AGCO (AGCO) DEFA14AAdditional proxy soliciting materials

ANNUAL MEETING STOCKHOLDER ENGAGEMENT SPRING 2021

 

FORWARD LOOKING STATEMENTS 2 Forward-looking statements in this presentation and the related discussions, include statements regarding our strategy, purpose, vision, demand, product development and capital expenditure plans and timing of those plans, acquisition, expansion and modernization plans and our expectations with respect to the costs and benefits of those plans and timing of those benefits, production levels, share repurchases, dividend rates, and our future revenue, price levels, margins, earnings, cash flow, tax rates and other financial metrics, are subject to risks that could cause actual results to differ materially from those suggested by the statements. These risks include, but are not limited to, adverse developments in the agricultural industry, including those resulting from COVID-19 (including plant closings, workforce availability, supply chain disruption, and product demand), weather, commodity prices, and changes in product demand, interruptions in supply of parts and products, the possible failure by us to develop new and improved products on time, including premium technology and smart farming solutions, within budget and with the expected performance and price benefits, introduction of new or improved products by our competitors and reductions in pricing by them, difficulties in integrating acquired businesses and in completing expansion and modernization plans on time and in a manner that produces the expected financial results, and adverse changes in the financial and foreign exchange markets. Further information concerning these and other risks is included in AGCO’s filings with the SEC, including its Form 10-K for the year ended December 31, 2020. AGCO disclaims any obligation to update any forward-looking statements except as required by law.

 

EXECUTIVE SUMMARY 3 Farmer-First Strategy Delivering Sustainable Stockholder Value  Under the leadership of our new CEO Eric Hansotia, we announced our Farmer-First strategy in March 2021, which is based on our passion for farmers and the important role agriculture plays in securing the global food supply and focuses on working side-by-side with farmers, understanding their business and forming deep trust and bonds  We will continue to leverage our award-winning, differentiated brand portfolio to deliver the high quality, smart farming solutions that deliver customer value Experienced and Diverse Board with Focus on Refreshment  Our Board is composed of directors with the right mix of skills, experience, independence and expertise to effectively guide our Farmer-First strategy, oversee management, and monitor progress on our business and initiatives  We maintain a thoughtful refreshment process, including the addition of two Board members in 2021, rotation of Committee Chairs and a new Lead Independent Director Commitment to Strong Governance, Compensation and Sustainability Practices  We engaged extensively with our stockholders over the past year, and these conversations directly informed recent governance and compensation changes  Our Compensation Committee conducted a holistic review of our executive compensation program, resulting in meaningful changes to our short-term and long-term program, effective 2021  We are focused on strengthening our commitment to sustainability and have embedded environmental pillars into our strategy to create value for our stakeholders

 

AGCO AT A GLANCE 4 We are a global leader in the design, manufacture and distribution of smart, sustainable agricultural solutions across the entire value chain To be the most trusted partner for industry-leading, smart farming solutions OUR PURPOSE Farmer-focused solutions to sustainably feed our world Revenue $9.1+ Billion (2020) Diverse Product Range Smart products across entire crop cycle Employees 21,000+ skilled employees Dealer Network 3,200+ dealers Global Reach 140 countries OUR VISION AGCO Today – A Solid Foundation Specialized Agriculture-Focused Brands that Target Specific Customer Needs Across the Crop Cycle

 

OUR FARMER-FIRST STRATEGY 5 Winning Outcomes Three Pillars to Our Farmer-First Strategy 1. Exceptional customer experiences that reinforce brand promises 2. High quality, smart solutions that create customer value 3. Customer-connected distribution from purchase to replacement • Global Fendt Full line • North America Large Ag • Precision Planting • Global Parts & Services Key Growth Levers Areas to Optimize Differentiators Purpose-Driven Culture • South America • Grain & Protein • Sustainability • Massey Ferguson • Exceptional Customer Experience • Smart Machines and Digital Services • Customer-centric Distribution • Farmer Centric • Simple, Fast, Focused • Core Values-based Key Focus Areas Top Rating Customer Grow Market Position 10+% Operating Margin Target Culture of Employee Safety Sustainable Grade Investment Employee Engagement 35+% RONA Target Our strategy leverages our award-winning, differentiated brand portfolio and offers customers best-in-class digital and in-person experiences to deliver high quality, trusted farming solutions

