UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C., 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT
TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant |
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Filed by a party other than the registrant |
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Check the appropriate box:
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Preliminary proxy statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive proxy statement |
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Definitive additional materials |
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Soliciting material pursuant to Rule 14a-12 |
ESCO
TECHNOLOGIES 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):
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Fee paid previously with preliminary materials. |
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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ESCO Technologies Inc.
9900A Clayton Road St. Louis, MO 63124 Bryan Sayler Chief Executive Officer and President |
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December 19, 2023 |
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Dear
Fellow Shareholders,
I
am pleased to invite you to attend our 2024 Annual Meeting of Shareholders of ESCO Technologies Inc., to be held on Wednesday, February
7, 2024 at the Renaissance Austin Hotel, 9721 Arboretum Boulevard, Austin, Texas 78759, at 8:00 a.m. Central Time.
The
accompanying Notice of Annual Meeting and Proxy Statement describe the items of business that will be discussed and voted on at the Meeting.
We value your input and encourage you to review this material as well as our Annual Report for fiscal 2023 and to vote your shares of
common stock. You have a choice of voting online, by telephone, by returning the enclosed proxy card by mail, or at the Meeting.
In
fiscal 2023, broad end-market strength enabled us to deliver record-breaking financial results. Robust demand in our commercial aerospace
and utility end-markets helped us achieve double digit organic revenue growth. While overall economic constraints have eased in many areas,
our teams continued to work diligently throughout the year to navigate the continuing impacts of inflation, labor shortages, and aerospace
supply chain constraints. With our commitment to driving operational efficiency and improved returns on invested capital, we leveraged
our revenue growth in 2023 to deliver increased profitability.
Our
technology-oriented businesses serve a diverse array of thriving end markets with clear momentum and secular growth drivers. Our engineering
expertise helps us address some of today’s most difficult technical challenges and has us well-positioned to realize long-term growth.
We are excited about the future and our ability to deliver innovative solutions to meet the needs of our customers. We appreciate your
investment in ESCO and are committed to driving sustained shareholder value creation as we continue to grow the Company.
On
behalf of the Board of Directors and all of us at ESCO, thank you for your ongoing support.
Sincerely,
Bryan
Sayler
Chief
Executive Officer and President |
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| | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Notice of Annual Meeting of Shareholders
St.
Louis, Missouri
December
19, 2023
To
the Shareholders of ESCO Technologies Inc.:
The
2024 Annual Meeting of the shareholders of ESCO Technologies Inc. will be held on Wednesday, February 7, 2024 at the Renaissance Austin
Hotel, 9721 Arboretum Boulevard, Austin, Texas 78759, beginning at 8:00 a.m. Central Time, for the following purposes:
1. |
To elect Janice L. Hess and Bryan
H. Sayler as directors of the Company to serve for three-year terms expiring in 2027; |
2. |
An advisory vote to approve the compensation
of the Company’s executive officers; and |
3. |
To ratify the appointment of the Company’s
independent registered public accounting firm for the 2024 fiscal year. |
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Your Board of Directors
recommends that you vote: |
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FOR each nominee
for director, and |
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FOR Proposals
2 and 3. |
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Shareholders
of record at the close of business on December 1, 2023 are entitled to vote at the Meeting.
Information
about each of the above Proposals, as well as instructions for voting and additional relevant information concerning the Company, are
set forth in the accompanying Proxy Statement and in the “Important Notice Regarding the Availability of Proxy Materials”
sent to all shareholders entitled to vote at the Meeting beginning on or about December 19, 2023.
By
Order Of The Board Of Directors,
David
M. Schatz
Senior
Vice President, General Counsel and Secretary
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This Notice, the Proxy Statement attached to this
Notice and our Annual Report to Shareholders for the fiscal year ended September 30, 2023 are available electronically at www.envisionreports.com/ESE
and on our website at www.escotechnologies.com. |
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Even if you plan to attend the Meeting in person,
PLEASE VOTE: |
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Electronically via the Internet at www.investorvote.com/ESE;
or |
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By telephone within the United States,
U.S. territories or Canada at 1 800 652 VOTE (8683); or |
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If you requested paper or e-mail copies
of the proxy materials, please complete, sign, date and return the proxy card. |
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| | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Proxy Statement Table of Contents
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| | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Proxy Statement Summary
This Proxy Statement relates to
the 2024 Annual Meeting of the shareholders of ESCO Technologies Inc., sometimes referred to herein as the Company, we, our or us. Our
stock is listed on the New York Stock Exchange (NYSE), where our ticker symbol is “ESE”.
This Proxy Statement is provided pursuant to the rules
of the Securities and Exchange Commission (SEC) in connection with our Management’s solicitation of votes for the Meeting.
This Summary highlights certain information relating
to the Meeting and the items to be voted on at the Meeting. For additional information, including important business, compensation and
corporate governance matters, please refer to the following sections of this Proxy Statement and to our 2023 Annual Report on Form 10-K.
Unless otherwise noted, all references to 2023 in this Proxy Statement refer to our fiscal year ended September 30, 2023.
MEETING
INFORMATION
Date
and Time |
Location |
Record
Date |
Voting |
Wednesday,
February 7, 2024, at 8:00 a.m. Central Time |
The
Renaissance Austin Hotel 9721 Arboretum Boulevard Austin, Texas 78759 |
Close
of business on December 1, 2023 |
Shareholders
of record as of the record date are entitled to vote. Each share of common stock is entitled to one vote on each of the director nominees
and one vote on all other matters to be considered at the Meeting. |
How
to Vote:
PROPOSALS
AND BOARD RECOMMENDATIONS
Proposal |
See
Page |
Required
Vote (See “Voting” on page 5) |
Board’s
Voting Recommendation |
1. Election
of Directors |
7 |
To
be elected, a nominee must receive a majority of the votes cast |
FOR
each
director nominee |
2. Say
on Pay – Advisory Vote to Approve Executive Compensation |
21 |
To
be approved, this proposal must receive a majority of the votes cast |
FOR |
3. Ratification
of Appointment of Independent Registered Public Accounting Firm |
50 |
To
be approved, this proposal must receive a majority of the votes cast |
FOR |
Management
is not aware of any other matters that will be presented at the Meeting. However, if any other proposal is properly presented for a vote
at the Meeting, other than the election of directors and the other proposals described in this Proxy Statement, the proxy holders will
vote on it in their own discretion.
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1 | Proxy Statement Summary | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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NOMINEES
FOR DIRECTOR
The following table provides summary information about
our director nominees, each of whom is a current director of the Company:
Nominee |
Primary
Occupation |
Independent |
Board
Committees |
Key
Attributes/Qualifications |
Janice
L. Hess |
Retired
President, Engineered Systems Segment of Teledyne Technologies Incorporated (diversified multinational company serving industrial markets
requiring advanced technology and high reliability) |
Yes |
Audit,
Governance |
Four
decades of operational, financial and leadership experience as well as demonstrated performance in growing markets similar to those served
by the Company |
Bryan
H. Sayler |
Chief
Executive Officer and President of the Company |
No |
Executive |
Nearly
30 years of management experience at the Company across several of its core businesses |
DIRECTOR
DIVERSITY AND TENURE
Diversity is one of the factors that our Governance
Committee considers in identifying the pool of director search candidates. The Board appreciates the benefits diversity brings and strives
to assemble a Board with not only a variety of business and professional backgrounds, but also diversity in areas such as race, ethnicity
and gender.
COMPANY
OVERVIEW AND BUSINESS HIGHLIGHTS
We
are:
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A global provider of highly engineered
filtration and fluid control products and integrated propulsion systems for the aviation, navy, space and process markets worldwide, as
well as composite-based products and solutions for navy, defense and industrial customers; |
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An industry leader in radio frequency
test and measurement solutions for the wireless, electronics, medical, automotive and defense industries; and |
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A leading provider of diagnostic instruments,
software and services for the benefit of industrial power users and the electric utility and renewable energy industries. |
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2 | Proxy Statement Summary | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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We conduct our business through a number of wholly-owned
direct and indirect subsidiaries. Our business is focused on generating predictable and profitable long-term growth through continued
innovation and expansion of our product offerings across each of our business segments. Our corporate strategy is centered on a multi-segment
approach designed to enhance the strength and sustainability of sales and earnings growth by providing lower risk through diversification
In 2023, strength across our end markets enabled us
to achieve record orders and double-digit sales growth. We leveraged that growth to deliver higher profit margins and diluted EPS that
increased 13 percent to $3.58 per share. With a solid balance sheet and substantial liquidity, we remain well positioned to fund future
product development and capital investments to drive organic growth as well as acquisitions to add to our technology-driven portfolio
of products and services.
The following are only selected measures of Company
performance. For complete financial information, please see the audited financial statements included in our 2023 Annual Report to Shareholders.
Net
Sales |
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Net
Earnings |
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Diluted
Earnings Per Share |
$956M |
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$92.5M |
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$3.58 |
Record
Sales +11% over prior year |
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+12%
over prior year |
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+13%
over prior year |
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Entered
Orders |
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Ending
Backlog |
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Leverage
Ratio |
$1,033M |
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$772M |
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0.54X |
Record Orders
+8% over prior year |
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Record Ending Backlog
+11% over prior year |
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$640M of liquidity
at year end |
GOVERNANCE
HIGHLIGHTS
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All directors other than the CEO are
independent |
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All committee chairs are independent |
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Each director attended at least 75% of
Board and committee meetings |
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Independent directors hold executive
sessions during each Board meeting |
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Board conducts self-assessments annually |
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The full Board exercises oversight responsibility
for material risks, and delegates oversight of other risks to the appropriate committees |
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Three of our eight directors are diverse
in gender and/ or ethnicity |
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Robust clawback policy for executive
compensation plans |
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Competitive share ownership guidelines
for directors and executive officers |
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Executive compensation driven by pay
for performance |
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Annual shareholder vote on executive
compensation |
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Executive officers and directors may
not hedge or pledge company shares |
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Independent directors review CEO performance
annually |
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Average tenure of independent directors
is 9.9 years |
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Median age of independent directors is
64 years |
EXECUTIVE
COMPENSATION HIGHLIGHTS
Our compensation objective is to develop and maintain an industry-competitive
compensation program that attracts, retains, motivates and rewards our executive officers and other senior officers and key executives.
The compensation program is designed to emphasize performance-based compensation in alignment with our business strategy.
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3 | Proxy Statement Summary | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Our compensation programs are designed to maximize
shareholder value by allocating a significant portion of executive compensation to performance-based pay that is dependent on the achievement
of our performance goals. Our annual cash incentive program and equity-based Performance Share Unit awards (PSUs) utilize a variety of
key strategic and financial performance metrics and are designed to reward positive financial performance and limit unnecessary risk taking.
Stock ownership guidelines align the interests of executives and shareholders by ensuring that executives bear the economic risk of share
ownership.
For 2023, our Human Resources and Compensation Committee
used the performance metrics “Adjusted EPS” and “Cash Flow from Operating Activities,” to determine cash incentive
plan compensation earned during fiscal 2023 and thereby incent the participants and align cash incentive compensation with business objectives.
Adjusted EPS is a non-GAAP measure, and the factors used in the calculation of the 2023 adjustment differed slightly from those used to
calculate the 2022 adjustment; for a detailed description and a reconciliation to the nearest GAAP measure, see 2023 Cash Incentive
Metrics in the Compensation Discussion and Analysis section.
Our long-term equity incentive (LTI) program includes
Restricted Share Units (RSUs) which fully vest over a period of 3½ years and, since 2022, PSUs with a three-year performance period,
as described in the Compensation Discussion and Analysis section below.
The following charts summarize the 2023 pay mix for
the CEO and the other named executive officers, with 75% of the CEO’s target direct compensation at risk and 63% of the average
of the other named executive officers’ target direct compensation at risk. Target direct compensation is defined as the sum of the
executive officer’s base salary, annual cash incentive award, and annual long term incentive awards, in each case calculated at
the target level approved by the Committee.
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4 | Proxy Statement Summary | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Voting
Whether or not you expect to be present in person at the Meeting,
please vote in advance using one of the voting methods described in the Important Notice Regarding the Availability of Proxy Materials
sent to the shareholders on or about December 19, 2023, which contained instructions on how to access the proxy materials and
vote electronically via the Internet, by telephone, by mail, or in person. That Notice also contained instructions on how to request a
paper or e-mail copy of the proxy materials, including the Company’s 2023 Annual Report to Shareholders, this Proxy Statement, and
a proxy card. The 2023 Annual Report to Shareholders and this Proxy Statement are also available for review on the Company’s website,
www.escotechnologies.com.
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You may vote on each proposal, by proxy
or by voting in person or via the Internet or by telephone, in which case your shares will be voted in accordance with your choices. |
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You may abstain from voting on any one
or more proposals, or withhold authority to vote for any one or more directors, which will have the effect described under Required
Vote below. |
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You may return a properly executed proxy
form without indicating your preferences, in which case the proxies will vote the shares according to the Board’s recommendations. |
You will have the right to revoke your proxy at any time before it is
voted by giving written notice of revocation to the Secretary of the Company, or by duly executing and delivering a proxy bearing a later
date, or by attending the Meeting and casting a contrary vote in person.
HOW
TO VOTE
REQUIRED
VOTE
At
the Meeting, shareholders will be entitled to cast one vote for each share held by them of record on the record date. There is no cumulative
voting with respect to the election of directors. The Company has no non-voting shares.
The affirmative vote of the holders of a majority
of the shares represented in person or by proxy at the Meeting and entitled to vote on the matter in question will be required to elect
directors, to approve each of the individual proposals described in this Proxy Statement, and to approve any other matters properly brought
before the Meeting.
The Company’s Corporate Governance Guidelines
provide that an incumbent director who fails to obtain a majority vote must promptly offer his or her resignation to the Chair, and the
remaining directors shall meet to consider whether it is in the best interests of the Company to accept the resignation or to permit the
incumbent to remain on the Board for such period of time as the Board may determine or until a successor is elected and qualified.
Shares represented by proxies which
are marked “Withhold” authority to vote for the election of one or more of the nominees for election as directors or marked
“Abstain” on any one or more of the other individual proposals described in this Proxy Statement will be counted for the purpose
of determining the number of shares represented by proxy at the Meeting, but proxies so marked will have the same effect as if the shares
were voted against such nominee or nominees or such proposals.
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5 | Voting | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Under the Rules of the NYSE, the proposal to approve the appointment
of independent registered public accountants is considered a “discretionary” item, which means that brokerage firms may vote
in their discretion on this matter on behalf of clients who have not furnished voting instructions at least 10 days before the date of
the Meeting. In contrast, the election of directors and the other items on the Meeting agenda are “non-discretionary” items,
which means that brokerage firms that have not received voting instructions from their clients on these proposals may not vote on them.
These so-called “broker non-votes” will, if the underlying shares are otherwise represented at the Meeting, be considered
to be present for purposes of determining a quorum, but will be treated as not entitled to vote on such non-discretionary or matters;
they will therefore not be considered in determining the number of votes necessary for approval and will have no effect on the outcome
of the votes for directors or the other matters to be considered at the Meeting.
If your shares are held by a broker, it is important that you
provide voting instructions to your broker so that your votes will be counted.
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6 | Voting | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Proposal 1: Election of Directors
The Board of Directors recommends a vote FOR all nominees.
The Board is divided into three classes, with the terms of office of each
class ending in successive years. The terms of directors Bryan H. Sayler and James M. Stolze will expire at the Meeting. However, Mr.
Stolze has decided to retire from the Board when his current term expires at the 2024 Annual Meeting and is not standing for re-election.
In order to rebalance the three classes of directors, and with the consent of director Janice L. Hess, whose current term would not have
expired until 2025, the Board reclassified Ms. Hess into the same class as Mr. Sayler and Mr. Stolze, with a term expiring in 2024, and
has nominated Ms. Hess and Mr. Sayler for election to new three-year terms expiring at the 2027 Annual Meeting. The Board also decided
to reduce the number of directors from eight to seven upon the expiration of Mr. Stolze’s term. As a result, after the 2024 Annual
Meeting the Board will have two directors with terms expiring in 2027, three directors with terms expiring in 2026, and two directors
with terms expiring in 2025.
If elected, the nominees would serve until the expiration of their
terms and until their successors have been elected and qualified. Proxies cannot be voted for more than the number of Board nominees.
Should any one or more of the nominees become unable or unwilling to serve (which is not expected), the proxies unless marked to the contrary
will be voted for such other person or persons as the Board may recommend.
NOMINEES
FOR TERMS ENDING IN 2027
Janice
L. Hess
● Age:
64
● Director
since 2022
● Term
expires 2024 (see discussion above)
● Board
Committees: Audit, Governance
● Qualifies
as an audit committee financial expert under SEC rules |
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Ms.
Hess’s four decades of operational, financial and leadership experience, commitment to continuous improvement, as well as demonstrated
performance in growing traditional, adjacent and emerging markets similar to those served by the Company, make her well-qualified to assist
the Board in guiding Company strategy at the highest levels.
Principal
Occupation and Business Experience
2014–2022:
President, Engineered Systems Segment of Teledyne Technologies Incorporated (diversified multinational company providing enabling technologies
for industrial growth markets requiring advanced technology and high reliability; the Engineered Systems Segment provides innovative systems
engineering and integration and advanced technology development, and is a U.S. Government contractor serving defense, space, energy and
maritime markets)
2000–2014:
Held a number of other positions with Teledyne, including Executive Vice President and Chief Financial Officer of Engineered Systems
1984–2000:
Held positions of increasing responsibility with Intergraph Corporation (now Hexagon AB), a multinational corporation, including Vice
President, Finance and Administration and Chief Financial Officer, Computer Systems
Other
Experience and Education
B.S.B.A.
from Auburn University; staff accountant with PricewaterhouseCoopers LLP from 1981 to 1983 |
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7 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Bryan H. Sayler
● Age:
57
● Director
since 2023
● Board
Committees: Executive |
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Mr. Sayler’s nearly 30 years of experience at
the Company across several of its core businesses as well as his current position as Chief Executive Officer and President make him uniquely
qualified to provide the Board of Directors with valuable insights and perspectives concerning all areas of the Company’s business.
Principal Occupation and Business Experience
2023–Present: Chief Executive Officer, President
and a director of the Company
1995–2022: Held various positions of increasing
responsibility within the Company, including as President of the Utility Solutions Group and Doble Engineering from 2016-2022
Other Experience and Education
B.A. in Pre-Seminary from Southeastern College; M.B.A.
from Baylor University |
DIRECTORS
CONTINUING IN OFFICE
Patrick M. Dewar
● Age:
63
● Director
since 2017
● Term
expires 2026
● Board
Committees: Audit (Chair), Compensation
● Qualifies
as an audit committee financial expert under SEC rules |
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Mr. Dewar’s extensive strategic and operational
experience in the aerospace and defense markets makes him well-qualified to assist in guiding Company strategy at the highest levels.
Principal Occupation and Business Experience
2016–present: Chief Executive
of The Trenton Group, LLC (investment and strategy consulting firm focused on security, aerospace and defense technology companies)
2013–2016: Executive Vice President of Lockheed Martin International
and Chairman of Lockheed Martin Global, Inc.
2010–2013: Senior Vice President, Strategy and Business Development
for Lockheed Martin Corporation
Prior to 2010: Held various positions with Lockheed Martin and GE Aerospace
Other Public Company Directorships Within Past Five Years
2018–present: Butler America Aerospace,
LLC, a subsidiary of HCL Technologies Ltd. (provider of engineering, design IT and support services primarily to US aerospace and defense
markets)
Other Experience and Education
M.S. in Electrical Engineering, Drexel University; B.S. in Engineering,
Swarthmore College. Member of the Council on Foreign Relations; senior adviser to numerous investment firms on aerospace and defense matters
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8 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Vinod M. Khilnani
● Age:
71
● Director
since 2014
● Term
expires 2026
● Board
Committees: Audit, Compensation (Chair)
● Qualifies
as an audit committee financial expert under SEC rules |
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As
a former public company executive, Mr. Khilnani brings to the Board of Directors a wealth of management experience and business knowledge
regarding operational, financial and corporate governance issues, as well as extensive international experience with global operations.
Principal
Occupation and Business Experience
2013:
Executive Chairman of the Board of Directors of CTS Corporation (designer, manufacturer and seller of electronic components and sensors)
2009–2013:
Chairman and Chief Executive Officer of CTS
2007–2009:
President and Chief Executive Officer of CTS 2001–2007: Senior VP and CFO of CTS
Other
Public Company Directorships Within Past Five Years:
2009–present:
Materion Corporation (manufacturer of highly engineered advanced materials, performance alloys and composites, and precision coatings
for global markets)
2013–2023:
1st Source Corporation (bank holding company)
2014–2021:
Gibraltar Industries (manufacturer and distributor of products for the building markets)
Other
Experience and Education
M.B.A.
from the University of New York at Albany; B.A. in Business Administration from Delhi University |
Leon J. Olivier
● Age:
75
● Director
since 2014
● Term
expires 2025
● Board
Committees: Governance (Chair) |
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Mr.
Olivier’s broad utilities industry experience in all aspects of strategy and operations, including conventional and nuclear generation,
renewable energy development (hydro, wind and solar), electric and gas transmission, distribution and development, and Smart Grid strategy
and design, and including his extensive experience in senior leadership and management roles, makes him well qualified to serve on the
Board of Directors and to assist in guiding strategy at the highest levels.
Principal
Occupation and Business Experience
2014–2020:
Executive Vice President, Enterprise Energy Strategy and Business Development, of Eversource Energy (formerly Northeast Utilities) (public
utility holding company engaged in generation, transmission and distribution of electricity and distribution of natural gas to customers
in Connecticut, Massachusetts and New Hampshire) 2007–2014: Executive Vice President and Chief Operating Officer of
Eversource Energy
Other
Experience and Education
M.B.A.
from Northeastern University; served in the U.S. Navy submarine service; former director of Essex Financial Services, Essex, CT |
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9 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Robert J. Phillippy
● Age:
63
● Director
since 2014
● Term
expires 2026
● Chair
of the Board
● Board
Committees: Executive, Compensation, Governance
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Along
with his experience as chief executive officer of a publicly held technology company, Mr. Phillippy brings to the Board of Directors extensive
experience in mergers and acquisitions as well as in new product innovation and international business development; and as independent
Chair of the Board he provides valuable insights and perspectives regarding all areas of the Company’s business.
Principal
Occupation and Business Experience
2016–present:
Executive consultant to technology companies on a range of strategic, operational and organizational issues
2007–2016:
President, Chief Executive Officer and a director of Newport Corporation (developer, manufacturer and supplier of lasers, optics and photonics
technologies, products and systems for scientific research, microelectronics, defense and security, life and health sciences and industrial
markets worldwide)
2004–2007:
President and Chief Operating Officer of Newport Corporation
1996–2004:
Held various executive management positions with Newport Corporation
1984–1996:
Held various sales and marketing management positions at Square D Company (now Schneider Electric) (electrical equipment manufacturer)
Other
Public Company Directorships Within Past Five Years
2018–present:
Materion Corporation (manufacturer of highly engineered advanced materials, performance alloys and composites, and precision coatings
for global markets) 2018–present: Kimball Electronics (manufacturing solutions provider of durable electronics and other
products for a variety of industries globally)
Other
Experience and Education
M.B.A.
from Northwestern University’s Kellogg School of Management; B.S. in Electrical Engineering from the University of Texas at Austin |
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10 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Gloria L. Valdez
● Age:
61
● Director
since 2019
● Term
expires 2025
● Board
Committees: Compensation, Governance |
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Ms.
Valdez’s extensive strategic and operational experience in the defense markets as well as her management and financial expertise
allow her to provide valuable assistance to the Board in guiding the Company’s strategy at the highest levels.
Principal
Occupation and Business Experience
2021–Present:
Member of the Naval Shipbuilding Expert Advisory Panel providing advice to the Commonwealth of Australia on its National Naval Shipbuilding
Enterprise
2015–2018:
Deputy Assistant Secretary of the Navy within the Office of the Assistant Secretary of the Navy (ASN) for Research, Development and Acquisition
(executive oversight of all naval shipbuilding programs, major ship conversions, and maintenance, modernization and disposal of in-service
ships)
1986–2015:
Served in a number of other civilian positions within the Navy Department including as Executive Director for the Program Executive Office
for submarines (responsible for civilian management, design, acquisition and construction for submarine platform and undersea systems),
Director of the Investment and Development division within the Office of the ASN for Financial Management and Comptroller, and Director
for Naval and Commercial Construction in the Office of the ASN for Ship Programs; also served as Budget Director for U.S. Immigration
and Customs Enforcement within the Department of Homeland Security
Other
Experience and Education
M.S.
in management from Florida Institute of Technology; B.S. in Mechanical Engineering from the University of New Mexico; recipient of the
Department of the Navy’s Distinguished, Superior and Meritorious Civilian Service Awards; recipient in 2014 of the Pioneer award
from Great Minds in STEM; sponsor of the Virginia Class submarine USS Vermont (SSN 792) commissioned in 2020 |
BOARD
OF DIRECTORS
Responsibilities
The Company’s Board of Directors is ultimately responsible
for the conduct of the business of the Company in accordance with ethical and honorable business practices and applicable laws, to justify
the confidence that the shareholders have placed in the Company by their investment in its shares. Among the Board’s core responsibilities
are to:
|
● |
Oversee the conduct of the Company’s
business in order to evaluate whether the business is being properly managed |
|
● |
Review and, where appropriate, approve
the Company’s major strategic and financial plans and goals, and evaluate results compared to those plans and goals |
|
● |
Oversee the Company’s global risk
management framework |
|
● |
Review and approve significant indebtedness,
significant capital allocations including dividends and stock repurchase plans, and significant transactions not arising in the ordinary
course of business |
|
● |
Review management’s determinations
of principal considerations related to the auditing and accounting principles and practices used in the preparation of the Company’s
financial statements; review and approve the Company’s financial controls and reporting systems; and review and approve the Company’s
financial statements and financial reporting |
|
● |
Select individuals for election to the
Board and evaluate the performance of the Board and Board committees |
|
● |
Select, evaluate and compensate the CEO
and monitor the same decisions with respect to other executive officers; approve and evaluate compensation plans for senior management
in conjunction with the Compensation Committee |
|
● |
Oversee the conduct of the Company’s
Environmental, Social and Governance (ESG) program including annually reviewing the Governance Committee’s ESG program assessment |
| | |
11 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Composition and Recent Changes
The Board is currently comprised of eight directors
divided into three classes, with the terms of office of each class ending in successive years. In anticipation of former director Victor
L. Richey’s retirement as Chief Executive Officer and President on December 31, 2022, the Board increased the size of the Board
from eight to nine members effective January 1, 2023 and elected Bryan H. Sayler, the Company’s incoming Chief Executive Officer
and President, to fill the position thereby created. Upon Mr. Richey’s retirement as a director on June 30, 2023, the Board decreased
the size of the Board from nine to eight members, eliminated the position of Lead Director, and elected director Robert J. Phillippy as
Chair of the Board. There have been no other changes in the composition of the Board since the beginning of fiscal 2023.
In November, 2023, in anticipation of director James
M. Stolze’s retirement upon the expiration of his term at the 2024 Annual Meeting, the Board approved the further changes described
on page 7 above.
Independence
Mr. Sayler is the only Board member who is a member
of the Company’s management. The Board of Directors has affirmatively determined that none of the other seven, non-management directors
has any material relationship with the Company other than in his or her capacity as a director and shareholder, and that therefore all
of these directors are, and at all times during their service in fiscal 2023 were, independent as defined under the Company’s Corporate
Governance Guidelines and the listing standards of the NYSE.
Meetings
The Board of Directors held four meetings during fiscal
2023. All of the directors attended, either in person or by video conference call, at least 75% of the meetings of the Board and of each
of the committees on which they served which were held during their periods of service. The Company’s policy requires that all directors
attend the Annual Meeting of Shareholders, except for absences due to causes beyond the reasonable control of the director. All of the
directors attended the 2023 Annual Meeting held in Westlake Village, California.
DIVERSITY
AND TENURE
Diversity is one of the factors that the Governance
Committee considers in identifying the pool of director search candidates. The Board appreciates the benefits diversity brings and strives
to assemble a Board with not only a variety of business and professional backgrounds, but also diversity in areas such as race, ethnicity
and gender.
| | |
12 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
COMMITTEES
The members of the Board of Directors
are appointed to various committees. The standing committees of the Board are the Executive Committee, the Audit and Finance Committee
(Audit Committee), the Nominating and Corporate Governance Committee (Governance Committee), and the Human Resources and Compensation
Committee (Compensation Committee).
Each Committee operates under a written
charter adopted by the Board of Directors. The charters are posted on the Company’s website, www.escotechnologies.com,
under the Investor Center/Committees & Charters tab, and a copy of each Committee’s charter is available in print
to any shareholder who requests it.
Executive Committee
CURRENT MEMBERS
● Phillippy
● Sayler
1 meeting in fiscal 2023
|
|
● |
May
exercise the powers of the Board between Board meetings, subject to limitations specified in the committee charter |
|
● |
May
not: |
|
|
● |
Declare dividends |
|
|
● |
Amend the Bylaws |
|
|
● |
Approve, propose
or recommend for approval any action requiring approval by the shareholders |
|
|
● |
Elect directors
or fill vacancies on the Board |
|
|
● |
Change the membership
or composition of committees |
|
|
|
|
|
Audit Committee
The Audit Committee assists the Board in fulfilling its oversight responsibilities
for the integrity of the Company’s financial statements; the Company’s compliance with legal and regulatory requirements;
the qualifications, independence and performance of the Company’s independent public accounting firm (the Accounting Firm); and
the performance of the Company’s internal audit function.
CURRENT
MEMBERS
● Dewar
(Chair)
● Hess
● Khilnani
● Stolze
4
meetings in fiscal 2023
|
|
● |
Appoints,
retains and oversees the Accounting Firm and its performance of the annual audit |
|
● |
Annually evaluates
the qualifications, independence and performance of the Accounting Firm |
|
● |
Reviews the scope
of the Accounting Firm’s work and approves its annual audit fees and any non-audit service fees |
|
● |
Reviews the Company’s
internal controls with the Accounting Firm and the internal audit executive, and reviews with the Accounting Firm any problems it may
have encountered during the annual audit |
|
● |
Discusses the
Company’s Form 10-K and 10-Q reports with management and the Accounting Firm before filing; reviews and discusses earnings press
releases |
|
● |
Discusses major
financial risk exposures with management |
|
● |
Reviews management’s
assessment and oversight of information security, cybersecurity and IT risks, breaches (if any), and any preventive or remedial actions
taken on a quarterly basis |
|
● |
Reviews the annual
internal audit plan and associated resource allocation |
|
● |
Retains the outside
firm overseeing the Company’s internal audit function and evaluates its performance and the results of the annual internal audit
|
|
● |
Reviews the Company’s
reports to shareholders with management and the Accounting Firm and receives certain assurances from management |
|
● |
Issues the Committee
Report required to be included in this Proxy Statement pursuant to the regulations of the SEC (see Audit and Finance Committee Report
on page 52) |
|
|
|
|
| | |
13 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
The Board of Directors has determined that all members of the Committee are
financially literate and have accounting or related financial management expertise, as those terms are defined under the Company’s
Corporate Governance Guidelines and the applicable listing standards of the NYSE, and are “audit committee financial experts”
within the meaning of Item 407(d)(5)(ii) of SEC Regulation S-K.
Governance Committee
The Governance Committee assists the Board in fulfilling its Corporate Governance
responsibilities.
