ESCO (ESE) DEF 14ADefinitive proxy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20549

SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO.  )

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ESCO TECHNOLOGIES INC.

(Name of Registrant as Specified in Its Charter)

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

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ESCO Technologies Inc. 9900A Clayton Road St. Louis, MO 63124 Bryan Sayler Chief Executive Officer and President

December 16, 2024 Dear Fellow Shareholders,   I am pleased to invite you to attend our 2025 Annual Meeting of Shareholders of ESCO Technologies Inc., to be held on Tuesday, February 4, 2025 at the Innisbrook Resort, 36750 U.S. Highway North, Palm Harbor, Florida 34684, at 8:00 a.m. Eastern Standard Time.   The accompanying Notice of Annual Meeting and Proxy Statement describe the items of business that will be discussed and voted on at the Meeting. We value your input and encourage you to review this material as well as our Annual Report for fiscal 2024 and to vote your shares of common stock. You have a choice of voting online, by telephone, by returning the enclosed proxy card by mail, or at the Meeting.   Our technology-oriented businesses provide highly engineered solutions serving industrial markets. We have a highly-skilled workforce and a long history of product innovation focused on building the next generation of solutions for our customers.   In 2024 we delivered record revenue, earnings, orders and ending backlog. Revenue exceeded $1 billion for the first time, GAAP EPS increased 10 percent, and ending backlog increased 14% during the year as we continue to see strong demand across our aerospace, defense, utility and renewables end markets. Our differentiated solutions in markets with long-term secular growth drivers have us well positioned going forward. We are excited for the future as we look to build on recent momentum by continuing to execute on our growth strategy in order to deliver long-term value for our shareholders.   On behalf of the Board of Directors and all of us at ESCO, thank you for your ongoing support.   Sincerely,     Bryan Sayler Chief Executive Officer and President

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

St. Louis, Missouri

December 16, 2024

To the Shareholders of ESCO Technologies Inc.:

The 2025 Annual Meeting of the shareholders of ESCO Technologies Inc. will be held on Tuesday, February 4, 2025 at the Innisbrook Resort, 36750 U.S. Highway North, Palm Harbor, Florida 34684, beginning at 8:00 a.m. Eastern Standard Time, for the following purposes:

Shareholders of record at the close of business on November 27, 2024 are entitled to vote at the Meeting.

Information about each of the above Proposals, as well as instructions for voting and additional relevant information concerning the Company, are set forth in the accompanying Proxy Statement and in the “Important Notice Regarding the Availability of Proxy Materials” sent to all shareholders entitled to vote at the Meeting beginning on or about December 16, 2024.

By Order Of The Board Of Directors,

David M. Schatz

Senior Vice President, General Counsel and Secretary

Proxy Statement Table of Contents

Proxy Statement Summary

This Proxy Statement relates to the 2025 Annual Meeting of the shareholders of ESCO Technologies Inc., sometimes referred to herein as the Company, we, our or us. Our stock is listed on the New York Stock Exchange (NYSE), where our ticker symbol is “ESE”.

This Proxy Statement is provided pursuant to the rules of the Securities and Exchange Commission (SEC) in connection with our Management’s solicitation of votes for the Meeting.

This Summary highlights certain information relating to the Meeting and the items to be voted on at the Meeting. For additional information, including important business, compensation and corporate governance matters, please refer to the following sections of this Proxy Statement and to our 2024 Annual Report on Form 10-K. Unless otherwise noted, all references to 2024 in this Proxy Statement refer to our fiscal year ended September 30, 2024.

MEETING INFORMATION

How to Vote

Via the Internet	By Telephone	By Mail	At the Meeting
Go to www.investorvote.com/ESE	1-800-652-VOTE (8563) in the U.S. or Canada	Follow the instructions on your proxy card	Attend in person and vote by ballot

PROPOSALS AND BOARD RECOMMENDATIONS

Management is not aware of any other matters that will be presented at the Meeting. However, if any other proposal is properly presented for a vote at the Meeting, other than the election of directors and the other proposals described in this Proxy Statement, the proxy holders will vote on it in their own discretion.

NOMINEES FOR DIRECTOR

The following table provides summary information about our director nominees, each of whom is a current director of the Company:

DIRECTOR DIVERSITY AND TENURE

Diversity is one of the factors that our Governance Committee considers in identifying the pool of director search candidates. The Board appreciates the benefits diversity brings and strives to assemble a Board with not only a variety of business and professional backgrounds, but also diversity in areas such as race, ethnicity and gender.

COMPANY OVERVIEW AND BUSINESS HIGHLIGHTS

We are:

We conduct our business through a number of wholly-owned direct and indirect subsidiaries. Our business is focused on generating predictable and profitable long-term growth through continued innovation and expansion of our product offerings across each of our business segments.

In 2024, strong demand across our core end-markets drove record orders and sales. We leveraged that growth to deliver improved profit margins and diluted EPS that increased 10 percent to $3.94 per share. With a solid balance sheet and substantial liquidity, we remain well positioned to fund both future investments to drive organic growth and acquisitions to add to our technology-driven portfolio of products and services.

The following are only selected measures of Company performance. For complete financial information, please see the audited financial statements included in our 2024 Annual Report to Shareholders.

GOVERNANCE HIGHLIGHTS

 

All directors other than the CEO are independent

 

All committee chairs are independent

 

Each director attended at least 75% of Board and committee meetings

 

Independent directors hold executive sessions during each Board meeting

 

Board conducts self-assessments annually

 

	The full Board exercises oversight responsibility for material risks, and delegates oversight of other risks to the appropriate committees
	Four of our nine directors are diverse in gender and/ or ethnicity

 

 

Robust clawback policy for executive compensation plans

 

Competitive share ownership guidelines for directors and executive officers

 

Executive compensation driven by pay for performance

 

Annual shareholder vote on executive compensation

 

Executive officers and directors may not hedge or pledge company shares

 

Independent directors review CEO performance annually

 

Average tenure of independent directors is 6 years

 

Median age of independent directors is 64 years

 

EXECUTIVE COMPENSATION HIGHLIGHTS

Our compensation objective is to develop and maintain an industry-competitive compensation program that attracts, retains, motivates and rewards our executive officers and other senior officers and key executives. The compensation program is designed to emphasize performance-based compensation in alignment with our business strategy.

Our compensation programs are designed to maximize shareholder value by allocating a significant portion of executive compensation to performance-based pay that is dependent on the achievement of our performance goals. Our annual cash incentive program and equity-based Performance Share Unit awards (PSUs) utilize a variety of key strategic and financial performance metrics and are designed to reward positive financial performance and limit unnecessary risk taking. Stock ownership guidelines align the interests of executives and shareholders by ensuring that executives bear the economic risk of share ownership.

For 2024, our Human Resources and Compensation Committee used the performance metrics “Adjusted EPS” and “Adjusted Cash Flow from Operating Activities,” to determine cash incentive plan compensation earned during fiscal 2024 and thereby incent the participants and align cash incentive compensation with business objectives. Adjusted EPS and Adjusted Cash Flow from Operating Activities are non-GAAP measures, and the metrics used in the calculation of the 2024 adjustment differed somewhat from those used to calculate the 2023 adjustment; for a detailed description and a reconciliation to the nearest GAAP measure, see 2024 Cash Incentive Metrics in the Compensation Discussion and Analysis section.

Our long-term equity incentive (LTI) program includes Restricted Share Units (RSUs) which fully vest over a period of 3 to 3½ years and, since fiscal 2022, PSUs with a 3-year performance period, as described in the Compensation Discussion and Analysis section below.

The following charts summarize the 2024 pay mix for the CEO and the other named executive officers, with 75% of the CEO’s target direct compensation at risk and 60% of the average of the other named executive officers’ target direct compensation at risk. Target direct compensation is defined as the sum of the executive officer’s base salary, annual cash incentive award, and annual long term incentive awards, in each case calculated at the target level approved by the Committee.

