the Secretary will: (a) forward the communication to the appropriate director or directors; (b) forward the communication to the relevant department within the Company; or (c) attempt to handle the matter directly (for example, a communication dealing with a share ownership matter). Shareholders, customers, vendors, suppliers and employees can also raise concerns at www.johnsoncontrolsintegrityhelpline.com. Inquiries can be submitted anonymously and confidentially.

All inquiries are received and reviewed by the Integrity Helpline manager, who is part of the Compliance function. A report summarizing all items received resulting in cases is prepared for the Audit Committee of the Board. The Integrity Helpline manager directs cases to the applicable department (such as customer service, human resources, or in the case of accounting or control issues, forensic audit) and follows up with the assigned case owner to ensure that the cases are responded to in a timely manner. The Board also reviews non-trivial shareholder communications received by management through the Corporate Secretary’s Office or Investor Relations.

 

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Governance of the Company  ›  Board and Committee Evaluation Process

 

 

 

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Board and Committee Evaluation Process

The Governance Committee leads an annual performance evaluation of the Board and each Board committee as described below.

 

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Each Director completes a Board self-evaluation questionnaire and a separate questionnaire for each committee on which the director serves. The Board-specific questionnaire requests ratings and solicits detailed suggestions for improving Board and committee governance processes and effectiveness. The committee-specific questionnaires are tailored to the respective committees’ roles and responsibilities.

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Self-evaluation questionnaire results are compiled and summarized by the Office of the Corporate Secretary. The summaries include all specific Director comments, without attribution. Each Director receives the Board self-evaluation summary and the self-evaluation summary for each committee on which the Director serves. The Lead Director and the Chair of the Governance Committee receive all of the self-evaluation summaries and informally consult with each of the Directors.

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Committee self-evaluation results are discussed by each committee, and Board self-evaluation results are discussed by the full Board. Each committee and the Board identify areas for further consideration and opportunities for improvement, and implement plans to address those matters. The qualifications and performance of all Board members are reviewed in connection with their re-nomination to the Board.

 

 

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Directors may discuss concerns, including those related to individual performance separately with the Lead Director.

 

 

 

The Board views self-evaluation of Board and committee performance as an integral part of its commitment to continuous improvement. The Governance Committee annually reviews the evaluation process and considers ways to augment it.

Board Advisors

The Board and its committees (consistent with the provisions of their respective charters) may retain their own advisors, at the expense of Johnson Controls, as they deem necessary in order to carry out their responsibilities.

Board Compensation and Share Ownership

The Governance Committee periodically reviews the Directors’ compensation and recommends changes in the level and mix of compensation to the full Board. See the Compensation Discussion and Analysis for a detailed discussion of the Compensation Committee’s role in determining executive compensation.

To help align Board and shareholder interests, Directors are encouraged to own Johnson Controls ordinary shares or their equivalent, with the guideline set at five times the annual cash retainer. Directors are expected to attain this minimum stock ownership guideline within five years of joining the Board. Once a Director satisfies the minimum stock ownership recommendation, the Director will remain qualified, regardless of market fluctuations, under the guideline as long as the Director does not sell any stock. Mr. Oliver receives no additional compensation for service as a Director.

 

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Governance of the Company  ›  Director Independence

 

Director Independence

To maintain its objective oversight of management, the Board consists of a substantial majority of independent Directors. Our Board annually determines the independence of each Director and nominee for election as a Director based on a review of the information provided by the Directors and the executive officers, and a survey by our legal and finance departments. The Board makes these determinations under the NYSE Listed Company Manual’s independence standards and our Corporate Governance Guidelines, which are more restrictive than the NYSE independence standards. Independent Directors:

 

 

are not former officers or employees of the Johnson Controls or its subsidiaries or affiliates, nor have they served in that capacity within the last five years;

 

 

have no current or prior material relationships with Johnson Controls aside from their directorship that could affect their judgment;

 

 

have not worked for, nor have any immediate family members that have worked for, been retained by, or received anything of substantial value from Johnson Controls aside from his or her compensation as a Director;

 

 

have no immediate family member who is an officer of Johnson Controls or its subsidiaries or has any current or past material relationship with Johnson Controls;

 

 

do not work for, nor does any immediate family member work for, consult with, or otherwise provide services to, another publicly traded company on whose board of directors Johnson Controls’ CEO or other senior executive serves;

 

 

do not serve as, nor does any immediate family member serve as, an executive officer of any entity with respect to which Johnson Controls’ annual sales to, or purchases from, exceed the greater of two percent of either entity’s annual revenues for the prior fiscal year or $1,000,000.

 

 

do not serve, nor does any immediate family member serve, on either the board of directors or the compensation committee of any corporation that employs either a nominee for director or a member of the immediate family of any nominee for director; and

 

 

do not serve, nor does any immediate family member serve, as a director, trustee, executive officer or similar position of a charitable or non-profit organization with respect to which the company or its subsidiaries made charitable contributions or payments in excess of the greater of $1,000,000 or two percent of such organization’s charitable receipts in the last fiscal year.

Directors meet stringent definitions of independence and for those Directors that meet this definition, the Board will make an affirmative determination that a Director is independent. The Board has determined that all of the Director nominees, with the exception of Mr. Oliver meet these standards and are therefore independent of the Company.

Director Service

Directors are elected by an affirmative vote of an absolute majority of the votes represented (in person or by proxy) by shareholders at the Annual General Meeting. They are elected to serve for one-year terms (except in instances where a director is elected during a special meeting), ending after completion of the next succeeding Annual General Meeting. If a Director resigns or otherwise terminates his or her directorship prior to the next Annual General Meeting, the Board may appoint an interim Director until the next Annual General Meeting. Any nominee for Director who does not receive an affirmative vote of an absolute majority of votes represented (in person or by proxy) by shareholders at the Annual General Meeting is not elected to the Board.

Each Director is required to tender their resignation from the Board at the Annual General Meeting following his or her 75th birthday. The Board may, in its discretion, waive this limit in special circumstances. The rotation of committee chairs and members is considered on an annual basis to ensure diversity of Board member experience and variety of perspectives across the committees, but there is no strict committee chair rotation policy. Any changes in committee chair or member assignments are made based on committee needs, Director interests, experience and availability, and applicable regulatory and legal considerations. Moreover, the value of rotation is weighed carefully against the benefit of committee continuity and experience.

Directors are also expected to inform the Governance Committee of any significant change in their employment or professional responsibilities and are required to offer their resignation to the Board in the event of such a change. This allows for discussion with the Governance Committee to determine if it is in the mutual interest of both parties for the Director to continue on the Board.

 

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Governance of the Company  ›  Director Service

 

The Governance Committee is responsible for the review of all Directors, and where necessary will take action to recommend to shareholders the removal of a Director for performance, which requires the affirmative vote of a majority of the votes represented (in person or by proxy) at a duly called shareholder meeting.

Nomination of Directors and Board Diversity

The Governance Committee, in accordance with the Board’s governance principles, seeks to create a Board that as a whole is strong in its collective knowledge and has a diversity of skills and experience with respect to vision and strategy, management and leadership, business operations, business judgment, crisis management, risk assessment, industry knowledge, accounting and finance, corporate governance and global markets. Although the Johnson Controls Board does not have a specific policy regarding diversity, the Board takes into account the current composition and diversity of the Board (including diversity with respect to race, gender and ethnicity) and the extent to which a candidate’s particular expertise and experience will complement the expertise and experience of other Directors. The Governance Committee also considers the Board’s overall composition when considering a potential new candidate, including whether the Board has an appropriate combination of professional experience, skills, exposure to international markets, knowledge and variety of viewpoints and backgrounds in light of Johnson Controls’ current and expected future needs. In addition, the Governance Committee believes that it is desirable for new candidates to contribute to a variety of viewpoints on the Board, which may be enhanced by a mix of different professional and personal backgrounds and experiences. The Governance Committee periodically reviews these criteria and qualifications to determine any need to revise such criteria and qualifications based upon corporate governance best practices and Johnson Controls’ needs at the time of the review.

 

General criteria for
the nomination of
Director candidates
include:
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  The highest ethical standards and integrity

  A willingness to act on and be accountable for Board decisions

  An ability to provide wise, informed and thoughtful counsel to top management on a range of issues

  Diversity of expertise and experience as well as diversity with respect to race, gender and ethnicity

  A history of achievement that reflects superior standards for themselves and others

  Loyalty and commitment to driving the success of the Company

  An ability to take tough positions while at the same time working as a team player

  Individual backgrounds that provide a portfolio of experience and knowledge commensurate with the Company’s needs

 

 

The Company also strives to have all non-employee Directors be independent. In addition to having such Directors meet the NYSE definition of independence, the Board has set its own more rigorous standard of independence. The Governance Committee must also ensure that the members of the Board as a group maintain the requisite qualifications under NYSE listing standards for populating the Audit, Compensation and Governance Committees. In addition, the Governance Committee ensures that each member of the Compensation Committee is a “Non-Employee” Director as defined in the Securities Exchange Act of 1934 and is an “outside director” as defined in section 162(m) of the U.S. Code.

As provided in its charter, the Governance Committee will consider Director candidates recommended by shareholders. To recommend a Director candidate, a shareholder should write to Johnson Controls’ Secretary at Johnson Controls’ current registered address: One Albert Quay, Cork, Ireland. Such recommendation must include:

 

Shareholder-recommended Director candidate nominations must
include:
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  The name and address of the candidate

  A brief biographical description, including his or her occupation for at least the last five years, and a statement of the qualifications of the candidate, taking into account the qualification requirements set forth above

  The candidate’s signed consent to serve as a Director if elected and to be named in the proxy statement

  Evidence of share ownership of the person making the recommendation

  All information required by Article 62 of our Memorandum and Articles of Association to be included in notices for any nomination by a shareholder of an individual for election to the Board

 

 

The recommendation must also follow the procedures set forth in Articles 54 — 68 of our Memorandum and Articles of Association to be considered timely and complete in order to be considered for nomination to the Board.

To be considered by the Governance Committee for nomination and inclusion in the Company’s proxy statement for the 2021 Annual General Meeting, shareholder recommendations for Director must be received by Johnson Controls’ Corporate

 

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Governance of the Company  ›  Nomination of Directors and Board Diversity

 

Secretary no later than September 19, 2020. Once the Company receives the recommendation, the Company may deliver a questionnaire to the candidate that requests additional information about the candidate’s independence, qualifications and other information that would assist the Governance Committee in evaluating the candidate, as well as certain information that must be disclosed about the candidate in the Company’s proxy statement, if nominated. Candidates must complete and return the questionnaire within the time frame provided to be considered for nomination by the Governance Committee. No candidates were recommended by shareholders in connection with the 2020 Annual General Meeting.

The Governance Committee employs an unrelated search firm to assist the Committee in identifying candidates for Director when a vacancy occurs. The Committee also receives suggestions for Director candidates from Board members. All of our nominees for Director are current members of the Board. In evaluating candidates for Director, the Committee uses the qualifications described above, and evaluates shareholder candidates in the same manner as candidates from all other sources. Based on the Governance Committee’s evaluation of the current Directors, each nominee was recommended for election.

Other Directorships, Conflicts and Related Party Transactions

We recognize the importance of having Directors with significant experience in other businesses and activities; however, Directors are expected to ensure that other commitments, including outside board memberships, do not interfere with their duties and responsibilities as members of the Johnson Controls’ Board. In order to provide sufficient time for informed participation in their Board responsibilities non-executive Directors are required to limit their external directorships of other public companies to three and Audit Committee members are required to limit their audit committee membership in other public companies to two. The Board may, in its discretion, waive these limits in special circumstances. When a Director or the CEO intend to serve on another board, the Governance Committee is required to be notified. The Governance Committee reviews the possibility of conflicts of interest or time constraints and must approve the officer’s or Director’s appointment to the outside board. Each Director is required to notify the Corporate Secretary of any potential conflicts. The CEO may serve on no more than one other public company board. The CEO shall resign or retire from the Board upon resigning or retiring from his role as CEO, following a transition period mutually agreed upon between the CEO and the Compensation Committee.

The Company has a formal, written procedure intended to ensure compliance with the related party provisions in our Code of Ethics and with our corporate governance guidelines. For the purpose of the policy, a “related party transaction” is a transaction in which we participate and in which any related party has a direct or indirect material interest, other than ordinary course, arms-length transactions of less than 1% of the revenue of the counterparty. Transactions exceeding the 1% threshold, and any transaction involving consulting, financial advisory, legal or accounting services that could impair a Director’s independence, must be approved by our Governance Committee. Any related party transaction in which an executive officer or a Director has a personal interest, or which could present a possible conflict under the Code of Ethics, must be approved by a majority of disinterested Directors, following appropriate disclosure of all material aspects of the transaction.

