This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider. Please read the entire Proxy Statement carefully before voting.
Annual Meeting of Shareholders
| Time and Date: | 9:00 a.m. Eastern Standard Time, Friday, January 31, 2025. |
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| Place: | The Annual Meeting will be conducted solely by remote communication through a virtual meeting format. |
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| Please visit www.virtualshareholdermeeting.com/UGI2025 to be admitted to the Annual Meeting. Shareholders or their legal proxies must enter the 16-digit control number found on their proxy card, voting instruction form or other proxy materials. |
| Record Date: | December 2, 2024 |
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| Voting: | Shareholders as of the close of business on the record date are entitled to vote. Each share of common stock is entitled to one vote for each matter to be voted on. |
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| Proposal | | Required Approval | | BoardRecommendation | | For MoreInformation |
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| Election of ten (10) Directors | | Majority of Votes Cast | | FOR | | Page 11 |
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| Advisory Vote to approve the Fiscal 2024 Compensation of the Company’s Named Executive Officers (“say-on-pay vote”) | | Majority of Votes Cast | | FOR | | Page 75 |
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| Ratification of the appointment of KPMG LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal 2025 | | Majority of Votes Cast | | FOR | | Page 77 |
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| A shareholder proposal regarding a director election resignation governance guideline, if properly presented at the Annual Meeting | | Majority of Votes Cast | | AGAINST | | Page 78 |
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Voting Matters and Board Recommendations
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| Over the Internet | | By Telephone | | By Mail or at the Meeting |
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| If your shares are registered in your name: Vote your shares over the Internet by either scanning the QR Barcode on your Notice of Availability of Proxy Materials, or by accessing the Broadridge proxy online voting website at: www.proxyvote.com and following the on-screen instructions. You will need the control number that appears on your Notice of Availability of Proxy Materials when you access the web page. | | If your shares are registered in your name: Vote your shares over the telephone by accessing the telephone voting system toll-free at 1-800-690-6903 and following the voting instructions. The telephone instructions will lead you through the voting process. You will need the control number that appears on your Notice of Availability of Proxy Materials when you call. | | If you received these Annual Meeting materials by mail: Vote by signing and dating the proxy card(s) and returning the card(s) in the prepaid envelope.Shareholders may vote at the Annual Meeting. You may vote your shares by accessing the Annual Meeting website at www.virtualshareholdermeeting.com/UGI2025 and clicking on the Vote Here button. |
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| If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the telephone by following the voting instructions you receive from such broker, bank or other nominee. | | If your shares are held in the name of a broker, bank or other nominee: Vote your shares over the Internet by following the voting instructions that you receive from such broker, bank or other nominee. | | You may also be represented by another person at the Annual Meeting by executing a proper proxy designating that person. If you are a beneficial owner of shares, you must obtain a legal proxy from your broker, bank or other holder of record and present it to the Judge of Election with your ballot to be able to vote at the Annual Meeting. |
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Operational Highlights
The Company reported diluted earnings per share of $1.25 and adjusted diluted earnings per share of $3.06 for the fiscal year ended September 30, 2024 (“Fiscal 2024”). Our business strategy is to grow the Company by focusing on our core competencies of distributing, storing, transporting and marketing energy products. We utilize our core competencies from our existing diversified businesses and our international experience, extensive asset base and access to customers to accelerate both organic growth in our existing businesses as well as in related and complementary businesses.
In Fiscal 2024, the Company embarked on a journey to enhance its financial profile and unlock greater value for shareholders. Our journey ahead is a multi-year process to optimize our Company’s operating model, establish a culture of high performance, pursue operational excellence through continuous improvement, and drive reliable earnings growth. Accordingly, we are focused on (1) pursuing opportunities to optimize our portfolio and drive reliable earnings growth in the base businesses; (2) executing on an operational improvement plan at AmeriGas Propane, L.P. (“AmeriGas”); (3) creating operational efficiencies to improve cost agility and deliver sustainable cost savings; and (4) enhancing our capital structure and credit metrics to provide greater financial flexibility.
We are committed to pursuing opportunities to optimize our portfolio and drive reliable earnings growth in our regulated utilities businesses, primarily through robust investments in our regulated utilities businesses, optimizing our cost structure, and effectively managing our global LPG businesses, which generate significant free cash flow. We strive to be the preferred provider in all markets we serve and to return value to our shareholders.
Environmental Strategy:
We believe that corporate sustainability is critical to our overall business success and we are committed to growing the Company in an environmentally responsible way. UGI’s environmental strategy is focused on three main areas: reducing our emissions; reducing our customers’ emissions affordably, reliably, and responsibly; and investing in renewable solutions. To support our strategy, we have made the following environmental commitments discussed below while also committing to continue to grow our earnings per share and dividends.
