Veralto (VLTO) DEF 14ADefinitive proxy

To assist you in reviewing the proposals to be acted upon at our 2024 Annual Meeting, below is summary information regarding the meeting, each proposal to be voted upon at the meeting and Veralto Corporation’s business performance, corporate governance, sustainability program and executive compensation. The following description is only a summary and does not contain all of the information you should consider before voting. For more information about these topics, please review Veralto’s Annual Report on Form 10-K for the year ended December 31, 2023 and the complete Proxy Statement. In this Proxy Statement, the terms “Veralto” or the “Company” refer to Veralto Corporation, Veralto Corporation and its consolidated subsidiaries or the consolidated subsidiaries of Veralto Corporation, as the context requires. All financial data in this Proxy Statement refers to continuing operations unless otherwise indicated.

Please see the sections titled “General Information About the Meeting” and “Other Information” beginning on page 84 for important information about the proxy materials, voting, the Annual Meeting, Company documents, communications and the deadlines to submit shareholder proposals and director nominations for next year’s annual meeting of shareholders.

Our Board of Directors recognizes that Veralto’s success over the long term requires a robust framework of corporate governance that serves the best interests of all our shareholders and promotes robust risk oversight.

We actively seek and highly value feedback from our shareholders. During 2023, our Investor Relations outreach efforts focused on engaging investors and shareholders in connection with our Separation from Danaher on topics including our business strategy and financial performance, governance and sustainability initiatives. Attendees included members of our senior management and, in some cases, members of our Board. We shared feedback received during these meetings with our Board, informing their decision-making.

As discussed in detail under “Compensation Discussion and Analysis,” with the goal of building long-term value for our shareholders, we have developed an executive compensation program designed to:

To achieve these objectives, in particular, beginning in 2024, our first full fiscal year as an independent public company, our compensation program combines annual and long-term components, cash and equity, and fixed and variable elements, with a bias toward long-term, performance-based equity awards tied closely to shareholder returns and subject to significant vesting periods. Our executive compensation program rewards our executive officers when they help increase long-term shareholder value, achieve annual business goals and build long-term careers with Veralto.

The Company believes in pay for performance and aligning pay with shareholder interests and the Company’s business objectives. Prior to separation, Ms. Honeycutt served as an executive officer of Danaher and, as such, her pre-Separation compensation was determined and approved by Danaher’ compensation committee (the “Danaher Compensation Committee”). Each of the other Veralto named executive officers (“NEOs”) was employed or hired by Danaher before Separation, but none were executive officers of Danaher. The pre-Separation target compensation for our NEOs hired or re-hired during 2023, including any sign-on bonuses or equity grants negotiated to offset any foregone compensation or other incentive compensation at their respective prior employers, was determined by the Danaher Compensation Committee. The pre-Separation target compensation of each of the remaining NEOs other than Ms. Honeycutt was generally determined by the officer’s manager with input from Danaher’s chief executive officer in certain cases, except that their equity awards were ultimately subject to approval by the Danaher Compensation Committee.

In anticipation of the Separation, the portion of target compensation that would customarily be provided as long-term incentives subject to performance goals, was awarded in the form of RSUs. Beginning in 2024, the majority of executive compensation will be tied to performance in the form of annual incentives and performance stock units. As displayed in the charts below, in 2023, 87.3% of the target compensation for Ms. Honeycutt was in the form of performance-based and/or equity based compensation, with the remaining 12.7% set as fixed pay or other compensation. For our other NEOs, 79.2% of their target compensation was performance-based and/or equity based compensation with the remaining 20.8% set as fixed pay or other compensation.

We encourage you to read our Compensation Discussion and Analysis (“CD&A”), which begins on page 38 and describes our pay for performance philosophy and each element of compensation. Our Board of Directors recommends approval, on an advisory basis, of the compensation of our NEOs, as further described in the CD&A and “Proposal 3 – Advisory Vote on Executive Compensation” beginning on page 82.

The graphics below illustrate, for Ms. Honeycutt and separately for the other NEOs in aggregate, the percentage of 2023 compensation that each element of compensation accounted for (based on the amounts reported in the 2023 Summary Compensation Table):

We have set forth below information as of March 15, 2024 relating to each nominee for election as director and each director continuing in office, including: his or her principal occupation and any board memberships at other public companies during the past five years; the other experience, qualifications, attributes or skills that led the Board to conclude that he or she should continue to serve as a director of Veralto; the year in which he or she became a director; and age. Please see “Corporate Governance – Board Selection” for a further discussion of the Board’s process for nominating Board candidates. In the unlikely event a nominee declines or is unable to serve, the proxies may be voted in the discretion of the proxy holders for a substitute nominee designated by the Board, or the Board may reduce the number of directors to be elected.

The Board and our Nominating and Governance Committee believe that it is important that our directors demonstrate the standards and qualifications set out in our Corporate Governance Guidelines, including:

The Nominating and Governance Committee is responsible for identifying and recommending to the Board a slate of nominees for election at each annual meeting of shareholders. Nominees may be suggested by directors, members of management, shareholders or, in some cases, by a third-party search firm engaged by the Committee. The Nominating and Governance Committee considers a wide range of factors when assessing potential director nominees. This includes consideration of the current composition of the Board, any perceived need for one or more particular areas of expertise, the balance of management and independent directors, the need for committee-specific expertise, the evaluations of other prospective nominees and the qualifications of each potential nominee relative to the attributes, skills and experience described above.

When Veralto recruits a director candidate, either a search firm engaged by the Nominating and Governance Committee or a member of the Board contacts the prospect to assess interest and availability. The candidate will then meet with members of the Board and at the same time, the Nominating and Governance Committee with the support of the search firm will conduct such further inquiries as the Committee deems appropriate. A background check is completed before a final recommendation is made to appoint a candidate to the Board.

A shareholder who wishes to recommend a prospective nominee for the Board should notify the Nominating and Governance Committee in writing using the procedures described below under “Other Information – Communications with the Board of Directors” with supporting materials the shareholder considers appropriate. If a prospective nominee has been identified other than in connection with a director search process initiated by the Nominating and Governance Committee, the Committee will make an initial determination as to whether to conduct a full evaluation of the candidate. The Nominating and Governance Committee’s determination of whether to conduct a full evaluation will be based primarily on the Committee’s view as to whether a new or additional Board member is necessary or appropriate at such time, the likelihood that the prospective nominee can satisfy the evaluation factors described above and any other factors as the Committee may deem appropriate. The Nominating and Governance Committee will take into account information provided to the Committee with the recommendation of the prospective candidate and any additional inquiries the Committee may in its discretion conduct or have conducted with respect to such prospective nominee.

Diversity is an important consideration in the Board’s decision-making with respect to Board composition. The Board does not have a formal or informal policy with respect to diversity but believes that the Board, taken as a whole, should embody a diverse set of skills, knowledge, experiences and backgrounds appropriate in light of Veralto’s needs, and in this regard also subjectively takes into consideration the diversity (including with respect to race, ethnicity, gender and national origin) of the Board when considering director nominees. Furthermore, the Board does not make any particular weighting of diversity or any other characteristic in evaluating nominees and directors.

As of the date of this Proxy Statement, 45% of our Board members are diverse from a gender and/or race/ethnicity perspective and our Board includes a broad range of ages and national origins.

The chart that follows illustrates the diverse set of skills, expertise and backgrounds represented on our Board.

Our new director orientation program includes extensive meetings with Veralto management and familiarizes new directors with Veralto’s businesses, strategies, policies and the Veralto Enterprise System; assists them in developing company and industry knowledge to optimize their Board service; and educates them with respect to their fiduciary duties and legal responsibilities and Veralto’s sustainability framework.

The Board has separated the positions of Chair and CEO because it believes that the separation of the positions best enables the Board to ensure that Veralto’s business, risks, opportunities and affairs are managed effectively and in the best interests of shareholders.

The entire Board selects the Chair, and our Board has selected Linda H. Filler, an independent director, as its Chair, in light of Ms. Filler’s independence and her extensive experience with corporate governance, board management, shareholder engagement, risk management and corporate strategy. Ms. Filler’s prior leadership experiences with large global public companies, and in particular her focus on global portfolio strategy, capital allocation and strategic brand development, are a key asset to Veralto.

