UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
☑ Filed by the Registrant ☐ Filed by a party other than the Registrant
CHECK THE APPROPRIATE BOX:
| ☐ | Preliminary Proxy Statement | |||||||
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||||||
| ☑ | Definitive Proxy Statement | |||||||
| ☐ | Definitive Additional Materials | |||||||
| ☐ | Soliciting Material Pursuant to Rule 14a-12 | |||||||
(Name of the Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK ALL BOXES THAT APPLY):
| ☑ | No fee required | |||||||
| ☐ | Fee paid previously with preliminary materials | |||||||
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 | |||||||
| INNOVATIVE SOLUTIONS. SUSTAINABLE OUTCOMES. | |||||||||||||
A greener planet demands innovative solutions. | Carrier plays a vital role in helping address climate change with digitally enabled lifecycle solutions and services that meet the needs of our customers and drive sustainability. We optimize indoor spaces for occupant health and safety while improving energy efficiency. We strengthen and connect the cold chain to preserve, protect and extend the supply of food and medicine worldwide while accelerating the shift to electrification. At Carrier, our inclusive and diverse team works to make a positive difference for people and the planet – and together, we inspire confidence in sustainable outcomes. | |||||||||||||
The Carrier Way
The Carrier Way is the foundation of everything we do. It defines our vision, reaffirms our values, describes the behaviors that create a winning culture, and establishes how we work and win together.
VISION Our aspiration; why we come to work every day. Creating solutions that matter for people and our planet. | |||||||||||
VALUES Our absolutes; always do the right thing. Respect Integrity Inclusion Innovation Excellence | |||||||||||
CULTURE Our behaviors; how we work and win together, while never compromising our values. | |||||||||||
Passion for Customers We win when our customers win. | Achieve Results We perform, with integrity. | ||||||||||
Play to Win We strive to be #1 in everything we do. | Dare to Disrupt We innovate and pursue sustainable solutions. | ||||||||||
Choose Speed We focus and move with a bias for action. | Build Best Teams We develop diverse teams, and empower to move faster. | ||||||||||
Code of Ethics and Corporate Policy Manual
Our Code of Ethics focuses on the core values that serve as the foundation of our culture: respect, integrity, inclusion, innovation and excellence. It builds on the effort we have made to better understand our culture and the values that guide how we operate and achieve our goals the right way. Employees are required to annually review and acknowledge their adherence to our Code of Ethics. We encourage you to visit the Corporate Responsibility section of our website (www.corporate.carrier.com), where you can access Carrier’s Code of Ethics, excerpts from our Corporate Policy Manual and other Environmental, Social and Governance ("ESG") framework documents.
MESSAGE FROM OUR LEAD INDEPENDENT DIRECTOR
 | Dear Fellow Shareowners, 2022 was a very active and transformative year for the Carrier Board of Directors. We completed a succession plan in the Lead Independent Director role, added a new board committee and a new director, refreshed committee assignments and leadership, and enhanced the Board’s oversight of ESG matters. We established the Technology & Innovation Committee, chaired by Michael M. McNamara, to augment and oversee Carrier’s transformation from an equipment manufacturer to a provider of digitally enabled lifecycle solutions. As part of our normal board succession planning process, we realigned committee assignments, and elected Michael A. Todman as chair of our Compensation Committee and Virginia M. Wilson as chair of our Governance Committee. I was designated by my peers as the Board’s Lead Independent Director, succeeding Dr. Jean-Pierre Garnier who, as Carrier's first Lead Independent Director, was instrumental in ensuring the company's successful spinoff from United Technologies in 2020. We are grateful for J.P.'s leadership and pleased that he will continue to provide his wise counsel as a member of our Board. We appointed Susan N. Story, former President and Chief Executive Officer of American Water, as an independent director. Susan’s extensive senior leadership experience and deep knowledge of the energy industry and sustainability matters make her an outstanding addition to the Board as Carrier continues to drive its growth strategy and ESG initiatives. I am proud to serve on a board that includes such a wealth of talent, experience and diverse perspectives. Finally, as you will see in this Proxy Statement, we enhanced the Board's collective oversight of ESG. We elevated primary responsibility to the full Board for Carrier’s ESG program, goals and objectives, including climate-related matters, and delegated certain elements to our committees to leverage their respective areas of expertise. This approach reflects our belief that sustainability and Carrier’s growth strategy are inseparable, and underscores our commitment to our stakeholders and the stewardship of our planet. Change is a constant, but our priority remains the same: to drive sustainable, long-term value creation. As the actions of the past year demonstrate, we will continue to evaluate ourselves and engage with you, our shareowners, to ensure that the Board remains effective in guiding Carrier toward this objective. We greatly value your investment in Carrier and hope that you are as enthusiastic as we are about our future. Sincerely,  John J. Greisch Lead Independent Director | |||||||
"Change is a constant, but our priority remains the same: to drive sustainable, long-term value creation. As the actions of the past year demonstrate, we will continue to evaluate ourselves and engage with you, our shareowners, to ensure that the Board remains effective in guiding Carrier toward this objective." | ||||||||
| 2023 Proxy Statement | i | ||||
TABLE OF CONTENTS
Executive Compensation and Performance | |||||
Pay Versus Performance Disclosure | |||||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareowners to be held on April 20, 2023. This Notice of the 2023 Annual Meeting of Shareowners and Proxy Statement as well as Carrier’s 2022 Annual Report are available free of charge at www.proxyvote.com or at www.corporate.carrier.com. References in either document to our website are for the convenience of readers, and information available at or through our corporate website is not a part of nor is it incorporated by reference in the Proxy Statement or Annual Report.
The Board of Directors of Carrier Global Corporation (the "Board") is soliciting proxies to be voted at our 2023 Annual Meeting of Shareowners on April 20, 2023, and at any postponed or reconvened meeting. We expect that the Proxy materials or a notice of internet availability will be mailed and made available to shareowners beginning on or about March 7, 2023. At the meeting, votes will be taken on the matters listed in the Notice of 2023 Annual Meeting of Shareowners.
ii | Carrier Global Corporation | ||||
| March 7, 2023 | ||||
NOTICE OF 2023 ANNUAL MEETING OF SHAREOWNERS
Meeting Information |  | DATE AND TIME April 20, 2023 8 a.m. Eastern time |  | LOCATION Virtual Meeting www.virtualshareholdermeeting.com/CARR2023 | ||||||||||
| Agenda | BOARD RECOMMENDATION | READ MORE | |||||||||||||||
| 1 | Election of the Nine Director Nominees Named in the Proxy Statement |  | |||||||||||||||
FOR each Director Nominee | ► Page 11 | ||||||||||||||||
| 2 | Advisory Vote to Approve Named Executive Officer Compensation | | |||||||||||||||
| FOR | ► Page 31 | ||||||||||||||||
| 3 | Ratify Appointment of PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2023 | | |||||||||||||||
| FOR | ► Page 59 | ||||||||||||||||
| 4 | Vote on the Shareowner Proposal set forth in the Proxy Statement, if properly presented |  | |||||||||||||||
| AGAINST | ► Page 61 | ||||||||||||||||
| Four voting methods are available to you. |  | BY THE INTERNET Visit the website on your proxy card. |  | BY MAIL Sign, date and return your proxy card in the enclosed envelope. | ||||||||||
| Please review your Proxy Statement and vote in one of the ways described here. |  | BY TELEPHONE Call the telephone number on your proxy card. |  | ONLINE DURING THE MEETING Vote online during the meeting by going to: www.virtualshareholdermeeting.com/CARR2023. | ||||||||||
Your vote is important. Please submit your proxy or voting instructions as soon as possible. | WHO MAY VOTE You are entitled to receive this Notice and to vote at the Annual Meeting if you owned shares of Carrier common stock at the close of business on February 28, 2023 (the record date for this Annual Meeting). VIRTUAL MEETING FORMAT The 2023 Annual Meeting of Shareowners will be conducted in a virtual format to facilitate attendance and to provide a consistent experience to all shareowners, regardless of location. The format is designed to ensure a level of participation commensurate with an in-person meeting and allows shareowners to: ▪vote and submit questions in advance of the Annual Meeting; and ▪access a live webcast, vote and submit questions during the Annual Meeting on April 20, 2023. Please see "Frequently Asked Questions About the Annual Meeting" on page 64 for more information about participating in the virtual meeting. By Order of the Board of Directors. Mark G. Thompson Vice President, Secretary & Deputy Legal Officer | ||||
| 2023 Proxy Statement | 1 | ||||
PROXY SUMMARY
This summary highlights selected information contained elsewhere in this Proxy Statement. It does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
Voting Matters
We request that you vote on the following proposals at the 2023 Annual Meeting:
| Proposal | Board Recommendation | Page | ||||||||||||
| Proposal 1 | Election of the Nine Director Nominees Named in the Proxy Statement | Vote FOR each director nominee | ||||||||||||
| Proposal 2 | Advisory Vote to Approve Named Executive Officer Compensation | Vote FOR | ||||||||||||
| Proposal 3 | Ratify Appointment of PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2023 | Vote FOR | ||||||||||||
| Proposal 4 | Shareowner Proposal – Independent Board Chairman | Vote AGAINST | ||||||||||||
Director Nominees and Governance
Election of Directors What are you voting on? At the 2023 Annual Meeting, nine director nominees are to be elected to hold office until the 2024 Annual Meeting and until their successors have been elected and qualified. | All nominees are current directors of Carrier and were elected by shareowners at the 2022 Annual Meeting, except for Susan N. Story who joined the Board in January 2023. | | ||||||
Our Board recommends a vote FOR each nominee | ||||||||
2 | Carrier Global Corporation | ||||
Board Nominees | Sound Corporate Governance ▪Regular reviews of strategic direction and priorities ▪Regular reviews of significant risks; active oversight of Enterprise Risk Management ("ERM") program ▪Annual review of Board policies and governance practices and of committee charters ▪Annual Board, committee and director evaluations; regular refreshment actions ▪89% of director nominees are independent ▪All Board committee members are independent directors ▪Robust Lead Independent Director role with explicit responsibilities ▪Regular meetings of independent directors without management led by Lead Independent Director ▪Annual election of all directors ▪Majority voting for directors in uncontested elections ▪Rigorous share ownership requirements for directors and senior management ▪Directors required to hold company-granted equity until retirement ▪Hedging, short sales and pledging of Carrier securities prohibited ▪Eligible shareowners can make proposals and nominate directors through proxy access ▪Shareowners may act by written consent ▪15% of shareowners may call special meetings ▪No supermajority shareowner voting requirements ▪100% attendance at Board meetings in 2022 ▪100% attendance at committee meetings in 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TENURE 2.5 years average tenure | AGE 65 average age | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 members on Board since separation from UTC | 2 new Board members in last 2 years | 2 < 60 years | 2 60-65 years | 5 > 65 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIVERSITY 4 of 9 (44%) Board nominees are diverse 2 of 5 (40%) Board leadership positions are held by diverse members Our policy is to build a board representing a broad range of personal characteristics and diversity of perspectives | INDEPENDENCE All independent except for the CEO All director nominees except for our CEO are independent and meet the heightened independence standards for our Audit Committee and Compensation Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 Female (33%) | 1 Racially Diverse (11%) | 8 Independent (89%) | 1 Not Independent (11%) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susan N. Story Virginia M. Wilson Beth A. Wozniak | Michael A. Todman | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Skills, Experience and Diversity Our director nominees' most significant skills, experience and attributes are highlighted in the following matrix. The matrix is intended as a high-level summary and not an exhaustive list of each director's skills or contributions to the Board. Board committees reflect committee memberships as of the date of this Proxy Statement. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| KEY SKILLS, EXPERIENCES AND ATTRIBUTES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 |  |  |  |  |  |  |  |  | BOARD COMMITTEES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| NAME | A | C | G | T | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jean-Pierre Garnier |  |  |  |  |  |  |  |  |  | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David L. Gitlin | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John J. Greisch | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Charles M. Holley, Jr. | | | | | | |  | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael M. McNamara | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Susan N. Story | | | | | | | |  | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael A. Todman | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Virginia M. Wilson | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beth A. Wozniak | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ATTENDANCE | QUALIFICATIONS AND ATTRIBUTES | COMMITTEES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All director nominees attended 100% of the meetings of the Board and committees on which they served in 2022. |  | Financial |  | Knowledge of Company/Industry | A | Audit Committee |  | Member | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | Human Capital Management |  | Marketing/Sales | C | Compensation Committee | | Chair | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | Innovation, Digital and Technology |  | Risk Management/Oversight | G | Governance Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | International Business Operations |  | Senior Leadership | T | Technology & Innovation Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | Diversity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2023 Proxy Statement | 3 | ||||
Executive Compensation and Performance
Advisory Vote to Approve Named Executive Officer (NEO) Compensation What are you voting on? We are asking our shareowners to approve, on an advisory basis, the compensation paid to Carrier's named executive officers disclosed in this Proxy Statement. We hold say-on-pay votes annually. | The Board believes that our compensation policies and practices are effective in achieving the goals of the compensation program, and that our actions have been responsive to shareowner feedback related to last year’s say-on-pay vote. | | ||||||
Our Board recommends a vote FOR the say-on-pay proposal | ||||||||
The overall objective of the compensation program is to encourage and reward the creation of sustainable, long-term shareowner value. The current elements of the executive compensation program directly align the interests of the executives and shareowners, are competitive, motivate achievement of short- and long-term financial goals and strategic objectives, and align realized pay with performance.
