Michael Larsen

About Michael Larsen

Michael M. Larsen (age 56) is an independent director at A. O. Smith (AOS) since 2021 and serves as Chair of the Audit Committee. He is Senior Vice President and Chief Financial Officer of Illinois Tool Works (since 2013); prior roles include CEO and director of Gardner Denver (2012–2013), CFO of Gardner Denver (2010–2013), and CFO of GE Water & Process Technologies, with earlier global finance leadership roles at GE (1995–2009). The Board has determined he is independent and an “audit committee financial expert.”

Past Roles

Organization	Role	Tenure	Committees/Impact
General Electric (GE)	Global finance leadership roles	1995–2009	Progressive finance leadership; CFO GE Water 2009–2010
GE Water & Process Technologies	Chief Financial Officer	2009–2010	Financial oversight in water and process tech
Gardner Denver, Inc.	Vice President & CFO; President & CEO	2010–2013; 2012–2013	Led company as CEO; served on board until acquisition by KKR in 2013

External Roles

Organization	Role	Tenure	Notes
Illinois Tool Works, Inc.	SVP & Chief Financial Officer	2013–present	Public, global multi-industrial manufacturer
Gardner Denver, Inc.	Director	2012–2013	Served until acquisition by KKR

Board Governance

Committee assignments: Audit Committee Chair; proposed 2025 Audit Committee membership includes Fister, Larsen (Chair), Martin, and Peace; Audit met 9 times in 2024.
Independence: Board determined Larsen meets NYSE independence requirements; Audit financial expert under SEC rules.
Attendance: In 2024, the Board held 5 regular meetings; standing committees held 18 meetings (including two special). All directors attended all Board and committee meetings, with a single partial exception; all continuing directors attended the 2024 Annual Meeting.
Executive sessions: Non-management directors met in executive session five times in 2024; presided by the rotating Presiding Director (currently Ronald D. Brown, April 2024–April 2026).

Director election support – Common Stock class votes:

Metric	2023	2025
For	103,745,440	39,339,132
Authority Withheld	1,732,160	59,992,829
Broker Non-Vote	7,107,303	6,827,418

RED FLAG: Significant increase in “Authority Withheld” votes for Larsen in 2025 vs. 2023 within the Common Stock class, indicating heightened investor concerns despite plurality voting in dual-class structure.

Fixed Compensation

Nonemployee director program and Larsen’s cash comp:

Pay Element	2023	2024
Board Cash Retainer ($)	$103,500	$103,500
Committee Chair Cash Retainer – Audit ($)	$20,000	$20,000
Presiding Director Cash Retainer ($)	$30,000 (role not applicable to Larsen)	$30,000 (role not applicable to Larsen)
Fees Earned/Paid in Cash – Larsen ($)	$103,500	$118,500

Compensation changes effective April 8, 2025:

Board Equity Retainer increases to $150,000; Audit Chair retainer increases to $25,000; Compensation and Nominating Chairs to $20,000.

Performance Compensation

Directors receive an annual equity grant of Common Stock; no options, PSUs, or performance-based metrics for directors:

Grant Detail	2023	2024
Grant date	April 11, 2023	April 9, 2024
Shares granted	2,126	1,626
Grant pricing basis	$65.86 (avg high/low)	$86.14 (adjusted avg high/low)
Grant date fair value ($)	$140,018	$140,064
Deferral election	Larsen deferred stock award (RSUs)	Larsen deferred stock award (RSUs)

Program characteristics: Nonemployee directors are paid in cash retainers and Common Stock grants; no meeting fees or perquisites ≥$10,000; directors may defer equity under the Non-qualified Deferred Compensation Plan and receive dividend equivalents in RSUs.

Other Directorships & Interlocks

Company	Relationship	Materiality/Independence Conclusion
Gardner Denver, Inc.	Prior director (2012–2013)	Not current; no related-party transactions disclosed affecting independence
Related-party transactions review	Annual NYSE independence assessment	No transactions above SEC reporting thresholds; NGC and Board determined relationships not material; Larsen independent

Expertise & Qualifications

Financial leadership across global industrials; extensive GAAP, auditing standards, budgeting and financial reporting expertise; M&A, IT/cybersecurity, global sourcing, sustainability experience. Board designated Audit Committee financial expert.
Industry experience in water technologies through GE Water & Process Technologies; relevant to AOS’s water technology focus.

Equity Ownership

Metric	2023 (Dec 31)	2024 (Dec 31)
Common Stock (shares)	11,425	11,425
Restricted Stock Units (director deferrals)	6,542	8,296
Options exercisable within 60 days	0	0
Ownership % of Common Stock	* <1%	* <1%

Ownership alignment policies:

Director stock ownership guideline: 5× cash retainer; all directors have met the requirement (within 5 years).
Prohibition on hedging and pledging of company securities applies to directors, officers, employees.

Governance Assessment

Board effectiveness: Larsen’s role as Audit Chair (with 9 Audit Committee meetings in 2024) and audit financial expert status signal strong oversight of financial reporting, ERM, and compliance.
Independence and conflicts: No related-party transactions above SEC thresholds; NGC/Board review affirms independence; no ITW-related conflicts disclosed.
Attendance and engagement: High Board and committee participation with robust executive sessions; suggests active oversight culture.
Compensation alignment: Director pay is predominantly fixed cash and fixed-share equity retainer; no performance-linked director pay, aligning with good governance practice to preserve independence; changes effective 2025 modestly increase equity and chair retainers in line with WTW benchmarking.
Shareholder signals: 2025 Common Stock class vote for Larsen shows materially higher “Authority Withheld” vs. 2023, a notable governance red flag that merits engagement to understand investor concerns (e.g., committee decisions, audit oversight positions, or external role optics).
Broader shareholder sentiment: Say-on-pay advisory vote in 2025 passed with 33,247,046 “For” vs. 1,993,686 “Against,” indicating overall support for executive compensation framework; not director-specific but relevant to governance climate.

Overall implication: Larsen brings deep finance and audit expertise and chairs a highly active Audit Committee, bolstering board oversight. The 2025 spike in “withhold” votes in the Common Stock class is a salient investor-confidence signal; proactive investor engagement and transparent communication around audit oversight, risk management, and any perceived concerns is advisable.