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. )
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| ☐ | Definitive Additional Materials | |||||||
| ☐ | Soliciting Material Pursuant to Rule 14a-12 | |||||||
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| Global Leader in Intelligent Climate and Energy Solutions | |||||||||||||
Transformation begins with belief. That innovation can make an impact. That taking care of people means taking care of the planet. That our solutions have the power to improve life today and tomorrow. It is why Carrier is transforming spaces every day. In homes. In buildings. Across the cold chain. Our inclusive, diverse team combines global and local expertise with an uncompromising commitment to customers. Together, we deliver intelligent, connected ecosystems and visionary breakthroughs that help support comfort, health and productivity while promoting sustainable energy usage. We are Carrier. A global leader in intelligent climate and energy solutions. For people, our planet and generations to come. | ||||||||||||||
The Carrier Way
The Carrier Way is our foundation, our north star. It defines our vision, values and cultural behaviors that allow us to create a workplace where we work and win, together, and always with a focus on delivering excellence, the right way.
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 embodies 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), to access Carrier’s Code of Ethics, excerpts from our Corporate Policy Manual and Environmental, Social and Governance ("ESG") framework documents.
MESSAGE FROM OUR LEAD INDEPENDENT DIRECTOR
 | Dear Fellow Shareowners, In 2023, Carrier took bold action to simplify its portfolio and accelerate its journey to becoming a pure-play global leader in intelligent climate and energy solutions. With the acquisition of Viessmann Climate Solutions and the planned exit of Carrier’s Fire & Security segment and commercial refrigeration business, Carrier is becoming a more focused company, well-positioned to deliver higher growth and superior value to its shareowners. The Carrier Board shares the management team’s vision of “performing while transforming” and is pleased to welcome Maximilian (Max) Viessmann as our newest director following the successful acquisition of Viessmann Climate Solutions. Max’s groundbreaking vision in digital transformation and deep knowledge of the climate and energy industries will be invaluable as Carrier continues to propel its growth strategy. 2023 was also a transition year for our Board. I began my tenure as Lead Independent Director, succeeding Dr. J.P. Garnier who, fortunately, has agreed to extend his service on the Board until 2025. His extensive global experience and deep understanding of our industry has been and will continue to be invaluable to us during this transformative period. Michael Todman and Virginia Wilson also ably stepped into new roles in 2023 as chairs of our Compensation and Governance committees. I am proud to serve on a board that is so well-positioned to guide Carrier’s management team in its mission to deliver outsized and sustainable value to shareowners. Our Board remains committed to maintaining robust oversight, especially on important governance issues. During the year, responsibility for Carrier's Environment, Social and Governance programs, goals and objectives was elevated to the full Board. This included expanding our disclosures, one of which was our submission to the Carbon Disclosure Project. Additionally, we oversaw the strengthening of Carrier's cybersecurity programs through enhanced public disclosures, external maturity assessments and a formalized governance structure to escalate critical cybersecurity risks and incidents to the Board. To further align the interests of Carrier management with those of its shareowners, we expanded Carrier’s share ownership requirements in 2023 to apply to all members of Carrier’s Executive Leadership Team. Carrier’s transformation is not just about adapting to change; it’s about embracing it. The Carrier Board will continue to help guide Carrier to sustainable, long-term value creation and engage with you, our shareowners, along the way. As shareowners, your trust and support have been instrumental in Carrier’s journey thus far, and we are committed to delivering long-term, sustainable value to you. Sincerely,  John J. Greisch Lead Independent Director | |||||||
"Carrier’s transformation is not just about adapting to change; it’s about embracing it. The Carrier Board will continue to help guide Carrier to sustainable, long-term value creation and engage with you, our shareowners, along the way." | ||||||||
2024 Proxy Statement | i | ||||
TABLE OF CONTENTS
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareowners to be held on April 18, 2024. This Notice of the 2024 Annual Meeting of Shareowners and Proxy Statement as well as Carrier’s 2023 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 2024 Annual Meeting of Shareowners on April 18, 2024, 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 5, 2024. At the meeting, votes will be taken on the matters listed in the Notice of 2024 Annual Meeting of Shareowners.
ii | Carrier Global Corporation | ||||
| March 5, 2024 | ||||
NOTICE OF 2024 ANNUAL MEETING OF SHAREOWNERS
Meeting Information |  | DATE AND TIME April 18, 2024 8:30 a.m. Eastern time |  | LOCATION Virtual Meeting www.virtualshareholdermeeting.com/CARR2024 | ||||||||||
| Agenda | BOARD RECOMMENDATION | READ MORE | |||||||||||||||
| 1 | Election of the Ten Director Nominees Named in the Proxy Statement |  | |||||||||||||||
FOR each Director Nominee | ► Page 11 | ||||||||||||||||
| 2 | Advisory Vote to Approve Named Executive Officer Compensation | | FOR | ► Page 32 | |||||||||||||
| 3 | Ratify Appointment of PricewaterhouseCoopers LLP to Serve as Independent Auditor for 2024 | | |||||||||||||||
| FOR | ► Page 63 | ||||||||||||||||
| 4 | Vote on the Shareowner Proposal set forth in the Proxy Statement, if properly presented |  | |||||||||||||||
| AGAINST | ► Page 65 | ||||||||||||||||
| 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/CARR2024. | ||||||||||
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 27, 2024 (the record date for this Annual Meeting). VIRTUAL MEETING FORMAT The 2024 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 18, 2024. Please see "Frequently Asked Questions About the Annual Meeting" on page 68 for more information about participating in the virtual meeting. By Order of the Board of Directors. Francesca Campbell Vice President, Corporate Secretary | ||||
2024 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 2024 Annual Meeting:
| Proposal | Board Recommendation | Page | ||||||||||||
| Proposal 1 | Election of the 10 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 2024 | Vote FOR | ||||||||||||
| Proposal 4 | Shareowner Proposal – Transparency in Lobbying | Vote AGAINST | ||||||||||||
Director Nominees and Governance
| Election of Directors | |||||||||||
What are you voting on? At the 2024 Annual Meeting,10 director nominees are to be elected to hold office until the 2025 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 2023 Annual Meeting, except for Max Viessmann who joined the Board in January 2024. | ||||||||||
| | Our Board recommends a vote FOR each nominee | ||||||||||