Voting

Whether or not you expect to be present in person at the Meeting, please vote in advance using one of the voting methods described in the Important Notice Regarding the Availability of Proxy Materials sent to the shareholders on or about December 16, 2024, which contained instructions on how to access the proxy materials and vote electronically via the Internet, by telephone, by mail, or in person. That Notice also contained instructions on how to request a paper or e-mail copy of the proxy materials, including the Company’s 2024 Annual Report to Shareholders, this Proxy Statement, and a proxy card. The 2024 Annual Report to Shareholders and this Proxy Statement are also available for review on the Company’s website, www.escotechnologies.com.

You will have the right to revoke your proxy at any time before it is voted by giving written notice of revocation to the Secretary of the Company, or by duly executing and delivering a proxy bearing a later date, or by attending the Meeting and casting a contrary vote in person.

HOW TO VOTE

Via the Internet	By Telephone	By Mail	At the Meeting
Go to www.investorvote.com/ESE	1-800-652-VOTE (8563) in the U.S. or Canada	Follow the instructions on your proxy card	Attend in person and vote by ballot

REQUIRED VOTE

At the Meeting, shareholders will be entitled to cast one vote for each share held by them of record on the record date. There is no cumulative voting with respect to the election of directors. The Company has no non-voting shares.

The affirmative vote of the holders of a majority of the shares represented in person or by proxy at the Meeting and entitled to vote on the matter in question will be required to elect directors, to approve each of the individual proposals described in this Proxy Statement, and to approve any other matters properly brought before the Meeting.

The Company’s Corporate Governance Guidelines provide that an incumbent director who fails to obtain a majority vote must promptly offer his or her resignation to the Chair, and the remaining directors shall meet to consider whether it is in the best interests of the Company to accept the resignation or to permit the incumbent to remain on the Board for such period of time as the Board may determine or until a successor is elected and qualified.

Shares represented by proxies which are marked “Withhold” authority to vote for the election of one or more of the nominees for election as directors or marked “Abstain” on any one or more of the other individual proposals described in this Proxy Statement will be counted for the purpose of determining the number of shares represented by proxy at the Meeting, but proxies so marked will have the same effect as if the shares were voted against such nominee or nominees or such proposals.

Under the Rules of the NYSE, the proposal to approve the appointment of independent registered public accountants is considered a “discretionary” item, which means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least 10 days before the date of the Meeting. In contrast, the election of directors and the other items on the Meeting agenda are “non-discretionary” items, which means that brokerage firms that have not received voting instructions from their clients on these proposals may not vote on them. These so-called “broker non-votes” will, if the underlying shares are otherwise represented at the Meeting, be considered to be present for purposes of determining a quorum, but will be treated as not entitled to vote on such non-discretionary or matters; they will therefore not be considered in determining the number of votes necessary for approval and will have no effect on the outcome of the votes for directors or the other matters to be considered at the Meeting.

If your shares are held by a broker, it is important that you provide voting instructions to your broker so that your votes will be counted.

Proposal 1: Election of Directors

The Board is divided into three classes, with the terms of office of each class ending in successive years. The terms of Class II directors Penelope M. Conner, Leon J. Olivier and Gloria L. Valdez will expire at the Meeting. However, because Mr. Olivier has reached the age of 75 he is ineligible to stand for re-election under the Board’s director retirement policy and will retire from the Board effective with the election of directors at the 2025 Annual Meeting. Accordingly, with the consent of director David A. Campbell, whose current term would not have expired until 2027, the Board has reclassified Mr. Campbell from Class I into Class II and has nominated Mr. Campbell, Ms. Conner and Ms. Valdez for election to new three-year terms expiring at the 2028 Annual Meeting. The Board also decided to reduce the number of directors from nine to eight upon the expiration of Mr. Olivier’s term. As a result, after the 2025 Annual Meeting the Board will have three directors with terms expiring in 2028, two directors with terms expiring in 2027, and three directors with terms expiring in 2026.

If elected, the nominees would serve until the expiration of their terms and until their successors have been elected and qualified. Proxies cannot be voted for more than the number of Board nominees. Should any one or more of the nominees become unable or unwilling to serve (which is not expected), the proxies unless marked to the contrary will be voted for such other person or persons as the Board may recommend.

Responsibilities

The Company’s Board of Directors is ultimately responsible for the conduct of the business of the Company in accordance with ethical and honorable business practices and applicable laws, to justify the confidence that the shareholders have placed in the Company by their investment in its shares. Among the Board’s core responsibilities are to:

Composition and Recent Changes

In February 2024, director James M. Stolze retired from the Board, and in August 2024, the Board elected new directors David A. Campbell and Penelope M. Conner. Because of their positions as executives of energy companies, Mr. Campbell’s and Ms. Conner’s elections were subject to clearance by the Federal Energy Regulatory Commission, which was obtained in September 2024 and October 2024, respectively.

The Board is currently comprised of nine directors divided into three classes, with the terms of office of each class ending in successive years. In anticipation of director Leon J. Olivier’s retirement at the 2025 Annual Meeting, the Board decided to move Mr. Campbell (with his consent) into Mr. Olivier’s class and to decrease the size of the Board from nine to eight members effective with the expiration of Mr. Olivier’s term.

Independence

Mr. Sayler is the only Board member who is a member of the Company’s management. The Board of Directors has affirmatively determined that none of the eight non-management directors has any material relationship with the Company other than in his or her capacity as a director and shareholder, and that therefore all of those directors are, and at all times during their service in fiscal 2024 were, independent as defined under the Company’s Corporate Governance Guidelines and the listing standards of the NYSE.

Meetings

The Board of Directors held five meetings during fiscal 2024. All of the directors attended, either in person or by video conference call, at least 75% of the meetings of the Board and of each of the committees on which they served which were held during their periods of service. The Company’s policy requires that all directors attend the Annual Meeting of Shareholders, except for absences due to causes beyond the reasonable control of the director. All of the directors serving at the time of the 2024 Annual Meeting attended the meeting.

Diversity is one of the factors that the Governance Committee considers in identifying the pool of director search candidates. The Board appreciates the benefits diversity brings and strives to assemble a Board with not only a variety of business and professional backgrounds, but also diversity in areas such as race, ethnicity and gender. 

The members of the Board of Directors are appointed to various committees. The standing committees of the Board are the Executive Committee, the Audit and Finance Committee (Audit Committee), the Nominating and Corporate Governance Committee (Governance Committee), and the Human Resources and Compensation Committee (Compensation Committee).

Each Committee operates under a written charter adopted by the Board of Directors. The charters are posted on the Company’s website, www.escotechnologies.com, under the Investor Center/Committees & Charters tab, and a copy of each Committee’s charter is available in print to any shareholder who requests it.

Executive Committee

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight responsibilities for the integrity of the Company’s financial statements; the Company’s compliance with legal and regulatory requirements; the qualifications, independence and performance of the Company’s independent public accounting firm (the Accounting Firm); and the performance of the Company’s internal audit function.

The Board of Directors has determined that all members of the Committee are financially literate and have accounting or related financial management expertise, as those terms are defined under the Company’s Corporate Governance Guidelines and the applicable listing standards of the NYSE, and are also “audit committee financial experts” within the meaning of Item 407(d)(5)(ii) of SEC Regulation S-K.

Governance Committee

The Governance Committee assists the Board in fulfilling its Corporate Governance responsibilities.

Director Candidates and Nominations

To be considered for nomination to the Board, candidates must be persons of the highest integrity, have extensive and varied business experience and have demonstrated their ability to interact effectively with associates and peers. They preferably will also have experience and expertise in business areas related to the Company and its technologies, industries and customers. In addition, the Committee will seek out candidates with the ability to interact constructively with the existing Board membership, in order to enable the Board to act in the long-term interests of the Company’s shareholders. While the Committee has not established specific minimum qualifications for candidates, it may establish specific membership criteria as appropriate from time to time if the Board determines there is a need for specific skills and industry experience.

