APi (APG) DEF 14ADefinitive proxy

Dear Fellow Shareholders

On behalf of the Board of Directors, we are pleased to invite you to attend APi Group’s Annual Meeting of Shareholders on June 15, 2023. You will find information about the meeting, including how to participate and the items to be voted on, in the Notice of Annual Meeting of Shareholders and the Proxy Statement that accompany this letter.

Thank you for your investment and continued support of APi. I look forward to working with my fellow Directors and the leadership team in the coming year to continue advancing the business.

Sincerely,

Russell A. Becker

Chief Executive Officer

		Notice of 2023 Annual Meeting of Shareholders

It is my pleasure to invite you to attend APi Group Corporation’s 2023 Annual Meeting of Shareholders (“2023 Annual Meeting”). The 2023 Annual Meeting will be held on June 15, 2023, at 8:30 a.m. (Central Time) in virtual-only format conducted via live webcast at www.virtualshareholdermeeting.com/APG2023. You will be able to participate, submit questions and vote your shares electronically. The information for how to attend virtually and vote at the 2023 Annual Meeting is described below. At the 2023 Annual Meeting, you will be asked to:

Only shareholders of record as of the close of business on April 18, 2023, may vote at the 2023 Annual Meeting.

It is important that your shares be represented at the 2023 Annual Meeting, regardless of the number of shares you may hold. Whether or not you plan to attend, please vote using the Internet, by telephone or by mail, in each case by following the instructions in our proxy statement. This will not prevent you from voting your shares in person if you are present virtually at the 2023 Annual Meeting.

Louis B. Lambert

Senior Vice President, General Counsel and Secretary

We have elected to use the “Notice and Access” method of providing our proxy materials over the Internet. Accordingly, we mailed a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report on or about April 28, 2023.

Our proxy statement and annual report are available online at

http://materials.proxyvote.com/00187Y.

APi Group Corporation, 1100 Old Highway 8 NW, New Brighton, MN 55112

Table of Contents

Proxy Summary

Annual Meeting

Voting Matters and Board Recommendations

How to Vote

Board of Directors

✓    Member        *    Chair

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Proxy Summary

Who We Are

APi was founded in 1926 and has since grown to be the world’s premier life safety, security, monitoring, and specialty services business with over $6.6 billion in revenue, operating in over 20 countries, with approximately 27,400 team members. Our core purpose of Building Great Leaders defines who we are. This focus and other foundational priorities provide the platform from which we can continue to enhance shareholder value. We operate two business segments: Safety Services and Specialty Services. In our Safety Services segment, our mission is to protect our customers’ people, property and high-value assets. We design, install, service, and monitor fire detection and suppression systems and security systems for a wide range of end customers in a broad range of industries. In our Specialty Services segment, we provide specialized industrial services, which include maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer, and telecommunications infrastructure. We believe our growth is sustainable and resilient for the long-term because our business is increasingly driven by statutorily required recurring service revenue, because we operate in highly diversified end-markets, and because our teams deliver industry-leading performance for our customers.

Our “13-60-80” Shareholder Value Creation Model

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Proxy Summary

Corporate Governance Highlights

What We Do

We are committed to principles of effective corporate governance and to high ethical standards, as well as compliance with all applicable governance standards of the Securities and Exchange Commission (“SEC”) and the New York Stock Exchange (“NYSE”). Highlights of the framework we have established for governance are described below.

Board Composition

Our Board of Directors (“Board”) brings deep expertise and broad perspectives from a diversity of industry experiences, backgrounds, nationalities, ages (ranging from 51-67) and other attributes. Our Board believes that this diversity generates better ideas and perspectives, increases the Board’s overall effectiveness, and puts it in a better position to make complex decisions and execute APi Group’s long-term strategic objectives. Currently, our Board is 20% female and 10% BIPOC (black/indigenous/people of color). Our Board is 80% independent.

Sustainability Strategy

Our key strategic priorities for sustainability are: Leadership, Safety, Environment, and Inclusion. We believe these priorities will enable us to deliver on our core purpose: Building Great Leaders.

Our sustainability strategy will be discussed in more detail as part of our first corporate Sustainability Report.

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Proxy Summary

Executive Compensation and Financial Highlights

Compensation Strategy

Our executive compensation philosophy aligns executive compensation decisions with shareholder interests, business strategy, and performance. The strategy and priorities of our compensation philosophy are the following:

Compensation Design

Our compensation plans are designed to drive long-term financial returns for our shareholders and reward our executives for executing on the Company’s strategy and key initiatives.

2022 Financial Highlights

2022 was a year of record financial results for APi Group. Revenues increased by 66.4% compared to 2021, driven by the acquisition of Chubb Fire and Security and strong organic revenue growth, including a double-digit increase in inspection, service and monitoring revenue.

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CORPORATE GOVERNANCE

Corporate Governance Guidelines

Our Board is responsible for overseeing the management of our Company. Our Board has adopted Corporate Governance Guidelines (the “Governance Guidelines”), which set forth our governance principles and policies relating to, among other things:

Our Governance Guidelines are available in the Investor Relations section of our website at www.apigroup.com. The Board reviews its Governance Guidelines from time to time to evaluate evolving corporate governance practices and to ensure the guidelines continue to best serve the Company.