Under the rules of the Securities and Exchange Commission, public issuers such as Johnson Controls must disclose certain “related person transactions.” These are transactions in which Johnson Controls is a participant where the amount involved exceeds $120,000, and a Director, executive officer or holder of more than 5% of our ordinary shares has a direct or indirect material interest. Although Johnson Controls engaged in commercial transactions in the normal course of business with companies where Johnson Controls’ Directors were employed and served as officers, none of these transactions exceeded 1% of Johnson Controls’ gross revenues and these transactions are not considered to be related party transactions.

Code of Ethics

We have adopted the Code of Ethics, which applies to all employees, officers, and Directors of Johnson Controls. The Code of Ethics meets the requirements of a “code of ethics” as defined by Item 406 of Regulation S-K and applies to our CEO, Chief Financial Officer and Chief Accounting Officer, as well as all other employees. The Code of Ethics also meets the requirements of a code of business conduct and ethics under the listing standards of the NYSE. The Code of Ethics is posted on our website at www.johnsoncontrols.com under the heading “About — Ethics and Compliance.” We will also provide a copy of the Code of Ethics to shareholders upon request. We disclose any amendments to the Code of Ethics, as well as any waivers for executive officers or Directors on our website at www.johnsoncontrols.com under the heading “About Us — Ethics and Compliance.” The Board of Directors annually certifies their compliance with the Code of Ethics. The Company maintains established procedures by which employees may anonymously report a possible violation of the Code of Ethics. The Audit Committee maintains procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters. The Audit Committee also maintains procedures for employees to report concerns regarding questionable accounting or auditing policies or practices on a confidential, anonymous basis.

 

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Governance of the Company  ›  Sustainability

 

Sustainability

Sustainability

At Johnson Controls, our purpose is to power our customers’ success and protect the environment. Sustainability is integrated into our company vision, values, products and services, and our culture.

We create innovative, sustainable, clean products and services that empower customers and communities to consume less energy and conserve resources. At Johnson Controls, we transform the environments where people live, work, learn and play. From optimizing building performance to improving safety and enhancing comfort, we drive the outcomes that matter most.

We believe that through leadership in sustainability, Johnson Controls creates long-term benefit for our customers, employees, shareholders, and society as a whole.

 

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Governance of the Company  ›  Corporate Responsibility and Sustainability

 

Sustainability Governance and Strategy

Our commitment to sustainability starts at the top and is integrated throughout our Company.

 

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Governance of the Company  ›  Corporate Responsibility and Sustainability

 

2019 Company Sustainability Performance Highlights

 

LOGO   

Products, Services and Solutions

 

Since January 2000, performance contracting projects have helped our customers save more than 29.4 Million Metric Tons CO2e and $6.3 billion through energy and operational savings through our performance infrastructure work.

 

In 2019, Johnson Controls, along with its project partners, won the Digie Award for “Most Intelligent Building — Corporate Headquarters” for its groundbreaking work on Bee’ah’s new sustainable headquarters in the United Arab Emirates. The award recognizes extraordinary examples of buildings, projects and communities that best demonstrate smart, connected, high performance building concepts throughout the world.

 

The 2019 Sustainability Awards named the YORK® Mission Critical Direct Evaporative Cooling Air Handling Unit the Sustainability Product of the Year in the business services industry. The Business Intelligence Group awards honor those who have made sustainability an integral part of their business practice. By maximizing cooling capacity per square foot and providing superior efficiency, the units optimize operational, water and energy usage to achieve lower energy costs.

 

Johnson Controls is committed to the worldwide transition to low-global warming potential (GWP) refrigerants and offers alternative refrigerants across all chiller platforms, with GWP reductions ranging from 56% to over 99%. We also offer a wide range of industrial refrigeration and cooling equipment using natural gas and other ultra-low GWP refrigerants.

 

 

  

LOGO

LOGO   

 

People

 

Our employee volunteer program, Blue Sky Involve, helps Johnson Controls employees share their passion and expertise through community volunteer activities and strengthens their professional and leadership skills. Employees volunteer with local non-profit organizations or schools to support education, environmental stewardship or social service efforts. Since Blue Sky Involve launched in 2006, Johnson Controls employees have volunteered 1.7 million hours in local communities. In fiscal year 2019, Johnson Controls’ corporate philanthropy efforts resulted in contributions of more than $9.6 million. In addition, our employees gave in excess of $3.5 million.

 

In just one year, we expanded our sustainability business resource groups from one to emerging or existing chapters in North America, South America, Europe, the Middle East and Asia.

 

Grady Crosby, our Vice President, Public Affairs & Chief Diversity Officer, was named to the 2019 Top 15 Champions of Diversity list by DiversityGlobal Magazine. The annual list honors men and women across all industries who focus on creating diverse and inclusive organizational cultures through their work. He cites Johnson Controls’ engagement of female engineers as one of his proudest Diversity & Inclusion initiatives, a program that continues to thrive through our Women in Technology group and Coolest Women in the World campaign.

 

   LOGO
LOGO   

 

Partnerships

 

We continue to expand our commitments with key partners. At the UN Climate Action Summit in September 2019, Johnson Controls made three additional global commitments including the Three Percent Club for Energy Efficiency, the Cool Coalition and the EP100 Cooling Challenge. These commitments expand on our existing work with the World Resources Institute and Sustainable Energy for All with a focus on building efficiency and highly-efficient cooling.

 

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Governance of the Company  ›  Corporate Responsibility and Sustainability

 

LOGO   

 

Performance

 

We achieved two significant sustainability milestones in 2019 by reducing our enterprise-wide greenhouse gas intensity by one-half while doubling the energy productivity of our operations over a 16 year period.

 

We are on track to meet our Zero Landfill goals and achieved 19 Zero Landfill certified facilities.

 

Our global renewable energy amounted to 251,908 MWh through purchase of Renewable Energy Certificates. Through this initiative we offset 100% of our greenhouse gas emissions from our Global Products manufacturing plants in the United States.

 

We exceeded our fiscal 2019 2.5% reduction goal for greenhouse gas intensity by more than two times with a 5.1% reduction. In addition we reduced our energy intensity by 1.8%.

 

In December 2019, we entered into two of the first sustainable improvement loans in the U.S. and the industrial sector with the execution of our new $2.5 billion Five-Year Senior Revolving Credit Facility and our $500 million 364 Day Senior Revolving Credit Facility. These facilities include a sustainability-linked pricing mechanism that reduces interest rates applicable to the facilities in connection with our sustainability performance: greenhouse gas emission reductions the Company is able to achieve from energy efficiency and renewable energy customer projects; reductions in our greenhouse gas intensity; and improvements in our safety record through a reduction in our total recordable incident rate.

 

  

LOGO

LOGO   

 

Governance

 

We are honored to be listed on more than 40 leading sustainability indices and to be named one of the World’s Most Ethical Companies and one of the 100 Best Corporate Citizens for the 14th year.

 

Our leaders proudly serve on social, environmental and governance leadership board positions around the world, furthering sustainability leadership globally. For example, the Executive Chairman of our GSC, Grady Crosby, serves as the Secretary of the Board of Directors and Chairman of the Nomination and Governance Committee of the United Nations Global Compact Network USA.

 

  

LOGO

Johnson Controls has been publicly reporting its sustainability results since 2002 and is proud of its history of transparency. We report at the GRI Standards-Comprehensive level, United Nations Global Compact Advanced level and respond to the CDP and fulfill additional requests by investors, customers and others for our sustainability data. We align our reporting to the Sustainability Accounting Standards Board (the “SASB”) and the UN Sustainable Development Goals. Our public sustainability reports, policies and commitments can be found at: https://www.johnsoncontrols.com/corporate-sustainability/reporting-and-policies.

 

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Governance of the Company  ›  For More Information

 

For More Information

We believe that it is important that Johnson Controls’ stakeholders and others are able to review its corporate governance practices and procedures. Our corporate governance guidelines are embodied in a formal document that has been approved by Johnson Controls’ Board of Directors. It is available on our website at www.johnsoncontrols.com under the heading “Investors-Corporate Governance.” We will also provide a copy of the corporate governance principles to shareholders upon request. Our corporate governance guidelines and general approach to corporate governance as reflected in our Memorandum and Articles of Association and our internal policies and procedures are guided by U.S. practice and applicable federal securities laws and regulations and NYSE requirements. Although we are an Irish public limited company, we are not subject to, nor have we adopted, the U.K. Corporate Governance Code or any other non-statutory Irish or U.K. governance standards or guidelines. While there are many similarities and overlaps between the U.S. corporate governance standards applied by us and the U.K. Corporate Governance Code and other Irish/U.K. governance standards or guidelines, there are differences, in particular relating to the extent of the authorization to issue share capital and effect share repurchases that may be granted to the Board and the criteria for determining the independence of Directors.

COMPENSATION OF NON-EMPLOYEE DIRECTORS

Director compensation for fiscal 2018 for non-employee Directors consisted of an annual cash retainer of $120,000 and restricted stock units (“RSUs”) with a grant date value of approximately $155,000 and a one-year vesting term. The Lead Director received an additional $30,000 and the chairs of each standing committee received an additional fee of $25,000. A Director who is also an employee receives no additional remuneration for services as a Director. Beginning fiscal 2019, the annual cash retainer was increased to $140,000 and the grant date value of the annual RSU award was increased to $175,000. All other fees remain unchanged. This is the first increase in the annual cash retainer and annual RSU award since the merger in September 2016. The Governance Committee recommended the increase in connection with its annual review of Director compensation, which included a review of industry and peer Director compensation practices. The Board believes that the increase is reasonable, appropriate and consistent with market practice.

 

       

Name

 

 

Fees Earned or
Paid in Cash
($)

 

   

Stock
Awards
($)
(1)

 

   

Total
($)

 

 

Current Directors

     

Ms. Jean Blackwell

 

$

120,000

 

 

$

155,000

 

 

$

275,000

 

Mr. Pierre Cohade(2)

 

$

98,804

 

 

$

193,750

 

 

$

292,554

 

Mr. Michael E. Daniels (CC)

 

$

145,000

 

$

155,000

 

 

$

300,000

 

Mr. Juan Pablo del Vale Perochena (GC)

 

$

145,000

 

 

$

155,000

 

 

$

300,000

 

Mr. W. Roy Dunbar

 

$

120,000

 

 

$

155,000

 

 

$

275,000

 

Ms. Gretchen R. Haggerty

 

$

120,000

 

 

$

155,000

 

 

$

275,000

 

Ms. Simone Menne

 

$

120,000

 

 

$

155,000

 

 

$

275,000

 

Mr. Jürgen Tinggren(L) (AC)

 

$

175,000

 

 

$

155,000

 

 

$

330,000

 

Mr. Mark Vergnano

 

$

120,000

 

 

$

155,000

 

 

$

275,000

 

Mr. R. David Yost

 

$

120,000

 

 

$

155,000

 

 

$

275,000

 

Mr. John D. Young

 

$

120,000

 

 

$

155,000

 

 

$

275,000

 

Former Directors

     

Mr. Brian Duperreault (3)

 

$

51,667

 

 

$

 

 

$

51,667

 

 

(L)=   

Lead Director

(AC)=   

Audit Committee Chair

(CC)=   

Compensation Committee Chair

(GC)=   

Governance Committee Chair

 

(1) 

This column reflects the fair value of the entire amount of awards granted to Directors calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718, excluding estimated forfeitures. The fair value of RSUs is

 

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Governance of the Company  ›  Charitable Contributions

 

  computed by multiplying the total number of shares subject to the award by the closing market price of the Company’s ordinary shares on the date of grant. RSUs granted to Board members generally vest and the underlying units are converted to shares and delivered to Board members on the anniversary of the grant date.

 

(2) 

Mr. Cohade became a Director on December 5, 2018.

 

(3) 

Mr. Brian Duperreault served as a Director through March 6, 2019.

Charitable Contributions

The Board understands that its members, or their immediate family members, serve as directors, trustees, executives, advisors and in other capacities with a host of other organizations. If Johnson Controls directs a charitable donation to an organization in which a Johnson Controls Director, or their immediate family member, serves as a director, trustee, executive, advisor, or in other capacities with the organization, the Board must approve the donation. Any such donation approved by the Board will be limited to an amount that is less than 2% of that organization’s annual charitable receipts, and less than 2% of Johnson Controls’ total annual charitable contributions. In line with its matching gift policy for employees, going forward Johnson Controls will make an annual matching gift of up to $3,000 for each Director to qualifying charities.

COMMITTEES OF THE BOARD

The table below sets forth committee membership as of the end of fiscal year 2019 and meeting information for each of the Board Committees.