Although the Committee does not have a formal policy on diversity, it seeks the most qualified candidates without regard to race, color, national origin, gender, religion, disability or sexual orientation. However, the Committee appreciates the benefits that diversity, including gender diversity, brings to a board of directors, and both the Committee and the full Board are committed to requiring the inclusion of women and underrepresented minorities in the initial pool of director search candidates.

The Committee may identify new candidates for nomination based on recommendations from Company management, employees, non-management directors, shareholders and other third parties. It also has the authority to engage third party search firms to identify candidates, and it has done so from time to time. Consideration of a new candidate typically involves the Committee’s review of information pertaining to such candidate and a series of internal discussions, and may proceed to interviews with the candidate. New candidates are evaluated based on the above-described criteria in light of the specific needs of the Board and the Company at the time. Incumbent directors whose terms are set to expire are evaluated based on the above-described criteria, as well as a review of their overall past performance on the Board of Directors.

The Committee will consider director candidates recommended by shareholders, and will evaluate such individuals in the same manner as other candidates proposed to the Committee. All candidates must meet the legal, regulatory and exchange requirements applicable to members of the Board of Directors. Shareholders who wish to recommend individuals for consideration as director candidates for the 2026 Annual Meeting of Shareholders should notify the Committee no later than August 31, 2025 in order to allow time for their recommendations to be considered by the Committee. Submissions are to be addressed to the Nominating and Corporate Governance Committee, c/o David M. Schatz, Corporate Secretary, ESCO Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186, which submissions will then be forwarded to the Committee. The Committee is not obligated to nominate any such individual for election.

Compensation Committee

The Compensation Committee’s basic responsibility is to assure that the Company’s directors, key executives and other senior officers are compensated in a manner consistent with and in furtherance of Company strategy, competitive practices, and the requirements of the appropriate regulatory bodies.

Compensation Committee Interlocks and Insider Participation.

During fiscal 2024, none of the members of the Compensation Committee (i) was an officer or employee of the Company; (ii) was formerly an officer of the Company; or (iii) had any other relationship requiring disclosure under any paragraph of Item 404 or under Item 407(e)(4) of SEC Regulation S-K. In addition, during fiscal 2023, none of the Company’s executive officers served as a member of the board of directors or compensation committee of any entity that had one or more executive officers serving as a member of the Company’s Board of Directors or the Compensation Committee.

The Board’s Role in Risk Oversight

The Company’s management is responsible for managing the Company’s risks on a day-to-day basis, and has adopted an ongoing enterprise risk management process that it uses to identify and assess Company risks. Management has identified risks in four general areas: Financial and Reporting; Legal and Compliance; Operational; and Strategic. Periodically, management advises the Board and the appropriate Board committee of the risks identified; management’s assessment of those risks at the business unit and corporate levels; its plans for the management of these identified risks or the mitigation of their effects; and the results of the implementation of those plans.

While the Board as a whole has responsibility for and is involved in the oversight of management’s risk management processes, plans and controls, some of the identified risks are given further review by the Board committee most closely associated with the identified risks. For example, the Audit Committee provides additional review of the risks in the areas of accounting and auditing, liquidity, credit, tax, information security and cybersecurity. Similarly, the Compensation Committee provides additional review of risks in the area of compensation and benefits and human resource planning. The Governance Committee devotes additional time to the review of risks associated with corporate governance, ethics, legal and ESG issues.

Governance Policies and Management Oversight

The Board of Directors has adopted Corporate Governance Guidelines to guide its actions, as well as a Code of Conduct applicable to all of the Company’s directors, officers and employees. Additionally, the Board has adopted a Code of Ethics for Senior Financial Officers applicable to the Company’s Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and persons performing similar duties. These documents are posted on the Company’s web site, www.escotechnologies.com, under the Investor Center/Governance Documents tab, and a copy of any of these documents is also available in print to any shareholder who requests it.

Insider Trading and Clawback Policies

In furtherance of the Corporate Governance Guidelines and the Code of Conduct, and in coordination with applicable securities-related laws and regulations, the Board of Directors has adopted robust policies regarding Insider Trading, including prohibitions against hedging and (for certain senior Company officials) pledging transactions involving Company stock, and policies permitting the Company to “claw back” all or part of the values of certain Company equity awards to executives or senior personnel in certain cases. Further information about these policies is set forth under Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies and Clawback Policy beginning on page 34.

Cybersecurity

Global information technology security threats and targeted computer crime are increasing in frequency and sophistication. As these risks increase, the Company has enhanced its use of technologies and internal controls to protect our systems, networks and data. The Company’s cybersecurity program includes employee training and testing, information security policies and procedures, third-party monitoring of our networks and systems, and maintenance of backup and other protective systems. Governmental authorities, including the United States government, have increasingly focused on cybersecurity requirements for government contractors. The Company’s subsidiaries that serve in these capacities are increasingly focused on cybersecurity as they seek to comply with the US Department of Defense Cybersecurity Maturity Model Certification (CMMC) program and related governmental mandates.

The Audit Committee annually reviews the major financial risk exposures including cyber security and policies or controls management has implemented to manage and mitigate risks, and quarterly reviews management’s assessment and oversight of cybersecurity and information technologies risks and any required remediation actions. The full Board annually reviews the Company’s cybersecurity initiatives.

Succession Planning

The Compensation Committee of the Board conducts an annual review of the Company’s long-term succession plan for the CEO. Having this succession plan in place enabled the Board to name Mr. Sayler as the successor to Victor L. Richey as CEO in late 2022 promptly after Mr. Richey notified the Board of his decision to retire. Additionally, the Board has in place an emergency succession plan for the CEO in order to minimize the uncertainty associated with an emergency succession event.

Independence and Related Person Determinations

All of the Company’s directors except Mr. Sayler are and will be independent of Company management. Additionally, all of the members of the Audit Committee, the Compensation Committee and the Governance Committee are independent as defined by the New York Stock Exchange and set forth in the Company’s Corporate Governance Guidelines.

The Company has implemented a written policy not only to ensure that all non-management directors meet the independence standards defined under the Company’s Corporate Governance Guidelines and the listing standards of the NYSE but to ensure that all Company transactions in which a “Related Person” has or will have a direct or indirect interest will be at arm’s length and on terms generally available to an unaffiliated third-party under the same or similar circumstances. “Related Persons” include the Company’s directors, director nominees and executive officers, holders of 5% or more of the Company’s stock, and the immediate family members of each. The policy contains procedures requiring Related Persons to notify the Company of any such transaction and for the Governance Committee to review the material facts of the proposed transaction and determine whether to approve or disapprove the transaction. The Committee will consider whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances. If advance Committee approval is not feasible or is not obtained, the policy requires submission of the transaction to the Committee after the fact, and the Committee is empowered to approve, ratify, amend, rescind or terminate the transaction. In such event, the Committee will also request the General Counsel to evaluate the Company’s controls and procedures to ascertain whether any changes to the policy are recommended.

The Company has developed and implemented processes and controls to obtain information about Related Person transactions for the purpose of determining, based on the facts and circumstances, whether a Related Person has a direct or indirect material interest in the transaction. Pursuant to these processes and controls, all directors and executive officers must annually complete, sign and submit a Directors’ and Officers’ Questionnaire and a Conflict of Interest Questionnaire that are designed to identify Related Person transactions and both actual and potential conflicts of interest, and are required to update their responses in the event of any changes. Additionally, the holders of 5% or more of the Company’s shares (all of whom are institutional investors), are annually requested to respond to certain questions designed to identify direct or indirect material interests by such 5% or more shareholder in any transactions with the Company.

