UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No.     )

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Filed by a Party other than the Registrant

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	Soliciting Material under §240.14a-12

Comfort Systems USA, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):
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Comfort Systems USA, Inc. 675 Bering Drive, Suite 400 Houston, Texas 77057

Message from
our Chair and CEO

Franklin Myers I Brian E. Lane I April 8, 2024

To our Stockholders:

You are cordially invited to attend the Annual Meeting of the Stockholders of Comfort Systems USA, Inc., which will be held on Friday, May 17, 2024 at 11:00 a.m. Central Time.

Information about the meeting is presented on the following pages. At this meeting, you are being asked to elect the ten directors nominated by the board to serve until the next annual meeting; to ratify the appointment of Deloitte & Touche LLP, independent auditors, as the Company’s auditors for 2024; and to approve, by stockholder non-binding advisory vote, the compensation paid by the Company to its named executive officers, commonly referred to as a “Say on Pay” proposal.

Please read the proxy statement, which presents important information about the Company and each of the items being presented for stockholder vote. Whether or not you intend to be present in person, when you have finished reading the statement, please submit your vote promptly by telephone or internet, which saves the Company money, or by marking, signing, and returning your proxy card in the enclosed envelope so that your shares will be represented.

We hope that many of you will be able to attend the meeting in person. We look forward to seeing you there.

Sincerely yours,

Franklin Myers Chair of the Board	Brian E. Lane President and Chief Executive Officer

April 8, 2024

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NOTICE IS HEREBY GIVEN that the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) of Comfort Systems USA, Inc., a Delaware corporation (the “Company”), will be held:
	Friday, May 17, 2024 11:00 a.m. Central Time
	The Houstonian 111 North Post Oak Lane Houston, Texas 77024
	Stockholders of record at the close of business on March 18, 2024 are entitled to notice of, and to vote at, the Annual Meeting.
		By Order of the Board of Directors,     Laura Howell   Corporate Secretary Houston, Texas April 8, 2024

REVIEW YOUR PROXY STATEMENT AND  VOTE IN ONE OF FOUR WAYS:
Please refer to the enclosed proxy materials or the information forwarded by your bank, broker, or other intermediary to see which voting methods are available to you.	INTERNET Visit the website on your proxy card	BY TELEPHONE Call the telephone number on your proxy card	BY MAIL Sign, date, and return your proxy card in the enclosed envelope	IN PERSON Attend the annual meeting in Houston, Texas

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Proxy Summary

2024 Annual Meeting of Stockholders

TIME AND DATE	LOCATION	RECORD DATE
Friday, May 17, 2024 11:00 a.m. Central Time	The Houstonian 111 North Post Oak Lane Houston, Texas 77024	Stockholders of record at the close of business on March 18, 2024 are entitled to notice of, and to vote at, the Annual Meeting

Voting Matters and our Board’s Recommendations

Proposal			Board’s Recommendation			See Page
1	Election of the ten director nominees for a one-year term			FOR each director nominee		14
2	Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024			FOR		28
3	Advisory vote to approve the compensation of the Company’s named executive officers			FOR		29

In addition to these matters, stockholders may be asked to vote on such other business as may properly come before our 2024 annual meeting of stockholders.

How to Vote

Stockholders of Record

Have your proxy card available and follow the instructions.						Beneficial Owners
		By Telephone		Call toll-free 1-800-PROXIES (1-800-776-9437) in the U.S. or 1-201-299-4446 from outside the country		If you are a beneficial owner and your shares are held by a bank, broker, or other intermediary, you should follow the instructions provided to you by that firm. Although most banks and brokers now offer voting by mail, telephone, and on the internet, availability and specific procedures will depend on their voting arrangements.
		By Internet		Visit, 24/7, www.voteproxy.com
		By Mail		Complete, date, and sign your proxy card and send by mail in the enclosed postage-paid envelope
		By Mobile Device		Scan the QR code

The deadline to vote by phone or by internet is 10:59 p.m. Central Time on May 16, 2024. If you vote by phone or electronically, you do not need to return a proxy card.

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Governance Overview

Director Nominees

											Committee Membership
Name & Principal Occupation			Age		Director Since		Independent		Other Current Public Company Boards		Audit		Compensation & Human Capital		Nominating, Governance, & Sustainability
	DARCY G. ANDERSON Vice Chairman, Hillwood Management		67		2008				0
	HERMAN E. BULLS Vice Chairman, Americas and International Director, JLL		68		2001				2
	RHOMAN J. HARDY Former Sr. Vice President, Shell USA, Inc.		55		2023				1
	BRIAN E. LANE President and CEO, Comfort Systems USA		67		2010				1
	PABLO G. MERCADO CFO, Lithium Americas Corp.		47		2018				0
	FRANKLIN MYERS Former CFO, Cameron International CHAIR OF THE BOARD SINCE 2014		71		2005				1
	WILLIAM J. SANDBROOK Chairman and Co-CEO, Andretti Acquisition Corp.		66		2018				2
	CONSTANCE E. SKIDMORE Former Managing Partner and Board Member, PwC		72		2012				2
	VANCE W. TANG President, VanTegrity Consulting		57		2012				1
	CINDY L. WALLIS-LAGE Former Executive Director, Sustainability & Resilience, Black & Veatch		61		2021				1

Committee chair

Committee member

Audit Committee financial expert

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Snapshot of Director Nominees

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Our Governance Practices

CORPORATE GOVERNANCE HIGHLIGHTS

	9 of our 10 continuing directors are independent			Active oversight of strategic and risk management issues
	All committees are solely comprised of independent board members			Stock ownership guidelines for directors and executives
	Annual elections of the Board			Annual review and succession planning
	Our Board balances fresh thinking and new perspectives with institutional knowledge and stability			No overboarding
	Annual Board self-evaluations to evaluate performance and effectiveness			Focus on creating long-term value for our stockholders
	Regular investor outreach and engagement to discuss our performance, governance policies, and other topics: during 2023, executive officers held more than 160 meetings, including those held during the course of eight investor conferences and six roadshows			New director orientation and ongoing education
	Policy to address the resignation of a director nominee who receives more votes “withheld” than votes “for” his or her election in an uncontested election			Mandatory retirement policy following a director’s 75th birthday

Sustainability and Corporate Responsibility 

Our commitment to sustainability

Everyone at Comfort Systems USA shares a responsibility for doing business ethically and in a sustainable manner, preserving our good name. We ensure that this responsibility applies at every level in our organization, and everyone, from corporate officers to members of our Board of Directors to our field personnel, is responsible for overseeing these efforts. We are committed to promoting sustainable business practices.

INDUSTRY COMPLIANCE						OSHA COMPLIANCE
9 CERTIFICATIONS •   LEED® Accredited •   Six Sigma Methodology •   Refrigerant Handling •   Medical Certification		•   ASSE 6010 Certified Medical Gas Installers •   Certified Cross Connection Control Testers •   ASME and NB Accredited		•   ASHE Healthcare Construction •   Certificate — National Environmental Balancing Bureau		1.10 OSHA Recordable Rate In 2023, our Occupational Safety and Health Administration (“OSHA”) recordable rate was 52% better than the most recently published rate for our industry as of our 2023 Form 10-K filing date.

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SAFETY		HUMAN CAPITAL
We focus on company-wide accident prevention, not just OSHA compliance. We believe safety has more to do with what is in the minds of our workers and the hearts of our management. Our employees receive comprehensive training and certification in OSHA 10-Hour Safety. Managers and supervisors receive OSHA 30-hour safety training. We also provide our employees with the safety equipment they need to perform their work. Our Think 5 x 5 initiative increases worker awareness and enhances the company culture to “Safely take 5 seconds and 5 steps back” to think about their surroundings and work area to make sure it is a safe environment. We strictly adhere to all federal, state, and local regulations.		We provide opportunities for personal and professional growth and development and invest in leadership training, mentoring, and succession planning initiatives to equip our future leaders for generations to come. We have created in-house training courses specific to leadership, communication, relationship management, diversity and inclusion, ethics and conduct in the workplace, and many more key competencies for our employees’ development.
ENVIRONMENT		CONTINUOUS IMPROVEMENT
We believe that the work we perform to optimize and upgrade systems and to enable wise controls allows our customers to reduce their energy use, which in turn reduces our nation’s carbon footprint. Our emphasis on environmental stewardship and improving productivity drives our effort to become more energy efficient. We strive to minimize our environmental impacts through Board oversight, regulatory compliance, ongoing improvement investments, local specialists, and community group involvement. Our Board supplies high-level oversight of our corporate sustainability performance and material sustainability issues, as applicable, through the Nominating, Governance, and Sustainability Committee, which reviews and advises on updates from our internal Sustainability Committee, made up of a diverse set of corporate leadership, on at least a bi-annual basis.		We have invested in the experts, training, and internal and external knowledge transfer to ensure that we are properly scaling, achieving true buildability, and fundamentally and continuously improving our design capabilities to meet our customers’ evolving requirements. We are improving productivity by increasing use of innovative techniques in prefabrication, project design, and planning, as well as in coordination and production methods. Our investments in design and building information modeling enable us to collaborate with our customers to achieve reliable and energy efficient construction outcomes and to eliminate unnecessary waste. We work to identify, develop, and implement new materials, products, and methods that can achieve greater productivity and more efficient and sustainable outcomes.
OUR COMMUNITIES		DIVERSITY AND INCLUSION
We believe in making a positive difference in people’s lives and maintaining the health and welfare of the communities where we live and work. We promote, encourage, and support a diverse range of corporate social responsibility activities. Our employees’ involvement in the many initiatives we support is integral to the success of our impact in the communities where we operate.		We are an equal opportunity employer, and we welcome and celebrate our teams’ differences, experiences, and beliefs. We expect all employees to be treated with dignity and respect in an environment free from discrimination and harassment regardless of race, color, religion, sex, sexual orientation, gender identity or expression, national origin, age, disability, veteran status, genetic information, or any other protected class. We know that diversity is truly a competitive advantage that helps drive growth and innovation, and we have increasingly focused on diversity and inclusion programs within our Company. Diversity and inclusion is among our leadership team’s top priorities, with clearly outlined near-term actions to accelerate progress in outreach, representation, development, and advancement of underrepresented groups within our Company. The Compensation and Human Capital Committee of our Board of Directors provides oversight on our diversity and inclusion strategy.

Overview of Audit Matters

The Audit Committee has re-appointed Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024. 

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Stockholder Engagement and Compensation Overview

Stockholder Engagement

Throughout the year, we meet regularly with investors and actively seek their input on topics related to our performance and our compensation and governance policies, as well as a wide variety of other topics on which they may have feedback, so that we may address any questions or concerns of our stockholders. We value our stockholders’ input and welcome feedback through our ongoing engagement practices. Our stockholders are generally supportive of our executive compensation program, which is summarized below, as evidenced by our historically high levels of support for say-on-pay proposals.

Compensation Objectives

Compensation Highlights

COMPENSATION PRACTICES
	A majority of each executive officer’s compensation is at-risk (i.e., variable and not fixed).*			Executive officers and directors are subject to stock ownership requirements.
	A majority of each executive officer’s compensation is tied to the Company’s financial performance and/or stock price.*			The Company has adopted a compensation clawback policy and an anti-hedging/pledging policy that apply to all executive officers.
	50% of each executive officer’s equity awards are subject to the Company achieving specific performance goals over a 3-year time horizon.*			The Compensation and Human Capital Committee and management routinely engage with independent third parties, including an independent compensation consultant and the Company’s stockholders, to advise and provide feedback on executive compensation matters.

Pay-For-Performance

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General Meeting Information

TIME AND DATE   Friday, May 17, 2024 11:00 a.m. Central Time	LOCATION   The Houstonian 111 North Post Oak Lane Houston, Texas 77024	RECORD DATE   Stockholders of record at the close of business on March 18, 2024 are entitled to notice of, and to vote at, the Annual Meeting.

Why am I receiving this Proxy Statement?