 | Jean-Pierre Garnier, 76 Former Chief Executive Officer, GlaxoSmithKline plc Director Since: 2020 Other Current Directorships: Cellectis S.A. |  | Susan N. Story, 64 Former President & Chief Executive Officer, American Water Works Company, Inc. Director Since: 2023 Other Current Directorships: Dominion Energy, Inc., Newmont Corporation | |||||||||||
 | David L. Gitlin, 54 Chairman & Chief Executive Officer, Carrier Global Corporation Director Since: 2020 Other Current Directorships: The Boeing Company |  | Michael A. Todman, 66 Former Vice Chairman, Whirlpool Corporation Director Since: 2020 Other Current Directorships: Brown-Forman Corporation, Prudential Financial, Inc., Mondelez International, Inc. | |||||||||||
 | John J. Greisch, 68 Former President & Chief Executive Officer, Hill-Rom Holdings, Inc. Director Since: 2020 Other Current Directorships: Catalent Inc., Viant Medical |  | Max Viessmann, 35 Chief Executive Officer & Member of the Executive Board, Viessmann Group GmbH & Co. KG Director Since: 2024 Other Current Directorships: Viessmann Group GmbH & Co. KG | |||||||||||
 | Charles M. Holley, Jr., 67 Former Executive Vice President & Chief Financial Officer, Wal-Mart Stores, Inc. Director Since: 2020 Other Current Directorships: Amgen, Inc., Phillips 66, Sunrise Group Holdings, LLC |  | Virginia M. Wilson, 69 Former Senior Executive Vice President & Chief Financial Officer, Teachers Insurance and Annuity Association of America Director Since: 2020 Other Current Directorships: Charles River Laboratories International, Inc. | |||||||||||
 | Michael M. McNamara, 67 Co-Founder & Chief Executive Officer, Samara; Former Chief Executive Officer, Flex Ltd. Director Since: 2020 Other Current Directorships: Workday, Inc. |  | Beth A. Wozniak, 59 Chief Executive Officer, nVent Electric plc Director Since: 2021 Other Current Directorships: nVent Electric plc | |||||||||||
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, governance practices and committee charters ▪Annual Board, committee and director evaluations; regular refreshment actions ▪80% of director nominees are independent ▪Robust Lead Independent Director with explicit responsibilities ▪Regular meetings of independent directors 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 ▪98% attendance at Board meetings in 2023 ▪96% attendance at committee meetings in 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TENURE 3.3 years average tenure | AGE 63 average age | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 members on Board since separation from UTC | 3 new Board members in last 3 years | 3 < 60 years | 1 60-65 years | 6 > 65 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIVERSITY 4 of 10 (40%) 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 Our 10-member Board of Directors includes our Chairman & Chief Executive Officer, one additional non-independent director and eight independent directors All independent directors meet the heightened independence standards for our Audit Committee and Compensation Committee | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 Female (30%) | 1 Racially Diverse (10%) | 8 Independent (80%) | 2 Not Independent (20%) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Max Viessmann | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Virginia M. Wilson | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Beth A. Wozniak | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ATTENDANCE | QUALIFICATIONS AND ATTRIBUTES | COMMITTEES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Directors attended 98% of the meetings of the Board and 96% of the meetings of the committees on which they served in 2023. |  | Financial |  | Knowledge of Company/Industry | A Audit Committee C Compensation Committee G Governance Committee T Technology & Innovation Committee |  | Member | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | Human Capital Management |  | Marketing/Sales | | Chair | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Innovation, Digital Technology and Cybersecurity |  | Risk Management/Oversight | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | International Business Operations |  | Senior Leadership | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
 | Diversity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2024 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.
2023 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 2023 | Other NEOs 2023 | |||||||||||||
 | ||||||||||||||
For the calculations above, total target direct compensation for 2023 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 or retention equity awards).
4 | Carrier Global Corporation | ||||
2023 Performance and Business Highlights
| GAAP | Adjusted* | ||||||||||
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 76 for information regarding non-GAAP measures and a reconciliation of each non-GAAP measure to the most comparable GAAP measure. | |||||||||||
▪Carrier delivered strong 2023 operating performance as it started executing its portfolio transformation. In April 2023, the company announced its acquisition of Viessmann Climate Solutions, which was completed on January 2, 2024. ▪The company also announced plans to exit its Fire & Security segment and commercial refrigeration business. ▪2023 net sales increased 8% year-over-year, with organic sales growth of 3% primarily due to strong price realization. Carrier gained share in all major segments and grew aftermarket by double digits for a third consecutive year. ▪2023 GAAP operating profit, operating margin and earnings per share ("EPS") comparisons to 2022 were impacted by portfolio transformation-related activities in both periods, including large gains in 2022 associated with the increase in our ownership interest in Toshiba Carrier Corporation (TCC) and the sale of Chubb. ▪Adjusting for these and other non-operational items, Carrier had another year of strong financial performance resulting in double-digit adjusted operating profit growth and adjusted operating margin expansion. | ▪Operating profit was lower compared to 2022 due to the previous year’s gains. Strong price/cost management and productivity drove the increase in adjusted operating profits in 2023. ▪Operating margin decreased 53% compared with last year primarily due to the portfolio transformation-related activities in 2023, while adjusted operating margin expanded 30 basis points despite a ~50-basis-point headwind from consolidating TCC, reflecting strong price/cost and productivity performance. ▪GAAP EPS and adjusted EPS benefited from strong operating performance along with lower net interest expense and a lower share count. GAAP EPS decreased as a result of portfolio transformation-related activities. ▪Cash from operating activities increased 50% versus the prior year driven by strong working capital performance. This also led to a free cash flow increase of 50% compared to 2022. | ||||||||||
Independent Auditor
Ratify Appointment of Independent Auditor for 2024 | |||||||||||
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, 2024. | 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 2024 | ||||||||||
2024 Proxy Statement | 5 | ||||
OUR COMPANY
About Carrier
Carrier is a global leader in intelligent climate and energy solutions, with a diverse and world-class workforce. Through our performance-driven culture, we are creating long-term shareowner value by growing earnings and investing strategically to strengthen our position in the markets we serve.