Executive Compensation Program Principal Components
| ELEMENT | FORM OF AWARD | |||||||||||||
| PERIOD | ||||||||||||||
| BASE SALARY | ||||||||||||||
| Cash | One year | |||||||||||||
| ANNUAL BONUS | At-Risk Pay | Performance- Based Pay | ||||||||||||
| Cash | One year | |||||||||||||
| LONG-TERM INCENTIVES (LTI) | Stock Appreciation Rights (SARs) 50% | Vest after three years | ||||||||||||
| Performance Share Units (PSUs) 50% | Vest after three years | |||||||||||||
| CEO 2022 | Other NEOs 2022 | |||||||
 | ||||||||
1For the calculations above, total target direct compensation for 2022 includes annual base salary, the target value of annual bonus compensation and the target value of annual LTI awards, but does not include the target value of other special, one-time grants (e.g., sign-on equity awards).
4 | Carrier Global Corporation | ||||
2022 Performance and Business Highlights
| GAAP | Adjusted* | ||||||||||||||||
▪In January 2022, the company sold its Chubb fire & security business ("Chubb"), which represented over $2 billion in 2021 revenues. ▪Strong price/cost management and productivity drove higher operating profits in 2022 despite lower net sales primarily as a result of the Chubb sale. ▪Net sales decreased 1% year-over-year, with organic sales growth of 8%. ▪Operating margin increased 930 basis points, and adjusted operating margin was up 50 basis points. ▪Diluted earnings per share ("EPS") increased 119%, and adjusted EPS was up 3% despite the sale of Chubb and lower net sales. ▪Cash from operating activities and free cash flow in 2022 include tax payments associated with the gain on the Chubb sale as well as generally higher inventory levels related to supply chain challenges. ▪2022 capital deployment included a net decrease of about $750 million in our long-term debt, over $500 million in acquisitions, over $500 million in dividend payments and almost $1.4 billion in share repurchases. | |||||||||||||||||
Net sales (dollars in billions) |  |  | |||||||||||||||
Operating profit (dollars in billions) |  |  | |||||||||||||||
Operating margin (percent) |  |  | |||||||||||||||
Earnings per share (dollars per share) |  |  | |||||||||||||||
Net cash flows from operating activities/ Free cash flow (dollars in billions) |  |  | |||||||||||||||
*See Appendix A beginning on page 72 for information regarding non-GAAP measures and a reconciliation of each non-GAAP measure to the most comparable GAAP measure. | |||||||||||||||||
Independent Auditor
Ratify Appointment of Independent Auditor for 2023 What are you voting on? We are asking our shareowners to ratify the appointment of PricewaterhouseCoopers LLP (“PwC”) as Carrier's independent registered public accounting firm for the fiscal year ending December 31, 2023. | The Audit Committee and the Board believe that the continued retention of PwC as our independent auditor is in the best interest of the company and our shareowners. | | ||||||
Our Board recommends a vote FOR the ratification of the appointment of PwC to serve as the company’s independent auditor for 2023 | ||||||||
| 2023 Proxy Statement | 5 | ||||
OUR COMPANY
About Carrier
Carrier is the leading global provider of healthy, safe, sustainable and intelligent building and cold chain solutions, with a diverse and world-class workforce. Through our performance-driven culture, we are driving long-term shareowner value by growing earnings and investing strategically to strengthen our position in the markets we serve.
Our Business Segments
 | HVAC Carrier’s HVAC segment provides solutions globally to meet the heating, ventilating and cooling needs of residential and commercial customers, while enhancing building performance, energy efficiency and sustainability. Through an industry-leading family of brands, we offer an innovative and complete portfolio of products and solutions, including digital offerings, building automation and services that optimize indoor environments to enhance human health, safety and productivity. | ||||
 | Refrigeration Carrier’s Refrigeration segment provides a more healthy, safe, sustainable and intelligent cold chain through the reliable transport and preservation of food, medicine and other perishable goods. Our refrigeration and monitoring products, services and digital solutions strengthen the connected cold chain and are designed for trucks, trailers, shipping containers, intermodal applications, food retail and warehouse cooling. | ||||
 | Fire & Security Carrier’s Fire & Security segment provides a wide range of residential, commercial and industrial technologies designed to help save lives and protect people and property. Our globally recognized brands provide comprehensive lifecycle solutions, web-based and mobile applications, and cloud-based services. Through integrated digital solutions, services and technologies, we enable healthy, safe, sustainable and intelligent buildings and homes. | ||||
Innovation Spotlight
 |  | ||||
Abound is a suite of connected solutions and a cloud-based digital platform that uses advanced technologies to enable real-time, intelligent, outcome-based results that make buildings more efficient and responsive, and provide occupants with confidence in the health and safety of their indoor environments. | Developed in collaboration with Amazon Web Services, Carrier’s Lynx platform allows customers to leverage data to improve the effectiveness and sustainability of their supply chains. By enhancing visibility, resiliency, agility and efficiency in the cold chain, the cloud-connected Lynx digital platform helps reduce loss and supports real-time decisions, ensuring foods and vital medications safely reach people around the world who need them. | ||||
6 | Carrier Global Corporation | ||||
Secular Trends Driving Growth
Carrier lives at the intersection of secular drivers, including health and wellness, sustainability, digitalization and a growing middle class. | As cities grow, competing demands for natural resources strain infrastructure and food supply. Energy demand for space cooling has more than tripled since 1990, making it the fastest-growing energy end use in buildings. Around the world, food is wasted on an alarming scale, and one in nine people go to bed hungry every night. If food waste were a country, it would be the third-largest emitter of greenhouse gases, representing 10% of global annual climate emissions. At Carrier, we have the unique ability to help address global climate change with more sustainable solutions. Few companies are positioned as well to make such a positive impact. From enabling the clean energy transition to fostering the move toward lower global warming potential refrigerants, addressing climate change is a key tenet of our growth strategy. | ||||||||||
Our Programs
At Carrier, we deliver healthy, safe, sustainable and intelligent outcomes for people around the world. We do this through our Healthy Buildings, Healthy Homes and Connected Cold Chain programs, bringing together expertise from across our company and solutions from our industry-leading brands to solve global challenges and inspire confidence.
 | We are shaping a healthier future through our Healthy Buildings Program. With solutions and services that help optimize indoor environments for health, safety and security, we positively impact occupant experiences in places where they live, work, learn and play, while helping to enhance sustainability and improve operational efficiency. | ||||||||||
 | Carrier’s Healthy Homes Program includes a suite of targeted solutions that can help improve the overall health and safety of homes and the people inside. Our businesses continue to introduce innovations that give people greater awareness and control of their home's health. | ||||||||||
 | We are making the cold chain more healthy, safe, sustainable and intelligent through our Connected Cold Chain Program. Our solutions help preserve, protect and extend the supply of food, medicine and other perishables across the globe. | ||||||||||
| 2023 Proxy Statement | 7 | ||||
Carrier 2030 Environmental, Social & Governance (ESG) Goals
Our 2030 ESG goals underscore Carrier's commitment to the things that matter and to continuously challenge ourselves to think bigger and to be better. Expanding on three decades of environmental targets, our goals include measures to improve our planet, our people and our communities through sustainable solutions, investments and practices. We strive to be a catalyst for positive and sustainable change as we innovate, empower our people and operate with integrity. That is The Carrier Way.
In addition, Carrier recently committed to setting near- and long-term greenhouse gas emission reduction goals in line with the Science Based Targets initiative to limit global warming to 1.5°C. According to this initiative, we also are targeting net-zero greenhouse gas emissions across our value chain by 2050.
Our Planet Climate change is among the most significant issues facing humanity. HVAC contributes an estimated 15% of the world’s greenhouse gas emissions. More than one-third of all food produced is wasted every year, resulting in an estimated 4.4 gigatons of greenhouse gas emissions. We recognize the potential for smart, sustainable innovation, and are committed to setting science-based emissions targets aligned with the goals of the Paris Agreement. | ▪Reduce our customers’ carbon footprint by more than 1 gigaton ▪Invest over $2 billion to develop healthy, safe, sustainable and intelligent building and cold chain solutions that incorporate sustainable design principles and reduce lifecycle impacts ▪Achieve carbon neutral operations ▪Reduce energy intensity by 10% across our operations ▪Achieve water neutrality in our operations, prioritizing water-scarce locations ▪Deliver zero waste to landfill from manufacturing locations ▪Establish a responsible supply chain program and assess key factory suppliers against program criteria | ||||||||||
Our People Our greatest strength is the diversity of our employees and their ideas. We are a company of innovators and problem-solvers who are united by The Carrier Way – our purpose, values and culture. | ▪Exceed benchmark employee engagement ▪Achieve gender parity in senior leadership roles ▪Achieve a diverse workforce that represents the communities in which we live and work ▪Foster the growth of Employee Resource Groups ("ERGs") to drive social impact ▪Maintain world-class safety metrics | ||||||||||
Our Communities Decades of leadership in sustainability have guided Carrier to the forefront of healthy buildings, healthy homes and a more connected cold chain. Throughout our global operations, we are reducing our environmental footprint and making investments that have a positive impact on society. | ▪Positively impact communities by enabling access to safe and healthy indoor environments, alleviating hunger and food waste, and volunteering our time and talent ▪Invest in science, technology, engineering and math education programs that promote diversity and inclusion ▪Promote sustainability through education, partnerships and climate resiliency programs | ||||||||||
Learn about our progress corporate.carrier.com/esg-report | ||
8 | Carrier Global Corporation | ||||
Sustainability
Carrier develops innovative products and digitally enabled services that help customers reduce greenhouse gas emissions and achieve their sustainability goals. We also incorporate sustainable practices throughout our global operations to reduce our environmental footprint.
Sustainable Solutions
Carrier is aiming to reduce our customers’ carbon footprint by more than 1 gigaton by 2030 in part through a tailored approach for specifying and commissioning equipment, and providing assessment services based on each customer’s sustainability, operational and budgetary goals. We offer building and cold chain customers within the product lifecycle and capital planning process both expertise and solutions to design, enable and deliver improved sustainability.
Sustainable Investments
Carrier Ventures focuses on investments that accelerate the development of sustainable innovations and disruptive technologies for building and cold chain solutions. A catalyst for disruption, the group forms strategic partnerships with high-growth companies as they develop technologies to innovate and commercialize the next generation of differentiated net-zero solutions.
| Sustainable Innovations | We focus on growth areas of electrification, energy management, and residential and light commercial HVAC technologies. | |||||||
| Strategic Collaboration | We value strategic partnerships that enhance our research and development expertise and our channel to market or that become a part of our product offerings. | |||||||
| Disruptive Technologies | We prioritize software and analytics, and telematics. | |||||||
| Commitment to Excellence | We seek out companies that share our core values of respect, integrity, inclusion, innovation and excellence. | |||||||
Sustainable Practices
Carrier committed to achieving carbon neutrality in our operations by 2030. We have implemented initiatives across Carrier facilities to reduce our absolute greenhouse gas emissions by expanding the use of high-efficiency equipment, refrigerants with lower global warming potential, electric technologies and renewable energy.
We also achieved zero waste to landfill certification at three additional manufacturing sites by transitioning to more sustainable methods of waste management.
| 2023 Proxy Statement | 9 | ||||
Inclusion & Diversity
We continue to advance our inclusion and diversity ("I&D") strategy. Carrier remains steadfast in our goal to create a workplace that is truly and genuinely inclusive, and where all employees feel like they _belong, which is our I&D philosophy and brand. Our strategy consists of four key tenets: Reduce the Gap, Develop & Sponsor, Drive Inclusion and Lean Forward. |  | ||||
Reducing the Gap
| Global executive diversity* | Global women executives** | U.S. People of Color executives | U.S. People of Color professionals | |||||||||||||||||||||||
27% in 2015 49% in 2022 | 20% in 2015 30% in 2022 | 13% in 2015 31% in 2022 | 18% in 2015 26% in 2022 | |||||||||||||||||||||||
* Global women and U.S. People of Color.