The enclosed proxy is solicited by the Board of Directors (the “Board”) of Comfort Systems USA, Inc. (the “Company”) for the 2024 Annual Meeting of Stockholders (the “Annual Meeting”), to be voted at the Annual Meeting. This proxy statement and the enclosed proxy are first being provided to stockholders on or about April 8, 2024. 

When and where is the 2024 Annual Meeting of Stockholders? 

The Annual Meeting will be held at The Houstonian, 111 North Post Oak Lane, Houston, Texas 77024, at 11:00 a.m. Central Time on Friday, May 17, 2024, and at any reconvened meetings after any adjournments or postponements thereof. 

Who can vote? 

The holders of record of shares of the Company’s common stock, $.01 par value per share (“Common Stock”), at the close of business on March 18, 2024 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting. 

How do I vote? 

If you are a record stockholder, you may vote in person at the Annual Meeting or by proxy. You may submit your vote by proxy by providing your voting instructions by internet or telephone or by signing, dating, and returning a proxy card. The instructions for each method of voting are on the proxy card. If you wish to vote in person at the meeting, be sure to bring a form of personal picture identification with you. 

What are the voting rights of holders of Common Stock? 

Each share of Common Stock is entitled to one vote on each matter before the Annual Meeting. 

What are my voting choices and what is the required vote? 

By giving us your proxy, you authorize the persons named on the proxy card to vote your shares in the manner you indicate at the Annual Meeting or at any adjournments or postponements thereof.

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Proposal		Voting Choices		Board Recommendation		Voting Details and Applicable Policies		Withholding, Abstaining, and Broker Non-Votes
1  Election of Directors In the vote on the election of director nominees nominated by the Board of Directors to serve until the 2025 Annual Meeting, stockholders may:		•  Vote for all nominees •  Withhold authority from the proxy holders to vote for all nominees •  Vote for all nominees except those specified		FOR all nominees		The Board recommends a vote FOR all nominees. If a quorum is present, the ten nominees for election as directors receiving the greatest number of votes properly cast at the Annual Meeting, or at any adjournments or postponements thereof, will be elected. The Company has a policy to address the resignation of an incumbent director who receives more votes “withheld” than votes “for” his or her election. See the subsection titled “Director Resignation Policy” below.		Votes withheld from any director are counted for purposes of determining the presence or absence of a quorum for the transaction of business. Broker non-votes will be counted toward a quorum, but will not be taken into account in determining the outcome of the election.
2  Ratification of Auditors In the vote on whether to ratify the selection of Deloitte & Touche LLP as independent auditors for the Company for the year ending December 31, 2024, stockholders may:		•  Vote for ratification •  Vote against ratification •  Abstain from voting on ratification		FOR		The Board recommends a vote FOR ratification. If the stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Deloitte & Touche LLP, but still may retain them. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. The affirmative vote of a majority of the votes cast by stockholders represented at the Annual Meeting and entitled to vote on this proposal will be required to ratify the appointment of the independent auditors.		Abstentions will be counted toward a quorum, but will not be taken into account in determining the outcome of this vote.
3  “Say on Pay” Vote In the non-binding advisory vote on whether to approve the compensation paid by the Company to its named executive officers, stockholders may:		•  Vote for approval •  Vote against approval •  Abstain from voting on the approval		FOR		The Board recommends a vote FOR approval. The affirmative vote of a majority of the votes cast by stockholders represented at the Annual Meeting and entitled to vote on this proposal will constitute the stockholders’ non-binding approval with respect to the Company’s executive compensation program. The Board and the Compensation and Human Capital Committee will review the voting results and take them into consideration when making future decisions regarding executive compensation.		Abstentions and broker non-votes will be counted toward a quorum, but will not be taken into account in determining the outcome of this vote.

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What constitutes a quorum? 

A quorum is the minimum number of shares required to hold a meeting. Consistent with Delaware law and the Company’s Bylaws, the holders of a majority in number of the total outstanding shares of stock of the Company entitled to vote at the meeting, present in person or represented by proxy, constitutes a quorum as to that matter. As of the Record Date, 35,684,609 shares of Common Stock, representing the same number of votes, were outstanding. Therefore, the presence of holders of Common Stock representing at least 17,842,305 votes will be required to establish a quorum.

What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in street name? 

If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company (formerly American Stock Transfer & Trust Company), you are considered the stockholder of record with respect to those shares, and the accompanying Notice of Annual Meeting was sent directly to you by the Company. 

If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name,” and the Notice of Annual Meeting was forwarded to you by your bank, broker, or other intermediary. The organization holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.

What happens if I do not give specific voting instructions? 

If you are a stockholder of record and you sign and return a proxy card without giving specific voting instructions, then the proxy holders will vote your shares FOR the nominees listed in Proposal 1, FOR the ratification of the appointment of Deloitte & Touche LLP as the Company’s auditors for 2024 in Proposal 2, and FOR approval with respect to the Company’s executive compensation program in Proposal 3. 

If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under New York Stock Exchange (“NYSE”) rules, the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters (including uncontested director elections and “Say on Pay”). If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter (including uncontested director elections and “Say on Pay”), the organization that holds your shares will inform our election inspectors that it does not have the authority to vote on this matter with respect to your shares and your shares will not be voted. This is generally referred to as a “broker non-vote.” When our election inspectors tabulate the votes for any particular matter, broker non-votes will be counted for purposes of determining whether a quorum is present but will not otherwise be counted. We encourage you to provide voting instructions to the organization that holds your shares.

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Can I change my vote after I return my proxy card? 

Yes. A proxy may be revoked by a record stockholder at any time before it is voted by (i) returning to the Company another properly signed proxy bearing a later date, (ii) delivering a written revocation to the Secretary of the Company no later than the close of business on May 16, 2024, or (iii) attending the Annual Meeting, or any adjourned session thereof, and voting the shares covered by the proxy in person. If your stock is held in street name, you must follow the instructions of the broker, bank, or nominee as to how to change your vote. 

Who pays to prepare, mail, and solicit the proxies? 

The Company will pay the expense of soliciting proxies. In addition to the solicitation of proxies by use of the mails, the Company may use the services of its officers, directors, and regular employees as well as brokerage houses and other stockholders to solicit proxies personally and by mail, telephone, or email communication. The Company will reimburse brokers and other persons for their reasonable charges and expenses in forwarding soliciting materials to their principals. Officers and employees of the Company will receive no compensation in addition to their regular salaries to solicit proxies. 

Who tabulates the votes? 

Votes cast by proxy or in person at the Annual Meeting will be counted by two people appointed by the Company to act as election inspectors for the Annual Meeting. 

Could other matters be decided at the Annual Meeting? 

We do not know of any matters that may be properly presented for action at the Annual Meeting other than Proposals 1, 2, and 3. If other business does properly come before the Annual Meeting, the persons named in the proxy intend to act on those matters as they deem advisable. With respect to shares held in street name, the nominee may vote on those matters, subject to the NYSE’s rules on the exercise of discretionary authority. 

What happens if the Annual Meeting is postponed or adjourned? 

Your proxy may be voted at the postponed or adjourned Annual Meeting. You will still be able to change your proxy until it is voted. 

How can I find the Company’s governance documents, such as its corporate Governance Standards, Director Independence Guidelines, Code of Conduct, and Board committee charters? 

All these documents can be found on our website at http://investors.comfortsystemsusa.com under the “Governance” tab. Please note that documents and information on our website are not incorporated into this proxy statement by reference. These documents are also available in print by writing to the Office of the General Counsel, 675 Bering Drive, Suite 400, Houston, Texas 77057. 

How can I receive a copy of the Annual Report?

The Annual Report to Stockholders, which includes the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, accompanies this proxy statement and may also be accessed through our website—http://investors.comfortsystemsusa.com.

Where can I find the voting results of the Annual Meeting? 

We plan to announce the preliminary voting results at the Annual Meeting and to publish the final results in a current report on Form 8-K, which we will file with the United States Securities and Exchange Commission (the “SEC”) and make available on our website—http://investors.comfortsystemsusa.com. 

When and where will a list of stockholders be available? 

A list of stockholders of record will be available for examination at the Company’s headquarters during ordinary business hours for the ten days prior to the Annual Meeting.

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PROPOSAL 1

Election of Directors

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF THE TEN DIRECTOR NOMINEES.

Board of Directors

Ten directors will be elected at the Annual Meeting to serve for a one-year term expiring at the Annual Meeting of Stockholders expected to be held in May 2025.

The nominees for election at the Annual Meeting are:

(each a “Nominee” and collectively the “Nominees”). Mr. Hardy took office in October 2023 and is thus standing for his first election at an annual meeting of stockholders.

If elected, each Nominee has agreed to serve for a term of one year expiring at the 2025 Annual Meeting of Stockholders. It is expected that all the Nominees will be able to serve, but if any Nominee is unable to serve, the proxies reserve discretion to vote, or refrain from voting, for a substitute nominee. 

Information with Respect to Nominees for Director

Key Information About Our Nominees

										Committee Membership
Name		Primary (or Former) Occupation		Age		Director Since		Independent		Audit		Compensation and Human Capital		Nominating, Governance, and Sustainability
Darcy G. Anderson		Vice Chairman of Hillwood Management		67		2008
Herman E. Bulls		Vice Chairman, Americas and International Director of JLL		68		2001
Rhoman J. Hardy		Former Senior Vice President of Shell USA, Inc.		55		2023
Brian E. Lane		President and CEO of Comfort Systems USA		67		2010
Pablo G. Mercado		CFO of Lithium Americas Corp.		47		2018
Franklin Myers ✪		Former CFO of Cameron International		71		2005
William J. Sandbrook		Chairman and Co-CEO of Andretti Acquisition Corp.		66		2018
Constance E. Skidmore		Former Managing Partner and Board Member of PwC		72		2012
Vance W. Tang		President of VanTegrity Consulting		57		2012
Cindy L. Wallis-Lage		Former Executive Director, Sustainability & Resilience of Black & Veatch		61		2021

✪

Board Chair

Committee chair

Committee member

Audit Committee financial expert

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Set forth below are the names, ages as of March 31, 2024, and principal occupations for at least the past five years of each of the Nominees and the names of any other public companies on which each is currently serving, or has served in the past five years, as a director: 

	DARCY G. ANDERSON
	Age 67   Director   Independent		Committees:   •  Audit   •  Compensation and Human Capital
Darcy G. Anderson has served as a Director of the Company since March 2008. Since April 2009, Mr. Anderson has served as Vice Chairman of Hillwood Management, a real estate, oil and gas, and investments company. From November 2000 until April 2009, Mr. Anderson served as Chief People Officer and Vice President for Perot Systems Corporation, an information technology services and consulting firm. Prior to joining Perot Systems, Mr. Anderson held various positions at Hillwood Development Corporation beginning in 1987, including Senior Vice President for Corporate Affairs and Chief Operating Officer. Mr. Anderson also served as president of Hillwood Urban, overseeing all of the operations and development for the company’s Victory project and the new American Airlines Center in downtown Dallas. He also served in various leadership roles for the Perot ’92 Presidential Campaign. Mr. Anderson joined Electronic Data Systems (EDS) in 1983 working in recruiting management. Prior to his employment with EDS, Mr. Anderson completed five years of active duty in the United States Army Corp of Engineers. He is on the Executive Committee of the Dallas Regional Chamber of Commerce. He is a Civilian Aide to the Secretary of the Army representing North Texas. Mr. Anderson is a graduate of the United States Military Academy at West Point.   Mr. Anderson has significant experience and knowledge of real estate development, human resources and leadership development practices, energy efficiency, corporate facilities management, and information technology services.
	HERMAN E. BULLS
	Age 68   Director   Independent		Committees:   •  Nominating, Governance, and Sustainability
Herman E. Bulls has served as a Director of the Company since February 2001. Mr. Bulls serves as Vice Chairman, Americas and International Director of JLL, an international full-service real estate firm. He is the founder of JLL’s Public Institutions division and served as Chairman and Chief Executive Officer from January 2002 until January 2014. From September 2000 until August 2001, Mr. Bulls served as Executive Vice President and Chief Operating Officer of one of the nation’s largest Fannie Mae multifamily lenders. From March 1998 to September 2000, Mr. Bulls was a Managing Director for JLL. From 1989 until 1998, he held several positions with the predecessor organization, LaSalle Partners. Prior to his employment with JLL, he served over eleven years of active duty service with the United States Army. Mr. Bulls was the Co-Founder, President, and Chief Executive Officer of Bulls Capital Partners, a commercial mortgage firm. He sold the firm to a Wall Street entity in 2010. Mr. Bulls retired as a Colonel from the Army Reserve. Mr. Bulls is a member of the Board of Directors of the West Point Association of Graduates, serves as a member of the Real Estate Advisory Committee for New York State Teachers’ Retirement System, and serves on the Board of Directors of Host Hotels, USAA, Collegis Education, and Fluence Energy, where he serves as Chairman of the board. Mr. Bulls also currently serves on the Board of Governors for the American Red Cross, the Military Bowl Foundation (emeritus), and the Defense Policy Board. Mr. Bulls previously served on the Board of Directors of American Campus Communities from January 2021 to August 2022, when the firm was purchased by Blackstone, Computer Sciences Corporation (CSC) from 2015 to 2017, Exelis Inc. from 2011 until its 2015 merger with Harris Corporation, Tyco International from 2014 until its 2016 merger with Johnson Controls International PLC, and Rasmussen College until its sale to a private equity partner. Mr. Bulls is a graduate of the United States Military Academy at West Point and of the Harvard Business School.   Mr. Bulls has decades of real estate and finance experience with a particular knowledge of team-building, marketing, and strategic development. Additionally, he is a seasoned director with vast governance experience with public, private, and not-for-profit organizations.

