Company: AOS
Filing Date: 2025-02-27
Form Type: DEF 14A
Source: 0001193125-25-037641
Chunk: 51

Company: SMITH A O CORP
Filing Date: 2025-02-27
Form: DEF 14A
Chunk 51
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 the Internal Revenue Code, any compensation that we pay to covered employees pursuant to compensation arrangements, even if performance-based, counts towards the $1,000,000 deduction limit. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, we anticipate that some of the compensation that we provide to our executive officers may not be deductible. Prohibition on Hedging and Pledging We have a policy that prohibits all directors, officers and employees from entering into transactions that hedge or pledge our company’s securities. Without limitation, the prohibition on hedging includes the purchase of any financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our company’s securities. 2025 Proxy Statement 39

Executive Compensation

Clawbacks – Recoupment Policy for Executive Compensation

We maintain a Recoupment Policy for Incentive Compensation that complies with the SEC’s and NYSE’s clawback policy requirements under section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”) by requiring us to recover incentive-based compensation erroneously awarded to executive officers due to material accounting restatements. The policy also provides the company with discretion to recover incentive compensation beyond SEC and NYSE requirements in two ways: (i) it can be applied globally to all employees who receive equity-based incentive compensation under the company’s Combined Incentive Compensation Plan in the event of a material accounting restatement, and (ii) it can be applied globally to all employees who engage in any conduct or have direct knowledge that another person has engaged in any conduct that is materially adverse to the company and fails to take appropriate action on the basis of such knowledge. The conduct described in (ii) includes, but is not limited to, conduct that warrants or could warrant the covered employee’s dismissal; or is a violation of the company’s Guiding Principles, or any law, regulation or listing standard, whether or not such detrimental conduct results in criminal prosecution or sanctions against the covered employee.

The PCC believes that implementing this policy for all awards issued under our various incentive plans, including our Combined Incentive Compensation Plan, is important to help ensure that our executive officers monitor and maintain the accuracy of our reported financial results and comply with all regulations and our code of conduct. Further, the PCC believes that this policy aligns our executive officers’