 

Name

  Audit   Governance   Compensation   Executive  

 

Date Elected/
Appointed
to Board

 

Ms. Jean Blackwell

     

X

   

 

06/13/2018

 

Mr. Pierre Cohade

 

X

       

 

12/05/2018

 

Mr. Michael E. Daniels

     

X(C)

 

X

 

 

03/10/2010

 

Mr. Juan Pablo del Valle Perochena

   

X(C)

   

X

 

 

09/02/2016

 

Mr. W. Roy Dunbar

     

X

   

 

06/14/2017

 

Ms. Gretchen R. Haggerty

 

X

       

 

03/07/2018

 

Ms. Simone Menne

 

X

       

 

03/07/2018

 

Mr. George R. Oliver

       

X(C)

 

 

09/28/2012

 

Mr. Jürgen Tinggren (L)

 

X(C)

     

X

 

 

03/05/2014

 

Mr. Mark Vergnano

     

X

   

 

09/02/2016

 

Mr. R. David Yost

   

X

     

 

03/12/2009

 

Mr. John D. Young

   

X

     

 

12/07/2017

 

Number of Meetings During Fiscal Year 2019

 

10

 

4

 

6

 

2

       

 

(L) =

Lead Director

 

(C) =

Committee Chair

During fiscal 2019, the full Board met 4 times. All Directors attended at least 75% of the Board and committee meetings on which they sit. The Board’s governance principles provide that Board members are expected to attend each Annual General Meeting in person or by phone. At the 2019 Annual General Meeting, except for Ms. Menne and Mr. Yost, all of our current Board members who were Board members at such time were in attendance.

Audit Committee. The Audit Committee monitors the integrity of Johnson Controls’ financial statements, the independence and qualifications of the independent auditors, the performance of Johnson Controls’ internal auditors and independent auditors, Johnson Controls’ compliance with legal and regulatory requirements and the effectiveness of Johnson Controls’ internal controls. The Audit Committee is also responsible for retaining, subject to shareholder approval, evaluating, setting the remuneration of, and, if appropriate, recommending the termination of Johnson Controls’ auditors. The Audit Committee has

 

2020 Notice and Proxy Statement        35


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Governance of the Company  ›  Committees of the Board

 

been established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The Audit Committee operates under a charter approved by the Board. The charter is posted on Johnson Controls’ website at www.johnsoncontrols.com and we will provide a copy of the charter to shareholders upon request. The current members of the Audit Committee are Messrs. Cohade and Tinggren and Mses. Haggerty and Menne, each of whom is independent under NYSE listing standards and SEC rules for audit committee members. Mr. Tinggren is the chair of the Audit Committee as well as our independent Lead Director. The Board has determined that each of Mr. Tinggren and Mses. Haggerty and Menne are audit committee financial experts.

Governance Committee. The Governance Committee is responsible for identifying individuals qualified to become Board members, recommending to the Board the Director nominees for the Annual General Meeting, developing and recommending to the Board a set of corporate governance principles, and playing a general leadership role in Johnson Controls’ corporate governance. In addition, the Governance Committee oversees our environmental, health and safety management system and enterprise risk assessment activities. The Governance Committee operates under a charter approved by the Board. The charter is posted on Johnson Controls’ website at www.johnsoncontrols.com and we will provide a copy of the charter to shareholders upon request. The current members of the Governance Committee are Messrs. del Valle Perochena, Yost and Young, each of whom is independent under NYSE listing standards. Mr. del Valle Perochena chairs the Governance Committee.

Compensation Committee. The Compensation Committee reviews and approves compensation and benefits policies and objectives, determines whether Johnson Controls’ officers, Directors and employees are compensated according to these objectives, and assists the Board in carrying out certain of its responsibilities relating to the compensation of Johnson Controls’ executives. The Compensation Committee operates under a charter approved by the Board. The charter is posted on Johnson Controls’ website at www.johnsoncontrols.com and we will provide a copy of the charter to shareholders upon request. The current members of the Compensation Committee are Ms. Blackwell and Messrs. Daniels, Dunbar and Vergnano. Mr. Daniels is the chair of the Compensation Committee. The Board of Directors has determined that each of the members of the Compensation Committee is independent under NYSE listing standards. In addition, each member is a “Non-Employee” Director as defined in the Securities Exchange Act of 1934 and is an “outside director” as defined in section 162(m) of the U.S. Code. For more information regarding the Compensation Committee’s roles and responsibilities, see the Compensation Discussion and Analysis.

Executive Committee. The Executive Committee assists the Board in fulfilling its oversight responsibility with its review and monitoring of major corporate actions including external corporate development activities, business portfolio optimization, capital appropriations and capital expenditures. The Executive Committee was established in September of 2016 and operates under a charter approved by the Board. The charter is posted on Johnson Controls’ website at www.johnsoncontrols.com and we will provide a copy of the charter to shareholders upon request. The current members of the Executive Committee are Messrs. Daniels, del Valle Perochena, Oliver and Tinggren. Mr. Oliver is the chair of the Executive Committee.

Compensation Committee Interlocks and Insider Participation

During fiscal 2019, Ms. Blackwell and Messrs. Daniels, Dunbar, Vergnano and Yost served on the Compensation Committee. None of the members of the Compensation Committee during fiscal 2019, or as of the date of this proxy statement, is or has been an officer or employee of the Company and no executive officer of the Company served on the compensation committee or board of any company that employed any member of the Company’s Compensation Committee or Board of Directors.

 

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COMPENSATION DISCUSSION & ANALYSIS

At Johnson Controls our promise is to advance the safety, comfort and intelligence of spaces and places to power our customer’s mission. This requires us to work with integrity and purpose, focus on our customers and the future, together as one team. To ensure we are successful, our compensation programs are designed to reward our employees, including our executive officers, accordingly.

This Compensation Discussion & Analysis (the “CD&A”) section of our Proxy sets out the mechanics of our executive compensation program, in particular its application and outcomes in respect of fiscal 2019, ending September 30, 2019.

2019 NAMED EXECUTIVE OFFICERS (NEOs)

 

   

Named Executive Officer

   Title

George R. Oliver

  

Chairman & Chief Executive Officer

Brian J. Stief

  

Vice Chairman & Chief Financial Officer

Jeffrey M. Williams

  

Vice President & President — Global Products, Building Technologies and Solutions

Rodney M. Rushing

  

Vice President & President — North America, Building Technologies and Solutions

John Donofrio

  

Executive Vice President, General Counsel

Former NEOs

    

William C. Jackson

  

Vice President & President — Global Products, Building Technologies and Solutions and Corporate Strategy

Joseph A. Walicki

  

Vice President & President — Power Solutions

EXECUTIVE SUMMARY

Fiscal 2019 was a year of strategic and financial achievements. From a strategic standpoint, we completed our transformation to a pure play Buildings company with the divestiture of Power Solutions business, positioning us to be a leader in the evolution of smart buildings, infrastructure and cities. We quickly began allocating the proceeds from the sale to de-lever the balance sheet and return cash to our shareholders. Financially, we met or exceeded each of the financial targets we set at the beginning of the year. In fiscal 2019, we had strong growth in orders and organic sales, solid margin expansion and significant growth in adjusted EPS from continuing operations. We also continued to improve free cash flow conversion, exceeding our target for the year.

In fiscal 2020, we believe that we are well-positioned to build upon our performance in 2019 by leveraging our strong backlog position, remaining focused on operational excellence, and continuing to redeploy capital to shareholders. Throughout the year, our management team remained focused on creating shareholder value, driving the Company’s strategic initiatives and growth agenda, implementing operational improvements, improving the employee experience, and delivering its financial objectives.

 

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Compensation Discussion & Analysis  ›  Fiscal 2019 Priorities

 

FISCAL 2019 PRIORITIES AND PERFORMANCE

 

 

Placing additional focus on the service aspects of our business, which represents approximately one-third of our revenue and provides a very profitable and resilient revenue stream. In fiscal 2019, we increased organic service growth by mid-single digits.

 

 

        

 

 

Improving margin performance by driving simplification across the organization, better execution in our field businesses and improved productivity with our manufacturing operations. Together these actions drove a 60 basis point improvement in adjusted EBIT margins.

 

 

        

 

 

Driving a performance culture throughout our organization to ensure our employees are aligned with, and accountable to, a clearly articulated strategy and increasing efficiency by standardizing operations and creating more effective processes. In connection with promoting this culture, we are giving our employees the tools to improve their output and enhance their employment experience.

 

 

 

 

A continued emphasis on reinvesting back in the business from both a sales and product perspective. We continued to drive commercial excellence, by hiring, training and appropriately incentivizing our front line sales personnel as well as implementing strategic account management tools. Additionally, we continued reinvesting in our products portfolio and driving new product introductions. Together these actions contributed to 5% organic sales growth for the Company; with organic field orders also up 5% and backlog up 8%.

 

          
 

 

Focusing on cash generation by implementing a set of fundamental cash management processes and procedures across the Company. In fiscal 2019, we improved adjusted free cash flow from $1.4 billion to $1.7 billion and achieved a free cash flow conversion rate of 99%.

 

 

In addition to the above, in fiscal 2019 we:

 

   

Increased adjusted EPS from continuing operations 23% from $1.59 to $1.96.

 

   

Payed down debt by $3.7 billion, largely as the result of the use of proceeds from the Power Solutions sale.

 

   

Repurchased approximately 155 million shares for approximately $6 billion, lowering our average weighted share count by more than 6.1%.

 

   

Paid $920 million in dividends.

 

   

Achieved synergy and productivity savings of $196 million.

We feel good about our position entering fiscal 2020 as our backlog provides visibility in our field businesses, our service business tends to be more resilient and we continue to benefit from self-help and capital deployment. We remain focused on driving execution and delivering for our customers and shareholders.

* See Annex I to this Proxy Statement for a reconciliation of organic sales growth, adjusted EPS from continuing operations, adjusted free cash flow, free cash flow conversion and adjusted EBIT margin to our results for the most directly comparable financial measures as reported under generally accepted accounting principles in the United States.

 

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Compensation Discussion & Analysis  ›  Fiscal 2019 Compensation

 

FISCAL 2019 COMPENSATION

Our compensation program is designed to effectively and transparently align compensation with performance. Accordingly, the achievements described on the previous page are reflected in the outcomes under our compensation program, with annual incentives and fiscal 2017 PSU awards being earned above target.

 

 

 

Annual incentive awards ranged from 144% to 154% of

target

See page 51 for details

 

   

 

Fiscal 2017 PSU awards subject to a three-year

performance period concluding September 30, 2019,

paid out at 146% of target

See page 54 for details

 

          
 
 
 
 

To assess the alignment between performance and compensation, the Compensation Committee (“Committee”) periodically requests that its independent compensation consultant, Farient Advisors LLC, evaluate the relationship, and considers this relationship in making pay decisions pertaining to the CEO. On the Committee’s behalf, Farient used a number of methods in assessing our pay for performance alignment, including:

 

   

Farient’s proprietary alignment methodology, which assesses the extent to which 3-year TSR and 3-year average Performance-Adjusted Compensation (which includes actual salary, actual annual incentives paid, and the value of equity at the end of the 3-year period using actual PSU awards, if known, and target PSU awards for incomplete performance cycles, and the Black-Scholes value of options granted during the 3-year period, all valued at the stock price at the end of the 3-year period) are aligned;

 

   

A simulation of pay-for-performance tests used by proxy advisory firms; and

 

   

An analysis of realizable relative to target pay compared to peers.

Given the results of these assessments, the Committee concluded that Johnson Controls’ executive compensation, including that for the CEO, is aligned with our performance.

 

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Compensation Discussion & Analysis  ›  Fiscal 2019 Key Committee Activities

 

FISCAL 2019 KEY COMMITTEE ACTIVITIES

During fiscal 2019, the Committee addressed several items in addition to the standing annual agenda items which are highlighted below.

 

 

 

Shareholder

Engagement

 

   Following low shareholder advisory say-on-pay votes in 2017 and 2018, the Committee was pleased to see an increase in shareholder support at the 2019 Annual Shareholder Meeting. The Committee attributes the increase in shareholder support to listening to the feedback of our shareholders collected via direct engagement, and subsequent plan design and target setting changes which were informed by this input. Recognizing the importance of this ongoing dialogue, the Company continued to engage with shareholders throughout fiscal 2019, listening and subsequently delivering on the commitments we made.
 
     As part of the engagement, the Company reached out to our top 25 shareholders representing approximately 66% of our outstanding shares. Eleven investors, representing approximately 41% of our outstanding shares, requested meetings which took place in fiscal 2019. We consistently heard that our shareholders are pleased with our approach to executive compensation, following changes made over the past few years. The program today is well received, aligned with shareholders’ interests and better aligns with market practices post-merger.
     In considering changes, the Committee takes account of shareholder feedback, as well as evolving market practices, the advice of its independent compensation consultant, and our business strategy. The recent changes include:
    

 Enhanced target setting process to drive closer alignment between management plans and shareholder expectations;

    

 Revised compensation peer group to better reflect our business dynamics; approved an additional ‘performance group’ of select peers, enabling us to reference our peers’ performance expectations in our goal setting process;

    

 Adopted a cumulative three-year performance period for PSUs (previously three one-year periods);

    

 Included relative TSR as an independent measure rather than a modifier for PSUs;

    

 Re-weighted earnings and ROIC metrics that govern the vesting of PSUs, in connection with the addition of relative TSR as an independent measure;

    

 Removed club dues as a perquisite; and

    

 Enhanced clarity in our disclosure of compensation decisions and outcomes.