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	RHOMAN J. HARDY
	Age 55   Director   Independent		Committees:   •  Audit
Rhoman J. Hardy has served as a Director of the Company since October 2023. Mr. Hardy founded HardLine Consulting LLC in July 2022, providing expertise in strategy and leadership to companies focused on energy, technical services, and infrastructure. Prior to then, he served in various leadership positions with Shell USA, Inc., having most recently served as Senior Vice President, Shell Chemicals and Products, for the U.S. Gulf Coast from December 2018 until his retirement in May 2022 and General Manager, Shell Geismar Chemical Site, from June 2015 to December 2018. Mr. Hardy first joined Shell in 1988. Mr. Hardy is a Director with HF Sinclair and an operating partner with Bernhard Capital. Mr. Hardy also serves on the board of the following non-profit organizations: Baton Rouge General Hospital System and Louisiana State University Foundation. He is a graduate of Louisiana State University with a B.S. in Electrical Engineering and Rice University with an Executive MBA.   Mr. Hardy has a background in engineering and offers extensive technical and operational expertise as well as experience in executive management and service as a director on a public company board.  Mr. Hardy was recommended by a non-management director as nominee for director.
	BRIAN E. LANE
	Age 67   Director, President, and Chief   Executive Officer		Committees:   •  Not applicable
Brian E. Lane has served as Chief Executive Officer and President of the Company since December 2011 and as a Director since November 2010. Mr. Lane served as the Company’s President and Chief Operating Officer from March 2010 until December 2011. Mr. Lane joined the Company in October 2003 and served as Vice President and then Senior Vice President for Region One of the Company until he was named Executive Vice President and Chief Operating Officer in January 2009. Prior to joining the Company, Mr. Lane spent fifteen years at Halliburton, the global service and equipment company devoted to energy, industrial, and government customers. During his tenure at Halliburton, he held various positions in business development, strategy, and project initiatives. He departed as the Regional Director of Europe and Africa. Mr. Lane’s additional experience included serving as a Regional Director of Capstone Turbine Corporation, a distributed power manufacturer. He also was a Vice President of Kvaerner, an international engineering and construction company where he focused on the chemical industry. Mr. Lane is a member of the Board of Directors of Main Street Capital Corporation and previously served as a member of the Board of Directors of Griffin Dewatering Corporation. Mr. Lane earned a Bachelor of Science in Chemistry from the University of Notre Dame and his MBA from Boston College.   Mr. Lane has more than thirty years of experience in the construction and engineering industries. As the Company’s Chief Executive Officer and President, Mr. Lane provides the Board a valuable perspective on the Company’s day-to-day operations and on current trends and developments in the industry.
	PABLO G. MERCADO
	Age 47   Director   Independent		Committees:   •  Audit   •  Compensation and Human Capital
Pablo G. Mercado has served as a Director of the Company since November 2018. Mr. Mercado has served as Executive Vice President and Chief Financial Officer of Lithium Americas Corp. since April 2023 (both before the 2023 separation transaction, through which it created a separate public company consisting of its North American business, and continuing in that role for the North American business formed under the same name). Previously, Mr. Mercado served as Executive Vice President and Chief Financial Officer of EnLink Midstream, LLC, a midstream energy services company, from July 2020 to December 2022. Prior to July 2020, Mr. Mercado served as Senior Vice President and Chief Financial Officer of Forum Energy Technologies, Inc. (“Forum Energy”), a global oilfield products company, from March 2018 to July 2020. Mr. Mercado also previously held various finance and corporate development positions at Forum Energy since joining in November 2011, including Senior Vice President, Finance from June 2017 to March 2018 and Vice President, Operations Finance from August 2015 to June 2017. Prior to Forum Energy, Mr. Mercado was an investment banker with the Oil and Gas Group of Credit Suisse Securities (USA) LLC where he worked with clients in the energy industry from 2005 to 2011. Between 1998 and 2005, Mr. Mercado was an investment banker at UBS Investment Bank and Bank of America. Mr. Mercado holds a B.B.A. from the Cox School of Business, a B.A. in Economics from the Dedman College at Southern Methodist University, and an M.B.A. from The University of Chicago Booth School of Business.   Mr. Mercado has extensive public company finance and accounting experience, and he has significant experience in corporate strategy and operations.

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	FRANKLIN MYERS
	Age 71   Director and Board Chair   Independent		Committees:   •  Nominating, Governance, and Sustainability
Franklin Myers has served as a Director of the Company since May 2005 and as Chair of the Board since May 2014. Mr. Myers has been a Senior Advisor and advisory director of Quantum Energy Partners, a private equity firm, since February 2013. From April 2008 until March 2009, Mr. Myers served as Senior Advisor to Cameron International Corporation, a global provider to the oil & gas and process industries. Mr. Myers served as the Senior Vice President of Finance and Chief Financial Officer of Cameron International Corporation from 2003 to 2008. From 1995 to 2003, Mr. Myers served at various times as Senior Vice President and President of a division within Cameron as well as General Counsel and Secretary. Prior to joining Cameron in 1995, Mr. Myers served as Senior Vice President and General Counsel of Baker Hughes Incorporated, and an attorney and partner at the law firm of Fulbright & Jaworski, now known as Norton Rose Fulbright. Mr. Myers currently serves as Chairman of the Board of Directors of HF Sinclair Corporation, and Mr. Myers also serves on the boards of three small private manufacturing companies. Mr. Myers served on the Board of Directors of Seahawk Drilling Company from 2009 until 2011; Frontier Oil Corporation—a predecessor of HF Sinclair Corporation—from 2009 until its 2011 merger with Holly Corporation; HollyFrontier Corporation from 2011 until its merger with HF Sinclair in 2022; Ion Geophysical Corporation from 2001 to 2019; Forum Energy Technologies from 2011 until March 2018; and NCS Multistage from 2017 to 2020. Mr. Myers holds a Bachelor of Science, Industrial Engineering, from Mississippi State University and a J.D. degree from the University of Mississippi.   Mr. Myers has several decades of public company experience, with a particular knowledge of operations, financial management, and legal affairs. Additionally, Mr. Myers has significant experience serving on other public company boards and has served as an adjunct professor at the University of Texas School of Law where he taught a course on mergers and acquisitions.
	WILLIAM J. SANDBROOK
	Age 66   Director   Independent		Committees:   •  Audit   •  Compensation and Human Capital
William J. Sandbrook has served as a Director of the Company since April 2018. Mr. Sandbrook has served as Chairman and Co-CEO of Andretti Acquisition Corp., a special purpose acquisition company formed for the purpose of effecting a business combination, since January 2022. From August 2011 until his retirement in April 2020, Mr. Sandbrook served as President and Chief Executive Officer of U.S. Concrete, Inc., a company specializing in concrete and heavy construction aggregates, and as the Chairman of the Board from May 2018 until April 2020. From June 2008 until August 2011, Mr. Sandbrook was Chief Executive Officer of Oldcastle Inc.’s Products and Distribution Group. From 2006 to June 2008, Mr. Sandbrook was Chief Executive Officer of Oldcastle Architectural Product’s group responsible for Oldcastle’s U.S. and Canadian Operations, as well as CRH plc’s business in South America. From 2003 to 2006, Mr. Sandbrook served as President of Oldcastle Materials West Division. From 1995 to 2002, Mr. Sandbrook served as President and Chief Executive Officer of Tilcon New York, and as Vice President from 1992 to 1995. Prior to 1992, Mr. Sandbrook spent thirteen years in the U.S. Army. In recognition of his efforts at Ground Zero after the September 11th bombing of the World Trade Center, Mr. Sandbrook was named the Rockland County, New York 2002 Business Leader of the Year, the Dominican College 2002 Man of the Year, and the American Red Cross 2003 Man of the Year for Southern New York. In 2017, Mr. Sandbrook was awarded the Lifetime Achievement Award by the New Jersey Concrete and Aggregate Association. In March of 2018, he was awarded the William B. Allen Award from the National Ready Mixed Concrete Association in recognition of his lifetime commitment to the concrete industry. Also in March of 2018, Mr. Sandbrook was inducted into the Pit and Quarry Magazine’s Hall of Fame. From March 2019 through March 2020, Mr. Sandbrook held the position of Chairman of the National Ready Mix Concrete Association. In June, 2023, he was appointed to the board of Knife River Corporation. Mr. Sandbrook is a registered Professional Engineer and holds an MBA from Wharton, a Master of Science in Systems Engineering from the University of Pennsylvania, a Master in Public Policy from the Naval War College, a Master of Arts in International Relations from Salve Regina University, and a Bachelor of Science from the United States Military Academy.   Mr. Sandbrook has over thirty years of operations experience in the building materials and construction industries, including significant experience as a Chief Executive Officer and experience as a public company board member.