Moreover, Ms. Filler uses her management and director experience and prior Danaher board tenure and leadership to help ensure that the non-management directors have a keen understanding of Veralto’s business as well as the strategic and other risks and opportunities that the Company may face. This enables the Board to more effectively provide insight and direction to, and exercise oversight of, Veralto’s President and Chief Executive Officer (“CEO”) and the rest of the management team responsible for the Company’s day-to-day business (including with respect to risk management).

As the independent Chair, Ms. Filler leads the activities of the Board, including:

In the event that the Chair is not an independent director, the Corporate Governance Guidelines provide that the independent directors, upon recommendation from the Nominating and Governance Committee, will select by majority vote an independent director to serve as the Lead Independent Director with the authority to:

The Board’s non-management directors meet in executive session following the Board’s regularly-scheduled meetings, with the executive sessions chaired by the independent Chair. In addition, the independent directors meet as a group in executive session at least once a year.

One of the Board’s primary responsibilities is overseeing management’s development and execution of the Company’s strategy.

The Board and Compensation Committee engage with our senior leadership team and human resources executives on a regular basis across a range of human capital management topics. As discussed above, Veralto is committed to attracting, developing, engaging and retaining the best people from around the world to sustain and grow our science and technology leadership. Working with management, the Board and Compensation Committee oversee matters including culture, succession planning and development, compensation, benefits, talent recruiting and retention, associate engagement and diversity, equity and inclusion. The Board reviews the Company’s human capital strategy annually and at other times during the year in connection with significant initiatives and acquisitions, supported by the Compensation Committee’s oversight of our executive and equity compensation programs.

With the support of our Nominating and Governance Committee, our Board also maintains and will annually review both a long-term succession plan and emergency succession plan for the CEO position. The foundation of the long-term CEO succession planning process is a CEO development model consisting of three dimensions: critical experiences, leadership capabilities and personal characteristics/traits. The Board uses the development model as a guide in preparing candidates, and also in evaluating candidates for the CEO and other executive positions at the Board’s annual talent review and succession planning session. At the annual session, the Board will evaluate and compare candidates using the development model, and review each candidate’s development actions, progress and performance over time. The candidate evaluations are supplemented with periodic 360-degree performance appraisals, and the Board also regularly interacts with candidates through Board meeting presentations and at the Company’s annual leadership conferences.

The Board’s role in risk oversight at the Company is consistent with our leadership structure, with management having day-to-day responsibility for assessing and managing our risk exposure and the Board and its committees overseeing those efforts, with particular emphasis on the most significant risks facing the Company. Each of the Audit, Compensation and Nominating and Governance Committees reports to the full Board on a regular basis, including as appropriate with respect to each committee’s risk oversight activities. Since risk issues often overlap, committees from time to time request that the full Board discuss particular risks.

The Board administers its risk oversight responsibilities both through active review and discussion of key risks facing the Company and by delegating certain risk oversight responsibilities to its committees, with oversight responsibility delegated to its committees where it believes each committee’s focused domain expertise will support efficient and effective oversight, and each committee typically has responsibility with respect to risks that are associated with the purpose of, and responsibilities delegated to, that committee. The timeframe over which the Board and its committees evaluate risk typically varies depending on the nature of the risk. From time to time, the Board and/or its committees may consider inputs from outside advisors with respect to certain risks and risk trends. With respect to the manner in which the Board’s risk oversight function impacts the Board’s leadership structure, as described above, our Board believes that Ms. Filler’s management and director experience and prior tenure at Danaher help the Board to more effectively exercise its risk oversight function.

In determining to separate the position of the CEO and the Chair, and in determining the appointment of the Chair of the Board and the chairs of the committees, the Board and the Nominating and Governance Committee considered the implementation of a governance structure and appointment of chairpersons with appropriate and relevant risk management experience that would enable the Company to efficiently and effectively assess and oversee its risks.

The graphic below summarizes the primary areas of risk overseen by the Board and by each of its committees.

The Board oversees the Company’s risk management processes directly and through its committees. In general, the Board oversees the management of risks inherent in the operation of the Company’s businesses, the implementation of its strategic plan, its acquisition and capital allocation program, its capital structure and liquidity and its organizational structure, and also oversees the Company’s risk assessment and risk management policies. In addition, at least on an annual basis or more frequently as deemed appropriate by the Board, the Board will review with senior leaders of the Company, the Company’s enterprise risk management, with particular focus on the enterprise risks and opportunities with the greatest impact and highest probability. Furthermore, at least on an annual basis or more frequently as deemed appropriate by the Board, the Board will review our insurance policies, including our D&O insurance policy, general liability policy, and our cyber liability insurance policy.

At each Board meeting, the Board oversees the Company’s performance and execution against the strategic goals for the Company’s operating segments, overall portfolio, and innovation, including overseeing the corresponding management of risks and opportunities.

The Board oversees the Company’s risk management process, including cybersecurity risks, directly and through its committees. The Audit Committee provides compliance oversight to the Company’s risk assessment and risk management policies, which includes cybersecurity, and the steps management has taken to monitor and mitigate such exposures and risks.

The Company takes a risk-based approach to cybersecurity and has implemented cybersecurity policies throughout its operations that are designed to address cybersecurity threats and incidents.

The Company’s cybersecurity program and policies articulate the expectations and requirements with respect to acceptable use, risk management, data privacy, education and awareness, security incident management and reporting, identity and access management, vendor due diligence, security (with respect to physical assets, products, networks, and systems), security monitoring and vulnerability identification. The cybersecurity program and policies are operated by a dedicated cybersecurity operations team. The program and policies are aligned with the Company’s enterprise risk management program.

The Company’s cyber risk management program identifies, tracks, escalates, remediates, and reports risks at the corporate level and across each operating company. These risk areas include internal, product, vendor, supply chain, and external services leveraged across the Company. These risks are assessed, prioritized, and both tactically and strategically addressed via process, technology, and personnel improvements to ensure ongoing mitigation and tracking.

The Company’s cybersecurity strategy is guided by prioritized risk, identified areas for improvement based on the National Institute for Standards and Technology (NIST) Cybersecurity Framework, and emerging business needs. This strategy is shared with the executive leadership at least annually. The Company maintains a global incident response plan, coupled with a global continuous monitoring program.

The Company’s cybersecurity operations team manages all facets of the security monitoring and global incident program, coordinating with a sourced managed services security provider and internal analysts across our operating companies. All company employees are provided cybersecurity awareness training, which includes topics on the Company’s policies and procedures for reporting potential incidents. The Company’s cybersecurity team is continuously evaluating emerging risks, regulations, and compliance matters and updating the policies and procedures accordingly.

Cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected the Company, including its business strategy, results of operations or financial condition. The Company does not believe that cybersecurity threats resulting from any previous cybersecurity incidents of which it is aware are reasonably likely to materially affect the Company.

The Company’s Chief Information Security Officer (“CISO”), in coordination with Chief Information Officer, is responsible for leading the assessment and management of cybersecurity risks. The current CISO has over 25 years of experience in information security and is a Certified Information Systems Security Professional (CISSP). The CISO reports to the Board, the Audit Committee and management on cybersecurity risk assessment, policies, incident prevention, detection, mitigation, and remediation of cybersecurity incidents on a quarterly or as needed basis.

The Board has delegated to the Audit Committee the responsibility of exercising oversight with respect to the Company’s compliance program and Code of Conduct. Consistent with such delegation, our Chief Legal Officer and Chief Compliance Officer provide periodic reports to the Audit Committee regarding the Company’s compliance program, including updates on complaints and questions received through the Company’s Speak Up! hotline and progress on the Company’s annual compliance training. Our Chief Compliance Officer reports directly to our Chief Legal Officer. In administering our Code of Conduct, our compliance team works closely with other corporate functions, including legal, human resources, internal audit and finance, to ensure and monitor compliance. We evaluate and manage risks relating to compliance as part of our enterprise risk management program.