Based on its review and processes, the Company has determined that except for the matters described in the following paragraphs there has been no transaction since the beginning of the Company’s 2024 fiscal year, and there is no transaction currently proposed, in which the Company was or is to be a participant and in which any Related Person had or will have a direct or indirect material interest.

One of the Company’s directors, David A. Campbell, is the President, Chief Executive Officer and Chairman of the Board of Evergy, Inc. (Evergy), which through its operating subsidiaries is a customer of the Company’s subsidiary Doble Engineering Company and its subsidiaries and affiliates (together, Doble). Accordingly, the Board has affirmatively considered whether this relationship might affect Mr. Campbell’s independence as a director of the Company. The Board determined that Doble, among other things, sells and leases equipment and software to Evergy, repairs and calibrates the equipment and maintains the software, and provides testing, training and consulting services to Evergy, all in the ordinary course of their respective businesses; that the total amount of these transactions was less than $932,000 during 2023 (the last year for which information was available for Evergy), which is approximately 0.096% of the Company’s 2023 revenues and approximately 0.04% of Evergy’s spend for 2023; that Mr. Campbell was not personally involved in these transactions; and that all transactions between Doble and Evergy are intended to be and have been consistent with Doble’s normal commercial terms offered to its customers.

In addition, another of the Company’s directors, Penelope M. Conner, is the Executive Vice President of Customer Experience and Energy Strategy of Eversource Energy (Eversource), which through its operating subsidiaries is a customer of Doble. Accordingly, the Board has affirmatively considered whether this relationship might affect Ms. Conner’s independence as a director of the Company. The Board determined that Doble, among other things, sells and leases equipment and software to Eversource, repairs and calibrates the equipment and maintains the software, and provides testing, training and consulting services to Eversource, all in the ordinary course of their respective businesses; that the total amount of these transactions was less than $3,578,000 during 2023 (the last year for which information was available for Eversource), which is approximately 0.369% of the Company’s 2023 revenues and approximately 0.076% of Eversource’s spend for 2023; that Ms. Conner was not personally involved in these transactions; and that all transactions between Doble and Eversource are intended to be and have been consistent with Doble’s normal commercial terms offered to its customers.

Based on its review and consideration of these facts, Mr. Campbell’s and Ms. Conner’s oral and written representations and the Federal Energy Regulatory Commission’s approval of Mr. Campbell’s and Ms. Conner’s directorships, the Board determined that the relationships between the Company and Evergy and between the Company and Eversource are not material, that the relationships will not affect Mr. Campbell’s or Ms. Conner’s independent judgment on matters affecting the Company, and that Mr. Campbell and Ms. Conner are each independent under the standards of both the New York Stock Exchange and the Company’s Corporate Governance Guidelines.

Communications with Directors

Interested parties desiring to communicate concerns regarding the Company to the Chair of the Board or to the non management Directors as a group may direct correspondence to: Mr. Robert J. Phillippy, Chair, ESCO Technologies Board of Directors, ESCO Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186. Alternatively, interested parties who wish to communicate with an individual director or any group of directors may write to such director(s) at ESCO Technologies Inc., 9900A Clayton Road, St. Louis, MO 63124-1186, Attn: Secretary. All such letters will be forwarded promptly to the relevant director(s).

The responsibilities and the substantial time commitment of a director at a public company require that the Company provide reasonable compensation to incentivize the directors’ performance and ensure their willingness to continue to serve. The Company strives to engage and retain well-qualified directors with significant experience at companies of similar size and complexity. To ensure this is achieved, the Company regularly reviews the compensation provided to its directors. The Company’s non-employee directors are compensated pursuant to the Sub-Plan for Compensation of Non-Employee Directors under the 2018 Omnibus Incentive Plan (the Director Compensation Plan) based upon their respective levels of Board participation and responsibilities. The Compensation Committee obtains competitive market and peer data and periodically retains a compensation consultant to evaluate the competitiveness of its director compensation. The Committee approves the directors’ compensation, but any changes are ratified by the full Board. As an employee of the Company, Mr. Sayler does not receive compensation for his service as a director.

The annual compensation for non-employee directors is based on a calendar year and is paid or awarded, as the case may be, on and as of the first NYSE trading day after each Annual Meeting of Shareholders.

Components of 2024 and 2025 Director Compensation

The annual equity award consists of a number of restricted share units (RSUs) equal to $180,000 divided by the NYSE closing price of the common stock on the award date, rounded to the nearest whole share and vesting one year after the award date. The equity award for calendar 2024 was made on February 8, 2024 and will vest on February 8, 2025. Based on the NYSE closing stock price of $103.84 on the award date it amounted to 1,733 RSUs per director.

The partial-year calendar 2024 equity award to Mr. Campbell was made on October 16, 2024, based on the NYSE closing stock price of $124.57 on September 25, 2024, the effective date of his election; rounded to the nearest whole share it amounted to 722 RSUs. The partial-year 2024 equity award to Ms. Conner was made on November 6, 2024, based on the NYSE closing stock price of $127.89 on October 25, 2024, the effective date of her election; rounded to the nearest whole share it amounted to 704 RSUs. Like the full-year annual awards, each award will vest one year after the award date. Mr. Campbell elected to defer receipt of his 2024 equity award and cash retainer as described below.

During the vesting period, each director’s RSU account accrues an additional number of unvested RSUs equivalent to the quarterly dividends that would have been paid on a like number of shares of common stock, divided by the NYSE closing price on the dividend date; and on the vesting date the director’s accrued and vested RSUs are converted into whole shares of common stock, plus cash equal to the value of any fractional shares based on the NYSE closing price on the vesting date, and are distributed and paid to the director, or if the director has elected to defer their compensation as described below, the RSUs are retained in the director’s deferred compensation account as vested common stock equivalents until the elected distribution date.

2025 Compensation

The Compensation Committee reviewed the non-management directors’ annual compensation program in August 2024, and based on its recommendations the Board determined to increase the annual compensation of the Committee Chairs for calendar 2025 as stated in the table above.

Election to Defer Compensation

Directors may elect in advance to defer receipt of all of their cash compensation and/or all of their stock compensation. If deferral is elected, the deferred amounts are credited to the director’s deferred compensation account in common stock equivalents. If cash compensation is deferred, the number of common stock equivalents credited is equal to the amount deferred divided by the NYSE closing price of the common stock as of the date on which the deferral occurs (or if that is not a trading day, then the last preceding trading day). If stock compensation is deferred, the number of common stock equivalents credited is equal to the number of shares whose receipt is deferred. Common stock equivalents in the director’s deferred compensation account have no voting rights, but earn dividend equivalents on each dividend payment date equal to the dividends payable on a like number of shares of common stock; and the dividend equivalents earned are credited to the director’s deferred compensation account as additional common stock equivalents valued at the NYSE closing price on the dividend date. A director’s deferred compensation account becomes distributable when the director leaves the Board, or at such other date as may be specified by the director consistent with the terms of the Director Compensation Plan; distribution will be accelerated in certain circumstances, including a change in control of the Company. The account is distributable at the election of the director either in cash or in shares; however, any stock portion which has been deferred may only be distributed in shares. For fiscal 2024, Mr. Campbell, Mr. Dewar, Ms. Hess and Mr. Olivier elected to defer receipt of their cash compensation and stock compensation and Ms. Valdez elected to defer receipt of her cash compensation, as described in the footnotes to the Fiscal 2024 Compensation table below. In addition, Mr. Phillippy’s and Ms. Valdez’s cash and stock compensation from certain prior years continued to be deferred pursuant to prior deferral elections which they had terminated as to future compensation.

Director Stock Ownership Guidelines

Directors are subject to stock ownership guidelines. Under these guidelines, within five years after their appointment to the Board each non-management director is expected to acquire and hold shares or common stock equivalents having a total cash value equal to at least five times the annual cash retainer. All directors currently exceed the ownership guidelines except for Mr. Campbell and Ms. Conner, who are on track to reach the guideline amount in 2026.