 

LONG-TERM OPERATING MARGIN TARGETS: ROADMAP TO 10% 6 Through our growth initiatives, the optimization of our existing business and the acceleration of our Precision Ag and Digital capabilities, we are targeting mid-cycle operating margins of 10%+ 2016 2018 2019 2020 2021E 5.9%* 4.1%* 7.0%* Margin Expansion – Key to Improved Returns 5.4%* 10%+ +80 to 100 bps* Mid-Cycle (2-3 years) Volume/ Mix AGCO Initiatives 1 2 3 4 Investments • R&D • DCX Growth Optimization Productivity * Reflects adjusted results, which exclude restructuring and other non-recurring items.

 

• Parts & Service • Fendt • NA Large AG • Precision Planting • High growth areas growing faster than rest of business • Higher incremental margins Advantages Growth in Key Areas 7 1 2018 2020 14% Growth ’20 vs ‘18 2X Optimization Impacts 2 Areas to Optimize • South America • Grain & Protein • Massey Ferguson • Sustainability Benefits • Growing farm footprint and Technology curve • Leverages demand trends • Access to emerging markets • Customer benefits • AGCO benefits Margin Impact +50 to 100 bps EXPANDING ON OUR ROADMAP TO 10% MARGINS

 

Material Cost Improvement and Manufacturing Optimization 8 3 Investments in Technology, R&D and Distribution 4 Global Purchasing Excellence (GPE) • Common components • Common suppliers • Low-cost country sourcing Material savings $30-40M Target + AGCO Production Systems • Utilizing Six Sigma and Lean • Investing in productivity enhancing technology • Smart Factory Digitalization Direct Labor savings $10-$15M Target Incremental annual savings $40M-$55M Strengthening Our Competitive Position • Expansion of Fuse, digital capabilities • Product Development, R&D • Distribution expansion R&D Driving Higher Margins and Returns • Increased technology development • Refreshed, competitive products • Expanding competitive differentiation R&D as a % of Sales 05 08 11 14 17 21E 2.2% ~4.0% EXPANDING ON OUR ROADMAP TO 10% MARGINS (CONT’D)

 

-40% 0% 40% 80% 120% 160% 200% Jan-2019 Apr-2019 Jul-2019 Oct-2019 Jan-2020 Apr-2020 Jul-2020 Oct-2020 Jan-2021 A STRONG TRACK RECORD OF OUTPERFORMANCE AGCO 162% Industry Peers2 99% Financial Highlights (in millions, except for share amounts) $9,352 $9,041 $9,150 Net Sales $501 $534 $639 Adjusted Operating Income & Margin5 $3.89 $4.44 $5.61 Free Cash Flow5Adjusted Earnings per Share5 $393 $423 $627 202020192018 202020192018 202020192018 202020192018 Three-Year TSR (2018 – 2020)4 One-Year TSR (2020)4 January 1, 2019 Eric Hansotia becomes COO of AGCO January 1, 2021 Eric Hansotia becomes Chairman & CEO of AGCO 5.4% 5.9% 7.0% 1) Total stockholder return (“TSR”) for the period 1/1/2019 to 3/15/2021. For purposes of this disclosure, TSR is calculated assuming dividend reinvestment. Peer returns based on equal weighting. 2) Relevant international industry peers include: CNH Industrial N.V., Deere & Company and Kubota Corporation. 3) Proxy peer companies noted on page 44 of the 2021 Proxy Statement. 4) One- and three-year TSR calculated to 3/15/2021. 5) Adjusted Operating Income & Margin, Adjusted Earnings per Share, and Free Cash Flow are non-GAAP measures. For a reconciliation to the most comparable GAAP measure, see the appendix to this presentation. 118% 44% 70% 160% 95% 133% AGCO Proxy2 Industry3 AGCO Proxy2 Industry3 Over his tenure as COO and now CEO, Eric Hansotia has helped to lead AGCO to outperform both proxy and industry peers, a testament to the success of his leadership and commitment to stockholder value creation1 Proxy Peers3 84% 9

