DEF 14A 1 d10608ddef14a.htm DEF 14A DEF 14A
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

Proxy Statement Pursuant To Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

 

 

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

Check the appropriate box:

 

  

Preliminary Proxy Statement

  

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

  

Definitive Proxy Statement

  

Definitive Additional Materials

  

Soliciting Material Pursuant to § 240.14a-12

ROPER TECHNOLOGIES, INC.

(Formerly Roper Industries, Inc.)

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

   No fee required
   Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
   (1)  

Title of each class of securities to which transaction applies:

     

   (2)  

Aggregate number of securities to which transaction applies:

     

   (3)  

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

     

   (4)  

Proposed maximum aggregate value of transaction:

     

   (5)  

Total fee paid:

     

   Fee paid previously with preliminary materials
   Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
   (1)  

Amount Previously Paid:

     

   (2)  

Form, Schedule or Registration Statement No.:

     

   (3)  

Filing Party:

     

   (4)  

Date Filed:

     

 

 

 

 


Table of Contents
6901 Professional Parkway   

LOGO

 

   Telephone (941) 556-2601
Suite 200    Fax (941) 556-2670
Sarasota, Florida 34240   
  
   Roper Technologies, Inc.   

April 29, 2021

Dear Fellow Shareholders:

As your Board of Directors, we oversee Roper’s efforts to continually create long-term value for you by efficiently executing our strategy through sound risk management, disciplined capital deployment, sound strategic thinking, operational rigor, performance-driven compensation programs, effective talent and succession planning, adherence to the highest ethical standards and levels of integrity, and continual review and refinement of the Board’s governance practices.

As detailed below, despite the unique challenges 2020 presented all companies, the resilience of our business model enabled us to deliver revenue and earnings growth and significant growth in both operating cash flow and free cash flow. Accordingly, Roper is poised to deliver further growth in 2021, while many companies are merely seeking to return to their pre-COVID-19 levels of performance. Though we are extremely proud of our accomplishments in 2020, we recognize and empathize with those who lost family members and friends since the onset of the pandemic.

Our Strategy for Long-Term and Elite Value Creation for Shareholders

Over the past fifteen years, our shareholders earned a compound annual return of 18.0% and a total shareholder return of 1091.6%, about three and a half times the total return of the S&P 500 of 311.0%. Over the past decade, Roper has delivered an even better 19.6% compound annual return to shareholders and delivered a strong 22.4% return in 2020.

Our long history of superior shareholder returns is the result of Roper’s simple, yet powerful strategy:

 

 

Cash Generation Through Operating Excellence: Our enterprise consists of niche, asset-light businesses with leading solutions and technologies that generate significant free cash flow, enabling future investments for sustainable growth. Operating excellence, underpinned by our strategic focus on intellectual capital, product development, go-to-market strategies, and a high degree of customer intimacy drives cash generation which, in 2020, resulted in another year of record performance for adjusted operating cash flow and adjusted free cash flow, which increased 14% and 16%, respectively.

 

 

Disciplined Capital Deployment: We have a unique and disciplined capital deployment model that has guided the successful investment of billions of dollars into new businesses. Unlike many companies that use cash to pay large dividends and buy back shares, Roper deploys most of its available cash to acquire new businesses to fuel compounding cash flow growth and value creation for shareholders, as we did in 2020 with our deployment of $6.0 billion to acquire exceptional vertical software businesses, including the acquisition of Vertafore, Inc. for approximately $5.35 billion.

The Board’s Role in Roper’s Success

The Board contributes significantly to Roper’s strong performance. As directors, each of us commits to the rigor and extensive time commitment and workload required to serve on Roper’s Board, including participation in at least 15 days of Board meetings each year. We continually monitor the existing portfolio of Roper businesses, review capital deployment opportunities, and carefully examine the different ways Roper can create additional value for shareholders. Between Board meetings, we continue our discussions with management and each other, enabling the Company to draw from our broad experiences and expertise.

Our direct involvement in and deep understanding of the Company allows us to address a multitude of issues, including acquisition selection, capital deployment, and succession planning, while sustaining Roper’s successful culture and business model. The soundness of our strategy is further evidenced by our ability to deliver meaningful earnings and cash flow growth in 2020 despite the challenges of COVID-19 and the secular decline in the energy markets.


Table of Contents

Our Governance Practices and Other Best Practices

Roper remains committed to strong corporate governance as demonstrated by the following practices:

 

 

Declassified Board. Our directors are elected annually.

 

 

Majority Voting for Directors. Our By-laws require the resignation of incumbent directors who fail to obtain a majority of votes cast in uncontested elections.

 

 

Proxy Access. Our By-laws permit a shareholder, or a group of up to 20 shareholders, that has owned at least 3% of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials up to the greater of two directors or 20% of the number of our directors then in office.

 

 

Independent Chair of the Board. Wilbur Prezzano currently serves as our Independent Chair. Amy Brinkley is scheduled to become the Independent Chair on June 1.

 

 

Executive Compensation Alignment with Shareholders. Because our shareholder value creation is derived from the Roper executive team’s capital deployment strategy and ability to operate a broad portfolio of businesses, our executives must possess a unique set of skills. We continue to refine our executive compensation practices to maintain close alignment with shareholder interests.

 

 

Pay for Performance. Similar to prior years, in 2020, 95% of our CEO’s compensation was subject to performance risk and tied to long-term results and our stock price, and for our other executive officers, on average, 88% of their compensation was performance-based.

 

 

Significant Reduction in Non-Employee Director Pay for 2020. In 2020, the average total compensation paid to our non-employee directors (other than the Independent Chair) was reduced by 40% compared to 2019. With respect to our Independent Chair, his total compensation was reduced by 38% compared to 2019.

 

 

Diverse Board Membership. 37.5% of directors nominated for election are women and 12.5% are ethnically diverse.

 

 

Clear oversight of ESG and Human Capital Management. The Nominating and Governance Committee has oversight responsibility for matters related to ESG and Human Capital Management.

 

 

Clear Proxy Statement Disclosure. We strive to present the information in our Proxy Statement in a clear and easy-to-read manner.

 

 

Shareholder Outreach Program. Roper’s senior management team regularly engages shareholders for feedback.

2021 Incentive Plan

Our agenda this year includes a proposal to approve the Roper Technologies, Inc. 2021 Incentive Plan. This new plan would replace our existing incentive plan. Equity compensation is one way we link pay with performance, and it is an important part of our overall compensation program. We urge you to vote FOR the approval of the 2021 Incentive Plan, so that we can continue to use equity as a key component in our compensation programs.


Table of Contents

Open Communications With Our Shareholders

We value your continued support and input. Please continue to share your comments with us on any topic. Communications may be addressed to the directors in care of the Corporate Secretary, Roper Technologies, Inc., 6901 Professional Parkway, Suite 200, Sarasota, Florida 34240.

Sincerely,

The Board of Directors

 

LOGO   LOGO   LOGO
Shellye L. Archambeau   Amy Woods Brinkley   John F. Fort III

 

LOGO

 

 

 

LOGO

 

 

 

LOGO

L. Neil Hunn   Robert D. Johnson   Wilbur J. Prezzano

 

LOGO

 

 

LOGO

 

 

 

LOGO

Laura G. Thatcher   Richard F. Wallman   Christopher Wright


Table of Contents

LOGO

NOTICE OF THE 2021 ANNUAL MEETING OF SHAREHOLDERS

2021 ANNUAL MEETING INFORMATION

For additional information about our Annual Meeting, see Annual Meeting and Voting Information on page 58.

 

Meeting Date:      

June 14, 2021    

   

      

 

 

 

Meeting Place:

6901 Professional Parkway, Suite 200 Sarasota, Florida 34240      

   

      

 

 

 

Meeting Time:

9:30 a.m. (Eastern)      

 

      

 

Record Date:

April 19, 2021      

                                    

ANNUAL MEETING BUSINESS

Roper’s annual meeting of shareholders will be held June 14, 2021 to:

 

 

elect as directors the eight nominees named in the accompanying proxy statement;

 

 

approve, on an advisory basis, the compensation of our named executive officers;

 

 

ratify the appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for 2021;

 

 

approve the Roper Technologies, Inc. 2021 Incentive Plan; and

 

 

transact any other business that may be properly brought before the annual meeting.

PROXY MATERIALS

On or about April 29, 2021, we began distributing to each shareholder entitled to vote at the annual meeting either: (i) a Meeting Notice; or (ii) this proxy statement, a proxy card and our 2020 Annual Report to Shareholders and Form 10-K. The Meeting Notice contains instructions to electronically access our proxy statement and our 2020 Annual Report to Shareholders and Form 10-K, how to vote via the internet or by mail and how to receive a paper copy of our proxy materials by mail, if desired.

 

 

VOTING AT THE ANNUAL MEETING

 

Your vote is important. Shareholders who are owners of record of Roper common shares at the close of business on April 19, 2021, the record date, or their legal proxy holders, are entitled to vote at the annual meeting. Whether or not you expect to attend the annual meeting, we urge you to vote as soon as possible by one of these methods:

 

LOGO    LOGO    LOGO

 

Via the Internet:

www.proxypush.com/ROP

  

 

Call Toll-Free:

1-866-829-5176

 

  

 

Mail Signed Proxy Card:

Follow the instructions on your proxy

card or voting instruction form

 

If you are a beneficial owner of shares held through a broker, bank or other holder of record, you must follow the voting instructions you receive from the holder of record to vote your shares. Shareholders may also vote at the annual meeting. For more information on how to vote your shares, please refer to Annual Meeting and Voting Information on page 58.

 

 

LOGO

John K. Stipancich

Executive Vice President, General Counsel and Corporate Secretary

 

Important Notice Regarding the Availability of Proxy Materials for the

Annual Meeting of Shareholders to be Held on June 14, 2021

 

This Notice of the Annual Meeting of Shareholders, our Proxy Statement and our Annual Report to

Shareholders and Form 10-K are available free of charge at www.proxydocs.com/ROP.

 


Table of Contents

TABLE OF CONTENTS

 

PROXY STATEMENT SUMMARY

     i  

PROPOSAL 1: ELECTION OF DIRECTORS

     1  

BOARD OF DIRECTORS

     2  

CORPORATE GOVERNANCE

     8  

CORPORATE RESPONSIBILITY

     10  

BOARD COMMITTEES AND MEETINGS

     13  

DIRECTOR COMPENSATION

     17  

BENEFICIAL OWNERSHIP

     19  

DELINQUENT SECTION 16(A) REPORTS

     20  

COMPENSATION DISCUSSION AND ANALYSIS

     21  

Overview

     21  

Creating Shareholder Value

     22  

Overview of Our Compensation Program

     26  

Elements of Compensation

     28  

Compensation Process

     30  

Analysis of 2020 Compensation

     34  

Additional Information About Our Program

     38  

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     40  

COMPENSATION COMMITTEE REPORT

     40  

EXECUTIVE COMPENSATION

     41  

2020 Summary Compensation Table

     41  

2020 Grants of Plan-Based Awards

     42  

2020 Outstanding Equity Awards at Fiscal Year End

     43  

2020 Option Exercises and Stock Vested

     45  

2020 Non-Qualified Deferred Compensation

     45  

Potential Payments upon Termination or Change in Control

     45  

Summary of Termination Payments and Benefits

     46  

CEO Pay Ratio

     48  

PROPOSAL 2: ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

     49  

AUDIT COMMITTEE REPORT

     50  

INDEPENDENT PUBLIC ACCOUNTANTS FEES

     51  

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021

     51  

PROPOSAL 4: APPROVAL OF THE ROPER TECHNOLOGIES, INC. 2021 INCENTIVE PLAN

     52  

ANNUAL MEETING AND VOTING
INFORMATION

     58  

INFORMATION REGARDING THE 2022 ANNUAL MEETING OF SHAREHOLDERS

     62  

OTHER MATTERS

     63  

APPENDIX A—RECONCILIATIONS

     64  

APPENDIX B—ROPER TECHNOLOGIES, INC. 2021 INCENTIVE PLAN

     65  
 


Table of Contents

PROXY STATEMENT SUMMARY

 

This summary highlights information about Roper Technologies, Inc. (the “Company”, “we”, “us” or “our”) and the upcoming 2021 Annual Meeting of Shareholders (the “2021 Annual Meeting”). It does not contain all of the information you should consider. We recommend reading the complete proxy statement (the “Proxy Statement”) and our 2020 Annual Report to Shareholders (the “2020 Annual Report”), which includes our Annual Report on Form 10-K, before voting. The Proxy Statement and the enclosed proxy card are being mailed or otherwise made available to shareholders on or about April 29, 2021.

2021 ANNUAL MEETING OF SHAREHOLDERS

 

Date and Time:                

Monday, June 14, 2021

9:30 a.m. local time

  

Record Date:

April 19, 2021

  

Place:

Roper Technologies, Inc.

6901 Professional Parkway

Suite 200

Sarasota, Florida 34240

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

Proposals  

Board

Recommendation

 

Vote

Required

1:

  Election of eight directors for a one-year term   FOR EACH NOMINEE   Majority of votes cast

2:

  Advisory vote to approve the compensation of our named executive officers   FOR   Majority of shares present in person or represented by proxy

3:

  Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021   FOR   Majority of shares present in person or represented by proxy

4:

  Approval of the Roper Technologies, Inc. 2021 Incentive Plan   FOR   Majority of shares present in person or represented by proxy


 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           i


Table of Contents

PROXY STATEMENT SUMMARY (CONTINUED)

 

2021 DIRECTOR NOMINEES

Shareholders are electing all eight director nominees who will serve for a one-year term expiring at the 2022 Annual Meeting of Shareholders (the “2022 Annual Meeting”).

 

                    COMMITTEES             
                       
  Name and Primary Occupation  

Age

 

Director

Since

  Independent  

AC

 

CC

 

NGC

 

        EC        

  Shellye L. Archambeau

  Former Chief Executive Officer,

  MetricStream, Inc.

  58   2018   🌑             🌑     

  Amy Woods Brinkley

  Retired Chief Risk Officer, Bank of

  America Corp.

  65   2015   🌑   🌑               

  John F. Fort III

  Retired Chief Executive Officer, Tyco

  International Ltd.

  79   1995   🌑   🌑        🌑     

  L. Neil Hunn

  President and Chief Executive Officer,

  Roper Technologies, Inc.

  49   2018                         

  Robert D. Johnson

  Chairman, Spirit AeroSystems Holdings,

  Inc.

  73   2005   🌑        🌑          

  Laura G. Thatcher

  Retired Head of Executive

  Compensation Practice, Alston & Bird

  LLP

  65   2015   🌑        Chair        🌑

  Richard F. Wallman

  Retired Chief Financial Officer and

  Senior Vice President, Honeywell

  International Inc.

  70   2007   🌑             Chair   🌑

  Christopher Wright

  Executive Chairman, Kestrel Partners and

  Director, Merifin Capital

  63   1991   🌑   Chair             🌑

AC = Audit Committee  CC = Compensation Committee  NGC = Nominating and Governance Committee  EC = Executive Committee

CORPORATE GOVERNANCE

We strive to maintain effective corporate governance practices and policies, including:

Proxy Access: In March 2016, we amended our By-laws to implement proxy access for eligible shareholders. Our proxy access provision permits a shareholder, or a group of up to 20 shareholders, that has owned at least 3% of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials up to the greater of two directors or 20% of the number of our directors then in office, provided that the shareholders and the nominees satisfy the requirements set forth in the By-laws.

Shareholder Outreach: We regularly engage our shareholders for feedback to learn their views on the Company’s strategy and performance as well as any governance matters of concern.

One-Year Terms for Directors: All of our directors serve one-year terms.

Independent Directors: All of our directors except our CEO are independent, as is each member of the Audit, Compensation, Executive, and Nominating and Governance Committees.

Independent Chair of the Board: Our Chair of the Board is independent.



 

ii         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

PROXY STATEMENT SUMMARY (CONTINUED)

 

Majority Voting Standards for Uncontested Director Elections: We require any incumbent director who fails to obtain a majority vote in uncontested elections to tender his or her resignation.

Shareholder Engagement: We highly value feedback from our shareholders. In addition to our traditional Investor Relations engagement efforts, since the beginning of 2020, we have had discussions with numerous shareholders on ESG topics including climate change and diversity and inclusion. These discussions have been extremely helpful in identifying issues of importance to our investors as we develop our ESG program. We also shared feedback received during these discussions with our Nominating and Governance Committee, informing their decision-making.

Anti-Hedging and Anti-Pledging Policy: We have both anti-hedging and anti-pledging policies.

Board Refreshment/Term Limits: Currently, the mandatory retirement age for our Directors is 80. Beginning in 2020, Directors joining our Board will be required to retire upon the earlier of (i) the attainment of age 80, and (ii) the 15-year anniversary of the first annual meeting following the date the director joined the Board.

BOARD SNAPSHOT *

 

 

LOGO                  LOGO

 

LOGO

Tenure Age2 Average tenure: 7 years Average age: 62 Independence Women Ethnic Diversity Born Outside of the U.S. 7 independent directors 3 women directors 1 woman committee chairs 1 Woman prospective Board Chair 1 African American director 87.5% 37.5% 12.5%

 

*

Does not include Mr. Prezzano, who is retiring at the Annual Meeting



 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           iii


Table of Contents

PROXY STATEMENT SUMMARY (CONTINUED)

 

BUSINESS HIGHLIGHTS

We achieved another year of strong results in 2020 despite the challenges of COVID-19:

 

   

Annual shareholder return of 22.4%, exceeding the return of 18.4% for the S&P 500

 

 

   

GAAP revenue increased 3% to $5.53 billion

 

 

   

GAAP gross margin increased 20 basis points to 64.1%

 

 

   

Adjusted EBITDA increased 3% to $1.98 billion(1)

 

 

   

Adjusted operating cash flow increased 14% to $1.72 billion and adjusted free cash flow increased 16% to $1.67 billion(1)

 

 

   

We deployed $6 billion toward high quality software acquisitions

 

 

   

Our annual dividend increased by 10%, increasing for the 28th consecutive year

 

 

(1) 

This financial information is presented on an adjusted (non-GAAP) basis. A reconciliation from non-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations.”

COMPENSATION HIGHLIGHTS

The creation of shareholder value is the foundation and driver of our executive compensation program. Aspects of our program that closely align the compensation of our executive officers with the long-term interests of our shareholders include the following:

Pay for Performance: Almost all of our executive officer compensation is tied to pre-set, objective performance criteria and long-term shareholder value creation. In 2020, 95% of CEO’s direct compensation was subject to performance risk and tied to long-term results and our stock price. For our other executive officers, on average, 88% of their direct compensation was performance-based.

COVID 19: Despite the adverse impact that the COVID-19 pandemic had on our financial performance and operating results, the Compensation Committee elected not to adjust targets or exercise discretion with result to awards made under the 2020 bonus plan or any outstanding long-term incentive programs to our executive officers. We also reduced the base salary of our CEO by 25%, and those of our other executive officers by 20%, for the period of May through September.

Performance-Based Equity: All restricted stock awards to our executive officers are subject to satisfaction of performance criteria (no awards are solely time-based).

Double Trigger Vesting: “Double trigger” vesting of equity awards if a change in control occurs; no excise tax gross-ups for change-in-control payments.

Dollar Value Equity: As a result of the superior performance of Roper’s stock price, and in light of market practice, we transitioned from a practice of granting a fixed number of equity awards to a dollar value-based approach for non-employee directors in 2019 and all executive officers in 2020.

Significant Reduction in Non-Employee Director Pay for 2020:    In 2020, the average total compensation paid to our non-employee directors (other than the Independent Chair) was reduced by 40% compared to 2019. With respect to our Independent Chair, his total compensation was reduced by 38% as compared to 2019.

Stock Ownership Guidelines: Substantial share ownership and retention guidelines for our executive officers and non-employee directors.



 

iv         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

PROXY STATEMENT SUMMARY (CONTINUED)

 

Clawback Policy: We have a clawback policy to recoup erroneously paid cash and equity compensation.

Dividends Only on Shares Earned: Dividends on executive officers’ restricted shares are paid only if the shares are earned.

Annual Bonus Caps: We have caps on annual bonuses to avoid an excessive short-term focus and potentially adverse risk-taking.

No Repricing: Repricing of stock options absent shareholder approval is prohibited.

Limited Benefits: No defined pension benefit plan, few perquisites, and limited severance agreements.

