Company: ST
Filing Date: 2025-04-29
Form Type: DEF 14A
Source: 0001477294-25-000059
Chunk: 27

Company: Sensata Technologies Holding plc
Filing Date: 2025-04-29
Form: DEF 14A
Chunk 27
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  Adjusted Earnings before Interest is defined as net income, determined in accordance with U.S. GAAP, adjusted to exclude interest expense, as well as the following non-GAAP items, which comprise income or expense amounts recognized in connection with the following: depreciation and amortization related to the step-up to fair value of assets obtained through business combinations, amounts related to debt financings and other transactions, amounts related to restructuring, exit, and other activities, deferred gains or losses on our commodity forward contracts, and deferred income and other tax amounts. Total Invested Capital is defined as the trailing five quarter average of the sum of shareholders' equity, long-term debt, net deferred tax liabilities, and long-term finance lease and other financing obligations. |

Our overall compensation program is structured to both pay for performance, and to motivate executives to balance the short- and long-term interests of our shareholders. The Compensation Committee believes that most of the compensation for NEOs should be "at risk" in the form of an annual incentive cash bonus and equity awards granted under our long-term incentive ("LTI") program. Payouts under the annual incentive bonus are dependent on, and tied to, achievement of annual performance goals set by the Compensation Committee. Equity awards granted under the 2024 LTI program include time-based restricted stock units ("RSUs"), which vest ratably across three years, and performance-based restricted stock units ("PRSUs"), which are focused on our TSR compared to peers and ROIC over a three-year period. The realized value of RSUs is tied to our stock performance, and the realized value of PRSUs is tied to our stock performance and long-term operating performance.

| 2025 PROXY STATEMENT - PAGE 30 |

#### 2024 Compensation Program Performance
In 2024, we returned to pre-COVID levels of cash conversion as we improved working capital by reducing inventory levels and controlling capital expenditures. Free cash flow conversion as a percent of adjusted net income was 76%, and we generated $393 million of free cash flow, which was a year-over-year increase of 44%. Despite increasing adjusted operating income margin for four consecutive quarters beginning with Q1 2024, our 2024 adjusted operating income margin of 19.0% was below plan.

We retired $700 million of bonds early through a combination of $200 million in corporate cash and proceeds from a $500 million bond offering maturing in 2032. Additionally, we returned $72 million of capital to shareholders through our dividend and