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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

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DOVER CORPORATION 2019 PROXY Since 1955 Redefining what’s possible


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Notice of 2019 Annual Meeting of Shareholders

 

May 2, 2019

1:00 p.m. Eastern Time

Conrad Fort Lauderdale Beach

551 North Fort Lauderdale Beach Boulevard

Fort Lauderdale, Florida 33304

Dear Fellow Shareholder:

You are cordially invited to attend our Annual Meeting of Shareholders (the “Annual Meeting”) at the Conrad Fort Lauderdale Beach hotel on May 2, 2019 at 1:00 p.m., Eastern Time, to be held for the following purposes:

 

  1.

To elect nine directors.

 

  2.

To ratify the appointment of PricewaterhouseCoopers LLP (“PwC”) as our independent registered public accounting firm for 2019.

 

  3.

To approve, on an advisory basis, named executive officer (“NEO”) compensation.

 

  4.

To approve amendments to Article 15 of our Restated Certificate of Incorporation (our “charter”) to eliminate the super-majority voting requirement.

 

  5.

To approve amendments to Article 16 of our charter to eliminate the super-majority voting requirement.

 

  6.

To consider such other business as may properly come before the Annual Meeting, including any adjournments or postponements thereof.

All holders of record at the close of business on March 8, 2019 are entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements thereof. Whether or not you plan to attend the Annual Meeting, we urge you to vote your shares as soon as possible.

March 21, 2019

By authority of the Board of Directors,

Ivonne M. Cabrera

Secretary


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TABLE OF CONTENTS

 

Notice of 2019 Annual Meeting of Shareholders

  

Proxy Statement Summary

     1  

Annual Meeting Information

     1  

Items of Business

     1  

How to Cast Your Vote

     1  

Company Overview

     2  

2018 Performance Overview

     4  

CEO Succession

     5  

Board Refreshment

     5  

New Finance Committee

     5  

Shareholder Engagement

     5  

Management Proposals to Remove Super-Majority Voting Provisions

     6  

Executive Compensation

     7  

Director Nominees

     8  

Board Composition

     9  

Governance Highlights

     9  

Proposal 1 — Election of Directors

     10  

Criteria for Director Nominees

     10  

Director Nomination Process

     10  

2019 Director Nominees

     12  

Board Oversight and Governance Practices

     20  

Shareholder Engagement

     28  

Sustainability

     30  

Directors’ Compensation

     32  

Proposal 2 —  Ratification of Appointment of Independent Registered Public Accounting Firm

     34  

Audit Committee Report

     35  

Fees Paid to Independent Registered Public Accounting Firm

     36  

Pre-Approval of Services Provided by Independent Registered Public Accounting Firm

     36  

Compensation Discussion and Analysis

     38  

Executive Summary

     38  

2018 Say-on-Pay Advisory Vote and Shareholder Outreach

     40  

Dover’s Alignment with Leading Compensation Governance Practices

     41  

Compensation Process: Aligning Business Strategy and Performance

     42  

Elements of Executive Compensation

     46  

 

DOVER CORPORATION 2019 Proxy Statement i


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2019 Changes to our Executive Compensation

     53  

Other Benefits

     53  

Other Elements of Compensation

     54  

Compensation Committee Report

     56  

Executive Compensation Tables

     57  

Summary Compensation Table

     57  

Grants of Plan-Based Awards in 2018

     60  

Outstanding Equity Awards at Fiscal Year-End 2018

     62  

Option Exercises and Stock Vested in 2018

     64  

Pension Benefits through 2018

     65  

Nonqualified Deferred Compensation in 2018

     67  

Potential Payments upon Termination or Change-in-Control

     68  

Potential Payments in Connection with a Change-in-Control (Without Termination)

     72  

Potential Payments upon Termination Following a Change-in-Control

     74  

Proposal 3 —  Advisory Resolution to Approve Named Executive Officer Compensation

     75  

Management Proposals

     76  

Background of Proposals 4 and 5

     76  

Proposal 4 —  Approval of Amendments to Article 15 of Our Charter to Eliminate Super-Majority Voting Requirement

     78  

Proposal 5 —  Approval of Amendments to Article 16 of Our Charter to Eliminate Super-Majority Voting Requirement

     79  

Share Ownership Information

     80  

Security Ownership of Certain Beneficial Owners and Management

     80  

General Information About the Annual Meeting

     83  

Appendix A —  Proposed Amendment to Article Fifteenth of Restated Certificate of Incorporation to Eliminate the Super-majority Vote Requirement Explained in Proposal 4

     A-1  

Appendix B —  Proposed Amendment to Article Sixteenth of Restated Certificate of Incorporation to Eliminate the Super-majority Vote Requirement Explained in Proposal 5

     B-1  

 

DOVER CORPORATION  –  2019 Proxy Statement ii


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PROXY STATEMENT SUMMARY

Annual Meeting Information

 

Date:   May 2, 2019
Time:   1:00 p.m., Eastern Time
Record Date:   March 8, 2019
Location:  

Conrad Fort Lauderdale Beach

551 North Fort Lauderdale Beach Boulevard

Fort Lauderdale, Florida 33304

  For additional information about our Annual Meeting, please see “ General Information About The Annual Meeting”

Items of Business

There are five proposals to be voted on at the Annual Meeting:

 

 ITEM

 

  

Proposal

 

  

 

Board Voting
Recommendation

 

 

Page
Reference  

 

 ITEM 1      

   The election of nine nominees for director   

 

FOR each director nominee

 

  10

 

 ITEM 2      

  

 

The ratification of the appointment of PwC as our independent registered public accounting firm for 2019

 

   FOR   34

 ITEM 3      

  

 

An advisory resolution to approve NEO compensation

 

  

FOR

 

  75

 

 ITEM 4      

  

 

To approve amendments to Article 15 of our charter to eliminate the super-majority voting requirement

 

   FOR   78

 ITEM 5      

  

 

To approve amendments to Article 16 of our charter to eliminate the super-majority voting requirement

 

   FOR   79

How to Cast Your Vote

Even if you plan to attend the Annual Meeting in person, please cast your vote as soon as possible using one of the following methods:

 

   

Via internet by visiting www.proxyvote.com

 

   

Via telephone by calling 1-800-690-6903

 

   

Via mail by marking, signing and dating your proxy card or voting instruction form (if you received proxy materials by mail) and returning it to the address listed therein



 

DOVER CORPORATION 2019 Proxy Statement 1


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PROXY STATEMENT SUMMARY

 


 

Company Overview

Dover is a diversified global manufacturer delivering innovative equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services through three operating segments: Engineered Systems, Fluids and Refrigeration & Food Equipment. Our entrepreneurial business model encourages, promotes, and fosters deep customer engagement and collaboration, which has led to Dover’s well-established and valued reputation for providing superior customer service and industry-leading product innovation.

Our businesses are aligned in three segments structured around our key end markets and designed to support focused growth strategies. Our segment structure also allows us to leverage our scale and channel presence, and capitalize on productivity initiatives.

 

 

LOGO

Management Philosophy

 

   

Our leadership team is committed to generating shareholder value through a combination of sustained long-term profitable growth, operational excellence, and superior free cash-flow generation.

 

   

Our operating culture fosters high ethical standards that value accountability, rigor, trust, respect, and open communications, designed to allow individual growth and operational effectiveness.

 

   

Our businesses seek to be leaders in our end markets as measured by market share, customer satisfaction, growth, and return on invested capital.

 

   

Our operating structure of three business segments allows for focused acquisition activity, accelerates opportunities to identify and capture operating synergies, including global sourcing and supply chain integration, shared services, and manufacturing, and advances the development of our executive talent.

 

   

Our segment and executive management teams formulate strategy, develop strategic initiatives and goals, and oversee progress by our operating companies on these matters, and with oversight from our Board of Directors (“Board”), make capital allocation decisions regarding organic investment initiatives, major capital projects, acquisitions, and the return of capital to our shareholders.

 

   

Our businesses are committed to creating value for our customers, employees, and shareholders through sustainable business practices that protect the environment and the development of products that help our customers meet their sustainability goals.



 

DOVER CORPORATION  –  2019 Proxy Statement 2


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PROXY STATEMENT SUMMARY

 


 

Company Goals

We are committed to driving shareholder return through three key objectives:

First , we are committed to achieving organic sales growth above gross domestic product growth (or 3% to 5% annually on average) over a long-term business cycle , absent prolonged adverse economic conditions, complemented by growth through strategic acquisitions .

Second , we continue to focus on improving returns on capital and segment margins through effective cost management and productivity initiatives, including supply chain activities, targeted restructuring activities, strategic pricing, and portfolio management.

Third , we aim to generate free cash flow as a percentage of sales of approximately 8-12% through strong earnings performance, productivity improvements, and active working capital management.

We support these goals through (1) alignment of management compensation with financial objectives, (2) well-defined and actively managed mergers and acquisitions (“M&A”) processes, and (3) talent development programs.

Our Strategic Priorities to Realize Earnings and Growth Potential

 

LOGO

Near Term Strengthen Execution, Deliver on Commitments Focus on margin improvement through cost rightsizing Use portion of SG&A savings to fund key strategic initiatives — operational talent, e-commerce and digital and R&D Deliver on SG&A rightsizing initiative Improve performance in Retail Fueling & Transportation and Retail Refrigeration Continue organic growth and productivity investments Completed $1 B buyback program in 2018; opportunistically undertake repurchases Pursue bolt-on M&A around existing platforms Comprehensive footprint evaluation — Rightsizing began in 04 2018 Longer Term Realize Dover's Earnings and Growth Potential Invest behind Dover's leading businesses to capture growth potential Solidify focus on reliable execution as a key tenet of the Dover culture Further opportunity for margin improvement: footprint rationalization, automation Pursue inorganic opportunities to build out Dover platforms: gain scale, growth exposure, customer relevance, efficiency Repurchase own stock opportunistically Continue to grow dividend



 

DOVER CORPORATION  –  2019 Proxy Statement 3


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PROXY STATEMENT SUMMARY

 


 

2018 Performance Overview

 

       

US GAAP from continuing operations

  

FY2018

    

FY2017

    

D

 

Revenue ($M)

  

 

6,992

 

  

 

6,821

 

  

 

3%

 

Earnings ($M)

  

 

591

 

  

 

747

 

  

 

(21%

Diluted EPS ($)

  

 

3.89

 

  

 

4.73

 

  

 

(18%

 

Non-GAAP (1) from continuing operations

                    

Adjusted Earnings ($M)

  

 

756

 

  

 

655

 

  

 

15%

 

Adjusted diluted EPS ($)

  

 

4.97

 

  

 

4.15

 

  

 

20%

 

 

(1)

Definitions and reconciliations of Non-GAAP measures are included at the end of this proxy statement.

 

       

Apergy

Spin-off

Complete

     

•   On May 9, 2018, we completed the tax-free spin-off of Apergy Corporation (“Apergy”) , which was comprised of the upstream energy businesses previously included in our former Energy segment. The separation concluded our Board’s strategic review of our upstream energy businesses announced in September 2017, and was the culmination of a comprehensive process to determine the best separation alternatives to maximize shareholder value .

 

•   Following the spin-off, our remaining portfolio is well-positioned for long-term sustainable growth and returns with less cyclicality .

 

   
   
Capital Return Program      

•   We continued our history of providing regular capital returns to shareholders. We increased our quarterly dividend by 2%, marking our 63 rd consecutive year of dividend increases . We have the third longest record of consecutive annual dividend increases of all listed companies , as reported by Mergent’s Dividend Achievers.

 

•   We completed the $1  billion of share repurchases announced in November 2017, primarily funded with proceeds received from Apergy in connection with the consummation of the spin-off.

 

   
   
Rightsizing & Footprint Consolidation      

•   We pursued several programs in order to further optimize our operations, including (1)  rightsizing to align our cost structure in preparation for the Apergy separation, (2)  broad-based selling, general and administrative expense reductions , and (3) initiation of footprint consolidation actions .

 

   
   
Other Portfolio & Strategic Actions      

•   We made a total of two acquisitions for an aggregate consideration of $68.6 million, net of cash acquired, including the acquisition of Ettlinger , a leading manufacturer of filtering solutions for the plastics recycling industry, which enhances our ability to serve the Process Solutions end market within our Fluids segment.

 

•   We opened our new Digital Labs center in the greater Boston area which will serve as the hub for our digital strategy and platform , and also serve as an R&D Center for our Marking & Coding business.

 

   
   
Investment in Sustainable Businesses    

•   Over the past several years, we have accelerated our efforts and processes around innovation , focusing on technologies which both create tangible value for our customers and enhance the sustainable nature of our products.

 

   
   
     

LOGO

 

 

LOGO

 

   
   
     

Ø  Passive Cooling Unit utilizes existing underground energy

 

 

Ø  14 Series fueling nozzle family prevents dripping of excess fuel

 

   
           
       
Continued Focus on Cash Flow      

•   Our businesses generate annual free cash flow of approximately 8-12% of revenue . We are focused on the most efficient allocation of our capital to maximize returns on investment. To do this, we prioritize organic reinvestment to grow and strengthen our existing businesses with average annual investments in capital spending of approximately 2% to 4% of revenue with a focus on internal projects to expand markets, develop products, and improve productivity.

 

   


 

DOVER CORPORATION 2019 Proxy Statement 4


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PROXY STATEMENT SUMMARY

 


 

CEO Succession

On May 1, 2018, Richard J. Tobin became our new President and Chief Executive Officer (“CEO”) following Robert A. Livingston’s retirement. Mr. Tobin continues to serve on our Board, which he joined in August 2016. Mr. Livingston resigned as a director concurrent with his retirement. Michael F. Johnston, as independent Chair of the Board, provided continuity of oversight of management through the transition.

Mr. Tobin’s appointment is the result of our Board’s active engagement in a thoughtful and comprehensive succession planning process led by our independent Chair and the independent Chair of our Governance and Nominating Committee, who identified talented external leaders and worked with our former CEO to evaluate and develop internal candidates. Ultimately, our Board determined that Mr. Tobin’s extensive experience as a public company CEO leading complex global industrial businesses and his expertise in finance and technology made him the best candidate to lead Dover. Our Board was impressed with Mr. Tobin’s contributions as a director and is confident that he is the right leader to guide us through the next phase of our evolution.

Immediately after starting as President and CEO, Mr. Tobin performed an in-depth study of our businesses, making on-site visits, conducting management team reviews, and analyzing the three-year strategic plans for each of our operating companies. As an outgrowth of this review, he identified and began executing on strategic priorities designed to position us to realize our earnings and growth potential, including near-term initiatives to improve our margins through cost rightsizing and footprint consolidation. Mr. Tobin also has articulated our Board’s capital allocation priorities and developed a disciplined framework for portfolio enhancement and a balanced operating model for Dover. He has committed to report to shareholders in 2019 on our progress on operational improvements and capital allocation priorities as well as to present a holistic view on portfolio strategy, growth drivers, and areas for reinvestment and to articulate longer term strategic goals for the next evolution of Dover.

Board Refreshment

Our Board welcomed H. John Gilbertson, Jr. as a director in August 2018. As a former Managing Director of Goldman Sachs Group Inc. (“Goldman Sachs”), Mr. Gilbertson has extensive experience in corporate finance, capital markets, and mergers and acquisitions. The insights he gained as an advisor to clients across a broad range of industries will bring valuable perspective to our Board. Mr. Gilbertson serves on our Audit Committee and Finance Committee.

Current directors Peter T. Francis and Richard K. Lochridge are not standing for re-election and will retire from the Board effective as of the Annual Meeting. Mr. Francis has been a director since 2007, and Mr. Lochridge has been a director since 1999. The Board expresses its deep gratitude to each of Messrs. Francis and Lochridge for their guidance and significant contributions to Dover during their years of dedicated service on the Board.

New Finance Committee

The Board established a new Finance Committee comprised of independent directors in 2018. The Finance Committee assists the Board in overseeing policies, practices, strategies, and risks relating to our financial affairs, including with respect to capital allocation matters such as share repurchases, dividend policy, capital expenditures and M&A, as well as global treasury activities, insured risk management, and tax planning.

Shareholder Engagement

In 2018, we continued our focus on regularly engaging with our shareholders. We reached out to holders of over 51% of our shares outstanding, and engaged with governance professionals and/or portfolio managers at investors holding 32% of our shares outstanding. During these discussions, we discussed many topics, including our recent CEO transition, executive compensation program, and Board refreshment practices. Investors continued to express broad support for our governance structures and shared their views on matters related to shareholder rights and our



 

DOVER CORPORATION 2019 Proxy Statement 5


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PROXY STATEMENT SUMMARY

 


 

independent, well-qualified Board. Further, investors highlighted the importance of engaging with them in the future on long-term corporate strategy and sustainability initiatives. For more detailed information regarding these discussions, please see “ Shareholder Engagement ”.

These discussions provide our Board with valuable insights into our shareholders’ views. In this proxy statement, we describe the feedback we received, and acted upon, regarding several matters, including our Board’s proposals to remove super-majority voting provisions from our charter. We plan to continue to actively engage with our shareholders on a regular basis to better understand and consider their views.

Management Proposals to Remove Super-Majority Voting Provisions

Proposals 4 and 5 of this proxy statement request that shareholders approve the removal of the remaining super-majority provisions in our charter. The super-majority voting provisions are limited to (1) amendments to Article 15 of our charter relating to certain share repurchases from “interested stockholders” (defined in our charter as a beneficial holder of 5% or more of our shares, unless held for more than four years) at a per share price in excess of the applicable market price or the ability for shareholders to use cumulative voting in the election of directors once there is a “substantial stockholder” (defined in our charter as a beneficial holder of 40% or more of our shares) (Proposal 4), and (2) amendments to the provision of Article 16 of our charter that prohibits action by written consent of shareholders (Proposal 5). These provisions were originally designed to ensure that the interests of all shareholders were adequately represented in the event any of the actions contemplated by these provisions were to occur. However, the Board is aware that some shareholders oppose super-majority provisions, arguing that super-majority voting provisions may limit the ability of a majority of common shareholders to effect changes they desire.

Informed in part by engagement with our shareholders, we presented these proposals at our 2017 and 2018 Annual Meetings. The proposals were supported by holders of just over 79% of our outstanding common stock in both 2017 and 2018, a level of support below the required affirmative vote of the holders of at least 80% of our outstanding shares of common stock.

