Ronald Brown

About Ronald D. Brown

Ronald D. Brown is an independent director of A. O. Smith Corporation (AOS), serving since 2001; he is age 71 and currently chairs the Personnel and Compensation Committee and serves on the Nominating and Governance Committee . He is the Presiding Independent Director for the period April 2024 to April 2026, rotating among committee chairs per AOS’s governance guidelines . Brown’s background includes executive leadership (CEO, COO, vice chairman), finance experience, and service as a corporate attorney, with deep manufacturing and international experience across Milacron, LSI Industries, The Armor Group, and Cincinnati Incorporated . The Board has determined Brown meets NYSE independence requirements and is financially literate .

Past Roles

Organization	Role	Tenure	Committees/Impact
Milacron Inc.	Chairman and Chief Executive Officer	2001–2008	Led plastics processing and metalworking fluids supplier
The Armor Group, Inc.	Chief Operating Officer; later Vice Chairman	COO: 2013; Vice Chair: Mar 2017–Apr 2018	Woman‑owned manufacturer; multi‑industry equipment; operational oversight
LSI Industries Inc.	Interim Chief Executive Officer	Apr 2018–Oct 2018	Transition leadership at lighting and graphics manufacturer
Cincinnati Incorporated	Interim President and Chief Executive Officer	Jul 2020–Dec 2020	Stabilized privately held machine tool manufacturer

External Roles

Organization	Role	Tenure	Committees/Impact
LSI Industries Inc.	Director	Current	Chair of Compensation Committee; member of Executive Committee
Zep Inc.	Director	2010–2015	Chair of Compensation Committee; member of Nominating and Corporate Governance Committee
University of Cincinnati	Board of Trustees	Appointed 2013; Chair 2019–2021	Governance leadership in higher education

Board Governance

Attribute	Detail
Independence	Board determined Brown meets NYSE independence rules; all members of Audit, Personnel & Compensation, and Nominating & Governance Committees are independent
Committee assignments	Personnel & Compensation (Chair); Nominating & Governance (Member)
Presiding Independent Director	Serves April 2024–April 2026; presides over executive sessions; coordinates agendas with Chair/CEO
Attendance	2024: Board held 5 regular meetings and committees held 18; all directors attended all Board/committee meetings with the sole exception of one director with an unavoidable conflict; nonmanagement directors met in executive session five times
Controlled company context	AOS qualifies as a “controlled company” due to Smith Family Voting Trust control but does not use the NYSE controlled‑company exemptions; committees remain fully independent
Related‑party transactions	NGC reviews related‑party transactions; except immaterial relationships noted for other directors, there were no related‑party transactions

Fixed Compensation

Pay Element	2024 Amount	2025 Amount
Board Cash Retainer	$103,500	$103,500
Board Equity Retainer (in Common Stock)	$140,000	$150,000
Committee Chair Cash Retainer – Audit	$20,000	$25,000
Committee Chair Cash Retainer – Personnel & Compensation	$15,000	$20,000
Committee Chair Cash Retainer – Nominating & Governance	$15,000	$20,000
Presiding Independent Director Cash Retainer	$30,000	$30,000

Director	Fees Earned or Paid in Cash ($)	Stock Awards ($)	Total ($)
Ronald D. Brown	$141,000	$140,064	$281,064
Notes	On Apr 9, 2024, each director (except the employee director) received an equity retainer of 1,626 shares valued at $86.14/share, totaling $140,064 . Brown deferred his stock awards (see Equity Ownership) .

Performance Compensation

AOS does not pay performance incentives to non‑employee directors; however, Brown chairs the Personnel & Compensation Committee overseeing executive incentive structures and pay‑for‑performance alignment.

Incentive Component	Metric	Target/Structure	2024 Outcome/Notes
Annual executive bonus (corporate)	EBIT (80%)	Target EBIT $799.1M	Achieved 68.1% of EBIT target; overall corporate bonus achievement 69.0%
Annual executive bonus (corporate)	Net Sales (20%)	Target Net Sales $4.0258B	Achieved 72.7% of Net Sales target
Long‑term performance cash	ROIC vs cost of capital	3‑year; Target at 30.8% performance; Max 200% at 36.5%	2024 grants est. value ~195.6% of target after year one; 2023 grants ~167.5% after two years
Long‑term performance stock (ESG)	Water savings	3‑year; 100% at 16M gallons; 150% at 20M	2024 grants est. ~150% of shares granted (through Dec 2024)
Prior cycle payout	Performance cash 2022–2024	ROIC exceeded cost of capital by 479.5%; payout 115.9% of target

Other Directorships & Interlocks

Current: LSI Industries Inc. (Compensation Committee Chair; Executive Committee member) .
Prior: Zep Inc. (Compensation Committee Chair; Nominating & Corporate Governance Committee member; until acquisition in 2015) .
Non‑profit/academic: University of Cincinnati Board of Trustees (Chair 2019–2021) .
No AOS‑identified material related‑party transactions or interlocks involving Brown were disclosed; NGC reported no material director conflicts after review .