Our Business Segments
 | HVAC As a global leader in intelligent climate and energy solutions, Carrier is at the forefront of heating, ventilating and cooling solutions for residential, commercial and industrial customers around the world. Through an industry-leading family of HVAC brands, our global presence, and our innovative and differentiated digital solutions, we are transforming the built environment to be more energy efficient, sustainable and autonomous. Our solutions help customers achieve their targeted outcomes, including Abound, which monitors over 1.1 billion square feet of building space to help improve indoor air quality, and enhance occupant comfort and productivity. | ||||
 | Refrigeration Carrier is a global leader in cold chain transport equipment and monitoring solutions with the largest distribution network of nearly 1,700 dealers, distributors and service centers. We differentiate ourselves with both scale and technology to serve as a trusted partner throughout the cold chain. We are helping lead the shift toward electrification, more connected technologies and refrigerants with lower global warming potential. Carrier’s Lynx digital ecosystem offers a suite of advanced analytics solutions that provides customers with enhanced visibility, increased connectivity and actionable intelligence across their cold chain operations. | ||||
 | Fire & Security With industry-leading brands like Kidde, Edwards, LenelS2, Det-Tronics and GST, customers trust us for all their safety and security needs, from the most complex jobs to the simplest conveniences. We offer a comprehensive suite of lifecycle solutions, connected technologies, mobile applications and cloud-based services. We lead the market in innovation, from best-in-class water mist technology with Marioff to industry-first smart, integrated indoor air quality, smoke and carbon monoxide detectors for the home. | ||||
Secular Trends Driving Growth
As a global leader in intelligent climate and energy solutions for buildings and homes, and across the cold chain, Carrier is uniquely positioned to lean into secular trends that are transforming our industry and the world. These trends include a growing middle class, climate change, energy security and stability, and digitalization.
As cities grow, competing demands for natural resources strain infrastructure and food supply. Heating and cooling of buildings and homes, together with food waste, contribute an estimated 25% of annual global greenhouse gas emissions,1 significantly impacting global warming and climate change.
Carrier is addressing these challenges head-on through breakthrough innovation, electrification, energy-efficient solutions, the use of refrigerants with lower global warming potential, connected ecosystems and more to help mitigate climate change and help enable the transition to clean energy.
1Based on estimates from the International Energy Agency, the U.S. Energy Information Administration and the UNEP Food Waste Index Report 2021.
6 | Carrier Global Corporation | ||||
| Portfolio Transformation | |||||
At Carrier, we are evolving our business to take on the challenges of climate change. On January 2, 2024, we completed the acquisition of the climate solutions business (the “VCS Business”) of Viessmann Group GmbH & Co. KG (“Viessmann Group”). The addition positions Carrier as a digitally enabled, end-to-end sustainable climate and energy solutions provider that addresses all heating, cooling, renewables, solar photovoltaic technology, battery storage and energy management needs for the home and office. The combination enhances Carrier’s existing portfolio with access to the iconic Viessmann brand, a leading provider of highly efficient and renewable climate solutions with a more than 100-year record of innovation and sustainability and a differentiated direct-to-installer channel model. In addition to our acquisition of Toshiba Carrier Corp. in 2022, Viessmann Climate Solutions’ 12,000 team members further strengthen Carrier’s position as the leading HVAC provider globally, now positioning Carrier in the fast-growing residential and light commercial space in Europe. The acquisition of Viessmann Climate Solutions, together with the planned exits of our Fire & Security segment and commercial refrigeration business, will transform Carrier into a more focused, higher-growth business, further strengthening the company’s global leadership position in intelligent climate and energy solutions. | |||||
Advancing Solutions for Customers
Creating visionary breakthroughs for a better tomorrow
Carrier develops intelligent climate and energy solutions that support our commitment to achieving net-zero greenhouse gas emissions across our value chain by 2050. Our comprehensive offerings help customers reach and exceed their goals and stay ahead of regulatory changes.
We introduced more electric technologies and energy-efficient products to reduce dependency on fossil fuels, and we increased the use of refrigerants with lower global warming potential. We increased our annual investment in research and development, investing more than $2 billion in the last four years. In 2023, for the ninth year in a row, we released more than 100 new products. We also have more than 14,000 active patents and pending patent applications worldwide combined.
Carrier opened four additional i3 Labs in the United States, India, China and Japan. The innovation incubators are creative spaces where we ignite the development of disruptive technologies and empower our teams to test and develop solutions quickly, choosing speed to deliver differentiated customer solutions.
Building intelligent, connected ecosystems
We create digital solutions that leverage data-driven insights and artificial intelligence (AI) to help customers achieve their desired outcomes, while increasing our recurring revenues. Carrier expanded the capabilities and deployment of our key digital platforms, Abound and Lynx.
Internally, we continued to invest in Carrier IO, a single platform for connecting assets to the cloud. We continued to reduce the complexity of our enterprise resource planning landscape, enabling more agile and cost-efficient internal operations. In addition, we implemented digital initiatives to optimize factory operations to expedite time to market, inform decision-making and streamline overall manufacturing processes.
Our new Generative AI Task Force is guiding the company’s secure and responsible use of AI technology to drive efficiency and innovation. By applying the power of generative AI, Carrier is tackling a range of high-impact use cases related to operational efficiency, customer experience and more.
Accelerating aftermarket growth through lifecycle solutions
Our portfolio of digitally enabled lifecycle solutions expanded with offerings such as Abound Net Zero Management, Lynx Logix, InteliSense and more. Our comprehensive aftermarket offerings include remote monitoring and diagnostics, predictive maintenance, spare parts, repairs, modifications and upgrades, rentals and other cutting-edge digital services.
For the third consecutive year, Carrier achieved double-digit aftermarket growth in 2023. Our expanded Abound and Lynx offerings accelerated recurring revenues while helping customers achieve their sustainability goals. Across all business segments, insights from our connected devices help increase energy efficiency, optimize performance and implement solutions before issues arise. We also grew our catalog of parts, services and connected solutions.
2024 Proxy Statement | 7 | ||||
Sustainability
Carrier is developing visionary breakthroughs today to create a better tomorrow. Our solutions help customers achieve their decarbonization targets. We also incorporate sustainable practices throughout our global operations.
Carrier is leading the way to a more sustainable future. 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.
Learn about our goals and progress at corporate.carrier.com/esg-report | ||
In addition, Carrier 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. In accordance with this initiative, we unveiled our road map to achieve net-zero greenhouse gas emissions across our value chain by 2050. We also joined the Corporate Coalition for Innovation & Technology toward Net Zero, a business alliance dedicated to helping countries meet decarbonization and climate change goals.