 

EXPERIENCED AND DIVERSE BOARD WITH BALANCED TENURE Committees: ECC, SP Our strong track record of refreshment has resulted in a qualified board reflective of relevant experiences… 10 • Chairman, President and CEO of AGCO Corporation, leading the company’s focus on precision agriculture, which is critical to the success of farmers and long- term sustainability of food supply • Various other senior positions at AGCO, including Senior Vice President and COO • Prior to joining AGCO, held several positions with John Deere, developing strong agricultural equipment industry experience, including international experience in Europe  Significant experience in the agricultural equipment industry in the areas of engineering, quality, advanced technology, manufacturing and product management  Strong strategic view on future trends in global agriculture  Proven global leadership experience as well as valuable subject matter expertise D IR E C TO R B IO G R A P H Y S K IL LS & E X P E R IE N C E • Former CEO of Ryerson Inc. leading the business transformation under private equity ownership into a leader in its industry, and through its successful IPO • Various senior management positions within The Timken Company for 30+ years, serving as a supplier to the agricultural industry, requiring extensive manufacturing and distribution expertise • Former Board member of Gardner Denver Inc., serving an integral role in the sale of the company to KKR  Extensive experience in M&A, capital allocation, manufacturing, supply chain, strategy and technology  Strong global track record of acquiring, building and leading businesses through growth and transformations  History of supporting large public companies by bringing proven global leadership experience • Former Executive Chairman, President and CEO of Cooper Tire and Rubber Company, responsible for overseeing over 10,000 employees in the U.S., Europe and Asia • Various executive positions with Whirlpool Corporation for 30+ years, including responsibility for manufacturing, technical development and marketing in several of AGCO’s markets, including Europe  Strong understanding of global manufacturing, strategy, distribution and supply chain expertise  Significant global experience, having leadership roles in Europe and Asia  History of leading large public companies through management and Board positions Board Tenure 5 3 2 ≤ 5 Years 6 - 10 Years > 10 Years Average Tenure: 6 years • Various leadership positions at Lockheed Martin for 30+ years, overseeing one of the largest and most sophisticated information technology functions supporting the design and manufacturing of complex defense hardware and the provision of a broad range of technical, scientific, logistics, system integration and cybersecurity services to customers • As VP of Internal Audit at Lockheed, oversaw the corporation’s supply chain activities, internal controls and risk management  Extensive experience in information technology, internal control and finance  Proven global leadership experience  History of leading large public companies through management and Board positions Eric Hansotia Chairman & CEO AGCO Corp. Committees: GCC, EC Committees: CC, GC Committees: ACC, CC, EC, FC • Distinguished professional background as Professor of Decision Sciences at College of Charleston, serving as a leading expert in decision sciences, strategic planning and organizational management systems • Lead Director, Chairman of the Corporate Governance Committee and member of the Audit Committee of Primerica, Inc. • Former roles leading colleges, including Dean of Terry College of Business at University of Georgia and of Rutgers Business School, providing a critical link to the academic and research sectors  Background in both theoretical as well as practical managerial, governance and leadership experience  Provides critical link to the academic and research sectors  History of leading large public companies through board positions Committees: AC, CC Michael Arnold Former President & CEO, Ryerson Inc. Roy Armes Former Exec. Chair, Pres. & CEO, Cooper Tire & Rubber Sondra Barbour Former Exec. VP, Lockheed Martin P. George Benson Professor and Former President, College of Charleston Chairman Joined Board in 2020 Lead Independent Director Joined Board in 2019 AC: Audit Com. CC: Compensation Com. EC: Executive Com. FC: Finance Com. GC: Governance Com. SP: Succession Planning Com. C: Chair Established a qualified, diverse Board with relevant skills as part of our ongoing Board refreshment process by appointing two qualified, independent directors in January 2021, a total of five new directors in the last five years Ongoing Refreshment

