Company: AOS
Filing Date: 2025-02-27
Form Type: DEF 14A
Source: 0001193125-25-037641
Chunk: 45

Company: SMITH A O CORP
Filing Date: 2025-02-27
Form: DEF 14A
Chunk 45
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%               |
| 16                                  |     | 100% – Target    |
| 20                                  |     | 150% – Maximum   |

Through December 2024, the performance stock we granted in 2024 had an estimated value of approximately 150.0% of shares granted. At target, the combined value of the three components of executive long-term incentives (restricted stock units, performance cash and performance stock) should represent long-term incentive awards levels within a range around market median consistent with the WTW survey, subject to limited exceptions for special circumstances. Based upon the PCC’s October 2024 analysis, target long-term incentives for our named executive officers compared to market median are reflected on the table in the Long-Term Incentive Compensation discussion above. 2025 Proxy Statement 35

Executive Compensation 2025 Long-Term Incentive Award In 2025, the PCC will follow the same structure for the long-term incentive award as in 2024. The restricted stock unit and performance cash components of the 2025 long-term incentive award will comprise 50% and 35% of the award, respectively, with performance criteria set following the process outlined for the 2024 award. The 2025 performance stock will again have a three-year performance period based on a strategic ESG goal and will constitute 15% of the total long-term incentive. The 2025 award will be a waste reduction goal based on achievement of a landfill diversion target. This target, defined as reducing 525,000 pounds of waste at our seven largest North American plants through landfill diversion by year-end2027 from the baseline set in 2024. Landfill diversion will be achieved through waste reduction, recycling or energy recovery. Achieving the target of 525,000 pounds diverted provides 100% of the target shares, and a diversion of 787,500 pounds will provide the maximum number of shares at 150% of target. Payout of 2022-2024 Performance Cash Performance cash awarded in February 2022 for the period 2022-2024 was paid in February 2025. This award was based upon ROIC as a percent of the Cost of Capital for the three-year period (2022-2024). The cash units originally were valued at $100 per unit. Based upon our performance during the measurement period, our ROIC exceeded the Cost of Capital by 479.5%, which resulted in the performance cash being paid out at 115.9