Carrier's Road Map to Net Zero
8 | Carrier Global Corporation | ||||
Sustainable Solutions
Carrier’s road map involves strategically transforming our portfolio through electrification, integration and resilience. By providing sustainable solutions, we are also advancing toward our goal of helping customers avoid more than 1 gigaton of greenhouse gas emissions by 2030. Our products, services and digital capabilities help customers meet their energy, carbon and food-waste reduction goals. Energy-efficient heat pumps, all-electric refrigeration and building solutions, refrigerants with lower global warming potential and connected technologies are just a few of the ways we are improving efficiencies in buildings, in homes and across the cold chain.
Sustainable Investments
We have invested more than $965 million in sustainable research and design since 2020. Additionally, our global venture capital group, Carrier Ventures, expanded its portfolio of strategic partnerships with high-growth companies to accelerate the development of sustainable innovations and disruptive technologies for building and cold chain 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, analytics and telematics. | ||||
| Commitment to Excellence | We seek out companies that share our core values of respect, integrity, inclusion, innovation and excellence. | ||||
Sustainable Practices
We incorporate sustainable practices aimed at reducing greenhouse gas emissions, energy consumption, water withdrawal and waste to landfill. We are expanding the use of high-efficiency equipment, refrigerants with lower global warming potential, electric technologies and renewable energy. We achieved zero waste to landfill certification at 11 additional manufacturing sites in 2023 by transitioning to more sustainable methods of waste management.
2024 Proxy Statement | 9 | ||||
Inclusion & Diversity
Our inclusion philosophy, _belong, underscores the importance of culture in a diverse workplace where everyone can come to work – every day – and feel like they belong. To build upon that philosophy, in 2023, we introduced ally, outlining our principles for how employees can contribute to building an inclusive culture, globally. Our ally principles include advocate, listen, learn and yield. 2023 Diversity Representation |  | ||||
Global executive diversity* | Global women executives | U.S. People of Color executives | U.S. People of Color professionals | |||||||||||||||||||||||
27% in 2015 50% in 2023 | 20% in 2015 32% in 2023 | 13% in 2015 33% in 2023 | 18% in 2015 27% in 2023 | |||||||||||||||||||||||
* Global women and U.S. People of Color.
Our global Employee Resource Groups (ERGs) include Carrier Black Alliance, Carrier Hispanics & Latinos Employee Engagement Resource Group, Military & Veterans, Pride, Women Empowerment at Carrier and United Carrier Asian Network. They reflect the diversity of Carrier’s workforce; foster a culture of inclusion, allyship and sponsorship for all; and continue to be open to all employees. Our ERGs led sessions on networking and career planning and held grassroots events throughout the year. In Japan, with our recent acquisition of Toshiba Carrier Corp., we expanded our efforts with the creation of an inclusion and diversity council.
We maintain partnerships with several colleges and universities to strengthen our talent pipeline, and we increased student participation in our six-week leadership program. Mentors from Carrier led workshops on inclusion and diversity, and career preparation.
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.
| | |  |  | ||||||||
~$175M invested since inception in 1996 | 50+ countries with employee participation since inception | 8,800+ degrees earned since inception | 1,300+ current participants | ||||||||
Corporate Social Responsibility
Carrier supports organizations that promote the planet by advancing sustainable climate solutions, people by developing a skilled and diverse workforce, and the communities in which we live, work and operate. We encourage you to visit the Corporate Responsibility section of our website (www.corporate.carrier.com) to learn more.
We continued to support Habitat for Humanity through volunteer efforts, financial contributions and product donations from our Healthy Homes suite of indoor air quality and fire safety solutions. Along with other companies, we also supported trainings at the United Nations World Food Programme Transport Training Centre in Ghana to enhance cold chain transport and logistics capacities across West Africa. In addition, our Kidde business continued to grow its award-winning Cause For Alarm fire safety education initiative to support communities that are at higher risk of residential fires.
10 | Carrier Global Corporation | ||||
PROPOSAL 1 Election of Directors WHAT ARE YOU VOTING ON? The Board presents 10 nominees for election as directors at the 2024 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 2025 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. 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 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 | ||||
2024 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 all of the nominees for election at the 2024 Annual Meeting, except for Messrs. Gitlin and Viessmann, are independent under NYSE listing standards and the Policy, because none of them has a business, financial, family or other relationship with Carrier that is considered material. With respect to the two non-independent nominees, Mr. Gitlin is currently an employee of Carrier, and Mr. Viessmann is the Chief Executive Officer, a member of the Executive Board and a significant beneficial owner of the Viessmann Group, from which Carrier acquired the VCS Business and with which Carrier has entered into various related agreements as discussed further below.
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 Director Independence Policy, 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 considers their:
▪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 believes that our current directors possess and demonstrate these attributes and diverse perspectives and that they 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 below the skills and experience that are essential to the oversight and implementation of Carrier’s business and strategy requirements.
| | Financial | We place paramount importance on accurate financial reporting and robust financial controls and compliance. Therefore, we seek directors who have served in senior leadership roles of a financial function and/or the management of a large business that has resulted in a proficiency with complex financial management, financial reporting, capital allocation, capital markets, and mergers and acquisitions. | |||||||||
| | Human Capital Management | Experience in effectively recruiting, engaging, developing and retaining a talented workforce is crucial. 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. | |||||||||
| | Innovation, Digital, Technology and Cybersecurity | Experience with or oversight of innovation (including developing and adopting new technologies), digital solutions, engineering, information systems and cybersecurity are 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 | International business experience ensures that valued business, political and cultural perspectives are included in the Board’s deliberations. Carrier has operations around the world, and a significant portion of our sales derive from outside the United States. | |||||||||
| | 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 as a board member of a relevant business, affords a deeper understanding of Carrier's strategic, operating, regulatory and competitive environment. | |||||||||
| | Marketing/Sales | Marketing and sales experience is beneficial as we focus on forming and strengthening customer relationships to provide our digitally enabled lifecycle solutions that create recurring revenue opportunities. | |||||||||
| | Risk Management/ Oversight | Risk Management experience is critical to the Board’s role in overseeing and understanding enterprise risk exposures, including 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.