Board Leadership Structure

The Board has not adopted a formal policy regarding the need to separate or combine the offices of Chief Executive Officer (“CEO”) and Co-Chairs of the Board. Instead, the Board remains free to make this determination from time to time in a manner that seems most appropriate for the Company. Currently, we separate the positions of our CEO and Co-Chairs of the Board. The CEO is responsible for the day-to-day leadership and performance of the Company, while the Co-Chairs of the Board provide strategic guidance to the CEO and set the agenda for and preside over the Board meetings. We believe that the current separation provides a more effective monitoring and objective evaluation of the CEO’s performance. The separation also allows the Co-Chairs of the Board to strengthen the Board’s oversight of our performance and governance standards.

Director Independence

The Board has affirmatively determined that each of Messrs. Lillie, Ashken, Blitzer, Milroy, Malkin and Walker and Mses. Loop and Wheeler are “independent” as that term is defined under the applicable rules and regulations of the SEC and the NYSE listing standards, as well as our Governance Guidelines. Thomas V. Milroy serves as lead independent director. Because Sir Martin controls the entity which receives advisory fees from us, he is not independent under NYSE listing standards. As CEO of the Company, Mr. Becker is also not independent.

Board Role in Risk Management

While our management is responsible for day-to-day risk management identification and mitigation, the Board is actively involved in the oversight and management of risks that could affect the Company. We engage in an Enterprise Risk Management (“ERM”) process that evaluates risks over the short-term, mid-term, and long-term. The ERM process consists of periodic risk assessments performed by various functional management groups during the year. Executive management presents these assessments to the Audit Committee to ensure that the process is sound and complete, oversight is appropriate, and the risks and risk assessments are properly reviewed. The other Committees of the Board consider the risks within their areas of responsibility. While risk oversight and management is conducted primarily through Committees of the Board, the full Board has retained responsibility for general oversight of risks. The Board satisfies its oversight responsibility through full reports by each Committee chair regarding the Committee’s considerations and actions (including from the Audit Committee Chair related specifically to the ERM process), as well as through regular reports directly from management responsible for oversight of particular risks within the Company.

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Corporate Governance

Code of Business Conduct and Ethics

We have adopted a written Code of Business Conduct and Ethics (“Code of Conduct”) that establishes the standards of ethical conduct applicable to all our directors, officers, and employees. In addition, we have adopted a written Code of Ethics for Senior Financial Officers (“Code of Ethics”) applicable to our CEO and senior financial officers. Copies of our Code of Conduct and Code of Ethics are publicly available in the Investor Relations section of our website at www.apigroup.com. Any waiver of our Code of Ethics with respect to our CEO, chief financial officer, controller or persons performing similar functions, or waiver of our Code of Conduct with respect to our directors or executive officers, may only be authorized by our Board and will be disclosed on our website as promptly as practicable, as may be required under applicable SEC and NYSE rules.

Meetings

During 2022, the Board held a total of five meetings. Each incumbent director attended at least seventy-five percent (75%) of the aggregate of (i) the total number of meetings of the Board during the period for which he or she was a director and (ii) the total number of meetings of all Board committees (the “Committees”) on which he or she served during the period for which he or she was a director. It is the policy of the Board to encourage its members to attend our annual meeting of shareholders. Half of our Board members attended the 2022 Annual Meeting of Shareholders.

During 2022, our Board generally held executive sessions, or meetings of non-employee directors without management present, as part of regularly scheduled Board, Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee meetings. Thomas V. Milroy presides over executive sessions of the Board. Messrs. Ashken, Milroy, and Walker generally preside over the executive sessions of the Audit, Compensation, and Nominating and Corporate Governance Committees, respectively.

Board Committees

Our Board has three standing Committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. Copies of the committee charters setting forth the responsibilities of the Committees are available in the Investor Relations section of our website at www.apigroup.com, and such information is also available in print to any shareholder who requests it through our Investor Relations department. The Committees will periodically review their respective charters and recommend any needed revisions to the Board. The following is a summary of the composition of each Committee:

* Committee Chair

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Corporate Governance

Audit Committee

Number of Meetings in 2022: Four

Responsibilities. Our Audit Committee operates pursuant to a formal charter that governs the responsibilities of the Audit Committee. Pursuant to the Audit Committee Charter, the Audit Committee is responsible for, among other things:

The Audit Committee has the power to investigate any matter brought to its attention within the scope of its duties and to retain counsel for this purpose where appropriate.

Independence and Financial Expertise. The Board has reviewed the background, experience and independence of the Audit Committee members and based on this review, has determined that each member of the Audit Committee:

In addition, the Board has determined that each of Mr. Ashken, Ms. Loop and Ms. Wheeler qualifies as an “audit committee financial expert” under SEC rules.

Compensation Committee

Number of Meetings in 2022: Four

Responsibilities. Our Compensation Committee operates pursuant to a formal charter that governs the responsibilities of the Compensation Committee. Pursuant to the Compensation Committee Charter, the Compensation Committee is responsible for, among other things:

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Corporate Governance

Independence. The Board has reviewed the background, experience and independence of the Compensation Committee members and based on this review, has determined that each member of the Compensation Committee:

Compensation Committee Interlocks and Insider Participation. None of the members of the Compensation Committee who presently serve or, in the past year, have served on the Compensation Committee has interlocking relationships as defined by the SEC or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related party transactions.

