Ferguson Enterprises (FERG) DEF 14ADefinitive proxy

Dear fellow shareholders,

On behalf of the board of directors of Ferguson Enterprises Inc. (the “Board”), you are cordially invited to attend the first annual meeting of stockholders of Ferguson Enterprises Inc. (the “Company”), the new U.S. parent company of the Ferguson group of companies, on Thursday, December 5, 2024 at 9:00 a.m. Eastern Time (the “2024 Annual Meeting”).

Completion of Our Journey to the U.S.

Since 2019, we have considered North America to be the best long-term location for Ferguson and have worked methodically and transparently with shareholders on this transformative journey, obtaining an additional listing on the New York Stock Exchange in 2021 and moving this to be our primary listing venue in 2022. Since August 1, 2023, Ferguson has been considered a U.S. domestic issuer under the applicable U.S. Securities and Exchange Commission rules, and, in May 2024, Ferguson plc held an extraordinary general meeting at which shareholders approved a new corporate structure that completed the final step in our journey by domiciling Ferguson’s ultimate parent company in the U.S.

As we look to the future, we believe the new corporate structure will only serve to strengthen shareholder value as the move better aligns our headquarters and governance with our operations and leadership.

Delivering on Our Strategic Priorities

Ferguson is the largest value-added distributor serving the specialized professional in our $340B residential and non-residential North American construction market. We remain focused on our vision to be the ultimate project success company, helping to make our customers’ complex projects simple, successful and sustainable through living by our values: Safety; Integrity; Service; Teamwork; and Impact.

Engaging with Our Shareholders

The Board is committed to maintaining meaningful shareholder engagement. Over the past year, we have engaged with several institutional investors and acted on feedback received from shareholders on key governance matters related to the Company’s new corporate structure. Significantly, in light of the results of the advisory vote at the extraordinary general meeting on certain matters relating to the Company’s proposed organizational documents, the Board approved revisions to the organizational documents to align with our shareholders’ values.

We look forward to continuing an open dialogue with shareholders as Ferguson progresses on its journey.

Strong Governance Practices

The Board has reviewed the policies and governance practices that were in place for Ferguson plc and has taken that strong governance framework and further enhanced and aligned it with U.S. best practice. Further details of these policies and practices are set out on pages 18-21 of the accompanying Proxy Statement.

The slate of Director nominees contains a broad range of experience and skills from a variety of industries and advisory roles which complement each other. This year, we have 11 Directors standing for election, including nine legacy Directors from Ferguson plc’s board of directors, as well as two new independent Non-Employee Directors, Rekha Agrawal and Rick Beckwitt.

Rekha Agrawal has extensive experience leading global businesses focused both in services and manufacturing. Rick Beckwitt is an experienced executive with broad financial, operational and public company experience. I am confident that they will contribute valuable insight and specialist skills to the Board.

Thomas Schmitt and Nadia Shouraboura will step down as Non-Employee Directors at the 2024 Annual Meeting. Tom and Nadia have made significant contributions to the Board during their tenures and we thank them for their service. We wish them well for the future.

A summary of the skills and experience of each Director proposed for election is set out on page 17 of the accompanying Proxy Statement.

Your Vote Matters

Further details about the 2024 Annual Meeting and voting can be found on pages 85-90 of the accompanying Proxy Statement. You are encouraged to appoint myself and Ian Graham, our Chief Legal Officer & Corporate Secretary, as your proxy. This ensures that your vote will be counted if you are not able to attend the 2024 Annual Meeting. Your vote matters.

On behalf of the Board, we thank you for your continued investment and support in Ferguson. As always, we remain committed to serving our shareholders.

Regards,

		Geoff Drabble Board Chair October 15, 2024

Notice is hereby given that the 2024 annual meeting of stockholders (the “2024 Annual Meeting”) of Ferguson Enterprises Inc. (the “Company”) will be held on December 5, 2024 at 9:00 a.m. Eastern Time at Hilton Norfolk The Main, 100 East Main Street, Norfolk, Virginia, 23510, United States.

		Record Date
		Holders of common stock of the Company as of the close of business on October 9, 2024 are entitled to notice of and to vote at the 2024 Annual Meeting.
		How to Vote
				By Internet Vote via the internet at proxyvote.com.
				By Telephone To vote by telephone, call the telephone number on the Notice of Internet Availability or proxy card.
				By Mail If you elected to receive proxy materials by mail, mark, sign, date, and return the proxy card in the enclosed postage-paid envelope.

Proxy Statement

for the 2024 Annual Meeting

This Proxy Statement relates to the solicitation of votes or proxies by Ferguson Enterprises Inc., on behalf of the Board, for use at the Company’s 2024 annual meeting of stockholders (the “2024 Annual Meeting”) and at any adjournment or postponement of such meeting.

As previously disclosed, on August 1, 2024, Ferguson plc, a company incorporated in Jersey, completed a merger transaction (the “Merger”) that resulted in (i) Ferguson plc becoming a direct wholly owned subsidiary of Ferguson Enterprises Inc., a Delaware corporation, and (ii) the shareholders of Ferguson plc at the designated record time for the Merger no longer holding ordinary shares of Ferguson plc but instead holding shares of common stock of Ferguson Enterprises Inc. As a result of the Merger, Ferguson Enterprises Inc. became the successor issuer to Ferguson plc, which was renamed “Ferguson (Jersey) Limited” and changed its status to a private company.

Unless otherwise specified or the context otherwise requires:

The Company’s website address is corporate.ferguson.com. We include website addresses throughout this Proxy Statement for reference only. The information contained in, or available through, these websites is not part of, or incorporated by reference into, this Proxy Statement. Addresses, including electronic addresses provided in this Proxy Statement, are provided solely for the purposes so specified. You may not use any electronic address provided in this Proxy Statement or other proxy materials to communicate with the Company for any purpose other than those expressly stated herein or therein.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on December 5, 2024

We have elected to take advantage of the U.S. Securities and Exchange Commission (the “SEC”) rules that allow us to provide shareholders access to our proxy materials over the internet. Our Annual Report for the fiscal year ended July 31, 2024 (the “2024 Annual Report”) and the Notice of Annual Meeting and Proxy Statement are available at proxyvote.com.

Beginning on October 15, 2024, we mailed to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) containing instructions regarding how to access our 2024 Annual Report and the Notice of Annual Meeting and Proxy Statement online. The Notice of Internet Availability contains instructions regarding how you can elect to receive these proxy materials in printed form by mail or electronically by email. This election to receive proxy materials by mail or email will remain in effect until you terminate it.

2024 Proxy Statement Summary

Ferguson at a Glance

Ferguson is the largest value-added distributor serving the specialized professional in our $340B residential and non-residential North American construction market. We help make our customers’ complex projects simple, successful and sustainable by providing expertise and a wide range of products and services from plumbing, HVAC, appliances, and lighting to PVF, water and wastewater solutions, and more.

Our North American customer groups have leading positions in large, growing and fragmented markets with over 75% of revenue estimated to come from #1 or #2 market positions. These markets have historically grown above GDP and their long-term structural characteristics remain supportive. We have an intentional balance between attractive end markets and serve customers principally in North America. Residential and non-residential markets each account for approximately half of our net sales, with net sales within these combined markets balanced between repair, maintenance and improvement (“RMI”) (approximately two-thirds of our net sales) and new construction (approximately one-third of our net sales), based on management’s estimates. This balance continues to serve us well and creates resilience with a less cyclical and more robust business model.

Balanced market exposure

2024 Proxy Statement Summary

Our business model enables us to connect approximately 36,000 suppliers with more than one million customers, and our scale has continued to help us consistently outperform the market. Through scale deployed locally utilizing our world-class supply chain, value-added solutions and digital tools, along with our expert associates, we help meet our customers’ unique needs.

