Item 2.02 Results of Operations and Financial Condition.
Quarterly Results Press Release
On Wednesday, May 3, 2023, a press release was issued regarding the second
quarter results of Emerson Electric Co. (the "Company"). A copy of this press
release is furnished with this Current Report on Form 8-K as Exhibit 99.1.
References to underlying orders in the press release refer to the Company's
trailing three-month average orders growth versus the prior year, excluding
currency, acquisitions and divestitures.
Non-GAAP Financial Measures
The press release contains non-GAAP financial measures as such term is defined
in Regulation G under the rules of the Securities and Exchange Commission. While
the Company believes these non-GAAP financial measures are useful in evaluating
the Company, this information should be considered as supplemental in nature and
not as a substitute for or superior to the related financial information
prepared in accordance with GAAP. Further, these non-GAAP financial measures may
differ from similarly titled measures presented by other companies. The reasons
management believes that these non-GAAP financial measures provide useful
information are set forth in the Company's most recent Form 10-K filed with the
Securities and Exchange Commission and in the press release furnished with this
Form 8-K.
Forward-Looking and Cautionary Statements
Statements in the press release that are not strictly historical may be
"forward-looking" statements, which involve risks and uncertainties, and Emerson
undertakes no obligation to update any such statements to reflect later
developments. These risks and uncertainties include the Company's ability to
successfully complete on the terms and conditions contemplated, and the
financial impact of, the proposed Climate Technologies transaction and the
proposed National Instruments transaction, the scope, duration and ultimate
impacts of the COVID-19 pandemic and the Russia-Ukraine conflict, as well as the
economic and currency conditions, market demand, including related to the
pandemic and oil and gas price declines and volatility, pricing, protection of
intellectual property, cybersecurity, tariffs, competitive and technological
factors, inflation, among others, as set forth in the Company's most recent
Annual Report on Form 10-K and subsequent reports filed with the SEC. The
outlook contained herein represents the Company's expectations for its
consolidated results, other than as noted herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On May 3, 2023, the Company announced that on May 2, 2023 Frank J. Dellaquila,
the Company's Senior Executive Vice President and Chief Financial Officer,
indicated that he would be retiring from his role as Chief Financial Officer
effective May 10, 2023. Mr. Dellaquila will remain an employee of the Company in
the role of Senior Advisor to the CEO until September 30, 2023 (the "Retirement
Date") to assist in the orderly transition of his duties.
Also on May 3, 2023, the Company announced the promotion of Michael J. Baughman
to Executive Vice President, Chief Financial Officer and Chief Accounting
Officer of the Company, effective May 10, 2023. Mr. Baughman, age 58, joined the
Company in October 2017 as Vice President and Controller and was appointed Chief
Accounting Officer in February 2018.
In connection with his retirement, on May 2, 2023, the Company and
Mr. Dellaquila entered into a letter agreement (the "Letter Agreement"). Under
the Letter Agreement, Mr. Dellaquila will continue to receive his base salary
and certain other benefits through the Retirement Date. Mr. Dellaquila will
remain eligible to receive a payment of his fiscal 2023 annual bonus based on
the Company's financial performance for fiscal 2023 to be paid at the normal
time under the program.
As permitted under the Company's 2015 Incentive Shares Plan, Mr. Dellaquila will
remain eligible to receive a full payout of any earned awards under the Fiscal
2021 - 2023 and Fiscal 2022 - 2024 Performance Shares Programs, subject to the
Company's achievement of the applicable performance objectives, to be paid at
the normal times provided for under the programs.
Mr. Dellaquila will be eligible to receive distributions from the Company's
nonqualified and qualified pension plans, pursuant to the terms and conditions
of and to be paid in the manner and at the time set for in such plans. He will
also be eligible to receive distributions under the qualified and non-qualified
401(k) and profit-sharing retirement savings plans, as provided under those
plans.
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Mr. Dellaquila agrees, among other things: (i) not to compete with, or solicit
or hire the employees of, the Company or any of its subsidiaries during a period
of four years from the Retirement Date; (ii) not to use or disclose any
confidential information of the Company; (iii) to reaffirm all existing
non-compete, invention, non-disclosure and non-solicitation obligations he has
to the Company; and (iv) to comply with non-disparagement obligations.
Mr. Dellaquila will also release and discharge the Company, its affiliates, and
its and their respective directors, officers, employees, agents and other
parties from any and all claims or liabilities of whatever nature and will
remain subject to the Company's clawback policy.
If Mr. Dellaquila violates any of his obligations to the Company under the
Letter Agreement, he will forfeit all payments to be made or benefits provided
under the Letter Agreement and will repay to the Company, as liquidated damages,
one-half of the economic value of all benefits provided to him under the Letter
Agreement prior to the date of breach.
The above description of the Letter Agreement is qualified in its entirety by
reference to a copy of the Letter Agreement attached hereto as Exhibit 10.1.
In connection with his promotion, Mr. Baughman's salary has been increased to
$800,000 and his bonus opportunity will increase, consistent with the mix to
total compensation for the Company's named executive officers as described in
the Company's annual proxy statement. In addition, Mr. Baughman received
additional performance shares under the Company's Fiscal 2023 - 2025 Performance
Shares Program with a value of $1,450,000, which are subject to the achievement
of the Company's performance goals over the three-year performance period ending
on September 30, 2025. For additional information on these compensation
arrangements, please see "Executive Compensation" in the Company's annual proxy
statement.
Item 7.01. Regulation FD Disclosures.
The following information is furnished pursuant to Regulation FD.
On May 3, 2023, the Company issued a press release announcing Mr. Dellaquila's
retirement and Mr. Baughman's appointment. A copy of the press release is
attached hereto as Exhibit 99.2 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description of Exhibits
10.1 Letter Agreement dated May 2, 2023 between Emerson Electric Co. and
Frank J. Dellaquila.
99.1 Emerson's May 3, 2023 press release announcing second quarter
results.
99.2 Press Release issued by Emerson Electric Co. on May 3, 2023
104 Cover Page Interactive Data File - the cover page XBRL tags are
embedded within the Inline XBRL document.
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