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	CONSTANCE E. SKIDMORE
	Age 72   Director   Independent		Committees:   •  Audit   •  Compensation and Human Capital
Constance E. Skidmore has served as a Director of the Company since December 2012. Ms. Skidmore retired from PricewaterhouseCoopers, a public accounting firm, in 2009 after serving for more than two decades as a partner, including a term on its governing board. Ms. Skidmore serves on the Board of Directors and chairs the Audit Committees of Sensata Technologies (NYSE: ST) and Proterra, Inc. (NASDAQ: PTRA) as well as serves on the boards of two other privately-held and non-profit companies: The V Foundation for Cancer Research and Viz Kinect. Ms. Skidmore previously served on the Board of Directors and Audit Committee of Shortel, Inc. (NASDAQ: SHOR) from 2014 until 2017 when it was acquired by Mitel Networks Corporation. Ms. Skidmore is a graduate of Florida State University and earned a Master of Science in Taxation from Golden Gate University.   Ms. Skidmore has more than thirty years of experience in accounting and finance, including in the construction industry, and significant experience and knowledge in talent management and strategic planning.
	VANCE W. TANG
	Age 57   Director   Independent		Committees:   •  Nominating, Governance, and Sustainability
Vance W. Tang has served as a Director of the Company since December 2012. Mr. Tang has been President and Owner of VanTegrity Consulting, a strategy and leadership consulting services and executive coaching provider, since August 2012. Mr. Tang previously owned a wealth management business, VanTegrity Financial, LLC, from February 2012 to December 2016. He served as President and Chief Executive Officer of the U.S. subsidiary of KONE OY, a public company and a leading global provider of elevators and escalators, and Executive Vice President of KONE Corporation from February 2007 until August 2012. In this role, he led the organization through a major transformation around customer focus and profitable growth. Prior to joining KONE, he was Vice President and General Manager at Honeywell Building Control Systems. Previously, he spent over fourteen years at Trane, a supplier of heating, ventilation, and air conditioning systems to both the residential and commercial markets. He serves as the Chairman of the Board of Directors of American Woodmark Corporation (NASDAQ: AMWD) and previously on the Board of Governors of the Center for Creative Leadership. Mr. Tang has a Bachelor of Science degree in Electrical Engineering and an MBA degree from the University of Wisconsin.   Mr. Tang has deep operations experience in the building construction and service industries, including experience as a Chief Executive Officer, and he also has experience serving on other public company boards. Additionally, Mr. Tang is currently serving as our Board Liaison for Cybersecurity, leveraging his CERT Certificate in Cybersecurity Oversight, engineering background, and business leadership experience.
	CINDY L. WALLIS-LAGE
	Age 61   Director   Independent		Committees:   •  Nominating, Governance, and Sustainability
Cindy L. Wallis-Lage has served as a Director of the Company since May 2021. Ms. Wallis-Lage retired from Black & Veatch, an engineering, procurement, consulting, and construction company, on September 30, 2022. At Black & Veatch, she served as Executive Director, Sustainability and Resilience from January 2022 until her retirement. Previously, during her 36 years of experience at Black & Veatch, Ms. Wallis-Lage served in various roles, including President, Water Business from January 2012 to December 2021, Executive Managing Director of Technical Solutions from January 2010 to January 2012, and Chief of Water Technology Group from February 2006 to January 2010. She served on the Black & Veatch Board of Directors from March 2012 through September 2022. She currently serves on the Board of Directors for Veralto and Metiri Group. She serves as an advisory board member for Cambi ASA. Ms. Wallis-Lage earned her bachelor’s degree in Civil Engineering from Kansas State University and her master’s degree in Environmental Health Engineering from the University of Kansas.   Ms. Wallis-Lage has extensive senior executive experience leading strategies, development, and operations of a global business and development of sustainability practices.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE DIRECTORS LISTED ABOVE IN PROPOSAL NUMBER 1.

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Board Qualifications Matrix

The following matrix: (1) summarizes desired qualifications, skills and experience, which we believe are appropriate for consideration as we propose leaders to advance our strategy and provide proper oversight, and (2) illustrates the number of Nominees to whom each qualification applies:

Meetings of the Board and Committees

During the year ended December 31, 2023, the Board held five regular meetings and five special meetings. At each regularly scheduled meeting of the Board, the non-employee directors, each of whom is independent, met separately from management in executive session under the direction of Mr. Myers, the Chair of the Board. Members of the Board are encouraged to attend the Annual Meeting and all members of the Board attended the Annual Meeting in 2023. Additional information regarding the determination of director independence is set forth below under the subsection titled “Independence.” Each director has attended at least 75% of the aggregate number of meetings of the Board and the Board committees of which he or she was or is a member that took place during his or her term of office. 

The Board has several committees. Each of these committees and their members are described below. The Board has adopted a written charter for each of these committees (with the exception of the Executive Committee), which, together with the Company’s corporate Governance Standards and Independence Guidelines, are available: 

ON OUR CORPORATE WEBSITE http://investors.comfortsystemsusa.com under the “Governance” tab		BY WRITING TO Comfort Systems USA, Inc.  Attention: Office of the General Counsel  675 Bering Drive, Suite 400  Houston, Texas 77057

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Audit Committee

PABLO G. MERCADO ★	DARCY G. ANDERSON	RHOMAN J. HARDY	WILLIAM J. SANDBROOK	CONSTANCE E. SKIDMORE

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Compensation and Human Capital Committee 

CONSTANCE E. SKIDMORE ★	DARCY G. ANDERSON	PABLO G. MERCADO	WILLIAM J. SANDBROOK

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Nominating, Governance, and Sustainability Committee 

VANCE W. TANG ★	HERMAN E. BULLS	FRANKLIN MYERS	CINDY L. WALLIS-LAGE

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Executive Committee 

Corporate Governance

The Board believes that the purpose of corporate governance is to maximize stockholder value in a manner consistent with legal requirements and the highest standards of integrity. The Board has adopted and adheres to corporate governance practices that the Board believes promote this purpose, are sound practices, and represent best practices, which we refer to as the Company’s “Governance Standards.” The Board continually reviews these governance practices, Delaware law (the state where the Company is incorporated), the rules and listing standards of the NYSE and SEC regulations, and best practices suggested by recognized governance authorities. 

Our corporate governance documents include: 

Code of Conduct

The Company adopted a Compliance Policy in 1997, the year the Company was founded. That policy, with subsequent amendments discussed, approved, and adopted by the Board, including an amendment to change the title of the policy to our “Code of Conduct,” remains in effect and applies to the Company’s directors, officers, and employees who are subject to disciplinary action, including termination, for violations of the code. The code forms the basis of the Company’s ethics and compliance program and covers a wide range of areas. Many Company policies are summarized in the Code of Conduct, including conflict of interest, insider trading, confidentiality, human rights, and compliance with all laws and regulations applicable to the conduct of the Company’s business. The Code of Conduct is regularly reinforced to the Company’s employees and management through periodic ethics, equal opportunity employment, and anti-corruption trainings. Any amendments to the Code of Conduct or the grant of a waiver from a provision of the policy requiring disclosure under applicable SEC rules will be disclosed to the public. The Code of Conduct is posted, in both English and Spanish, under the “Governance” tab of the Company’s website at http://investors.comfortsystemsusa.com and is also available upon request to Comfort Systems USA, Inc., Office of the General Counsel, 675 Bering Drive, Suite 400, Houston, Texas 77057.

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Independence 

The Board has adopted Independence Guidelines to assist the Board in making independence determinations relating to members of the Board. The criteria are consistent with the NYSE listing standards regarding director independence. For a director to be considered independent, the Board must determine that the director does not have a material relationship, directly or indirectly, with the Company. The Independence Guidelines are published on our website, http://investors.comfortsystemsusa.com under the “Governance” tab, and are also available by written request to Comfort Systems USA, Inc., Office of the General Counsel, 675 Bering Drive, Suite 400, Houston, TX 77057.

The Board has considered the independence of its members in light of the Independence Guidelines and the rules and regulations under the Exchange Act and NYSE, including each director’s affiliations and relationships, and has determined that Mses. Skidmore and Wallis-Lage and Messrs. Anderson, Bulls, Hardy, Mercado, Myers, Sandbrook, and Tang, who together constitute a majority of the Board, qualify as independent directors of the Company. 

Retirement Policy 

Under the Company’s Governance Standards, a director shall not be a candidate for reelection after his or her seventy-fifth birthday. In December 2023, this mandatory retirement age for directors was increased from 72 to 75 following the recommendation of the Nominating, Governance, and Sustainability Committee. The retirement age increase was implemented based on an analysis of several factors, including the committee’s review of potential succession plans and consideration of the relevant skills and expertise of the Board as a whole.

The Company’s Governance Standards, and other governance documents, are available: 

ON OUR CORPORATE WEBSITE http://investors.comfortsystemsusa.com  under the “Governance” tab		BY WRITING TO Comfort Systems USA, Inc. Attention: Office of the General Counsel 675 Bering Drive, Suite 400 Houston, Texas 77057

Director Nomination by Stockholders 

The Board will consider director candidates recommended by stockholders for inclusion on the slate of directors nominated by the Board. Any stockholder may submit a candidate or candidates for consideration in conformity with the Bylaws and as set forth hereafter under the caption “Stockholder Proposals for 2025 Annual Meeting.” Stockholders desiring to recommend a candidate must submit the recommendation to the Nominating, Governance, and Sustainability Committee c/o the Corporate Secretary, Comfort Systems USA, Inc., 675 Bering Drive, Suite 400, Houston, Texas 77057. If a nominating stockholder is not a record holder, the stockholder must provide the same evidence of eligibility as set forth in Exchange Act Rule 14a-8(b)(2). 

At the time the nominating stockholder submits the recommendation, the candidate must submit all personal information that the Company would be required to disclose in a proxy statement in accordance with Exchange Act rules. In addition, at that time the candidate must: 

In addition to satisfying the foregoing requirements, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must deliver notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 18, 2025.

The Nominating, Governance, and Sustainability Committee will evaluate any candidate recommended by a stockholder to determine whether he or she is highly qualified. The committee evaluates candidates recommended by stockholders in the same way it evaluates candidates proposed from other sources. In selecting nominees, particular consideration is given to those individuals who have substantial achievement in their personal and professional pursuits and whose talents, experience, and integrity would be expected to contribute to the best interests of the Company and to long-term stockholder value. In evaluating candidates, the committee considers various qualities and skills that it believes will benefit the Board and the stockholders, including, without limitation, general management experience, specialization in the Company’s principal business activities or finance, significant experience in issues encountered by public companies, and contribution to the diversity of the Board. 

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Stockholder Engagement 

Throughout the year, we meet regularly with investors and actively seek their input on topics related to our performance and our compensation and governance policies, as well as a wide variety of other topics on which they may have feedback, so that we may address any questions or concerns of our stockholders. During 2023, executive officers held more than 160 meetings, including those held during the course of eight investor conferences and six roadshows. This process is led by Brian Lane, President, Chief Executive Officer and member of the Board, and William George, Executive Vice President and Chief Financial Officer. In addition, as appropriate, we work to clarify and expand our disclosures as we prepare our next proxy statement based on such discussions. We value our stockholders’ input and welcome feedback through our ongoing engagement practices. 

Communications With the Board 

Stockholders and other interested parties may communicate directly with the Board by writing to Comfort Systems USA, Inc., Board of Directors, 675 Bering Drive, Suite 400, Houston, Texas 77057. The Chair of the Board will review these communications and will determine appropriate steps to address them. A stockholder wishing to communicate directly with the non-employee members of the Board may address the communication to “Non-Employee Directors, c/o Board of Directors” at the address listed above. These communications will be handled by the Chair of the Board, who is currently designated to preside at meetings of non-employee directors. Finally, communications can be sent directly to individual directors by addressing letters to their individual name, c/o the Board of Directors, at the address listed above. All communications received by the Company are sent directly to the Board or appropriate director. 

Board Leadership Structure and Self-Evaluation Process 

The Board does not have a formal policy regarding whether the position of Chair of the Board may be filled by the Company’s Chief Executive Officer. Instead, the Board has adopted a fluid approach to the Board’s leadership structure that allows for variations depending on the circumstances and changing needs of the Company over time.

Mr. Myers has served as a director since 2005 and has served as the Company’s Chair of the Board since May 2014. The Board has determined that Mr. Myers meets the independence requirements of the NYSE listing standards, the Board’s Independence Guidelines, and the rules and regulations under the Exchange Act. The Board has carefully considered its leadership structure and determined that currently it is in the best interests of the Company and its stockholders for the roles of Chair of the Board and Chief Executive Officer to be filled by different individuals. This structure allows the Chief Executive Officer to focus on the Company’s day-to-day operations. 

Since the Company has an independent, non-executive Chair of the Board, the Company has determined that the role of a Lead Director is not currently necessary. The Board may appoint a Lead Director to coordinate the activities of the independent directors in the future at its discretion. 

Pursuant to the Board’s policy, the Board conducts an annual self-evaluation process as follows: (i) each director evaluates the Board as a whole; (ii) each member of the Audit Committee, the Compensation and Human Capital Committee, and the Nominating, Governance, and Sustainability Committee evaluates the respective committee(s) on which he or she serves; and (iii) each director prepares an individual performance-related self-evaluation of himself or herself as well as other individual members of the Board. In connection with this annual self-evaluation, the Board considers whether the current leadership structure continues to be appropriate for the Company. The Board believes that directors should be responsive to the Company’s evolving circumstances and objectives, and that the Board’s leadership structure should adapt when necessary. 