The Compensation Committee has the authority to delegate any of its responsibilities to subcommittees as it may deem appropriate in its sole discretion.

Use of Compensation Consultant

The Compensation Committee has the authority to retain compensation consultants, outside counsel and other advisors as it may deem appropriate in its sole discretion. The Compensation Committee has sole authority to approve related fees and retention terms.

During 2022, the Compensation Committee utilized the services of Willis Tower Watson (“WTW”), a global human resources and risk management consulting firm, which acted as its compensation consultant to assist in reviewing competitive market data and preparing proposals for 2023 executive compensation. The total fees paid to WTW for these services were approximately $147,762.

During 2022, our management also retained separate business units of WTW (Work, Rewards & Career; Corporate Risk & Broking; and Retirement) to provide insurance brokerage and human-capital management services to the Company. The total fees paid to WTW’s separate business units with respect to services provided during 2022 (excluding services provided as compensation consultant as discussed above) were approximately $3.0M. The Compensation Committee was not involved in management’s decision to retain these separate business units of WTW to provide such services.

The Compensation Committee determined that the work of the separate business units of WTW on matters other than executive compensation did not raise any conflict of interest with WTW’s services as compensation consultant. It took into account, among other factors, WTW’s policies and procedures relating to the prevention and mitigation of conflicts of interest, and the use of separate teams for compensation consulting services and other services provided by WTW and its business units, and it determined that WTW is independent.

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Corporate Governance

Nominating and Corporate Governance Committee

Number of Meetings in 2022: Two

Responsibilities. Our Nominating and Corporate Governance Committee operates pursuant to a formal charter that governs the responsibilities of the Nominating and Corporate Governance Committee. Pursuant to the Nominating and Corporate Governance Committee Charter, the Nominating and Corporate Governance Committee is responsible for, among other things:

The Nominating and Corporate Governance Committee may, when it deems appropriate, delegate certain of its responsibilities to one or more Nominating and Corporate Governance Committee members or subcommittees.

Independence. The Board has reviewed the background, experience and independence of the Nominating and Corporate Governance Committee members and based on this review, has determined that each member of the Nominating and Corporate Governance Committee meets the independence requirements of the NYSE governance standards and SEC rules and regulations.

Consideration of Director Nominees. The Nominating and Corporate Governance Committee considers possible candidates for nominees for directors from many sources, including shareholders. The Nominating and Corporate Governance Committee evaluates the suitability of potential candidates nominated by shareholders in the same manner as other candidates recommended to the Nominating and Corporate Governance Committee. Shareholders who wish to recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board at an annual meeting of shareholders may do so by delivering a written recommendation to our Secretary at the following address: APi Group Corporation, 1100 Old Highway 8 NW, New Brighton, Minnesota 55112, Attn: Secretary, generally not less than 90 nor more than 120 calendar days prior to the first anniversary of the date on which the Company held the preceding year’s annual meeting of shareholders. Submissions must include, among other things, (i) all information relating to the individual subject to such nomination that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act, (ii) such individual’s written consent to being named in a proxy statement as a nominee and to serving as director if elected and (iii) such other information as may be required by our Bylaws, including information with respect to the shareholder giving notice of such nomination.

In making nominations, the Nominating and Corporate Governance Committee is required to submit candidates who have the highest personal and professional integrity, who have demonstrated exceptional ability and judgment and who will be most effective, in conjunction with the other nominees to the Board, in collectively serving the long-term interests of the shareholders. In evaluating nominees, the Nominating and Corporate Governance Committee is required to take into consideration the following attributes, which are desirable for a member of the Board: leadership, independence, interpersonal skills, financial acumen, business experiences, industry knowledge and diversity of viewpoints. In addition, while we do not have a formal, written diversity

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Corporate Governance

policy, the Nominating and Corporate Governance Committee will attempt to select candidates who will assist in making the Board a diverse body. As discussed under the heading “Board Composition” above, we believe that a diverse group of directors brings a broader range of experiences to the Board and generates a greater volume of ideas and perspectives, and therefore, is in a better position to make complex decisions.

Anti-Hedging Policy

Our Insider Trading Policy, which is applicable to all employees (including executive officers) and directors of the Company, makes clear that no employee or director may engage in hedging transactions or any other forms of monetization transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities granted as compensation, or held directly or indirectly by the employee or director.

Communications with the Board

Under our Governance Guidelines, a process has been established by which shareholders and other interested parties may communicate with members of the Board. Any shareholder or other interested party may communicate in writing to any Chair of the Board, c/o General Counsel and Secretary, APi Group Corporation, 1100 Old Highway 8 NW, New Brighton, MN 55112.

The Board has approved a process for handling correspondence received by the Company and addressed to non-management members of the Board. Under that process, any Chair or an officer delegated by the Co-Chairs (“Delegated Officer”) reviews all such correspondence and maintains a log of all such correspondence and forwards to the directors copies of all correspondence that, in the opinion of any Chair or the Delegated Officer, deal with the functions of the Board or Committees thereof or that any Chair or Delegated Officer otherwise determines requires their attention. Any Chair or Delegated Officer may screen frivolous or unlawful communications and commercial advertisements. Directors may at any time review the log.