2024 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. 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 John Greisch, our Lead Independent Director, led the 2023 evaluation process and conferred with the directors individually to allow for their candid assessments of peer contributions and performance as well as Board and committee effectiveness. Mr. Greisch provided a summary of his conversations to the Board, which included feedback regarding the following topics: | 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 and ESG oversight ▪The effectiveness of management's relationship with the Board ▪Succession planning for CEO and senior 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 skills and experience and diversity of perspectives? | } | Based on these considerations, the Board adjusts as necessary its structure, composition, recruitment and nominations to enhance its effectiveness on a continual basis. | } | 2023-2024 Outcomes ▪Designated John J. Greisch as Lead Independent Director ▪Appointed new chairs of Governance Committee and Compensation Committee ▪Increased the size of the Board and broadened the skills, experience and diversity of its leadership and members ▪Refreshed committee membership assignments ▪Appointed Max Viessmann a director. He brings valuable expertise in digitalization, sustainability and technology, and in the climate and energy industries. ▪Nominated 10 candidates for election at the 2024 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. 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 73 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 often be uniquely positioned to provide insight and perspective regarding Carrier’s operations and strategic direction. Our Corporate Governance Principles provide 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 2024 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 his extensive experience leading and overseeing European businesses. The Board believes that Mr. Garnier's unique perspectives, experience and leadership will be critical as Carrier integrates the VCS Business and completes our announced portfolio transformation.
Nominees for the 2024 Annual Meeting
The Board, upon the recommendation of the Governance Committee, has nominated for election to the Board the 10 individuals presented in this Proxy Statement. All are current directors of Carrier and were elected by the shareowners at the 2023 Annual Meeting, except for Mr. Viessmann who joined the Board in January 2024 in connection with the acquisition of the VCS Business.
After joining the Viessmann Group in 2015 to lead its digital transformation efforts, Mr. Viessmann now serves as its Chief Executive Officer and member of its Executive Board. Mr. Viessmann brings experience to both the Board and the Technology & Innovation Committee with his global business management, digitalization and alternative energy sources that are invaluable for Carrier's transformation into a digitally enabled and end-to-end sustainable climate and energy solutions provider.
If, prior to the 2024 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 2024 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: 76 | 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 AND COMMITTEES ▪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 | |||||||
2024 Proxy Statement | 15 | ||||
David L. Gitlin Chairman & Chief Executive Officer AGE: 54 | 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 AND 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: 68 | 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 ▪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 AND COMMITTEES ▪Catalent, Inc., since 2023 (executive chair) ▪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: 67 | 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 AND 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 ▪Member, 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: 67 | 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 AND COMMITTEES ▪Workday, Inc., since 2011 (audit; governance) | 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 | ||||||||||
2024 Proxy Statement | 17 | ||||
Susan N. Story Independent Former President & Chief Executive Officer American Water Works Company, Inc. AGE: 64 | 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 AND COMMITTEES ▪Dominion Energy, Inc., since 2017 (sustainability and corporate responsibility, chair; finance & risk oversight; compensation and talent development) ▪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 | |||||||
18 | Carrier Global Corporation | ||||
Michael A. Todman Independent Former Vice Chairman Whirlpool Corporation AGE: 66 | 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 AND COMMITTEES ▪Brown-Forman Corporation, since 2014 (lead independent director; audit, chair; governance and nominating) ▪Prudential Financial, Inc., since 2016 (lead independent director; compensation and human capital, chair; executive, chair; finance) ▪Mondelez International, Inc., since 2020 (people and compensation, chair; governance) | 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 | |||||||
Max Viessmann Chief Executive Officer & Member of the Executive Board Viessmann Group GmbH & Co. KG AGE: 35 | DIRECTOR SINCE: 2024 | COMMITTEES: Technology & Innovation |  | |||||||
CAREER HIGHLIGHTS ▪Viessmann Group, since 2015 ▪Chief Executive Officer and Member of the Executive Board, since 2017 ▪The Boston Consulting Group, 2013-2015 ▪Angel investor in Europe and Asia, since 2011 | OTHER CURRENT DIRECTORSHIPS AND COMMITTEES ▪Viessmann Group, since 2017 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Chairman, Advisory Council of the German Cancer Research Center | |||||||
2024 Proxy Statement | 19 | ||||
Virginia M. Wilson Independent Former Senior Executive Vice President & Chief Financial Officer Teachers Insurance and Annuity Association of America AGE: 69 | 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 AND 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 Chair and Chief Executive Officer nVent Electric plc AGE: 59 | DIRECTOR SINCE: 2021 | COMMITTEES: Governance, Technology & Innovation |  | |||||||
CAREER HIGHLIGHTS ▪nVent Electric plc (global provider of electrical connection and protection solutions) ▪Chair and Chief Executive Officer, since 2023 ▪Chief Executive Officer and Director, 2018 to 2023 ▪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 AND COMMITTEES ▪nVent Electric plc, since 2018 OTHER LEADERSHIP EXPERIENCE AND SERVICE ▪Officer and Vice-Chair, National Electrical Manufacturers Association (NEMA) | |||||||
20 | Carrier Global Corporation | ||||
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 documents. These documents reflect our commitment 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 ▪2023 Environmental, Social & Governance Report ▪2030 Environmental, Social & Governance Goals | ||
Significant Corporate Governance Actions
The Board consistently demonstrates its commitment to sound corporate governance practices, policies and procedures designed to ensure that our Board effectively exercises its oversight role. We have implemented a number of actions over time to increase shareowner rights, enhance the Board’s structure, and augment our commitment to sustainability and corporate responsibility. In 2023, these actions included board refreshments, enhancing cybersecurity oversight, expanding climate-related disclosures and increasing alignment of senior management interests to company performance.
Increased Diversity of Perspectives
During 2023 and 2024, we appointed Ms. Story and Mr. Viessmann to the Board. Their diverse skills, experience, and backgrounds bring new perspectives and expertise to our Board and to the committees on which they serve. We also realigned committee assignments and elected new chairs to our Compensation and Governance committees, additions that we believe add new insights and diversification to our committees.
Strengthened Alignment of Management's Interests with Carrier Performance
In 2023, the Board strengthened the alignment of senior management's interests to Carrier's financial performance with the adoption of a new standalone Clawback Policy that requires the Board to pursue clawback for any incentive compensation paid during the prior three years to Section 16 officers that is based on performance measures that are the subject of a subsequent financial restatement. The clawback amount is the portion of incentive compensation that would not have been received if the restated financials had been used to calculate the compensation. This Clawback Policy is in addition to the existing clawback provisions set forth in our Long-Term Incentive Plan (the "LTI Plan") and Annual Bonus Plan, which allow the company to claw back LTI and bonus awards for reasons including misconduct, negligence or violations of certain post-employment covenants as discussed in greater detail in the "Compensation Discussion and Analysis" that begins on page 33. In addition to the Clawback Policy, the Compensation Committee, acting on behalf of the Board, also amended its Share Ownership Policy to extend share ownership requirements to all Executive Leadership Team ("ELT") members not previously covered under the policy. The Share Ownership Policy requires ELT members to own common stock (including RSUs and DSUs, but excluding stock options, SARs and unvested PSUs) that are equal in value to a position-specific multiplier of their then applicable base salary within five years of attaining their positions. It is the Committee's opinion that expanding such ownership requirements, which previously only applied to Directors and certain NEOs, further encourages the alignment of management and shareowner interests.