2020 ESG HIGHLIGHTS

We are committed to conducting business in an ethically and socially responsible manner. In 2020, we took the following steps to enhance our ESG program:

ESG Oversight: In 2020, the charter of the Nominating and Governance Committee was amended to assign the Committee the responsibility to oversee the Company’s ESG initiatives as well as its key human capital management programs.

Corporate Responsibility Statement: In the fall of 2020, we made available on our website a Corporate Responsibility Statement, which highlights the efforts of many of our businesses in the areas of emissions reduction, water management, public health (including assisting with the fight against COVID-19), food sustainability and safety and security.

OneTen Coalition Founding Member: In December 2020, Roper became a founding member of the OneTen Coalition. OneTen is an organization that plans to combine the power of over 30 committed large, public American companies to upskill, hire and promote one million Black Americans over the next 10 years into family-sustaining jobs with opportunities for advancement.

COVID-19 Vaccination Distribution: In November 2020, the U.S. Centers for Disease Control and Prevention selected MHA Long Term Care Services, Inc, an affiliate of Managed Health Care Associates, Inc. (“MHA”), as the COVID-19 vaccinations network administrator on behalf of the MHA independent long-term care pharmacy network. MHA, a Roper company, has over 1,600 pharmacy locations nationwide across their portfolio of members and is providing long-term care pharmacies network administration services to support the delivery and administration of vaccinations for both the residents and staff of the long-term care facilities they serve. MHA is providing these services without cost.



 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           v


Table of Contents

PROPOSAL 1: ELECTION OF DIRECTORS

Our Certificate of Incorporation provides that the Board of Directors of the Company (the “Board of Directors” or the “Board”) will consist of a number of members to be fixed, from time to time, by the Board of Directors, but not less than the minimum number required under Delaware law. The Board of Directors is currently comprised of nine directors who are elected on an annual basis.

With the exception of Wilbur J. Prezzano, who will retire at the Annual Meeting, our Board unanimously recommended each incumbent director for reelection at the 2021 Annual Meeting. If reelected, the director nominees will serve until the 2022 Annual Meeting and until their successors have been duly elected and qualified. Certain information about our director nominees is set forth under “Board of Directors.” This information includes the business experience, qualifications, attributes and skills that each individual brings to our Board. Mr. Prezzano, who has served as a director since 1997, is retiring effective at the Annual Meeting consistent with the retirement provisions of our Corporate Governance Guidelines. As a result, our Board size will be reduced from nine to eight members effective at the Annual Meeting.

Although not anticipated, if prior to the meeting a director nominee is unable to serve, the proxy will be voted for a substitute nominee selected by the Board of Directors or the Board may choose to reduce its size.

 

 

The Board of Directors recommends a vote “FOR” the election to the Board of Directors of each of the following director nominees:

 

Name    Age    Director
Since
   Independent    Primary Occupation

Shellye L. Archambeau

   58    2018    Yes    Former Chief Executive Officer, MetricStream, Inc.

Amy Woods Brinkley

   65    2015    Yes    Retired Chief Risk Officer, Bank of America Corp.

John F. Fort III

   79    1995    Yes    Retired Chief Executive Officer, Tyco International Ltd.

L. Neil Hunn

   49    2018    No   

President and Chief Executive Officer,

Roper Technologies, Inc.

Robert D. Johnson

   73    2005    Yes    Chairman, Spirit AeroSystems Holdings, Inc.

Laura G. Thatcher

   65    2015    Yes    Retired Head of Executive Compensation Practice,
Alston & Bird LLP

Richard F. Wallman

   70    2007    Yes    Retired Chief Financial Officer and Senior Vice President, Honeywell International Inc.

Christopher Wright

   63    1991    Yes   

Executive Chairman, Kestrel Partners and
Director, Merifin Capital

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           1


Table of Contents

BOARD OF DIRECTORS

Nominee Information

for terms expiring at the 2022 Annual Meeting

 

 

 

LOGO

 

 

Shellye L. Archambeau

 

Former Chief Executive Officer, MetricStream, Inc.

 

  

Director Since 2018

Independent

Age 58

 

    

Committee:

 

  Nominating and  Governance

 

Current Public Directorships:

 

  Okta, Inc.

  Nordstrom Inc.

  Verizon Communications, Inc.

 

Key Qualifications & Expertise:

 

  Executive leadership and management experience

  Software, technology and e-commerce

  Cybersecurity experience

  Developing and marketing emerging technology software applications and solutions

  Innovation, digital media and communications

  Building and scaling consumer and B2B businesses in the technology industry

  Entrepreneurial perspective

  Public company board experience

 

 

Ms. Archambeau is the former Chief Executive Officer of MetricStream, Inc., a Silicon-Valley based global provider of governance, risk, compliance and quality management solutions to organizations across diverse

industries. She served in this role from the time she joined MetricStream in 2002 until 2018. Prior to joining MetricStream, Ms. Archambeau served as Chief Marketing Officer and Executive Vice President of Sales for Loudcloud, Inc., a provider of Internet infrastructure services; Chief Marketing Officer of NorthPoint Communications, a provider of local data network services; and President of Blockbuster, Inc.’s e-commerce division, where she launched the entertainment retailer’s first online presence. Before she joined Blockbuster, Ms. Archambeau held domestic and international executive positions during a 15-year career at IBM Corporation. Ms. Archambeau has served as director of Okta, Inc., a provider of identity management solutions, since 2018, Nordstrom, Inc., since 2015, and Verizon Communications, Inc., since 2013.

 

 

 

 

2         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

 

 

LOGO

 

 

Amy Woods Brinkley

 

Founder, AWB Consulting, LLC

 

  

Director Since 2015

Independent

Age 65

 

    

Committee:

 

  Audit

 

Current Public Directorships:

 

  Carter’s, Inc.

  TD Bank Group

 

Key Qualifications & Expertise:

 

  Executive leadership and management experience

  Risk management, controls, corporate governance

  Financial reporting rules and regulations and audit procedures

  Broad-based knowledge of banking and financial services

  Marketing and e-commerce

  Corporate governance

  Public company board experience

 

  Talent and team development

 

 

Ms. Brinkley is the founder, owner and manager of AWB Consulting, LLC, an executive advising and risk management consulting firm. Ms. Brinkley served as Chief Risk Officer for Bank of America  from  2002  until

her retirement in 2009, after more than 30 years with the company. Prior to 2002, she served as President of the company’s Consumer Products division and was responsible for the credit card, mortgage, consumer finance, telephone, and e-commerce businesses. During her employment at Bank of America Corporation, Ms. Brinkley also held the positions of Executive Vice President and Chief Marketing Officer overseeing the company’s Olympic sponsorship and its national rebranding and name change. Ms. Brinkley has served as director of Carter’s Inc., since 2010, and TD Bank Group, since 2010. Ms. Brinkley also serves as a director of TD Bank Group’s subsidiaries: TD Group US Holdings, LLC, TD Bank US Holding Company, TD Bank, NA, and TD Bank, USA. In addition, she served as a Commissioner for Atrium Health, a non-profit hospital network from 2001 to 2019 and as a Trustee for the Princeton Theological Seminary from 2002 to 2019.

 

 

 

 

LOGO

 

 

John F. Fort III

 

Retired Chief Executive Officer, Tyco International Ltd.

 

  

Director Since 1995

Independent

Age 79

 

    

Committees:

 

  Nominating and  Governance

  Audit

 

Key Qualifications & Expertise:

 

  Executive leadership and management experience

  Finance and accounting expertise

  Mergers and acquisitions

  Diversified industrial company leadership

  Global business, industry and operations experience

  Business strategy expertise

  Risk management

  In-depth knowledge of Company and its history provides valuable perspective

  Mr. Fort served as Chairman and Chief Executive Officer of Tyco International Ltd., a provider of diversified industrial products and services, from 1982 until his retirement from the company in 1993.

He served as Interim CEO of Tyco from June to September 2002 and as an advisor to Tyco’s Board of Directors from March 2003 to March 2004. Mr. Fort has been self-employed since 1993.

 

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           3


Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

 

 

LOGO

 

 

L. Neil Hunn

 

President and Chief Executive Officer, Roper Technologies, Inc.

 

  

Director Since 2018

Age 49

 

    

 

Key Qualifications & Expertise:

 

  Executive leadership and management experience

  Deep understanding of organization

  Software and technology expertise

  Strategic focus and planning

  Global industry and operational experience

  Mergers and acquisitions, capital markets

  Healthcare experience

  Provides key leadership and guidance for the Company’s growth

  Management development and understanding of business challenges and opportunities

 

 

 

Prior to being named President and Chief Executive Officer in August 2018, Mr. Hunn served as Executive Vice President and Chief Operating Officer from 2017 to 2018. Mr. Hunn also served as Group Vice President

of Roper’s medical segment from 2011 to 2018 and helped drive significant growth in the Company’s medical technology and application software businesses. In addition to his operating responsibilities at Roper, Mr. Hunn led the execution of the majority of the company’s capital deployment since joining Roper. Prior to joining Roper, Mr. Hunn served 10 years as Executive Vice President and Chief Financial Officer at MedAssets, an Atlanta-based SaaS company, and as President of its revenue cycle technology businesses. He successfully led MedAssets’ initial public offering and the execution of several M&A transactions. Mr. Hunn also held roles at CMGI, an incubator of Internet businesses, and Parthenon Group, a strategy consulting firm.

 

 

 

 

 

 

 

 

LOGO

 

 

Robert D. Johnson

 

Chairman, Spirit AeroSystems Holdings, Inc.

 

  

Director Since 2005

Independent

Age 73

 

    

Committee:

 

  Compensation

 

Current Public Directorships:

 

  Spirit AeroSystems Holdings, Inc.

  Spirit Airlines, Inc.

 

Key Qualifications & Expertise:

 

  Executive leadership and management experience

  Manufacturing, supply chain, engineering and production

 

  Mergers and acquisitions

  Global business, industry, and operations experience

  Extensive business acumen

  Public company board experience, including governance and executive compensation expertise

 

  Talent and team development

 

 

Mr. Johnson was Chief Executive Officer of Dubai Aerospace Enterprise Ltd., a global aerospace engineering and services company, from August 2006 to December 2008. Mr. Johnson also served as

Chairman of Honeywell Aerospace, a leading global supplier of aircraft engines, equipment, systems and services, from January 2005 to January 2006, and as its President and Chief Executive Officer from 1999 to 2005. Mr. Johnson similarly served as President and Chief Executive Officer for Honeywell Aerospace’s predecessor, AlliedSignal, an aerospace, automotive and engineering company. He also held management positions with AAR Corporation, a provider of aviation and expeditionary services to the global commercial, government and defense aviation industries, and GE Aviation, an aircraft engine supplier. Mr. Johnson has served as Chairman of the Board for Spirit AeroSystems Holdings, Inc., a global leader in aerostructures design and manufacturing, since 2006 and as a director of Spirit Airlines, Inc., since 2010.

 

 

4         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

 

 

LOGO

 

 

Laura G. Thatcher

 

Retired Head of Executive Compensation Practice, Alston & Bird LLP

 

  

Director Since 2015

Independent

Age 65

 

    

 

Committees:

 

  Compensation (Chair)

  Executive

 

Key Qualifications & Expertise:

 

  Executive compensation expertise

  Organizational development

  Senior leadership and management experience

  Corporate governance

  Mergers and acquisitions

 

  Talent and team development

 

 

Ms. Thatcher retired in December 2013 after 33 years of legal practice at Alston & Bird LLP, where she developed and led the firm’s executive compensation practice for 18 years and served as special executive

compensation counsel to many U.S. and international publicly traded companies. Ms. Thatcher co-authored the Compensation Committee Handbook, 3rd edition (John Wiley & Sons, 2008), which serves as a guidebook for executive compensation strategies and practices, addressing a full range of functional issues facing compensation committees of public companies, including organizing, planning, compliance and sound corporate governance.

 

Ms. Thatcher served on the Board of Directors of Batson-Cook Company, a regional commercial construction and development company, from 1994 to 2007. She also served on the Board of Directors of The Atlanta Legal Aid Society, Inc., from 2008 to 2014, and was a Past Chair of the Advisory Board of the Certified Equity Professional Institute (CEPI) of Santa Clara University and was on the Board of Review for a special project sponsored by CEPI that provided universally accepted industry guidance regarding areas of risk and appropriate controls in equity compensation.

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           5


Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

 

 

LOGO

 

 

Richard F. Wallman

 

Retired Chief Financial Officer and Senior Vice

President, Honeywell International Inc.

 

  

Director Since 2007

Independent

Age 70

 

    

Committees:

 

  Nominating and Governance (Chair)

  Executive

 

Current Public Directorships:

 

  SmileDirectClub, Inc.

  Extended Stay America, Inc. (Mr. Wallman will be stepping down from his directorship upon Blackstone/Starwood’s acquisition)

  Charles River Laboratories International, Inc.

 

Key Qualifications & Expertise:

 

  Executive leadership and management experience

  Finance and accounting expertise

  Multi-industry perspective

  Global business, industry, manufacturing and operations experience

 

  Mergers and acquisitions

  Risk management and controls

  Management development and understanding of global challenges and opportunities

  Public company board experience

 

 

 

Mr. Wallman served as the Chief Financial Officer and Senior Vice President of Honeywell International Inc., a diversified industrial technology and manufacturing company, and its predecessor AlliedSignal, Inc., from

1995 until his retirement in 2003. Mr. Wallman has also served in senior financial positions with IBM Corporation and Chrysler Corporation.

 

Mr. Wallman has served as a director of SmileDirectClub, Inc., since 2019, Extended Stay America, Inc., since 2013, and Charles River Laboratories International, Inc., a provider of laboratory services for the pharmaceutical, medical device and biotechnology industries, since 2011. In the last five years, Mr. Wallman served as a director of Wright Medical Group N.V., a global medical device company, Boart Longyear Ltd., a global mineral exploration company, Convergys Corporation, a provider of customer management and information management products, and ESH Hospitality, Inc., a lodging real estate investment trust.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

 

 

LOGO

 

 

Christopher Wright

 

Executive Chairman, Kestrel Partners and
Director, Merifin Capital

 

  

Director Since 1991

Independent

Age 63

 

    

Committees:

 

  Audit (Chair)

  Executive

 

Current Public Directorships:

 

  G.P. Investments Limited (Luxembourg)

  Spice Private Equity A.G. (Zurich)

 

Key Qualifications & Expertise:

 

  Executive and management experience

  Global public and private company board experience

  Finance and accounting expertise

  Mergers and acquisitions

  In-depth knowledge of Company

  Broad experience in technology, software and healthcare sectors

  Understanding of global challenges, risk and opportunities

 

 

 

Mr. Wright is a director of Merfin Capital Group, a European investment firm. He is also the Chairman of EMAlternatives LLC, a Washington, DC based private equity asset management firm, Chairman

of Yimei Capital, a Shanghai based investment firm, and Executive Chairman of Kestrel Partners, a UK based investment management company. Until mid-2003 he served as Chief Executive Officer for Dresdner Kleinwort Capital and was a Group Board Member of Dresdner Kleinwort overseeing the bank’s alternative assets globally. He has acted as Chairman of various investment funds prior to and following the latter’s integration with Allianz S.E., and as Global Head of Private Equity at Standard Bank Limited from 2006 to 2007. Mr. Wright has served as director of G.P. Investments Limited (Luxembourg), since 2017, and of Spice Private Equity A.G. (Zurich), since 2016. He previously served as Chairman of Maxcess International Inc. until 2017, a privately-owned industrial technology company, and was a director of Yatra Ltd. (Euronext) from 2010 to 2018. Mr. Wright is a member of the Endowment Investment Committee of Corpus Christi College, Oxford; and a director of the Sutton Trust, an educational charity.

 

 

 

 

 

 

 

 

 

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           7


Table of Contents

CORPORATE GOVERNANCE

 

Corporate Governance Guidelines

Our Board is committed to maintaining high standards of ethical business conduct and sound corporate governance practices and policies. Our Corporate Governance Guidelines reflect our Board of Directors’ commitment to monitoring the effectiveness of the Board and its committees in exercising their responsibilities.

Business Code of Ethics and Standard of Conduct

Our Business Code of Ethics and Standards of Conduct (the “Code of Ethics”) addresses the professional, honest and candid conduct of our directors, officers and employees. The Code of Ethics also addresses conflicts of interest, disclosure processes, compliance with laws, rules and regulations (including insider trading laws), corporate opportunities, confidentiality, fair dealing, and protection and proper use of Company assets. The Code of Ethics encourages the reporting of any illegal or unethical behavior. Any amendments to, or waivers of, the Code of Ethics will be disclosed on our website promptly following the date of such amendment or waiver as required by law.

Director Independence

Our Corporate Governance Guidelines require that a majority of our directors qualify as “independent,” as defined by the listing standards of the New York Stock Exchange (the “NYSE”). As required by these director independence standards, our Board reviewed and analyzed the independence of each director earlier this year to determine whether any particular relationship or transaction involving any director, or any of that director’s affiliates or immediate family members, was inconsistent with a determination that the director is independent for purposes of serving on our Board of Directors and its committees. During this review, our Board examined transactions and relationships between directors or their affiliates and immediate family members and Roper and/or Roper’s management. As a result of this review our Board affirmatively determined that all directors are independent, except for Mr. Hunn, and that each member of the Audit, Compensation, and Nominating and Governance Committees is independent under applicable NYSE and Securities and Exchange Commission (“SEC”) rules for purposes of serving on such committees.

Nominating Process

The Nominating and Governance Committee, acting under its charter, determines the desired skills, abilities, judgment, diversity (including gender and ethnicity as well as background and experience) and other criteria deemed appropriate for service as a director and is responsible for recommending new director candidates and renomination of incumbent directors based on those criteria, which includes but are not limited to:

 

 

high personal and professional ethics;

 

 

integrity and values;

 

 

knowledge of our business environment;

 

 

sound judgment and analytical ability;

 

 

skills and experience in the context of the needs of our Board;

 

 

breadth of business experience; and

 

 

whether the candidate meets the applicable independence requirements under the NYSE and SEC rules.

Our Board’s process for identifying and evaluating potential director nominees includes soliciting recommendations from our directors and engaging a third party to assist in identifying potential director nominees when a Board position becomes available. Our Board has no formal policy with respect to diversity, but considers ethnic and gender diversity when creating the pool of candidates from which it considers possible new director candidates.

Neither the Board of Directors nor the Nominating and Governance Committee has a specific policy regarding consideration of shareholder director nominees. Shareholder nominees submitted pursuant to the requirements set forth in the By-laws will be considered under the same criteria that are applied to other candidates. A shareholder of record who nominates a director candidate must provide a notice along with the additional information and materials required by our By-laws. See “Information Regarding the 2022 Annual Meeting of Shareholders” for additional information regarding nominating director candidates.

 

 

8         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

CORPORATE GOVERNANCE (CONTINUED)

 

Proxy Access

Our By-laws enable a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and include in our proxy materials up to the greater of two directors or 20% of the number of our directors then in office, provided that the shareholders and the nominees satisfy the requirements set forth in the By-laws.

Review and Approval of Related Person Transactions

The Audit Committee is responsible for reviewing and approving, as appropriate, all transactions with related persons. Although we have not adopted written procedures for reviewing related person transactions, we will review any relationship or transaction in which the Company and our directors, executive officers or their immediate family members are participants to determine whether such persons have a direct or indirect material interest. There were no related person transactions during 2020.

Shareholder Communications

Shareholders or other interested parties may send written communications to our Board of Directors or

non-management Board members in care of the Secretary to the address set forth below. This process is also set forth on our website at www.ropertech.com. All communications will be kept confidential and promptly forwarded to the appropriate director. Items unrelated to a director’s duties and responsibilities as a Board member may be excluded by the Corporate Secretary, including, without limitation; solicitations and advertisements; junk mail; product-related communications; job referral materials such as resumes; surveys; and material that is determined to be illegal or otherwise inappropriate. The director to whom such information is addressed is informed that the information has been removed, and that it will be made available to such director upon request.

Our Corporate Governance Guidelines, Code of Ethics, Director Independence Standards, and By-laws are available on our website at www.ropertech.com/governance-documents. Requests for copies of these documents or of the full text of the By-law provision regarding director candidate nominations and communications to our Board of Directors or non-management Board members should be addressed to:

Roper Technologies, Inc.

