BUILDING A BETTER WORLD
2023 ANNUAL REPORT & 2024 PROXY STATEMENT
Financial Highlights
Years ended December 31 (dollars in millions, except per share)
Net Sales
$3,234
Operating Income Margin*
Reported
Adjusted
Net Income*
Reported
Adjusted
$3,761
$4,192
14.3%
14.8%
16.3%
16.8%
17.1%
17.1%
$486
$472
$545
$548
$373
$276
2021
2022
2023
2021
2022
2023
2021
2022
2023
Return on Invested Capital*
Reported
Adjusted
23.9%
22.1%
22.7%
24.0% 24.1%
17.9%
Earnings Per Common Share*
Average Operating Working Capital Ratio*
Reported
Adjusted
$8.04 $8.27
$9.37 $9.41
20.9%
16.3%
17.1%
$6.22
$4.60
2021
2022
2023
2021
2022
2023
2021
2022
2023
Cash Flow From Operations
Cash Conversion Ratio*
Annual Cash Dividend Per Common Share
$668
105%
$365
$383
81%
64%
$2.04
$2.24
$2.56
2021
2022
2023
2021
2022
2023
2021
2022
2023
*Please see Appendix A for definitions and reconciliation of adjusted results to the most comparable reported results.
Sustainability Highlights
Safety
2025 Goal: 52% Reduction
38% TRCR Reduction
(2023 vs 2018)
Recycling
2025 Goal: 80% Rate
76.5% in 2023
4
2
0
2
6
Energy Intensity
2025 Goal: 16% Reduction
10% Reduction
(2023 vs 2018)
Water Use
2025 Goal: 14% Reduction
25% Reduction
(2023 vs 2018)
GHG Emissions
2025 Goal: 10% Reduction
16% Reduction
(2023 vs 2018)
Landfill Avoidance
2025 Goal: 97% Rate
94% in 2023
AMERICA’S
GREATEST WORKPLACES
FOR
DIVERSITY
0
2 0
2
2 4
POWER OF OUR
PEOPLE, PRODUCTS
AND PROCESSES.
Steven B. Hedlund
President and Chief Executive Officer
Dear Lincoln Electric Shareholders,
I am pleased to report record 2023 performance across key metrics demonstrating the power of our people, products, and
processes to successfully serve our customers and generate superior value for all stakeholders.
2023 Financial Highlights
• Record Net Sales: +11% to $4.2 billion with 4%
organic sales growth
• Record Adjusted operating margin: +30bps to 17.1%
• Record Adjusted earnings per share: +14% to $9.41
• Record cash flow generation: +74% to $668 million
• Record Adjusted ROIC: 24.1%
• Returned $347 million to shareholders (dividends
& share repurchases)
In 2023, we remained focused on helping customers
drive higher productivity in their operations using our
technology. Our expertise in metallurgy, automation,
power electronics, and software – combined with the
industry’s leading technical engineering sales force
and automation team, continued to deliver a winning
portfolio of solutions that customers value. We achieved
solid organic growth in our equipment and automation
solutions, which reinforces the value of our digital, data-
driven solutions – whether manual, semi-automatic or
fully automated to help address customer’s evolving
technical fabrication needs.
Innovation, along with diverse end market exposure,
continuous improvement initiatives and diligent price/
cost management offset inflationary headwinds and
challenging regional conditions this past year. We
achieved record profitability, earnings, cash generation,
and return on invested capital. We pursued a balanced
capital allocation strategy and returned 60% of our free
cash flow to shareholders through our dividend program
and share repurchases, while investing in growth. We
maintain a strong balance sheet profile that supports a
balanced capital allocation strategy through the cycle.
Solid Execution of Our Higher Standard 2025 Strategy
Our record performance demonstrates our organization’s
strong execution of our Higher Standard 2025 strategic
initiatives. Our strategy focuses on accelerating sales
growth and improving our average adjusted operating
income margin by 200 basis points versus the prior
cycle. In 2023, we advanced all metrics towards their
2025 targets. We delivered record profit and earnings
performance as a result of operating leverage, combined
with benefits from enterprise-wide initiatives to streamline
core business processes, leverage shared services, improve
safety and environmental performance, and drive
continuous improvement.
As a leader at the forefront of industry transformation, our
global automation portfolio outperformed expectations
with a net sales increase of 53% to $941 million from
strong demand for our broad portfolio of solutions.
Heading into 2024, automation’s strong backlog and high
quoting activity positions the team to exceed its $1 billion
net sales 2025 target ahead of schedule. In addition,
the team’s integration of Fori Automation LLC and
operational benefits from our Lincoln Business System,
which standardizes and optimizes operations, generated
improved profit performance to a low-teens percent
adjusted EBIT margin, as they progress to a mid-teens
percent profit margin target in 2025.
LINCOLN ELECTRIC | 2023 ANNUAL REPORT
01
Higher Standard 2025 Strategy Metric
2025 Goal
2020-2023 Progress
Sales CAGR (Volume, 2% Price & Acquisitions)
High single-digit to Low double-digit percent CAGR
12% CAGR
Average Adjusted Operating Income Margin
Average 16% (+/- 150 bps)
Americas Welding Adj. EBIT margin
International Welding Adj. EBIT margin
Harris Products Group Adj. EBIT margin
17% to 19%
12% to 14%
13% to 15%
Adjusted EPS CAGR
Average Adjusted ROIC
High-teens to Low-20% CAGR
18% to 20% (top quartile)
Average operating working capital to sales ratio
15.0% in 2025
Average 15.3%
Average 17.6%
Average 10.4%
Average 14.1%
31% CAGR
Average 22.1%
17.1% in 2023
The Year Ahead
The organization has tremendous momentum heading
into 2024. Employee engagement is at record levels and
there is clear alignment around our core values and
delivering solutions that serve the needs of our customers
as we accelerate sales, profitability, and earnings growth.
As I embark on my first year as CEO, I am focused on five
priorities: Safety, Growth, Productivity, Teamwork, and
Talent. These are all critical drivers of achieving our Higher
Standard 2025 Strategy targets and will build upon our
success to date.
Innovation will continue to be a core focus – to ensure
we have the right products and solutions for customers’
needs and to support long-term growth initiatives,
including the early-commercialization of our Velion™
DC fast charger for electric vehicles and the rising
interest in our large-scale, 3D metal printing/additive
technology from defense and energy sector customers.
We are operating from a position of strength, and I am
grateful to Chris Mapes for his tremendous leadership and
mentorship. I would also like to thank the entire Lincoln
Electric organization who continues to deliver exceptional
work and has positioned the Company to win in the years
to come.
On behalf of the entire organization and our Board of
Directors, thank you for your support and helping us
achieve our purpose to Build a Better World.
Steven B. Hedlund
President and Chief Executive Officer
A Special Thank You
2023 marked my last year as CEO and I am honored to
have led Lincoln Electric for the past eleven years. I am
proud of how the company has led such positive change
in our industry to help our customers and communities
build a better world. My goal in the transition of the CEO
role has been to ensure that Lincoln Electric continues
to excel in the years ahead. I could not be more confident
in the strength of leadership, our strategy, and the team’s
ability to capture the many growth opportunities ahead.
Steve Hedlund is the right leader to build upon our
successes and accelerate our wins.
02
LINCOLN ELECTRIC | 2023 ANNUAL REPORT
I would like to extend my thanks to our shareholders for
your tremendous support during my tenure as CEO. I have
valued engaging with the investment community and
sharing the team’s accomplishments as we have worked
to transform the business into an unparalleled industry
leader for the future.
Christoper L. Mapes
Executive Chair
2024 PROXY STATEMENT
LINCOLN ELECTRIC HOLDINGS, INC.
| 22801 ST. CLAIR AVENUE | CLEVELAND, OHIO 44117
LINCOLN ELECTRIC
Notice of Annual Meeting of Shareholders
Items to be Voted on
Meeting Details
1 To elect 12 Director Nominees named in this Proxy Statement to
hold office until the 2025 Annual Meeting or until their successors
are duly elected and qualified
2 To ratify the appointment of Ernst & Young LLP as Lincoln Electric’s
independent registered public accounting firm for the year ending
December 31, 2024
3 To approve, on an advisory basis, the compensation of our named
executive officers (NEOs)
By Order of the Board of Directors,
Shareholders of record at the closing of business on February 29,
2024, the record date, are entitled to vote at the Annual Meeting.
Your vote is very important! Please vote your shares promptly.
We appreciate your continued confidence in Lincoln Electric!
DATE & TIME
Friday, April 19, 2024
11:00 AM ET
PLACE
Online at www.virtualshareholder
meeting.com/LECO2024
ACCESS & PARTICIPATION
Online at www.virtual
shareholdermeeting.com/
LECO2024. You must have your
16-digit control number which is
printed on your proxy card.
Submit pre-meeting questions
online by visiting
www.proxyvote.com before
Monday, April 15, 2024 at 5:00 pm
ET.
Important
We will begin mailing this proxy statement
on or about March 18, 2024.
Christopher L. Mapes
Jennifer I. Ansberry
Executive Chair
Executive Vice President,
General Counsel and Secretary
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held
on April 19, 2024:
This Proxy Statement and the related form of proxy, along with our 2023 Annual Report on Form 10-K, are available
free of charge at www.lincolnelectric.com/proxymaterials.
Table of Contents
NOTICE OF ANNUAL MEETING
PROXY SUMMARY
Business Overview
PROPOSAL 1—ELECTION OF DIRECTORS
Nasdaq Board Diversity Matrix
Director Nominees
CORPORATE GOVERNANCE
Our Board Committees
Oversight of Our Company
Compensation-Related Risk
Related-Party Transactions
Director Compensation
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation Committee Report
Executive Compensation Tables
Termination And Change In Control Arrangements
CEO Pay Ratio
Pay Versus Performance
MANAGEMENT OWNERSHIP OF SHARES
Beneficial Ownership Table
Equity Compensation Plan Information
OTHER OWNERSHIP OF SHARES
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
ANNUAL MEETING PROPOSALS
Proposal 1—Election Of Directors
Proposal 2—Ratification Of Independent Registered Public Accounting Firm
Proposal 3—Approval, On An Advisory Basis, Of Named Executive Officer Compensation
AUDIT COMMITTEE REPORT
FAQS
APPENDIX A—DEFINITIONS AND NON-GAAP FINANCIAL MEASURES
4
5
20
23
24
32
35
40
44
45
45
50
51
80
81
89
94
95
99
99
101
102
103
104
104
105
107
111
112
A-1
Proxy Summary
This section provides an overview of important items related to this Proxy Statement and the 2024 Annual Meeting. We
encourage you to read the entire Proxy Statement for more information before voting.
Meeting Details
DATE
Friday, April 19, 2024
TIME
11:00 AM Eastern Time
PLACE
RECORD DATE
Online at www.virtualshareholder
meeting.com/LECO2024
Shareholders of record at the close of business on
February 29, 2024 are entitled to vote at the 2024
Annual Meeting.
How to Cast Your Vote
BY PHONE
Call 1-800-690-6903 by
April 18, 2024
BY TABLET OR SMARTPHONE
Scan this QR code to vote
with your mobile device by
April 18, 2024
BY MAIL
BY INTERNET
Sign, date and return your proxy
card or voting instruction form
by April 18, 2024
Using your computer visit proxyvote.com
until April 18, 2024 or vote online on
April 19, 2024 during the Annual Meeting at:
www.virtualshareholdermeeting.com/LECO2024
Voting Recommendation
Proposals
Board Recommendation
Page
1
2
3
To elect 12 Director Nominees named in this Proxy Statement to hold office until the 2025
Annual Meeting or until their successors are duly elected and qualified
FOR each Director
20
To ratify the appointment of Ernst & Young LLP as Lincoln Electric’s independent registered
public accounting firm for the year ending December 31, 2024
FOR
To approve, on an advisory basis, the compensation of our named executive officers (NEOs) FOR
105
107
4
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROXY SUMMARY
FAST FACTS
Founded
1895
Employees
Worldwide
12,000
Country
Footprint/
Distribution
21/160+
Manufacturing &
Automation System
Integration
Facilities
71
Corporate
Headquarters
CLEVELAND, OH
Broadest
SOLUTIONS
PORTFOLIO
GLOBALLY
New Product
1
Vitality Index
42%
2023 Revenue
$4.2B
40
World Wide
Largest
COMMERCIAL &
TECHNICAL TEAM
1 Vitality index represents the percentage of 2023 sales from new products
launched in the last five years. Excludes customized automation sales.
Business Overview
Our Purpose:
OPERATING BY A HIGHER STANDARD TO BUILD A BETTER WORLD
Lincoln Electric is the world leader in the design,
development and manufacture of arc welding solutions,
automated joining, assembly and cutting systems, plasma
and oxyfuel cutting equipment, and has a leading global
position in brazing and soldering alloys.
We are recognized as The Welding Experts® for our
leading materials science, software development,
automation engineering, and application expertise, which
advance customers’ fabrication capabilities to help them
build a better world. We leverage these strengths, our
global presence and a broad distribution network to serve
an array of customers across various end markets
including general metal fabrication, energy, structural
steel construction and infrastructure (commercial
buildings and bridges), heavy industries (agricultural,
mining, construction, rail equipment, and shipbuilding),
as well as automotive/transportation.
Headquartered in Cleveland, Ohio, U.S.A., we operate
71 manufacturing and automation system integration
facilities, as well as operations and joint ventures across
21 countries. Our solutions are distributed to customers in
over 160 countries. In 2023, we generated a record
$4.2 billion in sales.
Our Global Footprint
LOCATIONS
Global Headquarters
Cleveland, Ohio USA
Manufacturing
Tech Center
Sales
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
5
PROXY SUMMARY
Business Overview (Continued)
Our Guiding Principle: The Golden Rule
TREAT OTHERS AS YOU WOULD LIKE TO BE TREATED
For nearly 130 years, we have achieved success through innovation and business practices that seek to align and
generate superior value for all our stakeholders. Our long-term strategic initiatives and investments drive alignment
by providing:
• Customers with market-leading solutions that are
manufactured responsibly, operate safely and
efficiently, and are supported by our superior technical
application capabilities;
• Employees with an incentive and results-driven culture
where engagement and professional growth and
development is a priority;
Our Higher Standard 2025 Strategy
• Suppliers with a shared commitment to responsible
operations that are safe, compliant and efficient;
• Communities with a responsible and engaged partner
who is focused on helping neighbors thrive; and
• Shareholders with above-market returns.
We are executing on our long-term strategy, the “Higher Standard 2025 Strategy” (“2025
Strategy”), which focuses on accelerating sales growth, profitability and earnings performance
from 2020 to 2025 by putting customers’ needs first, enhancing employee development and
engagement, further differentiating ourselves with innovative solutions, and advancing
operational excellence. Our 2025 Sustainability strategy is integrated into each of these four key
strategic areas of the business, which are highlighted below:
CUSTOMER FOCUSED:
Enhance our value proposition
and the ease of doing business
with us by leveraging our CRM
system and investments in
industry-segment market-facing
teams, product portfolios and
application resource centers.
EMPLOYEE DEVELOPMENT:
Improve opportunities for our
employees to learn and grow
through new development
programs, resource groups,
engagement initiatives,
and enhanced HR systems
and tools.
SOLUTIONS & VALUE:
Develop solutions that improve
customers’ ability to make their
products better, safer and easier.
Key initiatives include
accelerating growth in
automated solutions and
additive services, enhanced
software (IoT and AI), and
designing greater efficiency and
sustainability into new products.
OPERATIONAL EXCELLENCE:
Improve our quality, costs and
processes by maximizing
continuous improvement
through our Lincoln Business
System, further digitization of
our operations and processes,
and achievement of our
sustainability goals.
6
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROXY SUMMARY
Business Overview (Continued)
All of the 2025 Strategy’s key financial targets are integrated into the Company’s key short-term and long-term
compensation metrics and are incorporated into the Chief Executive Officer (CEO) and executive leadership’s individual
annual compensation goals and further cascaded through the organization.
Key Financial Metrics
2025 Goal
(2020 Baseline)
Short-Term Compensation
Metrics
Long-Term Compensation
Metrics
Sales CAGR
(Volume, 2% price & acquisitions)
High single-digit to
Low double-digit percent
Average Adjusted Operating
Income Margin
Adjusted Earnings per share
CAGR
Average Operating Working
Capital Ratio
Average Adjusted Return on
Invested Capital
16%
(+/- 150 bps)
High-teens to
Low 20%
15%
in 2025
18% to 20%
(Top quartile
performance vs. proxy peers)
1
1
(Representative of EBITB)
1
(Three-Year Cumulative Growth
of Adjusted Net Income for
Compensation Purposes)
1
1
1
Performance measures used in the design of the executive compensation program are defined in Appendix A
Our 2025 sustainability goals and initiatives are aligned across each peak of our 2025 Strategy and are incorporated in
annual individual performance goals. Our sustainability initiatives focus on reducing our operational footprint through
reduced emissions, lower energy intensity, greater conservation of natural resources, strong governance, increased
diversity, equity and inclusion, enhanced employee development and engagement programming, and maintaining
strong community partnerships.
Additionally, we are focused on advancing sustainability in our customers’ operations and designing solutions to
support decarbonization across the end markets we serve. Our product stewardship initiatives focus on improving the
design, manufacture, packaging, and transportation of our products to improve customer safety, increase recyclability,
and reduce our products’ overall carbon footprint. Our application expertise and proprietary solutions are also at the
forefront of supporting the expansion of clean technology by enabling the fabrication of renewable energy
infrastructure and power generation, as well as the electrification of the transportation sector.
2025 Strategy Sustainability Goals
Goals reflect targeted 2025 performance versus our 2018 baseline:
SAFETY
GREENHOUSE GAS
(GHG) EMISSIONS
ENERGY
INTENSITY
RECYCLING
LANDFILL
AVOIDANCE
WATER USE
52%
REDUCTION
(-10% YoY)
Total Recordable
Case Rates
10%
REDUCTION
(-1.5% YoY)
Scope 1 and 2
GHG Emissions
16%
REDUCTION
(-2.5% YoY)
80%
RATE
(All Waste)
97%
RATE
14%
REDUCTION
(-2.1% YoY)
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
7
PROXY SUMMARY
2023 Performance Highlights
In 2023, we achieved record performance across key financial metrics including sales, adjusted operating income
margin, adjusted earnings per share, cash flow from operations, and our adjusted return on invested capital. By
focusing on employee safety and training, following our ‘‘customer-first’’ approach, operational excellence, and diligent
cost management, we executed well and made strong progress towards our 2025 Strategy goals while delivering
superior shareholder value.
Our industry-leading automation portfolio grew 53% in 2023 to $941 million in revenue and we are pacing to exceed
our 2025 $1 billion revenue target on an accelerated timeline. The portfolio will continue to increase its profitability to
achieve corporate average margin performance as we complete the integration of our 2022 acquisition of Fori
Automation, LLC, and realize operational efficiencies from our Lincoln Business System.
We continued to invest in innovation for long-term growth and maintained a 57% vitality index among our standard
equipment products and launched over 50 new product families in 2023. This included the development and launch of
our new Velion™ DC fast charger for electric vehicles. Velion expands our portfolio of proprietary solutions that
supports increased investments in clean tech products supporting the electrification of transportation and renewable
energy infrastructure.
We made notable progress towards our 2025 Strategy sustainability targets. We achieved record safety, recycling, energy
intensity, and water conservation performance in 2023, and continue to outperform our 2025 GHG emission reduction target.
Our progress reflects our commitment to employee and community health and wellness and operational excellence across our
manufacturing and automation assembly facilities worldwide.
These achievements were driven by the commitment, passion, and engagement of our 12,000 employees and their focus
on achieving our strategic goals. Our 2023 global employee engagement survey reported record level engagement across
our global organization and identified new initiatives that will help us reinforce our goal of being the employer of choice
in our industry worldwide.
Our success demonstrates the effectiveness of our 2025 Strategy and a strong and aligned culture, which has resulted in
an improved long-term competitive position and superior shareholder returns through the cycle.
8
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROXY SUMMARY
2023 Financial Highlights
We achieved record performance in 2023 despite uneven end market demand trends, reflecting slow industrial activity in
select international regions and a challenged U.S. residential sector. Strong momentum in capital spending and
contributions from acquisitions resulted in an 11% increase in sales to a record $4.2 billion. We achieved strong operating
income performance with an 80 basis point increase in our operating income margin to a record 17.1% versus the prior
year. Operating leverage from 2% volume growth, effective cost management and benefits from our Lincoln Business
System’s operational initiatives generated our record profitability. We achieved a 74% increase in Cash flows from
operations to a record $668 million and a 105% cash conversion ratio, reflecting increased profitability and working capital
efficiencies as we began to normalize inventory levels. We also reported record Adjusted return on invested capital (ROIC)
of 24.1%, demonstrating the effectiveness of our 2025 Strategy and our disciplined capital allocation approach.
NET SALES
OPERATING INCOME MARGIN
(Reported & Adjusted)
DILUTED EPS
Reported
Organic Sales
$4.2B +11% +4%
(Record)
vs. 2022
vs. 2022
17.1%
Reported +80 bps
vs. 2022
(Record)
Adjusted +30 bps
vs. 2022
(Record)
Reported
Adjusted
$9.37
+17% vs. 2022
(Record)
$9.41
+14% vs. 2022
(Record)
CASH FLOW FROM
OPERATIONS
$668M
+74% vs. 2022
(Record)
AVERAGE OPERATING WORKING
CAPITAL TO NET SALES RATIO
17.1%
380 bps improvement
RETURN ON INVESTED CAPITAL
Reported
24.0%
(Record)
Adjusted
24.1%
(Record)
28th
CONSECUTIVE DIVIDEND INCREASE
+11%
NEW PRODUCT VITALITY INDEX
42%
See Appendix A for definitions and/or reconciliation of these metrics to results reported in accordance with GAAP. Performance measures used in the design of the executive
compensation program are presented within the Compensation Discussion and Analysis section.
Our 2023 performance advances our progress towards our 2025 Strategy financial targets, with several metrics pacing at
or above their 2025 target:
Key Financial Metrics
2025 Goal
(vs. 2020 Baseline)
2020 to 2023 Progress
Sales CAGR
(Volume, 2% price & acquisitions)
Average Adjusted Operating Income Margin
Adjusted Earnings per share CAGR
High single-digit to Low double-digit
percent
16% (+/- 150 bps)
High-teens to Low 20%
12%
15.3%
31%
Average Operating Working Capital Ratio
15% in 2025
17.1% at 12/31/2023
Average Adjusted Return on Invested Capital
18% to 20% (Top quartile performance
vs. proxy peers)
22.1%
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
9
PROXY SUMMARY
2023 Shareholder Returns
We generated record cash flows in 2023 and returned $347 million to shareholders through our dividend program and
share repurchases, while continuing to invest in internal growth initiatives and an acquisition. In addition, the Board
approved the Company’s 28th consecutive dividend increase, raising the dividend rate by 11%.
$347M
Returned to
Shareholders
in 2023
$148M
In Dividends
$199M
In Share
Repurchases
TOTAL SHAREHOLDER
RETURN
+53%
+96%
+202%
1-Year
3-Year
5-Year
10
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROXY SUMMARY
Sustainability Highlights
2023 Safety and Environmental Highlights
Safety, operational excellence and sustainability are a priority at Lincoln Electric and we strive to improve our
performance annually to achieve our 2025 goals across these key safety and environmental metrics: our total recordable
case rate safety metric, carbon emissions, energy intensity, recycling, and water use. Our performance to goal
demonstrates continued structural improvements achieved in the business through our 2025 Strategy and our
commitment to best-in-class performance.
Safety (TRCR)
Greenhouse Gas Emissions (Absolute)
Energy Intensity (Gigajoules used/Hours worked)
Recycling (All Waste)
Water Use (Absolute)
2025 Goal
(vs. 2018 Baseline)
52% Reduction
10% Reduction
16% Reduction
80% Rate
14% Reduction
2023 Performance
(vs. 2018 Baseline)
38% Reduction
16% Reduction
10% Reduction
+310 bps to 76.5% Rate
25% Reduction
In 2023, Lincoln Electric was not only named among The Wall Street Journal’s Management Top 250 ranking,
but was also recognized by other awards for our leading ethical, environmental, social and governance
practices, which align with our 2025 Strategy.
4
2
0
2
6
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
11
PROXY SUMMARY
2023 Global Workforce Highlights
In executing our 2025 Strategy, we place a priority on social matters through:
• Global Workforce and Diversity and Inclusion Programs
• Employee Development & Training
• Community Engagement
Diversity Highlights
BOARD OF DIRECTORS
LEADERSHIP TEAM
NEOs
GLOBAL WORKFORCE
US WORKFORCE
42%
Ethnic or
Gender Diverse
33%
Ethnic or
Gender Diverse
60%
Ethnic or
Gender Diverse
20%
Women
25%
Racially or
Ethnically
Diverse
Employee Development & Training
One of the four peaks of our 2025 Strategy is focused directly on our employees’ engagement and professional
development because a highly-engaged workforce drives innovation, productivity and improved bottom-line results.
One key area of engagement is our investment in training and development to ensure a strong succession pipeline and
ample development opportunities to advance skills, knowledge and expertise to prepare our employees for future career
opportunities.
Community Engagement
In 2023, we maintained our employee assistance program, supported our internal employee resource group initiatives
and community engagement through our Lincoln Electric Foundation grants, our U.S. employee matching program for
donations and volunteerism, in-kind gifts, sponsorship of key events, and the hosting of community and academic
events at our facilities.
12
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROXY SUMMARY
Corporate Governance Highlights
Lincoln Electric has a solid track record of integrity and corporate governance practices that promote thoughtful
management by its officers and Board of Directors, facilitating profitable growth while strategically balancing risk to
maximize shareholder value. The tables below summarize select Board and governance information and highlight certain
information about the 12 Director Nominees that shareholders are being asked to elect at the 2024 Annual Meeting.
BOARD COMPOSITION AND PRACTICES
Size of Board
Number of independent Directors
Average age of Director Nominees
Ethnically diverse Director Nominees
Number of Female Director Nominees
Board meetings held in 2023
New Directors in the last 5 years
Average tenure (years) of Director Nominees
Annual election of Directors
Majority voting policy for Directors
Lead Independent Director
12
10
60
3
3*
5
5
8
Independent Directors meet without management
Director attendance at Board and committee
meetings
>75%
Mandatory retirement age (75)
Stock ownership guidelines for Directors
Annual Board and committee self-assessments
Code of Conduct for Directors, officers &
employees
Succession planning and implementation
process
Strategy, ESG and risk management oversight
Corporate culture, D&I oversight
Number of fully independent Board committees
4
*
The percentage of female Directors has been over 30% in recent years but will dip slightly below this year due to a director retirement and changes to the Board made to
ensure the needs of the Company are met during an important period of leadership transition.
SHAREHOLDER PROTECTIONS
One share, One vote standard
COMPENSATION PRACTICES
Pay for Performance
Dual-class common stock or Poison pill
Annual Say-on-Pay Advisory Vote
Cumulative voting
Vote standard for Code of Regulations
amendment
Shareholder right to call a special meeting
67%
**
Annual election of Directors
Majority voting policy for Directors
Lead Independent Director
Executive sessions without management
present
**
Special meetings can be called by shareholders holding at least 25% of the
voting power
Compensation aligned with strategic goals and
individual performance
Incentive plans do not encourage excessive risk
taking
No excessive perquisites
Robust stock ownership guidelines for NEOs
Clawback policy
Double-trigger change-in-control policy
Anti-hedging/pledging policy
CEO Pay Ratio
200:1
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
13
PROXY SUMMARY
Corporate Governance Highlights (Continued)
ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG) POLICIES AND ENVIRONMENTAL GOALS
Board oversight of ESG
Compensation and Executive Development Committee oversight of human capital policies and
practices, including corporate culture, and D&I
Audit Committee oversight of environmental, health & safety matters
Audit Committee oversight of information security and cybersecurity matters
ESG performance incorporated into CEO’s annual performance goals and compensation metrics
(and other executives)
Global Code of Conduct
Human Rights Policy
No-Harassment Policy
Anti-Corruption Policy
Supplier and Channel Partner Codes of Conduct
Environmental, Health, Safety & Quality Policy
Environment management system
Long-term safety and environmental goals
Aligned with select UN Sustainable Development Goals (SDGs)
Sustainability Accounting Standards Board (SASB) Index
CDP Submission
Sustainability Report
14
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROXY SUMMARY
Director Nominees and Board Summary
PROPOSAL 1 | ELECTION OF 12 DIRECTORS TO SERVE UNTIL 2025 ANNUAL MEETING OR UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIED
THE BOARD RECOMMENDS A VOTE “FOR” ALL DIRECTOR NOMINEES. OUR NOMINATING AND CORPORATE GOVERNANCE
COMMITTEE AND OUR BOARD OF DIRECTORS HAVE DETERMINED THAT EACH OF THE DIRECTOR NOMINEES POSSESSES THE RIGHT
SKILLS, QUALIFICATIONS AND EXPERIENCE TO EFFECTIVELY OVERSEE LINCOLN ELECTRIC’S LONG-TERM BUSINESS STRATEGY
See ‘‘Proposal 1 – Election of Directors’’ beginning on page 20 of this Proxy Statement.
You are being asked to vote on the election of twelve Director Nominees. Selected biographical information of each
Director Nominee, as well as committee membership and committee chair information is listed below. Additional
information can be found in the Director biographies under Proposal 1.
Name
Brian D. Chambers
Chair, President and CEO,
Owens Corning
Curtis E. Espeland
(Lead Independent Director)
Retired Executive Vice President and
CFO, Eastman Chemical Company
Bonnie J. Fetch
President – Distribution
Business,
Cummins Inc.
Patrick P. Goris
Senior Vice President and CFO,
Carrier Global Corporation
Steven B. Hedlund
President and CEO,
Lincoln Electric Holdings, Inc.
Michael F. Hilton
Retired President and CEO,
Nordson Corporation
Marc A. Howze
Former Senior Advisor, Office of
the Chairman, Deere & Company
Kathryn Jo Lincoln
Chair and CIO,
Lincoln Institute of Land Policy
Christopher L. Mapes
(Chair)
Executive Chair,
Lincoln Electric Holdings, Inc.
Phillip J. Mason
Retired President,
EMEA Sector of Ecolab, Inc.
Ben P. Patel
Chief Innovation and Science Officer,
WestRock Company
Kellye L. Walker
Executive Vice President and
Chief Legal Counsel,
Eastman Chemical Company
Age
Director
Since
Independent
Audit
Compensation
& Executive
Development
Nominating
& Corporate
Governance
Finance
Other Public
Company
Boards
57
2022
59
2012
53
2023
52
2018
57
2024
69
2015
60
2023
69
1995
62
2010
73
2013
56
2018
57
2020
•
•
•
•
•
•
•
•
•
•
•
1
1
−
−
−
3
1
−
3
−
−
−
•
•
•
•
•
•
•
•
•
•
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
15
PROXY SUMMARY
Name
RETIRING DIRECTOR
Hellene S. Runtagh
Retired President and CEO,
Berwind Group
Age
Director
Since
Independent
Audit
Compensation
& Executive
Development
Nominating
& Corporate
Governance
Finance
Other Public
Company
Boards
75
2001
•
•
−
• Committee Member
• Committee Chair
Composition of Director Nominees
GENDER DIVERSITY
ETHNIC DIVERSITY
INDEPENDENCE
3
3
TENURE OF INDEPENDENT
DIRECTOR NOMINEES
AGE OF INDEPENDENT
DIRECTOR NOMINEES
2
1
1
25%
Gender Diverse
25%
Ethnically Diverse
83%
Independent
9
9
10
n Women
n Men
n Ethnically Diverse
n Not Ethnically Diverse
n Non-Independent
n Independent
8 Years
Average Tenure
5
3
60 Years
Average Age
6
2
2
n 0-5 Years
n 6-9 Years
n 10-14 Years
n 15 Years or more
n 50s
n 60s
n 70s
Ratification of Independent Registered Public Accounting Firm Summary
PROPOSAL 2 | RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL. OUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
‘‘FOR’’ THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS LINCOLN ELECTRIC’S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2024.
See ‘‘Proposal 2—Ratification of Independent Registered Public Accounting Firm’’ beginning on page 105 of this Proxy
Statement.
16
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROXY SUMMARY
Executive Compensation Program Highlights
PROPOSAL 3 | APPROVAL, ON AN ADVISORY BASIS, OF NEO COMPENSATION
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL. OUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE
“FOR” THE APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR NEOS.
See ‘‘Proposal 3—Approval, on an advisory basis, of NEO compensation’’ beginning on page 107 of this Proxy Statement
and ‘‘Compensation Discussion and Analysis’’ beginning on page 51 of this Proxy Statement.
We have a long history of driving an incentive management culture, emphasizing pay for performance to align
compensation with the achievement of enterprise, segment and individual goals.
We believe our compensation program and practices provide an appropriate balance between profitability, cash flow
and returns, on the one hand, and suitable levels of risk-taking, on the other. This balance, in turn, aligns compensation
strategies with shareholder interests, as reflected by the consistently high level of shareholders voting for the
compensation of our NEOs.
During 2023, the Company announced the planned retirement of Christopher L. Mapes as the Company’s President and
Chief Executive Officer, effective December 31, 2023, and the election of Steven B. Hedlund as President and Chief
Executive Officer effective January 1, 2024.
2023 NAMED EXECUTIVE OFFICERS
The Compensation Discussion and Analysis (CD&A) provides information regarding our executive compensation
program for the following NEOs in 2023:
Steven B.
Hedlund
President and
Chief Executive Officer
(since January 1, 2024)
Executive Vice President,
Chief Operating Officer
(through December 31,
2023)
Christopher L.
Mapes
Gabriel
Bruno
Jennifer I.
Ansberry
Michele R.
Kuhrt
Executive Chair
(since January 1, 2024)
President and Chief
Executive Officer (through
December 31, 2023)
Executive Vice President,
Chief Financial Officer
and Treasurer
Executive Vice President,
General Counsel and Secretary
Executive Vice President,
Chief Human
Resources Officer
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
17
PROXY SUMMARY
2023 EXECUTIVE COMPENSATION PRACTICES
What We Do
What We Don’t Do
We have long-term compensation programs focused on
profitability, net income growth, ROIC and total
shareholder returns
We do not allow hedging or pledging of our shares
We use targeted performance metrics to align pay with
performance
We do not reprice stock options and do not issue
discounted stock options without shareholder approval
We maintain stock ownership guidelines (5x base salary
for CEO; 3x base salary for other NEOs)
We have a shareholder-approved equity incentive plan
We have a compliant clawback policy
We have a double-trigger change in control policy
We do not provide excessive perquisites
We do not have multi-year guarantees for compensation
increases
2023 ELEMENTS OF EXECUTIVE COMPENSATION
Type
Component
Fixed Compensation
Base Pay
Incentive-Based
Compensation
Target Total Cash
Compensation
with Annual
Bonus (EMIP)
Long-Term
Incentive
Compensation
Competitive Target
• Generally targeted at the 45th percentile of market
(below market) to place stronger emphasis on
incentive compensation
• Generally targeted above the competitive market, so
that target total cash compensation (base pay and
annual bonus which incorporates financial targets
and individual performance goals) is set at
65th percentile of market
• Generally targeted at the 50th percentile of market
(at market)
18
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
We use the following key performance measures in our short-term and long-term compensation programs.
PROXY SUMMARY
Short-Term
Compensation (Annual Bonus)
Long-Term Incentive Compensation Program
(3-yr Performance Cycle)
Key Performance Metrics Tied to Executive Compensation
Metric
Adjusted Revenue1
EBITB1,2 (Adjusted earnings before interest, taxes
and bonus)
Average Operating Working Capital to Sales1
ratio
Individual performance (includes ESG-related
metrics)3
Adjusted Net Income1 growth
Return on Invested Capital (ROIC)1
1
2
3
Both consolidated and segment financial performance measures are used in the design of the executive compensation program and are defined in Appendix A. Adjusted
Revenue for Compensation Purposes, EBITB, Average Operating Working Capital to Sales for Compensation Purposes, Adjusted Net Income for Compensation Purposes,
and Return on Investment Capital for Compensation Purposes have discrete definitions relative to our executive compensation program.
EBITB is an internal measure that tracks our adjusted operating income.
Individual performance goals are set annually and a significant portion of our executive officers’ individual performance goals are tied to one or more aspects of our 2025
Strategy including human capital and other ESG related matters.
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS:
This Proxy Statement contains forward-looking statements, including statements regarding Lincoln Electric’s strategy
and current expectations as well as sustainability and other ESG-related strategies, commitments, targets and goals,
within the meaning of applicable federal securities laws and regulations. These statements reflect management’s
current expectations and involve a number of risks and uncertainties. Forward-looking statements generally can be
identified by the use of words such as ‘‘may,’’ ‘‘will,’’ ‘‘expect,’’ ‘‘intend,’’ ‘‘estimate,’’ ‘‘anticipate,’’ ‘‘believe,’’ ‘‘forecast,’’
‘‘guidance,’’ ‘‘goal,’’ ‘‘target’’ or words of similar meaning. Actual results (including the Company’s performance with
respect to any sustainability or other ESG-related targets and goals) may differ materially from such statements due to
a variety of factors that could adversely affect the Company’s operating results and ability to achieve its targets and
goals. The factors include, but are not limited to: general economic, financial and market conditions; the effectiveness
of operating initiatives; completion of planned divestitures; interest rates; disruptions, uncertainty or volatility in the
credit markets that may limit our access to capital; currency exchange rates and devaluations; adverse outcome of
pending or potential litigation; actual costs of the Company’s rationalization plans; possible acquisitions, including the
Company’s ability to successfully integrate acquisitions; market risks and price fluctuations related to the purchase of
commodities and energy; global regulatory complexity; the effects of changes in tax law; tariff rates in the countries
where the Company conducts business; the Company’s ability to achieve its sustainability and other ESG-related targets
and goals for a variety of reasons, including, among others, (i) technical and operating factors, (ii) assumptions not being
realized, (iii) the outcome of current and future scientific research efforts and technological developments, and
(iv) evolving sustainability strategies and best practices, and the possible effects of events beyond our control, such as
the impact of the Russia-Ukraine conflict, political unrest, acts of terror, natural disasters and pandemics, on the
Company or its customers, suppliers and the economy in general. For additional discussion, see ‘‘Item 1A. Risk Factors’’
in our Annual Report on Form 10-K for the year ended December 31, 2023. These forward-looking statements speak only
as of the date on which such statements were made, and we undertake no obligation to update these statements except
as required by federal securities law. Forward-looking and other statements in this Proxy Statement regarding our
sustainability and other ESG-related strategies, commitments, targets and goals are not an indication that these
statements are necessarily material to investors or required to be disclosed in our filings with the Securities and
Exchange Commission (SEC).
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
19
PROPOSAL
01
Election of Directors
DIRECTOR NOMINEES
Brian D. Chambers
Curtis E. Espeland
Bonnie J. Fetch
Patrick P. Goris
Steven B. Hedlund
Michael F. Hilton
Marc A. Howze
Kathryn Jo Lincoln
Christopher L. Mapes
Phillip J. Mason
Ben P. Patel
Kellye L. Walker
YOUR BOARD RECOMMENDS A VOTE ‘‘FOR’’ EACH DIRECTOR NOMINEE.
Our shareholders are being asked to ELECT 12 DIRECTORS to serve until the 2025 Annual Meeting or until their successors are
duly elected and qualified. All of the Director Nominees, other than Ms. Fetch, who was appointed to the Board on July
20, 2023, Mr. Howze, who was appointed to the Board on October 17, 2023, and Mr. Hedlund, who was appointed to the
Board effective January 1, 2024, have been previously elected by our shareholders. Each of the Director Nominees has
agreed to stand for re-election. The biographies of our Director Nominees can be found in this section.
If any Director Nominee is unable to stand for election, the Board may provide for a lesser number of nominees or
designate a substitute. In the latter event, shares represented by proxies solicited by the Directors may be voted for the
substitute. We have no reason to believe that any of the nominees will be unable to stand for election.
Pursuant to the retirement policy contained in our Governance Guidelines, Ms. Runtagh is not being nominated for
re-election and will retire as a Director effective as of the expiration of her term at the time of this year’s Annual
Meeting. We thank Ms. Runtagh for her many years of service to the Company.
HOW WE SELECT DIRECTOR NOMINEES
In evaluating Director candidates, including persons nominated by shareholders, the Nominating and Corporate
Governance Committee expects that any candidate must have these minimum qualifications:
• Demonstrates character, integrity and judgment
• Specialized experience and background that will add to
• High-level managerial experience or experience
dealing with complex business matters
• Ability to work effectively with others
• Sufficient time to devote to the affairs of Lincoln
Electric
20
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
the depth and breadth of the Board
•
Independence as defined by the Nasdaq listing
standards (for non-employee Directors)
• Financial literacy
PROPOSAL ONE
We are also committed to having Director candidates that can provide perspective on the industry challenges that we
face and our long-term commitment to a pay for performance culture. The Nominating and Corporate Governance
Committee’s process for identifying and evaluating nominees for Director includes annually discussing prospective
Director specifications, which serve as the baseline to evaluate candidates. When recruiting new Director candidates,
we may involve a recognized search firm, and the CEO and/or a member of the Nominating and Corporate Governance
Committee (usually, the Chair) will contact the prospective director to gauge his or her interest and availability. The
candidate will then meet with several members of the Board, including our Lead Independent Director. At the same
time, references for the prospect will be contacted. A background check is generally completed before a final
recommendation is made to the Board to elect a candidate to the Board.
During 2023, the Nominating and Corporate Governance Committee retained the search firm of Heidrick & Struggles to
help identify director prospects, perform candidate outreach, assist in reference and background checks and provide
other related services. The Board also used its own network of contacts in its search. For the director search in 2023, the
Board targeted candidates who were active senior executives of public companies with diverse leadership experience in
managing global businesses and operational excellence. Heidrick & Struggles recommended Ms. Fetch as a director
candidate, and the Board determined that Ms. Fetch would provide the Board with executive operational and supply
chain experience, among other attributes. A non-employee director recommended Mr. Howze as a director candidate,
and the Board determined that Mr. Howze would provide the Board with operational, governance and organizational
leadership experience, among other attributes. Both have extensive executive experience at large, global organizations.
As an experienced executive officer of the Company, Mr. Hedlund understands the manufacturing industry and
provides valuable insight as to our Company’s global operations, people, products, markets, and strategic direction. The
Board determined that Ms. Fetch, Mr. Howze and Mr. Hedlund possessed the desired capabilities and management
experience, and each was appointed to the Board on July 20, 2023, October 17, 2023 and January 1, 2024, respectively.
Shareholders may nominate one or more persons for election as Director of Lincoln Electric. The process for doing so is
set forth in the FAQs section of this Proxy Statement. Director candidates recommended by our shareholders will be
considered by the Nominating and Corporate Governance Committee in accordance with the criteria outlined above. For
this year, the window for such nominations closed on January 20, 2024.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
21
PROPOSAL ONE
Director Nominees’ Skills, Experience and Background
Throughout 2023, the Nominating and Corporate Governance Committee reviewed the skills, qualifications and
experience of each Director Nominee to ensure that each can effectively oversee our long-term business strategy. In
addition, during 2023 the Nominating and Corporate Governance Committee thoroughly reviewed and refined the
identified skills, experience and background desired of our Director Nominees. Through this process, the below skills are
listed in order of priority, and have been thoughtfully defined in a manner that results in identifying Directors with
more significant experience to help our stakeholders understand where the deeper experience lies. As shown below, our
Director Nominees have a mix of skills and experience that we believe are relevant to the Company’s long-term strategy
and success.
12
11
Senior Leadership
This is a foundational expectation of all directors. Includes all
directors who are current or former officers of public companies
and larger private companies who were top management of the
organization. Included directors should have comparable
management responsibilities and experience.
Manufacturing and Industry
Includes all directors who have experience or expertise in
manufacturing or dealing with LECO’s end markets.
Strategy and M&A
Includes all directors who have experience in strategic
planning or M&A.
12
7
Financial and Accounting
Includes all directors who would qualify as financial experts
for purposes of service on the Audit Committee, whether
through education and experience as a CFO, CAO, controller,
public accountant or auditor or similar functions, or experience
actively supervising such persons.
10
7
Risk Oversight and Management
Includes directors who are current or former CEOs , senior
leadership or top management, who oversaw enterprise risk
management (ERM) in such roles. Also includes directors who
are current or former public company board members with
delegated responsibilities over risk oversight (e.g., service on
audit or risk committees, or service as a board chair or lead
director).
10
Organizational Development and Culture
Includes directors who are current or former senior leaders
whose role had a particular focus on organizational
development and culture. Also includes current or former
leaders with oversight responsibility for human resource
matters. Also includes directors who are current or former
public company board members with delegated responsibilities
over human capital policies and practices.
9
Public Company and Corporate Governance
Includes directors who have experience as public company
directors, are current or former general counsels or who have
served as external governance advisors to boards and
management, including as a chair of a board, institution or
committee of a public company board.
Global Operations and Supply Chain
Includes directors with operational experience across
different jurisdictions or operational experience with global
supply chains.
6
Technology and Innovation
Includes directors who have leadership experience (current
or within the past 5 years) at companies where technological
innovation is a key component of the business strategy and
where such director directly participated in or oversaw R&D
strategies, as well as directors with specific technical expertise.
10
Sustainability
Includes directors with experience overseeing
sustainability matters on a company board or who have
experience overseeing sustainability matters at companies
where such matters are integrated into the business
strategy.
22
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROPOSAL ONE
Board Diversity
The Nominating and Corporate Governance Committee believes that having a diverse Board enhances overall corporate
governance. The Nominating and Corporate Governance Committee considers diversity to include differences in race,
gender, national origin, as well as professional background and capabilities, knowledge of specific industries, and
geographic experience. To complement Board diversity, the Nominating and Corporate Governance Committee instructs
any search firm engaged for each director candidate search to include individuals that represent diverse characteristics,
whether by race, gender or other diverse qualities.
Nasdaq Board Diversity Matrix
In accordance with Nasdaq’s Board Diversity Rules, the following Board Diversity Matrix highlights the composition of
our Board members as of February 15, 2024, which is based on voluntary self-identification. Each of the categories listed
in the table has the meaning provided in Nasdaq Rule 5605(f).
Board Diversity Matrix (As of February 15, 2024)*
Total Number of Directors
13
Part I: Gender Identity
Directors
Part II: Demographic Background
African American or Black
Alaskan Native or Native American
Asian
Hispanic or Latinx
Native Hawaiian or Pacific Islander
White
Two or More Races or Ethnicities
LGBTQ+
Did Not Disclose Demographic Background
*
Includes information disclosed by all current Directors
Female
Male
Non-Binary
Did Not
Disclose Gender
4
1
0
0
0
0
3
0
9
1
0
1
0
0
7
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
YOUR BOARD RECOMMENDS A VOTE ‘‘FOR’’ EACH DIRECTOR NOMINEE
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
23
PROPOSAL ONE
Director Nominees
Brian D.
Chambers
Director since 2022
COMMITTEES:
Audit
Finance
AGE: 57
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
Owens Corning (NYSE: OC)
since 2019
Curtis E. Espeland
Director since 2012
Lead Independent Director
since 2018
COMMITTEES:
Audit
Finance
AGE: 59
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
Huntsman Corporation
(NYSE: HUN) since 2022
CAREER HIGHLIGHTS
Mr. Chambers has served as the Chair, President and Chief Executive Officer of Owens
Corning, a global building and construction materials company, since 2020, and as
President and Chief Executive Officer since 2019. During his over twenty-year tenure with
Owens Corning, Mr. Chambers has served in various leadership positions including Chief
Operating Officer from 2018 to 2019, and President of the Roofing Division from 2014 to
2018. Mr. Chambers has also held several commercial and operational roles at
Saint-Gobain, Honeywell, and BOC Gases.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• As a current CEO and Chair of a global, publicly traded company engaged in
manufacturing operations, Mr. Chambers provides valuable insights across a range
of matters, including risk oversight and management, business strategy
development, and brings a global perspective, strategic and innovative mindset, and
a focus on sustainability matters.
• The Board has determined that Mr. Chambers’ extensive accounting and financial
experience qualifies him as an ‘‘audit committee financial expert.’’
• Valuable knowledge of key governance matters, including sustainability matters,
gained through executive leadership of various publicly traded companies and as a
director of Owens Corning and Lincoln Electric.
CAREER HIGHLIGHTS
Mr. Espeland is the former Executive Vice President and Chief Financial Officer of
Eastman Chemical Company, an advanced materials and specialty additives
manufacturer, a position he held from 2014 until his retirement in 2020. Mr. Espeland
joined Eastman Chemical Company in 1996 and, during his tenure, he also served as Vice
President, Finance and Chief Accounting Officer from 2005 to 2008, and Senior Vice
President and Chief Financial Officer from 2008 to 2014.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• With broad-based finance, accounting, and executive level experience, ultimately as
the Chief Financial Officer of a large publicly traded company, Mr. Espeland brings
robust experience related to enterprise risk management, including information
technology and cybersecurity, capital allocation, internal controls and financial
reporting, and corporate strategy and M&A.
• The Board has determined that Mr. Espeland’s extensive accounting and financial
experience qualifies him as an ‘‘audit committee financial expert.’’
• Valuable knowledge of key governance matters gained through his various
directorships, including as a director of Lincoln Electric.
24
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROPOSAL ONE
CAREER HIGHLIGHTS
Ms. Fetch serves as President – Distribution Business, for Cummins Inc., a global power
technology solution leader, a position she has held since January 2024. Ms. Fetch joined
Cummins Inc. in 2018 and during her tenure she has served as VP, Global Supply Chain
and Manufacturing from January 2022 to December 2023, VP – Global Distribution SC
Services from January 2020 to January 2022, and Executive Director, Global Distribution
Business Supply Chain from July 2018 to January 2020. Prior to joining Cummins Inc.,
Ms. Fetch held numerous leadership roles during her 20 years at Caterpillar, Inc.,
including Human Resources Director and Chief Learning Officer and several General
Manager roles.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• As a current senior executive for a publicly traded company engaged in
manufacturing operations, Ms. Fetch provides valuable insights relating to
advancing operational excellence in global supply chain and operational initiatives
in the industrials machinery sectors.
• Running multibillion-dollar businesses has provided Ms. Fetch with a depth of
experience related to strategic planning, logistics and manufacturing operations,
business development, engineering, human resources, and advanced technology like
artificial intelligence and machine learning to advance supply chain strategies.
• Valuable knowledge of key governance matters, including sustainability matters,
gained through executive leadership of various publicly traded companies.
Bonnie J. Fetch
Director since 2023
COMMITTEES:
Audit
Finance
AGE: 53
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
None
CAREER HIGHLIGHTS
Mr. Goris has served as the Senior Vice President and Chief Financial Officer of Carrier
Global Corporation, the global leader in intelligent climate and energy solutions since
November 2020. Prior to joining Carrier, he served as Senior Vice President and Chief
Financial Officer of Rockwell Automation, a global industrial automation and information
solutions provider, from February 2017 to November 2020.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• As a current Chief Financial Officer of a publicly-traded multinational organization,
Mr. Goris has extensive experience in accounting, financial planning and analysis,
investor relations, mergers and acquisitions and strategic planning, and his
experience with a global industrial automation and information solutions company
provides him with broad exposure to digital operations and ‘‘smart’’ manufacturing
solutions using data and analytics, which enhances operational intelligence,
productivity and risk management in manufacturing processes.
• The Board has determined that Mr. Goris’ extensive accounting and financial
experience qualifies him as an ‘‘audit committee financial expert.’’
• Valuable knowledge of key governance matters gained as a director of Lincoln
Electric.
Patrick P. Goris
Director since 2018
COMMITTEES:
Audit (Chair)
Nominating and Corporate
Governance
AGE: 52
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
None
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
25
PROPOSAL ONE
Steven B.
Hedlund
Director since 2024
COMMITTEES: None
AGE: 57
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
None
Michael F. Hilton
Director since 2015
COMMITTEES:
Compensation and Executive
Development (Chair)
Nominating and Corporate
Governance
AGE: 69
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
Ryder Systems, Inc.
(NYSE: R) since 2012
Regal Rexnord Corporation
(NYSE: RBC) since 2019
Jeld-Wen (NYSE: JELD) since
August 2023
Nordson Corporation
(NASDAQ: NDSN) through 2019
CAREER HIGHLIGHTS
Mr. Hedlund was named the President and Chief Executive Officer of Lincoln Electric
effective January 2024. In his over 15-year career with Lincoln Electric, Mr. Hedlund has
served in a variety of operational leadership roles, including the Chief Operating Officer
from May 2022 to December 2023, the President, Americas and International Welding
from October 2020 to May 2022, the President, International Welding from June 2017 to
October 2020, the President, Global Automation and Vice President, Strategy and Business
Development. Prior to Lincoln Electric, Mr. Hedlund held various executive leadership
roles at Fortune Brands, Inc. and served as principal with the management consulting
firm Booz Allen & Hamilton.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• Mr. Hedlund’s extensive experience as an executive-level leader of our company
brings to the Board knowledge and valuable insight as to our company’s global
operations and a thorough understanding of our people, products, markets, and
strategic direction.
• With his diverse experience within our organization, Mr. Hedlund has an extensive
understanding of our strategic, operational, and organizational initiatives to
accelerate growth, improve margins and enhance returns on investment.
• Valuable knowledge of key governance matters gained through executive leadership
at Lincoln Electric.
CAREER HIGHLIGHTS
Mr. Hilton is the former President and Chief Executive Officer of Nordson Corporation, a
company that engineers, manufactures and markets differentiated products and systems
used for precision dispensing of adhesives, coatings, sealants, biomaterials, polymers,
plastics and other materials, fluid management, test inspection, UV curing and plasma
surface treatment, a position he held from 2010 until his retirement in 2019. During his
tenure at Nordson Corporation, Mr. Hilton also served as a director. Mr. Hilton has been a
member of the board of directors of Ryder Systems since 2012 and Regal Rexnord
Corporation since 2019 and joined the board of directors of Jeld-Wen in August 2023.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• With over 30 years of global manufacturing experience, Mr. Hilton brings to the
Board an intimate understanding of management leadership, and provides valuable
insights relative to strategy development, product line management, new product
technology, talent development, distribution and other sales channels, business
processes and global markets expertise.
• The Board has determined that Mr. Hilton’s extensive accounting and financial
experience qualifies him as an ‘‘audit committee financial expert.’’
• Valuable knowledge of key governance matters gained through his various
directorships, including as a director of Lincoln Electric.
26
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROPOSAL ONE
CAREER HIGHLIGHTS
Mr. Howze is the former Senior Advisor, Office of the Chairman, at Deere & Company, a
global leader in the delivery of agricultural, turf, construction, and forestry equipment, a
position he held from 2022 until his retirement in 2023. During his more than two-decade
tenure at Deere, Mr. Howze held numerous leadership roles, including Group President,
Lifecycle Solutions and Chief Administrative Officer from 2020 to 2022 and Senior Vice
President and Chief Administrative Officer from 2016 to 2020. Mr. Howze also served as
Vice President of Global Human Resources and Employee Communication, as well as
Associate General Counsel and Corporate Secretary for the company. Prior to joining
Deere, Mr. Howze served as an officer in the U.S. Army, attaining the rank of major.
Mr. Howze has been a member of the board of directors of Nationwide Mutual Insurance
Company since 2018 and joined the board of directors of Dover Corporation in November
2023.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• As an accomplished, versatile, and highly collaborative senior executive of a global,
publicly traded company engaged in manufacturing operations, Mr. Howze provides
valuable insights across a range of matters, including corporate governance,
strategic planning, and risk management.
• Through leading a variety of globally diverse businesses and cross-functional teams,
Mr. Howze provides valuable insights on manufacturing, supply management and
logistics, and human resources.
• Valuable knowledge of key governance matters, gained through executive leadership
at Deere and through various directorships.
Marc A. Howze
Director since 2023
COMMITTEES: Compensation
and Executive Development
Finance
AGE: 60
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
Dover Corporation (NYSE: DOV)
since November 2023
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
27
PROPOSAL ONE
Kathryn Jo
Lincoln
Director since 1995
COMMITTEES:
Compensation and
Executive Development
Nominating and
Corporate Governance
AGE: 69
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
None
CAREER HIGHLIGHTS
Ms. Lincoln has served as the Board Chair and Chief Investment Officer of the Lincoln
Institute of Land Policy, an independent, global foundation focused on addressing significant
policy issues through innovative land use and taxation methods, since 1996. As Chief
Investment Officer, Ms. Lincoln manages and directs all aspects of the Institute’s endowment,
including strategic asset allocation and policy development, which have contributed to its
current $800 million asset base. In her role as Chair, she plays a crucial role in strategic
direction and planning, with ongoing involvement in the development of education programs,
demonstration projects and impact measurement. Ms. Lincoln is a member of the board of
directors of HonorHealth Network and Claremont Lincoln University, and she is also the
Co-Chair of the International Center for Land Policy Studies and Training in Taiwan and was
appointed as a director for The Hope Effect, a non-profit entity.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• With extensive leadership experience and global mindset, Ms. Lincoln brings robust
experience related to strategic planning, asset allocation matters and corporate
governance, and as a Lincoln family member and long-standing director of the
company, Ms. Lincoln has a keen sense of knowledge about Lincoln Electric, its
culture, and its founding principles.
• As the world focuses increasingly on sustainability and environmental issues,
Ms. Lincoln’s knowledge and experience in these areas bring valuable insights to the
Board, and she demonstrates a lasting commitment to board and corporate
governance excellence, being named as a Board Leadership Fellow of the National
Association of Corporate Director, and as one of 2019’s most influential corporate
directors by WomenInc.
• Valuable knowledge of key governance matters gained through her various
directorships, including as a director of Lincoln Electric.
28
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROPOSAL ONE
CAREER HIGHLIGHTS
Mr. Mapes is the current Executive Chair of Lincoln Electric, a position he has held since
January 2024. Prior to his retirement, Mr. Mapes served as the Chair, President and Chief
Executive Officer of Lincoln Electric from December 2013 to December 2023, and as
President and Chief Executive Officer from December 2012 to December 2013. From
September 2011 to December 2012, Mr. Mapes served as the Chief Operating Officer. From
2004 to August 2011, Mr. Mapes served as an Executive Vice President of A.O. Smith
Corporation, a global manufacturer with a water heading and water treatment
technologies business, which has residential, commercial, industrial and consumer
applications, and the President of its former Electrical Products unit. Mr. Mapes started
his career with General Motors and has held various roles in industrial manufacturing for
over 35 years. Mr. Mapes has served as a director of The Timken Company since 2014 and
A.O. Smith since 2023 and joined the board of directors of Nordson in January 2024.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• As the current Chair, and former President and Chief Executive Officer of Lincoln
Electric, Mr. Mapes provides valuable insights across a range of matters, including
strategic planning, risk management, corporate governance, and organizational
culture.
• Mr. Mapes has a keen understanding of the manufacturing industry, and the
challenges organizations face growing globally.
• Valuable knowledge of key governance matters, including sustainability matters, gained
as a director of Lincoln Electric, and his various other directorships.
CAREER HIGHLIGHTS
Mr. Mason is the former President of the Europe, Middle East & Africa Sector (EMEA
Sector) of Ecolab, Inc., a leading provider of food safety, public health and infection
prevention products and services, a position he held from 2010 until his retirement in
2012. Prior to leading Ecolab’s EMEA Sector, Mr. Mason had responsibility for Ecolab’s Asia
Pacific and Latin America businesses as President of Ecolab’s International Sector from
2005 to 2010 and as Senior Vice President, Strategic Planning in 2004. In addition,
Mr. Mason has public company board experience, previously serving as a director of
GCP Applied Technologies from 2016 to May 2020.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• With broad executive leadership experience in an international business unit for a
large publicly traded company, Mr. Mason brings to the board extensive insight on
international business operations, business-to-business and industrial sector
matters, strategic planning, and M&A and integration matters.
• Leading international business units has provided Mr. Mason with a depth of
experience starting, developing, and growing businesses abroad, in both mature and
emerging markets.
• Valuable knowledge of key governance matters gained through various
directorships, including as a director of Lincoln Electric.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
29
Christopher L.
Mapes
Director since 2010
Chair since 2013
COMMITTEES: None
AGE: 62
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
The Timken Company
(NYSE: TKR) since 2014
A.O. Smith
(NYSE: AOS) since 2023
Nordson Corporation
(NASDAQ): NDSN since
January 2024
Phillip J. Mason
Director since 2013
COMMITTEES:
Compensation and Executive
Development
Finance (Chair)
AGE: 73
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
GCP Applied Technologies
(NYSE: GCP) through 2020
PROPOSAL ONE
Ben P. Patel
Director since 2018
COMMITTEES:
Audit
Finance
Nominating and
Corporate Governance
AGE: 56
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
None
CAREER HIGHLIGHTS
Dr. Patel has served as the Chief Innovation and Science Officer at WestRock Company, a
global manufacturer of innovative, sustainable, fiber-based packaging solutions for the
consumer and corrugated packaging markets since April 2023. In this role, Dr. Patel leads
WestRock’s research and development efforts, and helps to drive innovation to enhance
current products and develop new sustainable packaging solutions. Prior to joining
WestRock, he served as Senior Vice President, Chief Technology Officer of Cooper Tire &
Rubber Company, a global manufacturer of specialized passenger car, light truck,
medium truck, motorcycle, and racing tires from November 2019 until July 2021, and as
Senior Vice President and Chief Technology Officer of Tenneco, Inc., a manufacturer of
automotive emission control and ride control products and systems from 2011 until 2019.
During his tenure at Tenneco, he held roles leading regional advanced technology
development and establishing a global research and development organization. Prior to
joining Tenneco, Dr. Patel held numerous positions with increasing responsibility,
including senior scientist, at the General Electric Company during his thirteen-year
tenure with the organization.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• With over 20 years of experience serving with publicly traded, global products and
technology companies, Dr. Patel brings to the board broad expertise in material
scient, automation and ‘‘smart’’ systems, as well as extensive research and
development experience and insights on sustainability matters.
• Dr. Patel has been a leader in global innovation and research initiatives, which lends
tremendous support to our focus on being an innovation leader in our industry and
our advanced manufacturing growth strategy, which helps customers identify value
and efficiencies in their welding and cutting operations.
• Valuable knowledge of key governance matters gained as a director of Lincoln
Electric.
30
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROPOSAL ONE
CAREER HIGHLIGHTS
Ms. Walker has served as the Executive Vice President and Chief Legal Officer of Eastman
Chemical Company, an advanced materials and specialty additives manufacturer since April
2020. In this role, Ms. Walker has overall leadership and responsibility for Eastman’s legal
organization. She also served as Executive Vice President and Chief Legal Officer of
Huntington Ingalls Industries, Inc., America’s largest military shipbuilder, from 2015 to 2020.
Prior to joining Huntington Ingalls, Ms. Walker served as Senior Vice President, General
Counsel and Secretary at American Water Works Company, Inc. Ms. Walker is a member of
the board of directors of T. Rowe Price Funds, a position she has held since October 2021.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• As a seasoned senior executive with over 25 years of experience with publicly traded
companies, Ms. Walker provides valuable insights on increasing organizational value
through forward thinking and strategic discipline, focusing on continuous
improvement, and has extensive experience in corporate governance, compliance,
litigation management, government affairs, strategy development, product
stewardship, regulatory affairs, and health, safety, environment, and security matters.
•
In her executive leadership, Ms. Walker has also served as Chief Administrative
Officer, leading human resources, information technology, government affairs and
corporate communications functions.
• Valuable knowledge of key governance matters gained through executive experience
and as a director of Lincoln Electric.
Kellye L. Walker
Director since 2020
COMMITTEES:
Compensation and Executive
Development
Nominating and Corporate
Governance (Chair)
AGE: 57
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
None
Retiring Director
CAREER HIGHLIGHTS
Ms. Runtagh is the former President and Chief Executive Officer of the Berwind Group, a
diversified pharmaceutical services, industrial manufacturing and real estate company, a
position she held in 2001. From 1997 to 2001, Ms. Runtagh was Executive Vice President of
Universal Studios, a media and entertainment company. Prior to joining Universal
Studios, Ms. Runtagh spent 27 years at General Electric Company, a diversified industrial
company, in a variety of leadership positions. In addition, Ms. Runtagh has extensive
board experience, previously serving as a director of Harman International Industries
from 2008 to 2017, NeuStar, Inc. from 2006 to 2017, and several other publicly traded
companies.
KEY QUALIFICATIONS, EXPERIENCE AND SKILLS
• With over 30 years of executive level experience with technology focused global
companies, Ms. Runtagh provides valuable insights on a range of matters, including
marketing and sales, finance, engineering, and manufacturing.
• Ms. Runtagh provides valuable insights on corporate governance matters, through
her diverse management experience and extensive experience as a director of
publicly traded companies.
• Valuable knowledge of key governance matters gained as a director of Lincoln
Electric and several other publicly traded companies.
Hellene S.
Runtagh
Director since 2001
COMMITTEES:
Compensation and Executive
Development
Nominating and Corporate
Governance
AGE: 75
OTHER PUBLIC COMPANY
DIRECTORSHIPS:
None
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
31
Corporate Governance
Governance Framework
We are committed to effective corporate governance and high ethical standards. We adhere to our ethical commitments
in every aspect of our business, including our commitments to each other, in the marketplace and in the global,
governmental and political arenas. These commitments are spelled out in our Code of Conduct, which applies to all of
our employees (including our CEO and our other NEOs) and Directors.
We encourage you to visit our website at www.lincolnelectric.com, where you can find detailed information about our
corporate governance programs/policies including:
• Code of Conduct
• Governance Guidelines
Corporate Governance Highlights
BOARD OF DIRECTORS
• Our Board held five meetings in 2023
• During 2023, each of our Directors attended at least
75% of the total full Board meetings and meetings of
committees on which he or she served during the time
he or she served as a Director
• Size of Board: 12 members in 2024
• Plurality vote with director resignation policy for
failures to receive a majority vote in uncontested
director elections
• Lead Independent Director
• Charters for our Board Committees
• Director Independence Standards
• Governance Guidelines approved by Board
• Board has an active role in risk oversight
• Full Board review of succession planning annually
• Full Board oversight of ESG
BOARD ALIGNMENT WITH SHAREHOLDERS
• Annual equity grants align interests of Directors and
officers with shareholders
• Annual advisory approval of named executive officer
compensation
• No poison pill
• All Directors are expected to attend the Annual Meeting
• Stock ownership guidelines for Directors and officers
BOARD COMPOSITION
COMPENSATION
• Number of independent Directors: 10 in 2024
• No employment agreements
• Diverse Board including a complementary mix of
backgrounds, experiences and expertise, as well as
balanced mix of ages, tenure of service and gender
• Several current and former CEOs
• Global experience
• Audit Committee has multiple financial experts
BOARD PROCESSES
• Executive compensation is tied to performance: 87% of
CEO target pay and 75% of all of our other NEO target
pay is performance-based (at risk)
• Anti-hedging and anti-pledging policies for Directors
and officers
• Recoupment/clawback policy
INTEGRITY AND COMPLIANCE
• Independent Directors meet without management
present, with Lead Independent Director presiding over
such meetings
• Code of Conduct for employees, officers and Directors
• Environmental, health and safety guidelines and goals,
including long-term sustainability goals
• Annual Board and Committee self-evaluations
• Annual compliance training relative to ethical behavior
• Board orientation program
• Enterprise risk management program with Board oversight
32
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
CORPORATE GOVERNANCE
OUR BOARD OF DIRECTORS
Our Board oversees management of the long-term interest of Lincoln Electric and our stakeholders. The Board’s major
responsibilities include:
• Overseeing the conduct of our business
• Reviewing and approving key financial objectives,
strategic and operating plans and other significant
actions
• Establishing an appropriate governance structure,
including appropriate Board composition and
succession planning
• Overseeing enterprise risk management and
• Evaluating CEO and senior management performance
cybersecurity
and determining executive compensation
• Overseeing the ethics and compliance program
• Planning for CEO succession and monitoring
• Overseeing ESG and D&I matters
management’s succession planning for other key
executives
DIRECTOR INDEPENDENCE
Each of our non-employee Directors meets the independence standards set forth in the Nasdaq listing standards, which
are reflected in our Director Independence Standards. To be considered independent, the Nominating and Corporate
Governance Committee must affirmatively determine that the Director has no material relationship with Lincoln
Electric. In addition to outlining the independence standards set forth in the Nasdaq listing standards, the Director
Independence Standards outline specific relationships that are deemed to be categorically immaterial for purposes of
director independence. The Director Independence Standards are available on our website at www.lincolnelectric.com.
During 2023, the independent Directors met in regularly scheduled Executive Sessions in conjunction with each of the
regular Board meetings. The Lead Independent Director presided over these sessions.
BOARD LEADERSHIP STRUCTURE
• Executive Chair of the Board: Christopher L. Mapes
• Lead Independent Director: Curtis E. Espeland
• All four Board committees are composed of independent Directors
• Independent Directors met in Executive Session at each of the regular 2023 Board meetings
The Board periodically evaluates its leadership structure to ensure independent and effective oversight of management and our
business. The Board believes that the current leadership structure – comprised of a Lead Independent Director and an Executive
Chair – best serves the needs of the Company, as it strengthens independence in Board leadership while bolstering experience
and knowledge of the Company’s strategic priorities and operations. As a part of our current Board leadership structure and to
assist with the transition of our CEO, Mr. Mapes, our former President and CEO, serves as Executive Chair of the Board. Our
Board believes that having Mr. Mapes’ serve as our Executive Chair while Mr. Hedlund transitions into the CEO position allows
us to leverage Mr. Mapes’ working knowledge of our day-to-day business to provide the Board direction and insight on the
Company’s strategic plans and priorities. The Board also believes the current Board leadership structure is consistent with good
corporate governance practices because the Executive Chair role is complemented by a Lead Independent Director, who has a
strong working relationship with our non-management, independent Directors. As Executive Chair, Mr. Mapes is responsible for
coordinating the development and execution of our corporate strategy, policies, goals and objectives. In his role, Mr. Mapes has
the following duties, responsibilities and expectations:
• works closely with our CEO and senior management to
• promotes and monitors the Board’s fulfillment of its
develop our strategic plan;
oversight and governance responsibilities;
• works with our CEO and senior management on
• encourages the Board to set and implement our goals
transactional matters;
and strategies;
• establishes procedures to govern our Board’s work;
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
33
CORPORATE GOVERNANCE
• works closely with our CEO to assists in his successful
• presides over meetings of our shareholders; and
transition into the role;
• makes available to all members of our Board
opportunities to acquire sufficient knowledge and
understanding of our business to enable them to make
informed judgments;
LEAD INDEPENDENT DIRECTOR
To complement our Executive Chair of the Board, the
Board has a strong Lead Independent Director, which we
believe appropriately addresses the need for independent
leadership and an organizational structure for our
independent Directors. Our Lead Independent Director
focuses on overseeing the Board’s processes and
prioritizing the right areas of focus. Our Lead Independent
Director is appointed each year by the independent
Directors and serves as a liaison between the Chair of the
Board and the independent Directors.
• sets the agenda (in conjunction with the Lead
Independent Director) and presides over Board
meetings.
Mr. Curtis Espeland currently serves as
our Lead Independent Director, a
position he has held since 2018.
Mr. Espeland was elected to our Board
in February 2012. During his tenure on
our Board, he has developed strong
working relationships with his fellow
Directors and assists with the
onboarding of newly elected Directors.
In addition to the duties of all Directors, the Lead Independent Director has the following duties, responsibilities, and
expectations:
• Collaborates with the Executive Chair, the President
and Chief Executive Officer, the Secretary and senior
management on the format and adequacy of the
information that Directors receive and on the
effectiveness of the Board meeting process.
• Acts independently of the Executive Chair to review
and approve Board meeting agendas and schedules.
• Acts as a sounding board to the Executive Chair on key
aspects of the business and assists in promoting sound
corporate governance practices.
• Calls meetings of the independent Directors as he sees
fit, presiding over such meetings.
• Coordinates, sets agendas and presides over executive
sessions of the independent Directors.
• Actively participates in the CEO evaluation process and
in interviewing candidates for the Board.
• Actively participates in the Board and committee
evaluation process.
• Speaks on behalf of Lincoln Electric, as the Board
determines necessary.
The Board will continue to periodically review the Board leadership structure, taking into consideration evolving market
practices, feedback from shareholders and the corporate governance community and, most importantly, what the Board
believes is in the best interests of our Company and its shareholders.
34
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
CORPORATE GOVERNANCE
Our Board Committees
We have separately designated standing Audit, Compensation and Executive Development, and Nominating and
Corporate Governance Committees established in accordance with applicable provisions of the Securities Exchange Act
of 1934 (the ‘‘Exchange Act’’) and SEC and Nasdaq rules. The Board also has designated a standing Finance Committee.
Each Committee has a charter, which details all of the Committee’s roles and responsibilities. The following summaries
set forth the principal responsibilities of each of our Committees, as well as other information regarding their makeup
and operations. A copy of each Committee’s charter may be found on our website at www.lincolnelectric.com.
Audit Committee
Patrick P. Goris
CHAIR
Brian D. Chambers
Curtis E. Espeland
Bonnie J. Fetch*
Ben P. Patel
*Appointed July 20, 2023
5 meetings held in 2023
KEY RESPONSIBILITIES
•
Independent auditor engagement
• Reviews financial statements and disclosures, interim financial reports
and earnings press releases
• Reviews significant litigation and legal matters
• Reviews enterprise risk management policies and process
• Oversees ethics and compliance programs and risk assessment and mitigation
processes for environmental, health and safety matters
• Reviews effectiveness of information technology security environment and
oversees risk assessment and mitigation process for cybersecurity
• Reviews and evaluates the scope and performance of the internal audit
function
• Reviews internal control over financial reporting
Each member of our Audit Committee meets the independence standards set
forth in the Nasdaq listing standards and has likewise been determined by the
Board to have the financial competency required by the Nasdaq listing
standards. In addition, because of the professional training and past
employment experience of Messrs. Chambers, Espeland and Goris, the Board
has determined that they are financially sophisticated Audit Committee
members under the Nasdaq listing standards and qualify as ‘‘audit committee
financial experts’’ in accordance with SEC rules. Shareholders should
understand that the designation of Messrs. Chambers, Espeland and Goris as
‘‘audit committee financial experts’’ is a disclosure requirement and that it
does not impose upon them any duties, obligations or liabilities that are
greater than those generally imposed on them as members of the Audit
Committee and the Board.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
35
5 meetings held in 2023
KEY RESPONSIBILITIES
• Reviews and recommends to the Board total compensation of our CEO, and
reviews and establishes total compensation of our other executive officers
• Evaluates performance (along with the full Board) of our CEO and other
executive officers
• Monitors development, selection process and succession planning of key
management
• Reviews and recommends to the Board, in conjunction with the
Nominating and Corporate Governance Committee, the appointment and
removal of elected officers
• Oversees executive compensation policies, practices and programs, as
further described in the CD&A
• Reviews and recommends to the Board new or amended executive
compensation plans for our executive officers
• Oversees the implementation and effectiveness of the Company’s human
capital policies and practices, including D&I programming
• Reviews initiatives and strategies related to employee recruitment,
promotion, retention and attrition, employee engagement and diversity,
equity and inclusion matters
Each member of our Compensation and Executive Development Committee
meets the independence standards set forth in the Nasdaq listing standards
and each is deemed to be a ‘‘non-employee director’’ within the meaning of
Rule 16b-3 of the Exchange Act. The Compensation and Executive
Development Committee may, in its discretion, delegate specific duties,
responsibilities and authority to a subcommittee, one or more Committee
members or one or more executive officers, to the extent permitted by
applicable law, equity plan provisions and stock exchange rules and
regulations.
CORPORATE GOVERNANCE
Compensation and Executive
Development Committee
Michael F. Hilton
CHAIR
Marc A. Howze*
Kathryn Jo Lincoln
Phillip J. Mason
Hellene S. Runtagh
Kellye L. Walker
*Appointed October 17, 2023
36
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Nominating and Corporate
Governance Committee
Kellye L. Walker
CHAIR
CORPORATE GOVERNANCE
6 meetings held in 2023
KEY RESPONSIBILITIES
• Reviews our corporate governance framework including external
developments related to corporate governance matters
• Reviews and recommends guidelines with respect to size, composition and
practices of the Board, identifies Board candidates and recommends
Director nominees
• Reviews shareholder proposals and related shareholder engagement
activities
• Reviews non-employee Director compensation program in light of best
practices and makes recommendations to the Board
• Reviews and determines Director independence
• Oversees the self-evaluation process of the Board and its Committees
• Oversees the overall corporate governance of the Company, including
compliance with stock exchange listing rules and other applicable legal or
regulatory requirements and practices pertaining to corporate governance
Patrick P. Goris
Michael F. Hilton
Each member of our Nominating and Corporate Governance Committee
meets the independence standards set forth in the Nasdaq listing standards.
Kathryn Jo Lincoln
Ben P. Patel
Hellene S. Runtagh
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
37
5 meetings held in 2023
KEY RESPONSIBILITIES
• Reviews financial performance, including comparing financial
performance to budgets and goals
• Reviews capital allocation, dividend and share repurchasing strategies
• Reviews operating budgets
• Reviews capital expenditures
• Reviews M&A activity and integration performance
• Oversees strategic planning and financial policy matters
Each member of our Finance Committee meets the independence standards
set forth in the Nasdaq listing standards. All of our Directors typically attend
the Finance Committee meetings, a practice that has been in place for the
past several years.
CORPORATE GOVERNANCE
Finance Committee
Phillip J. Mason
CHAIR
Brian D. Chambers
Curtis E. Espeland
Bonnie J. Fetch*
Marc A. Howze**
Ben P. Patel
*Appointed July 20, 2023
**Appointed October 17, 2023
38
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
CORPORATE GOVERNANCE
SHAREHOLDER ENGAGEMENT
We seek constructive discussions with shareholders and maintain an active investor relations program to nurture
long-term relationships with the investment community. During 2023, we met with over 180 investment firms and
engaged with shareholders representing over 57% of our outstanding common shares. As part of our investor outreach,
we also proactively invited shareholders representing over 50% of outstanding common shares to discuss ESG matters.
Our Investor Relations program also includes:
• Participation at investor conferences
• 1:1 and group meetings and tours hosted at our facilities
• An accessible, ‘‘open door’’ IR program throughout the year
• Nondeal roadshows
• Tradeshow tours
57% In 2023, we engaged with
shareholders representing
over 57% of LECO’s
outstanding shares.
As part of our shareholder engagement, we provide broad access to company representatives beyond our Executive
Chair, CEO, CFO, and IRO, including our Lead Independent Director, General Counsel and Secretary, members of our
executive leadership team, our Vice President of Environmental, Health, Safety & Sustainability, as well as product
development and application experts from various departments.
We discuss a variety of topics including business performance, strategic initiatives, innovation, corporate governance
practices, corporate sustainability initiatives, executive compensation, and other matters of shareholder interest.
Specific ESG topics discussed in 2023 included:
Governance Topics
Environmental & Social Topics
Clean Tech
- Alignment of our 2025 Strategy
- Human capital topics including safety
with our Sustainability goals and
executive compensation metrics
- Board composition
- CEO leadership transition
- Board risk oversight
- Expanded ESG governance
- Cybersecurity
performance, staffing levels, and
engagement
- GHG emissions
- Reporting frameworks
- Core solutions supporting energy
transition and electrification
- Opportunities to reduce our products’
carbon footprint
- Automation strategy
- Development of a DC fast charger for
electric vehicles
The discussions yielded supportive feedback on the design and execution of our 2025 Strategy, our quarterly
performance, and of our CEO transition. We also received positive feedback on these ESG-related matters:
○
○
○
○
our annual compensation incentive program
the alignment of our strategic plan with our sustainability goals, compensation and risk
management program
expanded Board oversight and governance structure to advance sustainability initiatives and
regulatory disclosures
the inclusion of a SASB index and our initiatives to complete a materiality assessment and submit to
CDP as part of our efforts to align with TCFD reporting standards.
The Board values an active investor relations program as it believes that shareholder input strengthens its role as an
informed and engaged fiduciary. Investment community feedback is shared regularly with the full Board of Directors
and Lincoln Electric’s leadership team and is considered as we progress our disclosures and strategic initiatives.
ANNUAL BOARD AND COMMITTEE EVALUATION PROCESS
The Board recognizes that a robust and constructive performance evaluation process is an essential component of Board
effectiveness. Our Governance Guidelines require annual evaluation of the performance of the Board. The Nominating and
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
39
CORPORATE GOVERNANCE
Corporate Governance Committee, with the assistance of the Lead Independent Director, oversees the annual evaluation
process. As part of this process, each Board member completes an evaluation relative to Committee and Board matters. The
Lead Independent Director often holds one-on-one calls with each Board member as well. A summary of the results of this
process is presented to the Nominating and Corporate Governance Committee. The results are then reported to the full
Board by the Lead Independent Director, which considers the results and ways in which Board processes and effectiveness
may be enhanced.
Majority Voting Policy
The Director Nominees receiving the greatest number of votes will be elected (plurality standard). However, our
majority voting policy states that any Director who fails to receive a majority of the votes cast in an uncontested
director election in his/her favor is required to submit his/her resignation to the Board. The Nominating and Corporate
Governance Committee would then consider each resignation and determine whether to accept or reject it, with full
Board approval of such decision. Abstentions and broker non-votes will have no effect on the election of a Director and
are not counted under our majority voting policy. Holders of common stock do not have cumulative voting rights with
respect to the election of a Director.
Annual Meeting Attendance; No Special Arrangements
Directors are expected to attend each annual meeting. The Director Nominees plan to attend this year’s virtual Annual
Meeting. All of our then-current Director Nominees attended our 2023 Annual Meeting.
None of the Director Nominees has any special arrangement or understanding with any other person pursuant to which
the Director Nominee was or is to be selected as a Director or Director Nominee. There are no family relationships, as
defined by SEC rules, among any of our Directors or executive officers. SEC rules define the term ‘‘family relationship’’
to mean any relationship by blood, marriage or adoption, not more remote than first cousin.
Oversight of Our Company
BOARD OVERSIGHT OF STRATEGY
One of the Board’s key responsibilities is overseeing the Company’s strategic planning process, including reviewing the
steps taken to develop strategic plans and approving the final plans. In 2023, this included receiving periodic updates
regarding the Company’s execution and performance as we continue to implement our 2025 Strategy. Our Board
regularly discusses the key priorities of our Company, taking into consideration global economic, consumer and other
significant trends. The Company’s long-term strategic plan is reviewed regularly with the Board, along with its annual
operating plan, capital structure and sustainability performance.
BOARD OVERSIGHT OF ENTERPRISE RISK MANAGEMENT
In the ordinary course of business, we face various strategic, operating, compliance and financial risks. Our enterprise
risk management process seeks to identify and address material risks to the organization, and the Board provides
oversight as to how management is addressing these risks. The Company maintains an enterprise risk management
review process where risk is assessed throughout our entire organization, and is reported to our internal corporate
enterprise risk committee, comprised of members of our business units and various functional leaders (e.g., IT, Finance,
Legal), led by our Vice President of Enterprise Risk Management. Critical risks facing the organization are identified each
year and are assigned to either the full Board or various Board Committees for further review, analysis and development
of appropriate plans for management and mitigation.
Our Board oversees the management of these risks on an enterprise-wide basis, and the Lead Independent Director
promotes our Board’s engagement in this process. A fundamental part of the process is to understand the Company’s
risks, and to provide oversight as to how management is addressing these risks. The Board, or Board designated
committee, reviews with management its process for enterprise risk management and actively engages with
40
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
CORPORATE GOVERNANCE
management to understand and oversee our most critical risks. The Audit Committee oversees the Company’s risk
assessment and management process each year, including ensuring that management has instituted processes to
identify critical risks and has developed plans to manage such risks.
BOARD OVERSIGHT OF INFORMATION SECURITY AND CYBERSECURITY
Cybersecurity has been identified as a critical risk and the Audit Committee receives updates at each regularly
scheduled meeting on both cybersecurity and information security matters. The Company maintains insurance
coverage with respect to cybersecurity and has undergone several simulation, preparedness and response exercises. The
Company has not experienced a reportable information security breach within the last three years and is tested
externally on its information security environment annually. In addition, the Company has a Chief Information Officer,
an information security training program, training all computer-based employees two times per year, through various
employee training modules relative to information security matters, and simulates phishing events with employees to
raise cybersecurity awareness on a monthly basis.
BOARD OVERSIGHT OF ESG AND SUSTAINABILITY MATTERS
Our ESG programs include a range of initiatives around corporate responsibility and sustainability, while reflecting our
Board’s recognition of the importance of achieving our goals responsibly and aligning with our key stakeholders to drive
long-term value creation. Issues that we focus on include workplace health and safety, reduction of our operational
footprint through reduced emissions, lower energy intensity, and greater conservation of natural resources, human
capital management, diversity, equity and inclusion, employee development and engagement, corporate governance,
business ethics and compliance, cybersecurity, and strong community partnerships.
THE BOARD HAS BROAD OVERSIGHT RESPONSIBILITY FOR ESG AND SUSTAINABILITY MATTERS
The Board receives a formal annual update on corporate governance matters, including ESG developments and pending
considerations.
The Board reviews sustainability initiatives and progress made towards our long-term safety and sustainability metrics.
THE BOARD’S VARIOUS COMMITTEES ASSIST WITH THE OVERSIGHT ON THESE IMPORTANT ISSUES:
NOMINATING AND CORPORATE
GOVERNANCE COMMITTEE
Oversees corporate governance matters,
monitoring new issues, regulatory
changes and trends in corporate
governance, environmental and social
responsibility matters.
AUDIT COMMITTEE
Oversees our ethics and compliance
programs and cybersecurity, and reviews
our Enterprise Risk Management policies
and processes.
COMPENSATION AND EXECUTIVE
DEVELOPMENT COMMITTEE
Oversees the implementation and
effectiveness of the Company’s human
capital policies and practices, and reviews
initiatives and strategies related to
employee recruitment, promotion,
retention and attrition, employee
engagement and diversity, equity and
inclusion.
Our Company has clear responsibilities and a robust governance structure related to ESG and sustainability matters.
The Board’s oversight responsibility for ESG matters is reflected in our Governance Guidelines. Additionally,
sustainability metrics are incorporated into the annual individual goals of our CEO and other executives. Our Executive
Vice President, General Counsel (GC), oversees corporate environmental, health, safety & sustainability (EHS&S)
initiatives and global reporting, as well as an Executive Sustainability Committee. The GC also works closely with our
Vice President of EHS&S, business unit leadership and local facilities to implement, monitor and measure our EHS&S
results. EHS&S also oversees an internal Product Sustainability Committee that was established in 2020 with a primary
focus on enhancing product stewardship with sustainable solutions and now oversees a multi-disciplinary
Sustainability Disclosure Committee, which was established in 2022.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
41
CORPORATE GOVERNANCE
Sustainability Governance
Board Oversight
EVP, General Counsel
and EHS&S Leader
Executive Sustainability Committee
Sustainability Disclosure Committee
Product Sustainability Committee
VP, EHS&S
Sustainability Manager
Audit Committee: Oversees ethics and
compliance programs, cybersecutity, and
Enterprise Risk Management (ERM)
Nominating and Corporate Governance
Committee: Oversees governace matters,
regulatory changes and trends in ESG
matters
Compensation and Executive Development
Committee: Oversees human capital
policies and practices, including D&I
The following policies and business practices exemplify our commitment to ESG matters:
• Our Code of Conduct;
• Our Human Rights Policy;
• Our Supplier Code of Conduct;
• Our Channel Partner Code of Conduct;
• Health, safety and wellness initiatives for our
employees, customers and communities;
• Equal employment opportunities, along with our pledge
to treat employees fairly, with dignity, and without
discrimination in any form;
• Focus on improving safety and environmental
performance, including long-term ESG goals and
performance reporting, and incorporating product
stewardship and innovations to advance clean tech at
Lincoln Electric and in the industries we serve;
• Training and development programs to attract and
retain high performing employees to help them reach
their full potential;
• Community engagement through employee-led
fundraisers, grants provided by The Lincoln Electric
Foundation, scholarships, in-kind gifts, and an
employee matching and ‘‘Dollars for Doers’’ program to
support volunteerism;
• Positively impacting manufacturing and industry by
promoting the art and science of welding among
students and young professionals through our business
initiatives, partnerships with schools and associations,
and programming at the J.F. Lincoln Foundation; and
• Enhancing D&I through employee resource groups
including our Diversity Councils, Veterans, Women in
Lincoln Leadership, and our Young Professionals
organizations.
42
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
CORPORATE GOVERNANCE
Global Workforce, Employee Engagement and Diversity and Inclusion
In executing our 2025 Strategy, we continue to focus on the importance of employee development, engagement and
building a culture to develop and foster the vast talents of our employees. Our CEO and Chief Human Resources Officer
lead our diversity and inclusion (D&I) initiatives, and report on the Company’s D&I programs, talent attraction and
retention, and succession planning to the Board twice annually and our Compensation and Executive Development
Committee is briefed at every committee meeting on D&I matters throughout the year. Our D&I programs focus on:
• Internal D&I education and training programs
• Employee development programs to cultivate, grow and promote talent from within
• Intentional recruiting efforts to increase our diverse talent pool
• Supporting expansion of activities within employee resource groups, including Diversity Councils
• Maintaining Advisory Boards where department representatives meet regularly with management to raise key
topics
• Partnering with diverse customers, suppliers and community organizations
Diversity Highlights
BOARD OF DIRECTORS
LEADERSHIP TEAM
NEOs
GLOBAL WORKFORCE
US WORKFORCE
42%
Ethnic or
Gender Diverse
33%
Ethnic or
Gender Diverse
60%
Ethnic or
Gender Diverse
20%
Women
25%
Racially or
Ethnically
Diverse
In 2023, we expanded initiatives to further build, acquire and foster increased diversity, engagement and connectedness
among our global organization. Highlights include:
• The launch of the 2023 Engagement Survey, our global biennial employee engagement survey. The survey was
concluded in November 2023 and yielded both record employee participation and engagement scores.
• Continual touchpoints with our various global employee populations through pulse surveys, small group listening
sessions, and local town hall meetings. These actions guide both short term actions and longer term planning
opportunities for our global leaders.
2023 Employee Engagement Highlights
SURVEY COMPLETION
ENGAGEMENT INDEX
86%
(+12% vs. 2021
survey)
80%
(+2% vs. 2021
survey)
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
43
CORPORATE GOVERNANCE
The goal of the engagement survey is to strengthen the Company’s culture and employee experience. The Engagement
Index is a measurement of how much an employee is committed to helping the Company achieve its goals. Based on
the feedback received from the survey, managers and team members will work together in 2024 to develop action plans
to identify further opportunities to take action in building an inspiring workplace. As a testament to how our global
employees view our Company, the most frequently used words to describe our culture were: Respect, Quality, Safety
and Commitment.
Employee Development & Training
One of the four peaks of our 2025 Strategy is focused directly on our employees’ engagement and professional
development because a highly-engaged workforce drives innovation, productivity and improved bottom-line results.
One key area of engagement is our investment in training and development to ensure a strong succession pipeline and
ample development opportunities to advance skills, knowledge and expertise to prepare our employees for future career
opportunities.
In addition to formal leadership, management and professional development programs, we provide a bold initiative to
repay up to $125,000 towards each of our U.S. employees’ student loan debt obligations. This program has been
enthusiastically welcomed by both our existing talent and at recruiting events on university campuses across the
country.
We also continue to provide tuition reimbursement for external accredited programs, mentoring, self-guided online
courses, instructor-led programs, and special project and rotational assignments that can lead to extensive global
exposure and talent development.
In addition to our career development programs, our annual talent and succession planning process reviews 100% of
our global professional staff. This ensures all high potential employees have an active individual development plan to
guide their career aspirations. This process also helps to ensure we have an appropriate talent pipeline for critical roles
in general management, engineering and operations. These talent reviews include our CEO and all segment and
functional leaders who use this process to identify and support high potential and diverse talent in succession planning
for the next generation of Lincoln Electric’s leaders.
Community Engagement
In 2023, we maintained our employee assistance program, supported our internal employee resource group initiatives
and community engagement through our Lincoln Electric Foundation grants, our U.S. employee matching program for
donations and volunteerism, in-kind gifts, sponsorship of key events, and the hosting of community and academic
events at our facilities. In addition, we maintained our community educational/career programming among secondary
and high school students to address the skills gap in industry and expand awareness of attractive career pathways in
manufacturing. This programming, along with our continued support of regional youth programs, welding competitions
and serving as the global welding sponsor of WorldSkills® are foundational to our efforts to promote the trades and the
science of welding.
Compensation-Related Risk
We regularly assess risks related to our compensation and benefit programs, including our executive compensation
program, and our Compensation and Executive Development Committee is actively involved in those assessments. In
addition, Willis Towers Watson (WTW), an independent executive compensation consultant, has provided a risk
assessment of our executive compensation program in the past. Although we have a long history of pay for
performance and incentive-based compensation, we believe our compensation programs contain many mitigating
factors to ensure that our employees are not encouraged to take unnecessary risks.
As a result of all these efforts, we do not believe the risks arising from our executive compensation policies and
practices are reasonably likely to have a material adverse effect on Lincoln Electric.
44
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
CORPORATE GOVERNANCE
Related-Party Transactions
The Board has adopted a policy regarding the review and approval of transactions between the Company and its
subsidiaries and certain related parties that are required to be disclosed in proxy statements, which are referred to as
‘‘related-party transactions.’’ Related parties include our Directors, Director Nominees, executive officers, persons
controlling 5% or more of our common shares, and the immediate family members of these individuals. Pursuant to the
policy, the Audit Committee is responsible for reviewing and approving related-party transactions and will consider
information it deems appropriate, including, but not limited to, whether the terms of the transaction are no less
favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances, the
approximate dollar value of the transaction, and the nature and extent of the related party’s interest in the transaction.
No Director will participate in any discussion or approval of a related-party transaction for which he or she is a related
party, other than to provide material information concerning the transaction.
We define ‘‘related-party transactions’’ generally as transactions collectively over $120,000 in any calendar year, in
which any related party had, has or will have a direct or indirect material interest. We have a monitoring and reporting
program, which includes requirements to report all actual or potential related-party transactions during the year and
information regarding all relationships with entities involving a related party.
The Company did not have any related-party transactions that required Audit Committee approval in 2023.
Director Compensation
OUR BOARD COMPENSATION PROGRAM
Based upon the recommendations of the Nominating and Corporate Governance Committee, the Board determines our
non-employee Director compensation. The Nominating and Corporate Governance Committee periodically reviews all
elements of Board compensation in relation to our proxy peer group (as identified in the CD&A), trends in Board
compensation and other factors it deems appropriate. In October 2023, the Nominating and Corporate Governance
Committee reviewed the non-employee Director compensation program, with WTW as independent advisor, and
determined the cash and equity retainers were positioned below the peer median. The objectives of our non-employee
Director compensation program are to help attract highly qualified and diverse individuals to serve on our Board and to
align their interests with those of our shareholders. As a result, the Nominating and Corporate Governance Committee
recommended changes to the non-employee Director compensation program to the Board. The Board approved the
following adjustments to our non-employee Director compensation program:
• Effective with the December 2023 award, an increase in the approximate value of the annual restricted stock unit
award (and the initial equity award for any newly-elected director) from $145,000 to $155,000 per year.
• Effective January 2024, the following retainer adjustments:
○
○
○
An increase in the annual Board retainer from $85,000 to $95,000;
An increase in the Lead Independent Director retainer from $28,000 to $35,000;
An increase in the Audit Committee Chair retainer from $20,000 to $30,000 and the remaining Committee
retainers each from $15,000 to $20,000.
An employee of Lincoln Electric who also serves as a Director does not receive any additional compensation for serving
as a Director.
All non-employee Directors receive cash retainers and an annual stock-based award for serving on our Board.
Stock-based compensation is provided under our 2023 Stock Plan for Non-Employee Directors.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
45
CORPORATE GOVERNANCE
GOOD GOVERNANCE PRACTICES
Lincoln Electric seeks to attract and retain highly qualified individuals to serve on the Board. To that end, Lincoln
Electric maintains the philosophy of paying non-employee Directors fairly and reasonably, considering external market
factors, consistent with good governance practices. With respect to our non-employee Director compensation program,
our governance practices include:
What We Do
What We Don’t Do
Reasonable limits on non-employee Directors’ annual
equity awards included in 2023 Stock Plan for
Non-Employee Directors
Total compensation is generally positioned at the peer
median
Non-employee Director compensation approved by full
Board
Full-value equity award granted at a fixed-value
Double Trigger Provisions for Change in Control
Stock Ownership Guidelines
Independent Advisor
No Hedging or Pledging of Lincoln Electric Common
Shares
No Perquisites
No Excise Tax Gross-Ups or Tax Reimbursements
46
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
The following is a summary of our current Director compensation program:
DIRECTOR COMPENSATION MIX
CORPORATE GOVERNANCE
62%
Restricted Stock Units
Committee and Chair Fees
Board Retainer Fees
34%
4%
Board Level
Lead Independent Director
Committee Chairs
Cash
Equity
Retainer1
$95,000
Additional
$35,000
Meeting Fees2
Annual Restricted
Stock Unit (RSU) Award3
Initial RSU
Award3,4
—
Approx.
$155,000
Approx.
$155,000
—
—
—
Additional
$30,000 for Audit, and $20,000
for Compensation and
Executive Development,
Finance and Nominating and
Corporate Governance
—
—
—
1
Directors have the ability to defer annual cash compensation under the Non-Employee Directors’ Deferred Compensation Plan.
2 We do not have separate meeting fees, except if there are more than eight full Board or Committee meetings in any given year, Directors will receive $1,500 for each full
Board meeting in excess of eight meetings and Committee members will receive $1,000 for each Committee meeting in excess of eight meetings in total.
3
4
Directors have the ability to defer RSUs under the Non-Employee Directors’ Deferred Compensation Plan.
The initial award will be pro-rated based on the Director’s length of service during the twelve-month period preceding the next regularly scheduled annual equity grant,
which normally occurs in the fourth quarter of each year.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
47
CORPORATE GOVERNANCE
2023 Director Compensation Table
Name
Brian D. Chambers
Curtis E. Espeland
Bonnie J. Fetch2
Patrick P. Goris
Michael F. Hilton
Marc A. Howze2
Kathryn Jo Lincoln
Phillip J. Mason
Ben P. Patel
Hellene S. Runtagh
Kellye L. Walker
Fees Earned or
Paid in Cash
($)
85,0003
113,000
37,880
105,0003
100,000
17,3233
85,0003
100,000
85,000
92,500
92,500
Stock
Awards1
($)
154,996
154,996
210,446
154,996
154,996
175,139
154,996
154,996
154,996
154,996
154,996
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)
94
0
0
3,4484
1734
0
1524
0
1524
0
0
Total
($)
240,005
267,996
248,327
263,444
255,169
192,462
240,148
254,996
240,148
247,496
247,496
1
2
3
4
On December 7, 2023, 757 RSUs were granted to each then-serving non-employee Director under our 2023 Stock Plan for Non-Employee Directors. For Ms. Fetch,
264 RSUs were also granted to her in July 2023 upon her initial appointment to the Board. For Mr. Howze, 107 RSUs were also granted to him in October 2023 upon his
initial appointment to the Board.
The Stock Awards column represents the grant date fair value under FASB Accounting Standards Codification (ASC) Topic No. 718 based on a closing price of $204.75 per
share on December 7, 2023, and, with respect to the award granted to Ms. Fetch, a closing price of $210.04 per share on July 20, 2023, and for Mr. Howze, a closing price of
$188.25 per share on October 17, 2023. Assumptions used in the calculation of these amounts are included in footnote 10 to our audited financial statements for the fiscal
year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on February 27, 2024.
As of December 31, 2023, the number of RSUs held by each non-employee Director was 757, except for Ms. Fetch, who held 1,021 RSUs and Mr. Howze who held 864 RSUs.
Each of Messrs. Chambers, Goris, Hilton, Howze, and Patel and Mses. Fetch, Lincoln and Walker elected to defer receipt of the RSUs that were granted in 2023 under our
Non- Employee Directors’ Deferred Compensation Plan.
Ms. Fetch was appointed to the Board on July 20, 2023 and Mr. Howze was appointed to the Board on October 17, 2023.
All of Messrs. Chambers’, Goris’, and Howze’s, and Ms. Lincoln’s Board fees were deferred under our Non-Employee Directors’ Deferred Compensation Plan.
The amount shown for 2023 represents above-market non-qualified deferred compensation earnings calculated as the difference in earnings under the Moody’s
Corporate Bond Index fund in our Non-Employee Directors’ Deferred Compensation Plan and a hypothetical rate.
48
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
CORPORATE GOVERNANCE
OTHER ARRANGEMENTS
We reimburse Directors for reasonable out-of-pocket expenses incurred in connection with attendance at Board
meetings, or when traveling in connection with the performance of their services for Lincoln Electric.
CONTINUING EDUCATION
Directors are generally reimbursed up to $5,000 for continuing education expenses (inclusive of travel expenses) for
programs each Director may elect to attend. We also incorporate continuing education topics for Directors into our
Board meetings from time to time.
STOCK OWNERSHIP GUIDELINES
In keeping with the philosophy that Directors’ interests should be aligned with the shareholders’ interest and as part of
the Board’s continued focus on corporate governance, all of our non-employee Directors must adhere to our stock
ownership guidelines. RSUs, including any RSUs that have been deferred under the Non-Employee Directors’ Deferred
Compensation Plan, count toward the stock ownership amount; shares held in another person’s name (including a
relative) do not.
The stock ownership guidelines can be met by satisfying one of the two thresholds noted in the chart below. Directors
have five years from the date of election to the Board to satisfy the stock ownership guidelines. As of December 31, 2023,
all of our non-employee Directors had satisfied the stock ownership guidelines, except for Ms. Fetch and Mr. Howze who
were appointed to the Board in 2023.
Retainer Multiple
Number of Shares
Shares valued at 5x annual Board retainer (total of $475,000)
OR
2,185*
* Represents shares equal to $475,000 based on the closing price of Lincoln Electric stock as of December 29, 2023 (the last trading day of that calendar year) of $217.46.
The Nominating and Corporate Governance Committee reviews the guidelines at least every two-and-a-half years to ensure
that the components and values are appropriate. A review was conducted during 2023, with the assistance of Willis Towers
Watson, and it was determined that no changes to the guidelines were necessary, other than the share floor amount being reset
as of December 31, 2023 and reflecting the modified Board retainer of $95,000, as the five times annual retainer guideline is
consistent with the peer group median. The revised stock ownership guidelines became effective in 2024. The next review is
anticipated to occur in 2025.
EQUITY AWARDS
The non-employee Directors’ RSUs awards are granted under the 2023 Stock Plan for Non-Employee Directors. Under
the terms of the awards, RSUs generally vest in full one year after the date of grant. In addition, the awards vest in full
in the event of a change in control of Lincoln Electric if the Director’s service is terminated or if the award is not
assumed upon the change in control. The awards also vest in full upon the death or disability of the Director, or vest pro
rata, based on length of service, upon the retirement of the Director. Dividend equivalents are sequestered until the
shares underlying the RSUs are distributed, at which time the dividend equivalents are paid in cash.
DEFERRED COMPENSATION PLAN
The Non-Employee Directors’ Deferred Compensation Plan allows the non-employee Directors to defer payment of all or
a portion of their annual cash compensation and RSUs granted to them. This plan allows each participating
non-employee Director to elect to begin payment of the deferred amounts as of the earlier of termination of services as
a Director, death or a date not less than one full calendar year after the year the fees are initially deferred.
The investment elections available under the plan for cash compensation deferred are the same as those available to
executives under our Top Hat Plan, which is discussed in the executive compensation narrative under 2023 Deferred
Compensation Benefits. RSU deferrals are deemed invested solely in a Lincoln Electric Stock fund, and no other plan
deferrals are eligible for investment into that fund.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
49
Executive Compensation
Our long-term strategy is focused on key actions and initiatives that generate long-term profitable growth within our
targeted markets through value-added solutions and operational excellence. We believe this approach engages our
business team in creating a long-term value proposition for shareholders that generates above-market returns through
an economic cycle while maintaining a short-term focus on improving profitability and driving operating excellence.
More information on our business and strategy can be found in the ‘‘Business Overview’’ section at the beginning of this
Proxy Statement.
The Compensation Discussion and Analysis (CD&A) describes our executive compensation programs and how they
apply to our NEOs. For purposes of this CD&A, when referring to CEO, we are referring to Mr. Mapes, as the CEO for
2023, unless otherwise specified. The CD&A contains statements regarding future performance targets and goals. These
targets and goals are disclosed in the context of our compensation programs and should not be understood to be
statements of management’s expectations or estimates of results or other guidance. We caution investors not to apply
these statements in other contexts.
Executive Compensation Table of Contents
Executive Summary
Our Compensation Philosophy
Key Elements of Executive Compensation
Other Arrangements, Policies and Practices
Summary of 2023 Compensation Elements
2023 Summary Compensation Table
2023 Grants of Plan-Based Awards Table
Holdings of Equity-Related Interests
2023 Deferred Compensation Benefits
Termination and Change in Control Arrangements
CEO Pay Ratio
Pay Versus Performance
51
60
66
76
81
82
84
86
87
89
94
95
Steven B.
Hedlund
Christopher L.
Mapes
Gabriel
Bruno
Jennifer I.
Ansberry
Michele R.
Kuhrt
President and Chief
Executive Officer (since
January 1, 2024)
Executive
Vice President, Chief
Operating Officer (through
December 31, 2023)
Executive Chair (since
January 1, 2024)
President and
Chief Executive Officer
(through December 31, 2023)
50
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Executive Vice President,
Chief Financial Officer
and Treasurer
Executive Vice President,
General Counsel and
Secretary
Executive Vice President,
Chief Human Resources
Officer
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
EXECUTIVE SUMMARY
Our approach to executive compensation is generally the same as our approach to employee-wide compensation, with a
strong belief in pay for performance and a long-standing commitment to incentive-based compensation.
While maintaining our performance-driven culture, our executive compensation program is designed to achieve the
following objectives:
Align Interests
Incentivize Management
Support Long-Term Strategy
Align the interests of management
(and employees) with long-term
interests of our shareholders and
other stakeholders
Design compensation elements to
incentivize management to deliver
above-market financial results
Define performance drivers which
support key financial and strategic
business objectives
Good Governance Practices
Retention & Succession Planning
Pay for Performance
Help ensure we are following good
governance practices in the design
and operation of our executive
compensation program, including
consideration of the risks associated
with those practices
Reinforce executive retention to
enable achievement of annual and
long-term business goals through a
stable management team
Link incentive-based compensation
to the company’s short-term and
long-term financial and operational
performance
CEO TARGET PAY
“AT RISK”
ALL OTHER NEOS TARGET PAY
“AT RISK”
SAY-ON-PAY VOTE
At Risk
87%
At Risk
75%
Approval
96%
At our 2023 Annual Meeting, shareholders
again showed strong support for our
executive compensation program with
96% of the shareholders who voted
approving, on an advisory basis, the
compensation of our NEOs
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
51
EXECUTIVE COMPENSATION
KEY FINANCIAL PERFORMANCE
We have a strong track record of delivering increased value to our shareholders and we have typically delivered
above-market performance across various financial metrics over many economic cycles. Our long-term strategy seeks
to achieve profitable sales growth both organically and through acquisitions by emphasizing value-added solutions and
differentiated technologies. We anticipate this strategy will yield improved profit margins and returns and will generate
best-in-class financial performance measured against our peer group.
In 2023, we achieved record performance across key financial metrics including sales, adjusted operating income
margin, adjusted earnings per share, cash flow from operations, and our adjusted return on invested capital. By
focusing on employee safety and training, operational excellence, diligent cost management, and a ‘‘customer-first’’
approach, we executed well and advanced towards our 2025 Strategy goals.
2023 Net sales increased 11.4% to a record $4.2 billion. Organic sales increased 4.0% from 2.3% higher volumes and a
1.7% increase in price. We achieved organic growth across all regions and in our three product categories, led by
equipment and automation, reflecting strong capital spending to support customers’ growth initiatives and need for
increased productivity. Acquisitions contributed 7.4% of sales growth, primarily from our 2022 Fori Automation LLC
acquisition. Strong momentum in automation demand from both our legacy automation portfolio and from acquisitions
resulted in record automation portfolio sales of $941 million in 2023. Our performance in automation positions us well
to exceed our $1 billion automation sales objective ahead of our 2025 target.
We also remained focused on innovation to drive long-term growth. In 2023, we launched over 50 new product families,
including Velion™, our new DC fast charger for electric vehicles. This innovation among a strong pipeline of product
development in our core welding and cutting offerings, resulted in a 57% vitality index mix of our standard equipment
sales. Our industry segment teams were also highly engaged with customers to ensure Lincoln Electric has the leading
solutions to support their current and planned energy and civil infrastructure investments, as well as platform
expansions to support long-term electrification transition in the transportation sector. These efforts have positioned the
organization with a strong growth profile within our core portfolio and have developed emerging growth opportunities
in close adjacencies such as our additive 3D printing solution and our newly developed Velion™ DC fast charger.
Operationally, we continued to optimize business processes in our global automation portfolio and in The Harris
Products Group segment. These initiatives, as well as an enterprise-wide focus on diligent cost management, shared
services, and continuous improvement programs focused on safety, enhanced productivity, and resource conservation,
resulted in a record 17.1% operating income margin with a 20% adjusted operating income incremental margin. This
marked the first year that all three reportable segments achieved profit margin performance within their 2025 Strategy
target ranges – helping to advance us within our long-term targets.
Net income increased 16% to a record $545.2 million in 2023, and 13% to $547.9 million on an adjusted basis. Earnings
per share increased 17% to a record $9.37, and 14% to a record $9.41 on an adjusted basis.
We achieved a 74% increase in Cash flows from operations to a record $668 million with a 105% cash conversion ratio,
reflecting increased profitability and working capital efficiencies as we began to normalize inventory levels. This was
demonstrated in the 380-basis point improvement in our average operating working capital to sales performance
to 17.1%. This top quartile performance versus our peer group accelerates our progress towards our 2025 target
of 15.0%. We also reported record Return on invested capital (ROIC) and Adjusted ROIC at 24.0% and 24.1%,
respectively – demonstrating the effectiveness of our 2025 Strategy and our disciplined capital allocation approach.
52
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
NET SALES
OPERATING INCOME MARGIN
(Reported & Adjusted)
DILUTED EPS
Reported
Organic Sales
$4.2B +11% +4%
(Record)
vs. 2022
vs. 2022
17.1%
Reported +80 bps
vs. 2022
(Record)
Adjusted +30 bps
vs. 2022
(Record)
Reported
Adjusted
$9.37
+17% bps vs. 2022
(Record)
$9.41
+14% vs. 2022
(Record)
CASH FLOW FROM
OPERATIONS
$668M
+74% vs. 2022
(Record)
AVERAGE OPERATING WORKING
CAPITAL TO NET SALES RATIO
17.1%
380 bps improvement
RETURN ON INVESTED CAPITAL
Reported
24.0%
(Record)
Adjusted
24.1%
(Record)
28th
CONSECUTIVE DIVIDEND INCREASE
+11%
NEW PRODUCT VITALITY INDEX
42%
See Appendix A for definitions and/or reconciliation of these metrics to results reported in accordance with GAAP. Performance measures used in the design of the executive
compensation program are presented within the Compensation Discussion and Analysis section.
We are committed to generate long-term value for our shareholders through a disciplined and balanced capital
allocation strategy through the cycle. In 2023, we deployed approximately $91 million towards capital projects focused
primarily on growth and operational efficiency and invested $33 million in a small bolt-on automation acquisition in
Brazil (following our largest acquisition in our history in December 2022). We returned approximately $347 million of
cash to shareholders through our dividend program and $199 million of share repurchases. In the last five years, we
have returned approximately $1.6 billion to shareholders through an aggregate amount of $951 million in shares and
have increased the dividend rate by 51%, including the 2023 increase in the payout rate by 11%, marking 28 years of
consecutive dividend increases.
$347M
Returned to
Shareholders
in 2023
$148M
In Dividends
$199M
In Share
Repurchases
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
53
EXECUTIVE COMPENSATION
TOTAL SHAREHOLDER RETURN (TSR)
In 2023, the combined value of our dividend program and the appreciation of our stock price resulted in favorable total
shareholder return (TSR) performance versus peers and top quartile performance versus select indices on a 1, 3 and
5-year basis. We believe that TSR is an important measure to demonstrate the Company’s value creation for
shareholders and is important to our executives over the long-term. For 2023, approximately 69% of our CEO’s and 48%
of our other NEO’s compensation was tied to equity-based compensation, which can be favorably impacted when the
TSR increases. In this case, the value of the compensation paid to our NEOs increases in line with the appreciation
received by our shareholders.
TOTAL SHAREHOLDER
RETURN
+53%
+96%
+202%
1-Year
3-Year
5-Year
The following 3-Year (2021–2023) TSR Performance Percentile Rank chart illustrates our TSR performance compared to
our peer group, the S&P Composite 500 Stock Index (S&P 500), the S&P 400, and a S&P 400 Midcap Manufacturing Index.
The TSR percentile rankings show the position of our TSR performance compared to the particular group, with a
50th percentile ranking indicating median (or market) performance. Percentiles below 50 indicate below-market
performance, while percentiles above 50 indicate above-market performance.
Total Shareholder Returns (TSR)1
3-Year (2021-2023) TSR Performance
Percentile Rank to Peers and Select Indices
91.1%
86.6%
81.2%
80.1%
Peers
S&P
500
S&P
400
S&P
Midcap
400 Mfg
1
See Appendix A for definition for TSR
54
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
FINANCIAL MEASURES USED FOR COMPENSATION PURPOSES
We consider various types of widely reported financial metrics to apply to our executive compensation program. Some
of these financial metrics directly impact our executive compensation program, while in some cases we use the closest
approximations for the metrics that we use in our compensation programs. We believe that all of these financial
metrics are critical to the short-term and long-term growth and performance of our organization.
Financial metrics used to evaluate operational performance and used in our short-term annual bonus (EMIP) and our
long-term incentive plan designs are:
FINANCIAL MEASURES:
SHORT-TERM METRICS AND WEIGHTING
FINANCIAL MEASURES:
LONG-TERM METRICS AND WEIGHTING
25%
25%
50%
50%
50%
Adjusted Revenue for Compensation Purposes
Adjusted earnings before interest, taxes and bonus (EBITB)
AOWC/Sales for Compensation Purposes
3-Year Growth of Adjusted Net Income for Compensation Purposes
3-Year Average ROIC for Compensation Purposes
Short-Term Metrics:
Long-Term Metrics:
Adjusted Revenue for Compensation Purposes (Adjusted
Revenue1), weighted at 25%
Growth of Adjusted Net Income for Compensation
Purposes (over a three-year cycle), weighted at 50%
Adjusted earnings before interest, taxes, and bonus
(EBITB), weighted at 50%
Average operating working capital to net sales ratio
(AOWC/Sales) for Compensation Purposes, weighted
at 25%
Three-year Average Return on Invested Capital (ROIC) for
Compensation Purposes indexed to peer performance,
weighted at 50%
1
Adjusted Revenue for compensation purposes focuses on organic sales growth by emphasizing volume growth and placing a collar on price contributions to revenue.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
55
EXECUTIVE COMPENSATION
PERFORMANCE OF FINANCIAL MEASURES USED FOR COMPENSATION PURPOSES
Short-Term Compensation Program Financial Metric Performance
The following charts demonstrate our performance over the last three years in financial metrics incorporated in our
short-term compensation program.
Net Sales
Representative of
Adjusted Revenue for
Compensation Purposes2
($ in billions)
$4.2
$3.8
$3.2
Adjusted Operating Income1
Representative of EBITB2
($ in millions)
$719
$631
$479
AOWC/Sales for
Compensation Purposes2
21.0%
22.5%
21.5%
2021
2022
2023
2021
2022
2023
2021
2022
2023
1
2
Excluding special items where applicable. Definitions and reconciliation of non-GAAP results to our most closely comparable GAAP results are included in Appendix A.
See Appendix A for definitions.
Long-Term Compensation Program Financial Metric Performance
The following charts demonstrate our performance over the last three years relative to the financial metrics
incorporated into our long-term compensation program: Adjusted Net Income for Compensation Purposes and ROIC for
Compensation Purposes.
The results for ROIC for Compensation Purposes are compared to our peer group, the S&P 400 Midcap Index (S&P 400),
in which we participate, and the S&P 400 Midcap Manufacturing Index. The ROIC for Compensation Purposes percentile
rankings show the position of our financial results compared to the particular group, with a 50th percentile ranking
indicating median (or market) performance. Percentiles below the 50th indicate below-market performance, while
percentiles above the 50th indicate above-market performance. Information is based on the most recently available
public information (as accumulated by an independent third party), as of January 2024 when the analysis was
performed. In our long-term incentive plan design, ROIC for Compensation Purposes is a relative measure and payout is
determined based on our average performance over 3-years as compared to our peers.
Adjusted Net Income
for Compensation Purposes1
($ in millions)
Return on Invested
Capital for
Compensation Purposes1
$534
28.1%
$472
$356
21.5%
22.6%
2021
2022
2023
2021
2022
2023
3-Year Average ROIC for
Compensation Purposes1,2
Performance and Percentile Rank to
Peers and Select Indices
23.6%
99.8th
92.4th 95.8th
12.8%
10.3%
8.4%
Peers
Lincoln
Electric
S&P
400
S&P
Midcap
400 Mfg
1
2
Excluding certain items as approved by the Compensation and Executive Development Committee where applicable. See discussion and definitions on page A-1 in the
Performance Shares Financial Metrics section and in Appendix A.
As of September 30, 2023.
56
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
PAY FOR PERFORMANCE, OBJECTIVES AND PROCESS
In designing our executive compensation program, a core philosophy is that our executives should be rewarded when
they deliver financial results that provide value to our shareholders. Therefore, we have established a program that ties
executive compensation to superior financial performance.
To assess pay for performance, we evaluate the relationship between CEO realizable pay and TSR performance using
essentially the ISS methodology. This allows us to understand the relative degree of alignment over a three-year period
between the pay opportunity delivered to the CEO and the performance achieved by shareholders relative to our peer
group. This analysis is performed by management and reviewed by management’s compensation consultant, WTW and
the Compensation and Executive Development Committee (the ‘‘Committee’’). This analysis was performed for the 2020
to 2022 period, which is the period for which both compensation and performance data was readily available for our
peers.
In evaluating pay and performance alignment, the analysis focuses on CEO pay primarily as reflected in the Summary
Compensation Table, with the exception of valuing equity-based awards. All stock-based awards (both time and
performance-vesting) are calculated by multiplying the number of underlying shares by the closing stock price on the
grant date, and option awards are calculated using the ISS Black-Scholes option pricing model. This means that for us,
the CEO is evaluated based on the following compensation elements for the applicable three-year period:
• Base pay;
• Annual bonus (EMIP);
• The value of restricted stock units (RSUs) granted
(based on the closing price of our common stock as of
the grant date);
• The value at target of performance shares granted
(based on the closing price of our common stock as of
the grant date);
• The value of stock options granted (based on the ISS
Black-Scholes pricing model as of the grant date);
• Actual nonqualified deferred compensation earnings;
and
• All other compensation for the applicable three-year
period.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
57
EXECUTIVE COMPENSATION
The shaded area in the chart below highlights the area in which ISS has a low overall concern level. As shown in the
chart below, our ranking for TSR performance and our ranking for CEO pay falls within the shaded area and
demonstrates an overall alignment between pay and performance. Based on this analysis, the Committee is satisfied
with the alignment of our CEO’s pay with the performance of the Company.
Lincoln Electric Holdings, Inc. Pay for Performance
3-Year CEO Pay Percentile vs. 3-Year TSR Percentile Rank
Low Pay for
High Performance
LECO (2020-2022)
LECO
Pay Rank = 63%
TSR Rank = 92%
Pay for Performance Alignment
LECO (2018-2020)
LECO (2019-2021)
High Pay for
Low Performance
k
n
a
R
e
l
i
t
n
e
c
r
e
P
R
S
T
r
a
e
Y
-
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)
s
r
e
e
P
S
S
I
o
t
e
v
i
t
a
l
e
R
(
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
3-Year CEO Pay Rank
(Relative to ISS Peers)
While we consider the ISS methodology in assessing pay for performance, we view it as one of the variables for
evaluating pay for performance alignment. We have provided the ISS analysis in assessing pay for performance for
investors that might be utilizing it in evaluating pay for performance.
2023 EXECUTIVE COMPENSATION ACTIONS
During 2023, the Committee reviewed the design of our executive compensation program to help ensure consistency
with our pay for performance philosophy. Each year, the Committee monitors our executive compensation program and
how it relates to our corporate performance and shareholder interests. At our 2023 Annual Meeting, we received 96%
approval, based on the total votes cast, for our annual advisory say-on-pay vote to approve the compensation of our
NEOs. The Committee considered this result, in connection with its review of the overall design of our executive
compensation program, particularly in light of the 2025 Strategy. The Committee believes the voting results
demonstrate significant support for our executive compensation program, and the Committee chose not to make any
substantial changes to the existing program previously approved for 2023 specifically in response to the 2023
say-on-pay voting results. The Committee expects, however, to continue to work with its compensation consultant to
monitor changes in executive compensation trends to keep our executive compensation program aligned with best
practices in our competitive market.
58
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
CHIEF EXECUTIVE OFFICER TRANSITION
During 2023, the Company announced the planned retirement of Christopher L. Mapes as the Company’s President and
Chief Executive Officer, effective December 31, 2023, and the election of Steven B. Hedlund as President and Chief
Executive Officer effective January 1, 2024. For purposes of this CD&A, when referring to CEO, we are referring to
Mr. Mapes, as the CEO for 2023, unless otherwise specified.
GOOD GOVERNANCE PRACTICES
In addition to our emphasis on above-market financial performance and pay for performance, we design our executive
compensation program to be current with best practices and good corporate governance. We also consider the risks
associated with any particular program, design or compensation decision. We believe these assessments result in
sustained, long-term shareholder value. Some of those governance practices are described in the Compensation-Related
Risk section in this Proxy Statement.
The following table highlights certain of our good governance practices relative to our executive compensation program:
What We Do
What We Don’t Do
Pay for Performance Focus
(Compensation programs weighted heavily toward
variable, ‘‘at risk,’’ compensation; perform annual
reviews of market competitiveness and the relationship
of compensation to financial performance)
Balanced Compensation
(Compensation opportunities linked to both short-term
and long-term periods of time, while aligning
compensation with several financial performance
metrics that are critical to achievement of sustained
growth and shareholder value creation)
No Guaranteed Pay Increases
(No multi-year guarantees for compensation increases,
including base pay, and no guaranteed bonuses)
No Repricing or Replacement of Underwater Stock
Options without Prior Shareholder Approval
Double-Trigger Provisions for Change in Control
No Payment of Dividends on Unvested Equity
Stock Ownership Guidelines for all Executive Officers
No Excessive Perquisites
Clawback Policy
No Excise Tax Gross-Ups or Tax Reimbursements
Independent Compensation Committee and Consultant
No Hedging or Pledging of Lincoln Electric Stock
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
59
EXECUTIVE COMPENSATION
OUR COMPENSATION PHILOSOPHY
Core Principles
Our compensation program is designed to attract and retain exceptional employees, while maintaining our strong pay
for performance culture. We design our compensation system to reflect current best practices and our
performance-driven culture, including setting base pay below the competitive market for each position, targeting
incentive-based cash compensation above the competitive market and targeting long-term incentive compensation at
the market median. We believe these practices result in sustained, long-term shareholder value and promote quality
corporate governance in compensation decisions.
The primary components of our executive compensation program, summarized below, help ensure that we maintain
our performance-driven culture:
Type
Component and Competitive Target
Philosophy and Objective
• Generally targeted at the 45th percentile of market
(below market) to place stronger emphasis on
incentive compensation
Fixed Compensation
Base Pay
45th
Percentile
•
Provide market-competitive fixed pay reflective of an
executive officer’s role, responsibilities and
individual performance in order to attract and retain
top talent
Incentive-Based
Compensation
Target Total Cash
Compensation
with Annual
Bonus (EMIP)
65th
Percentile
Long-Term
Incentive
Compensation
50th
Percentile
• Generally targeted above the competitive market, so
that target total cash compensation (base pay and
annual bonus which incorporates financial targets
and individual performance goals) is set at 65th
percentile of market
• Drive financial performance, including revenue,
adjusted EBITB and average operating working
capital to net sales ratio
• Deliver individual performance against specific
business objectives, including executing on our 2025
Strategy, increasing our customer satisfaction,
developing and engaging a diverse and talented
workforce, driving sustainable innovation and
improving operating efficiencies
• Generally targeted at the 50th percentile of market
(at market)
• Divided equally among 3 programs: (1) stock options;
(2) RSUs; and (3) Performance Shares, to drive
long-term financial performance, with metrics
related to Adjusted Net Income for Compensation
Purposes and Return on Invested Capital for
Compensation Purposes
•
Incentivize achievement of long-term value creation
through financial performance objectives weighted
more heavily toward rewards for share price
appreciation and long-term profitability
In addition to the primary components of our executive compensation program, we provide benefits and perquisites
that we believe, taken as a whole, are at the market median.
60
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
Average Mix of Key Compensation Components
Individual performance also plays a key role in determining the amount of compensation delivered to an individual,
with our philosophy being that the best performers should receive the greatest rewards. The following charts present
the mix of 2023 target direct compensation for our CEO and all of our other NEOs (on an average basis), as established in
the beginning of 2023. As shown below, 87% of the CEO’s compensation mix was ‘‘at risk’’ and 75% of our other NEOs’
compensation mix, on average, was ‘‘at risk,’’ with the actual amounts realized based on annual and long-term
performance as well as our stock price.
CEO TARGET COMPENSATION MIX
ALL OTHER NEOS TARGET COMPENSATION MIX
R i sk
t
87 % A
23%
13%
69%
Long-
Term
23%
18%
23%
t R i s k
75 % A
16%
Annual Bonus (EMIP)
Stock Options
Restricted Stock Units
Performance Shares
25%
16%
48%
Long-
Term
16%
27%
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
61
EXECUTIVE COMPENSATION
THE ROLES OF THE COMMITTEE, EXTERNAL ADVISORS AND MANAGEMENT
The Committee, which consists solely of non-employee Directors, has primary responsibility for reviewing, establishing
and monitoring all elements of our executive compensation program. The Committee is advised by its independent
executive compensation consultant, WTW, and independent legal counsel as it deems appropriate. Management
provides recommendations and analysis to the Committee.
ROLE OF THE COMMITTEE
Compensation-Related Tasks
Organizational Tasks
Reviews, approves and administers all of our executive
compensation plans, including our equity plans
Establishes performance objectives under our short-term
and long-term incentive compensation programs1
Determines the attainment of performance objectives
and the awards to be made to our executive officers
under our short-term and long-term incentive
compensation programs1
Determines the compensation for our executive officers,
including base pay and short-term and long-term
incentive compensation opportunities1
Reviews compensation practices relating to key
employees to confirm that these practices remain
equitable and competitive
Evaluates the performance of the CEO, including
consideration of tone and embodiment of core values,
with input from all non-employee Directors
Reviews the performance capabilities of the other
executive officers, including consideration of tone and
embodiment of core values, based on input from the CEO
Reviews succession planning for officer positions,
including the position of the CEO
Reviews proposed organization or responsibility changes
at the officer level
Reviews our practices for the recruitment and
development of a diverse talent pool
Reviews employee benefit plans that relate to executive
officers and/ or key employees
Retains the services of independent legal counsel from
time to time to provide input on various matters
1
The independent members of the Board take such action with respect to the CEO.
ROLE OF EXTERNAL ADVISORS
WILLIS TOWERS WATSON
• Independent executive compensation consultant for
• Meets with the Committee in executive session
the Committee
• Advises on matters including competitive
compensation analysis, executive compensation
trends and plan design, peer group company
configuration, competitive financial performance
and financial target setting
without the participation of management
• Discusses the CEO’s recommendations with the
Committee to help ensure the compensation
recommendations are in line with stated
compensation philosophies and are reasonable
when compared to the competitive market
• Performs data analysis on competitive
• The Committee is not bound by WTW’s
compensation, competitive financial performance
and financial target setting
• Reviews analysis and data collected by management
(particularly the CEO, the CFO and the Chief Human
Resources Officer)
• Reports directly to the Chairperson of the
Committee
recommendation
• Considering all relevant factors (as required by
compensation consultant independence standards
set forth in applicable SEC rules and Nasdaq listing
standards), we have assessed WTW’s independence,
and are not aware of any conflict of interest that
has been raised by the work performed by WTW
62
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
• Perform individual performance assessments based
on achievement of various financial and leadership
objectives set by the CEO
• Receive suggestions from the Committee for
modifications to financial and leadership objectives
where warranted
ROLE OF CEO AND MANAGEMENT
• Provide compensation-related recommendations to
the Committee
• The CEO recommends the compensation for other
executive management positions and provides the
Committee with assessments of their individual
performance (both of which are subject to
Committee review)
Our Methodologies
SELECTION OF COMPENSATION ELEMENTS
As part of its annual review, the Committee evaluates whether changes in the philosophy or structure are warranted in
light of emerging trends, business needs and/or financial performance. The Committee then uses competitive market
data, performance assessments, and independent executive compensation consultants and management
recommendations to set the pay components along the targets described above (for example, 45th percentile for base
pay). Actual pay for executive management will generally fall within a range of these targets (plus or minus 20%).
Absent significant increases due to promotion, increases for break-through individual performance or significant
changes in the competitive market data, pay increases are considered generally in line with national trends.
MARKET COMPARISON DATA
We collect competitive market compensation data from multiple nationally published surveys and from proxy data for
a peer group of companies. Nationally published survey market compensation data is statistically determined (through
regression analysis) to approximate our revenue size and aged to approximate more current data. The Company did not
select the companies that comprise any of these survey groups. The Company generally blends 50% survey and 50%
peer data for benchmarking executive compensation for our NEOs.
PEER GROUP
We use a peer group of publicly traded industrial companies that are headquartered in the U.S. that serve a number of
different market segments and that have significant foreign operations. These are companies with which Lincoln
Electric competes for talent and shareholder investment. In addition, we only select companies with solid historical
financial results (removing companies from the peer group when their financial performance has consistently fallen
below a reasonable level) and companies with sales that are within 2.5 times that of Lincoln Electric sales. The
Committee conducts an annual review of our peer group, with the assistance of WTW as an independent advisor. In
July 2022, the Committee modified its peer group to be used for 2023 compensation matters, by including ESAB
Corporation, the industrial business which was spun-off from Colfax Corporation (now Enovis Corporation).
For 2023, our peer group consisted of the following 18 publicly traded industrial corporations:
Ametek Inc.
Flowserve Corporation
Nordson Corporation
The Toro Company
Carlisle Companies Inc.
Graco Inc.
Regal Rexnord Corporation
Woodward Inc.
ESAB Corporation
Crane Co.
IDEX Corporation
Snap-On, Inc.
Xylem Corporation
ITT Inc.
Terex Corporation
Donaldson Company, Inc.
Kennametal Inc
The Timken Company
In July 2023, the Committee reviewed its peer group and determined no changes were needed for the
2024 compensation planning cycle.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
63
EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION STRUCTURE
In evaluating our executive compensation structure, the Committee considers three primary elements: (1) business
needs (2) individual performance and (3) pay for performance review.
Business Needs
Individual Performance
Pay for Performance Review
•
Independent compensation
consultant (WTW) provides
information about emerging
trends in executive
compensation, along with
Committee members’ own
reading and study
• Trends considered in light of our
compensation philosophies and
various business needs
•
Individual performance is a
significant factor in determining
annual changes (up or down) to
pay components
• Annual bonus (the Executive
Management Incentive Plan, or
EMIP) includes an individual
performance component in
determining the percentage of
target bonus to be paid (described
below)
• The Committee conducts an annual
assessment of our financial
performance and pay for
performance, in determining
whether changes will be made to
the existing philosophy or structure
and before setting compensation
levels for the upcoming year
• The annual assessments are used
to evaluate whether executive
compensation is properly aligned
with our financial performance
•
• Business needs that are evaluated
can include: talent attraction or
retention strategies, growth
expectations, strategic programs,
cost-containment initiatives,
management development needs
and our company culture
Individual performance is
generally measured against how
well an executive demonstrates
proficiency in key leadership
competencies, as well as the
executive’s achievement against
objectives established for him or
her at the beginning of the year
• No single factor guides whether
changes will be made, as the
Committee uses a holistic approach,
considering a variety of factors
• The Committee reviews the
overall performance of each NEO
during the year and assigns
Individual Performance Factors
64
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
The following chart highlights the process and timing of compensation determinations and payouts:
Prior Year Fourth Quarter
Current Year First Quarter
Throughout Current Year
EXECUTIVE COMPENSATION
• Committee reviews our
• Committee determines the
individual performance goals of
the CEO (with Board approval)
and sets the performance goals
for each corporate-based
(financial) component for the
current year
• Committee meets regularly
throughout the year, with
management and in executive
session
compensation program and
philosophy, including
determining if our
compensation levels are
competitive with our peer group
and if any changes should be
made to the program for the
next year
• Committee determines the
principal components of
compensation for the NEOs for
the next year
• Compensation consultant
(WTW) provides a competitive
market assessment of pay levels
for the executive officers,
including the NEOs
• CEO sets individual
• Ongoing review of Company
performance against
performance goals
performance goals for the
current year for each of the
other NEOs, which are reviewed
by the Committee
• Individual performance goals of
CEO and the other NEOs are
designed to drive our corporate
goals and our 2025 Strategy
• Base pay, annual bonus targets
and long-term incentive awards
are set at a regularly scheduled
Committee meeting
• Payout amounts for the annual
bonus (EMIP) and Performance
Shares earned as of the end of
the prior year are determined at
the first available Committee
meeting (normally in February)
or a subsequent special meeting
(normally in March), once
financial results are available
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EXECUTIVE COMPENSATION
Key Elements of Executive Compensation
Each compensation component for our NEOs is described below, with specific actions that were taken during 2023 noted. For
2023 compensation amounts, please refer to the Summary Compensation Table and other accompanying tables.
BASE PAY
Base salary is provided to our executives to compensate them for their time and proficiency in their positions, as well as
the value of their job relative to other positions at Lincoln Electric. Base salaries are set based on a subjective evaluation
of the executive’s experience, expertise, level of responsibility, leadership qualities, individual accomplishments and
other factors.
1
Level of responsibility
and experience
2
Individual performance
and leadership qualities
3
Internal equity
4
Peer Data
We aim to set base salaries at approximately the 45th percentile of the market (slightly below market) in keeping with
our philosophy that greater emphasis should be placed on variable compensation.
2023 AND 2024 BASE PAY
Ahead of 2023, the Committee reviewed officer pay, including all NEOs, as compared to the market. The Committee
approved certain increases in NEO base salaries as detailed below, bringing the base pay within the competitive
benchmark, while the base pay of the NEOs remains, on average, slightly below the 45th percentile.
NEO
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
Increase %
2023 Base Salary1
4.0%
8.0%
8.0%
8.2%
3.0%
$ 1,107,600
$
$
$
$
540,000
648,000
468,000
451,000
1
Base salaries effective as of January 1, 2023.
For 2023, Mr. Mapes base pay increased 4.0%. Mr. Hedlund received an 8.0% base pay increase, which was to continue to
progress compensation within the competitive benchmark for his recently promoted role in 2022. In August 2023, in
connection with the announced CEO transition plan, the Committee approved a further increase for Mr. Hedlund in
connection with his pending appointment as President and Chief Executive Officer, establishing his new base salary at
$1,010,000, which would remain his base salary for 2024. Mr. Bruno and Ms. Ansberry received an 8.0% and 8.2% base
pay increase, respectively, which was to progress compensation and remain competitive within the benchmarks for
their roles. Ms. Kuhrt’s base compensation increased 3.0% from her base pay received in 2022. The base pay for the
NEOs falls within the competitive benchmark and the NEOs remain, on average, slightly below the 45th percentile for
base compensation.
For 2024, Mr. Mapes base compensation was reduced to $553,800 for his role as Executive Chair. Mr. Hedlund’s base
compensation was approved in August 2023 as discussed above. Mr. Bruno and Ms. Ansberry received 7.4% and 7.9%
base pay increase, respectively, which was to progress compensation and remain competitive within the benchmarks
for their roles. Ms. Kuhrt’s base compensation increased 3.8% from her 2023 compensation. The base pay for the NEOs
falls within the competitive benchmark and the NEOs remain, on average, slightly below the 45th percentile for base
compensation.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
ANNUAL BONUS (EMIP) AND TOTAL CASH COMPENSATION
The EMIP provides executive officers, including the NEOs, with an opportunity to receive an annual cash bonus. We
believe that, given base pay is below market, annual cash bonus opportunities should be above average to balance some
of the risk associated with greater variable compensation. However, we also believe that above-market pay should be
linked to financial and individual performance. Therefore, we target total cash compensation (base pay and target
annual bonus) at the 65th percentile of the market, but use a structure that provides payments of above-average
bonuses only where the performance of the consolidated company and the performance of an NEO’s particular segment
or business unit, warrant it. We also consider the impact of an officer’s individual performance during the year.
ANNUAL BONUS (EMIP) FORMULA
With respect to 2023, the formula to determine each NEOs annual bonus (EMIP Bonus Payout) multiplies an individual’s
Target Bonus Amount by the Financial Performance Factor and the Individual Performance Factor. The Financial
Performance Factor considers the financial performance of specific financial metrics of the consolidated Company and
for operations roles, the segment or business units they support. If the financial performance target is not met on any
specific financial metric, the EMIP Bonus Payout will be reduced, with the potential that no bonus will be paid if
performance across all metrics is below threshold. If financial performance exceeds expectations on any of the specific
financial metrics, the percentage of annual bonus paid can be above the Target Bonus Amount. Once financial
performance is calculated, an Individual Performance Factor is considered to determine the final EMIP Bonus Payout.
The maximum EMIP Bonus Payout, considering financial and individual performance, will not exceed 200% of an
individual’s annual Target Bonus Amount.
2023 EMIP BONUS CALCULATION
Target Bonus
Amount
Financial
Performance
Factor
Individual
Performance
Factor
EMIP
Bonus
Payout
The Committee has discretion to approve EMIP payments outside of the strict application of this calculation, although
no discretion was used for calculation of the 2023 annual bonuses. EMIP payout determinations for the 2023
performance period were made in the first quarter of 2024.
ANNUAL BONUS (EMIP) FINANCIAL METRICS
A portion of the EMIP Financial Performance Factor is based upon achievement of company consolidated financial
performance against budget and another portion may be attributable to segment financial performance against budget,
depending upon the individual’s scope of responsibility. By varying the financial metrics used based upon areas of
responsibility, it is possible that certain participants will receive a higher percentage of target bonus while others will
receive a lower percentage of target where the segment performance for one participant is better than the segment
performance for the other. This is a key component of our pay for performance and incentive-based philosophies. In
2023 each of our NEOs’ Financial Performance Factor was based on the Company’s Consolidated results.
The Financial Performance factor calculation utilizes the achievement results of three metrics weighted as follows:
• 25% Adjusted Revenue for Compensation Purposes (Adjusted Revenue);
• 50% Adjusted EBITB; and
• 25% AOWC/Sales for Compensation Purposes.
Actual results are measured against budget at budgeted exchange rates and adjusted for the results of businesses
acquired during the year. Budgets are set aggressively (based on the local and global economic climate), at the beginning
of the year, are reviewed by the Finance Committee and are approved by the full Board. For 2023 a price collar was
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
67
EXECUTIVE COMPENSATION
embedded in the budgeted goals that restricts the impact of pricing on Adjusted Revenue results. For 2023, Management
was responsible for +/-2% on pricing that impacted actual revenue results as compared to pricing in the budget. Each
financial metric is calculated and interpolated on a financial payout curve to determine the Financial Performance
Factor. The financial payout curves, considering threshold and maximum opportunities, are set at the beginning of the
year and are approved by the Committee.
The following table illustrates the opportunity for achievement of the Financial Performance Factor based on actual
performance against target across each financial metric and the 2023 target amounts set during the budget process.
Financial Metric
Weightings
Threshold
Adjusted Revenue
EBITB
AOWC to Sales
Financial Payout Curves
25%
50%
25%
93%
80%
85%
50%
Achievement of
Actual Results vs. Budget
Target
(Budget)
100%
100%
100%
100%
Maximum
105%
115%
110%
200%
2023 Target (Budget)
Lincoln Electric
Holdings
$4.167 billion
$857 million
22.3%
ANNUAL BONUS (EMIP) INDIVIDUAL PERFORMANCE GOALS
Individual performance goals are set annually. A significant portion of our executive officers’ individual performance
goals is tied to one or more aspects of our 2025 Strategy.
The following table highlights the material 2023 individual performance goals for our CEO. The Committee chair,
supported by the Lead Independent Director, leads the review and evaluation process to establish the CEO’s
performance goals for each year, which were approved by the Board at the beginning of 2023. These 2023 performance
goals were cascaded throughout the organization and many are also in the individual performance goals for our
other NEOs.
Individual Performance Goals
Execution of the 2025 Strategy
Human capital management, including D&I, employee engagement and development initiatives
Cybersecurity and enterprise risk management
Sustainability, including environmental, health and safety metrics
Financial and operating targets
Operational optimization and expansion, and M&A integration
Commence development of new long-term strategy
CEO
In defining the individual performance goals, the Committee considered the goals to be strategically important to the
Company and its 2025 Strategy. The goals for 2023 were particularly aimed at operational optimization and M&A
integration, employee engagement, D&I, cybersecurity and achieving our EHS and Sustainability metrics. The CEO’s
individual performance rating is determined based on an evaluation of performance against the underlying goals with
the final rating being approved by the independent Directors of the Board. In assessing the individual performance of
our NEOs, the Committee reviews the performance rating recommended by the CEO with respect to each of the other
NEOs and recommends revisions, as needed, prior to the Committee approval of such rating.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
2023 ANNUAL BONUS (EMIP) AND TOTAL CASH COMPENSATION
The 2023 EMIP annual bonus targets for the NEOs were established and approved by the Committee in February 2023
according to the principles discussed above. As established at the beginning of 2023, Mr. Hedlund, Mr. Bruno and Ms.
Ansberry received an 8.6%, 16.1% and 28.7% target bonus increase, respectively, which was to continue to progress
target compensation within the competitive benchmark for their roles. In August 2023, in connection with the
announced CEO transition plan, the Committee approved a further increase for Mr. Hedlund in connection with his
pending appointment as President and Chief Executive Officer, establishing his new target bonus at $1,464,500 effective
August 1, 2023, which would remain his target bonus for 2024. Mr. Mapes’ 2023 target bonus increased 4.0% while Ms.
Kuhrt’s 2023 target bonus remained flat. The bonus targets fall within the competitive benchmark and the NEOs
remain, on average, at the 65th percentile on targeted total cash compensation.
In approving the 2023 EMIP payouts, the Committee assessed our Adjusted Revenue for Compensation Purposes
performance, EBITB performance and AOWC/Sales for Compensation Purposes performance against budget for
consolidated and segments, as applicable. On average, 2023 EMIP payments for the NEOs were 170% above their
2023 target amounts, driven primarily by strong EBITB performance and achievement of individual objectives.
The following table illustrates actual results versus budget and the interpolated Financial Performance Factor for each
financial metric to arrive at the Weighted Financial Payout Factor that drives actual bonus payouts.
Adjusted Revenue
Adjusted EBITB
AOWC/Sales
Lincoln Electric Holdings
Actual vs.
Budget
100.1%
107.6%
103.8%
Interpolated
Financial
Performance
Factor
101.2%
150.7%
138.0%
Weighting
25%
50%
25%
Weighted
Financial
Payout factor
135.1%
Note: The Adjusted EBITB performance results were adjusted for the same types of special items that impact Adjusted Operating Income and Adjusted Net Income as
disclosed in Appendix A.
The actual bonus payout to the NEO’s considers the impact of individual performance. The Committee assessed the
performance of each NEO against their Individual Performance Goals and assigned a rating that impacts the annual
bonus calculation as illustrated above. For the current year, individual performance ratings for the annual bonus for
officers ranged from 100 to 128.
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69
EXECUTIVE COMPENSATION
The following chart illustrates the actual calculated bonus considering both the financial and individual performance.
On average, 2023 EMIP payments for the NEOs, excluding Mr. Hedlund, were 2% higher than the 2022 EMIP payments,
driven by record financial performance.
NEO
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
Target Award
Opportunity
$ 1,606,000
$
566,000
$ 1,093,064
$
$
440,000
415,000
Target Award
Opportunity as a
% of 2023 Base
Salary
Maximum Award
Opportunity Based
on Matrix
Actual Award
Actual Award as
a % of Target
145%
105%
137%
94%
92%
$ 3,212,000
$ 2,777,943
$ 1,132,000
$
979,026
$ 2,186,128
$ 1,890,704
$
$
880,000
830,000
$
$
731,351
689,797
173%
173%
173%
166%
166%
2024 ANNUAL BONUS (EMIP) AND TOTAL CASH COMPENSATION
The 2024 EMIP target award for Mr. Mapes was reduced to $803,000 for his role as Executive Chair. Mr. Hedlund’s 2024
EMIP target award was increased to $1,464,500 in August of 2023 as previously discussed. The 2024 EMIP targets for the
remaining NEO’s were approved in the first quarter of 2024 and were established by the Committee in consultation with
WTW, based on our compensation philosophies as well as competitive market data as discussed above. On average, the
remaining NEO’s target award increased 3.2% for 2024. The bonus targets fall within the competitive benchmark and
the NEOs are on average at the 65th percentile on targeted total cash compensation.
LONG-TERM INCENTIVE COMPENSATION
We believe that long-term incentive compensation should be provided to focus rewards on factors that deliver
long-term sustainability and should be established at the median (or 50th percentile) of the market. We have targeted
the median of the market, in keeping with our pay for performance philosophy, because we believe that superior
long-term financial growth itself should be the main driver of above-market long-term incentive compensation.
For 2023, our long-term incentive compensation program consists of three components: (1) stock options, (2) RSUs and
(3) Performance Shares. The value of each is weighted equally. This provides an even balance with respect to the
different attributes and timing associated with each type of award. Annual awards of all three components are made to
EMIP participants, including the NEOs.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
The following is a summary of the three components of our long-term incentive compensation program as in effect for
2023:
Standard Vesting
Provision
Accelerated Vesting Provisions
Stock Options
• Vest ratably
over 3 years
• Full vesting upon death or disability.
• Full vesting upon retirement for awards granted since 2021.
1/3
Restricted
Stock Units
(RSUs)
1/3
Performance
Shares
1/3
Pro-rata vesting upon retirement, for awards granted prior to
2021.
• Full vesting in the event of a change in control, if
(i) replacement awards are not provided or (ii) replacement
awards are provided and there is a subsequent qualifying
termination.
• Vest in full
after 3 years
• Full vesting upon death or disability.
• Full vesting upon retirement for awards granted since 2021.
Pro-rata vesting upon retirement, for awards granted prior to
2021.
• Full vesting in the event of a change in control, if
(i) replacement awards are not provided or (ii) replacement
awards are provided and there is a subsequent qualifying
termination.
• Vest at target upon death or disability.
• Full vesting upon retirement, based on actual performance
for the applicable 3-year performance period, for awards
granted since 2021. Pro-rata vesting upon retirement,
based on actual performance for the applicable 3-year
performance period, for awards granted prior to 2021.
• Vest at target in the event of a change in control, if
(i) replacement awards are not provided or (ii) replacement
awards are provided and there is a subsequent qualifying
termination for awards granted since 2020.
• Vest based on
performance
during the
applicable
3-year
performance
period
Total Employees Receiving
Grant in 2023
17 employees, including
NEOs, all EMIP
participants and other
senior leaders
586 employees, including
NEOs, all EMIP
participants, other senior
leaders, managers and
significant contributors,
regardless of their
position within Lincoln
Electric
11 employees, including
NEOs and all EMIP
participants
PERFORMANCE SHARES
Our long-term incentive compensation program includes grants of Performance Shares, which are designed to offer
award opportunities aligned with the long-term performance of Lincoln Electric. Target share amounts are set each year
at the beginning of a three-year performance cycle based on a 7-day historical average of the stock price, up to and
including the grant date. Because awards are made each year and because each award relates to a three-year
performance cycle, three different cycles will be running at any point in time. The percentage of the target shares
actually paid at the end of the applicable three-year cycle will be based upon achievement of three-year company
performance as interpolated against pre-established performance thresholds. Each plan has performance thresholds
with percentage payouts attributable to those thresholds ranging from 0% to 200% of target. The Committee retains
discretion to modify payments to any participant, to modify targets and/or to modify the performance thresholds (up or
down).
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
71
EXECUTIVE COMPENSATION
PERFORMANCE SHARES FINANCIAL METRICS
The Committee annually reviews and approves the performance metrics that are tied to the Performance Shares. For
the open performance cycles, the Performance Shares’ two financial metrics are as follows:
Weighting
Performance Metric
Measurement
Adjusted
Net Income
• Absolute metric based on the growth in Adjusted Net Income for Compensation
Purposes over the 3-year performance period versus goals set at the beginning of the
performance cycle.
• For the 2021 to 2023 performance cycle the target is based on growth above
$238,130,000 (which was the Adjusted Net Income for Compensation Purposes for
2020, when the 2021 to 2023 performance cycle was set).
• For the 2021 to 2023 performance cycle, to pay 100% of target, Adjusted Net Income
for Compensation Purposes over the 3-year cycle must be at or above 140% of
$238,130,000 (or $333,382,000).
Return on
Invested Capital
• Relative metric that is derived based on our 3-year average ROIC for Compensation
Purposes relative to our proxy peer group.
• For the 2021 to 2023 performance cycle the target is based on achieving the 65th
percentile in 3-Year Average ROIC for Compensation Purposes relative to our peers.
50%
50%
From time to time, the Committee has considered and approved certain limited adjustments to reported net income
(both positive and negative) in determining achievement of performance against the thresholds. Each adjustment is
reviewed in detail before it is made. The types of adjustments the Committee has considered include: rationalization
charges, certain asset impairment charges, the gains and losses on certain transactions including the disposal of certain
assets and other special items, which generally align with the special items disclosed in the Adjusted Net Income table
in Appendix A. To the extent an adjustment relates to restructuring or rationalization charges that are intended to
improve organizational efficiency, a corresponding charge (equal to the adjustment) is amortized against future years’
adjusted net income until that adjustment is fully offset against the intended savings (generally this amortization
occurs over a three-year period).
In 2022, the Committee approved excluding the impact of the acquisition of Fori, which was acquired December 1, 2022,
from the 2022 ROIC calculation and related comparisons to our proxy peer group. The acquisition of Fori included the
closure of a $400 million senior secured term loan to assist in funding the acquisition.
PERFORMANCE THRESHOLDS
In setting the performance ranges for a new three-year period (including the 2023 to 2025 performance cycle), the
Committee considers various factors, including historical performance against established ranges, to try to achieve a
50% probability of attaining the target for any cycle. For the 2021 to 2023 Plan, the Committee did not make any
modifications to the three-year adjusted net income growth performance ranges or the three-year average ROIC relative
to peer ranges.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
TIMING FOR SETTING PERFORMANCE METRIC GOALS
Performance targets are set at the beginning of the first fiscal year in the cycle. This timing allows the Committee to see
our final financial results for the prior year and allows for more current macro-economic projections to be used.
Historical Performance Shares. The following is a summary of the historical combined Performance Shares results for the
last five completed Performance Shares cycles, including the most recently completed cycle (2021 to 2023):
Historical LTIP to Budget (Results for the last five completed Performance Shares cycles)
Average
Highest Level
Lowest Level
Results
144.4%
200.0%
94.1%
2021 to 2023 Performance Shares. For the 2021 to 2023 Performance Shares cycle, the maximum performance level for
both Adjusted Net Income for Compensation Purposes and ROIC for Compensation Purposes were exceeded, resulting in
payouts being made at 200.0% of target. As noted above, the current plan cycle contains two metrics, each with a
50% weighting.
Adjusted Net
Income Result
100%
ROIC Result
100%
Total Payout
200%
The following is a summary of each of the performance metric goals and results for the most recently completed
Performance Shares cycle (2021 to 2023):
3-Year Growth in Adjusted Net Income for Compensation Purposes
The potential payout levels as a percentage of target based on actual performance are summarized below (results are
interpolated between individual levels):
Performance Level
Threshold
Target
Maximum
2023 Actual
3-Year Growth in Adjusted Net Income
for Compensation Purposes
Payout as a %
of Target
10%
25%
40%
50%
60%
25%
50%
100%
150%
200%
124.3%
$534,208
200.0%
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
73
EXECUTIVE COMPENSATION
Lincoln Electric’s Adjusted Net Income for Compensation Purposes over the three-year period increased 124.3% to
$534 million, which generated a 100% of target payout for this metric after accounting for the weighting of the financial
metric.
Adjusted Net
Income Result
200%
Performance
Weighting
50%
Payout on Adjusted
Net Income
Component
100%
3-Year Average ROIC for Compensation Purposes Relative to LECO Peer Group
The potential payout levels as a percentage of target based on actual performance are summarized below (results are
interpolated between individual levels):
Performance Level
%ile Rank in Peer Group
ROIC Result
Payout as a % of Target
3-Year Average ROIC for Compensation Purposes
Relative to LECO Peer Group
Threshold
Target
Maximum
2023 Actual
40th %ile
50th %ile
65th %ile
70th %ile
80th %ile
94th %ile
11.9%
12.9%
15.5%
15.6%
17.6%
24.1%
25%
50%
100%
150%
200%
200%
Lincoln Electric’s three-year average ROIC for Compensation Purposes, as compared to its peer group, was at the 89th
percentile, which generated a 100% of target payout for this metric after accounting for the weighting of the financial
metric.
ROIC Result
200%
Performance
Weighting
50%
Payout on
ROIC Component
100%
The following chart shows the target and maximum number of shares of common stock that may be issued for the 2021
to 2023 Performance Shares based on actual performance. Combining the payouts for both metrics, the resulting final
payout for the 2021 to 2023 Performance Shares was 200.0% of the target award opportunity.
NEO
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
Target Award
Opportunity
(# of shares)
Maximum Award Opportunity
Based on Thresholds
(# of shares)
Actual
Performance Share
Payout %
Actual Award
(# of shares)
15,243
3,271
2,606
1,995
1,378
30,486
6,542
5,212
3,990
2,756
200.0%
200.0%
200.0%
200.0%
200.0%
30,486
6,542
5,212
3,990
2,756
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
2023-2025 PERFORMANCE SHARES
In evaluating 2023 long-term incentive compensation (at the beginning of 2023), the Committee reviewed 2022
compensation versus the competitive benchmarks. The Committee concluded that overall the long-term incentive
compensation program for the NEOs remained on average above the 50th percentile target but still within the
competitive framework. In order to maintain similar positioning within the competitive framework, the NEO’s received
the following increases in annual LTI targets; 12.8% for Mr. Mapes, 10.8% for Mr. Hedlund, 10.8% for Mr. Bruno, 11.7%
for Ms. Ansberry and 12.4% for Ms. Kuhrt. All of these awards are subject to our Recovery of Funds Policy, which is
discussed below. The Performance Shares financial metrics for the 2023 to 2025 performance cycle remained consistent
with prior years: 50% is based on the growth in Adjusted Net Income for Compensation Purposes over the 3-year
performance period and 50% is based on our 3-year average ROIC for Compensation Purposes relative to our proxy peer
group. Additionally, the performance ranges for the 2023 to 2025 performance cycle align with the ranges outlined
above in analysis of the actual Performance Share payout for the 2021 to 2023 Performance Share cycle. For more
information about the quantities of the 2023 stock option, RSU and Performance Share awards actually granted to the
NEOs, see the 2023 Grants of Plan-Based Awards table and the Outstanding Equity Awards at 2023 Fiscal Year-End table
(and their related narrative disclosure) below.
2023 PROMOTION RSU AND STOCK OPTION AWARDS
In August 2023, in connection with the announced CEO transition plan, the Committee approved an award of $500,000
in RSUs that in general will vest in full after three years and $500,000 in stock options that in general vest ratably over 3
years. The grants were designed to compensate Mr. Hedlund for his assumption of additional duties in anticipation of
his new position.
2024 LONG-TERM INCENTIVE ARRANGEMENTS
In August 2023, in conjunction with the announced CEO transition plan, the 2024 EMIP target award for Mr. Mapes was
reduced to $5,643,200 for his role as Executive Chair and the 2024 EMIP target award for Mr. Hedlund was increased to
$4,787,100 for his role as CEO effective January 1, 2024. In evaluating 2024 long-term incentive compensation (at the
beginning of 2024), the Committee reviewed 2023 compensation versus the competitive benchmarks. The Committee
concluded that overall the long-term incentive compensation program for the NEOs remained on average above the
50th percentile target but still within the competitive framework. Excluding Mr. Mapes and Mr. Hedlund, the Committee
adjusted 2024 long-term incentive compensation opportunities for the NEOs on average 4.2%, placing their LTI targets
above the 50th percentile, however still within the competitive framework.
Valuation of Equity Awards. We use standard valuation methods to convert long-term incentive compensation values to
shares upon the grant date. These methods consider a 7-day historical average of our stock price, up to and including
the grant date, for RSUs and Performance Shares and the grant date Black-Scholes valuation for stock options.
Normal Cycle and Out-of-Cycle Equity Awards. The Committee has discretion in awarding grants to EMIP participants and
does not delegate its authority to management, nor does management select or influence the award dates.
Occasionally, the Committee may approve limited, out-of-cycle special awards for specific business purposes or in
connection with executive promotions or the hiring of new executive employees. However, the date used for normal
cycle awards to all EMIP participants, including the NEOs, is the date of a regularly scheduled Committee meeting,
which is fixed well in advance and generally occurs at the same time each year.
The Committee has approved delegated authority to the CEO to designate awards through 2024 to certain employees
under our equity plan, subject to specific limits established. The CEO can only grant RSU awards and cannot grant
awards to any executive officers, Section 16 officers or greater-than-10% beneficial owners of the Company, and such
awards must be granted per the agreements and vesting terms already approved by the Committee.
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EXECUTIVE COMPENSATION
Other Arrangements, Policies and Practices
OVERVIEW OF BENEFITS
We intend to provide a competitive group of benefits for all of our employees targeted at the 50th percentile of the
market. Some aspects of our benefit programs are considered non-traditional due to their relationship with our pay for
performance and incentive-based philosophies. For example, the premiums for Lincoln Electric-provided medical
coverage are primarily paid by employees, including the NEOs, on a pre-tax basis. Premiums for dental coverage, which
is a voluntary benefit, are 100% paid by employees. Life insurance coverage paid fully by Lincoln Electric is set at
$50,000 per employee, including the NEOs, although employees may purchase additional insurance at their own cost.
The NEOs participate in this same cost-sharing approach. We attempt to balance our various non-traditional programs
(such as those with a significant portion of the cost borne by the employee) with more traditional programs.
We also provide accidental death and dismemberment benefits to officers, due to the significant amount of travel
required in their jobs. Under this program, the premiums of which are paid by the Company, a participant’s beneficiary
would receive a payment of five times annual total cash compensation up to a maximum of $3,000,000 for executive
officers and $2,000,000 for other officers upon an officer’s accidental death. The policy also provides dismemberment
benefits of up to 100% of the death benefit in the event an officer is permanently and totally disabled as a result of an
accident, and it provides for medical evacuation coverage in the event of an accident.
PERQUISITES
Consistent with our pay for performance philosophy, we offer limited perquisites. We pay for an annual physical for
officers and other senior management to preserve our investment in them by encouraging them to maintain healthy
lifestyles and be proactive in preventative care. We also make available financial planning services to certain officers,
enabling them to concentrate on business matters rather than on personal financial planning. However, the cost of
these financial planning services is included in the income of the participants. We also pay the cost of certain club dues
for some officers to encourage social interaction with peers from other companies, local leadership in the community
and to provide the ability to hold business meetings at a convenient offsite location. All personal expenses are borne
entirely by the executive and the club dues are included in the income of the participants. Different perquisites are
provided from time to time to non-U.S. based executives; however, they are customary and reasonable in nature and
amount relative to local market practices (for example, a car lease). Company-paid travel expenses are primarily for
business purposes, but occasionally spouses or other guests may accompany our executive officers on business trips.
The aggregate incremental cost of such personal travel is attributed to the applicable NEO.
RETIREMENT PROGRAMS
Retirement benefits are provided to our NEOs through the following programs:
The Lincoln Electric Company Employee Savings Plan (401(K) Plan)
• Each eligible employee of The Lincoln Electric Company and certain affiliate companies is eligible to receive up to 6%
of annual compensation in Company contributions through:
• matching employer contributions equal to 100% of before-tax contributions made to the 401(k) Plan, but not in
excess of 3% of annual compensation; and
• automatic employer contributions equal to 3% of annual compensation;
• Matching and automatic contributions are 100% vested when made;
• Certain employees affected by the cessation of accruals under the defined benefit pension plan that we previously
maintained are also eligible to receive employer contributions equal to 6% of annual compensation for a minimum
period of five years, up to the end of the year in which they complete 30 years of service; and
• All of the NEOs deferred amounts under the 401(k) Plan in 2023.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
Restoration Plan
• Created effective January 1, 2017, this unfunded plan is maintained primarily for the purpose of providing deferred
compensation for eligible employees whose annual compensation is expected to be in excess of the Internal Revenue
Code limit on compensation (Code Limit) applicable to the 401(k) Plan;
• Each participant’s account is credited each year with deferred amounts generally as follows:
• matching employer contributions equal to 3% of annual compensation in excess of the Code Limit; and
• non-elective employer contributions equal to 3% of annual compensation in excess of the Code Limit;
• All amounts deferred are fully vested at all times;
• Certain employees affected by the cessation of accruals under the defined benefit pension plan that we previously
maintained are also eligible to receive employer contributions equal to 6% of annual compensation in excess of the
Code Limit for a minimum period of five years, up to the end of the year in which they complete 30 years of service;
• Upon a separation from service prior to age 55, distribution of the account will be made in a single lump sum on the
first business day of the seventh month immediately following the separation from service;
• Upon a separation from service on or after age 55, distribution of the account will be made or commence on the first
business day of the seventh month immediately following the separation from service in the form of (1) a single lump
sum payment; or (2) substantially equal annual installments over a period of at least two but not more than 15 years,
as elected; and
• All NEOs participated in the Restoration Plan in 2023.
Amended and Restated 2005 Deferred Compensation Plan for Executives (Top Hat Plan)
• Participants can defer current income on a pre-tax basis, receiving tax-deferred returns on those deferrals
• Up to 80% of base salary and/or annual bonus can be deferred; and
• Up to 100% of RSUs or Performance Shares can be deferred;
• For cash deferrals, 27 total investment options available, 26 of which mirror the funds available under the
401(k) Plan, plus the Moody’s Corporate Bond Average Index (which provides ‘‘above market’’ earnings as reported in
the Summary Compensation Table);
• RSUs and Performance Shares that are deferred are deemed invested in a Lincoln Electric Stock fund; these deferrals
can be reallocated to other investment options on the later of 6 months after the date on which the amounts are
allocated to the participant’s account or the date the participant has satisfied his or her stock ownership guidelines;
• Plan includes a recovery of funds provision consistent with the requirements of Dodd-Frank;
• Distributions are permitted in the event of a separation from service, disability, death, change in control or
unforeseeable emergency;
• Distributions can also be made at a specified time or under a fixed schedule;
• Distributions may be made in a lump-sum, or by payment in five, ten or fifteen annual installments; and
• As of December 31, 2023, there were 19 active employees eligible to participate in the Top Hat Plan.
More information on these programs can be found in the 2023 Deferred Compensation Benefits section.
CHANGE IN CONTROL ARRANGEMENTS
We have entered into change in control agreements with all of our NEOs. The agreements are designed generally to help
assure continued management in the event of a change in control of Lincoln Electric.
The change in control agreements are operative only if a change in control occurs and payments are made if the
officer’s employment is terminated under certain circumstances (or if the officer terminates employment due to certain
adverse employment changes). The agreements provide our NEOs with the potential for continued employment
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
77
EXECUTIVE COMPENSATION
following a change in control, which helps to retain these executives and provide for management continuity in the
event of an actual or threatened change in control of Lincoln Electric. They also help ensure that our executives’
interests remain aligned with shareholders’ interests during a time when their continued employment may be in
jeopardy. For a more detailed discussion of our change in control agreements, see Termination and Change in Control
Arrangements below. Outside of these change in control agreements, we do not maintain written employment or other
severance agreements for U.S.-based employees.
RECOVERY OF FUNDS POLICIES
We maintained a historical clawback policy, called the Recovery of Funds Policy, during 2023. We adopted a new
Clawback Policy, effective October 2, 2023, to comply with the requirements of new SEC regulations and Nasdaq listing
standards. We also amended, restated and continued the Recovery of Funds Policy (and re-named it the Supplemental
Recovery of Funds Policy), effective October 2, 2023, to work in tandem with and as a supplement to the Clawback
Policy. Our Clawback Policy and the Recovery of Funds Policy are applicable to all of our executive officers, including our
NEOs.
The Clawback Policy provides for the reasonably prompt recovery (or clawback) of certain excess incentive-based
compensation received during an applicable three-year recovery period by current or former executive officers in the
event we are required to prepare an accounting restatement due to our material noncompliance with any financial
reporting requirement under the securities laws. Triggering events include accounting restatements to correct an error
in previously issued financial statements that is material to such previously issued financial statements, or that would
result in a material misstatement if the error were corrected in the current period or left uncorrected in the current
period. Excess incentive-based compensation for these purposes generally means the amount of incentive-based
compensation received (on or after October 2, 2023) by such executive officer that exceeds the amount of
incentive-based compensation that would have been received by such executive officer had it been determined based
on the restated amounts, without regard to any taxes paid. Incentive-based compensation potentially subject to
recovery under the mandatory accounting restatement provisions of the Clawback Policy is generally limited to any
compensation granted, earned or vested based wholly or in part on the attainment of one or more financial reporting
measures.
In general, we may utilize a broad range of recoupment methods under the Clawback Policy for mandatory accounting
restatement clawbacks. The Clawback Policy does not condition such clawback on the fault of the executive officer, but
we are not required to clawback amounts in limited circumstances where the Compensation and Executive
Development Committee has made a determination that recovery would be impracticable and (1) we have already
attempted to recover such amounts but the direct expense paid to a third party in an effort to enforce the Clawback
Policy would exceed the amount to be recovered, (2) the recovery of amounts would violate applicable home country
law, or (3) the recovery would likely cause the non-compliance of a tax-qualified retirement plan under the Internal
Revenue Code of 1986, as amended, and applicable regulations. Operation of the mandatory accounting restatement
provisions of the Clawback Policy is subject to a brief phase-in process during the first few years after its effectiveness.
We may not indemnify any such executive officer against the loss of such recovered compensation in the event of a
mandatory accounting restatement.
We also continue to maintain the Supplemental Recovery of Funds Policy, which in general provides for compensation
recovery on terms substantially similar to the Clawback Policy, but specifically for compensation that is not covered by
or subject to the Clawback Policy (for example, that pre-dates the scope or effectiveness of the Clawback Policy). The
Supplemental Recovery of Funds Policy is also triggered if we are required to prepare an accounting restatement due to
our material noncompliance with any financial reporting requirement under the securities laws, and applies to our
current or former executive officers and their incentive-based compensation (as described above) received during an
applicable three-year recovery period.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
ANTI-HEDGING/PLEDGING POLICY
Consistent with our philosophy to encourage long-term investment in our common stock, our Directors, executive
officers and certain other employees are prohibited from engaging in any speculative transactions involving our
securities, including buying or selling puts or calls, or engaging in any derivative or hedging transaction that has the
effect of limiting or hedging economic exposure with respect to such person’s position in our securities, short sales and
margin purchases. In addition, our insider trading policy prohibits future pledging of Lincoln Electric securities by our
Directors, executive officers and certain other employees. There are no pledges of our common stock in place for any of
our Directors or executive officers.
STOCK OWNERSHIP GUIDELINES
In keeping with our philosophy that officers should maintain an equity interest in Lincoln Electric, we have stock
ownership guidelines for officers. The guidelines were reviewed in 2021 and no changes were recommended based on a
review of our peer group. Under the current guidelines, our officers are required to own and hold a certain number of
our common shares, currently at the levels set forth in the table below:
Executive Group
Chief Executive Officer1
Executive Vice Presidents2
Senior Vice Presidents and all other Executive Officers3
1
2
3
Mr. Hedlund (for 2024) and Mr. Mapes (for 2023).
Includes Mr. Bruno, Mr. Hedlund (for 2023), Ms. Ansberry, Ms. Kuhrt and one other EMIP participant.
Includes Mr. Mapes (for 2024) and other EMIP participants.
Ownership Guideline
5 times base salary
3 times base salary
2 times base salary
Each officer has five years to satisfy his or her applicable stock ownership guideline. An officer must satisfy the
applicable stock owner- ship guideline before he or she is permitted to sell shares, including shares issued as a result of
RSUs vesting or Performance Shares vesting (other than shares withheld to cover taxes) and shares obtained from the
exercise of stock options (other than shares withheld to cover exercise cost and taxes). Unless an officer is promoted
into a higher guideline level, the stock ownership guideline will reset every 5 years utilizing updated base pay and stock
price information. RSU awards count towards an officer’s stock ownership amount, however common shares underlying
stock options, Performance Shares and shares held in another person’s name (including a relative) do not. As of
December 31, 2023, all of our NEOs met the applicable stock ownership guidelines.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
79
EXECUTIVE COMPENSATION
DEDUCTIBILITY OF COMPENSATION
Our general philosophy has historically been to qualify future compensation for tax deductibility wherever applicable
and appropriate. Although a portion of the amount we recorded as compensation to our NEOs in 2023 was
non-deductible, this did not have a significant impact to our income tax position.
As part of the 2017 Tax Cuts and Jobs Act (the ‘‘Tax Reform Act’’), the ability to rely on the performance-based
compensation exception under Section 162(m) of the U.S. Internal Revenue Code (‘‘Section 162(m)’’) was generally
eliminated, and the limitation on deductibility generally was expanded to include all NEOs (as well as certain former
officers). As a result of the Tax Reform Act, after 2017 and subject to certain grandfathered provisions, we are no longer
able to deduct any compensation paid to our NEOs in excess of $1 million.
COMPENSATION COMMITTEE REPORT
The Compensation and Executive Development Committee has reviewed and discussed the Compensation Discussion
and Analysis contained in this Proxy Statement with our management and, based on this review and discussion,
recommends that it be included in our Annual Report on Form 10-K for the year ended December 31, 2023 and this
Proxy Statement.
By the Compensation and Executive Development Committee:
Michael F. Hilton
CHAIR
Marc A. Howze
Kathryn Jo Lincoln
Phillip J. Mason
Hellene S. Runtagh
Kellye L. Walker
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Executive Compensation Tables
SUMMARY OF 2023 COMPENSATION ELEMENTS
Competitive
Target
Financial
Metrics Used
When the
2023
Amount
Was Set
The Period to
Which the
Amount
Relates
Where
Reported
in the SCT1
Below Market —
Beginning
of 2023
2023
Salary column
Purpose
Rewards responsibility,
experience and
individual
performance
Short-Term
Base Pay
Annual Bonus
(EMIP)
Rewards strong annual
financial results and
individual
performance
Above Market
(target total
cash
compensation)
Adjusted
Revenue2,
EBITB2 and
AOWC/Sales2
Beginning
of 2023
2023
Performance
Beginning
of 2023
2023 Based
Award
Non-Equity
Incentive Plan
Compensation
column
Option
Awards
column
Beginning
of 2023
2023 Based
Award
Stock Awards
column
—
—
At Market
Stock Options
Rewards the creation
of shareholder value
Long-Term
RSUs
Performance
Shares
Benefits other
than Pension
Rewards the creation
of shareholder value
and strong long-term
financial results
Rewards the creation
of long-term growth
and the efficient use of
capital
Includes 401(k)
contributions,
Restoration Plan
contributions,
insurance and
standard expatriate
benefits
Adjusted Net
Income2
Growth and
ROIC2
Beginning
of 2023
2023 through
2025
Performance
Stock Awards
column
—
Various
2023
All Other
Compensation
column
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
column
All Other
Compensation
column
Both
Pension
Benefits
Includes above-market
earnings in the Top
Hat Plan
At Market
—
Various
For
above-market
earnings,
shows 2023
amounts
Perquisites
Meets specific business
needs—includes
financial planning,
annual physical and
certain club dues
1
2
Summary Compensation Table.
Financial metrics used for compensation purposes are defined in Appendix A.
—
Various
2023
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
81
EXECUTIVE COMPENSATION
2023 SUMMARY COMPENSATION TABLE
This table details total compensation for our NEOs for 2023, 2022 and 2021.
Name and Principal
Position
Year
Salary
($)
Stock
Awards
($)1
Option
Awards
($)1
Non-Equity
Incentive Plan
Compensation
($)2
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)3
All Other
Compensation
($)4
Total
($)
Christopher L. Mapes
Chair, President
and Chief Executive Officer
(through December 31,
2023)
Gabriel Bruno
Executive Vice President,
Chief Financial Officer
and Treasurer
Steven B. Hedlund
Executive Vice President,
Chief Operating Officer
(through December 31,
2023)
Jennifer I. Ansberry
Executive Vice
President, General
Counsel and Secretary
Michele R. Kuhrt
Executive Vice President,
Chief Human Resources
Officer
2023
1,107,600
4,196,532
2,068,853
2,777,943
138,395
320,347
10,609,670
2022
1,065,000
3,672,156
1,833,338
3,088,500
185,377
252,107
10,096,478
2021
1,030,000
3,483,636
1,766,662
2,569,567
157,838
206,117
9,213,820
2023
540,000
852,046
420,001
979,026
2022
500,000
759,474
379,178
975,000
2021
445,000
747,554
379,164
698,528
2023
798,833
1,469,165
980,006
1,890,704
2022
564,584
962,817
340,000
1,317,851
2021
440,000
595,576
302,086
659,373
2023
468,000
524,038
258,324
731,351
2022
432,500
463,212
231,242
684,000
2021
424,000
455,938
231,257
530,871
2023
451,000
380,096
187,330
689,797
2022
438,000
333,902
166,665
830,000
2021
413,000
314,928
159,669
546,773
678
643
364
—
—
—
—
—
—
—
—
—
197,964
2,989,715
159,464
2,773,759
119,322
2,389,932
194,930
5,333,638
186,452
3,371,704
225,282
2,222,317
158,939
2,140,652
130,901
1,941,855
114,018
1,756,084
170,874
1,879,097
131,282
1,899,849
109,640
1,544,010
1
The amounts reported for 2023 reflect the grant date fair value under FASB ASC Topic 718 for the RSU, Performance Share and stock option awards in 2023. The grant
date fair value disclosed for Performance Share awards is based on target performance. Assumptions used in the calculation of these amounts are included in footnote
10 to our audited financial statements for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on February 27, 2024.
The amounts shown for stock awards for 2023 represent RSU awards as follows: Mr. Mapes $2,098,266, Mr. Hedlund $982,256, Mr. Bruno $426,023, Ms. Ansberry $262,019,
and Ms. Kuhrt, $190,048. The amounts shown also include Performance Shares at target as follows: Mr. Mapes $2,098,266, Mr. Hedlund $486,909, Mr. Bruno $426,023,
Ms. Ansberry $262,019, and Ms. Kuhrt, $190,048.
The maximum Performance Share award amount with respect to each of the NEOs for 2023 is shown in the table below.
The amounts reported reflect the grant date fair value under FASB ASC Topic 718 for the Performance Share awards
based on maximum performance.
Name
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
Year
2023
2023
2023
2023
2023
Maximum Payout
(# of Performance Shares)
Maximum Grant Date
Fair Value Payout
23,848
4,842
5,534
2,978
2,160
$4,196,532
$ 852,046
$ 973,818
$ 524,038
$ 380,096
2
The amounts shown for 2023 represent payments under our annual bonus (EMIP).
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
3
The amounts shown for 2023 represent the difference in earnings under the Moody’s Corporate Bond Index fund in our Top Hat Plan and a hypothetical rate.
2023 INCREASE IN PENSION VALUE & PREFERENTIAL EARNINGS (TOP HAT PLAN)
Name
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
Difference in 2023
Earnings Credited
in the Top Hat Plan
($)
Moody’s Corporate
Bond Index
Earnings
($)
Hypothetical
Market
Rate
($)*
138,395
1,149,566
1,011,171
678
—
—
—
5,610
4,932
—
—
—
—
—
—
*
This rate is specified by the SEC rules for proxy disclosure purposes and is based on 120% of the applicable federal long-term rate, compounded monthly for 2023.
4
The amounts shown for 2023 are comprised of the following:
2023 ALL OTHER COMPENSATION
Other Benefits and Perquisites*
Company
Retirement
Contributions
($)a
Travel
Insurance
Premiums
($)
Financial
Planning
($)
Physical
Examination
($)
Club
Dues
($)
Travel and
Other
Personal
Benefits
($)b
Standard
Expatriate
Benefits
($)c
Total All
Other
Compensation
($)
251,766
181,800
127,001
138,240
153,720
454
454
454
454
454
15,052
12,885
12,733
15,750
12,943
2,051
37,236
13,788
2,825
—
— 35,702
4,495
3,757
—
—
—
913
—
—
—
—
320,347
197,964
18,127
194,930
—
—
158,939
170,874
Name
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
*
The methodology for computing the aggregate incremental cost for the amounts is below:
a
b
c
Includes amounts contributed to both the 401(k) Plan and the Restoration Plan
Includes the aggregate incremental cost of personal travel expenses attributable to the NEOs.
The expatriate benefits shown relate to Mr. Hedlund's previous international assignment and are provided to all U.S. employees who take an international
assignment. Amounts are converted to U.S. dollars on a monthly basis based on a month-end conversion price, in local currency, as reported by Bloomberg.
The conversion price for Pound Sterling was between £1.24 to $1.00 during the period in 2023 that Mr. Hedlund was receiving tax services associated with his
previous expatriate assignment under our standard expatriate package for all employees.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
83
EXECUTIVE COMPENSATION
2023 GRANT OF PLAN-BASED AWARDS
The following table provides information relating to plan-based awards granted in 2023 to our NEOs.
Name
Christopher
L. Mapes
Gabriel
Bruno
Steven B.
Hedlund
Jennifer I.
Ansberry
Michele R.
Kuhrt
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards1
Estimated Future Payouts
Under Equity Incentive
Plan Awards2
Grant
Type
Grant Date
Threshold
[$]
Target
[$]
Maximum
[$]
Threshold
[#]
Target
[#]
Maximum
[#]
EMIP
2/15/2023
0 1,606,000 3,212,000
Options 2/15/2023
RSUs
2/15/2023
PSUs
2/15/2023
EMIP
2/15/2023
0
566,000 1,132,000
Options 2/15/2023
RSUs
2/15/2023
PSUs
2/15/2023
EMIP
2/15/2023
0 1,093,064 2,186,128
Options 2/15/2023
RSUs
2/15/2023
PSUs
2/15/2023
Options
8/1/2023
RSUs
8/1/2023
EMIP
2/15/2023
0
440,000
880,000
Options 2/15/2023
RSUs
2/15/2023
PSUs
2/15/2023
EMIP
2/15/2023
0
415,000
830,000
Options 2/15/2023
RSUs
2/15/2023
PSUs
2/15/2023
0 11,924
23,848
0
2,421
4,842
0
2,767
5,534
0
1,489
2,978
0
1,080
2,160
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)3
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)4
Exercise
or Base
Price of
Option
Awards
($/Sh)
Grant Date
Fair Value
of Stock
and Option
Awards
($)5
11,924
2,421
2,767
44,761 $175.97 2,068,853
2,098,266
2,098,266
9,087 $175.97
420,001
426,023
426,023
10,385 $175.97
479,995
486,909
486,909
9,227 $200.14
500,011
2,475
495,347
1,489
1,080
5,589 $175.97
258,324
262,019
262,019
4,053 $175.97
187,330
190,048
190,048
1
2
3
The performance-based amounts shown represent the range of cash payouts (from zero to the maximum amount listed) for 2023 under the EMIP. Payments are based on
the achievement of company financial performance and the NEO’s individual performance. Target awards are set by the Committee in the first quarter each year. Actual
payment amounts are determined by the Committee in the first quarter of the following year. The targets shown above are pursuant to the Annual Bonus (EMIP)
Formula described in the CD&A (which allows for potential payouts of up to 200% of target).
These columns show the potential number of shares of our common stock to be paid out to our NEOs under our Performance Shares (PSUs) at threshold, target and
maximum performance. The measures and potential payouts are described in more detail in the CD&A. The grant date fair value, based on target performance for PSUs,
is included in the ‘‘Stock Awards’’ column of the Summary Compensation Table. The PSUs generally vest based on performance during the applicable performance
period. Dividend equivalents are sequestered by us until the shares underlying the PSUs are distributed, at which time the dividend equivalents are paid in cash. The
dividend rate for dividend equivalents paid on the PSUs to the NEOs is the same as for all other shareholders (in other words, it is not preferential). Recipients of PSUs
who participate in our EMIP bonus program (which includes all of the NEOs) are eligible to elect to defer all or a portion of their PSUs under our Top Hat Plan - see the
2023 Nonqualified Deferred Compensation section for a description of this plan.
The RSUs generally vest upon the recipient remaining in continuous employment for three years from the date of grant and are paid out in our common stock. Dividend
equivalents are sequestered by us until the shares underlying the RSUs are distributed, at which time the dividend equivalents are paid in cash. The dividend rate for
dividend equivalents paid on the RSUs to the NEOs is the same as for all other shareholders (in other words, it is not preferential). Recipients of RSUs who participate in
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
our EMIP bonus program (which includes all of the NEOs) are eligible to elect to defer all or a portion of their RSUs under our Top Hat Plan - see the 2023 Nonqualified
Deferred Compensation section for a description of this plan. With respect to the award of RSUs to Mr. Hedlund on August 1, 2023, this represents an additional award
approved by the Committee equal in value to $500,000 in connection with his pending appointment as President and Chief Executive Officer.
4
5
The stock options were granted at the closing price of our common shares on the date of the grant. All stock options are non-qualified for tax purposes. We value stock
options using the Black-Scholes valuation method. The stock options generally vest over a three-year period (in equal annual increments). All stock options have 10-year
terms. With respect to the award of stock options to Mr. Hedlund on August 1, 2023, this represents an additional award approved by the Committee equal in value to
$500,000 in connection with his pending appointment as President and Chief Executive Officer.
The amounts shown represent the fair value of the RSU awards, the stock option grants and the PSU awards (at target) calculated in accordance with FASB ASC Topic 718
as of the date of the grant. The actual amount, if any, realized upon the exercise of stock options will depend upon the market price of our common shares relative to the
exercise price per share of the stock option at the time of exercise. The actual amount realized upon vesting of RSUs will depend upon the market price of our common
shares at the time of vesting. The actual number and value of PSUs earned will be based upon our actual performance during the three-year long-term incentive plan
cycle and the market price at time of vesting. There is no assurance that the hypothetical full values of the awards reflected in this table will actually be realized.
NARRATIVE DISCLOSURE REGARDING 2023 SUMMARY COMPENSATION TABLE AND 2023 GRANTS OF PLAN-BASED AWARD TABLE
The following highlights the salary and annual bonus percentages of total compensation reported in the 2023 Summary
Compensation Table, based on the value of 2023 base salary and 2023 actual annual bonus (EMIP) for each of our NEOs:
Name
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
% of Base Salary and Annual Bonus
To Total Compensation
36.6%
50.8%
50.4%
56.0%
60.7%
The above percentages were based, in each case, on the value of the executive’s 2023 base salary and 2023 actual EMIP
(or annual bonus). For information regarding the amount of salary and annual bonus compensation in proportion to
total compensation, see the ‘‘Our Compensation Philosophy’’ section of the CD&A. Further, the grants made in 2023 to
the NEOs are described more fully in the CD&A, and information about the change in control severance agreements and
the amounts payable to the NEOs pursuant to those arrangements is provided under the section titled ‘‘Termination
and Change in Control Arrangements’’ in this Proxy Statement.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
85
EXECUTIVE COMPENSATION
Holdings of Equity-Related Interests
The following provides information relating to exercisable and unexercisable stock options, RSUs and Performance
Shares at December 31, 2023.
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
Option Awards
Stock Awards
Name
Christopher L.
Mapes
Gabriel
Bruno
Steven B.
Hedlund
Jennifer I.
Ansberry
Michele R.
Kuhrt
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable1
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable1
65,894
76,365
83,490
54,274
22,352
—
—
6,670
6,150
6,682
7,305
11,648
4,623
—
—
9,313
11,741
12,837
9,280
4,145
—
—
—
—
—
—
27,139
44,705
44,761
—
—
—
—
—
5,825
9,246
9,087
—
—
—
—
4,641
8,291
—
10,385
9,227
Option
Exercise
Price
($/sh)
90.70
88.44
89.63
114.27
128.03
175.97
—
85.30
90.70
88.44
89.63
114.27
128.03
175.97
—
90.70
88.44
89.63
114.27
128.03
—
175.97
200.14
Option
Expiration
Date
2/21/2028
2/18/2029
2/19/2030
2/17/2031
2/16/2032
2/15/2033
—
2/22/2027
2/21/2028
2/18/2029
2/19/2030
2/17/2031
2/16/2032
2/15/2033
—
2/21/2028
2/18/2029
2/19/2030
2/17/2031
2/16/2032
—
2/15/2033
8/1/2033
11,124
—
89.63
2/19/2030
7,104
2,819
—
3,954
5,514
7,118
4,904
2,032
—
3,553
5,639
5,589
—
—
—
2,454
4,064
4,053
114.27
128.03
175.97
90.70
88.44
89.63
114.27
128.03
175.97
2/17/2031
2/16/2032
2/15/2033
2/21/2028
2/18/2029
2/19/2030
2/17/2031
2/16/2032
2/15/2023
Grant Date
2/21/2018
2/18/2019
2/19/2020
2/17/2021
2/16/2022
2/15/2023
4/24/2013
2/22/2017
2/21/2018
2/18/2019
2/19/2020
2/17/2021
2/16/2022
2/15/2023
4/24/2013
2/21/2018
2/18/2019
2/19/2020
2/17/2021
2/16/2022
5/9/2022
2/15/2023
8/1/2023
2/19/2020
2/17/2021
2/16/2022
2/15/2023
2/21/2018
2/18/2019
2/19/2020
2/17/2021
2/16/2022
2/15/2023
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)2
—
—
—
15,243
14,341
11,924
2,879
—
—
—
—
3,271
2,966
2,421
3,663
—
—
—
2,606
2,660
2,061
2,767
2,475
—
1,995
1,809
1,489
—
—
—
1,378
1,304
1,080
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)3
—
—
—
3,314,743
3,118,594
2,592,993
626,067
—
—
—
—
711,312
644,986
526,471
796,556
—
—
—
566,701
578,444
448,185
601,712
538,214
—
433,833
393,385
323,798
—
—
—
299,660
283,568
234,857
Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units or
Other Rights
that Have
Not Vested
(#)4
Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units,
or Other Rights
That Have
Not Vested
($)3
—
—
—
—
—
—
—
—
28,682
23,848
6,237,188
5,185,986
—
—
—
—
—
—
—
—
—
—
—
5,932
4,842
1,289,973
1,052,941
—
—
—
—
—
5,320
—
5,534
—
—
—
3,618
2,978
—
—
—
—
2,608
2,160
—
—
—
—
—
1,156,887
—
1,203,424
—
—
—
786,770
647,596
—
—
—
—
567,136
469,714
1
2
3
Stock options generally vest in three equal annual installments, commencing on the first anniversary of the date of the grant.
Amounts shown in this column represent RSU awards. The RSU awards generally vest in full three years from the date of grant. The RSU awards granted to Mr. Bruno
and Mr. Hedlund in 2013 vests over seven years following each of their attainment of age 55.
The amounts shown in these columns represent the value of RSU and Performance Share awards granted pursuant to our 2006 Equity and Performance Incentive Plan,
and our 2015 and 2023 Equity and Incentive Compensation Plans. Value is calculated using the close price of our common stock on the last trading day of 2023.
86
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
4
The 2022 and 2023 Performance Shares are shown at maximum payout (200% of the target award) because the target performance level would be exceeded based on
performance through December 31, 2023. The payout can range from 0 to 200% of the target and is based upon performance during the three-year cycle ending on
December 31 of the second year following the year in which the Performance Shares were granted, as determined by the Committee. Earned Performance Shares are
generally settled in shares in the early part of the following year. See the CD&A on how Performance Share payouts are determined.
2023 OPTION EXERCISES AND STOCK VESTED TABLE
The following table provides information on stock options exercised, as well as RSUs and Performance Shares that
vested during 2023.
Name
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
Option Awards1
Stock Awards2
Number of Shares
Acquired on Exercise
(#)
Value Realized
on Exercise
($)
Number of Shares
Acquired on Vesting
(#)
157,640
20,470,981
—
21,115
8,962
7,795
—
2,392,439
981,955
812,530
44,897
12,406
10,348
5,910
5,336
Value Realized
on Vesting
($)
10,576,643
2,724,346
2,308,526
1,390,460
1,189,473
1
2
The number of shares acquired on exercise reflects the gross number of shares acquired, without considering any shares that were withheld to pay the option exercise
price and/or to satisfy tax withholding requirements. The value realized on exercise represents the gross number of shares acquired on exercise multiplied by the market
price of our common stock on the exercise date, less the per share exercise price.
The number of shares acquired on vesting reflects the gross number of shares acquired, without considering any shares that were withheld to satisfy tax withholding
requirements. The value realized on vesting for RSUs represents the gross number of shares acquired, multiplied by the closing price of our common stock on each
applicable vesting date, plus the value of dividend equivalents. The value realized on vesting for Performance Shares represents the gross number of shares acquired,
relative to the 2021-2023 performance cycle that was considered earned as of December 31, 2023 but paid out in March 2024, multiplied by the closing price of our common
stock on such date, plus the value of dividend equivalents. Amounts are not reduced to reflect any elections by our NEOs to defer receipt of RSUs or Performance Shares
award payouts into our Top Hat Plan: Mr. Mapes, 14,411 RSUs and $92,086 in dividend equivalents deferred; and Mr. Bruno, 6,542 Performance Shares and $41,803 in
dividend equivalents deferred. For more information about this deferral program, see the CD&A in the ‘‘Overview of Benefits’’ section.
2023 DEFERRED COMPENSATION BENEFITS
We maintain two nonqualified deferred compensation plans in which our NEOs are eligible to participate.
Deferred Compensation Plan (Top Hat Plan)
Our Amended and Restated 2005 Deferred Compensation Plan for Executives (Top Hat Plan) is designed to be a
‘‘top-hat’’ plan that complies with Section 409A of the Internal Revenue Code. Participation is limited to management
and highly compensated employees as approved by the Committee. A summary of the Top Hat Plan is provided in the
CD&A in the ‘‘Other Arrangements, Policies and Practices’’ section.
Restoration Plan
Our Restoration Plan is designed to provide deferred compensation for eligible employees whose annual compensation
is expected to be in excess of the Internal Revenue Code limit on compensation (Code Limit) applicable to the 401(k)
Plan. A summary of the Restoration Plan is provided in the CD&A in the ‘‘Other Arrangements, Policies and
Practices’’ section.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
87
EXECUTIVE COMPENSATION
2023 NONQUALIFIED DEFERRED COMPENSATION TABLE
The following table reflects any NEO contributions and Company contributions for 2023 to our nonqualified deferred
compensation plans.
Name
Plan Name
Christopher L. Mapes
Top Hat Plan
Restoration Plan
Gabriel Bruno
Top Hat Plan
Restoration Plan
Steven B. Hedlund
Top Hat Plan
Restoration Plan
Jennifer I. Ansberry
Top Hat Plan
Restoration Plan
Michele R. Kuhrt
Top Hat Plan
Restoration Plan
Executive
Contributions
in Last Fiscal
Year
($)
Registrant
Contributions
in Last Fiscal
Year
($)1
Aggregate
Earnings
in Last Fiscal
Year
($)
Aggregate
Withdrawals/
Distributions
($)
—
—
—
—
—
—
—
—
—
—
2,632,6013
7,044,0564
231,966
254,437
410,7325
634,4136
142,200
—
107,201
—
75,134
9,051
66,716
—
98,640
108,235
—
—
114,120
59,782
—
—
—
—
—
—
—
—
—
—
Aggregate
Balance
at Last Fiscal
Year-End
($)2
40,943,385
1,611,334
2,123,927
627,064
61,686
421,587
—
595,789
—
514,821
1
2
3
4
5
6
Amounts reported with respect to the Restoration Plan are included in compensation for 2023 in the ‘‘All Other Compensation’’ column of the Summary Compensation
Table above and are described in its footnotes.
The portions of the amount reported that relate to deferral contributions in prior years have all been reported in the Summary Compensation Table in those years to the
extent the individual was a NEO for those years.
Represents 14,411 RSUs and $92,086 in cash attributable to dividend equivalents that vested during 2023 and were deferred into the Top Hat Plan.
Of the amount reported, $138,395 is included as compensation for 2023 in the ‘‘Change in Pension Value and Nonqualified Deferred Compensation Earnings’’ column of
the Summary Compensation Table and is described in its footnotes.
Represents 2,284 Performance Shares and $14,595 in cash attributable to dividend equivalents that vested during 2023 and were deferred into the Top Hat Plan.
Of the amount reported, $678 is included as compensation for 2023 in the ‘‘Change in Pension Value and Nonqualified Deferred Compensation Earnings’’ column of the
Summary Compensation Table and is described in its footnotes.
88
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
Termination and Change in Control Arrangements
The Key Compensation Programs table below highlights the standard benefits and payments available to NEOs in the
event of a termination of employment and/or a change in control. The Termination and Change in Control Table below
reflects the estimated additional amounts of compensation each NEO would receive in the event of a termination of
employment and/or a change in control. Termination events include: a voluntary termination by the executive; normal
retirement of the executive; an involuntary, not-for-cause termination by Lincoln Electric; a for-cause termination by
Lincoln Electric; a termination upon a change in control; and a termination due to death or disability. In addition,
estimated additional compensation amounts are shown in the event of a change in control without termination of
employment. The amounts shown assume that each event occurred on December 29, 2023, the last business day of the
calendar year.
TERMINATION OF EMPLOYMENT
No written agreements exist that provide additional payments to a NEO in the event of a voluntary termination of
employment with Lincoln Electric or a termination of employment initiated by Lincoln Electric (whether for cause or
not). We do not have employment agreements or severance agreements, except for our change in control severance
agreements described below.
Pursuant to our standard employment policies, upon termination of employment, a NEO would be entitled to receive
the same benefits and payments that are generally available to salaried employees:
• Earned but unpaid base pay, up to the date
• Amounts held in the executive's account under our Top
of termination;
Hat Plan (based on the executive's election); and
• Earned and unused paid time off, up to the date
• Amounts held in the executive's account under our
of termination;
Restoration Plan.
• Vested amounts held in the executive's account
under our 401(k) Plan;
CHANGE IN CONTROL
We have entered into change in control severance agreements with our NEOs. Pursuant to our change in control
severance agreements, in the event of a ‘‘change in control,’’ if the NEO’s employment is terminated without ‘‘cause’’
(as defined in the change in control severance agreement) or the NEO terminates employment for ‘‘good reason’’ (as
defined in the change in control severance agreement) during the severance period (as described below) (or for certain
other employment terminations prior to and related to the change in control, as described in the change in control
severance agreement), we will make severance payments and provide certain benefits as indicated in the Key
Compensation Programs table below.
The severance period commences on the date of the first occurrence of a change in control and ends on the earlier of
(a) the second anniversary of the change in control, or (b) the executive’s death. Our NEOs are required to abide by
certain restrictive covenants and execute a release of claims in order to receive certain severance payments and
benefits under the change in control severance agreements.
The following events in general would constitute a change in control:
• Any individual, entity or group is or becomes the
• Certain reorganizations, mergers or consolidations, or
beneficial owner of 30% or more of the combined voting
power of the then- outstanding voting stock of Lincoln
Electric;
the sale or other disposition of all or substantially all of
the assets of Lincoln Electric, or certain other corporate
transactions are consummated; or
• A majority of the Board ceases to be comprised of
• Approval by the shareholders of a complete liquidation
incumbent Directors;
or dissolution of Lincoln Electric.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
89
EXECUTIVE COMPENSATION
KEY COMPENSATION PROGRAMS
Voluntary
Termination/
Termination
with Cause
Involuntary
Termination/
Termination
without Cause
Normal
Retirement1
Change in Control
(with Termination)2
Change in Control
(No Termination)
Severance
None
Company has
discretion
None
Annual
Bonus (EMIP)
Forfeited
Forfeited
Pro-rata portion of
EMIP3
Forfeited
Forfeited
Long-Term
Incentive
Plan
(Performance
Shares)
Full vesting of
Performance
Shares, based
on actual
performance
Stock
Options
Unvested stock
options
forfeited
Unvested stock
options
forfeited
Entitled to
exercise vested
stock options
for a period
of three
months after
termination4,5
Entitled to
exercise vested
stock options
for a period
of three
months after
termination4,5
Accelerated
vesting of any
unvested stock
options with right
to exercise such
vested options for
the remaining
period of the
original 10-year
term5
Lump-sum
payment equal to
the sum of base
pay and bonus as
described in the
severance
agreement times
three for the CEO
and times two for
other NEOs
Pro-rata portion of
EMIP payment
equal to the
greater of the
actual or target
amount
Accelerated vesting
of Performance
Shares at target, if
replacement award
provided and
subsequent
qualifying
termination
Accelerated
vesting of
unvested stock
options, if
replacement
award provided
and subsequent
qualifying
termination
Entitled to exercise
vested stock
options for the
remaining period
of the original
10-year term5
None
Pro-rata EMIP
payment equal to
the greater of the
actual or target
amount
No accelerated
vesting if
replacement award
provided and
continued
employment
Accelerated vesting
of Performance
Shares granted prior
to the change in
control at target, if
no replacement
award provided
No accelerated
vesting if
replacement award
provided and
continued
employment
Accelerated vesting
of unvested stock
options granted
prior to change in
control, if no
replacement award
provided
Death or
Disability
None
Pro-rata
portion of
EMIP3
Accelerated
vesting of
Performance
Shares at
target
Accelerated
vesting of
unvested
stock options
Entitled to
exercise stock
options for a
period of
three years
after death or
disability4,5
90
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Voluntary
Termination/
Termination
with Cause
Involuntary
Termination/
Termination
without Cause
RSUs
Forfeited
Forfeited
EXECUTIVE COMPENSATION
Normal
Retirement1
Change in Control
(with Termination)2
Change in Control
(No Termination)
Death or
Disability
Accelerated
vesting of RSU
awards
Accelerated
vesting of RSU
awards, if
replacement
award provided
and subsequent
qualifying
termination
Accelerated
vesting of
RSU awards
No accelerated
vesting if
replacement award
provided and
continued
employment
Accelerated vesting
of RSU awards
granted prior to
change in control,
if no replacement
award provided
Outplacement
None
None
None
None
None
Maximum of
$100,000 for CEO
and $50,000 for the
other NEOs
280G Treatment
N/A
N/A
N/A
6
Other
Continuing
medical and/
or dental
coverage under
COBRA, for
which the
executive
would pay
102% of the
applicable
premium
Continuing
medical and/
or dental
coverage under
COBRA, for
which the
executive
would pay
102% of the
applicable
premium
Continuing
medical and/or
dental coverage
under COBRA, for
which the
executive would
pay 102% of the
applicable
premium
Continuing
medical insurance
(102% of the
premium paid by
the executive) and
life insurance for
a period of three
years following
the NEO’s
termination date7
N/A
7
N/A
Continuing
medical
and/or dental
coverage with
102% of the
premium
paid by the
executive (or
his or her
surviving
dependents)
1
2
3
4
5
6
7
Subject to any 409A deferred payment requirements. For purposes of the Annual Bonus (EMIP), Normal Retirement is defined as termination at or after age 60 and
5 years of service or at or after age 55 and 25 years of service. For purposes of Performance Shares, stock options and RSUs, commencing with awards granted in 2021,
Normal Retirement is defined as termination at or after age 60 and 5 years of service or at or after age 55 and 15 years of service.
Provision applicable in the event of a termination without Cause or termination for Good Reason in connection with a Change in Control. With respect to Performance
Shares, stock options and RSUs, such termination without Cause or termination for Good Reason must occur within a period of two years after the Change in Control (or
in certain employment terminations prior to and related to the change in control) to receive the accelerated vesting treatment.
Based on the executive's period of employment during the calendar year, subject to achievement of the applicable personal and financial goals.
After which time the vested stock options would expire.
Vested stock options canceled if the executive is terminated for cause or the executive engaged in competitive conduct within six months of termination.
Severance payments reduced to the 280G (excess parachute payment) safe harbor limit, unless the executive would achieve a better after-tax result paying the excise
tax imposed on excess parachute payments. No payment, net of taxes, to compensate for any excise tax imposed.
Amounts and/or shares (from vested RSUs or Performance Shares) held in executives' accounts under the Top Hat Plan automatically paid out.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
91
EXECUTIVE COMPENSATION
TERMINATION AND CHANGE IN CONTROL TABLE
The following table sets forth estimates of the potential incremental payments to each of our NEOs upon the specified
termination events and upon a change in control, both with and without a qualified termination, assuming that each
such event took place on the last business day of 2023.
The table does not quantify benefits under plans that are generally available to salaried employees that do not
discriminate in favor of NEOs, including the 401(k) Plan, the health care plan and the life insurance plan.
The Annual Bonus (EMIP) amounts represent the difference between target EMIP and actual EMIP payments
(as disclosed in the Non-Equity Incentive Plan Compensation column of the 2023 Summary Compensation Table) if
target EMIP exceeds actual EMIP in connection with a hypothetical change in control as of the last business day of 2023.
The LTIP (Performance Shares) amounts include amounts for the 2022-2024 and 2023-2025 cycles, represented by the
target amounts for the two cycles that were open as of the last business day of 2023. There is no amount included for
the 2021-2023 cycle because actual performance exceeded target performance.
The following table assumes, in the event of a change in control, replacement awards are provided pursuant to the 2015
and 2023 Equity and Incentive Compensation Plan’s respective Stock Option Agreement, Restricted Stock Unit
Agreement, and Performance Share Agreement (‘‘Agreements’’). Pursuant to the Agreements, if the respective equity
awards are not replaced, all outstanding equity awards will accelerate as of the closing date of the change in control. In
the event of a change in control where no replacement awards are provided, the accelerated equity values are
consistent with the accelerated equity values under Change in Control (Replacement Awards; Qualified Termination).
In addition, the table includes all equity that is accelerated as a result of termination but does not include the value of
outstanding equity awards that have previously vested, such as stock options, which awards are set forth above in the
Outstanding Equity Awards at December 31, 2023 table. For descriptions of the compensation plans and agreements
that provide for the payments set forth in the following table, including our change in control agreements, see the
‘‘Elements of Executive Compensation’’ discussion contained in the CD&A.
Under the normal retirement scenario, the retirement definition is either at or after age 60 and 5 years of service or at or
after age 55 and 15 years of service, and, as of December 29, 2023, four NEOs were eligible for normal retirement under
the equity awards. The Annual Bonus (EMIP) has a retirement definition of either at or after age 55 and 25 years of
service or at or after age 60 and 5 years of service, under which three NEOs were eligible for normal retirement as of
December 29, 2023. There are no amounts included in the retirement scenario below for the EMIP bonus as (due to
calculation on the last business day of the year) it was deemed and assumed to have been fully earned. The amounts
shown for the Performance Shares assumes performance at target, although actual payout upon retirement would be
based on actual performance determined in the normal course.
Christopher L.
Mapes
Gabriel
Bruno
Steven B.
Hedlund
Jennifer I.
Ansberry
Michele R.
Kuhrt
Involuntary Termination/Termination without
Cause before Normal Retirement:
N/A
N/A
N/A
N/A
N/A
Normal Retirement:
$23,705,331
$4,924,253
$5,795,990
Not Eligible
$2,149,494
Performance Shares–Accelerated Vesting
$ 5,813,935
$ 1,192,506
$1,200,600
Stock Options–Accelerated Vesting
$ 8,655,408
$ 1,804,902
$1,810,956
RSUs–Accelerated Vesting
$ 9,235,988
$ 1,926,845
$2,784,434
N/A
N/A
N/A
$
$
$
527,720
784,693
837,081
92
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Performance Shares–Accelerated Vesting
$ 5,813,935
$ 1,192,506
$ 1,200,600
$
0
$
0
$
0
$
$
0
730,054
Stock Options–Accelerated Vesting
$ 8,655,408
$ 1,804,902
$ 1,810,956
$ 1,102,719
EXECUTIVE COMPENSATION
Christopher L.
Mapes
Gabriel
Bruno
Steven B.
Hedlund
Jennifer I.
Ansberry
Michele R.
Kuhrt
$35,615,232
$7,603,101
$10,175,853
$5,211,575
$4,478,267
$ 11,809,901
$ 2,753,528
$ 4,949,000
$ 2,150,871
$ 2,278,773
$ 9,235,988
$ 2,604,946
$ 3,647,122
$ 1,177,931
$
$
$
$
$
$
$
100,000
$
50,000
$
50,000
0
0
0
0
0
0
$ (802,781)
$ (1,481,825)
$
$
$
$
$
0
0
0
0
0
$
$
$
$
$
0
0
0
0
0
$
$
$
$
$
$
$
50,000
0
0
0
0
0
0
$
$
$
$
$
$
$
$
$
$
$
0
527,720
784,693
837,081
50,000
0
0
0
0
0
0
Change in Control (Replacement Awards;
Qualified Termination):
Severance
Annual Bonus (EMIP)
RSUs–Accelerated Vesting
Outplacement Estimate
280G Cutback
Change in Control (Replacement Awards;
No Termination):
Annual Bonus (EMIP)
Performance Shares–Accelerated Vesting
Stock Options–Accelerated Vesting
RSUs–Accelerated Vesting
Death or Disability:
$23,705,331
$5,602,354
$ 6,658,678
$3,010,704
$2,149,494
Performance Shares–Accelerated Vesting
$ 5,813,935
$ 1,192,506
$ 1,200,600
$
730,054
Stock Options–Accelerated Vesting
$ 8,655,408
$ 1,804,902
$ 1,810,956
$ 1,102,719
RSUs–Accelerated Vesting
$ 9,235,988
$ 2,604,946
$ 3,647,122
$ 1,177,931
$
$
$
527,720
784,693
837,081
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
93
EXECUTIVE COMPENSATION
CEO Pay Ratio
For 2023, we estimate that the ratio of the annual total compensation of our CEO ($10,609,670 which is the same
amount reported for Mr. Mapes in the 2023 Summary Compensation Table) to the annual total compensation of our
median employee ($52,942) is 200:1. We note that, due to our permitted use of reasonable estimates and assumptions in
preparing this pay ratio disclosure, the disclosure may involve a degree of imprecision, and thus this ratio disclosure is a
reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and
assumptions described below.
In accordance with Item 402(u) of Regulation S-K, in calculating our CEO pay ratio for 2023, we determined our median
employee based on total cash and equity compensation paid to our active employees as of October 1, 2023 for the period
beginning on January 1, 2023. We included all full time, part time, seasonal and temporary employees, whether
employed domestically or overseas and whether employed directly or by a consolidated subsidiary. Compensation for
employees hired during 2023 was annualized for all employees other than temporary or seasonal employees (and
full-time equivalencies were not created).
Annual total compensation for the median employee for 2023 was calculated using the same methodology used for our
NEOs as set forth in the 2023 Summary Compensation Table. Of the employees that were identified as potential median
employees, we selected an employee based in the U.S. that was representative of the largest portion of our workforce.
Given the different methodologies that various public companies will use to determine an estimate of their pay ratio,
the estimated ratio reported above should not be used as a basis for comparison between companies.
94
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Pay Versus Performance
In accordance with Securities and Exchange Commission rules, we provide the following disclosure regarding executive
compensation for our principal executive officer (‘‘PEO’’) and non-PEO named executive officers (‘‘non-PEO NEOs’’) and
certain measures of Company performance for the fiscal years listed below. The Committee did not consider the pay
versus performance disclosure below in making its pay decisions for any of the years shown.
Summary Compensation
Table (SCT) Total
for PEO1
($)
Compensation
Actually Paid to
PEO1,2,3
($)
Average
SCT Total
for Non-PEO
NEOs1
($)
Average
Compensation
Actually Paid to
Non-PEO
NEOs1,2,3
($)
Value of Initial Fixed
$100 Investment Based on:4
Company
TSR
($)
Peer Group
TSR
($)
Net Income
($ Millions)
ROIC for
Compensation
Purposes5
(b)
(c)
(d)
(e)
(f)
(g)
10,609,670
27,971,976
3,085,776
5,933,007
241.00
143.54
10,096,478
14,415,143
2,496,792
3,176,483
157.95
123.28
9,213,820
17,818,888
1,978,086
3,241,658
149.83
141.80
7,077,536
11,078,312
1,936,038
1,600,715
122.93
113.66
(h)
545
472
276
206
(i)
22.6%
28.1%
21.5%
13.7%
Year
(a)
2023
2022
2021
2020
1
Christopher Mapes was our PEO for each year presented. The individuals comprising the non-PEO NEOs for each year presented are listed below.
2023
2022
2021
2020
Gabriel Bruno
Steven Hedlund
Jennifer Ansberry
Michele Kuhrt
Gabriel Bruno
Steven Hedlund
Gabriel Bruno
Steven Hedlund
Gabriel Bruno
Steven Hedlund
Jennifer Ansberry
Jennifer Ansberry
Jennifer Ansberry
Michele Kuhrt
Michele Kuhrt
Michele Kuhrt
George Blankenship
Vincent Petrella
2
3
The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and may not necessarily reflect
compensation actually earned, realized, or received by the Company’s PEO and non-PEO NEOs. These amounts reflect the Summary Compensation Table Total with
certain adjustments as described in footnote 3 below. Please note that, while similar adjustment information was provided in our 2023 proxy statement for years 2020,
2021 and 2022, under applicable SEC guidance, repeating such adjustment information is not required in this Proxy Statement because in our view it is not material to our
shareholders’ understanding of the information reported in the table above for 2023 or the related disclosures provided below.
Compensation Actually Paid for 2023 (the most recent year included in the table above) reflects the exclusions and inclusions of certain amounts for the PEO and the
non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards
column are the totals from the Stock Awards and Option Awards columns set forth in the Summary Compensation Table. Amounts in the Exclusion of Change in Pension
Value column reflect the amounts attributable to the Change in Pension Value reported in the Summary Compensation Table.
Summary
Compensation Table
Total for PEO
($)
Exclusion of
Change in
Pension Value
($)
Exclusion of
Stock Awards and
Option Awards
($)
Inclusion of
Pension Service
Cost
($)
Inclusion of
Equity Values
($)
Compensation
Actually Paid to
PEO
($)
10,609,670
—
(6,265,385)
—
23,627,691
27,971,976
Average Summary
Compensation Table
Total for Non-PEO
NEOs
($)
Exclusion of
Change in
Pension Value
($)
Exclusion of
Stock Awards and
Option Awards
($)
Inclusion of
Pension Service
Cost
($)
Inclusion of
Equity Values
($)
Compensation
Actually Paid to
Non-PEO NEOs
($)
3,085,776
—
(1,267,752)
—
4,114,983
5,933,007
Year
2023
Year
2023
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
95
EXECUTIVE COMPENSATION
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables:
Year-End Fair Value
of Equity Awards
Granted During
Year That Remained
Unvested as of Last
Day of Year for PEO
($)
Change in Fair
Value from Last
Day of Prior Year
to Last Day of Year
of Unvested Equity
Awards Granted in
Prior Years for PEO
($)
Vesting Date Fair
Value of Equity
Awards Granted
During Year that
Vested During Year
for PEO
($)
Change in Fair Value
from Last Day of Prior
Year to Vesting Date
of Unvested Equity
Awards Granted in
Prior Years that Vested
During Year for PEO
($)
Fair Value at Last
Day of Prior Year
of Equity Awards
Forfeited During
Year for PEO
($)
Total - Inclusion of
Equity Values for
PEO
($)
9,660,547
10,846,923
—
3,120,221
—
23,627,691
Average Year-End
Fair Value of Equity
Awards Granted
During Year That
Remained Unvested
as of Last Day of Year
for Non-PEO NEOs
($)
Average Change in
Fair Value from Last
Day of Prior Year
to Last Day of Year
of Unvested Equity
Awards Granted in
Prior Years for
Non-PEO NEOs
($)
Average Vesting
Date Fair Value
of Equity Awards
Granted During Year
that Vested During
Year for Non-PEO
NEOs
($)
Average Change in
Fair Value from Last
Day of Prior Year to
Vesting Date of Un-
vested Equity Awards
Granted in Prior Years
that Vested During
Year for Non-PEO
NEOs
($)
Average Fair Value
at Last Day of Prior
Year of Equity
Awards Forfeited
During Year for Non-
PEO NEOs
($)
Total - Average
Inclusion of
Equity Values for
Non-PEO NEOs
($)
1,849,541
1,810,353
—
455,089
—
4,114,983
Year
2023
Year
2023
4
The Peer Group Total Shareholder Return (‘‘TSR’’) set forth in this table utilizes the S&P 400 Index, which we also utilize in the stock performance graph required by
Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2023. The comparison assumes $100 was invested for the period starting
December 31, 2019, through the end of the listed year in the Company and in the S&P 400 Index, respectively. Historical stock performance is not necessarily indicative of
future stock performance.
5 We determined ROIC for Compensation Purposes to be the most important financial performance measure used to link Company performance to Compensation Actually
Paid to our PEO and non-PEO NEOs in 2023. More information on ROIC for Compensation Purposes can be found in Appendix A. This performance measure may not have
been the most important financial performance measure for prior years and we may determine a different financial performance measure to be the most important
financial performance measure in future years.
96
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
EXECUTIVE COMPENSATION
RELATIONSHIP BETWEEN PEO AND NON-PEO NEO COMPENSATION ACTUALLY PAID AND COMPANY AND PEER GROUP TOTAL SHAREHOLDER RETURN
(‘‘TSR’’)
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of
Compensation Actually Paid to our non-PEO NEOs, the Company’s cumulative TSR over the four most recently
completed fiscal years, and the cumulative TSR of the S&P 400 Index over the same period assuming initial investment
of $100 on December 31, 2019.
PEO AND AVERAGE NON-PEO NEO COMPENSATION ACTUALLY
PAID VERSUS COMPANY TSR
)
s
n
o
i
l
l
i
M
$
(
d
i
a
P
y
l
l
a
u
t
c
A
n
o
i
t
a
s
n
e
p
m
o
C
$30
$25
$20
$15
$10
$5
$0
$100.0
$100.00
$122.9
$11.1
$113.66
$17.8
$149.8
$157.9
$141.80
$14.4
$123.28
$1.6
$3.2
$3.2
$28.0
$241.0
$143.54
$5.9
$250
$200
$150
$100
$50
$0
)
0
0
1
$
o
t
d
e
x
e
d
n
I
9
1
0
2
E
Y
F
(
R
S
T
y
n
a
p
m
o
C
2019
2020
2021
2022
2023
Christopher Mapes Compensation Actually Paid
Average Non-PEO NEO Compensation Actually Paid
Lincoln Electric Holdings, Inc. TSR
S&P 400 Index TSR
RELATIONSHIP BETWEEN PEO AND NON-PEO NEO COMPENSATION ACTUALLY PAID AND COMPANY NET INCOME
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of
Compensation Actually Paid to our non-PEO NEOs, and our GAAP Net income during the four most recently completed
fiscal years.
PEO AND AVERAGE NON-PEO NEO COMPENSATION ACTUALLY
PAID VERSUS COMPANY NET INCOME
)
s
n
o
i
l
l
i
M
$
(
d
i
a
P
y
l
l
a
u
t
c
A
n
o
i
t
a
s
n
e
p
m
o
C
$30
$25
$20
$15
$10
$5
$0
$472.0
$28.0
$545.2
$17.8
$14.4
$11.1
$206.1
$276.5
$1.6
$3.2
$3.2
$5.9
2020
2021
2022
2023
Christopher Mapes Compensation Actually Paid
Average Non-PEO NEO Compensation Actually Paid
Lincoln Electric Holdings, Inc. Net Income
$600
$400
$400
$300
$200
$100
$0
)
s
n
o
i
l
l
i
M
$
(
e
m
o
c
n
I
t
e
N
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
97
EXECUTIVE COMPENSATION
RELATIONSHIP BETWEEN PEO AND NON-PEO NEO COMPENSATION ACTUALLY PAID AND COMPANY ROIC FOR COMPENSATION PURPOSES
The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of
Compensation Actually Paid to our non-PEO NEOs, and Company ROIC for Compensation Purposes (annual results)
during the four most recently completed fiscal years.
PEO AND AVERAGE NON-PEO NEO COMPENSATION ACTUALLY PAID
VERSUS COMPANY ROIC FOR COMPENSATION PURPOSES
)
s
n
o
i
l
l
i
M
$
(
d
i
a
P
y
l
l
a
u
t
c
A
n
o
i
t
a
s
n
e
p
m
o
C
$30
$25
$20
$15
$10
$5
$0
28.1%
$28.0
21.5%
$17.8
$14.4
$3.2
$3.2
13.7%
$11.1
$1.6
22.6%
$5.9
30%
25%
20%
15%
10%
5%
0%
s
e
s
o
p
r
u
P
n
o
i
t
a
s
n
e
p
m
o
C
r
o
f
C
O
R
I
2020
2021
2022
2023
Christopher Mapes Compensation Actually Paid
Average Non-PEO NEO Compensation Actually Paid
ROIC for Compensation Purposes
TABULAR LIST OF MOST IMPORTANT FINANCIAL PERFORMANCE MEASURES
The following table presents the financial performance measures that the Company considers to have been the most
important in linking Compensation Actually Paid to our PEO and our Non-PEO NEOs for 2023 to Company performance.
The measures in this table are not ranked.
Return on Invested Capital (ROIC) for Compensation Purposes
Adjusted earnings before interest, taxes and bonus (EBITB)
Adjusted Revenue for Compensation Purposes (Adjusted Revenue)
Average operating working capital to net sales ratio (AOWC/Sales) for Compensation Purposes
Adjusted Net Income for Compensation Purposes
98
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Management Ownership
of Shares
The following table sets forth certain information regarding ownership of shares of common stock of Lincoln Electric as
of December 31, 2023 (except as otherwise indicated) by each of our Directors and NEOs, as well as our Directors and
executive officers as a group. Except as otherwise indicated, voting and investment power with respect to shares
reported in this table are not shared with others.
RSUs and Performance Shares are generally not reflected in the table as there is no ability to acquire the shares
attributable to them within 60 days of December 31, 2023. In addition, any vested RSUs and Performance Shares that
are deferred into the Top Hat Plan or the Non-Employee Directors’ Deferred Compensation Plan are generally not
reflected in the table as there is no ability to acquire the shares attributable to them within 60 days of December 31,
2023. The table includes shares that would be received upon the vesting of RSUs within 60 days of December 31, 2023.
BENEFICIAL OWNERSHIP TABLE
Directors
Brian D. Chambers
Curtis E. Espeland
Bonnie J. Fetch
Patrick P. Goris
Michael F. Hilton
Marc A. Howze
Kathryn Jo Lincoln
Phillip J. Mason
Ben P. Patel
Hellene S. Runtagh
Kellye L. Walker
NEOs
Christopher L. Mapes
Gabriel Bruno
Steven B. Hedlund
Jennifer I. Ansberry
Michele R. Kuhrt
Number of Shares of
Lincoln Electric
Common Stock Beneficially
Owned1
Percent of Class
—2
16,667
—3
5922
6,2942
—3
*
*
*
*
727,6302,4
1.28 %
7,0475
1,1132
28,978
2,3792
427,2166
60,4187
84,1778
45,5549
43,95410
*
*
*
*
*
*
*
*
*
All Directors and Executive Officers as a group (21 persons)
1,513,63711
2.629%
*
Indicates less than 1%
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
99
MANAGEMENT OWNERSHIP OF SHARES
1
2
3
4
5
6
7
8
9
Reported in compliance with the beneficial ownership rules of the SEC, under which a person is deemed to be the beneficial owner of a security, for these purposes, if he
or she has, or shares, voting power or investment power over the security or has the right to acquire the security within 60 days of December 31, 2023. With respect to
the NEOs and executive officers, the amounts reported do not include any Performance Shares that vested and paid out in March 2024, as the number of Performance
Shares to be received by each executive officer was unknown within 60 days of December 31, 2023.
The following Directors had amounts deferred under the Non-Employee Directors’ Deferred Compensation Plan which is not reflected in the table above: Mr. Chambers
1,908 shares; Mr. Goris 6,124 shares; Mr. Hilton 5,143 shares; Ms. Lincoln 6,124 shares; Dr. Patel 6,124 shares; Ms. Walker 981 shares.
Ms. Fetch was elected to the Board on July 20, 2023. In connection with Ms. Fetch’s election, she received an initial grant of 264 RSUs that will vest on the first anniversary
of the date of grant. Mr. Howze was elected to the Board on October 17, 2023. In connection with Mr. Howze’s election, he received an initial grant of 107 RSUs that will
vest on the first anniversary of the date of grant.
Of the shares reported, 27,353 shares were held of record by a trust established by Ms. Lincoln, under which she has sole investment and voting power. The remaining
700,277 shares were held of record by The Lincoln Institute of Land Policy, of which Ms. Lincoln is the Chair, as to which shares Ms. Lincoln disclaims beneficial ownership.
Ms. Lincoln has shared voting and shared investment power on these 700,277 shares.
The amount reported does not include 12,005 shares which were held of record by Mr. Mason’s spouse in the Paula J. Mason Trust, as to which shares Mr. Mason does not
have beneficial ownership.
Of the shares reported, Mr. Mapes held of record 45,189 shares. Mr. Mapes has or had the right to acquire 15,243 shares upon the vesting of RSUs within 60 days of
December 31, 2023. Mr. Mapes has or had the right to acquire 366,784 shares upon the exercise of stock options within 60 days of December 31, 2023. Mr. Mapes had
27,923 RSUs deferred under the Top Hat Plan which are not reflected in the above table.
Of the shares reported, Mr. Bruno held of record 592 shares, of which 277 shares are held jointly with spouse. Mr. Bruno has or had the right to acquire 3,271 shares upon
the vesting of RSUs within 60 days of December 31, 2023. Mr. Bruno has or had the right to acquire 56,555 shares upon the exercise of stock options within 60 days of
December 31, 2023. Mr. Bruno had 9,220 Performance Shares deferred under the Top Hat Plan which are not reflected in the above table.
Of the shares reported, Mr. Hedlund held 26,287 shares of record, 688 shares of which are held in the Stock Purchase Plan, and 2,397 shares of which are held in the 401(k)
Plan. Mr. Hedlund has or had the right to acquire 2,606 shares upon the vesting of RSUs within 60 days of December 31, 2023. Mr. Hedlund has or had the right to acquire
55,284 shares upon the exercise of stock options within 60 days of December 31, 2023.
Of the shares reported, Ms. Ansberry held of record 14,277 shares, 20 shares of which are held jointly with her spouse. Ms. Ansberry has the right to acquire 1,995 shares
upon the vesting of RSUs within 60 days of December 31, 2023. Ms. Ansberry has or had the right to acquire 29,282 shares upon the exercise of stock options within
60 days of December 31, 2023.
10 Of the shares reported, Ms. Kuhrt held 13,219 shares of record, 321 shares of which are held in the 401(k) Plan. Ms. Kuhrt has the right to acquire 1,378 shares upon the
vesting of RSUs within 60 days of December 31, 2023. Ms. Kuhrt has or had the right to acquire 29,357 shares upon the exercise of stock options within 60 days of
December 31, 2023.
11
Includes 27,661 shares that are RSUs held by all executive officers, as a group, that vest within 60 days of December 31, 2023 and 579,554 shares which all executive
officers, as a group, have or had the right to acquire upon the exercise of stock options within 60 days of December 31, 2023.
In addition to the above management holdings, as of December 31, 2023, the 401(k) Plan held 846,329 shares of our
common stock, or approximately 1.49% of the shares of our common stock outstanding.
100
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
MANAGEMENT OWNERSHIP OF SHARES
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information regarding outstanding Stock Options, RSUs and Performance Shares and
shares reserved for issuance under our equity compensation plans as of December 31, 2023:
Plan category
Number of Securities
to Be Issued
Upon Exercise of
Outstanding
Options, Warrants
and Rights
(a)1
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
(b)2
Number of Securities
Remaining Available
For Future Issuance
Under Equity
Compensation Plans
(Excluding Securities
Reflected In Column (a))
(c)3
Equity compensation plans approved by security holders
1,428,753
$108.85
2,192,720
Equity compensation plans not approved by security holders4
Total
—
1,428,753
—
—
—
2,192,720
1
2
3
The amount shown in column (a) includes the following: 919,619 Nonqualified Stock Options; 87,604 deferred RSUs and deferred Performance Shares; 164,178
Performance Shares (assuming payout levels at maximum-as a result, this aggregate reported number may overstate actual dilution); and 257,352 RSUs.
The weighted average exercise price in column (b) includes nonqualified stock options only.
The amount shown in column (c) represents common shares remaining available under the 2023 Equity and Incentive Compensation Plan (‘‘Employee Plan’’) and the 2023
Stock Plan for Non-Employee Directors (‘‘Director Plan’’). The Employee Plan provides for the granting of options, appreciation rights, restricted shares, RSUs and
performance-based awards. The Director Plan provides for the granting of options, restricted shares and RSUs. Under the Employee Plan, one common share is
subtracted from the maximum number of common shares available under the Employee Plan for every common share granted. The amount in the table assumes payout
levels at maximum for Performance Shares. Under the Director Plan only one common share is subtracted from the maximum number of common shares available for
every common share granted.
4
The Company does not maintain equity compensation plans that have not been approved by its shareholders.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
101
Other Ownership of Shares
Set forth below is information about the number of shares held by any person (including any ‘‘group’’ as that term is
used in Section 13(d)(3) of the Exchange Act) known to us to be an owner of more than 5% of the shares of our common
stock as of December 31, 2023.
Name and Address of Beneficial Owner
The Vanguard Group
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
BlackRock, Inc.
50 Hudson Yards
New York, New York 10001
Number of Shares and Nature of
Beneficial Ownership
Percent of
Class
5,694,2531
9.99%
5,334,1912
9.36%
1
2
According to its Schedule 13G/A filed on February 13, 2024, The Vanguard Group has sole voting power over 0 shares, shared voting power over 24,243 shares, sole
dispositive power over 5,615,507 shares and shared dispositive power over 78,746 shares. In its Schedule 13G/A filing, The Vanguard Group states that the shares of our
common stock reported in the filing were acquired and are held in the ordinary course of business and were not acquired and are not held for the purpose of or with the
effect of changing or influencing the control of the issuer of the securities and were not acquired in connection with or as a participant in any transaction having that
purpose or effect, other than activities solely in connection with a nomination under §240.14a-11.
According to its Schedule 13G/A filed on January 24, 2024, BlackRock, Inc. has sole voting power over 5,223,316 shares and sole dispositive power over 5,334,191 shares. In its
Schedule 13G/A filing, BlackRock states that the securities referred to in the filing were acquired and are held in the ordinary course of business and were not acquired
and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in
connection with or as a participant in any transaction having that purpose or effect.
102
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Compensation Committee Interlocks and
Insider Participation
During 2023, each of Messrs. Hilton, Howze and Mason and Ms. Lincoln, Ms. Runtagh and Ms. Walker served on the
Compensation and Executive Development Committee. No Compensation and Executive Development Committee member
was an employee of Lincoln Electric or any of its subsidiaries, and there were no reportable business relationships between
Lincoln Electric and the Compensation and Executive Development Committee members. None of our executive officers
serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive
officers serving as a member of our Compensation and Executive Development Committee. In addition, none of our
executive officers serves as a member of the compensation committee of any entity that has one or more of its executive
officers serving as a member of our Board.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
103
Annual Meeting Proposals
PROPOSAL
01
Election of Directors
ELECTION OF 12 DIRECTORS
TO SERVE UNTIL 2025
ANNUAL MEETING OR UNTIL
THEIR SUCCESSORS ARE
DULY ELECTED AND
QUALIFIED
Our Nominating and
Corporate Governance
Committee and our
Board of Directors
have determined that
each of the Director
Nominees possesses
the right skills,
qualifications and
experience to
effectively oversee
Lincoln Electric's
long-term business
strategy.
THE BOARD RECOMMENDS A VOTE FOR ALL DIRECTOR NOMINEES.
See ‘‘Proposal 1—Election of Directors’’ beginning on page 20 of this Proxy Statement for additional information.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROPOSAL
02
Ratification of independent
registered public accounting firm
ANNUAL MEETING PROPOSALS
Our Board of Directors
recommends that
shareholders vote
‘‘FOR’’ the ratification
of the appointment of
Ernst & Young LLP as
Lincoln Electric's
independent registered
public accounting firm
for the year ending
December 31, 2024.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
Fees for professional services provided by Ernst & Young LLP as our independent auditors in each of the last two fiscal
years, in each of the following categories are:
Audit Fees
Audit-Related Fees
Tax Fees
All Other Fees
Total Fees
2023
2022
$2,780,000
$2,482,000
—
43,000
—
246,000
479,000
—
$2,823,000
$3,207,000
Audit Fees include fees associated with the annual integrated audit of the financial statements and internal control over
financial reporting in 2023 and 2022, the reviews of our quarterly reports on Form 10-Q, certain statutory audits
required for our international subsidiaries and services provided in connection with regulatory filings with the SEC.
Audit-Related Fees for 2022 primarily relate to audit-related services associated with acquisitions. Tax Fees include tax
compliance, transfer pricing and tax advisory services.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
105
ANNUAL MEETING PROPOSALS
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The Audit Committee has established a policy regarding pre-approval of all audit and non-audit services performed by
our independent auditors, including the scope of and fees for such services. Generally, requests for audit, audit-related
and tax services, each as defined in the policy, must be presented for approval prior to the performance of such
services, to the extent known at that time. For 2023, the Audit Committee has resolved that four specific categories of
services, namely audit services, audit-related services, tax advisory services, and tax compliance services, are
permissible without itemized pre-approval in an amount not to exceed for each service:
Pre-Approval Amount
Services
$2,804,000
$800,000
Audit, and Audit-Related services for acquisitions, new accounting pronouncements and other
international statutory requirements
Tax Advisory and Tax Compliance services
Itemized detail of all such services performed is subsequently provided to the Audit Committee. In addition, our
independent auditors are prohibited from providing certain services described in the policy as prohibited services. All of
the fees included in Audit Fees, Audit- Related Fees and Tax Fees shown above were pre-approved by the Audit
Committee (or included in the pre-approved fee limits, as applicable, for certain services as detailed above).
Generally, requests for independent auditor services are submitted to the Audit Committee by our Executive
Vice President, CFO and Treasurer (or other member of our senior financial management) and our independent auditors
for consideration at the Audit Committee’s regularly scheduled meetings. Requests for additional services in the
categories mentioned above may be approved at subsequent Audit Committee meetings to the extent that none of such
services is performed prior to its approval (unless such services are included in the categories of services that fall within
the dollar limits detailed above). The Chair of the Audit Committee is also delegated the authority to approve
independent auditor services requests under certain dollar thresholds provided that the pre-approval is reported at the
next meeting of the Audit Committee. All requests for independent auditor services must include a description of the
services to be provided and the fees for such services.
Representatives of Ernst & Young LLP are expected to be available at the Annual Meeting, will have an opportunity to
make a statement if they so desire and are expected to be available to respond to appropriate shareholder questions.
Although ratification of the appointment of the independent auditors is not required by law, the Audit Committee and
the Board believe that shareholders should be given the opportunity to express their views on the subject. While not
binding on the Audit Committee or the Board, the failure of the shareholders to ratify the appointment of Ernst & Young
LLP as our independent auditors would be considered by the Board in determining whether or not to continue the
engagement of Ernst & Young LLP. Ultimately, the Audit Committee retains full discretion and will make all
determinations with respect to the appointment of independent auditors, whether or not our shareholders ratify the
appointment.
MAJORITY VOTE NEEDED
Ratification requires the affirmative vote of the majority of the shares of our common stock present or represented and entitled
to vote on the matter at the Annual Meeting. Unless otherwise directed, shares represented by proxy will be voted FOR
ratification of the appointment of Ernst & Young LLP. Abstentions will have the same effect as a vote ‘‘against’’ the proposal.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
PROPOSAL
03
Approval, on an advisory basis,
of NEO compensation
ANNUAL MEETING PROPOSALS
Our Board
recommends that
shareholders vote
‘‘FOR’’ the approval, on
an advisory basis, of
the compensation of
our NEOs.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
Say-on-Pay Vote at
2023 Annual Meeting
96%
Approval
96%
of shareholders who voted on
the “say-on-pay” proposal
voted FOR the approval of the
compensation of our NEOs.
The Compensation and Executive Development Committee believes that the historically positive say-on-pay
shareholder votes reinforce the philosophy and objectives of our executive compensation program. We conduct annual
say-on-pay votes. Our next say-on-pay vote will be held at the 2025 Annual Meeting.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
107
ANNUAL MEETING PROPOSALS
Our compensation philosophy is to pay for performance, a philosophy that has been rooted in our history and tradition
for almost 130 years. Our compensation program consists of elements designed to complement one another and focus
on both short-term and long-term performance. The Compensation and Executive Development Committee regularly
reviews peer group data and best practices and trends related to executive compensation to help ensure that our
programs are properly aligned with our business strategy and philosophy, as well as promote shareholder value. The
Committee receives advice from independent consultants. In addition to the information provided earlier in the CD&A
section, we believe shareholders should consider the following in determining whether to approve this proposal:
OUR CULTURE AND PERFORMANCE
To maintain a performance-driven culture, we:
• Expect our executives to deliver above-market financial
• Take action when needed to address specific business
results;
challenges; and
• Provide systems that tie executive compensation to
superior financial performance;
• Maintain good governance practices in the design and
operation of our executive compensation programs.
We have a long track record of delivering increased value to our shareholders.
PAY FOR PERFORMANCE
In designing our executive compensation programs, a core philosophy is that our executives should be rewarded when
they deliver financial results that provide value to our shareholders. Therefore, we have established a program that ties
executive compensation to superior financial performance.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
We have a balanced pay mix between short-term and long-term incentives:
ANNUAL MEETING PROPOSALS
• Performance Share Payouts Were At Maximum. For the
2021-2023 performance cycle, the Performance Shares
paid out at maximum, as a result of the maximum
performance level for both ROIC for Compensation
Purposes and Adjusted Net Income for Compensation
Purposes being exceeded.
• Long-Term Incentives Are Aligned with the Interests of
Our Shareholders. We believe that incentives should be
based on factors that deliver long-term sustainability
for Lincoln Electric. Therefore, the NEOs receive three
types of long-term incentives. The three components
are: (1) stock options, (2) RSUs and (3) Performance
Shares. Total awards are targeted at the 50th percentile
of benchmark data (at market median).
• Base Salaries. Base salaries for our NEOs are generally
targeted at the 45th percentile of benchmark data
(below market median). For 2023, the average base
salary increase for the NEOs, excluding Mr. Hedlund in
light of his recent promotion and mid-year adjustment,
was 5.8%, which included the progression of pay within
the competitive benchmark for recently promoted
executives.
• Annual Bonus Awards Are Aligned with Our
Performance and Contain a Balanced Mix of Metrics.
The total cash compensation for our NEOs, which
includes base pay and the annual bonus (EMIP), is
targeted at the 65th percentile of benchmark data
(above market median). The EMIP is based on a balance
of metrics—both financial and personal—with the
financial components based on Adjusted Revenue for
Compensation Purposes, EBITB and AOWC/ Sales for
Compensation Purposes and with a mix of consolidated
and, if applicable, segment performance. For 2023,
annual bonus payments for the NEOs, excluding
Mr. Hedlund, increased 2%.
GOOD GOVERNANCE PRACTICES
In addition to our emphasis on pay for performance, we design our programs to be current with best practices and good
corporate governance. We also consider the risks associated with any particular program, design or compensation decision. We
believe these assessments result in sustained, long-term shareholder value. Some of the governance practices include:
• Officers Are Subject to Stock Ownership Guidelines
• Compliant Clawback Policy
• Compensation and Executive Development Committee
• Change in Control Agreements Require a
Receives Regular Updates
Double-Trigger
• Compensation and Executive Development Committee
• No Tax Gross-Ups
Retains Independent Advisors
• No Hedging or Pledging of Lincoln Electric Stock by
• No Compensation Consultant Conflicts of Interest
Officers
• No Multi-Year Guarantees on Compensation
• Limited Perquisites
• No Dividends on Unvested RSUs or Performance Shares
As illustrated above, the Compensation and Executive Development Committee has and will continue to take action to
structure our executive compensation program in a manner that is performance-based, current with best practices and good
corporate governance and aimed at sustaining long-term shareholder value. The Board believes that the executive
compensation disclosed in the CD&A section, tabular disclosures (including the 2023 Summary Compensation Table) and other
narrative disclosures in this Proxy Statement aligns with our peer group pay practices and compensation philosophy.
As required under the Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange
Act, we are asking you to cast an advisory (non-binding) vote to approve the following resolution at the Annual Meeting:
RESOLVED, that the compensation awarded to our NEOs, as disclosed pursuant to Item 402 of Regulation S-K in the
Compensation Discussion and Analysis and the tabular disclosure (together with the accompanying narrative
disclosure) in this Proxy Statement, as required by the rules of the Securities and Exchange Commission, is hereby
approved on an advisory basis.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
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ANNUAL MEETING PROPOSALS
YOUR VOTE MATTERS TO US
As an advisory vote, this proposal is not binding on us. However, the Compensation and Executive Development
Committee, which is responsible for designing and administering our executive compensation programs, values the
opinions expressed by shareholders in their vote on this proposal and expects to consider the outcome of the vote when
making future compensation decisions for NEOs.
MAJORITY VOTE NEEDED
A favorable vote of a majority of the shares of our common stock present or represented by proxy and entitled to vote
on the matter is necessary for approval of the proposal. Abstentions will have the same effect as a vote ‘‘against’’ the
proposal and broker non-votes will not be counted for determining whether the proposal is approved.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE, FOR APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF OUR
NAMED EXECUTIVE OFFICERS
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Audit Committee Report
The Audit Committee consists solely of independent Directors within the meaning of the Nasdaq listing standards. The
Audit Committee oversees our financial reporting process on behalf of the Board of Directors. Management has the
primary responsibility for the financial statements and the reporting process, including the systems of internal control
over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed with
management the audited financial statements in the Annual Report, including a discussion of the quality, not just the
acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in
the financial statements.
The Audit Committee discussed with the independent auditors, who are responsible for expressing an opinion on the
conformity of those audited financial statements with U.S. generally accepted accounting principles, their judgments as
to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be
discussed with the Audit Committee by the applicable requirements of the Public Company Accounting Oversight Board
(the ‘‘PCAOB’’) and the SEC. In addition, the Audit Committee has received and has discussed with the independent
auditors written disclosures regarding their independence as required by PCAOB Ethics and Independence Rule 3526,
Communication with Audit Committees Concerning Independence.
The Audit Committee discussed with our internal and independent auditors the overall scope and plan for their
respective audits. The Audit Committee met with the internal and independent auditors, with and without
management present, to discuss the results of their examinations, their evaluations of our internal controls, and the
overall quality of our financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of
Directors (and the Board approved) that the audited financial statements be included in the Annual Report on
Form 10-K for the year ended December 31, 2023 for filing with the SEC. The Audit Committee and the Board have also
recommended the selection of Ernst & Young LLP as our independent auditors for the year ending December 31, 2024
and the ratification thereof by the shareholders.
By the Audit Committee:
Patrick P. Goris
CHAIR
Brian D. Chambers
Curtis E. Espeland
Bonnie J. Fetch
Ben P. Patel
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
111
FAQS
WHO IS SOLICITING PROXIES AND WHY? WHO IS PAYING FOR THE COST OF THIS PROXY SOLICITATION?
The Board solicits the proxy and the Company pays the solicitation cost. Certain officers and employees may also solicit
proxies, but do not receive compensation for these activities. We also reimburse custodians, nominees and fiduciaries
for reasonable expenses incurred to forward and obtain proxy materials from beneficial holders.
HOW DO WE DISTRIBUTE PROXY MATERIALS TO SHAREHOLDERS SHARING THE SAME ADDRESS?
We use ‘‘householding’’ rules to deliver only one set of voting materials (Annual Report and Proxy Statement) to
shareholders who share the same address, unless we receive contrary instructions from one or more shareholders at
that address. Each shareholder receives a separate proxy card. We will promptly deliver upon request a separate set of
proxy materials.
HOW DO I OBTAIN A SEPARATE SET OF PROXY MATERIALS AT NO COST?
Send a written notice to the Corporate Secretary at Lincoln Electric Holdings, Inc., 22801 St. Clair Avenue, Cleveland,
Ohio 44117-1199.
WHO MAY VOTE AT THE ANNUAL MEETING?
Record holders as of the close of business on February 29, 2024 (the record date) are entitled to vote at the Annual
Meeting. As of the record date, 56,825,265 shares of our common stock were outstanding and each share is entitled to
one vote per proposal brought before the meeting.
WHAT IS REQUIRED FOR THERE TO BE A QUORUM AT THE ANNUAL MEETING?
Holders of at least a majority of the shares of our common stock issued and outstanding on the record date
(February 29, 2024) must be present, in person or by proxy, to constitute a quorum.
HOW DO I ATTEND AND PARTICIPATE IN THE ANNUAL MEETING?
Any shareholder of record as of the record date (February 29, 2024) can attend the Annual Meeting online at
www.virtualshareholdermeeting.com/LECO2024. The webcast will start at 11:00 a.m. ET on April 19, 2024. Shareholders may
submit pre-meeting questions online by visiting www.proxyvote.com. Questions must be submitted by Monday, April 15, 2024
at 5:00 p.m. ET. You will need your 16-digit control number that is printed on your proxy card or on the instructions that
accompanied your proxy materials to access the meeting. Instructions on how to attend the Annual Meeting are posted at
www.virtualshareholdermeeting.com/LECO2024. We encourage you to access the meeting prior to the start time to allow ample
time to complete the online check-in process.
If you encounter any technical difficulties accessing the virtual meeting during check-in or meeting time, please call the
technical support number that will be posted on the Virtual Shareholder Meeting log in page.
WHY IS THE ANNUAL MEETING A VIRTUAL, ONLINE MEETING?
We believe that hosting a virtual meeting will facilitate shareholder attendance and participation by enabling shareholders to
participate from any location around the world and improves our ability to communicate more effectively with our
shareholders. We have designed the virtual meeting to provide substantially the same opportunities to participate as you would
have at an in-person meeting. We are providing opportunities for shareholders to submit questions prior to the meeting to
enable us to address appropriate questions at the Annual Meeting.
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
FAQS
WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A REGISTERED SHAREHOLDER OR AS A BENEFICIAL HOLDER?
• Registered Shareholders: If your shares are directly registered in your name with our transfer agent/registrar, you
are considered the registered shareholder, or shareholder of record. Proxy materials will be sent directly to you
and you may vote during the meeting at www.virtualshareholdermeeting.com/LECO2024, or by telephone, by
Internet or by mail in the envelope provided.
• Beneficial Holders: You are a beneficial holder if your shares are held indirectly in a brokerage account, by a
trustee, or by another nominee. These entities are considered the shareholder of record and the shares are
considered held in ‘‘street name.’’ Proxy materials are sent to the entity and they forward a voting instruction
card to you, the beneficial holder. As a beneficial holder, you have the right to direct the entity on how to vote
your shares and you may also attend the Annual Meeting. Since you are not the shareholder of record, you may
not vote during the meeting unless you obtain a legal proxy from the entity that holds your shares. Please refer to
the information your broker, trustee or nominee provided to see what voting options are available to you. If you
have not heard from your broker, trustee or nominee, please contact them.
WHAT SHARES ARE INCLUDED ON THE PROXY CARD?
Shareholder type:
Shares included on the proxy card:
Registered Shareholder &
participant in The Lincoln
Electric Company Employee
Savings Plan (401(k) Plan)
All shares registered in your
name will be represented
(including 401(k) plan shares)
Note: If you do not have
identical names on your
accounts, we cannot
consolidate your share
information.
Beneficial Holder with shares
held by a broker, trustee or
nominee
Both a Registered Shareholder
and a Beneficial Holder of
shares
You will receive a voting
instruction form from your
broker, trustee or nominee
instructing you on how to vote.
You will receive a proxy card
from us and a voting
instruction form from your
broker, trustee or nominee
instructing you on how to vote.
WHAT IS A BROKER NON-VOTE AND WHAT EFFECT DOES IT HAVE?
A broker non-vote occurs when a broker or other nominee does not receive voting instructions from the beneficial
holder and is then unable to vote the shares. If you hold your shares beneficially through a broker, trustee or
nominee, you must communicate your voting instructions to them to have your shares voted. Please note that your
nominee cannot vote on your behalf on the election of Directors (Proposal 1), or the approval, on an advisory basis, of
NEO compensation (Proposal 3), unless you provide specific voting instructions to them by following the instructions
provided to you.
Broker non-votes, as well as abstentions, will be counted to determine whether a quorum is present at the Annual
Meeting. Broker non-votes will not be counted when determining votes for a particular proposal (i.e., it will not be
considered a vote ‘‘cast’’).
HOW DO I VOTE AT THE ANNUAL MEETING?
REGISTERED SHAREHOLDERS
Vote during the meeting at www.virtualshareholdermeeting.com/LECO2024 or by proxy in any one of four ways
outlined in the Proxy Summary section of this Proxy Statement.
PARTICIPANTS IN THE 401(K) PLAN
The 401(k) Plan’s independent Trustee, Fidelity Management Trust Company, will vote your 401(k) Plan shares
according to your voting directions, which you can provide by Internet, telephone or mail. As 401(k) Plan shares are
held in a qualified plan, you are not able to vote 401(k) Plan shares during the Annual Meeting. If you do not vote,
the Trustee will not vote your plan shares.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
113
FAQS
BENEFICIAL HOLDERS
If your shares are held by a bank, broker, trustee or some other nominee (in street name), that entity will give you
separate voting instructions.
WHAT HAPPENS IF I SIGN, DATE AND RETURN MY PROXY BUT DO NOT SPECIFY HOW I WANT MY SHARES VOTED ON THE PROPOSALS?
Registered Shareholders: Your shares will be voted FOR the election of all of the Director nominees, FOR the ratification
of the appointment of our independent registered public accounting firm, and FOR the approval, on an advisory basis, of
the compensation of our NEOs.
Beneficial Holders: Your nominee cannot vote your uninstructed shares on non-routine matters such as Proposal 1
(election of Directors), or Proposal 3 (approval, on an advisory basis, of NEO compensation). Your nominee can vote your
uninstructed shares on routine matters such as Proposal 2 (ratification of the appointment of our independent
registered public accounting firm).
MAY I REVOKE MY PROXY OR CHANGE MY VOTE?
Registered Shareholders: Yes, you may change or revoke your proxy prior to the closing of the polls in any one of the
following FOUR ways:
1.
Send a written notice to our Corporate Secretary stating that you want to revoke your proxy;
2. Mail a completed and signed proxy card with a later date, but prior to the cut-off dates prior to the Annual
Meeting (which will automatically revoke the earlier proxy);
3. Vote by telephone or Internet at a later date, but prior to the cut-off dates prior to the Annual Meeting (which
will automatically revoke the earlier proxy); or
4. Vote during the Annual Meeting at www.virtualshareholdermeeting.com/LECO2024. Because 401(k) plan shares
are held in a qualified plan, you are not able to revoke or change your vote on 401(k) plan shares at the Annual
Meeting.
Beneficial Holders: Check with your broker, trustee or nominee to determine how to change your vote.
WHO COUNTS THE VOTES?
Broadridge Financial Solutions, Inc. is the independent agent who receives and tabulates the votes. They are also our
inspector of elections at the Annual Meeting.
MAY I RECEIVE FUTURE SHAREHOLDER COMMUNICATIONS OVER THE INTERNET?
Registered Shareholders: Yes. Please mark the appropriate box on your proxy card, or follow the prompts if voting by
telephone or Internet.
Beneficial Holders: Refer to the information provided by your nominee on how to select future shareholder
communications by Internet.
WHEN ARE SHAREHOLDER PROPOSALS DUE TO BE CONSIDERED FOR INCLUSION IN NEXT YEAR’S ANNUAL MEETING IN 2025?
In order to have a shareholder proposal included in our proxy materials for the 2025 Annual Meeting, a shareholder
proposal must be received in writing by the Corporate Secretary at Lincoln Electric Holdings, Inc., 22801 St. Clair
Avenue, Cleveland, Ohio 44117-1199 on or before November 18, 2024.
If shareholders want to present proposals at our 2025 Annual Meeting that are not included in Lincoln Electric’s proxy
materials, they must comply with the requirements in our Amended and Restated Code of Regulations. These include
providing a written notice containing certain information, and such notice must be received no earlier than
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LINCOLN ELECTRIC | 2024 PROXY STATEMENT
FAQS
December 20, 2024 and no later than January 19, 2025. If the Board of Directors chooses to present any information
submitted after the applicable deadlines at the 2025 Annual Meeting, then the persons named in proxies solicited by the
Board for the 2025 Annual Meeting may exercise discretionary voting power with respect to such information.
MAY I SUBMIT A NOMINATION FOR DIRECTOR?
Yes. To submit a Director nomination, a shareholder must send a written notice to the Corporate Secretary at Lincoln
Electric Holdings, Inc., 22801 St. Clair Avenue, Cleveland, Ohio 44117-1199. The notice must include information
required by our Amended and Restated Code of Regulations, including, among other things, information about the
shareholder and the person he or she intends to nominate, as well as a representation that the shareholder intends to
solicit proxies in support of nominees other than the nominees of the Board. For the 2025 Annual Meeting, nominations
must be received in the Corporate Secretary’s Office no earlier than December 20, 2024 and no later than January 19,
2025.
For the 2024 Annual Meeting, nominations must have been received by the Corporate Secretary’s Office no earlier than
December 21, 2023 and no later than the close of business on January 20, 2024.
HOW DO I CONTACT LINCOLN ELECTRIC?
FOR GENERAL INFORMATION:
Lincoln Electric Holdings, Inc.
22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
Attention: Amanda Butler,
Vice President, Investor
Relations & Communications
TO CONTACT THE DIRECTORS:
Lincoln Electric Holdings, Inc.
22801 St. Clair Avenue
Cleveland, Ohio 44117-1199
Attention: Corporate Secretary
Please name any specific intended Board recipient(s) in
the communication. Prior to forwarding any
correspondence, the Corporate Secretary will review the
correspondence and, at his or her discretion, may not
forward certain items if they are deemed of a frivolous
nature or otherwise inappropriate for the Board's
consideration. In such cases, some of that
correspondence may be forwarded elsewhere within
Lincoln Electric for review and possible response.
PLEASE VISIT OUR WEBSITE AT WWW.LINCOLNELECTRIC.COM FOR CURRENT DEVELOPMENTS AT LINCOLN ELECTRIC. THE
INFORMATION ON OUR WEBSITE IS NOT INCORPORATED BY REFERENCE INTO THIS PROXY STATEMENT OR ANY OF OUR PERIODIC
REPORTS.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
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Appendix A—Definitions and Non-Gaap
Financial Measures
The discussion of our results in the CD&A and other sections of this Proxy Statement includes reference to our EBIT,
EBITB, Adjusted net income, Adjusted diluted earnings per share, Adjusted EBIT, Adjusted operating income, Adjusted
operating income margin, Adjusted effective tax rate, Adjusted Return on Invested Capital (Adjusted ROIC), Average
Operating Working Capital to Sales (AOWC/Sales), Total Shareholder Return (TSR), Organic Sales, Cash Conversion and
Free Cash Flow (FCF) performance. Some of these metrics are considered Non-GAAP financial measures, as
management uses various GAAP and non-GAAP financial measures in assessing and evaluating our underlying
operating performance. Non-GAAP financial measures exclude the impact of special items on our reported financial
results. Non-GAAP financial measures should be read in conjunction with the generally accepted accounting principles
in the United States (‘‘GAAP’’), as non-GAAP measures are a supplement to, and not a replacement for, GAAP financial
measures. The following defines the financial and non-GAAP financial measures discussed in the CD&A and other
sections of this Proxy Statement. Certain reclassifications have been made to prior year financial statements and
financial measures to conform to current year classifications.
ADJUSTED DILUTED EARNINGS PER SHARE
Adjusted Diluted Earnings Per Share is defined as reported Diluted Earnings Per Share excluding certain disclosed
special items.
ADJUSTED EBIT
Adjusted EBIT is defined as reported EBIT excluding certain disclosed special items.
ADJUSTED EFFECTIVE TAX RATE
Adjusted Effective Tax Rate is defined as reported Effective Tax Rate excluding the tax effect of certain disclosed special
items.
ADJUSTED NET INCOME
Adjusted Net Income is defined as reported Net Income excluding certain disclosed special items.
ADJUSTED NET INCOME FOR COMPENSATION PURPOSES
Adjusted Net Income for Compensation Purposes is defined as reported Net Income excluding certain disclosed special
items and other adjustments as approved by the Compensation and Executive Development Committee.
ADJUSTED OPERATING INCOME
Adjusted Operating Income is defined as reported Operating Income excluding certain disclosed special items.
ADJUSTED OPERATING INCOME INCREMENTAL MARGIN
Adjusted Operating Income Incremental Margin is defined as the change in Adjusted Operating Income between two
periods divided by the change in Net sales between the same two periods.
ADJUSTED OPERATING INCOME MARGIN
Adjusted Operating Income Margin is defined as Adjusted Operating Income divided by Net sales.
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
A-1
APPENDIX A
ADJUSTED RETURN ON INVESTED CAPITAL (ADJUSTED ROIC)
Adjusted ROIC is defined as rolling 12 months of Adjusted net income excluding tax-effected interest income and
expense divided by invested capital.
ADJUSTED REVENUE FOR COMPENSATION PURPOSES (ADJUSTED REVENUE)
Adjusted Revenue for Compensation Purposes is defined as Net sales calculated at budgeted exchange rates and
adjusted for the results of businesses acquired during the year. Additionally, a price collar may be approved by the
Committee to limit the impact of pricing on the metric, resulting in growth of the metric focusing primarily on organic
sales volumes. For 2023, a +/- 2% price collar was approved by the Compensation and Executive Development
Committee for use when calculating this metric. The price collar limits the impact of either price increases or decreases
to 2%. Net sales is a representative measure of Adjusted Revenue for Compensation Purposes.
AVERAGE OPERATING WORKING CAPITAL TO SALES (AOWC/SALES)
Average operating working capital to Net Sales (AOWC/Sales) is defined as the sum of Accounts receivable, Inventories
and contract assets less Trade accounts payable and contract liabilities as of a period end divided by annualized rolling
three months of Net sales.
AVERAGE OPERATING WORKING CAPITAL TO SALES FOR COMPENSATION PURPOSES (AOWC/SALES FOR COMPENSATION PURPOSES)
Average operating working capital to Net Sales for Compensation Purposes (AOWC/Sales for Compensation Purposes) is
defined as the sum of Accounts receivable, Inventories (excluding LIFO inventory reserves) and contract assets less
Trade accounts payable and contract liabilities as of a period end divided by annualized rolling three months of Net
sales.
CASH CONVERSION
Cash Conversion is defined as Free Cash Flow divided by Adjusted Net Income.
EBIT
EBIT is an amount equal to earnings before interest and tax defined as operating income plus Other income (expense).
EBITB
EBITB is an amount equal to earnings before interest, tax and bonus, calculated at budgeted exchange rates and
adjusted for special items as determined by management. The adjustments for special items include such items as
rationalization charges, certain asset impairment charges, the gains and losses on certain transactions including the
disposal of assets and the results of businesses acquired during the year. Adjusted Operating Income is a representative
measure of EBITB.
FREE CASH FLOW (FCF)
Free Cash Flow is defined as Net cash provided by operating activities less Capital expenditures.
ORGANIC SALES
Organic Sales is defined as sales excluding the effects of foreign currency and acquisitions.
RETURN ON INVESTED CAPITAL (ROIC)
Return on invested capital (ROIC) is defined as rolling 12 months of Net income excluding tax-effected interest income
and expense divided by invested capital.
RETURN ON INVESTED CAPITAL (ROIC) FOR COMPENSATION PURPOSES
ROIC for Compensation Purposes is calculated by an independent third-party and is adjusted for certain transactions as
approved by the Compensation and Executive Development Committee.
A-2
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
APPENDIX A
TOTAL SHAREHOLDER RETURN (TSR)
TSR is an amount equal to the net stock price change for our common stock plus the reinvestment of dividends paid
over the prescribed period of time.
ADJUSTED OPERATING INCOME
The following table presents a reconciliation of Operating income as reported to Adjusted operating income for the
years ended December 31, 2021 to 2023:
($ in thousand)
Operating income (as reported)
Special items (pre-tax):
Rationalization and asset impairment charges
Acquisition transaction costs
Amortization of step up in value of acquired inventories
Adjusted operating income
Adjusted operating income margin
Year Ended December 31,
2023
2022
2021
$717,849
$612,336
$461,669
(11,314)
0
12,252
11,788
6,003
1,106
9,827
1,923
5,804
$718,787
$631,233
$479,223
17.1%
16.8%
14.8%
ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE
The following table presents reconciliations of Net income and Diluted earnings per share as reported to Adjusted net
income and Adjusted diluted earnings per share for the years ended December 31, 2021 to 2023:
($ in thousands except per share amounts)
Year Ended December 31,
Net income (as reported)
Special items:
Rationalization and asset impairment charges
Pension settlement net charges
Acquisition transaction costs
Amortization of step up in value of acquired inventories
Tax effect of Special items
Adjusted net income
Diluted earnings per share (as reported)
Special items per share
Adjusted diluted earnings per share
2023
2022
2021
$545,248
$472,224
$276,466
(11,314)
845
0
12,252
2,537
11,788
(4,273)
6,003
1,106
(1,192)
9,827
126,502
1,923
5,804
(47,188)
$547,922
$485,656
$373,334
$
9.37
$
8.04
$
4.60
0.04
0.23
1.62
$
9.41
$
8.27
$
6.22
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
A-3
APPENDIX A
RETURN ON INVESTED CAPITAL (ROIC)
The following table presents calculations of Reported and Adjusted ROIC for the years ended December 31, 2021 to 2023:
($ in thousands)
Net income [as reported]
Plus: Interest expense (after-tax)
Less: Interest income (after-tax)
Net operating profit after taxes
Special Items:
Rationalization and asset impairment charges
Acquisition transaction costs
Pension settlement net charges
Amortization of step up in value of acquired inventories
Gains on asset disposals
Tax effect of Special Items
Year Ended December 31,
2023
2022
2021
$545,248
$472,224
$276,466
38,050
5,033
23,276
1,202
17,794
1,172
$578,265
$494,298
$293,088
(11,314)
0
845
12,252
(1,646)
2,537
11,788
6,003
(4,273)
1,106
0
9,827
1,923
126,502
5,804
0
(1,192)
(47,188)
Adjusted net operating profit after taxes
$580,939
$507,730
$389,956
Invested Capital
Short-term debt
Long-term debt, less current portion
Total debt
Total equity
Invested capital
ROIC as reported
Adjusted ROIC
CASH CONVERSION
December 31,
2023
December 31,
2022
December 31,
2021
$
2,439
$
93,483
$
52,730
1,102,771
1,110,396
1,105,210
1,203,879
1,308,852
1,034,041
717,089
769,819
863,909
$2,414,062
$2,237,920
$1,633,728
24.0%
24.1%
22.1%
22.7%
17.9%
23.9%
The following table presents calculations of Cash Conversion for the years ended December 31, 2021 to 2023:
($ in thousands)
Net cash provided by operating activities
Less: Capital expenditures
Free Cash Flow
Adjusted net income
Cash Conversion
A-4
LINCOLN ELECTRIC | 2024 PROXY STATEMENT
Year Ended December 31,
2023
2022
2021
$667,542
$383,386
$365,063
90,987
$576,555
$547,922
71,883
$311,503
$485,656
62,531
$302,532
$373,334
105%
64%
81%
2023 FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
or
□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-1402
LINCOLN ELECTRIC HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Ohio
(State or other jurisdiction of
incorporation or organization)
22801 St. Clair Avenue, Cleveland, Ohio
(Address of principal executive offices)
34-1860551
(I.R.S. Employer Identification No.)
44117
(Zip Code)
(216) 481-8100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Shares, without par value
Trading Symbol
LECO
Name of each exchange on which registered
The NASDAQ Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No □
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes □ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒ No □
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☒ No □
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,
or an emerging growth company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ ‘‘smaller reporting company’’ and ‘‘emerging
growth company’’ in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☒
□
Accelerated filer
Smaller reporting company
Emerging growth company
□
□
□
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(c)) by the registered public accounting firm that
prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in
the filing reflect the correction of an error to previously issued financial statements. □
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □ No ☒
The aggregate market value of the common shares held by non-affiliates as of June 30, 2023 was $11,222,091,898 (affiliates, for this purpose, have
been deemed to be Directors and Executive Officers of the Company and certain significant shareholders).
The number of shares outstanding of the registrant’s common shares as of January 31, 2024 was 56,822,805.
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report on Form 10-K incorporates by reference certain information from the registrant’s definitive proxy statement with respect
to the registrant’s 2024 Annual Meeting of Shareholders.
TABLE OF CONTENTS
PART I
Item 1.
Business
Item 1A.
Risk Factors
Item 1B.
Unresolved Staff Comments
Item 1C.
Cybersecurity
Item 1D.
Information About Our Executive Officers
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Properties
Legal Proceedings
Mine Safety Disclosures
PART II
Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Item 9.
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
Item 9A.
Controls and Procedures
Item 9B.
Other Information
Item 9C.
Disclosure Regarding Foreign Jursidictions that Prevent Inspections
Item 10.
Directors, Executive Officers and Corporate Governance
Item 11.
Executive Compensation
PART III
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Item 13.
Certain Relationships and Related Transactions, and Director Independence
Item 14.
Principal Accountant Fees and Services
Item 15.
Exhibits and Financial Statement Schedules
Item 16.
Form 10-K Summary
Signatures
PART IV
Page
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5
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12
13
14
16
16
16
17
17
32
34
34
34
34
34
35
35
35
35
35
35
39
40
PART I
ITEM 1. BUSINESS
General
As used in this Annual Report on Form 10-K, the term "Company," except as otherwise indicated by the context, means
Lincoln Electric Holdings, Inc. and its wholly-owned and majority-owned subsidiaries for which it has a controlling
interest. The Lincoln Electric Company began operations in 1895 and was incorporated under the laws of the State of
Ohio in 1906. During 1998, The Lincoln Electric Company reorganized into a holding company structure, and Lincoln
Electric Holdings, Inc. became the publicly-held parent of Lincoln Electric subsidiaries worldwide, including The
Lincoln Electric Company.
The Company is one of only a few worldwide broad-line manufacturers of welding, cutting and brazing products. The
Company is the world leader in the design, development and manufacture of arc welding products, automated joining,
assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global position
in brazing and soldering alloys.
The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment,
plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas
regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting,
material handling, module assembly, and end of line testing.
The arc welding power sources and wire feeding systems manufactured by the Company range in technology from basic
units used for light manufacturing and maintenance to highly sophisticated robotic applications for high volume
production welding and fabrication. Three primary types of arc welding consumables are produced: (1) coated manual or
stick electrodes; (2) solid wire produced in coil, reel or drum forms for continuous feeding in mechanized welding; and
(3) cored wire produced in coil form for continuous feeding in mechanized welding.
The Company has, through wholly-owned subsidiaries, manufacturing facilities located in the United States, Australia,
Austria, Brazil, Canada, China, Colombia, France, Germany, India, Italy, Mexico, Poland, Portugal, Romania, Russia,
South Korea, Spain, Turkey and the United Kingdom.
The Company’s business units are aligned into three operating segments. The operating segments consist of Americas
Welding, International Welding and The Harris Products Group. The Americas Welding segment includes welding
operations in North and South America. The International Welding segment includes welding operations in Europe,
Africa, Asia and Australia. The Harris Products Group includes the Company’s global cutting, soldering and brazing
businesses, specialty gas equipment, as well as the retail business in the United States.
Customers
The Company’s products are sold in both domestic and international markets. In the Americas, products are sold
principally through industrial distributors, retailers and also directly to users of welding products (OEMs, manufacturers
and integrators). Outside of the Americas, the Company has an international sales organization comprised of Company
employees and agents who sell products from the Company’s various manufacturing sites to distributors and product
users.
1
The Company’s major end-user markets include:
general fabrication,
energy (oil and gas, power generation and process industries),
heavy industries (heavy fabrication, ship building and maintenance and repair),
automotive and transportation, and
construction and infrastructure.
The Company is not dependent on a single customer or a few customers and no individual customer currently accounts
for more than ten percent of total Net sales. However, the loss of a large customer could have an adverse effect on the
Company’s business. The Company’s operating results are sensitive to changes in general economic conditions,
including an increase in interest rates, inflationary pressures and fluctuations in foreign currency rates. The arc welding
and cutting industry is generally a mature industry in developed markets such as North America and Western Europe and
is cyclical in nature. Overall demand for arc welding and cutting products is largely determined by economic cycles and
the level of capital spending in manufacturing and other industrial sectors. The Company experiences some variability in
reported period-to-period results as historical demand for the Company’s products is mildly seasonal with generally
higher demand in the second and third quarters. See "Item 1A. Risk Factors" for further discussion regarding risks
associated with customers, general economic conditions and demand.
Competition
Conditions in the arc welding and cutting industry are highly competitive. The Company believes it is the world’s largest
manufacturer of consumables and equipment with relatively few major broad-line competitors worldwide, but numerous
smaller competitors in specific geographic markets. The Company continues to pursue strategies to heighten its
competitiveness in domestic and international markets, which includes positioning low cost manufacturing facilities in
most geographical markets. Competition in the arc welding and cutting industry is based on brand preference, product
quality, price, performance, warranty, delivery, service and technical support. The Company believes its performance
against these factors has contributed to the Company’s position as the leader in the industry.
Most of the Company’s products may be classified as standard commercial articles and are manufactured for stock. The
Company believes it has a competitive advantage in the marketplace because of its highly trained technical sales force
and the support of its welding research and development staff to assist customers in optimizing their welding
applications. This allows the Company to introduce its products to new users and to establish and maintain close
relationships with its customers. This close relationship between the technical sales force and the direct customers,
together with its supportive relationship with its distributors, who are particularly interested in handling the broad range
of the Company’s products, is an important element of the Company’s market success and a valuable asset of the
Company.
Raw Materials
The principal raw materials essential to the Company’s business are steel, electronic components, engines, brass, copper,
silver, aluminum alloys, robotic components and various chemicals, all of which are normally available for purchase in
the open market.
Patents and Trademarks
The Company holds many valuable patents, primarily in arc welding, and actively protects its innovations as research
and development has progressed in both the United States and major international jurisdictions. The Company believes
its trademarks are an important asset and aggressively pursues brand management.
2
Environmental Regulations
The Company’s facilities are subject to environmental regulations. To date, compliance with these environmental
regulations has not had a material adverse effect on the Company’s earnings. The Company is ISO 14001 certified at
most significant manufacturing facilities in North America and Europe and is progressing towards certification at its
remaining facilities worldwide. In addition, the Company is ISO 9001 certified at 46 facilities worldwide.
The Company ensures compliance as well as the continuous improvement of the environmental performance of its
products and operations through its global Environmental, Health, Safety and Quality (“EHS&Q”) systems. The
Company’s systems are guided by Corporate EHS&Q Policy, global directives and corporate standards that establish
consistent guidelines for the management, measurement and reporting of environmental, health and safety activities, as
well as quality across the Company’s global platform. The Company’s products support our customers' sustainability
initiatives through enhanced worker safety, reduced emissions, improved energy efficiency, reduced waste and
regulatory compliance.
International Operations
The Company conducts a significant amount of its business and has a number of operating facilities in countries outside
the United States. As a result, the Company is subject to business risks inherent to non-U.S. activities, including
political uncertainty, import and export limitations, environmental regulation, exchange controls and currency
fluctuations.
Human Capital Management
Employee Profile
The Company’s employees are its most valuable asset as they represent the foundation of the Company and its future
success. The number of persons employed by the Company worldwide at December 31, 2023 was approximately
12,000.
Employee Engagement
The Company strongly believes that employee engagement drives better business results and that a highly engaged
workforce can increase innovation, productivity and bottom-line performance while reducing costs. The Company
engages employees through individual, small group and town hall meetings, its Advisory Board, global intranet,
employee surveys, resource groups, health and safety communications and initiatives, training and development,
employee wellness programs, and an ethics hotline, among other vehicles.
Talent Management and Development
In order to ensure the competitiveness of our workforce as well as a strong succession pipeline, the Company provides
development opportunities to advance skills, knowledge and expertise. The Company’s programs include formal
leadership, management and professional development programs, tuition reimbursement for external accredited
programs, mentoring, self-guided online courses, instructor-led programs and special project and rotational assignments
that can lead to extensive global exposure.
Diversity and Inclusion
The Company has a longstanding commitment to equal opportunity in all aspects of employment—including employee
compensation, job placement and promotion regardless of gender, race or other personal characteristics. The Company’s
culture is underpinned by its core values, including the guiding principles championed by James F. and John C. Lincoln
when they founded Lincoln Electric over 125 years ago – The Golden Rule: Treat Others How You Would Like to Be
Treated. The Company has implemented several measures that focus on accountability for making progress in diversity.
3
The CEO and other senior leaders have diversity and inclusion objectives as part of their annual performance goals. The
Company focuses on diverse talent sourcing strategies and partners with external organizations that develop and supply
diverse talent. The Company reviews and updates its human resources processes and benchmarks roles and
compensation externally on a regular basis to help prevent bias and promote a diverse and inclusive workplace.
Compensation
The Company’s compensation program is designed to attract and retain exceptional employees and to maintain a strong
pay for performance culture. The Company has designed its compensation system to reflect current best practices,
including setting base pay below the competitive market for each position, targeting incentive-based cash compensation
above the competitive market and promoting quality corporate governance in compensation decisions.
The Company’s annual talent and succession planning process reviews 100% of its global professional staff worldwide
to support the development of a talent pipeline for critical roles in general management, engineering and operations.
This evaluation includes the Company’s CEO, as well as segment business and functional leaders who focus on high
potential and diverse talent, as well as planning succession within the Company’s most critical roles.
The Company believes that the practices outlined above result in sustained increases in shareholder value and reflect its
compensation philosophy of aligning long-term pay and performance.
Health and Safety
Health and safety is a priority for the Company, and its vision is an accident-free workplace with zero safety incidents.
The Company follows a rigorous health and safety program that adheres to stringent safety standards and best practices
to ensure its manufacturing operations, related processes and products do not negatively impact the health and welfare of
its employees, customers and neighbors.
In addition to Company-led programs and employee engagement in behavior-based safety and wellness committees, the
Company actively engages in health and safety standard development committees at key industry organizations such as
the American Welding Society, the International Institute of Welding and across various International Standards
Organization committees to ensure best practices for its employees and end users.
The Company’s standard health and safety programs adhere to stringent safety standards and best practices to ensure that
its operations, related processes and products do not negatively impact the health and welfare of its employees,
customers or community.
Community Engagement
The Company is an active member in the communities in which it operates and where its employees live. The Company
participates in community meetings, local business associations, offers plant visits, provides grants to nonprofit
organizations and donates resources and time through in-kind gifts, employee volunteerism and non-profit board service.
The Company’s partnership with academia includes executive-led lectures and donations of equipment and engineering
expertise to support lab and research initiatives. In addition, the Company supports community educational / career
programming among secondary and high school students in order to address skills gaps in the industry and maintain
awareness of attractive career pathways in manufacturing.
See "Part I, Item 1D" for information regarding the Company’s executive officers, which is incorporated herein by
reference.
4
Website Access
The Company’s website, www.lincolnelectric.com, is used as a channel for routine dissemination of important
information, including news releases and financial information. The Company posts its filings as soon as reasonably
practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC"),
including annual, quarterly and current reports on Forms 10-K, 10-Q and 8-K, respectively; proxy statements; and any
amendments to those reports or statements. The Company also posts its Code of Corporate Conduct and Ethics on its
website. All such postings and filings are available on the Company’s website free of charge. In addition, this website
allows investors and other interested persons to sign up to automatically receive e-mail alerts when news releases and
financial information is posted on the website. The SEC also maintains a website, www.sec.gov, that contains reports,
proxy and information statements and other information regarding issuers that file electronically with the SEC. The
content on any website referred to in this Annual Report on Form 10-K is not incorporated by reference into this Annual
Report unless expressly noted.
ITEM 1A. RISK FACTORS
From time to time, information we provide, statements by our employees or information included in our filings with the
SEC may contain forward-looking statements that are not historical facts. Those statements are "forward-looking" within
the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be
identified by the use of words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe," "forecast,"
"guidance" or words of similar meaning. Actual results may differ materially from such statements due to a variety of
factors that could adversely affect the Company’s operating results. Forward-looking statements, and our future
performance, operating results, financial position and liquidity, are subject to a variety of factors that could materially
affect results, including those risks described below. Forward-looking statements made in this report speak only as of the
date of the statement, and, except as required by law, we undertake no obligation to update those statements.
Comparisons of results for current and any prior periods are not intended to express any future trends or indications of
future performance, unless expressed as such, and should only be viewed as historical data.
In the ordinary course of our business, we face various strategic, operating, compliance and financial risks. These risks
could have a material impact on our business, financial condition, operating results and cash flows. Our Enterprise Risk
Management ("ERM") process seeks to identify and address significant risks. Our ERM process is a company-wide
initiative that is designed with the intent of prioritizing risks and allocating appropriate resources to address such risks.
We use the integrated risk framework of the Committee of Sponsoring Organizations to assess, manage and monitor
risks.
Management has identified and prioritized critical risks based on the severity and likelihood of each risk and assigned an
executive to address each major identified risk area and lead action plans to monitor and mitigate risks, where possible.
Our Board of Directors provides oversight of the ERM process and systematically reviews identified critical risks. The
Audit Committee also reviews major financial risk exposures and the steps management has taken to monitor and control
them.
Our goal is to proactively manage risks in a structured approach and in conjunction with the strategic planning process,
with the intent to preserve and enhance shareholder value. However, these and other risks and uncertainties could cause
our results to vary materially from recent results or from our anticipated future results. The risk factors and uncertainties
described below, together with information incorporated by reference or otherwise included elsewhere in this Annual
Report on Form 10-K, should be carefully considered. Although the risks are organized by headings, and each risk is
discussed separately, many are interrelated. Additional risks and uncertainties of which we are currently unaware or that
we currently believe to be immaterial may also adversely affect our business. Readers should not interpret the disclosure
of any risk factor to imply that the risk has not yet already materialized.
5
Risks Related to Economic Conditions
General economic, financial and market conditions may adversely affect our financial condition, results of
operations and access to capital markets.
Our operating results are sensitive to changes in general economic conditions. Recessionary economic cycles, global
supply chain disruptions, higher logistics costs, higher interest rates, inflation, higher raw materials costs, higher labor
costs, trade barriers in the world markets, financial turmoil related to sovereign debt and changes in tax laws or trade
laws or other economic factors affecting the countries and industries in which we do business could adversely affect
demand for our products. An adverse change in demand could impact our results of operations, collection of accounts
receivable and our expected cash flow generation from current and acquired businesses, which may adversely affect our
financial condition, results of operations and access to capital markets.
In March 2022, in response to Russia’s invasion of Ukraine, the Company announced it had ceased operations in Russia
and implemented plans to support its Russian employees. Although the Company’s Net sales and Total assets in Russia
were less than 1% of consolidated Net sales and Total assets for the year ended December 31, 2023 and 2022, the
Russia-Ukraine conflict and sanctions imposed globally may result in economic and supply chain disruptions, the
ultimate financial impact of which cannot be reasonably estimated at this time. The Company continues to monitor the
Russia-Ukraine conflict and its potential impacts.
We conduct our sales and distribution operations on a worldwide basis and maintain manufacturing facilities in a
number of foreign countries, which subjects us to risks associated with doing business outside the United States.
As a growing global enterprise, the share of sales and profits we derive from our international operations and exports
from the United States is significant. This trend increases our exposure to the performance of many developing
economies in addition to the developed economies outside of the United States. If international economies were to
experience significant slowdowns, it could adversely affect our financial condition, results of operations and cash flows.
There are a number of risks in doing business internationally, which may impede our ability to achieve our strategic
objectives relating to our foreign operations, including:
Political and economic uncertainty and social turmoil;
Corporate governance and management challenges in consideration of the numerous U.S. and foreign laws and
regulations, including regulations relating to import-export control, technology transfer restrictions, repatriation
of earnings and funds, exchange controls, labor regulations, nationalization, tariffs, data protection and privacy
requirements, anti-boycott provisions and anti-bribery laws (such as the Foreign Corrupt Practices Act and the
Organization for Economic Cooperation and Development Convention);
International terrorism and hostilities;
Changes in the global regulatory environment, including revised or newly created laws, regulations or standards
relating to the Company, our products or the markets in which we operate; and
Significant fluctuations in relative currency values; in particular, an increase in the value of the U.S. dollar
against foreign currencies could have an adverse effect on our profitability and financial condition, as well as
the imposition of exchange controls, currency devaluations and hyperinflation.
The cyclical nature and maturity of the arc welding and cutting industry in developed markets may adversely affect
our performance.
The arc welding and cutting industry is generally a mature industry in developed markets such as North America and
Western Europe and is cyclical in nature. Overall demand for arc welding and cutting products is largely determined by
the level of capital spending in manufacturing and other industrial sectors, and the welding industry has historically
6
experienced contraction during periods of slowing industrial activity. If economic, business and industry conditions
deteriorate, capital spending in those sectors may be substantially decreased, which could reduce demand for our
products and have an adverse effect on our revenues and results of operations.
Risks Related to Manufacturing and Operations
Economic and supply disruptions associated with events beyond our control, such as war, acts of terror, political
unrest, pandemic, labor disputes, natural disasters could adversely affect our supply chain and distribution channels
or result in loss of sales and customers.
Our facilities and operations, and the facilities and operations of our suppliers and customers, could be disrupted by
events beyond our control, such as war, political unrest, pandemics, labor disputes and natural disasters, including events
caused by climate change. Any such disruption could cause delays in the production and distribution of our products and
the loss of sales and customers. Insurance proceeds may not adequately compensate the Company for the losses.
Availability of and volatility in energy costs or raw material prices may adversely affect our performance.
In the normal course of business, we are exposed to market risks related to the availability of and price fluctuations in
the purchase of energy and commodities used in the manufacture of our products (primarily steel, brass, copper, silver,
aluminum alloys, electronic components, electricity and natural gas). The availability and prices for energy costs and
raw materials, including steel, nonferrous metals and chemicals, are subject to volatility and are influenced by worldwide
economic conditions. They are also influenced by import duties and tariffs speculative action, world supply and demand
balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived
shortages, government trade practices and regulations and other factors.
Increases in the cost of raw materials and components may adversely affect our profitability if we are unable to pass
along to our customers these cost increases in the form of price increases or otherwise reduce our cost of goods sold.
Although most of the raw materials and components used in our products are commercially available from a number of
sources and in adequate supply, any disruption in the availability of such raw materials and components, our inability to
timely or otherwise obtain substitutes for such items, or any deterioration in our relationships with or the financial
viability of our suppliers could adversely affect our business.
We are subject to risks relating to our information systems and data.
The conduct and management of our business relies extensively on information systems, which contain confidential
information related to our customers, suppliers and employees and other proprietary business information. We maintain
some of these systems and are also dependent on a number of critical information technology and other infrastructure
services provided by third parties relating to, among other things, human resources, electronic communication services
and finance functions. Like many companies, our information systems and those of third parties who provide products or
services to us may be subject to cybersecurity threats and cybersecurity incidents. To date, no such cybersecurity
incidents have had a material impact on our business or operations. However, cybersecurity threats or cybersecurity
incidents involving our systems or those of our third party service providers could interrupt our ability to manage and
operate the business, impact data, and adversely affect our results of operations and financial condition. The Company
continues to invest in cybersecurity, including measures intended to maintain and enhance cybersecurity resilience, and
the Company’s cybersecurity risks are regularly monitored by the Audit Committee of our Board of Directors.
Nevertheless, due to the nature of cybersecurity threats, there can be no assurance that our preventive efforts can fully
mitigate the risks of all cybersecurity threats and cybersecurity incidents, and a significant cybersecurity incident could
result in financial loss, unfavorable publicity, damage to our reputation, loss of data, including our trade secrets and
other competitive information, allegations by our customers and business partners that we have not performed our
contractual obligations, litigation by affected parties, governmental investigations, and related monetary damages,
injunctive requirements, and fines or other sanctions. Any of these events could have an adverse effect on our results of
operations and financial condition.
7
Risks Related to Human Capital
Our operations depend on maintaining a skilled workforce, and any interruption in our workforce could negatively
impact our results of operations and financial condition.
Our success depends in part on the efforts and abilities of our management team and key employees. Their skills,
experience and industry knowledge significantly benefit our operations and performance. Our future success will also
depend on our ability to identify, attract and retain highly qualified managerial and technical (including research and
development) personnel. Competition for these individuals is intense and compensation rates are increasing due to lower
labor availability. Under these conditions, we may not succeed in identifying, attracting or retaining qualified personnel.
With our strategy to expand internationally into developing markets, we may incur additional risks as some developing
economies lack a sufficiently trained labor pool.
Any interruption of our workforce, including rationalization efforts related to the integration of acquired businesses,
interruptions due to unionization efforts, changes in labor relations or shortages of appropriately skilled individuals
could impact our results of operations and financial condition.
Risks Related to Business Strategy
We may not be able to complete our acquisition or divestiture strategies, successfully integrate acquired businesses
and in certain cases we may be required to retain liabilities for certain matters.
Part of our business strategy is to pursue targeted business acquisition opportunities, including foreign investment
opportunities. We cannot be certain that we will be successful in pursuing potential acquisition candidates or that the
consequences of any acquisition would be beneficial to us. Future acquisitions may expose us to unexpected liabilities
and involve the expenditure of significant funds and management time. Further, we may not be able to successfully
integrate an acquired business with our existing businesses or recognize the expected benefits from any completed
acquisition. Integration efforts may include significant rationalization activities that could be disruptive to the business.
Our current operational cash flow is sufficient to fund our acquisition plans, but a significant acquisition could require
access to the capital markets.
Additionally, from time to time we may identify assets for strategic divestitures that would increase capital resources
available for other activities and create organizational and operational efficiencies. Various factors could materially
affect our ability to dispose of such assets or complete announced divestitures, including the receipt of approvals of
governmental agencies or third parties and the availability of purchasers willing to acquire the interests or purchase the
assets on terms and at prices acceptable to us.
Sellers typically retain certain liabilities or indemnify buyers for certain matters. The magnitude of any such retained
liability or indemnification obligation may be difficult to quantify at the time of the transaction and ultimately may be
material. Also, as is typical in divestitures, third parties may be unwilling to release us from guarantees or other credit
support provided prior to the sale of the divested assets. As a result, after a divestiture, we may remain secondarily liable
for the obligations guaranteed or supported to the extent that the buyer of the assets fails to perform these obligations.
If we cannot continue to develop, manufacture and market products that meet customer demands, continue to enforce
the intellectual property rights on which our business depends or if third parties assert that we violate their
intellectual property rights, our revenues, gross margins and results of operations may suffer.
Our continued success depends, in part, on our ability to continue to meet our customers’ needs for welding and cutting
products through the introduction of innovative new products and the enhancement of existing product design and
performance characteristics. We must remain committed to product research and development and customer service in
order to remain competitive. We cannot be assured that new products or product improvements, once developed, will
meet with customer acceptance and contribute positively to our operating results, or that we will be able to continue our
8
product development efforts at a pace to sustain future growth. Further, we may lose customers to our competitors if they
demonstrate product design, development or manufacturing capabilities superior to ours.
We rely upon patent, trademark, copyright and trade secret laws in the United States and similar laws in foreign
countries, as well as agreements with our employees, customers, suppliers and other third parties, to establish and
maintain our intellectual property rights. However, any of our intellectual property rights could be challenged,
invalidated or circumvented, or our intellectual property rights may not be sufficient to provide a competitive advantage.
Further, the laws and their application in certain foreign countries do not protect our proprietary rights to the same extent
as U.S. laws. Accordingly, in certain countries, we may be unable to protect our proprietary rights against unauthorized
third-party copying or use, which could impact our competitive position.
Further, third parties may claim that we or our customers are infringing upon their intellectual property rights. Even if
we believe that those claims are without merit, defending those claims and contesting the validity of patents can be time
consuming and costly. Claims of intellectual property infringement also might require us to redesign affected products,
enter into costly settlements or license agreements, pay costly damage awards or face a temporary or permanent
injunction prohibiting us from manufacturing, marketing or selling certain of our products.
The competitive pressures we face could harm our revenue, results of operations and prospects.
We operate in a highly competitive global environment and compete in each of our businesses with other broad-line
manufacturers and numerous smaller competitors specializing in particular products. We compete primarily on the basis
of brand, product quality, price, performance, warranty, delivery, service and technical support. We have previously
initiated, and may in the future initiate significant rationalization activities to align our business with market conditions
and improve our overall competitiveness, including with respect to the integration of acquired businesses. Such
rationalization activities could fail to deliver the desired competitive cost structure and could result in disruptions in
customer service. If our products, services, support and cost structure do not enable us to compete successfully based on
any of the criteria listed above, our revenue, results of operations and prospects could suffer.
Further, in the past decade, the arc welding industry in the United States and other developed countries has been subject
to increased levels of foreign competition as low cost imports have become more readily available. Our competitive
position could be harmed if new or emerging competitors become more active in the arc welding business. For example,
while steel manufacturers traditionally have not been significant competitors in the domestic arc welding industry, some
foreign integrated steel producers manufacture selected consumable arc welding products and robotic arm manufacturers
compete in the automated welding and cutting space. In addition, in certain markets of the world, distributors
manufacture and sell arc welding products. Our sales and results of operations, as well as our plans to expand in some
foreign countries, could be adversely affected by this practice.
We may incur additional restructuring charges as we continue to contemplate rationalization actions in an effort to
optimize our cost structure and may not achieve the anticipated savings and benefits of these actions.
We may take additional actions in the future to further optimize our cost structure and improve the efficiency of our
operations, which will reduce our profitability in the periods incurred. As a result of these actions, we will likely
continue to incur charges, which may include but are not limited to asset impairments, employee severance costs,
charges for pension and other postretirement contractual benefits and pension settlements, any of which could be
significant, and could adversely affect our financial condition and results of operations. In addition, we may not realize
anticipated savings or benefits from past or future rationalization plans in full or in part or within the time periods we
expect. Failure to realize anticipated savings or benefits from our cost reduction actions could have a material adverse
effect on our business, financial condition, liquidity, results of operations and cash flows. For more information
regarding rationalization plans, refer to the rationalization and asset impairment related disclosure under Note 7 to the
Company’s consolidated financial statements.
9
Risks Related to Legal, Compliance and Regulatory Matters
We are a co-defendant in litigation alleging asbestos induced illness. Liabilities relating to such litigation could
reduce our profitability and impair our financial condition.
As of December 31, 2023, we were a co-defendant in cases alleging asbestos induced illness involving claims by
approximately 1,387 plaintiffs. In each instance, we are one of a large number of defendants. The asbestos claimants
allege that exposure to asbestos contained in welding consumables caused the plaintiffs to develop adverse pulmonary
diseases, including mesothelioma and other lung cancers.
Since January 1, 1995, we have been a co-defendant in asbestos cases that have been resolved as follows: 56,986 of
those claims were dismissed, 23 were tried to defense verdicts, 7 were tried to plaintiff verdicts (which were reversed or
resolved after appeal), 1 was resolved by agreement for an immaterial amount and 1,015 were decided in favor of the
Company following summary judgment motions.
The long-term impact of the asbestos loss contingency, in the aggregate, on operating results, operating cash flows and
access to capital markets is difficult to assess, particularly since claims are in many different stages of development and
we benefit significantly from cost-sharing with co-defendants and insurance carriers. While we intend to contest these
lawsuits vigorously, and believe we have applicable insurance relating to these claims, there are several risks and
uncertainties that may affect our liability for personal injury claims relating to exposure to asbestos, including the future
impact of changing cost sharing arrangements or a change in our overall trial experience.
Asbestos use in welding consumables in the U.S. ceased in 1981.
We may incur material losses and costs as a result of product liability claims that may be brought against us or
failure to meet contractual performance commitments.
Our business exposes us to potential product liability risks that are inherent in the design, manufacture, sale and
application of our products and the products of third-party suppliers that we utilize or resell. Our products are used in a
variety of applications, including infrastructure projects such as oil and gas pipelines and platforms, buildings, bridges
and power generation facilities, the manufacture of transportation and heavy equipment and machinery and various other
construction projects. We face risk of exposure to product liability claims in the event that accidents or failures on these
projects result, or are alleged to result, in bodily injury or property damage. Further, our products are designed for use in
specific applications, and if a product is used inappropriately, personal injury or property damage may result. In certain
cases, we design automated welding systems for use in a customer’s production facilities (including automotive
production facilities), which could expose us to financial losses or professional liability.
The occurrence of defects in or failures of our products, or the misuse of our products in specific applications, could
cause termination of customer contracts, increased costs and losses to us, our customers and other end users. We cannot
be assured that we will not experience any material product liability losses in the future or that we will not incur
significant costs to defend those claims. Further, we cannot be assured that our product liability insurance coverage will
be adequate for any liabilities that we may ultimately incur or that product liability insurance will continue to be
available on terms acceptable to us. Even if we are successful defending such claims or product liability coverage is
adequate, claims of this nature could cause customers to lose confidence in our products and our Company. Warranty
claims are not generally covered by insurance and we may incur significant warranty costs in the future for which we
would not be reimbursed.
We may incur losses if we do not achieve contractual commitments, including project performance requirements or
project schedules. Project performance can be affected by a number of factors, including but not limited to, availability
of materials, changes in the project scope of services, environmental conditions or labor disruptions. In addition, our
backlog consists of the expected revenue from projects for which we have an executed contract or commitment with a
customer. Project cancellations, scope adjustments, deferrals or changes in cost estimates may reduce the dollar amount
of revenue and profits that we actually earn.
10
Changes in tax rates or exposure to additional income tax liabilities could affect profitability.
Our business is subject to income taxes in the United States and various foreign jurisdictions. Domestic and international
tax liabilities are subject to the allocation of income among various tax jurisdictions. Our effective tax rate could be
adversely affected by changes in the mix among earnings in countries with differing statutory tax rates, changes in the
valuation allowances of deferred tax assets or changes in tax laws. There can be no assurance that changes in tax laws or
regulations, both within the United States and the various foreign jurisdictions in which we operate, such as the proposed
15% global minimum tax under the Organisation for Economic Co-operation and Development (the “OECD”) Pillar
Two, Global Anti-Base Erosion Rules (The “Pillar Two Rules”), will not materially and adversely affect our effective
tax rate, tax payments, financial condition and results of operations.
The amount of income taxes paid is subject to ongoing audits by the United States federal, state and local tax authorities
and by foreign tax authorities. If these audits result in assessments different from amounts reserved, future financial
results may include unfavorable adjustments which could have a material adverse effect on our results of operations.
Evolving international laws and enforcement relating to data privacy could adversely affect our operations.
Our business is also subject to increasingly complex and changing laws and regulations enacted to protect business and
personal information in the United States and other jurisdictions regarding privacy, data protection and data security,
including those related to the collection, storage, use, transmission and protection of personal information and other
customer, vendor or employee data. Laws and regulations addressing personal information, including with respect to the
European Union’s General Data Protection Regulation ("GDPR"), and the interpretation and enforcement of these and
similar laws and regulations, are continuously evolving and there is significant uncertainty with respect to how
compliance with these laws and regulations may develop and the costs and complexity of future compliance. In addition,
as a result of existing or new data protection requirements, we incur and expect to continue to incur ongoing costs as part
of our efforts to comply with applicable law. Any failure, or perceived failure, to comply with data protection or privacy-
related legal obligations may result in governmental enforcement actions, litigation, or negative publicity, and could
have an adverse effect on our operations and financial condition.
Our global operations are subject to increasingly complex environmental regulatory requirements.
We are subject to increasingly complex environmental regulations affecting international manufacturers, including those
related to air and water emissions, waste management and climate change. Some environmental laws impose strict,
retroactive and joint and several liability for the remediation of the release of hazardous substances, even for conduct
that was lawful at the time it occurred, or for the conduct of or conditions caused by prior operators, predecessors or
third parties. Failure to comply with environmental laws could expose us to penalties or clean-up costs, civil or criminal
liability and sanctions on certain of our activities, as well as damage to property or natural resources. These liabilities,
sanctions, damages and remediation efforts related to any non-compliance with such laws and regulations could
negatively impact our ability to conduct our operations and our financial condition and results of operations. In addition,
there can be no assurances that we will not be adversely affected by costs, liabilities or claims with respect to existing or
subsequently acquired operations or under present laws and regulations or those that may be adopted or imposed in the
future.
Changes in environmental laws or regulations could result in higher expenses and payments, and uncertainty relating to
environmental laws or regulations may also affect how we conduct our operations and structure our investments and
could limit our ability to enforce our rights. Changes in environmental and climate change laws or regulations, including
laws relating to greenhouse gas emissions, could subject us to additional costs and restrictions, including increased
energy and raw material costs. If environmental laws or regulations are either changed or adopted and impose significant
operational restrictions and compliance requirements upon us or our products, they could negatively impact our business,
capital expenditures, results of operations, financial condition and competitive position.
It is our policy to apply strict standards for environmental protection to all of our operations inside and outside of the
United States, even when we are not subject to local government regulations. We may incur substantial costs, including
11
cleanup costs, fines and civil or criminal sanctions, liabilities resulting from third-party property damage or personal
injury claims, or our products could be prohibited from entering certain jurisdictions, if we were to violate or become
liable under environmental laws, if our products become non-compliant with environmental laws or if we were to
undertake environmental protection actions voluntarily.
We also face increasing complexity in our products design and procurement operations as we adjust to new and future
requirements relating to the design, production and labeling of our products that are sold worldwide in multiple
jurisdictions. The ultimate costs under environmental laws and the timing of these costs are difficult to predict.
We may be exposed to certain regulatory and financial risks related to climate change.
A number of governments and agencies in the U.S. and in foreign jurisdictions have proposed and may continue to
introduce regulatory changes to address climate change, including regulations related to greenhouse gas emissions. We
may be subject to additional regulations or restrictions in jurisdictions where we operate, including charges to fund
additional energy-efficient activities, assessments or fees, and operational restrictions such as reduced emission
allowances. Compliance with climate change regulations and restrictions may result in additional costs, including
increased production costs and taxes, which could adversely impact our financial position. In addition, climate change
regulations and related operating restrictions may unfavorably affect our competitive position with companies who may
not be subject to equivalent requirements in their jurisdictions. In addition, negative publicity or public perception of
climate change issues associated with us or our industry may cause reputational damage and financial harm to the
Company.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
Our cybersecurity risk management process is integrated into our Enterprise Risk Management “ERM” process
as described in Item 1A. Risk Factors. Cybersecurity has been identified as a critical risk.
To identify, assess, and manage material cybersecurity risks, we regularly evaluate and take steps to enhance
our cybersecurity protocols to protect against or mitigate cyber threats. We conduct third-party and internal assessments
of our environments, including system penetration testing, test our recovery and response processes, and we consider
industry standards when developing our information security program. The Company has an information security
training program, which calls for training all computer-based employees twice per year, through various employee
training modules relative to information security matters and phishing simulation events with employees to raise
cybersecurity awareness.
From time to time, we engage third-party assessors, consultants, auditors and others to assist us with evaluating,
enhancing, implementing and monitoring our cybersecurity risk-management programs. We maintain processes to
oversee and identify cybersecurity risks associated with our use of third-party service providers such as vigilant contract
and vendor due diligence review, as well as annual review of the service providers’ independent audit report where
applicable.
Like many companies, our systems and those of our third party providers who provide us with services and
products may be subject to cybersecurity threats and cybersecurity incidents. To date, no such cybersecurity incidents
have had a material impact on our business or operations. However, if as a result of any future incidents or our systems
are significantly damaged, cease to function properly or are subject to a significant cybersecurity incident, we may suffer
an interruption in our ability to manage and operate the business, and our results of operations and financial condition
could be adversely affected. The Company maintains an insurance policy with respect to cybersecurity and has
12
undergone several simulation, preparedness and response exercises. See “Risks Related to Manufacturing and
Operations” in Item 1A. Risk Factors.
Governance
Our Board oversees the management of our risks, including risks from cybersecurity threats, on an enterprise-
wide basis, and the Lead Independent Director promotes our Board’s engagement in this process. Our Board has
delegated oversight of the risk assessment and mitigation process with respect to cybersecurity to the Audit Committee
of our Board. The Audit Committee regularly monitors the Company’s cybersecurity risks and receives updates from the
Chief Information Officer (“CIO”) at each meeting. In addition, the Audit Committee regularly reviews the overall
effectiveness of the information technology security environment. The CIO reports to the full Board about cybersecurity
on an annual basis.
Lisa Dietrich is our CIO. Ms. Dietrich has 25 years of experience in the Information Technology (“IT”) and
cybersecurity industry. In her role as CIO, Ms. Dietrich is responsible for assessing and managing material risks from
cybersecurity threats, including monitoring the prevention, detection, mitigation and remediation of cybersecurity
incidents. On at least a quarterly basis, Ms. Dietrich chairs the IT Governance Committee, which includes the executive
management team. The purpose of this committee is to inform and make strategic decisions on IT related matters,
including the prevention, detection, mitigation and remediation of cybersecurity incidents. In addition, Ms. Dietrich
regularly reviews key cybersecurity risk metrics and reporting designed to measure the effectiveness of related processes
and procedures. Ms. Dietrich utilizes this information in her reporting to the Board and Audit Committee of the Board.
ITEM 1D. INFORMATION ABOUT OUR EXECUTIVE OFFICERS
EXECUTIVE OFFICERS OF THE REGISTRANT
Name
Age Position
Christopher L. Mapes
62
Steven B. Hedlund
57
Executive Chairman of the Board since January 1, 2024; Chairman of the Board from December 21, 2013 to
December 31, 2023; President and Chief Executive Officer from December 31, 2012 to December 31, 2023;
Chief Operating Officer from September 1, 2011 to December 31, 2012; Director since February 2010.
President and Chief Executive Officer since January 1, 2024; Executive Vice President, Chief Operating
Officer from May 9, 2022 to December 31, 2023; Executive Vice President and President, Americas and
International Welding from October 21, 2020 to May 9, 2022; Executive Vice President and President,
International Welding from June 1, 2017 to October 21, 2020; Senior Vice President and President, Global
Automation from January 22, 2015 to June 1, 2017; Senior Vice President, Strategy & Business Development
from February 19, 2014 to January 22, 2015; Vice President, Strategy and Business Development from
September 15, 2008 to February 19, 2014.
Gabriel Bruno
56
Executive Vice President, Chief Financial Officer and Treasurer since April 22, 2020; Executive Vice
President, Finance from January 1, 2019 to April 22, 2020; Executive Vice President, Chief Human Resources
Officer from July 1, 2016 to January 1, 2019; Executive Vice President, Chief Human Resources Officer and
Chief Information Officer from February 18, 2016 to July 1, 2016; Executive Vice President, Chief
Information Officer and Interim Chief Human Resources Officer from March 7, 2015 to February 18, 2016;
Executive Vice President, Chief Information Officer from February 19, 2014 to March 7, 2015; Vice
President, Chief Information Officer from May 1, 2012 to February 19, 2014; Vice President, Corporate
Controller from 2005 to May 1, 2012.
Jennifer I. Ansberry
50
Executive Vice President, General Counsel and Secretary since April 20, 2017; Vice President, Deputy
Michele R. Kuhrt
57
General Counsel from August 1, 2014 to April 20, 2017; Deputy General Counsel from 2004 to August 1,
2014.
Executive Vice President, Chief Human Resources Officer since February 25, 2019; Executive Vice President,
Chief Information Officer from July 1, 2016 to February 25, 2019; Senior Vice President, Tax from 2006 to
July 1, 2016.
Lisa A. Dietrich
51
Executive Vice President, Chief Information Officer since May 9, 2022. Senior Vice President and Chief
Geoffrey P. Allman
53
Information Officer, American Greetings Corporation (a global leader in the large and enduring Celebrations
marketplace) from March 2018 until April 2022; Vice President of Business Transformation and Executive
Director, American Greetings Corporation from January 2011 to March 2018.
Senior Vice President, Strategy and Business Development since January 1, 2019; Senior Vice President,
Corporate Controller from January 14, 2014 to January 1, 2019; Corporate Controller from July 1, 2012 to
January 14, 2014; Director, Regional Finance North America from October 1, 2009 to July 1, 2012.
13
Michael J. Whitehead
50
Senior Vice President, President, Global Automation, Cutting and Additive Businesses since January 1, 2019;
Peter M. Pletcher
50
Senior Vice President, Strategy and Business Development from August 1, 2016 to January 1, 2019;
President, Lincoln Canada from January 1, 2015 to August 1, 2016; Director, New Product Development,
Consumables R&D from January 1, 2012 to January 1, 2015.
Senior Vice President, President, Americas Welding since January 1, 2024; Senior Vice President, President
International from August 1, 2022 to December 31, 2023; Senior Vice President, President, International
Welding from December 10, 2020 to August 1, 2022; Vice President, President, Europe Welding from April
1, 2019 to December 10, 2020; Vice President, President, Global Automation from January 1, 2018 to April 1,
2019; Director, Business Development, Cutting Products from January 1, 2016 to January 1, 2018.
Gregory Doria
47
Senior Vice President, President, Harris Products Group and Asia Pacific Welding since January 1, 2024;
Senior Vice President, President, Harris Products Group from October 1, 2021 to December 31, 2023; Senior
Vice President, Chief Operating Officer, Harris Products Group from April 21, 2021 to September 30, 2021;
Vice President, Marketing from July 1, 2019 to April 20, 2021; Director, Global Industry Segments from
March 1, 2017 to June 30, 2019; Regional Sales Manager, West Region from October 6, 2014 to February 28,
2017.
The Company has been advised that there is no arrangement or understanding among any one of the officers listed and
any other persons pursuant to which he or she was elected as an officer. The executive officers are elected by the Board
of Directors normally for a term of one year and/or until the election of their successors.
ITEM 2. PROPERTIES
The Company’s corporate headquarters and principal United States manufacturing facilities are located in the Cleveland,
Ohio area. Total Cleveland area property consists of 244 acres, of which present manufacturing facilities comprise an
area of approximately 3,017,090 square feet.
14
The Company has 71 manufacturing and automation system integration facilities, including operations and joint ventures
across 21 countries, the significant locations (grouped by operating segment) of which are as follows:
Americas Welding:
United States
Brazil
Canada
Colombia
Chile
Mexico
International Welding:
Australia
Austria
China
France
Germany
India
Italy
Poland
Romania
Russia
South Korea
Spain
Turkey
United Kingdom
Cleveland, Columbus, Coldwater, Fort Loramie, and Orrville, Ohio; Reno, Nevada;
Ladson, South Carolina; Chattanooga, Tennessee; Detroit, Michigan; Fort Collins,
Colorado; Bettendorf, Iowa; Churubusco, Indiana.
Atibaia; Guarulhos; Sao Paulo; Caxias do Sul.
Toronto; Mississauga; Hamilton; Montreal; Vankleek Hill.
Bogota.
Santiago.
Mexico City; Torreon; Saltillo.
Newcastle; Gladstone.
Scheifling.
Tangshan; Shanghai; Beijing.
Grand-Quevilly; Partheny.
Essen; Eisenberg; Frankfurt; Merzig.
Chennai; Pune.
Corsalone.
Bielawa; Dzierzoniow.
Buzau.
Mtsensk.
Siheung-si.
Valencia; Zaragoza.
Istanbul.
Sheffield, England; Port Talbot, Wales.
The Harris Products Group:
United States
Mason, Ohio; Gainesville, Georgia; Winston Salem, North Carolina; Gordonsville,
Carthage, Tennessee; Florence, Alabama.
Brazil
Italy
Mexico
Poland
Portugal
Maua.
Verona.
Guadalupe.
Dzierzoniow.
Albergaria-a-Velha.
All properties relating to the Company’s Cleveland, Ohio headquarters and manufacturing facilities are owned by the
Company. Most of the Company’s foreign subsidiaries own manufacturing facilities in the country where they are
located. The Company believes that its existing properties are in good condition and are suitable for the conduct of its
business. In March 2022, in response to Russia’s invasion of Ukraine, the Company ceased operations in Russia.
In addition, the Company maintains operating leases for some manufacturing facilities, distribution centers and sales
offices throughout the world. Refer to Note 17 to the consolidated financial statements for information regarding the
Company’s lease commitments.
15
ITEM 3. LEGAL PROCEEDINGS
The Company is subject, from time to time, to a variety of civil and administrative proceedings arising out of its normal
operations, including, without limitation, product liability claims, regulatory claims and health, safety and environmental
claims. Among such proceedings are the cases described below.
As of December 31, 2023, the Company was a co-defendant in cases alleging asbestos induced illness involving claims
by approximately 1,387 plaintiffs, which is a net decrease of 22 claims from those previously reported. In each instance,
the Company is one of a large number of defendants. The asbestos claimants seek compensatory and punitive damages,
in most cases for unspecified sums. Since January 1, 1995, the Company has been a co-defendant in other similar cases
that have been resolved as follows: 56,986 of those claims were dismissed, 23 were tried to defense verdicts, 7 were tried
to plaintiff verdicts (which were reversed or resolved after appeal), 1 was resolved by agreement for an immaterial
amount and 1,015 were decided in favor of the Company following summary judgment motions.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
The Company’s common shares are traded on The NASDAQ Global Select Market under the symbol "LECO." The
number of record holders of common shares at December 31, 2023 was 2,214.
Issuer purchases of equity securities for the fourth quarter 2023 were:
Period
October 1 - 31, 2023
November 1 - 30, 2023
December 1 - 31, 2023
Total
Total Number of
Shares
Purchased
Maximum
Number
of Shares that May
as Part of Publicly Yet be Purchased
Average Price Announced Plans or Under the Plans
or Programs (2)
Programs
Paid Per Share
Total Number of
Shares
Purchased
100,749
(1) $
179.12
98,253
8,107,766
132,659
(1)
188.51
132,617
7,975,149
120,132
353,540
(1)
209.13
192.84
116,629
347,499
7,858,520
(1) The above share repurchases include the surrender of the Company’s common shares in connection with the vesting
of restricted awards.
(2) On February 12, 2020, the Company’s Board of Directors authorized a share repurchase program for up to 10
million shares of the Company’s common stock. Total shares purchased through the share repurchase program were
2.1 million shares at a total cost of $334.9 million for a weighted average cost of $156.37 per share through
December 31, 2023.
16
The following line graph compares the yearly percentage change in the cumulative total shareholder return on the
Company’s common stock against the cumulative total return of the S&P Composite 500 Stock Index ("S&P 500") and
the S&P 400 MidCap Index ("S&P 400") for the five-year calendar period commencing January 1, 2019 and ending
December 31, 2023. This graph assumes that $100 was invested on December 31, 2018 in each of the Company’s
common shares, the S&P 500 and the S&P 400. A peer-group index for the welding industry, in general, is not readily
available because the industry is comprised of a large number of privately held competitors and competitors that are
smaller parts of large publicly traded companies.
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
(Dollars in thousands, except per share amounts)
This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together
with the Company’s consolidated financial statements and other financial information included elsewhere in this Annual
Report on Form 10-K. This Annual Report on Form 10-K contains forward-looking statements that involve risks and
uncertainties. Actual results may differ materially from those indicated in the forward-looking statements. See "Item 1A.
Risk Factors" for more information regarding forward-looking statements.
General
The Company is the world’s largest designer and manufacturer of arc welding and cutting products, manufacturing a
broad line of arc welding equipment, consumable welding products and other welding and cutting products.
17
The Company is one of only a few worldwide broad-line manufacturers of welding, cutting and brazing products. The
Company is the world leader in the design, development and manufacture of arc welding products, automated joining,
assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global position
in brazing and soldering alloys.
The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment,
plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas
regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting,
material handling, module assembly, and end of line testing.
The Company invests in the research and development of arc welding products in order to continue its market leading
product offering and improve the quality and productivity of welding applications. In addition, the Company actively
protects its innovations with patents and trade secrets globally. The Company believes its significant investment in
research and development, its highly trained technical sales force and its extensive distributor network provide a
competitive advantage in the marketplace.
The Company’s products are sold globally. In the Americas, products are sold principally through industrial distributors,
retailers and also directly to users of welding products. Outside of the Americas, the Company has an international sales
organization comprised of Company employees and agents who sell products from the Company’s various
manufacturing sites to distributors and product users.
The Company’s major end-user markets include:
general fabrication,
energy (oil and gas, power generation and process industries),
heavy industries (heavy fabrication, ship building and maintenance and repair),
automotive and transportation, and
construction and infrastructure.
The Company has, through wholly-owned subsidiaries, manufacturing facilities located in the United States, Australia,
Austria, Brazil, Canada, China, Colombia, France, Germany, India, Italy, Mexico, Poland, Portugal, Romania, Russia,
South Korea, Spain, Turkey and the United Kingdom.
The principal raw materials essential to the Company’s business are steel, electronic components, engines, brass, copper,
silver, aluminum alloys, robotic components and various chemicals, all of which are normally available for purchase in
the open market.
The Company’s facilities are subject to environmental regulations. To date, compliance with these environmental
regulations has not had a material adverse effect on the Company’s earnings. The Company is ISO 14001 certified at
most significant manufacturing facilities in North America and Europe and is progressing towards certification at its
remaining facilities worldwide. In addition, the Company is ISO 9001 certified at 46 facilities worldwide.
The Company ensures compliance and the continuous improvement of the environmental performance of its products
and operations through its global Environmental, Health, Safety and Quality (“EHS&Q”) systems. The Company’s
systems are guided by Corporate EHS&Q Policy, global directives and corporate standards that establish consistent
guidelines for the management, measurement and reporting of environmental, health and safety activities, as well as
quality across the Company’s global platform. The Company’s products support our customers' sustainable operations
through enhanced worker safety, reduced emissions, improved energy efficiency, reduced waste and regulatory
compliance.
18
Key Indicators
Key economic measures relevant to the Company include industrial production trends, steel consumption, purchasing
manager indices, capacity utilization within durable goods manufacturers and consumer confidence indicators. Key
industries which provide a relative indication of demand drivers to the Company include steel, farm machinery and
equipment, construction and transportation, fabricated metals, electrical equipment, ship and boat building, defense,
truck manufacturing, energy and railroad equipment. Although these measures provide key information on trends
relevant to the Company, the Company does not have available a more direct correlation of leading indicators which can
provide a forward-looking view of demand levels in the markets which ultimately use the Company’s welding products.
Key operating measures utilized by the operating units to manage the Company include orders, backlog, sales, inventory
and fill-rates, all of which provide key indicators of business trends. These measures are reported on various cycles
including daily, weekly and monthly depending on the needs established by operating management.
Key financial measures utilized by the Company’s executive management and operating units in order to evaluate the
results of its business and in understanding key variables impacting the current and future results of the Company
include: sales; gross profit; selling, general and administrative expenses; operating income; earnings before interest and
taxes; earnings before interest, taxes and bonus; net income; adjusted operating income; adjusted earnings before interest
and income taxes; adjusted earnings before interest, taxes and bonus; adjusted net income; adjusted diluted earnings per
share; operating cash flows; and capital expenditures, as well as applicable ratios such as return on invested capital,
adjusted return on invested capital and average operating working capital to sales. These measures are reviewed
at monthly, quarterly and annual intervals and are compared with historical periods, as well as objectives established by
the Board of Directors of the Company.
The discussion that follows includes a comparison of our results of operations, liquidity and capital resources for
fiscal years ended December 31, 2023 and 2022. For a comparison of the Company’s results of operations, liquidity and
capital resources for the fiscal years ended December 31, 2022 and 2021, see “Item 7. Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2022, which was filed with the SEC on February 21, 2023.
19
Results of Operations
The following table shows the Company’s results of operations:
Year Ended December 31,
Net sales
Cost of goods sold
Gross profit
Selling, general & administrative
expenses
Rationalization and asset impairment
charges
Operating income
Interest expense, net
Other income
Income before income taxes
Income taxes
Effective tax rate
Net income
Diluted earnings per share
Net Sales:
2023
2022
% of Sales Amount
% of Sales
Amount
$ 4,191,636
2,726,191
1,465,445
$ 3,761,211
2,480,451
35.0 % 1,280,760
Favorable (Unfavorable)
2023 vs. 2022
$
$ 430,425
(245,740)
34.1 % 184,685
11.4 %
(9.9)%
14.4 %
%
758,910
18.1 %
656,636
17.5 % (102,274)
(15.6)%
(11,314)
717,849
44,371
13,388
686,866
141,618
(0.3)%
17.1 %
16.4 %
11,788
612,336
29,500
9,991
592,827
120,603
0.3 %
23,102
16.3 % 105,513
(14,871)
3,397
94,039
(21,015)
15.8 %
196.0 %
17.2 %
(50.4)%
34.0 %
15.9 %
(17.4)%
20.6 %
20.3 %
(0.3) %
$
$
545,248
9.37
13.0 % $
$
472,224
8.04
12.6 % $
$
73,024
1.33
15.5 %
16.5 %
The following table summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net
sales for the twelve months ended December 31, 2023 on a consolidated basis:
Lincoln Electric Holdings, Inc.
% Change
Lincoln Electric Holdings, Inc.
Change in Net Sales due to:
Net Sales
2022
Volume Acquisitions
$ 3,761,211 $ 85,686 $ 276,571
Price
$ 64,146
Foreign
Exchange
Net Sales
2023
$ 4,022 $ 4,191,636
2.3 %
7.4 %
1.7 %
0.1 %
11.4 %
Net sales increased primarily due to the benefit of acquisitions, higher demand levels and increased product pricing as a
result of higher input costs.
Gross Profit:
Gross profit increased for the year ended December 31, 2023 primarily due to pricing actions taken to offset higher
inputs costs and favorable segment mix, which offset the impact of acquisitions.
Selling, General & Administrative ("SG&A") Expenses:
SG&A expenses increased in 2023 as compared to 2022 primarily due to acquisitions and higher employee-related costs.
Rationalization and asset impairment charges:
In 2023, the Company recorded a gain of $11,314 primarily related to the sale of a property offset by rationalization and
asset impairment charges within International Welding.
20
Segment Results
Net Sales:
The table below summarizes the impacts of volume, acquisitions, price and foreign currency exchange rates on Net sales
for the twelve months ended December 31, 2023:
Change in Net Sales due to:
Net Sales
2022
Volume (1) Acquisitions (2) Price (3)
Exchange
2023
Foreign Net Sales
Operating Segments
Americas Welding
International Welding
The Harris Products Group
% Change
Americas Welding
International Welding
The Harris Products Group
$ 2,288,934 $ 109,860 $ 222,493 $ 37,125 $ (2,866) $ 2,655,546
1,040,006
496,084
54,078 14,691
— 12,330
12,519
(36,693)
954,281
517,996
4,437
2,451
4.8 %
1.3 %
(7.1)%
9.7 %
5.7 %
—
1.6 %
1.5 %
2.4 %
(0.1)%
0.5 %
0.5 %
16.0 %
9.0 %
(4.2) %
(1) Increase for Americas Welding due to higher volumes in all product groups. Increase for International Welding due
to higher equipment volumes. Decrease for the Harris Products Group due to weakness in end markets.
(2) Increase for Americas Welding and International Welding due to the acquisitions discussed in Note 4 to the
consolidated financial statements.
(3) Increase for all segments reflects increased product pricing to offset higher input costs.
21
Adjusted Earnings Before Interest and Income Taxes (“Adjusted EBIT”):
Segment performance is measured and resources are allocated based on a number of factors, the primary measure being
the Adjusted EBIT profit measure. EBIT is defined as Operating income plus Other income. EBIT is adjusted for special
items as determined by management such as the impact of rationalization activities, certain asset impairment charges and
gains or losses on disposals of assets.
The following table presents Adjusted EBIT by segment:
Year Ended December 31,
Favorable (Unfavorable)
2023 vs. 2022
2023
2022
$
%
Americas Welding:
Net sales
Inter-segment sales
Total Sales
Adjusted EBIT (4)
$ 2,655,546
127,536
$ 2,783,082
$ 538,269
As a percent of total sales (1)
19.3 %
$ 2,288,934
122,019
$ 2,410,953
$ 462,819
$ 366,612
5,517
$ 372,129
$
75,450
19.2 %
International Welding:
Net sales
Inter-segment sales
Total Sales
Adjusted EBIT (5)
As a percent of total sales (2)
The Harris Products Group:
Net sales
Inter-segment sales
Total Sales
Adjusted EBIT (6)
As a percent of total sales (3)
Corporate / Eliminations:
Inter-segment sales
Adjusted EBIT (7)
Consolidated:
Net sales
Net income
As a percent of total sales
Adjusted EBIT (8)
As a percent of sales
16.0 %
4.5 %
15.4 %
16.3 %
0.1 %
9.0 %
—
8.7 %
13.6 %
0.5 %
(4.2)%
(3.6)%
(4.2)%
15.8 %
2.5 %
$ 1,040,006
31,498
$ 1,071,504
$ 136,497
12.7 %
$
$ 954,281
31,503
$ 985,784
$ 120,157
$
$
12.2 %
85,725
(5)
85,720
16,340
$ 496,084
10,641
$ 506,725
74,144
$
$ 517,996
11,040
$ 529,036
64,008
$
14.6 %
$ (21,912)
(399)
$ (22,311)
$
10,136
12.1 %
$ (169,675)
(17,536)
$ (164,562)
(10,033)
$
(5,113)
(7,503)
(3.1)%
(74.8)%
$ 4,191,636
$ 545,248
$ 3,761,211
$ 472,224
$ 731,374
$ 636,951
13.0 %
17.4 %
$ 430,425
73,024
$
12.6 %
$
16.9 %
94,423
11.4 %
15.5 %
0.4 %
14.8 %
0.5 %
(1) Increase for 2023 as compared to 2022 primarily driven by higher volumes and effective cost management, partially
offset by the impact of acquisitions.
(2) Increase for 2023 as compared to 2022 primarily driven by higher volumes and effective cost management.
(3) Increase for 2023 compared to 2022 primarily reflects effective cost management and operational improvements.
(4) 2023 excludes the amortization of step up in value of acquired inventories of $9,390 and Rationalization and asset
impairment net charges of $468.
22
2022 excludes a favorable adjustment related to the termination of a pension plan of $3,735, the amortization of step
up in value of acquired inventories of $1,106 and Rationalization and asset impairment gains of $431 related to
severance and gains or losses on the disposal of assets as discussed in Note 7 to the consolidated financial
statements.
(5) 2023 excludes pension settlement charges of $845, a gain on asset disposal of $1,646, the amortization of step up in
value of acquired inventories of $2,862 and Rationalization and asset impairment net gains of $11,782 as discussed
in Note 7 to the consolidated financial statements.
2022 excludes Rationalization and asset impairment charges of $11,681 related to impairment charges as discussed
in Note 7 to the consolidated financial statements.
(6) 2022 excludes the amortization of step up in value of acquired inventories of $820 related to an acquisition and non-
cash pension settlement charges of $2,965 as discussed in Note 11 to the consolidated financial statements.
(7) 2022 excludes acquisition transaction and integration costs of $6,003 as discussed in Note 4 to the consolidated
financial statements.
(8) See non-GAAP Financial Measures for a reconciliation of Net income as reported and Adjusted EBIT.
Non-GAAP Financial Measures
The Company reviews Adjusted operating income, Adjusted EBIT, Adjusted net income, Adjusted effective tax rate,
Adjusted diluted earnings per share, Adjusted return on invested capital, and Adjusted net operating profit after taxes, all
non-GAAP financial measures, in assessing and evaluating the Company’s underlying operating performance. These
non-GAAP financial measures exclude the impact of special items on the Company’s reported financial results. Non-
GAAP financial measures should be read in conjunction with the generally accepted accounting principles in the United
States ("GAAP") financial measures, as non-GAAP measures are a supplement to, and not a replacement for, GAAP
financial measures. From time to time, management evaluates and discloses to investors the following non-GAAP
measures: Free cash flow ("FCF"), defined as Net cash provided by operating activities less Capital expenditures (the
Company considers FCF to be a liquidity measure that provides useful information to management and investors about
how the amount of cash generated by our business, after the purchase of property and equipment, can be used for debt
service, acquisitions, paying dividends and repurchasing our common shares); Cash conversion, defined as FCF divided
by Adjusted net income; Organic sales, defined as sales excluding the effects of foreign currency and acquisitions.
The following table presents a reconciliation of Operating income as reported to Adjusted operating income:
Operating income as reported
Special items (pre-tax):
Rationalization and asset impairment charges (1)
Acquisition transaction costs (2)
Amortization of step up in value of acquired inventories (3)
Adjusted operating income
Year Ended December 31,
2023
$ 717,849 $
2022
612,336
(11,314)
—
12,252
$ 718,787 $
11,788
6,003
1,106
631,233
(1) 2023 reflects a gain on the sale of a property of $36,187, offset by rationalization and asset impairment charges of
$24,873 within International Welding. 2022 charges are primarily related to employee severance, gains or losses on
the disposal of assets and other related costs and non-cash asset impairment charges.
(2) Costs related to acquisitions and included in Selling, general & administrative expenses.
(3) Costs related to acquisitions and included in Cost of goods sold.
23
The following table presents the reconciliations of Net income as reported to Adjusted net income and Adjusted EBIT,
Effective tax rate as reported to Adjusted effective tax rate and Diluted earnings per share as reported to Adjusted diluted
earnings per share:
Net income as reported
Special items:
Rationalization and asset impairment charges (1)
Acquisition transaction costs (2)
Pension settlement net charges (3)
Amortization of step up in value of acquired inventories (4)
Gain on asset disposal (5)
Tax effect of Special items (6)
Adjusted net income
Interest expense, net
Income taxes as reported
Tax effect of Special items (6)
Adjusted EBIT
Effective tax rate as reported
Net special item tax impact
Adjusted effective tax rate
Diluted earnings per share as reported
Special items per share
Adjusted diluted earnings per share
Year Ended December 31,
2023
2022
$ 545,248 $ 472,224
(11,314)
—
845
12,252
(1,646)
2,537
11,788
6,003
(4,273)
1,106
—
(1,192)
$ 547,922 $ 485,656
29,500
120,603
1,192
$ 731,374 $ 636,951
44,371
141,618
(2,537)
20.6 %
(0.4)%
20.2 %
9.37 $
0.04
9.41 $
20.3 %
(0.2)%
20.1 %
8.04
0.23
8.27
$
$
(1) 2023 reflects a gain on the sale of a property of $36,187, offset by rationalization and asset impairment charges of
$24,873 within International Welding. 2022 charges are primarily related to employee severance, gains or losses on
the disposal of assets and other related costs and non-cash asset impairment charges.
(2) Costs related to acquisitions, as discussed in Note 4 to the consolidated financial statements, and are included in
Selling, general & administrative.
(3) 2023 charges related to pension settlement charges. 2022 net gains primarily related to the final settlement
associated with the termination of a pension plan, as discussed in Note 11 to the consolidated financial statements.
(4) Costs related to acquisitions and included in Cost of goods sold.
(5) Gain on asset disposal and included in Other income.
(6) Includes the net tax impact of Special items recorded during the respective periods.
The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the
applicable tax rate. The applicable tax rates reflect the taxable jurisdiction and nature of each Special item.
Liquidity and Capital Resources
The Company’s cash flow from operations can be cyclical. Operational cash flow is a key driver of liquidity. In
assessing liquidity, the Company reviews working capital measurements to define areas for improvement. Management
anticipates the Company will be able to satisfy cash requirements for its ongoing businesses for the foreseeable future
primarily with cash generated by operations, existing cash balances, borrowings under its existing credit facilities and
raising debt in capital markets.
24
The Company continues to expand globally and periodically consider acquisitions that would involve significant
investments. The Company can fund its global expansion plans with operational cash flow, but a significant acquisition
may require access to capital markets, in particular, the long-term debt market, as well as the syndicated bank loan
market. The Company’s financing strategy is to fund itself at the lowest after-tax cost of funding. Where possible, the
Company utilizes operational cash flows and raises capital in the most efficient market, usually the United States, and
then lends funds to the specific subsidiary needing or requiring funding. If additional acquisitions providing appropriate
financial benefits become available, additional expenditures may be made.
The following table reflects changes in key cash flow measures:
Cash provided by operating activities (1)
Cash used by investing activities (2)
Capital expenditures
Acquisition of businesses, net of cash acquired
Proceeds from the sale of property, plant and equipment
Cash (used by) provided by financing activities (3)
(Payments on) proceeds from short-term borrowings
(Payments on) proceeds from long-term borrowings
Purchase of shares for treasury
Cash dividends paid to shareholders
Increase in Cash and cash equivalents (4)
Year Ended December 31,
2022
2023
$ Change
$ 667,542 $ 383,386 $ 284,156
429,962
(19,104)
403,613
46,163
(546,117)
(114,224)
(413,553)
(17,472)
(17,286)
192,445
(74,729)
(90,987)
(32,685)
49,494
(412,392)
(79,873)
(8,109)
(198,765)
(148,010)
196,637
(504,691)
(71,883)
(436,298)
3,331
133,725
34,351
405,444
(181,293)
(130,724)
4,192
(1) Cash provided by operating activities increased for the twelve months ended December 31, 2023 compared with the
twelve months ended December 31, 2022 primarily due to increased earnings and improved working capital.
(2) Cash used by investing activities decreased for the twelve months ended December 31, 2023 compared with the
twelve months ended December 31, 2022 primarily due to less acquisition activity in 2023. The Company currently
anticipates capital expenditures of $90,000 to $110,000 in 2024. Anticipated capital expenditures include
investments to increase capacity and improve operational effectiveness. Management critically evaluates all
proposed capital expenditures and expects each project to increase efficiency, reduce costs, promote business
growth or improve the overall safety and environmental conditions of the Company’s facilities.
(3) Cash used by financing activities increased in the twelve months ended December 31, 2023 compared with the
twelve months ended December 31, 2022 primarily due to increased payments on short- and long-term borrowings
as compared with the prior year.
(4) Cash and cash equivalents increased 99.7%, or $196,637, to $393,787 during the twelve months ended
December 31, 2023, from $197,150 as of December 31, 2022. The increase was predominantly due to higher cash
provided by operating activities in 2023.
The Company paid $148,010 and $130,724 in cash dividends to its shareholders in the twelve months ended
December 31, 2023 and 2022, respectively. In January 2024, the Company paid a cash dividend of $0.71 per share, or
$40,453, to shareholders of record on December 31, 2023, which reflects a 11% increase in the Company’s dividend
payout rate.
25
Working Capital Ratios
Average operating working capital to Net sales (1) (2)
Days sales in Inventories (3)
Days sales in Accounts receivable
Average days in Trade accounts payable
2023
2022
17.1 %
104.6
50.0
47.6
20.9 %
132.5
57.0
57.0
(1) Average operating working capital to Net sales is defined as the sum of Accounts receivable, Inventories and
contract assets less Trade accounts payable and contract liabilities as of period end divided by annualized rolling
three months of Net sales.
(2) In 2022, Average operating working capital excluding Fori would have been 18.6% as a percent of Net Sales.
(3) In order to minimize supply chain disruptions in serving customers due to the impacts of the COVID-19 pandemic,
the Company increased inventories relative to expected Net sales resulting in higher Days sales in Inventories in
2022.
Rationalization and Asset Impairments
Refer to Note 7 to the consolidated financial statements for a discussion of the Company’s rationalization plans. The
Company believes the rationalization actions will positively impact future results of operations and will not have a
material effect on liquidity and sources and uses of capital.
Acquisitions
Refer to Note 4 to the consolidated financial statements for a discussion of the Company’s recent acquisitions.
Debt
At December 31, 2023 and 2022, the total amount of debt outstanding was $1,105,210 and $1,203,879, respectively,
while the fair value of long-term debt, including the current portion, was approximately $1,013,795 and $1,009,020,
respectively, which was determined using available market information and methodologies requiring judgment. The
carrying value of this debt at such dates was $1,102,771 and $1,121,435, respectively. Since judgment is required in
interpreting market information, the fair value of the debt is not necessarily the amount which could be realized in a
current market exchange.
Senior Unsecured Notes
On April 1, 2015 and October 20, 2016, the Company entered into separate Note Purchase Agreements pursuant to
which it issued senior unsecured notes (the "Notes") through a private placement. The Notes each have an aggregate
principal amount of $350,000. Interest on the Notes are payable semi-annually. The proceeds of the Notes were used for
general corporate purposes. The Notes contain certain affirmative and negative covenants. As of December 31, 2023, the
Company was in compliance with all of its debt covenants relating to the Notes.
The Company’s total weighted average effective interest rate and remaining weighted average term, inclusive of the
2015 Notes and 2016 Notes, is 3.3% and 10.4 years, respectively.
Term Loan
On November 29, 2022, the Company entered into a term loan in the aggregate principal amount of $400,000 (the “Term
Loan”), which was borrowed in full. The Term Loan matures on November 29, 2025. The Term Loan bears an interest at
a rate based on Term SOFR, plus a margin ranging from 0.75% to 1.75% based on the Company’s consolidated net
26
leverage ratio. The proceeds of the Term Loan were used to pay a portion of the purchase price in connection with the
acquisition of Fori.
The agreement governing the Term Loan (the “Term Loan Credit Agreement”) contains representations and warranties,
as well as customary affirmative, negative and financial covenants for credit facilities of this type, including limitations
on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions,
dispositions of assets and transactions with affiliates. The Term Loan Credit Agreement requires the Company to
maintain a minimum consolidated fixed charges coverage ratio and maximum consolidated net leverage ratio. As of
December 31, 2023, the Company was in compliance with all of its covenants.
Revolving Credit Agreements
On April 23, 2021, the Company amended and restated the agreement governing its line of credit by entering into the
Second Amended and Restated Credit Agreement (“Credit Agreement”). The Credit Agreement has a line of credit
totaling $500,000, has a term of 5 years with a maturity date of April 23, 2026 and may be increased, subject to certain
conditions including the consent of its lenders, by an additional amount up to $150,000. On March 8, 2023, the Credit
Agreement was amended to replace the LIBOR rate to a term secured overnight finance rate (“SOFR”); as such, the
interest rate on borrowings is based on SOFR plus a spread of 0.85% to 1.85% based on (1) the Company’s net leverage
ratio and (2) a credit spread adjustment. The Credit Agreement contains customary representations and warranties, as
well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated
baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments,
distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates. As of December 31, 2023,
the Company was in compliance with all of its covenants and had no of outstanding borrowings under the Credit
Agreement.
The Company has other lines of credit and debt agreements totaling $89,145. As of December 31, 2023, the Company
was in compliance with all of its covenants and had $2,435 outstanding at December 31, 2023.
Return on Invested Capital
The Company reviews return on invested capital ("ROIC") in assessing and evaluating the Company’s underlying
operating performance. Adjusted ROIC is a non-GAAP financial measure that the Company believes is a meaningful
metric to investors in evaluating the Company’s financial performance and may be different than the method used by
other companies to calculate ROIC. Adjusted ROIC is defined as rolling 12 months of Adjusted net income excluding
tax-effected interest income and expense divided by invested capital. Invested capital is defined as total debt, which
includes Amounts due banks, Current portion of long-term debt and Long-term debt, less current portions, plus Total
equity.
27
The following table presents the reconciliation of ROIC and Adjusted ROIC to net income:
Return on Invested Capital
Net income as reported
Plus: Interest expense (after-tax)
Less: Interest income (after-tax)
Net operating profit after taxes
Special items:
Rationalization and asset impairment charges
Acquisition transaction costs
Pension settlement net charges
Amortization of step up in value of acquired inventories
Gain on asset disposal
Tax effect of Special items (1)
Adjusted net operating profit after taxes
Invested Capital
Short-term debt
Long-term debt, less current portion
Total debt
Total equity
Invested capital
Return on invested capital as reported
Adjusted return on invested capital
2023
545,248
38,050
5,033
578,265
$
$
2022
472,224
23,276
1,202
494,298
$
$
(11,314)
—
845
12,252
(1,646)
2,537
580,939
11,788
6,003
(4,273)
1,106
—
(1,192)
507,730
$
$
$
2,439
1,102,771
1,105,210
1,308,852
$ 2,414,062
93,483
$
1,110,396
1,203,879
1,034,041
$ 2,237,920
24.0 %
24.1 %
22.1 %
22.7 %
(1) Includes the net tax impact of Special items recorded during the respective periods.
The tax effect of Special items impacting pre-tax income was calculated as the pre-tax amount multiplied by the
applicable tax rate. The applicable tax rate reflects the taxable jurisdiction and nature of each Special item.
Contractual and Other Obligations
The Company’s cash requirements for contractual and other obligations as of December 31, 2023 are as follows:
Long-term debt, including current portion (Note 9)
Interest on long-term debt (Note 9)
Amounts due banks (Note 9)
Operating leases (Note 17)
Purchase commitments (1)
Transition Tax (2)
Total
Payments Due By Period
2025 to
2026
2027 to
2028
2029 and
Beyond
2024
Total
$ 1,100,009 $
23,135
258,448
2,435
2,435
61,229
14,574
107,903 106,869
—
4 $ 500,005 $ 100,000 $ 500,000
39,970 152,223
—
14,647
—
—
$ 1,535,812 $ 147,017 $ 570,721 $ 151,204 $ 666,870
43,120
—
20,808
1,000
5,788
—
11,200
34
—
5,788
(1) Purchase commitments include contractual obligations for raw materials and services.
(2) Federal income taxes on the Company’s transition tax pursuant to the U.S. Tax Act is payable over eight years.
Amounts reflect the utilization of 2018 overpayments and foreign tax credits.
28
As of December 31, 2023, there were $12,592 of tax liabilities related to unrecognized tax benefits and a $53,628
liability for deferred compensation. Because of the high degree of uncertainty regarding the timing of future cash
outflows associated with these liabilities, the Company is unable to estimate the years in which settlement will occur.
Stock-Based Compensation
On April 19, 2023, the shareholders of the Company approved the 2023 Equity and Incentive Compensation Plan ("2023
Employee Plan"), which replaced the 2015 Equity and Incentive Compensation Plan (“2015 Employee Plan”). The 2023
Employee Plan provides for the granting of options, appreciation rights, restricted shares, restricted stock units and
performance-based awards up to an additional 2,025,000 of the Company’s common shares. In addition, on April 19,
2023, the shareholders of the Company approved the 2023 Stock Plan for Non-Employee Directors ("2023 Director
Plan"), which replaced the 2015 Stock Plan for Non-Employee Directors (“2015 Director Plan”). The 2023 Director Plan
provides for the granting of options, restricted shares and restricted stock units up to an additional 200,000 of the
Company’s common shares. At December 31, 2023, there were 2,192,720 common shares available for future grant
under all plans.
Under these plans, the number of options, restricted shares and restricted stock units granted were 241,824 in 2023 and
284,946 in 2022. The Company issued common shares from treasury upon all exercises of stock options, vesting of
restricted stock units and the granting of restricted stock awards in 2023 and 2022.
Total stock-based compensation expense recognized in the Consolidated Statements of Income for 2023 and 2022 was
$26,223 and $25,276, respectively, with a related tax benefit of $6,711 and $6,363, respectively. As of December 31,
2023, total unrecognized stock-based compensation expense related to non-vested stock options and restricted stock
units was $17,254, which is expected to be recognized over a weighted average period of approximately one year.
The aggregate intrinsic value of options outstanding and exercisable, which would have been received by the optionees,
had all awards been exercised at December 31, 2023 was $99,884 and $82,057, respectively. The total intrinsic value of
awards exercised during 2023 and 2022 was $35,414 and $7,082, respectively.
Product Liability Costs
Product liability costs incurred can be volatile and are largely related to trial activity. The costs associated with these
claims are predominantly defense costs which are recognized in the periods incurred.
The long-term impact of product liability contingencies, in the aggregate, on operating results, operating cash flows and
access to capital markets is difficult to assess, particularly since claims are in many different stages of development and
the Company benefits significantly from cost sharing with co-defendants and insurance carriers. Moreover, the Company
has been largely successful to date in its defense of these claims.
Off-Balance Sheet Arrangements
The Company utilizes letters of credit to back certain payment and performance obligations. Letters of credit are subject
to limits based on amounts outstanding under the Company’s Credit Agreement.
New Accounting Pronouncements
Refer to Note 1 to the consolidated financial statements for a discussion of new accounting pronouncements.
Critical Accounting Policies and Estimates
The Company’s consolidated financial statements are based on the selection and application of significant accounting
policies, which require management to make estimates and assumptions. These estimates and assumptions are reviewed
periodically by management and compared to historical trends to determine the accuracy of estimates and assumptions
29
used. If warranted, these estimates and assumptions may be changed as current trends are assessed and updated.
Historically, the Company’s estimates have been determined to be reasonable. No material changes to the Company’s
accounting policies were made during 2023. The Company believes the following accounting policies are some of the
more critical judgment areas affecting its financial condition and results of operations.
Legal and Tax Contingencies
The Company, like other manufacturers, is subject from time to time to a variety of civil and administrative proceedings
arising in the ordinary course of business. Such claims and litigation include, without limitation, product liability claims,
administrative claims, regulatory claims and health, safety and environmental claims, some of which relate to cases
alleging asbestos induced illnesses. The costs associated with these claims are predominantly defense costs, which are
recognized in the periods incurred. Insurance reimbursements mitigate these costs and, where reimbursements are
probable, they are recognized in the applicable period. With respect to costs other than defense costs (i.e., for liability
and/or settlement or other resolution), reserves are recorded when it is probable that the contingencies will have an
unfavorable outcome. The Company accrues its best estimate of the probable costs after a review of the facts with
management and counsel and taking into account past experience. If an unfavorable outcome is determined to be
reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, disclosure would be
provided for material claims or litigation. Many of the current cases are in differing procedural stages and information on
the circumstances of each claimant, which forms the basis for judgments as to the validity or ultimate disposition of such
actions, varies greatly. Therefore, in many situations a range of possible losses cannot be made. Reserves are adjusted as
facts and circumstances change and related management assessments of the underlying merits and the likelihood of
outcomes change. Moreover, reserves only cover identified and/or asserted claims. Future claims could, therefore, give
rise to increases to such reserves.
The Company is subject to taxation from U.S. federal, state, municipal and international jurisdictions. The calculation of
current income tax expense is based on the best information available and involves significant management judgment.
The actual income tax liability for each jurisdiction in any year can in some instances be ultimately determined
several years after the financial statements are published.
The Company maintains liabilities for unrecognized tax benefits related to uncertain income tax positions in various
jurisdictions. The Company uses judgment in determining whether the technical merits of tax positions are more-likely-
than-not to be sustained. Judgment is also used in measuring the related amount of tax benefit that qualifies for
recognition, including the interpretation of applicable tax law, regulation and tax ruling.
Liabilities are settled primarily through the completion of audits within each individual tax jurisdiction or the closing of
the statute of limitations. Liabilities can be affected by changes in applicable tax law, regulations, tax rulings or such
other factors, which may cause management to believe a revision of past estimates is appropriate. Management believes
that an appropriate liability has been established for uncertain income tax positions; however, actual results may
materially differ from these estimates. Refer to Note 13 to the consolidated financial statements for further discussion of
uncertain income tax positions.
Deferred Income Taxes
Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the GAAP and
income tax basis of assets and liabilities and operating loss and tax credit carry-forwards. The Company will repatriate
earnings for certain non-U.S. subsidiaries, which are subject to foreign withholding taxes. The Company considers any
remaining earnings and outside basis in all other non-U.S. subsidiaries to be indefinitely reinvested and has not recorded
any deferred taxes as such estimate is not practicable.
At December 31, 2023, the Company had approximately $172,734 of gross deferred tax assets related to deductible
temporary differences and tax loss and credit carry-forwards, which may reduce taxable income in future years. In
assessing the realizability of deferred tax assets, the Company assesses whether it is more-likely-than-not that a portion
or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred tax
30
liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31, 2023,
a valuation allowance of $36,876 was recorded against certain deferred tax assets based on this assessment. The
Company believes it is more-likely-than-not that the tax benefit of the remaining net deferred tax assets will be realized.
The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company’s
assessment of future taxable income or tax planning strategies changes.
Inventories
Inventories are valued at the lower of cost or net realizable value. Fixed manufacturing overhead costs are allocated to
inventory based on normal production capacity and abnormal manufacturing costs are recognized as period costs. Cost
for a substantial portion of U.S. inventories is determined on a LIFO basis. LIFO was used for 37% and 38% of total
inventories at December 31, 2023 and 2022, respectively. Cost of other inventories is determined by costing methods
that approximate a FIFO basis. The valuation of LIFO inventories is made at the end of each year based on inventory
levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of
expected year-end inventory levels and costs. Actual year-end inventory levels and costs may differ from interim LIFO
inventory valuations. The excess of current cost over LIFO cost was $129,946 at December 31, 2023 and $133,909 at
December 31, 2022.
The Company reviews the net realizable value of inventory on an on-going basis with consideration given to
deterioration, obsolescence and other factors. If actual market conditions differ from those projected by management,
and the Company’s estimates prove to be inaccurate, write-downs of inventory values and adjustments to Cost of goods
sold may be required. Historically, the Company’s reserves have approximated actual experience.
Long-Lived Assets
The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its
depreciable long-lived assets, including leases and intangible assets that do not have indefinite lives, to be held and used
may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows
produced by the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine
whether impairment exists. If an asset is determined to be impaired, a loss is recognized to the extent that carrying value
exceeds fair value. Fair value is measured based on quoted market prices in active markets, if available. If quoted market
prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted
value of estimated future cash flows.
Goodwill and Intangibles
The Company performs an annual impairment test of goodwill and indefinite-lived intangible assets in the fourth quarter
using the same date each year or more frequently if changes in circumstances or the occurrence of events indicate
potential impairment.
The fair value of each indefinite-lived intangible asset is compared to its carrying value and an impairment charge is
recorded if the carrying value exceeds the fair value. For goodwill, the Company first assesses qualitative factors to
determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, and
whether it is necessary to perform the quantitative goodwill impairment test. The quantitative test is only required if the
Company concludes that it is more-likely-than-not that a reporting unit’s fair value is less than its carrying amount. The
Company may also perform a quantitative test in instances where the more-likely-than-not threshold has not been met,
including when general macroeconomic conditions or changes to the reporting unit warrant a refresh of the baseline used
in a qualitative test. For quantitative testing, the Company compares the fair value of each reporting unit with its carrying
amount. If the carrying amount exceeds the fair value, an impairment charge is recognized for the amount by which the
carrying amount exceeds the reporting unit’s fair value, not to exceed the total amount of goodwill allocated to that
reporting unit.
31
Fair values are determined using established business valuation techniques and models developed by the Company,
estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value
estimated cash flows. Changes in economic and operating conditions, actual growth below the assumed market
participant assumptions or an increase in the discount rate could result in an impairment charge in a future period.
Acquisitions
Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for
the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant
assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or
most advantageous market for the asset or liability.
Fair value estimates are based on a series of judgments about future events and uncertainties and rely on estimates and
assumptions. Management values property, plant and equipment using the cost approach supported where available by
observable market data, which includes consideration of obsolescence. Management values acquired intangible assets
using the relief from royalty method or excess earnings method, forms of the income approach supported by observable
market data for peer companies. The significant assumptions used to estimate the value of the acquired intangible assets
include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates,
customer attrition rates and royalty rates). Acquired inventories are marked to fair value. For certain items, the pre-
acquisition carrying value is determined to be a reasonable approximation of fair value based on information available to
the Company. Refer to Note 4 to the consolidated financial statements for additional details.
Revenue Recognition
Revenue is recognized when obligations under the terms of a contract are satisfied and control is transferred to the
customer. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for
goods or services. Substantially all of the Company’s sales arrangements are short-term in nature involving a single
performance obligation. The Company recognizes revenue when the performance obligation is satisfied and control of
the product is transferred to the customer based upon shipping terms. In addition, certain customized automation
performance obligations are accounted for over time. Under this method, revenue recognition is primarily based upon
the ratio of costs incurred to date compared with estimated total costs to complete. The cumulative impact of revisions to
total estimated costs is reflected in the period of the change, including anticipated losses. Less than 10% of the
Company’s Net sales are recognized over time.
The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates
as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded. Taxes collected by the
Company, including sales tax and value added tax, are excluded from Net sales. The Company recognizes freight billed
as a component of Net sales and shipping costs as a component of Cost of goods sold when control transfers to the
customer. Sales commissions are expensed when incurred because the amortization period is generally one year or less.
These costs are recorded within Selling, general and administrative expenses in the Company’s Consolidated Statements
of Income.
Refer to Note 2 to the consolidated financial statements for additional details.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company’s primary financial market risks include fluctuations in currency exchange rates, commodity prices and
interest rates. The Company manages these risks by using derivative financial instruments in accordance with
established policies and procedures. The Company does not enter into derivatives or other financial instruments for
trading or speculative purposes.
Included below is a sensitivity analysis based upon a hypothetical 10% weakening or strengthening in the U.S. dollar
compared to foreign currency exchange rates at December 31, 2023, a 10% change in pricing of commodity contracts
32
and a 100 basis point increase in effective and variable interest rates at December 31, 2023. The derivative, borrowing
and investment arrangements in effect at December 31, 2023 were compared to the hypothetical foreign exchange or
interest rates in the sensitivity analysis to determine the effect on the Company’s current period consolidated financial
statements.
Foreign Currency Exchange Risk
The Company enters into forward foreign exchange contracts principally to hedge the currency fluctuations in
transactions denominated in foreign currencies, thereby limiting the Company’s risk that would otherwise result from
changes in exchange rates.
At December 31, 2023, the Company hedged certain third-party and intercompany purchases and sales. The gross
notional dollar amount of these foreign exchange contracts at December 31, 2023 was $84,148. At December 31, 2023, a
hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive
income (loss) by $1,744.
The Company enters into forward foreign exchange contracts to hedge transaction exposures or significant cross-border
intercompany loans by either purchasing or selling specified amounts of foreign currency at a specified date. The gross
notional dollar amount of these foreign exchange contracts at December 31, 2023 was $492,600. A hypothetical 10%
change in the year-end exchange rates would have resulted in an increase or decrease to Income before income taxes of
$25,267 related to these positions. However, any loss (or gain) resulting from a hypothetical 10% change would be offset
by the associated gain (or loss) on the underlying balance sheet exposure and would ultimately not materially affect the
Company’s financial statements. The Company also has a foreign currency forward contract hedge designated as a net
investment hedge with a notional dollar amount of $119,607 at December 31, 2023. At December 31, 2023, a
hypothetical 10% strengthening or weakening in the U.S. dollar would have changed Accumulated other comprehensive
income (loss) by $11,658.
Commodity Price Risk
From time to time, the Company uses various hedging arrangements to manage exposures related to price risk from
commodity purchases. These hedging arrangements have the effect of fixing for specified periods the prices the
Company will pay for the volume to which the hedge relates. The notional amount of these contracts was 200,000
pounds at December 31, 2023. At December 31, 2023, a hypothetical 10% change in the price would have resulted in an
increase or decrease to the value of the contracts by $74.
Interest Rate Risk
In anticipation of future debt issuance associated with the Notes referenced in Note 9 to the consolidated financial
statements, the Company has interest rate forward starting swap agreements to hedge the variability of future changes in
interest rates. The gross notional dollar value of these contracts was $100,000 at December 31, 2023. At December 31,
2023, a hypothetical 100 basis point increase to effective interest rates would have changed Accumulated other
comprehensive income (loss) by $6,054. At December 31, 2023, a hypothetical 100 basis point increase to variable
interest rates would have changed Interest expense by approximately $2,500.
In March 2023, the Company entered into interest rate swap agreements, which were qualified and designated as cash
flow hedges, with an aggregate notional amount of $150,000. At December 31, 2023, a hypothetical 100 basis point
increase to effective interest rates would have changed Accumulated other comprehensive income (loss) by $2,599.
The fair value of the Company’s cash and cash equivalents at December 31, 2023 approximated cost due to the short-
term duration. These financial instruments are subject to concentrations of credit risk. The Company has minimized this
risk by entering into investments with a number of major banks and financial institutions and investing in high-quality
instruments. The Company does not expect any counter-parties to fail to meet their obligations.
33
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The response to this item is submitted in a separate section of this Annual Report on Form 10-K following the signature
page.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
None.
ITEM 9A. CONTROLS AND PROCEDURES
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief
Financial Officer, the Company conducted an evaluation of disclosure controls and procedures, as such term is defined
in Rule 13a-15(e) of the Exchange Act. Based on this evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period
covered by this Annual Report on Form 10-K.
Management’s Report on Internal Control Over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial
reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of
the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company
conducted an evaluation of the effectiveness of internal control over financial reporting as of December 31, 2023 based
on the 2013 framework in "Internal Control – Integrated Framework" issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on the Company’s evaluation under such framework, management
concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited
by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report, which is included
elsewhere in this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting that occurred during the fourth
quarter of 2023 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over
financial reporting.
ITEM 9B. OTHER INFORMATION
During the quarter ended December 31, 2023, none of the Company’s directors or officers adopted, modified, or
terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as those terms are defined
in Item 408(a) of Regulation S-K.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
34
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The Company is expected to file its 2024 proxy statement pursuant to Regulation 14A of the Exchange Act within 120
days after December 31, 2023.
Except for the information set forth within Part I, Item 1D section of this Annual Report on Form 10-K concerning our
Executive Officers, the information required by this item is incorporated by reference from the 2024 proxy statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference from the 2024 proxy statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated by reference from the 2024 proxy statement.
For further information on the Company’s equity compensation plans, see Note 1 and Note 10 to the Company’s
consolidated financial statements.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated by reference from the 2024 proxy statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information required by this item is incorporated by reference from the 2024 proxy statement.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
The following reports and consolidated financial statements of the Company are included in a separate section of
this report following the signature page and certifications:
Report of Independent Registered Public Accounting Firm (PCAOB ID 42)
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting
Consolidated Statements of Income – Years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Comprehensive Income – Years ended December 31, 2023, 2022 and 2021
Consolidated Balance Sheets – December 31, 2023 and 2022
Consolidated Statements of Equity – Years ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows – Years ended December 31, 2023, 2022 and 2021
35
Notes to Consolidated Financial Statements
(a)(2) Financial Statement Schedules
The following consolidated financial statement schedule of the Company is included in a separate section of this
report following the signature page:
Schedule II – Valuation and Qualifying Accounts
All other schedules for which provision is made in the applicable accounting regulation of the Securities and
Exchange.
Commission are not required under the related instructions or are inapplicable, and therefore, have been omitted.
(a)(3) Exhibits
Exhibit
No.
3.1
Description
Amended and Restated Articles of Incorporation of Lincoln Electric Holdings, Inc. (filed as Exhibit 3.1
to Form 8-K of Lincoln Electric Holdings, Inc. filed on September 27, 2011, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
3.2
Amended and Restated Code of Regulations of Lincoln Electric Holdings, Inc., as amended on February
15, 2023 (filed as Exhibit 3.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on February 17,
2023, SEC File No.-0-1402, and incorporated herein by reference and made a part hereof).
4.1
Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934 (filed as
Exhibit 4.1 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2019,
SEC File No. 0-1402, and incorporated herein by reference and made a part hereof).
10.1
Second Amended and Restated Credit Agreement, dated as of April 23, 2021, by and among Lincoln
10.2
10.3
Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding
Company, J.W. Harris Co., Inc., Lincoln Electric Automation, Inc., Lincoln Global, Inc., the Lenders
and KeyBank National Association (filed as Exhibit 10.4 to Form 10-Q of Lincoln Electric Holdings,
Inc. for the quarter ended March 31, 2021, SEC File No. 0-1402, and incorporated herein by reference
and made a part hereof).
First Amendment to Second Amendment and Restated Credit Agreement, dated as of March 8, 2023, by
and among Lincoln Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric
International Holding Company, J.W. Harris Co., Inc., Lincoln Electric Automation, Inc., Lincoln
Global, Inc., the Lenders and KeyBank National Association (filed as Exhibit 10.1 to Form 10-Q of
Lincoln Electric Holdings, Inc. for the quarter ended March 31, 2023, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Credit Agreement, dated as of November 29, 2022, by and among Lincoln Electric Holdings, Inc., The
Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc.,
Lincoln Electric Automation, Inc., Lincoln Global, Inc., the Lenders and PNC Bank, National
Association (filed as Exhibit 10.1 to form 8-K of Lincoln Electric Holdings, Inc. filed on December 1,
2022, SEC File No. 0-1402 and incorporated herein by reference and made a part hereof).
10.4
Note Purchase Agreement, dated as of April 1, 2015, by and among Lincoln Electric Holdings, Inc., The
Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc.,
Lincoln Global, Inc., Techalloy, Inc., Wayne Trail Technologies, Inc. and the purchasers party thereto
(filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on April 2, 2015, SEC File
No. 0-1402, and incorporated herein by reference and made a part hereof).
36
10.5
10.6
Amendment No. 1 to Note Purchase Agreement, dated as of April 1, 2015, by and among Lincoln
Electric Holdings, Inc., The Lincoln Electric Company, Lincoln Electric International Holding
Company, J.W. Harris Co., Inc., Lincoln Global, Inc., Techalloy, Inc., Wayne Trail Technologies, Inc.
and the purchasers party thereto, dated July 30, 2019 (filed as Exhibit 10.1 to Form 10-Q of Lincoln
Electric Holdings, Inc. for the quarter ended September 30, 2019, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Note Purchase Agreement, dated as of October 20, 2016, by and among Lincoln Electric Holdings, Inc.,
The Lincoln Electric Company, Lincoln Electric International Holding Company, J.W. Harris Co., Inc.,
Techalloy, Inc. and Wayne Trail Technologies, Inc. and the purchaser party thereto (filed as
Exhibit 10.4 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2016,
SEC File No. 0-1402, and incorporated herein by reference and made a part hereof).
10.7*
Non-Employee Directors’ Deferred Compensation Plan (Amended and Restated as of January 1, 2021)
10.8*
10.9*
(filed as Exhibit 10.18 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31,
2020, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof).
2005 Deferred Compensation Plan for Executives (Amended and Restated as of January 1, 2021) (filed
as Exhibit 10.21 to Form 10-K of Lincoln Electric Holdings, Inc. for the year ended December 31,
2020, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof).
The Lincoln Electric Company Restoration Plan (filed as Exhibit 4.3 to Form S-8 of Lincoln Electric
Holdings, Inc. filed on December 19, 2016, SEC File No. 333-215168, and incorporated herein by
reference and made a part hereof).
10.10*
Amendment No. 1 to The Lincoln Electric Company Restoration Plan (filed as Exhibit 10.3 to
Form 10-Q of Lincoln Electric Holdings, Inc. for the quarter ended September 30, 2020, SEC File
No. 0-1402, and incorporated herein by reference and made a part hereof).
10.11*
The Lincoln Electric Company Employee Savings Plan As Amended and Restated Effective April 25,
2022 (filed herewith).
10.12*
Amendment No. 1 to The Lincoln Electric Company Employee Savings Plan As Amended and Restated
Effective April 25, 2022 (filed herewith).
10.13*
Amendment No. 2 to The Lincoln Electric Company Employee Savings Plan As Amended and Restated
Effective April 25, 2022 (filed herewith).
10.14*
10.15*
Form of Change in Control Severance Agreement (as entered into by the Company and its executive
officers) (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric Holdings, Inc. filed on November 21,
2017, SEC File No. 0-1402, and incorporated herein by reference and made a part hereof).
Amendment No. 1 to Form of Change in Control Severance Agreement (as entered into by the
Company and its executive officers) (filed as Exhibit 10.5 to Form 10-Q of Lincoln Electric
Holdings, Inc. for the quarter ended September 30, 2020, SEC File No. 0-1402, and incorporated herein
by reference and made a part hereof).
10.16*
2006 Equity and Performance Incentive Plan (Restated as of March 3, 2011) (filed as Annex A to
10.17*
10.18*
10.19*
Lincoln Electric Holdings, Inc. proxy statement filed on March 18, 2011, SEC File No. 0-1402 and
incorporated herein by reference and made a part hereof).
2015 Equity and Incentive Compensation Plan (filed as Appendix B to Lincoln Electric Holdings, Inc.
definitive proxy statement filed on March 18, 2015, SEC File No. 0-1402, and incorporated herein by
reference and made a part hereof).
2015 Stock Plan for Non-Employee Directors (filed as Appendix C to Lincoln Electric Holdings, Inc.
definitive proxy statement filed on March 18, 2015, SEC File No. 0-1402, and incorporated herein by
reference and made a part hereof).
Amendment No. 1 to the 2015 Stock Plan for Non-Employee Directors (filed as Appendix C to Lincoln
Electric Holdings, Inc. proxy statement dated March 20, 2017, SEC File No. 0-1402, and incorporated
by reference and made a part hereof).
37
10.20*
2023 Equity and Incentive Compensation Plan (filed as Exhibit 10.1 to Form 8-K of Lincoln Electric
Holdings, Inc. filed on April 21, 2023, SEC File No. 0-1402, and incorporated herein by reference and
made a part hereof).
10.21*
2023 Stock Plan for Non-Employee Directors (filed as Exhibit 10.2 to Form 8-K of Lincoln Electric
Holdings, Inc. filed on April 21, 2023, SEC File No. 0-1402, and incorporated herein by reference and
made a part hereof).
10.22*
Form of Restricted Stock Unit Agreement for Non-Employee Directors (filed as Exhibit 10.31 to Form
10-K of Lincoln Electric Holdings, Inc. for the year ended December 31, 2022, SEC File No. 0-1402,
and incorporated herein by reference and made a part hereof).
10.23*
Form of Restricted Stock Unit Agreement for Non-Employee Directors under 2023 Stock Plan for Non-
Employee Directors (filed as Exhibit 10.1 to Form 10-Q of Lincoln Electric Holdings, Inc. for the
quarter ended June 30, 2023, SEC File No. 0-1402, and incorporated herein by reference and made a
part hereof).
10.24*
Form of Restricted Stock Unit Agreement for Non-Employee Directors under 2023 Stock Plan for Non-
10.25*
10.26*
10.27*
10.28*
10.29*
10.30*
10.31*
Employee Directors (filed herewith).
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.27 to Form 10-K of
Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.28 to Form 10-K of
Lincoln Electric Holdings, Inc. for the year ended December 31, 2017, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.37 to Form 10-K of
Lincoln Electric Holdings, Inc. for the year ended December 31, 2018, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.38 to Form 10-K of
Lincoln Electric Holdings, Inc. for the year ended December 31, 2019, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.1 to Form 10-Q of Lincoln
Electric Holdings, Inc. for the quarter ended March 31, 2021, SEC File No. 0-1402, and incorporated
herein by reference and made a part hereof).
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.1 to Form 10-Q of Lincoln
Electric Holdings, Inc. for the quarter ended March 31, 2022, SEC File No. 0-1402, and incorporated
herein by reference and made a part hereof).
Form of Stock Option Agreement for Executive Officers (filed as Exhibit 10.2 to Form 10-Q of Lincoln
Electric Holdings, Inc. for the quarter ended March 31, 2023, SEC File No. 0-1402, and incorporated
herein by reference and made a part hereof).
10.32*
Form of Stock Option Agreement for Executive Officers under 2023 Equity and Incentive
Compensation Plan (filed as Exhibit 10.2 to Form 10-Q of Lincoln Electric Holdings, Inc. for the
quarter ended June 30, 2023, SEC File No. 0-1402, and incorporated herein by reference and made a
part hereof).
10.33*
Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.33 to Form 10-K
of Lincoln Electric Holdings, Inc. for the year ended December 31, 2013, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
10.34*
Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.2 to Form 10-Q of
Lincoln Electric Holdings, Inc. for the quarter ended March 31, 2021, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
10.35*
Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.2 to Form 10-Q of
Lincoln Electric Holdings, Inc. for the quarter ended March 31, 2022, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
10.36*
Form of Restricted Stock Unit Agreement for Executive Officers (filed as Exhibit 10.3 to Form 10-Q of
Lincoln Electric Holdings, Inc. for the quarter ended March 31, 2023, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
38
10.37*
10.38*
10.39*
10.40*
Form of Restricted Stock Unit Agreement for Executive Officers under 2023 Equity and Incentive
Compensation Plan (filed as Exhibit 10.3 to Form 10-Q of Lincoln Electric Holdings, Inc. for the
quarter ended June 30, 2023, SEC File No. 0-1402, and incorporated herein by reference and made a
part hereof).
Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.3 to Form 10-
Q of Lincoln Electric Holdings, Inc., for the quarter ended March 31, 2021, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.3 to Form 10-
Q of Lincoln Electric Holdings, Inc., for the quarter ended March 31, 2022, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Form of Performance Share Award Agreement for Executive Officers (filed as Exhibit 10.4 to Form 10-
Q of Lincoln Electric Holdings, Inc., for the quarter ended March 31, 2023, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
10.41*
Form of Performance Share Award Agreement for Executive Officers under 2023 Equity and Incentive
Compensation Plan (filed as Exhibit 10.4 to Form 10-Q of Lincoln Electric Holdings, Inc., for the
quarter ended June 30, 2023, SEC File No. 0-1402, and incorporated herein by reference and made a
part hereof).
10.42*
10.43*
Form of Officer Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.1 to
Form 8-K of Lincoln Electric Holdings, Inc. filed on February 29, 2012, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
Form of Director Indemnification Agreement (effective February 23, 2012) (filed as Exhibit 10.2 to
Form 8-K of Lincoln Electric Holdings, Inc. filed on February 29, 2012, SEC File No. 0-1402, and
incorporated herein by reference and made a part hereof).
21
23
24
Subsidiaries of the Registrant (filed herewith).
Consent of Independent Registered Public Accounting Firm (filed herewith).
Powers of Attorney (filed herewith).
31.1
Certification by the Chairman, President and Chief Executive Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934 (filed herewith).
31.2
Certification by the Executive Vice President, Chief Financial Officer and Treasurer pursuant to
Rule 13a-14(a) of the Securities Exchange Act of 1934 (filed herewith).
32.1
Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 (filed herewith).
97
Lincoln Electric Holdings, Inc. Clawback Policy (Effective October 2, 2023) (filed herewith).
101.IN
S
101.SC
H
101.CA
L
101.LA
B
101.PR
E
101.DE
F
104
Inline XBRL Instance Document
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Inline XBRL Taxonomy Extension Definition Linkbase Document
Cover page Interactive Data File (embedded within the Inline XBRL document)
* Reflects management contract or other compensatory arrangement required to be filed as an exhibit pursuant to
Item 15(b) of this report.
ITEM 16. FORM 10-K SUMMARY
None.
39
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
LINCOLN ELECTRIC HOLDINGS, INC.
By:
/s/ Gabriel Bruno
Gabriel Bruno
Executive Vice President, Chief Financial Officer and
Treasurer
(principal financial and accounting officer)
February 27, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
/s/ Steven B. Hedlund
Steven B. Hedlund,
President and Chief Executive Officer
(principal executive officer)
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno,
Executive Vice President, Chief Financial Officer and
Treasurer
(principal financial and accounting officer)
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Brian D. Chambers, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Bonnie J. Fetch, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Michael F. Hilton, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Kathryn Jo Lincoln, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Phillip J. Mason, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Hellene S. Runtagh, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Curtis E. Espeland, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Patrick P. Goris, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Marc A. Howze, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Christopher L. Mapes, Executive Chairman of the Board
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Ben P. Patel, Director
February 27, 2024
/s/ Gabriel Bruno
Gabriel Bruno as
Attorney-in-Fact for
Kellye L. Walker, Director
February 27, 2024
40
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Lincoln Electric Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Lincoln Electric Holdings, Inc. (the Company) as of
December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, equity and cash
flows for each of the three years in the period ended December 31, 2023, and the related notes and financial statement
schedule listed in the Index at Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria
established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (2013 framework), and our report dated February 27, 2024 expressed an unqualified opinion
thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an
opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or
complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the
consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
F-1
Description of
the Matter
Goodwill impairment evaluation – Reporting Unit within Americas Welding Segment
As disclosed in Note 5 to the consolidated financial statements, at December 31, 2023, the
Company’s total goodwill was $694.5 million, of that, $497.6 million relates to the Americas
Welding segment. As disclosed in Note 1 to the consolidated financial statements, goodwill is tested
for impairment in the fourth quarter using the same date each year or more frequently if changes in
circumstances or the occurrence of events indicate potential impairment. The Company first
assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a
reporting unit is less than its carrying amount and whether it is necessary to perform a quantitative
goodwill impairment test. The Company may perform a quantitative test in instances where the
more-likely-than-not threshold has not been met, including when general macroeconomic conditions
or changes to the reporting unit warrant a refresh of the baseline used in a qualitative test. The
Company performed a quantitative assessment for a reporting unit within the Americas Welding
segment and determined that the fair value of the reporting unit was in excess of the carrying value.
How We
Addressed the
Matter in Our
Audit
Auditing the annual goodwill impairment test for the aforementioned reporting unit under the
quantitative assessment was complex and judgmental due to the significant estimation required in
determining the fair value of the reporting unit. In particular, the fair value estimate using the income
approach was sensitive to significant assumptions such as the weighted average cost of capital and
the terminal period revenue growth rate. Elements of these significant assumptions are forward-
looking and could be affected by future economic conditions.
We obtained an understanding, evaluated the design and tested the operating effectiveness of
controls over the Company’s goodwill impairment evaluation, including controls over the
significant assumptions mentioned above.
To test the estimated fair value used in the Company’s annual goodwill impairment test for the
reporting unit within the Americas Welding segment, our audit procedures included, among others,
assessing the valuation methodology, testing the significant assumptions discussed above, and
testing the completeness and accuracy of the underlying data used by the Company in its analysis.
As it pertains to the terminal period revenue growth rate, we compared the significant assumptions
used by management to third party industry data and economic trends, changes to the Company’s
business model, customer base or product mix, as applicable. We involved valuation specialists to
assist with our evaluation of the methodology applied and the reasonableness of certain assumptions
selected by management, including, the weighted average cost of capital. Specifically, we evaluated
the components of the weighted average cost of capital assumptions used by performing an
independent corroborative analysis with involvement of valuation specialists. We performed
sensitivity analyses of assumptions to evaluate the changes in the fair value of the reporting unit that
would result from changes in the significant assumptions.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since at least 1923, but we are unable to determine the specific year.
Cleveland, OH
February 27, 2024
F-2
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Lincoln Electric Holdings, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Lincoln Electric Holdings, Inc.’s internal control over financial reporting as of December 31, 2023,
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Lincoln Electric
Holdings, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2023, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the 2023 consolidated financial statements of the Company and our report dated February 27, 2024
expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s
Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that
our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.
F-3
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Ernst & Young LLP
Cleveland, Ohio
February 27, 2024
F-4
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
Net sales (Note 2)
Cost of goods sold
Gross profit
Selling, general & administrative expenses
Rationalization and asset impairment charges (Note 7)
Operating income
Interest expense, net
Other income (expense) (Note 12)
Income before income taxes
Income taxes (Note 13)
Net income
Basic earnings per share (Note 3)
Diluted earnings per share (Note 3)
Cash dividends declared per share
Year Ended December 31,
2022
2023
2021
4,191,636 $
2,726,191
1,465,445
758,910
(11,314)
717,849
44,371
13,388
686,866
141,618
545,248 $
3,761,211 $
2,480,451
1,280,760
656,636
11,788
612,336
29,500
9,991
592,827
120,603
472,224 $
3,234,180
2,165,575
1,068,605
597,109
9,827
461,669
22,214
(114,457)
324,998
48,418
276,580
9.50 $
9.37 $
2.63 $
8.14 $
8.04 $
2.32 $
4.66
4.60
2.09
$
$
$
$
$
See notes to these consolidated financial statements.
F-5
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Net income
Other comprehensive income (loss), net of tax:
Unrealized gain on derivatives designated and qualifying as cash flow
hedges
Defined pension plan activity
Currency translation adjustment
Other comprehensive income (loss):
Comprehensive income
Year Ended December 31,
2022
2023
2021
$ 545,248 $ 472,224 $ 276,580
2,627
(215)
43,139
45,551
5,607
88,539
(50,514)
43,632
$ 590,799 $ 454,405 $ 320,212
5,815
11,450
(35,084)
(17,819)
See notes to these consolidated financial statements.
F-6
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
Current Assets
Cash and cash equivalents
Accounts receivable (less allowance for doubtful accounts of $11,464 in 2023;
$12,556 in 2022)
Inventories (Note 16)
Other current assets
Total Current Assets
Property, plant and equipment, net (Note 1)
Intangibles, net (Note 5)
Goodwill (Note 5)
Deferred income taxes (Note 13)
Other assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Current Liabilities
Amounts due banks (Note 9)
Trade accounts payable
Accrued employee compensation and benefits
Dividends payable
Other current liabilities
Current portion of long-term debt (Note 9)
Total Current Liabilities
Long-term debt, less current portion (Note 9)
Deferred income taxes (Note 13)
Other liabilities
Total Liabilities
Shareholders' Equity
Preferred shares, without par value - at stated capital amount; authorized - 5,000,000
shares; issued and outstanding - none
Common shares, without par value - at stated capital amount; authorized -
240,000,000 shares; issued - 98,581,434 shares in 2023 and 2022; outstanding -
56,975,815 shares in 2023 and 57,623,539 shares in 2022
Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss (Note 8)
Treasury shares, at cost - 41,605,619 shares in 2023 and 40,957,895 shares in 2022
Total Equity
TOTAL LIABILITIES AND TOTAL EQUITY
See notes to these consolidated financial statements.
F-7
December 31,
2023
2022
$
393,787 $
197,150
538,830
562,864
197,630
1,693,111
575,316
186,667
694,452
45,176
182,575
541,529
665,451
153,660
1,557,790
544,871
202,706
665,257
22,811
187,111
$
3,377,297 $ 3,180,546
$
2,435 $
325,435
112,373
40,453
273,910
4
754,610
1,102,771
13,146
197,918
2,068,445
82,444
352,079
109,369
36,879
261,087
11,039
852,897
1,110,396
17,022
166,190
2,146,505
—
—
9,858
523,357
3,688,038
(229,847)
9,858
481,857
3,306,500
(275,398)
(2,488,776)
(2,682,554)
1,308,852
1,034,041
3,377,297 $ 3,180,546
$
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except per share amounts)
Common
Shares
Common
Outstanding Shares
Additional
Paid-In
Capital
Accumulated
Other
Retained
Earnings Income (Loss)
Comprehensive Treasury
Shares
Total
Balance at December 31, 2020
Net income
Unrecognized amounts from defined benefit pension plans,
net of tax
Unrealized gain on derivatives designated and qualifying
as cash flow hedges, net of tax
Currency translation adjustment
Cash dividends declared – $2.09 per share
Stock-based compensation activity
Purchase of shares for treasury
Other
Balance at December 31, 2021
Net income
Unrecognized amounts from defined benefit pension plans,
net of tax
Unrealized gain on derivatives designated and qualifying
as cash flow hedges, net of tax
Currency translation adjustment
Cash dividends declared – $2.32 per share
Stock-based compensation activity
Purchase of shares for treasury
Other
Balance at December 31, 2022
Net income
Unrecognized amounts from defined benefit pension plans,
net of tax
Unrealized gain on derivatives designated and qualifying
as cash flow hedges, net of tax
Currency translation adjustment
Cash dividends declared – $2.63 per share
Stock-based compensation activity
Purchase of shares for treasury
Other
59,641 $
9,858 $
409,958 $
2,821,359 $
(301,211) $ (2,149,714) $
276,580
88,539
5,607
(50,514)
393
(1,247)
(124,669)
38,720
2,590
(2,967)
4,299
(164,526)
58,787
9,858
451,268
2,970,303
472,224
(257,579)
(2,309,941)
11,450
5,815
(35,084)
211
(1,374)
(134,931)
29,194
1,395
(1,096)
2,458
(181,293)
57,624
9,858
481,857
3,306,500
545,248
(275,398)
(2,488,776)
(215)
2,627
43,139
451
(1,098)
(151,513)
43,609
(2,109)
(12,197)
4,987
(198,765)
790,250
276,580
88,539
5,607
(50,514)
(124,669)
43,019
(164,526)
(377)
863,909
472,224
11,450
5,815
(35,084)
(134,931)
31,652
(181,293)
299
1,034,041
545,248
(215)
2,627
43,139
(151,513)
48,596
(198,765)
(14,306)
Balance at December 31, 2023
56,977 $
9,858 $
523,357 $
3,688,038 $
(229,847) $ (2,682,554) $
1,308,852
See notes to these consolidated financial statements.
F-8
LINCOLN ELECTRIC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2022
2023
2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income
Adjustments to reconcile Net income to Net cash provided by operating activities:
Rationalization and asset impairment net charges (Note 7)
Depreciation and amortization
Gain on sale of property
Deferred income taxes (Note 13)
Stock-based compensation
Pension settlement net charges
Other, net
Changes in operating assets and liabilities, net of effects from acquisitions:
Decrease (increase) in accounts receivable
Decrease (increase) in inventories
(Increase) in other current assets
(Decrease) increase in trade accounts payable
Increase (decrease) in other current liabilities
Net change in other assets and liabilities
NET CASH PROVIDED BY OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures
Acquisition of businesses, net of cash acquired (Note 4)
Proceeds from sale of property, plant and equipment
Other investing activities
NET CASH USED BY INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
(Payments on) proceeds from short-term borrowings
(Payments on) proceeds from long-term borrowings
Proceeds from exercise of stock options
Purchase of shares for treasury
Cash dividends paid to shareholders
Other financing activities
NET CASH (USED BY) PROVIDED BY FINANCING ACTIVITIES
Effect of exchange rate changes on Cash and cash equivalents
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of period
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 545,248 $ 472,224 $ 276,580
4,779
86,670
(36,187)
(20,926)
26,231
—
(17,464)
14,980
122,094
(35,608)
(32,028)
10,056
(303)
667,542
8,100
78,059
—
(48,207)
25,267
—
11,982
(1,054)
81,146
—
(28,556)
23,787
126,502
(17,474)
(65,010)
(81,188)
(18,297)
16,852
(8,199)
(8,197)
383,386
(65,844)
(154,347)
(23,913)
82,394
68,292
(2,450)
365,063
(90,987)
(32,685)
49,494
(551)
(74,729)
(71,883)
(436,298)
3,331
159
(504,691)
(62,531)
(156,106)
6,781
6,500
(205,356)
(79,873)
(8,109)
22,365
(198,765)
(148,010)
—
(412,392)
16,216
196,637
34,351
405,444
6,385
(181,293)
(130,724)
(438)
133,725
(8,228)
4,192
46,476
(508)
19,232
(164,526)
(121,851)
(763)
(221,940)
(2,088)
(64,321)
197,150
257,279
$ 393,787 $ 197,150 $ 192,958
192,958
See notes to these consolidated financial statements.
F-9
LINCOLN ELECTRIC HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except share and per share amounts)
NOTE 1 – SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of Lincoln Electric Holdings, Inc. and its wholly-owned and
majority-owned subsidiaries for which it has a controlling interest (the "Company") after elimination of all inter-
company accounts, transactions and profits.
Certain reclassifications have been made to the prior period amounts to conform to the current period presentation, none
of which are material.
General Information
The Company is the world leader in the design, development and manufacture of arc welding products, automated
joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global
position in brazing and soldering alloys.
The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment,
plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas
regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting,
material handling, module assembly, and end of line testing.
In March 2022, in response to Russia’s invasion of Ukraine, the Company announced it was ceasing operations in Russia
and implementing plans to support its Russian employees. Although the Company’s Net sales and Total assets in Russia
are less than 1% of consolidated Net sales and Total assets as of December 31, 2023 and 2022, the Russia-Ukraine
conflict and sanctions imposed globally may result in economic and supply chain disruptions, the ultimate financial
impact of which cannot be reasonably estimated at this time. The Company continues to monitor the Russia-Ukraine
conflict and its potential impacts.
Translation of Foreign Currencies
Asset and liability accounts are translated into U.S. dollars using exchange rates in effect at the dates of the Consolidated
Balance Sheets; revenue and expense accounts are translated at average monthly exchange rates. Translation adjustments
are reflected as a component of Total equity. For subsidiaries operating in highly inflationary economies, both historical
and current exchange rates are used in translating balance sheet accounts and translation adjustments are included in Net
income. An economy is considered highly inflationary under GAAP if the cumulative inflation rate for a three-year
period meets or exceeds 100 percent. The Turkish economy exceeded the three-year cumulative inflation rate of
100 percent during the second quarter of 2022. As a result, the financial statements of the Company’s Turkish operation
are reported under highly inflationary accounting rules as of April 1, 2022. Under highly inflationary accounting, the
financial statements of the Company’s Turkish operation have been remeasured into the Company’s reporting currency
(U.S. dollar). Beginning April 1, 2022, the exchange gains and losses from the remeasurement of monetary assets and
liabilities are reflected in current earnings, rather than “Accumulated other comprehensive loss” on the balance sheet.
For the years ended December 31, 2023 and 2022, this impact was not significant to the Company’s results.
F-10
The translation of assets and liabilities originally denominated in foreign currencies into U.S. dollars is for consolidation
purposes, and does not necessarily indicate that the Company could realize or settle the reported value of those assets
and liabilities in U.S. dollars. Additionally, such a translation does not necessarily indicate that the Company could
return or distribute the reported U.S. dollar value of the net equity of its foreign operations to shareholders.
Foreign currency transaction gains and losses are included in Selling, general & administrative expenses and were losses
of $1,744 in 2023 and gains of $3,633 and $1,332 in 2022 and 2021, respectively.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash
equivalents.
Inventories
Inventories are valued at the lower of cost or net realizable value. Fixed manufacturing overhead costs are allocated to
inventory based on normal production capacity and abnormal manufacturing costs are recognized as period costs. Cost
for a substantial portion of U.S. inventories is determined on a last-in, first-out (“LIFO”) basis. At December 31, 2023
and 2022, approximately 37% and 38% of total inventories, respectively, were valued using the LIFO method. Cost of
other inventories is determined by costing methods that approximate a first-in, first-out (“FIFO”) basis. Refer to Note 16
for additional details.
Reserves are maintained for estimated obsolescence or excess inventory equal to the difference between the cost of
inventory and the estimated net realizable value based upon assumptions about future demand and market conditions.
The reserve for excess and obsolete inventory was $31,881 and $30,164 at December 31, 2023 and 2022, respectively.
Long-lived Assets
Property, Plant and Equipment
Property, plant and equipment are stated at cost and include improvements which significantly increase capacities or
extend the useful lives of existing plant and equipment. Depreciation and amortization are computed using a straight-line
method over useful lives ranging from 3 years to 20 years for machinery, tools and equipment, and up to 40 years for
buildings. Net gains or losses related to asset dispositions are recognized in earnings in the period in which dispositions
occur.
Routine maintenance, repairs and replacements are expensed as incurred. The Company capitalizes interest costs
associated with long-term construction in progress.
Property, plant and equipment, net in the Consolidated Balance Sheet is comprised of the following components:
Land
Buildings
Machinery and equipment
Less accumulated depreciation
Total
Leases
F-11
December 31,
2023
$
67,949 $
445,041
939,316
1,452,306
876,990
575,316 $
$
2022
71,446
447,098
916,870
1,435,414
890,543
544,871
The Company determines if an agreement is a lease at inception. The Company records a right-of-use asset on its
Consolidated Balance Sheets to represent its right to use an underlying asset for the lease term. The Company records a
lease liability on its Consolidated Balance Sheets to represent its obligation to make lease payments arising from the
lease. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the
present value of lease payments over the lease term. As most of the Company’s operating leases do not provide an
implicit rate, the Company uses its incremental borrowing rate based on information available at commencement date to
present value the lease payments.
The Company has operating leases for sales offices, manufacturing facilities, warehouses and distribution centers,
transportation equipment, office equipment and information technology equipment. Some of these leases are
noncancelable. Variable or short-term lease costs contained within the Company’s operating leases are not material.
Most leases include one or more options to renew, which can extend the lease term from 1 to 11 years or more. The
exercise of lease renewal options is at the Company’s sole discretion. Certain leases also include options to purchase the
leased property. Leases with an initial term of 12 months or less are not recorded on the Company’s Consolidated
Balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.
The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a
transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any
material residual value guarantees or material restrictive covenants.
Impairments
The Company periodically evaluates whether current facts or circumstances indicate that the carrying value of its
depreciable long-lived assets, including right-of-use assets and finite-lived intangible assets, to be held and used may not
be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by
the long-lived asset, or the appropriate grouping of assets, is compared to the carrying value to determine whether
impairment exists. If an asset is determined to be impaired, a loss is recognized to the extent that carrying value exceeds
fair value. Fair value is measured based on quoted market prices in active markets, if available. If quoted market prices
are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of
estimated future cash flows. Refer to Notes 5, 7 and 17 for additional details.
Goodwill and Intangibles
Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired.
Intangible assets other than goodwill are recorded at fair value at the time acquired or at cost, if applicable. Intangible
assets that do not have indefinite lives are amortized in line with the pattern in which the economic benefits of the
intangible asset are consumed. If the pattern of economic benefit cannot be reliably determined, the intangible assets are
amortized on a straight-line basis over the shorter of the legal or estimated life. These types of assets are assessed for
impairment in a manner consistent with long-lived assets described above. Goodwill and indefinite-lived intangible
assets are not amortized, but are tested for impairment in the fourth quarter using the same date each year or more
frequently if changes in circumstances or the occurrence of events indicate potential impairment.
In performing the annual impairment test, the fair value of each indefinite-lived intangible asset is compared to its
carrying value and an impairment charge is recorded if the carrying value exceeds the fair value. For goodwill, the
Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a
reporting unit is less than its carrying amount, and whether it is necessary to perform the quantitative goodwill
impairment test. The quantitative test is only required if the Company concludes that it is more-likely-than-not that a
reporting unit’s fair value is less than its carrying amount. The Company may also perform a quantitative test in
instances where the more-likely-than-not threshold has not been met, including when general macroeconomic conditions
or changes to the reporting unit warrant a refresh of the baseline used in a qualitative test. For quantitative testing, the
Company compares the fair value of each reporting unit with its carrying amount. If the carrying amount exceeds the fair
value, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair
value, not to exceed the total amount of goodwill allocated to that reporting unit.
F-12
Fair values are determined using established business valuation techniques and models developed by the Company,
estimates of market participant assumptions of future cash flows, future growth rates and discount rates to value
estimated cash flows. Changes in economic and operating conditions, actual growth below the assumed market
participant assumptions or an increase in the discount rate could result in an impairment charge in a future period. Refer
to Note 5 for additional details.
Fair Value Measurements
Financial assets and liabilities, such as the Company’s defined benefit pension plan assets and derivative contracts, are
valued at fair value using the market and income valuation approaches. Fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date (exit price). The following hierarchy is used to classify the inputs that measure fair value:
Level 1
Level 2
Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active
markets.
Inputs to the valuation methodology include:
Quoted prices for similar assets or liabilities in active markets;
Quoted prices for identical or similar assets or liabilities in inactive markets;
Inputs other than quoted prices that are observable for the asset or liability; and
Inputs that are derived principally from or corroborated by observable market data by correlation or
other means.
If the asset or liability has a specific (contractual) term, the Level 2 input must be observable for
substantially the full term of the asset or liability.
Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
Level 3
Refer to Notes 11 and 15 for additional details.
Revenue Recognition
Revenue is recognized when obligations under the terms of a contract are satisfied and control is transferred to the
customer. Revenue is measured as the amount of consideration the Company expects to be entitled to in exchange for
goods or services. Substantially all of the Company’s sales arrangements are short-term in nature involving a single
performance obligation. The Company recognizes revenue when the performance obligation is satisfied and control of
the product is transferred to the customer generally based upon shipping terms. In addition, certain customized
automation performance obligations are accounted for over time. Under this method, revenue recognition is primarily
based upon the ratio of costs incurred to date compared with estimated total costs to complete. The cumulative impact of
revisions to total estimated costs is reflected in the period of the change, including anticipated losses. Less than 10% of
the Company’s Net sales are recognized over time.
The Company recognizes any discounts, credits, returns, rebates and incentive programs based on reasonable estimates
as a reduction of sales to arrive at Net sales at the same time the related revenue is recorded. Taxes collected by the
Company, including sales tax and value added tax, are excluded from Net sales. The Company recognizes freight billed
as a component of Net sales and shipping costs as a component of Cost of goods sold when control transfers to the
customer. Sales commissions are expensed when incurred because the amortization period is generally one year or less.
These costs are recorded within Selling, general and administrative expenses in the Company’s Consolidated Statements
of Income.
The Company’s payment terms vary by the type and location of the customer and the products or services offered. The
Company does not offer any payment terms that would meet the requirements for consideration as a financing
component under Topic 606.
F-13
Refer to Note 2 for additional details.
Distribution Costs
Distribution costs, including warehousing and freight related to product shipments, are included in Cost of goods sold.
Stock-Based Compensation
Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over
the vesting period. No expense is recognized for any stock options, restricted or deferred shares or restricted stock units
ultimately forfeited because the recipients fail to meet vesting requirements.
Common stock issuable upon the exercise of employee stock options is excluded from the calculation of diluted earnings
per share when the calculation of option equivalent shares is anti-dilutive. Refer to Note 10 to the consolidated financial
statements for additional details.
Financial Instruments
The Company uses derivative instruments to manage exposures to interest rates, commodity prices and currency
exchange rate fluctuations on certain purchase and sales transactions, balance sheet and net investment exposures.
Derivative contracts to hedge currency and commodity exposures are generally written on a short-term basis, but may
cover exposures for up to 3 years while interest rate contracts may cover longer periods consistent with the terms of the
underlying debt. The Company does not enter into derivatives for trading or speculative purposes.
All derivatives are recognized at fair value on the Company’s Consolidated Balance Sheets. The accounting for gains
and losses resulting from changes in fair value depends on the use of the derivative and whether it is designated and
qualifies for hedge accounting. The Company formally documents the relationship of the hedge with the hedged item as
well as the risk-management strategy for all designated hedges. Both at inception and on an ongoing basis, the hedging
instrument is assessed as to its effectiveness, when applicable. If and when a derivative is determined not to be highly
effective as a hedge, the underlying hedged transaction is no longer likely to occur, or the derivative is terminated, hedge
accounting is discontinued. The cash flows from settled derivative contracts are recognized in Net cash provided by
operating activities in the Company’s Consolidated Statements of Cash Flows.
The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a
number of major banks and financial institutions. The Company manages individual counterparty exposure by
monitoring the credit rating of the counterparty and the size of financial commitments and exposures between the
Company and the counterparty.
Cash flow hedges
Certain foreign currency forward contracts and commodity contracts are qualified and designated as cash flow hedges.
The effective portion of the fair value unrealized gain or loss on cash flow hedges are reported as a component of
Accumulated other comprehensive income ("AOCI") with offsetting amounts recorded as Other current assets, Other
assets, Other current liabilities or Other liabilities depending on the position and the duration of the contract. At
settlement, the realized gain or loss is recorded in Cost of goods sold or Net sales for hedges of purchases and sales,
respectively, in the same period or periods during which the hedged transaction affects earnings. The ineffective portion
on cash flow hedges is recognized in current earnings.
In anticipation of future debt issuance associated with the Notes referenced in Note 9, the Company has interest rate
forward starting swap agreements to hedge the variability of future changes in interest rates. The forward starting swap
agreements were qualified and designated as a cash flow hedge. The changes in fair value are recorded as part of AOCI,
and upon completion of debt issuance and termination of the swaps, are amortized to interest expense over the life of the
underlying debt.
F-14
Fair value hedges
Certain interest rate swap agreements were qualified and designated as fair value hedges. The interest rate swap
agreements designated as fair value hedges meet the shortcut method requirements under accounting standards for
derivatives and hedging. Accordingly, changes in the fair value of these agreements are considered to exactly offset
changes in the fair value of the underlying long-term debt. Changes in fair value are recorded in Other assets or Other
liabilities with offsetting amounts recorded as a fair value adjustment to the carrying value of Long-term debt, less
current portion.
Net investment hedges
For derivative instruments that qualify as a net investment hedge, the effective portion of the fair value gains or losses
are recognized in AOCI with offsetting amounts recorded as Other current assets, Other assets, Other current liabilities
or Other liabilities depending on the position and the duration of the contract. The gains or losses are subsequently
reclassified to Selling, general and administrative expenses, as the underlying hedged investment is liquidated.
Derivatives not designated as hedging instruments
The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are
held as hedges of certain balance sheet exposures. The gains or losses on these contracts are recognized in Selling,
general and administrative expenses, offsetting the losses or gains on the exposures being hedged.
Refer to Note 14 to the consolidated financial statements for additional details.
Research and Development
Research and development costs are charged to Selling, general & administrative expenses as incurred and totaled
$71,235, $63,207 and $55,969 in 2023, 2022 and 2021, respectively.
Bonus
The Company’s discretionary employee bonus programs, which for certain U.S.-based employees are net of medical
costs, are included in Selling, general & administrative expenses. Bonus costs were $192,498, $159,281 and $120,686 in
2023, 2022 and 2021, respectively.
Income Taxes
Deferred income taxes are recognized at currently enacted tax rates for temporary differences between the GAAP and
income tax basis of assets and liabilities and operating loss and tax credit carry-forwards. In assessing the realizability of
deferred tax assets, the Company assesses whether it is more-likely-than-not that a portion or all of the deferred tax
assets will not be realized.
The Company maintains liabilities for unrecognized tax benefits related to uncertain income tax positions in various
jurisdictions. The Company uses judgment in determining whether the technical merits of tax positions are more-likely-
than-not to be sustained. Judgment is also used in measuring the related amount of tax benefit that qualifies for
recognition, including the interpretation of applicable tax law, regulations and tax rulings.
The Company elects to treat any Global Intangible Low Taxed Income inclusion as a period expense in the year
incurred.
Refer to Note 13 for additional details.
F-15
Acquisitions
Upon acquisition of a business, the Company uses the income, market or cost approach (or a combination thereof) for
the valuation as appropriate. The valuation inputs in these models and analyses are based on market participant
assumptions. Market participants are considered to be buyers and sellers unrelated to the Company in the principal or
most advantageous market for the asset or liability.
Fair value estimates are based on a series of judgments about future events and uncertainties and rely on estimates and
assumptions. Management values property, plant and equipment using the cost approach supported where available by
observable market data, which includes consideration of obsolescence. Management values acquired intangible assets
using the relief from royalty method or excess earnings method, forms of the income approach supported by observable
market data for peer companies. The significant assumptions used to estimate the value of the acquired intangible assets
include discount rates and certain assumptions that form the basis of future cash flows (such as revenue growth rates,
customer attrition rates, and royalty rates). Acquired inventories are marked to fair value. For certain items, the pre-
acquisition carrying value is determined to be a reasonable approximation of fair value based on information available to
the Company. Refer to Note 4 for additional details.
Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial
statements and notes. Actual results could differ from these estimates.
New Accounting Pronouncements
The following section provides a description of new Accounting Standards Updates (“ASU”) issued by the Financial
Accounting Standards Board ("FASB") that are applicable to the Company.
The following ASUs were adopted as of January 1, 2023 and did not have a significant financial impact on the
Company’s consolidated financial statements unless otherwise described within the table below:
Standard
ASU No. 2022-04, Liabilities-
Supplier Finance Programs
(Subtopic 405-50), issued
September 2022.
ASU No. 2021-08, Business
Combinations (Subtopic 805),
issued October 2021.
Description
Requires disclosure about a company’s supplier finance program, including key
terms, amount outstanding, assets pledged as applicable, and presentation on the
balance sheet. Refer to Note 19 for the impacts on the Company’s consolidated
financial statements.
Requires the acquirer in a business combination to recognize and measure contract
assets and contract liabilities acquired in a business combination in accordance with
Topic 606. The adoption did not have a material impact on the Company’s
consolidated financial statements.
F-16
The Company is currently evaluating the impact on its financial statements of the following ASUs:
Standard
ASU No. 2023-06, Disclosure
Improvements, issued October
2023
Description
Requires amending certain disclosure and presentation requirements for a variety
of topics within the ASC. The effective date for each amended topic in the ASC is
either the date on which the SEC’s removal of the related disclosure requirement
from Regulation S-X or S-K becomes effective, or June 30, 2027, if the SEC has
not removed the requirements by that date. Early adoption is prohibited.
ASU No. 2023-01, Leases-
Common Control Arrangements
(Topic 842), issued March 2023
Requires a lessee in a common-control arrangement to amortize leasehold
improvements that it owns over the improvements’ useful life, regardless of the
lease term. The requirement of the ASU is effective January 1, 2024.
ASU No. 2023-07, Segment
Reporting (Topic 280), issued
November 2023.
ASU No. 2023-09, Income Taxes
(Topic 740), issued December
2023.
ASU No. 2022-04, Liabilities-
Supplier Finance Programs
(Subtopic 405-50), issued
September 2022.
Requires enhanced disclosures about significant segment expenses, including
significant segment expenses that are regularly provided to the chief operating
decision maker (“CODM”), the title and position of the CODM, an amount for
other segment items by reportable segment, and disclosures about segment profit
or loss and assets on an annual and interim basis. The amendments are effective
for annual periods beginning January 1, 2024, and interim periods beginning
January 1, 2025. Early adoption is permitted.
Requires disclosure of specific categories in rate reconciliation and additional
information for reconciling items that meet a quantitative threshold, additional
information about income taxes paid, and disclosure of disaggregated income tax
information. The amendments are effective January 1, 2025 and early adoption is
permitted.
Requires disclosure about a company’s supplier finance programs, including a
period-over-period balance roll forward. This requirement of the ASU is effective
January 1, 2024 and should be applied prospectively.
NOTE 2 — REVENUE RECOGNITION
The following table presents the Company’s Net sales disaggregated by product line:
Year Ended December 31,
2022
2021
2023
Consumables
Equipment
Net sales
$ 2,212,314 $ 2,183,019 $ 1,856,880
1,377,300
$ 4,191,636 $ 3,761,211 $ 3,234,180
1,578,192
1,979,322
Consumable sales consist of welding, brazing and soldering filler metals. Equipment sales consist of arc welding
equipment, welding accessories, wire feeding systems, fume control equipment, plasma and oxy-fuel cutting systems,
specialty gas regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for
joining, cutting, material handling, module assembly, and end of line testing. Consumable and Equipment products are
sold within each of the Company’s operating segments.
Within the Equipment product line, there are certain customer contracts related to automation products that may include
multiple performance obligations. For such arrangements, the Company allocates revenue to each performance
obligation based on its relative standalone selling price. The Company generally determines the standalone selling price
based on the prices charged to customers or using expected cost plus margin. Less than 10% of the Company’s Net sales
are recognized over time.
F-17
At December 31, 2023, the Company recorded $40,063 related to advance customer payments and $52,422 related to
billings in excess of revenue recognized. These contract liabilities are included in Other current liabilities in the
Consolidated Balance Sheets. At December 31, 2022, the balances related to advance customer payments and billings in
excess of revenue recognized were $78,756 and $34,771, respectively. Substantially all of the Company’s contract
liabilities are recognized within twelve months based on contract duration. The Company records an asset for contracts
where it has recognized revenue, but has not yet invoiced the customer for goods or services. At December 31, 2023 and
2022, $41,816 and $35,252, respectively, related to these contract assets which are included in Other current assets in the
Consolidated Balance Sheets. Contract asset amounts are expected to be billed within the next twelve months.
NOTE 3 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings per share:
Numerator:
Net income
Denominator (shares in 000's):
Basic weighted average shares outstanding
Effect of dilutive securities - Stock options and awards
Diluted weighted average shares outstanding
Basic earnings per share
Diluted earnings per share
2023
Year Ended December 31,
2022
2021
$
545,248 $
472,224 $
276,580
57,364
857
58,221
58,030
719
58,749
$
$
9.50 $
9.37 $
8.14 $
8.04 $
59,309
753
60,062
4.66
4.60
For the years ended December 31, 2023, 2022 and 2021, common shares subject to equity-based awards of 69,901,
127,358 and 2,949, respectively, were excluded from the computation of diluted earnings per share because the effect of
their exercise would be anti-dilutive.
NOTE 4 – ACQUISITIONS
On May 3, 2023, the Company acquired 100% ownership of Powermig Automação e Soldagem Ltda. (“Powermig”), a
privately held automation engineering firm headquartered in Caxias do Sul, Rio Grande do Sul, in Brazil. The net
purchase price was $29,572, net of cash acquired, and it was accounted for as a business combination. In 2022,
Powermig generated sales of approximately $15,000 (unaudited). Beginning May 3, 2023, the Company’s Consolidated
Statement of Income includes the results of Powermig, which were not material for the year ended December 31, 2023.
Powermig specializes in designing and engineering industrial welding automation solutions for the heavy industry and
transportation sectors. The acquisition broadened the Company’s automation portfolio and capabilities.
On December 1, 2022, the Company acquired 100% ownership of Fori Automation, LLC (“Fori”) for an agreed upon
purchase price of $427,000, which was adjusted for certain debt like obligations, for total purchase price consideration of
$468,683 or $416,353 net of cash acquired, before final and customary adjustments. In 2022, the Company recognized
$5,196 in acquisition costs related to Fori and were expensed as incurred and included in “Selling, general, and
administrative expenses” in the Consolidated Statements of Income. Fori is a leading designer and manufacturer of
complex, multi-armed automated welding systems, with an extensive range of automated assembly systems, automated
material handling solutions, automated large-scale, industrial guidance vehicles, and end of line testing systems. The
acquisition of Fori extended the Company’s market presence within the automotive sector as well as its automation
footprint in the International Welding segment. For the twelve months ended December 31, 2023, the Company’s
Consolidated Statements of Income include the results of Fori, including Net Sales of $263,203 while net income for the
year was not material.
The acquisition of Fori has been accounted for as a business combination, which requires the assets acquired and
liabilities assumed be recognized at their respective fair values as of the acquisition date. The process of estimating the
fair values of certain tangible assets, identifiable intangible assets and assumed liabilities requires the use of judgment in
F-18
determining the appropriate assumptions and estimates. The table below summarizes the final fair values of the assets
acquired and liabilities assumed on the acquisition date.
For the twelve months ended December 31, 2023, the adjustments to the preliminary purchase price allocation did not
have a material impact on the Consolidated Balance Sheets or Consolidated Statements of Income.
Assets Acquired and Liabilities Assumed
Cash and cash equivalents
Accounts receivable
Inventory
Property, plant and equipment (1)
Intangible assets (2)
Accounts payable
Net other assets and liabilities (3)
Total purchase price consideration
Purchase Price Allocation
$
52,330
64,439
67,763
36,863
69,350
17,996
195,934
468,683
$
(1) Property, plant and equipment acquired includes a number of manufacturing and distribution sites, including the
related facilities, land and leased sites, and machinery and equipment for use in manufacturing operations.
(2) Intangible asset balances of $22,000 and $18,200, respectively, were assigned to trade names and customer
relationships (15 year weighted average useful life). Of the remaining amount, $24,900 was assigned to
technology know-how (10 year weighted average useful life) and $4,250 was assigned to restrictive covenants
(4 year weighted average life).
(3) Consists primarily of goodwill of $244,325.
Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the
anticipated synergies of acquiring Fori. A portion of the goodwill is deductible for tax purposes.
On March 1, 2022, the Company acquired 100% ownership of Kestra Universal Soldas, Industria e Comercio,
Imporacao e Exportacao Ltda. (“Kestra”), a privately held manufacturer headquartered in Atibaia, Sao Paulo State,
Brazil. The net purchase price was $22,294, net of cash acquired and accounted for as a business combination. In 2022,
the Company recognized $365 in acquisition costs related to Kestra and were expensed as incurred and included in
“Selling, general, and administrative expenses” in the Consolidated Statements of Income. Kestra manufactures and
provides specialty welding consumables, wear plates and maintenance and repair services for alloy and wear-resistant
products commonly used in mining, steel, agricultural and industrial mill applications. The acquisition broadened the
Company’s specialty alloys portfolio and services.
On July 28, 2021, the Company acquired 100% ownership of Overstreet-Hughes Company, Inc. and Shoals Tubular,
Inc. (“FTP”). The net purchase price was $71,716, net of cash acquired and accounted for as a business combination.
The Company recognized $346 in acquisition transaction costs in 2021 which were expensed as incurred and included in
“Selling, general, and administrative expenses” in the Consolidated Statements of Income. FTP manufactures copper and
aluminum headers, distributor assemblies and manifolds in the United States and Mexico for the heating, ventilation, and
air conditioning sector (“HVAC”). The acquisition further differentiated The Harris Products Group’s competitive
position serving HVAC original equipment manufacturers with a comprehensive portfolio of solutions for the fabrication
of HVAC coils and accelerates growth in this market.
On April 1, 2021, the Company acquired 100% ownership of Zeman Bauelemente Produktionsgesellschaft m.b.H.
(“Zeman"), a division of the Zeman Group. The net purchase price was $84,390, net of cash acquired and accounted for
as a business combination. The Company recognized $1,577 in acquisition transaction costs in 2021, which were
expensed as incurred and included in “Selling, general, and administrative expenses” in the Consolidated Statements of
Income. Zeman, based in Vienna, Austria, is a leading designer and manufacturer of robotic assembly and arc welding
F-19
systems that automate the tacking and welding of steel beams. The acquisition expanded the Company’s international
automation capabilities to serve customers in the structural steel and infrastructure sectors.
The acquired companies discussed above are not material individually, or in the aggregate, to the actual or pro forma
Consolidated Statements of Income or Consolidated Statements of Cash Flows; as such, pro forma information related to
these acquisitions have not been presented.
NOTE 5 – GOODWILL AND INTANGIBLES
The changes in the carrying amount of goodwill by reportable segments for the years ended December 31, 2023 and
2022 were as follows:
Americas
Welding
International
Welding
The Harris
Products
Group
Balance as of December 31, 2021
Additions and adjustments (1)
Foreign currency translation
Balance as of December 31, 2022
Additions and adjustments (2)
Foreign currency translation
Balance as of December 31, 2023
$ 279,983 $ 107,093 $
215,617
(3,413)
492,187
(2,899)
8,312
31,288
(8,462)
129,919
23,111
449
$ 497,600 $ 153,479 $
Consolidated
43,086 $ 430,162
246,746
(11,651)
665,257
20,212
8,983
43,373 $ 694,452
(159)
224
43,151
—
222
(1) Additions to Americas Welding reflect goodwill recognized in the acquisition of Fori and Kestra in 2022.
International Welding reflect goodwill recognized in the acquisition of Fori in 2022.
(2) Adjustments to Americas Welding reflect goodwill recognized in the acquisition of Powermig offset by Fori
purchase accounting adjustments in 2023. Additions to International Welding reflect Fori purchase accounting
adjustments in 2023.
F-20
Gross carrying values and accumulated amortization of intangible assets other than goodwill by asset class were as
follows:
Intangible assets not subject to amortization
Trademarks and trade names
Intangible assets subject to amortization
Trademarks and trade names
Customer relationships
Patents
Other
Total intangible assets subject to amortization
December 31, 2023
December 31, 2022
Gross
Amount
Accumulated Gross
Amortization Amount
Accumulated
Amortization
$ 16,038
$ 15,963
$ 93,065 $
171,338
25,150
111,816
52,510 $ 93,424 $ 47,969
95,385
170,231
15,113
23,603
54,452
112,404
$ 401,369 $ 230,740 $ 399,662 $ 212,919
102,643
15,879
59,708
During 2023, the Company acquired intangible assets either individually or as part of a group of assets, with an initial
purchase price allocation and weighted-average as follows:
Acquired intangible assets subject to amortization
Trademarks and trade names
Customer relationships
Other
Total acquired intangible assets subject to amortization
Year Ended December 31, 2023
Purchase Price
Weighted
Average Life
Allocation
$
$
2,326
4,050
2,025
8,401
15
10
9
Aggregate amortization expense was $25,983, $21,908 and $21,155 for 2023, 2022 and 2021, respectively. During 2023
and 2022, the Company determined that for certain intangible assets, the carrying value of the assets exceeded the fair
value resulting in an impairment. The Company recognized non-cash impairment charges of $1,564 and $1,018 in 2023
and 2022, respectively, which is recorded in Rationalization and asset impairment charges in the Company’s
Consolidated Statements of Income. During 2023, the Company Estimated annual amortization expense for intangible
assets for each of the next five years is $31,245 in 2024, $30,322 in 2025, $28,621 in 2026, $26,332 in 2027 and $23,550
in 2028.
NOTE 6 – SEGMENT INFORMATION
The Company’s primary business is the design, development and manufacture of arc welding products, automated
joining, assembly and cutting systems, plasma and oxy-fuel cutting equipment. The Company also has a leading global
position in brazing and soldering alloys.
The Company’s products include arc welding, brazing and soldering filler metals (consumables), arc welding equipment,
plasma and oxyfuel cutting systems, wire feeding systems, fume control equipment, welding accessories, specialty gas
regulators, and education solutions; as well as a comprehensive portfolio of automated solutions for joining, cutting,
material handling, module assembly, and end of line testing.
The Company has aligned its organizational and leadership structure into three operating segments to support growth
strategies and enhance the utilization of the Company’s worldwide resources and global sourcing initiatives. The
operating segments consist of Americas Welding, International Welding and The Harris Products Group. The Americas
Welding segment includes welding operations in North and South America. The International Welding segment includes
welding operations in Europe, Africa, Asia and Australia. The Harris Products Group includes the Company’s global
cutting, soldering and brazing businesses, specialty gas equipment, as well as its retail business in the United States.
F-21
Segment performance is measured and resources are allocated based on a number of factors, the primary measure being
the adjusted earnings before interest and income taxes ("Adjusted EBIT") profit measure. EBIT is defined as Operating
income plus Other income. Segment EBIT is adjusted for special items as determined by management such as the impact
of rationalization activities, certain asset impairment charges and gains or losses on disposals of assets. The accounting
principles applied at the operating segment level are generally the same as those applied at the consolidated financial
statement level with the exception of LIFO. Segment assets include inventories measured on a FIFO basis while
consolidated inventories include inventories reported on a LIFO basis. Segment and consolidated income before interest
and income taxes include the effect of inventories reported on a LIFO basis. At December 31, 2023, 2022 and 2021
approximately 37%, 38% and 36%, respectively, of total inventories were valued using the LIFO method. LIFO is used
for a substantial portion of U.S. inventories included in Americas Welding. Inter-segment sales are recorded at agreed
upon prices that approximate arm’s length prices and are eliminated in consolidation. Corporate-level expenses are
allocated to the operating segments.
F-22
Financial information for the reportable segments follows:
Americas
International Products
Welding (1) Welding (2) Group (3)
Corporate /
Eliminations (4) Consolidated
The Harris
For the Year Ended December 31, 2023
Net sales
Inter-segment sales
Total
Adjusted EBIT
Special items charge (gain)
EBIT
Interest income
Interest expense
Income before income taxes
Total assets
Capital expenditures
Depreciation and amortization
For the Year Ended December 31, 2022
Net sales
Inter-segment sales
Total
Adjusted EBIT
Special items charge (gain)
EBIT
Interest income
Interest expense
Income before income taxes
Total assets
Capital expenditures
Depreciation and amortization
For the Year Ended December 31, 2021
Net sales
Inter-segment sales
Total
Adjusted EBIT
Special items charge
EBIT
Interest income
Interest expense
Income before income taxes
Total assets
Capital expenditures
Depreciation and amortization
$ 2,655,546 $ 1,040,006 $
127,536
$ 2,783,082 $
538,269 $
$
9,858
528,411 $
$
31,498
1,071,504 $
136,497 $
(9,721)
146,218 $
496,084 $
10,641
506,725 $
74,144 $
—
74,144 $
— $ 4,191,636
(169,675)
—
(169,675) $ 4,191,636
731,374
137
731,237
6,762
(51,133)
686,866
(17,536) $
—
(17,536) $
$
$ 2,365,737 $
61,752
55,821
1,046,369 $
20,568
22,023
340,463 $
8,550
9,611
(375,272) $ 3,377,297
90,987
86,670
117
(785)
$ 2,288,934 $
122,019
$ 2,410,953 $
462,819 $
$
(3,060)
465,879 $
$
954,281 $
31,503
985,784 $
120,157 $
11,681
108,476 $
517,996 $
11,040
529,036 $
64,008 $
—
64,008 $
— $ 3,761,211
—
(164,562)
(164,562) $ 3,761,211
636,951
14,624
622,327
1,607
(31,107)
592,827
(10,033) $
6,003
(16,036) $
$
$ 2,122,729 $
43,003
47,291
994,905 $
17,955
20,949
361,989 $
10,925
9,819
(299,077) $ 3,180,546
71,883
78,059
—
—
$ 1,824,481 $
140,650
$ 1,965,131 $
329,016 $
$
123,114
205,902 $
$
948,125 $
26,331
974,456 $
106,208 $
15,234
90,974 $
461,574 $
8,096
469,670 $
68,447 $
3,785
64,662 $
— $ 3,234,180
(175,077)
—
(175,077) $ 3,234,180
491,268
144,056
347,212
1,567
(23,781)
324,998
(12,403) $
1,923
(14,326) $
$
$ 1,521,083 $
37,717
49,510
938,061 $
16,916
24,998
330,678 $
7,898
6,795
(197,515) $ 2,592,307
62,531
81,146
—
(157)
(1) 2023 special items reflect Rationalization and asset impairment net charges of $468 and amortization of step up in
value of acquired inventories of $9,390.
2022 special items reflect Rationalization and asset impairment net gains of $431, final settlement gains related to
the termination of a pension plan of $3,735 and amortization of step up in value of acquired inventories of $1,106.
2021 special items reflect pension settlement charges of $123,091.
(2) 2023 special items reflect Rationalization and asset impairment net gains of $11,782, amortization of step up in
value of acquired inventories of $2,862, gain on asset disposal of $1,646, and pension settlement charges of $845.
2022 special items reflect Rationalization and asset impairment charges of $11,681.
F-23
2021 special items reflect Rationalization and asset impairment charges of $9,804, pension settlement charges of
$446 and amortization of step up in value of acquired inventories of $4,984.
(3) 2021 special items reflect pension settlement charges of $2,965 and amortization of step up in value of acquired
inventories of $820.
(4) 2022 special items reflect acquisition transaction and integration costs of $6,003 related acquisitions as discussed in
Note 4 to the consolidated financial statements.
2021 special items reflect acquisition transaction and integration costs of $1,923 related acquisitions as discussed in
Note 4 to the consolidated financial statements.
Export sales (excluding inter-company sales) from the United States were $238,704 in 2023, $173,033 in 2022 and
$149,110 in 2021. No individual customer comprised more than 10% of the Company’s total revenues for any of the
three years ended December 31, 2023.
The geographic split of the Company’s Net sales, based on the location of the customer, and property, plant and
equipment were as follows:
Year Ended December 31,
2022
2023
2021
Net sales:
United States
Foreign countries
Total
Property, plant and equipment, net:
United States
Foreign countries
Total
$ 2,398,560 $ 2,128,457 $ 1,726,498
1,507,682
$ 4,191,636 $ 3,761,211 $ 3,234,180
1,793,076
1,632,754
2023
December 31,
2022
2021
$
$
293,172 $
282,144
575,316 $
267,654 $
277,217
544,871 $
262,247
249,497
511,744
NOTE 7 – RATIONALIZATION AND ASSET IMPAIRMENTS
The Company has rationalization plans primarily within the International Welding segment. The plans include headcount
restructuring and the consolidation of manufacturing facilities to better align the cost structure with economic conditions
and operating needs. At December 31, 2023, liabilities of $15,086 for International Welding were recognized in Other
current liabilities in the Company's Consolidated Balance Sheet. The Company does not anticipate significant additional
charges related to the completion of these plans.
The Company recorded rationalization and asset impairment net gain of $11,314 for the year ended December 31, 2023
and net charges of $11,788 and $9,827 for the years ended December 31, 2022 and 2021, respectively, related to these
plans. The charges are primarily related to employee severance, asset impairments and gains or losses on the disposal of
assets.
The Company believes the rationalization actions will positively impact future results of operations and will not have a
material effect on liquidity and sources and uses of capital. The Company continues to evaluate its cost structure and
additional rationalization actions may result in charges in future periods.
The following table summarizes the activity related to the rationalization liabilities:
F-24
Balance at December 31, 2021
Payments and other adjustments
Charged to expense
Balance at December 31, 2022
Payments and other adjustments
Charged to expense
Balance at December 31, 2023
Consolidated
2,990
(4,471)
3,688
2,207
(7,215)
20,094
15,086
$
$
$
NOTE 8 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ("AOCI")
The following tables set forth the total changes in accumulated other comprehensive income (loss) ("AOCI") by
component, net of taxes:
Unrealized gain
(loss) on derivatives
designated and
qualifying as cash
flow hedges
Currency
Defined benefit
translation
pension plan
activity
adjustment
(13,231) $ (252,442) $ (257,579)
Total
8,094 $
7,866
(2,051)
5,815
13,909 $
13,911
(13,307)
(2,461)
(4,512)
11,450
(17,819)
(1,781) $ (287,526) $ (275,398)
(35,084)
—
(35,084)
7,049
(4,422)
2,627
16,536 $
(5,135)
4,920
(215)
45,053
43,139
—
498
45,551
43,139
(1,996) $ (244,387) $ (229,847)
Balance at December 31, 2021
Other comprehensive income (loss) before
reclassification
Amounts reclassified from AOCI
Net current-period other comprehensive income (loss)
Balance at December 31, 2022
Other comprehensive income (loss) before
reclassification
Amounts reclassified from AOCI
Net current-period other comprehensive income (loss)
Balance at December 31, 2023
$
$
$
NOTE 9 – DEBT
At December 31, 2023 and 2022, debt consisted of the following:
Long-term debt
Senior Unsecured Notes due through 2045, interest at 2.8% to 4.0% (net of debt issuance
costs of $1,270 and $1,585 at December 31, 2023 and 2022, respectively)
Term Loan due through 2025, interest at SOFR plus a 0.85% margin, swapped $150,000
to a fixed interest rate of 3.55% plus a 0.85% margin
Other borrowings due through 2030, interest up to 7.97%
Less current portion
Long-term debt, less current portion
Short-term debt
Amounts due banks, weighted average interest at 47.7% in 2023 and 4.0% in 2022
Current portion long-term debt
Total short-term debt
Total debt
December 31,
2023
2022
$
702,766
$
703,124
400,000
400,000
9
1,102,775
4
1,102,771
2,435
4
2,439
1,105,210
$
18,311
1,121,435
11,039
1,110,396
82,444
11,039
93,483
1,203,879
$
F-25
At December 31, 2023 and 2022, the fair value of long-term debt, including the current portion, was approximately
$1,013,795 and $1,009,020, respectively, which was determined using available market information and methodologies
requiring judgment. The carrying value of this debt at such dates was $1,102,771 and $1,121,435, respectively. Since
judgment is required in interpreting market information, the fair value of the debt is not necessarily the amount which
could be realized in a current market exchange.
Senior Unsecured Notes
On April 1, 2015 and October 20, 2016, the Company entered into separate Note Purchase Agreements pursuant to
which it issued senior unsecured notes (the "Notes") through a private placement. Interest on the Notes is paid semi-
annually. The proceeds of the Notes were used for general corporate purposes. The Notes contain certain affirmative and
negative covenants. As of December 31, 2023, the Company was in compliance with all of its debt covenants relating to
the Notes.
The maturity and interest rates of the 2015 Notes and 2016 Notes are as follows:
2015 Notes
Series A
Series B
Series C
Series D
2016 Notes
Series A
Series B
Series C
Series D
Amount
Maturity Date
Interest Rate
$ 100,000 August 20, 2025
100,000 August 20, 2030
April 1, 2035
April 1, 2045
50,000
100,000
$ 100,000 October 20, 2028
100,000 October 20, 2033
100,000 October 20, 2037
50,000 October 20, 2041
3.15 %
3.35 %
3.61 %
4.02 %
2.75 %
3.03 %
3.27 %
3.52 %
The Company’s total weighted average effective interest rate and remaining weighted average term, inclusive of the
2015 Notes and 2016 Notes, is 3.3% and 10.4 years, respectively.
Term Loan
On November 29, 2022, the Company entered into a term loan in the aggregate principal amount of $400,000 (the “Term
Loan”), which was borrowed in full. The Term Loan matures on November 29, 2025. The Term Loan bears an interest at
a rate based on SOFR, plus a margin ranging from 0.75% to 1.75% based on the Company’s consolidated net leverage
ratio. The proceeds of the Term Loan were used to pay a portion of the purchase price in connection with the acquisition
of Fori.
The agreement governing the Term Loan (the “Term Loan Credit Agreement”) contains representations and warranties,
as well as customary affirmative, negative and financial covenants for credit facilities of this type, including limitations
on the Company and its subsidiaries with respect to liens, investments, distributions, mergers and acquisitions,
dispositions of assets and transactions with affiliates. The Term Loan Credit Agreement requires the Company to
maintain a minimum consolidated fixed charges coverage ratio and maximum consolidated net leverage ratio. As of
December 31, 2023, the Company was in compliance with all of its covenants.
Revolving Credit Agreement
On April 23, 2021, the Company amended and restated the agreement governing its line of credit by entering into the
Second Amended and Restated Credit Agreement (“Credit Agreement”). The Credit Agreement has a line of credit
totaling $500,000, has a term of 5 years with a maturity date of April 23, 2026 and may be increased, subject to certain
conditions including the consent of its lenders, by an additional amount up to $150,000. On March 8, 2023, the Credit
Agreement was amended to replace the LIBOR rate to a term secured overnight finance rate (“SOFR”); as such, the
F-26
interest rate on borrowings is based on SOFR plus a spread of 0.85% to 1.85% based on (1) the Company’s net leverage
ratio and (2) a credit spread adjustment. The Credit Agreement contains customary representations and warranties, as
well as customary affirmative, negative and financial covenants for credit facilities of this type (subject to negotiated
baskets and exceptions), including limitations on the Company and its subsidiaries with respect to liens, investments,
distributions, mergers and acquisitions, dispositions of assets and transactions with affiliates. As of December 31, 2023,
the Company was in compliance with all of its covenants and had no outstanding borrowings under the Credit
Agreement.
The Company has other lines of credit and debt agreements totaling $89,145. As of December 31, 2023 the Company
was in compliance with all of its covenants and had $2,435 outstanding at December 31, 2023.
Other
Maturities of long-term debt, including payments for amounts due banks, for the five years succeeding December 31,
2023 are $2,439 in 2024, $500,005 in 2025, $0 in 2026, $0 in 2027, $100,000 in 2028 and $500,000 thereafter. Total
interest paid was $29,340 in 2023, $23,547 in 2022 and $23,752 in 2021. The difference between interest paid and
interest expense is due to the accrual of interest associated with the Senior Unsecured Notes and interest rate derivative
contracts discussed in Note 14.
NOTE 10 – STOCK PLANS
On April 19, 2023, the shareholders of the Company approved the 2023 Equity and Incentive Compensation Plan ("2023
Employee Plan"), which replaced the 2015 Equity and Incentive Compensation Plan (“2015 Employee Plan”). The 2023
Employee Plan provides for the granting of options, appreciation rights, restricted shares, restricted stock units and
performance-based awards up to an additional 2,025,000 of the Company’s common shares. In addition, on April 19,
2023, the shareholders of the Company approved the 2023 Stock Plan for Non-Employee Directors ("2023 Director
Plan"), which replaced the 2015 Stock Plan for Non-Employee Directors (“2015 Director Plan”). The 2023 Director Plan
provides for the granting of options, restricted shares and restricted stock units up to an additional 200,000 of the
Company’s common shares. At December 31, 2023, there were 2,192,720 common shares available for future grant
under all plans.
Stock Options
The following table summarizes stock option activity for the year ended December 31, 2023 under all Plans:
Balance at beginning of year
Options granted
Options exercised
Options canceled
Options forfeited
Balance at end of year
Exercisable at end of year
Number of
Options
1,117,359
102,292
(299,682)
(350)
—
919,619
671,164
$
Weighted
Average
Exercise
Price
93.31
178.15
118.17
63.08
—
108.85
95.20
Options granted under both the 2015 and 2023 Employee Plans and its predecessor plans may be outstanding for a
maximum of 10 years from the date of grant. The majority of options granted vest ratably over a period of 3 years from
the grant date. The exercise prices of all options were equal to the quoted market price of the Company’s common shares
at the date of grant. The Company issued shares of common stock from treasury upon all exercises of stock options in
2023. In 2023, all options issued were under the 2015 and 2023 Employee Plans.
F-27
The Company uses the Black-Scholes option pricing model for estimating fair values of options. In estimating the fair
value of options granted, the expected option life is based on the Company’s historical experience. The expected
volatility is based on historical volatility. The weighted average assumptions for each of the three years ended
December 31 were as follows:
Expected volatility
Dividend yield
Risk-free interest rate
Expected option life (years)
Weighted average fair value per option granted during the year
2023
2022
2021
27.63 %
1.59 %
4.04 %
4.8
46.94
$
27.14 %
1.84 %
1.94 %
4.7
27.42
$
28.01 %
2.17 %
0.55 %
4.7
21.70
$
The following table summarizes non-vested stock options for the year ended December 31, 2023:
Balance at beginning of year
Granted
Vested
Canceled
Forfeited
Balance at end of year
Number of
Options
317,006
102,292
(170,493)
(350)
—
248,455
Weighted Average
Fair Value at
Grant Date
$
13.93
46.94
21.61
18.34
—
28.36
The aggregate intrinsic value of options outstanding and exercisable which would have been received by the optionees
had all awards been exercised at December 31, 2023 was $99,884 and $82,057, respectively. The total intrinsic value of
awards exercised during 2023, 2022 and 2021 was $35,414, $7,082 and $20,442, respectively. The total fair value of
options that vested during 2023, 2022 and 2021 was $3,684, $3,086 and $2,983, respectively.
The following table summarizes information about awards outstanding as of December 31, 2023:
Outstanding
Weighted Weighted
Weighted Weighted
Number of Average Average Number of Average Average
Stock
Exercise Remaining
Stock
Exercise Remaining
Exercisable
Exercise Price Range
Under $49.99
$50.00 - $59.99
Over $60.00
Life
(years)
—
2.11
5.60
5.50
Options
Price
Life
(years)
Options
Price
— $
—
58.17
—
2.11
— $
—
58.17
18,371
109.88
6.35 652,793
6.27 671,164
96.24
18,371
901,248
919,619
F-28
Restricted Stock Units ("RSUs") and Performance Share Units ("PSUs")
The following table summarizes RSU and PSU activity for the year ended December 31, 2023 under all Plans:
Balance at beginning of year
Units granted
Units vested
Units forfeited
Balance at end of year
$
Number of
Units
391,072
130,831
(177,048)
(5,414)
339,441
Weighted
Average
Grant Date
Fair Value
111.90
180.04
95.90
139.14
140.50
RSUs are valued at the quoted market price on the grant date. The majority of RSUs vest over a period of 3 years. The
Company issues shares of common stock from treasury upon the vesting of RSUs and any earned dividend equivalents.
Conversion of 28,564 RSUs and PSUs to common shares in 2023 were deferred as part of the 2005 Deferred
Compensation Plan for Executives (the "2005 Plan"). As of December 31, 2023, 87,604 RSUs and PSUs, including
related dividend equivalents, have been deferred under the 2005 Plan. These units are reflected within dilutive shares in
the calculation of earnings per share. In 2023, 85,188 RSUs were issued under the 2015 and 2023 Employee Plan and the
2015 and 2023 Director Plan. The remaining weighted average vesting period of all non-vested RSUs is 1.5 years as of
December 31, 2023.
PSUs are valued at the quoted market price on the grant date. PSUs vest over a period of 3 years and are based on the
Company’s performance relative to pre-established performance goals. The Company issues common stock from
treasury upon the vesting of PSUs and any earned dividend equivalents. In 2023, the Company issued 45,643 PSU’s and
has 82,089 PSUs outstanding under the 2015 Employee Plan at a weighted average fair value of $136.41 per share. The
remaining weighted average vesting period of all non-vested PSUs is 1.8 years as of December 31, 2023.
Stock-Based Compensation Expense
Expense is recognized for all awards of stock-based compensation by allocating the aggregate grant date fair value over
the vesting period. No expense is recognized for any stock options, restricted or deferred shares, RSUs or PSUs
ultimately forfeited because recipients fail to meet vesting requirements. Total stock-based compensation expense
recognized in the Consolidated Statements of Income for 2023, 2022 and 2021 was $26,223 $25,276 and $23,787,
respectively. The related tax benefit for 2023, 2022 and 2021 was $6,711, $6,363 and $5,988, respectively. As of
December 31, 2023, total unrecognized stock-based compensation expense related to non-vested stock options, RSUs
and PSUs was $17,254, which is expected to be recognized over a weighted average period of approximately 1.0 years.
Lincoln Stock Purchase Plan
The 1995 Lincoln Stock Purchase Plan provides employees the ability to purchase open market shares on a commission-
free basis up to a limit of ten thousand dollars annually. Under this plan, 800,000 shares have been authorized to be
purchased. There were no shares purchased in 2023 or 2022, and 9,070 shares purchased in 2021.
NOTE 11 – RETIREMENT ANNUITY AND GUARANTEED CONTINUOUS EMPLOYMENT PLANS
The Company maintains a number of defined benefit and defined contribution plans to provide retirement benefits for
employees. These plans are maintained and contributions are made in accordance with the Employee Retirement Income
Security Act of 1974 ("ERISA"), local statutory law or as determined by the Board of Directors. The plans generally
provide benefits based upon years of service and compensation. Pension plans are funded except for a domestic non-
F-29
qualified pension plan for certain key employees and certain foreign plans. The Company uses a December 31
measurement date for its plans.
The Company does not have, and does not provide for, any postretirement or postemployment benefits other than
pensions and certain non-U.S. statutory termination benefits.
Defined Benefit Plans
Contributions are made in amounts sufficient to fund current service costs on a current basis and to fund past service
costs, if any, over various amortization periods.
Obligations and Funded Status
December 31,
2023
2022
U.S. pension
plans
Non-U.S.
pension plans
U.S. pension
Non-U.S.
Change in benefit obligations
Benefit obligations at beginning of year
Service cost
Interest cost
Plan participants' contributions
Acquisitions & other adjustments
Actuarial (gain) loss (1)
Benefits paid
Settlements/curtailments
Currency translation
Benefit obligations at end of year
Change in plan assets
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Plan participants' contributions
Acquisitions & other adjustments
Benefits paid
Settlements
Currency translation
Fair value of plan assets at end of year
Funded status at end of year
Unrecognized actuarial net loss
Unrecognized prior service cost
Unrecognized transition assets, net
Net amount recognized
$
9,374 $ 118,489 $
166
466
—
(821)
990
—
(1,805)
—
8,370
955
4,867
48
84
5,633
(7,265)
(1,700)
4,919
126,030
—
—
—
—
—
—
—
—
—
86,543
4,087
2,080
48
—
(5,120)
(599)
4,183
91,222
(8,370)
2,387
—
—
(34,808)
3,070
(56)
24
$
(5,983) $ (31,770) $
plans
pension plans
10,930 $ 164,005
1,077
2,644
54
(341)
(30,229)
(7,066)
(398)
(11,257)
118,489
199
262
—
2,689
(4,706)
—
—
—
9,374
68,458
59
—
—
(68,517)
—
—
—
—
114,557
(16,319)
1,634
54
(195)
(4,757)
—
(8,431)
86,543
(9,374)
1,734
—
—
(31,946)
2,073
(73)
25
(7,640) $ (29,921)
(1) Actuarial gains in 2022 were primarily the result of an increase in the Company’s pension plan discount rates.
The after-tax amounts of unrecognized actuarial net loss, prior service costs and transition assets included in
Accumulated other comprehensive loss at December 31, 2023 were $1,974, $(39) and $17, respectively. The actuarial
loss represents changes in the estimated obligation not yet recognized in the Consolidated Income Statement.
F-30
In March 2020, the Company approved an amendment to terminate the Lincoln Electric Company Retirement Annuity
Program (“RAP”) plan effective as of December 31, 2020. The Company provided notice to participants of the intent to
terminate the plan and applied and received a determination letter. During 2021, pension obligations were distributed
through a combination of lump sum payments to eligible plan participants and through the purchase of a group annuity
contract in October 2021. The lump sum payments and annuity purchase resulted in pre-tax settlement charges of
$126,056 in the twelve months ended December 31, 2021. The remaining surplus assets of $68,458 at December 31,
2021 were transferred to a suspense account in January 2022 and are being used to fund employer matching
contributions in the Company’s Savings Plan. The surplus assets as of December 31, 2023 were $41,849 and are
recorded in Other current assets and Other assets in the Company’s Consolidated Balance Sheets.
Amounts Recognized in Consolidated Balance Sheets
December 31,
2023
2022
Prepaid pensions (1)
Accrued pension liability, current (2)
Accrued pension liability, long-term (3)
Accumulated other comprehensive loss, excluding tax effects
Net amount recognized in the balance sheets
$
$
— $
2,891 $
(95)
(37,605)
3,039
(732)
(7,638)
2,387
(5,983) $ (31,770) $
plans
— $
pension plans
1,603
(523)
(2,403)
(33,026)
(6,971)
1,734
2,025
(7,640) $ (29,921)
U.S. pension
plans
Non-U.S.
Pension plans
U.S. pension
Non-U.S.
(1) Included in Other assets.
(2) Included in Other current liabilities.
(3) Included in Other liabilities.
Components of Pension Cost for Defined Benefit Plans
2023
Year Ended December 31,
2022
2021
U.S. pension Non-U.S.
U.S. pension Non-U.S.
U.S. pension Non-U.S.
plans
pension plans
plans
Service cost
Interest cost
Expected return on plan assets
Other adjustments
Amortization of prior service cost
Amortization of net loss
Settlement and curtailment charges (gains) (1)
Defined benefit plans
$
$
166 $
466
—
—
—
80
256
968 $
plans
199 $
955 $
262
4,867
—
(3,839)
—
117
—
(8)
(374)
132
949 (3,735)
2,667 $ (3,142) $
pension plans
194 $
1,077 $
2,644
8,926
(3,525) (13,050)
—
—
—
—
299
1,966
367 126,055
862 $ 124,091 $
pension plans
1,413
2,567
(3,990)
—
8
882
(42)
838
(1) Pension settlement net charges resulting from lump sum pension payments and the purchase of a group annuity
contract in 2021.
The components of Pension cost for defined benefit plans, other than service cost, are included in Other income
(expense) in the Company’s Consolidated Statements of Income.
F-31
Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
December 31,
2023
2022
Projected benefit obligation
Accumulated benefit obligation
Fair value of plan assets
$
U.S. pension
U.S. pension
Non-U.S.
Non-U.S.
pension plans
plans
8,326 $
8,002
—
88,290 $
86,317
50,758
plans
9,331 $
8,937
—
pension plans
82,378
80,444
48,974
The total accumulated benefit obligation for all plans was $131,550 as of December 31, 2023 and $125,031 as of
December 31, 2022.
Benefit Payments for Plans
Benefits expected to be paid for the plans are as follows:
Estimated Payments
2024
2025
2026
2027
2028
2029 through 2033
Assumptions
U.S. pension
Plans
Non-U.S.
pension plans
$
$
754
1,077
1,099
1,114
1,053
5,426
39,045
7,421
6,576
5,888
6,446
30,724
Weighted average assumptions used to measure the benefit obligation for the Company’s significant defined benefit
plans as of December 31, 2023 and 2022 were as follows:
Discount Rate
Rate of increase in compensation
December 31,
2023
2022
U.S. pension Non-U.S.
pension
plans
plans
U.S. pension Non-U.S.
pension
plans
plans
6.0 %
3.0 %
3.9 %
4.8 %
5.8 %
3.0 %
4.2 %
3.7 %
Weighted average assumptions used to measure the net periodic benefit cost for the Company’s significant defined
benefit plans for each of the three years ended December 31 were as follows:
2023
December 31,
2022
2021
U.S. pension Non-U.S.
pension
plans
plans
U.S. pension Non-U.S.
pension
plans
plans
U.S. pension Non-U.S.
pension
plans
plans
Discount rate
Rate of increase in compensation
Expected return on plan assets
5.8 %
3.0 %
—
4.2 %
3.7 %
4.4 %
2.5 %
3.0 %
— %
1.8 %
3.1 %
3.4 %
2.2 %
2.5 %
3.0 %
1.3 %
2.7 %
3.3 %
To develop the discount rate assumptions, the Company refers to the yield derived from matching projected pension
payments with maturities of bonds rated AA or an equivalent quality. The expected long-term rate of return assumption
is based on the weighted average expected return of the various asset classes in the plans’ portfolio and the targeted
allocation of plan assets. The asset class return is developed using historical asset return performance as well as current
F-32
market conditions such as inflation, interest rates and equity market performance. The rate of compensation increase is
determined by the Company based upon annual reviews.
Pension Plans’ Assets
The primary objective of the pension plans’ investment policy is to ensure sufficient assets are available to provide
benefit obligations when such obligations mature. Investment management practices must comply with ERISA or any
other applicable regulations and rulings. The overall investment strategy for the defined benefit pension plans’ assets is
to achieve a rate of return over a normal business cycle relative to an acceptable level of risk that is consistent with the
long-term objectives of the portfolio. Excluding the RAP plan assets, the target allocation for plan assets is 5% to 10%
equity securities and 90% to 95% debt and other securities.
The following table sets forth, by level within the fair value hierarchy, the pension plans’ assets as of December 31,
2023:
Pension Plans' Assets at Fair Value as of December 31, 2023
Quoted Prices in
Active Markets
for Identical
Assets
Significant Other
Observable Inputs
Significant
Unobservable
Inputs
Cash and cash equivalents
Fixed income securities (1)
Corporate debt and other obligations
Investments measured at NAV (2)
Common trusts and 103-12 investments (3)
Total investments at fair value
(Level 1)
(Level 2)
(Level 3)
$
22,347 $
— $
— $
Total
22,347
—
5,894
—
5,894
—
22,347 $
$
—
5,894 $
—
— $
62,981
91,222
The following table sets forth, by level within the fair value hierarchy, the pension plans’ assets as of December 31,
2022:
Pension Plans' Assets at Fair Value as of December 31, 2022
Cash and cash equivalents
Fixed income securities (1)
Corporate debt and other obligations
Investments measured at NAV (2)
Common trusts and 103-12 investments (3)
Total investments at fair value
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
$
16,694 $
— $
— $
Total
16,694
—
4,912
—
4,912
—
16,694 $
$
—
4,912 $
—
— $
64,937
86,543
(1) Fixed income securities are primarily comprised of governmental and corporate bonds directly held by the plans.
Governmental and corporate bonds are valued using both market observable inputs for similar assets that are traded
on an active market and the closing price on the active market on which the individual securities are traded.
(2) Certain assets that are measured at fair value using the net asset value ("NAV") practical expedient have not been
classified in the fair value hierarchy.
(3) Common trusts and 103-12 investments (collectively "Trusts") are comprised of a number of investment funds that
invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, equity and
credit indexes and money markets. Trusts are valued at the NAV as determined by their custodian. NAV represents
F-33
the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided
by the total shares outstanding at the reporting dates.
Supplemental Executive Retirement Plan
The Company maintained a domestic unfunded Supplemental Executive Retirement Plan ("SERP") under which non-
qualified supplemental pension benefits are paid to certain employees in addition to amounts received under the
Company’s terminated qualified retirement plan which was subject to IRS limitations on covered compensation. The
annual cost of this program has been included in the determination of total net pension costs shown above and was $650,
$253 and $213 in 2023, 2022 and 2021, respectively. The projected benefit obligation associated with this plan is also
included in the pension disclosure shown above and was $5,461, $7,339 and $7,947 at December 31, 2023, 2022 and
2021, respectively.
Defined Contribution Plans
Substantially all U.S. employees are covered under defined contribution plans. In October 2016, the Company
announced a plan redesign of The Lincoln Electric Company Employee Savings Plan (“Savings Plan”) that was effective
January 1, 2017. The Savings Plan provides that eligible employees receive up to 6% of employees’ annual
compensation through Company matching contributions of 100% of the first 3% of employee compensation contributed
to the plan, and automatic Company contributions equal to 3% of annual compensation. In addition, certain employees
affected by the RAP freeze in 2016 are also eligible to receive employer contributions equal to 6% of annual
compensation for a minimum period of five years or to the end of the year in which they complete thirty years of service.
Effective January 1, 2017, the Company created The Lincoln Electric Company Restoration Plan (“Restoration Plan”).
The Restoration Plan is a domestic unfunded plan maintained for the purpose of providing certain employees the ability
to fully participate in standard employee retirement offerings, which are limited by IRS regulations on covered
compensation.
The annual costs recognized for defined contribution plans were $29,443, $29,569 and $26,282 in 2023, 2022 and 2021,
respectively.
Other Benefits
The Cleveland, Ohio, area operations have a Guaranteed Continuous Employment Plan covering substantially all local
employees which, in general, provides that the Company will provide work for at least 75% of every standard work
week (presently 40 hours). This plan does not guarantee employment when the Company’s ability to continue normal
operations is seriously restricted by events beyond the control of the Company. The Company has reserved the right to
terminate this plan effective at the end of a calendar year by giving notice of such termination not less than six months
prior to the end of such year.
NOTE 12 — OTHER INCOME (EXPENSE)
The components of Other income (expense) were as follows:
Equity earnings in affiliates
Other components of net periodic pension (cost) income (1)
Other income (2)
Total Other income (expense)
Year Ended December 31,
2022
2021
2023
$
$
556 $
(2,573)
15,405
13,388 $
(153) $
499
3,556
(123,920)
8,964
6,588
9,991 $ (114,457)
(1) Other components of net periodic pension (cost) income includes pension settlements and curtailments as discussed
in Note 11.
F-34
(2) In 2023, Other income primarily relates to non-recurring items such as royalty and other non-operating gains.
NOTE 13 – INCOME TAXES
The components of income before income taxes were as follows:
U.S.
Non-U.S.
Total
The components of income tax expense (benefit) were as follows:
Current:
Federal
Non-U.S.
State and local
Deferred:
Federal
Non-U.S.
State and local
Total
2023
508,316 $
178,550
686,866 $
Year Ended December 31,
2022
359,760 $
233,067
592,827 $
2021
143,290
181,708
324,998
$
$
Year Ended December 31,
2022
2021
2023
$
95,514 $
45,830
24,132
165,476
88,974 $
55,664
24,423
169,061
23,415
44,828
10,298
78,541
(13,068)
(7,515)
(3,275)
(23,858)
141,618 $
(38,462)
(3,281)
(6,715)
(48,458)
120,603 $
(21,538)
(4,488)
(4,097)
(30,123)
48,418
$
The differences between total income tax expense and the amount computed by applying the statutory federal income tax
rate to income before income taxes for the three years ended December 31, 2023 were as follows:
Statutory rate applied to pre-tax income
State and local income taxes, net of federal tax benefit
Excess tax benefits resulting from exercises of stock-based
compensation
Foreign Derived Intangible Income Deduction
Foreign rate variance
Valuation allowances
Research and development credit
Pension plan termination adjustment
U.S. tax cost of foreign source income
Other
Total
Effective tax rate
The effective tax rate remained consistent in 2023 and 2022.
$
$
2023
144,242
17,979
Year Ended December 31,
2022
124,492
12,904
$
$
(10,742)
(10,411)
6,854
(4,135)
(9,600)
—
1,013
6,418
141,618
$
20.6 %
(2,500)
(13,356)
5,020
(4,547)
(6,800)
—
783
4,607
120,603
$
20.3 %
2021
68,250
4,005
(4,681)
(2,197)
2,131
(4,209)
(5,300)
(14,711)
3,488
1,642
48,418
14.9 %
Total income tax payments, net of refunds, were $180,512 in 2023, $151,818 in 2022 and $87,288 in 2021.
F-35
Deferred Taxes
Significant components of deferred tax assets and liabilities at December 31, 2023 and 2022, were as follows:
Deferred tax assets:
Tax loss and credit carry-forwards
Inventory
Other accruals
Research and development capitalization
Employee benefits
Pension obligations
Other
Deferred tax assets, gross
Valuation allowance
Deferred tax assets, net
Deferred tax liabilities:
Property, plant and equipment
Intangible assets
Inventory
Pension and other benefit liabilities
Other
Deferred tax liabilities
Total deferred taxes
December 31,
2023
2022
45,319
2,941
17,984
64,836
28,639
7,375
5,640
172,734
(36,876)
135,858
43,339
26,624
4,918
10,545
18,402
103,828
32,030
$
$
44,674
937
29,601
26,982
26,674
6,218
7,344
142,430
(44,627)
97,803
40,198
23,790
3,846
13,787
10,393
92,014
5,789
$
$
At December 31, 2023, certain subsidiaries had net operating loss carry-forwards of approximately $3,234 that expire in
various years from 2024 through 2036, plus $166,063 for which there is no expiration date.
In assessing the realizability of deferred tax assets, the Company assesses whether it is more-likely-than-not that a
portion or all of the deferred tax assets will not be realized. The Company considers the scheduled reversal of deferred
tax liabilities, tax planning strategies and projected future taxable income in making this assessment. At December 31,
2023, a valuation allowance of $36,876 was recorded against certain deferred tax assets based on this assessment. The
Company believes it is more-likely-than-not that the tax benefit of the remaining net deferred tax assets will be realized.
The amount of net deferred tax assets considered realizable could be increased or reduced in the future if the Company’s
assessment of future taxable income or tax planning strategies changes.
The Company determined it will repatriate earnings for certain non-U.S. subsidiaries, which are subject to foreign
withholding taxes. The Company has estimated the associated tax to be $76. The Company considers remaining earnings
and outside basis in all other non-U.S. subsidiaries to be indefinitely reinvested and has not recorded any deferred taxes
as such estimate is not practicable.
Unrecognized Tax Benefits
Liabilities for unrecognized tax benefits related to uncertain tax positions are classified as Other liabilities unless
expected to be paid in one year. Additionally, to the extent a position would not result in a cash tax liability, those
amounts are generally recorded to Deferred income taxes to offset tax attributes. The Company recognizes interest and
penalties related to unrecognized tax benefits in Income taxes. Current income tax expense included expense of $101 for
the year ended December 31, 2023 and benefits of $486 for the year ended December 31, 2022 for interest and penalties.
For those same years, the Company’s accrual for interest and penalties related to unrecognized tax benefits totaled
$2,364 and $2,292, respectively.
F-36
The following table summarizes the activity related to unrecognized tax benefits:
Balance at beginning of year
Increase related to current year tax provisions
(Decrease)/increase related to prior years' tax positions
Decrease related to settlements with taxing authorities
Resolution of and other decreases in prior years' tax liabilities
Other
Balance at end of year
2023
2022
$
$
17,423 $
1,983
(1,642)
(4,036)
(1,380)
244
12,592
$
18,211
2,263
91
(868)
(1,379)
(895)
17,423
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $10,036 at
December 31, 2023 and $14,504 at December 31, 2022.
The Company files income tax returns in the U.S. and various state, local and foreign jurisdictions. With few exceptions,
the Company is no longer subject to U.S. federal, state and local or non-U.S. income tax examinations by tax authorities
for years before 2019. The Company is currently subject to various state audits and non-U.S. income tax audits. The
Company is generally not able to precisely estimate the ultimate settlement amounts or timing until after the close of an
audit. The Company evaluates its tax positions and establishes liabilities for unrecognized tax benefits related to
uncertain tax positions that may be challenged by local authorities and may not be fully sustained.
Unrecognized tax benefits are reviewed on an ongoing basis and are adjusted for changing facts and circumstances,
including management’s judgment in the interpretation of applicable tax law, regulation or tax ruling, the progress of tax
audits and closing of statutes of limitations. Based on information currently available, management believes that
additional audit activity could be completed and/or statutes of limitations may close relating to existing unrecognized tax
benefits. It is reasonably possible there could be a further reduction of $1,646 in prior years’ unrecognized tax benefits in
2024.
NOTE 14 – DERIVATIVES
The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity
prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that
qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was
immaterial for each of the three years in the period ended December 31, 2023.
The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a
number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty
was considered significant at December 31, 2023. The Company does not expect any counterparties to fail to meet their
obligations.
Cash flow hedges
Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The dollar equivalent gross
notional amount of these short-term contracts was $84,148 at December 31, 2023 and $66,296 at December 31, 2022.
The Company has interest rate forward starting swap agreements that are qualified and designated as cash flow hedges.
The dollar equivalent gross notional amount of the long-term contracts was $100,000 at December 31, 2023 and 2022
and have a termination date of August 2025.
The Company has commodity contracts that are qualified and designated as cash flow hedges. The notional amount of
these contracts was 200,000 pounds at December 31, 2023 and 875,000 pounds at December 31, 2022.
F-37
In March 2023, the Company entered into interest rate swap agreements, which were qualified and designated as cash
flow hedges, with an aggregate notional amount of $150,000. The interest rate swaps will effectively convert the interest
rate on $150,000 of the Term Loan discussed in Note 9 from a variable rate based on one-month SOFR to a fixed rate.
Net investment hedges
The Company has foreign currency forward contracts that qualify and are designated as net investment hedges. The
dollar equivalent gross notional amount of these short-term contracts was $119,607 at December 31, 2023.
Derivatives not designated as hedging instruments
The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are
held as hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was
$492,600 at December 31, 2023 and $380,443 at December 31, 2022.
Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow:
Derivatives by hedge designation
Designated as hedging instruments:
December 31, 2023
December 31, 2022
Other
Current
Assets
Other
Current
Other
Liabilities Assets
Other
Other
Current
Liabilities Assets
Other
Current
Other
Liabilities Assets
Other
Liabilities
Foreign exchange contracts
Interest rate swap agreements
Forward starting swap agreements
Net investment contracts
Commodity contracts
Not designated as hedging
instruments:
$ 1,548 $ 687 $
— $
—
—
—
45
—
—
3,351
—
1,460
20,377
—
—
— $ 1,467 $ 738 $
—
—
—
—
—
—
2,229
33
—
—
—
181
— $
—
19,291
—
—
Foreign exchange contracts
Total derivatives
4,063
623
$ 5,656 $ 4,661 $ 21,837 $
—
2,348
—
— $ 3,996 $ 3,790 $ 19,291 $
790
—
—
—
—
—
—
—
—
The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of
the following:
Derivatives by hedge designation
Not designated as hedges:
Foreign exchange contracts
Classification of gain
Year Ended December 31,
2022
2023
Selling, general
& administrative expenses
$
15,990 $
4,805
The effects of designated cash flow hedges on AOCI and the Company’s Consolidated Statements of Income consisted
of the following:
Total gain recognized in AOCI, net of tax
Foreign exchange contracts
Interest rate swap agreements
Forward starting swap agreements
Net investment contracts
Commodity contracts
December 31, 2023
December 31, 2022
$
$
721
1,085
14,696
7,136
34
627
—
13,191
9,440
91
F-38
The Company expects a gain of $755 related to existing contracts to be reclassified from AOCI, net of tax, to earnings
over the next 12 months as the hedged transactions are realized.
Derivative type
Foreign exchange contracts
Commodity contracts
NOTE 15 – FAIR VALUE
Gain (loss) recognized in the
Consolidated Statements of Income:
Net Sales
Cost of goods sold
Cost of goods sold
Year Ended December 31,
$
2023
2022
5,210 $
590
193
962
1,906
(169)
The following table provides a summary of fair value assets and liabilities as of December 31, 2023 measured at fair
value on a recurring basis:
Description
Assets:
Foreign exchange contracts
Interest rate swap agreements
Commodity contracts
Forward starting swap agreements
Pension surplus
Total assets
Liabilities:
Foreign exchange contracts
Net investment contracts
Deferred compensation
Total liabilities
Quoted Prices in
Active Markets for
Identical Assets or Significant Other
Significant
Balance as of
December 31, 2023
Liabilities
(Level 1)
Observable Inputs Unobservable
Inputs (Level 3)
(Level 2)
$
$
$
$
5,611 $
1,460
45
20,377
41,849
69,342 $
1,310 $
3,351
53,628
58,289 $
— $
—
—
—
41,849
41,849 $
— $
—
—
— $
5,611 $
1,460
45
20,377
—
27,493 $
1,310 $
3,351
53,628
58,289 $
—
—
—
—
—
—
—
—
—
—
F-39
The following table provides a summary of fair value assets and liabilities as of December 31, 2022 measured at fair
value on a recurring basis:
Description
Assets:
Foreign exchange contracts
Commodity contracts
Forward starting swap agreements
Pension surplus
Total assets
Liabilities:
Foreign exchange contracts
Net investment contracts
Commodity contracts
Deferred compensation
Total liabilities
Quoted Prices in
Active Markets for
Identical Assets or Significant Other
Significant
Balance as of
December 31, 2022
Liabilities
(Level 1)
Observable Inputs Unobservable
Inputs (Level 3)
(Level 2)
$
$
$
$
3,815 $
181
19,291
56,418
79,705 $
1,528 $
2,229
33
39,090
42,880 $
— $
—
—
56,418
56,418 $
— $
—
—
—
— $
3,815 $
181
19,291
—
23,287 $
1,528 $
2,229
33
39,090
42,880 $
—
—
—
—
—
—
—
—
—
—
The fair value of the Company’s pension surplus assets are based on quoted market prices in active markets and are
included in the Level 1 fair value hierarchy. The pension surplus assets are invested in money market and short-term
duration bond funds at December 31, 2023.
The Company’s derivative contracts are valued at fair value using the market approach. The Company measures the fair
value of foreign exchange contracts, interest rate swap agreements, forward starting swap agreements using Level 2
inputs based on observable spot and forward rates in active markets. During the year ended December 31, 2023, there
were no transfers between Levels 1, 2 or 3.
The deferred compensation liability is the Company’s obligation under its executive deferred compensation plan. The
Company measures the fair value of the liability using the market values of the participants’ underlying investment fund
elections.
The fair value of Cash and cash equivalents, Marketable securities, Accounts receivable, Short-term debt excluding the
current portion of long-term debt and Trade accounts payable approximated book value due to the short-term nature of
these instruments at both December 31, 2023 and December 31, 2022. Refer to Note 9 to the consolidated financial
statements for the fair value estimate of debt.
The Company has various financial instruments, including cash and cash equivalents, short and long-term debt and
forward contracts. While these financial instruments are subject to concentrations of credit risk, the Company has
minimized this risk by entering into arrangements with a number of major banks and financial institutions and investing
in several high-quality instruments. The Company does not expect any counterparties to fail to meet their obligations.
NOTE 16 – INVENTORY
Inventories in the Consolidated Balance Sheet is comprised of the following components:
Raw materials
Work-in-process
Finished goods
Total
F-40
December 31, 2023 December 31, 2022
181,076
$
164,778
319,597
665,451
160,809 $
125,756
276,299
562,864 $
$
The valuation of LIFO inventories is made at the end of each year based on inventory levels and costs at that time.
Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and
costs. Actual year-end inventory levels and costs may differ from interim LIFO inventory valuations. At December 31,
2023 and 2022, approximately 37% and 38% of total inventories, respectively, were valued using the LIFO method. The
excess of current cost over LIFO cost was $129,946 at December 31, 2023 and $133,909 at December 31, 2022, or a
benefit of $3,963 in 2023 as compared with charges of $19,733 in 2022.
NOTE 17 – LEASES
The table below summarizes the right-of-use assets and lease liabilities in the Company’s Consolidated Balance sheets:
Operating Leases
Right-of-use assets
Current liabilities
Noncurrent liabilities
Total lease liabilities
Balance Sheet Classification
Other assets
December 31, 2023
$
53,284 $
December 31, 2022
44,810
Other current liabilities $
Other liabilities
$
13,104 $
41,576
54,680 $
10,378
35,945
46,323
Total lease expense, which is included in Cost of goods sold and Selling, general and administrative expenses in the
Company’s Consolidated Statements of Income, was $24,408, $20,548 and $21,630 in the years ended December 31,
2023, 2022 and 2021, respectively. Cash paid for amounts included in the measurement of lease liabilities for the years
ended December 31, 2023 and 2022 was $13,450 and $12,036, respectively, are included in Net cash provided by
operating activities in the Company’s Consolidated Statements of Cash Flows. Right-of-use assets obtained in exchange
for operating lease liabilities during the years ended December 31, 2023 and 2022 were $9,249 and $9,332, respectively.
The total future minimum lease payments for noncancelable operating leases were as follows:
2024
2025
2026
2027
2028
After 2028
Total lease payments
Less: Imputed interest
Operating lease liabilities
$
December 31, 2023
14,574
11,786
9,022
6,574
4,626
14,647
61,229
6,549
54,680
$
$
As of December 31, 2023 and 2022, the weighted average remaining lease term was 7.0 years and 7.8 years,
respectively. As of December 31, 2023 and 2022, the weighted average discount rate used to determine the operating
lease liability was 3.50% and 2.96%, respectively.
NOTE 18 – CONTINGENCIES
The Company, like other manufacturers, is subject from time to time to a variety of civil and administrative proceedings
arising in the ordinary course of business. Such claims and litigation include, without limitation, product liability claims,
regulatory claims, employment-related claims and health, safety and environmental claims, some of which relate to cases
alleging asbestos induced illnesses. The claimants in the asbestos cases seek compensatory and punitive damages, in
most cases for unspecified amounts. The Company believes it has meritorious defenses to these claims and intends to
contest such suits vigorously.
F-41
The Company accrues its best estimate of the probable costs, after a review of the facts with management and counsel
and taking into account past experience. For claims or litigation that are material, if an unfavorable outcome is
determined to be reasonably possible and the amount of loss can be reasonably estimated, or if an unfavorable outcome
is determined to be probable and the amount of loss cannot be reasonably estimated, disclosure would be provided.
Many of the current cases are in differing procedural stages and information on the circumstances of each claimant,
which forms the basis for judgments as to the validity or ultimate disposition of such actions, varies greatly. Therefore,
in many situations a range of possible losses cannot be made. Reserves are adjusted as facts and circumstances change
and related management assessments of the underlying merits and the likelihood of outcomes change. Moreover,
reserves only cover identified and/or asserted claims. Future claims could, therefore, give rise to increases to such
reserves.
Based on the Company’s historical experience in litigating product liability claims, including a significant number of
dismissals, summary judgments and defense verdicts in many cases and immaterial settlement amounts, as well as the
Company’s current assessment of the underlying merits of the claims and applicable insurance, the Company believes
resolution of these claims and proceedings, individually or in the aggregate, will not have a material effect on the
Company’s consolidated financial statements.
NOTE 19 – SUPPLIER FINANCING PROGRAM
The Company’s suppliers, at the supplier’s sole discretion, are able to factor receivables due from the Company to a
financial institution on terms directly negotiated with the financial institution without affecting the Company’s balance
sheet classification of the corresponding payable. The Company pays the financial institution the stated amount of the
confirmed invoices from its designated suppliers on the original maturity dates of the invoices. Invoices with suppliers
have terms between 120 and 180 days. The Company does not provide secured legal assets or other forms of guarantees
under the arrangement and has no involvement in establishing the terms or conditions of the arrangement between its
suppliers and the financial institution. The amounts due to the financial institution for suppliers that participate in the
supplier financing program are included in Trade accounts payable on the Company’s Consolidated Balance Sheets, and
the associated payments are included in operating activities in the Consolidated Statements of Cash Flows. At December
31, 2023 and December 31, 2022, Trade accounts payable included $29,111 and $33,475, respectively, payable to
suppliers that have elected to participate in the supplier financing program.
F-42
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
LINCOLN ELECTRIC HOLDINGS, INC.
(In thousands)
Description
Allowance for doubtful accounts:
Year Ended December 31, 2023
Year Ended December 31, 2022
Year Ended December 31, 2021
Deferred tax asset valuation allowance:
Year Ended December 31, 2023
Year Ended December 31, 2022
Year Ended December 31, 2021
Additions
Balance at
Beginning
Of period
Charged to
Costs and
Expenses
(Credited)
Charged to
Other Accounts (1)
Deductions (2)
Balance at End
of Period
$
12,556
11,105
14,779
$
44,627
55,619
65,413
$
$
1,195
1,778
718
4,570
2,262
1,147
$
$
$
(94)
598
(2,491)
2,193
925
1,901
(606)
(5,197)
(3,873)
$ 11,715
8,057
7,068
$
$
11,464
12,556
11,105
36,876
44,627
55,619
(1) Currency translation adjustment, reductions from restructuring and other adjustments.
(2) For the Allowance for doubtful accounts, deductions relate to uncollectible accounts written-off, net of recoveries.
For the Deferred tax asset valuation allowance, deductions relate to the reversal of valuation allowances due to the
realization of net operating loss carryforwards.
F-43
Corporate Information
BOARD OF DIRECTORS
LEADERSHIP TEAM
CORPORATE INFORMATION
Brian D. Chambers
Chair, President and Chief Executive Officer
Owens Corning
Geoffrey P. Allman
Senior Vice President
Strategy and Business Development
Jennifer I. Ansberry
Executive Vice President
General Counsel and Secretary
Gabriel Bruno
Executive Vice President
Chief Financial Officer
Lisa A. Dietrich
Executive Vice President
Chief Information Officer
Gregory D. Doria
Senior Vice President
President, Harris Products Group
Asia Pacific Welding
J. Ashley Hall
Senior Vice President
Global Procurement
Steven B. Hedlund
President and Chief Executive Officer
Michele R. Kuhrt
Executive Vice President
Chief Human Resources Officer
Douglas S. Lance
Senior Vice President
President, North America Welding
Christopher L. Mapes
Executive Chair
Peter M. Pletcher
Senior Vice President
President, Americas Welding
Michael J. Whitehead
Senior Vice President
President, Global Automation,
Cutting & Additive Businesses
Curtis E. Espeland
Retired Executive Vice President
and Chief Financial Officer
Eastman Chemical Company
Bonnie J. Fetch
President
Distribution Business Segment
Cummins Inc.
Patrick P. Goris
Senior Vice President and
Chief Financial Officer
Carrier Global Corporation
Steven B. Hedlund
President and Chief Executive Officer
Lincoln Electric Holdings, Inc.
Michael F. Hilton
Retired President and Chief Executive Officer
Nordson Corporation
Marc A. Howze
Former Senior Advisor
Office of the Chairman
Deere & Company
Kathryn Jo Lincoln
Chair and Chief Investment Officer
Lincoln Institute of Land Policy
Christopher L. Mapes
Executive Chair
Lincoln Electric Holdings, Inc.
Phillip J. Mason
Retired President
Ecolab EMEA Sector of
Ecolab, Inc.
Ben P. Patel
Senior Vice President
Chief Science and Innovation Officer
WestRock Company
Hellene S. Runtagh
Retired President and Chief Executive Officer
Berwind Group
Kellye L. Walker
Executive Vice President and Chief Legal Officer
Eastman Chemical Company
For additional corporate information and copies
of Lincoln Electric’s 2023 Annual Report an 10-K,
and 2024 Proxy Statement, please contact Amanda
Butler in Investor Relations at (216) 383-2534;
email: Amanda_Butler@lincolnelectric.com;
22801 St. Clair Avenue, Cleveland, OH 44117-1199
USA; or visit www.lincolnelectric.com.
TRANSFER AGENT AND REGISTRAR
Inquires about dividends, shareholder records,
share transfers, changes in ownership and changes
should be directed to Computershare Inc.:
MAIL
Computershare
Attn: Shareholder Services
P.O. Box 43078
Providence, RI 02940-3078
COURIER
Computershare
Attn: Shareholder Services 150 Royall Street,
Ste. 101, Canton, MA 02021
DIRECT
Tel: (800) 736-3001 or (781) 575-3100
Email: webqueries@computershare.com
Online: www.computershare.com
SUSTAINABILITY
Visit https://sustainability.lincolnelectric.com to
learn about our policies and programs.
INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Ernst & Young LLP
ANNUAL MEETING
Friday, April 19, 2024
11:00 a.m. Eastern Time
Online at:
www.virtualshareholdermeeting.com/LECO2024
STOCK INFORMATION
The Company’s stock is listed on the NASDAQ
exchange under the ticker symbol LECO.
Number of record holders of common shares at
December 31, 2023: 2,214
Lincoln Electric Holdings, Inc.
22801 St. Clair Avenue
Cleveland, Ohio 44117-1199 USA
www.lincolnelectric.com