The Board has delegated to the Nominating and Governance Committee the responsibility of exercising oversight with respect to the Company’s sustainability programming and strategy. Consistent with such delegation, management will provide periodic reports and updates to the Nominating and Governance Committee regarding the Company’s sustainability program and strategies, including the corresponding risks and opportunities, goals, progress, shareholder engagement and disclosure. Additionally, the Audit Committee oversees the Company’s sustainability reporting with respect to climate change risk. We evaluate and manage risks relating to sustainability issues, including climate-related risks, as part of our enterprise risk management program. See page 25 for further discussion on our Sustainability program.

The Company is in the process of establishing its Enterprise Risk Management (“ERM”) Committee (consisting of members of senior management) to lead the Company’s enterprise risk management program. The ERM Committee will inventory, assess and prioritize the most significant risks facing the Company as well as related mitigation efforts. The ERM Committee will periodically update the Audit Committee on its processes and report its findings to the Board at least once a year.

Our disclosure controls and procedures are part of, and therefore are uniformly aligned with, our risk oversight process. The Company’s Disclosure Committee (consisting of members of senior management) is responsible for maintaining and monitoring our disclosure controls and procedures. Each quarter our Disclosure Committee evaluates, with the participation of our principal executive officer and principal financial officer, the effectiveness of our disclosure controls and procedures as of the end of the period and facilitates disclosure in our periodic reports of management's conclusions regarding the effectiveness of our disclosure controls and procedures. Prior to such public disclosure, those evaluations and conclusions are discussed with the Audit Committee in connection with its review of our annual and quarterly reports, including our financial and risk disclosures contained in those reports, enabling the Board and its committees to provide effective risk oversight.

Our classified board structure was approved by the Danaher board prior to the Separation and prior to the appointment of any of our current directors. Our Board met two times in 2023 following the Separation in September 2023. All directors attended at least 80% (and ten of the directors attended 100%) of the total number of meetings of the Board and of the committees of the Board on which they served held during the period they served. Veralto intends to schedule a Board meeting in conjunction with each annual meeting of shareholders and as a general matter expects that the members of the Board will attend the annual meeting.

The membership of each of the Board’s committees as of March 15, 2024 is set forth below. While each of the committees is authorized to delegate its powers to sub-committees, none of the committees did so during 2023. The Audit, Compensation and Nominating and Governance Committees report to the Board on their actions and recommendations at each regularly scheduled Board meeting. Each such committee typically meets in executive session, without the presence of management, at its regularly scheduled meetings.

Our Board recognizes that a rigorous and constructive evaluation process is an essential component of good corporate governance and Board effectiveness. Under the leadership of our Chair, the Nominating and Governance Committee oversees the annual evaluation process and periodically reviews the format of the process to help ensure it is eliciting actionable feedback with respect to the effectiveness of the Board, Board committees and individual directors.

We actively seek and highly value feedback from our shareholders. During 2023, our Investor Relations outreach efforts focused on engaging investors and shareholders in connection with our Separation from Danaher on topics including our business strategy and financial performance, governance and sustainability initiatives. Attendees included members of our senior management and, in some cases, members of our Board. We shared feedback received during these meetings with our Board, informing their decision-making.

Veralto policy also prohibits Veralto directors and employees (including executive officers) from engaging in short sales of Veralto common stock, transactions in any derivative of a Veralto security (including, but not limited to, buying or selling puts, calls or other options (except for instruments granted under a Veralto equity compensation plan)) or any other forms of hedging transactions with respect to Veralto securities.

For an overview of Danaher’s sustainability program, please see “Proxy Statement Summary – Sustainability.”

We use a combination of cash and equity-based compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, the Board and the Nominating and Governance Committee are guided by the following principles:

The Nominating and Governance Committee is responsible for reviewing and making recommendations to the Board regarding non-management director compensation (although the Board makes the final determination regarding the amounts and type of non-management director compensation). The Committee engages FW Cook, the Board’s independent compensation consultant, to prepare regular reports on market non-management director compensation practices and evaluate our program in light of the results of such reports. The Committee typically reviews, and seeks advice from FW Cook regarding, the Company’s non-management director compensation on an annual basis.

The Omnibus Plan limits the amount of cash and equity compensation that we may pay to a non-management director each year. Under the plan terms, an annual limit of $800,000 per calendar year applies to the sum of all cash and equity-based awards (calculated based on the grant date fair value of such awards for financial reporting purposes) granted to each non-management director for services as a member of the Board.

Director cash retainers are paid quarterly in arrears. Director annual equity awards and the Board chair equity retainer are divided equally (based on target award value) between options and RSUs. The options are fully vested as of the grant date. The RSUs vest upon the earlier of (1) the first anniversary of the grant date, or (2) the date of, and immediately prior to, the next annual meeting of Veralto’s shareholders following the grant date, but the underlying shares are not issued until the earlier of the director’s death or the first day of the seventh month following the director’s retirement from the Board. Veralto also reimburses directors for Veralto-related out-of-pocket expenses, including travel expenses.

The table below summarizes the compensation paid by Veralto to the non-management directors for the post-Separation period between October 1, 2023 when Veralto commenced its operations as a standalone company, and December 31, 2023. Jennifer L. Honeycutt serves as a director and executive officer of Veralto but she has not received and does not receive any additional compensation for services provided as a director. In connection with the Separation that occurred on September 30, 2023, the Nominating and Governance Committee and the Board approved a prorated annual equity retainer for non-management directors to reflect the period from October 1, 2023 through May 21, 2024 (the date of our Annual Meeting). Ms. Filler received a similarly-prorated equity award for her role as the Board chair in January 2024.

At least a majority of the Board must qualify as independent within the meaning of the listing standards of the NYSE. The Board has affirmatively determined that Mses. Filler, Colpron and Wallis-Lage and Messrs. Kambeyanda, Lohr, Mitts, Schwieters and Williams are independent within the meaning of the listing standards of the NYSE. Ms. Filler serves as an independent Chair of the Board. The Board concluded that none of these directors possesses any of the bright-line relationships set forth in the listing standards of the NYSE that prevent independence, or any other relationship with Veralto other than Board membership.

The Board assesses on a regular basis, and at least annually, the independence of directors and, based on the recommendation of the Nominating and Governance Committee, makes a determination as to which members are independent.

Veralto’s non-management directors meet in executive session following the Board’s regularly-scheduled meetings. The sessions are chaired by the independent Chair of the Board.

Under our Related Person Transactions Policy, the Nominating and Governance Committee of the Board is required to review and, if appropriate, approve all related person transactions prior to consummation whenever practicable. If advance approval of a related person transaction is not practicable under the circumstances or if our management becomes aware of a related person transaction that has not been previously approved or ratified, the transaction is promptly submitted to the Nominating and Governance Committee. The Nominating and Governance Committee is required to review and consider all relevant information available to it about each related person transaction, and a transaction is considered approved or ratified under the policy if the Nominating and Governance Committee authorizes it according to the terms of the policy after full disclosure of the related person’s interests in the transaction. Related person transactions of an ongoing nature are reviewed annually by the Nominating and Governance Committee. The definition of “related person transactions” for purposes of the policy covers the transactions that are required to be disclosed under Item 404(a) of Regulation S-K under the Exchange Act.

On September 29, 2023, Danaher entered into definitive agreements with Veralto, a wholly owned subsidiary of Danaher at that time, that, among other things, set forth the terms and conditions of the Separation and the distribution of all of Veralto’s outstanding common stock to holders of Danaher common stock (the “Distribution”). The agreements provide a framework for Danaher’s relationship with Veralto from and after the Separation, including the allocation between Veralto and Danaher of Danaher’s and Veralto’s assets, employees, services, liabilities and obligations attributable to periods prior to, at and after the Separation. In connection with the Separation, Danaher and Veralto entered into a Separation and Distribution Agreement (the “Separation Agreement”), an Employee Matters Agreement (the “Employee Matters Agreement”), a Tax Matters Agreement (the “Tax Matters Agreement”), a Transition Services Agreement (the “Transition Services Agreement”), an Intellectual Property Matters Agreement (the “Intellectual Property Matters Agreement”), a DBS License Agreement (the “DBS License Agreement”) and a Framework Agreement (the “Framework Agreement”), each dated as of September 29, 2023.