CURRENT
MEMBERS
● Olivier
(Chair)
● Hess
● Phillippy
● Valdez
4
meetings in fiscal 2023
|
|
● |
Identifies
individuals qualified to become Board members and recommends them for election to the Board at the Annual Meeting of shareholders or for
appointment to fill vacancies occurring between Annual Meetings (see Director Candidates and Nominations below) |
|
● |
Reviews the size
of the Board and recommends any appropriate changes to the Board |
|
● |
Reviews the composition
of Board committees and recommends any appropriate changes to the Board |
|
● |
Develops and recommends
to the Board effective corporate governance guidelines |
|
● |
Reviews the Company’s
corporate governance and compliance programs |
|
● |
Assists the Board
in its oversight of the Company’s ESG program and annually provides an assessment of the program for the Board |
|
● |
Oversees the Company’s
ethics programs |
|
● |
Reviews any conflicts
of interest involving Related Persons, and oversees and administers the Company’s policy on Related Person transactions |
|
● |
Leads the Board
in its annual review of the Board’s performance |
|
|
|
|
Director Candidates and Nominations.
To be considered for nomination to
the Board, candidates must be persons of the highest integrity, have extensive and varied business experience and have demonstrated their
ability to interact effectively with associates and peers. They preferably will also have experience and expertise in business areas related
to the Company and its technologies, industries and customers. In addition, the Committee will seek out candidates with the ability to
interact constructively with the existing Board membership, in order to enable the Board to act in the long-term interests of the Company’s
shareholders. While the Committee has not established specific minimum qualifications for candidates, it may establish specific membership
criteria as appropriate from time to time if the Board determines there is a need for specific skills and industry experience.
Although the Committee does not have
a formal policy on diversity, it seeks the most qualified candidates without regard to race, color, national origin, gender, religion,
disability or sexual orientation. However, the Committee appreciates the benefits that diversity, including gender diversity, brings to
a board of directors, and both the Committee and the full Board are committed to requiring the inclusion of women and underrepresented
minorities in the initial pool of director search candidates.
The Committee may identify new candidates
for nomination based on recommendations from Company management, employees, non-management directors, shareholders and other third parties.
It also has the authority to engage third party search firms to identify candidates, and it has done so from time to time. Consideration
of a new candidate typically involves the Committee’s review of information pertaining to such candidate and a series of internal
discussions, and may proceed to interviews with the candidate. New candidates are evaluated based on the above-described criteria in light
of the specific needs of the Board and the Company at the time. Incumbent directors whose terms are set to expire are evaluated based
on the above-described criteria, as well as a review of their overall past performance on the Board of Directors.
The Committee will consider director
candidates recommended by shareholders, and will evaluate such individuals in the same manner as other candidates proposed to the Committee.
All candidates must meet the legal, regulatory and exchange requirements applicable to members of the Board of Directors. Shareholders
who wish to recommend individuals for consideration as director candidates for the 2025 Annual Meeting of Shareholders should notify the
Committee no later than August 31, 2024 in order to allow time for their recommendations to be considered by the Committee. Submissions
are to be addressed to the Nominating and Corporate Governance Committee, c/o David M. Schatz, Corporate Secretary, ESCO Technologies
Inc., 9900A Clayton Road, St. Louis, MO 63124-1186, which submissions will then be forwarded to the Committee. The Committee is not obligated
to nominate any such individual for election.
| | |
14 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Compensation Committee
The Compensation Committee’s basic responsibility
is to assure that the Company’s directors, key executives and other senior officers are compensated in a manner consistent with
and in furtherance of Company strategy, competitive practices, and the requirements of the appropriate regulatory bodies.
CURRENT
MEMBERS
● Khilnani
(Chair)
● Dewar
● Phillippy
● Stolze
● Valdez
5 meetings
in fiscal 2023 |
|
● |
Reviews
and approves corporate goals and objectives relevant to the compensation of the Chief Executive Officer; evaluates the Chief Executive
Officer’s performance in light of these goals and objectives, and determines the Chief Executive Officer’s compensation based
upon the evaluation in conjunction with the full Board |
|
● |
Approves and evaluates
the compensation plans for senior management |
|
● |
Reviews, approves
and evaluates incentive compensation plans, equity-based plans and other compensation plans, to ensure that they provide compensation
and incentives consistent with the strategy of the Company and competitive practice |
|
● |
Reviews and approves
the compensation of the Company’s non-management directors in conjunction with the full Board |
|
● |
Reviews, approves
and evaluates material benefit programs, including material new programs and material changes to existing programs |
|
● |
Reviews the performance
and development of, and succession planning for, Company senior management |
|
● |
Oversees the Company’s
Charitable Contributions Program |
|
● |
Reviews and discusses
with management the Company’s annual Compensation Discussion and Analysis, and recommends its inclusion in the Company’s annual
proxy statement and the Company’s Form 10-K filed with the SEC (see Compensation Committee Report on page
22) |
Compensation Committee Interlocks and
Insider Participation.
During fiscal 2023, none of the members of the Compensation Committee
(i) was an officer or employee of the Company; (ii) was formerly an officer of the Company; or (iii) had any other relationship requiring
disclosure under any paragraph of Item 404 or under Item 407(e)(4) of SEC Regulation S-K. In addition, during fiscal 2023, none of the
Company’s executive officers served as a member of the board of directors or compensation committee of any entity that had one or
more executive officers serving as a member of the Company’s Board of Directors or the Compensation Committee.
CORPORATE
GOVERNANCE INFORMATION
The Board’s Role in Risk Oversight
The Company’s management is responsible
for managing the Company’s risks on a day-to-day basis, and has adopted an ongoing enterprise risk management process that it uses
to identify and assess Company risks. Management has identified risks in four general areas: Financial and Reporting; Legal and Compliance;
Operational; and Strategic. Periodically, management advises the Board and the appropriate Board committee of the risks identified; management’s
assessment of those risks at the business unit and corporate levels; its plans for the management of these identified risks or the mitigation
of their effects; and the results of the implementation of those plans.
While the Board as a whole has responsibility
for and is involved in the oversight of management’s risk management processes, plans and controls, some of the identified risks
are given further review by the Board committee most closely associated with the identified risks. For example, the Audit Committee provides
additional review of the risks in the areas of accounting and auditing, liquidity, credit, tax, information security and cybersecurity.
Similarly, the Compensation Committee provides additional review of risks in the area of compensation and benefits and human resource
planning. The Governance Committee devotes additional time to the review of risks associated with corporate governance, ethics, legal
and ESG issues.
| | |
15 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Governance Policies and Management Oversight
The Board of Directors has adopted Corporate Governance
Guidelines to guide its actions, as well as a Code of Business Conduct and Ethics applicable to all of the Company’s directors,
officers and employees. Additionally, the Board has adopted a Code of Ethics for Senior Financial Officers applicable to the Company’s
Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and persons performing similar duties. These documents
are posted on the Company’s web site, www.escotechnologies.com,
under the Investor Center/Governance Documents tab, and a copy of any of these documents is also available in print to any
shareholder who requests it.
Upon Mr. Richey’s retirement as a director on
June 30, 2023 the Board eliminated the position of Lead Director and elected independent director Robert J. Phillippy as Chair of the
Board.
Insider Trading
and Clawback Policies
In furtherance of the
Corporate Governance Guidelines and the Codes of Business Conduct and Ethics, and in coordination with applicable securities-related laws
and regulations, the Board of Directors has adopted robust policies regarding Insider Trading, including prohibitions against hedging
and (for certain senior Company officials) pledging transactions involving Company stock, and policies permitting the Company to “claw
back” all or part of the values of certain Company equity awards to executives or senior personnel in certain cases. Further information
about these policies is set forth under Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies and Clawback
Policy beginning on page 32.
Cybersecurity
Global information technology security threats and
targeted computer crime are increasing in frequency and sophistication. As these risks increase, the Company has enhanced its use of technologies
and internal controls to protect our systems, networks and data. The Company’s cybersecurity program includes employee training
and testing, information security policies and procedures, third-party monitoring of our networks and systems, and maintenance of backup
and other protective systems. Governmental authorities, including the United States government, have increasingly focused on cybersecurity
requirements for government contractors. The Company’s subsidiaries that serve in these capacities are increasingly focused on cybersecurity
as they seek to comply with the US Department of Defense Cybersecurity Maturity Model Certification (CMMC) program and related governmental
mandates.
The Audit Committee annually reviews the major financial
risk exposures including cyber security and policies or controls management has implemented to manage and mitigate risks, and quarterly
reviews management’s assessment and oversight of cyber security and information technologies risks and any required remediation
actions. The full Board annually reviews the Company’s cybersecurity initiatives.
Succession Planning
The Compensation Committee of the Board conducts an
annual review of the Company’s long-term succession plan for the CEO. Having this succession plan in place enabled the Board to
name Mr. Sayler as Mr. Richey’s successor promptly after Mr. Richey notified the Board of his decision to retire. Additionally,
the Board has in place an emergency succession plan for the CEO in order to minimize the uncertainty associated with an emergency succession
event.
Independence and
Related Person Determinations
All of the Company’s directors except Mr. Sayler
are and will be independent of Company management. Additionally, all of the members of the Audit Committee, the Compensation Committee
and the Governance Committee are independent as defined by the New York Stock Exchange and set forth in the Company’s Corporate
Governance Guidelines.
The Company has implemented a written policy not only
to ensure that all non-management directors meet the independence standards defined under the Company’s Corporate Governance Guidelines
and the listing standards of the NYSE but to ensure that all Company transactions in which a “Related Person” has or will
have a direct or indirect interest will be at arm’s length and on terms generally available to an unaffiliated third-party under
the same or similar circumstances. “Related Persons” include the Company’s directors, director nominees and executive
officers, holders of 5% or more of the Company’s stock, and the immediate family members of each. The policy contains procedures
requiring Related Persons to notify the
| | |
16 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Company of any such transaction and for the Governance
Committee to review the material facts of the proposed transaction and determine whether to approve or disapprove the transaction. The
Committee will consider whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party
under the same or similar circumstances. If advance Committee approval is not feasible or is not obtained, the policy requires submission
of the transaction to the Committee after the fact, and the Committee is empowered to approve, ratify, amend, rescind or terminate the
transaction. In such event, the Committee will also request the General Counsel to evaluate the Company’s controls and procedures
to ascertain whether any changes to the policy are recommended.
The Company has developed and implemented processes
and controls to obtain information about Related Person transactions for the purpose of determining, based on the facts and circumstances,
whether a Related Person has a direct or indirect material interest in the transaction. Pursuant to these processes and controls, all
directors and executive officers must annually complete, sign and submit a Directors’ and Officers’ Questionnaire and a Conflict
of Interest Questionnaire that are designed to identify Related Person transactions and both actual and potential conflicts of interest,
and are required to update their responses in the event of any changes. Additionally, the holders of 5% or more of the Company’s
shares (all of whom are institutional investors), are annually requested to respond to certain questions designed to identify direct or
indirect material interests by such 5% or more shareholder in any transactions with the Company.
Based on its review and processes, the Company has
determined that there has been no transaction since the beginning of the Company’s 2023 fiscal year, and there is no transaction
currently proposed, in which the Company was or is to be a participant and in which any Related Person had or will have a direct or indirect
material interest.
Communications
with Directors
Interested parties desiring to communicate concerns
regarding the Company to the Chair of the Board or to the non management Directors as a group may direct correspondence to: Mr. Robert
J. Phillippy, Chair, ESCO Technologies Board of Directors, ESCO Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186. Alternatively,
interested parties who wish to communicate with an individual director or any group of directors may write to such director(s) at ESCO
Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186, Attn: Secretary. All such letters will be forwarded promptly to the relevant
director(s).
DIRECTOR
COMPENSATION
The responsibilities and the substantial time commitment
of a director at a public company require that the Company provide reasonable compensation to incentivize the directors’ performance
and ensure their willingness to continue to serve. The Company strives to engage and retain well-qualified directors with significant
experience at companies of similar size and complexity. To ensure this is achieved, the Company regularly reviews the compensation provided
to its directors. The Company’s non-employee directors are compensated pursuant to the Sub-Plan for Compensation of Non-Employee
Directors under the 2018 Omnibus Incentive Plan (the Director Compensation Plan) based upon their respective levels of Board participation
and responsibilities. The Compensation Committee obtains competitive market and peer data and periodically retains a compensation consultant
to evaluate the competitiveness of its director compensation. The Committee approves the directors’ compensation, but any changes
are ratified by the full Board. As an employee of the Company, Mr. Sayler does not receive compensation for his service as a director.
The compensation for non-employee directors is based
on a calendar year and is paid or awarded, as the case may be, on and as of the first NYSE trading day after each Annual Meeting of Shareholders.
| | |
17 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Components of 2023 and 2024
Director Compensation
Cash
Compensation1 |
2023 |
2024 |
Annual
Retainer (all non-management directors) |
$50,000 |
$50,000 |
Lead
Director (through June 2023) |
$25,0001 |
N/A |
Chair
of the Board (beginning July 2023) |
$85,0002 |
$85,000 |
Committee
Chairs: |
|
|
Audit |
$12,5003 |
$12,500 |
Compensation |
$10,000 |
$10,000 |
Governance |
$8,000 |
$8,000 |
Equity
Compensation |
2023 |
2024 |
Restricted
Share Award (all non-management directors)2 |
$180,000 |
$180,000 |
|
1 |
Mr. Stolze received the full Lead Director
annual retainer for 2023 in February 2023. |
|
2 |
Mr. Phillippy received a prorated Board
Chair retainer for the last six months of 2023 in the amount of $42,500. |
|
3 |
Mr. Phillippy received the full Audit
Committee Chair annual retainer for 2023 in February 2023; Mr. Dewar received a prorated Audit Committee Chair retainer for the last six
months of 2023 in the amount of $6,250. |
The annual equity award consists of a number of restricted
share units (RSUs) equal to $180,000 divided by the NYSE closing price of the common stock on the award date, rounded to the nearest whole
share and vesting one year after the award date. The equity award for calendar 2023 was made on February 6, 2023 and will vest on February
6, 2024. Based on the February 6, 2023 NYSE closing stock price of $99.74 it amounted to 1,805 RSUs per director.
During the vesting period, each director’s RSU
account accrues an additional number of unvested RSUs equivalent to the quarterly dividends that would have been paid on a like number
of shares of common stock, divided by the NYSE closing price on the dividend date; and on the vesting date the accrued RSUs vest and are
converted into a whole number of shares of common stock plus cash equal to the value of any fractional shares, based on the NYSE closing
price on the vesting date.
2024 Compensation.
The Compensation Committee reviewed the non-management
directors’ annual compensation program in August 2023, and based on its recommendations the Board determined to make no changes
in the program for calendar 2024.
Election to Defer Compensation.
Directors may elect in advance to defer receipt of
all of their cash compensation and/or all of their stock compensation. If deferral is elected, the deferred amounts are credited to the
director’s deferred compensation account in common stock equivalents. If cash compensation is deferred, the number of common stock
equivalents credited is equal to the amount deferred divided by the NYSE closing price of the common stock as of the date on which the
deferral occurs (or if that is not a trading day, then the last preceding trading day). If stock compensation is deferred, the number
of common stock equivalents credited is equal to the number of shares whose receipt is deferred. Common stock equivalents in the director’s
deferred compensation account have no voting rights, but earn dividend equivalents on each dividend payment date equal to the dividends
payable on a like number of shares of common stock; and the dividend equivalents earned are credited to the director’s deferred
compensation account as additional common stock equivalents valued at the NYSE closing price on the dividend date. A director’s
deferred compensation account becomes distributable when the director leaves the Board, or at such other date as may be specified by the
director consistent with the terms of the Director Compensation Plan; distribution will be accelerated in certain circumstances, including
a change in control of the Company. The account is distributable at the election of the director either in cash or in shares; however,
any stock portion which has been deferred may only be distributed in shares. During fiscal 2023, Mr. Dewar, Ms. Hess and Mr. Olivier deferred
receipt of their cash compensation and stock compensation, as described in the footnotes to the Fiscal 2023 Compensation table below.
In addition, Mr. Phillippy’s, Mr. Stolze’s and Ms. Valdez’s stock compensation from certain prior years continued to
be deferred pursuant to prior deferral elections which they had terminated as to future compensation.
| | |
18 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Director Stock
Ownership Guidelines.
Directors are subject to stock ownership guidelines. Under these guidelines,
within five years after their appointment to the Board each non-management director is expected to acquire and hold shares or common stock
equivalents having a total cash value equal to at least five times the annual cash retainer. All directors currently exceed the ownership
guidelines.
Extended Compensation Plan for Certain Directors.
Under the Company’s Directors’ Extended Compensation
Plan, a plan for non-management directors who began Board service prior to April 2001, Mr. Stolze is eligible to receive for life an annual
benefit of $20,000 beginning after his service as a director ceases. In the event of his subsequent death, 50% of the benefit will be
paid to his surviving spouse for life; if Mr. Stolze dies before retirement, 50% of the benefit, determined as if the director had retired
on the date of death, will be paid to his surviving spouse in a lump sum. The plan permits Mr. Stolze to elect to receive the actuarial
equivalent of the benefit in a single lump sum after retirement; and in compliance with section 409(a) of the Internal Revenue Code, Mr.
Stolze has made this election.
Fiscal 2023 Compensation.
The following table sets forth the compensation of the Company’s
non-management directors for fiscal 2023. As executive officers, Mr. Richey and Mr. Sayler did not receive any additional compensation
for their services as directors; their compensation is described under Proposal 2: Advisory Vote on Executive Compensation
beginning on page 21.
|
|
|
|
|
Change
in |
|
|
|
|
|
|
|
Pension |
|
|
|
|
|
|
|
Value
and |
|
|
|
|
|
|
|
Nonqualified |
|
|
|
Fees
Earned |
|
|
Non-Equity |
Deferred |
|
|
|
or
Paid |
Stock |
Option |
Incentive
Plan |
Compensation |
All
Other |
|
Name |
in
Cash |
Awards1 |
Awards |
Compensation |
Earnings2,3 |
Compensation |
Total |
Patrick
M. Dewar |
$ 56,3114 |
$ 180,483 |
— |
— |
$ 5,026 |
— |
$ 241,820 |
Janice
L. Hess |
50,0805 |
180,812 |
— |
— |
427 |
— |
231,319 |
Vinod
M. Khilnani |
60,0616 |
180,483 |
— |
— |
0 |
— |
240,544 |
Leon
J. Olivier |
58,0617 |
180,483 |
— |
— |
10,214 |
— |
248,758 |
Robert
J. Phillippy |
105,0618 |
180,483 |
— |
— |
6,051 |
— |
291,595 |
James
M. Stolze |
75,0619 |
180,483 |
— |
— |
6,094 |
— |
261,638 |
Gloria
L. Valdez |
50,06110 |
180,483 |
— |
— |
2,364 |
— |
232,908 |
|
1 |
Dollar amounts represent (i) the aggregate
fair values of the 1,805 RSUs awarded to the respective directors on February 6, 2023, based on the NYSE closing price of the underlying
common stock of $99.74 on that date; plus (ii) the values of the dividend equivalents accrued on the respective directors’ unvested
RSUs held during 2023 as of the respective dividend dates. See Components of 2023 and 2024 Director Compensation above. |
|
2 |
Dollar amounts represent the values
of the dividend equivalents accrued as of the respective dividend dates during 2023 on the elective deferred stock compensation accounts
of Mr. Dewar, Ms. Hess, Mr. Olivier, Mr. Phillippy, Mr. Stolze and Ms. Valdez. See Components of 2023 and 2024 Director Compensation
above. |
|
3 |
Includes, for Mr. Stolze, the changes
in actuarial present value of his accumulated benefits under the Directors’ Extended Compensation Plan, described above, during
fiscal 2023. See Extended Compensation Plan for Certain Directors above. For fiscal 2023, overall pension values decreased
for Mr. Stolze in the amount of ($17,372), partly due to the effect of changes in actuarial assumptions from the preceding year. The change
in pension value for Mr. Stolze due to assumption changes was ($9,550). Pursuant to SEC regulations, the amounts in the table do not include
these decreases. Because Mr. Stolze has elected to receive his benefit in the form of a lump sum, the present value has been calculated
based on the August 2023 417(e) lump sum segment rates and the 2023 417(e) IRS prescribed mortality table. |
|
4 |
Represents cash retainer of $50,000,
prorated Audit Committee Chair fee of $6,250 and $61 in exchange for vested fractional RSUs; however, Mr. Dewar elected to defer receipt
of his cash compensation and to receive in lieu of cash a total of approximately 566 RSUs having the same aggregate value on their respective
issue dates. |
| | |
19 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
|
5 |
Represents cash retainer of $50,000 and $80 in exchange
for vested fractional RSUs; however, Ms. Hess elected to defer receipt of her cash compensation and to receive in lieu of cash a total
of approximately 502 RSUs having the same aggregate value on their respective issue dates. |
|
6 |
Represents cash retainer of $50,000,
committee chair fee of $10,000, and $61 in exchange for vested fractional RSUs. |
|
7 |
Represents cash retainer of $50,000,
committee chair fee of $8,000, and $61 in exchange for vested fractional RSUs; however, Mr. Olivier elected to defer receipt of his cash
compensation and to receive in lieu of cash a total of approximately 582 RSUs having the same aggregate value on their respective issue
dates. |
|
8 |
Represents cash retainer of $50,000,
committee chair fee of $12,500, prorated Board Chair fee of $42,500 and $61 in exchange for vested fractional RSUs. |
|
9 |
Represents cash retainer of $50,000,
lead director cash retainer of $25,000 and $61 in exchange for vested fractional RSUs. |
|
10 |
Represents cash retainer of $50,000
and $61 in exchange for vested fractional RSUs. |
| | |
20 | Proposal 1 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Proposal 2: Advisory Vote to Approve Executive
Compensation
The Board of Directors recommends a vote FOR this Proposal.
Pursuant to Section 14(a) of the Securities
Exchange Act of 1934, the Board of Directors is again soliciting an advisory (non-binding) shareholder vote, commonly referred to as “Say-on-Pay”,
to approve the compensation of the executive officers whose compensation is disclosed in this Proxy Statement (the named executive officers
or NEOs). At our 2023 Annual Meeting, over 99% of the shares represented and entitled to vote on the Say on Pay proposal, and over 92%
of all outstanding shares, were voted in support of the Say-on-Pay proposal. Also, based on the preference of over 93% of the votes cast
on the frequency of the Say-on-Pay proposals, we plan to continue to hold a Say-on-Pay vote every year.
The Board of Directors strongly endorses
our executive compensation program and recommends that the shareholders vote in favor of the following Resolution:
“RESOLVED, that the Company’s shareholders approve,
on an advisory basis, the compensation of the named executive officers as disclosed in the Company’s Proxy Statement for the 2024
Annual Meeting of Shareholders pursuant to the executive compensation disclosure rules of the Securities and Exchange Commission, including
the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and narrative disclosure.”
Shareholders are encouraged to review
the Compensation Discussion and Analysis section below as well as the Summary Compensation Table and the other related tables
and narrative disclosure referred to in the proposed Resolution, which provide details about our executive compensation program as well
as specific information about the compensation of our named executive officers.
This vote is not intended to address
any specific item of compensation, but rather the overall compensation of the named executive officers as described in this Proxy Statement.
Although the vote is non-binding, the Board of Directors and the Compensation Committee value the opinions of the shareholders, and to
the extent there is a significant vote against the above resolution the Company will consider the shareholders’ concerns and the
Committee will evaluate what actions (if any) may be necessary to address those concerns.
SUMMARY
OF EXECUTIVE COMPENSATION PROGRAM
Our executive compensation program
is designed to attract, motivate, and retain executive officers who are critical to our success. The Committee believes that the program
constitutes a balanced, competitive approach to compensation that supports our compensation objectives through performance-based compensation
that aligns the interests of executives with those of our shareholders.
The Compensation Committee reviews
our compensation program at least annually to ensure that it achieves the desired goals of aligning our executive compensation structure
with shareholders’ interests and current market practices.
What
We Do: |
|
What
We Don’t Do: |
|
|
|
|
|
|
Pay for performance philosophy |
|
|
No excessive perquisites |
|
|
|
|
|
|
Significant portion of compensation is at-risk |
|
|
No tax gross-ups on perquisites |
|
|
|
|
|
|
Competitive stock ownership guidelines |
|
|
No tax gross-ups on change in control severance |
|
|
|
|
|
|
Robust clawback policy |
|
|
No hedging or pledging of Company stock |
|
|
|
|
|
|
Double-trigger change-in-control equity vesting |
|
|
No repricing or exchange of equity-based awards without
shareholder approval |
|
|
|
|
Independent compensation consultant |
|
| | |
21 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
COMPENSATION
COMMITTEE REPORT
The Human Resources and Compensation Committee is responsible for determining
the compensation of the Chief Executive Officer and President as well as other senior officers and key executives of the Company. The
Committee has reviewed and discussed with management the Company’s disclosures under the section captioned Compensation Discussion
and Analysis beginning immediately following this Compensation Committee Report.
Based on such review and discussion, the Committee recommended to the Board
of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s
Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the Securities and Exchange Commission.
The Human Resources and Compensation Committee
|
● |
Vinod M. Khilnani, Chair |
COMPENSATION
DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis discusses the compensation
of the following NEOs.
|
● |
Bryan H. Sayler, Chief Executive Officer
& President |
|
● |
Christopher L. Tucker, Senior Vice
President & Chief Financial Officer |
|
● |
David M. Schatz, Senior Vice President,
General Counsel & Secretary |
2023 Performance Highlights
Net
Sales |
|
Diluted
Earnings Per Share |
|
Entered
Orders |
$956M |
|
$3.58 |
|
$1,033M |
Record
Sales +11% over prior year |
|
+13%
over prior year |
|
Record
Orders & Ending Backlog Orders +8% / Backlog +11% over
prior year |
|
|
Entered orders exceeded $1 billion
for the first time |
|
|
Record sales increased 11% over the
prior year |
|
|
Leveraged revenue growth to drive
higher profit margins |
|
|
Returned $21 million to shareholders
through dividends and the repurchase of outstanding shares of common stock |
2023 Performance Related to
Executive Compensation
The Compensation Committee established two performance metrics,
“Adjusted EPS” and “Cash Flow from Operating Activities,” to determine incentive plan compensation earned during
fiscal 2023 and thereby incent the participants and align cash incentive compensation with business objectives. Adjusted EPS is a non-GAAP
measure, and the factors used in the calculation of the 2023 adjustment differed slightly from those used to calculate the 2022 adjustment;
for a detailed description and a reconciliation to the nearest GAAP measure, see 2023 Cash Incentive Metrics, below.
| | |
22 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Pay for Performance
Our compensation programs are designed to maximize shareholder
value by allocating a significant portion of executive compensation to at-risk pay. Our annual cash incentive program and equity-based
PSUs utilize a variety of key strategic and financial performance metrics and are designed to reward positive financial performance and
limit unnecessary risk taking. Stock ownership guidelines align the interests of executives and shareholders by ensuring that executives
bear the economic risk of share ownership.
Compensation Objective
The Compensation Committee’s objective is to develop and
maintain industry-competitive compensation packages to attract, retain, motivate and reward our executive officers and other senior officers
and key executives. Compensation programs are designed to be consistent with those of other companies engaged in similar industries and/or
of similar size with which we are likely to compete for talent to enable us to employ and retain a high-quality management team. The Committee
seeks to use performance-based compensation to maximize the alignment of executive compensation with the long-term interests of our shareholders.
The Committee sets compensation levels based on the skills, experience
and performance of each executive officer, taking into account the benchmarking described below and compensation recommendations made
by the CEO (except with respect to his own position). The Committee’s pay for performance philosophy is reflected in the annual
compensation review. The Committee also considers tally sheets which provide, for each executive officer, a recap of each principal element
of compensation as well as benefits, perquisites, equity awards, and stock ownership and potential ownership. The tally sheets also reflect
the incremental compensation which would be payable as a result of various termination scenarios and each element of pay or benefits impacted.
The Committee retains the discretion to adjust all elements of compensation as it deems appropriate, subject to the requirements of shareholder-approved
plans.
Executive Compensation Program
Highlights
Pay
for performance philosophy |
A
significant portion of NEO pay is at-risk in order to align pay with business strategy and shareholder interests |
At-risk
annual cash incentive |
Based
on achievement of specified Company performance metrics |
Long-term
equity incentive compensation (LTI) |
Incorporates
long-term Company performance metrics, and retention factors such as delayed vesting |
Limited
perquisites |
Perquisites
are appropriate to the position and not excessive |
No
tax gross-ups |
No
tax gross-up on any perquisites or severance benefits |
Competitive
stock ownership policy |
NEO
stock ownership requirement is based on a multiple of base salary |
Clawback
policy |
Cash
incentive and equity awards may be reclaimed by the Company in case of malfeasance or accounting restatements due to noncompliance with
financial reporting requirements |
No
hedging or pledging |
NEOs
must retain the risks of Company stock ownership |
Double
trigger vesting |
NEO
change in control agreements and stock awards contain double trigger vesting provisions |
Independent
compensation consultant |
The
Compensation Committee retains its own independent compensation consultant |
Strong
say-on-pay support |
Over
99% of the shares voting at the 2023 Annual Meeting supported the Company’s executive compensation program |
| | |
23 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
The following table summarizes the 2023 target direct
compensation pay mix for the CEO and other NEOs, with approximately 75% of the CEO’s target direct compensation at risk and 63%
of the average of the other NEOs’ target direct compensation at risk. Target direct compensation is defined as the sum of the executive
officer’s base salary, annual cash incentive award, and annual long term equity incentive awards, in each case calculated at the
target level specified by the Compensation Committee. Because of the Company’s change in CEOs during 2023, the chart for the CEO
is based on the compensation of the new CEO, Mr. Sayler.
Compensation Consultant and
Benchmarking
The Compensation Committee is authorized by its charter
to employ independent compensation and other consultants. The Committee has typically engaged a nationally recognized compensation consulting
firm (Compensation Consultant) every other year to assist the Committee in evaluating executive compensation. The Compensation Consultant
provides information, research and analysis pertaining to executive compensation as requested by the Committee, including updates on market
trends, survey data and analysis for market review. The Committee also from time to time engages our primary outside counsel, Bryan Cave
Leighton Paisner LLP (BCLP) to advise it on selected executive compensation issues.
The Committee conducts a peer and market review every
two years; the most recent review was in 2022, as described below.
2022 Compensation Report (Fiscal 2023 Compensation
Review)
In the summer of 2022, the Committee engaged Pay Governance
LLC as the Compensation Consultant to provide a compensation report (the 2022 Compensation Report) for the Committee’s fiscal 2023
compensation review. One of the elements of the 2022 Compensation Report was the 2022 Mercer Benchmark Database/Total Remuneration Survey
– Executive (the Mercer Survey), a broad-based survey of management compensation, as the primary source for benchmarking its executive
compensation levels. A broad market survey provides decision-quality data that is generally reliable and consistent year-over-year. The
Company was a participant in the Mercer Survey. A list of all of the participating companies included in the Mercer Survey is attached
as Appendix A to this Proxy Statement.
For its 2022 Compensation Report, the Compensation
Consultant also provided proxy data from the peer group described below (2022 Peer Group) to be used in conjunction with the Mercer Survey
in order to add context to the decision-making process and provide a supplemental perspective on the market. Peer group proxy data provides
transparent line-by-line information for each company in the peer group, and provides the ability to review industry trends and compensation
design practices as well as pay-for-performance alignment. The 2022 Peer Group was based on the SIC codes assigned to the Company’s
subsidiaries and represented companies in the following industries in which the Company participates:
| | |
24 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
|
● |
General industrial machinery |
|
● |
Radio and television communications
equipment |
|
● |
Instruments to measure electricity |
|
● |
Services not elsewhere classified |
Companies in the above industries were then filtered
for revenue size in order to determine the 2022 Peer Group. The following is a list of the companies in the 2022 Peer Group, with their
ticker symbols:
Ameresco,
Inc. (AMRC)* |
Kaman
Corporation (KAMN) |
Badger
Meter, Inc. (BMI) |
MACOM
Technology Solutions Holdings Inc. (MTSI) |
Barnes
Group Inc. (B)* |
Mueller
Water Products, Inc. (MWA) |
Chart
Industries, Inc. (GTLS) |
National
Instruments Corporation (NATI)* |
CIRCOR
International, Inc. (CIR) |
Powell
Industries, Inc. (POWL)* |
Comtech
Telecommunications Corp. (CMTL) |
SPX
Technologies Inc. |
CTS
Corporation (CTS) |
Standex
International Corporation (SXI) |
FARO
Technologies, Inc. (FARO)* |
Tri
Mas Corporation (TRS)* |
Franklin
Electric Co., Inc. (FELE) |
Viavi
Solutions Inc. (VIAV)* |
Helios
Technologies (HLIO) |
|
* These companies did not report compensation data for the General
Counsel position in their proxy materials.