 

EXPERIENCED AND DIVERSE BOARD WITH BALANCED TENURE (CONT’D) …best suited to deliver long-term stockholder value and drive our Farmer-First strategy 11 Committees: CCC, EC, SP • CEO of the U.S. Chamber of Commerce, holding unequaled insight into American industry and commerce as well as international interests • Member of the Board of Directors and Audit Committee of TransUnion • Former President of International Women’s Forum (Washington Chapter), a global group of leading women in business, law, government, technology and arts  Broad experience in sustainability, government regulation and trade and commerce  Provides real-time guidance on critical issues considered in Washington and elsewhere  American and international industry and commerce experience • Former SVP and CFO of ITT Corporation, navigating critical issues related to financial performance and capital structure and allocation • Various positions within PricewaterhouseCoopers for over 20 years, serving as a trusted audit partner for public companies • Member of the Board of Directors and Audit Committee of Belden Inc., where he serves as Chair of the Audit Committee, and Kaman Corporation providing oversight of the key enterprise-related risks facing public companies  Strong financial and capital allocation expertise  Extensive experience in accounting, internal controls and risk management  Significant public company board and audit committee experience  Strong agricultural background and expertise along with deep knowledge of distribution networks  Proven public company board experience Suzanne Clark CEO, U.S. Chamber of Commerce Committees: FC, GC Committees: FCC, AC, EC, GC Committee: SP • Executive Vice President, CTO at General Motors and President of General Motors Ventures, helping lead the company’s evolution through successive generations of technology and performance requirements • Various positions since joining General Motors in 1976, including his service as President of GM China, where he held profit and loss responsibility and led 50,000 workers producing automobiles for both the Chinese market and export  Proven experience in engineering, electrification, connectivity, manufacturing, supply chain management and product design  Significant expertise in the management of, and investment in, evolving technologies  Strong international track record, most notably as President of GM China Committees: AC, CC IndependenceBob De Lange Group President, Caterpillar Inc. George Minnich Former SVP & CFO, ITT Corp. Mallika Srinivasan Chair & Managing Director, Tractors & Farm Equipment Ltd. Matthew Tsien Exec. VP & CTO, General Motors • Group President, Services, Distribution and Digital of Caterpillar Inc., responsible for management of the Caterpillar brand and distribution network • Held leadership positions since joining Caterpillar Inc. in 1993, including Group President of Construction Industries • Held the positions of Vice President, Excavation Division, and Worldwide Product Manager, Earthmoving Division at Caterpillar Inc.  Relevant industry experience in product design, supply chain, manufacturing and distribution  Significant global experience, with prior roles in Europe and Asia  Strong understanding of the manufacturing and distribution of highly-engineered equipment through a global manufacturing base and broad network of distributors D IR E C TO R B IO G R A P H Y S K IL LS & E X P E R IE N C E Joined Board in 2017 Joined Board in 2021 Joined Board in 2021 8 2 Independent Non-Independent AC: Audit Com. CC: Compensation Com. EC: Executive Com. FC: Finance Com. GC: Governance Com. SP: Succession Planning Com. C: Chair • Chairman and Managing Director of Tractors and Farm Equipment Limited (TAFE) navigating the agricultural farm machinery industry in India and emerging markets • Director and Chair of the Nomination and Remuneration Committee of Tata Steel Limited (India) providing oversight over company execution of strategy, performance, and retention of key executives • Previously held several leadership positions in India, including being the President of the Tractor Manufacturers Association of India Diversity 30% 70% 20% 80% Gender Ethnic

 