6901 Professional Parkway

Suite 200

Sarasota, Florida 34240

Attention: Corporate Secretary

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           9


Table of Contents

CORPORATE RESPONSIBILITY

 

Roper and its subsidiaries are committed to working together to conduct business in an ethical and socially responsible manner in accordance with exemplary standards of business integrity and corporate social responsibility. We recognize the importance of environmental, social, and economic sustainability, and Roper is dedicated to ethical business and governance practices in all areas of our operations. Our companies conscientiously conduct business with the utmost regard for the health and safety of our employees and the communities in which we operate and serve. From our philanthropy and volunteering, to our sustainability initiatives and corporate governance, we strive to work together in ways that are open, inclusive and allow our employees to share and collaborate to support the communities we serve.

For example, In December 2020, Roper became a founding member of the OneTen Coalition. OneTen is an organization that plans to combine the power of education partners with over 30 large, public committed American companies to upskill, hire and promote one million Black Americans over the next 10 years into family-sustaining jobs with opportunities for advancement.

Through our subsidiaries, we develop and promote software, products and services which have positive impacts on the environment and public health. We take appropriate measures to ensure our manufacturing, transportation, and waste disposal activities are consistent with the protection and preservation of our environment. Environmental stewardship applies to many areas of our business operations from recycling inbound material to the engineering of our solutions and elimination of waste in delivering these solutions to our customers. Additionally, many of the solutions our businesses offer allow customers across a number of industries to improve operational and project efficiency, which translates into a variety of benefits for our customers and the communities in which they operate, as well as the environment. As described below, these benefits range from reduced emissions from vehicles, improved water quality and conservation to lower health care costs and improved patient experiences.

Transportation Efficiency Solutions

 

 

Our TransCore business develops innovative transportation and tolling systems to improve transportation and traffic flow efficiencies by reducing congestion, travel time, fuel consumption, vehicle idle time and greenhouse gas emissions.

 

Our DAT business operates the largest truckload freight marketplace in North America. DAT provides benchmarking, forecasting, and capacity planning that are critical to operational efficiency. Transportation brokers, carriers, shippers, news organizations, and industry analysts rely on DAT for market trends and data insights. DAT’s services allow transportation brokers and carriers to maximize the efficiency of their shipping needs by matching vehicle availability and load capacity with nearby loads, resulting in a reduction in empty or suboptimal truckload miles.

Water Conservation Solutions

 

 

Our Cornell Pump business manufactures centrifugal pumps with a Cycloseal® sealing system that removes damaging material from the seal area without the need for flush water, while purging air and gas pockets and extending seal life. Without the need for flush water, operators avoid costly and wasteful water flushes, with larger wastewater treatment facilities conserving several million gallons of water a year.

 

 

Our Neptune Technology Group serves more than 4,000 water utilities across North America by supplying software and hardware tools that promote the efficient use of water as well as protect water quality for communities. As part of its mission to promote the need for sound stewardship and accessibility to clean water across the globe, Neptune is a supporter of Aqua Aid, an assistance program designed to provide customers in need with uninterrupted water service, and Water For People, which partners with local organizations, governments, businesses, and citizens, to help establish creative, customized, and sustainable solutions that provide clean drinking water, sanitation and hygiene education to underserved locations.

 

 

Our Technolog Group designs and manufactures battery powered data loggers and electronic pressure controllers for water distribution networks, which enables customers such as municipal water systems to optimize water use efficiency and significantly reduce leakage. Technolog’s solutions enable municipal water systems and other customers across the globe to save millions of gallons of water each year.

 

 

10         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

CORPORATE RESPONSIBILITY (CONTINUED)

 

Health Care Solutions

 

 

Our Verathon business delivers innovative medical solutions that empower healthcare providers to improve and extend patients’ lives, including the GlideScope® video laryngoscope which enables healthcare providers to deliver rapid intubation and significantly reduce patient intubation time. Also, Verathon pioneered the field of ultrasound bladder volume measurement, and its BladderScan® solution reduces the risk of infections, saves healthcare provider time and reduces costs.

 

 

Our CIVCO Medical Solutions business helps facilities achieve and maintain infection control compliance. Our ultrasound probe covers, probe pre-cleaning and transport accessories, high-level disinfection systems and storage solutions are designed to protect patients by helping to prevent the transmission of infection. The business also partners with and supports community-based organizations that complement and impact its mission.

 

 

Our Northern Digital Inc. business delivers key measurement technology that enables accurate surgical navigation. As integrated by the world’s leading medical companies, the Polaris Vega® optical measurement system provides precise tracking and navigation of surgical instruments within a large measurement volume, and the Aurora® and 3D Guidance® electromagnetic tracking solutions provide accurate tracking and navigation of incredibly small medical instruments through complex and hard-to-reach anatomy. Our innovative solutions aim to unlock new medical procedures and possibilities to improve the patient experience and enhance patient safety.

 

 

Our Strata Decision Technology business provides a cloud-based planning, analytics and performance platform that is used by healthcare providers for financial planning, decision support and continuous improvement. Strata is tackling one of the biggest socio-economic problems of our time – helping hospitals and healthcare systems bend the health care cost curve. And while doing so, Strata has also been named one of the top workplaces in the Chicago area by The Chicago Tribune for the past two years. 

Laboratory Solutions

 

 

Our CliniSys, Data Innovations and Sunquest businesses provide laboratory and public health information management solutions to improve the

   

timeliness and quality of patient care and maximize operational efficiencies of diagnostic testing laboratories, and have provided crucial assistance to healthcare organizations and certain governments managing information generated from COVID-19 testing in certain parts of the world.

Construction Efficiency Solutions

 

 

Our ConstructConnect business facilitates the competitive bidding on publicly funded construction projects, allowing projects to be built on time by qualified tradespeople at lower costs.

Food Management Solutions

 

 

Our iTradeNetwork business is a leading global provider of Saas-based supply chain management solutions for the food and beverage industry. The business improves efficiency, visibility, and traceability across the perishables food supply chain to reduce waste and build resilience.

 

 

Our CBORD business is a leading provider for nutrition, food production, privilege control, and commerce services in education, healthcare and related markets. CBORD’s solutions protect patient safety, reduce waste, and raise satisfaction scores. CBORD has also partnered with Swipe Out Hunger to address college student hunger with an impactful meal donation model.

COVID-19 Contributions

The COVID-19 pandemic continues to pose unprecedented public health, business and financial challenges and uncertainties across the globe. Roper has responded by meeting a number of challenges posed by the pandemic and continues to do so. Some of our contributions are described below:

 

 

Our MHA business was selected by the U.S. Centers for Disease Control and Prevention as the COVID-19 vaccinations network administrator on behalf of the MHA independent long-term care pharmacy network. MHA has over 1,600 pharmacy locations nationwide across their portfolio of members and is providing long-term care pharmacies with network administration services to support the delivery and administration of vaccinations for both the residents and staff of the long-term care facilities they serve. MHA is providing these services without cost.

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           11


Table of Contents

CORPORATE RESPONSIBILITY (CONTINUED)

 

 

Our CliniSys business collaborated with technology partners to rapidly establish national testing networks in Belgium and France.

 

 

Our DAT business provides information and thought leadership analyzing the impact of the pandemic on the freight market.

 

 

Our IPA business provides equipment to safely, securely and efficiently manage scrubs and other personal protective equipment (PPE).

 

 

Our iTradeNetwork business created a forum to establish new trading partnerships to help match excess food supplies with demand.

 

 

Our Strata business provides the data science tool (StrataSphereTM) used to analyze hospital cost of care for COVID-19 patients.

 

Our Sunquest business provides disease surveillance and outbreak management SaaS solutions pre-configured for COVID-19.

 

 

Our Verathon business provides video assisted intubation to reduce the risk and exposure to healthcare providers from infection and has become the industry standard for effective and safe intubations in patients.

For more information on Roper’s approach to corporate responsibility and our programs, see our Corporate Responsibility Statement available on our website. The information contained on, or available through, our website is not incorporated by reference in this Proxy Statement.

 

 

12         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

BOARD COMMITTEES AND MEETINGS

 

Our Board of Directors held nine meetings in 2020. With the exception of one director who was unable to attend one special meeting, each director participated in all of our Board meetings in 2020. In addition, each director participated in every one of our committee meetings held while such director was a committee member. The Board also held a number of informal meetings during the year to enable the directors to closely monitor the impact of the COVID-19 pandemic on the Company’s operations and employees.

Our Board has not implemented a formal policy regarding director attendance at the Annual Meeting of Shareholders, but encourages all directors to attend. All of our directors attended the 2020 Annual Meeting of Shareholders either in person or telephonically.

Board Leadership Structure

Serving as a director of the Company since 1997, Mr. Prezzano was elected as the Board Chair in 2018, following the death of our prior CEO and Executive Chair. Mr. Prezzano’s in-depth, long-term knowledge of our Company allows him to effectively identify strategic priorities, lead Board discussions, and oversee the execution of our Company’s strategy and business plans. The non-management Directors meet in executive session as frequently as they wish, but at least quarterly. The Independent Chair of the Board presides over these executive sessions. In March 2021, we announced that Ms. Amy Brinkley will be assuming the role of Board Chair in June 2021 in connection with the retirement of Mr. Prezzano pursuant to the mandatory retirement provisions of our Corporate Governance Guidelines.

Effective Board Processes

As a result of our Board structure and processes, our directors are actively involved in overseeing the strategy, business and affairs of our Company, including its transformation to a diversified technology company. Our Board meetings typically extend over several days, with directors monitoring the existing portfolio of businesses and analyzing and carefully examining with management the different ways Roper can invest for future growth, both internally and through acquisitions. Between scheduled Board meetings, our directors continue their discussions with management and each other, enabling our Company to draw from their knowledge and expertise. Our directors are involved in our corporate strategy and must keep abreast of the issues encountered by our diverse global business operations.

The Board, including its Nominating and Governance Committee, has an effective Board recruitment and evaluation process that contributes to bringing together a group of directors who complement each other and collectively provide oversight of management in ways that include challenging and discussing different perspectives.

Executive Succession Planning

Our Board recognizes the importance of effective leadership to our Company’s success and is actively engaged and involved, on an annual basis, in succession planning on both a long and short-term basis. Our Company’s operating unit executives, who have responsibility for their respective businesses, but no “enterprise-wide” responsibilities, provide a broad and deep talent resource that is key to our executive succession planning.

Risk Oversight

Our Board has overall responsibility for the oversight of risk management at our Company, which it generally carries out through Board committees. However, several categories of risk management, such as information technology security, are overseen by our full Board. Our General Counsel informs each committee and the Board of relevant legal and compliance issues, and each committee also has access to our Company’s outside counsel or any other outside advisor when they deem it advisable. Each of these committees along with our management team, which is responsible for the implementation of the process to identify, manage and monitor risks, keeps the entire Board regularly apprised of the different risks associated with our Company.

 

 

The Audit Committee oversees financial risk, including such factors as liquidity, credit, currency exchange and market conditions, through review and discussion with management, and monitors our Company’s risk management practices. It meets regularly with our independent auditors together with our Vice President and Chief Compliance Officer, and our Director of Internal Audit, both of whom report directly to the Audit Committee. In addition to financial risk, the Audit Committee also reviews and discusses other risks that relate to our business activities and operations.

 

 

The Compensation Committee, in overseeing risk associated with compensation programs and practices, has directly retained its own independent compensation consultant and meets periodically with management to discuss current issues.

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           13


Table of Contents

BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

 

The Nominating and Governance Committee monitors the compliance of our corporate governance practices and policies with applicable requirements and evolving developments.

Our Board of Directors has not delegated responsibility for cybersecurity matters to a committee. Rather, the Board believes that due to the importance and continually evolving nature of cybersecurity threats, all members of the Board should participate in the oversight of the topic. As a result, the Board is briefed on cybersecurity matters at least twice a year by our Director of Cybersecurity. Roper’s Chief

Compliance Officer also periodically briefs the Audit Committee on cybersecurity matters and related risks. In order to mitigate the risk associated with cyber threats, Roper maintains cybersecurity insurance coverage. In addition, Roper conducts online cybersecurity training for its employees on an annual basis, and has a continuing “phishing” training program to enhance the awareness of cyberthreats among our employees. Finally, all of our businesses apply the Cybersecurity Framework of the National Institute of Standards and Technology to help assess and manage their respective cybersecurity risks.

 

Board Committees

 

Our Board has four standing committees: Audit, Compensation, Nominating and Governance, and Executive. All four committees operate under written charters, copies of which can be obtained upon request from the Corporate Secretary or viewed on

Roper’s website (www.ropertech.com/governance-documents). Each committee reviews its charter annually and reports its activities to the full Board on a regular basis.

 

 

The current committee memberships are set forth below.

 

  Director    Audit    Compensation      Nominating and
Governance
     Executive  

Shellye L. Archambeau

                    

 

🌑

 

     

Amy Woods Brinkley

  

🌑

                             

John F. Fort III

  

🌑

              

 

🌑

 

     

Robert D. Johnson

        

 

🌑

 

                 

Wilbur J. Prezzano

        

 

🌑

 

  

 

🌑

 

  

Chair

Laura G. Thatcher

        

 

Chair

 

              

🌑

Richard F. Wallman

                    

 

Chair

 

  

🌑

Christopher Wright

  

Chair

                          

🌑

 

Audit Committee: 9 Meetings Held in 2020

The Audit Committee assists our Board in its oversight of the quality and integrity of our financial statements, our structure for compliance with legal and regulatory requirements, and the performance of our internal audit functions. The Board has determined that based upon their extensive background and expertise, Messrs. Fort and Wright and Ms. Brinkley meet the criteria of an “audit committee financial expert” under SEC rules. The Board determined that Ms. Brinkley

meets the criteria based upon her extensive career in banking spanning over thirty years, including her service on the disclosure committee and her participation in the financial statement diligence review process while at Bank of America, in addition to her current and prior service on the audit committees (or finance committee where audit functions are handled by such committee) of four other entities that issue publicly-traded securities. The Board has determined that all Audit Committee members meet the heightened independence standards under NYSE and

 

 

14         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

SEC rules applicable to audit committees and satisfy the NYSE standard of financial literacy, having accounting and related financial management expertise.

Pursuant to its charter, the Audit Committee has the authority and responsibility to:

 

 

appoint, compensate, retain and oversee the independent registered public accounting firm engaged by us; approve all audit engagement fees and terms, as well as pre-approve all non-audit engagements; and ensure that the independent auditors remain independent and objective;

 

 

review the appointment and replacement of the head of our internal audit department, who provides the Audit Committee with significant reports to management and management’s responses thereto;

 

 

consider any reports or communications submitted by the independent auditors relating to our financial statements, policies, processes or determinations;

 

 

meet with management, the independent auditors and others to discuss matters relating to the scope and results of any audit, the financial statements, and changes to any auditing or accounting principles, policies, controls procedures or practices;

 

 

review any major issues regarding accounting principles and financial statement presentations, including significant changes in the selection or application of accounting principles, and major issues as to the adequacy of our internal controls, analyses regarding significant financial reporting issues and judgments made in connection with the preparation of the financial statements, and the effects of regulatory and accounting initiatives;

 

 

review significant risks and exposures and the steps taken to monitor and minimize such risks;

 

 

establish procedures for the receipt, investigation and resolution of complaints received by Roper regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and

 

 

prepare reports and disclosures required to be included in this Proxy Statement, including the “Audit Committee Report” below.

Compensation Committee: 7 Meetings Held in 2020

The Compensation Committee administers our executive incentive compensation programs and determines, either as a committee or together with the other independent members of the Board (as directed by the Board), annual salary levels and incentive compensation awards for our executive officers. The Board has determined that all Compensation Committee members meet the heightened independence standards under NYSE and SEC rules applicable to compensation committees. The Compensation Committee also, at the direction of the Board, periodically reviews and determines the form and amounts of director compensation and reviews and makes recommendations to the Board with respect to director compensation. The Compensation Committee may delegate its duties and responsibilities to a subcommittee of the Compensation Committee and has the authority to retain its own compensation consultants. Additional information regarding the Compensation Committee’s processes and procedures for the consideration and determination of executive compensation is set forth below in this Proxy Statement under “Compensation Discussion and Analysis.”

Pursuant to its charter, the Compensation Committee has the authority and responsibility to:

 

 

annually review and approve corporate goals and objectives relevant to our CEO’s compensation and based on that evaluation, determine and approve our CEO’s compensation, including salary, bonus, incentive and equity compensation;

 

 

annually review performance and approve compensation, including salary, bonus, incentive and equity compensation for our executive officers;

 

 

grant awards and otherwise make determinations under our equity, incentive, retirement, and deferred compensation plans, to the extent provided in such plans;

 

 

determine performance goals and certify whether performance goals have been satisfied for incentive plans containing performance criteria;

 

 

periodically review and make recommendations to the Board concerning our equity, incentive, retirement, and deferred compensation plans;

 

 

review risks associated with compensation and assess those reasonably likely to have a material adverse effect on the Company;

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           15


Table of Contents

BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

 

periodically review and determine the form and amounts of director compensation; and

 

 

review and discuss with management the Compensation Discussion and Analysis disclosure regarding named executive officer compensation included in our annual Proxy Statement.

Nominating and Governance Committee:

5 Meetings Held in 2020

The Nominating and Governance Committee assists our Board in identifying individuals qualified to become directors, determining the size and composition of our Board and its committees, developing and implementing corporate governance guidelines, evaluating the qualifications and independence of directors on a periodic basis and evaluating the overall effectiveness of our Board and its committees.

Pursuant to its charter, the Nominating and Governance Committee has the authority and responsibility to:

 

 

evaluate a candidate’s qualification based on a variety of factors, including such candidate’s integrity, reputation, judgment, knowledge, and diversity (including gender and ethnicity as well as background and experience) as well as our Board’s needs;

 

 

recommend qualified individuals for Board membership, including individuals suggested by directors and/or shareholders;

 

 

periodically review the size and responsibilities of our Board and its committees and recommend changes to our Board;

 

 

annually review and recommend committee slates and additional committee members to our Board as needed;

 

 

periodically review the Company’s ESG strategy, initiatives and policies and receive updates on significant ESG activities;

 

 

review the Company’s programs for the development and management of human capital, including programs for the promotion of diversity and inclusion;

 

 

develop and recommend to our Board a set of corporate governance guidelines and periodically review such guidelines and propose changes to our Board; and

 

 

develop and recommend to our Board an annual self-evaluation process for our Board and its committees, and administer and oversee the evaluation process.

Executive Committee: No Meetings Held in 2020

The Executive Committee has the authority to exercise all powers of the Board between regularly scheduled Board meetings.

 

 

16         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

DIRECTOR COMPENSATION

Compensation for our non-employee directors is governed by our Director Compensation Plan, which is a sub-plan of our 2016 Incentive Plan. The Director Compensation Plan recognizes the Board’s instrumental contribution to Roper’s long-term success and creation of superior shareholder value. Over the past 15 years, our shareholders have earned a cumulative 1091.6% return – about three and a half times that of the S&P 500’s 311.0% return. Compensation paid to our Directors reflects the significant time commitment and effort associated with serving on our Board, including participation in a minimum of 15 days of Board meetings each year, in addition to numerous Committee meetings throughout the year. Our rapid growth, business transformation into software, and various market developments has made it increasingly challenging to find and assimilate the caliber of independent director capable of adding value to our high-growth, asset-light, diversified enterprise. Despite these challenges, in the past six years, we have added three new independent directors to the Board bringing needed key skills, strengths and capabilities to the Board while significantly increasing its level of gender diversity. Going forward, the Board will continue to insist on the high standards of qualifications that are in place.

Consistent with Roper’s long-standing “pay-for-performance” philosophy, the Director Compensation Plan ties director compensation directly to the Company’s stock performance, closely aligning the financial interests of our directors with those of our shareholders. Directors receive limited cash retainers and no perquisites (such as deferred compensation benefits), and instead receive a higher percentage of their compensation in shares of Company stock.

In April 2020, the Director Compensation Plan was amended to more closely align with market practice. The director plan was modified as follows: (i) reduction of the value of annual equity compensation from $665,000 to $385,000 (a reduction of 42%); and (ii) reduction of the supplemental annual cash retainer for the Independent Chair from $175,000 to $125,000 (a reduction of 29%). There were no changes to the annual cash retainer of $60,000 or the $5,000 committee chair retainers. The amendment to the Director Compensation Plan was approved by shareholders at the 2020 Annual Meeting of Shareholders. The amended Director Compensation Plan is summarized in the table below.