| ● | Scope 1 Emissions Reduction Commitment – Reduce Scope 1 GHG emissions by 55% by 2025 (using Fiscal 2020 as a baseline). Our Scope 1 emissions reduction target does not include emissions from the Mountaineer Acquisition, which closed in September 2021. The target also excluded the Stonehenge Acquisition and only accounts for our ownership interest in Pennant at the time we set the target. The emissions from the Pine Run acquisition were included in the baseline 2020 number as this investment contributed to our goal. The 2020 base number also takes a five-year emissions average from the Hunlock generation facility to account for year-over-year differences in run time. |
| ● | Methane Emissions Reduction Commitment – 92% reduction by 2030, and 95% reduction by 2040. |
| ● | Pipeline Replacement and Betterment Commitment – Replace all cast iron pipelines by 2027 and all bare steel by 2041. Our pipeline replacement and betterment activities better enable us to achieve our emissions reductions goals. |
We report our progress on the environmental goals and commitments annually in our Sustainability Reports, including our Scope 1, 2 and 3 emissions, air quality impact, and water management efforts. Our Scope 3 emissions stem primarily from the extraction (upstream) and combustion (downstream) of the molecules we distribute, and from our supply chain. Our Sustainability Reports may be accessed on our website under “ESG - Resources - Sustainability Reports.” Information published in our Sustainability Reports is not incorporated by reference in this Proxy Statement.
Overview of Corporate Governance
Corporate Governance Highlights
| ✔ | Annual election of directors |
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| ✔ | Majority voting with a director resignation policy for directors not receiving a majority of votes cast in uncontested elections |
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| ✔ | No supermajority voting provisions |
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| ✔ | The Board currently is led by an independent chair |
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| ✔ | Majority of director-nominees are independent (9 of 10) |
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| ✔ | Mandatory retirement age of 75 years for directors |
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| ✔ | Demonstrated continued refreshment of the Board, with 6 out of 10 Board nominees with less than 5 years of service |
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| ✔ | Independent Board Committees (with the exception of the Executive Committee), each with authority to retain independent advisors |
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| ✔ | Engaged and focused Board, met 23 times in Fiscal 2024 |
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| ✔ | Regularly scheduled executive sessions of non-management directors |
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| ✔ | Compensation and Management Development Committee advised by independent compensation consultant |
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| ✔ | Annual Board and Committee self-assessment process |
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| ✔ | Annual limit of $500,000 on individual director equity awards |
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| ✔ | Robust director stock ownership requirements |
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Overview of Executive Compensation Practices and Pay for Performance
The compensation program for our named executive officers is designed to provide a competitive level of total compensation necessary to attract and retain talented and experienced executives. Additionally, our compensation program is intended to motivate and encourage our executives to contribute to our success and reward our executives for leadership excellence and performance that promotes sustainable growth in shareholder value. In alignment with that objective, our Compensation and Management Development Committee and the Board determine pay based on a comprehensive view of quantitative and qualitative factors designed to enhance shareholder value and align the long-term interests of executives and shareholders.
In Fiscal 2024, the components of our executive compensation program included salary, annual bonus awards, long-term incentive compensation (performance unit awards, restricted stock unit awards, and stock option grants), limited perquisites, retirement benefits and other benefits, all as described in greater detail in the Compensation Discussion and Analysis of this Proxy Statement. We believe that the elements of our compensation program are essential components of a balanced and competitive compensation program to support our short- and long-term goals.
The Company allocates a substantial portion of compensation to performance-based compensation, effectively linking our executives’ compensation to our financial performance. In Fiscal 2024, 55% to 75% of the principal compensation components for all named executive officers, other than Mr. Longhi, were variable and tied to performance objectives.
For example, UGI Corporation relative TSR performance unit awards resulted in no payout for the UGI Corporation performance unit awards cycle ended December 31, 2020, December 31, 2021, December 31, 2022 and December 31, 2023. In addition, the current relative TSR cycle scheduled to end December 31, 2024 is tracking towards no payout. For the Fiscal 2023 performance units tied to Adjusted EPS, 81% of target was achieved for the two-year performance period ended September 30, 2024. However, these performance units are subject to an additional one-year time-vesting requirement ending on September 30, 2025. For additional information on the alignment between our financial results and executive officer compensation, see the Compensation Discussion and Analysis in this Proxy Statement.
Executive Compensation Highlights
| ✔ | A substantial portion of executive compensation is allocated to performance-based compensation, including long-term awards, in order to align executive officers’ interests with shareholders’ interests and to enhance long-term performance. In Fiscal 2024, 55% to 75% of the principal compensation components for all named executive officers, other than Mr. Longhi, were variable and tied to performance objectives. |
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| ✔ | Robust executive officer stock ownership requirements |
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| ✔ | Policy prohibiting hedging and pledging of Company securities, including the holding of Company securities in margin accounts as collateral for margin loans, by directors and executive officers |
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| ✔ | Termination of employment is required for payment under change-in-control agreements (“double trigger”) |
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| ✔ | Double trigger for the accelerated vesting of equity awards in the event of a change in control |
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| ✔ | No tax gross-ups in change-in-control agreements for any of our named executive officers |
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| ✔ | Recoupment policy for incentive-based compensation paid or awarded to current and former executive officers in the event of a restatement of financial results to correct an error (i) in previously issued financial statements that is material to the previously issued financial statements, or (ii) that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, pursuant to the rules of the New York Stock Exchange and the Securities and Exchange Commission |
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| ✔ | Board-reviewed succession plan for CEO and other senior management |
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| ✔ | Annual advisory vote on executive compensation |
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