Fiscal 2023 Benchmarking.
For its compensation review for fiscal 2023, the Committee
reviewed each principal element of compensation (base salary, cash incentive and LTI), as well as total cash compensation (base salary
and cash incentive), and total direct compensation (target cash compensation and LTI) for each of the Company’s executive officer
positions, and compared them against the benchmark range from the Compensation Report. For all three of the NEOs, the benchmark range
for each element of compensation in the Compensation Report is the median plus or minus 15%. For fiscal 2023, the Committee utilized the
benchmark ranges from the Compensation Report in determining the competitiveness of the executives’ compensation. The Committee
also compared relative Company performance against the performance of the companies in the 2022 Peer Group to test the overall reasonableness
of pay for performance.
The Committee used the Compensation Report described
above as a guideline and frame of reference in determining appropriate compensation levels and incentives for the executive officers;
however, the Committee does not make its decisions according to a formula, and the Committee exercises considerable judgment and discretion
in making them. The complexity and composition of the Company does not lend itself to comparisons with a readily ascertainable peer group,
and while matching by SIC codes can provide some measure of comparability, there are wide variations in the type and complexity of these
companies. The Committee therefore considers the benchmark ranges to be only a guide, and makes individual determinations of compensation
for each of the executive officers based on numerous factors including the comparative responsibilities of the executive officers and
the Committee’s assessments of individual and Company performance.
Compensation Consultant Independence.
In August 2023, the Committee assessed the independence
of Pay Governance and BCLP in line with the SEC’s compensation consultant independence factors, and determined there were no conflicts
of interest. The Committee will continue to review their independence status annually and will keep the compliance letters on file.
| | |
25 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Principal Elements of Compensation
Program
The principal elements of the 2023 compensation program
for executive officers (base salary, annual cash incentive and long-term equity incentive) are reflected in the Summary Compensation Table
on page 34. Each of these elements is described
in detail in the corresponding sections below.
Pay
Element |
Form |
2023
Metrics |
Objectives |
Base
Salary |
Cash |
Benchmarked
to market median, subject to adjustment for individual factors such as experience and performance |
Attract
and retain qualified executives |
Annual
Incentive Plan (PCP) |
Cash |
100%
based on financial results: |
Drive
profitability, growth and progress |
|
|
●
70% based on Adjusted EPS |
against
strategy |
|
|
●
30% based on Cash Flow from |
|
|
|
Operating
Activities |
|
Long-Term
Equity Incentive (LTI) |
Performance
Share Units (PSUs) |
Awards
vest after 3-year |
Align
NEOs’ efforts with creation of |
|
|
performance
period |
long-term
shareholder value |
|
|
●
60% based on EBITDA growth |
|
|
|
●
40% based on Return on |
|
|
|
Invested
Capital |
|
|
|
●
Potential for modification based |
|
|
|
on
rTSR |
|
|
Restricted
Share Units (RSUs) |
2023
awards vest after 3½ years |
Retention,
ownership and full alignment with the shareholder experience |
Benefits |
Consistent
with other similarly situated personnel |
|
We do not believe that any risks
arising from our compensation policies and practices are reasonably likely to have a material adverse effect on the Company. Any such
risk is mitigated by the multiple elements of the compensation programs, including base salary, annual cash incentive programs, and LTI
awards which are earned over multiple years. This structure encourages decision-making that is in the best long-term interests of the
Company and our shareholders.
Total Direct Compensation.
The executive officers receive total direct compensation
consisting of cash compensation (base salary plus annual cash incentive compensation) and long-term equity incentive compensation. Each
of these elements is described in detail in the corresponding sections below.
The Committee sets target levels
for total direct compensation based on the skills, experience, breadth of their role, and performance of each executive officer, taking
into account the benchmarking described above and compensation recommendations made by the CEO (except with respect to his own position).
The Committee also considers the Company’s performance. For fiscal 2023, the Committee increased the executive officers’ total
direct compensation as described in detail below. Total direct compensation for fiscal 2023 was within the benchmark ranges for Mr. Tucker
and Mr. Schatz. Mr. Sayler’s total direct compensation was below the benchmark range, which is typical for a recently promoted CEO.
Base Salaries.
Base salaries are designed to attract, retain, motivate
and reward competent, qualified, experienced executives, although we emphasize performance-based compensation for the executive officers.
Fiscal 2023 base salaries for the executive officers
other than Mr. Sayler were set by the Committee in the first quarter of fiscal 2023; Mr. Sayler’s base salary was set prior to the
commencement of his employment in January 2023. Annual base salaries for the executive officers for fiscal 2023 and fiscal 2022 were as
follows:
| | |
26 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Base Salaries1
Officer |
FY
2023 Base Salary |
FY
2022 Base Salary |
Percent
Increase from FY 2022 |
Bryan
H. Sayler |
$ |
715,0002 |
$ |
N/A |
N/A |
Victor
L. Richey |
898,1003 |
898,100 |
0.0% |
Christopher
L. Tucker |
570,000 |
522,000 |
9.2% |
David
M. Schatz |
394,000 |
357,000 |
10.4% |
|
1 |
Amounts shown are annualized, and
are as of the beginning of fiscal 2023; the actual amounts paid are set forth in the Summary Compensation Table. |
|
2 |
Effective January 1, 2023, upon
becoming CEO. |
|
3 |
Reduced to $650,000 effective January
1, 2023. |
Base Salary Changes for Fiscal 2024.
For fiscal 2024 the Committee determined that increases in base
salary of 5.6%, 5% and 3% were warranted for Mr. Sayler, Mr. Tucker and Mr. Schatz, resulting in base salaries of $755,000, $598,500 and
$405,800, respectively.
Annual Cash Incentive
The Committee uses annual performance-based cash incentives to compensate
the executive officers. The Committee establishes at-risk performance targets for the executive officers using financial and operational
goals linking compensation to overall Company performance. The annual cash incentive targets for fiscal 2023 and fiscal 2022 were as follows:
Target Cash Incentive Compensation1
Officer |
FY
2023 Target Cash Incentive |
FY
2022 Target Cash Incentive |
Percent
Increase from FY 2022 |
Bryan
H. Sayler |
$ |
715,0002 |
$ |
N/A |
N/A |
Victor
L. Richey |
959,5003 |
$ |
959,500 |
0.0% |
Christopher
L. Tucker |
373,000 |
348,000 |
7.2% |
David
M. Schatz |
176,000 |
153,000 |
15.0% |
|
1 |
Amounts shown are annual targets and
are as of the beginning of fiscal 2023; the actual amounts paid are set forth in the Summary Compensation Table. |
|
2 |
Scored based on the performance of
the Utility Solutions Group for the first quarter of fiscal 2023 and on total company performance for the remaining three quarters of
fiscal 2023. |
|
3 |
Prorated for the first quarter of fiscal
2023, then reduced to $487,500 prorated from the beginning of the second quarter of fiscal 2023 until his retirement at the end of the
third quarter of fiscal 2023. |
The fiscal 2023 cash incentive targets for the executive
officers were established pursuant to our Performance Compensation Plan (PCP) authorized under the 2018 Omnibus Incentive Plan. This at
risk plan closely links the executive officers’ pay to our financial results and provides compensation variability in the form of
reduced payments when performance is below targets and higher compensation when performance exceeds targets. The PCP has a fixed target
with a payout range based on performance. The Committee has discretion to either increase or decrease the actual cash incentive payouts.
Annual Cash Incentive Changes for Fiscal 2024.
For fiscal 2024, the Committee determined that the
cash incentive targets will be set as a percent of base salary in line with market practices. The 2024 cash incentive targets for Mr.
Sayler, Mr. Tucker and Mr. Schatz are $755,000 (100% of 2024 base salary), $389,000 (65% of 2024 base salary), and $202,900 (50% of 2024
base salary), respectively. The metrics to be used for determining the amounts of the 2024 cash incentive payouts are described under
Fiscal 2024 Changes to Cash Incentive Metrics, below.
| | |
27 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Total Target Cash Compensation
The target percentages of total cash compensation represented
by base salary and by the PCP target varied for fiscal 2023 based on the position, as follows:
Target Total Cash Compensation
– Fiscal 20231
|
Base
Salary |
Cash
Incentive Target (PCP) |
|
|
|
|
|
Percent
of Target |
|
Officer |
|
Percent
of Target Total Cash Compensation |
|
Total
Cash Compensation |
Target
Total Cash Compensation |
Bryan
H. Sayler |
$ |
715,0002 |
50% |
$ |
715,0002 |
50% |
$ |
1,430,0002 |
Victor
L. Richey |
898,1002 |
48% |
959,5002 |
52% |
1,857,6002 |
Christopher
L. Tucker |
570,000 |
60% |
373,000 |
40% |
$943,000 |
David
M. Schatz |
394,000 |
69% |
176,000 |
31% |
$570,000 |
|
1 |
Amounts shown are as of the beginning
of fiscal 2023; the actual amounts paid are set forth in the Summary Compensation Table. |
|
2 |
Amounts shown are as of the beginning
of fiscal 2023; for adjustments during the year see “Base Salaries” above. |
The higher at-risk target percentage for the CEO as
compared to the other executive officers is based on our at risk philosophy and the greater responsibilities of the CEO. Similarly, the
CFO has a higher at-risk percentage as compared to the General Counsel. Near the beginning of each fiscal year, after reviewing our business
plans for the fiscal year, the Committee determines the key short-term business metrics on which senior management should focus in order
to drive results and approves the cash incentive target for each executive officer. Because of the broad responsibilities of the executive
officers, their criteria are tied to Company-wide metrics. The Committee then determines the percentage of the cash incentive target which
should be tied to each of the metrics and the performance target for each metric, and approves the threshold and maximum multipliers which
will be applied to each of the performance targets to determine the payment under the plan. If performance is below the threshold for
a metric, there is no payout for that metric.
2023 Cash Incentive Metrics.
During the first quarter of fiscal 2023 the Committee
approved two metrics for achievement of the fiscal 2023 PCP incentive targets, based on the annual operating plan reviewed by the Board
of Directors. The first metric in 2023 was “Adjusted EPS,” weighted at 70% of the total PCP target opportunity; Adjusted EPS
is a non-GAAP financial measure. Fiscal 2023 Adjusted EPS of $3.70 equaled GAAP diluted EPS of $3.58 excluding $0.12 per share of after-tax
charges consisting of executive management transition costs, acquisition inventory step-up charges, restructuring charges, and acquisition
related costs.
The second metric in fiscal 2023
was “Cash Flow from Operating Activities,” weighted at 30% of the total PCP target opportunity; Cash Flow from Operating Activities
is a GAAP financial measure. Fiscal 2023 Cash Flow from Operating Activities was $76.9 million.
The Committee approved the following targets for the
two fiscal 2023 cash incentive metrics. It believes that the selected metrics and the performance benchmarks for each metric, and the
threshold and maximum multipliers, provided meaningful incentives for 2023 performance.
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28 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
2023 PCP Targets and Results
|
|
2022
Benchmarks |
|
|
|
Weight
(% of |
|
|
|
Actual
Value |
Actual
% of Payout |
Metric |
Target
Incentive) |
Threshold |
Target |
Maximum |
Achieved |
Earned
(unweighted) |
Adjusted
EPS |
70% |
$2.98 |
$3.50 |
$3.85 |
$3.70 |
157.1% |
Cash
Flow from Operating Activities (millions) |
30% |
$100.6 |
$118.3 |
$136.0 |
$76.9 |
0%1 |
%
of Target Earned |
|
30%1 |
100% |
200% |
|
|
Weighted
% of Total Target Earned |
|
|
|
|
110% |
|
1 |
If performance is below the threshold
for a metric, there is no payout for that metric. |
The Summary Compensation Table on page
34 reflects the actual payouts to the executive officers under the PCP for fiscal 2023.
Fiscal 2024 Changes to Cash Incentive Metrics.
In line with its practice in recent years, the Committee determined
to allocate 100% of the executive officers’ cash incentive compensation opportunity to the PCP, and approved the following performance
criteria for fiscal 2024:
|
● |
“Adjusted EPS,” weighted
at 70% of the total target opportunity and consisting of earnings per share excluding certain defined non-recurring gains and charges
expected to be realized or incurred in fiscal 2024 (this is a non-GAAP measure); and |
|
● |
“Cash Flow from Operating Activities,”
weighted at 30% of the total target opportunity (this is a GAAP measure). |
As in 2023, the potential cash incentive compensation for fiscal
2024 will range from 0 to 2.0 times the target opportunity for both Adjusted EPS and Cash Flow from Operating Activities, depending on
actual 2024 performance.
Long-Term Equity Incentive Compensation.
The Company’s annual LTI award program consists of a combination
of performance-based share unit (PSU) awards (since fiscal 2022) and time-vested restricted share unit (RSU) awards (since fiscal 2021),
with each type weighted at 50% of the LTI opportunity. For fiscal 2023, PSU grants were made in the first quarter of the fiscal year to
align with the Company’s fiscal year goal-setting process, and RSU grants were made in the third quarter of the fiscal year in line
with historic LTI grant timing.
We do not coordinate LTI grants with the release of material non-public
information. Company-wide equity grants, including equity grants to our executive officers, are made at regular meetings of the Compensation
Committee. We also do not grant stock options or other awards which require a payment by the recipient in order to realize the value of
the award.
Restricted Share Units (RSUs).
RSUs are time-vested awards. The terms of the awards are similar
to those in recent prior RSU awards, but with the following material changes approved by the Compensation Committee for the 2023 RSU awards:
|
● |
The awards will vest in three equal portions
approximately 18, 30 and 42 months after the month in which they are granted; for the 2023 awards, vesting will occur on the last NYSE
trading days in November 2024, 2025 and 2026, at which time they will be converted into a like number of shares of Company common stock,
and such shares will be paid out to the participant (after statutory tax withholdings) on the following business day. |
|
● |
On each regular quarterly dividend date
occurring from the award date to and including the vesting date, the Company will accrue for the benefit of the recipient an amount equal
to the cash dividend which would have been paid on a number of shares of Company common stock equal to the number of unconverted RSUs.
The amount accrued with respect to each vested portion of the award will be paid out in cash at the time that portion of the award is
distributed; but, if or to the extent the award does not vest or for any reason is not distributed, a like portion of the accrued amount
will be canceled and not paid. |
| | |
29 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Performance Share Units (PSUs).
PSUs awarded in fiscal 2023 will vest after a three-year performance
period ending with fiscal 2025. If earned, they will be converted into a number of shares of Company common stock based on achievement
of the performance goals. The award distribution in shares may be less than or greater than the number of PSUs awarded depending on the
degree to which the Company has achieved specified performance goals. Straight-line interpolation will be used to score between threshold,
target and maximum performance levels. For the fiscal 2023 PSU awards, the Committee approved further aligning the performance measures
with shareholders, by continuing the use of EBITDA as a performance measure, with a 60% weighting, adding Return on Invested Capital (ROIC)
as a performance measure, with a 40% weighting, but also adding relative Total Shareholder Return (rTSR) as a modifier:
EBITDA Performance Goals — 60% of PSU award value
|
|
Below
Threshold |
Threshold |
Target |
Maximum |
Cumulative
Company EBITDA for the three year performance period1 |
Performance
Level (in millions) |
<$469.1 |
$ |
469.1 |
$ |
551.9 |
$ |
717.5 |
Payout2 |
0% |
50% |
100% |
200% |
ROIC Performance Goals — 40% of PSU award value
|
|
Below
Threshold |
Threshold |
Target |
Maximum |
Company
ROIC for 20253 |
Performance
Level (in percentages) |
<8.5% |
8.5% |
10.0% |
13.0% |
Payout2 |
0% |
50% |
100% |
200% |
|
1 |
The EBITDA target was set by the Committee
to represent a challenging performance incentive based on annual percentage increases over actual 2022 EBITDA and is not intended as guidance
or a prediction of actual results. |
|
2 |
Subject to adjustment as described
below. |
|
3 |
The ROIC target was set by the Committee
to represent a challenging performance incentive and is not intended as guidance or a prediction of actual results. |
After applying the above performance metrics, the resulting
number of PSUs may be subject to increase or decrease based on the Company’s Total Shareholder Return (TSR) over the performance
period compared to the TSR of the companies in a peer group based on the S&P SmallCap 600 Industrials Index. If the Company’s
relative TSR (rTSR) is below the 25th percentile or above the 75th percentile, the resulting number of shares will be decreased by 20%
or increased by 20%, respectively; if the Company’s rTSR is from the 25th percentile to the 75th percentile, no adjustment will
be made. In no event will the award payout be greater than 200% of the target.
For more information about the fiscal 2023 LTI awards,
see Grants of Plan-Based Awards on page 36.
LTI Changes for 2024
For the fiscal 2024 LTI awards to Mr. Sayler and the
other executive officers, the Committee set the value as a percentage of base salary in line with market practices, resulting in fiscal
2024 target LTI values as of the grant date of $1,510,000 (200% of base salary), $598,500 (100% of base salary) and $304,400 (75% of base
salary) for Mr. Sayler, Mr. Tucker and Mr. Schatz, respectively.
The Committee determined that the LTI awards for fiscal
2024 would be provided in the same two forms as in fiscal 2023 and that the grant date target value would be divided equally between PSUs
and RSUs as they were in fiscal 2023. The fiscal 2024 PSUs were granted in November 2023 and will vest after a three-year performance
period beginning with fiscal 2024, at which time they will be converted into a currently undeterminable number of shares of Company common
stock, which may be less than or greater than the number of PSUs awarded, within certain specified threshold and maximum limits, depending
on the degree to which the Company has achieved one or more specified performance goals. If the performance is less than the threshold
goal for a particular performance measure, there will be no payout of that portion of the PSUs dependent on that measure. The fiscal 2024
RSU awards were also granted in November 2023 and will vest in three equal portions approximately 12, 24 and 36 months after the month
in which they are granted; for the 2024 awards, vesting will occur on the last trading days in November of 2024, 2025 and 2026.
| | |
30 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Other Compensation Elements
Perquisites.
The Company also provides limited perquisites to the executive officers,
which have historically included country club membership, an annual physical, financial planning and an auto allowance. The Committee
annually reviews the types and value of the perquisites provided to the executive officers as part of its overall review of executive
compensation. The Committee determined the perquisites paid in fiscal 2023 to be reasonable.
Certain of these perquisites are treated as taxable income. Effective
January 1, 2021, we ceased reimbursing our executive officers for the income taxes due on these perquisites (“tax gross-ups”),
and effective for fiscal 2023 we ceased providing auto allowances and country club benefits for our executive officers other than country
club initiation fee benefits for Mr. Sayler and Mr. Tucker based on their employment terms at hire.
Retirement Benefits.
Like our other employees, the executive officers are eligible for
retirement benefits provided through a matched defined contribution (401(k)) program. Our former defined benefit pension plan was terminated
in February 2020, and the executive officers received lump sum distributions in liquidation of their plan accounts. Upon his retirement
in 2023, Mr. Richey received a lump-sum benefit under our supplemental executive retirement plan (SERP), the accrual of benefits under
which had ended in December 2003. See Pension Benefits, below.
Severance Plan.
Severance provisions in the event of a change of control benefit
a company by allowing executives who are parties to such arrangements to focus on continuing business operations and the success of a
potential business combination rather than seeking alternative employment, thereby providing stability to a corporation during a potentially
uncertain period. Accordingly, the Company has adopted a Severance Plan, last amended in November 2020, which prescribes the compensation
and benefits to be provided in the event of a change of control to certain executives, including the CEO and the other executive officers.
Our change of control arrangements were designed to provide executives
with severance payments and certain other benefits in the event that their employment is terminated in connection with a change of control
transaction. The Severance Plan includes a “double trigger,” which means that it provides severance benefits only if there
is both (1) a change of control of the Company, and (2) the Company (or any successor) terminates the employee’s employment without
cause within 36 months following a change of control, or the employee terminates his or her employment for good reason within 36 months
following a change of control, or the Company terminates the employee’s employment within 90 days before a change of control at
the request of a third party who, at such time, had taken steps reasonably calculated to effect the change of control.
For purposes of the Severance Plan, “change of control” means
any of the following (subject to the specific definitions in the Severance Plan): (i) the acquisition by any person or group of at least
20% of the then-outstanding shares of the Company’s common stock; or (ii) a change in a majority of the members of the Board of
Directors that is not approved by the incumbent Board; or (iii) the approval by the shareholders of either a reorganization, merger or
consolidation after which the shareholders will not own at least a majority of the Company’s common stock and voting power, or a
liquidation or dissolution of the Company, or the sale of all or substantially all of the Company’s assets.
If the Severance Plan is triggered, the executive will be entitled
to all accrued but unpaid compensation, a pro rata cash bonus for the year of separation and benefits through the date of separation,
as well as a lump sum cash payment which is designed to replicate the cash compensation (base salary and cash incentive), plus certain
benefits, that the executive would have received had he or she remained employed for two years. These payments and benefits would only
be paid as a result of a double-trigger event. The determination of the appropriate level of payments and benefits to be provided in the
event of a change of control termination involved consideration of several factors. The two-year multiple was determined based on a survey
of the Company’s peers at the time the Severance Plan was adopted by the Company, and is deemed to be reasonable. The Committee
considered that a high-level executive, who is more likely to lose his or her job in connection with a change of control than other employees,
may require more time than other employees in order to secure an appropriate new position, and, unless that executive was provided with
change of control benefits, he or she may be motivated to start a job search early if a change of control is anticipated, to the detriment
of the Company. Thus, the existence of the Severance Plan provides an incentive for the executive to remain with the Company until a change
of control actually occurs. In addition, payments are not provided under the Severance Plan unless there has been not only a change of
control but also a qualifying termination of employment, thus providing an acquirer the opportunity to retain the Company’s management
team during or after a transition period.
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31 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
For further information about the Severance Plan, and
a sample calculation of the cash compensation and benefits to be provided to our executive officers under the Severance Plan, based on
certain stated assumptions, see Potential Payments Upon Termination or Change in Control beginning on page
40.
In addition, pursuant to the executive officers’
severance agreements as well as their LTI award agreements, in the event of a change of control, all LTI awards are to be assumed by the
acquirer or successor entity and converted to an equivalent agreement. If for any reason the awards will not or cannot be assumed, they
will be paid out in cash.
Employment Agreements.
In 2021, we entered into new employment and compensation
agreements with each of our then executive officers, and in December 2022, we entered into a new employment and compensation agreement
with Mr. Sayler effective January 1, 2023, consistent with the financial terms of his accepted offer letter and otherwise substantially
on the same terms as the current employment agreements with the other executive officers. The agreements provide for payment of an annual
base salary, participation in our cash incentive plans, eligibility for participation in our LTI plans and benefit plans and programs
applicable to senior executives, and continuance of certain perquisites. For more information about the terms of these agreements, including
specifics regarding the cash compensation and benefits provided in the event of a qualifying separation, and for a sample calculation
based on certain stated assumptions, see Employment Agreements on page
39, and Potential Payments Upon Termination or Change in Control beginning on page
40.
The Compensation Committee periodically assesses the
reasonableness of the executive officers’ employment agreements to consider whether any changes are appropriate.
Limit on Deductibility
of Certain Compensation
Section 162(m) of the Internal Revenue Code prohibits
publicly held companies, including the Company, from deducting salaries and other compensation paid to an executive officer to the extent
that the total exceeds $1 million during the tax year. Certain compensation based upon the attainment of performance goals set by the
Compensation Committee was formerly able to qualify for an exclusion from this limitation, but this exclusion has been eliminated. However,
the Committee intends to continue its practice of utilizing shareholder-approved metrics for our cash incentive plans when appropriate,
although it reserves the right to use other award provisions that are tailored to achieving our financial and business objectives if it
determines that the awards and performance metrics are appropriate and consistent with our business needs.
Stock Ownership
Guidelines
The Compensation Committee has established stock ownership
guidelines for the executive officers. The guidelines set the minimum level of ownership at a multiple of annual base salary as follows:
Title |
Multiple
of Base Salary |
CEO
and President |
5x |
Other
Executive Officers |
3x |
Executive officers are expected to be in compliance
with the ownership guidelines within five years of their appointments, and they are required to hold 100% of all after-tax stock distributions
received from compensation awards until the guideline amounts are reached and thereafter as needed to maintain ownership of at least the
guideline amounts. Mr. Tucker and Mr. Schatz currently exceed the ownership guidelines, and Mr. Sayler, who became an executive officer
in January 2023, is expected to meet the guidelines within the five-year period.
Insider Trading
Policy; Anti-Hedging and Anti-Pledging Policies
Our Insider Trading Policy prohibits any employee from
trading in Company securities while in possession of material non-public information. In addition, the Insider Trading Policy strictly
prohibits our directors, officers and employees from engaging in transactions in Company securities involving puts, calls or other derivative
securities on an exchange or in any other organized market, selling Company securities “short”, or entering into hedging or
similar arrangements (such as exchange funds) involving Company securities. The Insider Trading Policy also prohibits our directors, officers,
corporate office employees, and other designated employees in management positions from pledging Company securities as collateral
| | |
32 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
for a loan or holding Company securities in a margin
account. These policies are intended to ensure that the executive officers, as well as other Company personnel in positions of authority,
cannot offset or hedge against declines in the price of the Company stock they own or have a personal interest in the price of their shares
which may be different from the interests of other shareholders generally.
Clawback Policy
Our Code of Business Conduct and Ethics reaffirms the
importance of high standards of business ethics. Adherence to these standards by all employees is the best way to ensure compliance and
secure public confidence and support. All employees are responsible for their actions and for conducting themselves with integrity. Any
failure on the part of any employee to meet any of the standards embodied in this Code will be subject to disciplinary action, including
potential dismissal.
Since 2010, we have had in effect a robust Compensation
Recovery Policy (Clawback Policy), and effective in October 2023 we adopted a Supplement to the Clawback Policy designed to comply with
the enhanced clawback-related listing standards adopted in 2023 by the NYSE. The Clawback Policy provides that when appropriate, and in
accordance with applicable law, the Company may recover any “Recoverable Compensation” received during a prescribed period
of up to three years if an executive or other senior officer of the Company or any of our affiliates:
|
● |
Engages in intentional misconduct resulting
in a financial restatement or in any increase in his or her incentive or equity income, or |
|
● |
Engages in activity that competes with
the Company or its affiliated companies, or |
|
● |
Solicits customers or hires or assists
anyone else in soliciting or hiring employees of the Company or its affiliates after termination of employment or engages in the unauthorized
disclosure or use of the Company’s confidential information resulting in harm to the Company or its affiliates, in any case in violation
of agreements entered into by such employee prohibiting such actions. |
“Recoverable Compensation” is defined to
include any equity and incentive compensation received, earned or distributed to or for the benefit of an executive or senior officer,
including amounts and shares under any equity or compensation plan or employment agreement. The Clawback Policy specifies that to the
extent compensation is recovered from an individual as a result of a financial restatement such amounts will be excluded from “Recoverable
Compensation.”
As supplemented, the Clawback Policy also provides
in the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material
noncompliance with any financial reporting requirement under the federal securities laws, the Board shall require prompt reimbursement
or forfeiture of any excess Incentive-Based Compensation, as defined in the Supplemental Clawback Policy, received by a Company executive
during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement,
in addition to any transition period (that results from any change in the Company’s fiscal year) within or immediately following
such three completed fiscal years.
Recoupment and clawback provisions are included in
all equity awards and performance compensation plan agreements for certain participants, and these provisions will be added to all new
non-base compensation awards. The Clawback Policy does not prevent us from taking other actions as appropriate, if warranted, based on
the misconduct outlined above.
The Clawback Policy, including the 2023 Supplement,
is set forth as Exhibits 97.1 and 97.2 to our 2023 Annual Report on Form 10-K, filed with the SEC on November 29, 2023.
During fiscal 2023, there was no
financial restatement which would have required action under the Clawback Policy to recover any Recoverable Compensation, and at the end
of fiscal 2023 there was no outstanding balance of Recoverable Compensation resulting from a financial restatement in any prior year.
CEO Transition
In anticipation of Mr. Richey’s
retirement as an executive officer effective January 1, 2023, in November 2022 the Compensation Committee approved and the Board ratified
certain changes in Mr. Richey’s compensation by amendment to Mr. Richey’s Employment Agreement effective December 31, 2022,
providing that: (i) Mr. Richey would remain as an employee and director of the Company during a transition period, which ended June 30,
2023; (ii) effective January 1, 2023, Mr. Richey’s base salary would be adjusted to an annual rate of $650,000, prorated over the
length of the transition period;
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33 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
(iii) Mr. Richey would continue to participate in the
PCP until the end of the transition period, with his 2023 cash incentive target remaining at the 2022 figure of $959,500 prorated for
the first quarter of fiscal 2023, and then reduced to $487,500 prorated until the end of the transition period; and (iv) Mr. Richey would
also receive a one-time award of 17,241 RSUs on January 3, which vested upon his retirement on June 30, 2023 and was distributed in shares
on July 3, 2023, subject to a non-compete covenant ending two years after the distribution date and other conditions, including potential
clawbacks, similar to those in the Company’s standard RSU awards. These terms are reflected in the fiscal 2023 compensation tables
which follow this section.
2023
SUMMARY COMPENSATION TABLE
The following table contains compensation information
for fiscal 2023 and the preceding two fiscal years for all services rendered in all capacities to the Company and its subsidiaries by
the executive officers. Because Mr. Sayler became an executive officer during 2023, under SEC regulations 2023 was the first year for
which his compensation was required to be reported.
|
|
|
|
|
|
|
|
|
|
Change
in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
& |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified |
|
|
|
|
Name
and |
|
|
|
|
|
|
|
Non-Equity |
Deferred |
|
|
|
|
Principal |
Fiscal |
|
|
|
|
|
|
Incentive
Plan |
Compensation |
All
Other |
|
|
Position |
Year |
Salary |
Bonus |
Stock
Awards1 |
Compensation2 |
Earnings3 |
Compensation4 |
|
Total |
Bryan
H. |
2023 |
$ |
621,1255 |
$ |
0 |
$ |
1,492,7175 |
$ |
947,375 |
$ |
0 |
$ |
586,424 |
$ |
3,647,641 |
Sayler |
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief |
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Christopher |
2023 |
$ |
570,000 |
$ |
0 |
$ |
845,059 |
$ |
410,300 |
$ |
0 |
$ |
113,274 |
$ |
1,938,633 |
L.