** Does not include Toshiba Carrier Corporation ("TCC").
We also sponsor multiple ERGs, such as the Carrier Black Alliance, Carrier Hispanics & Latinos Employee Engagement Resource group, Military & Veterans, Pride, United Carrier Asian Network and Women Empowerment. These ERGs lead grassroots efforts to drive a culture of inclusion and celebrate the diversity of our global workforce.
To strengthen our diverse talent pipeline, we participate in recruiting events with the National Society of Black Engineers, where we serve on the Board of Corporate Affiliates, and with the Society of Hispanic Professional Engineers and the Society of Women Engineers. Additionally, we offer scholarship programs at historically Black colleges and universities, including Spelman College and North Carolina Agricultural and Technical State University.
Carrier Employee Scholar Program
Carrier is committed to the continued development and engagement of our people. We promote continuous learning through our Employee Scholar Program, which covers the cost of an employee’s tuition, academic fees and books at approved universities.
 |  |  |  | ||||||||
~$170M invested since inception in 1996 | 50+ countries with employee participation since inception | 8,600+ degrees earned since inception | 400+ current participants | ||||||||
Corporate Responsibility
Carrier makes a positive impact on communities through philanthropic giving, volunteerism and partnerships. We encourage you to visit the Corporate Responsibility section of our website (www.corporate.carrier.com) to learn more.
We teamed up with other leading companies and the United Nations World Food Programme to build a world-class cold chain Transport Training Centre in Ghana. In addition, our Kidde business created the Cause For Alarm fire education and safety initiative to support communities that are at higher risk of death or injury in residential fires. We also supported Habitat for Humanity organizations through volunteer efforts, financial support and product donations from our Healthy Homes suite of indoor air quality and fire safety solutions.
10 | Carrier Global Corporation | ||||
PROPOSAL 1 Election of Directors WHAT ARE YOU VOTING ON? The Board presents nine nominees for election as directors at the 2023 Annual Meeting. Each director nominee has consented to being named as a nominee in the Proxy materials and to serve if elected. Each director elected at the Annual Meeting will serve until the 2024 Annual Meeting or until a successor is duly qualified and elected. Our director nominees hold or have held senior positions as leaders of various large and complex global businesses. Our nominees are or have been chief executive officers, chief financial officers, chief accounting officers and members of senior management. Through these roles, our nominees have developed expertise in finance, human capital management, innovation, digital and technology, international business operations, risk management, sustainability and strategic planning. With this blend of skills and experience, our directors bring a seasoned and practical understanding of governance, public policy, compensation and sustainable practices to the Board’s deliberations. Detailed biographical information for each director nominee follows. We have included career highlights, other directorships and other leadership and service experience. Our Board considered all of the aforementioned attributes as well as the results of our annual self-evaluation process when deciding to renominate each of the nominees. | ||
BOARD RECOMMENDATION: Vote FOR each director nominee | ||
Criteria for Board Membership
The Board reviews the appropriate attributes, skills, and experience required of directors and the Board as a whole through its annual self-evaluation process described below, and the recommendations of the Governance Committee. These criteria, which are set forth in Carrier's Corporate Governance Principles, are designed to reflect Carrier’s evolving business requirements and to promote the long-term interests of Carrier, its shareowners and other stakeholders.
| The Board recognizes that the long-term interests of Carrier and its shareowners are also advanced by responsibly addressing the concerns of other stakeholders, including Carrier employees, customers, suppliers, and communities, and stewardship of our planet. | ||
Key Attributes
The Board believes that the following attributes are essential for all Carrier directors:
▪Objectivity and independence ▪Sound judgment ▪High integrity ▪Effective collaboration | ▪Loyalty to the interests of Carrier and its shareowners ▪Ability and willingness to devote the time necessary to fulfill a director’s duties ▪Ability to contribute to the diversity of perspectives in the Board’s deliberations | ||||
| 2023 Proxy Statement | 11 | ||||
Director Independence
Under Carrier's Corporate Governance Principles, a substantial majority of our directors must be independent; meaning that the director does not have a direct or indirect material relationship with Carrier other than as a director. The Governance Committee assesses director independence pursuant to the New York Stock Exchange ("NYSE") listing standards, applicable law and Carrier's Director Independence Policy (the “Policy”), which is available on the Corporate Responsibility section of our website.
Before joining the Board, and annually thereafter, each director completes a questionnaire seeking information about relationships and transactions that may require disclosure or affect their director responsibilities, that may affect the independence determination, or that may affect the heightened independence standards that apply to members of the Audit Committee and Compensation Committee. The Governance Committee’s assessment considers all known relevant facts and circumstances about any relationships bearing on the independence of a director or nominee. The assessment also considers sales and purchases of products and services between Carrier, including its subsidiaries, and other companies or charitable organizations where a director and a nominee (and immediate family members) may have relationships that are pertinent to the independence determination.
Based on this assessment, the Board has determined that each of the nominees for election at the 2023 Annual Meeting, other than Mr. Gitlin who is currently an employee of Carrier, is independent under NYSE listing standards and the Policy because none of the nominees, other than Mr. Gitlin, has a business, financial, family or other relationship with Carrier that is considered material.
Additionally, the Board has determined that each member of the Audit Committee meets the independence requirements for audit committee membership under the NYSE listing standards and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Also, each member of the Compensation Committee and Governance Committee meets the independence and other requirements for compensation committee and governance committee membership as set forth in the NYSE listing standards, the company's Corporate Governance Principles and the rules of the Securities and Exchange Commission (“SEC”) applicable to boards of directors in general and compensation committees and governance committees in particular.
Additional Factors
In addition to the above attributes, in evaluating the suitability of a candidate the Board also considers other factors, including:
▪General understanding of global business, finance, risk management, technology and other disciplines, and policy matters relevant to the success of a large publicly traded company ▪Understanding of Carrier’s business and industry ▪Senior leadership experience | ▪Educational and professional background ▪Personal accomplishments ▪Diversity with respect to a broad range of personal characteristics | ||||
| The Board’s consideration of its diversity with respect to a broad range of a candidate’s personal characteristics demonstrates our commitment to inclusiveness and our conviction that our greatest strength is the diversity of our people. | ||
The Board believes that our current directors possess and demonstrate these attributes and diverse perspectives, and bring a strong blend of skills and experience to our deliberations.
12 | Carrier Global Corporation | ||||
Key Skills and Experience
In addition to the attributes expected of each director, the Board, through its self-evaluation process and in consultation with the Governance Committee, has identified additional skills and experience that are essential to the oversight and implementation of Carrier’s business and strategy requirements.
 | Financial | Senior leadership of a financial function and/or management of a large business, resulting in a proficiency with complex financial management, financial reporting, capital allocation, capital markets, and mergers and acquisitions – reflecting, among other things, the paramount importance we place on accurate financial reporting and robust financial controls and compliance. | |||||||||
 | Human Capital Management | We believe that our employees are our most important asset and that, in turn, our success and growth depend in large part on our ability to attract, retain and develop a diverse population of talented and high-performing employees at all levels of the company. This is why we value directors with experience in effectively recruiting, engaging, developing and retaining a talented workforce. | |||||||||
 | Innovation, Digital and Technology | Experience with or oversight of innovation (including developing and adopting new technologies), digital solutions, engineering, information systems and cybersecurity – skill sets that are vital to overseeing Carrier's transformation from an equipment manufacturer to a provider of digitally enabled lifecycle solutions. | |||||||||
 | International Business Operations | Carrier has operations around the world, and a significant portion of our sales derive from outside the United States. Directors with international business experience impart valued business, political and cultural perspectives in the Board’s deliberations. | |||||||||
 | Knowledge of Company/Industry | Knowledge or experience with Carrier’s businesses and/or products and services, whether acquired through service as a senior leader or board member of a relevant business, afford a deeper understanding of Carrier's strategic, operating, regulatory and competitive environment. | |||||||||
 | Marketing/Sales | This experience is beneficial as we focus on forming and strengthening customer relationships to provide our digitally enabled lifecycle solutions that create recurring sales opportunities. | |||||||||
 | Risk Management/ Oversight | This experience is critical to the Board’s role in overseeing and understanding major risk exposures, including significant compliance, cybersecurity, financial, human capital, operational, political, regulatory, reputational and strategic risks. | |||||||||
 | Senior Leadership | Extensive leadership experience with a significant enterprise provides a practical understanding of Carrier's organization, processes and strategic planning, and the challenges associated with developing talent and driving change and long-term growth. | |||||||||
The matrix on page 3 displays the most significant skills, experience and attributes of each director. The Governance Committee regularly reviews the composition of the Board to ensure that it maintains a balance of skills, experience and diversity of perspectives, and to assess whether there are gaps in light of current and anticipated strategic plans and business requirements.
| 2023 Proxy Statement | 13 | ||||
The Board’s Self-Evaluation Process
The Board believes that robust and constructive self-evaluation is an essential element of good corporate governance, Board effectiveness and continuous improvement. To this end, each year the Board evaluates its own performance and that of the standing committees and individual directors. The self-evaluation informs the Board’s consideration of the following: ▪Board leadership and structure ▪Membership criteria ▪Refreshment objectives, including committee assignments and succession planning ▪Opportunities to increase the Board’s overall effectiveness, including the addition of new skills and experience and diverse perspectives Dr. Jean-Pierre Garnier, our prior Lead Independent Director, guided the 2022 evaluation process in consultation with the Governance Committee and the Board. He then conferred with the directors individually to allow for their candid assessments of peer contributions and performance as well as Board and committee effectiveness. Afterwards, Dr. Garnier provided a summary of his conversations to the Board, which included feedback regarding the following topics: | The Governance Committee and Lead Independent Director design the annual self-evaluation process.  Our Lead Independent Director leads the annual self-evaluation. | ||||
▪The size and effectiveness of the Board and its committees ▪Board and committee leadership and committee assignments ▪The diversity, skills and experience of individual directors and the Board as a whole | ▪The Board's review of strategy and risk, including potential areas of disruption ▪The effectiveness of management's relationship with the Board ▪Succession planning for CEO/senior executive leadership | ||||
Board Refreshment and Nomination Process
The Board’s annual evaluation of its effectiveness encompasses the following questions, actions and outcomes, and plays an integral role in the refreshment and nomination process.
Does the Board have the most effective leadership and committee structure? Does the Board have the right membership criteria? Do the directors reflect the most effective mix of attributes, skills and experience and diversity of perspectives? | } | Based on these considerations, the Board adjusts as necessary its structure, membership criteria, composition, recruitment and nominations to continually enhance its effectiveness | } | 2022-2023 Outcomes ▪Designated new Lead Independent Director ▪Appointed new chairs of Governance Committee and Compensation Committee ▪Established Technology & Innovation Committee ▪Refreshed committee membership assignments ▪Appointed Susan N. Story a director, who brings expertise in finance, operations, cybersecurity, sustainability and strategy ▪Increased the size of the Board and broadened the skills, experience and diversity of its leadership and members ▪Nominated nine candidates for election at the 2023 Annual Meeting | ||||||||||
The Board’s self-evaluation process is expected to contribute to the consideration of each incumbent as part of the refreshment and nomination process. The Governance Committee and Board also consider candidates recommended by the directors, management and shareowners who satisfy the criteria the Board seeks in its directors. A shareowner may recommend a director candidate by writing to Carrier’s Corporate Secretary (see "How Do I Contact the Corporate Secretary's Office" on page 69 for contact information). The Governance Committee or Board also may engage search firms to assist in identifying and evaluating candidates and to ensure that the Board is considering a larger and more diverse pool of candidates.
14 | Carrier Global Corporation | ||||
The Board believes that new ideas and perspectives are critical to a forward-looking board, as are the valuable experiences and deep understanding of Carrier’s business that a longer serving director offers. Our Corporate Governance Principles and Bylaws do not impose term limits on directors because the Board believes that a director who serves for an extended period will be uniquely positioned to provide insight and perspective regarding Carrier’s operations and strategic direction. Our Corporate Governance Principles do require that directors retire at the Annual Meeting after reaching age 75, unless the Board makes an exception to the policy in special circumstances. Upon the recommendation of the Governance Committee, the Board approved this exception for Dr. Garnier and nominated him for election at the 2023 Annual Meeting due to his deep and unique understanding of Carrier's business, industry and growth strategy gained during his tenure as a director of United Technologies Corporation ("UTC"), renamed Raytheon Technologies Corporation ("Raytheon" or "RTX"), and Carrier, his extensive experience overseeing international operations and the unique perspectives that his prior service as Carrier's first Lead Independent Director bring to our Board.