The Board’s Role in Risk Oversight 

The Company’s full Board is actively involved in overseeing the Company’s risk management process. These activities are aligned with the Company’s strategy. The Audit Committee, Compensation and Human Capital Committee, and Nominating, Governance, and Sustainability Committee consider risks that fall within their respective areas of responsibility. For example, the Nominating, Governance, and Sustainability Committee is formally scheduled to review sustainability matters relevant to the Company and its operations bi-annually, and the Audit Committee reviews the enterprise risk management matrix, which addresses sustainability risks, annually. Further, in recognition of the importance of maintaining the confidence of all Company stakeholders, the Board considers information technology and data security risk, specifically cybersecurity risk, a premier area of focus. The Company’s Chief Information Security Officer (“CISO”) works and reports separately from the Information Technology department, an arrangement meant to allow the CISO to advise the Company most effectively on cybersecurity and related risks, and reports directly to our executive management team. The Board oversees information technology, data security, and cybersecurity risk

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management through regular reports and presentations from the CISO and other management members. Vance W. Tang, Chair of the Nominating, Governance, and Sustainability Committee, serves as the Board Liaison for Cybersecurity and has completed extensive training on cybersecurity risk mitigation. For example, in 2022, Mr. Tang obtained a certification related to his completion of the NACD Cyber Risk Oversight Program. In addition, a group of the Company’s executive officers serve on a committee (the “Risk Committee”) that is directly responsible for the Company’s risk management process. The Company’s President and Chief Executive Officer, a member of the Board, serves on the Risk Committee; however, the Risk Committee is a committee of management, not of the Board. The Risk Committee meets at least annually to define and improve the risk-mapping process and considers any appropriate updates at least quarterly. All members of the Risk Committee attended at least 75% of the quarterly meetings held in 2023. Any risks that are identified through the Company’s compliance and ethics program are included in the Risk Committee’s processes, along with operational, financial, environmental, cybersecurity, social, governance, and strategic risks. The Risk Committee presents comprehensive reports directly to the Board at least annually through the enterprise risk management matrix, which, as explained above, is reviewed by the Audit Committee.

Director Resignation Policy 

Effective March 8, 2017, the Board adopted a Director Resignation Policy to address the situation in which a nominee for director in an uncontested election to the Board receives more votes “withheld” than votes “for” his or her election. The policy provides that any incumbent nominee for director in an uncontested election who receives a greater number of votes affirmatively “withheld” with respect to his or her election than votes “for” such election (a “majority withhold vote”) shall promptly tender his or her resignation to the Chair of the Board following certification of the stockholder vote. The Nominating, Governance, and Sustainability Committee will promptly consider the tendered resignation and recommend to the Board whether to accept or reject the resignation or take other action, such as rejecting the tendered resignation and addressing the apparent underlying causes of the majority withheld vote. In making its recommendation, the committee will consider all relevant factors, including, but not limited to, (i) the underlying reasons why stockholders withheld their votes (if ascertainable), (ii) the length of service and qualifications of the director whose resignation has been tendered, (iii) the director’s contributions to the Board and the Company, (iv) the overall composition of the Board and compliance with applicable laws, regulations, governing documents, and stock exchange listing standards, (v) the availability of other qualified candidates, and (vi) whether accepting the resignation is in the best interests of stockholders and the Company. The Board will act on the committee’s recommendation no later than its first regularly scheduled meeting following certification of the stockholder vote, but in no case later than 120 days following the vote certification. Following the committee’s recommendation and the Board’s decision, the Company will promptly publicly disclose its decision whether to accept or reject such tendered resignation in a periodic or current report filed or furnished in accordance with SEC rules.

Any director who tenders his or her resignation under the Director Resignation Policy will not participate in the committee recommendation or Board consideration of the resignation. However, such director will otherwise remain as an active Board member unless and until the resignation becomes effective. If a majority of the Nominating, Governance, and Sustainability Committee members receive a majority withhold vote at the same election, then the independent directors who did not receive a majority withhold vote will appoint a committee amongst themselves to consider the tendered resignations. If the only directors who did not receive a majority withhold vote in the same election constitute fewer directors than a majority of the Board, then all the independent directors may participate in the Board consideration of the tendered resignations, except that no director will participate in the vote on his or her own resignation. 

While this summary reflects the current terms of the Director Resignation Policy, the Board retains the power to amend and administer the policy as the Board, in its sole discretion, determines is appropriate. The Director Resignation Policy is published under the “Governance” tab on our website, http://investors.comfortsystemsusa.com, and is also available by written request to Comfort Systems USA, Inc., Office of the General Counsel, 675 Bering Drive, Suite 400, Houston, TX 77057. 

Director Compensation for 2023

In 2023, each director who was not an employee of the Company or one of its subsidiaries received, in quarterly installments, an annual cash fee for his or her service as follows: $80,000 for service on the Board; an additional $30,000 for service as the chair of the Audit Committee; an additional $20,000 for service as the chair of the Compensation and Human Capital Committee or the Nominating, Governance, and Sustainability Committee; and an additional $100,000 for service as the chair of the Board.  Directors are reimbursed for expenses incurred in connection with attending meetings.

Each non-employee director who continues in office or is elected at an annual stockholder meeting receives an award of fully-vested shares of Common Stock having a fair market value on the grant date equal to approximately $160,000. Further, in 2023, the Nominating, Governance, and Sustainability Committee determined that each non-employee director who is initially elected or appointed to serve on the Board other than at any annual stockholder meeting will be granted a prorated number of fully vested shares of Common Stock based on the number of days between the effective date of appointment and the next annual stockholders’ meeting. In connection with Mr. Hardy’s appointment in October 2023, Mr. Hardy was granted fully-vested shares of

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Common Stock having a fair market value on the grant date of $99,408. Pursuant to the Company’s 2017 Omnibus Incentive Plan, the maximum grant date fair value of awards granted to an individual non-employee director in any calendar year may not exceed $400,000. The Board has adopted stock ownership requirements, pursuant to which each non-employee director must own shares of Common Stock (or share equivalents) having a value equal to ten times the director’s annual cash fees for service on the Board (excluding any additional fees for service as the chair of the Board or any committee of the Board and any other compensation or expense reimbursement received by the director) within five years of being elected or appointed to the Board. The Nominating, Governance, and Sustainability Committee evaluates each director’s stock ownership level on an annual basis. At the time of such evaluation, the value of the stock owned by each director is determined by reference to the higher of: (i) the original share (or share equivalent) purchase or issuance price, and (ii) the value of the share (or share equivalent) price at the time of determining compliance with these stock ownership requirements. The Nominating, Governance, and Sustainability Committee may modify these stock ownership requirements in its reasonable discretion and is authorized to make exceptions to these stock ownership requirements when special circumstances arise. All non-employee directors are currently in compliance with these ownership requirements. 

Directors who are employees of the Company or one of its subsidiaries receive no additional compensation for serving as directors. The following table discloses the compensation earned by, or paid or awarded to, as the case may be, each of the Company’s non-employee directors for 2023. 

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PROPOSAL 2
Ratification of the Selection of Independent Auditors

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE SELECTION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT AUDITORS.

The Audit Committee has re-appointed Deloitte & Touche LLP as the Company’s independent auditors for the year ending December 31, 2024. Deloitte & Touche LLP was the Company’s independent auditor for the year ended December 31, 2023.

We expect that representatives of Deloitte & Touche LLP will be present at the Annual Meeting to respond to appropriate questions, and they will have the opportunity to make a statement if they desire.

The affirmative vote of holders of a majority of the shares of Common Stock voted at the Annual Meeting is required to ratify the appointment of Deloitte & Touche LLP as the Company’s independent auditors for 2024. If the stockholders fail to ratify the appointment, the Audit Committee will reconsider its selection, but it still may decide to retain Deloitte & Touche LLP. Even if the appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent accounting firm at any time during the year if the committee determines that such a change would be in the best interests of the Company and its stockholders.

Relationship with Independent Auditors

The Audit Committee has selected Deloitte & Touche LLP as independent auditors for the Company for the year ending December 31, 2024.

Deloitte & Touche LLP acted as independent auditors for the Company for the year ended December 31, 2023. Fees disbursed by the Company and its subsidiaries for professional services rendered by Deloitte & Touche LLP during 2023 and 2022 were as follows:

The amount of audit fees for 2023 is based on a fees estimate determined with input from Deloitte & Touche LLP for audit services provided to us in connection with the audit of our 2023 financial statements. The final audit fees for those services may be more or less than the amount reflected on this table.

The Audit Committee has established pre-approval policies and procedures applicable to all services provided by the Company’s independent auditors to the Company, pursuant to which the committee reviews for approval each service expected to be provided by the independent auditors, and is provided with sufficiently detailed information so that it can make well-reasoned assessments of the impact of the services on the independence of the auditors. In 2023, all the fees paid to the Company’s auditors were approved by the Audit Committee. Pre-approvals include pre-approved cost levels or budgeted amounts (or a range of cost levels or budgeted amounts). Any proposed service that would exceed pre-approved cost levels or budgeted amounts also requires pre-approval. Substantive changes in terms, conditions, or fees resulting from changes in the scope, structure or other items regarding pre-approved services will also be pre-approved if necessary. The pre-approvals may include services in categories of audit services (including consultation to support such audits), audit-related services (items reasonably related to the performance of the audit or review of the financial statements), tax services (tax compliance, tax planning, and tax advice), and other services (services permissible under the SEC’s auditor independence rules, typically routine and recurring type services that would not impair the independence of the auditor).

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NUMBER 2.

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PROPOSAL 3
Advisory Vote to Approve the Compensation of the Named Executive Officers

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

The Board recognizes that executive compensation is an important matter for our stockholders. As described in detail in the “Compensation Discussion and Analysis” (the “CD&A”) section elsewhere in this proxy statement, the Compensation and Human Capital Committee is tasked with the implementation of our executive compensation philosophy, and the core of that philosophy has been and continues to be to pay the Company’s executive officers based on Company performance. In particular, the Compensation and Human Capital Committee strives to attract, retain, and motivate exceptional executive officers, to reward past performance as measured against pre-established goals, to provide incentives for future performance, and to align executive officers’ long-term interests with the interests of our stockholders. To do so, the Compensation and Human Capital Committee uses a combination of short- and long-term incentive compensation to reward near-term performance and to encourage our executive officers’ commitment to our long-term strategic business goals. It is the intention of the Compensation and Human Capital Committee that our executive officers be compensated competitively and consistently with our business goals and strategy, sound corporate governance principles, and stockholder interests and concerns. As discussed further in the CD&A, the Compensation and Human Capital Committee retains an independent compensation consultant and reviews survey and peer group data to ensure that compensation for key positions is properly aligned with market practices. The Company’s commitment to aligning pay with performance is evidenced by the compensation paid to or earned by the Company’s Named Executive Officers.

As described in the CD&A, we believe that our executive compensation program is effective, appropriate, and strongly aligned with the long-term interests of our stockholders and that the compensation provided to the Named Executive Officers (including potential payouts upon a termination of employment or change in control) is reasonable and not excessive. As you consider this Proposal Number 3, we urge you to read the CD&A section of this proxy statement for additional details on our executive compensation program, including more detailed information about our compensation philosophy and objectives and the compensation paid or awarded to the Named Executive Officers, and to review the tabular disclosures regarding Named Executive Officer compensation together with the accompanying narrative disclosures in the “Summary of Executive Compensation” section of this proxy statement.

Congress has enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), which requires a non-binding advisory “Say on Pay” vote and gives our stockholders the opportunity to express their views on the compensation of the Named Executive Officers. We value the opportunity to have our stockholders provide us with such a vote on executive compensation at the Annual Meeting.