Sondra Barbour New Audit Chair Suzanne Clark New Compensation Chair George Minnich New Finance Chair Michael Arnold New Governance Chair GOVERNANCE PRACTICES INFORMED BY ROBUST STOCKHOLDER ENGAGEMENT 12 The Board has been reviewing, developing and implementing our governance practices throughout the last several years, and changes made have been informed by extensive stockholder engagement Total Contacted 75% Total Engaged 60% Key Engagement Topics • Board leadership structure • Board composition and refreshment process • Compensation alignment • Sustainability Recent Governance Enhancements • Continuation of our board refreshment process, with the addition of five new independent members within the last five years; including two in 2021 • Refreshed compensation program for 2021, better aligned to strategy and stockholder value return • Strengthening of our Lead Director duties and adopted a five-year term limit for Lead Director • Refreshment of committee assignments in order to bring new perspectives • Adoption of a five-year term limit for chairs of our Audit, Governance and Compensation Committees • An increase in the share ownership requirements for our directors and CEO • Strengthening of our hedging and pledging policy Stockholder Engagement Committee Refreshment WE CONTINUE TO THOUGHTFULLY CONSIDER POTENTIAL GOVERNANCE CHANGES THAT ARE IN THE BEST INTERESTS OF OUR STOCKHOLDERS

 

13 STRONG INDEPENDENT BOARD OVERSIGHT OF GO-FORWARD STRATEGY Robust Lead Independent Director Responsibilities The Board recently further enhanced its Lead Independent Director duties to ensure a robust role for the Lead Independent Director:  Presides over executive sessions and at all meetings of the Board in absence of the Chairman  Call and Chair meetings of the independent directors  Provides input to the Chairman on setting Board agendas and establishes the agenda for executive sessions  Facilitate discussion and open dialogue among non- management and independent directors  Generally approves information sent to the Board  Available for consultation and direct communication with major stockholders  Participates in meetings of Board Committees  Leads the performance evaluation process of the CEO  Review and report on Board and Committee self-evaluations  Review Board and Committee performance, effectiveness and composition The Board has selected Michael Arnold to serve as its new Lead Independent Director, and additionally has enhanced the responsibilities of the role to ensure effective independent oversight Michael Arnold Lead Independent Director  As part of our ongoing board refreshment process, Michael Arnold was appointed as our new Lead Independent Director in December 2020 given his diverse skillset and extensive knowledge of the industry  Former President and CEO, Ryerson Inc.  Proven board experience and an operational and leadership track record with global expertise in industrial businesses  Since joining AGCO’s Board in October 2013, has served on and chaired several committees, including the Audit, Finance, and Governance Committees, the last of which he currently chairs  Prior public-company governance experience, having served as an independent director of Gardner Denver through its successful sale to KKR in 2013

 

 In response to stockholder feedback, the Compensation Committee has adjusted metrics for the annual incentive and selected entirely new metrics for the long-term incentive, emphasizing relative performance through both a new relative metric and the addition of a relative TSR modifier  For both the annual and long-term incentive, performance targets are set based on a new sliding scale model to better align pay and performance while dealing with industry cyclicality  Majority of NEOs’ annual equity grants continue to be based on a formulaic and rigorous Performance Share Plan (“PSP”), weighted at 60% of the annual target equity grant mix REFRESHED COMPENSATION PROGRAM IN RESPONSE TO FEEDBACK 14 In response to stockholder feedback, we conducted a holistic review of our executive compensation program and made meaningful changes effective 2021. We also enhanced our disclosures relating to targets and achievements. 1 2 3 80% Trough 90% 100% Mid-Cycle 110% 120% Peak O pe ra tin g M ar gi n 80% Trough 90% 100% Mid-Cycle 110% 120% Peak R O N A Sliding Scale Goals Example Industry level - % of 10-year industry average Industry level - % of 10-year industry average Maximum Target Threshold Maximum Target Threshold  Froze the executive defined benefit retirement plan with a transition to an executive defined contribution plan 4

 

 

 

 

APPENDIX 18

 

 

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