Nominees for the 2023 Annual Meeting
The Board, upon the recommendation of the Governance Committee, has nominated for election to the Board the nine individuals presented in this Proxy Statement. All are current directors of Carrier and were elected by the shareowners at the 2022 Annual Meeting, except for Susan N. Story who joined the Board in January 2023.
Ms. Story was identified as a candidate for the Board by a third-party search firm. After reviewing Ms. Story's qualifications and discussing her nomination, the Governance Committee recommended Ms. Story to the Board. Upon the recommendation of the Governance Committee and considering Ms. Story’s qualifications, the Board appointed Ms. Story as an independent director effective January 15, 2023, with a term expiring at the 2023 Annual Meeting.
If, prior to the 2023 Annual Meeting, any nominee becomes unavailable to serve, the Board may select a replacement nominee or reduce the number of directors to be elected. If the Board selects a replacement nominee before the 2023 Annual Meeting, the proxy holders will vote the shares for which they serve as proxy for that replacement nominee.
Our Board of Directors recommends a vote FOR the election of each of the nominees presented in the Proxy. | ||
 | Jean-Pierre Garnier, Ph.D. Independent Former Chief Executive Officer GlaxoSmithKline plc AGE: 75 | DIRECTOR SINCE: 2020 | COMMITTEES: Compensation, Technology & Innovation | ||||||||||||||||
CAREER HIGHLIGHTS ▪Advent International (global private equity) ▪Operating Partner, since 2011 ▪Pierre Fabre S.A. (pharmaceuticals) ▪Chief Executive Officer, 2008 to 2010 ▪GlaxoSmithKline plc (pharmaceuticals) ▪Chief Executive Officer and Executive Member of the Board of Directors, 2000 to 2008 ▪SmithKline Beecham plc (pharmaceuticals) ▪Chief Executive Officer, 2000 ▪Chief Operating Officer and Executive Member of the Board of Directors, 1996 to 2000 OTHER CURRENT DIRECTORSHIPS ▪Cellectis S.A. (non-executive Chairman), since 2020 | FORMER DIRECTORSHIPS ▪Carmat (non-executive Chairman), 2018 to 2022 ▪Radius Health, Inc., 2015 to 2022 ▪United Technologies Corporation, 1997 to 2020 ▪Idorsia Pharmaceuticals Ltd. (non-executive Chairman), 2017 to 2020 ▪Actelion Ltd. (non-executive Chairman), 2011 to 2017 ▪Renault S.A., 2009 to 2016 ▪Alzheon, Inc. (non-public), 2015 to 2018 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Member, Advisory Board of Newman’s Own Foundation ▪Knight Commander of the Order of the British Empire ▪Officier de la Légion d’Honneur of France ▪Member, Board of Directors, Max Planck Institute, 2013 to 2019 | ||||||||||||||||
| 2023 Proxy Statement | 15 | ||||
 | David L. Gitlin Chairman & Chief Executive Officer AGE: 53 | DIRECTOR SINCE: 2020 | COMMITTEES: None | ||||||||||||||||
CAREER HIGHLIGHTS ▪Carrier ▪Chairman, since 2021 ▪President & Chief Executive Officer, since 2019 ▪United Technologies Corporation (diversified manufacturer) ▪President & Chief Operating Officer, Collins Aerospace Systems, 2018 to 2019 ▪President, UTC Aerospace Systems, 2015 to 2018 ▪President, Aircraft Systems, UTC Aerospace Systems, 2013 to 2015 ▪Various senior positions since joining United Technologies in 1997, including: –President, Aerospace Customers & Business Development, Hamilton Sundstrand | –President, Auxiliary Power, Engine & Control Systems, Hamilton Sundstrand –Vice President and General Manager, Power Systems, Hamilton Sundstrand –Vice President, Pratt & Whitney Programs, Hamilton Sundstrand –General Manager, Rolls-Royce/General Electric Programs, Hamilton Sundstrand –Various positions at UTC headquarters and Pratt & Whitney OTHER CURRENT DIRECTORSHIPS [Committees] ▪The Boeing Company, since 2022 [aerospace safety, finance] | ||||||||||||||||
| John J. Greisch Lead Independent Director Former President & Chief Executive Officer Hill-Rom Holdings, Inc. AGE: 67 | DIRECTOR SINCE: 2020 | COMMITTEES: Compensation, Technology & Innovation | ||||||||||||||||
CAREER HIGHLIGHTS ▪TPG Capital (global private equity) ▪Senior Advisor, since 2018 ▪Hill-Rom Holdings, Inc. (medical technology) ▪President & Chief Executive Officer, 2010 to 2018 ▪Baxter International, Inc. (health care) ▪President, International Operations, 2006 to 2009 ▪Chief Financial Officer, 2004 to 2006 ▪President, Bioscience, 2003 to 2004 ▪Vice President, Finance and Strategy, Bioscience, 2003 ▪Vice President, Finance, Renal, 2002 to 2003 ▪FleetPride Corporation (truck and trailer parts distributor) ▪President & Chief Executive Officer, 1998 to 2001 ▪The Interlake Corporation (metal products), various positions, 1986 to 1997 ▪Price Waterhouse (public accounting), various positions, 1978 to 1985 OTHER CURRENT DIRECTORSHIPS [Committees] ▪Catalent, Inc., since 2018 [audit (chair), compensation] ▪Viant Medical (non-public, non-executive Chairman), since 2018 | FORMER DIRECTORSHIPS ▪Cerner Corporation, 2019 to 2022 ▪Idorsia Pharmaceuticals Ltd., 2017 to 2020 ▪Hill-Rom Holdings, Inc., 2010 to 2018 ▪Actelion Ltd., 2013 to 2017 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Member, Board of Directors, Ann & Robert H. Lurie Children’s Hospital of Chicago | ||||||||||||||||
16 | Carrier Global Corporation | ||||
 | Charles M. Holley, Jr. Independent Former Executive Vice President & Chief Financial Officer Wal-Mart Stores, Inc. AGE: 66 | DIRECTOR SINCE: 2020 | COMMITTEES: Audit (Chair), Governance | ||||||||||||||||
CAREER HIGHLIGHTS ▪Wal-Mart Stores, Inc. (retail and eCommerce) ▪Executive Vice President, 2016 ▪Executive Vice President & Chief Financial Officer, 2010 to 2015 ▪Executive Vice President, Finance and Treasurer, 2007 to 2010 ▪Senior Vice President, Finance, 2005 to 2007 ▪Senior Vice President & Controller, 2003 to 2005 ▪Various roles with Wal-Mart International, 1994 to 2002 ▪Deloitte LLP (public accounting) ▪Independent Senior Advisor, U.S. CFO Program, 2016 to 2019 ▪Tandy Corporation (electronics retailer), various roles ▪Ernst & Young LLP (public accounting), various roles OTHER CURRENT DIRECTORSHIPS [Committees] ▪Amgen, Inc., since 2017 [audit (chair), governance] ▪Phillips 66, since 2019 [audit, public policy & sustainability] ▪Sunrise Group Holdings, LLC (non-public), since 2023 | OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Member, Dean’s Advisory Board, McCombs School of Business, The University of Texas at Austin ▪Member, Presidents’ Development Board, The University of Texas at Austin ▪Trustee, MSB Foundation, The University of Texas at Austin | ||||||||||||||||
 | Michael M. McNamara Independent | ||||||||||||||||||||||
Co-Founder & Chief Executive Officer Samara | Former Chief Executive Officer Flex Ltd. | ||||||||||||||||||||||
AGE: 66 | DIRECTOR SINCE: 2020 | COMMITTEES: Governance, Technology & Innovation (Chair) | |||||||||||||||||||||||
CAREER HIGHLIGHTS ▪Samara (backyard home manufacturer) ▪Co-Founder and Chief Executive Officer, since 2022 ▪Airbnb, Inc. (Samara division) ▪Head, 2020 to 2022 ▪Eclipse Ventures (venture capital) ▪Venture partner, 2019 to 2022 ▪Flex Ltd. (product development firm) ▪Chief Executive Officer, 2006 to 2018 ▪Various roles since joining Flex Ltd, in 1994, including Chief Operating Officer OTHER CURRENT DIRECTORSHIPS [Committees] ▪Workday, Inc., since 2011 [audit, governance] ▪SynAgile Corporation (non-public, biopharmaceutical), since 2021 | FORMER DIRECTORSHIPS ▪PCH International Holdings (non-executive Chairman), 2019 to 2023 ▪Skyryse, 2019 to 2022 ▪Slack Technologies, Inc., 2019 to 2021 ▪Flex Ltd., 2005 to 2018 ▪Delphi Corporation, 2009 to 2012 ▪MEMC Corporation, 2007 to 2011 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Member, Advisory Board, New Legacy Opportunity Fund ▪Member, Visiting Committee Advisory Board, MIT Sloan School of Management | ||||||||||||||||||||||
| 2023 Proxy Statement | 17 | ||||
 | Susan N. Story Independent Former President & Chief Executive Officer American Water Works Company, Inc. AGE: 63 | DIRECTOR SINCE: 2023 | COMMITTEES: Audit, Compensation | ||||||||||||||||
CAREER HIGHLIGHTS ▪American Water Works Company, Inc. (water and wastewater utility) ▪President and Chief Executive Officer, 2014 to 2020 ▪Senior Vice President and Chief Financial Officer, 2013 to 2014 ▪Southern Company (gas and electric utility holding company) ▪Chief Executive Officer, Southern Company Services, Inc., and Executive Vice President, Southern Company, 2011 to 2013 ▪President and Chief Executive Officer, Gulf Power Company, Inc., 2003 to 2010 ▪Executive Vice President, Engineering and Construction, 2001 to 2003 ▪Senior Vice President, Southern Power Company, 2001 to 2003 OTHER CURRENT DIRECTORSHIPS [Committees] ▪Dominion Energy, Inc., since 2017 [finance & risk, governance] ▪Newmont Corporation, since 2020 [audit] | FORMER DIRECTORSHIPS ▪Raymond James Financial, Inc., 2008 to 2023 (former Lead Independent Director) ▪American Water Works Company, Inc., 2014 to 2020 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Board of Advisors, H. Lee Moffitt Cancer Center and Research Institute | ||||||||||||||||
 | Michael A. Todman Independent Former Vice Chairman Whirlpool Corporation AGE: 65 | DIRECTOR SINCE: 2020 | COMMITTEES: Audit, Compensation (Chair) | ||||||||||||||||
CAREER HIGHLIGHTS ▪Whirlpool Corporation (home appliances and related products) ▪Vice Chairman, 2014 to 2015 ▪President, Whirlpool International, 2006 to 2007 and 2009 to 2014 ▪President, Whirlpool North America, 2007 to 2009 ▪Executive Vice President, Whirlpool Corporation, and President, Whirlpool Europe, 2001 to 2005 ▪Various capacities since joining Whirlpool in 1993, including management, operations, sales and marketing positions in North America and Europe ▪Wang Laboratories, Inc., (computers), various roles ▪Price Waterhouse (public accounting), various roles OTHER CURRENT DIRECTORSHIPS [Committees] ▪Brown-Forman Corporation, since 2014 [audit (chair), governance] ▪Prudential Financial, Inc., since 2016 [compensation (chair), executive, finance & risk] ▪Mondelez International, Inc., since 2020 [audit, finance (chair)] | FORMER DIRECTORSHIPS ▪Newell Brands, Inc., 2007 to 2020 ▪Whirlpool Corporation, 2006 to 2015 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Chairman, Board of Directors, Boys & Girls Clubs of Benton Harbor, Michigan ▪President, Whirlpool Foundation ▪Board of Directors, Corewell Health ▪Board of Directors, Cornerstone Alliance | ||||||||||||||||
18 | Carrier Global Corporation | ||||
 | Virginia M. Wilson Independent Former Senior Executive Vice President & Chief Financial Officer Teachers Insurance and Annuity Association of America AGE: 68 | DIRECTOR SINCE: 2020 | COMMITTEES: Audit, Governance (Chair) | ||||||||||||||||
CAREER HIGHLIGHTS ▪Teachers Insurance and Annuity Association of America (financial services) ▪Senior Executive Vice President & Chief Financial Officer, 2010 to 2019 ▪Wyndham Worldwide (hospitality) ▪Executive Vice President & Chief Financial Officer, 2006 to 2009 ▪Cendant Corporation (consumer services in real estate and travel industries) ▪Executive Vice President & Chief Accounting Officer, 2003 to 2006 ▪MetLife, Inc. (insurance) ▪Senior Vice President & Controller, 1999 to 2003 ▪Transamerica Life Insurance Companies ▪Senior Vice President & Controller and other finance roles, life insurance division, 1995 to 1999 ▪Deloitte & Touche LLP (public accounting) ▪Audit partner | OTHER CURRENT DIRECTORSHIPS [Committees] ▪Charles River Laboratories International, Inc., since 2019 [audit (chair), governance] FORMER DIRECTORSHIPS ▪Conduent, Inc., 2017 to 2020 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Member, Board of Trustees, Catholic Charities of the Archdiocese of New York | ||||||||||||||||
 | Beth A. Wozniak Independent Chief Executive Officer & Director nVent Electric plc AGE: 58 | DIRECTOR SINCE: 2021 | COMMITTEES: Governance, Technology & Innovation | ||||||||||||||||
CAREER HIGHLIGHTS ▪nVent Electric plc (global provider of electrical connection and protection solutions) ▪Chief Executive Officer and Director, since 2018 ▪Pentair plc (industrial manufacturing) ▪President, Electrical segment, 2017 to 2018 ▪President, Flow & Filtration Solutions global business unit, 2015 to 2016 ▪Honeywell International, Inc. (technology and manufacturing) and its predecessor Allied Signal Inc. ▪Various executive leadership and program management positions from 1990 to 2015, including: –President, Environmental and Combustion Controls business –President, Sensing and Control business –Vice President, Business Integration –Vice President, Six Sigma –Vice President, Engineering and Program Management | OTHER CURRENT DIRECTORSHIPS ▪nVent Electric plc, since 2018 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Officer and Vice-Chair, National Electrical Manufacturers Association (NEMA) | ||||||||||||||||
| 2023 Proxy Statement | 19 | ||||
Corporate Governance
Our Commitment to Sound Corporate Governance Practices
As the summary on page 3 demonstrates, Carrier is committed to strong corporate governance practices. Our governance framework enables our independent, experienced and accomplished directors to provide advice, insight and oversight that promotes the long-term interests of the company, our shareowners and other stakeholders.