 

 

Executive

Departures

 

  

During fiscal 2019, Messrs. Jackson and Walicki departed Johnson Controls. Both individuals were subject to legacy, change-in-control agreements that pre-dated our merger. Given their respective departures were within 36 months of the merger, the terms of these legacy agreements dictated the compensation the Company was required to provide.

 

     Calculations for payments were made in accordance with the agreements. Given the payment of annual incentives in respect of the fiscal 2019 performance year was not covered by these agreements, the Committee resolved that no annual incentive performance program (AIPP) payments would be made to either individual.
     The Committee is aware that the legacy change-in-control agreements were a sensitive area for shareholders. These payments represent the last that are required under legacy severance and change-in-control agreements following the work over the last 12-18 months to phase out legacy agreements. Today, all NEOs, except Mr. Stief, are governed by the Johnson Controls International Severance and Change-in-Control Policy for Officers that was amended and restated by the Committee effective December 7, 2017. In connection with a retention award made to Mr. Stief in September 2017, Mr. Stief terminated his change-in-control agreement and agreed to not be covered by the Company’s Severance and Change-in-Control Policy.

 

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Compensation Discussion & Analysis  ›  Navigating the CD&A

 

NAVIGATING THE CD&A

In the balance of this CD&A we provide additional details on the items described on the previous pages, along with information on our executive compensation design, management and outcomes.

 

     

Executive Compensation Framework

   Executive Compensation Philosophy and Principles | Elements of Executive Compensation     42  

Executive Compensation Management

   Roles in Determining Executive Compensation | Use of an Independent Compensation Consultant | Annual Say-on-Pay Vote | Shareholder Engagement | Use of Market Data | Metric Selection and Goal Setting     44  

Fiscal 2019 Compensation Decisions and Outcomes

   Base Salary | Annual Incentive Performance Program | Long-Term Equity Incentive Awards     49  

Additional Information

   Other Executive Compensation Policies | Executive Benefits and Perquisites | Executive Severance and Change-in-Control Policy | Global Executive Assignment Agreement | Tax and Accounting Considerations     55  

 

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Compensation Discussion & Analysis  ›  Executive Compensation Framework

 

EXECUTIVE COMPENSATION FRAMEWORK

EXECUTIVE COMPENSATION PHILOSOPHY AND PRINCIPLES

Our executive compensation program is designed to attract and retain highly-qualified executives, motivate our executives to achieve our overall business objectives, and align our executives’ interests with those of our shareholders. We achieve this through a set of underlying principles that inform the design and operation of our executive compensation program.

 

   

Pay-for-performance

  

  Set majority of compensation as variable and at-risk

 

  Tie incentives to performance against financial, operational and strategic goals

 

  Use quantifiable and measurable performance metrics and goals that are clearly disclosed

 

  Provide significant upside and downside potential for superior and low performance

Target pay appropriately

  

  Benchmark compensation against practices in similarly-sized general industry companies

 

  In general, target compensation at market median for comparable positions (+/- 20%)

Align interests with our stakeholders

  

  Design programs that discourage unnecessary or excessive risk-taking

 

  Cap payout opportunities under the incentive plans

 

  Reward long-term financial results that drive financial creation through a balanced equity mix

 

  Operate meaningful share ownership guidelines

 

  Provide a pay recoupment (i.e. clawback) policy

 

  Prohibit insider trading, hedging and pledging of Company stock

 

  Engage with shareholders on executive compensation matters

 

  Engage an independent compensation consultant to provide analysis and advice

 

  Conduct an annual say-on-pay vote

Avoid poor governance practices

  

LOGO    No tax gross-ups on any change-in-control benefits

 

LOGO    No single-trigger accelerated vesting on a change-in-control (double-vesting provisions)

 

LOGO    No discounting, reloading or re-pricing of share options without shareholder approval

 

LOGO    No guaranteed compensation or guaranteed increases

 

LOGO    No excessive perquisites

 

LOGO    No employment agreements with executive officers, except where legally required in which case they follow market norms

 

LOGO    No dividends paid on unvested restricted share units or performance share units until such awards vest

 

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Compensation Discussion & Analysis  ›  Elements of Executive Compensation

 

ELEMENTS OF EXECUTIVE COMPENSATION

Consistent with our compensation philosophy, the majority of our NEOs’ target total direct compensation in fiscal 2019 was variable and at-risk.

 

Chairman & Chief Executive Officer   

All Other NEOs (average)

Excludes former NEOs

  
LOGO    LOGO    LOGO

 

       

Element

   Purpose    Performance Alignment    Recent Changes

 

Base Salary

  

 

Recognize role scope, skills required, performance, contribution, leadership and potential

 

  

 

Individual performance taken into account when considering changes

  

 

No increases in fiscal 2019

 

Annual Incentive Award

   Tie compensation to the successful execution of our operating plan and strategic goals   

 

Opportunity of 0% - 200% of target based on performance

 

Based on performance against three equally weighted financial metrics: EBIT Growth, revenue growth, and adjusted free cash flow conversion; and a modifier (+/- 25%) based on performance against pre-established shared strategic priorities

 

  

 

No changes in fiscal 2019

 

Long-Term Incentive Equity Awards

  

 

Attract, retain and motivate executive talent; align interests with our shareholders and value realization with stock price; drive accountability for long-term performance

  

PSUs (50%), share options (25%) and RSUs (25%)

 

PSUs based on performance against three equally weighted measures assessed over three years: cumulative pre-tax earnings, average pre-tax ROIC and relative TSR versus the S&P 500 Industrials

 

Share option and RSU value realization tied to Johnson Controls’ stock price performance. Options vest 50% after two years and 50% after three years; RSUs vest equally over three years

 

  

 

For fiscal 2019 PSU awards:

 

   All performance measures now assessed cumulatively over three years, rather than three one-year performance periods

 

   Relative TSR incorporated as a standalone metric, rather than acting as a modifier to pre-tax earnings and pre-tax ROIC

 

2020 Notice and Proxy Statement        43


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Compensation Discussion & Analysis  ›  Executive Compensation Management

 

EXECUTIVE COMPENSATION MANAGEMENT

The Committee comprises independent directors who develop, amend and approve our executive compensation program. To ensure the executive compensation program is effective and reasonable, the Committee uses a variety of inputs including the results of our annual say-on-pay vote, feedback from shareholders, the advice of the Committee’s independent compensation consultant informed by market practices, and input from the Chairman & Chief Executive Officer.

ROLES IN DETERMINING EXECUTIVE COMPENSATION

 

   

Compensation Committee

 

  Develop, amend and approve executive compensation programs to remain consistent with the our values and philosophy, support the recruitment and retention of executive talent, and help achieve business objectives

 

  Determine and approve the appropriate level of compensation for all executive officers, other than the CEO

 

  Determine and approve short- and long-term incentive plan targets for all executive officers, other than the CEO

 

  Evaluate CEO individual performance and recommend CEO compensation to the independent Board of Directors

 

  Review talent development and succession plans for the CEO and other executive officer roles, and make recommendations to the independent Board of Directors regarding the appointment of the executive officers

 

  Approve the independent compensation consultant’s fees and terms of the engagement

 

Independent Directors of the Board

 

  Review and approve CEO compensation, and annual and long-term corporate goals relevant to CEO compensation

 

  Review and approve talent development and succession planning recommendations for all executive officer roles

  

CEO

 

  Evaluate performance for the executive officers, other than himself, and make compensation recommendations to the Committee

 

Independent Compensation Consultant

 

  Inform the Committee of market trends, developments in executive compensation, and provide recommendations for appropriate adjustments to the Company’s compensation program, policies, and practices in-line with our business and talent strategies, and investor expectations

 

  Analyze the prevailing executive compensation structure and plan designs, and asses the competitiveness of our compensation program in the context of aligning executive officer interests with those of our shareholders

 

  Test the incentive plan performance goals to ensure appropriate rigor and alignment with shareholder interests

USE OF AN INDEPENDENT COMPENSATION CONSULTANT

The Committee has the sole authority to engage the services of outside advisors, experts, and others to assist in performing its duties. Since December 2017, the Committee has engaged Farient Advisors. Other than the services it provided to the Committee, Farient Advisors did not provide any services to the Company. The Committee has considered and assessed all relevant factors that could give rise to a potential conflict of interest with respect to the work performed. Based on this review, the Committee has determined that Farient Advisers is independent of the Company and its management, and did not identify any conflict of interest.

ANNUAL SAY-ON-PAY VOTE

In designing our executive compensation program, the Committee annually presents a ‘say-on-pay’ vote to our shareholders. In March 2019 we received 88% support, an improvement on our prior vote. This indicated the majority of our shareholders supported our executive compensation program and the changes the Committee had made. The Company continued its shareholder outreach efforts throughout 2019.

 

44        Johnson Controls International plc


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Compensation Discussion & Analysis  ›  Shareholder Engagement

 

SHAREHOLDER ENGAGEMENT

Johnson Controls is committed to maintaining ongoing dialogue with our shareholders to enable us to solicit and respond to feedback about our executive compensation programs in a timely manner. The feedback that we receive through engagement is an important input into discussions and decisions regarding executive compensation, in addition to market practices, the advice of our independent compensation consultant and business strategy.

During fiscal 2019, we reached out to our top 25 shareholders, representing approximately 66% of our outstanding shares. Eleven investors, representing approximately 41% of our outstanding shares, requested meetings which took place in fiscal 2019. We consistently heard that our shareholders are pleased with our approach to executive compensation, following changes made over the past few years. The program today is well received, aligned with shareholders’ interests and better aligns with market practices post-merger.

 

What We Heard

  

 

Our Response

Short-term and long-term metrics align with what the business needs to deliver strategically

 

  

Shareholders and the Committee are in agreement that the existing incentive metrics appropriately align compensation opportunities with our strategic priorities.

 

The Committee continues to believe an enterprise-wide short-term incentive plan is important to drive collective accountability and align with the overall experience of our shareholders. However, reflecting feedback received, an individual modifier will be added to the short-term incentive plan beginning fiscal 2020. This change will strengthen the pay for performance dynamic and personal accountability of executive officers, particularly those responsible for business unit performance. The modifier will enable the Committee to adjust awards by -25% to +10%, informed by a judgement-based assessment of how performance was delivered versus our culture and values, business unit contributions to enterprise-wide performance as appropriate, and any exceptional circumstances during the year. All awards will remain subject to an overall maximum of 200% of target.

 

Stability in compensation design is preferred, particularly given the long-term nature of the program

  

Shareholders welcomed the changes to the PSU design for fiscal 2019: the inclusion of relative TSR as a standalone metric; the weight rebalancing of ROIC and pre-tax earnings; the introduction of a cumulative three-year performance period.

 

No near-term substantive changes are envisioned at this time to the performance metrics or compensation design.

 

Peer comparisons are a critical part of the executive compensation process

  

The Committee revised the compensation peer group for use in fiscal 2019 compensation decisions, and has disclosed more details on the peer selection process. The intent of the revisions is to better reflect our business dynamics.

 

In addition, a ‘select group’ of peers has been identified to factor into the goal-setting process. For the determination of fiscal 2020 performance goals, the Committee will consider the historical and projected performance of these peer companies, alongside our historical and projected performance, the historical and expected performance of the S&P Industrials, our annual plan and external macro-economic factors impacting our business. This revised target setting process enables us to drive closer alignment between management plans and shareholder expectations.

 

In addition, following a market review the Committee resolved to remove club dues as part of our perquisite program with effect from January 2019. While not informed directly by shareholder feedback, we are confident shareholders will be supportive of this change.

In prior years, the Committee heard feedback expressing concerns about the nature of select executive severance agreements. Where possible, changes to the severance agreements were made to better align them with market norms. As of September 2, 2019, all of our NEOs, excluding Mr. Stief, are now governed by the Johnson Controls International Severance and Change-in-Control Policy for Officers that was amended and restated by the Committee effective December 7, 2017. In connection with a retention award made to Mr. Stief in September 2017, Mr. Stief terminated his change-in-control agreement and agreed to not be covered by the Company’s Severance and Change-in-Control Policy.

To assist in the understanding of our executive compensation program and policies, the Committee has also sought to enhance disclosure this year. The Committee is committed to being transparent and disclosing program, policies and processes that are informed by shareholder feedback and market practices, and then operating them in a clear manner.

 

2020 Notice and Proxy Statement        45


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Compensation Discussion & Analysis  ›  Use of Market Data

 

USE OF MARKET DATA

The Committee engages the independent compensation consultant to undertake an annual review of the compensation peers that are used to provide insight into market competitive pay levels and practices. In partnership with the independent consultant, a robust process has been established to appropriately assess the relevance of different companies in the context of making compensation comparisons. To establish the fiscal 2019 peers, the following factors were considered.