The Separation Agreement governs the Separation and provides a framework for certain aspects of Veralto’s relationship with Danaher following the Separation and Distribution, including the transfer of assets and assumption of liabilities, assignment or amendment of certain shared contracts, release of claims and indemnification, legal matters, insurance and other matters.

The Transition Services Agreement sets forth the terms and conditions pursuant to which we and our subsidiaries and Danaher and its subsidiaries will provide to each other various services after the Separation. The services to be provided include information technology, facilities, certain accounting and other financial functions, and administrative services. The charges for the transition services generally are expected to allow the providing company to fully recover all out-of-pocket costs and expenses it actually incurs in connection with providing the service, plus, in some cases, the allocated indirect costs of providing the services, generally without profit.

The Tax Matters Agreement governs the respective rights, responsibilities and obligations of both Veralto and Danaher after the Separation with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.

The Employee Matters Agreement sets forth, among other things, the allocation of assets, liabilities and responsibilities relating to employee compensation and benefit plans and programs and other related matters in connection with the Separation, including the treatment of outstanding equity and other incentive awards and certain retirement and welfare benefit obligations. The Employee Matters Agreement also sets forth the general principles relating to employee matters, including with respect to the assignment and transfer of employees, the assumption and retention of liabilities and related assets, workers’ compensation, payroll taxes, regulatory filings, leaves of absence, the provision of comparable benefits, employee service credit, the sharing of employee information and the duplication or acceleration of benefits.

The Intellectual Property Matters Agreement sets forth the terms and conditions pursuant to which Danaher and Veralto have mutually granted certain personal, generally irrevocable, non-exclusive, worldwide, and royalty-free rights to use certain intellectual property. Both parties are able to sublicense their rights in connection with activities relating to their businesses, but not for independent use by third parties.

The DBS License Agreement sets forth the terms and conditions pursuant to which Danaher has granted a non-exclusive, worldwide, non-transferable, perpetual license to us to use the Danaher Business System (what we call Veralto Enterprise System (“VES”)) solely in support of our businesses. We are able to sublicense such license solely to direct and indirect wholly-owned subsidiaries. In addition, both parties have licensed to each other improvements made by such party to VES during the first two years of the term of the DBS License Agreement.

The Framework Agreement was entered into between Beckman Coulter, Inc., a subsidiary of Danaher (“Beckman Coulter”), and Hach Company, a subsidiary of Veralto (“Hach”), and governs intellectual property rights and manufacturing and distribution rights and obligations relating to the businesses’ particle counting analysis product line (the “Particle Counting Product Line”). The agreement provides for an allocation of intellectual property rights between the parties relating to the Particle Counting Product Line; provides that Hach will manufacture for Beckman Coulter certain products relating to the Particle Counting Product Line, upon the terms set forth in the agreement; and provides for an allocation of distribution

rights between the parties relating to the Particle Counting Product Line. The aggregate annual payments under the agreement are not expected to exceed one percent of the annual revenues of either Danaher or Veralto.

Prior to the Separation, we operated as part of Danaher and not as a separate, publicly-traded company. Accordingly, Danaher allocated certain shared costs to us that are reflected as expenses in our audited consolidated and combined financial statements (the “Financial Statements”) in our Annual Report on Form 10-K for the year ended December 31, 2023 for the periods prior to Separation. Management considers the allocation methodologies used by Danaher to be reasonable and to appropriately reflect the related expenses attributable to us for purposes of the Financial Statements; however, the expenses reflected in the Financial Statements may not be indicative of the actual expenses that would have been incurred during the periods presented if we had operated as a separate entity. In addition, the expenses reflected in the Financial Statements may not be indicative of expenses we will incur in the future.

Certain corporate overhead and shared expenses incurred by Danaher and its subsidiaries were allocated to us and are reflected in the Financial Statements. These amounts include, but were not limited to, items such as general management and executive oversight, costs to support Danaher information technology infrastructure, facilities, compliance, human resources and legal functions and financial management and transaction processing including public company reporting, consolidated tax filings and tax planning, Danaher benefit plan administration, risk management and consolidated treasury services, certain employee benefits and incentives and stock based compensation administration. These costs were allocated using methodologies that management believes are reasonable for the item being allocated. Allocation methodologies included our relative share of revenues, headcount or functional spend as a percentage of the total. The amount of corporate expenses allocated to us from Danaher for the year ended December 31, 2023 was $42 million.

In addition to the corporate allocations discussed above, we were allocated expenses related to certain insurance programs Danaher administered on our behalf, including workers’ compensation, property, cargo, automobile, crime, fiduciary, product, general and directors’ and officers’ liability insurance. The insurance costs of these policies were allocated by Danaher to us using various methodologies related to the respective, underlying exposure base.

For the self-insured component of the policies referenced above, Danaher allocated costs to us based on our incurred claims. An estimated liability relating to our known and incurred but not reported claims has also been allocated to us and reflected in the Financial Statements. The amount of insurance programs expenses allocated to us from Danaher for the year ended December 31, 2023 was $8 million.

In addition to the corporate allocations noted above, we were allocated expenses related to the medical insurance programs Danaher administered on our behalf. These amounts were allocated using actual medical claims incurred during the period for the associated employees attributable to us. The amount of medical insurance programs expenses allocated to us from Danaher for the year ended December 31, 2023 was $88 million. In connection with the Separation, we established independent medical insurance programs similar to those previously provided by Danaher.

Certain of our management employees participated in Danaher’s nonqualified deferred compensation programs that permit participants to defer a portion of their compensation, on a pretax basis prior to the Separation. All amounts deferred under this plan are unfunded, unsecured obligations of Danaher and subject to reimbursement by us.

The amount of deferred compensation program expenses allocated to us from Danaher for the year ended December 31, 2023 was $3 million. In connection with the Separation, we established a similar independent, nonqualified deferred compensation program. Accounts in Danaher’s deferred compensation programs held by Veralto employees at the time of the Separation were converted into accounts in the Veralto deferred compensation program

Certain of our revenue arrangements relate to contracts entered into in the ordinary course of business with Danaher and Danaher affiliates. The amount of sales to and purchases from Danaher and its subsidiaries was $28 million and $20 million, respectively for the year ended December 31, 2023.

In connection with the Separation, Danaher incurred $145 million in fees and expenses on our behalf. These costs primarily relate to professional fees associated with preparation of regulatory filings and activities within finance, tax, legal and information technology functions as well as certain investment banking fees and tax costs incurred upon the Separation.

Each of the agreements between Veralto and Danaher and its subsidiaries that were entered into prior to the completion of the Separation, and any transactions contemplated thereby, were deemed to be approved and not subject to the terms of our Related Person Transactions Policy.

There were no other transactions between the Company and any officer, director or nominee for director, or any affiliate of or person related to any of them, since January 1, 2023, of the type or amount required to be disclosed under the applicable SEC rules.

Following the Separation, Danaher no longer owns any of our outstanding common stock. However, we may continue to consider Danaher to be a related party to us, and we may continue to consider our transactions with Danaher as related party transactions.

The following table sets forth as of March 15, 2024 (unless otherwise indicated) the number of shares and percentage of Veralto common stock beneficially owned by (1) each person who owns of record or is known to Veralto to beneficially own more than five percent of Veralto common stock, (2) each of Veralto’s directors and named executive officers, and (3) all executive officers and directors of Veralto as a group.

The Audit Committee on behalf of Veralto has selected Ernst & Young LLP, an international accounting firm of independent certified public accountants, to act as the independent registered public accounting firm for Veralto and its consolidated subsidiaries for the year ending December 31, 2024. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions. Although shareholder approval of the selection of Ernst & Young LLP is not required by law, Veralto’s Board believes that it is advisable to give shareholders an opportunity to ratify this selection. If this proposal is not approved by Veralto’s shareholders at the Annual Meeting, the Audit Committee will reconsider its selection of Ernst & Young LLP. Even if the selection of Ernst & Young LLP is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of Veralto and its shareholders.