Following the 2018 meeting, we sought further shareholder input as our Board considered next steps regarding the remaining super-majority provisions. Shareholders expressed appreciation for our continued efforts to remove the provisions and acknowledged our continued responsiveness to shareholder feedback while facing the high hurdle presented by the current 80% voting requirement in our charter to approve amendments to remove the super-majority provisions. Given our proactive and continued efforts to remove the remaining super-majority provisions over the past several years, a number of investors stated that they would have been supportive if our Board did not present a management proposal to eliminate supermajority provisions in 2018. However, several shareholders continued to express a preference for simple majority voting requirements and encouraged us to put forth another management proposal to remove the remaining super-majority voting provisions in our charter. Shareholder feedback was a factor in the Board’s decision to again present these two proposals at the 2019 Annual Meeting in order to continue evolving our governance practices to ensure we operate with a best-in-class governance structure.



 

DOVER CORPORATION 2019 Proxy Statement 6


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PROXY STATEMENT SUMMARY

 


 

Executive Compensation

Our compensation program for executive officers is designed to emphasize performance-based compensation in alignment with our business strategy.

New CEO Employment Agreement

In connection with Mr. Tobin’s appointment as President and CEO and to ensure a smooth executive transition, our independent directors, after considering market data, advice from our independent compensation consultant, and other factors, including Mr. Tobin’s position as a sitting CEO, approved Dover’s entry into a three-year employment agreement with Mr. Tobin. In order to offset forfeited compensation and pension benefit from his prior company, Mr. Tobin received a one-time award when he joined Dover, subject to termination and claw-back provisions, comprised of restricted stock units (“RSUs”) and internal Total Shareholder Return (“iTSR”) performance share units and a make-whole cash payment.

We sought shareholder feedback on Mr. Tobin’s compensation arrangements after his appointment, including his one-time award. Our shareholders indicated they were supportive of the structure because it ensured a smooth transition and the Board’s ability to hire a highly qualified candidate.

2018 Executive Compensation

The following table summarizes pay mix for our CEO and other NEOs, which is highly performance based.

 

 

LOGO

TARGET CEO PAY MIX TARGET OTHER NEO PAY MIX

Executive Compensation Program Highlights

 

   

Pay-for-performance philosophy — a substantial majority of NEO pay is performance based and tied to Dover’s stock price performance

 

   

Significant portion of long-term compensation is performance based, with long-term incentives vesting over three years subject to rigorous three-year performance period

 

   

Strong share ownership guidelines for NEOs

 

   

Equity awards with anti-hedging and anti-pledging provisions



 

DOVER CORPORATION 2019 Proxy Statement 7


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PROXY STATEMENT SUMMARY

 


 

Director Nominees

Our Governance and Nominating Committee maintains an active and engaged Board through a robust refreshment process, which focuses on ensuring our Board has a diverse skill set that benefits from both the industry- and company-specific knowledge of our longer-tenured directors, as well as the fresh perspectives brought by our newer directors.

 

    NAME   OCCUPATION   INDEPENDENT  

COMMITTEES

MEMBERSHIPS*

 

OTHER PUBLIC  

COMPANY

BOARDS

 

LOGO

 

 

H. John Gilbertson, Jr.

Age: 62

Director Since: 2018

  Retired Managing Director at Goldman Sachs   Yes   A, F   0

 

LOGO

 

Kristiane C. Graham

Age: 61

Director Since: 1999

  Private Investor   Yes   C, G   0

 

LOGO

 

Michael F. Johnston

Chair of the Board

Age: 71

Director Since: 2013

  Retired CEO of Visteon Corporation   Yes   C, G   2

 

LOGO

 

Eric A. Spiegel

Age: 61

Director Since: 2017

  Former President and CEO of Siemens USA; Special Advisor at General Atlantic   Yes   A, F (Chair)   0

 

LOGO

 

Richard J. Tobin

Age: 55

Director Since: 2016

  President and CEO of Dover   No

(CEO of Dover)

    0

 

LOGO

 

Stephen M. Todd

Age: 70

Director Since: 2010

  Former Global Vice Chairman of Assurance Professional Practice of Ernst & Young Global Limited   Yes   A (Chair)   2

 

LOGO

 

Stephen K. Wagner

Age: 71

Director Since: 2010

  Former Senior Adviser, Center for Corporate Governance, Deloitte & Touche LLP   Yes   A, G (Chair)   1

 

LOGO

 

Keith E. Wandell

Age: 69

Director Since: 2015

  Former President and CEO of Harley-Davidson, Inc.   Yes   C (Chair), F   2

 

LOGO

 

Mary A. Winston

Age: 57

Director Since: 2005

 

President of WinsCo Enterprises Inc.; Former Executive Vice President and Chief Financial Officer (“CFO”) of Family Dollar Stores, Inc.

 

  Yes   C, F   2

*A = Audit Committee; C = Compensation Committee; G = Governance and Nominating Committee; F = Finance Committee



 

DOVER CORPORATION 2019 Proxy Statement 8


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PROXY STATEMENT SUMMARY

 


 

Board Composition

Upon the retirement of Messrs. Francis and Lochridge, the Board will have the following composition:

 

 

LOGO

Governance Highlights

Our Board is committed to sound governance practices designed to promote the long-term interests of shareholders and strengthen Board and management accountability. Highlights include:

 

BOARD OF DIRECTORS

 

GOVERNANCE HIGHLIGHTS

 

•  Separate independent Chair and CEO roles

 

•  All directors are independent, other than CEO

 

•  Annual election of directors

 

•  Majority voting for directors and director resignation policy in uncontested elections

 

•  Comprehensive annual individual evaluations of one-third of the directors

 

•  Regular executive sessions of independent directors

 

•  Robust succession planning

 

 

•   New Finance Committee established in 2018

 

•   Proxy access right at 3%/3 years/2 or 20% of Board/20 shareholder aggregation allowance

 

•   Strong share retention guidelines for directors and executive officers

 

•   Executive compensation driven by pay-for-performance philosophy

 

•   Executive officers not permitted to hedge or pledge company shares

 

•   Shareholder right to call special meetings at 25%

 

•   No super-majority vote required for business combinations

 

COMMITTEES & ATTENDANCE

 

SHAREHOLDER ENGAGEMENT

 

•  Average Board attendance of over 95% in 2018

 

•  Annual Board and committee evaluations

 

 

•   In 2018, reached out to holders of over 51% of outstanding shares

 

•   Engaged with holders of 32% of outstanding shares

 

•   Topics included Board oversight of our long-term business strategy, our CEO transition, key governance and compensation practices, sustainability, and our Board refreshment practices

 

•   Shareholder feedback informs Board decision-making, including re-inclusion of management proposals to eliminate super-majority vote provisions

 

 



 

DOVER CORPORATION 2019 Proxy Statement 9


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Proposal 1 — Election of Directors

Criteria for Director Nominees

The Board, in part through its delegation to the Governance and Nominating Committee, seeks to recommend qualified individuals to become members of the Board. The Board selects individuals as director nominees who, in the opinion of the Board, demonstrate the highest personal and professional integrity as well as exceptional ability and judgment, who can serve as a sounding board for our CEO on planning and policy, and who will be most effective, in connection with the other nominees to the Board, in collectively serving the long-term interests of all our shareholders.

Key areas of expertise for director nominees, which are reflected in our current director nominees, include:

 

   

 

 

   Strategic M&A

 

 

 

 

Experience with international acquisitions, post-merger integration, and portfolio restructuring

     
   

   Global Operations and Management

    Experience with cross-border transactions, global market entry and expansion, and implementation of operational efficiency
     
   

   Strategy Development and Execution

    Capital allocation and strategic planning expertise
     
   

   Capital Markets Expertise

    Experience with capital markets and complex financing transactions
     
   

   Deep and Diverse Industry Knowledge

    Experience with diversified manufacturing in many of the markets and product areas relevant to Dover’s businesses
     
   

   Risk Management Expertise

    Experience evaluating risk management policies and procedures
     
   

   Audit  and  Corporate  Governance  Matters

    Experience with assurance and audit, regulation, and financial reporting
     
   

   Human Capital Management

    Experience attracting, developing and retaining talent and building strong cultures
     
   

   Executive Leadership Experience

   

Leadership experience as former CEOs and CFOs of global public companies

 

In considering diversity in selecting director nominees, the Governance and Nominating Committee gives weight to the extent to which candidates would increase the effectiveness of the Board by broadening the mix of experience, knowledge, backgrounds, skills, ages and tenures represented among its members.

The Governance and Nominating Committee also considers our current Board composition and the projected retirement date of current directors, as well as such other factors it may deem to be in the best interests of Dover and its shareholders, including a director nominee’s leadership and operating experience (particularly as a CEO), financial and investment expertise and strategic planning experience.

The Board prefers nominees to be independent, but believes it is desirable to have our CEO on the Board as a representative of current management. Given the global reach and broad array of the types of businesses operated by Dover, the Governance and Nominating Committee highly values director nominees with multi-industry and multi-geographic experience.

Director Nomination Process

Whenever the Governance and Nominating Committee concludes that a new nominee to our Board is required or advisable, it will consider recommendations from directors, management, shareholders and, if it deems appropriate,

 

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consultants retained for that purpose. In such circumstances, it will evaluate individuals recommended by shareholders in the same manner as nominees recommended from other sources.

Shareholder Nominations for Director

Shareholders who wish to recommend an individual for nomination should send that person’s name and supporting information to the Governance and Nominating Committee, care of the Corporate Secretary at our principal executive offices, 3005 Highland Parkway, Downers Grove, Illinois, 60515, or through our communications coordinator. Shareholders who wish to directly nominate an individual for election as a director, without going through the Governance and Nominating Committee, must comply with the procedures in our by-laws. Please see “ General Information About the Annual Meeting” for nomination deadlines.

Proxy Access Shareholder Right

Following extensive engagement with our shareholders, our Board determined to adopt proxy access in February 2016, permitting a shareholder or group of up to 20 shareholders holding 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our by-laws.

 

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2019 Director Nominees

There are nine nominees for election to our Board at this Annual Meeting, each to serve until the next annual meeting of shareholders or his or her earlier removal, resignation or retirement. All of the nominees currently serve on our Board and are being proposed for re-election by our Board.

Current directors Peter T. Francis and Richard K. Lochridge are not standing for re-election and will retire from the Board effective as of the Annual Meeting.

If any nominee for election becomes unavailable or unwilling for good cause to serve as a director before the Annual Meeting, an event which we do not anticipate, the persons named as proxies will vote for a substitute nominee or nominees as may be designated by our Board, or the Board may reduce the number of directors. Directors will be elected by a majority of the votes cast in connection with their election.

 

LOGO  

H. John Gilbertson, Jr.

 

 

 

Independent Director Nominee

Age: 62

Director since 2018

 

Committees Served:    Audit, Finance

 

Business Experience : Retired Managing Director (1997 to 2012) at Goldman Sachs, a global investment banking, securities and investment management firm; also served as Advisory Director (2013 to 2015), and Partner-in-Charge, Midwest Region Investment Banking Services (2001 to 2010); prior thereto, various positions within Goldman Sachs (since 1987, except where noted). Mr. Gilbertson previously served as Managing Director at Travelers Group Inc. (1995), a financial services company; Associate, Mergers and Acquisitions at Morgan Stanley & Co. Incorporated (1985 to 1987), a financial services firm; Consultant, Corporate Strategy at Bain & Company (1982 to 1985), a management consulting firm; Assistant Treasurer, Corporate Banking at Chase Manhattan Bank (1979 to 1981), a commercial bank; and News Reporter at The Providence Journal Company (1978), a metropolitan daily newspaper.

Other Board Experience : Director and Chair of Audit Committee of Meijer, Inc. (“Meijer”)

Skills and Qualifications :

 

 

Mr. Gilbertson has extensive experience in corporate finance, capital markets, and mergers and acquisitions, and the insights he gained as an advisor to clients across a broad range of industries bring valuable perspective to our Board.

 

 

Throughout his career, Mr. Gilbertson has served as a strategic and financial advisor to his clients, forming deep relationships with companies in a range of industries including Baxter International, Walgreens, The Boeing Company, W.W. Grainger, Inc. and Exelon Corporation.

 

 

He has nearly four decades of experience in the professional and financial services industry, starting his career with Chase Manhattan Bank, then working at Bain & Company, where he lived abroad and served in a corporate strategy consulting role, next joining Morgan Stanley in mergers and acquisitions, and finally at Goldman Sachs, where he helped expand the Midwestern practice.

 

 

His deep expertise in financial management, coupled with his analytical and collaborative mindset, allow him to make invaluable contributions to our Board as it focuses on delivering greater returns from our businesses, funding investments to drive profitable growth, and enhancing shareholder value.

 

 

Mr. Gilbertson has a strong background in senior leadership development, succession planning, and organizational culture development, gained from his time at Goldman Sachs and his service as a director at Meijer, and has first-hand experience assisting in onboarding new CEOs.

 

 

He also brings to the Board considerable expertise in financial risk oversight and capital allocation.

 

 

He earned a bachelor’s degree in political economy from Dartmouth College and an MBA from Harvard University.

 

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LOGO  

Kristiane C. Graham

 

 

 

Independent Director Nominee

Age: 61

Director since 1999

 

Committees Served:    Compensation, Governance and Nominating

 

Business Experience : Private Investor.

Skills and Qualifications :

 

 

Ms. Graham’s experience as a private investor with substantial holdings of Dover stock and her shared interests in Dover, including interests through charitable organizations of which she is a director, makes her a good surrogate for our individual and retail investors.

 

 

Ms. Graham also has past experience with a commercial bank, primarily as a loan officer. She founded and operated an advisory company and a publication regarding international thoroughbred racing and now co-manages her family’s investments.

 

 

During her time on the Board, she has devoted substantial time to monitoring the development of Dover operating company leaders, enabling her to provide the Board valuable insights regarding management succession.

 

 

As a member of one of the founding families of Dover, Ms. Graham also brings to the Board a sense of Dover’s historical values, culture and strategic vision which the Board believes is beneficial as it considers various strategic planning alternatives for shaping Dover’s future.

 

LOGO  

Michael F. Johnston

 

 

 

Independent Board Chair; Independent Director Nominee

Age: 71

Director since 2013

 

Committees Served:    Compensation, Governance and Nominating

 

Business Experience :  Former CEO (from 2004 to 2008) and President and Chief Operating Officer (from 2000 to 2004) of Visteon Corporation, an automotive components supplier; former President of North America/Asia Pacific, Automotive Systems Group (from 1999 to 2000), President of Americas Automotive Group (from 1997 to 1999), and other senior management positions at Johnson Controls, Inc., an automotive and building services company. In May 2009, Visteon filed for voluntary reorganization under Chapter 11 of the U.S. Bankruptcy Code.

Other Board Experience : Director of Armstrong Flooring, Inc. and Whirlpool Corporation. Former Chairman and Director of Visteon Corporation. Former Director of Armstrong World Industries and Flowserve Corporation.

Skills and Qualifications :

 

 

Mr. Johnston brings to the Board industry insight, financial expertise and leadership experience garnered from his 17 years on the boards of global companies.

 

 

During his career, he has served as CEO of an $18 billion global manufacturer, and has been a lead Director and Chair of other major public companies.

 

 

Mr. Johnston also brings valuable corporate governance perspectives from his prior board service, while his operations experience has helped him gain knowledge and a deep understanding in manufacturing, design, innovation, engineering, accounting and finance and capital structure.

 

 

In addition, he has nearly 20 years of experience in building businesses in emerging economies.

 

 

Mr. Johnston holds a bachelor’s degree in industrial management from the University of Massachusetts and an MBA from Michigan State University.

 

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LOGO  

Eric A. Spiegel

 

 

 

Independent Director Nominee

Age: 61

Director since 2017

 

Committees Served:    Audit, Finance (Chair)

 

Business Experience : Special Advisor at General Atlantic, a private equity firm, where he supports the firm’s sector investment teams and portfolio companies by providing strategic counsel on industry trends and growth strategies. Former President and CEO (from 2010 to 2016) of Siemens USA, a global business focusing on the areas of electrification, automation and digitalization; former Managing Partner, Global Energy, Chemicals, and Power, and Managing Partner, Washington, D.C. office, and other roles at Booz & Company, Inc. (now known as Strategy&) and Booz Allen Hamilton, Inc., global consulting firms (1986 to 2010); former Associate, Energy and Industrials Practice, at Temple, Barker & Sloane, Inc., a management consulting firm (now known as Oliver Wyman) (1984 to 1985; 1980 to 1982): former Marketing and Strategy Manager at Brown Boveri & Cie (now known as ABB), a Swiss group of electrical engineering companies (1982 to 1984). In connection with his position at General Atlantic, Mr. Spiegel serves as Chair of the Board of CLEAResult, a privately held portfolio company that provides energy efficiency programs and services in North America.

Other Board Experience : Director and Audit Committee Chair of Liberty Mutual Holding Company, Inc.

Skills and Qualifications :

 

 

Mr. Spiegel is an experienced business leader with diversified, global experience who brings deep and valuable expertise in strategy development, corporate restructuring, portfolio management and M&A to our Board.

 

 

He has over 35 years of experience working with large, global companies in the energy and industrial markets, mostly recently as President and CEO of Siemens USA. At Siemens, he led strategic reviews across a portfolio of ~45 businesses in the company’s largest market with over $22 billion in revenue, 50,000 employees and over 60 manufacturing facilities. During that time, he led the acquisition, divestiture, joint venture and carve-out of over 30 business units and segments. He also executed Siemens’ “Vision 2020” initiative to optimize growth and margins in the U.S., across all sectors.

 

 

Prior to Siemens, Mr. Spiegel was a global consultant at Booz Allen Hamilton focused on complex organizations in the energy, power, chemical, water, industrial and automotive fields. At Booz, he lived, and worked with major energy clients, in Asia, the Middle East, Europe, and Latin America on projects around corporate strategy, M&A, major capital projects, cost restructuring, margin enhancement and supply chain re-design and was also closely involved with the government sector.

 

 

An expert on the global energy industry, Mr. Spiegel co-authored the book Energy Shift: Game-changing Options for Fueling the Future.

 

 

He holds a bachelor’s degree in economics from Harvard University and an MBA from the Tuck School of Business at Dartmouth College.