Fiscal 2024 Compensation

The following table sets forth the compensation of the Company’s non-management directors for fiscal 2024, including former director James M Stolze, who retired at the February 2024 Annual Meeting. Ms. Conner did not begin her service as a director until October 2025 and therefore received no compensation for fiscal 2024. As an executive officer, Mr. Sayler did not receive any additional compensation for his service as a director; his compensation is described under Proposal 2: Advisory Vote on Executive Compensation beginning on page 23.

Proposal 2: Advisory Vote to Approve Executive Compensation

Pursuant to Section 14(a) of the Securities Exchange Act of 1934, the Board of Directors is again soliciting an advisory (non-binding) shareholder vote, commonly referred to as “Say-on-Pay”, to approve the compensation of the executive officers whose compensation is disclosed in this Proxy Statement (the named executive officers or NEOs). At our 2024 Annual Meeting, over 98% of the shares represented and entitled to vote on the Say on Pay proposal, and over 91% of all outstanding shares, were voted in support of the Say-on-Pay proposal. Based on the preference of over 93% of the votes cast on the frequency of the Say-on-Pay proposals in 2023, we plan to continue to hold a Say-on-Pay vote every year.

The Board of Directors strongly endorses our executive compensation program and recommends that the shareholders vote in favor of the following Resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers as disclosed in the Company’s Proxy Statement for the 2025 Annual Meeting of Shareholders pursuant to the executive compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and narrative disclosure.”

Shareholders are encouraged to review the Compensation Discussion and Analysis section below as well as the Summary Compensation Table and the other related tables and narrative disclosure referred to in the proposed Resolution, which provide details about our executive compensation program as well as specific information about the compensation of our named executive officers.

This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers as described in this Proxy Statement. Although the vote is non-binding, the Board of Directors and the Compensation Committee value the opinions of the shareholders, and to the extent there is a significant vote against the above resolution the Company will consider the shareholders’ concerns and the Committee will evaluate what actions (if any) may be necessary to address those concerns.

SUMMARY OF EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program is designed to attract, motivate, and retain executive officers who are critical to our success. The Committee believes that the program constitutes a balanced, competitive approach to compensation that supports our compensation objectives through performance-based compensation that aligns the interests of executives with those of our shareholders.

The Compensation Committee reviews our compensation program at least annually to ensure that it achieves the desired goals of aligning our executive compensation structure with shareholders’ interests and current market practices.

COMPENSATION COMMITTEE REPORT

The Compensation Committee is responsible for determining the compensation of the Chief Executive Officer and President as well as other senior officers and key executives of the Company. The Committee has reviewed and discussed with management the Company’s disclosures under the section captioned Compensation Discussion and Analysis beginning immediately following this Compensation Committee Report.

Based on such review and discussion, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 filed with the SEC.

The Human Resources and Compensation Committee

Vinod M. Khilnani, Chair

Patrick M. Dewar

Robert J. Phillippy

Gloria L. Valdez

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis discusses the compensation of the following NEOs.

2024 Performance Highlights

2024 Performance Related to Executive Compensation

The Compensation Committee established two performance metrics, “Adjusted EPS” and “Adjusted Cash Flow from Operating Activities,” to determine incentive plan compensation earned during fiscal 2024 and thereby incent the participants and align cash incentive compensation with business objectives. Adjusted EPS and Adjusted Cash Flow from Operating Activities are non-GAAP measures, and the factors used in the calculation of the 2024 adjustments differed slightly from those used to calculate the 2023 adjustments; for a detailed description and a reconciliation to the nearest GAAP measure, see 2024 Cash Incentive Metrics, below.

Pay for Performance

Our compensation programs are designed to maximize shareholder value by allocating a significant portion of executive compensation to at-risk pay. Our annual cash incentive program and equity-based PSUs utilize a variety of key strategic and financial performance metrics and are designed to reward positive financial performance and limit unnecessary risk taking. Stock ownership guidelines align the interests of executives and shareholders by ensuring that executives bear the economic risk of share ownership.

Compensation Objective

The Compensation Committee’s objective is to develop and maintain industry-competitive compensation packages to attract, retain, motivate and reward our executive officers and other senior officers and key executives. Compensation programs are designed to be consistent with those of other companies engaged in similar industries and/or of similar size with which we are likely to compete for talent to enable us to employ and retain a high-quality management team. The Committee seeks to use performance-based compensation to maximize the alignment of executive compensation with the long-term interests of our shareholders.

The Committee sets compensation levels based on the skills, experience and performance of each executive officer, taking into account the benchmarking described below and compensation recommendations made by the CEO (except with respect to his own position). The Committee’s pay for performance philosophy is reflected in the annual compensation review. The Committee also considers tally sheets which provide, for each executive officer, a recap of each principal element of compensation as well as benefits, perquisites, equity awards, and stock ownership and potential ownership. The tally sheets also reflect the incremental compensation which would be payable as a result of various termination scenarios and each element of pay or benefits impacted. The Committee retains the discretion to adjust all elements of compensation as it deems appropriate, subject to the requirements of shareholder-approved plans.

Executive Compensation Program Highlights

The following table summarizes the 2024 target direct compensation pay mix for the CEO and other NEOs, with approximately 75% of the CEO’s target direct compensation at risk and 60% of the average of the other NEOs’ target direct compensation at risk. Target direct compensation is defined as the sum of the executive officer’s base salary, annual cash incentive award, and annual long term equity incentive awards, in each case calculated at the target level specified by the Compensation Committee.

Compensation Consultant and Benchmarking

The Compensation Committee is authorized by its charter to employ independent compensation and other consultants. The Committee has typically engaged a nationally recognized compensation consulting firm (Compensation Consultant) every other year to assist the Committee in evaluating executive compensation. The Compensation Consultant provides information, research and analysis pertaining to executive compensation as requested by the Committee, including updates on market trends, survey data and analysis for market review. The Committee also from time to time engages our primary outside counsel, Bryan Cave Leighton Paisner LLP (BCLP) to advise it on selected executive compensation issues.

The Committee conducts a peer and market review every two years; the most recent review was in 2022, as described below.

2022 Compensation Report (Fiscal 2023 Compensation Review)

In the summer of 2022, the Committee engaged Pay Governance LLC as the Compensation Consultant to provide a compensation report (the 2022 Compensation Report) for the Committee’s fiscal 2023 compensation review. One of the elements of the 2022 Compensation Report was the 2022 Mercer Benchmark Database/Total Remuneration Survey – Executive (the Mercer Survey), a broad-based survey of management compensation, as the primary source for benchmarking its executive compensation levels. A broad market survey provides decision-quality data that is generally reliable and consistent year-over-year. The Company was a participant in the Mercer Survey. A list of all of the participating companies included in the Mercer Survey is attached as Appendix A to this Proxy Statement.

For its 2022 Compensation Report, the Compensation Consultant also provided proxy data from the peer group described below (2022 Peer Group) to be used in conjunction with the Mercer Survey in order to add context to the decision-making process and provide a supplemental perspective on the market. Peer group proxy data provides transparent line-by-line information for each company in the peer group, and provides the ability to review industry trends and compensation design practices as well as pay-for-performance alignment. The 2022 Peer Group was based on the SIC codes assigned to the Company’s subsidiaries and represented companies in the following industries in which the Company participates:

Companies in the above industries were then filtered for revenue size in order to determine the 2022 Peer Group. The following is a list of the companies in the 2022 Peer Group, with their ticker symbols:

*These companies did not report compensation data for the General Counsel position in their proxy materials.