We look to generate long-term shareholder value by investing for organic growth, consolidating our fragmented markets through acquisitions and returning surplus capital to shareholders. We have a demonstrated long-term track record of returning capital to our shareholders, with over $11 billion returned via dividends and share repurchases over the past ten years.

2024 Proxy Statement Summary

Fiscal 2024 Performance

We delivered a strong performance in fiscal year 2024 despite challenging end markets during the year. Net sales of $29.6 billion were broadly flat as we continued to consolidate our markets with above market share gains and high quality acquisitions.

Operating profit of $2,652 million was $7 million lower than last year with diluted earnings per share of $8.53, a decrease of 6.5%. Adjusted operating profit* of $2,824 million was $93 million lower than last year with adjusted diluted earnings per share* of $9.69, a decrease of 1.5% principally arising due to the lower adjusted operating profit, partially offset by the impact of share repurchases.

Cash generation remains an important strength of our business, with operating cash flow of approximately $1.9 billion during the year. Our cash generative model and strong balance sheet allowed us to invest for organic growth, sustainably grow our dividend, consolidate our fragmented markets through acquisitions and return capital to shareholders. During the year we invested $0.4 billion in capital expenditures, paid $0.8 billion of dividends, invested $0.3 billion in ten acquisitions, and repurchased 3.3 million of our outstanding shares equating to $0.6 billion.

The Board declared total annual dividends for the fiscal year of $3.16 per share which reflects 5% growth over the prior year.

* Adjusted operating profit, Adjusted EPS – diluted and Return on capital employed (ROCE) are non-GAAP measures. See the section of this Proxy Statement titled “Non-GAAP Reconciliations and Supplementary Information” for more information and a reconciliation of the non-GAAP measure to the most comparable measure under accounting principles generally accepted in the United States (“U.S. GAAP”).

Governance Transition & Timeline and Related Board of Director Matters

Governance Transition & Timeline

Since 2019, Ferguson plc’s Board of Directors (the “Ferguson plc Board”) considered North America to be the best long-term location for the Company and worked methodically and transparently with shareholders on a journey to align the Company’s headquarters and governance with its operations and leadership. As part of this effort, the Company obtained an additional listing of its ordinary shares on the New York Stock Exchange (“NYSE”) effective March 8, 2021, and, on May 12, 2022, the Company relocated its primary listing to the NYSE following the transfer of its listing category on the London Stock Exchange (“LSE”) from a Premium listing to a Standard listing. Following this transfer, the Company was no longer required to comply (or explain non-compliance) with the U.K. Corporate

2024 Proxy Statement Summary

Governance Code and adjusted its corporate governance arrangements to align with those typically adopted by a U.S. domestic issuer of similar size and nature that maintains a listing on the NYSE. During fiscal 2023, the Company determined that it no longer qualified as a foreign private issuer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, effective August 1, 2023, the Company was no longer eligible to use the rules designed for foreign private issuers and was considered a U.S. domestic issuer under the rules of the SEC and NYSE listing standards. However, the Company remained a foreign company incorporated in Jersey under the Companies (Jersey) Law 1991 (as amended) (the “Companies Law”) that was required to comply with Jersey law and its memorandum and articles of association under such law.

In the next step of our journey, on January 18, 2024, the Company announced that the Ferguson plc Board had concluded that it would be in the best interests of the Company and its shareholders as a whole to proceed with establishing a new corporate structure to domicile the Ferguson group of companies’ ultimate parent company in the United States. On May 30, 2024, Ferguson plc held an extraordinary general meeting at which shareholders approved the proposed merger transaction. The Merger was effective on August 1, 2024 and resulted in (i) Ferguson plc becoming a direct wholly owned subsidiary of Ferguson Enterprises Inc., a Delaware corporation, and (ii) shareholders of Ferguson plc at the designated record time for the Merger no longer holding ordinary shares of Ferguson plc but instead holding shares of common stock of Ferguson Enterprises Inc.

Pursuant to the reforms to the U.K. Listing Rules which took effect on July 29, 2024, the Company’s Standard listing on the LSE was discontinued and Ferguson was admitted to the new equity shares (international commercial companies secondary listing) category on the LSE in its place. The Company’s shares of common stock are listed on both the NYSE (primary) and LSE (secondary) under the symbol “FERG,” the same symbol that previously attached to Ferguson plc’s ordinary shares.

The following timeline depicts the Company’s journey described above.

Related Board of Director Matters

As part of establishing the new corporate structure, each of Ferguson plc’s Executive Directors, Kevin Murphy and Bill Brundage, was appointed to the Board of Directors of Ferguson Enterprises Inc. (the “Board” or the “Ferguson Enterprises Inc. Board”) on February 5, 2024, and each Non-Employee Director serving on the Ferguson plc Board at the time was appointed to the Ferguson Enterprises Inc. Board on February 14, 2024 (each a “Legacy NED” and, together with the Executive Directors, the “Legacy Directors”). On June 3, 2024, Rekha Agrawal and Rick Beckwitt were appointed to the Ferguson Enterprises Inc. Board.

Unless otherwise specified, references in this Proxy Statement to a Director nominee’s appointment to or tenure on the Board include service on the Ferguson plc Board for the Legacy Directors, and references to term of employment for the Company’s Named Executive Officers include employment with Ferguson plc or its subsidiaries prior to the Merger. References in this Proxy Statement to meetings of Committees of the Board of Directors held in fiscal 2024 refer to meetings of Committees of the Ferguson plc Board. The Ferguson Enterprises Inc. Board had no Committees during fiscal 2024 and established the following three standing Committees effective August 1, 2024: Audit Committee, Compensation Committee, and Nominations & Governance Committee.

2024 Proxy Statement Summary

Governance and Compensation Highlights

For more information about our compensation governance practices, see the section below titled “Compensation Discussion and

Analysis—Pay Decisions and Compensation Governance Policies and Practices” on page 42.

2024 Proxy Statement Summary

Our Director Nominees

Our Director nominees possess a range of diverse backgrounds, skills, knowledge and experience that we believe are integral to an effective and well-functioning board. For more information about our Director nominees, please see our Director skills and experience matrix on page 17. Detailed information about each Director nominee’s qualifications, experience and expertise can be found in their biographies starting on page 11. As further discussed in the section titled “Proposal 1: Election of Directors,” Thomas Schmitt and Nadia Shouraboura are not standing for re-election at the 2024 Annual Meeting.

Director Tenure, Diversity, Independence and Qualifications

Our slate of Director nominees reflects our aim to establish a Board with an appropriate balance of skills, knowledge, experience, and diversity of background, including gender and racial/ethnic diversity, sexual orientation, tenure, and independence.

2024 Proxy Statement Summary

COMMITTEE MEMBERSHIP

NAME

QUALIFICATIONS

OTHER PUBLIC COMPANY BOARDS

INDEPENDENT

MEMBER SINCE

AUDIT

COMP

NOM & GOV

Rekha Agrawal

Extensive executive experience leading businesses focused both in services and manufacturing; global experience beneficial to assessing risk across supply chain; commitment to operational excellence.

None

Yes

2024

Kelly Baker

Extensive human resources and operational experience; wide-ranging international business and functional experience; experience leading the people, organizational and culture developments across a number of U.S.-based, global public companies.

None

Yes

2021

Rick Beckwitt

Deep knowledge of the homebuilding and real estate industries gained through executive roles at public companies; extensive leadership and operational experience, providing broad insight into strategic planning and risk oversight.

1

Yes

2024

Bill Brundage

Considerable financial management and operational experience; significant knowledge of the Company and the Company’s industry.

None

No

2020

Geoff Drabble Board Chair

Extensive leadership experience in the distribution, technology and manufacturing sectors as a chief executive officer; deep knowledge of U.S. markets and operating conditions; significant experience as a board member.