 

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LOGO  

Richard J. Tobin

 

 

 

Chief Executive Officer

Age: 55

Director since 2016

 

Committee Served:    None

 

Business Experience : President and CEO of Dover (since 2018): former CEO (2013 to 2018) of CNH Industrial NV (“CNH Industrial”), a global manufacturer of agricultural and construction equipment, trucks, commercial vehicles, buses, specialty vehicles and powertrain applications; former Group Chief Operating Officer of Fiat Industrial S.p.A., a global capital goods manufacturer, and President and CEO (each from 2012 to 2013) of CNH Global NV, a multinational manufacturer of agricultural and construction equipment; former CFO of CNH Global NV (2010 to 2012); former Chief Finance Officer & Head of Information Technology (2004 to 2010) of SGS Group, a multinational provider of inspection, verification, testing and certification services; and former Chief Operating Officer for North America (2002 to 2004) of SGS Group.

Skills and Qualifications :

 

 

Mr. Tobin is Dover’s current CEO. The Board believes it is desirable to have one active management representative on the Board to facilitate its access to timely and relevant information and its oversight of management’s long-term strategy, planning, and performance.

 

 

He has a broad range of industry and functional experiences acquired through regional and global leadership positions of significant responsibility and scope.

 

 

He is the former CEO of CNH Industrial, a complex international industrial company, where he led efforts to increase efficiencies, innovate through new technologies, expand geographically, and maximize the company’s portfolio of businesses.

 

 

Mr. Tobin gained extensive experience in international finance, operations, management, and information technology in his prior roles as CFO of CNH Global NV and Chief Finance Officer & Head of Information Technology at SGS Group.

 

 

He has developed deep expertise with global capital markets through his international finance leadership roles.

 

 

Prior to beginning his business career, Mr. Tobin was an officer in the United States Army.

 

 

He is a member of the Board of Trustees of the John G. Shedd Aquarium in Chicago. He formerly served on the U.S. Chamber of Commerce Board of Directors, and is a former member of the Business Roundtable. Mr. Tobin holds a bachelor of arts from Norwich University and an MBA from Drexel University.

 

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LOGO  

Stephen M. Todd

 

 

 

Independent Director Nominee

Age: 70

Director since 2010

 

Committee Served:    Audit (Chair)

 

Business Experience : Former Global Vice Chairman (from 2003 to 2010) of Assurance Professional Practice of Ernst & Young Global Limited, London, UK, an assurance, tax, transaction and advisory services firm; and prior thereto, various positions with Ernst & Young (since 1971).

Other Board Experience : Director and Audit Committee member of Apergy Corporation and Member of the Board of Trustees of PNC Funds (registered management investment company).

Skills and Qualifications :

 

 

Mr. Todd’s experience in the accounting profession makes him a valuable resource for the Board and Audit Committee.

 

 

Mr. Todd brings to the Board significant financial experience in both domestic and international business following a 40-year career at Ernst & Young where he specialized in assurance and audit.

 

 

Mr. Todd developed and directed Ernst & Young’s Global Capital Markets Centers, which provide accounting, regulatory, internal control and financial reporting services to multinational companies in connection with cross-border debt and equity securities transactions and acquisitions, making him well suited to advise the Board on capital allocation decisions, financing alternatives, and acquisition activities.

 

 

His experience, especially his years as Global Vice Chairman of Ernst & Young Global Limited’s Assurance Professional Practice and as audit partner for several multinational companies, gives him unique insights into accounting and financial issues relevant to multinational companies like Dover, and he brings the perspective of an outside auditor to the Audit Committee.

 

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LOGO  

Stephen K. Wagner

 

 

 

Independent Director Nominee

Age: 71

Director since 2010

 

Committees Served:    Audit, Governance and Nominating (Chair)

 

Business Experience : Former Senior Advisor, Center for Corporate Governance, of Deloitte & Touche LLP, an audit, financial advisory, tax and consulting firm (from 2009 to 2011); Managing Partner, Center for Corporate Governance, of Deloitte (from 2005 to 2009); Deputy Managing Partner, Innovation, Audit and Enterprise Risk, United States, of Deloitte (from 2002 to 2007); and Co-Leader, Sarbanes-Oxley Services, of Deloitte (from 2002 to 2005).

Other Board Experience : Director and Audit Committee member of Apergy Corporation

Skills and Qualifications :

 

 

Mr. Wagner’s over 30 years of experience in accounting make him a valuable resource for the Board and the Audit Committee.

 

 

His work with Sarbanes-Oxley and other corporate governance regulations, including his years as Managing Partner at Deloitte & Touche’s Center for Corporate Governance, makes him well suited to advise the Board on financial, auditing and finance-related corporate governance matters as well as risk management.

 

 

Mr. Wagner is an expert in risk oversight and co-authored a book on risk management entitled Surviving and Thriving in Uncertainty: Creating the Risk Intelligent Enterprise .

 

 

He brings to the Board an outside auditor’s perspective on matters involving audit committee procedures, internal control and accounting and financial reporting matters.

 

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LOGO  

Keith E. Wandell

 

 

 

Independent Director Nominee

Age: 69

Director since 2015

 

Committees Served:    Compensation (Chair) , Finance

 

Business Experience : Former President and CEO (from 2009 to 2015) of Harley-Davidson, Inc., a global motorcycle manufacturer; and former President and Chief Operating Officer (from 2006 to 2009), former Executive Vice President (from 2005 to 2006), former Corporate Vice President (from 1997 to 2005), former President of the Automotive Experience business (from 2003 to 2006) and President of the Power Solutions business (from 1997 to 2003) of Johnson Controls, Inc., a global manufacturer of automotive, power and building solutions.

Other Board Experience : Director of Dana Incorporated and Constellation Brands, Inc. Former Chairman of Harley Davidson, Inc. and former Director of Clarcor, Inc.

Skills and Qualifications :

 

 

Mr. Wandell brings to the Board the valuable perspective of a strategic, experienced leader with a strong record focused on growth, profitability, international expansion and innovation.

 

 

He has over 30 years of experience in diversified manufacturing businesses, most recently as the former Chairman and CEO of Harley-Davidson, Inc., where he led transformation efforts across the company’s product development, manufacturing and retail functions, focused on international expansion and implemented a restructuring plan.

 

 

Prior to joining Harley-Davidson, Inc., Mr. Wandell served as President and Chief Operating Officer of Johnson Controls, Inc. and helped manage the company’s entry into the Chinese car-battery market as well as its subsequent joint venture with China’s largest battery manufacturer.

 

 

Mr. Wandell has gained valuable insights into the effective development of executive leadership capabilities and strong corporate cultures through his experience as a senior leader at companies such as Harley-Davidson and Johnson Controls.

 

 

In addition to his significant operating, financial and leadership experience in both domestic and international business, Mr. Wandell has served on the boards of four other public companies, including the two on which he currently serves.

 

 

He holds a bachelor’s degree in business administration from Ohio University and an MBA from the University of Dayton.

 

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LOGO  

Mary A. Winston

 

 

 

Independent Director Nominee

Age: 57

Director since 2005

 

Committees Served:    Compensation, Finance

 

Business Experience : President of WinsCo Enterprises Inc., a consulting firm providing financial and board governance advisory services (since 2016); former Executive Vice President and CFO of Family Dollar Stores, Inc., a general merchandise retailer (from 2012 to 2015); former Senior Vice President and CFO of Giant Eagle, Inc., a grocery and fuel retailer (from 2008 to 2012); former President of WinsCo Financial LLC, a financial and strategic consulting firm (from 2007 to 2008); and former Executive Vice President and CFO of Scholastic Corporation, a children’s publishing and media company (from 2004 to 2007).

Other Board Experience : Director of Domtar Corporation and Acuity Brands, Inc.; Former Director of SUPERVALU INC. and Plexus Corporation.

Skills and Qualifications :

 

 

Ms. Winston brings to the Board valuable experience and expertise based on her years of broad financial management and leadership experience.

 

 

Ms. Winston, who started her career as a CPA with Arthur Andersen & Co, has extensive experience with financial, accounting and internal control matters for large public companies.

 

 

Ms. Winston served as CFO of three large companies: Family Dollar Stores, Inc., Giant Eagle, Inc. and Scholastic, Inc., as well as prior global finance leadership roles at Visteon Corporation and Pfizer, Inc. Through these experiences, she developed deep expertise in capital markets, M&A, capital structure matters, capital allocation, financial risk management, real estate financing transactions, dividend and stock repurchase programs, and investor relations.

 

 

Ms. Winston’s background and experience make her a valuable contributor to the Board on matters involving risk oversight and capital allocation, as well as executive compensation and general corporate governance matters.

 

 

She holds a bachelor’s degree in accounting from the University of Wisconsin and an MBA from Northwestern University’s Kellogg School of Management. She has been designated as a Board Leadership Fellow by the NACD and serves as Chair of the NACD Carolinas chapter.

THE BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH

OF THE NOMINEES NAMED ABOVE.

 

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Board Oversight and Governance Practices

Our Board is responsible for, and committed to, overseeing our long-term strategic development as well as managing the principal and most significant risks that we face. In carrying out this duty, our Board advises senior management to help drive long-term value creation for our shareholders. The following summarizes our Board’s key areas of oversight responsibility.

Board Oversight

 

 

KEY AREAS OF BOARD OVERSIGHT

   

  Long-Term

  Business Strategy

 

•   One of the primary responsibilities of our Board is the oversight of management’s long-term strategy and planning . Accordingly, our Board maintains a deep level of engagement with management in setting and overseeing Dover’s long-term business strategy.

 

•   The Apergy spin-off in May 2018 was the culmination of a comprehensive process publicly announced in September 2017 to determine the best separation alternatives to maximize shareholder value .

 

•   Following the spin-off, our remaining portfolio is well-positioned for long-term sustainable growth and returns with less cyclicality .

 

   
  Capital Allocation  

•   Our Board is focused on the efficient allocation of capital to drive growth and provide returns to our shareholders. Our capital allocation priorities are organic investments, strategic acquisitions, and the return of capital to our shareholders.

 

•   We consistently return cash to shareholders by paying dividends , which have increased annually over each of the last 63 years .

 

•   We also undertake share repurchases as part of our capital allocation strategy, including $1  billion of share repurchases completed in 2018 .

 

•   We employ a prudent financial policy to support our capital allocation strategy, which includes maintaining an investment grade credit rating .

 

   

  Portfolio

  Management

 

•   Businesses in our portfolio are continually evaluated for strategic fit and our acquisitions are targeted in our key growth markets which include printing and identification, refrigeration and food equipment, pumps, fueling and transport, hygienic and pharma and select energy markets.

 

   
  Risk Management  

•   Our Board has established a comprehensive enterprise risk management process to identify and manage risks , and periodically reviews the processes established by management to identify and manage risks and communicates with management about these processes.

 

•   We have established a risk assessment team consisting of senior executives, which annually, with the assistance of a consultant, oversees a risk assessment made at the segment and operating company levels and, with that information in mind, performs an assessment of the overall risks our company may face. Each quarter, this team reassesses the risks at the Dover level, the severity of these risks and the status of efforts to mitigate them and reports to the Board on that reassessment.

 

   
  Sustainability  

•   As part of its oversight of risk management, our Board reviews any material risks related to environmental and social issues .

 

•   Our Board receives periodic updates on company-wide energy and carbon performance against targets , and is regularly briefed on each segment’s productivity and safety metrics .

 

 

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KEY AREAS OF BOARD OVERSIGHT

   
  Culture  

•   We foster an operating culture with high ethical standards that values accountability, rigor, trust, respect, and open communication and is designed to encourage individual growth and operational effectiveness. We continue to make significant investments in talent development, especially in the area of operational management, and recognize that the growth and development of our employees is essential for our continued success .

 

•   As part of our commitment to strong corporate governance practices, we maintain an active and robust ethics program . Our Code of Conduct & Business Ethics applies to all employees and directors of Dover and its subsidiaries. We enforce our Code fairly and consistently, regardless of one’s position in Dover, and will not tolerate retaliation against those who report suspected misconduct in good faith.

 

   
  Succession Planning  

•   Another of the Board’s primary responsibilities is overseeing a sound Board and management succession process . The Board has developed a comprehensive plan to address management succession — both over the long term and for emergency purposes. The framework for the long-term plan includes thoughtful, deliberate monitoring of management beyond our top executives to ensure Dover continues to build a deep internal bench of talent.

 

•   The recent appointment of Mr.  Tobin as our new President and CEO in May 2018 was the result of our Board’s active engagement in a thoughtful and comprehensive succession planning process .

 

•   Our Board is also focused on its own succession plan , which drives not only our director selection efforts, but also how we approach Board and committee leadership structure and membership, with a focus on critical board skills, diversity, and independence .

 

   
  Cybersecurity  

•   The full Board is briefed on enterprise-wide cybersecurity risk management and the overall cybersecurity risk environment, and oversees major tasks related to cybersecurity risk management, periodically reviews our response capabilities, and meets with the Chief Information Officer on at least an annual basis.

 

•   Dover employs the National Institute of Standards & Technology Framework for Improving Critical Infrastructure Cybersecurity ( The NIST Framework ). This voluntary guidance developed with much private sector input provides a framework and a toolkit for organizations to manage cybersecurity risk.

 

 

 

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Corporate Governance

Our Board is committed to sound governance practices and regularly reviews and refines our profile to reflect evolving best practices and matters raised by our shareholders. The following summarizes key aspects of our governance framework.

 

 

GOVERNANCE HIGHLIGHTS

 

   

Independent Chair/Directors

 

 

•   We have an independent Chair and all directors are independent, other than our CEO.

 

   
New Finance Committee  

•   Our Board established a new Finance Committee comprised of independent directors in 2018.

 

•   The Finance Committee assists the Board in overseeing policies, practices, strategies, and risks relating to our financial affairs, including with respect to capital allocation matters such as share repurchases, dividend policy, capital expenditures and M&A, as well as global treasury activities, insured risk management, and tax planning.

 

   
Board Committee Refreshment  

•   Our Board periodically reviews committee composition and chair positions, seeking the appropriate blend of continuity and fresh perspectives on committees.

 

•   In addition to establishing a new Finance Committee, we refreshed the composition of our standing committees in 2018, including appointing new Chairs for the Audit and Compensation Committees.

 

   
Annual Majority Vote Director Elections & Mandatory Resignation Policy  

•   All of our directors are elected annually by our shareholders.

 

•   Our directors must receive a majority of the votes cast in uncontested elections to be elected.

 

•   We have a director resignation policy that requires a current director to tender his or her resignation to the Board if he or she does not receive a majority of the votes cast. The Governance and Nominating Committee will recommend to the full Board whether to accept the resignation or whether to take other action.

 

   
Proxy Access  

•   Our by-laws permit a shareholder or a group of up to 20 shareholders owning 3% or more of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials director candidates constituting up to the greater of two individuals or 20% of the Board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in our by-laws.

 

   
Special Shareholder Meetings  

•   Our by-laws provide that shareholders who hold 25% or more of our outstanding stock may call a special meeting of shareholders.

 

   
Elimination of
Super-majority Provisions
 

•   We amended our charter to eliminate the super-majority voting provision applicable to business combinations with related persons.

 

•   At this Annual Meeting, the Board is recommending to shareholders that they approve the Board’s proposals to amend our charter to remove our remaining super-majority voting provisions.

 

Board Leadership Structure

We believe that having an independent leader of the Board is important to the Board’s oversight role and decision-making involving corporate strategy, performance, succession, and other critical matters. Under our current Board

 

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leadership structure, our Board has leadership that is independent from management by way of an independent Chair. Our CEO is also a member of the Board as a management representative. We believe this is important to make information and insight directly available to the directors in their deliberations. In our view, this board leadership structure gives us an appropriate, well-functioning balance between non-management and management directors that combines experience, accountability and effective risk oversight.

Board, Committee and Individual Director Evaluations

Our Board and its committees conduct robust annual self-evaluations of their performance. In addition, our Board evaluates one-third of our directors on a rotating individual basis each year with the purpose of assisting each director to be a more effective member of the Board. New directors undergo the evaluation process in each of their first two years on the Board. Our directors believe the rotational nature of our evaluation process enables a more in-depth, comprehensive evaluation for each of our directors.

Directors’ Meetings and Attendance

During 2018, the Board met 8 times. No director attended less than 75% of the board and standing committee meetings held while he or she was a member of the Board and relevant standing committee. Average board attendance was over 95% in 2018. Our independent directors meet at regularly scheduled executive sessions at least quarterly without management representatives or non-independent directors present. The Chair of the Board presides at these sessions. We expect our directors to attend the Annual Meeting. All directors then on the Board attended the 2018 Annual Meeting.

Our directors also regularly engage with management and outside subject matter experts outside of formal meetings. Examples include developing agendas and reviewing the content of materials in advance of meetings, calls or in-person meetings with members of management to prepare for meetings, receiving periodic updates from management on significant operational or strategic developments between meetings, and, from time to time, engaging with shareholders.

Management Meetings and Site Visits

We encourage our directors to meet with senior managers throughout the enterprise and attend management’s strategic planning sessions. When considering businesses to visit, priority goes to those businesses identified as strategically important as well as those that were recently acquired. From time to time, the Board makes on-site visits to our businesses to tour the manufacturing facilities and meet face-to-face with company management and employees. These visits serve as an important tool in the Board’s succession planning process for our senior leadership team and enable a deeper understanding of our businesses and our culture.

Director Orientation and Education

All new directors participate in our director orientation program. New directors meet in-person with senior corporate and segment leaders to review and discuss our businesses, operations, strategy, end markets, governance and culture. We believe that our on-boarding approach, coupled with participation in regular Board and committee meetings, provides new directors a strong foundation in our businesses and accelerates their effectiveness to fully engage in Board deliberations.

Our Board also encourages directors to annually participate in continuing director education programs outside of the Boardroom, and we reimburse directors for their expenses associated with this participation.

Director Independence

Our Board has determined that each of the current members of the Board, except for Richard J. Tobin, who is our CEO, has no material relationship with Dover and satisfies all the criteria for being “independent” members of our Board. This includes the criteria established by the U.S. Securities and Exchange Commission (“SEC”) and the New

 

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York Stock Exchange (“NYSE”) listing standards, as well as our standards for classification as an independent director which are available on our website at www.dovercorporation.com. Our Board makes an annual determination of the independence of each nominee for director prior to his or her nomination for re-election. No director may be deemed independent unless the Board determines that he or she has no material relationship with Dover, directly or as an officer, shareholder or partner of an organization that has a material relationship with Dover.