 

 

U.S. Traded   Companies  

   Companies with U.S. operations that will disclose compensation levels and design practices for NEOs
    
 

Similar   

Business  

Models  

   Companies that operate in similar arenas, requiring similar skills and experiences from their executive talent, and being subject to similar market forces
    
 

Size (Revenue  

Within 1/2x-2x  

Range)  

   Companies of a broadly relevant size as an indicator of complexity and scope for executive roles; companies that are of a reasonable size for making market comparisons
    
 

S&P 500  

Industrials  

Company  

   Companies that operate in the broad industrials arena, again indicating executive talent with relevant skills and companies that are subject to similar market forces
    
 

Geographic  

Footprint  

   Companies with international revenue of at least 35% of their total revenue, indicating multi-national operations, the complexity that results in and the associated skills required by executives
    
 

Other  

Factors  

   Other factors that are relevant as it pertains to global business operations and executive talent, such as operations that emphasize technology

In March 2018 the Committee approved several changes to the compensation peer group, informed by feedback from our shareholders, the results of the above analysis, and the advice of our consultant, with the goal of better reflecting our business model. This compensation peer group was used to inform pay decisions in respect of fiscal 2019 and also for fiscal 2020.

 

Fiscal 2019 & 2020 Compensation Peers

   Changes

   3M Company

    Caterpillar Inc.

   Cummins Inc.

    Deere & Company

   Eaton Corporation*

    Emerson Electric Co.*

   Fluor Corporation

    General Dynamics Corporation

  

   Honeywell International, Inc.*

    Ingersoll-Rand plc*

   Parker Hannifin Corporation

    Raytheon Company

   Stanley Black & Decker Inc.

    United Technologies Corporation*

  

Removed: Danaher Corp., DowDuPont Inc., International Paper Company, Lockheed Martin Corporation, Northrop Grumman Corporation, and Whirlpool Corporation

 

Added: Cummins Inc., Fluor Corporation, Ingersoll-Rand plc, Parker Hannifin Corporation, and Stanley Black & Decker Inc.

 

*

The Committee also references a subset of the compensation peers (the ‘select peer group’) marked above with the addition of Lennox International, to provide additional context when setting performance goals under Johnson Controls’ performance-based incentive plans. Lennox International is not included as a compensation peer because it is significantly smaller than Johnson Controls and falls outside of the size criteria. Additional information on the goal setting process is summarized in the following section.

 

 

46        Johnson Controls International plc


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Compensation Discussion & Analysis  ›  Use of Market Data

 

In using the market data, the Committee generally sets an initial guideline of positioning target total direct compensation (base salary, annual incentive target, and long-term incentive target) for each of our executive officers within a range (+/-20%) of the 50th percentile of the compensation peer group. At the time of approval of the compensation peers, Johnson Controls ranked at the 51st percentile with respect to revenue, and 41st percentile with respect to three-year average market cap. The Committee is therefore comfortable that the combination of this market positioning and compensation peer group is appropriate.

Given reliable proxy data is only available for the CEO and CFO, general industry survey data is referenced using the same approach for these as well as all other roles. The variation of actual pay relative to the market data is dependent on the executive officer’s performance, experience, knowledge, skills, level of responsibility, potential to impact our performance and future success, and the need to retain and motivate strategic talent.

METRIC SELECTION AND GOAL SETTING

Central to our pay-for-performance philosophy is maintaining a rigorous goal setting process that is used to determine both our annual and long-term incentive plan performance targets. Each year, management, the Committee, and our independent consultant spend meaningful time determining metrics, goal ranges and testing the appropriateness of our incentive plan thresholds, targets, and maximums.

Each September, the Committee discusses how our incentive plan metrics support our business, talent, and compensation strategies and whether there are any areas for improvement. Against this backdrop, the Committee considered and approved changes informed by shareholder feedback for fiscal 2019.

 

   Changed the measurement period of our PSU goals to a three-year cumulative performance period, rather than three annual measurement periods

 

   Reweighted long-term incentive plan goals as follows:

    

           - 1/3 Three-Year Cumulative Pre-Tax Earnings (previously weighted at 60%)

           - 1/3 Three-Year Average Pre-Tax ROIC (previously weighted at 40%)

           - 1/3 Three-Year Relative TSR versus the S&P 500 Industrials (previously used as a modifier)

  Beginning fiscal 2020, added an individual modifier, allowing the committee to adjust awards -25% to +10%

Both management and the Committee believe these changes further align our compensation strategy with our business strategy and will focus our executives on delivering long-term, sustainable value creation for our stakeholders.

 

2020 Notice and Proxy Statement        47


Table of Contents

Compensation Discussion & Analysis  ›  Metric Selection and Goal Setting

 

Following the agreement of metrics, each December we establish the performance goals and ranges associated with each of them. The objective is to set ranges that contain adequate stretch, but also fit within our risk framework so as not to encourage excessive risk taking. We take account of the Company’s historical and projected performance, historical and expected performance of the S&P Industrials, and historical and projected performance of our select peer group in conjunction with our annual plan and external macro-economic factors impacting our business.

Based on the data, management proposes goal ranges for each performance metric to the Committee, which are also assessed by the independent compensation consultant. In its analysis, our independent consultant assesses the probability of achievement of our threshold, target, and maximum and provides the Committee with an independent perspective on the robustness of our goals. The Committee tests the stretch and potential payouts to ensure they are challenging and the level of performance will be reflected appropriately in the payout levels.

 

LOGO

 

Management

   Independent Consultant   

 

Compensation Committee

Propose goal ranges based on analysis of:

 

  Johnson Controls’ financial forecasts

 

  Historical S&P 500 Industrials performance

 

  Projected S&P 500 Industrials performance

 

  Projected compensation peers’ performance

 

  Analyst expectations

 

  Shareholder feedback

 

  Macro-economic trends

  

Evaluate management-proposed ranges by:

 

  Assessing likelihood of achievement based on historical performance

 

  Validating against analyst expectations of performance

 

  Reviewing absolute value and spread of threshold, target and maximum levels

  

Approves the proposed ranges following a review of materials prepared by management and the independent compensation consultant, and the resolution of any questions raised which may result in revisions to the proposed ranges

Our metric selection and goal setting processes allow for the continual assessment of how our incentives support our strategy and drive shareholder returns.

 

48        Johnson Controls International plc


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Compensation Discussion & Analysis  ›  Fiscal 2019 Compensation Decisions and Outcomes

 

FISCAL 2019 COMPENSATION DECISIONS AND OUTCOMES

BASE SALARY

Following a review of compensation in September 2018, base salaries were left unchanged for fiscal 2019, effective October 1, 2018.

 

       

 

NEO

 

  

 

Fiscal 2018 Base Salary

 

  

 

Fiscal 2019 Base Salary  

 

  

 

Percent Change    

 

 

   George R. Oliver

 

    

 

$

 

 

1,500,000

 

 

 

    

 

$

 

 

1,500,000

 

 

 

  

 

0%

 

 

   Brian J. Stief

 

    

 

$

 

 

742,000

 

 

 

    

 

$

 

 

742,000

 

 

 

  

 

0%

 

 

   Jeffrey M. Williams

 

    

 

$

 

 

742,000

 

 

 

    

 

$

 

 

742,000

 

 

 

  

 

0%

 

 

   Rodney M. Rushing

 

    

 

 

 

 

*

 

 

 

    

 

$

 

 

700,000

 

 

 

  

 

 *

 

 

   John Donofrio

 

    

 

$

 

 

700,000

 

 

 

    

 

$

 

 

700,000

 

 

 

  

 

0%

 

 

   Former NEOs

 

            

 

   William C. Jackson

 

    

 

$

 

 

848,000

 

 

 

    

 

$

 

 

848,000

 

 

 

  

 

0%

 

 

   Joseph A. Walicki

 

    

 

$

 

 

722,000

 

 

 

    

 

$

 

 

722,000

 

 

 

  

 

0%

 

 

*

New NEO for FY 2019

ANNUAL INCENTIVE PERFORMANCE PROGRAM (AIPP)

Our AIPP rewards executives for their execution of our operating plan and other strategic initiatives, as well as for financial performance that drives long-term shareholder value creation. Award opportunities are generally targeted at market 50th percentile. This plan places a significant portion of total cash compensation at risk, thereby aligning executive rewards with financial results. It also offers an opportunity for meaningful pay differentiation tied to the performance of the enterprise and the individual business segments. Payment is capped at 200% regardless of the achievement of the strategic modifiers.

For fiscal 2019, AIPP financial measures were earnings before interest and taxes (EBIT) growth, revenue growth, and adjusted enterprise free cash flow. These measures, defined below, focus our executive officers on the Company’s performance and the business’s profitability, operating strength and efficiency.

 

2020 Notice and Proxy Statement        49


Table of Contents

Compensation Discussion & Analysis  ›  Fiscal 2019 Compensation Decisions and Outcomes

 

 

     

 

Metric, Weight and Definition

 

 

 

Weight  

 

  

 

Why It Matters

 

 

Segment EBIT growth | Net income attributable to each business unit (Corporate is the aggregate of the business units and Corporate), adjusted for income tax expense, financing costs, non-controlling interests, foreign exchange and certain significant special items, such as transaction/integration/separation costs, impairment charges, acquisitions/divestitures, restructuring costs and the adoption of new accounting pronouncements, all as reflected in our audited financial statements that appear in our Annual Report on Form 10-K.

 

 

 

1/3

 

  

 

Aligns annual organic EBIT growth resulting from effective and efficient execution of our operating plan to broadly comparable companies subject to similar external market and economic factors.

 

 

Revenue growth | Revenue for each business unit (Corporate is the aggregate of the business units) adjusted for the impact of foreign exchange and acquisitions/divestitures.

 

 

 

1/3

 

  

 

Aligns annual organic revenue growth resulting from strong sales execution, product and innovation investments, and market share gains to broadly comparable companies subject to similar external market and economic factors.

 

 

Adjusted free cash flow conversion | Free cash flow divided by net income attributable to JCI, both adjusted for certain significant special items such as transaction/integration/separation costs, impairment charges, acquisitions/divestitures, restructuring costs, mark-to-market adjustments related to restricted asbestos investments and pension and post retirement plans, and the adoption of new accounting pronouncements, all as reflected in our audited financial statements that appear in our Annual Report on Form 10-K. Free Cash Flow is defined as cash provided by operating activities less capital expenditures.

 

 

 

1/3

 

  

 

Establishes annual adjusted free cash flow conversion improvement targets resulting from trade working capital and other operating cash flow initiatives accompanied with disciplined capital expenditure management. Our ability to generate cash is critical to our growth and funding of operating activities.

 

 

Strategic modifier | For fiscal 2019, the following metrics were utilized:

  Organic EBIT margin improvement

  Secured order margin improvement

  Organic secured orders growth

The same metrics and overall modifier apply to all NEOs.

 

 

 

Modifier +/- 25%

 

  

 

Establishes specific financial and operating improvement metrics each year which are critical to support delivery of our operating plan.

 

For Messrs. Oliver, Stief and Donofrio, 100% of the financial portion of the AIPP earned is based on performance relative to Corporate results. For Messrs. Williams and Rushing, 50% of the financial portion of the AIPP earned is based on performance relative to Building Technologies and Solutions and 50% relative to Corporate results. Actual payout can range from zero to two times the target payout percentage for the financial portion, depending on the achievement of goals, with the potential payments increasing as performance improves.

In response to the departures of Messrs. Jackson and Walicki during fiscal 2019, the Committee determined that they would receive no AIPP payout given their separation from the Company and payouts they received under their legacy change-in-control agreements.

 

50        Johnson Controls International plc


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Compensation Discussion & Analysis  ›  Fiscal 2019 AIPP Performance

 

Fiscal 2019 AIPP Performance

Fiscal 2019 was a solid year for the Company, with delivery on all financial and strategic commitments. This was evidenced through organic sales growth of over 5%, orders and backlog up over 5% and 8% respectively on an organic basis, double-digit EBIT growth, strong margin execution and cash generation, with cash conversion at 99%. This aggregate performance resulted in annual bonuses being earned above target, with payouts ranging from 144% to 154% of target depending on role.