Certain Relationships and Related Transactions

Since January 1, 2022, we did not enter into any related party transactions other than as set forth below.

Advisory Services Agreement

On October 1, 2019, we entered into an Advisory Services Agreement with Mariposa Capital, LLC, an affiliate of Sir Martin. Under this agreement, Mariposa Capital, LLC agreed to provide certain services, including corporate development and advisory services, advisory services with respect to mergers and acquisitions, investor relations services, strategic planning advisory services, capital expenditure allocation advisory services, strategic treasury advisory services and such other services relating to the Company as may from time to time be mutually agreed. In connection with these services, Mariposa Capital, LLC is entitled to receive an annual fee equal to $4,000,000, payable in quarterly installments. The initial term of this agreement was through October 1, 2020 and has been and will in the future be automatically renewed for successive one-year terms unless either party notifies the other party in writing of its intention not to renew this agreement no later than 90 days prior to the expiration of the term. This agreement may only be terminated by the Company upon a vote of a majority of our directors. In the event that this agreement is terminated by the Company, the effective date of the termination will be six months following the expiration of the initial term or a renewal term, as the case may be.

Registration Rights

Mariposa

The Company has agreed to provide Sir Martin, Messrs. Lillie and Ashken, and the Mariposa Acquisition IV, LLC with certain registration rights that require the Company to provide them with such information and assistance following the acquisition of APi Group, Inc. (the “APi Acquisition”), subject to certain restrictions and customary exceptions, as they may reasonably request to enable it to effect a disposition of all or part of their common stock or warrants, including, without limitation, the preparation, qualification and approval of a prospectus in respect of such common stock or warrants.

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Corporate Governance

Viking Global Investors

Pursuant to the registration rights agreement dated March 24, 2020, with Viking Global Opportunities Liquid Portfolio Sub-Master LP (“Viking”), the beneficial owner of approximately 14.4% of our outstanding shares of common stock (or 15.5% of the total voting power) as of the Record Date, we (i) filed a registration statement on May 12, 2021 (that was declared effective by the SEC on May 21, 2021) to register the resale of common stock then held by Viking and (ii) agreed that, if we propose to register any of our common stock under the Securities Act of 1933, as amended (the “Securities Act”) in connection with the public offering of such securities solely for cash (other than in certain excluded registrations), we will register all of the shares that the Viking Opportunities Fund requests to be included in such registration (subject to customary cutbacks if the underwriters determine that less than all of the shares requested to be registered can be included in such offering).

The registration rights agreement contains customary indemnities. Our obligations under the registration rights agreement will terminate on the earlier of (a) such time as all of the shares that may be registered under the agreement have been sold and (b) such time as all of such shares may be sold, transferred or otherwise disposed of in a single transaction without limitation under Rule 144 under the Securities Act.

Series B Preferred Stock Purchasers

In connection with the issuance of the Series B Preferred Stock, on January 3, 2022, we entered into registration rights agreements with Juno Lower Holdings L.P. (“Juno”), FD Juno Holdings L.P. (“FD Juno” and, together with Juno, the “Blackstone Purchasers”), Viking Global Equities Master Ltd. (“VGEM”) and Viking Global Equities II LP (“VGE” and, together with VGEM, the “Viking Purchasers,” and together with the Blackstone Purchasers, the “Series B Purchasers”). On January 3, 2022, we filed a registration statement to satisfy our obligations under such registration rights agreements to register the resale of the shares of common stock issuable upon conversion of or as dividends on the Series B Preferred Stock.

In addition, pursuant to the registration rights agreements, if we propose to register any shares of common stock under the Securities Act in connection with the public offering of such securities solely for cash, we will register all of the shares that the Series B Purchasers request to be included in such registration (subject to customary cutbacks if the underwriters determine that less than all of the shares requested to be registered can be included in such offering). The holders also have the right to request one or more underwritten offerings, so long as the anticipated gross proceeds of such underwritten offering is not less than $25 million (unless such holders are proposing to sell all of their remaining registrable securities), and the holders have the right to request unlimited non-underwritten shelf take-downs. We will not be obligated to effect more than two underwritten offerings for a particular Series B Purchaser during any 12-month period.

The registration rights agreements contain customary indemnities. Our obligations under the registration rights agreements will terminate as to a particular Series B Purchaser when all shares that are registrable under the registration rights agreements are no longer held by such Series B Purchaser.

Commercial Relationships

During 2022, we, through certain of our subsidiaries, provided fire safety and dust mitigation services to Royal Oak Enterprises, LLC (“ROE”), a manufacturer and distributor of charcoal, fire logs and related products, in the ordinary course of business and on arm’s length terms. As consideration for our services, we received aggregate revenue of approximately $8 million from ROE during 2022. Our Co-Chair, Sir Martin E. Franklin, is the chairman and controlling shareholder of ROE.

