Otis Worldwide Corp
For the period ended May 15, 2025. Filed Apr 4, 2025.
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May 15, 2025 · Filed Apr 4, 2025
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
| ☑ | Filed by the Registrant | ☐ | Filed by a party other than the Registrant |
|---|
| CHECK THE APPROPRIATE BOX: | |
|---|---|
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☑ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
Otis Worldwide Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| PAYMENT OF FILING FEE (CHECK ALL BOXES THAT APPLY): | |
|---|---|
| ☑ | No fee required |
| ☐ | Fee paid previously with preliminary materials |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
We are Otis
We are the world’s leading company for elevator
and escalator manufacturing, installation and service.
You’ll find us in the world’s most iconic structures, as well as residential and commercial buildings,
transportation hubs and everywhere people are on the move.
Our Vision
We give people freedom to connect and thrive in a taller, faster, smarter world.
The Otis Absolutes
In realizing our vision, our colleagues are guided by our commitment to The Otis Absolutes:
Safety
We are in the safety business. The well-being of our
colleagues, our customers and the riding
public is paramount.
EVERYTHING DEPENDS ON MOVING
PEOPLE SAFELY.
Ethics
We strive to be a trusted company, and the employer
and supplier of choice. Doing business the ethical,
lawful and honest way is who we are, and our
reputation depends on it.
DOING BUSINESS THE RIGHT WAY – IT’S WHO
WE ARE.
Quality
We stand for delivering quality results in everything we
do – from engineering, manufacturing, installation and
service, to selling, marketing and financial reporting.
WE DELIVER QUALITY RESULTS IN
EVERYTHING WE DO.
Creating value in 2024
In 2024, our fifth year as an independent company, Otis Worldwide Corporation (“Otis”) continued to demonstrate the strength of our Service-driven business model. Through focused execution of our long-term strategy, we delivered another year of strong financial performance. Guided by The Otis Absolutes of Safety, Ethics and Quality, we remain committed to serving our customers and passengers, and enabling people to connect in a taller, faster, smarter world.
Our reach is global, our people are local
| We maintain approximately 2.4 million customer units worldwide | We serve customers in more than 200 countries and territories |
| We have 72,000 colleagues, including 44,000 field professionals | We have over 1,400 branches and offices and a direct physical presence in more than 70 countries |
Executing on our strategy
We remain focused on achieving long-term, sustainable growth through execution of our strategic pillars, while optimizing our business to adapt to a changing market environment. Our disciplined capital allocation policy further complements our strategy. These efforts enable us to better serve our customers and passengers, while delivering long-term shareholder value.
| STRATEGIC PILLARS | 2024 RESULTS |
| Accelerate Service portfolio growth | • Grew Service portfolio 4.2%, marking our third year of growth at 4% or greater • Ended 2024 with approximately 1 million units connected globally(1) and grew units with Otis ONE subscriptions by 70% • Increased use of digital tools and a specialized Service organization to improve productivity, customer satisfaction and portfolio growth • Sustained growth in our repair business across all regions, marking a three-year CAGR in the low teens |
| Deliver modernization value | • Grew modernization orders by 12% at constant currency(2) with all regions growing in both orders and sales, and modernization return on sales (ROS) surpassing New Equipment ROS • Increased modernization backlog by 13% at constant currency(2) • Deployed initiatives to accelerate orders through channel expansion, improved sales effectiveness and standardized packages |
| Sustain New Equipment growth | • Gained ~400 basis points of New Equipment share since 2019(3) • Accelerated orders of our Gen3 and Gen360 products, up five points from prior year • New Equipment backlog down 4% at constant currency,(2) up low single digits excluding China • Continued to drive common platform products, factory transformation and material productivity to better serve our New Equipment customers while reducing costs |
| Advance digitalization | • Expanded footprint of connected elevators with enhanced capabilities, including predictive insights for monitoring operational status, preventing shutdowns and eliminating unnecessary calls• Integrated artificial intelligence (AI) capabilities into existing product lines to deliver smarter, more efficient solutions, including deployment of AI-driven analytics tools and predictive maintenance features • Increased deployment of enterprise systems with a focus on sales, modernization capabilities, customer contact technologies and field and supply chain efficiencies• Deployed digital playbook for developing scalable and repeatable modernization process that supports customer needs and ensures safety |
