Company: AOS
Filing Date: 2025-02-27
Form Type: DEF 14A
Source: 0001193125-25-037641
Chunk: 41

Company: SMITH A O CORP
Filing Date: 2025-02-27
Form: DEF 14A
Chunk 41
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 EBIT of $799.1 million and corporate net sales of $4.0258 billion. The goal of the plan was to keep our management focused on providing value to stockholders by incorporating both a profitability measure and a growth measure. Eighty percent (80%) of the incentive opportunity was based on EBIT and twenty percent (20%) on net sales. EBIT is calculated by subtracting our cost of goods sold and operating expenses from revenue before interest and taxes. Net sales is calculated by subtracting returns, allowances and discounts from gross sales. The PCC took into account market practice in the choice and number of measures, and we believe that limiting the net sales measure to twenty percent (20%) of the total incentive opportunity mitigates the risk of executives focusing on growth at the expense of profitability. We expect to use these financial measures for 2025. We followed a similar approach for our business unit executives. As a business unit executive, seventy percent (70%) of Mr. O’Brien’s annual incentive for 2024 was based on two business unit-based measures: business unit PEBIT weighted at eighty percent (80%) and business unit net sales weighted at twenty percent (20%) of this portion. The balance of Mr. O’Brien’s annual incentive was linked to our corporate EBIT and corporate net sales goals. We achieved 68.1% of the corporate EBIT incentive bonus target and 72.7% of the corporate net sales incentive bonus target, for an overall corporate bonus achievement of 69.0%. The North America Water Heating business unit achieved 74.6% of its PEBIT incentive bonus target and 74.5% of its net sales incentive target, with an overall achievement of 74.5%. Accordingly, the named executive officers were awarded incentive compensation bonuses set forth in the table below. 2024 Annual Incentive Awards

| Name               |     | Amount |         |
|:-------------------|:----|:-------|--------:|
| Kevin J. Wheeler   |     | $      | 966,000 |
| Charles T. Lauber  |     |        | 360,000 |
| Stephen M. Shafer1 |     |        | 491,000 |
| James F. Stern     |     |        | 313,000 |
| Stephen D. O’Brien |     |        | 206,000 |
| Mark A. Petrarca2  |     |        | 169,000 |

2025 Proxy Statement