Expertise & Qualifications

Executive leadership: CEO, chairman, COO (Milacron, LSI, Armor Group, Cincinnati Inc.); broad operating and financial leadership .
Legal/finance: Experience as a corporate attorney and CFO; offers multi‑disciplinary perspective to compensation oversight .
Industrial/manufacturing: Significant international/manufacturing experience across multiple public and private industrials .
Board governance: Chair of PCC at AOS; chairs Compensation at LSI; prior governance roles at Zep and University of Cincinnati .

Equity Ownership

Holder	Class A Shares	% Class A	Common Shares	RSUs/Deferred Stock Units	Options Exercisable	% Common
Ronald D. Brown	0	0	0	72,550	0	* (<1%)

Deferred stock: Brown has deferred receipt of 72,550 shares until separation; dividends on deferred stock credited as RSUs .
Director stock ownership guideline: 5× cash retainer; all directors have met the requirement .
Hedging/pledging: Company policy prohibits all directors from hedging or pledging AOS securities .

Governance Assessment

Committee leadership and engagement: Brown chairs the PCC, central to pay‑for‑performance architecture, clawback oversight, and share ownership guidelines; PCC held four meetings in 2024 . As Presiding Director, he leads executive sessions and agenda coordination, strengthening independent oversight .
Independence and attendance: Board affirms independence and financial literacy; 2024 attendance was effectively full with one unnamed exception; five executive sessions held, supporting robust oversight .
Pay‑for‑performance signals: Strong say‑on‑pay support (2024 approval ~97%); 2025 advisory vote showed For 33,247,046 vs Against 1,993,686, indicating continued investor alignment with compensation practices overseen by the PCC .
Controlled company mitigants: Despite controlled company status via Smith Family Voting Trust, AOS does not use NYSE exemptions, maintains majority independent Board and fully independent committees—reducing governance risk .
Director compensation alignment: 2025 adjustments increase equity retainer and chair fees to match market practice, maintaining alignment and competitiveness while preserving cash/equity balance . Brown’s 2024 compensation comprised cash fees of $141,000 and equity of $140,064, reflecting committee leadership and equity alignment .
Conflicts/related‑party: NGC process and disclosures report no material related‑party transactions or director conflicts; Brown is not identified in any exceptions .

Say‑on‑Pay & Shareholder Feedback

Year	For	Against	Abstain	Broker Non‑Vote
2024	34,550,676	1,202,529	16,709	681,393
2025	33,247,046	1,993,686	14,909	682,742

AOS notes ~97% approval at the 2024 annual meeting, which informed PCC’s 2025 program with minimal changes .

Director Compensation Notes (Structure and Brown‑Specific)

Item	Detail
2024 equity grant	1,626 shares at $86.14 per share, grant value $140,064; paid upon director election; Brown defers receipt under non‑qualified plan
Deferred compensation plan	Directors may defer fees/stock; dividends on deferred stock credited as RSUs; Brown defers stock awards
Orientation/engagement	New directors required to complete detailed orientation; no extra pay; supports effective Board function

Risk Indicators & RED FLAGS

RED FLAGS: None disclosed regarding Brown—no related‑party transactions, hedging/pledging prohibited, committees fully independent .
Structural considerations: Dual‑class/controlled company status exists; mitigated by independent committee structures and non‑use of controlled company exemptions . The Board requests investors consider family stewardship and committee independence when voting on directors .

Compensation Committee Oversight

Topic	PCC Practice
Consultant independence	WTW engaged; NGC reviews independence; PCC concluded no conflicts; 2024 fees: $90,592 (executive comp advisory/board benchmarking)
Benchmarking	Market median targeting using WTW broad‑industry databases; multiple elements analyzed annually
Clawback policy	Compliant with SEC/NYSE; extends beyond executives to all equity recipients in certain cases; covers restatements and detrimental conduct

Shareholder Voting – Directors (2025)

Class	Candidate	For	Withheld	Broker Non‑Vote
Class A	Ronald D. Brown	25,322,445	0	0

Brown received unanimous Class A support in 2025, reinforcing investor confidence in his governance leadership .

Equity Ownership and Alignment Summary

Ownership: Brown beneficially owns 0 Common/Class A shares; has 72,550 RSUs/deferred stock units; <1% of Common outstanding .
Alignment: Director guideline of 5× cash retainer met by all directors; Brown’s large deferred stock position and equity retainer indicate skin‑in‑the‑game aligned with shareholder interests .

Conclusion

Brown’s long tenure, independent status, and leadership as PCC Chair and Presiding Independent Director are positives for Board effectiveness, pay oversight, and investor confidence. No material conflicts or related‑party exposures are disclosed; strong say‑on‑pay results and robust clawback/anti‑hedging policies further support governance quality .