 

 2020 Annual Equity Award

  

 Economic value of $385,000 (based on the closing price of the Company’s stock on date of grant)

 

•   Award vests 50% on the six-month anniversary of the grant date and 50% on the day prior to the next Annual Meeting of Shareholders

   $ 385,000

 2020 Annual Cash Retainer

  

 Cash Retainer

   $ 60,000

 2020 Supplemental Annual Cash Retainers

  

 Independent Chair

   $ 125,000

 Chair of Audit Committee

   $ 5,000

 Chair of Compensation Committee

   $ 5,000

 Chair of Nominating and Governance Committee

   $ 5,000

We also reimburse our directors for reasonable travel expenses incurred in connection with attendance at Board, Committee and shareholder meetings and other Company business. In addition, the cash retainer and the number of restricted stock units granted are prorated for any new director appointed during the year based on the number of full months such director serves as a non-employee director during the year.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           17


Table of Contents

DIRECTOR COMPENSATION (CONTINUED)

 

Mr. Hunn is an employee of our Company and did not receive any compensation for his service as a director. His compensation is set forth in the “Executive Compensation” section below.

2020 Director Compensation

 

   Name

Fees Earned or
Paid in Cash
($)

Stock
Awards
($)
(1)(2)

Total  

($)  

  Shellye L. Archambeau

    60,000   385,000   445,000 

  Amy Woods Brinkley

    60,000   385,000   445,000 

  John F. Fort III

    60,000   385,000   445,000 

  Robert D. Johnson

    60,000   385,000   445,000 

  Robert E. Knowling, Jr.(3)

    60,833   385,000   445,833 

  Wilbur J. Prezzano

  185,000   385,000   570,000 

  Laura G. Thatcher

    64,167   385,000   449,167 

  Richard F. Wallman

    65,000   385,000   450,000 

  Christopher Wright

    65,000   385,000   450,000 
(1)  

The dollar values shown represent the grant date fair values for RSUs granted to these directors during 2020, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”).

 

(2) 

As of December 31, 2020, each non-employee director had 940 unvested RSUs outstanding, representing 50% of the 2020 award, which vest on the day prior to the Annual Meeting.

 

(3) 

Mr. Knowling retired from the Board of Directors in January 2021.

Our share ownership and retention guidelines for non-employee directors require each director to own shares of our common stock with a value of at least 10 times the annual cash base retainer, or $600,000 in value, within five years of becoming a director. Until the ownership requirements are met, non-employee directors are required to retain 60% of any shares they receive (on a net after tax basis) under our Director Compensation Plan. All of our directors are in compliance with these guidelines.

 

18         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

BENEFICIAL OWNERSHIP

Beneficial ownership is determined in accordance with SEC rules. Under the rules, the number of shares beneficially owned by a person and the percentage of ownership held by that person includes shares of common stock that could be acquired upon exercise of an option within sixty days, although such shares are not deemed exercised and outstanding for computing the percentage of ownership held by any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws where applicable.

The following table shows the beneficial ownership of Roper common stock as of March 31, 2021 by (i) each of our director nominees, (ii) each named executive officer in the “2020 Summary Compensation Table,” (iii) all of our current directors and executive officers as a group, and (iv) all persons who we know are the beneficial owners of five percent or more of Roper common stock. Except as noted below, the address of each person in the table is c/o Roper Technologies, Inc., 6901 Professional Parkway, Suite 200, Sarasota, Florida 34240.

 

  Name of Beneficial Owner

 

  

    Beneficial Ownership
    of Common Stock
(1)(2)

 

Percent     
of Class     

 T. Rowe Price Associates, Inc.

 100 E. Pratt Street, Baltimore, MD 21202

       12,785,311 (3)        12.1 %

 The Vanguard Group

 100 Vanguard Blvd., Malvern, PA 19355

       8,646,830 (4)        8.3 %

 BlackRock, Inc.

 55 East 52nd Street, New York, NY 10055

       7,323,918 (5)        7.0 %

 Shellye L. Archambeau

       5,608       * *

 Amy Woods Brinkley

       12,418       * *

 Jason Conley

       80,825       * *

 Robert C. Crisci

       111,888       * *

 John F. Fort III

       14,468 (6)        * *

 L. Neil Hunn

       401,988       * *

 Robert D. Johnson

       6,558       * *

 Wilbur J. Prezzano

       17,358       * *

 Laura G. Thatcher

       16,358       * *

 Richard F. Wallman

       56,529 (7)        * *

 Christopher Wright

       52,261 (8)        * *

 John K. Stipancich

       65,987       * *

 All current directors and executive officers as a group (12 individuals)

       842,246       * *%  
**

Less than 1%.

 

(1) 

Includes the following shares that could be acquired on or before May 30, 2021 upon exercise of stock options issued under Company plans as follows: Mr. Conley (51,150), Mr. Hunn (195,000), Mr. Crisci (69,500), Mr. Stipancich (31,500), and all current directors and executive officers as a group (347,150). Holders do not have voting or investment power over unexercised option shares.

 

(2) 

Includes the following shares of unvested restricted stock held by named executives officers over which they have sole voting power but no investment power: Mr. Conley (16,674), Mr. Hunn (111,472), Mr. Crisci (27,937), and Mr. Stipancich (16,640). The total for all current directors and executive officers as a group is (172,723).

 

(3) 

Based on information reported on Schedule 13G/A filed with the SEC on February 16, 2021, as of December 31, 2020, T. Rowe Price Associates, Inc. beneficially owned 12,785,311 shares of Roper common stock with sole voting power over 4,572,318 shares and sole dispositive power over all of the shares.

 

(4) 

Based on information reported on Schedule 13G filed with the SEC on February 10, 2021, as of December 31, 2020, The Vanguard Group (“Vanguard”) beneficially owned 8,646,830 shares of Roper common stock with shared voting power over 168,807 shares, sole dispositive power over 8,195,465 shares, and shared dispositive power over 451,365 shares.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           19


Table of Contents

BENEFICIAL OWNERSHIP (CONTINUED)

 

(5) 

Based on information reported on Schedule 13G/A filed with the SEC on February 1, 2021, as of December 31, 2020, BlackRock, Inc. (and certain of its subsidiaries) beneficially owned 7,323,918 shares of Roper common stock with sole voting power over 6,125,001 shares and sole dispositive power over 7,323,918 shares.

 

(6) 

Includes 300 shares held by Mr. Fort’s spouse.

 

(7) 

Includes 500 shares held in an IRA account by Mr. Wallman’s spouse.

 

(8) 

Includes 14,500 shares held by an LLC of which Mr. Wright is a managing member, and in which he retains a continuing beneficial ownership of 10%. The shares held by the LLC are held in a margin account. In addition, 35,208 shares directly held by Mr. Wright are held in a margin account.

DELINQUENT SECTION 16(a) REPORTS

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers, and greater than 10% shareholders to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors, and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers, directors, and greater than 10% shareholders were complied with in fiscal year 2020, except for the inadvertent late reports relating to two sales by Robert Johnson pursuant to an Exchange Act Rule 10b5-1 plan.

 

20         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) provides information about our compensation objectives and policies for our CEO and other executive officers included in the Summary Compensation Table and referred to in this CD&A as “named executive officers.” Our named executive officers for 2020 are:

 

 

L. Neil Hunn, President and Chief Executive Officer;

 

Robert C. Crisci, Executive Vice President and Chief Financial Officer;

 

John K. Stipancich, Executive Vice President, General Counsel and Corporate Secretary; and

 

Jason Conley, Vice President and Chief Accounting Officer.

OVERVIEW

With the goal of generating long-term value for our shareholders, we maintain an executive compensation program designed to:

 

 

attract and retain executives with the leadership skills, attributes and experience necessary to succeed in an enterprise with Roper’s unique strategic focus, capital deployment strategy and broad portfolio diversity;

 

 

motivate executives to demonstrate exceptional personal performance and perform consistently at or above the levels that we expect, over the long-term and through a range of economic cycles;

 

 

link compensation to the achievement of goals and objectives that we believe best correlate with the creation of long-term shareholder value; and

 

 

compensate executives in a manner consistent with private equity opportunities in light of their dual obligations for (i) supervising the operating performance of our diverse set of approximately 45 companies, and (ii) effectively deploying capital to acquire high-quality companies consistent with our strategic focus.

To achieve these objectives our compensation program combines annual and long-term components, cash and equity, and fixed and variable elements, with a bias toward long-term equity awards tied closely to driving growth and shareholder returns. Our executive compensation program rewards our executive officers when they help increase long-term shareholder value, achieve annual business goals, effectively deploy capital and successfully execute other strategic objectives.

2020 Financial Performance

In 2020, we demonstrated the resilience of our operating model. Faced with the challenges and uncertainties posed by the COVID-19 pandemic, we adapted and responded with another year of strong results.

 

 

Annual shareholder return of 22.4%, exceeding the return of 18.4% for the S&P 500

 

 

GAAP revenue increased 3% to $5.53 billion

 

 

Adjusted EBITDA increased by 3% to 1.98 billion (1)

 

 

Adjusted operating cash flow increased 14% to $1.72 billion and adjusted free cash flow increased 16% to $1.67 billion(1)

 

 

We deployed $6 billion toward the acquisition of niche software businesses, led by the acquisition of Vertafore in September, continuing our long-term transformation by enhancing the quality and resilience of our portfolio

 

 

Our annual dividend increased by 10%, increasing for the 28th consecutive year

 

(1) 

This financial information is presented on an adjusted (non-GAAP) basis. A reconciliation from non-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations”.

Compensation Updates

Roper’s Compensation Committee regularly reviews our executive compensation program with a view toward continuous improvement and consideration of investor feedback. In 2020, as a result of the sustained performance of Roper’s stock price, and in light of market practice, we transitioned from a practice of granting a fixed number of equity awards to a dollar value-based approach for all named executive officers.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           21


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

With respect to the challenges and uncertainties posed by COVID-19:

 

 

We reduced the CEO’s salary by 25% and the other named executive officers’ salaries by 20% from May through September;

 

 

In order to promote alignment with the impact of COVID-19 on our shareholders, we determined to not exercise discretion with respect to the 2020 bonus opportunity or adjust any outstanding long-term incentive program for the named executive officers; and

 

 

In light of the challenges posed by COVID-19 and the deterioration in the energy markets in both 2020 and 2021, solely for 2021 the Compensation Committee adopted an incremental cash opportunity to earn up to 50% of each named executive officer’s target bonus should Roper overdrive growth beyond the maximum payout threshold of 10% adjusted net earnings growth under the 2021 annual cash incentive plan, with the full incremental bonus being paid for adjusted net earnings growth of 15% or more.

CREATING SHAREHOLDER VALUE

The creation of shareholder value is the foundation and driver of our executive compensation program. The compensation of our named executive officers is closely aligned with the long-term interests of our shareholders.

Superior Returns for Roper Shareholders¹

Roper is proud of its long track record of superior returns for its shareholders. Roper has significantly outperformed the S&P 500 over the past 1, 3, 5, 10 and 15 years.

 

  Period

   Compound Annual
Shareholder Return
     Total Shareholder Return
(TSR)
 
   Roper      S&P 500      Roper      S&P 500  

 1-Year

     22.4%        18.4%        22.4%        18.4%  

 3-Years

     19.2%        14.2%        69.3%        48.9%  

 5-Years

     18.6%        15.2%        134.2%        103.0%  

 10-Years

     19.6%        13.9%        498.2%        267.0%  

 15-Years

     18.0%        9.9%        1091.6%        311.0%  

 

22         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

As outlined in the graph below, $100 invested in Roper at the end of 2001 would have yielded an investor $1,962 as of December 31, 2020, compared to only $479 for the same investment in the S&P 500.

 

 

LOGO

 

¹

All periods ending December 31 of the referenced year.

Focus on Cash Generation

We believe that cash generation is the best measure of our performance, and far superior to other traditional financial metrics. Through a combination of strategic and operational excellence and disciplined capital deployment, Roper has historically delivered meaningful year-over-year increases in free cash flow. After servicing debt obligations and returning capital to our shareholders through dividends, excess cash flow is deployed to acquire high-quality businesses with significant cash generation potential. We then provide these companies with oversight, guidance, and incentive systems to help drive profitable growth in our unique operating structure. This strategy has proven to be successful over the long-term, generating a compound annual shareholder return of 18% over the past 15 years.

Though some peers and other observers choose Economic Value Added (“EVA”) as a measure of performance, we believe that such a metric inappropriately penalizes companies, such as Roper, that emphasize capital deployment as a significant driver of shareholder value. For example, because EVA assigns a weighted average cost of capital to an acquisition, each acquisition that Roper makes is likely to be detrimental to its EVA for several years. However, Roper’s long-term success in driving superior returns for its shareholders while following its disciplined acquisition program demonstrates the challenges of EVA when applied to Roper’s strategic capital deployment business model. We believe that if Roper had directed excess cash flow for EVA-accretive uses, such as share repurchases, rather than compounding cash flow through cash generating acquisitions, the Company’s long-term shareholder returns would have been considerably lower. As such, the Company will continue to adhere to its proven strategy of combining operational excellence with prudent capital deployment in order to deliver superior returns to its shareholders.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           23


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Resilient 2020 Performance for Roper

Against the unprecedented backdrop of COVID-19, Roper experienced another excellent year highlighted by strong operational execution and disciplined capital deployment. Despite the challenges of COVID-19, Roper delivered increases in revenue and EBITDA, as well as record cash flow. Our strategic focus on asset-light, diversified technology businesses and our ability to generate and compound cash flow delivered another year of outperformance.

 

 

Annual shareholder return of 22.4% versus S&P 500 return of 18.4%; Three-year compounded return of 19.2% versus S&P 500 return of 14.2%

 

 

GAAP revenue increased 3% to $5.53 billion with organic revenue down 1%

 

 

GAAP gross margin increased 20 basis points to 64.1%

 

 

Adjusted EBITDA increased 3% to $1.98 billion while adjusted EBITDA margin preserved at 35.8%(1)

 

 

Adjusted operating cash flow increased 14% to $1.72 billion and adjusted free cash flow increased 16% to $1.67 billion(1)

 

 

$6 billion deployed toward the acquisition of niche software businesses, led by the acquisition of Vertafore in September.

 

 

Annual dividend increased by 10%, increasing for the 28th consecutive year

 

 

(1) 

This financial information is presented on an adjusted (non-GAAP) basis. A reconciliation from non-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations”.

Simple Strategy Drives Powerful Value Creation

Roper has a simple and successful business model that is unique among vertical software and multi-industry diversified companies. We operate high-margin, high cash-generating, asset-light businesses across a wide range of diverse end-markets. Our high-performing businesses generate excess free cash flow that our executive team deploys to acquire additional high-performing businesses. This creates a “compounding effect” for cash flow that drives long-term value creation. Our adjusted free cash flow increased from $467 million in 2010 to $1.668 billion in 2020, a compound annual growth rate of 14%, driven by our combination of outstanding business performance and value-creating capital deployment.

 

 

LOGO

Note: Free Cash Flow = Cash from Operations less Capital Expenditures less Capitalized Software Expenditures.

*Amounts provided for fiscal year 2020 are adjusted for cash taxes of $192 million related to the sale of Gatan.

 

(1) 

This financial information is presented on an adjusted (non-GAAP) basis. A reconciliation from non-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations”.

 

24         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Market Capitalization Growth

Roper’s market capitalization has increased more than $40 billion since January 2010.*

 

 

LOGO

 

*

Chart reflects ending period as December 31, 2020.

Key Metric: Cash Return on Investment

In addition to cash flow, Cash Return on Investment (“CRI”) is the key metric Roper uses to measure the performance and value of its operating businesses and potential acquisitions. CRI measures the quality of a business’s cash flow. Our business leaders, executive leaders, and Board of Directors focus on cash flow growth and disciplined investments targeted to enhance CRI.

 

 

CRI is highly correlated to shareholder value creation and we believe our strategy of improving CRI has been a key driver of our long-term performance.

 

 

Our CRI discipline, as applied throughout the organization, allows Roper to focus our investment on areas that will increase shareholder value, drive cash flow growth, and minimize physical and working capital assets.

 

 

Through a combination of internal improvements and disciplined capital deployment, Roper has increased CRI dramatically over the past 20 years, a key driver of our strong shareholder returns over the period.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           25


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Acquisition-Focused Capital Deployment

We deploy the majority of our free cash flow toward acquisitions to generate long-term growth and create long-term shareholder value. Unlike most other large corporations, we do not have a separate corporate development or merger-and-acquisition team. Instead, our CEO and other top executives are responsible for the disciplined deployment of capital through acquisitions. As such, our executives must be well versed at improving operations and optimizing capital deployment, as both are significant contributors to value creation for our shareholders.

OVERVIEW OF OUR COMPENSATION PROGRAM

 

Consideration of Say-on-Pay Vote

At the 2020 Annual Meeting of Shareholders, 85.4% of the votes cast were in favor of the advisory vote to approve our named executive officer compensation. While the level of support is lower than the prior years’ support of 97% in 2019, 95% in 2018 and 95% in 2017, the Compensation Committee believes the Say-on-Pay vote continues to reflect the solid support of our shareholders for our long-standing pay-for-performance philosophy and approach of integrating executive compensation with our value creation model, as well as for recent changes to our executive compensation program.

Taking into consideration input from shareholders, the Say-on-Pay vote, external developments, and internal considerations, Roper has undertaken many changes over the past several years to our executive compensation program to ensure it remains closely aligned with the long-term interests of our shareholders:

 

   

100% of restricted shares are performance-based, with all vesting contingent upon meeting multi-year EBITDA and relative operating cash flow margin performance requirements.

 

 

   

Only stock options, which are inherently performance-based, vest by continued time-based service alone.

 

 

   

Annual vesting of equity awards (one-third per year over three years) was eliminated.

 

 

   

CEO equity awards may vest only at the end of a three-year period.

 

 

   

Equity awards for other named executive officers may vest 50% after the second year and 50% after the third year, with no opportunity at the end of three years to make up for any shortfall in the vesting of the first 50% tranche.

 

 

   

Dividends on restricted shares are not paid until the shares are earned, and are forfeited if shares are not earned.

 

 

   

Starting in 2017, the operating cash flow less capital expenditures and capitalized software (measured as a percentage of revenue) was changed from an internal goal to relative performance against an external benchmark with 50th percentile performance required for any portion of the restricted shares to vest and 75th percentile performance required for full vesting.

 

 

   

Transitioned from the practice of granting a fixed number of equity awards to a dollar value-based approach for both non-employee directors and named executive officers as a result of the superior performance of the Company’s stock price and to align with market practice.

 

 

   

95% of our CEO’s compensation is subject to performance risk and tied to financial results and stock price.

 

 

   

Based on the results of the advisory vote at the 2017 Annual Meeting of Shareholders to approve the frequency of the Say-on-Pay vote, the Say-on-Pay vote will continue to be held every year.

 

 

26         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Checklist of Compensation Practices

Consistent with shareholder interests and market best practices, positive features of our executive compensation program include the following:

 

LOGO   LOGO
What We Do   What We Don’t Do

    Substantially all compensation for named executive officers is tied to performance.

 

    Performance-based vesting requirements apply to 100% of restricted stock awards (no time vesting alone).

 

    CEO special long-term cash bonus based on five-year results to reinforce a long-term planning horizon and sustainable growth.

 

    Cash bonuses are capped and performance-based restricted stock awards limited to 100% of target (risk mitigation features).

 

    Robust share ownership and retention guidelines.

 

    “Clawback” policy to recoup erroneously paid cash and equity compensation.

 

    Risk assessment review as part of risk mitigation process.

 

    Independent compensation consultant retained by the Compensation Committee.

 

    Limited perquisites and other benefits.

 

 

Ò    No payment of dividends on performance-based restricted stock awards until earned.

 

Ò    No defined-benefit pension plan or SERPs for named executive officers (only 401(k) plan on the same terms as other eligible employees and voluntary deferral of cash compensation).

 

Ò    No “single trigger” equity vesting upon change-in-control.

 

Ò    Severance pay is very limited, as is the use of employment agreements.

 

Ò    No hedging or pledging of Company stock is permitted (with the exception of the number of shares pledged as of the date of the adoption of the policy in January 2015 for one independent director).