2

Yes

2019

Catherine Halligan

Extensive digital transformation, digital commerce, data analytics and marketing experience as a senior executive; strong track record in the retail, e-commerce and multi-channel arenas; significant experience as a board member.

3

Yes

2019

Brian May

Extensive experience as a chief financial officer; extensive financial and operational experience; extensive expertise in the Company’s industry.

1

Yes

2021

James S. Metcalf

Extensive executive leadership experience; considerable U.S. public company board and industry expertise.

None

Yes

2023

Kevin Murphy

Culture champion with strong executive leadership skills; deep knowledge of the Company and the Company’s industry; strategic operational expertise; significant experience in strategic development and delivering operational performance improvements.

1

No

2017

Alan Murray

Extensive business leadership skills and financial reporting expertise; considerable international operational and financial experience; extensive executive management experience and board experience within global businesses; extensive knowledge of the Company.

1

Yes

2013

Suzanne Wood

Experienced chief financial officer with significant financial and operational knowledge; extensive public company experience.

2

Yes

2021

Committee Member		Committee Chair

2024 Proxy Statement Summary

ESG Framework and Reporting

The Board-approved ESG framework reflects Ferguson’s priority ESG issues identified through our risk management analyses, stakeholder priority assessments and the guidance and methods provided by the Sustainability Accounting Standards Board (“SASB”), considering issues relevant to Multiline and Specialty Retailers & Distributors industry standards (sasb.org). It comprises the key sustainability topics informing and influencing our business strategy and structures our overall vision for sustainability across three key pillars: Environmental, Social and Governance.

Our ESG Report is available on our website. Our SASB disclosure and our disclosure under the Task Force on Climate-Related Financial Disclosures (TCFD) framework are included within our ESG Report and are also available on our website. The ESG Report and other information regarding our ESG practices on our website are not incorporated by reference into this Proxy Statement.

In accordance with the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and Amended and Restated Bylaws (the “Bylaws”), members of the Board stand for election each year. The Board currently consists of 13 members. The Board has nominated 11 of its members to stand for election at the 2024 Annual Meeting. The Board did not nominate Mr. Schmitt and Ms. Shouraboura for re-election and each will continue as a Director through the date of the 2024 Annual Meeting, when their current term expires. The Board approved a reduction in the number of Directors constituting the Board from 13 to 11 effective as of the expiration of the terms of office of Mr. Schmitt and Ms. Shouraboura.

The Board Chair and the Board found that the performance of each of the 11 Director nominees continues to be effective, including having taken into account the results of the 2024 annual Board evaluation related to the nine Legacy Director nominees who served on the Ferguson plc Board at the time of that evaluation. The Board Chair and the Board concluded that each nominee demonstrates commitment to the role, has sufficient time to meet their commitment to the Company and has individual skills and experience which are relevant and beneficial to support the Board in fulfilling its duties. A summary of the skills and experience of each of the Director nominees is set out on page 17 of this Proxy Statement.

The Board is unclassified. Directors are currently elected for one-year terms. You are being asked to vote on the election of the following 11 Director nominees, each for a one-year term.

Director Nominees

Vote Required

Election of each Director nominee requires that a majority of the votes cast must be cast “FOR” the nominee. Shareholders may not cumulate their votes with respect to the election of Directors. A properly executed proxy marked “Abstain” with respect to the election of one or more Directors will not be voted with respect to the Director or Directors indicated, although it will be counted for purposes of determining whether a quorum is present. Abstentions and broker non-votes are not considered votes cast and will not impact the outcome of the vote on this Proposal.

In order for any incumbent Director, including each Director nominee named in this Proxy Statement, to become a nominee for further service on the Board, such person must have submitted an irrevocable resignation, which resignation shall become effective upon (i) that person not receiving a majority of the votes cast in an election that is not a contested election (an “Unsuccessful Incumbent”), and (ii) acceptance by the Board of that resignation. If the voting results of an annual meeting of stockholders indicate there is an Unsuccessful Incumbent, the Board, acting on the recommendation of the Nominations & Governance Committee, will, no

Election of Directors

later than 90 days following certification of the shareholder vote, determine whether to accept the resignation of such Unsuccessful Incumbent. The Nominations & Governance Committee, in making its recommendation, and the Board, in acting on such recommendation, may consider any factors or other information that they determine to be appropriate and relevant. If an Unsuccessful Incumbent’s resignation is accepted, then the Board may fill the resulting vacancy in accordance with our Bylaws.

Election of Directors

Director Nominee Biographies

Set forth below are the biographies for each of the 11 Directors nominated by the Board for election at the 2024 Annual Meeting.

Election of Directors

Election of Directors

Election of Directors

Election of Directors

Election of Directors

Election of Directors

Director Nominee Skills and Experience

SKILLS AND EXPERIENCE

Executive Leadership Experience leading large scale and complex organizations. Developed and delivered strategic initiatives and operational plans in a CEO, operational executive or function leader capacity.

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Public Company Board Experience Experience serving on other public company boards.

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Corporate Governance/Regulatory and Risk Management Experience in corporate governance matters, board management accountability, risk management and compliance practices.

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Accounting, Finance and Capital Markets Experience in accounting, finance, audit and capital management, including oversight of financial statements and operating results. Experience assessing the financial metrics of strategic opportunities.

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Corporate Transactions and M&A Experience in corporate transactions, mergers and acquisitions.

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Environmental/Climate Change Experience and overseeing environmental policy regulation, risk and understanding of best practices.

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Technology, Digital, Innovation and Cyber Experience with technologies key to business, digital marketing/ transformation, innovation and risk mitigation. Understanding cybersecurity.

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Supply Chain/Logistics/Distribution Experience includes planning and management of activities in sourcing, procurement, logistics and distribution.

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Marketing Experience of marketing or managing brands and increasing the value of products or services over time in the market.

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Human Capital and Talent Management Experience in human capital management, talent development, Inclusion, Diversity & Equity, compensation and succession planning.

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Corporate Governance

Corporate Governance Guidelines

The Board has adopted Corporate Governance Guidelines as a general framework to assist the Board in carrying out its responsibility for the business and affairs of the Company. The Corporate Governance Guidelines cover the role of the Board and management, the composition of the Board, the structure and operations of the Board and the duties and responsibilities of the Board. The Nominations & Governance Committee of the Board reviews the Corporate Governance Guidelines annually and recommends any appropriate changes for approval by the Board. The Corporate Governance Guidelines can be found on the Corporate Governance page of the Investors tab of our website at corporate.ferguson.com under Governance Documents.

Board Leadership

The Board is led by Geoff Drabble, our independent Non-Employee Board Chair. As part of its annual board evaluation process, the Board assesses its leadership structure to determine the leadership structure most appropriate for the Company, taking into account the recommendations of the Nominations & Governance Committee.

The Board elects one of its members to serve as the Board Chair. Both independent and Executive Directors, including the CEO, are eligible for appointment as the Board Chair. Mr. Drabble was appointed Board Chair in February 2024. Mr. Drabble previously served as the Chairman of the Ferguson plc Board from November 2019 until August 1, 2024, the effective date of the Merger. We believe that the current leadership structure is effective for the Company and its shareholders at this time, as it allows Mr. Murphy to focus on the day-to-day leadership of the Company while allowing Mr. Drabble to focus on leading the Board and its oversight of the Company. Further, the Company, prior to transitioning to a primary listing on the NYSE in May 2022, complied with the U.K. Corporate Governance Code which recommends the separation of the CEO and Board Chair roles.