We encourage you to visit the Corporate Responsibility section of our website (see page 10), where you can access Carrier’s governance and ESG framework documents. These documents reflect our commitments to integrity, transparent financial reporting and strong financial controls, our approach to corporate governance and risk management, and our commitment to the environment and sustainability. These documents include:
▪Certificate of Incorporation ▪Bylaws ▪Corporate Governance Principles ▪Board Committee Charters ▪Director Independence Policy ▪Related Person Transactions Policy ▪Share Ownership Requirements ▪Code of Ethics and excerpts from Carrier's Corporate Policy Manual ▪Information about the Carrier Integrity Line for Anonymous Reporting that allows employees and other stakeholders to ask questions or raise concerns confidentially and outside the usual management channels ▪Information about how to communicate concerns with our Board, Lead Independent Director or one or more independent directors ▪2022 Environmental, Social & Governance Report ▪2030 Environmental, Social & Governance Goals | ||
Significant Corporate Governance Actions
The Board consistently demonstrated its commitment to sound corporate governance practices through many actions taken during the two-year period following Carrier's separation from UTC, renamed Raytheon. These included enhanced Bylaws, improved Corporate Governance Principles and expanded share ownership requirements. The Board also strengthened oversight of related party transactions, completed a succession plan in Board leadership with the election of David Gitlin as Carrier's Chairman and CEO, and added a new director, Beth A. Wozniak. We continued this year with additional actions to further strengthen corporate governance and refresh our Board.
Completion of Succession Plan in Lead Independent Director Role
In April 2022, the independent directors of the Board designated John J. Greisch to serve as Lead Independent Director, succeeding Dr. Garnier. The robust duties and responsibilities of our Lead Independent Director role are expressly set forth in Carrier's Corporate Governance Principles and are summarized on page 22.
Improved Oversight Over Technology and Innovation
Given the increasingly significant role that technology and digital play in Carrier's growth strategy, creation of long-term value for shareowners and our commitment to sustainability, the Board decided that more focused oversight would be appropriate and established the Technology & Innovation Committee in April 2022, chaired by Michael M. McNamara. For additional details on the responsibilities of the Technology & Innovation Committee, see "Committee Responsibilities, Composition and Meetings," which begins on page 23.
Increased Diversity of Perspectives: Changes to Board and Committee Composition
In April 2022, the Board elected Michael A. Todman as Chair of the Compensation Committee. In January 2023, Susan N. Story was appointed to our Board, and Virginia M. Wilson was appointed Chair of the Governance Committee. We also took the opportunity presented by these actions, and the establishment of the Technology & Innovation Committee, to continually refresh the membership of our committees to bring new perspectives, insights and expertise.
As a result, we now have diverse director nominees in leadership positions on two of our four committees and a larger percentage of gender diverse director nominees on our Board.
20 | Carrier Global Corporation | ||||
Enhanced Oversight of ESG
In February, we amended our Corporate Governance Principles and the charters of each of our committees to further refine the Board’s oversight of ESG. The amendments elevated primary responsibility to the full Board for Carrier’s ESG program, goals and objectives, including climate-related matters, and delegated certain elements to our committees to leverage their respective areas of expertise. This approach reflects our belief that sustainability and Carrier’s growth strategy are inseparable and underscores our commitment to our stakeholders and the stewardship of our planet. For additional details on the Board and committees' oversight of ESG, see "Board Responsibilities and Meetings" and "Committee Responsibilities, Composition and Meetings" beginning on pages 22 and 23, respectively. You also can access our amended Corporate Governance Principles and Committee Charters on the Corporate Responsibility section of our website (see page 10).
Board Leadership Structure
Chairman and CEO Roles
The Board does not have a policy about whether the roles of Chairman of the Board and CEO should be separate or combined. Rather, under our Corporate Governance Principles, the Board has flexibility to choose the leadership structure that it believes will provide the most effective leadership and oversight for the company and its growth strategy. The Governance Committee routinely reviews our governance practices and Board leadership structure, and the Board selects the structure that it believes provides the most effective leadership and oversight for the company. In making this decision, the Board considers a range of factors, including the company’s operating and financial performance, recent or anticipated changes in the CEO role, the effectiveness of the processes and structures for Board interaction with and oversight of management, and the importance of maintaining a single voice in leadership communications and Board oversight, both internally and externally, including with investors.
Combined Role of Chairman and CEO under David Gitlin
In February 2021, the Board elected David Gitlin, Carrier’s CEO, to the additional position of Chairman of the Board, effective April 2021, to succeed Executive Chairman John V. Faraci. The Board again elected Mr. Gitlin to this role in April 2022, and it continues to believe that the interests of shareowners are best served at this time if the roles of Chairman and CEO remain combined in Mr. Gitlin. The Board's belief is based on the following:
▪Mr. Gitlin has served as President & CEO of Carrier since June 2019 and as a director since UTC, renamed Raytheon, completed the spinoff of Carrier (the "Separation") into an independent publicly traded company.
▪Before joining Carrier, he had been a 22-year veteran of UTC and held numerous senior positions, including President & Chief Operating Officer of Collins Aerospace Systems, which in 2019 had annual net sales of $26 billion, and President of UTC Aerospace Systems.
▪Through the Separation from UTC, the transformation of Carrier into an independent public company and throughout the COVID-19 pandemic, Mr. Gitlin has demonstrated strong and effective leadership.
▪During the past year, he has continued to demonstrate strong and effective leadership in the wake of the COVID-19 pandemic and subsequent economic uncertainties by delivering strong and consistent year-over-year growth (see "2022 Performance and Business Highlights" on page 5) while executing on strategic priorities, including the divestiture of Carrier's Chubb business and the acquisition of TCC.
▪Mr. Gitlin has the requisite vision, experience and business acumen to lead the Board as well as the company.
▪He has fostered a strong working relationship between the Board and management through transparency and receptiveness to new ideas and approaches, active and effective engagement with investors and other stakeholders and by cultivating accessibility to the management team.
▪The combined roles of Chairman and CEO promote decisive, unified leadership as Carrier continues to transform its businesses and operations and to implement its long-term growth strategy.
▪As delineated in the Corporate Governance Principles, the Board has maintained a robust role for the Lead Independent Director, and Dr. Garnier and Mr. Greisch have exhibited strong and consistent leadership fulfilling that role and, along with the other independent directors, exercise active oversight of the Chairman and CEO.
▪As demonstrated on pages 3 and 20 through 26, the Board has maintained and continually refined strong governance practices which ensure robust independent oversight, shareowner feedback, and Board and management accountability.
| 2023 Proxy Statement | 21 | ||||
Lead Independent Director Responsibilities
As expressly set forth in our Corporate Governance Principles, the Board designates a non-employee director to serve as Lead Independent Director when the Chairman is not independent. The Lead Independent Director’s responsibilities include the following and essentially mirror a non-executive Chairman’s responsibilities:
▪May call and preside over private sessions of the independent directors ▪May call special meetings of the Board and preside over such meetings when the Chairman is not present ▪Serves as liaison between the independent directors and the Chairman ▪Engages with significant constituencies, as requested ▪Works with the Chairman to plan and set the agenda for Board meetings | ▪Oversees the performance evaluation and compensation of the CEO ▪Facilitates succession planning and management development ▪Facilitates the Board’s annual self-evaluation process ▪Authorizes the retention of outside advisors and consultants who report to the Board on board-wide issues | ||||
The Board believes that a Lead Independent Director with well-defined responsibilities enhances the effectiveness of the independent directors, improves risk management and oversight, and provides a channel for independent directors to candidly raise issues or concerns for the Board’s consideration.
Board Responsibilities and Meetings
The Board and our directors operate pursuant to Carrier's Certificate of Incorporation, Bylaws, Corporate Governance Principles, Director Independence Policy, Related Persons Transaction Policy, Share Ownership Requirements Policy and Code of Ethics – all of which are available on the Corporate Responsibility section of our website (see page 10).
Chair: David L. Gitlin | Meetings: 6 Stated Meetings (additional Special Meetings as required) | ||||
Lead Independent Director: John J. Greisch | |||||
Primary Responsibilities: ▪Oversees Carrier's strategy, business and affairs in the best interests of Carrier and its shareowners ▪Advances the long-term interests of Carrier and its shareowners while also responsibly addressing the concerns of other stakeholders, including Carrier employees, customers, suppliers and communities, and the stewardship of our planet ▪Oversees Carrier's ESG program, including climate-related matters, and delegates to one or more standing committees where oversight of certain program elements would be enhanced ▪Reviews, approves and monitors business strategies and objectives, including those related to Carrier's ESG program ▪Oversees significant risks and risk management activities, including those related to climate, pursuant to Carrier's ERM program ▪Selects, evaluates and plans succession of senior executive management, including the CEO ▪Elects/designates Board and committee leadership and committee members ▪Undertakes annual self-evaluation and regular refreshment actions, and selects director nominees for annual election ▪Establishes and enhances corporate policies and governance practices that promote and maintain the integrity of Carrier and respect the interests of our shareowners | |||||
Our Board engages with, provides informed and meaningful guidance and feedback to, and maintains an open dialogue with management primarily through stated meetings and additional special meetings where required. At each stated meeting, the agenda typically includes a review of the company’s financial results and outlook, a briefing on aspects of our long-term strategy, committee reports, and other matters whether requested by the directors or deemed pertinent by management. In addition, the Board and senior management hold an annual strategic planning session in October.
The Board met seven times in 2022. Directors attended 100% of the meetings of the Board and 100% of meetings of committees on which they served during 2022.
Carrier’s independent directors meet in regularly scheduled executive sessions without management and in additional sessions when requested. These sessions are led by our Lead Independent Director and typically occur before and/or after Board meetings. The Board met in executive session without management present during six of its seven meetings in 2022.
To prepare for Board and committee meetings, the directors receive the agenda and materials in advance to facilitate more informed discussion and decision-making.
Directors are encouraged to attend the Annual Meeting. All of our directors at the time attended the 2022 Annual Meeting, which was held virtually.
22 | Carrier Global Corporation | ||||
Committee Responsibilities, Composition and Meetings
The Board has four standing committees: Audit, Compensation, Governance and Technology & Innovation. Each Committee is composed exclusively of independent directors and operates pursuant to a written charter – all of which are available on the Corporate Responsibility section of our website (see page 10). Each charter is periodically reviewed by the respective committee to determine whether it should be updated to reflect best practices and/or director feedback. Committee meetings are generally held in conjunction with stated Board meetings, and additional meetings of the Audit Committee are held to review quarterly reports before filing with the SEC. The committees may meet more frequently, if necessary. Each committee has the authority to retain independent advisors to assist in the performance of its responsibilities.