 

Ò    No excise tax gross-ups on change-in-control payments.

 

Ò    No re-pricing of underwater stock options or cash buy-outs without shareholder approval.

 

Ò    No granting of stock options with an exercise price less than fair market value at grant.

Objectives of our Compensation Program

Our compensation program for our named executive officers reflects our business needs, market requirements, and challenges in creating long-term shareholder value and is designed to:

 

 

Drive long-term performance for the benefit of shareholders.

 

 

Emphasize equity compensation to align named executive officers’ interests with those of shareholders.

 

 

Provide compensation levels competitive with publicly traded companies and private equity firms. This enables us to recruit and retain seasoned leadership capable of effectively deploying capital, while driving and managing a diversified technology company that competes in a wide variety of end markets.

 

Maintain flexibility to adjust to changing business needs in a fast-paced business environment.

 

 

Simplify compensation design to promote transparency and facilitate ease of administration and communication.

 

 

Solicit and consider the views of our shareholders.

 

 

Adhere to the highest legal, governance, and ethical standards.

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           27


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

ELEMENTS OF COMPENSATION

Our executive compensation program consists of several elements, each with an objective that fits into our overall program to provide an integrated and competitive total pay package.

 

Long-Term Stock Incentives

Equity compensation is the largest and most important form of pay for our named executive officers as it achieves many of our key compensation objectives:

 

 

Tie pay to performance by linking compensation to shareholder value creation and achievement of pre-established and objective performance criteria.

 

 

Align named executive officers’ interests with those of shareholders while reinforcing a long-term planning horizon.

 

 

Attract named executive officers, particularly those interested in building long-term value for shareholders.

 

 

Retain named executive officers and reward continued service by ensuring the forfeiture of awards prior to satisfaction of multi-year service requirements.

The Company’s historical approach to granting equity awards was to grant a constant number of awards, thereby directly linking the percentage increase in the value of the equity awards to the percentage increase in Roper’s stock price at the time of grant. However, in light of the significant increase in Roper’s stock price over the years, as well as a review of prevailing market practice, the Compensation Committee transitioned from this “constant share” approach to a value-based practice of granting equity awards. To determine the appropriate value, the Compensation Committee considers the compensation practices of its peers as well as an executive’s individual performance and relative responsibilities.

We use two types of equity awards:

Stock Options

The exercise price of stock options is set at the market closing price of our common stock on the date of grant, which provides an incentive to grow shareholder value and requires continued service over multiple years to realize any gains. For the CEO, stock options vest on the third anniversary of the grant date. For the other named executive officers, stock options vest in equal installments on the second and third anniversaries of the grant date.

Performance-Based Restricted Stock

In addition to continued service, the vesting of restricted stock is 100% contingent on the Company attaining specific, pre-established and objective performance goals, as specified by the Compensation Committee. Dividends are withheld and paid only to the extent the shares are actually earned by performance. Performance-based restricted stock is intended to encourage the retention of named executive officers, provide a continuing incentive to increase shareholder value, and further align our named executive officers’ interests with shareholder interests.

Equity Grants

The Compensation Committee grants awards of performance-based restricted stock and stock options to named executive officers at the first regularly scheduled committee meeting each year. The exercise price for stock options is the closing price of Roper common stock on the date of grant. From time to time the Compensation Committee may grant additional awards in connection with promotions or increased responsibilities as well as to newly hired employees.

We use two types of cash payments:

Cash Incentives

Cash incentives support the achievement of our business strategies by tying a portion of compensation to the achievement of established financial objectives and assist in attracting named executive officers due to their market prevalence. Cash incentives are capped to avoid an excessive short-term focus and potentially excessive risk-taking. Annual cash incentives for named executive officers, including our CEO, are tied to annual performance. Our CEO’s special long-term cash incentive award is tied to cumulative financial performance over a five-year period.

Base Salary

Base salary is fixed cash compensation that reflects level and scope of responsibility, experience and skills as well as market practices. The Compensation Committee reviews each named executive officer’s base salary annually as well as in connection with a promotion or other change in responsibilities. Salary adjustments are usually effective as of January 1.

 

 

28         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Other Pay Elements

As Roper has largely avoided perquisites, supplemental pensions, and other compensation not tied to performance, the other items summarized below represent only a small portion of our named executive officers’ total compensation.

 

Retirement Benefits

 

 

Named executive officers may participate under the same terms as other eligible employees in a 401(k) plan that provides matching contributions capped at 7.5% of cash compensation, subject to limitations imposed by the Internal Revenue Code of 1986, as amended (the “Code”).

 

 

To provide financial planning flexibility, we maintain a Non-Qualified Retirement Plan, under which named executive officers may elect to defer cash compensation. This plan is intended to provide deferred compensation benefits that would have been earned under the tax-qualified 401(k) plan but for certain limitations imposed by the Code. For more information on this plan, see the “Executive Compensation—2020 Non-Qualified Deferred Compensation” section below.

Perquisites and Other Benefits

Perquisites and other non-cash benefits offered to named executive officers are limited to an automobile allowance, financial planning assistance (for Mr. Hunn) and periodic medical physicals. Club memberships are permitted when they have a business purpose.

Severance and Change in Control Provisions

We have letter agreements only with Messrs. Hunn and Stipancich. These arrangements provide

severance benefits in the event of termination of employment under certain circumstances, including in connection with a change in control. For a description of these agreements and payments under various termination scenarios, see the “Executive Compensation—Potential Payments upon Termination or Change in Control” section below.

Double Trigger Equity Vesting

In regard to equity awards, we use a “double trigger” approach to vesting upon a change in control, rather than providing for vesting solely upon a change in control (“single trigger”), because we believe it provides adequate protection and reduces potential costs for a possible acquirer of the Company. See the “Executive Compensation—Potential Payments upon Termination or Change in Control” section below for additional detail.

No Tax Gross-Ups

A named executive officer may be subject to excise taxes on benefits received in relation to a change in control of the Company. We do not provide excise-tax gross-ups to named executive officers (which would place the named executive officer in the same tax position as if the excise tax did not apply).

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           29


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Mix of Total Compensation

Compensation for our named executive officers encourages a long-term focus and closely aligns with shareholder interests. For 2020, the total direct compensation at target that was at risk and tied to stock price and performance objectives was 95% for the CEO, and 88% on average for our other named executive officers.

2020 Total Direct Compensation Mix

 

LOGO

COMPENSATION PROCESS

Compensation Committee Oversight

The Compensation Committee oversees our executive compensation program to appropriately compensate our named executive officers, motivate our named executive officers to achieve our business objectives, and align our named executive officers’ interests with those of our shareholders. The Compensation Committee reviews each element of compensation for each named executive officer and determines any adjustments to compensation structure and levels in light of various considerations, including:

 

 

The scope of the named executive officer’s responsibilities, performance and experience as well as competitive compensation levels.

 

 

Our financial results against prior periods.

 

 

The structure of our compensation program relative to sound risk management, as discussed with management.

 

 

The results of the advisory shareholder vote on the compensation of our named executive officers and input from shareholders.

 

 

Competitive pressures from private equity and capital deployment companies, as well as market practices and external developments generally.

 

 

The utilization of a compensation consultant who provides extensive external benchmarking of named executive officer compensation of industry peer group companies for comparison purposes.

 

30         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

The Compensation Committee has maintained a simple program that drives long-term performance and superior value creation for shareholders enabling Roper to attract, retain, and motivate an outstanding leadership team.

Compensation Consultant

In September 2019, the Compensation Committee, as part of an effort to bring a fresh perspective to its’ compensation practices, retained the services of Compensia, a national compensation consulting firm, (the “Consultant”) to closely monitor developments and trends in executive compensation and to provide recommendations for appropriate adjustments to the Company’s compensation program, policies, and practices in line with the Company’s business and talent strategies and investor expectations.

 

 

The Consultant is independent, reports directly to the Chair of the Compensation Committee and has never performed other work for the Company. The Compensation Committee determined that its engagement of the Consultant did not raise any conflicts of interest.

 

 

The Consultant attends all meetings of the Compensation Committee where evaluations of the effectiveness of our overall executive compensation program is conducted or where compensation for named executive officers is analyzed or approved.

 

 

The Chair of the Compensation Committee meets with the Consultant in advance of committee meetings and confers with the Consultant between meetings.

 

 

The Consultant assists in gathering and analyzing market data on compensation levels and provides expert knowledge of marketplace trends and best practices relating to competitive pay levels as well as developments in regulatory and technical matters.

Role of Our Named Executive Officers

While the Compensation Committee is ultimately responsible for making all compensation decisions affecting our named executive officers, our CEO participates in the process because of his close day-to-day association with the other named executive officers and his knowledge of the Company’s diverse business operations.

 

 

Our CEO discusses with the Compensation Committee the performance of the Company and of each named executive officer, including himself. The CEO also discusses with the committee the performance of key executives reporting to his direct reports.

 

 

The CEO makes recommendations on the components of compensation for the named executive officers, other than himself, but does not participate in the portion of the committee meeting regarding the review of his own performance or the determination of the actual amounts of his compensation.

Our Chief Financial Officer and Vice President and Chief Accounting Officer also assist the Compensation Committee as an information resource in regard to metrics related to incentive compensation. The General Counsel and Corporate Secretary also provides support to the committee, as needed, with respect to his area of expertise.

Market Benchmarking

Market pay levels and practices, including those of a self-selected peer group, are one of many factors the Compensation Committee considers in making compensation decisions.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           31


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Purpose

 

 

We benchmark to provide an external frame of reference on range and reasonableness of compensation levels and practices. Market information is used as a data point in decision-making, and not as a primary factor.

Challenges

 

 

Our high-margin, high-cash generating, asset-light business model and diversified end-markets make it challenging to select peers using traditional criteria, such as revenue, industry codes or competitors. Roper’s operating businesses have peers that can be assigned by industry, but at the enterprise level Roper has no peers that match our diverse set of businesses and unique operating model. Given our valuation relative to revenue, using only revenue in measuring Roper’s size understates the relative market value of Roper and is therefore a poor indicator. Likewise, benchmarking Roper against a

   

GICS code selected peer group can lead to inappropriate comparisons, particularly in light of Roper’s diverse business mix and private equity-like business model.

Private Equity

 

 

Given the capital deployment responsibilities of our named executive officers and the private equity-like nature of our business, we consider the compensation levels and practices used by private equity firms that offer comprehensive programs, which often include co-investment and leveraged carried-interest opportunities more akin to Roper’s operating model. However, we do not allow our named executive officers to co-invest in Company investments, nor do they benefit from carried-interest tax treatment. Our compensation practices often compete with private equity opportunities when recruiting and retaining talented professionals who possess deep expertise in both operations and capital deployment.

 

 

2020 Peer Group

Our self-selected peer group reflects our continued strong growth, sustained value creation, continuing expansion into software and technology-driven businesses, market valuation relative to revenues and gross investment, and intense competition with private equity for talent and investment opportunities. Roper’s decision and subsequent transformation to focus on software has changed the performance of the Company significantly. Today, approximately two-thirds of Roper’s EBITDA is derived from our software businesses. In addition, Roper’s historical growth and exceptional shareholder returns are in part the result of Roper’s capital deployment strategy. All of these facts make it continually difficult to select appropriate peers. The peer companies are listed below along with various size indicators.

 

  Company

     

Market
Capitalization
(1)
($ millions)

   

Enterprise
Value
(1)
($ millions)

   

Revenue(2)
($ millions)

   

Net
Income
(2)
($ millions)

   

Global Industry Classification
Standard (GICS) Sub-Industry

  TransDigm Group Incorporated

 

TDG

 

$

33,688

 

 

$

49,150

 

 

$

5,107

 

 

$

467

 

 

Aerospace & Defense

  Adobe Inc.

 

ADBE

 

$

239,917

 

 

$

238,273

 

 

$

12,865

 

 

$

5,260

 

 

Application Software

  salesforce.com, inc.

 

CRM

 

$

203,615

 

 

$

200,119

 

 

$

20,286

 

 

$

3,557

 

 

Application Software

  Intuit Inc.

 

INTU

 

$

104,096

 

 

$

100,937

 

 

$

7,837

 

 

$

1,967

 

 

Application Software

  Citrix Systems, Inc.

 

CTXS

 

$

16,018

 

 

$

17,021

 

 

$

3,237

 

 

$

599

 

 

Application Software

  KKR & Co. Inc. Class A   KKR   $ 23,046     $ 72,159     $ 3,559     $ 1,015     Asset Management and
Custody Banks
  Blackstone Group L.P.   BX   $ 43,682     $ 87,402     $ 5,555     $ 780     Asset Management and
Custody Banks

  Motorola Solutions, Inc.

 

MSI

 

$

28,829

 

 

$

33,250

 

 

$

7,414

 

 

$

949

 

 

Communications Equipment

  Zimmer Biomet Holdings, Inc.

 

ZBH

 

$

31,940

 

 

$

39,221

 

 

$

7,025

 

 

($

139

 

Health Care Equipment

  Waters Corporation

 

WAT

 

$

15,352

 

 

$

16,277

 

 

$

2,365

 

 

$

522

 

 

Life Sciences Tools & Services

  VMware, Inc. Class A

 

VMW

 

$

15,787

 

 

$

60,966

 

 

$

11,546

 

 

$

1,588

 

 

Systems Software

  Median

     

$

31,940

 

 

$

60,966

 

 

$

7,025

 

 

$

949

 

   

  Roper

 

ROP

 

$

45,209

 

 

$

54,350

 

 

$

5,527

 

 

$

950

 

 

Industrial Conglomerates

Source: FactSet

(1)

As of 12/31/20

(2)

Last four quarters available as of 12/31/20

 

32         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Long-Term Measurement Period Needed

Due to Roper’s consistently strong performance, business transformation, and short-term stock price movements, comparing other companies’ performance to that of Roper can generate misleading or distorted results. As a result, we believe a long-term performance period most accurately portrays Roper’s relative performance. Over shorter periods, performance comparisons can be skewed by the easier performance baselines of peer companies that, unlike Roper, have experienced periods of historical underperformance and benefit from a “bounce back” from a lower starting point.

CEO Compensation

The Compensation Committee considers many factors in determining the compensation of Roper’s CEO, and believes the compensation for the position is reasonable, appropriate, and aligned with shareholders’ best interests.

 

Broad Responsibilities and Effective Leadership

Mr. Hunn joined Roper in 2011, and worked closely with our prior CEO and President, Brian D. Jellison, to develop and implement the capital deployment process under which Roper has invested billions of dollars in acquisitions that have generated sustained superior returns for shareholders.    Following his appointment as CEO and President in September 2018, Mr. Hunn has led the Company’s capital deployment efforts and has continued to build and champion the sustainable high-performance and entrepreneurial culture at Roper. Prior to his appointment as CEO, Mr. Hunn served as the Company’s first Chief Operating Officer.

Outstanding Performance and Value Creation

Beginning in 2003, Roper has undergone a business transformation with increasing CRI and margins, providing a platform for continued growth and future value creation for shareholders. Mr. Hunn made significant contributions to this effort since joining the Company. During Mr. Hunn’s nine years with the Company, including time as our Chief Operating Officer, Roper’s shareholders have earned a 22.6% compound annual return and a total shareholder return of 574.4%, almost double the S&P 500’s total shareholder return of 299.6% over the same period.

Alignment with Shareholder Value Creation

Mr. Hunn’s compensation is closely tied to the performance of the Company. In 2020, approximately 85% of his total direct compensation was tied to equity

awards. This tight alignment between compensation and share price creates a strong incentive to profitably grow the enterprise. In light of Mr. Hunn’s role in creating and sustaining a significant increase in shareholder value, in 2019 the Committee also determined to provide Mr. Hunn with a long-term cash incentive in order to incentivize continued and sustainable growth over a five-year term. For additional information on the long-term cash incentive see “CEO Special Long-Term Cash Incentive” below.                

External Comparisons

Compensation for Roper’s CEO is within the range for Roper’s self-selected peers and high-performing chief executive officers of publicly traded corporations. Among private equity firms, compensation for Roper’s CEO is below levels that would be expected for commensurate levels of performance. Further, compensation for our CEO has been reasonable relative to the incremental value created for shareholders (“sharing ratio”) as measured against Roper’s self-selected peers.

In reviewing Mr. Hunn’s compensation in early 2020, the Compensation Committee reviewed his compensation compared to similarly situated CEOs, and in light of an 11% increase in his salary in 2019, the Compensation Committee decided to maintain his salary and his annual bonus opportunity at $1,000,000, and 200% of his base salary, respectively. As a result of the impact from, and uncertainties related to the COVID-19 pandemic, the Compensation Committee reduced Mr. Hunn’s base salary by 25% from May through September.

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           33


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Internal Pay Equity

The Compensation Committee considers the scope of responsibilities, experience, and performance of our executive officers and believes all named executive officers are appropriately compensated from an internal pay equity perspective. Specific considerations in regard to the CEO’s compensation include the breadth of his responsibilities and his leadership role in developing and executing Roper’s business strategy. Consistent with Roper’s lean organization, we made a conscious decision to not have many traditional corporate staff positions and

levels. In addition to low corporate overhead, Roper’s decentralized model results in operating business leaders who are highly compensated but are not named executive officers. In addition to rigorous executive development programs for key employees who may become executive officers, the Compensation Committee monitors compensation of other key Company leaders against external and internal standards. This supports our succession planning process and ensures its continuing effectiveness, as evidenced by the Company’s performance since Mr. Hunn’s succession of Mr. Jellison as President and CEO in September 2018.

 

ANALYSIS OF 2020 COMPENSATION

This section discusses compensation actions taken in 2020 for our named executive officers, as reported in the “Executive Compensation” section below.

 

Base Salary

In early 2020, the Compensation Committee increased the salaries of three of our named executive officers to reflect market practice and continued superior performance: Mr. Conley from $540,000 to $565,000, Mr. Crisci from $635,000 to $660,000, and Mr. Stipancich from $695,000 to $720,000. Mr. Hunn’s salary remained unchanged at $1,000,000. As a result of the challenges and uncertainties posed by the COVID-19 pandemic and weak demand environment for our businesses serving the energy markets, the Compensation Committee reduced the salaries of Mr. Hunn by 25% and of Messrs. Conley, Crisci and Stipancich by 20% for the period of May through September.

Annual Cash Incentive

Incentive Opportunities

Annual cash incentive opportunities for 2020 for participating named executive officers, expressed as a percentage of base salary (as established in early 2020) were set as follows: Mr. Hunn (200%), Mr. Crisci (125%), Mr. Conley (100%) and Mr. Stipancich (125%). Opportunities are reflective of market practice and were maintained at the same percentages as 2019. Our practice in 2020 and prior years has been to cap our annual incentive bonuses at the percentages above in the interest of risk mitigation and avoidance of a short-term focus to decision-making.

Funding Schedule

Similar to prior years, the annual cash incentive was determined based on the growth in adjusted net earnings. The 2020 adjusted net earnings were required to reach at least $1.331 billion (2019 adjusted net earnings) for any bonus to be earned. At $1.331 billion of adjusted net earnings, 20% of the full bonus opportunity would be earned. If adjusted net earnings increased 10% to $1.464 billion, then 100% of the full bonus amount would be earned. If between $1.331 billion and $1.464 billion, the percentage of the bonus opportunity earned would be determined through straight-line interpolation, as shown in the chart below.

For 2020, the adjusted net earnings for the Company were $1.346 billion; accordingly, the Compensation Committee approved payment of 29.2% of the bonus opportunity. Despite the unprecedented challenges posed by COVID-19, along with the significant deterioration in the energy markets, the Compensation Committee determined to not exercise discretion with respect to the 2020 bonus opportunity for the named executive officers. The performance bonuses to our named executive officers for 2020 are shown in the 2020 Summary Compensation Table below under the “Non-Equity Incentive Plan Compensation” column.

 

 

34         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

2020 Annual Cash Incentive Schedule

 

 

LOGO

Adjusted net earnings is net earnings increased or reduced to eliminate the effects of extraordinary items, accounting changes, income-related taxes, discontinued operations, restructuring of debt obligations, asset dispositions, asset write-downs or impairment charges, acquisition-related expenses, acquisition-related intangible amortization, impact of GAAP adjustments to acquired deferred revenue, litigation expenses and settlements, reorganization and restructuring programs, and non-recurring or special items (as discussed in the Company’s quarterly earnings releases).

