Ferguson Enterprises Inc. /DE/
For the period ended Dec 31, 2025. Filed Mar 16, 2026.
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Dec 31, 2025 · Filed Mar 16, 2026
Contents
Long-Term Equity-Based Incentive Program
We believe that providing a significant portion of our Executive Officers’ total compensation package in long-term equity-based compensation aligns the incentives of our Executive Officers with the interests of our shareholders and with our long-term corporate success. Additionally, we believe that equity-based compensation awards enable us to attract, retain, motivate and fairly compensate executive talent needed to deliver our strategic priorities.
Our Executive Officers were eligible in the transition period to participate in the Omnibus Plan maintained by the Company. The Compensation Committee, subject to approval by our Board as deemed necessary by the Compensation Committee, determines the size and terms (including the attached conditions) of equity grants to our Executive Officers in accordance with the terms of the Omnibus Plan. These are approved by the Compensation Committee (and the Board, as applicable) on an individual basis.
Specific information on transition period grants issued under our Omnibus Plan is detailed in this section, including the following:
award mix;
target award opportunities;
awards performance metrics and weighting; and
awards under the Omnibus Plan (restricted stock units (“RSUs”), performance stock units (“PSUs”) and stock options (“SOs”).
| 44 | 2026 PROXY STATEMENT |
Transition Period Award Mix
The Compensation Committee established the following mix of LTI awards for our NEOs for the transition period. This mix may change in future fiscal years as we continue to evolve the business and execute on our strategic initiatives.
| Performance-Based · Time-Based | |||
|---|---|---|---|
| PSU | SO | RSU | |
| All NEOs | 50% | 20% | 30% |
The performance-based awards incentivize our Executive Officers to focus on objectives that are expected to drive sustainable shareholder value. All PSUs granted for Executive Officers will vest subject to achievement of relative total shareholder return (“TSR”), adjusted earnings per share (“EPS”) growth (diluted) and return on capital employed (“ROCE”) metrics, each such metric having a weighting of 33.3%. The realized value for stock option awards is based on the increase in the market value of our common stock relative to the value when the award was granted. Performance metrics are discussed in more detail in the sections below.
The RSUs and SOs awarded will vest in three equal annual installments beginning on the one-year anniversary of the date of grant, while the PSUs cliff vest on the three-year anniversary of the date of grant. Dividend equivalents will accrue in shares during the vesting period on the RSUs and PSUs for Executive Officers, but are not paid until the underlying awards vest and only on earned awards.
Transition Period Target Award Opportunities
For the transition period, the Compensation Committee approved (in the case of Messrs. Murphy and Brundage, recommended to the Board and the Board approved) the total LTI target opportunities and awards for our NEOs as shown in the table below.
| Name | Annualized Target LTI | Target TP LTI(1) | Target PSUs Awarded | RSUs Awarded | Stock Options Awarded |
|---|---|---|---|---|---|
| Kevin Murphy | $10,750,000 | $4,479,167 | 9,530 | 5,718 | 11,698 |
| Bill Brundage | $3,100,000 | $1,291,667 | 2,748 | 1,648 | 3,373 |
| Bo Camposano | $1,500,000 | $625,000 | 1,329 | 797 | 1,632 |
| Jake Schlicher | $1,750,000 | $729,167 | 1,551 | 930 | 1,904 |
| Bill Thees | $1,750,000 | $729,167 | 1,551 | 930 | 1,904 |
(1)Represents a 5/12ths pro-ration on annualized target LTI due to the five-month duration of the transition period.
Transition Period PSU Awards Performance Metrics and Weightings
For the transition period, we reviewed the performance metrics for our PSU awards historically provided to the NEOs and determined that relative TSR, adjusted EPS growth (diluted) and ROCE continued to be appropriate performance metrics, as they closely match the shareholder value creation experience.
The metrics used for the NEO's PSU awards and their weightings for the transition period are shown below. The PSU awards vest on October 14, 2028, contingent on achievement of performance conditions and, except under certain circumstances described below in “—General Information on Share Plans,” service conditions.
| 2026 PROXY STATEMENT | 45 |
| Metric | Weighting | Definition | Rationale |
|---|---|---|---|
| TSR Relative to S&P 500 Industrials | TSR Relative to S&P 500 Industrial Constituents as of July 1, 2025. | Relative TSR is a commonly used LTI measure.Relative calibration can mitigate impact of broader stock market impact and/or sector volatility and it provides an objective measure of shareholder value creation, including that created by M&A. | |
| Adjusted EPS Growth (diluted) | Adjusted U.S. GAAP EPS – Growth over three-year performance period using the adjusted EPS growth (diluted) for the three-year period beginning July 1, 2025 and ending on June 30, 2028.Adjusted EPS – diluted is defined as adjusted net income divided by the weighted average diluted shares outstanding. Adjusted net income is defined as income from continuing operations before amortization of acquired intangible assets (net of tax), discrete tax items and other items that are non-recurring (net of tax), as further described in the section titled “Non-GAAP Reconciliations and Supplementary Information.” | Commonly used LTI measure, which is simple and transparent and has a strong line of sight. Investor orientated metric, closely aligned with shareholder interests. | |
| ROCE | Adjusted earnings before interest and taxes (Adjusted EBIT) divided by average capital employed. Adjusted EBIT is defined as operating profit excluding certain non-recurring items (non-GAAP adjustments) and including the impact of acquisition related intangible amortization. Average capital employed is defined as the sum of average net debt and average shareholders’ equity and excludes discontinued operations. | Commonly used and well understood externally LTI measure, encourages strong capital discipline. |
The following table details the threshold, target and maximum achievement levels for the performance conditions relating to the PSU metric of relative TSR, when ranked against the comparator companies in the S&P 500 Industrial Constituents as of July 1, 2025:
| Performance Metric | Threshold | Target | Maximum |
|---|---|---|---|
| Percent of Target | 50% | 100% | 200% |
| Relative Total Shareholder Return(1) | 25th %ile | 55th %ile | Upper Quartile |
(1)Straight line interpolation between threshold and maximum.
Actual goals for the Adjusted EPS growth (diluted) and ROCE metrics will be disclosed when the performance period is completed.
| 46 | 2026 PROXY STATEMENT |
Transition Period RSU and SO awards under the Omnibus Plan
Transition Period RSU and SO awards granted under the Omnibus Plan will vest in three equal annual installments beginning on October 14, 2026, the one-year anniversary of the date of grant, subject to continued service except under certain circumstances described below in “—General Information on Share Plans.”
Vesting of Previously Granted Awards
As previously disclosed in our 2025 Notice of Meeting and Proxy Statement filed with the SEC on October 15, 2025, our fiscal 2023 performance-based LTI awards to our NEOs (for which the three-year performance period ended July 31, 2025) were earned based on the Compensation Committee’s determination of performance and equitable achievement for that period. Certain time-based vestings with respect to these LTI awards occurred during the transition period. Such LTI awards vested with respect to their time-based requirements and were settled on October 13, 2025. No additional performance-based LTI awards vested during the transition period other than as previously disclosed in our 2025 Notice of Meeting and Proxy Statement.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.