Related Party Transaction Policy

The Board has determined that the Audit Committee is best suited to review and pre-approve transactions with related persons, in accordance with the policy set forth in the Audit Committee Charter. Such review will apply to any material transaction or series of related transactions or any material amendment to any such transaction involving a related person and the Company or any subsidiary of the Company. For purposes of the policy, “related persons” will consist of executive officers, directors, director nominees, any shareholder beneficially

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Corporate Governance

owning more than 5% of the issued and outstanding common stock, and immediate family members of any such persons. In reviewing related person transactions, the Audit Committee will take into account all factors that it deems appropriate, including whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. No member of the Audit Committee will be permitted to participate in any review, consideration or approval of any related person transaction in which the director or any of his or her immediate family members is the related person.

Director Compensation

Our non-employee director compensation policy provides for the following compensation for our non-employee directors:

In addition, all of our directors are entitled to be reimbursed by the Company for reasonable expenses incurred by them in the course of their directors’ duties relating to the Company.

Sir Martin does not receive any additional compensation for services as a director in light of his affiliation with Mariposa Capital, LLC, which provides advisory services to the Company in exchange for a fee. In addition, Mr. Becker, who serves as our CEO, is not entitled to receive any additional compensation for his services as a director. Mr. Blitzer elected to waive all compensation for his service as a director for 2022.

The table below sets forth the non-employee director compensation for the year ended December 31, 2022.

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Corporate Governance

Director Stock Ownership Guidelines

In 2022, the Board adopted stock ownership guidelines, which provide that each independent director is expected to own, directly or indirectly, shares of our common stock having a value of at least five times the amount of the annual Board member retainer. All non-employee directors are expected to satisfy the stock ownership guidelines within four years following the date they are first elected to the Board.

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Proposal 1—Election of Directors

Under our bylaws, directors are elected for a one-year term expiring at the next annual meeting of shareholders. Upon the recommendation of the Nominating and Corporate Governance Committee, our Board has nominated Sir Martin E. Franklin, James E. Lillie, Ian G.H. Ashken, Russell A. Becker, David S. Blitzer, Paula D. Loop, Anthony E. Malkin, Thomas V. Milroy, Cyrus D. Walker and Carrie A. Wheeler for election or re-election, each for a one-year term that will expire at the 2024 Annual Meeting of shareholders. Each of our directors consented to serve if elected.

Our bylaws provide that directors are elected by a majority of the votes cast with respect to the nominee for election to the Board at any meeting of shareholders at which directors are to be elected and a quorum is present, except in the case of a contested election. As set forth in our bylaws, “a majority of the votes cast” means that the number of shares voted “for” a nominee for election to the Board exceeds the votes cast “against” such nominee and shall not include abstentions. In the event of a contested election, in accordance with our bylaws, directors are elected by a plurality of the votes cast.

We believe that each of our directors possesses the experience, skills and qualities to fully perform his or her duties as a director and contribute to our success. Our directors were nominated because we believe each is of high ethical character, highly accomplished in his or her field with superior credentials and recognition, has a reputation, both personal and professional, that is consistent with our image and reputation, has the ability to exercise sound business judgment, and is able to dedicate sufficient time to fulfilling his or her obligations as a director. Our directors as a group complement each other and each of their respective experiences, skills and qualities so that collectively the Board operates in an effective, collegial and responsive manner. Below we have set out each director’s principal occupation and other pertinent information about particular experience, qualifications, attributes and skills that led the Board to conclude that such person should serve as a director.

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Proposal 1—Election of Directors

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Proposal 1—Election of Directors

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Proposal 1—Election of Directors

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Proposal 1—Election of Directors

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Proposal 1—Election of Directors

RECOMMENDATION OF THE BOARD OF DIRECTORS

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COMPENSATION DISCUSSION & ANALYSIS

This Compensation Discussion and Analysis provides information regarding our executive compensation philosophy, programs and decisions for 2022 for our named executive officers (the “NEOs”). For 2022, our NEOs were:

Compensation Strategy

Our executive compensation philosophy aligns executive compensation decisions with shareholder interests, business strategy, and performance. The strategy and priorities of our compensation philosophy are the following:

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Compensation Discussion & Analysis

Pay for Performance

The Compensation Committee creates a pay-for-performance culture with a significant portion of executive compensation delivered through at-risk pay. Their compensation is appropriately weighted between short- and long-term performance, balancing near- and long-term strategic goals and shareholder value creation.

Overview of 2022 Performance

2022 was a year of record financial results for APi Group. We delivered strong organic growth, adjusted earnings per share and free cash flow growth in a challenging macro environment. We believe this once again demonstrates the stability of our recurring revenue, services focused business model and the ongoing execution of our strategy by our talented team members. Revenues increased by 66.4% compared to 2021 to $6.6 billion, driven by the acquisition of Chubb Fire and Security and strong organic revenue growth, including a double-digit increase in inspection, service and monitoring revenue in our legacy business. We achieved our stated goal of growing inspection revenue 10%+ as we drive towards our goal of 60%+ of total revenues coming from inspection, service and monitoring.