 

2021 Incremental Cash Incentive Opportunity

In light of the challenges posed by COVID-19 and deterioration in the energy markets in both 2020 and 2021, as well as the Compensation Committee’s determination to not reduce performance targets or otherwise exercise discretion with respect to the 2020 annual incentive bonus, solely for 2021 the Compensation Committee adopted an incremental cash opportunity to earn up to 50% of each named executive officer’s target bonus should the Company overdrive growth beyond the maximum payout threshold of 10% adjusted net earnings growth under the 2021 annual cash incentive plan. Adjusted net earnings growth of 15% or more results in the entire incremental bonus being earned (with straight-line interpolation applied between 10% and 15% adjusted net earnings growth). The Compensation Committee provided this incremental overdrive bonus opportunity to further incentivize the management team to deliver outstanding incremental growth to make up for the lower than anticipated earnings growth in 2020. This incremental opportunity is only for 2021 and will not be continued next year.

CEO Special Long-Term Cash Incentive

2019-23 Incentive Opportunity

In 2019, the Compensation Committee provided Mr. Hunn with a special long-term cash incentive award in recognition of his heightened responsibility in assuming the CEO role upon the untimely death of our long-time CEO Brian D. Jellison, to protect continuity

of leadership during a period of transition, and to emphasize the importance of long-term sustained earnings and cash flow generation. The Compensation Committee established a special five-year performance period commencing January 1, 2019 and concluding December 31, 2023. The maximum amount that may be earned at the end of the five-year period is $18.6 million. The Company’s cumulative adjusted EBITDA over the five-year performance period is required to reach at least $9.880 billion for any portion of the award to be earned. If cumulative adjusted EBITDA is $9.880 billion, then the amount to be awarded will be $6.512 million1. If the cumulative adjusted EBITDA reaches $11.290 billion, then the full award, $18.6 million, will be earned2. If between $9.880 billion and $11.290 billion, the percentage of the long-term incentive opportunity earned will be determined through straight-line interpolation, as shown in the chart below. The cumulative adjusted EBITDA target is subject to adjustment on an annual basis to reflect the impact of material acquisitions and divestitures. This special long-term cash incentive award was granted to Mr. Hunn for the reasons stated above and is not intended to be a recurring element of his compensation.

 

1 

In 2020, the cumulative adjusted EBITDA target was revised to address the impact of the Company’s divestitures of its Gatan and imaging businesses.

2 

To the extent Mr. Hunn elects not to defer payment of the incentive amount or is unable to defer such amount, the incentive amount that is not deferred shall be increased by 7.5%.

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           35


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

CEO 2019-23 Special Long-Term Cash Incentive Schedule

 

 

LOGO

Adjusted EBITDA is earnings before interest, income-related taxes, depreciation and amortization, increased or reduced to eliminate the effects of extraordinary items, discontinued operations, restructuring of debt obligations, asset dispositions, asset write-downs or impairment charges, acquisition-related expenses, litigation expenses and settlements, reorganization and restructuring programs, and non-recurring or special items (as discussed in the Company’s quarterly earnings releases).

 

Long-Term Stock Incentives

We award both stock options and performance-based restricted stock to our named executive officers. In combination, we believe these awards provide a balanced focus on sustainable long-term shareholder value creation and retention of key executives. Prior to 2020, Roper’s historical practice had been to award a fixed number of long-term stock incentives. However, as a result of the sustained superior performance of Roper’s stock price, and in light of market practice, the Compensation Committee transitioned to a dollar

value-based approach for all named executive officers in 2020. The value of the awards is reflective of market practice within our compensation peer group. We have consistently used EBITDA and operating cash flow (less capital expenditures) as the metrics for determining the vesting of performance-based restricted stock awards as these two metrics are strongly correlated with the value our shareholders receive from Company performance. The target value of the awards granted to our named executive officers in January 2020 is set forth below.    

 

 

Fiscal 2020 Long-Term Equity Awards

 

      Value of
Stock
Options
   Value of
Performance-
Based
Restricted
Stock*
   Total Target
Value of
Awards

Mr. Hunn

    

$

4,250,000

    

$

12,750,000

    

$

17,000,000

Mr. Crisci

    

$

1,400,000

    

$

4,000,000

    

$

5,400,000

Mr. Stipancich

    

$

850,000

    

$

2,400,000

    

$

3,250,000

Mr. Conley

    

$

825,000

    

$

2,400,000

    

$

3,225,000

 

*

The value of the award granted is based on the weighted average closing price for the Company’s common stock over the 15 trading days ending on the date of grant.

 

36         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

These awards are shown in the 2020 Grants of Plan-Based Awards table.

The CEO’s 2020 stock options vest on the third anniversary of the date of grant. With respect to the other named executive officers, 50% of their stock options vest on the second and the third anniversaries of the date of grant.

 

 

The CEO’s 2020 restricted shares vest on the Compensation Committee’s certification of performance against the following performance criteria (with one half of the award assessed against the first criterion and the second half assessed against the second criterion):

 

   

Generation of at least $4.646 billion of adjusted EBITDA (as defined above) for the 36-month period of October 2019 through September 2022. At $4.646 billion, 17.5% of the award shall vest, and at $5.046 billion, 50% of the award shall vest, with pro-rated vesting using straight line interpolation between these two points. No portion of this half of the award will vest if the Company fails to achieve $4.646 billion in adjusted EBITDA.

 

   

For the 36-month period of October 2019 through September 2022, operating cash flow less capital expenditures and capitalized software (as a percentage of net revenue) must be at the 50th percentile of the S&P 500 (excluding finance, real estate, and utilities) (the “Modified S&P 500”). At the 50th percentile, 17.5% of the award shall vest, and at the 75th percentile, 50% of the award shall vest, with pro-rated vesting using straight-line interpolation between these two points. No portion of this half of the award will vest if the Company fails to reach at least the 50th percentile.

 

 

For our other named executive officers, the 2020 restricted shares vest on the Compensation Committee’s certification of performance against the following performance criteria (with quarters of each award assessed against the individual criterion set forth below):

 

   

Generation of at least $3.097 billion of adjusted EBITDA (as defined above) for the 24-month period of October 2019 through September 2021. At $3.097 billion, 8.75% of the award shall vest, and at $3.364 billion, 25% of the award shall vest, with pro-rated vesting using straight line interpolation between these two points. No portion of this quarter of the award will vest if the Company fails to achieve $3.097 billion in adjusted EBITDA.

 

   

For the 24-month period of October 2019 through September 2021, operating cash flow less capital expenditures and capitalized software (as a percentage of net revenue) must be at the 50th percentile of the Modified S&P 500. At the 50th percentile, 8.75% of the award shall vest, and at the 75th percentile, 25% of the award shall vest, with pro-rated vesting using straight-line interpolation between these two points. No portion of this quarter of the award will vest if the Company fails to reach at least the 50th percentile.

 

   

Generation of at least $4.646 billion of adjusted EBITDA (as defined above) for the 36-month period of October 2019 through September 2022. At $4.646 billion, 8.75% of the award shall vest, and at $5.046 billion, 25% of the award shall vest, with pro-rated vesting using straight line interpolation between these two points. No portion of this quarter of the award will vest if the Company fails to achieve $4.646 billion in adjusted EBITDA.

 

   

For the 36-month period of October 2019 through September 2022, operating cash flow less capital expenditures and capitalized software (as a percentage of net revenue) must be at the 50th percentile of the Modified S&P 500. At the 50th percentile, 8.75% of the award shall vest, and at the 75th percentile, 25% of the award shall vest, with pro-rated vesting using straight-line interpolation between these two points. No portion of this quarter of the award will vest if the Company fails to reach at least the 50th percentile.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           37


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

ADDITIONAL INFORMATION ABOUT OUR PROGRAM

Other arrangements and considerations important to a shareholder’s understanding of our overall executive compensation program are described below.

Share Ownership and Retention Guidelines

We believe named executive officers should have a significant equity interest in the Company. To promote equity ownership and further align the interests of our named executive officers with shareholders, we adopted share ownership and retention guidelines for our named executive officers. The guidelines are expected to be achieved within five years. Until the ownership requirements are met, a named executive officer must retain 60% of any applicable shares received (on a net after tax basis) under our equity compensation program. At the end of fiscal 2020, all named executive officers were in compliance with our share ownership guidelines.

 

Position

  

Stock Ownership Multiple  

CEO

  

7 times base salary 

Other Named Executive Officers

  

3 times base salary 

Shares Included

   Shares Not Included

•  Shares in which the executive or his or her spouse or child has a direct or indirect interest;

 

•  Shares owned in 401(k), savings, and profit sharing plans; and

 

•  50% of the “in the money” value of any vested stock options.

 

  

•  Unvested stock options; and

 

•  Unvested performance-based equity awards.

 

 

38         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Anti-Hedging and Anti-Pledging Policy

We prohibit our named executive officers and directors from engaging in transactions involving derivative instruments with respect to Company securities, and other securities immediately convertible or exchangeable into Company securities, and from pledging shares of Company common stock. The numbers of shares pledged as of the date of the adoption of the policy in January 2015 are excepted from this policy. Consistent with this exception, as of March 31, 2021, Christopher Wright directly held 35,208 shares in a margin account. In addition, 14,500 shares indirectly held by Mr. Wright (of which he has continuing beneficial ownership of 10%) are also held in a margin account. Mr. Wright is the only individual to whom this exception applies.

“Clawback” Policy

In the event of a material restatement of the Company’s financial results, other than a restatement due to changes in accounting principles or applicable law or interpretations thereof, the Board will review the facts and circumstances that led to the requirement for the restatement and will take such actions, including clawback, as it deems necessary or appropriate. The Board will consider whether any named executive officer received cash or equity compensation based on the original financial statements because it appeared financial performance targets had been met, when in fact such targets were not achieved based on the

restatement. The Board will also consider the accountability of any named executive officer whose acts or omissions were responsible in whole or in part for the events that led to the restatement and whether such acts or omissions constituted misconduct.

Regulatory Considerations

Effective for taxable years beginning after December 31, 2017, the Tax Cuts and Jobs Act changed certain aspects of executive compensation, including elimination of a Company’s ability to deduct “performance-based” compensation in excess of $1 million to named executive officers under Section 162(m) of the Code. We will continue to consider tax implications in making compensation decisions and, when believed to be in the best long-term interests of our shareholders, we may provide compensation that is not fully deductible.

In making decisions about executive compensation, we also consider the impact of other regulatory provisions, including Section 409A of the Code regarding non-qualified deferred compensation and Section 280G of the Code regarding compensation pursuant to a change in control. We also consider how various elements of compensation will impact our financial results. For example, ASC Topic 718, the accounting standard that determines the cost to be recognized for equity awards, is considered when awarding stock options and restricted stock awards.

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           39


Table of Contents

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2020, Ms. Thatcher, Messrs. Johnson and Prezzano and Robert E. Knowling, Jr. served on the Compensation Committee. No member of the Compensation Committee was, during 2020, an officer or employee of the Company, was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K under the Securities Act of 1933 (the “Securities Act”). During 2020, none of the Company’s executive officers served on either the board of directors or the compensation committee of any other entity, any officers of which served on either the Board of Directors or the Compensation Committee of the Company.

COMPENSATION COMMITTEE REPORT

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by:

Laura G. Thatcher, Chair

Robert D. Johnson

Wilbur J. Prezzano

 

40         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

EXECUTIVE COMPENSATION

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

2020 Summary Compensation Table

 

  Name and

  Principal Position

  Year    

Salary(1)

($)

    Stock
Awards
(2)
($)
   

Option
Awards
(2)

($)

   

Non-Equity

Incentive

Plan

Compensation(1)(3)

($)

   

All Other

Compensation(4)
($)

   

Total  

Compensation  

($)  

 

  L. Neil Hunn

 

 

2020

 

 

 

895,833

 

 

 

13,091,674

 

 

 

4,249,979

 

 

 

584,000

 

 

 

257,466

 

 

 

19,078,951  

 

  President and Chief

 

 

2019

 

 

 

1,000,000

 

 

 

12,163,500

 

 

 

3,396,474

 

 

 

2,000,000

 

 

 

252,440

 

 

 

18,812,414  

 

  Executive Officer

 

 

2018

 

 

 

900,000

 

 

 

12,406,050

 

 

 

3,241,404

 

 

 

1,800,000

 

 

 

190,913

 

 

 

18,538,367  

 

  Robert C. Crisci

 

 

2020

 

 

 

605,000

 

 

 

4,107,170

 

 

 

1,400,003

 

 

 

240,900

 

 

 

138,252

 

 

 

6,491,325  

 

  Executive Vice President

 

 

2019

 

 

 

635,000

 

 

 

3,784,200

 

 

 

1,415,198

 

 

 

793,750

 

 

 

139,901

 

 

 

6,768,049  

 

  and Chief Financial Officer

 

 

2018

 

 

 

600,000

 

 

 

3,308,280

 

 

 

1,350,585

 

 

 

750,000

 

 

 

117,843

 

 

 

6,126,708  

 

  John K. Stipancich

 

 

2020

 

 

 

660,000

 

 

 

2,464,376

 

 

 

850,026

 

 

 

262,800

 

 

 

143,156

 

 

 

4,380,358  

 

  Executive Vice President,

 

 

2019

 

 

 

695,000

 

 

 

2,229,975

 

 

 

849,119

 

 

 

868,750

 

 

 

132,000

 

 

 

4,774,843  

 

  General Counsel and Corporate
  Secretary

 

 

2018

 

 

 

680,000

 

 

 

2,067,675

 

 

 

810,351

 

 

 

680,000

 

 

 

122,450

 

 

 

4,360,476  

 

  Jason Conley

 

 

2020

 

 

 

517,917

 

 

 

2,464,376

 

 

 

825,003

 

 

 

164,980

 

 

 

109,805

 

 

 

4,082,081  

 

  Vice President and
  Chief Accounting Officer

 

 

2019

 

 

540,000

 

 

 

2,216,460

 

 

 

809,493

 

 

 

540,000

 

 

 

109,597

 

 

 

4,215,550  

 

 

(1)  

Amounts shown include, as applicable, deferrals to the 401(k) plan and the Non-Qualified Retirement Plan.

 

(2) 

The dollar values shown represent the grant date fair values for restricted stock and option awards calculated in accordance with ASC Topic 718. The assumptions used in determining the grant date fair values of these option awards are set forth in Note 11 to our consolidated financial statements for 2020, which are included in our Annual Report on Form 10-K for the fiscal year ended 2020 filed with the SEC. There is no assurance that these amounts will be realized. The restricted stock awards are all subject to performance-based vesting criteria. The performance-based criteria for awards granted in 2020 are described in the CD&A under “Analysis of 2020 Compensation—Long-Term Stock Incentives,” and the vesting schedule for awards granted in 2020 is set forth in the notes to the 2020 Outstanding Equity Awards at Fiscal Year End table below.

 

(3) 

The amounts in this column reflect payments made pursuant to our cash incentive program, which is described above in the CD&A under “Analysis of 2020 Compensation—Annual Cash Incentive,” and were based upon base salaries as of the beginning of the year.

 

(4) 

Amounts reported in the “All Other Compensation” column for 2020 include the following items. In respect of any of these items that constitute perquisites, the value shown is the Company’s incremental cost.

 

  Name   

Club

Memberships

($)

    

Company
Car

($)

    

Additional

Medical
Services

($)

    

Financial
Planning

($)

    

Contributions  
to Defined  
Contribution  
Plans
(a)  

($)  

 

  L. Neil Hunn

     10,606        24,000        3,500        2,172        217,188    

  Robert C. Crisci

     5,846        24,000        3,500        -        104,906    

  John K. Stipancich

     -        24,000        4,500        -        114,656    

  Jason Conley

     7,961        19,000        3,500        -        79,344    

 

(a)  

Reflects contributions to the Non-Qualified Retirement Plan and the 401(k) plan.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           41


Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

2020 Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards to the named executive officers for the fiscal year ended December 31, 2020.

 

           Estimated Future
Payouts Under Non-Equity
Incentive Plan  Awards
(1)
    Estimated Future
Payouts Under
Equity Incentive
Plan Awards
(2)
   

All Other

Option

Awards:#

of Securities

Underlying

Options

   

Exercise /

Base Price of

Option Awards

($/Sh)

   

Grant Date

Fair Value(4)

($)

 
  Name  

Grant

Date

   

Threshold

($)

   

Target

($)

   

Maximum

($)

    Threshold
(#)
   

Target

(#)

 

  L. Neil Hunn

 

 

01/14/2020

 

       

 

6,148

 

 

 

35,136

 

     

 

13,091,674

 

 

 

01/14/2020

 

           

 

57,068

(3) 

 

 

372.60

 

 

 

4,249,979

 

 

 

01/14/2020

 

 

 

400,000

 

 

 

2,000,000

 

 

 

2,000,000

 

         

  Robert C. Crisci

 

 

01/14/2020

 

       

 

1,929

 

 

 

11,023

 

     

 

4,107,170

 

 

 

01/14/2020

 

           

 

18,799

(3) 

 

 

372.60

 

 

 

1,400,003

 

 

 

01/14/2020

 

 

 

165,000

 

 

 

825,000

 

 

 

825,000

 

         

  John K. Stipancich

 

 

01/14/2020

 

       

 

1,157

 

 

 

6,614

 

     

 

2,464,376

 

 

 

01/14/2020

 

           

 

11,414

(3) 

 

 

372.60

 

 

 

850,026

 

 

 

01/14/2020

 

 

 

180,000

 

 

 

900,000

 

 

 

900,000

 

         

  Jason Conley

 

 

01/14/2020

 

       

 

1,157

 

 

 

6,614

 

     

 

2,464,376

 

 

 

01/14/2020

 

           

 

11,078

(3) 

 

 

372.60

 

 

 

825,003

 

 

 

01/14/2020

 

 

 

113,000

 

 

 

565,000

 

 

 

565,000

 

         

 

(1)  

For an explanation of the material terms, refer to the CD&A section above captioned “Analysis of 2020 Compensation—Annual Cash Incentive.” Amounts paid under this program for 2020 are set forth in the 2020 Summary Compensation Table.

 

(2) 

The performance restricted shares awarded to Mr. Hunn vest in November 2022. The performance restricted shares awarded to Messrs. Crisci, Stipancich and Conley vest in two equal tranches in November 2021 and November 2022. All awards are subject to the performance criteria described in the CD&A under “Analysis of 2020 Compensation—Long-Term Stock Incentives.” The threshold payout applicable to Mr. Hunn represents the number of shares that would vest upon the satisfaction of the threshold level of performance for one of the two performance criteria. The threshold payout applicable to the other named executive officers represents the total number of shares that would vest upon the satisfaction of the threshold level of performance for one of the two performance criteria for each tranche of the award. No maximum payout is provided as there is no incremental payout in the event the target level of performance is exceeded. Dividends on restricted shares will be paid only if the shares are earned by performance.

 

(3) 

The stock options awarded to Mr. Hunn vest in January 2023. The stock options awarded to Messrs. Crisci, Stipancich and Conley vest in two equal installments in January 2022 and 2023. All stock options expire on the tenth anniversary of the grant. The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant.

 

(4) 

The dollar values reflect the grant date fair value of the awards as calculated in accordance with ASC Topic 718.

 

42         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

2020 Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information with respect to outstanding equity awards at December 31, 2020 for the named executive officers.