Tucker |
2022 |
|
522,000 |
|
0 |
|
730,600 |
|
549,840 |
|
0 |
|
52,103 |
|
1,854,543 |
Senior
Vice |
2021 |
|
221,1546 |
|
1,335,0006 |
|
346,493 |
|
149,5006 |
|
0 |
|
22,187 |
|
2,074,334 |
President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
M. |
2023 |
$ |
394,000 |
$ |
0 |
$ |
308,530 |
$ |
193,600 |
$ |
0 |
$ |
33,342 |
$ |
929,472 |
Schatz |
2022 |
|
357,000 |
|
0 |
|
356,259 |
|
241,740 |
|
0 |
|
48,210 |
|
1,003,209 |
Senior
Vice |
2021 |
|
296,7807 |
|
|
|
168,047 |
|
77,3427 |
|
0 |
|
25,412 |
|
567,581 |
President, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Counsel
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secretary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Victor
L. |
2023 |
$ |
549,5258 |
$ |
0 |
$ |
1,499,9678 |
$ |
534,7478 |
$ |
30,608 |
$ |
62,306 |
$ |
2,677,153 |
Richey |
2022 |
|
898,100 |
|
0 |
|
2,963,694 |
|
1,516,010 |
|
0 |
|
74,911 |
|
5,452,716 |
Former |
2021 |
|
898,100 |
|
0 |
|
2,462,845 |
|
710,030 |
|
6,405 |
|
84,362 |
|
4,161,742 |
Chairman, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Represents
the aggregate grant date fair values of equity-based awards based on the fair market value of the underlying Common Stock on the respective
grant dates as calculated in accordance with applicable accounting rules. Such amounts do not represent the actual value that will be
realized by the executive officers at the time of distribution. Awards shown are grants of time-vested RSUs and performance-based PSUs
to Mr. Sayler, Mr. Tucker and Mr. Schatz, and a PARS award granted to Mr. Richey in 2021. For more information, see Principal Elements
of Compensation – Long-Term Equity Incentive Compensation in the Compensation Discussion and Analysis section, and Grants
of Plan-Based Awards, below. |
| | |
34 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
2 |
Reflects the performance-based cash
awards earned for the fiscal year indicated under the PCP, including cash dividends of $2,759 earned on Mr. Richey’s January 3,
2023 RSU (see Note 8 below). For more information, see Principal Elements of Compensation – Cash Incentive Plans in
the Compensation Discussion and Analysis section, and Grants of Plan-Based Awards, below. |
3 |
Amounts represent
the changes in actuarial present value of the accumulated pension benefits for Mr. Richey under the Company’s defined benefit pension
plan until its termination in 2020 and under the Company’s supplemental executive retirement plan (SERP) for each fiscal year shown.
These changes in value include the effects of changes in actuarial assumptions from year to year. For fiscal 2023, Mr. Richey’s
SERP value increased, partly due to the effect of changes in actuarial assumptions from the preceding year. The fiscal 2023 change in
Mr. Richey’s SERP value due to assumption changes was $15,247. For fiscal 2022, Mr. Richey’s SERP value decreased in the amount
of $68,500, due in part to the effect of changes in actuarial assumptions from the preceding year which reduced the value by $93,214.
Pursuant to SEC regulations, the amount in the table does not reflect the overall decreases in Mr. Richey’s SERP value. For fiscal
2021, Mr. Richey’s SERP value increased, partly due to the effect of changes in actuarial assumptions from the preceding year. The
fiscal 2021 change in Mr. Richey’s SERP value due to assumption changes was $0. For additional information, including the actuarial
assumptions used in fiscal 2023 and information about the termination of the Company’s defined benefit pension plan, see Pension
Benefits, below. There were no non-qualified deferred compensation earnings. |
4 |
Comprised of the amounts provided
in the table below: |
|
|
|
Defined |
|
|
|
|
|
|
|
|
|
Contribution |
|
Employee |
|
|
|
|
|
|
|
Savings
Plan |
|
Stock
Purchase |
|
|
|
|
|
|
|
Company |
|
Plan
Company |
|
Perquisites
and |
|
|
Name
and Principal Position |
Fiscal
Year |
|
Contributionsa |
|
Contributionsb |
|
Otherc |
|
Total |
Bryan
H. Sayler |
2023 |
$ |
14,954 |
$ |
1,648 |
$ |
569,822 |
$ |
586,424 |
Chief
Executive Officer and |
N/A |
|
|
|
|
|
|
|
|
President |
N/A |
|
|
|
|
|
|
|
|
Christopher
L. Tucker |
2023 |
$ |
13,200 |
$ |
5,691 |
$ |
94,383 |
$ |
113,274 |
Senior
Vice President and Chief |
2022 |
|
12,200 |
|
5,217 |
|
34,686 |
|
52,103 |
Financial
Officer |
2021 |
|
6,923 |
|
1,731 |
|
13,533 |
|
22,187 |
David
M. Schatz |
2023 |
$ |
13,281 |
$ |
6,350 |
$ |
13,711 |
$ |
33,342 |
Senior
Vice President, General |
2022 |
|
12,497 |
|
3,567 |
|
32,146 |
|
48,210 |
Counsel
and Secretary |
2021 |
|
8,961 |
|
3,501 |
|
12,950 |
|
25,412 |
Victor
L. Richey |
2023 |
$ |
13,000 |
$ |
2,267 |
$ |
47,039 |
$ |
62,306 |
Former
Chairman, Chief Executive |
2022 |
|
12.200 |
|
3,592 |
|
59,119 |
|
74,911 |
Officer
and President |
2021 |
|
11,600 |
|
3,589 |
|
69,173 |
|
84,362 |
|
a |
See Defined Contribution Plan
on page 39. |
|
b |
The Company matches 20% of employees’
contributions to its Employee Stock Purchase plan. |
|
c |
Includes car allowance, financial planning,
Company cost related to the personal use of clubs, and premiums for group variable universal life (GVUL) insurance which the Company offers
to a number of senior managers at ESCO and its participating subsidiaries. Mr. Sayler’s figure for 2023 includes compensation of
$538,495 for reimbursement of moving expenses related to his transition to CEO, grossed up for taxes, and a country club initiation fee
which the Company had agreed to pay at the time Mr. Sayler commenced his employment. Mr. Tucker’s figure for 2023 includes $88,000
as the personal portion of a country club initiation fee which the Company had agreed to pay at the time Mr. Tucker commenced his employment.
Mr. Richey’s figure for 2021 also includes an annual tax gross-up of $16,809 for taxable club fees and financial planning; the Company
generally discontinued tax gross-ups after December 2020. For more information, see Other Compensation Elements – Perquisites
in the Compensation Discussion and Analysis section |
5 |
Upon becoming an executive officer
Mr. Sayler, who was previously a management official of the Company, received an increase in his annualized salary from $339,500 to $715,000,
prorated based on his days of service in each position. |
6 |
Mr. Tucker received
a salary for 2021 at the annualized rate of $500,000 and a 2021 cash incentive at an annualized target of $325,000, guaranteed at a multiple
of at least 1.00x; his actual salary and cash incentive target were prorated based on his period of employment during 2021. At the commencement
of his employment he also received a transition bonus of $835,000 plus Company common stock valued at $500,000 on the award date, to partially
compensate him for equity opportunities he forfeited upon his departure from his prior employer. |
7 |
Upon becoming an executive officer
Mr. Schatz, who was previously a Vice President and IP Counsel of the Company, received an increase in his annualized salary from $270,700
to $335,000 and an increase in his 2021 cash incentive target from $75,200 to $145,000; his actual salary and cash incentive target were
prorated based on his days of service in each position. |
| | |
35 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
8 |
As a result of his retirement as an
executive officer on December 31, 2022: (i) Mr. Richey’s base salary was reduced from an annual rate of $898,100 to an annual rate
of $650,000, prorated over the length of a transition period which ended June 30, 2023; (ii) Mr. Richey continued to participate in the
PCP until the end of the transition period, but for the first quarter of fiscal 2023 his 2023 cash incentive target remained at $959,500,
prorated for that quarter, and beginning January 1, 2023 his 2023 cash incentive target was reduced to $487,500, prorated from January
1, 2023 until his retirement on June 30, 2023; and (iii) on January 3, 2023, he received a one-time transition RSU award for 17,241 shares,
based on a value of $1,500,000 divided by the $87.00 per share NYSE closing price on that date. |
2023
GRANTS OF PLAN-BASED AWARDS
The following table provides information for fiscal 2023 for
the executive officers regarding cash incentive awards under our PCP and awards of RSUs and PSUs under the 2018 Omnibus Incentive Plan.
See Principal Elements of Compensation – Cash Incentive Plans and – Long-Term Equity Incentive Compensation
in the Compensation Discussion and Analysis section.
|
|
|
|
|
|
|
|
|
|
|
|
All
other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
other |
option |
|
|
|
|
|
|
Estimated
future payouts under |
Estimated
future payouts under |
stock |
awards: |
Exercise |
|
Grant
date |
|
|
|
non-equity
incentive plan awards1 |
equity
incentive plan awards2 |
awards: |
Number
of |
or
base |
|
fair
value |
|
|
|
|
|
|
|
|
|
|
|
Number |
securities |
price
of |
|
of
stock |
|
|
|
|
|
|
|
|
|
|
|
of
shares |
underlying |
option |
|
and
option |
Name |
Grant
date |
Threshold |
|
Target |
|
Maximum |
Threshold |
Target |
Maximum |
of
stock3 |
options |
awards |
|
awards4 |
Bryan
H. |
11/16/2022 |
$ |
214,500 |
$ |
715,000 |
$ |
1,430,000 |
— |
— |
— |
— |
— |
— |
|
— |
Sayler |
11/16/2022 |
|
— |
|
— |
|
— |
4,118 |
8,235 |
16,470 |
— |
— |
— |
$ |
779,690 |
|
5/2/2023 |
|
— |
|
— |
|
— |
— |
— |
— |
7,489 |
— |
— |
|
713,028 |
Christopher |
11/16/2022 |
$ |
111,900 |
$ |
373,000 |
$ |
746,000 |
— |
— |
— |
— |
— |
— |
|
— |
L.
Tucker |
11/16/2022 |
|
— |
|
— |
|
— |
1,642 |
3,283 |
6,566 |
— |
— |
— |
$ |
310,834 |
|
2/2/2023 |
|
— |
|
— |
|
— |
— |
— |
— |
2,507 |
— |
— |
|
250,023 |
|
5/2/2023 |
|
— |
|
— |
|
— |
— |
— |
— |
2,985 |
— |
|
|
284,202 |
David
M. |
11/16/2022 |
$ |
52,800 |
$ |
176,000 |
$ |
352,000 |
— |
— |
— |
— |
— |
— |
|
— |
Schatz |
11/16/2022 |
|
— |
|
— |
|
— |
851 |
1,702 |
3,404 |
— |
— |
— |
$ |
161,145 |
|
5/2/2023 |
|
— |
|
— |
|
— |
— |
— |
— |
1,548 |
— |
— |
|
147,385 |
Victor
L. |
11/16/20225 |
$ |
287,850 |
$ |
959,500 |
$ |
1,919,000 |
— |
— |
— |
— |
— |
|
|
— |
Richey |
1/3/2023 |
|
— |
|
— |
|
— |
— |
— |
— |
17,241 |
— |
|
$ |
1,499,967 |
1 |
Represent the threshold,
target and maximum cash incentive opportunities awarded for fiscal 2023 under the PCP. If performance according to a specific performance
measure is less than that necessary to achieve the threshold payout, the payout will be zero for that measure. Actual payouts were made
in fiscal 2024 based on fiscal 2023 results and are reported in the column captioned Non Equity Incentive Plan Compensation in
the Summary Compensation Table. For more information, see Principal Elements of Compensation
– Cash Incentive Plans in the Compensation Discussion and Analysis section. |
2 |
Represent the threshold, target and
maximum equity incentive opportunities for the PSUs awarded for fiscal 2023 under the Company’s Long-Term Incentive Compensation
program. If performance according to a specific performance measure is less than that necessary to achieve the threshold payout, the payout
will be zero for that measure. The actual incentive payout will be in shares of common stock based on Company performance over a three-year
performance period and will not be determinable until after the close of the performance period. For more information, see Principal
Elements of Compensation – Long-Term Equity Incentive Compensation in the Compensation Discussion and Analysis section. |
3 |
For Mr. Sayler, Mr. Tucker and Mr.
Schatz, these consist of time-vested RSUs vesting in three equal portions approximately 18, 30 and 42 months after the month in which
they are granted. For Mr. Richey, this consists of a time vested RSU which vested upon his retirement on June 30, 2023. For more information,
see Principal Elements of Compensation – Long-Term Equity Incentive Compensation and CEO Transition
in the Compensation Discussion and Analysis section. |
4 |
Based on the fair market value on the
grant date of a number of shares of common stock equal to the number of RSUs, or in the case of PSUs, the number of shares corresponding
to the Target payout, as calculated in accordance with applicable accounting rules. Such amounts do not represent the actual value that
will be realized by the executive officers at the time of distribution. |
| | |
36 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
5 |
Figures for Mr. Richey represent the
threshold, target and maximum cash incentive opportunities at the time of the initial grant. However, in view of Mr. Richey’s decision
to retire as an executive officer, the Company and Mr. Richey agreed that his 2023 cash incentive target would remain at the original
2022 figure of $959,500 prorated for the first quarter of fiscal 2023, and then be reduced to $487,500 prorated until the end of the transition
period, which occurred on June 30, 2023. |
OUTSTANDING
EQUITY AWARDS AT FISCAL 2023 YEAR-END
The following table provides information as of the end of fiscal
2023 for our executive officers regarding outstanding equity awards, consisting of unvested PARS, unvested RSUs, and unvested PSUs. As
of the end of fiscal 2023, no executive officer had any outstanding stock option awards, either exercisable or unexercisable.
|
|
|
Stock
Awards |
|
|
|
Number |
|
Market
value |
Number
of |
Market
value |
|
|
|
of
shares or |
|
of
shares or |
unearned |
of
unearned |
|
|
|
units
of stock |
|
units
of stock |
shares,
units or |
shares,
units or |
|
|
|
that
have not |
|
that
have not |
other
rights that |
other
rights that |
Name |
Type
of award |
Grant
date |
vested |
|
vested1 |
have
not vested |
have
not vested1 |
Bryan
H. Sayler |
PARS |
5/1/2020 |
3,3472 |
$ |
349,561 |
|
|
|
|
RSU |
4/30/2021 |
1,5823 |
|
165,224 |
|
|
|
|
PSU |
11/17/2021 |
|
|
|
1,0894 |
$ |
113,7354 |
|
RSU |
5/5/2022 |
2,8053 |
|
292,954 |
|
|
|
|
PSU |
11/16/2022 |
|
|
|
4,1184 |
|
430,0844 |
|
RSU |
5/2/2023 |
7,4893 |
|
782,151 |
|
|
1,1985 |
Christopher
L. |
RSU |
4/30/2021 |
3,1323 |
$ |
327,106 |
|
|
|
Tucker |
PSU |
11/17/2021 |
|
|
|
1,9954 |
$ |
208,3584 |
|
RSU |
5/5/2022 |
4,8803 |
|
509,667 |
|
|
|
|
PSU |
11/16/2022 |
|
|
|
1,6424 |
|
171,4904 |
|
RSU |
2/3/2023 |
2,5073 |
|
261,831 |
|
|
4015 |
|
RSU |
5/2/2023 |
2,9853 |
|
311,753 |
|
|
4785 |
David
M. Schatz |
PARS |
5/1/2020 |
2,0082 |
$ |
209,716 |
|
|
|
|
RSU |
4/30/2021 |
1,5193 |
|
158,644 |
|
|
|
|
PSU |
11/17/2021 |
|
|
|
9724 |
$ |
101,5164 |
|
RSU |
5/5/2022 |
2,3843 |
|
248,985 |
|
|
|
|
PSU |
11/16/2022 |
|
|
|
8514 |
|
88,8784 |
|
RSU |
5/2/2023 |
1,5483 |
|
161,673 |
|
|
2485 |
Victor
L. Richey |
PSU |
11/17/2021 |
|
|
|
4,3124 |
$ |
450,3454 |
1 |
Based on the NYSE closing price
of the Company’s common stock of $104.44 on September 29, 2023, the last NYSE trading day of the Company’s 2023 fiscal year. |
2 |
PARS
awards have a term of five years, and the award (net of withholding taxes) is distributable to the recipient in shares of Company common
stock at the end of the term. However, if the Company achieves target stock price stated in the notice of award during the third or fourth
years of the term (PARS Performance Periods), then part or all of the award is accelerated, and the accelerated portion (net of withholding
taxes) is distributed in shares six months after the end of the PARS Performance Period in which the criteria are first met, but not later
than the end of the fifth year. Distribution of PARS award shares may not occur earlier than 3½ years after the initial award date
even if the performance criteria are met, except in cases of death, disability, retirement or certain other special circumstances. In
all events, the award recipient must remain continuously employed by the Company until the underlying shares are distributed (except that
the Committee may in its discretion waive this requirement if termination of employment is due to death, disability, retirement or other
circumstance the Committee deems appropriate). Until the underlying shares are actually distributed, dividends are not paid or accrued
on the PARS. With respect to the PARS awards granted to Mr. Sayler and Mr. Schatz on May 1, 2020,
the specified stock price targets of $80.31 and $85.92 were achieved on August 29, 2022 and November 28, 2022, based on the average closing
stock prices over the preceding thirty consecutive trading days; accordingly these awards were accelerated and vested on November 1, 2023
(less a number of shares having a value equal to the amount of required tax withholdings). For more information, see Principal Elements
of Compensation – Long-Term Equity Incentive Compensation in the Compensation Discussion and Analysis section. |
| | |
37 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
3 |
Each RSU represents the right to receive
one share of Company common stock if the recipient remains continuously employed by the Company until the vesting date. RSUs awarded prior
to 2023 will vest approximately 3½ years after the effective award date, except that Mr. Tucker’s February 3, 2023 RSUs will
vest November 5, 2025. RSUs awarded in 2023 will vest in thirds approximately 18, 30 and 42 months after the effective award date, on
the last trading days in November of 2024, 2025 and 2026. Vested shares will be issued to the participant (less a number of shares having
a value equal to the amount of required tax withholdings) on the following business day. |
4 |
Represents the number and value of
the shares issuable if Company performance over the three-year performance period meets or exceeds the threshold required to earn a minimum
non-zero payout for each of two performance components. However, because performance below either threshold will result in a zero payout
for that component, the minimum payout is actually zero. The actual payout will not be determinable or estimable until after the close
of the performance period. For more information, see Principal Elements of Compensation – Long-Term Equity Incentive Compensation
in the Compensation Discussion and Analysis section. However, because Mr. Richey was eligible for retirement under the terms of his award,
the target number of PSUs in his award was prorated based on his retirement date compared to the performance period, and the final number
of shares issuable on payout will be based on the prorated award’s payout multiplier at the close of the award’s performance
period. |
5 |
Represents
cash dividend equivalents accrued on RSUs awarded beginning in 2023. On each regular quarterly dividend date occurring from the award
date to and including the vesting date, the Company accrues for the benefit of the recipient an amount equal to the cash dividend which
would have been paid on a number of shares of Company common stock equal to the number of unconverted RSUs. The amount accrued with respect
to each vested portion of the award will be paid out in cash at the time that portion of the award is distributed in shares; but, if or
to the extent the award does not vest or for any reason is not distributed, a like portion of the accrued amount will be canceled and
not paid. |
2023
OPTION EXERCISES AND STOCK VESTED
The following table sets forth information for our
executive officers regarding their stock-based awards which vested during 2023. We have not awarded stock options to our executive officers
since 2006, and no stock options were outstanding or were exercised during 2023.
|
Stock
Awards |
Executive
Officer |
Number
of Shares Acquired on Vesting1 |
|
Value
Realized on Vesting3 |
David
M. Schatz |
2,0001 |
$ |
174,820 |
Victor
L. Richey |
22,4221 |
|
1,959,907 |
|
40,5132 |
|
4,198,362 |
1 |
Shares of Common Stock underlying PARS
awards granted to Mr. Schatz and Mr. Richey on May 1, 2019, which vested on November 1, 2022. A number of these shares were withheld in
lieu of cash payment of applicable withholding taxes, and the remaining shares were distributed on November 2, 2022. |
2 |
Shares of Common Stock underlying that
portion of PARS and RSU awards granted to Mr. Richey in 2021 and 2022 which vested upon his retirement on June 30, 2023. A number of these
shares were withheld in lieu of cash payment of applicable withholding taxes, and the remaining shares were distributed on July 3, 2023. |
3 |
Fair market value of the shares of
Common Stock underlying the vested awards, based on the NYSE closing prices of $87.41 and $103.63 on November 1, 2022 and June 30, 2023,
respectively, the values used by the Company for tax and accounting purposes. |
PENSION
BENEFITS
Pension Plan and SERP
Beginning in 1990, we had sponsored a defined benefit
Pension Plan in which our executive officers as well as other covered employees participated. Because benefits under the Pension Plan
were subject to reduction under certain provisions of the Internal Revenue Code, in 1993 we adopted a Supplemental Executive Retirement
Plan (SERP) which provides that where such reductions occurred, we would make supplemental post-retirement payments to certain executives,
including Mr. Richey.
| | |
38 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
The SERP was designed to maintain total pension benefits
at the formula level of the Pension Plan. Both the Pension Plan and the SERP were frozen at the end of 2003, with no increase in years
of credited service or accumulated benefits accruing to participants after that date.
In February 2020, we terminated the Pension Plan and
plan assets were distributed to the participants as their choice of either a lump sum payment of their Pension Plan benefits or an annuity
issued by a qualified insurance company.
Upon reaching age 65 during 2022, Mr. Richey became
eligible to receive benefits under the SERP beginning at the termination of his employment, based on 18 years of credited service. Because
Mr. Richey elected to receive his accumulated benefits in a lump sum upon his retirement on June 30, 2023, the present value was calculated
based on the August 2022 417(e) lump sum segment rates and the 2022 417(e) IRS prescribed mortality table.
The following table sets forth Mr. Richey’s status
under the SERP as of September 30, 2023.
|
|
Number
of Years of |
Present
Value of |
Payments
During Last |
Name |
Plan
Name |
Credited
Service |
Accumulated
Benefit |
Fiscal
Year |
Victor
L. Richey |
SERP |
18 |
$0 |
$250,444 |
Defined Contribution Plan
Our Employee Savings Investment Plan (Defined Contribution
Plan) is an employee benefit plan under section 401(k) of the Code, which is offered to substantially all United States employees including
the executive officers. The Defined Contribution Plan provides for a Company cash match at a rate of 100% of the contributions by each
employee up to 3% of the employee’s eligible compensation, and 50% of any additional contributions by the employee up to 5% of the
employee’s eligible compensation, subject to Code contribution limits. The amounts of the Company’s cash match for the accounts
of the executive officers in fiscal years 2021, 2022 and 2023 are listed in footnote (4) to the Summary Compensation Table, under the
heading Defined Contribution Savings Plan Company Contributions.
EMPLOYMENT
AGREEMENTS
In 2021, we entered into new employment and compensation
agreements with each of our then executive officers, and in December 2022, we entered into a new employment and compensation agreement
with Mr. Sayler effective January 1, 2023, consistent with the financial terms of his accepted offer letter and otherwise substantially
on the same terms as the current employment agreements with the other executive officers.
The agreements provide for a base salary, which is
subject to annual review by the Compensation Committee but may not be decreased, and an annual cash incentive opportunity in accordance
with our cash incentive program. The executive officers are entitled to participate in LTI awards and other compensation programs as determined
by the Compensation Committee, as well as in all Company employee benefit programs applicable to senior executives, and the Company agrees
to provide certain perquisites, including financial planning and outplacement assistance.
Mr. Tucker’s and Mr. Schatz’s agreements
provide for initial terms of one year and 24 months, respectively, which have now elapsed. Mr. Sayler’s agreement provides for an
initial term of 24 months, which will elapse at the end of February 2025. The agreements provide that they will automatically renew for
successive one-year periods unless a specified notice of non-renewal is given by the Company or the executive.
The agreements give each party certain termination
rights, with post-termination compensation and benefits payable to the executive officer, if any, depending on the reasons for the termination,
such as whether the termination is with or without Cause, as defined in the agreements. The following section, Potential Payments
Upon Termination or Change in Control, describes the compensation and benefits payable to the current executive officers upon
termination of their employment for various reasons.
| | |
39 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
The employment agreements prohibit
the executives from disclosing confidential information or trade secrets concerning the Company, and for a period of two years from soliciting
employees of the Company and from soliciting customers or distributors of the Company. The agreements also require the executive officers
to provide limited consulting services on an as-requested basis following termination.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Payments/Benefits
Upon Change in Control
Severance Plan.
We have established a Severance Plan
covering the executive officers. Under the Plan, following an occurrence of a Change of Control as defined in the Severance Plan (see
Other Compensation Elements – Severance Plan in the Compensation Discussion and Analysis section), each of the executive
officers will be entitled to be employed by the Company for a period of three years following the Change of Control, unless terminated
earlier in accordance with the Severance Plan. During this employment period the executive officer will: (i) be paid a minimum base salary
equal to his or her base salary prior to the Change of Control, (ii) be paid a minimum annual bonus equal to the latest target cash incentive
opportunity approved by the Human Resources and Compensation Committee prior to the effective date of the Change of Control (the “Current
Cash Incentive Target”), (iii) continue to receive the employee benefits to which he or she was entitled prior to the Change of
Control, and (iv) receive annually the value (determined as described under Incentive Plan Awards below) of the last LTI
awards issued to him or her prior to the Change of Control, which value may be paid either in cash or in publicly traded stock of the
entity which acquired the Company in the Change of Control.
If we terminate the executive officer’s
employment during this three-year employment period other than for death, disability or Cause as defined in the Severance Plan, or if
the executive officer terminates his or her employment during the employment period following certain specified actions by us (Good Reason),
such as materially failing to comply with the provisions of the Severance Plan, a material diminution in his or her authority, duties
or responsibilities or base salary, or requiring him or her to relocate, he or she will be entitled to receive, among other things, a
cash lump sum equal to the aggregate of (i) any unpaid current base salary, (ii) a bonus equal to the Current Cash Incentive Target, prorated
for a partial year, and (iii) an amount calculated by multiplying two times the sum of the current annual base salary and the Current
Cash Incentive Target. In addition, he or she will receive the continuation of his or her employee benefits for two years.
We may amend the Severance Plan, but
no amendment adverse to the rights of an executive officer will be effective unless we have given the executive officer notice of the
amendment at least one year before a Change of Control occurs.
Long-Term Incentive Plan Awards.
The terms of our PARS, RSU and PSU
awards in effect at September 30, 2023 provide that upon a Change of Control (defined in the awards substantially the same as in the Severance
Plan) the awards will be assumed by the acquirer or successor entity and converted to an equivalent agreement. If for any reason the awards
will not or cannot be assumed, they will be paid out in cash.
Payments/Benefits
Upon Death or Disability
If the executive officer’s employment
were to be terminated because of death or disability, under the executive officer’s employment agreement with the Company the executive
officer (or his or her beneficiaries) would receive benefits under the Company’s disability plan or the Company’s life insurance
plans, as applicable.
With respect to PARS, RSU and PSU awards
in effect at September 30, 2023, the Committee may, in its sole discretion, make full, pro-rata, or no share distributions, as it may
determine, to an executive officer in the event of disability, or to the executive officer’s surviving spouse or beneficiary in
the event of death.
| | |
40 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Payments/Benefits
Upon Termination by the Employee With Good Reason or by the Company Without Cause
The executive officers’ employment
agreements provide that if we were to terminate the executive officer’s employment prior to a Change of Control other than for cause,
death or disability or if the executive officer were to resign following certain actions by us defined in the agreements as “Good
Reason,” including our materially failing to comply with the agreement, materially reducing the executive’s responsibilities
or requiring the executive to relocate, we would be required to continue to pay the executive officer’s base salary and cash incentive
for two years following termination; however, the executive officer could elect to receive each of these payments in a lump sum on or
about March 15 of the calendar year following the calendar year in which the termination occurs. In addition, certain employee benefits
would continue after the termination, the executive officer’s accelerated but unvested PARS, RSU and PSU awards would become fully
vested and the underlying shares would be distributed, subject to and in accordance with the terms of the Omnibus Plan. These payments
and benefits would be conditioned upon the executive officer not soliciting our employees, customers or distributors for a period of two
years after termination. In addition, the executive officer would be required to execute our standard severance agreement and release.
Payments/Benefits
Upon Termination by the Employee Without Good Reason
If the executive officer were to resign
without Good Reason, the executive officer would not be entitled to payment of continued compensation or benefits, and all outstanding
PARS, RSU and PSU awards would be forfeited.
Payments/Benefits
Upon Termination by the Company for Cause
If we were to terminate the executive
officer’s employment for Cause, under the employment agreement the executive officer would not be entitled to payment of continued
compensation or benefits, and all outstanding PARS, RSU and PSU awards would be forfeited.