Fiscal 2024 Benchmarking

For its compensation review for fiscal 2024, the Committee reviewed each principal element of compensation (base salary, cash incentive and LTI), as well as total cash compensation (base salary and cash incentive), and total direct compensation (target cash compensation and LTI) for each of the Company’s executive officer positions, and compared them against the benchmark range from the Compensation Report. For all three of the NEOs, the benchmark range for each element of compensation in the Compensation Report is the median plus or minus 15% as aged by 4%. For fiscal 2024, the Committee utilized the benchmark ranges from the Compensation Report, as aged by 4%, in determining the competitiveness of the executives’ compensation. The Committee also compared relative Company performance against the performance of the companies in the 2022 Peer Group to test the overall reasonableness of pay for performance.

The Committee used the Compensation Report described above as a guideline and frame of reference in determining appropriate compensation levels and incentives for the executive officers; however, the Committee does not make its decisions according to a formula, and the Committee exercises considerable judgment and discretion in making them. The complexity and composition of the Company does not lend itself to comparisons with a readily ascertainable peer group, and while matching by SIC codes can provide some measure of comparability, there are wide variations in the type and complexity of these companies. The Committee therefore considers the benchmark ranges to be only a guide, and makes individual determinations of compensation for each of the executive officers based on numerous factors including the comparative responsibilities of the executive officers and the Committee’s assessments of individual and Company performance.

Compensation Consultant Independence

In August 2024, the Committee assessed the independence of Pay Governance and BCLP in line with the SEC’s compensation consultant independence factors, and determined there were no conflicts of interest. The Committee will continue to review their independence status annually and will keep the compliance letters on file.

Principal Elements of Compensation Program

The principal elements of the 2024 compensation program for executive officers (base salary, annual cash incentive and long-term equity incentive) are reflected in the Summary Compensation Table on page 36. Each of these elements is described in detail in the corresponding sections below.

We do not believe that any risks arising from our compensation policies and practices are reasonably likely to have a material adverse effect on the Company. Any such risk is mitigated by the multiple elements of the compensation programs, including base salary, annual cash incentive programs, and LTI awards which are earned over multiple years. This structure encourages decision-making that is in the best long-term interests of the Company and our shareholders.

Total Direct Compensation

The executive officers receive total direct compensation consisting of cash compensation (base salary plus annual cash incentive compensation) and long-term equity incentive compensation. Each of these elements is described in detail in the corresponding sections below.

The Committee sets target levels for total direct compensation based on the skills, experience, breadth of their role, and performance of each executive officer, taking into account the benchmarking described above and compensation recommendations made by the CEO (except with respect to his own position). The Committee also considers the Company’s performance. For fiscal 2024, the Committee increased the executive officers’ total direct compensation as described in detail below. Total direct compensation for fiscal 2024 was within the benchmark range for Mr. Schatz, slightly above the benchmark range for Mr. Tucker, and below the benchmark range for Mr. Sayler.

Base Salaries

Base salaries are designed to attract, retain, motivate and reward competent, qualified, experienced executives, although we emphasize performance-based compensation for the executive officers.

Fiscal 2024 base salaries for the executive officers were set by the Committee in the first quarter of fiscal 2024. Annual base salaries for the executive officers for fiscal 2024 and fiscal 2023 were as follows:

Base Salaries¹

1   Amounts shown are annual rates for fiscal 2024; the actual amounts paid are set forth in the Summary Compensation Table.

Changes to Base Salaries for Fiscal 2025

For fiscal 2025 the Committee determined that increases in base salary of 10%, 3% and 5% were warranted for Mr. Sayler, Mr. Tucker and Mr. Schatz, resulting in base salaries of $830,500, $616,500 and $426,100, respectively. To assist in evaluating 2025 executive compensation, the Committee engaged Pay Governance to conduct a comprehensive 2024 market assessment. Mr. Sayler’s percentage increase was higher because his base salary was 12% below the median of the survey and 19% below the median of the peer group proxy data presented by Pay Governance.

Annual Cash Incentive

The Committee uses annual performance-based cash incentives to compensate the executive officers. The Committee establishes at-risk performance targets for the executive officers using financial and operational goals linking compensation to overall Company performance. The annual cash incentive targets for fiscal 2024 and fiscal 2023 were as follows:

Target Cash Incentive Compensation¹

1   Amounts shown are annual targets for fiscal 2024; the actual amounts paid are set forth in the Summary Compensation Table.

The fiscal 2024 cash incentive targets for the executive officers were established pursuant to our Performance Compensation Plan (PCP) authorized under the 2018 Omnibus Incentive Plan. This at risk plan closely links the executive officers’ pay to our financial results and provides compensation variability in the form of reduced payments when performance is below targets and higher compensation when performance exceeds targets. The PCP has a fixed target with a payout range based on performance. The Committee has discretion to either increase or decrease the actual cash incentive payouts. For fiscal 2024, the Committee determined to set the cash incentive targets as a percent of base salary in line with market practices. The 2024 cash incentive targets for Mr. Sayler, Mr. Tucker and Mr. Schatz were 100% of 2024 base salary, 65% of 2024 base salary, and 50% of 2024 base salary, respectively.

Changes to Annual Cash Incentive for Fiscal 2025

Consistent with fiscal 2024, the Committee determined that the cash incentive targets for fiscal 2025 would be set as a percent of base salary in line with market practices. The fiscal 2025 cash incentive targets for Mr. Sayler, Mr. Tucker and Mr. Schatz are $830,500 (100% of 2025 base salary), $400,725 (65% of 2025 base salary), and $213,050 (50% of 2025 base salary), respectively.

Total Target Cash Compensation

The target percentages of total cash compensation represented by base salary and by the PCP target varied for fiscal 2024 based on the position, as follows:

Target Total Cash Compensation: Fiscal 2024¹

1   Amounts shown are annual targets as of the beginning of fiscal 2024; the actual amounts paid are set forth in the Summary Compensation Table.

The higher at-risk target percentage for the CEO as compared to the other executive officers is based on our at risk philosophy and the greater responsibilities of the CEO. Similarly, the CFO has a higher at-risk percentage as compared to the General Counsel. Near the beginning of each fiscal year, after reviewing our business plans for the fiscal year, the Committee determines the key short-term business metrics on which senior management should focus in order to drive results and approves the cash incentive target for each executive officer. Because of the broad responsibilities of the executive officers, their criteria are tied to Company-wide metrics. The Committee then determines the percentage of the cash incentive target which should be tied to each of the metrics and the performance target for each metric, and approves the threshold and maximum multipliers which will be applied to each of the performance targets to determine the payment under the plan. If performance is below the threshold for a metric, there is no payout for that metric.

Cash Incentive Metrics

During the first quarter of fiscal 2024 the Committee approved two metrics for achievement of the fiscal 2024 PCP incentive targets, based on the annual operating plan reviewed by the Board of Directors. The first metric in 2024 was “Adjusted EPS,” weighted at 70% of the total PCP target opportunity; Adjusted EPS is a non-GAAP financial measure. Fiscal 2024 Adjusted EPS of $4.18 equaled GAAP diluted EPS of $3.94 excluding $0.24 per share of after-tax charges consisting primarily of $0.09 of debt financing and $0.06 of acquisition costs at Corporate related to the pending SM&P acquisition which was announced in July 2024, $0.05 of restructuring charges (primarily severance) in the A&D, Test and USG segments, and $0.04 of backlog and inventory step-up charges at the Company’s subsidiary MPE Limited which was acquired during fiscal 2024.

The second metric in fiscal 2024 was “Adjusted Cash Flow from Operating Activities,” weighted at 30% of the total PCP target opportunity; Adjusted Cash Flow from Operating Activities is a non-GAAP financial measure. Fiscal 2024 Adjusted Cash Flow from Operating Activities of $132.3 million equaled GAAP Cash Flow from Operating Activities of $127.5 million excluding $4.8 million of adjustments consisting primarily of debt financing and acquisition costs at Corporate related to the pending SM&P acquisition and restructuring charges (primarily severance) in the A&D, Test and USG segments.