Audit Committee
Chair: Charles M. Holley, Jr. | Meetings: 8 | ||||
Susan N. Story Michael A. Todman | Virginia M. Wilson | ||||
Primary Responsibilities: ▪Assists the Board in overseeing the integrity of Carrier’s financial statements and disclosures in Carrier's Form 10Q and 10K, including climate- and cybersecurity-related disclosures; the independence, qualifications and performance of Carrier’s independent auditors and internal audit function; the company’s compliance with its policies and procedures, internal controls, Code of Ethics and applicable laws and regulations; and the policies and practices of Carrier's ERM program; financial risks and other significant areas of risk, including compliance- and cybersecurity-related risks ▪Recommends to the Board the appointment of the independent auditor for ratification by shareowners ▪Responsible for compensation, retention and oversight of the independent auditor ▪Preapproves all audit services and permitted non-audit services to be performed for Carrier by its independent auditor ▪Reviews and approves the appointment and replacement of the senior Internal Audit executive | |||||
In February 2023, the Board determined that each of Messrs. Holley and Todman and Mses. Story and Wilson are “audit committee financial experts” as that term is defined in SEC rules and that each has accounting and financial management expertise as provided under the rules of the NYSE.
Compensation Committee
Chair: Michael A. Todman | Meetings: 5 | ||||
Jean-Pierre Garnier John J. Greisch | Susan N. Story | ||||
Primary Responsibilities: ▪Reviews Carrier’s executive compensation plans, practices and policies to ensure that they adequately and appropriately align executive and shareowner interests and mitigate compensation-based risk ▪Establishes and determines the satisfaction of performance goals for Carrier’s bonus plans for executives, including performance goals for senior executives related to implementation of Carrier's ESG program ▪Approves the annual objectives of the CEO and leads an evaluation of the CEO's performance against such objectives ▪Approves the compensation of the CEO, Section 16 officers and certain other senior executives ▪Reviews and approves Carrier’s practices for annual and LTI awards ▪Reviews a risk assessment of Carrier’s compensation policies, plans and practices ▪Reviews and monitors Carrier's employee engagement and inclusion and diversity programs, and related initiatives and goals of Carrier's ESG program, and conducts regular pay equity reviews of Carrier's compensation programs ▪Reviews and approves the Compensation Discussion and Analysis, Compensation Committee Report, and statements regarding shareowner advisory votes on executive compensation and frequency of such votes in Carrier's proxy statement. | |||||
| 2023 Proxy Statement | 23 | ||||
In February 2023, the Board determined that each of Messrs. Garnier, Greisch and Todman and Ms. Story are "non-employee directors" as that term is defined in the SEC rules.
Governance Committee
Chair: Virginia M. Wilson | Meetings: 3 | ||||
Charles M. Holley Michael M. McNamara | Beth A. Wozniak | ||||
Primary Responsibilities: ▪Identifies and recommends qualified candidates for election to the Board ▪Reviews and recommends appropriate amendments to Corporate Governance Principles and other Board policies ▪Designs in consultation with Lead Independent Director the annual self-evaluation of the Board, the committees and directors ▪Recommends appropriate compensation of non-employee directors ▪Submits to the Board recommendations for committee assignments and leadership ▪Oversees the orientation of new Board members and the continuing education of all directors ▪Assists the Board in its oversight responsibilities related to Carrier's corporate governance framework, charitable and philanthropic activities, environmental, health and safety programs and related ESG goals and initiatives, government relations (including the Carrier Political Action Committee ("Carrier PAC") and political expenditures), product integrity programs and positions on significant public issues | |||||
Technology & Innovation Committee
Chair: Michael M. McNamara | Meetings: 3 | ||||
Jean-Pierre Garnier John J. Greisch | Beth A. Wozniak | ||||
Primary Responsibilities: ▪Monitors technology and digital developments and trends, including those in the field of sustainability, that could have a material impact on Carrier, its customers and suppliers ▪Oversees Carrier's innovation strategy and its impact on Carrier’s performance, growth and competitive position ▪Evaluates Carrier’s competitiveness from a technology, digital and innovation standpoint ▪Assists the Board in overseeing Carrier’s strategy, risk management and ESG programs, including technology, innovation and sustainability initiatives and risks ▪Supports, as requested, the Governance Committee in its oversight of Carrier's environmental, health and safety and product integrity programs, and the Audit Committee in its oversight of information technology and cybersecurity programs | |||||
How We Manage Risk
Our Risk Management Framework
Carrier encounters an extensive range of risks, including compliance, financial, geopolitical, legal, operational, regulatory, reputational and strategic. Within these broad categories, specific risks include: climate impacts; cybersecurity; the competitive landscape (including disruptive technologies); human capital management (including talent acquisition, development and retention); logistics and supply chain; and the impact of disruptive events (including natural disasters and pandemics).
To manage these and other risks, we have implemented an ERM program, which is a companywide effort that is managed by senior executives and overseen by the Audit Committee and Board to identify, assess, manage, report and monitor enterprise risks that may affect our ability to achieve the company’s objectives and strategy.
As part of the ERM program, ownership of enterprise risk is assigned to the appropriate business segment or corporate function that is responsible for developing and implementing comprehensive mitigation plans. The Board reviews these risks and mitigation plans on an annual basis in conjunction with Carrier's strategic plan. Mitigation plans are reviewed for effectiveness and include a broad range of measures to manage and reduce risk, including adjustments to strategic and business initiatives, research and development, product design, increased protections for our facilities and supply chain, and enhanced internal controls, including employee and
24 | Carrier Global Corporation | ||||
contractor training. For example, in addition to regular online training and simulated phishing emails provided to employees and contractors each year, Carrier's cybersecurity team conducted an extensive tabletop exercise in 2022 with Carrier's CEO and senior executives that simulated an enterprisewide ransomware attack. The exercise focused on identifying and closing potential gaps and areas of delay in our internal controls and response procedures.
The Board and committees also review enterprise risks with senior management on an on-going basis throughout the year. Each committee has primary risk oversight responsibility in the areas that align with its focus and charter responsibilities as described in the table below. At each regular meeting, or more frequently as needed, the Board receives and considers committee reports that provide additional detail on risk management issues and management’s response to them. For example, cybersecurity risk is an enterprise risk that the Audit Committee and the Board oversee and review through regular committee reports and updates, which included two such briefings in 2022.
The Board’s Role in Risk Management
The full Board is responsible for Carrier’s strategic risks, while the Audit Committee oversees the company’s ERM policies and practices. Responsibility for the oversight of specific risk categories is allocated among the Board and its committees as follows:
| Full Board of Directors | |||||||||||
▪Major strategies and business objectives, including Carrier's ESG program and related goals ▪Significant risks and risk management activities, including climate-related risks, pursuant to Carrier's ERM program ▪Succession planning | |||||||||||
Audit Committee | Compensation Committee | Governance Committee | Technology & Innovation Committee | ||||||||
▪ERM policies and practices ▪Capital structure and significant capital appropriations ▪Compliance program ▪Cybersecurity risks ▪Financing reporting and related internal controls, including climate- and cybersecurity-related disclosures ▪Foreign exchange, interest rates and raw material hedging ▪Significant operational risks | ▪Compensation and benefit policies ▪Compensation of select senior leaders ▪Compensation plan design and compensation-related risk ▪Employee engagement and Inclusion & Diversity ▪Incentive plan performance metrics and goals, including those related to implementation of Carrier's ESG program ▪Pay equity | ▪Charitable and philanthropic ▪Conflict of interests ▪Corporate governance ▪Director independence ▪Environmental, health and safety ▪Government relations, including Carrier PAC and political expenditures ▪Positions on public issues ▪Product integrity | ▪Developments and trends in technology and digital, including sustainability ▪Disruption risk by technology and digital developments ▪Effectiveness of Carrier's technology and digital strategy and innovation programs | ||||||||
Succession Planning
On an annual basis, the CEO and Chief Human Resources Officer ("CHRO") provide the Board with information about succession planning for key senior leadership roles, including the CEO. Succession plans include a readiness assessment, biographical information and future career development plans. The Board’s views are incorporated into succession plans, which are updated annually based on this feedback. This output is the culmination of a broader, bottoms-up succession planning review and high-potential identification process that Carrier conducts across the organization on an annual basis.
| 2023 Proxy Statement | 25 | ||||
Government Relations and Public Policy Activities
Carrier engages in political activity and public policy advocacy on issues that impact the company’s business – whether at the local, state or federal level in the United States, or with foreign governments and international governmental organizations.
The Board believes that participating in the legislative and regulatory process is an important part of responsible corporate citizenship and that Carrier and its employees have a legitimate interest in public policy debates. The Governance Committee and Board review and monitor the company’s government relations activities, including those of the Carrier PAC. These activities are governed by and conducted in accordance with the standards articulated in our Code of Ethics and corporate policy on Government Relations, both of which are available on the company’s website.
Carrier’s government relations initiatives are intended to educate and inform officials and the public on a broad range of public policy issues that are important to our business and consistent with the best interests of the company, our shareowners and our other stakeholders. These initiatives are not based on the personal agendas of individual shareowners or Carrier’s directors, officers or employees.
The company does not make political contributions to candidates for U.S. federal office and, as a matter of policy, does not contribute to candidates for state or local office in the United States or for offices in foreign countries. The Carrier PAC, which is entirely funded by voluntary contributions, is nonpartisan and contributes to candidates for federal office who are supportive of Carrier’s corporate business interests and public policy goals, regardless of political party.
Shareowner Engagement
The Board and management believe in transparent and open communication with investors. Management routinely engages with our shareowners on business strategy, capital allocation, executive compensation, financial performance, governance and our ESG-related initiatives.
In February 2022, management hosted an Investor and Analyst Day at Carrier's headquarters in Palm Beach Gardens, Florida. Also in 2022, management participated in nine investor conferences, held a combination of over 250 in-person, video and teleconference meetings with shareowners around the world and proactively engaged with institutional investors holding more than 340 million shares of Carrier common stock, which represented about 40% of our shares outstanding.
Annually, shortly after filing our proxy statement, we reach out to our largest shareowners, which in 2022 consisted of shareowners representing approximately 60% of our outstanding shares. We offer these shareowners an opportunity to discuss with management a wide range of subjects, including corporate governance, ESG, inclusion and diversity, executive compensation and related matters.
In 2021 and 2022, as a result of our outreach efforts, our Lead Independent Director and senior executives engaged in discussions with two of Carrier's largest shareowners, BlackRock and Capital Group. Such meetings provided the opportunity to provide feedback to Carrier management on a variety of topics of interest to shareowners. In 2023, we expect our discussions with investors to focus on Carrier strategy, and the clarity and effectiveness of our disclosures, including those related to our 2030 ESG Goals.
Director Orientation and Education
Director Orientation
New directors participate in an orientation to familiarize them with Carrier and the roles and responsibilities of the Board, including topics tailored to each director’s committee assignments. New directors also learn about the company’s product and service offerings, strategy, business segments, financial statements, significant financial, accounting and risk management issues, and compliance programs.
Director Continuing Education
In 2022, COVID-19 precautionary measures prevented the Board from visiting any of our business segments as would typically occur. Instead, directors attended virtual reviews of the company's HVAC segment channel and markets, and received training on corporate governance developments and their fiduciary duties. In addition, members of the Audit Committee attended training regarding the Committee's oversight responsibilities related to external and internal investigations.
Directors are encouraged to attend outside continuing education programs and are reimbursed by the company for the cost of such programs and related expenses. Additional presentations and materials, including updates on recent governance and business developments, are provided to directors as appropriate.
26 | Carrier Global Corporation | ||||
Compensation of Directors
Pay Structure
Annual Retainer
Under the terms of the Carrier Board of Directors Deferred Stock Unit Plan (“Carrier Director DSU Plan”), annual base retainers for non-employee directors are payable 40% in cash and 60% in Deferred Stock Units ("DSUs"). A director may elect to receive the cash retainer in DSUs. | ||||||||||||||
| Non-Employee Director Annual Retainer | ||||||||||||||
 | ||||||||||||||
| ROLE | CASH($) | DEFERRED STOCK UNITS($) | TOTAL($) | ||||||||
| All Non-Employee Directors (base retainer) | 124,000 | 186,000 | 310,000 | ||||||||
Additional Compensation for Services as:1 | |||||||||||
| Lead Independent Director | 14,000 | 21,000 | 35,000 | ||||||||
| Audit Committee Chair | 10,000 | 15,000 | 25,000 | ||||||||
| Audit Committee Member | 6,000 | 9,000 | 15,000 | ||||||||
| Compensation Committee Chair | 8,000 | 12,000 | 20,000 | ||||||||
| Governance Committee Chair | 8,000 | 12,000 | 20,000 | ||||||||
| Technology & Innovation Committee Chair | 8,000 | 12,000 | 20,000 | ||||||||
1Directors serving in multiple leadership roles receive incremental compensation for each role.