2024 Proxy Statement | 21 | ||||
Enhanced Cybersecurity Governance
Our Board understands the importance of maintaining a secure environment for our products, data and systems that effectively support our business objectives and customer needs. We have taken measures to improve and update our cybersecurity program, including increasing our cybersecurity disclosures, establishing a cadence for regular updates from our cybersecurity teams to the Audit Committee and Board, and overseeing assessments of the program's maturity and compliance with international cybersecurity standards. The Board also oversaw the creation of a management committee composed of several ELT members responsible for overseeing and escalating to the Board, as appropriate, critical cybersecurity risks and incidents. Additional details on how we manage risks, including risks associated with cybersecurity, are set forth in “How We Manage Risk” on page 25.
Board Leadership Structure
Chairman and CEO Roles
The Board does not have a policy about whether the roles of Chairman of the Board and Chief Executive Officer ("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
David Gitlin, Carrier's CEO, has served in the position of Chairman of the Board since April 2021. The Board again elected Mr. Gitlin to this role in April 2023, 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 and the transformation of Carrier into an independent public company, Mr. Gitlin demonstrated strategic vision and effective leadership.
▪During 2023, Mr. Gitlin's leadership and vision were critical to executing Carrier's announced transformation into a pure-play global leader in intelligent climate and energy solutions through the acquisition of the VCS Business and divestiture of the Fire & Security and commercial refrigeration businesses.
▪In the midst of the portfolio transformation, Mr. Gitlin has continued to demonstrate effective leadership by delivering strong and consistent year-over-year growth (see "2023 Performance and Business Highlights" on page 5), while executing on strategic priorities, including the completion of the acquisition of the VCS Business and the entry into agreements to sell the security access and commercial refrigeration businesses.
▪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, exercised active oversight of the Chairman and CEO.
▪As demonstrated on pages 3 and 21 through 27, the Board has maintained and continually refined strong governance practices that ensure robust independent oversight, shareowner feedback, and Board and management accountability.
22 | Carrier Global Corporation | ||||
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 non-employee 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 Lead Independent Director: John J. Greisch Meetings: 6 Stated Meetings (additional Special Meetings as required) | 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 ▪Oversees Carrier's ESG program, including climate-related matters, and delegates to one or more standing committees oversight of certain program elements ▪Reviews, approves and monitors business strategies and objectives ▪Oversees significant risks and risk management activities, pursuant to Carrier's Enterprise Risk Management ("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 2023. Together, directors attended 98% of the meetings of the Board and 96% of meetings of committees on which they served during 2023.
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 2023.
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 our directors at the time attended the 2023 Annual Meeting, which was held virtually.
2024 Proxy Statement | 23 | ||||
Committee Responsibilities, Composition and Meetings
The Board has four standing committees: Audit, Compensation, Governance and Technology & Innovation. The Audit, Compensation, and Governance committees are composed exclusively of independent directors. All four committees operate pursuant to a written charter – all of which are available on the Corporate Governance section of our website (see page 21). 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. Susan N. Story Michael A. Todman Virginia M. Wilson Meetings: 8 | Primary Responsibilities: ▪Assists the Board in overseeing the integrity of Carrier’s financial statements and disclosures in Carrier's Form 10-Q and 10-K, 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 January 2024, 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 Jean-Pierre Garnier John J. Greisch Susan N. Story Meetings: 5 | 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 the 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. | ||||
In January 2024, 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.
24 | Carrier Global Corporation | ||||
Governance Committee
Chair: Virginia M. Wilson Charles M. Holley Michael M. McNamara Beth A. Wozniak Meetings: 3 | 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 ▪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 Jean-Pierre Garnier John J. Greisch Max Viessmann Beth A. Wozniak Meetings: 3 | 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 contractor training.
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 on the following page. 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, with four briefings to the Audit Committee and one briefing to the Board.
2024 Proxy Statement | 25 | ||||
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 ▪Financial 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 policies ▪Conflicts of interest ▪Corporate governance ▪Director independence ▪Environment, 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.
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.
26 | Carrier Global Corporation | ||||
Shareowner Engagement
The Board and management believe in transparent and open communication with investors. Management routinely engages with our shareowners, and offers them an opportunity to discuss with management a wide range of subjects.
Shareowner Engagement in 2023 | |||||||||||
  | Proactive engagement with institutional investors holding more than 415 million shares of Carrier common stock  | Management hosted an investor event featuring Max Viessmann at Carrier’s headquarters in Palm Beach Gardens, Florida, in September  | Discussions with our largest shareowners after filing our 2023 Proxy Statement  | ||||||||
| Topics Discussed | |||||
2023 Topics Discussed | Expected 2024 Topics | ||||
▪Business strategy ▪Capital allocation ▪Executive compensation ▪Financial performance ▪Governance | ▪Carrier’s portfolio transformation ▪Strategy ▪Carrier’s sustainability targets and commitments, including those related to 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 2023, an external legal expert on governance matters presented to our directors. Directors also attended virtual reviews of the company's HVAC segment channel and markets, and received periodic updates on corporate governance developments.
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 developments, are provided to directors as appropriate.
2024 Proxy Statement | 27 | ||||
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 as1 | |||||||||||
| 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 2023, the Board (upon the Governance Committee's recommendation) determined to keep non-employee director compensation amounts for the April 2024 to April 2025 Board cycle the same as for the prior Board cycle. This marks the fifth consecutive Board cycle in which the Board compensation has remained the same (apart from a one-time reduction to the DSU amount during the COVID-19 pandemic and the addition of compensation for the chair of the newly created Technology & Innovation Committee in 2022).
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 special meetings in fiscal year 2023.
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 LTI Plan, the maximum annual compensation (cash and equity awards) that may be paid by the company to any non-employee director is $1.5 million.
Our non-employee directors are subject to the stock ownership requirements discussed under "Share Ownership Requirements" which begins on page 30.