Concurrently with the Separation, the Audit Committee selected Ernst & Young LLP to act as the independent registered public accounting firm for Veralto and its consolidated subsidiaries for the year ended December 31, 2023. Aggregate fees for professional services rendered by our independent registered public accounting firm, Ernst & Young LLP, for 2023 following the Separation are set forth in the table below. For the year ended December 31, 2022, we did not pay any fees for professional services to Ernst & Young LLP. Prior to the Separation, Danaher paid any audit, audit related, tax or other fees related to Veralto’s businesses.

The Audit Committee has considered whether the services rendered by the independent registered public accounting firm with respect to the fees described above are compatible with maintaining such firm’s independence and has concluded that such services do not impair such firm’s independence.

The Audit Committee is currently composed of three independent directors and operates under a charter adopted by the Board on August 24, 2023. The SEC and the NYSE have established standards relating to audit committee membership and functions. With regard to such membership standards, the Board has determined that each of John T. Schwieters, Shyam P. Kambeyanda and Heath A. Mitts meets the requirements of an “audit committee financial expert” as defined by the SEC.

The Audit Committee assists the Board in overseeing the quality and integrity of Veralto’s financial statements, the effectiveness of Veralto’s internal control over financial reporting, the qualifications, independence and performance of Veralto’s independent registered public accounting firm, the performance of Veralto’s internal audit function, Veralto’s compliance with legal and regulatory requirements, Veralto’s major financial risk exposures, significant legal, compliance, reputational, cybersecurity and privacy risks and overall risk assessment and risk management policies, and Veralto’s swaps and derivatives transactions and related policies and procedures.

The Audit Committee is directly responsible for the appointment, compensation and oversight of the independent registered public accounting firm retained to audit Veralto’s financial statements and has appointed Ernst & Young LLP as Veralto’s independent registered public accounting firm for 2024. The Audit Committee evaluates Ernst & Young’s performance at least annually. In evaluating Ernst & Young, the Audit Committee took into consideration a number of factors, including the firm’s tenure, independence, global capability and expertise and performance. Ernst & Young previously served as Veralto’s independent registered public accounting firm for 2023. The Audit Committee periodically considers the advisability and impact of rotating our independent registered public accountants. In conjunction with the mandated rotation of Ernst & Young’s lead engagement partner every five years, the Audit Committee (including its chair) are directly involved in the selection of Ernst & Young’s new lead engagement partner. The Audit Committee is also responsible for the audit fee negotiations associated with Veralto’s retention of Ernst & Young. Veralto’s Board of Directors and Audit Committee believe they have undertaken appropriate steps with respect to oversight of Ernst & Young’s independence and that the continued retention of Ernst & Young to serve as Veralto’s independent registered public accounting firm is in the best interests of Veralto and its shareholders.

In fulfilling its responsibilities, the Audit Committee has reviewed and discussed with Veralto’s management and Ernst & Young Veralto’s audited consolidated and combined financial statements.

The Audit Committee has discussed with Ernst & Young those matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition, the Audit Committee has received the written disclosures and the letter from Ernst & Young required by the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and has discussed with Ernst & Young its independence. The Audit Committee has concluded that Ernst & Young’s provision of non-audit services as described in the table above is compatible with Ernst & Young’s independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited consolidated and combined financial statements for Veralto for the fiscal year ended December 31, 2023 be included in Veralto’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC.

The following section discusses and analyzes the compensation provided to each of the executive officers set forth in the Summary Compensation Table below, also referred to as the NEOs. The content of this Compensation Discussion and Analysis (“CD&A”) is organized into six sections:

We completed our Separation from Danaher and our launch as an independent, publicly traded company on September 30, 2023.

Prior to Separation, compensation arrangements for our associates, including our NEOs, were determined by Danaher in accordance with Danaher’s policies and those of the Danaher Compensation Committee. In connection with the hiring during 2023 of Mr. Ralhan, Senior Vice President and Chief Financial Officer, and Ms. Stein, Senior Vice President and Chief Legal Officer, and the re-hiring of Ms. Aquino, Senior Vice President, Water Quality, total compensation arrangements, including any sign-on bonuses or equity grants negotiated to offset any forfeited compensation or other incentive compensation at their respective prior employers, were established for such executive officers in anticipation of the Separation and the roles to be assumed by each following the Separation. The total compensation arrangements for Ms. Honeycutt and Mr. Byström in 2023 were determined in accordance with Danaher’s regular practice for such executives and adjusted as necessary in connection with the Separation.

In order to provide a view of NEO compensation for all of 2023, this CD&A and the corresponding compensation tables and narrative include information regarding compensation paid to the NEOs and decisions made by Danaher prior to the Separation.

In connection with the Separation, our Board formed its own compensation committee (the “Compensation Committee”). Following the Separation, the Compensation Committee has been responsible for determining our compensation programs and policies for our executive offers and approving the compensation levels applicable to them. In such capacity, our Compensation Committee:

With the goal of building long-term value for our shareholders, we have an executive compensation program designed to:

To achieve these objectives our compensation program combines annual and long-term components, cash and equity, and fixed and variable elements, with a bias toward long-term equity awards tied closely to shareholder returns and subject to significant vesting periods. Our executive compensation program is designed to reward our executive officers for helping increase long-term shareholder value, achieving annual business goals and building long-term careers with Veralto.

The markets in which we operate are competitive, with demand sometimes exceeding the supply of talent, resulting in significant increases in compensation paid by the companies with whom we compete for this talent. The same conditions exist in the market for executive-level talent that can provide innovative leadership while managing at a global scale across multiple complex businesses. As a result, we will proactively assess our executive compensation program to ensure it remains competitive in light of market conditions.

Immediately prior to the Separation, Veralto was a wholly owned subsidiary of Danaher. Prior to the Separation, Ms. Honeycutt served as an executive officer of Danaher and, as such, her pre-Separation compensation, including adjustments to be made upon completion of the Separation, was determined and approved by the Danaher Compensation Committee. Each of the other Veralto named executive officers was employed by Danaher before the Separation, but none were executive officers of Danaher. The pre-Separation target compensation of each of the Named Executive Officers other than Ms. Honeycutt was generally determined by the officer’s manager with input from Danaher’s CEO in certain cases, except that their equity awards were ultimately subject to approval by the Danaher Compensation Committee. Following the Separation, our Compensation Committee has been reviewing and changing the programs, objectives and framework of the executive compensation policies of Veralto.

In 2023, the Compensation Committee created a post-Separation executive compensation program tailored to our new company and designed to cover the transitional period immediately post-Separation for the three-month period between October 1, 2023 and December 31, 2023.

The Compensation Committee ratified an annual salary top-up for Ms. Honeycutt agreed to by the Danaher Compensation Committee to align her compensation to be more in line with that of the peer group CEOs.

The Compensation Committee designed a 2023 post-Separation annual compensation plan weighted 60% towards the Company Financial Factor (“CFF”). The CFF was based on two equally weighted metrics, Adjusted Operating Profit and Core Revenue Growth. The financial metrics were designed to reward our executives for performance that was within their control over the shortened performance period. The remaining 40% of the program was weighted towards each individual executive officer’s Personal Performance Factor (“PPF”). In addition, the Compensation Committee was responsible for approving the payout of annual incentive compensation for the pre-Separation period.

The Compensation Committee did not design a 2023 long-term incentive program as each of the Veralto executive officers had already received their annual equity grant while employed by Danaher in the pre-Separation portion of 2023. However, the Compensation Committee ratified a one-time equity award to Ms. Honeycutt agreed to by the Danaher Compensation Committee in recognition of the equity opportunity foregone with the Separation and due to her effort in standing up a

new company as its CEO. In addition, the Compensation Committee approved a new hire grant for Mr. Ralhan that had been negotiated as part of his employment arrangements with Danaher prior to the Separation.