Majority Standard for Election of Directors and Mandatory Resignation Policy

Under our by-laws and corporate governance guidelines, the voting standard in director elections is a majority of the votes cast. Under the majority standard, a director must receive more votes in favor of his or her election than votes against his or her election. Abstentions and broker non-votes do not count as votes cast with respect to a director’s election. In contested director elections (where there are more nominees than available seats on the board), the plurality standard will apply.

For an incumbent director to be nominated for re-election, he or she must submit an irrevocable resignation letter. The resignation will be contingent on the nominee not receiving a majority of the votes cast in an uncontested election and on the Board’s acceptance of the resignation. If an incumbent director fails to receive a majority of the votes cast in an uncontested election, the Governance and Nominating Committee will make a recommendation to our Board concerning the resignation. Our Board will act on the resignation within 90 days following certification of the election results, taking into account the committee’s recommendation. The Board will publicly announce its decision and, if the resignation is rejected, the rationale for its decision.

Governance Guidelines and Code of Ethics

Our Board long ago adopted written corporate governance guidelines that set forth the responsibilities of our Board and the qualifications and independence of its members and the members of its standing committees. The Board reviews these guidelines at least annually, in light of evolving best practices, shareholder feedback and the evolution of our business. In addition, our Board has a long-standing code of business conduct and ethics setting forth standards applicable to all of our companies and their employees, a code of ethics for our CEO and senior financial officers, and charters for each of its standing committees. All of these documents (referred to collectively as “governance materials”) are available on our website at www.dovercorporation.com.

Procedures for Approval of Related Person Transactions

We generally do not engage in transactions in which our senior executive officers or directors, any of their immediate family members or any of our 5% shareholders have a material interest. Should a proposed transaction or series of similar transactions involve any such persons and an amount that exceeds $120,000, it would be subject to review and approval by the Governance and Nominating Committee in accordance with a written policy and the procedures adopted by our Board, which are available with the governance materials on our website.

Under the procedures, management determines whether a proposed transaction requires review under the policy and, if so, presents the transaction to the Governance and Nominating Committee. The Governance and Nominating Committee reviews the relevant facts and circumstances of the transaction and approves or rejects the transaction. If the proposed transaction is immaterial or it is impractical or undesirable to defer the proposed transaction until the next committee meeting, the Chair of the committee decides whether to (i) approve the transaction and report the transaction at the next meeting or (ii) call a special meeting of the committee to review and approve the transaction. Should the proposed transaction involve the CEO or enough members of the Governance and Nominating Committee to prevent a quorum, the disinterested members of the committee will review the transaction and make a recommendation to the Board, and the disinterested members of the Board will then approve or reject the transaction. No director may participate in the review of any transaction in which he or she is a related person.

 

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Communication with Directors

The Audit Committee has established procedures for (i) the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters (“accounting matters”), and (ii) the confidential, anonymous submission by employees of concerns regarding questionable accounting matters. Such complaints or concerns may be submitted to Dover, care of our Corporate Secretary or through the communications coordinator, an external service provider, by mail, fax, telephone, or via the internet as published on our website. The communications coordinator forwards such communications to Dover without disclosing the identity of the sender if anonymity is requested.

Shareholders and other interested persons may also communicate with our Board and the non-management directors in any of these same manners. Such communications are forwarded to the Chair of the Governance and Nominating Committee.

Board Committees

Our Board has four standing committees — the Audit Committee, the Compensation Committee, the Governance and Nominating Committee, and the Finance Committee. The table below sets forth a summary of our committee structure and membership information.

 

         
 DIRECTOR    Audit
Committee
   Compensation
Committee
  

Governance

and

Nominating
Committee

  

Finance

Committee

 PETER T. FRANCIS*

     

     

 H. JOHN GILBERTSON, JR.

  

        

 KRISTIANE C. GRAHAM

     

  

  

 MICHAEL F. JOHNSTON

     

  

  

 RICHARD K. LOCHRIDGE*

     

     

 ERIC A. SPIEGEL

  

        

(Chair)

 RICHARD J. TOBIN

           

 STEPHEN M. TODD

  

(Chair)

        

 STEPHEN K. WAGNER

  

     

 (Chair)

  

 KEITH E. WANDELL

     

(Chair)

     

 MARY A. WINSTON

     

     

 MEETINGS IN 2018

  

9

  

7

  

4

  

4

 

*

Messrs. Francis and Lochridge are not standing for re-election and will retire from the Board effective as of the Annual Meeting, at which time the size of our Board will be reduced to 9 members.

 

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Overview of Committee Responsibilities

 

 

Audit Committee

 

 

     LOGO

 

  Stephen M. Todd (Chair)

 

  H. John Gilbertson, Jr.

  Eric A. Spiegel

  Stephen K. Wagner

  

 

Key Responsibilities

 

•   Selecting and engaging our independent registered public accounting firm (“independent auditors”)

 

•   Overseeing the work of our independent auditors and our internal audit function

 

•   Approving in advance all services to be provided by, and all fees to be paid to, our independent auditors, who report directly to the committee

 

•   Reviewing with management and the independent auditors the audit plan and results of the auditing engagement

 

•   Reviewing with management and our independent auditors the quality and adequacy of our internal control over financial reporting

 

The Audit Committee holds regular quarterly meetings at which it meets separately with each of our independent registered public accounting firm, PwC, our internal audit function, financial management and our general counsel to assess certain matters including the status of the independent audit process, management’s assessment of the effectiveness of internal control over financial reporting and the operation and effectiveness of our compliance program. In addition, the Audit Committee, as a whole, reviews and meets to discuss the contents of each Form 10-Q and Form 10-K (including the financial statements) prior to its filing with the SEC.

 

Our Board has determined that all members of the Audit Committee qualify as “audit committee financial experts” as defined in the SEC rules.

 

The Audit Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

 

 

Compensation Committee

 

 

     LOGO

 

  Keith E. Wandell (Chair)

 

  Peter T. Francis

  Kristiane C. Graham

  Michael F. Johnston

  Richard K. Lochridge

  Mary A. Winston

 

  

 

Key Responsibilities

 

The Compensation Committee, together with our independent directors, approves compensation for the CEO of Dover. The functions of the Compensation Committee also include:

 

•   Approving compensation for executive officers who report directly to the CEO (together with the CEO, “senior executive officers”)

 

•   Granting awards and approving payouts under our 2012 Equity and Cash Incentive Plan (the “LTIP”) and our Executive Officer Annual Incentive Plan (the “AIP”)

 

•   Approving changes to our executive compensation plans

 

•   Reviewing and recommending compensation for the Board

 

•   Overseeing succession planning and management development programs

 

The Compensation Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

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Governance and Nominating Committee

 

 

     LOGO

 

  Stephen K. Wagner (Chair)

 

  Kristiane C. Graham

  Michael F. Johnston

  

 

Key Responsibilities

 

•   Developing and recommending corporate governance principles to our Board

 

•   Annually reviewing the requisite skills and characteristics of board members as well as the size, composition, functioning and needs of our Board as a whole

 

•   Considering and recommending to the Board nominees for election to, or for filling any vacancy on, our Board in accordance with our by-laws, our governance guidelines, and the committee’s charter

 

•   Identifying and recommending to our Board any changes it believes desirable in the size and composition of our Board

 

•   Recommending to our Board any changes it believes desirable in structure and membership of our Board’s committees

 

The Governance and Nominating Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

 

Finance Committee

 

 

     LOGO

 

  Eric A. Spiegel (Chair)

 

  Peter T. Francis

  H. John Gilbertson, Jr.

  Keith E. Wandell

  Mary A. Winston

  

 

Key Responsibilities

 

•   Reviewing and recommending for approval by the Board proposed changes to dividend policies, stock splits, and repurchase programs

 

•   Reviewing our capital structure, liquidity, and financing plans

 

•   Reviewing and recommending for Board approval the registration and issuance of debt or equity securities

 

•   Subject to thresholds determined from time to time by the Board, reviewing and approving, or reviewing and recommending for Board approval, capital expenditures

 

•   Reviewing and approving, or recommending for Board approval, capital expenditures and M&A

 

•  Oversight of treasury, insurance, and tax planning matters.

 

The Finance Committee’s responsibilities and authority are described in greater detail in its written charter.

 

 

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Shareholder Engagement

Annual Engagement Program

In 2018, we continued our focus on regularly engaging with our shareholders. We reached out to holders of over 51% of our shares outstanding and engaged with governance professionals and portfolio managers at investors holding 32% of our shares outstanding. Our stockholder engagement team consists of senior management from our Legal, Human Resources, and Investor Relations departments and has also included our Chair from time to time. Members of our engagement team also participate in various governance forums with our shareholders and regularly engage with shareholders through industry conferences and meetings.

Our Board continues to find the feedback it receives from these discussions to be invaluable. We plan to continue our program of proactive, regular engagement to further deepen our relationship with our investors.

 

 

LOGO

 

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Shareholder Engagement in 2018

 

 

Key Items of Discussion and Feedback

   

  Long-Term

  Strategy

 

•   We discussed the recently completed spin-off of Apergy, which represented the culmination of a comprehensive process led by our Board to determine the best separation alternatives to maximize shareholder value.

 

•   We also reviewed our Board’s commitment to margin improvement, long-term investment in the business, and operational excellence.

 

   
  CEO Transition  

•   We discussed the robust succession planning process, led by our independent Chair and the independent Chair of our Governance and Nominating Committee, which resulted in the appointment of our new President and CEO, Richard J. Tobin, in May 2018.

 

•   Shareholders were supportive of the structure of Mr. Tobin’s performance-based compensation as well as his employment agreement, including the make-whole payment which ensured a smooth transition and our ability to hire a highly qualified candidate.

 

   
  Capital Allocation  

•   We discussed our Board’s capital allocation priorities — invest organically, acquire strategically, and return capital to shareholders.

 

   

  Corporate

  Governance

 

•   Our shareholders continued to express their broad support for our governance practices and shareholder rights, including special meeting right, use of annual director elections, and independent Board leadership structure, and thoughtful and active refreshment process.

 

   

  Supermajority

  Provisions

 

•   Shareholders noted appreciation for our continued efforts to remove the remaining super-majority provisions in our charter and acknowledged the high hurdle presented by the current 80% voting requirement in our charter to approve amendments to remove the super-majority provisions.

 

•   Given our proactive and continued efforts to remove the remaining super-majority provisions over the past several years, a number of investors stated that they would have been supportive if our Board did not include a management proposal to eliminate supermajority provisions in our proxy statement in 2018.

 

•   However, several shareholders continued to express a preference for simple majority voting requirements and encouraged us to put forth another management proposal to remove the remaining super-majority voting provisions.

 

   
  Sustainability  

•   We discussed how we approach sustainability from a risk management perspective, the governance of our sustainability program, and our robust goals to reduce energy usage and greenhouse emissions from operations by 20% indexed to net revenue by 2020 from a base year of 2010.

 

•   We also reviewed product innovations which demonstrate our commitment to sustainability-driven innovation as a growth opportunity for our businesses.

 

   

  Executive

  Compensation

 

•   Shareholders were supportive of our compensation program, including the effective use of our company-specific iTSR metric, viewing it as strongly incentivizing performance and value creation.

 

 

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Sustainability

We are committed to creating economic value for shareholders by developing products designed to help our customers meet their sustainability goals in response to evolving regulatory and environmental standards. We also foster sustainable business practices across our own businesses in order to reduce our greenhouse gas emissions and energy consumption.

 

 

Key Areas of Focus

 

   
  Governance  

•  Our Board oversees risk management, and periodically reviews the processes established by management to identify and manage risks, including those related to environmental and social issues. The Board is focused on our long-term business strategy, including fostering sustainability-driven innovations, and incorporates our sustainability risks and opportunities into its overall strategic decision-making. Our Board also receives periodic updates on company-wide energy and carbon performance against targets, and is regularly briefed on each segment’s operational performance including productivity and safety performance.

 

   
  Environment  

•  In 2010, in response to our concerns around global sustainability, we developed and implemented a process to conduct an inventory of our greenhouse gas emissions. Since then, we have evaluated our climate change risks and opportunities, as well as developed an energy and climate change strategy that includes goals, objectives, and related projects for reducing energy use and greenhouse gas emissions.

 

•  To further promote our sustainability efforts, we committed to reducing our overall energy and greenhouse gas intensity indexed to net revenue by 20% from 2010 to 2020. We are near our goal for reducing overall energy intensity and have surpassed our goal for reducing greenhouse gas intensity.

 

•  We believe that our focus on sustainability results in enhanced efficiency in our operations, which reduces costs, improves margins and helps us achieve operational excellence, and we will continue to work proactively to reduce our energy usage and carbon emissions amidst acquisition and business growth.

 

• We have also participated as a voluntary respondent in the Carbon Disclosure Project since 2010 and have maintained our scoring range since we began reporting.

 

   
  Human Capital  

•  We foster an operating culture with high ethical standards that values accountability, rigor, trust, respect and open communications and is designed to encourage individual growth and operational effectiveness.

 

•  We have implemented numerous workplace safety initiatives to help ensure the health and welfare of our employees.

 

•  We continue to make significant investments in talent development, especially in the area of operational management, and recognize that the growth and development of our employees is essential for our continued success.

 

 

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Key Areas of Focus

 

   

  Business Model

  & Innovation

 

•  We believe that sustainability-driven innovation presents a significant growth opportunity while contributing positively to enhanced resource efficiency and reduced waste. Accordingly, over the past several years, we have accelerated our efforts and processes around innovation, focusing on technologies which create tangible value for our customers.

 

•  Our businesses stay close to their customers, and our customers are demanding more energy-efficient products to serve their own sustainability needs. Whether related to demand for more energy efficient refrigeration cases in grocery or convenience stores, or clothing retailers using digital printing equipment requiring less water than traditional analog printing equipment, we believe we are well-positioned to have a positive impact on a broad scale.

 

   
  Climate Risk  

•  There have been no material effects upon our earnings and competitive position resulting from our compliance with laws or regulations relating to the protection of the environment. We are aware of a number of existing or upcoming regulatory initiatives intended to reduce emissions in geographies where our manufacturing and warehouse/distribution facilities are located and have evaluated the potential impact of these regulations on our businesses. We anticipate that direct impacts from regulatory actions will not be significant in the short- to medium-term. We expect the impacts associated with climate change regulation would be primarily indirect and would result in “pass through” costs from energy suppliers, suppliers of raw materials and other services related to our operations.

 

   

  Materials

  Sourcing

 

•  We have adopted a “conflict free” supply chain policy. The policy has been communicated to suppliers through our Supplier Code of Conduct, the Conflict Minerals survey process, and through efforts to implement related terms and conditions in supplier contracts.

 

 

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Directors’ Compensation

Our non-employee directors receive annual compensation in an amount our Board sets from time to time. The directors’ annual compensation is payable partly in cash and partly in common stock in an allocation our Board may adjust from time to time. If any director serves for less than a full calendar year, the compensation to be paid to that director for the year will be pro-rated as deemed appropriate by the Compensation Committee.

Our Board has adopted a policy that directors are expected to hold at any time a number of shares at least equal to the aggregate number of shares they received as the stock portion of their annual retainer during the past five years, net of an assumed 30% tax rate.

 

FOR 2018, NON-EMPLOYEE DIRECTOR COMPENSATION WAS AS FOLLOWS:

 

 Annual retainer of $250,000, payable $130,000 in common stock and $120,000 in cash

 

 

 Audit Committee Chair — additional annual cash retainer of $15,000

 

 

 Compensation Committee Chair, Nominating and Governance Committee Chair and Finance Committee Chair — additional annual cash retainer of $10,000

 

 

 Board Chair — additional annual retainer of $150,000, payable $125,000 in cash and $25,000 in common stock

 

Under our LTIP, each non-employee director can elect to defer the receipt of 0%, 50%, or 100% of the equity compensation payable in a year until termination of services as a non-employee director. Shares deferred are converted into deferred stock units representing the right to receive one share of our common stock for each unit held at the end of the deferral period. Dividend equivalents are credited on deferred stock units and will be distributed in cash at the time that shares are distributed in settlement of deferred stock units. Messrs. Francis, Johnston, Spiegel, Tobin, Todd and Wagner and Ms. Graham elected to defer receipt of their 2018 equity compensation and received deferred stock units.

The table below sets forth the compensation paid to our directors for services in 2018.

 

 NAME

 

    

 

FEES EARNED

OR PAID

IN CASH ($)(1)

 

    

STOCK

AWARDS ($)(1)(2)

 

    

TOTAL

($)

 

 PETER T. FRANCIS

    

120,000

    

129,975

    

249,975

 H. JOHN GILBERTSON, JR

    

60,000

    

54,127

    

114,127

 KRISTIANE C. GRAHAM

    

120,000

    

129,975

    

249,975

 MICHAEL F. JOHNSTON

    

245,000

    

154,970

    

399,970

 RICHARD K. LOCHRIDGE

    

125,000

    

129,975

    

254,975

 ERIC A. SPIEGEL

    

127,500

    

129,975

    

257,475

 MICHAEL B. STUBBS

    

60,000

    

63,177

    

123,177

 RICHARD J. TOBIN

    

40,000

    

49,904

    

89,904

 STEPHEN M. TODD

    

131,250

    

129,975

    

261,225

 STEPHEN K. WAGNER

    

130,000

    

129,975

    

259,975

 KEITH E. WANDELL

    

127,500

    

129,975

    

257,475

 MARY A. WINSTON

    

127,500

    

129,975

    

257,475

 

(1)

Amounts include the standard annual cash retainer, the Chair’s additional cash retainer and the additional annual cash retainer for committee Chairs. Mr. Stubbs retired from the Board effective as of the 2018 Annual Meeting. Mr. Tobin appears in this table only for the portion of compensation he received for his services as an

 

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  independent director prior to commencing services as our President and CEO on May 1, 2018. Mr. Gilbertson was first elected to the Board on August 2, 2018; his compensation reflects his partial year of service.
(2)

On November 15, 2018, each of Messrs. Lochridge and Wandell and Ms. Winston received 1,508 shares of common stock with an aggregate grant date fair market value of $129,975. Messrs. Francis, Spiegel, Todd and Wagner and Ms. Graham each received 1,508 deferred stock units with an aggregate grant date fair market value of $129,975. Mr. Gilbertson received 628 shares of common stock with an aggregate grant date fair market value of $54,127 reflecting his partial year of service. Mr. Johnston received 1,798 deferred stock units with an aggregate grant date fair market value of $154,970, which included his additional compensation as Board Chair. Mr. Stubbs received 733 shares of common stock with an aggregate date fair market value of $63,177 for his partial year of service prior to his May 2018 retirement. Mr. Tobin received 579 deferred stock units with an aggregate grant date fair market value of $49,904 reflecting his partial year of service as an independent director prior to becoming President and CEO.