28 | Carrier Global Corporation | ||||
Treatment of Dividends
When Carrier pays a dividend on its common stock, each non-employee director is credited with additional DSUs equal in value to the dividend paid on the corresponding number of shares of Carrier common stock.
2023 Director Compensation
The following table sets forth information regarding the 2023 compensation paid to our directors.
| NAME | FEES EARNED OR PAID IN CASH($) | STOCK AWARDS($)1 | ALL OTHER COMPENSATION($)2 | TOTAL($) | ||||||||||
| Jean-Pierre Garnier | — | 310,000 | 833 | 310,833 | ||||||||||
| John J. Greisch | — | 345,000 | 2,736 | 347,736 | ||||||||||
| Charles M. Holley, Jr. | 134,000 | 201,000 | 4,796 | 339,796 | ||||||||||
| Michael M. McNamara | — | 330,000 | 833 | 330,833 | ||||||||||
Susan N. Story | — | 325,000 | 4,138 | 329,138 | ||||||||||
| Michael A. Todman | 138,000 | 207,000 | 3,299 | 348,299 | ||||||||||
Max Viessmann3 | — | — | — | — | ||||||||||
| Virginia M. Wilson | 140,668 | 211,000 | 25,000 | 376,668 | ||||||||||
| Beth A. Wozniak | 124,000 | 186,000 | 880 | 310,880 | ||||||||||
1Stock 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 2023 Annual Report on Form10-K. The number of units credited to each non-employee director in 2023 was calculated by dividing the value of the award by $45.38, the NYSE closing price per share of Carrier common stock on April 20, 2023, the date of the 2023 Annual Meeting.
2Amounts in this column include incidental benefits, matching contributions on behalf of Ms. Wilson ($25,000) to an eligible nonprofit organization under the company’s matching gift program, which covers non-employee directors as well as company employees, and for Mr. Holley, Ms. Story and Mr. Todman spousal travel on the corporate jet to and from the December meeting of the Board.
3As disclosed under "Annual Retainer" on page 28, 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. Mr. Viessmann was appointed to Carrier’s Board effective January 2, 2024, therefore there is no reported compensation for 2023.
2024 Proxy Statement | 29 | ||||
SHARE OWNERSHIP
Share Ownership Requirements
To encourage the alignment among the Board, management and shareowners, effective January 1, 2024, the Compensation Committee on behalf of the Board expanded the existing share ownership requirements. Prior to the change, the share ownership requirements extended to Carrier's non-employee directors, the Chairman & CEO, and only certain ELT members. Beginning January 1, 2024, the share ownership requirements now extend to all ELT members and Carrier's Controller. The share ownership requirements vary by position and range from 1X to 6X base salary, or the annual cash retainer for non-employee directors. The share ownership requirements may be satisfied by ownership of company common stock, Deferred Stock Units (“DSU”) and Restricted Stock Units (“RSUs”), but excluding stock options, Stock Appreciation Rights (“SARs”) and unvested Performance Share Units (“PSUs”). Individuals who do not meet the foregoing share ownership requirements within the applicable five-year period will not be permitted to sell shares of company common stock until satisfying these requirements. Each of the Directors and NEOs currently exceed their respective ownership requirements as outlined below or are on track to meet them within the five-year period.
Non-Employee Director and NEO Share Ownership Requirements
6x | 5x | 4x | 3x | ||||||||
Chairman & CEO | Non-employee directors | Chief Financial Officer ("CFO"); President, Fire & Security; President, Refrigeration; Former President, HVAC | Chief Legal Officer ("CLO") | ||||||||
Beneficial Share Ownership of Directors and Executive Officers
The following table provides information known to the company as of February 15, 2024, 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 33; 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 | 126,279 | 144,389 | |||||||||
| David Gitlin | 1,289,711 | 1,991,290 | |||||||||
| John J. Greisch | 42,873 | 78,290 | |||||||||
| Charles M. Holley, Jr. | 28,574 | 28,603 | |||||||||
| Michael M. McNamara | 31,377 | 31,377 | |||||||||
| Susan N. Story | 10,897 | 10,897 | |||||||||
| Michael A. Todman | 25,183 | 25,183 | |||||||||
Max Viessmann4 | 1,647 | 58,610,606 | |||||||||
| Virginia M. Wilson | 24,973 | 24,973 | |||||||||
| Beth A. Wozniak | 12,980 | 12,980 | |||||||||
| Patrick Goris | 104,443 | 178,602 | |||||||||
| Kevin O'Connor | 322,740 | 388,823 | |||||||||
| Jurgen Timperman | 148,750 | 187,608 | |||||||||
| Timothy N. White | 13,317 | ||||||||||
Directors & Executive Officers as a group (17 in total)5 | 62,598,714 | ||||||||||
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, 2024. 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 $56.05 per share, which was the closing price on February 15, 2024.
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, 2024, 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 (278,711 shares) and Timperman (38,858 shares).
4For Mr. Viessmann, total shares beneficially owned includes 58,608,959 shares of Carrier common stock received as part of the purchase price in the acquisition of the VCS Business and previously reported on Form 4 filed on January 2, 2024.
5This reflects as of February 15, 2024, the holdings of the directors and executive officers listed in the company’s 2023 Annual Report on Form 10-K.
30 | Carrier Global Corporation | ||||
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.
| NAME AND ADDRESS | SHARES | PERCENT OF CLASS | ||||||
BlackRock, Inc.1 | 60,728,408 | 7.20 | % | |||||
Capital International Investors2 | 83,664,060 | 10.00 | % | |||||
Capital Research Global Investors3 | 92,829,907 | 11.10 | % | |||||
Capital World Investors4 | 65,216,592 | 7.80 | % | |||||
The Vanguard Group5 | 93,816,461 | 11.18 | % | |||||
Viessmann Group GmbH & Co. KG6 | 58,608,959 | 6.53 | % | |||||
1A report on Schedule 13G/A, filed January 26, 2024, disclosed that BlackRock, Inc., was the beneficial owner of 60,728,408 shares of common stock as of December 31, 2023. BlackRock, Inc., reported that it held sole voting power with respect to 54,871,786 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 60,728,408 shares and shared dispositive power with respect to zero shares. The address of BlackRock, Inc., is 50 Hudson Yards, New York, NY 10001. All information regarding BlackRock, Inc., is based on that entity’s report on Schedule 13G/A, filed with the SEC on January 26, 2024.