The Compensation Committee designed a long-term compensation plan that balances stock options, restricted stock units, and performance stock units in order to motivate the executives while encouraging long-term, sustainable growth aligned with Veralto’s shareholders. The performance stock units are based on Veralto’s relative market performance and are balanced with a return on invested capital modifier.

Together, the elements of the 2024 annual and long-term executive compensation programs are designed to enforce strong linkages between (1) pay and performance, (2) the interests of our shareholders and the interests of our executive officers, and (3) Veralto’s strategic plan and executive compensation program.

The Compensation Committee has designed the executive compensation program as a baseline for continued success. The Compensation Committee expects to continue to improve the executive compensation program as appropriate, including alignment with emerging trends that satisfy a clear business rationale for Veralto, but also believes that consistent use of best-practice designs is important in effectively communicating key messages to our executives.

We provide our shareholders the opportunity to cast an annual advisory vote with respect to our NEO compensation as disclosed in our annual proxy statement (the “say-on-pay proposal”), as well as an advisory vote relating to the frequency of future shareholder advisory votes on our NEO compensation as disclosed in our annual proxy statement (the “say-on-frequency proposal”). Our Annual Meeting on May 21, 2024 will be the first opportunity where shareholders can vote on our say-on-pay proposal and our say-on-frequency proposal.

The chart below summarizes key information with respect to each pay element represented in Veralto’s 2023 post-Separation executive compensation program:

Our Compensation Committee recognizes that the success of our executive compensation program over the long term requires a robust framework of compensation governance. As a result, the Compensation Committee has established a process to regularly review external executive compensation practices and trends. The Compensation Committee has incorporated market best practices into the Veralto executive compensation program:

Risk-taking is a necessary part of growing a business, and prudent risk management is necessary to deliver long-term, sustainable shareholder value. The Compensation Committee believes that Veralto’s executive compensation program supports the objectives described above without encouraging inappropriate or excessive risk-taking. In reaching this conclusion, the Compensation Committee considered in particular the following risk-mitigation attributes of our executive compensation program.

Prior to separation, Ms. Honeycutt served as an executive officer of Danaher and, as such, her pre-Separation compensation was determined and approved by the Danaher Compensation Committee. Each of the other Veralto NEOs was employed or hired by Danaher before Separation, but none were executive officers of Danaher. The pre-Separation target compensation for our NEOs hired or re-hired during 2023, including any sign-on bonuses or equity grants negotiated to offset any foregone compensation or other incentive compensation at their respective prior employers, was determined by the Danaher Compensation Committee. The pre-Separation target compensation of each of the remaining NEOs was generally determined by the officer’s manager with input from Danaher’s CEO in certain cases, except that their equity awards were ultimately subject to approval by the Danaher Compensation Committee.

The graphics below illustrate, for Ms. Honeycutt and separately for the other NEOs in aggregate, the percentage of 2023 compensation that each element of compensation accounted for (based on the amounts reported in the 2023 Summary Compensation Table):

In February 2023, the Danaher Compensation Committee subjectively determined the target dollar value of annual equity compensation to be delivered to Ms. Honeycutt in 2023. The pre-Separation target compensation of each of the NEOs other than Ms. Honeycutt was generally determined by the officer’s manager with input from Danaher’s CEO in certain cases, except that their equity awards were ultimately subject to approval by the Danaher Compensation Committee. For all equity awards granted on or after Separation, our Compensation Committee determined the target dollar value of each award, taking into account the following factors (none of which was assigned a particular weight by the Committee):

In determining Ms. Honeycutt’s annual equity compensation in 2023, the Danaher Compensation Committee and the Compensation Committee considered in particular Ms. Honeycutt’s effort to successfully separate Veralto from Danaher. In connection with the Separation, the Compensation Committee ratified increases to Ms. Honeycutt’s compensation level agreed to by Danaher to reflect her role as CEO and Ms. Honeycutt was awarded both an annual top-up grant to increase her compensation to a level commensurate with the peer group CEOs, as well as a one-time award in lieu of the value forfeited in connection her departure from Danaher and its executive compensation program and in recognition of her effort to separate and stand up Veralto.

With respect to each of the NEO 2023 annual equity awards, one-half of the target award value was delivered as stock options and one-half as RSUs (please see “Grants of Plan-Based Awards” table for the grant date fair value of the awards granted to each NEO). For all Veralto NEOs, the Danaher Compensation Committee believed that the combination of stock options and RSUs effectively balances the goals of incentivizing and rewarding shareholder value creation while supporting their talent retention objectives. The Danaher executive compensation program normally awards PSUs, but the Danaher Compensation Committee determined that RSUs were more appropriate for Ms. Honeycutt given the shortened performance period due to the anticipated Separation. Stock options inherently incentivize shareholder value creation since option holders realize no value unless a company’s stock price rises after the option grant date. Beginning in 2024, the Compensation Committee designed an equity award program with a mix that includes 50% PSUs, which incentivize shareholder value creation as the value of PSUs is tied directly to Veralto’s relative TSR performance. Our 2023 NEO stock options and RSUs vest over four years. In 2024, the NEO PSUs are subject to a three-year performance period. In aggregate, these periods promote stability and encourage officers to take a long-term view of our performance.

Beginning in 2024, the Compensation Committee determined that executive officer PSUs will be subject to two performance criteria:

The number of shares Veralto common stock that vest pursuant to the PSU award is based primarily on the Company’s total shareholder return (TSR) ranking relative to the S&P 500 Index over an approximately three-year performance period. The Compensation Committee established threshold, target and maximum relative TSR performance levels and established a payout percentage curve that relates each level of performance to a payout expressed as a percentage of the target PSUs, as illustrated in the table below:

The payout percentages for performance between the performance levels indicated above are determined by linear interpolation. The Compensation Committee selected the S&P 500 Index as the relative TSR comparator group because the index consists of a broad and stable group of companies that represents investors’ alternative capital investment opportunities, reinforcing the linkage between our executive compensation program and the long-term interests of our shareholders.

The Company’s three-year average ROIC performance beginning with the year of grant, compared to the Company’s ROIC for the year immediately preceding the year of grant (the “baseline year”), can increase or decrease the number of shares that would otherwise vest by 10% (but cannot cause the payout percentage to exceed 200%), as illustrated in the table below:

Notwithstanding the above, no more than 100% of the target PSUs will vest if the Company’s absolute TSR performance for the performance period is negative (regardless of how strong the Company’s performance is on a relative basis).

All outstanding Danaher equity held by Veralto associates as of the Separation was converted into Veralto equity using a conversion ratio that maintained all value and terms of the original Danaher equity.

These RSUs remain subject to a further mandatory holding period that runs through 2025 for the 2021 grant and 2026 for the 2022 grant.

The diagram below illustrates the 2023 post-Separation annual incentive award opportunities the Compensation Committee determined for the Company’s NEOs in October 2023 under the Omnibus Plan, each element of which is further described below.

Prior to separation, Ms. Honeycutt served as an executive officer of Danaher and, as such, her pre-Separation compensation was determined and approved by the Danaher Compensation Committee. Each of the other Veralto named executive officers was employed by Danaher before Separation, but none were executive officers of Danaher. The pre-Separation target compensation of each of the Named Executive Officers other than Ms. Honeycutt was generally determined by the officer’s manager with input from Danaher’s CEO in certain cases.

In determining the target bonus percentage for Ms. Honeycutt, the Danaher Compensation Committee considered the relative complexity and importance of the executive’s position and the amount of annual cash incentive compensation that peer companies typically pay to executives serving in comparable roles. Each of the other Veralto NEO’s target bonus was generally determined by the officer’s manager with input from Danaher’s CEO in certain cases. The Compensation Committee determined the executive officer’s target bonus percentages for 2024.