 

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Proposal 2 — Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee has appointed the independent registered public accounting firm of PwC to audit the annual accounts of Dover and its subsidiaries for 2019. PwC has audited the financial statements for the Company since 1995. Representatives of PwC are not expected to be present at the Annual Meeting.

Although shareholder ratification of PwC’s appointment is not required by Dover’s by-laws or otherwise, our Board is submitting the ratification of PwC’s appointment for the year 2019 to Dover’s shareholders. If the shareholders do not ratify the appointment of PwC, the Audit Committee will reconsider whether or not to retain PwC as Dover’s independent registered public accounting firm for the year 2019 but will not be obligated to terminate the appointment. Even if the shareholders ratify the appointment of PwC, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in Dover’s interests.

THE BOARD RECOMMENDS A VOTE “FOR” RATIFICATION OF THE APPOINTMENT OF PWC AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR 2019.

 

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Audit Committee Report

 

The Audit Committee is composed of directors who, in the opinion of the Board, are independent and financially literate under NYSE rules and qualify as audit committee financial experts as defined by the SEC. Information concerning the credentials of the Audit Committee members can be found in the section of this proxy statement entitled “Proposal 1 — Election of Directors”.

The Audit Committee operates under a written charter adopted by the Board and available on Dover’s website. The Audit Committee assists the Board in overseeing the quality and integrity of Dover’s financial statements, compliance with legal and regulatory requirements, the qualifications, performance and independence of the independent auditors, and the performance of the internal audit function.

Among other things, the Audit Committee appoints the Company’s independent auditors and is directly involved in the selection of the lead audit engagement partner, discusses with the internal audit function and independent auditors the overall scope and plans for their respective audits, reviews the Company’s accounting policies and system of internal controls, reviews significant financial transactions, discusses with management and with the Board processes relating to risk management, pre-approves audit and permissible non-audit services provided by the independent auditors, and approves all fees paid to the independent auditors for such services.

For 2018, the Audit Committee engaged the independent registered public accounting firm PwC as Dover’s independent auditor. In selecting PwC, the Audit Committee considered, among other things: the experience and qualifications of the lead audit partner and other senior members of the PwC team; PwC’s historical performance on Dover’s audit and the quality of its communications with the Audit Committee; the results of the most recent internal quality control review or Public Company Accounting Oversight Board (“PCAOB”) inspection; PwC’s independence; its reputation for integrity and competence in the fields of accounting and auditing; the appropriateness of its fees; and its tenure as Dover’s independent auditors, including its understanding of the Company’s global businesses, accounting policies and practices, and internal control over financial reporting.

The Audit Committee discussed with PwC the overall scope and plans for the audit of Dover’s 2018 financial statements. The Audit Committee met with PwC, with

and without management present, to discuss the results of PwC’s examination, their assessment of internal controls and the overall quality of financial reporting.

The Audit Committee reviewed and discussed, with both the management of Dover and PwC, Dover’s 2018 audited financial statements, including a discussion of critical accounting policies, the quality, not just the acceptability, of the accounting principles followed, the reasonableness of significant judgments reflected in such financial statements and the clarity of disclosures in the financial statements. The Audit Committee met a total of nine times in 2018 and 2019 to discuss 2018 quarterly and full-year financial results and related disclosures.

The Audit Committee has received the written disclosures and the Rule 3526 letter from PwC required by the applicable requirements of PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and discussed with PwC its independence, including the impact of any relationships or permitted non-auditing services on PwC’s independence. The Audit Committee also discussed with PwC the matters required to be discussed under PCAOB Auditing Standard No. 1301. The Audit Committee has also received written materials addressing PwC’s internal control procedures and other matters required by NYSE listing standards.

Based upon the review and discussions referred to above, the Audit Committee recommended that the audited financial statements for the year ended December 31, 2018 be included in Dover’s Annual Report on Form 10-K.

Audit Committee:

Stephen M. Todd (Chair)

H. John Gilbertson, Jr.

Eric A. Spiegel

Stephen K. Wagner

This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent we specifically incorporate this report by reference, and shall not otherwise be deemed filed under such Acts.

 

 

 

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PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

Fees Paid to Independent Registered Public Accounting Firm

Fees paid to, or accrued for, PwC for services to us and our subsidiaries for 2018 and 2017 (including reimbursable expenses) were as follows:

 

     
     2018        2017  

 

 

 AUDIT FEES

   $

 

9,658,287

 

 

 

     $

 

12,169,363

 

 

 

 

 

 AUDIT-RELATED FEES

   $

 

400,000

 

 

 

     $

 

400,000

 

 

 

 

 

 TAX FEES

   $

 

603,942

 

 

 

     $

 

283,394

 

 

 

 

 

 

 ALL OTHER FEES

   $

 

4,500

 

 

 

     $

 

3,600

 

 

 

  

 

 

      

 

 

 

 

 

 TOTAL

  

 

$

 

        10,666,729

 

 

    

 

$

 

        12,856,357

 

 

Audit Fees. Audit fees include fees for audit or review services in accordance with generally accepted auditing standards of our consolidated financial statements (including internal control over financial reporting), statutory and subsidiary audits and review of documents filed with the SEC. In 2018 and 2017, audit fees include fees for audit and review services in connection with the spin-off of Apergy from Dover, including associated filings with the SEC.

Audit-Related Fees . Audit-related fees include fees for assurance and related services that are reasonably related to the audit of our financial statements, such as due diligence services pertaining to potential business acquisitions and dispositions and consultations concerning the accounting and disclosure treatment of events and the impact of final or proposed rules and standards. In 2018 and 2017, audit-related fees include fees for services in connection with our adoption of new accounting standards.

Tax Fees . Tax fees include fees for services that are performed by professional tax staff other than in connection with the audit. These services include tax compliance, consulting and advisory services.

All Other Fees . Other fees include fees for non-audit services not listed above that do not impair the independence of the auditor and are not prohibited by the SEC or PCAOB.

Pre-Approval of Services Provided by Independent Registered Public Accounting Firm

Consistent with its charter and applicable SEC rules, our Audit Committee pre-approves all audit and permissible non-audit services provided by PwC to us and our subsidiaries. With respect to certain services which PwC has traditionally provided, the Audit Committee has adopted specific pre-approval policies and procedures. In developing these policies and procedures, the Audit Committee considered the need to ensure the independence of PwC while recognizing that, in certain situations, PwC may possess the expertise and be in the best position to advise us and our subsidiaries on issues and matters other than accounting and auditing.

The policies and procedures adopted by the Audit Committee allow the pre-approval by the Audit Committee of permissible audit-related services, non-audit-related services and tax services. Under the policies and procedures, pre-approval is generally provided for up to one year and any general pre-approval is detailed as to the particular services or category of services and is subject to a specific budget for each of them. The policies and procedures require that any other services be expressly and separately approved by the Audit Committee prior to such services being performed by the independent auditors. In addition, pre-approved services which are expected to exceed the budgeted amount included in a general pre-approval require separate, specific pre-approval. For each proposed service, the independent auditors and management are required to provide detailed information to the Audit Committee at the time of approval. The Audit Committee considers whether each pre-approved service is consistent with the SEC’s rules and regulations on auditor independence.

 

DOVER CORPORATION 2019 Proxy Statement 36


Table of Contents

PROPOSAL 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

All audit-related and non-audit-related services of PwC during 2018 listed above under “Fees Paid to Independent Registered Public Accounting Firm” were pre-approved specifically or pursuant to the procedures outlined above. With respect to any tax services provided by PwC, PwC provided to the Audit Committee the communications required under PCAOB Rule 3524.

 

DOVER CORPORATION  –  2019 Proxy Statement 37


Table of Contents

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) describes Dover’s executive compensation programs in 2018. It describes Dover’s pay philosophy, how the Board, the Compensation Committee and the CEO have applied that philosophy to Dover’s executives and the process the Compensation Committee uses to make executive pay decisions, assess performance goals and results, and implement updates to our compensation program. On May 1, 2018, Mr. Tobin became our new President and CEO, following Mr. Livingston’s retirement. There are five current officers who are a NEO, plus Mr. Livingston:

 

 

NAMED EXECUTIVE OFFICERS

 

  RICHARD J. TOBIN

 

  

 

President & CEO

 

 

  ROBERT A. LIVINGSTON

 

  

 

Former President & CEO

 

 

  BRAD M. CEREPAK

 

  

 

Senior Vice President & CFO

 

 

  WILLIAM W. SPURGEON, JR.

 

  

 

President & CEO, Dover Fluids

 

 

  IVONNE M. CABRERA

 

  

 

Senior Vice President & General Counsel

 

 

  JAY L. KLOOSTERBOER

 

 

  

 

Senior Vice President, Human Resources

 

 

Executive Summary

Our compensation programs are designed to support the primary objective of creating sustained, long-term value for our shareholders. To achieve this objective, management is required to execute Dover’s strategy, resulting in sustainable revenue and earnings growth. The Compensation Committee believes that a strong pay-for-performance philosophy aligns our executives’ goals with long-term value creation for our shareholders.

Dover Business Overview

Dover is a diversified global manufacturer delivering innovative equipment and components, specialty systems, consumable supplies, software and digital solutions, and support services through three operating segments: Engineered Systems, Fluids, and Refrigeration & Food Equipment. Our entrepreneurial business model encourages, promotes, and fosters deep customer engagement and collaboration, which has led to Dover’s well-established and valued reputation for providing superior customer service and industry-leading product innovation. Our businesses are aligned in three segments structured around our key end markets and are designed to support focused growth strategies. Our segment structure also allows us to leverage Dover’s scale and channel presence while capitalizing on productivity initiatives.

2018 Company Performance Highlights

In 2018, we:

 

   

Generated consolidated revenue from continuing operations of $7.0 billion, reflecting organic growth of 3.7% for the year.

 

   

Delivered diluted EPS from continuing operations of $3.89, compared with EPS of $4.73 for 2017. The decrease was largely driven by net benefits realized in 2017 from dispositions and the Tax Reform Act.

 

   

Completed the tax-free spin-off of our upstream energy businesses into a standalone, publicly traded company named Apergy.

 

   

Increased our quarterly dividend by 2%, marking our 63 rd consecutive year of dividend increases.

 

   

Completed the acquisition of Ettlinger, a leading manufacturer of filtering solutions for the plastics recycling industry, which enhances our ability to serve the Process Solutions end market within our Fluids segment.

 

   

Executed a rightsizing plan that is expected to deliver $136 million of annualized pre-tax earnings by year-end 2019, of which $34 million will be reinvested in high-return growth initiatives.

 

DOVER CORPORATION 2019 Proxy Statement 38


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

While our financial performance was strong in 2018, our EBIT margins were below our expectations. As a result, our NEOs’ annual bonuses were lower than those earned for 2017. With respect to long-term compensation, Mr. Spurgeon, President and CEO of Dover Fluids, was the only NEO who received a payout on the performance share award for the 2016-2018 performance period. Based on his business unit’s iTSR performance over that period, his payout was below target.    

 

LOGO    LOGO

 

Components of Compensation Aligned with Company Performance

In light of the strong support from our shareholders for our compensation program structure and its close alignment with our pay for performance philosophy, our 2018 executive compensation program structure was generally unchanged.

 

 
COMPONENT  

PAY

ELEMENT

  METRICS &
WEIGHTING
      OBJECTIVES   RATIONALE    

BASE SALARY

  Cash       Attract and retain executives  

 

Need to offer competitive salaries (benchmark to median of peer group)

 

 
 

ANNUAL INCENTIVE PLAN

  Cash  

60% Financial Results

 

—    Revenue

 

—    Income

 

—    EBIT Margin

    Drive profitability, growth, and progress toward strategy implementation   Individual objectives are designed to incentivize achievement of long-term strategic goals to create shareholder value over time  
 

40% Individual Strategic Objectives

 

 

LONG-TERM INCENTIVE PLAN

 

SSARs

 

 

Dover Stock Price

3-year performance period

    Drive profitability and growth, create shareholder value, foster executive retention, and align executive and shareholder interests   All components paid in stock to align executive and shareholder interests  
 

RSUs

 

   
 

Performance

Shares

 

 

 

iTSR

3-year performance period

 

 

 

BENEFITS

 

 

Consistent with other similarly situated employees

 

 

DOVER CORPORATION  –  2019 Proxy Statement 39


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

2018 Compensation Drivers and Outcomes

The primary elements of our philosophy include a clear pay for performance strategy, an emphasis on incentive-driven pay based on metrics that align with value creation for our shareholders and objectives that support our strategy. The following are key elements of our program:

 

   

Financial metrics that are clearly linked to the creation of shareholder value: earnings from continuing operations, revenue, and iTSR (increased enterprise value as measured by EBITDA growth plus free cash flow generation).

 

   

Focus on our business strategy to ensure our long-term compensation program aligns the interests of our executives with those of our shareholders by placing an emphasis on performance-based stock compensation.

 

   

An annual review of the level of compensation and the components of our programs.

 

   

A reference to the median of our peer group for total direct compensation, with consideration for internal pay equity, sustained performance, specific responsibilities, and experience with comparable market talent.

 

   

Total compensation opportunities designed so that the large majority of compensation is based on business performance.

 

   

An annual cash bonus plan designed to reward annual financial performance as well as attainment of strategic objectives for the current year that the Board believes will assure the long-term success of Dover.

 

   

Executive benefits and programs that are consistent with those offered to other employees. We provide substantially no executive perquisites, nor do we own or operate any corporate aircraft.

2018 Say-on-Pay Advisory Vote and Shareholder Outreach

 

96% Say on Pay support  |  51% Shares Outstanding Contacted  |  32% Shares Engaged

In 2018, our executive compensation program received 96% approval from our shareholders, which was the same level of support received in 2017, reflecting shareholders’ continuing approval of our compensation program. In 2018, we continued our shareholder engagement program. We reached out to holders of over 51% of our outstanding shares and engaged with governance professionals and/or portfolio managers at investors holding approximately 32% of our outstanding shares. In addition to the governance topics detailed earlier in this proxy statement, we had thoughtful discussions with our shareholders regarding our compensation program. Our investors generally told us they believe Dover’s pay practices are aligned with our pay-for-performance philosophy. We also sought shareholder feedback on Mr. Tobin’s compensation arrangements after his appointment, including his one-time make-whole award. Our shareholders indicated they were supportive of the structure because it ensured a smooth transition and the Board’s ability to hire a highly qualified candidate. The Board appreciated the feedback it received, particularly regarding shareholder opinions on Mr. Tobin’s compensation arrangements, our metrics and the rigor of our target selection. The Compensation Committee will continue to consider this feedback, as well as the results from future shareholder advisory votes, in its ongoing evaluation of executive compensation programs and practices at Dover.

 

DOVER CORPORATION  –  2019 Proxy Statement 40


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Dover’s Alignment with Leading Compensation Governance Practices

 

 

Yes

 

         

 

No

 

   

 

  The majority of target NEO pay opportunity is performance based (73% for the CEO; 63% for the other NEOs)

 

  The majority of target NEO pay opportunity is tied to Dover stock performance (72% for the CEO; 49% for the other NEOs)

 

  Each year, Dover interacts with key shareholders to seek feedback on Dover’s executive compensation programs

 

  All long-term incentives are paid in stock, not cash

 

  Executives must hold significant amounts of Dover stock: five-times salary for the CEO, three-times for other NEOs

 

  All long-term incentives are earned or vest over three years

 

  Change in control (“CIC”) provisions require double trigger

 

  Executives participate in benefit and employee programs on the same basis as other Dover employees

 

  Clawback provisions are included in the Pension Replacement Plan (“PRP”), executive severance plan (the “severance plan”), and the CIC severance plan. Clawback provisions are set to take effect in our long-term incentive plan once the SEC issues final rules

 

  The Compensation Committee retains its own independent consultant

 

 

     

 

   No tax gross ups

 

   No repricing, reloads or exchanges of SSARs

 

   No SSARs granted below fair market value

 

   No hedging or pledging of Dover securities by executives, including margin loans

 

   No dividends are paid on performance shares or restricted stock units (“RSUs”) during the earning or vesting period. Dividend equivalents are accrued on RSUs, but are only paid if the RSUs vest

 

   No special executive retirement arrangements

 

   No substantial executive perquisites, nor do we own or operate any corporate aircraft

 

 

DOVER CORPORATION  –  2019 Proxy Statement 41


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Compensation Process: Aligning Business Strategy and Performance

Guiding Principles for Dover’s Executive Compensation Program

Dover’s executive compensation programs are designed to do the following:

 

 

   Focus executives on consistent long-term value creation and a balanced capital allocation program to outperform our investors’ alternative investment choices in our industry.

 

 

   Attract and retain highly qualified executives to look after our shareholders’ interests and manage our businesses.

 

 

 

   Create the drive for over-achievement without creating undue risk to the Company.

 

Setting Executive Compensation — Roles

The process for determining our compensation program structure and payouts involves the dedicated participation of the Compensation Committee, the independent directors of the Board, the CEO, and the Compensation Committee’s independent consultant. The roles of each in making compensation decisions are:

 

Compensation Committee

 

   Oversee the development and administration of our compensation and benefits policies and programs.

 

   Evaluate and approve the performance of the CEO and each NEO against specified individual strategic objectives, set at the beginning of the year.

 

   Review and approve performance measures, weightings, and strategic goals for the annual and long-term incentive plans in the context of our business strategy.

 

   Formulate the compensation recommendations for our CEO and present to the independent directors for approval.

 

   Approve all compensation recommendations for direct reports to our CEO.

 

     

Independent Directors

 

   Review the performance of our CEO mid-year and following the end of the fiscal year.

 

   Provide vital feedback to our CEO about his performance and opportunities for improvement.

 

   Review the recommendation of the Compensation Committee and, together with the Committee, determine the compensation of our CEO.

   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
                    

CEO

 

   Recommend to the Compensation Committee salaries, annual incentive awards, and long-term incentive awards for his direct reports, including other NEOs.

 

   Provide assessment of each officer’s performance including progress against strategic objectives, the performance of the individual’s respective segment or function, and employee retention considerations.

 

   Play no role in matters affecting his own compensation other than providing the independent directors with a written self-assessment of his performance.