As an advisory vote and as prescribed by Dodd-Frank, Proposal Number 3 is not binding on the Board or the Compensation and Human Capital Committee, will not overrule any decisions made by the Board or the Compensation and Human Capital Committee, and will not require the Board or the Compensation and Human Capital Committee to take any action. Although the vote is non-binding, the Board and the Compensation and Human Capital Committee value the opinions of our stockholders and will consider the outcome of the vote when making future executive compensation decisions. In particular, if there are a significant number of votes against the Named Executive Officers’ compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns, and the Board and the Compensation and Human Capital Committee will evaluate whether any actions are necessary to address those concerns. Unless the Board modifies its policy on the frequency of “Say on Pay” votes, the next “Say on Pay” vote will be held in 2025. The next advisory vote on the frequency for “Say-on-Pay” stockholder votes will be held no later than at the Company’s 2029 Annual Meeting.

The Board of Directors is asking that stockholders cast a non-binding, advisory vote FOR the following resolution:

“RESOLVED, that the compensation paid or awarded to the Company’s Named Executive Officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative discussion, is hereby APPROVED on an advisory basis.”

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NUMBER 3.

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Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information about the beneficial ownership of shares of Common Stock as of March 1, 2024: (i) individually by the Chief Executive Officer, each of the other Named Executive Officers, and current directors and nominees for director of the Company, (ii) by all executive officers and directors of the Company as a group, and (iii) by each person known to the Company as reported on schedules filed with the SEC to be the beneficial owner of more than 5% of the outstanding Common Stock of the Company.

Except as noted below, each of the persons listed has sole investment and voting power with respect to the shares indicated.

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Compensation Discussion and Analysis

2023 Named Executive Officers

The Board has delegated to the Compensation and Human Capital Committee (referred to in this CD&A simply as the “Committee”) the duty of designing and overseeing the Company’s executive compensation program. The Committee is comprised entirely of independent (pursuant to NYSE and SEC rules, and the Company’s own Independence Guidelines) members of the Board.

The Company’s executive compensation program is designed to:

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2023 Performance Highlights

To put the Company’s 2023 compensation decisions in context, the following summarizes the Company’s key financial and business results for 2023:

We finished 2023 with increased revenue (revenue of $5.21 billion in 2023, as compared to revenue of $4.14 billion in 2022), record earnings (net income of $323.4 million, or $9.01 per diluted share, in 2023, as compared to net income of $245.9 million, or $6.82 per diluted share, in 2022), increased cash flow (operating cash flow of $639.6 million in 2023, as compared to $301.5 million in 2022), and a notable surge of backlog (backlog was $5.16 billion as of December 31, 2023, as compared to $4.29 billion as of September 30, 2023 and $4.06 billion as of December 31, 2022). As a result of this performance, the Named Executive Officers each received 200.0% of their respective earnings-per-share (“EPS”) target awards and 200.0% of their respective free cash flow (“FCF”) target awards under the corporate financial incentive portion of the Company’s 2023 annual incentive plan, as further described below.

Compensation and Governance Practices

Below we highlight certain of our practices that we consider good governance features of our executive compensation program.

COMPENSATION PRACTICES
	A majority of each executive officer’s compensation is at-risk (i.e., variable and not fixed).*			Executive officers and directors are subject to stock ownership requirements.
	A majority of each executive officer’s compensation is tied to the Company’s financial performance and/or stock price.*			The Company has adopted a compensation clawback policy and an anti-hedging/pledging policy that apply to all executive officers.
	50% of each executive officer’s annual equity award targets are subject to the Company achieving specific performance goals over a 3-year time horizon.*			The Committee and management routinely engage independent third parties, including an independent compensation consultant and the Company’s stockholders, to advise and provide feedback on executive compensation matters.

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Consideration of Stockholder Advisory Vote

In designing the Company’s overall executive compensation program, the Committee also values and considers stockholder input. While evaluating the Company’s executive compensation program, the Committee considered the stockholder advisory vote on the compensation paid to the Company’s named executive officers that was taken in 2023.

The Committee viewed the outcome of that advisory vote—approval by more than 97% of the shares voted—as indicating that the Company’s stockholders support the Company’s overall approach to executive compensation and made no changes to the structure of our executive compensation program as a direct result of the vote.

Compensation Philosophy and Objectives

The Committee evaluates each element of the overall executive compensation program to ensure that it supports the Committee’s objectives of:

OUR COMPENSATION OBJECTIVES
	providing competitive total compensation consistent with job scope, experience, and related skills;			avoiding unnecessary and imprudent risks; and
	linking bonus opportunities to the Company’s performance;			attracting and motivating talented executive officers and minimizing turnover of senior-level Company employees, which contributes to the stability and continuity of senior leadership.
	granting equity compensation at competitive levels, a significant portion of which is performance-based;
Against that backdrop, the Company’s executive compensation program is designed to:
OUR COMPENSATION PROGRAM IS DESIGNED TO
	pay competitive levels of compensation;			align the interests of the Company’s executive officers with the long-term interests of the Company’s stockholders; and
	link executive pay to Company performance by making a significant portion of pay variable and not fixed;			reward long-term results.

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To achieve these objectives, in addition to the objectives referenced in the “Elements of Compensation” subsection below, the Committee implements a “pay-for-performance” philosophy using the guiding principles that:

Role of the Chief Executive Officer

The Company’s Chief Executive Officer makes annual recommendations to the Committee regarding the compensation arrangements of the Company’s executive officers (except that he makes no recommendation with respect to his own compensation arrangements). The Committee considers the recommendations during its regularly-scheduled meetings, and may choose to adopt the recommendations, in whole or in part, at the Committee’s sole discretion. The Committee is responsible for making all decisions regarding executive compensation.

Independent Compensation Consultant; Use of Market Data

In 2023, the Committee retained a compensation consultant, Compensation Advisory Partners, to advise the Committee on the design and administration of the Company’s short-term and long-term incentive compensation programs and to provide a comprehensive analysis of executive compensation survey data and market trends. The Committee reviewed the services provided by Compensation Advisory Partners and believes that Compensation Advisory Partners was independent in providing executive compensation consulting services to the Committee. In making this determination, the Committee noted that during 2023:

The Committee monitors the independence of its outside consultants on a periodic basis.

During 2023, the Committee consulted with Compensation Advisory Partners regarding the Company’s short-term and long-term incentive compensation programs, as well as market trends and executive compensation peer group and other survey data, as described below. Compensation Advisory Partners has provided the Committee with detailed analysis and recommendations on the structure of the Company’s short-term and long-term incentive compensation programs in terms of design, metrics, and payout opportunities, and the Committee intends to continue to periodically refine the Company’s short-term and long-term incentive compensation programs based on a number of factors, including its compensation consultant’s recommendations, market trends in the Company’s industry, and general economic conditions.

Peer Group and the Benchmarking Process

The Committee reviews executive compensation levels annually using peer group and other survey data provided by its compensation consultant. The Committee does not attempt to set executive compensation at a pre-defined percentile of the market, but the Committee does use comparative data in an effort to be better informed in its executive compensation-related decisions.

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The Committee believes that, due to the Company’s unique position in its industry, there are no directly comparable companies in the broader market for the purpose of determining appropriate compensation comparators for the compensation of its executive officers and, for this reason, does not depend solely on a “peer group” to determine executive officer compensation. It does, however, review executive compensation against compensation paid to executive officers holding similar positions in certain select “peer group” companies. For purposes of making 2023 executive compensation decisions, this peer group was as follows:

In determining the appropriateness of the foregoing companies, the Committee, in consultation with Compensation Advisory Partners, considered factors such as historical revenue, the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA), and total shareholder return, in addition to the primary industry, enterprise value, and market capitalization of each company. In November 2023, this peer group was further refined by the Committee, in consultation with Compensation Advisory Partners and considering these same factors, to add Oshkosh Corporation and MDU Resources Group, Inc., as both companies were identified as peers by Institutional Shareholder Services (ISS), and the Committee determined that both companies had comparable revenue and market capitalization.

The Committee uses a combination of the peer group and survey data from certain other industry companies to provide a general market review of the reasonableness of total compensation levels for the Company’s executive officers; however, the Committee does not use the peer group or survey data for any other purpose or otherwise formally benchmark the compensation of the Company’s executive officers.

Use of Tally Sheets

The Committee routinely uses tally sheets to assist it in analyzing executive officers’ total compensation. Tally sheets provide the Committee with information about the following components of compensation paid or granted over the preceding three-year period: cash compensation, including salary and annual incentive compensation, and long-term incentive compensation. These tally sheets also provide an estimate of amounts payable in the event of a voluntary or involuntary termination of employment, including by reason of death, disability, or a change in control resulting in termination of employment. The Committee also reviews information regarding long-term incentive awards, including statistics on share usage, analysis of current “in-the-money” values of outstanding option grants and current values of time-vesting restricted stock unit (“RSU”) and performance-vesting restricted stock unit (“PSU”) awards, and a summary of current and past performance results.

Chief Executive Officer Compensation

Each year, the Committee meets in executive session (i.e., separately from management) to evaluate the Chief Executive Officer’s performance and determine his total compensation. The Committee conducts an assessment of the Chief Executive Officer’s performance as well as an assessment of other relevant factors, such as the Company’s performance, individual tenure, and position tenure, and sets the Chief Executive Officer’s compensation for each year based on the Committee’s assessment of these factors. Although the Committee does not attempt to target the Chief Executive Officer’s compensation at any specific percentile of compensation at peer group companies, the Committee does use peer group and other survey data as context in reviewing the Chief Executive Officer’s overall compensation levels and approving compensation actions, as described above. Based on this data, the Committee believes that the Chief Executive Officer’s compensation was below the market median in 2023.

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Elements of Compensation

The Company’s executive compensation program consists of four basic elements:

	COMPENSATION ELEMENT	OBJECTIVE		KEY CHARACTERISTICS
	BASE SALARY	•  Provide a fixed level of cash compensation for performing day-to-day functions •  Attract and retain strong executive talent		•  Levels are evaluated annually by the Committee •  For 2023, base salaries were established based on a number of factors, including each executive’s performance and time in his or her role, advice from the Committee’s independent compensation consultant, and analysis of peer group and survey data and economic conditions
	ANNUAL INCENTIVE PLAN	•  Reward annual financial and individual performance		•  Target awards are established as a percentage of base salary •  The majority of each award’s target opportunity is based on the achievement of objective, pre-established goals related to the Company’s EPS and FCF performance
	LONG-TERM INCENTIVE AWARDS	•  Reward long-term Company performance •  Encourage focus on growing stockholder value •  Align management’s interests with stockholders’ interests •  Encourage retention of key management employees, stability, and continuity of leadership		•  Awards are provided through a combination of time-vesting RSUs and dollar-denominated PSUs •  Dollar-denominated PSUs are earned based on the achievement of objective, pre-established performance goals, including total shareholder return relative to certain comparable companies and the Company’s EPS performance •  RSUs are subject to a three-year vesting schedule;  dollar-denominated PSUs that are earned based on performance cliff vest following the end of a three-year performance period
	BENEFITS	•  Attract and retain strong executive talent •  Provide basic financial stability		•  Participation in health, welfare, and retirement benefit plans, generally on the same terms as all other full-time employees of the Company

While base salaries, together with health, welfare, and retirement benefits, are designed to provide basic compensation and financial stability, the purpose of annual incentive compensation is primarily to encourage the Company’s executive officers to focus on the execution of the Company’s business strategy and plan for the current year. Long-term incentives, granted in the form of RSUs and PSUs, are designed to:

Unlike annual incentive compensation, which, as discussed below, tends to focus on more current Company and individual performance, long-term incentives focus on sustained results and growing stockholder value. 

Relative Size of Major Compensation Elements

The combination of base salary, annual incentive awards, and long-term incentive awards is referred to as the “total direct compensation.” In setting executive officer compensation, the Committee considers the aggregate compensation payable to the executive, assuming target performance is achieved, as well as the weighting of each compensation component. The Committee seeks to achieve the appropriate balance between short- and long-term cash compensation and incentives for the achievement of both annual and long-term financial and non-financial objectives.