| Focus and empower our workforce | • Drove implementation of the UpLift operating model with clear roles and interdependencies, driving greater engagement, growth, and business performance• Improved total global voluntary attrition rates versus 2023 overall and among salaried colleagues• Achieved record high Success and Inclusion scores in colleague engagement survey amidst record participation rate• Honed impact of Employee Resource Groups (ERGs) by moving toward Business Resource Groups (BRGs) with more programming aligned with Otis’ business strategy• Continued to increase volunteerism and participation in science, technology, engineering and math (STEM) programming in our communities |
| (1) | Includes units in warranty period. |
| (2) | As defined more fully in Appendix A on pages 99-102, Otis refers to non-GAAP New Equipment backlog and modernization backlog at constant currency. Appendix A also provides a reconciliation of this non-GAAP financial measure to the corresponding GAAP financial measure. |
| (3) | Based on Otis internal estimates. |
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Creating value in 2024
Financial highlights
Otis delivered solid financial results in 2024. Organic sales grew 1.4%, driven by our growing Service business, productivity initiatives and commodity deflation, enabling us to expand adjusted operating margins 50 basis points and grow adjusted earnings per share (“EPS”) by 8.2%. We increased our quarterly dividend by 14.7%, while generating $1.56 billion in operating cash flow (approximately $1.57 billion in adjusted free cash flow). We used our significant cash flow to return capital to our shareholders through approximately $1 billion in share repurchases and $600 million in dividends. Our modernization orders grew 18% and we ended the year with backlog up 13% at constant currency. Our maintenance portfolio grew above 4% for the third straight year to approximately 2.4 million units, positioning us for continued growth.(1)
| Metrics · Percentage change from 2023 | ||
|---|---|---|
| SALES | ||
| GAAP | $14.3B | 1.4%organic sales growth(1) |
| BACKLOG / UNITS | ||
| New Equipment backlog(1) | (4%) | (4%) |
| Modernization backlog(1) | 13% | 13% |
| Maintenance portfolio | 4.2% | 4.2% |
| CASH FLOW | ||
| Operating cash flow | $1.56B | (3.9%) |
| Adjusted free cash flow(1) | $1.57B | 2.4% |
| DILUTED EARNINGS PER SHARE | ||
| GAAP | $4.07 | 20.1% |
| Adjusted(1) | $3.83 | 8.2% |
| (1) | As defined more fully in Appendix A on pages 99-102, Otis refers to non-GAAP sales as organic sales, non-GAAP backlog growth at constant currency as backlog growth, non-GAAP operating profit as adjusted operating profit, non-GAAP cash flow as adjusted free cash flow and non-GAAP diluted earnings per share as adjusted diluted EPS. Appendix A also provides a reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures. |
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Independent Lead Director letter
TO OUR SHAREHOLDERS:As a Board, we were pleased with Otis’ performance in 2024. The company continued to enhance shareholder value with a clear vision and relentless focus on its long-term strategy, once again expanding its Service portfolio and driving growth in modernization, all while transforming itself from within as a more streamlined and customer-oriented company. We also were pleased to see Otis build on its strength and agility as a global Service business, and, in particular, the leadership team’s ability to capture market opportunities despite weakness in certain markets. Otis’ strong financial performance, including robust cash flow generation, also required a strong focus on its capital allocation strategy. In 2024, with the Board’s approval, the company returned more than $600 million in dividends and $1 billion in share repurchases to shareholders in addition to continuing bolt-on acquisitions. This year showed that Otis’ strategy – and the leadership team implementing it – are right on target.
Otis also made great strides in 2024 with UpLift – a program designed to enhance customer centricity and leverage Otis’ global scale and drive efficiency across the organization. The Board oversaw each phase of UpLift implementation, receiving updates from management at every Board meeting over the course of the year, and approved new partnerships to unlock greater efficiencies and opportunities through simplified back-office operations. The Board has seen a leadership team energized by its own forward momentum, committed to building new capabilities and enhancing talent while staying true to The Otis Absolutes. We will continue to challenge management to move deliberately and with pace as we provide clear guidance and strong oversight on this visionary global initiative and transformation.
We continue to see great opportunities for Otis’ future and are committed to oversee and encourage management as it works to unlock the company’s potential. I would like to express my gratitude to you, our shareholders, for your trust and support. Your confidence in Otis propels us forward as we continue to innovate and lead in our industry. We are excited about the opportunities ahead and remain committed to delivering long-term value to our shareholders. I look forward to continued engagement with you in 2025 and respectfully request your support for the Board-recommended proposals contained in this Proxy Statement.