Incremental
Compensation in the Event of Termination as a Result of Certain Events
The following tables reflect the additional
compensation and benefits to be provided to the executive officers in the event of a termination of employment at, following, or in connection
with a Change of Control or for the other listed reasons. The amounts shown assume that the termination was effective as of the close
of business on September 30, 2023, the end of our last fiscal year. No PSU awards were earned or vested as of September 30, 2023. The
actual amounts to be paid would be determinable only at the time of the actual termination of employment.
| | |
41 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Bryan H. Sayler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
for |
|
|
|
Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
Reason |
|
|
|
by
Employee |
|
|
|
Termination |
|
|
|
|
Change
in |
|
|
|
|
|
|
|
|
|
|
|
or
by Employer |
|
|
|
Without |
|
|
|
by
Employer |
|
Pay
Element |
|
|
Control |
|
|
|
Death |
|
|
|
Disability |
|
|
|
Without
Cause |
|
|
|
Good
Reason |
|
|
|
for
Cause |
|
Cash
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
178,7501 |
|
|
$ |
1,430,0002 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Cash
incentive |
|
|
715,0003 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,145,0004 |
|
|
|
0 |
|
|
|
0 |
|
Severance
payment |
|
|
2,860,0005 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total
Cash Compensation |
|
$ |
3,575,000 |
|
|
$ |
0 |
|
|
$ |
178,750 |
|
|
$ |
3,575,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Long-Term
Equity Incentive Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARS,
RSUs and PSUs |
|
|
2,710,8286 |
|
|
|
0 |
|
|
|
0 |
|
|
|
349,5617 |
|
|
|
0 |
|
|
|
0 |
|
Total
Awards |
|
$ |
2,710,828 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
349,561 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Total
Direct Compensation |
|
$ |
6,285,828 |
|
|
$ |
0 |
|
|
$ |
178,750 |
|
|
$ |
3,924,561 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Benefits:8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broad-based
benefits |
|
$ |
60,582 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
6,738 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Pension
benefits |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Other
executive benefits/perquisites |
|
|
16,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
23,000 |
|
|
|
0 |
|
|
|
0 |
|
Total
Benefits |
|
$ |
76,582 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
29,738 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Total
Incremental Compensation |
|
$ |
6,362,410 |
|
|
$ |
0 |
|
|
$ |
178,750 |
|
|
$ |
3,954,299 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Christopher
L. Tucker
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
for |
|
|
|
Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
Reason |
|
|
|
by
Employee |
|
|
|
Termination |
|
|
|
|
Change
in |
|
|
|
|
|
|
|
|
|
|
|
or
by Employer |
|
|
|
Without
Good |
|
|
|
by
Employer |
|
Pay
Element |
|
|
Control |
|
|
|
Death |
|
|
|
Disability |
|
|
|
Without
Cause |
|
|
|
Reason |
|
|
|
for
Cause |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
142,5001 |
|
|
$ |
1,140,0002 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Cash
incentive |
|
|
373,0003 |
|
|
|
0 |
|
|
|
0 |
|
|
|
1,119,0004 |
|
|
|
0 |
|
|
|
0 |
|
Severance
payment |
|
|
1,886,0005 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total
Cash Compensation |
|
$ |
2,259,000 |
|
|
$ |
0 |
|
|
$ |
142,500 |
|
|
$ |
2,259,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Equity Incentive Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARS,
RSUs and PSUs |
|
|
2,197,0226 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total
Awards |
|
$ |
2,197,022 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Direct Compensation |
|
$ |
4,456,022 |
|
|
$ |
0 |
|
|
$ |
142,500 |
|
|
$ |
2,259,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits:8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broad-based
benefits |
|
$ |
78,207 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
10,431 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Pension
benefits |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Other
executive benefits/perquisites |
|
|
12,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
21,000 |
|
|
|
0 |
|
|
|
0 |
|
Total
Benefits |
|
$ |
90,207 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
31,431 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Incremental Compensation |
|
$ |
4,546,229 |
|
|
$ |
0 |
|
|
$ |
142,500 |
|
|
$ |
2,290,431 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | |
42 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
David
M. Schatz
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
by |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee
for |
|
|
|
Termination |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Good
Reason |
|
|
|
by
Employee |
|
|
|
Termination
by |
|
|
|
|
Change
in |
|
|
|
|
|
|
|
|
|
|
|
or
by Employer |
|
|
|
Without
Good |
|
|
|
Employer
for |
|
Pay
Element |
|
|
Control |
|
|
|
Death |
|
|
|
Disability |
|
|
|
Without
Cause |
|
|
|
Reason |
|
|
|
Cause |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Compensation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
salary |
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
98,5001 |
|
|
$ |
788,0002 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Cash
incentive |
|
|
176,0003 |
|
|
|
0 |
|
|
|
0 |
|
|
|
528,0004 |
|
|
|
0 |
|
|
|
0 |
|
Severance
payment |
|
|
1,140,0005 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Total
Cash Compensation |
|
$ |
1,316,000 |
|
|
$ |
0 |
|
|
$ |
98,500 |
|
|
$ |
1,316,000 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term
Equity Incentive Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PARS,
RSUs and PSUs |
|
|
1,174,1706 |
|
|
|
0 |
|
|
|
0 |
|
|
|
209,7167 |
|
|
|
0 |
|
|
|
0 |
|
Total
Awards |
|
$ |
1,174,170 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
209,716 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Direct Compensation |
|
$ |
2,490,170 |
|
|
$ |
0 |
|
|
$ |
98,500 |
|
|
$ |
1,525,716 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits:8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Broad-based
benefits |
|
$ |
81,014 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
10,431 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Pension
benefits |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Other
executive benefits/ |
|
|
12,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
21,000 |
|
|
|
0 |
|
|
|
0 |
|
perquisites |
|
$ |
93,014 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
31,431 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Total
Benefits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Section
280G Reduction9 |
|
$ |
(149,834) |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
Total
Incremental Compensation After Reduction |
|
$ |
2,433,350 |
|
|
$ |
0 |
|
|
$ |
98,500 |
|
|
$ |
1,557,147 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
Represents three months’ base
salary, which we have the discretion to provide to the executive officers in order to cover the waiting period under our group long-term
disability insurance policy. |
2 |
As calculated under the terms of the
executive officer’s employment agreement. The amount shown represents the annual base salary in effect at September 30, 2023 multiplied
by two. |
3 |
As calculated under the terms of the
Severance Plan. The amount shown is in lieu of any annual cash incentive for fiscal 2023 which would have otherwise been paid except for
the termination. |
4 |
As calculated under the terms of the
executive officer’s employment agreement. |
5 |
As calculated under the terms of the
Severance Plan. |
6 |
Represents the value of shares that
would be distributed upon the occurrence of a change in control and in the event the awards are not assumed by the successor company,
based on the average NYSE closing price of our common stock of $105.743 for the ten trading days preceding and including September 29,
2023, the last trading day of our 2023 fiscal year, pursuant to the Severance Plan and the award agreements. These amounts would become
payable to the executive officer even if the officer’s employment were not terminated in connection with the change in control.
See Payments/Benefits Upon Change in Control – Long-Term Incentive Plan Awards on page
40. |
7 |
The amounts shown represent the value
of share awards whose payment has been accelerated and which would vest upon termination in this situation pursuant to the named officer’s
employment agreement and based on the NYSE closing price our common stock of $104.44 on September 29, 2023. |
8 |
The amounts shown represent the projected
cost to continue benefits in accordance with the executive officer’s employment agreement and the provisions of the Severance Plan.
Included in Total Benefits are broad-based benefits (health insurance, life and disability premiums) and financial planning. In the case
of “Termination by Employee for Good Reason or by Employer Without Cause,” Total Benefits also include an estimated outplacement
fee of $15,000. |
| | |
43 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
9 |
Under
Internal Revenue Code Section 280G, certain payments made to an executive officer in the event of a Change in Control are subject to a
“golden parachute” excise tax under Code section 4999. The Severance Plan provides that if any compensation paid to the executive
officer upon a Change in Control causes this excise tax to be imposed, the compensation would be
reduced if and to the extent that the reduction would create a more favorable net-after-tax benefit to the executive officer. Based on
the calculations prescribed under section 280G as applied to the amounts shown in the table, the executive officer would be subject to
this excise tax in the event of a Change in Control, and therefore the officer’s compensation would be reduced by the amount shown. |
PAY RATIO DISCLOSURE
CEO Pay Ratio
Pursuant to Section 953(b) of the Dodd-Frank Wall Street
Reform and Consumer Protection Act and the implementing regulations of the SEC, we are providing the following information about the relationship
between the total annual compensation of our CEO, Mr. Sayler, and the median total annual compensation of our employees.
As reported in the Summary Compensation Table on page
34, Mr. Sayler’s 2023 total annual compensation was $3,647,641, but because Mr. Sayler was not the CEO for the full
fiscal year, we annualized his compensation for purposes of determining the 2023 pay ratio. Mr. Sayler’s annualized compensation
was $3,580,641. Mr. Sayler’s annualized compensation as CEO is less than that reported in the Summary Compensation Table because
the percentage PCP payout for Corporate was considerably less than for the subsidiary in which Mr. Sayler worked for the first quarter
of 2023 and which accounted for 25% of his combined PCP payout. The 2023 median total annual compensation of all of our employees who
were employed as of August 1, 2023 (the Determination Date), other than Mr. Sayler, was $70,141, resulting in a pay ratio of 51:1.
Calculation Methodology
As of the Determination Date, our total worldwide employee
population consisted of 3,218 employees, excluding the CEO. This included all full-time, part-time and temporary employees as well as
employees on leaves of absence. Although the SEC regulations permit companies to exclude a limited number of non-U.S. employees, we did
not use this exclusion.
The SEC regulations require the identification of the
median compensated employee using a “Consistently Applied Compensation Measure” (CACM). The CACM used consisted of base salary
or wages, overtime, target bonus and commissions as of the Determination Date. This compensation was annualized to cover the full 2023
fiscal year, as was the compensation of new hires. For international employees, their compensation was converted to U.S. dollars using
the applicable foreign exchange rate as of the Determination Date.
After identifying the median compensated employee,
that employee’s total annual compensation was calculated consistent with the methodology used for determining the CEO’s total
annual compensation for the Summary Compensation Table.
The pay ratio reported above is our reasonable estimate
calculated in a manner consistent with SEC regulations and the methodology described above. However, the SEC rules for identifying the
median compensated employee and calculating the pay ratio allow companies to adopt a variety of methodologies, to apply exclusions, and
to make reasonable estimates and assumptions that reflect their compensation practices and employee populations. Other companies may calculate
their pay ratio using a methodology or estimates and assumptions which differ from those we used. Therefore, the pay ratio reported above
may not be comparable to the pay ratio reported by other companies, including those in our peer group.
| | |
44 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
PAY
VERSUS PERFORMANCE
Overview
In accordance with the “Pay
Versus Performance” rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are providing
the following information about the relationship between compensation actually paid to our executive officers and certain Company financial
performance metrics for the fiscal years listed below using a methodology that has been prescribed by the SEC.
| | | | | | | | | | | | | | | | | | | | Value of Initial Fixed | | | | | | |
| | | | | | | | | | | | | | | | | | | | $100 Investment | | | | | | |
| | | | | | | | | | | | | | | | | | | | Based On: | | | | | | |
| | | | | | | | | | | | | | Average | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Summary | | | Average | | | | | | | | | | | | Adjusted | |
| | Summary | | | Summary | | | | | | Compensation | | | Compensation | | | Compensation | | | Total | | | | | | | | | Earnings | |
| | Compensation | | | Compensation | | | Compensation | | | Actually Paid | | | Table Total | | | Actually Paid | | | Shareholder | | | Peer | | | | | | per Share | |
Fiscal | | Table Total for | | | Table Total for | | | Actually Paid | | | to Second | | | for Non-PEO | | | to Non-PEO | | | Return | | | Group | | | Company Net | | | (Adjusted | |
Year | | First PEO1 | | | Second PEO2 | | | to First PEO1,4 | | | PEO2,4 | | | NEOs3 | | | NEOs3,4 | | | (TSR) | | | TSR5 | | | Income | | | EPS)6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
2023 | | $ | 3,647,641 | | | $ | 2,677,153 | | | $ | 4,225,234 | | | $ | 2,306,171 | | | $ | 1,434,053 | | | $ | 1,862,816 | | | $ | 130.97 | | | $ | 164.32 | | | $ | 92,545,000 | | | $ | 3.70 | |
2022 | | N/A | | | $ | 5,452,715 | | | N/A | | | $ | 5,361,519 | | | $ | 1,428,876 | | | $ | 1,405,968 | | | $ | 91.77 | | | $ | 126.99 | | | $ | 82,320,000 | | | $ | 3.21 | |
2021 | | N/A | | | $ | 4,161,742 | | | N/A | | | $ | 3,230,464 | | | $ | 1,039,962 | | | $ | 1,215,051 | | | $ | 95.91 | | | $ | 146.65 | | | $ | 63,496,000 | | | $ | 2.59 | |
1 | Bryan H. Sayler has served as the Company’s PEO (Principal Executive Officer) since the second quarter of fiscal 2023. |
2 |
Victor L. Richey served as the Company’s
PEO during fiscal 2021, fiscal 2022 and the first quarter of fiscal 2023. |
3 |
The Company’s non-PEO executive officers for fiscal
2022 and 2023 were Christopher L. Tucker, Senior VP & CFO, and David M. Schatz, Senior VP, General Counsel & Secretary. In fiscal
2021, Mr. Tucker succeeded Gary E. Muenster as an executive officer, and Mr. Schatz succeeded Alyson S. Barclay as an executive officer.
Accordingly, there were two persons serving as executive officers at all times during these years. |
4 | The following amounts were deducted from or added to Summary Compensation Table total compensation in accordance with the SEC-mandated adjustments to calculate Compensation Actually Paid to our principal executive officer (PEO) and the average Compensation Actually Paid to our non-PEO executive officers. The fair value of equity awards was determined using methodologies and assumptions developed in a manner substantively consistent with those used to determine the grant date fair value of such awards. In calculating the year-end fair values of equity awards, the assumptions made did not differ materially from the assumptions made in calculating the grant date fair values of such awards. |
| | |
45 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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Adjustments to Determine Compensation
Actually Paid to Current CEO (PEO 1)
Current CEO | 2021 | 2022 | 2023 |
SCT Total Compensation | | | $3,647,641 |
Less Equity Award Values Reported in SCT | | | ($1,492,717) |
Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | | | $1,700,271 |
Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | | | $325,125 |
Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | | | $0 |
Plus Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | | | $44,914 |
Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | | | $0 |
Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | | | $0 |
Compensation Actually Paid (CAP) | | | $4,225,234 |
Adjustments to Determine Compensation
Actually Paid to Former CEO (PEO 2)
Former CEO | 2021 | 2022 | 2023 |
SCT Total Compensation | $4,161,742 | $5,452,715 | $2,677,153 |
Less Equity Award Values Reported in SCT | ($2,462,845) | ($2,963,694) | ($1,499,967) |
Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | $1,714,174 | $2,813,301 | $0 |
Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | ($182,607) | ($159,075) | $338,042 |
Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $0 | $0 | $1,786,685 |
Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $0 | $218,272 | $1,015,817 |
Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $0 | $0 | ($2,011,558) |
Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | $0 | $0 | $0 |
Compensation Actually Paid (CAP) | $3,230,464 | $5,361,519 | $ 2,306,171 |
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46 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Adjustments to Determine Compensation
Actually Paid to Non-PEO NEOs
Average Compensation | 2021 | 2022 | 2023 |
SCT Total Compensation | $1,039,962 | $1,428,876 | $1,434,053 |
Less Equity Award Values Reported in SCT | ($257,270) | ($543,430) | ($576,795) |
Plus Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards Granted in Fiscal Year | $179,064 | $517,034 | $645,518 |
Change in Fair Value of Outstanding and Unvested Stock Awards Granted in Prior Fiscal Years | ($23,168) | ($15,413) | $332,101 |
Plus Fair Value at Vesting of Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $0 | $0 | $0 |
Plus Change in Fair Value as of Vesting Date of Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $276,464 | $18,900 | $27,940 |
Less Fair Value as of Prior Fiscal Year-End of Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | $0 | $0 | $0 |
Plus Dividends or Other Earnings Paid on Stock Awards in the Fiscal Year Prior to the Vesting Date that are not otherwise included in the Total Compensation for the Fiscal Year | $0 | $0 | $0 |
Compensation Actually Paid (CAP) | $1,215,051 | $1,405,968 | $1,862,816 |
5 | The Peer Group TSR set forth in this table utilizes the S&P SmallCap 600 Industrials Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended September 30, 2023. The comparison assumes $100 was invested for the period starting September 30, 2020 through September 30, 2023 in the Company and in the S&P SmallCap 600 Industrials Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
6 | We determined Adjusted EPS to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and the other executive officers in 2023. Fiscal 2023 Adjusted EPS of $3.70 equaled GAAP diluted EPS of $3.58 excluding $0.12 per share of after-tax charges consisting of executive management transition costs, acquisition inventory step-up charges, restructuring charges, and acquisition related costs. See the Compensation Discussion and Analysis section of this Proxy Statement. This performance measure may not have been the most important financial performance measure for fiscal years 2022 and 2021 and we may determine a different financial performance measure to be the most important financial performance measure in future years. |
| | |
47 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Pay Versus Performance Relationships
CAP vs. Net Income (Loss)
CAP
vs. Adjusted EPS
CAP
vs. TSR
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48 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Tabular List of Most Important
Financial Performance Measures
The following table presents the financial performance measures that the
Company considers to have been the most important in linking 2023 Compensation Actually Paid to our PEO and the non-PEO NEOs to Company
performance, due to their use in the PCP and the PSU awards. More information about each of these measures, including why the Company
uses these measures and how they are calculated with respect to applicable compensation plans, is included in the Compensation Discussion
and Analysis section of this Proxy Statement. The measures in this table are not ranked.
| Adjusted EPS | |
| Cash Flow from Operating Activities | |
| EBITDA | |
| Return on Invested Capital (ROIC) | |
| Total Shareholder Return (TSR) | |
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49 | Proposal 2 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Proposal 3: Ratification of Appointment of Independent
Registered Public Accounting Firm
The Board of Directors recommends a vote FOR this
Proposal.
The Audit Committee has appointed Grant Thornton LLP
(Grant Thornton), an independent registered public accounting firm, as our independent public accounting firm for the fiscal year ending
September 30, 2023.
Although we are not required to submit the appointment
of Grant Thornton to a vote of the shareholders, our Board of Directors believes it is appropriate to request that the shareholders ratify
the appointment. If the shareholders do not ratify this appointment by a majority of shares voting at the meeting, the Committee will
investigate the reasons for the rejection and will reconsider the appointment. A representative of Grant Thornton is expected to be present
at the Meeting and will have the opportunity to make a statement if they desire to do so and be available to respond to appropriate questions
from shareholders.
We first retained Grant Thornton in late 2021 to audit
our consolidated financial statements for fiscal 2022. Information about the fiscal 2022 audit, the Committee’s policies relating
to the approval of audit and permitted non-audit services performed by Grant Thornton, and the fees we paid to Grant Thornton for fiscal
2022, are set forth in the sections below.
Prior to fiscal 2022, our independent public accounting
firm was KPMG LLP or its predecessor firms (KPMG), and KPMG audited our consolidated financial statements for fiscal 2021. Information
about the change in our independent public accounting firm and the fees we paid to KPMG for fiscal 2021 are set forth below.
PRE-APPROVAL OF AUDIT
AND PERMITTED NON-AUDIT SERVICES
The Audit Committee has adopted pre-approval policies
and procedures requiring the Committee to pre approve all audit and permitted non-audit services to be provided by our independent registered
public accounting firm. In accordance with this policy, the Committee has pre-approved and has set specific quarterly limitations on fees
for the following categories of services: general accounting and SEC consultation, compliance with pertinent legislation, general taxation
matters and tax returns. Services which have not received specific pre-approval by the Committee must receive such approval prior to the
rendering of the services.
AUDITOR FEES AND SERVICES
We have incurred the following fees to Grant Thornton,
our independent registered public accounting firm for fiscal 2023 and fiscal 2022, for services rendered for each of those years, respectively.
All of these fees were pre approved by the Audit Committee.
Fee
Category |
2023 |
2022 |
Audit
Fees1 |
$1,400,000 |
$1,190,000 |
Audit-Related
Fees2 |
0 |
0 |
Tax
Fees3 |
0 |
0 |
All
Other Fees4 |
$119,899 |
$73,089 |
Total |
$1,519,899 |
$1,263,089 |
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50 | Proposal 3 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
1 |
Audit Fees primarily represent amounts
paid for the audit of our Consolidated Financial Statements included in our Annual Report to Shareholders, reviews of the quarterly financial
statements included in our SEC Forms 10-Q, the performance of statutory audits for certain of our foreign subsidiaries, and services that
are normally provided in connection with statutory and regulatory filings for those fiscal years, including expressing an opinion on our
internal control over financial reporting. |
2 |
Audit-Related Fees represent amounts
paid for assurance and related services that are reasonably related to the performance of the audit or review of financial statements
and which are not included in Audit Fees above. |
3 |
Tax Fees represent amounts paid for
tax compliance, tax advice and tax planning services. |
4 |
All Other Fees includes amounts paid
for out-of-pocket expenses in connection with the audit. |
CHANGE IN INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR 2022
In November 2021, the Audit Committee appointed Grant
Thornton as our independent public accounting firm for the fiscal year ending September 30, 2022, replacing KPMG, which audited our consolidated
financial statements for fiscal 2021.
On November 18, 2021, we notified KPMG that it was
being dismissed as our independent registered public accounting firm, effective upon completion of KPMG’s audit of our fiscal 2021
financial statements and the effectiveness of our internal controls over financial reporting as of September 30, 2021. KPMG’s audit
was completed on November 29, 2021. The decision to dismiss KPMG and retain Grant Thornton was at the direction of and approved by the
Audit Committee after a competitive proposal process.
KPMG’s reports on the consolidated financial
statements of the Company and its subsidiaries as of and for the fiscal years ended September 30, 2021 and 2020 did not contain an adverse
opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, however,
KPMG’s report as of and for the fiscal year ended September 30, 2020 dated November 30, 2020, contained the below separate paragraph:
“As discussed in Note 1
of the consolidated financial statements, the Company has changed its method of accounting for leases as of October 1, 2019 due to the
adoption of ASU No. 2016-062, Leases (ASC Topic 842) and method of accounting for revenue contracts with customers as of October 1, 2018
due to the adoption of ASU No. 2014-09, Revenue with Contracts with Customers (ASC Topic 606).”
KPMG’s reports on the effectiveness
of internal control over financial reporting of the Company and its subsidiaries as of September 30, 2021 and 2020 did not contain any
adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles,
except that KPMG’s report as of and for the fiscal year ended September 30, 2021 dated November 29, 2021, indicates that:
|
● |
The Company did not maintain effective
internal control over financial reporting as of September 30, 2021 because of the effect of a material weakness on the achievement of
the objectives of the control criteria and contains an explanatory paragraph that states that a material weakness related to an ineffective
risk assessment process resulted in the ineffective design of certain controls over revenue recognition, and the accumulation of inventory
costs and the determination of inventory carrying values at a reporting unit has been identified and included in management’s assessment. |
|
● |
The Company acquired I.S.A.–Altanova
Group (Altanova) on July 29, 2021, and the assets of Phenix Technologies (Phenix) on August 9, 2021, and management excluded from its
assessment of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2021, Altanova’s
and Phenix’s internal control over financial reporting associated with total assets representing 12.2 percent of consolidated assets,
and total sales representing 0.6 percent of consolidated net sales, included in the consolidated financial statements of ESCO Technologies
Inc. and subsidiaries as of and for the year ended September 30, 2021. KPMG’s audit of internal control over financial reporting
of the Company also excluded an evaluation of the internal control over financial reporting of Altanova and Phenix. |
During the Company’s fiscal years ended September
30, 2020 and 2021 and the subsequent interim period through November 29, 2021, there were (i) no disagreements between the Company and
KPMG within the meaning of Item 304(a) (1)(iv) of Regulation S-K and the related instructions on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure which, if not resolved to KPMG’s satisfaction, would have
caused it to make reference to the subject matter of the disagreement in connection with its report; and (ii) no “reportable events”
within the meaning of Item 304(a)(1)(v) of Regulation S-K with the exception of the material weakness described above.
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51 | Proposal 3 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
During the Company’s fiscal
years ended September 30, 2020 and 2021 and the subsequent interim period through November 29, 2021, neither the Company nor anyone acting
on its behalf consulted with Grant Thornton with respect to either (i) the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be rendered on the consolidated financial statements of the Company
and its subsidiaries, and no written report or oral advice was provided by Grant Thornton to the Company that Grant Thornton concluded
was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue,
or (ii) any matter that was the subject of either a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S K) or a reportable
event (as described in Item 304(a)(1)(v) of Regulation S-K).
AUDIT
AND FINANCE COMMITTEE REPORT
The
Audit and Finance Committee oversees and monitors the Company’s financial reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial statements and the reporting process, including the Company’s system
of internal controls. In fulfilling its oversight responsibilities, the Committee reviewed and discussed with management the audited financial
statements to be included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023, including a discussion
of the quality and the acceptability of the Company’s financial reporting practices and the internal controls over financial reporting.
The
Committee reviewed with Grant Thornton LLP, the independent registered public accounting firm which is responsible for expressing opinions
on the conformity of those audited financial statements with accounting principles generally accepted in the United States of America
and on the Company’s internal control over financial reporting, its judgments as to the quality and the acceptability of the Company’s
financial reporting and such other matters as are required to be discussed with the Committee under auditing standards generally accepted
in the United States of America. In addition, the Committee discussed with Grant Thornton its independence from management and the Company,
including the impact of any non-audit-related services provided to the Company, the matters in that firm’s written disclosures and
the letter from Grant Thornton to the Committee pursuant to the applicable requirements of the Public Company Accounting Oversight Board
(PCAOB) and the SEC regarding the independent accountants’ communications with the Audit Committee concerning independence, and
the other matters required by the PCAOB’s Auditing Standards.
Further,
the Committee discussed with both Grant Thornton and RubinBrown LLP, the Company’s internal audit firm, the overall scope and plans
for their respective fiscal 2023 audits. The Committee meets periodically with representatives of Grant Thornton and RubinBrown, with
and without management present, to discuss the results of their respective examinations, their respective evaluations of the Company’s
internal controls (including internal controls over financial reporting), and the overall quality of the Company’s financial reporting.
In reliance
on the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the audited financial statements
be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the Securities and
Exchange Commission.
The
Committee also appointed Grant Thornton as the Company’s independent registered public accounting firm for fiscal 2024.
The
Audit and Finance Committee
● Patrick
M. Dewar, Chair
● Janice
L. Hess
● Vinod
M. Khilnani
● James
M. Stolze
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52 | Proposal 3 | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Other Information
SECURITIES OWNERSHIP OF
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information
with respect to the number of shares beneficially owned by our directors and executive officers as of December 1, 2023, the record date
for the Meeting. For purposes of this table and the following table, the “beneficial ownership” of shares means the power,
either alone or shared with one or more other persons, to vote or direct the voting of the shares, and/or to dispose of or direct the
disposition of the shares, and includes any shares with respect to which the named person had the right to acquire beneficial ownership
within the next 60 days. Unless otherwise noted, each person had the sole voting and dispositive power over the shares listed.
Name
of Beneficial Owner |
Number
of Shares Beneficially Owned |
Percent
of Outstanding Shares1 |
Patrick
M. Dewar |
18,3692 |
3 |
Janice
L. Hess |
4,9392 |
3 |
Vinod
M. Khilnani |
25,9462 |
3 |
Leon
J. Olivier |
35,5232 |
3 |
Robert
J. Phillippy |
27,4452 |
3 |
Bryan
H. Sayler |
14,7694 |
3 |
David
M. Schatz |
18,1834 |
3 |
James
M. Stolze |
45,4442 |
3 |
Christopher
L. Tucker |
4,0894 |
3 |
Gloria
L. Valdez |
9,7292 |
3 |
All
directors and executive officers as a group (10 persons) |
204,436 |
0.8% |
1 |
Based on 25,805,172 shares outstanding
as of December 1, 2023, the record date for the Meeting. |
2 |
Includes approximately 18,369, 4,939,
1,809, 34,623, 20,773, 20,908,and 9,729 common stock equivalents credited to the deferred compensation accounts of Mr. Dewar, Ms. Hess,
Mr. Khilnani, Mr. Olivier, Mr. Phillippy, Mr. Stolze and Ms. Valdez, respectively, under the Compensation Plan for Non Employee Directors.
See Director Compensation beginning on page
17. Stock equivalents have been rounded to the nearest whole share. |
4 |
Includes shares held in our Employee
Stock Purchase Plan. Does not include 19,503, 16,527 and 6,989 unvested RSU award units held by Mr. Sayler, Mr. Schatz and Mr. Tucker,
respectively, and a currently indeterminate number of shares issuable upon vesting of PSUs held by the executive officers, as described
under Long-Term Equity Incentive Compensation on page
29. |
SECURITIES OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information
with respect to each person known by us as of the dates set forth in the footnotes below to be deemed, pursuant to applicable SEC regulations,
to beneficially own more than five percent of our outstanding shares. For this purpose, beneficial ownership of shares is determined in
accordance with SEC Rule 13d-3 and includes sole or shared voting and/or dispositive power with respect to such shares.
| | |
53 | Other Information | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Name
and Address of Beneficial Owner |
Number
of Shares Beneficially Owned |
Percent
of Outstanding Shares1 |
BlackRock,
Inc |
3,890,4602 |
15.1% |
50
Hudson Yards, New York, NY 10001 |
|
|
Vanguard
Group, Inc. |
2,880,1733 |
11.2% |
PO
Box 2600, V26, Valley Forge, PA 19482 |
|
|
T.
Rowe Price Investment Management, Inc. |
1,820,8694 |
7.1% |
100
East Pratt Street, Baltimore, MD 21202 |
|
|
Dimensional
Fund Advisors, LP |
1,376,1185 |
5.3% |
6300
Bee Cave Road, Building One, Austin, TX 78746 |
|
|
1 |
Based on 25,805,172 shares outstanding as of December 1, 2023,
the record date for the Meeting. |
|
|
2 |
Based on information contained in a Form 13F filed with the
SEC on November 13, 2023 by BlackRock Inc., which reported that as of September 30, 2023 it and its affiliated investment management companies
had sole dispositive power over 3,890,124 of these shares and sole voting power over 3,837,142 of these shares. Although BlackRock Inc.
states that it is the parent holding company of certain institutional investment managers and that it does not itself exercise and therefore
disclaims investment discretion over any securities positions over which its investment operating subsidiaries exercise such discretion,
for purposes of this Proxy Statement it is deemed to be a beneficial owner of these shares. |
|
|
3 |
Based on information contained in a Form 13F filed with the
SEC on November 14, 2023 by Vanguard Group, Inc., which reported that as of September 30, 2023 it and its affiliated investment management
companies had sole dispositive power over 2,821,594 of these shares, shared dispositive power over 58,579 of these shares, and shared
voting power over 34,472 of these shares. For purposes of this Proxy Statement it is deemed to be a beneficial owner of these shares. |
|
|
4 |
Based on information contained in a Form 13F filed with the
SEC on November 14, 2023 by T. Rowe Price Investment Management, Inc., which reported that as of September 30, 2023 it had sole dispositive
power over these shares and sole voting power over 784,589 of these shares. TRP has previously advised the Company that its reported shares
are owned by various individual and institutional investors for which TRP serves as investment adviser with power to direct investments
and/or power to vote the shares and has expressly disclaimed that it is in fact the beneficial owner of any of these shares, but has acknowledged
that for the purposes of this Proxy Statement it is deemed to be a beneficial owner of these shares. |
|
|
5 |
Based on information contained in a Form 13F filed with the
SEC on November 9, 2023 by Dimensional Fund Advisors, LP, which reported that as of September 30, 2023 it and its affiliated investment
management companies had sole dispositive power over 1,321,003 of these shares, shared dispositive power over 55,115 of these shares,
sole voting power over 1,295,963 of these shares, and shared voting power over 53,949 of these shares. Although Dimensional Fund Advisors
has previously notified the Company that it expressly disclaims beneficial ownership of any of these shares, for purposes of this Proxy
Statement it is deemed to be a beneficial owner of these shares. |
SHAREHOLDER
PROPOSALS
SEC Rule 14a-19 provides, among other things, that a shareholder
desiring to solicit proxies in support of one or more director nominees not nominated by the Company must provide notice of such intent
containing the information required by the Rule and postmarked or transmitted electronically to the Company at its principal executive
office no later than 60 calendar days prior to the anniversary of the previous year’s Annual Meeting; for the Company’s 2025
Annual Meeting this deadline will be December 9, 2024.
The Company’s Articles of Incorporation require that in order for
a shareholder of the Company to formally nominate an individual for election as a director or propose other business at an annual meeting
of shareholders, written notice of the nomination or proposal must be given to the Company not less than 60 nor more than 90 days before
the meeting; provided that if the Company gives less than 50 days’ notice or prior public disclosure of the date of the meeting,
then the shareholder must give such notice not later than ten days after notice of the meeting is mailed or other public disclosure of
the meeting is made, whichever occurs first. We intend to give public notice of the date of our 2025 Annual Meeting in connection with
the release of our financial results for fiscal 2024, which we expect will occur in mid-November of 2024.
| | |
54 | Other Information | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
The required advance notice must include certain additional information regarding
both the proponent and any prospective nominee useful to the Company in evaluating and responding to the nomination or proposal, and as
to proposals other than nominations, a full description of the proposal, including its text, and a description of any agreements or arrangements
between the proponent and any other person in connection with the proposal, all as specified in detail in the Company’s Articles
of Incorporation and Bylaws. Any prospective director nominees must also complete a questionnaire regarding the background and qualifications
of the proposed nominee and any person or entity on whose behalf the nomination is being made, and must represent in writing that the
proposed nominee is not, and will not become, a party to any undisclosed voting commitments or compensation arrangements with respect
to service as a director, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality
and stock ownership and stock trading policies and guidelines of the Company.
The Board may reject any nominations
or proposals that are not made in accordance with these procedures or that are not a proper subject for shareholder action in accordance
with the provisions of applicable law. The foregoing time limits also apply in determining whether notice is timely for purposes of rules
adopted by the SEC relating to the exercise of discretionary voting authority.
The above requirements are in addition
to, and are separate from, the requirements of SEC Rule 14a-8 relating to the rights of shareholders to request inclusion of proposals
in, or of the Company to omit proposals from, the Company’s proxy statement. However, solely with respect to a proposal, other than
the nomination of directors, that a shareholder proposes to bring before an annual meeting of shareholders, the notice requirements set
forth in the Company’s Articles of Incorporation and Bylaws will be deemed satisfied by the shareholder if the shareholder has submitted
the proposal to the Company in compliance with Rule 14a-8 and the proposal has been included in the Company’s proxy statement for
the meeting.