In October 2021, the Board (upon the Governance Committee's recommendation) determined to keep non-employee director compensation amounts for the April 2022 to April 2023 Board cycle the same as for the April 2021 to April 2022 Board cycle. In October 2022, apart from the addition of compensation for the chair of the newly created Technology & Innovation Committee, the Board (upon the Governance Committee's recommendation) again determined to keep non-employee director compensation amounts for the April 2023 to April 2024 Board cycle the same as for the April 2022 to April 2023 Board cycle.
Non-employee directors do not receive additional compensation for attending regularly scheduled Board or committee meetings, but they do receive an additional $5,000 cash payment for each special meeting attended in person. There were no such meetings in fiscal year 2022.
Annual retainers are paid each year following the Annual Meeting. New non-employee directors joining the Board between the Annual Meeting and the end of September receive 100% of the annual retainer. Directors joining the Board between October and the next Annual Meeting receive 50% of the annual retainer. DSUs are 100% vested at the time of grant, but settlement does not occur until after a non-employee director leaves the Board. At that time, DSUs are converted into shares of Carrier common stock, distributed either in a lump sum or in 10- or 15-year installments in accordance with the non-employee director’s prior elections.
Under the terms of the Carrier 2020 Long-Term Incentive Plan (the "LTI Plan"), the maximum annual compensation (cash and equity awards) that may be paid by the company to any non-employee director is $1.5 million.
Our non-employee directors are subject to the stock ownership requirements discussed under "Compensation Discussion and Analysis – Section V: Other Compensation Policies and Practices – Share Ownership Requirements," which begins on page 45.
Treatment of Dividends
When Carrier pays a dividend on its common stock, each non-employee director is credited with additional DSUs equal in value to the dividend paid on the corresponding number of shares of Carrier common stock.
| 2023 Proxy Statement | 27 | ||||
2022 Director Compensation
The following table sets forth information regarding the compensation paid to our directors for services in 2022.
| NAME | FEES EARNED OR PAID IN CASH($) | STOCK AWARDS($)2 | ALL OTHER COMPENSATION($)3 | TOTAL($) | ||||||||||
John V. Faraci1 | — | — | 25,000 | 25,000 | ||||||||||
| Jean-Pierre Garnier | — | 330,000 | 856 | 330,856 | ||||||||||
| John J. Greisch | — | 345,000 | 5,575 | 350,575 | ||||||||||
| Charles M. Holley, Jr. | 134,000 | 201,000 | 5,162 | 340,162 | ||||||||||
| Michael M. McNamara | — | 345,000 | 1,913 | 346,913 | ||||||||||
Susan N. Story4 | — | 162,500 | — | 162,500 | ||||||||||
| Michael A. Todman | 138,000 | 207,000 | 325 | 345,325 | ||||||||||
| Virginia M. Wilson | 130,000 | 195,000 | 25,450 | 350,450 | ||||||||||
| Beth A. Wozniak | 124,000 | 186,000 | 450 | 310,450 | ||||||||||
1As previously disclosed, in May 2020, Mr. Faraci received Restricted Stock Units ("RSUs") and SARs in his capacity as an executive officer; and on April 15, 2021, the Compensation Committee modified these awards to provide for vesting of the SARs upon retirement from the Board following May 14, 2021. Mr. Faraci retired from the Board effective April 14, 2022, and the SARs vested. The vested SARs accounted for $1.05 million of the incremental accounting expense that was reported in the company's 2022 Proxy Statement.
2Stock Awards consist of the grant date fair value of the DSU awards credited to the non-employee director’s account, including any portion of the annual cash retainer that the non-employee director elected to receive as DSUs. The value of the DSU awards was calculated in accordance with FASB ASC Topic 718 using assumptions described in Note 14 – Stock-Based Compensation, to the accompanying Notes to the Consolidated Financial Statements in Carrier’s 2022 Annual Report on Form 10-K. The number of units credited to each non-employee director, except Ms. Story, in 2022 was calculated by dividing the value of the award by $41.28, the NYSE closing price per share of Carrier common stock on April 14, 2022, the date of the 2022 Annual Meeting. For Ms. Story, the number of units credited was calculated by dividing the value of the award by $45.43, the NYSE closing price per share of Carrier common stock on January 17, 2023, the next trading date after January 15, 2023 (a non-market trading day), which was the effective date of her appointment to the Board.
3Amounts in this column include incidental benefits, matching contributions on behalf of Mr. Faraci ($25,000), Mr. Greisch ($5,250) and Ms. Wilson ($25,000) to eligible nonprofit organizations under the company’s matching gift program, which covers non-employee directors as well as company employees, and for Mr. Holley spousal travel on the corporate jet to and from the December meeting of the Board.
4As disclosed under "Annual Retainer" on page 27, the Carrier Director DSU Plan provides that new non-employee directors joining the Board between October and the next Annual Meeting receive 50% of the annual retainer, Ms. Story was appointed to Carrier’s Board effective January 15, 2023.
28 | Carrier Global Corporation | ||||
SHARE OWNERSHIP
Share Ownership Requirements
To encourage the alignment among the Board, management and shareowners, the Board has adopted share ownership requirements for non-employee directors, the CEO, the Chief Financial Officer ("CFO"), the segment presidents, the CHRO and the Chief Legal Officer ("CLO") as described in more detail on page 45. If non-employee directors and these executive officers do not meet their respective share ownership requirements within the applicable five-year period, they will not be permitted to sell shares of Carrier common stock until satisfying them. Each of the non-employee directors and the foregoing executive officers currently comply with their respective ownership requirements or are on track to meet them within the five-year period. In addition to the beneficial share ownership of Carrier directors, NEOs and executive officers described in the table below, the Outstanding Equity Awards at Fiscal Year-End Table on page 48 describes the Carrier equity awards held by each of our NEOs as of December 31, 2022.
Beneficial Share Ownership of Directors and Executive Officers
The following table provides information known to the company as of February 15, 2023, regarding the beneficial ownership of our common stock by: (i) each director and nominee; (ii) NEOs identified in "Compensation Discussion and Analysis" that begins on page 32; and (iii) the directors and executive officers as a group. None of the directors, the NEOs or the directors and executive officers together as a group owned more than 1% of our common stock as of that date. Unless otherwise noted, each person named in the table below has sole voting and investment power for the referenced shares.
| DIRECTORS AND EXECUTIVE OFFICERS | SARs EXERCISABLE WITHIN 60 DAYS1 | DSUs CONVERTIBLE TO SHARES WITHIN 60 DAYS2 | TOTAL SHARES BENEFICIALLY OWNED3 | ||||||||
| Jean-Pierre Garnier | 117,613 | 135,723 | |||||||||
| David Gitlin | 839,025 | 1,300,305 | |||||||||
| John J. Greisch | 34,648 | 70,065 | |||||||||
| Charles M. Holley, Jr. | 23,729 | 23,758 | |||||||||
| Michael M. McNamara | 23,650 | 23,650 | |||||||||
| Susan N. Story | 3,577 | 3,577 | |||||||||
| Michael A. Todman | 20,256 | 20,256 | |||||||||
| Virginia M. Wilson | 19,961 | 19,961 | |||||||||
| Beth A. Wozniak | 8,692 | 8,692 | |||||||||
| Patrick Goris | 21,127 | 43,536 | |||||||||
| Christopher Nelson | 289,562 | 386,847 | |||||||||
| Jurgen Timperman | 272,488 | 330,565 | |||||||||
| Timothy N. White | 6,338 | ||||||||||
Directors & Executive Officers as a group (17 in total)4 | 3,136,651 | ||||||||||
1The SARs in the table reflect the net number of shares of Carrier common stock that would be issued to the executive officers if their vested SARs were exercised within 60 days of February 15, 2023. Once vested, each SAR can be exercised for the number of shares of Carrier common stock having a value equal to the increase in value of a share of Carrier common stock from the date the SAR was granted through the exercise date. The net number of shares of Carrier common stock was calculated using $45.48 per share, which was the closing price on February 15, 2023.
2The non-employee director DSUs are converted into Carrier common stock upon termination of service. The table reflects the number of shares that the director has the right to acquire at any time within 60 days of February 15, 2023, following the director’s separation from the Board. Dr. Garnier acquired a portion of the DSUs reflected in the table in connection with the Separation and his prior service on the UTC Board of Directors.
3This includes shares for which voting and investment power is jointly held by the director or NEO: Messrs. Gitlin (295,671 shares) and Timperman (58,014 shares).
4This reflects as of February 15, 2023, the holdings of the directors and executive officers listed in the company’s 2022 Annual Report on Form 10-K.
| 2023 Proxy Statement | 29 | ||||
Principal Shareowners
The following table shows all shareowners known to Carrier to beneficially own more than 5% of the outstanding shares of Carrier common stock as of December 31, 2022.
| NAME AND ADDRESS | SHARES | PERCENT OF CLASS | ||||||
BlackRock, Inc.1 | 58,595,207 | 7.00 | % | |||||
Capital International Investors2 | 59,000,214 | 7.10 | % | |||||
Capital Research Global Investors3 | 78,167,940 | 9.30 | % | |||||
Capital World Investors4 | 81,933,352 | 9.80 | % | |||||
The Vanguard Group5 | 93,020,286 | 11.12 | % | |||||
1A report on Schedule 13G/A, filed January 31, 2023, disclosed that BlackRock, Inc., was the beneficial owner of 58,595,207 shares of common stock as of December 31, 2022. BlackRock, Inc., reported that it held sole voting power with respect to 52,065,119 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 58,595,207 shares and shared dispositive power with respect to zero shares. The address of BlackRock, Inc., is 55 East 52nd Street, New York, NY 10055. All information regarding BlackRock, Inc., is based on that entity’s report on Schedule 13G/A, filed with the SEC on January 31, 2023.
2A report on Schedule 13G/A, filed February 13, 2023, disclosed that Capital International Investors was the beneficial owner of 59,000,214 shares of common stock as of December 30, 2022, which beneficial ownership was disclaimed pursuant to Rule 13d-4 under the Exchange Act. Capital International Investors reported that it held sole voting power with respect to 58,377,978 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 59,000,214 shares and shared dispositive power with respect to zero shares. The address of Capital International Investors is 333 South Hope Street, 55th Floor, Los Angeles, CA 90071. All information regarding Capital International Investors is based on that entity's report on Schedule 13G/A filed with the SEC on February 13, 2023.
3A report on Schedule 13G/A, filed February 13, 2023, disclosed that Capital Research Global Investors was the beneficial owner of 78,167,940 shares of common stock as of December 30, 2022, which beneficial ownership was disclaimed pursuant to Rule 13d-4 under the Exchange Act. Capital Research Global Investors reported that it held sole voting power with respect to 78,149,270 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 78,167,940 shares and shared dispositive power with respect to zero shares. The address of Capital Research Global Investors is 333 South Hope Street, 55th Floor, Los Angeles, CA 90071. All information regarding Capital Research Global Investors is based on that entity's report on Schedule 13G/A filed with the SEC on February 13, 2023.
4A report on Schedule 13G/A, filed February 13, 2023, disclosed that Capital World Investors was the beneficial owner of 81,933,352 shares of common stock as of December 30, 2022, which beneficial ownership was disclaimed pursuant to Rule 13d-4 under the Exchange Act. Capital World Investors reported that it held sole voting power with respect to 81,690,030 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 81,933,352 shares and shared dispositive power with respect to zero shares. The address of Capital World Investors is 333 South Hope Street, 55th Floor, Los Angeles, CA 90071. All information regarding Capital World Investors is based on that entity's report on Schedule 13G/A filed with the SEC on February 13, 2023.
5A report on Schedule 13G/A, filed February 9, 2023, disclosed that The Vanguard Group was the beneficial owner of 93,020,286 shares of common stock as of December 30, 2022. The Vanguard Group reported that it held sole voting power with respect to zero shares, shared voting power with respect to 1,070,540 shares, sole dispositive power with respect to 89,771,548 shares and shared dispositive power with respect to 3,248,738 shares. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355. All information regarding The Vanguard Group is based on that entity’s report on Schedule 13G/A, filed with the SEC on February 9, 2023.