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Compensation Discussion & Analysis

2022 Key Decisions

Say-on-Pay Voting Results

As part of its decision making on compensation, the Compensation Committee evaluates the most recent advisory vote of the Company’s shareholders on executive compensation, known as the “Say-on-Pay” vote, as well as other feedback that it may receive from the Company’s largest shareholders in connection with this vote. Our Say-on-Pay results consistently reflected strong support for the linkage between pay and performance in our compensation programs. Over the past three years, the support of the percentage of votes cast on the Say-on-Pay proposal are as follows:

The Compensation Committee believes these voting results demonstrate significant, continuing support for our executive compensation program, and the Compensation Committee did not make any substantial changes to the existing program for 2022 specifically in response to the 2021 Say-on-Pay voting results. The Compensation Committee will continue to consider the views of our shareholders in connection with executive pay practices and programs and will make adjustments based on evolving best practices, competitive market information and practices, and changing regulatory or other requirements.

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Compensation Discussion & Analysis

Compensation Governance Practices

Our executive compensation governance practices are intended to support the needs of the business, drive performance, and ensure management alignment with the short- and long-term interests of our shareholders.

Executive Compensation Setting Process

Role of the Compensation Committee

Our Board has adopted a written Compensation Committee Charter that governs the responsibilities of the Compensation Committee. The Compensation Committee is responsible for, among other things:

In reviewing and determining executive compensation, the Compensation Committee generally considers: compensation levels at peer companies and information derived from compensation surveys provided by outside consultants, as further described below; the Company’s past-year performance and growth; the results of any “Say-on-Pay” (defined below) votes by shareholders; achievement of specific pre-established financial goals; a subjective determination of the executives’ past performance and expected future contributions to the Company; past equity awards granted to such executives, and the recommendation of the CEO.

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Compensation Discussion & Analysis

Role of our Compensation Peer Group

How we use peer group data

We compare our executive compensation programs to those of 17 companies that make up our compensation peer group. The Compensation Committee uses peer group data to generally inform:

When making compensation decisions, the Compensation Committee generally analyzes data relating to our peer group and considers the dynamics of operating in the safety services and specialty services industries, the importance of rewarding and retaining talented and experienced executives to continue to guide the Company, the alignment of our executive compensation program with shareholders’ interests and the voting guidelines of certain proxy advisory firms and shareholders. In addition, in connection with the 2022 executive compensation program design, the Compensation Committee received analyses, guidance and recommendations, including general information on executive compensation market trends and practices of peer companies, provided by the Compensation Committee’s independent compensation consultant (described below). The Compensation Committee does not strictly benchmark executive pay against this comparative compensation information, but instead uses this data as a market check on its compensation decisions. We do not mandate target ranges for our NEO’s base salaries, annual incentive targets, long-term incentive award targets, or total direct compensation levels as compared to the peer group. The Compensation Committee recognizes that over-reliance on external comparisons can be of concern; therefore, the Committee uses external comparisons as only one point of reference and is mindful of the value and limitations of comparative data.

How our peer group was determined

In determining our 2022 peer group, the Compensation Committee considered factors such as revenue, market capitalization, global scope of operations, and industry alignment. The approach taken by the Compensation Committee in selecting the peer group excluded larger companies from the market data review but included them as “reference peers” for the purpose of providing qualitative data about program design for the Compensation Committee’s reference. Given the acquisition of Chubb Fire and Security business from Carrier Global in 2022, there were significant changes to the Peer Group in 2022. Specifically, the Peer Group was changed to better align with the new increase in annual revenue from the Chubb acquisition and evolution to a service-oriented business. Five peers were removed given that their revenue was less than half of APi Group’s, and five peers were added because they had a significant service element to their business.    

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Compensation Discussion & Analysis

Role of Compensation Consultant

In 2022, the Compensation Committee used WTW to serve as the independent compensation consultant. The information from WTW regarding pay practices at peer companies is used by the Compensation Committee as a resource in its deliberations regarding executive compensation and will be useful in determining the marketplace competitiveness as well as reasonableness and appropriateness of our executive compensation programs.

Role of Executives in Establishing Compensation

The Compensation Committee considers input from our CEO, Chief Financial Officer, and Chief People Officer when determining performance metrics and objectives for our STI and LTI plans and evaluating performance against such metrics and objectives. Our CEO and Chief People Officer then evaluate the individual performance and the competitive pay positioning of senior management members who report directly to the CEO, including the NEOs, and then make recommendations to the Compensation Committee regarding the target compensation for such NEOs and other executive officers of the Company.

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Compensation Discussion & Analysis

Components of the Executive Compensation Program

Our NEOs receive a base salary, annual cash incentive compensation, and annual equity incentive awards (each, an “LTI Award”) and participate in our employee benefits programs and plans.

In the first quarter of 2022, the Compensation Committee approved, and the Company implemented, the executive compensation program for 2022.

The following table summarizes the primary components of the 2022 executive compensation program:

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Compensation Discussion & Analysis

2022 Compensation Decisions

Consistent with our compensation philosophy of paying for performance, our compensation decisions closely link pay and performance. Our performance during 2022 resulted in the following compensation actions.

Base Salary

The Compensation Committee expects to annually review the NEOs’ base salaries and make appropriate adjustments based on factors determined by the Compensation Committee, including individual responsibilities and performance, internal pay equity, compensation history, executive potential, and peer group and market-based data, as described above. During 2022, the base salaries of our NEOs changed as set forth below:

Short-Term Incentive Compensation

In 2022, Company executives had an opportunity to earn cash incentive compensation based on the achievement of annual performance goals developed in the annual budget process and approved by the Compensation Committee. The Compensation Committee annually reviews, and revises if necessary, the appropriateness of the performance metrics, their correlation to the Company’s overall growth strategy and the impact of such performance metrics on long-term shareholder value. The Compensation Committee did not make any revisions to the STI plan after the goals were approved at the beginning of the performance period.