Proposals of shareholders intended
to be presented at the 2025 Annual Meeting must be received by the Company not later than August 21, 2024 (120 calendar days before the
anniversary of the first mailing of these proxy materials), if the proponent wishes to have them included in the Company’s proxy
statement and form of proxy relating to that meeting pursuant to SEC Rule 14a-8. Upon receipt of any such proposal, the Company will determine
whether or not to include such proposal in the proxy statement and form of proxy in accordance with SEC regulations governing the solicitation
of proxies.
In each case, the notice required to
be given to the Company must be directed to the Secretary of the Company, whose address is 9900A Clayton Road, St. Louis, MO 63124-1186.
Any shareholder desiring a copy of the Company’s Articles of Incorporation or Bylaws will be furnished one without charge upon written
request to the Secretary.
Shareholders may also recommend director candidates
to the Governance Committee for consideration as described under Governance Committee on page
14.
FORWARD-LOOKING
STATEMENTS
Statements contained in this Proxy Statement regarding future events
that reflect or are based on current expectations, estimates, forecasts, projections or assumptions about the Company’s management,
performance and intentions are considered “forward-looking statements” within the meaning of the safe harbor provisions of
the Federal securities laws. These may include, but are not necessarily limited to, statements about proposed or potential future actions,
compensation or benefits under the Company’s compensation plans, incentive plans, employee benefit plans or awards, employment,
compensation or severance agreements, proposed or anticipated Board or management actions, policies and programs, future meeting or information
release dates, and any other statements contained herein which are not strictly historical. Words such as expects, anticipates, targets,
goals, projects, intends, plans, believes, variations of such words, and similar expressions are intended to identify such forward-looking
statements. Investors are cautioned that such statements are only predictions and speak only as of the date of this Proxy Statement, and
the Company undertakes no duty to update them except as may be required by applicable laws or regulations. The Company’s actual
results and actions in the future may differ materially from those described in the forward-looking statements due to risks and uncertainties
that exist in the Company’s operations and business environment, including but not limited to those described in Item 1A, “Risk
Factors,” of the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.
| | |
55 | Other Information | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Appendix A
PARTICIPANTS
IN THE 2022 MERCER BENCHMARK DATABASE/TOTAL REMUNERATION SURVEY — EXECUTIVE
(See Compensation Consultant and Benchmarking
on page 24)
24
Hour Fitness
3M
Company
7-Eleven,
Inc.
777
Partners LLC
A.
O. Smith Corporation
AAA
Auto Club Group
AAA
Northern California, Nevada and Utah
ABB
Abbott
Laboratories
Abbott
Laboratories - Nutrition
AbbVie,
Inc.
Abt
Associates
Accenture,
Inc.
ACCO
Engineered Systems
AccorHotels
NA
ACH
Food Companies, Inc.
ACTEGA
North America
Acumed
Acushnet
Holdings Corporation
Adidas
America, Inc.
ADT,
LLC
Adtalem
Global Education, Inc.
Advance
Auto Parts, Inc.
Advanced
Airfoil Components LLC
AdvanSix,
Inc.
Adventist
Health
ADVICS
North America, Inc.
Advisor
Group, Inc.
Aecon
Construction Group
Aero
Snow Holdings
AeroData
Aerojet
Rocketdyne Holdings, Inc.
Aflac,
Inc.
AFP
AGC
Biologics
Agero,
Inc.
AgFirst
Farm Credit Bank
Agilent
Technologies, Inc.
AGP
GLASS USA
Agropur,
Inc. |
AgustaWestland
Philadelphia Corporation
Ahold
Delhaize - Ahold Delhaize USA, LLC
Ahold
Delhaize - Delhaize America Supply Chain Services
Ahold
Delhaize - Food Lion, LLC
Ahold
Delhaize - Giant of Maryland, LLC
Ahold
Delhaize - Hannaford Bros. Co., LLC
Ahold
Delhaize - Peapod Digital Labs, LLC
Ahold
Delhaize - Retail Business Services, LLC
Ahold
Delhaize - Stop & Shop Supermarket Company, LLC
Ahold
Delhaize - The GIANT Company, LLC
AIPSO
Air
Methods Corporation
AIT
Worldwide Logistics Inc.
Akima,
LLC
Akzo
Nobel Coatings Inc.
Akzo
Nobel Services Inc.
Al
Fakher Distribution USA, Inc.
Alabama
Farmers Cooperative
Alaska
Airlines, Inc.
Alcon
Aldo
(US)
AlEn
USA, LLC
Alex
Lee, Inc.
Alex
Lee, Inc. - Merchants Distributors, LLC
Alfasigma
USA, Inc.
Allegis
Group
Alliance
Data Systems Corporation
AllianceRx
Walgreens Prime
Alliant
Energy Corporation
Allianz
Global Corporate & Specialty
Allied
Solutions LLC
Allina
Health System
Allina
Health System - Mercy Hospital |
Allina
Health System - St. Francis Regional Medical Center
Allina
Health System - United Hospital
Allison
Transmission Holdings, Inc.
Allnex
USA, Inc.
AlloSource
Allot
Ltd
Ally
Financial, Inc.
Alnylam
Pharmaceuticals, Inc.
Alorica
Alstom
Signaling, Inc.
Alstom
Transportation Holding
Alstom
Transportation, Inc.
Alterra
Mountain Company
Alticor
- Amway
Altra
Industrial Motion Corp.
Altria
Group, Inc.
Altus
Group US Inc.
Alyeska
Pipeline Service Company
Am-Pat,
Inc. (Boot Barn)
Amazon.com,
Inc.
AMBU
Amcor
Flexibles North America
Amedisys,
Inc.
Amentum
- Nuclear Waste Partnership
American
Academy of Family Physicians
American
Airlines Group, Inc.
American
Axle & Manufacturing
American
Bureau of Shipping
American
Century Investments
American
Chemical Society
American
Enterprise Group, Inc.
American
Family Insurance
American
Financial Group, Inc.
American
Financial Group, Inc. - ABA Insurance Services
American
Financial Group, Inc. - Great American Insurance Group |
American
Financial Group, Inc. - Mid-Continent Casualty Company
American
Financial Group, Inc. - National Interstate
American
Financial Group, Inc. - Republic Indemnity
American
Financial Group, Inc. - Summit Holdings Southeast, Inc.
American
Financial Group, Inc. - Vanliner
American
International Group, Inc.
American
Medical Association
American
National Insurance
American
Regent, Inc.
American
Transmission Company
Americas
Building Products
Americas
Materials (AMAT)
Ameridrives
AmeriHealth
Caritas Family of Companies
Ameriprise
Financial, Inc.
AmerisourceBergen
Corporation
Amerisure
Mutual Insurance Company
Ameritas
Life Insurance Corp.
Amgen
Amica
Mutual Insurance Company
Amneal
Pharmaceuticals, Inc.
AMPAC
Fine Chemicals, LLC
Amplifon
Amplity,
Inc.
Amrock,
Inc.
Amy’s
Kitchen
Anchor
Glass Container Corporation
Andersen
Corporation
Andersen
Corporation - Andersen Windows, Inc.
AngloGold
Ashanti North America Inc.
Ann
& Robert H. Lurie Children’s Hospital of Chicago
Ansell
Healthcare Products, LLC |
| | |
56 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Anthem,
Inc.
Anuvu
Operations
Apartment
Income REIT
Apergy
USA, Inc.
Apergy
USA, Inc. (Digital Corp.)
Apex
Tool Group
APM
Terminals
Apotex
Corp.
Appareo
Systems LLC
AppHarvest,
Inc.
Apple
Bank for Savings
Apple
Leisure Group
Aquity
Solutions
ARAMARK
Corporation
Aramsco,
Inc.
ARB
Midstream
Arc
International US
Arc’teryx
Equipment
ArcBest
Arch
Capital Services, Inc.
Arch
Insurance Group, Inc.
Arch
Reinsurance Company
Arch
Resources, Inc.
Arch
US Mortgage Services, Inc.
Archrock,
Inc.
Arctic
Slope Regional Corporation - ASRC Federal Holding Company
Arctic
Wolf Networks Inc.
Arete
Associates
Argo
Group US
Argonne
National Laboratory
ARGOS
USA LLC
Ariston
Arizona
State University
Arkansas
Children’s
Arkansas
Children’s Hospital
Arlington
County Government
Armanino
LLP
Armstrong
Group
Arrive
Logistics
Arrow
Electronics, Inc.
Arrowhead
Engineered Products
Artera
Services
Arthrex,
Inc.
Arthur
J. Gallagher & Co.
Artic
Cool Chillers Limited
Artivion,
Inc.
Ascensia
Ascension
- Borgess - MI
Ascension
- Columbia/St Mary’s - WI |
Ascension
- Genesys - MI
Ascension
- IN
Ascension
- MI
Ascension
- Our Lady of Lourdes Memorial Hospital
Ascension
- Providence - Rochester - MI
Ascension
- Providence Hospital - Mobile
Ascension
- Sacred Heart Health System - FL
Ascension
- Seton Family of Hospitals
Ascension
- St John Hospital - MI
Ascension
- St Thomas Health - TN
Ascension
- St. Agnes
Healthcare,
Inc. - MD
Ascension
- St. Johns - OK
Ascension
- St. Mary’s - MI
Ascension
- St. Vincent’s Health System - AL
Ascension
- St. Vincent’s Health System - FL
Ascension
- Wheaton Franciscan Healthcare
Ascension
Health
Ascension
Macomb - Oakland Hospital, Warren Campus
Ascent
Brands
Ascent
Resources Management Services, LLC
ASCO
Sandusky
ASICS
America Corporation
Aspen
Technology Inc.
Aspire
Bakeries, LLC
ASSA
ABLOY Sales and Marketing Group, Inc.
ASSA
ABLOY, Inc.
Associated
Bank, N.A.
Association
of International Certified Professional Accountants
Assurant,
Inc.
Assured
Partners
Astellas
Pharma US, Inc.
Astex
Pharmaceuticals, Inc.
AstraZeneca
US
Asurion
AT&T
ATI
Physical Therapy
Atlantic
Aviation FBO Holdings
Atlas
Air, Inc.
Atlas
Sand Company, LLC
Atmos
Energy Corporation
Atos
It Solutions And Services |
Atrium
Health Navicent
Atrius
Health, Inc.
Audubon
Metals, LLC
Aultman
Health Foundation - Ohio
Auriga
Polymers (Nov 2010)
Autogrill
- HMSHost
Autoliv
North America, Inc.
Automated
Control Concepts
Automatic
Data Processing, Inc.
Automobile
Club of Southern California
AvalonBay
Communities, Inc.
Avangrid,
Inc.
Avanir
Pharmaceuticals
Avanos
Medical, Inc.
Avantax
Wealth Management, Inc.
Avantor,
Inc.
Avenue
Living
AVEO
Oncology
Aveva
Drug Delivery Systems
Avgol
America, Inc.
AvidXchange,
Inc.
Avient
- Distribution
Avient
- Global Color, Additives and Inks
Avient
- Global Specialty Engineered Materials
Avient
Corporation
Avon
Research & Development
Axalta
Coating Systems, LLC
Axiom
Global, Inc.
Axionlog
USA
Axis
Communications, Inc.
B. Braun
Medical
B&H
Foto & Electronics Corp.
Babson
College
Babylon
Partners Ltd
Bacardi
Bacardi
US Operations
BAE
Systems, Inc.
BAE
Systems, Inc. - Electronic Systems
BAE
Systems, Inc. - Intelligence & Security
BAE
Systems, Inc. - Platforms & Services
Baker
Hughes Company
Ball
Corporation
Ball
Corporation - Ball Aerospace & Technologies Corp.
Ball
Corporation - Beverage Packaging North and Central America Segment |
Banner
Health
Baptist
Health South Florida
Bar-S
Foods
Barrick
Gold of North America
Barry
Callebaut USA, LLC
BASF
Corporation
Bass
Pro Shops
Basware,
Inc.
Bath
& Body Works, Inc.
Battelle
Memorial Institute
Baxter
International
BAYADA
Home Health Care, Inc.
Bayer
AG - Bayer Corporation
Bayer
AG - Consumer Health Division
Bayer
AG - CropScience
Bayer
AG - North American Pharmaceutical Division
Baylor
College of Medicine
Baylor
Scott & White Health - Dallas, Texas
Baystar-Bayport
Polymers, LLC
BBD
Mass Transit Corp.
BCS
Automotive Interface Solutions US, LLC
Beam
Suntory
Beaumont
Health System
Beaumont
Hospital - Dearborn
Beaumont
Hospital - Farmington Hills
Beaumont
Hospital - Grosse Pointe
Beaumont
Hospital - Royal Oak
Beaumont
Hospital - Taylor
Beaumont
Hospital - Trenton
Beaumont
Hospital - Troy
Beaumont
Hospital - Wayne
Beaumont
Medical Group
Beaute
Prestige International (Miami)
Beauty
Systems Group (BSG)
Bechtel
Global Corporation
Bechtel
Plant Machinery, Inc.
Beckman
Coulter - Diagnostics
Beckman
Coulter - Life Sciences
Beiersdorf,
Inc.
Bel
Brands USA, Inc.
Belden,
Inc.
Belk,
Inc.
Belmond
BentallGreenOak
(U.S.) Limited Partnership
Berkadia
Berkshire
Associates |
| | |
57 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Berry
Appleman & Leiden LLP
Berwind
United States
Best
Buy Company, Inc.
BevMo!
BeyondTrust
Corporation
BGIS
Global Integrated Solutions US LLC
BHP
Billiton
Big
Lots
BigBear.ai
Holdings, Inc.
Bill
& Melinda Gates Foundation
Bimbo
Bakeries USA
BioBridge
Global
Biogen,
Inc.
BioMarin
Pharmaceutical, Inc.
bioMerieux
Inc.
Bird
Rides
Birla
Carbon USA
Bishop
Spencer Place-Saint Luke’s Health System
BJ’s
Wholesale Club, Inc.
BJC
HealthCare
BJC
HealthCare - St. Louis Children’s Hospital
Black
& Veatch Corporation
Black
& Veatch Corporation - B&V Special Projects Corp.
Black
& Veatch Corporation - Black & Veatch Construction, Inc.
Black
Stone Minerals Company, L.P.
Blackberry
Limited
Blackboard,
Inc.
Blattner
Company
Blucora,
Inc.
Blue
Apron
Blue
Cross and Blue Shield of Florida, Inc.
Blue
Cross and Blue Shield of Louisiana
Blue
Cross and Blue Shield of Massachusetts, Inc.
Blue
Cross and Blue Shield of Michigan
Blue
Cross Blue Shield of Kansas City
Blue
Cross of Idaho Health Service, Inc.
Blue
Racer Midstream, LLC
Blue
Shield of California
BlueCross
BlueShield of North Carolina
BlueFin
Services
BlueLinx
Corporation
Bluepeak |
BMW
Financial Services NA, LLC
BMW
of North America, LLC
Board
of Governors of the Federal Reserve System
Boardwalk
Pipeline Partners, LP
Bobst
North America, Inc.
Boehringer
Ingelheim Animal Health USA, Inc.
Boehringer
Ingelheim Pharmaceuticals, Inc.
Boeing
Employees Credit Union (BECU)
Boise
Cascade Company
BOK
Financial
Bombardier
Transit Corp.
Bon
Secours Mercy Health
Bonduelle
USA, Inc.
Booking
Holdings
Booking.com
Booz
Allen Hamilton
Bose
Corporation
Boston
College
Boston
Scientific Corporation
Boston
University
Bounteous
Boy
Scouts of America
Brake
Supply, LLC
Brandeis
University
Braswell
Family Farms
Breakthru
Beverage Illinois
Breville
Bridgestone
Americas
Bridgestone
APM Company
Briggs
& Stratton Corporation
Bright
Health Group
Bright
Horizons Family Solutions, Inc.
Brighthouse
Financial
BrightSpring
Health Services
Bristol-Myers
Squibb Company
Bristow
Group, Inc.
British
American Tobacco
Broad
Institute of MIT and Harvard
Brookfield
Properties Retail Group, Inc.
Brookfield
Residential Properties, Inc.
Brooks
Sports
Brookshire
Grocery Company
Brotherhood
Mutual Insurance Company
Broward
County Government
Broward
Health |
Brown
& Toland Physicians
Brown
and Caldwell
Brown
Forman
BSH
Home Appliances Corporation (Executive)
BSN
Medical, Inc.
BT
Holdings USA Inc.
Buckeye
Partners, L.P.
Bulletproof
360
Burlington
Stores, Inc.
Burns
& McDonnell
BWX
Technologies, Inc.
BYK
USA
BYK-Gardner
USA
C&S
Wholesale Grocers, Inc.
C110
- Quaker US - Corporate Admin
Cable
One, Inc.
CACI
International
CAE,
Inc.
Caerus
Operating, LLC
California
Casualty Management Company
California
Dental Association
California
Earthquake Authority
California
Hospital Association
California
Resources Corporation
Callaway
Golf Company
CALMAC
Corporation
Calpine
Corporation
Cambia
Health Solutions
Cambridge
Investment Research, Inc.
Campari
America
Campbell
Meals and Beverages
Campbell
Soup Company
Campbell
Soup Company - Global Biscuits & Snacks
Canature
WaterGroup
Canon
Virginia, Inc.
Canoo,
Inc.
Canvas
Credit Union
Capital
One Financial Corp.
CapitaLand
International USA
Cardinal
Health, Inc.
Cardiovascular
Systems, Inc.
CareFirst
BlueCross BlueShield
Cargill
Carhartt,
Inc.
Carilion
Clinic
Carlisle
Companies, Inc.
CarMax
Carmeuse
Americas |
Carnegie
Mellon University
Carnival
Cruise Lines
Carrier
Cascade
Corporation
Catalyst
Pharmaceuticals, Inc.
Caterpillar,
Inc.
CBRE
Group, Inc.
CDM
Smith, Inc.
CECO
Environmental
Cedars-Sinai
Medical Center
Cello
Health Inc.
Celulosa
Arauco North America
CEMEX,
Inc. US
CenterPoint
Energy, Inc.
Central
California Alliance for Health
Central
Garden & Pet Co.
Central
Ohio Primary Care Physicians, Inc.
Centro,
Inc.
Centrus
Energy Corp.
Centuri
Group Inc.
Cepheid
Cerner
CertiK
CEVA
Animal Health
CF
Industries Holdings, Inc.
CFI
Resorts Management
CGG
Services (US), Inc.
CGI
Technologies and Solutions, Inc.
CH
Robinson United States
CH2M
Hill BWXT West Valley, LLC
Champion
Petfoods USA, Inc.
ChampionX
ChampionX
USA, Inc.
Charles
River Laboratories International, Inc.
Charter
Automotive
Charter
Dura-Bar
Charter
Manufacturing Company
Charter
Steel
Charter
Wire
CHC
Helicopter Support Services (US) Inc.
Chelan
County Public Utility District
ChemTreat
ChenMed,
LLC
Chervon
North America, Inc.
Chesapeake
Energy Corporation
Chesapeake
Utilities Corporation Chewy, Inc. |
| | |
58 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Chicago
Cubs Baseball Club, LLC
Chicago
Public School System
Chief
Executives for Corporate Purpose
Children’s
Hospital of Orange County (CHOC)
Children’s
Hospital of Wisconsin
Children’s
Mercy Kansas City
Chipotle
Mexican Grill
Chobani
Global Holdings, LLC
Choctaw
Nation of Oklahoma
Choice
Hotels International, Inc.
Chow
Tai Fook Jewellery Company UNITED STATES
Chr.
Hansen, Inc.
Christie’s
Inc.
CHS,
Inc.
Chubb
US
Church
& Dwight Co., Inc.
Church
& Dwight Co., Inc. - Specialty Chemicals Division
CIGNA
Corporation
Ciklum
Inc.
Cincinnati
Children’s Hospital Medical Center
Cincinnati
Financial Corp.
Cipla
USA, Inc.
Circle
K Stores
Cirque
du Soleil, Lake Buena Vista
Citation
Oil & Gas Corp.
CITGO
Petroleum Corporation
Citigroup,
Inc.
Citizens
Property Insurance Corporation
City
Facilities Management (US)
City
National Bank of Florida
City
of Detroit
City
of Dublin
City
of Greensboro
City
of Hope
City
of San Antonio
City
Storage Systems
Civica
Rx
CivicPlus,
LLC
CKE
Restaurants Holdings, Inc.
Clare
Holdings LLC
Clarios,
LLC
Clayton
Homes
Clean
Harbors, Inc.
Clearwater
Paper Corporation
Cleco
Corporate Holdings, LLC
Clemson
University
Cleveland
Clinic |
Clif
Bar & Company
Cloud
Packaging Solutions, LLC
CLOUGH
CMA
CGM (America) LLC
CMC
Materials
CNA
Financial Corporation
CNH
America, LLC
CNO
Financial Group, Inc.
CNOOC
Petroleum U.S.A., Inc.
CNSI
Coaction
Specialty Insurance
Coats
North America
Coca
Cola Southwest Beverages
Coca-Cola
Bottlers’ Sales & Services Company LLC
Cochlear
Americas
Coeur
Mining, Inc.
Cognite
AS
Cognosante,
LLC
Coinstar
LLC
Colas,
Inc.
Colgate-Palmolive
Company
College
of American Pathologists
Collin
County
Colonial
Group Inc.
Colonial
Pipeline Company
Coloplast
Corporation
Colorado
Public Employees Retirement Association
Columbia
University
Columbus
McKinnon Corporation
Columbus
Regional Airport Authority
Comcast
Cable Communications, LLC
Comerica,
Inc.
CommentSold,
LLC
Commercial
Metals Company
Commonwealth
Care Alliance (CCA)
Community
Health Choice, Inc.
Community
Health Network (CHN)
Commvault
Compass
Group North America
Compass
Minerals International, Inc.
Compassus
Hospice
Compeer
Financial
Conagra
Brands
Consilio
Inc.
Consolidated
Nuclear Security Y-12 & Pantex
Constellation
Brands, Inc. |
Consumers
Credit Union
Consumers
Credit Union (www. myconsumers.org)
Consumers
Energy
Continental
Automotive Systems, Inc.
Continental
Properties Company, Inc.
Control
Components Inc.
Convatec,
Inc.
Cook
Children’s Health Care System
Cook
Medical, Inc.
Coolsys
Cooper’s
Hawk Winery & Restaurants
CoorsTek,
Inc.
Corbin
Russwin
Core
and Main
CoreBiome,
Inc.
Corix
- Corix Infrastructure Services US
Cornell
University
Cornerstone
Building Brands
Corning
Costa
Farms, LLC
Coty,
Inc.
COUNTRY
Financial
CountryMark
Cooperative Holding Corp.
Covance,
Inc.
Covestro,
LLC
Covetrus
COWI
Consulting Inc.
COWI
NA Inc.
Cox
Enterprises - Cox Automotive, Inc.
Cox
Enterprises - Cox Communications
Cox
Enterprises, Inc.
CPI
Card Group, Inc.
CPS
Energy
Cracker
Barrel Old Country Store, Inc.
Crawford
& Company
Creative
Artists Agency, LLC
Credit
Acceptance Corporation
Credit
Central Loans and Taxes
Crestron
Electronics
CRH
Americas
Crimson
Wine Group, Ltd.
CROPP
Cooperative
Crowe,
LLP
Crowley
Maritime Corporation |
Crown
Bioscience
Crown
Castle International Corporation
Cryogenic
Industries
Crystal
Mountain, Inc.
CSA
Group International
CSAA
Insurance Group
CSL
Americas
CSL
Behring
CSL
Seqirus
CSX
Transportation, Inc.
CTB,
Inc.
Cullen/Frost
Bankers, Inc.
Cummins,
Inc.
CUNA
Mutual Group
CURiO
Brands
Curriculum
Associates
Curtiss-Wright
Corporation
Cushman
& Wakefield
CVR
Energy, Inc.
CVS
Health Corporation
Cyclerion
Therapeutics, Inc.
Cygnus
Home Delivery
Cystic
Fibrosis Foundation
Cytel,
Inc.
Cytiva
D.A.
Davidson Companies
D.R.
Horton
Daiichi
Sankyo, Inc.
Daimler
Truck Financial Services USA
Dairy
Farmers of America, Inc.
DAK
Americas Alpek
Dakota
Minnesota & Eastern Railroad Corporation
Dallas
Central Appraisal District
Danaher
Corporate
Danfoss
Power Solutions (US) Company
Danfoss
Power Solutions II, LLC
Danfoss
Silicon Power US
Danfoss,
LLC
Danone
North America
Danos
& Curole Marine Contractors, LLC
Daramic,
LLC - Division of Polypore
Darden
Restaurants, Inc.
Darling
Ingredients, Inc.
Dart
Container Corporation
DataCore
Software Corporation
Datavant,
Inc.
David’s
Bridal |
| | |
59 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
DaVita,
Inc.
Dawn
Food Products, Inc.
Day
& Zimmermann Engineering, Construction and Maintenance
Day
& Zimmermann Group, Inc.
Day
& Zimmermann Munitions and Defense
Day
& Zimmermann SOC
Day
1 Academies
DCP
Midstream, LP
Deacero
USA, Inc.
Deckers
Outdoor Corporation
Deere
& Company
Del
Monte Foods, Inc.
DeLaval,
Inc.
Delaware
Supermarkets
Delegat
USA, Inc.
Deloitte,
LLP
Delta
Air Lines, Inc.
Delta
Air Lines, Inc. - Monroe Energy, LLC
Delta
Dental Insurance Company
Delta
Dental of California
Delta
Dental Of New York
Delta
Dental Of Pennsylvania
Deluxe
Corporation
Denbury,
Inc.
Denny’s
Corporation
Dentaquest
Ventures, LLC
Denver
Health
Denver
Public Schools
Deoleo
US
DePaul
University
Desert
Financial Credit Union
Designer
Brands, Inc.
Deutsche
Lufthansa US
Devon
Energy Corporation
Dexerials
America Corporation
DexKo
Global
DHL
eCommerce United States (Corporate)
DHL
Executives United States (Corporate)
DHL
Express United States (Corporate)
DHL
Global Business Services United States (Corporate)
DHL
Supply Chain United States
DHL
Supply Chain United States (Corporate)
Diality
Diamond
Offshore Drilling, Inc.
Diamondback
Energy
DICK’S
Sporting Goods |
Diebold
Nixdorf, Inc.
Direct
Supply, Inc.
DirecTV
Group Holdings LLC
Discover
Financial Services
DISH
Network Corp.
DJO
Global, Inc.
DNV
Energy Insights USA, Inc.
Dole
Food Company, Inc.
Dollar
General Corporation
Dominion
Energy South Carolina
Dominion
Energy, Inc.
Dominium
Domino’s
Pizza, Inc.
Donaldson
Company
Doosan
Bobcat, Inc.
Dorsey
& Whitney, LLP
Doskocil
Manufacturing Company, Inc.
Dover
Corporation
DOW
Chemicals
Dow
Jones
DPM,
LLC
Dr.
Reddy’s Laboratories, Inc.
Draeger
Medical Systems, Inc.
Draeger,
Inc.
Dresser-Rand
Group, Inc.
Dril-Quip,
Inc.
Driscoll’s,
Inc.
Driven
Brands Holdings Inc.
DriveTime
Automotive Group
DS Smith
Worldwide Dispensers
DSM
Biomedical
DSM
Engineering Plastics, Inc.
DSM
Nutritional Products
DSM
Services USA, Inc.
DTE
Energy
Duke
Clinical Research Institute
Duke
Energy Corporation
Duke
Energy Corporation - Duke Energy Carolinas, LLC
Duke
Energy Corporation - Duke Energy Indiana, Inc.
Duke
Energy Corporation - Progress Energy, Inc.
Duke
University
Duke
University Health System
Duquesne
Light Holdings
Durango
Midstream, LLC
Duravant,
LLC
Dyno
Nobel, Inc.
DYWIDAG-Systems
International USA Inc.
E.&
J. Gallo Winery |
E2OPEN
EAB
Global, Inc.
Eagle
Mine, LLC
East
West Bancorp, Inc.
Eastern
Bankshares, Inc.
Eastman
Chemical Company
Eaton
Corporation (US)
eBay,
Inc.
Echo
Global Logistics, Inc.
ECKART
America Corporation
Ecolab,
Inc.
Ecopetrol
America Inc.
EDF
Renewables Development Inc.
Edgewell
Personal Care
Edlong
Dairy Technologies
Edward
D. Jones & Co. L.P.
Edwards
Lifesciences, LLC
Eisai,
Inc.
ELANTAS
PDG
Elbit
Systems of America
Electric
Reliability Council of Texas, Inc.
Electrolux
Elekta
Inc.
Elevations
Credit Union
Eli
Lilly & Co.
Ellucian
Emburse,
LLC
EMCOR
Group, Inc.
Emerson
Automation Solutions
Emerson
Climate Technologies, Inc.
Emerson
Electric Co
Empirical
Foods
Employbridge
Employers
Mutual Casualty Company
Empower
Retirement LLC
Emulsicoat,
Inc.
Enbridge,
Inc.
Encompass
Health Corporation
Encore
Group
Encova
Insurance
Endeavor
Endo
International, PLC
Enel
Green Power North America
Enerflex
Energy Systems Inc.
Enerflex
Services, Inc.
Energizer
Holdings, Inc.
Energy
Transfer LP
EnergySolutions |
EnerMech
Mechanical Services, Inc.
Enerplus
Resources (USA) Corporation
EnerVest,
Ltd.
ENGIE
North America, Inc.
Eni
Trading & Shipping, US
EnLink
Midstream, LLC
Enova
International, Inc.
Ensemble
Health Partners
Entegris,
Inc.
Entergy
Corporation
Entertainment
Partners
Envision
Healthcare Holdings Inc.
Envista
Enviva
Envoy
Air
Equinix
Equinor
US Operations, LLC
Eramosa
International, Inc.
ERCO
Worldwide, Inc.
Ericsson
Erie
Indemnity Co.
Eriks
North America
ESAB
Corporation
ESCO
Technologies, Inc.
Esko
Essentia
Health
Essentra
Components
Essentra
Packaging
Essentra
PLC (US Shared Services)
Essilor
of America
Essity
North America
EthosEnergy
Everest
Re Group
Everside
Health
Eversource
Energy
Evolve
Vacation Rental Network Inc.
Evolved
By Nature
Evonik
Industries North America
Ewellix
(SMT)
Exactech,
Inc.
Exelixis,
Inc.
EXP
U.S. Services, Inc.
Explorer
Pipeline, Inc.
Express,
Inc.
EyeBuy
Direct, Inc.
F. Hoffmann
La-Roche, Ltd. - Genentech, Inc.
F. Hoffmann
La-Roche, Ltd. - Roche Diagnostics Corporation |
| | |
60 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
F.
Hoffmann La-Roche, Ltd. - Roche Molecular Systems, Inc.
Faegre
Drinker Biddle & Reath LLP
Fairview
Health Services
Fameccanica
North America, Inc.
Fanatics
Retail Group
Farm
Credit Bank of Texas
Farmers
Insurance Group
Fast
Retailing USA Inc.
FBL
Financial Group, Inc.
FCA
US, LLC
FCCI
Insurance Group
Federal
Aviation Administration
Federal
Reserve Bank of Atlanta
Federal
Reserve Bank of Chicago
Federal
Reserve Bank of Cleveland
Federal
Reserve Bank of Minneapolis
Federal
Reserve Bank of Philadelphia
Federal
Reserve Bank of Richmond
Federal
Reserve Bank of San Francisco
Federated
Mutual Insurance Company
Fender
Musical Instruments Corporation
Ferrara
Candy Company
Ferrellgas
Ferring
Pharmaceuticals, Inc.
Ferrovial
- Webber, LLC
Fidelity
National Information Services, Inc. (FIS)
Fiduciary
Counselling, Inc.
FieldCore
Service Solutions LLC
Fifth
Third Bancorp
FIJI
Water Company
Financial
Accounting Foundation
Financial
Industry Regulatory Authority (FINRA), Inc.