Following the end of 2023, the Compensation Committee used its best judgment and determined for each NEO a Personal Payout Percentage between 0% and 200%. The Committee believes that its ability to exercise discretion in connection with the annual executive cash incentive compensation awards is an important element in reaching balanced compensation decisions that are consistent with our strategy, reward both current year performance and sustained long-term value creation, and reward achievements that advance our sustainability strategy. The Committee’s ability to exercise discretion:

Without assigning any particular weight to any individual factor, the Committee took into account the executive’s execution against their personal performance objectives for the year, the executive’s performance with respect to each of the Company’s four “Core Behaviors” (which are a set of standards and behaviors that Veralto associates are expected to aspire to and are assessed against), the executive’s overall performance for the year, the size of the Company Payout Percentage for the year, and the amount of annual cash incentive compensation that peer companies typically pay to executives serving in comparable roles. Without limiting the foregoing, with respect to the executive officer team’s 2023 performance as a whole, the Committee considered in particular the Company’s 2023 financial performance; the Company’s successful separation from Danaher to create a separate, publicly-traded company; and the Company’s proactiveness during the year in identifying and executing upon opportunities to invest in the Company’s future financial and competitive positioning. The average Personal Payout Percentage of the NEOs (other than Ms. Honeycutt) was 131%.

The Company awarded Ms. Honeycutt a Personal Payout Percentage of 165% for 2023, based primarily on the Company’s financial and operational performance; progress toward the Core Value Driver results for Pall Industrial, Danaher High-Growth Markets and the Veralto businesses; progress toward its DE+I representation and talent development objectives; progress toward separating the Veralto business to create a separate, publicly-traded company; and progress in further

enhancing the Company’s strategy development processes, strategic direction , Environmental, Sustainability & Governance structure and growth capabilities .

The post-Separation Company Payout Percentage is formulaic, based on the Company’s 2023 performance against the Adjusted Operating Profit and Core Revenue Growth metrics described above and below and in Appendix A (the “Metrics”). The Committee weighted the two metrics evenly for the post-Separation year and chose the metrics in part because they were the most predictable and relevant metrics for the 3-month post-Separation period in 2023.

For each of the Metrics, the Committee established threshold, target and maximum levels of Company performance, as well as a payout percentage curve that related each level of performance to a payout expressed as a percentage of target bonus. The payout percentage was 0% for below-threshold performance, 50% for threshold performance, 100% for target performance and 200% for performance that equaled or exceeded the maximum. The payout percentages for performance between threshold and target, or between target and maximum, respectively, were determined by linear interpolation.

In determining the target performance level and payout percentage curve for the Metrics, the Committee considered historical performance data for the Company and its peer group, analyst estimates for the Company’s peer group, the Company’s annual budget and macroeconomic/end-market trends. For each Metric, the Committee set the performance target at a level it believed would represent attractive financial performance within our industry and would require a high (but achievable) level of Company performance, while requiring what it believed would be outstanding performance to achieve the maximum payout level.

Following the end of 2023, the post-Separation Company Payout Percentage was calculated as follows:

Core to the determination of the 2023 performance factors was the question of how best to address the Separation of Veralto from Danaher during the year. The Committee agreed to utilize blended performance factors for each participant weighted towards their time in each plan: pre-Separation (January 1 or time of hire through September 29, 2023) and post-Separation (September 30, 2023 through December 31, 2023) results. On that basis, the performance factors used in calculating Veralto’s Executive Officer incentive compensation were as such below:

The Company Payout Percentage and Personal Payout Percentage were calculated for each NEO, weighted accordingly and added to yield the officer’s Composite Payout Percentage. The Composite Payout Percentage was prorated with their respective payout percentage from the executive’s plan prior to separation and multiplied by the NEO’s target bonus amount to yield the executive’s award amount for the year. The 2023 annual cash incentive compensation awards for each of the NEOs are set forth in the Summary Compensation Table.

Prior to separation, Ms. Honeycutt served as an executive officer of Danaher and, as such, her pre-Separation compensation was determined and approved by the Danaher Compensation Committee. Each of the other Veralto named executive officers was employed by Danaher before Separation, but none were executive officers of Danaher. The pre-Separation target compensation of each of the Named Executive Officers other than Ms. Honeycutt was generally determined by the officer’s manager with input from Danaher’s CEO in certain cases.

As part of the Separation, the Compensation Committee ratified increases agreed to by Danaher to Ms. Honeycutt's base salary to $1 million, commensurate with the base salaries of the peer group CEOs.

The Compensation Committee reviewed base salaries for executive officers in February of 2024. The Compensation Committee used each officer’s prior base salary as the initial basis of consideration and then considered the individual factors described under “– Named Executive Officer Compensation Framework,” focusing on the relative complexity and importance of the executive’s role within Veralto, the market value of the executive’s role and the executive’s performance in the prior year where applicable (without giving specific weight to any particular factor). Given that base salary is one of the elements in the formula for determining annual cash incentive compensation, the Compensation Committee also considered how changes in base salary would impact annual cash incentive compensation.

We have entered into Proprietary Interest Agreements with each of our US-based NEOs that include post-employment restrictive covenant obligations. Veralto’s Senior Leader Severance Pay Plan, which each of the US-based NEOs participates in, provides for severance payments under certain circumstances. We believe the post-employment restrictive covenant obligations included in these agreements are critical in protecting our proprietary assets, and that the severance payments payable upon a termination without cause are generally commensurate with the severance rights our peers offer executives in comparable roles. The Compensation Committee adopted change-in-control provision in the US Senior Leader Severance Pay Plan in 2023 in order to allow covered executives to focus on maximizing shareholder value without the potential for distraction caused by the executive’s personal circumstances that could be impacted by a corporate transaction, in alignment with standard market practice.

As discussed in more detail under “Summary of Employment Agreements and Plans – Supplemental Retirement Program,” each US NEO (1) participates in either the Executive Deferred Incentive Program (EDIP), or the Excess Contribution Program (“ECP”), and (2) is eligible to participate in the voluntary Deferred Compensation Plan (“DCP”):

All of our US-based executives are eligible to participate in our U.S. employee benefit plans, including our group medical, dental, vision, disability, accidental death and dismemberment, life insurance, flexible spending and 401(k) plans. These plans are generally available to all U.S. full-time and certain part-time employees and do not discriminate in favor of executive officers. In addition, the Committee makes certain perquisites available to the NEOs; please see the footnotes to the Summary Compensation Table for additional details. The Compensation Committee has also adopted a policy prohibiting any tax reimbursement or gross-up provisions in our executive compensation program (except under a policy applicable to management employees generally such as a relocation policy).

To successfully separate Veralto, Danaher management recommended a number of one-time cash and equity awards in regards to sign on actions for newly hired associates and promotions for Danaher associates in connection with career advancements to the Veralto executive team. These included new hire cash and equity awards to Mr. Ralhan and Mses. Aquino and Stein and a promotional equity award to Mr. Byström. Mr. Ralhan’s $2 million new hire equity award was negotiated by Danaher management, but deferred until November 2023 and ultimately reviewed and ratified by the Compensation Committee. His $1.5 million new hire cash award vests over two tranches, with the first $750,000 paid out with the beginning of his employment in June 2023 and the second $750,000 to be paid out one year thereafter. Ms. Aquino received a $625,000 cash sign-on award in January 2023 and a $3.5 million new hire equity award in February 2023. Mr. Byström received a $1 million one-time promotional equity grant in July 2023. Ms. Stein received a $250,000 cash sign-on award in June 2023 and a one-time $2.1 million new hire equity award in July 2023.

The Compensation Committee considered what the Danaher management team and Danaher Compensation Committee had recommended to the Veralto executives in its post-Separation compensation determinations. At Separation, the Compensation Committee ratified increases agreed to by Danaher to Ms. Honeycutt’s annual salary and awarded her an annual equity top-up negotiated and recommended the Danaher Compensation Committee to increase Ms. Honeycutt’s compensation to be more in line with that of the peer group CEOs. In addition, the Committee also ratified a one-time equity grant to Ms. Honeycutt agreed to by the Danaher Compensation Committee in recognition of the equity opportunity foregone with the Separation and in recognition of her effort in standing up a new company.

