Company: AOS
Filing Date: 2025-02-27
Form Type: DEF 14A
Source: 0001193125-25-037641
Chunk: 39

Company: SMITH A O CORP
Filing Date: 2025-02-27
Form: DEF 14A
Chunk 39
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Each of these components of the executive compensation package is discussed below. Base Salary Base salary provides the executive with a consistent, market competitive stream of income on a semimonthly basis. Absent unusual circumstances, we review base salary levels annually, with adjustments effective January 1. The chairman and chief executive officer considers each senior executive individually for base salary actions and recommends appropriate adjustments. The PCC annually evaluates the appropriate base salary for the chairman and chief executive officer and reviews and approves the chairman and chief executive officer’s recommendations for the other named executive officers. When considering base salary increases, consideration is given to experience, individual performance, level of contribution, pay levels relative to market pay practices, as well as our overall financial condition. While the chairman and chief executive officer recommends compensation adjustments for the other named executive officers, his recommendations must be approved and authorized by the PCC. The chairman and chief executive officer and the PCC rely upon competitive survey data from WTW and their own diverse experiences with executive compensation when making compensation decisions. 2025 Proxy Statement 31

Executive Compensation In reviewing and approving individual base salary adjustments for the named executive officers for 2024, the PCC relied upon salary data for comparable positions from the 2023 WTW Executive Compensation Database, which was aged 4.0% to reflect anticipated market movement from the 2023 survey through year-end2024. Effective January 1, 2024, the PCC authorized increases of 4.0% to Messrs. Wheeler, Lauber, Stern, and Petrarca. Mr. O’Brien received an increase of 21.6% as he was promoted to president of the North America Water Heating business unit. Mr. Shafer joined the company on March 18, 2024. In light of his unique skills and expected future contributions to our organization, we set Mr. Shafer’s salary at a level higher than our typical target range for base salary of 80% to 120% of the market median. In reviewing 2025 base salaries at its December 2024 meeting, the PCC approved increases of 3.5% for Messrs. Wheeler, Lauber, Shafer, and Stern. Mr. O’Brien received an increase of 8.5% recognizing continued advancement in his relatively new role. Mr. Petrarca retired from the company on September 3, 2024. Based upon input from WTW, we believe that the 2025 base salaries for our named executive officers are in the