The Committee approved the following targets for the two fiscal 2024 cash incentive metrics. It believes that the selected metrics and the performance benchmarks for each metric, and the threshold and maximum multipliers, provided meaningful incentives for 2024 performance.

2024 PCP Targets and Results

1   If performance is below the threshold for a given metric, there is no payment for that metric.

The Summary Compensation Table on page 36 reflects the actual payouts to the executive officers under the PCP for fiscal 2024.

Changes to Cash Incentive Metrics for Fiscal 2025

In line with its practice in recent years, the Committee determined to allocate 100% of the executive officers’ cash incentive compensation opportunity to the PCP, and approved the following performance criteria for fiscal 2025:

As in 2024, the potential cash incentive compensation for fiscal 2025 will range from 0 to 2.0 times the target opportunity for both Adjusted EPS and Adjusted Cash Flow from Operating Activities, depending on actual 2025 performance.

Long-Term Incentive Compensation

The Company’s annual LTI award program consists of a combination of performance-based share unit (PSU) awards and time-vested restricted share unit (RSU) awards, with each type weighted at 50% of the total LTI opportunity. For fiscal 2024, both the PSU and RSU grants were approved in the first quarter of the fiscal year.

We do not coordinate LTI grants with the release of material non-public information. Company-wide equity grants, including equity grants to our executive officers, are made at regular meetings of the Compensation Committee. We also do not grant stock options or other awards which require a payment by the recipient in order to realize the value of the award.

The target number of shares in each RSU and PSU award equals the Committee-approved target values divided by the average trading price of the Company’s stock over the last 15 trading days before the effective award date. The actual payout of the RSUs and PSUs will be in shares, whose value at the time of payout may be greater or less than the target values. For an award to vest, the recipient must generally be continuously employed by the Company from the award date through the vesting date.

For the executive officers, the numbers of RSUs granted and the PSU threshold, target and maximum numbers of shares payable according to the performance criteria, were as follows:

Restricted Share Units (RSUs)

RSUs are time-vested awards. The terms of the fiscal 2024 awards were similar to those granted in fiscal 2023, except that to better align with the Company’s fiscal year goal-setting process, and conform to the granting schedule of the PSU awards, the fiscal 2024 RSU awards were granted in the first quarter and will vest in three equal portions approximately 12, 24 and 36 months after the month in which they are granted; accordingly, for the fiscal 2024 awards, vesting will occur on the last NYSE trading days in November 2024, 2025 and 2026, at which time they will be converted into a like number of shares of Company common stock, and such shares will be paid out to the participant (after statutory tax withholdings) on the following business day.

Performance Share Units (PSUs)

Other than the specific share amounts and performance goals, the terms of the fiscal 2024 PSUs were substantially similar to those awarded for fiscal 2023, including that the awards are subject to the Company’s Clawback Policy (see Clawback Policy on page 35). PSUs awarded in fiscal 2024 will vest, after a three-year performance period ending with fiscal 2026, on the last trading day of the month in which the HRCC approves and certifies the extent to which the applicable performance goals have been achieved. To the extent earned, the vested awards will be converted into a number of shares of Company common stock based on achievement of the performance goals. The award distribution in shares may be less than or greater than the number of PSUs awarded depending on the degree to which the Company has achieved specified performance goals. Straight-line interpolation will be used to score between threshold, target and maximum performance levels. For the fiscal 2024 PSU awards, the Committee continued to align the performance measures with shareholders by continuing the use of EBITDA as a performance measure with a 60% weighting and Return on Invested Capital (ROIC) as a performance measure with a 40% weighting, and continuing the use of relative Total Shareholder Return (rTSR) as a potential modifier:

EBITDA Performance Goals – 60% of PSU award value

ROIC Performance Goals – 40% of PSU award value

After applying the above performance metrics, the resulting number of PSUs may be subject to increase or decrease based on the Company’s Total Shareholder Return (TSR) over the performance period compared to the TSR of the companies in a peer group based on the S&P SmallCap 600 Industrials Index. If the Company’s rTSR is below the 25th percentile or above the 75th percentile, the resulting number of shares will be decreased by 20% or increased by 20%, respectively; if the Company’s rTSR is from the 25th percentile to the 75th percentile, no adjustment will be made. In no event will the award payout be greater than 200% of the target.

For more information about the fiscal 2024 LTI awards, see Grants of Plan-Based Awards on page 37.

Changes to Long Term Incentive Compensation for 2025

The 2024 Pay Governance market assessment indicated that the executive officers’ total direct compensation was lagging the market primarily due to below-market LTI. In response, the Committee significantly increased the total 2025 LTI values as percentages of base salaries, resulting in fiscal 2025 target LTI values as of the grant date of $2,700,000 (325% of base salary) for Mr. Sayler, $770,600 (125% of base salary) for Mr. Tucker, and $426,100 (100% of base salary) for Mr. Schatz.

In addition, although the Committee determined that the LTI awards for fiscal 2025 would be provided in the same two forms as in fiscal 2024, it determined to shift the mix of the LTI awards toward the performance-based PSUs rather than being divided equally between the PSUs and the RSUs as they were in fiscal 2024, and it assigned 70% of the total LTI target value to the PSUs and 30% to the RSUs.

The fiscal 2025 PSUs were granted in November 2024, and after a three-year performance period ending with fiscal 2027, they will vest on the last trading day of the month in which the HRCC approves and certifies the extent to which the applicable performance goals have been achieved. To the extent earned, the vested awards will be converted into a currently undeterminable number of shares of Company common stock, which may be less than or greater than the number of PSUs awarded, within certain specified threshold and maximum limits, depending on the degree to which the Company has achieved one or more specified performance goals. If the performance is less than the threshold goal for a particular performance measure, there will be no payout of that portion of the PSUs dependent on that measure.

The fiscal 2025 RSU awards were also granted in November 2024 and will vest in three equal portions approximately 12, 24 and 36 months after the month in which they are granted; for the fiscal 2025 awards, vesting will occur on the last trading days in November of 2025, 2026 and 2027.

Other Compensation Elements

Perquisites

The Company also provides limited perquisites to the executive officers, which currently include financial planning and an annual physical. The Committee annually reviews the types and value of the perquisites provided to the executive officers as part of its overall review of executive compensation. The Committee determined the perquisites paid in fiscal 2024 to be reasonable.

Certain of these perquisites are treated as taxable income. We do not reimburse our executive officers for the income taxes due on these perquisites (“tax gross-ups”), and beginning in fiscal 2023 we ceased providing auto allowances and country club benefits for our executive officers other than country club initiation fee benefits for Mr. Sayler and Mr. Tucker based on their employment terms at hire.

Retirement Benefits

Like our other employees, the executive officers are eligible for retirement benefits provided through a matched defined contribution (401(k)) program. See Pension Benefits on page 39. Our former defined benefit pension plan was terminated in February 2020, and the participants received lump sum distributions in liquidation of their plan accounts.

Severance Plan

Severance provisions in the event of a change of control benefit a company by allowing executives who are parties to such arrangements to focus on continuing business operations and the success of a potential business combination rather than seeking alternative employment, thereby providing stability to a corporation during a potentially uncertain period. Accordingly, the Company has adopted a Severance Plan which prescribes the compensation and benefits to be provided in the event of a change of control to certain executives, including the CEO and the other executive officers.

Our change of control arrangements were designed to provide executives with severance payments and certain other benefits in the event that their employment is terminated in connection with a change of control transaction. The Severance Plan includes a “double trigger,” which means that it provides severance benefits only if there is both (1) a change of control of the Company, and (2) the Company (or any successor) terminates the employee’s employment without cause within 36 months following a change of control, or the employee terminates his or her employment for good reason within 36 months following a change of control, or the Company terminates the employee’s employment within 90 days before a change of control at the request of a third party who, at such time, had taken steps reasonably calculated to effect the change of control.