 

  Name   Option Awards     Stock Awards  
 

# of Securities

Underlying

Unexercised

Options

Exercisable

   

# of

Securities

Underlying

Unexercised

Options

Unexercisable

   

Option

Exercise

Price ($)

   

Option

Expiration

Date

   

# of

Shares

or Units of

Stock

That Have

Not
Vested

   

Market

Value of

Shares or

Units of

Stock

That Have

Not Vested

($)

   

Equity

Incentive Plan

Awards: # of

Unearned

Shares, Units

or Other

Rights That

Have Not

Vested

   

Equity

Incentive Plan

Awards: Market or

Payout Value

of Unearned

Shares, Units or

Other Rights that

Have Not Vested

($)(1)

 

  L. Neil Hunn

 

 

5,000

 

   

 

115.22

 

 

 

01/17/2023

 

       
 

 

30,000

 

   

 

125.68

 

 

 

11/19/2023

 

       
 

 

30,000

 

   

 

156.40

 

 

 

11/17/2024

 

       
 

 

30,000

 

   

 

185.75

 

 

 

11/17/2025

 

       
 

 

40,000

 

   

 

185.42

 

 

 

01/19/2027

 

       
 

 

30,000

 

 

 

30,000

(2) 

 

 

275.69

 

 

 

01/19/2028

 

       
   

 

60,000

(3) 

 

 

270.30

 

 

 

01/15/2029

 

       
   

 

57,068

(4) 

 

 

372.60

 

 

 

01/14/2030

 

       
             

 

80,136

(7)(11) 

 

 

34,545,828

 

  Robert C. Crisci

 

 

2,000

 

   

 

145.75

 

 

 

01/16/2025

 

       
 

 

8,000

 

   

 

170.61

 

 

 

03/09/2026

 

       
 

 

12,000

 

   

 

185.42

 

 

 

01/19/2027

 

       
 

 

10,000

 

   

 

228.84

 

 

 

06/09/2027

 

       
 

 

12,500

 

 

 

12,500

(2) 

 

 

275.69

 

 

 

01/19/2028

 

       
   

 

25,000

(5) 

 

 

270.30

 

 

 

01/15/2029

 

       
   

 

18,799

(6) 

 

 

372.60

 

 

 

01/14/2030

 

       
             

 

18,023

(8)(11) 

 

 

7,769,535

 

  John K. Stipancich

 

 

9,000

 

   

 

228.84

 

 

 

06/09/2027

 

       
 

 

7,500

 

 

 

7,500

(2) 

 

 

275.69

 

 

 

01/19/2028

 

       
   

 

15,000

(5) 

 

 

270.30

 

 

 

01/15/2029

 

       
   

 

11,414

(6) 

 

 

372.60

 

 

 

01/14/2030

 

       
             

 

10,739

(9)(11) 

 

 

4,629,476

 

  Jason Conley

 

 

5,000

 

   

 

115.22

 

 

 

01/17/2023

 

       
 

 

5,000

 

   

 

134.23

 

 

 

03/11/2024

 

       
 

 

6,000

 

   

 

165.97

 

 

 

03/11/2025

 

       
 

 

6,000

 

   

 

170.61

 

 

 

03/09/2026

 

       
 

 

10,000

 

   

 

185.42

 

 

 

01/19/2027

 

       
 

 

6,000

 

 

 

6,000

(2) 

 

 

275.69

 

 

 

01/19/2028

 

       
   

 

14,300

(5) 

 

 

270.30

 

 

 

01/15/2029

 

       
   

 

11,078

(6) 

 

 

372.60

 

 

 

01/14/2030

 

       
             

 

10,714

(10)(11) 

 

 

4,618,698

 

               
(1)  

Calculated by multiplying $431.09, the closing market price of our common stock on December 31, 2020, by the number of restricted shares that have not vested.

 

(2) 

These stock options were granted on January 19, 2018 with unexercisable shares vesting in January 2021.

 

(3) 

These stock options were granted on January 15, 2019 with unexercisable shares vesting in January 2022.

 

(4) 

These stock options were granted on January 14, 2020 with unexercisable shares vesting in January 2023.

 

(5) 

These stock options were granted on January 15, 2019 with unexercisable shares vesting in two equal installments in January 2021 and 2022.

 

(6) 

These stock options were granted on January 14, 2020 with unexercisable shares vesting in two equal installments in January 2022 and 2023.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           43


Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

(7)

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows:

 

  (I) 

45,000 shares granted on January 15, 2019 and vesting in November 2021; and

 

  (II) 

35,136 shares granted on January 14, 2020 and vesting in November 2022.

 

(8) 

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows:

 

  (I) 

7,000 shares remaining from 14,000 shares granted on January 15, 2019 and vesting in November 2021; and

 

  (II) 

11,023 shares remaining from 11,023 shares granted on January 14, 2020 and vesting in two equal installments in November 2021 and November 2022.

 

(9) 

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows:

 

  (I) 

4,125 shares remaining from 8,250 shares granted on January 15, 2019 and vesting in November 2021; and

 

  (II) 

6,614 shares remaining from 6,614 shares granted on January 14, 2020 and vesting in two equal installments in November 2021 and November 2022.

 

(10) 

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows:

 

  (I) 

4,100 shares remaining from 8,200 shares granted on January 15, 2019 and vesting in November 2021; and

 

  (II) 

6,614 shares remaining from 6,614 shares granted on January 14, 2020 and vesting in two equal installments in November 2021 and November 2022.

 

(11) 

For all restricted stock awards granted, the vesting only occurs if the Compensation Committee certifies our Company’s attainment of related performance goals.

 

44         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

2020 Option Exercises and Stock Vested

 

  Name    Option Awards      Stock Awards  
   # of Shares Acquired
on Exercise
     Value Realized Upon
Exercise ($)
     # of Shares Acquired
on Vesting
      Value Realized on
Vesting ($)
 

 L. Neil Hunn

  

 

20,000

 

  

 

6,495,600

 

  

 

67,500

 

  

 

27,082,800

 

 Robert C. Crisci

  

 

16,000

 

  

 

5,052,899

 

  

 

20,000

 

  

 

8,026,040

 

 John K. Stipancich

  

 

7,000

 

  

 

1,444,764

 

  

 

13,875

 

  

 

5,569,118

 

 Jason Conley

  

 

7,500

 

  

 

2,276,451

 

  

 

7,600

 

  

 

3,026,208

 

No Pension Benefits

None of our named executive officers participates in a Company-sponsored defined-benefit pension plan.

2020 Non-Qualified Deferred Compensation

Pursuant to our Company’s Non-Qualified Retirement Plan, named executive officers may defer base salary and payments earned under the cash incentive program. Deferral elections are made by eligible executives before the beginning of each year for amounts to be earned in the following year. The executive may invest such amounts in funds that are substantially similar to those available under the 401(k) plan.

The following table sets forth certain information with respect to the Non-Qualified Retirement Plan for our named executive officers during the fiscal year ended December 31, 2020.

 

  Name    Executive
Contributions
in Last FY
(1)
($)
     Registrant
Contributions
in Last FY
(2)
($)
     Aggregate
Earnings
in Last FY
(3)
($)
     Aggregate
Withdrawals/
Distributions
($)
    Aggregate
Balance
at Last FYE
($)
 

 L. Neil Hunn

  

 

362,708

 

  

 

195,813

 

  

 

124,757

 

  

 

(571,341

 

 

824,218

 

 Robert C. Crisci

  

 

139,875

 

  

 

83,531

 

  

 

191,682

 

    

 

1,104,671

 

 John K. Stipancich

  

 

91,725

 

  

 

93,281

 

  

 

83,216

 

    

 

759,918

 

 Jason Conley

  

 

425,375

 

  

 

57,969

 

  

 

252,485

 

  

 

(83,404

 

 

1,833,009

 

(1)  

Amounts reflect participant deferrals under the Non-Qualified Retirement Plan during the fiscal year ended December 31, 2020 and all of these amounts are included in the Summary Compensation Table above in the “Salary” or “Non-Equity Incentive Plan Compensation” column as applicable.

 

(2) 

The amounts are included in the Summary Compensation Table in the “All Other Compensation” column.

 

(3) 

No portion of these earnings was included in the Summary Compensation Table because the Non-Qualified Retirement Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules.

Potential Payments upon Termination or Change in Control

The offer letters with Messrs. Hunn and Stipancich provide for certain benefits in the event of the termination of the officer’s employment under certain conditions. The amount of the benefits varies depending on the reason for termination, as explained below. In no event will excise tax gross-ups be paid in regard to a termination of employment related to a change in control.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           45


Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

Offer Letters to Messrs. Hunn and Stipancich, and Special Long-Term Cash Incentive Arrangement with Mr. Hunn

Mr. Hunn. Pursuant to an offer letter dated August 18, 2011, if Mr. Hunn’s employment were to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary. In addition, Mr. Hunn is party to a long-term cash incentive arrangement, the material terms of which may be found in the CD&A section above captioned “Analysis of 2020 Compensation—CEO Special Long-Term Cash Incentive”.

Mr. Stipancich. Pursuant to an offer letter dated June 17, 2016, if Mr. Stipancich’s employment were to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary, plus a pro-rated bonus based upon Company performance.

Summary of Termination Payments and Benefits

The following tables summarize the value of the termination payments and benefits that each of our named executive officers would receive if he had terminated employment on December 31, 2020 under the circumstances shown. Scenarios for termination for cause, voluntary resignation, and retirement have not been included because, in those circumstances, no severance or other additional payments would be made to named executive officers. Other than with respect to Mr. Hunn’s Special Long-Term Cash Incentive Award, scenarios for termination due to death or disability have not been included because they do not discriminate in scope, terms or operation in favor of named executive officers compared to the benefits offered to all salaried employees.

 

46         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

L. NEIL HUNN

 

        Termination Scenario  
  Potential Payments Upon Termination or Change in Control     

By Employee

For Good Reason

      

By Company

Without Cause

      

Change in

Control(1)

 

 Cash payments

    

$

 

 

    

$

1,000,000

 

    

$

1,000,000

 

 Payments related to Long-Term Cash Incentive Award(2)

    

 

7,442,000

 

    

 

7,442,000

 

    

 

7,442,000

 

 Accelerated Equity Awards(3)(4)

              

 2018 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

4,662,000

 

 2019 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

9,647,400

 

 2020 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

3,337,907

 

 2019 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

19,399,050

 

 2020 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

15,146,778

 

 Continued Medical Benefits

    

 

-

 

    

 

21,073

 

    

 

21,073

 

 Total

    

$

7,442,000

 

    

$

8,463,073

 

    

$

60,656,208

 

ROBERT C. CRISCI

 

        Termination Scenario  
  Potential Payments Upon Termination or Change in Control     

By Employee

For Good Reason

      

By Company

Without Cause

      

Change in

Control(1)

 

 Cash payments

    

 

$  -

 

    

 

$  -

 

    

$

-

 

 Accelerated Equity Awards(3)(4)

              

 2018 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

1,942,500

 

 2019 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

4,019,750

 

 2020 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

1,099,553

 

 2019 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

3,017,630

 

 2020 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

4,751,905

 

 Continued Medical Benefits

    

 

-

 

    

 

-

 

    

 

-

 

 Total

    

 

$  -

 

    

 

$  -

 

    

$

14,831,338

 

JOHN K. STIPANCICH

 

        Termination Scenario  
  Potential Payments Upon Termination or Change in Control     

By Employee

For Good Reason

      

By Company

Without Cause

      

Change in

Control(1)

 

 Cash payments

    

 

$  -

 

    

$

1,620,000

 

    

$

1,620,000

 

 Accelerated Equity Awards(3)(4)

              

 2018 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

1,165,500

 

 2019 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

2,411,850

 

 2020 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

667,605

 

 2019 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

1,778,246

 

 2020 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

2,851,229

 

 Continued Medical Benefits

    

 

-

 

    

 

21,073

 

    

 

21,073

 

 Total

    

 

$  -

 

    

$

1,641,073

 

    

$

10,515,503

 

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           47


Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

JASON CONLEY

 

        Termination Scenario  
  Potential Payments Upon Termination or Change in Control     

By Employee

For Good Reason

      

By Company

Without Cause

      

Change in

Control(1)

 

 Cash payments

    

 

$  -

 

    

 

$  -

 

    

$

-

 

 Accelerated Equity Awards(3)(4)

              

 2018 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

932,400

 

 2019 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

2,299,297

 

 2020 Stock Option Grant

    

 

-

 

    

 

-

 

    

 

647,952

 

 2019 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

1,767,469

 

 2020 Restricted Stock Grant

    

 

-

 

    

 

-

 

    

 

2,851,229

 

 Continued Medical Benefits

    

 

-

 

    

 

-

 

    

 

-

 

 Total

    

 

$  -

 

    

 

$  -

 

    

$

8,498,347

 

(1)  

Assumes employment is terminated involuntarily without cause.

 

(2) 

The amounts in this row represent the maximum amounts to be paid pursuant to the terms of Mr. Hunn’s Special Long-Term Cash Incentive Award under the above scenarios. The maximum amount to be paid under the Special Long-Term Cash Incentive Award is $18,605,000. To the extent Mr. Hunn elects not to defer payment of the incentive amount or is unable to defer such amount, the incentive amount that is not deferred shall be increased by 7.5%. In general, under each scenario, Mr. Hunn is entitled to a pro-rated portion of the five-year award, which at December 31, 2020, is 40% of the award. In the event of Mr. Hunn’s death or disability, the award remains outstanding, and upon the certification of the performance criteria by the Compensation Committee at the conclusion of the performance period, the amount earned would be paid to Mr. Hunn’s estate.

 

(3) 

Based on closing market price of our common stock on December 31, 2020 of $431.09 per share.

 

(4) 

Under the terms of our 2016 Incentive Plan, if within two years after a change in control, employment is terminated by the employee for good reason or by the acquirer without cause, or if the acquirer does not assume the awards upon a change in control, (i) outstanding stock options become fully exercisable, (ii) time-based vesting restrictions on outstanding restricted stock awards lapse, and (iii) the target payout opportunities on outstanding performance-based restricted stock awards shall be deemed to have been fully earned (subject to the conditions provided in the 2016 Incentive Plan).

CEO Pay Ratio

As required by SEC rules, we compared the total compensation of our CEO in 2020 to that of our median employee for the same period. Through our core human capital management system with supplementation from manual inputs, we collected information for our global workforce of 16,559 employees, including our full-time, part-time and temporary workers, and excluded our employees in Germany (268) and France (167) under the de minimis exemption. As permitted by SEC rules, our analysis also excludes approximately 1,900 employees that became Roper employees in connection with our acquisition of Vertafore in September 2020.

We identified our median employee as of December 31, 2020 by applying a consistent compensation measure for the period from January 1, 2020 to December 31, 2020 across our global employee population—annual salary or hourly pay, bonus and commissions (excluding equity compensation because inclusion of such would have had no impact on the determination of the median employee). We annualized the compensation for our full-time and part-time employees who were newly-hired in 2020. Our median employee’s total 2020 compensation was $96,212 and our CEO’s was $19,103,765 ($24,814 more than as reported in the Summary Compensation Table above due to the inclusion of certain employee benefits). Accordingly, our 2020 CEO to Median Employee Pay Ratio was 199:1.

SEC rules for identifying the median employee permit companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Consequently, the pay ratios reported by other companies may not be comparable to the pay ratio reported by Roper.

 

48         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

PROPOSAL 2: ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

We are seeking your advisory vote approving the compensation of our named executive officers as disclosed in this Proxy Statement. We believe that our executive compensation program is structured in the best manner possible to support our business objectives, evidenced by the superior returns we continue to deliver to our shareholders. In 2020, our total shareholder return was 22.4% versus S&P 500’s return of 18.4%. Over the past 10 years, our compound annual return to shareholders was 19.6%, compared to the S&P 500’s return of 13.9%.

Our executive compensation program is designed to provide competitive total compensation that is tied to the achievement of Company performance objectives and to attract, motivate and retain individuals who will build long-term value for our shareholders. See the “Proxy Statement Summary” and “Compensation Discussion and Analysis” above for key characteristics of our executive compensation program.

We are seeking shareholder approval of the following resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the related material disclosed in this Proxy Statement is hereby APPROVED.

The vote on this proposal is advisory and non-binding; however, the Compensation Committee and our Board will review the results of the vote and consider them when making future determinations regarding our executive compensation program.

 

The Board recommends a vote “FOR” the resolution providing an advisory approval of the compensation of the Company’s named executive officers.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           49


Table of Contents

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors is comprised of three non-employee directors, each of whom has been determined by the Board of Directors to be independent under the NYSE and SEC rules. The Audit Committee’s responsibilities are set forth in its charter.

The Audit Committee oversees and reviews with the full Board of Directors any issues with respect to the Company’s financial statements, the structure of the Company’s legal and regulatory compliance, the performance and independence of the Company’s independent registered public accounting firm and the performance of the Company’s internal audit function. The committee retains the Company’s independent registered public accounting firm to undertake appropriate reviews and audits of the Company’s financial statements, determines the compensation of the independent registered public accounting firm, and pre-approves all of their services. The committee also periodically reviews the work performed by other public accounting firms retained by the Company to provide various financial and information technology services. The Company’s management is primarily responsible for the Company’s financial reporting process and for the preparation of the Company’s financial statements in accordance with GAAP. The Audit Committee maintains oversight of the independent registered public accounting firm by discussing the overall scope and specific plans for their audits, the results of their examinations, their evaluations of the Company’s internal accounting controls and the overall quality of the Company’s financial reporting. The Audit Committee may delegate its duties and responsibilities to a subcommittee of the Audit Committee.

The Audit Committee maintains oversight of the Company’s internal audit function by evaluating the appointment and performance of the Company’s director of internal audit and periodically meeting with this individual to receive and review reports of the work of the Company’s internal audit department. The Audit Committee meets with management on a regular basis to discuss any significant matters, internal audit recommendations, policy or procedural changes and risks or exposures, if any, that may have a material effect on the Company’s financial statements.

The Audit Committee: (i) appointed and retained PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2020; (ii) reviewed and discussed with the Company’s management the Company’s audited financial statements for the fiscal year ended December 31, 2020; (iii) discussed with PwC the matters required to be discussed by the Auditing Standard No. 1301, “Communication with Audit Committees,” issued by the Public Company Accounting Oversight Board (the “PCAOB”); (iv) received the written disclosures and the letter from PwC required by PCAOB Ethics and Independence Rule 3526, “Communication with Audit Committees Concerning Independence,” and has discussed with PwC its independence from the Company and its management; (v) discussed matters with PwC outside the presence of management; (vi) reviewed internal audit recommendations; (vii) discussed with PwC the quality of the Company’s financial reporting; and (viii) reviewed and discussed with PwC the results of the audit of the effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

In reliance on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, for filing with the SEC.

AUDIT COMMITTEE

Christopher Wright, Chair

Amy Woods Brinkley

John F. Fort III

The foregoing report and other information provided above regarding the Audit Committee should not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or the Exchange Act, except to the extent that Roper specifically incorporates this information by reference, and shall not otherwise be deemed filed under either the Securities Act or the Exchange Act.

 

50         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

INDEPENDENT PUBLIC ACCOUNTANTS FEES

Set forth below are the professional fees billed by PwC for the fiscal years ended December 31, 2020 and 2019. It is the Audit Committee’s policy that all services performed by and all fees paid to the independent registered public accounting firm require the Audit Committee’s prior approval. As such, all audit, audit-related tax and other fees were pre-approved by the Audit Committee.

 

     Dollars in Thousands  
Fees    FY 2020      FY 2019  

Audit Fees(1)

   $ 6,093      $ 4,539  

Audit-Related Fees(2)

     477        1,639  

Tax Fees(3)

     150        583  

All Other Fees

     134        -  

Total Fees

   $ 6,854      $ 6,761  
(1)  

Aggregate fees from PwC for audit or review services in accordance with the standards of the PCAOB and fees for services, such as statutory audits and review of documents filed with the SEC. Audit fees also include fees paid in connection with services required for compliance with Section 404 of the Sarbanes-Oxley Act.

 

(2) 

Aggregate fees from PwC for assurance and related services which primarily include due diligence on acquisition targets.

 

(3) 

Tax fees include tax compliance, assistance with tax audits, tax advice and tax planning data.

 

(4) 

All other fees include XBRL tagging services and privacy assessments.

As required by Section 10A(i)(1) of the Exchange Act, all audit and non-audit services to be performed by our independent registered public accounting firm must be approved in advance by the Audit Committee, subject to certain exceptions relating to non-audit services accounting for less than five percent of the total fees paid to our independent registered public accounting firm which are subsequently ratified by the Audit Committee. In addition, pursuant to Section 10A(i)(3) of the Exchange Act, as amended, the Audit Committee has established procedures by which the Chairperson of the Audit Committee may pre-approve such services, provided the Chairperson subsequently reports the details of the services to the full Audit Committee. All audit-related fees, tax fees and all other fees, as described in the table above, were approved by the Audit Committee.

PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021

The Audit Committee has appointed PwC as our independent registered public accounting firm for the year ending December 31, 2021. Our Board of Directors recommends that the shareholders ratify this appointment. PwC has been our Company’s independent registered public accounting firm since May 2002. One or more representatives of PwC are expected to be present at the Annual Meeting and will be given the opportunity to make a statement if they so desire and respond to appropriate questions of shareholders in attendance. If this proposal does not pass, the selection of our independent registered public accounting firm will be reconsidered by the Audit Committee and the Board of Directors. Even if the proposal passes, the Audit Committee may decide to select another firm at any time.