STI Opportunity. For 2022, all our NEOs were eligible for an annual cash incentive opportunity as outlined below, based on the achievement of a performance goal tied to the Company’s annual Adjusted EBITDA performance.

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Compensation Discussion & Analysis

Amounts payable under the annual incentive portion of the executive compensation plan can range from 0-200% of target, with a threshold payout at 40% of target and a maximum payout of 200% of target based on achievement of the performance goal. If the performance goal was achieved between the threshold level and target or between the target and maximum level, the amount of the annual incentive payment with respect to that performance goal is calculated on a linear basis from the target level.

Performance Metrics, Target, 2022 Performance and Payout. For 2022, the Compensation Committee determined that the annual incentive compensation paid to our NEOs would be based on performance against adjusted EBITDA targets. Adjusted EBITDA is calculated based on net income, adjusted as described in the Appendix and to eliminate the impact of foreign currency fluctuations. The Compensation Committee believes that our NEOs can impact adjusted EBITDA and that it is one of the most important performance metrics used by investors, shareholders and creditors as an indicator of the performance of our core business.

The Company’s adjusted EBITDA for 2022 was $688.6 million, resulting in an 140.6% payout on the annual cash incentives. The payouts for the NEOs were:

2022 LTI Awards

The 2022 executive compensation program adopted by the Compensation Committee includes the grant of LTI Awards under the Equity Incentive Plan. The Compensation Committee used a percentage of each NEO’s base salary to determine the value of the LTI Award to be granted to each NEO each year. The Compensation Committee also believes that the structure of LTI Awards should correlate the value of any such award to the achievement by the Company of long-term and strategic objectives. As such, the Compensation Committee expects that a significant percentage of the amount of LTI Awards will be subject to the achievement of Company performance goals. Time-based awards are awarded as part of a balanced approach to encourage retention and ensure that the Company’s compensation programs do not encourage excessive risk-taking.

For 2022, the Compensation Committee approved the grant of a mix of PSUs and RSUs to the NEOs. The RSUs represent 20% of the total target award amount and will vest ratably over three years from the date of grant. The PSUs represent 80% of the total target award amount, assuming performance and vesting at target levels. The performance metrics for the 2022 PSU LTI Awards were based equally on (i) cumulative adjusted EBITDA dollars and (ii) a Company target share price. These metrics were chosen because we believe them to be drivers of sustained value creation over the long term for our shareholders. The cumulative adjusted EBITDA dollar metric has a three-year performance period and a payout range of 0-200% (0-175% for Mr. Jackola) based on the achievement of the pre-established goals (below threshold performance equating to 0%, threshold performance equating to 25%, target performance equating to 100% and maximum performance equating to 200% (175% for Mr. Jackola)), the achievement of which will be determined by the Compensation Committee following the three-year performance period ending December 31, 2024. The target share price PSU has a

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Compensation Discussion & Analysis

share price hurdle performance criteria, which needs to be met or exceeded for 20 consecutive trading days by the fifth anniversary of the grant date, otherwise such units are forfeited.

In 2022, the Compensation Committee granted the following LTI Awards to the NEOs:

Each of the above PSU awards represents the target grant amount; actual shares earned at vesting, if any, may be higher or lower depending on the level of performance achieved.

2023 LTI Awards

In February 2023, the Compensation Committee made changes to the mix and design of the LTI Awards for 2023 grants to better align with the market prevalence of our peers and to better attract and retain key executives. For 2023, the Compensation Committee changed the mix of LTI Awards to be comprised 60% in the form of PSUs and 40% in the form of time-based RSUs. With respect to PSUs, 100% of earned amounts will be based on achievement of Cumulative adjusted EBITDA basis over the 2023-2025 performance period.

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Compensation Discussion & Analysis

Benefits and Other Perquisites

We provide employees, including the NEOs, with a range of employee benefits including life and health insurance, disability benefits and retirement benefits (as described below), that are designed to assist in attracting and retaining skilled employees critical to our long-term success, and to be competitive with market practice.

401(k) & Profit Sharing Plan

Most of our domestic employees, including our NEOs, are eligible to participate in the Company’s tax-qualified 401(k) & Profit Sharing Plan (the “401(k) Plan”). Pursuant to the 401(k) Plan, employees may elect to contribute a portion of their current compensation to the 401(k) Plan, in an amount up to the statutorily prescribed annual limit. The 401(k) Plan provides the option for the Company to make matching contributions. Participants may also direct the investment of their 401(k) Plan accounts into several investment alternatives.

Other Benefits and Perquisites

We also provide each of our NEOs with an executive term life insurance policy which provides a death benefit of $550,000 and an executive disability insurance policy which covers up to 75% of their base salary. In addition, we provide certain of our NEOs with a car allowance as well as reimbursement of the cost of annual physicals.