     

Independent Compensation Consultant

(Semler Brossy)

 

   Provide the Compensation Committee with an evaluation of the market competitiveness of our executive compensation packages, an assessment of pay in relation to performance and input into CEO and other executive pay decisions.

 

   Provide additional input on other compensation related matters at the request of the Compensation Committee.

 

   Report directly to the Compensation Committee, which may replace the firm or hire additional consultants at any time.

 

   Attend meetings of the Compensation Committee, upon request, and communicate with the Committee Chair between meetings.

   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   

 

DOVER CORPORATION  –  2019 Proxy Statement 42


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Setting Executive Compensation – Timeline

The process for making executive compensation decisions for 2018 began with goal setting at the beginning of the year and concluded with the actual compensation payout decisions in early 2019. In 2018, the process also took our CEO transition into consideration. As described below, this year-long process integrates key factors, such as Dover’s business strategy, our annual budget and market compensation data.

 

    

 

February 2018

 

    
  

 

•   Compensation Committee and the independent directors of the Board reviewed and approved the financial performance targets for the AIP, taking into account our business strategy, and approved the then CEO’s 2018 strategic objectives

 

•   The then CEO approved the strategic objectives for each of his direct reports, including the NEOs, cascading his goals where appropriate to each executive

 

     
    

 

March 2018

 

    
  

 

•   In connection with the Board’s appointment of Mr. Tobin as our new President & CEO and to ensure a smooth executive transition, our independent directors, after considering market data, advice from our independent compensation consultant, and other factors, including his prior CEO experience, approved Dover’s entry into a three-year employment agreement with Mr. Tobin

 

     
    

 

November 2018

 

    
  

 

•   Compensation Committee reviewed and considered market compensation data and executive compensation trend information from its independent consultant

 

•   The Committee also reviewed tally sheets to understand the full cost of each executive’s compensation and benefits package, share ownership levels, realized pay, and payouts under different termination scenarios

 

•   The Committee, including the independent Chair of the Board, provided the new CEO with an interim performance assessment

 

     
    

 

January 2019

 

    
  

 

•   Compensation Committee and the other independent directors of the Board met by conference call to discuss and evaluate the new CEO’s performance in 2018

 

     
    

 

February 2019

 

    
  

 

•   Compensation Committee reviewed with the new CEO the financial and strategic performance of each of his direct reports, along with proposed pay actions

 

•   The Committee certified the performance results for the AIP and the performance shares

 

•   After discussion, the Committee approved pay actions for each CEO direct report

 

•   The Committee developed its CEO pay proposal consistent with the terms of the CEO employment agreement which was then discussed with the independent directors of the Board, and together they determined the pay actions for the CEO

 

 

 

DOVER CORPORATION  –  2019 Proxy Statement 43


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Executive Compensation Program Peer Grouping

For assessing executive pay programs and levels, the Compensation Committee selected a group of companies that are similar to Dover in terms of end markets, complexity, revenues and market capitalization. In 2018, with the help of its independent consultant, the Compensation Committee approved changes to the peer group to better match Dover’s end markets, complexity, revenue and market capitalization after the spin-off of Apergy. As a result, 3M Company, Weatherford International plc and Pentair plc were removed from the peer group. Corning Incorporated, Stanley Black & Decker, Inc. and Snap-on Incorporated were added to the peer group.

 

IN USD MILLIONS   FINANCIAL CONSIDERATIONS   QUALITATIVE CONSIDERATIONS  

 

  COMPANY

 

 

 

2018
REVENUE

 

   

 

2018

MARKET

CAP(1)

 

   

 

INDUSTRY

 

 

>20%

GLOBAL

REVENUES

 

   

 

DOVER-LIKE

STRUCTURE

 

   

 

SAME ANALYST  

COVERAGE(2)

 

 

  CARLISLE COMPANIES

  $ 4,480     $ 5,985    

 

Industrial

Conglomerates

 

         

  COLFAX CORPORATION

  $ 3,667     $ 2,449    

 

Industrial

Machinery

 

           

  CORNING INCORPORATED

  $ 11,290     $ 24,180    

 

Electrical

Equipment

 

         

  EATON CORPORATION

  $ 21,609     $ 29,757    

 

Electrical

Equipment

 

           

  EMERSON ELECTRIC CO.

  $ 17,408     $ 37,413    

 

Electrical

Equipment

 

           

  FLOWSERVE CORPORATION

  $ 3,833     $ 4,975    

 

Machinery

 

         

  FORTIVE CORPORATION

  $ 6,453     $ 22,596    

 

Industrial
Machinery

 

           

  ILLINOIS TOOL WORKS INC.

  $ 14,768     $ 42,036    

 

Machinery

 

           

  INGERSOLL-RAND PLC

  $ 15,668     $ 22,411    

 

Machinery

 

           

  PARKER-HANNIFIN CORPORATION

  $ 14,302     $ 19,739    

 

Machinery

 

         

  ROCKWELL AUTOMATION INC.

  $ 6,666     $ 18,099    

 

Electrical

Equipment

 

         

  ROPER INDUSTRIES INC.

  $ 5,191     $ 27,566    

 

Industrial

Conglomerates

 

           

  SNAP-ON INCORPORATED

  $ 4,070     $ 8,090    

 

Industrial
Machinery

       

  STANLEY BLACK & DECKER, INC.

  $ 13,982     $ 18,088    

 

Industrial
Machinery

         

  TEXTRON INC.

  $ 13,972     $ 11,174    

 

Aerospace &

Defense

 

         

  XYLEM, INC.

  $ 5,207     $ 11,991    

 

Industrial

Machinery

 

         

 

 

  75TH PERCENTILE

 

 

$

 

 

14,419

 

 

 

 

 

 

$

 

 

25,027

 

 

 

 

       

 

  MEDIAN

 

 

 

$

 

 

8,978

 

 

 

 

 

 

$

 

 

18,989

 

 

 

 

       

 

  25TH PERCENTILE

 

 

 

$

 

 

5,013

 

 

 

 

 

 

$

 

 

10,403

 

 

 

 

       

 

 

  DOVER

 

 

 

 

$

 

 

 

6,992

 

 

 

 

 

 

 

 

$

 

 

 

10,382

 

 

 

 

 

       

 

(1)

As of 12/31/2018.

(2)

“Same analyst coverage” means company is covered by at least 5 of the analysts that cover Dover.

 

DOVER CORPORATION  –  2019 Proxy Statement 44


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Role of Internal Equity in Setting Executive Compensation

Management and the Compensation Committee consider both market benchmarks (i.e., external equity), as well as the impact each executive role has relative to internal peers (i.e., internal equity) in establishing the executive pay structures used to govern pay.

Role of the Independent Compensation Consultant

The Compensation Committee has the authority and discretion to retain external compensation consultants as it deems appropriate. The Compensation Committee has adopted a policy to ensure the continuing independence and accountability to the committee of any advisor hired to assist the committee in the discharge of its duties. The policy formalizes the independent relationship between the committee’s advisor and Dover, while permitting management limited ability to access the advisor’s knowledge of Dover for compensation matters. Under the policy, the Compensation Committee will annually review and pre-approve the services that may be provided to management by the independent advisor without further committee approval. Compensation Committee approval is required prior to Dover retaining the independent advisor for any executive compensation services or other consulting services or products above an aggregate annual limit of $50,000.

Since February 2010, the Compensation Committee has retained Semler Brossy Consulting Group, LLC (“Semler Brossy”) as its advisor. Semler Brossy does no other work for and has no other relationships with Dover. Semler Brossy focuses on executive compensation and does not have departments, groups or affiliates that provide services other than those related to executive compensation and benefits.

The Compensation Committee looks to its consultant to periodically review and advise regarding the adequacy and appropriateness of our overall executive compensation plans, programs and practices and, from time to time, to answer specific questions raised by the Compensation Committee or management. Compensation decisions are made by, and are the responsibility of, the Compensation Committee and our Board, and may reflect factors and considerations other than the information and recommendations provided by the Compensation Committee’s consultant.

To ensure independence of the compensation consultant, the consultant reports directly to the Chair of the Compensation Committee and works specifically for the Committee solely on compensation and benefits.

Semler Brossy did not engage in any projects for management in 2018. The Compensation Committee has assessed the independence of Semler Brossy and concluded that its work for the Compensation Committee does not raise any conflict of interest.

New CEO Compensation and Employment Agreement

On May 1, 2018, Richard J. Tobin became Dover’s President and CEO. Immediately prior to joining Dover, Mr. Tobin was the CEO of CNH. The independent directors, with the support of Semler Brossy, the Compensation Committee’s independent consultant, approved Dover’s entry into a three-year employment agreement with Mr. Tobin commencing May 1, 2018.

Under the terms of the agreement, Mr. Tobin is entitled to an initial annual base salary of $1.2 million and a target annual bonus equal to 125% of base salary and receipt of an annual equity grant for each of Dover’s fiscal years ending during the term of the agreement with a grant date fair value of not less than $7 million. Mr. Tobin’s annual bonus for 2018 was guaranteed to be no less than the target annual bonus, pro-rated for the portion of 2018 on and following the commencement of the term.

 

 Annual Compensation Package for 2018 and 2019    Base      Target
Bonus
     LTIP
Grant
     Total  

 Richard J. Tobin

   $ 1,200,000      $ 1,500,000      $ 7,000,000      $ 9,700,000  

 

DOVER CORPORATION  –  2019 Proxy Statement 45


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

In addition, Mr. Tobin received a one-time make-whole equity grant consisting of $6 million in the form of performance shares, having the same performance and vesting terms as our February 2018 iTSR performance share grants to our other employees, and $13 million in the form of RSUs, which vest in five equal installments on December 15th of each calendar year, starting on December 15, 2018 and ending on December 15, 2022. Mr. Tobin also received a one-time make-whole cash payment of $1,000,000, provided that he is obligated to repay this amount if he terminates his employment without good reason or if Dover terminates his employment for cause, as such terms are defined in the employment agreement, prior to May 1, 2019, and he is required to repay a pro-rata portion of this amount if his employment is terminated without good reason or for cause prior to May 1, 2020.

For a more detailed description of Mr. Tobin’s employment agreement, see “ CEO Employment Agreement ” on page 58.

Elements of Executive Compensation

Focus on Variable, Performance-Based Pay

The pay packages of Dover executives consist predominantly of incentive-based pay, both annual and long-term. The ratio between fixed and variable pay varies by executive level, but for the CEO and his direct reports, including the NEOs, we feel it is appropriate that the vast majority of the pay package should be “at risk” incentive-based pay as shown in the chart below. Additionally, we believe that their incentive pay should be heavily weighted toward long-term performance and tied to share performance, with the annual incentives focused on key short-term drivers and progress on strategy. The CEO chart presented below excludes the one-time sign on cash and equity.

 

 

LOGO

 

DOVER CORPORATION  –  2019 Proxy Statement 46


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Each of the compensation components has a specific role in the overall design of our executive pay program. While the components are designed to be mutually reinforcing, care is taken to minimize overlap between them. The table below shows how each element fits into our overall executive pay program and incentivizes performance over multiple time horizons.

 

 
COMPONENT   PAY ELEMENT   METRICS &
WEIGHTING
  OBJECTIVES   RATIONALE
 

  ANNUAL

  INCENTIVE

  PLAN

  Cash  

60% Financial Results

–  Revenue

 

–  Income

 

–  EBIT Margin

 

40% Individual Strategic Objectives

  Drive profitability, growth, and progress toward strategy implementation   Individual objectives are designed to incentivize achievement of long-term strategic goals in order to create shareholder value over time
 

  LONG-TERM

  INCENTIVE

  PLAN

  SSARs  

Dover Stock Price

3-year  performance period

  Drive profitability and growth, create shareholder value, foster executive retention, and align executive and shareholder interests   All components paid in stock to align executive and shareholder interests
  RSUs  
  Performance Shares  

iTSR

3-year performance period

Annual Incentive Plan Compensation

An annual bonus may be earned each year based on an NEO’s performance against both financial objectives tied to the NEO’s business unit and individual strategic goals. Each NEO’s bonus target amount is determined according to the NEO’s business/function complexity, size and overall impact on Dover’s results, as well as strategic leadership and managerial responsibility. We believe that balancing the measurement of performance for the annual bonus between financial and strategic objectives is important in mitigating risk and executing on our long-term strategy for value creation.

For 2018, 60% of the annual bonus of our NEOs other than Mr. Tobin was based on the achievement of financial performance criteria based on revenue and earnings (EBIT for segment executives and earnings from continuing operations for executives at the corporate level) and was subject to a modifier based on the EBIT margin of the NEO’s business unit. Financial targets were set at the overall corporate level for corporate NEOs (Tobin, Cerepak, Cabrera and Kloosterboer) and at the segment level for segment NEOs (Spurgeon). Rightsizing and other costs incurred in the third and fourth quarters of 2018 related to our initiative to reduce selling, general and administrative expense were not included in the calculation.

The other 40% of the annual bonus was based on the achievement of individual strategic objectives designed to create long-term value for our shareholders. The individual strategic objectives were set for our then CEO, Mr. Livingston, by our independent directors at the beginning of the year based on specific strategic initiatives that the Board and management agreed were important to achieve in 2018. These objectives were cascaded to the CEO’s direct reports as appropriate based on their responsibilities or business portfolio. The Board monitored progress on the CEO’s strategic objectives and, following the end of the year, reviewed the CEO’s performance against these objectives when determining his annual bonus. Mr. Tobin’s annual bonus for 2018 was based on the terms of his employment agreement and included consideration of his accomplishments in 2018 relating to strategic priorities established in consultation with the Board following his appointment as CEO.

 

DOVER CORPORATION  –  2019 Proxy Statement 47


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

2018 AIP Financial Results Performance

The actual bonuses paid to our NEOs for 2018 were lower than those earned for 2017 based on business results, reflecting our pay-for-performance focus. Mr. Livingston, our former CEO, retired on May 1, 2018 and did not receive an AIP bonus for 2018.

 

  NEO

 

  2018 Targets

 

    2018 Results

 

 
 

 

(in millions, except EBIT Margin)

 

 
 

Net

Income(1)

 

   

Sales

 

   

EBIT(2)

 

   

EBIT
Margin(3)

 

   

Net

Income(1)

 

   

Sales

 

   

EBIT(2)

 

   

EBIT
Margin(3)

 

 

 

  DOVER CORPORATION

•  Richard J. Tobin

•  Brad M. Cerepak

•  Ivonne M. Cabrera

•  Jay L. Kloosterboer

 

 

  $ 634           $ 6,960         N/A           13.5%       $ 636           $ 6,992       N/A           12.8%  

 

  DOVER FLUIDS

•  William W. Spurgeon, Jr.

 

 

    N/A           $ 2,655       $ 403           15.2%         N/A           $ 2,797     $ 407           14.6%  

 

(1)

Net Income target and results include the impact of any acquisitions during 2018. The Net Income results exclude benefits of the Tax Cuts and Jobs Act (the “Tax Reform Act”) and rightsizing and other costs.

(2)

EBIT refers to earnings before interest and taxes. The EBIT results exclude gains/losses on sale of divested business lines and rightsizing and other costs.

(3)

EBIT Margin refers to EBIT divided by Revenue.

2018 AIP Individual Strategic Objective Performance

Each of the NEOs had unique strategic objectives in keeping with the strategic priorities communicated to our shareholders. Strategic objectives are intended to focus on a limited and measurable set of goals which, if accomplished, will benefit our shareholders over the long term. For NEOs other than Mr. Tobin, these objectives were used to determine 40% of their annual incentive. Similarly, Mr. Tobin’s strategic objectives were considered in determining his annual incentive but were not specifically tied to a portion of his 2018 bonus opportunity in keeping with the terms of his employment agreement.

 

 

 

2018 NEO INDIVIDUAL STRATEGIC OBJECTIVE PERFORMANCE

 

 

Mr.  Tobin (President  & CEO) became CEO of Dover in May 2018. He completed an assessment of our portfolio and operations. This resulted in a plan to reduce both our overhead and fixed cost structure, as well as a reaffirmation of our capital allocation priorities.

 

 

 

Mr.  Cerepak (Senior Vice President  & CFO continued to improve the effectiveness of the global finance processes, with an emphasis on improving shared service operations and working capital management. He assumed responsibility for our strategy and acquisition activities in 2018. In addition, he played a significant role in the spin-off of Apergy.

 

 

 

Mr.  Spurgeon (President  & CEO of Dover Fluids)  continued to effectively lead our Fluids segment, exceeding his organic growth target. In addition, he oversaw the successful consolidation of Fueling System operations in China. The Fueling Systems operations consolidation in Europe did not meet its targets.

 

 

 

Ms.  Cabrera (Senior Vice President  & General Counsel)  continued to effectively lead our Legal function. She led our Intellectual Property and corporate governance initiatives, as well as increasing the productivity of our legal resources. In addition, she played a significant role in the spin-off of Apergy.

 

 

 

Mr.  Kloosterboer (Senior Vice President, Human Resources)  continued to effectively lead our Human Resources function. He continued to make progress on our global talent initiatives, as well as rolling out our global HRIS system. In addition, he played a significant role in the spin-off of Apergy.

 

DOVER CORPORATION  –  2019 Proxy Statement 48


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

2018 AIP Target Performance and Payout

Overall, we meet our revenue and earnings targets in 2018, while missing our EBIT margin targets. In addition, we made progress on our strategic objectives. Actual compensation varies widely based on the individual’s business unit and performance against specific strategic objectives.

 

 

NEO

 

   Annual Bonus in $      Annual Bonus % of Target
  

 

2016

 

    

 

2017

 

    

 

2018

 

    

 

2016

 

    

 

2017

 

    

 

2018

 

 

Richard J. Tobin(1)

 

        

 

 

 

 

1,000,000

 

 

 

 

        

 

N/A(1)

 

 

Brad M. Cerepak

 

  

 

 

 

 

530,000

 

 

 

 

  

 

 

 

 

970,000

 

 

 

 

  

 

 

 

 

773,000

 

 

 

 

  

 

 

 

 

79%  

 

 

 

 

  

 

 

 

 

142%

 

 

 

 

  

 

110%

 

 

William W. Spurgeon, Jr.

 

  

 

 

 

 

310,000

 

 

 

 

  

 

 

 

 

640,000

 

 

 

 

  

 

 

 

 

601,700

 

 

 

 

  

 

 

 

 

48%  

 

 

 

 

  

 

 

 

 

  98%

 

 

 

 

  

 

  93%

 

 

Ivonne M. Cabrera(2)

 

        

 

 

 

 

434,000

 

 

 

 

        

 

115%

 

 

Jay L. Kloosterboer(2)

 

        

 

 

 

 

434,000

 

 

 

 

        

 

115%

 

 

(1)

Mr. Tobin’s bonus was guaranteed for 2018.

