Nora LaFreniere

About Nora LaFreniere

Executive Vice President & General Counsel of Otis Worldwide and a Named Executive Officer. 2024 company performance that drove incentive outcomes: organic sales grew 1.4% on $14.3B sales, adjusted operating margin expanded 50 bps, adjusted EPS rose 8.2% to $3.83, operating cash flow was $1.56B and adjusted free cash flow was ~$1.57B . Nora participates in Otis’ standard STI and LTI programs, which tie pay to adjusted net income, free cash flow, organic sales growth, new equipment orders, and long-term EPS and organic growth, with a relative TSR modifier .

Fixed Compensation (Current Year)

Item	2024
Base Salary ($)	690,000
STI Target (% of Salary)	80%
Actual STI Paid ($)	644,000
Salary Change (effective 4/1/2024)	+$40,000 (from $650,000 to $690,000)

Multi‑Year Reported Compensation (Summary Compensation Table)

Component ($)	2022	2023	2024
Salary	610,000	642,500	680,000
Stock Awards (RSUs/PSUs grant-date fair value)	1,100,733	1,206,618	4,370,661
Option/SAR Awards (grant-date fair value)	354,724	385,178	432,564
Non-Equity Incentive Plan (STI)	630,000	578,000	644,000
Change in Pension Value & NQDC Earnings	–	8,321	83,769
All Other Compensation	214,817	165,175	160,515
Total	2,910,274	2,985,792	6,371,509

Performance Compensation

Short‑Term Incentive (STI) – 2024 Design and Results

Metric	Weighting	Target	Actual	Payout Factor (%)
Adjusted Net Income ($M)	40%	1,552	1,564	46
Adjusted Free Cash Flow ($M)	30%	1,579	1,571	29
Organic Sales Growth (%)	15%	2.8%	1.4%	13
New Equipment Orders Growth (%)	15%	-2.5%	-7.6%	11
ESG Multiplier	+/-10% potential	—	+7.5% applied	—

Notes:

2024 STI metrics and weights unchanged from 2023; ESG moved to a holistic +/-10% assessment (+7.5% in 2024) .
Nora’s individual performance factor: 110%, contributing to the $644,000 STI payment .

Long‑Term Incentive (LTI) – Program Design

Annual mix for NEOs: 50% PSUs, 25% RSUs, 25% SARs .
PSUs (2024–2026 cycle): 60% weight on cumulative adjusted EPS (threshold $11.01, target $12.23, max $13.13), 40% weight on average annual organic sales growth (threshold 1.1%, target 3.1%, max 5.1%), with a relative TSR multiplier from 0.8 to 1.2 vs S&P 500 Industrials .
RSUs: vest ratably over 3 years; SARs: vest ratably over 3 years; SARs expire in 10 years .

2024 Grants to Nora LaFreniere

Grant Date	Instrument	Units/Target	Grant-Date Fair Value ($)	Vesting
2/6/2024	PSUs	9,409 target	907,192	3-year performance; TSR modifier
2/6/2024	RSUs	4,705	432,578	1/3 per year over 3 years
2/6/2024	SARs	17,781 @ $91.94	432,564	1/3 per year over 3 years; 10-year term
7/23/2024	One‑time RSUs	30,808	3,030,891	1/3 on 1st anniversary; 2/3 on 3rd anniversary; no accelerated retirement vesting

Equity Ownership & Alignment

Beneficial Ownership (as of March 17, 2025)

Item	Value
Total Shares Beneficially Owned	80,520
SARs Exercisable within 60 days (net shares)	55,593
% of Class	<1% (asterisk indicated)

Hedging and pledging of company stock are prohibited for directors and officers .
Stock ownership guideline for “Other NEOs”: 3x base salary; compliance reviewed annually; RSUs/DSUs count towards ownership, options/SARs and unvested PSUs do not .