Yours truly,
JOHN H. WALKER
INDEPENDENT LEAD DIRECTOR
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Notice of 2025 Annual Meeting of Shareholders
Meeting information
| DATE AND TIME: May 15, 20259:00 a.m. Eastern time | LOCATION:We will be holding our 2025 Annual Meeting of Shareholders (“Annual Meeting”) virtually via live webcast.To attend, vote or submit questions during the Annual Meeting, please see “How to attend” below. You will not be able to attend the meeting in person.For more information, see “Virtual Annual Meeting.” |
| Your vote is important. Please submit your proxy or voting instructions as soon as possible. |
Agenda
| 1. | Election of the 11 director nominees listed in the Proxy Statement |
| 2. | Advisory vote to approve executive compensation |
| 3. | Appointment of PricewaterhouseCoopers LLP to serve as independent auditor for 2025 |
| 4. | Shareholder proposal, if properly presented at the meeting |
| 5. | Other business, if properly presented |
Who may vote:
If you owned shares of Otis common stock at the close of business on March 17, 2025, you are entitled to receive this Notice of the 2025 Annual Meeting and to vote at the meeting, either online or by proxy.
How to attend:
To attend the meeting, please go to www.virtualshareholdermeeting.com/OTIS2025. To participate by voting or submitting questions during the Annual Meeting, you will need to log in to www.virtualshareholdermeeting.com/OTIS2025 using the control number located on your Notice of Internet Availability of Proxy Materials (“Notice of Internet Availability”), proxy card or voting instruction form. You will not be able to attend the Annual Meeting in person.
Please review your 2025 Proxy Statement (“Proxy Statement”) and vote using one of the methods described on the following page.
By Order of the Board of Directors.
TOBY W. SMITH
SENIOR VICE PRESIDENT, CORPORATE SECRETARY
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Notice of 2025 Annual Meeting of Shareholders
How to Vote
| INTERNET Online during the Virtual Annual Meeting: Go to www.virtualshareholdermeeting.com/OTIS2025 and followthe instructions on the website.Online in advance of the Virtual Annual Meeting:Up until 11:59 p.m. Eastern time on May 14, 2025, go towww.proxyvote.com and follow the instructions on the website | TELEPHONEUp until 11:59 p.m.Eastern time on May 14, 2025, call 1-800-690-6903 | MAIL Sign, date and returnyour proxy card or votinginstruction form in theenclosed postage-paid envelope |
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Important notice regarding the availability of proxy materials for the Annual Meeting to be held on May 15, 2025. This Notice of the 2025 Annual Meeting and Proxy Statement and our 2024 Annual Report to Shareholders (“2024 Annual Report”) are available free of charge at www.proxyvote.com. References in either document to our website or any third-party website are for the convenience of readers, and information available at or through these websites is not a part of nor is it incorporated by reference in the Proxy Statement or 2024 Annual Report.
The Board of Directors (the “Board”) is soliciting proxies to be voted at our Annual Meeting on May 15, 2025, and at any postponed or reconvened meeting. We expect that the proxy materials or a Notice of Internet Availability will be mailed and made available to shareholders beginning on or about April 4, 2025. At the Annual Meeting, votes will be taken on the matters listed in this Notice of the 2025 Annual Meeting.
Virtual Annual Meeting
For our Annual Meeting, we have adopted a virtual meeting format. This format enables shareholders to participate regardless of geographic location, physical or resource constraints. It also safeguards the health and safety of our shareholders, colleagues and members of our Board. All that is required is an internet-connected device.
How will the Annual Meeting be held?
The Annual Meeting will be held solely via live webcast through an online virtual meeting platform that allows shareholders around the globe to listen to the entire meeting on their computer or other device and submit questions. Members of management, our Board and a representative of our independent auditor will be in virtual attendance. There will not be a physical meeting location.
How can shareholders attend and participate in the Annual Meeting?
Only shareholders of record and beneficial owners as of March 17, 2025, the record date, may attend or participate in the meeting by voting or submitting questions. To attend and participate, go to www.virtualshareholdermeeting.com/OTIS2025 and log in using the 16-digit control number included on your Notice of Internet Availability, proxy card or voting instruction form.
On the day of the Annual Meeting, May 15, 2025, shareholders may begin to log in to the online virtual meeting platform beginning at 8:45 a.m. Eastern time. The meeting will begin promptly at 9:00 a.m. Eastern time. Please allow ample time to log in.
How can shareholders receive technical assistance in connection with the Annual Meeting?
Beginning at 8:45 a.m. Eastern time on the day of the meeting, we will have technicians ready to assist you with any technical difficulties you may have when logging in or accessing the Annual Meeting. If you encounter any difficulties accessing the Annual Meeting during the check-in or meeting time, please call the technical support number that will be posted on the online virtual meeting platform log-in page.
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Notice of 2025 Annual Meeting of Shareholders
How can shareholders submit questions at the Annual Meeting?
Once logged in to the virtual meeting platform as instructed, shareholders may submit questions directly by following the instructions on the website. We will answer as many shareholder-submitted questions that are appropriate and pertinent to the meeting agenda as time permits. Substantially similar questions may be answered as a group.
YOU WILL NOT BE ABLE TO ATTEND THE ANNUAL MEETING IN PERSON.
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Table of contents
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.