Any change from the current structure of having a Board Chair separate from the CEO would be at the discretion of the Board, though the Board may seek input from shareholders if a change is contemplated in the future. If the Board determines that it would be beneficial to have a single individual act as both CEO and Board Chair, our Corporate Governance Guidelines would require the appointment of a lead independent director at that time.

Director Independence

The Nominations & Governance Committee reviews the independence of each Director annually and makes recommendations to the Board, and the Board annually determines and discloses the independence of the Directors.

No Director is considered independent unless the Board, considering all relevant facts and circumstances, affirmatively determines that the Director has no material relationship with the Company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company. In assessing whether a Director has no material relationship with the Company, the Board also considers any persons or organizations with which the Director has an affiliation. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships, among others.

In addition, members of the Audit, Compensation and Nominations & Governance Committees must meet all additional applicable independence requirements of the NYSE and any additional requirements imposed under U.S. securities laws and the rules and regulations of the SEC.

The Board has considered whether the members of our Board are independent and determined that each of our Directors, including each Director nominee, other than our Executive Directors, is an “independent” Director under applicable NYSE and SEC rules and regulations, and each satisfies the applicable NYSE and SEC rules and regulations for “independence” with respect to the Committees of the Board on which such Director serves.

In making its independence determination the Board considered that some of the Non-Employee Directors, or their immediate family members, are affiliated with companies or entities to which the Company sold products or made payments, or from which the Company purchased products or services during the year. This included transactions that do not require disclosure under Item 404 of Regulation S-K (“Regulation S-K”) promulgated under the Exchange Act and therefore are not disclosed in “Approved Related Party Transactions,” such as that Ms. Shouraboura’s spouse is a senior executive at Microsoft Corporation from which the Company purchases products and services. Aggregate payments to or from Microsoft Corporation, in each of the last three fiscal years, did not exceed the greater of $1 million or 2% of that organization’s consolidated gross revenues in a single fiscal year. In reviewing these

Corporate Governance

relationships, the Board considered all relevant factors, including: whether the transactions were entered into at arm’s length in the normal course of business and, to the extent they were commercial relationships, had standard commercial terms; and whether the Director had any direct business relationships with the company or received any direct personal benefit from these transactions, relationships, or arrangements.

The independent Directors meet on a regularly scheduled basis in executive sessions. In accordance with our Corporate Governance Guidelines, the Board Chair, or the lead independent director if the Board Chair is not an independent Director, will preside at each executive session and, in the Board Chair’s absence, the independent Directors will select an independent Director to preside.

Director Criteria and Nomination Process

The Company seeks a Board with an appropriate balance of skills, knowledge, experience, independence and diversity of background among its members to enable it to discharge its duties and responsibilities effectively. The Board has delegated the process for identifying and screening potential director candidates to the Nominations & Governance Committee.

Candidates for potential membership on the Board must at a minimum satisfy any requirements of applicable law and rules of the NYSE. In addition, in evaluating director candidates, the Nominations & Governance Committee considers the qualifications of each candidate, the collective experience and expertise represented on the existing Board and the criteria set forth in our Corporate Governance Guidelines, including that candidates should:

The Board and the Nominations & Governance Committee consider whether director candidates’ backgrounds, skills, experience and other qualifications would complement those of other members of the Board and may also consider other factors as needs change based on strategic priorities. In addition, a Director who is currently serving as an executive officer of a public company generally may serve on a total of no more than two public company boards (including the Company’s Board). A Director who is not currently serving as an executive officer of a public company generally may serve on no more than four public company boards (including the Company’s Board).

Process for Selection of Directors

When the Board determines it is desirable to add a director in the context of its strategic needs, as part of its annual evaluation process or to fill a vacancy on the Board, the Nominations & Governance Committee takes the following steps:

Corporate Governance

Board Diversity Policy

The Board seeks to maximize the opportunity to make independent Board director appointments that reflect the diversity of the Company’s workforce and its communities. Accordingly, it will include candidates from socially, racially and ethnically diverse backgrounds in its candidate slates for all independent Board director positions.

The Board has established the following board diversity targets, which are aspirational in nature: at least 30% of the Board should be female and at least one member of the Board should be from a minority ethnic background. As of July 31, 2024, and up to the date of this Proxy Statement, 38% of the Board are female and two members of the Board are from a minority ethnic background. The Chairs of both the Audit Committee and the Compensation Committee are female.

Board Evaluation

Our Board has the authority and responsibility to review the results of the annual evaluation of the Board conducted by the Nominations & Governance Committee to determine whether the Board and the Committees of the Board are functioning effectively and in accordance with their respective charters, the Company’s Corporate Governance Guidelines, applicable law and NYSE listing standards. As part of its responsibilities, the Nominations & Governance Committee will evaluate at least annually the Board’s composition, tenure and experience. The Nominations & Governance Committee will then report the conclusions and any recommended improvements to the Board. The Board will also review the results of the third-party review of the Board that is conducted every three years. The last third-party review was conducted in May 2024.

In addition, the Nominations & Governance Committee periodically, and at least annually, assesses the qualifications of individual members of the Board and the results of such evaluations are reported to the Board.

Board Refreshment and Tenure

The Board has been focused on board refreshment as Ferguson has progressed its transition from a Jersey company with a Premium listing on the LSE to a Delaware corporation with a primary listing on the NYSE and a secondary listing of the equity shares (international commercial companies secondary listing) category on the LSE. As a result, and taking into account prior service on the Ferguson plc Board, six of our Non-Employee Directors and one of our Executive Directors have a tenure of less than five years.

The Board does not believe that it should limit the number of terms for which a person may serve as a Director, because such term limits could deprive the Company of the valuable contributions made by Directors who have developed, over time, significant insights into the Company and its operations. At the same time, the Board recognizes the importance of an appropriate balance of experience and perspectives and considers the overall mix of tenure of the Board.

All Directors serve a one-year term, except that the initial term for each Director shall run from the date of appointment until the Company’s next annual meeting, and are subject to election by shareholders at each annual meeting. As provided in the Company’s Certificate of Incorporation and Bylaws, newly created directorships resulting from any increase in the authorized number of Directors and vacancies on the Board are to be filled by the affirmative vote of a majority of the remaining Directors then in office, or by a sole remaining Director. Any Director so appointed will hold office until the Company’s next annual meeting after such Director’s appointment.

Board Onboarding and Education

All new Non-Employee Directors on the Board receive both in-person and remote orientation and training to become integrated into boardroom discussions and maximize their knowledge of the Company. The orientation program is led by members of senior management and coordinated by the Corporate Secretary team in collaboration with the new Director. The program covers a wide variety of topics, including: a review of our strategy and operating plans in both our U.S. and Canadian business segments; financial statements; information technology, compensation, investor relations, legal and corporate governance policies and practices; and the roles and responsibilities of our Directors. New Directors may also receive presentations from our external legal counsel and may meet with our auditors and compensation consultants. New Directors receive key documents as part of the orientation process, including our publicly available governance documents and filings, past Board and Committee minutes and agenda programs, and strategy presentations, among other documents.

Corporate Governance

The Company provides the Board with ongoing educational resources and opportunities related to fiduciary duties, corporate governance and regulatory topics and other matters as may be appropriate or requested by the Board. All Directors are members of the National Association of Corporate Directors (“NACD”), giving them access to tools, resources, and instructional curricula to continue to mature in corporate governance, including educational events and networking opportunities. In addition, each Director has access to a broad range of resources provided by Deloitte, including newsletters, webcasts and symposia. Each Director also undergoes annual training on our Code of Business Conduct and Ethics and other relevant Company policies. Site visits are coordinated for our Directors, oftentimes as part of the onboarding process and in connection with certain of the Company’s Board meetings. These visits allow Directors to interact with a broader group of our executives and associates and gain first-hand insight into our culture and operations.