Firmenich,
Inc.
First
American Financial Corporation
First
Data Hardware Services Inc.
First
Financial Bancorp
First
Interstate BancSystem, Inc.
First
National Bank of Omaha
First
Orion
First
Solar, Inc.
First
Western Financial
FirstBank
Fisher
& Paykel Healthcare |
Flaktgroup
SEMCO
Flanders
Inc.
Flashpoint
Flavor
Producers
Florida
State University
Flowers
Foods, Inc.
Flowserve
Corporation
FLSmidth,
Inc.
Fluor
Corporation
Fluor
Idaho
Fluor
Marine Propulsion, LLC
FM Global
FMH
Conveyors, LLC
FONA
International Inc.
Fonterra
Co-operative Group, Ltd.
Formsprag
Fortive
Fortune
Brands Home & Security, Inc.
Fortune
Brands Home & Security, Inc. - Master Lock Company, LLC
Fortune
Brands Home & Security, Inc. - MasterBrand Cabinets, Inc.
Fortune
Brands Home & Security, Inc. - Therma-Tru
Forum
Energy Technologies, Inc.
Foundation
Partners Group, LLC
FPT
NORTH AMERICA INC.
Fragomen,
Del Rey, Bernsen & Loewy LLP
Fred
Hutchinson Cancer Research Center
Freeport
LNG Development, L.P.
Freeport-McMoRan,
Inc.
Freight
Handlers Inc.
Fresenius
Kabi USA
Fresh
Del Monte Produce United States
Fresh
US
Freudenberg
Medical Mis Inc.
Friedkin
Companies, Inc.
Friedkin
Companies, Inc. - Gulf States Financial Services
Friedkin
Companies, Inc. - Gulf States Toyota, Inc.
Friedkin
Companies, Inc. - US AutoLogistics, LLC
Froedtert
Health Inc.
Frontdoor,
Inc.
Frontier
Airlines
Fulton
Financial Corporation
Funko,
Inc.
G2O
Technologies |
Gables
Engineering, Inc.
GAF
Industries, Inc.
Galderma
Laboratories L.P.
GAN
Limited
Gap,
Inc.
Garaga
Garmin
AT
Garmin
International
Garmin
USA
Garrett
Transportation I, Inc.
Gate
Gourmet, Inc.
Gates
Industrial Corp. PLC
Gateway
Foundation Inc.
GATX
Corporation
GE Appliances,
a Haier Company
GE Gas
Power
GE Renewables
North America, LLC
GE United
States Aviation
GE United
States Healthcare
GEA
Refrigeration North America
Gemological
Institute of America
GenCure
Generac
Power Systems Inc.
General
Atomics
General
Dynamics Corporation
General
Dynamics Corporation - Bath Iron Works
General
Dynamics Corporation - Electric Boat Division
General
Dynamics Corporation - Gulfstream Aerospace Corp.
General
Dynamics Corporation - Land Systems
General
Dynamics Mission Systems Inc.
General
Motors Company
Generali
Global Assistance
Genesis
Energy, LP
Genmab
USA Inc.
Genuine
Parts Company
GEODIS
United States
George
Koch Sons, LLC
George
Washington University
Georgetown
University
Georgia
System Operations Corporation
GeoVera
Holdings, Inc.
Gerdau
USA Inc.
Gevo,
Inc.
GfK
US LLC
GHD
Pty Ltd
GHSP
Gibbs
Die Casting, LLC |
Giesecke+Devrient
Currency Technology America Inc.
Giesecke+Devrient
Mobile Security America, Inc.
Gildan
USA Inc.
Gilead
Sciences, Inc.
Givaudan
US
GKN
America Corporation - GKN Aerospace North America
GKN
North America Inc.
Glass
Coatings & Concepts, LLC
Glatfelter
Corp.
Glatfelter
Insurance Group
GlaxoSmithKline
Global
Finishing Solutions, LLC
Global
Health Labs, Inc.
Global
Indemnity Group, LLC
Global
Partners LP
Globe
Life, Inc.
GN Audio
GN Hearing
GOJO
Industries, Inc.
Golden
Hippo Media
Golden
State Farm Credit
Goodnight
Midstream, LLC
Goodwill
NCW
GoPro
Inc.
Gordon
Food Service, Inc.
GP Strategies
Corp.
GPG
Plumbing Group, LLC
Graham
Group US, Inc.
Graham
Packaging Company, L.P.
Grand
River Dam Authority
Grange
Mutual Casualty Company
Granite
Construction Inc.
Grayson
Mill Energy
Great
Minds
Great
River Energy
Greater
New York Mutual Insurance Co
Greater
Washington Educational Telecommunications Association, Inc. (WETA)
Green
Dot Corporation
Greenhouse
Software
Greenlight
Financial Technology, Inc.
GreyStone
Power Corporation
Grundfos
Pumps Manufacturing United States
Grupo
Industrial Lala US
GTM
International, LLC
Guarantee
Trust Life Insurance Company |
| | |
61 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Guardian Pharmacy
Guild Education, Inc.
Guinness
World Records North America Inc.
GXO
Logistics, Inc.
Gymshark
USA, Inc.
H-E-B
H&M
U.S.
Hach
Haemonetics
Corporation
Haldor
Topsoe, Inc.
Halliburton
Company
Hallmark
Cards, Inc.
Hallmark
Cards, Inc. - Crayola, LLC
Halma
Holdings US
Hammond
Power Solutions
Hampton
Products International Corporation
Hanchett
Entry Systems, Inc.
Hanesbrands,
Inc.
Hanford
Mission Integration Solutions
Hannover
Re U.S.
Hanon
Systems USA, LLC
Harbison-Fischer,
Inc.
Harris
Health System
Hasbro,
Inc.
Hatch
Associates Consultants
HAVI
Group
Hawaiian
Airlines, Inc.
HCA
Healthcare
HDR,
Inc.
Health
& Happiness (H&H), Inc.
Health
Care Service Corporation
Healthpartners,
Inc.
Heidrick
& Struggles International, Inc.
Helen
Of Troy - US
HELLA,
Inc.
HELLA,
Inc. - HELLA Electronics Corporation (HEC)
HelloFresh
Helmerich
& Payne, Inc.
Helzberg’s
Diamond Shops, Inc.
Henkel
Corporation
Hennepin
County
Hennepin
County Medical Center
Henry
Ford Health System
Henry
Ford Health System - Henry Ford Allegiance Health
Henry
Ford Health System - West Bloomfield Hospital
Henry
Schein, Inc. |
Heraeus
Electro-Nite Co., LLC
Heraeus
GMSI, LLC
Heraeus
Inc.
Heraeus
Medical Components, LLC
Heraeus
Medical, LLC
Heraeus
Metals New York, LLC
Heraeus
Precious Metals North America Conshohocken, LLC
Herbalife
Nutrition, Ltd.
Heritage
Landscape Supply Group, Inc.
Herr
Foods Inc.
HF Management
Services LLC
Hibbett
Sports, Inc.
HID
Global Corporation
Highmark
Health
Highspot
Inc.
Hikma
Pharmaceuticals USA, Inc.
Hillenbrand,
Inc.
Hilltop
Holdings, Inc.
Hilton
Grand Vacations
Hilton
Worldwide Holdings, Inc.
Hitachi
Astemo Americas Inc.
Hitachi
Construction Machinery Loaders America Inc. (HCMA)
HM.CLAUSE,
INC.
HNI
Corporation
HNTB
Corporation
Hollister
Holman
Enterprises Inc.
Hologic,
Inc.
Honeywell
Federal Manufacturing & Technologies
Honeywell
International, Inc.
Horizon
Air
Horizon
Blue Cross Blue Shield of New Jersey
Hormel
Foods Corporation
Hoshizaki
America, Inc.
Hostess
Brands Inc.
Hovnanian
Enterprises, Inc.
Howard
Hughes Medical Institute
Howden
Roots LLC
Howden
USA Company
Hoya
Optical Labs of America, Inc.
HOYA
Surgical Optics, United States
Hublot
US
Humana,
Inc.
Humane
Society of the United States |
Hunter
Industries, Inc.
Huntington
Bancshares, Inc.
Huntington
Ingalls Industries, Inc. - Technical Solutions Division
Hunton
Andrews Kurth LLP
Husky
Injection Molding Systems, Ltd. (US)
Huvis
Indorama Advanced Materials
Hy Cite
Enterprises, LLC
Hyatt
Hotels Corporation
Hycroft
Mining Holding Corporation
HydraForce,
Inc.
Hyperion
Materials & Technologies, Inc.
Hypertherm
Hyundai
Motor America
Hyundai
Translead
i-Health,
Inc.
IAT
Insurance Group
ICL
USA
ICW
Group
Idaho
National Laboratory
Idorsia
Pharmaceuticals US, Inc.
IDT
IES
Abroad
IFCO
Systems
IKEA
North American Services, LLC
IKEA
Purchasing Services (US), Inc.
Ilitch
Holdings, Inc.
Illumio
IMI
Zimmermann & Jansen
Impellam
Group NA
Imricor
Medical Systems, Inc.
IMT
Insurance Company
IN-N-OUT
BURGER
Incyte
Corporation
Independent
Bank Group Inc.
Index
Exchange Inc.
Indiana
University Health
Inflection
Energy, LLC
Ingevity
Corporation
Ingredion,
Inc.
InnFocus,
Inc.
Integer
Holdings Corporation
Integra
LifeSciences Holdings Corporation
Intelsat
Corporation
Intercept
Pharmaceuticals, Inc.
InterContinental
Hotels Group |
Interface,
Inc.
Intermountain
Healthcare, Inc.
International
Air Transport Association, Inc.
International
Baccalaureate Organization US
International
Business Machines Corporation
International
Paint LLC
International
Paper Co.
International
Rescue Committee
International
SOS
International-Matex
Tank Terminals (IMTT)
Interplex
Nascal, Inc.
Interpublic
Group of Companies, Inc.
Interstate
Gas Supply Inc.
Intra-Cellular
Therapies, Inc.
Intradeco
Intrawest/Winter
Park Operations Corporation
ION
Geophysical Corporation Ioneer USA Corp.
IPG
- True North Communications, Inc.
IPG
GIS US Inc.
IPL
Plastics - Consumer Packaging Solutions
IPL
Plastics - Large Format Packaging & Environmental Solutions
Ipsen
Biopharmaceuticals, Inc.
IQVIA
Holdings, Inc.
Iron
Mountain, Inc.
ISO
New England
Isuzu
North America Corporation
ITC
Holdings Corp.
ITG
Brands, LLC
Itochu
International, Inc. North America
ITOCHU
Prominent USA, LLC
ITT,
Inc.
Ixom
Watercare, Inc.
J-W
Power Company
J.Crew
Group, Inc.
J.D.
Irving - Cavendish
J.D.
Irving - Irving Consumer Products
J.Jill,
Inc.
J.R.
Automation Technologies LLC
J.S.
Held LLC
Jabil
Circuit, Inc.
Jackson
Lewis P.C. |
| | |
62 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Jackson
National Life Insurance Company, Inc.
Jacobs
Engineering Group, Inc.
Jaguar
Land Rover North America, LLC.
Jaguar
O&G
James
Avery Craftsman, Inc.
James
Hardie Building Products
James
River Group, Inc.
Jason,
Inc.
JB
Hunt Transport Services, Inc.
JBG
SMITH Properties
Jeld-WEN
Jet
Aviation United States
Jet
Propulsion Laboratory
JetBlue
Airways
Jockey
International, Inc.
John
B. Sanfilippo & Son, Inc.
John
Bean Technologies Corporation
John
Fabick Tractor Company (Fabick CAT)
Johns
Hopkins All Children’s Hospital
Johns
Hopkins Health Care System
Johns
Hopkins University
Johns
Manville
Johnson
& Johnson
Johnson
& Johnson Consumer Health
Johnson
& Johnson Medical Devices
Johnson
& Johnson Medical Pharma
Johnson
Controls Inc.
Johnson
County Community College
Johnson
Financial Group
Johnson
Matthey, Inc.
Jostens,
Inc.
JT
International USA, Inc.
Juice
Plus
Just
Born Inc.
JUSTIN
Vineyards & Winery
JX
Nippon Oil Exploration (U.S.A.) Limited
Kaiser
Permanente
Kaiser
Permanente - Colorado Region
Kaiser
Permanente - Georgia
Kaiser
Permanente - Hawaii
Kaiser
Permanente - Mid Atlantic
Kaiser
Permanente - Northern California |
Kaiser
Permanente - Northwest Region
Kaiser
Permanente - Southern California Region
Kaiser
Permanente - Washington
Kamehameha
Schools
Kansas
State University - Manhattan Campus
Kao
USA, Inc.
KAR
Auction Services, Inc.
KBR
(GSUS)
KBR,
Inc.
Kellogg
Company
Kelsey-Seybold
Clinic
Kelvion
KemPharm,
Inc.
Kendo
Holdings, Inc.
Kent
PLC US
Kentucky
Lottery Corporation
Kering
Americas
Kerry,
Inc.
KeyCorp
Kiewit
Corporation
Kimberly-Clark
Corporation
Kimberly-Clark
Corporation - Consumer
Kimberly-Clark
Corporation - K-C Professional
Kimley-Horn
and Associates Inc.
Kinder
Morgan, Inc.
Kinecta
Federal Credit Union
Kinross
Gold Corporation
Kirkland
& Ellis, LLP
Kiva
Microfunds
Klein
Tools, Inc.
Knauf
Knoxville
Utilities Board
Koch
Air, LLC
Koch
Enterprises, Inc.
Kohl’s
Corporation
Kohler
Company
Komatsu
Mining Corp.
Konecranes
Nuclear Equipment & Services
Konecranes,
Inc.
Kontoor
Brands, Inc.
Koppers
Kosmos
Energy, LLC
Kremers
Urban Pharmaceuticals, Inc.
KUBRA
Kum
& Go L.C.
KushCo
Holdings, Inc.
Kwik
Trip |
Kyowa
Kirin, Inc.
Kyriba
Corporation
L.A.
Care Health Plan
L.L.Bean,
Inc.
L’Oreal
USA
L3Harris
Technologies
Laboratory
Corporation of America Holdings
LACC,
LLC
Land
O’Lakes, Inc.
Landmark
Credit Union
Lannett
Company, Inc.
LANXESS
Corporation US
Laredo
Petroleum, Inc.
Latham
& Watkins
Launch
Federal Credit Union
Lawrence
Berkeley National Laboratory
Lawrence
Livermore National Laboratory
LBC
Houston
LBC
US
LDC
Louis Dreyfus Company
Leadiant
Biosciences, Inc.
Legal
& General America
LEGO
Systems, Inc.
Lehigh
Hanson, Inc.
Lehigh
University
Leica
Biosystems
Leica
Microsystems
Leidos
Holdings, Inc.
Lend
Lease USA
Lennox
International, Inc.
LEO
Pharma
Leprino
Foods Company
Les
Schwab Tire Centers, Inc.
Lesson
Nine GmbH (Babbel)
Leupold
& Stevens, Inc.
Levi
Strauss & Co, Inc.
Lexington
Medical Center
LG Electronics
USA, Inc.
Libbey
Liberty
Mutual Group
Liberty
Utilities
LifeNet
Health
Liferay,
Inc.
Lifescan
Lifetime
Healthcare Companies, Inc. - Excellus BlueCross BlueShield
LifeWay
Christian Resources
Likewize |
Linamar
Corporation McLaren Performance Technologies, Inc.
Linamar
Corporation Skyjack Equipment, Inc.
Lincoln
Electric Holdings, Inc.
Lincoln
National Corporation
Linde,
Inc.
Lineage
Logistics
Linear
Motion, LLC
LineDrive
Lionbridge
Technologies
Live
Nation Entertainment, Inc. - Ticketmaster, LLC
Live
Oak Bank
LMB
Mortgage Services, Inc.
Lockheed
Martin - Aeronautics
Lockheed
Martin - Missiles and Fire Control
Lockheed
Martin - Rotary & Mission Systems
Lockheed
Martin - Space
Lockheed
Martin Corporation
Loews
Corporation
Lone
Wolf Technologies
Lonza
LOOP,
LLC
Los
Alamos National Laboratory
Los
Angeles Community College District
LOTTE
Chemical Louisiana, LLC
LOTTE
Chemical USA Corporation
Louis
Vuitton USA
Lowe’s
Companies, Inc.
Lower
Colorado River Authority
LS Group
Staff
LT Apparel
Group
Lubrizol
Lundbeck
US
LURIN
Lutheran
Senior Services
Luxoft
GmbH
LVMH
- Christian Dior, Inc.
LVMH
- DFS Group Limited
LVMH
- Fendi North America, Inc.
LVMH
- Sephora USA, Inc.
LVMH
- Starboard Cruise Services, Inc.
LVMH
Moet Hennessy Louis Vuitton, Inc.
LyondellBasell
Industries
M. A.
Mortenson Company
M. Holland
Company |
| | |
63 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
M&T
Bank Corporation
Macy’s,
Inc.
Maersk
Maersk
Drilling USA
Maesa
LLC
Magellan
Health, Inc.
Magna
International of America, Inc.
Maine
Medical Center - MaineHealth
Mallinckrodt
Pharmaceuticals
Malvern
Panalytical US
Mammoth
Mountain Ski Area, LLC
Mammotome
MANA
Products
Mane
USA, Inc.
Mann+Hummel
(MHUS)
Mansfield
Energy Corp.
ManTech
International Corporation
MAPCO
Express
MAPFRE
U.S.A. Corp.
Maple
Leaf Foods, Inc.
Maquet
Getinge Group
Marathon
Oil Corporation
Marc
Jacobs International, LLC
Markel
Corporation
Marken
LLP
Marlen
International, Inc.
Marriott
International, Inc.
Mars
Food
Mars
Global Services
Mars
Pet Nutrition
Mars
Pet Nutrition Global
Mars
Retail
Mars
Wrigley - Americas
Mars
Wrigley Global
Mars,
Inc.
Marsh
& McLennan Companies
Marsh
& McLennan Companies, Inc. - Marsh
Marshfield
Clinic Health System
Martin
Marietta Materials, Inc.
Mary
Kay, Inc.
Mary
Kay, Inc. - US Division
Maryland
Procurement Company
Masco
Corporation
Massachusetts
Institute of Technology
Massachusetts
Institute of Technology - MIT Lincoln Laboratory |
MassMutual
Life Insurance Company
Material
Materion
United States
MathWorks
Matson,
Inc.
Matson,
Inc. - Matson Logistics
Mattel,
Inc.
Matthews
International Corporation
Maurices,
Inc.
MAXIMUS,
Inc.
Maxion
Wheels Sedalia LLC
Maxion
Wheels U.S.A., LLC
Mayer
Brown, LLP
Mayo
Foundation for Medical Education and Research
Mayo
Foundation for Medical Education and Research - Mayo Clinic Arizona
Mayo
Foundation for Medical Education and Research - Mayo Clinic Florida
McCain
Foods USA, Inc.
McCormick
& Company
McCrometer
McDermott
International, Inc.
McDonald’s
Corporation
McGrath
RentCorp
McKesson
Corporation
McNeil
& Company, Inc.
Mecklenburg
County
Medallion
Midstream, LLC
Medela,
LLC
Medicago
USA, Inc.
Medical
Mutual of Ohio
Medifast,
Inc.
Medline
Industries, Inc.
MedStar
Health
Medtronic,
PLC
Meggitt-USA,
Inc.
Meijer,
Inc.
Memorial
Health System
Memorial
Sloan Kettering Cancer Center
MemorialCare
Health System
MemorialCare
Health System - Orange Coast Memorial Medical Center
Mercedes-Benz
U.S. International, Inc.
Mercedes-Benz
USA, LLC
Merck
& Co., Inc.
Merck
& Co., Inc. - Animal Health Division |
Mercury
Insurance Group
Meritage
Homes Corporation
Meritor,
Inc.
Merlin
Entertainments
Mersen
US
Meso
Scale Diagnostics
MetaBank
National Association
Metal
Exchange Corporation
Mettler-Toledo,
LLC - MTI
MFS
Investment Management
Michelin
North America, Inc.
Michels
Corporation
Michigan
Farm Bureau
Mid-America
Apartment Communities, Inc. (MAA)
Mid-America
Conversion Services
Midco
Midland
Cogeneration Venture
MillerKnoll
Inc.
Milliken
& Company
Milliken
& Company - Chemical
Minnesota
Valley Electric Cooperative
Minto
Communities, LLC
Mirum
Pharmaceuticals, Inc.
Mission
Produce, Inc.
Mission
Support and Test Services
MiTek
USA, Inc.
Mitsubishi
Corporation (Americas)
Mitsubishi
Heavy Industries America, Inc.
Mitsubishi
Hitachi Power Systems Americas, Inc.
Mitsubishi
Motors North America
Mitsubishi
Tanabe Pharma America, Inc.
Mitsui
E&P USA, LLC
MKOX
KONE, Inc.
MMGY
Global, Inc.
Mohawk
Industries, Inc.
Mohawk
Valley Health System - Faxton St. Luke’s Hospital
Molecular
Devices
Molina
Healthcare, Inc.
Molnlycke
Health Care US, LLC
Molson
Coors Beverage Company
monday.com
Mondelez
International, Inc.
MongoDB
Inc.
Monotype
Imaging Inc.
Monterey
Bay Aquarium |
Montrose
Environmental Group, Inc.
Moore
& Van Allen, PLLC
Morris
Material Handling
Motiva
Enterprises, LLC
Motorola
Solutions
Motrex
LLC
Movado
Group, Inc.
Movado
Retail Group
Mr.
Cooper Group, Inc.
msg
global solutions, Inc.
MTS
Systems Corporation
Mueller
Water Products, Inc.
MultiCare
Health System
Munich
Reinsurance America, Inc./HSB Insurance and Inspection
Murdochs
Ranch and Home Supply
Murphy
Oil Corporation
Mutual
of Omaha
N-able
Technologies Inc.
N3B
Los Alamos
NASSCO
Holdings Inc.
National
CineMedia, LLC
National
Futures Association
National
Grid
National
Louis University
National
Oilwell Varco, Inc.
National
Renewable Energy Laboratory
National
Research Corporation
National
Rural Utilities Cooperative Finance Corporation (NRUCFC)
Nationwide
Mutual Insurance Company
Nature’s
Sunshine Products, Inc.
NatureWorks,
LLC
Navient
Navistar
USA
Navitus
Health Solutions, LLC
Navy
Federal Credit Union
NCCI
Holdings
NCS
Multistage, LLC
Nearmap
NECI
Nemak
NeoImmuneTech,
Inc.
Neste
US, Inc.
Nestle
USA - Nespresso USA
Nestle
USA, Inc.
NetJets
Neurocrine
Biosciences, Inc. |
| | |
64 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
New
Jersey Institute of Technology
New
Jersey Resources Corp.
New
Nautical Coatings Inc.
New
World Medical
New
York Power Authority
New
York University
Newell
Brands, Inc.
Newmont
Corporation
Newpark
Drilling Fluids
Newpark
Mats and Integrated Services
Newpark
Resources
NewRez,
LLC
Nexan
- Amercable Inc.
Nexans
High Voltage USA, Inc.
NextEra
Energy, Inc.
NexTier
Oilfield Solutions
NFI
Industries Inc.
Niagara
Bottling
NIBCO,
Inc.
Nidec
Motor Corporation
Nike,
Inc.
Nilfisk,
Inc.
NiSource,
Inc.
Nitta
Corporation of America
NMI
Holdings, Inc.
Noble
Corporation
Noble
Research Institute, LLC
Noblis
Noblis
ESI
Noodles
& Company
Nordstrom,
Inc.
Norfolk
Southern Corporation
Norgren,
Inc.
Norican
Group
Norris
Rods, Inc. (PAT Corp.)
Norriseal-Wellmark,
Inc.
Norsk
Hydro
North
American Science Associates
Northeastern
University
Northrop
Grumman Corporation
NorthShore
University HealthSystem
Northwell
Health
Northwest
Bank
Northwestern
University
Norton
Door Controls
Nouryon
NOVA
Chemicals
Novant
Health, Inc.
Novartis
Corporation |
Novartis
Institutes for BioMedical Research, Inc.
Novartis
Pharmaceuticals Corporation
NovaSignal
Corporation
Novavax
Novo
Nordisk Pharmaceutical Industries LP
Novo
Nordisk, Inc.
Novocure
Novozymes
North America, Inc.
NOW
Health Group, Inc.
NRT,
LLC
NS Pharma
Numerica
Credit Union
NuStar
Energy, L.P.
Nutrien,
Ltd. - US
nVenia,
LLC
nVent
(US)
NVR,
Inc.
Nyrstar
Netherlands - US
O.C.
Tanner Company
O’Reilly
Automotive, Inc.
Oak
Ridge Associated Universities
Oak
Ridge National Laboratory
Ocado
Solutions USA Inc.
Ocean
Mist Farms
Oceaneering
International, Inc.
Ocwen
Financial Corporation
Oerlikon
Surface Solutions
Offerpad
Solutions, Inc.
Office
of Planning and Budget
Office
of the Comptroller of the Currency
OGE
Energy Corp.
Ohio
National Financial Services, Inc.
Ohio
Transmission Corporation
OIA
Global
Oil
Search (Alaska), LLC
Oil-Dri
Corporation of America
Old
Dominion Electric Cooperative
Old
Dominion University Research Foundation
Old
Republic National Title Insurance Company
Oldcastle
APG
Oldcastle
Building Envelope, Inc.
Oldcastle
Infrastructure
Olin
Corporation
Olympus
America, Inc. |
Olympus
Corporation of the Americas
Olympus
Scientific Solutions America
Olympus
Surgical Technologies America
OMNOVA
Solutions, Inc.
OMRON
Healthcare
One
Call Care Management
ONE
Gas, Inc.
One10
OneBeacon
Insurance Group
OneSource
Virtual
Ono
Pharma USA
OnPoint
Group
OOCL
(USA), Inc.
Open
Society Foundations
Oportun
Financial Corp.
Orbia
United States
Organon
& Co.
Orica
USA, Inc.
Orlando
Health
Orrick,
Herrington & Sutcliffe, LLP
Ortho
Clinical Diagnostics
Oscar
Insurance Corporation
OSF
Healthcare - Peoria, Illinois
Oshkosh
Access Equipment
Oshkosh
Commercial
Oshkosh
Corporation
Oshkosh
Defense
OSI
Industries, LLC
Ossur
Americas
OTR
Wheel Engineering Inc.
Otsuka
America Pharmaceuticals, Inc.
OTT
HydroMet
Otter
Products, LLC
OU Medicine
Owens
& Minor Distribution, Inc.
Owens
Corning
Oxford
Industries, Inc.
P2 Energy
Solutions, Inc.
PACCAR,
Inc.
Pacific
Northwest National Laboratory
PacifiCorp
Packaging
Corporation of America
Packaging
Corporation of America - Packaging
Packaging
Corporation of America - White Paper
Pactiv
Pall |
Panasonic
Corporation of North America
Panda
Restaurant Group, Inc.
Pandora
Jewelry, LLC
Panduit
Corporation
Papa
John’s International, Inc.
Par
Pacific Holdings
PAREXEL
International Corporation
Pariveda
Solutions, Inc.
Parker
Hannifin Corporation
Parker
Hannifin Corporation - Aerospace Group
Parkland
USA
Parkview
Health
Partners
HealthCare
Patagonia
Works
Patterson
UTI Drilling Company, LLC
Pavement
Maintenance Systems, LLC
Pax8,
Inc.
Paychex,
Inc.
Paycor,
Inc.
Payoneer,
Inc.
PayPal
Holdings, Inc.
PCC
Community Markets
Peabody
Energy Corporation
Pedernales
Electric Cooperative, Inc.
Penn
Medicine - Lancaster General Hospital
Penn
Mutual Life Insurance Company
Penn
State Health
Pennex
Aluminum Company, LLC
Pennsylvania
National Mutual Casualty Insurance Company
Penske
Corporation
Pentair
Plc
PepsiCo,
Inc.
Perfection
Pet Foods, LLC
Perfetti
Van Melle USA
Perfumes
& Cosmetics
Perrigo
Company, Plc - Perrigo Company (US)
Perspecta,
Inc.
Pet
Supplies Plus
Petco
Health and Wellness Company, Inc.
Petrobras
America Inc.
Pfizer,
Inc.
PG&E
Corporation
Pharmaceutical
Product Development, LLC |
| | |
65 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Pharmavite,
LLC
PharmScript
Phenomenex
& Agela
Philadelphia
Insurance Companies
Philip
Morris International, Inc.
Piaggio
Group Americas, Inc.
Pierce
Manufacturing, Inc.
Pierre
Fabre Dermo Cosmetique North America
Pilot
Corporation Of America
Pilot
Flying J
Pinnacle
West Capital Corporation
Pioneer
Natural Resources Company
Piper
Sandler Companies
Pivot
Bio
PJM
Interconnection, LLC
pladis
Plains
All American Pipeline, L.P.
Plante
& Moran, PLLC
Platte
River Power Authority
Pointsbet
Australia Pty Ltd
Polypore
International, LP
POM
Wonderful
Port
of Houston
Port
of Portland
Post
Holdings, Inc.
Post
Holdings, Inc. - 8th Avenue
Post
Holdings, Inc. - Bob Evans Farms, Inc.
Post
Holdings, Inc. - Michael Foods
Post
Holdings, Inc. - Post Consumer Brands
Postlethwaite
& Netterville
PPG
Industries, Inc.
PRA
Group, Inc.
Precision
Drilling Corporation
Premera
Blue Cross
Premier,
Inc..
Presbyterian
Healthcare Services
Prevea
Health
PriceSmart
PricewaterhouseCoopers,
LLP
Primetals
Technologies US, LLC
Prince
International Corporation
Princeton
University
Principal
Financial Group, Inc.
Procter
& Gamble Company
PROG
Leasing, LLC
Progressive
Corporation
Promega
Corporation |
Promethean
World
Proserv
Operations, LLC
Providence
Health & Services - Providence Health Plans
Proximo
Spirits
PSCU,
Inc.
PTC
Therapeutics, Inc.
Public
Company Accounting Oversight Board
Public
Service Enterprise Group, Inc.
Publicis
Sapient
Publix
Super Markets, Inc.
PulteGroup,
Inc.
Puratos
Corporation
Purdue
Pharma L.P.
Purdue
University
PureCycle
Technologies
Pushpay
USA, Inc.
PVH
Corp.
QBE
Americas, Inc.
QC Industries,
LLC
Qorvo
Quaker
Houghton - Engineered Custom Lubricants
Quaker
Houghton - US Fluidcare MW
Quaker
Houghton - US OPS
Qualfon
QualTex
Laboratories
Quantum
Health, Inc.
Quartzdyne,
Inc.
Quest
Diagnostics
QVC,
Inc.
R&M
Materials Handling
Radian
Group, Inc.
Radisson
Hotel Group
Rahr
Corporation
Raley’s
RAND
Corporation
Range
Resources Corp.
Range
USA
Raytheon
Technologies
Realogy
Holdings Corporation
Realty
Income Corporation
REC
Silicon, Inc.
Reckitt
Benckiser, Inc.
Recreational
Equipment, Inc.
Red
Bull Distribution Company, Inc., USA
Red
Bull North America
Red
Robin Gourmet Burgers
Refrigerated
Solutions Group |
Regal
Beloit Corporation
RegEd,
Inc.
Regeneron
Pharmaceuticals, Inc.
Regional
Management Corporation
Regions
Financial Corporation
REHAU,
Inc.
Reinsurance
Group of America, Inc.
Reiter
Affiliated Companies, LLC.
Reliance
Standard Life Insurance Company
Remington
Hotels
Renaissance
Lakewood, LLC
Renalytix
AI, Inc.
Renewal
by Andersen, LLC
RENK
Corporation
Repsol
Services Company
Republic
Airline, Inc.