 

         

Fiscal 2019 Performance Goals    

 

 

Payout Factor    

 

 

Performance Metric

 

 

 

Weight   

 

 

 

Threshold   

 

 

 

Target   

 

 

 

Maximum   

 

 

 

Actual   

 

Corporate – 100% Applies to Messrs. Oliver, Stief and Donofrio & 50% Applies to Messrs. Williams and Rushing

EBIT Growth

 

1/3

 

6.0%

 

10.0%

 

14.0%

 

12.2%

 

Revenue Growth

 

1/3

 

4.0%

 

  5.0%

 

  7.0%

 

  5.1%

 

147%

Adjusted Enterprise Free Cash Flow Conversion

 

1/3

 

90%

 

  95%

 

 100%

 

   99%

 

Building Technologies & Solutions – 50% Applies to Messrs. Williams and Rushing

EBIT Growth

 

1/3

 

6.5%

 

 9.0%

 

12.5%

 

   8.8%

 

Revenue Growth

 

1/3

 

4.0%

 

 5.0%

 

  7.0%

 

   5.1%

 

127%

Adjusted Enterprise Free Cash Flow Conversion

 

1/3

 

 90%

 

  95%

 

 100%

 

    99%

   

 

Strategic Modifier Metric

 

 

Performance    
Goal    

 

 

Modifier %    

 

 

Results

 

Achievement of YOY Organic EBIT Margin Improvement

 

> 80 bps    

 

+10%    

 

70 bps

 

0%

 

< 50 bps    

 

-10%    

Achievement of YOY Secured Order Margin Improvement

 

> 90 bps    

 

+10%    

 

120 bps

 

10%

 

< 60 bps    

 

-10%    

Achievement of YOY Secured Orders

 

> 9%    

 

+5%    

 

5%

 

-5%

 

< 6%    

 

-5%    

Total Strategic Modifier     

 

+/-25%    

 

+5%

The table below summarizes the target award potential and actual payout amounts for Messrs. Oliver, Stief, Williams, Rushing and Donofrio for fiscal 2019 after applying the 1.05 strategic initiative performance modifier described above.

 

NEO

 

 

Target
Opportunity
(% salary)

 

 

Target
Opportunity

 

 

Financial
Payout Factor

 

 

Strategic
Modifier

 

 

Total Payout
Factor

 

 

Fiscal 2019 Annual   
Incentive Award   

 

George R. Oliver

   

 

160

%

   

 

$2,400,000

   

 

147

%

   

 

1.05

   

 

154.35

%

   

 

$3,704,400

Brian J. Stief

   

 

110

%

   

 

$   816,200

   

 

147

%

   

 

1.05

   

 

154.35

%

   

 

$1,259,805

Jeffrey Williams

   

 

90

%

   

 

$   667,800

   

 

137

%

   

 

1.05

   

 

143.85

%

   

 

$   960,630

Rodney Rushing

   

 

90

%

   

 

$   630,000

   

 

137

%

   

 

1.05

   

 

143.85

%

   

 

$   906,255

John Donofrio

   

 

90

%

   

 

$   630,000

   

 

147

%

   

 

1.05

   

 

154.35

%

   

 

$   972,405

 

2020 Notice and Proxy Statement        51


Table of Contents

Compensation Discussion & Analysis  ›  Long-Term Equity Incentive Awards

 

LONG-TERM EQUITY INCENTIVE AWARDS

Another key element in the compensation of our executive team is long-term equity incentive awards, which tie a significant portion of compensation to the Company’s performance over time. In fiscal 2019, three different types of long-term incentive vehicles were granted to our NEOs:

 

 

LOGO

In combination, we believe these grants provide a balanced focus on sustainable long-term shareholder value creation and retention of key executives in the interests of our collective stakeholders. They are also reflective of market practice within our compensation peer group. The total target grant value is established based on generally targeting the market 50th percentile.

 

         

FISCAL 2019 LONG-TERM EQUITY GRANT

 

 

 

VALUE OF
SHARE
OPTIONS

 

VALUE OF

RSUs

 

VALUE OF
PSUs

 

 

TOTAL TARGET
VALUE OF
AWARD

 

George R. Oliver

 

$2,375,000

 

$2,375,000

 

$4,750,000

 

$9,500,000

Brian J. Stief

 

$   670,750

 

$   670,750

 

$1,341,500

 

$2,683,000

Jeffrey Williams

 

$   500,000

 

$   500,000

 

$1,000,000

 

$2,000,000

John Donofrio

 

$   500,000

 

$   500,000

 

$1,000,000

 

$2,000,000

Rodney Rushing

 

$   500,000

 

$   500,000

 

$1,000,000

 

$2,000,000

Former NEOs

William C. Jackson

 

$   689,750

 

$   689,750

 

$1,379,500

 

$2,759,000

Joseph Walicki

 

$   658,000

 

$   658,000

 

$1,316,000

 

$2,632,000

Fiscal 2019 Performance Share Units (PSUs)

PSUs help to ensure our executives’ pay is directly linked to the achievement of strong, sustained long-term operating performance. The balance of metrics focuses senior leaders on making strategic investments that optimize long-term shareholder value.

 

52        Johnson Controls International plc


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Compensation Discussion & Analysis  ›  Fiscal 2019 Performance Share Units (PSUs)

 

In response to shareholder feedback, the Committee considered and approved several changes to the operation of PSUs for fiscal 2019. The 2019-2021 awards are subject to three independently weighted measures, with performance assessed over three cumulative years.

 

     

Metric, Weight and Definition

 

  

Weight

 

    

Why It Matters

 

Pre-tax earnings growth | Income before income taxes and foreign exchange, adjusted for certain significant special items, such as transaction/ integration/ separation costs, gain or loss on divestitures, impairment charges, restructuring costs mark-to-market adjustments related to restricted asbestos investments and pension and post retirement plans and the adoption of new accounting pronouncements, all as reflected in our audited financial statements that appear in our Annual Report on Form 10-K.

 

     1/3      Aligns three-year organic pre-tax earnings growth resulting from the effective execution of our strategic operating plan to broadly comparable companies subject to similar external market and economic factors. Our ability to generate long-term profitability is critical to our growth and funding of operating activities.

Pre-tax ROIC | ROIC is income before income taxes and foreign exchange, adjusted for certain significant special items, such as transaction/ integration/ separation costs, gain or loss on divestitures, impairment charges, restructuring costs, mark-to-market adjustments related to restricted asbestos investments and pension and post retirement plans, and the adoption of new accounting pronouncements, all as reflected in an audited financial statement that appear in our Annual Report on Form 10-K, divided by pre-tax invested capital. Pre-tax invested capital is the monthly weighted average sum of shareholders equity plus total debt, less cash and income tax accounts, adjusted for acquisitions/ divestitures and other special items.

 

     1/3      Establishes three-year pre-tax return on invested capital improvement targets resulting from the effective execution of our strategic operating plan and the efficient deployment of capital to enhance long-term shareholder value. Our ability to generate adequate returns on our investments is critical to our growth and funding of operating activities.
Relative TSR | Percentage change in Johnson Controls’ share price over the performance period (with an adjustment for reinvestment of dividends) relative to S&P 500 Industrials. Share prices are averaged over 30 days at the start and end of the performance period.      1/3      Aligns Johnson Controls’ three-year stock performance, including reinvestment of dividends, to broadly comparable companies with similar external market and economic factors. Investors recognize TSR as an appropriate measure to motivate executives and achieve alignment with shareholder interests.

The Committee set the earnings growth and ROIC thresholds, targets and maximums for the fiscal years 2019-2021 performance period based on Johnson Controls’ long-term strategic plan, as well as consideration of long-term performance expectations for the S&P 500 Industrials. This approach ensures that we provide competitive incentive compensation based on market competitive performance while continuing to focus on our strategic long-term commitments. Given the commercial sensitivity of our long-term goals, the 2019 PSU performance goals will be disclosed at the conclusion of the three-year performance period.

 

     
    

Weight 

 

  Fiscal 2019 Performance Goals

Performance Metric

 

 

Threshold

 

 

Target

 

 

Maximum

 

Pre-tax Earnings Growth

 

1/3rd

  The three-year performance goals associated with these measures will be disclosed at the conclusion of the performance period

Pre-tax ROIC

 

1/3rd

Relative TSR vs. S&P 500 Industrials

 

1/3rd

 

> 25th percentile

 

> 50th  percentile

 

> 75th percentile

The payout opportunity in respect of each element is calculated separately and weighted to arrive at a final payout.

 

         
     

Below Threshold         

   Threshold             Target             Maximum         

Payout (% of Target)

   0%    25%    100%    200%

The payout is calculated using interpolation between threshold and target, and target and maximum.

 

2020 Notice and Proxy Statement        53


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Compensation Discussion & Analysis  ›  Fiscal 2018 and Fiscal 2017 Performance Share Units (PSUs)

 

Fiscal 2018 and Fiscal 2017 Performance Share Units (PSUs)

Prior to the changes approved for fiscal 2019, PSU awards vest subject to pre-tax earnings growth and pre-tax ROIC, measured over three one-year periods, and a relative TSR modifier.

Fiscal 2018 PSUs

 

                                                                                                                             
       

Performance Metric

  Weight    Performance 
Period
  Fiscal 2018 Performance Goals (2018-2020)
  Threshold   Target   Maximum   Actual

Pre-Tax Earnings Growth

 

60%

 

2019

 

5.0%

 

9.2%

 

13.4%

 

16.3%

Pre-Tax ROIC

 

40%

 

+80 bps

 

+120 bps

 

+160 bps

 

+190 bps

 

TSR Relative Modifier vs S&P 500 Industrial Index

 

 

N/A

 

 

  2018 - 2020  

 

 

To be assessed at the end of the performance cycle; subject to the same goals as described in respect of the Fiscal 2017 – 2019 grant below

With respect to fiscal year 2019 for FY 2018-2020 award, Pre-Tax Earnings Growth was 16.3% and Pre-Tax ROIC was +190 bps, which resulted in aggregate performance for fiscal year 2019 of 67% of weighted target performance, exclusive of the TSR Modifier.

Fiscal 2017 PSUs

 

       

Performance Metric

  Weight   Performance
Period
  Fiscal 2017 Performance Goals (2017-2019)
  Threshold   Target   Maximum   Actual

 

Pre-Tax Earnings Growth

 

 

70%

  2019  

 

3.0%

 

 

7.0%

 

 

15.5%

 

 

13.0%

 

Pre-Tax ROIC

 

 

30%

 

 

+120 bps

 

 

+160 bps

 

 

+200 bps

 

 

+200 bps

 

TSR Relative Modifier vs S&P 500 Industrial Index

 

 

N/A

 

 

2017 - 2019

 

 

< 25th

percentile

 

 

25th – 75th

percentile

 

 

> 75th

percentile

 

 

25th

percentile

With respect to fiscal year 2019 for the FY 2017-2019 award Pre-Tax Earnings Growth was 13% and Pre-Tax ROIC was +200 bps, which resulted in aggregate performance for fiscal year 2019 of 60% of weighted target performance, exclusive of the TSR modifier.

Fiscal 2019 marked the final year of the three-year performance period for the fiscal 2017-2019 awards. Based on aggregate performance over the three-years, awards vested at 146% of target.

 

Fiscal Year

  Annual     
Performance     
Factor      
  Annual     
Weighting     
  Weighted     
Performance     

2017

 

126%

 

1/3

 

  42%

2018

 

132%

 

1/3

 

  44%

2019

 

180%

 

1/3

 

  60%

Total Payout Percentage

 

146%

2017-2019 Relative TSR Modifier

 

  1.0    

2017 – 2019 PSU Final Payout Percentage

 

146%

Fiscal 2019 Share Options and Restricted Share Units (RSUs)

By awarding share options and RSUs, we link long-term incentives directly to our share price. If our share price decreases, so does the value of the executive officer’s compensation. Share options and RSUs also help us maintain competitive compensation levels in the market and retain high-performing employees through multi-year vesting requirements.

We valued fiscal 2019 share options using a Black-Scholes valuation. Their strike price is equal to the closing price of our common shares on the date of the grant. Fifty percent of each share option award vests two years after the date of grant, and

 

54        Johnson Controls International plc


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Compensation Discussion & Analysis  ›  Fiscal 2019 Share Options and Restricted Share Units (RSUs)

 

the other fifty percent vests three years after the date of grant. Share option vesting is subject to continued employment, with earlier vesting upon retirement, and share options have a ten-year exercise term. The Committee does not permit or engage in “backdating,” repricing or cash buyout of share options.

We value RSUs based on the closing price of our shares at the date of grant. RSUs generally vest in equal installments over three years.

ADDITIONAL INFORMATION

OTHER EXECUTIVE COMPENSATION POLICIES

To further ensure the alignment of executive interests with those of our shareholders, the Committee has approved additional compensation-related policies that apply to our NEOs.

SHARE OWNERSHIP GUIDELINES

NEOs are required to hold specified amounts of Johnson Controls shares. If an executive does not meet the minimum guideline within five years, they cannot sell any shares until they meet the requirement. Until the guideline is met, executives are required to retain after-tax shares resulting from an exercise of share options and must retain shares resulting from the vesting of restricted share units and performance share units. All shares directly or indirectly owned by, and restricted share units granted to, NEOs count towards the requirement. Share options do not count. At the end of fiscal 2019, all NEOs were in compliance with their ownership requirements, demonstrating the strong alignment of interests between our NEOs and Johnson Controls’ stakeholders.

 

   

Role

   Minimum Ownership Requirement     
(% base salary)

Chairman & Chief Executive Officer

   600%

All Other NEOs (excludes former NEOs)

   300%

COMPENSATION RECOUPMENT POLICY

Our recoupment policy provides that following any accounting restatement, in addition to any other remedies available to it and subject to applicable law, if the Board or any Committee of the Board determines that any annual or other incentive payment received by an executive officer resulted from any financial result or operating metric that was impacted by the executive officer’s fraudulent or illegal conduct, the Board or a Board Committee could recover from the executive officer that compensation it considered appropriate under the circumstances. The Board has the sole discretion to make any and all determinations under this policy. The Committee continues to monitor trends and developments with respect to incentive compensation recoupment policies.