Director Meeting Attendance

Board members are expected to devote sufficient time and attention to prepare for, attend and participate in Board meetings and meetings of Committees on which they serve, including advance review of meeting materials that are circulated prior to each meeting. In addition, Board members are expected to attend each annual meeting of stockholders unless unusual circumstances make attendance impractical.

During fiscal 2024, the Ferguson plc Board met 5 times. During fiscal 2024, the Ferguson plc Audit Committee met five times, the Compensation Committee met four times and the Nominations & Governance Committee met four times.

To facilitate the Merger and prepare for the resulting U.S. domicile, the Ferguson Enterprises Inc. Board met five times during fiscal 2024. The Ferguson Enterprises Inc. Board had no Committees during fiscal 2024 and established its three standing Committees effective August 1, 2024.

Each incumbent Director attended at least 75% of the meetings of the boards of Ferguson Enterprises Inc. and Ferguson plc, and in the case of Ferguson plc, of the Committees of which they were a member during fiscal 2024. Every Director serving on the Ferguson plc Board at the time of the 2023 annual general meeting of Ferguson plc attended that meeting.

Board Committees and Oversight

Committees of the Board

The Board’s principal responsibility is one of oversight to enable the Company’s business objectives to be met and to review the overall strategic development of the Company as a whole.

Certain strategic decisions and authorities of the Company are reserved as matters for the Board. For some of these matters, the Board delegates responsibilities and authorities to its Committees. The matters reserved for the Board for its decision include oversight matters related to: strategy; succession planning; financial accountability and risk management.

The Board has three Committees: the Audit Committee, the Compensation Committee, and the Nominations & Governance Committee. Each Committee operates in accordance with its respective charter that is periodically reviewed and updated as appropriate. The charters of each Committee can be found on the Corporate Governance page of the Investors tab of our website at corporate.ferguson.com under Governance Documents. The members of these Committees as of the date hereof are identified in the following table:

Board Committees and Oversight

AUDIT COMMITTEE				All Independent
		Members		Responsibilities
Suzanne Wood Chair		•  Catherine Halligan   •  Brian May   •  Alan Murray		Each member of the Audit Committee is “independent,” as defined by the NYSE listing standards. The Board has determined that Brian May, Alan Murray and Suzanne Wood each qualify as an “audit committee financial expert” as that term is defined by the applicable SEC rules. Furthermore, each member of the Audit Committee is “financially literate” as that term is defined by the NYSE listing standards.   The Audit Committee Charter details the purpose and responsibilities of the Audit Committee, including assisting the Board in fulfilling its oversight responsibilities, and making recommendations to the Board as appropriate, in relation to:   •  the integrity of the Company’s financial statements and financial reporting process;   •  the appointment, independence and qualifications of the Company’s independent registered public accounting firm (the “Independent Auditor”);   •  the performance of the Company’s Independent Auditor and internal audit function;   •  the Company’s compliance with legal and regulatory requirements, including internal controls designed for that purpose;   •  guidelines and policies to govern the process by which management assesses and manages the Company’s exposure to risk, the Company’s major financial risk and cybersecurity risk exposures and the steps management has taken to monitor and control such exposures;   •  the pre-approval of audit and permitted non-audit and tax services and fees to be provided by the Independent Auditor;   •  prepare and approve the audit committee report for inclusion in the Company’s annual proxy statement;   •  procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and   •  the review and approval of related party transactions that are in, or are not inconsistent with, the best interests of the Company and its shareholders.
COMPENSATION COMMITTEE				All Independent
		Members		Responsibilities
Kelly Baker Chair		•  Rick Beckwitt   •  Geoff Drabble   •  Catherine Halligan   •  James S. Metcalf		Each member of the Compensation Committee is “independent,” as defined by the NYSE listing standards.   The Compensation Committee Charter details the purpose and responsibilities of the Compensation Committee, including:   •  reviewing and approving corporate goals and objectives relevant to the compensation of the CEO and any other Executive Director and evaluating their performance at least annually in light of those goals and objectives;   •  determining and approving the compensation for the CEO and any other Executive Director, either as a Committee or together with the other Non-Employee Directors (as directed by the Board);   •  reviewing and approving the compensation of all other Executive Officers, considering the recommendations of the CEO;   •  reviewing and recommending the form and amount of all Non-Employee Director compensation and benefits;   •  producing an annual report of the Compensation Committee for inclusion in the Company’s annual report on Form 10-K or proxy statement;   •  reviewing and making recommendations to the Board regarding incentive compensation plans and equity-based plans;   •  undertaking annual risk assessment of compensation policies and practices; and   •  evaluating and monitoring the independence of any compensation consultant, as required.

Board Committees and Oversight

Compensation Committee Interlocks and Insider Participation

Kelly Baker, Geoff Drabble, Catherine Halligan, Alan Murray, Thomas Schmitt and James S. Metcalf served on the Compensation Committee of the Ferguson plc Board during fiscal 2024. None of such members of the Compensation Committee had been an officer or associate of the Company. Except for Mr. Schmitt, none of such members of the Compensation Committee had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K. See “—Related Party Transactions—Approved Related Party Transactions” for a description of the Related Party Transaction involving Mr. Schmitt. None of the Company’s Executive Officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, an executive officer of which served as a Director of the Company or a member of the Compensation Committee during fiscal 2024.

NOMINATIONS & GOVERNANCE COMMITTEE				All Independent

Board Oversight

Shareholder Engagement and Feedback

The Board, as part of its oversight role, routinely receive updates, briefings and reports from the Company’s investor relations team that summarize shareholder engagement and key themes.

We are committed to engaging with our shareholders. Throughout the year, we meet with institutional investors and analysts to inform and share our perspectives and to solicit their feedback on our performance. This dialogue allows the Company to better understand and evaluate important issues and consider them appropriately, and to communicate on matters including strategy, financial performance, market backdrop, ESG and executive compensation. Our CEO, CFO and investor relations team maintain a regular cadence of meetings with a broad cross-section of our share register including large institutional investors and pension funds. The style of shareholder interactions can include a mix of one-on-one meetings, conferences and operational site visits.

Board Committees and Oversight

We take the feedback we receive from shareholders seriously. This year, the Board considered the results of the extraordinary general meeting held by Ferguson plc on May 30, 2024 at which shareholders approved the Merger and voted, on an advisory basis, on other matters relating to certain differences between Ferguson plc’s organizational documents and the proposed amended and restated certificate of incorporation and amended and restated bylaws of Ferguson Enterprises Inc. (together, the “Proposed Organizational Documents”). In light of the results of the advisory vote, the Board approved certain revisions to the Proposed Organizational Documents before approving the Company’s Certificate of Incorporation and Bylaws.

We look forward to encouraging an ongoing exchange between the Board, management and shareholders.

Risk Oversight

Board Committees and Oversight

Strategy Oversight

The Board actively oversees the Company’s long-term business strategy and is ultimately responsible for the approval (i) to materially extend the Company’s activities into new lines of businesses, countries or regions, (ii) to cease operations in any material part of the Company’s business and (iii) the Company’s capital allocation policy. The Board is continuously engaged with management and associates on its strategic oversight function. For example, the Board:

ESG Oversight

The Board oversees Ferguson’s sustainability efforts and ESG strategy and the Nominations & Governance Committee is responsible for providing oversight of the Company’s ESG framework and related public disclosures, including the Company’s ESG Report. The Nominations & Governance Committee receives regular updates on sustainability progress from our Vice President of ESG, such as review of project implementation and performance and opportunities to integrate sustainability measures into capital expenditures, and provides reports on these matters to the Board. The Company also maintains a management-level ESG Steering Committee, which is a cross-functional group of leaders and ESG subject matter experts from across the business responsible for the ESG framework. The purpose of the ESG Steering Committee is to assist the Executive Committee in overseeing the Company’s ESG-related key risks and opportunities that could impact the Company’s standing with associates, customers, suppliers, and the investment community. Ferguson’s Board-approved ESG framework reflects the priority ESG issues identified through our risk management and stakeholder priorities assessments. A copy of the ESG framework appears on page 8 in the section titled “2024 Proxy Statement Summary—ESG Framework and Reporting.”