Company matching contributions and cash profit sharing contributions allocated to NEOs under the 401(k) Plan, premiums paid by the Company on the life and disability insurance policies on behalf of NEOs and amounts paid by the Company for the car allowance for NEOs are shown in the “All Other Compensation” column in the Summary Compensation Table in the “Executive Compensation” section.

Employee Stock Purchase Plan

Most of our domestic employees, including our NEOs, are eligible to participate in the Company’s Employee Stock Purchase Plan (the “ESPP”). Sales of shares of our common stock under the ESPP are generally made pursuant to offerings that are intended to satisfy the requirements of Section 423 of the Internal Revenue Code. The ESPP permits employees of the Company, including our NEOs, to purchase common stock at a discount equal to 85% of the lesser of (i) the market value of the common stock on the first day of the offering period, or (ii) the market value of the common stock on the purchase date, whichever is lower. Participants are subject to eligibility requirements and may not purchase more than 500 shares in any offering period or more than $10,000 of common stock in a year under the ESPP.

Other Compensation-Related Practices and Policies

Change in Control

The Employment Agreements with Mr. Becker and Mr. Krumm provide that if the executive is terminated either without “cause” (as defined in their Employment Agreements) or terminates their employment for “good reason” (as defined in their Employment Agreements) during the two-year period immediately following a “change in control” (as defined in the Equity Incentive Plan), they shall be entitled to certain payments and benefits. The Executive Severance Policy, effective January 1, 2023, provides that if an Eligible Executive (as defined in the policy and not including Mr. Becker and Mr. Krumm specifically) is terminated without “cause” (as defined in the policy) or terminates their employment for “good reason” (as defined in the Equity Incentive Plan) during the one-year period following a “change in control” (as defined in the Equity Incentive Plan), they shall be entitled to certain severance payments and benefits. See the “Potential Payments Upon Termination or Change in Control” section below. We believe such change in control provisions serve the best interests of the Company and our shareholders by allowing our executives to exercise sound business judgement without fear of significant economic loss in the event they lose their employment with the Company as a result of a change in control. We also believe that such arrangements are competitive, reasonable and necessary to attract and retain key executives.

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Compensation Discussion & Analysis

Executive Severance

Under their Employment Agreements, if Mr. Becker or Mr. Krumm are involuntarily terminated without “cause” or terminate their employment for “good reason” during a period outside the two-year period immediately following a change in control, each shall be entitled to: (i) all previously earned and accrued but unpaid amounts of their base salary up to their termination date; and (ii) subject to certain conditions, severance pay as described under the “Potential Payments Upon Termination or Change in Control” section below. Under the Executive Severance Policy, effective January 1, 2023, Mr. Lambert and Ms. Morton are entitled to severance pay as described under the “Potential Payments Upon Termination or Change in Control” section below.

Clawback Policy

In 2022, the Company adopted its current Executive Compensation Clawback Policy. The policy applies to officers subject to Section 16 of the Exchange Act or as designated by the Compensation Committee. Under the policy, incentive compensation is subject to recoupment or forfeiture if (i) the Company files revised financial statements with the SEC for any of the three preceding completed fiscal years, which restatement involves a material negative revision of a measure related to incentive compensation earned or paid to an officer; (ii) the Company makes a material negative revision for any of the three preceding completed fiscal years of a measure related to incentive compensation earned or paid to an officer, where such revision was directly related to misconduct by such officer in violation of the law or the Company’s Code of Conduct; or (iii) a material error is made in favor of the officer in calculation of the officer’s incentive compensation payout within three months after the erroneous amount is paid. We expect in 2023 to review and revise the Executive Compensation Clawback Policy in connection with the adoption of final rules regarding recovery of erroneously awarded compensation as promulgated by the SEC and the NYSE in 2022 and 2023, respectively.

Executive Stock Ownership Guidelines

The Compensation Committee believes that it is important to align the interests of our directors and executive officers, including our NEOs, with the interests of our shareholders. In 2022, the Compensation Committee adopted Stock Ownership Guidelines for Executive Officers and Non-Employee Directors, which require non-employee directors and executive officers to hold shares with a value equal to or exceeding a multiple of annual cash retainer or base salary, as applicable. Each non-employee director and executive officer is expected to comply with the guidelines within four years following the date he or she becomes subject to the requirements. Failure to satisfy these Guidelines will limit the ability of the relevant individual to sell shares of our stock. The following table sets forth the Stock Ownership Guidelines:

Shares included in this calculation are those directly or indirectly owned (including without limitation unvested RSU awards not subject to achievement of performance goals) and shares held in savings plans (including without limitation the 401(k) Plan) or acquired through the ESPP.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table summarizes the compensation of our NEOs for the fiscal years presented.

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Executive Compensation

Grants of Plan-Based Awards During 2022

The following table provides information about cash (non-equity) and equity incentive compensation awarded to our NEOs in 2022. Information on the terms of these awards is discussed in greater detail in this proxy statement under the caption “Compensation Discussion and Analysis.” See “Potential Payments Upon Termination or Change in Control” for a discussion of how equity awards are treated under various termination scenarios.

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Executive Compensation

Outstanding Equity Awards at 2022 Year End

The following table provides information concerning unvested RSUs and PSUs held by each of our NEOs as of December 31, 2022.