2A report on Schedule 13G/A, filed February 9, 2024, disclosed that Capital International Investors was the beneficial owner of 83,664,060 shares of common stock as of December 29, 2023, 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 83,336,867 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 83,664,060 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 9, 2024.
3A report on Schedule 13G/A, filed February 9, 2024, disclosed that Capital Research Global Investors was the beneficial owner of 92,829,907 shares of common stock as of December 29, 2023, 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 92,803,442 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 92,829,907 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 9, 2024.
4A report on Schedule 13G/A, filed February 9, 2024, disclosed that Capital World Investors was the beneficial owner of 65,216,592 shares of common stock as of December 29, 2023, 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 64,967,403 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 65,216,592 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 9, 2024.
5A report on Schedule 13G/A, filed February 13, 2024, disclosed that The Vanguard Group was the beneficial owner of 93,816,461 shares of common stock as of December 29, 2023. The Vanguard Group reported that it held sole voting power with respect to zero shares, shared voting power with respect to 1,041,864 shares, sole dispositive power with respect to 90,285,868 shares and shared dispositive power with respect to 3,530,593 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 13, 2024.
6A report on Schedule 13D, filed January 9, 2024, disclosed that Viessmann Group, its sole general partner, Viessmann Komplementär B.V. (“Viessmann GP”), its managing limited partner, Viessmann Beteiligungs AG (“Viessmann LP”), and Max Viessmann, as a director and the controlling stockholder of each of Viessmann GP and Viessmann LP, was the beneficial owner of 58,608,959 shares of common stock as of January 2, 2024. Each of Viessmann Group, Viessmann GP, Viessmann LP and Max Viessmann reported that it held sole voting power with respect to zero shares, shared voting power with respect to 58,608,959 shares, sole dispositive power with respect to zero shares and shared dispositive power with respect to 58,608,959 shares. The address of each of Viessmann Group, Viessmann GP, Viessmann LP and Max Viessmann is Im Birkenried 1, 35088 Battenberg, Germany. All information regarding Viessmann Group, Viessmann GP, Viessmann LP and Mr. Viessmann appearing in this footnote is based on such persons’ report on Schedule 13D, filed with the SEC on January 9, 2024.
2024 Proxy Statement | 31 | ||||
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 2025 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. | ||
32 | Carrier Global Corporation | ||||
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 2023. 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 2023, including Carrier’s NEOs:
| NAMED EXECUTIVE OFFICERS (NEOs) | TITLE | ||||
David Gitlin | Chairman & Chief Executive Officer | ||||
Patrick Goris | Senior Vice President & Chief Financial Officer | ||||
Jurgen Timperman | President, Fire & Security | ||||
| Timothy White | President, Refrigeration | ||||
| Kevin O'Connor | Senior Vice President & Chief Legal Officer | ||||
Christopher Nelson1 | Former President, HVAC | ||||
1Mr. Nelson's employment ended on May 26, 2023.
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.
2024 Proxy Statement | 33 | ||||
| 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, applicable to all ELT members, to align executive and shareowner interests Align a portion of 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 stand-alone Clawback Policy applicable to Section 16 officers in accordance with the New York Stock Exchange listing requirements Have additional "clawback" provisions in both the Annual and Long-Term Incentive plans to recover cash and equity incentive payments from executives for misconduct and other 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 | ||||
2023 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. The Committee carefully considers the long-term interests of the company and our shareowners when making decisions regarding our compensation programs. For the third consecutive year, Carrier’s shareowners expressed strong support for our executive compensation program at our 2023 Annual Meeting, with a vote of 94.2% in support.
| Favorable Say-on-Pay Results | ||||||||
| 2021 | 2022 | 2023 | ||||||
| 94% | 94% | 94% | ||||||
Section I: 2023 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.
2023 was a significant year for Carrier as we continued to deliver strong financial results while beginning a compelling portfolio transformation which further positions the company as the global leader in intelligent climate and energy solutions. We are pleased to report that the company performed well against key financial, operational and strategic performance targets in 2023, many of which are incorporated into our performance-based compensation plans.
34 | Carrier Global Corporation | ||||
Financial Highlights | |||||||||||
| GAAP | Adjusted* | ||||||||||
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 76 for information regarding non-GAAP measures and a reconciliation of each non-GAAP measure to the most comparable GAAP measure. | |||||||||||
▪Carrier delivered strong 2023 operating performance as it started executing its portfolio transformation. In April 2023, the company announced its acquisition of Viessmann Climate Solutions, which was completed on January 2, 2024. ▪The company also announced plans to exit its Fire & Security segment and commercial refrigeration business. ▪2023 net sales increased 8% year-over-year, with organic sales growth of 3% primarily due to strong price realization. Carrier gained share in all major segments and grew aftermarket by double digits for a third consecutive year. ▪2023 GAAP operating profit, operating margin and earnings per share ("EPS") comparisons to 2022 were impacted by portfolio transformation-related activities in both periods, including large gains in 2022 associated with the increase in our ownership interest in Toshiba Carrier Corporation (TCC) and the sale of Chubb. ▪Adjusting for these and other non-operational items, Carrier had another year of strong financial performance resulting in double-digit adjusted operating profit growth and adjusted operating margin expansion. | ▪Operating profit was lower compared to 2022 due to the previous year’s gains. Strong price/cost management and productivity drove the increase in adjusted operating profits in 2023. ▪Operating margin decreased 53% compared with last year primarily due to the portfolio transformation-related activities in 2023, while adjusted operating margin expanded 30 basis points despite a ~50-basis-point headwind from consolidating TCC, reflecting strong price/cost and productivity performance. ▪GAAP EPS and adjusted EPS benefited from strong operating performance along with lower net interest expense and a lower share count. GAAP EPS decreased as a result of portfolio transformation-related activities. ▪Cash from operating activities increased 50% versus the prior year driven by strong working capital performance. This also led to a free cash flow increase of 50% compared to 2022. | ||||||||||
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, 2023, 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. | |||||
2024 Proxy Statement | 35 | ||||
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 for 2023, of which 91% was at risk. In addition, in 2023, 80% (on average) of total target direct compensation for other NEOs 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 may not have value 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 2023 executive compensation program. These elements are intended to promote and reward financial performance through a variety of performance metrics and time horizons.
2023 Executive Compensation Program Principal Components
| ELEMENT | FORM OF AWARD | PROGRAM COMPONENTS | 2023 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% | |||||||||||||||||||||||