(2)

Ms. Cabrera and Mr. Kloosterboer became NEOs with respect to the year 2018 and, therefore, the years 2017 and 2016 are not illustrated.

2018 Performance Shares

The 2018 performance shares are based on the three-year performance period of 2016-2018, and the performance is measured on iTSR, which is described below. The Compensation Committee believes our iTSR measure focuses executives on key financial and strategic drivers of long-term shareholder value. All equity awards outstanding as of May 9, 2018 were adjusted as a result of the spin-off of Apergy to preserve the value of the awards in accordance with the Employee Matters Agreement, dated May 9, 2018, between Dover and Apergy.

 

 

 NEO

 

  

 

TARGET # OF  SHARES

    

 

ACTUAL SHARES  AWARDED

 
  

 

2018

 

    

 

2018

 

 

 

 Richard J. Tobin

 

  

 

 

 

 

N/A              

 

 

 

 

  

 

 

 

 

N/A                    

 

 

 

 

 

 Robert A. Livingston

 

  

 

 

 

 

26,930              

 

 

 

 

  

 

 

 

 

0                    

 

 

 

 

 

 Brad M. Cerepak

 

  

 

 

 

 

7,665              

 

 

 

 

  

 

 

 

 

0                    

 

 

 

 

 

 William W. Spurgeon, Jr.

 

  

 

 

 

 

6,836              

 

 

 

 

  

 

 

 

 

2,231                    

 

 

 

 

 

 Ivonne M. Cabrera

 

  

 

 

 

 

3,314              

 

 

 

 

  

 

 

 

 

0                    

 

 

 

 

 

 Jay L. Kloosterboer

 

  

 

 

 

 

3,314              

 

 

 

 

  

 

 

 

 

0                    

 

 

 

 

 

DOVER CORPORATION  –  2019 Proxy Statement 49


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Long-Term Incentive Compensation

The following table summarizes the components of awards under our Dover Corporation 2012 Equity and Cash Incentive Plan (“LTIP”) and the related performance criteria for awards granted in 2018. Note that all components are paid in stock rather than cash to encourage shareholder alignment through stock ownership.

 

 
  LTIP COMPONENT                  PERFORMANCE
CRITERIA
   PURPOSE   

 

VESTING OR EXERCISE
PERIOD

 

  STOCK SETTLED STOCK 

  APPRECIATION RIGHTS

   Market Price of our Common Stock   

 

To focus executives on share price appreciation

SSARs are not exercisable until three years after grant; they remain exercisable for another seven years

 

  

 

SSARs are not exercisable until three years after grant; they remain exercisable for another seven years

  RESTRICTED STOCK

  UNITS

   Market Price of our Common Stock   

 

Retention and full alignment with the shareholder experience

 

  

 

Awards vest ratably over three years

  PERFORMANCE

  SHARES

  

 

iTSR (EBITDA growth
and cash flow
generation)

 

  

 

To focus executives on core enterprise value creation

  

 

Three calendar years

Long-Term Incentive Plan Mix

 

 

LOGO

Performance Shares & iTSR

The Compensation Committee believes our iTSR measure focuses executives on key financial and strategic drivers of long-term shareholder value. iTSR, by definition, is a measure of value creation for our business segments and operating companies. The key components of iTSR are EBITDA Growth and Free Cash Flow. Based on rigorous testing over time, the Compensation Committee continues to believe iTSR is:

 

   

highly correlated with long-term shareholder value creation for a multi-industry company such as Dover,

 

   

highly correlated with the combination of return on invested capital (“ROIC”) and organic growth, and

 

   

more effective in driving behaviors than relative TSR because it measures outcomes that are more within management’s control, such as revenue growth (organic and acquisition), and margin improvements.

 

DOVER CORPORATION  –  2019 Proxy Statement 50


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Definition of iTSR. iTSR measures the change in enterprise value over a three-year period. EBITDA is assigned a multiple based on prevailing market multiples among industrial companies. iTSR tracks the change in that EBITDA-based value, along with Free Cash Flow generated during the three-year performance period. The two together work similarly to an external TSR measure: the EBITDA-based value becomes a proxy for share price, and Free Cash Flow becomes a proxy for dividends. Further, EBITDA Growth and Free Cash Flow together focus our business leaders on growing our business, investing in continuing operations, and shaping our portfolio with capital-effective acquisitions and dispositions.

 

 

LOGO

 

   

EBITDA Growth  — We believe that EBITDA is useful for purposes of evaluating our ongoing operating profitability as it excludes the depreciation and amortization expense related primarily to capital expenditures and acquisitions that occurred in prior years, as well as in evaluating our operating performance in relation to our competitors.

 

   

Free Cash Flow  — Free Cash Flow is operating cash flow less capital spending, less cash used for acquisitions, plus cash received from divestitures. We believe that Free Cash Flow is an important measure of our operating performance as it provides a measurement of cash generated from operations that is available for mandatory payment obligations and investment opportunities, such as funding acquisitions, paying dividends, repaying debt and repurchasing our common stock.

Safeguards. Since iTSR is an absolute measure of value creation, we have implemented safeguards to substantially eliminate large payouts resulting solely from economic cycles. Further, payouts under the program are in shares, and our shareholding requirements ensure that executives are exposed to the same stock price changes as our shareholders, including external stock market factors. Dividends are not accrued or paid on performance shares during the performance period.

Rigorous iTSR Targets, Threshold and Cap Levels. iTSR targets for our Performance Shares are demanding and were rigorously back-tested to confirm that they are set to tie performance share payouts with comparable relative TSR performance levels. Awards are earned three years after the grant, provided iTSR exceeds a threshold level. No payouts will be made unless iTSR equals or exceeds 6%. The payout to any individual may not exceed 500,000 shares.

 

DOVER CORPORATION  –  2019 Proxy Statement 51


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Payouts of performance shares are made on a sliding scale using the following formula:

 

 

LOGO

Stock Settled Stock Appreciation Rights

Similar to stock options, SSARs align executive interests with shareholder interests for stock price growth for several years into the future. They focus executives on increasing the stock price over the long term. SSARs give our NEOs the ability to participate in the price appreciation of a set number of shares of Company stock. Once SSARs vest, an NEO may exercise them any time prior to the expiration date. The proceeds from the exercise are paid to the NEO in the form of shares of Dover common stock to encourage continued share ownership and shareholder alignment.

Illustration of SSARs Exercise:

 

Base Price /Exercise Price

   $ 60   

Fair Market Value (“FMV”) on date of exercise

   $ 80   

Number of SSARs Granted

     100   

 

       
EXERCISE STEP    Gain in Value    Total Value after Exercise   

Total Shares Awarded 

post Exercise *

 

CALCULATION FORMULA

   FMV - Ex. Price    Gain in Value x Number of

SSARs

   Total Value ÷ FMV
 

RESULT

   $80 - $60 = $20  

($20 per SSAR)

   $20 x 100 = $2,000    $2,000 ÷ $80 = 25

 

*

Subject to tax withholding

Restricted Stock Units

RSU grants attract and retain NEOs by providing them some of the benefits associated with stock ownership during the vesting period. Executives do not actually own the shares underlying the units, nor enjoy the benefits of ownership such as dividends and voting, until the vesting conditions are satisfied. Once vested, the NEO receives shares of Dover stock equivalent in number to the vested units and receives a cash amount equal to accrued dividends during the vesting period, net of withholding taxes.

 

DOVER CORPORATION  –  2019 Proxy Statement 52


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

2019 Changes to our Executive Compensation

Changes in Salary, Target Bonus, or LTIP grants

None of our NEOs received a salary, target bonus or LTIP grant increase for 2019.

Other Benefits

401(k), Pension Plan and Health & Wellness Plans

Our executive officers are able to participate in retirement and benefit plans generally available to our employees on the same terms as other employees. Dover and most of our businesses offer a 401(k) plan to substantially all U.S.-based employees and provide a Company matching contribution denominated as a percentage of the amount of salary deferred into the plan by a participant during the course of the year. Some of our U.S.-based employees also participate in a tax-qualified defined benefit pension plan. Effective December 31, 2013, we closed both our qualified and non-qualified defined benefit retirement plans to new employees. We intend to freeze any future benefit accruals in both plans effective December 31, 2023. All of our U.S.-based employees are offered a health and wellness plan (including health, term life and disability insurance). NEOs do not receive enhanced health and wellness benefits.

Non-Qualified Retirement Plans

We offer two non-qualified plans with participation generally limited to individuals whose annual salary and bonus earnings exceed the Internal Revenue Service (“IRS”) limits applicable to our qualified plans: our PRP and our deferred compensation plan. Participation in the deferred compensation plan is open to employees with an annual salary equal to or greater than $175,000.

After December 31, 2009, benefits under the PRP before offsets are determined using the benefit calculation and eligibility criteria as under the pension plan, except that IRS limits on compensation and benefits do not apply. Prior to December 31, 2009, the participants in the PRP accrued benefits greater than those offered in the pension plan. Effective January 1, 2010, we modified this plan so that executives subject to IRS compensation limits will accrue future benefits that are substantially the same as benefits under the pension plan. Individuals who participated in the PRP prior to January 1, 2010 will receive benefits calculated under the prior benefit formula through December 31, 2009 and benefits calculated under the lower PRP benefit formula on and after January 1, 2010. Amounts receivable by the executives under the PRP are reduced by any amounts receivable by them under the pension plan, any qualifying profit sharing plan, Company-paid portion of social security benefits, and the amounts of the Company match in the 401(k) plan.

Effective December 31, 2013, the PRP was closed to new employees. All eligible employees as of December 31, 2013 will continue to earn PRP benefits through December 31, 2023 as long as they remain employed by Dover and its affiliates. Effective December 31, 2023, Dover intends to eliminate any future benefit accruals consistent with the freezing of benefit accruals under the pension plan.

We offer a deferred compensation plan to allow participants to elect to defer their receipt of some or all of their salary, bonuses and any payout of a cash performance award. The plan permits executive officers to defer receipt of part of their compensation to later periods and facilitates tax planning for the participants. Effective January 1, 2014, the deferred compensation plan was amended to provide for certain matching and additional contributions for participants who do not also participate in the PRP. Our NEOs are participants in the PRP and are not eligible for matching or additional contributions under the deferred compensation plan. Accordingly, we do not consider the deferred compensation plan to play a major role in our compensation program for our NEOs as we do not match any amounts deferred or guarantee any particular return on deferrals.

 

DOVER CORPORATION  –  2019 Proxy Statement 53


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Executive Severance

All of our NEOs are eligible to participate in our severance plan. Under the plan, if we terminate an NEO’s employment without cause (as defined in the severance plan), the NEO will generally be entitled to receive twelve months of salary and healthcare benefits continuation, and a prorated bonus for time worked during the year. See “Potential Payments Upon Termination or Change-in-Control.”

Senior Executive Change-in-Control Severance Plan

We have a senior executive CIC severance plan. The CIC severance plan establishes the severance benefits payable to eligible executives if they are involuntarily terminated following a change-in-control. All of our NEOs are eligible to participate in the CIC severance plan. An executive eligible to participate in the CIC severance plan as of the date of a change-in-control will be entitled to receive severance payments under the plan if, within 18 months after the change-in-control, either the executive’s employment is terminated by the Company without “cause” or he or she terminates employment for “good reason” (as such terms are defined in the plan). The severance payments and benefits will consist of: a lump sum payment equal to 2.0 times their annual salary and target bonus, and a lump sum payment equal to the cost of Consolidated Omnibus Budget Reconciliation Act (COBRA) health care benefit continuation of the executive and covered family members for twelve months. See “Potential Payments Upon Termination or Change-in-Control.”

No executive may receive severance benefits under more than one plan or arrangement. Dover does not provide tax gross-ups in the CIC severance plan.

Other Elements of Compensation

Clawback Policy

Currently, our PRP includes clawback provisions for termination for cause and the severance plan and CIC severance plan provide for clawback of benefits for breaches of the plan. Our LTIP provides that awards will be subject to such clawback requirements and policies as may be required by applicable law or Dover policies in effect from time to time. We intend to adopt a broader recovery policy once the SEC issues final rules.

Anti-hedging and Anti-pledging Policy

Currently, all employees who receive an award under our LTIP, including all NEOs, are prohibited from hedging or pledging their position in Dover stock.

Perquisites

We provide substantially no executive perquisites, nor does the Company own or operate any corporate aircraft. Management and the Compensation Committee believe that providing significant perquisites to executive officers would not be consistent with our overall compensation philosophy. As a result, we do not provide executive officers with social club memberships, company cars or car allowances, financial counseling, or any other perquisites. Executives participate only in programs generally available to Dover employees.

 

DOVER CORPORATION  –  2019 Proxy Statement 54


Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

 

Shareholding Guidelines

We believe that our executives will most effectively pursue the long-term interests of our shareholders if they are shareholders themselves. As a result, share ownership guidelines are in place for all NEOs (subject to exceptions that may be granted by the Compensation Committee for significant personal events or retirement planning). Our policy requires that NEOs hold/retain all equity grants until the share ownership guidelines are met. Based on current share ownership, all NEOs are currently in compliance with the guidelines.

 

 

LOGO

The Compensation Committee reserves the right to provide a portion of annual bonus in stock for any officer who fails to meet or make satisfactory progress toward satisfying the guidelines.

Risk Assessment

In 2018, Dover, with the assistance of Willis Towers Watson, updated the formal risk assessment that was conducted in 2017 for all our incentive compensation programs that have material impact on our financial statements. Willis Towers Watson inventoried incentive compensation programs at the corporate and operating company levels globally and conducted in-depth reviews of financially material plans, identified based on expected spend and income statement accounts tied to the program. The reviews focused on both the plan design features as well as internal risk mitigation controls in place. Based on this 2017 review and the 2018 update, we have concluded that Dover’s compensation practices and policies do not create risks that are reasonably likely to have a material adverse effect on the Company.

 

DOVER CORPORATION  –  2019 Proxy Statement 55


Table of Contents

   Compensation Committee Report

 

We reviewed and discussed with management the Compensation Discussion and Analysis for the year ended December 31, 2018.

Based on the review and discussions referred to above, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in Dover’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

Compensation Committee:   Keith E. Wandell (Chair)
  Peter T. Francis
  Kristiane C. Graham
  Michael F. Johnston
  Richard K. Lochridge
  Mary A. Winston

This report does not constitute “soliciting material” and shall not be deemed filed or incorporated by reference into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this report by reference, and shall not otherwise be deemed filed under such Acts.

 

DOVER CORPORATION 2019 Proxy Statement 56


Table of Contents

Executive Compensation Tables

Summary Compensation Table

The Summary Compensation Table and notes show all remuneration for 2018 provided to our NEOs, consisting of the following officers:

Our President & CEO and our former President & CEO;

Our Senior Vice President & CFO; and

Our three other most highly compensated executive officers as of the end of 2018.

The determination of the most highly compensated executive officers is based on total compensation paid or accrued for 2018, excluding changes in the actuarial value of defined benefit plans and earnings on nonqualified deferred compensation balances.

 

  Name and Principal Position   Year  

Salary

($)

   

Bonus

($)(1)

   

Stock

Awards

($)(2)

   

Option

Awards

($)(3)

   

Non-Equity

Incentive Plan

Compensation

($)(4)

   

Change in

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings

($)(5)

   

All Other

Compensation

($)(6)

   

Total

($)

 

  Richard J. Tobin

  President & Chief

  Executive Officer

 

 

2018

 

 

776,924

 

 

 

2,000,000

 

 

 

22,013,074

 

 

 

3,071,394

 

 

 

0

 

 

 

0

 

 

 

70,009

 

 

 

27,931,401

 

  Robert A. Livingston

  Former President & Chief

  Executive Officer

 

2018

 

 

366,667

 

 

 

0

 

 

 

271,307

 

 

 

333,303

 

 

 

0

 

 

 

628,096

 

 

 

83,609

 

 

 

1,682,982

 

 

2017

 

 

1,060,000

 

 

 

1,725,000

 

 

 

2,699,960

 

 

 

2,580,618

 

 

 

0

 

 

 

1,814,023

 

 

 

73,765

 

 

 

9,953,366

 

 

2016

 

 

1,030,000

 

 

 

880,000

 

 

 

2,599,952

 

 

 

2,519,488

 

 

 

0

 

 

 

1,225,883

 

 

 

37,932

 

 

 

8,293,255

 

  Brad M. Cerepak

  Senior Vice President & Chief

  Financial Officer

 

2018

 

 

705,000

 

 

 

773,000

 

 

 

800,049

 

 

 

901,146

 

 

 

0

 

 

 

123,659

 

 

 

30,830

 

 

 

3,333,684

 

 

2017

 

 

685,000

 

 

 

970,000

 

 

 

799,936

 

 

 

764,629

 

 

 

0

 

 

 

397,072

 

 

 

27,872

 

 

 

3,644,509

 

 

2016

 

 

670,000

 

 

 

530,000

 

 

 

740,014

 

 

 

717,089

 

 

 

0

 

 

 

278,934

 

 

 

320,331

 

 

 

3,256,368

 

  William W. Spurgeon

  President & Chief

  Executive Officer, Dover Fluids

 

2018

 

 

650,000

 

 

 

601,700

 

 

 

550,003

 

 

 

413,019

 

 

 

0

 

 

 

0

 

 

 

22,057

 

 

 

2,236,779

 

 

2017

 

 

650,000

 

 

 

640,000

 

 

 

549,965

 

 

 

350,458

 

 

 

0

 

 

 

1,119,977

 

 

 

21,289

 

 

 

3,331,689

 

 

2016

 

 

650,000

 

 

 

310,000

 

 

 

550,001

 

 

 

355,313

 

 

 

0

 

 

 

726,584

 

 

 

13,832

 

 

 

2,605,730

 

  Ivonne M. Cabrera

  Senior Vice President &

  General Counsel

 

 

2018

 

 

540,000

 

 

 

434,000

 

 

 

319,987

 

 

 

360,455

 

 

 

0

 

 

 

177,611

 

 

 

18,672

 

 

 

1,850,725

 

  Jay L. Kloosterboer

  Senior Vice President,

  Human Resources

 

2018

 

 

540,000

 

 

 

434,000

 

 

 

319,987

 

 

 

360,455

 

 

 

0

 

 

 

37,317

 

 

 

19,759

 

 

 

1,711,518

 

 

(1)

Bonus amounts generally represent payments under our AIP for the year indicated, for which payments are made in the first quarter of the following year. The AIP constitutes a non-equity incentive plan under FASB ASC Topic 718. Although they are based on the satisfaction of pre-established performance targets, AIP amounts are reported in the bonus column rather than the non-equity incentive plan compensation column to make clear that they are annual bonus payments for the year indicated. Mr. Tobin’s bonus consists of two parts, a one-time make-whole bonus of $1,000,000 and a guaranteed annual bonus of $1,000,000.