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Allocation Among Compensation Elements

For 2023, the portion of the Chief Executive Officer’s and the average of each of the other Named Executive Officers’ total target direct compensation (for annual incentive awards, assuming target performance was achieved, and, for annual equity awards, based on grant date values at target) that was variable and at-risk is illustrated as follows:

Total Target Compensation Mix

“Average of Other Named Executive Officers” is based on an average of the respective compensation of Messrs. George and McKenna and Mses. Shaeff and Howell and does not include the special one-time grant of RSUs received by Mr. George in November 2023, as described in greater detail below. 

Because the value that a Named Executive Officer may receive with respect to RSUs will depend on the performance of the Company’s Common Stock, and therefore is variable, we have included these awards as an element of “Variable Pay” in the charts above.

Base Salary 

The Committee determines base salary for our executive officers after considering several factors, including the executive’s individual experience, performance, and individual skills. Only after weighing these factors does the Committee consider peer group and/or survey data. The Committee uses executive officers’ performance assessments, Company performance, peer group and other survey data, as described above, and its own analysis of the executive officer’s individual performance to determine each executive’s base salary at least annually. Following its review of peer group and market data and the other factors described above, and taking into account the Company’s strong performance, on December 6, 2022, the Committee approved an increase in each Named Executive Officer’s base salary as set forth in the table below, effective January 1, 2023. The Committee believes that these increases were appropriate to reward the Named Executive Officers and bring their base salaries more in line with the market. 

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Annual Incentive Plan

The Named Executive Officers are eligible to participate in a cash-based annual incentive plan and receive incentive bonuses based on actual performance against key business and individual goals.

The annual incentive plan consists of two distinct components: a corporate financial performance component and an individual performance component. In 2023, consistent with previous years, the corporate financial performance component of the annual incentive plan rewarded the achievement of EPS and FCF goals (together, the “Corporate Financial Incentive”). The Committee believes that EPS remains an important metric for the Company because it encourages a focus on profitability. The Committee continued the use of FCF as a metric under the annual incentive plan because it incentivizes management’s focus on increasing the Company’s cash flow. The second, smaller, component of the annual incentive plan rewarded the achievement of specified individual performance goals (the “Individual Performance Incentive”).

Each year, the Committee determines the threshold, target, and maximum incentive opportunities for the Company’s executive officers, as a percentage of the executive’s base salary. To determine these base salary percentages for each Named Executive Officer for 2023, in addition to historical and projected Company financial performance, the Committee considered the Named Executive Officer’s historical annual incentive levels and the degree to which a Named Executive Officer’s efforts and job function were expected to influence and contribute to the Company’s financial performance. After assigning threshold, target, and maximum base salary percentages for each Named Executive Officer, the Committee then used peer group and other survey data, as described above, to assess the reasonableness of such assigned levels. Target annual incentive opportunities for the Named Executive Officers for 2023 are summarized in the table below, which were unchanged as compared to 2022 targets:

For the Corporate Financial Incentive, annual incentive opportunities were allocated 70% to the EPS portion and 30% to the FCF portion. For each metric, each Named Executive Officer had a threshold opportunity of 40% of his or her target annual incentive opportunity and a maximum annual incentive opportunity of 200% of his or her target annual incentive opportunity.

Corporate Financial Incentive Criteria 

At the beginning of each year, the Committee sets a threshold, target, and maximum performance level for each corporate performance goal for purposes of the Corporate Financial Incentive component of the annual incentive plan. For each of the Named Executive Officers for 2023, consistent with prior years, the EPS portion of the Corporate Financial Incentive represented 70% of the total Corporate Financial Incentive opportunity, and the FCF portion of the Corporate Financial Incentive represented 30% of the total Corporate Financial Incentive opportunity. If neither the EPS nor FCF thresholds were met, then no portion of the Corporate Financial Incentive would be paid. If only one of the EPS or FCF thresholds were met, then only that portion of the Corporate Financial Incentive would be paid.

In setting the EPS and FCF threshold, target, and maximum performance levels, the Committee reviews management’s recommendations and then considers the Company’s historical financial performance as well as projections for the industry and industry historical financial performance and projections. The Committee sets EPS and FCF at levels that it considers aggressive but attainable with the intention that the Named Executive Officers will be encouraged to strive for continued improvement in Company performance, ultimately benefiting the Company’s stockholders, and to continue those efforts even after the EPS and/or FCF threshold performance levels have been achieved. The Committee believes that the added value that results from the Company’s achievement of EPS and/or FCF goals above the threshold performance levels to the Company and its stockholders is sufficient to justify the proportionate increases in amounts paid to the Named Executive Officers for achievement above threshold performance levels.

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The threshold, target, and maximum performance levels for each of the corporate performance goals for 2023 annual incentives were as set forth in the table below. For performance between threshold, target, and maximum performance levels, the amount that is earned is determined on a straight-line basis. 

For purposes of the annual incentive plan and consistent with previous years, (i) EPS was calculated from the Company’s audited financial statements for the year ended December 31, 2023 in accordance with U.S. generally accepted accounting principles, except that it did not take into account: (A) goodwill impairment; (B) write-off of debt costs; (C) restructuring charges; (D) any cumulative effect of a change in accounting principles; or (E) any other unusual or non-recurring items as determined by the Committee; and (ii) FCF was calculated by excluding: (A) certain unusual items, as determined by the Committee; and (B) certain items related to acquisitions or sales of businesses, including less customary capital expenditures plus the proceeds from asset sales. FCF is defined as cash flow from operating activities less customary capital expenditures, plus the proceeds from asset sales. 

In 2023, the Committee adjusted EPS and FCF for purposes of determining levels of achievement under the annual incentive plans as follows. First, the Committee excluded positive effects related to research and development tax credit amounts attributable to prior periods in calculating EPS, as these were unforeseeable when the Committee defined threshold, target, and maximum performance levels. Similarly, the Committee determined that it was appropriate to also exclude the positive effect of a conforming adjustment related to a tax law change pursuant to the Tax Cuts and Jobs Act of 2017. The Committee also reduced the FCF attainment calculation in 2023 related to the turnaround effect of the payments that were excluded from the 2022 FCF calculation. For 2023, all of these adjustments had the effect of reducing actual EPS and FCF achievement for purposes of the annual incentive plan. For a further discussion of how we calculate EPS and FCF, see the “Liquidity and Capital Resources” section and Note 14 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023. 

The Company’s EPS and FCF for calculating incentive compensation achievement levels for 2023 were $8.61 and $512.7 million, respectively. The amounts earned by each of the Named Executive Officers in respect of the Corporate Financial Incentive under the annual incentive plan for 2023 are set forth in the table below.

2023 CORPORATE FINANCIAL INCENTIVE ACHIEVEMENT LEVELS 

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Individual Performance Incentive

In addition to, and independent from, the Corporate Financial Incentive portion of the annual incentive plan, for 2023 each Named Executive Officer was eligible to receive the Individual Performance Incentive, which is annual incentive compensation based on the executive’s achievement of individual performance goals related to the Company’s business and strategy.

At the beginning of 2023, each Named Executive Officer, including the Chief Executive Officer, identified individual performance goals for the upcoming year. Each Named Executive Officer’s individual performance goals were discussed and identified in consultation with (i) the Chief Executive Officer, in the case of Messrs. George and McKenna and Ms. Howell, (ii) the Chief Financial Officer, in the case of Ms. Shaeff, and (iii) the Committee, in the case of Mr. Lane. These goals varied depending on the roles and responsibilities for each Named Executive Officer. For 2023, specific goals for each Named Executive Officer included:

Executive	2023 Individual Performance Goals
Brian Lane		Advance strategic succession planning initiatives
		Improve Company-wide employee safety measure(1)
		Achieve Company-wide and corporate diversity and inclusion initiative annual goals
William George		Advance strategic acquisition and succession planning initiatives
		Improve Company-wide employee safety measure(1)
		Achieve Company-wide and corporate diversity and inclusion initiative annual goals
Trent McKenna		Accomplish enterprise strategy, professional development, and succession planning goals
		Advance strategic service growth initiatives
		Improve Company-wide employee safety measure(1)
		Achieve Company-wide and corporate diversity and inclusion initiative annual goals
Laura Howell		Accomplish cybersecurity strategy priorities
		Ensure success of additional sustainability initiative priorities
		Improve Company-wide employee safety measure(1)
		Achieve Company-wide and corporate diversity and inclusion initiative annual goals
Julie Shaeff		Complete 2023 target implementations for ERP strategy
		Accomplish certain professional development goals
		Improve Company-wide employee safety measure(1)
		Achieve Company-wide and corporate diversity and inclusion initiative annual goals

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Each of the Named Executive Officers’ individual performance goals for 2023 were quantifiable and were generally composed of four levels of attainment: Minimum (25% attainment), Meets (50% attainment), Exceeds (75% attainment) and Significantly Exceeds (100% attainment). The goals were measured on a scale of 0-200% and were weighted to reflect each goal’s strategic importance. At least 20% of each Named Executive Officer’s Individual Performance Incentive for 2023 was based on a diversity and inclusion component.

The Chief Executive Officer and/or the General Counsel presented a summary evaluation of the level of achievement of these goals for each Named Executive Officer (other than himself or herself) to the Committee following the end of the year. In addition, each Named Executive Officer (other than Mr. Lane) received performance feedback from his or her direct supervisor throughout the year and a formal performance review at the end of the year, at which time the Named Executive Officer and his or her direct supervisor evaluated the Named Executive Officer’s satisfaction of his or her individual performance goals.

In executive session, the Committee reviewed and discussed its evaluation of Mr. Lane’s performance over the past year and the performance summaries for each other Named Executive Officer. The Committee also considered significant individual contributions beyond the pre-established goals and each executive’s overall effectiveness. Based on its evaluation of these factors, the Committee then determined the Named Executive Officer’s individual performance score. For 2023, the individual performance scores and the Individual Performance Incentive for each of the Named Executive Officers are set forth below:

2023 INDIVIDUAL PERFORMANCE INCENTIVE DETERMINATION 

The Committee believes that corporate financial measures such as EPS and FCF, when taken together with an additional component to reflect individual achievement, are appropriate measures for determining annual incentive compensation. This two-part framework provided the Named Executive Officers with incentives to both achieve key Company financial goals and sustain long-term growth for the Company and also maintains the Committee’s flexibility to reward outstanding individual performance.

Long-Term Incentives 

In 2023, LTI grants made to the Named Executive Officers consisted of RSUs and PSUs, the latter of which are denominated in dollar amounts but, once earned, are settled in shares of Common Stock based on the market value of the Common Stock following the end of the applicable performance period. The Committee designs the components and weightings of LTI awards to encourage the achievement of key performance goals and retention and also to balance the performance metrics utilized among the Company’s performance relative to certain comparable companies, the Company’s ongoing profitability, and the performance of the Common Stock. The Committee believes that these awards promote a long-term view and further align the executive officers’ interests with those of our stockholders.

From 2012 through 2018, the Company’s executive officers were generally granted PSUs, RSUs, and stock options on an annual basis. The Committee modified the structure for LTI awards in March 2019 by removing stock options from annual LTI grants and rebalancing the awards so that 50% of the LTI grant was in the form of RSUs and 50% was in the form of PSUs, based on grant date value and, for PSUs, assuming target performance is achieved. This decision was based, in part, on input from its compensation consultant, and was the first significant structural change since the previous LTI structure was adopted in 2012. The Committee believed that removing stock options and allocating more value to the PSU and RSU awards better aligned the Company’s compensation program with peer and broader market practices. The mix provides a balanced approach to long-term retention through the use of RSU awards while still including a heavy emphasis on performance-based awards through the use of PSUs. The Company’s annual LTI grants for the Named Executive Officers in March 2023 followed this 50% RSU and 50% PSU structure. 

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*Based on grant date fair value, assuming target performance. Does not include the one-time RSU grant made to Mr. George in November 2023.