INSIDER TRADING, ANTI-HEDGING AND ANTI-PLEDGING POLICY

Employees may not buy, sell or engage in other transactions in the Company’s shares while aware of material non-public information; buy or sell securities of other companies while aware of material non-public information about those companies that they became aware of as a result of business dealings between the Company and those companies; disclose material non-public information to any unauthorized persons outside of the Company; or engage short sales or hedging transactions through puts, calls, or any other derivative securities involving the Company’s securities. The policy also restricts trading for a limited group of Company employees (including executives and directors) to defined window periods that follow our quarterly earnings releases. In addition, the Company’s directors and executive officers are prohibited from pledging any Company securities held by them or their families as security for a loan, including by holding such securities in a margin account.

EXECUTIVE BENEFITS AND PERQUISITES

401(k) Plan

All U.S. employees are eligible for the 401(k) plan, including our NEOs. Participants can contribute up to a specified percentage of their compensation on a pre-tax basis; however, executive officers’ percentages may be lower than other participants due to IRS requirements applicable to the 401(k) plan.

Based on Company performance, we matched 100% of each dollar an employee contributes up to 4% of the employee’s eligible pay, and 50% of each additional dollar up to a total of 6% of the employee’s eligible pay. In addition, the Company makes a varied annual retirement contribution for eligible employees. This group of employees includes all NEOs. The contribution for this group of employees was between 1% and 5% of the participant’s eligible compensation, based on the participant’s age and participation or service. Both the matching contribution and the annual retirement contribution are subject to vesting requirements.

 

2020 Notice and Proxy Statement        55


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Compensation Discussion & Analysis  ›  Executive Benefits and Perquisites

 

Prior to the Merger, legacy Johnson Controls also maintained a pension plan, which covered all U.S. salaried employees hired before January 1, 2006. This plan was frozen on December 31, 2014, and employees no longer accrue future pension benefits under this plan. Mr. Williams and Mr. Rushing are the only NEOs who participate in the plan.

Retirement Restoration Plan

The Internal Revenue Code limits the benefits we can provide to employees under the 401(k) plan, including the annual retirement contribution. Thus, we sponsor the Retirement Restoration Plan, which allows all employees whose annual retirement contributions are affected by these Internal Revenue Code limits to receive the full intended amount of the additional annual retirement contributions without regard to such limits. All employees whose annual retirement contributions under the 401(k) plan are limited, including NEOs, are eligible for the Retirement Restoration Plan. Prior to January 1, 2018, the Retirement Restoration Plan also provided for 401(k) spillover deferrals and employer matching contributions for eligible participants. Those benefits were eliminated as of January 1, 2018 for participants other than those participants who were officers of the Company immediately following the Merger including our NEOs, Messrs. Oliver, Stief, Jackson and Williams and certain other high-level employees who participated in the Retirement Restoration Plan prior to the Merger.

Executive Deferred Compensation Plan and Senior Executive Deferred Compensation Plan

Prior to January 1, 2018, we maintained the Executive Deferred Compensation Plan, which assisted all senior leaders, including NEOs, with personal financial planning by allowing participants to defer compensation and associated taxes until retirement or termination of employment. It also assisted senior leaders in the management of their executive share ownership requirements. Investment options in the Executive Deferred Compensation Plan mirrored investment options available in our 401(k) Plan.

As of January 1, 2018, to integrate our plans following the Merger, we froze the Executive Deferred Compensation Plan and adopted a new Senior Executive Deferred Compensation Plan. The new Senior Executive Deferred Compensation Plan allows participants, including our NEOs, to defer base salary and annual bonus compensation and the associated taxes until retirement or termination of employment to assist such participants with personal financial planning. The investment options under the new Senior Executive Deferred Compensation Plan continue to mirror investment options in our 401(k) Plan.

PERQUISITES

We provide a limited amount of perquisites to our executive officers which we believe are reasonable and consistent with market practice. We maintain a strict policy regarding eligibility and use of these benefits. The Committee grants each executive officer a perquisite allowance of 5% of base salary annually. Upon termination, any unused funds are forfeited. Allowable perquisites include:

 

 

Financial and tax planning

 

 

Personal use of corporate aircraft capped at $10,000 per year for the NEOs, excluding the CEO, with such amounts calculated pursuant to the Standard Industry Fare level, or SIFL rate

 

 

Executive physical

Effective fiscal 2019, private club dues are no longer eligible for reimbursement under the perquisite allowance and unused allowance will not carry over. The CEO is encouraged to use the corporate aircraft for both business and personal use to enhance his productivity, maintain confidentiality and ensure personal security.

 

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Compensation Discussion & Analysis  ›  Executive Severance and Change-in-Control Policy

 

EXECUTIVE SEVERANCE AND CHANGE-IN-CONTROL POLICY

In response to shareholder concerns and in connection with a review the Company’s various executive compensation programs, in December 2017, the Committee revised and updated the Company’s Executive Severance and Change-in-Control Policy to better reflect market practice and to facilitate the transition from legacy change-in-control agreements to a unified policy. The following policy applies to all NEOs, except Mr. Stief. In connection with a retention award made to Mr. Stief in September 2017, Mr. Stief terminated his change-in-control agreement and agreed to not be covered by the Company’s Severance and Change-in-Control Policy.

 

     
    

Change-In-Control

 

  

Severance

 

 

Triggers

  

 

   Involuntary termination other than for Cause, permanent disability or death within the period beginning 60 days prior to and ending two years following a change-in-control

 

   Good reason resignation within the same period

  

 

   Involuntary termination other than for Cause, permanent disability or death

 

   Good reason resignation

 

Cash Severance

 

  

 

Base salary + target annual bonus

 

Severance Multiple

 

  

CEO: 3X

Other NEOs: 2X

 

  

CEO: 2X

Other NEOs: 1.5X

 

 

Claims Release

 

  

 

Required

 

Benefits Continuation

 

  

Aligned with severance multiple

 

 

Equity Acceleration

 

  

 

   Committee to provide either for adjustment/assumption of award or a cash settlement

 

   Pro-rated equity acceleration based on number of days worked during vesting period upon a subsequent termination without cause or with good reason within two years after the transaction (pro-rated PSUs based on target performance)

 

  

 

   Pro-rated equity acceleration based on number of days worked during vesting period (pro-rated PSUs based on actual performance earned at vesting)

 

 

Excise Tax Gross-Up

 

  

 

None

 

 

Restrictive Covenants

  

 

   Unlimited time for non-disparagement, trade secrets and confidential information

 

   Two-year post-termination non-solicitation of employees and customers

 

   One and one-half year post-termination non-compete

 

   Employee must affirmatively consent to be bound by these covenants as a condition of
plan participation

 

EXECUTIVE DEPARTURES IN FISCAL 2019

Messrs. Jackson and Walicki were both subject to legacy change-in-control employment agreements that provided for severance benefits in the event of a qualifying termination such as that experienced in fiscal 2019, which was within 36 months of the merger.

The Committee approved payments in-line with their contractual agreements, representing the last of their kind with all of our NEOs now subject to the change-in-control and severance policies described above. In summary, the terms provided for:

 

 

A lump sum severance payment equal to three times the executive officer’s annual cash compensation, which includes the executive officer’s annual base salary and the greater of (a) the average of the executive officer’s annualized annual cash bonuses and long-term performance awards for the three fiscal years preceding the change-in-control, or (b) the sum of the annual cash bonus and long-term performance award for the most recently completed fiscal year (such greater amount, “average performance bonus”);

 

2020 Notice and Proxy Statement        57


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Compensation Discussion & Analysis  ›  Executive Severance And Change-in-Control Policy

 

 

 

Payment of a pro rata portion of the executive officer’s average performance bonus

The Committee was aware that shareholders were uncomfortable with the nature of these legacy agreements. Accordingly, when there was the opportunity to exercise discretion, the Committee did so with this in mind. The Company was not required to make annual incentive payments in respect of performance during fiscal 2019, and so the Committee resolved that no payments would be made.

GLOBAL EXECUTIVE ASSIGNMENT AGREEMENT

In March 2017, Mr. Williams accepted the officer position of Vice President & President, EMEA & Latin America – Building Technologies and Solutions. This new role required Mr. Williams to relocate from the United States to the United Kingdom for the duration of his three-year assignment, and in connection with this move Mr. Williams’ entered into a global assignment agreement that is substantially consistent with the policy applicable to all Johnson Controls employees, which is designed to ameliorate the increased costs associated with global assignments. The agreement includes an allowance to offset the difference in costs of living, a relocation allowance, furnished housing, reimbursement for certain dependent visitation costs, tax equalization in accordance with the Johnson Controls Tax Equalization Policy, a club membership in the United Kingdom and reimbursement of repatriation costs such as travel, temporary housing and car rental and the shipment of goods.

TAX AND ACCOUNTING CONSIDERATIONS

When determining total direct compensation packages, the Committee considers all factors that may have an impact on our financial performance, including tax and accounting rules.

Section 162(m) of the Internal Revenue Code limits the tax deductibility of compensation that we pay to certain covered employees, generally including our NEOs, to $1 million in any year per person.

Prior to fiscal 2019, this limitation did not apply to performance-based compensation if certain conditions were met and did not apply to compensation paid to our Chief Financial Officer, who was not considered a covered employee. Beginning in fiscal 2019, because of changes made to Section 162(m) by the Tax Cuts and Jobs Act, performance-based compensation is generally subject to the $1 million limit in the same way as other compensation, and the covered employees for any fiscal year include any person who served as our Chief Executive Officer or Chief Financial Officer at any point during the fiscal year, any other person whose compensation was otherwise required to be included in our proxy statement by reason of being among the three highest compensated officers for the fiscal year and any other person who was a covered employee for any fiscal year beginning after December 31, 2016.

Qualifying compensation that we pay under a binding contract that was in effect on November 2, 2017 and that is not materially modified after that date will continue to be exempt from the deduction limit under a transition rule.

Our compensation philosophy strongly emphasizes performance-based compensation for our executive officers, which historically minimized the consequences of the Section 162(m) limit on deductibility. Regardless, the Committee believed and continues to believe that the tax deduction limitation should not compromise its ability to design and maintain executive compensation arrangements necessary to attract and retain strong executive talent. Accordingly, achieving the desired flexibility in the design and delivery of compensation may result in compensation that in certain cases is not deductible for federal income tax purposes, particularly given the changes to Section 162(m).

EXECUTIVE COMPENSATION

The Compensation Committee has reviewed and discussed with management this Compensation Discussion & Analysis and, based on such review and discussion, has recommended to the Board of Directors that the Compensation Discussion & Analysis be included in the Company’s 2019 Annual Report on Form 10-K and this Proxy Statement.

Submitted by the Compensation Committee:

Michael E. Daniels, Chair

Jean Blackwell

Roy Dunbar

Mark Vergnano

 

58        Johnson Controls International plc


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Compensation Discussion & Analysis  ›  Executive Compensation Tables

 

EXECUTIVE COMPENSATION TABLES

The following table summarizes the compensation earned by our named executive officers in the fiscal years noted.