For purposes of the Severance Plan, “change of control” means any of the following (subject to the specific definitions in the Severance Plan): (i) the acquisition by any person or group of at least 20% of the then-outstanding shares of the Company’s common stock; or (ii) a change in a majority of the members of the Board of Directors that is not approved by the incumbent Board; or (iii) the approval by the shareholders of either a reorganization, merger or consolidation after which the shareholders will not own at least a majority of the Company’s common stock and voting power, or a liquidation or dissolution of the Company, or the sale of all or substantially all of the Company’s assets.

If the Severance Plan is triggered, the executive will be entitled to all accrued but unpaid compensation, a pro rata cash bonus for the year of separation and benefits through the date of separation, as well as a lump sum cash payment which is designed to replicate the cash compensation (base salary and cash incentive), plus certain benefits, that the executive would have received had he or she remained employed for two years. These payments and benefits would only be paid as a result of a double-trigger event. The determination of the appropriate level of payments and benefits to be provided in the event of a change of control termination involved consideration of several factors. The two-year multiple was determined based on a survey of the Company’s peers at the time the Severance Plan was adopted by the Company, and is deemed to be reasonable. The Committee considered that a high-level executive, who is more likely to lose his or her job in connection with a change of control than other employees, may require more time than other employees in order to secure an appropriate new position, and, unless that executive was provided with change of control benefits, he or she may be motivated to start a job search early if a change of control is anticipated, to the detriment of the Company. Thus, the existence of the Severance Plan provides an incentive for the executive to remain with the Company until a change of control actually occurs. In addition, payments are not provided under the Severance Plan unless there has been not only a change of control but also a qualifying termination of employment, thus providing an acquirer the opportunity to retain the Company’s management team during or after a transition period.

For further information about the Severance Plan, and a sample calculation of the cash compensation and benefits to be provided to our executive officers under the Severance Plan, based on certain stated assumptions, see Potential Payments Upon Termination or Change in Control beginning on page 40.

In addition, pursuant to the executive officers’ severance agreements as well as their LTI award agreements, in the event of a change of control, all LTI awards are to be assumed by the acquirer or successor entity and converted to an equivalent agreement. If for any reason the awards will not or cannot be assumed, they will be paid out in cash.

Employment Agreements

We have entered into employment and compensation agreements with each of our executive officers, most recently with Mr. Sayler effective January 1, 2023, consistent with the financial terms of his accepted offer letter and otherwise substantially on the same terms as the employment agreements with our other executive officers. The agreements provide for payment of an annual base salary, participation in our cash incentive plans, eligibility for participation in our LTI plans and benefit plans and programs applicable to senior executives, and continuance of certain perquisites. For more information about the terms of these agreements, including specifics regarding the cash compensation and benefits provided in the event of a qualifying separation, and for a sample calculation based on certain stated assumptions, see Employment Agreements on page 39, and Potential Payments Upon Termination or Change in Control beginning on page 40.

The Compensation Committee periodically assesses the reasonableness of the executive officers’ employment agreements to consider whether any changes are appropriate.

Limit on Deductibility of Certain Compensation

Section 162(m) of the Internal Revenue Code prohibits publicly held companies, including the Company, from deducting salaries and other compensation paid to an executive officer to the extent that the total exceeds $1 million during the tax year. Certain compensation based upon the attainment of performance goals set by the Compensation Committee was formerly able to qualify for an exclusion from this limitation, but this exclusion has been eliminated. However, the Committee intends to continue its practice of utilizing shareholder-approved metrics for our cash incentive plans when appropriate, although it reserves the right to use other award provisions that are tailored to achieving our financial and business objectives if it determines that the awards and performance metrics are appropriate and consistent with our business needs.

Stock Ownership Guidelines

The Compensation Committee has established stock ownership guidelines for the executive officers. The guidelines set the minimum level of ownership at a multiple of annual base salary as follows:

Executive officers are expected to be in compliance with the ownership guidelines within five years of their appointments, and they are required to hold 100% of all after-tax stock distributions received from compensation awards until the guideline amounts are reached and thereafter as needed to maintain ownership of at least the guideline amounts. All of our executive officers currently exceed the ownership guidelines.

Insider Trading Policy; Anti-Hedging and Anti-Pledging Policies; Timing of LTI Grants

Our Insider Trading Policy prohibits any employee from trading in Company securities while in possession of material non-public information. In addition, the Insider Trading Policy strictly prohibits our directors, officers and employees from engaging in transactions in Company securities involving puts, calls or other derivative securities on an exchange or in any other organized market, selling Company securities “short”, or entering into hedging or similar arrangements (such as exchange funds) involving Company securities. The Insider Trading Policy also prohibits our directors, officers, corporate office employees, and other designated employees in management positions from pledging Company securities as collateral for a loan or holding Company securities in a margin account. These policies are intended to ensure that the executive officers, as well as other Company personnel in positions of authority, cannot offset or hedge against declines in the price of

the Company stock they own or have a personal interest in the price of their shares which may be different from the interests of other shareholders generally. A clickable link to the Insider Trading Policy is located at Exhibit 19 in the Exhibit Index to our 2024 Annual Report on Form 10-K on file with the SEC.

We do not coordinate LTI grants with the release of material non-public information. Company-wide equity grants, including equity grants to our executive officers, are made at regular meetings of the Compensation Committee. We also do not grant stock options or other awards which require a payment by the recipient in order to realize the value of the award.

Clawback Policy

Our Code of Conduct reaffirms the importance of high standards of business ethics. Adherence to these standards by all employees is the best way to ensure compliance and secure public confidence and support. All employees are responsible for their actions and for conducting themselves with integrity. Any failure on the part of any employee to meet any of the standards embodied in this Code will be subject to disciplinary action, including potential dismissal.

Since 2010, we have had in effect a robust Compensation Recovery Policy (Clawback Policy), and effective in October 2023 we adopted a Supplement to the Clawback Policy designed to comply with the enhanced clawback-related listing standards adopted in 2023 by the NYSE. The Clawback Policy provides that when appropriate, and in accordance with applicable law, the Company may recover any “Recoverable Compensation” received during a prescribed period of up to three years if an executive or other senior officer of the Company or any of our affiliates:

“Recoverable Compensation” is defined to include any equity and incentive compensation received, earned or distributed to or for the benefit of an executive or senior officer, including amounts and shares under any equity or compensation plan or employment agreement. The Clawback Policy specifies that to the extent compensation is recovered from an individual as a result of a financial restatement such amounts will be excluded from “Recoverable Compensation.”

As supplemented, the Clawback Policy also provides in the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the federal securities laws, the Board shall require prompt reimbursement or forfeiture of any excess Incentive-Based Compensation, as defined in the Supplemental Clawback Policy, received by a Company executive during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement, in addition to any transition period (that results from any change in the Company’s fiscal year) within or immediately following such three completed fiscal years.

Recoupment and clawback provisions are included in all equity awards and performance compensation plan agreements for certain participants, and these provisions will be added to all new non-base compensation awards. The Clawback Policy does not prevent us from taking other actions as appropriate, if warranted, based on the misconduct outlined above.

A clickable link to the Clawback Policy, including the 2023 Supplement, is located at Exhibits 97.1 and 97.2 in the Exhibit Index to our 2024 Annual Report on Form 10-K on file with the SEC.

During fiscal 2024, there was no financial restatement which would have required action under the Clawback Policy to recover any Recoverable Compensation, and at the end of fiscal 2023 there was no outstanding balance of Recoverable Compensation resulting from a financial restatement in any prior year.

The following table contains compensation information for fiscal 2024 and the preceding two fiscal years for all services rendered in all capacities to the Company and its subsidiaries by the executive officers. Because Mr. Sayler became an executive officer during 2023, under SEC regulations 2023 was the first year for which his compensation was required to be reported.