Code of Business Conduct and Ethics

Our Values — Safety, Integrity, Service, Teamwork and Impact – guide our decisions and our actions. These values are codified in the Ferguson’s Code of Business Conduct and Ethics (our “Code of Conduct”), which is applicable to all Directors, officers and associates. Our Code of Conduct is reviewed at least every three years for desirable changes. A copy of our Code of Conduct is available on the home page of our website at corporate.ferguson.com under Useful Links.

Related Party Transactions

Policy and Procedures for Review and Approval of Related Party Transactions

The Board has adopted a written policy and procedures for review, approval and monitoring of transactions involving the Company and related parties (including current Executive Officers and Directors, Director nominees and persons who served in those roles at any time since the beginning of our last fiscal year, greater than 5% beneficial owners of the Company’s voting securities, immediate family members of such persons and related entities of such persons, including entities in which any of such persons is employed, is a general partner or principal or in which such person has a 10% or greater beneficial ownership interest) (a “Related Party”). The policy covers any transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships in which the Company or any of its subsidiaries was, is or will be a participant, where the amount involved exceeds or is expected to exceed $120,000 in any fiscal year, and in which a Related Party had, has or is expected to have a direct or indirect material interest (any such transaction, a “Related Party Transaction”).

Prior to the Merger, the Ferguson plc Board maintained such written policy and procedures and, effective as of August 1, 2024, the Ferguson Enterprises Inc. Board adopted a written policy and procedures in substantially the same form as those maintained by the Ferguson plc Board (collectively, the “Related Party Transactions Policy”).

All Related Party Transactions that are not exempt under the Related Party Transactions Policy (such exempt transactions, “Exempted Transactions”) must be reviewed and approved by the Audit Committee. In considering the transaction, the Audit Committee must consider all of the relevant facts and circumstances available to it related to the Related Party Transaction, including:

Board Committees and Oversight

Any Director, Director nominee or Executive Officer who proposes to enter into, or otherwise becomes aware of, a potential Related Party Transaction must report the transaction to the Chief Legal Officer. If the Chief Legal Officer determines that the proposed transaction may or would be a Related Party Transaction and it is not an Exempted Transaction, the Chief Legal Officer must report the proposed Related Party Transaction to the Audit Committee for consideration at the next meeting of the Audit Committee. If the Chief Legal Officer determines that it is not appropriate to postpone review until the next Audit Committee meeting, the Audit Committee Chair may review and approve the Related Party Transaction. Any such approval must be reported to the Audit Committee at its next meeting. If a Director, any of the Director’s immediate family members or any entity with respect to which the Director is a partner, shareholder (or equivalent) or executive officer, is involved in the transaction, they will be recused from all discussions and decisions relating to the transaction. The Audit Committee may approve only those Related Party Transactions that are in, or are not inconsistent with, the best interests of the Company and its shareholders, as the Audit Committee determines in good faith. The Audit Committee, in its sole discretion, may impose such conditions as it deems appropriate on the Company or the Related Party in connection with the approval of a Related Party Transaction.

If the Company becomes aware of a Related Party Transaction that has not been approved under the Related Party Transactions Policy, the Related Party Transaction shall be reviewed in accordance with the procedures set forth in the Related Party Transactions Policy and, if the Audit Committee determines it to be appropriate, ratified. In any case where the Audit Committee determines not to ratify such a Related Party Transaction, the Audit Committee will direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction, or modification of the transaction to make it acceptable for ratification.

Approved Related Party Transactions

Described below are Related Party Transactions since the beginning of our last fiscal year. Other than as described below, there were no transactions, and there are no currently proposed transactions, that would require disclosure under Item 404 of Regulation S-K.

Thomas Schmitt, an independent Non-Employee Director on our Board, previously served as the chairman and chief executive officer of Forward Air Corporation from September 2018 to February 2024. The Company purchases certain delivery, installation and related administrative services from former subsidiaries of Forward Air Corporation. During the first six months of fiscal 2024, the Company paid to subsidiaries of Forward Air Corporation approximately $8 million for services provided to the Company. These services were purchased on an arm’s-length basis. This transaction was reviewed and approved in accordance with the Related Party Transactions Policy. In December 2023, this Related Party relationship ended. As such, services provided by this business during the second half of fiscal 2024 did not constitute a Related Party Transaction, and we do not expect any future services provided by this business to constitute a Related Party Transaction.

In connection with Ferguson’s purchase of Midwest Pipe and Supply from the Murphy family in 1999, an entity owned by Robert Murphy, the father of our President & Chief Executive Officer, Kevin Murphy, is the lessor (the “Lessor”) of a property leased by Ferguson in the ordinary course of its business. During fiscal 2024, the Company paid approximately $187,000 to the Lessor for use of the property. The lease for the property was entered into on an arm’s-length basis. This ongoing transaction was reviewed and approved in accordance with the Related Party Transactions Policy.

Board Committees and Oversight

Rick Beckwitt, an independent Non-Employee Director on our Board, previously served as co-chief executive officer and co-president of Lennar from November 2020 to September 2023. In the ordinary course of business, the Company sells various products and solutions to Lennar and its subsidiaries. During August 2023, the time period since the beginning of fiscal 2024 during which Mr. Beckwitt served as the co-chief executive officer and co-president of Lennar, Ferguson plc had cash receipts and receivables from Lennar and its subsidiaries in an amount of approximately $920,289. While the transaction occurred before Mr. Beckwitt’s appointment to the Board in June 2024, the Audit Committee ratified this transaction in accordance with the Related Party Transactions Policy.

Matt Stirrup, the husband of Allison Stirrup, the Company’s Chief Human Resources Officer and an executive officer, is employed by the Company as Director of Network Services. Mr. Stirrup received total compensation of approximately $310,000 in fiscal 2024, which includes base salary, bonus, equity-based compensation, benefits and other perquisites. The terms of Mr. Stirrup’s compensation are consistent with the compensation of other similarly situated associates. This ongoing transaction was reviewed and ratified by the Audit Committee in accordance with the Related Party Transactions Policy.

Director Compensation

The following table summarizes the compensation awarded or paid to the Non-Employee Directors for the year ended July 31, 2024.

(1) The compensation reported for the Legacy NEDs reflects compensation paid to them during fiscal 2024 for their service on the Ferguson plc Board. Legacy NEDs received no additional compensation for their service on the Ferguson Enterprises Inc. Board from the time of their appointment in February 2024 until August 1, 2024, the effective date of the Merger. The compensation reported for Ms. Agrawal and Mr. Beckwitt, who were each appointed to the Ferguson Enterprises Inc. Board effective June 3, 2024, reflects compensation paid to them from June 3, 2024 to July 31, 2024 for their service on the Ferguson Enterprises Inc. Board.

(2) U.S.-based Non-Employee Directors are paid in USD and U.K.-based Non-Employee Directors are paid in GBP. Each month we calculate any U.K. tax due on U.S.-based Non-Employee Director fees using the U.K. tax authorities (HMRC) official exchange rate for the month. The fees of the two U.K.-based Non-Employee Directors (Messrs. Drabble and May) have been converted into USD using the same official exchange rate on a monthly basis.