30 | Carrier Global Corporation | ||||
PROPOSAL 2 Advisory Vote to Approve Named Executive Officer Compensation WHAT ARE YOU VOTING ON? We are asking our shareowners to approve, on an advisory basis, the compensation of Carrier’s NEOs disclosed in the Compensation Discussion and Analysis (“CD&A”), the compensation tables and in the related notes and narrative in this Proxy Statement. | ||
BOARD RECOMMENDATION: Vote FOR | ||
Why Should You Vote For This Proposal?
In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, our shareowners have the opportunity to cast an annual advisory vote to approve the compensation of our NEOs as disclosed pursuant to the SEC’s compensation disclosure rules, which include the CD&A, the compensation tables and the narrative disclosures that accompany the compensation tables. The advisory vote on executive compensation is commonly referred to as the "say-on-pay" vote. While this vote is advisory and therefore not binding on the Board, the outcome of the vote and discussions with investors in the coming year will inform the Compensation Committee’s evaluation of Carrier’s compensation practices and the Committee’s future decisions regarding compensation. We also expect that investor feedback regarding the clarity and transparency of compensation disclosures, if any, will be reflected in future proxy statements to the extent appropriate. We currently hold annual say-on-pay votes, and the next say-on-pay vote will occur at the 2024 Annual Meeting of Shareowners.
The Board and the Compensation Committee believe that Carrier’s executive compensation program has effectively aligned pay with performance, while facilitating the retention of highly talented executives who are critical to our long-term success. Accordingly, the Board recommends that shareowners vote FOR the following resolution:
“RESOLVED, that the compensation of Carrier’s NEOs, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and related information provided in this Proxy Statement, is hereby APPROVED on an advisory basis.”
Our Board of Directors recommends a vote FOR this proposal. | ||
| 2023 Proxy Statement | 31 | ||||
Compensation Discussion and Analysis
This Compensation Discussion and Analysis ("CD&A") provides important information about Carrier’s executive compensation philosophy and programs for fiscal year 2022. In addition, this CD&A describes compensation decisions made by the Compensation Committee of the Board (sometimes referred to within this CD&A as the “Committee”), which is responsible for overseeing the compensation programs for all executives for 2022, including Carrier’s NEOs:
| NAMED EXECUTIVE OFFICERS (NEOs) | TITLE | ||||
David Gitlin | Chairman & Chief Executive Officer | ||||
Patrick Goris | Senior Vice President & Chief Financial Officer | ||||
Christopher Nelson | President, HVAC | ||||
| Timothy White | President, Refrigeration | ||||
Jurgen Timperman1 | President, Fire & Security | ||||
1In addition to his role as President, Fire & Security, Mr. Timperman assumed interim responsibility as Senior Vice President, Operations, effective July 5, 2022, until January 2023 when the permanent replacement started in the position.
Executive Summary
The overall objective of the compensation program is to encourage and reward the creation of sustainable, long-term shareowner value. The current elements of the executive compensation program directly align the interests of the executives and shareowners, are competitive, motivate achievement of short- and long-term financial goals and strategic objectives, and align realized pay with performance.
Philosophy and Guiding Principles
Carrier’s compensation programs are designed with a focus on long-term, sustained winning through customer commitment and operational excellence. We will drive performance against short- and long-term financial goals while executing the company’s strategic vision to create exceptional shareowner value.
Carrier’s guiding principles for executive compensation were established as follows:
▪We create compensation plans that are simple and transparent to employees and shareowners.
▪We strive to attract and retain the best and most diverse teams that are motivated through compensation programs that are market competitive.
▪We pay for performance and ensure that incentive plans have a clear connection between increasing shareowner value and exceeding customer commitments.
▪We clearly align compensation programs to business priorities and shareowner interests, underpinned by a culture strongly tied to the Carrier Code of Ethics and The Carrier Way.
Governance Practices
The Committee believes Carrier’s executive compensation program reinforces its pay-for-performance culture and includes corporate governance practices that are considered by investors to reflect market best practices.
32 | Carrier Global Corporation | ||||
| What We Do | What We Do Not Do | ||||
 Use an independent executive compensation consultant to advise the Committee Annually review and update the composition of our compensation peer group, as appropriate Emphasize long-term, performance-based compensation and meaningful share ownership guidelines to align executive and shareowner interests Align PSU payouts with stock price performance through a relative TSR metric Design transparent, formulaic incentive plans to promote short- and long-term business success Have "double-trigger" provisions for severance payable in the event of a change in control Have a "clawback" provision in both annual and long-term incentive plans to recover cash and equity incentive payments from executives in certain circumstances Maintain a three-year vesting schedule for annual equity awards Perform annual compensation risk assessment to ensure program does not encourage excessive risk-taking |  Provide excise tax gross-ups on severance/change in control payments Permit repricing of stock options or other equity-based awards without shareowner approval Pay dividends on SARs or PSUs during performance period Permit non-employee directors, executives or other employees to engage in short sales or enter into hedging, puts, calls or other "derivative" transactions with respect to company securities Permit non-employee directors or executives to engage in pledging, hedging or short sales Provide excessive perquisites Provide single-trigger benefits under change in control agreements Provide time-based RSUs to NEOs | ||||
2022 Say-on-Pay Vote
We engage with and value the feedback of our shareowners on the components of our executive compensation program. We also regularly engage with our independent compensation consultants, industry groups and proxy advisors to work to ensure that we are continually reviewing and evolving our compensation programs in line with competitive market standards. We share feedback received on our compensation programs and market practices with the Committee. In response to feedback received from shareowners and proxy advisors in 2022, this year's "Compensation Discussion and Analysis" provides additional information regarding relative peer group and payout thresholds for PSUs granted under the Long-Term Incentive Plan (the "LTI Plan"). The Committee carefully considers the long-term interests of the company and our shareowners when making decisions regarding our compensation programs. Carrier’s shareowners again expressed strong support for our executive compensation program at our 2022 Annual Meeting, with a vote of 94.1% in support.
| Favorable Say-on-Pay Results | |||||
| 2021 | 2022 | ||||
| 94% | 94% | ||||
| 2023 Proxy Statement | 33 | ||||
Section I: 2022 Financial Performance Summary
Our business strategy emphasizes driving solid top- and bottom-line growth. This includes establishing stretch, but attainable, goals for sales, adjusted operating profit, free cash flow and earnings per share to deliver sustainable shareowner value creation. Carrier’s executive compensation program is designed to motivate NEOs to execute this strategy.
2022 was a significant year for Carrier, as we continued to deliver strong financial results despite continued challenges related to significant and unprecedented inflationary headwinds and persistent supply chain challenges. We are pleased to report that the company performed well against key financial, operational and strategic performance targets in 2022, many of which are incorporated into our performance-based compensation plans.
| Financial Highlights | |||||||||||||||||
| GAAP | Adjusted* | ||||||||||||||||
▪In January 2022, the company sold Chubb, which represented over $2 billion in 2021 revenues. ▪Strong price/cost management and productivity drove higher operating profits in 2022 despite lower net sales primarily as a result of the Chubb sale. ▪Net sales decreased 1% year-over-year, with organic sales growth of 8%. ▪Operating margin increased 930 basis points, and adjusted operating margin was up 50 basis points. ▪Diluted EPS increased 119%, and adjusted EPS was up 3% despite the sale of Chubb and lower net sales. ▪Cash from operating activities and free cash flow in 2022 include tax payments associated with the gain on the Chubb sale as well as generally higher inventory levels related to supply chain challenges. ▪2022 capital deployment included a net decrease of about $750 million in our long-term debt, over $500 million in acquisitions, over $500 million in dividend payments and almost $1.4 billion in share repurchases. | |||||||||||||||||
Net sales (dollars in billions) | | | |||||||||||||||
Operating profit (dollars in billions) | | | |||||||||||||||
Operating margin (percent) | | | |||||||||||||||
Earnings per share (dollars per share) | | | |||||||||||||||
Net cash flows from operating activities/ Free cash flow (dollars in billions) | | | |||||||||||||||
* See Appendix A beginning on page 72 for information regarding non-GAAP measures and a reconciliation of each non-GAAP measure to the most comparable GAAP measure. | |||||||||||||||||
Cumulative Total Shareholder Return (TSR) (dollars per share) | |||||
•TSR is a financial metric used in our LTI Plan. •The graph compares the cumulative TSR of our common stock against the cumulative total return of the S&P 500 Index and the Dow Jones Industrials Index for the period from April 3, 2020 to December 31, 2022, assuming in each case a fixed investment of $100 at the respective closing prices of April 3, 2020, the date of Carrier's Separation, including reinvestments of dividends. •Our cumulative performance outpaced the S&P 500 Index and the Dow Jones Industrials Index over the same period. |  | ||||
34 | Carrier Global Corporation | ||||
Executive Compensation Program Overview
Carrier’s compensation programs are designed to reward strong financial performance that is aligned with long-term, sustainable shareowner value. The largest portion of compensation for the CEO and NEOs is at-risk compensation. As described in the table below, both our annual bonus and LTI awards are contingent on company performance relative to key financial metrics and multiyear cliff vesting requirements.
In accordance with the principle of aligning pay with performance, the Carrier Board, at the Committee’s recommendation, approved an annualized total target direct compensation package for the CEO, of which 90% is at risk. In addition, in 2022, 82% of total target direct compensation for other NEOs (on average) was at risk. Under the Annual Bonus and LTI plans, compensation is considered to be at risk because it is performance-based (payouts depend on achievement relative to pre-established performance goals), or subject to forfeiture in the case of a decrease in the company share price (even if vesting requirements are met), and is subject to restrictive covenants and clawback provisions.
The following table summarizes the principal components of the 2022 executive compensation program. These elements are intended to promote and reward financial performance through a variety of performance metrics and time horizons.
Executive Compensation Program Principal Components
| ELEMENT | FORM OF AWARD | PROGRAM COMPONENTS | 2022 TOTAL TARGET DIRECT COMPENSATION MIX 1 | ||||||||||||||||||||
| PERIOD | CEO | OTHER NEOs | |||||||||||||||||||||
| BASE SALARY | |||||||||||||||||||||||
| Cash | Fixed compensation component payable in cash | One year |  |  | |||||||||||||||||||
| ANNUAL BONUS | At-Risk Pay | Performance- Based Pay | |||||||||||||||||||||
| Cash | Variable compensation component payable in cash based on performance against annually established goals and assessment of individual and business segment performance | One year |  |  | |||||||||||||||||||
| LONG-TERM INCENTIVES (LTI) | |||||||||||||||||||||||
| Stock Appreciation Rights (SARs) 50% | Drive long-term stock price appreciation; align the interests of executives with shareowners; serve to retain executive talent | Three years |  |  | |||||||||||||||||||
| Performance Share Units (PSUs) 50% | Incentivize focus on long-term shareowner value creation through profitable growth and increase in share price over time; promote retention through long-term performance achievement and vesting requirements | Three years | |||||||||||||||||||||
| CEO 2022 | Other NEOs 2022 | |||||||
| ||||||||
1 For the calculations above, total target direct compensation for 2022 includes annual base salary, the target value of annual bonus compensation and the target value of annual LTI awards, but does not include the target value of other special, one-time grants (e.g., sign-on equity awards).
| 2023 Proxy Statement | 35 | ||||
Section II: Executive Governance Practices
Roles and Responsibilities
Carrier uses a collaborative process to make compensation decisions for executives. The table below summarizes the roles and responsibilities of the key participants that are involved in this process:
KEY PARTICIPANTS | PRIMARY ROLES AND RESPONSIBILITIES RELATING TO EXECUTIVE COMPENSATION DECISIONS | ||||
Compensation Committee (Composed of four independent, non-employee directors who report to the Board) | ▪Sets financial, strategic and operational goals and objectives for the company, the business segments and the CEO as they relate to the annual and long-term incentive plans ▪Assesses company, business segment and NEO performance relative to the pre-established goals and objectives set for the year ▪Recommends CEO pay adjustments to the Board based on its assessment of CEO performance and market data ▪Reviews the CEO’s recommendations for pay changes for Executive Leadership Team ("ELT") members and executive officers, and makes adjustments, as appropriate ▪Evaluates the competitiveness of the compensation packages for the CEO, NEOs, and non-NEO ELT members and executive officers ▪Approves all executive compensation program design changes, including incentive plans, severance, change in control, share ownership requirements, perquisites and supplemental benefit arrangements ▪Reviews risk assessments of Carrier’s compensation plans, policies and practices ▪Considers shareowner inputs regarding executive compensation decisions and policies ▪All decisions are subject to review by the other independent directors | ||||
Independent Compensation Consultant* (Pearl Meyer) | |||||