Summary Compensation Table for Fiscal Years 2019, 2018, and 2017

 

                   

Name and

Principal Position

  Year
($)
   

Salary

($)(1)

    Bonus
($)
   

Stock/Unit
Awards

($)(2)

    Option
Awards
($)
(2)
   

Non-Equity
Incentive

Plan
Compensation
($)
(3)

   

Change in
Pension

Value and
Non-Qualified
Deferred
Compensation
Earnings

($)(4)

    All Other
Compensation
($)
(5)
   

Total

($)

 

(a)

 

 

(b)

 

   

(c)

 

   

(d)

 

   

(e)

 

   

(f)

 

   

(g)

 

   

(h)

 

   

(i)

 

   

(j)

 

 

George Oliver

Chairman & Chief Executive Officer

 

 

2019

 

 

 

1,500,000

 

 

 

 

 

 

7,124,992

 

 

 

2,374,998

 

 

 

3,704,400

 

 

 

 

 

 

772,247

 

 

 

15,476,637

 

 

 

2018

 

 

 

1,500,000

 

 

 

 

 

 

7,124,963

 

 

 

2,374,997

 

 

 

3,864,000

 

 

 

 

 

 

529,908

 

 

 

15,393,868

 

 

 

2017

 

 

 

1,250,000

 

 

 

 

 

 

6,187,444

 

 

 

2,359,750

 

 

 

2,449,142

 

 

 

 

 

 

346,169

 

 

 

12,592,506

 

Brian J. Stief

Vice Chairman & Chief Financial Officer

 

 

2019

 

 

 

742,000

 

 

 

 

 

 

2,012,215

 

 

 

670,747

 

 

 

1,259,805

 

 

 

 

 

 

224,568

 

 

 

4,909,335

 

 

 

2018

 

 

 

742,000

 

 

 

 

 

 

2,012,210

 

 

 

670,744

 

 

 

1,314,084

 

 

 

 

 

 

334,324

 

 

 

5,073,362

 

 

 

2017

 

 

 

742,000

 

 

 

 

 

 

22,012,083

 

 

 

670,473

 

 

 

1,102,892

 

 

 

 

 

 

276,604

 

 

 

24,804,052

 

Jeffrey M. Williams

VP & President — Global Products, Building Technologies and Solutions

 

 

2019

 

 

 

742,000

 

 

 

 

 

 

1,499,979

 

 

 

500,000

 

 

 

960,630

 

 

 

288,674

 

 

 

378,279

 

 

 

4,369,562

 

 

 

2018

 

 

 

742,000

 

 

 

 

 

 

1,499,967

 

 

 

499,993

 

 

 

1,102,037

 

 

 

 

 

875,453

 

 

 

4,719,450

 

 

 

2017

 

 

 

742,000

 

 

 

 

 

 

1,583,425

 

 

 

416,327

 

 

 

761,935

 

 

 

34,504

 

 

 

604,647

 

 

 

4,142,838

 

Rodney M. Rushing

VP & President — North America, Building Technologies & Solutions

 

 

2019

 

 

 

700,000

 

 

 

 

 

 

1,499,979

 

 

 

500,000

 

 

 

906,255

 

 

 

243,600

 

 

 

204,883

 

 

 

4,054,717

 

                 

John Donofrio

EVP, General Counsel

 

 

2019

 

 

 

700,000

 

 

 

 

 

 

1,499,979

 

 

 

500,000

 

 

 

972,405

 

 

 

 

 

168,081

 

 

 

3,840,465

 

 

 

2018

 

 

 

615,152

 

 

 

500,000

 

 

 

3,999,948

 

 

 

499,993

 

 

 

845,250

 

   

 

78,684

 

 

 

6,539,027

 

Former Officers

                 

William C. Jackson(6)

VP & President — Global Products, Building Technologies and Solutions and Corporate Strategy

 

 

2019

 

 

 

730,585

 

 

 

 

 

 

2,069,212

 

 

 

689,746

 

 

 

 

 

 

 

 

 

15,409,355

 

 

 

18,898,898

 

 

 

2018

 

 

 

848,000

 

 

 

 

 

 

2,069,221

 

 

 

689,744

 

 

 

1,259,474

 

 

 

 

 

 

367,819

 

 

 

5,234,258

 

 

 

2017

 

 

 

848,000

 

 

 

 

 

 

2,069,205

 

 

 

689,467

 

 

 

797,069

 

 

 

 

 

 

263,026

 

 

 

4,666,767

 

Joseph A. Walicki(7)

VP & President — Power Solutions

 

 

2019

 

 

 

421,167

 

 

 

 

 

 

1,973,950

 

 

 

657,998

 

 

 

 

 

 

79,014

 

 

 

12,728,476

 

 

 

15,860,605

 

 

 

2018

 

 

 

722,000

 

 

 

 

 

 

1,973,953

 

 

 

657,998

 

 

 

885,518

 

 

 

 

 

 

190,559

 

 

 

4,430,027

 

 

 

2017

 

 

 

722,000

 

 

 

 

 

 

1,935,434

 

 

 

657,730

 

 

 

875,607

 

 

 

23,484

 

 

 

238,900

 

 

 

4,453,155

 

 

(1) 

Deferred Amounts Included: We have not reduced amounts that we show to reflect a named executive officer’s election, if any, to defer the receipt of compensation into our qualified and nonqualified deferred compensation plans.

 

(2) 

Stock/Unit Awards and Option Awards: The amounts reflect the fair value of equity awards granted in fiscal 2019, 2018, and 2017. The equity awards granted in fiscal 2019 to each named executive officer consisted of share options, restricted share units (“RSUs”) and performance share units (“PSUs”). The amounts in columns (e) and (f) represent the fair value of the entire amount of the award calculated in accordance with Financial Accounting Standards Board ASC Topic 718, excluding the effect of estimated forfeitures. For share options, amounts are computed by multiplying the fair value of the award (as determined under the Black-Scholes option pricing model) by the total number of options granted. For RSUs, fair value is computed by multiplying the total number of shares subject to the award by the closing market price of our ordinary shares on the date of grant. For PSUs, fair value is based on a model that considers the closing market price of our ordinary shares on the date of grant, the range of shares subject to such stock award, and the estimated probabilities of vesting outcomes. The value of PSUs included in the table assumes target performance. The values of the PSUs at the grant date if the highest level of performance conditions were to be achieved would be as follows: Mr. Oliver — $9,499,989; Mr. Stief — $2,682,953; Mr. Williams — $1,999,994; Mr. Rushing — $1,999,994 Mr. Donofrio — $1,999,994, Mr. Jackson — $2,758,948 and Mr. Walicki — $2,631,933. Footnote 12 to our audited financial statements for the fiscal year ended September 30, 2019, which appears in our Annual Report on Form 10-K that we filed with the Securities and Exchange Commission on November 21, 2019, includes assumptions that we used in the calculation of the equity award values.

 

(3) 

Non-Equity Incentive Plan Compensation: The amounts reported in column (g) for each named executive officer reflect annual cash incentive compensation. Messrs. Jackson and Walicki did not receive any annual cash incentive compensation for fiscal 2019 due to their separations from employment prior to the end of the fiscal year.

 

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Compensation Discussion & Analysis  ›  Executive Compensation Tables

 

 

(4) 

Change In Pension Value: The amounts reported in column (h) generally reflect the actuarial change in the present value of benefits under the qualified defined benefit pension plan established by Johnson Controls, determined as of the measurement dates used for financial statement reporting purposes for the fiscal year indicated and using interest rate and mortality rate assumptions consistent with those reflected in our audited financial statements for the fiscal year indicated. The value that an executive will actually receive under the plan will differ to the extent facts and circumstances vary from what the calculations assume. Changes in the present value of the named executive officer’s benefits are the result of the assumptions applied (as discussed in the footnotes to the “Pension Benefits as of September 30, 2019” table below). No named executive officer received preferential or above market earnings on nonqualified deferred compensation.

 

(5) 

All Other Compensation: The fiscal 2019 amounts reported in column (i) for each named executive officer consist of the following:

 

                 

Named

Executive

 

 

Personal
Use of
Company
Aircraft
(a)

 

 

Expatriate &
Relocation
Benefits
(b)

 

 

Tax
Gross-

Up(c)

 

 

Retirement
Plan
Contributions
(d)

 

 

Company
Vehicle
(e)

 

 

Financial
Planning
(f)

 

 

Cash
Severance
Payments
(g)

 

 

Total All Other
Compensation
(h)

 

George Oliver

   

 

217,986

   

 

   

 

   

 

536,400

   

 

17,861

   

 

   

 

   

 

772,247

Brian J. Stief

   

 

   

 

   

 

   

 

205,608

   

 

14,267

   

 

4,693

   

 

   

 

224,568

Jeffrey M. Williams

   

 

   

 

110,744

   

 

9,151

   

 

221,284

   

 

   

 

37,100

   

 

   

 

378,279

Rodney M. Rushing

   

 

   

 

   

 

7,000

   

 

168,314

   

 

5,674

   

 

23,895

   

 

   

 

204,883

John Donofrio

   

 

   

 

   

 

   

 

118,370

   

 

14,711

   

 

35,000

   

 

   

 

168,081

William C. Jackson

   

 

   

 

   

 

   

 

189,673

   

 

14,565

   

 

   

 

15,205,117

   

 

15,409,355

Joseph A. Walicki

   

 

   

 

   

 

   

 

176,827

   

 

4,615

   

 

4,400

   

 

12,542,634

   

 

12,728,476

 

a) 

The Summary Compensation Table reflects the aggregate incremental pre-tax cost to us for personal use of aircraft for fiscal 2019, which was calculated using a method that takes into account the incremental cost of fuel, trip-related maintenance, crew travel expenses, on-board catering, landing fees, trip-related hangar/parking costs and other variable costs. Because our aircraft are used primarily for business travel, the calculation does not include the fixed costs that do not change based on usage, such as pilots’ salaries, the acquisition costs of our owned or leased aircraft, and the cost of maintenance not related to trips.

 

(b) 

Mr. Williams received the relocation benefits set forth below as part of his expatriate assignment set forth below.

 

           
 

Housing

 

Relocation

 

Vehicle

 

Other Expatriate
Benefits &
Allowances

 

Total

 

Jeffrey M. Williams

 

79,101

 

8,393

 

16,083

 

7,166

 

110,744

 

(c) 

The amount shown for Mr. Williams represents tax equalization payments made to him in connection with his expatriate assignment disclosed in the preceding footnote. The amount shown for Mr. Rushing represents a tax gross-up payment made with respect to the historical expatriate assignment benefits provided in an earlier fiscal year.

 

(d) 

Retirement plan contributions include matching contributions made on behalf of each executive to the Company’s tax-qualified 401(k) plans and Retirement Restoration Plan.

 

(e) 

Amounts reflect costs attributable to the personal use of a vehicle.

 

(f) 

Amounts reflect payments with respect to financial planning for Messrs. Stief, Williams, Rushing, Donofrio and Walicki.

 

(g) 

Amount reflects cash severance in connection with Messrs. Jackson’s and Walicki’s separation from employment. The cash severance amount was subject to a 6-month delay pursuant to Code Section 409A and will be paid to Mr. Jackson in February 2020 and was paid to Mr. Walicki in October 2019.

 

(6) 

Mr. Jackson resigned effective as of August 9, 2019.

 

(7) 

Mr. Walicki left employment with Johnson Controls in connection with the disposition of its Power Solutions business effective April 30, 2019.

 

60        Johnson Controls International plc


Table of Contents

Compensation Discussion & Analysis  ›  Fiscal 2019 Grants of Plan-Based Awards Table

 

Fiscal 2019 Grants of Plan-Based Awards Table

The following table summarizes cash-based and equity-based awards for each of the named executive officers that were granted in fiscal 2019.

 

               
           Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards
    Estimated Future Payouts
Under Equity Incentive Plan
Awards
   

All Other
Stock
Awards:

Number of
Shares of
Stock (#)

   

All Other
Option
Awards:

Number of
Securities
Underlying
Options
(#)

    Exercise
or Base
Price of
Option
Awards
($/Share)
       

Name

  Grant
Date
    Threshold     Target     Maximum     Threshold     Target     Maximum     Grant
Date Fair
Value of
Stock and
Option
Awards
 

(a)

  (b)     ($)(c)(1)     ($)(d)(1)     ($)(e)(1)     (#)(f)(2)     (#)(g)(2)     (#)(h)(2)     (i)(3)     (j)(4)     (k)(5)     ($)(l)(6)  

George Oliver

 

 

N/A(7)

 

 

 

400,000

 

 

 

2,400,000

 

 

 

4,800,000

 

                   
 

 

12/6/2018

 

                     

 

427,158

 

 

 

33.39

 

 

 

2,374,998

 

 

 

12/6/2018

 

                   

 

71,129

 

       

 

2,374,997

 

 

 

12/6/2018

 

         

 

28,452

 

 

 

142,258

 

 

 

284,516

 

         

 

4,749,995

 

Brian J. Stief

 

 

N/A(7)

 

 

 

136,033

 

 

 

816,200

 

 

 

1,632,400

 

                   
 

 

12/6/2018

 

                     

 

120,638

 

 

 

33.39

 

 

 

670,747

 

 

 

12/6/2018

 

                   

 

20,088

 

       

 

670,738

 

 

 

12/6/2018

 

         

 

8,035

 

 

 

40,176

 

 

 

80,352

 

         

 

1,341,477

 

Jeffrey M. Williams

 

 

N/A(7)

 

 

 

111,300

 

 

 

667,800

 

 

 

1,335,600

 

                   
 

 

12/6/2018

 

                     

 

89,928

 

 

 

33.39

 

 

 

500,000

 

 

 

12/6/2018

 

                   

 

14,974

 

       

 

499,982

 

 

 

12/6/2018

 

         

 

5,990

 

 

 

29,949

 

 

 

59,898

 

         

 

999,997

 

Rodney M. Rushing

 

 

N/A(7)

 

 

 

111,300

 

 

 

667,800

 

 

 

1,335,600

 

                   
 

 

12/6/2018

 

                     

 

89,928

 

 

 

33.39

 

 

 

500,000

 

 

 

12/6/2018

 

                   

 

14,974

 

       

 

499,982

 

 

 

12/6/2018

 

         

 

5,990

 

 

 

29,949

 

 

 

59,898

 

         

 

999,997

 

John Donofrio

 

 

N/A(7)

 

 

 

105,000

 

 

 

630,000

 

 

 

1,260,000

 

                   
 

 

12/6/2018

 

                     

 

89,928

 

 

 

33.39

 

 

 

500,000

 

 

 

12/6/2018

 

                   

 

14,974

 

       

 

499,982