(3) Represents the grant date fair value of restricted stock units, calculated in accordance with FASB ASC Topic 718, issued to our Non-Employee Directors under the NED Plan (as defined below) on October 12, 2023 that were subsequently cancelled and replaced with the same number of restricted stock units, subject to substantially the same terms and conditions, under the Ferguson plc 2023 Omnibus Equity Incentive Plan on March 7, 2024. For additional information on the cancelled awards and replacement awards, see the section entitled “Non-Employee Director Equity Incentive Awards.” The aggregate number of restricted stock units outstanding as of July 31, 2024 for our Non-Employee Directors was as follows: 707 restricted stock units for each of Messrs. Metcalf, Murray and Schmitt, and Ms. Baker, Ms. Halligan, Ms. Shouraboura and Ms. Wood; 675 restricted stock units for each of Messrs. Drabble and May; and no restricted stock units were outstanding as of July 31, 2024 for Ms. Agrawal and Mr. Beckwitt.

(4) The Legacy NEDs received a travel allowance of $3,250 (each way) (£2,500 for U.K.-based Non-Employee Directors), where there would be a need for intercontinental flight in excess of five hours (one way) based on the home location of the Non-Employee Director and the location of the Board (or Committee) meeting, up to a maximum of $39,000 per annum (£30,000 for U.K.-based Non-Employee Directors). This was in addition to reimbursement for actual travel costs, including airfare and hotel. Due to the payment schedule the travel allowance for the July 2023 meeting was not included in the fiscal 2023 compensation reported in the Company’s fiscal 2023 proxy statement and is included in this column for fiscal 2024. As a result of a meeting location change and due to prior commitments, certain reimbursements in addition to travel reimbursement were provided for Ms. Halligan to facilitate her attendance in-person.

(5) In the U.K., some travel expenses related to Board meeting attendance are considered by the U.K. tax authorities to be ‘taxable benefits,’ consequently the Company paid the tax on these expenses including any applicable tax gross-up. The applicable tax gross-ups were paid in the following amounts for Messrs. Drabble ($1,499), May ($2,239), Metcalf ($12,012), Murray ($6,643), Schmitt ($8,701), Ms. Baker ($10,911), Ms. Halligan ($8,278), Ms. Shouraboura ($11,193) and Ms. Wood ($11,597).

(6) Mr. Murray received prorated compensation for his service as the Employee Engagement Director through December 31, 2023, at which point the role of Employee Engagement Director was disbanded.

Director Compensation

Narrative to Non-Employee Director Compensation

Below is a discussion of the material factors necessary to an understanding of the compensation disclosed in the above table.

How We Set Non-Employee Director Compensation

The Board, upon recommendation of the Compensation Committee, determines the annual compensation of Non-Employee Directors each year with account taken of the time and responsibility involved in each role, including, where applicable, serving as Chair of a Board Committee. Directors who are executives of the Company receive no compensation for their Board service. The Compensation Committee consults with Mercer U.S. LLC (“Mercer”), one of its independent compensation consultants, on the director compensation program and reviews survey information of compensation paid to directors serving on boards of similar U.S.-listed companies to determine whether changes are advisable.

Non-Employee Director Fees

A summary of the annualized fees for fiscal 2024 is as follows:

(1) Increase to the Other Non-Employee Directors’ Base Fee from the prior fiscal year was to align to fee levels in the U.S. for Non-Employee Directors (from $110,000 to $120,000). All other Non-Employee Director fees in the table above remained at the same level as fiscal 2023 fees.

(2) Legacy NEDs also had the benefit of a travel allowance and certain tax benefits as described in footnotes (4) and (5) to All Other Compensation in the Director Compensation table.

(3) The amounts provided in the table for the Board Chair’s fees were unchanged in fiscal 2024 and were converted to USD from GBP based on the agreed GBP:USD exchange rate from fiscal 2022 which is GBP 1.00 : USD 1.3041.

(4) Legacy NEDs received no additional compensation for their service on the Ferguson Enterprises Inc. Board from the time of their appointment in February 2024 until August 1, 2024, the effective date of the Merger.

(5) The fees reflected for the role of Employee Engagement Director are prorated since this role was disbanded effective December 31, 2023.

The Non-Employee Directors are not entitled to receive any compensation upon the termination of their appointment and no fees will be payable in respect of any unserved portion of the term of their appointment. Further, Non-Employee Directors are not entitled to participate in the Company’s annual short-term incentive award program or other benefit plans. Each Non-Employee Director is entitled to reimbursement from the Company for reasonable expenses incurred in the performance of their duties. The Non-Employee Directors may, in certain circumstances and at the Company’s expense, obtain independent professional advice in the furtherance of their duties as Directors.

Non-Employee Director Equity Incentive Awards

The Non-Employee Director Incentive Plan 2022 (the “NED Plan”) was adopted by the Ferguson plc Board in September 2022 and approved by Ferguson plc shareholders in November 2022. We issued annual awards of restricted stock units under the NED plan to our Non-Employee Directors in October 2023 in respect of service for fiscal 2024 (the “Original FY24 NED RSU Awards”). The number of restricted stock units awarded was based on a grant date fair market value of $120,000 for non-U.K.-based Non-Employee Directors and £92,000 for our U.K.-based Non-Employee Directors (Messrs. Drabble and May). The Original FY24 NED RSU Awards were subject to time-vesting for one year following the grant date and entitled to accrue dividend equivalents during the vesting period that vest on the same terms and conditions as the underlying restricted stock units.

Director Compensation

However, to align with U.S. practices and to have the vesting concurrent with the annual meeting of stockholders, on March 7, 2024, the Original FY24 NED RSU Awards were cancelled and, for the Non-Employee Directors serving as of March 7, 2024, replaced with restricted stock unit awards under the Ferguson plc 2023 Omnibus Equity Incentive Plan, with the same number of restricted stock units that had previously been issued under the Original FY24 NED RSU Awards, and with a vesting date of Ferguson’s next annual shareholders meeting (such awards, the “Replacement FY24 NED RSU Awards”). The Replacement FY24 NED RSU Awards are entitled to accrue dividend equivalents during the vesting period that vest on the same terms and conditions as the underlying restricted stock units.

As further described in the section entitled “Compensation Discussion and Analysis—General Information on Share Plans,” in connection with the Merger, Ferguson Enterprises Inc. assumed the Ferguson plc 2023 Omnibus Equity Incentive Plan and all awards issued and outstanding thereunder (including the Replacement FY24 NED RSU Awards), and adopted the Ferguson Enterprises Inc. 2023 Omnibus Equity Incentive Plan which has substantially the same terms and conditions as the Ferguson plc 2023 Omnibus Equity Incentive Plan (collectively, the “Omnibus Plan”).

Future grants of restricted stock units are expected to be made to our Non-Employee Directors under the Omnibus Plan in connection with the Company’s annual meeting of stockholders each year and be subject to time-vesting for approximately one year following the grant date. If a new Non-Employee Director is appointed after the date that annual equity awards are granted to our Non-Employee Directors for the year, the new Non-Employee Director will receive a pro-rated award of restricted stock units under the Omnibus Plan with the same terms as made to other Non-Employee Directors for the year (with proration based on such Non-Employee Director’s time of service during the one-year vesting period applicable to the other Non-Employee Director restricted stock unit awards issued for that year). Ms. Agrawal and Mr. Beckwitt received their prorated award under the Omnibus Plan in September 2024.

Stock Ownership Guidelines for Non-Employee Directors

To provide for our Non-Employee Directors to become and remain meaningfully invested in our common stock, they are required under our share ownership guidelines to own shares having a market value equal to four times the Other Non-Employee Directors’ Base Fee (not including additional fees for Board committee chairs or other additional roles). A Non-Employee Director must meet the share ownership requirement within five years from the later of (i) the effective date of the current guidelines (August 1, 2024) or (ii) the Director’s date of appointment. The Non-Employee Directors must retain all future awards (on a net of tax basis) until compliance is achieved. The following shares will count towards the assessment of whether the target is met: (i) shares beneficially held directly or indirectly by the Non-Employee Director and any person closely associated (as set out in the Company’s Insider Trading Policy) with the Non-Employee Director; and (ii) shares awarded equal to the number of unvested restricted stock units or restricted shares granted to the Non-Employee Director, which do not have a performance condition attached, on an assumed net of tax basis.