Republic
National Distributing Company (RDNC)
Republic
Services, Inc.
Resideo
Technologies, Inc.
Restoration
Hardware (RH)
REVENUE
SOLUTIONS
Reyes
Holdings
Reynolds
Consumer Products, Inc.
Rheem
Manufacturing Company, Inc.
RHI
Magnesita
Ria
Envia, Inc.
Rich
Products Corporation
Richardson
International
Rite
Aid Corporation
Rite-Hite
Company LLC
RK&K
RKT
Holdings, LLC
Robert
Bosch
Robertet
USA
Rochester
Institute of Technology
Rock
Central, LLC
Rocket
Auto, LLC
Rocket
Homes Real Estate, LLC
Rocket
Mortgage, LLC
RockLoans
Marketplace, LLC
Rockwell
Automation
Roll
Forming Corporation
Rolls-Royce
North America, Inc.
ROTOPLAS
UNITED STATES
Rowan
Williams Davies & Irwin (RWDI, LLC)
Royal
Bank of Canada - City National Bank |
Royal
Canin
Royal
Canin - Americas
RR Donnelley
& Sons
RSM
US, LLP
RTI
International
RTSS
US
Ruan
Transportation Management Systems, Inc.
Rudolph
Foods Company, Inc.
Ryan
Specialty Group, LLC
Ryerson
Holding Corp.
S.C.
Johnson & Sons, Inc.
S&C
Electric Company
SABIC
Americas, Inc.
Safe-Guard
Products International
Safelite
Sage
Natural Resources
Sailun
Tire Americas Inc.
Saint
Luke’s Health System
Saint
Luke’s Health System - Hedrick Medical Center
Saint
Luke’s Health System - Saint Luke’s East Hospital
Saint
Luke’s Health System - Saint Luke’s Home Care and Hospice
Saint
Luke’s Health System - Saint Luke’s Hospital of Kansas City
Saint
Luke’s Health System - Saint Luke’s North Hospital
Saint
Luke’s Health System - Saint Luke’s Physicians Group
Saint
Luke’s Health System - Saint Luke’s South Hospital
Saint-Gobain
US
Saks,
Inc.
Sally
Beauty Holdings, Inc.
Sally
Beauty Supply
Saluda
Medical
Samis
Land Company
Sammons
Financial Group
Samsung
Electronics America, Inc.
Samtec,
Inc.
Samuel,
Son & Co., Inc.
San
Diego Zoo Wildlife Alliance
Sandia
National Laboratories
Sandvik,
Inc.
SanMar
Corp.
Sanofi
US
Santen,
Inc.
Saputo
Cheese USA, Inc.
Saputo
Dairy Foods USA, LLC |
| | |
66 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Sartorius
United States
SAS
Institute, Inc.
Sasol
(USA) Corporation
Savannah
River National Laboratory
Savannah
River Remediation, LLC
Savencia
Cheese USA
Savers,
Inc.
Savvas
Learning Company LLC
Saxx
Underwear Co. USA
Sazerac
Company, Inc.
SBA
Communications Corporation
Schaeffler
Technologies AG & Co. KG - Schaeffler Group USA, Inc.
Schenker,
Inc.
Schindler
Elevator Corporation
Schlumberger
Limited - Schlumberger Oilfield Services
Schnuck
Markets, Inc.
SchoolsFirst
Federal Credit Union
Science
Applications International Corporation (SAIC)
Sciex
Scooter’s
Coffee
Screen
Actors Guild - American Federation of Television and Radio Artists
Scripps
Health
Scroll
Compressors LLC
Seaboard
Corporation
Seadrill
Seagen
Inc.
Seagull
Scientific, Inc.
SEAKR
Engineering
Sealed
Air Corporation
Seashine
Financial, LLC
Seattle
Children’s Hospital
Sebia
USA
Securitas
Inc.
Seda
North America Inc.
Select
Medical Holdings Corp.
Selective
Insurance Group, Inc.
Sempra
Energy
Sensia,
LLC
Sentara
Healthcare
Sentry
Insurance Company
Sequa
Corporation
Servco
Pacific, Inc.
Service
Corporation International
SGRE
Wind, Gamesa USA
Shake
Shack, Inc.
Sharp
Electronics Corporation |
ShawCor
(US)
Shelf
Drilling US, Inc.
Shepherd
Chemical Company
Shepherd
Color Company
Shiseido
Americas Corporation
Shiseido
Travel Retail Americas
SHOES
FOR CREWS LLC
Shook,
Hardy & Bacon, LLP
Showa
Denko Materials (America), Inc.
Shure
Inc.
Shurtape
Technologies LLC
Shutterfly,
Inc.
SI Group,
Inc.
Sidley
Austin, LLP
Siegwerk
EIC, LLC
Siegwerk
USA Co.
Siemens
Corporation
Siemens
Energy, Inc.
Siemens
Energy, Inc. - Fossil Products (OPP)
Siemens
Energy, Inc. - Oil& Gas (PT2)
Siemens
Energy, Inc. (US) - Dist Gen (PS1)
Siemens
Field Staffing, Inc.
Siemens
Financial Services, Inc.
Siemens
Gamesa Renewable Energy, Inc. USA
Siemens
Healthcare
Siemens
Industry Software
Siemens
Mobility, Inc.
Sierra
Nevada Corporation
Signature
Aviation US Holdings, Inc.
Signature
Bank
Signify
North America Corporation
Silver
Oak Wine Cellars
Silverchair
SimpliSafe
Inc.
Simpson
Manufacturing Co., Inc.
Sims
Metal Management, Ltd.
Sinclair
Broadcast Group, Inc.
Singapore
Technologies Engineering
SiriusPoint
America Insurance Company
SitusAMC
Skyward
Specialty Insurance
SMC
Corporation of America
Smead
Manufacturing
Smith
College
Smithfield
Foods |
Snow
Summit, LLC
Snowshoe
Mountain, Inc.
Society
Insurance
Society
of Petroleum Engineers (SPE)
Sodexo
USA
SoftServe
(ISV Tech)
SOL-MILLENNIUM
Medical Group
Solmax
Sonepar
- Vallen Distribution, Inc.
Sonoco
Products
Sonos
Sound
Credit Union
Sound
Transit
South
Jersey Industries
South
Texas Blood & Tissue Center
South
Western Communications, LLC
Southeastern
Freight Lines
Southern
California Edison
Southern
Company - Georgia Power
Southern
Company - Mississippi Power Company
Southern
Company - Southern Company GAS
Southern
Company - Southern Company Services
Southern
Company - Southern Power Company
Southern
Company - SouthernLINC Wireless
Southern
Power Company - Alabama Power Company
Southern
Ute Indian Tribe - Aka Energy Group, LLC
Southern
Ute Indian Tribe - Growth Fund Properties Group, LLC
Southern
Ute Indian Tribe - Red Cedar Gathering Company
Southern
Ute Indian Tribe - Red Willow Production Company
Southern
Ute Indian Tribe - Southern Ute Indian Tribe Growth Fund
Southern
Ute Indian Tribe - Southern Ute Shared Services
Southland
Industries
Southwest
Airlines Co.
Southwest
Gas Corporation
Southwest
Research Institute
Sovos
Brands
Spark
Therapeutics
Sparrow
Health System |
Spectrum
Brands Holdings, Inc.
Spectrum
Brands Holdings, Inc. - Hardware & Home Improvement
Spectrum
Brands Holdings, Inc. - Home & Personal Care Appliances
Spectrum
Brands Holdings, Inc. - Pet Home & Garden
Spectrum
Health System
Spectrum
Retirement Communities, LLC.
Spencer
Gifts, LLC
Spin
Master, Ltd.
Spirax-Sarco,
Inc.
Spirit
AeroSystems Holdings
Spirit
Airlines, Inc.
SPIRIT
Global Energy Solutions, Inc.
Spreetail
LLC
Springfield
Clinic, LLP
Springworks
Therapeutics, Inc.
SPX
Corporation
Squaw
Valley Ski Corporation
SRS
Distribution
SSM
Health
SSR
Mining, Inc.
St.
Charles Health System
St.
Luke’s Elmore Medical Center
St.
Luke’s Health System - Saint Luke’s Boise Medical Center
St.
Luke’s Magic Valley Medical Center
St.
Luke’s Meridian Medical Center
St.
Luke’s Nampa Medical Center
Stancorp
Financial Group
Standard
Meat Company
StandardAero
Stanford
University
Stanford
University - Stanford Health Care
Stanley
Consultants
Stantec,
Inc.
Star
Tribune Media Company, LLC
Starbucks
Corporation
Starkey
Hearing Technologies, Inc.
State
Employees’ Credit Union
State
Farm Insurance
State
of North Carolina
State
of North Dakota
State
Teachers Retirement System of Ohio
Steamboat
Ski & Resort Corporation |
| | |
67 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Stella
- Blue Cross Blue Shield Minnesota
Stella
McCartney US
STEP
Energy Services (USA) Ltd.
Stepan
Company
Stephen
Gould Corporation
STERIS,
PLC
Stewart
Title Guaranty Company
Stewart
Title Insurance Company
Stoneridge,
Inc.
Storck
USA L.P.
Strategic
Education United States
Straumann
Stride,
Inc.
Stryker
Corporation
Styropek
USA, Inc.
Subaru
of America, Inc.
Suburban
Hospital
Suburban
Propane Partners, LP
Subway
FWH, LLC
Sulzer
Pumps (US), Inc.
Sulzer
Turbo Services Houston Inc.
Sumitomo
Electric - Sumitomo Electric U.S.A. Holdings, Inc.
Sumitomo
Pharma America Holdings
Summa
Health
Sun
Life Financial U.S.
Sunbelt
Rentals, Inc.
SunCoke
Energy Inc.
Sunovion
Pharmaceuticals, Inc.
SunStream
Business Services
Superior
Energy Services, Inc.
Supernus
Pharmaceuticals
Surescripts,
LLC
SureWerx
USA Inc.
Surmodics,
Inc.
Sutherland
Global Services
Sutter
Health
Suzuki
Marine USA
Svendborg
Brakes
Swagelok
Company
Swarovski
US
Swedish
Match, US Division
Swissport
Sylvamo
Symetra
Financial Corporation
Symmetry
Energy Solutions
Symrise,
Inc.
syncreon
America, Inc.
Syneos
Health, Inc. |
Synergy
Flavors, Inc.
Syngenta
Synovus
Financial Corporation
Sysco
Corporation
T-Mobile
US, Inc.
T. Marzetti
Company
T.D.
Williamson
Tailored
Brands
Takasago
International Corporation (USA)
Takeda
Pharmaceuticals U.S.A., Inc.
Tallgrass
Energy Partners, LP
Tanner
Medical Center
Targa
Resources
Target
Corporation
TaskUs,
Inc.
TaxAct,
Inc.
Taylor
Morrison Home Corporation
TBK
BANK
TC Energy
- Energy Group
TC Energy
- PipeLines
TD Bank,
N.A.
Teacher
Retirement System of Texas
TECO
Energy
Tecumseh
Products Company
Teleflora
Telephone
& Data Systems, Inc. - TDS Telecommunications Corp.
Telephone
& Data Systems, Inc. - U. S. Cellular
Tellurian,
Inc.
Telstra
USA
TELUS
International (U.S.) Corporation.
Tempur
Sealy
Tenaris,
Inc. USA
Tenerity
Tenet
Healthcare Corporation
Ternium
USA, Inc.
Terracon
Consultants, Inc.
Terumo
Americas Holding, Inc.
Terumo
BCT, Inc.
Terumo
Medical Corporation
Tetra
Pak United States
Texas
Children’s Hospital System
Texas
Health Resources, Inc.
Texas
Life Insurance Company
Texas
Mutual Insurance Company
Textron,
Inc.
Textron,
Inc. - Airborne Solutions
Textron,
Inc. - Bell |
Textron,
Inc. - Kautex
Textron,
Inc. - Textron Aviation
Textron,
Inc. - Textron Financial Corporation
Textron,
Inc. - Textron Specialized Vehicles
Textron,
Inc. - Textron Systems
TGS
NOPEC
The
Aerospace Corporation
The
Allstate Corporation
The
American College of Surgeons
The
Annie E. Casey Foundation
The
Beck Group
The
Boeing Company
The
Boeing Company - Insitu, Inc.
The
Boyd Group
The
Capital Group Companies, Inc.
The
Chamberlain Group, LLC
The
Charles Stark Draper Laboratory
The
Children’s Hospital of Philadelphia (CHOP)
The
Church of Jesus Christ of Latter-day Saints
The
Clorox Company
The
Coca-Cola Company
The
Commonwealth of Virginia - Department of Accounts
The
Commonwealth of Virginia - Department of Aviation
The
Commonwealth of Virginia - Department of Corrections
The
Commonwealth of Virginia - Department of Health
The
Commonwealth of Virginia - Department of Motor Vehicles
The
Commonwealth of Virginia - Department of the Treasury
The
Commonwealth of Virginia - University of Virginia
The
Container Store, Inc.
The
Cooper Companies, Inc.
The
Cooper Companies, Inc. - CooperVision
The
Doctors Company
The
Doe Run Company
The
E.W. Scripps Company
The
E.W. Scripps Company - KGUN - Tucson - TV
The
E.W. Scripps Company - KMGH - TV
The
E.W. Scripps Company - KMTV - Omaha-TV
The
E.W. Scripps Company - KNXV-TV |
The
E.W. Scripps Company - KSHB-TV
The
E.W. Scripps Company - KSTU - TV Salt Lake City
The
E.W. Scripps Company - WEWS-TV
The
E.W. Scripps Company - WLEX - TV - Lexington
The
E.W. Scripps Company - WTMJ - Milwaukee - TV
The
E.W. Scripps Company - WXYZ-TV
The
Estee Lauder Companies, Inc.
The
Freeman Company
The
Fresh Market - Store Support Center
The
Gilbert Company, LLC
The
Guardian Life Insurance Company of America
The
Hartz Mountain Corporation
The
Heritage Group
The
Honest Company, Inc.
The
Irvine Company, LLC
The
Jackson Laboratory
The
Johns Hopkins Hospital
The
Johns Hopkins University - Applied Physics Laboratory
The
Kraft Heinz Company
The
Kroger Co.
The
Methodist Hospital System
The
Metropolitan Museum of Art
The
MITRE Corporation
The
Mosaic Company
The
National Academies of Sciences, Engineering, and Medicine
The
New York Public Library (NYPL)
The
Nielsen Company
The
North West Company
The
Options Clearing Corporation (OCC)
The
Pennsylvania State University (Penn State)
The
Prime Group, Inc.
The
QT Company
The
Rosewood Corporation
The
Scripps Research Institute
The
Sherwin Williams Co - Performance Coatings Grp, Global Packaging, Coating Resins & Colorants
The
Sherwin Williams Company
The
Sherwin Williams Company - Consumer Brands Group
The
Sherwin Williams Company - Consumer Brands |
| | |
68 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
| | |
Group,
Consumer North America Division
The
Sherwin Williams Company - Global Supply Chain
The
Sherwin Williams Company - Performance Coatings Group
The
Sherwin Williams Company - Performance Coatings Group, General Industrial
The
Sherwin Williams Company - Performance Coatings Group, Global Packaging
The
Sherwin Williams Company - Performance Coatings Group, Global Packaging, Coil Coatings Business
The
Sherwin Williams Company - Performance Coatings Group, Industrial Wood
The
Sherwin-Williams Company - Performance Coatings Group, Automotive
The
Sherwin-Williams Company - Performance Coatings Group, Protective & Marine
The
Sherwin-Williams Company - The Americas Group
The
Stratton Corporation
The
Sundt Companies, Inc.
The
Taubman Company, LLC
The
TJX Companies, Inc.
The
Travelers Companies, Inc.
The
University of Chicago
The
University of Texas System
The
University of Texas System - Oil & Gas Division
The
University of Texas System - The University of Texas at Arlington
The
University of Texas System - The University of Texas at Dallas
The
University of Texas System - The University of Texas at El Paso
The
University of Texas System - The University of Texas at Tyler
The
University of Texas System - The University of Texas Medical Branch at Galveston
The
University of Texas System - The University of Texas Rio Grande Valley
The
University of Texas System - University of Texas Health Science
The
University of Texas System - University of Texas Health Science Center at San Antonio
The
University of Texas System - University of Texas Health Science Center at Tyler |
The
University of Texas System - University of Texas MD Anderson Cancer Center
The
University of Texas System - University of Texas Southwestern Medical Center
The
Vanguard Group, Inc.
The
Walt Disney Company
The
Walt Disney Company - Disney Parks, Experiences & Products
The
Williams Companies, Inc.
The
Wonderful Company
The
Wonderful Company - Roll Law Group
Thelios
US
Thermo
King Corporation
Thermon
Group Holdings, Inc.
Third
Bridge (US)
Thomson
Thomson
Reuters
Thorntons
Thrivent
Financial
ThyssenKrupp
AG (US)
Tiffany
& Co. US
Title
Nine
Title
Resource Group
TK Elevator
United States BU NA
TK Elevator
United States Corporate B-1
TMEIC
Corporation
TODO1
Services Inc.
Tokai
Carbon US Holdings Inc.
Tokio
Marine Highland
Tokyo
Electron
Toll
Global Forwarding (USA), Inc.
TOMS
Shoes, LLC
Torrid,
LLC
Toshiba
America, Inc.
Total
Quality Logistics
TotalEnergies
US
Tower
Hill Insurance Group
Toyota
Boshoku America, Inc.
Toyota
North America
TPC
Group, LLC
TPI
Composites, Inc.
Tractor
Supply Company
Trane
Latin America
Trane
Technologies Company, LLC
Trane
Technologies Company, LLC - CFO
Trane
Technologies Company, LLC - Trane Comfort Specialist |
Trane
Technologies Financial Services Corporation
Trane
U.S., Inc.
Transamerica
- Life Insurance Company
TransCanada
Corporation (US)
Transcontinental
TransMontaigne
Partners, LLC
Transocean
Travel
+ Leisure Co.
Travere
Therapeutics, Inc.
Treasury
Wine Estates Americas Company
TreeHouse
Foods, Inc.
Trelleborg
Wheel Systems Americas, Inc.
Tri
Counties Bank
Tri-Arrows
Aluminum Inc.
Tricon
American Homes
TriHealth,
Inc.
Trimble,
Inc.
TRIMEDX,
LLC
Trinchero
Family Estates dba Sutter Home Winery
Trinity
Church Wall Street
Trinity
Health - St. Joseph Mercy - Oakland
Trinity
Industries
Trinseo
Triumph
Group, Inc.
True
Partners Consulting, LLC
TruGreen
Limited Partnership
Truist
Financial Corporation
TSA
TTEC
Holdings, Inc.
TTI
Inc.
TTM
Technologies
Tufts
Medical Center Inc.
Tufts
University
Tupperware
Brands Corporation
Turner
Construction Company
TUV
SUD America, Inc.
Twin-Star
International
Tyson
Foods, Inc.
U.S.
Pharmacopeia Convention
Uber
Technologies, Inc.
UCB,
Inc.
UCHealth
UChicago
Medicine
Ulteig
Engineers, Inc.
Ultimate
Medical Academy, LLC
Ultragenyx
Pharmaceutical
UMB
Financial Corporation |
UMUC
Ventures
Under
Armour
UniFirst
Corporation
UNITE
HERE HEALTH
United
Airlines Holdings, Inc.
United
Launch Alliance
United
Malt Group United States
United
Natural Foods, Inc.
United
Parcel Service, Inc.
United
Properties Investment, LLC
United
Rentals, Inc.
United
States Olympic Committee (USOC)
United
States Steel Corporation
United
States Sugar Corporation
United
Therapeutics Corporation
UnitedHealth
Group
UnitedHealth
Group - Surgical Care Affiliates
UnityPoint
Health
Univar
Solutions, Inc.
Universal
Health Services (UHS)
Universal
Pressure Pumping, Inc.
University
Health
University
of California - Berkeley
University
of California - Davis
University
of California - Irvine
University
of California -Los Angeles
University
of California - Merced
University
of California - Riverside
University
of California - San Diego
University
of California - San Francisco
University
of California - Santa Barbara
University
of California - Santa Cruz
University
of California (UC)
University
of Central Florida (UCF)
University
of Colorado Boulder
University
of Colorado System
University
of Florida
University
of Houston-Clear Lake
University
of Kansas (KU)
University
of Massachusetts Systems Office
University
of Michigan
University
of Minnesota
University
of Notre Dame |
| | |
69 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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University
of Pittsburgh
University
of Wisconsin Credit Union
Upfield
US, Inc.
UPM
- Communication Papers
UPM
- Fibres
UPM-Kymmene,
Inc. - Raflatac, Inc.
UPM-Kymmene,
Inc. - Specialty Papers
Uponor,
Inc.
Upsher-Smith
Laboratories, LLC
Urban
Oil & Gas Group
Urban
Outfitters, Inc.
US
Foods Holding Corp.
US
LBM Holdings
US
Synthetic Corporation
US
WorldMeds, LLC
UW
Health
Vail
Resorts, Inc.
Valaris
Limited
Valent
USA, LLC
Valero
Energy Corporation
Vallourec
Star, LP
Vallourec
Tube-Alloy, LLC
Vallourec
USA Corporation
Valmet,
Inc.
VAM
USA, LLC
Vanda
Pharmaceuticals, Inc.
Vanderbilt
University
Vanderbilt
University Medical Center
Varroc
Lighting Systems, Inc.
VCU
Health System Authority
VELUX
America, LLC
Ventas,
Inc.
Ventech
Solutions
Ventura
Foods, LLC
Veran
Medical Technologies Inc.
Verathon,
Inc.
Vericast
Veritiv
Corporation
Versant
Health
Verso
Corporation
Vertex
Pharmaceuticals, Inc.
Veryan
USA
Vestas
American Wind Tech
Vestas
Blades America, Inc.
Vestas
Nacelles America
Vestas
Towers America, Inc.
VF
Corporation - Altra
VF
Corporation - Icebreaker |
VF Corporation
- JanSport
VF Corporation
- Kipling
VF Corporation
- Smartwool
VF Corporation
- The North Face
VF Corporation
- Timberland
VF Corporation
- Vans
VF Corporation
- Williamson-Dickie
VF Corporation
(VFC)
Viatris,
Inc.
Vicinity
Energy
Victoria’s
Secret & Co.
Videojet
Vinson
& Elkins, LLP
Virbac
Corporation
Virtua
Health, Inc.
Viskase
Companies, Inc.
Vistra
Corp.
Vital
Proteins, LLC
Vitamix
Holdings Co
Vitesco
Technologies USA LLC
Vizient
VMware,
Inc.
Volkswagen
Credit, Inc.
Volkswagen
Group of America, Inc.
Volvo
Group North America
Vontier
W. L.
Gore & Associates, Inc.
W.R.
Grace & Co.
W.W.
Grainger
Wakefern
Food Corporation
Walgreens
Boots Alliance - Walgreen Co.
Walmart,
Inc.
WANdisco
WarnerMedia
LLC
Washington
University in St. Louis
Waste
Management, Inc.
Watches
& Jewelry (United States)
Waters
Corporation
Watts
Water Technologies
Wayne
Farms, LLC
Weatherford
International, LLC
Webasto
Roof Systems Americas
Weber-Stephen
Products, LLC
Webster
Financial Corporation
Wegmans
Food Markets, Inc.
Weil,
Gotshal & Manges, LLP
Welbilt,
Inc. |
Wellmark
BlueCross BlueShield
Wells
Enterprises, Inc.
Wells
Fargo & Company
WellSpan
Health
WernerCo
WESCO
International, Inc.
West
Bend Mutual Insurance Company
West
Fraser, Inc.
West
Pharmaceutical Services, Inc.
West
Virginia Higher Education Policy Commission
Western
& Southern Financial Group
Western
Area Power Administration
Western
Foods, LLC
Western
Growers Assurance Trust
Western
Midstream
Western
Milling, LLC
Western
National Group
Western
Union Corporation
Westerra
Credit Union
Westfield
Insurance
Westfield,
LLC
Westinghouse
Electric Co
Westlake
Chemical Corporation
Westmoreland
Mining, LLC
Westrock
Company
Weyerhaeuser
/ Timberlands Division
Weyerhaeuser
/ Wood Products Divisions
Weyerhaeuser
Company
WGL
Holdings, Inc. - Washington Gas
Wheels,
Inc.
Whirlpool
Corporation
WhiteWater
Midstream
WideOpenWest,
Inc.
Wilbur-Ellis
Wild
Fork Foods
William
Marsh Rice University, Inc.
Willscot
Mobile Mini
Wilmer
Cutler Pickering Hale and Dorr, LLP
Wilton
Brands
Winc
Inc.
Winpak
Portion Packaging, Inc.
Winsome
Truth
Wonderful
Sales
WoodmenLife |
Woodside
Electronics Corporation
Woodward,
Inc.
Workiva
Inc.
World
Wide Technology Holding, Inc.
World
Wrestling Entertainment, Inc.
Worthington
Industries
WSP
USA
WuXi
Biologics
Wyndham
Worldwide - Wyndham Hotels and Resorts
X-Rite
Xcel
Energy, Inc.
Xcel
Energy, Inc. - Southwestern Public Service Co.
Xellia
Pharmaceuticals USA
XPO
Logistics, Inc.
Yale-New
Haven Hospital
Yanfeng
US Automotive Interior Systems I, LLC
Yanfeng
US Automotive Interior Systems II, LLC
Yanmar
America Corporation
Yazaki
North America, Inc.
YMCA
of the North
Yoh
Young
Living Essential Oils
Youngers
and Sons Manufacturing
Zachry
Group
Zenith
American Solutions
Ziegler
CAT
Zim
American Integrated Shipping Services Company, Inc.
Zimmer
Biomet Holdings, Inc.
ZimVie
Zions
Bancorporation
Zobele
USA, Inc.
Zoetis,
Inc.
ZOLL
Medical Corporation
Zovio,
Inc.
Zumiez,
Inc.
Zurich
North America
Zurn
Water Solutions Corp.
Zymeworks |
| | |
70 | Appendix A | Notice of 2024 Annual Meeting & Proxy Statement // ESCO Technologies Inc. |
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01
- Janice L. Hess 02 - Bryan H. Sayler For Withhold For Withhold 22DV Using a black ink pen, mark your votes with an X as shown in this
example. Please do not write outside the designated areas. 03WNLA + + A Proposals — The Board recommends a vote FOR all nominees
and FOR Proposals 2 and 3. 2. An advisory vote to approve the compensation of the Company’s executive officers 3. To ratify the
appointment of the Company’s independent registered public accounting firm for the 2024 fiscal year 1. Election of Directors:
For Against Abstain Please sign exactly as your name(s) appears hereon. Joint owners should each sign. When signing as attorney, executor,
administrator, trustee, guardian, or custodian, please give full title. If signing on behalf of an entity, please sign in entity name
by authorized officer or other authorized person and give full title. Date (mm/dd/yyyy) — Please print date below. Signature 1
— Please keep signature within the box. Signature 2 — Please keep signature within the box. B Authorized Signatures —
This section must be completed for your vote to be counted. — Date and Sign Below q IF VOTING BY MAIL, SIGN, DETACH AND RETURN
THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q Annual Meeting Proxy Card For Against Abstain You may vote online or by phone instead
of mailing this card. Online Go to www.investorvote.com/ESE or scan the QR code — login details are located in the shaded bar
below. Save paper, time and money! Sign up for electronic delivery at www.investorvote.com/ESE Phone Call toll free 1-800-652-VOTE (8683)
within the USA, US territories and Canada Votes submitted electronically must be received by 1:00 A.M., Eastern Standard Time, on February
7, 2024. Your vote matters – here’s how to vote!
Small
steps make an impact. Help the environment by consenting to receive electronic delivery, sign up at www.investorvote.com/ESE Notice of
2024 Annual Meeting of Shareholders Proxy Solicited by Board of Directors for Annual Meeting — February 7, 2024 Christopher L.
Tucker and David M. Schatz, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares
of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Shareholders
of ESCO Technologies Inc. to be held on February 7, 2024 at the Renaissance Austin Hotel, 9721 Arboretum Boulevard, Austin, Texas 78759,
beginning at 8:00 A.M. Central Standard Time, and at any postponement or adjournment thereof. Shares represented by this proxy will be
voted as indicated hereon by the shareholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees
and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before
the meeting. (Items to be voted appear on reverse side) Proxy — ESCO Technologies Inc. q IF VOTING BY MAIL, SIGN, DETACH AND RETURN
THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q C Non-Voting Items + + Change of Address — Please print new address below. Comments
— Please print your comments below. Meeting Attendance Mark box to the right if you plan to attend the Annual Meeting.
www.investorvote.com/ESE
Step 1: Go to www.investorvote.com/ESE. Step 2: Click on the icon on the right to view meeting materials. Step 3: Return to the investorvote.com
window and follow the instructions on the screen to log in. Online Go to www.investorvote.com/ESE or scan the QR code — login
details are located in the shaded bar below. The Sample Company Shareholder Meeting Notice 03WNNA + + Important Notice Regarding the
Availability of Proxy Materials for the ESCO Technologies Inc. 2024 Annual Shareholder Meeting to be Held on February 7, 2024 Under Securities
and Exchange Commission rules, you are receiving this notice that the proxy materials for the annual shareholders’ meeting are
available on the Internet. Follow the instructions below to view the materials and vote online or request a copy. The items to be voted
on and location of the annual meeting are on the reverse side. Your vote is important! This communication presents only an overview of
the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important
information contained in the proxy materials before voting. The 2023 proxy statement and annual report to shareholders are available
at: Obtaining a Copy of the Proxy Materials – If you want to receive a copy of the proxy materials, you must request one. There
is no charge to you for requesting a copy. Please make your request as instructed on the reverse side on or before January 24, 2024 to
facilitate timely delivery. 2NOT Easy Online Access — View your proxy materials and vote. When you go online, you can also help
the environment by consenting to receive electronic delivery of future materials. Votes submitted electronically must be received by
1:00 a.m., Eastern Standard Time, on February 7, 2024. Step 4: Make your selections as instructed on each screen for your delivery preferences.
Step 5: Vote your shares.
Here’s
how to order a copy of the proxy materials and select delivery preferences: Current and future delivery requests can be submitted using
the options below. If you request an email copy, you will receive an email with a link to the current meeting materials. PLEASE NOTE:
You must use the number in the shaded bar on the reverse side when requesting a copy of the proxy materials. — Internet –
Go to www.investorvote.com/ESE. — Phone – Call us free of charge at 1-866-641-4276. — Email – Send an email
to investorvote@computershare.com with “Proxy Materials ESCO Technologies Inc.” in the subject line. Include your full
name and address, plus the number located in the shaded bar on the reverse side, and state that you want a paper copy of the meeting
materials. To facilitate timely delivery, requests for a paper copy of proxy materials must be received by January 24, 2024. The 2024
Annual Meeting of Shareholders of ESCO Technologies Inc. will be held on February 7, 2024 at the Renaissance Austin Hotel, 9721 Arboretum
Boulevard, Austin, Texas 78759, beginning at 8:00 A.M. Central Standard Time. Proposals to be voted on at the meeting are listed below
along with the Board of Directors’ recommendations. The Board of Directors recommends a vote FOR all the nominees and FOR Proposals
2 and 3: 1. To elect Janice L. Hess and Bryan H. Sayler as directors of the company to serve for three-year terms expiring in 2027. 2.
An advisory vote to approve the compensation of the Company’s executive officers. 3. To ratify the appointment of the Company’s
independent registered public accounting firm for the 2024 fiscal year. PLEASE NOTE – YOU CANNOT VOTE BY RETURNING THIS NOTICE.
To vote your shares you must go online or request a paper copy of the proxy materials to receive a proxy card. If you wish to attend
and vote at the meeting, please bring this notice with you. Shareholder Meeting Notice