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The Committee believes that LTI compensation should be correlated with salary and short-term incentive compensation. As such, the Committee uses a percentage of each executive officer’s base salary to determine the total dollar amount of the LTI compensation award to be granted to that executive each year, based on grant date values and, for PSUs, assuming target performance is achieved. The Committee determines these percentage levels by analyzing each executive officer’s tenure, responsibilities, and professional experience, recommendations from its compensation consultant based on peer group and other survey data, as described above, and the executive officer’s historical annual LTI compensation levels. For 2023, the following percentage of base salary was used for the Named Executive Officers to determine the grant date value of annual LTI awards: Mr. Lane, 325% of base salary; Mr. George, 170% of base salary; Mr. McKenna, 145% of base salary; Ms. Howell, 100% of base salary; and Ms. Shaeff, 85% of base salary. Following its review of peer group and market data and the other factors described above, and taking into account the Company’s strong performance, on December 6, 2022, the Committee approved an increase in each Named Executive Officer’s annual LTI awards, as a percentage of his or her base salary, as set forth in the table below. The Committee believes that these increases were appropriate to reward the Named Executive Officers, further align their interest with our stockholders, and bring their LTI awards and compensation generally more in line with the market.

Once each executive officer’s total grant date value is determined, the number of RSUs and the value of PSUs is determined. The number of RSUs granted is determined by dividing the total dollar amount of the RSUs to be granted by the closing price of the Company’s stock on the date of grant. PSUs are denominated in dollars.

As an illustration, Mr. Lane’s 2023 award of LTI compensation was calculated as follows:

Total Amount of Award: 325% of base salary of $1,002,000 equals $3,256,500.

RSUs Awarded: 50% of $3,256,500 equals $1,628,250 in value of RSUs. $1,628,250 divided by $141.22 (the closing price of the Common Stock on the date of grant) equals 11,529 RSUs.

PSUs Awarded: 50% of $3,256,500 equals $1,628,250 in value of PSUs (dollar-denominated, assuming target performance).

The table below sets forth the 2023 annual LTI awards for each of the Named Executive Officers:

Further, in November 2023, the Committee approved a one-time additional equity award to Mr. George of 25,000 RSUs, in addition to the awards he received during the 2023 annual compensation cycle described above. The Committee granted this award to Mr. George for retention purposes and to reward his historical contributions to the Company, including his role as a founding member of management and his key role in the development of the Company’s acquisition program. The RSUs granted to Mr. George vest in equal annual installments over three years. This special, one-time RSU grant is not included in the tables above for Mr. George, as it was not part of the 2023 annual LTI awards.

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PSU DESIGN

Upon vesting, PSUs will be settled in shares of Common Stock, with the number of such shares determined by dividing the dollar value of vested PSUs (which may be up to 200% of the original dollar value of such PSUs) by the market value of the Common Stock following the end of the applicable three-year performance period. PSUs are earned based on the level of achievement of the two goals set forth in the table below, both of which are measured on an annual basis over a three-year performance period, and earned PSUs vest in full upon determination of the level of achievement of the performance metrics by the Committee following the end of the applicable three-year performance period, generally subject to continued employment through the end of the three-year performance period.

EPS 

The EPS measure compares the Company’s actual EPS performance against its pre-established EPS performance goals over a three-year performance period. For this purpose, EPS is determined and calculated as described under “Annual Incentive Plan” above. For each year in the performance period, the Company’s actual EPS performance is compared against these EPS goals and expressed as a percentage. The EPS percentages for each of the three years in the performance period are then averaged together to determine the final level of EPS achievement upon which the payout, if any, will be earned.

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Relative Total Shareholder Return (“TSR”)

The relative TSR measure compares the Company’s TSR to the TSR of a specified group of comparable companies, and payouts are determined by the Company’s rank relative to others in the group. For each year in the three-year performance period, TSR is calculated by determining the difference between the average closing price of a company’s common stock during the first 30 consecutive days of the year and the last 30 consecutive days of the year. The calculation assumes that dividends are reinvested in additional shares. The Company’s TSR is then compared against the TSR for other companies in the group and assigned a percentile ranking. The Company’s TSR percentile ranking for each of the three years in the performance period are then averaged together to determine the final percentile ranking upon which the payout, if any, will be earned.

The following chart shows the range of potential settlement of the PSUs based on the two performance measures, as a percentage of the target amount. The number of PSUs that may be earned ranges from 0% to 200% of the target award amount.

PSU AWARDS WITH PERFORMANCE PERIOD ENDING IN 2023

PSU awards granted in 2021 with a 2021-2023 performance period were settled in early 2024. The following table shows the EPS and TSR levels achieved over such awards’ three-year performance period and the payout factor for these awards.

RULE OF 75 

The “Rule of 75” provides that if an executive officer retires from the Company at a time when the sum of his or her age and his or her years of service at the Company is greater than or equal to 75, then upon the executive’s retirement, the executive will generally have been deemed to have satisfied the continuous employment requirement for any equity award to vest (unless the award provides otherwise). Pursuant to the Rule of 75, all performance-based equity awards will continue to be earned only if the applicable performance measures are satisfied and only up to a maximum of target value, but the requirement that the executive be employed by the Company at the time of vesting based on performance will be deemed to be satisfied. As of December 31, 2023, Messrs. Lane and George and Ms. Shaeff satisfied the Rule of 75.

Health and Retirement Benefits 

The Company’s health and retirement plans include medical, dental, life, disability and accidental death and dismemberment coverage, and eligibility to participate in the Company’s 401(k) retirement plan. The Company’s benefit programs are designed to be competitive with those of other similarly-sized and -situated companies. The plans offered to the Company’s executive officers are broad-based plans available to all full-time employees. Under the Company’s 401(k) retirement plan, the Company matches an employee’s pre-tax contributions to the plan at a rate of 50% of up to 5% of an employee’s eligible pay or up to the maximum allowed contribution pursuant to the Internal Revenue Code of 1986, as amended (the “Code”). 

Perquisites 

The Company generally does not provide perquisites to its executive officers that are not provided to other employees. However, the Company does provide increased levels of disability and life insurance coverage that are only available to executive officers of the Company. The Company pays these increased premiums on behalf of the executive officers. 

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Change in Control and Severance Benefits

The Named Executive Officers and other members of senior management serve as at-will employees of the Company without any guaranteed period of employment. However, the Committee believes that an executive severance policy paired with change in control agreements provide appropriate protections to attract and retain qualified and talented individuals to serve as the Company’s executive officers, permit the Company’s executive officers to focus fully on improving the Company’s operations and long-term success, and protect stockholder value by providing continuity of management during any transition period. The severance and change in control benefits are intended to be set at market-competitive levels and help ensure that the Company can attract and retain talented executive officers. These benefits also help ensure that executive officers remain focused on maximizing stockholder value in the context of an actual or potential transaction that might result in the loss or the diminution of their current positions. The Company believes that these benefits are reasonable and ultimately benefit stockholders. The executive severance policy and change in control agreements are more fully described below under “Potential Payments Upon Termination or Change in Control.” 

Stock Ownership Requirements

The Company’s stock ownership requirements provide that within three years of being appointed as an executive officer, or being promoted to such a position, an executive is required to beneficially own Common Stock, taking into account all outstanding vested and unvested stock options, RSUs, PSUs, and shares of stock, having a market value or cost basis, whichever is higher, equal to at least the following multiple of his or her base salary (for purposes of calculating this multiple, the actual compensation expense incurred by the Company related to the equity award is used only if it is greater than the current market value of the Common Stock subject to the equity award): 

As of December 31, 2023, each of our executive officers was in compliance with the stock ownership requirements.  Further, in March 2024, the Board revised the Company’s Governance Standards to add ownership requirements for all Regional Vice Presidents, as set forth above. 

Executive Compensation Recovery, or “Clawback,” Policy

The Company’s executive compensation recovery, or “clawback,” policy provides that, to the extent permitted by applicable law, the Board may seek to recoup—or “claw back”—any cash compensation paid to executive officers and certain other employees identified by the Board where the payment was predicated upon the achievement of certain financial results that were satisfied based upon such individual’s intentional, fraudulent, or illegal conduct. The Board has the sole discretion to determine whether an individual’s conduct has or has not met any particular standard of conduct. The Board may, in its sole discretion after considering the best interests of the Company, determine not to recover such payment. In the event that a restatement of the Company’s financial statements is required, the Company will seek to recover any compensation received by the Chief Executive Officer and Chief Financial Officer that is required to be recovered by Section 304 of the Sarbanes-Oxley Act of 2002. In 2023, we expanded our clawback policy to address the recovery of erroneously-awarded incentive compensation in compliance with the requirements of the Dodd-Frank Act, final SEC rules, and applicable listing standards by adopting an additional policy, which additional policy was filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2023.

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Anti-Hedging/Pledging Policy

Our Insider Trading Window Policy prohibits our directors, executive officers, and other employees from, among other things, engaging in hedging or monetization transactions, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars, and exchange funds, that may permit them to continue to own Company stock, but without the full risks and rewards of ownership. No categories of hedging transactions are specifically permitted by this policy. Our Insider Trading Window Policy also prohibits our directors, executive officers, and other employees from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan. 

Risk Considerations in our Compensation Policies

The Committee regularly reviews our various compensation programs and has concluded that they do not create risks that are reasonably likely to have a material adverse effect on the Company or our stockholders. In reaching this conclusion, the Committee considered the following: (i) the use of balanced performance targets; (ii) the Company’s “clawback” policies; (iii) the Company’s stock ownership requirements; (iv) the use of EPS performance metrics that are uniformly applied to all executive officers; (v) a three-year vesting period for LTI compensation; and (vi) the Company’s anti-hedging/pledging policy. 

Impact of Accounting and Tax Treatment on Compensation

Section 162(m) of the Code (“Section 162(m)”) generally disallows a tax deduction for any publicly-held corporation for individual compensation exceeding $1 million in any taxable year payable to certain executive officers, subject to certain grandfathering rules for compensation arrangements in effect on November 2, 2017 and not materially modified thereafter. The Committee believes that its primary responsibility is to provide a compensation program that attracts, retains, and rewards the executive officers and other key employees that are important to the Company’s success. Accordingly, the Committee has authorized and will continue to authorize compensation payments that are limited, in full or in part, as to tax deductibility. 

The Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity plans and programs. If accounting standards change, the Company may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

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Compensation and Human Capital Committee Report

The Compensation and Human Capital Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on its review and discussions, the committee recommended to the Company’s Board of Directors the inclusion of the Compensation Discussion and Analysis in the Company’s 2024 proxy statement. This report is provided by the following independent directors, who comprise the Compensation and Human Capital Committee.

The preceding “Compensation and Human Capital Committee Report” shall not be deemed soliciting material or to be filed with the Securities and Exchange Commission, nor shall any information in this report be incorporated by reference into any past or future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company incorporates it by reference into such filing.

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Summary of Executive Compensation

The following table includes information regarding the compensation paid or awarded to, or earned by, the Named Executive Officers for each of 2023, 2022, and 2021 or for such shorter period for which disclosure is required under SEC rules. For more information about the components of compensation for 2023, please refer to the following subsections of the CD&A:

Summary Compensation Table

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Grants of Plan-Based Awards

The following table provides information concerning awards granted under the Company’s annual incentive plan and equity incentive plan during 2023 for the Named Executive Officers. For further information related to grants of plan-based awards, see the subsection of the CD&A titled “Annual Incentive Plan” and the subsection of the CD&A titled “Long-Term Incentives.”

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Equity Awards

As discussed in further detail above, each of the Named Executive Officers was granted RSUs and PSUs in 2023. The RSUs granted to the Named Executive Officers vest ratably in equal annual installments over three years and dollar-denominated PSUs are earned based on the achievement of relative TSR and EPS performance goals and, to the extent earned, cliff vest after three years, in each case, generally subject to the Named Executive Officer’s continued employment with the Company.

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Outstanding Equity Awards at Year-End

The following table provides information concerning unexercised stock options, unvested RSUs, and unvested dollar-denominated PSUs held by the Named Executive Officers on December 31, 2023.