The Committee does not target a specific competitive position versus the market or peer companies in determining the compensation of our executives because in light of the Company’s diverse mix of businesses, strict targeting of a specified compensation posture would not appropriately reflect the unique nature of our business portfolio or the degree of difficulty in leading the Company and key businesses and functions. However, the Committee believes it is important to clearly understand the relevant market for executive talent to inform its decision-making and ensure that our executive compensation program supports our recruitment and retention needs and is fair and efficient. As a result, the Committee has worked with FW Cook to develop a peer group for purposes of assessing competitive compensation practices, and periodically reviews compensation data for the peer group derived from publicly filed proxy statements. The Committee will periodically review the companies included in the peer group to ensure that the peer group remains appropriate.

Prior to December 2023, the Company’s peer group (for purposes of all 2023 executive compensation decisions) was established by the Danaher Compensation Committee and consisted of the companies set forth below:

The Danaher Compensation Committee selected companies for inclusion in this peer group based on (1) the extent to which they compete with us in one or more lines of business, for executive talent and for investors, and (2) comparability of revenues, market capitalization, EBITDA, total assets and number of employees. As of October 2023, and based on Standard & Poor’s Capital IQ database, Veralto’s ranking within this peer group was 35th percentile for revenue, 47th percentile for market capitalization, 59th percentile for net income (from continuing operations excluding extraordinary items), 48th percentile for EBITDA, and 51st percentile for employees.

In December 2023, the Compensation Committee evaluated the existing peer group with the assistance of FW Cook (using the same selection criteria described above) and added Agilent Technologies. The Compensation Committee made this update to the peer group to better reflect the Company’s current size and portfolio of businesses. Set forth below is the Company’s peer group as of December 2023:

The table below sets forth for this updated peer group and Veralto’s information regarding revenue, net income and EBITDA (based on the most recently reported 12-months for each company as of October 2, 2023), market capitalization (as of October 2, 2023) and employee headcount (based on each company’s most recent fiscal year end as of October 2, 2023), in each case derived from the Standard & Poor’s Capital IQ database.

The peer group compensation data that the Danaher Compensation Committee reviewed in 2023 in connection with its named executive officer compensation decision for Ms. Honeycutt estimated the 25th, median and 75th percentile positions among our peers with respect to base salary, annual cash incentive compensation (target and actual), total annual cash compensation (target and actual), long-term incentive compensation, total direct compensation (target and actual), all

other compensation, annual change in pension value and above-market interest on non-qualified deferred compensation, and actual total compensation, in each case with respect to each respective NEO position. The Compensation Committee reviewed the same analysis in December 2023 and February 2024.

The Compensation Committee will continue to periodically review the companies included in the peer group to ensure that the peer group remains appropriate.

Veralto’s compensation program is grounded on the principle that each executive must consistently demonstrate exceptional personal performance in order to remain a Veralto executive. Within the framework of this principle and the other objectives discussed above, the Compensation Committee will exercise its judgment in making executive compensation decisions. The factors that will generally shape particular executive compensation decisions (none of which are assigned any particular weight by the Compensation Committee) are the following:

The Compensation Committee will consider the factors above within the context of the then-prevailing economic environment and may adjust the terms and/or amounts of compensation accordingly so that they continue to support our objectives.

For a description of the role of the Company’s executives and the Compensation Committee’s independent compensation consultant in the executive compensation process, please see “Corporate Governance – Board of Directors and Committees of the Board – Compensation Committee.”

Equity awards are granted under the Omnibus Plan, which is described in “Summary of Employment Agreements and Plans – 2023 Omnibus Incentive Plan.” Executive equity awards will typically be granted in of one of the Company’s four, standardized grant dates during the year, and may also be granted at the time of an executive hire or promotion or upon identification of a specific retention concern. The grant date is either the date of grant approval or a specified date subsequent to the approval date. The timing of equity awards has not and will not be coordinated with the release of material non-public information. As part of the Separation, Ms. Honeycutt received the first ever Veralto equity awards on the first market day of the Company’s trading on October 2, 2023. The Compensation Committee approved annual equity

awards to executive officers at the Committee’s regularly scheduled meeting in February 2024, when the Committee reviewed the performance of the executive officers and determined most or all of the other components of executive compensation.

The target dollar value attributable to RSUs has been translated into a number of RSUs based on fair market value of our common stock. The target value attributable to stock options has been translated into a number of options based on the Black Scholes value used in the Company’s financial statements with respect to the particular grant. The exercise price for stock option awards granted under the Omnibus Plan equals the closing price of Veralto common stock on the date of grant (or on the immediately preceding trading day if the date of grant is not a trading day).

To further align management and shareholder interests and discourage inappropriate or excessive risk-taking, our stock ownership policy requires each executive officer to obtain a substantial equity stake in Veralto within five years of their appointment to an executive position, as follows:

Once an executive officer has acquired a number of Company shares that satisfies the applicable ownership multiple, such number of shares then becomes the officer’s minimum ownership requirement (even if the officer’s salary increases or the fair market value of such shares subsequently changes) until the officer is promoted to a higher level. As Veralto was only separated three months prior to the end of the year, we have not yet conducted our annual stock ownership review (which will normally take place over the summer). Our executive officers will have five years from the time of Separation to meet the guidelines. Any future executive officers would have five years from the time of their appointment to meet the guidelines.

Veralto’s Board has adopted a policy that prohibits any director or executive officer from pledging as security under any obligation any shares of Veralto common stock that the director or officer directly or indirectly owns and controls (other than shares pledged as of the date the policy was adopted), and provides that pledged shares of Veralto common stock do not count toward Veralto’s stock ownership requirements. No NEO has pledged any shares of Veralto common stock.

Under our insider trading policy, Veralto directors and employees (including executive officers) are prohibited from engaging in short sales of Veralto common stock, transactions in any derivative of a Veralto security (including, but not limited to, buying or selling puts, calls or other options (except for instruments granted under a Veralto equity compensation plan)) or any other forms of hedging transactions with respect to Veralto securities.

To further discourage inappropriate or excessive risk-taking, our Board adopted a rigorous compensation recoupment (or clawback) policy at Separation applicable to our executive officers who are subject to the reporting requirements of Section 16 under the Exchange Act (“covered persons”), including our NEOs, effective October 2, 2023. The policy was adopted in accordance with SEC rules and NYSE listing standards, which mandate the recovery of certain erroneously paid performance-based incentive compensation that may be received by our current and former Section 16 officers on or after October 2, 2023, if the Company has a required accounting restatement during the three completed fiscal years immediately prior to the fiscal year in which a financial restatement determination is made. Pursuant to the policy, the Board will, in addition to all other remedies available to us, require reimbursement or payment to us of any erroneously paid performance-based incentive compensation awarded to any covered person within the three-year look back period. Also pursuant to the policy, the Board has the right to require reimbursement of the entire amount of any such incentive compensation payment from any covered person whose fraud or other intentional misconduct in the Board’s judgment alone or with others caused the accounting restatement. In addition, the stock plans in which our executive officers participate contain provisions for recovering awards upon certain circumstances. Under the terms of our Omnibus Plan, if an employee is terminated for gross misconduct, the administrator may cause the participant’s unexercised or unvested equity awards to be partially or completely forfeited. In addition, under the terms of our EDIP, if termination of an employee’s participation in the plan resulted from the employee’s gross misconduct, the administrator may determine that the employee’s vesting percentage is zero with respect to all balances that were contributed by us.

Section 162(m) generally disallows a tax deduction to public corporations for compensation in excess of $1 million paid for any fiscal year to certain executive officers. We review the tax impact of our executive compensation on the Company as well as on the executive officers. In addition, we review the impact of our compensation programs against other considerations, such as accounting impact, shareholder alignment, market competitiveness, effectiveness and perceived value to employees. Because many different factors influence a well-rounded, comprehensive and effective executive compensation program, some of the compensation we provide to our executive officers is not deductible under Section 162(m).

The Compensation Committee of Veralto Corporation’s Board of Directors has reviewed and discussed with management the Compensation Discussion and Analysis set forth above and, based on such review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

The following table sets forth the 2023 compensation of (i) our President and Chief Executive Officer, (ii) our Senior Vice President and Chief Financial Officer, and (iii) our three other most highly compensated executive officers who were serving as executive officers as of December 31, 2023, known as our “named executive officers.”