(2)

The amounts generally represent (a) the aggregate grant date fair value of performance shares granted during the year indicated, and (b) the aggregate grant date fair value of restricted stock unit awards granted during the year, in each case, calculated in accordance with FASB ASC Topic 718. Under FASB ASC Topic 718, the 2016, 2017 and 2018 performance share awards are considered performance and service conditioned. The grant date fair value for the 2016 performance share awards was $48.28, the grant date fair value for the 2017 performance share awards was $66.85, and the grant date fair values for the 2018 performance share awards were $79.75 and $82.09, respectively, for awards granted to Mr. Tobin and awards granted to the other NEOs. The amounts set forth in the table do not correspond to the actual value that might be realized by the named

 

DOVER CORPORATION 2019 Proxy Statement 57


Table of Contents

EXECUTIVE COMPENSATION TABLES

 

  executives. All equity awards outstanding as of May 9, 2018 were adjusted as a result of the spin-off of Apergy to preserve the value of the awards in accordance with the Employee Matters Agreement, dated May 9, 2018, between Dover and Apergy.

The grant date fair values of 2018 RSU awards were $79.75 and $82.09, respectively, for awards granted to Mr. Tobin and awards granted to the other NEOs. All RSU grants are eligible for dividend equivalent payments which are paid upon vesting.

For a discussion of the assumptions relating to calculation of the cost of equity awards, see Note 14 to the Notes to the Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2018.

(3)

The amounts represent the aggregate grant date fair value of SSAR awards granted during the year indicated, calculated in accordance with FASB ASC Topic 718, and do not correspond to the actual value that may be realized by the named executives. The grant date fair value for the 2018 SSAR awards was calculated using a Black-Scholes value of $15.41 per SSAR.

(4)

See Note (1) for a discussion of annual bonuses under the AIP as non-equity incentive plan compensation.

(5)

Amounts represent changes in present value of accumulated benefits under the pension plan and/or PRP during the year indicated. For more information, see “— Pension Benefits through 2018.” Mr. Spurgeon’s Change in Pension value is a negative amount of $222,117, so it’s not presented in the table above.

(6)

The amounts for 2018 for the NEOs are due to $9,625 in 401(k) matching contributions, as well as dividends received on RSUs. The amounts for 2017 for the NEOs are due to $9,450 in 401(k) matching contributions, as well as dividends received on RSUs. The amounts for 2016 for the NEOs are due to $9,275 in 401(k) matching contributions, as well as dividends received on RSUs. The amount for Mr. Spurgeon includes $1,922 in 2016 and $1,386 in 2017 for health club membership reimbursement. The amount for Mr. Kloosterboer includes $1,087 in 2018 for health club membership reimbursement. The amount for Mr. Tobin includes $17,837 of nonqualified deferred compensation match and $5,096 of 1% automatic contributions in the nonqualified deferred compensation plan, since he does not participate in the PRP.

CEO Employment Agreement

Mr. Tobin and Dover have entered into a three-year employment agreement commencing May 1, 2018. Under the terms of the agreement, Mr. Tobin is entitled to an initial annual base salary for 2018 of $1.2 million and a target annual bonus equal to 125% of base salary and receipt of an annual equity grant for each of Dover’s fiscal years ending during the term of the agreement with a grant date fair value of not less than $7 million. Mr. Tobin’s annual bonus for 2018 was guaranteed to be no less than the target annual bonus, pro-rated for the portion of 2018 on and following the commencement of the term. In addition, during the term of the employment agreement, Mr. Tobin will be entitled to employee benefits on the same basis as those generally available to similarly situated executives of Dover and certain indemnification protections, and Dover reimburse him for his legal expenses incurred in connection with negotiation of the employment agreement.

In addition, Mr. Tobin received a one-time make-whole equity grant consisting of $6 million in the form of performance shares, having the same performance and vesting terms as our February 2018 iTSR performance share grants to our other employees, and $13 million in the form of RSUs, which vest in five equal installments on December 15th of each calendar year, starting on December 15, 2018 and ending on December 15, 2022. Mr. Tobin also received a one-time make-whole cash payment of $1,000,000, provided that Mr. Tobin is obligated to repay this amount if he terminates his employment without good reason or if Dover terminates his employment for cause, as such terms are defined in the employment agreement, prior to May 1, 2019, and he is required to repay a pro-rata portion of this amount if his employment is terminated without good reason or for cause prior to May 1, 2020.

The employment agreement provides that in the event Mr. Tobin’s employment is terminated by Dover without cause or by Mr. Tobin for good reason, then he will be entitled to receive a cash payment equal to one and one half (1.5) times the sum of his base salary and target bonus, a prorated annual bonus for the year of termination, time-vesting of the one-time make-whole equity awards (with performance shares continuing to be subject to performance

 

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conditions) and a cash payment equal to 18 months’ of COBRA premiums, in each case, subject to the execution of a general release and compliance with applicable restrictive covenants.

The employment agreement contains an 18 month (or, if termination occurs following the third anniversary of the start date, a 12 month) post-termination non-competition and non-solicitation of employees and customers covenants, a confidentiality covenant, a mutual non-disparagement covenant, and an assignment of inventions covenant.

At the end of the term of the agreement, Mr. Tobin will continue to be employed by Dover as an at-will employee and participate in severance and other benefit plans on the same terms as other executives.

CEO Pay Ratio

In 2018, Dover completed the spin-off of Apergy, which reduced its employee headcount significantly from that employed for its 2017 pay ratio calculation. Given this impact, Dover has re-identified the median employee for 2018. As is permitted under SEC rules, to determine our median employee, we chose “base salary” as our consistently applied compensation measure. We estimated annual base salary for hourly workers employed for the entire year using their hourly rate and a reasonable estimate of hours worked for the year. For employees who commenced work during 2018, we annualized their annual base salary. Thirteen countries were excluded (2.7% of the total workforce) under the permissible 5% exclusion when we determined headcount on December 10, 2018, with employee counts as follows: Argentina (28), Austria (3), Costa Rica (17), Czech Republic (42), Dominican Republic (43), Kenya (2), Malaysia (111), Mexico (163), Norway (13), Portugal (12), South Korea (23), Taiwan (24), and Thailand (158). Our headcount was 23,874 employees (11,960 U.S. and 11,914 non-U.S.) and after country exclusions 23,235 employees (11,960 U.S. and 11,275 non-U.S.). A valid statistical sampling methodology was used to estimate the median base salary of our employees. We then produced a sample of employees who were paid within a 5% range of that median and selected an employee from within that group as our median employee. We determined that employee’s (Summary Compensation Table) total compensation was $42,889.

We calculated 2018 annual total compensation for both our median employee and Mr. Tobin using the same methodology that we use to determine our NEOs’ annual total compensation for the Summary Compensation Table. Because Mr. Tobin became our CEO during 2018, and was the CEO on the determination date of December 10, 2018, we annualized his 2018 compensation by increasing his salary to the amounts he would have received for a full year of service in 2018, so that his total compensation was $28,354,477, resulting in an estimated ratio of 661:1 for CEO pay to median worker pay.

Mr. Tobin’s compensation in 2018 included a one-time, make-whole equity award and cash payment that will not recur in future years. Without the make-whole award, Mr. Tobin’s annualized compensation in 2018 would have been $8,168,700, and would have resulted in an estimated pay ratio of 190:1.

 

DOVER CORPORATION  –  2019 Proxy Statement 59


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Grants of Plan-Based Awards in 2018

All awards listed in the table below have a grant date of May 23, 2018 for Mr. Tobin, and February 9, 2018 for all other executive officers. All equity awards outstanding as of May 9, 2018 were adjusted as a result of the spin-off of Apergy to preserve the value of the awards in accordance with the Employee Matters Agreement, dated May 9, 2018, between Dover and Apergy.

 

  Name   Type   Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards
    Estimated Future
Payouts Under
Equity Incentive Plan
Awards
   

All Other

Stock

Awards:

Number of

Shares of

Stock or

Units

(#)

   

All Other

Option

Awards:

Number of

Securities

Underlying

Options

(#)

   

Exercise

Price of

Option

Awards

($/Sh)

   

Grant

Date Fair

Value of

Stock and

Option

Awards

($)

 
 

Thresh-

old

($)(1)

   

Target

($)

   

Maximum

($)

   

Thresh-

old

(#)(1)

   

Target

(#)

   

Maximum

(#)

 

  Richard J. Tobin

 

SSAR (2)

                                                         

 

210,658

 

 

$

79.75

 

 

$

3,071,394

 

  Performance

Shares (3)

                                 

 

93,697

 

 

 

374,788

 

                         

$

7,472,336

 

 

RSU (4)

                                                 

 

182,329

 

                 

$

14,540,738

 

 

AIP (5)

   

 

1,500,000

 

 

 

3,000,000

 

             

  Robert A. Livingston

 

SSAR (6)

                                                         

 

21,629

 

 

$

82.09

 

 

$

333,303

 

  Performance

Shares (7)

                                 

 

0

 

 

 

0

 

                         

$

0

 

 

RSU (8)

                                                 

 

3,305

 

                 

$

271,307

 

 

AIP (9)

   

 

1,375,000

 

 

 

2,750,000

 

             

  Brad M. Cerepak

 

SSAR (6)

                                                         

 

58,478

 

 

$

82.09

 

 

$

901,146

 

  Performance

Shares (10)

                                 

 

4,873

 

 

 

19,492

 

                         

$

400,025

 

 

RSU (8)

                                                 

 

4,873

 

                 

$

400,025

 

 

AIP (11)

   

 

705,000

 

 

 

1,410,000

 

             

  William W. Spurgeon, Jr.

 

SSAR (6)

                                                         

 

26,802

 

 

$

82.09

 

 

$

413,019

 

  Performance

Shares (10)

                                 

 

4,020

 

 

 

16,080

 

                         

$

330,002

 

 

RSU (8)

                                                 

 

2,680

 

                 

$

220,001

 

 

AIP (11)

   

 

650,000

 

 

 

1,300,000

 

             

  Ivonne M. Cabrera

 

SSAR (6)

                                                         

 

23,391

 

 

$

82.09

 

 

$

360,455

 

  Performance

Shares (7)

                                 

 

1,949

 

 

 

7,796

 

                         

$

159,994

 

 

RSU (8)

                                                 

 

1,949

 

                 

$

159,994

 

 

AIP (11)

   

 

378,000

 

 

 

756,000

 

             

  Jay L. Kloosterboer

 

SSAR (6)

                                                         

 

23,391

 

 

$

82.09

 

 

$

360,455

 

  Performance

Shares (10)

                                 

 

1,949

 

 

 

7,796

 

                         

$

159,994

 

 

RSU (8)

                                                 

 

1,949

 

                 

$

159,994

 

   

AIP (11)

         

 

378,000

 

 

 

756,000

 

                                                       

 

(1)

Represents the minimum amount payable for a certain level of performance. Under each of our plans, there is no guaranteed minimum payment.

(2)

Represents an award of SSARs under the LTIP that will not be exercisable until May 23, 2021. The grant date fair value was calculated in accordance with FASB ASC 718, using a Black-Scholes value of $14.58 per SSAR.

(3)

Represents an award of performance shares under the LTIP. The performance shares vest and become payable after the three-year performance period ending December 31, 2020 subject to the achievement of the applicable performance goal. The

 

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  performance share awards are considered performance and service awards per FASB ASC 718 and the grant date fair value for the awards was calculated in accordance with FASB ASC 718, using a value of $79.75 per share. Includes a one-time make-whole grant of 75,971 performance shares to Mr. Tobin per the terms of the employment agreement.
(4)

Represents an award of RSUs under the LTIP made on May 23, 2018. The grant consists of 17,726 RSUs which vest in three equal annual installments beginning on March 15, 2019, and 164,603 RSUs, part of a one-time make-whole grant to Mr. Tobin per the terms of the employment agreement, which vest in five equal installments beginning on December 15, 2018. The grant date fair value for the awards were calculated in accordance with FASB ASC 718, using a value of $79.75 per share.

(5)

The amounts shown in this row reflect the potential payouts for 2018 under the AIP for Mr. Tobin as if he was employed a full year. A prorated bonus amount of $1,000,000 was paid to Mr. Tobin in December 2018 per the terms of the employment agreement.

(6)

Represents an award of SSARs under the LTIP that will not be exercisable until February 9, 2021. The grant date fair value was calculated in accordance with FASB ASC 718, using a Black-Scholes value of $15.41 per SSAR.

(7)

Represents an award of performance shares under the LTIP. Due to his retirement on April 30, 2018, Mr. Livingston’s 2018 performance share grant did not vest and he did not receive a payout from such grant.

(8)

Represents an award of RSUs under the LTIP made on February 9, 2018. The grant vests in three equal annual installments beginning on March 15, 2019. The grant date fair value for the awards were calculated in accordance with FASB ASC 718, using a value of $82.09 per share.

(9)

The amounts shown in this row reflect the potential payouts in February 2019 for 2018 under the AIP. Due to his retirement on April 30, 2018, Mr. Livingston did not earn a bonus for 2018.

(10)

Represents an award of performance shares under the LTIP. The performance shares vest and become payable after the three-year performance period ending December 31, 2020 subject to the achievement of the applicable performance goal. The performance share awards are considered performance and service awards per FASB ASC 718 and the grant date fair value for the awards was calculated in accordance with FASB ASC 718, using a value of $82.09 per share.

(11)

The amounts shown in this row reflect the potential payouts in February 2019 for 2018 under the AIP. The bonus amount actually paid in February 2019 is disclosed in the Summary Compensation Table in the column “Bonus” for 2018 for the executive officer.

 

DOVER CORPORATION 2019 Proxy Statement 61


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Outstanding Equity Awards at Fiscal Year-End 2018

Awards listed below with grant dates beginning in 2013 were made under the LTIP. Awards listed below with grant dates between 2006 through 2012 were made under the 2005 Plan. All equity awards outstanding as of May 9, 2018 were adjusted as a result of the spin-off of Apergy to preserve the value of the awards in accordance with the Employee Matters Agreement, dated May 9, 2018, between Dover and Apergy.

 

     
  Name  

Option Awards

   

Stock Awards

 
 

Number of

Securities

Underlying

Unexercised

Options (#)

Exercisable

   

Number of
Securities
Underlying
Unexercised
Options (#)

Unvested

    Option
Exercise
Price ($)
     Option
Expiration
Date
   

Number of
Shares or
Units

of Stock

That Have

Not
Vested (#)

   

Market
Value of
Shares or
Units of
Stock
That
Have Not

Vested ($)

   

Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,

Units or
Other Rights
That Have
not
Vested (#)

   

Equity
Incentive
Plan
Awards:

Market or
Payout
Value
of Unearned
Shares, Units
or Other
Rights that
Have not
Vested ($)

 

  Richard J. Tobin

         

 

210,658

(1) 

 

 

79.75

 

  

 

5/23/2028

 

                               
                                  

 

131,683

(11) 

 

 

9,342,909

(16) 

 

 

75,971

(17) 

 

 

5,390,142

(20) 

          

 

17,726

(12) 

 

 

1,257,660

(16) 

 

 

17,726

(17) 

 

 

1,257,660

(20) 

  Robert A. Livingston

         

 

21,629

(2) 

 

 

82.09

 

  

 

4/30/2023

 

                               
         

 

242,348

(3) 

 

 

66.85

 

  

 

4/30/2023

 

                               
         

 

323,174

(4) 

 

 

48.28

 

  

 

4/30/2023

 

                               
 

 

252,480

(5) 

         

 

61.79

 

  

 

4/30/2023

 

                               
 

 

224,236

(6) 

         

 

69.57

 

  

 

4/30/2023

 

                               
 

 

348,340

(7) 

         

 

53.40

 

  

 

2/14/2023

 

                               
                                  

 

3,305

(13) 

 

 

234,490

(16) 

               
                                  

 

13,463

(14) 

 

 

955,200

(16) 

               
          

 

8,976

(15) 

 

 

636,847

(16) 

   

  Brad M. Cerepak

         

 

58,478

(2) 

 

 

82.09

 

  

 

2/9/2028

 

                               
         

 

71,806

(3) 

 

 

66.85

 

  

 

2/10/2027

 

                               
         

 

91,981

(4) 

 

 

48.28

 

  

 

2/11/2026

 

                               
 

 

71,860

(5) 

         

 

61.79

 

  

 

2/12/2025

 

                               
 

 

60,371

(6) 

         

 

69.57

 

  

 

3/10/2024

 

                               
 

 

93,732

(7) 

         

 

53.40

 

  

 

2/14/2023

 

                               
 

 

56,605

(8) 

         

 

48.59

 

  

 

2/9/2022

 

                               
 

 

44,462

(9) 

         

 

49.49

 

  

 

2/10/2021

 

                               
                                  

 

4,873

(13) 

 

 

345,739

(16) 

 

 

4,873

(18) 

 

 

345,739

(20) 

                                  

 

3,989

(14) 

 

 

283,020

(16) 

 

 

5,983

(19) 

 

 

424,494

(20) 

          

 

2,555

(15) 

 

 

181,277

(16) 

   

  William W. Spurgeon, Jr.

         

 

26,802

(2) 

 

 

82.09

 

  

 

2/9/2028

 

                               
         

 

32,911

(3) 

 

 

66.85

 

  

 

2/10/2027

 

                               
         

 

45,575

(4) 

 

 

48.28

 

  

 

2/11/2026

 

                               
 

 

35,606

(5) 

         

 

61.79

 

  

 

2/12/2025

 

                               
 

 

28,747

(6) 

         

 

69.57

 

  

 

3/10/2024

 

                               
 

 

33,709

(7) 

         

 

53.40

 

  

 

2/14/2023

 

                               
                                  

 

2,680

(13) 

 

 

190,146

(16) 

 

 

4,020

(18)