Outstanding Equity Awards (12/31/2024)

Category	Units (#)	Market Value ($)
Unvested RSUs (various grants)	31,060 (7/23/2024)	2,876,467
Unvested RSUs (2/6/2024)	4,778	442,491
Unvested RSUs (2/7/2023)	3,171	293,666
Unvested RSUs (2/3/2022)	1,509	139,748
Unearned PSUs (unvested)	9,556 (2/6/2024)	884,981
Unearned PSUs (unvested)	19,006 (2/7/2023)	1,760,146
Unearned PSUs (unvested)	9,018 (2/3/2022)	835,157
Otis SARs – Unexercisable	17,781 @ $91.94; exp. 2/5/2034	—
Legacy SARs (RTX) – Exercisable	10,215 @ $82.35; exp. 1/2/2027	—
Legacy SARs (RTX) – Exercisable	17,876 @ $71.01; exp. 1/3/2026	—

Notes:

Nora realized $2,496,446 from RSU/PSU vesting and $536,765 from Otis SAR exercises in 2024; separate legacy RTX/Carrier SAR exercises realized $411,473 (not in option table) .

Employment Terms

No individual employment contract (U.S.-based ELG members generally have none); governed by ELG Severance and CIC plans .
Post-employment restrictive covenants: non-competition and non-solicitation apply under severance programs .

Severance (ELG Severance Plan)

Cash severance: 1x base salary + target STI (1.5x for CEO), prorated STI at actual performance, up to 12 months healthcare and outplacement, subject to non-compete/non-solicit; cash severance is reduced by value of any vesting ELG RSUs .
Nora holds legacy ELG RSUs (converted from UTC) that vest upon “mutually agreeable separation” or retirement (≥62); she has met service condition for eligibility .

Change‑in‑Control (CIC) Severance Plan

If terminated without cause or resigns for good reason within two years post-CIC: cash severance of 2x base salary + 2x target STI (CEO: 3x), prorated target STI for year of termination, up to 12 months healthcare, outplacement, financial planning; equity vests (PSUs at target or actual, whichever is greater); 1‑year non-compete and 2‑year non‑solicit required .

Potential Payments (Selected Event Scenarios)

Scenario (as of 12/31/2024)	Total ($)	Key Components
Death/Disability	9,390,246	STI $644,000; PPP pension $1,289,912; Stock awards $8,577,558; SARs $168,688
Qualifying CIC Termination (within 2 years)	11,923,028	Cash severance $2,484,000; STI $644,000; PPP $1,289,912; Stock awards $8,577,558; SARs $168,688; other benefits $48,782
Involuntary Termination without Cause	4,511,599	STI $644,000; PPP $1,289,912; stock awards $3,735,795; SARs $99,022; other benefits $32,782 (no cash severance due after ELG RSU netting)

Clawbacks

Two recovery policies adopted in 2023: mandatory recovery of erroneously awarded compensation after a restatement (3‑year lookback) and broader misconduct-related recovery for STI/LTI (Cause, post-termination breaches, harm to company, recalculated outcomes), with Committee discretion .

Perquisites and Other

2024 “All Other Compensation” includes vehicle program costs ($17,388), company contributions to savings/deferral plans ($114,478), financial planning ($16,000), health benefits ($11,083), and miscellaneous ($1,566) totaling $160,515 .

Pension

Only current NEO participating in Otis Pension Preservation Plan (PPP), a frozen nonqualified DB plan (final average earnings and cash balance components), with detailed eligibility and payout structures; estimated PPP present value used in event tables: $1,289,912 for Nora .

Compensation Structure Analysis

Increased equity mix and one-time retention RSUs ($3.0M) in 2024 enhance retention but reduce retirement acceleration features (no accelerated retirement vesting on special RSUs), pointing to stronger retention locks through 2027 .
Annual LTI remains majority performance-based (50% PSUs) with heightened EPS targets and TSR linkage, supporting pay-for-performance alignment .
Hedging/pledging bans and stock ownership guidelines (3x salary) reinforce alignment; compliance status for individuals is reviewed annually but not disclosed .

Investment Implications

Near‑term insider selling pressure may rise around scheduled RSU vests (2025 and 2027) given sizable unvested RSU balances, though bans on hedging/pledging and ownership guidelines mitigate misalignment risk .
Retention risk is reduced by 2024 one‑time RSUs and legacy ELG RSUs eligibility; severance frameworks (Severance/CIC) plus post‑termination covenants provide orderly transition economics and alignment under change scenarios .
Performance levers for Nora’s variable pay hinge on adjusted net income, FCF, organic sales and orders (STI), and multi‑year EPS/organic growth/TSR (PSUs), directly tied to Otis’ Service portfolio growth, modernization momentum, and cash generation discipline demonstrated in 2024 .