All of our current Non-Employee Directors have met or are on track to meet the share ownership requirement within the five-year timeframe.

The Audit Committee has selected Deloitte & Touche LLP (“Deloitte” or “Deloitte U.S.”) as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements and internal control over financial reporting for the fiscal year ending July 31, 2025. In Proposal 2, the Company is asking shareholders to ratify this selection.

Although ratification is not required by the Company’s Bylaws or otherwise, the Board is submitting the selection of Deloitte to the Company’s shareholders for ratification. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the selection 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 the Company and its shareholders.

Representatives of Deloitte are expected to be present at the 2024 Annual Meeting and will be available to respond to appropriate questions and will have the opportunity to make a statement if they desire to do so.

Vote Required

Approval of Proposal 2 requires the affirmative “FOR” vote of holders of a majority of the voting power of outstanding shares of common stock present in person or represented by proxy at the 2024 Annual Meeting and entitled to vote thereon. Abstentions have the same effect as a vote “AGAINST.”

Independent Registered Public Accounting Firm’s Fees and Services

Auditor Fees Incurred

The following table sets forth the aggregate fees by the categories specified below in connection with services rendered by Deloitte and its affiliates for fiscal 2023 and fiscal 2024. In connection with the Merger, Deloitte was engaged to serve as the independent registered public accounting firm for Ferguson Enterprises Inc. for the year ended July 31, 2024. We did not pay any other fees to our Independent Auditor or any of its affiliates during the periods indicated below.

(1) Audit fees included $11.3 million (2023: $10.0 million) for the audits of Ferguson plc and Ferguson Enterprises Inc. and consolidated financial statements and $0.7 million (2023: $1.9 million) for statutory audits.

(2) In fiscal 2024, all other fees included $20,000 related to the Company’s subscription to Deloitte’s technical guidance library. All other fees in fiscal 2023 related to services in connection with the Company’s filing of a registration statement on Form S-8, an assurance engagement related to Ferguson Insurance Ltd. and the Company’s subscription to Deloitte’s technical guidance library.

Pre-Approval Policies and Procedures

The policy of the Audit Committee is to pre-approve all audit and non-audit services provided by our Independent Auditor. All of the audit and non-audit services carried out in the fiscal years ended July 31, 2024 and 2023 were pre-approved by the Audit Committee.

Change in Independent Registered Public Accounting Firm

For fiscal 2022, Deloitte LLP (“Deloitte U.K.”) served as Ferguson plc’s independent registered public accounting firm. On October 25, 2022 (the “engagement date”), Ferguson plc engaged Deloitte U.S. as its independent registered public accounting firm for the year ended July 31, 2023. The engagement of Deloitte U.S. followed the Company’s transfer of its primary listing from the LSE to the NYSE. In addition, on the engagement date, Deloitte U.K. confirmed that it would resign as Ferguson plc’s independent registered public accounting firm, given the engagement of Deloitte U.S. The decision to change the Company’s independent registered public accounting firm was approved by the Audit Committee of the Ferguson plc Board and by the Ferguson plc Board.

The audit reports of Deloitte U.K. on the Company’s consolidated financial statements for fiscal 2022 and 2021, and the Company’s effectiveness of internal control over financial reporting as of July 31, 2022, did not contain an adverse opinion or a disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope or accounting principles. During fiscal 2022 and 2021, and through the engagement date, (i) there were no disagreements, within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the instructions relating thereto, with Deloitte U.K. on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of Deloitte U.K., would have caused Deloitte U.K. to make reference to the subject matter of such disagreement(s) in connection with its audit reports on the Company’s consolidated financial statements for fiscal 2022 and 2021, and (ii) there was no reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K and the instructions relating thereto.

During fiscal 2022 and 2021, and through the engagement date, neither the Company nor anyone on its behalf consulted with Deloitte U.S. regarding (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report to the Company nor oral advice was provided that Deloitte U.S. concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue, (ii) any matter that was subject of a disagreement within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the instructions relating thereto, or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of Regulation S-K and the instructions relating thereto.

Independent Registered Public Accounting Firm’s Fees and Services

The change in the Company’s independent registered public accounting firm was previously disclosed in Ferguson plc’s Current Report on Form 8-K filed with the SEC on October 25, 2022. A copy of Deloitte U.K.’s related letter, dated October 25, 2022, was included as an exhibit to such Form 8-K filing.

Audit Committee Report

The Audit Committee is providing this Report pursuant to Item 407(d)(3) of Regulation S-K. The Audit Committee assists the Board in fulfilling its oversight responsibilities, and makes recommendations to the Board as appropriate, in relation to the Company’s financial statements and financial reporting process, the independence and qualifications of the Company’s Independent Auditor, the performance of the Company’s Independent Auditor and internal audit function and the Company’s compliance with legal and regulatory requirements, including internal controls designed for that purpose. For more information about the Audit Committee’s responsibilities, see the Audit Committee Charter, which is available on the Company’s website at corporate.ferguson.com under Governance Documents.

Management is responsible for the Company’s internal controls and the financial reporting process and for compliance with applicable laws and regulations. Deloitte, the Company’s Independent Auditor, is responsible for performing an independent audit of the Company’s most recent consolidated financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States, as well as expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

The Audit Committee’s responsibility is to monitor and oversee these processes. In performing its responsibilities, the Audit Committee reviewed and discussed the Company’s audited consolidated financial statements and the effectiveness of internal control over financial reporting with management and the Independent Auditor. The Audit Committee discussed with the Independent Auditor those matters required to be discussed by auditors with the Audit Committee under the rules adopted by the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. The Independent Auditor also provided to the Audit Committee the letter and written disclosures required by PCAOB regarding the Independent Auditor’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with the Independent Auditor their independence from the Company and its management.

Based on the review and discussions described above, the Audit Committee recommended to the Board (and the Board approved) that the audited consolidated financial statements of Ferguson plc and Ferguson Enterprises Inc. be included in the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2024 as filed with the SEC (the “2024 Form 10-K”).

The Audit Committee of the Board

Suzanne Wood (Chair)

Catherine Halligan

Brian May

Alan Murray

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis (“CD&A”) with management. Based on its review and discussion with management, the Compensation Committee recommended to the Board that the CD&A section be included in this Proxy Statement and incorporated by reference into the 2024 Form 10-K.

Submitted by the Compensation Committee of the Board

Kelly Baker (Chair)

Rick Beckwitt

Geoff Drabble

Catherine Halligan

James S. Metcalf

Executive Compensation

Compensation Discussion and Analysis (“CD&A”)

The purpose of this CD&A is to describe:

Our NEOs consist of our Principal Executive Officer, Principal Financial Officer, and the three other most highly compensated Executive Officers. For fiscal 2024, our NEOs were:

Executive Compensation

Leadership Changes

Ms. Long retired from her position as Chief Human Resources Officer of Ferguson plc effective July 31, 2024. In connection with the Merger, the titles of Messrs. Murphy, Graham and Thees, respectively, were changed from Chief Executive Officer, Chief Legal Officer and Senior Vice President of Business and Sales to President & Chief Executive Officer, Chief Legal Officer & Corporate Secretary and Senior Vice President. In this Proxy Statement, we refer to Mr. Murphy as the “President & Chief Executive Officer” or “CEO.”

Executive Compensation

The compensation disclosures and proposals are organized as follows: