Sotera Health Co

​

on page 45. The stock ownership guidelines we adopted to further align the interests of our senior executive team, executive officers and directors with those of our stockholders are further described on page 50.

Third Compensation Principle: Paying Competitively to Attract and Retain Top Talent

Our compensation program is designed to attract, retain and motivate high-performing executives critical to the Company’s short- and long-term success. As described in more detail below, we seek to provide an overall level of total compensation for our executive officers that is reasonable in relation to, and competitive with, the compensation similarly situated peer leader companies in our industry pay, subject to variation for individual factors such as experience, performance, duties, scope of responsibility, prior contributions and future potential contributions to our business. With the assistance of our independent compensation consultant, the LDC Committee monitors market trends, including the prevalence of compensation delivery mechanisms, and adjusts the design and operation of our executive compensation program periodically as the LDC Committee deems appropriate, including to achieve our executive retention objectives. We believe our current compensation program, in particular our equity incentive program, provides high retentive value for the members of our leadership team who are critical to the Company’s success. From time to time we have also included special cash bonuses and equity awards in the total compensation of our executives to help further attract and retain talent, as further discussed herein and in previously filed Proxy Statements.

Compensation-Setting Process

The Role of the LDC Committee

The LDC Committee establishes our executive compensation philosophy and annually reviews and approves our executive compensation program. The LDC Committee reviews and approves each NEO’s base salary and target and earned annual cash incentive awards, and recommends to the full Board for approval the elements and target value of each NEO’s long-term equity incentive award. The Board (without the CEO’s participation) also reviews and approves each element of our CEO’s compensation.

The LDC Committee is authorized to retain independent advisors to assist the LDC Committee in carrying out its responsibilities and, in 2021 through 2025, the LDC Committee retained Exequity to review and provide input on our executive compensation program. At least annually, the LDC Committee reviews with Exequity the executive compensation program, including incentive compensation plans and arrangements, to: (i) help ensure the elements of our compensation program are based on appropriate measures, goals and targets for our industry and our business objectives; (ii) help ensure our program is achieving its intended purpose of incentivizing achievement of short-and long-term business goals, as well as attracting and retaining executive talent; and (iii) determine whether any changes to our compensation program are advisable.

The Role of our CEO and Management

The LDC Committee works with members of management, including our CEO and CHRO, to determine the compensation of our NEOs and certain other executives. Management further works with the LDC Committee annually to recommend the structure of our AIP, to develop AIP performance metrics,

​

Compensation-Setting Process​

including threshold, target and maximum performance levels, and to evaluate actual Company performance against selected measures.

Additionally, the CEO makes recommendations to the LDC Committee regarding the compensation of the other NEOs and certain other executives. At the beginning of each year, our CEO reviews our NEOs’ and certain other executives’ prior year’s performance and makes recommendations to the LDC Committee for each element of such executives’ compensation (other than his own), including any salary adjustments, adjustments to AIP target as a percentage of salary for the current year, actual AIP payout for the previous year and target grant date value of long-term equity awards. The CEO’s compensation recommendations are based on his performance evaluation of each executive, the Company’s performance in the preceding year and data provided by Exequity concerning compensation practices among the Company’s compensation peer group. The LDC Committee considers the CEO’s recommendations when making executive compensation decisions, but the LDC Committee (and the Board, with respect to equity awards and CEO compensation) retains full discretion to set all compensation for our NEOs. For further discussion of the annual performance management process, see “Compensation Elements for 2025 — Annual Incentive Plan (AIP).”

The Role of the Compensation Consultant

The LDC Committee engaged Exequity as its independent compensation consultant for 2025. Although Exequity periodically meets with the CEO and CHRO to gather information and provide advice about management proposals to the LDC Committee, Exequity reports directly to the LDC Committee and not to management. Pursuant to its charter, the LDC Committee makes all determinations regarding the terms of the Company’s engagement with Exequity, including the services Exequity provides to the Company and the fees paid for those services. The LDC Committee retains the prerogative to replace its compensation consultant or hire additional advisors at any time. At the invitation of the LDC Committee, representatives of Exequity attend meetings of the LDC Committee. The LDC Committee also communicates with Exequity outside of meetings as needed.

The LDC Committee has assessed the independence of Exequity, as required under Nasdaq listing rules. Additionally, the LDC Committee has considered and assessed all relevant factors, including but not limited to those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act, that could give rise to a potential conflict of interest with respect to Exequity. Based on this review, the LDC Committee is not aware of any conflict of interest that has been raised by the work performed by Exequity.

The nature and scope of services that Exequity provided in 2025 included the following:

●

Advice and assistance developing a relevant compensation peer group;

​

●

Advice and assistance regarding compensation best practices and market trends for executives and directors, including new hire executive compensation packages and retention incentive programs;

​

●

Analysis of appropriate levels and design of total overall compensation and each element of compensation for our NEOs and directors;

​

●

Consultation on the design of 2025 long-term incentives in response to input from stockholders and enhance the performance linkages to these awards;

​

●

Consultation on technical matters such as the taxation of executive pay arrangements and assistance with disclosure of executive pay arrangements;

​

​

Compensation-Setting Process

●

Annual assessment of potential risks associated with compensation programs; and

​

●

Advice and assistance developing various Company policies or programs.

​

Competitive Positioning

Consistent with our goal of providing competitive compensation to attract and retain executives, the LDC Committee reviews market data on executive compensation levels and practices drawn from a group of peer companies similar to the Company in industry focus, revenue and market capitalization. While the LDC Committee does not specifically target any particular percentile for any element of an NEO’s compensation, it does generally consider as a reference point the market median for each element of an NEO’s compensation and for total target pay.

The LDC Committee assessed our 2024 compensation peer group for 2025 compensation decisions, based on a review by Exequity, and the LDC Committee determined that no changes were necessary. The 2024 peer group consisted of companies that we identified as competing with the Company for executive talent and business as well as companies referenced in executive compensation benchmarking analyses conducted by those competitors. In identifying candidates for the peer group, in consultation with Exequity, the LDC Committee reviewed companies that generally operated within the following industry segments: Health Care Equipment, Life Sciences Tools and Services, Health Care Supplies, Biotechnology and Pharmaceuticals and Health Care Technology. When assessing potential peers with these characteristics, the LDC Committee further considered the relative sizes of those peer candidates in relation to the Company. The LDC Committee generally sought to include peer candidates with annual revenues of 0.5x – 4.0x the Company’s revenues and a total enterprise value of 0.2x – 4.0x the Company’s total enterprise value. The LDC Committee also reviewed peer candidates’ EBITDA relative to the Company’s as an indicator of each company’s scale and performance.

The compensation peer group used for 2025 compensation decisions consisted of the following companies:

2025 Compensation Decisions

The factors described in the table below materially informed the LDC Committee’s decisions in setting 2025 executive compensation as further described below. Specifically, in determining our non-CEO NEOs’ 2025 total target compensation and recommending to the Board the CEO’s total target compensation and NEOs’ long-term equity incentive compensation, the LDC Committee considered:

​