 

The Board of Directors recommends a vote “FOR” the approval of the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           51


Table of Contents

PROPOSAL 4: APPROVAL OF THE ROPER TECHNOLOGIES, INC. 2021 INCENTIVE PLAN

Our Board of Directors adopted the Roper Technologies, Inc. 2021 Incentive Plan (the “2021 Plan”) in March 2021, subject to approval by our shareholders at this Annual Meeting. If approved by shareholders, the 2021 Plan will become effective on June 14, 2021 (the “Effective Date”) and will replace our 2016 Incentive Plan, as amended (the “Prior Plan”). The 2021 Plan will have 7,078,000 new shares reserved for issuance, plus up to 2,181,479 shares available under the Prior Plan immediately prior to the Effective Date.

Reasons for Shareholders’ Approval of the 2021 Plan

Equity awards allow us to attract and retain our key employees. The Compensation Committee believes that granting equity compensation allows the Company to attract, retain and motivate our key employees and other service providers. The ability to grant equity awards keeps us competitive for talent and is fundamental to the effectiveness of our compensation program.

Equity awards align employees’ and service providers’ interests with shareholders’ long-term interests. Equity awards promote the success and enhance the value of our Company by aligning the personal interests of our directors, consultants, officers and employees with those of our shareholders and by retaining executives through multi-year service requirements for vesting in awards.

Equity awards reflect the Compensation Committee’s pay-for-performance philosophy. The value ultimately received by participants from our equity awards is linked to the value of our common stock.

Key Features of the 2021 Plan

Conservative share counting provisions. We count the full number of shares issued, rather than the net number of shares, where shares are withheld from an award to satisfy tax withholding requirements or delivered or withheld to pay the exercise price of an option. We also count the full number of shares underlying stock appreciation rights.

No repricing of options. The 2021 Plan does not permit the repricing of options or stock appreciation rights, either directly or indirectly through replacement with new awards or cash buyouts, without stockholder approval.

“Double trigger” change in control provisions. If an acquirer assumes our awards in connection with a change in control, accelerated vesting of a participant’s awards occurs only if the participant’s employment is terminated without “cause” or the participant resigns for “good reason” within two years after the change in control.

Independent committee administration. The Plan is administered by our Compensation Committee, which is comprised entirely of independent directors.

Equity Usage Information (Includes Post-Fiscal Year End Data)

Outstanding Awards. As of March 31, 2021, under the Prior Plan as well as the Amended and Restated 2006 Incentive Plan (the “2006 Plan,” which, together with the Prior Plan, are the only plans under which awards remained outstanding), there were (i) 4,408,407 shares of our common stock subject to outstanding awards, of which 3,723,430 shares were subject to stock options outstanding with a weighted average exercise price per share of $277.45 and a weighted average remaining term of 7.11 years; (ii) 684,977 shares were subject to restricted stock awards and restricted stock units outstanding and unvested, and (iii) 2,181,479 shares of our common stock reserved and available for future awards under the Prior Plan. On March 31, 2021, the closing price of Roper common stock on the New York Stock Exchange was $403.34. The number of our shares outstanding as of March 31, 2021, was 105,146,887.

Burn Rate. Over the past three years (2020, 2019 and 2018), our annual burn rates have been 1.41%, 1.51%, and 1.69%, respectively, as calculated using the methodology of a leading proxy advisor. These burn rates were calculated by the number of stock options and full-value awards granted during the applicable year

 

52         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

(using a 2.5 multiplier for full-value awards) as a percentage of weighted average shares outstanding. Our three-year average annual burn rate calculated using this methodology has been 1.54%, which is below the leading proxy advisor’s benchmark of 2.0% applied to our industry.

Equity Overhang. We define “overhang” as the sum of outstanding equity awards under our Prior Plan and 2006 Plan, plus the number of shares available for future grant, divided by the sum of the foregoing plus the number of shares outstanding. As of March 31, 2021, our overhang was 5.9%.

Dilution. The 7,078,000 million new shares requested under the 2021 Plan represent approximately 6.7% of our shares of common stock outstanding as of March 31, 2021.

Summary of the 2021 Plan

The following is a summary of the provisions of the 2021 Plan. This summary is qualified in its entirety by the full text of the 2021 Plan, attached to this Proxy Statement as Appendix B.

Purpose. The purpose of the 2021 Plan is to promote the Company’s success by linking the personal interests of its employees, officers, directors and consultants to those of its shareholders, and by providing participants with an incentive for outstanding performance.

Administration. The 2021 Plan will be administered by the Compensation Committee of the Board of Directors, which has the authority to designate participants; determine the type or types of awards to be granted to each participant and the number, terms and conditions thereof; establish, adopt or revise any rules and regulations as it may deem advisable to administer the 2021 Plan; and make all other decisions and determinations that may be required under the 2021 Plan.

Shares Available for Awards. The 2021 Plan will have 7,078,000 new shares available for issuance, plus up to 2,181,479 shares remaining available under the Prior Plan immediately prior to the Effective Date. In addition, up to 3,631,647 shares subject to awards previously granted under the Prior Plan that are outstanding as of the Effective Date and thereafter terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason will become available under the 2021 Plan.

Share Counting. Shares underlying options and stock appreciation rights count as one share, while shares underlying all other awards count as three shares, against the number of shares available for issuance under the 2021 Plan. Shares withheld from an award to satisfy tax withholding requirements, shares delivered or withheld to pay the exercise price of an option, and the full number of shares underlying stock appreciation rights, rather than the net number of shares actually issued, are counted against the shares available under the 2021 Plan. The 2021 Plan provides that shares subject to awards that terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason, and shares underlying awards that are ultimately settled in cash, will again be available for future grants of awards under the 2021 Plan.

Eligibility. The 2021 Plan permits the grant of equity awards to employees, officers, directors and consultants of the Company and its affiliates as selected by the Compensation Committee. As of March 31, 2021, the Company had approximately 18,400 employees, 7 non-employee directors and 2 consultants that could be eligible for awards. The number of eligible participants may change over time based upon future growth of the Company and its affiliates.

Awards to Non-Employee Directors. Awards granted to the Company’s non-employee directors will be made only in accordance with the terms, conditions and parameters of the Company’s director compensation plan as in effect from time to time. In no event will the awards that may be granted to any non-employee director during any calendar year, taken together with any cash fees paid by the Company to such non-employee director during such calendar year for service on the Board, exceed a value of $750,000. However, with respect to the first calendar year during which a non-employee director serves on the Board (or, in the event such non-employee director does not receive any awards during such first calendar year, the second calendar year during which such a non-employee director serves on the Board), such maximum total value shall be $1,500,000.

Types of Equity Awards. The 2021 Plan authorizes the following types of awards:

 

 

stock options that give the holder the right to purchase shares of our common stock at a price not less than the fair market value at grant;

 

 

stock appreciation rights, which give the holder the right to receive the difference (payable in cash or stock, as specified in the award certificate) between the fair market value per share of our common stock on the date of

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           53


Table of Contents
 

exercise over the base price of the award (which cannot be less than the fair market value of a share of our common stock as of the grant date);

 

 

restricted stock, which gives the holder the rights of a holder of common stock, subject to restrictions on transferability and forfeiture on terms set by the Compensation Committee;

 

 

restricted or deferred stock units, which represent the right to receive shares of common stock (or an equivalent value in cash or other property, as specified in the award certificate) at a designated time in the future;

 

 

performance awards, which are awards payable in cash or stock upon the attainment of specified performance goals;

 

 

dividend equivalents, which entitle the participant to payments (or an equivalent value payable in stock or other property) equal to any dividends paid on the shares of stock underlying a full-value award, except that dividends or dividend equivalents will not be paid on performance-based awards unless and until the performance conditions have been met; and

 

 

unrestricted stock awards and other cash and stock-based awards in the discretion of the Compensation Committee.

Minimum Vesting Restrictions. Awards granted under the 2021 Plan generally may not vest less than one year following the grant date, except with respect to up to 5% of the total number of shares authorized under the 2021 Plan, awards made to non-employee directors, substitute awards or as a result of a participant’s death or disability or upon, or in connection with, a participant’s termination of service following, a change in control.

Limitations on Individual Awards. No eligible participant who isn’t a non-employee director may be granted any award or award denominated in shares, for more than 450,000 shares in the aggregate in any calendar year.

Performance Goals. The Committee may establish performance goals for performance-based awards which may be based on any criteria selected and approved by the Committee, including, but not limited to, (i) GAAP and adjusted-GAAP financial measures, (ii) strategic measures, (iii) sustainability measures, (iv) individual performance measures, and (v) operational measures. The business criteria may be expressed in terms of company-wide objectives or in terms of objectives that relate to the performance of an affiliate or a division, region, department or function within the Company or an affiliate. Additionally, the Committee may provide for the inclusion or exclusion of specified circumstances or events in the evaluation of performance.

Limitations on Transfer. A participant may not assign or transfer an award other than by will or the laws of descent and distribution. The Compensation Committee may permit other transfers (other than transfers for value) where it concludes that such transferability does not result in accelerated taxation, does not cause any option intended to be an incentive stock option to fail to qualify as such, and is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, any state or federal tax or securities laws or regulations applicable to transferable awards. The 2021 Plan prohibits transfers of awards for value.

Acceleration Upon Certain Events. Unless otherwise provided in an award certificate or any special plan document or separate agreement governing an award:

 

 

If a participant’s service terminates by reason of death or disability, (i) all of that participant’s outstanding options and stock appreciation rights will become fully exercisable, (ii) all time-based vesting restrictions on such participant’s outstanding awards shall lapse, and (iii) the target payout opportunities attainable under all of that participant’s outstanding performance-based awards shall be deemed to have been fully earned as of the date of termination based upon an assumed achievement of all relevant performance goals at the “target” level.

 

 

In connection with a change in control, with respect to any awards assumed by the surviving entity or otherwise equitably converted or substituted: if within two years after the effective date of the change in control, a participant’s employment is terminated without cause (or if the participant resigns for “good reason” as provided in any employment, severance or similar agreement), then (a) all of that participant’s outstanding service-based awards will become fully vested, and (b) all of that participant’s outstanding performance-based awards will be earned on a pro-rata basis based on actual performance through the end of the performance period.

 

 

In connection with a change in control, if awards are not assumed by the surviving entity or otherwise equitably converted or substituted in connection with the change in control: (a) all outstanding service-based awards will become fully vested and exercisable, as applicable, and (b) all outstanding performance-based awards will become fully vested, with the level of such vested amount to be determined based on an assumed achievement

 

54         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents
 

of performance goals at “target” levels, and there will be a prorate payout to the participants based on the length of time within the performance period that has elapsed prior to the date of the change of control.

Adjustments. In the event of a transaction between the Company and our shareholders that causes the per-share value of our common stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend), the share authorization limits under the 2021 Plan will be adjusted proportionately, and the Compensation Committee shall make such adjustments to the 2021 Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction.

Termination and Amendment. Our Board of Directors or the Compensation Committee may, at any time and from time to time, terminate or amend the 2021 Plan, but if an amendment would constitute a material amendment requiring shareholder approval under applicable listing requirements, laws, policies or regulations, then such amendment will be subject to shareholder approval.

Prohibition on Repricing. Outstanding stock options and stock appreciation rights cannot be repriced, directly or indirectly, without the prior consent of our shareholders. The exchange of an “underwater” option (i.e., an option having an exercise price in excess of the current market value of the underlying stock) for another award would be considered an indirect repricing and would, therefore, require the prior consent of our shareholders.

Certain U.S. Federal Income Tax Effects

The U.S. federal income tax discussion set forth below is intended for general information only and does not purport to be a complete analysis of all of the potential tax effects of the 2021 Plan. It is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. State, local and non-U.S. income tax consequences are not discussed, and may vary from locality to locality.

Nonstatutory Stock Options. There will be no federal income tax consequences to the optionee or to the Company upon the grant of a nonstatutory stock option under the 2021 Plan. When the optionee exercises a nonstatutory option, however, the optionee will recognize ordinary income in an amount equal to the excess of the fair market value of the stock received upon exercise of the option over the exercise price. Any gain that the optionee realizes when the optionee later sells or disposes of the shares received upon exercise of an option will be short-term or long-term capital gain, depending on how long the shares were held.

Incentive Stock Options. There will be no federal income tax consequences to the optionee or to the Company upon the grant or exercise of an incentive stock option. If the optionee holds the shares received upon exercise of the option for the required holding period of at least two years after the date the option was granted and one year after exercise, the difference between the exercise price and the amount realized upon sale or disposition of the shares received upon exercise of the option will be taxed as long-term capital gain or loss. If the optionee disposes of the shares received upon exercise of the option in a sale, exchange, or other disqualifying disposition before the required holding period ends, the optionee will recognize taxable ordinary income in an amount equal to the excess of the fair market value of the option shares at the time of exercise over the exercise price. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the shares received upon exercise of the option at the time of exercise over the exercise price will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.

Stock Appreciation Rights. A participant receiving a stock appreciation right under the 2021 Plan will not recognize income, and the Company will not be allowed a tax deduction, at the time the award is granted. When the participant exercises the stock appreciation right, the amount of cash and the fair market value of any shares of stock received will be taxed as ordinary income to the participant.

Restricted Stock. Unless a participant makes an election to accelerate recognition of the income to the date of grant as described below, a participant will not recognize income at the time a restricted stock award is granted, provided that the award is nontransferable or is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the stock as of that date (less any amount the participant paid for the stock). If the participant files an election under Code Section 83(b) within 30 days after the date of grant of the restricted stock, the participant will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock). Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Code Section 83(b) election.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           55


Table of Contents

Unrestricted Stock. A participant will recognize income at the time an unrestricted stock award is granted equal to the fair market value of the stock on the date of grant.

Restricted or Deferred Stock Units. A participant will not recognize income at the time a stock unit award is granted. Upon receipt of shares of stock (or the equivalent value in cash or other property) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the stock or other property as of that date (less any amount the participant paid for the stock or property).

Performance Awards. A participant will not recognize income at the time a performance award is granted (for example, when the performance goals are established). Upon receipt of cash, stock or other property in settlement of a performance award, the participant will recognize ordinary income equal to the cash, stock or other property received.

Tax Withholding. The Company has the right to deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including employment taxes) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of the 2021 Plan.

Tax Deductibility of Compensation Provided Under the 2021 Plan. When a participant recognizes ordinary compensation income as a result of an award granted under the 2021 Plan, the Company may be permitted to claim a federal income tax deduction for such compensation, subject to various limitations that may apply under applicable law. As a result of those limitations, there can be no assurance that any compensation awarded or paid under the 2021 Plan will be deductible, in whole or in part.

For example, Section 162(m) of the Internal Revenue Code generally disallows the deduction of compensation in excess of $1 million per year payable to certain “covered employees”, and the Tax Cuts and Jobs Act of 2017 expanded the scope of Section 162(m) in several respects, including by repealing an exemption from the $1 million deduction limit for “qualified performance-based compensation” and by expanding the class of “covered employees.” As a result, all or a portion of the compensation paid to one of our covered employees pursuant to the 2021 Plan may be non-deductible pursuant to Section 162(m).

Further, to the extent that compensation provided under the Plan may be deemed to be contingent upon a change in control, a portion of such compensation may be non-deductible by the Company under Section 280G of the Internal Revenue Code and may be subject to a 20% excise tax imposed on the recipient of the compensation.

Section 409A. Section 409A of the Internal Revenue Code imposes certain restrictions upon the payment of nonqualified deferred compensation. We intend that awards granted under the 2021 Plan will be designed and administered in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A of the Internal Revenue Code. However, the Company does not warrant the tax treatment of any award under Section 409A or otherwise.

This general discussion of U.S. federal income tax consequences is intended for the information of shareholders considering how to vote with respect to this proposal and not as tax guidance to participants in the 2021 Plan. Different tax rules may apply to specific participants and transactions under the 2021 Plan, particularly in jurisdictions outside the United States.

New Plan Benefits

Awards to be made under the 2021 Plan are not determinable because generally they are granted at the sole discretion of the Compensation Committee. Awards granted in 2020 to the named executive officers are set forth above in the section captioned “Executive Compensation.” Awards that will be granted to our non-employee directors are described in the section captioned “Director Compensation.”

Vote Required

The approval of the 2021 Plan requires the affirmative vote of a majority of the votes entitled to be cast on this proposal.

 

The Board of Directors recommends a vote “FOR” the approval of the Roper Technologies, Inc. 2021 Incentive Plan.

 

56         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents

Equity Compensation Plan Information

The following table provides information as of December 31, 2020 regarding our compensation plans under which our equity securities are authorized for issuance. Share amounts are in millions.

 

  Plan Category    (a) Number of Securities
to be Issued Upon
Exercise of Outstanding
Options, Warrants and
Rights
     (b) Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
     (c) Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding Securities
Reflected in Column(a))
 

 Equity Compensation Plans Approved by Shareholders(1)

        

 Stock options

     3.366        $255.32        -

 Restricted stock awards(2)

     0.601        -   

 Subtotal

     3.967           3.254  

 Equity Compensation Plans Not Approved by Shareholders

     -      -      -

 Total

     3.967           3.254  

 

 

(1)  

Consists of the Amended and Restated 2006 Incentive Plan (no additional equity awards may be granted under this plan) and the 2016 Incentive Plan.

 

(2) 

The weighted-average exercise price is not applicable to restricted stock awards.

 

 

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement           57


Table of Contents

ANNUAL MEETING AND VOTING INFORMATION

Our Company is soliciting the enclosed proxy for use at the 2021 Annual Meeting of Shareholders. This Proxy Statement and the enclosed proxy card are being mailed or otherwise made available to shareholders on or about April 29, 2021.

We are concurrently mailing or making available to shareholders a copy of our 2020 Annual Report, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. Our Annual Report on Form 10-K and its exhibits are available at www.sec.gov. Our 2020 Annual Report and Annual Report on Form 10-K are not part of these proxy soliciting materials.

This Proxy Statement contains important information for you to consider when deciding how to vote. Please read this information carefully.

 

Q:

When is the Annual Meeting?

 

A:

Date & Time:

Monday, June 14, 2021 at 9:30 a.m. (local time) (and at any postponement or adjournments thereof)

Place:

6901 Professional Parkway

Suite 200

Sarasota, Florida 34240

 

Q:

What is the purpose of this meeting?

 

A:

This is the Annual Meeting of our shareholders. At this meeting, we will be voting on the following matters:

 

  1.

The election of eight directors;

 

  2.

Approval of, on a non-binding advisory basis, the compensation of our named executive officers;

 

  3.

Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021; and

 

  4.

Approval of the Roper Technologies, Inc. 2021 Incentive Plan.

Our Board of Directors strongly encourages you to exercise your right to vote on these matters. Your vote is important. Voting early by Internet, telephone or mailing proxy or voting instruction card helps ensure that we receive a quorum of shares necessary to hold the meeting.

Q:

What happens if additional matters are presented at the Annual Meeting?

 

A.

We are not aware of any matters to be acted upon at the Annual Meeting other than the proposals described in this Proxy Statement. The Board of Directors has named Michael R. Peterson and John K. Stipancich as proxy holders for this Annual Meeting. If for any reason a director nominee is not available as a candidate, the proxy holders may vote your shares for another candidate who may be nominated by the Board, or the Board may reduce its size.

All shares of our common stock represented by properly executed and unrevoked proxies will be voted by the person named as proxy holder in accordance with the instruction given. If no instructions are indicated on a proxy, properly executed proxies will be voted as follows:

FOR each director nominee;

FOR the approval of the compensation of our named executive officers;

FOR the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021; and

FOR the approval of the Roper Technologies, Inc. 2021 Incentive Plan.

 

 

58         

 

  LOGO

      Roper Technologies, Inc. 2021 Proxy Statement


Table of Contents
Q:

Who may vote at the Annual Meeting?

 

A:

Only shareholders of record at the close of business on the record date will be entitled to vote at the Annual Meeting or any postponed or adjourned meeting, and these shareholders will be entitled to vote whether or not they have transferred any of their shares of Roper common stock since that date.

 

Q:

What is the record date?

 

A:

Our Board has